vTv Therapeutics Inc.

Previous wording

•the impact of delays in the commencement, enrollment and completion of our clinical trials;

Current wording

•the impact of delays in the commencement, enrollment and completion of our clinical trials, including clinical holds or other regulatory limitations on our clinical development programs;

Previous wording

•the potential failure of our clinical trials or our inability to receive regulatory approval for our drug candidates;

Current wording

•potential failure of our clinical trials or our inability to receive regulatory approval for our drug candidates;

Previous wording

•the impact of computer system failures, cyber-attacks or a deficiency in our cyber-security;

Current wording

•the impact of computer system failures, cyberattacks or a deficiency in our cybersecurity;

Previous wording

•the potential for conflicts of interest with our directors who have relationships with MacAndrews;

Current wording

•the potential for conflicts of interest with our directors who have relationships with major investors;

Previous wording

We are a clinical stage pharmaceutical company with limited operating history. We have never been profitable and do not expect to be profitable in the foreseeable future. We have incurred net losses in each year since beginning to develop our drug candidates, including net losses of approximately $20.3 million, $19.2 million and $13.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had a total accumulated deficit of approximately $281.0 million. In addition, we have not commercialized any products and have never generated any revenue from the commercialization of any product. We have devoted most of our financial resources to research and development, including our preclinical development activities and clinical trials. We expect to incur significant additional operating losses for the next several years, at least, as we conduct our research and development activities, advance drug candidates through clinical development, complete clinical trials, seek regulatory approval and, if we receive FDA approval, commercialize our products. Furthermore, the costs of advancing drugs into each succeeding clinical phase tend to increase substantially over time. The total costs to advance any of our drug candidates to marketing approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of products or achieve or maintain profitability. We expect to continue to incur significant additional expenses as we continue the development ofcadisegliatin. Furthermore, our ability to successfully develop, commercialize and license our products and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Relating to the Discovery, Development and Regulatory Approval of Our Drug Candidates” and “—Risks Relating to the Commercialization of Our Drug Candidates.” As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. The amount of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. In addition, we may not be able to enter into any collaborations that will generate significant cash. If we are unable to develop and commercialize one or more of our drug candidates either alone or with collaborators, or if revenues from any drug candidate that receives marketing approval are insufficient, we will not achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability. If we are unable to achie…

Excerpt shortened here; the source contains the full paragraph.

Current wording

We are a clinical stage pharmaceutical company with limited operating history. We have never been profitable and do not expect to be profitable in the foreseeable future. We have incurred net losses in each year since beginning to develop our drug candidates, including net losses of approximately $18.5 million, $20.3 million and $19.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had a total accumulated deficit of approximately $299.7 million. We have not commercialized any products and have devoted most of our financial resources to research and development, including our preclinical development activities and clinical trials. We expect to incur significant additional operating losses for the next several years, at least, as we conduct our research and development activities, advance drug candidates through clinical development, complete clinical trials, seek regulatory approval and, if we receive FDA approval, commercialize our products. Furthermore, the costs of advancing drugs into each succeeding clinical phase tend to increase substantially over time. The total costs to advance any of our drug candidates to marketing approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of products or achieve or maintain profitability. We expect to continue to incur significant additional expenses as we continue the development ofcadisegliatin. Furthermore, our ability to successfully develop, commercialize and license our products and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Relating to the Discovery, Development and Regulatory Approval of Our Drug Candidates” and “—Risks Relating to the Commercialization of Our Drug Candidates.” As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. The amount of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. In addition, we may not be able to enter into any collaborations that will generate significant cash. If we are unable to develop and commercialize one or more of our drug candidates either alone or with collaborators, or if revenues from any drug candidate that receives regulatory approval are insufficient, we will not achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability. If we are unable to achieve and then maintain profitability, the value of our equity securities will be materially a…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We will need additional capital to complete the development and commercialization of cadisegliatin (TTP399) and our other drug candidate. If we are unable to raise sufficient capital for these purposes, we would be forced to delay, reduce or eliminate our product development programs.

Current wording

We will need additional capital to complete the development and commercialization of cadisegliatin (TTP399) and our other drug candidates. If we are unable to raise sufficient capital for these purposes, we would be forced to delay, reduce or eliminate our product development programs.

Previous wording

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect to continue to incur significant research and development expenses in connection with our ongoing activities, particularly as we undertake additional clinical trials ofcadisegliatinand our other drug candidates and continue to work on our other research programs. Although we anticipate that the proceeds from the Private Placement will enable us to conduct a Phase 3 clinical trial forcadisegliatin, our current capital will not be sufficient for us to complete the development of our drug candidates. As such, we will need to raise additional capital to fund the ongoing and planned trials for our drug candidates and prior to the commercialization of any of our drug candidates. We are seeking possible additional partnering opportunities and grants for our GKA, GLP-1r and other drug candidates which we believe may provide additional cash for use in our operations and the continuation of the clinical trials for our drug candidates. We also continue to evaluate other financing strategies to fund our ongoing trials. Such financing strategies include direct equity investments and future public offerings of our common stock. The timing and availability of such financing are not yet known.

Current wording

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect to continue to incur significant research and development expenses in connection with our ongoing activities, particularly as we undertake additional clinical trials ofcadisegliatinand our other drug candidates and continue to work on our other research programs. Our current capital will not be sufficient for us to complete the development ofcadisegliatin or our other drug candidates. As such, we will need to raise additional capital to fund the planned trials for our drug candidates and prior to the commercialization of any of our drug candidates. We are seeking possible additional partnering opportunities for our GKA, GLP-1r and other drug candidates which we believe may provide additional cash for use in our operations and the continuation of the clinical trials for our drug candidates. We also continue to evaluate other financing strategies to fund our ongoing trials. Such financing strategies include direct equity investments and future public offerings of our common stock. The timing and availability of such financing are not yet known.

Previous wording

If the FDA or other regulators require that we perform additional studies beyond those we currently expect, or if there are any delays in completing our clinical trials or the development of any of our drug candidates, our expenses could increase beyond what we currently anticipate and the timing of any potential product approval may be delayed. We have no commitments or arrangements for any additional financing to fund our research and development programs other than the funds available to us under oursales agreement (the “TD Cowen Sales Agreement”) with Cowen & Company, LLC (“TD Cowen”) (the “TD Cowen ATM Offering”). Under this arrangement, the Company has the right to sell shares of the Company’s Class A common stock, subject to certain limitations and conditions as set forth in the related agreement. As of March 13, 2024, there remains $50.0 million of availability under the TD Cowen ATM Offering, although the amount of our Class A common stock that we may offer and sell under the TD Cowen ATM Offering during any 12 calendar month period is currently limited to one-third of the aggregate market value of our voting and non-voting common equity held by non-affiliates pursuant to General Instruction I.B.6 of Form S-3. In addition, our ability to use this source of capital is dependent on a number of factors, including the prevailing market price of and the volume of trading in our Class A common stock. We also will need to raise substantial additional capital in the future to conduct further clinical trials ofcadisegliatinand to continue developing our other drug candidates. Although we continue to seek financing, partnering and licensing transactions for the further development ofcadisegliatin, these efforts may not be successful. Because successful development of our drug candidates is uncertain, we are unable to estimate the actual funds required to complete research and development and commercialize and license our products under development.

Current wording

If the FDA or other regulators require that we perform additional studies beyond those we currently expect, or if there are any delays in completing our clinical trials or the development of any of our drug candidates, our expenses could increase beyond what we currently anticipate and the timing of any potential product approval may be delayed. We have no commitments or arrangements for any additional financing to fund our research and development programs other than the funds we may raise through the sale of our Class A common stock under oursales agreement (the “TD Cowen Sales Agreement”) with Cowen & Company, LLC (“TD Cowen”) (the “TD Cowen ATM Offering”). As of March 20, 2025, there remains $47.5 million of availability under the TD Cowen ATM Offering, although the amount of our Class A common stock that we may offer and sell under the TD Cowen ATM Offering during any 12 calendar month period is currently limited to one-third of the aggregate market value of our voting and non-voting common equity held by non-affiliates pursuant to General Instruction I.B.6 of Form S-3. In addition, our ability to use this source of capital is dependent on a number of factors, including the prevailing market price of and the volume of trading in our Class A common stock. We also will need to raise substantial additional capital in the future to conduct further clinical trials ofcadisegliatinand to continue developing our other drug candidates. Although we continue to seek financing, partnering and licensing transactions for the further development ofcadisegliatin, these efforts may not be successful. Because successful development of our drug candidates is uncertain, we are unable to estimate the actual funds required to complete research and development and commercialize and license our products under development.

Previous wording

Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funds other than those available to us under the TD Cowen ATM Offering. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Current wording

Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Previous wording

Delays in the commencement, enrollment and completion of clinical trials could increase our product development costs or limit the regulatory approval of our drug candidates. We do not know whether current or future clinical trials of our drug candidates will begin on time or at all or will be completed on schedule or at all. The commencement, enrollment and completion of our clinical trials can be delayed for a variety of reasons, including:

Current wording

Delays in the commencement, enrollment and completion of clinical trials, including but not limited to regulatory clinical holds, could increase our product development costs or limit the regulatory approval of our drug candidates. We do not know whether current or future clinical trials of our drug candidates will begin on time or at all or will be completed on schedule or at all. The commencement, enrollment and completion of our clinical trials can be delayed for a variety of reasons, including:

Previous wording

•regulatory objections to commencing a clinical trial;

Current wording

•regulatory objections to commencing or continuing a clinical trial, including the imposition of a clinical hold;

Previous wording

We intend to seek collaborative relationships for the development and/or commercialization of our drug candidates, including cadisegliatin. Failure to obtain a collaborative relationship for these candidates, particularly in the European Union and for other markets requiring extensive sales efforts, may significantly impair the potential for our drug candidates. We also will need to enter into collaborative relationships to provide funding to support our other research and development programs. The process of establishing and maintaining collaborative relationships is difficult, time-consuming and involves significant uncertainty, including:

Current wording

We intend to seek collaborative relationships for the development and/or commercialization of our drug candidates, including cadisegliatin. Failure to obtain a collaborative relationship for these candidates, particularly in the European Union and for other markets requiring extensive sales efforts, may significantly impair the potential for our drug candidates. We also will need to enter into collaborative relationships to provide funding to support our other research and development programs.

Previous wording

Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.

Current wording

Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.

Previous wording

If we are unable to maintain our listing on Nasdaq, it may become more difficult for our stockholders to sell our Class A common stock in the public market, and the price of our Class A common stock may be adversely affected due to the likelihood of decreased liquidity resulting from delisting. In addition, it may inhibit or preclude our ability to raise additional financing.

Current wording

Nasdaq requires issuers to comply with certain standards in order to remain listed on its exchange. If we are unable to maintain our listing on Nasdaq, it may become more difficult for our stockholders to sell our Class A common stock in the public market, and the price of our Class A common stock may be adversely affected due to the likelihood of decreased liquidity resulting from delisting. In addition, it may inhibit or preclude our ability to raise additional financing.

Previous wording

Affiliates of MacAndrews & Forbes Incorporated (together with its affiliates “MacAndrews”) has substantial influence over our business, and their interests may differ from our interests or those of our other stockholders.

Current wording

Affiliates of MacAndrews & Forbes Incorporated (together with its affiliates “MacAndrews”) and the investor that participated in the Private Placement (the "Private Placement Investors," and together with MacAndres, our "Significant Investors") have substantial influence over our business, and their interests may differ from our interests or those of our other stockholders.

Previous wording

MacAndrews holds, directly or indirectly, a significant percentage of our combined voting power. Due to its ownership and rights under our investor rights agreement, amended and restated certificate of incorporation and amended and restated bylaws, MacAndrews has substantial influence over us and our subsidiaries.

Current wording

Our Significant Investors hold, directly or indirectly, a significant percentage of our combined voting power. Due to the Significant Investors' ownership and rights under the investor rights agreement (as amended the "Investor Rights Agreement") with an affiliate of MacAndrews, the securities purchase agreement (the "Securities Purchase Agreement") and registration rights agreement (the "Registration Rights Agreement) with the Private Placement Investors, our Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation") and Second Amended and Restated By-laws (the "By-laws"), the Significant Investors have substantial influence over us and our subsidiaries.

Previous wording

The interests of MacAndrews may differ from our interests or those of our other stockholders and the concentration of control in MacAndrews will limit other stockholders’ ability to influence corporate matters. The concentration of ownership and voting power with MacAndrews may also delay, defer or even prevent an acquisition by a third party or other change of control of our company and may make some transactions more difficult or impossible without the support of MacAndrews, even if such events are in the best interests of our other stockholders. The concentration of voting power with MacAndrews may have an adverse effect on the price of our Class A common stock. Our company may take actions that our other stockholders do not view as beneficial, which may adversely affect our results of operations and financial condition and cause the value of our Class A common stock to decline.

Current wording

The interests of our Significant Investors may differ from our interests or those of our other stockholders and the concentration of control in our Significant Investors will limit other stockholders’ ability to influence corporate matters. The concentration of ownership and voting power of our Significant Investors may also delay, defer or even prevent an acquisition by a third party or other change of control of our company and may make some transactions more difficult or impossible without the support of our Significant Investors, even if such events are in the best interests of our other stockholders. The concentration of voting power with our Significant Investors may have an adverse effect on the price of our Class A common stock. Our company may take actions that our other stockholders do not view as beneficial, which may adversely affect our results of operations and financial condition and cause the value of our Class A common stock to decline.

Previous wording

Our directors who have relationships with MacAndrews and the investors that participated in the Private Placement (the “Private Placement Investors”) may have conflicts of interest with respect to matters involving our company.

Current wording

Our directors who have relationships with the Significant Investors may have conflicts of interest with respect to matters involving our company.

Previous wording

One of our directors is affiliated with MacAndrews and two of our directors are associated with the Private Placement Investors. These directors will have fiduciary duties to us and in addition will have duties to MacAndrews and the Private Placement Investors, as applicable. In addition, our amended and restated certificate of incorporation provides that none of MacAndrews, any of our non-employee directors who are employees, affiliates or consultants of MacAndrews or its affiliates (other than us or our subsidiaries) or any of their respective affiliates will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual directs a corporate opportunity to MacAndrews or its affiliates instead of us, or does not communicate information regarding a corporate opportunity to us that such person or affiliate has directed to MacAndrews or its affiliates. As a result, such circumstances may entail real or apparent conflicts of interest with respect to matters affecting both us and MacAndrews or the Private Placement Investors, whose interests, in some circumstances, may be adverse to ours. In addition, as a result of MacAndrews’ and the Private Placement Investors’ indirect ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and MacAndrews, the Private Placement Investors or any of their respective affiliates, including potential business transactions, potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters.

Current wording

One of our directors is affiliated with MacAndrews and two of our directors are associated with the Private Placement Investors. These directors will have fiduciary duties to us and in addition will have duties to MacAndrews and the Private Placement Investors, as applicable. In addition, our Certificate of Incorporation provides that none of MacAndrews, any of our non-employee directors who are employees, affiliates or consultants of MacAndrews or its affiliates (other than us or our subsidiaries) or any of their respective affiliates will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual directs a corporate opportunity to MacAndrews or its affiliates instead of us, or does not communicate information regarding a corporate opportunity to us that such person or affiliate has directed to MacAndrews or its affiliates. As a result, such circumstances may entail real or apparent conflicts of interest with respect to matters affecting both us and MacAndrews or the Private Placement Investors, whose interests, in some circumstances, may be adverse to ours. In addition, as a result of MacAndrews’ and the Private Placement Investors’ indirect ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and MacAndrews, the Private Placement Investors or any of their respective affiliates, including potential business transactions, potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters.

Previous wording

As of December 31, 2023, MacAndrews and its affiliates held 577,108 non-voting common units of vTv LLC (“vTv Units”) and the same number of shares of vTv Therapeutics Inc. Class B common stock as well as an aggregate of 912,982 shares of our Class A common stock. As a result, MacAndrews and its affiliates held shares representing approximately 56.0% of the combined voting power of our outstanding common stock. Pursuant to the terms of the Exchange Agreement among the Company, vTv LLC and the holders of vTv Units party thereto (the “Exchange Agreement”), vTv Units (along with the corresponding number of shares of our Class B common stock) will be exchangeable for (i) shares of our Class A common stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv Therapeutics LLC). Shares of our Class A common stock issuable upon an exchange of vTv Units as described above would be considered “restricted securities,” as that term is defined in Rule 144 under the Securities Act, unless the exchange is registered under the Securities Act.

Current wording

As of December 31, 2024, MacAndrews and its affiliates held 577,108 non-voting common units of vTv LLC (“vTv Units”) and the same number of shares of vTv Therapeutics Inc. Class B common stock as well as an aggregate of 912,982 shares of our Class A common stock. As a result, MacAndrews and its affiliates held shares representing approximately 46.7% of the combined voting power of our outstanding common stock. Pursuant to the terms of the Exchange Agreement among the Company, vTv LLC and the holders of vTv Units party thereto (the “Exchange Agreement”), vTv Units (along with the corresponding number of shares of our Class B common stock) will be exchangeable for (i) shares of our Class A common stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A common stock), at our option (as the managing member of vTv Therapeutics LLC). Shares of our Class A common stock issuable upon an exchange of vTv Units as described above would be considered “restricted securities,” as that term is defined in Rule 144 under the Securities Act, unless the exchange is registered under the Securities Act.

Previous wording

We also have issued warrants to MacAndrews to purchase 45,595 shares of our Class A common stock.

Current wording

We also have issued warrants to MacAndrews to purchase 40,639 shares of our Class A common stock.

Previous wording

Further, we have entered into an investor rights agreement with an affiliate of MacAndrews providing certain governance and registration rights. Pursuant to the investor rights agreement, we filed a shelf registration statement on Form S-3 in June 2019 to register certain shares previously issued to MacAndrews. The investor rights agreement was amended on February 27, 2024 to alter MacAndrews' governance rights.

Current wording

Further, we have entered into the Investor Rights Agreement with an affiliate of MacAndrews providing certain governance and registration rights. Pursuant to the Investor Rights Agreement, we filed a shelf registration statement on Form S-3 in June 2019 to register certain shares previously issued to MacAndrews. The Investor Rights Agreement was amended on February 27, 2024 to alter MacAndrews' governance rights.

Previous wording

Additionally, we entered into a securities purchase agreement and a registration rights agreement with the Private Placement Investors providing certain governance and registration rights.

Current wording

Additionally, we entered into the Securities Purchase Agreement and the Registration Rights Agreement with the Private Placement Investors providing certain governance and registration rights.

Previous wording

On February 23, 2024, the Board of Directors approved the adoption of an equity incentive plan (the "2024 Plan") to replace the existing 2015 Plan. The 2024 Plan, if approved by the shareholders at the 2024 annual meeting of shareholders, will authorize us to issue equity awards relating to an additional 750,000 shares of our Class A Common Stock.

Current wording

On February 23, 2024, the Board of Directors approved the adoption of an equity incentive plan (the "2024 Plan") to replace the existing 2015 Plan and the 2024 Plan was approved by the stockholders at our 2024 annual meeting of shareholders. The 2024 Plan authorizes us to issue equity awards relating to up to an additional 750,000 shares of our Class A Common Stock.

Previous wording

Provisions in our charter and bylaws and investor agreements, and provisions of Delaware law may delay or prevent our acquisition by a third party, which might diminish the value of our common stock.

Current wording

Provisions in our Certificate of Incorporation and By-laws and investor agreements, and provisions of Delaware law may delay or prevent our acquisition by a third party, which might diminish the value of our common stock.

Previous wording

Our amended and restated certificate of incorporation and amended and restated bylaws contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of the Board of Directors. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. The provisions include, among others:

Current wording

Our Certificate of Incorporation and By-laws contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of the Board of Directors. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. The provisions include, among others:

Previous wording

Section 203 of the Delaware General Corporation Law may affect the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law. Nevertheless, the amended and restated certificate of incorporation contains provisions that have the same effect as Section 203 of the Delaware General Corporation Law, except that they provide that MacAndrews and its various successors and affiliates (and transferees of any of them) will not be deemed to be “interested stockholders,” regardless of the percentage of our stock owned by them, and accordingly will not be subject to such restrictions. Further, the Private Placement Investors are also not deemed to be “interested stockholders,” regardless of the percentage of our stock owned by them, and accordingly will not be subject to the restrictions set forth in Section 203 of the Delaware General Corporation Law

Current wording

Section 203 of the Delaware General Corporation Law may affect the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. We have elected in our Certificate of Incorporation not to be subject to Section 203 of the Delaware General Corporation Law. Nevertheless, the Certificate of Incorporation contains provisions that have the same effect as Section 203 of the Delaware General Corporation Law, except that they provide that MacAndrews and its various successors and affiliates (and transferees of any of them) will not be deemed to be “interested stockholders,” regardless of the percentage of our stock owned by them, and accordingly will not be subject to such restrictions. Further, the Private Placement Investors are also not deemed to be “interested stockholders,” regardless of the percentage of our stock owned by them, and accordingly will not be subject to the restrictions set forth in Section 203 of the Delaware General Corporation Law.

Previous wording

The provisions of our amended and restated certificate of incorporation and amended and restated bylaws, the significant common stock ownership of MacAndrews and the ability of the Board of Directors to create and issue a new series of preferred stock or implement a stockholder rights plan could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of our common stock in the future, which could reduce the market price of our common stock.

Current wording

The provisions of our Certificate of Incorporation and By-laws, the significant common stock ownership of the Significant Investors and the ability of the Board of Directors to create and issue a new series of preferred stock or implement a stockholder rights plan could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of our common stock in the future, which could reduce the market price of our common stock.