EQUITY FUNDING

Equity Funding Facility

How does it work?
RCP establishes a purchase agreement with the Company to purchase up to an agreed aggregate amount of newly issued common stock over a 24-month period.

At the Company’s option, RCP purchases tranches of common stock (“Draw”) at current Market Prices. The advantage to the Issuer is immediate access to funding when needed.

Features
• EFF provides similar benefits of a Shelf Registration for non-shelf eligible companies

• EFF provides same flexibility as traditional credit line but utilizes issuance of
common stock rather than incurrence of debt obligation

• May be exercised as often as monthly to fund R&D/ Operations or build cash reserves

• Requires as little as a 5-business day notice to “Draw”

• Typically available for a 2-year term

• Purchase price is tied to common stock market price at time of Draw, less a small discount

Equity Funding Facility vs. Straight Private Placement

Equity Funding Facility
• Flexibility & Control - Issuer exercises all control
• 2-year commitment
• 1 registration
• 1 subscriber
• “Just In Time" financing — similar to a Shelf Registration
• Blended dilution over time
• Known dilution at time of issuance
• Intangible value of Equity Facility
> Financial viability of Company
> Vendors
> Strategic Partners
> Suitors

Straight Private Placement
• One every 9-12 months
• Multiple registrations
• Uncertainty of market conditions
• Different entities to deal with negotiation of legal documents
• Uncertainty of dilution in “Variable or Reset Type” transactions
• Cash repayment may be required