Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Activist Investing LLC (“Activist
Investing”) and David E. Lazar (collectively, “Activist” or “we”), are significant stockholders of Titan
Pharmaceuticals, Inc., a Delaware corporation (“TTNP”, “Titan” or the “Company”), who, together with
the other participants in this solicitation, beneficially own in the aggregate approximately 25.2% of the outstanding shares of common
stock, par value $0.001 per share (the “Common Stock”), of the Company.
The Company has announced
that it would not object to the presentation of the Proposals at the Special Meeting and that it would not be contesting Activist’s
solicitation nor soliciting proxies in connection with the Special Meeting. We are seeking to expand the Board and fill the resulting
vacancies with our six (6) highly qualified director candidates because we firmly believe that our nominees collectively possess the requisite
skillsets, experience, drive and sense of accountability needed to lead the Company’s previously announced strategic review of alternatives
to maximize value for the Company’s stockholders.
Accordingly, we are soliciting
your proxy for the Special Meeting to vote in favor of the following proposals:
The
Special Meeting will be held virtually via live webcast. You will not be able to attend the Special Meeting in person at a physical
location. You are entitled to participate in the Special Meeting if you are a stockholder of record as of the close of business on the
Record Date or hold a legal proxy for the meeting provided by your broker, bank or other nominee. You may attend the Special Meeting virtually
by visiting the following web address https://www.cstproxy.com/titanpharm/sm2022. Please see the section titled “Virtual Meeting”
for additional information.
As of the date hereof, the
members of Activist, including the Nominees, beneficially owned in the aggregate 3,690,468 shares (the “Activist Group Shares”)
of Common Stock. We intend to vote the Activist Group Shares in favor of each of the Proposals at the Special Meeting.
The Company has
announced the close of business on July 22, 2022 as the record date for determining stockholders entitled to notice of and to vote
at the Special Meeting (the “Record Date”). The mailing address of the principal executive offices of the Company is 400
Oyster Point Boulevard, Suite 505, South San Francisco, CA 94080. Stockholders of record at the close of business on the Record Date
will be entitled to vote at the Special Meeting. According to the Company, as of the Record Date, there were 14,629,217 shares of
Common Stock outstanding.
The date of this Proxy Statement
is __________, 2022. This Proxy Statement and the accompanying WHITE Proxy Cards are first being sent or given to stockholders
on or about ___________, 2022.
THIS SOLICITATION IS BEING
MADE BY ACTIVIST AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF THE COMPANY. WE ARE NOT AWARE OF ANY OTHER MATTERS TO BE
BROUGHT BEFORE THE SPECIAL MEETING OTHER THAN AS SET FORTH IN THIS PROXY STATEMENT. SHOULD OTHER MATTERS, WHICH ACTIVIST IS NOT AWARE
OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE SPECIAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED WHITE
PROXY CARD WILL VOTE ON SUCH MATTERS IN OUR DISCRETION.
PROPOSAL NO. 2
ELECTION PROPOSAL
The Board is currently composed of five (5) directors, each with a term
expiring at the 2022 Annual Meeting; however, effective upon stockholder approval of
the Board Expansion Proposal, the size of the Board will be increased to eleven (11) directors, resulting in six (6) vacancies on the
Board. Activist has nominated six (6) independent, highly-qualified Nominees for election to the Board to fill the six (6) vacancies which
would result from stockholder approval of the Board Expansion Proposal.
THE NOMINEES
The following information
sets forth the name, age, business address, present principal occupation, and employment and material occupations, positions, offices,
or employments for the past five years of each of the Nominees. The nominations were made in a timely manner and in compliance with the
applicable provisions of the Company’s governing instruments. The specific experience, qualifications, attributes and skills that
led us to conclude that the Nominees should serve as directors of the Company are set forth below. This information has been furnished
to us by the Nominees.
Avraham Ben-Tzvi, Adv.,
age 51, is the Founder of ABZ Law Office, a boutique Israeli law firm specializing in outsourced general counsel services for publicly
traded as well as private companies and corporations, Investments & Securities Laws, Commercial Law & Contracts and various civil
law matters, which he established in January 2017. Mr. Ben-Tzvi served as Chief Legal Officer and General Counsel of Purple Biotech Ltd.
(formerly Kitov Pharma Ltd.) (NASDAQ/TASE: PPBT), a clinical-stage company advancing first-in-class therapies to overcome tumor immune
evasion and drug resistance, from November 2015 until April 2020. Prior to that, Mr. Ben-Tzvi served as General Counsel and secretary
at Medigus Ltd. (NASDAQ/TASE: MDGS), a minimally invasive endosurgical tools medical device and miniaturized imaging equipment company,
from April 2014 until November 2015. Mr. Ben-Tzvi is a member of the Israel Bar Association, and is also licensed as a Notary by the Israeli
Ministry of Justice. Prior to that he served as an attorney at one of Israel’s leading international law firms where, amongst other
corporate and commercial work, he advised companies and underwriters on various offerings by Israeli companies listing in US and on various
SEC related filings. Prior to becoming a lawyer, Mr. Ben-Tzvi worked in a number of business development, corporate finance and banking
roles at companies in the financial services, lithium battery manufacturing and software development industries. Mr. Ben-Tzvi holds a
B.A., magna cum laude, in Economics from Yeshiva University in New York and an LLB, magna cum laude with Honors, in from Sha'arei Mishpat
College of Law in Hod HaSharon, Israel.
Activist believes that Mr.
Ben-Tzvi’s extensive legal experience and knowledge in the field of civil-commercial law, and in corporate and securities law, and
his previous public company and commercial business experience will make him a valuable addition to the Board.
Peter L. Chasey, Esq.,
age 49, currently serves as the Owner of Chasey Law Offices, a law practice specializing in personal litigation, business litigation and
commercial law, since founding the practice in 2005. Earlier in his career, Mr. Chasey served as staff counsel for one of the largest
insurance companies in the world defending general claims against insured businesses and also served as a land surveyor. Mr. Chasey holds
a B.S. in Political Science and Government from the University of San Diego and a J.D. from the University of San Diego School of Law.
Activist believes that Mr.
Chasey’s commercial law expertise, coupled with his experience leading his own law firm, will make him a valuable addition to the
Board.
Eric Greenberg, age
58, has over 40 years of capital markets experience. As a trader and portfolio manager at hedge funds, his areas of expertise included
the development of trading strategies, portfolio management and deal structuring. Mr. Greenberg was Co-Founder of Blink Charging Co. (NASDAQ:
BLNK), a leader in the EV charging infrastructure industry. In addition, Mr. Greenberg provides investor relation and digital marketing
services for companies across a variety of industries, such as life sciences, fintech, internet platforms and others. Mr. Greenberg holds
a B.B.A in Finance from Baruch College and an M.B.A. in Finance from Baruch College Zicklin School of Business.
Activist believes that Mr.
Greenberg’s more than 40 years’ experience in trading, developing strategies, and portfolio management and public markets
experience in the microcap sector will make him a valuable addition to the Board.
David E. Lazar, age
32, has served as the Chief Executive Officer of Custodian Ventures LLC, a company which specializes in assisting distressed public companies
through custodianship, since February 2018, and Activist Investing LLC, an actively managed investment fund, since March 2018. Previously,
Mr. Lazar served as Managing Partner at Zenith Partners International Inc., a boutique consulting firm, from July 2012 to April 2018.
In his role as Chief Executive Officer of Custodian Ventures LLC, Mr. Lazar has successfully served as a custodian to numerous public
companies across a wide range of industries, including without limitation, Zenosense, Inc. (OTCMKTS: ZENO), C2E Energy, Inc. (OTCMKTS:
OOGI), China Botanic Pharmaceutical Inc. (OTCMKTS: CBPI), One 4 Art Ltd., Romulus Corp., Moveix, Inc., Arax Holdings Corp. (OTCMKTS: ARAT),
ESP Resources, Inc. (OTCMKTS: ESPIQ), Adorbs, Inc., Exobox Technologies Corp. (OTCMKTS: EXBX), Petrone Worldwide, Inc. (OTCMKTS: PFWIQ),
Superbox, Inc. (OTCMKTS: SBOX), Sino Green Land Corp. (OTCMKTS: SGLA), SIPP International Industries, Inc. (OTCMKTS: SIPN), Cereplast,
Inc. (OTCMKTS: CERPQ), Energy 1 Corp. (OTCMKTS: EGOC), ForU Holdings, Inc. (OTCMKTS: FORU), China Yanyuan Yuhui National Education Group,
Inc. (OTCMKTS: YYYH), Pan Global Corp. (OTCMKTS: PGLO), Shengtang International, Inc. (OTCMKTS: SHNL), Alternaturals, Inc. (OTCMKTS: ANAS),
USA Recycling Industries, Inc. (OTCMKTS: USRI), Tele Group Corp., Xenoics Holdings, Inc. (OTCMKTS: XNNHQ), Richland Resources International
Group, Inc. (OTCMKTS: RIGG), AI Technology Group, Inc., Reliance Global Group, Inc. (NASDAQ: RELI), Melt, Inc., Ketdarina Corp., 3D MarkerJet,
Inc. (OTCMKTS: MRJT), Lvpai Group Ltd., Gushen, Inc., FHT Future Technology Ltd., Inspired Builders, Inc., Houmu Holdings Ltd. (OTCMKTS:
HOMU), Born, Inc. (OTCMKTS: BRRN), Changsheng International Group Ltd., Sollensys Corp. (OTCMKTS: SOLS), Guozi Zhongyu Capital Holdings
Co. (OTCMKTS: GZCC) and Cang Bao Tian Xia International Art Trade Center, Inc. Mr. Lazar currently serves as an Advisor to PROMAX Investments
LLC, a position he has held since July 2022, and as an Ambassador at Large for the Arab African Council for Integration and Development,
since March 2022.
Activist believes that Mr.
Lazar’s diverse knowledge of financial, legal and operations management; public company management, accounting, audit preparation,
due diligence reviews and SEC regulations will make him a valuable addition to the Board.
Matthew C. McMurdo, Esq.,
age 50, currently serves as Managing Member of McMurdo Law Group, LLC, a corporate and securities law practice, since 2010. Previously,
Mr. McMurdo was a Partner at Nannarone & McMurdo, LLP, a boutique law firm, from 2008 to 2010. In addition, Mr. McMurdo served as
General Counsel of Berkley Asset Management LLC, the general partner of a real estate fund focused on opportunistic and distressed real
estate assets, from 2011 to 2013. Mr. McMurdo holds a B.S. in Finance from Lehigh University and a J.D., cum laude, from Benjamin
N. Cardozo School of Law.
Activist believes that Mr.
McMurdo’s extensive experience in corporate and securities law and advising many public companies with federal securities law will
make him a valuable addition to the Board.
David Natan, age 69,
currently serves as President and Chief Executive Officer of Natan & Associates, LLC, a consulting firm offering chief financial officer
services to public and private companies in a variety of industries, since 2007. In addition, Mr. Natan currently serves as Executive
Vice President and Chief Financial Officer for Airborne Motorworks, Inc., a privately-held aerospace transportation company, since April
2020. From February 2010 to May 2020, Mr. Natan served as Chief Executive Officer of ForceField Energy, Inc. (OTCMKTS: FNRG), a company
focused on the solar industry and LED lighting products. From February 2002 to November 2007, Mr. Natan served as Executive Vice President
of Reporting and Chief Financial Officer of PharmaNet Development Group, Inc., a drug development services company, and, from June 1995
to February 2002, as Chief Financial Officer and Vice President of Global Technovations, Inc., a manufacturer and marketer of oil analysis
instruments and speakers and speaker components. Prior to that, Mr. Natan served in various roles of increasing responsibility with Deloitte
& Touche LLP, a global consulting firm. Mr. Natan currently serves as a member of the Board of Directors and Chair of the Audit Committee
of Global Diversified Marketing Group, Inc. (OTCMKTS: GDMK), a manufacturer, marketer and distributor of food and snack products, since
February 2021 and serves as a member of the Board of Directors and Chair of the Audit Committee of Sunshine Biopharma, Inc. (NASDAQ: SBFM),
a pharmaceutical and nutritional supplement company, since February 2022. Previously, Mr. Natan served as Chairman of the Board of Directors
of ForceField Energy, Inc., from April 2015 to May 2020, and as a member of the Board of Directors of Global Technovations, Inc., from
December 1999 to December 2001. Mr. Natan holds a B.A. in Economics from Boston University.
Activist believes that Mr.
Natan’s reputation as a seasoned business executive and his extensive experience as a director of technology-enabled public companies
will make him a valuable addition to the Board.
The principal business address
of Mr. Ben-Tzvi is 15 Yad Harutzim St., Jerusalem, Israel. The principal business address of Mr. Chasey is 3295 N. Fort Apache Road, Suite
110, Las Vegas, Nevada 89129. The principal business address of Mr. Greenberg is 710 Carlyle Street, Woodmere, New York 11598. The principal
business address of Mr. Lazar is Villa 1, 14-43rd Street, Jumeirah 2, Dubai, United Arab Emirates. The principal business address of Mr.
McMurdo is 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036. The principal business address of Mr. Natan is 6720 NW 74th
Court, Parkland, Florida 33067.
As of the date hereof, none
of Messrs. Ben-Tzvi, Chasey, Greenberg, McMurdo and Natan beneficially owns any securities of the Company or has entered into any transactions
in securities of the Company during the past two years (other than Mr. Greenberg whose transactions in the securities of the Company during
the past two years in an account jointly held with his child are included in Schedule I).
As of the date hereof, Mr.
Lazar directly beneficially owns 3,331,402 shares of Common Stock. Mr. Lazar, by virtue of his position as the sole member and Chief Executive
Officer of Activist Investing, may be deemed the beneficial owner of 359,066 shares of Common Stock directly beneficially owned by Activist
Investing. The shares of Common Stock directly beneficially owned by Mr. Lazar were purchased with personal funds in the open market.
Mr. Lazar disclaims beneficial ownership of such shares of Common Stock except to the extent of his pecuniary interest therein. For information
regarding transactions in the securities of the Company during the past two years by Activist Investing and Mr. Lazar, please see Schedule
I.
Each of the Nominees has consented
to being named as a Nominee, being named as a nominee in any proxy statement filed by Activist Investing or its affiliates in connection
with the solicitation of proxies for election of such Nominees at the Special Meeting and serving as a director of the Company if elected.
Mr. Ben-Tzvi is a citizen
of the United States of America and Israel. Mr. Chasey is a citizen of the United States of America. Mr. Greenberg is a citizen of the
United States of America and Israel. Mr. Lazar is a citizen of Portugal and Israel. Mr. McMurdo is a citizen of the United States of America.
Mr. Natan is a citizen of the United States of America.
Activist believes that each
Nominee presently is, and if elected as a director of the Company, each of the Nominees would be, an “independent director”
within the meaning of applicable NASDAQ listing standards applicable to board composition, including Rule 5605(a)(2), and Section 301
of the Sarbanes-Oxley Act of 2002. Notwithstanding the foregoing, Activist acknowledges that no director of a NASDAQ listed company qualifies
as “independent” under the NASDAQ listing standards unless the board of directors affirmatively determines that such director
is independent under such standards. Accordingly, Activist acknowledges that if any Nominee is elected, the determination of such Nominee’s
independence under the NASDAQ listing standards ultimately rests with the judgment and discretion of the Board. No Nominee is a member
of the Company’s compensation, nominating or audit committee that is not independent under any such committee’s applicable
independence standards.
Except
as otherwise set forth in this Proxy Statement (including the Exhibits hereto), (i) during
the past 10 years, no Nominee has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); (ii) no Nominee directly or indirectly beneficially
owns any securities of the Company; (iii) no Nominee owns any securities of the Company which
are owned of record but not beneficially; (iv) no Nominee has purchased or sold any securities
of the Company during the past two years; (v) no part of the purchase price or market value
of the securities of the Company owned by any Nominee is represented by funds borrowed or
otherwise obtained for the purpose of acquiring or holding such securities; (vi) no Nominee
is, or within the past year was, a party to any contract, arrangements or understandings
with any person with respect to any securities of the Company, including, but not limited
to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
(vii) no associate of any Nominee owns beneficially, directly or indirectly, any securities
of the Company; (viii) no Nominee owns beneficially, directly or indirectly, any securities
of any parent or subsidiary of the Company; (ix) no Nominee or any of his associates was
a party to any transaction, or series of similar transactions, since the beginning of the
Company’s last fiscal year, or is a party to any currently proposed transaction, or
series of similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $120,000; (x) no Nominee or any of his
associates has any arrangement or understanding with any person with respect to any future
employment by the Company or its affiliates, or with respect to any future transactions to
which the Company or any of its affiliates will or may be a party; (xi) no Nominee has a
substantial interest, direct or indirect, by securities holdings or otherwise in any matter
to be acted on at the Special Meeting; (xii) no Nominee holds any positions or offices with
the Company; (xiii) no Nominee has a family relationship with any director, executive officer,
or person nominated or chosen by the Company to become a director or executive officer and
(xiv) no companies or organizations, with which any of the Nominees has been employed in
the past five years, is a parent, subsidiary or other affiliate of the Company. There are
no material proceedings to which any Nominee or any of his associates is a party adverse
to the Company or any of its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries. With respect to each of the Nominees, except as set forth in
this Proxy Statement, none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K
of the Exchange Act occurred during the past 10 years.
Other than as set forth herein,
there are no agreements, arrangements or understandings between Activist and the Nominees or any other person or persons pursuant to which
the nominations described herein are to be made.
If
Activist succeeds in obtaining stockholder approval for the election of five (5) or more of the Nominees at the Special Meeting,
then a change of control of the Board may be deemed to have occurred under the Company’s Third Amended and Restated 2015
Omnibus Incentive Plan, which grants the Compensation Committee of the Board the right to trigger accelerated vesting of the
outstanding equity awards thereunder.
We do not expect that any
of the Nominees will be unable to stand for election, but, in the event any Nominee is unable to serve or for good cause will not serve,
the shares of Common Stock represented by the enclosed WHITE proxy card will be voted for substitute nominee(s), to the extent
this is not prohibited under the Bylaws and applicable law. In addition, we reserve the right to nominate substitute person(s) if the
Company makes or announces any changes to the Bylaws or takes or announces any other action that has, or if consummated would have, the
effect of disqualifying any Nominee, to the extent this is not prohibited under the Bylaws and applicable law. In any such case, shares
of Common Stock represented by the enclosed WHITE proxy card will be voted for such substitute nominee(s). We reserve the right
to nominate additional persons to fill any additional seats if the Company increases the size of the Board. Additional nominations made
pursuant to the preceding sentence are without prejudice to the position of Activist that any attempt to increase the size of the current
Board or to classify the Board constitutes an unlawful manipulation of the Company’s corporate machinery.
The Election Proposal is subject
to the concurrent approval of the Board Expansion Proposal. If the Board Expansion Proposal is not approved, the Election Proposal will
have no effect. A stockholder may vote for the election of less than all of the Nominees by designating the names of one or more Nominees
who are not to be elected on the line provided on the WHITE proxy card.
WE URGE YOU TO VOTE FOR THE ELECTION OF THE
NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
VOTING AND PROXY PROCEDURES
Holders of Common Stock are
entitled to one vote for each share of Common Stock held of record on the Record Date with respect to each matter to be acted on at the
Special Meeting. Only stockholders of record on the Record Date will be entitled to notice of and to vote at the Special Meeting. Stockholders
who sell their shares of Common Stock before the Record Date (or acquire them without voting rights after the Record Date) may not vote
such shares of Common Stock. Stockholders of record on the Record Date will retain their voting rights in connection with the Special
Meeting even if they sell such shares of Common Stock after the Record Date. Based on publicly available information, Activist believes
that the only outstanding class of securities of the Company entitled to vote at the Special Meeting is the Common Stock.
Shares
of Common Stock represented by properly executed WHITE proxy cards will be voted at the Special Meeting as marked and, in the
absence of specific instructions, will be voted FOR the Board Expansion Proposal and FOR ALL NOMINEES with respect to the
Election Proposal.
How to vote:
Stockholders of Record:
(1) Via the internet.
You may use the internet to vote by visiting to the following internet address www.cesvote.com. Have your WHITE proxy card in hand
as you will be prompted to enter your 11-digit control number to create and submit an electronic vote. If you vote in this manner, your
“proxy,” whose name is listed on the enclosed WHITE proxy card, will vote your shares as you instruct on the proxy
card. If you sign and return the WHITE proxy card or submit an electronic vote but do not give instructions on how to vote your
shares, your shares will be voted as recommended by Activist.
(2) By telephone. You
may submit your vote by calling the following toll-free number 1-888- 450-7155. Have your WHITE proxy card in hand as you will
be prompted to enter your 11-digit control number to create and submit a telephonic vote. If you vote in this manner, your “proxy,”
whose name is listed on the enclosed WHITE proxy card, will vote your shares as you instruct over the phone. If you sign and return
the WHITE proxy card or submit a telephonic vote but do not give instructions on how to vote your shares, your shares will be voted
as recommended by Activist.
(3) By mail. You may
vote by mail. If you are a record holder, you may vote by proxy by filling out the proxy card, signing and dating it and sending it back
in the envelope provided.
(4) In person. You
may vote in person virtually at the Special Meeting by following the instructions when you log-in for the Special Meeting. You may attend
the Special Meeting virtually by visiting the following internet address https://www.cstproxy.com/titanpharm/sm2022.
Given that the
Special Meeting is currently scheduled to be held on August 15, 2022, we urge all stockholders to vote by Telephone or
Internet.
QUORUM; BROKER NON-VOTES; DISCRETIONARY VOTING
A quorum is the minimum number
of shares of Common Stock that must be represented at a duly called meeting in person or by proxy in order to legally conduct business
at the meeting under the Bylaws and Delaware Law. The presence, in person or by proxy, of the holders of record of thirty-four percent
(34%) of the shares then issued and outstanding and entitled to vote at the meeting shall constitute a quorum at the Special Meeting.
Abstentions, withhold votes
and “broker non-votes” are counted as shares present and entitled to vote for purposes of determining a quorum. However, if
you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposal
on which your broker does not have discretionary authority to vote (a “broker non-vote”). Under applicable rules, your broker
will not have discretionary authority to vote your shares at the Special Meeting on any of the proposals.
If you are a stockholder of
record, you must deliver your vote by mail, the Internet, by telephone or attend the virtual Special Meeting in order to be counted in
the determination of a quorum.
VIRTUAL MEETING
The Special Meeting will be held virtually via a live webcast. You will not be able to attend the Special Meeting in person at a
physical location. You are entitled to participate in the Special Meeting if you are a stockholder of record as of the close of business
on the Record Date or hold a legal proxy for the meeting provided by your broker, bank or other nominee.
You may participate in the
virtual Special Meeting by visiting the following web address https://www.cstproxy.com/titanpharm/sm2022. Have your proxy card in hand
as you may be prompted to enter your control number to attend and follow the instructions, if any, to complete your registration for the
Special Meeting.
We encourage you to access
the meeting site prior to the start time of the Special Meeting to allow ample time to log into the meeting webcast and test your computer
system.
Whether or not you plan to
attend the Special Meeting, we urge you to vote via the Internet or by telephone as instructed on the WHITE proxy card as soon
as possible. If you have any difficulty accessing the Special Meeting, please email info@investor-com.com.
VOTES REQUIRED FOR APPROVAL
Approval of the Board Expansion
Proposal — The affirmative vote of the holders of a majority of the Common Stock having voting power present in person or represented
by proxy is required to approve the Board Expansion Proposal, subject to the approval of the Election Proposal. Neither abstentions nor
broker non-votes will have any effect on the outcome of the Board Expansion Proposal.
Approval of the Election
Proposal — The election of directors requires the affirmative vote of a plurality of the shares of Common Stock present in person
or by proxy and entitled to vote at the Special Meeting. Neither abstentions nor broker non-votes will have any effect on the outcome
of the Election Proposal.
Under applicable Delaware
law, none of the holders of Common Stock is entitled to appraisal rights in connection with any matter to be acted on at the Special Meeting.
If you sign and submit your WHITE proxy card without specifying how you would like your shares voted, your shares will be voted
in accordance with Activist’s recommendations specified herein and in accordance with the discretion of the persons named on the
WHITE proxy card with respect to any other matters that may be voted upon at the Special Meeting.
REVOCATION OF PROXIES
Stockholders of the Company
may revoke their proxies at any time prior to exercise by attending the virtual Special Meeting and voting in person (although attendance
at the virtual Special Meeting will not in and of itself constitute revocation of a proxy) or by delivering a written notice of revocation.
The delivery of a subsequently dated proxy which is properly completed will constitute a revocation of any earlier proxy. The revocation
may be delivered either to Activist in care of InvestorCom at the address set forth on the back cover of this Proxy Statement or to the
Company at 400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080 or any other address provided by the Company.
Although a revocation is effective if delivered to the Company, we request that either the original or photostatic copies of all revocations
be mailed to Activist in care of InvestorCom at the address set forth on the back cover of this Proxy Statement so that we will be aware
of all revocations and can more accurately determine if and when proxies have been received from the holders of record on the Record Date
of a majority of the outstanding shares of Common Stock. Additionally, InvestorCom may use this information to contact stockholders who
have revoked their proxies in order to solicit later dated proxies for the election of the Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE
NOMINEES TO THE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies
pursuant to this Proxy Statement is being made by Activist. Proxies may be solicited by mail, facsimile, telephone, Internet, in person
and by advertisements.
Activist Investing has entered
into an agreement with InvestorCom for solicitation and advisory services in connection with this solicitation, for which InvestorCom
will receive a fee not to exceed $10,000, together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and expenses, including certain liabilities under the federal securities laws. InvestorCom will solicit proxies
from individuals, brokers, banks, bank nominees and other institutional holders. Activist Investing has requested banks, brokerage houses
and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares they hold
of record. Activist Investing will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated
that InvestorCom will employ approximately 25 persons to solicit stockholders for the Special Meeting.
The entire expense of soliciting
proxies is being borne by Activist. Costs of this solicitation of proxies are currently estimated to be approximately $[______] (including,
but not limited to, fees for attorneys, solicitors and other advisors, and other costs incidental to the solicitation). Activist estimates
that through the date hereof its expenses in furtherance of, or in connection with, the solicitation are approximately $[______]. The
actual amount could be higher or lower depending on the facts and circumstances arising in connection with any solicitation. Activist
may seek reimbursement from the Company of all expenses it incurs in connection with this solicitation but does not intend to submit the
question of such reimbursement to a vote of security holders of the Company.
ADDITIONAL PARTICIPANT INFORMATION
The participants in the solicitation
are anticipated to be Activist Investing, Mr. Lazar and the other Nominees (each a “Participant” and collectively, the “Participants”).
The business address of Activist
Investing is 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036. The business address of each of the Nominees is as set
forth elsewhere in this Proxy Statement.
The principal business of
Activist Investing is actively investing in distressed public companies. The principal occupation of each of the Nominees is as set forth
elsewhere in this Proxy Statement.
As of the date hereof, Activist
Investing is the direct beneficial owner of 359,066 shares of Common Stock. The class and number of securities of the Company beneficially
owned by each of the Nominees is as set forth elsewhere in this Proxy Statement. For information regarding purchases and sales of securities
of the Company during the past two years by each of the Participants, please see Schedule I attached hereto. The securities of
the Company purchased by Activist Investing were purchased with working capital (which may, at any given time, include margin loans made
by brokerage firms in the ordinary course of business) in the open market.
Except as otherwise set forth
in this Proxy Statement (including the Exhibits hereto), (i) during the past 10 years, no Participant has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); (ii) no Participant directly or indirectly beneficially owns any securities
of the Company; (iii) no Participant owns any securities of the Company which are owned of record but not beneficially; (iv) no Participant
has purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price or market value of the
securities of the Company owned by any Participant is represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding such securities; (vi) no Participant is, or within the past year was, a party to any contract, arrangements or understandings
with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
(vii) no associate of any Participant owns beneficially, directly or indirectly, any securities of the Company; (viii) no Participant
owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no Participant or any of his
or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last fiscal
year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries
was or is to be a party, in which the amount involved exceeds $120,000; (x) no Participant or any of his or its associates has any arrangement
or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect to any future
transactions to which the Company or any of its affiliates will or may be a party; (xi) no Participant has a substantial interest, direct
or indirect, by securities holdings or otherwise in any matter to be acted on at the Special Meeting; (xii) no Participant holds any positions
or offices with the Company; (xiii) no Participant has a family relationship with any director, executive officer, or person nominated
or chosen by the Company to become a director or executive officer and (xiv) no companies or organizations, with which any of the Participants
has been employed in the past five years, is a parent, subsidiary or other affiliate of the Company. There are no material proceedings
to which any Participant or any of his or its associates is a party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.
Other than as set forth herein,
there are no agreements, arrangements or understandings between Activist Investing or any of the other Participants and their respective
affiliates and associates, and the Nominees or any other person or persons pursuant to which the nominations described herein are to be
made. Activist Investing and the other Participants and their respective affiliates and associates have no material interest in such nominations
(other than in their capacities as stockholders of the Company, as applicable), including any anticipated benefit therefrom to Activist
Investing or the other Participants and their respective affiliates and associates.
OTHER MATTERS AND ADDITIONAL INFORMATION
Activist is unaware of any
other matters to be considered at the Special Meeting. However, should other matters, which Activist is not aware of a reasonable time
before this solicitation, be brought before the Special Meeting, the persons named as proxies on the enclosed WHITE proxy card
will vote on such matters in their discretion.
Some banks, brokers and other
nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means
that only one copy of this Proxy Statement may have been sent to multiple stockholders in your household. Activist will promptly deliver
a separate copy of the document to you if you write to our proxy solicitor, InvestorCom, at the following address or phone number: 19
Old Kings Highway S., Suite 130, Darien, CT 06820, or call toll free at (877) 972-0090. If you want to receive separate copies of our
proxy materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you
should contact your bank, broker or other nominee record holder, or you may contact our proxy solicitor at the above address and phone
number.
Activist is unaware of any
other matters to be considered at the Special Meeting. However, should other matters, which Activist is not aware of a reasonable time
before this solicitation, be brought before the Special Meeting, the persons named as proxies on the enclosed WHITE proxy card
will vote on such matters in their discretion.
INCORPORATION BY REFERENCE
WE
HAVE OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT WILL BE INCLUDED IN THE COMPANY’S
PROXY STATEMENT WITH RESPECT TO THE 2022 ANNUAL MEETING BASED ON RELIANCE ON RULE 14A-5(C). THIS
DISCLOSURE INCLUDES, AMONG OTHER THINGS, BIOGRAPHICAL INFORMATION ON THE COMPANY’S DIRECTORS, INFORMATION CONCERNING EXECUTIVE
COMPENSATION, AND OTHER IMPORTANT INFORMATION. SEE SCHEDULE II FOR INFORMATION REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5%
OF THE SHARES AND THE OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF THE COMPANY.