S-1

As filed with the Securities and Exchange Commission on September 21, 2022.

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Melt Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	2834	61-1888986
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

6 Cadillac Drive, Suite 320

Brentwood, Tennessee 37027

(615) 733-4730

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

Larry Dillaha, M.D.

Chief Executive Officer

6 Cadillac Drive, Suite 320

Brentwood, Tennessee 37027

(615) 733-4730

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

J. James Jenkins, Jr. Kevin H. Douglas Taylor K. Wirth Bass, Berry & Sims PLC 150 3^rd Ave. S., Suite 2800 Nashville, Tennessee 37201 (615) 742-6200 Anthony W. Basch Alexander W. Powell, Jr. Benming Zhang Kaufman & Canoles, P.C. 1021 E. Cary St. Richmond, Virginia 23219 (804) 771-5700

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant will file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2022

PRELIMINARY PROSPECTUS

           Shares

Common Stock

 

This is the initial public offering of shares of common stock of Melt Pharmaceuticals, Inc.

Prior to this offering, there was no public market for our common stock. We currently estimate that the initial public offering price per share will be between $         and $           . We have applied to list our shares of common stock for trading on the Nasdaq Capital Market, subject to official notice of issuance, under the symbol “MELT.” Completion of this offering is contingent on the approval of our listing application for trading on the Nasdaq Capital Market.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, and will be subject to reduced public reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

Investing in our securities is highly speculative and involves a high degree of risk. See “Risk Factors” beginning on page 10 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds, before expenses	$	$

(1) We refer you to the section titled “Underwriting” beginning on page 92 for additional information regarding underwriting compensation.

We have granted to the underwriter an option to purchase up to               additional shares of common stock to cover overallotments, if any, exercisable at any time until 45 days after the date of this prospectus.

The underwriter expects to deliver the shares of common stock against payment on          , 2022.

AEGIS CAPITAL CORP.

The date of this prospectus is               , 2022

TABLE OF CONTENTS

	Page
GENERAL MATTERS	i
USE OF MARKET AND INDUSTRY DATA	i
TRADEMARKS	i
FORWARD-LOOKING STATEMENTS	ii
PROSPECTUS SUMMARY	1
The Offering	6
SUMMARY FINANCIAL DATA	9
RISK FACTORS	10
USE OF PROCEEDS	35
DIVIDEND POLICY	36
CAPITALIZATION	37
DILUTION	39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
BUSINESS	50
MANAGEMENT	63
EXECUTIVE COMPENSATION	70
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	79
PRINCIPAL STOCKHOLDERS	81
DESCRIPTION OF CAPITAL STOCK	82
SHARES ELIGIBLE FOR FUTURE SALE	87
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS	89
UNDERWRITING	92
LEGAL MATTERS	95
EXPERTS	95
WHERE YOU CAN FIND MORE INFORMATION	95
INDEX TO THE FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this prospectus and in any free writing prospectus that we may provide to you in connection with this offering. Neither we nor the underwriter has authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or any such free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We can provide no assurance as to the reliability of any other information that others may give you. Neither we nor the underwriter are making an offer to sell or seeking offers to buy these securities in any jurisdiction where or to any person to whom the offer or sale is not permitted. The information in this prospectus is accurate only as of the date on the front cover of this prospectus, and the information in any free writing prospectus that we may provide you in connection with this offering is accurate only as of the date of such free writing prospectus. Our business, financial condition, results of operations and prospects may have changed since those dates.

GENERAL MATTERS

Unless otherwise indicated, all references to “dollars,” “US$,” or “$” in this prospectus are to United States dollars.

This prospectus contains various company names, product names, trade names, trademarks and service marks, all of which are the properties of their respective owners.

Unless otherwise indicated or the context otherwise requires, all information in this prospectus assumes no exercise of the over-allotment option.

Unless otherwise indicated, all references to “GAAP” in this prospectus are to United States generally accepted accounting principles.

Information contained on our websites, including www.meltpharma.com, shall not be deemed to be part of this prospectus or incorporated herein by reference and should not be relied upon by prospective investors for the purposes of determining whether to purchase the shares offered hereunder.

Through and including            , 2022, all dealers effecting transactions in shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter with respect to an unsold allotment or subscription.

For investors outside the United States, neither we nor any of our agents have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourself about and to observe any restrictions relating to this offering and the distribution of this prospectus.

USE OF MARKET AND INDUSTRY DATA

We are responsible for the disclosure contained in this prospectus. However, this prospectus includes market and industry data that has been obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to those industries based on that knowledge). Management’s knowledge of such industries has been developed through its experience and participation in those industries. While we are not aware of any misstatements regarding the third-party information and believe such information to be reliable, neither we nor our management have independently verified any of the data from third-party sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. In addition, the agents have not independently verified any of the industry data prepared by management or ascertained the underlying estimates and assumptions relied upon by management. Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report survey or article is not incorporated by reference in this prospectus.

TRADEMARKS

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks and trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^®, ^TM or ^SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.

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FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements,” which include information relating to future events, future financial performance, financial projections, strategies, expectations, competitive environment and regulation. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

● our lack of operating history;

● the timing, progress and results of our clinical trials of our lead product candidate, MELT-300, our other product candidates and any future product candidates, including statements regarding the timing of our planned investigational new drug submissions, initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

● the expectation that we will incur operating losses for the foreseeable future;

● our estimates regarding expenses, future revenue, current and future capital requirements to support our development and commercialization efforts for our product candidates and our ability to satisfy our capital needs and our needs for additional financing;

● our dependence on our product candidates, which are still in early stages of clinical development;

● our ability to attract and retain key executives and medical and scientific personnel;

● our ability to complete required clinical trials for our product candidates, the timing of any submission of filings for regulatory approval of, and our ability to obtain and maintain regulatory approvals from the FDA or other regulatory agencies in different jurisdictions for MELT-300, our other product candidates and any future product candidates;

● our ability to identify patients that can be treated by our product candidates and to enroll these patients in our clinical trials;

● our expectations regarding the size of the patient populations, market acceptance and opportunity for and clinical utility of MELT-300, our other product candidates and any future product candidates, if approved for commercial use;

● our lack of a sales and marketing organization and our ability to commercialize MELT-300 and our other product candidates if we obtain regulatory approval;

● business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency, such as the COVID-19 pandemic, or geopolitical events, including the ongoing military conflict between Russia and Ukraine, and related sanctions against Russia;

● macroeconomic events, including uncertain market conditions, rising inflation, supply chain disruptions, and labor shortages;

● our expectations regarding the potential market size and the rate and degree of market acceptance for MELT-300, our other product candidates or any future product candidates that we may develop;

● our expectations regarding the pricing of and third-party reimbursement for our product candidates;

● the effects of competition with respect to MELT-300, our other product candidates or any future product candidates, as well as innovations by current and future competitors in our industry;

● our dependence on third-parties to manufacture our product candidates;

● our ability to maintain or protect the validity of our licensed patents and other intellectual property;

● our ability to internally develop new inventions and intellectual property;

● interpretations of current laws and the passages of future laws;

● acceptance of our business model by investors;

● our ability to obtain additional funding for our operations and our expected use of proceeds from this offering;

● our financial performance and our ability to effectively manage our anticipated growth; and

● our ability to adequately support organizational and business growth.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see “Risk Factors” for additional risks which could adversely impact our business and financial performance.

Moreover, new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus.

IN ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY OUR MANAGEMENT. IN REVIEWING THIS PROSPECTUS, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT THERE MAY BE OTHER POSSIBLE RISKS THAT COULD BE IMPORTANT.

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PROSPECTUS SUMMARY

This summary highlights information contained in greater detail elsewhere in this prospectus and does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire prospectus carefully, including the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements. See “Forward-Looking Statements.” Unless the context otherwise requires, the terms “Melt,” “the Company,” “we,” “us” and “our” in this prospectus refer to Melt Pharmaceuticals, Inc.

Overview

Melt is a clinical stage pharmaceutical company focused on the development and commercialization of proprietary non-opioid, non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient and in-office settings. We intend to seek regulatory approval through the FDA’s 505(b)(2) regulatory pathway for these proprietary, patented small-molecule product candidates, where possible. The core intellectual property we own is a patented series of combination non-opioid sedation drug formulations that we believe have multiple clinical applications for potential indications of use.

Melt was formed as a wholly-owned subsidiary of Harrow Health, Inc. f/k/a Imprimis Pharmaceuticals, Inc. (“Harrow”) in 2018. Following the completion of an offering of our Series A Preferred Stock in 2019, Harrow lost its controlling interest in Melt, and we are no longer considered a subsidiary of Harrow. See “Principal Stockholders” for more information regarding the number and percentage of shares of common stock owned by our principal stockholders, including Harrow, before and after this offering.

Our Products

We have compiled a unique pipeline of product candidates in various stages of development. Our lead product candidate, MELT-300, was acquired from Harrow, and our other two product candidates, MELT-210 and MELT-400, were developed internally. We may look to grow our pipeline of product candidates through value-creating business development activities and through further internal research and development. All of our product candidates use the proprietary Zydis® drug delivery technology of Catalent, Inc. (“Catalent”), our manufacturing partner. To date, the Zydis® technology has been used in over 35 new drug application (“NDA”) approved products spanning almost three decades. Because of the uniqueness of Catalent’s technology, no generic equivalent product has been approved by the U.S. Food and Drug Administration (“FDA”) for any of the previously NDA approved products using Zydis®. Our product candidate pipeline consists of:

● MELT-300, our lead product candidate, which is a fixed dose combination of midazolam and ketamine in a fast-dissolving tablet that is administered sublingually for procedural sedation and analgesia during cataract surgery;

● MELT-210, which is a fixed dose of midazolam in a fast-dissolving tablet that is administered sublingually for procedural sedation for short duration procedures; and

● MELT-400, which is a fixed dose of ketamine in a fast-dissolving tablet that is administered sublingually for short-term or acute pain.

Our Lead Product Candidate: MELT-300

MELT-300 combines fixed doses of midazolam (3mg) and ketamine (50mg) in one dissolvable tablet that is administered sublingually for procedural sedation and analgesia during cataract surgery. This product candidate utilizes Catalent’s proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa. MELT-300 is based on Harrow’s existing MKO Melt, a compounded product made by Harrow containing a fixed dose of midazolam, ketamine and ondansetron in troche form without the Zydis® delivery technology that dissolves in the buccal cavity over a longer period of time than MELT-300 (“MKO Melt”).

MKO Melt is a compounded formulation that is not FDA approved, but, rather, is made commercially available pursuant to the FDA Guidance for Human Drug Compounding Outsourcing Facilities under Section 503A and 503B of the Food, Drug, and Cosmetic Act. As a compounded formulation exempt from FDA approval, MKO Melt is marketed and sold under the FDA Structured Product Listing, Marketing Category for Outsourcing Facility Compounded Human Drug Product (Exempt from Approval Requirements).

We are developing MELT-300 as a product candidate for FDA approval. This requires formal clinical testing, and if successful with our clinical development program, we would seek FDA approval through the FDA’s 505(b)(2) regulatory pathway. If approved, we believe that MELT-300 could eventually be utilized in a larger number of cataract surgeries as compared to MKO Melt, as well as a larger number of other human medical procedures once additional clinical trials are conducted and the FDA has approved indications for those procedures.

MKO Melt has an established history of use in cataract surgery, having been dispensed over 200,000 times as a compounded drug since 2016. Based upon this established history of MKO Melt use, we believe there is a physician preference for an FDA-approved version of a product similar to MKO Melt. Although sedation and pain treatments have some intrinsic variability, ophthalmologists and anesthesiologists administering MKO Melt report that patients enter a dissociative state, appearing awake, but detached from the surroundings with their eyes remaining open, still and focused, which is desirable during a cataract surgery procedure. We have leveraged the real-world evidence generated by Harrow and more than 400 U.S. cataract surgeons to inform and guide the design and execution of MELT-300’s clinical and commercial development programs. The substantial commercial experience of MKO Melt leads us to believe MELT-300 could offer patients and clinicians several advantages over currently available alternatives, including:

● Sedation and analgesia without the need for insertion of IV needle;

● A non-opioid combination of two drugs with long history of use;

● Patient convenience – oral tablet that dissolves under the tongue instead of IV infusion; and

● Broad applicability across several procedures and patient populations once the FDA has approved indications for those additional procedures.

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MELT-300 Clinical Program Plan

The clinical development program for our product candidates is ultimately dependent upon a myriad of factors, including formulation development, stability profile of our product candidates, clinical trial designs and outcomes and FDA review and comments (among others). The timelines described herein are subject to (and likely will) change due to these and other factors. Such factors (and others) should be considered when reviewing our clinical programs and plans. The description and timeline described below should be reviewed for illustrative purposes only.

At the beginning of the development program, our initial product candidate contained midazolam 3mg and ketamine 25mg in one sublingual tablet. This formulation was referred to as MELT-100. After completing the comparative bioavailability (“BA”) studies on MELT-100, a decision was made to increase the ketamine component to 50mg resulting in each sublingual tablet containing midazolam 3 mg and ketamine 50mg. This formulation is called MELT-300 and is the formulation we are bringing forward in our development plans. The pharmacokinetic (“PK”) studies run thus far were done using both one and two sublingual tablets of MELT-100.

We intend to prioritize the MELT-300 program because of its advanced stage of development, including our growing body of supportive clinical data for procedural sedation and analgesia during cataract surgery.

In May 2020, we conducted a Type C meeting with the FDA to discuss our clinical and regulatory strategy and get the agency’s insight on the pathway to filing an NDA and ultimately seeking approval. Following this meeting, we opened an investigational new drug (“IND”) in August 2020, and proceeded to complete a Phase 1 BA study during the first half of 2021. Once completed, we again met with the FDA to discuss the outcomes of the Phase 1 study and further discussed our clinical program and plans for MELT-300.

An overview of our clinical program, as discussed with the FDA, is summarized below:

● Phase 1 BA Study. In January 2021, we completed a comparative BA study to establish the PK curves and relative BA of our fixed dose combination of midazolam 3 mg and ketamine 25 mg sublingual tablet (MELT-100) product candidate as compared to the listed drugs (“LDs”) – which for MELT-300 are IV midazolam and IV ketamine, (the “2021 PK Study”). This study was conducted in 25 healthy volunteers at a single site and was a crossover design study consisting of the following four groups:

1.	Single tablet (combination of 3mg midazolam/25mg ketamine)
2.	Two tablets (combination of 6mg midazolam/50mg ketamine total), doses given 15 minutes apart
3.	Midazolam IV (total of 3.5mg)
4.	Ketamine IV (total of 18mg)

The 2021 PK Study allowed us to establish PK curves and relative BA of MELT-100 and showed that the overall exposure level of our product candidate was less than that of the individual IV comparators (the LDs), which we believe will allow us to establish a scientific safety bridge to the LDs. As part of the 505(b)(2) regulatory process, this would allow us to bridge all of the established safety data from the midazolam and ketamine labels, and incorporate that into our NDA filing. Our product candidate was well tolerated by patients in this study, with one serious adverse event of syncope thought to be related to the study drug. As discussed further below, we expect to conduct a pivotal PK study of MELT-300 pending results and completion of our MELT-300 Phase 2 study.

● MELT-300 Phase 2 Study Pivotal and Factorial Designed. We began enrolling our single, pivotal Phase 2 study during the fourth quarter of 2021. While the Phase 1 study was primarily a safety study, the factorial designed Phase 2 study will seek to establish efficacy of our MELT-300 product in patients undergoing cataract surgery, while also evaluating safety and tolerability. The Phase 2 study will be a multi-arm study and enroll approximately 350 patients. The Phase 2 study will compare MELT-300 against (i) placebo alone; (ii) sublingually delivered midazolam alone (MELT-210) and (iii) sublingual ketamine alone (MELT-400), with the primary efficacy endpoints of appropriate sedation during the cataract surgery and management of intra-operative pain during the surgery. Patients in this study will be enrolled in a 1:1:1:1 ratio. The primary endpoints of the study will include assessing sedation using the Ramsey Sedation Scale (“RSS”) and the Numeric Pain Rating Scale (“NPRS”) on a scale of 0 to 10. All assessments will be done at predetermined timepoints and/or milestones during the cataract surgery. We expect the top-line results from this Phase 2 study will be available in the fourth quarter of 2022. However, as of the date of this prospectus, we have no indication of the results of our clinical studies and can provide no assurances that such results of the primary endpoints will be conclusive or successful.

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● MELT-300 Placebo Controlled Phase 3 Program. Following a Phase 2 study, if successful, we plan to meet with the FDA to get guidance and initiate our Phase 3 program. This would likely be two Phase 3 studies run in parallel, evaluating the efficacy and safety of MELT-300 versus placebo in patients undergoing cataract surgery. Primary endpoints, as discussed with the FDA, would likely include appropriate sedation level during the surgery, management of intra-operative pain and any need for rescue medication during the procedure. All patients in the study would be given topical anesthetic prior to the start of surgery.

● MELT-300 Pivotal PK Study. While we completed our comparative BA studies on an earlier iteration of our product candidate in 2021, we have since altered the final dosage strength to create MELT-300 by increasing the ketamine to 50mg in each tablet. As a result, we expect to run a final, pivotal PK study on MELT-300 in our final dosage form pending the outcome of the MELT-300 Phase 2 study. Based on the results of the 2021 PK Study, we do not expect any unforeseen outcomes from this study.

See “Risk Factors— Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization.”

Market and Payment Strategy for MELT-300

Based solely on the more than 4.2 million cataract surgeries performed in the U.S. in 2019 (according to a Market Scope report), we believe the potential U.S. total addressable market for MELT-300 will be more than $2.5 billion per year. This estimate assumes that MELT-300 will be granted transitional pass-through reimbursement status, or be eligible for separate payment from the Centers for Medicare and Medicaid Services (“CMS”) under Medicare Part B, as well as eligible for a J-Code under the Healthcare Common Procedure Coding System (“HCPCS”) for separate payment. Pass-through status is designed to promote innovation and allows for separate payment (i.e., outside the packaged procedural payment) under Medicare Part B for certain new drugs and other medical technologies when used in hospital outpatient or ambulatory surgery centers and that meet well-established criteria specified by federal law and regulations governing Medicare spending. Pass-through reimbursement status generally lasts for three years, and subsequently payment for the product is then included as part of the packaged payment for the associated procedure for Medicare patients. Beyond this first three-year period, we believe MELT-300 has an opportunity to qualify for “exception” status, meaning the pass-through reimbursement status would not expire after the temporary period (e.g., three years).

Product Candidate Pipeline

In addition to MELT-300, we have two other product candidates, which are a part of the ongoing MELT-300 Phase 2 clinical study, that we are currently developing based off our existing drug formulation intellectual property and technologies.

MELT-210: Sublingual Midazolam

MELT-210 is our product candidate that provides 3mg of the benzodiazepine midazolam in one sublingual tablet. Similar to MELT-300, this product candidate uses Catalent’s proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa.

We believe that there is a need for a midazolam only product because many medical procedures do not have a significant amount of pain associated with them yet will require a certain level of sedation and are of a length that the duration of action of MELT-210 would be sufficient to provide anxiolysis and sedation for the entire procedure. We believe MELT-210, if approved, would obviate the need to place an intravenous access port and give midazolam (or similar drugs) via IV prior to a procedure. Many patients suffer from “needle phobia” and if given the option we believe physicians would prefer to select MELT-210 in lieu of an IV administered alternative for these patients.

The full development pathway for MELT-210 is still being finalized. We filed and opened an IND in late 2021. We designed and started a comparative BA clinical trial in healthy adult volunteers in February 2022. In this study, we administered one MELT-210 tablet, two MELT-210 tablets and an IV midazolam dose. The intention is to establish a scientific bridge between the MELT-210 and the midazolam IV reference product. In May 2022, we received the top-line results from this study, and the top-line data demonstrated that concentration comparisons between MELT-210 and the reference drug met the goals of the study. This will allow us to ultimately rely on a 505(b)(2) NDA filing on the safety and pre-clinical toxicology already established for approved midazolam IV.

We will meet with the FDA to discuss the results and propose a Phase 3 development program for a broad procedural sedation indication label for procedures lasting no more than a time frame that fits into the duration of action supported by the BA results. Results from the 2021 BA study suggest that procedures lasting less than 30-45 minutes could be the target timeframe for MELT-210. We will need the results of the BA study on MELT-210 before finalizing the procedures we will target for a broad procedural sedation label. We anticipate procedures that will ultimately be studied include commonplace procedures in dermatology, plastic surgery, ophthalmology and dentistry.

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MELT-400: Sublingual Ketamine

MELT-400 is our product candidate that provides 50mg of the NMDA-receptor antagonist ketamine in one sublingual tablet. This product candidate utilizes Catalent’s proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa.

IV delivered ketamine has been used in the anesthesia setting for over 50 years. Recently, the S-enantiomer of ketamine (also called esketamine) was approved for treatment of Major Depressive Disorder under the brand name Spravato. A significant amount of research supports the use of ketamine to treat acute mild to moderate pain; however, ketamine has only been available in an IV formulation, which naturally limits its use in out-patient settings. We believe that if we can show safety and efficacy of MELT-400 in various pain models throughout the development process, there would be significant use of the final MELT-400 product.

Currently there is no ketamine product marketed in the U.S. for the treatment of pain. We are aware of only one ketamine sublingual formulation under development. IX Biopharma is developing a sublingual ketamine product for pain under the brand name Wafermine using WaferIX technology, and we believe IX Biopharma has completed several Phase 2 clinical trials of this product.

We have recently filed an IND for the study of MELT-400 in acute mild to moderate pain. Our complete clinical development plan is still being finalized, but we will conduct a comparative BA study in healthy adult volunteers as our first clinical trial and leverage available data from the studies of our other product candidates. We expect this development program to include dose-ranging as part of the Phase 2 studies and then at least 2 Phase 3 pivotal studies for approval. We intend to meet with the FDA in the future to propose, receive guidance and better understand the FDA’s requirements for the development program for MELT-400.

Market Landscape

Currently, the most widely used products in procedural sedation are midazolam, propofol, and diazepam. We believe that each of these drugs has the majority of the market share in terms of volume of procedures performed in the outpatient surgery market in the U.S. More specifically, based on market research, IV midazolam alone, and in many instances in combination with other medications, such as fentanyl or propofol, are the most commonly used medications for sedation and analgesia during cataract surgeries and colonoscopies. The propofol label mandates the presence of an anesthesia professional throughout the procedure due to propofol’s potential for respiratory and cardio depressive effects. For midazolam, these side effects are less pronounced and have a different relevance because an undesirably deep sedation can be reversed with flumazenil. The ketamine component of our product could potentially obviate the need to use an opioid during certain procedures. According to 2021 published data, a group from Duke University performed a two-year single-center retrospective study of over two thousand patients (making up over three thousand cases) undergoing routine cataract surgery and found that approximately 97% of the cases received at least one dose of the opioid fentanyl. We believe, in light of the current opioid crisis in America, the ketamine component of our product candidates would be very attractive to doctors and anesthesia providers.

Our Competitive Strengths

Based on the experience of the MKO Melt, we believe our product candidates are unique with regard to expected performance in humans because our product candidates are sublingually delivered versions of the active components in our formulations. This has been demonstrated commercially as a compounded drug in more than 200,000 patients since 2016. Further, we believe that, if approved by the FDA, Harrow may be able to efficiently introduce us to potential customers, particularly in the ophthalmology sector by leveraging Harrow’s existing commercial relationships, thereby facilitating rapid adoption of our lead product candidate, MELT-300. In addition, we believe our competitive strengths include our:

● existing portfolio, which includes three proprietary product candidates and development programs;

● knowledge of the industry, including our ability to identify products for enhancement and experience with the 505(b)(2) regulatory pathway;

● portfolio of attractive assets that we expect will enable us to compete effectively in the market of conscious and procedural sedation related therapeutics;

● capital and time efficient, differentiated business model as compared to generic and branded specialty pharmaceutical drug companies, utilizing the 505(b)(2) pathway; and

● existing intellectual property, including know-how, ownership of one U.S. patent issued, three U.S. patent-pending applications and five foreign applications that, if issued, could further protect, as applicable, the market value of our current portfolio of product candidates.

In addition to potential medical and economic advantages, we believe our product candidates have several commercial advantages, such as reduced development time compared to the development time of new chemical entities (“NCEs”) and decreased risk factors in the development process. These commercial advantages derive from the fact that our current MELT-300 product candidate for ophthalmic use is based on known materials already approved for use by the FDA, potentially opening the shortened 505(b)(2) pathway. This drug approval pathway is expected to be pursued for other product candidates we expect to develop. The use of previously approved ingredients recognized by physicians and medical organizations may shorten the time and decrease the costs usually required for the acceptance of the new product in the commercial prescription drug marketplace.

History and Team

In December 2018, Harrow assigned its patented and patent-pending formulations that comprise some of our product candidates, including MELT-300, as assets to us. Following the completion of an offering of our Series A Preferred Stock in 2019, Harrow lost its a controlling interest in our Company, and we are no longer considered a subsidiary of Harrow. See “Certain Relationships and Related Party Transactions – Private Placements of Our Securities – Series A Preferred Stock Financing” for more information regarding our Series A Preferred Stock offering.

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We have assembled a seasoned management team and board of directors with extensive experience in many different aspects of drug development and commercialization. Our team is led by our Chief Executive Officer, Larry Dillaha, M.D., who has nearly 20 years of drug development experience ranging from pre-clinical to NDA filing and approval, including significant experience with 505(b)(2) drug approvals; and D. Bradford Osborne, our Chief Financial Officer, who has approximately 20 years of finance and accounting experience and formerly served in senior finance and accounting roles, including as Vice President, Finance and Accounting, for Precigen, Inc., a Nasdaq-listed discovery and clinical-stage biopharmaceutical company, for nearly ten years before joining our team. In addition, our board of directors also has deep expertise in the fields of pharmaceuticals, ophthalmology, life science, healthcare, accounting, finance, risk management, and regulatory processes.

Following this offering, our directors, executive officers and principal stockholders, and their respective affiliates, will beneficially own approximately             % of our outstanding shares of common stock. In particular, Harrow, our largest stockholder of record, will beneficially own approximately                % of our issued and outstanding shares of common stock immediately after this offering. As a result, these stockholders, acting together, would have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, acting together, may have the ability to control the management and affairs of our Company. See “Principal Stockholders” for more information regarding the number and percentage of shares of common stock owned by our directors, executive officers and principal stockholders before and after this offering.

Our Corporate Information

We were incorporated as a wholly-owned subsidiary of Harrow in the State of Nevada in April 2018 and reincorporated as a Delaware corporation in 2019. Our principal executive offices are located at 6 Cadillac Drive, Suite 320, Brentwood, Tennessee 37027, and our telephone number is (615) 733-4730. Our corporate website address is www.meltpharma.com. The reference to our website is an inactive textual reference only. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

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The Offering

Securities offered	shares of common stock.
Common stock to be outstanding immediately after this offering	shares of common stock (or            shares of common stock if the underwriter exercises its option to purchase additional shares).
Option to purchase additional shares	We have granted the underwriter a 45-day option to purchase up to additional shares of common stock.
Use of proceeds	We estimate that the net proceeds to us from the sale of the shares of common stock offered by us will be approximately $             million, or approximately $                million if the underwriter’s option to purchase additional shares is exercised in full, based on an assumed initial public offering price of $                 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of the offering for:

● the continued development of MELT-300, our lead product candidate, through the completion of our ongoing Phase 2 clinical study and commencement of our planned Phase 3 clinical study and pivotal PK study, including the manufacturing of clinical supply;

● the ongoing development of MELT-210, including the manufacturing of clinical supply, and MELT-400; and

● the remainder for increased research and development and general and administrative personnel costs as we expand our organization, cross-program research and development activities, and other general corporate purposes and working capital.

	See “Use of Proceeds” on page 35 for a more complete description of the intended use of proceeds from this offering.
Dividend policy	Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors, out of funds legally available. We have not paid any dividends since our inception, and we presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition of dividends will be at the discretion of our board of directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.
Voting rights	Each share of common stock will entitle its holder to one vote on all matters to be voted on by stockholders. See “Description of Capital Stock.”
Risk factors	You should read the “Risk Factors” section of this prospectus beginning on page 10 for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Proposed Nasdaq ticker symbol	We have applied to list our common stock on the Nasdaq Capital Market under the symbol “MELT”. This offering will not be consummated until we have received Nasdaq Capital Market approval of our application.
Lock-ups	We and our directors, officers, employees and holders of at least 10% of our outstanding securities have agreed with the underwriter not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock for a period of 180 days from this offering. See “Underwriting” on page 92.

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The number of shares of our common stock to be outstanding after this offering is based on 5,395,311 shares of common stock outstanding as of June 30, 2022. Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

● assumes the shares of common stock are offered at the initial public offering price of $                    per share, which is the midpoint of the price range listed on the cover page of this prospectus;

● assumes the conversion of all outstanding shares of Series A Preferred Stock as of June 30, 2022 into 2,287,000 shares our common stock upon the closing of this offering and the conversion of unpaid dividends on our Series A Preferred Stock of approximately $              into           shares of common stock upon the closing of this offering, based on the initial public offering price. See “Description of Capital Stock—Preferred Stock” for additional information regarding the terms of the stock dividend on the Series A Preferred Stock, which our board of directors anticipates it will declare prior to the consummation of this offering;

● assumes the settlement of $10,000,000 principal amount of indebtedness under a loan and security agreement with Harrow (the “Harrow Loan Agreement”), in exchange for     shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $                    per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount;

● excludes              shares of common stock issuable pursuant to equity awards granted, effective as of the closing of this offering, to our non-employee directors and director nominees;

● excludes the issuance of               shares of common stock that would be issuable upon the exercise of certain outstanding warrants, which warrants are subject to adjustment based on the transactions contemplated by this offering. See “Description of Capital Stock—Warrants” for additional information regarding the terms of the warrants;

● excludes (i) 677,094 shares issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.96 per share as of June 30, 2022, (ii) 70,640 shares issuable upon the vesting and delivery of restricted stock units as of June 30, 2022 and (iii) 309,033 shares of common stock underlying vested restricted stock units as of June 30, 2022, which underlying shares will be issued and delivered upon the resignation of the director holding the restricted stock units;

● excludes 820,422 shares of common stock reserved for issuance under our 2018 Equity Incentive Plan (the “2018 Plan”) as of June 30, 2022. Upon completion of this offering, we will grant no further awards under the 2018 Plan;

● excludes                  shares of common stock that will be made available for future issuance under our 2022 Equity Incentive Plan (the “2022 Plan”) upon completion of this offering, based on the initial public offering price, plus any future increases in the number of shares of common stock reserved for issuance under the 2022 Plan pursuant to provisions thereof that automatically increase the share reserve under the plan each year. Upon the closing of this offering, the number of shares of common stock reserved for issuance pursuant to future awards under the 2022 Plan will equal                   % of the aggregate of the number of shares of common stock issued and outstanding upon the closing of this offering; and

● assumes no exercise by the underwriter of its overallotment option to purchase additional shares of common stock or warrants to purchase shares of common stock.

Emerging Growth Company under the JOBS Act

We qualify as an “emerging growth company” (an “EGC”) under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we have elected to take advantage of reduced reporting requirements and are relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

● we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

● we are exempt from the requirement to obtain an attestation and report from our auditors on whether we maintained effective internal control over financial reporting under the Sarbanes-Oxley Act;

● we are permitted to provide less extensive disclosure about our executive compensation arrangements; and

● we are not required to give our stockholders non-binding advisory votes on executive compensation or golden parachute arrangements.

We may take advantage of these provisions until December 31, 2027 (the last day of the fiscal year following the fifth anniversary of our initial public offering) if we continue to be an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, have more than $700 million in market value of our shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have elected to provide two years of audited financial statements. Additionally, we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

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Risk Factors Summary

The following summarizes the principal factors that make an investment in our Company speculative or risky, all of which are more fully described in the section below titled “Risk Factors” beginning on page 10 of this prospectus. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled “Risk Factors” before deciding whether to invest in our common stock. These risks include, but are not limited to:

● We have a limited operating history and have incurred significant losses since our inception. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.

● We have never generated any revenue and our ability to generate revenue depends on our ability to successfully complete the development of, obtain regulatory approval for and commercialize our product candidates.

● We will likely require additional capital to commercialize our product candidates. If we are unable to obtain additional financing, we would be forced to delay, reduce or eliminate our product development programs.

● We depend entirely on the successful development, including our current clinical trials, regulatory approval and commercialization of our product candidates, which are in the early stages of clinical development.

● Failure to obtain regulatory approval for our product candidates will prevent us from commercializing our products, and our ability to generate revenue will be limited. Even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product, and we may be required to acquire additional product candidates.

● Even if we obtain marketing approval for any of our product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates could be subject to labeling and other restrictions and withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates.

● We face intense competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively against our current or future competitors.

● Our future growth may depend, in part, on our ability to penetrate international markets, for which we intend to rely on collaborations with third parties and where we would be subject to additional regulatory burdens and additional risks and uncertainties. International sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our results of operations.

● We currently and in the future will continue to depend on third parties to conduct clinical trials for our product candidates. If and when any of our product candidates are approved for commercialization, we will depend on third parties to manufacture of our product candidates and, if we are unable to establish a sales and marketing infrastructure, to commercialize our products. The failure of these parties to fulfill their contractual obligations may adversely impact on our ability to obtain regulatory approval for or commercialize our product candidates.

● Any termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

● Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

● Our ability to successfully market our product candidates will depend in part on the level of reimbursement that government health administration authorities, private health coverage insurers and other organizations provide for the cost of our products and related treatments. We may not be able to sell our product candidates profitably if adequate prices are not approved or coverage and reimbursement is unavailable or limited in scope, which may constrain our future revenue.

● We are, and in the future will continue to be, dependent on the assignment from third parties for certain of our pharmaceutical compounds and potential product candidates. Therefore, our ability to develop and commercialize our products may be impacted by the invalidity or termination of such assignments and the enforceability of these third parties’ intellectual property rights.

● Failure to obtain and maintain patent protection or other necessary intellectual property rights for our product candidates or our technologies, or infringement by our product candidates of the intellectual property rights of others, could increase our costs, delay or prevent our development and commercialization efforts and ultimately adversely affect our ability to generate revenues and attain profitability.

● We are highly dependent on the principal members of our executive team, the loss of whose services may adversely impact the achievement of our objectives.

● The outbreak of COVID-19, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including the execution of our planned clinical trials.

● We have had a number of related party transactions with our current and former affiliates, including Harrow, and in the future, may continue to enter into transactions with our current and former affiliates. These related party transactions may present difficult conflicts of interest, result in disadvantages to our Company and impair investor confidence.

● Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a significant disruption of our product development programs and our ability to operate our business effectively.

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SUMMARY FINANCIAL DATA

You should read the following summary financial data together with our financial statements and the related notes appearing elsewhere in this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus. We have derived the statement of operations data for the years ended December 31, 2021 and 2020 from our audited financial statements appearing elsewhere in this prospectus. We have derived the statements of operations data for the six months ended June 30, 2022 and 2021 and the balance sheet data as of June 30, 2022 from our unaudited interim condensed financial statements appearing elsewhere in this prospectus. We have included, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of the financial information set forth in those unaudited interim condensed financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future.

	Six months ended June 30,						Year ended December 31,
	2022			2021			2021			2020
	(unaudited)
Statement of Operations Data:
Operating expenses:
General and administrative	$	1,182,209		$	1,462,768		$	2,541,579		$	1,990,099
Research and development		4,349,995			1,469,225			3,525,549			2,541,180
Total operating expenses		5,532,204			2,931,993			6,067,128			4,531,279
Loss from operations		(5,532,204	)		(2,931,993	)		(6,067,128	)		(4,531,279	)
Total other income (expense), net		(986,131	)		1,091			(581,793	)		7,681
Loss before income taxes		(6,518,335	)		(2,930,902	)		(6,648,921	)		(4,523,598	)
Provision for income taxes		-			(6,000	)		(5,674	)		(17,594	)
Net loss	$	(6,518,335	)	$	(2,936,902	)	$	(6,654,595	)	$	(4,541,192	)
Net loss per shares, basic and diluted	$	(1.14	)	$	(0.52	)	$	(1.17	)	$	(0.84	)
Weighted average shares outstanding, basic and diluted		5,704,344			5,624,508			5,664,755			5,407,778
Pro forma net loss per share, basic and diluted (unaudited)(1)
Pro forma weighted average shares outstanding, basic and diluted (unaudited)(1)

(1) Pro forma net loss per share, basic and diluted, and pro forma weighted average shares outstanding, basic and diluted, have been calculated after giving effect to (i) the conversion of 2,287,000 shares of our Series A Preferred Stock outstanding as of June 30, 2022 and December 31, 2021 into 2,287,000 shares of our common stock upon completion of this offering; and (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $              into               shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus.

The following table presents our summary balance sheet data as of June 30, 2022:

● on an actual basis;

● on a pro forma basis after giving effect to (i) the conversion of 2,287,000 shares of our Series A Preferred Stock outstanding as of June 30, 2022 into 2,287,000 shares of our common stock upon completion of this offering; (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $                into              shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus; and (iii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $       per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount;

● on a pro forma as adjusted basis after giving effect to the pro forma adjustments and giving further effect to the sale of              shares of common stock in this offering at an assumed initial public offering price of $              per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	As of June 30, 2022
	Actual			Pro forma	Pro forma as adjusted
Balance Sheet Data:
Cash and cash equivalents	$	6,179,990		$	$
Total other current assets		17,295
Total assets		6,970,267
Note payable, net of discount		14,974,956
Total other liabilities		2,687,004
Redeemable convertible preferred stock		10,338,952
Total stockholders’ deficit		(21,030,645	)

The pro forma as adjusted information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, total assets and total stockholders’ equity (deficit) by $               million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, an increase (decrease) of 1 million shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, total assets and total stockholders’ equity (deficit) by $                  million, assuming no change in the assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock. The risks set forth below are not the only ones facing our Company. Additional risks and uncertainties may exist that are not currently known to us or that we currently do not believe are material, which could also adversely affect our business, financial condition, results of operations and prospects. If any of the following risks actually materialize, our business, financial condition, results of operations and prospects could suffer. In such event, the market price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

We are a clinical stage pharmaceutical company incorporated in April 2018 and have a limited operating history. In December 2018, Harrow assigned its patented and patent-pending formulations that comprise some of our product candidates, including MELT-300, to us as assets. Marketing approval of our product candidates will require extensive clinical testing data to support the safety and effectiveness requirements needed for regulatory approval. We have never generated any revenue from product sales and have incurred net losses each year since we commenced operations. For the six months ended June 30, 2022 and 2021, our net losses were $6.5 million and $2.9 million, respectively. For the years ended December 31, 2021 and 2020, our net losses were $6.7 million and $4.5 million, respectively. We expect that it will be several years, if ever, before we have a product candidate ready for regulatory approval and commercialization. The likelihood of success of our business plan must be considered in light of the challenges, substantial expenses, difficulties, complications and delays frequently encountered in connection with developing and expanding early-stage businesses and the regulatory and competitive environment in which we operate. Pharmaceutical product development is a highly speculative undertaking, involves a substantial degree of risk, and is a capital-intensive business.

We have devoted most of our financial resources to product development, including our non-clinical development activities and clinical trials. To date, we have financed our operations exclusively through the sale of equity securities and debt. The size of our future net losses will depend, in part, on the rate of future expenditures and our ability to generate revenue. To date, none of our product candidates have been commercialized, and if our product candidates are not successfully developed or commercialized, or if revenue is insufficient following marketing approval, we will not achieve profitability and our business may fail. Even if we successfully obtain regulatory approval to market our product candidates in the U.S., our revenue is also dependent upon the size of the markets outside of the U.S., as well as our ability to obtain market approval and achieve commercial success.

We expect to continue to incur substantial and increased expenses as we expand our development activities and advance our clinical programs, particularly with respect to our planned clinical development for MELT-300. We also expect an increase in our expenses associated with creating additional infrastructure to support operations as a public company. As a result of the foregoing, we expect to continue to incur significant and increasing losses and negative cash flows for the foreseeable future.

We have never generated any revenue and may never become profitable or be able to sustain profitability.

Our ability to generate revenue and achieve profitability depends on our ability, alone or with collaborators, to successfully complete the development of, obtain the necessary regulatory approvals for, and commercialize our product candidates. We do not anticipate generating revenue from sales of our product candidates for the foreseeable future, if ever. Our ability to generate future revenue from product sales depends heavily on our success in:

● completing clinical development of MELT-300, as well as advancing clinical development of our other product candidates;

● obtaining regulatory approval for MELT-300 and our other product candidates; and

● launching and commercializing any product candidates for which we receive regulatory approval, either by building our own targeted sales force or by collaborating with third parties.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amount of increased expenses, when, or if, we will begin to generate revenue from product sales, or when, or if, we will be able to achieve or maintain profitability. In addition, our expenses could increase beyond expectations if we are required by the FDA to perform studies in addition to those that we currently anticipate.

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Even if one or more of our product candidates is approved for commercial sale, to the extent we do not engage a third-party collaborator, we anticipate incurring significant costs associated with commercializing any approved product candidate. Even if we are able to generate revenue from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

If we fail to obtain additional financing, we would be forced to delay, reduce or eliminate our product development programs.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect our development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our clinical programs, including our planned and future clinical trials for MELT-300.

We estimate that the net proceeds from this offering will be approximately $           million, assuming an initial public offering price of $                  per share (the mid-point of the price range set forth on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. As of June 30, 2022, we had cash and cash equivalents of $6.2 million. Based upon our current operating plan, we believe that the net proceeds from this offering, together with our existing cash and cash equivalents and taking into account the Harrow Loan Agreement Amendments (as defined below), will enable us to fund our operating expenses and capital requirements through 2023, including the completion of our the MELT-300 Phase 2 study and, if this Phase 2 study is successful, the initiation of our MELT-300 Phase 3 study. Regardless of our expectations as to how long our net proceeds from this offering will fund our operations, changing circumstances beyond our control may cause us to consume capital more rapidly than we currently anticipate. For example, our clinical trials may encounter technical, enrollment or other difficulties that could increase our development costs more than we expect. In any event, we will likely require additional capital prior to completing Phase 3 program of, filing for regulatory approval for, or commercializing, MELT-300 or any of our other product candidates.

Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to:

● significantly delay, scale back or discontinue the development or commercialization of our product candidates;

● seek corporate partners for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;

● relinquish or license on unfavorable terms, our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or

● significantly curtail, or cease, operations.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing development and commercialization efforts, which will have a material adverse effect on our business, operating results and prospects.

We are subject to going concern risks.

The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Our future operations are dependent upon the identification and successful completion of equity or debt financing, including this offering, and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.

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We may sell additional equity or debt securities to fund our operations, which may result in dilution to our stockholders and impose restrictions on our business.

If we raise additional capital by issuing equity or debt securities to support our operations, as we have historically done, our existing stockholders and new investors participating in this offering, as well as our business, could be adversely affected. The sale of additional equity or convertible debt securities would result in the issuance of additional shares of our capital stock and dilution to all of our stockholders, including investors participating in this offering. We may also issue equity securities that provide for rights, preferences and privileges senior to those of our common stock. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable to us.

Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

We depend entirely on the success of our product candidates, which have not yet demonstrated effectiveness for their target or any other indications. If we are unable to generate revenues from our product candidates, our ability to create stockholder value will be limited.

Our product candidates are in the early stages of clinical development. We do not generate revenues from any FDA approved drug products. We have submitted multiple INDs to the FDA, seeking approval to initiate clinical trials in humans of our product candidates, and may submit additional INDs in the future. We must submit our clinical trial protocols and receive approvals from the FDA before we can commence any clinical trials. Also, if we determine to pursue international approvals, we may be required to seek approvals from international regulatory authorities before we can commence any clinical trials. We may not be successful in obtaining acceptance from the FDA (or comparable foreign regulatory authorities, if we determine to pursue international approvals) to start our clinical trials. If we do not obtain such acceptance, the time in which we expect to commence clinical programs for any product candidate will be extended and such extension will increase our expenses and increase our need for additional capital. Moreover, there is no guarantee that our clinical trials will be successful or that we will continue clinical development in support of marketing approval from the FDA (or comparable foreign regulatory authorities, if we determine to pursue international approvals) for any indication. We note that most product candidates never reach the clinical development stage and even those that commence clinical development have only a small chance of successfully completing clinical development and gaining regulatory approval. Therefore, our business currently depends entirely on the successful development, regulatory approval and commercialization of our product candidates, which may never occur.

If we are not able to obtain any required regulatory approvals for our product candidates, we will not be able to commercialize our product candidates and our ability to generate revenue will be limited.

We must successfully complete clinical trials for our product candidates before we can apply for marketing approval. Even if we complete our clinical trials, it does not assure marketing approval. The result of our clinical trials may be inconclusive or unsuccessful, which would materially harm our business. Even if our initial clinical trials are successful, we are required to conduct additional clinical trials to establish our product candidates’ safety and effectiveness before an NDA, or its foreign equivalent, can be submitted to the FDA, or comparable foreign regulatory authorities, for marketing approval of our product candidates.

Clinical testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. Success in early phases of pre-clinical and clinical trials does not ensure that later clinical trials will be successful, and interim results of a clinical trial do not necessarily predict final results. A failure of one or more of our clinical trials can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates. The research, testing, manufacturing, labeling, packaging, storage, approval, sale, marketing, advertising and promotion, pricing, export, import and distribution of drug products are subject to extensive regulation by the FDA and other regulatory authorities in the U.S. and other countries, which regulations differ from country to country. We are not permitted to market our product candidates as prescription pharmaceutical products in the U.S. until we receive approval of an NDA from the FDA, or in any foreign countries until we receive the requisite approval from such countries. In the U.S., the FDA generally requires the completion of clinical trials of each drug to establish its safety and effectiveness and extensive pharmaceutical development to ensure its quality before an NDA is approved. Regulatory authorities in other jurisdictions impose similar requirements. Of the large number of drugs in development, only a small percentage result in the submission of an NDA to the FDA and even fewer are eventually approved for commercialization. We have not submitted an NDA to the FDA or comparable applications to other regulatory authorities. If our development efforts for our product candidates, including regulatory approval, are not successful for their planned indications, or if adequate demand for our product candidates is not generated, our business will be materially adversely affected.

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The FDA review and approval process for NDAs generally involves the following:

● completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practices (“GLP”) requirements;

● submission to the FDA of an IND, which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made;

● approval by an Institutional Review Board (“IRB”) or independent ethics committee at each clinical trial site before each trial may be initiated;

● performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, current good clinical practice (“cGCP”) requirements and other clinical trial-related regulations to establish the safety and effectiveness of the investigational drug for each proposed indication;

● preparation and submission of the NDA to the FDA after completion of all pivotal clinical trials that includes substantial evidence of safety and effectiveness from results of nonclinical and clinical trials, and satisfactory completion of an FDA Advisory Committee review, if applicable;

● a determination by the FDA within 60 days of its receipt of the NDA to accept the filing for review;

● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug will be produced to assess compliance with current good manufacturing practices (“cGMP”) requirements;

● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and

● FDA review and approval of the NDA, including consideration of the views of any FDA Advisory Committee, prior to any commercial marketing or sale of the drug for the intended indications in the U.S.;

● the preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, or at all;

● our success depends on the receipt of regulatory approval and the issuance of such regulatory approvals is uncertain and subject to a number of risks, including the following:

● the results of toxicology studies may not support the filing of an IND for our product candidates;

● the FDA or comparable foreign regulatory authorities or IRBs may disagree with the design or implementation of our clinical trials;

● we may not be able to provide acceptable evidence of our product candidates’ safety and effectiveness;

● the results of our clinical trials may not be satisfactory or may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory agencies for marketing approval;

● the dosing of our product candidates in a particular clinical trial may not be at an optimal level;

● patients in our clinical trials may suffer adverse effects for reasons that may or may not be related to our product candidates;

● the data collected from clinical trials may not be sufficient to support the submission of an NDA or to obtain regulatory approval in the U.S. or elsewhere;

● the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Failure to obtain regulatory approval for our product candidates for the foregoing, or any other reasons, will prevent us from commercializing our product candidates, and our ability to generate revenue will be materially impaired. We cannot guarantee that regulators will agree with our assessment of the results of the clinical trials we intend to conduct in the future or that such trials will be successful. The FDA, European Medicines Agency and other regulators have substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional clinical trials, or pre-clinical or other studies. In addition, varying interpretations of the data obtained from pre-clinical and clinical testing could delay, limit or prevent regulatory approval of our product candidates.

We are a clinical stage company and we have not submitted an NDA or received regulatory approval to market our product candidates in any jurisdiction. We have only limited experience in filing the applications necessary to gain regulatory approvals and expect to rely on consultants and third-party contract research organizations (“CROs”) with expertise in this area to assist us in this process. Securing regulatory approvals to market a product requires the submission of pre-clinical, clinical, and/or pharmacokinetic data, information about product manufacturing processes and inspection of facilities and supporting information to the appropriate regulatory authorities for each therapeutic indication to establish a product candidate’s safety and effectiveness for each indication. Our product candidates may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude us from obtaining regulatory approval or prevent or limit commercial use with respect to one or all intended indications.

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The process of obtaining regulatory approvals is expensive, often takes many years, if approval is obtained at all, and can vary substantially based upon, among other things, the type, complexity and novelty of the product candidates involved, the jurisdiction in which regulatory approval is sought and the substantial discretion of the regulatory authorities. Changes in regulatory approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for a submitted product application may cause delays in the approval or rejection of an application. Regulatory approval obtained in one jurisdiction does not necessarily mean that a product candidate will receive regulatory approval in all jurisdictions in which we may seek approval, but the failure to obtain approval in one jurisdiction may negatively impact our ability to seek approval in a different jurisdiction. Failure to obtain regulatory marketing approval for our product candidates in any indication will prevent us from commercializing the product candidate, and our ability to generate revenue will be materially impaired.

If we fail to successfully commercialize any of our product candidates, we may need to acquire additional product candidates and our business will be adversely affected.

We have never commercialized any product candidates and do not have any other compounds in pre-clinical testing, lead optimization or lead identification stages beyond our product candidates. We cannot be certain that any of our product candidates will prove to be sufficiently effective and safe to meet applicable regulatory standards for any indication. If we fail to successfully commercialize any of our product candidates for their targeted indications, whether as stand-alone therapies or in combination with other therapeutic agents, our business would be adversely affected.

Even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product and the revenue that we generate from its sales, if any, may be limited.

If approved for marketing, the commercial success of our product candidates will depend upon each product’s acceptance by the medical community, including physicians, patients and health care payors. The degree of market acceptance for any of our product candidates will depend on a number of factors, including:

● demonstration of clinical safety and efficacy;

● relative convenience, dosing burden and ease of administration;

● the prevalence and severity of any adverse effects;

● the willingness of physicians to prescribe our product candidates, and the target patient population to try new therapies;

● efficacy of our product candidates compared to competing products;

● the introduction of any new products that may in the future become available targeting indications for which our product candidates may be approved;

● new procedures or therapies that may reduce the incidences of any of the indications in which our product candidates may show utility;

● pricing and cost-effectiveness;

● the inclusion or omission of our product candidates in applicable therapeutic guidelines;

● the effectiveness of our own or any future collaborators’ sales and marketing strategies;

● limitations or warnings contained in approved labeling from regulatory authorities;

● our ability to obtain and maintain sufficient third-party coverage or reimbursement, including Medicare and Medicaid, private health insurers and other third-party payors or to receive the necessary pricing approvals from government bodies regulating the pricing and usage of therapeutics; and

● the willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement or government pricing approvals.

If any of our product candidates are approved, but do not achieve an adequate level of acceptance by physicians, health care payors, and patients, we may not generate sufficient revenue and we may not be able to achieve or sustain profitability. Our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.

In addition, even if we obtain regulatory approvals, the timing or scope of any approvals may prohibit or reduce our ability to commercialize our product candidates successfully. For example, if the approval process takes too long, we may miss market opportunities and give other companies the ability to develop competing products or establish market dominance. Any regulatory approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render our product candidates not commercially viable. For example, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for any of our product candidates, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve any of our product candidates with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that indication. Further, the FDA or comparable foreign regulatory authorities may place conditions on approvals or require a Risk Evaluation and Mitigation Strategy (“REMS”) to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA may also require a REMS for an approved product when new safety information emerges. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of our product candidates. Moreover, product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following the initial marketing of the product. Any of the foregoing scenarios could materially harm the commercial success of our product candidates.

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Even if we obtain marketing approval for any of our product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates could be subject to labeling and other restrictions and withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates.

Even if we obtain regulatory approval for any of our product candidates for an indication, the FDA or foreign equivalent may still impose significant restrictions on their indicated uses, marketing or the conditions of approval, or impose ongoing requirements for potentially costly and time-consuming post-approval studies, including Phase 4 clinical trials and post-market surveillance to monitor safety and efficacy. Our product candidates will also be subject to ongoing regulatory requirements governing the manufacturing, labeling, packaging, storage, distribution, safety surveillance, advertising, promotion, recordkeeping and reporting of adverse events and other post-market information. These requirements include registration with the FDA, as well as continued compliance with cGCPs for any clinical trials that we conduct post-approval. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents.

With respect to sales and marketing activities by us or any future partner, advertising and promotional materials must comply with FDA rules in addition to other applicable federal, state and local laws in the U.S. and similar legal requirements in other countries. In the U.S., the distribution of product samples to physicians must comply with the requirements of the U.S. Prescription Drug Marketing Act. Application holders must obtain FDA approval for product and manufacturing changes, depending on the nature of the change. We may also be subject, directly or indirectly through our customers and partners, to various fraud and abuse laws, including, without limitation, the U.S. Anti-Kickback Statute, U.S. False Claims Act, and similar state laws, which impact, among other things, our proposed sales, marketing, and scientific/educational grant programs. If we participate in the U.S. Medicaid Drug Rebate Program, the Federal Supply Schedule of the U.S. Department of Veterans Affairs, or other government drug programs, we will be subject to complex laws and regulations regarding reporting and payment obligations. All of these activities are also potentially subject to U.S. federal and state consumer protection and unfair competition laws. Similar requirements exist in many of these areas in other countries.

In addition, if any of our product candidates are approved for a particular indication, our product labeling, advertising and promotion would be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about prescription products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. If we receive marketing approval for our product candidates, physicians may nevertheless legally prescribe our products to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability and government fines. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees of permanent injunctions under which specified promotional conduct is changed or curtailed.

If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, problems with the facility where the product is manufactured, or we or our manufacturers fail to comply with applicable regulatory requirements, we may be subject to the following administrative or judicial sanctions:

● restrictions on the marketing or manufacturing of the product, mandated modification of promotional materials or the issuance of corrective information, issuance by FDA or other regulatory authorities of safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product, or withdrawal of the product from the market or voluntary or mandatory product recalls;

● issuance of warning letters or untitled letters;

● clinical holds on ongoing clinical trials;

● injunctions or the imposition of civil or criminal penalties or monetary fines;

● suspension or withdrawal of regulatory approval;

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● refusal to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product license approvals;

● suspension or imposition of restrictions on operations, including costly new manufacturing requirements; or

● product seizure or detention or refusal to permit the import or export of product.

The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue. Adverse regulatory action, whether pre- or post-approval, can also potentially lead to product liability claims and increase our product liability exposure.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries if we determine to pursue international approvals. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the U.S., including additional preclinical studies or clinical trials, as clinical studies conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the U.S., a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

If applicable, obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/ or to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

We currently have no sales and marketing organization. If we are unable to secure a sales and marketing partner or establish satisfactory sales and marketing capabilities, we may not successfully commercialize any of our product candidates.

At present, we have no sales or marketing personnel. To commercialize products that are approved for commercial sales, we must either collaborate with third parties that have such commercial infrastructure or develop our own sales and marketing infrastructure. If we are not successful entering into appropriate collaboration arrangements, recruiting sales and marketing personnel or in building a sales and marketing infrastructure, we will have difficulty successfully commercializing our product candidates, which would adversely affect our business, operating results and financial condition.

We may not be able to enter into collaboration agreements on terms acceptable to us or at all. In addition, even if we enter into such relationships, we may have limited or no control over the sales, marketing and distribution activities of these third parties. In addition, our ability to partner with third parties to commercialize our product candidates may be adversely impacted by the terms of Harrow’s right of first refusal on third-party commercialization rights of our product candidates. Our future revenues may depend heavily on the success of the efforts of these third parties. If we elect to establish a sales and marketing infrastructure we may not realize a positive return on this investment. In addition, we will have to compete with established and well-funded pharmaceutical and biotechnology companies to recruit, hire, train and retain sales and marketing personnel. Factors that may inhibit our efforts to commercialize our product candidates without strategic partners or licensees include:

● our inability to recruit and retain adequate numbers of effective sales and marketing personnel;

● the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any of our product candidates;

● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

● unforeseen costs and expenses associated with creating an independent sales and marketing organization.

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We face competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We have existing competitors, including a number of more mature and better capitalized pharmaceutical companies, compounding pharmacies and outsourcing facilities that are further along in product development than us and potential new competitors in a number of jurisdictions, many of which have or will have substantially greater name recognition, commercial infrastructures and financial, technical and personnel resources than we have. Established competitors may invest heavily to quickly discover and develop novel compounds that could make any of our product candidates obsolete or uneconomical. Any new product that competes with an approved product may need to demonstrate compelling advantages in efficacy, cost, convenience, tolerability and safety to be commercially successful. Other competitive factors, including generic competition, could force us to lower prices or could result in reduced sales. In addition, new products developed by others could emerge as competitors to our product candidates. If we are not able to compete effectively against our current and future competitors, our business will not grow and our financial condition and operations will suffer.

Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

In the U.S. and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval for our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our product candidates. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We do not know whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In the U.S., cost reduction initiatives and other provisions of healthcare reform laws could decrease the coverage and price that we receive for our product candidates and could seriously harm our business. Any reduction in reimbursement from federal or state payors may result in a similar reduction in payments from private payors.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Health Care Reform Law”), is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The Health Care Reform Law revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states. Further, the Health Care Reform Law imposed a significant annual fee on companies that manufacture or import branded prescription drug products.

The Health Care Reform Law remains subject to legislative efforts to repeal, modify or delay the implementation of the law. If the Health Care Reform Law is repealed or modified, or if implementation of certain aspects of the Health Care Reform Law are delayed, such repeal, modification or delay may materially adversely impact our business, strategies, prospects, operating results or financial condition. We are unable to predict the full impact of any repeal, modification or delay in the implementation of the Health Care Reform Law on us at this time.

In addition, other legislative changes have been proposed and adopted in the U.S. since the Health Care Reform Law was enacted. We expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, and in turn could significantly reduce the projected value of certain development projects and reduce or eliminate our profitability.

Our product candidates may face competition sooner than expected.

Our success will depend in part on our ability to obtain and maintain patent protection for certain of our product candidates and technologies and to prevent third parties from infringing upon our proprietary rights. We must also operate without infringing upon patents and proprietary rights of others, including by obtaining appropriate licenses to patents or other proprietary rights held by third parties, if necessary. However, the patents that have been issued may be successfully challenged and the applications we have filed or may file in the future may never yield patents that protect our inventions and intellectual property assets. Failure to protect and obtain patents that sufficiently cover our formulations and technologies would limit our protection against generic drug manufacturers, pharmaceutical companies compounding pharmacies, outsourcing facilities, and other parties who may seek to copy our products, produce products substantially similar to ours or use technologies substantially similar to those we own.

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We also intend to seek data exclusivity or market exclusivity for our product candidates provided under the FDCA, and similar laws in other countries. The FDCA provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than BA or bioequivalence studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving Abbreviated New Drug Applications (“ANDAs”) for drugs containing the original active agent.

Even if our product candidates are considered to be reference products eligible for three years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full NDA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of the products. Moreover, an amendment or repeal of the FDCA could result in a shorter exclusivity period for our product candidates, which would have a material adverse effect on our business.

Our future growth may depend, in part, on our ability to penetrate international markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our ability to commercialize our product candidates in international markets for which we intend to rely on collaborations with third parties. If we commercialize any of our product candidates in international markets, we would be subject to additional risks and uncertainties, including:

● our customers’ ability to obtain reimbursement for our product candidates in international markets;

● our inability to directly control commercial activities because we are relying on third parties;

● the burden of complying with complex and changing international regulatory, tax, accounting and legal requirements;

● different medical practices and customs in foreign countries affecting acceptance in the marketplace;

● import or export licensing requirements;

● longer accounts receivable collection times;

● longer lead times for shipping;

● language barriers for technical training;

● reduced protection of intellectual property rights in some foreign countries;

● pricing and foreign currency exchange rate fluctuations; and

● the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.

International sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our results of operations.

If we market any of our product candidates in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties.

The FDA enforces laws and regulations that require that the promotion of pharmaceutical products be consistent with the approved prescribing information. While physicians may prescribe an approved product for a so-called “off label” use, it is unlawful for a pharmaceutical company to promote its products in a manner that is inconsistent with its approved label and any company that engages in such conduct can subject that company to significant liability. Similarly, industry codes in the EU and other foreign jurisdictions prohibit companies from engaging in off-label promotion, and regulatory agencies in various countries enforce code violations with civil penalties. While we intend to ensure that our products’ promotional materials are consistent with their labeling, regulatory agencies may disagree with our assessment and may issue untitled letters, warning letters or may institute other civil or criminal enforcement proceedings. In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal healthcare fraud and abuse laws have been applied in recent years to restrict certain marketing practices in the pharmaceutical industry. These laws include the U.S. Anti-Kickback Statute, U.S. False Claims Act and similar state laws. Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws.

The U.S. Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted broadly to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are several statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Our practices may not, in all cases, meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, recent health care reform legislation has strengthened these laws. For example, the Health Care Reform Law, among other things, amends the intent requirement of the U.S. Anti-Kickback Statute and criminal health care fraud statutes; a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the Health Care Reform Law provides that the government may assert that a claim including items or services resulting from a violation of the U.S. Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the U.S. False Claims Act. Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid.

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Over the past few years, several pharmaceutical and other healthcare companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, such as: allegedly providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused claims to be submitted to Medicare or Medicaid for non-covered, off-label uses; and submitting inflated best price information to the Medicaid Rebate Program to reduce liability for Medicaid rebates. Most states also have statutes or regulations similar to the U.S. Anti-Kickback Statute and the U.S. False Claims Act, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. Sanctions under these federal and state laws may include substantial civil monetary penalties, exclusion of a manufacturer’s products from reimbursement under government programs, substantial criminal fines and imprisonment.

We currently are completely dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates could be halted, delayed or made less profitable if those third parties fail to obtain manufacturing approval from the FDA or comparable foreign regulatory authorities, fail to provide us with sufficient quantities of our product candidates or fail to do so at acceptable quality levels or prices.

We do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture the active pharmaceutical ingredient (“API”) in our product candidates for use in our clinical trials or for commercial product, if any. In addition, we do not have the capability to encapsulate any of our product candidates as a finished drug product for commercial distribution. As a result, we will be obligated to rely on contract manufacturers, if and when any of our product candidates are approved for commercialization. We have not entered into an agreement with any contract manufacturers for commercial supply and may not be able to engage a contract manufacturer for commercial supply of any of our product candidates on favorable terms to us, or at all.

The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or comparable foreign regulatory authorities pursuant to inspections that will be conducted after we submit an NDA to the FDA or equivalent to other relevant regulatory authorities. We will not control the manufacturing process of, and will be completely dependent on, our contract manufacturing partners for compliance with cGMPs for manufacture of both active drug substances and finished drug products. These cGMP regulations cover all aspects of the manufacturing, testing, quality control and record keeping relating to our product candidates. If our contract manufacturers do not successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.

Our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements. We will not have control over our contract manufacturers’ compliance with these regulations and standards. Failure by any of our contract manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product candidates, delays, suspensions or withdrawals of approvals, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect our business. In addition, we will not have control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Failure by our contract manufacturers to comply with or maintain any of these standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates.

If, for any reason, these third parties are unable or unwilling to perform, we may not be able to terminate our agreements with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements. If these manufacturers or any alternate manufacturer of finished drug product experiences any significant difficulties in its respective manufacturing processes for our API or finished products or should cease doing business with us, we could experience significant interruptions in the supply of any of our product candidates or may not be able to create a supply of our product candidates at all. Were we to encounter manufacturing issues, our ability to produce a sufficient supply of any of our product candidates might be negatively affected. Our inability to coordinate the efforts of our third-party manufacturing partners, or the lack of capacity available at our third-party manufacturing partners, could impair our ability to supply any of our product candidates at required levels. Because of the significant regulatory requirements that we would need to satisfy to qualify a new bulk or finished product manufacturer, if we face these or other difficulties with our current manufacturing partners, we could experience significant interruptions in the supply of any of our product candidates if we decided to transfer the manufacture of any of our product candidates to one or more alternative manufacturers in an effort to deal with the difficulties.

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Any manufacturing problem or the loss of a contract manufacturer could be disruptive to our operations and result in lost sales. Additionally, we rely on third parties to supply the raw materials needed to manufacture our potential products, and in some cases, we rely on single-source suppliers. Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced control over production costs, delivery schedules, reliability and quality. Further, our reliance on single-source suppliers could make us more susceptible to risks if such single-source supplier fails to deliver materials as required. Any unanticipated disruption to a future contract manufacturer caused by problems at suppliers could delay shipment of any of our product candidates, increase our cost of goods sold and result in lost sales.

We cannot guarantee that our future manufacturing and supply partners will be able to reduce the costs of commercial scale manufacturing of any of our product candidates over time. If the commercial-scale manufacturing costs of any of our product candidates are higher than expected, these costs may significantly impact our operating results. To reduce costs, we may need to develop and implement process improvements. However, to do so, we will need, from time to time, to notify or make submissions with regulatory authorities, and the improvements may be subject to approval by such regulatory authorities. We cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion. We also cannot guarantee that we will be able to enhance and optimize output in our commercial manufacturing process. If we cannot enhance and optimize output, we may not be able to reduce our costs over time.

We expect to rely on third parties to conduct clinical trials for our product candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize any of our product candidates and our business would be substantially harmed.

We expect to enter into agreements with third-party CROs to conduct and manage our clinical programs including contracting with clinical sites to perform our clinical studies. We plan to rely heavily on these parties for execution of clinical studies for our product candidates and will control only certain aspects of their activities. Nevertheless, we will be responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on CROs and clinical sites will not relieve us of our regulatory responsibilities. We and our CROs will be required to comply with cGCPs, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities for any products in clinical development. The FDA and its foreign equivalents enforce these cGCP regulations through periodic inspections of trial sponsors, principal investigators and trial sites. If we or our CROs fail to comply with applicable cGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, the FDA or other regulatory authorities will determine that any of our clinical trials comply with cGCPs. In addition, our clinical trials must be conducted with products produced under cGMP regulations and will require a large number of test subjects. Our failure or the failure of our CROs or clinical sites to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action up to and including civil and criminal penalties.

Although we intend to design the clinical trials for our product candidates in consultation with CROs, we expect that the CROs will manage all of the clinical trials conducted at contracted clinical sites. As a result, many important aspects of our drug development programs would be outside of our direct control. In addition, the CROs and clinical sites may not perform all of their obligations under arrangements with us or in compliance with regulatory requirements. If the CROs or clinical sites do not perform clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, the development and commercialization of any of our product candidates for the subject indication may be delayed or our development program materially and irreversibly harmed. We cannot control the amount and timing of resources these CROs and clinical sites will devote to our program or any of our product candidates. If we are unable to rely on clinical data collected by our CROs, we could be required to repeat, extend the duration of, or increase the size of our clinical trials, which could significantly delay commercialization and require significantly greater expenditures.

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If any of our relationships with these third-party CROs or clinical sites terminate, we may not be able to enter into arrangements with alternative CROs or clinical sites. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any such clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. In addition, the COVID-19 pandemic may impact our ability to initiate clinical sites and recruit, enroll and retain patients and may divert healthcare resources away from clinical trials. As a result, our financial results and the commercial prospects for any of our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

Any termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

The commencement and completion of clinical studies can be delayed for a number of reasons, including delays related to:

● the FDA or a comparable foreign regulatory authority failing to grant permission to proceed and placing the clinical study on hold;

● subjects for clinical testing failing to enroll or remain in our trials at the rate we expect;

● a facility manufacturing any of our product candidates being ordered by the FDA or other government or regulatory authorities to temporarily or permanently shut down due to violations of cGMP requirements or other applicable requirements, or cross-contaminations of product candidates in the manufacturing process;

● any changes to our manufacturing process that may be necessary or desired;

● subjects choosing an alternative treatment for the indications for which we are developing our product candidates, or participating in competing clinical studies;

● subjects experiencing severe or unexpected drug-related adverse effects;

● reports from clinical testing on similar technologies and products raising safety and/or efficacy concerns;

● third-party clinical investigators losing their license or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or employing methods consistent with the clinical trial protocol, cGMP requirements, or other third parties not performing data collection and analysis in a timely or accurate manner;

● inspections of clinical study sites by the FDA, comparable foreign regulatory authorities, the CROs, or IRBs finding regulatory violations that require us to undertake corrective action, result in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study, or that prohibit us from using some or all of the data in support of our marketing applications;

● third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or any of the data produced by such contractors in support of our marketing applications;

● one or more IRBs refusing to approve, suspending or terminating the study at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the trial; reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● deviations of the clinical sites from trial protocols or dropping out of a trial;

● adding new clinical trial sites;

● the inability of the CRO to execute any clinical trials for any reason; and

● government or regulatory delays or “clinical holds” requiring suspension or termination of a trial.

Product development costs for any of our product candidates will increase if we have delays in testing or approval or if we need to perform more or larger clinical studies than planned. Additionally, changes in regulatory requirements and policies may occur and we may need to amend study protocols to reflect these changes. Amendments may require us to resubmit our study protocols to the FDA, comparable foreign regulatory authorities, and IRBs for reexamination, which may impact the costs, timing or successful completion of that study. If we experience delays in completion of, or if we, the FDA or other regulatory authorities, the IRB, or other reviewing entities, or any of our clinical study sites suspend or terminate any of our clinical studies of any of our product candidates, its commercial prospects may be materially harmed and our ability to generate product revenues will be delayed. Any delays in completing our clinical trials will increase our costs, slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, termination or suspension of, or a delay in the commencement or completion of, clinical studies may also ultimately lead to the denial of regulatory approval of our product candidates. In addition, if one or more clinical studies are delayed, our competitors may be able to bring products to market before we do, and the commercial viability of any of our product candidates could be significantly reduced.

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Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

Clinical testing of product candidates is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. The results of pre-clinical studies and early clinical trials may not be predictive of the results of later-stage clinical trials. We cannot assure you that the FDA or comparable foreign regulatory authorities will view the results as we do or that any future trials of any of our product candidates will achieve positive results. Product candidates in later stages of clinical trials may fail to show the desired safety and effectiveness traits despite having progressed through pre-clinical studies and initial clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of effectiveness or adverse safety profiles, notwithstanding promising results in earlier trials. Any future clinical trial results for our product candidates may not be successful.

In addition, a number of factors could contribute to a lack of favorable safety and effectiveness results for any of our product candidates. For example, such trials could result in increased variability due to varying site characteristics, such as local standards of care, differences in evaluation period and surgical technique, and due to varying patient characteristics including demographic factors and health status.

Third-party coverage and reimbursement and health care cost containment initiatives and treatment guidelines may constrain our future revenues.

Our ability to successfully market our product candidates will depend in part on the level of reimbursement that government health administration authorities, private health coverage insurers and other organizations provide for the cost of our products and related treatments. Countries in which any of our product candidates are sold through reimbursement schemes under national health insurance programs frequently require that manufacturers and sellers of pharmaceutical products obtain governmental approval of initial prices and any subsequent price increases. In certain countries, including the U.S., government-funded and private medical care plans can exert significant indirect pressure on prices. We may not be able to sell our product candidates profitably if adequate prices are not approved or coverage and reimbursement is unavailable or limited in scope. Increasingly, third-party payors attempt to contain health care costs in ways that are likely to impact our development of products including:

● failing to approve or challenging the prices charged for health care products;

● introducing reimportation schemes from lower priced jurisdictions;

● limiting both coverage and the amount of reimbursement for new therapeutic products;

● denying or limiting coverage for products that are approved by the regulatory agencies but are considered to be experimental or investigational by third-party payors; and

● refusing to provide coverage when an approved product is used in a way that has not received regulatory marketing approval.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face a potential risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any of our product candidates or any other future product. For example, we may be sued if any product we develop, including any of our product candidates, or any materials that we use in our products allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and breach of warranties. In the US, claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

● decreased demand for any of our product candidates or any future products that we may develop;

● injury to our reputation;

● withdrawal of clinical trial participants;

● costs to defend the related litigation;

● a diversion of management’s time and our resources;

● substantial monetary awards to trial participants or patients;

● product recalls, withdrawals or labeling, marketing or promotional restrictions;

● the inability to commercialize some or all of our product candidates; and

● a decline in the value of our stock.

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Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop. We maintain and may seek to increase product liability insurance covering our clinical trials. Although we will maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Risks Relating to Our Intellectual Property Rights

We will depend on rights to certain pharmaceutical compounds that have been assigned to us. We do not have complete control over these pharmaceutical compounds and any loss of our rights to them could prevent us from selling our products.

We are dependent on the assignment from third parties for certain rights, including intellectual property rights, of our pharmaceutical compounds and potential product candidates. See “Certain Relationships and Related Party Transactions – Harrow Health, Inc. – Asset Purchase Agreement with Harrow.” Our rights to use the pharmaceutical compounds we were assigned are subject to the negotiation of, continuation of and compliance with the terms of those assignments. Thus, the assigned patents and patent applications were not written by us or our attorneys, and we did not have control over the drafting and prosecution. The former patent owners might not have given the same attention to the drafting and prosecution of these patents and applications as we would have if we had been the owners of the patents and applications and had control over the drafting. Moreover, under our assignment, certain patent prosecution activities may remain under the control of the assignor. We cannot be certain that drafting of the patents and patent applications, or patent prosecution, by the assignor has been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.

Our rights to develop and commercialize the product candidates are subject to the validity of the intellectual property rights. Enforcement of our assigned patents or defense or any claims asserting the invalidity of these patents is often subject to the control or cooperation of the assignor. Legal action could be initiated against the original owners of the intellectual property that we acquired and an adverse outcome in such legal action could harm our business because it might prevent such companies or institutions from continuing to assign intellectual property that we may need to operate our business.

In addition, our rights to practice the inventions claimed in the patents and patent applications are subject to our assignors abiding by the terms of those assignments and not terminating them. Our assignment may be terminated by the assignor if we are in material breach of certain terms or conditions of the assignment agreement or in certain other circumstances. Our rights under the assignment are subject to our continued compliance with the terms of the assignment agreement, including the payment of royalties due under the assignment. Termination of these assignments could prevent us from marketing some or all of our products. Because of the complexity of our products and the patents, determining the scope of the assignment and related royalty obligations can be difficult and can lead to disputes between us and the assignor. An unfavorable resolution of such a dispute could lead to an increase in the royalties payable pursuant to the assignment. If the assignor believed we were not paying the royalties due under the assignment or were otherwise not in compliance with the terms of the assignment, the assignor might attempt to revoke the assignment. If such an attempt were successful, we might be barred from producing and selling some or all of our products.

In addition, we may need to utilize trade-secrets, know-how, patents and other intellectual property of third parties, such as those of our contract manufacturer. Our ability to develop and commercialize our product candidates may be impacted by the enforceability of their intellectual property and our ability to come to terms with those third parties to utilize their intellectual property. If we are not able to maintain rights to the intellectual property of those third parties our ability to develop and commercialize our products will be adversely impacted.

It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights.

Our commercial success will depend, in part, on obtaining and maintaining patent protection for our technologies, products and processes, successfully defending these patents against third-party challenges and successfully enforcing these patents against third-party competitors. The patent positions of pharmaceutical companies can be highly uncertain and involve complex legal, scientific and factual questions for which important legal principles remain unresolved. Changes in either the patent laws or in interpretations of patent laws may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be allowable or enforceable in our patents. Patent and patent applications relating to our product candidates and related technologies may be challenged, invalidated or circumvented by third parties and might not protect us against competitors with similar products or technologies.

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The degree of future protection for our proprietary rights is uncertain, because legal means afford only limited protection and may not adequately protect our rights, permit us to gain or keep our competitive advantage, or provide us with any competitive advantage at all. For example, others have filed, and in the future are likely to file, patent applications covering products and technologies that are similar, identical or competitive to any of our product candidates, or important to our business. We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed by us, or that we will not be involved in interference, opposition or invalidity proceedings before U.S. or foreign patent offices.

In the future, we may rely on know-how and trade secrets to protect technology, especially in cases when we believe patent protection is not appropriate or obtainable. However, know-how and trade secrets are difficult to protect. While we intend to require employees, academic collaborators, consultants and other contractors to enter into confidentiality agreements, we may not be able to adequately protect our trade secrets or other proprietary or licensed information. Typically, research collaborators and scientific advisors have rights to publish data and information in which we may have rights. If we cannot maintain the confidentiality of our proprietary technology and other confidential information, our ability to receive patent protection and our ability to protect valuable information owned by us may be imperiled. Enforcing a claim that a third-party entity illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts are sometimes less willing to protect trade secrets than patents. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

If we fail to obtain or maintain patent protection or trade secret protection for our product candidates or our technologies, third parties could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate revenues and attain profitability.

We may also rely on the trademarks we may develop to distinguish our products from the products of our competitors. We cannot guarantee that any trademark applications filed by us or our business partners will be approved. Third parties may also oppose such trademark applications, or otherwise challenge our use of the trademarks. In the event that the trademarks we use are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we will have adequate resources to enforce these trademarks.

Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts.

Our success depends in part on avoiding infringement of the proprietary technologies of others. The pharmaceutical industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Identification of third-party patent rights that may be relevant to our proprietary technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. Additionally, because patent applications are maintained in secrecy until the application is published, we may be unaware of third-party patents that may be infringed by commercialization of any of our product candidates or any future product candidate. There may be certain issued patents and patent applications claiming subject matter that we may be required to license to research, develop or commercialize any of our product candidates, and we do not know if such patents and patent applications would be available to license on commercially reasonable terms, or at all. Any claims of patent infringement asserted by third parties would be time-consuming and may:

● result in costly litigation;

● divert the time and attention of our technical personnel and management;

● prevent us from commercializing a product until the asserted patent expires or is held finally invalid or not infringed in a court of law;

● require us to cease or modify our use of the technology and/or develop non-infringing technology; or

● require us to enter into royalty or licensing agreements.

Third parties may hold proprietary rights that could prevent any of our product candidates from being marketed. Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to any of our product candidates or our processes could subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market any of our product candidates or any future product candidates. We cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all. In addition, we cannot be sure that we could redesign our product candidates or any future product candidates or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing any of our product candidates or a future product candidate, which could harm our business, financial condition and operating results.

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We expect that there are other companies, including major pharmaceutical companies, working in the areas competitive to our proposed product candidates which either has resulted, or may result, in the filing of patent applications that may be deemed related to our activities. If we were to challenge the validity of any issued U.S. patent in court, we would need to overcome a statutory presumption of validity that attaches to every issued U.S. patent. This means that, to prevail, we would have to present clear and convincing evidence as to the invalidity of the patent’s claims. If we were to challenge the validity of any issued U.S. patent in an administrative trial before the Patent Trial and Appeal Board in the United States Patent and Trademark Office, we would have to prove that the claims are unpatentable by a preponderance of the evidence. There is no assurance that a jury, court and/or administrative agency would find in our favor on questions of infringement, validity or enforceability.

We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.

As is commonplace in our industry, we will likely employ individuals who were previously employed at other pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject in the future to claims that our employees or prospective employees are subject to a continuing obligation to their former employers (such as non-competition or non-solicitation obligations) or claims that our employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Risks Related to Our Business Operations, Employee Matters and Managing Growth

The outbreak of COVID-19, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including the execution of our planned clinical trials.

While cases of COVID-19 and hospitalizations are currently significantly lower than earlier levels in the United States, there can be no assurances cases and hospitalizations will not increase in the future, especially in light of the emerging variants across the world. Governments in the United States and elsewhere have taken severe measures to slow the spread of COVID-19 that have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, facilities and production have been suspended, and demand for certain goods and services, such as medical services and supplies, has spiked. The COVID-19 pandemic and other factors have also contributed to high rates of inflation. The extent to which COVID-19 will continue to impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and government measures taken in response.

Site initiation, participant recruitment and enrollment, participant dosing, distribution of clinical trial materials, study monitoring and data analysis for our planned clinical trials may be delayed due to changes in healthcare facility policies, federal, state or local regulations, prioritization of healthcare resources toward pandemic efforts, or other reasons related to the COVID-19 pandemic. Additionally, some participants and clinical investigators may not be able to comply with clinical trial protocols. For example, quarantines or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be unable to conduct our planned clinical trials. If negative public health conditions resulting from the pandemic deteriorate or continue for an extended period of time, we risk a delay in activating sites and enrolling subjects as previously projected. Any such delays to our planned clinical trials for MELT-300 or any of our other product candidates and any future clinical trials could impact the use and sufficiency of our existing cash reserves, and we may be required to raise additional capital earlier than it had previously planned. We may be unable to raise additional capital if and when needed, which may result in further delays or suspension of our development plans.

Further, increased rates of infections and deaths related to COVID-19 could disrupt certain healthcare and healthcare regulatory systems globally. Such disruptions could divert healthcare resources away from, or materially delay review by, the FDA and comparable foreign regulatory agencies (if we determine to seek international approvals). It is unknown how long these disruptions could continue, were they to occur. Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially adversely affect the development and study of our product candidates.

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We currently utilize third parties to, among other things, manufacture raw materials and our product candidates, components, parts, and consumables, and to perform quality testing. If either we or any third-party in the supply chain for materials used in the production of our product candidates are adversely impacted by restrictions resulting from the COVID-19 pandemic, our supply chain may be disrupted, limiting our ability to manufacture product candidates for our clinical trials.

If shelter-in-place orders or other mandated travel restrictions reoccur, third parties conducting clinical or manufacturing activities may not be able to access laboratory or manufacturing space, and our core activities could be significantly limited or curtailed, possibly for an extended period of time.

While the potential economic impact brought by and the duration of the pandemic may be difficult to assess or predict, it has already caused, and may result in further, significant disruption of global financial markets. The trading prices of biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic, which may reduce our ability to access capital either at all or on favorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the global effort to control COVID-19 infections could materially and adversely affect our business.

The ultimate impact of the current pandemic, or any other health epidemic, is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our planned clinical trials, healthcare systems or the global economy as a whole. However, these effects could have a material adverse impact on our business, financial condition and results of operations.

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the principal members of our executive team listed under “Management” located elsewhere in this prospectus, the loss of whose services may adversely impact the achievement of our objectives. Our management team has expertise in many different aspects of drug development and commercialization. However, our ability to compete in the highly competitive pharmaceuticals industry depends in large part upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We will need to hire additional personnel as we further develop our product candidates. Competition for skilled personnel in our market is intense and competition for experienced scientists may limit our ability to hire and retain highly qualified personnel on acceptable terms. Despite our efforts to retain valuable employees, members of our management, scientific and medical teams may terminate their employment with us on short notice. We have entered into employment arrangements with certain of our executive officers. However, these employment arrangements will provide for “at-will” employment, which means that any of our employees could leave our employment at any time, with or without notice. Moreover, there can be no assurance that anyone we expect to employ in a key management position will be available to join our team when we expect them to, if at all. The loss of the services of any of our executive officers or other key employees, or our inability to hire targeted executives, could potentially harm our business, operating results or financial condition. In particular, we believe that the loss of the services of our directors could have a material adverse effect on our business. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior scientific and medical personnel.

Other pharmaceutical companies with which we compete for qualified personnel have greater financial and other resources, different risk profiles, and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates than what we have to offer. If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can develop and commercialize product candidates would be limited.

We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As of the date of this prospectus, we had 3 full-time employees, and relied on a number of consultants and contractors. As we mature, we expect to expand our employee base to increase our managerial, scientific, operational, sales, marketing, financial and other resources and to hire more consultants and contractors. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Future growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our existing or future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our product candidates and any other future product candidates and our ability to compete effectively will depend, in part, on our ability to effectively manage our future growth.

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Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures to: comply with FDA regulations or the regulations applicable in other jurisdictions, provide accurate information to the FDA and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the U.S. and abroad, report financial information or data accurately or disclose, or timely disclose, unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of information obtained in the course of clinical trials or interactions with the FDA or other regulatory authorities, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations, any of which could have a negative impact on our business, financial condition, results of operations and prospects.

We have had a number of related party transactions with our current and former affiliates, which may result in a conflict of interest involving certain of our current and former management and directors.

Historically, we have engaged in a number and variety of transactions with our current and former affiliates, including Harrow. While we believe that these transactions were made on terms that were not less favorable to us than those obtainable on an arm’s length basis, there was no independent determination of that fact. In the future, we may continue to enter into transactions with our current and former affiliates, and some of these transactions may be significant. Related party transactions present difficult conflicts of interest, could result in disadvantages to our Company and may impair investor confidence, which could materially and adversely affect us. Related party transactions could also cause us to become materially dependent on related parties in the ongoing conduct of our business, and related parties may be motivated by personal interests to pursue courses of action that are not necessarily in the best interests of our Company and our stockholders. See “Certain Relationships and Related Party Transactions.”

Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a significant disruption of our product development programs and our ability to operate our business effectively.

Our internal computer systems and those of our current and future collaborators, contractors or consultants may be vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Cyberattacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. Cyberattacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. Cyberattacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient.

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Despite our efforts to ensure the security, privacy, integrity, confidentiality, availability, and authenticity information technology networks and systems, processing and information, we may not be able to anticipate or to implement effective preventive and remedial measures against all data security and privacy threats. The recovery systems, security protocols, network protection mechanisms and other security measures that we have integrated into our systems, networks and physical facilities, which are designed to protect against, detect and minimize security breaches, may not be adequate to prevent or detect service interruption, system failure data loss or theft, or other material adverse consequences. No security solution, strategy, or measures can address all possible security threats or block all methods of penetrating a network or otherwise perpetrating a security incident. The risk of unauthorized circumvention of our security measures or those of our third-party providers, clients and partners has been heightened by advances in computer and software capabilities and the increasing sophistication of hackers who employ complex techniques, including without limitation, the theft or misuse of personal and financial information, counterfeiting, “phishing” or social engineering incidents, ransomware, extortion, publicly announcing security breaches, account takeover attacks, denial or degradation of service attacks, malware, fraudulent payment and identity theft. Because the techniques used by hackers change frequently, we may be unable to anticipate these techniques or implement adequate preventive measures. Our applications, systems, networks, software and physical facilities could have material vulnerabilities, be breached or personal or confidential information could be otherwise compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our personnel or our customers to disclose information or user names and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities. Third parties may also exploit vulnerabilities in, or obtain unauthorized access to, platforms, software, applications, systems, networks, sensitive information, and/or physical facilities utilized by our vendors. Improper access to our systems or databases could result in the theft, publication, deletion or modification of personal information, confidential or proprietary information, financial information and other information. An actual or perceived breach of our security systems or those of our third-party service providers may require notification under applicable data privacy regulations or contractual obligations, or for customer relations or publicity purposes, which could result in reputational harm, costly litigation (including class action litigation), material contract breaches, liability, settlement costs, loss of sales, regulatory scrutiny, actions or investigations, a loss of confidence in our business, systems and processing, a diversion of management’s time and attention, and significant fines, penalties, assessments, fees and expenses.

The costs to respond to a security breach and/or to mitigate any security vulnerabilities that may be identified could be significant, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, negative publicity, and other harm to our business and our competitive position. We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.

We may have contractual and other legal obligations to notify relevant stakeholders of security breaches. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. In addition, our agreements with certain customers and partners may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach, and may cause us to breach customer contracts. Our agreements with certain customers, our representations, or industry standards, may require us to use industry-standard or reasonable measures to safeguard sensitive personal information or confidential information. A security breach could lead to claims by our customers, or other relevant stakeholders that we have failed to comply with such legal or contractual obligations. As a result, we could be subject to legal action or our customers could end their relationships with us. There can be no assurance that any limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages.

While we have not to our knowledge experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials by us or our CROs could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Additionally, any such event that leads to unauthorized access, use or disclosure of personal information, including personal information regarding our patients or employees, could harm our reputation, cause us not to comply with federal and/or state breach notification laws and foreign law equivalents or otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information. Security breaches and other unauthorized access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. While we have implemented security measures designed to protect our information technology systems and infrastructure, such measures may not prevent service interruptions or security breaches that could adversely affect our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or unauthorized disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of MELT-300 or any product candidates could be delayed.

We may be unable in the future to detect, anticipate, measure or prevent threats or techniques used to detect or exploit vulnerabilities in our (or our third parties’) information technology, services, processing, communications or software, or cause security breaches, because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after an incident has occurred. In addition, security researchers and other individuals have in the past and will continue in the future to actively search for and exploit actual and potential vulnerabilities in our (or our third parties’) information technology, services, communications or software. We cannot be certain that we will be able to address any such vulnerabilities, in whole or part, and there may be delays in developing and deploying patches and other remedial measures to adequately address vulnerabilities, and taking such remedial steps could adversely impact or disrupt our operations.

We may not have adequate insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees and other impacts that arise out of incidents or breaches. If the impacts of a security incident or breach, or the successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), it could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage, cyber coverage and coverage for errors and coverage as to all or part of any future claim or loss. Our risks are likely to increase as we continue to expand, grow our customer base, and process, store, and transmit increasingly large amounts of proprietary and sensitive data.

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Business interruptions could delay us in the process of developing our product candidates and could disrupt our sales.

Our headquarters are located in Brentwood, Tennessee. We are vulnerable to natural disasters such as tornadoes and severe storms, as well as other events that could disrupt our operations. We do not carry insurance for natural disasters and we may not carry sufficient business interruption insurance to compensate us for losses that may occur. Any losses or damages we incur could have a material adverse effect on our business operations.

Risks Related to This Offering and Ownership of Our Common Stock

There has been no prior public market for our common stock, the stock price of our common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the initial public offering price.

As we are in our early stages, an investment in our Company will require a long-term commitment, with no certainty of return. There has been no public market for our common stock or any other security of our Company prior to this offering. The initial public offering price for our common stock was determined through negotiations between the underwriter and us and may vary from the market price of our common stock following this offering. If you purchase shares of our common stock in this offering, you may not be able to resell those shares at or above the initial public offering price. An active or liquid market in our common stock may not develop upon the completion of this offering or, if it does develop, it may not be sustainable. Further, an inactive market may also impair our ability to raise capital to continue to fund our operations by selling shares of our common stock and may impair our ability to enter into strategic partnerships or acquire products or intellectual property assets by using our shares of common stock as consideration.

Even if our securities become publicly-traded and even if an active market for our common stock develops, the market price for our common stock may be volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● actual or anticipated fluctuations in our quarterly or annual operating results;

● failures to meet external expectations or management guidance;

● changes in financial or operational estimates or projections;

● sales of our common stock by our stockholders, officers, and directors;

● volatility and limitations in trading volumes of our shares of common stock;

● conditions in equity markets generally;

● changes in the economic performance or market valuations of companies similar to ours; and

● general economic, political, and market conditions and overall fluctuations in the financial markets, such as rising inflation and supply chain disruptions, in the U.S. and abroad, including those related to the COVID-19 pandemic.

In particular, the market prices of clinical stage pharmaceutical companies like ours have been highly volatile due to factors, including, but not limited to:

● any delay or failure to conduct a clinical trial for our product candidates or to receive approval from the FDA and other regulatory authorities;

● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule;

● results from our ongoing clinical trials and future clinical trials with our current and future product candidates or of our competitors;

● failure to commercialize our product candidates;

● unanticipated safety concerns related to the use of our product candidates;

● the recruitment or departure of key personnel;

● our ability to obtain financing to conduct and complete research and development activities including, but not limited to, our current and proposed clinical trials, and other business activities;

● developments or disputes concerning intellectual property rights related to our product candidates;

● the success of competitive drugs or therapies;

● the lack of market acceptance and sales growth for our product candidates, if any, that receive sales and marketing approval;

● market conditions in the pharmaceutical and biotechnology sectors;

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● our inability to enter into new markets or obtain or develop new product candidates;

● changes in the structure of healthcare payment systems, including coverage and adequate reimbursement for any approved drug;

● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents; and

● failure to complete significant transactions or collaborate with vendors in manufacturing our product.

The securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. For example, in March 2020, the exchanges in the U.S. and China experienced a sharp decline as the COVID-19 pandemic negatively affected stock market and investor sentiment and resulted in significant volatility, including temporary trading halts, and in March 2022, the outbreak of war between Ukraine and Russia and related sanctions against Russia also caused global markets to initially decline. In addition, during 2022, macroeconomic events, including uncertain market conditions, rising inflation, supply chain disruptions, and labor shortages, have affected the U.S. and global economies. These market fluctuations may also materially and adversely affect the market price of shares of our common stock.

Our management will have broad discretion as to the use of the proceeds from this offering and may not use the proceeds effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the currently intended purposes described in the section entitled “Use of Proceeds.” Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply our cash from this offering in ways that ultimately increase the value of any investment in our securities or enhance stockholder value. If we fail to apply the net proceeds effectively, we may not be successful in bringing our proposed products to market. You will not have the opportunity to evaluate all of the economic, financial or other information upon which we may base our decisions to use the net proceeds from this offering.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

After the closing of this offering, as a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules and regulations of The Nasdaq Stock Market (“Nasdaq”). The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an emerging growth company. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we report on the effectiveness of our disclosure controls and procedures in our quarterly and annual reports and, beginning with our annual report for the year ending 2023, that we perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 10-K filing for that year. As a publicly-traded company, we will be required to develop and implement substantial control systems, policies and procedures to satisfy these and other requirements applicable to public companies. We cannot assure you that management’s past experience will be sufficient to successfully develop and implement these systems, policies and procedures and to operate our Company and execute our business strategy. Failure to do so, either as a result of our inability to effectively manage our business in a public company environment or for any other reason, could jeopardize our status as a public company, and the loss of such status may materially and adversely affect us and our stockholders. In addition, failure to comply with any laws or regulations applicable to us as a public company may result in legal proceedings and/or regulatory investigations, and may cause reputational damage.

In connection with becoming a public company, we expect to incur significant additional annual expenses related to, among other things, director fees, reporting requirements, transfer agent fees, additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. We also expect that the new rules and regulations to which we will be subject as a result of being a public company will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage for such directors and officers. Any of these factors could make it more difficult for us to attract and retain qualified members of our board of directors.

Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval.

Following this offering, our directors, officers and principal stockholders, and their respective affiliates, will beneficially own approximately                % of our outstanding shares of common stock. In particular, Harrow, our largest stockholder of record, will beneficially own approximately               % of our issued and outstanding shares of common stock immediately after this offering, including in connection with the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement, which we intend to consummate upon the closing of this offering. As a result, these stockholders, acting together, would have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, acting together, have the ability to control the management and affairs of our Company. Accordingly, this concentration of voting power and transfer restrictions could delay or prevent an acquisition of our Company on terms that other stockholders may desire or result in the management of our Company in ways with which other stockholders disagree.

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A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our common stock to decline.

Sales of a substantial number of shares of our common stock into the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have               shares of common stock outstanding. This includes the shares that we are selling in this offering, which may be resold in the public market immediately. Following the consummation of this offering, approximately               % of our outstanding shares will be subject to a 180-day lock-up period provided under lock-up agreements executed in connection with this offering described in “Underwriting” and restricted from immediate resale under the federal securities laws as described in “Shares Eligible for Future Sale.” All of these shares will, however, be able to be resold after the expiration of the lock-up period subject to any applicable securities laws restrictions, as well as pursuant to customary exceptions thereto or upon the waiver of the lock-up agreement by on behalf of the underwriter.

Moreover, following the completion of this offering, certain of our stockholders will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the section titled “Underwriting.” We also intend to register all of the shares of our common stock that we may issue under our equity compensation plans.

If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Pursuant to Section 404 of the Sarbanes-Oxley Act, we will be required to file a report by our management on our internal control over financial reporting starting with our second Annual Report on Form 10-K. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial reporting could result in financial statement errors that, in turn, could lead to errors in our financial reports and/or delays in our financial reporting, which could require us to restate our operating results. To prepare for eventual compliance with Section 404, we will be engaged in a process to document and evaluate our internal controls over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal controls over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal controls over financial reporting.

Despite our efforts, we might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. To maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we will need to expend significant resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control.

Moreover, we do not expect that disclosure controls or internal control over financial reporting, even if established, will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could materially adversely impact us.

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Delaware law and provisions in our amended and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.

Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our Company or changes in our management that the stockholders of our Company may deem advantageous. These provisions include the following:

● permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships;

● authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

● prohibit stockholders from calling special meetings of stockholders;  

● prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

● provide that the board of directors is expressly authorized to adopt, amend, alter or repeal our bylaws;

● restrict the forum for certain litigation against us to Delaware and federal courts, as applicable; and

● establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of our amended and restated certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation designates a state or federal court located within the state of Delaware as the exclusive forum for various forms of disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation, as will be in effect upon the completion of this offering, will provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law (unless we consent in writing to the selection of an alternative forum): (i) any derivative action or proceeding brought on our behalf under Delaware law, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers employees or stockholders to us or our stockholders, (iii) any action arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), our amended and restated certificate of incorporation or bylaws, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, (iv) any action that is governed by the internal affairs doctrine of the State of Delaware, or (v) any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL, in all cases subject to the court having jurisdiction over indispensable parties named as defendants. These exclusive forum provisions do not apply to claims under the Securities Act or the Exchange Act.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. However, our amended and restated certificate of incorporation contains a federal forum provision which provides that unless the Company consents in writing to the selection of an alternative forum, the U.S. federal district courts, to the fullest extent permitted by law, will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.

Future sales and issuances of shares of our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.

Additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing shares of our common stock or other equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner, we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

Pursuant to our 2022 Incentive Plan, which will be effective upon the closing of this offering, our management will be authorized to grant stock options and other equity-based awards to our employees, directors and consultants, which equity-based awards would also cause dilution to our stockholders. Initially, the aggregate number of shares of common stock that may be issued in connection with awards under the 2022 Incentive Plan will be equal to               percent (              %) of the issued and outstanding shares of our common stock immediately following this offering. The number of shares of our common stock reserved for issuance under our 2022 Incentive Plan will automatically increase on the first day of each calendar year, starting on January 1, 2023 in an amount equal to the lesser of (i) 4% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of each automatic increase; or (ii) a lesser number of shares determined by our board of directors. If our board of directors elects to increase the number of shares available for future grant by the maximum amount each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

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We do not currently intend to pay dividends to our stockholders in the foreseeable future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the value of our Company.

We have never and do not anticipate paying any cash dividends to our stockholders in the foreseeable future. Consequently, investors must rely on sales of their common stock or underlying common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. There is no guarantee that the valuation of our Company will appreciate in value or even maintain the valuation at which our stockholders have purchased their shares.

If you purchase shares of our common stock in this offering, you will suffer immediate dilution of your investment.

The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. Based on the initial public offering price of $                   per share, you will experience immediate dilution of $                   per share, representing the difference between our pro forma as adjusted net tangible book value per share after this offering and the initial public offering price per share. After this offering, we will also have outstanding options to purchase shares of our common stock with exercise prices lower than the initial public offering price. To the extent these outstanding options are exercised, there will be further dilution to investors in this offering. See “Dilution” for additional information.

General Risk Factors

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset a portion of future taxable income, if any, until such unused losses expire, if ever. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards (“NOLs”) and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We have not performed an analysis to assess whether an ownership change has occurred. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise become unavailable to offset future income tax liabilities. Under the Tax Cuts and Jobs Act (the “TCJA”), as modified by the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), NOLs generated in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such NOLs generally will be limited in taxable years beginning after December 31, 2020 to 80% of current year taxable income. The TCJA, as modified by the CARES Act, generally eliminates the ability to carry back any NOLs to prior taxable years for tax years beginning after December 31, 2020. Additionally, state NOLs generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes.

If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

From time to time, we may evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary drugs, intellectual property rights, technologies or businesses, as deemed appropriate to carry out our business plan. Any potential acquisition or strategic partnership may entail numerous risks, including:

● increased operating expenses and cash requirements;

● the assumption of additional indebtedness or contingent liabilities;

● assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel;

● the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition;

● retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or product candidates and regulatory approvals; and

● our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

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In addition, if we engage in future acquisitions or strategic partnerships, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense or impairment charges. Moreover, we may not be able to locate suitable acquisition opportunities, and this inability could impair our ability to grow or obtain access to technology or drugs that may be important to the development of our business.

If research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our share price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. We do not currently have, and may never obtain, research coverage by industry or financial analysts. Equity research analysts may elect not to provide research coverage of our common stock after the completion of this offering, and such lack of research coverage may adversely affect the market price of our common stock. In the event we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our shares could decline if one or more equity research analysts downgrade our shares or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our shares could decrease, which in turn could cause the trading price or trading volume of our common stock to decline.

We are eligible to be treated as an EGC, as defined in the JOBS Act and a “smaller reporting company,” as defined in the Exchange Act, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.

We are eligible to be treated as an EGC as defined in the JOBS Act, and we may take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

● being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

● reduced disclosure obligations regarding executive compensation; and

● not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.

In addition, as an EGC, the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, unless we later irrevocably elect not to avail ourselves of this exemption. We have elected to use this extended transition period under the JOBS Act. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (1) following the fifth anniversary of the completion of this offering, (2) in which we have total annual gross revenue of $1.07 billion or more or (3) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates is $700 million or more as of the end of that year’s second fiscal quarter and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period.

We are also a “smaller reporting company” as defined in the Exchange Act. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) we have annual revenues of $100 million or more during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter.

Investors may find our common stock less attractive to the extent we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Nasdaq could delist our securities from trading on its exchange as the result of any future failure to meet the minimum continued listing standards of Nasdaq, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We intend to apply to have our common stock listed on the Nasdaq Capital Market. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our common stock will satisfy the minimum continued listing standards of Nasdaq in the future.

If Nasdaq delists our securities from trading on its exchange as the result of any future failure to meet Nasdaq’s minimum continued listing standards or otherwise, and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences to our business, financial condition, results of operations and prospects, including:

● a limited availability of market quotations for our securities;

● reduced liquidity for our securities;

● a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

● a limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, and particularly after we are no longer an EGC and/or a smaller reporting company, as and when applicable, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we will be required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However, while we remain an EGC and/or a smaller reporting company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

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USE OF PROCEEDS

We estimate that the net proceeds to use from this offering will be approximately $               million, based on an assumed initial public offering price of $               per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriter fully exercises its option to purchase additional common stock in this offering, we estimate that our net proceeds will be approximately $             million, based on an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $             per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds from this offering by $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each 1 million share increase (decrease) in the number of shares offered by us would increase (decrease) the net proceeds from this offering by $               million, assuming no change in the assumed initial public offering price per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the initial public offering price or the number of shares by these amounts would have a material effect on our uses of the proceeds from this offering, although it may accelerate the time when we need to seek additional capital.

We intend to use the net proceeds of this offering as follows:

● approximately $           million to fund the continued development of MELT-300, our lead product candidate, through the completion of our ongoing Phase 2 clinical study and commencement of our planned Phase 3 clinical study and pivotal PK study, including the manufacturing of clinical supply;

● approximately $           million to fund the ongoing development of MELT-210, including the manufacturing of clinical supply, and MELT-400; and

● the remainder for increased research and development and general and administrative personnel costs as we expand our organization, cross-program research and development activities, and other general corporate purposes and working capital.

We may also use a portion of the net proceeds from this offering to in-license, acquire, or invest in complementary businesses, technologies, products or assets. However, we have no current plans, commitments or obligations to do so.

Based on our current plans, we believe that the net proceeds from this offering, together with our existing cash and cash equivalents and taking into account the Harrow Loan Agreement Amendments, will be sufficient to fund our operations through 2023. The net proceeds of this offering, together with our existing cash and cash equivalents, will not be sufficient to complete development of MELT-300, MELT-210 and MELT-400 or any other product candidate, and we will need to raise substantial additional capital to complete the development and commercialization of any product candidate. None of the net proceeds from this offering will be used to repay the Harrow Loan Agreement, as the Harrow Loan Agreement Amendments extend the maturity date of this loan to September 2026 upon the consummation of this offering; provided, however, that, for the avoidance of doubt, we expect to settle $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement into shares of our common stock upon the closing of this offering.

Pending our use of the net proceeds from this offering, we intend to invest our net proceeds from this offering primarily in investment-grade, interest-bearing instruments.

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions. We cannot predict with certainty all of the particular uses for the net proceeds from this offering or the amounts that we will actually spend on the uses set forth above. The amount and timing of our actual expenditures will depend on numerous factors, including the results of our research and development efforts, the timing and outcome of any ongoing or future clinical studies, and the timing and outcome of regulatory submissions. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business.

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DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.

Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant. In addition, our ability to pay dividends may be restricted by any agreements we may enter into in the future.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2022:

● on an actual basis;

● on a pro forma basis after giving effect to (i) the conversion of 2,287,000 shares of our Series A Preferred Stock outstanding as of June 30, 2022 into 2,287,000 shares of our common stock upon completion of this offering; (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $             into         shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus; (iii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for         shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount; and (iv) the filing and effectiveness of our amended and restated certificate of incorporation upon the closing of this offering; and

● on a pro forma as adjusted basis after giving effect to the pro forma adjustments and giving further effect to the sale of              shares of common stock in this offering at an assumed initial public offering price of $             per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Our capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of the offering determined at pricing. You should read the following table in conjunction with the “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

	As of June 30, 2022
	Actual			Pro forma (unaudited)	Pro Forma As Adjusted (unaudited) (1)
Cash and cash equivalents	$	6,179,990		$
Debt		14,974,956
Preferred stock, par value $0.001 per share,
5,150,000 shares authorized, 2,287,000 shares issued and outstanding (actual);             shares authorized, 0 shares issued and outstanding (pro forma);             shares authorized, 0 shares issued and outstanding (pro forma as adjusted)		10,338,952
Stockholders’ equity (deficit):
Common stock, par value $0.001 per share,
12,500,000 shares authorized, 5,395,311 shares issued and outstanding (actual);           shares authorized,         shares issued and outstanding (pro forma);        , shares authorized,          shares issued and outstanding (pro forma as adjusted)		5,396
Additional paid-in capital		1,707,071
Accumulated deficit		(22,743,112	)
Total stockholders’ equity (deficit)		(21,030,645	)
Total capitalization	$	4,283,263		$

(1) Each $1.00 increase or decrease in the assumed initial public offering price of $               per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, common stock, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization by $            million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares offered by us would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, common stock, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization by $ million, assuming no change in the assumed initial public offering price per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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The number of shares of common stock outstanding in the table above excludes:

●             shares of common stock issuable pursuant to equity awards granted, effective as of the closing of this offering, to our non-employee directors and director nominees;

● the issuance of          shares of common stock that would be issuable upon the exercise of certain outstanding warrants, which warrants are subject to adjustment based on the transactions contemplated by this offering;

● (i) 677,094 shares issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.96 per share as of June 30, 2022, (ii) 70,640 shares issuable upon the vesting and delivery of restricted stock units as of June 30, 2022 and (iii) 309,033 shares of common stock underlying vested restricted stock units as of June 30, 2022, which underlying shares will be issued and delivered upon the resignation of the director holding the restricted stock units;

● 820,422 shares of common stock reserved for issuance under our 2018 Plan as of June 30, 2022. Upon completion of this offering, we will grant no further awards under the 2018 Plan; and

●             shares of our common stock that will be made available for future issuance under our 2022 Plan upon completion of this offering, based on the initial public offering price, plus any future increases in the number of shares of common stock reserved for issuance under the 2022 Plan pursuant to provisions thereof that automatically increase the share reserve under the plan each year. Upon the closing of this offering, the number of shares of common stock reserved for issuance pursuant to future awards under the 2022 Plan will equal               % of the aggregate of the number of shares of our common stock outstanding upon the closing of this offering.

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DILUTION

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

As of June 30, 2022, we had a historical net tangible book value (deficit) of $(21.0) million, or $(3.90) per share of common stock. Our historical net tangible book value (deficit) per share represents total tangible assets less total liabilities and redeemable convertible preferred stock, divided by the number of shares of our common stock outstanding as of June 30, 2022.

Our pro forma net tangible book value (deficit) of our common stock as of June 30, 2022 was $          million, or $           per share of common stock. Pro forma net tangible book value (deficit) represents the amount of our total tangible assets less our total liabilities, after giving effect to: (i) the conversion of 2,287,000 shares of our Series A preferred stock outstanding as of June 30, 2022 into 2,287,000 shares of our common stock upon completion of this offering; (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $            into             shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus; and (iii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for            shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $                per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares outstanding as of June 30, 2022, after giving effect to those pro forma adjustments.

After giving further effect to the sale of                shares of common stock in this offering at an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2022 would have been $           million, or $           per share. This amount represents an immediate increase in pro forma net tangible book value of $           per share to our existing stockholders and immediate dilution of $             per share to new investors in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of common stock in this offering.

The following table illustrates this dilution:

Assumed initial public offering price per share				$
Historical net tangible book value (deficit) per share as of June 30, 2022	$	(3.90	)
Pro forma increase in net tangible book value (deficit) per share attributable to the pro forma transactions described above	$
Pro forma net tangible book value (deficit) per share as of June 30, 2022	$
Increase in pro forma as adjusted net tangible book value per share attributable to new investors participating in this offering	$
Pro forma as adjusted net tangible book value per share after this offering				$
Dilution per share to new investors participating in this offering				$

The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted net tangible book value per share after this offering by $          , and dilution in pro forma net tangible book value per share to new investors by $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase of 1 million shares in the number of shares we are offering would increase the pro forma as adjusted net tangible book value per share after this offering by $           and decrease the dilution per share to new investors participating in this offering by $           , assuming no change in the assumed initial public offering price per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A decrease of 1 million shares in the number of shares we are offering would decrease the pro forma as adjusted net tangible book value per share after this offering by $          and increase the dilution per share to new investors participating in this offering by $              , assuming no change in the assumed initial public offering price per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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If the underwriters exercise their option to purchase additional shares of our common stock in full, the pro forma as adjusted net tangible book value after this offering would be $            per share, the increase in pro forma net tangible book value would be $             per share and the dilution to new investors would be $                per share, in each case assuming an initial public offering price of $               per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

The following table summarizes, as of June 30, 2022, on the pro forma as adjusted basis described above, the differences between the number of shares purchased from us, the total consideration paid to us in cash and the average price per share that existing stockholders and new investors paid for such shares. This calculation is based on an assumed initial public offering price of $             per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Total Shares				Total Consideration				Weighted- Average
	Number	Percent			Amount	Percent			Price Per Share
Existing stockholders before this offering				%	$			%	$
New investors participating in this offering
Total			100	%	$		100	%

The table above assumes no exercise of the underwriter’s option to purchase additional shares in this offering, and is based on the assumed initial public offering price of $              per share, which is the midpoint of the price range set forth on the cover page of this prospectus. If the underwriter’s option to purchase additional shares is exercised in full, the number of shares of our common stock held by existing stockholders would be reduced to               % of the total number of shares of our common stock outstanding after this offering, and the number of shares of common stock held by new investors participating in the offering would be increased to            % of the total number of shares of our common stock outstanding after this offering.

The foregoing tables and calculations (other than the historical net tangible book value (deficit) calculation) are based on shares of common stock outstanding as of June 30, 2022, after giving effect to: (i) the conversion of 2,287,000 shares of our Series A Preferred Stock outstanding as of June 30, 2022 into 2,287,000 shares of our common stock upon completion of this offering; (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $          into             shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus; and (iii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for            shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $           per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount; and excludes:

●            shares of common stock issuable pursuant to equity awards granted, effective as of the closing of this offering, to our non-employee directors and director nominees;

● excludes the issuance of shares of common stock that would be issuable upon the exercise of certain outstanding warrants, which warrants are subject to adjustment based on the transactions contemplated by this offering;

● (i) 677,094 shares issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.96 per share as of June 30, 2022, (ii) 70,640 shares issuable upon the vesting and delivery of restricted stock units as of June 30, 2022 and (iii) 309,033 shares of common stock underlying vested restricted stock units as of June 30, 2022, which underlying shares will be issued and delivered upon the resignation of the director holding the restricted stock units;

● 820,422 shares of common stock reserved for issuance under our 2018 Plan as of June 30, 2022. Upon completion of this offering, we will grant no further awards under the 2018 Plan; and

●              shares of our common stock that will be made available for future issuance under our 2022 Plan upon completion of this offering, based on the initial public offering price, plus any future increases in the number of shares of common stock reserved for issuance under the 2022 Plan pursuant to provisions thereof that automatically increase the share reserve under the plan each year. Upon the closing of this offering, the number of shares of common stock reserved for issuance pursuant to future awards under the 2022 Plan will equal                 % of the aggregate of the number of shares of our common stock outstanding upon the closing of this offering.

To the extent that the underwriter’s warrant is exercised, outstanding options are exercised, new options or other awards are issued under our equity compensation plans or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing at the end of this prospectus. Some of the information contained in this discussion and analysis or set forth at the end of this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward- looking statements. Please also see “Forward-Looking Statements.”

Overview

We are a clinical stage pharmaceutical company focused on the development and commercialization of proprietary non-opioid, non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings. Melt is seeking regulatory approval through the FDA’s 505(b)(2) regulatory pathway for these proprietary, patented small-molecule product candidates, where possible. The core IP we own is a patented series of combination non-opioid sedation drug formulations that we believe have multiple applications, including our patented, lead product candidate, MELT-300. MELT-300 is a fixed dose combination of midazolam and ketamine in a fast-dissolving tablet that is being developed to provide procedural sedation and intraoperative analgesia during cataract surgeries.

We were incorporated in Nevada in April 2018 and reincorporated in Delaware in January 2019. To date, we have devoted substantially all of our resources to our development efforts relating to our product candidates, including MELT-300, which have primarily consisted of conducting clinical trials with our product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. Since our inception, we have funded our operations primarily through the Harrow Loan Agreement (as described below), and the sale of our Series A Preferred Stock. To date, we have raised approximately $23.1 million in net proceeds from these transactions.

Plan of Operations

Our vision is to ultimately Make Needles Pointless^TM. Our strategy to realize our vision is to develop and commercialize sublingual conscious and procedural sedation drugs that eliminate the need for IV administrated medications and opioids. We intend to do this by executing a clinical development program for MELT-300, our lead product candidate to be used for procedural sedation during cataract surgery and internally developing and commercializing additional product candidates for procedural sedation in established markets with limited, FDA-approved drug options. If approved, we may independently commercialize and/or cooperate with third parties to both develop and commercialize therapeutic candidates where it makes sense to share costs and leverage the expertise of others. We intend to submit applications for our product candidates via the 505(b)(2) regulatory pathway. As an alternate and typically expedited regulatory pathway for FDA approval of new indications or new formulations of previously-approved products, a company may submit a Section 505(b)(2) NDA instead of a “stand-alone” or “full” NDA.

Macroeconomic Trends and the Impact of COVID-19 on Our Business

We continue to actively monitor the impact of various macroeconomic trends, such as high rates of inflation, supply chain disruptions and geopolitical instability, and the COVID-19 pandemic on our business. To date, we have not experienced a material financial statement impact or business disruptions, including with our vendors or third parties, as a result of these negative macroeconomic trends or the COVID-19 pandemic. However, at this time, we cannot predict the specific extent, duration or full impact that inflationary conditions, supply chain disruptions, geopolitical instability and the COVID-19 pandemic will have on our financial statements and operations, including our ongoing and planned preclinical activities and future clinical trials. Economic conditions, such as rising inflation, higher interest rates, changes in regulatory laws and monetary exchange rates, and government fiscal policies, can also have a significant effect on operations. Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all. In addition, the geopolitical instability and related sanctions could continue to have significant ramifications on global financial markets, including volatility in the U.S. and global financial markets. The extent of the impact of the COVID-19 pandemic on our business, operations and clinical development timelines and plans remains uncertain and will depend on certain developments, including the duration and spread of the pandemic and its future impact on our CROs, elective procedures, third-party manufacturers, and other third parties with which we do business, as well as its impact on regulatory authorities and our key scientific and management personnel. We continue to actively monitor the evolving situation related to the COVID-19 pandemic and may take further actions that alter our operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees and other third parties with which we do business. If we or any of the third parties with whom we engage were to experience shutdowns or other prolonged business disruptions due to the COVID-19 pandemic, our ability to conduct our business in the manner and on the timelines presently planned could have a material adverse impact on our business, results of operation and financial condition.

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Financial Overview

We have incurred net losses in each year since our inception. Our net losses were approximately $6.5 million and $2.9 million for the six months ended June 30, 2022 and 2021, respectively. Our net losses were approximately $6.7 million and $4.5 million for the years ended December 31, 2021 and 2020, respectively. As of June 30, 2022, we had an accumulated deficit of approximately $22.7 million. Substantially all of our net losses resulted from costs incurred in connection with our development programs and from general and administrative expenses associated with our operations.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we:

● continue the development of our lead product candidate, MELT-300, as well as other product candidates, including the planned and future clinical trials;

● seek to obtain regulatory approvals for MELT-300, as well as other product candidates;

● prepare for the potential launch and commercialization of MELT-300, as well as other product candidates, if approved;

● establish a sales and marketing infrastructure for the commercialization of MELT-300, as well as other product candidates, if approved;

● maintain, expand and protect our intellectual property portfolio; and

● add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and operations as a public company.

We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for MELT-300 or our other product candidates, which we expect will take a number of years and is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital, in addition to the net proceeds of this offering and taking into account the Harrow Loan Agreement Amendments, prior to completing clinical development of MELT-300 or any of our other product candidates. Until such time that we can generate substantial revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party funding and collaborations, and licensing arrangements. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development programs or commercialization efforts or grant to others rights to develop or market product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to cease operations, in part or in full.

Components of Results of Operations

Revenue

To date, we have not recognized any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for MELT-300 or our other product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all.

General and Administrative Expenses

General and administrative expenses consist primarily of (i) compensation and employee-related costs for our administrative personnel, including salaries, benefits, stock-based compensation, and other related costs, (ii) costs for third-party professional services, including legal, accounting, and other consulting services, (iii) costs for board of director services, including stock-based compensation, and (iv) other general and administrative expenses.

We expect our general and administrative expenses to increase in the future as we expand our organization to support our continued research and development activities of our product candidates, maintain and protect our intellectual property, support potential commercialization efforts, and operate as a public company. These increases will likely include additional costs related to (i) the hiring of new administrative personnel, including legal, finance, operational and commercial functions; (ii) fees incurred from third-party service providers for legal, accounting, compliance, investor and public relations, and other administrative services, (iii) increased director and officer liability insurance; and (iv) other general corporate expenses.

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Management Services Agreement with Harrow

Effective as of February 1, 2019, we entered into a Management Services Agreement with Harrow, pursuant to which Harrow provides us with certain professional services. The Management Services Agreement is in effect until terminated pursuant to its terms and either party may terminate the agreement for any reason upon 10 days’ notice. In exchange for services provided to us under the Management Services Agreement, we pay Harrow a monthly fee of approximately $10,000. As of June 30, 2022 and December 31, 2021, the Company owed approximately $108,000 and $40,000, respectively, to Harrow primarily for reimbursable expenses and amounts due under the Management Services Agreement with Harrow. During the year ended December 31, 2021, approximately $0.9 million of accrued expenses payable to Harrow pursuant to the Management Services Agreement were converted into the note payable due to Harrow under the Harrow Loan Agreement. See “Certain Relationships and Related Party Transactions” for more information.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our research and discovery efforts and the development of MELT-300 and our other product candidates. We expense research and development costs as incurred, which primarily include:

● external research and development expenses incurred under arrangements with third parties, such as CROs, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;

● costs related to acquiring, developing, and manufacturing clinical study material for our preclinical studies and clinical trials, including fees paid to contract manufacturing organizations (“CMOs”);

● laboratory supplies and research materials;

● upfront, milestone and maintenance fees incurred under license, acquisition and other third-party agreements; and

● costs related to compliance with clinical regulatory requirements.

Historically, we have not tracked research and development costs by product candidates as most of our research and development costs to date have been incurred for the development of MELT-300. These costs have primarily included costs incurred for consultants, CROs, and CMOs for preclinical studies and clinical trials, including clinical study materials used in these activities. Our other product candidates, MELT-210 and MELT-400, are part of the ongoing MELT-300 Phase 2 clinical trial and certain costs associated with these product candidates are attributable to the development of MELT-300. However, we will incur incremental research and development costs as we develop MELT-210 and MELT-400 as standalone product candidates.

Research and development activities will continue to be central to our business model. We expect our research and development expenses to increase for the foreseeable future as we advance our current product candidates through clinical trials. We also expect to incur additional costs primarily related to hiring research and development employees to support research and development activities associated with our current product candidates and potential future programs and engaging third-party consultants to supplement our research and development activities. Research and development expenses may also increase as a result new product candidates that we may acquire or develop internally.

The successful development of MELT-300 or our other product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of MELT-300 or our other product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of MELT-300 or our other product candidates, if they are approved.

The duration, costs and timing of the clinical development of MELT-300 and our other product candidates will depend on a variety of factors that include, but are not limited to, the following:

● the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

● the number and scope of clinical programs we decide to pursue;

● the uncertainties in clinical trial design and patient enrollment rates;

● establishing an appropriate safety and efficacy profile;

● successful enrollment in and completion of clinical trials;

● whether MELT-300 or our other product candidates show safety and efficacy in our clinical trials;

● the timing, receipt and terms of marketing approvals from applicable regulatory authorities;

● making arrangements with third-party CMOs for manufacturing;

● obtaining and maintaining patent and trade secret protection and regulatory exclusivity for MELT-300 and any other product candidate;

● commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

● continued acceptable safety profile of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of MELT-300 or our other product candidates would significantly change the costs and timing associated with the development of those product candidates. We may never succeed in achieving regulatory approval for any product candidate. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on other product candidates. For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.

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Other (Expense) Income, Net

Other (expense) income, net, primarily relates to interest expense and interest income. Interest expense is primarily related to interest incurred on the Harrow Loan Agreement. Interest income consists of interest income received on our cash and cash equivalents.

Results of Operations

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations for the six months ended June 30, 2022 and 2021, together with the changes in those items in dollars and as a percentage:

	Six Months Ended June 30,						Change
	2022			2021			Amount			Percent
	(unaudited)
Operating expenses
General and administration	$	1,182,209		$	1,462,768		$	(280,559	)		(19.2	)%
Research and development		4,349,995			1,469,225			2,880,770			196.1	%
Total operating expenses		5,532,204			2,931,993			2,600,211			88.7	%
Loss from operations		(5,532,204	)		(2,931,993	)		(2,600,211	)		88.7	%
Total other (expense) income, net		(986,131	)		1,091			(987,222	)		>(200	)%
Loss before income taxes		(6,518,335)			(2,930,902)			(3,587,433)			122.4	%
Provision for income taxes		-			(6,000)			6,000			(100.0)	%
Net loss	$	(6,518,335	)	$	(2,936,902	)	$	(3,581,433	)		121.9	%

General and Administrative Expenses

General and administrative expenses decreased $0.3 million, or 19%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Salaries, benefits, and other compensation costs decreased $0.1 million in the first half of 2022 primarily as a result of severance expense recorded in 2021 related to a terminated employee. Stock-based compensation expense for awards granted to our board of directors decreased $0.2 million as awards granted prior to 2022 became fully vested on June 30, 2021 and new grants for the board members were made during the second quarter of 2022 which vest over one year following the grant date.

Research and Development Expenses

Research and development expenses increased $2.9 million, or 196%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Research and development expenses were primarily comprised of costs incurred for consultants, CROs, and CMOs for preclinical studies and clinical trials, including clinical study materials used in these activities, related to MELT-300. The increase in the first half of 2022 was attributable to our on-going Phase 2 clinical study for MELT-300, which began in the second half of 2021. Additionally, research and development expenses increased in the six months ended June 30, 2022 compared to the six months ended June 30, 2021 as a result of costs incurred to CROs related to our phase 1 clinical study for MELT-210 that began in the first quarter of 2022.

Other (Expense) Income, net

Other expense, net was $986,131 for the six months ended June 30, 2022 compared to other income, net of $1,091 for the six months ended June 30, 2021. The increase in other (expense) income, net during the six months ended June 30, 2022 was primarily due to interest expense associated with the Harrow Loan Agreement, which was entered into in September 2021. See “Liquidity and Capital Resources” below for a discussion of the Harrow Loan Agreement.

Comparison of Years Ended December 31, 2021 and 2020

The following table summarizes our results of operations for the years ended December 31, 2021 and 2020, together with the changes in those items in dollars and as a percentage:

	Year Ended December 31,						Change
	2021			2020			Amount			Percent
Operating expenses
General and administration	$	2,541,579		$	1,990,099		$	551,480			27.7	%
Research and development		3,525,549			2,541,180			984,369			38.7	%
Total operating expenses		6,067,128			4,531,279			1,535,849			33.9	%
Loss from operations		(6,067,128	)		(4,531,279	)		(1,535,849	)		33.9	%
Interest (expense) income, net		(581,793	)		7,681			(589,474	)		>(200	)%
Loss before income taxes		(6,648,921	)		(4,523,598	)		(2,125,323	)		47.0	%
Provision for income taxes		(5,674	)		(17,594	)		11,920			(67.8	)%
Net loss	$	(6,654,595	)	$	(4,541,192	)	$	(2,113,403	)		46.5	%

General and Administrative Expenses

General and administrative expenses increased $0.6 million, or 28%, for the year ended December 31, 2021. Salaries, benefits, and other compensation costs increased $0.4 million in 2021 as a result of increased performance-based compensation in 2021 for our current chief executive officer and certain severance payments for a former employee. Professional service and consulting fees increased $0.3 million as a result of increased business activities to support capital raising efforts and administrative support of advancing MELT-300 through the initial phases of its development. These increases were offset by a $0.1 million decrease in stock-based compensation expense related to awards granted to our board of directors in prior years that became fully vested in the first half of 2021 and less expense was recognized compared to the prior year.

Research and Development Expenses

Research and development expenses increased $1.0 million, or 39%, for the year ended December 31, 2021. Research and development expenses were primarily comprised of costs incurred for consultants, CROs, and CMOs for preclinical studies and clinical trials, including clinical study materials used in these activities, related to MELT-300. The increase in 2021 was attributable to the progression and completion of our Phase 1 clinical study and the start and progression of our Phase 2 clinical study for MELT-300.

Interest (Expense) Income, net

Interest expense, net was $581,793 for the year ended December 31, 2021 compared to interest income, net of $7,681 in 2020. The increase in interest expense, net during the year ended December 31, 2021 was primarily due to interest expense associated with the Harrow Loan Agreement, which was entered into during 2021. See “Liquidity and Capital Resources” below for a discussion of the Harrow Loan Agreement.

Liquidity and Capital Resources

Sources of Liquidity

As of June 30, 2022, we had cash and cash equivalents of $6.2 million, compared to $11.3 million as of December 31, 2021. Our operations to date have been funded primarily by aggregate net proceeds of approximately $23.1 million from the Harrow Loan Agreement and the sale of our Series A Preferred Stock.

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In January 2019, we received approximately $10.6 million of net proceeds, after deducting approximately $0.8 million of placement agent fees and offering expenses, from the sale of our Series A Preferred Stock.

In September 2021, we entered into the Harrow Loan Agreement in the principal amount of $13.5 million, with net proceeds received by us of approximately $12.6 million. Approximately $0.9 million of outstanding accrued expenses payable to Harrow pursuant to the Management Services Agreement were converted into the note payable due to Harrow under the Harrow Loan Agreement, and, in addition, approximately $40,000 of Harrow’s legal fees associated with the transaction was deducted from proceeds by us. Amounts borrowed under the Harrow Loan Agreement bear interest at twelve and one-half percent (12.50%) per annum, which interest can be paid in-kind at our option until the maturity date. The Harrow Loan Agreement permits us to pay interest only on the principal amount loaned thereunder through the term and all amounts owed were to be due and payable on September 1, 2022. We could have elected to prepay all, but not less than all, of the amounts owed prior to the maturity date at any time without penalty. In connection with the Harrow Loan Agreement, we have granted Harrow a security interest in substantially all of our personal property, rights and assets, including intellectual property rights, to secure the payment of all amounts owed under the Harrow Loan Agreement. The Harrow Loan Agreement contains customary representations, warranties and covenants, including covenants by us limiting additional indebtedness, liens, mergers and acquisitions, dispositions, investments, distributions, subordinated debt, and transactions with affiliates. The Harrow Loan Agreement includes customary events of default, and upon the occurrence of an event of default (subject to cure periods for certain events of default), all amounts owed by us thereunder may be declared immediately due and payable by Harrow, and the interest rate on the loan may be increased by three percent (3%) per annum. We anticipate that $10,000,000 of the principal amount of the indebtedness under the Harrow Loan Agreement will be settled in exchange for     shares of our common stock upon the consummation of this offering at an assumed initial public offering price of $     per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount.

In April 2022, we entered into an amendment to the Harrow Loan Agreement that would have, among other things, (i) extended the maturity date of the loan through September 1, 2026 and (ii) added certain financial covenants requiring us to maintain minimum liquidity (the “First Harrow Loan Agreement Amendment”). The effectiveness of the First Harrow Loan Agreement Amendment and the amendments therein was subject to our satisfaction of certain conditions precedent, which included the consummation of this offering no later than August 31, 2022 (or such later date as Harrow may agree in its discretion). Since this offering was not completed on or prior to August 31, 2022, this condition was not satisfied such that the First Harrow Loan Agreement Amendment did not become effective, and amounts outstanding under the Harrow Loan Agreement were due and payable by us on September 1, 2022.

In September 2022, we entered into a second amendment to the Harrow Loan Agreement to, among other things, (i) extend the maturity date of the loan through June 1, 2023, (ii) waive the existing event of default related to our failure to pay the loan in full on September 1, 2022 and (iii) extend the date by which we can consummate this offering to May 31, 2023 (the “Second Harrow Loan Agreement Amendment,” and together with the First Harrow Loan Agreement Amendment, the “Harrow Loan Agreement Amendments”). The abovementioned amendments in the Second Harrow Loan Agreement Amendment were effective as of September 21, 2022. Upon the consummation of this offering, the amendments initially included in the First Harrow Loan Agreement Amendment and restated in the Second Harrow Loan Agreement Amendment, will be effective, including the amendment to extend the maturity date of the loan through September 1, 2026. See the section titled “Certain Relationships and Related Party Transactions” elsewhere in this prospectus for more information regarding the Harrow Loan Agreement Amendments.

As discussed in Note 2 to the interim condensed financial statements and the audited financial statements included in this prospectus for going concern, we have incurred significant continuing losses in the six months ended June 30, 2022 and 2021 and the years ended December 31, 2021 and 2020. Since inception through June 30, 2022, we have incurred aggregate losses of approximately $22.7 million. These losses are primarily due to general and administrative and research and development expenses incurred in connection with developing and seeking regulatory approval for MELT-300 and our other product candidates. Our ability to continue operating is highly dependent upon continued funding from the debt and equity markets. Our historical and ongoing dependence on proceeds from debt and/or equity issuances to fund operating expenses could raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements included in this prospectus have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that may result from the outcome of this uncertainty.

We currently expect that our cash and cash equivalents and taking into account the Harrow Loan Agreement Amendments, together with the proceeds of this offering, will be sufficient to continue to develop and commercialize our product candidates and technologies, pursue potential future strategic transactions as opportunities arise, and otherwise fund our operations through 2023. However, additional funding may be necessary to fund our future clinical and pre-clinical activities. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects and our ability to continue operations.

Net Cash Flows

The following provides detailed information about our net cash flows for the periods indicated below:

	For the Six Months						For the Year
	Ended June 30,						Ended December 31,
	2022			2021			2022			2021
	(unaudited)
Net cash (used in) provided by:
Operating activities	$	(5,079,041	)	$	(2,029,262	)	$	(4,225,845	)	$	(4,493,370	)
Investing activities		-			-			-			-
Financing activities		-			-			12,552,286			-
Net change in cash and cash equivalents		(5,079,041	)		(2,029,262	)		8,326,441			(4,493,370	)
Cash and cash equivalents at beginning of the year		11,259,031			2,932,590			2,932,590			7,425,960
Cash and cash equivalents at end of the year	$	6,179,990		$	903,328		$	11,259,031		$	2,932,590

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Operating Activities

Net cash used in operating activities during the six months ended June 30, 2022 was $5.1 million compared to net cash used in operating activities of $2.0 million during the same period in the prior year. The increase in net cash used in operating activities for the six months ended June 30, 2022 is attributable to increased research and development expenses associated with our Phase 2 clinical study for MELT-300 that began in the second half of 2021. 

Net cash used in operating activities during the year ended December 31, 2021 was $4.2 million, compared to net cash used in operating activities of $4.5 million during the same period in the prior year. Net cash used in operating activities during both years was primarily attributed to supporting the development of MELT-300 and our other product candidates.

Investing Activities

During the six months ended June 30, 2022 and 2021, we had no cash flows provided by or used in investing activities.

During the years ended December 31, 2021 and 2020, we had no cash flows provided by or used in investing activities.

Financing Activities

During the six months ended June 30, 2022 and 2021, we had no cash flows provided by or used in financing activities.

Net cash provided by financing activities during the year ended December 31, 2021 was $12.6 million compared to no cash provided by or used in finance activities during the year ended December 31, 2020. Cash provided by financing activities in 2021 was related to net proceeds received from the Harrow Loan Agreement.

Sources of Capital

Our principal sources of cash consist of cash provided by financing activities. The changing trends and overall economic outlook in light of current inflationary conditions, supply chain disruptions and the ongoing COVID-19 pandemic created and are likely to continue to create uncertainty surrounding our operating outlook and may impact our future operating results if these conditions persist for a significant period of time or deteriorate. COVID-19 pandemic related impacts could include the delay of elective procedures, including cataract surgeries, which if elective procedures are halted (similar to March 2020), it would impact our ability to meet our clinical trial and development timelines, resulting in higher costs and expenses. In addition, we may acquire new products, product candidates and/or businesses and, as a result, we may need significant additional capital to support our business plan and fund our proposed business operations.

We may receive additional proceeds from the exercise of our warrants or stock options that are currently outstanding. We may also seek additional financing from a variety of sources, including other equity or debt financings, funding from corporate partnerships or licensing arrangements, sales of assets or any other financing transaction. If we issue equity or convertible debt securities to raise additional funds, our existing stockholders may experience substantial dilution, and the newly issued equity or debt securities may have more favorable terms or rights, preferences and privileges senior to those of our existing stockholders. If we raise additional funds through collaboration or licensing arrangements or sales of assets, we may be required to relinquish potentially valuable rights to our product candidates or proprietary technologies or formulations, or grant licenses on terms that are not favorable to us. If we raise funds by incurring additional debt, we may be required to pay significant interest expenses and our leverage relative to our earnings or to our equity capitalization may increase. Obtaining commercial loans, assuming they would be available, would increase our liabilities and future cash commitments and may impose restrictions on our activities, such as the financial and operating covenants. Further, we may incur substantial costs in pursuing future capital and/or financing transactions, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which would adversely impact our financial results.

We may be unable to obtain financing when necessary as a result of, among other things, our performance, general economic conditions, conditions in the pharmaceuticals industries, or our operating history. Furthermore, the COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. In addition, the fact that we have no history of profitability could further impact the availability or cost to us of future financings. As a result, sufficient funds may not be available when needed from any source or, if available, such funds may not be available on terms that are acceptable to us. If we are unable to raise funds to satisfy our capital needs when needed, then we may need to forego pursuit of potentially valuable development or acquisition opportunities, we may not be able to continue to operate our business pursuant to our current operating plan, which would require us to modify our operations to reduce spending to a sustainable level by, among other things, delaying, scaling back or eliminating some or all of our ongoing or planned investments in corporate infrastructure, business development, sales and marketing and other activities, or we may be forced to discontinue our operations entirely.

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Funding Requirements

Any drug or product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or potentially other capital sources, including collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, costs associated with advancing our product candidates through clinical trials, and potentially commercialization; compensation and related expenses; costs related to third-party CROs, consultants, and service providers for manufacturing and development activities, clinical research, legal, accounting, intellectual property and other services; license payments that may arise; and other overhead costs.

Based upon our current operating plan, we believe that the net proceeds from this offering and taking into account the Harrow Loan Agreement Amendments, together with our existing cash and cash equivalents of approximately $6.2 million as of June 30, 2022, will be sufficient to continue funding our development activities through 2023. In order to finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or potentially other capital sources, including collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders, including investors in this offering, will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

● the progress, costs and results of our ongoing and planned clinical trials of MELT-300, as well as our planned trials for our other product candidates;

● the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our product candidates, including our ongoing clinical trials of MELT-300;

● the impacts of the COVID-19 pandemic;

● the number of, and development requirements for, other product candidates that we pursue;

● the costs, timing and outcome of regulatory review of our product candidates;

● our ability to enter into contract manufacturing arrangements for supply of API, and manufacture of our product candidates and the terms of such arrangements;

● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;

● the payment or receipt of milestones and receipt of other collaboration-based revenues, if any;

● the costs and timing of any future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval;

● the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims;

● the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights;

● the ability to receive additional non-dilutive funding, including grants from organizations, public institutions and foundations;

● addition of operational, financial and management information systems and personnel, including personnel to support our drug development, any future commercialization efforts and our transition to a public company; and

● the costs of operating as a public company.

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

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Contractual Obligations and Commitments

We enter into contracts in the normal course of business with third-party service providers for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes. These contracts generally provide for termination upon notice of 30 days, and therefore, we believe that our non-cancelable obligations under these agreements are not material and we cannot reasonably estimate the timing, when, and if they will occur. However, in the future we may enter into additional research, manufacturing, supplier, lease and other agreements, that may require up-front payments and even long-term commitments of cash.

In June 2022, we entered into a sublease for our principal executive offices. The sublease ends in September 2023 and total rent payments throughout the sublease are approximately $132,000.

See the “Certain Relationships and Related Party Transactions” section and our audited financial statements included elsewhere in this prospectus for discussion of the Harrow Loan Agreement and Harrow Loan Agreement Amendments.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this item.

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Although we believe that the estimates we use are reasonable, actual results could differ materially from these estimates.

While our significant accounting policies are described in more detail in Note 2 to our financial statements appearing elsewhere in this prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Research and Development

We expense all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, and other overhead expenses, clinical trials, contract services and outsource contracts.

Redeemable Convertible Preferred Stock and Related Warrant Liability

We classify redeemable convertible preferred stock outside of stockholders’ deficit on our balance sheets as the requirements of triggering a deemed liquidation event, as defined within its amended and restated certificate of incorporation, are not entirely within our control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences, provided that the holders of convertible preferred stock have not converted their shares into common stock. We record the issuance of convertible preferred stock at the issuance price less related issuance costs. We have not adjusted the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may occur.

Our redeemable convertible preferred stock warrant requires liability classification as the underlying convertible preferred stock is considered contingently redeemable and may obligate us to transfer assets to the holders at a future date upon the occurrence of a deemed liquidation event. The warrant was recorded at fair value upon issuance and was subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized in the statements of operations. In April 2022, we and the holders of the warrants amended the warrants so that warrants are exercisable into shares of our common stock rather than shares of preferred stock. The amendment resulted in the warrants being reclassified to equity. At the amendment date, we used the Black-Scholes-Merton option pricing model to estimate the fair value of the amended warrants and the estimated fair value was recorded as additional paid-in capital and the redeemable convertible preferred stock warrant liability was removed after recording the change in fair value in the statement of operations.

Stock-based Compensation

We have a stock incentive plan under which incentive and non-qualified stock options have been granted to employees, directors and consultants. All stock-based payments are recognized in the financial statements based on their respective grant date fair values. We estimate the fair value of stock options on the date of grant using the Black-Scholes-Merton option pricing model. The model requires management to make a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. The value of the portion of the award that is ultimately expected to vest is recognized ratably over the requisite service periods in our statements of operations. We account for forfeitures as they occur. We evaluate the assumptions used to value stock awards on at least an annual basis.

Determination of the Fair Value of Common Stock

As there has been no public market for our common stock to date, the estimated fair value of our common stock has been determined by our board of directors as of the date of each equity grant, with input from management, considering independent third-party valuations of our common stock as well as our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately- Held-Company Equity Securities Issued as Compensation. Our common stock valuations were prepared using the option-pricing method (“OPM”) which used a combination of approaches to estimate our enterprise value such as the cost approach, income approach, and market approach. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or merger. A discount for lack of marketability of the common stock is then applied to arrive at the estimated fair value of the common stock.

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These third-party valuations were performed at various dates, which resulted in valuations of our common stock of $0.006 per share as of April 30, 2018, $0.01 per share as of August 31, 2018, $1.66 per share as of January 31, 2019, $2.41 per share as of August 31, 2020, and $3.47 per share as of August 31, 2021. We had an additional third-party retrospective valuation using a probability-weighted income and market approach and an OPM allocation performed as of August 31, 2021 that resulted in a common stock value of $3.69 per share. Another third-party valuation was performed as of January 31, 2022 using a similar probability-weighted methodology that resulted in a common stock value of $5.22 per share. Our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:

● the price at which we sold preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;

● the progress of our research and development programs, including the status of preclinical studies and planned clinical trials for our product candidates;

● our stage of development and our business strategy;

● external market conditions affecting the pharmaceutical industry, and trends within the pharmaceutical industry;

● our financial position, including cash on hand, and our historical and forecasted performance and operating results;

● the lack of an active public market for our common stock and our preferred stock;

● the likelihood of achieving a liquidity event; and

● the analysis of initial public offerings and the market performance of similar companies in the biopharmaceutical industry.

The assumptions underlying these valuations represent management’s best estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.

Following the closing of this offering, the fair value of our common stock will be determined based on the quoted market price of our common stock.

Emerging Growth Company Status and Smaller Reporting Company Status

We are an EGC under the JOBS Act. Section 107 of the JOBS Act provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of the delayed adoption of new or revised accounting standards and, therefore, we will be subject to the same requirements to adopt new or revised accounting standards as private entities.

As an EGC, we may also take advantage of certain exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC:

● we are presenting only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in this prospectus

● we intend to avail ourselves of the exemption from providing an auditor’s attestation report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

● we intend to avail ourselves of the exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”), regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis;

● we are providing reduced disclosure about our executive compensation arrangements; and

● we do not intend to require non-binding advisory votes on executive compensation or stockholder approval of any golden parachute payments.

We will remain an EGC until the earliest of (i) December 31, 2027, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the previous rolling three-year period, or (iv) the date on which we are deemed to be a large accelerated filer under the Exchange Act.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to EGCs, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recently Issued and Adopted Accounting Pronouncements

Other than as disclosed in Note 2 to our audited financial statements appearing elsewhere in this prospectus, we do not expect that any recently issued accounting standards will have a material impact on our financial statements or will otherwise apply to our operations.

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BUSINESS

Our Company

Melt is a clinical stage pharmaceutical company focused on the development and commercialization of proprietary non-opioid, non-IV, sedation, and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings. We intend to seek regulatory approval through the FDA’s 505(b)(2) regulatory pathway for these proprietary, patented small-molecule product candidates, where possible. The core IP we own is a patented series of combination non-opioid sedation drug formulations that we believe have multiple clinical applications for potential indications of use.

Melt was formed as a wholly-owned subsidiary of Harrow in 2018, and following the completion of an offering of our Series A Preferred Stock in 2019, Harrow lost its a controlling interest in our Company and we are no longer considered a subsidiary of Harrow.

Our Competitive Strengths

Based on the experience of the MKO Melt, a compounded product containing midazolam, ketamine and ondansetron made by Harrow, we believe our product candidates are unique with regard to expected performance in humans because our product candidates are sublingually delivered versions of the active components in our formulations. This has been demonstrated commercially as a compounded drug in more than 200,000 patients since 2016. Further, we believe that, if approved by the FDA, Harrow may be able to efficiently introduce us to potential customers, particularly in the ophthalmology sector by leveraging Harrow’s existing commercial relationships, facilitating rapid adoption of our lead product candidate, MELT-300. In addition, we believe our competitive strengths include our:

● existing portfolio which includes three proprietary product candidates and development programs;

● knowledge of the industry, including our ability to identify products for enhancement and experience with the 505(b)(2) regulatory pathway;

● portfolio of attractive assets we expect will enable us to compete effectively in the market of conscious and procedural sedation related therapeutics;

● capital and time efficient, differentiated business model as compared to generic and branded specialty pharmaceutical drug companies, utilizing the 505(b)(2) pathway; and

● existing intellectual property, including know-how, and ownership of one U.S. patent issued, three U.S. patent-pending applications and five foreign applications that, if issued, could further protect, as applicable, the market value of our current portfolio of product candidates.

In addition to the potential medical and economic advantages, we believe our product candidates have several commercial advantages, such as reduced development time compared to the development time of NCEs and decreased risk factors in the development process. These commercial advantages derive from the fact that our current MELT-300 product candidate for ophthalmic use is based on known materials already approved for use by the FDA, potentially opening the shortened 505(b)(2) pathway. This drug approval pathway is expected to be pursued for other product candidates we expect to develop. The use of previously approved ingredients recognized by physicians and medical organizations may shorten the time and decrease the costs usually required for the acceptance of the new product in the commercial prescription drug marketplace.

Our Growth Strategy

Our vision is to ultimately Make Needles Pointless™. Our strategy to realize our vision is to develop and commercialize sublingual conscious and procedural sedation drugs that eliminate the need for IV administrated medications and opioids. Key elements of our strategy include:

● executing a clinical development program for MELT-300, our lead product candidate to be used for procedural analgesia and sedation during cataract surgery;

● internally developing and commercializing additional product candidates for procedural sedation in established markets with limited, FDA-approved drug options;

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● expanding our line of therapeutic candidates through the acquisition or in-licensing of technologies, products and drugs intended to meet unmet needs in the sedation and anesthesia market;

● utilize the FDA’s 505(b)(2) regulatory pathway to obtain more timely and efficient approval of our product candidates, where possible;

● independently commercialize and/or cooperate with third parties to both develop and commercialize therapeutic candidates where it makes sense to share costs and leverage the expertise of others; and

● potentially entering into sub-license agreements with domestic and/or international pharmaceutical companies for our existing or future product candidates and approved products, depending upon upfront and milestone payments, royalties and/or other marketing arrangements.

We intend to submit applications for our product candidates via the 505(b)(2) regulatory pathway. As an alternate and typically expedited regulatory pathway for FDA approval of new indications or new formulations of previously-approved products, a company may submit a Section 505(b)(2) NDA instead of a “stand-alone” or “full” NDA. Section 505(b)(2) of the FDCA permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Some examples of products that may be allowed to follow a 505(b)(2) pathway to approval are drugs that have a new dosage form, strength, route of administration, formulation or indication.

Our Lead Product Candidate: MELT-300

MELT-300 combines fixed doses of midazolam (3mg) and ketamine (50mg) in one dissolvable tablet that is administered sublingually for procedural sedation and analgesia during cataract surgery. This product candidate utilizes Catalent’s, our manufacturing partner, proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa. MELT-300 is based on Harrow’s existing MKO Melt formulation, which is comprised of the three active ingredients midazolam, ketamine, and ondansetron in troche form without the Zydis® delivery technology that dissolves in the buccal cavity over a longer period of time than MELT-300.

MKO Melt is a compounded formulation that is not FDA approved, but, rather, is made commercially available pursuant to the FDA Guidance for Human Drug Compounding Outsourcing Facilities under Section 503A and 503B of the Food, Drug, and Cosmetic Act. As a compounded formulation exempt from FDA approval, MKO Melt is marketed and sold under the FDA Structured Product Listing, Marketing Category for Outsourcing Facility Compounded Human Drug Product (Exempt from Approval Requirements).

We are developing MELT-300 as a product candidate for FDA approval. This requires formal clinical testing, and if successful with our clinical development program, we would seek FDA approval through the FDA’s 505(b)(2) regulatory pathway. If approved, we believe that MELT-300 could eventually be utilized in a larger number of cataract surgeries as compared to MKO Melt, as well as a larger number of other human medical procedures once additional clinical trials are conducted and the FDA has approved indications for those procedures.

MKO Melt has an established history of use in cataract surgery, having been dispensed over 200,000 times as a compounded drug since 2016. Based upon this established history of MKO Melt use, we believe there is a physician preference for an FDA-approved version of a product similar to MKO Melt. Although sedation and pain treatments have some intrinsic variability, ophthalmologists and anesthesiologists administering MKO Melt report that patients enter a dissociative state, appearing awake, but detached from the surroundings with their eyes remaining open, still and focused, which is desirable during a cataract surgery procedure. We have leveraged the real-world evidence generated by Harrow and more than 400 U.S. cataract surgeons to inform and guide the design and execution of MELT-300’s clinical and commercial development programs. The substantial commercial experience of MKO Melt leads us to believe MELT-300 could offer patients and clinicians several advantages over currently available alternatives, including:

● Sedation and analgesia without the need for insertion of IV needle;

● A non-opioid combination of two drugs with long history of use;

● Patient convenience – oral tablet that dissolves under the tongue instead of IV infusion; and

● Broad applicability across several procedures and patient populations once the FDA has approved indications for those additional procedures.

MELT-300 Clinical Program Plan

The clinical development program for our product candidates is ultimately dependent upon a myriad of factors, including formulation development, stability profile of our product candidates, clinical trial designs and outcomes and FDA review and comments (among others). The timelines described herein are subject to (and likely will) change due to these and other factors. Such factors (and others) should be considered when reviewing our clinical programs and plans. The description and timeline described below, should be reviewed for illustrative purposes only.

Please note that at the beginning of the development program, the initial product candidate contained midazolam 3mg and ketamine 25mg in one sublingual tablet. This formulation was referred to as MELT-100. After completing the comparative BA studies on MELT-100, a decision was made to increase the ketamine component to 50mg resulting in each sublingual tablet containing midazolam 3 mg and ketamine 50mg. This formulation is called MELT-300 and is the formulation we are bringing forward in our development plans. The PK studies run thus far were done using both one and two sublingual tablets of MELT-100.

We intend to prioritize the MELT-300 program because of its advanced stage of development, including our growing body of supportive clinical data for procedural sedation and analgesia during cataract surgery.

In May 2020, we conducted a Type C meeting with the FDA to discuss our clinical and regulatory strategy and get the agency’s insight on the pathway to filing an NDA and ultimately seeking approval. Following this meeting, we opened an IND in August 2020, and proceeded to complete a Phase 1 BA study during the first half of 2021. Once completed, we again met with FDA to discuss the outcomes of the Phase 1 study and further discussed our clinical program and plans for MELT-300.

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An overview of our clinical program, as discussed with the FDA, is described further in the proceeding sections.

Phase 1 BA study – completed in January 2021

In January 2021, we completed the 2021 PK Study. This study was conducted in 25 healthy volunteers at a single site and was a crossover design study consisting of the following four groups:

1.	Single tablet (combination of 3mg midazolam/25mg ketamine)
2.	Two tablets (combination of 6mg midazolam/50mg ketamine total), doses given 15 minutes apart
3.	Midazolam IV (total of 3.5mg)
4.	Ketamine IV (total of 18mg)

The study allowed us to establish PK curves and relative BA of MELT-100 and showed that the overall exposure level of our product candidate was less than that of the individual IV comparators (the LDs), which we believe will allow us to establish a scientific safety bridge to the LDs. As part of the 505(b)(2) regulatory process, this would allow us to bridge all of the established safety data from the midazolam and ketamine labels, and incorporate that into our NDA filing. Our product candidate was well tolerated by patients in this study, with one serious adverse event of syncope thought to be related to the study drug. As discussed further under the subsection titled MELT-300 Pivotal PK Study, we expect to conduct a pivotal PK study of MELT-300 pending results and completion of our MELT-300 Phase 2 study.

MELT-300 Phase 2 Study Pivotal and Factorial Designed – Started in 3^rd Quarter of 2021

We began enrolling our single, pivotal phase 2 study during the fourth quarter of 2021. While the Phase 1 study was primarily a safety study, the factorial designed Phase 2 study will seek to establish efficacy of our MELT-300 product in patients undergoing cataract surgery, while also evaluating safety and tolerability. The phase 2 study will be a multi-arm study and enroll approximately 350 patients. The phase 2 study will compare MELT-300 against (i) placebo alone; (ii) sublingually delivered midazolam alone (MELT-210) and (iii) sublingual ketamine alone (MELT-400), with the primary efficacy endpoints of appropriate sedation during the cataract surgery and management of intra-operative pain during the surgery. Patients in this study will be enrolled in a 1:1:1:1 ratio. The primary endpoints of the study will include assessing sedation using the Ramsey Sedation Scale (RSS) and the Numeric Pain Rating Scale (NPRS) on a scale of 0 to 10. All assessments will be done at predetermined timepoints and/or milestones during the cataract surgery.

We expect the top-line results from this Phase 2 study will be available in the fourth quarter of 2022. However, as of the date of this prospectus, we have no indication of the results of our clinical studies and can provide no assurances that such results of our primary endpoints will be conclusive or successful. See “Risk Factors— Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization.”

MELT-300 Placebo Controlled Phase 3 Program

Following a Phase 2 study, if successful, we plan to meet with the FDA to get guidance and initiate our Phase 3 program. This would likely be two Phase 3 studies run in parallel, evaluating the efficacy and safety of MELT-300 versus placebo in patients undergoing cataract surgery. Primary endpoints, as discussed with the FDA, would likely include appropriate sedation level during the surgery, management of intra-operative pain, and any need for rescue medication during the procedure. All patients in the study would be given topical anesthetic prior to the start of surgery.

MELT-300 Pivotal PK Study

While we completed our comparative BA studies on an earlier iteration of our product candidate in 2021, we have since altered the final dosage strength to create MELT-300 by increasing the ketamine to 50mg in each tablet. As a result, we expect to run a final, pivotal PK study on MELT-300 in our final dosage form pending the outcome of the MELT-300 Phase 2 study. Based on the results of the 2021 PK Study, we do not expect any unforeseen outcomes from this study.

Market and Payment Strategy for MELT-300

Based solely on the more than 4.2 million cataract surgeries performed in the U.S. in 2019 (according to a Market Scope report), we believe the potential U.S. total addressable market for MELT-300 will be more than $2.5 billion per year. This estimate assumes that MELT-300 will be granted transitional pass-through reimbursement status, or be eligible for separate payment from CMS under Medicare Part B, as well as eligible for a J-Code under the HCPCS for separate payment. Pass-through status is designed to promote innovation and allows for separate payment (i.e., outside the packaged procedural payment) under Medicare Part B for certain new drugs and other medical technologies when used in hospital outpatient or ambulatory surgery centers and that meet well-established criteria specified by federal law and regulations governing Medicare spending. Pass-through reimbursement status generally lasts for three years, and subsequently payment for the product is then included as part of the packaged payment for the associated procedure for Medicare patients. Beyond this first three-year period, we believe MELT-300 has an opportunity to qualify for “exception” status, meaning the pass-through reimbursement status would not expire after the temporary period (e.g., three years). Beginning in 2019 and continuing today, CMS implemented a new payment policy because of the opioid crisis in the US. Under this policy, the outpatient prospective payment system (“OPPS”), will separately pay in the ambulatory surgical center (“ASC”), setting for non-opioid drugs providing analgesia and reducing the need for opioids.

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Product Candidate Pipeline

In addition to MELT-300 we have two other product candidates, which are referred to above and are a part of the ongoing MELT-300 phase 2 clinical study, that we are currently developing based off our existing drug formulation IP and technologies.

MELT-210: Sublingual Midazolam

MELT-210 is our product candidate that provides 3mg of the benzodiazepine midazolam in one sublingual tablet. Similar to MELT-300, this product candidate uses Catalent’s proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa.

We believe that there is a need for a midazolam only product because many medical procedures do not have a significant amount of pain associated with them yet will require a certain level of sedation and are of a length that the duration of action of MELT-210 would be sufficient to provide anxiolysis and sedation for the entire procedure. We believe MELT-210, if approved, would obviate the need to place an intravenous access port and give midazolam (or similar drugs) via IV prior to a procedure. Many patients suffer from “needle phobia” and if given the option we believe physicians would prefer to select MELT-210 in lieu of an IV administered alternative for these patients.

The full development pathway for MELT-210 is still being finalized. We filed and opened an IND in late 2021. We designed and started a comparative BA clinical trial in healthy adult volunteers in February 2022. In this study, we administered one MELT-210 tablet, two MELT-210 tablets, and an IV midazolam dose. The intention is to establish a scientific bridge between the MELT-210 and the midazolam IV reference product. In May 2022, we received the top-line results from this study, and the top-line data demonstrated that concentration comparisons between MELT-210 and the reference drug met the goals of the study. This will allow us to ultimately rely on a 505(b)(2) NDA filing on the safety and pre-clinical toxicology already established for approved midazolam IV.

We will meet with the FDA to discuss the results and propose a phase 3 development program for a broad procedural sedation indication label for procedures lasting no more than a time frame that fits into the duration of action supported by the BA results. Results from the 2021 BA study suggest that procedures lasting less than 30-45 minutes could be the target timeframe for MELT-210. We will need the results of the BA study on MELT-210 before finalizing the procedures we will target for a broad procedural sedation label. We anticipate procedures that will ultimately be studied include commonplace procedures in dermatology, plastic surgery, ophthalmology, and dentistry.

MELT-400: Sublingual Ketamine

MELT-400 is our product candidate that provides 50mg of the NMDA-receptor antagonist ketamine in one sublingual tablet. This product candidate utilizes Catalent’s proprietary fast dissolving Zydis® delivery technology to rapidly dissolve the tablet for absorption across the very thin sublingual mucosa.

IV delivered ketamine has been used in the anesthesia setting for over 50 years. Recently, the S-enantiomer of ketamine (also called esketamine) was approved for treatment of Major Depressive Disorder under the brand name Spravato. A significant amount of research supports the use of ketamine to treat acute mild to moderate pain; however, ketamine has only been available in an IV formulation which naturally limits its use in out-patient settings. We believe that if we can show safety and efficacy of MELT-400 in various pain models throughout the development process, there would be significant use of the final MELT-400 product.

Currently there is no ketamine product marketed in the U.S. for the treatment of pain. We are aware of only one ketamine sublingual formulation under development. IX Biopharma is developing a sublingual ketamine product for pain under the brand name Wafermine using WaferIX technology, and we believe IX Biopharma has completed several phase 2 clinical trials of this product.

We have recently filed an IND for the study of MELT-400 in acute mild to moderate pain. Our complete clinical development plan is still being finalized, but we will conduct a comparative BA study in healthy adult volunteers as our first clinical trial and leverage available data from the studies of our other product candidates. We expect this development program to include dose-ranging as part of the phase 2 studies and then at least 2 phase 3 pivotal studies for approval. We intend to meet with the FDA in the future to propose, receive guidance, and better understand the FDA’s requirements for the development program for MELT-400.

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Other Potential Applications

In addition to cataract surgeries, we believe there may be other applications and procedures for our technology and product candidates, including those summarized below:

Procedure	Frequency and Description
Endoscopies	20,000,000 annually We believe the growth of the procedural sedation market in the U.S. has been driven for many years by the increase in medical interventions requiring procedural sedation, such as colonoscopies, and the demand for other preventive screenings. Regular endoscopic screening for people aged 50 or older is currently recommended and covered by all major health insurance plans, including those under CMS, since effective prevention is considered to reduce the likelihood of incidence of illnesses such as cancer, thereby reducing the suffering of patients and related financial burden to be borne by the payors. We believe the market for endoscopies in gastroenterology represents the most lucrative market segment in procedural sedation with a large and growing patient population.
Pediatrics	We believe there are a large number of procedures, settings and instances where procedural sedation in children is recommended, including those for pediatric critical care, painful procedures (e.g., fracture reductions, dislocations, laceration repair, etc.), dental procedures and magnetic resonance imaging (“MRI”) tests. We believe, in a pediatric setting, there will be strong preference for a sublingually delivered sedation medication as opposed to IV or intramuscular (“IM”), route of administration due to the increased patient anxiety associated with those types of administration. We also believe there is patient and physician preference for a ketamine-based formulation (as discussed further below, due to its safety profile and other additive benefits) as opposed to an opioid or other molecules. Currently, myriad sedation and analgesic agents are used in pediatrics including opioids (e.g., morphine, fentanyl and propofol), midazolam, diazepam and nitrous oxide. Many of these medications require IV or IM administration. IV ketamine has demonstrated a good safety profile in children, while it exhibits sedative, analgesic, and amnestic properties with peak onset of action within one minute. It also preserves the airway reflexes and has minimal effect on the respiratory drive. A prospective, multicenter, observational cohort study from six pediatric emergency departments that examined 6,295 cases of pediatric sedation reported that the use of ketamine alone resulted in the lowest incidence of serious adverse events and significant interventions compared to just propofol or a combination of ketamine with propofol or fentanyl.
Emergency Room (ER)/Diagnostic Testing	We estimate there may be over 53,000,000 emergent care instances, MRI tests and critical care procedures annually in the U.S., including over 19,000,000 ER visits (e.g., fracture reductions, dislocations, etc.) and 34,000,000 annual MRI tests (patient anxiety/claustrophobia). According to Oxford Academic (2012), many patients require general anesthesia or sedation for MRI because of the need to minimize movement during potentially long scanning times and the noisy and claustrophobic environment of the scanner.

Ketamine and Midazolam

Ketamine is an FDA approved anesthetic and was first introduced in the U.S. market in 1970. At that time, the manufacturer included the following description: “rapidly acting, nonbarbiturate general anesthetic” and a suggestion that ketamine, a unique intravenous anesthetic, would be useful for short procedures. Ketamine is known to produce a wide spectrum of pharmacological effects including sedation, catalepsy, somatic analgesia, bronchodilation, amnesia and sympathetic nervous system stimulation with a short recovery period. It also preserves the airway reflexes and has minimal effect on the respiratory drive. In addition, newly found neuroprotective, anti-inflammatory and anti-tumor effects, and the finding of the usefulness of low dose ketamine regimens have helped to widen the clinical application profile of ketamine.

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Ketamine interacts with several receptor systems including the NMDA receptor {N-methyl-D-aspartate}, the opioid receptor, adrenergic receptors, muscarinic receptors, as well as voltage-sensitive calcium ion channels. Ketalar, a brand name for Ketamine, is a racemic mixture comprising equal parts of the S(+) and R(−) enantiomers of ketamine, with the former being most the most potent with a more rapid onset of action. Its principal metabolite, norketamine, has analgesic and sedative effects with a potency of approximately one-third that of the parent compound and norketamine is therefore not always included in pharmacokinetic analyses. As sedation using ketamine is associated with postoperative emergence phenomena and delirium in a proportion of subjects, these side effects can be minimized by administration of benzodiazepines such as midazolam.

Midazolam exerts its pharmacologic effects via a reversible interaction with GABA benzodiazepine receptors in the central nervous system. Midazolam is commonly utilized for conscious sedation, anxiolysis, amnesia as an IV, intramuscular, or as an orally administered agent. Midazolam is typically also used as a premedicant for oral administration to pediatric patients (Versed® oral syrup). When used for anesthesia, midazolam can attenuate the hyperdynamic circulatory effects and unpleasant emergent reactions caused by ketamine. Studies have demonstrated that midazolam and ketamine demonstrate additive effects on conscious sedation but not on anesthesia where the ED50/ED95 (or the effective dose used to achieve the desired effect in 50% and 95% of the population, respectively) are reportedly unchanged by provision of midazolam.

Our Sales and Marketing and Market Opportunity

We believe there is a large market opportunity for developing drugs that offer improvements, addressing unmet patient needs, to currently approved IV and opioid based sedation and analgesia treatments. We intend to pursue drug and product opportunities where patient demand is not being met by current FDA-approved pharmaceutical products.

505(b)(2) Pathway. The 505(b)(2) pathway is intended for molecules that have been previously approved by the FDA or have already been proven to be safe and effective. One such example of a previously approved molecule is midazolam, a component of our MELT-300 product candidate. A 505(b)(2) product typically reformulates the known molecule in a new strength or dosage form. 505(b)(2) products have the advantage of potential significantly lower development costs and shorter development timelines versus traditional new molecular entities. We expect to utilize the 505(b)(2) pathway for all of our current product candidates,

A 505(b)(2) NDA is an application that contains full reports of investigations of safety and effectiveness, but where at least some of the information required for approval comes from studies not conducted by or for the applicant. This alternate regulatory pathway enables the applicant to rely, in part, on the FDA’s findings of safety and efficacy for an existing product, or published literature, in support of its application. A 505(b)(2) product candidate might rely on the clinical studies or literature of a previously FDA-approved drug or rely on the literature and physician usage of an FDA-unapproved drug. The clinical requirements for a 505(b)(2) product candidate can vary widely from product to product and may include new clinical trials, bioequivalence trials, limited safety and efficacy trials, or full Phase 1 through 3 trials. Unless the FDA has released a guidance document, the clinical requirement for a new product candidate is typically not known until the drug sponsor has a Pre-IND meeting with the FDA. We believe there is a significant opportunity to pursue formulations of off-patent drugs using the 505(b)(2) regulatory pathway, including midazolam and ketamine-based products.

The FDCA provides three years of marketing exclusivity for an NDA, including an NDA under the 505(b)(2) pathway, if new clinical investigations, other than BA studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations. We believe that our current product candidates for which we intend to pursue the 505(b)(2) pathway will require clinical investigations. Therefore, we do expect that our current product candidates will be eligible for marketing exclusivity under the FDCA.

As a pre-revenue company, we do not have an internal sales infrastructure. As we advance our product candidates through the development process we may build that capability, or out-license or seek a marketing partner on a product-by-product basis for products that we deem to require large, dedicated sales forces, or for any products where we find it financially or strategically advantageous. In connection with the 2021 Harrow Loan Agreement, we provided Harrow a 5 year right of first refusal related to the third-party commercialization rights of our product candidates.

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Our Products

We have compiled a unique pipeline of product candidates in various stages of development. Our lead product candidate was acquired from Harrow, and our other two product candidates were developed internally. We may look to grow our pipeline of product candidates through value-creating business development activities and through further internal research and development. All of our product candidates use Catalent’s proprietary Zydis® drug delivery technology. To date, the Zydis® technology has been used in over 35 NDA approved products spanning almost 3 decades. Because of the uniqueness of Catalent’s technology, no generic equivalent product has been approved by the FDA for any of the previously NDA approved products using Zydis®. Our product candidate pipeline consists of:

● MELT-300, our lead product candidate, is a fixed dose combination of midazolam and ketamine in a fast-dissolving tablet that is administered sublingually for procedural sedation and analgesia during cataract surgery.

● MELT-210 is a fixed dose of midazolam in a fast-dissolving tablet that is administered sublingually for procedural sedation for short duration procedures.

● MELT-400 is a fixed dose of ketamine in a fast-dissolving tablet that is administered sublingually for short-term or acute pain.

Market Landscape and Competition

Currently, the most widely used products in procedural sedation are midazolam, propofol, and diazepam. We believe that each of these drugs has the majority of the market share in terms of volume of procedures performed in the outpatient surgery market in the U.S. More specifically, based on market research, IV midazolam alone and in many instances in combination with other medications, such as fentanyl or propofol are the most commonly used medications for sedation and analgesia during cataract surgeries and colonoscopies. The propofol label mandates the presence of an anesthesia professional throughout the procedure due to propofol’s potential for respiratory and cardio depressive effects. For midazolam, these side effects are less pronounced and have a different relevance, because an undesirably deep sedation can be reversed with flumazenil. The ketamine component of our product could potentially obviate the need to use an opioid during certain procedures. According to data published in 2021, a group from Duke University performed a two-year single-center retrospective study of over two thousand patients (making up over three thousand cases) undergoing routine cataract surgery and found that approximately 97% of the cases received at least one dose of the opioid fentanyl. We believe, in light of the current opioid crisis in America, the ketamine component of our product would be very attractive to doctors and anesthesia providers.

In the U.S., increased enrollment and screenings may result in a performance-based payment system that will seek to better align payments with high quality of care measures. This would imply that cost-efficient medicines with clinical value will be used more extensively and that continued premium will be placed on innovative medicines with strong clinical profile. Thus, we believe that concerns related to the overall cost of procedures, driven by the need for anesthesia professionals monitoring during procedures using agents such as propofol, will impact the choice of drug products for procedural sedation. Costs related to anesthesia services in gastrointestinal endoscopy procedures alone were estimated at $1.3 billion in 2009. Accordingly, we expect reimbursement regimes under national and commercial healthcare systems, such as Medicare, which differentiate the amounts reimbursed to physicians and/or patients depending on whether an anesthesia professional’s service is used, may also positively impact the demand for products that do not require monitoring by an anesthesia professional.

We believe that some or all of our product candidates, subject to FDA approval with labeling comparable to that of midazolam, could benefit from the potential changes in payment policies. Provided that it could be administered under the supervision of a proceduralist, our product candidates could be able to offer a competitive alternative to IV delivered and/or other forms of midazolam. This is based on its profile compared to midazolam alone.

Suppliers and Raw Materials

We rely on a third-party CMO, Catalent, to manufacture our product candidates. Catalent’s manufacturing of our product candidates is currently based in Europe. Catalent has a long history of quality and FDA compliance. All our product candidates are manufactured in compliance with cGMP, and our internal quality system requires us to enter quality agreements with and audit all of our manufacturers, including Catalent. Our choice to rely on external manufacturers significantly reduces the amount of capital invested in our business and allows us the flexibility to pursue a broad range of opportunities beyond the specific capabilities of a single facility.

Customers

As a pre-revenue company without any approved products, we have no customers.

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Government Regulations and Regulatory Environment

Pharmaceutical companies are subject to extensive regulation by foreign, federal, state and local agencies, such as the FDA, and various European regulatory authorities. The manufacture, distribution, marketing and sale of pharmaceutical products are subject to government regulation in the U.S. and various foreign countries. Additionally, in the U.S., we must follow rules and regulations established by the FDA requiring the presentation of data indicating that our products are safe and efficacious and are manufactured in accordance with cGMP regulations. If we do not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing applications or allow us to manufacture or market our products, and we may be criminally prosecuted. We and our manufacturers and clinical research organizations may also be subject to regulations under other foreign, federal, state and local laws, including, but not limited to, the U.S. Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act and import, export and customs regulations as well as the laws and regulations of other countries. The U.S. government has increased its enforcement activity regarding illegal marketing practices domestically and internationally. As a result, pharmaceutical companies must ensure their compliance with the Foreign Corrupt Practices Act and federal healthcare fraud and abuse laws, including the False Claims Act.

These regulatory requirements impact our operations and differ from one country to another, such that securing the applicable regulatory approvals of one country does not imply the approval of another country. The approval procedures involve high costs and are manpower intensive, usually extend over many years and require highly skilled and professional resources.

FDA Market Approval Process

The steps usually required to be taken before a new drug may be marketed in the U.S. generally include:

● completion of pre-clinical laboratory and animal testing;

● completion of required chemistry, manufacturing and controls testing;

● the submission to the FDA of an IND application which must be evaluated and found acceptable by the FDA before human clinical trials may commence;

● performance of adequate and well-controlled human clinical trials to establish the safety, pharmacokinetics and efficacy of the proposed drug for its intended use;

● submission and approval of an NDA; and

● agreement with the FDA of the language on the package insert.

Clinical studies are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter the study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring safety, and the efficacy criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND process.

Clinical trials are usually conducted in three phases. Phase 1 clinical trials are normally conducted in small groups of healthy volunteers to assess safety of various dosing regimens and pharmacokinetics. After a safe dose has been established, in Phase 2 clinical trials the drug is administered to small populations of sick patients to look for initial signs of efficacy in treating the targeted disease or condition and to continue to assess safety. Phase 3 clinical trials are usually multi-center, double-blind controlled trials in hundreds or even thousands of subjects at various sites to assess as fully as possible both the safety and effectiveness of the drug.

Clinical trials must be conducted in accordance with the FDA’s GCP requirements. The FDA may order the temporary or permanent discontinuation of a clinical study at any time or impose other sanctions if it believes that the clinical study is not being conducted in accordance with FDA requirements or that the participants are being exposed to an unacceptable health risk. An IRB must approve the clinical trial design and patient informed consent at each study site and also may halt a study, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may require changes to the study or impose other conditions. Additionally, some clinical studies are overseen by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board or committee. This group recommends whether or not a trial may move forward at designated check points based on access to certain data from the study. The clinical study sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

As a product candidate moves through the clinical testing phases, manufacturing processes are further defined, refined, controlled and validated. The level of control and validation required by the FDA increases as clinical studies progress. We and the third-party manufacturers on which we rely for the manufacture of our product candidates and their respective components (including the APIs) are subject to requirements that drugs be manufactured, packaged and labeled in conformity with cGMP. To comply with cGMP requirements, manufacturers must continue to spend time, money and effort to meet requirements relating to personnel, facilities, equipment, production and process, labeling and packaging, quality control, recordkeeping and other requirements.

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Assuming completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment of a user fee, unless waived. An NDA includes all relevant data available from pertinent nonclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information on the chemistry, manufacture, controls and proposed labeling, among other things. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the product candidate for its intended use to the satisfaction of the FDA.

If an NDA submission is accepted for filing, which occurs (if at all) sixty days after the sponsor’s submission, the FDA begins an in-depth review of the NDA. Under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal is to complete its initial review and respond to the applicant within ten months of filing, unless the application relates to an unmet medical need, or is for a serious or life-threatening indication, in which case the goal may be within six months of NDA filing. However, PDUFA goal dates are not legal mandates and the FDA response often occurs several months beyond the original PDUFA goal date. Further, the review process and the target response date under PDUFA may be extended if the FDA requests or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the NDA. The NDA review process can, accordingly, be very lengthy. During its review of an NDA, the FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it typically follows such recommendations. Data from clinical studies are not always conclusive and the FDA and/or any advisory committee it appoints may interpret data differently than the applicant.

After the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced, it will either approve commercial marketing of the drug product with prescribing information for specific indications or issue a complete response letter indicating that the application is not ready for approval and stating the conditions that must be met in order to secure approval of the NDA. If the complete response letter requires additional data and the applicant subsequently submits that data, the FDA nevertheless may ultimately decide that the NDA does not satisfy its criteria for approval. The FDA could also approve the NDA with a REMS, plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-marketing testing. Such post-marketing testing may include Phase IV clinical trials and surveillance to further assess and monitor the product’s safety and efficacy after approval. Regulatory approval of products for serious or life-threatening indications may require that participants in clinical studies be followed for long periods to determine the overall survival benefit of the drug.

If the FDA approves one of our product candidates, we will be required to comply with a number of post-approval regulatory requirements. We would be required to report, among other things, certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling for any of our products. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval, and the FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes extensive procedural, substantive and record keeping requirements. If we seek to make certain changes to an approved product, such as certain manufacturing changes, we will need FDA review and approval before the change can be implemented. For example, if we change the manufacturer of a product or our API, the FDA may require stability or other data from the new manufacturer, and such data will take time and are costly to generate, and the delay associated with generating these data may cause interruptions in our ability to meet commercial demand, if any. While physicians may use products for indications that have not been approved by the FDA, we may not label or promote the product for an indication that has not been approved. Securing FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product’s safety and efficacy in the new indication. Even if such studies are conducted, the FDA may not approve any change in a timely fashion, or at all.

The FDA may also require post-marketing testing, or Phase 4 testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions or an approval that could otherwise restrict the distribution or use of the product.

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Section 505(b)(2) New Drug Applications

We intend to submit applications for our product candidates via the 505(b)(2) regulatory pathway. As an alternate path for FDA approval of new indications or new formulations of previously-approved products, a company may submit a Section 505(b)(2) NDA, instead of a “stand-alone” or “full” NDA. Section 505(b)(2) of the FDCA, was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Amendments. Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Some examples of products that may be allowed to follow a 505(b)(2) path to approval are drugs that have a new dosage form, strength, route of administration, formulation or indication.

The Hatch-Waxman Amendments permit the applicant to rely upon certain published nonclinical or clinical studies conducted for an approved product or the FDA’s conclusions from prior review of such studies. The FDA may require companies to perform additional studies or measurements to support any changes from the approved product. The FDA may then approve the new product for all or some of the labeled indications for which the reference product has been approved, as well as for any new indication supported by the Section 505(b)(2) application. While references to nonclinical and clinical data not generated by the applicant or for which the applicant does not have a right of reference are allowed, all development, process, stability, qualification and validation data related to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2).

To the extent that the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book. Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. The Section 505(b)(2) application also will not be approved until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the reference product has expired. Thus, the Section 505(b)(2) applicant may invest a significant amount of time and expense in the development of its products only to be subject to significant delay and patent litigation before its products may be commercialized.

Pervasive and continuing regulation in the U.S.

After a drug is approved for marketing and enters the marketplace, numerous regulatory requirements continue to apply. These include, but are not limited to:

● the FDA’s cGMP regulations require manufacturers, including third-party manufacturers, to follow stringent requirements for the methods, facilities and controls used in manufacturing, processing and packing of a drug product;

● labeling regulations and the FDA prohibitions against the promotion of drugs for unapproved uses (known as off-label uses), as well as requirements to provide adequate information on both risks and benefits during promotion of the drug;

● approval of product modifications or use of a drug for an indication other than approved in an NDA;

● adverse drug experience regulations, which require us to report information on adverse events during pre-market testing;

● post-market testing and surveillance requirements, including Phase 4 trials, when necessary to protect the public health or to provide additional safety and effectiveness data for the drug; and

● the FDA’s recall authority, whereby it can ask, or under certain conditions order, drug manufacturers to recall from the market a product that is in violation of governing laws and regulation. After a drug receives approval, any modification in conditions of use, active ingredient(s), route of administration, dosage form, strength or BA, will require a new approval, for which it may be possible to submit a 505(b)(2), accompanied by additional clinical data necessary to demonstrate the safety and effectiveness of the product with the proposed changes. Additional clinical studies may be required for proposed changes.

Other U.S. Healthcare Laws and Compliance Requirements

For products distributed in the United States, we will also be subject to additional healthcare regulation and enforcement by the federal government and the states in which we conduct our business. Applicable federal and state healthcare laws and regulations include the following:

● The federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

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● The Ethics in Patient Referrals Act, commonly referred to as the Stark Law, and its corresponding regulations, prohibit physicians from referring patients for designated health services (including outpatient drugs) reimbursed under the Medicare or Medicaid programs to entities with which the physicians or their immediate family members have a financial relationship or an ownership interest, subject to narrow regulatory exceptions, and prohibits those entities from submitting claims to Medicare or Medicaid for payment of items or services provided to a referred beneficiary;

● The federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

● Health Insurance Portability and Accountability Act of 1996, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. This statute also prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; and

● Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government.

Reimbursement

Sales of our products in the United States may depend, in part, on the extent to which the costs of the products will be covered by third-party payers, such as government health programs, commercial insurance and managed health care organizations. These third-party payers are increasingly challenging the prices charged for medical products and services. Additionally, the containment of health care costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. If these third-party payers do not consider our products to be cost-effective compared to other available therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

The Patient Protection and Affordable Care Act

On March 23, 2010, the Patient Protection and Affordable Care Act was signed into legislation, which was subsequently amended by the Healthcare and Education Reconciliation Act (as amended, the “Affordable Care Act”). The Affordable Care Act has and will result in sweeping changes across the health care industry. The primary goal of this comprehensive legislation is to extend health insurance coverage to currently uninsured legal U.S. residents through a combination of public program expansion and private sector health insurance reforms. To fund the expansion of insurance coverage, the Affordable Care Act contains measures designed to promote quality and cost efficiency in health care delivery and to generate budgetary savings in the Medicare and Medicaid programs. The Affordable Care Act’s provisions are designed to encourage providers to find cost savings in their clinical operations. Pharmaceuticals represent a significant portion of the cost of providing care. Through modified reimbursement rates and other incentives, the U.S. government is requiring that providers identify the most cost-effective services, supplies and pharmaceuticals. This environment has caused changes in the purchasing habits of providers and resulted in specific attention to the pricing negotiation, product selection and utilization review surrounding pharmaceuticals. This attention may result in our products being chosen less frequently or the pricing being substantially lowered. Additionally, the Affordable Care Act is expected to expand and increase industry rebates for drugs covered under Medicaid programs and make changes to the coverage requirements under the Medicare D program. We cannot predict the impact of the Affordable Care Act, or its possible repeal and replacement, on pharmaceutical companies. The legislation also includes significant provisions that encourage state and federal law enforcement agencies to increase activities related to preventing, detecting and prosecuting those who commit fraud, waste and abuse in federal healthcare programs, including Medicare, Medicaid and Tricare. Since the enactment of the Affordable Care Act, numerous regulations have been issued providing further guidance on its requirements. The Affordable Care Act continues to be implemented through regulation and government activity but is subject to possible amendment, additional implementing regulations and interpretive guidelines. Several states have decided not to expand their Medicaid programs and are seeking alternative reimbursement models to provide care to the uninsured. The manner in which these issues are resolved could materially affect the extent to which and the amount at which pharmaceuticals are reimbursed by government programs such as Medicare, Medicaid and Tricare.

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Our Intellectual Property

Melt Pharmaceuticals currently has five issued U.S. patents related to our product candidates, and we have four ex-U.S. issued patents in Japan, Canada, South Korea and Australia. U.S. Patent 9,918,993 B2, entitled “Pharmaceutical compositions for anesthesiologic applications” was issued in March 2018. Its key composition of matter claims includes compositions compromising a benzodiazepine-based compound, a NMDA antagonist, a beta-block and antiemetic. Methods for fabricating the compositions and using them for anesthesiologic applications are also described in the claims. The pharmaceutical composition is formulated as a solid item adapted for sublingual or buccal administration. This patent expires in June 2036.

In addition to our issued U.S. patent, we have filed additional continuation-in-part applications wherein the claimed subject matter in the patent application includes claims to compositions themselves and treatment methods using known compounds and formulations and dosage types.

In the branded pharmaceutical industry, the majority of a branded drug’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales. The rate of this decline varies by country and by therapeutic category, and the number of generic competitor entrants to the market, among other factors; however, following patent expiration, branded products often continue to have market viability based upon the goodwill of the product name, which typically benefits from trademark protection.

A brand product’s market exclusivity is generally determined by two forms of intellectual property: patent rights held by the brand company and any regulatory forms of exclusivity to which the NDA-holder is entitled.

Patents are a key determinant of market exclusivity for most branded pharmaceuticals. Patents provide the brand company with the right to exclude others from practicing an invention related to the medicine. Patents may cover, among other things, the active ingredient(s), various uses of a drug product, pharmaceutical formulations, drug delivery mechanisms and processes for (or intermediates useful in) the manufacture of products, and polymorphs. Protection for individual products extends for varying periods in accordance with the expiration dates of patents in the various countries. The protection afforded, which may also vary from country to country, depends upon the type of patent, its scope of coverage and the availability of meaningful legal remedies in the country.

Market exclusivity is also sometimes influenced by regulatory exclusivity rights. Many developed countries provide certain non-patent incentives for the development of medicines. For example, the U.S., the European Union and Japan each provide for a minimum period of time after the approval of a new drug during which the regulatory agency may not rely upon the data of the original party who developed the drug to approve a competitor’s generic copy. Regulatory exclusivity rights are also available in certain markets as incentives for research on new indications, on orphan drugs and on medicines useful in treating pediatric patients. Regulatory exclusivity rights are independent of any patent rights and can be particularly important when a drug lacks broad patent protection. Most regulatory forms of exclusivity, however, do not prevent a competitor from gaining regulatory approval prior to the expiration of regulatory data exclusivity on the basis of the competitor’s own safety and efficacy data on its drug, even when that drug is identical to that marketed by the innovator.

We estimate the likely market exclusivity period for each of our 505(b)(2) products on a case-by-case basis. It is not possible to predict the length of market exclusivity for any of our branded products with certainty because of the complex interaction between patent and regulatory forms of exclusivity, and inherent uncertainties concerning patent litigation. There can be no assurance that a particular product will enjoy market exclusivity for the full period of time that we currently estimate or that the exclusivity will be limited to the estimate.

Royalties on Net Sales of Product Candidates

We acquired our intellectual property through an asset purchase agreement with Harrow. As described further below, Harrow and the other inventors, in aggregate, will receive royalties equal to 8% of net sales.

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Asset Purchase Agreement with Harrow Health, Inc.

In December 2018, we acquired intellectual property rights related to our proprietary product candidates from Harrow pursuant to an Asset Purchase Agreement (the “Harrow APA”). The Harrow APA provides that Harrow will cooperate with us in transferring all embodiments of the intellectual property (including know-how) related to the Harrow APA, assist in obtaining and protecting its patent rights for the acquired intellectual property and that we will use commercially reasonable efforts to research, develop and commercialize products based on the acquired intellectual property. In connection with the Harrow APA, we granted a royalty-free license of the intellectual property back to Harrow for the sole use as a compounded drug and in the event we submit a new drug application for our product candidate(s) we will maintain the right to require Harrow to cease compounding a like formulation. In consideration for the acquisition, we are obligated to make royalty payments to Harrow equal to 5% of net sales received by us in connection with the sale or licensing of any product based on the acquired intellectual property (assuming a concurrent royalty is paid to OHSO – see “Royalty Agreement with OHSO, LLC” below). In the event no royalty payment is paid to OHSO, Harrow will receive an 8% royalty on net sales.

Royalty Agreement with OHSO, LLC

We entered into a royalty agreement with OHSO, LLC (“OHSO”), an entity affiliated with our director, Dr. John Berdahl. OHSO is a co-inventor of our core technology. We are required to make royalty payments to OHSO equal to 3% of net sales received by us in connection with the sale or licensing of any product based on the acquired intellectual property.

Services Agreement

We have entered into a Management Services Agreement (the “MSA”) with Harrow. Pursuant to the terms of the MSA, Harrow provides management, administrative, consulting and financial services to us which may include advice and assistance concerning any and all aspects of our day to day operations, management, planning and financing activities and conducting relations on behalf of us with accountants, attorneys, financial advisors and other professionals. In consideration of the services to be rendered, we pay to Harrow a monthly fee of Ten Thousand Dollars ($10,000) (the “MSA Consulting Fee”). If any restrictions prohibit the payment of any installment of the MSA Consulting Fee, such MSA Consulting Fee shall accrue and we are required to make such installment payment as soon as we are permitted to do so under such restrictions. Either party has the right to terminate the MSA at any time for any reason upon thirty (30) days written notice.

Our Employees and Culture

As of the date of this prospectus, we had approximately: (i) three full-time employees; (ii) four consultants providing management and financial services, and general administrative responsibilities; and (iii) five consultants and service providers that are providing guidance related to the regulatory activities.

Our Facilities

We currently sublease office space in Brentwood, Tennessee.

Legal Proceedings

From time to time, we may become party to legal proceedings and claims in the ordinary course of business. We are not currently a party to any significant legal proceedings and have never entered bankruptcy proceedings.

Company History

Melt was incorporated as a wholly-owned subsidiary of Harrow under the laws of the State of Nevada in April 2018 and reincorporated as a Delaware corporation in January 2019. Harrow lost majority-control of Melt following the close of our Series A financing in January 2019. We are no longer considered a subsidiary of Harrow.

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MANAGEMENT

The following table sets forth certain information about our executive officers and directors as of September 21, 2022:

Name	Age	Position(s)
Executive Officers
Larry Dillaha, M.D.	59	Chief Executive Officer and Director
D. Bradford Osborne	43	Chief Financial Officer
Non-Employee Directors
Alison Bauerlein(1)	40	Director
Mark Baum(1)	50	Chairman of the Board of Directors
John Berdahl, M.D.	45	Director
J. Andy Corley	66	Lead Independent Director
Arthur Laffer, Ph.D.	82	Director
Herman Williams(1)	63	Director

(1) Messrs. Baum and Williams and Ms. Bauerlein are currently director nominees and appointment as a director will be effective upon the effectiveness of the registration statement of which this prospectus forms a part.

The following are brief biographies describing the backgrounds of our executive officers and non-employee directors:

Executive Officers

Larry Dillaha, M.D., has served as our Chief Executive Officer since June 2021. Dr. Dillaha has nearly 20 years of drug development experience ranging from pre-clinical to NDA filing and approval, including significant experience with 505(b)(2) drug approvals. Before becoming our Chief Executive Officer, Dr. Dillaha was formerly Chief Medical Officer of Harrow from June 2019 through June 2021. Dr. Dillaha was the Chief Executive Officer and a director of Repros Therapeutics, Inc. from April 2017 until its acquisition by Allergan Sales, LLC (a wholly owned subsidiary of Allergan plc) in January 2018. Prior to Repros he was the Chief Executive Officer and director of CavtheRx, a pre-IND stage, virtual company focused on developing Caveolin Modulators for a variety of inflammatory indications. From April 2014 through January 2017, Dr. Dillaha was the Chief Operating Officer and Chief Medical Officer of New Haven Pharmaceuticals, a specialty pharmaceutical company. From April 2010 through March 2014, he was the Chief Medical Officer of Insys Therapeutics, and from March 2006 through March 2010, Dr. Dillaha was the Chief Medical Officer of Sciele Pharma, both specialty pharmaceutical companies, and from 2002 through February 2006, he was Medical Director, Cardiovascular at Sanofi-Synthelabo/Sanofi. Before that, Dr. Dillaha was a physician in private practice. We believe Dr. Dillaha’s substantial leadership experience in the pharmaceutical industry and knowledge of drug development qualifies him to serve on our board of directors.

D. Bradford Osborne has served as our Chief Financial Officer since February 2022. Mr. Osborne has approximately 20 years of finance and accounting experience. Before becoming our Chief Financial Officer, Mr. Osborne was formerly the Vice President, Finance and Accounting for Precigen, Inc. (“Precigen”), a Nasdaq listed discovery and clinical-stage biopharmaceutical company, from April 2016 to June 2021. From July 2011 to March 2016, Mr. Osborne served as the Senior Director, Finance and Accounting and Executive Director, Finance and Accounting for Precigen. Prior to joining Precigen, Mr. Osborne was the Accounting Director, Portfolio Investments for Third Security, LLC (“Third Security”), a manager of a portfolio of operating biotechnology companies, where he advised Third Security’s portfolio companies on various accounting and finance matters. Prior to Third Security, Mr. Osborne was with KPMG LLP where he worked in the audit practice for over six years beginning his career as an Associate and advancing to Senior Manager. His client base was primarily in the life sciences and manufacturing industries.

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Non-Employee Directors

Alison Bauerlein is a co-founder of Inogen, Inc (Nasdaq: INGN) and currently serves in an advisory role. Ms. Bauerlein was Inogen’s Executive Vice President, Finance and Chief Financial Officer from March 2014 until December 2021, served as Corporate Secretary from 2002 until July 2021, and Corporate Treasurer from 2002 until December 2021. Ms. Bauerlein previously served as Inogen’s Chief Financial Officer and Vice President, Finance from 2008 until March 2014. Prior to serving in these positions, Ms. Bauerlein served in various accounting and finance roles at Inogen from 2002 to 2008. Ms. Bauerlein also serves on the board of directors of Pear Therapeutics (Nasdaq: PEAR), a prescription digital therapeutics company, Gelesis Holdings, Inc, (NYSE: GLS), a biotherapeutics company, Equinox, and Koya Medical, a medical technology manufacturer focusing on treatment of lymphedema and venous disease. Ms. Bauerlein has over 21 years of experience in treasury, finance, accounting, risk management as well as strategic and tactical cost analysis and forecasting. Ms. Bauerlein received a Bachelor of Arts degree in Economics/Mathematics from the University of California, Santa Barbara. We believe that Ms. Bauerlein’s experience with healthcare care companies and her extensive leadership roles qualify her to serve on our board of directors.

Mark L. Baum, J.D., is a founder of the Company and a director from April 2018 to November 2021 and will be reappointed to our board of directors effective upon the effectiveness of the registration statement of which this prospectus forms a part. He is the founder and CEO of Harrow, a commercial stage pharmaceutical company focused on providing patients and physicians with innovative and affordable ophthalmic drugs in the ocular surgery, glaucoma, and dry eye disease markets. Mr. Baum is also a founder and former board member of Eton Pharmaceuticals and a founder and current board member of Surface Pharmaceuticals. Mr. Baum was named by Ernst & Young LLP as the 2017 Entrepreneur of the Year™ in the life sciences category for the San Diego region. Prior to Harrow, as the founder of TBLF, LLC, a private investment fund, Mr. Baum made more than 200 investments into more than 40 private and public companies. In 1999, Mr. Baum founded YesRx, an HIV-focused pharmacy business. Mr. Baum’s advocacy for drug pricing and accessibility issues has been featured in Op-Ed contributions for the Wall Street Journal and through appearances on leading national media outlets. He holds a Bachelors in Political Science and Philosophy from the University of Texas at Arlington and a Juris Doctor from California Western School of Law. We believe that Mr. Baum is qualified to serve on our board of directors based on his extensive experience and expertise in the pharmaceutical industry. Following completion of this offering, Mr. Baum will serve as the Chairman of the Board.

John Berdahl, M.D., is a board-certified ophthalmologist and one of the co-inventors of the Melt technology. He is also a founder, board member and Chief Medical Officer of Equinox Ophthalmic, Inc. (“Equinox”), which is developing a unique way to lower eye pressure for glaucoma treatment. He has performed more than 25,000 eye surgeries and his practice has experience using the MKO Melt in over 10,000 surgeries. He has been involved in 37 FDA-monitored clinical trials in ophthalmology. He is one of the few surgeons in the United States who is fellowship trained in cornea, glaucoma, and refractive surgery. Dr. Berdahl created astigmatismfix.com, which helps thousands of surgeons per month fix residual astigmatism after cataract surgery. In an effort to improve access to care, he co-founded ExpertOpinion.MD. Dr. Berdahl also serves as Medical Director of Dakota Lions Sight & Health, an eye and tissue donation nonprofit, and as an Ophthalmologist with Vance Thompson Vision. In addition to over 45 peer-reviewed articles, over 35 book chapters, hundreds of presentations at national and international meetings, Dr. Berdahl is also highly regarded by his peers consistently being named as an influential and top ophthalmologist in the field. Dr. Berdahl holds a Bachelors in Physics from Augustana College and a Doctor of Medicine from Mayo Medical School. We believe that Dr. Berdahl is qualified to serve on our board of directors because of his contributions to developing our MELT technologies and his extensive experience related to ophthalmology.

J. Andy Corley has been a member of our board since July 2019 and is an established leader and entrepreneur in the eye-care industry. Notably, he introduced private pay procedures to the eye-care space, which have had a prominent role in the growth of ophthalmology. Mr. Corley co-founded Eyeonics, Inc. in 1998 to develop and market the crystalens intraocular lens for the treatment of cataracts where we served as CEO and worked pioneer the “premium channel” for cataract surgery–creating over $10 billion in value for the industry and granting patients choice and control on upgraded healthcare decisions. Eyeonics was sold to Bausch and Lomb, where Mr. Corley served as President of the surgical division until forming Yelroc Consulting. Mr. Corley also co-founded Flying-L Partners, which invests in and develops innovative technology in the ophthalmic sector. He is currently Chairman of the board of directors of RxSight, Inc. (Nasdaq: RXST), a commercial-stage medical technology company dedicated to improving the vision of patients following cataract surgery, and Neurolens, a prescription lenses company focusing on linking optometry and neurology, and is member of the board of Equinox. He is also a board member of the Loving Eyes Foundation. He holds a Bachelors of Business Administration in Management from Georgia Southern University. We believe that Mr. Corley is qualified to serve on our board of directors because of his experience in leading and investing in life science companies. Following completion of this offering, Mr. Corley will serve as the Lead Independent Director of the Company.

Arthur Laffer, Ph.D., has been a member of our board since August 2022 and is a renowned economist and the founder and Chief Economist of Laffer Associates, an economic research and consulting firm. Dr. Laffer served as Chairman of Laffer Investments, a registered investment advisor, from 1999 until 2019. Dr. Laffer has extensive experience public company board experience, and serves as a director of NexPoint Real Estate Finance, Inc. (NYSE: NREF), a commercial mortgage real estate investment trust, NexPoint Residential Trust, Inc. (NYSE: NXRT), a real estate investment trust focused on well-located, middle-income, multifamily properties in large cities, primarily in the southeastern and southwestern U.S., and VerifyMe, Inc. (Nasdaq: VRME), a technology solutions provider specializing in products to connect brands with consumers. Dr. Laffer has also served as Secretary of the 1065 Institute, Inc., a Nashville-based nonprofit focused on supply-side economic research, since August 2016. Dr. Laffer holds a Bachelor of Arts in Economics from Yale University, an M.B.A. in Economics from Stanford University and a Doctorate in Economics from Stanford University. Dr. Laffer has decades of experience providing economic advice to businesses, individuals, and governments, and is widely recognized for his thought leadership and contributions to the field of economics. We believe Dr. Laffer’s economic acumen and prior board experience qualify him to serve on our board of directors.

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Herman Williams, M.D., is a seasoned executive with extensive experience in healthcare leadership and management. Since September 2021, Dr. Williams has served as Chief Physician Executive of The Hardenbergh Group, a Nashville-based provider of healthcare staffing and consulting solutions. Dr. Williams has also served as Chief Physician Executive of BDO, USA, a tax and financial advisory services company, since February 2019, leading the Nashville office’s healthcare consulting practice. Dr. Williams previously served as Chief Clinical Officer of Regional Care Capella Health from October 2013 until November 2018, where he was responsible for the oversight of eighteen medical facilities across thirteen states. Dr. Williams’ operational experience includes oversight of rural, urban, small and complex facilities; as well as academic, community, for profit, and nonprofit healthcare organizations. Dr. Williams has also served on the American Heart Association Board since September 2012, and has given speeches on leadership at several prominent universities and other institutions. Dr. Williams holds a Bachelor of Arts in Psychology and Biology from Amherst College, a Doctor of Medicine from Boston University, and a Master of Public Health from Harvard University. We believe that Dr. Williams’ extensive and multifaceted healthcare leadership and management experience qualifies him to serve on our board of directors.

Corporate Governance

Composition of our Board of Directors

Our business and affairs are managed under the direction of our board of directors. Our board of directors currently consists of four (4) members and following completion of this offering, will consist of seven (7) members. Our board of directors will be elected for one (1)-year terms at each annual meeting of stockholders. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Our amended and restated certificate of incorporation, which will become effective upon the closing of this offering, and our bylaws, will authorize only our board of directors to fill vacancies on our board of directors and will provide that the authorized number of directors may be changed only by resolution approved by a majority of our board of directors.

Role of the Board in Risk Oversight

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly through the board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure. Following the completion of this offering, we intend for our audit committee to have the responsibility of considering and discussing our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee will also monitor compliance with legal and regulatory requirements, in addition to oversight of the performance of our external audit function. Our nominating and corporate governance committee will monitor the effectiveness of our corporate governance guidelines. Our compensation committee will assess and monitor whether any of the risks arising from our compensation policies and programs are reasonably likely to have a material adverse effect on us.

Director Independence

In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market. Under the rules and regulations of Nasdaq (the “Nasdaq Listing Rules”), independent directors must comprise a majority of a listed company’s board of directors within a specified period after listing. In addition, the Nasdaq Listing Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. Under the Nasdaq Listing Rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Additionally, compensation committee members must not have a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. To be considered independent for purposes of Rule 10A-3, a member of listed company’s audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries. We intend to satisfy the audit committee independence requirements of Rule 10A-3 as of the completion of this offering.

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Our board of directors has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors determined that, with the exception of Dr. Dillaha, our Chief Executive Officer, and Mr. Baum, each member of our board of directors is an “independent director” as defined under the applicable rules and regulations of the SEC and the Nasdaq Listing Rules. In making these determinations, our board of directors reviewed and discussed information provided by the directors and by us with regard to each director’s business and personal activities and relationships as they may relate to us and our management, including the beneficial ownership of our common stock by each non-employee director and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”

There are no family relationships among any of our executive officers or directors.

Leadership Structure of the Board

Our board of directors does not have a fixed policy as to whether the role of the Chief Executive Officer and Chairman of the Board should be separate and may choose to combine or separate the positions of Chairman of the Board and Chief Executive Officer as the board deems appropriate.

Following the completion of this offering, Mr. Baum, who is not considered to be an independent director, will serve as the Chairman of the Board. At the current time, our board of directors and nominating and corporate governance committee have carefully considered the leadership structure of the board of directors, and have determined that the Company and its stockholders are best served by having the positions of Chairman of the Board and Chief Executive Officer filled by different positions. This leadership structure allows the Chief Executive Officer to focus on the Company’s day-to-day operations, while allowing the Chairman of the Board to lead our board of directors in providing advice and oversight to management.

The Chairman’s responsibilities will include, without limitation, the following:

● provide advice and counsel to the Company’s management;

● facilitate regular discussion and consideration of the Company’s strategy;

● chairing meetings of the board of directors, including, providing adequate time for discussion of issues, facilitating consensus, encouraging full participation and discussion by individual directors and confirming that clarity regarding decision-making is reached and accurately recorded;

● recommending items for consideration on the agenda for each meeting of the board of directors;

● communicating with major stockholders upon request; and

● consulting with the chief executive officer and/or Lead Independent Director on such other matters as are pertinent to the board of directors and the Company.

In addition, following the completion of this offering, Mr. Corley will serve as the Lead Independent Director. The Lead Independent Director’s responsibilities will include, without limitation, the following:

● providing leadership to ensure that the board of directors functions independently of management of the Company and other non-independent directors;

● chairing, and reviewing agendas and presentation topics for, executive sessions of independent directors of the Board;

● taking an active role in reviewing agendas and presentation topics for Board meetings and materials to be sent to the Board in advance of Board meetings;

● in the absence of the Chairman, chairing meetings of the board of directors; and

● consulting and meeting with any or all of the independent directors, at the discretion of either party and with or without the attendance of the Chairman of the Board, and representing such directors, where necessary, in discussions with management of the Company on corporate governance issues and other matters.

Our board of directors and nominating and corporate governance committee believe that the appointment of a separate Lead Independent Director will reinforce the independence of our board of directors from management, create an environment that encourages objective oversight of management’s performance and enhance the effectiveness of our board of directors as a whole. Our board of directors intends to periodically review our leadership structure and may make such changes in the future as it deems appropriate and in the best interests of the Company and its stockholders.

Board Committees

Our board of directors has established an audit committee, a compensation committee and a nominating and governance committee prior to the completion of this offering, each of which will operate pursuant to a charter adopted by our board of directors and that will be effective prior to the consummation of this offering. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. Following the completion of this offering, copies of the charters for each committee will be available on our website. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus.

Audit Committee

Upon the completion of this offering, our audit committee will consist of            ,             and            ,           with                  , serving as the chairperson. Our board of directors has determined that each member of our audit committee is independent within the meaning of Rule 10A-3 under the Exchange Act and the applicable Nasdaq Listing Rules. Each member of our audit committee can read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements. Our board of directors has also determined that               qualifies as an “audit committee financial expert” within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq Listing Rules. In arriving at these determinations, the board has examined each audit committee member’s scope of experience and the nature of their prior or current employment.

The functions of this committee include, among other things:

● overseeing our corporate accounting and financial reporting processes;

● managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

● overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

● discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, and overseeing our annual and quarterly financial statements and critical accounting policies and estimates;

● overseeing our internal control over financial reporting, disclosure controls and procedures, code of business conduct and ethics, and legal and regulatory matters;

● developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

● reviewing and approving related person transactions;

● reviewing and evaluating on an annual basis the performance of the audit committee and the audit committee charter;

● preparing the audit committee report required by SEC rules;

● approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm; and

● such other matters that are specifically designated to the audit committee by our board of directors from time to time.

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Our audit committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable Nasdaq listing standards. We believe that the composition and functioning of our audit committee will comply with all applicable SEC and Nasdaq Listing Rules. We intend to comply with future requirements to the extent they become applicable to us.

Compensation Committee

Upon the completion of this offering, our compensation committee will consist of             , and              , with             , serving as the chairperson. Each of these individuals is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our board of directors has determined that each of these individuals is “independent” as defined under the applicable Nasdaq Listing Rules, including the standards specific to members of a compensation committee.

The functions of this committee include, among other things:

● reviewing, modifying and approving (or making recommendations to the full board of directors regarding) our overall compensation strategy and policies;

● approving (or making recommendations to the full board of directors regarding) the compensation and other terms of employment of our executive officers, including with respect to performance goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives;

● reviewing and approving (or making recommendations to the full board of directors regarding) equity incentive plans, compensation plans and similar programs, as well as modifying, amending or terminating existing plans and programs;

● evaluating risks associated with our compensation policies and practices and assessing whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us;

● reviewing and making recommendations to the full board of directors regarding the type and amount of compensation to be paid or awarded to our non-employee board members;

● overseeing our compliance with applicable SEC rules regarding shareholder approval of certain executive compensation matters;

● reviewing and assessing the independence of compensation consultants, legal counsel and other advisors as required by Section 10C of the Exchange Act;

● reviewing the competitiveness of our executive compensation programs and evaluating the effectiveness of our compensation policy and strategy in achieving expected benefits to us;

● reviewing and approving (or making recommendations to the full board of directors regarding) the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers;

● preparing, if required, the compensation committee report on executive compensation for inclusion in our annual proxy statement in accordance with SEC rules;

● reviewing and evaluating on an annual basis the performance of the compensation committee and the compensation committee charter; and

● such other matters that are specifically designated to the compensation committee by our board of directors from time to time.

Our compensation committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable Nasdaq Listing Rules. We believe that the composition and functioning of our compensation committee will comply with all applicable SEC and Nasdaq Listing Rules. We intend to comply with future requirements to the extent they become applicable to us.

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Nominating and Corporate Governance Committee

Upon the completion of this offering, our nominating and corporate governance committee will consist of             , and                  , with                   , serving as the chairperson. Our board of directors has determined that each of these individuals is “independent” as defined under the applicable Nasdaq Listing Rules and SEC rules and regulations.

The functions of this committee include, among other things:

● identifying, reviewing and evaluating candidates to serve on our board of directors, including the nomination of incumbent directors and nominees who may be recommended by our stockholders;

● determining the minimum qualifications for service on our board of directors;

● evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate;

● considering and making recommendations to the board of directors regarding the composition and chairmanship of the committees of the board;

● considering and assessing the independence of members of our board of directors;

● developing a set of corporate governance policies and principles and recommending to our board of directors any changes to such policies and principles;

● reviewing and making recommendations to the board of directors with respect to management succession planning;

● reviewing and evaluating on an annual basis the performance of the nominating and corporate governance committee and the nominating and corporate governance committee charter; and

● such other matters that are specifically designated to the nominating and corporate governance committee by our board of directors from time to time.

Our nominating and corporate governance committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable Nasdaq Listing Rules. We believe that the composition and functioning of our nominating and corporate governance committee will comply with all applicable SEC and Nasdaq Listing Rules. We intend to comply with future requirements to the extent they become applicable to us.

Code of Ethics

Effective upon the closing of this offering, we will adopt a Code of Business Conduct and Ethics (the “Code of Ethics”), applicable to all of our employees, executive officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. Following the closing of this offering, the full text of the Code of Ethics will be available on our website at www.meltpharma.com. We intend to post on our website all disclosures that are required by law or the Nasdaq Listing Rules concerning any amendments to, or waivers from, any provision of the Code of Ethics. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus. We have included our website in this prospectus solely as an inactive textual reference.

Compensation Committee Interlocks and Insider Participation

None of our directors who serve as a member of our compensation committee is, or has at any time during the past year been, one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving on our board of directors or compensation committee.

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Certain Legal Proceedings

No executive officer, member of the board of directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

Limitations on Director and Officer Liability and Indemnification

Our amended and restated certificate of incorporation that will become effective in connection with this offering will contain provisions that will limit the liability of our directors for monetary damages to the fullest extent permitted by the DGCL. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:

● any breach of the director’s duty of loyalty to us or our stockholders;

● any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

● unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or

● any transaction from which the director derived an improper personal benefit.

Our amended and restated certificate of incorporation that will become effective in connection with this offering will require us, and our bylaws require us, to indemnify our directors and officers to the fullest extent permitted by the DGCL within certain parameters set forth in such organizational documents, and allow us to indemnify other employees and agents. Subject to certain limitations, our amended and restated certificate of incorporation will also require us, and our bylaws require us, to advance expenses incurred by our directors and officers for the defense of any action for which indemnification is required or permitted.

We have entered into indemnification agreements with each of our directors and our executive officers. These agreements will provide that we will indemnify each of our directors and such officers to the fullest extent permitted by Delaware law, subject to certain parameters set forth therein.

We believe that these provisions in our amended and restated certificate of incorporation, bylaws and indemnification agreements are necessary to attract and retain qualified persons such as directors, officers and key employees. We also maintain directors’ and officers’ liability insurance. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Director Compensation

We do not currently have a policy regarding compensation for our independent directors. We intend to adopt a policy regarding such compensation following the consummation of this offering, which will include a cash retainer and annual grant of equity for a year of service. While we did not have a formal director compensation policy, non-employee directors were paid a cash retainer of $50,000, payable quarterly, during the year ended December 31, 2021.

The following table sets forth in summary form information concerning the compensation that we paid or awarded during the year ended December 31, 2021 to each of our non-employee directors:

Name	Fees Earned or Paid in Cash ($)		Total ($)
J. Andy Corley		50,000		50,000
John Berdahl		50,000		50,000
Mark Baum(1)		50,000		50,000

(1) Mr. Baum was a director of the Company until his resignation in November 2021 and currently serves as an advisor and consultant to the board of directors. See “Certain Relationships and Related Party Transactions” for additional information.

Consistent with prior years, each of our non-employee directors and our board advisor will receive a cash retainer for their service during 2022 of $50,000, payable quarterly, over a one-year period. Dr. Laffer’s 2022 cash retainer was pro-rated as he joined the board in August 2022.

In addition, on April 28, 2022, we granted to each of our then-current non-employee directors and our board advisor restricted stock units with respect to 9,578 shares of our common stock, which will vest in full twelve (12) months following the date of grant, subject to and in accordance with the terms of the 2018 Plan. On August 22, 2022, upon his appointment to our board of directors, we granted to Dr. Laffer restricted stock units with respect to 4,789 shares our common stock, which will vest in full twelve (12) months following the date of grant, subject to and in accordance with the terms of the 2018 Plan.

We reimburse all of our non-employee directors for their reasonable out-of-pocket expenses incurred in attending board of directors and committee meetings, attending functions on our behalf and in performance of their duties as directors. No other compensation was earned by or paid to our non-employee directors for the year ended December 31, 2021. The compensation of Dr. Dillaha as a named executive officer is set forth in the section titled “Executive Compensation” and he does not receive any additional compensation for his service as a director.

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EXECUTIVE COMPENSATION

The following is a discussion and analysis of compensation arrangements of our named executive officers. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.

Compensation Overview

The following table shows the total compensation awarded to, earned by, or paid to during the year ended December 31, 2021 to (1) our current chief executive officer who began serving in this position during the fiscal year ended December 31, 2021 (“fiscal 2021”), (2) our former chief executive officer who served in this position for a portion of fiscal 2021; and (3) a former executive officer who served in this capacity for a portion of fiscal 2021, and otherwise would have been a named executive officer if he had served as an executive officer as of December 31, 2021. We refer to these individuals in this prospectus as our named executive officers. We did not have any executive officers during fiscal 2021 other than the named executive officers set forth below.

Our named executive officers are:

● Larry Dillaha, M.D., our Chief Executive Officer who joined us in that role in June 2021;

● Gregory P. Madison, our former Chief Executive Officer who served as our principal executive officer until his resignation in June 2021; and

● Mark Hazard, our former Chief Technical Officer until his resignation in May 2021.

Summary Compensation Table

The following table sets forth information regarding the compensation awarded to, earned by or paid to our named executive officers during the fiscal years ended December 31, 2021 and 2020:

Name and Principal Position	Year		Salary ($)(1)		Stock Awards($)(2)			Option Awards($)(2)			Non-Equity Incentive Plan Compensation($)(3)		All Other Compensation ($)			Total ($)
Larry Dillaha, M.D.		2021		247,692		—			617,592			230,000		28,518	(4)		1,123,802
Chief Executive Officer		2020		—		103,078	(4)		51,951	(4)		—		50,000	(4)		205,029
Gregory P. Madison		2021		203,457		—			—			—		66,695	(5)		270,152
Former Chief Executive Officer		2020		477,692		—			258,388			—		7,643	(5)		743,723
Mark Hazard		2021		133,269		—			-			—		307,102	(6)		440,371
Former Chief Technical Officer		2020		342,692		—			80,189			—		7,523	(6)		430,404

(1)

Salary amounts represent actual amounts paid during the fiscal years ended December 31, 2020 and 2021. See “—Narrative to the Summary Compensation Table—Annual Base Salaries” below.

(2)

Represents the aggregate grant date fair value of stock awards or option awards, as applicable, granted during the applicable fiscal year, computed in accordance with ASC Topic 718. See Note 2 to our audited financial statements included elsewhere in this prospectus for a discussion of the assumptions made by us in determining the grant date fair value of our stock awards and option awards. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon vesting of the stock awards or option awards, as applicable, the exercise of the stock options, or the sale of the common stock underlying such stock options.

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(3)	Reflects performance-based cash bonuses awarded to our named executive officers. See “—Narrative to Summary Compensation Table—Non-Equity Incentive Plan Compensation” below for a description of the material terms of the program pursuant to which this compensation is awarded. Such amounts are determined and paid after the end of each year, but reflect individual and Company performance for the respective years reflected above. Executives are required to be employed at the time of payment in order to be eligible to receive performance-based cash bonuses. Mr. Hazard and Mr. Madison did not receive performance-based cash bonuses for the periods presented.
(4)	Represents cash retainers paid to Dr. Dillaha in the amount of $25,000 and $50,000 in the years ended December 31, 2021 and 2020, respectively, and option and stock awards totaling $155,029 granted to him in 2020 for his service as a non-employee director prior to his appointment as our Chief Executive Officer in June 2021. Company-paid health and welfare benefits following Dr. Dillaha’s appointment as our Chief Executive Officer totaled $3,518 in the year ended December 31, 2021. Dr. Dillaha did not participate in the Company’s 401(k) savings plan during the year ended December 31, 2021.
(5)	Represents (i) $53,047 paid to Mr. Madison for his accrued and unused paid time off at the time of his resignation in June 2021, (ii) Company matching contributions to a 401(k) savings plan in the amount of $10,260 during the year ended December 31, 2021, (iii) Company-paid health and welfare benefits of $3,388 during the year ended December 31, 2021, and (iv) Company-paid health and welfare benefits of $7,643 during the year ended December 31, 2020.
(6)	Represents (i) $247,500 payable to Mr. Hazard as severance over the nine-month period following his resignation in May 2021 ($196,731 of which was paid to Mr. Hazard during the fiscal year ended December 31, 2021 and $50,769 of which was paid to Mr. Hazard through February 2022); (ii) $38,077 paid to Mr. Hazard for his accrued and unused paid time off at the time of his resignation in May 2021; (iii) $13,942 of reimbursements of COBRA health care benefits following his resignation in May 2021; (iv) Company matching contributions to a 401(k) savings plan in the amount of $5,077 during the year ended December 31, 2021; (v) Company-paid health and welfare benefits of $2,506 during the year ended December 31, 2021 prior to Mr. Hazard’s May 2021 resignation; and (vi) Company-paid health and welfare benefits of $7,523 during the year ended December 31, 2020.

Narrative to Summary Compensation Table

In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders and a long-term commitment to our Company. We generally do not provide perquisites or personal benefits except in limited circumstances.

Annual Base Salaries

The annual base salaries of our executive officers are generally determined, approved and reviewed periodically by our board in order to compensate our executive officers for the satisfactory performance of duties to our Company. Annual base salaries are intended to provide a fixed component of compensation to our executive officers, reflecting their skill sets, experience, roles and responsibilities. Base salaries for our executive officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent.

Employment Arrangements

Effective June 18, 2021, we entered into an offer letter with Larry Dillaha, M.D. Pursuant to Dr. Dillaha’s offer letter, he serves as our Chief Executive Officer. Dr. Dillaha’s employment shall continue until terminated by either the Company or Dr. Dillaha with or without cause or advance notice. Pursuant to Dr. Dillaha’s offer letter, he will receive an annual base salary of $460,000, and be eligible to participate in the Company’s performance incentive plan with his initial target bonus at 50% of his annual base salary. The Company also granted Dr. Dillaha an option to purchase 250,000 shares of the Company’s common stock at an exercise price of $3.47 per share effective as of July 1, 2021. The option shall vest and become exercisable over a 4-year period with 25% vesting on the one-year anniversary of Dr. Dillaha’s employment start date and the balance vesting equally after each additional quarterly period for continuous service completed over the following 12 quarters, subject to and in accordance with the terms of to our 2018 Plan. Dr. Dillaha’s options expire in July 2031. The offer letter contains customary provisions relating to vacation, benefits, and confidentiality.

Under Dr. Dillaha’s offer letter, if he is terminated without “Cause” (as defined in the offer letter) and other than as a result of his death or disability, or he resigned for “Good Reason” (as defined in the offer letter), he shall be entitled to receive a severance payment equal to the sum of (1) six (6) months of his base salary in effect on the effective date of such involuntary termination, plus (2) the greater of (x) his annual bonus for the calendar year preceding the calendar year in which such involuntary termination occurs or (y) target annual bonus for the year of such involuntary termination, which shall be paid in a lump sum on the 30^th day following such involuntary termination. Dr. Dillaha may also receive his annual bonus for the year in which the involuntary termination occurs, based on actual results for such year and prorated for the period of time he provided services prior to his termination. Dr. Dillaha will also be eligible for COBRA following his involuntary termination.

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Effective January 30, 2019 (the “Madison Employment Start Date”), we entered into an offer letter with Gregory Madison. Prior to the Madison Employment Start Date, Mr. Madison provided part-time consulting services to the Company. As compensation for the consulting services, Mr. Madison received a restricted stock award for 632,500 shares of the Company’s common stock, which vested 25% on the one (1)-year anniversary of the grant date and thereafter in equal quarterly installments ending on the four (4)-year anniversary of such date. On the Madison Employment Start Date, Mr. Madison was paid a lump sum cash payment of $100,000. Pursuant to Mr. Madison’s offer letter, effective upon the Madison Employment Start Date, he served as our Chief Executive Officer. Mr. Madison’s employment continued until his resignation on June 11, 2021, and he forfeited 237,189 shares of his 2018 restricted stock award at that time. See “Separation Arrangements” below for additional details regarding the terms of Mr. Madison’s separation. Pursuant to Mr. Madison’s offer letter, he received an initial annual base salary of $460,000, and was eligible to earn a performance bonus equal to 60% of his base salary in effect during the bonus year based on the achievement of certain corporate performance targets and individual performance targets. The offer letter contained customary provisions relating to vacation, benefits, and confidentiality. Mr. Madison is subject to non-solicitation restrictive covenants for 12-months post-termination.

Effective April 29, 2019, we entered into an offer letter with Mark Hazard. Pursuant to Mr. Hazard’s offer letter, he served as our Chief Technical Officer. Mr. Hazard’s employment continued until his resignation on May 28, 2021. See “Separation Arrangements” below for additional details regarding payments made by us to Mr. Hazard in connection with his separation. Pursuant to Mr. Hazard’s offer letter, he received an initial annual base salary of $330,000, and was eligible to earn a performance bonus equal to 40% of his base salary in effect during the bonus year based on the achievement of certain corporate performance targets and individual performance targets. The Company also granted Mr. Hazard an option to purchase 90,000 shares of the Company’s common stock at an exercise price of $1.66 per share effective as of July 15, 2019. The option vested 25% on the one (1)-year anniversary of Mr. Hazard’s start date and thereafter in equal quarterly installments ending on the four (4)-year anniversary of his start date, subject to and in accordance with the terms of our 2018 Plan. Mr. Hazard’s options, vested and unvested, expired following his resignation. The offer letter contained customary provisions relating to vacation, benefits, and confidentiality.

Effective February 28, 2022, we entered into an offer letter with D. Bradford Osborne. Mr. Osborne is not currently a “named executive officer” by virtue of the fact that he was not employed by us at any time during 2021. Pursuant to Mr. Osborne’s offer letter, he serves as our Chief Financial Officer. Pursuant to Mr. Osborne’s offer letter, he will receive an initial annual base salary of $335,000, and be eligible to participate in the Company’s performance incentive plan with his initial target bonus equal to 40% of his base salary. The Company also granted Mr. Osborne an option to purchase 83,094 shares of the Company’s common stock at an exercise price of $5.22 per share effective as of April 28, 2022. The options will vest 25% on the one (1)-year anniversary of Mr. Osborne’s start date and thereafter in equal quarterly installments ending on the four (4)-year anniversary of his start date, subject to and in accordance with the terms of our 2018 Plan. Mr. Osborne’s options will expire ten (10) years from the date of grant. In addition, the Company also granted Mr. Osborne restricted stock units for 41,906 shares of the Company’s common stock. The restricted stock units will vest 25% on the one (1)-year anniversary of Mr. Osborne’s start date, 25% on the two (2)-year anniversary of his start date, 25% on the three (3)-year anniversary of his start date, and the balance on the four (4)-year anniversary of his start date, subject to and in accordance with the terms of our 2018 Plan. The offer letter contains customary provisions relating to vacation, benefits, and confidentiality. Mr. Osborne will also be provided a relocation stipend of $10,000 to cover relocation expenses for his move to the Middle Tennessee area.

Under Mr. Osborne’s offer letter, if he is terminated without “Cause” (as defined in the offer letter) and other than as a result of his death or disability, or he resigns for “Good Reason” (as defined in the offer letter), he shall be entitled to receive a severance payment equal to the sum of (1) six (6) months of his base salary in effect on the effective date of such involuntary termination, plus (2) the greater of (x) his annual bonus for the calendar year preceding the calendar year in which such involuntary termination occurs or (y) target annual bonus for the year of such involuntary termination, which shall be paid in a lump sum on the 30^th day following such involuntary termination. Mr. Osborne may also receive his annual bonus for the year in which the involuntary termination occurs, based on actual results for such year and prorated for the period of time he provided services prior to his termination. Mr. Osborne will also be eligible for COBRA following his involuntary termination.

Non-Equity Incentive Plan Compensation

We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations for each fiscal year. In accordance with the terms of their respective employment arrangements, our executive officers are eligible to receive discretionary annual bonuses of up to a percentage of each executive’s gross base salary based on individual performance, company performance or as otherwise determined appropriate, as determined by our board of directors.

The board of directors previously approved an annual bonus for 2021 for Dr. Dillaha that was primarily based on progressing our clinical development of MELT-300 and research and development for our other pipeline products. Mr. Osborne was not eligible for a performance-based cash bonus award as he was not employed prior to December 31, 2021. No bonuses were paid for 2020 performance.

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The following table sets forth the bonus target percentage for our named executive officers for 2021 and 2022.

Name and Principal Position	2022 Bonus Target			2021 Bonus Target
Larry Dillaha, M.D.		50	%		50	%
D. Bradford Osborne		40	%		—

Equity-Based Incentive Awards

Equity-based incentive awards granted to our named executive officers are designed to align our interests and those of our stockholders with those of our employees and consultants, including our executive officers. As of the date of this prospectus, stock option awards and restricted stock units (“RSUs”) granted under the 2018 Plan were the only form of equity awards we have granted to our named executive officers (and in the case of Mr. Osborne, as a current executive officer).

We have historically used stock options as an incentive for long-term compensation to our executive officers because the stock options allow our executive officers to profit from this form of equity compensation only if our stock price increases relative to the stock option’s exercise price, which exercise price is set at the fair market value of our common stock on the date of grant. Vesting of equity awards is generally tied to each officer’s continuous service with us and serves as an additional retention measure. We may grant equity awards at such times as our board of directors determines appropriate. Our executives generally are awarded an initial grant in the form of a stock option award in connection with their commencement of employment with us. Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance.

All options are granted with an exercise price per share that is no less than the fair market value of our common stock on the date of grant of such award. Our stock option awards generally vest over a four-year period and may be subject to acceleration of vesting and exercisability under certain termination and change in control events. Certain awards under our equity incentive plans may constitute or provide for payment of “nonqualified deferred compensation” under Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. See “— Outstanding Equity Awards at Fiscal Year-End” below.

Historically, the Company has issued RSUs to its non-employee board of directors on a nearly annual basis. These RSUs will vest in equal quarterly installments over a one-year period subject to the director’s continued service, but the issuance and delivery of the shares subject to the RSUs are deferred until the director resigns or otherwise terminates his or her service to the Company.

Prior to this offering, we have granted all stock options and RSUs pursuant to the 2018 Plan. Following this offering, we will grant equity incentive awards under the terms of the 2022 Plan. The terms of our equity plans are described below under “—Equity Incentive Plans.”

Separation Arrangements

Gregory Madison resigned from his role as our Chief Executive Officer of the Company effective as of June 11, 2021. Pursuant to his employment offer letter, Mr. Madison was not eligible for any cash severance payments or other severance benefits because his employment was not terminated by the Company without “Cause” (as defined in the offer letter) and he did not resign for “Good Reason” (as defined in the offer letter). Following his resignation, Mr. Madison forfeited all unvested and vested option awards in the Company and forfeited 237,189 shares of his 2018 restricted stock award. He had no outstanding equity awards as of December 31, 2021.

Mark Hazard resigned from his role as our Chief Technical Officer of the Company effective as of May 28, 2021. Pursuant to a letter agreement, Mr. Hazard was paid a total of $247,500 in cash severance payments as a result of the separation, plus accrued salary and paid time off. In addition to his severance payments, Mr. Hazard received COBRA coverage under our healthcare plan for a nine-month period following his separation. As a condition to receiving the foregoing severance benefits, Mr. Hazard entered into a general release contained in a release agreement, which required him to return all Company property and confidential information in his possession and comply with any post-termination obligations. Following his resignation, Mr. Hazard forfeited all unvested and vested option awards in the Company. He had no outstanding equity awards as of December 31, 2021.

Other Elements of Compensation

Health and Welfare Benefits

All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability, and life insurance plans, in each case on the same basis as all of our other salaried employees.

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401(k) Plan

Our current named executive officers are eligible to participate in our 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer a portion of their salary. Deferrals are subject to the limitations of the Internal Revenue Code of 1986, or the Code, with an annual match of up to 4% of the amount deferred, subject to the limitations of the Code.

Perquisites and Other Personal Benefits

We generally do not provide perquisites or personal benefits except in limited circumstances.

Fiscal Year 2022 Executive Compensation Elements

Effective March 1, 2022, Dr. Dillaha’s base salary and target bonus will equal $460,000 and 50% of base salary, respectively, while Mr. Osborne’s base salary and target bonus will equal $335,000 and 40% of base salary, respectively.

We expect that our executive compensation program will evolve to reflect our status as a public company and market practices. In 2023, we expect that the board of directors may engage an independent compensation consultant to assist it in its evaluation of our executive compensation program and properly assess compensation levels of our executives with current market peers and trends.

Outstanding Equity Awards at Fiscal Year End

The following table summarizes the number of outstanding equity awards held by Dr. Dillaha as of December 31, 2021. Neither Mr. Madison nor Mr. Hazard had any outstanding equity awards as of December 31, 2021.

Name and Principal Position	Grant Date	Vesting Commencement Date	Number of Securities Underlying Option Award (#)			Option Exercise Price ($)(1)		Option Expiration Date		Number of Securities Underlying RSU Award (#)
Larry Dillaha, M.D.	7/15/2019	1/30/2019		—			—		—		30,120	(2)
Chief Executive Officer	11/18/2019	11/18/2019		50,000	(3)	$	1.66		11/17/2029		—
	10/5/2020	1/1/2020		25,000	(3)	$	2.41		10/4/2030		—
	10/5/2020	6/30/2020		—			—		—		42,771	(2)
	11/2/2021	6/11/2021		250,000	(3)	$	3.47		11/1/2031		—

(1)	All of the option awards listed in the table were granted with an exercise price per share that is no less than the fair market value of our common stock on the date of grant of such award, as determined in good faith by our board of directors.
(2)	100% of these shares vested quarterly over the one (1)-year period following the grant date, however, issuance of the shares have been deferred until Dr. Dillaha ceases service with the Company.
(3)	25% of the shares vest on the one (1)-year anniversary of the vesting commencement date, with the remainder of the shares vesting in twelve (12) equal quarterly installments thereafter, subject to the recipient’s continuous service through each applicable vesting date.

Equity Incentive Plans

2018 Plan

The 2018 Plan was originally adopted by our board of directors and approved by our stockholders on April 15, 2018. The 2018 Plan was amended by our board of directors on January 30, 2019, and such amendment was approved by our stockholders on the same date. Once our 2022 Plan becomes effective, no further grants will be made under our 2018 Plan. Any outstanding awards under our 2018 Plan will remain subject to the terms of the 2018 Plan and the applicable award agreements.

Plan Administration. The 2018 Plan is administered by our board of directors, which may delegate some or all of the administration of the 2018 Plan to one or more of its committees.

Awards, Eligibility, and Source of Shares. The 2018 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), RSU awards, and other stock awards to employees, directors and consultants of the Company or a Company affiliate.

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Share Reserve. 3,772,500 shares of common stock were reserved for issuance under the 2018 Plan, of which, as of December 31, 2021, 974,156 are available for future issuance. As of December 31, 2021, options to purchase 594,000 shares of common stock, at exercise prices ranging from $0.01 to $3.47 per share, or a weighted average exercise price of $2.65 per share, were outstanding under the 2018 Plan. Stock awards granted under our 2018 Plan that expire, are settled in cash, forfeited, or repurchased will again be available for grant and issuance in connection with other awards.

Stock Options and SARs. Our board of directors, in its discretion, may determine the form and terms of each option (either an ISO or a NSO) or SAR granted under the 2018 Plan. Generally, (i) no option or SAR granted under the 2018 Plan may be exercisable more than ten (10) years from the date of grant, and (ii) other than with respect to assumed or substituted awards, the exercise or strike price of each option or SAR must be at least one hundred percent (100%) of the fair market value of the common stock subject to the option or SAR on the date of grant. Our board of directors, in its discretion, may establish the vesting and exercise provisions of options or SARs granted under the 2018 Plan, as well as any repurchase conditions or rights of first refusal. A participant may generally exercise any vested options or SARs for a three (3)-month period following cessation of their service relationship with the Company.

Tax Limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an option holder during any calendar year (under all equity plans of the Company and its affiliates) may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs.

Stock Awards Other than Options and SARs. Under the 2018 Plan, our board of directors may grant RSAs, RSUs, and other stock awards in the form and containing the terms and conditions deemed appropriate by our board of directors. Such awards may be subject to vesting, forfeiture or repurchase conditions established by our board of directors.

Changes to Capital Structure. Our board of directors will adjust the classes and maximum number of securities subject to the 2018 Plan and the classes and number of securities and price per share of stock subject to outstanding stock awards as our board of directors determines to be equitably required in order to prevent dilution or enlargement of the rights of participants that would otherwise result from any merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or any similar equity restructuring transaction.

Change in Control or other Corporate Transaction. In the event of a corporate transaction or change in control, each as defined in the 2018 Plan, our board of directors may take one or more of the following actions:

● arrange for the continuation, assumption or substitution of the stock award by the surviving or acquiring entity;

● arrange for the lapse of the Company’s repurchase rights or the assignment of such rights to the surviving or acquiring entity;

● cause outstanding stock awards to vest;

● cause outstanding unvested stock awards to be canceled without consideration therefor;

● make a payment equal to the excess of (i) the value the participant would have received upon exercise immediately prior to the transaction, over (ii) the exercise price payable in connection with such exercise.

Transferability. A participant may not transfer options under the 2018 Plan other than by will, the laws of descent and distribution, or as otherwise provided under the 2018 Plan.

Plan Amendment or Termination. Our board of directors has the authority to amend the 2018 Plan in any respect that our board of directors deems necessary or advisable; provided that such amendment does not impair a participant’s rights under an outstanding stock award without such participant’s consent. Certain material amendments also require the approval of our stockholders. Our board of directors may suspend or terminate the 2018 Equity Plan at any time. Unless terminated sooner, the 2018 Plan will automatically terminate on the day before the tenth (10^th) anniversary of the date of adoption by our board of directors and approval by the Company’s stockholders.

2022 Plan

In connection with this offering, our board of directors expects to adopt, and it is anticipated that our current stockholders will approve, the 2022 Plan. The purpose of the 2022 Plan is to promote the interests of the Company and its stockholders by, among other things, (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its subsidiaries, (ii) motivating those individuals by means of incentives to achieve long-range performance goals, and (iii) linking the compensation of those individuals to the long-term interests of the Company and its stockholders. Following the adoption of the 2022 Plan by our board of directors and stockholders, no further grants of awards may be made under the 2018 Plan.

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The significant terms of the 2022 Plan are expected to be as follows:

Shares Available for Awards under the Plan. Under the 2022 Plan, awards may be made in common stock of the Company. Subject to adjustment as provided below, the maximum aggregate number of shares of common stock with respect to which awards may be granted under the 2022 Plan (the “Share Reserve”) will be               . In addition, subject to any adjustments necessary to implement any Capitalization Adjustments (as defined below), the Share Reserve will automatically increase on January 1 of each year in an amount equal to 4% of the total number of shares of common stock outstanding on December 31 of the preceding year; provided, however, that our board of directors may act prior to January 1^st of a given year to provide that the increase for such year will be a lesser number of shares of common stock.

Shares of common stock subject to an award granted under the 2022 Plan or the 2018 Plan that expire, terminate, are settled in cash or otherwise forfeited or cancelled without a delivery of shares to the participant will increase the Share Reserve to the extent of any such settlement, forfeiture, termination, expiration or cancellation. In addition, the shares underlying any awards under the 2022 Plan or 2018 Plan that are held back upon the exercise of an option or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of shares or otherwise terminated (other than by exercise or through the issuance of shares) shall be added back to the Share Reserve. The 2022 Plan also provides that the number of shares with respect to which incentive stock options may be granted shall be no more than               shares. Moreover, the 2022 Plan provides that awards may be issued in connection with a merger or acquisition involving the Company as permitted by Nasdaq Listing Rule 5635(c), and that such issuances will not reduce the Share Reserve.

With certain limitations, awards made under the 2022 Plan may be adjusted by the compensation committee to prevent dilution or enlargement of benefits or potential benefits intended to be made available under the 2022 Plan in the event of any dividend or other distribution (whether in the form of cash, shares, other securities or other property, and other than a normal cash dividend), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, equity restructuring (as defined under FASB ASC Topic 718), or other similar corporate transaction or event affecting the Company (collectively, a “Capitalization Adjustment”). In addition, 2022 Plan authorizes the compensation committee to make equitable and proportionate adjustments in the terms and conditions of awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations or accounting principles.

Eligibility and Administration. The compensation committee will administer the 2022 Plan, provided that the 2022 Plan also permits the board of directors to approve awards to non-employee directors, and the board of directors may in its sole discretion take any action designated to the compensation committee under the 2022 Plan as the board of directors may deem necessary, subject to applicable legal requirements. The 2022 Plan provides that the compensation committee will be composed of not less than two directors, each of whom will be an independent director as defined by the listing standards of Nasdaq. Subject to the terms of the 2022 Plan, the compensation committee is authorized to select participants, determine the type and number of awards to be granted, determine and later amend (subject to certain limitations) the terms and conditions of any award, interpret and specify the rules and regulations relating to the 2022 Plan, and make all other determinations which may be necessary or desirable for the administration of the 2022 Plan. Officers, employees, directors and consultants of the Company or its subsidiaries are eligible to be granted awards under the 2022 Plan.

Non-Employee Director Compensation Limit. The aggregate value of all compensation paid or granted, as applicable, to any individual for service as a non-employee director with respect to any calendar year, including equity awards granted and cash fees paid by the Company to such non-employee director, will not exceed $750,000 in value (or, in the event that any non-employee director is first appointed or elected to the board of directors during such year, $1,000,000), calculating the value of any awards granted under the 2022 Plan based on the grant date fair value of such awards for financial reporting purposes. The board of directors and/or the compensation committee may make exceptions to this applicable limit described above for individual non-employee directors in extraordinary circumstances, such as where any such non-employee director is serving on a special litigation or transactions committee of the board of directors, as the board of directors and/or the compensation committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation involving such non-employee director.

Stock Options and Stock Appreciation Rights. The compensation committee is authorized to grant stock options, including both incentive stock options, which can result in potentially favorable tax treatment to the participant, and non-qualified stock options, to participants in the 2022 Plan (except that incentive stock options may only be granted to our employees, subject to applicable requirements of the Code). The compensation committee may specify the terms of such grants subject to the terms of the 2022 Plan. The compensation committee is also authorized to grant SARs, either with or without a related option. The grant of a stock option or SAR will occur when the compensation committee by appropriate action determines to grant a participant a stock option or SAR and establishes the number of shares and exercise price of such award, or on such later date as the compensation committee may specify. The exercise price per share subject to an option or SAR is determined by the compensation committee, but may not be less than the fair market value of a share of common stock on the date of the grant, except in the case of substitute awards.

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Except in connection with any Capitalization Adjustments, the compensation committee shall not have the power to (i) amend the terms of previously granted options to reduce the option price of such options, (ii) amend the terms of previously granted SARs to reduce the grant price of such SARs, (iii) cancel such options in exchange for cash or a grant of either substitute options with a lower option price than the cancelled options, or any other award, (iv) cancel such SARs in exchange for cash or a grant of either substitute SARs with a lower grant price than the cancelled SARs or any other award, or (v) take any other action with respect to an option or SAR that would be treated as a repricing under the rules and regulations of the Nasdaq Stock Market, or any other such market or exchange as is the principal trading market for the shares, in each case without the approval of the Company’s stockholders.

The maximum term of each option or SAR, the times at which each option or SAR will be exercisable, and the provisions requiring forfeiture of unexercised options at or following termination of employment generally are fixed by the compensation committee, except that no option or SAR may have a term exceeding 10 years (provided that under certain circumstances the period of time over which an option or SAR may be exercised will be automatically extended if on the scheduled expiration date of the award exercise would violate applicable securities law, subject to certain limitations as described in the 2022 Plan). Incentive stock options that are granted to holders of more than 10% of the Company’s voting securities are subject to certain additional restrictions, including a five-year maximum term and a minimum exercise price of 110% of fair market value.

A stock option or SAR may be exercised in whole or in part at any time, with respect to whole shares only, within the period permitted thereunder for the exercise thereof. Stock options and SARs shall be exercised by written notice of intent to exercise the stock option or SAR and, with respect to options, payment in full to the Company of the amount of the option price for the number of shares with respect to which the option is then being exercised.

Restricted Shares and Restricted Share Units. The compensation committee is authorized to grant restricted shares of common stock and restricted share units. Restricted shares are shares of common stock subject to transfer restrictions as well as forfeiture upon certain terminations of employment (or other service-providing capacity) prior to the end of a restricted period or other conditions specified by the compensation committee in the award agreement. A participant granted restricted shares of common stock generally has the rights of a stockholder of the Company with respect to the restricted shares, including the right to receive dividends and the right to vote such shares; provided, however, that with respect to any dividends distributed in relation to restricted shares where restrictions have not yet lapsed, any such dividends shall be subject to the same restrictions and risk of forfeiture and shall only be paid if and to the extent the underlying shares vest.

Each restricted share unit has a value equal to the fair market value of a share of common stock on the date of grant. The compensation committee determines, in its sole discretion, the restrictions applicable to the restricted share units. Unless otherwise provided in an award agreement, a participant will not receive dividend equivalent rights in respect of any vested restricted share units at the time of any payment of dividends to stockholders on shares. In addition, except as may otherwise be provided in an award agreement, such units shall terminate, without further obligation on the part of the Company, unless the participant remains in continuous employment (or other service-providing capacity) of the Company for the restricted period and any other restrictive conditions relating to the restricted share units are met.

Performance Awards. A performance award consists of a right that is denominated in cash or shares of common stock, valued in accordance with the achievement of certain performance goals during certain performance periods as established by the compensation committee, and payable at such time and in such form as the compensation committee shall determine. Performance awards may be paid in a lump sum or in installments following the close of a performance period or on a deferred basis, as determined by the compensation committee.

The Company may grant performance awards based upon the attainment of performance targets related to performance goals selected by the compensation committee in its discretion from among the performance goals specified in the 2022 Plan, or related to any other performance goals as the compensation committee may select in its discretion.

Other Stock-Based Awards. The compensation committee is authorized to grant any other type of awards that are denominated or payable in, valued by reference to, or otherwise based on or related to shares of common stock. The compensation committee will determine the terms and conditions of such awards, consistent with the terms of the 2022 Plan.

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Non-Employee Director Awards. Subject to applicable legal requirements and the limits on compensation paid to non-employee directors as noted above, the compensation committee and/or the board of directors may provide that all or a portion of a non-employee director’s annual retainer and/or meeting fees or other awards or compensation as determined by the compensation committee and/or the board of directors be payable in non-qualified stock options, SARs, restricted shares, restricted share units and/or other stock-based awards, including unrestricted shares, either automatically or at the option of the non-employee directors. The compensation committee and/or the board of directors will determine the terms and conditions of any such awards, including those that apply upon the termination of a non-employee director’s service as a member of the board of directors.

Change in Control. Unless otherwise provided by the compensation committee, or in an award agreement or by a written agreement between the Company and a participant, in the event of any change in control of the Company, any surviving or acquiring entity may assume awards under the 2022 Plan in connection with any change in control (as defined in the 2022 Plan) as may be approved by the board of directors or compensation committee. In the event of any such assumption, if, within one year following a change in control, a participant separates from service with the Company (or its successor) by reason of (a) death; (b) total disability; (c) normal retirement or early retirement; (d) for good reason by the participant; or (e) involuntary termination by the Company for any reason other than for cause, all outstanding awards of such participant shall vest, become immediately exercisable and payable and have all restrictions lifted.

The compensation committee may, in its discretion, provide in any award agreement or, in the event of a change in control, may take such actions as it deems appropriate to provide, for the acceleration of the exercisability, vesting and/or settlement in connection with such change in control of each or any outstanding award or portion thereof and shares acquired pursuant thereto upon such conditions (if any), including termination of the participant’s service prior to, upon, or following such change in control, to such extent as the compensation committee may determine or the award agreement may provide. In the event of a change in control, and without the consent of any participant, the compensation committee may, in its discretion, provide that for a period prior to the change in control as determined by the compensation committee, any options or stock appreciation rights shall be exercisable as to all shares subject thereto and that upon the occurrence of the change in control, such stock options or stock appreciation rights shall terminate and be of no further force and effect.

The compensation committee may, in its discretion and without the consent of any participant, determine that, upon the occurrence of a change in control, each or any award or a portion thereof outstanding immediately prior to the change in control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each vested share (and each unvested share, if so determined by the compensation committee) subject to such canceled award in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the change in control, or (iii) other property which, in any such case, shall be in an amount having a fair market value equal to the fair market value of the consideration to be paid per share in the change in control, reduced by the exercise or purchase price per share, if any, under such award (which payment may, for the avoidance of doubt, be $0, in the event the per share exercise or purchase price of an award is greater than the per share consideration in connection with the change in control).

Amendment and Termination. The board of directors may amend, alter, suspend, discontinue or terminate the 2022 Plan or any portion of the 2022 Plan at any time, except that stockholder approval must be obtained for any such action if such approval is necessary to comply with any tax or regulatory requirement (including, without limitation, the rules of the Nasdaq Stock Market, or any other such market or exchange as is the principal trading market for the Company’s common stock) with which the board of directors deems it desirable or necessary to comply. The 2022 Plan provides that the compensation committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any award, either prospectively or retroactively; provided, however, that any such waiver, amendment, alternation, suspension discontinuance, cancellation or termination that would materially and adversely affect the rights of any participant shall not to that extent be effective without the consent of such participant.

Forfeiture Events. Any award granted pursuant to the 2022 Plan shall be subject to mandatory repayment or surrender by the participant to the Company (i) to the extent set forth in any award agreement, (ii) to the extent that such participant becomes, subject to any “clawback” or recoupment policy adopted by the Company or any affiliate thereof, including any such policy or amended policy adopted by the Company to comply with the requirements of any applicable laws, rules or regulations, including pursuant to final SEC rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act or (iii) to the extent provided under any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws, including the Sarbanes-Oxley Act of 2002.

Limited Transferability. Except as otherwise provided in the 2022 Plan or any award agreement, or by the compensation committee, no award shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a participant, except by will or the laws of descent and distribution. In addition, the 2022 Plan provides that in no event will any transfer of an award for value be permitted under the 2022 Plan.

Dividend Equivalents. Except in connection with any Capitalization Adjustments, no dividend equivalent rights shall be granted with respect to stock options or SARs, but in the sole and complete discretion of the compensation committee, an award (other than options or SARs) may provide the participant with dividends or dividend equivalents; provided, however, that no dividends or dividend equivalents will be paid under the 2022 Plan in respect of awards to the extent that restrictions have not yet lapsed or to the extent that such awards remain subject to vesting, and any such dividends or dividend equivalents shall be subject to the same restrictions and risk of forfeiture as the award to which they relate, and shall be paid only if and to the extent that the underlying awards vest.

Effective Date. It is anticipated that the 2022 Plan will be effective as of the business day prior to the date on which the Company’s Registration Statement on Form S-1 becomes effective. The 2022 Plan provides that no awards may be made under the 2022 Plan after the tenth anniversary of the effective date.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The agreements described in this section, or forms of such agreements as they will be in effect at the time of this offering, are filed as exhibits to the registration statement of which this prospectus forms a part, and the following descriptions are qualified by reference thereto.

Harrow Health, Inc.

We were formed as an indirect subsidiary of Harrow in April 2018. Following the closing of our Series A Preferred Stock financing (as described in further detail under “Private Placements of Our Securities–Series A Preferred Stock Financing” below), Harrow lost voting and ownership control over us but remained an owner of 3,500,000 shares of our common stock (which is approximately 45.6% of the outstanding shares of our common stock and Series A Preferred Stock as of December 31, 2021).

Asset Purchase Agreement with Harrow

On December 11, 2018, we entered into the Harrow Asset Purchase Agreement with Harrow, pursuant to which we acquired the patents and certain other intellectual property and related rights from Harrow to develop, formulate, make, sell, and sublicense certain conscious sedation and analgesia related formulations, including our leading product candidate MELT-300 (collectively, the “Melt Products”). Under the terms of the Harrow Asset Purchase Agreement, we granted to Harrow an exclusive, royalty-free, worldwide license with respect to the Melt Products for sole use with respect to drug products compounded or manufactured in compounding pharmacies or outsourcing facilities. We are required to make royalty payments to Harrow of 8% of net receipts received by us in connection with the sale or licensing of any product based upon the acquired patents and other intellectual property rights, while any patent rights remain outstanding, as well as other conditions. The amount of such royalty payments may be reduced by any fees or charges payable to OHSO, which is an affiliate of Dr. John Berdahl, a member of our board of directors and one of the co-inventors of the Melt technology (or by fifty percent (50%) of any other similar payments to other third parties) for the manufacture, use, sale, offer for sale or import of any Melt Products, except that the royalties payable to Harrow may not be reduced to less than 5% of net sales with respect to any sales or licenses in a country in which the acquired intellectual property rights would be infringed by such sales or licenses, among other limitations. We can require Harrow to cease compounding like products at the time of FDA approval of MELT-300. During the six months ended June 30, 2022 and 2021 and the years ended December 31, 2021 and 2020, we did not pay any royalties and no amounts were due to Harrow under the Harrow Asset Purchase Agreement.

Management Services Agreement with Harrow Health, Inc.

On February 1, 2019, in connection with the Series A Preferred Stock financing, as described under “Private Placements of Our Securities–Series A Preferred Stock Financing” below, we entered into a Management Services Agreement (the “Harrow MSA”) with Harrow, whereby Harrow agreed to provide to us certain administrative services and support, including bookkeeping, web services and human resources related activities, in exchange for which we agreed to reimburse Harrow’s out-of-pocket expenses related to such services and a monthly fee of approximately $10,000. Either party has the right to terminate the Harrow MSA at any time for any reason upon ten (10) days’ written notice. For the years ended December 31, 2021 and 2020, we did not pay any amounts to Harrow for reimbursable expenses and other amounts payable under the Harrow MSA. During the year ended December 31, 2021, $907,914 of accrued expenses payable to Harrow were converted into the note payable due to Harrow. As of June 30, 2022 and December 31, 2021, we owed $108,359 and $39,359, respectively, to Harrow for reimbursable expenses and other amounts payable under the Harrow MSA.

Loan and Security Agreement with Harrow Health, Inc.

On September 1, 2021, we entered into the Harrow Loan Agreement with Harrow in the principal amount of $13.5 million. Amounts borrowed under the Harrow Loan Agreement bear interest at twelve and one-half percent (12.50%) per annum, which interest can be paid in-kind at our option until the maturity date. The Harrow Loan Agreement permits us to pay interest only on the principal amount loaned thereunder through the term and all amounts owed were to be due and payable on September 1, 2022. We could have elected to prepay all, but not less than all, of the amounts owed prior to the maturity date at any time without penalty. The net funds that we received under the Harrow Loan Agreement excluded $907,914 for amounts owed to Harrow for reimbursable expenses and amounts due under the Harrow MSA prior to the effective date of Harrow Loan Agreement. We anticipate that $10,000,000 of the principal amount of under the Harrow Loan Agreement will be settled in exchange for      shares of our common stock upon the consummation of this offering at an assumed initial public offering price of $       per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount.

In connection with the Harrow Loan Agreement, we have also granted to Harrow a security interest in substantially all of our personal property, rights and assets, including intellectual property rights, to secure the payment of all amounts owed under the Harrow Loan Agreement. The Harrow Loan Agreement contains customary representations, warranties and covenants, including covenants by us limiting additional indebtedness, liens, mergers and acquisitions, dispositions, investments, distributions, subordinated debt, and transactions with affiliates. The Harrow Loan Agreement includes customary events of default, and upon the occurrence of an event of default (subject to cure periods for certain events of default), all amounts owed by us thereunder may be declared immediately due and payable by Harrow, and the interest rate on the loan may be increased by three percent (3%) per annum.

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In connection with the Harrow Loan Agreement, we entered into a Right of First Refusal Agreement with Harrow, pursuant to which Harrow has the right, but not the obligation, to match any offer that we may receive associated with the commercial rights to any of our product candidates for a period of five (5) years following the effective date of the Harrow Loan Agreement.

During the six months ended June 30, 2022 and the year ended December 31, 2021, we recognized $908,127 and $573,965, respectively, in interest expense in connection with amounts payable to Harrow pursuant to the Harrow Loan Agreement.

On April 8, 2022, we entered into the First Harrow Loan Agreement Amendment that would have, among other things, (i) extended the maturity date of the loan through September 1, 2026 and (ii) added certain financial covenants requiring us to maintain minimum liquidity. The Harrow Loan Agreement also requires us to maintain at least $7,000,000 at all times during the period beginning on the date of the closing of this offering, and ending on the date that is one (1) year thereafter (the “Liquidity Adjustment Date”), and $5,000,000 at all times after the Liquidity Adjustment Date and continuing until maturity, and revised the definition of “Material Adverse Event” relating to an unsuccessful phase 2 study for MELT-300. The effectiveness of the First Harrow Loan Agreement Amendment and the amendments therein, however, was subject to our satisfaction of certain conditions precedent, which included the consummation of this offering no later than August 31, 2022 (or such later date as Harrow may agree in its discretion). Since this offering was not completed on or prior to August 31, 2022, this condition was not satisfied such that the First Harrow Loan Agreement Amendment did not become effective, and amounts outstanding under the Harrow Loan Agreement were due and payable by us on September 1, 2022.

In September 2022, we entered into the Second Harrow Loan Agreement Amendment to, among other things, (i) extend the maturity date of the loan through June 1, 2023, (ii) waive the existing event of default related to our failure to pay the loan in full on September 1, 2022 and (iii) extend the date by which we can consummate this offering to May 31, 2023. The abovementioned amendments in the Second Harrow Loan Agreement Amendment were effective as of September 21, 2022. Upon the consummation of this offering, the amendments initially included in the First Harrow Loan Agreement Amendment and restated in the Second Harrow Loan Agreement Amendment, will be effective, including the amendment to extend the maturity date of the loan through September 1, 2026.

Royalty Agreement with OHSO, LLC

On October 3, 2019, we entered into a royalty agreement (the “OHSO Royalty Agreement”) with OHSO. The OHSO Royalty Agreement requires us to make quarterly royalty payments to OHSO equal to three percent (3%) of the aggregate amount of net sales and net licensing revenues received by us in connection with the sale or licensing of any product based upon the patents and other intellectual property and related rights acquired by OHSO from Harrow pursuant to an amended and restated asset purchase agreement entered into as of October 3, 2019, while any patent rights remain outstanding, as well as other conditions. The amount of such royalty will be reduced by one-half (1/2) with respect to any sales or licenses in a country in which the acquired intellectual property rights would not be infringed by such sales or licenses. The amount of such royalty payments may be further reduced by fifty percent (50%) of any royalties payable by us to other third parties for the manufacture, use, sale, offer for sale or import of any such products, subject to certain limitations. The OHSO Royalty Agreement will continue until expiration of all payment obligations thereunder. During the six months ended June 30, 2022 and 2021 and years ended December 31, 2021 and 2020, we did not pay any royalties and no amounts are due to OHSO under the OHSO Royalty Agreement.

Private Placements of Our Securities

Series A Preferred Stock Financing

On January 30, 2019, we entered into a stock purchase agreement (the “Series A Preferred Stock Purchase Agreement”) with certain investors, including Dr. Richard Lindstrom, a current member of the Harrow board of directors, and Dr. Robert Kammer, a former member of the Harrow board of directors, and TJB Ventures, LLC, a South Dakota limited liability company wholly-owned by Dr. John Berdahl, one of our directors, pursuant to which we issued and sold an aggregate of 2,287,000 shares of our Series A Preferred Stock to such investors at a purchase price of $5.00 per share for aggregate proceeds of approximately $11.4 million.

The table below sets forth the aggregate number of shares of Series A Preferred Stock issued to our related parties in this financing:

	Shares of Series A Preferred Stock
Name	Number of Shares		Aggregate Purchase Price ($)
Richard Lindstrom, M.D.		20,000		100,000
Robert Kammer, M.D.		50,000		250,000
John Berdahl, M.D.		10,000		50,000
Total		70,000		350,000

In connection with the closing of the transactions contemplated by the Series A Preferred Stock Purchase Agreement, we entered into a registration rights agreement with the investors party to the Series A Preferred Stock Purchase Agreement, pursuant to which we granted to these investors demand registration, piggyback registration and shelf registration rights related to any shares of our common stock issued or issuable to such investors upon conversion of their Series A Preferred Stock or otherwise received by such investors as a dividend or other distribution with respect to their Series A Preferred Stock. These registration rights will terminate upon the earlier of the date that is three (3) years following an initial public offering that results in the conversion of all outstanding shares of our Series A Preferred Stock or, with respect to a particular holder of Series A Preferred Stock, such holder holds less than one percent (1%) of the outstanding shares of our common stock, we have completed our initial public offering and all shares of such holder subject to such registration rights under the Series A Preferred Stock Purchase Agreement may be sold pursuant to Rule 144 of the Securities Act during any ninety (90)-day period. We intend to enter into an amendment to the registration rights agreement with the holders of our existing Series A Preferred Stock, to be effective as of the closing of this offering, the purpose of which is the approve our entry into the Harrow Registration Rights Agreement (as defined below) and the underwriter’s warrant and to grant certain piggyback registration rights thereunder. The approval of the holders of our existing Series A Preferred Stock is required before we may enter into any agreement that would grant the right to demand the registration of shares of the our capital stock or include such shares in a registration statement to another holder of our capital stock that would reduce the number of shares includable by the holders of our existing Series A Preferred Stock.

Board Advisor and Consultant

Effective upon his resignation from the board of directors in November 2021, the Company retained Mark Baum to serve as an advisor and consultant to the board of directors. In connection therewith, Mr. Baum attends meetings of the board of directors in a nonvoting observer capacity and is paid $50,000 per year for such services, payable in four, equal quarterly installments. Upon the effectiveness of the registration statement of which this prospectus forms a part, such arrangement shall be terminated and Mr. Baum will be re-appointed as a director of the Company.

Indemnification Agreements

Our amended and restated certificate of incorporation that will be in effect upon the closing of this offering will contain provisions limiting the liability of directors. In addition, our amended and restated certificate of incorporation will provide, and our bylaws provide, that we will indemnify each of our directors to the fullest extent permitted under the DGCL, subject to certain parameters set forth therein. Our amended and restated certificate of incorporation and bylaws will also provide our board of directors with discretion to indemnify our officers and employees when determined appropriate by the board.

In addition, we expect to enter into indemnification agreements with each of our executive officers and directors prior to the closing of this offering. For more information regarding these agreements, see “Management—Limitations on Director and Officer Liability and Indemnification.”

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding beneficial ownership of our capital stock by:

● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;

● each of our directors and director nominees;

● each of our named executive officers; and

● all of our current executive officers and directors as a group.

We have determined beneficial ownership in accordance with the rules of the SEC. Under these rules, beneficial ownership includes any shares of common stock as to which the individual or entity has sole or shared voting power or investment power. Applicable percentage ownership is based on shares of common stock outstanding as of July 31, 2022, after giving effect to the (i) the conversion of 2,287,000 shares of our Series A Preferred Stock outstanding as of July 31, 2022 into 2,287,000 shares of our common stock upon completion of this offering; (ii) the conversion of unpaid dividends on our Series A Preferred Stock of approximately $             into             shares of common stock upon the closing of this offering, based on the initial public offering price, which is the midpoint of the price range listed on the cover page of this prospectus; and (iii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for shares of common stock, which we intend to consummate upon the closing of this offering, at an assumed initial public offering price of $       per share, which is the midpoint of the price range listed on the cover page of this prospectus, net of any underwriting discount. In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, shares of common stock subject to options held by such person that are currently exercisable or will become exercisable within 60 days of July 31, 2022 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

Unless noted otherwise, the address of all listed stockholders is c/o Melt Pharmaceuticals, Inc., 6 Cadillac Drive, Suite 320, Brentwood, Tennessee 37027.

Except as indicated by the footnotes below, we believe, based on information furnished to us, that each of the stockholders listed has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.

Name of Beneficial Owner	Shares Beneficially Owned			Percentage of Shares Beneficially Owned Before this Offering	Percentage of Shares Beneficially Owned After this Offering
Directors, Director Nominees and Named Executive Officers:
Allison Bauerlein		—
Mark Baum		797,891	(1)
John Berdahl, M.D.		112,060	(2)
J. Andy Corley		60,240
Larry Dillaha, M.D.		201,013	(3)
Mark Hazard		—
Arthur Laffer		—
Gregory P. Madison		395,311
Herman Williams		—
All directors and current executive officers as a group (8 persons)		1,171,204
5% Stockholders:
Andrew R. Boll		405,120	(4)
Harrow Health, Inc.			(5)
Opaleye, L.P.		800,000	(6)

*	Represents beneficial ownership of less than one percent.
(1)	Mr. Baum serves as chief executive officer and a director of Harrow, which holds 3,500,000 shares of common stock. Mr. Baum disclaims beneficial ownership of such shares held by Harrow.
(2)	Includes 29,169 shares of common stock subject to options that are presently exercisable or exercisable within 60 days of July 31, 2022. Also includes 10,000 shares of common stock issuable upon conversion of Series A Preferred Stock held by TJB Ventures, LLC, a South Dakota limited liability company, an entity which is wholly-owned by Dr. Berdahl.
(3)	Includes 128,122 shares of common stock subject to options that are presently exercisable or exercisable within 60 days of July 31, 2022.
(4)	Mr. Boll’s address is 102 Woodmont Blvd., Suite 610, Nashville, Tennessee 37205. Includes 12,500 shares of common stock subject to options that are presently exercisable or exercisable within 60 days of July 31, 2022. Mr. Boll also serves as chief financial officer of Harrow, which holds 3,500,000 shares of common stock. Mr. Boll disclaims beneficial ownership of such shares held by Harrow.
(5)	The principal business address of Harrow is 102 Woodmont Blvd., Suite 610, Nashville, Tennessee 37205. Mr. Baum beneficially owns 797,891 shares of common stock and Mr. Boll beneficially owns 405,120 shares of common stock. Harrow disclaims beneficial ownership of such shares held by each of Messrs. Baum and Boll.
(6)	Opaleye, L.P. reports shared voting and dispositive power as to 800,000 shares. Opaleye Management Inc. is an investment manager of Opaleye, L.P., and Mr. James Silverman is the President of Opaleye Management Inc. Mr. Silverman shares voting and dispositive power with respect to the shares held by Opaleye, L.P. Each of the entities and persons listed above disclaims beneficial ownership of the shares reported herein except to the extent of its or his pecuniary interest therein. The address for each of the entities and persons listed above is One Boston Place, 26th Floor, Boston, MA 02108, Attention James Silverman.

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DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock, certain provisions of our amended and restated certificate of incorporation and bylaws, as each will be in effect following the completion of this offering, and certain provisions of Delaware law are summaries. You should also refer to our amended and restated certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus is part.

General

Upon the completion of this offering, our amended and restated certificate of incorporation will authorize us to issue up to                 shares of common stock, $0.001 par value per share, and shares                  of preferred stock, $0.001 par value per share, all of which shares of preferred stock will be undesignated. Our board of directors may establish the rights and preferences of the preferred stock from time to time.

As of June 30, 2022, we had outstanding 5,395,311 shares of common stock, held by six stockholders of record, and 2,287,000 shares of preferred stock designated as “Series A Preferred Stock” (the “Series A Preferred Stock”), held by 166 stockholders of record. As of June 30, 2022, after giving effect to (i) the conversion of all of the outstanding shares of our Series A Preferred Stock (but excluding the unpaid dividends on our Series A Preferred Stock of approximately $                 that will be issued as                  shares of common stock upon the closing of this offering) and (ii) the settlement of $10,000,000 principal amount of indebtedness under the Harrow Loan Agreement in exchange for      shares of common stock, which we intend to consummate upon the closing of this offering, in each case based on the initial public offering price (but with respect to the settlement of Harrow’s note, net of any underwriting discount), there would have been              shares of common stock issued and outstanding, held by 172 stockholders of record.

Common Stock

Voting Rights

Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Stockholders do not have the ability to cumulate votes for the election of directors. The affirmative vote of holders of at least a majority of the voting power of all of the then-outstanding shares of capital stock will be required to amend our amended and restated certificate of incorporation.

Dividends

Subject to preferences that may be applicable to any then-outstanding preferred stock, the holders of outstanding shares of our common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds and only then at the times and in the amounts that our board of directors may determine.

Liquidation

In the event of our liquidation, dissolution or winding up, the holders of our outstanding shares of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our outstanding debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

Other Rights and Preferences

Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the right of the holders of shares of any series of preferred stock that we may designate in the future.

Preferred Stock

As of June 30, 2022, there were 2,287,000 outstanding shares of our Series A Preferred Stock. All currently outstanding shares of the Series A Preferred Stock, including unpaid dividends of approximately $               as of                  , 2022, will be converted into an aggregate of               shares of common stock upon the closing of this offering.

Prior to the consummation of this offering, we and the holders of the Series A Preferred Stock agreed that, in connection with the conversion of the Series A Preferred Stock upon the closing of this offering, in accordance with the terms of our amended and restated certificate of incorporation that is currently in effect, the 6% dividend payable on each outstanding shares of Series A Preferred Stock will be paid in shares of common stock, and that such dividend will be fully cumulative, but will not accrue interest or compound, from the date of first issuance.

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Following the closing of this offering, our board of directors will have the authority under our amended and restated certificate of incorporation, without further action by our stockholders, to issue up to                 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of us and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock.

We have no present plans to issue any shares of preferred stock following the completion of this offering.

Options and Restricted Stock Units

As of June 30, 2022, there were options to purchase an aggregate of 677,094 shares of common stock and restricted stock unit awards covering an aggregate of 379,673 shares of common stock outstanding under our 2018 Plan. For additional information regarding the terms of our 2018 Plan, and the 2022 Plan which will be adopted upon the closing of this offering, see “Executive Compensation—Equity Incentive Plans.”

Warrants

In June 2019, in connection with our private placement of Series A Preferred Stock, we also agreed to issue warrants to certain placement agents in connection with their services related to such private placement. The warrants originally provided for the purchase of an aggregate of 68,010 shares of our Series A Preferred Stock at an exercise price of $5.00 per share at any time prior to 5 p.m., Pacific Time, on June 5, 2024.

Effective April 6, 2022, we and the holders of warrants amended each of the warrants so that the warrants became exercisable for shares of common stock rather than shares of Series A Preferred Stock. Immediately prior to the consummation of this offering, the warrants, as amended, are exercisable for an aggregate 68,010 shares of common stock at an exercise price of $5.00 per share, and expire on June 5, 2024. In accordance with the terms of the warrants, as amended, the number of shares of common stock and the exercise price of each warrant will be adjusted based on the number of shares of common stock and public offering price per share in this offering.

Registration Rights

We and the holders of our existing Series A Preferred Stock entered into a registration rights agreement (the “Series A Registration Rights Agreement”) in connection with the Series A Preferred Stock financing. The Series A Registration Rights Agreement provides those holders with demand, piggyback and Form S-3 registration rights with respect to the shares of common stock issuable to them upon conversion of the Series A Preferred Stock in connection with our initial public offering. These shares are collectively referred to herein as registrable securities. In addition, the holders of the warrants are entitled to piggyback and Form S-3 registration rights as set forth in the Series A Registration Rights Agreement with respect to the shares of common stock issuable upon the automatic exercise of the warrants in connection with our initial public offering. Accordingly, any reference to the registrable securities includes such shares issuable to the warrant holders in relation to the piggyback and Form S-3 registration rights only.

The holders of registrable securities have waived the registration rights that such holders may have under the Series A Registration Rights Agreement in connection with this offering, including the right to include any registrable securities in this registration statement, and have agreed not to exercise any demand registration rights that such holder of registrable securities possesses pursuant to the Series A Registration Rights Agreement for a period of at least 365 days after the consummation of this offering.

Effective immediately prior the completion of this offering, we intend to enter into an amended and restated version of the Series A Registration Rights Agreement with the holders of our existing Series A Preferred Stock, to be effective as of the closing of this offering (the “Amended Series A Registration Rights Agreement”). The purpose of the Amended Series A Registration Rights Agreement would be to approve our entry into the Harrow Registration Rights Agreement (as defined below) and the grant of registration rights pursuant to the underwriter’s warrant and to make certain corresponding revisions to the Series A Registration Rights Agreement to accommodate the grant of such registration rights, as well as to make certain other revisions to the Series A Registration Rights Agreement.

We also intend to enter into a registration rights agreement with Harrow, to be effective immediately prior to the completion of the closing of this offering (the “Harrow Registration Rights Agreement”). It is contemplated that the Harrow Registration Rights Agreement would provide Harrow with demand, piggyback and Form S-3 registration rights with respect to the shares of common stock held by Harrow as summarized below. These shares are collectively referred to herein as registrable securities.

Demand Registration Rights

Under the terms of the Amended Series A Registration Rights Agreement, it is contemplated that, at any time one year following the effective date of the registration statement of which this prospectus is a part, major holders (as defined in the Amended Series A Registration Rights Agreement) of a majority of registrable securities then outstanding and held by such holders would have the right to demand that we file a registration statement covering at least a majority of the registrable securities then outstanding. We would be obligated to effect at most two registrations in response to these demand registration rights. These demand registration rights would be subject to specified conditions and limitations, including the right of the underwriters, if any, to limit the number of securities included in any such registration under specified circumstances. Upon such a request, we would be required to effect the registration as soon as possible. Moreover, under the terms of the Amended Series A Registration Rights Agreement, we would be permitted to postpone the filing of a registration statement for up to 120 days once in a 12-month period if in the good faith judgment of our board of directors such registration would be seriously detrimental to us.  

Under the Harrow Registration Rights Agreement, it is contemplated that Harrow would have the right to demand that we file a resignation statement covering at least a majority of the registrable securities held by Harrow then outstanding. We would be obligated to effect at most two registrations in response to these demand registration rights. These demand registration rights would be subject to specified conditions and limitations, including the right of the underwriters, if any, to limit the number of securities included in any such registration under specified circumstances. Upon such a request, we would be required to effect the registration as soon as possible. Moreover, under the terms of the Harrow Registration Rights Agreement, we would be permitted to postpone the filing of a registration statement for up to 120 days once in a 12-month period if in the good faith judgment of any of our unauthorized officers such registration would be seriously detrimental to us.

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Piggyback Registration Rights

In connection with this offering, the holders of registrable securities, including the Warrant holders, were entitled to under the terms of the Series A Registration Rights Agreement, and the necessary percentage of such holders waived, their rights to notice of this offering and to include their shares of registrable securities in this offering. After this offering, under the terms of the Amended Series A Registration Rights Agreement, in the event that we propose to register any of our securities under the Securities Act either for our own account or for the account of other stockholders (including in connection with the exercise of demand registration rights under the Harrow Registration Rights Agreement, as set forth above), the holders of registrable securities under such agreement would be each be entitled to notice of such registration and would be entitled to include in the registration statement all or part of such holder’s registrable securities. These piggyback registration rights would be subject to specified conditions and limitations, including the right of the underwriters to limit the number of securities included in any such registration under specified circumstances, and do not apply to a registration relating to any employee benefit plan, a corporate reorganization or transaction under Rule 145 of the Securities Act or a registration related to common stock issued upon conversion of debt securities.

Pursuant to the Harrow Registration Rights Agreement, it is contemplated that, in the event that we propose to register any of our securities under the Securities Act either for our own account or for the account of other stockholders (including in connection with the exercise of demand registration rights under the Amended Series A Registration Rights Agreement, as set forth above), Harrow would be entitled to notice of such registration and would be entitled to include in the registration statement all or part of Harrow’s registrable securities. These piggyback registration rights would be subject to specified conditions and limitations, including the right of the underwriters to limit the number of securities included in any such registration under specified circumstances, and do not apply to a registration relating to any employee benefit plan, a corporate reorganization or transaction under Rule 145 of the Securities Act or a registration related to common stock issued upon conversion of debt securities.

Under the underwriter’s warrant, which we have agreed to issue to Aegis or its designees pursuant to this offering, in the event we propose to register any of our common stock under the Securities Act in an underwritten offering either for our own account or for the account of other stockholders (including in connection with the exercise of demand registration rights under the Series A Registration Rights Agreement and the Harrow Registration Rights Agreement, as set forth above), the underwriter would be entitled to notice of such registration and would be entitled to include in the registration statement all or part of the underwriter’s registrable securities. These piggyback registration rights would be subject to specified conditions and limitations, including the right of the underwriters to limit the number of securities included in any such registration under specified circumstances, and do not apply to a registration relating to any employee benefit plan, a corporate reorganization or transaction under Rule 145 of the Securities Act, a registration statement on Form S-4, S-8 or any successor form thereto, or to registration statement to which this prospectus is a part.

Registration on Form S-3

At any time from and after the first anniversary of the effective date of the registration statement of which this prospectus is a part, under the terms of the Amended Series A Registration Rights Agreement, it is contemplated that one or more holders of registrable securities holding at least 20% of the registrable securities then outstanding would be entitled to request to have such shares registered by us on a Form S-3 registration statement. Under the terms of the Amended Series A Registration Rights Agreement, it is contemplated that these Form S-3 registration rights would be subject to other specified conditions and limitations, including that the Form S-3 is available for such offering by the holders and that the anticipated aggregate offering price is at least $2.0 million. Moreover, upon receipt of this request, the holders of registrable securities would each be entitled to participate in this registration. Under the terms of the Amended Series A Registration Rights Agreement, it is contemplated that we would not be required to effect such a registration if, within the preceding 12-month period, we had already effected two registrations on Form S-3 for the holders of registrable securities. Under the terms of the Amended Series A Registration Rights Agreement, we would also be permitted to postpone the filing of a registration statement for up to 120 days once in a 12-month period if in the good faith judgment of our board of directors such registration would be seriously detrimental to us. Moreover, pursuant to the Amended Series A Registration Rights Agreement, it is contemplated that we would be permitted to postpone the filing of a registration statement for up to 120 days once in a 12-month period if in the good faith judgment of any of our unauthorized officers such registration would be seriously detrimental to us.

Pursuant to the Harrow Registration Rights Agreement, at any time from and after the first anniversary of the effective date of the registration statement of which this prospectus is a part, it is contemplated that Harrow would be entitled to request to have its shares registered by us on a Form S-3 registration statement. These Form S-3 registration rights would be subject to other specified conditions and limitations, including that the Form S-3 is available for such offering by Harrow and that the anticipated aggregate offering price is at least $2.0 million. Upon receipt of this request, Harrow would be entitled to participate in this registration. In addition, under the terms of the Harrow Registration Rights Agreement, it is contemplated that we would not be required to effect such a registration if, within the preceding 12-month period, we have already effected two registrations on Form S-3 for the holders of registrable securities. Moreover, under the terms of such agreement, it is contemplated that we also would be permitted to postpone the filing of a registration statement for up to 120 days once in a 12-month period if in the good faith judgment of any of our unauthorized officers such registration would be seriously detrimental to us.

Expenses of Registration

Under each of the Amended Series A Registration Rights Agreement and the Harrow Registration Rights Agreement, it is contemplated that we would be required to pay all expenses incurred by us, including reasonable fees and disbursements not to exceed $25,000 of a single counsel for the selling holders relating to any demand, piggyback or Form S-3 registration, other than underwriting discounts and selling commissions applicable to the offering, subject to specified conditions and limitations. Under the terms of such agreements, it is contemplated that we would not be required to pay registration expenses if a demand or Form S-3 registration request were withdrawn at the request of the initiating holders, unless holders of a majority of the registrable securities agree to forfeit their right to one demand registration or the withdrawal is based upon material adverse information concerning us of which the initiating holders were not aware at the time of such request.

It is contemplated that each of the Amended Series A Registration Rights Agreement and the Harrow Registration Rights Agreement would contain customary cross-indemnification provisions, pursuant to which we would be obligated to indemnify the selling stockholders in the event of untrue statements or omissions of material facts in the applicable registration statement or any violation of federal or state securities laws by us in connection with the offering under a registration statement covering the registrable securities, and the selling stockholders would be obligated to indemnify us for untrue statements or omissions of material facts in the registration statement or any violation by us of the Securities Act attributable to them, subject to certain limitations.

Termination of Registration Rights

Under the Amended Series A Registration Rights Agreement, it is contemplated that the registration rights granted there under would terminate with respect to any particular stockholder upon the earlier of (i) the third anniversary following the closing of this offering; (ii) the first date on which all registrable securities such holder would be able to sell all of its shares pursuant to Rule 144 or another similar exemption under the Securities Act during a three-month period without registration; or (iii) the consummation of any company sale (as defined in the Amended Series A Registration Rights Agreement), subject to certain limitations specified in the Amended Series A Registration Rights Agreement.

Under the Harrow Registration Rights Agreement, it is contemplated that the registration rights granted thereunder would terminate upon the earlier of (i) the fifth anniversary following the closing of this offering; (ii) the first date on which all registrable securities such Holder is able to sell all of its shares pursuant to Rule 144 or another similar exemption under the Securities Act during a three-month period without registration; or (iii) the consummation of any company sale (as defined in the Harrow Registration Rights Agreement), subject to certain limitations specified in the Harrow Registration Rights Agreement.

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Anti-Takeover Provisions

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 of the DGCL, which prohibits a publicly held Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

● before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

● upon completion of the transaction that 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 began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (i) by persons who are directors and also officers and (ii) 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 after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66²/₃% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines a “business combination” to include the following:

● any merger or consolidation involving the corporation or any direct or indirect majority-owned subsidiary of the corporation and the interested stockholder;

● any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder (in one transaction or a series of transactions);

● subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation or by any direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested stockholder;

● any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

● the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.

In general, Section 203 defines an “interested stockholder” as:

● the owner of 15% of more of the outstanding voting stock of the corporation; or;

● any affiliate or associate of the corporation who was the owner of 15% or more of our outstanding voting stock at any time within the prior three years;

in each of the foregoing cases, including the affiliates and associates of such person.

Amended and Restated Certificate of Incorporation and Bylaws

Our amended and restated certificate of incorporation to be in effect upon the completion of this offering will provide that our board of directors will be elected at each annual meeting of our stockholders. Furthermore, the authorized number of directors may be changed only by resolution of the board of directors, and vacancies and newly created directorships on the board of directors may only be filled by a majority vote of the directors then serving on the board, even though less than a quorum.

Under our amended and restated certificate of incorporation and bylaws our stockholders will not have cumulative voting rights. Because of this, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.

Our amended and restated certificate of incorporation will also provide that all stockholder actions must be effected at a duly called meeting of stockholders and will eliminate the right of stockholders to act by written consent without a meeting. Our amended and restated certificate of incorporation will also provide, and our bylaws provide, that only our Chairman of the board, Chief Executive Officer or the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors may call a special meeting of stockholders (such that our stockholders will not have the ability to call a special meeting of stockholders).

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Our bylaws also provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely advance notice in writing, and will specify requirements as to the form and content of a stockholder’s notice.

As described in “—Preferred Stock” above, our amended and restated certificate of incorporation will give our board of directors the authority, without further action by our stockholders, to issue up to                 shares of preferred stock in one or more series, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change in control.

The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly, unsolicited or coercive proposal to acquire or restructure our Company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

Choice of Forum

Our amended and restated certificate of incorporation to be in effect upon the completion of this offering will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the state of Delaware will be the exclusive forum for the following types of actions or proceedings:

● any derivative action or proceeding brought on our behalf under Delaware law;

● any action asserting a breach of fiduciary duty owed by any of our directors, officers, employees or stockholders to us or our stockholders;

● any action arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our bylaws, or as to which the DGCL confers jurisdiction on the Court of Chancery of Delaware;

● any action that is governed by the internal affairs doctrine of the State of Delaware; or

● any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL,

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation will also provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States, to the fullest extent permitted by law, shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”).

In addition, our amended and restated certificate of incorporation that will be in effect upon the completion of this offering will provide that any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition, neither the exclusive forum provision nor the Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court, and our stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Action Stock Transfer Corporation. The transfer agent’s address is 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

Listing

We have applied to list our common stock on the Nasdaq Capital Market under the trading symbol “MELT.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock. Future sales of substantial amounts of our common stock in the public market or the perception that such sales might occur could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our common stock in the public market after the restrictions lapse. This may adversely affect the prevailing market price of our common stock and our ability to raise equity capital in the future.

After completion of this offering, we will have               shares of common stock outstanding (or          shares if the underwriter’s option to purchase additional shares is exercised in full).

All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, unless the shares are purchased by our “affiliates” as that term is defined in Rule 144 and except certain shares that will be subject to the lock-up period described below after completion of this offering. Any shares owned by our affiliates may not be resold except in compliance with Rule 144 volume limitations, manner of sale and notice requirements, pursuant to another applicable exemption from registration or pursuant to an effective registration statement.

Any of the shares held by our executive officers, directors, employees and 10% and greater stockholders will be subject to lock-up restriction for 180 days from the date of the offering described under “Underwriting – Lock-Up Agreements” beginning on page 93. Accordingly, there will be a corresponding increase in the number of shares that become eligible for sale after the lock-up period expires. As a result of these agreements, subject to the provisions of Rule 144 or Rule 701, shares will be available for sale in the public market as follows:

● beginning on the date of this prospectus, all of the shares sold in this offering will be immediately available for sale in the public market (except as described above); and

● beginning 180 days after the date of this prospectus, at the expiration of the lock-up period for our executive officers, directors, employees and 10% and greater stockholders,            additional shares will become eligible for sale in the public market,            of which shares will be held by affiliates and subject to the volume and other restrictions of Rule 144 and Rule 701 as described below.

Lock-Up and Market Standoff Agreements

Pursuant to certain “lock-up” agreements, we, our executive officers, directors, employees and our 10% and greater stockholders have agreed not to, without the prior written consent of the underwriter, directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of any of shares of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of) our common stock, enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of our common stock, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock or any other of our securities or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for, with respect to the Company, a period of one hundred and eighty (180) days from the date of this offering.

Rule 144

In general, Rule 144 provides that once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares of our Common Stock proposed to be sold for at least six months is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

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In general, Rule 144 provides that our affiliates or persons selling shares of our Common Stock on behalf of our affiliates are entitled to sell upon expiration of the market standoff agreements and lock-up agreements described above, within any three-month period, a number of shares of our Common Stock that does not exceed the greater of:

● 1% of the number of shares of our capital stock then outstanding, which will equal             shares immediately after the completion of this offering; or

● the average weekly trading volume of our Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales of our common stock made in reliance upon Rule 144 by our affiliates or persons selling shares of our common stock on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our capital stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our Company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our Company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling those shares pursuant to Rule 701.

Registration Statements on Form S-8

Immediately after the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of our ordinary shares issued or reserved for future issuance under our equity incentive plans. This registration statement would cover approximately              shares. Shares registered under the registration statement will generally be available for sale in the open market after the 180-day lock-up period immediately following the date of this prospectus.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the ownership and disposition of shares of our common stock as of the date hereof. Except where noted, this summary deals only with shares of our common stock that were acquired for cash in this offering and that are held as a capital asset by a non-U.S. holder (as defined below). This summary is based upon provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”) and judicial decisions, in each case as of the date hereof. Those authorities may be changed, including retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. We cannot assure you that a change in law will not alter significantly the tax considerations that described in this summary.

A “non-U.S. holder” means a holder of shares of our common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes, any of the following:

● an individual who is a citizen or resident of the United States;

● a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

● an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

● a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons (as defined under the Code) have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to non-U.S. holders in light of their particular circumstances. In addition, this summary does not address the Medicare tax on certain net investment income, U.S. federal gift or estate tax laws, any state, local or non-U.S. tax laws or any tax treaties. This summary also does not address the U.S. federal income tax consequences applicable to non-U.S. holders that are subject to special treatment under the U.S. federal income tax laws, including (without limitation):

● former citizens or long-term residents of the United States;

● “qualified foreign pension funds,” or entities wholly owned by a “qualified foreign pension fund”;

● “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

● financial institutions, insurance companies, regulated investment companies, real estate investment trusts, mutual funds, broker-dealers, traders in securities or other persons that elect to use a mark-to-market method of accounting for their holdings in our common stock;

● persons who hold our common stock as “qualified small business stock” within the meaning of Section 1202 of the Code;

● persons who hold our common stock as a position in a hedging transaction, “straddle,” “conversion transaction,” or other risk reduction transaction or integrated investment;

● persons subject to special tax accounting rules as a result of any item of gross income with respect to our common stock being taken into account in an applicable financial statement;

● persons subject to the alternative minimum tax, and

● persons who acquired our common stock through warrants, stock options or in other compensatory transactions or partnerships or other pass-through entities for U.S. federal income tax purposes.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partners in partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes) considering the purchase of our common stock should consult their tax advisors regarding the U.S. federal income tax considerations of the purchase, ownership and disposition of our common stock by such partnership.

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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL GIFT OR ESTATE TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, NON-U.S. OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

Distributions

Distributions of cash or property on our common stock will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed our current and accumulated earnings and profits, the distributions will be treated as a nontaxable return of capital to the extent of the non-U.S. holder’s tax basis in our common stock and thereafter as capital gain from the sale or exchange of such common stock. Please read “—Sales or other Taxable Dispositions.”

Subject to the withholding rules discussed below under “—Backup Withholding and Information Reporting” and “—Additional Withholding Requirements under FATCA” and with respect to effectively connected dividends, any distribution made to a non-U.S. holder on our common stock generally will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the distribution unless an applicable income tax treaty provides for a lower rate. To receive the benefit of a reduced treaty rate, a non-U.S. holder must provide the applicable withholding agent with a properly executed IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable or successor form) certifying qualification for the reduced rate, and the non-U.S. holder will be required to update such forms and certifications from time to time as required by law. A non-U.S. holder eligible for a reduced rate of U.S. federal withholding tax pursuant to an applicable income tax treaty may be eligible to obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. If the non-U.S. holder holds our common stock through a financial institution or other agent acting on the non-U.S. holder’s behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then will be required to provide certification to us or our paying agent, either directly or through other intermediaries. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under an applicable income tax treaty.

If dividends paid to a non-U.S. holder are effectively connected with a trade or business conducted by the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, are treated as attributable to a permanent establishment maintained by the non-U.S. holder in the United States), the non-U.S. holder will be exempt from the U.S. federal withholding tax described above, provided the non-U.S. holder satisfies certain certification requirements by providing the applicable withholding agent a properly executed IRS Form W-8ECI certifying eligibility for exemption, and the non-U.S. holder will be required to update such forms and certifications from time to time as required by law. Any such effectively connected dividends generally will be taxed on a net income basis at the rates and in the manner generally applicable to U.S. persons (as defined under the Code). If the non-U.S. holder is a corporation for U.S. federal income tax purposes, it may also be subject to a branch profits tax at a 30% rate (or such lower rate as specified by an applicable income tax treaty) on its effectively connected earnings and profits (as adjusted for certain items), which will include effectively connected dividends. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

Sales or Other Taxable Dispositions

Subject to the discussion below under “—Backup Withholding and Information Reporting”, any gain realized by a non-U.S. holder on the sale or other disposition of our common stock generally will not be subject to U.S. federal income tax unless:

● the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder), in which case the non-U.S. holder will be subject to tax on the gain derived from the sale or other disposition on a net income tax basis at the U.S. federal income tax rates applicable to U.S. citizens, nonresident aliens or domestic corporations, as applicable. In addition, if any non-U.S. holder is a foreign corporation, such effectively connected gain may be subject to an additional branch profits tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty);

● the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% (or such lower rate as may be specified by an applicable income tax treaty) tax on the gain derived from the sale or other disposition, which gain may be offset by U.S. source capital losses even though the individual is not considered a resident of the United States; or

● we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes (as described below) and certain other conditions are met.

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Generally, a corporation is a “United States real property holding corporation” (“USRPHC”) if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business (all as determined for U.S. federal income tax purposes). We believe that we are not currently and will not become a USRPHC, and the remainder of this discussion assumes this is the case. If we are or become a USRPHC, however, so long as our common stock is regularly traded on an established securities market during the calendar year in which the sale or other disposition occurs, only a non-U.S. holder who actually or constructively holds or held (at any time during the shorter of the five-year period preceding the date of disposition or the holder’s holding period) more than 5% of our common stock will be subject to U.S. federal income tax on the sale or other disposition of our common stock.

Backup Withholding and Information Reporting

Any distributions paid to a non-U.S. holder must be reported annually to the IRS and to the non-U.S. holder. Copies of these information returns may be made available to the tax authorities in the country in which the non-U.S. holder resides or is established pursuant to an applicable income tax treaty. Distributions on our common stock made to a non-U.S. holder generally will not be subject to backup withholding if the non-U.S. holder establishes an exemption by properly certifying its non-U.S. status on an IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable or successor form.

Payments of the proceeds from a sale or other disposition by a non-U.S. holder of our common stock effected by or through the office of a broker generally will be subject to information reporting and backup withholding (currently at the rate of 24%) unless the non-U.S. holder establishes an exemption by properly certifying its non-U.S. status on an IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable or successor form and certain other conditions are met. Information reporting and backup withholding generally will not apply to any payment of the proceeds from a sale or other disposition of our common stock effected outside the United States by a non-U.S. office of a broker. However, unless such broker has documentary evidence in its records that the holder is not a U.S. person and certain other conditions are met, or the non-U.S. holder otherwise establishes an exemption, information reporting will apply to a payment of the proceeds of the disposition of our common stock effected outside the United States by such a broker if it has certain relationships within the United States. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that the non-U.S. holder is a U.S. person who is not an exempt recipient under the Code and applicable U.S. Treasury regulations.

Non-U.S. holders should consult their tax advisors regarding the application of the information reporting and backup withholding rules to them. Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement. Backup withholding is not an additional tax. Rather, the U.S. income tax liability (if any) of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is timely furnished to the IRS.

Additional Withholding Requirements under FATCA

Sections 1471 through 1474 of the Code, and the U.S. Treasury regulations and administrative guidance issued thereunder (“FATCA”), impose a 30% withholding tax on any dividends paid on our common stock if paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code) (including, in some cases, when such foreign financial institution or non-financial foreign entity is acting as an intermediary), unless (1) in the case of a foreign financial institution, such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are non-U.S. entities with U.S. owners); (2) in the case of a non-financial foreign entity, such entity certifies that it does not have any “substantial United States owners” (as defined in the Code) or provides the applicable withholding agent with a certification identifying the direct and indirect substantial United States owners of the entity (in either case, generally on an IRS Form W-8BEN-E) and provides certain information with respect to such United States owners; or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules and provides appropriate documentation (such as an IRS Form W-8BEN-E). The U.S. Treasury has issued proposed regulations providing that the withholding provisions under FATCA do not apply with respect to gross proceeds from a sale or other disposition of our common stock, which may be relied upon by taxpayers until final regulations are issued.

Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of the withholding tax under FATCA. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing these rules may be subject to different rules. Non-U.S. holders should consult their tax advisors regarding the possible implications of this legislation on their investment in our common stock and the entities through which they hold our common stock, including, without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition of the 30% withholding tax under FATCA.

INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE APPLICABILITY AND EFFECT OF U.S. FEDERAL GIFT AND ESTATE TAX LAWS AND ANY STATE, LOCAL OR NON-U.S. TAX LAWS AND TAX TREATIES.

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UNDERWRITING

Aegis Capital Corp. (“Aegis”) is acting as the sole underwriter and the book-running manager of this offering. Under the terms of an underwriting agreement, which is filed as an exhibit to the registration statement, the underwriter has agreed to purchase from us the respective number of shares of common stock shown opposite its name below:

Underwriter	Number of Shares
Aegis Capital Corp.

The underwriting agreement provides that the underwriter’s obligation to purchase shares of common stock depends on the satisfaction of the conditions contained in the underwriting agreement including:

● the representations and warranties made by us to the underwriter are true;

● there is no material change in our business or the financial markets; and

● we deliver customary closing documents to the underwriter.

Underwriting Commissions and Discounts and Expenses

The following table shows the per share and total underwriting discounts and commissions we will pay to Aegis. These amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase additional securities.

		Total
	Per Share	No Exercise	Full Exercise
Public offering price	$	$	$
Underwriting discounts and commissions to be paid by us (7%):	$	$	$
Non-accountable expense allowance (1%)	$	$	$
Proceeds, before expenses, to us	$	$	$

(1) We have agreed to pay a non-accountable expense allowance to the underwriter equal to 1% of the gross proceeds we received in this offering.

In addition, we have also agreed to pay all expenses in connection with the offering, including the following expenses: (a) all filing fees and communication expenses relating to the registration of the securities to be sold in the offering (including the over-allotment shares) with the SEC; (b) all FINRA public offering filing system fees associated with the review of the offering by FINRA; (c) all fees and expenses relating to the listing of such closing shares and over-allotment shares on Nasdaq; (d) all fees, expenses and disbursements relating to the registration or qualification of such securities under the “blue sky” securities laws of such states and other foreign jurisdictions as Aegis may reasonably designate the costs, if any, of all mailing and printing of the underwriting documents (including, without limitation, the underwriting agreement, any Blue Sky Surveys and, if appropriate, selected dealers’ agreement, underwriter’s questionnaire and power of attorney), registration statements, prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final prospectuses as the representative may reasonably deem necessary; (e) the costs of preparing, printing and delivering the securities; (f) fees and expenses of the transfer agent for the securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company); (g) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the underwriter; (h) the fees and expenses of the Company’s accountants; and (i) a maximum of $100,000 for fees and expenses including “road show”, diligence and reasonable legal fees and disbursements for underwriter’s counsel.

We estimate that the total expenses of the offering payable by us, excluding underwriting discounts and commissions, will be approximately $                 .

Over-Allotment Option

We have granted underwriter an option to purchase from us, up to                  additional shares of common stock within 45 days from the date of this prospectus to cover over-allotments, if any. The purchase price to be paid per additional share will be equal to the public offering price of one share, as applicable, less the underwriting discount.

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Discretionary Accounts

The underwriter does not intend to confirm sales of the securities offered hereby to any accounts over which it has discretionary authority.

Lock-Up Agreements

Pursuant to certain “lock-up” agreements, the Company, its executive officers, directors, employees and holders of at least 10% of the Company’s common stock and securities exercisable for or convertible into its common stock outstanding immediately upon the closing of this offering, have agreed, subject to certain exceptions, not to offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of or announce the intention to otherwise dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole or in part, the economic risk of ownership of, directly or indirectly, engage in any short selling of any shares of common stock or securities convertible into or exchangeable or exercisable for any common stock, whether currently owned or subsequently acquired, without the prior written consent of the underwriter, for a period of one hundred eighty (180) days from the closing date of the offering.

Underwriter’s Warrants

The Company has agreed to issue to Aegis or its designees warrants to purchase up to a total of 2.5% of the shares of common stock sold in this offering (excluding the shares sold through the exercise of the over-allotment option). Such warrants and underlying shares of common stock are included in this prospectus. The warrants are exercisable at $          per share (125% of the public offering price) commencing on a date which is six (6) months from the effective date of the offering under this prospectus supplement and expiring on a date which is no more than five (5) years from the commencement of sales of the offering in compliance with FINRA Rule 5110. The warrants have been deemed compensation by FINRA and are therefore subject to a 6-month lock-up pursuant to Rule 5110 of FINRA. The underwriter (or its permitted assignees under the Rule) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from effectiveness. The warrants may be exercised as to all, or a lesser number of shares of common stock, and will provide for cashless exercise in certain circumstances and will contain provisions for “piggyback” registration rights, for a period of no greater than five (5) years from the effective date of the offering in compliance with FINRA Rule 5110. The Company will bear all fees and expenses attendant to registering the securities issuable on exercise of the warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or the Company’s recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be adjusted for issuances of shares of common stock at a price below the warrant exercise price.

Right of First Refusal

If, for the period ending eighteen (18) months from the closing of this offering, we or any of our subsidiaries (a) decides to finance or refinance any indebtedness, Aegis has the right to act as sole book-runner, sole manager, sole placement agent or sole agent with respect to such financing or refinancing; or (b) decides to raise funds by means of a public offering (including at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked or debt securities, Aegis has the right to act as sole bookrunning manager, sole underwriter or sole placement agent for such financing.

Securities Issuance Standstill

We have agreed, for a period of one hundred eighty (180) days after the closing date of this offering, that we will not, without the prior written consent of the underwriter, issue, enter into any agreement to issue or announce the issuance or proposed issuance of any common stock, shares or share equivalents except for the issuance of shares of common stock or options to employees, consultants, officers or directors of our Company pursuant to any stock or option plan duly adopted for such purpose, approved by the Company’s stockholders and issued for bona fide services permissible under Form S-8. Except for offerings with Aegis, for one hundred eighty (180) days after the closing date of the offering, the Company shall not effect or enter into an agreement to effect any issuances of common stock, shares or share equivalents involving an at-the-market offering or Variable Rate Transaction. In no event should any equity transaction within this period result in the sale of equity at an offering price to the public less than that of the offering referred herein.

Electronic Offer, Sale and Distribution of Shares

A prospectus in electronic format may be made available on the website maintained by the underwriter, if any, participating in this offering and the underwriter may distribute prospectuses electronically. The underwriter may agree to allocate a number of shares for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriter that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on this website is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or Aegis in its capacity as underwriter, and should not be relied upon by investors.

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Stabilization

In connection with this offering, the underwriter may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.

● Stabilizing transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress.

● Over-allotment transactions involve sales by the underwriter of shares in excess of the number of shares the underwriter is obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriter is not greater than the number of shares that it may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriter may close out any short position by exercising its over-allotment option and/or purchasing shares in the open market.

● Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which it may purchase shares through exercise of the over-allotment option. If the underwriter sells more shares than could be covered by exercise of the over-allotment option and, therefore, has a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering.

● Penalty bids permits the underwriter to reclaim a selling concession from a syndicate member when the shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of the Company’s common stock or preventing or retarding a decline in the market price of its common stock. As a result, the price of the Company’s common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither the Company nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of the Company’s common stock. These transactions may be effected on the Nasdaq Capital Market, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Passive Market Making

In connection with this offering, the underwriter may engage in passive market making transactions in the Company’s common stock on the Nasdaq Capital Market in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.

Other Relationships

The underwriter and its affiliates may, in the future provide various investment banking, commercial banking and other financial services for the Company and its affiliates for which they have received, and may in the future receive, customary fees. However, except as disclosed in this prospectus, the Company has no present arrangements with the underwriter for any further services.

Offer Restrictions Outside the United States

Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

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LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed upon for us by Bass, Berry & Sims PLC, Nashville, Tennessee. Certain legal matters of U.S. federal securities law related to the offering will be passed upon for the underwriter by Kaufman & Canoles, P.C., Richmond, Virginia.

EXPERTS

The financial statements of Melt Pharmaceuticals, Inc. at December 31, 2021 and 2020, and for each of the two years in the period ended December 31, 2021, appearing in this Prospectus and Registration Statement have been audited by KMJ Corbin & Company LLP, independent registered public accounting firm, as set forth in their report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern) thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. We also maintain a website at www.meltpharma.com. Upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

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MELT PHARMACEUTICALS, INC.

INDEX TO THE FINANCIAL STATEMENTS

	Page No.
Interim Condensed Financial Statements (Unaudited)
Condensed Balance Sheets	F-2
Condensed Statements of Operations	F-3
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit	F-4
Condensed Statements of Cash Flows	F-5
Notes to Condensed Financial Statements	F-6 – F-16
Audited Financial Statements
Report of Independent Registered Public Accounting Firm	F-17
Balance Sheets	F-18
Statements of Operations	F-19
Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit	F-20
Statements of Cash Flows	F-21
Notes to Financial Statements	F-22 – F-35

F-1

MELT PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

	June 30,			December 31,
	2022			2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	6,179,990		$	11,259,031
Prepaid expenses and other current assets		17,295			19,349
Total current assets		6,197,285			11,278,380
Right-of-use asset		113,375			-
Deferred offering costs		632,971			-
Other asset		26,636			-
TOTAL ASSETS	$	6,970,267		$	11,278,380
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	2,157,748		$	1,283,423
Accrued expenses payable to Harrow Health, Inc. (a related party)		108,359			39,359
Accrued payroll and related liabilities		306,369			361,916
Note payable to Harrow Health, Inc. (a related party), net of debt discount		14,974,956			14,046,845
Current portion of lease liability		87,951			-
Total current liabilities		17,635,383			15,731,543
Redeemable convertible preferred stock warrant liability		-			220,935
Lease liability, net of current portion		26,577			-
TOTAL LIABILITIES		17,661,960			15,952,478
COMMITMENTS AND CONTINGENCIES (Note 5)
Redeemable convertible preferred stock - Series A $0.001 par value, 5,150,000 shares authorized; 2,287,000 shares issued and outstanding; aggregate liquidation preference of $11,435,000		10,338,952			10,338,952
STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value, 12,500,000 shares authorized; 5,395,311 shares issued and outstanding at June 30, 2022 and December 31, 2021		5,396			5,396
Additional paid-in capital		1,707,071			1,206,331
Accumulated deficit		(22,743,112	)		(16,224,777	)
TOTAL STOCKHOLDERS’ DEFICIT		(21,030,645	)		(15,013,050	)
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT	$	6,970,267		$	11,278,380

The accompanying notes are an integral part of these condensed financial statements.

F-2

MELT PHARMACEUTICALS, INC

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the			For the
	Six Month Period Ended			Six Month Period Ended
	June 30, 2022			June 30, 2021
Operating expenses:
General and administrative	$	1,182,209		$	1,462,768
Research and development		4,349,995			1,469,225
Total operating expenses		5,532,204			2,931,993
Loss from operations		(5,532,204	)		(2,931,993	)
Other (expense) income:
Interest (expense) income, net		(920,744	)		1,091
Other expense		(65,387	)		-
Total other (expense) income, net		(986,131	)		1,091
Loss before income taxes		(6,518,335	)		(2,930,902	)
Income tax expense		-			(6,000	)
Total net loss	$	(6,518,335	)	$	(2,936,902	)
Basic and diluted net loss per share of common stock	$	(1.14	)	$	(0.52	)
Weighted average number of shares of common stock outstanding, basic and diluted		5,704,344			5,624,508

The accompanying notes are an integral part of these condensed financial statements.

F-3

MELT PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)

	Redeemable Convertible Preferred Stock				Common Stock				Additional					Total
							Par		Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Value		Capital		Deficit			Deficit
Balance at December 31, 2021		2,287,000	$	10,338,952		5,395,311	$	5,396	$	1,206,331	$	(16,224,777	)	$	(15,013,050	)
Stock-based compensation expense		-		-		-		-		214,418		-			214,418
Reclassification of warrant liability to equity due to amendment to warrants		-		-		-		-		286,322		-			286,322
Net loss		-		-		-		-		-		(6,518,335	)		(6,518,335	)
Balances at June 30, 2022		2,287,000	$	10,338,952		5,395,311	$	5,396	$	1,707,071	$	(22,743,112	)	$	(21,030,645	)

	Redeemable Convertible
	Preferred Stock				Common Stock						Additional					Total
								Par			Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares			Value			Capital		Deficit			Deficit
Balance at December 31, 2020		2,287,000	$	10,338,952		5,632,500		$	5,633		$	627,014	$	(9,570,182	)	$	(8,937,535	)
Stock-based compensation expense		-		-		-			-			418,155		-			418,155
Forfeited restricted stock		-		-		(237,189	)		(237	)		237		-			-
Net loss		-		-		-			-			-		(2,936,902	)		(2,936,902	)
Balances at June 30, 2021		2,287,000	$	10,338,952		5,395,311		$	5,396		$	1,045,406	$	(12,507,084	)	$	(11,456,282	)

The accompanying notes are an integral part of these condensed financial statements.

F-4

MELT PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the			For the
	Six Month Period Ended			Six Month Period Ended
	June 30, 2022			June 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,518,335	)	$	(2,936,902	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property, plant and equipment		-			536
Loss on disposal of property, plant and equipment		-			1,922
Stock-based compensation expense		214,418			418,155
Noncash lease expense		7,002			-
Change in fair value of redeemable convertible preferred stock warrant liability		65,387			-
Note payable interest paid-in-kind		908,127			-
Amortization of debt discount		19,984			-
Changes in assets and liabilities:
Prepaid expenses and other current assets		2,054			(99,217	)
Other asset		(26,636	)		-
Accounts payable and accrued expenses		310,354			350,261
Accrued payroll and related liabilities		(55,547	)		235,983
Lease liability		(5,849	)		-
NET CASH USED IN OPERATING ACTIVITIES		(5,079,041	)		(2,029,262	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES		-			-
NET CHANGE IN CASH AND CASH EQUIVALENTS		(5,079,041	)		(2,029,262	)
CASH AND CASH EQUIVALENTS, beginning of period		11,259,031			2,932,590
CASH AND CASH EQUIVALENTS, end of period	$	6,179,990		$	903,328
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Deferred offering costs included in accounts payable and accrued expenses	$	632,971		$	-
Reclassification of warrant liability to equity due to amendment to warrants	$	286,322		$	-

The accompanying notes are an integral part of these condensed financial statements.

F-5

MELT PHARMACEUTICALS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS

Melt Pharmaceuticals, Inc. (the “Company” or “Melt”), a Delaware corporation founded on April 3, 2018 (“Inception”), was initially formed and operated as a wholly-owned subsidiary of Harrow Health, Inc. (“Harrow”) until January 2019. Melt raised gross proceeds of $11,435,000 in start-up capital through the sale of its Series A redeemable convertible preferred stock (“Series A Preferred”) in January and March 2019 and a separate management team was then established for Melt.

The Company is a clinical stage pharmaceutical company focused on the development and commercialization of proprietary non-opioid, non-intravenous, or non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings. The Company intends to seek regulatory approval through the U.S. Food and Drug Administration’s 505(b)(2) regulatory pathway for these proprietary, patented small-molecule drug candidates, where possible. The core intellectual property the Company owns is a patented series of combination non-opioid sedation drug formulations that it believes has multiple applications.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting and financial statement presentation

The accompanying interim condensed financial statements are unaudited and have been prepared using accounting principles generally accepted in the United States of America (“GAAP”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for fair statement of the Company’s financial position as of June 30, 2022 and results from operations and cash flows for the interim periods of June 30, 2022 and 2021. These interim financial results are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other future annual or interim period. The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2021.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.

Going concern evaluation and liquidity considerations

These condensed financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a development stage enterprise and has incurred recurring operating losses, has had negative operating cash flows and has not recognized any revenues since its Inception. In addition, the Company has an accumulated deficit of $22,743,112 at June 30, 2022, and anticipates incurring further losses through the year 2022 and beyond. As of June 30, 2022, the Company had $6,179,990 in cash and cash equivalents and current debt of $14,974,956. The Company has funded its operating losses to date through a preferred stock offering (see Note 6) and through the issuance of a note payable (see Note 4).

F-6

The Company will require additional capital to fund its operating needs including the development of its drug candidates and other activities. Accordingly, the Company expects to incur significant expenditures and increasing operating losses in the future. As a result, the Company’s current sources of liquidity will not be sufficient to meet its obligations for the 12 months following the date the interim condensed financial statements are issued. These conditions give rise to substantial doubt as to the Company’s ability to operate as a going concern. The Company’s ability to continue as a going concern will require it to obtain additional funding, generate positive cash flow from operations and/or enter into strategic alliances or sell assets.

There can be no assurance the Company will receive cash proceeds from any of these potential resources or, to the extent cash proceeds are received, such proceeds would be sufficient to support the Company’s current operating plan. The sale of additional equity securities may result in additional dilution to the Company’s stockholders. If the Company raises additional funds through the issuance of debt securities or preferred stock or through additional credit facilities, these securities and/or the loans under credit facilities could provide for rights senior to those of the Company’s ordinary shares and could contain covenants that would restrict the Company’s operations. Additional funds may not be available when needed, on terms that are acceptable to the Company, or at all.

These condensed financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on the Company’s ability to obtain the necessary financing to meet its obligations and repay liabilities arising from the normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. The condensed financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

Research and development

The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits and other overhead expenses, costs for clinical trials, and contracted research and manufacturing services.

Concentration of credit risk

Financial instruments which subject the Company to potential credit risk consist of its cash and cash equivalents. The Company invests with high-credit quality financial institutions. The Company believes the financial risks associated with these financial instruments are minimal.

Redeemable convertible preferred stock

The Company classifies redeemable convertible preferred stock outside of stockholders’ deficit on its condensed balance sheets as the requirements of triggering a deemed liquidation event, as defined within its amended and restated certificate of incorporation, are not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences (see Note 6), provided that the holders of redeemable convertible preferred stock have not converted their shares into common stock. The Company records the issuance of redeemable convertible preferred stock at the issuance price less related issuance costs. The Company has not adjusted the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may occur.

F-7

Redeemable convertible preferred stock warrant liability

Prior to April 2022, the Company’s redeemable convertible preferred stock warrants required liability classification as the underlying convertible preferred stock was considered contingently redeemable and may obligate the Company to transfer assets to the holders at a future date upon the occurrence of a deemed liquidation event. The warrants were recorded at fair value upon issuance and were subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized as other income (expense) in the condensed statements of operations. See Note 6 for discussion of an amendment to the redeemable convertible preferred stock warrants.

Stock-based compensation

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes-Merton option pricing model. The model requires the Company to make a number of assumptions, including expected stock price volatility, expected term, risk-free interest rate and expected dividends. The expected stock price volatility for the Company’s stock is determined by examining the historical volatilities of industry peers as the Company does not have any trading history of its common stock. The expected term of the options is based on the average period the stock options are expected to remain outstanding calculated as the midpoint of the options vesting term, and contractual expiration period for employees and the contractual term for nonemployees, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The risk-free interest rate is determined using the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the option. The dividend yield assumption is zero as the Company has no history of, nor plans of, dividend payments.

To determine the fair value of common stock given the absence of a public trading market, the Company’s board of directors with input from management considers numerous objective and subjective factors to determine the fair value of common stock. The factors include, but are not limited to: (i) third-party valuations of the Company’s common stock; (ii) the Company’s stage of development; (iii) the status of research and development efforts; (iv) the rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of the Company’s common stock; (v) the Company’s operating results and financial condition, including the Company’s levels of available capital resources; (vi) equity market conditions affecting comparable public companies; (vii) general U.S. market conditions; and (viii) if applicable, the lack of marketability of the Company’s common stock.

Grant date fair values of the Company’s restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are based on the fair value of the underlying common stock on the date of grant.

The grant date fair value of stock awards is recognized ratably over the requisite service periods in the Company’s condensed statements of operations. The Company accounts for forfeitures as they occur. The Company evaluates the assumptions used to value stock awards on at least an annual basis.

F-8

Basic and diluted net loss per common share

Basic net loss per share is calculated by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, using the treasury-stock or “if-converted” methods. For purposes of the diluted net loss per share calculation, common stock equivalents from preferred stock, stock options, unvested RSUs, unvested RSAs and warrants were 3,102,744 and 2,679,010 at June 30, 2022 and 2021, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect would be anti-dilutive. Therefore, basic and diluted net loss per share were the same for all periods presented. Included in the basic and diluted net loss per share calculation are RSUs awarded to directors that have vested, but the issuance and delivery of the shares are deferred until the director retires from service as a director.

The following table presents the computation of basic and diluted net loss per share of common stock:

	For the Six Months Ended			For the Six Months Ended
	June 30, 2022			June 30, 2021
Numerator – net loss	$	(6,518,335	)	$	(2,936,902	)
Denominator – weighted average number of shares outstanding, basic and diluted		5,704,344			5,624,508
Net loss per share, basic and diluted	$	(1.14	)	$	(0.52	)

Deferred offering costs

As of June 30, 2022, the Company has capitalized deferred offering costs consisting of direct legal, accounting, filing and other fees directly attributable to the Company’s planned initial public offering (“IPO”). The deferred offering costs will be offset against the proceeds received upon the closing of the planned IPO. In the event the planned IPO is terminated, all of the deferred offering costs will be expensed within the Company’s condensed statement of operations.

Fair value of financial instruments

Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, accrued payroll and related liabilities and note payable. The carrying amount of these financial instruments approximate fair value due to the short-term maturities of these instruments. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

F-9

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s redeemable convertible preferred stock warrant liability is classified as a level 3 liability as the fair value of the liability is estimated using unobservable inputs. See Note 6 for further discussion of the redeemable convertible preferred stock warrant liability.

Comprehensive loss

For all periods presented, the comprehensive loss was equal to net loss; therefore a separate condensed statement of comprehensive loss is not included in the accompanying condensed financial statements.

Segment reporting

The Company has determined that it operates in one segment. The Company is focused on the development and commercialization of proprietary non-opioid, non-intravenous, or non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings.

3. ROYALTIES, ASSET PURCHASE AGREEMENTS AND OTHER RELATED PARTY TRANSACTIONS

In December 2018, the Company entered into an asset purchase agreement with Harrow (the “Melt Asset Purchase Agreement”). Pursuant to the terms of the Melt Asset Purchase Agreement, the Company was assigned certain intellectual property and related rights from Harrow to develop, formulate, make, sell, and sub-license certain Harrow conscious sedation and analgesia related formulations (collectively, the “Melt Products”). Under the terms of the Melt Asset Purchase Agreement, the Company is required to make royalty payments to Harrow up to 5% of net sales of the Melt Products while any patent rights remain outstanding, as well as other conditions. In the event no royalty payment is paid to OHSO, LLC (“OHSO”), the Company will be required to make royalty payments to Harrow of 8% on net sales.

In October 2019, the Company entered into a royalty agreement with OHSO, an entity affiliated with a member of the Company’s board of directors, Dr. John Berdahl. OHSO is a co-inventor of the Company’s core technology. The Company expects the royalty agreement to require it to make royalty payments to OHSO equal to 3% of net sales received by it in connection with the sale or licensing of any product based on the acquired intellectual property.

In February 2019, the Company and Harrow entered into a Management Services Agreement (the “Melt MSA”), whereby Harrow provides to the Company certain administrative services and support, including bookkeeping, information technology and web services and human resources related activities, and the Company pays Harrow a monthly amount of approximately $10,000. See Notes 4 and 5 for other transactions with Harrow.

Harrow’s Chief Executive Officer, Mark L. Baum, was a member of the Company’s board of directors until November 2021 and Larry Dillaha, the Company’s Chief Executive Officer as of July 2021 was formerly the Chief Medical Officer of Harrow. Subsequent to November 2021, Mr. Baum serves as an advisor to the Company’s board of directors and receives an annual cash retainer of $50,000 for this service.

F-10

4. HARROW NOTE PAYABLE – RELATED PARTY

In September 2021, the Company entered into a loan and security agreement in the principal amount of $13,500,000 (the “Harrow Loan Agreement”) as borrower, with Harrow as lender. Amounts borrowed under the Harrow Loan Agreement bear interest at twelve and one-half percent (12.50%) per annum, which interest can be paid in-kind at the option of the Company until the maturity date. The Harrow Loan Agreement permits the Company to pay interest only on the principal amount loaned thereunder through the term and all amounts owed were to be due and payable on September 1, 2022. The Company could have elected to prepay all, but not less than all, of the amounts owed prior to the maturity date at any time without penalty.

The Company has granted Harrow a security interest in substantially all of its personal property, rights and assets, including intellectual property rights, to secure the payment of all amounts owed under the Harrow Loan Agreement. The Harrow Loan Agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, mergers and acquisitions, dispositions, investments, distributions, subordinated debt, and transactions with affiliates. The Harrow Loan Agreement includes customary events of default, and upon the occurrence of an event of default (subject to cure periods for certain events of default), all amounts owed by the Company thereunder may be declared immediately due and payable by the Company, and the interest rate on the loan may be increased by three percent (3%) per annum.

In connection with the Harrow Loan Agreement, the Company and Harrow entered into a Right of First Refusal Agreement providing Harrow with the right, but not the obligation, to match any offer received by the Company associated with third-party commercial rights to any of the Company’s drug candidates for a period of five years following the effective date of the Harrow Loan Agreement.

The Company received net cash proceeds from the Harrow Loan Agreement of $12,552,286. Accrued expenses payable to Harrow of $907,914 were converted into the Harrow Loan Agreement. In addition, Harrow paid $39,800 of legal fees on the Company’s behalf related to the Harrow Loan Agreement, which has been recorded as a debt discount. Amortization expense was $19,984 during the six months ended June 30, 2022.

In April 2022, the Company entered into an amendment to the Harrow Loan Agreement (the “First Harrow Loan Agreement Amendment”) to, among other things, (i) extend the maturity date of the loan through the earlier of September 1, 2026 and the date on which the maturity of the loan accelerates after or upon an event of default. The First Harrow Loan Agreement Amendment also requires the Company to maintain certain minimum liquidity requirements until maturity. The First Harrow Loan Agreement Amendment was to become effective upon the closing the Company’s planned IPO; provided that the conditions specified in the First Harrow Loan Agreement Amendment were satisfied no later than August 31, 2022 or such later date as Harrow may agree in its sole discretion. These conditions were not satisfied by August 31, 2022 and the Company failed to pay the loan in full on the September 1, 2022 maturity date (the “Harrow Loan Agreement Event of Default”).

See Note 7 for further discussion of the Harrow Loan Agreement.

5. COMMITMENTS AND CONTINGENCIES

Leases

The Company leased office facilities in Needham, Massachusetts under a non-cancelable operating lease which expired in August 2021, as amended. Rent expense for the six months ended June 30, 2021 was $27,736.

F-11

Beginning in July 2021 through January 2022, the Company utilized certain office space within the Harrow corporate offices in Nashville, Tennessee rent-free. The Company estimated this free rent expense to be $2,000 for January 2022 based on fair market lease rates for similar office leases in the area, as well as the amount of space and time period utilized. The Company determined the estimated amount was inconsequential for the accompanying condensed financial statements. In February 2022, the Company entered into a sublease agreement with Harrow to use Harrow’s office space on a month-to-month basis for $2,000 per month. Rent expense pursuant to this sublease for the six months ended June 30, 2022 was $10,000. The Company terminated this sublease effective June 30, 2022.

In June 2022, the Company entered into an operating sublease for its corporate headquarters in Brentwood, Tennessee that expires in September 2023. The Company pays monthly rent and paid a refundable security deposit of $26,636, which is included as an other asset in the accompanying condensed balance sheet as of June 30, 2022. Rent expense was $8,256 for the six months ended June 30, 2022. Cash paid for the operating lease liability was $7,103 for the six months ended June 30, 2022. The right-of-use asset obtained in exchange for the lease liability was $120,377.

As of June 30, 2022, maturities of the lease liability were as follows:

2022	$	44,393
2023		80,605
Total		124,998
Present value adjustment		(10,470	)
Total	$	114,528
Current portion of operating lease liability		87,951
Long-term portion of operating lease liability		26,577
Total	$	114,528

The remaining lease term is 1.25 years and the discount rate is 12.5%.

Legal proceedings

The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on the Company due to defense and settlement costs, diversion of management resources, negative publicity and reputation harm, and other factors. The Company is not aware of any existing or threatened proceedings or claims that could have a material impact on its financial position or results of operations of the Company.

Indemnities

In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgements, fines and settlements, paid by the individual in connection with any action, suit of proceeding arising out of the individual’s status of service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with response to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessors in connection with its facility lease for certain claims arising from the use of the facilities. As part of the Harrow Loan Agreement, the Company has agreed to indemnify Harrow for certain claims arising from or in connection with the Harrow Loan Agreement. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying balance sheets.

F-12

6. PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

The Company is authorized to issue two classes of stock: common stock and preferred stock. The total number of shares that the Company is authorized to issue is 17,650,000 at June 30, 2022 and December 31, 2021.

Preferred stock

A summary of the preferred stock shares authorized, issued, and outstanding as of June 30, 2022 and December 31, 2021 is as follows:

	Shares Authorized		Shares Issued and Outstanding		Liquidation Value		Carrying Value
Series A		5,150,000		2,287,000	$	11,435,000	$	10,338,952

Liquidation preference - In the event of a liquidation (including a change in control), dissolution, or winding up of the Company, either voluntary or involuntary, the holders of preferred stock are entitled to receive prior to and in preference to any distribution to the holders of common stock of the Company, from the assets available to its stockholders, an amount equal to the greater of their respective original issue price plus any dividends declared but unpaid, or such amount per share that would have been payable if all of the shares of preferred stock had been converted to common stock immediately prior to the liquidating event. If the assets to be distributed are insufficient to permit the payment to preferred stockholders of Series A Preferred, then the entire assets and funds of the Company legally available for distribution will be distributed ratably among the holders of preferred stock in proportion to the full amounts to which they would otherwise be entitled (“the Liquidation Rate”). Upon completion of the distribution of the preferential amounts to the preferred stockholders, all of the remaining assets of the Company available for distribution to stockholders shall be distributed among the holders of common stock pro rata based on the number of shares of common stock held. The Company classifies redeemable convertible preferred stock outside of stockholders’ deficit on its condensed balance sheets as the requirements of triggering a deemed liquidation event, as defined within its Amended and Restated Certificate of Incorporation, are not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences, provided that the holders of convertible preferred stock have not converted their shares into common stock. The Company recorded the issuance of convertible preferred stock at the issuance price less related issuance costs. The Company has not adjusted the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may occur.

Dividends - The holders of outstanding shares of Series A Preferred shall be entitled to receive dividends, when, as and if declared by the board of directors, out of any assets at the time legally available therefore, at the rate per annum of 6% of the Series A Preferred original issue price ($5.00 per share) (as adjusted for stock splits, stock dividends, combination, reclassification and the like) (the “Dividend Rate”) for such shares of Series A Preferred payable in preference and priority to any declaration or payment on common stock of the Company in such calendar year. No payment shall be made with respect to the common stock unless dividends on the Series A Preferred have been declared in accordance with the preferences stated herein and all declared dividends on the Series A Preferred have been paid or set aside for payment to the holders of Series A Preferred. The right to receive dividends on shares of Series A Preferred shall not be cumulative, and no right to dividends shall accrue to holders of Series A Preferred by reason of the fact that dividends on said shares are not declared or paid. Payment of any dividends to the holders of Series A Preferred shall be on a pro rata, pari passu basis. As of June 30, 2022 and December 31, 2021, no dividends have been declared. In the event that dividends had been declared but not paid at the end of each calendar year and June 30, 2022 since the 2019 issuance dates, cumulative accrued and unpaid dividends as of June 30, 2022 and December 31, 2021 would be approximately $2,350,000 and $2,000,000, respectively.

F-13

Conversion - Series A preferred stock are convertible, at the holder’s option, into shares of common stock of the Company. Additionally, the Series A preferred stock shall automatically convert into common stock upon the closing of a qualified underwritten public offering of the Company’s common stock or upon the election of the holders of a majority of the outstanding shares of Series A preferred stock. The conversion price per share shall initially be $5.00 for Series A Preferred.

Voting rights - Each holder of outstanding shares of Series A Preferred shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Certificate of Incorporation, holders of Series A Preferred shall vote together with the holders of common stock as a single class and on an as-converted to common stock basis.

Protective provisions - The prior approval of the holders of a majority of the outstanding Series A Preferred (voting together on an as-converted to common stock basis) is required in order for the Company to take certain actions, including amending, altering or changing the powers, preferences or special rights of the Series A Preferred in a manner adverse to such series; creating or authorizing the creation of new securities senior to or on parity with the preferred stock, increasing or decreasing the number of authorized shares of common stock or preferred stock; taking any action that would result in a liquidation; declare or pay any dividends on the common stock or preferred stock; redeem or repurchase any common stock (subject to customary exceptions); change the authorized size of the Board of Directors; increase the shares reserved under the Company’s equity plan or adopt a new plan; or amend, waive or change any provision of the Company’s Amended and Restated Certificate of Incorporation or Bylaws. In addition, the prior approval of the holders of a majority of the outstanding shares of Series A Preferred, voting separately on an as-converted basis, is required in order for the Company to take certain actions. The Series A Preferred is not currently redeemable. Upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, the Series A Preferred is redeemable in accordance with the Liquidation Rate.

Common stock

At June 30, 2022 and December 31, 2021, 12,500,000 of the Company’s total authorized shares are classified as common stock with a par value of $0.001 per share. As of June 30, 2022 and December 31, 2021, 5,395,311 shares of authorized common stock were issued and outstanding. Holders of each share of common stock have one vote for each share.

Warrants

In conjunction with the closing of the Series A Preferred offering in January 2019, the Company issued warrants to purchase 68,010 shares of its Series A Preferred (the “Series A Warrants”) to certain placement agents at an exercise price of $5.00 per share. The Series A Warrants vested at issuance in January 2019. The Company used the Black-Scholes-Merton option pricing model to value the Series A Warrants and the fair value at the date of issuance was $220,935, which was recorded as a component of the issuance costs for the Series A Preferred with a corresponding liability. In April 2022, the Company and the holders of the Series A Warrants amended the warrants so that warrants are exercisable into shares of the Company’s common stock rather than shares of Series A Preferred. The amendment resulted in the warrants being reclassified to equity. At the amendment date, the Company used the Black-Scholes-Merton option pricing model to estimate the fair value of the amended Series A Warrants and the estimated fair value of $286,322 was recorded as additional paid-in capital and the redeemable convertible preferred stock warrant liability was removed after recording $65,387 of changes in fair value in the condensed statement of operations for the six months ended June 30, 2022.

F-14

Prior to the April 2022 amendment, the Company used the Black-Scholes-Merton option pricing model to estimate the fair value of the redeemable convertible preferred stock warrant liability at each balance sheet date. Changes in the fair value of this liability were not significant during the six months ended June 30, 2021.

The holders of the Series A Warrants or their permitted transferees, are entitled with rights with respect to the registration under the Securities Act of their shares that are converted to common stock, including demand registration rights and piggyback registration rights. These rights are provided under the terms of a registration rights agreement between the Company and the investors.

No warrants have been exercised and 68,010 warrants remain outstanding as of June 30, 2022 and December 31, 2021.

Equity incentive plan

The Company’s 2018 Equity Incentive Plan (the “Equity Plan”) provides eligible persons an opportunity to participate in the Company’s future performance through equity awards. The Equity Plan allows for a maximum of 3,772,500 shares of authorized but unissued common stock to be available for grant to eligible employees, directors and consultants. Under the Equity Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, RSUs and RSAs. The Equity Plan is administered by the Company’s board of directors. As of June 30, 2022, there were 820,422 shares available for future issuances under the Equity Plan.

Stock options

Stock options may be granted with an exercise price equal to or greater than the current fair value of the Company’s common stock at the grant date. Stock options may be granted with an exercise price less than the current fair value of the Company’s common stock if the stock options are replacement options in accordance with certain United States Treasury regulation. Stock options typically have a contractual term of ten years. Vesting terms for options granted typically include one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; or 33% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 67% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over two years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Equity Plan) and in the event of certain modifications to the option award agreement.

F-15

Stock option activity for the six months ended June 30, 2022 is as follows:

	Number of shares		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life
Options outstanding - January 1, 2022		594,000	$	2.65		9.10
Options granted		83,094	$	5.22
Options exercised		-	$	-
Options cancelled/forfeited		-	$	-
Options outstanding - June 30, 2022		677,094	$	2.96		8.75
Options exercisable		302,058	$	2.19		8.19

Stock-based compensation expense for stock options was $179,909 for the six months ended June 30, 2022, of which $173,733 is included in general and administrative expenses and $6,176 is included in research and development expenses in the accompanying condensed statement of operations. Stock-based compensation expense for stock options was $227,243 for the six months ended June 30, 2021 and is included in general and administrative expenses in the accompanying condensed statement of operations.

Restricted stock units

RSUs may be granted subject to certain vesting requirements and other restrictions, including performance and market based vesting criteria. The Company’s board of directors have historically received RSUs that vest over one year, but the issuance and delivery of the underlying shares are deferred until the director resigns.

RSU activity for the six months ended June 30, 2022 is as follows:

	Number of shares		Weighted Avg. Grant Date Fair Value		Weighted Avg. Remaining Contractual Life
RSUs outstanding - January 1, 2022		-	$	-		-
RSUs granted		70,640	$	5.22
RSUs vested		-	$	-
RSUs cancelled/forfeited		-	$	-
RSUs outstanding - June 30, 2022		70,640	$	5.22		2.51

Stock-based compensation expense for RSUs was $34,509 for the six months ended June 30, 2022 and is included in general and administrative expenses in the accompanying condensed statement of operations. Stock-based compensation expense for RSUs was $190,912 for the six months ended June 30, 2021 and is included in general and administrative expenses in the accompanying condensed statement of operations.

7. SUBSEQUENT EVENTS

The Company evaluated subsequent events through September 21, 2022, the date the condensed financial statements were available to be issued.

In September 2022, the Company entered into a second amendment to the Harrow Loan Agreement (the “Second Harrow Loan Agreement Amendment”) to, among other things, (i) extend the maturity date of the loan through June 1, 2023, (ii) waive the Harrow Loan Agreement Event of Default, and (iii) extend the date by which the Company can complete its planned IPO to May 31, 2023 (the “Second Harrow Loan Agreement Amendment” and together with the First Harrow Loan Agreement Amendment, the “Harrow Loan Agreement Amendments”). Upon completion of the planned IPO, the amendments initially included in the First Harrow Loan Agreement and restated in the Second Harrow Loan Agreement will be effective, including the amendment to extend the maturity date of the loan to September 1, 2026.

F-16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of
Melt Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Melt Pharmaceuticals, Inc. (the “Company”) as of December 31, 2021 and 2020, the related statements of operations, redeemable convertible preferred stock and stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring operating losses, has had negative operating cash flows and has not recognized any revenues since its inception. In addition, the Company has an accumulated deficit of $16,224,777 as of December 31, 2021 and is dependent on its ability to raise capital. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KMJ Corbin & Company LLP

We have served as the Company’s auditor since 2019.

Irvine, California
April 1, 2022, except for the Leases section of Note 5, as to which the date is May 18, 2022.

F-17

MELT PHARMACEUTICALS, INC.

BALANCE SHEETS

	December 31,			December 31,
	2021			2020
ASSETS
Current assets
Cash and cash equivalents	$	11,259,031		$	2,932,590
Prepaid expenses and other current assets		19,349			22,913
Total current assets		11,278,380			2,955,503
Property, plant and equipment, net		-			2,458
TOTAL ASSETS	$	11,278,380		$	2,957,961
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	1,283,423		$	403,626
Accrued expenses payable to Harrow Health, Inc. (a related party)		39,359			840,829
Accrued payroll and related liabilities		361,916			91,154
Note payable to Harrow Health, Inc. (a related party), net of debt discount		14,046,845			-
Total current liabilities		15,731,543			1,335,609
Redeemable convertible preferred stock warrant liability		220,935			220.935
TOTAL LIABILITIES		15,952,478			1,556,544
COMMITMENTS AND CONTINGENCIES (Note 5)
Redeemable convertible preferred stock - Series A $0.001 par value, 5,150,000 shares authorized; 2,287,000 shares issued and outstanding; aggregate liquidation preference of $11,435,000		10,338,952			10,338,952
STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value, 12,500,000 shares authorized; 5,395,311 and 5,632,500 shares issued and outstanding at December 31, 2021 and 2020, respectively		5,396			5,633
Additional paid-in capital		1,206,331			627,014
Accumulated deficit		(16,224,777	)		(9,570,182	)
TOTAL STOCKHOLDERS’ DEFICIT		(15,013,050	)		(8,937,535	)
TOTAL LIABILITIES, PREFERRED STOCK AND
STOCKHOLDERS’ DEFICIT	$	11,278,380		$	2,957,961

The accompanying notes are an integral part of these financial statements

F-18

MELT PHARMACEUTICALS, INC.

STATEMENTS OF OPERATIONS

	For the			For the
	Year Ended			Year Ended
	December 31,			December 31,
	2021			2020
Operating expenses:
General and administrative	$	2,541,579		$	1,990,099
Research and development		3,525,549			2,541,180
Total operating expenses		6,067,128			4,531,279
Loss from operations		(6,067,128	)		(4,531,279	)
Other (expense) income:
Interest (expense) income, net		(581,793	)		7,681
Total other (expense) income, net		(581,793	)		7,681
Loss before income taxes		(6,648,921	)		(4,523,598	)
Provision for income tax		(5,674	)		(17,594	)
Total net loss	$	(6,654,595	)	$	(4,541,192	)
Basic and diluted net loss per share of common stock	$	(1.17	)	$	(0.84	)
Weighted average number of shares of common stock outstanding, basic and diluted		5,664,755			5,407,778

The accompanying notes are an integral part of these financial statements

F-19

MELT PHARMACEUTICALS, INC.

STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

For the years ended December 31, 2021 and 2020

	Redeemable Convertible
	Preferred Stock				Common Stock						Additional					Total
								Par			Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares			Value			Capital		Deficit			Deficit
Balance at December 31, 2019		2,287,000	$	10,338,952		5,632,500		$	5,633		$	226,317	$	(5,028,990	)	$	(4,797,040	)
Stock-based compensation expense		-		-		-			-			400,697		-			400,697
Net loss		-		-		-			-			-		(4,541,192	)		(4,541,192	)
Balance at December 31, 2020		2,287,000		10,338,952		5,632,500			5,633			627,014		(9,570,182	)		(8,937,535	)
Forfeited restricted stock		-		-		(237,189	)		(237	)		237		-			-
Stock-based compensation expense		-		-		-			-			579,080		-			579,080
Net loss		-		-		-			-			-		(6,654,595	)		(6,654,595	)
Balance at December 31, 2021		2,287,000	$	10,338,952		5,395,311		$	5,396		$	1,206,331	$	(16,224,777	)	$	(15,013,050	)

The accompanying notes are an integral part of these financial statements

F-20

MELT PHARMACEUTICALS, INC.

STATEMENTS OF CASH FLOWS

	For the			For the
	Year Ended			Year Ended
	December 31,			December 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,654,595	)	$	(4,541,192	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property, plant and equipment		536			1,973
Stock-based compensation		579,080			400,697
Note payable interest paid-in-kind		573,965			-
Loss on disposal of assets		1,922			939
Amortization of debt discount		12,680			-
Changes in assets and liabilities:
Prepaid expenses and other current assets		3,564			228
Accounts payable and accrued expenses		986,241			196,155
Accrued payroll and related liabilities		270,762			(552,170	)
NET CASH USED IN OPERATING ACTIVITIES		(4,225,845	)		(4,493,370	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from notes payable, net of issuance costs		12,552,286			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		12,552,286			-
NET CHANGE IN CASH AND CASH EQUIVALENTS		8,326,441			(4,493,370	)
CASH AND CASH EQUIVALENTS, beginning of period		2,932,590			7,425,960
CASH AND CASH EQUIVALENTS, end of period	$	11,259,031		$	2,932,590
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	5,674		$	17,594
Cash paid for interest	$	-		$	-
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrued expenses payable to Harrow Health, Inc. converted into note payable	$	907,914		$	-
Increase in additional paid-in capital for forfeit of restricted shares	$	237		$	-

The accompanying notes are an integral part of these financial statements

F-21

Melt Pharmaceuticals, Inc.

Notes to Financial Statements

1. DESCRIPTION OF BUSINESS

Melt Pharmaceuticals, Inc. (the “Company” or “Melt”), a Delaware corporation founded on April 3, 2018 (“Inception”), was initially formed and operated as a wholly-owned subsidiary of Harrow Health, Inc. (“Harrow”) until January 2019. Melt raised gross proceeds of $11,430,180 in start-up capital through the sale of its Series A redeemable convertible preferred stock (“Series A Preferred”) in January and March 2019 and a separate management team was then established for Melt.

The Company is a clinical stage pharmaceutical company focused on the development and commercialization of proprietary non-opioid, non-intravenous, or non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings. The Company intends to seek regulatory approval through the U.S. Food and Drug Administration’s 505(b)(2) regulatory pathway for these proprietary, patented small-molecule drug candidates, where possible. The core intellectual property the Company owns is a patented series of combination non-opioid sedation drug formulations that it believes has multiple applications.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting and financial statement presentation

The Company’s financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”).

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.

Going concern evaluation and liquidity considerations

These financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a development stage enterprise and has incurred recurring operating losses, has had negative operating cash flows and has not recognized any revenues since its Inception. In addition, the Company has an accumulated deficit of $16,224,777 at December 31, 2021, and anticipates incurring further losses through the year 2022 and beyond. As of December 31, 2021, the Company had $11,259,031 in cash and cash equivalents and current debt of $14,046,845. The Company has funded its operating losses to date through a preferred stock offering (see Note 6) and through the issuance of a note payable (see Note 4).

F-22

The Company will require additional capital to fund its operating needs including the development of its drug candidates and other activities. Accordingly, the Company expects to incur significant expenditures and increasing operating losses in the future. As a result, the Company’s current sources of liquidity will not be sufficient to meet its obligations for the 12 months following the date the financial statements were issued. These conditions give rise to substantial doubt as to the Company’s ability to operate as a going concern. The Company’s ability to continue as a going concern will require us to obtain additional funding, generate positive cash flow from operations and/or enter into strategic alliances or sell assets.

There can be no assurance the Company will receive cash proceeds from any of these potential resources or, to the extent cash proceeds are received, such proceeds would be sufficient to support the Company’s current operating plan. The sale of additional equity securities may result in additional dilution to the Company’s stockholders. If the Company raises additional funds through the issuance of debt securities or preferred stock or through additional credit facilities, these securities and/or the loans under credit facilities could provide for rights senior to those of the Company’s ordinary shares and could contain covenants that would restrict the Company’s operations. Additional funds may not be available when needed, on terms that are acceptable to the Company, or at all.

The financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on the Company’s ability to obtain the necessary financing to meet its obligations and repay liabilities arising from the normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

Research and development

The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, and other overhead expenses, clinical trials, contract services and outsource contracts.

Concentration of credit risk

Financial instruments which subject the Company to potential credit risk consist of its cash and cash equivalents. The Company invests with high-credit quality financial institutions. The Company believes the financial risks associated with these financial instruments are minimal.

Cash and cash equivalents

All highly liquid investments with an original remaining maturity at the date of purchase of three months or less are considered to be cash equivalents. The Company maintains cash in bank deposit accounts. Cash balances held in banks are insured up to $250,000 per owner by the Federal Deposit Insurance Corporation.

Redeemable convertible preferred stock

The Company classifies redeemable convertible preferred stock outside of stockholders’ deficit on its balance sheets as the requirements of triggering a deemed liquidation event, as defined within its amended and restated certificate of incorporation, are not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences (see Note 6), provided that the holders of convertible preferred stock have not converted their shares into common stock. The Company records the issuance of convertible preferred stock at the issuance price less related issuance costs. The Company has not adjusted the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may occur.

F-23

Redeemable convertible preferred stock warrant liability

The Company’s redeemable convertible preferred stock warrant requires liability classification as the underlying convertible preferred stock is considered contingently redeemable and may obligate the Company to transfer assets to the holders at a future date upon the occurrence of a deemed liquidation event. The warrant was recorded at fair value upon issuance and is subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized in the statements of operations.

Stock-based compensation

The Company has a stock incentive plan under which incentive and non-qualified stock options are granted to employees, directors and consultants. All stock-based payments are recognized in the financial statements based on their respective grant date fair values. The Company estimates the fair value of stock-based payment awards on the date of grant using the Black-Scholes-Merton option pricing model. The model requires management to make a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. The value of the portion of the award that is ultimately expected to vest is recognized ratably over the requisite service periods in the Company’s statements of operations. The Company accounts for forfeitures as they occur. The Company evaluates the assumptions used to value stock awards on an annual basis.

Basic and diluted net loss per common share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants outstanding during the period.

Basic and diluted net loss applicable to common stock per shares is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or, “if converted” methods) from preferred stock, stock options, unvested restricted stock units (“RSUs”), unvested restricted stock awards (“RSAs”) and warrants were 2,949,010 and 3,130,946 at December 31, 2021 and 2020, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director retires from service as a director.

F-24

The following table shows the computation of basic and diluted loss per share of common stock for the year and period ended December 31, 2021 and 2020:

	For the Year Ended			For the Year Ended
	December 31, 2021			December 31, 2020
Numerator – net loss	$	(6,654,595	)	$	(4,541,192	)
Denominator – weighted average number of shares outstanding, basic and diluted		5,664,755			5,407,778
Net loss per share, basic and diluted	$	(1.17	)	$	(0.84	)

Income taxes

The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when management estimates that it is more likely than not that deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future pretax earnings, the reversal of temporary differences between book and tax income and the expected tax rates in future periods.

The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized.

It is the Company’s practice to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2021 and 2020, the Company had no accrued interest and penalties related to uncertain tax positions. The Company’s tax years since 2018 may be subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:

	December 31,		December 31,
	2021		2020
Other prepaid expenses	$	19,349	$	14,225
Deposits and other current assets		-		8,688
Total prepaid expenses and other current assets	$	19,349	$	22,913

Property and equipment, net

Property and equipment are stated at cost, net of accumulated depreciation.

F-25

Depreciation of property and equipment is computed using the straight-line method over the following estimated useful lives:

Computer equipment – 3 years

Furniture and fixtures – 5 years

Expenditures of repairs and maintenance are charged to expense as incurred. The costs of major additions, replacements and improvements are capitalized. Property, plant and equipment at December 31, 2021 and 2020 consisted of the following:

	December 31,		December 31,
	2021		2020
Property, plant and equipment, net:
Computer software and hardware	$	-	$	3,280
Furniture and equipment		-		1,350
		-		4,630
Accumulated depreciation and amortization		-		(2,172	)
	$	-	$	2,458

During the year ended December 31, 2021, the Company moved its corporate office from Needham, Massachusetts to Nashville, Tennessee. The Company disposed of all its assets that had been located in its Needham office.

Debt issuance costs

Debt issuance costs are recorded net of the note payable in the balance sheets. Amortization of debt issuance costs is calculated using the effective interest method over the term of the related debt and is recorded in interest expense in the accompanying statements of operations.

Fair value of financial instruments

Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, accrued payroll and related liabilities and note payable. The carrying amount of these financial instruments approximate fair value due to the short-term maturities of these instruments. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

F-26

The Company’s redeemable convertible preferred stock warrant liability is classified as a level 3 liability as the fair value of the liability is estimated using unobservable inputs. See Note 6 for further discussion of the redeemable convertible preferred stock warrant liability.

Comprehensive loss

For all periods presented, the comprehensive loss was equal to net loss; therefore a separate statement of comprehensive loss is not included in the accompanying financial statements.

Segment reporting

The Company has determined that it operates in one segment. The Company is focused on the development and commercialization of proprietary non-opioid, non-intravenous, or non-IV, sedation and anesthesia therapeutics for human medical procedures in hospital, outpatient, and in-office settings.

Recent accounting standards

In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842). This new guidance was initiated as a joint project with the International Accounting Standards Board to simplify lease accounting and improve the quality of and comparability of financial information for users. This new guidance would eliminate the concept of off-balance sheet treatment for “operating leases” for lessees for the vast majority of lease contracts. Under ASU No. 2016-02, at inception, a lessee must classify all leases with a term of over one year as either finance or operating, with both classifications resulting in the recognition of a defined “right-of-use” asset and a lease liability on the balance sheet. However, recognition in the income statement will differ depending on the lease classification, with finance leases recognizing the amortization of the right-of-use asset separate from the interest on the lease liability and operating leases recognizing a single total lease expense. Lessor accounting under ASU No. 2016-02 would be substantially unchanged from the previous lease requirements under GAAP. ASU No. 2016-02 will take effect for private companies in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted and for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. The Company adopted this standard at January 1, 2021 and it did not have a material effect on the Company’s financial position, results of operations and cash flows due to the short-term nature of the Company’s lease agreement. See Note 5 for more information regarding the Company’s leased office space.

3. ROYALTIES, ASSET PURCHASE AGREEMENTS AND OTHER RELATED PARTY TRANSACTIONS

In December 2018, the Company entered into an asset purchase agreement with Harrow (the “Melt Asset Purchase Agreement”). Pursuant to the terms of the Melt Asset Purchase Agreement, the Company was assigned certain intellectual property and related rights from Harrow to develop, formulate, make, sell, and sub-license certain Harrow conscious sedation and analgesia related formulations (collectively, the “Melt Products”). Under the terms of the Melt Asset Purchase Agreement, the Company is required to make royalty payments to Harrow up to 5% of net sales of the Melt Products while any patent rights remain outstanding, as well as other conditions. In the event no royalty payment is paid to OHSO, LLC (“OHSO”), the Company will be required to make royalty payments to Harrow of 8% on net sales.

F-27

In October 2019, the Company entered into a royalty agreement with OHSO, an entity affiliated with our director, Dr. John Berdahl. OHSO is a co-inventor of the Company’s core technology. The Company expects the royalty agreement to require it to make royalty payments to OHSO equal to 3% of net sales received by it in connection with the sale or licensing of any product based on the acquired intellectual property.

In February 2019, the Company and Harrow entered into a Management Services Agreement (the “Melt MSA”), whereby Harrow provides to the Company certain administrative services and support, including bookkeeping, web services and human resources related activities, and the Company pays Harrow a monthly amount of approximately $10,000. See Notes 4 and 5 for other transactions with Harrow.

As of December 31, 2021 and 2020, respectively, the Company owed $39,359 and $840,829 to Harrow for reimbursable expenses and amounts due under the Melt MSA and are included in accrued expenses on the accompanying balance sheet. During the year ended December 31, 2021, $907,914 of accrued expenses payable to Harrow were converted into the note payable due to Harrow. See Note 4 for additional information.

Harrow’s Chief Executive Officer, Mark L. Baum, was a member of the Company’s board of directors until November 2021 and Larry Dillaha, the Company’s Chief Executive Officer as of July 2021 was formerly the Chief Medical Officer of Harrow. Subsequent to November 2021, Mr. Baum serves as an advisor to the Company’s board of directors and receives an annual cash retainer of $50,000 for this service.

4. HARROW NOTE PAYABLE – RELATED PARTY

In September 2021, the Company entered into a loan and security agreement in the principal amount of $13,500,000 (the “Harrow Loan Agreement”) as borrower, with Harrow as lender. Amounts borrowed under the Harrow Loan Agreement bear interest at twelve and one-half percent (12.50%) per annum, which interest can be paid in-kind at the option of the Company until the maturity date. The Harrow Loan Agreement permits the Company to pay interest only on the principal amount loaned thereunder through the term and all amounts owed will be due and payable on September 1, 2022. The Company may elect to prepay all, but not less than all, of the amounts owed prior to the maturity date at any time without penalty.

The Company has granted Harrow a security interest in substantially all of its personal property, rights and assets, including intellectual property rights, to secure the payment of all amounts owed under the Harrow Loan Agreement. The Harrow Loan Agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, mergers and acquisitions, dispositions, investments, distributions, subordinated debt, and transactions with affiliates. The Harrow Loan Agreement includes customary events of default, and upon the occurrence of an event of default (subject to cure periods for certain events of default), all amounts owed by the Company thereunder may be declared immediately due and payable by the Company, and the interest rate on the loan may be increased by three percent (3%) per annum.

In connection with the Harrow Loan Agreement, the Company and Harrow entered into a Right of First Refusal Agreement providing Harrow with the right, but not the obligation, to match any offer received by the Company associated with third-party commercial rights to any of the Company’s drug candidates for a period of five years following the effective date of the Harrow Loan Agreement.

The Company received net cash proceeds from the Harrow Loan Agreement of $12,552,286. $907,914 of accrued expenses payable to Harrow were converted into the Harrow Loan Agreement (see Note 3). In addition, Harrow paid $39,800 of legal fees related to the Harrow Loan Agreement, which has been recorded as a debt discount. Amortization expense was $12,680 during the year ended December 31, 2021.

F-28

5. COMMITMENTS AND CONTINGENCIES

Leases

The Company leased office facilities in Needham, Massachusetts under a non-cancelable operating lease which expired in August 2021, as amended. Rent expense for the years ended December 31, 2021 and 2020 was $37,357 and $52,130, respectively.

During the year ended December 31, 2021, the Company utilized certain office space within the Harrow corporate offices in Nashville, Tennessee rent-free. The Company estimated this rent expense to be $12,000 based on fair market lease rates for similar office leases in the area, as well as the amount of space and time period utilized. The Company determined the estimated amount was inconsequential to the accompanying financial statements. In February 2022, the Company entered into a sublease agreement with Harrow to use Harrow’s office space on a month-to-month basis for $2,000 per month.

Legal proceedings

The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on the Company due to defense and settlement costs, diversion of management resources, negative publicity and reputation harm, and other factors. The Company is not aware of any existing or threatened proceedings or claims that could have a material impact on its financial position or results of operations of the Company.

Indemnities

In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgements, fines and settlements, paid by the individual in connection with any action, suit of proceeding arising out of the individual’s status of service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with response to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessors in connection with its facility lease for certain claims arising from the use of the facilities. As part of the Harrow Loan Agreement, the Company has agreed to indemnify Harrow for certain claims arising from or in connection with the Harrow Loan Agreement. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying balance sheets.

6. PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

The Company is authorized to issue two classes of stock: common stock and preferred stock. The total number of shares that the Company is authorized to issue is 17,650,000 at December 31, 2021 and 2020.

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Preferred stock

A summary of the preferred stock shares authorized, issued, and outstanding as of December 31, 2021 and 2020 is as follows:

	Shares Authorized		Shares Issued and Outstanding		Liquidation Value		Carrying Value
Series A		5,150,000		2,287,000	$	11,435,000	$	10,338,952

Liquidation preference - In the event of a liquidation (including a change in control), dissolution, or winding up of the Company, either voluntary or involuntary, the holders of preferred stock are entitled to receive prior to and in preference to any distribution to the holders of common stock of the Company, from the assets available to its stockholders, an amount equal to the greater of their respective original issue price plus any dividends declared but unpaid, or such amount per share that would have been payable if all of the shares of preferred stock had been converted to common stock immediately prior to the liquidating event. If the assets to be distributed are insufficient to permit the payment to preferred stockholders of Series A Preferred, then the entire assets and funds of the Company legally available for distribution will be distributed ratably among the holders of preferred stock in proportion to the full amounts to which they would otherwise be entitled (“the Liquidation Rate”). Upon completion of the distribution of the preferential amounts to the preferred stockholders, all of the remaining assets of the Company available for distribution to stockholders shall be distributed among the holders of common stock pro rata based on the number of shares of common stock held. The Company classifies convertible preferred stock outside of stockholders’ deficit on its balance sheets as the requirements of triggering a deemed liquidation event, as defined within its Amended and Restated Certificate of Incorporation, are not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event are distributed in accordance with the liquidation preferences, provided that the holders of convertible preferred stock have not converted their shares into common stock. The Company records the issuance of convertible preferred stock at the issuance price less related issuance costs. The Company has not adjusted the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may occur.

Dividends - The holders of outstanding shares of Series A Preferred shall be entitled to receive dividends, when, as and if declared by the board of directors, out of any assets at the time legally available therefore, at the rate per annum of 6% of the Series A Preferred original issue price ($5.00 per share) (as adjusted for stock splits, stock dividends, combination, reclassification and the like) (the “Dividend Rate”) for such shares of Series A Preferred payable in preference and priority to any declaration or payment on common stock of the Company in such calendar year. No payment shall be made with respect to the common stock unless dividends on the Series A Preferred have been declared in accordance with the preferences stated herein and all declared dividends on the Series A Preferred have been paid or set aside for payment to the holders of Series A Preferred. The right to receive dividends on shares of Series A Preferred shall not be cumulative, and no right to dividends shall accrue to holders of Series A Preferred by reason of the fact that dividends on said shares are not declared or paid. Payment of any dividends to the holders of Series A Preferred shall be on a pro rata, pari passu basis. As of December 31, 2021 and 2020, no dividends have been declared. In the event that dividends had been declared but not paid at the end of each calendar year since the 2019 issuance dates, cumulative accrued and unpaid dividends as of December 31, 2021 and 2020 would be approximately $2,000,000 and $1,300,000, respectively.

Conversion - Series A preferred stock are convertible, at the holder’s option, into shares of common stock of the Company. Additionally, the Series A preferred stock shall automatically convert into common stock upon the closing of a qualified underwritten public offering of the Company’s common stock or upon the election of the holders of a majority of the outstanding shares of Series A preferred stock. The conversion price per share shall initially be $5.00 for Series A Preferred.

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Voting rights - Each holder of outstanding shares of Series A Preferred shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Certificate of Incorporation, holders of Series A Preferred shall vote together with the holders of common stock as a single class and on an as-converted to common stock basis.

Protective provisions - The prior approval of the holders of a majority of the outstanding Series A Preferred (voting together on an as-converted to common stock basis) is required in order for the Company to take certain actions, including amending, altering or changing the powers, preferences or special rights of the Series A Preferred in a manner adverse to such series; creating or authorizing the creation of new securities senior to or on parity with the preferred stock, increasing or decreasing the number of authorized shares of common stock or preferred stock; taking any action that would result in a liquidation; declare or pay any dividends on the common stock or preferred stock; redeem or repurchase any common stock (subject to customary exceptions); change the authorized size of the Board of Directors; increase the shares reserved under the Company’s equity plan or adopt a new plan; or amend, waive or change any provision of the Company’s Amended and Restated Certificate of Incorporation or Bylaws. In addition, the prior approval of the holders of a majority of the outstanding shares of Series A Preferred, voting separately on an as-converted basis, is required in order for the Company to take certain actions. The Series A Preferred is not currently redeemable. Upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, the Series A Preferred is redeemable in accordance with the Liquidation Rate.

Common stock

At December 31, 2021 and 2020, 12,500,000 of the authorized shares are classified as common stock with a par value of $0.001 per share. 5,395,311 and 5,632,500 shares of authorized common stock were issued and outstanding at December 31, 2021 and 2020, respectively. Holders of each share of common stock have one vote for each share.

During the year ended December 31, 2021, the Company’s former Chief Executive Officer forfeited 237,189 shares of unvested restricted common stock upon his resignation from the Company.

Warrants

In conjunction with the closing of an offering in January 2019, the Company issued a warrant to purchase 68,010 shares of its Series A Preferred stock to the placement agent at an exercise price of $5.00 per share. This warrant vested at issuance in January 2019. The Company used the Black-Scholes-Merton option pricing model to value the warrant and the fair value at the date of issuance was $220,935, which was recorded as a component of the issuance costs for the Series A Preferred with a corresponding liability. No warrants have been exercised and 68,010 warrants remain outstanding as of December 31, 2020 and 2021.

The Company uses the Black-Scholes-Merton option pricing model to estimate the fair value of the redeemable convertible preferred stock warrant liability at each balance sheet date. Changes in the fair value of this liability were not significant during the years ended December 31, 2021 and 2020.

The holders of these warrants or their permitted transferees, are entitled with rights with respect to the registration under the Securities Act of their shares that are converted to common stock, including demand registration rights and piggyback registration rights. These rights are provided under the terms of a registration rights agreement between the Company and the investors.

F-31

Equity incentive plan

The Company’s 2018 Equity Incentive Plan (the “Equity Plan”) provides eligible persons an opportunity to participate in the Company’s future performance through awards of stock options and restricted stock. The Equity Plan originally allowed for a maximum of 3,772,500 shares of authorized but unissued common stock to be available for grant to eligible employees, directors and consultants. Under the Equity Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, restricted stock units and restricted stock. The Equity Plan is administered by the Compensation Committee of the Company’s Board of Directors. The Company had 974,156 shares available for future issuances under the Equity Plan at December 31, 2021.

Stock options

A summary of stock option activity under the Equity Plan for the year ended December 31, 2020 is as follows:

	Number of shares		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life
Options outstanding - January 1, 2020		185,000	$	1.26		9.36
Options granted		235,000	$	2.41
Options exercised		-	$	-
Options cancelled/forfeited		-	$	-
Options outstanding - December 31, 2020		420,000	$	1.90		9.15
Options exercisable		85,625	$	0.79		8.00

A summary of stock option activity under the Equity Plan for the year ended December 31, 2021 is as follows:

	Number of shares			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life
Options outstanding – January 1, 2021		420,000		$	1.90		9.15
Options granted		454,000		$	3.04
Options exercised		-		$	-
Options cancelled/forfeited		(280,000	)	$	2.17
Options outstanding - December 31, 2021		594,000		$	2.65		8.87
Options exercisable		197,019		$	1.77		8.18

During 2021 and 2020, the Company granted stock options to certain employees and consultants. The stock options were granted with an exercise price equal to the current fair value of the Company’s common stock at the grant date and have contractual terms ranging from five to ten years. Vesting terms for options granted typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; and 33% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 67% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over two years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Equity Plan) and in the event of certain modifications to the option award agreement.

F-32

The Company estimated the fair values of each option awarded on the date of grant using the Black-Scholes-Merton option pricing model utilizing the assumptions noted below. To determine the fair value of common stock given the absence of a public trading market, the Company’s board of directors with input from management considered numerous objective and subjective factors to determine the fair value of common stock. The factors included, but were not limited to: (i) third-party valuations of the Company’s common stock; (ii) the Company’s stage of development; (iii) the status of research and development efforts; (iv) the rights, preferences and privileges of the Company’s convertible preferred stock relative to those of the Company’s common stock; (v) the Company’s operating results and financial condition, including the Company’s levels of available capital resources; and (vi) equity market conditions affecting comparable public companies; (vii) general U.S. market conditions; and (viii) the lack of marketability of the Company’s common stock the expected term of the options is based on the average period the stock options are expected to remain outstanding calculated as the midpoint of the options vesting term, and contractual expiration period for employees and the contractual term for nonemployees, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The expected stock price volatility for the Company’s stock was determined by examining the historical volatilities of its industry peers as the Company did not have any trading history of its common stock. The risk-free interest rate was calculated using the average of the published interest rates U.S. Treasury zero-coupon issues with maturities that approximate the expected term. The dividend yield assumption is zero as the Company has no history of, nor plans of, dividend payments.

The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted:

	2021			2020
Weighted-average fair value of options granted	$	2.31		$	1.83
Expected terms (in years)		6.11-10.00			6.11-10.00
Expected volatility		85%-90	%		90	%
Risk-free interest rate		1.04%-1.05	%		0.44%-0.78	%
Dividend yield		-			-

The following table summarizes information about stock options outstanding and exercisable at December 31, 2021:

				Weighted
				Average		Weighted				Weighted
Range of				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Prices		Outstanding		Life in Years		Price		Exercisable		Price
$	0.01		45,000		6.42	$	0.01		45,000	$	0.01
$	1.66		50,000		7.88	$	1.66		25,000	$	1.66
$	2.41		229,000		8.85	$	2.41		127,019	$	2.41
$	3.47		270,000		9.48	$	3.47		-	$	-
$	0.01 - $3.47		594,000		8.87	$	2.65		197,019	$	1.77

F-33

As of December 31, 2021, there was approximately $800,297 of total unrecognized compensation expense related to unvested stock options granted under the Equity Plan. That expense is expected to be recognized over the weighted-average remaining vesting period of 2.8 years. The stock-based compensation for all stock options was $388,168 and $141,517 during the years ended December 31, 2021 and 2020, respectively, and is included in general and administrative expenses in the accompanying statements of operations.

Restricted stock units

RSU awards are granted subject to certain vesting requirements and other restrictions, including performance and market based vesting criteria. The grant-date fair value of the RSUs, which has been determined based upon the fair value of the Company’s common stock on the grant date, is expensed over the vesting period of the RSUs. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met.

During the year ended December 31, 2020, the Company’s board of directors were granted 158,433 RSUs with a fair value of $381,824 which vested on a quarterly basis, over one year in equal installments, subject to the director’s continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns.

A summary of the Company’s RSU activity and related information for the year ended December 31, 2020 is as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
RSUs unvested - January 1, 2020		52,710		$	1.66
RSUs granted		158,433		$	2.41
RSUs vested		(131,927	)	$	2.11
RSUs cancelled/forfeit		-
RSUs unvested at December 31, 2020		79,216		$	2.41

A summary of the Company’s RSU activity and related information for the year ended December 31, 2021 is as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
RSUs unvested - January 1, 2021		79,216		$	2.41
RSUs granted		-
RSUs vested		(79,216	)	$	2.41
RSUs cancelled/forfeit		-
RSUs unvested at December 31, 2021		-

As of December 31, 2021, the total unrecognized compensation expense related to unvested RSUs was approximately $0. The stock-based compensation for RSUs was $190,912 and $259,180 during the years ended December 31, 2021 and 2020, respectively, and is included in general and administrative expenses in the accompanying statements of operations.

7. INCOME TAXES

The provision (benefit) for income taxes from continuing operations is as follows:

	2021			2020
Current:
Federal	$	-		$	-
State		5,674			17,594
		5,674			17,594
Deferred
Federal		(1,268,938	)		(853,397	)
State		(505,081	)		(353,107	)
Valuation allowance		1,774,019			1,206,504
		-			-
Provision	$	5,674		$	17,594

A reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income tax provision to the income tax provision is as follows:

	2021			2020
Income taxes at U.S. statutory rate		21.00	%		21.00	%
State taxes, net of federal benefit		-1.69	%		-1.69	%
Other		-0.34	%		-0.84	%
Change in valuation allowance		-19.06	%		-18.86	%
		-0.09	%		-0.39	%

F-34

Deferred tax assets and liabilities reflect the net tax effects of temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) at December 31 are as follows:

	2021			2020
Current:
State taxes	$	(2,934	)	$	(2,407	)
Accrued wages		15,670			26,435
Accrued professional fees		11,506			52,200
Prepaid insurance		(963	)		(3,244	)
		23,279			72,984
Long Term:
State taxes		(253,424	)		(147,357	)
Basis difference in fixed assets		-			(16	)
Non-qualified stock awards		274,531			139,570
Capitalized legal fees		31,118			29,310
Net operating losses		4,227,945			2,434,939
		4,280,170			2,456,446
		4,303,449			2,529,430
Valuation allowance		(4,303,449	)		(2,529,430	)
Net deferred tax asset/(liability)	$	-		$	-

Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $1,800,000 and $1,200,000 during 2021 and 2020, respectively.

As of December 31, 2021, the Company has state net operating loss carryforwards of approximately $14,150,000, which will begin to expire in 2037. In addition, the Company has federal net operating loss carryforwards of approximately $14,810,000 generated after 2017 that can be carried over indefinitely and may be used to offset up to 80% of federal taxable income.

8. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through April 1, 2022, the date the financial statements were available to be issued. No subsequent events have occurred that would have a material impact on the presentation of the Company’s financial statements.

F-35

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, upon completion of this offering. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the exchange listing fee.

		Amount to be Paid
SEC registration fee	$	*
FINRA filing fee		*
Exchange listing fee		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees		*
Miscellaneous expenses		*
Total	$	*

* To be filed by amendment.

Item 14. Indemnification of Directors and Officers

The Company is incorporated under the laws of the State of Delaware.

Section 102(b)(7) of the DGCL permits a corporation, in its certificate of incorporation, to eliminate or limit the personal liability of a director for monetary damages for breach of the director’s fiduciary duty, except (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) pursuant to Section 174 of the DGCL (relating to the liability of directors for unlawful payments of dividends or unlawful stock purchases or redemptions), or (4) for any transaction from which the director derived an improper personal benefit.

Section 145(a) of the DGCL permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.

Section 145(b) of the DGCL permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the adjudicating court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the adjudicating court shall deem proper.

II-1

Section 145(c) of the DGCL provides that, if a present or former director or officer has been successful in defense of any action referred to in Sections 145(a) and (b) of the DGCL, the corporation must indemnify such officer or director against the expenses (including attorneys’ fees) the officer or director actually and reasonably incurred in connection with such action.

Section 145(e) of the DGCL provides that expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in Section 145.

Section 145(f) of the DGCL provides that indemnification and advancement provided for by Section 145 shall not be deemed exclusive of any other rights to which a person that the corporation is empowered to indemnify or provide rights to advancement may be entitled.

Section 145(g) of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise against any liability asserted against and incurred by such person, in any such capacity, or arising out of his or her status as such, whether or not the corporation could indemnify the person against such liability under Section 145 of the DGCL.

Section 145(j) provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person’s heirs, executors and administrators.

We expect that the amended and restated certificate of incorporation we adopt prior to the completion of this offering will provide, that no director of the Company shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director to the fullest extent permitted by the DGCL. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except for liability (1) for any breach of the director’s duty of loyalty to us or our stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) resulting from unlawful dividend payments or stock redemptions or repurchases or other distributions (pursuant to Section 174 of the DGCL), or (4) for any transaction from which the director derived an improper personal benefit. Further, we expect that the amended and restated certificate of incorporation will provide, that, if the DGCL is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of our Company shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

Our bylaws provide, and we expect that the amended and restated certificate of incorporation we adopt prior to the completion of this offering will provide, that the Company will indemnify our directors and officers to the fullest extent permitted by the DGCL, as such may be amended (except that in the case of an amendment, only to the extent that the amendment permits us to provide broader indemnification rights than the DGCL permitted us to provide prior to such the amendment) and within certain parameters set forth therein against any and all expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred by the director or officer in connection with any action, suit or proceeding or any claim, issue or matter therein, to which such person is or is threatened to be made a party because such person is or was serving as a director or officer of the Company, or, while serving as a director or officer of the Company, at our request as a director, officer, member, manager, trustee, employee or agent of another corporation, partnership, joint venture, trust, enterprise or other entity.

Our bylaws provide, and we expect the amended and restated certificate of incorporation we adopt prior to the completion of this offering to provide, for the advancement of expenses to each of our directors and officers, in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses. Our bylaws provide, and we expect that the amended and restated certificate of incorporation will provide, that the rights granted therein to directors and officers relating to indemnification and the advancement of expenses shall not be exclusive of any other rights now possessed or thereafter acquired under any statute, provision of the certificate of incorporation or bylaws, agreement, vote of stockholders or otherwise. In addition, our bylaws authorize, and the amended and restated certificate of incorporation we adopt prior to the completion of this officer will authorize, us to enter into indemnification agreements or arrangements with our directors, officers, employees, and agents indemnifying such persons to the fullest extent permitted by the DGCL.

II-2

In connection with this offering, we expect to enter into indemnification agreements with each of our directors and executive officers that require us to indemnify them against expenses, judgments, fines, settlements, and other amounts that any such person becomes legally obligated to pay (including with respect to a derivative action) in connection with any proceeding, whether actual or threatened, to which such person may be made a party by reason of the fact that such person is or was a director or officer of us or any of our affiliates, provided such person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, our best interests. The indemnification agreements will also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. At present, no litigation or proceeding is pending that involves any of our directors or officers regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

In addition, we also intend to maintain customary directors’ and officers’ liability insurance in connection with this offering.

Further, in any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriter will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act against certain liabilities.

Item 15. Recent Sales of Unregistered Securities

The following list sets forth information regarding all unregistered securities sold by us during the three years prior to the date of this registration statement.

Issuances of Capital Stock

In January and March 2019, we issued and sold an aggregate of 2,287,000 shares of our Series A Preferred Stock to one hundred sixty-six (166) accredited investors at a purchase price of $5.00 per share, for aggregate consideration of approximately $11.4 million. Lake Street Capital Markets, LLC acted as placement agent in connection with the offering of the Company’s Series A Preferred Stock.

Issuance of Warrants

In June 2019, we issued warrants to purchase shares of our Series A Preferred Stock to our placement agent and certain of its affiliates in connection with our Series A Preferred Stock financing. The warrants were originally exercisable for an aggregate of 68,010 shares of our Series A Preferred Stock at an exercise price of $5.00 per share at any time through June 5, 2024.

Effective April 6, 2022, we and the holders of warrants amended each of the warrants so that the warrants became convertible for shares of common stock rather than shares of Series A Preferred Stock. Immediately prior to the consummation of this offering, the warrants, as amended, are exercisable for an aggregate 68,010 shares of common stock at an exercise price of $5.00 per share, and expire on June 5, 2024. In accordance with the terms of the warrants, as amended, the number of shares of common stock and the exercise price of each warrant will be adjusted based on the number of shares of common stock and public offering price per share in this offering.

Except as described above, none of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise specified above, we believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D or Regulation S promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.

Issuances Pursuant to our 2018 Equity Plan

During the three years prior to the date of this registration statement, we granted, pursuant to our 2018 Plan, restricted stock units for an aggregate of 342,556 shares of our common stock to our non-employee directors and our board advisor at that time. Of these restricted stock units, 309,033 have vested, however, delivery of these shares is deferred until the resignation of a director. In addition, in connection with his offer letter, we granted our Chief Financial Officer restricted stock units for 41,906 shares of our common stock.

During the three years prior to the date of this registration statement, we granted, pursuant to our 2018 Equity Plan, stock options to purchase an aggregate of 922,094 shares of common stock, at a weighted average exercise price of $2.89 per share, to our employees and consultants. Of these, no shares have been issued upon exercise of the stock options and 642,094 of these options are outstanding as of the date hereof.

II-3

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

The following documents are filed as exhibits to this registration statement.

EXHIBIT INDEX

Exhibit Number	Description
1.1*	Form of Underwriting Agreement.
2.1#	Asset Purchase Agreement, dated December 11, 2018, by and between the Registrant and Imprimis Pharmaceuticals, Inc.
3.1	Amended and Restated Certificate of Incorporation of Registrant (currently in effect).
3.2*	Form of Second Amended and Restated Certificate of Incorporation of Registrant (to be in effect upon completion of the offering).
3.3	Bylaws of the Registrant.
4.1*	Form of Stock Certificate evidencing the shares of Common Stock.
4.2*	Registration Rights Agreement, dated January 30, 2019, by and between the Registrant and certain of its stockholders.
4.3*	Amended and Restated Registration Rights Agreement, by and between the Registrant and certain of its stockholders (to be in effect upon completion of the offering).
4.4*	Registration Rights Agreement, by and between the Registrant and Harrow Health, Inc. (to be in effect upon completion of the offering).
5.1*	Legal Opinion of Bass, Berry & Sims PLC.
10.1+	Registrant’s 2018 Equity Incentive Plan.
10.2+	Form of Stock Option Grant Notice and Option Agreement under 2018 Equity Incentive Plan.
10.3+	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under 2018 Equity Incentive Plan.
10.4+	Form of Non-Employee Director Deferred Issuance Restricted Stock Unit Grant Notice and Non-Employee Director Deferred Issuance Restricted Stock Unit Award Agreement under 2018 Equity Incentive Plan.
10.5+	Form of Non-Employee Director and Officer Restricted Stock Unit Grant Notice and Non-Employee Director and Officer Restricted Stock Unit Award Agreement under 2018 Equity Incentive Plan.
10.6+*	Registrant’s 2022 Omnibus Incentive Plan (to be in effect upon completion of the offering).
10.7+*	Form of Restricted Share Unit Award Agreement (Employees) under 2022 Omnibus Incentive Plan.
10.8+*	Form of Restricted Share Unit Award Agreement (Non-Employee Director) under 2022 Omnibus Incentive Plan.
10.9+*	Form of Incentive Stock Option Agreement under 2022 Omnibus Incentive Plan.
10.10+*	Form of Non-Qualified Stock Option Agreement under 2022 Omnibus Incentive Plan.
10.11+*	Form of Indemnification Agreement.
10.12#	Loan and Security Agreement, dated September 1, 2021, by and between the Registrant and Harrow Health, Inc.
10.13	Amendment to Loan and Security Agreement, dated April 8, 2022, by and between the Registrant and Harrow Health, Inc.
10.14	Patent Security Agreement, dated September 1, 2021, by and between the Registrant and Harrow Health, Inc.
10.15	Trademark Security Agreement, dated September 1, 2021, by and between the Registrant and Harrow Health, Inc.
10.16	Right of First Refusal Agreement, dated September 1, 2021, by and between the Registrant and Harrow Health, Inc.
10.17	Management Services Agreement, dated February 1, 2019, by and between the Registrant an Harrow Health, Inc.
10.18	Royalty Agreement, dated October 3, 2019, by and between the Registrant and OHSO, LLC.
10.19+	Offer Letter, dated June 18, 2021, by and between the Registrant and Larry Dillaha, M.D.
10.20+	Offer Letter, dated September 27, 2018, by and between the Registrant and Gregory Madison.
10.21+	Offer Letter, dated April 29, 2019, by and between the Registrant and Mark Hazard.
10.22+	Offer Letter, dated February 18, 2022, by and between the Registrant and D. Bradford Osborne.
10.23+	Letter of Termination and Release Agreement, dated May 28, 2021, by and between the Registrant and Mark Hazard.
10.24	Second Amendment to Loan and Security Agreement, dated September 21, 2022, by and between the Registrant and Harrow Health, Inc.
23.1	Consent of KMJ Corbin & Company LLP, independent registered public accounting firm.
23.2*	Consent of Bass, Berry & Sims PLC (included in Exhibit 5.1).
23.3	Consent of Alison Bauerlein
23.4	Consent of Mark Baum
23.5	Consent of Herman Williams
24.1	Power of Attorney (included in the signature page hereto).
107	Filing Fee Table.

+	Indicates management contract or compensatory plan.
#	Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.
*	To be filed by amendment.
†	Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of the exhibit have been omitted because (i) they are not material and (ii) the Registrant customarily and actually treats such information as private or confidential.

(b) Financial Statement Schedules

Schedules not listed have been omitted because the information required to be set forth therein is not applicable, not material or is shown in the financial statements or notes thereto.

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Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Brentwood, State of Tennessee, on the 21st day of September, 2022.

	Melt Pharmaceuticals, INC.
By:	/s/ Larry Dillaha, M.D.
	Larry Dillaha, M.D.
	Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Larry Dillaha, M.D. and D. Bradford Osborne and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by the registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, his, hers or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Larry Dillaha, M.D.
Larry Dillaha, M.D.	Chief Executive Officer and Director (principal executive officer)	September 21, 2022
/s/ D. Bradford Osborne
D. Bradford Osborne	Chief Financial Officer (principal financial officer and principal accounting officer)	September 21, 2022
/s/ John Berdahl, M.D.
John Berdahl, M.D.	Director	September 21, 2022
/s/ J. Andy Corley
J. Andy Corley	Director	September 21, 2022
/s/ Arthur Laffer, Ph.D.
Arthur Laffer, Ph.D.	Director	September 21, 2022

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EX-2.1

Exhibit 2.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) dated as of the last date provided on the signature page (the “Effective Date”), is entered into between IMPRIMIS PHARMACEUTICALS, INC., a Delaware corporation (“Imprimis”), with a place of business at 12264 El Camino Real, Suite 350, San Diego, California 92130, and MELT PHARMACEUTICALS, INC., a Nevada corporation (“Melt”), with a place of business at 12264 El Camino Real, Suite 350, San Diego, California 92130. The parties hereby agree as follows:

1. Definitions. For the purposes of this Agreement, the following terms shall have the respective meanings set forth below, and grammatical variations of such terms shall have corresponding meanings:

1.1 “Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with, such Person. A Person shall be regarded as in control of another Person if it owns, or directly or indirectly controls, more than fifty percent (50%) of the voting stock or other ownership interest of the other Person, or if it directly or indirectly possesses the power to direct or cause the direction of the management and policies of the other Person by any means whatsoever. Notwithstanding the foregoing, for purposes of this Agreement, neither Imprimis nor Melt shall be Affiliates of the other or the other’s Affiliates.

1.2 “Assets” means, collectively, (a) all Technology as of the Effective Date, (b) the Assigned Patent Rights, (c) the Assigned Know-How Rights, and (d) all compositions, formulations, samples, data and information specific to the Technology owned by Imprimis as of the Effective Date.

1.3 “Assigned Know-How Rights” means all trade secret and other know-how rights specific to the Technology owned by Imprimis as of the Effective Date.

1.4 “Assigned Patent Rights” means, collectively, (a) all patents and patent applications (including provisional patent applications) listed on Schedule A, together with all divisionals, continuations and continuations-in-part that claim priority to, or common priority with, the foregoing; (b) all patents issuing therefrom (including utility models and design patents and certificates of invention); (c) all reissues, reexaminations, inter partes reviews, renewals, restorations, extensions and supplementary protection certificates of any of the foregoing patent applications or patents; (d) all confirmation patents, registration patents or patents of addition based on any of the foregoing patents; and (e) all foreign counterparts of any of the foregoing, or as applicable portions thereof.

1.5 “Confidential Information” means all information and data that (a) is provided by one party to the other party under this Agreement, and (b) if disclosed in writing or other tangible medium is marked or identified as confidential at the time of disclosure to the recipient, is acknowledged at the time of disclosure to be confidential, or otherwise should reasonably be deemed to be confidential. Melt’s Confidential Information includes the Assets. Notwithstanding the foregoing, Confidential Information of a party shall not include that portion of such information and data which, and only to the extent, the recipient can establish by written documentation: (i) is known to the recipient as evidenced by its written records before receipt thereof from the disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third person who has the right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) the recipient can reasonably establish is independently developed by persons on behalf of recipient without access to or use of the information disclosed by the disclosing party.

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1.6 “First Commercial Sale” means, with respect to any Product, the first sale of such Product by Melt, its Licensees, or its or their respective Affiliates after all applicable marketing and pricing approvals (if any) have been granted by the applicable governing health authority.

1.7 “GAAP” means generally accepted accounting principles in the United States of America.

1.8 “Imprimis Field” shall mean drug products compounded or manufactured in compounding pharmacies or outsourcing facilities as defined and described in the Federal Food, Drug & Cosmetic Act (21 U.S.C §353a and 21 U.S.C. §353b).

1.9 “Licensee” means a Third Party to whom Melt or its Affiliate has granted a license, immunity or other right under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize one or more Products, provided such license has not expired or been terminated.

1.10 “Melt Field” means all fields of use other than the Imprimis Field.

1.11 “Net Licensing Revenues” means, with respect to any Product, the aggregate consideration received by Melt or its Affiliates in connection with the grant by Melt or its Affiliates to a Licensee of a license, immunity or other right under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize such Product, excluding amounts calculated on the sales price of such Product.

1.12 “Net Receipts” means, with respect to any Product, the aggregate of the Net Sales thereof and Net Licensing Revenues therefrom.

1.13 “Net Sales” means, with respect to any Product, the gross sales price for such Product invoiced by Melt, its Licensees, or its or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users of such Product) less: (a) commercially reasonable credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers; (b) freight and insurance costs in transporting such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by such customers; (c) commercially reasonable cash, quantity and trade discounts, rebates and other price reductions for such Product; (d) sales, use, value-added and other direct taxes assessed or imposed on the sale or license of such Product and paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by such customers; (e) customs duties, tariffs, surcharges and other governmental charges incurred in exporting or importing such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by customers; and (f) an allowance for uncollectible or bad debts determined in accordance with GAAP. If Melt, its Licensees, or its or their respective Affiliates sell or license any Product to an Affiliate end user at a price that reflects a credit, allowance, discount or rebate that is greater than the same offered to otherwise similarly situated customers, the amount of the credit, allowance, discount or rebate shall not be subtracted from the gross sales price. Net Sales shall not include the gross sales price of such Product invoiced as the result of prescriptions written for the Product or purchases made of the Product by the investors in OHSO or by Affiliates of investors in OHSO.

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1.14 “OHSO” means OHSO, LLC.

1.15 “Payment Period” means, on a Product-by-Product and country-by-country basis, the period of time equal to the longer of (a) beginning on the date of the First Commercial Sale of such Product in such country and continuing during the term for which a Valid Claim (if such Valid Claim were in an issued patent) in such country remains in effect and would be infringed (if such Valid Claim were in an issued patent not owned by or licensed to Melt) by the manufacture, use, offer for sale, sale or import of such Product in such country; and (b) twenty (20) years following the date of the First Commercial Sale of such Product in such country.

1.16 “Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group of any of the foregoing.

1.17 “Product” means any product in any form or formulation that if made, used, offered for sale, sold or imported would infringe a Valid Claim (if such Valid Claim were in an issued patent not owned by or licensed to Melt), or that otherwise uses or incorporates the Assigned Know-How Rights.

1.18 “Product Supported Patent Rights” means, collectively, (a) all patent applications hereafter filed anywhere in the world, together with all divisionals, continuations and continuations-in-part that claim priority to, or common priority with, the foregoing; (b) all patents issuing therefrom (including utility models and design patents and certificates of invention); (c) all reissues, reexaminations, inter partes reviews, renewals, restorations, extensions and supplementary protection certificates of any of the foregoing patent applications or patents; (d) all confirmation patents, registration patents or patents of addition based on any of the foregoing patents; and (e) all foreign counterparts of any of the foregoing, or as applicable portions thereof; in each case that use or are supported by data or information derived from the development, manufacture or use of a Product or otherwise from the exploitation of the Assets; provided, however, that Product Supported Patent Rights shall exclude the Assigned Patent Rights.

1.19 “Technology” means, (a) any product in any form or formulation comprising any one or more pharmaceutical compositions comprising versed and ketamine; and (b) all methods of manufacture and use of the foregoing.

1.20 “Third Party” means any Person other than Imprimis, Melt or their respective Affiliates.

1.21 “Valid Claim” means either (a) a claim of an issued and unexpired patent included within the Assigned Patent Rights, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Assigned Patent Rights, which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application.

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2. Purchase and Sale of the Assets.

2.1 Assets. Subject to the terms and conditions of this Agreement, Melt hereby purchases from Imprimis, and Imprimis hereby sells, conveys, transfers and assigns to Melt, on the Effective Date, all of Imprimis’ right, title and interest in and to the Assets. To the extent necessary to comply with applicable privacy laws, Imprimis shall have the right to redact patient identifying information from any data or information transferred to Melt.

2.2 No Assumption of Liabilities. Melt shall not be obligated to assume or perform and is not assuming or performing any liabilities or obligations of Imprimis which relate to Imprimis’ ownership of the Assets prior to the Effective Date or otherwise, whether known or unknown, fixed or contingent, certain or uncertain, and regardless of when they are or were asserted, and Imprimis shall remain responsible for such liabilities.

2.3 Transfer Documents. The sale, conveyance, transfer and assignment of the Assets may be further evidenced by the due execution and delivery by the parties of any additional bills of sale, assignment or other title transfer documents and instruments as reasonably requested by Melt evidencing the sale, conveyance, transfer and assignment of the Assets in accordance with this Agreement.

3. License Grants.

3.1 Grantback License.

3.1.1 Subject to the terms and conditions of this Agreement, Melt hereby grants to Imprimis an exclusive (including with respect to Melt), irrevocable, perpetual, fully paid-up, royalty-free, non-transferable (except in connection with a permitted assignment of this Agreement), worldwide license under the Assigned Patent Rights, the Product Supported Patent Rights, and the Assigned Know-How Rights for all purposes in the Imprimis Field.

3.1.2 Imprimis shall have the right to grant sublicenses, through multiple tiers, to Third Parties and Affiliates.

3.2 No Implied Licenses. Only licenses and rights expressly granted herein shall be of legal force and effect. No license or other right shall be created hereunder by implication, estoppel, or otherwise.

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4. Representations and Warranties.

4.1 Mutual Representations and Warranties. Each party represents and warrants to the other party as follows:

4.1.1 Organization. Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

4.1.2 Authorization and Enforcement of Obligations. Such party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; and (b) has taken all requisite action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

4.1.3 Consents. All necessary consents, approvals and authorizations of all governmental authorities and other persons or entities required to be obtained by such party in connection with this Agreement have been obtained.

4.1.4 No Conflict. The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws, regulations or orders of governmental bodies; and (b) do not conflict with, or constitute a default under, any contractual obligation of such party.

4.2 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 4.1, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE ASSETS OR ANY OTHER MATTER, INCLUDING WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY REGARDING VALIDITY, ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. THE ASSETS ARE PROVIDED “AS IS.”

5. Financial Terms.

5.1 OHSO Payments. Subsequent to the entering into this Agreement, Melt may enter into a separate written agreement with OHSO, pursuant to which Melt shall pay certain amounts to OHSO on terms and conditions to be mutually agreed by Melt and OHSO.

5.2 Net Receipts Payments.

5.2.1 Net Receipts Payment Amounts.

(a) Payment Amount. Subject to the provisions in this Section 5.2.1, on a Product-by-Product and country-by-country basis, Melt shall pay to Imprimis, on a quarterly basis, eight percent (8%) of Net Receipts during the applicable Payment Period (the “Payment Amount”); provided, however, if, the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim (if such Valid Claim were in an issued patent and not owned by or licensed to Melt), then the applicable Payment Amount with respect to such Product in such country shall be reduced by one-half (½).

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(b) OHSO Payments. If Melt, its Licensees, or its or their respective Affiliates is required to pay any fees or charges to OHSO in order to make, have made, use, sell, offer to sale or import any Product, then Melt shall have the right to credit such amounts against the Payment Amount owing to Imprimis under Section 5.2.1(a) with respect to sales of such Product; provided, however, that Melt shall not reduce the Payment Amount with respect to sales of such Product for any period to less than (i) five percent (5%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would infringe a Valid Claim (if such Valid Claim were in an issued patent and not owned by or licensed to Melt), or (ii) two and one-half percent (2½%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim (if such Valid Claim were in an issued patent and not owned by or licensed to Melt).

(c) Third Party Royalties. If Melt, its Licensees or its or their respective Affiliates is required to pay royalties to any Third Party (other than OHSO) in order to make, have made, use, sell, offer to sale or import any Product, then Melt shall have the right to credit fifty percent (50%) of such Third Party royalty payments against the Payment Amount owing to Imprimis under Section 5.2.1(a) with respect to sales of such Product; provided, however, that Melt shall not reduce the Payment Amount with respect to sales of such Product for any period to less than (i) five percent (5%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would infringe a Valid Claim (if such Valid Claim were in an issued patent and not owned by or licensed to Melt), or (ii) two and one-half percent (2½%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim (if such Valid Claim were in an issued patent and not owned by or licensed to Melt).

(d) Combination/Bundled Products. In the event that a Product is sold by Melt, its Licensees or its or their respective Affiliates in combination with one or more products which is itself not a Product at a single price, then Net Sales shall be calculated by multiplying the sales price of such combination sale by the fraction A/(A+B) where A is the fair market value of the Product(s) and B is the fair market value of the other product(s) in the combination sale, each as reasonably determined by mutual written agreement of the parties.

5.2.2 Reports and Net Receipts Payments. Within sixty (60) days after the end of each calendar quarter during the applicable Payment Period, Melt shall deliver to Imprimis a report setting forth for such calendar quarter (a) the calculation of the applicable Payment Amount, including without limitation the Net Licensing Revenues and Net Sales of each Product; (b) the payments due under this Agreement for the sale of each Product; and (c) the applicable exchange rate as determined below. Melt shall remit the total payments due for the sale or license of Products during such calendar quarter at the time such report is made. No such reports or payments will be due for any Product before the First Commercial Sale of such Product. With respect to Net Receipts received in United States dollars, all amounts shall be expressed in United States dollars. With respect to Net Receipts received in a currency other than United States dollars, all amounts shall be expressed both in the currency in which the amount is invoiced (or received as applicable) and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter.

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5.3 Payment Provisions.

5.3.1 Payment Method. All payments by Melt to Imprimis hereunder shall be in United States dollars in immediately available funds and shall be made by wire transfer from a United States bank located in the United States to such bank account as designated from time to time by Imprimis to Melt.

5.3.2 Payment Terms. The Payment Amount shown to have accrued by each report provided for under Section 5.2.2 shall be due on the date such report is due. Payment of Payment Amount in whole or in part may be made in advance of such due date. Late payments shall incur interest at the rate of one percent (1%) per month from the date such payments were originally due.

5.3.3 Withholding Taxes. Melt shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other taxes, levies or charges with respect to such amounts, other than United States taxes, payable by Melt, its Licensees, or its or their respective Affiliates, or any taxes required to be withheld by Melt, its Licensees, or its or their respective Affiliates, to the extent Melt, its Licensees, or its or their respective Affiliates pay to the appropriate governmental authority on behalf of Imprimis such taxes, levies or charges. Melt shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of Imprimis by Melt, its Licensees, or its or their respective Affiliates. Melt promptly shall deliver to Imprimis proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto.

5.4 Audits. Upon the written request of Imprimis and not more than once in each calendar year, Melt shall permit an independent certified public accounting fine selected by Imprimis and reasonably acceptable to Melt, at Imprimis’ expense, to have access during normal business hours to such of the financial records of Imprimis as may be reasonably necessary to verify the accuracy of the Payment Amount reports hereunder for the eight (8) calendar quarters immediately prior to the date of such request. If such accounting firm concludes that additional amounts were owed during the audited period, Melt shall pay such additional amounts within thirty (30) days after the date Imprimis delivers to Melt such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by Imprimis; provided, however, if the audit discloses that the Payment Amount payable by Melt for such period are more than one hundred ten percent (110%) of the Payment Amount actually paid for such period, then Melt shall pay the fees and expenses charged by such accounting firm. Imprimis shall cause its accounting firm to retain all financial information subject to review under this Section 5.4 in strict confidence. Imprimis shall treat all such financial information as Melt’s confidential information, and shall not disclose such financial information to any Third Party or use it for any purpose other than as specified in this Section 5.4.

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6. Post-Effective Date Covenants.

6.1 Melt Diligence.

6.1.1 Melt shall use commercially reasonable efforts (whether alone or with or through its Licensees or its or their respective Affiliates) to research, develop and commercialize Products.

6.1.2 Melt shall control, at its sole expense, the preparation, filing, prosecution, maintenance and enforcement of the Assigned Patent Rights consistent with prudent business practices, and shall consider in good faith the interests of Imprimis and OHSO.

6.2 Imprimis Covenants.

6.2.1 Within thirty (30) days after the Effective Date, Imprimis shall transfer to Melt all tangible embodiments of the Technology in the possession and control of Imprimis.

6.2.2 Imprimis shall provide cooperation reasonably requested by Melt in connection with Melt’s efforts to establish, perfect, defend, or enforce its rights in or to the Assets (including without limitation the Assigned Patent Rights). Such cooperation shall include, without limitation, (a) executing such further assignments, transfers, licenses, releases and consents, and (b) providing such data and information, consulting with Melt and executing and delivering all such further documents and instruments, in each case as reasonably requested by Melt regarding the Assets (including without limitation the Assigned Patent Rights).

6.2.3 If a New Drug Application for a Product is filed by or on behalf of Melt, then, commencing thirty (30) days after receipt by Imprimis of Melt’s express written request, Imprimis shall cease compounding pharmaceutical products in a solid dosage form for sublingually-delivered conscious sedation that contain the same active ingredient as contained in such Product (or if there is more than one active ingredient contained in such Product, then the same combination of active ingredients as is contained in such Product) in the Melt Field until such time as Melt, its Licensees and its or their respective Affiliates (or their successors) cease for at least twelve (12) months bona fide development or commercialization of such Product. Melt promptly shall notify Imprimis in writing of any such cessation.

7. Indemnification.

7.1 Indemnification of Melt. Subject to the provisions of this Section 7, Imprimis shall indemnify, defend and hold harmless Melt, its officers, directors, affiliates, agents, stockholders and representatives (collectively, the “Melt Indemnitees”), from and against any and all losses, liabilities, damages and expenses (including without limitation reasonable attorneys’ fees and costs) incurred as a result of any claim, demand, action or proceeding by any Third Party (collectively, “Losses”) incurred or suffered by an Melt Indemnitee to the extent arising out of:

7.1.1 any breach of the representations and warranties of Imprimis set forth in this Agreement;

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7.1.2 any breach of any covenant or agreement of Imprimis set forth in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement; and

7.1.3 the ownership or exploitation of the Assets prior to the Effective Date.

7.2 Indemnification of Imprimis. Subject to the provisions of this Section 7, Melt shall indemnify and hold harmless Imprimis, its officers, directors, affiliates, agents, stockholders and representatives (collectively, the “Imprimis Indemnitees”), from and against any and all Losses incurred or suffered by an Imprimis Indemnitee to the extent arising out of:

7.2.1 any breach of the representations and warranties of Melt set forth in this Agreement;

7.2.2 any breach of any covenant or agreement of Melt set forth in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement;

7.2.3 the ownership or exploitation of the Assets after the Effective Date or the manufacture, use, sale or other exploitation of any Product solely by Melt, its Licensees or their respective Affiliates or the use of any Product by their customers.

7.3 Procedure. A party seeking indemnification (the “Indemnitee”) shall promptly notify the other party (the “Indemnifying Party”) in writing of a claim or suit; provided that an Indemnitee’s failure to give such notice or delay in giving such notice shall not affect such Indemnitee’s right to indemnification under this Section 7 except to the extent that the Indemnifying Party has been prejudiced by such failure or delay. The Indemnifying Party shall have the right to control the defense of all indemnification claims hereunder. The Indemnitee shall have the right to participate at its own expense in the claim or suit with counsel of its own choosing. The Indemnifying Party shall consult with the Indemnitee in good faith with respect to all non-privileged aspects of the defense strategy. The Indemnitee shall cooperate with the Indemnifying Party as reasonably requested, at the Indemnifying Party’s sole cost and expense. The Indemnifying Party shall not settle any claim or suit without the Indemnitee’s prior written consent, which consent shall not be unreasonably withheld.

8. Confidentiality.

8.1 Confidential Information. During the term of this Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, except as otherwise provided in this Section 8, each party shall maintain in confidence the Confidential Information of the other party except as expressly permitted herein, and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis to those directors, officers, employees, (sub)licensees and contractors, to the extent such disclosure is reasonably necessary in connection with performing its obligations or exercising its rights under this Agreement. To the extent that disclosure by a party is authorized by this Agreement, prior to disclosure, such party shall obtain agreement of any such Person to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement.

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8.2 Terms of this Agreement. Neither party shall disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other party; provided, however, that a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a Third Party in confidence in connection with (i) an equity investment in such party, (ii) a merger, consolidation or similar transaction by such party, (iii) a permitted (sub)license under this Agreement, or (iv) the sale of all or substantially all of the assets of such party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms of this transaction, and each party may disclose such information, as modified by mutual agreement from time to time, without the other party’s consent.

8.3 Permitted Disclosures. The confidentiality obligations contained in this Section 8 shall not apply to the extent that a party is required (a) in the reasonable opinion of such party’s legal counsel, to disclose information by applicable law, regulation, rule (including rule of a stock exchange or automated quotation system), order of a governmental agency or a court of competent jurisdiction or legal process, including tax authorities, or (b) to disclose information to any governmental agency for purposes of obtaining approval to test or market a product, provided in either case that, to the extent practicable, such party shall provide written notice thereof to the other party and sufficient opportunity to object to any such disclosure or to request confidential treatment. Notwithstanding anything to the contrary herein, either party may disclose the terms and conditions of this Agreement to any Person with whom such party has, or is proposing to enter into, a business relationship, as long as such Person has entered into a confidentiality agreement with such party.

8.4 Injunctive Relief. Each party acknowledges that it will be impossible to measure in money the damage to the other party if such party fails to comply with the obligations imposed by this Section 8, and that, in the event of any such failure, the other party may not have an adequate remedy at law or in damages. Accordingly, each party agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, is an appropriate remedy for any such failure and shall not oppose the granting of such relief on the basis that the disclosing party has an adequate remedy at law. Each party agrees that it shall not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with the other party seeking or obtaining such equitable relief.

9. Term and Termination.

9.1 Term. The term of this Agreement shall continue until expiration of all payment obligations hereunder, unless earlier terminated as set forth below.

9.2 Termination.

9.2.1 If Melt, its Licensee, or their respective Affiliates fails either to file an Investigational New Drug Application in the United States for a Product, or to generate Net Receipts, before June 19, 2022, then (unless the parties otherwise mutually agree in writing) Imprimis shall have the right, at its option and as its sole remedy, to terminate the Agreement.

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9.2.2 In the event of the termination of this Agreement in accordance with this Section 9.2, Melt shall re-assign the Technology and the other Assets to Imprimis or its designee. Melt shall execute, acknowledge and deliver such further documents and instruments and perform all such other acts as may be reasonably necessary or appropriate in order to effectuate the foregoing.

9.3 Survival. Expiration or termination of this Agreement shall be without prejudice to any rights which shall have accrued to the benefit of any party prior to such expiration or termination. Without limiting the foregoing, Sections 3, 4.2, 5, 7, 8, 9.2.2, 9.3 and 10 shall survive any expiration or termination of this Agreement.

10. Miscellaneous.

10.1 Further Actions. Each party shall execute, acknowledge and deliver such further documents and instruments and to perform all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

10.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 10.2 SHALL LIMIT OR RESTRICT THE RIGHTS OR LIABILITIES OF EITHER PARTY UNDER SECTIONS 7 AND 8.

10.3 Residuals. Notwithstanding anything to the contrary in this Agreement, Imprimis shall have the right to use any general knowledge, skills and experience and any information retained in the unaided memory of an individual employed or otherwise engaged by Imprimis.

10.4 Assignment. Neither party shall assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that a party may, without such consent, assign this Agreement and its rights and obligations hereunder (a) to any Affiliate, or (b) in connection with the transfer or sale of all or substantially all of its business to which this Agreement relates, or in the event of its merger, consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment in violation of this Section 10.4 shall be void.

10.5 Severability. Any provision of this Agreement which is illegal, invalid or unenforceable shall be ineffective to the extent of such illegality, invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

10.6 Governing Law; Exclusive Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law principles thereof. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any federal court located in the Southern District of the State of California or state court in San Diego, California having jurisdiction, in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by laws of the State of California for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process.

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10.7 Entire Agreement; Amendment. This Agreement, together with the Schedules hereto, and each additional document, instrument or other agreement to be executed and delivered pursuant hereto constitute all of the agreements of the parties with respect to, and supersede all prior agreements and understandings relating to the subject matter of, this Agreement or the transactions contemplated by this Agreement. This Agreement may not be modified or amended except by a written instrument specifically referring to this Agreement signed by the parties hereto.

10.8 Waiver. No waiver by one party of the other party’s obligations, or of any breach or default hereunder by any other party, shall be valid or effective, unless such waiver is set forth in writing and is signed by the party giving such waiver; and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature or any other breach or default by such other party.

10.9 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by a party to the other party shall be in writing, delivered by any lawful means to such other party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this Agreement) shall be effective upon receipt by the addressee.

If to Imprimis:	Imprimis Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, California 92130
	Attention: Chief Executive Officer

If to Melt:	Melt Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, California 92130
	Attention: Executive Director

10.10 Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

***SIGNATURE PAGE FOLLOWS***

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SIGNATURE PAGE

IN WITNESS WHEREOF, each party has caused a duly authorized representative to execute and deliver this Asset Purchase Agreement as of the date below.

IMPRIMIS		MELT
Imprimis Pharmaceuticals, Inc.		Melt Pharmaceuticals, Inc.
/s/ Mark L. Baum		/s/ Andrew R. Boll
By:	Mark L. Baum	By:	Andrew R. Boll
Its:	Chief Executive Officer	Its:	Executive Director
Date:	12/11/2018	Date:	12/11/2018

[Signature Page to Asset Purchase Agreement]

EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

MELT PHARMACEUTICALS, INC.

Greg P. Madison hereby certifies that:

ONE: The date of filing the original Certificate of Incorporation of this corporation with the Secretary of State of the State of Delaware was January 30, 2019.

TWO: He is the duly elected and acting President and Chief Executive Officer of Melt Pharmaceuticals, Inc., a Delaware corporation.

THREE: The Certificate of Incorporation of this corporation is hereby amended and restated to read as follows:

I.

The name of this corporation is Melt Pharmaceuticals, Inc. (the “Company”).

II.

The registered office of the Company in the State of Delaware is 850 New Burton Road, Suite 201, City of Dover, County of Kent, 19904 and the name of the registered agent of the Company in the State of Delaware at such address is COGENCY GLOBAL INC.

III.

The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).

IV.

A. The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares that the Company is authorized to issue is 17,650,000 shares, 12,500,000 shares of which shall be Common Stock (the “Common Stock”) and 5,150,000 shares of which shall be Preferred Stock (the “Preferred Stock”). The Preferred Stock shall have a par value of $0.001 per share and the Common Stock shall have a par value of $0.001 per share.

B. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote (voting together as a single class on an as-if-converted basis).

C. All of the authorized shares of Preferred Stock are hereby designated “Series A Preferred Stock” (the “Series Preferred”).

1.

D. The rights, preferences, privileges, restrictions and other matters relating to the Common Stock and Series Preferred are as follows:

1. Dividend Rights.

(a) Holders of Series Preferred, in preference to the holders of Common Stock, shall be entitled to receive, but only out of funds that are legally available therefor, cash dividends at the rate of six percent (6%) of the Original Issue Price (as defined below) per annum on each outstanding share of Series Preferred. Such dividends shall be payable only when, as and if declared by the Board of Directors (the “Board”) and shall be non-cumulative.

(b) The “Original Issue Price” of the Series Preferred shall be $5.00 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof).

(c) So long as any shares of Series Preferred are outstanding, the Company shall not pay or declare any dividend (whether in cash or property), or make any other distribution on the Common Stock, or purchase, redeem or otherwise acquire for value any shares of Common Stock, until all dividends as set forth in Section 1(a) above on the Series Preferred shall have been paid or declared and set apart, except for:

(i) acquisitions of Common Stock by the Company pursuant to agreements that permit the Company to repurchase such shares at no more than cost upon termination of services to the Company;

(ii) acquisitions of Common Stock in exercise of the Company’s right of first refusal to repurchase such shares; or

(iii) distributions to holders of Common Stock in accordance with Section 3.

(d) In the event dividends are paid on any share of Common Stock, the Company shall pay an additional dividend on all outstanding shares of Series Preferred in a per share amount equal (on an as-if-converted to Common Stock basis) to the amount paid or set aside for each share of Common Stock.

(e) The provisions of Sections 1(c) and 1(d) shall not apply to a dividend payable solely in Common Stock to which the provisions of Section 4(f) hereof are applicable, or any repurchase of any outstanding securities of the Company that is approved by (i) the Board and (ii) the Series Preferred as may be required by this Amended and Restated Certificate of Incorporation (the “Restated Certificate”).

(f) A distribution to the Company’s stockholders that otherwise complies with the provisions of this Restated Certificate may be made without regard to the preferential dividends arrears amount or any preferential rights amount (each as determined under applicable law).

2.

2. Voting Rights.

(a) General Rights. Each holder of shares of the Series Preferred shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Series Preferred could be converted (pursuant to Section 4 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent and shall have voting rights and powers equal to the voting rights and powers of the Common Stock and shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Company. Except as otherwise provided herein or as required by law, the Series Preferred shall vote together with the Common Stock at any annual or special meeting of the stockholders and not as a separate class, and may act by written consent in the same manner as the Common Stock.

(b) Separate Vote of Series Preferred. For so long as a majority of the shares of Series Preferred (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof) remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series Preferred shall be necessary for effecting or validating the following actions (whether by merger, recapitalization or otherwise):

(i) Any amendment, alteration, or repeal of any provision of this Restated Certificate (including any filing of a Certificate of Designation) that alters or changes the voting or other powers, preferences, or other special rights, privileges or restrictions of the Series Preferred so as to affect them adversely;

(ii) Any increase or decrease in the authorized number of shares of Common Stock or Preferred Stock;

(iii) Any authorization or any designation, whether by reclassification or otherwise, of any new class or series of stock or any other securities convertible into a new class or series of stock of the Company ranking on a parity with or senior to the Series Preferred in liquidation preference, voting or dividend rights or any increase in the authorized or designated number of any such class or series;

(iv) Any redemption, repurchase, payment or declaration of dividends or other distributions with respect to Common Stock or Preferred Stock except for acquisitions of Common Stock by the Company permitted by Section 1(c)(i), (ii) and (iii) hereof;

(v) Any agreement by the Company or its stockholders regarding an Acquisition or Asset Transfer (each as defined in Section 3 hereof);

(vi) Any voluntary dissolution or liquidation of the Company; or

(vii) Any increase or decrease in the par value of the shares of Common Stock or Preferred Stock.

3.

(c) Election of Board of Directors.

(i) The holders of Common Stock, voting as a separate class, shall be entitled to elect all members of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such directors.

(ii) Notwithstanding the provisions of Section 223(a)(1) and 223(a)(2) of the Delaware General Corporation Law, any vacancy, including newly created directorships resulting from any increase in the authorized number of directors or amendment of this Restated Certificate, and vacancies created by removal or resignation of a director, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced; provided however, that where such vacancy occurs among the directors elected by the holders of a class or series of stock, the holders of shares of such class or series may override the Board of Directors’ action to fill such vacancy by (i) voting for their own designee to fill such vacancy at a meeting of the Company’s stockholders or (ii) written consent, if the consenting stockholders hold a sufficient number of shares to elect their designee at a meeting of the stockholders in which all members of such class or series are present and voted. Any director may be removed during his or her term of office without cause, by, and only by, the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director.

(iii) No person entitled to vote at an election for directors may cumulate votes to which such person is entitled unless required by applicable law at the time of such election. During such time or times that applicable law requires cumulative voting, every stockholder entitled to vote at an election for directors may cumulate such stockholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such stockholder’s shares are otherwise entitled, or distribute the stockholder’s votes on the same principle among as many candidates as such stockholder desires. No stockholder, however, shall be entitled to so cumulate such stockholder’s votes unless (A) the names of such candidate or candidates have been placed in nomination prior to the voting and (B) the stockholder has given notice at the meeting, prior to the voting, of such stockholder’s intention to cumulate such stockholder’s votes. If any stockholder has given proper notice to cumulate votes, all stockholders may cumulate their votes for any candidates who have been properly placed in nomination. Under cumulative voting, the candidates receiving the highest number of votes, up to the number of directors to be elected, are elected.

4.

3. Liquidation Rights.

(a) Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (a “Liquidation Event”), before any distribution or payment shall be made to the holders of any Common Stock, subject to the right of any series of Preferred Stock that may from time to time come into existence, the holders of Series Preferred shall be entitled to be paid out of the assets of the Company legally available for distribution (or the consideration received by the Company or its stockholders in an Acquisition or Asset Transfer) for each share of Series Preferred held by them, an amount per share of Series Preferred equal to the Original Issue Price plus all declared and unpaid dividends on the Series Preferred. If, upon any such Liquidation Event, the assets of the Company shall be insufficient to make payment in full to all holders of Series Preferred of the liquidation preference set forth in this Section 3(a), then such assets (or consideration) shall be distributed among the holders of Series Preferred at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

(b) After the payment of the full liquidation preference of the Series Preferred as set forth in Section 3(a) above, the remaining assets of the Company legally available for distribution (or the consideration received by the Company or its stockholders in an Acquisition or Asset Transfer), if any, shall be distributed ratably to the holders of the Common Stock.

(c) An Acquisition or Asset Transfer (each as defined below) shall be deemed a Liquidation Event for purposes of this Section 3.

(i) For the purposes of this Section 3: (i) “Acquisition” shall mean (A) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or reorganization, continue to represent a majority of the voting power of the surviving entity (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization (provided that, for the purpose of this 3(c), all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such consolidation or merger or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of capital stock are converted or exchanged); or (B) any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred; provided that an Acquisition shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; and (ii) “Asset Transfer” shall mean a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.

(ii) In any Acquisition or Asset Transfer, if the consideration to be received is securities of a corporation or other property other than cash, its value will be deemed its fair market value as determined in good faith by the Board on the date such determination is made.

5.

(iii) The Company shall not have the power to effect an Acquisition or Asset Transfer unless the definitive agreement for such transaction (the “Agreement”) provides that the consideration payable to the stockholders of the Company in connection therewith shall be allocated among the holders of capital stock of the Company in accordance with this Section 3.

(d) Notwithstanding the foregoing, upon any Liquidation Event, (including an Acquisition or Asset Transfer), then each holder of Series Preferred shall be entitled to receive, for each share of each series of Series Preferred then held, out of the proceeds available for distribution, the greater of (i) the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares in a Liquidation Event pursuant to Section 3(a) (without giving effect to this Section 3(d)) or (ii) the amount of cash, securities or other property to which such holder would be entitled to receive in a Liquidation Event with respect to such shares if such shares had been converted to Common Stock immediately prior to such Liquidation Event or Acquisition or Asset Transfer, giving effect to this Section 3(d) with respect to all series of Preferred Stock simultaneously.

(e) In the event of a Liquidation Event (including an Acquisition or Asset Transfer), if any portion of the consideration payable to the stockholders of the Company is placed into escrow and/or is payable to the stockholders of the Company subject to contingencies, the applicable definitive agreement shall provide that (i) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of capital stock of the Company in accordance with Section(s) 3(a), 3(b) and 3(d) as if the Initial Consideration were the only consideration payable in connection with such Acquisition or Asset Transfer and (ii) any additional consideration that becomes payable to the stockholders of the Company upon release from escrow or satisfaction of contingencies shall be allocated among the holders of capital stock of the Company in accordance with Section(s) 3(a), 3(b) and 3(d) after taking into account the previous payment of the Initial Consideration as part of the same transaction.

4. Conversion Rights.

The holders of the Series Preferred shall have the following rights with respect to the conversion of the Series Preferred into shares of Common Stock (the “Conversion Rights”):

(a) Optional Conversion. Subject to and in compliance with the provisions of this Section 4, any shares of Series Preferred may, at the option of the holder, be converted at any time into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which a holder of Series Preferred shall be entitled upon conversion shall be the product obtained by multiplying the “Series Preferred Conversion Rate” then in effect (determined as provided in Section 4(b)) by the number of shares of Series Preferred being converted.

(b) Series Preferred Conversion Rate. The conversion rate in effect at any time for conversion of the Series Preferred (the “Series Preferred Conversion Rate”) shall be the quotient obtained by dividing the Original Issue Price of the Series Preferred by the “Series Preferred Conversion Price,” calculated as provided in Section 4(c).

6.

(c) Series Preferred Conversion Price. The conversion price for the Series Preferred shall initially be the Original Issue Price of the Series Preferred (the “Series Preferred Conversion Price”). Such initial Series Preferred Conversion Price shall be adjusted from time to time in accordance with this Section 4. All references to the Series Preferred Conversion Price herein shall mean the Series Preferred Conversion Price as so adjusted.

(d) Mechanics of Optional Conversion. Each holder of Series Preferred who desires to convert the same into shares of Common Stock pursuant to this Section 4 shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or any transfer agent for the Series Preferred, and shall give written notice to the Company at such office that such holder elects to convert the same. Such notice shall state the number of shares of Series Preferred being converted. Thereupon, the Company shall promptly issue and deliver at such office to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled and shall promptly pay (i) in cash or, to the extent sufficient funds are not then legally available therefor, in Common Stock (at the Common Stock’s fair market value determined by the Board as of the date of such conversion), any declared and unpaid dividends on the shares of Series Preferred being converted and (ii) in cash (at the Common Stock’s fair market value determined by the Board as of the date of conversion) the value of any fractional share of Common Stock otherwise issuable to any holder of Series Preferred. Such conversion shall be deemed to have been made at the close of business on the date of such surrender of the certificates representing the shares of Series Preferred to be converted, and the person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock on such date.

(e) Adjustment for Stock Splits and Combinations. If at any time or from time to time on or after the date that the first share of Series Preferred is issued (the “Original Issue Date”) the Company effects a subdivision of the outstanding Common Stock, the Series Preferred Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if at any time or from time to time after the Original Issue Date the Company combines the outstanding shares of Common Stock into a smaller number of shares, the Series Preferred Conversion Price in effect immediately before the combination shall be proportionately increased. Any adjustment under this Section 4(e) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(f) Adjustment for Common Stock Dividends and Distributions. If at any time or from time to time on or after the Original Issue Date the Company pays to holders of Common Stock a dividend or other distribution in additional shares of Common Stock, the Series Preferred Conversion Price then in effect shall be decreased as of the time of such issuance, as provided below:

7.

(i) The Series Preferred Conversion Price shall be adjusted by multiplying the Series Preferred Conversion Price then in effect by a fraction equal to:

(A) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance, and

(B) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution;

(ii) If the Company fixes a record date to determine which holders of Common Stock are entitled to receive such dividend or other distribution, the Series Preferred Conversion Price shall be fixed as of the close of business on such record date and the number of shares of Common Stock shall be calculated immediately prior to the close of business on such record date; and

(iii) If such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Series Preferred Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Series Preferred Conversion Price shall be adjusted pursuant to this Section 4(f) to reflect the actual payment of such dividend or distribution.

(g) Adjustment for Reclassification, Exchange, Substitution, Reorganization, Merger or Consolidation. If at any time or from time to time on or after the Original Issue Date the Common Stock issuable upon the conversion of the Series Preferred is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, merger, consolidation or otherwise (other than an Acquisition or Asset Transfer or a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 4), in any such event each share of Series Preferred shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock of the Company issuable upon conversion of one share of Series Preferred immediately prior to such recapitalization, reclassification, merger, consolidation or other transaction would have been entitled to receive pursuant to such transaction, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of Series Preferred after the capital reorganization to the end that the provisions of this Section 4 (including adjustment of the Series Preferred Conversion Price then in effect and the number of shares issuable upon conversion of the Series Preferred) shall be applicable after that event and be as nearly equivalent as practicable.

(h) Sale of Shares Below Series Preferred Conversion Price.

(i) If at any time or from time to time on or after the Original Issue Date the Company issues or sells, or is deemed by the express provisions of this Section 4(h) to have issued or sold, Additional Shares of Common Stock (as defined below), other than as provided in Section 4(e), 4(f) or 4(g) above, for an Effective Price (as defined below) less than the then effective Series Preferred Conversion Price (a “Qualifying Dilutive Issuance”), then and in each such case, the then existing Series Preferred Conversion Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Series Preferred Conversion Price in effect immediately prior to such issuance or sale by a fraction:

8.

(A) the numerator of which shall be the number of shares of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus the number of shares of Common Stock that the Aggregate Consideration (as defined below) received or deemed received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such then-existing Series Preferred Conversion Price, and

(B) the denominator of which shall be the number of shares of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale plus the total number of Additional Shares of Common Stock so issued.

For the purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a given date shall be the sum of (A) the number of shares of Common Stock outstanding, (B) the number of shares of Common Stock into which the then outstanding shares of Series Preferred could be converted if fully converted on the day immediately preceding the given date, and (C) the number of shares of Common Stock that are issuable upon the exercise or conversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date.

(ii) No adjustment shall be made to the Series Preferred Conversion Price in an amount less than one percent (1%) of the Series Preferred Conversion Price then in effect. Any adjustment otherwise required by this Section 4(h) that is not required to be made due to the first sentence of this subsection (ii) shall be included in any subsequent adjustment to the Series Preferred Conversion Price. Any adjustment required by this Section 4(h) shall be rounded to the first decimal for which such rounding represents less than one percent (1%) of the Series Preferred Conversion Price in effect after such adjustment.

(iii) For the purpose of making any adjustment required under this Section 4(h), the aggregate consideration received by the Company for any issue or sale of securities (the “Aggregate Consideration”) shall be defined as: (A) to the extent it consists of cash, the gross amount of cash received by the Company before deduction of any underwriting or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issue or sale and without deduction of any expenses payable by the Company, (B) to the extent it consists of property other than cash, the fair market value of that property as determined in good faith by the Board, and (C) if Additional Shares of Common Stock, Convertible Securities (as defined below) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration that covers both, the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.

9.

(iv) For the purpose of the adjustment required under this Section 4(h), if the Company issues or sells (x) Preferred Stock or other stock, options, warrants, purchase rights or other securities exercisable for or convertible into, Additional Shares of Common Stock (such convertible stock or securities being herein referred to as “Convertible Securities”) or (y) rights or options for the purchase of Additional Shares of Common Stock or Convertible Securities and if the Effective Price (as defined below) of such Additional Shares of Common Stock is less than the Series Preferred Conversion Price, in each case the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities plus:

(A) in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options; and

(B) in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company upon the conversion thereof (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities); provided that if the minimum amounts of such consideration cannot be ascertained, but are a function of antidilution or similar protective clauses, the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses.

(C) If the minimum amount of consideration payable to the Company upon the exercise or conversion of rights, options or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason of antidilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; provided further, that if the minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the increased minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities.

(D) No further adjustment of the Series Preferred Conversion Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of Additional Shares of Common Stock or the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the Series Preferred Conversion Price as adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the Series Preferred Conversion Price that would have been in effect had an adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities, provided that such readjustment shall not apply to prior conversions of Series Preferred.

10.

(v) For the purpose of making any adjustment to the Conversion Price of the Series Preferred required under this Section 4(h), “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this Section 4(h) (including shares of Common Stock subsequently reacquired or retired by the Company), other than:

(A) shares of Common Stock issued upon conversion of the Series Preferred;

(B) shares of Common Stock or Convertible Securities issued after the Original Issue Date to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board;

(C) shares of Common Stock issued pursuant to the exercise or conversion of Convertible Securities outstanding as of the Original Issue Date;

(D) shares of Common Stock or Convertible Securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition, strategic alliance or similar business combination approved by the Board;

(E) shares of Common Stock or Convertible Securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial or lending institution approved by the Board;

(F) shares of Common Stock or Convertible Securities issued to third-party service providers in exchange for or as partial consideration for services rendered to the Company as approved by the Board;

(G) shares of Common Stock or Convertible Securities issued in connection with strategic transactions involving the Company and other entities approved by the Board, including without limitation joint ventures, manufacturing, marketing, distribution, licensing, collaboration, technology transfer or development arrangements;

(H) shares of Common Stock issued in connection with a firm commitment underwritten public offering of the Common Stock pursuant to a registration statement filed with the Securities and Exchange Commission and declared effective under the Securities Act of 1933, as amended, in connection with which all outstanding shares of Series Preferred are converted into Common Stock; and

(I) shares of Common Stock or Convertible Securities that the holders of a majority of the outstanding shares of Series Preferred elect in writing to exclude from the definition of “Additional Shares of Common Stock” for purposes of this Section 4.

11.

References to Common Stock in the subsections of this clause (v) above shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this Section 4(h). The “Effective Price” of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 4(h), into the Aggregate Consideration received, or deemed to have been received by the Company for such issue under this Section 4(h), for such Additional Shares of Common Stock. In the event that the number of shares of Additional Shares of Common Stock or the Effective Price cannot be ascertained at the time of issuance, such Additional Shares of Common Stock shall be deemed issued immediately upon the occurrence of the first event that makes such number of shares or the Effective Price, as applicable, ascertainable.

(vi) In the event that the Company issues or sells, or is deemed to have issued or sold, Additional Shares of Common Stock in a Qualifying Dilutive Issuance (the “First Dilutive Issuance”), then in the event that the Company issues or sells, or is deemed to have issued or sold, Additional Shares of Common Stock in a Qualifying Dilutive Issuance other than the First Dilutive Issuance as a part of the same transaction or series of related transactions as the First Dilutive Issuance (a “Subsequent Dilutive Issuance”), then and in each such case upon a Subsequent Dilutive Issuance the Series Preferred Conversion Price shall be reduced to the Series Preferred Conversion Price that would have been in effect had the First Dilutive Issuance and each Subsequent Dilutive Issuance all occurred on the closing date of the First Dilutive Issuance.

(i) Certificate of Adjustment. In each case of an adjustment or readjustment of the Series Preferred Conversion Price for the number of shares of Common Stock or other securities issuable upon conversion of the Series Preferred, if the Series Preferred is then convertible pursuant to this Section 4, the Company, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and shall, upon request, prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to each registered holder of Series Preferred so requesting at the holder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or deemed to be received by the Company for any Additional Shares of Common Stock issued or sold or deemed to have been issued or sold, (ii) the Series Preferred Conversion Price at the time in effect, (iii) the number of Additional Shares of Common Stock and (iv) the type and amount, if any, of other property that at the time would be received upon conversion of the Series Preferred. Failure to request or provide such notice shall have no effect on any such adjustment.

(j) Notices of Record Date. Upon (i) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Acquisition or other capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company with or into any other corporation, or any Asset Transfer, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, the Company shall mail to each holder of Series Preferred at least ten (10) days prior to (x) the record date, if any, specified therein; or (y) if no record date is specified, the date upon which such action is to take effect (or, in either case, such shorter period approved by the holders of a majority of the outstanding Series Preferred) a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.

12.

(k) Automatic Conversion.

(i) Each share of Series Preferred shall automatically be converted into shares of Common Stock, based on the then-effective Series Preferred Conversion Price, (A) at any time upon the affirmative election of the holders of a majority of the outstanding shares of the Series Preferred, or (B) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Company in which (i) the per share price is at least $5.00 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof) and (ii) the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $15,000,000. Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(d).

(ii) Upon the occurrence of either of the events specified in Section 4(k)(i) above, the outstanding shares of Series Preferred shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series Preferred are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Series Preferred, the holders of Series Preferred shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Series Preferred. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Series Preferred surrendered were convertible on the date on which such automatic conversion occurred, and any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(d).

(l) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of Series Preferred. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series Preferred by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If after the aforementioned aggregation the conversion would result in the issuance of any fractional share, the Company shall, in lieu of issuing any fractional share, pay cash equal to the product of such fraction multiplied by the fair market value of one share of Common Stock (as determined by the Board) on the date of conversion.

13.

(m) Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series Preferred, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series Preferred. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series Preferred, the Company will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

(n) Notices. Any notice required by the provisions of this Section 4 shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic transmission in compliance with the provisions of the DGCL if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Company.

(o) Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Series Preferred, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series Preferred so converted were registered.

5. No Reissuance Of Series Preferred.

Any shares or shares of Series Preferred redeemed, purchased, converted or exchanged by the Company shall be cancelled and retired and shall not be reissued or transferred.

V.

A. The liability of the directors of the Company for monetary damages shall be eliminated to the fullest extent under applicable law.

B. To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article V to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

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C. Any repeal or modification of this Article V shall only be prospective and shall not affect the rights or protections or increase the liability of any director under this Article V in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

VI.

For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

A. The management of the business and the conduct of the affairs of the Company shall be vested in its Board. The number of directors that shall constitute the whole Board shall be fixed by the Board in the manner provided in the Bylaws, subject to any restrictions which may be set forth in this Restated Certificate.

B. The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Company, subject to any restrictions that may be set forth in this Restated Certificate. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of the Company, subject to any restrictions that may be set forth in this Restated Certificate.

C. The directors of the Company need not be elected by written ballot unless the Bylaws so provide.

* * * *

FOUR: This Amended and Restated Certificate of Incorporation has been duly approved by the Board of Directors of the Company.

FIVE: This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of said corporation in accordance with Section 228 of the DGCL. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.

[THIS SPACE INTENTIONALLY LEFT BLANK]

15.

In Witness Whereof, Melt Pharmaceuticals, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by its President and Chief Executive Officer this 30th day of January, 2019.

Melt Pharmaceuticals, Inc.
By:	/s/ Gregory P. Madison
Name:	Greg P. Madison
Title:	President and Chief Executive Officer

EX-3.3

Exhibit 3.3

BYLAWS

OF

MELT PHARMACEUTICALS, INC.

(hereinafter, the “Corporation”)

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1.1 Place of Meetings. Meetings of the stockholders of the Corporation for the election of directors or for any other purpose shall be held at such place, if any, either within or without the State of Delaware, as shall be designated from time to time by the board of directors of the Corporation (the “Board”). The Board may, in its sole discretion, determine that a meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a) of the General Corporation Law of the State of Delaware, as amended (the “DGCL”).

Section 1.2 Annual Meetings. The annual meeting of stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly be brought before the meeting in accordance with these Bylaws of the Corporation (as amended from time to time in accordance with the provisions hereof, these “Bylaws”) shall be held on such date and at such time as may be designated from time to time by the Board. The Board may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board.

Section 1.3 Special Meetings. Unless otherwise required by law or by the certificate of incorporation of the Corporation (as amended and restated from time to time, the “Certificate of Incorporation”), special meetings of the stockholders of the Corporation, for any purpose or purposes, may be called only by the Chairperson of the Board, the Chief Executive Officer or the Board. The ability of the stockholders of the Corporation to call a special meeting of stockholders is hereby specifically denied. At a special meeting of stockholders, only such business shall be conducted as shall be specified in the notice of meeting. The Chairperson of the Board, the Chief Executive Officer or the Board may postpone, reschedule or cancel any special meeting of stockholders previously called by any of them.

Section 1.4 Notice. Whenever stockholders of the Corporation are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and time of the meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed present in person and vote at such meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law or the Certificate of Incorporation, written notice of any meeting shall be given either personally, by mail or by electronic transmission (as defined below) (if permitted under the circumstances by the DGCL) not less than ten (10) nor more than sixty (60) days before the date of the meeting, by or at the direction of the Chairperson of the Board, the Chief Executive Officer or the Board, to each stockholder entitled to vote at such meeting as of the record date for determining stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at the stockholder’s address as it appears on the stock transfer books of the Corporation. Without limiting the manner by which notice otherwise may be effectively given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL. If notice is given by means of electronic transmission, such notice shall be deemed to be given at the times provided in the DGCL. Any stockholder may waive notice of any meeting before or after the meeting. The attendance of a stockholder at any meeting shall constitute a waiver of notice at such meeting, except where the stockholder attends the meeting for the express purpose of objecting, and does so object, at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

Section 1.5 Adjournments. Any meeting of stockholders of the Corporation may be adjourned or recessed from time to time to reconvene at the same or some other place, if any, by holders of a majority of the voting power of the Corporation’s capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, though less than a quorum, or by the chairperson of the meeting, and notice need not be given of any such adjourned or recessed meeting if the time and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned or recessed meeting, are announced at the meeting at which the adjournment or recess is taken. At the adjourned or recessed meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, notice of the adjourned meeting in accordance with the requirements of Section 1.4 of these Bylaws shall be given to each stockholder of record entitled to vote at the meeting. If, after the adjournment, a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

Section 1.6 Quorum. Unless otherwise required by applicable law or the Certificate of Incorporation, the holders of a majority of the voting power of the Corporation’s capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders. If a quorum shall not be present or represented at any meeting of stockholders, either the chairperson of the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 1.5 of these Bylaws, until a quorum shall be present or represented. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

Section 1.7 Voting.

(a) Matters Other Than Election of Directors. Any matter brought before any meeting of stockholders of the Corporation, other than the election of directors, shall be decided by the affirmative vote of the holders of a majority of the voting power of the Corporation’s capital stock present in person or represented by proxy at the meeting and entitled to vote on such matter, voting as a single class, unless the matter is one upon which, by express provision of law, the Certificate of Incorporation or these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such matter. Except as provided in the Certificate of Incorporation, every stockholder having the right to vote shall have one vote for each share of stock having voting power registered in such stockholder’s name on the books of the Corporation. Such votes may be cast in person or by proxy as provided in Section 1.9 of these Bylaws. The Board, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in such officer’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

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(b) Election of Directors. Unless otherwise required by law or the Certificate of Incorporation, election of directors at all meetings of the stockholders at which directors are to be elected shall be by a plurality of the votes cast at any meeting for the election of directors at which a quorum is present.

Section 1.8 Treasury Stock. Shares of stock of the Corporation belonging to the Corporation shall not be voted at any meeting of stockholders of the Corporation and shall not be counted in the total number of outstanding shares for the purpose of determining whether a quorum is present. Nothing in this Section 1.8 shall limit the right of the Corporation to vote shares of stock of the Corporation held by it in a fiduciary capacity.

Section 1.9 Proxies. Each stockholder entitled to vote at a meeting of stockholders of the Corporation may authorize another person or persons to act for such stockholder by proxy filed with the secretary of the Corporation (the “Secretary”) before or at the time of the meeting. No such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.

Section 1.10 List of Stockholders Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make or have prepared and made, at least ten (10) days before every meeting of stockholders of the Corporation, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the record date for determining the stockholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing in this Section 1.10 shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

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Section 1.11 Record Date. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders of the Corporation or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, but the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 1.11 at the adjourned meeting.

Section 1.12 Organization and Conduct of Meetings. The Board may designate any director or officer of the Corporation (including any Chairperson of the Board) to act as chairperson of any meeting of stockholders. The Board may adopt by resolution such rules and regulations for the conduct of any meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess or adjourn the meeting to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (c) rules and procedures for maintaining order at the meeting and the safety of those present, including compliance with any state and local laws and regulations concerning safety, health and security; (d) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized proxies or such other persons as the chairperson of the meeting shall determine; (e) restrictions on entry to the meeting after the time fixed for the commencement of the meeting; (f) limitations on the time allotted to questions or comments by participants; (g) removal of any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines; (h) restrictions on the use of audio and video recording devices, cell phones and other electronic devices; (i) any requirement for attendees to provide the Corporation advance notice of their intent to attend the meeting and (j) any guidelines and procedures as the chairperson may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting to the extent consistent with Section 211(a) of the DGCL, whether such meeting is to be held at a designated place or solely by means of remote communication. The chairperson of a stockholder meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall determine and declare to the meeting that a matter or business was not properly brought before the meeting, and, if the chairperson should so determine, the chairperson shall so declare to the meeting and any such matter of business not properly brought before the meeting shall not be transacted or considered. Except to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

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Section 1.13 Inspectors of Election. In advance of any meeting of stockholders of the Corporation, the Chairperson of the Board, the Chief Executive Officer or the Board, by resolution, shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

Section 1.14 Notice of Stockholder Proposals and Director Nominations.

(a) Annual Meetings of Stockholders. Nominations of persons for election to the Board and the proposal of business other than nominations to be considered by the stockholders may be made at an annual meeting of stockholders only: (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto) with respect to such annual meeting given by or at the direction of the Board (or any duly authorized committee thereof), (ii) otherwise properly brought before such annual meeting by or at the direction of the Board (or any duly authorized committee thereof), or (iii) by any stockholder of the Corporation who (A) is a stockholder of record on the date of the giving of the notice provided for in this Section 1.14 through the date of such annual meeting, (B) is entitled to vote at such annual meeting and (C) complies with the notice procedures set forth in this Section 1.14. For the avoidance of doubt, compliance with the foregoing clause (iii) shall be the exclusive means for a stockholder to make nominations or to propose any other business at an annual meeting of stockholders (other than a proposal included in the Corporation’s proxy materials pursuant to and in compliance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”)).

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(b) Timing of Notice for Annual Meetings. In addition to any other applicable requirements, for nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 1.14(a) above, the stockholder must have given timely notice thereof in proper written form to the Secretary, and, in the case of business other than nominations, such business must be a proper matter for stockholder action. To be timely, such notice must be received by the Secretary at the principal executive offices of the Corporation not later than the Close of Business on the ninetieth (90th) day, or earlier than the Close of Business on the one hundred twentieth (120th) day, prior to the first anniversary of the date of the preceding year’s annual meeting of stockholders (which anniversary date, in the case of the first annual meeting of stockholders following the closing of the Corporation’s initial underwritten public offering of common stock, shall be deemed to be May 15, 2022); provided, however, that if the date of the annual meeting of stockholders is more than thirty (30) days prior to, or more than sixty (60) days after, the first anniversary of the date of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, to be timely, a stockholder’s notice must be so received not earlier than the Close of Business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the Close of Business on the later of (i) the ninetieth (90th) day prior to such annual meeting and (ii) the tenth (10th) day following the day on which public disclosure (as defined below) of the date of the meeting is first made by the Corporation. In no event shall the adjournment, recess, postponement or rescheduling of an annual meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of notice as described above.

(c) Form of Notice. To be in proper written form, the notice of any stockholder giving notice under this Section 1.14 (each, a “Noticing Party”) must set forth:

(i) as to each person whom such Noticing Stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”), if any:

(A) the name, age, business address and residence address of such Proposed Nominee;

(B) the principal occupation and employment of such Proposed Nominee;

(C) a written questionnaire with respect to the background and qualification of such Proposed Nominee, completed by such Proposed Nominee in the form required by the Corporation (which form such Noticing Stockholder shall request in writing from the Secretary prior to submitting notice and which the Secretary shall provide to such Noticing Stockholder within ten (10) days after receiving such request);

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(D) a written representation and agreement completed by such Proposed Nominee in the form required by the Corporation (which form such Noticing Stockholder shall request in writing from the Secretary prior to submitting notice and which the Secretary shall provide to such Noticing Stockholder within ten (10) days after receiving such request) providing that such Proposed Nominee: (I) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Proposed Nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such Proposed Nominee’s ability to comply, if elected as a director of the Corporation, with such Proposed Nominee’s fiduciary duties under applicable law; (II) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director or nominee that has not been disclosed to the Corporation; (III) will, if elected as a director of the Corporation, comply with all applicable rules of any securities exchanges upon which the Corporation’s securities are listed, the Certificate of Incorporation, these Bylaws and all applicable publicly disclosed corporate governance, ethics, conflict of interest, confidentiality and stock ownership and trading policies and other guidelines and policies of the Corporation generally applicable to directors (which will be provided to such Proposed Nominee within five (5) business days after the Secretary receives any written request therefor from such Proposed Nominee), and all applicable fiduciary duties under state law; (IV) consents to being named as a nominee in a proxy statement and form of proxy for the meeting and to serving a full term as a director of the Corporation, if elected; and (V) will provide facts, statements and other information in all communications with the Corporation and its stockholders that are or will be true and correct in all material respects and that do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

(E) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings, written or oral, during the past three (3) years, and any other material relationships, between or among such Proposed Nominee, on the one hand, and such Noticing Stockholder or any Stockholder Associated Person (as defined below), on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K as if such Noticing Stockholder and any Stockholder Associated Person were the “registrant” for purposes of such rule and the Proposed Nominee were a director or executive officer of such registrant; and

(F) all other information relating to such Proposed Nominee or such Proposed Nominee’s associates that would be required to be disclosed in a proxy statement or other filing required to be made by such Noticing Party or any Stockholder Associated Person in connection with the solicitation of proxies for the election of directors in a contested election or otherwise required pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (collectively, the “Proxy Rules”).

(ii) as to any other business that such Noticing Stockholder proposes to bring before the meeting:

(A) a reasonably brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting;

(B) the text of the proposal or business (including the complete text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Certificate of Incorporation or these Bylaws, the language of the proposed amendment); and

(C) all other information relating to such business that would be required to be disclosed in a proxy statement or other filing required to be made by such Noticing Stockholder or any Stockholder Associated Person in connection with the solicitation of proxies in support of such proposed business by such Noticing Party or any Stockholder Associated Person pursuant to the Proxy Rules.

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(iii) as to such Noticing Party, any Proposed Nominee, and any other Stockholder Associated Persons:

(A) the name and address of such Noticing Party, any Proposed Nominee, and any other Stockholder Associated Person (including, as applicable, as they appear on the Corporation’s books and records);

(B) the class, series and number of shares of each class or series of capital stock (if any) of the Corporation that are, directly or indirectly, owned beneficially and/or of record by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person and the date or dates such shares were acquired and the investment intent of such acquisition;

(C) the name of each nominee holder for, and number of, any securities of the Corporation owned beneficially but not of record by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person and any pledge by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person with respect to any of such securities;

(D) any Short Interest (as defined below) held by or involving such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person;

(E) a complete and accurate description of all agreements, arrangements or understandings, written or oral, (including any derivative or short positions, profit interests, hedging transactions, options, warrants, convertible securities, stock appreciation or similar rights and borrowed or loaned shares) that have been entered into by, or on behalf of, such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the price of any securities of the Corporation, or maintain, increase or decrease the voting power of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person with respect to securities of the Corporation, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation (any of the foregoing, a “Derivative Instrument”);

(F) any substantial interest, direct or indirect (including any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in the Corporation or any affiliate thereof, other than an interest arising from the ownership of securities of the Corporation where such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

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(G) a complete and accurate description of all agreements, arrangements or understandings, written or oral, (I) between or among such Noticing Party and any of the Stockholder Associated Persons or (II) between or among such Noticing Party or any Stockholder Associated Person and any other person or entity (naming each such person or entity) or any Proposed Nominee, including, without limitation, (x) any proxy, contract, arrangement, understanding or relationship pursuant to which such Noticing Party or any Stockholder Associated Person has a right to vote any security of the Corporation, (y) any understanding, written or oral, that such Noticing Party or any Stockholder Associated Person may have reached with any stockholder of the Corporation (including the name of such stockholder) with respect to how such stockholder will vote such stockholder’s shares in the Corporation at any meeting of the Corporation’s stockholders or take other action in support of any Proposed Nominee or other business, or other action to be taken, by such Noticing Party or any Stockholder Associated Person and (z) any other agreements that would be required to be disclosed by such Noticing Party, any Proposed Nominee, any other Stockholder Associated Person or any other person or entity pursuant to Item 5 or Item 6 of a Schedule 13D pursuant to Section 13 of the Exchange Act and the rules and regulations promulgated thereunder (regardless of whether the requirement to file a Schedule 13D is applicable to such Noticing Party, any Proposed Nominee, any other Stockholder Associated Person or any other person or entity);

(H) any rights to dividends on the shares of the Corporation owned beneficially by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person that are separated or separable from the underlying shares of the Corporation;

(I) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership, limited liability company or similar entity in which such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person is (I) a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership or (II) the manager, managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of such limited liability company or similar entity;

(J) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person;

(K) any direct or indirect interest of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, without limitation, any employment agreement, collective bargaining agreement or consulting agreement);

(L) a description of any material interest of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in the business proposed by such Noticing Party, if any, or the election of any Proposed Nominee;

(M) a complete an accurate description of any performance-related fees (other than an asset-based fee) to which such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person may be entitled as a result of any increase or decrease in the value of the Corporation’s securities or any Derivative Instruments, including, without limitation, any such interests held by members of any Proposed Nominee’s or any other Stockholder Associated Person’s immediate family sharing the same household; and

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(N) all other information relating to such Noticing Party or any Stockholder Associated Person, or such Noticing Party’s or any Stockholder Associated Person’s associates, that would be required to be disclosed in a proxy statement or other filing in connection with the solicitation of proxies in support of the business proposed by such Noticing Party, if any, or for the election of any Proposed Nominee in a contested election or otherwise pursuant to the Proxy Rules.

(iv) a representation that such Noticing Party (or a Qualified Representative (as defined below) of such Noticing Party) intends to appear in person at the meeting to bring such business before the meeting or nominate any Proposed Nominees, as applicable, and an acknowledgment that, if such Noticing Party (or a Qualified Representative (as defined below) of such Noticing Party) does not appear to present such business or Proposed Nominees, as applicable, at such meeting, the Corporation need not present such business or Proposed Nominees for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation;

(v) a complete and accurate description of any pending or, to such Noticing Party’s knowledge, threatened legal proceeding in which such Noticing Party, any Proposed Nominee or any other Stockholder Associated Person is a party or participant involving the Corporation or, to such Noticing Party’s knowledge, any officer, affiliate or associate of the Corporation;

(vi) a representation from such Noticing Party as to whether such Noticing Party or any Stockholder Associated Person intends or is part of a group that intends (I) to deliver a proxy statement and/or form of proxy to a number of holders of the Corporation’s voting shares reasonably believed by such Noticing Party to be sufficient to approve or adopt the business to be proposed or elect the Proposed Nominees, as applicable, (II) to engage in a solicitation (within the meaning of Exchange Act Rule 14a-1(l)) with respect to the nomination or other business, as applicable, and if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange Act) in such solicitation and/or (III) to solicit proxies in support of director nominees other than the Corporation’s director nominees in accordance with Rule 14a-19 under the Exchange Act; and

(vii) a description of any agreement, arrangement or understanding, written or oral, the effect or intent of which is to increase or decrease the voting power of such Noticing Party or any Stockholder Associated Person with respect to any shares of the capital stock of the Corporation, without regard to whether such agreement, arrangement or understanding is required to be reported on a Schedule 13D in accordance with the Exchange Act.

(d) Additional Information. In addition to the information required above, the Corporation may require any Noticing Party to furnish such other information as the Corporation may reasonably require to determine the eligibility or suitability of a Proposed Nominee to serve as a director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such Proposed Nominee, under the listing standards of each securities exchange upon which the Corporation’s securities are listed, any applicable rules of the Securities and Exchange Commission (“SEC”), any publicly disclosed standards used by the Board in selecting nominees for election as a director and for determining and disclosing the independence of the Corporation’s directors, including those applicable to a director’s service on any of the committees of the Board, or the requirements of any other laws or regulations applicable to the Corporation. If requested by the Corporation, any supplemental information required under this paragraph shall be provided by a Noticing Party within ten (10) days after it has been requested by the Corporation.

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(e) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting (or any supplement thereto). Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (or any supplement thereto) (i) by or at the direction of the Board (or any duly authorized committee thereof) or (ii) provided that one or more directors are to be elected at such meeting pursuant to the Corporation’s notice of meeting, by any stockholder of the Corporation who (A) is a stockholder of record on the date of the giving of the notice provided for in this Section 1.14(e) through the date of such special meeting, (B) is entitled to vote at such special meeting and upon such election and (C) complies with the notice procedures set forth in this Section 1.14(e). In addition to any other applicable requirements, for director nominations to be properly brought before a special meeting by a stockholder pursuant to the foregoing clause (ii), such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, such notice must be received by the Secretary at the principal executive offices of the Corporation not earlier than the Close of Business on the one hundred twentieth (120th) day prior to such special meeting and not later than the Close of Business on the later of (x) the ninetieth (90th) day prior to such special meeting and (y) the tenth (10th) day following the day on which public disclosure of the date of the meeting is first made by the Corporation. In no event shall an adjournment, recess, postponement or rescheduling of a special meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. To be in proper written form, such notice shall include all information required pursuant to Section 1.15(c) and Section 1.15(d) above.

(f) General.

(i) No person shall be eligible for election as a director of the Corporation unless the person is nominated by a stockholder in accordance with the procedures set forth in this Section 1.14 or the person is nominated by the Board, and no business shall be conducted at a meeting of stockholders of the Corporation except business brought by a stockholder in accordance with the procedures set forth in this Section 1.14 or by the Board. The number of nominees a stockholder may nominate for election at a meeting may not exceed the number of directors serving in the class that is up for election at such meeting on the date the notice is first given. Except as otherwise provided by law, the chairperson of a meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these Bylaws, and, if the chairperson of the meeting determines that any proposed nomination or business was not properly brought before the meeting, the chairperson shall declare to the meeting that such nomination shall be disregarded or such business shall not be transacted, and no vote shall be taken with respect to such nomination or proposed business, in each case, notwithstanding that proxies with respect to such vote may have been received by the Corporation. Notwithstanding the foregoing provisions of this Section 1.14, unless otherwise required by law, if the Noticing Party (or a Qualified Representative of the Noticing Party) proposing a nominee for director or business to be conducted at a meeting does not appear at the meeting of stockholders of the Corporation to present such nomination or propose such business, such proposed nomination shall be disregarded or such proposed business shall not be transacted, as applicable, and no vote shall be taken with respect to such nomination or proposed business, notwithstanding that proxies with respect to such vote may have been received by the Corporation.

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(ii) A Noticing Party shall update such notice, if necessary, such that the information provided or required to be provided in such notice shall be true and correct (A) as of the record date for determining the stockholders entitled to receive notice of the meeting and (B) as of the date that is ten (10) business days prior to the meeting (or any postponement, rescheduling or adjournment thereof), and such update shall be received by the Secretary at the principal executive offices of the Corporation (x) not later than the Close of Business five (5) business days after the record date for determining the stockholders entitled to receive notice of such meeting (in the case of an update required to be made under clause (A)) and (y) not later than the Close of Business seven (7) business days prior to the date for the meeting or, if practicable, any postponement, rescheduling or adjournment thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been postponed, rescheduled or adjourned) (in the case of an update required to be made pursuant to clause (B)). For the avoidance of doubt, any information provided pursuant to this Section 1.14(e)(ii) shall not be deemed to cure any deficiencies in a notice previously delivered pursuant to this Section 1.14 and shall not extend the time period for the delivery of notice pursuant to this Section 1.14. If a Noticing Party fails to provide such written update within such period, the information as to which written update relates may be deemed to not have been provided in accordance with this Section 1.14.

(iii) If any information submitted pursuant to this Section 1.14 by any Noticing Party proposing individuals to nominate for election or reelection as a director or business for consideration at a stockholder meeting shall be inaccurate in any respect, such information shall be deemed not to have been provided in accordance with this Section 1.14. Any such Noticing Party shall notify the Secretary in writing at the principal executive offices of the Corporation of any inaccuracy or change in any information submitted pursuant to this Section 1.14 within two (2) business days after becoming aware of such inaccuracy or change. Upon written request of the Secretary on behalf of the Board (or a duly authorized committee thereof), any such Noticing Party shall provide, within seven (7) business days after delivery of such request (or such other period as may be specified in such request), (A) written verification, reasonably satisfactory to the Board, any committee thereof or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by such Noticing Party pursuant to this Section 1.14 and (B) a written affirmation of any information submitted by such Noticing Party pursuant to this Section 1.14 as of an earlier date. If a Noticing Party fails to provide such written verification or affirmation within such period, the information as to which written verification or affirmation was requested may be deemed not to have been provided in accordance with this Section 1.14.

(iv) Notwithstanding the foregoing provisions of this Section 1.14, a stockholder shall also comply with all applicable requirements of state law and the Exchange Act with respect to the matters set forth in this Section 1.14. Nothing in this Section 1.14 shall be deemed to affect any rights of (A) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) stockholders to request inclusion of nominees in the Corporation’s proxy statement pursuant to the Proxy Rules.

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(v) For purposes of these Bylaws, (A) “affiliate” and “associate” each shall have the respective meanings set forth in Rule 12b-2 under the Exchange Act; (B) “beneficial owner” or “beneficially owned” shall have the meaning set forth for such terms in Section 13(d) of the Exchange Act; (C) “Close of Business” shall mean 5:00 p.m. Eastern Time on any calendar day, whether or not the day is a business day; (D) “public disclosure” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act; (E) a “Qualified Representative” of a Noticing Party means (I) a duly authorized officer, manager or partner of such Noticing Party or (II) a person authorized by a writing executed by such Noticing Party (or a reliable reproduction or electronic transmission of the writing) delivered by such Noticing Party to the Corporation prior to the making of any nomination or proposal at a stockholder meeting stating that such person is authorized to act for such Noticing Party as proxy at the meeting of stockholders, which writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, must be produced at the meeting of stockholders; (F) “Short Interest” shall mean any agreement, arrangement, understanding, relationship or otherwise, including, without limitation, any repurchase or similar so-called “stock borrowing” agreement or arrangement, involving any Noticing Party or any Stockholder Associated Person of any Noticing Party directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Noticing Party or any Stockholder Associated Person of any Noticing Party with respect to any class or series of shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of shares of the Corporation; and (G) “Stockholder Associated Person” shall mean, with respect to any Noticing Party, (I) any member of the immediate family of such Noticing Party sharing the same household, (II) any person who is a member of a “group” (as such term is used in Rule 13d-5 under the Exchange Act (or any successor provision at law)) with or otherwise acting in concert with such Noticing Party or Stockholder Associated Person with respect to the stock of the Corporation, (III) any beneficial owner of shares of stock of the Corporation owned of record by such Noticing Party or Stockholder Associated Person (other than a stockholder that is a depositary), (IV) any affiliate or associate of such Noticing Party or any Stockholder Associated Person, and (V) any Proposed Nominee.

ARTICLE II
DIRECTORS

Section 2.1 Number. The Board shall consist of not less than three directors and not more than 15 directors as fixed from time to time solely by resolution of a majority of the total number of directors that the Corporation would have if there were no vacancies. Each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification, or removal.

Section 2.2 Duties and Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation required to be exercised or done by the stockholders.

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Section 2.3 Meetings. The Board may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board may be held at such time and at such place as may from time to time be determined by the Board. Special meetings of the Board may be called by the Chairperson of the Board (if there be one), the Chief Executive Officer or the Board and shall be held at such place, on such date and at such time as he, she or it shall specify.

Section 2.4 Notice. Notice of any meeting of the Board stating the place, date and time of the meeting shall be given to each director by mail posted not less than five (5) days before the date of the meeting, by nationally recognized overnight courier deposited not less than two (2) days before the date of the meeting or by email, facsimile or other means of electronic transmission delivered or sent not less than twenty-four (24) hours before the date and time of the meeting, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. If mailed or sent by overnight courier, such notice shall be deemed to be given at the time when it is deposited in the United States mail with first class postage prepaid or deposited with the overnight courier. Notice by facsimile or other electronic transmission shall be deemed given when the notice is transmitted. Any director may waive notice of any meeting before or after the meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where the director attends the meeting for the express purpose of objecting, and does so object, at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in any notice of such meeting unless so required by law. A meeting may be held at any time without notice if all of the directors are present or if those not present waive notice of the meeting in accordance with Section 6.7 of these Bylaws.

Section 2.5 Organization. At each meeting of the Board, as may be determined by the Board, any Chairperson of the Board or any Lead Director, or, in the absence of any Chairperson of the Board and/or any Lead Director, a director chosen by the Board, shall act as chairperson. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an assistant secretary shall perform the duties of secretary at such meeting, and in the absence from any such meeting of the Secretary and all assistant secretaries, the chairperson of the meeting may appoint any person to act as secretary of the meeting.

Section 2.6 Resignations and Removals of Directors. Any director of the Corporation may resign at any time, by giving notice in writing or by electronic transmission to the Chairperson of the Board, the Chief Executive Officer or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the occurrence of some other event, and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Except as otherwise provided by the Certificate of Incorporation, the stockholders holding a majority of the shares then entitled to vote at an election of directors may remove any director from office with or without cause.

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Section 2.7 Vacancies and Newly Created Directorships. Except as otherwise provided by the Certificate of Incorporation, vacancies occurring on the Board for any reason and newly created directorships resulting from an increase in the number of directors shall be filled only by vote of a majority of the remaining members of the Board, although less than a quorum, or by a sole remaining director, and not by the stockholders.

Section 2.8 Quorum. At all meetings of the Board, a majority of directors constituting the Board shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

Section 2.9 Actions of the Board by Written Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all the members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and any such consent may be documented, signed, and delivered in any manner permitted by Section 116 of the DGCL.

Section 2.10 Telephonic Meetings. Members of the Board, or any committee thereof, may participate in a meeting of the Board or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear and speak with each other, and participation in a meeting pursuant to this Section 2.10 shall constitute presence in person at such meeting.

Section 2.11 Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation and, to the extent permitted by law, to have and exercise such authority as may be provided for in the resolutions creating such committee, as such resolutions may be amended from time to time. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any absent or disqualified member. Each committee shall keep regular minutes and report to the Board when required. A majority of any committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have the power at any time to fill vacancies in, to change the membership of or to dissolve any such committee.

Section 2.12 Compensation. The Board and/or any committee of the Board shall have the authority to fix the compensation of directors. The directors shall be paid their reasonable expenses, if any, of attendance at each meeting of the Board or any committee thereof and may be paid a fixed sum for attendance at each such meeting and an annual retainer or salary for service as director or committee member, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Directors who are full-time employees of the Corporation shall not receive any compensation for their service as director.

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Section 2.13 Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of the Corporation’s directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof that authorizes the contract or transaction, or solely because any such director’s or officer’s vote is counted for such purpose if: (a) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (b) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board, a committee thereof or the stockholders. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee that authorizes the contract or transaction.

ARTICLE III
OFFICERS

Section 3.1 General. The officers of the Corporation shall be chosen by the Board (or, in the case of any officer other than the Chief Executive Officer or any Chairperson of the Board, by either the Board or the Chief Executive Officer). The officers of the Corporation shall include a Chief Executive Officer, a Chief Financial Officer, a Secretary and a Treasurer. In addition, the Board in its discretion may choose a Chairperson of the Board, and the Board or the Chief Executive Officer, in their discretion, may choose any President, one or more Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers and such other officers as either the Board or the Chief Executive Officer, as applicable, from time to time may deem appropriate. Any two or more offices may be held by the same person. The officers of the Corporation need not be stockholders of the Corporation.

Section 3.2 Election; Term. The Board (or, in the case of any officer other than the Chief Executive Officer, either the Board or the Chief Executive Officer) shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board or the Chief Executive Officer, as applicable, and each officer of the Corporation shall hold office until such officer’s successor is elected and qualified, or until such officer’s earlier death, resignation or removal. Any officer may be removed at any time by the Board (or, in the case of any officer other than the Chief Executive Officer, either the Board or the Chief Executive Officer). Any officer may resign upon notice given in writing or electronic transmission to the Chief Executive Officer or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the occurrence of some other event. Any vacancy occurring in any office of the Corporation shall be filled in the manner prescribed in this Article III for the regular election to such office.

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Section 3.3 Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, the Secretary or any other officer authorized to do so by the Board, and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board may, by resolution, from time to time confer like powers upon any other person or persons.

Section 3.4 Chief Executive Officer. The Chief Executive Officer shall, subject to the control of the Board, have general supervision over the business of the Corporation and shall direct the affairs and policies of the Corporation. The Chief Executive Officer may also serve as Chairperson of the Board and may also serve as President, if so elected by the Board. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these Bylaws or by the Board.

Section 3.5 Chairperson of the Board. A Chairperson of the Board (if any) may be chosen from among the directors and may be the Chief Executive Officer. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the Chairperson of the Board, if any, shall preside at all meetings of stockholders and of the Board unless otherwise determined by the Board. The Chairperson of the Board, if any, shall have such other powers and duties as may from time to time be assigned by the Board.

Section 3.6 President. The President (if any) shall act in a general executive capacity and shall assist the Chief Executive Officer in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. The President shall, in the absence of or because of the inability to act of the Chief Executive Officer, perform all duties of the Chief Executive Officer. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these Bylaws, the Board or the Chief Executive Officer.

Section 3.7 Chief Financial Officer. The Chief Financial Officer shall be the principal financial officer of the Corporation. The Chief Financial Officer shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these Bylaws, the Board or the Chief Executive Officer.

Section 3.8 Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. The Executive Vice Presidents (if any), Senior Vice Presidents (if any) and such other Vice Presidents as shall have been chosen by the Board or the Chief Executive Officer shall have such powers and shall perform such duties as shall be assigned to them by the Board or the Chief Executive Officer.

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Section 3.9 Secretary. The Secretary shall give the requisite notice of meetings of stockholders and directors and shall record the proceedings of such meetings, shall have custody of the seal of the Corporation and shall affix it or cause it to be affixed to such instruments as require the seal and attest it and, besides the Secretary’s powers and duties prescribed by law, shall have such other powers and perform such other duties as shall at any time be assigned to such officer by the Board or the Chief Executive Officer.

Section 3.10 Treasurer. The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Treasurer shall cause the funds of the Corporation to be deposited in such banks as may be authorized by the Board or in such banks as may be designated as depositaries in the manner provided by resolution of the Board. The Treasurer shall have such other powers and perform such other duties as shall at any time be assigned to such officer by the Board or the Chief Executive Officer.

Section 3.11 Assistant Secretaries. Assistant Secretaries, if there be any, shall assist the Secretary in the discharge of the Secretary’s duties, shall have such powers and perform such other duties as shall at any time be assigned to them by the Board or the Chief Executive Officer and, in the absence or disability of the Secretary, shall perform the duties of the Secretary’s office, subject to the control of the Board or the Chief Executive Officer.

Section 3.12 Assistant Treasurers. Assistant Treasurers, if there be any, shall assist the Treasurer in the discharge of the Treasurer’s duties, shall have such powers and perform such other duties as shall at any time be assigned to them by the Board or the Chief Executive Officer and, in the absence or disability of the Treasurer, shall perform the duties of the Treasurer’s office, subject to the control of the Board or the Chief Executive Officer.

Section 3.13 Other Officers. Such other officers as the Board or the Chief Executive Officer may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board or the Chief Executive Officer. The Board may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE IV
Indemnification

Section 4.1 Indemnification. The Corporation shall indemnify and hold harmless to the fullest extent permitted by the DGCL and other applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or participant in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, member, manager, trustee, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or other entity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding, and such right to indemnification shall inure to the benefit of such person’s heirs, executors and personal and legal representatives. Notwithstanding the foregoing, except for Proceedings to enforce any director’s or officer’s rights to indemnification or rights to advancement of expenses under these Bylaws in accordance with the provisions set forth herein, the Corporation shall be required to indemnify any officer or director in connection with a Proceeding (or part thereof) commenced by such person only if the commencement of such Proceeding (or part thereof) by the person was authorized in the specific case by the Board.

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Section 4.2 Advancement of Expenses. The Corporation shall pay the expenses (including attorneys’ fees) actually and reasonably incurred by a director or officer of the Corporation if such director or officer becomes a party to or participant in any Proceeding by reason of or arising from any indemnifiable event in advance of the final disposition of such Proceeding, upon receipt of an undertaking by or on behalf of such officer or director to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such officer or director is not entitled to be indemnified for such expenses under this Section 4.2 or otherwise. Payment of such expenses actually and reasonably incurred by such officer or director may be made by the Corporation, subject to such terms and conditions as the Corporation in his or her discretion deems appropriate.

Section 4.3 Non-Exclusivity of Rights. The rights to indemnification and advancement of expenses conferred on any person by this Article IV will not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these by-laws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts or arrangements with any or all of its directors, officers, employees, or agents respecting indemnification and advances, to the fullest extent permitted by the DGCL.

Section 4.4 Other Indemnification. The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise, or nonprofit entity.

Section 4.5 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or nonprofit entity against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of the DGCL.

Section 4.6 Persons Other Than Directors and Officers. This Article IV shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to, or to purchase and maintain insurance on behalf of, persons other than those persons described in the first sentence of Section 4.1 or to advance expenses to persons other than directors or officers of the Corporation.

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Section 4.7 Effect of Modifications. Any amendment, repeal or modification of any provision contained in this Article IV shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to further limit or eliminate the liability of directors or officers) and shall not adversely affect any right or protection of any current or former director or officer of the Corporation existing at the time of such amendment, repeal or modification with respect to any acts or omissions occurring prior to such amendment, repeal or modification.

ARTICLE V

STOCK

Section 5.1 Uncertificated Shares. Unless otherwise provided by resolution of the Board, each class or series of shares of the Corporation’s capital stock shall be issued in uncertificated form pursuant to the customary arrangements for issuing shares in such form. Shares shall be transferable only on the books of the Corporation by the holder thereof in person or by attorney upon presentment of proper evidence of succession, assignation or authority to transfer in accordance with the customary procedures for transferring shares in uncertificated form.

Section 5.2 Record Date. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board adopts the resolution relating thereto.

Section 5.3 Record Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

Section 5.4 Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board.

ARTICLE VI
MISCELLANEOUS

Section 6.1 Contracts. The Board may authorize any officer or officers or any agent or agents to enter into any contract or execute and deliver any instrument or other document in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

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Section 6.2 Disbursements. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time designate.

Section 6.3 Fiscal Year. The fiscal year of the Corporation shall end on the 31st day of December in each year or on such other day as may be fixed from time to time by resolution of the Board.

Section 6.4 Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware,” or such other form as approved by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

Section 6.5 Offices. The Corporation shall maintain a registered office inside the State of Delaware and may also have other offices outside or inside the State of Delaware. The books of the Corporation may be kept (subject to any applicable law) outside the State of Delaware at the principal executive offices of the Corporation or at such other place or places as may be designated from time to time by the Board.

Section 6.6 Conflicts with Applicable Law or Certificate of Incorporation. These Bylaws are adopted subject to applicable law and the Certificate of Incorporation. In the event that these Bylaws conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such applicable law or the Certificate of Incorporation.

Section 6.7 Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the DGCL or these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or any regular or special meeting of the Board or committee thereof need be specified in any waiver of notice of such meeting unless so required by law.

ARTICLE VII
AMENDMENTS

Subject to Section 8.5 below, these Bylaws may be adopted, amended, altered or repealed by the Board or by the stockholders of the Corporation by the affirmative vote of the holders of at least a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE VIII
EMERGENCY BYLAWS

Section 8.1 Emergency Bylaws. This Article VIII shall be operative during any emergency, disaster or catastrophe, as referred to in Section 110 of the DGCL, or other similar emergency condition (including, without limitation, a pandemic), as a result of which a quorum of the Board or a committee thereof cannot readily be convened for action (each, an “Emergency”), notwithstanding any different or conflicting provision of the preceding Sections of these Bylaws or in the Certificate of Incorporation. To the extent not inconsistent with the provisions of this Article VIII, the preceding Sections of these Bylaws and the provisions of the Certificate of Incorporation shall remain in effect during such Emergency, and upon termination of such Emergency, the provisions of this Article VIII shall cease to be operative unless and until another Emergency shall occur.

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Section 8.2 Meetings; Notice. During any Emergency, a meeting of the Board or any committee thereof may be called by any member of the Board or such committee or the Chair of the Board, the Chief Executive Officer, the President or the Secretary of the Corporation. Notice of the place, date and time of the meeting shall be given by any available means of communication by the person calling the meeting to such of the directors or committee members and Designated Officers (as defined below) as, in the judgment of the person calling the meeting, it may be feasible to reach. Such notice shall be given at such time in advance of the meeting as, in the judgment of the person calling the meeting, circumstances permit.

Section 8.3 Quorum. At any meeting of the Board called in accordance with Section 8.2 above, the presence or participation of one director shall constitute a quorum for the transaction of business, and at any meeting of any committee of the Board called in accordance with Section 8.2 above, the presence or participation of one committee member shall constitute a quorum for the transaction of business. In the event that no directors are able to attend a meeting of the Board, or any committee thereof, then the Designated Officers in attendance shall serve as directors, or committee members, as the case may be, for the meeting, without any additional quorum requirement and will have full powers to act as directors, or committee members, as the case may be, of the Corporation.

Section 8.4 Liability. No officer, director or employee of the Corporation acting in accordance with the provisions of this Article VIII shall be liable except for willful misconduct.

Section 8.5 Amendments. At any meeting called in accordance with Section 8.2 above, the Board, or any committee thereof, as the case may be, may modify, amend or add to the provisions of this Article VIII as it deems it to be in the best interests of the Corporation so as to make any provision that may be practical or necessary for the circumstances of the Emergency.

Section 8.6 Repeal or Change. The provisions of this Article VIII shall be subject to repeal or change by further action of the Board or by action of the stockholders, but no such repeal or change shall modify the provisions of Section 8.4 above with regard to action taken prior to the time of such repeal or change.

Section 8.7 Definitions. For purposes of this Article VIII, the term “Designated Officer” means an officer identified on a numbered list of officers of the Corporation who shall be deemed to be, in the order in which they appear on the list up until a quorum is obtained, directors of the Corporation, or members of a committee of the Board, as the case may be, for purposes of obtaining a quorum during an Emergency, if a quorum of directors or committee members, as the case may be, cannot otherwise be obtained during such Emergency, which officers have been designated by the Board from time to time but in any event prior to such time or times as an Emergency may have occurred.

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Adopted as of: April 7, 2022

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EX-10.1

Exhibit 10.1

Melt Pharmaceuticals, Inc.

2018 Equity Incentive Plan

Adopted by the Board of Directors: April 15, 2018

Approved by the Stockholders: April 15, 2018

Amended by the Board of Directors: January 30, 2019

Approved by the Stockholders: January 30, 2019

Termination Date: April 15, 2028

1. General.

(a) Eligible Stock Award Recipients. Employees, Directors and Consultants are eligible to receive Stock Awards.

(b) Available Stock Awards. The Plan provides for the grant of the following types of Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards and (vi) Other Stock Awards.

(c) Purpose. The Plan, through the granting of Stock Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.

2. Administration.

(a) Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine (A) who will be granted Stock Awards; (B) when and how each Stock Award will be granted; (C) what type of Stock Award will be granted; (D) the provisions of each Stock Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Stock Award; (E) the number of shares of Common Stock subject to a Stock Award; and (F) the Fair Market Value applicable to a Stock Award.

(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Stock Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Stock Award fully effective.

1.

(iii) To settle all controversies regarding the Plan and Stock Awards granted under it.

(iv) To accelerate, in whole or in part, the time at which a Stock Award may be exercised or vest (or at which cash or shares of Common Stock may be issued).

(v) To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or a Stock Award Agreement, suspension or termination of the Plan will not impair a Participant’s rights under his or her then-outstanding Stock Award without his or her written consent except as provided in subsection (viii) below.

(vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or Stock Awards granted under the Plan compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. However, if required by applicable law, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Stock Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Stock Awards available for issuance under the Plan. Except as provided in the Plan (including subsection (viii) below) or a Stock Award Agreement, no amendment of the Plan will impair a Participant’s rights under an outstanding Stock Award unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.

(vii) To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 422 of the Code regarding Incentive Stock Options.

(viii) To approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that a Participant’s rights under any Stock Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Stock Awards without the affected Participant’s consent (A) to maintain the qualified status of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Stock Award solely because it impairs the qualified status of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Stock Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable laws.

2.

(ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Stock Awards.

(x) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Stock Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).

(xi) To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or (6) other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles.

(c) Delegation to Committee. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(d) Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following: (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Stock Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 13(u) below.

3.

(e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

3. Shares Subject to the Plan.

(a) Share Reserve.

(i) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed three million seven hundred seventy-two thousand five hundred (3,772,500) shares (the “Share Reserve”).

(ii) For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a).

(b) Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased or reacquired by the Company for any reason, including because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited, reacquired or repurchased will revert to and again become available for issuance under the Plan. For the avoidance of doubt, any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.

(c) Incentive Stock Option Limit. Subject to the Share Reserve and Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be one million two hundred fifty thousand (1,250,000) shares of Common Stock.

(d) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

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4. Eligibility.

(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from or alternatively comply with the distribution requirements of Section 409A of the Code.

(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

(c) Consultants. A Consultant will not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or sale of the Company’s securities to such Consultant is not exempt under Rule 701 because of the nature of the services that the Consultant is providing to the Company, because the Consultant is not a natural person, or because of any other provision of Rule 701, unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions.

5. Provisions Relating to Options and Stock Appreciation Rights.

Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Stock Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Stock Award Agreement or otherwise) the substance of each of the following provisions:

(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Stock Award Agreement.

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(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Stock Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Stock Award if such Stock Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

(c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:

(i) by cash, check, bank draft or money order payable to the Company;

(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv) if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations;

(v) according to a deferred payment or similar arrangement with the Optionholder; provided, however, that interest will compound at least annually and will be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income to the Company and compensation income to the Optionholder under any applicable provisions of the Code, and (B) the classification of the Option as a liability for financial accounting purposes; or

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(vi) in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Stock Award Agreement.

(d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Award Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Award Agreement evidencing such SAR.

(e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

(i) Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (and pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.

(ii) Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii) Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

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(f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

(g) Termination of Continuous Service. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Stock Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Stock Award Agreement, which period will not be less than thirty (30) days if necessary to comply with applicable laws unless such termination is for Cause) and (ii) the expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

(h) Extension of Termination Date. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement. In addition, unless otherwise provided in a Participant’s Stock Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement.

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(i) Disability of Participant. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Stock Award Agreement, which period will not be less than six (6) months if necessary to comply with applicable laws), and (ii) the expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

(j) Death of Participant. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Stock Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Stock Award Agreement, which period will not be less than six (6) months if necessary to comply with applicable laws), and (ii) the expiration of the term of such Option or SAR as set forth in the Stock Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.

(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Stock Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous Service.

(l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six (6) months following the date of grant of the Option or SAR (although the Stock Award may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Stock Award Agreement, in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six (6) months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.

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(m) Early Exercise of Options. An Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to the “Repurchase Limitation” in Section 8(l), any unvested shares of Common Stock so purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate. Provided that the “Repurchase Limitation” in Section 8(l) is not violated, the Company will not be required to exercise its repurchase right until at least six (6) months (or such longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.

(n) Right of Repurchase. Subject to the “Repurchase Limitation” in Section 8(l), the Option or SAR may include a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Participant pursuant to the exercise of the Option or SAR.

(o) Right of First Refusal. The Option or SAR may include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option or SAR. Such right of first refusal will be subject to the “Repurchase Limitation” in Section 8(l). Except as expressly provided in this Section 5(o) or in the Stock Award Agreement, such right of first refusal will otherwise comply with any applicable provisions of the bylaws of the Company.

6. Provisions of Stock Awards Other than Options and SARs.

(a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock underlying a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

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(ii) Vesting. Subject to the “Repurchase Limitation” in Section 8(l), shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

(iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

(v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

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(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(vii) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the requirements of Section 409A of the Code shall contain such provisions so that such Restricted Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions, if any, shall be determined by the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any Common Stock that is to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule.

(c) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

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7. Covenants of the Company.

(a) Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

(b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of a Stock Award or the subsequent issuance of cash or Common Stock pursuant to the Stock Award if such grant or issuance would be in violation of any applicable securities law.

(c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.

8. Miscellaneous.

(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

(b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Stock Award Agreement as a result of a clerical error in the papering of the Stock Award Agreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Stock Award Agreement.

(c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to the Stock Award has been entered into the books and records of the Company.

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(d) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder or in connection with any Stock Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(e) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee) after the date of grant of any Stock Award to the Participant, the Board has the right in its sole discretion to (x) make a corresponding reduction in the number of shares subject to any portion of such Stock Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Stock Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Stock Award that is so reduced or extended.

(f) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(g) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

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(h) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to a Stock Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Stock Award Agreement.

(i) Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

(j) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

(k) Compliance with Section 409A of the Code. To the extent that the Board determines that any Stock Award granted hereunder is subject to Section 409A of the Code, the Stock Award Agreement evidencing such Stock Award shall incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Stock Award Agreements shall be interpreted in accordance with Section 409A of the Code.

15.

(l) Repurchase Limitation. The terms of any repurchase right will be specified in the Stock Award Agreement. The repurchase price for vested shares of Common Stock will be the Fair Market Value of the shares of Common Stock on the date of repurchase. The repurchase price for unvested shares of Common Stock will be the lower of (i) the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their original purchase price. However, the Company will not exercise its repurchase right until at least six (6) months (or such longer or shorter period of time necessary to avoid classification of the Stock Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Stock Award, unless otherwise specifically provided by the Board.

9. Adjustments upon Changes in Common Stock; Other Corporate Events.

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), and (iii) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b) Dissolution. Except as otherwise provided in the Stock Award Agreement, in the event of a Dissolution of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such Dissolution, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the Dissolution is completed but contingent on its completion.

(c) Corporate Transactions. The following provisions will apply to Stock Awards in the event of a Transaction unless otherwise provided in the Stock Award Agreement or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Transaction, then, notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Transaction:

(i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Transaction);

16.

(ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii) accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective date of the Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Transaction; provided, however, that the Board may require Participants to complete and deliver to the Company a notice of exercise before the effective date of a Transaction, which exercise is contingent upon the effectiveness of such Transaction;

(iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;

(v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and

(vi) make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Transaction, over (B) any exercise price payable by such holder in connection with such exercise. For clarity, this payment may be zero ($0) if the value of the property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Common Stock in connection with the Transaction is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.

The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of a Stock Award.

(d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will automatically occur.

10. Plan Term; Earlier Termination or Suspension of the Plan.

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless terminated sooner by the Board, the Plan will automatically terminate on the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders of the Company. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

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(b) No Impairment of Rights. Suspension or termination of the Plan will not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan.

11. Effective Date of Plan.

This Plan will become effective on the Effective Date.

12. Choice of Law.

The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

13.          Definitions. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a) “Affiliate” means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such terms are defined in Rule 405. The Board will have the authority to determine the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing definition.

(b) “Board” means the Board of Directors of the Company.

(c) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(d) “Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

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(e) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any Exchange Act Person (excluding Imprimis Pharmaceuticals, Inc. and any of its Affiliates (“Imprimis”)) becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, except for a liquidation into a parent corporation; or

(iv) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to Imprimis or to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition.

Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Stock Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

19.

(f) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

(g) “Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

(h) “Common Stock” means the common stock of the Company.

(i) “Company” means Melt Pharmaceuticals, Inc., a Delaware corporation.

(j) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan.

(k) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

20.

(l) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii) a sale or other disposition of more than fifty percent (50%) of the outstanding securities of the Company;

(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

(m) “Director” means a member of the Board.

(n) “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(o) “Dissolution” means when the Company, after having executed a certificate of dissolution with the State of Delaware, has completely wound up its affairs. Conversion of the Company into a Limited Liability Company will not be considered a “Dissolution” for purposes of the Plan.

(p) “Effective Date” means the effective date of this Plan, which is the earlier of (i) the date that this Plan is first approved by the Company’s stockholders, and (ii) the date this Plan is adopted by the Board.

(q) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

(r) “Entity” means a corporation, partnership, limited liability company or other entity.

(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

21.

(t) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.

(u) “Fair Market Value” means, as of any date, the value of the Common Stock determined by the Board in compliance with Section 409A of the Code or, in the case of an Incentive Stock Option, in compliance with Section 422 of the Code.

(v) “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

(w) “Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.

(x) “Officer” means any person designated by the Company as an officer.

(y) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

(z) “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

(aa) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(bb) “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(c).

(cc) “Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

(dd) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

22.

(ee) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(ff) “Plan” means this Melt Pharmaceuticals, Inc. 2018 Equity Incentive Plan, as it may be amended from time to time.

(gg) “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(hh) “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

(ii) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(jj) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

(kk) “Rule 405” means Rule 405 promulgated under the Securities Act.

(ll) “Rule 701” means Rule 701 promulgated under the Securities Act.

(mm) “Securities Act” means the Securities Act of 1933, as amended.

(nn) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

(oo) “Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

(pp) “Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right or any Other Stock Award.

(qq) “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

(rr) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

(ss) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate.

(tt) “Transaction” means a Corporate Transaction or a Change in Control.

23.

EX-10.2

Exhibit 10.2

Melt Pharmaceuticals, Inc.

Stock Option Grant Notice

(2018 Equity Incentive Plan)

Melt Pharmaceuticals, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this grant notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms herein and the Plan, the terms of the Plan will control.

Optionholder:

Date of Grant:

Vesting Commencement Date:

Number of Shares Subject to Option:

Exercise Price (Per Share):

Total Exercise Price:

Expiration Date:

Type of Grant:	☐	Incentive Stock Option1	☐	Nonstatutory Stock Option
Exercise Schedule:	☐	Same as Vesting Schedule	☐	Early Exercise Permitted
Vesting Schedule:	[●]

Payment: By one or a combination of the following items (described in the Option Agreement):

☒ By cash, check, bank draft or money order payable to the Company

☒ Pursuant to a Regulation T Program if the shares are publicly traded

☒ By delivery of already-owned shares if the shares are publicly traded

☒ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of Common Stock pursuant to the option specified above and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception, if applicable, of (i) the written employment agreement, offer letter or other written agreement entered into between the Company and Optionholder specifying the terms that govern this option, and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law.

¹ If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

By accepting this option, Optionholder acknowledges having received and read this Stock Option Grant Notice, the Option Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Melt Pharmaceuticals, Inc.	Optionholder
Signature	Signature
By:	Date:
Its:
Date:

Attachments: Option Agreement, 2018 Equity Incentive Plan and Notice of Exercise

Attachment I

Option Agreement

Melt Pharmaceuticals, Inc.

2018 Equity Incentive Plan

Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement, Melt Pharmaceuticals, Inc. (the “Company”) has granted you an option under its 2018 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the meanings given to them in the Plan.

The details of your option, in addition to those set forth in the Grant Notice, are as follows:

1. Vesting. Your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service.

2. Number of Shares and Exercise Price. The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

3. Exercise Restriction for Non-Exempt Employees. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary in the case of (i) your death or Disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s benefit plans).

4. Exercise prior to Vesting (“Early Exercise”). If permitted in your Grant Notice (i.e., the “Exercise Schedule” indicates “Early Exercise Permitted”) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the unvested portion of your option; provided, however, that:

(a) a partial exercise of your option will be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

(b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;

(c) you will enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

(d) if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory Stock Options.

5. Method of Payment. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by your Grant Notice, which may include one or more of the following:

(a) Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.

(b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

(c) If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

6. Whole Shares. You may exercise your option only for whole shares of Common Stock.

7. Securities Law Compliance. In no event may you exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if not registered, the Company has determined that such exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

8. Term. You may not exercise your option before the Date of Grant or after the expiration of the option’s term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a) immediately upon the termination of your Continuous Service for Cause;

(b) the Expiration Date indicated in your Grant Notice; or

(c) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

9. Exercise.

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

(d) By accepting your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rules or regulation(the “Lock-Up Period”); provided, however, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 9(d). The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

10. Transferability. Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

(a) Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(c) Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

11. Right of First Refusal. Shares of Common Stock that you acquire upon exercise of your option are subject to any right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right; provided, however, that if there is no right of first refusal described in the Company’s bylaws at such time, the right of first refusal described below will apply. The Company’s right of first refusal will expire on the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on a national securities exchange or quotation system (the “Listing Date”).

(a) Prior to the Listing Date, you may not validly Transfer (as defined below) any shares of Common Stock acquired upon exercise of your option, or any interest in such shares, unless such Transfer is made in compliance with the following provisions:

(i) Before there can be a valid Transfer of any shares of Common Stock or any interest therein, the record holder of the shares of Common Stock to be transferred (the “Offered Shares”) will give written notice (by registered or certified mail) to the Company. Such notice will specify the identity of the proposed transferee, the cash price offered for the Offered Shares by the proposed transferee (or, if the proposed Transfer is one in which the holder will not receive cash, such as an involuntary transfer, gift, donation or pledge, the holder will state that no purchase price is being proposed), and the other terms and conditions of the proposed Transfer. The date such notice is mailed will be hereinafter referred to as the “Notice Date” and the record holder of the Offered Shares will be hereinafter referred to as the “Offeror.” If, from time to time, there is any stock dividend, stock split or other change in the character or amount of any of the outstanding Common Stock which is subject to the provisions of your option, then in such event any and all new, substituted or additional securities to which you are entitled by reason of your ownership of the shares of Common Stock acquired upon exercise of your option will be immediately subject to the Company’s Right of First Refusal (as defined below) with the same force and effect as the shares subject to the Right of First Refusal immediately before such event.

(ii) For a period of thirty (30) calendar days after the Notice Date, or such longer period as may be required to avoid the classification of your option as a liability for financial accounting purposes, the Company will have the option to purchase all (but not less than all) of the Offered Shares at the purchase price and on the terms set forth in Section 11(a)(iii) (the Company’s “Right of First Refusal”). In the event that the proposed Transfer is one involving no payment of a purchase price, the purchase price will be deemed to be the Fair Market Value of the Offered Shares as determined in good faith by the Board in its discretion. The Company may exercise its Right of First Refusal by mailing (by registered or certified mail) written notice of exercise of its Right of First Refusal to the Offeror prior to the end of said thirty (30) days (including any extension required to avoid classification of the option as a liability for financial accounting purposes).

(iii) The price at which the Company may purchase the Offered Shares pursuant to the exercise of its Right of First Refusal will be the cash price offered for the Offered Shares by the proposed transferee (as set forth in the notice required under Section 11(a)(i)), or the Fair Market Value as determined by the Board in the event no purchase price is involved. To the extent consideration other than cash is offered by the proposed transferee, the Company will not be required to pay any additional amounts to the Offeror other than the cash price offered (or the Fair Market Value, if applicable). The Company’s notice of exercise of its Right of First Refusal will be accompanied by full payment for the Offered Shares and, upon such payment by the Company, the Company will acquire full right, title and interest to all of the Offered Shares.

(iv) If, and only if, the option given pursuant to Section 11(a)(ii) is not exercised, the Transfer proposed in the notice given pursuant to Section 11(a)(i) may take place; provided, however, that such Transfer must, in all respects, be exactly as proposed in said notice except that such Transfer may not take place either before the tenth (10^th) calendar day after the expiration of the thirty (30) day option exercise period or after the ninetieth (90^th) calendar day after the expiration of the thirty (30) day option exercise period, and if such Transfer has not taken place prior to said ninetieth (90^th) day, such Transfer may not take place without once again complying with this Section 11(a). The option exercise periods in this Section 11(a)(iv) will be adjusted to include any extension required to avoid the classification of your option as a liability for financial accounting purposes.

(b) As used in this Section 11, the term “Transfer” means any sale, encumbrance, pledge, gift or other form of disposition or transfer of shares of Common Stock or any legal or equitable interest therein; provided, however, that the term Transfer does not include a transfer of such shares or interests by will or intestacy to your Immediate Family (as defined below). In such case, the transferee or other recipient will receive and hold the shares of Common Stock so transferred subject to the provisions of this Section, and there will be no further transfer of such shares except in accordance with the terms of this Section. As used herein, the term “Immediate Family” will mean your spouse, the lineal descendant or antecedent, father, mother, brother or sister, child, adopted child, grandchild or adopted grandchild of you or your spouse, or the spouse of any child, adopted child, grandchild or adopted grandchild of you or your spouse.

(c) None of the shares of Common Stock purchased on exercise of your option will be transferred on the Company’s books nor will the Company recognize any such Transfer of any such shares or any interest therein unless and until all applicable provisions of this Section 11 have been complied with in all respects. The certificates of stock evidencing shares of Common Stock purchased on exercise of your option will bear an appropriate legend referring to the transfer restrictions imposed by this Section 11.

(d) To ensure that the shares subject to the Company’s Right of First Refusal will be available for repurchase by the Company, the Company may require you to deposit the certificates evidencing the shares that you purchase upon exercise of your option with an escrow agent designated by the Company under the terms and conditions of an escrow agreement approved by the Company. If the Company does not require such deposit as a condition of exercise of your option, the Company reserves the right at any time to require you to so deposit the certificates in escrow. As soon as practicable after the expiration of the Company’s Right of First Refusal, the agent will deliver to you the shares and any other property no longer subject to such restriction. In the event the shares and any other property held in escrow are subject to the Company’s exercise of its Right of First Refusal, the notices required to be given to you will be given to the escrow agent, and any payment required to be given to you will be given to the escrow agent. Within thirty (30) days after payment by the Company for the Offered Shares, the escrow agent will deliver the Offered Shares that the Company has repurchased to the Company and will deliver the payment received from the Company to you.

12. Right of Repurchase. To the extent provided in the Company’s bylaws in effect at such time the Company elects to exercise its right, the Company will have the right to repurchase all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.

13. Option not a Service Contract. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

14. Withholding Obligations.

(a) At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

(b) If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

15. Tax Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option. Because the Common Stock is not traded on an established securities market, the Fair Market Value is determined by the Board, perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge that there is no guarantee that the Internal Revenue Service will agree with the valuation as determined by the Board, and you will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that the valuation determined by the Board is less than the “fair market value” as subsequently determined by the Internal Revenue Service.

16. Notices. Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17. Governing Plan Document. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. Your option (and any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntarily terminate employment upon a resignation for “good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.

18. Effect on Other Employee Benefit Plans. The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

19. Stockholder Rights. You will not have any rights as a stockholder of the Company with respect to the shares to be issued pursuant to this option until such shares are issued to you. Upon such issuance, you will obtain full rights as a stockholder of the Common Stock of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

20. Choice of Law. The interpretation, performance and enforcement of this Option Agreement shall be governed by the laws of the State of Delaware without regard to that state’s conflicts of laws rules.

21. Severability. If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

22. Miscellaneous.

(a) The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option.

(c) You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your option, and fully understand all provisions of your option.

(d) This Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

* * * * *

This Option Agreement shall be deemed to be signed by the Company and the Optionholder upon the signing by the Optionholder of the Stock Option Grant Notice to which it is attached.

Attachment II

2018 Equity Incentive Plan

Attachment III

Notice of Exercise

NOTICE OF EXERCISE

Melt Pharmaceuticals, Inc.

200 Reservoir Street, Suite 303

Needham, MA 02464 Date of Exercise: _______________

This constitutes notice to Melt Pharmaceuticals, Inc. (the “Company”) under my stock option that I elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) for the price set forth below.

Type of option (check one):	Incentive ☐	Nonstatutory ☐
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of:	_______________	_______________
Total exercise price:	$______________	$______________
Cash, check, bank draft or money order payment delivered herewith:	$______________	$______________
[Value of ________ Shares delivered herewith1:	$______________	$______________]
[Value of ________ Shares pursuant to net exercise2:	$______________	$______________]
[Regulation T Program (cashless exercise3):	$______________	$______________]

¹ Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

² The option must be a Nonstatutory Stock Option, and Melt Pharmaceuticals, Inc. must have established net exercise procedures at the time of exercise, in order to utilize this payment method.

³ Shares must meet the public trading requirements set forth in the option.

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 2018 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option.

I hereby make the following certifications and representations with respect to the number of Shares listed above, which are being acquired by me for my own account upon exercise of the option as set forth above:

I acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I have no present intention of distributing or selling said Shares, except as permitted under the Securities Act and any applicable state securities laws.

I further acknowledge that I will not be able to resell the Shares for at least ninety (90) days after the stock of the Company becomes publicly traded (i.e., subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply to affiliates of the Company under Rule 144.

I further acknowledge that all certificates representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company’s articles of incorporation, bylaws and/or applicable securities laws.

I further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act (or such longer period as the underwriters or the Company shall request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation) (the “Lock-Up Period”). I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.

Very truly yours,

EX-10.3

Exhibit 10.3

Melt Pharmaceuticals, Inc.

Restricted Stock Award Grant Notice

(2018 Equity Incentive Plan)

Melt Pharmaceuticals, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby awards to Participant, in consideration of Participant’s services to the Company pursuant to the written consulting agreement between the Company and Participant (the “Consulting Agreement”), a restricted stock award .covering the number of shares of the Company’s Common Stock set forth below. The restricted stock award is subject to all of the terms and conditions as set forth herein, in the Restricted Stock Award Agreement, the Plan, the Assignment Separate from Certificate and the Joint Escrow Instructions, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Restricted Stock Award Agreement will have the same definitions as in the Plan or the Restricted Stock Award Agreement, as applicable. If there is any conflict between the terms herein and the Plan, the terms of the Plan will control.

Participant:	_____________________
Date of Grant:	_____________________
Vesting Commencement Date:	_____________________
Number of Shares Subject to Award:	_____________________
Consideration:	_____________________

Vesting Schedule: [●]

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Award Grant Notice, the Restricted Stock Award Agreement and the Plan. Participant acknowledges and agrees that this Restricted Stock Award Grant Notice and the Restricted Stock Award Agreement may not be modified, amended or revised except as provided therein or in the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Award Grant Notice, the Restricted Stock Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) equity awards previously granted and delivered to Participant, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement that would provide for vesting acceleration of this restricted stock award upon the terms and conditions set forth therein. By accepting this restricted stock award, Participant consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Melt Pharmaceuticals, Inc.	Participant:
Signature	Signature
By:	Date:
Its:
Date:

Attachments:

Attachment I:	Restricted Stock Award Agreement
Attachment II:	2018 Equity Incentive Plan
Attachment III:	Assignment Separate from Certificate
Attachment IV:	Joint Escrow Instructions
Attachment V:	Instructions for Filing 83(b) Election

Attachment I

MELT PHARMACEUTICALS, INC.

Restricted Stock Award Agreement

(2018 Equity Incentive Plan)

Pursuant to the Restricted Stock Award Grant Notice (the “Grant Notice”) and this Restricted Stock Award Agreement (the “Agreement” and together with the Grant Notice, the “Award”) and its 2018 Equity Incentive Plan (the “Plan”), Melt Pharmaceuticals, Inc. (the “Company”) has awarded you, in exchange for your services to the Company, the number of shares of the Company’s Common Stock subject to the Award as indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Plan will have the same definitions as in the Plan. If there is any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control.

The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows:

1. Vesting. Subject to the limitations contained herein, your Award will vest pursuant to the Vesting Schedule in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service (after taking into account any vesting acceleration that occurs as a result of such termination of Continuous Service described in the Vesting Schedule in the Grant Notice). “Vested Shares” will mean shares subject to your Award that have vested in accordance with the Vesting Schedule, and “Unvested Shares” will mean shares subject to your Award that have not vested in accordance with the Vesting Schedule.

2. Number of Shares. The number of shares subject to your Award may be adjusted from time to time for Capitalization Adjustments.

3. Securities Law Compliance. In no event may you be issued any shares of Common Stock under your Award unless the shares are either then registered under the Securities Act or, if not registered, the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award and the issuance of shares of Common Stock under your Award also must comply with all other applicable laws and regulations, and you will not receive any shares of Common Stock under your Award if the Company determines that such receipt would not be in material compliance with such laws and regulations.

4. Reacquisition Right.

(a) Reacquisition Right. In the event your Continuous Service terminates, the Company will automatically reacquire (the “Reacquisition Right”) on the date that is ninety (90) days after the termination of your Continuous Service (the “Reacquisition Date”) all Unvested Shares as of the date of your termination of Continuous Service (after taking into account any vesting acceleration that occurs as a result of such termination of Continuous Service described in the Vesting Schedule in the Grant Notice) without any payment to you (that is, for zero dollars ($0)) and without any required action or notice to you. You hereby agree to take whatever action the Company deems necessary to effectuate the Company’s reacquisition of the Unvested Shares. Following such reacquisition, the Company will become the legal and beneficial owner of the Unvested Shares being reacquired and all rights and interests in and related to such shares, and the Company will have the right to transfer to its own name the Unvested Shares being reacquired by the Company without further action by you. Notwithstanding anything to the contrary in this Section 4(a) or in this Agreement, the Company may elect to waive, in its sole discretion, its Reacquisition Right in whole or in part by providing written notice to you (with a copy to the Escrow Agent, as defined in Section 7), at any time prior to or on the Reacquisition Date, and the Escrow Agent may then release to you the number of shares of Common Stock not being reacquired by the Company.

(b) Capitalization Adjustments. In the event of a Capitalization Adjustment, then any and all new, substituted or additional securities or other property to which you are entitled by reason of your ownership of the Unvested Shares will be immediately subject to the Reacquisition Right with the same force and effect as the Unvested Shares subject to the Reacquisition Right immediately before such event, but only to the extent the Unvested Shares were at the time covered by the Reacquisition Right.

(c) Corporate Transactions. To the extent the Reacquisition Right remains in effect following a Corporate Transaction or Change in Control, unless otherwise provided by the Board pursuant to the terms of the Plan, it will apply to the new capital stock, cash or other property received in exchange for the Unvested Shares in consummation of the Corporate Transaction or Change in Control, as applicable, but only to the extent the Unvested Shares were at the time covered by such right.

(d) Termination of Reacquisition Right. The Company’s Reacquisition Right will terminate upon the earlier of (i) the Company’s reacquisition in full of the Unvested Shares (or waiver of the Reacquisition Right) and (ii) the expiration of the Company’s Reacquisition Right.

5. Transfer Restrictions. In addition to any other limitation on transfer created by applicable securities laws, you will not sell, assign, hypothecate, donate, encumber or otherwise dispose of all or any part of the Unvested Shares or any interest in the Unvested Shares while such shares are subject to the Company’s Reacquisition Right; provided, however, that an interest in the Unvested Shares may be transferred pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974. In the case of Vested Shares, you will not sell, assign, hypothecate, donate, encumber or otherwise dispose of all or any part of the Vested Shares or any interest in the Vested Shares except in compliance with this Agreement (including without limitation Section 6), the Company’s bylaws and applicable securities laws.

6. Right of First Refusal. The Vested Shares will be subject to any right of first refusal applicable to shares of the Company’s capital stock owned by you or issued to you provided in the Company’s bylaws in effect at such time as the Company elects to exercise its right. To the extent that the Vested Shares are not subject to a right of first refusal provided in the Company’s bylaws at such time as the Company elects to exercise its right, the Company will have a right of first refusal as to the Vested Shares on the terms and conditions in this Section 6 (the “Right of First Refusal”). The Company’s Right of First Refusal will expire on the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on a national securities exchange or quotation system (the “Listing Date”).

(a) Prior to the Listing Date, you may not validly Transfer (as defined below) the Vested Shares, or any interest in the Vested Shares, unless such Transfer is made in compliance with the following provisions:

(i) Before there can be a valid Transfer of any Vested Shares or any interest in the Vested Shares, the record holder of the shares to be transferred (the “Offered Shares”) will give written notice (by registered or certified mail) to the Company. Such notice will specify the identity of the proposed transferee, the cash price offered for the Offered Shares by the proposed transferee (or, if the proposed Transfer is one in which the holder will not receive cash, such as an involuntary transfer, gift, donation or pledge, the holder will state that no purchase price is being proposed), and the other terms and conditions of the proposed Transfer. For purposes of this Section 6, the term “Notice Date” means the date such notice is mailed and the term “Offeror” means the record holder of the Offered Shares. If, from time to time, there is any stock dividend, stock split or other change in the character or amount of any of the outstanding Common Stock, then in such event any and all new, substituted or additional securities to which you are entitled by reason of your ownership of the Common Stock acquired under this Agreement will be immediately subject to the Company’s Right of First Refusal with the same force and effect as the shares subject to the Right of First Refusal immediately before such event.

(ii) For a period of thirty (30) calendar days after the Notice Date, or such longer period as may be required to avoid the classification of the Award as a liability for financial accounting purposes, the Company will have the option to purchase all (but not less than all) of the Offered Shares at the purchase price and on the terms set forth in Section 6(a)(iii). In the event that the proposed Transfer is one involving no payment of a purchase price, the purchase price will be deemed to be the Fair Market Value of the Offered Shares as determined in good faith by the Board in its discretion. The Company may exercise its Right of First Refusal by mailing (by registered or certified mail) written notice of exercise of its Right of First Refusal to the Offeror prior to the end of said thirty (30) days, as adjusted to include any extension required to avoid classification of the Award as a liability for financial accounting purposes.

(iii) The price at which the Company may purchase the Offered Shares pursuant to the exercise of its Right of First Refusal will be the cash price offered for the Offered Shares by the proposed transferee (as set forth in the notice required under Section 6(a)(i)), or the Fair Market Value as determined by the Board in the event no purchase price is involved. To the extent consideration other than cash is offered by the proposed transferee, the Company will not be required to pay any additional amounts to the Offeror other than the cash price offered (or the Fair Market Value, if applicable). The Company’s notice of exercise of its Right of First Refusal will be accompanied by full payment for the Offered Shares and, upon such payment by the Company, the Company will acquire full right, title and interest to all of the Offered Shares.

(iv) If, and only if, the option given pursuant to Section 6(a)(ii) is not exercised, the Transfer proposed in the notice given pursuant to Section 6(a)(i) may take place; provided, however, that such Transfer must, in all respects, be exactly as proposed in said notice except that such Transfer may not take place either before the tenth calendar day after the expiration of said thirty (30)-day option exercise period or after the ninetieth (90^th) calendar day after the expiration of said thirty (30)-day option exercise period, and if such Transfer has not taken place prior to said ninetieth (90^th) day, such Transfer may not take place without once again complying with this Section 6. The option exercise periods in Section 6(a)(ii) will be adjusted to include any extension required to avoid the classification of the Award as a liability for financial accounting purposes.

(b) As used in Sections 6, the term “Transfer” means any sale, encumbrance, pledge, gift or other form of disposition or transfer of the Vested Shares or any legal or equitable interest in the Vested Shares; provided, however, that the term Transfer does not include a transfer of such shares or interests by will or intestacy to your Immediate Family (as defined below). In such case, the transferee or other recipient will receive and hold the shares so transferred subject to the provisions of this Section, and there will be no further transfer of such shares except in accordance with the terms of this Section 6. As used herein, the term “Immediate Family” will mean your spouse, the lineal descendant or antecedent, father, mother, brother or sister, child, adopted child, grandchild or adopted grandchild of you or your spouse, or the spouse of any child, adopted child, grandchild or adopted grandchild of you or your spouse.

(c) No Vested Shares will be transferred on the Company’s books nor will the Company recognize any such Transfer of any such shares or any interest in the Vested Shares unless and until all applicable provisions of this Section 6 have been complied with in all respects. The certificates of stock evidencing the Vested Shares will bear an appropriate legend referring to the transfer restrictions imposed by this Section 6.

7. Escrow of Common Stock.

(a) Escrow of Unvested Shares. As security for your faithful performance of the terms of this Agreement and to ensure the availability for delivery of the Unvested Shares upon exercise of the Company’s Reacquisition Right, you agree that the shares issued under your Award will be held in escrow pursuant to the terms of the Joint Escrow Instructions attached to the Grant Notice as Attachment IV. You agree to execute and deliver to the individual designated as the escrow agent in the Joint Escrow Instructions or person’s designee (the “Escrow Agent”), (i) the Joint Escrow Instructions and (ii) two (2) Assignment Separate From Certificate forms (with date and number of shares blank) substantially in the form attached to the Grant Notice as Attachment III and deliver the same, along with the certificate or certificates evidencing the shares, to be held and used by the Escrow Agent pursuant to the terms of the Joint Escrow Instructions.

(b) Escrow of Vested Shares. Following the termination of the escrow of the Unvested Shares (as described in Section 7(a)) and the release of such shares, to ensure that the Vested Shares will be available for repurchase by the Company in the event the Company exercises its Right of First Refusal, the Company may require you to deposit the certificates evidencing the Vested Shares that you acquire under this Agreement with an escrow agent designated by the Company under the terms and conditions of an escrow agreement approved by the Company. If the Company does not require such deposition as a condition of your acquisition of the shares of Common Stock under this Award, the Company reserves the right at any time to require you to so deposit the certificates in escrow. As soon as practicable after the expiration of the Company’s Right of First Refusal, the escrow agent will deliver to you the Vested Shares and any other property no longer subject to such restriction. In the event the Vested Shares and any other property held in escrow are subject to the Company’s Right of First Refusal, the notices required to be given to you will be given to the escrow agent. Within thirty (30) days after payment by the Company for the Offered Shares upon exercise of its Right of First Refusal, as applicable, the escrow agent will deliver the shares of Common Stock that the Company has purchased to the Company and will deliver the payment received from the Company to you.

8. Rights as Stockholder. Subject to the provisions of this Award, you will exercise all rights and privileges of a stockholder of the Company with respect to the shares of Common Stock deposited in escrow. You will be deemed to be the holder of the shares for purposes of receiving any dividends that may be paid with respect to such shares (which will be subject to the same vesting and forfeiture restrictions as apply to the shares to which they relate) and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested and been released from the Company’s Reacquisition Right.

9. Restrictive Legends. All certificates representing the Common Stock issued under your Award will be endorsed with appropriate legends determined by the Company (in addition to any other legend that may be required by other agreements between you and the Company).

10. Award not a Service Contract. Your Award is not an employment or service contract, and nothing in your Award will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an Affiliate to continue your employment. In addition, nothing in your Award will obligate the Company or an Affiliate, their respective stockholders, boards of directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

11. Withholding Obligations.

(a) At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your Award (the “Withholding Taxes”). The Company may, in its sole discretion, satisfy all or any portion of the Withholding Taxes obligation relating to your Award by any of the following means or by a combination of such means: (i) withholding from any amounts otherwise payable to you by the Company; (ii) causing you to tender a cash payment; or (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value equal to the amount of such Withholding Taxes; provided, however, that the number of such shares of Common Stock withheld may not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the maximum permitted statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income.

(b) Unless the tax withholding obligations of the Company and any Affiliate are satisfied, the Company will have no obligation to issue a certificate for such shares or release such shares from any escrow provided for in this Agreement.

12. Market Stand-Off Agreement. By acquiring shares of Common Stock under your Award, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company request or as necessary to permit compliance with FINRA Rule 2711 or NYSE Member Rule 472 and similar or successor regulatory rules and regulations (the “Lock-Up Period”); provided, however, that nothing contained in this Section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. You also agree that any transferee of any shares of Common Stock or other securities of the Company held by you will be bound by this Section. To enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section and will have the right, power and authority to enforce the provisions of this Section as though they were a party to this Agreement.

13. Tax Consequences. You agree to review with your own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. You will rely solely on such advisors and not on any statements or representations of the Company or any of its agents. You understand that you (and not the Company) will be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. You understand that Section 83 of the Code taxes as ordinary income to you the fair market value of the shares of Common Stock issued to you pursuant to the Award as of the date any restrictions on such shares lapse (that is, as of the date on which part or all of such shares vest). In this context, “restriction” includes the right of the Company to reacquire the Common Stock pursuant to the Reacquisition Right set forth above. You understand that you may elect to be taxed at the time the Common Stock is issued to you pursuant to your Award, rather than when and as the Reacquisition Right expires, by filing an election under Section 83(b) of the Code (an “83(b) Election”) with the Internal Revenue Service within thirty (30) days after the date your acquire shares of Common Stock pursuant to your Award. Even if the fair market value of the Common Stock at the time of grant of your Award equals the amount paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in the future. You understand that failure to file such an 83(b) Election in a timely manner may result in adverse tax consequences for you. You further understand that you may file an additional copy of such 83(b) Election with your federal income tax return for the calendar year in which you make such 83(b) Election. You acknowledge that the foregoing is only a summary of the effect of U.S. federal income taxation with respect to issuance of the Common Stock pursuant to your Award, and does not purport to be complete. You further acknowledge that the Company has directed you to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which you may reside, and the tax consequences of your death. You assume all responsibility for filing an 83(b) Election and paying all taxes resulting from such election or the lapse of the restrictions on the Common Stock. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(B) OF THE CODE. THE COMPANY AND ITS LEGAL COUNSEL CANNOT ASSUME RESPONSIBILITY FOR FAILURE TO FILE THE 83(B) ELECTION IN A TIMELY MANNER UNDER ANY CIRCUMSTANCES.

You further acknowledge that because the Company’s shares of Common Stock are not traded on an established securities market, the fair market value of the shares subject to your Award is determined by the Company, perhaps in consultation with an independent valuation firm retained by the Company, and you will not make any claim against the Company, or any of its officers, directors, employees, affiliates or agents regarding the valuation of the shares. You acknowledge that you are solely responsible for any taxes imposed on you as a result of the receipt of the Award and the vesting of the shares thereunder, and that the Company has not advised you, and you are not relying on, any tax advice from the Company or any of its agents.

14. Notices. Any notices provided for in your Award or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15. Governing Plan Document. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan will control. In addition, your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

16. Other Documents. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

17. Effect on Other Employee Benefit Plans. The value of this Award will not be included as compensation, earnings, salaries, or other similar teams used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

18. Severability. If all or any part of this Award or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Award or the Plan not declared to be unlawful or invalid. Any Section of this Award (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

19. Miscellaneous.

(a) The rights and obligations of the Company under your Award are transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.

*           *          *

This Restricted Stock Award Agreement will be deemed to be signed by the Company and Participant upon the signing by Participant of the Restricted Stock Award Grant Notice to which it is attached.

Attachment II

2018 EQUITY INCENTIVE PLAN

Attachment III

Assignment Separate From Certificate

For Value Received and pursuant to that certain Restricted Stock Award Grant Notice and Restricted Stock Award Agreement dated___________ (the “Award”), [Participant’s Name] hereby sells, assigns and transfers unto Melt Pharmaceuticals, Inc., a Nevada corporation (the “Company”)________________(_________) shares of the Common Stock of the Company, standing in the undersigned’s name on the books of the Company represented by Certificate No(s).___ and does hereby irrevocably constitute and appoint the Company’s Secretary as attorney-in-fact to transfer the said Common Stock on the books of the Company with full power of substitution in the premises. This Assignment Separate From Certificate may be used only in accordance with and subject to the terms and conditions of the Award, in connection with the reacquisition of shares of Common Stock of the Company issued to the undersigned pursuant to the Award, and only to the extent that such shares remain subject to the Company’s Reacquisition Right under the Award.

Dated:
	(Signature)
	(Print Name)

Instructions: Please do not fill in any blanks other than the “Signature” line and the “Print Name” line.

Attachment IV

Joint Escrow Instructions

Secretary

Melt Pharmaceuticals, Inc.

12264 El Camino Real, Suite 350

San Diego, CA 92130

Dear Sir or Madam:

As Escrow Agent for both Melt Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and the undersigned recipient (“Recipient”) of Common Stock of the Company (the “Common Stock”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of the Restricted Stock Award Grant Notice (the “Grant Notice”), dated [●] [●], [●] to which a copy of these Joint Escrow Instructions is attached as Attachment IV, and pursuant to the terms of the Restricted Stock Award Agreement (the “Agreement”), which is Attachment I to the Grant Notice, in accordance with the following instructions:

1. In the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period set forth in the Grant Notice, the Company or its affiliate or assignee, as applicable, will give to Recipient and you a written notice specifying the number of shares of Common Stock that will be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

2. At the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of shares of Common Stock being transferred, and (c) to deliver the same, together with the certificate evidencing the shares of Common Stock to be transferred, to the Company.

3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing shares of Common Stock to be held by you hereunder and any additions and substitutions to said shares of Common Stock as specified in the Grant Notice and the Agreement. Recipient does hereby irrevocably constitute and appoint you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated.

4. This escrow will terminate and the shares of Common Stock held hereunder will be released in full upon the full vesting of the shares of Common Stock in accordance with the vesting schedule set forth in the Grant Notice or upon the earlier return of the shares of Common Stock to the Company pursuant to the Company’s Reacquisition Right (as defined in the Agreement) or other forfeiture condition under the Company’s 2018 Equity Incentive Plan.

5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you will deliver all of same to Recipient and will be discharged of all further obligations hereunder; provided, however, that if at the time of termination of this escrow you are advised by the Company that the property subject to this escrow is the subject of a pledge or other security agreement, you will deliver all such property to the pledgeholder or other person designated by the Company.

6. Except as otherwise provided in these Joint Escrow Instructions, your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

7. You will be obligated only for the performance of such duties as are specifically set forth herein and may rely and will be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You will not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys will be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you will not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

9. You will not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Grant Notice, the Agreement or any documents or papers deposited or called for hereunder.

10. You will not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

11. Your responsibilities as Escrow Agent hereunder will terminate if you cease to be Secretary of the Company or if you resign by written notice to the Company. In the event of any such termination, the Secretary of the Company will automatically become the successor Escrow Agent unless the Company appoints another successor Escrow Agent and Recipient hereby confirms the appointment of such successor as Recipient’s attorney-in-fact and agent to the full extent of your appointment.

12. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto will join in furnishing such instruments.

13. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such dispute has been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you will be under no duty whatsoever to institute or defend any such proceedings.

14. Any notice required or permitted hereunder will be given in writing and will be deemed effectively given upon personal delivery, including delivery by express courier or five (5) days after deposit in the U.S. Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties ‘hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ advance written notice to each of the other parties hereto:

Company:	Melt Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, CA 92130
	Attn: Chief Financial Officer
Recipient:	___________________________
	___________________________
	___________________________
	___________________________
Escrow Agent:	Secretary
	Melt Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, CA 92130

By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Grant Notice or the Agreement.

15. You are entitled to employ such legal counsel, including without limitation Cooley LLP, and other experts as you may deem necessary to advise you in connection with your obligations hereunder. You may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. The Company will be responsible for all fees generated by such legal counsel in connection with your obligations hereunder.

16. This instrument will be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Grant Notice, the Agreement and these Joint Escrow Instructions in whole or in part.

17. These Joint Escrow Instructions will be governed by and interpreted and determined in accordance with the laws of the State of Nevada, as such laws are applied by Nevada courts to contracts made and to be performed entirely in Nevada by residents of that state.

Very truly yours,

Melt Pharmaceuticals, Inc.

By

Title

Recipient

(Signature)

(Print Name)

Escrow Agent:

(Signature)

(Print Name)

Attachment V

Instructions for Filing Section 83( b) Election

Attached is a form of election Under Section 83(b) of the Internal Revenue Code and an accompanying IRS cover letter. Please fill in your social security number and sign the election and cover letter, then proceed as follows:

a)	Make three copies of the completed election form and one copy of the IRS cover letter.
b)	Send the original signed election form and cover letter, the copy of the cover letter, and a self-addressed stamped return envelope to the Internal Revenue Service Center where you would otherwise file your tax return.1 Even if an address for an Internal Revenue Service Center is already included in the forms below, it is your obligation to verify such address. This can be done by searching for the term “where to file” on www.irs.gov or by calling 1 (800) 829-1040.
	Sending the election via certified mail, requesting a return receipt, with the certified mail number written on the cover letter is also recommended.
c)	Deliver one copy of the completed election form to Melt Pharmaceuticals, Inc.
d)	Applicable state law may require that you attach a copy of the completed election form to your 2018 state personal income tax return(s) when you file it for the year (assuming you file a state personal income tax return).2
	Please consult your personal tax advisor(s) to determine whether or not a copy of this Section 83(b) election should be filed with your state personal income tax return(s).
e)	Retain one copy of the completed election form for your personal permanent records.

Note: An additional copy of the completed election form must be delivered to the transferee (recipient) of the property if the service provider and the transferee are not the same person.

Please note that the election must be filed with the IRS within 30 days of the date of your restricted stock grant. Failure to file within that time will render the election void and you may recognize ordinary taxable income as your vesting restrictions lapse. Melt Pharmaceuticals, Inc. and its counsel cannot assume responsibility for failure to file the election in a timely manner under any circumstances.

¹ Note: Per Treasury Regulation § 1.83-2(c), the Section 83(b) election must be filed with the IRS office where the taxpayer otherwise files his or her tax return. As of October 2016, if you live in a foreign country or are a dual status alien (foreigners that will have lived both in their home country and the United States during the year in which they make the election) you should send the 83(b) election to Austin, TX 73301-0215. You can verify this is still the correct address at: http://www.irs.gov/uac/Where-to-File-Addresses-for--Taxpayers-and--Tax-Professionals-Filing-Form-1040.

² Note: Pursuant to Treasury Regulations finalized in July 2016 (Treas. Reg. § 1.83-2(c); T.D. 9779), taxpayers are no longer required to submit a copy of a Code Sec. 83(b) election with their federal personal income tax returns for the year in which the property subject to the election was transferred. However, you are strongly encouraged to retain a copy of the completed election form and the IRS filed-stamped copy of your cover letter along with a copy of the federal personal income tax return for the year in which the property subject to the election was transferred for your personal permanent records in case you ever need to demonstrate proper and timely filing (a common requirement imposed by acquirers in M&A transactions).

Section 83( B) Election

[●], 201[_]

Department of the Treasury

Internal Revenue Service

[City, State Zip]³

Re: Election Under Section 83(b)

Ladies and Gentlemen:

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares. The following information is supplied in accordance with Treasury Regulation § 1.83-2:

1. The name, social security number, address of the undersigned, and the taxable year for which this election is being made are:

Name:	______________________
Social Security Number:	______________________
Address:	______________________
	______________________

	Taxable year: Calendar year 201[_].
2.	The property that is the subject of this election: [#] shares of common stock (the “Shares”) of Melt Pharmaceuticals, Inc., a Nevada corporation (the “Company”).
3.	The date on which the Shares were transferred to the undersigned: [●], 201[_]
	The Shares are subject to the following restrictions:
	The Shares are subject to forfeiture or repurchase at less than their fair market value if certain performance milestones regarding the Company’s business do not occur within a designed time period or if the undersigned does not continue to provide services for the Company for a designated period of time. The risk of forfeiture or repurchase lapses over a specified vesting period.
4.	The fair market value of the Shares at the time of the transfer to the undersigned (determined without regard to any restriction other than a nonlapse restriction as defined in Treasury Regulation § 1.83-3(h)): $[●] per Share x [#] Shares = $[●].
5.	The amount paid for the Shares transferred: $0 per Share x [#] Shares = $0.
6.	The amount to include in gross income is: $[●].4

The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the Shares. A copy of the election also will be furnished to the person for whom the services were performed and the transferee of the Shares, if any. The undersigned is the person performing the services in connection with which the Shares were transferred.

Very truly yours,

[Name]

³ Per Treasury Regulation § 1.83-2(c), the Section 83(b) election must be filed with the IRS office where the person otherwise files his or her tax return. Assuming these are individual taxpayers who would file a Form 1040, see http://www.irs.gov/uac/Where-to-File-Addresses-for--Taxpayers-and--Tax-Professionals-Filing-Fom-1040. Use the address in the row which includes the state in which the service provider lives and in the column entitled “And you ARE NOT enclosing a payment”.

⁴ This should equal the amount in Item 4 minus the amount in Item 5.

[●], 201[_]

CERTIFIED MAIL NUMBER____________________

RETURN SERVICE REQUESTED

Department of the Treasury

Internal Revenue Service

[City, State Zip]

Re: Election Under Section 83(b) of the Internal Revenue Code

Dear Sir or Madam:

Enclosed please find an executed form of election under Section 83(b) of the Internal Revenue Code of 1986, as amended, filed with respect to an interest in Melt Pharmaceuticals, Inc.

Also enclosed is a copy of this letter and a stamped, self-addressed envelope. Please acknowledge receipt of these materials by marking the copy when received and returning it to the undersigned.

Thank you very much for your assistance.

Very truly yours,

[Name]

Enclosures

EX-10.4

Exhibit 10.4

Melt Pharmaceuticals, Inc.

Non-Employee Director
Deferred Issuance Restricted Stock Unit Grant Notice
(2018 Equity Incentive Plan)

Melt Pharmaceuticals, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby awards to Participant a Restricted Stock Unit Award for the number of Restricted Stock Units (“Units”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Deferred Issuance Restricted Stock Unit Award Agreement, both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meanings set forth in the Plan or the Deferred Issuance Restricted Stock Unit Award Agreement. In the event of any conflict between the terms in this Grant Notice or the Deferred Issuance Restricted Stock Unit Award Agreement and the Plan, the terms of the Plan will control.

Participant:

Date of Grant:

Vesting Commencement Date:

Number of Units Subject to Award:

Vesting Schedule:	[●]
Deferred Issuance Schedule:	One share of Common Stock will be issued for each Unit which vests at the time set forth in Section 6 of the Award Agreement.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Deferred Issuance Restricted Stock Unit Grant Notice, the Deferred Issuance Restricted Stock Unit Award Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Deferred Issuance Restricted Stock Unit Grant Notice, the Deferred Issuance Restricted Stock Unit Award Agreement, and the Plan set forth the entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, promises and/or representations on that subject with the if applicable, of (i) the written service agreement, offer letter or other written agreement entered into between the Company and Participant specifying the terms that govern this Award, and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law.

By accepting this Award Participant acknowledges having received and read this Deferred Issuance Restricted Stock Unit Grant Notice, the Deferred Issuance Restricted Stock Unit Award Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Melt Pharmaceuticals, Inc.	Participant:
[Name]	[Name]
[Title]
Date:	Date:

Attachments: Deferred Issuance Restricted Stock Unit Award Agreement 2018 Equity Incentive Plan

Attachment I

Melt Pharmaceuticals, Inc.

Non-Employee Director

Deferred Issuance Restricted Stock Unit Award Agreement

(2018 Equity Incentive Plan)

Pursuant to the Deferred Issuance Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Deferred Issuance Restricted Stock Unit Award Agreement (the “Agreement”) and in consideration of your services, Melt Pharmaceuticals, Inc. (the “Company”) has awarded you a Deferred Issuance Restricted Stock Unit Award (the “Award”) under its 2018 Equity Incentive Plan (the “Plan”). The Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. Certain capitalized terms used in this Agreement have the meanings set forth in Section 7 below. Capitalized terms not explicitly defined in this Agreement will have the same meanings given to them in the Plan. In the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control. The details of the Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. Grant of the Award. The Award represents the right to be issued on a future date the number of shares of the Company’s Common Stock equal to the number of Units subject to the Award as indicated in the Grant Notice upon the satisfaction of the terms set forth in this Agreement. Except as otherwise provided herein, you will not be required to make any payment to the Company with respect to your receipt of the Award, the vesting of the Units or the delivery of the Common Stock in settlement of the vesting of the Units subject to the Award.

2. Vesting. Subject to the limitations contained herein, the Award will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. Upon such termination of your Continuous Service, the Units subject to the Award that were not vested on the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such Units or any shares of Common Stock in settlement of such Units.

3. Number of Shares.

(a) The number of Units subject to the Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

(b) Any shares, cash or other property that becomes subject to the Award pursuant to this Section 3, if any, will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other shares that may be issued in settlement of the Award.

(c) Notwithstanding the provisions of this Section 3, no fractional Units or rights for fractional shares of Common Stock will be created pursuant to this Section 3. The Board will, in its discretion, determine an equivalent benefit for any fractional Units or rights to fractional shares that might be created by the adjustments referred to in this Section 3.

4. Securities Law and Other Compliance. You may not be issued any shares under the Award unless either (a) the shares are registered under the Securities Act; or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

1.

5. Transfer Restrictions.

(a) General. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of this Award or the shares issuable in respect of the Award, except as expressly provided in this Section 5. For example, you may not use shares that may be issued in respect of the Award as security for a loan. The restrictions on transfer set forth herein will lapse upon delivery to you of shares in respect of the vested portion of the Award.

(b) Death. The Award is transferable by will and by the laws of descent and distribution. In addition, upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect transactions under the Plan, designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Common Stock or other consideration to which you were entitled at the time of your death pursuant to this Agreement. In the absence of such a designation, your executor or administrator of your estate will be entitled to receive, on behalf of your estate, such Common Stock or other consideration.

(c) Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer the Award to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the Award is held in the trust, provided that you and the trustee enter into transfer and other agreements required by the Company.

(d) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer the Award or your right to receive the distribution of Common Stock or other consideration thereunder, pursuant to a domestic relations order that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this Award with the Company prior to finalizing the domestic relations order to help ensure the required information is contained within the domestic relations order.

6. Deferred Dates of Issuance.

(a) Subject to the provisions of Sections 6(b) below, if the Units vest, the Company shall deliver to you shares of Common Stock in settlement of any previously vested Units subject to the Award immediately upon the earliest of the following dates that occurs:

(i) the thirtieth (30^th) day following your death;

(ii) the thirtieth (30^th) day following your Section 409A Disability;

(iii) the date of a Section 409A Change of Control; or

(iv) the thirtieth (30^th) day following your Separation from Service; provided, however, if as of the date of your Separation from Service you are a “specified employee” (as defined under Treasury Regulations Section 1.409A-1(i)) to the extent necessary to avoid adverse tax consequences to you under Section 409A of the Code, the issuance of the shares will instead occur on the earlier of: (i) the date that is the thirtieth (30^th) day following your death and (ii) date that is six (6) months and one (1) day after your Separation from Service.

2.

(b) Notwithstanding the foregoing provisions of this Section 6, in the event that (i) you are subject to the Company’s policy permitting certain individuals to sell shares only during certain “window” periods, in effect from time to time or you are otherwise prohibited from selling shares of the Company’s Common Stock in the public market and any shares in settlement of the Award are scheduled to be delivered on a day (the “Original Distribution Date”) that does not occur during an open “window period” applicable to you, as determined by the Company in accordance with such policy, or does not occur on a date when you are otherwise permitted to sell shares of the Company’s Common Stock on the open market, (ii) you are subject to withholding for Tax-Related Items, and (iii) the Company elects not to satisfy its obligations for Tax-Related Items (as defined in Section 11) by withholding shares from your distribution, then such shares will not be delivered on such Original Distribution Date and will instead be delivered on the first business day of the next occurring open “window period” applicable to you pursuant to such policy (regardless of whether you are still providing Continuous Service at such time) or the next business day when you are not prohibited from selling shares of the Company’s Common Stock in the open market, but in no event later than the last day of the calendar year in which the Original Distribution Date occurs. The form of such delivery (e.g., a stock certificate or electronic entry evidencing such shares) will be determined by the Company.

(c) In all cases, the delivery of shares in settlement of this Award is intended to comply with the requirements of Section 409A of the Code and will be construed and administered in such a manner. The Company explicitly reserves the right to provide for earlier issuance of the shares in settlement of the Award to the extent permitted by Section 409A of the Code.

7. Definitions. As used in this Agreement, the following terms have the following meanings:

(a) “Section 409A Change of Control” shall mean the Company consummates a transaction or series of transactions constituting a Change in Control and which also results in a “change in ownership or effective control of” the Company or a change “in the ownership of a substantial portion of the assets of” the Company (as defined in Treasury Regulation Sections 1.409A-3(i)(5)(v), (vi) and (vii), without regard to any alternative definitions therein).

(b) “Section 409A Disability” means your inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, within the meaning of Section 409A(a)(2)(c)(i) of the Internal Revenue Code.

(c) “Separation from Service” means your “separation from service” from the Company as defined under Treasury Regulations Section 1.409A-1(h), without regard to any alternative definitions therein.

8. Dividends. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment.

9. Restrictive Legends. The shares issued under the Award will be endorsed with appropriate legends as determined by the Company.

3.

10. Award not a Service Contract.

(a) Your Continuous Service with the Company or an Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of the Award pursuant to Section 2 or the issuance of the shares subject to the Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan will: (i) confer upon you any right to continue in the service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of service or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

(b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to Section 2 and the schedule set forth in the Grant Notice is earned only by continuing as an director, employee or consultant at the will of the Company or an Affiliate (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth in the Grant Notice or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as a director, employee or consultant with the Company or an Affiliate for the term of this Agreement, for any period, or at all, and will not interfere in any way with your right or the right of the Company or an Affiliate to terminate your Continuous Service at any time, with or without cause and with or without notice.

11. Responsibility for Taxes.

(a) You acknowledge that, regardless of any action taken by the Company, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company in its discretion to be an appropriate charge to you even if legally applicable to the Company (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company.

(b) Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, you authorize the Company or its agent to satisfy their withholding obligations with regard to all Tax-Related Items, if any, by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company; (ii) causing you to tender a cash payment; (iii) entering on your behalf (pursuant to this authorization without further consent) into a “same day sale” commitment with a broker dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be delivered under the Award to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or its Affiliates; or (iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date shares of Common Stock are issued pursuant to Section 6) equal to the amount of such Tax-Related Items. Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the vested portion of the Award, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.

4.

(c) Finally, you agree to pay to the Company any amount of Tax-Related Items that the Company may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock if you fail to comply with your obligations, if any, in connection with the Tax-Related Items.

12. No Obligation to Minimize Taxes. You acknowledge that the Company is not making representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalent payments. Further, you acknowledge that the Company does not have any duty or obligation to minimize your liability for Tax-Related Items arising from the Award and will not be liable to you for any Tax-Related Items arising in connection with the Award. Although the Award is intended to comply with the requirements of Section 409A of the Code, the Company makes no representations to you in that regard.

13. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the Tax-Related Items arising in connection with the Award and by accepting the Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.

14. Unsecured Obligation. The Award is unfunded, and as a holder of a vested Award, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

15. Notices. Any notices provided for in the Grant Notice, this Agreement or the Plan will be given in writing and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

5.

16. Miscellaneous.

(a) The rights and obligations of the Company under the Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and obligations under the Award may only be assigned with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of the Award.

(c) You acknowledge and agree that you have reviewed the documents provided to you in relation to the Award in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting the Award, and fully understand all provisions of such documents.

(d) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

17. Governing Plan Document. The Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of the Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of the Award and those of the Plan, the provisions of the Plan will control.

18. Severability. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

19. Effect on Other Benefit Plans. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s benefit plans.

20. Amendment. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

6.

Attachment II

2018 Equity Incentive Plan

EX-10.5

Exhibit 10.5

Melt Pharmaceuticals, Inc.

Non-Employee Director and Officer

Restricted Stock Unit Grant Notice

(2018 Equity Incentive Plan)

Melt Pharmaceuticals, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby awards to Participant a Restricted Stock Unit Award for the number of Restricted Stock Units (“Units”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Restricted Stock Unit Award Agreement, both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meanings set forth in the Plan or the Restricted Stock Unit Award Agreement. In the event of any conflict between the terms in this Grant Notice or the Restricted Stock Unit Award Agreement and the Plan, the terms of the Plan will control.

Participant:	____________________________
Date of Grant:	____________________________
Vesting Commencement Date:	____________________________
Number of Units Subject to Award:	____________________________

Vesting Schedule:

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Award Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Award Agreement, and the Plan set forth the entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, promises and/or representations on that subject with the if applicable, of (i) the written service agreement, offer letter or other written agreement entered into between the Company and Participant specifying the terms that govern this Award, and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law.

By accepting this Award Participant acknowledges having received and read this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Award Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Melt Pharmaceuticals, Inc.	Participant:
Name:	Name:
Title:
Date:	Date:

Attachments:	Restricted Stock Unit Award Agreement
	2018 Equity Incentive Plan

Attachment I

Melt Pharmaceuticals, Inc.

Non-Employee Director and Officer

Restricted Stock Unit Award Agreement

(2018 Equity Incentive Plan)

Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Award Agreement (the “Agreement”) and in consideration of your services, Melt Pharmaceuticals, Inc. (the “Company”) has awarded you a Restricted Stock Unit Award (the “Award”) under its 2018 Equity Incentive Plan (the “Plan”). The Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. Capitalized terms not explicitly defined in this Agreement will have the same meanings given to them in the Plan. In the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control. The details of the Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. Grant of the Award. The Award represents the right to be issued on a future date the number of shares of the Company’s Common Stock equal to the number of Units subject to the Award as indicated in the Grant Notice upon the satisfaction of the terms set forth in this Agreement. Except as otherwise provided herein, you will not be required to make any payment to the Company with respect to your receipt of the Award, the vesting of the Units or the delivery of the Common Stock in settlement of the vesting of the Units subject to the Award.

2. Vesting. Subject to the limitations contained herein, the Award will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. Upon such termination of your Continuous Service, the Units subject to the Award that were not vested on the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such Units or any shares of Common Stock in settlement of such Units.

3. Number of Shares.

(a) The number of Units subject to the Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

(b) Any shares, cash or other property that becomes subject to the Award pursuant to this Section 3, if any, will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other shares that may be issued in settlement of the Award.

(c) Notwithstanding the provisions of this Section 3, no fractional Units or rights for fractional shares of Common Stock will be created pursuant to this Section 3. The Board will, in its discretion, determine an equivalent benefit for any fractional Units or rights to fractional shares that might be created by the adjustments referred to in this Section 3.

4. Securities Law and Other Compliance. You may not be issued any shares under the Award unless either (a) the shares are registered under the Securities Act; or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

1

5. Transfer Restrictions.

(a) General. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of this Award or the shares issuable in respect of the Award, except as expressly provided in this Section 5. For example, you may not use shares that may be issued in respect of the Award as security for a loan. The restrictions on transfer set forth herein will lapse upon delivery to you of shares in respect of the vested portion of the Award.

(b) Death. The Award is transferable by will and by the laws of descent and distribution. In addition, upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect transactions under the Plan, designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Common Stock or other consideration to which you were entitled at the time of your death pursuant to this Agreement. In the absence of such a designation, your executor or administrator of your estate will be entitled to receive, on behalf of your estate, such Common Stock or other consideration.

(c) Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer the Award to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the Award is held in the trust, provided that you and the trustee enter into transfer and other agreements required by the Company.

(d) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer the Award or your right to receive the distribution of Common Stock or other consideration thereunder, pursuant to a domestic relations order that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this Award with the Company prior to finalizing the domestic relations order to help ensure the required information is contained within the domestic relations order.

6. Settlement. Unless the Board, in its sole discretion, provides you with an election form pursuant to which you may elect otherwise, you will be entitled to settlement of the Common Stock subject to this Award, or the applicable portion thereof, at the time that the Units subject to this Award, or applicable portion thereof, vests in accordance with Section 2. Such settlement shall be made as promptly as reasonably practicable thereafter (but in no event after the fifteenth day following the applicable vesting date) through the issuance (including by a “book entry”, or a computerized or manual entry in the records of the Company or its designated agent) of shares of Common Stock equal to the number of Units that have vested pursuant to this Award.

7. Dividends. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment.

8. Restrictive Legends. The shares issued under the Award will be endorsed with appropriate legends as determined by the Company.

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9. Award not a Service Contract.

(a) Your Continuous Service with the Company or an Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of the Award pursuant to Section 2 or the issuance of the shares subject to the Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan will: (i) confer upon you any right to continue in the service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of service or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

(b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to Section 2 and the schedule set forth in the Grant Notice is earned only by continuing as an director, employee or consultant at the will of the Company or an Affiliate (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth in the Grant Notice or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as a director, employee or consultant with the Company or an Affiliate for the term of this Agreement, for any period, or at all, and will not interfere in any way with your right or the right of the Company or an Affiliate to terminate your Continuous Service at any time, with or without cause and with or without notice.

10. Responsibility for Taxes.

(a) You acknowledge that, regardless of any action taken by the Company, the ultimate liability for any U.S. federal, state, local and non-U.S. income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company in its discretion to be an appropriate charge to you even if legally applicable to the Company (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company.

(b) Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, you authorize the Company or its agent to satisfy their withholding obligations with regard to all Tax-Related Items, if any, by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company; (ii) requiring you to tender a cash payment prior to the delivery of shares of Common Stock to you; (iii) entering on your behalf (pursuant to this authorization without further consent) into a “same day sale” commitment with a broker dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be delivered under the Award to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or its Affiliates; or (iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date shares of Common Stock are issued pursuant to Section 6) equal to the amount of such Tax-Related Items. Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the vested portion of the Award, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.

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(c) Finally, you agree to pay to the Company any amount of Tax-Related Items that the Company may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock if you fail to comply with your obligations, if any, in connection with the Tax-Related Items.

11. No Obligation to Minimize Taxes. You acknowledge that the Company is not making representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalent payments. Further, you acknowledge that the Company does not have any duty or obligation to minimize your liability for Tax-Related Items arising from the Award and will not be liable to you for any Tax-Related Items arising in connection with the Award. Although the Award is intended to comply with the requirements of Section 409A of the Code, the Company makes no representations to you in that regard.

12. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the Tax-Related Items arising in connection with the Award and by accepting the Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.

13. Unsecured Obligation. The Award is unfunded, and as a holder of a vested Award, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

14. Notices. Any notices provided for in the Grant Notice, this Agreement or the Plan will be given in writing and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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15. Miscellaneous.

(a) The rights and obligations of the Company under the Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and obligations under the Award may only be assigned with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of the Award.

(c) You acknowledge and agree that you have reviewed the documents provided to you in relation to the Award in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting the Award, and fully understand all provisions of such documents.

(d) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

16. Governing Plan Document. The Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of the Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of the Award and those of the Plan, the provisions of the Plan will control.

17. Severability. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

18. Effect on Other Benefit Plans. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s benefit plans.

19. Amendment. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment adversely affecting your rights in more than a de minimis manner hereunder may be made without your written consent. Without limiting the foregoing, (a) if one or more of the payments or benefits received or to be received by you pursuant to this Agreement would cause you to incur any additional tax or interest under Section 409A of the Code, the Company may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A and in the event it is reasonably determined by the Board that, as a result of Section 409A, payments in respect of this Agreement may not be made at the time contemplated by the terms hereof without causing you to be subject to taxation under Section 409A, the Company will make such payment on the first day that would not result in you incurring any tax liability under Section 409A, which, if you are a “specified employee” within the meaning of Section 409A, shall be the first day following the six-month period beginning on the date of your termination of employment, and (b) the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

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Attachment II

2018 Equity Incentive Plan

EX-10.12

Exhibit 10.12

Execution Version

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (“Agreement”), dated as of the 1^st day of September, 2021 (the “Closing Date”), is made and entered into on the terms and conditions hereinafter set forth, by and among MELT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”); certain subsidiaries of Borrower from time to time party hereto as guarantors (each a “Guarantor” and collectively, jointly and severally, “Guarantors” and collectively with Borrower, each a “Loan Party” and collectively, “Loan Parties”); and Harrow Health, Inc., a Delaware corporation (“Harrow” or “Lender”).

Recitals:

WHEREAS, Loan Parties have requested that Lender make available to Borrower a term loan in the original principal amount of $13,500,000.00 (the “Loan”), on the terms and conditions hereinafter set forth, and for the purposes hereinafter set forth; and

WHEREAS, in order to induce Lender to make the Loan to Borrower, Loan Parties have made certain representations to and agreements with Lender; and

WHEREAS, Lender, in reliance upon the representations, agreements and inducements of Loan Parties, has agreed to make the Loan upon the terms and conditions hereinafter set forth.

Agreement:

NOW, THEREFORE, in consideration of the agreement of Lender to make the Loans, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Loan Party and Lender hereby agree as follows:

Article 1

The Loan

1.1 Defined Terms; Interpretation. Unless otherwise indicated, capitalized terms used in this Agreement shall have the meanings given such terms on Exhibit A. Any term defined herein may be used in the singular or plural. Accounting terms not defined in this Agreement shall be construed following generally accepted accounting principles in the United States (“GAAP”). References in this Agreement to “Articles”, “Sections”, “Exhibits” or “Schedules” shall be to Articles, Sections, Exhibits or Schedules of or to this Agreement unless otherwise specifically provided. “Include”, “includes” and “including” shall be deemed to be followed by “without limitation”. Except as otherwise specified herein, references to any Person include the successors and assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively. References to any statute or act shall include all related current regulations and all amendments and any successor statutes, acts and regulations. References to any agreement, instrument or document shall include all schedules, exhibits, annexes and other attachments thereto. Reference to any statute or act, without additional reference, shall be deemed to refer to federal statutes and acts of the United States.

1.2 Evidence of the Loan, Disbursement of the Loan and Repayment.

(a) Term Loan. Subject to the terms and conditions contained herein, Lender agrees to make the Loan to Borrower in the aggregate original principal amount of $13,500,000 (the outstanding principal amount of which may be increased by the amount of PIK Interest thereon). The Loan shall be disbursed in its entirety to Borrower on the Closing Date. The Loan shall be evidenced by one or more secured promissory notes dated as of even date herewith and executed by Borrower (collectively, the “Notes”). Any amount borrowed under this Section 1.2(a) and subsequently repaid or prepaid may not be reborrowed.

(b) Repayment; Loan Documents. The Loan shall be payable in accordance with the Notes. This Agreement, the Notes and any other instruments and documents executed by any Loan Party, now or hereafter evidencing or securing the Loan or required to be delivered under this Agreement and any other documents related to this Agreement are herein individually referred to as a “Loan Document” and collectively referred to as the “Loan Documents.”

1.3 Reserved.

1.4 Prepayments; Voluntary Termination. Borrowers may prepay the indebtedness evidenced by the Notes in whole or in part at any time without penalty.

1.5 Purposes of Loan and Use of Proceeds. The purpose of the Loan shall be (a) to repay certain indebtedness of Borrower, (b) to pay expenses incurred in connection with the closing of the Loan and (c) for working capital and general corporate purposes permitted by law, including the phase 2 study of Melt 100.

1.6 Interest.

(a) Interest charges shall be computed on the actual principal amount of the Loan outstanding (including, for the avoidance of doubt, any capitalized PIK Interest outstanding from time to time) at a rate per annum equal to the Interest Rate. All computations of interest shall be made on the basis of a year of 360 days for the actual number of days elapsed. Interest on the Loans shall be payable (i) monthly in cash in arrears on the first (1^st) day of each month commencing on October 1, 2021, through and including the first day of the month in which the Maturity Date occurs; provided that, at Borrower’s election, up to 100% of the accrued interest shall be paid in kind (such interest so deferred from time to time, being “PIK Interest”) and added to the principal balance of the Loan monthly on the first (1^st) day of each month and (ii) in cash on the Maturity Date.

(b) At the election of Lender, after the occurrence of an Event of Default and for so long as it continues, the outstanding Loan and other Obligations shall bear interest at rates that are three percent (3.0%) (“Default Interest”) in excess of the rates otherwise payable under this Agreement, and all such interest shall be payable on demand of Lender.

1.7 Payments. Payment of the Loan shall be interest only in accordance with Section 1.6 until the Maturity Date. The entire outstanding principal balance of the Loan and all other Obligations related thereto, together with all accrued and unpaid interest and any other amounts due under the Loan Documents, shall be due and payable in full on the Maturity Date. All payments shall be made in the manner provided in the applicable Note.

Article 2

increased costs; taxes

2.1 Increased Costs. In the event that any Change in Law or compliance by Lender (for purposes of this Section 2.1, the term “Lender” shall include Lender, and any Person controlling Lender) with any request or directive (whether or not having the force of law) from any central bank or other financial, monetary or other authority, shall:

(a) subject any Recipient to any Tax (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (iii) Connection Income Taxes) on its loans, loan principal, commitments or other obligations; or

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(b) impose on Lender any other condition, loss or expense (other than Taxes) affecting this Agreement or any other Loan Document or any portion of the Loan made by Lender hereunder;

and the result of any of the foregoing is to increase the cost to Lender, of making, converting to, continuing, renewing or maintaining its portion of the Loan hereunder by an amount that Lender deems to be material or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of the Loan by an amount that Lender deems to be material, then, upon request of Lender, Borrower shall pay Lender such additional amount as will compensate Lender for such additional cost or such reduction, as the case may be. Lender shall certify the amount of such additional cost or reduced amount to Borrower, and such certification shall be conclusive absent manifest error. Borrower shall pay such amount shown as due on any such certificate within five (5) Business Days after receipt thereof. Notwithstanding anything to the contrary in this Section 2.1, (i) Borrower shall not be required to compensate Lender pursuant to this Section 2.1 for any amounts incurred more than six (6) months prior to the date that Lender notifies Borrower of Lender’s intention to claim compensation therefor; provided that if the circumstances giving rise to such claim have a retroactive effect, then such six-month period shall be extended to include the period of such retroactive effect.

2.2 Taxes.

(a) For purposes of this Section 2.2, the term “applicable Law” includes FATCA.

(b) Any and all payments by or on account of any Obligations hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Body in accordance with applicable Law (provided that, if the applicable Withholding Agent is Lender, then such Withholding Agent shall consult Borrower regarding the appropriate deduction or withholding rate) and, if such Tax is an Indemnified Tax, then the sum payable shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.2) the applicable Recipient receives an amount equal to the sum it would have received had no such deductions been made. Without limiting any Recipients right to reimbursement or other payment hereunder, each Recipient shall reasonably cooperate with Borrower in seeking refunds of any amounts paid by Borrower that are reasonably believed not to have been correctly or legally asserted or for which it is otherwise entitled to a refund.

(c) Borrower shall timely pay any Other Taxes to the relevant Governmental Body in accordance with applicable Law.

(d) Borrower shall promptly (and in any event within ten (10) days after written demand therefor) indemnify Lender, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by Lender and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Body. A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive absent manifest error.

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(e) As soon as practicable after any payment of Indemnified Taxes by Borrower to a Governmental Body, Borrower shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Body evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

(f) If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document, it shall deliver to Borrower, at the time or times reasonably requested in writing by Borrower, such properly completed and executed documentation reasonably requested in writing by Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Lender, if reasonably requested in writing by Borrower, shall deliver such other documentation prescribed by applicable Law or reasonably requested in writing by Borrower as will enable Borrower to determine whether or not Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in Lender’s reasonable judgment such completion, execution or submission would subject Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Lender.

(g) If any party determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.2 (including by the payment of additional amounts pursuant to this Section 2.2), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.2 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Body with respect to such refund). Such indemnifying party, upon the written request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.2(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Body) in the event that such indemnified party is required to repay such refund to such Governmental Body. Notwithstanding anything to the contrary in this Section 2.2(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.2(g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.2(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h) Each party’s obligations under this Section 2.2 shall survive any assignment of rights by, or the replacement of, Lender and the repayment, satisfaction or discharge of all obligations under any Loan Document.

Article 3

Security

3.1 Grant of Security Interest. To secure the prompt payment of the Obligations and the prompt performance of each of the covenants and duties under this Agreement and the Loan Documents, each Loan Party hereby grants to Lender a security interest in any and all properties, rights and assets of each Loan Party in the following described property, in each case wherever located and whether now owned or hereafter acquired or arising (together with any other assets securing the Loan, collectively, the “Collateral”):

(a) accounts, contract rights, and all other forms of obligations owing to such Loan Party arising out of the sale or lease of goods or the rendition of services by such Loan Party (including health-care receivables), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by such Loan Party and such Loan Party’s Books relating to any of the foregoing (collectively, “Accounts”);

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(b) general intangibles and other personal property (including payment intangibles, choses or things in action, goodwill, Intellectual Property, trade names, the goodwill associated with trade names, blueprints drawings, purchase orders, customer lists, moneys due or recoverable from pension funds, route lists, moneys due under any royalty or licensing agreements, infringement claims, software, software source codes, computer programs, computer discs, computer tapes, literature, reports, catalogs deposit accounts, licenses, governmental approvals, equity interests, together with any and all dividends, distributions, cash, certificates, instruments, additional securities or other property from time to time received, receivable, distributed or distributable in respect of, in exchange for, or in substitution for any equity interests, insurance premium rebates, tax refunds, and tax refund claims) other than goods and Accounts, and such Loan Party’s Books relating to any of the foregoing (collectively, “General Intangibles”);

(c) rights to payments or performance under letters of credit, letter-of-credit rights (whether or not evidenced by a writing) and other supporting obligations, notes, drafts, instruments (including promissory notes), certificated and uncertificated securities, documents, leases, and chattel paper (whether tangible or electronic), and such Loan Party’s Books relating to any of the foregoing (collectively, “Negotiable Collateral”);

(d) inventory in which such Loan Party has any interest, including goods held for sale or lease or to be furnished under a contract of service and all of such Loan Party’s present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located, and any documents of title representing any of the above, and such Loan Party’s Books relating to any of the foregoing (collectively, “Inventory”);

(e) machinery, machine tools, motors, equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles and trailers), tools, parts, dies, jigs, goods, and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located (collectively, “Equipment”);

(f) books and records including: ledgers; records indicating, summarizing, or evidencing such Loan Party’s assets or liabilities, or the Collateral; all information relating to such Loan Party’s business operations or financial condition; and all computer programs, disc or tape files, printouts, funds or other computer prepared information, and the equipment containing such information (collectively, “Loan Party’s Books”);

(g) securities (whether certificated or uncertificated), securities accounts, commodity contracts and accounts, securities entitlements and other investment property (collectively “Investment Property”);

(h) deposit accounts (collectively “Deposit Accounts” and together with all securities accounts and commodities accounts, “Collateral Accounts”);

(i) commercial tort claims (collectively “Tort Claims”);

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(j) substitutions, replacements, additions, accessions, proceeds, cash proceeds, products to or of any of the foregoing, including, but not limited to, proceeds of insurance covering any of the foregoing, or any portion thereof, and any and all Accounts, General Intangibles, Negotiable Collateral, Inventory, Equipment, Deposit Accounts, Tort Claims, money, deposits, accounts, or other tangible or intangible property resulting from the sale or other disposition of the Accounts, General Intangibles, Negotiable Collateral, Inventory, Equipment, Deposit Accounts, Tort Claims, or any portion thereof or interest therein and the proceeds thereof; and

(k) to the extent not included in the foregoing, all other personal property of any Loan Party of any kind or description, including all cash and currency.

Notwithstanding the foregoing, Collateral shall not include (i) any lease, license, contract or other agreement of any Loan Party if the grant of a security interest in such lease, license, contract or other agreement is prohibited under the terms of such lease, license, contract or other agreement or under applicable law, but only to the extent such prohibition is not rendered unenforceable or ineffective by the UCC (as hereinafter defined) or other applicable law; provided, however, that a security interest shall attach to such lease, license, contract or other agreement immediately at such time as the condition causing such prohibition shall be eliminated or remedied, (ii) any Equipment owned by any Loan Party which is subject to a lien securing purchase money debt pursuant to documents which prohibit such party from granting any other liens in such property, but only for so long as such prohibition shall be in effect, (iii) those assets as to which Lender and Borrower reasonably agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to Lender of the security to be afforded thereby, and (iv) any “intent to use” trademark applications for which a statement of use has not been filed (but only until such statement is filed).

3.2 Perfection by Filing. Each Loan Party hereby specifically authorizes Lender at any time and from time to time to file financing statements and other similar forms, continuation statements and amendments thereto, without notice to any Loan Party, with all appropriate jurisdictions to perfect or protect Lender’s interest or rights hereunder. Such financing statements and other forms may describe the Collateral as “all personal property of debtor,” “all assets of debtor” or words to similar effect, and contain any other information required by applicable law for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including whether such Loan Party is an organization, the type of organization and any organization identification number issued to such Loan Party. Each Loan Party agrees to furnish such information to Lender promptly upon (but in any event within five (5) Business Days after) written request. Any such financing statements, continuation statements or amendments may to the extent required by applicable law be signed by Lender on behalf of such Loan Party and may be filed at any time in any jurisdiction. Each Loan Party hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Loan Party and in the name of such Loan Party or in its own name, from time to time after the occurrence and during the continuance of an Event of Default, in Lender’s discretion, for the limited purpose of carrying out the terms of this Section 3.2. All powers, authorizations and agencies contained in this Section 3.2 are coupled with an interest and are irrevocable until all of the Obligations have been paid and satisfied in full.

3.3 Perfection Other Than by Filing, etc.

(a) At any time and from time to time, Loan Parties shall take such steps as Lender may reasonably request (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to Lender, of any bailee having possession of any of the Collateral, that such bailee holds such Collateral for Lender, and (ii) otherwise to ensure the continued perfection and priority of Lender’s security interest in any of the Collateral and of the preservation of its rights therein.

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(b) If any Loan Party shall acquire any investment property, instruments (with a value in excess of $100,000), letter-of-credit rights (with a value in excess of $100,000) or electronic chattel paper (with a value in excess of $100,000) (as such terms are defined in Article 9 of the UCC), Borrower shall promptly notify Lender thereof and shall take such steps as Lender may reasonably request for Lender to obtain control of such assets and, where control is established by written agreement, such agreement shall be in form and substance reasonably satisfactory to Lender.

(c) If any Loan Party shall acquire a commercial tort claim with a value in excess of One Hundred Thousand Dollars ($100,000.00), Borrower shall promptly notify Lender in a writing signed by Borrower of the general details thereof and grant to Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Lender.

(d) If at any time any of the Collateral with a value in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate is represented by any document of title, Borrower shall promptly notify Lender thereof and, upon written request by the Lender, such document of title will be delivered promptly to Lender and subject to the security interest granted hereby.

3.4 Collateral Accounts.

(a) Schedule 3.4 sets forth a true and complete list of all institutions at which any Loan Party has or maintains a Collateral Account of any type along with the name and address of such institution and the account numbers of the Deposit Accounts, securities accounts and commodity accounts maintained with such Person. Each Loan Party shall notify Lender in writing within five (5) days after establishing any Collateral Account.

(b) If requested by Lender, for each account (other than any Excluded Account) that any Loan Party at any time opens or maintains, Loan Parties shall promptly cause the applicable bank or financial institution at or with which any such Collateral Account is opened or maintained to execute and deliver a control agreement or other appropriate instrument with respect to such Collateral Account to perfect Lender’s lien in such Collateral Account in accordance with the terms hereunder, which control agreement shall be in form and substance reasonably acceptable to Lender and may not be terminated without the prior written consent of Lender.

3.5 Additional Agreements with Respect to the Collateral.

(a) There is no location at which any Loan Party has any Inventory or other tangible Collateral (except for Inventory in transit, Equipment out for repair or Inventory and other Collateral subject to a disposition permitted under Section 6.5) other than those locations listed on Schedule 4.27 or at such other locations as identified to Lender by Borrower from time to time in writing. No Loan Party will permit any of the Collateral to be removed from the locations described on Schedule 4.27, except in the ordinary course of the Loan Parties’ business and customary use thereof, without prior written notice to Lender.

(b) Each Loan Party will keep the Collateral in good condition and repair (ordinary wear and tear excepted) and will pay and discharge all taxes, levies and other impositions levied thereon prior to delinquency as well as the cost of repairs to or maintenance of same, and will not permit anything to be done that may impair the value of any of the Collateral. If any Loan Party fails to pay such sums, Lender may do so for such Loan Party’s account and add the amount thereof to the Obligations.

(c) No Loan Party will allow the Collateral to be attached to real estate in such manner as to become a fixture or a part of any real estate.

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3.6 Returns and allowances between Loan Parties and their account debtors shall follow such Loan Party’s customary practices as they exist at the Closing Date. Borrower must promptly notify Lender of all returns, recoveries, disputes and claims that involve more than Two Hundred Fifty Thousand Dollars ($250,000.00).

Article 4

Representations and Warranties

To induce Lender to enter into this Agreement, each Loan Party, jointly and severally, represents and warrants to Lender as follows:

4.1 Organizational Status. Each Loan Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the power to own and operate its properties, to carry on its business as now conducted and to enter into and to perform its obligations under this Agreement and the other Loan Documents to which it is a party. Each Loan Party is duly qualified to do business and in good standing in each jurisdiction in which a failure to be so qualified and in good standing would have a Material Adverse Effect.

4.2 Subsidiaries. Schedule 4.2 is a complete list of each direct or indirect Subsidiary of each Loan Party, which list shows the jurisdiction of incorporation or other organization and the percentage of stock or other equity interest of each Subsidiary owned by any Loan Party. The Loan Parties and the Subsidiaries have good and valid title to the equity interests in the Subsidiaries, free and clear of all Liens, claims, charges, restrictions, security interests, equities, proxies, pledges or encumbrances of any kind other than those created in favor of Lender pursuant to the Loan Documents.

4.3 Authorization. Each Loan Party has full legal right, power and authority to conduct its business and affairs. Each Loan Party has full legal right, power and authority to enter into and perform its obligations under the Loan Documents, without the consent or approval of any other person, firm, governmental agency or other legal entity other than those consents or approvals already obtained by such Loan Party. The execution and delivery of this Agreement, the borrowing hereunder, the execution and delivery of each Loan Document to which each Loan Party is a party, and the performance by each Loan Party of its obligations hereunder and thereunder are within the company powers of each Loan Party and have been duly authorized by all necessary company or legal action properly taken, and the Loan Parties have received all necessary governmental approvals where required. The officer(s) executing this Agreement and all of the other Loan Documents to which each Loan Party is a party are duly authorized to act on behalf of such Loan Party.

4.4 Validity and Binding Effect. This Agreement and the other Loan Documents are the legal, valid and binding obligations of each Loan Party, enforceable in accordance with their respective terms, subject to limitations imposed by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally or the application of general equitable principles.

4.5 Capitalization. Attached hereto as Schedule 4.5 is a table showing the capitalization of each Loan Party, as of the date hereof, on a fully diluted basis. Except as set forth on Schedule 4.5, no Loan Party has outstanding any stock or securities convertible or exchangeable for any shares of its equity (“Equity”) or containing any profit participation features, and does not have outstanding any rights or options to subscribe for or to purchase its Equity or any stock or ownership appreciation rights or phantom stock or ownership plans. Schedule 4.5 accurately sets forth the following with respect to all outstanding options and rights to acquire any Loan Party’s Equity, if any: (i) the total number of interests issuable upon exercise of all outstanding options; (ii) the range of exercise prices for all such outstanding options; (iii) the number of interests issuable, the exercise price and the expiration date for each such outstanding option; and (iv) with respect to all outstanding options, warrants and rights to acquire any Loan Party’s ownership interests, the holder, the number of shares or interests covered, the exercise price and the expiration date. As of the Closing Date, and except as set forth on Schedule 4.5, no Loan Party is subject to any obligation (contingent or otherwise) to repurchase, redeem, retire or otherwise acquire any units of its ownership interests or any warrants, options or other rights to acquire its ownership interests. No Loan Party has violated any applicable securities laws in connection with the offer, sale or issuance of any of its ownership interests.

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4.6 Intellectual Property.

(a) As of the Closing Date, Schedule 4.6(a) sets forth a complete list and a description of all material and registered Intellectual Property owned by each Loan Party.

(b) None of the Intellectual Property owned by any Loan Party and used in the operation of its businesses as currently conducted has been derived, in part or in whole, from the Intellectual Property of any other person, other than the Intellectual Property licensed by the Loan Parties from other parties as described in Schedule 4.6(b). All appropriate employees of, and consultants to, each Loan Party have entered into agreements with such Loan Party pursuant to which all Intellectual Property developed by them on behalf of such Loan Party in the course of their relationships with the Loan Parties has been assigned to and belongs solely, without any restrictions or obligations whatsoever, to the Loan Parties. The Loan Parties have taken all reasonable and practical steps (including, without limitation, entering into confidentiality and non-disclosure agreements with all appropriate employees of each Loan Party or consultants, third party developers or any other persons with access to or knowledge of any Loan Party’s material owned Intellectual Property) designed to safeguard and maintain the secrecy and confidentiality of, and proprietary rights in, all of each Loan Party’s material owned Intellectual Property.

(c) Except as disclosed in Schedule 4.6(c), no arm’s length third party has been granted any license other than for non-commercial research purposes, or right to license or to an assignment of (including any right of first refusal or other options to license or acquire), any material Intellectual Property owned by any Loan Party.

(d) Each Loan Party has good and valid title to all material Intellectual Property owned by such Loan Party, free and clear of any and all Liens, other than Permitted Liens. No royalty or other fee is required to be paid by any Loan Party to any other person in respect of the use of any of the owned material Intellectual Property. To the knowledge of the Loan Parties, no employee of any Loan Party is in violation of any term of any non-disclosure, proprietary rights or similar agreement between such employee and any Loan Party. To the knowledge of the Loan Parties, all material technical information developed by and belonging to the Loan Parties which has not been copyrighted or patented has been kept confidential and there are no material restrictions on the ability of any Loan Party to use and exploit all rights in the Intellectual Property required in the ordinary course of such Loan Party’s business.

(e) To the knowledge of the Loan Parties, none of the development, manufacture, marketing, license, sale or use of any product currently sold by any Loan Party or currently under development violates any contract with any person in any material respect or infringes upon any Intellectual Property of any person, nor has any Loan Party received written notice of any such infringement from any third party.

(f) As of the Closing Date, other than as set forth in Schedule 4.6(f), no license or sub-license has been granted or other contract has been entered into with respect to any of the material Intellectual Property owned by any Loan Party.

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(g) All maintenance, filing and other fees payable in respect of each Loan Party’s material owned and registered Intellectual Property have been paid by the Loan Parties, on a timely basis, and no Loan Party has not received any notice of default in payment of such fees which is currently outstanding.

(h) The commercialization and the research and development activities of each Loan Party are conducted in compliance with all Laws in each jurisdiction in which the Borrower conducts any of such activities, including, without limitation, any requirements from the FDA and applicable prescribed good manufacturing practices. No Loan Party has received written notice of any violation of any Laws, or any unsatisfactory results of an inspection or audit of its manufacturing facilities or processes conducted by the FDA or other governmental authority, including any corresponding authority for the European Union.

(i) Borrower has obtained all applicable governmental approvals, including the FDA regulatory clearance to conduct clinical trials for its drug candidates in the United States and complies with all such regulatory guidelines.

4.7 No Conflicts. The execution and delivery of this Agreement and the other Loan Documents and the performance by the Loan Parties of their obligations hereunder and thereunder do not and will not contravene, breach or result in any default under the articles or certificate of incorporation, by-laws, articles of association or other organizational documents of any Loan Party, any material agreement or instrument to which any Loan Party is a party or to which any Loan Party is subject, any judgment, decree or order binding any Loan Party or the property or assets of any Loan Party or any Law in any material respect.

4.8 Litigation. There are no actions, suits, arbitrations, administrative hearings or other proceedings pending, or, to the knowledge of each Loan Party, threatened (in writing), against or affecting any Loan Party or any of its property at law or in equity, or before any arbitrator or Governmental Body that, if determined adversely to any Loan Party would be reasonably expected to have a Material Adverse Effect, or which involve the validity or enforceability of any of the Loan Documents. To each Loan Party’s knowledge, no Loan Party is subject to any order, writ, injunction, decree or demand of any court or any governmental authority that, if determined adversely to any Loan Party, would reasonably be expected to have a Material Adverse Effect.

4.9 Financial Statements. The internally prepared financial statements of Borrower dated June 30, 2021, which have been delivered to Lender, are true and correct in all material respects and have been prepared on the basis of GAAP (consistently applied), subject only to the absence of footnotes, and fairly present the financial condition of Borrower as of the date(s) thereof and the statements of income and retained earnings and statements of cash flows present fairly the results of operations and cash flows of Borrower for the periods set forth therein.

4.10 Other Agreements; No Defaults. No Loan Party is a party to any indenture, loan or credit agreement, lease or other agreement or instrument, or subject to any restriction under its articles of incorporation or articles of organization (as applicable) or bylaws or operating agreement (as applicable), that would reasonably be expected to have a Material Adverse Effect. No Loan Party is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument material to its business to which it is a party, including, but not limited to, this Agreement and the other Loan Documents, and, to each Loan Party’s knowledge, no other default or event has occurred and is continuing that with notice or the passage of time or both would constitute a default or event of default under any of same.

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4.11 Compliance with Law. Each Loan Party has obtained all material licenses, permits and approvals and authorizations necessary or required in order to conduct its business and affairs as heretofore conducted and as hereafter intended to be conducted. Each Loan Party is in compliance with all laws, regulations, decrees and orders applicable to it (including but not limited to laws, regulations, decrees and orders relating to the environmental, occupational and health standards and controls, antitrust, monopoly, restraint of trade or unfair competition), except to the extent that any noncompliance, in the aggregate, would not reasonably be expected to have a Material Adverse Effect. No Loan Party has received any written correspondence or written notice from the FDA or any other federal, state or local authority with regard to any product or the manufacture, processing, packaging or holding thereof, or any comparable written correspondence from any foreign counterpart of the FDA, or any comparable written correspondence from any foreign counterpart of any federal, state or local authority with regard to any product or the manufacture, processing, packing, or holding thereof in each case that would be reasonably expected to have a Material Adverse Effect.

4.12 Taxes. Each Loan Party has filed or caused to be filed all federal and state income tax returns and other material tax returns that are required to be filed (except for returns that have been appropriately extended), and has paid, or will pay, all taxes shown to be due and payable on said returns and all other taxes, impositions, assessments, fees or other charges imposed on it by any Governmental Body, in each case prior to any delinquency with respect thereto (other than taxes, impositions, assessments, fees and charges currently being contested in good faith by appropriate proceedings, for which appropriate amounts have been reserved in accordance with GAAP). No tax Liens have been filed against any Loan Party or any of its property.

4.13 Certain Transactions. Except with respect to the Loan and as otherwise set forth on Schedule 4.13, no Loan Party is indebted, directly or indirectly, to any of its shareholders, members, managers, officers or directors or to their respective spouses or children, in any amount whatsoever, and none of said shareholders, members, managers, officers or directors or any members of their immediate families, are indebted to any Loan Party or have any direct or indirect ownership interest in any firm or corporation with which any Loan Party has a business relationship, or any firm or corporation which competes with any Loan Party, except that shareholders, members, managers, officers or directors of any Loan Party may own no more than 4.9% of outstanding stock of publicly traded companies which may compete with any Loan Party. Except as set forth on Schedule 4.13 or as permitted by Section 6.6, no shareholders, members, managers, officers or directors or any member of their immediate families, or any Affiliate of any of the foregoing, is party to any material contract with any Loan Party. No Loan Party is a guarantor or indemnitor of any Indebtedness of any other person, firm, corporation or other legal entity.

4.14 Statements Not False or Misleading. No representation or warranty given as of the date hereof by any Loan Party contained in this Agreement or any schedule attached hereto or any statement in any document, certificate or other instrument furnished or to be furnished by any Loan Party to Lender pursuant hereto, taken as a whole, contains or will (as of the time so furnished) contain any untrue statement of a material fact, or omits or will (as of the time so furnished) omit to state any material fact which is necessary in order to make the statements contained therein not materially misleading (it being recognized by Lender that any projections and forecasts provided by Borrower are based on good faith estimates and assumptions believed by Borrower to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

4.15 Margin Regulations. No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock. No proceeds received pursuant to this Agreement will be used to purchase or carry any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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4.16 Material Contracts. Schedule 4.16 is a complete and correct list of all contracts, agreements and other documents as of the date hereof pursuant to which any Loan Party receives revenues in excess of $100,000 per fiscal year or has committed to make expenditures in excess of $100,000 per fiscal year or the breach or termination of which would reasonably be expected to have a Material Adverse Effect. Each such contract, agreement and other document is in full force and effect as of the date hereof.

4.17 Environment. None of the Loan Parties has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against any Loan Parties or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect. None of the Loan Parties has knowledge of any facts which would reasonably be expected to give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect. None of the Loan Parties has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect. All buildings on all real properties now owned, leased or operated by the Loan Parties are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.

4.18 Fees/Commissions. No Loan Party has agreed to pay any finder’s fee, commission, origination fee or other fee or charge to any person or entity with respect to the Loan and investment transactions contemplated hereunder.

4.19 ERISA. If a Loan Party has in effect a Plan (as defined below) or Title IV Plan (as defined below), such Loan Party has operated and administered each Plan and Title IV Plan in compliance in all material respects with all applicable laws, including the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Internal Revenue Code of 1986, as amended (the “Code”). Neither a prohibited transaction (as defined under ERISA or the Code) nor a breach of fiduciary duty has occurred with respect to any Plan. Each Plan that is intended to be a tax-qualified plan within the meaning of Section 401(a) of the Code is in compliance in all material respects with the applicable requirements of the Code. With respect to any Title IV Plan, neither Loan Parties nor any ERISA Affiliate (as defined below) have incurred a reportable event with respect to any Title IV Plan; no notice of intent to terminate a Title IV Plan has been filed nor has any Title IV Plan been terminated; no circumstances exist which constitute grounds for the Pension Benefit Guaranty Corporation (“PBGC”) to institute proceedings to terminate a Title IV Plan nor has the PBGC instituted any such proceeding or for the appointment by the appropriate United States District Court of a trustee to administer the Plan or Title IV Plan; Loan Parties (as applicable) and each ERISA Affiliate have met all minimum funding requirements for any Title IV Plan and the assets of such plan are not less than the present value of all benefits accrued under such plan as of the most recent valuation date determined on a termination basis under Title IV of ERISA. Neither Loan Parties nor any ERISA Affiliate have completely or partially withdrawn from a multiemployer plan (as defined in ERISA) nor do they have any withdrawal liability with respect to such multiemployer plans. No Loan Party has any liability for post-employment healthcare or life insurance benefits, except for the continuation coverage mandated by Section 4980B of the Code. For purposes of this Agreement, the following terms shall be defined as follows: “Plan” means any employee benefit plan as defined in Section 3(3) of ERISA; “Title IV Plan” means any employee pension benefit plan subject to the provisions of Title IV of ERISA; and “ERISA Affiliate” means any person or entity that was or is required to be treated as a single employer with any Loan Party under section 414 of the Code. Except as set forth on Schedule 4.19, no Loan Party currently has a Plan or Title IV Plan in effect.

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4.20 Title to Properties. Each Loan Party has good, indefeasible and insurable title to, or valid leasehold interests in, all of its real properties and has good title to or valid leasehold interests in, or valid rights under contract to use, its other tangible personal property assets used in or reasonably necessary for the conduct of Loan Parties’ business, free and clear of all Liens other than Permitted Liens (as hereinafter defined). Each Loan Party has the full authority to transfer and grant a security interest in the Collateral hereunder free and clear of any Lien, charge, encumbrance or security interest whatsoever, except for the Permitted Liens. Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and all of such material leases are valid and subsisting and no material default by the applicable Loan Party exists under any of them. No Loan Party has fee simple ownership interest in any real property.

4.21 Material Adverse Effect. Since December 31, 2020, no event has occurred which has resulted or which any Loan Party reasonably believes would be expected to result in a Material Adverse Effect.

4.22 Reserved.

4.23 Registration Rights. No Loan Party is under any obligation to register under the Securities Act of 1933, as amended, or the Trust Indenture Act of 1939, as amended, any of its presently outstanding securities or any of its securities that may subsequently be issued.

4.24 Employees. No Loan Party has any labor problems or disputes that have resulted in, or that such Loan Party reasonably believes would be expected to have, a Material Adverse Effect. Each Loan Party is in compliance in all material respects with all applicable laws respecting employment, employment practices, wages and hours, payment for vacation and overtime, and immigration matters.

4.25 Reserved.

4.26 Financial Solvency. No Loan Party is entering into the arrangements contemplated by this Agreement and the other Loan Documents with actual intent to hinder, delay or defraud either present or future creditors. On and as of the date hereof on a pro forma basis after giving effect to the transactions contemplated by the Loan Documents, (i) the Loan Parties taken as a whole are solvent, able to pay their debts (including trade debts) as they mature in the ordinary course of business, have capital sufficient to carry on their business and all businesses in which it is about to engage and (ii) the fair present saleable value of the assets, calculated on a going concern basis, of the Loan Parties, taken as a whole, is in excess of the amount of the liabilities of the Loan Parties.

4.27 Location of Properties, Names, Places of Business. The only jurisdictions in which each Loan Party maintains any tangible personal property or carries on business are as listed in Schedule 4.27. All billings for the supply of goods and services by any Loan Party are made from, and require payment to be made to, the chief executive office of such Loan Party and each such chief executive office is listed on Schedule 4.27. The exact legal name of each Loan Party on its articles of organization as filed with the jurisdiction of its organization is set forth on Schedule 4.27 along with its jurisdiction of organization. Except as set forth on Schedule 4.27, no Loan Party has, during the five years preceding the date of this Agreement, been known as or used any other company, trade or fictitious name, nor acquired all or substantially all of the assets, equity interests or operating units of any person. No Loan Party has, during the five years preceding the date of this Agreement, had a business location at any address other than addresses set forth on Schedule 4.27. Schedule 4.27 sets forth all real property owned or leased by any of the Loan Parties as of the Closing Date.

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4.28 Sanctions. (i) No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by any Sanctions Authority, (ii) no Loan Party nor any of its Subsidiaries (A) is a Sanctioned Person or a Sanctioned Entity, (B) has its assets located in Sanctioned Entities, or (C) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities, (iii) no proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity, (iv) each Loan Party and each of its respective Subsidiaries conducts its businesses in compliance with applicable Anti-Corruption Laws, (v) the operations of each Loan Party and each of its respective Subsidiaries are, and have been, conducted at all times in compliance with applicable Anti-Money Laundering Laws, and (vi) no litigation, regulatory or administrative proceedings of or before any court, tribunal or agency with respect to any Anti-Money Laundering Laws have been started or threatened against any Loan Party or any of its respective Subsidiaries. As used herein, “Sanctions Authority” means the United Nations Security Council, the European Union, OFAC or the governmental institutions and agencies of any other relevant jurisdiction; “Sanctioned Entities” means (1) a country or a government of a country, (2) an agency of the government of a country, (3) an organization directly or indirectly controlled by a country or its government, (4) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by any Sanctions Authority; “Sanctioned Persons” means a person (1) whose name is listed on, or is owned or controlled by a person whose name is listed on, or acting on behalf of a person whose name is listed on, any Sanctions List, (2) that is incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person incorporated under the laws of, a country or territory that is the target of country-wide or territory-wide Sanctions, or (3) that is otherwise the target of sanctions administered and enforced by any Sanctions Authority; “Sanctions List” means the “Specially Designated Nationals and Blocked Persons” list administered and enforced by OFAC, the “Financial Sanctions: Consolidated List of Targets” administered and enforced by HMT, or any similar applicable list administered and enforced by any Sanctions Authority, in each case as amended, supplemented or substituted from time to time; “Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977 and any similar applicable laws or regulations in any jurisdiction in which any Loan Party or any member of its Affiliates is located or doing business that relate to bribery or corruption; and “Anti-Money Laundering Laws” means applicable laws or regulations in any jurisdiction in which any Loan Party or any member of its Affiliates is located or doing business that relate to money laundering or financial record keeping and reporting requirements.

4.29 Security Interests. The security interests granted to Lender under Article 3 of this Agreement are validly created, and the Loan Parties have taken, or will take, such actions as are necessary to give Lender a perfected security interest therein in accordance with the terms of the Loan Documents.

4.30 Interrelatedness of Loan Parties. To the extent there is more than one Loan Party, the business operations of each Loan Party are interrelated and complement one another, and such entities, if applicable, have a common business purpose, with intercompany bookkeeping and accounting adjustments used to separate their respective properties, liabilities and transactions. To permit their uninterrupted and continuous operations, such entities, if applicable, now require and will from time to time hereafter require funds and credit accommodations for general business purposes. The proceeds of the Loan will directly or indirectly benefit each Loan Party hereunder, severally and jointly, regardless of which Loan Party requests or receives part or all of the proceeds of such advances.

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4.31 Patriot Act. To the extent applicable, each Loan Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of (x) the United States Foreign Corrupt Practices Act of 1977, as amended, or (y) other similar legislation in other relevant jurisdictions.

4.32 Governmental Regulations. No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other Law which limits its ability to incur Indebtedness or which otherwise renders all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

Article 5

Affirmative Covenants

Each Loan Party covenants and agrees with Lender as follows:

5.1 Payment of Obligations. Borrower shall pay the indebtedness evidenced by the Notes according to the terms thereof, and Loan Parties shall timely pay or perform, as the case may be, all of the Obligations of Loan Parties to Lender, together with interest thereon, and any extensions, modifications, consolidations and/or renewals thereof and any notes given in payment thereof.

5.2 Financial Statements and Reports. Loan Parties shall furnish to Lender:

(a) as soon as practicable and in any event within 120 days after the end of Borrower’s fiscal year, an unaudited, consolidated balance sheet of Borrower and its Subsidiaries as of the close of such fiscal year, an unaudited, and consolidated statement of operations and shareholders’ or owners’ equity of Borrower and its Subsidiaries as of the close of such fiscal year of Borrower and its Subsidiaries for such fiscal year, prepared in accordance with GAAP, consistently applied and accompanied by a compliance certificate, in the form attached as Exhibit C (the “Compliance Certificate”), executed by the President, Chief Executive Officer or Chief Financial Officer of each Loan Party, stating that to the best knowledge of such officer, no Default or Event of Default has occurred and is continuing (or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action Borrower proposes to take in connection therewith).

(b) as soon as available and in any event within 45 days after the end of each fiscal quarter (including the fiscal quarter ending December 31 of each year) (i) the consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter and the related statements of operations, and shareholders’ or owners’ equity, setting forth in each case comparisons to the annual budget and to the corresponding period in the preceding year, and (ii) a Compliance Certificate of the President, Chief Executive Officer or Chief Financial Officer of each Loan Party, stating that to the best knowledge of such officer, no Default or Event of Default has occurred and is continuing (or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action Borrower proposes to take in connection therewith);

(c) [reserved]; and

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(d) with reasonable promptness, such other financial data, including without limitation, accounts receivable agings, as Lender may reasonably request. Without Lender’s prior written consent, no Loan Party shall materially modify or change any accounting policies or procedures or its financial reporting practices, including such Loan Party’s fiscal year, in effect on the date hereof, unless such modification or amendment is required by a Governmental Body or is recommended by GAAP. Each Loan Party hereby agrees to amend the Loan Documents as needed to preserve the original intent of the parties in the event any such changes to the accounting policies or procedures would have an effect on any calculation required by the Loan Documents.

5.3 Maintenance of Books and Records; Inspection. Each Loan Party shall maintain its books, accounts and records in accordance with GAAP consistently applied, and after reasonable notice from Lender, permit Lender, its officers and employees and any professionals designated by Lender in writing, at such Loan Party’s expense, to visit and inspect any of its properties, company books and financial records, and to discuss its accounts, affairs and finances with such Loan Party or its principal officers during reasonable business hours, all at such times as Lender may reasonably request; provided that Borrower shall not be required to pay for more than one (1) such inspection per fiscal year unless an Event of Default has occurred and is continuing.

5.4 Insurance. Each Loan Party shall maintain and deliver evidence to Lender of such insurance as is reasonably required by Lender, written by insurers, in amounts and with lender’s loss payable, mortgagee, additional insured and other endorsements reasonably satisfactory to Lender. All premiums with respect to such insurance shall be paid by each Loan Party as and when due. Upon the written request of Lender, accurate and complete copies of such policies shall be delivered to Lender. If any Loan Party fails to comply with this Section, Lender may (but shall not be required to) procure such insurance and endorsements insuring the assets of the Loan Parties and pay such premiums as Lender deems advisable. Each Loan Party irrevocably makes, constitutes and appoints Lender as such Loan Party’s true and lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims upon the occurrence and during the continuance of an Event of Default. After deducting all reasonable and out-of-pocket costs and expenses (including reasonable attorney’s fees actually incurred) of Lender, all insurance proceeds shall be applied toward payment of the Obligations; provided that, with the consent of Lender, insurance proceeds may be applied toward replacing or restoring the subject Collateral, in a manner and on terms satisfactory to Lender. Any proceeds applied to the payment of the Obligations shall be applied in the manner set forth in Section 8.4. In no event shall such application relieve such Loan Party from payment in full of all installments of principal and interest under the Notes. Until the Obligations have been fully satisfied and any obligations of Lender to make further advances hereunder have terminated, Lender’s security interest in the Collateral shall continue in full force and effect.

5.5 Taxes and Assessments. Each Loan Party shall (a) file all federal and state income and other material tax returns and appropriate schedules thereto that are required to be filed under applicable law, prior to the date of delinquency, including any permissible extensions, (b) pay and discharge all taxes, assessments and governmental charges or levies imposed upon it upon its income and profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all taxes, assessments and governmental charges or levies that, if unpaid, would reasonably be expected to become a Lien or charge upon any of the Collateral; provided, however, that any Loan Party in good faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate reserves in accordance with GAAP are maintained with respect thereto.

5.6 Legal Existence. Each Loan Party shall maintain its corporate existence, rights and privileges, and good standing (or equivalent designation) in the jurisdiction of its organization, and its qualification and good standing as a foreign entity in each jurisdiction in which such qualification is necessary pursuant to applicable law (other than, solely with respect to foreign qualifications, such jurisdictions in which the failure to be qualified or in good standing would not reasonably be expected to have a Material Adverse Effect). No Loan Party shall change its jurisdiction of organization.

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5.7 Compliance with Law and Agreements. Each Loan Party will maintain its business operations and property owned or used in connection therewith in compliance with (i) in all material respects, all applicable Laws governing such business operations and the use and ownership of such property, and (ii) all agreements, licenses, franchises, indentures, mortgages and deeds of trust to which such Loan Party is party or by which any Loan Party or any of its properties are bound, except in each case of (ii), where failure to do so would not be reasonably expected to cause a Material Adverse Effect. Each Loan Party has all of the governmental approvals necessary for the performance by Loan Parties of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Lender. Loan Parties shall promptly provide copies of any such obtained governmental approvals to Lender upon Lender’s written request therefor.

5.8 Notice of Default. Loan Parties shall give written notice to Lender of the occurrence of any Default or Event of Default under this Agreement or any other Loan Document promptly, and in any event within five (5) Business Days after such Loan Party (or any authorized officer of such Loan Party) obtains actual knowledge thereof, upon the occurrence thereof.

5.9 Notice of Material Events. Loan Parties shall promptly, and in any event within five (5) Business Days after such Person (or any authorized officer of such Person) receives written notice or otherwise obtains actual knowledge thereof, give written notice to Lender of (a) any actions, suits or proceedings, instituted by any persons whomsoever against any Loan Party or affecting any of the assets of such Loan Party wherein the amount at issue exceeds $100,000, (b) any dispute, not resolved within 60 days of the commencement thereof, between any Loan Party on the one hand and any Governmental Body on the other hand, which would reasonably be expected to result in a Material Adverse Effect, (c) receipt by any Loan Party of any adverse determination by the FDA that would reasonably be expected to result in a fine, penalty or similar payment in excess of $100,000 or would reasonably be expected to result in a Material Adverse Effect, (d) receipt by any Loan Party of any written correspondence by any Governmental Body alleging material non-compliance with applicable Laws, and (e) any Loan Party becoming subject to any written complaint filed with or submitted to any Governmental Body having jurisdiction over such Loan Party or filed with or submitted to such Loan Party pursuant to their policies relating to the filing or submissions of such types of complaints, from employees, independent contractors, vendors, physicians, or any other Person that would indicate that such Loan Party has violated any Law in any material respect.

5.10 Conduct of Business; Name; Location. Each Loan Party will continue to engage in a business of the same general type and manner as conducted by it on the date of this Agreement. Without Lender’s prior written consent (which consent will not be unreasonably withheld), no Loan Party shall modify or change any terms or conditions of any material contracts and/or agreements to which Loan Party is a party on the date hereof in any manner that would reasonably be expected to have a Material Adverse Effect. Without 30 days’ prior written notice to Lender, no Loan Party shall change its legal name, location of any Collateral or chief executive office. In the event any Loan Party makes a change of its legal name, location of any Collateral or chief executive office, such Loan Party authorizes Lender to file such financing statements and amendments or continuations thereof and any other documents that Lender may deem appropriate to evidence, continue, and/or perfect any security interest in or pledge of Collateral securing the Loans.

5.11 ERISA Plans. If any Loan Party has in effect, or hereafter institutes, a Plan or Title IV Plan, then the following warranties and covenants shall be applicable during such period as to any such Plan or Title IV Plan that shall be in effect: (a) each Loan Party hereby covenants that throughout the existence of the Plan or Title IV Plan, such Loan Party’s contributions under the Plan or Title IV Plan will meet the minimum funding standards required by ERISA and such Loan Party will not institute a distress termination of the Plan or Title IV Plan; and (b) each Loan Party covenants that it will send to Lender a copy of any notice of a reportable event (as defined in ERISA) required by ERISA to be filed with respect to the Plan or Title IV Plan with the Labor Department or PBGC, at the time that such notice is so filed.

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5.12 Environment. Each Loan Party shall be and remain in compliance in all material respects with the provisions of all applicable Environmental Laws; promptly notify Lender of any written notice of a hazardous discharge or environmental complaint received from any Governmental Body or any other party; notify Lender immediately of any hazardous discharge from or affecting its premises; immediately contain and remove the same, in material compliance with all applicable laws; timely pay any fine or penalty assessed in connection therewith; permit Lender to inspect the premises and to inspect all books, correspondence, and records pertaining to any such condition or complaint; and at Lender’s request, and at such Loan Party’s expense, provide a report of a qualified environmental engineer, satisfactory in scope, form, and content to Lender, and such other and further assurances reasonably satisfactory to Lender that the condition has been corrected.

5.13 Protection of Intellectual Property Rights.

(a) Each Loan Party shall (i) protect, defend and maintain the validity and enforceability of its material Intellectual Property; (ii) promptly advise Lender in writing of material infringements or any other event that would reasonably be expected to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any owned Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Lender’s written consent.

(b) If any Loan Party (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall provide prompt written notice thereof to Lender and the Loan Parties shall execute such intellectual property security agreements and other documents and take such other actions as Lender may request in its commercially reasonable discretion to perfect and maintain a first priority perfected security interest in favor of Lender in such property, and the Loan Party shall record such intellectual property security agreement with the United States Patent and Trademark Office promptly upon Lender’s request therefor. If any Loan Party intends to register any Copyrights or mask works in the United States Copyright Office, the Loan Parties shall: (x) provide Lender with prompt written notice of such Loan Party’s registration of such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) if requested by Lender, execute an intellectual property security agreement and such other documents and take such other actions as Lender may request in its reasonable discretion to perfect and maintain a first priority perfected security interest in favor of Lender in such Copyrights or mask works; and (z) record such intellectual property security agreement with the United States Copyright Office promptly upon Lender’s request therefor. Each Loan Party shall promptly provide to Lender copies of all applications that it files for Patents or for the registration of Trademarks, Copyrights or mask works, together with evidence of the recording of the intellectual property security agreement required for Lender to perfect and maintain a first priority perfected security interest in such property.

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(c) Provide written notice to Lender within ten (10) days of entering or becoming bound by any material Patent License, Trademark License or Copyright License with respect to which any Loan Party is the licensee (a) that prohibits or otherwise restricts any Loan Party from granting a security interest in, or a fixed or floating charge over, such Loan Party’s interest in such Patent License, Trademark License or Copyright License, or (b) for which a default under or termination of would reasonably be expected to interfere with Lender’s right to sell any Collateral (each such agreement a “Restricted License”) (other than off-the-shelf or click-wrap software that is commercially available to the public). Each Loan Party shall take such steps as Lender reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Lender to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Lender’s rights and remedies under this Agreement and the other Loan Documents; provided that, with respect to Patent Licenses, Trademark Licenses or Copyright Licenses pursuant to collaborations or other strategic transactions with third parties in the ordinary course of business, Lender shall agree to customary non-disturbance terms.

5.14 Further Assurances; Power of Attorney. Upon the request of Lender, each Loan Party shall execute any and all documents which are deemed by Lender from time to time to be reasonably necessary or desirable in perfecting the security interests granted herein or otherwise effectuating the transactions contemplated herein. Each Loan Party hereby constitutes Lender or its designee, as its attorney-in-fact with power, upon the occurrence and during the continuance of an Event of Default, to endorse its name upon any notes, acceptances, checks, drafts, money orders, or other evidences of payment or Collateral that may come into either its or Lender’s possession; to sign its name on any invoice or bill of lading relating to any of the accounts receivable, drafts against customers, assignments and verifications of accounts receivable and notices to customers; to send verifications of accounts receivable; and to execute any of the documents in order to perfect and/or maintain the security interests and liens granted herein by it to Lender. This power being coupled with an interest is irrevocable until all of the Obligations are paid in full and any and all promissory notes executed in connection therewith are terminated and satisfied.

Article 6

Negative Covenants

6.1 Dividends, Distributions, etc. Without the prior written consent of Lender, no Loan Party shall (a) declare or pay (directly or indirectly) any dividend or distribution of any kind, (b) purchase, redeem, retire or otherwise acquire for value any shares of such stock, (c) make any distribution of any kind in cash or property in respect thereof, (d) make any return of capital of shareholders or members, (e) make any payments in cash or property in respect of any stock options, stock bonus or similar plan, or (f) grant any preemptive rights with respect to the capital stock or membership interest, as applicable, of any Loan Party; provided, however, that (i) as long as a Loan Party is included as a member of a consolidated group of companies filing consolidated tax returns for income tax purposes, such Loan Party shall be permitted to make distributions to Borrower in an amount equal to the tax liability that such group incurs as a result of including such Loan Party in such group, and (ii) as long as no Event of Default has occurred and is continuing, the Loan Parties may repurchase securities from former employees, officers, directors, consultants or other persons who performed services for a Loan Party in connection with the cessation of such employment or service, pursuant to agreements under which such Loan Party has the option to repurchase such shares upon the occurrence of such events.

6.2 Guaranties; Loans. Except to the extent constituting Permitted Debt, without the prior written consent of Lender, no Loan Party shall guarantee nor be liable in any manner, whether directly or indirectly, or be contingently liable in connection with the obligations or Indebtedness of any person or entity whatsoever, except for the endorsement of negotiable instruments payable to any Loan Party for deposit or collection in the ordinary course of business. Without the prior written consent of Lender, no Loan Party shall make any loan, advance or extension of credit to any person.

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6.3 Debt. Without the prior written consent of Lender, no Loan Party shall create, incur, assume or suffer to exist Indebtedness of any description whatsoever, excluding the following permitted Indebtedness (“Permitted Debt”):

(a) the indebtedness evidenced by the Notes;

(b) the endorsement of negotiable instruments payable to any Loan Party for deposit or collection in the ordinary course of business;

(c) any loan, advance or extension of credit by and between Loan Parties;

(d) the Indebtedness listed on Schedule 6.3 and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity thereof, increasing the principal amount thereof or increasing the rate of interest thereon);

(e) Indebtedness consisting of financing of insurance premiums in the ordinary course of business;

(f) (i) obligations (contingent or otherwise) of the Loan Parties existing or arising in connection with endorsement of instruments for deposit in the ordinary course of business and (ii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within 30 days of incurrence; and

(g) additional unsecured Indebtedness of the Loan parties in an aggregate principal amount not to exceed $50,000 at any one time outstanding.

6.4 No Liens. Without the prior written consent of Lender, no Loan Party shall create, incur, assume or suffer to exist any Lien, security interest, security title, mortgage, deed of trust or other encumbrance upon or with respect to any of its assets, now owned or hereafter acquired, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens (as defined below), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Lender) with any Person which directly or indirectly prohibits or has the effect of prohibiting any Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as otherwise permitted in Section 7.1 hereof and except the following permitted liens (the “Permitted Liens”):

(a) Liens in favor of Lender;

(b) Liens for taxes or assessments or other governmental charges or levies if not yet due and payable or are being contested in good faith by appropriate proceedings, for which appropriate amounts have been reserved in accordance with GAAP and so long as levy and execution thereon have been stayed and continue to be stayed;

(c) Liens made or incurred in the ordinary course of business to secure the performance of bids, tenders, contracts (other than for the borrowing of money), leases, statutory obligations or surety and performance bonds;

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(d) Liens described on Schedule 6.4; provided, that to qualify as a Permitted Lien, any such lien described on Schedule 6.4 shall only secure the Indebtedness that it secures on the Closing Date;

(e) any interest or title of a lessor, sublessor, licensor or sublicensor under any lease or license entered into by the Borrower or any other Subsidiary in the ordinary course of its business in accordance with the terms of this Agreement and covering only the assets so leased or licensed;

(f) judgment Liens that do not constitute an Event of Default under Section 8.1(j) of this Agreement; and

(g) Liens in favor of collecting banks arising under Section 4-210 of the UCC or 4-208 of the UCC and customary rights of setoff, revocation, refund or chargeback under deposit agreements or under the UCC.

6.5 Mergers, Consolidations, Acquisitions and Sales.

(a) Without the prior written consent of Lender, no Loan Party shall (i) be a party to any merger, acquisition, consolidation or reorganization, in each case except for Permitted Acquisitions, (ii) purchase or otherwise acquire all or substantially all of the assets or equity interest of, or any partnership or joint venture, limited liability company or other equity interest in, any other person, firm or entity, in each case except for Permitted Acquisitions, (iii) sell, transfer, convey, lease or otherwise dispose of all or any of its assets or any interest therein (other than in accordance with the ROFR Agreement, the processing and sale of Borrower’s inventory in the regular course of business and the sale of worn out or obsolete equipment), nor (iv) convey any of its assets to any Subsidiary that is not a Loan Party.

(b) In the event any Loan Party shall form or acquire a new Subsidiary, Loan Parties shall cause such Subsidiary to promptly (and in any event within 30 days of such formation or acquisition) execute and deliver to Lender (a) a Guaranty Agreement in favor of Lender, (b) a joinder agreement to this Agreement as a Guarantor and Loan Party, and (c) such other documents, opinions, certificates and other documents as Lender reasonably deems appropriate and take such other action (including, without limitation, authorizing the filing of such UCC financing statements and delivering certificates in respect of the equity interests of such Subsidiary) as shall be necessary or appropriate to establish, create, preserve, protect and perfect a first priority Lien (subject only to Permitted Liens) in favor of Lender on substantially all assets, both real and personal, in which such new Subsidiary has or may thereafter acquire any interest, as contemplated herein or in the other Loan Documents.

6.6 Transactions with Affiliates. No Loan Party shall enter into any transaction, including, without limitation, the purchase, sale or exchange of property or the rendering of any service, with any Affiliate, except (i) in the ordinary course of and pursuant to the reasonable requirements of any Loan Party’s business and upon fair and reasonable terms no less favorable to such Loan Party than it would obtain in a comparable arm’s-length transaction with a person not an Affiliate or (ii) reasonable salaries and other reasonable director or employee compensation (including the issuance of equity interests of Borrower) and reasonable fees, indemnities and reimbursement of expenses to employees, consultants, officers and directors of the Borrower and its Subsidiaries, in each case in the ordinary course of business.

6.7 Subordinated Debt. No Loan Party shall (a) make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to the Obligations, except as expressly permitted by the subordination, intercreditor or other similar agreement to which such Subordinated Debt is subject.

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6.8 Reserved.

6.9 Reserved.

6.10 Compliance. No Loan Party shall become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Loan for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail or permit any Subsidiary to fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation would reasonably be expected to have a Material Adverse Effect; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which would reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

6.11 Anti-Terrorism. Neither Loan Parties nor any of their Subsidiaries shall engage in any dealings or transactions prohibited by Section 2 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49079(2001)), or be otherwise, to the knowledge of Loan Parties, associated with any such person in any manner violative of such Section 2 of such executive order.

6.12 Reserved.

6.13 Issuance of Membership Interests. No Loan Party shall, without the prior written consent of Lender, issue any Disqualified Stock. “Disqualified Stock” means any equity interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, (a) matures or is mandatorily redeemable for any consideration other than other equity interest (which would not constitute Disqualified Stock), pursuant to a sinking fund obligation or otherwise, (b) is convertible or exchangeable for Debt or other equity interests that would constitute Disqualified Stock, (c) is redeemable for any consideration other than other equity interest (which would not constitute Disqualified Stock) at the option of the holder thereof, in whole or in part, except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loan and all other Obligations and the termination of Lender’s commitment to lend, or (d) provides for scheduled payment of dividends in cash; provided, however, that if such equity interests are issued to any employee or to any plan for the benefit of employees of any Loan Party or by any such plan to such employees, such equity interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by a Loan Party in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

6.14 Negative Pledge, Intellectual Property.

(a) Except pursuant to clause (a) of Section 6.4, no Loan Party shall create, incur, assume or suffer to exist any Lien on any of its Intellectual Property whether now owned or hereafter acquired or created and wherever located or any income, profits or proceeds therefrom, or file or consent to the filing or recording of any security agreement, financing statement or other notice of any Lien with respect to any Intellectual Property or the income, profits or proceeds therefrom.

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(b) No Loan Party shall enter into any agreement with any party (other than this Agreement and the other Loan Documents) that limits the ability of any Loan Party to create, incur, assume or suffer to exist Liens on Intellectual Property whether now owned or hereafter acquired or created or any income, profits or proceeds therefrom.

Article 7

Conditions to Closing

7.1 Funding Term Loan. The obligation of Lender to fund the Loan is subject to the fulfillment, on or prior to the date hereof (the “Closing Date”), of each of the following conditions precedent:

(a) Loan Parties shall have performed and complied in all material respects with all of the covenants, agreements, obligations and conditions required by this Agreement.

(b) Lender shall have received:

(i) this Agreement, the Notes and the other Loan Documents, in each case, as executed and delivered by each Person that is a party thereto.

(ii) evidence satisfactory to Lender that the insurance policies and endorsements required by Section 5.4 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Lender;

(iii) the governing documents of the Loan Parties, executed by the applicable Loan Party and the members identified therein, each in form and substance satisfactory to Lender and with such amendments as are necessary to give effect to the transactions contemplated by this Agreement, and copies of the publicly filed organizational documents of each Loan Party, certified by the Secretary of State or other appropriate public official in the jurisdiction in which such Loan Party is organized;

(iv) copies of all company action taken by each Loan Party, including resolutions of its board of directors or similar governing body and shareholders of the Borrower if necessary, authorizing the execution, delivery and performance of this Agreement and the other Loan Documents;

(v) with respect to each Loan Party, (i) a good standing certificate of each Loan Party certified by the Secretary of State of Delaware and (ii) a good standing/foreign qualification certificate of each Loan Party certified by the Secretary of State (or equivalent agency) of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, in the case of (i) and (ii), each as of a date no earlier than thirty (30) days prior to the Closing Date;

(vi) [reserved];

(vii) a certificate of an officer of each Loan Party with respect to its operating documents, incumbency and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party;

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(viii) satisfactory pay-off letters for all existing Indebtedness to be repaid from the proceeds of the Loan, confirming that all liens upon any of the property of the Loan Parties will be terminated concurrently with such payment and authorizing Lender to file terminations of any financing statements or other evidence of the liens granted thereunder;

(ix) legal opinions of Borrower’s outside counsel, dated as of the Closing Date, in form and substance satisfactory to Lender;

(x) certified copies, dated as of a recent date, of such Lien searches as Lender may request, accompanied by written evidence (including any UCC termination statements and other Lien releases) that the Liens indicated in any such financing statements or other filings either constitute Permitted Liens or have been or, in connection with the Loan, will be terminated or released;

(xi) asset appraisals, third party acquisition proposals, license reviews, valuations, intellectual property reviews, individual background checks on management, insurance, and other due diligence analysis performed with respect to the Loan Parties, as well as other financial, legal, and accounting information related to, or impacting, the Loan Parties, in each case satisfactory to Lender; and

(xii) such other agreements, documents and consents as Lender may require.

(c) the representations and warranties in this Agreement shall be true, accurate and complete in all material respects on the funding date of the Loan; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Loan.

(d) Lender determines to its satisfaction that there has not been any material adverse change in (i) the financial and capital markets; (ii) the Borrower’s business including the status of any intellectual property challenges and litigation, the ability of the Loan Parties or their Subsidiaries to perform their respective obligations under the loan documents, financial performance, operations, prospects, or condition of the assets of the Loan Parties; and (iii) the ability of the Lender to enforce the loan documents.

(e) Lender shall have completed its business, legal, financial, and collateral due diligence.

(f) Loan Parties shall have paid all expenses of Lender incurred in connection with the transactions evidenced by this Agreement and the other Loan Documents.

(g) On the Closing Date, Lender shall be the Borrower’s sole senior secured creditor.

(h) All legal structures of the Loan Parties and the transactions contemplated herein shall be acceptable to Lender; and Lender shall be satisfied with the nature and status of all securities, labor, tax, litigation, environmental, reimbursement and FDA matters and other matters involving or affecting the Loan Parties.

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Article 8

Default and Remedies

8.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default hereunder:

(a) Default in the payment of the principal on the indebtedness evidenced by the Notes in accordance with the terms of the Notes;

(b) Default in the payment of interest on the indebtedness evidenced by the Notes in accordance with the terms of the Notes, and, except with respect to the payment due on the Maturity Date (which shall be an immediate Event of Default), such non-payment continues for three (3) Business Days after any such interest becomes due;

(c) Any misrepresentation by any Loan Party or any guarantor of the Loan as to any material matter hereunder or under any of the other Loan Documents, or delivery by any Loan Party of any schedule, statement, resolution, report, certificate, notice or writing to Lender that is untrue in any material respect on the date as of which the facts set forth therein are stated or certified;

(d) Failure of any Loan Party or any other guarantor of the Loan to perform any of its obligations, covenants or agreements or violates any covenant under (i) any of Sections 5.2, 5.3, 5.4, 5.6 (solely with respect to corporate existence), 5.8, 5.9, 5.13 or Article 6, or (ii) any other terms under this Agreement, the Notes or any of the other Loan Documents and, in the case of this clause (ii), such failure or violation continues for a period of thirty (30) days after the occurrence thereof, provided, however, that if the default cannot by its nature be cured within the thirty (30) day period or cannot after diligent attempts by the Loan Parties be cured within such thirty (30) day period, and such default is likely to be cured within a reasonable time, then the Loan Parties shall have an additional period (which shall not in any case exceed forty-five (45) days, unless otherwise agreed upon between the Loan Parties and Lender in writing) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default;

(e) The occurrence of any event or circumstances occurs that causes or could reasonably be expected to cause a Material Adverse Effect, as determined by Lender in its reasonable discretion;

(f) Any Loan Party (i) shall generally not pay or shall be unable to pay its debts as such debts become due, or (ii) shall make an assignment for the benefit of creditors or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (iii) shall commence any Insolvency Proceeding, or (iv) shall have had any such petition or application filed or any Insolvency Proceeding commenced against it that is not dismissed within 60 days, or (v) shall indicate, by any act or intentional and purposeful omission, its consent to, approval of or acquiescence in any such petition, application, Insolvency Proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (vi) shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of 60 days or more;

(g) Any Loan Party shall be liquidated, dissolved, partitioned or terminated, or the charter or articles of incorporation or organization thereof shall expire or be revoked;

(h) Any Loan Party shall have defaulted and continue to be in default (a) in the timely payment of any other Indebtedness or obligation in accordance with its terms (including any notice or cure periods applicable thereto), which in the aggregate exceeds $100,000, or (b) in the timely performance of any covenant relating to any other Indebtedness or obligation, which in the aggregate exceeds $100,000, the effect of which default is to cause any or all of such Indebtedness or obligation to become due and payable in accordance with its terms prior to its stated maturity date, whether by declaration or otherwise;

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(i) Any of the following events shall occur: (i) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of fifty percent (50.0%) or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted basis); (ii) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (A) who were members of that board or equivalent governing body on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (C) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (iii) at any time, Borrower shall cease to own and control, of record and beneficially, directly or indirectly, one hundred percent (100.0%) of each class of outstanding equity interests of any of its Subsidiaries free and clear of all Liens (except Liens created by the Loan Documents);

(j) One or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $100,000 (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage) has been entered into against any Loan Party and (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;

(k) Any of (i) the service of process seeking to attach, by trustee or similar process, any funds of any Loan Party or of any entity under the control of any Loan Party (including a Subsidiary), (ii) a notice of lien or levy is filed against any of any Loan Party’s assets by any Governmental Body, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); (iii) any material portion of any Loan Party’s assets is attached, seized, levied on, or comes into receiver, or (iv) any court order enjoins, restrains, or prevents any Loan Party from conducting all or any material part of its business;

(l) Any document, instrument, or agreement evidencing the subordinated status of any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or any applicable subordination or intercreditor agreement;

(m) Any governmental approval (including DEA and FDA) and/or clearance for any drug candidates or any future products of any Loan Party that are FDA approved shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Body that designates a hearing with respect to any applications for renewal of any of such governmental approval or that would reasonably be expected to result in the Governmental Body taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) cause, or would reasonably be expected to cause, a Material Adverse Effect, or (ii) adversely affects the legal qualifications of any Loan Party or any of its Subsidiaries to hold such governmental approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal would reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any governmental approval in any other jurisdiction; or

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(n) The validity or enforceability of any Loan Document shall at any time for any reason be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any governmental authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document.

8.2 Acceleration of Maturity; Remedies. Upon (i) the occurrence of any Event of Default described in subsection 8.1(f), the Obligations as well as any and all other Indebtedness of any Loan Party to Lender shall be immediately due and payable in full; and (ii) the occurrence of, and during the continuance of, any other Event of Default described above, Lender at any time thereafter may accelerate the maturity of the indebtedness evidenced by the Notes as well as any and all other Indebtedness of any Loan Party to Lender; in each case without notice of any kind. Upon the occurrence of any such Event of Default and the acceleration of the maturity of the indebtedness evidenced by the Notes:

(a) Lender shall be immediately entitled to exercise any and all rights and remedies possessed by Lender pursuant to the terms of the Notes and all of the other Loan Documents.

(b) Lender shall have any and all other rights and remedies that Lender may now or hereafter possess at law, in equity or by statute, including realization of securities.

8.3 Remedies Cumulative; No Waiver. No right, power or remedy conferred upon or reserved to Lender by this Agreement or any of the other Loan Documents is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder, under any of the other Loan Documents or now or hereafter existing at law, in equity or by statute. No delay or omission by Lender to exercise any right, power or remedy accruing upon the occurrence of any Event of Default shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every right, power and remedy given by this Agreement and the other Loan Documents to Lender may be exercised from time to time and as often as may be deemed expedient by Lender.

8.4 Proceeds of Remedies. Any or all proceeds resulting from the exercise of any or all of the foregoing remedies shall be applied as set forth in the Loan Document(s) providing the remedy or remedies exercised, if none is specified, or if the remedy is provided by this Agreement, then as follows:

First, to the costs and expenses, including without limitation reasonable attorneys’ fees and disbursements, incurred by Lender in connection with the exercise of its remedies;

Second, to the expenses of curing the default that has occurred, in the event that Lender elects, in its sole discretion, to cure the default that has occurred;

Third, to the payment of the Obligations, including, but not limited to, the payment of the principal of and interest on the indebtedness evidenced by the Notes, in such order of priority as Lender shall determine in its sole discretion; and

Fourth, the remainder, if any, to the applicable Loan Party or to any other person lawfully thereunto entitled.

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Article 9

Reserved

Article 10

Pro Rata Treatment

10.1 Pro Rata Treatment. If at any time there are two or more holders of Notes and any such holder (a “Benefited Lender”) shall at any time receive any payment under such Benefited Lender’s Note(s) (whether by set-off, exercise of subrogation rights, exercise of guaranty rights, or otherwise) in a greater proportion than its ratable share, such Benefited Lender shall deliver such excess payment ratably to the other holders of Notes and thereafter shall be deemed to have purchased for cash from such other holders such participations in the other holders’ Notes as shall be necessary to cause the Benefited Lender to share excess payment ratably with the other holders; provided, however, that if all or any portion of such excess payment is thereafter recovered from the Benefited Lender, such purchase shall be rescinded, and the excess payment returned to the Benefited Lender to the extent of such recovery, but without interest. Lender agrees that each holder so purchasing a participation in another holder’s Note(s) may, to the fullest extent permitted by law, exercise all rights of payment (including, but not limited to, rights of set-off, subrogation or guaranty) with respect to such participation so purchased as if such holder were the direct creditor of Lender in the amount of such participation.

Article 11

Termination

11.1 Termination of This Agreement. This Agreement shall remain in full force and effect until the payment in full by Borrower of the Obligations, at which time Lender shall cancel the Notes and deliver them to Borrower; provided, however, that the indemnities provided in Section 12.16 shall survive the termination of this Agreement. Notwithstanding anything to the contrary herein, the liability of each Loan Party hereunder shall be reinstated and revised, and the rights of Lender shall continue, with respect to any amount at any time paid by or on behalf of any Loan Party on account of this Agreement or the other Loan Documents which Lender shall restore or return by reason of the bankruptcy, insolvency or reorganization of any Loan Party or for any other reasons, all as though such amount had not been paid.

Article 12

Miscellaneous

12.1 Performance by Lender. Upon an Event of Default and the continuance thereof, Lender may cure the same, and all payments made or costs or expenses incurred by Lender in connection therewith (including, but not limited to, reasonable attorneys’ fees), with interest thereon at the rate provided in this Agreement, shall be immediately repaid to Lender by Borrower and shall constitute a part of the Obligations. Lender shall be the sole judge of the necessity for any such actions and of the amounts to be paid.

12.2 Successors and Assigns Included in Parties. Whenever in this Agreement one of the parties hereto is named or referred to, the heirs, legal representatives, successors, successors-in-title and assigns of such parties shall be included in such name or reference, and all covenants and agreements contained in this Agreement by or on behalf of any Loan Party or by or on behalf of Lender shall bind and inure to the benefit of their respective heirs, legal representatives, successors-in-title and assigns, whether so expressed or not.

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12.3 Costs and Expenses. Loan Parties agree to pay all reasonable and out-of-pocket costs and expenses incurred by Lender in connection with the making of the Loan, including but not limited to filing fees, recording taxes and reasonable attorneys’ fees, promptly upon demand of Lender. Loan Parties further agree to pay all premiums for insurance required to be maintained by Loan Parties pursuant to the terms of the Loan Documents and all of the reasonable and out-of-pocket costs and expenses incurred by Lender in connection with the administration or collection of the Loan (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings), preparation, amendment or enforcement of the Loan Documents, or prepayment of the Loan, including but not limited to reasonable attorneys’ fees, promptly upon (and in any event within five (5) Business Days after) demand of Lender. Loan Parties will pay all out-of-pocket costs of filing of financing, continuation and termination statements with respect to the security interests created hereby.

12.4 Assignment. The Notes, this Agreement and the other Loan Documents may be endorsed, assigned and/or transferred in whole or in part by Lender without the consent of Borrower; provided, however, that no such endorsement, assignment or transfer may be made to any Loan Party or any Affiliate of any Loan Party, and the assignor shall deliver to Borrower such assignee’s agreement in writing to assume such assignor’s obligations hereunder. Any such holder and/or assignee of the same shall succeed to and be possessed of the rights and powers of Lender under all of the same to the extent transferred and assigned. Lender may grant participations in all or any portion of its interest in the indebtedness evidenced by the Notes, and in such event each Loan Party shall continue to make payments due under the Loan Documents to Lender and Lender shall have the sole responsibility of allocating and forwarding such payments in the appropriate manner and amounts. No Loan Party shall assign any of its rights nor delegate any of its duties hereunder or under any of the other Loan Documents without the prior written consent of Lender.

12.5 Time of the Essence. Time is of the essence with respect to each and every covenant, agreement and obligation of each Loan Party hereunder and under all of the other Loan Documents.

12.6 Severability. If any provision(s) of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

12.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law. Anything in this Agreement, the Notes or any of the other Loan Documents to the contrary notwithstanding, in no event whatsoever, whether by reason of advancement of proceeds of the Loan, acceleration of the maturity of the unpaid balance of the Loan or otherwise, shall the interest and other charges agreed to be paid to Lender for the use of the money advanced or to be advanced hereunder exceed the maximum amounts collectible under applicable laws in effect from time to time. It is understood and agreed by the parties that, if for any reason whatsoever the interest or loan charges paid or contracted to be paid by any Loan Party in respect of the indebtedness evidenced by the Notes shall exceed the maximum amounts collectible under applicable laws in effect from time to time, then ipso facto, the obligation to pay such interest and/or loan charges shall be reduced to the maximum amounts collectible under applicable laws in effect from time to time, and any amounts collected by Lender that exceed such maximum amounts shall be applied to the reduction of the principal balance of the indebtedness evidenced by the Notes and/or refunded to such Loan Party so that at no time shall the interest or loan charges paid or payable in respect of the indebtedness evidenced by the Notes exceed the maximum amounts permitted from time to time by applicable law.

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12.8 Article and Section Headings. Numbered and titled article and section headings and defined terms are for convenience only and shall not be construed as amplifying or limiting any of the provisions of this Agreement.

12.9 Notices. Any and all notices, elections or demands permitted or required to be made under this Agreement shall be in writing, signed by the party giving such notice, election or demand and shall be delivered personally, or sent by certified mail or overnight via nationally recognized courier service (such as Federal Express), to the other party at the address set forth below, or at such other address as may be supplied in writing and of which receipt has been acknowledged in writing. The date of personal delivery or two (2) Business Days after the date of mailing (or the next business day after delivery to such courier service), as the case may be, shall be the date of such notice, election or demand. Lender or Borrower may, in its reasonable discretion, agree to accept notices and other communications to it hereunder by electronic communications (including email and internet or intranet websites) pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. For the purposes of this Agreement:

The address of Lender is:	Harrow Health, Inc.
	102 Woodmont Blvd., Suite 610
	Nashville, TN 37205
	Attention: Andrew R. Boll
	Email:aboll@harrowinc.com

with a copy to:	Waller Lansden Dortch & Davis, LLP
	511 Union Street, Suite 2700
	Nashville, Tennessee 37219
	Attention: Elle McCulty
	Email:eleanor.mcculty@wallerlaw.com

The Address of Loan Parties is:	Melt Pharmaceuticals, Inc.
	102 Woodmont Blvd., Suite 610
	Nashville, TN 37205
	Attention: Larry Dillaha
	Email:ldillaha@meltpharma.com

with a copy to:	Bass, Berry & Sims PLC
	150 Third Ave. S., Suite 2800
	Nashville, Tennessee 37201
	Attention: Katie D. Day
	Email:kday@bassberry.com

12.10 Public Disclosure. Neither Lender nor Loan Parties shall make any public announcement regarding the existence of this Agreement, and the transactions contemplated hereby, without the other party’s prior written consent, which consent may be withheld in the sole discretion of such party.

12.11 Entire Agreement. This Agreement and the other written agreements between Loan Parties and Lender represent the entire agreement between the parties concerning the subject matter hereof, and all oral discussions and prior agreements are merged herein; provided, if there is a conflict between this Agreement and any other document executed contemporaneously herewith with respect to the Obligations, the provision of this Agreement shall control. The execution and delivery of this Agreement and the other Loan Documents by Loan Parties were not based upon any fact or material provided by Lender, nor was any Loan Party induced or influenced to enter into this Agreement or the other Loan Documents by any representation, statement, analysis or promise by Lender.

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12.12 Governing Law and Amendments. This Agreement shall be construed and enforced under the laws of the State of Delaware applicable to contracts to be wholly performed in such State. No amendment, modification, termination or waiver of any provision of any Loan Document to which any Loan Party is a party, nor consent to any departure by any Loan Party from any Loan Document to which it is a party, shall in any event be effective unless the same shall be in writing and signed by Lender; provided, however, that it is understood that the terms of the Notes may only be modified by the written consent of Lender and the Loan Parties.

12.13 Survival of Representations and Warranties. All representations and warranties contained herein or in any of the Loan Documents made by or furnished on behalf of Borrower in connection herewith or in any Loan Documents shall survive the execution and delivery of this Agreement and the other Loan Documents.

12.14 Counterparts. This Agreement may be executed in any number of counterparts and by different parties to this Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement.

12.15 Construction and Interpretation. Should any provision of this Agreement require judicial interpretation, the parties hereto agree that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be more strictly construed against the party that itself or through its agent prepared the same, it being agreed that each Loan Party, Lender and their respective agents have participated in the preparation hereof.

12.16 General Indemnification. Each Loan Party agrees to indemnify, defend and hold Lender and its Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of Lender and its Affiliates (each, an “Indemnified Person”) harmless against: all losses, claims, damages, liabilities and related expenses (including cost and expenses of the type described in Section 12.3 and the reasonable fees, charges and disbursements of any counsel for any Indemnified Person) (collectively, “Claims”) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by any Loan Party or any of their Subsidiaries, or any environmental liability related in any way to any Loan Party or any of their Subsidiaries, or (iv) any actual or reasonably likely prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrower, and regardless of whether any Indemnified Person is a party thereto; provided that such indemnity shall not, as to any Indemnified Person, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Person. All amounts due under this Section 12.16 shall be payable promptly after demand therefor.

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12.17 Standard of Care; Limitation of Damages. Lender shall be liable to Loan Parties only for matters arising from this Agreement or otherwise related to the Obligations resulting from Lender’s gross negligence or willful misconduct, and liability for all other matters is hereby waived. To the fullest extent permitted by Applicable Law, Borrower shall not assert, and hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) or any loss of profits arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan, or the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

12.18 Consent to Jurisdiction; Exclusive Venue. Each Loan Party hereby irrevocably consents to the jurisdiction of the United States District Court for the District of Delaware and of all Delaware state courts sitting in New Castle County, Delaware, for the purpose of any litigation to which Lender may be a party and which concerns this Agreement or the Obligations. It is further agreed that venue for any such action shall lie exclusively with courts sitting in New Castle County, Delaware, unless Lender agrees to the contrary in writing.

12.19 Waiver of Trial by Jury. lender and Loan Parties hereby knowingly and voluntarily with the benefit of counsel waive trial by jury in any actions, proceedings, claims or counter-claims, whether in contract or tort or otherwise, at law or in equity, arising out of or in any way relating to this Agreement or the Loan Documents.

12.20 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.

[Signatures begin on next page]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or have caused this Agreement to be executed by their duly authorized officers, as of the day and year first above written.

Lender:
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Financial Officer

[Signatures continue on next page]

Signature Page Loan and Security Agreement

Loan Parties:
MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer

Signature Page Loan and Security Agreement

Index of Exhibits and Schedules

Exhibit A – Defined Terms

Exhibit B – Form of Compliance Certificate

Schedule 3.4 – Collateral Accounts

Schedule 4.2 – Subsidiaries

Schedule 4.5 – Capitalization Table

Schedule 4.6(a) – Intellectual Property

Schedule 4.6(b) – Intellectual Property

Schedule 4.6(c) – Intellectual Property

Schedule 4.6(f) – Intellectual Property

Schedule 4.13 – Certain Transactions

Schedule 4.16 – Material Contracts

Schedule 4.19 – ERISA Plans

Schedule 4.27 – Location of Properties; Names; Places of Business

Schedule 6.3 – Indebtedness

Schedule 6.4 – Liens

Exhibit A

Defined Terms

“Acquisition” means any transaction, or any series of related transactions, by which any Person, directly or indirectly acquires any going concern or all or a substantial part of the assets or equity of any corporation, partnership or other Person or any division or location of any such Person, or any such Person or any division or location of any such Person becomes a Subsidiary of such Person.

“Affiliate” shall mean, with respect to any Person, (a) each Person (as hereinafter defined) that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, twenty-five percent (25%) or more of the capital stock or equity interests having ordinary voting power in the election of directors of such Persons, and (b) each Person that controls, is controlled by or is under common control with such Person (including any member of the senior management group of such Person). For the purpose of the definition of “Affiliate”, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; provided, however, that with respect to the Loan Parties, the term “Affiliate” shall specifically exclude Harrow and its Subsidiaries.

“Change in Law” shall mean the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any applicable Law; (b) any change in any applicable Law or in the administration, implementation, interpretation or application thereof by any Governmental Body; or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Body.

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“DEA” shall mean the U.S. Drug Enforcement Administration.

“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.

“Environmental Laws” shall mean all environmental, health, chemical use, safety and sanitation laws, statutes, ordinances and codes as well as common laws, relating to the protection of the environment or of human health (related to Hazardous Substances) and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Materials and the rules, regulations, orders and directives of any Governmental Body with respect thereto.

“Excluded Account” means any (a) deposit account or securities account used exclusively for payroll, employee benefits or employee taxes, the funds of which shall not exceed the amount required to pay the next payroll or other relevant cycle, (b) zero balance account, and (c) other accounts with an aggregate balance not to exceed $100,000.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of Lender with respect to an applicable interest in the Loan held by it pursuant to a law in effect on the date on which (i) Lender acquires such interest in the Loan (other than pursuant to an assignment request by Borrower) or (ii) Lender changes its lending office, except in each case to the extent that, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.2(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

Exhibit A-1

“FATCA” means Sections 1471, 1472, 1473 and 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), current or future United States Treasury Regulations promulgated thereunder and published guidance with respect thereto, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements with respect thereto.

“FDA” shall mean the U.S. Food and Drug Administration.

“Governmental Body” shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to a government (including any supra-national bodies such as the European Union or the European Central Bank), including the FDA and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board or any successor or similar authority).

“Hazardous Materials” shall mean any flammable explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, hazardous wastes, hazardous or toxic substances or related materials as defined in or subject to regulation under Environmental Laws.

“Indebtedness” means as to any Person (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (iii) all obligations of such Person as a lessee under capital leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (iv) all obligations or liabilities of others secured by a lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, provided that if such Person has not assumed or otherwise become liable for such obligation or liability, such obligation or liability shall be measured at the fair market value of such property securing such obligation or liability at the time of determination, (v) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business not outstanding for more than 120 days after the date such payable was created), (vi) all monetary obligations of such Person owing under any hedge agreements, (vii) earnouts and similar liabilities of a Loan Party arising under an agreement to make any deferred payment as a part of the purchase price for an acquisition in an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of the target of such acquisition, and (viii) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of the foregoing clauses.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to the execution, delivery, issuance or recording of any of the Loan Documents, or the creation or repayment of any of the Obligations hereunder and (b) to the extent not otherwise described in (a) above, Other Taxes.

Exhibit A-2

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“Intellectual Property” shall mean all intellectual property of any Loan Party of every kind and nature now owned or hereafter acquired by any Loan Party, including inventions, designs, Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, trade secrets, confidential or proprietary technical and business information, clinical trial data and outputs, manufacturing data and outputs, other know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation and registrations, and all additions and improvements to any of the foregoing. For purposes of this definition:

(a) “Copyrights” shall mean (1) all registered copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (2) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office (or any successor office or any similar office in any other country), including those registered and pending copyrights listed on Schedule 4.6.

(b) “Copyright Licenses” shall mean any written agreement, now or hereafter in effect, granting any right to any third person under any registered copyright now or hereafter owned by any Loan Party or that such Loan Party otherwise has the right to license, or granting any right to any Loan Party under any registered copyright now or hereafter owned by any third person, and all rights of such Loan Party under any such agreement.

(c) “Patents” shall mean (1) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office (or any successor or any similar offices in any other country) and all continuing applications such as divisions, substitutions, extensions and continuation-in-part applications, including those listed on Schedule 4.6, and (2) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to exclude others from making, using and/or selling the inventions disclosed or claimed therein.

(d) “Patent Licenses” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Loan Party or that any Loan Party otherwise has the right to license, is in existence, or granting to any Loan Party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third person, is in existence, and all rights of any Loan Party under any such agreement.

(e) “Trademarks” shall mean (1) all registered trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and applications for registration (other than intent-to-use applications) in the United States Patent and Trademark Office (or any successor office) or any similar offices in any State of the United States, and all extensions or renewals thereof, including those listed on Schedule 4.6, and (2) all goodwill associated therewith or symbolized thereby.

Exhibit A-3

(f) “Trademark Licenses” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to use any Trademark now or hereafter owned by any Loan Party or that any Loan Party otherwise has the right to license, or granting to any Loan Party any right to use any Trademark now or hereafter owned by any third person, and all rights of any Loan Party under any such agreement.

“Interest Rate” shall mean 12.5% per annum.

“Laws” shall mean, collectively, all international, foreign, federal, state, district and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Body charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Body, in each case whether or not having the force of law, and including applicable securities legislation. “Law” has a meaning correlative thereto.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or otherwise), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including the interest of a seller under any conditional sale contract or other title retention agreement, the interest of a lessor under a capital lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

“Material Adverse Effect” shall mean a material adverse effect on (i) the business operations, properties, assets or condition (financial or otherwise) of the Loan Parties taken as a whole; (ii) the ability of any Loan Party to fully and timely perform its Obligations; (iii) the legality, validity, binding effect, or enforceability against a Loan Party of a Loan Document to which it is a party; or (iv) the rights and remedies available to, or conferred upon, Lender.

“Maturity Date” means, the earlier of (a) September 1, 2022 (or if such date is not a Business Day, on the next Business Day after such date), and (b) the date on which the maturity date of the Loan accelerates after or upon an Event of Default.

“Obligations” as used herein shall refer to (a) the Loan to be made under this Agreement and any renewals, extensions, modifications or increases thereof (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any Insolvency Proceeding relating to Loan Parties, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), (b) the full and prompt payment and performance of any and all other amounts, indebtedness and other obligations of Loan Parties to Lender, direct or contingent (including but not limited to obligations incurred as endorser, guarantor or surety), however evidenced or denominated, and however and whenever incurred, in each case to the extent arising under this Agreement or any of the other Loan Documents and (c) all future advances made in accordance with this Agreement by Lender for taxes, levies, insurance and preservation of the Collateral (as hereinafter defined) and all reasonable attorneys’ fees, court costs and expenses of whatever kind incident to the collection of any of said indebtedness or other obligations and the enforcement and protection of the security interest created hereby or by the other Loan Documents, in each case to the extent the Loan Parties have an obligation under this Agreement or the Loan Documents to indemnify or reimburse such amounts.

Exhibit A-4

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in the Loan or any Loan Document).

“Other Taxes” shall mean all present or future stamp, court, documentary, excise, property, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to a request by a Lender).

“Permitted Acquisition” or “Permitted Acquisitions” is any Acquisition for which each of the conditions below is satisfied:

(a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition;

(b) the entity or assets acquired in such Acquisition are in the same or similar line of business as Borrower is in as of the date hereof or reasonably related thereto;

(c) Borrower shall provide Lender with written notice of the proposed Acquisition at least ten (10) Business Days prior to the anticipated closing date of the proposed Acquisition, together with any available quarterly and annual financial statements and quality of earnings reports, and not less than five (5) Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and all other material documents relative to the proposed Acquisition (or if such acquisition agreement and other material documents are not in final form, drafts of such acquisition agreement and other material documents; provided that Borrower shall deliver final forms of such acquisition agreement and other material documents promptly upon completion) and such other information as Lender may reasonably request;

(d) [Reserved];

(e) the Acquisition shall not constitute a hostile acquisition;

(f) the entity or assets acquired in such Acquisition shall not be subject to any Lien other than (x) the first-priority Liens granted in favor of Lender, if applicable and (y) Permitted Liens; and

(g) if such Acquisition is in the form of a merger by Borrower into another Person, Borrower is the surviving legal entity;

(h) if such Acquisition is in the form of a merger by a Subsidiary into another Person, one hundred percent (100%) of the outstanding and issued equity of the surviving legal entity shall be owned by Borrower or a Subsidiary;

(i) no Indebtedness shall be assumed by any Borrower in connection with such Acquisition other than Permitted Debt;

Exhibit A-5

(j) the acquired entity (in the case of an acquisition of equity) will be a “United States Person” within the meaning of the Code immediately upon consummation of such Acquisition or the acquired assets (in the case of an acquisition of assets) will be located in the United States immediately upon consummation of such Acquisition; and

(k) the credit risk to Lender, in its good faith business judgment, shall not be materially increased as a result of the Permitted Acquisition.

“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, Governmental Body or other entity, and any fiduciary acting in such capacity on behalf of any of the foregoing.

“Recipient” shall mean Lender or any other recipient of any payment to be made by or on account of the Obligations of any Loan Party hereunder or under any other Loan Document.

“ROFR Agreement” means that certain Right of First Refusal Agreement, dated as of the date hereof, by and between Borrower and Lender.

“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of a Loan Party.

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Body, including any interest, additions to tax or penalties applicable thereto.

“Withholding Agent” shall mean each Loan Party and Lender.

“UCC” shall mean the Uniform Commercial Code as adopted in the State of Delaware from time to time, or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code as adopted in such jurisdiction.

“United States” and “U.S.” shall mean the United States of America.

Exhibit A-6

Exhibit B

Form of Compliance Certificate

Harrow Health, Inc.

102 Woodmont Blvd., Suite 610

Nashville, TN 37205

Attention: Andrew R. Boll

Email: aboll@harrowinc.com

Compliance Certificate

The undersigned hereby certifies to Harrow Health, Inc., a Delaware corporation. (“Lender”) pursuant to that certain Loan and Security Agreement dated as of August 31, 2021 (the “Loan Agreement”) by and among, MELT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), and Lender, that as of this date, ___________________, 20____:

1.	The undersigned is the _____________________________ (title of officer) of Borrower.
2.	To the best knowledge of the undersigned officer, there exists no Default or Event of Default, as that term is defined in the Loan Agreement or, if such an event or circumstance exists, a writing attached hereto specifies the nature thereof, the period of existence thereof and the action that Borrower has taken or proposes to take with respect thereto.
3.	To the best knowledge of the undersigned officer, no Material Adverse Effect has occurred since ___________________ (same date as above), or, if such a change has occurred a writing attached hereto specifies the nature thereof and the action that Loan Parties have taken or proposes to take with respect thereto.
4.	To the best knowledge of the undersigned officer, [except as described in a writing attached hereto specifying the nature thereof and the action that Loan Parties have taken or proposes to take with respect thereto] the representations and warranties in the Loan Agreement are true and correct in all material respects as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date; provided that any such representation and warranty that is qualified by “materiality”, “material adverse effect” or similar language is true and correct in all respects.
5.	The financial statements of Borrower being concurrently delivered herewith have been prepared in accordance with generally accepted accounting principles consistently applied and there have been no material changes in accounting policies or financial reporting practices of Borrower since ___________________ (same date as above), or, if any such change has occurred, such changes are set forth in writing attached herein.

MELT PHARMACEUTICALS, INC.
By:
Title:
Date:

Exhibit B-1

EX-10.13

Exhibit 10.13

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of April 8, 2022 (the “Amendment Effective Date”), is made among HARROW HEALTH, INC., a Delaware corporation (“Lender”), MELT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), and certain subsidiaries of the Borrower from time to time party to the Loan and Security Agreement as guarantors (defined below) (each a “Guarantor” and collectively, jointly and severally, “Guarantors” and collectively with the Borrower, each a “Loan Party” and collectively, the “Loan Parties”).

RECITALS

A. Loan Parties and Lender are parties to a Loan and Security Agreement, dated as of September 1, 2021 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Loan and Security Agreement”).

B. Borrower has requested that Lender agree to certain amendments to the Loan and Security Agreement. Lender has agreed to such request, subject to the terms and conditions hereof.

AGREEMENTS

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms; Interpretation.

(a) Terms Defined in Loan and Security Agreement. All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.

(b) Interpretation. The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

SECTION 2. Amendments to the Loan and Security Agreement.

(a) The Loan and Security Agreement shall be amended as follows effective as of the Amendment Effective Date:

(i) New Definitions. The following definitions are hereby added to Exhibit A in their proper alphabetical order:

“Cash Equivalents” shall mean (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having a rating of at least A-1 from Standard & Poor’s Ratings Group or at least a P-1 from Moody’s Investors Service, Inc.; (c) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within one (1) year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000; and (d) other short term liquid investments reasonably acceptable to Lender.

“First Amendment” shall mean that certain First Amendment to Loan and Security Agreement, dated as of April 8, 2022, by and among the Lender and the Loan Parties.

“Liquidity” shall mean the aggregate amount of unrestricted cash on hand and Cash Equivalents of a Person.

(ii) Amended and Restated Definitions. The definitions of “Material Adverse Effect” and “Maturity Date” in Exhibit A are hereby amended and restated in their entirety as follows:

“Material Adverse Effect” shall mean a material adverse effect on (i) the business operations, properties, assets or condition (financial or otherwise) of the Loan Parties taken as a whole; (ii) the ability of any Loan Party to fully and timely perform its Obligations; (iii) the legality, validity, binding effect, or enforceability against a Loan Party of a Loan Document to which it is a party; or (iv) the rights and remedies available to, or conferred upon, Lender. Further, a Material Adverse Effect shall be deemed to have occurred in the event that data from the phase 2 study of MELT-300 failed to demonstrate the benefit of the combination MELT-300 study drug versus the individual components of the same MELT-300 study drug, as reasonably determined by Lender.

“Maturity Date” means, the earlier of (a) September 1, 2026 (or if such date is not a Business Day, on the next Business Day after such date), and (b) the date on which the maturity date of the Loan accelerates after or upon an Event of Default.

(iii) Access to Bank Accounts. The following language is hereby added as a new Section 5.15 (Access to Bank Accounts):

“5.15 Access to Bank Accounts. Each Loan Party will provide Lender with monthly bank statements, view access to such accounts, and any information or documentation reasonably required or requested by Lender to evidence any amounts held in such accounts.”

(iv) Financial Covenants. The following language is hereby added as a new Section 6.15 (Financial Covenants):

“6.15 Financial Covenants.

(a) Minimum Liquidity. Borrower shall not permit Liquidity to be less than (a) $7,000,000 at all times during the period beginning on the date Borrower has consummated a Qualifying Financing (as defined in the First Amendment) and ending on the date that is one (1) year thereafter (the “Liquidity Adjustment Date”) and (b) $5,000,000 at all times after the Liquidity Adjustment Date and continuing until the Maturity Date.”

(b) References Within Loan and Security Agreement. Each reference in the Loan and Security Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

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SECTION 3. Conditions of Effectiveness. Except as set forth in this Section 3, this Amendment shall become effective as of the date on which Borrower shall have delivered to Lender this Amendment duly executed by an authorized officer of Borrower, and Lender shall have executed and delivered this Amendment. The effectiveness of Section 2 of this Amendment shall be subject to the satisfaction of each of the following conditions precedent; provided, that the requirements of Section 3(c) below are satisfied no later than August 31, 2022 (or such later date as Lender may agree in its sole discretion):

(a) Fees and Expenses. Borrower shall have paid (i) all invoiced costs and expenses then due in accordance with Section 5(c), and (ii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement.

(b) Representations and Warranties; No Default. On the Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement contemplated hereby:

(i) The representations and warranties contained in Section 4 herein shall be true and correct on and as of the Amendment Effective Date as though made on and as of such date; and

(ii) There shall exist no Events of Default or events that with the passage of time would result in an Event of Default.

(c) Consummation of Qualifying Financing. Lender shall have received evidence in form and substance acceptable to Lender in its reasonable discretion that Borrower has consummated a Qualifying Financing. For purposes of this Section 3(c), “Qualifying Financing” means (i) the issuance by Borrower of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) that results in such common Equity Interests being publicly traded on any United States national securities exchange or over the counter market resulting in cash gross proceeds to Borrower of at least $15,000,000; or (ii) the closing of any bona-fide equity financing with third party investors resulting in cash gross proceeds to Borrower of at least $15,000,000.

(d) Officer’s Certificate. Lender shall have received a certificate from an officer of the Borrower, in form and substance satisfactory to the Lender in its reasonable discretion, certifying that the conditions set forth in this Section 3 have been satisfied.

SECTION 4. Representations and Warranties. To induce Lender to enter into this Amendment, each Loan Party hereby confirms, as of the date hereof, that:

(a) the representations and warranties made by it in Section 4 of the Loan and Security Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that to the extent such representations and warranties by their terms expressly relate only to a prior date such representations and warranties shall be true and correct in all material respects as of such prior date, provided, further, that in each case such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;

(b) there has not been and there does not exist a Material Adverse Effect;

(c) Lender has and shall continue to have valid, enforceable and perfected first-priority liens, subject only to Permitted Liens, on and security interests in the Collateral and all other collateral heretofore granted to Lender pursuant to the Loan Documents;

(d) the agreements and obligations of each Loan Party contained in the Loan Documents and in this Amendment constitute the legal, valid and binding obligations of such Loan Party, enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by the application of general principles of equity; and

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(e) the execution, delivery and performance of this Amendment by the Loan Parties will not violate any law, rule, regulation, order, material contractual obligation or organizational document of any Loan Party and will not result in, or require, the creation or imposition of any lien, claim or encumbrance of any kind on any of its properties or revenues (other than any liens, claims or encumbrances created or permitted under any of the Loan Documents); and

(f) except as disclosed to Lender, no Loan Party has amended its organizational documents since the date of the Loan Documents.

For the purposes of this Section 4, each reference in Section 5 of the Loan and Security Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

SECTION 5. Miscellaneous.

(a) Loan Documents Otherwise Not Affected; Reaffirmation; No Novation.

(i) Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects. Lender’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.

(ii) Each Loan Party hereby expressly (1) reaffirms, ratifies and confirms its Obligations under the Loan and Security Agreement and the other Loan Documents, (2) reaffirms, ratifies and confirms the grant of security under Section 3.1 of the Loan and Security Agreement, (3) reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, as of the date hereof, and with effect from (and including) the Amendment Effective Date, such grant of security in the Collateral: (x) remains in full force and effect notwithstanding the amendments expressly referenced herein; and (y) secures all Obligations under the Loan and Security Agreement, as amended by this Amendment, and the other Loan Documents, (4) agrees that this Amendment shall be a “Loan Document” under the Loan and Security Agreement and (5) agrees that the Loan and Security Agreement and each other Loan Document shall remain in full force and effect following any action contemplated in connection herewith.

(iii) This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute an accord and satisfaction of any Loan Party’s Obligations under or in connection with the Loan and Security Agreement and any other Loan Document or to modify, affect or impair the perfection or continuity of Lender’s security interest in, security titles to or other liens on any Collateral for the Obligations.

(b) No Reliance. Each Loan Party hereby acknowledges and confirms to Lender that such Loan Party is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

(c) Costs and Expenses. Borrower agrees to pay to Lender within ten (10) days of its receipt of an invoice (or on the Amendment Effective Date to the extent invoiced on or prior to the Amendment Effective Date), the reasonable and out-of-pocket costs and expenses of Lender, and the reasonable and out-of-pocket fees and disbursements of counsel to Lender, in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Amendment Effective Date or after such date.

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(d) Binding Effect. This Amendment binds and is for the benefit of the successors and permitted assigns of each party.

(e) Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE LAWS OF THE STATE OF DELAWARE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

(f) Complete Agreement; Amendments. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

(g) Severability of Provisions. Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.

(h) Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment. Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission, including by electronic signature, will be as effective as delivery of a manually executed counterpart hereof.

(i) Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.

[Signatures Appear on the Following Page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first written above.

LOAN PARTIES:
MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer

Signature Page to First Amendment to Loan & Security Agreement

LENDER:
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Financial Officer

EX-10.14

Exhibit 10.14

PATENT SECURITY AGREEMENT

THIS PATENT SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, the “Patent Security Agreement”), dated as of September 1, 2021, is made by MELT PHARMACEUTICALS, INC., a Delaware corporation (the “Grantor”) in favor of HARROW HEALTH, INC., a Delaware corporation (“Lender”).

W I T N E S S E T H:

WHEREAS, Grantor and Lender have entered into that certain Loan and Security Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, as a condition to the extension of credit by the Lender to the Grantor under the Loan Agreement, Grantor has agreed to grant to the Lender a security interest in, and lien on, all of the Patent Collateral (defined below); and

WHEREAS, pursuant to the Loan Agreement, Grantor is required to execute and deliver this Patent Security Agreement to the Lender for purposes of recording such security interest with the United States Patent and Trademark Office;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor hereby agrees as follows:

Section 1. Defined Terms. Capitalized terms used herein without definition are used as defined in the Loan Agreement.

Section 2. Grant of Security Interest in Patent Collateral. Grantor, as security for the payment and performance, as the case may be, in full of the Obligations of Grantor, hereby assigns and pledges to the Lender, its successors and permitted assigns, a lien on and security interest in all of its right, title and interest in or to any and all of the following Collateral of Grantor (the “Patent Collateral”):

(a) all of its patents, patent licenses and patent applications, including, without limitation, those listed on Schedule 1 hereto;

(b) all renewals, reissues, divisions, continuations, continuations-in-part, reexaminations and extensions of the foregoing and amendments thereto;

(c) all rights of any kind whatsoever of Grantor accruing under any of the foregoing provided by applicable law of any jurisdiction, by international treaties and conventions, and otherwise throughout the world; and

(d) all income, fees, royalties, damages, proceeds and liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, violation or other impairment thereof.

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Section 3. After-Acquired Property. If the Grantor shall at any time after the date hereof (i) obtain any rights to any additional Patent Collateral or (ii) become entitled to the benefit of any additional Patent Collateral or any renewal or extension thereof, including any reissue, division, continuation, or continuation-in-part of any Patent Collateral, or any improvement on any Patent Collateral, the provisions hereof shall automatically apply thereto and any such item enumerated in the preceding clause (i) or (ii) shall automatically constitute Patent Collateral as if such would have constituted Patent Collateral at the time of execution hereof and be subject to the lien and security interest created by this Patent Security Agreement without further action by any party. Grantor shall promptly provide to the Lender written notice of any of the foregoing and confirm the attachment of the lien and security interest created by this Patent Security Agreement to any rights described in clauses (i) and (ii) above by execution of an instrument in form reasonably acceptable to the Lender and the filing of any instruments or statements as shall be reasonably necessary to create, preserve, protect or perfect the Lender’s security interest in such Patent Collateral. Further, the Grantor authorizes the Lender to modify this Patent Security Agreement by amending Schedule 1 to include any Patent Collateral of such Grantor acquired or arising after the date hereof.

Section 4. Loan Agreement. The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to the Lender pursuant to the Loan Agreement, and Grantor and Lender hereby acknowledges and agrees that the rights and remedies of the Lender with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Loan Agreement. In the event of a conflict between the provisions of this Patent Security Agreement and the provisions of the Loan Agreement, the Loan Agreement shall control.

Section 5. Counterparts. This Patent Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 6. Governing Law. This Patent Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware.

Section 7. Security for Obligations. The grant of a security interest in the Patent Collateral by Grantor under this Patent Security Agreement secures the payment of all Obligations of Grantor now or hereafter existing under or in respect of the Loan Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise. Without limiting the generality of the foregoing, this Patent Security Agreement secures, as to Grantor, the payment of all amounts that constitute part of the secured Obligations and that would be owed by Grantor to Lender under the Loan Documents but for the fact that such secured Obligations are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving a Loan Party. This Patent Security Agreement shall terminate and the lien on and security interest in the Patent Collateral shall be released upon the indefeasible payment in full in cash of the Obligations and the termination of the Loan Agreement, as more fully set forth in Section 11.1 of the Loan Agreement.

Section 8. Recordation. This Patent Security Agreement has been executed and delivered to the Lender by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office, the European Patent Office, and other foreign intellectual property offices as desired by the Lender. Grantor authorizes and requests that the Commissioner for Patents record this Patent Security Agreement.

Section 9. Severability. In case any one or more of the provisions contained in this Patent Security Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Loan Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Signature Page Follows]

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IN WITNESS WHEREOF. Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

GRANTOR:
MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer

Signature Page to Patent Security Agreement

LENDER:
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Financial Officer

Signature Page to Patent Security Agreement 

EX-10.15

Exhibit 10.15

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, the “Trademark Security Agreement”), dated as of September 1, 2021, is made by MELT PHARMACEUTICALS, INC., a Delaware corporation (the “Grantor”) in favor of HARROW HEALTH, INC., a Delaware corporation (“Lender”).

W I T N E S S E T H:

WHEREAS, Grantor and Lender have entered into that certain Loan and Security Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, as a condition to the extension of credit by the Lender to the Grantor under the Loan Agreement, Grantor has agreed to grant to the Lender a security interest in, and lien on, all of the Trademark Collateral (defined below); and

WHEREAS, pursuant to the Loan Agreement, Grantor is required to execute and deliver this Trademark Security Agreement to the Lender for purposes of recording such security interest with the United States Patent and Trademark Office;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor hereby agrees as follows:

Section 1. Defined Terms. Capitalized terms used herein without definition are used as defined in the Loan Agreement.

Section 2. Grant of Security Interest in Trademark Collateral. Grantor, as security for the payment and performance, as the case may be, in full of the Obligations of Grantor, hereby assigns and pledges to the Lender, its successors and permitted assigns, a lien on and security interest in all of its right, title and interest in or to any and all of the following Collateral of Grantor (the “Trademark Collateral”):

(a) all of its trademark registrations and applications, including, without limitation, those listed on Schedule 1 hereto;

(b) all renewals and extensions of the foregoing;

(c) all goodwill of the business connected with the use of, and symbolized by, each such trademark;

(d) all rights of any kind whatsoever of Grantor accruing under any of the foregoing provided by applicable law of any jurisdiction, by international treaties and conventions, and otherwise throughout the world; and

(e) all income, fees, royalties, damages, proceeds and liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.

Notwithstanding the foregoing, no grant of any lien or security interest shall be deemed granted hereunder on or in any “intent to use” trademark application until such time, if any, as a Statement of Use or Amendment to Allege Use, as applicable, has been filed with and accepted by the United States Patent and Trademark Office, at which time such trademark application shall automatically become part of the Trademark Collateral unless it is otherwise excluded from the Collateral pursuant to the terms of the Loan Agreement.

Section 3. After-Acquired Property. If the Grantor shall at any time after the date hereof (i) obtain any rights to any additional Trademark Collateral or (ii) become entitled to the benefit of any additional Trademark Collateral or any renewal or extension thereof, or any improvement on any Trademark Collateral, the provisions hereof shall automatically apply thereto and any such item enumerated in the preceding clause (i) or (ii) shall automatically constitute Trademark Collateral as if such would have constituted Trademark Collateral at the time of execution hereof and be subject to the lien and security interest created by this Trademark Security Agreement without further action by any party. Grantor shall promptly provide to the Lender written notice of any of the foregoing and confirm the attachment of the lien and security interest created by this Trademark Security Agreement to any rights described in clauses (i) and (ii) above by execution of an instrument in form reasonably acceptable to the Lender and the filing of any instruments or statements as shall be reasonably necessary to create, preserve, protect or perfect the Lender’s security interest in such Trademark Collateral. Further, the Grantor authorizes the Lender to modify this Trademark Security Agreement by amending Schedule 1 to include any Trademark Collateral of such Grantor acquired or arising after the date hereof.

Section 4. Loan Agreement. The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Lender pursuant to the Loan Agreement, and Grantor and Lender hereby acknowledges and agrees that the rights and remedies of the Lender with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Loan Agreement. In the event of a conflict between the provisions of this Trademark Security Agreement and the provisions of the Loan Agreement, the Loan Agreement shall control.

Section 5. Counterparts. This Trademark Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 6. Governing Law. This Trademark Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware.

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Section 7. Security for Obligations. The grant of a security interest in the Trademark Collateral by Grantor under this Trademark Security Agreement secures the payment of all Obligations of Grantor now or hereafter existing under or in respect of the Loan Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise. Without limiting the generality of the foregoing, this Trademark Security Agreement secures, as to Grantor, the payment of all amounts that constitute part of the secured Obligations and that would be owed by Grantor to Lender under the Loan Documents but for the fact that such secured Obligations are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving a Loan Party. This Trademark Security Agreement shall terminate and the lien on and security interest in the Trademark Collateral shall be released upon the indefeasible payment in full in cash of the Obligations and the termination of the Loan Agreement, as more fully set forth in Section 11.1 of the Loan Agreement.

Section 8. Recordation. This Trademark Security Agreement has been executed and delivered to the Lender by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office, the European Union Intellectual Property Office, and other foreign intellectual property offices as desired by the Lender. Grantor authorizes and requests that the Commissioner for Trademarks record this Trademark Security Agreement.

Section 9. Severability. In case any one or more of the provisions contained in this Trademark Security Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Loan Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

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IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

GRANTOR:
MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer
LENDER:
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Financial Officer

Signature Page to Trademark Security Agreement

EX-10.16

Exhibit 10.16

RIGHT OF FIRST REFUSAL AGREEMENT

THIS RIGHT OF FIRST REFUSAL AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, the “ROFR Agreement”), dated as of September 1, 2021 (the “Effective Date”), is entered into by and between MELT PHARMACEUTICALS, INC., a Delaware corporation (“Melt”), and HARROW HEALTH, INC., a Delaware corporation (“Harrow”).

W I T N E S S E T H:

WHEREAS, Melt and Harrow have entered into that certain Loan and Security Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, as a condition to the extension of credit by Harrow to Melt under the Loan Agreement, Melt has agreed to grant to Harrow a right of first refusal to match any offer received by Melt associated with the commercial rights to Melt’s drug candidates; and

WHEREAS, Melt wishes to enter into this ROFR Agreement to grant such rights to Harrow and Harrow wishes to enter into this ROFR Agreement to accept such rights, all on the terms and conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1. Information about Drug Candidates. During the ROFR Period (as defined below), Melt shall provide to Harrow, on a confidential basis, information about drug candidates of Melt as may reasonably be requested by Harrow. At Harrow’s option, Melt shall provide, on a confidential basis, an update on its development activities and plans to Harrow on at least a semi-annual basis. Lender agrees to maintain in accordance with its customary procedures for maintaining confidential information the confidentiality of the information provided by Melt pursuant to this Section 1.

Section 2. Right of First Refusal. During the period beginning on the Effective Date and ending on the five (5) year anniversary of the Effective Date (the “ROFR Period”), Melt shall not, directly or indirectly through an affiliate, enter into any agreement or consummate any transaction relating to the commercialization of any drug candidate of Melt with anyone other than Harrow, including, without limitation, any activities undertaken in support of, or for, the promotion, marketing, sale and/or distribution of any one or more drug candidates (a “Third-Party Transaction”) except in compliance with the terms and conditions of this ROFR Agreement.

(a) If, at any time during the ROFR Period, Melt receives a bona fide written offer for a Third-Party Transaction that Melt desires to accept (each, a “Third-Party Offer”), Melt shall promptly (and no later than three (3) business days following receipt of the Third-Party Offer) notify Harrow in writing (the “Offer Notice”) of the identity of all proposed parties to such Third-Party Transaction and the material financial and other terms and conditions of such Third-Party Offer (the “Material Terms”). Melt shall also provide Harrow with such additional information about the drug candidate that is the subject of such Third-Party Offer as Harrow shall reasonably request. Each Offer Notice constitutes an offer made by Melt to enter into an agreement with Harrow on the same Material Terms of such Third-Party Offer (the “ROFR Offer”).

(b) At any time prior to the expiration of the ninety (90) day period following Harrow’s receipt of the Offer Notice (the “Exercise Period”), Harrow may accept the ROFR Offer by delivery to Melt of a written notice of acceptance executed by Harrow; provided, however, that Harrow is not required to accept any non-financial terms or conditions contained in any Material Terms that cannot be fulfilled by Harrow as readily as by any other Person (e.g., an agreement conditioned upon the services of a particular individual or the supply of a product exclusively under the control of such third-party offeror).

(c) If, by the expiration of the Exercise Period, Harrow has not accepted the ROFR Offer, and provided that Melt has complied with all of the provisions of this ROFR Agreement, at any time ninety (90) day period following the expiration of the Exercise Period, Melt may consummate the Third-Party Transaction with the counterparty identified in the applicable Offer Notice on Material Terms that are the same or more favorable to Melt as the Material Terms set forth in the Offer Notice. If such Third-Party Transaction is not consummated within such ninety (90) day period, the terms and conditions of this ROFR Agreement will again apply and Melt shall not enter into any Third-Party Transaction during the ROFR Period without affording Harrow the right of first refusal on the terms and conditions of this ROFR Agreement.

(d) For the avoidance of doubt, the terms and conditions of this ROFR Agreement apply to each Third-Party Offer received by Melt during the ROFR Period.

Section 3. Acknowledgement re: Loan. The parties hereto acknowledge and agree that this ROFR Agreement and the terms hereof will not be affected by any payment or prepayment of the loan represented by the Loan Agreement, or any modification or termination of the Loan Agreement, and shall remain in full force and effect for the ROFR Period as set forth herein.

Section 4. Counterparts. This ROFR Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 5. Governing Law. This ROFR Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware.

Section 6. Assignment. Melt shall not assign any of its rights nor delegate any of its duties under this ROFR Agreement without the prior written consent of Harrow.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this ROFR Agreement to be executed and delivered by their duly authorized officers as of the date first set forth above.

MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Executive Officer

Signature Page to Right of First Refusal

EX-10.17

Exhibit 10.17

MANAGEMENT SERVICES AGREEMENT

THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”), effective as of February 1, 2019 (the “Effective Date”), is made by and between Melt Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and Harrow Health, Inc., a Delaware corporation (the “Manager”).

WHEREAS, the Company is in need of certain services in order to operate prior to retaining the services of its own employees and third-party consultants.

WHEREAS, the Company wishes to retain the Manager to provide certain services to the Company, and the Manager is willing to provide such services on the terms set forth below.

NOW, THEREFORE, in consideration of the premises and the respective mutual agreements, covenants, representations and warranties contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Appointment of Manager. The Company appoints the Manager and the Manager accepts appointment on the terms and conditions provided in this Agreement as advisor to the Company. The parties expressly acknowledge that Manager is an affiliate of and equity holder in the Company.

2. Board of Directors Supervision. The activities of the Manager to be performed under this Agreement shall be subject to the supervision of the Board of Directors of the Company (the “Board”) or the Company’s Chief Executive Officer and subject to reasonable policies not inconsistent with the terms of this Agreement adopted by the Board and in effect from time to time. Where not required by applicable law or regulation, the Manager shall not require the prior approval of the Board to perform its duties under this Agreement.

3. Services of the Manager. Subject to any limitations imposed by applicable law or regulation, the Manager, by and through itself and/or such Manager’s successors, assigns, affiliates, officers, employees and/or representatives and third parties, shall render or cause to be rendered general business services to the Company as requested from time to time by the Company and agreed to by the Manager, which services may include certain payroll and benefits related activities, web services, accounting, intellectual property advisement and other related services (the “Services”). The Manager shall provide and devote to the performance of this Agreement such employees, affiliates and agents of the Manager as the Manager shall deem appropriate to the furnishing of the Services hereunder. The Manager will devote such time and efforts to the performance of the Services contemplated hereby as the Manager deems reasonably necessary or appropriate; provided, however, no minimum number of hours is required to be devoted by the Manager on a weekly, monthly, annual or other basis. Company acknowledges that the Manager’s Services are not exclusive to the Company or their respective subsidiaries and that the Manager may render similar Services to other persons and entities. The parties understand that the Company may at times engage one or more advisers to provide Services in addition to Services provided by the Manager under this Agreement.

4. Independent Contractor. The Manager shall be an independent contractor, and nothing in this Agreement shall be deemed or construed to (i) create a partnership or joint venture between the Company and the Manager, (ii) cause the Manager to be responsible in any way for the debts, liabilities or obligations of the Company or any other party, or (iii) cause the Manager or any of their employees, partners or members to be officers, employees or agents of the Company.

5. Expenses. The Company shall pay to the Manager on demand all Reimbursable Expenses whether incurred prior to or following the date of this Agreement. As used herein, “Reimbursable Expenses” means (i) all out-of-pocket expenses incurred relating to the Services provided by the Manager to the Company from time to time (including, without limitation, all travel related expenses), (ii) all out-of-pocket legal expenses incurred by Manager or its affiliates in connection with the enforcement of rights or taking of actions under this Agreement or any related documents or instruments, and (iii) all expenses incurred by the Manager or its affiliates on behalf of the Company, including in connection with its management and operations, whether incurred prior to or following the date of this Agreement.

6. Compensation of Manager. In consideration of the Services to be rendered, the Company will pay to the Manager a monthly fee of Ten Thousand Dollars ($9,900) (the “Consulting Fee”), payable on the 1^st business day of each calendar month. If any restrictions prohibit the payment of any installment of the Consulting Fee, such Consulting Fee installment shall accrue and the Company shall make such installment payment as soon as it is permitted to do so under such restrictions. If the Company acquires or enters into any additional business operations after the date of this Agreement, the Company and the Manager will, prior to the acquisition or prior to entering into the business operations, in good faith, determine whether and to what extent the Consulting Fee should be increased as a result thereof. Any increase will be evidenced by a written supplement to this Agreement signed by each of the Company and the Manager.

7. Term. This Agreement shall commence on the Effective Date and shall remain in effect until terminated pursuant to this Section. Either party shall have the right to terminate this Agreement at any time for any reason upon ten (10) days written notice. No termination of this Agreement, whether pursuant to this Section or otherwise, shall affect the Company’s obligations with respect to the fees, costs and expenses incurred by the Manager in rendering Services hereunder and not reimbursed by the Company as of the effective date of such termination. In addition, the provisions of Sections 8, 9, 15, 16 and 20 shall survive the termination of this Agreement and remain binding and in effect.

8. Liability. The Manager (including any person or entity acting for or on behalf of the Manager) shall not be liable for any mistakes of fact, errors of judgment, or losses sustained by the Company or for any acts or omissions of any kind (including acts or omissions of the Manager), except to the extent caused by intentional misconduct of the Manager as finally determined by a court of competent jurisdiction. In no event will Manager (including any person or entity acting for or on behalf of the Manager) be liable to the Company or any of their affiliates for any indirect, special, incidental or consequential damages, including, without limitation, lost profits or savings, whether or not such damages are foreseeable, or for any third party claims (whether based in contract, tort or otherwise), relating to, in connection with or arising out of this Agreement, before or after termination of this Agreement, including without limitation the services to be provided by the Manager hereunder, or for any act or omission that does not constitute intentional misconduct of the Manager or in excess of the fees received by the Manager hereunder.

9. Indemnification of Manager. The Company hereby agrees to indemnify and hold harmless the Manager and its present and future officers, directors, affiliates, attorneys, employees and agents (“Indemnified Parties”) from and against all third party losses, claims, liabilities, suits, costs, damages and expenses (including attorneys’ fees) (collectively, “Claims”) arising from their performance of Services hereunder, except to the extent any Claims arise from the an Indemnified Party’s intentional misconduct. The Company further agrees to reimburse the Indemnified Parties for any cost of defending any such action or investigation (including attorneys’ fees and expenses), subject to an undertaking from such Indemnified Party to repay the Company if such party is determined not to be entitled to such indemnity.

10. Assignment. Without the consent of the Manager, the Company shall not assign, transfer or convey any of its rights, duties or interest under this Agreement, nor shall it delegate any of its obligations or duties hereunder. The Manager shall not assign, transfer or convey any of its rights, duties or interest under this Agreement, nor shall it delegate any of its obligations or duties under this Agreement, except that the Manager may transfer its rights and delegate its obligations hereunder to its affiliates.

11. Notices. Any notice or other communication required or permitted to be made or given under this Agreement to either party shall be in writing and shall be sufficiently given if (i) hand delivered, (ii) sent by overnight guaranteed delivery service, such as Federal Express or UPS; or (iii) sent by facsimile transmission or electronic mail during addressee’s normal business hours, with a duplicate copy sent by overnight delivery or certified or registered mail (except for any notice of termination which must be sent by method (i) or (ii)), addressed as follows:

If to the Company:	Melt Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, CA 92130
	Attn: Greg Madison
If to the Manager:	Harrow Health, Inc.
	12264 El Camino Real, Suite 350
	San Diego, CA 92130
	Attn: Mark L. Baum

or to such other address or addressee as either party may from time to time designate to the other by written notice. Any such notice or other communication shall be deemed to be given as of the date it is received by the addressee.

12. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or unenforceable provision had never been contained herein.

13. No Waiver. The failure by any party to exercise any right, remedy or elections herein contained or permitted by law shall not constitute or be construed as a waiver or relinquishment for the future exercise of such right, remedy or election, but the same shall continue and remain in full force and effect. All rights and remedies that any party may have at law, in equity or otherwise upon breach of any term or condition of this Agreement, shall be distinct, separate and cumulative rights and remedies and no one of them, whether exercised or not, shall be deemed to be in exclusion of any other right or remedy.

14. Advice of Counsel. Each party acknowledges that, in executing this Agreement, such party has had the opportunity to seek the advice of independent legal counsel, and has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation hereof.

15. Governing Law. The subject matter of this Agreement shall be governed by and construed in accordance with the laws of the State of California (without reference to its choice of law principles), and to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted. EACH PARTY HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN SAN DIEGO COUNTY, CALIFORNIA FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO TRIABLE.

16. Attorneys’ Fees. Should any party hereto employ an attorney for the purpose of enforcing or constituting this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees and all reasonable costs, including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees, and the cost of any bonds, whether taxable or not, and that such reimbursement shall be included in any judgment or final order issued in that proceeding. The “prevailing party” means the party determined by the court to most nearly prevail and not necessarily the one in whose favor a judgment is rendered.

17. Entire Agreement; Amendment. This Agreement embodies the entire agreement between the parties and supersedes any prior representations, communications, understandings and agreements between the parties regarding the subject matter hereof. There are no representations, communications, understandings or agreements, oral or written, between the parties regarding the subject matter hereof that are not fully expressed herein. No term or section of this Agreement may be charged, waived, discharged, amended or modified orally or in any manner other than in writing executed by both of the parties hereto.

18. Execution of the Agreement. Each party executing this Agreement has the requisite corporate power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder. All corporate proceedings have been taken and all corporate authorizations and approvals have been secured which are necessary to authorize the execution, delivery and performance by each party of this Agreement. This Agreement has been duly and validly executed and delivered by each party and constitutes a valid and binding obligation, enforceable in accordance with the respective terms herein. Upon delivery of this Agreement, this Agreement, and the other agreements and exhibits referred to herein, will constitute the valid and binding obligations of each party, and will be enforceable in accordance with their respective terms.

19. Successors. This Agreement and all the obligations and benefits hereunder shall inure to the successors and permitted assigns of the parties.

20. Confidentiality. The Company may not disclose the terms of this Agreement except as may be required by applicable law or the rules of any exchange on which the Company’s or its affiliates’ securities are traded.

21. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all such counterparts taken together shall constitute one and the same Agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or electronic delivery in PDF format shall be as effective as delivery of a manually executed counterpart of this Agreement and shall be sufficient to bind the parties to the terms and conditions of this Agreement.

***SIGNATURE PAGE FOLLOWS***

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have caused this Management Services Agreement to be executed and delivered as of the date first above written.

COMPANY		MANAGER
Melt Pharmaceuticals, Inc.		Harrow Health, Inc.
/s/ Greg Madison		/s/ Mark. L. Baum
By:	Greg Madison	By:	Mark L. Baum
Its:	Chief Executive Officer	Its:	Chief Executive Officer
Date:	2/1/19	Date:	2/1/19

EX-10.18

Exhibit 10.18

ROYALTY AGREEMENT

THIS ROYALTY AGREEMENT (this “Agreement”) dated as of the last date provided on the signature page (the “Effective Date”), is entered into between MELT PHARMACEUTICALS, INC., a Delaware corporation (“Melt”), with a place of business at 12264 El Camino Real, Suite 350, San Diego, California 92130, and OHSO, LLC (“OHSO”), a South Dakota limited liability company, with a place of business at 3101 W. 57th Street, Sioux Falls, South Dakota 57108.

WHEREAS, OHSO and Harrow Health, Inc. (“Harrow”), formerly known as Imprimis Pharmaceuticals, Inc., entered into the Amended and Restated Asset Purchase Agreement (the “OHSO APA”) on or around the Effective Date;

WHEREAS, Melt and Harrow entered into the Asset Purchase Agreement (the “Melt APA”) on or around December 11, 2018; and

WHEREAS, the parties are entering into this Agreement in connection with the OHSO APA and the Melt APA.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Definitions. For the purposes of this Agreement, the below terms shall have the respective meanings set forth below and grammatical variations of such terms shall have corresponding meanings. Capitalized terms used but not defined herein shall have their respective meanings set forth in the OHSO APA.

1.1 “First Commercial Sale” means, with respect to any Product, the first sale of such Product by Melt, its Licensees, or its and their respective Affiliates after all applicable marketing and pricing approvals (if any) have been granted by the applicable governing health authority.

1.2 “Licensee” means a Third Party (other than Harrow) to whom Melt or its Affiliate has granted a license, immunity or other right under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize one or more Products, provided such license has not expired or been terminated.

1.3 “Net Licensing Revenues” means, with respect to any Product, the aggregate cash consideration or the cash value of any in kind remuneration received by Melt or its Affiliates in consideration for the grant by Melt or its Affiliates to a Licensee of a license, immunity or other right to offer to sell, sell or otherwise commercialize such Product (excluding amounts (a) received to reimburse Melt or its Affiliates for research, development or similar services conducted for such Product, in reimbursement of patent or other out of pocket expenses relating to such Product, (b) calculated on the sales price of such Product, or (c) in consideration for the purchase of any debt or securities of Melt or its Affiliates).

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1.4 “Net Receipts” means, with respect to any Product, the aggregate of the Net Sales thereof and Net Licensing Revenues therefrom.

1.5 “Net Sales” means, with respect to any Product, the gross sales price for such Product invoiced by Melt, its Licensees, or its or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users of such Product) less: (a) commercially reasonable credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers; (b) freight and insurance costs in transporting such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by such customers; (c) commercially reasonable cash, quantity and trade discounts, rebates and other price reductions for such Product; (d) sales, use, value-added and other direct taxes assessed or imposed on the sale or license of such Product and paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by such customers; (e) customs duties, tariffs, surcharges and other governmental charges incurred in exporting or importing such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed by customers; and (f) an allowance for uncollectible or bad debts determined in accordance with GAAP. If Melt, its Licensees, or its or their respective Affiliates sell or license any Product to an Affiliate end user at a price that reflects a credit, allowance, discount or rebate that is greater than the same offered to otherwise similarly situated customers, the amount of the credit, allowance, discount or rebate shall not be subtracted from the gross sales price. Net Sales shall not include the gross sales price of such Product invoiced as the result of prescriptions written for the Product or purchases made of the Product by the investors in OHSO or by Affiliates of investors in OHSO.

1.6 “Payment Period” means, on a Product-by-Product and country-by-country basis, the period of time beginning on the Payment Period Start Date and continuing for the longer of (a) the term for which a Valid Claim in such country remains in effect and would be infringed by the use of such Product in such country, and (b) twenty (20) years following the date of the First Commercial Sale of such Product in such country.

1.7 “Payment Period Start Date” means, on a Product-by-Product and country-by-country basis, (a) if the First Commercial Sale of such Product in such country has occurred on or before April 1, 2019, then April 1, 2019, or (b) if the First Commercial Sale of such Product in such country occurs after April 1, 2019, then the date of the First Commercial Sale of such Product in such country.

1.8 “Third Party” means any Person other than OHSO, Melt or their respective Affiliates.

1.9 “Valid Claim” means either (a) a claim of an issued and unexpired patent included within the Assigned Patent Rights, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Assigned Patent Rights, which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application.

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2. Financial Terms.

2.1 Net Receipts Payments.

2.1.1 Net Receipts Payment Consideration. Subject to the provisions in this Section 2.1, on a Product-by-Product and country-by-country basis, Melt shall pay to OHSO, on a quarterly basis, three percent (3%) of Net Receipts during the applicable Payment Period (the “Net Receipts Payment Consideration”); provided, however, if, the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim, then the applicable Net Receipts Payment Consideration with respect to such Product in such country shall be reduced by one-half (½).

2.1.2 Third Party Royalties. If Melt, its Licensees, or its or their respective Affiliates is required to pay royalties to any Third Party (except Harrow) in order to make, have made, use, sell, offer to sale or import any Product, then Melt shall have the right to credit fifty percent (50%) of such Third Party royalty payments against the Net Receipts Payment Consideration owing to OHSO under Section 2.1.1 with respect to sales of such Product; provided, however, that Melt shall not reduce the amount of the Net Receipts Payment Consideration with respect to sales of such Product for any period to less than (i) one and nine-tenths of one percent (1.9%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would infringe a Valid Claim, or (ii) ninety-five hundredths of one percent (.95%) of Net Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim.

2.1.3 Combination/Bundled Products. In the event that a Product is sold by Melt, its Licensees, or its or their respective Affiliates in combination with one or more products which is itself not a Product, then Net Sales shall be calculated by multiplying the sales price of such combination sale by the fraction A/(A+B) where A is the fair market value of the Product(s) and B is the fair market value of the other product(s) in the combination sale, each as reasonably determined by Melt.

2.2 Reports and Net Receipts Payments. Within sixty (60) days after the end of each calendar quarter during the applicable Payment Period, Melt shall deliver to OHSO a report setting forth for such calendar quarter (a) the calculation of the applicable Net Receipts Payment Consideration, including without limitation the Net Licensing Revenues and Net Sales of each Product; (b) the payments due under this Agreement for the sale of each Product; and (c) the applicable exchange rate as determined below. Melt shall remit the total payments due for the sale or license of Products during such calendar quarter at the time such report is made. No such reports or payments will be due for any Product before the First Commercial Sale of such Product. With respect to Net Receipts received in United States dollars, all amounts shall be expressed in United States dollars. With respect to Net Receipts received in a currency other than United States dollars, all amounts shall be expressed both in the currency in which the amount is invoiced (or received as applicable) and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter.

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2.3 Payment Provisions.

2.3.1 Payment Terms. The Net Receipts Payment Consideration shown to have accrued by each report provided for under Section 2.2 shall be due on the date such report is due. Payment of Net Receipts Payment Consideration in whole or in part may be made in advance of such due date. Late payments shall incur interest at the rate of one percent (1%) per month from the date such payments were originally due.

2.3.2 Withholding Taxes. Melt shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other taxes, levies or charges with respect to such amounts, other than United States taxes, payable by OHSO, or any taxes required to be withheld by Melt, its Licensees, or its or their respective Affiliates, on behalf of OHSO, to the extent Melt, its Licensees, or its or their respective Affiliates pay to the appropriate governmental authority on behalf of OHSO such taxes, levies or charges. Melt shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of OHSO by Melt, its Licensees, or its or their respective Affiliates. Melt promptly shall deliver to OHSO proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto.

2.4 Audits. Upon the written request of OHSO and not more than once in each calendar year, Melt shall permit an independent certified public accounting firm of nationally recognized standing selected by OHSO and reasonably acceptable to Melt, at OHSO’s expense, to have access during normal business hours to such of the financial records of Melt as may be reasonably necessary to verify the accuracy of the Net Receipts Payment Consideration reports hereunder for the eight (8) calendar quarters immediately prior to the date of such request (other than records for which OHSO has already conducted an audit under this Section). If such accounting firm concludes that additional amounts were owed during the audited period, Melt shall pay such additional amounts within thirty (30) days after the date OHSO delivers to Melt such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by OHSO; provided, however, if the audit discloses that the Net Receipts Payment Consideration payable by Melt for such period are more than one hundred ten percent (110%) of the Net Receipts Payment Consideration actually paid for such period, then Melt shall pay the reasonable fees and expenses charged by such accounting firm. OHSO shall cause its accounting firm to retain all financial information subject to review under this Section 2.4 in strict confidence; provided, however, that Melt shall have the right to require that such accounting firm, prior to conducting such audit, enter into an appropriate non-disclosure agreement with Melt regarding such financial information. The accounting firm shall disclose to OHSO only whether the reports are correct or not and the amount of any discrepancy. No other information shall be shared. OHSO shall treat all such financial information as Melt’s confidential information, and shall not disclose such financial information to any Third Party or use it for any purpose other than as specified in this Section 2.4.

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3. Confidentiality and Publication.

3.1 Confidential Information. During the term of this Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, except as otherwise provided in this Section 3, OHSO shall maintain in confidence all data and information comprising the Assets and each party shall maintain in confidence all non-public information and data of the of other party (the “Confidential Information”), and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis to those directors, officers, employees, (sub)licensees and contractors, to the extent such disclosure is reasonably necessary in connection with performing its obligations or exercising its rights under this Agreement. To the extent that disclosure is authorized by this Agreement, prior to disclosure, the party making the disclosure shall obtain agreement of any such Person to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement. Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the Confidential Information. Notwithstanding anything to the contrary herein, under no circumstance shall either party disclose the protected health information or personally identifiable information of the other party at any time either during or after the termination of this Agreement.

3.2 Terms of this Agreement. Except as otherwise provided in this Section 3, neither party shall disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms of this transaction, and each party may disclose such information, as modified by mutual agreement from time to time, without the other party’s consent.

3.3 Permitted Disclosures. The confidentiality obligations contained in this Section 3 shall not apply to the extent that (a) a party is required (i) in the reasonable opinion of such party’s legal counsel, to disclose information by applicable law, regulation, rule (including rule of a stock exchange or automated quotation system), order of a governmental agency or a court of competent jurisdiction or legal process, including tax authorities, or (ii) to disclose information to any governmental agency for purposes of obtaining approval to test or market a product, provided in either case that, to the extent practicable, such party shall provide written notice thereof to the other party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof; or (b) a party can demonstrate that (i) the information was or became public knowledge, other than as a result of actions of such party in violation hereof; or (ii) the information was disclosed to the recipient on an unrestricted basis from a source unrelated to any party to this Agreement and not under a duty of confidentiality to the other party. Notwithstanding anything to the contrary herein, Melt may disclose the terms and conditions of this Agreement to any Person with whom Melt has, or is proposing to enter into, a business relationship related to the Product, as long as such Person has entered into a confidentiality agreement with Melt.

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3.4 Publication. Melt shall determine the strategy for, and coordinate, the publication and presentation of any disclosures related to the Technology, and OHSO shall not publish or otherwise disclose the Technology, or any data or information relating thereto, without the prior written consent of Melt. If OHSO or any Person on OHSO’s behalf desires to make any such publication or presentation, OHSO shall provide Melt with a copy of any manuscript intended for publication or any presentation intended for public disclosure (including any oral disclosure made with or without obligation of confidentiality) by or on behalf of OHSO that incorporates any information related to the Technology, or any data or information relating thereto, at least sixty (60) days before the submission of any manuscript for publication or the public presentation, for Melt’s review and consideration. Melt shall have the right to approve or reject such publication at its sole discretion. If after review Melt determines that the publishing party may publish or present such publication, Melt shall return to the publishing party the manuscript or presentation with any proposed changes. The publishing party shall incorporate all of Melt’s reasonable proposed changes to the manuscript or presentation prior to publication. Melt may further request that the publishing party postpone the publication or presentation in order to consider appropriate patent applications or other protection to be filed on information contained in the publication or presentation. If Melt requests such postponement, the publishing party shall postpone such publication or presentation as requested by Melt.

3.5 Injunctive Relief. Each party acknowledges that it will be impossible to measure in money the damage to the other party if such party fails to comply with the obligations imposed by this Section 3, and that, in the event of any such failure, the other party may not have an adequate remedy at law or in damages. Accordingly, each party agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, is an appropriate remedy for any such failure and will not oppose the granting of such relief on the basis that the disclosing party has an adequate remedy at law. Each party agrees that it will not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with the other party seeking or obtaining such equitable relief.

4. Miscellaneous.

4.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 4.1 IS INTENDED TO LIMIT OR RESTRICT THE RIGHTS OR LIABILITIES OF EITHER PARTY UNDER SECTION 3.

4.2 Public Announcements. Neither party shall make any public announcements concerning matters concerning this Agreement or the negotiation thereof without the prior written consent of the other party unless such disclosure is required by law, in which case the announcing party shall provide the other party with reasonable notice of such disclosure.

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4.3 Assignment. Neither party shall assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that a party may, without such consent, assign this Agreement and its rights and obligations hereunder (a) to any Affiliate, or (b) in connection with the transfer or sale of all or substantially all of its business to which this Agreement relates, or in the event of its merger, consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment in violation of this Section 4.3 shall be void.

4.4 Severability. Any provision of this Agreement which is illegal, invalid or unenforceable shall be ineffective to the extent of such illegality, invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

4.5 Entire Agreement; Amendment. This Agreement, together with each additional document, instrument or other agreement to be executed and delivered pursuant hereto constitute all of the agreements between the parties with respect to, and supersede all prior agreements and understandings relating to the subject matter of, this Agreement or the transactions contemplated by this Agreement. This Agreement may not be modified or amended except by a written instrument specifically referring to this Agreement signed by the parties hereto.

4.6 Waiver. No waiver by one party of the other party’s obligations, or of any breach or default hereunder by any other party, shall be valid or effective, unless such waiver is set forth in writing and is signed by the party giving such waiver; and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature or any other breach or default by such other party.

4.7 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by a party to the other party shall be in writing, delivered by any lawful means to such other party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this Agreement) shall be effective upon receipt by the addressee.

If to OHSO:	OHSO, LLC
	3101 W. 57th Street
	Sioux Falls, South Dakota 57108
	Attn: John Berdahl

If to Melt:	Melt Pharmaceuticals, Inc.
	12264 El Camino Real, Suite 350
	San Diego, California 92130
	Attention: Greg Madison, Chief Executive Officer

4.8 Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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5. Representations and Warranties. Each party represents and warrants to the other party as follows:

5.1 Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

5.2 Such party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder, and (b) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

5.3 All necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such party in connection with this Agreement have been obtained.

5.4 The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations, and (b) do not conflict with, or constitute a default under, any contractual obligation of it.

5.5 Such party is in compliance with all applicable laws, ordinances, orders, decrees, rules or regulations of any governmental agency or authority, the violation of or noncompliance with which could have a material adverse effect on such party. No unresolved (a) charges of violations of laws or regulations relating to such party’s business have been made or threatened; (b) proceedings or investigations relating to such party’s business are pending or have been threatened; and (c) citations or notices of deficiency have been issued or have been threatened, against such party relating to or arising out of its business by any governmental authorities, which have had or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on such party.

6. Term. The term of this Agreement shall continue until expiration of all payment obligations hereunder.

***SIGNATURE PAGE FOLLOWS***

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SIGNATURE PAGE

IN WITNESS WHEREOF, each party has caused a duly authorized representative to execute and deliver this Agreement as of the date below.

OSHO		MELT
OSHO, LLC		Melt Pharmaceuticals, Inc.
/s/ John Berdahl, M.D		/s/ Greg Madison
By:	John Berdahl, M.D.	By:	Greg Madison
Its:	Secretary and Managing Member	Its:	Chief Executive Officer
Date:	9/20/2019	Date:	10/3/2019

[Signature Page to Royalty Agreement]

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EX-10.19

Exhibit 10.19

102 Woodmont Blvd., Suite 610 Nashville, TN 37205 www.meltpharma.com

June 17, 2021

VIA EMAIL: [***]

Larry Dillaha

Dear Mr. Dillaha,

Welcome to Melt Pharmaceuticals! We are pleased to extend an offer of employment to you as the Chief Executive Officer. Your start date is effective June 21, 2021. Your compensation will be $460,000 annually, less applicable withholdings, paid bi-weekly. This is a full-time, exempt level position. You will also be eligible to participate in our performance incentive plan with your initial target bonus at 50% of your annual salary amount, paid annually. Any such performance incentive plan and related bonus, which shall be voluntary and not guaranteed, shall be based on a review and multi-factorial assessment of the Company’s condition, which may also include Executive’s performance, and shall be conducted by the Company’s Board of Directors.

Melt Pharmaceuticals, Inc. has an excellent benefits program including comprehensive medical, dental and vision plans. You will be eligible to participate in our medical, dental and vision plans effective July 1, 2021. In addition, you will have a 20 day/160 hour personal time off (PTO) account, which accrues bi-weekly. You will become eligible to participate in our 401(k) plan following six months of employment.

You will be granted an option to purchase an additional 250,000 shares of Melt Pharmaceuticals, Inc. common stock. The stock option will be granted to you on the 1^st business day of the month following your effective date of this position. The price per share of any approved option will be determined on this day. All other details of our stock option plan will be explained to you shortly after any stock option is approved. Your entitlement to any stock options that may be approved is, of course, conditioned upon your signing of the Stock Option Agreement and is subject to its terms and the terms of the Melt Incentive Stock and Awards Plan under which the options are granted.

If at any time (1) the Company terminates Executive’s employment without Cause (as defined below and other than as a result of Executive’s death or disability), or (2) Executive resigns employment with the Company for Good Reason (as defined below), and provided in any case such termination or resignation constitutes a “separation from service”, as defined under Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”) (such termination described in (1) or (2), an “Involuntary Termination”), Executive shall be entitled to receive the following severance benefits, subject in all events to Executive’s compliance with Section 10.4 below:

(i) Executive shall receive a severance payment equal to the sum of (1) six (6) months of Executive’s Base Salary in effect on the effective date of Executive’s Involuntary Termination (ignoring any decrease that forms the basis for Executive’s resignation for Good Reason, if applicable) plus (2) the greater of Executive’s (x) Annual Bonus for the calendar year preceding the calendar year in which the Involuntary Termination occurs or (y) target Annual Bonus for the year of Involuntary Termination, which shall be paid in a lump sum on the thirtieth (30th) day following Executive’s Involuntary Termination.

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(ii) Executive may receive an Annual Bonus, consistent with the first paragraph of this Offer of Employment letter, for the year in which the Involuntary Termination occurs, determined based on actual results for such year and pro-rated for the period of time during such year in which Executive provided services to the Company prior to his Involuntary Termination, which shall be paid in a lump sum in accordance with Company practice for payment of the Annual Bonus, which shall in any event be on or before March 15 of the year following the year in which the Involuntary Termination occurs.

(iii) If Executive is eligible for and timely elects to continue Executive’s health insurance coverage under the Company’s group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 or the state equivalent (“COBRA”) following Executive’s Involuntary Termination, the Company will pay the COBRA group health insurance premiums for Executive and Executive’s eligible dependents until the earliest of (A) the end of the six (6)-month period following Executive’s Involuntary Termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by Executive under a Section 125 health care reimbursement plan under the U.S. Internal Revenue Code. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether Executive elects continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month in the six (6)-month period following Executive’s Involuntary Termination, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Health Care Benefit Payment”). The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the six (6)-month period following Executive’s Involuntary Termination or (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

Please let us know of your decision to join Melt Pharmaceuticals, Inc.by signing this offer letter and returning it to us no later than June 18, 2021 at 5:00 pm EST. This letter sets forth our entire agreement and understanding regarding the terms of your employment with Melt Pharmaceuticals, Inc. and supersedes all prior or contemporaneous agreements, understandings, negotiations or representations, whether oral or written, expressed or implied, on this subject. This letter may not be modified or amended except by a specific, written agreement signed by you and an authorized representative Melt Pharmaceuticals, Inc.

Your offer and employment is contingent upon:

● Signing and abiding by the Company’s Confidentiality Agreement, Arbitration Agreement and the Proprietary Information and Inventions Assignment Agreement;

● Successful completion of a routine background check by an outside agency engaged by Melt Pharmaceuticals, Inc. and its subsidiaries to conduct background and reference checking;

● Successful passage of a drug and alcohol screening test;

● Licensing or certification requirements;

● Acceptance of other company policies and procedures, including, but not limited to, our Employee Manual, Code of Business Conduct and Ethics, and Insider Trading Policy.

Your employment with Melt Pharmaceuticals, Inc. will be “at-will.” This means you may resign at any time and for any reason. Likewise, the company may terminate the employment relationship at any time, with or without cause or advance notice. In addition, Melt Pharmaceuticals, Inc. reserves the right to modify your position, duties and/or reporting relationship to meet business needs and to use its discretion in deciding on appropriate discipline. Any change to the at-will employment relationship must be by a specific, written agreement, signed by you and Melt Pharmaceuticals, Inc.

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You also must establish your identity and authorization to work as required by the Immigration Reform and Control Act of 1986 (IRCA). Enclosed is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate original documentation on your first day of work.

To indicate your acceptance of Melt Pharmaceuticals, Inc. offer of employment, on the terms and conditions set forth in this letter, please sign and date this letter in the space provided below and return it to Laura Sherry, Director of Operations and Finance at 102 Woodmont Blvd., Suite 610, Nashville, TN 37205 or via email to [***].

We hope your employment with Melt Pharmaceuticals, Inc. will prove mutually rewarding.

Sincerely,

/s/ Mark L. Baum

Mark L. Baum

Chairman of the Board of Directors

*          *          *

I have read this agreement in its entirety and agree to the terms and conditions of employment described in these documents. I understand and agree that my employment with Melt Pharmaceuticals, Inc. is at-will. Your employment relationship with Melt Pharmaceuticals, Inc. will be subject to the terms and conditions of this letter.

6/18/2021	/s/ Larry Dillaha
Date	Candidate Name

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EX-10.20

Exhibit 10.20

MELT PHARMACEUTICALS, INC.

12264 El Camino Real, Suite 350

San Diego, CA 92130

September 27, 2018

Greg Madison

[***]

[***]

Re: Employment Terms

Dear Greg:

On behalf of Melt Pharmaceuticals, Inc. (the “Company”), I am pleased to offer you employment in the position of Chief Executive Officer of the Company, on the terms set forth in this offer letter agreement (the “Agreement”).

1. Effectiveness.

(a) Your employment with the Company and all of the terms of this Agreement shall become effective one week following closing of a bona-fide equity financing with third party investors resulting in cash gross proceeds to the Company of at least $10,000,000 within the one-hundred-twenty (120) days following the date listed above (the “Employment Effective Date”). In the event that such closing does not occur within the designed time frame, your employment with the Company and this Agreement shall be null and void ab initio and neither party hereto shall have any liability or obligation hereunder.

(b) Prior to the Employment Effective Date, you will provide part-time consulting services to help secure a financing transaction meeting the criteria above, as requested by the Company from time to time (the “Consulting Services”).

(i) As compensation for your Consulting Services:

(A) the Company shall, subject to your execution below and commencement of Consulting Services, grant you a restricted stock award covering 632,500 shares of the Company’s common stock (the “Stock Award”). The Stock Award shall vest 25% on the one year anniversary of its grant date and in equal quarterly installments thereafter ending on the four year anniversary of its grant date, subject to your continued service to the Company (which shall include your consulting and employment services) and vesting acceleration as set forth in Section 9(b) below. The Stock Award is subject to approval by the Company’s Board of Directors (the “Board”) and the terms of a Restricted Stock Award Grant Notice and Agreement that will be provided to you by the Company. You understand that the grant of the Stock Award will trigger taxable income to you, and you agree to timely file a Section 83(b) election with the Internal Revenue Service and provide documentation of such election to the Company; and

(B) upon the occurrence of the Employment Effective Date and provided that you continue to provide Consulting Services pursuant to this Agreement through such date, you shall be paid a one-time lump sum cash payment of $100,000, less required payroll deductions and tax withholdings, to be paid within thirty (30) days following the Employment Effective Date.

(ii) Either you or the Company may terminate the Consulting Services at any time upon advance written notice to the other party. Your legitimate and documented business expenses incurred in performing the Consulting Services will be reimbursed by the Company as provided under its business expense reimbursement policies. You understand that you shall not be an employee of the Company prior to the Employment Effective Date, and shall not be entitled to any compensation or benefits for performing the Consulting Services other than as set forth in this Section 1(b).

2. Employment Position; Duties. Upon the Employment Effective Date, you will be employed in the position of Chief Executive Officer of the Company. In this position, you will report to the Board, and you will have those duties and responsibilities as customary for this position and as may be directed by the Board. Your commencement of employment shall begin on or around the Employment Effective Date (such actual date, the “Employment Start Date”), Your work duties may include work for, or on behalf of, Affiliates of the Company (as defined below). You will primarily work from your current location in Milton, Massachusetts, although you understand that reasonable travel shall be required in the performance of your position with the Company. During your employment, you will devote your full-time best efforts to the business of the Company and its Affiliates.

3. Employee Base Salary; Employee Benefits and Business Expenses.

(a) Base Salary. Your base salary will be paid at the annual rate of $460,000, less required payroll deductions and tax withholdings, paid on the Company’s normal payroll schedule (which shall initially be bi-weekly). As an exempt salaried employee, you will be required to work the Company’s normal business hours, and such additional time as appropriate for your work assignments and position. You will not be eligible for extra payment under the overtime laws. Your base salary may otherwise be adjusted from time to time at the Company’s discretion. Within six (6) months following the closing of the Company’s first firm-commitment underwritten public offering of its equity securities pursuant to a registration statement filed with the Securities and Exchange Commission (“IPO”), the Board or the Compensation Committee of the Board (the “Compensation Committee”) will review your base salary against market practices of public peer companies, with the assistance of an outside compensation consultant, and shall increase your base salary, if necessary, according to such market practices, as determined appropriate by the Board or the Compensation Committee in its discretion.

(b) Employee Benefits. As a regular full-time employee, you will be eligible to participate in the Company’s standard employee benefits (pursuant to the terms and conditions of the benefit plans and applicable policies), as they may be terminated or changed from time to time within the Company’s discretion.

(c) Business Expenses. Your legitimate and documented business expenses will be reimbursed by the Company as provided under its business expense reimbursement policies.

4. Annual Performance Bonus. Beginning January 1, 2019, in addition to base salary, you will be eligible to earn discretionary incentive compensation at a total annual target amount of sixty percent (60%) of your base salary in effect during the bonus year (“Performance Bonus”), based on the achievement of corporate and individual performance targets to be mutually established by you and the Board or the Compensation Committee thereof. The Performance Bonus, if earned, will be paid on an annual basis, less required payroll deductions and tax withholdings, after the close of the fiscal year and after determination by the Board (or the Compensation Committee thereof) of the level of achievement of the applicable performance targets and metrics and the level of the Performance Bonus amount (if any). In no event will the Performance Bonus, if any, be paid later than March 15 of the year following the year to which the Performance Bonus relates. No Performance Bonus amount is guaranteed and, in addition to the other conditions for earning such Performance Bonus, you must remain an employee in good standing of the Company at the close of the Performance Bonus fiscal year in order to earn any Performance Bonus.

5. Equity Awards. In addition to the Stock Award, you will be eligible to receive additional equity award grants under the Company’s equity incentive plans from time to time in the discretion of the Board or its Compensation Committee, and in accordance with the terms and conditions of such plans.

6. Compliance With Proprietary Information Agreement and Company Policies. As a condition of employment, you shall sign and comply with the Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement (the “Confidential Information Agreement”) which will be provided to you by the Company under separate cover. In addition, you are required to abide by the Company’s policies and procedures, as may be modified from time to time within the Company’s discretion.

7. Protection of Third Party Information and Outside Activities.

(a) Third Party Information. In your work for the Company or its Affiliates (including the Consulting Services), you will be expected not to make any unauthorized use or disclosure of any confidential information or materials, including trade secrets, of any former employer or other third party; and not to violate any lawful agreement that you may have with any third party. By signing this Agreement, you represent that you are able to perform your job duties within these guidelines, and you are not in unauthorized possession or control of any confidential documents, information, or other property of any former employer or third party. In addition, you represent that your employment hereunder will not represent a violation of any agreement you may have with any third party (e.g., a former employer) which may limit your ability to perform your duties to the Company or its Affiliates, or which could present a conflict of interest with the Company or its Affiliates, including but not limited to disclosure (and a copy) of any contractual restrictions on solicitations or competitive activities, and are not bound by any such restrictions which would restrict or prevent you from performing the Consulting Services or accepting employment with the Company.

(b) Outside Activities. During your employment with the Company, you may engage in civic and not-for-profit activities, act as a trustee for estate planning purposes and engage in, and manage, personal investments, so long as such activities do not interfere with the performance of your duties hereunder or present a conflict of interest with the Company or its Affiliates. Subject to the restrictions set forth herein, and only with prior written disclosure to and consent of the Board, you may engage in other types of business or public activities. Your service on any board of directors (or similar) of an outside entity or organization shall be subject to prior written approval of the Board, except for your board service to the American Kidney Fund, which the Board hereby acknowledges and approves. The Board may rescind approval of outside services, if the Board determines, in its sole discretion, that such activities compromise or threaten to compromise the Company’s or its Affiliates’ business interests or conflict with your duties to the Company or its Affiliates.

8. At-Will Employment Relationship. Your employment relationship with the Company is at-will. Accordingly, you may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company, and the Company may terminate your employment at any time with or without Cause or prior notice. In addition, subject to your right to resign for “Good Reason” as described in Section 9(d)(vi) below, the Company retains the discretion to modify your other employment terms from time to time, including but not limited to your position, duties, authority, reporting relationship, work location, compensation, and benefits.

9. Severance Benefits.

(a) Severance Benefits for Covered Termination. If (A) your employment is terminated due to (1) a termination by the Company without Cause (other than as a result of your death or Disability) or (2) your resignation for Good Reason (collectively, a “Covered Termination”), (B) you satisfy the Release Requirement and (C) you continue to abide by the terms of your Confidential Information Agreement, then you will receive the “Severance Benefits” as set forth in this Section 9(a) as your sole severance benefits, and you will not be eligible for severance benefits under any other policy, plan or agreement except to the extent required by law. Specifically, you will receive:

(i) Base Severance Payments. Severance pay in the form of continuation of your base salary at the time of your Covered Termination (but ignoring any decrease that forms the basis of your resignation for Good Reason, if applicable) for a period of twelve (12) months, subject to required payroll deductions and tax withholdings (the “Base Severance Payments”). Subject to Section 10, the Severance Payments shall be made on the Company’s regular payroll schedule in effect following your termination date, provided, however, that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead accrue and be made on the first regular payroll date following the Release Effective Date; and

(ii) Bonus Severance Payment. A lump sum cash amount equivalent to your Performance Bonus for the year in which the termination date occurs, prorated based on the number of days that you were employed during such performance year, divided by the total number of days in such performance year (the “Bonus Severance Payment”). Your base salary as in effect on the termination date, ignoring any decrease that forms the basis of your resignation for Good Reason, if applicable, shall be used for calculating the Bonus Severance Payment. The Bonus Severance Payment will be paid in a lump sum cash payment within sixty (60) days of the Release Effective Date, but in no event later than March 15 of the year following the year in which your Covered Termination occurs; and

(iii) Health Care Continuation Coverage Payments.

(A) COBRA Premiums. If you timely elect continued coverage under COBRA, the Company will pay your COBRA premiums to continue your coverage (including coverage for your eligible dependents, if applicable) (“COBRA Premiums”) through the period starting on the termination date and ending twelve (12) months after the termination date (the “COBRA Premium Period”); provided, however, that the Company’s provision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period you become eligible for group health insurance coverage through a new employer or you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer’s group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company of such event. For purposes of this Section, references to COBRA premiums shall not include any amounts payable you under a Section 125 health care reimbursement plan under the Internal Revenue Code of 1986, as amended (the “Code”).

(B) Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), regardless of whether you or your dependents elect or are eligible for COBRA coverage, the Company instead shall pay to you, on the first day of each calendar month following the time the Company determines it cannot pay such COBRA Premiums, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including the amount of COBRA premiums for your eligible dependents), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the COBRA Premium Period. You may, but are not obligated to, use such Special Cash Payments toward the cost of COBRA premiums.

(b) Severance Benefits for Covered Termination during Change in Control Period. Notwithstanding the foregoing, if your Covered Termination occurs during the period commencing one (1) month prior to the Closing of a Change in Control and ending twelve (12) months following the Closing of a Change in Control, in addition to the Severance Benefits described in Section 9(a), you shall also be eligible to receive the following, subject to satisfaction of the Release Requirement:

(i) Equity Acceleration. The vesting and exercisability of each outstanding unvested stock option and other stock award, as applicable, that you hold covering Company common stock (each, an “Equity Award”) shall be accelerated in full and any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any Equity Award granted to you shall lapse in full. For purposes of determining the number of shares that will vest pursuant to the foregoing provision with respect to any Equity Award that vests based on performance goals for which the performance period has not ended and that has multiple vesting levels depending upon the level of performance, vesting acceleration with respect to any ongoing performance period(s) shall occur with respect to the number of shares subject to the award as if the applicable performance criteria had been attained at a 100% level or, if greater, based on actual performance as of your Covered Termination. If necessary to give effect to this Section 9(b)(i), if your Covered Termination occurs prior to a Change in Control, all of the Equity Awards you hold as of immediately prior to your Covered Termination shall remain outstanding after your Covered Termination for at least until the earlier of (i) thirty (30) days after your Covered Termination or (ii) the Closing, if sooner. Notwithstanding anything to the contrary set forth herein, your Equity Awards shall remain subject to the terms of the applicable Company plan and award documents under which such Equity Award was granted, including any provision for earlier termination of such Equity Awards.

(c) Release Requirement. To be eligible for the Severance Benefits pursuant to Sections 9(a) and 9(b) above, you must satisfy the following release requirement (the “Release Requirement”): return to the Company a signed and dated general release of all known and unknown claims, in such form as provided by the Company (the “Release and Waiver”) within the applicable deadline set forth therein, and permit the Release and Waiver to become effective and irrevocable in accordance with its terms, which must occur no later than sixty (60) days following your termination date (such effective date of the Release and Waiver, the “Release Effective Date”). You may be asked to provide reasonable transitional services as a condition of payment of Severance Benefits.

(d) Definitions.

(i) “Affiliate” means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such terms are defined in Rule 405 promulgated under the Securities Act of 1933, as amended. The Board will have the authority to determine the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing definition.

(ii) “Cause” means the occurrence of any one or more of the following: (i) your conviction of, or plea of no contest with respect to, any felony, or of any misdemeanor involving dishonesty or moral turpitude; (ii) your participation in a fraud or act of dishonesty (or an attempted fraud or act of dishonesty) that results in (or could result in) material harm to the Company or its Affiliates, including but not limited to material harm to reputational interests; (iii) your violation of a fiduciary duty owed to the Company or its Affiliates; (iv) your material breach of any fully executed agreement between you and the Company or any of its Affiliates, including but not limited to this Agreement or your Confidential Information Agreement, or any applicable Company policies; (v) persistent or material neglect of your job duties, which is not cured within ten (10) business days after you are provided written notice by the Company specifically identifying the manner of your performance or neglect (provided, that, such written notice and opportunity to cure are not required if your performance or neglect is not reasonably susceptible to being cured); (vi) your gross misconduct or material failure to comply with a written lawful instruction of the Company or (vii) your inability or refusal to perform your job duties for any consecutive thirty (30) day period for any reason that is not the result of death or Disability.

(iii) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(A) any Exchange Act Person¹ (excluding Imprimis Pharmaceuticals, Inc. and any of its Affiliates (“Imprimis”)) becomes the Owner², directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

(B) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(C) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, except for a liquidation into a parent corporation; or

(D) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to Imprimis or to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition.

¹ “Exchange Act Person” means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

² “Own,” “Owned,” “Owner,” “Ownership” A person or entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

Notwithstanding the foregoing definition or any other provision of this Agreement, the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.

(iv) “Closing” means the initial closing of the Change in Control as defined in the definitive agreement executed in connection with the Change in Control. In the case of a series of transactions constituting a Change in Control, “Closing” means the first closing that satisfies the threshold of the definition for a Change in Control.

(v) “Disability” means your inability to perform the essential functions of your position, with or without reasonable accommodation, by reason of any medically determinable physical or mental impairment, where such inability has continued for at least a period of 60 days in any consecutive 365-day period, as determined by the Company in its sole discretion. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.

(vi) “Good Reason” for your resignation means the occurrence of any of the following events, conditions or actions taken by the Company without Cause and without your written consent: (i) a material reduction of your annual base salary, which you and the Company agree is a reduction of at least 10% of your annual base salary; provided, however, that Good Reason shall not be deemed to have occurred in the event of a reduction in your annual base salary that is pursuant to a salary reduction program affecting substantially all of the executive employees of the Company; (ii) a material reduction in your authority, duties or responsibilities, including a requirement that you report to a corporate officer or employee of the Company instead of reporting directly to the Board; (iii) a relocation of your principal place of employment with the Company to a place that increases your one-way commute by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to such relocation (excluding regular travel in the ordinary course of business); or (iv) a material breach by the Company of any provision of this Agreement; provided, however, that in each case above, in order for your resignation to be deemed to have been for Good Reason, you must first give the Board written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first occurrence thereof; the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and your resignation from all positions you hold with the Company must be effective not later than thirty (30) days after the expiration of such Cure Period.

(vii) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

(e) Other. You will not be eligible for any Severance Benefits under any circumstances other than those described herein, including circumstances in which your employment is terminated by the Company for Cause, you terminate your employment for any reason at any time (other than for Good Reason), or your employment terminates due to your death or Disability. In addition, if you materially breach any continuing obligations to the Company (including but not limited to any material breach of the Confidential Information Agreement) during the period of time that you are receiving any Severance Benefits, you will forfeit your entitlement to any then unpaid Severance Benefits, and the Company’s obligation to continue to pay or provide such Severance Benefits will immediately terminate as of the date of your material breach.

10. Section 409A. It is intended that all of the benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, an exemption from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent no so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and any ambiguities herein shall be interpreted accordingly. Specifically, the benefits under this Agreement are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9) and each installment of severance benefits, if any, is a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i). However, if such exemptions are not available and you are, upon your “separation from service” with the Company (within the meaning of Treasury Regulation Section 1.409A-1(h)) (without regard to any permissible alternative definition thereunder) (“Separation from Service”), a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one (1) day after your Separation from Service, or (ii) your death. Severance benefits shall not commence until you have a Separation from Service. If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the Release and Waiver could become effective in the calendar year following the calendar year in which your Separation from Service occurs, the Release Effective Date will not be deemed effective, for purposes of payment of severance, any earlier than the first day of the second calendar year. Except to the minimum extent that payments must be delayed because you are a “specified employee” or until the Release Effective Date, all severance amounts will be paid as soon as practicable in accordance with this Agreement and the Company’s normal payroll practices.

11. Section 280G.

(a) If any payment or benefit you would receive from the Company or otherwise in connection with a change in control of the Company or other similar transaction (“Payment”) would (1) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (2) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

(b) Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (13) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

(c) The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the event described in Section 280G(b)(2)(A)(i) of the Code will perform the foregoing calculations. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control or similar transaction, the Company will appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder. The independent registered public accounting firm engaged to make the determinations hereunder will make its determination with input from you (or your counsel) and provide its calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the date on which your right to a Payment is triggered (if requested at that time by the Company or you) or such other time as reasonably requested by the Company or you.

12. Dispute Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with and services for the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with and services for the Company, or the termination of your employment with and services for the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in Boston, Massachusetts (or such other location as mutually agreed by the parties) by JAMS, Inc. (“JAMS”) or its successors by a single arbitrator. Both you and the Company acknowledge that by agreeing to this arbitration procedure, you each waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. Any such arbitration proceeding will be governed by JAMS’ then applicable rules and procedures for employment disputes, which will be provided to you upon request. In any such proceeding, the arbitrator shall (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. You and the Company each shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law. Nothing in this Agreement is intended to prevent either the Company or you from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law. The Company shall (x) pay all filing fees in excess of those that would be required if the dispute were decided in a court of law, (y) pay the arbitrator’s fees and any other fees or costs unique to arbitration, and (z) in the event that you prevail in the arbitration proceeding, pay your reasonable attorney’s fees and costs incurred in connection with the arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

13. Indemnification. Upon the Employment Effective Date, you shall be eligible for indemnification by the Company in your role as Chief Executive Officer to the fullest extent as provided for pursuant to Section 8.1 of the Company’s By-Laws, as may be amended and restated from time to time.

14. Miscellaneous. This Agreement, along with the Confidential Information Agreement, forms the complete and exclusive statement of your agreement with the Company regarding the subject matter hereof. It supersedes and replaces any other agreements or promises made to you by anyone concerning your employment terms with the Company or any Affiliate thereof, whether oral or written. This Agreement may not be amended or modified except by a written modification signed by you and a duly authorized member of the Board, with the exception of those changes expressly reserved to the Company’s discretion in this Agreement. This Agreement is governed by the laws of the Commonwealth of Massachusetts without reference to conflicts of law principles, and it is intended to bind and inure to the benefit of and be enforceable by the Company and its successors and assigns. If any provision of this Agreement shall be held invalid or unenforceable in any respect, such invalidity or enforceability shall not affect the other provisions of this Agreement, and such provision will be reformed, construed and enforced so as to render it valid and enforceable consistent with the general intent of the parties insofar as possible under applicable law. With respect to the enforcement of this Agreement, no waiver of any right hereunder shall be effective unless it is in writing. Any ambiguity in this Agreement shall not be construed against either party as the drafter. This Agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile and electronic signatures shall be equivalent to original signatures. To the extent required by law, your employment with the Company will be subject to satisfactory proof of your identity and right to work in the United States.

To accept our offer of consulting and employment under the terms set forth herein, please sign and date this Agreement and return the fully signed document to me at your earliest convenience and no later than within fifteen business days from the date listed above.

Please let me know if you have any questions.

Sincerely.
MELT PHARMACEUTICALS, INC.
By:	/s/ Mark L. Baum
	Mark L. Baum

Reviewed, Understood, and Accepted:
/s/ Greg Madison	9/28/18
Greg Madison	Date
Accepted by Company
/s/ Mark L. Baum	9/27/18
Mark L. Baum, Executive Director	Date

CONFIDENTIAL INFORMATION, INVENTIONS,

AND NON-SOLICITATION AGREEMENT

In consideration of my employment or continued employment by MELT Pharmaceuticals, Inc., its parent, subsidiaries, affiliates, successors, predecessors, or assigns, as applicable, (collectively, the “Company”), the compensation and benefits provided to me now and during my employment with the Company, the on-going access to and use of the Company’s Confidential Information (as defined below), I agree to the terms of this Confidential Information, Inventions, and Non-Solicitation Agreement (the “Agreement”).

1. Confidential Information Protections.

1.1. Nondisclosure; Recognition of Company’s Rights. At all times during and after my employment by Company, I will hold in confidence and will not disclose, use, lecture upon, or publish any of Company’s Confidential Information (defined below), except as may be required in connection with my work for Company, or as expressly authorized by the Chief Executive Officer (if I am not the Chief Executive Officer) or Board of Directors of the Company. I will obtain the Board’s written approval before publishing or submitting for publication any material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any Confidential Information. I hereby assign to Company any rights I may have or acquire in any and all Confidential Information and recognize that all Confidential Information shall be the sole and exclusive property of Company and its assigns. Notwithstanding the foregoing, pursuant to 18 U.S.C. Section 1833(b), I shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

1.2. Confidential Information. The term “Confidential Information” shall mean any and all confidential knowledge, data or information related to Company’s business or its actual or demonstrably anticipated research or development gained during my employment with the Company, including without limitation (a) trade secrets, inventions, ideas, processes, computer source and object code, data, formulae, programs, other works of authorship, know-how, improvements, discoveries, developments, designs, and techniques; (b) information regarding customers and potential customers of the Company, including customer lists, names, representatives, their needs or desires with respect to the types of products or services offered by the Company, proposals, bids, contracts and their contents and parties, the type and quantity of products and services provided or sought to be provided to customers and potential customers of the Company and other non-public information relating to customers and potential customers; (c) information regarding any of the Company’s business partners and their services, including names; representatives, proposals, bids, contracts and their contents and parties, the type and quantity of products and services received by the Company, and other non-public information relating to business partners; (d) information regarding personnel, employee lists, compensation, and employee skills; and (e) any other non-public information which a competitor of the Company could use to the competitive disadvantage of the Company. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry through no breach of this Agreement or other act or omission by me. Further, notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between the Company and me, nothing in this Agreement shall limit my right to discuss my employment or report possible violations of law or regulation with any federal government agency or similar state or local agency or to discuss the terms and conditions of my employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act.

1.3. Third Party Information. I understand that Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During and after the term of my employment, I will hold Third Party Information known by me, or told to me by Company, to be confidential in strict confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or use, Third Party Information, except in connection with my work for Company or unless expressly authorized by an officer of Company in writing.

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1.4. Term of Nondisclosure Restrictions. I understand that Confidential Information and Third Party Information is never to be used or disclosed by me. If a temporal limitation on my obligation not to use or disclose such information is required under applicable law, and the Agreement or its restriction(s) cannot otherwise be enforced, I agree and the Company agrees that the two (2) year period after the date my employment ends will be the temporal limitation relevant to the contested restriction; provided, however, that this sentence will not apply to trade secrets protected without temporal limitation under applicable law.

1.5. No Improper Use of Information of Prior Employers and Others. I represent that my employment by Company does not and will not breach any agreement with any former employer, including any noncompete agreement or any agreement to keep in confidence or refrain from using information acquired by me prior to my employment by Company. I further represent that I have not entered into, and will not enter into, any agreement, either written or oral, in conflict with my obligations under this Agreement. During my employment by Company, I will not improperly make use of, or disclose, any information or trade secrets of any former employer or other third party, nor will I bring onto the premises of Company or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party. I will use in the performance of my duties only information that is generally known and used by persons with training and experience comparable to my own, is common knowledge in the industry or otherwise legally in the public domain, or is otherwise provided or developed by Company.

2. Inventions.

2.1. Definitions. As used in this Agreement, the term “Invention” means any ideas, concepts, information, materials, processes, data, programs, know-how, improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, and techniques and all Intellectual Property Rights in any of the items listed above. The term “Intellectual Property Rights” means all trade secrets, Copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any jurisdiction or country. The term “Copyright” means the exclusive legal right to reproduce, perform, display, distribute and make derivative works of a work of authorship (as a literary, musical, or artistic work) recognized by the laws of any jurisdiction or country. The term “Moral Rights” means all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country.

2.2. Excluded Inventions and Other Inventions. Attached hereto as Attachment 1 is a list describing all existing Inventions, if any, that may relate to the Company’s business or actual or demonstrably anticipated research or development and that were made by me or acquired by me prior to the commencement of my employment with, and which are not to be assigned to, the Company (“Excluded Inventions”). If no such list is attached, I represent and agree that it is because I have no rights in any existing Inventions that may relate to the Company’s business or actual or demonstrably anticipated research or development. For purposes of this Agreement, “Other Inventions” means Inventions in which I have or may have an interest, as of the commencement of my employment or thereafter, other than Company Inventions (defined below) and Excluded Inventions. I acknowledge and agree that if I use any Excluded Inventions or any Other Inventions in the scope of my employment, or if I include any Excluded Inventions or Other Inventions in any product or service of the Company, or if my rights in any Excluded Inventions or Other Inventions may block or interfere with, or may otherwise be required for, the exercise by the Company of any rights assigned to the Company under this Agreement, I will immediately so notify the Company in writing. Unless the Company and I agree otherwise in writing as to particular Excluded Inventions or Other Inventions, I hereby grant to the Company, in such circumstances (whether or not I give the Company notice as required above), a non-exclusive, perpetual, transferable, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Excluded Inventions and Other Inventions. To the extent that any third parties have rights in any such Other Inventions, I hereby represent and warrant that such third party or parties have validly and irrevocably granted to me the right to grant the license stated above.

2.3. Assignment of Company Inventions. Inventions assigned to Company, or to a third party as directed by Company pursuant to Section 2.6, are referred to in this Agreement as “Company Inventions.” Subject to Section 2.4 (Unassigned or Nonassignable Inventions) and except for Excluded Inventions set forth in Attachment 1 and Other Inventions, I hereby assign to Company all my right, title, and interest in and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made, conceived, reduced to practice, or learned by me, either alone or with others, during the period of my employment by Company. To the extent required by applicable Copyright laws, I agree to assign in the future (when any copyrightable Inventions are first fixed in a tangible medium of expression) my Copyright rights in and to such Inventions. Any assignment of Company Inventions (and all Intellectual Property Rights with respect thereto) hereunder includes an assignment of all Moral Rights. To the extent such Moral Rights cannot be assigned to Company and to the extent the following is allowed by the laws in any country where Moral Rights exist, I hereby unconditionally and irrevocably waive the enforcement of such Moral Rights, and all claims and causes of action of any kind against Company or related to Company’s customers, with respect to such tights. . I further acknowledge and agree that neither my successors-in-interest nor legal heirs retain any Moral Rights in any Company Inventions (and any Intellectual Property Rights with respect thereto).

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2.4. Unassigned or Nonassignable Inventions. I recognize that this Agreement will not be deemed to require assignment of any Invention that I developed entirely on my own time without using the Company’s equipment, supplies, facilities, trade secrets, or Confidential Information, except for those Inventions that either (i) relate to the Company’s actual or anticipated business, research or development, or (ii) result from or are connected with work performed by me for the Company. In addition, this Agreement does not apply to any Invention which qualifies fully for protection from assignment to the Company under any specifically applicable state law, regulation, rule or public policy (“Specific Inventions Law”).

2.5. Obligation to Keep Company Informed. During the period of my employment and for one (1) year after my employment ends, I will promptly and fully disclose to Company in writing all Inventions authored, conceived, or reduced to practice by me, either alone or with others. In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf within one (1) year after termination of employment. At the time of each such disclosure, I will advise the Company in writing of any Inventions that I believe fully qualify for protection under the provisions of any applicable Specific Inventions Law; and I will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions Law. I will preserve the confidentiality of any Invention that does not fully qualify for protection under a Specific Inventions Law.

2.6. Government or Third Party. I agree that, as directed by the Company, I will assign to a third party, including without limitation the United States, all my right, title, and interest in and to any particular Company Invention.

2.7. Ownership of Work Product. I agree that Company will exclusively own all work product that is made by me (solely or jointly with others) within the scope of my employment, and I hereby irrevocably and unconditionally assign to Company all right, title, and interest worldwide in and to such work product. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by Copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101). I understand and agree that I have no right to publish on, submit for publishing, or use for any publication any work product protected by this Section, except as necessary to perform services for Company.

2.8. Enforcement of Intellectual Property Rights and Assistance. During and after the period of my employment and at Company’s request and expense I will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign Intellectual Property Rights and Moral Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Intellectual Property Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Intellectual Property Rights to the Company or its designee, including the United States or any third party designated by the Company. My obligation to assist the Company with respect to Intellectual Property Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me at the Company’s request on such assistance. In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in this paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and on my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me. I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Intellectual Property Rights assigned under this Agreement to the Company.

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2.9. Incorporation of Software Code. I agree that I will not incorporate into any Company software or otherwise deliver to Company any software code licensed under the GNU General Public License or Lesser General Public License or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Company except in strict compliance with the Company’s policies regarding the use of such software.

3. Records. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that is required by the Company) of all Confidential Information developed by me and all Inventions made by me during the period of my employment by the Company, which records shall be available to, and remain the sole property of, the Company at all times.

4. Non-Solicitation. I agree that during the period of my employment and for the period of one (1) year after the date my employment ends for any reason, including but not limited to voluntary termination by me or involuntary termination by Company, I will not, as an officer, director, employee, consultant, owner, partner, or in any other capacity (with or without compensation), either directly or through others:

4.1. solicit, induce, encourage, or participate in solicitation of, inducement of, or encouragement of any employee, consultant or independent contractor of Company to terminate his or her relationship with Company;

4.2. hire, employ, or engage in business with or attempt to hire, employ, or engage in business with any person employed by Company or who has left the employment of Company within the preceding three (3) months or discuss any potential employment or business association with such person, even if I did not initiate the discussion or seek out the contact; or

4.3. encourage, solicit, induce or accept business from any Customer or Potential Customer with the purpose, effect or potential of: (i) selling (or assisting another person’s selling) or providing such Customer or Potential Customer products or services that are the same, similar, or related to products or services provided by Company; or (ii) terminating, diminishing, or materially altering in a manner harmful to Company, the Customer or Potential Customer’s relationship with Company.

The parties agree that for purposes of this Agreement, a “Customer or Potential Customer” is any person or entity who or which, at any time during the two (2)-year period prior to the date my employment with Company ends, (i) contracted for, was billed for, or received from Company any product, service or process with which I worked directly or indirectly during my employment by Company or about which I acquired Confidential Information or Third Party Information; or (ii) was in contact with me or in contact with any other employee, owner, or agent of Company, of which contact I was or should have been aware, concerning any product, service or process with which I worked directly or indirectly during my employment with Company or about which I acquired Confidential Information or Third Party Information; or (iii) was solicited by Company in an effort in which I was involved or of which I was or should have been aware.

5. Intentionally Omitted.

6. Reasonableness of Restrictions.

6.1. I acknowledge that I have the right to consult with counsel prior to signing this Agreement. I further acknowledge that I will derive significant value from the Company’s agreement to provide me with Company Confidential Information to enable me to optimize the performance of my duties to the Company. I further acknowledge that my fulfillment of the obligations contained in this Agreement, including, but not limited to, my obligation neither to disclose nor to use Company Confidential Information other than for the Company’s exclusive benefit and my obligations not to compete and not to solicit are necessary to protect Company Confidential Information and, consequently, to preserve the value and goodwill of the Company. I agree that this Agreement does not prevent me from earning a living or pursuing my career. I agree that the restrictions contained in this Agreement are reasonable, proper, and necessitated by the Company’s legitimate business interests. I represent and agree that I am entering into this Agreement freely and with knowledge of its contents with the intent to be bound by the Agreement and the restrictions contained in it.

6.2. If any restrictions set forth in Sections 4 or 5 of this Agreement are found by any court of competent jurisdiction to be unenforceable because they extend for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

7. Return Of Company Property. Upon termination of my employment or upon Company’s request at any other time, I will deliver to Company all of Company’s property, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Inventions, Third Party Information or Confidential Information and certify, in writing that I have fully complied with the foregoing obligation. I agree that I will not copy, delete, or alter any information contained upon my Company computer or Company equipment before I return it to Company. In addition, if I have used any personal computer, server, or email system to receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, I agree to provide the Company with a computer-useable copy of all such Confidential Information and then permanently delete and expunge such Confidential Information from those systems.

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8. Notification Of New Employer.

8.1. If I am offered employment or the opportunity to enter into any business venture as owner, partner, consultant or other capacity while the restrictions described in Sections 4 and 5. of this Agreement are in effect, I agree to inform my potential employer, partner, co-owner and/or others involved in managing the business with which I have an opportunity to be associated of my obligations under this Agreement and also agree to provide such person or persons with a copy of this Agreement.

8.2. I agree to inform the Company of all employment and business ventures which I enter into while the restrictions described in Sections 4 and 5 of this Agreement are in effect and I also authorize the Company to provide copies of this Agreement to my employer, partner, co-owner and/or others involved in managing the business with which I am employed or associated and to make such persons aware of my obligations under this Agreement.

9. Legal And Equitable Remedies. I acknowledge that, because my services are personal and unique and because I will have access to the Confidential Information of Company, any breach of this Agreement by me would cause irreparable injury to Company for which monetary damages would not be an adequate remedy and, therefore, will entitle Company to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity.

10. General Provisions.

10.1. Governing Law. This Agreement will be governed by and construed according to the laws of the Commonwealth of Massachusetts as such laws are applied to agreements entered into and to be performed entirely within Massachusetts between Massachusetts residents. I hereby expressly consent to the personal jurisdiction and venue of the state and federal courts located in the Commonwealth of Massachusetts for any lawsuit filed there against me by the Company arising from or related to this Agreement.

10.2. Severability. If any provision of this Agreement is, for any reason, held to be ambiguous, invalid or unenforceable, the other provisions of this Agreement will remain enforceable and the ambiguous, invalid or unenforceable provision(s) shall be deemed modified to be valid and enforceable to the maximum extent permitted by law.

10.3. Successors and Assigns. This Agreement is for my benefit and the benefit of the Company, its successors, assigns, parent corporations, subsidiaries, affiliates, and purchasers, and will be binding upon my heirs, executors, administrators and other legal representatives. Notwithstanding anything to the contrary herein, the Company may assign this Agreement and its rights and obligations under this Agreement to any successor to all or substantially all of the Company’s relevant assets, whether by merger, consolidation, reorganization, reincorporation, sale of assets or stock, or otherwise. For avoidance of doubt, the Company’s successors and assigns are authorized to enforce the Company’s rights under this Agreement.

10.4. Survival. This Agreement shall survive the termination of my employment and the assignment of this Agreement by Company to any successor or other assignee and shall be binding upon my heirs and legal representatives.

10.5. Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page, by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service. Notice will be effective upon receipt or refusal of delivery. Each party may change its address for receipt of notice by giving notice of the change to the other party.

10.6. Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of that provision or any other provision on any other occasion.

10.7. Export. I agree not to export, reexport, or transfer, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, in violation of the United States export laws or regulations.

10.8. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.

10.9. Advice of Counsel. I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT WILL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION OF THIS AGREEMENT.

10.10. Miscellaneous. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by me and an authorized officer of the Company. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement. If no other agreement governs nondisclosure and assignment of inventions during any period in which I was previously employed or am in the future employed by Company as an independent contractor, the obligations pursuant to sections of this Agreement titled “Confidential Information Protections” and “Inventions” shall apply.

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SIGNATURE PAGE

This Confidential Information, Inventions, And Non-Solicitation Agreement shall be effective as of the first day of my services with Company, even if signed by me at a later date.

Employee:		Melt Pharmaceuticals, Inc.:
I have read, understand, and accepted this agreement.		Accepted and Agreed:
/s/ Greg Madison		/s/ Mark L. Baum
	(Signature)		(Signature)
By:	Greg Madison	By:	Mark L. Baum
Title:		Title:	Exec. Dir.
Date:	9/28/18	Date:	9/28/18

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EX-10.21

Exhibit 10.21

MELT PHARMACEUTICALS, INC.

12264 EL CAMINO REAL, SUITE 350

SAN DIEGO, CA 92130

April 29, 2019

Mark Hazard

[***]

[***]

Re: Employment Terms

Dear Mark:

On behalf of Melt Pharmaceuticals, Inc. (the “Company”), I am pleased to offer you employment in the position of Chief Technical Officer of the Company, on the terms set forth in this offer letter agreement (the “Agreement”).

1. Employment Position; Duties. Your employment shall begin on April 29, 2019 (such actual date, the “Employment Effective Date”). Upon the Employment Effective Date, you will be employed in the position of Chief Technical Officer of the Company. In this position, you will report to the Chief Executive Officer, and you will have those duties and responsibilities as customary for this position and as may be directed by the Chief Executive Officer of the Company. Your work duties may include work for, or on behalf of, Affiliates of the Company (as defined below). You will primarily work from your current location in Harrisburg, Pennsylvania area, until the Company opens its office in the vicinity of Boston, Massachusetts, at which time you will primarily work from such office in the vicinity of Boston, Massachusetts, but in any event you understand that reasonable travel shall be required in the performance of your position with the Company. During your employment, you will devote your full-time best efforts to the business of the Company and its Affiliates.

2. Employee Base Salary; Employee Benefits and Business Expenses.

(a) Base Salary. Your base salary will be paid at the annual rate of $330,000, less required payroll deductions and tax withholdings, paid on the Company’s normal payroll schedule (which shall initially be bi-weekly). As an exempt salaried employee, you will be required to work the Company’s normal business hours, and such additional time as appropriate for your work assignments and position. You will not be eligible for extra payment under the overtime laws. Your base salary may otherwise be adjusted from time to time at the Company’s discretion.

(b) Employee Benefits. As a regular full-time employee, you will be eligible to participate in the Company’s standard employee benefits including medical insurance, dental insurance, life insurance and/or pension plans (pursuant to the terms and conditions of the benefit plans and applicable policies), as they may be commenced, terminated or changed from time to time within the Company’s discretion.

(c) Business Expenses. Your legitimate and documented business expenses will be reimbursed by the Company as provided under its business expense reimbursement policies.

3. Annual Performance Bonus. In addition to base salary, you will be eligible to earn discretionary incentive compensation at a total annual target amount of forty percent (40%) of your base salary in effect during the bonus year (“Performance Bonus”), based on the achievement of (a) corporate performance targets to be established by the Board of Directors of the Company (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”) and (b) individual performance targets to be mutually established by you and the Chief Executive Officer of the Company. Any 2019 Performance Bonus will be prorated based on the number of days you were employed with the Company during 2019. The Performance Bonus, if earned, will be paid on an annual basis, less required payroll deductions and tax withholdings, after the close of the fiscal year and after determination by the Board (or the Compensation Committee thereof) of the level of achievement of the applicable performance targets and metrics and the level of the Performance Bonus amount (if any). In no event will the Performance Bonus, if any, be paid later than March 15 of the year following the year to which the Performance Bonus relates. No Performance Bonus amount is guaranteed and, in addition to the other conditions for earning such Performance Bonus, you must remain an employee in good standing of the Company at the close of the Performance Bonus fiscal year in order to earn any Performance Bonus.

4. Equity Awards. The Company shall, subject to your execution of this Agreement below and commencement of your employment, grant you an option award covering 90,000 shares of the Company’s common stock (the “Option Award”). The Option Award shall vest 25% on the one year anniversary of the Employment Effective Date and in equal quarterly installments thereafter ending on the four year anniversary of the Employment Effective Date, subject to your continued service to the Company and vesting acceleration in Section 8(b) below. The Option Award is subject to approval by the Board and the terms of a Stock Option Grant Notice, Option Agreement and Notice of Exercise that will be provided to you by the Company. The exercise price per share of the Option Award will be the fair market value of the Company’s common stock on the grant date of such Option Award, as determined by the Board in its sole discretion. In addition to the Option Award, you will be eligible to receive additional equity award grants under the Company’s equity incentive plans from time to time in the discretion of the Board or its Compensation Committee, and in accordance with the terms and conditions of such plans.

5. Compliance With Proprietary Information Agreement and Company Policies. As a condition of employment, you shall sign and comply with the Confidential Information, Inventions and Non-Solicitation Agreement (the “Confidential Information Agreement”) which will be provided to you by the Company under separate cover. In addition, you are required to abide by the Company’s policies and procedures, as may be modified from time to time within the Company’s discretion.

6. Protection of Third Party Information and Outside Activities.

(a) Third Party Information. In your work for the Company or its Affiliates, you will be expected not to make any unauthorized use or disclosure of any confidential information or materials, including trade secrets, of any former employer or other third party; and not to violate any lawful agreement that you may have with any third party. By signing this Agreement, you represent that you are able to perform your job duties within these guidelines, and you are not in unauthorized possession or control of any confidential documents, information, or other property of any former employer or third party. In addition, you represent that your employment hereunder will not represent a violation of any agreement you may have with any third party (e.g., a former employer) which may limit your ability to perform your duties to the Company or its Affiliates, or which could present a conflict of interest with the Company or its Affiliates, including but not limited to disclosure (and a copy) of any contractual restrictions on solicitations or competitive activities, and are not bound by any such restrictions which would restrict or prevent you from accepting employment with the Company.

(b) Outside Activities. During your employment with the Company, you may engage in civic and not-for-profit activities, act as a trustee for estate planning purposes and engage in, and manage, personal investments, so long as such activities do not interfere with the performance of your duties hereunder or present a conflict of interest with the Company or its Affiliates. Subject to the restrictions set forth herein, and only with prior written disclosure to and consent of the Company, you may engage in other types of business or public activities. Your service on any board of directors (or similar) of an outside entity or organization shall be subject to prior written approval of the Company. The Company may rescind approval of outside services, if the Company determines, in its sole discretion, that such activities compromise or threaten to compromise the Company’s or its Affiliates’ business interests or conflict with your duties to the Company or its Affiliates.

7. At-Will Employment Relationship. Your employment relationship with the Company is at-will. Accordingly, you may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company, and the Company may terminate your employment at any time with or without Cause or prior notice. In addition, subject to your right to resign for “Good Reason” (as defined below) the Company retains the discretion to modify your other employment terms from time to time, including but not limited to your position, duties, authority, reporting relationship, work location, compensation, and benefits.

8. Severance Benefits.

(a) Severance Benefits for Covered Termination. If (i) your employment is terminated due to (A) a termination by the Company without Cause (other than as a result of your death or Disability) or (B) your resignation for Good Reason (collectively, a “Covered Termination”), (ii) you satisfy the Release Requirement and (iii) you continue to abide by the terms of your Confidential Information Agreement, then you will receive the “Severance Benefits” as set forth in this Section 8(a) as your sole severance benefits, and you will not be eligible for severance benefits under any other policy, plan or agreement except to the extent required by law. Specifically, you will receive:

(i) Base Severance Payments. Severance pay in the form of continuation of your base salary at the time of your Covered Termination (but ignoring any decrease that forms the basis of your resignation for Good Reason, if applicable) for a period of nine (9) months (increased to a total of twelve (12) months if your Covered Termination occurs during the CIC Period, described in Section 8(b)), subject to required payroll deductions and tax withholdings (such applicable payments, the “Base Severance Payments”). Subject to Section 9, the Severance Payments shall be made on the Company’s regular payroll schedule in effect following your termination date, provided, however, that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead accrue and be made on the first regular payroll date following the Release Effective Date; and

(ii) Bonus Severance Payment. A lump sum cash amount equivalent to your Performance Bonus for the year in which the termination date occurs, prorated based on the number of days that you were employed during such performance year, divided by the total number of days in such performance year (the “Bonus Severance Payment”). Your base salary as in effect on the termination date, ignoring any decrease that forms the basis of your resignation for Good Reason, if applicable, shall be used for calculating the Bonus Severance Payment. The Bonus Severance Payment will be paid in a lump sum cash payment within sixty (60) days of the Release Effective Date, but in no event later than March 15 of the year following the year in which your Covered Termination occurs; and

(iii) Health Care Continuation Coverage Payments.

(A) COBRA Premiums. If you timely elect continued coverage under COBRA, the Company will pay your COBRA premiums to continue your coverage (including coverage for your eligible dependents, if applicable) (“COBRA Premiums”) through the period starting on the termination date and ending nine (9) months (increased to a total of twelve (12) months if your Covered Termination occurs during the CIC Period, described in Section 8(b)) after the termination date (such applicable period, the “COBRA Premium Period”); provided, however, that the Company’s provision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period you become eligible for group health insurance coverage through a new employer or you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer’s group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company of such event. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by you under a Section 125 health care reimbursement plan under the Internal Revenue Code of 1986, as amended (the “Code”).

(B) Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), regardless of whether you or your dependents elect or are eligible for COBRA coverage, the Company instead shall pay to you, on the first day of each calendar month following the time the Company determines it cannot pay such COBRA Premiums, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including the amount of COBRA premiums for your eligible dependents), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the COBRA Premium Period. You may, but are not obligated to, use such Special Cash Payments toward the cost of COBRA premiums.

(b) Severance Benefits for Covered Termination during Change in Control Period. Notwithstanding the foregoing, if your Covered Termination occurs during the period commencing one (1) month prior to the Closing of a Change in Control and ending twelve (12) months following the Closing of a Change in Control (the “CIC Period”), in addition to the Severance Benefits described in Section 8(a), you shall also be eligible to receive the following, subject to satisfaction of the Release Requirement:

(i) Equity Acceleration. The vesting and exercisability of each outstanding unvested stock option and other stock award, as applicable, that you hold covering Company common stock (each, an “Equity Award”) shall be accelerated in full and any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any Equity Award granted to you shall lapse in full. For purposes of determining the number of shares that will vest pursuant to the foregoing provision with respect to any Equity Award that vests based on performance goals for which the performance period has not ended and that has multiple vesting levels depending upon the level of performance, vesting acceleration with respect to any ongoing performance period(s) shall occur with respect to the number of shares subject to the award as if the applicable performance criteria had been attained at a 100% level or, if greater, based on actual performance as of your Covered Termination. If necessary to give effect to this Section 8(b)(i), if your Covered Termination occurs prior to a Change in Control, all of the Equity Awards you hold as of immediately prior to your Covered Termination shall remain outstanding after your Covered Termination for at least until the earlier of (i) thirty (30) days after your Covered Termination or (ii) the Closing, if sooner. Notwithstanding anything to the contrary set forth herein, your Equity Awards shall remain subject to the terms of the applicable Company plan and award documents under which such Equity Award was granted, including any provision for earlier termination of such Equity Awards.

(c) Release Requirement. To be eligible for the Severance Benefits pursuant to Sections 8(a) or 8(b) above, you must satisfy the following release requirement (the “Release Requirement”): return to the Company a signed and dated general release of all known and unknown claims, in such form as provided by the Company (the “Release and Waiver”) within the applicable deadline set forth therein, and permit the Release and Waiver to become effective and irrevocable in accordance with its terms, which must occur no later than sixty (60) days following your termination date (such effective date of the Release and Waiver, the “Release Effective Date”). You may be asked to provide reasonable transitional services as a condition of payment of Severance Benefits.

(d) Definitions.

(i) “Affiliate” means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such terms are defined in Rule 405 promulgated under the Securities Act of 1933, as amended. The Company will have the authority to determine the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing definition.

(ii) “Cause” means the occurrence of any one or more of the following: (i) your conviction of, or plea of no contest with respect to, any felony, or of any misdemeanor involving dishonesty or moral turpitude; (ii) your participation in a fraud or act of dishonesty (or an attempted fraud or act of dishonesty) that results in (or could result in) material harm to the Company or its Affiliates, including but not limited to material harm to reputational interests; (iii) your violation of a fiduciary duty owed to the Company or its Affiliates; (iv) your material breach of any fully executed agreement between you and the Company or any of its Affiliates, including but not limited to this Agreement or your Confidential Information Agreement, or any applicable Company policies; (v) persistent or material neglect of your job duties, which is not cured within ten (10) business days after you are provided written notice by the Company specifically identifying the manner of your performance or neglect (provided, that, such written notice and opportunity to cure are not required if your performance or neglect is not reasonably susceptible to being cured); (vi) your gross misconduct or material failure to comply with a written instruction of the Company; or (vii) your inability or refusal to perform your job duties for any consecutive thirty (30) day period for any reason that is not the result of death or Disability.

(iii) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(A) any Exchange Act Person¹ (excluding Harrow Health, Inc. (f/k/a Imprimis Pharmaceuticals, Inc.) and any of its Affiliates (“Harrow”)) becomes the Owner², directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assigning the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

¹ “Exchange Act Person” means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

² “Own,” “Owned,” “Owner,” “Ownership” A person or entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

(B) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(C) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, except for a liquidation into a parent corporation; or

(D) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to Harrow or to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition.

Notwithstanding the foregoing definition or any other provision of this Agreement, the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.

(iv) “Closing” means the initial closing of the Change in Control as defined in the definitive agreement executed in connection with the Change in Control. In the case of a series of transactions constituting a Change in Control, “Closing” means the first closing that satisfies the threshold of the definition for a Change in Control.

(v) “Disability” means your inability to perform the essential functions of your position, with or without reasonable accommodation, by reason of any medically determinable physical or mental impairment, where such inability has continued for at least a period of 60 days in any consecutive 365-day period, as determined by the Company in its sole discretion. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.

(vi) “Good Reason” for your resignation means the occurrence of any of the following events, conditions or actions taken by the Company without Cause and without your written consent: (A) a material reduction of your annual base salary, which you and the Company agree is a reduction of at least 10% of your annual base salary; provided, however, that Good Reason shall not be deemed to have occurred in the event of a reduction in your annual base salary that is pursuant to a salary reduction program affecting substantially all of the executive employees of the Company; (B) a material reduction in your authority, duties or responsibilities; (C) a relocation of your principal place of employment with the Company to a place that increases your one-way commute by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to such relocation (excluding regular travel in the ordinary course of business and excluding the move of your principal place of employment from the Harrisburg, PA area to Boston, as described in Section 1); or (D) a material breach by the Company of any provision of this Agreement; provided, however, that in each case above, in order for your resignation to be deemed to have been for Good Reason, you must first give the Company written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first occurrence thereof, the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and your resignation from all positions you hold with the Company must be effective not later than thirty (30) days after the expiration of such Cure Period.

(vii) “Subsidiary” means, with respect to the Company, (A) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (B) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

(e) Other. You will not be eligible for any Severance Benefits under any circumstances other than those described herein, including circumstances in which your employment is terminated by the Company for Cause, you terminate your employment for any reason at any time (other than for Good Reason), or your employment terminates due to your death or Disability. In addition, if you materially breach any continuing obligations to the Company (including but not limited to any material breach of the Confidential Information Agreement) during the period of time that you are receiving any Severance Benefits, you will forfeit your entitlement to any then-unpaid Severance Benefits, and the Company’s obligation to continue to pay or provide such Severance Benefits will immediately terminate as of the date of your material breach.

9. Section 409A. It is intended that all of the benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, an exemption from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and any ambiguities herein shall be interpreted accordingly. Specifically, the benefits under this Agreement are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9) and each installment of severance benefits, if any, is a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i). However, if such exemptions are not available and you are, upon your “separation from service” with the Company (within the meaning of Treasury Regulation Section 1.409A-1(h) (without regard to any permissible alternative definition thereunder)) (“Separation from Service”), a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (A) six (6) months and one (1) day after your Separation from Service, or (B) your death. Severance benefits shall not commence until you have a Separation from Service. If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the Release and Waiver could become effective in the calendar year following the calendar year in which your Separation from Service occurs, the Release Effective Date will not be deemed effective, for purposes of payment of severance, any earlier than the first day of the second calendar year. Except to the minimum extent that payments must be delayed because you are a “specified employee” or until the Release Effective Date, all severance amounts will be paid as soon as practicable in accordance with this Agreement and the Company’s normal payroll practices.

10. Section 280G.

(a) If any payment or benefit you would receive from the Company or otherwise in connection with a change in control of the Company or other similar transaction (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

(b) Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (i) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (ii) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (iii) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

(c) The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the event described in Section 280G(b)(2)(A)(i) of the Code will perform the foregoing calculations. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control or similar transaction, the Company will appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder. The independent registered public accounting firm engaged to make the determinations hereunder will make its determination with input from you (or your counsel) and provide its calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the date on which your right to a Payment is triggered (if requested at that time by the Company or you) or such other time as reasonably requested by the Company or you.

11. Dispute Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with and services for the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with and services for the Company, or the termination of your employment with and services for the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in Boston, Massachusetts (or such other location as mutually agreed by the parties) by JAMS, Inc. (“JAMS”) or its successors by a single arbitrator. Both you and the Company acknowledge that by agreeing to this arbitration procedure, you each waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. Any such arbitration proceeding will be governed by JAMS’ then applicable rules and procedures for employment disputes, which will be provided to you upon request. In any such proceeding, the arbitrator shall (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. To the fullest extent permitted by law, you and the Company will keep confidential such resolution of the dispute, any award for relief, and the written arbitration decision, including the arbitrator’s essential findings and conclusions and a statement of the award. You and the Company each shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law. Nothing in this Agreement is intended to prevent either the Company or you from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law. The Company shall (x) pay all filing fees in excess of those that would be required if the dispute were decided in a court of law, (y) pay the arbitrator’s fees and any other fees or costs unique to arbitration, and (z) in the event that you prevail in the arbitration proceeding, pay your reasonable attorney’s fees and costs incurred in connection with the arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

12. Indemnification. Upon the Employment Effective Date, you shall be eligible for indemnification by the Company in your role as Chief Technical Officer to the fullest extent as provided for pursuant to Section 44 of the Company’s Bylaws, as may be amended and restated from time to time.

13. Miscellaneous. This Agreement, along with the Confidential Information Agreement, forms the complete and exclusive statement of your agreement with the Company regarding the subject matter hereof. It supersedes and replaces any other agreements or promises made to you by anyone concerning your employment terms with the Company or any Affiliate thereof, whether oral or written. This Agreement may not be amended or modified except by a written modification signed by you and a duly authorized officer of the Company, with the exception of those changes expressly reserved to the Company’s discretion in this Agreement. This Agreement is governed by the laws of the Commonwealth of Massachusetts without reference to conflicts of law principles, and it is intended to bind and inure to the benefit of and be enforceable by the Company and its successors and assigns. If any provision of this Agreement shall be held invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect the other provisions of this Agreement, and such provision will be reformed, construed and enforced so as to render it valid and enforceable consistent with the general intent of the parties insofar as possible under applicable law. With respect to the enforcement of this Agreement, no waiver of any right hereunder shall be effective unless it is in writing. Any ambiguity in this Agreement shall not be construed against either party as the drafter. This Agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile and electronic signatures shall be equivalent to original signatures. To the extent required by law, your employment with the Company will be subject to satisfactory proof of your identity and right to work in the United States.

To accept our offer of employment under the terms set forth herein, please sign and date this Agreement and return the fully signed document to me at your earliest convenience and no later than within fifteen business days from the date listed above.

[Signatures Follow]

Please let me know if you have any questions.

Sincerely,

MELT PHARMACEUTICALS, INC.
By:	/s/ Greg Madison
	Greg Madison

Reviewed, Understood, and Accepted:
/s/ Mark Hazard	April 29, 2019
Mark Hazard	Date

Accepted by Company:
/s/ Greg Madison	May 2, 2019
Greg Madison, Chief Executive Officer	Date

EX-10.22

Exhibit 10.22

102 Woodmont Blvd., Suite
610 Nashville, TN 37205
www.meltpharma.com

February 18, 2022

VIA EMAIL: [***]

Dear Mr. Osborne,

Welcome to Melt Pharmaceuticals! We are pleased to extend an offer of employment to you as the Chief Financial Officer. Your start date is effective February 28, 2022. Your compensation will be $335,000 annually, less applicable withholdings, paid bi-weekly. This is a full-time, exempt level position. You will also be eligible to participate in our performance incentive plan with your initial target bonus at 40% of your annual salary amount, paid annually. Any such performance incentive plan and related bonus, which shall be voluntary and not guaranteed, shall be based on a review and multi-factorial assessment of the Company’s condition, which may also include Executive’s performance, and shall be conducted by the Company’s Board of Directors.

Melt Pharmaceuticals, Inc. has an excellent benefits program including comprehensive medical, dental and vision plans. You will be eligible to participate in our medical, dental and vision plans effective April 1, 2022. In addition, you will have a 20 day/160 hour personal time off (PTO) account, which accrues bi-weekly. You will become eligible to participate in our 401(k) plan following six months of employment.

You will be granted an option to purchase 125,000 shares of Melt Pharmaceuticals, Inc. common stock. The stock option granted to you will have a vesting commencement of February 28, 2022 and will be granted at the time a fair market value for Melt’s common stock has been determined by a third party valuation firm and the value has been approved by the Melt Board of Directors. All other details of our stock option plan will be explained to you shortly after any stock option is approved. Your entitlement to any stock options that may be approved is, of course, conditioned upon your signing of the Stock Option Agreement and is subject to its terms and the terms of the Melt Incentive Stock and Awards Plan under which the options are granted.

Melt will also reimburse you for reasonable out-of-pocket expenses incurred in connection with your service as a Chief Financial Officer, including, but not limited to, reasonable travel expenses to the Melt Nashville office while you are based in Virginia, in accordance with the Company’s reimbursement policies.

It is expected and you agree to use your best efforts to relocate to the Nashville, Tennessee area on or around the six-month anniversary of employment.

In consideration of your relocation to Nashville, Tennessee or its vicinity, Melt will provide a stipend of $10,000, which amount will be subject to applicable withholdings and taxes, to cover relocation and temporary housing costs. Should you decide to end your employment with Melt Pharmaceuticals, Inc. within twelve (12) months of your hire date, you will be responsible for reimbursing us the amount paid in relocation and housing costs which repayment of the relocation stipend would be deducted from your final paycheck. If there is an Involuntary Termination (as defined below) of your employment within twelve (12) months of your start date, the stipend will not require repayment.

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If at any time after the sixth month anniversary of your start date (1) the Company terminates Executive’s employment without Cause (as defined below and other than as a result of Executive’s death or disability), or (2) Executive resigns employment with the Company for Good Reason (as defined below), and provided in any case such termination or resignation constitutes a “separation from service”, as defined under Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”) (such termination described in (1) or (2), an “Involuntary Termination”), Executive shall be entitled to receive the following severance benefits, subject in all events to Executive’s compliance with the below:

(i) Executive shall receive a severance payment equal to the sum of (1) six (6) months of Executive’s Base Salary in effect on the effective date of Executive’s Involuntary Termination (ignoring any decrease that forms the basis for Executive’s resignation for Good Reason, if applicable) plus (2) the greater of Executive’s (x) Annual Bonus for the calendar year preceding the calendar year in which the Involuntary Termination occurs or (y) target Annual Bonus for the year of Involuntary Termination, which shall be paid in a lump sum on the thirtieth (30th) day following Executive’s Involuntary Termination.

(i) Executive may receive an Annual Bonus, consistent with the first paragraph of this Offer of Employment letter, for the year in which the Involuntary Termination occurs, determined based on actual results for such year and pro-rated for the period of time during such year in which Executive provided services to the Company prior to his Involuntary Termination, which shall be paid in a lump sum in accordance with Company practice for payment of the Annual Bonus, which shall in any event be on or before March 15 of the year following the year in which the Involuntary Termination occurs.

(i) If Executive is eligible for and timely elects to continue Executive’s health insurance coverage under the Company’s group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 or the state equivalent (“COBRA”) following Executive’s Involuntary Termination, the Company will pay the COBRA group health insurance premiums for Executive and Executive’s eligible dependents until the earliest of (A) the end of the six (6)-month period following Executive’s Involuntary Termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by Executive under a Section 125 health care reimbursement plan under the U.S. Internal Revenue Code. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether Executive elects continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month in the six (6)-month period following Executive’s Involuntary Termination, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Health Care Benefit Payment”). The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the six (6)-month period following Executive’s Involuntary Termination or (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

Cause: shall mean, with respect to the Executive, the occurrence of any of the following events: (i) such Executive’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Executive’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Executive’s intentional, material violation of any contract or agreement between the Executive and the Company or of any statutory duty owed to the Company; (iv) such Executive’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Executive’s gross misconduct. The determination that a termination of the Executive’s continuous service is either for Cause or without Cause will be made by the Company.

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Good Reason: shall mean the occurrence of any of the following without Executive’s prior written consent: (i) a material reduction in Executive’s Annual Base Salary; (ii) the relocation of Executive to a facility or location that is more than fifty (50) miles from his primary place of employment and such relocation results in an increase in Executive’s one-way driving distance by more than fifty (50) miles; or (iii) a material and adverse change in Executive’s authority, duties, or responsibilities with the Company or a material and adverse change in Executive’s reporting relationship, in each case other than any isolated, insubstantial and inadvertent failure by the Company that is not in bad faith and is cured within ten (10) business days after Executive gives the Company notice of such event, which must be given within ninety (90) calendar days after the event giving rise to the claim of Good Reason occurs Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided, however, that no event described above shall constitute Good Reason unless (A) Executive gives notice of termination to the Company specifying the condition or event relied upon for such termination within ninety (90) calendar days of the initial existence of such event, and (B) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of Executive’s notice of termination (the “Cure Period”). If the Company fails to remedy the condition or event constituting Good Reason during the applicable Cure Period, Executive’s “separation from service” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (together with the Treasury regulations and guidance issued thereunder, the “Code”)) must occur, if at all, within ninety (90) days following such Cure Period in order for such termination as a result of such condition or event to constitute a termination for Good Reason.

Please let us know of your decision to join Melt Pharmaceuticals, Inc.by signing this offer letter and returning it to us no later than February 21, 2022 at 5:00 pm ET. This letter sets forth our entire agreement and understanding regarding the terms of your employment with Melt Pharmaceuticals, Inc. and supersedes all prior or contemporaneous agreements, understandings, negotiations or representations, whether oral or written, expressed or implied, on this subject. This letter may not be modified or amended except by a specific, written agreement signed by you and an authorized representative Melt Pharmaceuticals, Inc.

Your offer and employment is contingent upon:

● Signing and abiding by the Company’s Confidentiality Agreement, Arbitration Agreement and the Proprietary Information and Inventions Assignment Agreement;

● Successful completion of a routine background check by an outside agency engaged by Melt Pharmaceuticals, Inc. and its subsidiaries to conduct background and reference checking;

● Successful passage of a drug and alcohol screening test;

● Licensing or certification requirements;

● Acceptance of other company policies and procedures, including, but not limited to, our Employee Manual, Code of Business Conduct and Ethics, and Insider Trading Policy.

Your employment with Melt Pharmaceuticals, Inc. will be “at-will.” This means you may resign at any time and for any reason. Likewise, the company may terminate the employment relationship at any time, with or without cause or advance notice. In addition, Melt Pharmaceuticals, Inc. reserves the right to modify your position, duties and/or reporting relationship to meet business needs and to use its discretion in deciding on appropriate discipline. Any change to the at-will employment relationship must be by a specific, written agreement, signed by you and Melt Pharmaceuticals, Inc.

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You also must establish your identity and authorization to work as required by the Immigration Reform and Control Act of 1986 (IRCA). Enclosed is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate original documentation on your first day of work.

To indicate your acceptance of Melt Pharmaceuticals, Inc. offer of employment, on the terms and conditions set forth in this letter, please sign and date this letter in the space provided below and return it to Laura Sherry, at 102 Woodmont Blvd., Suite 610, Nashville, TN 37205 or via email to [***].

We hope your employment with Melt Pharmaceuticals, Inc. will prove mutually rewarding.

Sincerely,

/s/ Larry Dillaha

Dr. Larry Dillaha

Chief Executive Officer

*          *          *

I have read this agreement in its entirety and agree to the terms and conditions of employment described in these documents. I understand and agree that my employment with Melt Pharmaceuticals, Inc. is at-will. Your employment relationship with Melt Pharmaceuticals, Inc. will be subject to the terms and conditions of this letter.

2/21/2022	/s/ Donald Bradford Osborne
Date	Brad Osborne

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EX-10.23

Exhibit 10.23

200 Reservoir Street, Suite 303 Needham, MA 02494 www.meltpharma.com

May 28, 2021

Mark Hazard

[***]

[***]

Re: Separation of Employment

Dear Mr. Hazard,

This letter summarizes the terms of your separation of employment with Melt Pharmaceuticals.

1.	Date of Termination. Your employment with Melt Pharmaceuticals has changed due to termination of position.
2.	Salary/Accrued Paid Time Off/Expense Reimbursement. You will be paid out all outstanding wages through May 28, 2021. As of the date of your termination/separation, you had 240 hours of Paid Time Off (PTO) accrued.
3.	Health/Retirement Benefits. You will receive information explaining your health insurance continuation coverage rights via mail from ADP. Your health benefits will be active with Melt Pharmaceuticals until May 31, 2021.
4.	References. We will inform any future prospective employer that our policy is to only confirm your most recently held position, dates of employment and rate of pay.
5.	Unemployment Benefits. The State of Massachusetts Labor & Workforce Development will determine your eligibility for unemployment benefits.
6.	Company Property. You are obligated to return all company property in your possession.
7.	Personal Property. Any personal property will be shipped to you.
8.	ADP Information.

● You may update your address in ADP for all future correspondence (W-2);

● Add your personal email address in ADP so you may reset your password, if necessary.

If you have any questions regarding your termination of employment, please contact Laura Sherry, Director of Operations & Finance at Harrow Health, Inc., [***], [***], 102 Woodmont Blvd., Suite 610, Nashville, TN 37205.

Sincerely,

/s/ Mark L. Baum

Mark L. Baum

Chairman of the Board

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RELEASE AGREEMENT

I, Mark Hazard understand that my employment with Melt Pharmaceuticals, Inc. (the “Company”) will terminate effective May 28, 2021 (the “Separation Date”). The Company has agreed that in exchange for my promises and covenants in this Release Agreement, and provided that this Release Agreement becomes effective as specified below, the Company will provide me with the benefits specified in the attached Exhibit A (the “Severance Benefits”). I understand that on the Separation Date, the Company will pay me any accrued salary or paid time off to which I am entitled by law, regardless of whether I sign this Release Agreement, but I am not entitled to the Severance Benefits unless I sign and return this Release Agreement to the Company and I allow it to become effective.

In consideration for the Severance Benefits I am receiving under this Release Agreement: (1) I agree to immediately return all Company property (including, but not limited to, all Company equipment), documents, materials, and any other embodiments (e.g., files, notes, computer-recorded information) of the Company’s proprietary or confidential information (and all reproductions thereof, in whole or in part) in my possession or control; (2) I acknowledge and will abide by my continuing obligation not to use or disclose the confidential or proprietary information of the Company; (3) I agree to hold in confidence the terms of this Release Agreement; (4) I agree not to disparage the Company or its officers, directors, managers, members, partners, employees, vendors, affiliates, or agents in any manner likely to be harmful to its or their business, business reputation, or personal reputation; and (5) I hereby generally and completely release and discharge the Company and its parent, subsidiaries, predecessors, successors, affiliated entities, and assigns and their respective officers, directors, managers, members, partners, employees, shareholders, affiliates and agents (collectively, the “Released Parties”), from any and all claims, liabilities, or obligations of every kind and nature, whether known or unknown, arising at any time prior to or at the time I sign this Release Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: all federal and state constitutional, statutory and common law claims (including but not limited to claims arising under or based on the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the California Fair Employment and Housing Act and the California Labor Code); claims related to my employment and termination of my employment; and claims for breach of contract or other promise, tort, discrimination, harassment, retaliation, fraud, misrepresentation, emotional distress, compensation, commissions, bonuses, benefits, or equity interests. The Released Claims do not include: (1) any rights or claims for indemnification I may otherwise have; (2) any rights which cannot be waived as a matter of law; or (3) any claims arising from breach of this Release Agreement. Nothing in this Release Agreement prevents me from filing, cooperating with, or participating in any investigation by or proceeding before the Equal Employment Opportunity Commission, the Department of Labor, the California Department of Fair Employment and Housing, or any other government agency, except that I agree to hereby waive my right to any monetary benefits in connection with any such claim, charge, investigation or proceeding.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”). I also acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (1) my ADEA Waiver does not apply to any rights or claims that arise after the date I sign this Release Agreement; (2) I should consult with an attorney prior to signing this Release Agreement; (3) I have 21 days to consider this Release Agreement (although I may choose to voluntarily sign it sooner); (4) I have seven (7) days following the date I sign this Release Agreement to revoke the ADEA Waiver; and (5) this Release Agreement will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release Agreement (the “Effective Date”).

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In releasing claims unknown to me at present, I am waiving all rights and benefits under the following provision of Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any domestic or international jurisdiction: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

I hereby represent that: I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

This Release Agreement, together with Exhibit A, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein, and this Release Agreement supersedes any such promises or representations. This Release Agreement may only be modified by a writing signed by both me and a duly authorized officer of the Company.

I understand that, if I wish to accept the terms of this Release Agreement, then within twenty-one (21) calendar days of my receipt of this Release Agreement, I must sign below and return the original to the Company. If I fail to return the fully signed Release Agreement within that timeframe, the Company’s offer contained herein will terminate.

Understood and Agreed:

	/s/ Mark Hazard
Date	Mark Hazard
	Melt Pharmaceuticals, Inc.
May 28, 2021	/s/ Mark L Baum
Date	By:	Mark L Baum, Chairman of the Board

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EXHIBIT A

SEVERANCE BENEFITS

1.

Severance Payment. The Company will pay you a severance payment equivalent to 9 months of your current base salary ($247,500.00) (the “Severance Payment”). The Severance Payment will be subject to standard payroll deductions and withholdings, and will be paid concurrent with the Company’s regular payroll periods following the Effective Date of this Release Agreement.

2.

COBRA Coverage. Company will reimburse Employee for the cost of coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for Employee and his eligible dependents for a period of up to 9 months (June 2021 and February 2022), provided Employee and/or his eligible dependents timely elect continuation coverage under COBRA within the time period prescribed pursuant to COBRA, and otherwise qualify for continued coverage (the “COBRA Premiums”). COBRA Premiums shall be reimbursed by the Company to Employee consistent with the Company’s normal expense reimbursement policy; provided that Employee submits documentation to the Company substantiating his payments for COBRA coverage.

EX-10.24

Exhibit 10.24

Execution Version

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of September 21, 2022 (the “Amendment Effective Date”), is made among HARROW HEALTH, INC., a Delaware corporation (“Lender”), MELT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), and certain subsidiaries of the Borrower from time to time party to the Loan and Security Agreement as guarantors (defined below) (each a “Guarantor” and collectively, jointly and severally, “Guarantors” and collectively with the Borrower, each a “Loan Party” and collectively, the “Loan Parties”).

RECITALS

A. The Loan Parties and Lender are parties to a Loan and Security Agreement, dated as of September 1, 2021 (as amended by the First Amendment (defined below) and as further amended, restated, supplemented or otherwise modified from time to time, the “Loan and Security Agreement”).

B. The Loan Parties and Lender entered into a First Amendment to Loan and Security Agreement, dated as of April 8, 2022 (the “First Amendment”).

C. Borrower failed to pay the entire outstanding principal amount of the Loan and all accrued and unpaid Obligations pertaining thereto on or before the Maturity Date in violation of Section 1.7 of the Loan and Security Agreement and failed to provide notice thereof in violation of Section 5.8 of the Loan and Security Agreement, and such violations resulted in an Event of Default under Sections 8.1(a) and 8.1(d)(i) of the Loan and Security Agreement (collectively, the “Specified Event of Default”).

D. Borrower has requested that Lender agree to (i) waive the Specified Event of Default, and (ii) amend the Loan and Security Agreement to, among other things, extend the Maturity Date. Lender has agreed to such requests, subject to the terms and conditions hereof.

AGREEMENTS

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms; Interpretation.

(a) Terms Defined in Loan and Security Agreement. All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.

(b) Interpretation. The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

SECTION 2. Amendments to the Loan and Security Agreement.

(a) Effective Date Amendments.

(i) Amended and Restated Definition. The definition of “Maturity Date” in Exhibit A to the Loan and Security Agreement is hereby amended and restated in its entirety as follows:

“Maturity Date” means, the earlier of (a) June 1, 2023 (or if such date is not a Business Day, on the next Business Day after such date), and (b) the date on which the maturity date of the Loan accelerates after or upon an Event of Default.

(ii) New Definition. The following definition is hereby added to Exhibit A in its proper alphabetical order:

“Qualifying Financing” means (a) the issuance by Borrower of its common equity interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) that results in such common equity interests being publicly traded on any United States national securities exchange or over the counter market resulting in cash gross proceeds to Borrower of at least $10,000,000; or (b) the closing of any bona-fide equity financing with third party investors resulting in cash gross proceeds to Borrower of at least $10,000,000.

(b) Post-QF Amendments. The Loan and Security Agreement shall be amended as follows effective as of the Post-QF Amendment Effective Date (defined below):

(i) New Definitions. The following definitions are hereby added to Exhibit A in their proper alphabetical order:

“Cash Equivalents” shall mean (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having a rating of at least A-1 from Standard & Poor’s Ratings Group or at least a P-1 from Moody’s Investors Service, Inc.; (c) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within one (1) year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000; and (d) other short term liquid investments reasonably acceptable to Lender.

“Liquidity” shall mean the aggregate amount of unrestricted cash on hand and Cash Equivalents of a Person.

(ii) Amended and Restated Definitions. The definitions of “Material Adverse Effect” and “Maturity Date” in Exhibit A are hereby amended and restated in their entirety as follows:

“Material Adverse Effect” shall mean a material adverse effect on (a) the business operations, properties, assets or condition (financial or otherwise) of the Loan Parties taken as a whole; (b) the ability of any Loan Party to fully and timely perform its Obligations; (c) the legality, validity, binding effect, or enforceability against a Loan Party of a Loan Document to which it is a party; or (d) the rights and remedies available to, or conferred upon, Lender. Further, a Material Adverse Effect shall be deemed to have occurred in the event that data from the phase 2 study of MELT-300 failed to demonstrate the benefit of the combination MELT-300 study drug versus the individual components of the same MELT-300 study drug, as reasonably determined by Lender.

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“Maturity Date” means, the earlier of (a) September 1, 2026 (or if such date is not a Business Day, on the next Business Day after such date), and (b) the date on which the maturity date of the Loan accelerates after or upon an Event of Default.

(iii) Access to Bank Accounts. The following language is hereby added as a new Section 5.15 (Access to Bank Accounts):

5.15 Access to Bank Accounts. Each Loan Party will provide Lender with monthly bank statements, view access to such accounts, and any information or documentation reasonably required or requested by Lender to evidence any amounts held in such accounts.

(iv) Financial Covenants. The following language is hereby added as a new Section 6.15 (Financial Covenants):

6.15 Financial Covenants.

(a) Minimum Liquidity. Borrower shall not permit Liquidity to be less than (a) $7,000,000 at all times during the period beginning on the date Borrower has consummated a Qualifying Financing and ending on the date that is one (1) year thereafter (the “Liquidity Adjustment Date”) and (b) $5,000,000 at all times after the Liquidity Adjustment Date and continuing until the Maturity Date.

(c) References Within Loan and Security Agreement. Each reference in the Loan and Security Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

SECTION 3. Limited Waiver.

(a) Borrower hereby agrees and acknowledges, and represents and warrants to Lender, that the Specified Event of Default has occurred, is continuing and is not subject to cure or has not been cured within the applicable cure period.

(b) At the request of and as an accommodation to Borrower and subject to the terms and conditions set forth herein, Lender hereby waives the Specified Event of Default. The limited waiver set forth in this Section 3 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to, except as expressly provided herein with respect to the Specified Event of Default, (i) be a consent to any amendment, waiver or modification of any term or condition of the Loan and Security Agreement or of any other Loan Document; (ii) prejudice any right that Lender has or may have in the future under or in connection with the Loan and Security Agreement or of any other Loan Document; (iii) waive any Event of Default that may exist as of the date hereof; or (iv) waive compliance with the Loan and Security Agreement with respect to any Loan Party or transaction. The limited waiver set forth in this Section 3 shall not be deemed to establish a custom or course of dealing among any of the Loan Parties, on the one hand, or Agent or any Lender, on the other hand.

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SECTION 4. Conditions of Effectiveness. Except as set forth in this Section 4 and Section 5, this Amendment shall become effective as of the date on which Borrower shall have delivered to Lender this Amendment duly executed by an authorized officer of Borrower, and Lender shall have executed and delivered this Amendment. The effectiveness of Sections 2(a) and 3 of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:

(a) Fees and Expenses. Borrower shall have paid (i) all invoiced costs and expenses then due in accordance with Section 7(c), and (ii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement.

(b) Representations and Warranties; No Default. On the Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement and the limited waiver contemplated hereby:

(i) The representations and warranties contained in Section 6 herein shall be true and correct on and as of the Amendment Effective Date as though made on and as of such date; and

(ii) There shall exist no Events of Default or events that with the passage of time would result in an Event of Default.

SECTION 5. Conditions of Effectiveness. Section 2(b) of this Amendment shall be effective on the date on which each of the following conditions precedent is satisfied (the “Post-QF Amendment Effective Date”); provided, that such date occurs no later than May 31, 2023 (or such later date as Lender may agree in its sole discretion):

(a) Fees and Expenses. Borrower shall have paid (i) all invoiced costs and expenses then due in accordance with Section 7(c), and (ii) all other fees, costs and expenses, if any, due and payable as of the Post-QF Amendment Effective Date under the Loan and Security Agreement.

(b) Representations and Warranties; No Default. On the Post-QF Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement contemplated hereby:

(i) The representations and warranties contained in Section 6 herein shall be true and correct on and as of the Post-QF Amendment Effective Date as though made on and as of such date; and

(ii) There shall exist no Events of Default or events that with the passage of time would result in an Event of Default.

(c) Consummation of Qualifying Financing. Lender shall have received evidence in form and substance acceptable to Lender in its reasonable discretion that Borrower has consummated a Qualifying Financing.

(d) Officer’s Certificate. Lender shall have received a certificate from an officer of the Borrower, in form and substance satisfactory to the Lender in its reasonable discretion, certifying that the conditions set forth in this Section 5 have been satisfied.

SECTION 6. Representations and Warranties. To induce Lender to enter into this Amendment, each Loan Party hereby confirms, as of the date hereof, that:

(a) giving effect to this Amendment, the representations and warranties made by it in Section 4 of the Loan and Security Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that to the extent such representations and warranties by their terms expressly relate only to a prior date such representations and warranties shall be true and correct in all material respects as of such prior date, provided, further, that in each case such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;

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(b) giving effect to this Amendment, there has not been and there does not exist a Material Adverse Effect;

(c) Lender has and shall continue to have valid, enforceable and perfected first-priority liens, subject only to Permitted Liens, on and security interests in the Collateral and all other collateral heretofore granted to Lender pursuant to the Loan Documents;

(d) the agreements and obligations of each Loan Party contained in the Loan Documents and in this Amendment constitute the legal, valid and binding obligations of such Loan Party, enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by the application of general principles of equity; and

(e) the execution, delivery and performance of this Amendment by the Loan Parties will not violate any law, rule, regulation, order, material contractual obligation or organizational document of any Loan Party and will not result in, or require, the creation or imposition of any lien, claim or encumbrance of any kind on any of its properties or revenues (other than any liens, claims or encumbrances created or permitted under any of the Loan Documents); and

(f) except as disclosed to Lender, no Loan Party has amended its organizational documents since the date of the Loan Documents.

For the purposes of this Section 6, each reference in Section 5 of the Loan and Security Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

SECTION 7. Miscellaneous.

(a) Loan Documents Otherwise Not Affected; Reaffirmation; No Novation.

(i) Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects. Lender’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.

(ii) Each Loan Party hereby expressly (1) reaffirms, ratifies and confirms its Obligations under the Loan and Security Agreement and the other Loan Documents, (2) reaffirms, ratifies and confirms the grant of security under Section 3.1 of the Loan and Security Agreement, (3) reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, as of the date hereof, and with effect from (and including) each of the Amendment Effective Date and the Post-QF Amendment Effective Date, such grant of security in the Collateral: (x) remains in full force and effect notwithstanding the amendments expressly referenced herein; and (y) secures all Obligations under the Loan and Security Agreement, as amended by this Amendment, and the other Loan Documents, (4) agrees that this Amendment shall be a “Loan Document” under the Loan and Security Agreement and (5) agrees that the Loan and Security Agreement and each other Loan Document shall remain in full force and effect following any action contemplated in connection herewith.

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(iii) This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute an accord and satisfaction of any Loan Party’s Obligations under or in connection with the Loan and Security Agreement and any other Loan Document or to modify, affect or impair the perfection or continuity of Lender’s security interest in, security titles to or other liens on any Collateral for the Obligations.

(b) No Reliance. Each Loan Party hereby acknowledges and confirms to Lender that such Loan Party is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

(c) Costs and Expenses. Borrower agrees to pay to Lender within ten (10) days of its receipt of an invoice (or on the Post-QF Amendment Effective Date to the extent invoiced on or prior to the Post-QF Amendment Effective Date), the reasonable and out-of-pocket costs and expenses of Lender, and the reasonable and out-of-pocket fees and disbursements of counsel to Lender, in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Post-QF Amendment Effective Date or after such date.

(d) Binding Effect. This Amendment binds and is for the benefit of the successors and permitted assigns of each party.

(e) Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE LAWS OF THE STATE OF DELAWARE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

(f) Complete Agreement; Amendments. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

(g) Severability of Provisions. Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.

(h) Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment. Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission, including by electronic signature, will be as effective as delivery of a manually executed counterpart hereof.

(i) Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.

(j) Release. For and in consideration of Lender’s agreements contained in this Amendment and as a material inducement to Lender to enter into this Amendment on which Lender is relying, each Loan Party, for and on behalf of itself and all of its respective direct or indirect parents, divisions, subsidiaries, affiliates, members, managers, participants, predecessors, successors, and assigns, and each of their respective current and former directors, officers, shareholders, members, managers, partners, agents, and employees, and each of their respective predecessors, successors, heirs, and assigns (collectively, “Releasors”), each intending to be legally bound, hereby voluntarily, intentionally and knowingly releases and forever waives and discharges the Released Parties of and from any and all claims existing on or before the Amendment Effective Date and which relate to or arise out of (i) any or all of the Loan Documents or transactions contemplated thereby or any actions or omissions in connection therewith, (ii) any aspect of the dealings or relationships between or among any or all of the Loan Parties, on the one hand, and any or all of the Released Parties, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof, or (iii) the negotiation for and execution of this Amendment (including, without limitation, any contracting for, charging, taking, reserving, collecting or receiving interest in excess of the highest lawful rate applicable), irrespective of whether any such claims arise out of contract, tort, violation of law or regulations, or otherwise, and the Loan Parties, for themselves and the other Releasors, waive all defenses with respect to the enforcement by any Released Party of the provisions of the release set forth herein.

[Signatures Appear on the Following Page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first written above.

LOAN PARTIES:
MELT PHARMACEUTICALS, INC.
By:	/s/ Larry Dillaha
Name:	Larry Dillaha
Title:	Chief Executive Officer

Signature Page to Second Amendment to Loan & Security Agreement

LENDER:
HARROW HEALTH, INC.
By:	/s/ Andrew R. Boll
Name:	Andrew R. Boll
Title:	Chief Financial Officer

Signature Page to Second Amendment to Loan & Security Agreement

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form S-1 and related Prospectus of Melt Pharmaceuticals, Inc. (the “Company”) of our report dated April 1, 2022 (except for the Leases section of Note 5, as to which the date is May 18, 2022) (which report contains an explanatory paragraph relating to the Company’s ability to continue as a going concern) relating to the financial statements of the Company.

We also consent to the reference to our firm under the caption “Experts” in such Registration Statement.

/s/ KMJ Corbin & Company LLP

Irvine, California

September 21, 2022

EX-23.3

Exhibit 23.3

Consent of Director Nominee

I hereby consent to the inclusion in the Registration Statement on Form S-1 of Melt Pharmaceuticals, Inc., and any amendments thereto, and in the related Prospectus, of (i) a reference naming me as a person about to become a member of the Board of Directors of Melt Pharmaceuticals, Inc. and (ii) such other information regarding me as is required to be included therein under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Dated: September 21, 2022

/s/ Alison Bauerlein

Alison Bauerlein

EX-23.4

Exhibit 23.4

Consent of Director Nominee

I hereby consent to the inclusion in the Registration Statement on Form S-1 of Melt Pharmaceuticals, Inc., and any amendments thereto, and in the related Prospectus, of (i) a reference naming me as a person about to become a member of the Board of Directors of Melt Pharmaceuticals, Inc. and (ii) such other information regarding me as is required to be included therein under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Dated: September 21, 2022

/s/ Mark Baum

Mark Baum

EX-23.5

Exhibit 23.5

Consent of Director Nominee

I hereby consent to the inclusion in the Registration Statement on Form S-1 of Melt Pharmaceuticals, Inc., and any amendments thereto, and in the related Prospectus, of (i) a reference naming me as a person about to become a member of the Board of Directors of Melt Pharmaceuticals, Inc. and (ii) such other information regarding me as is required to be included therein under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Dated: September 21, 2022

/s/ Herman Williams

Herman Williams

EX-FILING FEES

Exhibit 107

Calculation of Filing Fee Tables

Form S-1

(Form Type)

Melt Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Table 1: Newly Registered and Carry Forward Securities

	Security Type	Security Class Title	Fee Calculation or Carry Forward Rule		Amount Registered		Proposed Maximum Offering Price Per Unit		Maximum Aggregate Offering Price(2)(3)		Fee Rate		Amount of Registration Fee(4)
	Newly Registered Securities
Fees to Be Paid	Equity	Common Stock, par value $0.001 per share(1)		457(o)		—		—	$	15,000,000.00		0.0000927	$	1,390.50
	Total Offering Amounts								$	15,000,000.00			$	1,390.50
	Total Fees Previously Paid													—
	Total Fee Offsets													—
	Net Fee Due												$	1,390.50

(1)	Pursuant to Rule 416, the shares of Common Stock being registered hereunder include such indeterminate number of additional shares of Common Stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions.
(2)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”).
(3)	Includes shares of our Common Stock which the underwriters have the option to purchase to cover over-allotments.
(4)	Calculated pursuant to Rule 457(o) under the Securities Act based on an estimate of the proposed maximum aggregate offering price of the shares of Common Stock registered hereunder to be sold by the Registrant.