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September 1, 2017
Gemphire Therapeutics Inc.
17199 N. Laurel Park Drive, Suite 401
Livonia, Michigan 48152
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Gemphire Therapeutics Inc., a Delaware corporation (the “Company”), in connection with a Registration Statement on Form S-3 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”). The Registration Statement relates to the registration of the offering by the Company of the following Securities (as defined below) of an aggregate indeterminate amount having an aggregate public offering price of up to $175 million, in each case, from time to time pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
1. shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), issuable pursuant to the base prospectus that forms a part of the Registration Statement (the “Base Prospectus Shares”);
2. shares of preferred stock, par value $0.001 per share, of the Company in one or more classes or series (the “Preferred Stock”);
3. debt securities, in one or more series (the “Debt Securities”), which may be issued pursuant to an indenture to be dated on or about the date of the first issuance of Debt Securities thereunder, by and between a trustee to be selected by the Company (the “Trustee”) and the Company (the “Indenture”);
4. warrants to purchase Common Stock, Preferred Stock, or Debt Securities (the “Warrants”), which may be issued under one or more warrant agreements and warrant certificates, to be dated on or about the date of the first issuance of the applicable Warrants thereunder, by and between a warrant agent to be selected by the Company (the “Warrant Agent”) and the Company (each, a “Warrant Agreement”);
5. subscription rights to purchase Common Stock, Preferred Stock or Debt Securities (the “Subscription Rights”), which may be issued under one or more subscription rights agreements (each, a “Subscription Rights Agreement”); and
6. shares of Common Stock issuable pursuant to the equity distribution agreement prospectus that forms a part of the Registration Statement covering the offering by the Company of shares of Common Stock of an aggregate indeterminate amount having an aggregate public offering price of up to $50 million that may be issued and sold under the Equity Distribution Agreement, dated September 1, 2017, between the Company and Piper Jaffray & Co. (such
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agreement, the “Equity Distribution Agreement” and such shares, the “Equity Distribution Agreement Shares” and, together with the Base Prospectus Shares, the Preferred Stock, the Debt Securities, the Warrants and the Subscription Rights, the “Securities”).
In connection with this opinion letter, we have examined and relied upon originals or copies of such records, documents, certificates, opinions, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. As to certain factual matters, we have relied upon a certificate of officers of the Company and have not independently sought to verify such matters.
In rendering the opinions in this opinion letter, we have assumed the genuineness and authenticity of all signatures on original documents; the authenticity of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; the accuracy, completeness and authenticity of certificates of public officials; and the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents. With respect to our opinions as to the Base Prospectus Shares and the Equity Distribution Agreement Shares, we have assumed that, at the time of issuance and sale, a sufficient number of shares of Common Stock will be authorized and available for issuance and that the consideration for the issuance and sale of the Common Stock (or the conversion price for Preferred Stock or Debt Securities convertible into Common Stock or the exercise price for Warrants or Subscription Rights exercisable for Common Stock) is in an amount that is not less than the par value of the Common Stock. With respect to our opinion as to the Preferred Stock, we have assumed that, at the time of issuance and sale, a sufficient number of shares of Preferred Stock will be authorized, designated and available for issuance and that the consideration for the issuance and sale of the Preferred Stock (or the conversion price for Debt Securities convertible into Preferred Stock or the exercise price for Warrants or Subscription Rights exercisable for Preferred Stock) is in an amount that is not less than the par value of the Preferred Stock. We have also assumed that any Warrants offered under the Registration Statement, and the related Warrant Agreement will be executed in the forms filed as exhibits to the Registration Statement or any required post-effective amendment thereto or incorporated by reference therein. We have also assumed that any Debt Securities offered under the Registration Statement will be issued pursuant to the form of Indenture filed as an exhibit to the Registration Statement or any required post-effective amendment thereto or incorporated by reference therein. We have also assumed that (i) with respect to Securities being issued upon conversion of any convertible Preferred Stock, the applicable convertible Preferred Stock will be duly authorized, validly issued, fully paid and nonassessable; and (ii) with respect to any Securities being issued upon conversion of any convertible Debt Securities or upon exercise of any Warrants or Subscription Rights, the applicable convertible Debt Securities, Warrants or Subscription Rights will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms.
With your consent, we have also assumed (i) that each of the Debt Securities, the Warrrants, the Indenture, the Warrant Agreements and the Subscription Rights Agreements governing such Securities (collectively, the “Documents”) will be governed by the internal laws of the State of New York, (ii) that each of the Documents has been or will be duly authorized, executed and delivered by the parties thereto, (iii) that each of the Documents constitutes or will constitute legally valid and binding obligations of the parties thereto other than the Company, enforceable against each of them in accordance with their respective terms and (iv) that the status of each of the Documents as legally valid and binding obligations of the parties will not be affected by any (a) breaches of, or defaults under, agreements or instruments, (b) violations of statutes, rules, regulations or court or governmental orders, or (c) failures to obtain required consents, approvals or authorizations from, or to make required registrations, declarations or filings with, governmental authorities.
Our opinions are subject to: (i) the effect of bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which a proceeding is brought; (iii) the invalidity under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; and (iv) we express no opinion as to (a) any provision for liquidated damages, default interest, late charges, monetary penalties, make-whole premiums or other economic remedies to the extent such provisions are deemed to constitute a penalty, (b) consents to, or restrictions upon, governing law, jurisdiction, venue, arbitration, remedies or judicial relief, (c) waivers of rights or defenses, (d) any provision requiring the payment of attorneys’ fees, where such payment is contrary to law or public policy, (e) any provision permitting, upon acceleration of any Debt Securities, collection of that portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon, (f) the creation, validity, attachment, perfection, or priority of any lien or security interest, (g) advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitation, trial by jury or at law, or other procedural rights, (h) waivers of broadly or vaguely stated rights, (i) provisions for exclusivity, election or cumulation of rights or remedies, (j) provisions authorizing or validating conclusive or discretionary determinations, (k) grants of setoff rights, (l) proxies, powers and trusts, (m) provisions prohibiting, restricting, or requiring consent to assignment or transfer of any right or property, (n) any provision to the extent it requires that a claim with respect to a security denominated in other than U.S. dollars (or a judgment in respect of such a claim) be converted into U.S. dollars at a rate of exchange at a particular date, to the extent applicable law otherwise provides, and (o) the severability, if invalid, of provisions to the foregoing effect.
With respect to the Equity Distribution Agreement Shares, we have assumed (i) that the specific sale of the Equity Distribution Agreement Shares will be duly authorized by the Board of Directors of the Company, a duly authorized committee thereof or a person or body pursuant to an authorization granted in accordance with Section 152 of the General Corporation Law of the State of Delaware (the DGCL”) and (ii) that no more than 5,186,721 Equity Distribution Agreement Shares will be sold at a price of not less than $9.64 per share, representing the last reported sale price of the Common Stock on the NASDAQ Global Market on August 31, 2017. With respect to the Equity Distribution Agreement Shares, we express no opinion to the extent that future issuances of securities of the Company and/or anti-dilution adjustments to outstanding securities of the Company cause the number of shares of Common Stock outstanding or issuable upon conversion or exercise of outstanding securities of the Company to exceed the number of Equity Distribution Agreement Shares then issuable under the Equity Distribution Agreement.
Our opinions herein are expressed solely with respect to (i) the federal laws of the United States; (ii) the Delaware General Corporation Law, as amended; and (iii) the laws of the State of New York. Our opinions are based on these laws as in effect on the date hereof. We express no opinion as to whether the laws of any jurisdiction are applicable to the subject matter hereof. We are not rendering any opinion as to compliance with any federal or state antifraud law, rule or regulation relating to securities, or to the sale or issuance thereof. It is understood that this opinion letter is to be used only in connection with the offer and sale of the Securities while the Registration Statement is in effect and only speaks as of the date of this opinion letter.
On the basis of the foregoing and in reliance thereon, and subject to the qualifications herein stated, we are of the opinion that:
1. The Base Prospectus Shares to be offered and sold by the Company under the Registration Statement, when issued and sold as contemplated in the Registration Statement, the related prospectus and any applicable prospectus supplement(s) and in accordance with any applicable duly authorized, executed and delivered purchase, underwriting or similar agreement, or upon conversion of any convertible Preferred Stock, or convertible Debt Securities in accordance with their terms, or upon exercise of any Warrants or Subscription Rights in accordance with their terms, will be validly issued, fully paid and nonassessable, provided that: (i) the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws; (ii) the issuance of the Base Prospectus Shares has been duly authorized by all necessary corporate action on the part of the Company; (iii) the issuance and sale of the Base Prospectus Shares do not violate any applicable law, are in conformity with the Company’s then operative Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Amended and Restated By-laws (the “Bylaws”), do not result in a default under or breach of any agreement or instrument binding upon the Company and comply with any applicable requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company; and (iv) the certificates for the Base Prospectus Shares have been duly executed by the Company, countersigned by the transfer agent therefor and duly delivered to the purchasers thereof against payment therefor.
2. The shares of the Preferred Stock to be offered and sold by the Company under the Registration Statement, when issued and sold as contemplated in the Registration Statement, the related prospectus and the applicable prospectus supplement(s) and in accordance with any applicable duly authorized, executed and delivered purchase, underwriting or similar agreement, or upon conversion of any convertible Debt Securities in accordance with their terms, or upon exercise of any Warrants or Subscription Rights in accordance with their terms, will be validly issued, fully paid and nonassessable, provided that: (i) the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws; (ii) the terms and issuance of the Preferred Stock have been duly authorized by all necessary corporate action on the part of the Company and any applicable amendment to the Company’s Certificate of Incorporation, including any certificate of designation, fixing the terms of such Preferred Stock has been filed with the State of Delaware; (iii) the terms of the shares of Preferred Stock and their issuance and sale do not violate any applicable law, are in conformity with the Certificate of Incorporation and Bylaws, do not result in a default under or breach of any agreement or instrument binding upon the Company and comply with any applicable requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (iv) the certificates for the Preferred Stock have been duly executed by the Company, countersigned by the transfer agent therefor and duly delivered to the purchasers thereof against payment therefor.
3. The Debt Securities to be issued under the Indenture and to be offered and sold by the Company under the Registration Statement, when issued and sold in accordance with the Indenture, the Registration Statement, the related prospectus and the applicable prospectus supplement(s), and any applicable duly authorized, executed and delivered purchase, underwriting or similar agreement, or upon exercise of any Warrants under the Warrant Agreement in accordance with their terms, will be valid and legally binding obligations of the Company, provided that: (i) the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws; (ii) the Indenture has been duly authorized by the Company and the Trustee by all necessary corporate action; (iii) the Indenture, in substantially the form filed as an exhibit to the Registration Statement or any required post-effective amendment thereto, has been duly executed and delivered by the Company and the Trustee and has been qualified under the Trust Indenture Act of 1939, as amended; (iv) the issuance, sale and terms of the Debt Securities have been duly authorized by the Company by all necessary corporate action; (v) the terms of the Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture and as described in the Registration Statement
and any required post-effective amendment thereto, the related prospectus and the applicable prospectus supplement(s), do not violate any applicable law, do not result in a default under or breach of any agreement or instrument binding upon the Company, are in conformity with the Certificate of Incorporation and Bylaws, and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (vi) notes, certificates or other evidence of the Debt Securities have been duly executed and delivered by the Company and authenticated by the Trustee pursuant to the Indenture and delivered to the purchasers thereof against payment therefor.
4. The Warrants to be issued under a Warrant Agreement and to be offered and sold by the Company under the Registration Statement, when issued and sold in accordance with the Warrant Agreement, the Registration Statement, the related prospectus and the applicable prospectus supplement(s) and any applicable duly authorized, executed and delivered purchase, underwriting or similar agreement, will be valid and legally binding obligations of the Company, provided that: (i) the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws; (ii) the Warrant Agreement has been duly authorized by the Company and the Warrant Agent by all necessary corporate action; (iii) the Warrant Agreement, in substantially the form filed as an exhibit to the Registration Statement or any required post-effective amendment thereto, has been duly executed and delivered by the Company and the Warrant Agent; (iv) the issuance, sale and terms of the Warrants have been duly authorized by the Company by all necessary corporate action; (v) the terms of the Warrants and of their issuance and sale have been duly established in conformity with the Warrant Agreement and as described in the Registration Statement and any required post-effective amendment thereto, the related prospectus and the applicable prospectus supplement(s), do not violate any applicable law and do not result in a default under or breach of any agreement or instrument binding upon the Company, are in conformity with the Certificate of Incorporation and Bylaws, and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (vi) the Warrants have been duly executed and delivered by the Company and authenticated by the Warrant Agent pursuant to the Warrant Agreement and delivered to the purchasers thereof against payment therefor.
5. The Subscription Rights to be issued under a Subscription Rights Agreement and to be offered and sold by the Company under the Registration Statement, when issued and sold in accordance with a Subscription Rights Agreement, the Registration Statement, the related prospectus and the applicable prospectus supplement(s) and any applicable duly authorized, executed and delivered purchase, underwriting or similar agreement, will be valid and legally binding obligations of the Company, provided that: (i) the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws; (ii) the Subscription
Rights Agreement has been duly authorized by the Company by all necessary corporate action; (iii) the Subscription Rights Agreement, in substantially the form filed as an exhibit to the Registration Statement or any required post-effective amendment thereto, has been duly executed and delivered by the Company; (iv) the issuance and terms of the Subscription Rights have been duly authorized by the Company by all necessary corporate action; (v) the terms of the Subscription Rights and of their issuance have been duly established in conformity with the Subscription Rights Agreement and as described in the Registration Statement and any required post-effective amendment thereto, the related prospectus and the applicable prospectus supplement(s), do not violate any applicable law and do not result in a default under or breach of any agreement or instrument binding upon the Company, are in conformity with the Certificate of Incorporation and Bylaws, and comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (vi) the Subscription Rights have been duly executed and delivered by the Company pursuant to the Subscription Rights Agreement and delivered to the purchasers thereof against payment therefor.
6. The Equity Distribution Agreement Shares, when issued and sold in accordance with the Equity Distribution Agreement, the Registration Statement, the related prospectus and any applicable prospectus supplement(s), will be duly authorized, validly issued, fully paid and nonassessable, provided that the Registration Statement and any required post-effective amendment thereto have all become effective under the Securities Act and the related prospectus and any and all applicable prospectus supplement(s) required by applicable laws have been delivered and filed as required by such laws.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus included in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations promulgated thereunder by the Commission. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.
| Very truly yours, |
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| /s/ Honigman Miller Schwartz and Cohn LLP |
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| HONIGMAN MILLER SCHWARTZ AND COHN LLP |
PDT/MZE/GLS/REW/MSB