Delisting from the Nasdaq Capital Market would cause us to pursue eligibility for trading of
these securities on other markets or exchanges, or on the pink sheets. In such case, our stockholders ability to trade, or obtain quotations of the market value of our common stock would be severely limited because of lower trading
volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices of these securities. There can be no assurance that our securities, if delisted from the Nasdaq Capital Market in the future,
would be listed on a national securities exchange, a national quotation service, the over-the-counter markets or the pink sheets. Delisting from the Nasdaq Capital
Market, or even the issuance of a notice of potential delisting, would also result in negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of our securities, decrease securities
analysts coverage of us or diminish investor, supplier and employee confidence.
We may issue additional shares of common stock, warrants or
other securities to finance our growth.
We may finance the development of our product pipeline or generate additional working
capital through additional equity financing. Therefore, subject to the rules of the Nasdaq, we may issue additional shares of our common stock, warrants and other equity securities of equal or senior rank, with or without shareholder approval, in a
number of circumstances from time to time. The issuance by us of shares of our common stock, warrants or other equity securities of equal or senior rank will have the following effects:
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the proportionate ownership interest in us held by our existing shareholders will decrease;
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the relative voting strength of each previously outstanding share of common stock may be diminished; and
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the market price of our common stock may decline.
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In addition, if we issue shares of our common stock and/or warrants in a future offering (or, in the case of our common stock, the exercise of
outstanding warrants to purchase our common stock), it could be dilutive to our security holders.
Future sales of our common stock or warrants may
cause the market price of our securities to decline.
Sales of substantial amounts of shares of our common stock or warrants in the
public market, or the perception that these sales may occur, could adversely affect the price of our securities and impair our ability to raise capital through the sale of additional equity securities. As of November 7, 2019, we have
approximately 79.4 million shares of common stock outstanding, of which approximately 77.1 million shares of our outstanding common stock are freely tradable, or may become freely tradable, without restriction, in the public market unless
held by our affiliates, as defined under Rule 144 of the Securities Act of 1933, as amended (the Securities Act). Additionally, we have warrants to purchase approximately 30.3 million shares of our common stock
outstanding as of November 7, 2019. Approximately 30.0 million shares of common stock underlying the Warrants will be freely tradable upon exercise unless held by our affiliates.
We have registered 13,055,129 shares of our common stock as of November 7, 2019 that we may issue under our employee benefit plans. These
shares can be freely sold in the public market upon issuance, unless pursuant to their terms these stock awards have transfer restrictions attached to them. Additionally, pursuant to the 2014 Omnibus Incentive Plan (the 2014 Plan), our
management is authorized to grant stock options and other equity linked award to our employees, directors and consultants. The 2014 Plan provides that the number of shares available for future grant under our 2014 Plan will automatically increase on
January 1st each year, from January 1, 2015 through January 1, 2024, by an amount equal to four percent of all shares of our capital stock outstanding as of December 31st of the preceding calendar year, subject to the ability of
our board of directors to take action to reduce the size of such increase in any given year. Unless our board of directors elects not to increase the number of shares underlying our 2014 Plan each year, our stockholders may experience additional
dilution, which could cause our stock price to decline.
If shares of our common stock become subject to the penny stock rules, it would become more
difficult to trade them.
The SEC has adopted regulations which generally define a penny stock to be an equity security
that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions, including an exemption for any securities listed on a national securities exchange. The rules impose additional
sales practice requirements on broker-dealers for transactions involving penny stock, with some exceptions. If shares of our common stock were delisted from the Nasdaq Capital Market and determined to be penny stock,
broker-dealers may find it more difficult to trade such securities and investors may find it more difficult to acquire or dispose of such securities on the secondary market.
There can be no assurance that we will ever provide liquidity to our investors through a sale of our company.
While acquisitions of pharmaceutical companies like ours are not uncommon, potential investors are cautioned that no assurances can be given
that any form of merger, combination, or sale of our company will take place, or that any merger, combination, or sale, even if consummated, would provide liquidity or a profit for our investors. You should not invest in our company with the
expectation that we will be able to sell the business in order to provide liquidity or a profit for our investors.
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