We are required to meet the Nasdaq Capital Markets continued listing requirements and other
Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock.
We are required to meet the continued listing requirements of the Nasdaq Capital Market and other Nasdaq rules, including those regarding
director independence and independent committee requirements, minimum stockholders equity, minimum share price and certain other corporate governance requirements. In particular, we are required to maintain a minimum bid price for our listed
common stock of $1.00 per share. If we do not meet these continued listing requirements, our common stock could be delisted. On February 20, 2019, we received a letter from The Nasdaq Stock Market LLC (Nasdaq) indicating that, for
the last thirty consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). In accordance with
Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial period of 180 calendar days, or until August 19, 2019, to regain compliance. The letter states that the Nasdaq staff will provide written notification that we have
achieved compliance with Rule 5550(a)(2) if at any time before August 19, 2019, the bid price of our common stock closes at $1.00 per share or more for a minimum of ten consecutive business days. The letter has no immediate effect on
the listing or trading of our common stock. 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:
|
|
|
the proportionate ownership interest in us held by our existing shareholders will decrease;
|
|
|
|
the relative voting strength of each previously outstanding share of common stock may be diminished; and
|
|
|
|
the market price of our common stock may decline.
|
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 May 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 31.0 million shares of our common stock outstanding as
of May 7, 2019. Approximately 30.6 million shares of common stock underlying the Warrants will be freely tradable upon exercise unless held by our affiliates.
We have registered 9,878,747 shares of our common stock as of May 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.
49