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SEC Filings

424B3
PROTEON THERAPEUTICS INC filed this Form 424B3 on 08/21/2017
Entire Document
 
 

 

RISK FACTORS

 

An investment in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below and under “Risk Factors” in the applicable prospectus supplement and in our most recent Annual Report on Form 10-K, and in our updates to those Risk Factors in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K following the most recent Form 10-K, and in all other information appearing in this prospectus or incorporated by reference into this prospectus and any applicable prospectus supplement. The material risks and uncertainties that management believes affect us will be described in those documents. In addition to those risk factors, there may be additional risks and uncertainties of which management is not aware or focused on or that management deems immaterial. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment. This prospectus is qualified in its entirety by these risk factors.

 

Additional Risks Relating to This Offering and Our Common Stock

 

The sale of a substantial amount of our common stock, including resale of the shares of common stock issuable upon the conversion of the Series A Preferred Stock acquired in the Transaction, in the public market after this offering could adversely affect the prevailing market price of our common stock and cause stockholders to experience dilution.

 

We have outstanding an aggregate of 17,619,418 shares of our common stock as of August 11, 2017. We have received stockholder approval for the Transaction and, therefore, the outstanding shares of Series A Preferred Stock are convertible into our common stock at each Investor’s election, subject to the Blocker. The Series A Preferred Stock is convertible into an aggregate of 22,112,775 shares of common stock, subject to adjustment as provided in the Certificate of Designation. Pursuant to the registration rights granted in the Transaction, we agreed to register the resale by the selling stockholders named herein of these shares of common stock. Upon such registration, these shares will become generally available for immediate resale, subject to the Blocker. Sales of substantial amounts of shares of our common stock in the public market, or the perception that such sales might occur, could adversely affect the market price of our common stock, and the market value of our other securities, and could result in substantial dilution to shareholders who held our common stock prior to the Transaction. In addition, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a future financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

 

A substantial number of shares of common stock are being offered by this prospectus, and we cannot predict if and when the purchasers may sell such shares in the public markets. In addition, certain holders of our common shares have additional rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We have also registered the offer and sale of all shares of common stock that we may issue under our equity compensation plans. Furthermore, in the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

 

Our share price may be volatile, which could subject us to securities class action litigation and our stockholders could incur substantial losses.

 

The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

 

  · actual or anticipated fluctuations in our financial condition and operating results;

  · actual or anticipated changes in our growth rate relative to our competitors;

  · failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

  · failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

  · issuance of new or updated research or reports by securities analysts;

  · fluctuations in the valuation of companies perceived by investors to be comparable to us;

  · additions or departures of key management or other personnel;

  · disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

  · disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

  · announcement or expectation of additional debt or equity financing efforts;

  · sales of our common stock by us, our insiders or our other stockholders; and

  · general economic and market conditions.

 

These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, the stock market in general, and NASDAQ and emerging growth companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. In the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If in the future any of our stockholders brought a lawsuit against us, we could incur significant legal expenses, settlement costs or damage awards that are not covered by, or exceed the limits of, our available directors’ and officers’ liability insurance, which could adversely impact our financial condition, results of operations or cash flows. Such a lawsuit could also divert the time and attention of our management.

 

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