Risks Related to Our Common Stock
We are an “emerging growth
company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our
Common Stock may be less attractive to investors.
We are an “emerging
growth company,” or EGC, as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not EGCs, including: not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved.
We may take advantage
of these reporting exemptions until we are no longer an EGC. We will remain an EGC until the earlier of (1) the last day of the
fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of
at least $1 billion, or (c) 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 exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more
than $1 billion in non-convertible debt during the prior three-year period.
We cannot predict whether
investors will find our Common Stock less attractive if we 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.
In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised
accounting standards. This allows an EGC to delay the adoption of these accounting standards until they would otherwise apply to
private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the
same new or revised accounting standards as other public companies that are not EGCs.
Even after we no longer
qualify as an EGC, we may still qualify as a “smaller reporting company” which would allow us to take advantage of
many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements. We cannot predict if investors will find our Common Stock less attractive because 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.
The market price for our Common Stock
may be volatile, which could contribute to the loss of your investment.
Fluctuations in the
price of our Common Stock could contribute to the loss of all or part of your investment. Prior to our IPO, there was no public
market for our Common Stock. We are now listed on NASDAQ, but we cannot predict the extent to which investor interest in our Company
will lead to the development of or sustain an active trading market on NASDAQ or otherwise or how liquid that market might become.
If an active trading market for our Common Stock does not develop or is not sustained, the market price and liquidity of our Common
Stock will be materially and adversely affected and it may be difficult for stockholders to sell their shares of Common Stock at
prices that are attractive to them, or at all. Further, an inactive market may also impair our ability to raise capital by selling
shares of our Common Stock.
If an active market
for our Common Stock develops and continues, the trading price of our Common Stock is likely to be highly volatile and could be
subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below
could have a material adverse effect the price of our Common Stock and stockholders may also be unable to sell their shares of
Common Stock at prices that are attractive to them due to fluctuations in the market price of our Common Stock. In such circumstances
the trading price of our Common Stock may not recover and may experience a further decline.
Factors affecting the trading
price of our Common Stock may include:
||our failure to develop and commercialize vonapanitase or any additional product candidates;|
||actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;|
||changes in the market’s expectations about our operating results;|
||adverse results or delays in preclinical studies or clinical trials;|
||our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;|
||adverse regulatory decisions, including failure to receive regulatory approval for vonapanitase or any additional product candidates;|
||success of competitive products;|