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general, could depress our stock price regardless of our business, prospects, financial conditions or results of operations.
Raising additional funds through debt or equity financing could be dilutive and may cause the market price of our common stock to decline.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of
equity offerings and debt financings, and
potentially through license and development agreements with strategic partnerships with third parties. To the extent that additional capital is raised through the sale of equity or convertible debt
securities, the issuance of those securities could result in substantial dilution for our current stockholders and the terms may include liquidation or other preferences that adversely affect the
rights of our current stockholders. Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common
stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. Moreover, the incurrence of debt financing could result in a substantial portion of
our operating cash flow being dedicated to the payment of principal and interest on such indebtedness and could impose restrictions on our operations, such as limitations on our ability to incur
additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
Additional funding may not be available to us on acceptable terms, or at all.
If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our common stock could decline.
The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about
us, our business, our markets and our competitors. We do not control these analysts. If securities analysts do not cover our common stock after the closing of this offering, the lack of research
coverage may adversely affect the market price of our common stock. Furthermore, if one or more of the analysts who do cover us downgrade our stock or if those analysts issue other unfavorable
commentary about us or our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility
in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing
customers and attract new customers.
The concentration of our capital stock ownership with insiders upon the closing of this offering will likely limit your ability to influence corporate matters.
We anticipate that our executive officers, directors, current 5% or greater stockholders, and their respective affiliates will together
beneficially own or control, in aggregate, approximately 65.9% of the shares of our outstanding common stock, after giving effect to the conversion of all outstanding preferred stock and assuming the
exercise of outstanding options and warrants following the closing of this offering (assuming no exercise of the underwriters' option to purchase additional shares). Assuming an initial offering price
of $13.00 per share, if our 5% or greater stockholders and their respective affiliates purchase all they have indicated an interest in purchasing in this offering, the number of shares of our common
stock beneficially owned by our executive officers, directors, current 5% or greater stockholders, and their respective affiliates will, in the aggregate, increase to 70.6% of our capital stock. As a
result, these executive officers, directors and principal stockholders, acting together, will have substantial influence over most matters that require approval by our stockholders, including the
election of directors, any merger, consolidation or sale of all or substantially all or of our assets or any other significant corporate transaction. Corporate action might
be taken even if other stockholders, including those who purchase shares in this offering, oppose such action. These stockholders may delay or prevent a change of control or otherwise discourage a
potential acquirer from attempting to obtain control of our company, even if such change of control would benefit our other stockholders. This concentration of stock ownership may