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SEC Filings

S-3
SEELOS THERAPEUTICS, INC. filed this Form S-3 on 02/01/2019
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  • the perception of the biopharmaceutical industry by the public, legislatures, regulators and the investment community;
  • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by Seelos or Seelos' competitors;
  • disputes or other developments relating to proprietary rights, including patents, litigation matters and Seelos' ability to obtain patent protection for Seelos' licensed and owned technologies;
  • additions or departures of key scientific or management personnel;
  • changes in the market valuations of similar companies;
  • general economic and market conditions and overall fluctuations in the U.S. equity market;
  • sales of Seelos' common stock by Seelos or its stockholders in the future; and
  • trading volume of Seelos' common stock.

In addition, the stock market, in general, and small biopharmaceutical companies, in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of Seelos' common stock, regardless of Seelos' actual operating performance. Further, a decline in the financial markets and related factors beyond Seelos' control may cause Seelos' stock price to decline rapidly and unexpectedly.

An active trading market for Seelos' common stock may not be sustained, and you may not be able to resell your common stock at a desired market price.

If no active trading market for Seelos' common stock is sustained, you may be unable to sell your shares when you wish to sell them or at a price that you consider attractive or satisfactory. The lack of an active market may also adversely affect Seelos' ability to raise capital by selling securities in the future, or impair Seelos' ability to acquire or in- license other product candidates, businesses or technologies using Seelos' shares as consideration.

Seelos' management owns a significant percentage of Seelos' stock and will be able to exert significant control over matters subject to stockholder approval.

Dr. Mehra, Seelos' sole executive officer and a director, owns approximately 49.5% of Seelos' common stock. Therefore, Dr. Mehra will have the ability to influence Seelos through this ownership position.

This significant concentration of stock ownership may adversely affect the trading price for Seelos' common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. As a result, Dr. Mehra could significantly influence all matters requiring approval by Seelos' stockholders, including the election of directors and the approval of mergers or other business combination transactions. Dr. Mehra may be able to determine all matters requiring stockholder approval. The interests of these stockholders may not always coincide with Seelos' interests or the interests of other stockholders. This may also prevent or discourage unsolicited acquisition proposals or offers for Seelos' common stock that you may feel are in your best interests as one of Seelos' stockholders and he may act in a manner that advances his best interests and not necessarily those of other stockholders, including seeking a premium value for his common stock, and might affect the prevailing market price for Seelos' common stock.

Seelos' internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could have a material adverse effect on Seelos' business and share price.

Commencing with Seelos' Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Seelos' management will be required to report on the effectiveness of Seelos' internal control over financial reporting. The rules governing the standards that must be met for Seelos' management to assess Seelos' internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, Seelos may identify deficiencies or material weaknesses that Seelos may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, Seelos may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation in connection with the attestation provided by Seelos' independent registered public accounting firm. Failure to achieve and maintain an effective internal control environment could have a material adverse effect on Seelos' business, financial condition and results of operations and could limit Seelos' ability to report Seelos' financial results accurately and in a timely manner.

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