Item 1A. Risk Factors
ITEM 1A.
RISK FACTORS
 
As of the date of this Quarterly Report, there have been no material changes to our risk factors previously disclosed in our Annual Report and our subsequent quarterly reports on Form 10-Q, except as set forth below:
 
Our strategic review process may not result in entering into or completing a transaction, and the process of reviewing strategic alternatives or its conclusion could adversely affect our stock price.
 
We have initiated a process to review strategic alternatives with the goal of enhancing shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of our company, a merger, acquisition or other business combination, a strategic partnership with one or more parties, the licensing, sale or divestiture of some of our proprietary technologies, or a variety of other potential opportunities. We are actively working with an investment bank in this assessment process, Additionally, as part of this process, we are actively seeking a partner for the further development of TSC.
 
There can be no assurance any transaction will result from the Company’s evaluation. Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to us or third parties in a potential transaction with us on reasonable terms. The process of reviewing strategic alternatives may be time consuming and may involve the dedication of significant resources and may require us to incur significant costs and expenses. It could negatively impact our ability to attract, retain and motivate key employees, and expose us to potential litigation in connection with this process or any resulting transaction. If we are unable to effectively manage the process, our financial condition and results of operations could be adversely affected. In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our company could cause our stock price to fluctuate significantly. Further, any strategic alternative that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance shareholder value. There can be no guarantee that the process of evaluating strategic alternatives will result in our company entering into or completing a potential transaction within the anticipated timing or at all.
 
Our Business could be negatively affected as a result of a proxy contest.
 
As announced on November 14, 2022, certain entities affiliated with LifeSci Capital ("LifeSci”) have nominated seven individuals for election to our Board at our upcoming 2022 annual meeting of stockholders. If LifeSci does not withdraw its nominations and the proxy contest continues, our business could be adversely affected because, among other things:
 
 
•
responding to a proxy contest can be disruptive, costly and time-consuming, and divert the attention of our management, Board and employees;
 
•
perceived uncertainties as to future direction, including, but not limited to, uncertainties related to our the composition of our Board and management team may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel or other business partners; and
 
•
if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to continue to effectively implement our business strategy and create additional value for our stockholders.
 
Additional actions taken by activist stockholders could be disruptive and costly and may conflict with or disrupt the strategic direction of our business.
 
Particularly following our recent announcement of our ongoing strategic review process, activist stockholders may from time to time attempt to effect changes in our strategic direction and seek changes regarding the Company’s corporate governance or structure. Our Board and management team strive to maintain constructive, ongoing communications with all stockholders who wish to speak with us, including activist stockholders, and welcome their views and opinions with the goal of working together constructively to enhance value for all stockholders. However, activist campaigns that contest, or conflict with, our strategic direction could have an adverse effect on the Company or our business. For example, responding to actions by activist stockholders can disrupt our operations, be costly and time consuming, and divert the attention of our Board and senior management from the pursuit of our business strategies. Furthermore, perceived uncertainties as to our future direction may cause (i) instability or lack of continuity, which may be exploited by our competitors, (ii) concern on the part of current or potential collaborators, (iii) loss of business opportunities, and (iv) difficulties in attracting and retaining qualified personnel and business partners. Activist campaigns may also cause significant fluctuations in our stock price based on temporary or speculative market perceptions, or other factors that do not necessarily reflect the fundamental underlying value of our businesses.
 
25
 
 
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.