What changed in this filing

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Item 1A. Risk Factors

2020-11-02 compared with 2020-08-05 · 47 added, 60 removed, 706 unchanged (13% of the section changed)

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Risks Related to Our Business and Financial Condition

We expect the clinical development of AB201 will require substantially more capital to complete, and we cannot guarantee when or if we will be able to secure such additional financing.

We plan to initiate a Phase 2 clinical trial for AB201 .

However, we do not know the definitive design of the clinical development plan for AB201, including the number of trials or patients that may be required to obtain regulatory approval, potential comparator drugs to be tested against AB201 or other factors impacting clinical trial design.

We believe our current capital will allow us to begin pre-trial preparations, such as clinical study drug, site selection, and contract research organization, or CRO, selection and to initiate patient enrollment.

We expect to need to raise significant additional capital to complete the clinical development plan.

As a result, we may need to secure additional financing in order to complete development of AB201 .

If we are not able to obtain financing in the future or on acceptable terms, we may not be able to complete the clinical development of AB201.

As a result, our ability to complete development of AB201 in our clinical development plan is largely contingent on our ability to secure substantial additional financing in the future.

If we encounter difficulties enrolling patients in our planned clinical trial of AB201, any potential enrollment milestones or potential regulatory approvals could be delayed or otherwise adversely affected.

We may encounter difficulty enrolling a sufficient number of patients in the trial, due to circumstances which are outside our control, including improvements in the COVID-19 pandemic resulting from the development of vaccines and therapies that limit the availability of study participants.

We may encounter difficulty enrolling a sufficient number of patients in the trial, due to circumstances which are outside our control, including improvements in the COVID-19 pandemic resulting from the development of vaccines and therapies, as well as capacity constraints at potential COVID-19 clinical trial sites, that may limit the availability of study participants.

As a result, we may need to delay or terminate our trial, which would have a negative impact on our business.

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In addition, administering AB201 to humans may produce undesirable side effects.

These side effects could interrupt, delay or halt clinical trials of AB201 and could result in the FDA or other regulatory authorities denying approval of AB201 for any or all targeted indications.

We may not achieve our projected development goals in the time frames we announce a nd expect.

We set goals for, and make public statements regarding, the timing of certain accomplishments, such as the planned submission of an IND application for AB201 as a potential treatment for COVID-19 with the FDA, initiation of our planned clinical trial of AB201, the duration of the planned AB201 clinical trial, the steps for commencing and continuing our clinical trials, the disclosure of trial results, the obtainment of regulatory approval and the sale of drug products, which we sometimes refer to as milestones.

These milestones may not be achieved, and the actual timing of these events can vary dramatically due to a number of factors such as FDA’s rejection of our IND application, delays or failures in our clinical trials, disagreements with any collaborative partners, the uncertainties inherent in the regulatory approval process and manufacturing scale-up, delays in achieving manufacturing or marketing arrangements sufficient to commercialize our products or our inability to obtain sufficient financing in a timely manner.

These side effects could inte rrupt, delay or halt clinical trials of AB201 and could result in the FDA or other regulatory authorities denying approval of AB201 for any or all targeted indications.

We may not achieve our projected development goals in the time frames we announce and expect.

We set goals for, and make public statements regarding, the timing of certain accomplishments, such as the initiation of our planned clinical trial of AB201, the duration of the planned AB201 Phase 2b clinical trial, the steps for commencing and continuing our clinical trials, the disclosure of trial results, the obtainment of regulatory approval and the sale of drug products, which we sometimes refer to as milestones.

These milestones may not be achieved, and the actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our clinical trials, disagreements with any collaborative partners, the uncertainties inherent in the regulatory approval process and manufacturing scale-up, delays in achieving manufacturing or marketing arrangements sufficient to commercialize our products or our inability to obtain sufficient financing in a timely manner.

There can be no assurance that we will make regulatory submissions or receive regulatory approvals as planned.

If we fail to achieve one or more of these milestones as planned, our business will be materially adversely affected.

We expect the PRECISION-AF clinical trial will require substantially more capital to complete, and we cannot guarantee when or if we will be able to secure such additional financing.

We have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic.

We initially estimated that enrollment in PRECISION-AF would start in 2021;

however, any initiation of the trial will depend on receiving additional funding and an abatement of the COVID-19 pandemic among other factors, this estimate is subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic and the availability of patients for non-COVID-19 related trials.

As a result, we will need to secure additional financing in order to initiate enrollment of our Phase 3 PRECISION-AF clinical trial.

We expect the PRECISION-AF clinical trial will require substantially more capital to complete, and we cannot guarantee when or if we will b e able to secure such additional financing.

We have put the potential initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic and prioritizing the development of AB201.

Initiation of the PRECISION-AF clinical trial will depend on receiving additional funding and an abatement of the COVID-19 pandemic and the uncertainties of the availability of patients for non-COVID-19 related trials.

We will need to secure additional financing in order to initiate enrollment of our Phase 3 PRECISION-AF clinical trial.

Even if we can begin enrolling patients, we expect to have to raise significant additional capital to continue enrollment.

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If we are delayed in obtaining funding or are unable to complete a strategic transaction, we may discontinue our development activities on AB201, Gencaro and our other product candidates or discontinue our operations.

Even if we are able to fund continued development and AB201, Gencaro or any of our other product candidates is approved, we expect that we will need to complete a strategic transaction or raise substantial additional funding through public or private equity or debt securities to successfully commercialize AB201, Gencaro or any other product candidate.

We believe our cash and cash equivalents balance as of June 30, 2020, together with $24.1 million of net proceeds raised from July 1, 2020 through July 31, 2020 from sales of our common stock, will be sufficient to fund our operations at our current cost structure plus projected costs for the AB201 clinical development program, through the end of the fourth quarter of 2021 .

Even if we are able to fund continued development of AB201, Gencaro or any of our other product candidates is approved, we expect that we will need to complete a strategic transaction or raise substantial additional funding through public or private equity or debt securities to successfully commercialize AB201, Gencaro or any other product candidate.

We believe our cash and cash equivalents balance as of September 30, 2020 will be sufficient to fund our operations through 2022, including the projected costs for the AB201 Phase 2b clinical trial.

In 2017, we entered into a sales agreement with an agent to sell, from time to time, our common stock pursuant to which we have sold an aggregate of 3,302,159 shares of our common stock, for aggregate gross proceeds of approximately $32.3 million.

Net proceeds received in this offering were approximately $30.7 million, after deducting initial expenses for executing the “at the market offering” and commissions paid to the placement agent.

On July 22, 2020, we entered into a new sales agreement, with an agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of July 31, 2020, we had sold an aggregate of 1,423,413 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $10.1 million.

On July 22, 2020, we entered into a new sales agreement, with an agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of October 31, 2020, we had sold an aggregate of 4,839,599 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $28.9 million.

Net proceeds received in this offering were approximately $28.0 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

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This outbreak is causing major disruptions to businesses and markets worldwide as the virus spreads.

The economic uncertainty surrounding the CO VID-19 pandemic may dramatically reduce our ability to secure equity or debt financing necessary to support our operations.

The economic uncertainty surrounding the COVID-19 pandemic may dramatically reduce our ability to secure equity or debt financing necessary to support our operations.

We are unable to currently estimate the financial effect of the pandemic.

If the pandemic continues to be a severe worldwide crisis, economic conditions may cause capital not to be available to us, or not be available on acceptable terms, regardless of our business efforts.

We have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic and prioritizing th e development of AB201 .

We estimate that enrollment in PRECISION-AF will start in 2021, subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic , the availability of patients for non-COVID-19 related trials and obtaining addition al financing .

We have put the potential initiation of the PRECISION-AF clinical trial on hold due to the ongoing COVID-19 pandemic and prioritizing the development of AB201.

Our liquidity , and our ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following:

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As of December 31, 2019, our management and our independent registered public accounting firm concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt existed as to our ability to continue as a going concern for a period from one year after our annual financial statements had been issued.

However, we believe our cash and cash equivalents balance as of June 30, 2020, together with the net proceeds of $24.1 million raised from July 1, 2020 through July 31, 2020 from sales of our common stock, will be sufficient to fund our operations at our current cost structure plus projected costs for the AB201 clinical development program, through the end of the fourth quarter of 2021 .

However, we believe our cash and cash equivalents balance as of September 30, 2020 will be sufficient to fund our operations through 2022, including the projected costs for the AB201 Phase 2b clinical trial.

We cannot be certain that we will be able to make any other sale of our common stock in any future offering to cover our future capital needs, or at all.

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We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate.

We may be forced to reduce our ope rating expenses and raise additional funds to meet our working capital needs, principally through the additional sales of our securities or debt financings.

We may be forced to reduce our operating expenses and raise additional funds to meet our working capital needs, principally through the additional sales of our securities or debt financings.

However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to us.

If we are unable to raise sufficient additional capital or complete a strategic transaction, we may be unable to continue to fund our operations, develop AB201, Gencaro or o ur other product candidates, or realize value from our assets and discharge our liabilities in the normal course of business.

If we are unable to raise sufficient additional capital or complete a strategic transaction, we may be unable to continue to fund our operations, develop AB201, Gencaro or our other product candidates, or realize value from our assets and discharge our liabilities in the normal course of business.

If we cannot raise sufficient funds, we may have to liquidate our assets, and might realize significantly less than the values at which they are carried on our financial statements, and stockholders may lose all or part of their investment in our securities.

If we are not able to successfully develop, obtain FDA approval for, and provide for the commercialization of AB201 or Gencaro in a timely manner, we may not be able to continue our business operations.

We currently have no products that have received regulatory approval for commercial sale.

The process to develop, obtain regulatory approval for and commercialize potential product candidates is long, complex and costly.

Furthermore, we do not yet have a complete development plan for AB201 that has been harmonized with FDA guidance, including details with respect to the number of trials, patients or trial design.

Failure to demonstrate that a product candidate, including AB201 or Gencaro, is safe and effective, or significant delays in demonstrating such safety and efficacy, would adversely affect our business.

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In each of 2012, 2015 and 2018, we received notification from Nasdaq of potential delisting of our shares from the Nasdaq Capital Market because the closing bid price of our common stock had not met the minimum closing bid price of $1.00 per share during the preceding 30 business days.

We subsequently regained compliance with Nasdaq’s minimum closing bid price requirements related to the 2012, 2015 and 2018 notices, by effecting a 1‑for‑6 reverse split of our common stock in March 2013, a 1‑for‑7 reverse split of our common stock in September 2015 and a 1-for-18 reverse split of our common stock in April 2019.

Despite effecting a 1-for-18 reverse split of our common stock in April 2019, there can be no assurance that the market price per share of our common stock will remain in excess of the $1.00 minimum bid price for a sustained period of time.

The continuing effect of our reverse stock split on the market price of our common stock cannot be predicted with any certainty, and the history of similar stock split combinations for companies in like circumstances is varied.

It is possible that the per share price of our common stock after the reverse stock split will not rise in proportion to the reduction in the number of shares of common stock outstanding resulting from the reverse stock split, effectively reducing our market capitalization, and there can be no assurance that the market price per post-reverse split share will either exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time.

We subsequently regained compliance with Nasdaq’s minimum closing bid price requirements r elated to the 2012, 2015 and 2018 notices, by effecting a 1 ‑for ‑6 reverse split of our common stock in March 2013, a 1 ‑for ‑7 reverse split of our common stock in September 2015 and a 1-for-18 reverse split of our common stock in April 2019.

Despite effecti ng a 1-for-18 reverse split of our common stock in April 2019, there can be no assurance that the market price per share of our common stock will remain in excess of the $1.00 minimum bid price for a sustained period of time.

The continuing effect of our r everse stock split on the market price of our common stock cannot be predicted with any certainty, and the history of similar stock split combinations for companies in like circumstances is varied.

It is possible that the per share price of our common stoc k after the reverse stock split will not rise in proportion to the reduction in the number of shares of common stock outstanding resulting from the reverse stock split, effectively reducing our market capitalization, and there can be no assurance that the market price per post-reverse split share will either exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time.

The market price of our common stock may vary based on other factors that are unrelated to the number of shares outstanding, including our future performance.

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In future periods, if we do not meet the minimum stockholders’ equity, minimum closing bid price requirements, or any other listing requirements, we would be subject to delisting from the Nasdaq Capital Market.

As of August 4, 2020, the closing price of our common stock was $6.78 per share, and the total market value of our listed securities was approximately $41.0 million.

As of June 30, 2020, we had stockholders’ equity of $10.3 million.

As of October 30, 2020, the closing price of our common stock was $3.85 per share, and the total market value of our listed securities was approximately $35.9 million.

As of September 30, 2020, we had stockholders’ equity of $50.5 million.

Our business could be adversely affected by the effects of health epidemics, including the ongoing COVID-19 global pandemic, in regions where we or third parties on which we rely may have clinical trial sites or other business operations.

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Delays in enrolling patients in any future clinical trials would also adversely affect our ability to generate any product, milestone and royalty revenues under collaboration agreements, if any, and could impose significant additional costs on us or on any future collaborators.

We do not yet know the details of the clinical development program for AB201, including the number of patients that will be needed.

Development beyond our control may impact our ability to enroll patients in an AB201 clinical trial, such as the development of vaccines for the SARS-CoV-2 virus or the development of other therapies for COVID-19 disease.

The GENETIC-AF clinical trial required that we identify and enroll a large number of patients with the condition under investigation and the trial enrolled only those patients having a specific genotype, and certain patients who have or are willing to have a Medtronic device implanted for monitoring and recording AFB data.

As a result, enrollment for GENETIC-AF was slower than expected, with our first patient enrolled in June 2014 and enrollment completed in August 2017.

Development beyond our control may impact our ability to enroll patients in an AB201 Phase 2b clinical trial, such as the development of vaccines for the SARS-CoV-2 virus or the development of other therapies for COVID-19 disease.

The GENETIC-AF clinical trial required that we identify and enroll a large number of patients with the condition under investigatio n and the trial enrolled only those patients having a specific genotype, and certain patients who have or are willing to have a Medtronic device implanted for monitoring and recording AFB data.

As a result, enrollment for GENETIC-AF was slower than expecte d, with our first patient enrolled in June 2014 and enrollment completed in August 2017.

Because of the rigorous enrollment criteria, our clinical trial timelines were delayed from our original projections.

We anticipate that any future Phase 3 clinical trial of Gencaro, including PRECISION-AF, may have similar enrollment criteria, and we cannot guarantee that we will not have similar enrollment issues in any future clinical trials.

We anticipate that any future Phase 3 clinical tr ial of Gencaro, including PRECISION-AF, may have similar enrollment criteria, and we cannot guarantee that we will not have similar enrollment issues in any future clinical trials .

We may also encounter difficulty enrolling a sufficient number of patients in any future clinical trial, due to circumstances which are outside our control, including as a result of the ongoing COVID-19 pandemic.

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These side effects could interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory authorities denying approval of our product candidates for any or all targeted indications.

If clinical trials for a product candidate are unsuccessful, we will be unabl e to commercialize the product candidate.

If clinical trials for a product candidate are unsuccessful, we will be unable to commercialize the product candidate.

If one or more of our clinical trials are delayed, we will be unable to meet our anticipated development timelines.

Either circumstance could cause the market price of our common stock to decline.

We will rely on contract research organizations to conduct substantial portions of our clinical trials, including any future clinical trial of AB201 or Gencaro, and as a result, we will be unable to directly control the timing, conduct and expense of all aspects of our clinical trials.

We will rely on contract research organizations to conduct substantial portions of our clinical trials, including any future clinical trial of AB201 or Gencaro, and as a re sult, we will be unable to directly control the timing, conduct and expense of all aspects of our clinical trials.

We do not currently have sufficient staff with the requisite experience to conduct our clinical trials and therefore will rely on third parties to conduct certain aspects of any future clinical trials.

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For instance, we previously planned to initiate PRECISION-AF in the first quarter of 2020 but have put initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic.

We estimate that enrollment in PRECISION-AF will start in 2021, subject to further delays due to the uncertainties of the ongoing COVID-19 pandemic, the availability of patients for non-COVID-19 related trials and obtaining additional financing.

For instance, we previously planned to initiate PRECISION-AF in the first quarter of 2020 but have put the potential initiation of the PRECISION-AF trial on hold due to the ongoing COVID-19 pandemic, the availability of patients for non-COVID-19 related trials and obtaining additional financing.

We cannot guarantee if we will be able to secure such financing in order to initiate PRECISION-AF in a timely fashion.

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Our ability to benefit from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements .

Collaborations involving our product candidates po se the following risks to us:

Collaborations involving our product candidates pose the following risks to us:

collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

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If regulatory clearance or approval is delayed, or if one or more third-party diagnostic services providers are unable to obtain FDA approval of the genetic test at all or in parallel with the approval of Gencaro, or are unable to commercialize the test successfully and in a manner that effectively supports the commercial efforts for Gencaro, or if the information concerning the differential response to Gencaro resulting from certain genetic variation is not included in the approval label for Gencaro, the commercial launch of Gencaro may be significantly and adversely affected.

Regulatory approval is required for the genetic test to be used in our Gencaro clinical trials and to support the co mmercialization of the test, if approved.

Delays or failures in obtaining such regulatory approval, including any required validation analyses may prevent a third-party diagnostics provider from commercializing such genetic test and will adversely affect o ur business, operating results and prospects.

Regulatory approval is required for the genetic test to be used in our Gencaro clinical trials and to support the commercialization of the test, if approved.

Delays or failures in obtaining such regulator y approval, including any required validation analyses may prevent a third-party diagnostics provider from commercializing such genetic test and will adversely affect our business, operating results and prospects.

Before a genetic test can be used commercially, including in conjunction with Gencaro, if it is approved for marketing, the third-party diagnostics provider must obtain FDA Premarket Approval, or PMA, for such test.

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Under Nasdaq rules, an offering of more than 20% of our total shares outstanding at a price per share less than (i) the closing price of our common stock on the Nasdaq Capital Market immediately preceding the signing of the binding agreement, or (ii) the average closing price of our common stock on the Nasdaq Capital Market for the five trading days immediately preceding the signing of the binding agreement requires stockholder approval unless the offering qualifies as a “public offering” for purposes of the Nasdaq rules.

As of June 30, 2020, we had approximately 2.3 million shares of common stock outstanding, 20% of which is approximately 454,000 shares.

As of September 30, 2020, we had approximately 9.3 million shares of common stock outstanding, 20% of which is approximately 1.9 million shares.

SEC rules impose restrictions on certain companies’ ability to raise funds through the registered offering of securities pursuant to a “shelf” registration statement on Form S-3.

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Our failure to adequately demonstrate the safety and efficacy of our product candidates will prevent regulatory approval and commercialization of such products.

We do not yet have guidance from FDA on a development program for AB201, so we do not yet know what FDA will require in terms of a clinical development plan, including trial design and number of patients and trials needed for the successful development of AB201.

In 2008, we submitted and the FDA accepted our NDA filing for Gencaro for the treatment of chronic HF.

In 2009, the FDA issued a Complete Response Letter, or CRL, in which the FDA stated that it could not approve the Gencaro NDA in its current form and specified actions required for approval of the NDA, including conducting an additional Phase 3 clinical trial of Gencaro in patients with HF.

In 2008, we submitted and the FDA accepted our NDA filing for Gencaro for the tre atment of chronic HF.

In 2009, the FDA issued a Complete Response Letter, or CRL, in which the FDA stated that it could not approve the Gencaro NDA in its current form and specified actions required for approval of the NDA, including conducting an addition al Phase 3 clinical trial of Gencaro in patients with HF.

We completed a Phase 2B clinical study of Gencaro in HF patients to assess its efficacy in reducing or preventing AF.

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Any new taxes could adversely affect our domestic and international business operations, and our business and financial performance.

Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or app lied adversely to us.

Further, existing tax laws, statutes, rules, regulations or ordinances could be interp reted, changed, modified or applied adversely to us.

For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, significantly revised the Internal Revenue Code of 1986, as amended, or the Code.

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protection legislation, may also apply to health-related and other personal information obtained outside of the United States.

These laws impose strict obligations on the ability to process health-related and other personal information of data subjects in the European Union and the United Kingdom, including in relation to use, collection, analysis, and transfer (including cross-border transfer) of such personal information .

These laws include several requirements relating to the consent of the individuals to whom the personal data relates, limitations on data processing, establishing a legal basis for processing, notification of data processing obligations or security incid ents to appropriate data protection authorities or data subjects, the security and confidentiality of the personal data and various rights that data subjects may exercise.

These laws impose strict obligations on the ability to process health-related and other personal information of data subjects in the European Union and the United Kingdom, including in relation t o use, collection, analysis, and transfer (including cross-border transfer) of such personal information.

These laws include several requirements relating to the consent of the individuals to whom the personal data relates, limitations on data processing, establishing a legal basis for processing, notification of data processing obligations or security incidents to appropriate data protection authorities or data subjects, the security and confidentiality of the personal data and various rights that data sub jects may exercise.

The Directive and the GDPR prohibit, without an appropriate legal basis, the transfer of personal data to countries outside of the European Economic Area, or EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection.

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for 12 years from approval, under FDA law and regulations governing biologics license applications.

However, another competitor could a compound with similar biological properties to AB201 that may not be barred by our exclusivity.

However, another competitor could develop a compound with similar biological properties to AB201 that may not be barred by our exclusivity.

We have also filed a provisional patent application for AB201 and its use for COVID-19 disease, but there is no assurance that this provisional application will ultimately result in an issued patent.

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All of these factors may affect our competitive position.

If the manufacture, use or sale of our products infringe on the intellectual property rights of others, we could face costly litigation, which could cause us to pay su bstantial damages or licensing fees and limit our ability to sell some or all of our products.

If the manufacture, use or sale of our products infringe on the intellectual property rights of others, we could face costly litigation, which could cause us t o pay substantial damages or licensing fees and limit our ability to sell some or all of our products.

Extensive litigation regarding patents and other intellectual property rights has been common in the biopharmaceutical industry.

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Sales in the public market of substantial amounts of our common stock could depress prevailing market prices of our common stock.

As of June 30, 2020, approximately 2.3 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.

As of September 30, 2020, approximately 9.3 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.

The sale of these additional shares, or the perception that such sales may occur, could depress the market price of our common stock.

As of June 30, 2020, approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.

As of September 30, 2020, approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.

Once a warrant is exercised, if the shares of our common stock issued upon the exercise of any such warrant are not available for sale in the open market without further registration under the Securities Act, then the holder can arrange for the resale of shares either by invoking any applicable registration rights, causing the shares to be registered under the Securities Act and thus freely transferable, or by relying on an exemption to the Securities Act.

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If these registration rights, or similar registration rights that may apply to securities we may issue in the future, are exercised, it could result in additional sales of our common stock in the market, which may have an adverse effect on our stock price.

As of June 30, 2020, there were approximately 31,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2020 and thereafter.

As of September 30, 2020, there were approximately 37,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2020 and thereafter.

If and when these options are exercised, such shares will be available for sale in the open market without further registration under the Securities Act.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors