Exhibit 99.3
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and all other information
contained in this prospectus supplement and the accompanying prospectus and
incorporated by reference into the accompanying prospectus before purchasing our
common stock. The risks and uncertainties described below are not the only ones
facing us. Additional risks and uncertainties that we are unaware of, or that we
currently deem immaterial, also may become important factors that affect us. If
any of the following risks occur, our business, financial condition or results
of operations could be materially and adversely affected. In that case, the
trading price of our common stock could decline, and you may lose some or all of
your investment.
RISKS RELATED TO OUR BUSINESS
THE PRESCRIPTION TRENDS FOR ESTRASORB HAVE NOT MET OUR EXPECTATIONS AND WE
MAY FACE ADDITIONAL RISKS AS WE EXPAND OUR RESEARCH AND DEVELOPMENT
CAPABILITIES.
ESTRASORB was approved for commercial sale by the FDA in October 2003 and
commercially launched in June 2004. To date, the prescription trends for
ESTRASORB have not met our expectations. Many factors have affected and could
continue to affect our ability to successfully commercialize ESTRASORB,
including:
o our inability to timely and effectively promote and sell ESTRASORB so
that ESTRASORB gains a meaningful share of the estrogen therapy market,
which currently is dominated by Premarin(R), an oral estrogen tablet
sold by Wyeth; estrogen patches sold by several companies including
Novartis Pharma AG and Berlex Laboratories, Inc.; and gels currently
sold by Solvay Pharmaceuticals, Inc;.
o our inability to manufacture ESTRASORB at acceptable gross margins;
o the inability to obtain coverage and favorable reimbursement rates for
ESTRASORB from insurers and other third-party payors; and
o the market acceptance of physicians and patients of this new technology.
In addition to the marketing risks of ESTRASORB, we are in the process of
expanding our research and development capabilities in an effort to build upon
the strength of our proprietary topical micellar nanoparticle drug (MNP)
delivery platform. We cannot predict whether we will encounter problems with the
implementation of our modified business strategy, including the delay or
suspension of clinical trials or delay the analysis of data derived from them. A
number of events could delay our development efforts and negatively impact our
ability to obtain regulatory approval for, and to market and sell, a particular
drug candidate.
AFTER THE CONSUMMATION OF THIS OFFERING, WITHOUT THE INFUSION OF
ADDITIONAL CAPITAL, WE WILL ONLY HAVE SUFFICIENT FUNDS TO CONTINUE OPERATIONS
TO THE END OF 2005 AND WILL NOT HAVE SUFFICIENT LIQUIDITY TO AVOID A "GOING
CONCERN" QUALIFICATION FROM OUR AUDITORS FOR FISCAL YEAR 2006.
Our auditors issued a "going concern" opinion for our financial statements
for the year ended December 31, 2004. Even after the consummation of this
offering we will only have sufficient funds to continue operations to the end
of 2005, and we will not have sufficient liquidity to avoid a "going concern"
qualification from our auditors for the fiscal year 2006, unless we are able to
enter into subsequent strategic alliances with third parties which result in
the infusion of capital, or raise additional capital through public or private
equity, this year.
WE HAVE LIMITED FINANCIAL RESOURCES AND WE ARE NOT CERTAIN THAT WE WILL BE
ABLE TO OBTAIN FINANCING TO MAINTAIN OUR OPERATIONS OR TO FUND THE DEVELOPMENT
OF FUTURE PRODUCTS.
In the near term we will not generate revenues from product sales in an
amount sufficient to fund our operations, and we will require additional funds
to maintain our operations, continue our research and development programs,
commence future preclinical and clinical trials, seek regulatory approvals,
establish commercial-scale manufacturing capabilities, and market our products.
We will seek such additional funds through public or private equity or debt
financings, collaborative arrangements and other sources. We cannot be certain
that adequate additional funding will be available to us on acceptable terms, if
at all. If we cannot raise the additional funds required for our anticipated
operations, we may be required to delay significantly, reduce the scope of or
eliminate one or more of our research or development programs, downsize our
selling, marketing, general and administrative infrastructure or programs, or
seek alternative measures to avoid insolvency, including arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of our technologies, product candidates or products. If we raise
additional funds through future offerings of shares of our common stock or other
securities, such offerings would cause dilution of existing stockholders'
percentage ownership in the Company. These future offerings also could have a
material and adverse effect on the price of our common stock.
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WE FACE SUBSTANTIAL COMPETITION IN CONNECTION WITH THE SALE OF ESTRASORB,
OUR OTHER PRODUCTS AND OUR PRODUCT CANDIDATES.
We compete with numerous other companies worldwide that have developed or
are developing products that compete or may compete with ESTRASORB, our other
currently marketed products and our product candidates. These competitors
include both large and small pharmaceutical companies, biotechnology firms,
universities and other research institutions. We may not succeed in developing
technologies and products that are more effective than those being developed by
our competitors.
Many large companies currently produce and sell estrogen products for
clinical indications identical to those for ESTRASORB. Currently, the oral and
patch product segments account for approximately 75% and 15% of the market,
respectively, according to 2004 Verispan data. Wyeth commits significant
resources to the sale and marketing of its product, Premarin(R), in order to
maintain its market leadership position. Several other companies compete in the
estrogen category including Berlex, Novartis and Solvay. Recently, Solvay
introduced an ethanol-based gel product, Estrogel, that is directly competitive
with ESTRASORB.
These and other products sold by our competitors have all achieved a
degree of market penetration superior to ESTRASORB. ESTRASORB competes in the
United States for market share with these products and we cannot guarantee that
we will be able to effectively promote ESTRASORB against these competitive
products. In order to effectively compete, we have and may continue to make
substantial investments in sales and marketing and may have to partner with one
or more established companies that have greater financial resources and
marketing expertise. Many of these products are sold by companies with greater
resources and experience and there is no assurance that we will be successful in
gaining significant market share for ESTRASORB or in earning a return on our
investment in ESTRASORB or our product candidates, if approved.
Our technologies and products may be rendered obsolete or noncompetitive as
a result of products introduced by our competitors. Our vitamin products have
faced sustained and increasing generic competition which recently has resulted
in declining sales volumes and a high volume of returns for this product line.
Most of our competitors have substantially greater financial and technical
resources, production and marketing capabilities, and related experience which
may enable them to develop, manufacture and market their products more
successfully and at a lower cost. In addition, many of our competitors have
significantly greater experience in conducting preclinical testing and clinical
trials of human pharmaceuticals and obtaining regulatory approvals to market
such products. Accordingly, our competitors may succeed in obtaining FDA
approval for products more rapidly than we will, which may give them an
advantage in achieving market acceptance of their products.
WE HAVE A HISTORY OF LOSSES AND OUR FUTURE PROFITABILITY IS UNCERTAIN.
Our expenses have exceeded our revenues since our formation in 1987, and our
accumulated deficit at December 31, 2004 was $130.7 million. Our net revenues
for the last three years were $8.3 million in 2004, $11.8 million in 2003 and
$15.0 million in 2002. For the three months ended March 31, 2005 and 2004, our
revenues were $719,000 and $2.2 million, respectively. We cannot be certain when
or if we will generate substantial revenues from the sale of ESTRASORB. We have
received a limited amount of product-related revenue from research contracts,
licenses and agreements to provide vaccine products, services and adjuvant
technologies. We cannot be certain that we will be successful in entering into
strategic alliances or collaborative arrangements with other companies that will
result in other significant revenues to offset our expenses. Our net losses for
the last three years were $25.9 million in 2004, $17.3 million in 2003 and $22.7
million in 2002, while they were $8.9 million and $5.3 million for the three
months ended March 31, 2005 and 2004, respectively.
Our losses have resulted from research and development expenses, sales and
marketing expenses for ESTRASORB, protection of our intellectual property and
other general operating expenses. Our losses increased due to the launch of
ESTRASORB as we expanded our manufacturing capacity and sales and marketing
capabilities, and may increase as and when we conduct additional and larger
clinical trials for our product candidates. Therefore, we expect our cumulative
operating loss to increase until such time, if ever, product sales, licensing
fees and royalty payments generate sufficient revenue to fund our continuing
operations. We cannot
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predict when, if ever, we might achieve profitability and cannot be certain that
we will be able to sustain profitability, if achieved.
Over the past year we have allocated a significant portion of our sales
force's time to the sales and marketing of ESTRASORB and, consequently, the
sales of our other women's health products has been adversely affected. The
costs of maintaining our own sales force to market our current products
including ESTRASORB currently exceed product revenues. If we continue to market
ESTRASORB or any of our current or future products directly, significant
additional expenditures and management resources will be required to sustain the
size of our internal sales force.
WE MAY NEED ADDITIONAL MANUFACTURING CAPABILITY TO COMMERCIALIZE OUR
PRODUCTS.
We currently manufacture ESTRASORB within a facility of Cardinal Health in
Philadelphia, Pennsylvania. Cardinal Health provides packaging services for
ESTRASORB that we manufacture in their facility. In early 2004, we completed the
build-out of the facility to meet FDA requirements and installed manufacturing
equipment for commercial production. We have been successful in manufacturing
for our current commercial requirements; however, we have limited experience
with the large capacity manufacturing which may be required for the commercial
sale of ESTRASORB or future products. Although we have had the ability to
produce the limited quantities of products needed to support our current
research and development programs and clinical trials (including utilizing
contract manufacturing organizations), we may need more production capacity for
larger, later-stage clinical studies and commercial sales. Our potential
products may be too difficult or costly to manufacture on a large scale, to
develop into commercially viable products, or to market.
In the near term, we intend to continue manufacturing ESTRASORB only in the
Philadelphia facility. We may determine to qualify an additional site or sites
for the manufacture of ESTRASORB if our production requirements increase or we
have opportunities to improve our cost of sales. If we are unable to utilize the
Philadelphia facility to manufacture ESTRASORB prior to our qualification of a
second site, however, we would not have immediate access to ESTRASORB and would
be required to reestablish our validation process at a different facility, which
could cause us to lose sales of ESTRASORB and would adversely affect our
business.
We currently utilize third-party contract manufacturers to manufacture our
other products. Any contract manufacturer's facility that we may use, including
the Cardinal Health facility, must adhere to the FDA's regulations on current
good manufacturing practices, which are enforced by the FDA through its
facilities inspection program. These facilities are subject to periodic
inspection by the FDA. The manufacture of products at these facilities will be
subject to strict quality control testing and record-keeping requirements. If
compliance issues exist at these facilities, thereby interfering with the
manufacture of our products, we would be required to seek alternative
manufacturing arrangements. There can be no assurance that we would be able to
enter into alternative manufacturing arrangements at commercially acceptable
rates, if at all. Moreover, the manufacturers we use may not provide sufficient
quantities of product to meet our specifications or our delivery, cost and other
requirements.
If we decide to manufacture our own products, we will need to acquire
additional manufacturing facilities and improve our manufacturing technology.
Establishing additional manufacturing facilities will require us to spend
substantial funds, hire and retain a significant number of additional personnel
and comply with extensive regulations applicable to such facilities in the
United States and abroad, including the current good laboratory practices and
good manufacturing practices required by the FDA. If we elect or are required to
manufacture our own products, we risk the possibility that we may not be able to
do so in a timely fashion at acceptable quality and prices or in compliance with
good laboratory practices and good manufacturing practices.
WE HAVE NOT COMPLETED THE DEVELOPMENT OF OTHER PRODUCTS AND WE MAY NOT
SUCCEED IN OBTAINING THE FDA APPROVAL NECESSARY TO SELL ANY ADDITIONAL PRODUCTS.
The development, manufacture and marketing of our pharmaceutical products
are subject to government regulation in the United States and other countries.
In the United States and most foreign countries, we must complete rigorous
preclinical testing and extensive human clinical trials that demonstrate the
safety and efficacy
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of a product in order to apply for regulatory approval to market the product.
ESTRASORB is our only product to have been approved for sale in the United
States. Approval outside the U.S. may take longer or may require additional
clinical trials. Our product candidate ANDROSORB has completed two Phase I human
clinical studies. Additional product candidates are in preclinical laboratory or
animal studies. Before applying for FDA approval to market any additional
product candidates, we must conduct larger-scale Phase II and III human clinical
trials that demonstrate the safety and efficacy of our products to the
satisfaction of the FDA and other regulatory authorities. These processes are
expensive and can take many years to complete, and we may not be able to
demonstrate the safety and efficacy of our products to the satisfaction of such
regulatory authorities. We may also be required to demonstrate that our proposed
products represent an improved form of treatment over existing therapies and we
may be unable to do so without conducting further clinical studies.
We may fail to obtain regulatory approval for our products on a timely
basis. Delays in obtaining regulatory approval can be extremely costly in terms
of lost sales opportunities and increased clinical trial costs. The speed with
which we complete our clinical trials and our applications for marketing
approval will depend on several factors, including the following:
o the rate of patient enrollment, which is a function of many factors,
including the size of the patient population, the proximity of patients
to clinical sites, the eligibility criteria for the study and the nature
of the protocol;
o institutional review board approval of the protocol and the informed
consent form;
o prior regulatory agency review and approval;
o analysis of data obtained from preclinical and clinical activities,
which are susceptible to varying interpretations and which
interpretations could delay, limit or prevent regulatory approval;
o changes in the policies of regulatory authorities for drug approval
during the period of product development; and
o the availability of skilled and experienced staff to conduct and monitor
clinical studies and to prepare the appropriate regulatory applications.
We have limited experience in conducting and managing the preclinical and
clinical trials necessary to obtain regulatory marketing approvals. We may not
be able to obtain the approvals necessary to conduct clinical studies. We also
face the risk that the results of our clinical trials may be inconsistent with
the results obtained in preclinical studies or that the results obtained in
later phases of clinical trials may be inconsistent with those obtained in
earlier phases. A number of companies in the specialty biopharmaceutical
industry have suffered significant setbacks in advanced clinical trials, even
after experiencing promising results in early animal and human testing. If
regulatory approval of a drug is granted, such approval is likely to limit the
indicated uses for which it may be marketed. Furthermore, even if a product
gains regulatory approval, the product and the manufacturer of the product will
be subject to continuing regulatory review. We may be restricted or prohibited
from marketing or manufacturing a product, even after obtaining product
approval, if previously unknown problems with the product or its manufacture are
subsequently discovered.
OUR SUCCESS DEPENDS ON OUR ABILITY TO MAINTAIN THE PROPRIETARY NATURE OF OUR
TECHNOLOGY.
Our success in large part depends on our ability to maintain the proprietary
nature of our technology and other trade secrets, including our proprietary drug
delivery and vaccine technologies. To do so, we must prosecute and maintain
existing patents, obtain new patents and pursue trade secret and other
intellectual property protection. We also must operate without infringing the
proprietary rights of third parties or letting third parties infringe our
rights. We currently have 51 U.S. patents and corresponding foreign patents and
patent applications covering our technologies. However, patent issues relating
to pharmaceuticals involve complex legal, scientific and factual questions. To
date, no consistent policy has emerged regarding the breadth of biotechnology
patent claims that are granted by the U.S. Patent and Trademark Office or
enforced by the federal courts. Therefore, we do not know
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whether our patent applications will result in the issuance of patents, or that
any patents issued to us will provide us with any competitive advantage. We also
cannot be sure that we will develop additional proprietary products that are
patentable. Furthermore, there is a risk that others will independently develop
or duplicate similar technology or products or circumvent the patents issued to
us.
There is a risk that third parties may challenge our existing patents or
claim that we are infringing their patents or proprietary rights. We could incur
substantial costs in defending patent infringement suits or in filing suits
against others to have their patents declared invalid or claim infringement. It
is also possible that we may be required to obtain licenses from third parties
to avoid infringing third-party patents or other proprietary rights. We cannot
be sure that such third-party licenses would be available to us on acceptable
terms, if at all. If we are unable to obtain required third-party licenses, we
may be delayed in or prohibited from developing, manufacturing or selling
products requiring such licenses.
Although our patents include claims covering various features of our
products and product candidates, including composition, methods of manufacture
and use, our patents do not provide us with complete protection against the
development of competing products. For example, our patents do not prohibit
third parties from developing and selling products for estrogen therapy that
deliver estrogen through a topical emulsion, ointment or similar medium.
Some of our know-how and technology is not patentable. To protect our
proprietary rights in unpatentable intellectual property and trade secrets, we
require employees, consultants, advisors and collaborators to enter into
confidentiality agreements. These agreements may not provide meaningful
protection for our trade secrets, know-how or other proprietary information in
the event of any unauthorized use or disclosure.
HEALTH CARE INSURERS AND OTHER PAYORS MAY NOT PAY FOR OUR PRODUCTS OR MAY
IMPOSE LIMITS ON REIMBURSEMENT.
Our ability to successfully commercialize ESTRASORB and future products will
depend, in part, on the extent to which reimbursement for such products will be
available from third-party payors such as Medicare, Medicaid, health maintenance
organizations, health insurers and other public and private payors. If we
succeed in bringing future products to the market in addition to ESTRASORB, we
cannot be assured that third-party payors will pay for ESTRASORB or such future
products or establish and maintain price levels sufficient for realization of an
appropriate return on our investment in product development. For example,
ESTRASORB currently is being sold as an outpatient prescription drug. Medicare
does not cover the costs of most outpatient prescription drugs. We expect that
over time ESTRASORB will be treated the same as other estrogen therapy products
with respect to government and third-party payor reimbursement, however,
additional time is required to increase the number of payors who currently
accept our product for reimbursement. There can be no assurance that ESTRASORB
will receive similar reimbursement treatment.
Many health maintenance organizations and other third-party payors use
formularies, or lists of drugs for which coverage is provided under a health
care benefit plan, to control the costs of prescription drugs. Each payor that
maintains a drug formulary makes its own determination as to whether a new drug
will be added to the formulary and whether particular drugs in a therapeutic
class will have preferred status over other drugs in the same class. This
determination often involves an assessment of the clinical appropriateness of
the drug and, in some cases, the cost of the drug in comparison to alternative
products. There can be no assurance that ESTRASORB or any of our future products
will be added to payors' formularies, that our products will have preferred
status to alternative therapies, or that the formulary decisions will be
conducted in a timely manner. We may also decide to enter into discount or
formulary fee arrangements with payors, which could result in us receiving lower
or discounted prices for ESTRASORB or future products.
WE MAY HAVE PRODUCT LIABILITY EXPOSURE.
The administration of drugs to humans, whether in clinical trials or after
marketing clearances are obtained, can result in product liability claims. We
maintain product liability insurance coverage in the total amount of $10.0
million for claims arising from the use of our currently marketed products and
products in clinical trials
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prior to FDA approval. Coverage is becoming increasingly expensive, however, and
we may not be able to maintain insurance at a reasonable cost. There can be no
assurance that we will be able to maintain our existing insurance coverage or
obtain coverage for the use of our other products in the future. This insurance
coverage and our resources may not be sufficient to satisfy liabilities
resulting from product liability claims. A successful claim may prevent us from
obtaining adequate product liability insurance in the future on commercially
desirable terms, if at all. Even if a claim is not successful, defending such a
claim would be time-consuming and expensive, may damage our reputation in the
marketplace, and would likely divert management's attention.
WE HAVE MADE LOANS TO CERTAIN OF OUR DIRECTORS, AND HAVE GUARANTEED A
BROKERAGE MARGIN LOAN FOR ONE OF THESE DIRECTORS, WHICH COULD HAVE A NEGATIVE
IMPACT ON OUR STOCK PRICE.
In 2002, pursuant to our 1995 Stock Option Plan, we approved the payment of
the exercise price of options by two of our directors through the delivery of
full-recourse, interest-bearing promissory notes, in the aggregate principal
amount of approximately $1.5 million, secured by a pledge of the underlying
shares. As of December 31, 2004, accrued interest receivable related to the
borrowing was $209,000. In addition, in 2002 we executed a conditional guaranty
of a brokerage margin account for a director in the amount of $500,000. Due to
heightened sensitivity in the current environment surrounding related-party
transactions, these transactions could be viewed negatively in the market and
our stock price could be negatively affected. Our corporate governance policies
have been revised and our 2005 stock incentive plan prohibits any additional
loans or guarantees to directors.
THE PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE VOLATILE; AND
IF WE ARE UNABLE TO MAINTAIN COMPLIANCE WITH NASDAQ LISTING REQUIREMENTS, OUR
STOCK COULD BE DELISTED.
Historically, the market price of our common stock has fluctuated over a
wide range. In fiscal year 2004, our common stock traded in a range from a low
of $2.88 to a high of $6.99. Between January 1, 2005 and June 29, 2005, our
common stock traded in a range from a low of $1.13 to a high of $3.35. It is
likely that the price of our common stock will fluctuate in the future. The
market prices of securities of small-capitalization, specialty biopharmaceutical
companies, including ours, from time to time experience significant price and
volume fluctuations unrelated to the operating performance of these companies.
In particular, the market price of our common stock may fluctuate significantly
due to a variety of factors, including:
o governmental agency actions including the FDA's determination with
respect to new drug applications for new products;
o our ability to obtain financing;
o our ability to develop additional products; and
o sales of our products, particularly ESTRASORB.
In addition, the occurrence of any of the risks described in this "Risk and
Factors" section could have a material and adverse impact on the market price of
our common stock.
On June 30, 2005 the closing price of our common stock as reported on the
Nasdaq National Market was $1.32 per share. Companies listed on NASDAQ are,
among other requirements, required to maintain a minimum closing bid price of
$1.00 per share. Failure to maintain compliance with NASDAQ listing requirements
could result in the delisting of our shares from trading on the NASDAQ system,
which could have a material adverse effect on the trading price, volume and
marketability of our common stock.
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR CASH FLOW AND
PREVENT US FROM FULFILLING OUR OBLIGATIONS.
As of March 31, 2005 we had $36.8 million of outstanding indebtedness. Our
substantial amount of outstanding indebtedness could have significant
consequences. For example, it:
o could increase our vulnerability to general adverse economic and
industry conditions;
o requires us to dedicate a substantial portion of our cash flow from
operations to service payments on our indebtedness, reducing the
availability of our cash flow to fund future capital expenditures,
working capital, execution of our growth strategy, research and
development costs and other general corporate requirements;
o could limit our flexibility in planning for, or reacting to, changes in
our business and the pharmaceutical industry, which may place us at a
competitive disadvantage compared with competitors that have less
indebtedness; and
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o could limit our ability to obtain additional funds, even when necessary
to maintain adequate liquidity.
We may incur additional indebtedness for various reasons, which would
increase the risks associated with our substantial leverage.
RISKS RELATED TO THIS OFFERING
MANAGEMENT WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM
THIS OFFERING, AND WE MAY NOT USE THE PROCEEDS EFFECTIVELY.
We have not designated the amount of net proceeds we will use for any
particular purpose. Accordingly, our management will have broad discretion as to
the application of the net proceeds and could use them for purposes other than
those contemplated at the time of this offering. Our stockholders may not agree
with the manner in which our management chooses to allocate and spend the net
proceeds. Moreover, our management may use the net proceeds for corporate
purposes that may not increase our market value or make us profitable.
BECAUSE THE TOTAL PRICE YOU WILL PAY FOR YOUR SHARES IN THE OFFERING WILL BE
MUCH GREATER THAN THE VALUE OF OUR ASSETS AFTER SUBTRACTING OUR LIABILITIES, THE
VALUE OF YOUR INVESTMENT IN OUR COMMON STOCK WILL BE DILUTED.
If you purchase our common stock in this offering, the price you will pay
for our common stock will be much greater than the book value per share of our
outstanding common stock after the offering. In addition, the total amount of
our capital will be less than it would have been had you and all of the existing
stockholders, optionees, and warrant holders paid the same amount per share for
our common stock. Accordingly, you will suffer immediate and substantial
dilution of your investment. In the past, we have issued options and warrants to
buy our common stock at prices below the offering price. You will experience
further dilution to the extent that additional shares of our common stock are
issued upon the exercise of outstanding stock options and warrants. See
"Dilution" for a detailed calculation of the dilution that will result from this
offering.
THE ISSUANCE OF SHARES OF OUR COMMON STOCK IN CONNECTION WITH THIS OFFERING
WILL CAUSE ADDITIONAL SHARES OF COMMON STOCK TO BE ISSUABLE UPON THE CONVERSION
OF CERTAIN OUTSTANDING CONVERTIBLE NOTES OF THE COMPANY.
Assuming that we issue an aggregate of 4,000,000 shares, of our common
stock at a public offering price of $1.00 per share, an additional 474,147
shares of common stock will be issuable upon the conversion of $35.0 million
aggregate principal amount of 4.75% convertible notes that are due July 15,
2009. Accordingly, you will suffer additional dilution of your investment. See
"Dilution" for a detailed calculation of the dilution that will result from this
offering.
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