fund the further development of our pipeline of gene therapies for rare diseases, including the advancement of RP-L201 into a Phase 2 clinical trial and the continued clinical development of RP-L102, to accelerate the development of in-house manufacturing capabilities and for general corporate purposes. Pending the use of net proceeds, we intend to invest the net proceeds in a variety of capital preservation instruments, including short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.
The failure by our management to apply these funds effectively could result in financial losses that could harm our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
Because we do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
We have never declared or paid cash dividends on shares of our common stock. We anticipate that we will retain our earnings, if any, for future growth and therefore do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our shares of common stock will provide a return to shareholders.
Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.
Sales of a substantial number of our shares in the public markets could occur at any time, and such sales, or the perception in the market that holders of a substantial number of our shares intend to sell their shares, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We, our directors and our executive officers and certain of our stockholders have agreed not to sell, dispose of or hedge any shares or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus supplement continuing through and including the date 90 days after the date of this prospectus supplement, subject to certain exceptions. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC may, in their discretion, release the restrictions on any such shares at any time without notice. We cannot predict the effect that future sales of our common stock would have on the market price of our common stock.
Risks Related to the Acquisition of Renovacor
We may fail to realize the anticipated benefits of the acquisition of Renovacor.
The success of the acquisition of Renovacor will depend on, among other things, our ability to close the transaction and to combine our business with Renovacor in a manner that allows us to achieve developmental and operational synergies. The closing of the acquisition is subject to certain closing conditions including, among other things, approval by our and Renovacor’s stockholders, receipt of required regulatory approvals and the satisfaction of other customary closing conditions. We cannot guarantee that these conditions will be satisfied in a manner that will allow us to close the acquisition within the expected timeframe or at all. Lawsuits or other legal proceedings brought in connection with the acquisition could also delay or prevent the closing of the transaction, and may cause us to incur additional costs and divert management’s attention from the acquisition process and our core business operations. If we are unable to complete the acquisition within the expected timeframe or at all, our business, financial condition and results of operations would be negatively impacted. Moreover, even if the acquisition closes within the expected timeframe, it is possible that the integration process could result in the loss of key employees; the disruption of our ongoing business or the ongoing business of Renovacor; or inconsistencies in standards, controls, procedures, or policies, in each case, that could adversely affect our ability to achieve the anticipated benefits of the acquisition. Integration efforts between the two companies will also divert management’s attention from our core business and other opportunities that could have been beneficial to our shareholders. An inability to realize the full extent of, or any of, the anticipated benefits of the acquisition, as well as any delays encountered in the integration process, could have an adverse effect on our business and results of operations, which may affect the value of the shares of our common stock after the completion of the acquisition. If we are unable to achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer or cost more to realize than expected. In particular, the acquisition may not be accretive to our stock value in the near or long term. In addition, the acquisition of Renovacor may impact the market price for shares of our common stock, which could result in substantial losses for our stockholders.