If our quarterly or annual operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly or annual fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly and annual comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.
*Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.
In March 2016, we sold $165 million aggregate principal amount of Secured Notes, initially convertible into an aggregate of up to 21,999,999 shares of common stock and related warrants to purchase up to 21,999,999 shares of common stock. In September 2015, we sold 2,000,000 shares of our common stock and warrants to purchase 500,000 shares of our common stock. In December 2013, we sold $115 million aggregate principal amount of the 2013 Notes, of which approximately $80.0 million in aggregate principal amount was outstanding as of December 31, 2016 and of which approximately $49.6 million in aggregate principal was exchanged for Exchange Notes in February 2017. Any conversions or exercises of some or all of these Secured Notes, 2013 Notes, Exchange Notes or warrants, as applicable, will result in additional dilution of existing stockholders.
To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership will be diluted. Debt, receivables and royalty financings typically contain covenants that restrict operating activities and may impair our ability to in-license potential products or product candidates. Debt, receivables and royalty financings may also be coupled with an equity component, such as warrants to purchase stock, which could also result in dilution of our existing stockholders’ ownership.
If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish potentially valuable rights to our current product candidates, potential products or proprietary technologies, or grant licenses on terms that are not favorable to us. If adequate funds are not available, our ability to achieve profitability or to respond to competitive pressures would be significantly limited and we may be required to delay, significantly curtail or eliminate the development of our product.
Our outstanding convertible notes may impact our financial results, result in the dilution of existing stockholders, and restrict our ability to take advantage of future opportunities.
In March 2016, we sold $165 million aggregate principal amount of Secured Notes and related warrants. The Secured Notes may be converted, under the conditions specified in those Secured Notes, into shares of our common stock and the warrants may be exercised, under the conditions specified in those warrants, into shares of our common stock.
In addition, in December 2013, we sold $115.0 million aggregate principal amount of 2013 Notes. In December 2016, we repurchased 2013 Notes representing an aggregate of approximately $35.0 million in principal. In February 2017 we exchanged approximately $49.6 million in aggregate of principal amount of 2013 Notes for Exchange Notes. We will be required to pay interest on the 2013 Notes and Exchange Notes until they come due, are called by us, or are converted, and the payment of that interest will reduce our net income. The sale of the 2013 Notes may also affect our earnings per share figures, as accounting requirements require that we include in our calculation of earnings per share the number of shares of our common stock into which the 2013 Notes are convertible. On June 27, 2014, our stockholders approved a flexible conversion option that allows us to pay the conversion right on these 2013 Notes in cash and/or shares. The flexible conversion right may allow us to exclude from the earnings per share calculation the shares of our common stock into which the 2013 Notes are convertible. However, we cannot guarantee that the flexible conversion option would result in the accounting treatment described above. The 2013 Notes may be converted, under the conditions and at the premium specified in those 2013 Notes, into shares of our common stock and/or into the cash equivalent of shares of our common stock.
Upon the occurrence of certain fundamental changes or, in the case of the Secured Notes, adverse events related to the regulatory approval for and commercialization of Contrave, and net sales of the Company, holders of the 2013 Notes, Exchange Notes and Secured Notes will, at their option, have the right to require the Company to repurchase for cash all or a portion of their notes, pursuant to the terms and conditions set forth in the applicable indenture.
If converted into shares, the Secured Notes, Exchange Notes and 2013 Notes will result in the dilution of our shareholders. Also when exercised, the warrants that we issued in connection with the Secured Notes will result in the dilution of our shareholders. Further, if repurchased, converted or exercised into cash, the 2013 Notes, the Exchange Notes, the Secured Notes and the related warrants may require the payment of significant additional amounts to the holders of these securities. The payment of the interest payments, the repayment of the principal, the potential payment of the conversion premium and/or cash exercise amounts and the potential repurchase of the Secured Notes, the Exchange Notes and the 2013 Notes will require the use of a substantial amount of our cash, and if such cash is not available, we may be required to sell other assets or enter into alternate financing arrangements at terms