GNPX 2018 Proxy Statement

10 Related Parties Except for the sale and issuance of the Shares and the Warrants, the participants in the Private Placement have not had any material relationship with us within the past three years, other than Maxim, which served as the placement agent for the Private Placement, and Network 1 Financial Securities, Inc., which was the underwriter of our initial public offering and served as an advisor for the Private Placement. As compensation for serving as placement agent for the Private Placement, we paid to Maxim a fee of $700,000 and reimbursed Maxim’s related expenses. Vote Required The affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and entitled to vote on the matter, excluding shares acquired in the Private Placement under the Securities Purchase Agreement, is necessary under Nasdaq Marketplace Rule 5635(e)(4) to approve the Nasdaq 20% Issuance Proposal. Broker non-votes will not affect whether this proposal is approved, but abstentions will have the same effect as a vote against the proposal. In accordance with applicable Nasdaq Marketplace Rules, holders of the shares of our common stock purchased in the Private Placement are not entitled to vote such shares on the Nasdaq 20% Issuance Proposal. Prior to the closing of the Private Placement, and as a condition to such closing, certain of our stockholders entered into voting agreements with the Purchasers. As of immediately prior to the closing of the Private Placement, the stockholders executing the voting agreements owned approximately 62% of our total issued and outstanding common stock. Pursuant to the voting agreements, the stockholder signatories agreed to vote all shares of our common stock owned by them in favor of the Nasdaq 20% Issuance Proposal. Potential Effects of this Proposal The issuance of the shares of our common stock which are the subject of the Nasdaq 20% Issuance Proposal will result in an increase in the number of shares of common stock outstanding. This will result in a decrease to the respective ownership and voting percentage interests of stockholders prior to the Private Placement. The market value of our Company and our future earnings may be reduced. In addition, as described above under “Registration Rights,” we have registered the securities issued in the Private Placement, which includes a total of 4,636,680 shares of our common stock, consisting of a maximum of 2,352,940 Shares issued or issuable pursuant to the Securities Purchase Agreement and 2,283,740 Warrant Shares that could become issuable upon exercise of Warrants. The release of up to 4,636,680 freely traded shares onto the market, or the perception that such shares will or could come onto the market, has had and could have an adverse effect on the trading price of our stock. We have broad discretion to use the net proceeds to us from the sale of such shares, including the proceeds received upon exercise of the Warrants, and you will be relying solely on the judgment of our Board of Directors and management regarding the application of these proceeds. Our use of the proceeds may not improve our operating results or increase the value of your investment. For your consideration of the Nasdaq 20% Issuance Proposal, a description of the material terms of the Private Placement is set forth in this proxy statement to provide you with basic information concerning the Private Placement. However, the description above is not a substitute for reviewing the full text of the referenced documents, which were attached as exhibits to our Current Report on Form 8-K as filed with the SEC on May 10, 2018.