Its the dilution overhang as the recent financing will add 14 million shares to the current 14 million shares when the preferred shares are converted. Also, a meaningful spike on approval will trigger the 14 million in warrants attached to the same deal hence 3 times more shares will be outstanding in the not too distant future upon approval. They did raise 26 million in cash and will raise another 26+ million when warrants exercisable at $2 per share are exercised.
Current new management did a major dilutive thing to get this financing. It will only look smart if they do not end up with approval in the next year. Otherwise it was ridiculous to offer the warrants much less finance for a year out (6 months would of been more desirable with FDA decision so close). There is still large upside potential upon approval IMO and I think $9-$10 area is plausible.