RISK FACTORS

The combined organization will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus/information statement, you should carefully consider the material risks described below before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with BioPharmX's business because these risks may also affect the combined organization—these risks can be found under the heading "Risk Factors—Risks Related to BioPharmX" in this proxy statement/prospectus/information statement. You should also read and consider the other information in this proxy statement/prospectus/information statement. Please see the section entitled "Where You Can Find More Information" in this proxy statement/prospectus/information statement.

Risks Related to the Merger

The formula determining the number of shares to be issued in the Merger Agreement is not adjustable based on the market price of BioPharmX's common stock, so the Merger consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed.

The Merger Agreement has set the formula for determining the number of shares to be issued to Timber, and the formula is based on the outstanding membership ownership of Timber and the outstanding common stock of BioPharmX, in each case immediately prior to the closing of the Merger described under the heading "The Merger—Merger Consideration". Applying the formula in the Merger Agreement, the former Timber securityholders (including holders of VARs and any investors providing the Timber Funding) immediately before the Merger are expected to own (or have the right to receive) approximately 88.5% of the outstanding capital stock of BioPharmX immediately following the Merger, and the stockholders of BioPharmX immediately before the Merger are expected to own approximately 11.5% of the outstanding capital stock of BioPharmX immediately following the Merger, subject to certain adjustments.

Any changes in the market price of BioPharmX's common stock before the completion of the Merger will not affect the number of shares of BioPharmX's common stock issuable to Timber's members pursuant to the Merger Agreement. Therefore, if before the completion of the Merger the market price of BioPharmX's common stock declines from the market price on the date of the Merger Agreement, then Timber's members could receive Merger consideration with substantially lower value than the value of such Merger consideration on the date of the Merger Agreement. Similarly, if before the completion of the Merger the market price of BioPharmX's common stock increases from the market price of BioPharmX's common stock on the date of the Merger Agreement, then Timber's members could receive Merger consideration with substantially greater value then the value of such Merger consideration on the date of the Merger Agreement. The Merger Agreement does not include a price-based termination right. Because the formula does not adjust as a result of changes in the market price of BioPharmX's common stock, for each one percentage point change in the market price of BioPharmX's common stock, there is a corresponding one percentage point rise or decline, respectively, in the value of the total Merger consideration payable to Timber's members pursuant to the Merger Agreement.

The post-merger holdings of current BioPharmX stockholders may be diluted

Under the Merger Agreement, the amount of securities to be issued to Timber's members may be adjusted under certain circumstances. There may be an adjustment if BioPharmX exceeds the budget agreed to between BioPharmX and Timber between the date of the Merger Agreement and the closing of the Merger.

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Failure to complete the Merger could significantly harm the market price of BioPharmX's common stock and negatively affect the future business and operations of both companies.

Each of BioPharmX and Timber will have incurred significant legal, financial, advisory, accounting, audit and other general operating expenses, which must be paid whether or not the Merger is completed. Further, if the Merger is not completed, it could significantly harm the market price of BioPharmX's common stock and raise serious doubt as to its ability to continue as an entity. In addition, if the Merger Agreement is terminated and the board of directors of BioPharmX or the board of managers of Timber determines to seek another business combination, there can be no assurance that either BioPharmX or Timber will be able to find a partner and close an alternative transaction on terms that are as favorable or more favorable than the terms set forth in the Merger Agreement.

The Merger is subject to the approval of the Merger Agreement by BioPharmX's stockholders and the members of Timber. Failure to obtain these approvals would prevent the closing of the Merger.

Before the Merger can be completed, the stockholders of BioPharmX must approve the issuance of shares of BioPharmX's common stock to the members of Timber and must approve the Merger Agreement. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the Merger. Any delay in completing the Merger may adversely affect the timing and benefits that are expected to be achieved from the Merger.

Some BioPharmX officers and directors and officers and managers of Timber have interests in the Merger that are different from the stockholders of BioPharmX and members of Timber and that may influence them to support or approve the Merger without regard to the interests of the stockholders of BioPharmX or the members of Timber.

Certain officers and directors of BioPharmX and officers and managers of Timber participate in arrangements that provide them with interests in the Merger that are different from the interests of the stockholders of BioPharmX and members of Timber including, among others, the continued service as an officer or director of the combined organization, severance benefits, the acceleration of stock option vesting, continued indemnification and the potential ability to sell an increased number of shares of common stock of the combined organization in accordance with Rule 144 under the Securities Act of 1933, as amended. These interests, among others, may influence the officers and directors of BioPharmX and the officers and managers of Timber to support or approve the Merger. For more information concerning the interests of BioPharmX and Timber's respective officers, managers and directors, see the sections entitled "The Merger—Interests of BioPharmX Directors and Executive Officers in the Merger" and "The Merger—Interests of Timber Managers and Officers in the Merger."

The Timber Funding condition may not be satisfied.

One of the conditions to the obligations of BioPharmX under the Merger Agreement is that on or immediately prior to the closing of the Merger, Timber consummate the Timber Funding whereby Timber receives gross proceeds of no less than twenty million dollars ($20,000,000). No assurance can be given that all of the conditions to the consummation of the Timber Funding condition or that Timber will be able to satisfy the Timber Funding condition. If the Timber Funding is not consummated, and if BioPharmX is not otherwise willing to waive the Timber Funding Condition, the parties will not be able to consummate the Merger.

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The market price of BioPharmX's common stock following the Merger may decline as a result of the Merger.

The market price of BioPharmX's common stock, after taking into account the reverse stock split, may decline as a result of the Merger for a number of reasons including if:

•

investors react negatively to the prospects of the combined organization's product candidates, business and financial condition following the Merger;

•

the effect of the Merger on the combined organization's business and prospects is not consistent with the expectations of financial or industry analysts; or

•

the combined organization does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts.

BioPharmX and Timber securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined organization following the closing of the Merger as compared to their current ownership and voting interest in the respective companies.

After the completion of the Merger, the current securityholders of BioPharmX and Timber will own a smaller percentage of the combined organization than their ownership in the respective companies prior to the Merger. Immediately after the Merger, it is currently estimated that Timber securityholders (including holders of VARs and any investors providing the Timber Funding) will own (or have the right to receive) approximately 88.5% of the common stock of the combined organization and BioPharmX securityholders, whose shares of BioPharmX will remain outstanding after the Merger, will own approximately 11.5% of the combined organization. Consequently, securityholders of BioPharmX and Timber will be able to exercise less influence over the management and policies of the combined organization following the closing of the Merger than they currently exercise over the management and policies of their respective companies.

BioPharmX and Timber securityholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

If the combined organization is not able to realize the strategic and financial benefits currently anticipated from the Merger, BioPharmX's and Timber's securityholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent that the combined organization is able to realize only part of the expected strategic and financial benefits currently anticipated from the Merger.

The combined company may need to raise additional capital by issuing securities or debt or thorough licensing or other arrangements, which may cause dilution to the combined company's stockholders or restrict the combined company's operations or impact its proprietary rights.

The combined company may be required to raise additional funds sooner than currently planned. If either BioPharmX or Timber hold less cash at the time of the closing of the Merger than the parties currently expect, the combined company will need to raise additional capital sooner than expected. Additional financing may not be available to the combined company when needed or it may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such an issuance may cause significant dilution to the combined company's stockholders' ownership and the terms of any new equity securities may have preferences over the combined company's common stock. Any debt financing the combined company enters into may include covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company's assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In

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addition, if the combined company raises additional funds through licensing, partnering or other strategic arrangements, it may be necessary to relinquish rights to some of the combined company's technologies or product candidates and proprietary rights, or grant licenses on terms that are not favorable to the combined company.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The terms of the Merger Agreement prohibit BioPharmX from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances where the board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that failure to cooperate with the proponent of that proposal would reasonably be likely to be inconsistent with the board's fiduciary duties.

Because the lack of a public market for Timber's securities makes it difficult to evaluate the value of such securities, the members of Timber may receive shares of BioPharmX's common stock in the Merger that have a value that is less than, or greater than, the fair market value of Timber's securities.

The outstanding securities of Timber are privately held and not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Timber. Because the percentage of BioPharmX's common stock to be issued to Timber's members was determined based on negotiations between the parties, it is possible that the value of BioPharmX's common stock to be received by Timber's members will be less than the fair market value of Timber, or BioPharmX may pay more than the aggregate fair market value for Timber.

If the conditions to the Merger are not met, the Merger will not occur.

Even if the Merger is approved by the securityholders of BioPharmX and Timber, specified conditions must be satisfied or waived to complete the Merger. These conditions are set forth in the Merger Agreement and in the section entitled "The Merger Agreement—Conditions to the Completion of the Merger" in this proxy statement/prospectus/information statement. BioPharmX cannot assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the Merger will not occur or will be delayed, and BioPharmX and Timber may each lose some or all of the intended benefits of the Merger.

Litigation relating to the Merger could require BioPharmX or Timber to incur significant costs and suffer management distraction, and could delay or enjoin the Merger.

BioPharmX and Timber could be subject to demands or litigation relating to the Merger, whether or not the Merger is consummated. Such actions may create uncertainty relating to the Merger, or delay or enjoin the Merger.

The ownership of the combined company common stock is expected to be highly concentrated, which may prevent you and other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause the combined company stock price to decline.

Executive officers and directors of the combined company and their affiliates are expected to beneficially own or control approximately 678,041 of the outstanding shares of the combined company common stock following the closing of the Merger. Accordingly, these executive officers, directors and their affiliates, acting as a group, will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of

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all or substantially all of the combined company assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control of the combined company, even if such a change of control would benefit the other stockholders of the combined company. The significant concentration of stock ownership may adversely affect the trading price of the combined company's common stock due to investors' perception that conflicts of interest may exist or arise.

The historical audited and unaudited pro forma condensed combined financial information may not be representative of our results after the Merger.

The historical audited and unaudited pro forma condensed combined financial information included elsewhere in this proxy statement/prospectus/information statement has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Merger been completed as of the date indicated, nor is it indicative of future operating results or financial position.

Risks Related to BioPharmX

Risks Related to BioPharmX's Financial Position, Need for Additional Capital and Risks Related to the Merger

There is no assurance that the Merger will be completed in a timely manner or at all. If the Merger is not consummated, BioPharmX's business could suffer materially and BioPharmX's stock price could decline.

The closing of the Merger is subject to the satisfaction or waiver of a number of closing conditions, as described above, including the required approvals by BioPharmX and Timber stockholders and other customary closing conditions. If the conditions are not satisfied or waived, the Merger may be materially delayed or abandoned. If the Merger is not consummated, BioPharmX's ongoing business may be adversely affected and, without realizing any of the benefits of having consummated the Merger, BioPharmX will be subject to a number of risks, including the following:

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BioPharmX has incurred and expects to continue to incur significant expenses related to the Merger even if the Merger is not consummated. BioPharmX may not have adequate funding to pay for these expenses, which may force it into dissolution, liquidation or bankruptcy;

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BioPharmX could be obligated to pay Timber a termination fee of up to $1,250,000 under certain circumstances set forth in the Merger Agreement;

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BioPharmX could default on the Bridge Note and the ownership of the secured assets held as collateral for the Bridge Note could be transferred;

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the price of BioPharmX's stock may decline;

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BioPharmX may not be able to meet the NYSE American continued listing standards, which may lead to delisting procedures by the NYSE American; and

•

BioPharmX also could be subject to litigation related to any failure to consummate the Merger or to perform its obligations under the Merger Agreement.

If the Merger is not consummated, these risks may materialize and may adversely affect its business, financial condition and the market price of BioPharmX common stock.

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If the Merger is not completed, BioPharmX may be unsuccessful in completing an alternative transaction on terms that are as favorable as the terms of the Merger with Timber, or at all, and BioPharmX may otherwise be unable to continue to operate its business. The BioPharmX Board may decide to pursue a dissolution and liquidation of BioPharmX. In such an event, the amount of cash available for distribution to its stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

While BioPharmX has entered into the Merger Agreement with Timber, the closing of the Merger may be delayed or may not occur at all and there can be no assurance that the Merger will deliver the anticipated benefits BioPharmX expects or enhance stockholder value. If BioPharmX is unable to consummate the Merger, the BioPharmX Board may elect to pursue an alternative strategy, one of which may be a strategic transaction similar to the Merger. Attempting to complete an alternative transaction like the Merger will be costly and time consuming, and BioPharmX can make no assurances that such an alternative transaction would occur at all. Alternatively, the BioPharmX Board may elect to continue its operations by starting a Phase 3 clinical trial for BPX-01 or BPX-04, which would require that BioPharmX obtain additional funding, which it does not currently believe could be completed on a timely basis, or the BioPharmX Board could instead decide to pursue a dissolution and liquidation of BioPharmX. In such an event, the amount of cash available for distribution to BioPharmX's stockholders will depend heavily on the timing of such decision, as with the passage of time the amount of cash available for distribution will be reduced as BioPharmX continues to fund its operations. In addition, if the BioPharmX Board were to approve and recommend, and BioPharmX's stockholders were to approve, a dissolution and liquidation of BioPharmX's company, BioPharmX would be required under Delaware corporate law to pay BioPharmX's outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to BioPharmX's stockholders. BioPharmX's commitments and contingent liabilities may include severance obligations, regulatory, clinical and preclinical obligations, lease obligations and fees and expenses related to the Merger, dissolution or liquidation. As a result of this requirement, a portion of BioPharmX's assets would need to be reserved pending the resolution of such obligations. In addition, BioPharmX may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, the BioPharmX Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of BioPharmX common stock could lose all or a significant portion of their investment in the event of a liquidation or dissolution of BioPharmX.

The issuance of shares of BioPharmX common stock to Timber stockholders in the Merger will significantly dilute the voting power of BioPharmX's current stockholders.

If the Merger is completed, each outstanding share of Timber common stock will be converted into the right to receive a number of shares of BioPharmX common stock equal to the exchange ratio. Immediately following the Merger, the former Timber securityholders (including holders of VARs and any investors providing the Timber Funding) immediately before the Merger are expected to own (or have the right to receive) approximately 88.5% of the BioPharmX common stock, and BioPharmX's securityholders immediately before the Merger are expected to own, or hold rights to acquire, approximately 11.5% of the BioPharmX common stock. The issuance of shares of BioPharmX common stock to Timber stockholders in the Merger will significantly reduce the relative voting power of each share of BioPharmX common stock held by BioPharmX's current stockholders. Consequently, BioPharmX's stockholders as a group will have significantly less influence over the management and policies of the combined company after the Merger than prior to the Merger.

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BioPharmX has experienced losses since inception and anticipate that it will continue to incur losses, which makes it difficult to assess its future prospects and financial results.

BioPharmX is a specialty pharmaceutical company with a limited operating history. Pharmaceutical product development is a highly speculative and costly undertaking and involves a substantial degree of uncertainty. BioPharmX has never been profitable and, as of October 31, 2019, it had an accumulated deficit of $86.9 million and incurred net losses of $8.4 million and $13.2 million for the nine months ended October 31, 2019 and 2018, respectively.

If the Merger is not consummated, BioPharmX will likely be required to wind-down and dissolve as BioPharmX would be required to pay all its debts and contractual obligations, including the Bridge Loan, and set aside certain reserves for potential future claims. While BioPharmX will also attempt to consummate a financing to allow it to continue as a going concern, based on its recent strategic process, BioPharmX does not believe that it would be able to consummate a financing on reasonable terms sufficient to obtain such additional financial resources.

If the Merger is not completed and BioPharmX is unable to raise sufficient additional funds for the development of its product candidates, whether through potential partnering or other strategic arrangements or otherwise, which it does not believe it would be able to do on reasonable terms, BioPharmX will likely determine to cease operations, wind-down and dissolve (whether in or out of a bankruptcy or court proceeding to do so).

If BioPharmX is unable to repay the Bridge Loan, the ownership of the secured assets held as collateral for the Bridge Loan could be transferred to Timber.

In connection with the Merger Agreement, BioPharmX and Timber entered into a Credit Agreement, dated as of January 28, 2020 (the "Credit Agreement"), pursuant to which Timber has agreed to make a bridge loan (the "Bridge Loan") to BioPharmX in an aggregate amount of $2.5 million, of which $700,000 is currently outstanding. The Bridge Loan is secured by a lien on all of BioPharmX's assets, and if BioPharmX is unable repay the Bridge Loan, the ownership of the secured assets held as collateral could be transferred to Timber.

If BioPharmX does not successfully complete the Merger, BioPharmX will need substantial additional funding, and will likely be unable to raise the capital necessary to complete a Phase 3 clinical trial, which would likely cause it to wind down and dissolve.

BioPharmX incurred a net loss of $8.4 million and $13.2 million for the nine months ended October 31, 2019 and 2018, respectively. As of October 31, 2019, it had cash and cash equivalents of $1.4 million and significant liabilities and obligations. If the Merger is not completed, based on BioPharmX's current operating plan, BioPharmX is expected to fund operations only for a relatively short period of time.

BioPharmX presented comprehensive BPX-01 Phase 2b clinical data for the treatment of inflammatory lesions of acne and received positive FDA feedback regarding its BPX-01 Phase 3 clinical trial plans. BioPharmX has completed a Phase 2b clinical trial for BPX-04 for the treatment of papulopustular rosacea. The development of its business will require substantial additional capital in the future to fund its ongoing operations and satisfy its obligations and liabilities. BioPharmX has historically relied upon both private and public sales of equity or debt securities to fund its operations. BioPharmX does not believe it can raise the significant capital required to continue operations, and it could be required to seek bankruptcy protection or other alternatives that would likely result in its stockholders losing some or all of their investment.

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Risks Related to BioPharmX's Historical Business

Future discovery and preclinical development collaborations are important to BioPharmX. If BioPharmX is unable to enter into or maintain these collaborations, or if these collaborations are not successful, its business could be adversely affected.

For some of the BioPharmX product candidates, BioPharmX may decide to collaborate with pharmaceutical and biotechnology companies for development of products in the future. It may seek to enter into enter into a strategic collaboration to fund the continued development of BPX-01 or BPX-04. BioPharmX faces significant competition in seeking appropriate collaborators. Its ability to reach a definitive agreement for any collaboration will depend, among other things, upon its assessment of the collaborator's resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator's evaluation of a number of factors. It may not succeed in its efforts to establish a development collaboration or other alternative arrangements for BPX-01 or BPX-04 because third parties may not view these product candidates as having the requisite potential to demonstrate safety and efficacy or profitability. If BioPharmX is unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, it may have to curtail the development of a product candidate, reduce or delay its development program on one or more of its other development programs, delay its potential development schedule or reduce the scope of research activities, or decrease its expenditures and undertake discovery or preclinical development activities at its own expense. If it fails to enter into collaborations and does not have sufficient funds or expertise to undertake the necessary development activities, it may not be able to further develop its product candidates or continue to develop its product candidates and its business may be materially and adversely affected.

Future collaborations it may enter into may involve the following risks:

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collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

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collaborators may not perform their obligations as expected;

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changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities;

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collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by BioPharmX, stop or abandon discovery and preclinical development for a product candidate, repeat or conduct new discovery and preclinical development for a product candidate;

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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with its products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than it;

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product candidates discovered in collaboration with BioPharmX may be viewed by its collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of its product candidates;

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disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the discovery, preclinical development or commercialization of product candidates, might lead to additional responsibilities for BioPharmX with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

•

collaborators may not properly maintain or defend its intellectual property rights or intellectual property rights licensed to us or may use its proprietary information in such a way as to invite

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litigation that could jeopardize or invalidate its intellectual property or proprietary information or expose BioPharmX to potential litigation;

•

collaborators may infringe the intellectual property rights of third parties, which may expose BioPharmX to litigation and potential liability; and

•

collaborations may be terminated for the convenience of the collaborator and, if terminated, it could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

Additionally, subject to its contractual obligations to BioPharmX, if a collaborator is involved in a business combination, the collaborator might deemphasize or terminate the development of any of its product candidates. If one of BioPharmX's collaborators terminates its agreement with BioPharmX, BioPharmX may find it more difficult to attract new collaborators and its perception in the business and financial communities could be adversely affected.

If BioPharmX is unable to maintain its collaborations, development of its product candidates could be delayed, and it may need additional resources to develop them. All of the risks relating to product development, regulatory approval and commercialization described in this prospectus also apply to the activities of its collaborators.

BioPharmX has deemed there to be substantial doubt about its ability to continue as a going concern, and in order to fund its operations and execute its business plan it will require additional financing.

Since inception, BioPharmX has experienced recurring operating losses and negative cash flows and it expects to continue to generate operating losses and consume significant cash resources for the foreseeable future. Without additional financing, these conditions raise substantial doubt about its ability to continue as a going concern, meaning that it may be unable to continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course of operations. As a result, its independent registered public accounting firm included an explanatory paragraph in their report on its consolidated financial statements for the years ended January 31, 2019 and 2018 with respect to this uncertainty. Such an opinion may materially and adversely affect the price per share of its common stock and/or otherwise limit its ability to raise additional funds through the issuance of debt or equity securities or otherwise. Further, the perception that it may be unable to continue as a going concern may impede its ability to raise additional funds or operate its business due to concerns regarding its ability to discharge its contractual obligations.

BioPharmX has prepared its condensed consolidated financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Its condensed consolidated financial statements for the three and nine months ended October 31, 2019 and 2018 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Without additional funds, however, it may be unable to continue as a viable entity, in which case its stockholders may lose all or some of their investment in BioPharmX.

The terms of certain of BioPharmX's prior registered direct offerings may materially and adversely impact its ability to obtain additional financing in the future.

BioPharmX is subject to certain restrictions and obligations in connection with its registered direct offerings, or RDOs, that were consummated in September 2016, April 2017, July 2017, November 2017

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and November 2018, which may materially and adversely affect its ability to obtain additional financing in the future. These restrictions and obligations include:

•

certain rescission rights if it does not act in a timely manner with respect to its obligations related to the various documents executed in connection with the registered direct offerings, or the RDO Transaction Documents;

•

its obligation to repurchase warrants issued to the RDO investors, based on the warrants' Black-Scholes value, in the event of certain fundamental transactions, including, but not limited to, any sale, license, transfer or other disposition of all or substantially all of its assets, any purchase, tender or exchange offer that has been accepted by the holders of 50% or more of its then outstanding shares of common stock, a reclassification, reorganization or recapitalization, or the consummation of a business combination (including, but not limited to, a reorganization, recapitalization, spin-off or scheme of arrangement) involving the acquisition of more than 50% of its then outstanding shares of common stock;

•

certain indemnification obligations; and

•

its obligation to pay liquidated damages in connection with certain events, including failure to comply with the public information requirements under Rule 144 of the Securities Act of 1933, as amended, or the Securities Act, or to remove restrictive legends in a timely manner.

BioPharmX has also made various representations and warranties to the RDO investors in connection with the RDO Transaction Documents, including those related to solvency, no integrated offerings, maintenance of its stock exchange listing, internal controls, and absence of liens, among others. In the event any of its representations or warranties in the RDO Transaction Documents are determined to be inaccurate, or if BioPharmX is deemed to have otherwise violated any provisions of the RDO Transaction Documents, it may be found to be in breach of the RDO Transaction Documents. This in turn may result in litigation against BioPharmX, which could be costly and time-consuming, divert management's attention and resources, damage its reputation and otherwise harm its business, results of operations and financial condition.

BioPharmX's business is dependent on the successful development, regulatory approval and commercialization of its product candidates, in particular BPX-01 and BPX-04.

BioPharmX's portfolio of product candidates includes two clinical-stage drug product candidates, BPX-01, a topical antibiotic for the treatment of inflammatory lesions of acne vulgaris, and BPX-04, a topical antibiotic for the treatment of papulopustular rosacea. The success of its business, including its ability to finance BioPharmX, form strategic partnerships and generate revenues in the future, will primarily depend on the successful development, regulatory approval and commercialization of these product candidates. In the future, it may become dependent on one or more of its early-stage product candidates or any of its product candidates that it may in-license, acquire or develop. The clinical and commercial success of its product candidates will depend on a number of factors, including the following:

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the ability to raise additional capital on acceptable terms, or at all;

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timely completion of its clinical trials, which may be significantly slower or cost more than it currently anticipates and will depend substantially upon the performance of third-party contractors;

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whether BioPharmX is required by the FDA or similar foreign regulatory agencies to conduct additional clinical trials beyond those planned to support the approval and commercialization of its product candidates or any future product candidates;

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acceptance of its proposed indications and primary and secondary endpoint assessments relating to the proposed indications of its product candidates by the FDA and similar foreign regulatory authorities;

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its ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities the safety and efficacy of its product candidates or any future product candidates;

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the prevalence, duration and severity of potential side effects experienced in connection with the use of its product candidates or future approved products, if any;

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the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;

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its ability to enter into a potential collaboration or partnership to fund the continued development of its product candidates;

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achieving and maintaining, and, where applicable, ensuring that its third-party contractors achieve and maintain, compliance with its contractual obligations and with all regulatory requirements applicable to its product candidates or any future product candidates or approved products, if any;

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the ability of third parties with whom it contracts to (i) manufacture clinical trial and commercial supplies of its product candidates or any future product candidates, (ii) remain in good standing with regulatory agencies and (iii) develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMPs;

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a continued acceptable safety profile during clinical development and subsequent to approval of its product candidates or any future product candidates, if any;

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its ability to successfully commercialize its product candidates or any future product candidates in the United States and internationally, if approved, for marketing, sale and distribution in such countries or territories, whether alone or in collaboration with others;

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acceptance by physicians and patients of the benefits, safety and efficacy of its product candidates or any future product candidates, if approved, including relative to alternative and competing treatments;

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its ability to establish and enforce intellectual property rights in and to its product candidates or any future product candidates;

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its ability to avoid third-party patent interference or intellectual property infringement claims; and

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its ability to in-license or acquire additional product candidates or commercial-stage products that it believes it can successfully develop and commercialize.

If BioPharmX is unable to achieve any of the above factors, many of which are beyond its control, in a timely manner or at all, it could experience significant delays or fail to obtain regulatory approvals or commercialize its product candidates. Even if it obtains the necessary regulatory approvals, it may never successfully commercialize any of its product candidates. Accordingly, it may not generate revenue through the sale of its product candidates or any future product candidates sufficient to continue operations.

BioPharmX has a limited operating history and has yet to obtain regulatory approvals for any of its product candidates, which makes it difficult to evaluate its future prospects and viability.

BioPharmX's operations to date have been primarily limited to researching and developing its product candidates and undertaking preclinical studies and clinical trials of its product candidates. BioPharmX has also not yet obtained regulatory approvals for any of its product candidates. Consequently, the ability to accurately assess and predict its future operating results or business prospects is more limited than if it had a longer operating history or FDA-approved products on the market. In November 2018, BioPharmX divested its VI₂OLET dietary supplement, which was its only source of revenue to date.

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BioPharmX has experienced significant turnover in its senior management, and if it fails to attract and retain management and other key personnel, it may be unable to continue to develop successfully or commercialize its product candidates or otherwise implement its business plan.

BioPharmX's ability to compete in the highly-competitive pharmaceutical industry depends upon its ability to attract and retain highly-qualified managerial, scientific, medical, sales and marketing and other personnel. BioPharmX is highly dependent on its management, including: its Chief Executive Officer and Principal Financial Officer, Steven Bosacki, and its Chief Accounting Officer, Joyce Goto. It does not maintain "key man" insurance policies on the lives of these individuals or the lives of any of its other employees. The loss of the services of any of these individuals, along with other key executives or employees, could impede, delay or prevent the successful development of its product pipeline, completion of its planned clinical trials, commercialization of its product candidates or in-licensing or acquisition of new assets and could negatively impact its ability to successfully implement its business plan. If it loses the services of any of these individuals, it might not be able to find suitable replacements on a timely basis or at all, and its business could be harmed as a result. In order to retain valuable employees at BioPharmX, in addition to salary and cash incentives, it provides stock options that vest over time. The value to employees of stock options that vest over time will be significantly affected by movements in its stock price that are beyond its control and may at any time be insufficient to counteract offers from other companies.

In addition, this past year, BioPharmX experienced significant turnover in its senior management ranks, including the departure of its former President, Anja Krammer in October 2018, the departure of former Executive Vice President and Chief Financial Officer, Greg Kitchener, in October 2018 and the departure of Kin Chan, Executive Vice President of Research and Technology in July 2019. In September 2018, it appointed David S. Tierney, MD, to serve as President and Chief Executive Officer, in October 2018, it appointed Joyce Goto, Vice President and Controller, to serve as its Principal Accounting Officer, and in July 2019, it appointed Steven Bosacki to serve as Chief Operating Officer. In January 2020, Dr. Tierney resigned and Mr. Bosacki was named as Chief Executive Officer and Principal Financial Officer. This lack of management continuity could adversely affect its ability to successfully manage its clinical trials and execute its growth strategy, as well as result in operational and administrative inefficiencies and added costs and may make recruiting for future management positions more difficult.

BioPharmX might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses, particularly in Campbell, California where it is headquartered. It could have difficulty attracting experienced personnel to BioPharmX and may be required to expend significant financial resources in its employee recruitment and retention efforts. Many of the other pharmaceutical companies with whom it competes for qualified personnel have greater and other resources, different risk profiles and longer histories in its industry than it does. They may also provide more diverse opportunities and better chances for career advancement. If BioPharmX is not able to attract and retain the necessary personnel to accomplish its business objectives, it may experience constraints that will harm its ability to implement its business strategy and achieve its business objectives.

In addition, BioPharmX has scientific and clinical advisors who assist us in formulating its development and clinical strategies. These advisors are not its employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. In addition, its advisors may have arrangements with other companies to assist those companies in developing products or technologies that may compete with it.

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BioPharmX's ability to utilize its net operating loss, or NOL, carryforwards and research and development income tax credit carryforwards may be limited.

BioPharmX has significant NOL carryforwards available to reduce future taxable income, if any, for federal and California state income tax purposes. If not utilized, both the federal and California state NOL carryforwards will begin expiring in 2030. Under Section 382 of the Internal Revenue Code of 1986, as amended, or Code, if a corporation undergoes an "ownership change," generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation's ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. It believes that, with the transactions that have occurred over the past three years, it may have triggered an "ownership change" limitation. BioPharmX has not conducted a formal NOL carryforward analysis. It may also experience ownership changes in the future as a result of subsequent shifts in its stock ownership. As a result, if it earns net taxable income, its ability to use its pre-change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

Risks Related to Development and Commercialization of BioPharmX Product Candidates and Regulatory Approval and Other Legal Compliance Matters

BioPharmX may be unable to obtain regulatory approval for its clinical-stage product candidates or other early-stage product candidates under applicable regulatory requirements. The FDA and foreign regulatory bodies have substantial discretion in the approval process, including the ability to delay, limit or deny approval of product candidates. The delay, limitation or denial of any regulatory approval would adversely impact commercialization, its potential to generate revenue, its business and its operating results.

BioPharmX is not permitted to market any of its current product candidates in the United States until it receives approval of a New Drug Application ("NDA") from the FDA. BioPharmX is also not permitted to market any of its current product candidates in any foreign countries until it receives the requisite approval from the applicable regulatory authorities of such countries. Failure to obtain such regulatory approvals will delay or prevent us from commercializing any of its current or future product candidates.

To gain approval to market a new drug, it must provide the FDA and/or foreign regulatory authorities with, among other things, extensive preclinical and clinical data that adequately demonstrates the safety and efficacy of the drug in its intended indication and information to demonstrate the adequacy of the manufacturing methods to assure the drug's identity, strength, quality and purity. The development and approval of new drug product candidates involves a long, expensive and uncertain process, and delay or failure can occur at any stage. A number of companies in the pharmaceutical and biopharmaceutical industries have suffered significant setbacks in clinical trials, including in Phase 3 clinical development, even after promising results in earlier preclinical studies or clinical trials. These setbacks have been caused by, among other things, observations during clinical trials regarding safety or efficacy, such as previously unreported adverse events. Success in preclinical testing and early clinical trials does not ensure success in later clinical trials, and the results of clinical trials by other parties may not be indicative of the results in trials it may conduct. Further, different results may be achieved depending upon which analysis population is used to analyze results. Regardless of the outcome of any Phase 2 trials, its Phase 3 trials, if commenced, may not be successful. For example, BioPharmX reported that findings on a secondary endpoint in its Phase 2b clinical trial of BPX-01, the reduction in Investigator's Global Assessment, or IGA, which was defined as the proportion of subjects with at least a two-grade reduction in IGA to clear "0" or almost clear "1", were not statistically significant. While the BPX-01 2% arm demonstrated a clear numerical trend compared to vehicle, the BPX-01 1% arm showed a smaller separation from vehicle. While this trial was not powered to demonstrate statistical significance

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for IGA and, therefore, IGA was not expected to be statistically significant, there is no guarantee that its Phase 3 trial, if commenced, will produce statistically significant results on IGA, which will serve as a co-primary endpoint with inflammatory lesion reduction despite its plans to adequately power the Phase 3 study to achieve this endpoint. In addition, topline results of a clinical trial do not necessarily predict final results. For example, the topline results of the Phase 2b clinical study of BPX-01 1% and 2% reported that both concentrations statistically significantly reduced inflammatory lesions, the primary endpoint. The information reflected its preliminary review of the topline primary efficacy results based solely upon information available to it at that time. Since topline reporting, adjustments for multiple comparisons were made, resulting in a change to the p-value for the 1% and 2% concentrations, rendering the results of the 1% concentration no longer statistically significant. It is always a risk that further review of results may change the conclusions drawn from the preliminary review to less positive results than it anticipated.

In the case of its topical product candidates, BPX-01 and BPX-04, BioPharmX is seeking to deliver sufficient concentrations of the API through the skin barrier to the targeted dermal tissue to achieve the intended therapeutic effect. The topical route of administration may involve new dosage forms, which can be difficult to develop and manufacture and may raise novel regulatory issues and result in development or review delays. For example, the antibiotic delivered in BPX-01 and BPX-04 is difficult to stabilize and prone to epimerization in most formulations and delivery systems and, as such, presents great challenges for transepidermal delivery. BioPharmX believes potential competitors have attempted to resolve these problems by stabilizing the antibiotic in certain lipophilic formulation, but the solutions either failed to adequately deliver the antibiotic or required overly high concentration (i.e., dosage) for clinical efficacy. As a result, safety and efficacy of BPX-01 and BPX-04 may be difficult to establish.

The FDA and foreign regulatory bodies have substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of product candidates for many reasons. The FDA or the applicable foreign regulatory body may:

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disagree with the design or implementation of one or more clinical trials;

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decline to deem a product candidate safe and effective for its proposed indication, or deem a product candidate's safety or other perceived risks to outweigh its clinical or other benefits;

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find that the data from preclinical studies and clinical trials does not sufficiently support approval, or the results of clinical trials may not meet the level of statistical or clinical significance required for approval;

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disagree with its interpretation of data from preclinical studies or clinical trials performed by BioPharmX or third parties;

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determine the data collected from clinical trials are insufficient to support the submission or approval of an NDA or other applicable regulatory filing;

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require additional preclinical studies or clinical trials;

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identify deficiencies in the formulation, quality control, labeling or specifications of its current or future product candidates;

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grant approval contingent on the performance of costly additional post-approval clinical trials;

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approve its current or any future product candidates for a more limited indication or a narrower patient population than it originally requested or with strong warnings that may affect marketability;

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decline to approve the labeling that it believes is necessary or desirable for the successful commercialization of its product candidates;

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require a Risk Evaluation and Mitigation Strategy, or REMS, with monitoring requirements or distribution limitations. For example, it is possible that the FDA could require distribution controls in the approval, if any, of its product candidates to prevent inadvertent exposure to pregnant women;

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decline to approve the manufacturing processes, controls or facilities of third-party manufacturers or testing labs with whom it contracts; or

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change its approval policies or adopt new regulations in a manner rendering its clinical data or regulatory filings insufficient for approval.

Any delay, limitation or denial of any regulatory approval would adversely impact commercialization, its potential to generate revenue, its business and its operating results.

Delays or difficulties in the enrollment of patients in clinical trials may result in additional costs and delays in BioPharmX's ability to generate significant revenues, and may delay or prevent its receipt of any regulatory approvals necessary to commercialize its planned and future products.

BioPharmX may not be able to initiate or continue clinical trials for its product candidates if it is unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. In addition, some of its competitors have completed clinical trial and product registration for product candidates that treat the same indications as its product candidates, and patients who are otherwise eligible for its clinical trials may instead enroll in clinical trials of its competitors' product candidates.

Patient enrollment is affected by other factors including:

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the severity of the disease under investigation;

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the eligibility criteria for the study in question;

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the perceived risks and benefits of the product candidate under study;

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the efforts to facilitate timely enrollment in clinical trials;

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the patient referral practices of physicians;

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the ability to monitor patients adequately during and after treatment; and

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the proximity and availability of clinical trial sites for prospective patients.