For once, Nuvo not meeting a milestone means good news to long-time shareholders...20% dilution avoided.


Pliaglis Milestone Shares
The Company had an obligation to the former shareholders of ZARS to issue up to 114.6 million Nuvo shares upon the achievement of predefined milestones.  The most significant milestone related to Pliaglis.  The achievement of this milestone (the "Pliaglis Milestone") required that both the following events occur prior to December 31, 2012 (i) the re-approval of Pliaglis by the FDA and the first commercial sale of Pliaglis in the U.S. by Galderma after such re-approval, and (ii) the approval of Pliaglis by the Germany'sFederal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte) BfArM and the first commercial sale of Pliaglis in Europe by Galderma (Pliaglis Milestone).  The Pliaglis Milestone was not achieved.  In addition, there were 2 additional milestones representing 13.25 million shares each that were contingent upon the achievement of the Pliaglis Milestone.  Therefore, the 101.3 million remaining Milestone Shares are no longer issuable and the Company has no further obligations to the ZARS' former shareholders to issue the Milestone Shares.