MATTERS TO BE CONSIDERED AT
SPECIAL MEETING
PROPOSAL ONE:
APPROVAL OF AN AMENDMENT TO OUR THIRD AMENDED AND
RESTATED CERTIFICATE
OF INCORPORATION, AS AMENDED, TO INCREASE THE
NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
Our Charter currently authorizes us to issue a total of 50,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. Our
Board has approved, and is seeking stockholder approval of, an
amendment to the Charter (the “Amendment”) to implement an increase
in the number of shares of authorized Common Stock from 50,000,000
shares to 80,000,000.
On October 9, 2020, our Board unanimously determined that the
Amendment is advisable and in the best interests of the Company and
our stockholders and recommended that our stockholders approve the
Amendment. In accordance with the General Corporation Law of the
State of Delaware, we are hereby seeking approval of the Amendment
by our stockholders.
No other changes to the Charter are being proposed, and the
Amendment will not modify the number of shares held by, or the
rights of, existing stockholders.
The full text of the proposed Amendment is attached to this proxy
statement as Appendix A.
Reasons for the Authorized Shares Amendment
The Board is proposing the Amendment to increase the number of
authorized shares of our Common Stock in order to provide the
Company with the ability to raise the capital necessary to continue
and grow its operations.
Of the 50,000,000 shares of Common Stock that are currently
authorized to be issued under the Charter, as of October 28,
2020,
[ ]
shares are issued and outstanding,
[ ]
are reserved for issuance under our equity plans, and
[ ]
are issuable upon the exercise of our outstanding warrants. Of the
5,000,000 shares of Preferred Stock that are currently authorized
to be issued under the Charter, none are issued and outstanding,
and there are currently no outstanding rights to acquire any
Preferred Stock. The Board believes that the increase in the number
of authorized shares of Common Stock will provide sufficient
reserves of authorized but unissued shares (i.e.,
[ ]
shares of Common Stock and 5,000,000 shares of Preferred Stock) to
generally support our growth and to provide flexibility for future
corporate needs, including but not limited to grants under equity
compensation plans, stock splits, financings, potential strategic
transactions, as well as other general corporate transactions. The
additional authorized shares would enable us to issue shares in the
future in a timely manner and under circumstances we consider
favorable without incurring the risk, delay and potential expense
incident to obtaining stockholder approval for a particular
issuance.
Increasing the number of authorized shares of Common Stock will not
alter the number of shares of Common Stock presently issued and
outstanding or reserved for issuance and will not change the
relative rights and privileges of the shares of Common Stock
previously authorized, issued and outstanding.
Potential Adverse Effects of Proposed Amendment
If this Amendment is adopted, the additional authorized shares of
Common Stock can be issued or reserved with the approval of the
Board at times, in amounts and upon terms that the Board may
determine, without additional stockholder approval, except as may
be required by applicable law. The issuance of any of the
additional authorized shares of Common Stock may dilute the
proportionate ownership and voting power of existing stockholders,
and their issuance, or the possibility of their issuance, may
depress the market price of our Common Stock. Other than pursuant
to the terms of our outstanding stock options and warrants, we do
not have any existing plans, proposals or arrangements, written or
otherwise, to issue any of the additional authorized shares of
Common Stock.
6
