Filed by the
Registrant ☒ Filed by a Party other than the
Registrant ☐
PROXY
STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
The Board of Directors (the Board) of Gevo, Inc. (the Company, we, us or our) is
soliciting proxies for use at the Special Meeting of Stockholders of the Company (the Special Meeting) to be held on Wednesday, December 14, 2016, at 2:00 p.m., local time, at our offices located at 345 Inverness Drive South,
Building C, Suite 310, Englewood, Colorado 80112.
On or about October , 2016, we are mailing to most of our
stockholders a Notice of Internet Availability of Proxy Materials (the Notice). The Notice contains instructions on how to access this proxy statement over the Internet, which is available
at
http://materials.proxyvote.com/374396
. The Notice also contains instructions on how to request a paper copy of our proxy materials and a form of proxy card or voting instruction card. The Notice was sent to stockholders who owned our
common stock at the close of business on the Record Date. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Special Meeting. Please read it carefully.
QUESTIONS AND ANSWERS
Q:
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Who may vote at the meeting?
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A:
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Our Board has fixed October 26, 2016 as the Record Date for the Special Meeting. Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Special Meeting. Each
stockholder is entitled to one vote for each share of our common stock held on all matters to be voted on. As of the Record Date, shares of common stock
were outstanding and entitled to vote at the Special Meeting.
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Q:
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What proposals will be voted on at the meeting?
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A:
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There is one proposal scheduled to be voted on at the Special Meeting:
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The approval of an
amendment to the Companys Amended and Restated Certificate of Incorporation (the Certificate of Incorporation) to effect a reverse stock split of the outstanding shares of our common stock by a ratio of not less than one-for-two
and not more than one-for-twenty at any time on or prior to January 6, 2017, with the exact ratio to be set at a whole number within this range by the Board in its sole discretion (the Proposal).
We will also consider any other business that properly comes before the Special Meeting. As of the Record Date, we are not aware of any other
matters to be submitted for consideration at the Special Meeting. If any other matters are properly brought before the Special Meeting, the persons named in the enclosed proxy card or voter instruction card will vote the shares they represent using
their best judgment.
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Q:
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Why is this proposal being made at the meeting?
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A:
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The Board believes that the reverse stock split is necessary to maintain our listing on the NASDAQ Capital Market, and to provide us with resources and flexibility, with respect to our capital, sufficient to execute our
business plans and strategy, and improve the marketability and liquidity of our common stock.
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Q:
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What is the quorum requirement for the meeting?
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A:
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A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of our outstanding shares of common stock are represented in person at the Annual Meeting or by
proxy. At the close of business on the Record Date for the Special Meeting, there were shares of common stock outstanding. Thus, a total of
shares are entitled to vote at the Special Meeting and holders of common stock representing at least
votes must be represented at the Special Meeting in person or by proxy to have a quorum. The inspector of elections appointed for the meeting by our
Board will count the shares represented in person or by proxy at the Special Meeting to determine whether or not a quorum is present.
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Shares will be counted as present at the Special Meeting if you:
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are present and entitled to vote in person at the Special Meeting; or
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have voted over the Internet or by telephone, or properly submitted a proxy card or voting instruction card.
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Both abstentions and broker non-votes (as described below) will be included in the calculation of the number of shares considered to be present
at the meeting for the purpose of determining the presence of a quorum. In the event that we are unable to obtain a quorum, the chairperson of the meeting or a majority of the shares present at the Special Meeting may adjourn the Special Meeting to
another date.
Q:
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What does it mean if I receive more than one Notice?
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A:
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If you received more than one Notice, each containing a different control number, this means that you have multiple accounts holding shares of our common stock. These may include accounts with our transfer agent,
American Stock Transfer & Trust Company, and accounts with a broker, bank or other holder of record. Please vote all proxy cards for which you receive a Notice to ensure that all of your shares are voted.
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Q:
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How can I get electronic access to the proxy materials?
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A:
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You can view the proxy materials on the Internet at
http://materials.proxyvote.com/374396
. Please have your control number available. Your control number can be found on your Notice(s).
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Q:
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How may I vote my shares in person at the meeting?
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A:
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If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the stockholder of record. As the
stockholder of record, you have the right to vote in person at the Special Meeting.
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If your shares are held in an account at
a brokerage firm, bank, dealer or other similar organization, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you are also invited to attend the Special Meeting. However, since a beneficial
owner is not the stockholder of record, you may not vote these shares in person at the Special Meeting unless you obtain a legal proxy from your broker, bank or other agent that holds your shares, giving you the right to vote the shares
at the Special Meeting.
The Special Meeting will be held at our offices located at 345 Inverness Drive South, Building C,
Suite 310, Englewood, Colorado 80112. You can find directions to our offices on our website at http://www.gevo.com/contact.
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Q:
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How can I vote my shares without attending the meeting?
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A:
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Whether you hold shares directly as a registered stockholder of record or beneficially in street name, you may vote without attending the Special Meeting. You may vote by granting a proxy or, for shares held
beneficially in street name, by submitting voting instructions to your broker, bank or other agent. In most cases, you will be able to do this by using the Internet, by telephone or by mail if you received a printed set of the proxy materials.
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By Internet
If you have Internet access, you may vote your shares by logging into the secure website,
which will be listed on your Notice and following the instructions provided.
By Telephone
If you have telephone
access, you may vote your shares by calling the toll-free number listed on the proxy card and following the instructions provided.
By Mail
If you requested printed copies of the proxy materials, you may submit your proxy by mail by signing your
proxy card if your shares are registered or, for shares held beneficially in street name, by following the voting instructions included by your broker, bank or other agent, and mailing it in accordance with the instructions provided. If you provide
specific voting instructions, your shares will be voted as you have instructed.
Votes submitted via the Internet or by telephone must be
received by 11:59 p.m. Eastern Daylight Time on December 13, 2016. Submitting your proxy via the Internet or by telephone will not affect your right to vote in person should you decide to attend the Special Meeting. Even if you plan to
attend the Special Meeting, we encourage you to submit your proxy to vote your shares in advance of the Special Meeting.
We provide
Internet and telephone proxy voting with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet and telephone access, such
as usage charges from Internet access providers and telephone companies.
Q:
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What happens if I do not give specific voting instructions?
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A:
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Registered Stockholder of Record
If, at the close of business on the Record Date, you are a registered stockholder of record and you indicate when voting on the Internet or by telephone
that you wish to vote as recommended by the Board, or sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this
proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Special Meeting.
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Beneficial Owners of Shares Held in Street Name
If, at the close of business on the Record Date, you are a beneficial
owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of the NASDAQ Stock Market LLC (NASDAQ), the organization that holds your shares may
generally vote at its discretion on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization will
inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a broker non-vote. Because the required vote for the Proposal is based on the
number of shares of common stock issued and outstanding, broker non-votes will have the same effect as a vote AGAINST the Proposal.
Q:
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Is the ballot measure considered routine or non-routine?
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A:
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We believe that the Proposal, regarding the amendment of our Certificate of Incorporation to effect a reverse stock split, will be considered a routine matter under applicable rules. A broker, bank or other
holder of record may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with the Proposal.
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3
Q:
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How can I revoke my proxy and change my vote after I return my proxy card?
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A:
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You may revoke your proxy and change your vote at any time before the final vote at the Special Meeting. If you are a stockholder of record, you may do this by signing and submitting a new proxy card with a later
date, by voting by using the Internet or by telephone, either of which must be completed by 11:59 p.m. Eastern Daylight Time on December 13, 2016 (your latest Internet or telephone proxy will be counted); or by attending the meeting and
voting in person. Attending the Special Meeting alone will not revoke your proxy unless you specifically request your proxy to be revoked. If you hold shares through a broker, bank or other agent, you must contact that broker, bank or other agent
directly to revoke any prior voting instructions.
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Q:
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Who will pay the costs of this proxy solicitation?
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A:
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We will bear the entire cost of solicitation of proxies, including maintenance of the Internet website used to access the proxy materials; maintenance of the Internet website used to vote; and preparation,
assembly, printing and mailing of this proxy statement, the proxy card and any additional information furnished to our stockholders who request paper copies of such materials. We have retained D.F. King & Co., Inc. to assist in the
solicitation of proxies. We expect to pay D.F. King & Co., Inc. $7,500, plus reimbursement of reasonable expenses. We and our directors, officers and regular employees may solicit proxies by mail, personally, by telephone or by other
appropriate means. No additional compensation will be paid to directors, officers or other regular employees for such services. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares
of our common stock in their names for others to send proxy materials to and obtain proxies from the beneficial owners of such shares, and we may reimburse them for their costs in forwarding the solicitation materials to such beneficial
owners.
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Q:
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Where can I find the voting results of the meeting?
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A:
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The preliminary voting results will be announced at the Special Meeting. The final voting results will be reported in a current report on Form 8-K, which will be filed with the Securities and Exchange Commission
(the SEC) within four business days after the Special Meeting. If our final voting results are not available within four business days after the Special Meeting, we will file a current report on Form 8-K reporting the preliminary voting
results and subsequently file the final voting results in an amendment to the current report on Form 8-K within four business days after the final voting results are known to us.
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IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR
THE SPECIAL MEETING TO BE HELD ON DECEMBER 14, 2016
:
The Notice of Special Meeting, proxy
statement and proxy card are available online at
http://materials.proxyvote.com/374396
.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about the beneficial ownership of our common stock as of September 30, 2016 by (i) each
of our directors; (ii) each of our named executive officers (as defined in Item 402(a)(3) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the Exchange Act)); (iii) all of our directors and
executive officers as a group; and (iv) each person or group known by us to own beneficially more than 5% of our outstanding common stock.
Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o Gevo, Inc., 345 Inverness Drive South, Building
C, Suite 310, Englewood, Colorado 80112. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons
and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.
This table is based upon information supplied by our officers, directors and the Schedules 13D and 13G that have been filed with the
SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power
and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days of September 30, 2016 through the exercise of any stock option or other right. The inclusion of such shares, however,
does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of, or receives the economic benefit from, such shares and we did not deem these shares outstanding for the purpose of computing the percentage
ownership of any other person. Applicable percentages are based on 131,769,984 shares of common stock outstanding on September 30, 2016.
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Name and address of beneficial owner
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Number of
shares
beneficially
owned
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Percentage of
shares
beneficially
owned
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5% Stockholders & Affiliates:
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%
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Named executive officers and directors:
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Patrick R. Gruber
(1)
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172,868
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*
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Christopher M. Ryan
(2)
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101,399
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*
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Michael J. Willis
(3)
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72,240
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*
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Geoffrey T. Williams, Jr.
(4)
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6,944
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*
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Gregory W. Roda
(5)
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23,090
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*
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Ruth I. Dreessen
(6)
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22,888
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*
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William H. Baum
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*
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Andrew J. Marsh
(7)
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9,708
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*
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Gary W. Mize
(8)
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23,330
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*
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Johannes Minho Roth
(9)
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9,708
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*
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All executive officers and directors as a group (eleven persons)
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442,175
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*
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*
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Represents beneficial ownership of less than 1% of the outstanding shares of our common stock.
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(1)
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Includes 129,365 shares issuable pursuant to stock options exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of September 30, 2016.
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(2)
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Includes 61,867 shares issuable pursuant to stock options exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of September 30, 2016.
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(3)
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Includes 41,475 shares issuable pursuant to stock options and common stock warrants exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of
September 30, 2016.
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(4)
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Represents 6,944 shares issuable pursuant to stock options exercisable within 60 days of September 30, 2016.
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(5)
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Includes 14,149 shares issuable pursuant to stock options and common stock warrants exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of
September 30, 2016.
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(6)
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Includes 11,369 shares issuable pursuant to stock options and common stock warrants exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of
September 30, 2016.
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(7)
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Includes 6,549 shares issuable pursuant to stock options exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of September 30, 2016.
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(8)
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Includes 12,091 shares issuable pursuant to stock options and common stock warrants exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of
September 30, 2016.
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(9)
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Includes 6,549 shares issuable pursuant to stock options exercisable within 60 days of September 30, 2016 and restricted stock units that vest within 60 days of September 30, 2016. Mr. Roth is
the Chief Executive Officer and a member of the board of directors of FiveT Capital Holding AG. FiveT Investment Management, an affiliate of FiveT Capital Holding AG, owns common stock warrants exercisable within 60 days of September 30,
2016 to purchase 200,000 shares of common stock of the Company. Mr. Roth disclaims beneficial ownership of the warrants and the shares issuable pursuant to the warrants owned by FiveT Capital Management, except to the extent of his pecuniary
interest therein.
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(10)
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Based solely on information and records available to the Company.
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6
THE PROPOSAL: AMENDMENT TO THE COMPANYS CERTIFICATE OF INCORPORATION
TO AUTHORIZE THE BOARD TO EFFECT A REVERSE STOCK SPLIT OF THE
COMPANYS COMMON STOCK
Overview
The Board has determined that it is advisable and in the Companys and its stockholders best interests that the Board be
granted the authority to implement a reverse stock split of the outstanding shares of our common stock at any time on or prior to January 6, 2017, at a ratio of not less than one-for-two and not more than one-for-twenty, with the exact ratio to
be set at a whole number within this range by the Board in its sole discretion. Accordingly, stockholders are asked to approve an amendment to our Certificate of Incorporation to effect a reverse stock split consistent with such terms and to grant
authorization to the Board to determine, in its sole discretion, whether to implement the reverse stock split, as well as its specific timing and ratio.
The Board strongly believes that the reverse stock split is necessary for the following reasons:
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1.
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To maintain our listing on the NASDAQ Capital Market; and
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2.
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To provide us with resources and flexibility, with respect to our capital, sufficient to execute our business plans and strategy, and improve the marketability and liquidity of our common stock.
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Accordingly, the Board has approved a resolution proposing an amendment to our Certificate of Incorporation to allow for
the reverse stock split and directed that it be submitted for approval at the Special Meeting.
Should we receive the required stockholder
approval for the Proposal, the Board will have the sole authority to elect, at any time on or prior to January 6, 2017, and without the need for any further action on the part of our stockholders: (i) whether or not to effect a reverse
stock split; and (ii) if so, the number of whole shares of our common stock, between and including two and twenty, which will be combined into one share of our common stock. Notwithstanding approval of the reverse stock split by the
stockholders, the Board may, in its sole discretion, abandon the proposed amendment and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect the reverse stock split, as permitted under
Section 242(c) of the General Corporation Law of the State of Delaware. If the Board does not implement a reverse stock split on or prior to January 6, 2017, stockholder approval again would be required prior to implementing any reverse
stock split.
In determining which reverse stock split ratio to implement, if any, following receipt of stockholder approval, the Board
may consider, among other things, various factors, such as:
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the historical trading price and trading volume of our common stock;
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the then-prevailing trading price and trading volume of our common stock and the expected impact of the reverse stock split on the trading market for our common stock in the short- and long-term;
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our ability to continue our listing on the NASDAQ Capital Market;
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which reverse stock split ratio would result in the least administrative cost to us; and
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prevailing general market and economic conditions.
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Failure to approve the amendment could
have serious, adverse effects on the Company and its stockholders. We could be delisted from the NASDAQ Capital Market because shares of our common stock may continue to trade below the requisite $1.00 per share price needed to maintain our listing.
If the NASDAQ Capital Market delists our common stock, our shares may then trade on the OTC Bulletin Board or other small trading markets, such as the pink sheets. In that event, our common stock could trade thinly as a microcap or penny stock,
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adversely decrease to nominal levels of trading and become avoided by retail and institutional investors, resulting in the impaired liquidity of our shares. Furthermore, without a reasonable
number of authorized shares available for issuance, we may be unable to raise additional capital, establish strategic relationships with other companies or expand our business through acquisitions.
The text of the form of the proposed amendment to our Certificate of Incorporation, which assumes the approval of the Proposal and that the
Board decides to implement the reverse stock split, is attached hereto as
Appendix A
. By approving this Proposal, stockholders will approve an amendment to our Certificate of Incorporation pursuant to which any whole number of outstanding and
treasury shares between and including two and twenty could be combined into one share of our common stock, and authorize the Board to file such amendment, as determined by the Board in the manner described herein. The Board may also elect not to
undertake any reverse stock split.
Certain of our officers and directors have an interest in the reverse stock split as a result of their
ownership of common stock, as set forth in the section entitled
Security Ownership of Certain Beneficial Owners and Management
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Reasons for the Reverse Stock Split
To maintain
our listing on the NASDAQ Capital Market
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By potentially increasing our stock price, a reverse stock split
would reduce the risk that our common stock could be delisted from the NASDAQ Capital Market. To continue our listing on the NASDAQ Capital Market, we must comply with NASDAQ Listing Rules, which requirements include a minimum bid price of $1.00 per
share. On January 25, 2016, we received a deficiency letter from the Listing Qualifications Department of the NASDAQ Stock Market, notifying us that, for the prior 30 consecutive business days, the closing bid price of our common stock was not
maintained at the minimum required closing bid price of at least $1.00 per share as required for continued listing on the NASDAQ Capital Market. In accordance with NASDAQ Listing Rules, we had an initial compliance period of 180 calendar days, to
regain compliance with this requirement. On July 26, 2016, the NASDAQ Stock Market granted us an additional 180 calendar days, or until January 23, 2017, to regain compliance. To regain compliance, the closing bid price of our common stock
must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before January 23, 2017. The determination by the NASDAQ Stock Market to grant the second compliance period was based on our meeting of the continued
listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the NASDAQ Capital Market, with the exception of the bid price requirement, and our written notice of our intention to cure the
deficiency during the second compliance period by effecting a reverse stock split, if necessary. If we do not regain compliance by that date in accordance with terms of the notice, the NASDAQ Stock Market will provide written notice that our
securities will be subject to delisting from the NASDAQ Capital Market. In that event, we may appeal the decision to a NASDAQ Listing Qualifications Panel (the Panel). In the event of an appeal, our securities would remain listed on the
NASDAQ Capital Market pending a written decision by the Panel following a hearing. In the event that the Panel determines not to continue our listing and we are delisted from the NASDAQ Capital Market, our common stock may be delisted and trade on
the OTC Bulletin Board or other small trading markets, such as the pink sheets.
The Board has considered the potential harm to the
Company and its stockholders should the NASDAQ Stock Market delist our common stock from the NASDAQ Capital Market. Delisting could adversely affect the liquidity of our common stock since alternatives, such as the OTC Bulletin Board and the pink
sheets, are generally considered to be less efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market. Many investors likely would
not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. Furthermore, it would be a fundamental change under the
indentures governing our convertible notes if our common stock is not
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listed on a national securities exchange. In such circumstance, each holder of the convertible notes would have the right to require the Company to repurchase such holders convertible notes
at 100% plus accrued and unpaid interest through, but not including, the repurchase date. We would also be required to pay the holders of the our 10% convertible senior secured notes due 2017 (the 2017 Notes) a fundamental change
make-whole payment equal to the aggregate amount of interest that would have otherwise been payable on such notes, to, but not including, the maturity date of such notes.
The Board believes that a reverse stock split is a potentially effective means for us to maintain compliance with NASDAQ Listing Rules and to
avoid, or at least mitigate, the likely adverse consequences of our common stock being delisted from the NASDAQ Capital Market by producing the immediate effect of increasing the bid price of our common stock.
To provide us with resources and flexibility with respect to our capital sufficient to execute our business plans and strategy.
As of September 30, 2016, we had 131,769,984 shares of common stock outstanding, 35,887,676 shares of common stock reserved for issuance
and 82,342,340 authorized shares of common stock remaining unissued and unreserved. The Board wishes to increase the number of unused authorized common shares by keeping the authorized shares of common stock at 250,000,000 and decreasing the
outstanding shares through the reverse stock split. This increase in unissued and unreserved authorized common stock will provide us greater flexibility with respect to our capital structure for various purposes as the need may arise from time to
time. These purposes may include: raising capital, establishing strategic relationships with other companies, expanding our business through the acquisition of other businesses or products and providing equity incentives to employees, officers or
directors.
The Board also believes that the increased market price of our common stock expected as a result of implementing a reverse
stock split could improve the marketability and liquidity of our common stock and will encourage interest and trading in our common stock. A reverse stock split could allow a broader range of institutions to invest in our common stock (namely, funds
that are prohibited from buying stocks whose price is below a certain threshold), potentially increasing trading volume and liquidity of our common stock. A reverse stock split could help increase analyst and broker interest in our common stock as
their policies can discourage them from following or recommending companies with low stock prices. Because of the trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies
and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may make the processing of trades in
low-priced stocks economically unattractive to brokers. Additionally, because brokers commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, a low average price per
share of our common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were higher.
The Board does not intend for this transaction to be the first step in a series of plans or proposals of a going private
transaction within the meaning of Rule 13e-3 of the Exchange Act.
Risks of the Proposed Reverse Stock Split
We cannot assure you that the proposed reverse stock split will increase our stock price and have the desired effect of maintaining compliance with
NASDAQ Listing Rules
.
The Board expects that a reverse stock split of our common stock will increase the
market price of our common stock so that we are able to regain and maintain compliance with the NASDAQ minimum bid price. However, the effect of a reverse stock split upon the market price of our common stock cannot be predicted with
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any certainty, and the history of similar stock splits for companies in like circumstances is varied. It is possible that (i) the per share price of our common stock after the reverse stock
split will not rise in proportion to the reduction in the number of shares of our common stock outstanding resulting from the reverse stock split, (ii) the market price per post-reverse stock split share may not exceed or remain in excess of
the $1.00 minimum bid price for a sustained period of time or (iii) the reverse stock split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks, or result in increased trading
volume or liquidity. Even if we effect a reverse stock split, the market price of our common stock may decrease due to factors unrelated to the stock split. In any case, the market price of our common stock will be based on other factors which may
be unrelated to the number of shares outstanding, including our future performance. If the reverse stock split is consummated and the trading price of our common stock declines, the percentage decline as an absolute number and as a percentage of our
overall market capitalization may be greater than would occur in the absence of the reverse stock split. Even if the market price per post-reverse stock split share of our common stock remains in excess of $1.00 per share, we may be delisted due to
a failure to meet other continued listing requirements, including NASDAQ requirements related to the minimum number of shares that must be in the public float and the minimum market value of the public float.
The proposed reverse stock split may decrease the liquidity of our stock
.
The liquidity of our capital stock may be harmed by the proposed reverse stock split given the reduced number of shares that would be
outstanding after the reverse stock split, particularly if the stock price does not increase as a result of the reverse stock split.
In
addition, investors might consider the increased proportion of unissued authorized shares to issued shares to have an anti-takeover effect under certain circumstances, since the proportion allows for dilutive issuances which could prevent certain
stockholders from changing the composition of the Board or render tender offers for a combination with another entity more difficult to successfully complete. The Board does not intend for the reverse stock split to have any anti-takeover effects.
Principal Effects of the Reverse Stock Split
After the effective date of the proposed reverse stock split, each stockholder will own a reduced number of shares of our common stock. Except
to the extent that whole shares will be exchanged in lieu of fractional shares as described below, the proposed reverse stock split will affect all stockholders uniformly and will not affect any stockholders percentage ownership interest in us
and proportionate voting rights and other rights and preferences of the holders of our common stock will not be affected by the proposed reverse stock split. The number of stockholders of record also will not be affected by the proposed reverse
stock split, except to the extent that whole shares will be exchanged in lieu of fractional shares as described below.
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The following table contains approximate information relating to our common stock under the
proposed reverse stock split ratios, without giving effect to any adjustments for fractional shares of common stock, as of September 30, 2016:
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Status
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Number of
Shares of
Common Stock
Authorized
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Number of
Shares of
Common
Stock Issued
and
Outstanding
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Number of
Shares of
Common
Stock Reserved
for
Issuance(1)
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Number of
Shares of
Common
Stock Authorized
but Unissued and
Unreserved
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Pre-Reverse Stock Split
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250,000,000
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131,769,984
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35,887,676
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82,342,340
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Post-Reverse Stock Split 1:2
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250,000,000
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65,884,992
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17,943,838
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166,171,170
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Post-Reverse Stock Split 1:3
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250,000,000
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43,923,328
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11,962,559
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194,114,113
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Post-Reverse Stock Split 1:4
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250,000,000
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32,942,496
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8,971,919
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208,085,585
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Post-Reverse Stock Split 1:5
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250,000,000
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26,353,997
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7,177,535
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216,468,468
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Post-Reverse Stock Split 1:6
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250,000,000
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21,961,664
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5,981,279
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222,057,057
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Post-Reverse Stock Split 1:7
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250,000,000
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18,824,283
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5,126,811
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226,048,906
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Post-Reverse Stock Split 1:8
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250,000,000
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16,471,248
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4,485,959
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229,042,793
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Post-Reverse Stock Split 1:9
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250,000,000
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14,641,109
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3,987,520
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231,371,371
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Post-Reverse Stock Split 1:10
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250,000,000
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13,176,998
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3,588,768
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233,234,234
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Post-Reverse Stock Split 1:11
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250,000,000
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11,979,089
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3,262,516
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234,758,395
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Post-Reverse Stock Split 1:12
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250,000,000
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10,980,832
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2,990,640
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236,028,528
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Post-Reverse Stock Split 1:13
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250,000,000
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10,136,153
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2,760,590
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237,103,257
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Post-Reverse Stock Split 1:14
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250,000,000
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9,412,142
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2,563,405
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238,024,453
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Post-Reverse Stock Split 1:15
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250,000,000
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8,784,666
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2,392,512
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238,822,823
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Post-Reverse Stock Split 1:16
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250,000,000
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8,235,624
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2,242,980
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239,521,396
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Post-Reverse Stock Split 1:17
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250,000,000
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7,751,176
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2,111,040
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240,137,785
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Post-Reverse Stock Split 1:18
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250,000,000
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7,320,555
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1,993,760
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240,685,686
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Post-Reverse Stock Split 1:19
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250,000,000
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6,935,262
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1,888,825
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241,175,913
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Post-Reverse Stock Split 1:20
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250,000,000
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6,588,499
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1,794,384
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241,617,117
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(1)
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The pre-reverse stock split number of shares of our common stock reserved for future issuance includes the following, as of September 30, 2016:
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32,795,548 shares reserved for issuance pursuant to outstanding options, restricted stock units, warrants or rights to acquire from the Company, or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance by the Company of, common stock;
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3,016,099 shares of common stock available for future grant under our 2010 Stock Incentive Plan (as amended, the 2010 Plan); and
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76,029 shares of common stock available for issuance pursuant to our Employee Stock Purchase Plan.
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If the proposed reverse stock split is implemented, it will increase the number of our stockholders who own odd lots of fewer than
100 shares of our common stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock.
After the effective date of the reverse stock split, our common stock would have a new committee on uniform securities identification
procedures (CUSIP) number, a number used to identify our common stock.
Our common stock is currently registered under Section 12(b)
of the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split will not affect the registration of our common stock under the Exchange Act. Our common stock would
continue to be reported on the NASDAQ Capital Market under the symbol GEVO, although it is likely that the NASDAQ Stock Market would add the letter D to the end of the trading symbol for a period of twenty trading days after
the effective date of the reverse stock split to indicate that the reverse stock split had occurred.
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Effect on Convertible Notes and Warrants
The reverse stock split will require that proportionate adjustments be made to the conversion rate, the per share exercise price and the number
of shares issuable upon the exercise or conversion of the following outstanding securities issued by the Company, in accordance with the reverse stock split ratio determined by the Board (all figures are as of September 30, 2016):
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$26.1 million in outstanding principal balance of our 7.5% convertible senior notes due 2022;
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$11.0 million in outstanding principal balance of 2017 Notes; and
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warrants to purchase 29,385,497 shares of common stock.
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The adjustments to the above
securities, as required by the reverse stock split and in accordance with the reverse stock split ratio as determined by the Board, would result in approximately the same aggregate price being required to be paid under such securities upon exercise,
and approximately the same value of shares of common stock being delivered upon such exercise or conversion, immediately following the reverse stock split as was the case immediately preceding the reverse stock split.
Effect on 2010 Plan and Employee Stock Purchase Program
As of September 30, 2016, we had 715,119 shares of common stock reserved for issuance pursuant to the exercise of outstanding options or
settlement of outstanding restricted stock units issued under our 2006 Omnibus Securities and Incentive Plan and our 2010 Plan. Pursuant to the terms of these plans, the Board or a committee thereof, as applicable, will adjust the number of shares
underlying outstanding awards, the exercise price per share of outstanding stock options and other terms of outstanding awards issued pursuant to the plans to equitably reflect the effects of the reverse stock split. The number of shares subject to
vesting under restricted stock awards will be similarly adjusted, subject to our treatment of fractional shares.
Furthermore, the number
of shares available for future grant under the 2010 Plan and the number of shares available for purchase under our Employee Stock Purchase Plan will be similarly adjusted.
Effective Date
The proposed reverse
stock split would become effective on the date of filing of a certificate of amendment to our Certificate of Incorporation with the office of the Secretary of State of the State of Delaware. On the effective date, shares of our common stock issued
and outstanding and shares of common stock held in treasury, in each case, immediately prior thereto will be combined and converted, automatically and without any action on the part of the stockholders, into new shares of common stock in accordance
with the reverse stock split ratio determined by the Board within the limits set forth in this proposal. If the proposed amendment is not approved by our stockholders, a reverse stock split will not occur.
Treatment of Fractional Shares
No
fractional shares would be issued if, as a result of the reverse stock split, a registered stockholder would otherwise become entitled to a fractional share. Instead, stockholders who otherwise would be entitled to receive fractional shares because
they hold a number of shares not evenly divisible by the ratio of the reverse stock split will automatically be entitled to receive an additional share of common stock. In other words, any fractional share will be rounded up to the nearest whole
number.
Record and Beneficial Stockholders
If the reverse stock split is authorized by the stockholders and the Board elects to implement the reverse stock split, stockholders of record
holding some or all of their shares of our common stock electronically in
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book-entry form under the direct registration system for securities will receive a transaction statement at their address of record indicating the number of shares of our common stock they hold
after the reverse stock split. Non-registered stockholders holding our common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the consolidation than
those that would be put in place by us for registered stockholders. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.
If the reverse stock split is authorized by the stockholders and the Board elects to implement the reverse stock split, stockholders of record
holding some or all of their shares in certificate form will receive a letter of transmittal, as soon as practicable after the effective date of the reverse stock split. Our transfer agent will act as exchange agent for the purpose of
implementing the exchange of stock certificates. Holders of pre-reverse stock split shares will be asked to surrender to the exchange agent certificates representing pre-reverse stock split shares in exchange for post-reverse stock split shares,
including whole shares to be issued in lieu of fractional shares (if any) in accordance with the procedures to be set forth in the letter of transmittal. Until surrender, each certificate representing shares before the reverse stock split would
continue to be valid and would represent the adjusted number of shares based on the exchange ratio of the reverse stock split rounded up to the nearest whole share. No new post-reverse stock split share certificates, including those representing
whole shares to be issued in lieu of fractional shares, will be issued to a stockholder until such stockholder has surrendered such stockholders outstanding certificate(s) together with the properly completed and executed letter of transmittal
to the exchange agent.
STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY
ARE REQUESTED TO DO SO.
Accounting Consequences
The par value per share of our common stock would remain unchanged at $0.01 per share after the reverse stock split. As a result, on the
effective date of the reverse stock split, the stated capital on our balance sheet attributable to our common stock will be reduced proportionally, based on the exchange ratio of the reverse stock split, from its present amount, and the additional
paid-in capital account shall be credited with the amount by which the stated capital is reduced. The per share common stock net income or loss and net book value will be increased because there will be fewer shares of common stock outstanding. The
shares of common stock held in treasury, if any, will also be reduced proportionately based on the exchange ratio of the reverse stock split. We will reclassify prior period per share amounts and the Consolidated Statements of Stockholders
Equity for the effect of the reverse stock split for any prior periods in our financial statements and reports such that prior periods are comparable to current period presentation. We do not anticipate that any other accounting consequences would
arise as a result of the reverse stock split.
No Appraisal Rights
Our stockholders are not entitled to dissenters or appraisal rights under the General Corporation Law of the State of Delaware with
respect to the Proposal and we will not independently provide the stockholders with any such right if the reverse stock split is implemented.
Material
Federal U.S. Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material United States federal
income tax consequences of the reverse stock split to a stockholder that is a U.S. Holder, as defined below. This summary does not purport to be a complete discussion of all of the possible federal income tax consequences of the reverse
stock split and is included for general information only. Further, it does not address any state, local or foreign income or other tax consequences, including gift or estate taxes and the Medicare contribution tax on net investment income. Also, it
does not address the tax consequences to stockholders that are subject to special tax rules, such as banks,
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insurance companies, regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers, tax-exempt entities, stockholders that received
common stock as compensation for services or pursuant to the exercise of an employee stock option, or stockholders who have held, or will hold, stock as part of a straddle, hedging or conversion transaction for federal income tax purposes. This
summary also assumes that you are a U.S. Holder who has held, and will hold, shares of common stock as a capital asset, as defined in the Internal Revenue Code of 1986, as amended (the Code), i.e., generally, property held
for investment. Finally, the following discussion does not address the tax consequences of transactions occurring prior to or after the reverse stock split (whether or not such transactions are in connection with the reverse stock split), including,
without limitation, the exercise of options or rights to purchase common stock in anticipation of the reverse stock split.
The tax
treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. You should consult with your own tax advisor with respect to the tax consequences of the reverse stock split. As used herein, the term
U.S. Holder means a stockholder that is, for federal income tax purposes: a citizen or resident of the United States; a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States or any state,
including the District of Columbia; an estate the income of which is subject to federal income tax regardless of its source; or a trust that (i) is subject to the primary supervision of a U.S. court and the control of one of more U.S. persons
or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
The following
discussion is based on the Code, applicable Treasury Regulations, judicial authority and administrative rulings and practice, all as of the date hereof. The Internal Revenue Service could adopt a contrary position. In addition, future legislative,
judicial or administrative changes or interpretations could adversely affect the accuracy of the statements and conclusions set forth herein. Any such changes or interpretations could be applied retroactively and could affect the tax consequences
described herein. No ruling from the Internal Revenue Service or opinion of counsel has been obtained in connection with the reverse stock split.
No gain or loss should be recognized by a U.S. Holder upon such U.S. Holders exchange of pre-reverse stock split shares of common stock
for post-reverse stock split shares of common stock pursuant to the reverse stock split. The aggregate tax basis of the post-reverse stock split shares received in the reverse stock split (including any whole share received in exchange for a
fractional share) will be the same as the stockholders aggregate tax basis in the pre-reverse stock split shares exchanged therefor. The stockholders holding period for the post-reverse stock split shares will include the period during
which the stockholder held the pre-reverse stock split shares surrendered in the reverse stock split. Special tax basis and holding period rules may apply to U.S. Holders that acquired different blocks of stock at different prices or at different
times.
THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL U.S. INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK
SPLIT IN LIGHT OF YOUR SPECIFIC CIRCUMSTANCES.
Vote Required and Board Recommendation
In accordance with our Certificate of Incorporation, Delaware law and the NASDAQ Listing Rules, approval and adoption of the Proposal requires
the affirmative vote of at least a majority of our issued and outstanding shares entitled to vote either in person or by proxy at the Special Meeting. Abstentions and broker non-votes will have the same effect as a vote AGAINST this
Proposal.
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THE BOARD RECOMMENDS A VOTE FOR THE PROPOSAL.
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