Proposal ThreeAmendment to the Companys
Certificate of Incorporation
The Board of Directors has authorized an amendment to the Companys Amended and
Restated Certificate of Incorporation (the Certificate of Incorporation), subject to shareholder approval. The amendment will increase the authorized number of shares of the Companys common stock by 50,000,000 to a total of
150,000,000 shares.
The Companys Certificate of Incorporation currently permits the Company to issue up to an aggregate
of 125,000,000 shares of capital stock, consisting of 100,000,000 shares of common stock and 25,000,000 shares of preferred stock. On February 6, 2018, the Companys Board of Directors unanimously approved an amendment to the Companys
Certificate of Incorporation to permit the Company to issue up to an aggregate of 175,000,000 shares of capital stock, consisting of 150,000,000 shares of common stock and 25,000,000 shares of preferred stock. The text of the proposed amendment is
set forth below.
As of April 11, 2018, there were approximately 78,613,343 shares of the Companys common stock
issued and outstanding and approximately 7,137,620 shares of common stock reserved for future issuance under the Companys outstanding options, warrants and convertible securities. Thus, approximately 2,220,772 authorized shares of
common stock currently remain available for issuance.
The Board of Directors would like to increase the number of
authorized shares of common stock to provide the Company with flexibility to issue shares of common stock for general corporate purposes, which could include, among other uses, financings, strategic partnering arrangements, equity incentive plans,
acquisitions of assets or businesses, stock splits or stock dividends. The availability of additional authorized shares of common stock would allow the Company to accomplish these goals, and other business and financial objectives, in the future
without stockholder approval, except as may be required in particular cases by the Companys charter documents, applicable law or the rules of any stock exchange or other system on which the Companys securities may then be listed.
The Board of Directors believes it would be in the best interests of the Company and its stockholders to have shares of
common stock available for any of these purposes if needed. Although the Company expects to require raising additional capital to fund its operations past the third quarter of 2018, which may involve the issuance of common stock, it currently has no
transaction pending and does not have plans currently for authorizing any other issuance of common stock other than pursuant to the Incentive Plan discussed in proposal 2 above.
Approving the amendment to increase the authorized number of shares of the Companys common stock will not result in any dilution to
current stockholders unless and until the Company issues such shares in the future. The Board of Directors selected the size of the increase to provide the company with sufficient authorized shares for use in any needed financing transactions, as
well as to provide it the ability to take advantage of other opportunities that may be available to it that would require the use of shares of common stock without the cost and time that would be needed to seek further amendments to its Certificate
of Incorporation.
If this proposal is not approved, the Company will be severely limited in its ability to engage in
various transactions involving issuances of common stock, such as financings, strategic partnering arrangements, equity incentive plans and acquisitions of assets or businesses. We will require additional capital to fund our operations and to
implement our business plan. If we do not obtain additional capital, we may be required to curtail our operations substantially.
In addition to the more traditional uses described above, the Company could issue shares of its stock as a defense against efforts to obtain control of the Company. The Board of Directors does not intend
or view the increase in authorized shares of stock as an anti-takeover measure, nor is the Company aware of any proposed or contemplated transaction of this type.
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