PROPOSAL 4
APPROVAL OF AN AMENDMENT TO THE COMPANYS CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Our Board has approved, subject to stockholder approval, an amendment to our Certificate of Incorporation to increase the number of
authorized shares of common stock, par value $0.0001, from 40,000,000 shares to 160,000,000 shares, and to make a corresponding change to the number of authorized shares of capital stock. The form of the proposed amendment is included in
Appendix A of this Proxy Statement (the Common Stock Amendment).
We currently have a total of 40,000,000 shares
of capital stock authorized under our Certificate of Incorporation, consisting of 40,000,000 shares of common stock and no shares of preferred stock. Our Board is asking our stockholders to approve an amendment that will increase the number of
authorized shares of common stock from 40,000,000 to 160,000,000 shares. If this Proposal 4 is approved, we will amend the Certificate of Incorporation to authorize the issuance of up to 160,000,000 shares of common stock. As provided in more detail
below, if Proposal 5 is approved we will amend the Certificate of Incorporation to authorize the issuance of up to 5,000,000 shares of preferred stock. If both of Proposal 4 and Proposal 5 are approved, the authorized shares of all classes of our
capital stock would be increased from 40,000,000 to 165,000,000 shares. Additionally, if Proposal 6 is approved we will have the authority to amend the Certificate of Incorporation to effect a reverse stock split, which, if effected, would reduce
the number of our outstanding shares of common stock and the number of shares of common stock that we may issue in the future pursuant to our current obligations, but would not reduce our authorized shares of common stock.
Background and Purpose of the Proposal
Our Board has determined that it would be in the Companys best interests and in the best interests of our stockholders to increase the
number of authorized shares of common stock in order to provide the Company with the flexibility to pursue all financing and corporate opportunities involving our common stock, which may include private or public offerings of our equity securities,
without the need to obtain additional stockholder approvals. Each additional authorized share of common stock would have the same rights and privileges as each share of currently authorized common stock.
In December of 2021, we filed an amendment to our Certificate of Incorporation to increase our authorized shares of common stock from
10,000,000 to 40,000,000 shares, following stockholder approval of this increase at our 2021 Annual Meeting of Stockholders. On September 15, 2022, we closed the Offering. In connection with the Offering, we sold an aggregate of 17,637,843
shares of common stock, 12,171,628 Pre-Funded Warrants, and 29,809,471 Series 2 Warrants exercisable for shares of our common stock at an exercise price of $0.66 per share. While such public offering provided
the Company with much needed equity financing, the Offering required us to utilize substantially all of our remaining authorized shares of common stock that were unreserved and available for issuance or future reserve. As discussed in more detail
below, the Series 2 Warrants cannot be exercised until we increase our authorized shares of common stock.
The Board believes that unless
we obtain stockholder approval to amend our Certificate of Incorporation to increase the number of authorized shares of common stock, we will be severely limited by the inability to issue additional shares in connection with future capital raising
transactions or strategic transactions, or to provide additional equity compensation to our officers, board members, and employees. This may cause a delay in our future capital raising or other strategic transactions and may have a material adverse
effect on our business and financial condition.
As of October 12, 2022, 25,809,533 shares of common stock were outstanding, and
14,190,467 shares of authorized common stock reserved for issuance pursuant to our equity compensation plans and outstanding warrants and Pre-Funded Warrants. As of October 12, 2022, we had reserved, pursuant to our equity
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