NBY NovaBay Pharmaceuticals Inc New

Beneficial Owner; Shares Registered in the Name of a Broker, Bank or Other Nominee

If you are a beneficial owner and do not instruct your broker, bank or other nominee how to vote your shares, the question of whether your broker, bank or other nominee will still be able to vote your shares depends on whether the New York Stock Exchange (“NYSE”) deems the particular proposal to be a “routine” matter. Brokers, banks or other nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management supported. Proposal One (the Company Guide Proposal) is believed to be a “non-routine” matter. Accordingly, your broker, bank or other nominee may not vote your shares on Proposal One without voting instructions from you. Proposal Two (the Reverse Stock Split Proposal) and Proposal Three (the Adjournment Proposal) are believed to be “routine” matters. Accordingly, your broker, bank or other nominee may vote your shares on such proposals even if you do not give it instructions.

If you were a stockholder of record on the Record Date, you may vote your shares at the virtual Special Meeting, www.virtualshareholdermeeting.com/NBY2022SM, which contains voting instructions. You may also vote your shares by telephone by calling (toll free within the United States and Canada) 1-800-690-6903 and following the voting instructions read to you by the automated operator. Internet and telephone voting facilities for stockholders of record will be available 24 hours a day beginning at 12:01 a.m. Pacific Time on September [ _ ], 2022. Internet and telephone voting will close promptly at 11:59 p.m. Eastern Time on Wednesday, November 9, 2022. After that time, you will only be able to vote by attending the Special Meeting via live webcast and voting at the Special Meeting. The meeting starts at 11:00 a.m. Pacific Time. After voting is closed during the Special Meeting, you will no longer have the ability to vote your shares for the specific proposals considered at the Special Meeting.

Upon visiting the meeting website or calling the telephone number provided above, you will be prompted to enter your 16-digit control number provided to you on your proxy card. Your unique control number allows us to identify you as a stockholder and will enable you to securely cast votes.

If you receive proxy materials by mail or if you request paper copies of the proxy materials, you can vote by mail by marking, dating, signing and returning your proxy card in the postage-paid envelope. Further instructions on how to vote by mail are included on the proxy card. Only proxy cards that have been signed, dated, and timely returned will be counted towards the quorum and entitled to vote.

If your proxy card does not specify how the shares represented thereby are to be voted, the proxy will be voted “FOR” Proposal One, Proposal Two and Proposal Three, as described in the Notice and this Proxy Statement. 

If your shares are held in your name, you may revoke or change your vote at any time before the Special Meeting by (i) submitting another proxy on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Special Meeting will be counted), (ii) attending the Special Meeting live via webcast and voting during the meeting (simply attending the virtual meeting will not, by itself, revoke your proxy), or (iii) filing a notice of revocation or another signed proxy card with a later date with our Corporate Secretary, Mr. Justin Hall, Esq., at our principal executive offices at 2000 Powell Street, Suite 1150, Emeryville, California 94608.

We will bear the entire cost of proxy solicitation, including the costs of preparing, assembling, printing and mailing this Proxy Statement, the Availability Notice, the proxy card and any additional solicitation materials furnished to our stockholders. Copies of these materials will be furnished to brokers, banks or other nominees holding shares in their names that are beneficially owned by others so they may forward these materials to such beneficial owners. In addition, we may reimburse such persons for their reasonable expenses in forwarding the solicitation materials to the beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by personal contact, telephone, facsimile, email or any other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services. In addition, we have engaged Alliance Advisors, LLC, to assist in the solicitation of proxies and provide related advice and informational support. For additional information about this engagement, please see “Method of Proxy Solicitation” below.

We expect to announce preliminary voting results at the Special Meeting. In addition, we expect that final voting results will be filed with the SEC on a Current Report on Form 8-K within four business days after the Special Meeting.

Matters to be Considered at the Special Meeting

Proposal One:

The Company Guide Proposal

At the Special Meeting, we are asking stockholders to approve, in accordance with Sections 713(a) and 713(b) of the NYSE American Company Guide, the issuance of an aggregate of 96,468,114 shares of Common Stock, subject to potential increase in the number of shares due to applicable anti-dilution adjustments, which will be issuable by the Company in connection with our Warrant Reprice Transactions (as described below) and, if closed, the 2022 Private Placement (as described below).

On September 9, 2022, we entered into written agreements relating to the following two private financing transactions:

Since our Common Stock is currently listed on the NYSE American, we are required to comply with the continued listing rules of the Company Guide. Section 713(a) of the Company Guide requires stockholder approval in connection with any transaction, other than a public offering, involving the sale, issuance, or potential issuance, of common stock or securities convertible into common stock, equal to 20.0% or more of presently outstanding stock for less than the greater of book or market value (whichever is greater). Section 713(b) of the Company Guide requires stockholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) when the issuance or potential issuance of additional shares may result in a change of control of the issuer. Since the aggregate number of shares of Common Stock underlying the Series C Preferred Stock (18,057,000 shares of Common Stock) and the 2022 Warrants (36,111,114 shares of Common Stock) following the closing of the 2022 Private Placement, the issuance of Common Stock underlying the Amended Warrants (30,825,000 shares of Common Stock) and the New Reprice Warrants (11,475,000 shares of Common Stock), will collectively represent 148% of the total number of shares of Common Stock currently outstanding, we are seeking approval under both Sections 713(a) and 713(b) of the Company Guide. Stockholder approval of this Proposal One will constitute stockholder approval for purposes of Sections 713(a) and 713(b) of the Company Guide.

In addition, as a material condition of the Warrant Reprice Transactions and the 2022 Private Placement, we agreed to submit and recommend this Proposal One and, as described below, Proposal Two to our stockholders. If we do not obtain stockholder approval of this Proposal One and Proposal Two at the Special Meeting, we have agreed to call a meeting of stockholders every four months thereafter to seek stockholder approval until stockholder approval is obtained. These contractual obligations address the Company’s obligation to satisfy the Company Guide requirement and for the Company to have a sufficient number of shares of Common Stock available for future issuance, as described under Proposal Two. Approval of this Proposal One and Proposal Two will result in the restrictions on exercise under the Amended Warrants and the New Reprice Warrants no longer being effective. The Board approved the Warrant Reprice Transactions and the 2022 Private Placement and believes that satisfying our contractual obligations in those transactions by submitting this Proposal One to stockholders for their approval at this Special Meeting is in the best interests of our Company and our stockholders.

It is important to understand that we are not seeking stockholder approval of, and you are not being asked to vote on, the Warrant Reprice Transactions (which have already been completed) or the issuance of the Amended Warrants and the New Reprice Warrants (which have already been issued). In addition, although we committed, in connection with the Warrant Reprice Transactions, to seek stockholder approval of the Reverse Stock Split, as well as any approvals as may be required by the Company Guide, and such approvals are conditions to the closing of the 2022 Private Placement, you are not being asked to approve the closing of the 2022 Private Placement or the issuance of the Units (including the Series C Preferred Stock and the 2022 Warrants). Instead, we are seeking your approval of the issuance of shares of Common Stock underlying the Amended Warrants, the New Reprice Warrants, the Series C Preferred Stock and the 2022 Warrants.

We previously disclosed that we issued (i) Common Stock purchase warrants to a limited number of accredited investors (the “2020 Investors”) in connection with our prior warrant reprice transaction that closed on July 23, 2020 (the “2020 Original Warrants”), and (ii) Common Stock purchase warrants to a limited number of accredited investors (the “2021 Investors”) in connection with our private placement financing transaction that closed on November 2, 2021 (the “2021 Original Warrants”). Prior to the completion of the Warrant Reprice Transactions, the 2020 Original Warrants had an aggregate of 6,898,566 underlying shares of Common Stock, exercisable at $1.65 per share, and the 2021 Original Warrants had an aggregate of 37,500,000 underlying shares of Common Stock, exercisable at $0.53 per share.

Reprice Letter Agreements

On September 9, 2022, certain of the 2020 Investors holding 2020 Original Warrants (the “2020 Participants”) entered into separate latter agreements with the Company (the “2020 Reprice Letter Agreements”) and all of the 2021 Investors holding 2021 Original Warrants (the “2020 Participants” and together with the 2020 Participants, the “Participants”) entered into separate letter agreements with the Company (the “2021 Reprice Letter Agreements” and, together with the 2020 Reprice Letter Agreements, the “Reprice Letter Agreements”) that provided for their respective warrants to be amended to reduce their exercise price to $0.18 (“Reduced Exercise Price”) and, in the case of the 2021 Original Warrants, extend the term of those warrants. The Amended Warrants also provide for a new restriction on exercise until the later of (i) six months from September 9, 2022 and (ii) the Stockholder Approval Date, except for an Initial Exercise (as described below). The Reduced Exercise Price of the Amended Warrants and the number of shares of Common Stock underlying the Amended Warrants will be adjusted to reflect the Reverse Stock Split if Proposal Two is approved and becomes effective.

Also pursuant to the Reprice Letter Agreements, (i) the 2020 Participants had the opportunity (but were not required) to elect to make a cash exercise of a portion of their Amended 2020 Warrants at the Reduced Exercise Price, which resulted in the exercise of an aggregate of 2,100,000 shares of Common Stock (the “2020 Initial Exercise”) and (ii) the 2021 Participants all agreed to exercise an aggregate of 9,375,000 shares, or 25% of the shares of Common Stock underlying their respective Amended 2021 Warrants, at the Reduced Exercise Price (the “2021 Initial Exercise” and, together with the 2020 Initial Exercise, the “Initial Exercise”). The Company received $2,065,500 in aggregate gross proceeds from the Initial Exercise.

In exchange, the Company issued to each 2021 Participant, as well as each 2020 Participant that participated in the 2020 Initial Exercise, a New Reprice Warrant to purchase a number of shares of Common Stock equal to 100% of the shares of Common Stock received by such Participant in its Initial Exercise. The form of New Reprice Warrants issued to all 2021 Participants (the “New 2021 Participant Warrants”) is substantially similar to the 2021 Original Warrants, and the form of New Reprice Warrants issued to the 2020 Participants that elected to make a 2020 Initial Exercise (the “New 2020 Participant Warrants” and, together with the New 2021 Participant Warrants, the “New Reprice Warrants”) is substantially similar to the 2020 Original Warrants. All of the New Reprice Warrants will be initially exercisable on the later to occur of (i) the six-month anniversary of the date of issuance and (ii) the Stockholder Approval Date. In addition, the New Reprice Warrants have a term of exercise of six years and an exercise price equal to $0.18, which exercise price and the number of underlying shares of Common Stock will be adjusted to reflect the Reverse Stock Split if Proposal Two is approved and becomes effective. The New Reprice Warrants are also subject to a provision prohibiting the exercise thereof to the extent that, after giving effect to such exercise, the holder of such Warrant (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates), would beneficially own in excess of 4.99% or 9.99% of outstanding Common Stock. The New Reprice Warrants do not have any preemptive rights or a preference upon any liquidation, dissolution or winding-up of the Company.

In addition to entering into the Reprice Letter Agreements, each Participant also signed and delivered a Participant Voting Commitment to vote to approve this Proposal One and Proposal Two, and also entered into a Leak-Out Agreement, dated September 9, 2022, which agreements were effective only until September 13, 2022, the Record Date for the special meeting.

Other Post-Closing Obligations and Anti-Dilution Adjustment of Series B Preferred Stock

Resale Registration. Pursuant to the Reprice Letter Agreements, we are required to prepare and file a registration statement with the SEC that will cover the resale of all of the Common Stock underlying the New Reprice Warrants within 30 days of the Stockholder Approval Date.

Voting Commitments. Each of the warrant holders that participated in the Warrant Reprice Transactions signed and delivered a Participant Voting Commitment that provides for such participating warrant holder to vote its shares of Common Stock to approve Proposal One and Proposal Two. In connection with the Warrant Reprice Transactions, the Company also obtained voting commitments from its executive officers, directors, more than 10% stockholders and certain other significant stockholders similar to the Participant Voting Commitments to vote in favor of Proposal One and Proposal Two. As a result of having these voting commitment letters, we expect a significant number of shares of Common Stock, up to approximately 33% of the outstanding Common Stock as of the Record Date, to support Proposal One and Proposal Two; however, such number of shares will not be sufficient to approve these proposals.

Anti-Dilution Adjustment to Series B Preferred Stock. The Certificate of Designation of Preferences, Rights and Limitations for the Company’s issued and outstanding Series B Preferred Stock (the “Series B Certificate of Designation”) provides for anti-dilution protections in the event that the Company grants any right to reprice any Company security that would entitle the holder to acquire Common Stock at an effective price per share that is lower than the conversion price of the Series B Preferred Stock, which is referred to as “full-ratchet” anti-dilution protection. As a result of the consummation of the Warrant Reprice Transactions, which resulted in the Amended Warrants being exercisable at the Reduced Exercise Price and the issuance of New Reprice Warrants at the same Reduced Exercise Price, this anti-dilution protection in the Series B Certificate of Designation was triggered. Accordingly, the conversion price of each share of Series B Preferred Stock, which was $0.40 into 2,500 shares of Common Stock, was automatically adjusted downward and is now $0.18 into 5,556 shares of Common Stock. The adjusted conversion price of the Series B Preferred Stock is the same as the Reduced Exercise Price of the Amended Warrants and the exercise price of the New Reprice Warrants. Therefore, based on the 11,620 shares of Series B Preferred Stock currently outstanding, there are an additional 35,510,720 shares of Common Stock that are issuable upon conversion as a result of the reduction in exercise price.

Securities Purchase Agreement

On September 9, 2022, we entered into the Securities Purchase Agreement with each of the purchasers named therein (the “2022 Purchasers”) that provides for the Company to sell in a private placement up to $3,250,000 of Units, with each Unit consisting of (i) one share of Series C Preferred Stock, (ii) one Short-Term Warrant, and (iii) one Long-Term Warrant. The closing of the 2022 Private Placement is conditioned upon the Company obtaining stockholder approval of this Proposal One and Proposal Two, in addition to satisfaction other customary closing conditions set forth in in the Securities Purchase Agreement. The Securities Purchase Agreement also provides for customary termination rights, including the right of the Company or any Purchaser to terminate the Securities Purchase Agreement if the consummation of the 2022 Private Placement has not occurred on or before the fifth trading day following the date of the Stockholder Approval Date. Accordingly, the Units (including the Series C Preferred Stock and the 2022 Warrants) will not be issued unless and until both this Proposal One and Proposal Two are approved and become effective. If Proposal One and Proposal Two are approved by stockholders at the Special Meeting, we expect to close the 2022 Private Placement after the Stockholder Approval Date. We intend to use the net proceeds from the 2022 Private Placement for working capital and general corporate purposes.

Description of Series C Preferred Stock

The Series C Preferred Stock will be a newly-created series of stock that will have the powers, preferences, rights, qualifications, limitations and restrictions, including anti-dilution protections, as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock (the “Series C Certificate of Designation”). The holders of Series C Preferred Stock will not have any voting rights, except as required by law and in other limited circumstances, such as to alter or change adversely the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Series C Certificate of Designation, to amend the Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series C Preferred Stock, to increase the number of authorized shares of Series C Preferred Stock, and to enter into any agreement with respect to any of the foregoing. The holders of the Series C Preferred Stock will be entitled to receive, and the Company will be required to pay, dividends on shares of the Series C Preferred Stock equal (on an as if converted to Common Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. The Series C Preferred Stock will not be entitled to any other dividends. In the event of the Company’s liquidation, dissolution or winding up, the holders of Series C Preferred Stock will be entitled to receive the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder).

Each share of Series C Preferred Stock will be convertible at a current conversion price of $0.18 into 5,556 shares of Common Stock, or an aggregate of 18,057,000 shares of Common Stock (which conversion price and number of shares will be adjusted to reflect the Reverse Stock Split if Proposal Two is approved and becomes effective). Pursuant to the Series C Certificate of Designation, the Series C Preferred Stock will be subject to another limitation on conversion to the extent that, after giving effect to such conversion, the holder of such Series C Preferred Stock (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates), would beneficially own in excess of 4.99% or 9.99% of the outstanding Common Stock.

The Series C Preferred Stock also has anti-dilution protections that could result in an increase in the number of shares of Common Stock to be issued upon conversion of the Series C Preferred Stock in the future, in certain circumstances, including if the Company: (i) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of the Series C Preferred Stock or payment of a dividend on the Series C Preferred Stock); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the conversion price of the Series C Preferred Stock will be adjusted as provided in the Series C Certificate of Designation. In addition, these anti-dilution protections also apply if the Company sells or grants any Common Stock or any securities of the Company, subject to certain limited exceptions, which would entitle the holder thereof to acquire Common Stock at an effective price per share that is lower than the applicable conversion price of the Series C Preferred Stock, and, as a result, the conversion price of the Series C Preferred Stock will be reduced to such lower price, which is referred to as a “full-ratchet” anti-dilution protection. This full-ratchet anti-dilution protection is subject to termination as provided in the Series C Certificate of Designation upon the earlier of: (x) the Common Stock achieving an average trading price of 250% of the conversion price during any 10 days during a 30-consecutive trading day period and (y) 75% of the Series C Preferred Stock issued on the original issue date has been converted. The holders of Series C Preferred Stock will not have any preemptive rights as a result of their ownership of Series C Preferred Stock. The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series C Preferred Stock, including the anti-dilution protections, set forth in the Series C Certificate of Designation will be filed with the Secretary of State of the State of Delaware prior to closing of the 2022 Private Placement.

Description of 2022 Warrants

The 2022 Warrants will have an exercise price equal to $0.18, subject to customary anti-dilution adjustments as provided in the 2022 Warrants. The Long-Term Warrants will be immediately exercisable for a period of six (6) years after the date of issuance and the Short-Term Warrants will be immediately exercisable for a period of eighteen (18) months after the date of issuance. The 2022 Warrants will be exercisable for an aggregate of 36,111,114 shares of Common Stock. The exercise price for the 2022 Warrants and the number of shares of Common Stock underlying the 2022 Warrants will be adjusted at the time of issuance to reflect the Reverse Stock Split.

The 2022 Warrants are subject to a provision prohibiting the exercise of such 2022 Warrants to the extent that, after giving effect to such exercise, the holder of such 2022 Warrant (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates), would beneficially own in excess of 4.99% or 9.99% of the outstanding Common Stock. The 2022 Warrants will not have any preemptive rights or a preference upon any liquidation, dissolution or winding-up of the Company.

NYSE American Company Guide Requirements

Since our Common Stock is currently listed on the NYSE American, we are required to comply with the continued listing rules of the Company Guide. Section 713(a) of the Company Guide requires stockholder approval in connection with any transaction, other than a public offering, involving the sale, issuance, or potential issuance, of common stock or securities convertible into common stock, equal to 20.0% or more of presently outstanding stock for less than the greater of book or market value (whichever is greater). Section 713(b) of the Company Guide requires stockholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) when the issuance or potential issuance of additional shares may result in a change of control of the issuer. Since the aggregate number of shares of Common Stock underlying the Series C Preferred Stock (18,057,000 shares of Common Stock) and the 2022 Warrants (36,111,114 shares of Common Stock) following the closing of the 2022 Private Placement, the issuance of Common Stock underlying the Amended Warrants (30,825,000 shares of Common Stock) and the New Reprice Warrants (11,475,000 shares of Common Stock), will collectively represent 148% of the total number of shares of Common Stock currently outstanding, we are seeking approval under both Sections 713(a) and 713(b) of the Company Guide. Stockholder approval of this Proposal One will constitute stockholder approval for purposes of Sections 713(a) and 713(b) of the Company Guide.

Required Pursuant to Our Financing Transaction Agreements

As a material condition of the Warrant Reprice Transactions and the 2022 Private Placement, we agreed to submit and recommend this Proposal One and, as described below, Proposal Two to our stockholders. If we do not obtain stockholder approval of this Proposal One and Proposal Two at the Special Meeting, we have agreed to call a meeting of stockholders every four months thereafter to seek stockholder approval until stockholder approval is obtained. These contractual obligations address the Company’s obligation to satisfy the Company Guide requirement and for the Company to have a sufficient number of shares of Common Stock available for future issuance, as described under Proposal Two. Approval of this Proposal One and Proposal Two will result in the restrictions on exercise under the Amended Warrants and the New Reprice Warrants no longer being effective. The Board approved the Warrant Reprice Transactions and the 2022 Private Placement and believes that satisfying our contractual obligations in those transactions by submitting this Proposal One to stockholders for their approval at this Special Meeting is in the best interests of our Company and our stockholders.

Dilutive Effect of Issuances of Common Stock

If stockholder approval of this Proposal One and Proposal Two is received and they become effective, then the Amended Warrants and the New Reprice Warrants will be exercisable for an aggregate of 42,300,000 shares of Common Stock, subject to adjustment to account for the Reverse Stock Split. In addition, after the Stockholder Approval Date, we intend to close the 2022 Private Placement and issue the Units, consisting of the Series C Preferred Stock (which will be convertible into 18,057,000 shares of Common Stock) and the 2022 Warrants (which will be exercisable for 36,111,114 shares of Common Stock). Accordingly, an aggregate of 96,468,114 shares of Common Stock, 148% of the total number of shares of Common Stock currently outstanding, will be issuable pursuant to exercise or conversion (as applicable) of the Amended Warrants, the New Reprice Warrants, the Series C Preferred Stock and the 2022 Warrants, subject to adjustment to account for the Reverse Stock Split and any applicable anti-dilution adjustments. If the Amended Warrants and New Reprice Warrants become exercisable and we close the 2022 Private Placement and issue the Series C Preferred Stock and the 2022 Warrants, then existing stockholders of the Company will experience significant dilution in their ownership interests and voting rights.

Obligations Upon Failure of Stockholder Approval

If only Proposal One or Proposal Two is approved (but not both) a condition to closing the 2022 Private Placement will not be satisfied and the Amended Warrants and the New Reprice Warrants will not be exercisable. In addition, the terms of the Securities Purchase Agreement will require us to continue to seek stockholder approval every four months until both such proposals are approved, and we will be restricted in our ability to raise capital using Common Stock and Stock equivalents or to incur indebtedness.

Rights of Purchasers

If stockholder approval of this Proposal One and Proposal Two is received and they become effective, then the shares of Common Stock issuable upon exercise of the Amended Warrants and the New Reprice Warrants, and, assuming the closing of the 2022 Private Placement, the shares of Common Stock issuable upon conversion of the Series C Preferred Stock and exercise of the 2022 Warrants, will have the same privileges and rights as all other shares of Common Stock that are currently issued and outstanding, including the right to vote on all matters presented to the holders of Common Stock.

In connection with the Securities Purchase Agreement, we will enter into a registration rights agreement with the 2022 Purchasers at the closing of the 2022 Private Placement to register the Common Stock underlying the Series C Preferred Stock and the Common Stock underlying the 2022 Warrants. Pursuant to the Reprice Letter Agreements, we also agreed to file a registration statement providing for the resale by of the shares of Common Stock underlying the Amended Warrants and the New Reprice Warrants.

The affirmative vote of the holders of a majority of the shares of Common Stock present or represented and entitled to vote at the Special Meeting is required for approval of this Proposal One.

It is important to understand that we are not seeking stockholder approval of, and you are not being asked to vote on, the Warrant Reprice Transactions (which have already been completed) or the issuance of the Amended Warrants and the New Reprice Warrants (which have already been issued). In addition, although we committed, in connection with the Warrant Reprice Transactions, to seek stockholder approval of the Reverse Stock Split, as well as any approvals as may be required by the Company Guide, and such approvals are conditions to the closing of the 2022 Private Placement, you are not being asked to approve the closing of the 2022 Private Placement or the issuance of the Units (including the Series C Preferred Stock and the 2022 Warrants). Instead, we are seeking your approval of the issuance of shares of Common Stock underlying the Amended Warrants, the New Reprice Warrants, the Series C Preferred Stock and the 2022 Warrants.

For the reasons described in this Proxy Statement, the Board unanimously recommends that you vote “FOR” the approval of the issuance of an aggregate of 96,468,114 shares of Common Stock upon exercise of the Amended Warrants and the New Reprice Warrants and the conversion of the Series C Preferred Stock and the exercise of the Long-Term Warrants and the Short-Term Warrants to be issued upon closing of the 2022 Private Placement, including any additional shares of Common Stock due to an increase as a result of applicable anti-dilution adjustments, as required by and in accordance with Sections 713(a) and 713(b) of the Company Guide.

Proposal Two:

The Reverse Stock Split Proposal

The Board has unanimously approved resolutions to (i) effect a reverse split of all of our outstanding shares of Common Stock or held in treasury by a ratio of not less than 1-for-10 and not more than 1-for-35 (each 10 to 35 shares of Common Stock, as the case may be, shall be combined to become 1 share of Common Stock) that will be effected by amending our Certificate of Incorporation and (ii) directing that a proposal be submitted to our stockholders at the Special Meeting for the prior approval of the Reverse Stock Split, which proposal has been submitted at the Special Meeting as this Proposal Two. The proposed Reverse Stock Split is a commitment the Company made to its investors both as part of the Warrant Reprice Transactions, and is as a condition to close the 2022 Private Placement, as described below, in Proposal One and elsewhere in this Proxy Statement. In addition, the Reverse Stock Split is also being presented to our stockholders to remain in compliance with the NYSE American’s continued listing requirements under the Company Guide and for the other reasons detailed below under “— Reasons for the Reverse Stock Split”.

If this Proposal Two is approved by our stockholders, the Board will have sole discretion pursuant to Section 242(c) of the Delaware General Corporation Law to elect, as it determines to be in the Company’s best interests and without further action by our stockholders, whether or not and when to effect the Reverse Stock Split, or to abandon it. The Company reserves the right to abandon the Reverse Stock Split without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of the State of Delaware of the Certificate of Amendment, even if the authority to effect the Reverse Stock Split has been approved by our stockholders. By voting in favor of Proposal Two, you are expressly also authorizing the Board to delay, not to proceed with, and/or abandon, the Reverse Stock Split if it should so decide, in its sole discretion. No further action on the part of stockholders will be required to either implement or abandon the Reverse Stock Split.

If this Proposal Two is approved by stockholders and if the Reverse Stock Split is made effective, the number of authorized shares of Company capital stock, consisting of 150,000,000 authorized shares of Common Stock and 5,000,000 authorized shares of preferred stock, will remain unchanged, which will result in the number of authorized shares of Common Stock that will be available for future issuance to increase significantly. If Proposal Two is approved by our stockholders and the Reverse Stock Split is effective, then these additional authorized shares of Common Stock will be available for issuance for any proper corporate purpose as determined by the Board, without further approval by the stockholders, except as required by law.

Should the Board proceed with the Reverse Stock Split, the exact ratio will be set at a whole number within the above range as determined by the Board in its sole discretion without further action by our stockholders. If the Board elects to effect the Reverse Stock Split with a ratio of 1-for-10 (the low end of the range set forth above), each 10 shares of Common stock will be combined to become one share of Common Stock. Following a 1-for-10 Reverse Stock Split, the Company would continue to have 150,000,000 authorized shares of Common Stock, but would only have approximately 6,498,837 shares of Common Stock outstanding (as compared to 64,988,364 shares outstanding as of the Record Date). If the Board elects to effect a Reverse Stock Split with a ratio of 1-for-35 (the high end of the range set forth above), each 35 shares of Common stock will be combined to become one share of Common Stock. Following a 1-for-35 Reverse Stock Split, the Company would similarly continue to have 150,000,000 authorized shares of Common Stock, but would only have approximately 1,856,810 shares of Common Stock outstanding (as compared to 64,988,364 shares outstanding as of the Record Date). The foregoing numbers of shares of Common Stock outstanding will be subject to adjustments that may result from the treatment of fractional shares as described below under the heading “— Fractional Shares”.

The Board believes that the availability of alternative Reverse Stock Split ratios will provide it with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated benefits for the Company and its stockholders. In determining the specific Reverse Stock Split ratio, the Board may consider, among other things, factors such as:

If the Board determines that effecting the Reverse Stock Split is in our best interest, the Reverse Stock Split will become effective as provided in the Certificate of Amendment, which will set forth the number of shares to be combined into one share of Common Stock within the limits set forth in this proposal. The Reverse Stock Split, if effected, would affect holders of Common Stock and holders of Series B Non-Voting Preferred Stock, which are convertible into shares of Common Stock, uniformly, as described below under the heading “— Principal Effects of the Reverse Stock Split”. Except for adjustments that may result from the treatment of fractional shares as described below under the heading “— Fractional Shares”, each stockholder will hold the same percentage of our outstanding Common Stock immediately following the Reverse Stock Split as such stockholder held immediately prior to the Reverse Stock Split. The following description of the proposed Reverse Stock Split and Certificate of Amendment is a summary and is subject to the full text of the proposed Certificate of Amendment, which is attached to this Proxy Statement as Annex A. The text of the form of Certificate of Amendment accompanying this Proxy Statement is, however, subject to revision to reflect the exact ratio for the Reverse Stock Split and any changes that may be required by the office of the Secretary of State of the State of Delaware or that the Board may determine to be necessary or advisable to comply with applicable law and to effect the Reverse Stock Split.

If our stockholders approve this Proposal Two, we expect our Board to determine a reverse split ratio within the range approved by stockholders and then file the Certificate of Amendment with the Secretary of State of the State of Delaware, substantially in the form as attached in Annex A hereto to effect the Reverse Stock Split, as soon as practicable following stockholder approval of this Proposal Two. The Certificate of Amendment will become effective after filing with the Secretary of State of the State of Delaware and on the date and time set forth therein.

If this Proposal Two is approved and the Board determines to proceed with the Reverse Stock Split, the exact timing of the filing of the Certificate of Amendment will be determined by the Board. We refer to this time and date as the “Effective Date.” Except as explained below with respect to fractional shares, each issued share of Common Stock immediately prior to the Effective Date will automatically be changed, as of the Effective Date, into a fraction of a share of Common Stock based on the exchange ratio within the approved range determined by the Board.

The Board currently believes that a Reverse Stock Split is desirable and in the best interest of the Company and its stockholders for four primary reasons listed and described below. Notwithstanding these reasons, the Board reserves its right to abandon the Reverse Stock Split if it determines, in its sole discretion, that it would no longer be in our Company’s and our stockholders’ best interests.

Required Pursuant to Our Financing Transaction Agreements

As a material condition of the Warrant Reprice Transactions and the 2022 Private Placement, we agreed to call the Special Meeting within 75 days to seek stockholder approval of the Reverse Stock Split. If we do not obtain stockholder approval of the Reverse Stock Split at the Special Meeting, we have agreed, in connection with the Warrant Reprice Transactions, to continue to hold stockholder meetings every four months to seek such approval until it is obtained. Any need to continue to seek such approval would result in increased expense to the Company and diversion of management’s attention, time, and effort.

Maintain Compliance with NYSE American Continued Listing Requirements

We are also seeking approval of Proposal Two so that the Company will continue to comply with the continued listing rules of the NYSE American under the Company Guide. Our Common Stock is listed on the NYSE American under the symbol “NBY.” In order to maintain continued listing on the NYSE American, among other requirements, our Common Stock must maintain an average minimum closing stock price of $0.20 over any 30-day consecutive trading period, with $0.20 being the current NYSE American internal precedent threshold of what the NYSE American considers to be a “low price per share” and constitute “low selling price issues” of the issuer pursuant to Section 1003(f)(v) of the Company Guide.

As of September 16, 2022, our 30-day average closing stock price was $0.22 per share, which is above the $0.20 “low price per share” minimum threshold. However, the Company’s closing stock price has dipped below $0.20 per share on individual days in the month of September 2022. Pursuant to the Warrant Reprice Transactions, the exercise price of the Amended Warrants was reduced to, and the exercise price of the New Reprice Warrants is, $0.18 per share. Should the Company’s 30-day average closing stock price go below the $0.20 per share threshold, the NYSE American may issue to the Company a formal “Early Warning Letter.” The Early Warning Letter may initiate a six-month period under which the NYSE American urges the Company to effect a reverse stock split and closely monitors the performance of the Common Stock. At the end of the six-month period, the NYSE American may evaluate the Company’s most recent 30-day average closing price, as well as the Company’s absolute closing price before the end of the six-month period, to determine whether the Company is below the NYSE American compliance standards. While the NYSE American will evaluate the totality of the circumstances, there is a potential that the NYSE American could initiate delisting procedures against the Company.

We expect that the Reverse Stock Split will increase the market price of Common Stock so that the Company will be able to satisfy the continued listing requirements of the NYSE American for the foreseeable future. We also expect that the Reverse Stock Split will provide for sufficient authorized shares under our Certificate of Incorporation in order to permit the issuance of shares of Common Stock upon the exercise of the Amended Warrants and the New Reprice Warrants and upon conversion of the Series C Preferred Stock, as well as the exercise of the 2022 Warrants if the 2022 Private Placement closes and/or in any future offerings or potential strategic transactions.

Additional Authorized Common Stock

Due to the number of shares of Common Stock that we will be required to issue if all of the Amended Warrants and New Reprice Warrants in the Warrant Reprice Transactions are exercised and the Series C Preferred Stock and the 2022 Warrants to be issued in the 2022 Private Placement are converted or exercised, as the case may be, we will not have a sufficient number of shares of Common Stock to issue upon exercise and/or conversion of these Company securities. If Proposal Two is approved by stockholders and the Board determines to effect the Reverse Stock Split, the number of authorized shares of Company capital stock, consisting of 150,000,000 authorized shares of Common Stock and 5,000,000 authorized shares of preferred stock, will remain unchanged. As a result of there being no change to the number of shares of our authorized capital stock in connection with the Reverse Stock Split, the number of authorized shares of Common Stock that will be available for future issuance will increase significantly.

Therefore, the Reverse Stock Split will provide for a sufficient number of authorized shares under our Certificate of Incorporation in order to permit the issuance of shares of Common Stock upon the exercise of the Amended Warrants and the New Reprice Warrants and upon conversion of the Series C Preferred Stock and the exercise of the 2022 Warrants if the 2022 Private Placement closes. In addition, it will provide for additional shares of Common Stock that may be issued in any future offerings or potential strategic transactions that we may pursue.

We plan to use the additional authorized shares resulting from the Reverse Stock Split to continue to pursue our historical financing strategy of raising additional capital in order to fund our operations and meet our ongoing obligations. As discussed elsewhere in this Proxy Statement, we intend to close the 2022 Private Placement as soon as possible after the effectiveness of the Reverse Stock Split. Following the completion of the 2022 Private Placement, an additional 54,168,114 shares of Common Stock will be issuable upon exercise or conversion, as the case may be, of the Series C Preferred Stock and 2022 Warrants issued in the 2022 Private Placement. The effectiveness of the Reverse Stock Split is a condition to closing the 2022 Private Placement. If we do not obtain stockholder approval of the Reverse Stock Split, we will not benefit from the anticipated proceeds from that financing transaction. We also committed, in connection with the Warrant Reprice Transactions, to seek stockholder approval for the Reverse Stock Split, and to effect the Reverse Stock Split after receiving such approval.

In addition to allowing us to satisfy our obligations in connection with the Warrant Reprice Transactions and to close the 2022 Private Placement and receive the proceeds from that transaction, we believe that maintaining our current number of authorized shares in our Certificate of Incorporation will better equip us to engage in additional capital raising efforts in the future. While we do not have any current and/or definite plans, agreements or arrangements, whether written or oral, to issue any newly authorized shares in connection with a capital raising transaction other than the previously disclosed Warrant Reprice Transactions and 2022 Private Placement, such a transaction could arise at any time following the date of this Proxy Statement, either prior to or after the Special Meeting.

Improve the Marketability and Liquidity of the Common Stock and Appeal to a Broader Range of Investors and Generate Greater Investor Interest

We also believe that the expected increased market price of our Common Stock resulting from the Reverse Stock Split will 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 or discouraged by internal policies and practices from buying stocks whose price is below a certain threshold), potentially increasing the liquidity of our Common Stock. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current 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 substantially higher.

There are risks associated with a reverse stock split, and we may fail to realize the expected benefits.

The proposed Reverse Stock Split, if effected, may not increase our stock price, and could lead to a decrease in our overall market capitalization.

On September 16, 2022, the closing sale price of our Common Stock on the NYSE American was $0.14 per share. We expect that the Reverse Stock Split, if effected, will increase the per share trading price of our Common Stock. However, the market price per share of our Common Stock after the Reverse Stock Split may not rise (or remain constant) in proportion to the reduction in the number of shares of Common Stock outstanding before the Reverse Stock Split. We cannot predict the effect of the Reverse Stock Split on the per share trading price of our Common Stock, and the history of reverse stock splits for other companies is varied, particularly since some investors may view a reverse stock split negatively. In many cases, the market price of a company’s shares declines after a reverse stock split, or the market price of a company’s shares immediately after a reverse stock split does not reflect a proportionate or mathematical adjustment to the market price based on the ratio of the reverse stock split. Accordingly, our total market capitalization after a Reverse Stock Split may be lower than our total market capitalization before the Reverse Stock Split, and it is possible that a Reverse Stock Split may not result in a per share trading price that would attract investors who do not trade in lower priced stocks.

Even if we implement the Reverse Stock Split, the per share trading price of our Common Stock may decrease due to factors unrelated to the Reverse Stock Split. Other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the per share trading price of our Common Stock. As a result, we cannot assure you that the Reverse Stock Split, if completed, will result in the benefits that we anticipate, that the per share trading price of our Common Stock will increase following the Reverse Stock Split or that the per share trading price of our Common Stock will not decrease in the future.

The proposed Reverse Stock Split, if effected, may decrease the liquidity of our Common Stock.

The liquidity of our Common 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 per share trading price does not increase proportionately as a result of the Reverse Stock Split. While the Board believes that a higher stock price may help generate the interest of new investors, the Reverse Stock Split may not result in a per-share price that will attract certain types of investors, such as institutional investors or investment funds, and such share price may not satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our Common Stock may not improve as a result of a Reverse Stock Split and could be adversely affect by a higher per share price. Accordingly, the Reverse Stock Split may not increase marketability of our Common Stock. In addition, investors might consider the increased proportion of unissued authorized shares to issued shares to have an anti-takeover effect under certain circumstances, because the proportion allows for dilutive issuances that could prevent certain stockholders from changing the composition of the Board or render tender offers for a combination with another entity more difficult.

If we do not obtain stockholder approval of the Reverse Stock Split at the Special Meeting, we may not be able to satisfy our obligations in connection with the Warrant Reprice Transactions and the 2022 Private Placement.

In connection with the Warrant Reprice Transactions, we committed to seek stockholder approval for the Reverse Stock Split, and to effect the Reverse Stock Split after receiving such approval. In addition, the effectiveness of the Reverse Stock Split is a condition to closing the 2022 Private Placement. If we do not obtain stockholder approval of the Reverse Stock Split at the Special Meeting, we have agreed, in connection with the Warrant Reprice Transactions, to continue to hold stockholder meetings every four months to seek such approval until it is obtained. Any need to continue to seek such approval would result in increased expense to the Company and diversion of management’s attention, time, and effort.

The proposed Reverse Stock Split, if effected, may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell.

If the proposed Reverse Stock Split is implemented, it will increase the number of stockholders who own “odd lots” of less than 100 shares of Common Stock. A purchase or sale of less than 100 shares of Common Stock may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own less than 100 shares of our Common Stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their shares of Common Stock.

The proposed Reverse Stock Split, if effected, will result in a significant increase in our authorized Common Stock and may result in future dilution to our stockholders.

The Reverse Stock Split will reduce the number of outstanding shares of our Common Stock without a proportionate reduction in the number of shares of authorized but unissued Common Stock in our Certificate of Incorporation, which will give the Company a significantly larger number of authorized shares, as a percentage of total outstanding shares, available for future issuance without further stockholder action, except as may be required by applicable laws or the rules of any stock exchange on which our Common Stock is listed. The issuance of additional shares of Common Stock may have a dilutive effect on the ownership of existing stockholders.

Common Stock and Preferred Stock. If Proposal Two is approved by the stockholders at the Special Meeting, we expect the Board to establish the Reverse Stock Split ratio and proceed to effect the Reverse Stock Split, including the filing the Certificate of Amendment with the Secretary of State of the State of Delaware. Except for adjustments that may result from the treatment of fractional shares as described below, each issued share of Common Stock immediately prior to the Effective Date will automatically be changed, as of the Effective Date, into a fraction of a share of Common Stock based on the exchange ratio within the approved range determined by the Board. In addition, proportional adjustments (i.e., in proportion to the Reverse Stock Split ratio determined by the Board) will be made to any convertible or exchangeable securities entitling the holders thereof to purchase, exchange for, or convert into shares of Common Stock. The Reverse Stock Split, if effected, would affect holders of Common Stock and holders of Series B Non-Voting Preferred Stock, which are convertible into shares of Common Stock, uniformly.

Voting Rights. Except for adjustments that may result from the treatment of fractional shares as described below, because the Reverse Stock Split would apply to all issued shares of our common stock, the proposed Reverse Stock Split would not alter the relative rights and preferences of existing stockholders nor affect any stockholder’s proportionate equity interest in the Company. For example, a holder of 2% of the voting power of the outstanding shares of Common Stock immediately prior to the effectiveness of the Reverse Stock Split will generally continue to hold 2% of the voting power of the outstanding shares of Common Stock immediately after the Reverse Stock Split, and the number of stockholders of record will also remain unaffected by the Reverse Stock Split.

Stock-Based Plans. Proportional adjustments (i.e., in proportion to the reverse stock split ratio) will be made to the maximum number of shares issuable under, outstanding awards under, and other terms of the Plans, including adjustments (based upon the Reverse Stock Split ratio) by the Board or a committee thereof, as applicable, to the number of shares available for future grant under the Plans, 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, so as to avoid the effect of increasing the value of awards previously granted.

Listing. Our Common Stock currently trades on the NYSE American. The Reverse Stock Split will not directly affect the listing of our Common Stock on the NYSE American, although we believe that a Reverse Stock Split could potentially increase our stock price, thereby facilitating compliance with the NYSE American’s continued listing standards. Following the Reverse Stock Split, we expect that our Common Stock will continue to be listed on the NYSE American under the symbol “NBY”, although our Common Stock would have a new committee on uniform securities identification procedures (or “CUSIP”) number (which is a number used to identify our Common Stock). Any stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below “— Stock Certificates”.

“Public Company” Status. Our Common Stock is currently registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we are subject to the “public company” periodic reporting and other requirements of the Exchange Act. The Reverse Stock Split would not affect our status as a public company or our registration under the Exchange Act. The Reverse Stock Split is not intended as, and we do not believe that it will have the effect of, a “going private transaction” covered by Rule 13e-3 under the Exchange Act.

Authorized but Unissued Shares; Potential Anti-Takeover Effects. Our Certificate of Incorporation currently authorizes 150,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, and the Reverse Stock Split would not change those numbers. Therefore, the number of issued and outstanding shares of Common Stock would decrease, and the number of shares remaining available for issuance by us in the future would increase.

In addition to shares of Common Stock issuable in connection with the Warrant Reprice Transactions and the closing of the 2022 Private Placement, these additional shares would be available for issuance from time to time for corporate purposes, such as issuances of Common Stock in connection with capital-raising transactions and acquisitions of companies or other assets, as well as for issuance upon conversion or exercise of securities such as convertible preferred stock, convertible debt, warrants or options convertible into or exercisable for Common Stock. We believe that the availability of the additional shares will provide us with the flexibility to meet business needs as they arise, to take advantage of favorable opportunities and to respond effectively in a changing corporate environment. For example, we may elect to issue shares of Common Stock to raise equity capital, to make acquisitions through the use of stock, to establish strategic relationships with other companies, to adopt additional employee benefit plans or reserve additional shares for issuance under such plans, where the Board determines it advisable to do so, without the necessity of soliciting further stockholder approval, subject to applicable stockholder vote requirements under Delaware General Corporation Law and the Company Guide rules. If we issue additional shares for any of these purposes, the aggregate ownership interest of our current stockholders, and the interest of each such existing stockholder, would be diluted, possibly substantially.

The additional shares of Common Stock that would become available for issuance upon an effective Reverse Stock Split could also be used by us to oppose a hostile takeover attempt or delay or prevent a change of control or changes in, or removal of, our management, including any transaction that may be favored by a majority of our stockholders or in which our stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner. Although the increased proportionate number of authorized but unissued shares to issued shares could, under certain circumstances, have an anti-takeover effect, the Reverse Stock Split is not being proposed in order to respond to a hostile takeover attempt or to an attempt to obtain control of our Company.

After stockholder approval, the Reverse Stock Split will be effected, if at all, only upon a determination by the Board that the Reverse Stock Split (with an exchange ratio determined by the Board as described above) is in the Company’s and its stockholders’ best interests. Such determination will be based upon certain factors, including, but not limited to, the Board’s consideration of our commitments made in connection with the Warrant Reprice Transaction and the 2022 Private Placement, our need for the proceeds of the 2022 Private Placement, which will not be consummated prior to the effectiveness of the Reverse Stock Split, the historical trading price and trading volume of our Common Stock, the then prevailing trading price and trading volume of our Common Stock and the anticipated impact of the Reverse Stock Split on the trading market for our Common Stock, our ability to have our shares of Common Stock remain listed on the NYSE American, the anticipated impact of the Reverse Stock Split on our ability to raise additional financing, and prevailing general market and economic conditions. No further action on the part of stockholders would be required to either implement or abandon the Reverse Stock Split. If our stockholders approve the proposal, and the Board determines to effect the Reverse Stock Split, we would communicate to the public additional details regarding the Reverse Stock Split, including the specific ratio selected by the Board. The Board reserves the right to elect not to proceed with the Reverse Stock Split if it determines, in its sole discretion, that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders.

We will not issue fractional shares in connection with the Reverse Stock Split. To the extent any holders of pre-Reverse Stock Split Shares are entitled to fractional shares as a result of the Reverse Stock Split, we will instead issue one whole share of Common Stock to all holders that would otherwise receive a fractional share of Common Stock.

Under Delaware law, our stockholders will not be entitled to dissenters’ rights or rights of appraisal in connection with the implementation of the Reverse Stock Split, and we will not independently provide our stockholders with any such rights.

The following is a summary of certain United States federal income tax consequences of the Reverse Stock Split. It does not address any state, local or foreign income or other tax consequences, which, depending upon the jurisdiction and the status of the stockholder/taxpayer, may vary from the United States federal income tax consequences. It applies to you only if you held shares of pre-reverse stock split Common Stock as capital assets for United States federal income tax purposes. This discussion does not apply to you if you are a member of a class of holders subject to special rules, such as (a) a dealer in securities or currencies, (b) a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings, (c) a bank, (d) a life insurance company, (e) a tax-exempt organization, (f) a person that owns shares of Common Stock that are a hedge, or that are hedged, against interest rate risks, (g) a person who owns shares of Common Stock as part of a straddle or conversion transaction for tax purposes or (h) a person whose functional currency for tax purposes is not the U.S. dollar. The discussion is based on the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), its legislative history, existing, temporary and proposed regulations under the Internal Revenue Code, published rulings and court decisions, all as of the date hereof. These laws, regulations and other guidance are subject to change, possibly on a retroactive basis. We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service regarding the United States federal income tax consequences of a reverse stock split.

PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF THE REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.

Tax Consequences to United States Holders of Common Stock. A United States holder, as used herein, is a stockholder who or that is, for United States federal income tax purposes: (a) a citizen or individual resident of the United States, (b) a domestic corporation, (c) an estate whose income is subject to United States federal income tax regardless of its source, or (d) a trust that (i) is subject to the primary supervision of a U.S. court and the control of one or 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. This discussion applies only to United States holders.

The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes and, therefore, a reorganization within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code. As a result, a stockholder should not recognize gain or loss upon the Reverse Stock Split. A stockholder’s aggregate tax basis in the shares of Common Stock received pursuant to the Reverse Stock Split (including any whole share received in exchange for a fractional share) will equal the aggregate tax basis of the shares of Common Stock surrendered. The stockholder’s holding period in the shares of the common stock received (including any whole share received in exchange for a fractional share) will include the holding period in the shares of Common Stock surrendered. Treasury regulations promulgated under the Internal Revenue Code provide detailed rules for allocating the tax basis and holding period of the shares of Common Stock surrendered to the shares of Common Stock received pursuant to the Reverse Stock Split. Stockholders who acquired their shares of Common Stock on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

Following the Effective Date of any Reverse Stock Split, if any, the net income or loss and net book value per share of Common Stock will be increased because there will be fewer shares of Common Stock outstanding. We do not anticipate that any other accounting consequences would arise as a result of the Reverse Stock Split.

As of the Effective Date, each certificate representing shares of Common Stock outstanding before the Reverse Stock Split will be deemed, for all corporate purposes, to evidence ownership of the reduced number of shares of Common Stock resulting from the Reverse Stock Split. All options, warrants and other securities exchangeable or exercisable for, or convertible into, Common Stock also automatically will be adjusted on the Effective Date.

Our transfer agent, Computershare Shareholder Services, Inc., will act as the exchange agent for purposes of exchanging stock certificates subsequent to the Reverse Stock Split. Shortly after the Effective Date, stockholders of record will receive written instructions requesting them to complete and return a letter of transmittal and surrender their old stock certificates for new stock certificates reflecting the adjusted number of shares as a result of the Reverse Stock Split. Certificates representing shares of Common Stock issued in connection with the Reverse Stock Split will continue to bear the same restrictive legends, if any, that were borne by the surrendered certificates representing the shares of Common Stock outstanding prior to the Reverse Stock Split. No new certificates will be issued until such stockholder has surrendered any outstanding certificates, together with the properly completed and executed letter of transmittal, to the exchange agent. Until surrendered, each certificate representing shares of Common Stock outstanding before the Reverse Stock Split would continue to be valid and would represent the adjusted number of shares, based on the ratio of the Reverse Stock Split.

Any stockholder whose stock certificates are lost, destroyed or stolen will be entitled to a new certificate or certificates representing post-reverse stock split shares upon compliance with the requirements that we and our transfer agent customarily apply in connection with lost, destroyed or stolen certificates. Instructions as to lost, destroyed or stolen certificates will be included in the letter of instructions from the exchange agent.

Upon the Reverse Stock Split, we intend to treat stockholders holding Common Stock in “street name,” through a broker, bank, or other nominee, in the same manner as registered stockholders whose shares are registered in their names. Brokers, banks, and other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding Common Stock in “street name.” However, such brokers, banks, and other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. If you hold your shares in “street name” with a bank, broker or other nominee, and if you have any questions in this regard, we encourage you to contact your broker, bank, or nominee.

YOU SHOULD NOT DESTROY YOUR STOCK CERTIFICATES AND YOU SHOULD NOT SEND THEM NOW. YOU SHOULD SEND YOUR STOCK CERTIFICATES ONLY AFTER YOU HAVE RECEIVED INSTRUCTIONS FROM THE EXCHANGE AGENT AND IN ACCORDANCE WITH THOSE INSTRUCTIONS.

If any certificates for shares of Common Stock are to be issued in a name other than that in which the certificates for shares of Common Stock surrendered are registered, the stockholder requesting the reissuance will be required to pay to us any transfer taxes or establish to our satisfaction that such taxes have been paid or are not payable and, in addition, (a) the transfer must comply with all applicable federal and state securities laws, and (b) the surrendered certificate must be properly endorsed and otherwise be in proper form for transfer.

Registered stockholders are stockholders who hold some or all of their shares electronically in book-entry form with our transfer agent and do not have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number of shares of Common Stock registered in their accounts. If you hold registered shares of Common Stock in book-entry form, you do not need to take any action to receive your post-Reverse Stock Split shares of Common Stock in registered book-entry form. If you are entitled to post-Reverse Stock Split shares of Common Stock, a transaction statement will automatically be sent to your address of record by our transfer agent as soon as practicable after the Effective Date indicating the number of shares of Common Stock you hold.

The affirmative vote of a majority of the shares of Common Stock outstanding as of the Record Date is required for approval of this Proposal Two.

If our stockholders approve this Proposal Two, we expect the Board to determine a Reverse Stock Split ratio within the range approved by stockholders and then file the Certificate of Amendment with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, as soon as practicable following stockholder approval of Proposal Two. The Certificate of Amendment will become effective after filing with the Secretary of State of the State of Delaware and on the date and time set forth therein.

For the reasons described in this Proxy Statement, the Board unanimously recommends that you vote “FOR” the approval of an amendment to the Certificate of Incorporation, as amended, to effect a Reverse Stock Split of all of our Common Stock issued and outstanding shares or held in treasury at a ratio of not less than 1-for-10 and not more than 1-for-35, and to grant authorization to the Board to determine, in its sole discretion, the specific ratio at any whole number within the above share range and the timing of the Reverse Stock Split becoming effective or to abandon the Reverse Stock Split.

Proposal Three:

The Adjournment Proposal

A proposal will be submitted to the stockholders at the Special Meeting to approve the adjournment of the Special Meeting to establish a quorum or to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal One or Proposal Two. Any adjournment of the Special Meeting may be made without notice, other than by an announcement made at the Special Meeting. Any adjournment of the Special Meeting for the purpose of soliciting additional proxies will allow stockholders who have already sent in their proxies to revoke them at any time prior to the time that the proxies are used.

The affirmative vote of the holders of a majority of the shares of Common Stock present or represented and entitled to vote at the Special Meeting is required for approval of this Proposal Three.

The Board recommends unanimously that you cast your vote “FOR” the approval of the adjournment of the Special Meeting to establish a quorum or to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal One or Proposal Two.

The following table indicates information as of September 13, 2022 regarding the beneficial ownership of our securities by:

The percentage of shares beneficially owned is based on 64,988,364 shares of Common Stock outstanding as of September 13, 2022. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them and no shares are pledged. 

*         Less than one percent (1%).