PROPOSAL NO. 4 — APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Background
Our authorized capital stock presently consists of 175,000,000 shares of common stock, $0.0001 par value per share, and 25,000,000 shares of preferred stock, $0.0001 par value per share. On April 13, 2022, our Board of Directors adopted, subject to stockholder approval, a proposed amendment to our Certificate of Incorporation, in the form attached as Annex A to this proxy statement, to increase the number of authorized shares of common stock from 175,000,000 to 350,000,000. The number of authorized shares of preferred stock would not be affected by the proposed amendment.
As of the Record Date, a total of 94,469,048 shares of common stock were issued and outstanding and no shares were held in treasury. In addition, as of the Record Date there were:
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1,534,177 restricted stock units outstanding and 10,146,677 shares of common stock issuable upon the exercise of stock options;
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1,592,754, 566,565 and 1,948,850 shares of common stock reserved for future issuance under our 2017 Stock Incentive Plan, 2017 Employee Stock Purchase Plan and 2022 Inducement Stock Incentive Plan, respectively, as well as any automatic increases in the number of shares of common stock reserved under our 2017 Stock Incentive Plan and 2017 Employee Stock Purchase Plan; and
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39,474 shares of our common stock reserved for issuance upon exercise of outstanding warrants to purchase shares of our common stock, at an exercise price of $0.05 per share.
Accordingly, as of the Record Date, out of the 175,000,000 shares of common stock presently authorized, 110,297,545 shares are issued and outstanding or reserved for issuance and 64,702,455 shares of common stock remain available for future issuance.
If stockholders approve the proposed amendment, section (a) of Article IV of our Certificate of Incorporation will be deleted in its entirety and replaced by the following:
“(a) Authorized Shares. The total number of shares of stock which the Corporation shall have authority to issue is 375,000,000, consisting of 350,000,000 shares of Common Stock, par value $0.0001 per share (“Common Stock”), and 25,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”). Such stock may be issued from time to time by the Corporation for such consideration as may be fixed by the board of directors of the Corporation (the “Board of Directors”).”
The proposed amendment, if approved by our stockholders, would become effective upon the filing of the amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware, in the form of Appendix A hereto, or at the later time set forth in such amendment. The Board of Directors reserves the right, notwithstanding stockholder approval and without further action by stockholders, to elect not to proceed with the proposed amendment if the Board of Directors determines that the proposed amendment is no longer in our best interests and the best interests of our stockholders.
If our stockholders approve the proposed amendment, subject to the discretion of the Board of Directors, we intend to file the amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware as soon as practicable after the Annual Meeting.
Reasons for the Proposed Increase
Over the past several years, we have used shares of our common stock to, among other things, engage in financings, including our ongoing ATM program through Cowen & Company, and incentivize and compensate employees. We anticipate that we may issue additional shares of common stock in the future in connection with one or more of the following:
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financing transactions, such as public or private offerings of common stock or convertible securities;
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partnerships, collaborations and other similar transactions;
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our equity incentive plans;