PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO
THE COMPANY’S SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK TO 1,750,000,000 AND THE AUTHORIZED NUMBER OF SHARES OF PREFERRED STOCK TO 500,000,000
The Board believes that it is advisable and in the Company’s best interests and in the bests interests of our stockholders to amend our Second Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the authorized number of shares of Common Stock to 1,750,000,000 shares and the authorized number of shares of Preferred Stock to 500,000,000 (the “Amendment”).
On June 9, 2022, our Board unanimously adopted resolutions approving the proposed Amendment and declared the Amendment, in substantially the form of the certificate of amendment attached as Appendix A hereto and incorporated herein by reference, to be advisable and in the best interests of the Company and our stockholders. Accordingly, our Board is submitting the proposed Amendment for approval by our stockholders. The proposed Amendment would increase the number of shares of Common Stock that we are authorized to issue from 500,000,000 shares of Common Stock to 1,750,000,000 shares of Common Stock and increase the number of shares of Preferred Stock that we are authorized to issue from 58,000,000 shares of Preferred Stock to 500,000,000 shares of Preferred Stock, with a corresponding increase in our total authorized capital stock, which includes Common Stock and Preferred Stock, from 558,000,000 shares to 2,250,000,000 shares.
If stockholders approve this Proposal No. 2, we expect to file the certificate of amendment with the Secretary of State of the State of Delaware to increase the number of authorized shares of our Common Stock and Preferred Stock as soon as practicable following stockholder approval. In this regard, upon filing of the certificate of amendment with the Secretary of State of the State of Delaware, the second and third sentences of Section A of Article III of the Certificate of Incorporation would be amended as follows, with the proposed additions underlined and proposed deletions stricken through:
A. Classes of Stock. This corporation is authorized to issue two classes of stock to be designated, respectively, common stock and preferred stock. The total number of shares that this corporation is authorized to issue is 2,250,000,000 558,000,000. The total number of shares of common stock authorized to be issued is Five Hundred Million (500,000,000) One Billion Seven Hundred Fifty Million (1,750,000,000), par value $0.001 per share (the “Common Stock”). The total number of shares of preferred stock authorized to be issued is Fifty Eight Million (58,000,000) Five Hundred Million (500,000,000), par value $0.001 per share (the “Preferred Stock”), of which Two Hundred Thousand (200,000) shares are designated as “Series A Preferred Stock,” Twelve Million (12,000,000) shares are designated as “Series B Preferred Stock,” and Forty Million (40,000,000) shares are designated as “Series C Preferred Stock.”
Reasons for the Increase in Authorized Shares
Our Board believes it is appropriate to increase our authorized shares of Common Stock and Preferred Stock so that we have shares available to provide additional flexibility to promptly and appropriately use our Common Stock and Preferred Stock for business and financial purposes in the future and pursue our strategic objectives, as well as to have sufficient shares available to provide appropriate equity incentives for our employees and other eligible service providers. The additional shares of Common Stock and Preferred Stock, if approved, may be used for various purposes without further stockholder approval. These purposes may include raising capital; providing equity incentives to employees, officers, directors, consultants and/or advisors; establishing collaborative or partnering arrangements with other companies; expanding our business through the acquisition of other businesses, products or technologies; and other purposes.
As of June 2, 2022, 477,510,822 shares of Common Stock were issued and outstanding and an aggregate of 8,078,000 shares of Common Stock are reserved for issuance upon conversion of the Series A Preferred and Series C Preferred. As of March 31, 2022, an aggregate of 196,005,353 shares are reserved for issuance upon exercise of outstanding warrants, and, as of June 9, 2022, there are 1,148,471 shares available for future issuance under the Company’s 2013 Incentive Plan. Plus, as described in in this proxy statement and