option under the Equity Plans, are also expected to be proportionately adjusted to reflect the reverse stock split. In addition, pursuant to the authority provided under the Equity Plans, the
Company is authorized to effect any other changes necessary, desirable or appropriate to give effect to the reverse stock split, including any applicable technical, conforming changes to the Equity Plans.
For illustrative purposes only, if a 1-for-20 reverse stock
split is effected, the 6,966,861 shares that remain available for issuance under the 2019 EIP, the 2015 Inducement Equity Plan and our DDCP, as of February 9, 2024, are expected to be adjusted to 348,343 shares, subject to increase as awards
outstanding under the 2019 EIP expire or are forfeited and revert to the share pool per the terms of the 2019 EIP. Further, for illustrative purposes only, if a 1-for-20
reverse stock split is effected, an outstanding stock option for 10,000 shares of common stock, exercisable at $0.75 per share, would be adjusted as a result of a
1-for-20 split ratio into an option exercisable for 500 shares of common stock at an exercise price of $15.00 per share. If a fractional share would result from any
adjustment made to an outstanding award under the Equity Plans in connection with the reverse stock split, the fractional share will be disregarded and the number of shares underlying the outstanding award will be rounded down to the nearest whole
share.
As of February 9, 2024, there 31,620 shares of our Series A-1 Convertible Preferred
Stock issued and outstanding. The amendment to our Certificate of Incorporation will not affect the total authorized number of shares of our preferred stock or the par value of the preferred stock, which will remain at $0.01.
Procedures for Effecting the Reverse Stock Split
If the amendment to our Certificate of Incorporation is approved by the stockholders at the Special Meeting, the Certificate of Amendment will
be filed with the Secretary of State of the State of Delaware to effect the amendment to our Certificate of Incorporation as soon as practicable after the Special Meeting. The form of the Certificate of Amendment that would be enacted if the
amendment to our Certificate of Incorporation is adopted is set forth in Appendix A to this Proxy Statement.
If the
amendment to our Certificate of Incorporation is approved by our shareholders and the reverse stock split is implemented, each holder of our common stock will own a reduced number of shares of our common stock. The reverse stock split will be
realized simultaneously and uniformly for all holders of our common stock and will not affect any stockholders percentage ownership interest in our Company.
Stockholders of Record
Our stockholders of record hold their shares in certificated form, direct registration system (DRS) form, book-entry form or some
combination of certificated, DRS and book-entry form. If the reverse stock split is implemented, all stockholders of record will receive a transmittal letter from our transfer agent, Equiniti Trust Company, LLC, who we expect to act as our exchange
agent if the reverse stock split is implemented. The letter of transmittal will contain instructions on how to surrender your certificates, if any, representing your shares of our pre-split common stock to
Equiniti Trust Company, LLC, as well as certain other necessary information. Any expenses incurred by us with respect to the exchange of shares held of record, including but not limited to expenses arising from the exchange of shares held in DRS and
book-entry form, will be borne by the Company.
Beneficial Owners of Shares Held in Street Name
Upon the effectiveness of the reverse stock split, shares held by stockholders in street name, through a bank, broker or other
nominee, will be treated in the same manner as registered stockholders whose shares are registered in their names. However, these banks, brokers or other nominees may have different procedures than those that apply to registered stockholders for
reflecting the reverse stock split in their records and distributing cash received in lieu of fractional share interests to the beneficial owners of such shares. If a stockholder holds shares of our common stock with a bank, broker or other nominee
and has any questions in this regard, stockholders are encouraged to contact their bank, broker or other nominee.
12