PROPOSAL ONE
APPROVAL OF AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE FROM 150,000,000 SHARES TO 300,000,000 SHARES
General
Our board of directors has determined that it is advisable to increase our authorized common stock from 150,000,000 shares to 300,000,000 shares and has voted to recommend that our stockholders adopt an amendment to our Amended and Restated Certificate of Incorporation effecting the proposed increase. The full text of the proposed amendment to the Amended and Restated Certificate of Incorporation is attached to this proxy statement as Appendix A. If approved by our stockholders, we intend to file the amendment with the Secretary of State of Delaware as soon as practicable following the Special Meeting, and the amendment will be effective upon filing. If the proposal is not approved by our stockholders, our Amended and Restated Certificate of Incorporation will continue as currently in effect.
Current Capital Structure
As of November 22, 2021, we had 160,000,000 authorized shares, with 150,000,000 shares designated as common stock, $0.0001 par value per share, of which 121,396,033 shares were issued and outstanding, and 10,000,000 shares of undesignated preferred stock, $0.0001 par value per share, of which no shares were issued and outstanding. Of the remaining 28,603,967 authorized shares of common stock, 15,183,324 shares are reserved for issuance upon the exercise of outstanding warrants, 10,700,732 shares are reserved for issuance upon the exercise of issued and outstanding equity awards and 1,507,871 shares are reserved for future issuance under our equity incentive plans. This leaves 1,212,040 shares of our authorized common stock unreserved and available for future issuance.
The proposed amendment would not increase or otherwise affect our authorized preferred stock, nor would it have any effect on par value. Our common stock is all of a single class, with equal voting, distribution, liquidation and other rights. The additional common stock to be authorized by adoption of the amendment would have rights identical to our currently outstanding common stock. Should our board of directors issue additional shares of common stock, existing stockholders would not have any preferential rights to purchase any newly authorized shares of common stock solely by virtue of their ownership of shares of our common stock, and their percentage ownership of our then outstanding common stock could be reduced. The issuance of additional shares of common stock could have the effect of diluting existing stockholder earnings per share, book value per share and voting power.
Background and Purpose of the Amendment
The limited number of unreserved shares of common stock available for future issuance will likely adversely affect our ability to raise the capital needed to continue our planned operations. We will need additional funding to continue our operations and carry out our commercial plan. While it is possible that we may be able to pursue and complete capital raising transactions that do not require the issuance of additional shares of our common stock, we may find it more difficult to obtain financing to fund our ongoing operations, and any financing we are able to obtain may not be on as favorable terms to us as would a financing with the use of our common stock. An increase in the number of authorized shares of our common stock will also allow us the flexibility to issue shares of common stock for other corporate purposes, such as potential strategic partnerships, acquisitions or other strategic transactions though we currently have no commitments to do so. If we are unable to raise capital when and as needed to fund our planned operations, we may be required to curtail or cease our operations entirely and to proceed with a liquidation of the Company.
As a result, the board of directors believes it is vital to our best interests to have sufficient additional authorized but unissued shares of common stock available to provide flexibility for corporate action in the future. The board of directors believes that the availability of additional authorized shares of common stock for issuance from time to time in the board’s discretion in connection with expected future financings or for other corporate purposes is critical both to our