PROPOSAL 2: SHARE INCREASE PROPOSAL
On March 10, 2021, our Board unanimously approved, subject to stockholder approval, an amendment (the Certificate of
Amendment) to our Amended and Restated Certificate of Incorporation, as amended (the Certificate of Incorporation), to increase our authorized shares of common stock from 150,000,000 to 300,000,000 and to make a corresponding
change to the number of authorized shares of capital stock. The form of the proposed Certificate of Amendment effecting the amendment is attached to this proxy statement as Annex A.
The additional common stock to be authorized by adoption of the amendment would have rights identical to our currently outstanding common
stock. Adoption of the proposed amendment and issuance of the common stock would not affect the rights of the holders of our currently outstanding common stock, except for effects incidental to increasing the number of shares of our common stock
outstanding, such as diluting earnings per share, voting power and common shareholdings of stockholders. It could also have the effect of making it more difficult for a third party to acquire control of our company.
Our Board has determined that it would be in our best interests to increase the number of authorized shares of common stock in order to
provide our company with the flexibility to pursue all finance and corporate opportunities involving our common stock, which may include private or public offerings of our equity securities, without the need to obtain additional stockholder
approvals. There are currently no formal proposals or agreements that would require an increase in our authorized shares of common stock. Each additional authorized share of common stock would have the same rights and privileges as each share of
currently authorized common stock.
As of March 15, 2021, 110,268,280 shares of common stock, $0.001 par value, were outstanding,
leaving 39,731,720 shares of common stock available for issuance. As of March 15, 2021, we had reserved, pursuant to various equity award plans, 14,937,542 shares of common stock, of which 5,726,035 were reserved for options granted and
outstanding and 842,608 were available for future grants and purchases pursuant to various equity award plans. Additionally, as of March 15, 2021, we had no warrants outstanding to purchase shares of common stock. Thus, as of March 15,
2021, we had 24,794,178 shares of common stock that were unissued and unreserved for issuance.
From our inception, we have financed our
operations primarily through the sale of equity securities and debt financings. Until we can generate sufficient product revenues, we expect to finance our cash needs in whole or in part through equity offerings. If the authorization of an increase
in the available common stock is postponed until the foregoing specific needs arise, the delay and expense incident to obtaining approval of the stockholders at that time could impair our ability to meet our objectives.
If this proposal is not approved by our stockholders, our financing alternatives will likely be limited by the lack of sufficient unissued and
unreserved authorized shares of common stock, and stockholder value may be harmed by this limitation. In addition, our future success depends upon our ability to attract, retain and motivate highly-skilled scientific, commercial and managerial
employees, and if this proposal is not approved by our stockholders, the lack of sufficient unissued and unreserved authorized shares of common stock to provide future equity incentive opportunities could adversely impact our ability to achieve
these goals. In short, if our stockholders do not approve this proposal, we may not be able to access the capital markets, complete corporate collaborations, partnerships or other strategic transactions, attract, retain and motivate employees, and
pursue other business opportunities integral to our growth and success.
At present, our Board has no immediate plans, arrangements or
understandings to issue the additional shares of common stock. However, it desires to have the shares available to provide additional flexibility to use our common stock for business and financial purposes in the future as well to have sufficient
shares available to provide appropriate equity incentives for our employees. The shares will be available for issuance by our Board for proper corporate purposes, including but not limited to, acquisitions, financings and equity compensation
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