PROPOSAL 1
APPROVAL OF REVERSE STOCK SPLIT OF OUR COMMON STOCK
Background
Our Board has unanimously approved a series of
alternate amendments to our Amended and Restated Certificate of Incorporation, which would effect a reverse stock split, or Reverse Stock Split, of all issued and outstanding shares of our common stock, at a ratio ranging from 1-for-2 to 1-for-20, inclusive.
Accordingly, effecting a Reverse Stock Split would reduce the number of outstanding shares of our common stock. The effectiveness of any one of these
amendments and the abandonment of the other amendments, or the abandonment of all of these amendments, will be determined by our Board following the Special Meeting and prior to the date of our 2020 Annual Meeting of Stockholders. Our Board has
recommended that these proposed amendments be presented to our stockholders for approval.
Our stockholders are being asked to approve these proposed
amendments pursuant to Proposal 1, and to grant authorization to our Board to determine, at its option, whether to implement a Reverse Stock Split, including its specific timing and ratio.
Should we receive the required stockholder approvals for Proposal 1, our Board will have the sole authority to elect, at any time on or prior to one-year anniversary of the Special Meeting, or March 11, 2021, and without the need for any further action on the part of our stockholders, whether to effect a Reverse Stock Split and the number of whole
shares of our common stock, between and including two and 20, that will be combined into one share of our common stock.
Notwithstanding approval of
Proposal 1 by our stockholders, our Board may, at its sole option, abandon the proposed amendments and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect any Reverse Stock Split, as
permitted under Section 242(c) of the General Corporation Law of the State of Delaware. If our Board does not implement a Reverse Stock Split on or prior to the one-year anniversary of the Special
Meeting, or March 11, 2021, stockholder approval would again be required prior to implementing any Reverse Stock Split.
By approving Proposal 1,
our stockholders will: (a) approve a series of alternate amendments to our Amended and Restated Certificate of Incorporation pursuant to which any whole number of outstanding shares of common stock between and including two (2) and twenty
(20) could be combined into one share of common stock; and (b) authorize our Board to file only one such amendment, as determined by the Board at its sole option, and to abandon each amendment not selected by the Board. Our Board may also
elect not to undertake any Reverse Stock Split and therefore abandon all amendments.
APPROVAL OF REVERSE STOCK SPLIT OF OUR COMMON STOCK (PROPOSAL
1)
Our Board has adopted and is recommending that our stockholders approve a series of alternate amendments to our Amended and Restated Certificate of
Incorporation to effect a Reverse Stock Split. The text of the proposed form of Certificate of Amendment to our Amended and Restated Certificate of Incorporation, which we refer to as the Certificate of Amendment, is attached hereto as Appendix A.
We are proposing that our Board have the discretion to select the Reverse Stock Split ratio from within a range between and including 1-for-2 and 1-for-20, rather than proposing that stockholders approve a specific ratio at this
time, in order to give our Board the flexibility to implement a Reverse Stock Split at a ratio that reflects the Boards then-current assessment of the factors described below under Criteria to be Used for Determining Whether to Implement
the Reverse Stock Split. If the Board decides to implement a Reverse Stock Split, we will file the Certificate of Amendment with the Secretary of State of the State of Delaware and the Reverse Stock Split will be effective at 5:01 p.m.,
Eastern time, on the date of filing of a Certificate of Amendment with the office of the Secretary of State of the State of Delaware, or such later date as is chosen by the Board and set forth in the Certificate of Amendment. Except for adjustments
that may result from the treatment of fractional shares as described below, each of our stockholders will hold the same percentage of our outstanding common stock immediately following the Reverse Stock Split as such stockholder holds immediately
prior to the Reverse Stock Split.