Stereotaxis
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PRE 14A
STEREOTAXIS, INC. filed this Form PRE 14A on 03/28/2019
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The form of the Authorized Stock Amendment to accomplish the reduction in authorized common shares is attached to this Proxy Statement as Appendix C. The following discussion is qualified in its entirety by the full text of the Authorized Stock Amendment, which is incorporated herein by reference.

 

Reasons for the Decrease in Authorized Shares

 

We currently have 300 million shares of authorized common stock. As of the Record Date, there were 59,304,222 shares of common stock issued and outstanding. In addition, as of the Record Date, there were 1,107,689 shares of common stock reserved for issuance upon exercise of outstanding warrants; 47,844,562 shares of common stock reserved for issuance upon conversion of outstanding Series A Convertible Preferred Stock; and approximately 3,254,503 shares of common stock reserved for issuance upon exercise of outstanding equity awards under our stock option and equity incentive plans.

 

At a special meeting of the shareholders held on July 10, 2012, the shareholders approved an increase in the authorized shares from 100 million to 300 million in order to provide a sufficient number of authorized shares for transactions and issuances that were contemplated at that time. Also at the 2012 special meeting of shareholders, the shareholders approved an amendment to our certificate of incorporation to effect a reverse stock split of our common stock, and on July 10, 2012, we effected a reverse split of our common stock at a ratio of one for ten shares. As a result, the number of shares underlying outstanding options, warrants and other rights to acquire our common stock was significantly reduced. Therefore, the Board of Directors believes that a reduction of the authorized shares of common stock to 100 million is sufficient to support the Company’s ongoing efforts to raise capital to fund its operations for the foreseeable future, as well as to maintain appropriate reserves for issuance on conversion or exercise of outstanding rights to acquire our common stock and future equity grants to employees and directors.

 

Additionally, the proposed reduction in our authorized common stock may enable us to reduce the amount of the Company’s annual franchise tax in the State of Delaware. Each year, we are required to make franchise tax payments to the State of Delaware in an amount determined, in part, by the total number of shares of stock we are authorized to issue. Accordingly, by reducing the number of authorized shares of stock, we may be able to reduce the amount of the franchise tax for which we will be liable.

 

If this Proposal No. 5 is approved by the shareholders, the amendment to our Certificate of Incorporation will become effective upon the filing of the Authorized Stock Amendment with the Secretary of State of the State of Delaware. If our Board of Directors does not implement the Authorized Stock Amendment within 12 months from the Annual Meeting, the authority granted in this proposal to implement the reduction in authorized common shares will terminate. Our Board of Directors reserves its right to elect not to proceed with the reduction in authorized common shares if it determines, in its sole discretion, that this proposal is no longer in the best interests of the Company or its shareholders.

 

Effects of the Decrease in Authorized Shares

 

If approved by our shareholders, the lower number of authorized shares of common stock would be available for issuance for any proper corporate purpose as determined by our Board of Directors without further approval by the shareholders, except as required by law, the OTCQX® or the rules of any other national securities exchange on which our shares of common stock are listed.

 

There will be no change in the rights attributable to our authorized shares of common stock. The proposed amendment will not affect the par value of the common stock, which will remain at $0.001 per share. Under our certificate of incorporation, our shareholders do not have preemptive rights to subscribe to additional securities that we may issue; in other words, current holders of common stock do not have a prior right to purchase any new issue of our capital stock to maintain their proportionate ownership of common stock. If we issue additional shares of common stock or other securities convertible into common stock in the future, it will dilute the voting rights of existing holders of common stock and will also dilute earnings per share and book value per share.

 

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