our shareholders approve this proposal, our Board of Directors or a committee thereof would effect a reverse stock split only
upon the Board’s or committee’s determination that a reverse stock split would be in the best interests of the Company
at that time. If our Board of Directors were to effect a reverse stock split, the Board would set the timing for such a split
and select the specific ratio within the range of one-for-two to one-for-ten. No further action on the part of shareholders would
be required to either implement or abandon the reverse stock split. If our shareholders approve the proposal, and the Board of
Directors or a committee of the Board of Directors determines to effect the reverse stock split, we would communicate to the public,
prior to the effective date, additional details regarding the reverse stock split, including the specific ratio selected by the
Board or committee. If our Board of Directors or a committee thereof does not implement the reverse stock split within 12 months
from the Annual Meeting, the authority granted in this proposal to implement the reverse stock split will terminate. Our Board
of Directors reserves its right to elect not to proceed with the reverse stock split if it determines, in its sole discretion,
that this proposal is no longer in the best interests of the Company or its shareholders.
our shareholders approve this Proposal No.4, and the reverse stock split is implemented, we would have a lower number of shares
of common stock outstanding without reducing the total number of authorized shares of common stock we may issue. In Proposal No.
5 below, we are asking our shareholders to approve an amendment to our certificate of incorporation to decrease the number of
authorized shares of common stock. Proposals No. 4 and No. 5 are independent proposals and are not conditioned on each other.
Shareholders may approve the reverse stock split described in this Proposal No. 4 without approving Proposal No. 5, in which case,
we may have a larger number of authorized but unissued shares from which to issue additional shares of common stock, or securities
convertible or exercisable into shares of common stock, than are necessary for reasonably foreseeable future needs, which could
have a potential dilutive effect on existing shareholders.
of the Reverse Stock Split
reverse stock split will be executed simultaneously for all outstanding shares of our common stock. The reverse stock split will
affect all of our shareholder uniformly and will not affect any shareholder’s percentage ownership interests in the Company,
except to the extent that the reverse stock split results in any of our shareholders owning a fractional share. Common stock issued
pursuant to the reverse stock split will remain fully paid and non-assessable.
common stock is currently registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
and the Company is subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split
will not affect the registration of our common stock or the Company’s reporting obligations under the Exchange Act. The
Company will obtain a new CUSIP number for our common stock effective at the time of the reverse stock split.
of the effective time of the reverse stock split, we will adjust and proportionately decrease the number of shares of our common
stock reserved for issuance upon exercise of, and adjust and proportionately increase the exercise price of, all options and warrants
and other rights to acquire our common stock. In addition, as of the effective time of the reverse stock split, we will adjust
and proportionately decrease the total number of shares of our common stock that may be the subject of the future grants under
our stock plans.
conversion price of our Series A Convertible Preferred Stock will also be proportionately increased to reflect the reverse stock
split as of the effective time of the reverse stock split.