Stereotaxis
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DEF 14A
STEREOTAXIS, INC. filed this Form DEF 14A on 04/10/2019
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Assuming reverse stock split ratios of one-for-two and one-for-ten, which are ratios based on whole numbers of shares at the high end and low end of the range that our shareholders are being asked to approve, the following table sets forth the approximate number of shares of our common stock that would be (i) issued and outstanding, (ii) reserved for issuance upon conversion of the Series A Convertible Preferred Stock, and (iii) reserved for issuance pursuant to outstanding options under our stock plan or warrants, and after the reverse stock split, based on information as of:

 

   12/31/2018   3/25/2019   2:1   10:1 
Common Stock:   59,058,297    59,304,222    29,652,111    5,930,422 
Convertible Preferred Shares (in common stock equivalents):   41,743,654    42,216,012    21,108,006    4,221,601 
Employee RSU’s:   647,649    688,687    344,344    68,869 
Subtotal:   101,449,600    102,208,921    51,104,461    10,220,892 
                     
Warrants:   1,131,151    1,107,689    553,845    110,769 
Employee Stock Options:   1,165,086    2,146,344    1,073,172    214,634 
                     
Shares Authorized   300,000,000    300,000,000    300,000,000    300,000,000 

 

After the effective time of the reverse stock split, the post-split market price of our common stock may be less than the pre-split price multiplied by the reverse stock split ratio. In addition, a reduction in number of shares outstanding may impair the liquidity for our common stock, which may reduce the value of our common stock.

 

Effect on Voting Rights. Proportionate voting rights and other rights of the holders of common stock would not be affected by the reverse stock split, other than as a result of the payment of cash in lieu of fractional shares as described below. For example, a holder of 1% of the voting power of the outstanding shares of common stock immediately prior to the effective time of the reverse stock split would continue to hold 1% of the voting power of the outstanding shares of common stock after the reverse stock split, subject to the payment of cash in lieu of fractional shares.

 

Because the Series A Convertible Preferred Stock votes with our common stock on an as-converted basis, the proportional adjustment to the conversion price will mean that the Series A Convertible Preferred Stock will have a different number of votes following the effective time of the reverse stock split. However, the proportionate voting interest held by the holders of Series A Convertible Preferred Stock will not change.

 

Effect on Par Value Shares and Accounting Matters. The reverse stock split will not affect the par value per share of our common stock. As a result, as of the effective time of the reverse stock split, the stated capital attributable to our common stock on the Company’s balance sheet (which consists of the par value per share of our common stock multiplied by the aggregate number of the issued shares of common stock) will be reduced proportionately based on the reverse stock split ratio selected by the Board of Directors, and the additional paid-in capital account (which consists of the difference between the Company’s stated capital and the aggregate amount paid to us upon the issuance of all currently issued shares of common stock) will be credited with the amount by which the stated capital is reduced. The per-share net income or loss and net book value of our common stock will be increased as a result of the reverse stock split because there will be fewer shares of common stock outstanding.

 

Effect on Outstanding Options, Stock Option and Equity Incentive Plans and Warrants. The reverse stock split, if and when implemented, will affect outstanding options to purchase common stock. The Company’s stock option and equity incentive plans include provisions for appropriate adjustments to the number of shares of common stock covered by the plans and by stock options and other grants of stock-based awards under the plans, as well as the per share exercise prices. If the Company’s shareholders approve the reverse stock split, an outstanding stock option to purchase one share of common stock would thereafter evidence the right to purchase a fraction of a share of common stock consistent with the reverse stock split ratio designated by the Board of Directors (rounding any fractional shares up to the nearest whole share), and the exercise price per share would be a corresponding multiple of the previous exercise price (rounded down to the nearest cent). For example, if the Company effects a one-for-two reverse stock split, a pre-split option for 10,000 shares of common stock with an exercise price of $1.00 per share would be converted post-split into an option to purchase 5,000 shares of common stock with an exercise price of $2.00 per share. Further, the number of shares of common stock authorized and reserved for issuance under the plans will be reduced in proportion to the exchange ratio of the reverse stock split.

 

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