will not issue fractional shares in connection with the reverse stock split. Instead, shareholders who otherwise would be entitled
to receive fractional shares because they hold a number of shares not evenly divisible by the reverse stock split ratio will be
entitled, upon surrender to the exchange agent of certificates representing such shares, to a cash payment in lieu thereof at
a price equal to the fraction to which the shareholder would otherwise be entitled multiplied by the closing price of the common
stock, on the last trading day prior to the effective date of the split (or if such price is not available, the average of the
last bid and asked prices of the common stock on such day or other price determined by the Board of Directors). The ownership
of a fractional interest will not give the holder thereof any voting, dividend, or other rights except to receive payment therefor
as described herein.
transaction costs will be assessed to shareholders for the cash payment in lieu of fractional shares. Shareholders will not be
entitled to receive interest for the period of time between the effective date of the reverse stock split and the date payment
is made for fractional shares. Shareholders should be aware that under the abandoned property or escheat laws of the applicable
jurisdictions, cash payments not timely claimed after the effective date of the reverse stock split may be required to be paid
to designated agents for the relevant jurisdictions.
reverse stock split will not affect the par value of our common stock. As a result, at the effective time of the reverse stock
split, the stated capital on our balance sheet attributable to the common stock will be reduced in the same proportion as the
reverse stock split ratio, and the additional paid-in capital account 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 because there will be fewer
shares of our common stock outstanding. Prior periods’ per share amounts will be restated to reflect the reverse stock split.
the Delaware General Corporation Law, our shareholders are not entitled to appraisal rights with respect to the reverse stock
split, and we do not intend to independently provide shareholders with any such right.
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
following is a summary of certain material U.S. federal income tax consequences of the reverse stock split. This summary is based
upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated
thereunder, administrative ruling and judicial decision as of the date hereof, all of which may change, possibly with retroactive
effect, resulting in U.S. federal income tax consequences that may differ from those discussed below. This discussion is included
for general information purposes only and does not address all aspects of federal income taxation that may be relevant to shareholders
that may be subject to special tax rules, including, without limitation: (i) holders subject to the alternative minimum tax: (ii)
banks, insurance companies, or other financial institutions; (iii) tax-exempt organizations; (iv) dealers in securities or commodities;
(v) regulated investment companies or real estate investment trusts; (vi) partnerships (or other flow-through entities for US.
federal income tax purposes and their partners or members); (vii) traders in securities that elect to use a mark-to-market method
of accounting for their securities holding; (viii) U.S. Holders (as defined below) whose “functional currency” is
not the U.S. dollar; (ix) persons holding our common stock as a position in a hedging transaction, “straddle,” “conversion
transaction” or other risk reduction transaction; (x) persons who acquire shares of our common stock in connection with
employment on other performance services; (xi) U.S. expatriates; (xii) controlled foreign corporations; or (xiii) passive foreign
investment companies. In addition, this summary does not address the tax consequences arising under the laws of any foreign, state
or local jurisdiction and U.S. federal tax consequences other than federal income taxation. This discussion also assumes that
the shares of our common stock were, and the shares of our common stock received pursuant to the reverse stock split will be,
held as “capital assets” (as defined in the Code). If a partnership (including any entity or arrangement treated as
a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a holder that is a
partner in the partnership generally will depend upon the status of the partner and the activities of the partnership.