UNITED STATES
______________________
SCHEDULE 14A INFORMATION
______________________
(Amendment No.
)
Filed by the Registrant
☒
Filed by a party other than the Registrant
☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a
-6
(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under §240.14a
-12
ALLARITY THERAPEUTICS, INC.
__________________________________________________________
Payment of Filing Fee (Check all boxes that apply):
☒
No fee required
☐
Fee paid previously with preliminary materials
☐
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a
-6
(i)(1) and 0
-11
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act Of 1934
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
24 School Street, 2
nd
Floor
Boston, MA 02108
Dear Stockholders:
You are cordially invited to attend our virtual Special Meeting of Stockholders of Allarity Therapeutics, Inc. (the “Special Meeting”). The Special Meeting will be held on Monday, April 1, 2024, at 10:00 a.m. Eastern Time.
As we believe that a virtual meeting format expands stockholder access and participation and improves communications, the Special Meeting will be held in a virtual meeting format only.
You or your proxyholder will be able to attend the Special Meeting, vote, and submit your questions during the meeting only via live audio webcast by visiting https: // meetnow.global / MFCDWVA . To participate in the meeting, you will need to review the information included in the accompanying proxy statement (the “Proxy Statement”) or on your proxy card that we have mailed to you. You will not be able to attend the meeting in person.
The accompanying notice of the Special Meeting (the “Notice of Special Meeting”) and the Proxy Statement have been made part of this invitation. Details regarding the Special Meeting and the business to be conducted at the Special Meeting are more fully described in the accompanying Notice of Special Meeting and Proxy Statement. You are entitled to vote at our Special Meeting and any adjournments, continuations or postponements only if you were a stockholder as of February 21, 2024, and entitled to vote as of such date, as described in the accompanying Proxy Statement. Holders of Common Stock and Series A Convertible Preferred Stock will be entitled to vote together, as a single class, only on Proposal 1 (Amendment to the 2021 Plan Proposal), Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal), as further described in the accompanying Proxy Statement. No other matters may be brought before the Special Meeting.
Your vote is very important, regardless of the number of shares of our voting securities that you own. Whether or not you expect to attend the Special Meeting online, please vote as promptly as possible by following the instructions in the accompanying Proxy Statement to ensure your representation and the presence of a quorum at the Special Meeting.
Details regarding logging onto and attending the virtual meeting over the website and the business to be conducted at the Special Meeting are described in the accompanying Notice of Special Meeting and Proxy Statement. Whether or not you attend the Special Meeting, it is important that your shares be represented and voted at the Special Meeting. After reading the Proxy Statement, even if you intend to attend the Special Meeting, we ask that you please promptly vote via the Internet or by telephone, or please promptly submit your proxy by dating, signing, and returning the enclosed proxy card in the enclosed postage -prepaid envelope, to ensure that your votes are counted. If you vote via the Internet, vote by telephone, or submit your proxy card, you can still attend the Special Meeting virtually. Please review the instructions on each of your voting options described in the accompanying Proxy Statement.
If your shares are held in the name of a broker, trust, bank or other nominee, and you receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by such broker or other intermediary.
The Board of Directors and management of Allarity Therapeutics, Inc. look forward to your attendance at the Special Meeting.
|
By Order of the Board of Directors, |
||
|
/s/ Gerald McLaughlin |
||
|
Boston, MA |
Gerald McLaughlin |
|
|
March 7, 2024 |
Chairman of the Board |
24 School Street, 2
nd
Floor
Boston, MA 02108
Notice of Special Meeting of Stockholders
To Be Held on
April 1
, 2024
Dear Stockholders:
Notice is hereby given that the Special Meeting of Stockholders of Allarity Therapeutics, Inc., a Delaware corporation (the “Special Meeting”), will be held on Monday, April 1, 2024, at 10:00 a.m. Eastern Time and it will be a completely virtual meeting of stockholders via live audio webcast at https: // meetnow.global / MFCDWVA . Only stockholders of record of our outstanding shares of Common Stock and Series A Convertible Preferred Stock (“Series A Preferred Stock”) on February 21, 2024 (the “Record Date”) will be entitled to vote at the Special Meeting and any adjournments, continuations or postponements thereof that may take place. Holders of our shares of Common Stock and Series A Preferred Stock will be entitled to vote, together as a single class, on Proposal 1 (Amendment to the 2021 Plan Proposal), Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal). We are holding the Special Meeting for the following purposes, which are more fully described in the accompanying Proxy Statement:
1. To approve an amendment to the Allarity Therapeutics, Inc. 2021 Equity Incentive Plan, a copy of such amended and restated plan is included as Appendix A to the Proxy Statement (the “2021 Plan”), to increase the aggregate number of shares of common stock authorized for issuance by 1,000,000 shares (the “Amendment to the 2021 Plan Proposal”);
2. To approve an amendment to our Certificate of Incorporation, as amended, in substantially the form attached to the Proxy Statement as Appendix B , to, at the discretion of the Board of Directors of the Company (the “Board”), effect a reverse stock split with respect to the Company’s issued and outstanding common stock, par value $0.0001 per share, at a ratio between 1 -for-5 and 1 -for-20 (the “Range”), with the ratio within such Range to be determined at the discretion of the Board (the “Reverse Stock Split Proposal”) and included in a public announcement; and
3. To approve the adjournment of the meeting, if necessary or advisable, to solicit additional proxies in favor of the Reverse Stock Split Proposal (“Adjournment Proposal”).
If you are a stockholder of record, you will be able to attend and participate in the Special Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting https: // meetnow.global / MFCDWVA . To participate in the Special Meeting, you must have your control number that is shown on your proxy card. Further information about how to attend the Special Meeting online, vote your shares online during the meeting, and submit questions online during the Special Meeting is included in the Proxy Statement.
The Board has fixed the close of business on February 21, 2024 as the Record Date for the Special Meeting. Only holders of our Common Stock and Series A Preferred Stock of record on the Record Date are entitled to receive Notice of the Special Meeting and Proxy Statement, and only such stockholders, or their legal proxy holders, are entitled to vote at the Special Meeting or at any postponements, or continuations, or adjournments of the Special Meeting. Shares of Common Stock and Series A Preferred Stock will be entitled to vote on the Reverse Stock Split Proposal, and Adjournment Proposal. No other matter will be presented at the Special Meeting. A complete list of registered stockholders entitled to vote at the Special Meeting will be available for inspection at our offices during regular business hours for the ten (10) calendar days prior to the Special Meeting and online during the Special Meeting.
If you have questions about your stock ownership, you may contact us or our transfer agent, Computershare, at (866) 641 -4276 .
It is important that your shares are represented at the Special Meeting. Whether or not you expect to participate in the virtual Special Meeting, we hope that you will promptly vote and submit your proxy by dating, signing, and returning the enclosed proxy card, or vote via the Internet or by telephone. This will not limit your rights to attend or vote during the Special Meeting. Please note, however, that if your shares are held of record by a broker, bank, or other agent and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
|
By Order of the Board of Directors, |
||
|
/s/ Gerald McLaughlin |
||
|
Boston, MA |
Gerald McLaughlin |
|
|
March 7, 2024 |
Chairman of the Board |
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to Be Held on April 1 , 2024:
The Notice of the Special Meeting and Proxy Statement are electronically available at http: //www.edocumentview .com / ALLR
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to Be Held on April 1, 2024:
The Notice of the Special Meeting and Proxy Statement are electronically available at htt p://www.edocumentvi ew.com / ALLR
Forward -Looking Statements. The Proxy Statement may contain “ forward -looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements other than statements of historical facts included in the Proxy Statement are forward -looking statements. In some cases, you can identify forward -looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward -looking statements. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward -looking statements expressed or implied in the Proxy Statement. Such risks, uncertainties and other factors include those risks described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10 -K and Quarterly Report on Form 10 -Q for the nine months period ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission (“SEC”) and other subsequent documents we file with the SEC. The Company expressly disclaims any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as required by law.
i
PROXY STATEMENT
GENERAL INFORMATION ABOUT THE SPECIAL MEETING
Allarity Therapeutics, Inc. (“Allarity,” “we,” “us,” “our” or the “Company”) has prepared these materials for its virtual Special Meeting of Stockholders and any adjournment, continuation, or postponement thereof (the “Special Meeting”). The Special Meeting is scheduled to begin at 10:00 a.m. Eastern Time, on Monday, April
1, 2024. Unless the context otherwise requires, references in this Proxy Statement to “stockholders” or “holders” are to the holders of record of our common stock, par value $0.0001 per share (“common stock” or “Common Stock”), and holders of our Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) as of February 21, 2024.
The Special Meeting will be a completely virtual meeting conducted via live audio webcast. We believe this technology provides expanded access, improved communication and cost savings for our stockholders. Hosting a virtual meeting enables increased stockholder attendance and participation from any location around the world. If you are a record holder of shares of our Common Stock or Series A Preferred Stock at the close of business on February 21, 2024 (the “Record Date”), you are invited to attend the Special Meeting virtually and to vote on the proposals described in this Proxy Statement applicable to the class of stock which you held.
Our proxy materials are first being mailed to stockholders on or about March
7, 2024. We are soliciting proxies pursuant to this Proxy Statement for use at the Special Meeting. Our Proxy Statement and other proxy materials are electronically available at
http:
//
www.edocumentview.com
/
ALLR
SPECIAL MEETING OF STOCKHOLDERS
To Be Held On
April 1
, 2024
1
GENERAL INFORMATION ABOUT THE PROXY MATERIALS,
SPECIAL MEETING AND VOTING
Why am I receiving these materials?
Our Board of Directors is soliciting your proxy to vote at our Special Meeting, including at any adjournment, continuation, or postponement of the meeting. You are invited to attend the Special Meeting via the webcast to vote on the proposals described in the Proxy Statement. However, you do not need to attend the meeting to vote your shares. Instead, you may follow the instructions below to submit your proxy by telephone or through the Internet, or by the paper proxy card you received in the mail, by completing, signing and returning the proxy card by mail.
How can I attend the Special Meeting?
The Special Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by audio webcast. You are entitled to participate in the Special Meeting only if you were a stockholder of record of Common Stock and Series A Preferred Stock as of the close of business on February 21, 2024, or if you hold a valid proxy for the Special Meeting. No physical meeting will be held. You will be able to attend the Special Meeting online and submit your questions during the meeting by visiting https: // meetnow.global / MFCDWVA . You also will be able to vote your shares online by attending the Special Meeting by webcast.
To participate in the Special Meeting, you will need to review the information included on your proxy card or on the instructions that accompanied your proxy materials. To participate in the Special Meeting, you must have your control number that is shown on your proxy card.
If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.
The online meeting will begin promptly at 10:00 a.m., Eastern Time. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this Proxy Statement. Please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone or similar companies.
How do I register to attend the Special Meeting virtually on the Internet?
If you are a registered stockholder (i.e., you hold your shares directly through our transfer agent, Computershare), you do not need to register to attend the Special Meeting virtually on the Internet. You will be able to attend and participate in the Special Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting https: // meetnow.global / MFCDWVA . To participate in the Special Meeting, you must have your control number that is shown on your proxy card.
If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Special Meeting virtually on the Internet. To register to attend the Special Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Allarity Therapeutics, Inc. holdings, along with your name and email address, to Computershare. Requests for registration must be labelled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on March 24, 2024. You will receive a confirmation of your registration by email after we receive your registration materials.
Requests for registration should be directed to us at the following:
• By email. Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com.
• By mail:
Computershare
Allarity Therapeutics, Inc. Legal Proxy
P.O. Box 43001
Providence, RI 02940
-3001
2
What if I have trouble accessing the Special Meeting virtually?
The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up -to -date version of applicable software and plugins. Note: Internet Explorer is not a supported browser. Participants should ensure that they have a strong Wi -Fi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. For further assistance, should you need it, you may call (888) 724 -2416 .
What is a proxy?
A proxy is another person that you legally designate to vote your stock. If you designate someone as your proxy in a written document, that document is also called a “proxy” or a “proxy card.” By using the methods discussed below, you will be appointing Thomas H. Jensen or Joan Brown as your proxy. The proxy agent will vote on your behalf, and will have the authority to appoint a substitute to act as proxy. If you are unable to attend the Special Meeting, please vote by proxy so that your shares may be voted.
Who can vote at the Special Meeting?
Only our stockholders of record of our Common Stock and Series A Preferred Stock at the close of business on the Record Date, or their legal proxy holders are entitled to notice and vote at the Special Meeting and at any adjournments or postponements thereof. As of the Record Date, there were 6,178,892 shares of Common Stock and 1,296 shares of Series A Preferred Stock issued and outstanding and entitled to vote, subject to any beneficial ownership limitation.
Holders of record of shares of Common Stock and holders of record of shares of Series A Preferred Stock, subject to any beneficial ownership limitations, have the right to vote, together as a single class on Proposal 1 (Amendment to the 2021 Plan Proposal), Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal).
We are not aware of any other matter, and there will be no other matter, to be acted upon at the Special Meeting other than the matters described in this Proxy Statement.
In light of the urgent need to schedule the Special Meeting in order to increase our authorized shares of Common Stock, we could not initiate the inquiry required by Rule 14a -13 (a)(1), promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a full twenty (20) business days prior to the Record Date. We initiated that inquiry as soon as we established the Record Date for the Special Meeting. However, we believe that the broker inquiry required under Rule 14a -13 (a)(1) of the Exchange Act that has been conducted on our behalf has produced a complete data set of stockholders, banks and brokers as of the Record Date.
What are the voting rights of the stockholders?
On May 30, 2023, the Company filed the Amended COD with the Delaware Secretary of State to amend the voting rights of the Series A Preferred Stock, which among other things provided additional voting rights to the Series A Preferred Stock. Under the Amended COD, holders of the Series A Preferred Stock have a right to vote on all matters presented at the Special Meeting together with the Common Stock as a single class on an “as converted” basis using the conversion price of $0.405 and based on stated value of $1,080 subject to a beneficial ownership limitation of 9.99%. The Series A Preferred Stock voting rights previously granted to the Board relating to Proposals 1 and 2 expired on July 31, 2023.
As of the Record Date, there were 6,178,892 shares of Common Stock outstanding, and 1,296 shares of Series A Preferred Stock outstanding (which was held by one holder of record).
Common Stock. Each share of our Common Stock outstanding as of the Record Date is entitled to one (1) vote per share on all matters properly brought before the Special Meeting.
Series A Preferred Stock. Each share of Series A Preferred Stock outstanding as of the Record Date is entitled to vote as follows:
2,667 votes per share of Series A Preferred Stock on all matters presented to the stockholders for approval the Special Meeting, voting together with the Common Stock as a single class, on an “as -converted ” basis based on conversion price of $0.405 and stated par value of $1,080, subject to a beneficial ownership limitation of 9.99%.
3
Based on 1,296 shares of Series A Preferred Stock outstanding and entitled to vote as of the Record Date as a result of the beneficial ownership limitation of 9.99%, the holder of the Series A Preferred Stock is entitled to an aggregate 3,456,432 votes for all matters presented at the Special Meeting.
Stockholder of Record: Shares Registered in Your Name
If on the Record Date, your shares of Common Stock or Series A Preferred Stock were registered directly in your name with our transfer agent, Computershare, or in the Company’s corporate stockholder registrar in the case of shares relating to Series A Preferred Stock, then you are a stockholder of record. If you are a stockholder of record entitled to vote, you may vote at https: // meetnow.global / MFCDWVA during the Special Meeting, via the Internet, by mail, or by telephone as described below. Giving a proxy will not affect your right to vote during the Special Meeting. Whether or not you plan to attend the meeting, we urge you to vote by proxy over the telephone or on the Internet as instructed below or by paper proxy card, fill out and return the proxy mailed to you, to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on the Record Date, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and the proxy statement is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. Stockholders holding shares through a bank or broker should follow the instructions on the voting instruction card received from the bank or broker. You are also invited to attend the Special Meeting. However, since you are not the stockholder of record, you may not vote your shares at the meeting or ask questions unless you request and obtain a valid proxy from your broker, bank or other agent and register with Computershare in advance.
To register to vote or ask questions at the Special Meeting you must submit proof of your proxy power (legal proxy) reflecting your Allarity Therapeutics, Inc. holdings, along with your name and email address, to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on March 24, 2024. You will receive a confirmation of your registration by email after Computershare receives your registration materials.
Requests for registration should be directed to Computershare at the following:
• By email: Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com
• By mail: Computershare
Allarity Therapeutics, Inc. Legal Proxy
P.O. Box 43001
Providence, RI 02940
-3001
What am I voting on?
The list below sets out the matters scheduled for a vote at the Special Meeting. Holders of Common Stock are entitled to vote on Proposal 1 (Amendment to the 2021 Plan Proposal), Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal). No other matters will be presented at the Special Meeting. Holders of Series A Preferred Stock (1) are entitled to vote on all matters presented at the Special Meeting, subject to any beneficial ownership limitations, including Proposal 1 (Amendment to the 2021 Plan Proposal), Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal).
|
Proposal 1: |
To approve an amendment to the Allarity Therapeutics, Inc. 2021 Equity Incentive Plan, a copy of such amended and restated plan is included as Appendix A to the Proxy Statement (the “2021 Plan”), to increase the aggregate number of shares of common stock authorized for issuance by 1,000,000 shares (the “Amendment to the 2021 Plan Proposal”). |
4
|
Proposal 2: |
To approve an amendment to our Certificate of Incorporation, as amended, in substantially the form attached to the Proxy Statement as Appendix B , to, at the discretion of the Board of Directors of the Company (the “Board”), effect a reverse stock split with respect to the Company’s issued and outstanding common stock, par value $0.0001 per share, at a ratio between 1 -for-5 and 1 -for-20 (the “Range”), with the ratio within such Range to be determined at the discretion of the Board, subject to the consent of the holder of Series A Preferred Stock (the “Reverse Stock Split Proposal”) and included in a public announcement. |
|||
|
Proposal 3: |
To approve the adjournment of the meeting, if necessary or advisable, to solicit additional proxies in favor of the Reverse Stock Split Proposal (“Adjournment Proposal”). |
No other matters will be presented at the Special Meeting.
How do I vote?
You are invited to attend the virtual Special Meeting online to vote on the proposals described in this Proxy Statement during the Special Meeting. If you are a stockholder of record entitled to vote the shares, you may vote your shares by simply following the instructions below to vote via the Internet, by telephone or by mail. Even if you intend to attend the Special Meeting online, we encourage you to vote your shares in advance using one of the methods described below to ensure that your vote will be represented at the Special Meeting.
Stockholder of Record: Shares Registered in Your Name
If, on the Record Date, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (Computershare), or in the Company’s corporate stockholder registrar in the case of shares relating to Series A Preferred Stock, then you are a stockholder of record. If you are a stockholder of record entitled to vote then you may vote those shares at https: // meetnow.global / MFCDWVA during the Special Meeting, vote by proxy over the telephone, vote by proxy through the Internet or vote by proxy using a proxy card that was mailed to you. Whether or not you plan to attend the Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Special Meeting and vote at that time even if you have already voted by proxy.
• Voting via the Internet. To vote through the Internet before the Special Meeting, go to http://www.investorvote.com/ALLR to complete an electronic proxy card. You will need to review the information included on your proxy card. We encourage you to vote via the Internet.
• Voting by telephone. To vote over the telephone, dial toll -free 1 -800-652-VOTE (8683) using a touch -tone telephone and follow the recorded instructions. You will be asked to provide the company number and control number from the proxy card.
• Voting by mail. To vote using the proxy card, simply complete, sign and date the proxy card that was delivered to you by mail and return it promptly in the envelope provided. If you return your signed proxy card to us before the Special Meeting, we will vote your shares as you direct.
• Voting at the Special Meeting. To vote at the Special Meeting, you must join live online at https: //meetnow.global/ MFCDWVA . The webcast will start at 10:00 a.m., Eastern Time. To participate and vote in the Special Meeting, you will need to review the information included on your proxy card or on the instructions included in the instructions that accompanied your proxy material. You may vote and submit questions while attending the Special Meeting online.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If, on the Record Date, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name.” The organization holding those shares is considered to be the stockholder of record for purposes of the Special Meeting. As a beneficial owner, you have the right to direct the organization holding those shares regarding how to vote such shares. You should have received a notice containing voting instructions from the organization that holds those shares. Follow the instructions provided by that organization to ensure that your vote is counted. To vote at the Special Meeting, you must obtain a valid proxy from your broker, bank, or other agent, register with Computershare in advance as described above, and vote in accordance with the procedures described above. A legal proxy is a written document
5
that authorizes you to vote your shares held in street name at the Special Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy. Follow the instructions from your broker or bank or contact your broker or bank to request a proxy form.
In addition to providing stockholders of record a printed proxy to vote by mail, we also provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions; however, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record entitled to vote and do not vote by telephone, through the Internet, by completing your proxy card, or at https: // meetnow.global / MFCDWVA during the Special Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares held in “street name” and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the particular proposal is deemed to be a “routine” matter under NYSE Rule 452. Brokers and nominees can use their discretion to vote “uninstructed” shares only with respect to matters that are considered to be “routine.” Proposal 2 (Reverse Stock Split Proposal) and Proposal 3 (Adjournment Proposal) are considered routine matters under NYSE Rule 452. Proposal 1 (Amendment to the 2021 Plan Proposal) is a non -routine proposal and, therefore, a “non -discretionary ” item. If you do not instruct your broker how to vote with respect to Proposal 1 (Amendment to the 2021 Plan Proposal), your broker, bank, or other nominee may not vote for this proposal, and those votes will be counted as “broker non -votes .”
If you are a beneficial owner of shares held in “street name” you must provide voting instructions to your broker, bank, or other agent by the deadline provided in the materials you receive from such organization in order to ensure your shares are voted in the way you would prefer.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “ For ” Proposal 1 (Amendment to the 2021 Plan Proposal), “ For ” Proposal 2 (Reverse Stock Split Proposal) and “ For ” Proposal 3 (Adjournment Proposal).
Who am I being asked to appoint as proxy holders and what does it mean?
Our Board of Directors asks you to appoint Thomas H. Jensen, the Chief Executive Officer, and Joan Brown, the Chief Financial Officer, as your proxy holders to vote your shares at the Special Meeting. You make this appointment by voting by telephone, through the Internet, or by completing your proxy card.
If appointed by you, either one of the proxy holders will vote your shares as you direct on the matters described in this Proxy Statement. In the absence of your direction, they will vote your shares as recommended by our Board.
Unless you otherwise indicate on the proxy card, you also authorize your proxy holders to vote your shares on any matters not known by our Board of Directors at the time this Proxy Statement was printed and which, under our amended and restated bylaws (“Bylaws”), may be properly presented for action at the Special Meeting. As of the date of this Proxy Statement, our Board of Directors knows of no other matters that will be presented for consideration at the Special Meeting
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Special Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
• You may submit a properly completed proxy card with a later date.
• You may grant a subsequent proxy by telephone or through the Internet.
6
• You may send a timely written notice that you are revoking your proxy to Thomas H. Jensen, Chief Executive Officer and Corporate Secretary, or Joan Brown, Chief Financial Officer, which is received by the Company or Computershare.
• You may attend the Special Meeting via the live webcast and vote. Attendance at the Special Meeting will not cause your previously granted proxy to be revoked unless you specifically so request, or you vote at the Special Meeting.
Your most recent vote, whether at the Special Meeting, by proxy card or by telephone or Internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
Stockholders holding shares through a bank or broker should follow the instructions for revocation provided by the bank or broker.
How many votes are needed to approve each proposal?
• For Proposal 1, approval to amend the 2021 Plan, to increase the aggregate number of shares of common stock authorized for issuance by 1,000,000 shares requires the affirmative vote of a majority of the votes cast on the matter at the Special Meeting. Abstentions will have the same effect as an “AGAINST” vote on this proposal. Broker non -votes will have no effect on the outcome of this proposal.
• For Proposal 2, approval to amend the Certificate of Incorporation to effect the Reverse Stock Split, requires the affirmative vote of a majority of the votes cast on the matter at the Special Meeting. Abstentions will have no effect on this proposal. No broker non -votes are expected in connection with this proposal.
• For Proposal 3, adjournment of Special Meeting to solicit votes in favor of the Reverse Stock Split, requires an affirmative vote by a majority of the shares of Common Stock and Series A Preferred Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the subject matter and voting together as a single class. Accordingly, if a quorum is present at the Special Meeting, for approval this proposal must receive “For” votes from the holders of a majority of shares of Common Stock and Series A Preferred Stock present at the meeting or represented by proxy and entitled to vote on the subject matter. Abstentions will have the same effect as an “Against” vote on this proposal. Broker non -votes will have no effect on the outcome of this proposal. However, this proposal is a routine matter and brokers and other nominees may generally vote in their discretion on routine matters, and therefore broker non -votes are not expected on this proposal.
Please refer to the discussion above under “Who can vote at the Special Meeting?” and “What are the voting rights of the stockholders?” for a description of the Series A Preferred Stock.
What is the quorum requirement?
A quorum is the minimum number of shares required to be present or represented by proxy at the Special Meeting to properly hold a meeting of stockholders and conduct business under our bylaws and Delaware law. The presence, in person or by proxy, of one -third of the voting power of the stock issued, outstanding and entitled to vote at the Special Meeting will constitute a quorum at the Special Meeting. Abstentions and broker non -votes will be counted as shares present and entitled to vote for the purposes of determining a quorum for the Special Meeting. “Broker non -votes ” occur when brokers, banks or other nominees that hold shares on behalf of beneficial owners do not receive voting instructions from the beneficial owners prior to the meeting and do not have discretionary voting authority to vote those shares.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank, or other nominee) or if you vote by telephone, over the Internet or at the Special Meeting. Abstentions and broker non -votes will be counted towards the quorum requirement.
If a quorum is not present, we may propose to adjourn the Special Meeting to solicit additional proxies and reconvene the Special Meeting at a later date.
7
What does it mean if I receive more than one Proxy Statement?
If you receive more than one Proxy Statement, your shares may be registered in more than one name or held in different registered accounts. Please follow the voting instructions on the Proxy to ensure that all of your shares are voted.
How can I find out the results of the voting at the Special Meeting?
Preliminary voting results will be announced at the Special Meeting. Final voting results will be published in a current report on Form 8 -K that we expect to file with the SEC within four (4) business days after the Special Meeting. If final voting results are not available to us in time to file a Form 8 -K within four (4) business days after the Special Meeting, we intend to file a Form 8 -K to publish preliminary results and, within four (4) business days after the final results are known to us, file an additional Form 8 -K to publish the final results.
When will the Reverse Stock Split be effective?
The effectiveness of the Reverse Stock Split or the abandonment thereof notwithstanding stockholder approval, will be determined by the Board, and if implemented, subject to the consent of the holder of Series A Preferred Stock, following the Special Meeting any time. The text of the proposed form of Certificate of Amendment to our Certificate of Incorporation for the Reverse Stock Split is attached hereto as Appendix B (“Certificate of Amendment”). If approved by stockholders and implemented by the Board, subject to the consent of the holder of Series A Preferred Stock, the Reverse Stock Split will become effective upon the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware, or such later date as is chosen by the Board and set forth in the applicable filed Certificate of Amendment.
Do I have any dissenters’ or appraisal rights with respect to any of the matters to be voted on at the Special Meeting?
No. No stockholders have any dissenters’ or appraisal rights with respect to the matters to be voted on at the Special Meeting.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. Our directors and employees may solicit proxies in person, by telephone, or by other means of communication. No directors or employees will be paid any additional compensation for soliciting proxies. We may reimburse brokerage firms, banks, dealers and other similar organizations for the cost of forwarding proxy materials to beneficial owners.
Who can help answer my questions?
If you need assistance completing your proxy card or have other questions regarding the Special Meeting, stockholders, banks and brokers can contact us at by email at investorrelations@allarity.com or by phone (401) 426 -4664 .
Householding of Proxy Materials
We have adopted an SEC approved procedure called “householding.” This procedure potentially means extra convenience for stockholders and cost savings for companies. Under this procedure, we send only one copy of the Notice of Special Meeting of Stockholders, Proxy Statement and other proxy materials, to stockholders of record who share the same address and last name, unless one of those stockholders notifies us that the stockholder would like a separate copy of such documents. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of the Notice of Special Meeting of Stockholders, Proxy Statement and or proxy materials from the other stockholder(s) sharing your address, please direct your written request to Allarity Therapeutics, Inc., Attention: Corporate Secretary, 24 School Street, 2 nd Floor, Boston, MA 02108 or contact us by phone at (401) 426 -4664 . We undertake to deliver promptly, upon any such oral or written request, a separate copy of the Notice of Special Meeting of Stockholders, Proxy Statement and proxy materials, to a stockholder at a shared address to which a single copy of these documents was delivered. Similarly, if stockholders of record sharing the same address are receiving multiple copies of the Notice of Special Meeting of Stockholders, Proxy Statement and proxy materials, and such stockholders would like a single copy to be delivered to them in the future, such stockholders may make such a request by contacting us by the means described above.
8
If you wish to update your participation in householding and you are a beneficial owner who holds shares in “street name” with a broker, bank or other nominee, you may contact your broker, bank, or other nominee or our mailing agent, Computershare at (866) 641 -4276 .
Interest of Certain Persons in Matter to be Acted Upon
No officer or director has any substantial interest, direct or indirect, by security holdings or otherwise, in Proposal 1, Proposal 2 and Proposal 3 that is not shared by all other stockholders.
9
TO APPROVE THE AMENDMENT AND RESTATEMENT OF OUR 2021 EQUITY INCENTIVE PLAN, A COPY OF SUCH AMENDED AND RESTATED PLAN IS INCLUDED AS APPENDIX A TO THE PROXY STATEMENT (THE “2021 PLAN”), TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE PLAN BY 1,000,000 (THE “AMENDMENT TO THE 2021 PLAN PROPOSAL”)
General
On March 7, 2024, our Board of Directors approved an amendment to the 2021 Plan, subject to stockholder approval, and accordingly, our Board of Directors directed that such amendment be submitted to the stockholders for approval at the Special Meeting. The amendment would increase by 1,000,000 shares the number of authorized shares of our common stock available for issuance under the 2021 Plan as of the Record Date: from 295,751 shares to 1,295,751 shares. No other material changes are being made to the 2021 Plan. The proposed 2021 Plan, as amended and restated assuming this proposal is approved by our stockholders, is included as Appendix A hereto.
Stockholder approval of the amendment to the 2021 Plan is being sought in order to meet Nasdaq listing requirements and allow for incentive stock options to meet the requirements of the Internal Revenue Code of 1986, as amended.
If our stockholders approve this proposal, the amendment to the 2021 Plan will become effective as of the date of the Special Meeting. If our stockholders fail to approve this proposal, the 2021 Plan will remain as is without any changes thereto.
As of the Record Date, the number of shares of our common stock authorized for issuance but unissued under the 2021 Plan was 295,751. As of the Record Date, the Company has outstanding stock options to purchase approximately 382 shares of common stock, 0 shares of common stock subject to outstanding restricted stock units, and warrants to purchase 0 shares of common stock, all of which were granted under the 2021 Plan and non -plan agreements.
Description of the 2021 Plan
The material features of the 2021 Plan (as proposed to be amended and modified and assuming that the increase of the shares authorized under the 2021 Plan is approved) are outlined below. This summary is qualified in its entirety by reference to the complete text of the 2021 Plan. Stockholders are encouraged to read the actual text of the 2021 Plan, which is included in the Proxy Statement as Appendix A .
The 2021 Plan became effective on December 20, 2021. It was approved by stockholders in connection with the Recapitalization Share Exchange. The 2021 Plan authorizes the award of stock options, Restricted Stock Awards (“RSAs”), Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), cash awards, performance awards and stock bonus awards. We initially reserved 1,211,374 shares of our common stock under the 2021 Plan. The number of shares reserved for issuance under our 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of 5% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined by our Board of Directors. There was no adjustment to increase on January 1, 2022. Our Board of Directors approved an increase of 5% of the outstanding shares of common stock at December 30, 2022, or 794,892 shares, effective as of January 1, 2023. As a result, as of January 1, 2023, there was a total of 2,006,266 shares of common stock reserved under the 2021 Plan, of which 1,960,266 were available for issuance.
Upon the closing of the Recapitalization Share Exchange and as of December 31, 2021, we had converted compensatory options to purchase ordinary shares of Allarity Therapeutics A/S to options to purchase 1,174,992 shares of our common stock. Except as specifically provided above, following the effective time of our Recapitalization Share Exchange, each Converted Option continues to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Compensatory Warrant immediately prior to the effective time.
As of December 31, 2023, there was an option to purchase 382 shares of common stock issued and outstanding.
10
In addition, the following shares will again be available for issuance pursuant to awards granted under our 2021 Plan:
• shares subject to options or SARs granted under our 2021 Plan that cease to be subject to the option or SAR for any reason other than exercise of the option or SAR;
• shares subject to awards granted under our 2021 Plan that are subsequently forfeited or repurchased by us at the original issue price;
• shares subject to awards granted under our 2021 Plan that otherwise terminate without such shares being issued;
• shares subject to awards granted under our 2021 Plan that are surrendered, cancelled or exchanged for cash or a different award (or combination thereof); and
• shares subject to awards under our 2021 Plan that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any award.
Purpose. The purpose of our 2021 Plan is to provide incentives to attract, retain, and motivate eligible persons whose present and potential contributions are important to the success of the Company, and any parents, subsidiaries, and affiliates that exist now or in the future, by offering them an opportunity to participate in the Company’s future performance through the grant of awards.
Administration. The 2021 Plan is expected to be administered by our Compensation Committee, all of the members of which are outside directors as defined under applicable federal tax laws, or by our Board of Directors acting in place of our Compensation Committee. Subject to the terms and conditions of the 2021 Plan, the Compensation Committee will have the authority, among other things, to select the persons to whom awards may be granted, construe and interpret our 2021 Plan as well as to determine the terms of such awards and prescribe, amend and rescind the rules and regulations relating to the plan or any award granted thereunder. The 2021 Plan provides that the Board of Directors or Compensation Committee may delegate its authority, including the authority to grant awards, to one or more executive officers to the extent permitted by applicable law, provided that awards granted to non -employee directors may only be determined by our Board of Directors.
Eligibility. The 2021 Plan provides for the grant of awards to our employees, directors, consultants, independent contractors and advisors.
Options. The 2021 Plan provides for the grant of both incentive stock options intended to qualify under Section 422 of the Code, and non -statutory stock options to purchase shares of our common stock at a stated exercise price. Incentive stock options may only be granted to employees, including officers and directors who are also employees. The exercise price of stock options granted under the 2021 Plan must be at least equal to the fair market value of our common stock on the date of grant. Incentive stock options granted to an individual who holds, directly or by attribution, more than 10% of the total combined voting power of all classes of our capital stock must have an exercise price of at least 110% of the fair market value of our common stock on the date of grant. Subject to stock splits, dividends, recapitalizations, or similar events, no more than 7,009,980 shares may be issued pursuant to the exercise of incentive stock options granted under the 2021 Plan.
Options may vest based on service or achievement of performance conditions. Our Compensation Committee may provide for options to be exercised only as they vest or to be immediately exercisable, with any shares issued on exercise being subject to our right of repurchase that lapses as the shares vest. The maximum term of options granted under the 2021 Plan is 10 years from the date of grant, except that the maximum permitted term of incentive stock options granted to an individual who holds, directly or by attribution, more than 10% of the total combined voting power of all classes of our capital stock is five years from the date of grant.
Restricted stock awards. An RSA is an offer by us to sell shares of our common stock subject to restrictions, which may lapse based on the satisfaction of service or achievement of performance conditions. The price, if any, of an RSA will be determined by the Compensation Committee. Holders of RSAs will have the right to vote and any dividends or stock distributions paid pursuant to unvested RSAs will be accrued and paid when the restrictions on such shares lapse. Unless otherwise determined by the Compensation Committee at the time of award, vesting will cease on the date the participant no longer provides services to us and unvested shares may be forfeited to or repurchased by us.
11
Stock appreciation rights. A SAR provides for a payment, in cash or shares of our common stock (up to a specified maximum of shares, if determined by our Compensation Committee), to the holder based upon the difference between the fair market value of our common stock on the date of exercise and a predetermined exercise price, multiplied by the number of shares. The exercise price of a SAR must be at least the fair market value of a share of our common stock on the date of grant. SARs may vest based on service or achievement of performance conditions and may not have a term that is longer than 10 years from the date of grant.
Restricted stock units. RSUs represent the right to receive shares of our common stock at a specified date in the future and may be subject to vesting based on service or achievement of performance conditions. Payment of earned RSUs will be made as soon as practicable on a date determined at the time of grant, and may be settled in cash, shares of our common stock or a combination of both. No RSU may have a term that is longer than 10 years from the date of grant.
Performance awards. Performance awards granted pursuant to the 2021 Plan may be in the form of a cash bonus, or an award of performance shares or performance units denominated in shares of our common stock that may be settled in cash, property or by issuance of those shares subject to the satisfaction or achievement of specified performance conditions.
Stock bonus awards. A stock bonus award provides for payment in the form of cash, shares of our common stock or a combination thereof, based on the fair market value of shares subject to such award as determined by our Compensation Committee. The awards may be granted as consideration for services already rendered, or at the discretion of the Compensation Committee, may be subject to vesting restrictions based on continued service or performance conditions.
Cash awards. A cash award is an award that is denominated in, or payable to an eligible participant solely in, cash.
Dividend equivalents rights. Dividend equivalent rights may be granted at the discretion of our Compensation Committee and represent the right to receive the value of dividends, if any, paid by us in respect of the number of shares of our common stock underlying an award. Dividend equivalent rights will be subject to the same vesting or performance conditions as the underlying award and will be paid only at such time as the underlying award has become fully vested. Dividend equivalent rights may be settled in cash, shares or other property, or a combination thereof as determined by our Compensation Committee.
Change of control. The 2021 Plan provides that, in the event of a corporate transaction, as defined in the 2021 Plan, outstanding awards under the 2021 Plan shall be subject to the agreement evidencing the corporate transaction, any or all outstanding awards may be (a) continued by us, if we are the successor entity; (b) assumed or substituted by the successor corporation, or a parent or subsidiary of the successor corporation, for substantially equivalent awards (including, but not limited to, a payment in cash or the right to acquire the same consideration paid to the stockholders of the company pursuant to the corporate transaction); (c) substituted by the successor corporation of equivalent awards with substantially the same terms for such outstanding awards; (d) accelerated in full or in part as to the exercisability or vesting; (e) settled in the full value of such outstanding award in cash, cash equivalents, or securities of the successor entity (or its parent, if any) with a fair market value equal to the required amount, followed by the cancellation of such awards; or (f) cancelled for no consideration. If applicable, the number and kind of shares and exercise prices of awards being continued, assumed, or substituted shall be adjusted pursuant to the terms of the 2021 Plan.
Adjustment. In the event of a change in the number of outstanding shares of our common stock without consideration by reason of a stock dividend, extraordinary dividend or distribution, recapitalization, stock split, reverse stock split, subdivision, combination, consolidation reclassification, spin -off or similar change in our capital structure, appropriate proportional adjustments will be made to the number and class of shares reserved for issuance under our 2021 Plan; the exercise prices, number and class of shares subject to outstanding options or SARs; the number and class of shares subject to other outstanding awards; and any applicable maximum award limits with respect to incentive stock options.
12
Exchange, repricing, and buyout of awards. Our Compensation Committee may, with the consent of the respective participants, issue new awards in exchange for the surrender and cancelation of any or all outstanding awards. Our Compensation Committee may also reduce the exercise price of options or SARs or buy an award previously granted with payment in cash, shares, or other consideration, in each case, subject to the terms of the 2021 Plan.
Director compensation limits. No non -employee director may receive awards under the 2021 Plan with a grant date value that when combined with cash compensation received for his or her service as a director, exceeds $750,000 in a calendar year or $1,000,000 in the calendar year of his or her initial service.
Clawback; transferability. All awards will be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by our Board of Directors (or a committee thereof) or required by law during the term of service of the award holder, to the extent set forth in such policy or applicable agreement. Except in limited circumstances, awards granted under our 2021 Plan may generally not be transferred in any manner prior to vesting other than by will or by the laws of descent and distribution.
Amendment and termination. Our Board of Directors may amend the 2021 Plan at any time, subject to stockholder approval as may be required. The 2021 Plan will terminate 10 years from the date our Board of Directors adopts the plan unless it is terminated earlier by our Board of Directors. No termination or amendment of the 2021 Plan may adversely affect any then -outstanding award without the consent of the affected participant, except as is necessary to comply with applicable laws.
The discussion above is intended only as a summary and does not purport to be a complete discussion of all potential tax effects relevant to recipients of awards under the 2021 Plan. Among other items this discussion does not address are tax consequences under the laws of any state, locality, or foreign jurisdiction, or any tax treaties or conventions between the United States and foreign jurisdictions. This discussion is based upon current law and interpretational authorities which are subject to change at any time.
Consequences of failing to approve the proposal
If the amendment to increase the number of shares authorized under our 2021 Plan is not approved by stockholders, the 2021 Plan will continue in full force and effect in accordance with its terms. Once the share reserve under the 2021 Plan is exhausted, we may elect to provide compensation through other means, such as cash -settled awards or other cash compensation, to assure that we and our affiliates can attract and retain qualified personnel.
Vote Required
If a quorum is present at the Special Meeting, this proposal will be approved if it receives “FOR” votes from the holders of majority of shares of Common Stock and Series A Preferred Stock present at the meeting or represented by proxy and entitled to vote on the subject matter, voting together as a single class. Abstentions will have the same effect as an “AGAINST” vote on this proposal. Broker non -votes will have no effect on the outcome of this proposal. However, this proposal is a non -routine proposal and, therefore, a “non -discretionary ” item. If you do not instruct your broker how to vote with respect to this proposal, your broker, bank, or other nominee may not vote for this proposal, and those votes will be counted as “broker non -votes .”
OUR BOARD RECOMMENDS A VOTE “FOR” PROPOSAL 1.
13
To approve an amendment to our Certificate of Incorporation, as amended, in sub stantially the form attached to the Proxy Statement as Appendix B , to, at the discretion of the Board of Directors of the Company (the “Board”), effect a reverse stock split with respect to the Company’s issued and outstanding Common Stock, par value $0.0001 per share, at a ratio BETWEEN 1-for-5 AND 1-for-2 0 (the “Range”), with the ratio within such Range to be determined at the discretion of the Board, SUBJECT TO THE CONSENT OF THE HOLDER OF sERIES A PREFERRED stock (the “Reverse Stock Split Proposal”) and included in a public announcement
Background and Proposed Amendment
On March 20, 2024, our stockholders of record entitled to vote at the Special Meeting of Stockholders approved an amendment to our Certificate of Incorporation, at the discretion of the Board, effect a reverse stock split with respect to our issued and outstanding common stock at a ratio between 1 -for-20 and 1 -for-35 . Upon stockholder approval, the Board determined a ratio of 1 -for-35 for the reverse stock split. We effected 1 -for-35 and 1 -for-40 share consolidations of our common stock on March 24, 2023 and June 28, 2023, respectively (collectively, the “Share Consolidation”). The purpose of the Share Consolidation was to increase the trading price of our Common Stock to meet the minimum per share bid price requirement for continued listing on The Nasdaq Stock Market (“Nasdaq”). The primary goal of the Reverse Stock Split is to increase the per share market price of our Common Stock to meet the minimum per share bid price requirements for continued listing on Nasdaq.
We believe that a range of Reverse Stock Split ratios provides us with the most flexibility to achieve the desired results of the Reverse Stock Split. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e -3 promulgated under the Exchange Act. The Reverse Stock Split is not intended to modify the rights of existing stockholders in any material respect.
If the Reverse Stock Split Proposal is approved by our stockholders and the Reverse Stock Split is effected, up to every twenty (20) shares of our outstanding Common Stock would be combined and reclassified into one (1) share of Common Stock. The actual timing for implementation of the Reverse Stock Split would be determined by the Board based upon its evaluation as to when such action would be most advantageous to the Company and its stockholders. Notwithstanding approval of the Reverse Stock Split Proposal by our stockholders, the Board will have the authority to elect whether or not and when to amend our Certificate of Incorporation to effect the Reverse Stock Split. If the Reverse Stock Split Proposal, subject to consent by the holder of the Series A Preferred Stock, is approved by our stockholders, the Board will make a determination as to whether effecting the Reverse Stock Split is in the best interests of the Company and our stockholders in light of, among other things, the Company’s ability to increase the trading price of our Common Stock to meet the minimum stock price standards of Nasdaq without effecting the Reverse Stock Split, the per share price of the Common Stock immediately prior to the Reverse Stock Split and the expected stability of the per share price of the Common Stock following the Reverse Stock Split. If the Board determines that it is in the best interests of the Company and its stockholders to effect the Reverse Stock Split, it will hold a Board meeting to determine the ratio of the Reverse Stock Split. For additional information concerning the factors the Board will consider in deciding whether to effect the Reverse Stock Split, see “— Determination of the Reverse Stock Split Ratio ” and “— Board Discretion to Effect the Reverse Stock Split .”
The text of the proposed amendment to the Company’s Certificate of Incorporation to effect the Reverse Stock Split is included as Appendix B to this Proxy Statement (the “Reverse Stock Split Amendment”). If the Reverse Stock Split Proposal is approved by the Company’s stockholders, the Company will have the authority to file the Reverse Stock Split Amendment with the Secretary of State of the State of Delaware, which will become effective upon its filing, or such later date as is chosen by the Board and set forth in the Reverse Stock Split Amendment, subject to consent by the holder of the Series A Preferred Stock; provided, however, that the Reverse Stock Split Amendment is subject to revision to include such changes as may be required by the office of the Secretary of State of the State of Delaware and as the Board deems necessary and advisable. The Board has determined that the amendment is advisable and in the best interests of the Company and its stockholders and has submitted the amendment for consideration by our stockholders at the Special Meeting. In addition, the Reverse Stock Split Amendment is subject to adjustment to reflect any change as a result of the approval of Proposal 2.
14
Reasons for the Reverse Stock Split
Maintain Nasdaq Listing
We are submitting this proposal to our stockholders for approval in order to increase the trading price of our Common Stock to meet the minimum per share bid price requirement for continued listing on Nasdaq. We believe increasing the trading price of our Common Stock may also assist in our capital -raising efforts by making our Common Stock more attractive to a broader range of investors. Accordingly, we believe that the Reverse Stock Split is in our stockholders’ best interests.
On October 27, 2023, we received notification from Nasdaq that it has determined that the bid price of our Common Stock had closed at less than $1 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2). Further, Nasdaq also noted that we effected a 1:35 reverse stock split on March 24, 2023, and a 1:40 reverse stock split on June 28, 2023. Because we effected one or more reverse stock splits over the prior two -year period with a cumulative ratio of 250 shares or more to one, we will not be afforded a 180 -calendar day period to demonstrate compliance with the Listing Rule 5550(a)(2) pursuant to Listing Rule 5810(c)(3)(A)(iv).
In that regard, unless we requested an appeal from such determination, trading of our Common Stock would have been suspended at the opening of business on November 7, 2023, and a Form 25 -NSE would have been filed with the SEC which would have removed our Common Stock from listing and registration on The Nasdaq Stock Market. We filed a notice of appeal and received a hearing date of February 1, 2024. During such appeal, our Common Stock will continue to be listed on The Nasdaq Capital Market. On November 16, 2023, we received an additional notification indicating that the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10 -Q for the period ended September 30, 2023, did not satisfy the continued listing requirement under Nasdaq Listing Rule 5810(c)(3) which serves as an additional basis for delisting. The Company presented its views with respect to this additional deficiency at the Panel Hearing on February 1, 2024.
We believe that the Reverse Stock Split is our best option to meet the criteria to satisfy the minimum per share bid price requirement for continued listing on Nasdaq. A decrease in the number of outstanding shares of our Common Stock resulting from the Reverse Stock Split should, absent other factors, assist in ensuring that the per share market price of our Common Stock remains above the requisite price for continued listing. However, we cannot provide any assurance that our minimum bid price would remain over the minimum bid price requirement of Nasdaq following the Reverse Stock Split.
In addition, as noted above, we believe that the Reverse Stock Split and the resulting increase in the per share price of our Common Stock could encourage increased investor interest in our Common Stock and promote greater liquidity for our stockholders. A greater price per share of our Common Stock could allow a broader range of institutions to invest in our Common Stock (namely, funds that are prohibited or discouraged from buying stocks with a price below a certain threshold), potentially increasing marketability, trading volume and liquidity of our Common Stock. Many institutional investors view stocks trading at low prices as unduly speculative in nature and, as a result, avoid investing in such stocks. We believe that the Reverse Stock Split will provide the Board flexibility to make our Common Stock a more attractive investment for these institutional investors, which we believe will enhance the liquidity for the holders of our Common Stock and may facilitate future sales of our Common Stock. The Reverse Stock Split could also increase interest in our Common Stock for analysts and brokers who may otherwise have policies that discourage or prohibit them in following or recommending companies with low stock prices. Additionally, because brokers’ commissions on transactions in low -priced stocks generally represent a higher percentage of the stock price than commissions on higher -priced stocks, the current average price per share of our Common Stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher.
The Board intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares outstanding is in the best interests of the Company and our stockholders and is likely to improve the trading price of our Common Stock and improve the likelihood that we will be allowed to maintain our listing on Nasdaq. Accordingly, our Board approved the Reverse Stock Split as being in the best interests of the Company.
15
Risks Associated with the Reverse Stock Split
The Reverse Stock Split May Not Increase the Price of our Common Stock Over the Long-Term .
As noted above, the principal purpose of the Reverse Stock Split is to increase the trading price of our Common Stock to meet the minimum stock price standards of Nasdaq. However, the effect of the Reverse Stock Split on the market price of our Common Stock cannot be predicted with any certainty, and we cannot assure you that the Reverse Stock Split will accomplish this objective for any meaningful period of time, or at all. While we expect that the reduction in the number of outstanding shares of Common Stock will proportionally increase the market price of our Common Stock, we cannot assure you that the Reverse Stock Split will increase the market price of our Common Stock by a multiple of the Reverse Stock Split ratio, or result in any permanent or sustained increase in the market price of our Common Stock. In addition, even if the market price of our Common Stock increases as a result of the Reverse Stock Split, there is no assurance that the price increase will continue. The market price of our Common Stock may be affected by other factors which may be unrelated to the number of shares outstanding, including the Company’s business and financial performance, general market conditions, and prospects for future success.
The Reverse Stock Split May Decrease the Liquidity of our Common Stock.
The Board believes that the Reverse Stock Split may result in an increase in the market price of our Common Stock, which could lead to increased interest in our Common Stock and possibly promote greater liquidity for our stockholders. However, the Reverse Stock Split will also reduce the total number of outstanding shares of Common Stock, which may lead to reduced trading and a smaller number of market makers for our Common Stock, particularly if the price per share of our Common Stock does not increase as a result of the Reverse Stock Split.
The Reverse Stock Split May Lead to a Decrease in our Overall Market Capitalization.
The Reverse Stock Split may be viewed negatively by the market and, consequently, could lead to a decrease in our overall market capitalization. If the per share market price of our Common Stock does not increase in proportion to the Reverse Stock Split ratio, then the value of our Company, as measured by our market capitalization, will be reduced. Additionally, any reduction in our market capitalization may be magnified as a result of the smaller number of total shares of Common Stock outstanding following the Reverse Stock Split.
We Need to Raise Capital Which Will Increase Downward Pressure On the Price of Our Common Stock.
We will need to raise capital through the sale of our Common Stock or Common Stock equivalents to finance our business objectives. The price at which we may sell our Common Stock and Common Stock equivalents will most likely be at prices below the then trading price for a share of our Common Stock. The raising of capital through the sale of our Common Stock and Common Stock equivalents at prices below the then trading price will create downward pressure on the trading price for a share of Common Stock and may lead to a decrease in our overall market capitalization discussed above.
We may not be able to proceed with the Reverse Stock Split Proposal and the effectuation of the Reverse Stock Split Proposal without the consent of the holder of Series A Preferred Stock.
Among other things, under the Amended COD, the Reverse Stock Split Proposal, the effectuation of the Reverse Stock Split Proposal, and the amendment to the Company’s Certificate of Incorporation, are subject to the affirmative vote and consent by of the holders of a majority of the then outstanding shares of Series A Preferred Stock. 3i, LP is the sole holder of the Series A Preferred Stock and if 3i, LP’s consent is not obtained our Board will not have the authority to effect the Reverse Stock Split to, among other things. Any inability of our Board to effect the Reverse Stock Split could expose us to delisting from Nasdaq.
Potential Consequences if the Reverse Stock Split Proposal is Not Approved
If the Reverse Stock Split Proposal is not approved by our stockholders and consent is not obtained from the holder of Series A Preferred Stock, our Board will not have the authority to effect the Reverse Stock Split to, among other things, facilitate the continued listing of our Common Stock on Nasdaq by increasing the per share trading price of our Common Stock to help ensure a share price high enough to satisfy the $1.00 per share minimum bid price requirement. Any inability of our Board to effect the Reverse Stock Split could expose us to delisting from Nasdaq.
16
Determination of the Reverse Stock Split Ratio
The Board believes that stockholder approval of a range of potential Reverse Stock Split ratios is in the best interests of our Company and stockholders because it is not possible to predict market conditions at the time the Reverse Stock Split would be implemented. We believe that a range of Reverse Stock Split ratios provides us with the most flexibility to achieve the desired results of the Reverse Stock Split. The Reverse Stock Split ratio to be selected by our Board will be not more than 1 -for-20 .
The selection of the specific Reverse Stock Split ratio will be based on several factors, including, among other things:
• our ability to maintain the listing of our Common Stock on Nasdaq;
• the per share price of our Common Stock immediately prior to the Reverse Stock Split;
• the expected stability of the per share price of our Common Stock following the Reverse Stock Split;
• the likelihood that the Reverse Stock Split will result in increased marketability and liquidity of our Common Stock;
• prevailing market conditions;
• general economic conditions in our industry; and
• our market capitalization before and after the Reverse Stock Split.
We believe that granting our Board the authority to set the ratio for the Reverse Stock Split is essential because it allows us to take these factors into consideration and to react to changing market conditions. If the Board chooses to implement the Reverse Stock Split, the Company will make a public announcement regarding the determination of the Reverse Stock Split ratio.
Board Discretion to Effect the Reverse Stock Split
If the Reverse Stock Split proposal is approved by our stockholders and consent is obtained from holder of Series A Preferred Stock, the Board will have the discretion to implement the Reverse Stock Split or to not effect the Reverse Stock Split at all. The Board currently intends to effect the Reverse Stock Split. If the trading price of our Common Stock increases without effecting the Reverse Stock Split, the Reverse Stock Split may not be necessary. Following the Reverse Stock Split, if implemented, there can be no assurance that the market price of our Common Stock will rise in proportion to the reduction in the number of outstanding shares resulting from the Reverse Stock Split or that the market price of the post -split Common Stock can be maintained above $1.00. There also can be no assurance that our Common Stock will not be delisted from Nasdaq for other reasons.
If our stockholders approve the Reverse Stock Split proposal at the Special Meeting, the Reverse Stock Split will be effected, if at all, only upon a determination by the Board that the Reverse Stock Split is in the best interests of the Company and its stockholders at that time, subject to the consent of the holder of the Series A Preferred Stock. No further action on the part of the stockholders will be required to either effect or abandon the Reverse Stock Split.
The market price of our Common Stock is dependent upon our performance and other factors, some of which are unrelated to the number of shares outstanding. If the Reverse Stock Split is effected and the market price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split. Furthermore, the reduced number of shares that will be outstanding after the Reverse Stock Split could significantly reduce the trading volume and otherwise adversely affect the liquidity of our Common Stock.
We have not proposed the Reverse Stock Split in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our stockholders. Notwithstanding the decrease in the number of outstanding shares of Common Stock following the Reverse Stock Split, our Board does not intend for this transaction to be the first step in a “going private transaction” within the meaning of Rule 13e -3 of the Exchange Act.
17
Effects of the Reverse Stock Split
Effects of the Reverse Stock Split on Issued and Outstanding Shares.
If the Reverse Stock Split is effected, it will reduce the total number of issued and outstanding shares of Common Stock, including shares held by the Company as treasury shares, by a Reverse Stock Split ratio between 1 -for-5 and 1 -for-20 . Accordingly, each of our stockholders will own fewer shares of Common Stock as a result of the Reverse Stock Split. However, the Reverse Stock Split will affect all stockholders uniformly and will not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split would result in an adjustment to a stockholder’s ownership of Common Stock due to the treatment of fractional shares in the Reverse Stock Split. Therefore, voting rights and other rights and preferences of the holders of Common Stock will not be affected by the Reverse Stock Split (other than as a result of the treatment of fractional shares). Common stock issued pursuant to the Reverse Stock Split will remain fully paid and nonassessable, and the par value per share of Common Stock will remain $0.0001.
As of the Record Date, the Company had 6,178,892 shares of Common Stock outstanding. For purposes of illustration, if the Reverse Stock Split is effected at a ratio between 1 -for-5 and 1 -for-20 , the number of issued and outstanding shares of Common Stock after the Reverse Stock Split would be approximately 1,235,778 shares and 308,945 shares, respectively.
We are currently authorized to issue a maximum of 750,000,000 shares of our Common Stock. As of the Record Date, there were 6,178,892 shares of our Common Stock issued and outstanding. Although the number of authorized shares of our Common Stock will not change as a result of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in proportion to the ratio selected by the Board. Thus, the Reverse Stock Split will effectively increase the number of authorized and unissued shares of our Common Stock available for future issuance by the amount of the reduction effected by the Reverse Stock Split.
Following the Reverse Stock Split, the Board will have the authority, subject to applicable securities laws, to issue all authorized and unissued shares without further stockholder approval, upon such terms and conditions as the Board deems appropriate. Except as disclosed in this Proxy Statement, and our intent to raise capital through the issuance of our equity and equity -based securities in order to achieve our business objectives, we do not currently have any other plans, proposals or understandings to issue the additional shares that would be available if the Reverse Stock Split is approved and effected, but some of the additional shares underlie warrants, which could be exercised after the Reverse Stock Split Amendment is effected.
Effects of the Reverse Stock Split on Outstanding Equity Awards and Plans.
If the Reverse Stock Split is effected, the terms of equity awards granted under the 2021 Plan including (i) the number of shares and type of Common Stock (or the securities or property) which thereafter may be made the subject of awards; (ii) the number of shares and type of Common Stock (or other securities or property) subject to outstanding awards; (iii) the number of shares and type of Common Stock (or other securities or property) specified as the annual per -participant limitation under the 2021 Plan; (iv) the option price of each outstanding stock option; and (v) the amount, if any, paid for forfeited shares in accordance with the terms of the 2021 Plan, will be proportionally adjusted to the end that the same proportion of our issued and outstanding shares of Common Stock in each instance shall remain subject to exercise at the same aggregate exercise price; subject to adjustments for any fractional shares as described herein and provided, however, that the number of shares of Common Stock (or other securities or property) subject to any award shall always be a whole number. In addition, the total number of shares of Common Stock that may be the subject of future grants under the 2021 Plan, as well as any plan limits on the size of such grants (e.g., the 2021 Plan’s limit on the number of stock options or stock appreciation rights that may be granted to our executive officers in any calendar year) will be adjusted and proportionately decreased as a result of the Reverse Stock Split.
Effects of the Reverse Stock Split 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 treatment of fractional shares). For example, a holder of 1% of the voting power of the outstanding 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 Common Stock after the Reverse Stock Split.
18
Effects of the Reverse Stock Split on Regulatory Matters.
The Company is subject to the periodic reporting and other requirements of the Exchange Act. The Reverse Stock Split will not affect the Company’s obligation to publicly file financial and other information with the SEC.
Effects of the Reverse Stock Split on Authorized Share Capital.
The total number of shares of capital stock that we are authorized to issue will not be affected by the Reverse Stock Split.
Treatment of Fractional Shares in the Reverse Stock Split
The Company does not intend to issue fractional shares in the event that a stockholder owns a number of shares of Common Stock that is not evenly divisible by the Reverse Stock Split ratio. If the Reverse Stock Split is effected, each fractional share of Common Stock will be:
• rounded up to the nearest whole share of Common Stock, if such shares of Common Stock are held directly; or
• rounded down to the nearest whole share of Common Stock, if such shares are subject to an award granted under the 2021 Plan, in order to comply with the requirements of Sections 409A and 424 of the Code.
Effective Time of the Reverse Stock Split
If the Reverse Stock Split Proposal is approved by our stockholders, the Reverse Stock Split would become effective, if at all, when the Reverse Stock Split Amendment is accepted and recorded by the office of the Secretary of State of the State of Delaware, or such later date as determined by the Board as set forth in the Reverse Stock Split Amendment, subject to the consent of the holder of Series A Preferred Stock. However, notwithstanding approval of the Reverse Stock Split Proposal by our stockholders, subject to the consent of the holder of Series A Preferred Stock, the Board will have the authority to elect whether or not and when to amend our Certificate of Incorporation to effect the Reverse Stock Split.
Uncertificated Shares-Book Entry
Stockholders who hold uncertificated shares of Common Stock electronically in “book -entry ” form will have their holdings electronically adjusted by the Transfer Agent (and, for beneficial owners, by their brokers or banks that hold in “street name” for their benefit, as the case may be) to give effect to the Reverse Stock Split. If any certificate(s) or book -entry statement(s) representing pre -Reverse Stock Split shares of Common Stock to be exchanged contain a restrictive legend or notation, as applicable, the certificate(s) or book -entry statement(s) representing post -Reverse Stock Split shares of Common Stock will contain the same restrictive legend or notation.
Regulatory Approvals
The Reverse Stock Split will not be consummated, if at all, until after approval of the Company’s stockholders is obtained. The Company is not obligated to obtain any governmental approvals or comply with any state or federal regulations prior to consummating the Reverse Stock Split other than the filing of the Reverse Stock Split Amendment with the Secretary of State of the State of Delaware.
Accounting Treatment of the Reverse Stock Split
If the Reverse Stock Split is effected, the par value per share of our Common Stock will remain unchanged at $0.0001. Accordingly, on the effective date of the Reverse Stock Split, the stated capital on the Company’s consolidated balance sheets attributable to our Common Stock will be reduced in proportion to the size of the Reverse Stock Split ratio, and the additional paid -in -capital account will be increased by the amount by which the stated capital is reduced. Our stockholders’ equity, in the aggregate, will remain unchanged. Per share net income or loss will be increased because there will be fewer shares of Common Stock outstanding. The Common Stock held in treasury will be reduced in proportion to the Reverse Stock Split ratio. The Company does not anticipate that any other accounting consequences, including changes to the amount of stock -based compensation expense to be recognized in any period, will arise as a result of the Reverse Stock Split.
19
Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is a discussion of certain material U.S. federal income tax consequences of the Reverse Stock Split. This discussion is included for general information purposes only and does not purport to address all aspects of U.S. federal income tax law that may be relevant to stockholders in light of their particular circumstances. This discussion is based on the Code and current Treasury Regulations, administrative rulings and court decisions, all of which are subject to change, possibly on a retroactive basis, and any such change could affect the continuing validity of this discussion.
All stockholders are urged to consult with their own tax advisors with respect to the tax consequences of the Reverse Stock Split. This discussion does not address the tax consequences to stockholders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, partnerships, nonresident alien individuals, broker -dealers and tax -exempt entities, persons holding shares as part of a straddle, hedge, conversion transaction or other integrated investment, U.S. holders (as defined below) subject to the alternative minimum tax or the unearned income Medicare tax and U.S. holders whose functional currency is not the U.S. dollar. This summary also assumes that the pre -Reverse Stock Split shares of Common Stock were, and the post -Reverse Stock Split shares of Common Stock will be, held as a “capital asset,” as defined in Section 1221 of the Code.
As used herein, the term “U.S. holder” means a holder that is, for U.S. federal income tax purposes:
• a citizen or resident of the United States;
• a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
• an estate the income of which is subject to U.S. federal income tax regardless of its source; or
• a trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more “U.S. persons” (as defined in the Code) have the authority to control all substantial decisions of the trust or (B) that has a valid election in effect to be treated as a U.S. person.
In general, no gain or loss should be recognized by a stockholder upon the exchange of pre -Reverse Stock Split Common Stock for post -Reverse Stock Split Common Stock. The aggregate tax basis of the post -Reverse Stock Split Common Stock should be the same as the aggregate tax basis of the pre -Reverse Stock Split Common Stock exchanged in the Reverse Stock Split. A stockholder’s holding period in the post -Reverse Stock Split Common Stock should include the period during which the stockholder held the pre -Reverse Stock Split Common Stock exchanged in the Reverse Stock Split.
As noted above, we will not issue fractional shares of Common Stock in connection with the Reverse Stock Split. In certain circumstances, stockholders who would be entitled to receive fractional shares of Common Stock because they hold a number of shares not evenly divisible by the Reverse Stock Split ratio will automatically be entitled to receive an additional fraction of a share of Common Stock to round up to the next whole post -Reverse Stock Split share of Common Stock. The U.S. federal income tax consequences of the receipt of such an additional fraction of a share of Common Stock is not clear.
The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. Each stockholder is urged to consult with such stockholder’s own tax advisor with respect to the tax consequences of the Reverse Stock Split.
Vote Required
If a quorum is present at the Special Meeting, this proposal requires the affirmative vote of a majority of all votes cast on the matter at the Special Meeting. Abstentions will have no effect on this proposal. Broker non -votes are not expected in connection with this proposal.
OUR BOARD RECOMMENDS A VOTE “FOR” PROPOSAL 2 .
20
TO APPROVE THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY OR
ADVISABLE, TO SOLICIT ADDITIONAL PROXIES IN FAVOR OF THE REVERSE STOCK SPLIT PROPOSAL.
In this proposal, we are asking our stockholders to authorize us to adjourn the Special Meeting to another time and place, if necessary or advisable, to solicit additional proxies in the event there are not sufficient votes to approve the Reverse Stock Split Proposal described in this Proxy Statement at the Special Meeting. If our stockholders approve this proposal, we could adjourn the Special Meeting without a vote on Proposal 3 to solicit additional proxies and/or to seek to convince stockholders to change their votes in favor of such proposals.
If it is necessary or advisable to adjourn the Special Meeting, no notice of any adjournment of less than thirty (30) days is required to be given if the time and place of the adjourned meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, we may transact any business which might have been transacted at the original meeting.
Vote Required
If a quorum is present at the Special Meeting, this proposal will be approved if it receives “FOR” votes from the holders of majority of shares of Common Stock and Series A Preferred Stock present at the meeting or represented by proxy and entitled to vote on the subject matter, voting together as a single class. Abstentions will have the same effect as an “AGAINST” vote on this proposal. Broker non -votes will have no effect on the outcome of this proposal. However, this proposal is a routine matter and brokers and other nominees may generally vote in their discretion on routine matters, and therefore broker non -votes are not expected on this proposal.
OUR BOARD RECOMMENDS A VOTE “FOR” PROPOSAL 3.
21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and accompanying footnotes set forth information regarding the beneficial ownership of our Common Stock, including shares issuable upon the exercise or conversion of securities that entitle the holders to obtain Common Stock upon exercise or conversion) and our shares of Series A Preferred Stock as of the Record Date, by:
• each person who is known to be the beneficial owner of more than 5% of our Common Stock;
• each of our current executive officers and each of our current directors; and
• all of our executive officers and directors as a group.
Under the rules and regulations of the SEC, a person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security or has the right to acquire such powers within sixty (60) days.
The beneficial ownership of our Common Stock is based on 6,178,892 shares of Common Stock issued and outstanding as of the Record Date. As of the Record Date, there were 1,296 shares of Series A Preferred Stock outstanding. The table below does not reflect the voting power of the Series A Preferred Stock on Proposals 1 and 2, which are vested solely and exclusively in the Board at its election.
Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting and investment power with respect to their beneficially owned Common Stock.
