UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. [ ] )
| | | | | | | | | | | | | | | | | |
| | | | | |
| Filed by the Registrant | | | [X] | |
| Filed by a party other than the Registrant | [ ] | |
| Check the appropriate box: | | |
[ ]X] | Preliminary Proxy Statement | | |
| [ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[X] ] | Definitive Proxy Statement | | |
| [ ] | Definitive Additional Materials | | |
| [ ] | Soliciting Material under § 240.14a-12 | | |
OBLONG, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| | | | | | | | | | | |
| [X] | No fee required. |
| [ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | | Title of each class of securities to which transaction applies: |
| (2) | | Aggregate number of securities to which transaction applies: |
| (3) | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | | Proposed maximum aggregate value of transaction: |
| (5) | | Total fee paid: |
| [ ] | | | Fee paid previously with preliminary materials: |
| [ ] | | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | | Amount Previously Paid: |
| (2) | | Form, Schedule or Registration Statement No.: |
| (3) | | Filing Party: |
| (4) | | Date Filed: |
OBLONG, INC.
| | |
| 25587 Conifer Road, Suite 105-231, |
| Conifer, Colorado 80433 |
November 25, 2022
April , 2023
Dear Stockholder:
We are pleased to invite you to the 2022 AnnualSpecial Meeting of Stockholders (the “Annual Meeting”“Special Meeting”) of Oblong, Inc. (the “Company”“Company”), which will be held at 9:0011:30 AM MSTMT on December 30, 2022,May 18, 2023, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202.
At the AnnualSpecial Meeting, you will be asked to:
(1)elect five membersapprove the issuance of shares of our common stock underlying shares of convertible preferred stock and warrants issued pursuant to that certain Securities Purchase Agreement, dated as of March 30, 2023, by and among Oblong, Inc. and the Company’s Boardinvestors named therein, in an amount equal to 20% or more of Directors to serve untilour common stock outstanding before the Company’s next annual meetingissuance of stockholders, or until their respective successors are duly electedsuch convertible preferred stock and qualified;warrants (including upon the operation of anti-dilution provisions contained in such convertible preferred stock and warrants), as required by and in accordance with Nasdaq Listing Rule 5635(d) (the “
Issuance Proposal”);
(2)ratifyapprove an adjournment of the appointmentSpecial Meeting to a later date or dates, if necessary, to permit further solicitation and vote of EisnerAmper LLP asproxies if, based upon the Company’s independent registered public accounting firm fortabulated vote at the fiscal year ending December 31, 2022;time of the Special Meeting, there are insufficient shares of our capital stock represented, either in person or by proxy, to constitute a quorum necessary to conduct business at the Special Meeting or to approve the Issuance Proposal (the “
Adjournment Proposal”); and
(3)approve an amendment to Article FOURTH of the Company's Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company's issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15;
(4)approve, on an advisory and non-binding basis, executive compensation as described in this proxy statement; and
(5)transact other business as may properly come before the AnnualSpecial Meeting.
The enclosed Notice and Proxy Statement contain complete information about the matters to be considered at the AnnualSpecial Meeting. We are also enclosing our 2021 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on March 29, 2022. Copies of these materials are also available for review at www.oblong.com/company/investor-relations or may be mailed to you free of charge by requesting a copy from us at 303-640-3838 or mailing a request to the Oblong Investor Relations department located at Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. The Proxy Statement and our 2021 Annual Report on Form 10-K areis also available for viewing, printing and downloading at www.proxyvote.com.
In light of the COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a change is made, we will announce the change in advance, and the details on how to participate will be issued by press release, posted on our website, and filed with the SEC as additional proxy materials. Whether or not you expect to attend the AnnualSpecial Meeting in person, we urge you to complete, date, sign and return the proxy card in the enclosed envelope or submit your proxy by telephone or internet, so that your shares will be represented and voted at the AnnualSpecial Meeting.
Sincerely,
/s/ Peter Holst
Peter Holst
Director, President, and Chief Executive Officer of Oblong, Inc.
This proxy statement is dated November 25, 2022,April , 2023, and is first being mailed to stockholders of the Company on or about November 25, 2022.
May , 2023.
OBLONG, INC.
| | |
| 25587 Conifer Road, Suite 105-231, |
| Conifer, Colorado 80433 |
NOTICE OF THE 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 30, 2022
MAY 18, 2023
To our Stockholders:
The 2022 AnnualSpecial Meeting of Stockholders (the “Annual Meeting”“Special Meeting”) of Oblong, Inc. (the “Company”“Company”, “Oblong”“Oblong”, “we”“we” or “our”“our”), will be held at 9:0011:30 AM MSTMT on December 30, 2022,May 18, 2023, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202, for the following purposes:
(1)To approve the issuance of shares of our common stock underlying shares of convertible preferred stock and warrants issued pursuant to elect five membersthat certain Securities Purchase Agreement, dated as of March 30, 2023, by and among Oblong, Inc. and the Company’s Boardinvestors named therein, in an amount equal to 20% or more of Directors to serve untilour common stock outstanding before the Company’s next annual meetingissuance of stockholders, or until their respective successors are duly electedsuch convertible preferred stock and qualified;warrants (including upon the operation of anti-dilution provisions contained in such convertible preferred stock and warrants), as required by and in accordance with Nasdaq Listing Rule 5635(d) (the “
Issuance Proposal”);
(2)To approve an adjournment of the Special Meeting to ratifya later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the appointmenttabulated vote at the time of EisnerAmper LLP as the Company’s independent registered public accounting firm forSpecial Meeting, there are insufficient shares of our capital stock represented, either in person or by proxy, to constitute a quorum necessary to conduct business at the fiscal year ending December 31, 2022;Special Meeting or at the time of the Special Meeting, to approve the Issuance Proposal (the “
Adjournment Proposal”); and
(3)approve an amendment to Article FOURTH of the Company's Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company's issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15;
(4)approve, on an advisory and non-binding basis, executive compensation as described in this proxy statement; and
(5)toTo transact other business as may properly come before the AnnualSpecial Meeting.
WHO MAY VOTE:
Stockholders of record of our Common Stockcommon stock as of the close of business on November 17, 2022,April 24, 2023, the record date for the AnnualSpecial Meeting, are entitled to vote at the AnnualSpecial Meeting, or any adjournment or postponement thereof. A list of stockholders will be available at the AnnualSpecial Meeting and during the 10 days prior to the AnnualSpecial Meeting at our principal executive offices located at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. All stockholders are cordially invited to attend the AnnualSpecial Meeting. Whether you plan to attend the AnnualSpecial Meeting or not, we urge you to vote and submit your proxy by
internet, telephone or mail to ensure the presence of a quorum. You may change or revoke your proxy at any time before it is voted at the AnnualSpecial Meeting.
To ensure your representation at the AnnualSpecial Meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the internet. Please submit your proxy promptly,
whether or not you expect to attend the AnnualSpecial Meeting. Submitting a proxy now will not prevent you from being able to vote in person at the AnnualSpecial Meeting.
In light of the COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a change is made, we will announce the change in advance, and details on how to participate will be issued by press release, posted on our website, and filed with the SEC as additional proxy materials.
The Oblong Board of Directors recommends that you vote “FOR” each of the proposals in this proxy statement.
By order of the Board of Directors,
/s/ David Clark
David Clark
Chief Financial Officer, Treasurer, and Corporate Secretary of Oblong, Inc.
YOUR PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY CARD OR TO VOTE BY TELEPHONE OR INTERNET.
TABLE OF CONTENTS
| | | | | |
| Page |
QUESTIONS AND ANSWERS ABOUT THE OBLONG ANNUALSPECIAL MEETING | |
PROPOSAL NO. 1 -- ELECTION– ISSUANCE OF DIRECTORSSECURITIES IN ACCORDANCE WITH NASDAQ RULE 5635(d) | |
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | |
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | |
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM- ADJOURNMENT PROPOSAL | |
PROPOSAL NO. 3 -- AMENDMENT TO COMPANY CHARTER TO EFFECT A REVERSE STOCK SPLIT | |
PROPOSAL NO. 4 -- ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | |
EXECUTIVE OFFICERS | |
EXECUTIVE COMPENSATION | |
DIRECTOR COMPENSATION | |
EQUITY COMPENSATION PLAN INFORMATION | |
TRANSACTIONS WITH RELATED PERSONS | |
HEDGING POLICY | |
CODE OF CONDUCT AND ETHICS | |
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR | |
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS | |
| WHERE YOU CAN FIND MORE INFORMATION | |
| OTHER MATTERS | |
APPENDIX A - FORM OF AMENDMENT TO THE COMPANY CHARTER | |
OBLONG, INC.
| | |
| 25587 CONIFER ROAD, SUITE 105-231, |
| CONIFER, COLORADO 80433 |
PROXY STATEMENT
FOR THE 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
This Proxy Statement (this “Proxy Statement”“Proxy Statement”), along with the accompanying Notice of the 2022 AnnualSpecial Meeting of Stockholders (the “Notice”“Notice”), contains information about the 2022 AnnualSpecial Meeting of Stockholders (the “Annual Meeting”“Special Meeting”) of Oblong, Inc., including any adjournments or postponements of the AnnualSpecial Meeting. We are holding the AnnualSpecial Meeting at 9:0011:30 AM MSTMT on December 30, 2022,May 18, 2023, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202. Directions to the AnnualSpecial Meeting can be obtained by telephoning us at 303-640-3838. In this Proxy Statement, we refer to Oblong, Inc. as “we,“we,” “our,“our,” “us,“us,” “Oblong”“Oblong” or “the Company.“the Company.”
This Proxy Statement relates to the solicitation of proxies by our Board of Directors (the “Board“Board of Directors”Directors” or the “Board”“Board”) for use at the AnnualSpecial Meeting.
On or about November 25, 2022,May , 2023, we will send this Proxy Statement, the attached Notice and the enclosed proxy card to all stockholders entitled to vote at the AnnualSpecial Meeting. Although not part of the Proxy Statement, we will also send along with this Proxy Statement our 2021 Annual Report on Form 10-K which includes our financial statements for the fiscal year ended December 31, 2021.
Important Notice Regarding the Availability of Proxy Materials for Our AnnualSpecial Meeting to Be Held on December 30, 2022:
May 18, 2023:
This Proxy Statement, Notice of Special Meeting of Stockholders and our 2021 Annual Report on Form 10-Kform of proxy card are available for viewing, printing and downloading at www.proxyvote.com. We are providing a copy of our Annual Report on Form 10-K for the year ended December 31, 2021 with the accompanying proxy materials. Additionally, you can find a copy of our Annual Report on Form 10-K which includes our financial statements for the fiscal year ended December 31, 2021, on the website of the Securities and Exchange Commission (the “SEC”) at http://www.sec.gov orthis Proxy Statement on our website at www.oblong.com/company/investor-relations.
Record Date and Voting Securities
Only holders of record of our common stock (“Common Stock (“Common Stock””) as of the close of business on November 17, 2022April 24, 2023 (the “Record Date”“Record Date”) are entitled to vote at the AnnualSpecial Meeting. As of the Record Date, 30,816,048filing of this Preliminary Proxy Statement, 2,063,308 shares of Common Stock were issued and outstanding. Each holder of Common Stock is entitled to cast one vote per share of Common Stock held by such holder on each matter to be presented at the AnnualSpecial Meeting.
Quorum
A quorum is present at the AnnualSpecial Meeting if a majority of the shares of our capital stock issued and outstanding and entitled to vote on the Record Date are represented in person or by proxy. If a quorum is not present, the AnnualSpecial Meeting may be adjourned from time to time until a quorum is obtained.
For purposes of determining the presence of a quorum, abstentions and with respect to the election of directors, “withhold” votes, will be treated as shares that are present and entitled to vote, while broker “non-votes” will be treated only as shares that are present. An abstention is the voluntary act of not voting by a stockholder who is present in person or by proxy at the AnnualSpecial Meeting and entitled to vote. A broker “non-vote” occurs when a broker nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary power for that particular item and has not received instructions from the beneficial owner.
Voting Procedures
Stockholders have the option to vote by telephone, internet or mail by following the instructions on the attached proxy card. WE ENCOURAGE YOU TO RECORD YOUR VOTE BY TELEPHONE OR INTERNET. These voting methods are convenient and save significant postage and processing costs. In addition, when you vote by telephone or internet prior to the meeting date, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted.
Internet. Vote over the internet at www.proxyvote.com, the website for internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
May 17, 2023.
Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been properly recorded. Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
May 17, 2023.
Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors. If mailed, your completed and signed proxy card must be received by December 29, 2022.
May 17, 2023.
Meeting. Please see “Questions and Answers about the Oblong AnnualSpecial Meeting - How can I vote my shares in person at the AnnualSpecial Meeting?” for more information regarding voting at the AnnualSpecial Meeting.
Shares Held in “Street Name”
If your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the AnnualSpecial Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the AnnualSpecial Meeting in order to vote.
If you are the beneficial owner of shares held in the name of a broker, bank or other nominee and do not provide that broker, bank or other nominee with voting instructions in the proxy card, your broker may vote your shares only with respect to certain matters considered routine. For any matters that are not routine for which you do not provide voting instructions in the proxy card, your shares will constitute “broker non-votes” and are not considered entitled to vote on that proposal. With respect to the matters being voted on at the AnnualSpecial Meeting, your broker has discretionary authority to vote your shares in the absence of instructions from you only on the ratification of the selection of the Company’s independent registered public accounting firm. As a result, broker non-votes should not exist with respect to this proposal. Your broker does not have discretionary authority to vote your shares on any of the proposals in the electionabsence of directors, the amendment to the Company's charter to effect a reverse split, or the advisory approval of executive compensation if you do not furnish instructions on such matter. Thus, assuming that a quorum is obtained, any broker non-votes will not affect the outcome of these proposals.from you.
Voting Requirements for Approval
Item One—Election of Directors: One - Issuance ProposalPursuant to our Amended & Restated Bylaws (the “bylaws”), a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the highest number of “FOR” votes at the Annual Meeting will be elected. Broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.
Item Two—Ratification of Appointment of Independent Registered Public Accounting Firm: : To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN.” To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked "ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal and establishing a quorum.vote. Accordingly, an abstention will have the effect of a vote against thethis proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. AsBroker non-votes will have the effect of a result, broker non-votes should not exist with respectvote against this proposal because they "will be counted as present and entitled to this proposal.vote” at the special meeting.
Item Three—Amendment to Company Charter to Effect a Reverse Stock Split: Two - Adjournment Proposal: To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN.” To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked "ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal.vote. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on the proposal because they are not "entitled to vote" on the matter.
Item Four—Advisory Approval of Executive Compensation: Pursuant to our by-laws, the vote of the holders of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class, is required for the approval, on an advisory and non-binding basis, of the executive compensation as described in this Proxy Statement. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this Proposal. To be approved, the shares voted
“FOR” the proposal must exceed the number voted “AGAINST” the Proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the Proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. Broker non-votes will have no effect on the outcome of this proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have nothe effect on theof a vote against this proposal because they are not "entitled"will be counted as present and entitled to vote" onvote” at the matter.Special Meeting.
Solicitation and Revocation
After you have submitted a proxy, you may change your vote at any time before the proxy is exercised by submitting a notice of revocation or a proxy bearing a later date. Regardless of whether you voted using a traditional proxy card or by telephone or internet, you may use any of these methods to change your vote. You may change your vote either by submitting a proxy card prior to the date of the AnnualSpecial Meeting or by voting again prior to the time at which the telephone and internet voting facilities close by following the procedures applicable to those methods of voting. In each event, the later submitted vote will be recorded and the earlier vote revoked. You may also revoke a proxy by voting in person at the AnnualSpecial Meeting. Your attendance at the AnnualSpecial Meeting will not by itself constitute revocation of a proxy.
Oblong will bear the cost of the solicitation of proxies from its stockholders, including the cost of preparing, assembling and mailing the proxy solicitation materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person, but no such person will be specifically compensated for such services. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so. We have engaged Broadridge Financial Solutions to aid in the distribution of the proxy materials and will reimburse their related reasonable out-of-pocket expenses.
QUESTIONS AND ANSWERS ABOUT THE OBLONG ANNUALSPECIAL MEETING
Q. Who is entitled to vote at the AnnualSpecial Meeting?
A. Holders of record of our Common Stock atas of the close of business on November 17, 2022, which we referApril 24, 2023 (the “Record Date”) are entitled to asvote at the “Record Date,” areSpecial Meeting. As of the filing date of this Preliminary Proxy Statement, 2,063,308 shares of Common Stock were issued and outstanding. Each holder of Common Stock is entitled to cast one vote per share of Common Stock held by such holder on each matter to be presented at the AnnualSpecial Meeting. As of the Record Date, 30,816,048 shares of Common Stock were issued and outstanding.
Q. What is the purpose of the AnnualSpecial Meeting?
A. At the AnnualSpecial Meeting, stockholders will consider and vote upon the following matters:
(1) To approve the issuance of shares of our common stock underlying shares of convertible preferred stock and warrants issued pursuant to that certain Securities Purchase Agreement, dated as of March 30, 2023, by and among Oblong, Inc. and the investors named therein, in an amount equal to 20% or more of our common stock outstanding before the issuance of such convertible preferred stock and warrants (including upon the operation of anti-dilution provisions contained in such convertible preferred stock and warrants), as required by and in accordance with Nasdaq Listing Rule 5635(d) (the “to elect five members of the Company’s Board of Directors to serve until the Company’s next annual meeting of stockholders, or until their respective successors are duly elected and qualified;Issuance Proposal
”);
(2)To adjourn the Special Meeting to ratifya later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the appointmenttabulated vote at the time of EisnerAmper LLP as the Company’s independent registered public accounting firm forSpecial Meeting, there are insufficient shares of our capital stock represented, either in person or by proxy, to constitute a quorum necessary to conduct business at the fiscal year ending December 31, 2022;
(3)Special Meeting or at the time of the Special Meeting, to approve an amendment to Article FOURTH of the Company's Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company's issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15;
(4)Issuance Proposal (the “to approve, on an advisory and non-binding basis, executive compensation as described in this proxy statement;Adjournment Proposal”); and
(5)to(4) To transact other business as may properly come before the AnnualSpecial Meeting.
Q. How can I access the proxy materials over the internet?
A. Your proxy card will contain instructions on how to view our proxy materials on the internet. Our proxy materials are also available on our website at: www.Oblong.com.
Q. How can I vote my shares?
A. You may vote by any of the following four methods:
(1) Internet. Vote over the internet at www.proxyvote.com, the website for internet voting. Simply follow the instructions on your proxy card, and you can confirm that your vote has been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
May 17, 2023.
(2) Telephone. Vote by telephone by following the instructions on your proxy card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your vote has been
properly recorded. Telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (Eastern Time) on December 29, 2022.
May 17, 2023.
(3) Mail. If you received a proxy card by mail, vote by mail by completing, signing, dating and returning your proxy card in the pre-addressed, postage-paid envelope provided. If you vote by mail and
your proxy card is returned unsigned, then your vote cannot be counted. If you vote by mail and the returned proxy card is signed without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors. If mailed, your completed and signed proxy card must be received by December 29, 2022.
May 17, 2023.
(4) Meeting. If you are a stockholder of record of Common Stock as of November 17, 2022,April 24, 2023, you may attend and vote at the AnnualSpecial Meeting on December 30, 2022.
May 18, 2023.
If you hold your Company shares in a brokerage account, your ability to vote over the internet or by telephone depends on your broker’s voting process. Please follow the directions on your proxy card or the voting instruction card from your broker carefully.
The Board of Directors recommends that you vote using one of the first three methods discussed above, as it is not practical for most stockholders to attend and vote at the AnnualSpecial Meeting. Using one of the first three methods discussed above to vote will not limit your right to vote at the AnnualSpecial Meeting if you later decide to attend in person.
Q. How can I vote my shares in person at the AnnualSpecial Meeting?
A. Stockholders of Record. If your shares are registered directly in your name with the American Stock Transfer & Trust Company, LLC (“AST”AST”), our “transfer agent,” you are considered the stockholder of record with respect to those shares, and the proxy materials are being mailed to you. As the stockholder of record, you have the right to vote in person at the AnnualSpecial Meeting. If you choose to do so, you can bring the proxy card or vote using the ballot provided at the AnnualSpecial Meeting. Even if you plan to attend the AnnualSpecial Meeting, we recommend that you vote your shares in advance as described above so that your vote will be counted if you decide later not to attend the AnnualSpecial Meeting.
B. Beneficial Owners. Most of our stockholders hold their shares in street name through a broker, bank or other nominee rather than directly in their own name. In that case, you are considered the beneficial owner of shares held in street name, and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the AnnualSpecial Meeting. Because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the AnnualSpecial Meeting unless you obtain a “legal proxy” from the broker, bank or nominee that holds your shares, giving you the right to vote the shares at the AnnualSpecial Meeting. You will need to contact your broker, bank or nominee to obtain a legal proxy, and you will need to bring it to the AnnualSpecial Meeting in order to vote in person.
In light of the COVID-19 pandemic, it could become necessary to change the date, time, location, and/or means of holding the Annual Meeting (including by means of remote communication). If such a change is made, we will announce the change in advance, and details on how to participate will be issued by press release, posted on our website, and filed as additional proxy materials.
Q. How does the Board of Directors recommend that I vote?
A. Our Board of Directors recommends that you vote:
(1)“FOR” the election of five membersapproval of the Company’s Board of Directors to serve until the Company’s next annual meeting of stockholders, or until their respective successors are duly electedIssuance Proposal; and qualified; and
(2)“FOR” the ratificationapproval of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.
(3)“FOR” the approval of an amendment to Article FOURTH of the Company’s Amended & Restated Certificate of Incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15.
(4)“FOR” the approval of, on an advisory and non-binding basis, executive compensation as described in this proxy statement.
Adjournment Proposal.
Q. What is the voting requirement to approve each of the items?
A. Item One—Election of Directors : Pursuant to our bylaws, a plurality of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote on this Proposal. The persons receiving the highest number of “FOR” votes at the Annual Meeting will be elected. Broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.
Item Two—Ratification of Appointment of Independent Registered Public Accounting Firm:One - Issuance Proposal: To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN.” To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked "ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled
to vote for purposes of the proposal.vote. Accordingly, an abstention will have the effect of a vote against thethis proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. AsBroker non-votes will have the effect of a result, broker non-votes should not exist with respectvote against this proposal because they "will be counted as present and entitled to this proposal.
vote” at the Special Meeting.
Item Three—Amendment to Company Charter to Effect a Reverse Stock Split:Two - Adjournment Proposal: To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN." To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked "ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal.vote. Accordingly, an abstention will have the effect of a vote against thethis proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have nothe effect on the outcome of a vote against this proposal because they are not "entitled to vote" on the matter.
Item Four—Advisory Approval of Executive Compensation: Pursuant to our by-laws, the vote of the holders of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class, is required for the approval, on
an advisory and non-binding basis, of the executive compensation as described in this Proxy Statement. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this Proposal. To be approved, the shares voted “FOR” the proposal must exceed the number voted “AGAINST” the Proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will"will be counted as present and entitled to vote for purposes ofvote” at the Proposal. Accordingly, an abstention will have the effect of a vote against the Proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on the outcome of this proposal because they are not "entitled to vote" on the matter.Special Meeting.
Q. What happens if additional matters are presented at the AnnualSpecial Meeting?
A. Other than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the AnnualSpecial Meeting. If you grant a proxy, the persons named as proxies will have the discretion to vote your shares on any additional matters properly presented for a vote at the AnnualSpecial Meeting.
Q. What happens if I do not give specific voting instructions?
A. If you are a stockholder of record, and vote without giving specific voting instructions, the proxyholders will vote your shares in the manner recommended by our Board of Directors on all matters presented in this Proxy Statement, and, with respect to any other matters that may properly come before the AnnualSpecial Meeting, as the proxyholders may determine in their discretion.
If you are the beneficial owner of shares held in the name of a broker, bank or other nominee and do not provide that broker, bank or other nominee with voting instructions in the proxy card, your broker may vote your shares only with respect to certain matters considered routine. For any matters that are not routine for which you do not provide voting instructions in the proxy card, your shares will constitute “broker non-votes” and are not considered entitled to vote on that proposal. With respect to the matters being voted on at the AnnualSpecial Meeting, your broker has discretionary authority to vote your shares in the absence of instructions from you only on the ratification of the selection of the Company’s independent registered public accounting firm. As a result, broker non-votes should not exist with respect to this proposal. Your broker does not have discretionary authority to vote your shares on any of the proposals in the electionabsence of directors, the amendment to the Company’s charter to effect a reverse stock split, or the advisory approval of executive compensation if you do not furnish instructions on such matter. Thus, assuming that a quorum is obtained, any broker non-votes will not affect the outcomes of these proposals.
from you.
Q. What is the quorum requirement for the AnnualSpecial Meeting?
A. A quorum is present at the AnnualSpecial Meeting if a majority of the shares of our capital stock issued and outstanding and entitled to vote on the Record Date are represented in person or by proxy. Your shares will be counted for purposes of determining if there is a quorum, whether representing votes for, against, withheld or abstained, if you:
•are present and vote at the AnnualSpecial Meeting; or
•properly submit a proxy card or vote over the internet or by telephone.
For purposes of determining the presence of a quorum, abstentions and with respect to the election of directors, “withhold” votes,broker “non-votes” will be treated as shares that are present and entitled to vote, while broker
“non-votes” will be treated only as shares that are present. If a quorum is not present, the AnnualSpecial Meeting may be adjourned from time to time until a quorum is obtained.
Q. How can I change my vote after I return my proxy card?
A. If you are a stockholder of record, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy card.
•First, you may send a timely written notice to Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433, stating that you would like to revoke your proxy.
•Second, you may complete and submit another valid proxy by mail, telephone or over the internet that is later dated and if mailed, is properly signed, or if submitted by telephone or over the internet is received by 11:59 p.m. (Eastern Time) on December 29, 2022.May 17, 2023. Any earlier proxies will be revoked automatically.
•Third, you may attend the AnnualSpecial Meeting and vote in person. Any earlier proxy will be revoked. However, attending the AnnualSpecial Meeting without voting in person will not revoke your proxy.
If you hold your shares through a broker, bank or other nominee and you have instructed the broker, bank or other nominee to vote your shares, you must follow directions from your broker, bank or other nominee to change your vote.
Q. Who will tabulate the votes?
A. David Clark, our Chief Financial Officer, Treasurer and Corporate Secretary, will certify the tabulated vote and act as the inspector of elections for the AnnualSpecial Meeting. Mr. Clark will be responsible for (i) determining the presence of a quorum at the AnnualSpecial Meeting, (ii) receiving all votes and ballots, whether by proxy or in person, with regard to all matters voted upon at the AnnualSpecial Meeting, (iii) counting and tabulating all such votes and ballots and (iv) determining and reporting the results with regard to all such matters voted upon at the AnnualSpecial Meeting.
Q. Where can I find the voting results of the AnnualSpecial Meeting?
A. We intend to announce preliminary voting results at the AnnualSpecial Meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the AnnualSpecial Meeting.
Q. Who pays for the cost of this proxy solicitation?
A. Oblong will bear the cost of the solicitation of proxies from its stockholders, including the cost of preparing, assembling and mailing the proxy solicitation materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person, but no such person will be specifically compensated for such services. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so. We have engaged Broadridge
Financial Solutions to aid in the distribution of the proxy materials and will reimburse their related reasonable out-of-pocket expenses.
Q. Is there a list of stockholders entitled to vote at the AnnualSpecial Meeting?
A. The names of stockholders of record entitled to vote at the AnnualSpecial Meeting will be available at the AnnualSpecial Meeting and for 10 days prior to the AnnualSpecial Meeting at our principal executive offices
between the hours of 9:00 a.m. and 5:00 p.m. Mountain Time for any purpose relevant to the AnnualSpecial Meeting. To arrange to view this list during the times specified above, please contact the Corporate Secretary of the Company at Oblong, Inc., c/o Corporate Secretary, 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433 or call 303-640-3838.
THIS QUESTION AND ANSWER SECTION IS ONLY MEANT TO GIVE AN OVERVIEW OF THE PROXY STATEMENT. FOR MORE INFORMATION, PLEASE REFER TO THE MATERIAL CONTAINED IN THE SUBSEQUENT PAGES.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS– THE ISSUANCE PROPOSAL
DirectorsOverview
On March 30, 2023, Oblong entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”) as part of a private placement (the “Offering”). Pursuant to the Purchase Agreement, Oblong agreed to sell to the Investors (i) 6,550 shares of Oblong’s preferred stock to be electeddesignated as the “Series F convertible preferred stock”, with a stated value of $1,000 per share (the “ Initial Preferred Shares”), initially convertible at the Conversion Price into 3,830,409 shares of Common Stock, (ii) warrants (the “Preferred Warrants”) to initially acquire an aggregate of 32,750 shares of the Series F preferred stock (the “Warrant Preferred Shares” and together with the Initial Preferred Shares, the “Preferred Shares”) and (iii) warrants (the “Common Warrants” and together with the Preferred Warrants, the “Warrants”) to initially acquire an aggregate of 3,830,413 shares of the Company’s Common Stock (the “Warrant Common Shares”). The Company received $6.4 million upon the issuance of the Initial Preferred Shares and Warrants and will receive up to $31.9 million if the Preferred Warrants are exercised in full. Pursuant to serve untilan Escrow Agreement dated as of March 31, 2023 (the "Escrow Agreement"), the next annual meetingCompany agreed to place a portion of the purchase price equal to $4 million in escrow pending receipt of the Stockholder Approval (as defined herein).
On March 31, 2023, in connection with the Offering, the Board designated 42,000 shares of our authorized and unissued preferred stock as Series F Preferred Shares by filing a Certificate of Designations of Series F Convertible Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Delaware.
The Preferred Shares are convertible into fully paid and non-assessable shares of Common Stock (the "Conversion Shares") at an initial conversion price of $1.71 (the "Conversion Price"). The holders of the Preferred Shares may also elect to convert their Preferred Shares at the Alternate Conversion Price (as defined below). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). As part of the transaction, the Company also entered into a Registration Rights Agreement dated as of March 30, 2023 under which the Company agreed to register for resale the Preferred Shares, the Conversion Shares and the Warrant Common Shares (the “Registration Rights Agreement”).
Pursuant to the Purchase Agreement, we agreed to use reasonable best efforts to solicit the approval of our stockholders or until their respective successors are duly elected(the “Stockholder Approval”), as required under the Nasdaq Listing Rule 5635(d), to permit issuances of the shares of our Common Stock upon conversion of the Preferred Shares and qualified.the exercise of the Common Warrants.
We have provided below a summary of the material terms of the Purchase Agreement, Certificate of Designations and form of Warrants (together with the Registration Rights Agreement, collectively, the “Transaction Documents”). The numberdescription provided does not purport to be a complete description of directors is determinedall of the terms of such agreements. You can find the Transaction Documents and further information about the Offering in the Current Report on Form 8-K that we filed with the SEC on April 3, 2023.
Reasons for the Financing
We believe that the Offering was necessary in light of the Company’s cash and funding requirements at the time. The proceeds that we received from time to time,the Offering and may be increased or decreased, byreceive in connection
with the exercise of the Warrants will improve our capital position and provide financing for future growth and are necessary to fund our operations. We also believe that the anti-dilution protections contained in the Certificate of Designations and Warrants were reasonable in light of market conditions and the size and type of the Offering, and that we would not have been able to complete the sale of the Initial Preferred Shares and Warrants unless such anti-dilution provisions were offered. At the time of the Offering, our Board considered numerous other alternatives to the transaction, none of Directors, and is currently five members. The nominees who will stand for election are Jason Adelman, Matthew Blumberg, Peter Holst, James Lusk, and Deborah Meredith, all of whom are currently memberswhich proved to be feasible or, in the opinion of our Board, would have resulted in aggregate terms equivalent to, or more favorable than, the terms obtained in the Offering.
We anticipate that the Company will use the proceeds from the Offering and any future exercise of Directors. the Warrants for general corporate purposes and potential strategic alternatives. We have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any strategic alternatives partner.
Securities Purchase Agreement
The Purchase Agreement was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 3, 2023, and is incorporated herein by reference.
The Initial Preferred Shares and Warrants were issued on March 31, 2023 (the “Closing”) pursuant to the terms of the Purchase Agreement. The Purchase Agreement contains representations and warranties of us and the Investors, which are typical for transactions of this type. In addition, the Purchase Agreement contains customary covenants on our part that are typical for transactions of this type, as well as the following additional covenants: (i) we agreed to reimburse the lead Investor for all costs and expenses incurred in connection with the Offering up to $75,000; (ii) we agreed to replace two of our existing independent Board members with two independent Board members recommended by the lead Investor and approved by the nominating committee of the Board, following receipt of the Stockholder Approval; (iii) until all the Preferred Shares are converted and all Warrants are exercised, we agreed not to enter into any variable rate transactions; (iv) we agreed to offer to the Investors, until the second anniversary of the date of Closing, the opportunity to participate in any subsequent securities offerings by us; and (v) we agreed to use our reasonable best efforts to solicit the Stockholder Approval in compliance with the rules and regulations of Nasdaq. This proposal is intended to fulfill this final covenant.
The Purchase Agreement obligates us to indemnify the Investors and various related parties for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by us, and (ii) any breach of any obligation of ours.
Preferred Shares
The terms of the Preferred Shares are as set forth in the Certificate of Designations which was filed with and became effective with the Secretary of State for the State of Delaware on March 31, 2023. The Certificate of Designations was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 3, 2023, and is incorporated herein by reference.
The Preferred Shares are convertible into fully paid and non-assessable shares of the Company’s Common Stock at the election of the holder at any time at the then applicable Conversion Price. The holders of the Preferred Shares may also elect to convert their Preferred Shares at a price (the “Alternate Conversion Price”) equal to the lower of (i) 80% of the applicable Conversion Price as in effect on the date of the conversion, (ii) 80% of the closing price on the trading day immediately preceding the delivery of the conversion notice, and (iii) the greater of (a) the Floor Price (as defined in the Certificate of Designations) and (b) the quotient of (x) the sum of the five nominees receivinglowest Closing Bid Prices (as defined in the highest number
Certificate of affirmative votes will be elected as directors. InDesignations) for trading days in the 30 consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable Conversion Notice, divided by (y) five. The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a full ratchet basis, in the event of any nominee is unableissuances of our common stock, or unwillingsecurities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to serve as a nominee,certain exceptions). Until the Board of Directors may select a substitute nominee. If a substitute nominee is selected, proxies will be voted in favor of such nominee. Our Board of Directors has no reason to believe that anyreceipt of the named nomineesStockholder Approval, the Alternate Conversion Price shall not be less than the “Minimum Price” (as defined in Nasdaq Listing Rule 5635(d)) (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).
The holders of the Preferred Shares are entitled to dividends of 9% per annum, which is payable quarterly. Accrued dividends may be paid, at our option, in cash and if not paid, shall increase the stated value of the Preferred Shares. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Preferred Shares will accrue dividends at a rate (the “Default Rate”) equal to the lesser of (i) 20% per annum or (ii) the maximum permitted by applicable law. The Default Rate is also triggered in the event we are unable, from the failure to obtain the Stockholder Approval prior to May 31, 2023, to issue shares of Common Stock in connection with a conversion of the Preferred Shares after such date, subject to compliance with Nasdaq Capital Market rules. The Preferred Shares have no voting rights, other than with respect to certain matters affecting the rights of the Preferred Shares. On matters with respect to which the holders of the Preferred Shares have a right to vote together with the holders of the Common Stock, holders of the Preferred Shares will have voting rights on an as-converted basis to Common Stock, provided that until receipt of the Stockholder Approval, any adjustment to the Conversion Price shall not cause the Conversion Price for voting purposes to be unable or unwillingless than the Minimum Price.
Our ability to serve assettle conversions is subject to certain limitations set forth in the Certificate of Designations, including a nominee or as a director if elected. Proxies cannot be voted for a greater number of persons thanlimit on the number of nominees named.shares of Common Stock that may be issued until the time that the Stockholder Approval is obtained permitting the issuance of more than 19.99% of our outstanding shares of Common Stock in accordance with Nasdaq listing standards. We agreed to seek stockholder approval of these matters at a meeting to be held no later than May 31, 2023. The special meeting is being held and this Issuance Proposal is being submitted to our stockholders in order to achieve such stockholder approval. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Preferred Shares.
Director Nominees
The following table sets forth information with respectCertificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, (i) the failure to our director nominees.
| | | | | | | | | | | | | | |
Name | | Age | | Position with Company |
Jason Adelman (1)(2)(3) | | 53 | | Director, Chairman of the Compensation Committee, Chairman of the Nominating Committee |
Matthew Blumberg (1)(3) | | 52 | | Chairman of the Board |
Peter Holst | | 53 | | Director, President and Chief Executive Officer |
James Lusk (1)(2)(3) | | 66 | | Director, Chairman of the Audit Committee |
Deborah Meredith (2)(3) | | 63 | | Director |
___________________
(1) Memberfile and maintain an effective registration statement covering the sale of the Audit Committee.
(2) Membersecurities registrable pursuant to the Registration Rights Agreement, (ii) the failure to pay any amounts due to the holders of the Compensation Committee.
(3) MemberPreferred Shares when due, and (iii) if Peter Holst ceases to be the chief executive officer of the Nominating Committee.Company other than because of his death and a qualified replacement, reasonably acceptable to a majority of the holders of the Preferred Shares, is not appointed within thirty (30) business days. In connection with a Triggering Event, the Default Rate is triggered.
Board Diversity MatrixWe are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), maintenance of properties and restriction on the transfer of assets, among other matters.
| | | | | | | | | | | | | | |
| Board Diversity Matrix (as of November 25, 2022) |
| Total Number of Directors | 5 |
| Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender |
| Directors | 1 | 4 | – | – |
| Part II: Demographic Background |
| African American or Black | – | – | – | – |
| Alaskan Native or American Indian | – | – | – | – |
| | | | | | | | | | | | | | |
| Asian | – | – | – | – |
| Hispanic or Latinx | – | – | – | – |
| Native Hawaiian or Pacific Islander | – | – | – | – |
| White | 1 | 4 | – | – |
| Two or More Races or Ethnicities | – | – | – | – |
| LGBTQ+ | – |
| Did Not Disclose Demographic Background | – |
Nominee BiographiesThe Preferred Warrants are exercisable for shares of our Series F preferred stock at an exercise price of $975.00. The exercise price is subject to customary adjustments for stock dividends, stock splits, recapitalizations and the like, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price (subject to certain exceptions). The Preferred Warrants expire three years from the date of issuance and are exercisable for cash. For each Preferred Warrant exercised, the holder shall receive Common Warrants to purchase a number of shares of Common Stock equal to 100% of the number of shares of Common Stock the holder would receive if the Preferred Shares issuable upon exercise of such Preferred Warrant were converted at the applicable Conversion Price.
Jason Adelman, Director. Mr. Adelman joined our Board of Directors in July 2019. Mr. Adelman isUnder the Founder and Managing Member of Burnham Hill Capital Group, LLC, a privately held financial advisory firm, and serves as Managing Member of Cipher Capital Partners LLC, a private investment fund. Mr. Adelman also serves as a memberterms of the boardPreferred Warrant, the Company is restricted from entering into a merger, business combination, sale of directorsall or substantially all of Trio-Tech International (Nasdaq Capital Market: TRT). Priorits assets or similar transaction (“Fundamental Transaction”) unless the successor entity is a publicly traded company and assumes all of the Company’s obligations under the Transaction Documents. In the event of a Fundamental Transaction, the Company or its successor entity, at their sole option, may purchase the Preferred Warrants by paying to founding Burnham Hill Capital Group, LLCthe warrantholders an amount of cash (subject to certain exceptions) equal to the Black Scholes Value (as defined in 2003, Mr. Adelman served as Managing Directorthe Preferred Warrant) of Investment Banking at H.C. Wainwright and Co., Inc. Mr. Adelman graduatedthe remaining unexercised portion of the Warrants on the date of consummation of the Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company's control, the holder shall only be entitled to receive from the UniversityCompany or any successor entity the same type of Pennsylvaniaconsideration which the holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Preferred Warrant been completely exercised (and the underlying Warrant Preferred Shares completely converted) immediately prior to the applicable Fundamental Transaction, at the Black Scholes Value of the unexercised portion of the Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction. Notwithstanding the foregoing, any payment of cash in accordance with the foregoing shall not be permitted to be made from the Company’s cash balance upon the date of the consummation of the Fundamental Transaction and may only be paid by the successor entity or from the proceeds of a B.A. in Economics, cum laude, and from Cornell Law School with a J.D.capital raise that would be accounted for as permanent equity on either the Company’s or successor entity’s balance sheet.
In considering Mr. Adelman as a director of the Company, the Board reviewed, among other qualifications, his experience and expertise in finance, accounting, banking and management. Based on his experience with Burnham Hill Capital Group LLC, Cipher Capital Partners LLC, and H. C. Wainwright & Co. Mr. Adelman qualifies as an "audit committee financial expert" under the applicable SEC rules and accordingly contributes to the Board of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.Common Warrants
Matthew Blumberg, ChairmanThe Common Warrants are exercisable for shares of common stock at an exercise price of $1.71, beginning on or after the sixth month and one day anniversary after the issuance date and expiring five and a half years after the date of issuance. The exercise price is subject to customary adjustments for stock dividends, stock splits, recapitalizations and the like, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price (subject to certain exceptions). The Common Warrants are exercisable for cash, provided that if there is no effective registration statement available permitting the resale of the Board. Mr. Blumberg joined our Board of Directors in August 2021 and has served asWarrant Common Shares, the ChairmanCommon Warrants may be exercised on a cashless basis.
Under the terms of the Board since December 16, 2021. Mr. BlumbergCommon Warrant, the Company is restricted from entering into a Fundamental Transaction unless the Co-Foundersuccessor entity is a publicly traded company and Chief Executive Officer of Bolster, an on-demand executive talent marketplace that helps accelerate companies’ growth by connecting them with experienced, highly vetted executives for interim, fractional, advisory, project-based or board roles. He also co-founder and currently serves as Chairman of Path Forward.ORG, a nonprofit organization on a mission to empower people to restart their careers after time spent focused on caregiving, working with more than 60 companies including Apple, Amazon, Wal-Mart, Intuit, Campbell’s Soup, PayPal, Verizon and Oracle. Mr. Blumberg is also an author and frequent public speaker. He was recognized as one of New York’s 100 most influential technology leaders by the Silicon Alley Insider in 2008, was one of Crain’s New York Top Entrepreneurs in 2012 and an Ernst & Young Entrepreneurassumes all of the Year finalistCompany’s obligations under the Transaction Documents. In the event of a Fundamental Transaction, the Company or its successor entity, at their sole option, may purchase the Common Warrants by paying to the warrantholders an amount of cash (subject to certain exceptions) equal to the Black Scholes Value (as defined in 2012. He has served as a board memberthe Common Warrant) of the remaining unexercised portion of the Warrants on the date of
numerous corporate, nonprofitconsummation of the Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company's control, the holder shall only be entitled to receive from the Company or any successor entity the same type of consideration which the holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Common Warrant been completely exercised immediately prior to the applicable Fundamental Transaction, at the Black Scholes Value of the unexercised portion of the Warrant, that is being offered and community organizations. Mr. Blumberg attended Princeton University where he graduated Summa Cum Laudepaid to the holders of Common Stock of the Company in connection with an A.B.the Fundamental Transaction. Notwithstanding the foregoing, any payment of cash in Urban Planning in 1992.accordance with the foregoing shall not be permitted to be made from the Company’s cash balance upon the date of the consummation of the Fundamental Transaction and may only be paid by the successor entity or from the proceeds of a capital raise that would be accounted for as permanent equity on either the Company’s or successor entity’s balance sheet.
In considering Mr. Blumberg as a director ofReasons for the Company, the Board reviewed his experience and expertise in work force matters and the leadership he has shown in his positions with current and prior companies. Mr. Blumberg qualifies as an "audit committee financial expert" under the applicable SEC rules and accordingly contributes to the Board of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.Stockholder Approval
Peter Holst, Director, President and Chief Executive Officer. Prior to being named President and CEO in January 2013, Mr. Holst served asOur Common Stock is listed on the Company’s Senior Vice President for Business Development since October 1, 2012. Mr. Holst has served as a director of the Company since January 2013 and served as Chairman of the Board from July 2019 to December 15, 2021. Mr. Holst has more than 28 years of experience in the collaboration industry. Prior to joining the Company, Mr. Holst served as the Chief Executive Officer of Affinity VideoNet, Inc.,Nasdaq Capital Market, and as such, we are subject to the PresidentNASDAQ Listing Rules. In order to comply with the NASDAQ Listing Rules and Chief Operating Officerto satisfy conditions under the Purchase Agreement, we are seeking stockholder approval of Raindance Communications. Mr. Holst holds a degree in Business Administration from the University of Ottawa.this proposal.
In considering Mr. Holst asNasdaq Listing Rule 5635(d) requires stockholder approval prior to the issuance of securities in connection with a directortransaction other than a public offering involving the sale, issuance or potential issuance of common stock (or securities convertible into or exercisable for common stock) in an amount equal to 20% or more of the Company,common stock or 20% or more of the Board reviewed his extensive knowledge and expertise invoting power outstanding before the communication services industry, andissuance at a price less than the leadership he has shown in his positions with prior companies.“Minimum Price”. The Minimum Price is defined as the lower of (i) the closing price of the common stock immediately preceding the signing of the sale agreement or (ii) the average closing price of the common stock for the five trading days immediately preceding the signing of the sale agreement.
James S. Lusk, Director. Mr. Lusk joinedThe Offering did not constitute a public offering under the Nasdaq Listing Rules. Prior to closing the Offering, we had 2,063,308 shares of Common Stock outstanding. Therefore, the potential issuance of 3,830,409 shares of our Boardcommon stock contemplated under the Purchase Agreement in the event the Initial Preferred Shares were converted to common stock at the Conversion Price (without giving effect to the 19.99% share cap applicable to the Preferred Shares and Warrants until Stockholder Approval is obtained and without giving effect to conversion of Directorsthe Preferred Shares at the Alternate Conversion Price and other anti-dilution issuances) would constitute approximately 186% of the shares of our Common Stock outstanding prior to giving effect to the financing. Accordingly, we are seeking stockholder approval under Nasdaq Listing Rule 5635(d) for the sale, issuance or potential issuance by us of Common Stock (or securities convertible into or exercisable for our Common Stock) in February 2007excess of 20% of the shares of our Common Stock outstanding on the original date of entry into the Purchase Agreement, including without limitation, as a result of the anti-dilution features of the Preferred Shares and servedWarrants, since such provisions may reduce the per share conversion price or exercise price, as the Lead Independent Directorcase may be, and result in the issuance of shares at less than the Board from July 2019 to December 15, 2021. Mr. Lusk is currently the Chief Financial Officergreater of Sutherland Global Services, a global provider of business process transformation and technology management services. Mr. Lusk joined Sutherland in July 2015. From 2007 until July 2015, Mr. Lusk was Executive Vice President of ABM Industries Incorporated (NYSE:ABM), a leading provider of facility solutions, and served as ABM’s Chief Financial Officer from 2007 until April 2015. Prior to joining ABM, he served as Vice President, Business Services and Chief Operating Officer for the Europe, Middle East and Africa region for Avaya from 2005 to 2007. Mr. Lusk has also served as Chief Financial Officer and Treasurer of BioScrip/MIM, President of Lucent Technologies’ Business Services division, and interim Chief Financial Officer and Corporate Controller of Lucent Technologies. Mr. Lusk earned his B.S. (Economics), cum laude, from the Wharton School, University of Pennsylvania, and his M.B.A (Finance) from Seton Hall University. He is a certified public accountant and was inducted into the AICPA Business and Industry Leadership Hall of Fame in 1999.market price or book value per share.
In considering Mr. LuskUnder the Nasdaq Listing Rules, we are not permitted (without risk of delisting) to undertake a transaction that could result in a change in control of us without seeking and obtaining separate stockholder approval. We are not required to obtain stockholder approval for the Offering under Nasdaq Listing Rule 5635(b) because the Preferred Shares and Warrant holders have agreed that, for so long as a directorthey hold any shares of our common stock, neither they nor any of their affiliates will acquire shares of our Common Stock which will result in them and their affiliates, collectively, beneficially owning or controlling more than 4.99% (which percentage can be increased to 9.99%) of the Company, the Board reviewed his extensive expertise and knowledge regarding finance and accounting matters, as well as compensation, risk assessment and corporate governance. Mr. Lusk qualifies as an “audit committee financial expert” under the applicable SEC rules and accordingly contributes to the Boardtotal outstanding shares of Directors his understanding of generally accepted accounting principles and his skills in auditing, as well as in analyzing and evaluating financial statements.our Common Stock.
Deborah Meredith, Director. Ms. Meredith joined our Board of Directors in August 2021. Ms. Meredith currently serves as a board member, advisor and consultant to several high-tech companies with extensive experience in strategic roles with privately-held start-up companies such as Proofpoint, Aviatrix, Qventus, Alation and Kinsa Health. Ms. Meredith has more than three decades of experience
working hands-on with company founders to assemble world-class teams, architect software products and establish a roadmap for operational success. Ms. Meredith earned a master's degree in computer science from Stanford University and an undergraduate degree in both computer science and mathematics fromEffect of Issuance of Securities under the University of Michigan.Purchase Agreement
In considering Ms. MeredithThe common shares potentially issuable upon the conversion of the Preferred Shares and the exercise of the Common Warrants, plus any additional shares of our Common Stock issuable pursuant to anti-dilution provisions contained in the Certificate of Designations and Warrants, would result in an increase in the number of shares of Common Stock outstanding, and our stockholders will incur dilution of their percentage ownership to the extent that the Investors convert their Preferred Shares and/or exercise their Warrants, or additional shares of Common Stock are issued pursuant to the anti-dilution terms of the Preferred Shares or the Warrants. Because of potential adjustments to the number of shares issuable upon conversion of the Preferred Shares and the exercise of the Common Warrants issued in connection with the Offering, the exact magnitude of the dilutive effect of the Preferred Shares and the Warrants cannot be conclusively determined. However, any transaction requiring approval by our stockholders under Nasdaq Listing Rules 5635(d) would likely result in a significant increase in the number of shares of our Common Stock outstanding, and, as a directorresult, our current stockholders will own a smaller percentage of the Company, the Board reviewed her experience and expertise in the technology industry and the leadership she has shown in her positions with prior companies.our outstanding shares of Common Stock.
Vote Required For ApprovalAdditionally, future issuances of our securities in connection with the Offering may cause a significant reduction in the percentage interests of our current stockholders in the voting power, any liquidation value, our book and market value, and in any future earnings. The issuance or resale of Common Stock issued to the Investors could cause the market price of our common stock to decline. Furthermore, the increase in the number of issued shares of our Common Stock in connection with the Offering may have an incidental anti-takeover effect in that additional shares could be used to dilute the stock ownership of parties seeking to obtain control of the Company. The increased number of issued shares could discourage the possibility of, or render more difficult, certain mergers, tender offers, proxy contests or other change of control or ownership transactions.
Pursuant to our bylaws, a pluralityConsequences of the votes duly cast at the Annual Meeting is required for the election of directors. You may vote “FOR” or “WITHHOLD” authority to vote onNot Approving this Proposal. The persons receiving the highest number of “FOR” votes at the Annual Meeting will be elected. Broker non-votes and withheld votes, if any, are not counted as votes cast and will have no effect on the outcome of this election.Proposal
The Board Recommendationis not seeking the approval of our stockholders to authorize our entry into the Purchase Agreement. The Purchase Agreement has already been executed and delivered, and the Closing of the Offering has occurred. All of the Preferred Shares and Warrants were issued at the Closing, but part of the purchase price equivalent to $4 million has been placed in an escrow account with AST until the Stockholder Approval is obtained. Effectively, stockholder approval of this Issuance Proposal is one of the conditions for us to receive (i) $4 million in escrow and (ii) approximately $31.9 million upon the exercise of the Preferred Warrants, if exercised for cash. If the Stockholder Approval is not obtained, we will not be able to access such funds and our ability to execute our business plan will be jeopardized and we will be materially and adversely affected.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH NOMINEE FOR DIRECTOR TO SERVE UNTIL OUR NEXT ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL HIS/HER SUCCESSOR IS DULY ELECTED AND QUALIFIED.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
BoardThe failure of Directorsour stockholders to approve this proposal will mean that the conversion of the Preferred Shares and the exercise of the Common Warrants will be limited to the extent that such conversion or exercise, together with any other securities convertible or exchangeable for shares, would result in the issuance, in the aggregate, of no more than 19.99% of the shares of our Common Stock outstanding. As a result, we may be unable to issue sufficient shares upon conversion of the Preferred Shares or exercise of the Warrants which will, in lieu of those shares, require that we pay buy-in cash amounts to the Investors. We do not anticipate having sufficient funds to make any substantial cash payments to the holders of the Preferred Shares.
Our Board of Directors currently consists of five directors. The current Board members include four independent directors,ability to successfully implement our business plan and ultimately generate value for our chief executive officer. The core responsibility ofstockholders is dependent upon our Board of Directors isability to exercise itsraise capital and satisfy our ongoing business judgmentneeds. If we are required to actsatisfy our buy-in payment obligations under the Transaction Documents in what it reasonably believescash rather than Common Stock, we may not have the capital necessary to be in the best interests of the Company and its stockholders. Further, members of the Board fulfill their responsibilities consistent with their fiduciary duty to the stockholders, and in compliance with all applicable laws and regulations. The primary responsibilities of the Board include:
•oversight of management performance and assurance that stockholder interests are served;
•oversight of the Company’sfully satisfy our ongoing business affairs and long-term strategy; and
•monitoring adherence to the Company’s standards and policies, including, among other things, policies governing internal controls over financial reporting.
Our Board of Directors conducts its business through meetings of the Board and through activities of the standing committees, as further described below. The Board and each of the standing committees meet throughout the year and also holds special meetings and acts by written consent from time to time, as appropriate. Board agendas include regularly scheduled executive sessions of the independent directors to meet without the presence of management. The Board has delegated variousneeds,
responsibilitiesthe effect of which would adversely impact future operating results, and authorityresult in a delay in our business plans. Additionally, it may be necessary for the Company to different committees ofobtain additional financing in order to pay the Board, as described below. Members ofobligations under the Board have access to all of our members of management outside of Board meetings.Transaction Documents in cash, which may result in additional transaction expenses.
Our Board of Directors met and/or acted by written consent nine times during the year ended December 31, 2021. During this period, each director then in office attended 75% or more of the aggregate of (i) the total number of meetings of the Board of Directors held during the period for which he was a director and (ii) the total number of meetings of committees of the Board of Directors on which he served, held during the period for which he served. The Company does not have a policy with regard to directors’ attendance at our annual meetings of stockholders. All board members attended the 2021 annual meeting of stockholders.
Director Independence
Our Board of Directors has determined that each of our current directors, other than Mr. Holst qualifies as “independent” in accordance with the listing standards of The Nasdaq Capital Market. Because Mr. Holst is our president and chief executive officer and an employee of the Company, he does not qualify as independent.
The Nasdaq Capital Market independence definition includes a series of objective tests, such as that the director is not an officer or employee of the Company or its subsidiaries, has not engaged in various types of business dealings with the Company or its subsidiaries. In addition, as further required by The Nasdaq Capital Market rules, the Board has made a subjective determination as to each independent director that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the directors reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management.
Board Committees
The Board has an audit committee, a compensation committee and a nominating committee, and may form special committees as is required from time to time. Each of the committees regularly report on their activities and actions to the full Board. The charters for the audit committee, the compensation committee, and the nominating committee are available on the Company’s website at www.oblong.com/company/investor-relations. The contents of our website are not incorporated by reference into this document for any purpose.
Audit Committee
The audit committee currently consists of James Lusk (chair), Jason Adelman, and Matthew Blumberg. Our Board of Directors has determined that all members of the audit committee are “independent” within the meaning of the corporate governance of Nasdaq Capital Market and the SEC rules governing audit committees and “financially literate” for purposes of applicable Nasdaq Capital Market listing standards. In addition, our Board of Directors has determined that each of Messrs. Lusk, Adelman, and Blumberg has the accounting and related financial management expertise to satisfy the requirements of an “audit committee financial expert,” as determinedFurther, pursuant to the rules and regulationsterms of the SEC. The audit committee consults and meets withPurchase Agreement, if our independent registered public accounting firm, Chief Financial Officer and accounting personnel, reviews potential conflict of interest situations
where appropriate, and reports and makes recommendations to the full Board of Directors regarding such matters. The audit committee met four times during the year ended December 31, 2021.
Please see “Report of the Audit Committee of the Board of Directors” below for additional information regarding the audit committee and the report of its members for the year ended December 31, 2021.
Compensation Committee
Our compensation committee currently consists of Jason Adelman (chair), James Lusk, and Deborah Meredith. Each member of the compensation committee meets the applicable independence requirements of The Nasdaq Capital Market. The compensation committee met and/or acted by written consent three times during the year ended December 31, 2021.
The compensation committee is responsible for establishing and administering our executive compensation policies. The role of the compensation committee is to (i) formulate, evaluate and approve compensation of the Company’s directors, executive officers and key employees, (ii) oversee all compensation programs involving the use of the Company’s stock and (iii) produce, if required under applicable securities laws, a report on executive compensation for inclusion in the Company’s proxy statement for its annual meeting of stockholders. The duties and responsibilities of the compensation committee under its charter include:
•annually reviewing and making recommendations to the Board with respect to compensation of directors, executive officers and key employees of the Company;
•annually reviewing and approving corporate goals and objectives relevant to Chief Executive Officer compensation, evaluating the Chief Executive Officer’s performance in light of those goals and objectives, and recommending to the Board the Chief Executive Officer’s compensation levels based on this evaluation;
•reviewing competitive practices and trends to determine the adequacy of the executive compensation program;
•approving and overseeing compensation programs for executive officers involving the use of the Company’s stock;
•approving and administering cash incentives for executives, including oversight of achievement of performance objectives, and funding for executive incentive plans;
•annually performing a self-evaluation on the performance of the compensation committee; and
•making regular reports to the Board concerning the activities of the compensation committee.
When appropriate, the compensation committee may, in carrying out its responsibilities, form and delegate authority to subcommittees. The Chief Executive Officer plays a role in determining the compensation of our other executive officers by evaluating the performance of those executive officers. The Chief Executive Officer’s evaluations are then reviewed by the compensation committee. This process leads to a recommendation for any changes in salary, bonus terms and equity awards, if any,
based on performance, which recommendations are then reviewed and approved by the compensation committee.
Nominating Committee
Our nominating committee currently consists of Jason Adelman (chair), James Lusk, Matthew Blumberg, and Deborah Meredith. Each member of the nominating committee meets the independence requirements of the Nasdaq Capital Market. The nominating committee is responsible for assessing the performance of our Board of Directors and making recommendations to our Board regarding nominees for the Board. The nominating committee met and/or acted by written consent two times during the year ended December 31, 2021.
The nominating committee considers qualified candidates to serve as a member of our Board of Directors that are suggested by our stockholders. Nominees recommended by stockholders will be given appropriate consideration and evaluated in the same manner as other nominees. Stockholders can suggest qualified candidates for director by writing to our Corporate Secretary at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. Stockholder submissions that are received in accordance with our bylaws and that meet the criteria outlined in the nominating committee charter are forwarded to the members of the nominating committee for review. Stockholder submissions must include the following information:
•a statement that the writer is our stockholder and is proposing a candidate for our Board of Directors for consideration by the nominating committee;
•the name of and contact information for the candidate;
•a statement of the candidate’s business and educational experience;
•information regarding each of the factors set forth in the nominating committee charter sufficient to enable the nominating committee to evaluate the candidate;
•a statement detailing any relationship between the candidate and any of our customers, suppliers or competitors;
•detailed information about any relationship or understanding between the proposing stockholder and the candidate; and
•a statement that the candidate is willing to be considered and willing to serve as our director if nominated and elected.
In considering potential new directors, the nominating committee will review individuals from various disciplines and backgrounds. Among the qualifications to be considered in the selection of candidates are broad experience in business, finance or administration; familiarity with national and international business matters; familiarity with our industry; and prominence and reputation. While there is no formal policy with regard to consideration of diversity in identifying director nominees, the nominating committee will consider diversity in business experience, professional expertise, gender and ethnic background, along with various other factors when evaluating director nominees. The nominating committee will also consider whether the individual has the time available to devote to the work of our Board of Directors and one or more of its committees.
The nominating committee will also review the activities and associations of each candidate to ensure that there is no legal impediment, conflict of interest or other consideration that might hinder or prevent service on our Board of Directors. In making its selection, the nominating committee will bear in mind that the foremost responsibility of a director of a corporation is to represent the interests of the stockholders as a whole. The nominating committee will periodically review and reassess the adequacy of its charter and propose any changes to the Board of Directors for approval.
Contacting the Board of Directors
Any stockholder who desires to contact our Board of Directors, committees of the Board of Directors and individual directors may do so by writing to: Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433, Attention: David Clark, Corporate Secretary. Mr. Clark will direct such communication to the appropriate persons.
Board Leadership Structure and Role in Risk Oversight
Mr. Holst has served as the Company’s President and Chief Executive Officer since January 2013 and served as the Chairman of the Company’s Board of Directors from July 2019 up until our 2021 annual meeting of stockholders (December 16, 2021). Effective on the date of the 2021 annual meeting of stockholders, Mr. Blumberg replaced Mr. Holst as the Chairman of the Board of Directors.
To ensure a strong and independent Board, as discussed herein, the Board has affirmatively determined that all directors of the Company, other than Mr. Holst, are independent within the meaning of the Nasdaq Capital Market listing standards currently in effect. Our Corporate Governance Guidelines provide that non-management directors shall meet in regular executive session without management present, and that Mr. Lusk, who served as our lead independent director from July 2019 up until our 2021 annual meeting of stockholders, has acted as the Chairman of such meetings. Additionally, Mr. Lusk actively participated in establishing and setting Board meeting agendas.
The Board believes that there is no single approach to providing board leadership and that each possible leadership structure must be considered in the context of the individuals involved and the specific circumstances facing a company, as the right structure may vary as circumstances change. The Board believes it is in the best interest of the Company and its stockholders at this time to have separate Chief Executive Officer and Chair positions. The Board believes this structure will enable the Chief Executive Officer to focus on operation of the Company’s business, while the Chair focuses on leading the Board in its oversight role.
The Board has an active role, directly and through its committees, in the oversight of the Company’s risk management efforts. The Board carries out this oversight role through several levels of review. The Board regularly reviews and discusses with members of management information regarding the management of risks inherent in the operation of the Company’s business and the implementation of the Company’s strategic plan, including the Company’s risk mitigation efforts.
Each of the Board’s committees also oversees the management of the Company’s risks that are under each committee’s areas of responsibility. For example, the audit committee oversees management of accounting, auditing, external reporting, internal controls and cash investment risks. The nominating committee oversees and assesses the performance of the Board and makes recommendations to the Board from time to time regarding nominees for the Board. The compensation committee oversees risks arising
from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.
Family Relationships
There are no family relationships between the officers and directors of the Company.
Legal Proceedings
During the past ten years none of our directors or executive officers was involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee is composed of three members. Each member is a director who meets the current independence standards under the applicable SEC and Nasdaq Capital Market rules. The audit committee operates under a written audit committee charter. As described more fully in its charter, the purpose of the audit committee is to assist the Board in its general oversight of the Company’s financial reporting, internal controls and audit functions. Management is responsible for: the preparation, presentation and integrity of Company’s financial statements; accounting and financial reporting principles; internal controls; and procedures designed to reasonably assure compliance with accounting standards, applicable laws and regulations. EisnerAmper LLP (“EisnerAmper”), our independent registered public accounting firm, is responsible for performing an independent audit of the consolidated financial statements in accordance with the Standards of the Public Company Accounting Oversight Board (United States). In accordance with applicable law, the audit committee has ultimate authority and responsibility to select, compensate, evaluate and, when appropriate, replace our independent registered public accounting firm. The audit committee has the authority to engage its own outside advisers, including experts in particular areas of accounting, as it determines appropriate, apart from counsel or advisers hired by management.
The audit committee members need not be professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and EisnerAmper, nor can the audit committee certify that EisnerAmper is “independent” under applicable rules. The audit committee serves a Board-level oversight role, in which it provides advice, counsel and direction to management and EisnerAmper on the basis of the information it receives, discussions with management and EisnerAmper, and the experience of the audit committee’s members in business, financial and accounting matters. All members of the audit committee have been determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules. Stockholders should understand that this designation is an SEC disclosure requirement related to these directors’ experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on these directors any duties, obligations or liability that are greater than are generally imposed on them as a member of the audit committee and the Board, and their designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the audit committee or the Board.
In accordance with law, the audit committee is responsible for establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, including the confidential, anonymous submission by our employees received through established procedures, of concerns regarding questionable accounting or auditing matters. Among other matters, the audit committee monitors the activities and performance of EisnerAmper, including the audit scope, external audit fees, independence matters and the extent to which the firm may be retained to perform non-audit services.
In accordance with audit committee policy and applicable legal requirements, all services to be provided by EisnerAmper are pre-approved by the audit committee. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from EisnerAmper. We obtain these services from other service providers as needed.
The audit committee has reviewed our audited financial statements and met and held discussions with management regarding the audited financial statements. Management has represented to the audit committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The audit committee has discussed with EisnerAmper the matters required to be discussed by the statement on Auditing Standards No. 1301, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board. These discussions have included a review as to the quality, not just the acceptability, of our accounting principles.
The audit committee has received the written disclosures and the letter from EisnerAmper required by applicable requirements of the Public Company Accounting Oversight Board regarding EisnerAmper’s communications with the audit committee concerning independence, and the audit committee has discussed with EisnerAmper its independence from management and the Company. The audit committee has also considered the compatibility of non-audit services with EisnerAmper’s independence.
Based on the audit committee’s review and discussions described in this report, the audit committee recommended to the Board of Directors that our audited consolidated financial statements for the year ended December 31, 2021 be included in the Company’s Annual Report on Form 10-K for filing with the SEC.
Respectfully submitted,
James Lusk, Chairman
Jason Adelman
Matthew Blumberg
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee, composed entirely of independent, non-employee members of the Board of Directors, has appointed the firm of EisnerAmper as the independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2022 and is asking the stockholders for ratification of the appointment. If the stockholders do not approve the selection of EisnerAmper, the audit committeethis proposal, we will reconsider the appointment, but may conclude that it is in the best interests of the Company to retain EisnerAmper for the current fiscal year. Even if the appointment is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interests of the Company.
As our independent registered public accounting firm, EisnerAmper would audit our consolidated financial statements for the fiscal year ending December 31, 2022, review the related interim quarters, and perform audit-related services and consultation in connection with various accounting and financial reporting matters. EisnerAmper may also perform certain non-audit services for our Company. The audit committee has determined that the provision of the services provided by EisnerAmper as set forth herein are compatible with maintaining EisnerAmper’s independence and the prohibitions on performing non-audit services set forth in the Sarbanes-Oxley Act and relevant SEC rules.
Representatives of EisnerAmper are not expected to be present at the Annual Meeting but will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
Audit Fees
EisnerAmper, our principal accountant, billed us approximately $299,000 for professional services for the audit of our annual consolidated financial statements for the 2021 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2021 fiscal year. EisnerAmper billed us $301,000 for professional services for the audit of our annual consolidated financial statements for the 2020 fiscal year and the reviews of the consolidated financial statements included in our quarterly reports on Form 10-Q for the 2020 fiscal year.
Audit-Related Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any professional services rendered for audit-related items.
Tax Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any professional services rendered for tax compliance, tax advice or tax planning.
All Other Fees
EisnerAmper did not bill us in the 2021 and 2020 fiscal years for any other products or services.
Audit Committee Pre-Approval Policy
The audit committee is required to pre-approveseek stockholder approval of this proposal again on or before July 31, 2023, and thereafter semi-annually until we receive stockholder approval of this proposal. As such, our failure to obtain stockholder approval of this proposal at this time will require us to incur the engagementcosts of EisnerAmper to perform audit and other services for the Company. Our procedures for the pre-approval by the audit committee of all services provided by EisnerAmper comply with SEC regulations regarding pre-approval of services. Services subject to these SEC requirements include audit services, audit-related services, tax services and other services. The audit engagement is specifically approved, and the auditors are retained by the audit committee. The audit committee also has adopted policies and procedures for pre-approving all non-audit work performed by EisnerAmper. In accordance with audit committee policy and the requirements of law, all services provided by EisnerAmper in the 2021 and 2020 fiscal years were pre-approved by the audit committee and all services to be provided by EisnerAmper will be pre-approved. Pre-approval includes audit services, audit-related services, tax services and other services. To avoid certain potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from its auditing firm. We obtain these services from other service providers as needed.holding one or more additional stockholder meetings until we receive such approval.
Vote Required For Approval
To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN.” To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked "ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal.vote. Accordingly, an abstention will have the effect of a vote against thethis proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. AsBroker non-votes will have the effect of a result, broker non-votes should not exist with respectvote against this proposal because they "will be counted as present and entitled to this proposal.vote” at the Special Meeting.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 2,1, TO RATIFYAPPROVE THE SELECTIONISSUANCE OF EISNERAMPER LLPSHARES OF OUR COMMON STOCK UNDERLYING THE PREFERRED SHARES AND WARRANTS ISSUED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF MARCH 30, 2023, BY AND AMONG OBLONG, INC. AND THE INVESTORS NAMED THEREIN, IN AN AMOUNTEQUAL TO 20% OR MORE OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FORCOMMON STOCK OUTSTANDING BEFORE THE FISCAL YEAR ENDING DECEMBER 31, 2022.ISSUANCE IN ONE OR MORE NON-PUBLIC TRANSACTIONS AS REQUIRED BY AND IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(D) , INCLUDING THE APPROVAL OF THE ANTI-DILUTION PROTECTIONS CONTAINED IN SUCH PREFERRED SHARES AND WARRANTS.
PROPOSAL NO. 3 -- AMENDMENT TO COMPANY CHARTER TO EFFECT A REVERSE STOCK SPLIT
General2 – THE ADJOURNMENT PROPOSAL
At the Annual Meeting, Oblong’s
Overview
The Adjournment Proposal asks stockholders will be asked to approve an amendment to Article FOURTHthe adjournment of the Company Charter (the “Reverse Stock Split Amendment”)Special Meeting to effect a reverse stock splitlater date or dates, if necessary, to permit further solicitation and vote of Oblong’s issued and outstanding shares of Common Stock by a ratio of 1-for-5, 1-for-10, or 1-for-15 (the “Reverse Stock Split”), withproxies if, based upon the final ratio to be selected by Oblong’s Board of Directors. Atabulated vote “FOR” Proposal No. 3 will constitute approvalat the time of the Reverse Stock Split Amendment and will grant Oblong’s Board of DirectorsSpecial Meeting, there are insufficient shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the authority to determine whether to implementSpecial Meeting or at the Reverse Stock Split and to select the Reverse Stock Split ratio outtime of the range approved bySpecial Meeting, to approve the Company’s stockholders. The Board expects to authorize the consummation of the Reverse Stock Split only if and to the extent necessary to meet the listing requirements of the Nasdaq Capital Market, as further discussed under “--Purpose” below. Upon the effectiveness of the Reverse Stock Split (the “split effective time”), the issued and outstanding shares of Oblong’s Common Stock immediately prior to the split effective time will be reclassified into a smaller number of shares based on the Reverse Stock Split ratio selected by the Board.Issuance Proposal.
The Reverse Stock Split, as more fully described below, will not changeConsequences if the number of authorized shares of Common Stock or preferred stock, or the par value of Common Stock or preferred stock.
The description in this Proxy Statement of the proposed Reverse Stock Split AmendmentAdjournment Proposal is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Form of Amendment to the Company Charter attached to this Proxy Statement as Appendix A.
Purpose
The purpose of the Reverse Stock Split is generally to increase the per share trading value of the Common Stock in order to regain compliance with the Bid Price Rule as described below. As previously reported, on February 17, 2022, Oblong received written notice (the "Notice") from the Nasdaq Stock Market, LLC indicating that the bid price for the Common Stock, for the last 30 consecutive business days, had closed below the minimum $1.00 per share and, as a result, the Company is not in compliance with the $1.00 minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule").
On August 17, 2022, the Company received written notification from the Listing Qualifications Department of Nasdaq, granting the Company's request for a 180-day extension to regain compliance with the Bid Price Rule. The Company now has until February 13, 2023 to meet the requirement. If at any time prior to February 13, 2023, the bid price of the Company's ordinary shares closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Company will regain compliance with the Bid Price Rule.Not Approved
If the Company doesAdjournment Proposal is not regain compliance withapproved by the Bid Price Rule duringstockholders, the additional 180-day extension, Nasdaq will provide written notificationBoard may not be able to adjourn the Company that its Common Stock will be delisted. At that time, the Company may appeal the relevant delisting determinationSpecial Meeting to a hearings panel pursuant to the procedures set forthlater date in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the hearings panel, that such appeal would be successful. Nasdaq's extension notice has no immediate effectevent, based on the listingtabulated votes, there are insufficient shares represented (either in person or
trading of the Company's Common Stock, which will continue by proxy) to trade on the Nasdaq Capital Market under the symbol “OBLG”.
Principal Effects of the Reverse Stock Split
Effect on Proportionate Ownership. The Reverse Stock Split will be effected simultaneously for all outstanding shares of CommonStock. The Reverse Stock Split will affect all of Oblong’s stockholders uniformly and will not affect any stockholder’s percentage ownership interest in Oblong, except to the extent that the Reverse Stock Split results in any of Oblong’s stockholders owningconstitute a fractional share, since any resulting fractional share will be rounded up to a whole share. Shares of Oblong’s Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and nonassessable. The Reverse Stock Split will not affect Oblong continuing to be subject to the periodic reporting requirements of the Exchange Act.
Effect on Outstanding Options, Stock Option and Equity Incentive Plans and Warrants. In addition, proportionate adjustments will bemade to the per share exercise price and/or the number of shares issuable upon the exercise or conversion of all outstanding options, warrants and other convertible or exchangeable securities entitling the holders thereof to purchase, exchange for, or convert into, shares of Common Stock, which will result in approximately the same aggregate price being required to be paid for such options and restricted stock awards and units upon exercise immediately preceding the Reverse Stock Split. The number of shares reserved for issuance or pursuant to the securities or plans described in the immediately preceding sentence will be reduced proportionately.
Effect on Voting Rights. Proportionate voting rights of the holders of the Company’s common stock willnot be affected by the reverse stock split, regardless of the reverse stock split ratio selected by the Board, except to the extent that the reverse stock split results in any of the Company’s stockholders owning a fractional share, since any resulting fractional share will be rounded up to a whole share. For example, a holder of 1.0% of the voting power of the outstanding shares of the Company’s common stock immediately prior to the effective time of the reverse stock split would continue to hold 1.0% of the voting power of the outstanding shares of common stock after the reverse stock split, regardless of the reverse stock split ratio selected by the Board, subject to the de minimis effect of any fractional share being rounded up to a whole share.
Assuming Reverse Stock Split ratios of 1-for-5, 1-for-10, and 1-for-15, the following table sets forth (i) the number of shares of our Common Stock that would be issued and outstanding and (ii) the number of shares of our Common Stock that would be reserved for issuance pursuant to outstanding warrants, options, and restricted stock units and under our equity incentive plan, each giving effect to the Reverse Stock Split and based on securities outstanding as of November 17, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Shares Before Reverse Stock Split | | Reverse Stock Split Ratio of 1-for-5 | | Reverse Stock Split Ratio of 1-for-10 | | Reverse Stock Split Ratio of 1-for-15 |
| | | | | | | | |
| | | | | | | | |
| Number of Shares of Common Stock Issued and Outstanding | | 30,816,048 | | | 6,163,210 | | | 3,081,605 | | | 2,054,404 | |
| Number of Shares of Common Stock Reserved for Issuance | | 5,425,404 | | | 1,085,081 | | | 542,541 | | | 361,694 | |
If this Proposal No. 3 is approved and our Board of Directors elects to effect the Reverse Stock Split, the number of outstanding shares of Common Stock will be reduced in proportion to the ratio of the split chosen by our Board of Directors.
Additionally, if this Proposal No. 3 is approved and our Board of Directors elects to effect the Reverse Stock Split, we would communicate to the public, prior to the effective date of the stock split, additional details regarding the reverse split, including the specific ratio selected by our Board of Directors.
After the split effective time, the Common Stock will have a new CUSIP number, which is a number used to identify the Company’s equity securities, and stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below.
After the split effective time, the Company will continue to be subject to periodic reporting and other requirements of the Exchange Act. The Common Stock will continue to be listed on the Nasdaq Capital Market under the symbol “OBLG”.
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Proposal No. 3, except to the extent of their ownership in shares of our Common Stock and securities convertible or exercisable for Common Stock.
Certain Risks Associated with the Reverse Stock Split
If the Reverse Stock Split is effected and the market price of the Common Stock declines, the percentage decline may be greater than would occur in the absence of a Reverse Stock Split. We expect that the market price of the Common Stock will, however, also be based on performance and other factors, which are unrelated to the number of shares outstanding.
•There can be no assurance that the Reverse Stock Split will result in any particular price for the Common Stock. As a result, the trading liquidity of the Common Stock may not necessarily improve.
•There can be no assurance that the market price per share of the Common Stock after a Reverse Stock Split will increase in proportion to the reduction in the number of shares of the Common Stock outstanding before the Reverse Stock Split. Accordingly, the total market capitalization of the Common Stock after the Reverse Stock Split may be lower than the total market
capitalization before the Reverse Stock Split. Moreover, in the future, the market price of the Common Stock following the Reverse Stock Split may not exceed or remain higher than the market price prior to the Reverse Stock Split.
•Because the number of issued and outstanding shares of Common Stock would decrease as result of the Reverse Stock Split, the number of authorized but unissued shares of Common Stock will increase on a relative basis. If the Company issues additional shares of Common Stock, then the ownership interest of the Company’s current stockholders would be diluted, possibly substantially.
•There are certain agreements, plans and proposals that may have material anti-takeover consequences. The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect. For example, the issuance of a large block of Common Stock could dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of the Company with another company.
•The Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.
The Board intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares is likely to improve the trading price of the Common Stock to the extentquorum necessary to meetconduct business at the listing requirements of the Nasdaq Capital Market and if the implementation of the Reverse Stock Split is determined by the Board to be in the best interests of the Company and its stockholders. The Board does not expect to implement a Reverse Stock Split if Oblong can otherwise meet the listing requirements of the Nasdaq Capital Market.
Procedure for Effecting the Reverse Stock Split and Exchange of Stock Certificates
If Oblong’s stockholders approve the Reverse Stock Split, and implementing the Reverse Stock Split is necessary to meet the listing requirements of the Nasdaq Capital Market and if its Board of Directors still believes that a Reverse Stock Split is in the best interests of Oblong, the Oblong Board of Directors will determine and fix the Reverse Stock Split ratio out of the range approved by Oblong’s stockholders and the split effective time. Oblong’s Board of Directors may delay effecting,Special Meeting or choose not to pursue, the Reverse Stock Split in its discretion without resoliciting stockholder approval.
Beneficial Owners of Book Entry Shares of Common Stock. Upon the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders in “street name” (i.e., through a bank, broker, custodian or other nominee), in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split and making payment for fractional shares. If a stockholder holds shares of our Common Stock with a bank, broker, custodian or other nominee and has any questions in this regard, stockholders are encouraged to contact their bank, broker, custodian or other nominee.
Registered Holders of Book Entry Shares of Common Stock. Certain of our registered holders of Common Stock hold some or all oftheir shares electronically in book-entry form with our transfer agent, American Stock Transfer & Trust Company, LLC. These stockholders do not hold physical stock certificates evidencing their ownership of our Common Stock. However, they are provided with a statement reflecting the number of shares of our Common Stock registered in their accounts. If a stockholder holds registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-Reverse Stock Split shares. If a stockholder is entitled to post-Reverse Stock Split shares, a transaction statement will automatically be sent to the stockholder’s address of record indicating the number of shares of our Common Stock held following the Reverse Stock Split.
Registered Holders of Certificated Shares of Common Stock. Stockholders of record at the time of the Reverse Stock Split who holdshares of Common Stock in certificated form will be sent a transmittal letter bySpecial Meeting, to approve the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, after the split effective time that will contain the necessary materials and instructions on how a stockholder should surrender his, her or its certificates, if any, representing shares of our Common Stock to the transfer agent.Issuance Proposal.
Fractional Shares
No fractional shares will be issued in connection with the Reverse Stock Split. Stockholders of record who otherwise would be entitled to receive fractional shares because they hold a number of pre-split shares not evenly divisible by the number of pre-split shares for which each post-split share is to be reclassified, will be entitled, upon surrender to the transfer agent of certificates representing such shares, to be issued such additional fraction of a share as is necessary to increase the fractional share to a full share.
No Appraisal Rights
Under the Delaware General Corporation Law, stockholders are not entitled to appraisal rights with respect to the Reverse Stock Split, and the Company will not independently provide stockholders with any such right.
Accounting Matters
The Reverse Stock Split will not affect the par value of a share of the Common Stock. As a result, as of the split effective time, the stated capital attributable to Common Stock on the Company’s balance sheet will be reduced proportionately based on the Reverse Stock Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer shares of Common Stock outstanding.
Potential Anti-Takeover Effect
Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of Oblong’s Board of Directors or contemplating a tender offer or other transaction for the combination of Oblong with another company, the Reverse Stock Split proposal is not being proposed in response to any effort of which Oblong is aware to accumulate shares of Oblong’s Common Stock or obtain control of Oblong, nor is it
part of a plan by management to recommend a series of similar amendments to Oblong’s Board of Directors and stockholders. Other than the proposals being submitted to Oblong’s stockholders for their consideration at the Annual Meeting, Oblong’s Board of Directors does not currently contemplate recommending the adoption of any other actions that could be construed to affect the ability of third parties to take over or change control of Oblong.
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to U.S. holders of Oblong’s Common Stock. For purposes of this discussion, the term “U.S. holder” means a beneficial owner of common shares that is for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation, or entity treated as a corporation for U.S. federal income tax purposes, organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes or (iv) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. The following summary is based upon the provisions of the U.S. Internal revenue Code of 1986, as amended (the "Code"), the U.S. Department of the Treasury regulations promulgated thereunder (the "Regulations") and judicial and administrative authorities, rulings and decisions, all as in effect as of the date of this proxy statement. These authorities may change, possibly with retroactive effect, and any such change could affect the accuracy of the statements and conclusions set forth in this summary. This summary is not a complete description of all of the tax consequences of the Reverse Stock Split and, in particular, does not address any tax consequences arising under the laws of any U.S. state, local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to the income tax.
The following discussion applies only to U.S. holders of Oblong's Common Stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that might be relevant to U.S. holders in light of their particular circumstances and does not apply to U.S. holders subject to special treatment under the U.S. federal income tax laws (such as, for example, dealers or brokers in securities, commodities or foreign currencies; traders in securities that elect to apply a mark-to-market method of accounting; banks and certain other financial institutions; insurance companies; mutual funds; tax-exempt organizations; holders subject to the alternative minimum tax provisions of the Code; partnerships, S corporations or other pass-through entities, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, or investors in any of the foregoing; holders whose functional currency is not the U.S. dollar; holders of Oblong equity awards, including Oblong restricted stock, options, stock appreciation rights, and other forms of compensation; holders who hold Oblong's Common Stock as part of a hedge, straddle, constructive sale or conversion transaction or other integrated investment; holders who acquire Oblong's Common Stock pursuant to the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation; and holders who actually or constructively own more than 5% of the Oblong's Common Stock).
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Oblong's Common Stock, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds Oblong's Common Stock, and any partners in such partnership,
should consult their own independent tax advisors regarding the tax consequences of the Reverse Stock Split to them under their specific circumstances. Determining the actual tax consequences of the Reverse Stock Split to you may be complex and will depend on your specific situation and on factors that are not within the parties’ control. You should consult your own independent tax advisor as to the specific tax consequences of the Reverse Stock Split in your particular circumstances, including the applicability and effect of the alternative minimum tax and any U.S. state, local, non-U.S. and other tax laws and of changes in those laws.
Consequences of the Reverse Stock Split Generally to U.S. Holders of Oblong Shares
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. Accordingly, a U.S. holder generally should not recognize gain or loss upon the Reverse Stock Split, except for those U.S. holders that receive a whole share of Oblong’s Common Stock in lieu of a fractional share, as discussed below. A U.S. holder’s aggregate tax basis in the shares of Oblong’s Common Stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of Oblong’s Common Stock surrendered (increased by any income or gain recognized on receipt of a whole share in lieu of a fractional share), and such U.S. holder’s holding period in the shares of Oblong’s Common Stock received should include the holding period in the shares of Oblong’s Common Stock surrendered. The Regulations provide detailed rules for allocating the tax basis and holding period of the shares of Oblong’s Common Stock surrendered to the shares of Oblong’s Common Stock received pursuant to the Reverse Stock Split. U.S. holders of shares of Oblong’s Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
The treatment of fractional shares of Oblong’s Common Stock being rounded up to the next whole share is uncertain, and a U.S. holder that receives a whole share of Oblong’s Common Stock in lieu of a fractional share of Oblong’s Common Stock may recognize income, which may be characterized as either capital gain or as a dividend to the extent of the portion of our accumulated earnings and profits attributable to the rounded share, in an amount not to exceed the excess of the fair market value of such whole share over the fair market value of the fractional share to which the U.S. holder was otherwise entitled. U.S. holders should consult their tax advisors regarding the U.S. federal income tax and other tax consequences of receiving a whole share in lieu of a fractional share.
Vote Required For Approval
To be approved by the stockholders, this itemproposal must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the AnnualSpecial Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.“ABSTAIN.” To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal.proposal, marked ABSTAIN" and any broker non-votes. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal.vote. Accordingly, an abstention will have the effect of a vote against thethis proposal. On this proposal, brokers will not have discretionary authority to vote in the absence of timely instructions from their customers. Broker non-votes will have nothe effect onof a vote against this proposal because they are not "entitled"will be counted as present and entitled to vote" on this matter.vote” at the Special Meeting.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 3,2, TO AMENDAPPROVE AN ADJOURNMENT OF THE COMPANY CHARTERSPECIAL MEETING TO EFFECT A REVERSELATER DATE OR DATES, IF NECESSARY, TO PERMIT FURTHER SOLICITATION AND VOTE OF PROXIES IF, BASED UPON THE TABULATED VOTE AT THE TIME OF THE SPECIAL MEETING, THERE ARE INSUFFICIENT SHARES OF OUR CAPITAL STOCK REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM NECESSARY TO CONDUCT BUSINESS AT THE SPECIAL MEETING OR AT THE TIME OF THE SPECIAL MEETING, TO APPROVE THE ISSUANCE PROPOSAL.
STOCK SPLIT OF THE COMPANY’S ISSUED AND OUTSTANDING SHARES OF COMMON STOCK BY A RATIO OF 1-FOR-5, 1-FOR-10, OR 1-FOR-15.
PROPOSAL NO. 4
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables stockholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
The Say-on-Pay vote is advisory, and therefore is not binding on us, the compensation committee or our Board of Directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board of Directors and our compensation committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote, consider our stockholders’ concerns and the compensation committee will evaluate whether any actions are necessary to address those concerns.
The Company last held a “say-on-frequency” vote in 2019, at which point our stockholders voted for, and the Board determined to hold, say-on-pay votes every three years. The next say-on-pay vote will be held in 2025. The next say-on-frequency vote will also be held in 2025.
We believe that the information provided in the “Executive Compensation” section of this Proxy Statement demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the Proxy Statement for the 2022 Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the compensation tables and narrative discussion, and other related disclosure.”
Vote Required For Approval
To be approved by the stockholders, this item must receive the “FOR” vote of a majority of the total number of votes of our capital stock represented in person or by proxy and entitled to vote at the Annual Meeting, voting as a single class. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. To be approved, the shares voted “FOR” this proposal must exceed the number voted “AGAINST” this proposal. A properly executed proxy marked “ABSTAIN” will not be voted, although it will be counted as present and entitled to vote for purposes of the proposal. Accordingly, an abstention will have the effect of a vote against the proposal. On this proposal, brokers will not have discretionary
authority to vote in the absence of timely instructions from their customers. Broker non-votes will have no effect on the proposal because they are not “entitled to vote” on the matter.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE EXECUTIVE COMPENSATION AS DESCRIBED IN THIS PROXY STATEMENT.
SECURITYSECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of our capital stock as of November 17, 2022[April , 2023] by each of the following:
•each person (or group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) known by us to own beneficially more than 5% of any class of our voting securities;
•the named executive officers set forth in the Summary Compensation Table under “Executive Compensation” below;
on page 39 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 21, 2023,
•each of our directors serving during 2022current directors; and director nominees; and
•all of our current directors and executive officers as a group.
The amounts and percentages in the table below are based on 30,816,0482,063,308 shares of Common Stock issued and outstanding as of November 17, 2022.[April , 2023].
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is considered the beneficial owner of securities that can be acquired within 60 days of such date through the exercise or conversion of any option, warrant or other derivative security. Shares of Common Stock subject to options, restricted stock units (“RSUs”RSUs”), warrants or other derivative securities which are currently exercisable or convertible or are exercisable or convertible within such 60 days are considered outstanding for computing the ownership percentage of the person holding such options, RSUs, warrants or other derivative security, but are not considered outstanding for computing the ownership percentage of any other person.
| | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock |
| Name and Address of Beneficial Owners (1) | | Amount and Nature of Beneficial Ownership (2) | | | Percent of Class |
| Named Executive Officers and Directors: | | | | | | |
| Peter Holst | | 413,491 | | | (3) | | 1.3 | | % |
| David Clark | | 58,933 | | | (4) | | 0.2 | | % |
| Pete Hawkes | | — | | | | | --- | % |
| Jason Adelman | | 646,000 | | | (5) | | 2.1 | | % |
| James Lusk | | 93,406 | | | (6) | | 0.3 | | % |
| Matthew Blumberg | | — | | | (7) | | --- | % |
| Deborah Meredith | | — | | | (8) | | --- | % |
All current directors, director nominees and executive officers as a group
(6 persons) | | 1,211,830 | | | | | 3.9 | | % |
| | | | | | |
| Greater than 5% Owners: | | | | | | |
| Foundry Group 700 Front St., Suite 104, Louisville, CO 80027 | | 7,839,509 | | | (9) | | 25.4 | | % |
Stepstone Group LP
4225 Executive Square, Suite 1600
La Jolla, CA 90237 | | 3,692,661 | | | (10) | | 12.0 | | % |
| Morgan Stanley Funds 100 Front Street West Conshohocken, PA 19428 | | 2,552,739 | | | (11) | | 8.3 | | % |
—_________________________
(1) Unless otherwise noted, the address of each person listed is c/o Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.
(2) Unless otherwise indicated by footnote, the named persons have sole voting and investment power with respect to the shares of Common Stock beneficially owned by them.
(3) Includes 325,991 shares of Common Stock and 87,500 shares of Common Stock subject to stock options presently exercisable.
(4) Includes 48,933 shares of Common Stock and 10,000 shares of Common Stock subject to stock options presently exercisable.
(5) Based on ownership information from the Form 4 filed by Mr. Adelman with the SEC on August 20, 2021. Mr. Adelman beneficially owns 646,000 shares of Common Stock, of which 569,500 shares are held directly by Mr. Adelman and 76,500 shares are held in a retirement plan.
(6) Based on ownership information from the Form 4 filed by Mr. Lusk with the SEC on August 20, 2021. Includes 54,502 shares of Common Stock, 10,000 shares of Common Stock subject to stock options presently exercisable, and 28,904 shares of Common Stock issuable from vested RSUs (for which the shares of Common Stock have not yet been delivered in accordance with the terms of these RSUs).
(7) Based on ownership information from the Form 3 filed by Mr. Blumberg with the SEC on August 25, 2021.
(8) Based on ownership information from the Form 3 filed by Ms. Meredith with the SEC on August 25, 2021.
(9) Based on ownership information from an amendment to Schedule 13D filed on February 22, 2021.
(10) Based on ownership information from an amendment to Schedule 13G/A filed on February 11, 2022.
(11) Based on records from the Company's transfer agent as of the date of this Proxy Statement. | | | | | | | | | | | | | | |
| | Common Stock |
| Name and Address of Beneficial Owners (1) | | Amount and Nature of Beneficial Ownership (2)(3) | | Percent of Class |
| Named Executive Officers and Directors: | | | | |
| Peter Holst | | 21,733 | | | 1.1 | % |
| David Clark | | 3,262 | | | 0.2 | % |
| James S. Lusk | | 6,228 | | (4) | 0.3 | % |
| Jason Adelman | | 43,067 | | (5) | 2.1 | % |
| Matthew Blumberg | | — | | (6) | — | % |
| Deborah Meredith | | — | | (7) | — | % |
All directors and executive officers as a group
(6 people) | | 74,290 | | | 3.6 | % |
| | | | |
| Greater than 5% Owners: | | | | |
| Foundry Group, 700 Front St., Suite 104, Louisville, CO 80027 | | 522,634 | | (8) | 25.3 | % |
| StepStone Group LP, 4225 Executive Square, Suite 1600, La Jolla, CA 90237 | | 246,178 | | (9) | 11.9 | % |
| Morgan Stanley Funds 100 Front Street West Conshohocken, PA 19428 | | 170,183 | | (10) | 8.2 | % |
| | | | |
| (1) Unless otherwise noted, the address of each person listed is c/o Oblong, Inc., 25587 Conifer Road, Suite 105-231, Conifer, CO 80433. |
| (2) All shares shown as adjusted for the 1-for-15 reverse stock split effected January 3, 2023. |
| (3) Unless otherwise indicated by footnote, the named persons have sole voting and investment power with respect to the shares of Common Stock beneficially owned. |
| (4) Based on ownership information from the Form 4 filed by Mr. Lusk with the SEC on August 20, 2021. Includes 3,634 shares of Common Stock, 667 shares of Common Stock subject to stock options presently exercisable, and 1,927 shares of Common Stock issuable from vested RSUs (for which the shares of Common Stock have not yet been delivered in accordance with the terms of these RSUs). |
| (5) Based on ownership information from the Form 4 filed by Mr. Adelman with the SEC on August 20, 2021. Mr. Adelman beneficially owns 43,067 shares of Common Stock, of which 37,967 shares are held directly by Mr. Adelman and 5,100 shares are held in a retirement plan. |
| (6) Based on ownership information from the Form 3 filed by Mr. Blumberg with the SEC on August 25, 2021. |
| (7) Based on ownership information from the Form 3 filed by Ms. Meredith with the SEC on August 25, 2021. |
| (8) Based on ownership information from an amendment to Schedule 13D filed on February 22, 2021. |
| (9) Based on ownership information from an amendment to Schedule 13G/A filed on February 11, 2022. |
| (10) Based on records from the Company's transfer agent as of March 6, 2023. |
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership
and changes in ownership with the SEC. Executive officers, directors and greater than 10% stockholders are required by regulations of the SEC to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of reports we received, or written representations that no such reports were required for those persons, we believe that, for the year ended December 31, 2021, all statements of beneficial ownership required to be filed with the SEC were filed on a timely basis.
EXECUTIVE OFFICERS
The following table sets forth certain information regarding our current executive officers.
| | | | | | | | | | | | | | |
Name | | Age | | Position |
Peter Holst | | 53 | | Director, President, and Chief Executive Officer |
David Clark | | 53 | | Chief Financial Officer, Treasurer, and Corporate Secretary |
| | | | |
Biographies
Peter Holst, Director, President, and Chief Executive Officer. See “Proposal No. 1 - Election of Directors — Nominee Biographies” above for Mr. Holst’s biography.
David Clark, Chief Financial Officer, Treasurer, and Corporate Secretary. Mr. Clark joined the Company in March 2013 as Chief Financial Officer. Mr. Clark has more than 30 years of experience in finance and accounting. Prior to joining the Company, Mr. Clark served as Vice President of Finance, Treasurer and acting Chief Financial Officer for Allos Therapeutics, a publicly traded biopharmaceutical company, and as Chief Financial Officer of Seurat Company (formerly XOR, Inc.), an e-commerce managed services company. Mr. Clark started his career and spent seven years in the audit practice of PricewaterhouseCoopers LLP. Mr. Clark is an active Certified Public Accountant and received a Master of Accountancy and a B.S. in Accounting from the University of Denver.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for the years ended December 31, 2021 and 2020 the compensation awarded to, paid to, or earned by: Peter Holst, Director, President, and Chief Executive Officer; David Clark, CFO, Treasurer, and Corporate Secretary; and Pete Hawkes, former SVP, Design, Product, and Engineering (the “named executive officers”), as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Positions | Year | Salary (1) ($) | Bonus ($) | Stock Awards (2) ($) | All Other (3) ($) | Total ($) |
| Peter Holst | 2021 | 246,340 | | | 200,000 | | | — | | | 8,693 | | | 455,033 | | |
| Director, President, and Chief Executive Officer | 2020 | 199,875 | | | 210,000 | | | — | | | 8,550 | | | 418,425 | | |
| David Clark | 2021 | 242,164 | | | 100,000 | | | — | | | 8,688 | | | 350,852 | | |
| Chief Financial Officer, Treasurer, and Corporate Secretary | 2020 | 225,133 | | | 118,125 | | | — | | | 8,550 | | | 351,808 | | |
| Pete Hawkes (4) | 2021 | 200,000 | | | — | | | 372,000 | | | 5,769 | | | 577,769 | | |
| Former Senior Vice President, Design, Product, and Engineering | 2020 | 180,304 | | | — | | | — | | | — | | | 180,304 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | |
| (1) Effective July 1, 2021, the annual salaries for Mr. Holst and Mr. Clark were increased to $295,000 and $260,000, respectively. Effective June 29, 2020, Mr. Hawkes annual salary is $200,000. | |
| (2) These amounts represent the aggregate grant date fair value for awards of stock options for 2021, computed in accordance with FASB ASC Topic 718. | |
| (3) Represents matching contributions under the Company’s 401(k) Plan for Mr. Holst of $8,693 for 2021 and $8,550 for 2020; for Mr. Clark of $8,688 for 2021 and $8,550 for 2020; and $5,769 for Mr. Hawkes for 2021. | |
| (4) On March 4, 2022, Pete Hawkes was terminated as Senior Vice President of Product, Design, and Engineering due to the elimination of his position with the Company. In connections with Mr. Hawkes' departure, the Company and Mr. Hawkes entered into a separation agreement which included a customary release of claims and provides for a separation payment of $47,639 | |
Outstanding Equity Awards at 2021 Fiscal Year-End
The table set forth below presents the number and values of stock option awards held by the named executive officers at December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | |
| Name | Grant Date | Number of Securities Underlying Unexercised Options
(#)(1)(2) | | Option Exercise Price ($) | | Option Expiration Date | | | | | |
| Peter Holst | 1/13/2013 | 87,500 | | | 19.80 | | 1/13/2023 | | | | | |
| David Clark | 3/25/2013 | 10,000 | | | 15.10 | | 3/25/2023 | | | | | |
| Pete Hawkes | 6/28/2021 | 150,000 | | | 3.25 | | 6/28/2031 | | | | | |
| | |
(1) All stock option awards held by Messers Holst and Clark were fully vested and exercisable as of December 31, 2021. |
(2) At December 31, 2021, Mr. Hawkes held 150,000 stock options, which were subject to vesting over a three-year period; 1/3 on June 28, 2022, 1/3 on June 28, 2023, and 1/3 on June 28, 2024. On March 4, 2022, Mr. Hawkes was terminated and his stock options were forfeited. |
|
401(k) Plan
The Company maintains a tax-qualified 401(k) plan on behalf of its eligible employees, including its named executive officers. Pursuant to the terms of the plan, for fiscal years 2021 and 2020 eligible employees may defer up to 80% of their salary each year, and the Company matched 50% of an
employee’s contributions on the first 6% of the employee’s salary. This matching contribution vests over four years.
Agreements with Named Executive Officers
We have entered into employment agreements with certain of our named executive officers, excluding Mr. Hawkes. All named executive officers, whether or not subject to an employment agreement, are “at will” employees of the Company.
Peter Holst Employment Agreement.
On January 13, 2013, the Board appointed Peter Holst as the Company’s President and Chief Executive Officer, and as a member of the Board. In connection with his appointment, the Company entered into an employment agreement with Mr. Holst, which was subsequently amended and restated as of January 28, 2016 and as of July 19, 2019 (as amended and restated, the “Holst Employment Agreement”). Pursuant to the Holst Employment Agreement, Mr. Holst received an annual base salary of $199,875 for 2019 and 2020 and is eligible to receive an annual incentive bonus equal to 100% of his base salary, at the discretion of the compensation committee of the Board based on meeting certain financial and non-financial goals. Effective July 1, 2021, Mr. Holst's annual base salary was increased to $295,000.
Under the terms of the Holst Employment Agreement, if Mr. Holst’s employment is terminated outside of a “change in control” (as defined in the Holst Employment Agreement) (i) by the Company without “cause” or by Mr. Holst for “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Holst Employment Agreement caused by the Company's election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•12 months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•100% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In addition to the above payments and benefits, in the event that Mr. Holst’s employment is terminated during the 18-month period following a “change in control” (i) by the Company without “cause” or by Mr. Holst for “good reason” or (ii) as a result of the expiration of the term of the Holst Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•24 months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•100% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•a pro-rated portion of his maximum annual target bonus for the calendar year in which the effective date of the termination occurs;
•80% accelerated vesting of Mr. Holst’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Holst and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of 12 months.
In consideration of the payments and benefits under the Holst Employment Agreement, Mr. Holst is restricted from engaging in competitive activities for 12 months after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
The Holst Employment Agreement contains a “best after-tax benefit” provision, which provides that, to the extent that any amounts payable under the Holst Employment Agreement would be subject to the federal tax levied on certain “excess parachute payments” under Section 4999 of the Code, the Company will either pay Mr. Holst the full amount due under the Holst Employment Agreement or, alternatively, reduce his payments to the extent that no Section 4999 excise tax would be due, whichever provides the highest net after-tax benefit to Mr. Holst.
David Clark Employment Agreement.
On March 25, 2013, the Company entered into an employment agreement with David Clark in connection with his appointment as Chief Financial Officer of the Company, which was subsequently amended and restated on July 19, 2019 (as amended and restated, the “Clark Employment Agreement”). Pursuant to the Clark Employment Agreement, Mr. Clark received an annual base salary of $225,133 for 2019 and 2020 and is eligible to receive an annual incentive bonus equal to 50% of his base salary, at the discretion of the compensation committee of the Board, based on meeting certain financial and non-financial goals. Effective July 1, 2021, Mr. Clark's annual base salary was increased to $260,000.
Under the terms of the Clark Employment Agreement, if Mr. Clark’s employment is terminated outside of a “change in control” (as defined in the Clark Employment Agreement) (i) by the Company without “cause” or by Mr. Clark with or without “good reason” (as such terms are defined therein) or (ii) as a result of the expiration of the term of the Clark Employment Agreement caused by the Company’s election not to renew such agreement, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of an effective general release of claims in favor of the Company:
•Six months’ base salary, payable in equal monthly installments in accordance with the Company’s normal payroll practices;
•50% of his maximum annual target bonus payable for the calendar year in which such termination occurs;
•a pro-rated portion of his maximum annual target bonus for the calendar year in which the effective date of termination occurs;
•100% accelerated vesting of Mr. Clark’s then-unvested shares of restricted stock and RSUs; and
•payment (or reimbursement) of the COBRA premiums for continuation of coverage for Mr. Clark and his eligible dependents under the Company’s then existing medical, dental and prescription insurance plans for a period of six months.
In addition to the above payments and benefits, in the event that Mr. Clark’s employment is terminated during the 18-month period following a “change in control” by the Company without “cause” or by Mr. Clark for “good reason,” then he will also be entitled to receive (i) increased severance equal to 18 months’ base salary, (ii) 100% of his maximum annual target bonus payable for the calendar year in which such termination occurs, and (iii) extended payment (or reimbursement) of the COBRA premiums for 12 months. In such event, Mr. Clark will be entitled to receive 80% accelerated vesting of his then-unvested shares of restricted stock and RSUs.
In consideration of the payments and benefits under the Clark Employment Agreement, Mr. Clark is restricted from engaging in competitive activities for six months after the termination of his employment, as well as prohibited from soliciting the Company’s clients and employees and from disclosing the Company’s confidential information.
Pete Hawkes Separation Agreement.
On March 4, 2022, Pete Hawkes was terminated as the Senior Vice President of Product, Design & Engineering due to the elimination of his position with the Company. In connection with Mr. Hawkes' departure, the Company and Mr. Hawkes entered into a separation agreement, which includes a customary release of claims and provides for a separation payment of $47,639 (which was paid in a single lump sum during the year ended December 31, 2022). Pursuant to the separation agreement, Mr. Hawkes executed a customary release of claims and proprietary information and inventions agreement and will remain subject to restrictive covenants, including covenants related to non-disparagement.
Potential Payments to Named Executive Officers upon Termination or Change-in-Control
In accordance with the terms of the 2007 Stock Incentive Plan and 2014 Equity Incentive Plan, upon a Change in Control or Corporate Transaction, as each such term is defined in such Plans, all shares of restricted stock, restricted stock units and all unvested options immediately vest. No Named Executive Officer is entitled to accelerated vesting in connection with Voluntary Resignation, retirement, disability or a termination for cause. In accordance with the terms of the 2019 Equity Incentive Plan, the Company is given authority to accelerate the timing of the exercise provisions of awards under such plan in the event of certain change in control or other corporate transactions.
See “Agreements with Named Executive Officers” above for a discussion of certain payments the Company could be required to make upon the termination of a Named Executive Officer.
DIRECTOR COMPENSATION
The Company’s director compensation plan provides that non-employee directors are entitled to receive annually: (i) a grant of 2,500 shares of restricted stock or restricted stock units ("RSUs") (pro-rated as necessary for the period of service from the director’s date of appointment to the Board of Directors until the next annual meeting of stockholders); and (ii) a retainer fee of $20,000. The annual fee is payable in equal quarterly installments on the first business day following the end of the calendar quarter, in cash or shares of Restricted Stock, as chosen by the director, on an annual basis on or before December 31 of the applicable fiscal year. The annual equity grants to directors are made as of the date of the annual meeting of the Company’s stockholders. Grants of Restricted Stock or RSUs vest on the first anniversary of the grant date or earlier upon the occurrence of certain termination events or upon a change in control of the Company. Vested RSUs are settled in shares of Common Stock on a 1-for-1 basis upon the earliest of (i) the tenth anniversary of the grant date of the RSUs, (ii) a change in control (as defined in the award agreement) of the Company and (iii) the date of a director’s separation from service.
The Company also pays the chairman of its Board of Directors an additional cash payment of $20,000 per year, the chairperson of its audit committee an additional cash payment of $10,000 per year, each of the chairpersons of its compensation committee and nominating committee an additional cash payment of $5,000 per year, and each non-chair member of any standing committee an additional cash payment of $3,000 per year, in each case payable in equal quarterly installments in arrears. In addition, the Company may establish special committees of the Board from time to time and provide for additional retainers in connection therewith.
There are no agreements or arrangements between any director or director nominee and any person or entity other than the Company relating to the compensation or other payment in connection with such person's candidacy or service as director.
The following table represents compensation for the Company’s non-employee directors during the year ended December 31, 2021. All compensation for Peter Holst, the Company’s Chairman during the year ended December 31, 2021 is included in the Summary Compensation Table under “Executive Compensation” above.
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash | | Stock Awards (1) | | Total Fees |
| Jason Adelman | | $ | 33,000 | | | $ | 328,500 | | | $ | 361,500 | |
| Matthew Blumberg | | $ | 10,627 | | | None | | $ | 10,627 | |
| James S. Lusk | | $ | 36,000 | | | $ | 109,500 | | | $ | 145,500 | |
| Deborah Meredith | | $ | 9,750 | | | None | | $ | 9,750 | |
| | | | | | | | | | | | | | | | | | | | |
(1) These amounts represent the aggregate grant date fair value for awards of restricted stock units for fiscal year 2021 computed in accordance with FASB ASC Topic 718. |
As of December 31, 2021, Mr. Lusk has 10,000 outstanding vested stock options and 627 unvested restricted stock awards. In addition, as of December 31, 2021, 28,904 vested RSUs issued to Mr. Lusk remain outstanding due to the deferred payment provisions set forth in these RSU awards. No other equity awards are outstanding as of December 31, 2021 for the remaining non-employee directors.
EQUITY COMPENSATION PLAN INFORMATIONNOTE ABOUT FORWARD-LOOKING STATEMENTS
The following table sets forth information concerning our equity compensation plans as of December 31, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Stock Options (a)(1) | | Weighted-Average Exercise Price of Outstanding Stock Options (b) | | Number of Securities to be Issued Upon Vesting of Outstanding Restricted Stock Units (*) (c) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in columns (a) & (c))(1) |
| Equity compensation plans approved by security holders | | 407,500 | | | $ | 7.57 | | | — | | | 2,513,500 | |
___________________
(*) As of December 31, 2021, 28,904 vested RSUs remain outstanding under the Company’s 2014 Equity Incentive Plan, as shares of common stock have not yet been delivered for these units in accordance with the terms of the RSUs.
(1) In March 2022, 150,000 unvested stock options were forfeited and added back into the pool of securities available for future issuance.
TRANSACTIONS WITH RELATED PERSONS
Other than compensation arrangements for our directors and named executive officers, which are described elsewhereThis proxy statement contains forward-looking statements. All statements contained in this proxy statement there were no transactions since January 1, 2020other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 21, 2023. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we were a partymay make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this proxy statement may not occur and actual results could differ materially and adversely from those anticipated or will be a party,implied in which:the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
•the amounts involved exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years; and
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.
Policy on Future Related Party Transactions
Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company in accordance with the Company’s written Code of Business Conduct and Ethics.
HEDGING POLICY
We have adopted an Insider Trading Policy that prohibits all of our directors, officers and employees, as well as any other person having access or potential access to material information, from entering into hedging or monetization transactions or similar arrangements with respect to the Company’s securities, short sales, and puts, calls or other derivative securities on the Company’s securities, unless advance approval is obtained from the Company’s Chief Financial Officer.
CODE OF CONDUCT AND ETHICS
We have adopted a code of conduct and ethics, as amended effective October 12, 2015, that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. The text of the code of conduct and ethics (as amended) is posted on our website at www.oblong.com/company/investor-relations and will be made available to stockholders without charge, upon request, in writing to the Corporate Secretary at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller or person performing similar functions will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, unless website posting of such amendments or waivers is then permitted by the rules of the national securities exchange on which the Company trades.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
Any stockholder who intends to present a proposal for inclusion in our proxy materials for the Company’s 2023 annual meeting of stockholders must deliver the proposal to the Corporate Secretary of Oblong, Inc. at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433, no later than July 31, 2023.
In addition, our bylaws provide that, in order for a stockholder to timely propose business for consideration at our next annual meeting of stockholders or nominate a person for election to our Board of Directors at our next annual meeting of stockholders, the stockholder must give written notice to our Corporate Secretary at our principal executive offices between October 1, 2023, which is 90 days prior to the anniversary of our 2022 annual meeting of stockholders, and October 31, 2023, which is 60 days prior to such anniversary. In the event that our next annual meeting of stockholders is called for a date that is not within 30 days before or after December 30, 2023, notice by the stockholder in order to be timely must be received not later than the close of business on the 10th10th day following the day on which notice of our next annual meeting of stockholders is mailed or public disclosure of our next annual meeting of stockholders is made, whichever occurs first.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public through the internet at the SEC’s web site at www.sec.gov.
The SEC allows us to incorporate by reference into this Proxy Statement, which means that we can disclose important information to you by referring you to other documents that we filed separately
with the SEC. You should consider the incorporated information as if we reproduced it in this Proxy Statement, except for any information directly superseded by information contained in this Proxy Statement.
We incorporate by reference into this Proxy Statement the following financial statements and other information, which contain important information about us and our business and financial results:
•The financial statements, management’s discussion and analysis of financial condition and results of operations and changes in and disagreements with accountants on accounting and financial disclosure contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 21, 2023.
This document also incorporates by reference the Securities Purchase Agreement dated March 30, 2023, Form of Certificate of Designations of the Series F Preferred Stock, the Form of Warrant to Purchase Common Stock and the Form of Warrant to Purchase Series F Preferred Stock, each filed with the Current Report on Form 8-K on April 3, 2023.
The Company will amend this Proxy Statement to include or incorporate by reference any additional documents that the Company may file with the Securities and Exchange Commission under Section 13(a), 13(e), 14, or 15(d) of the Exchange Act after the date of this document to the extent required to fulfill our disclosure obligations under the Exchange Act.
We will mail without charge, upon written request, a copy of this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 21, 2023, including the financial statements and list of exhibits, and any exhibit specifically requested. Requests should be sent to:
OBLONG, INC
25587 Conifer Road, Suite 105-231,
Conifer, Colorado 80433
Attention: Corporate Secretary
303-640-3838
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
The SEC previously adopted a rule concerning the delivery of annual disclosure documents. The rule allows us or brokers holding our shares on your behalf to send a single set of our annual report and proxy statement to any household at which two or more of our stockholders reside, if either we or the brokers believe that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both stockholders and us. It reduces the volume of duplicate information received by you and helps to reduce our expenses. The rule applies to our annual reports, proxy statements and information statements. Once stockholders receive notice from their brokers or from us that communications to their addresses will be “householded,” the practice will continue until stockholders are otherwise notified or until they revoke their consent to the practice. Each stockholder will continue to receive a separate proxy card or voting instruction card.
Those stockholders who either (i) do not wish to participate in “householding” and would like to receive their own sets of our annual disclosure documents in future years or (ii) who share an address with
another one of our stockholders and who would like to receive only a single set of our annual disclosure documents should follow the instructions described below:
•Stockholders whose shares are registered in their own name should contact our transfer agent, American Stock Transfer & Trust Company, LLC, and inform them of their request by calling them at 1-800-937-5449 or writing them at 6201 15th15th Avenue, 2nd Floor, Brooklyn, NY 11219.
•Stockholders whose shares are held by a broker or other nominee should contact such broker or other nominee directly and inform them of their request. Stockholders should be sure to include their name, the name of their brokerage firm and their account number.
We will promptly deliver separate copies of our proxy statementProxy Statement and annual report at the request of any stockholder who is in a household that participates in the householding of the Company’s proxy materials. You may call the Corporate Secretary at 303-640-3838 or send your request to the Corporate Secretary at 25587 Conifer Road, Suite 105-231,105-23 Conifer, Colorado 80433.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public through the internet at the SEC’s web site at www.sec.gov.
We will mail without charge, upon written request, a copy of our Annual Report on Form 10-K for the year ended December 31, 2021, including the financial statements and list of exhibits, and any exhibit specifically requested. Requests should be sent to:
OBLONG, INC.
25587 Conifer Road, Suite 105-231,
Conifer, Colorado 80433
Attention: Corporate Secretary
303-640-3838
OTHER MATTERS
The Board of Directors knows of no other business to be presented for action at the AnnualSpecial Meeting. If any matters do come before the meeting on which action can properly be taken, the persons named in the enclosed proxy will have the discretion to vote such matters in accordance with their judgment.
APPENDIX A - FORM OF AMENDMENT TO THE COMPANY CHARTER
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
OBLONG, INC.
Oblong, Inc. (the “Corporation”), a corporation organized and existing under, and by virtue of, the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that:
FIRST: The name of the Corporation is Oblong, Inc.
SECOND: The original Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware (the “Delaware Secretary”) on November 4, 1996. The Certificate of Incorporation was amended by that certain Agreement and Plan of Merger dated as of November 27, 1996, and Certificate of Amendment filed with the Delaware Secretary on May 18, 2000, and subsequently amended and restated in its entirety by the Amended and Restated Certificate of Incorporation filed with the Delaware Secretary on May 18, 2000 (such certificate, the “A&R Certificate of Incorporation”). The A&R Certificate of Incorporation was subsequently amended by the Certificate of Amendment, filed with the Delaware Secretary on May 18, 2000, Certificate of Amendment, filed with the Delaware Secretary on June 22, 2001, Certificate of Amendment, filed with the Delaware Secretary on September 24, 2003, Certificate of Amendment, filed with the Delaware Secretary on August 22, 2007, Certificate of Amendment, filed with the Delaware Secretary on June 2, 2009, Certificate of Amendment, filed with the Delaware Secretary on January 10, 2011, and effective as of January 14, 2011, Certificate of Amendment, filed with the Delaware Secretary on April 17, 2019, and Certificate of Amendment, filed with the Delaware Secretary on March 4, 2020, and effective as of March 6, 2020 (the A&R Certificate of Incorporation, as amended to date, the “Amended Certificate”).
THIRD: That at a meeting of the Board of Directors of the Corporation duly called and held on [_____], 2022, resolutions were duly adopted setting forth a proposed amendment (the “Amendment”) of the Amended Certificate, declaring said amendment to be advisable. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Amended Certificate be amended by changing Article IV thereof to insert the following language at the end of such Article:
“Upon the filing and effectiveness (the “Effective Time”), pursuant to the Delaware General Corporation Law, of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each [__] ([__]) shares of Common Stock either issued and outstanding or held by the Corporation in treasury stock immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) fully paid and nonassessable share of Common Stock (the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. In lieu of any fractional share of Common Stock to which a stockholder would otherwise be entitled in connection with the Reverse Stock Split (taking into consideration all shares of Common Stock owned by such stockholder), the Corporation will issue that number of shares of Common Stock resulting from the Reverse Stock Split as rounded up to the nearest whole share upon the submission of a transmission letter by a stockholder holding the shares in book-entry form and, where shares are held in certificated form, upon the surrender of the stockholder’s Old Certificates (as defined below). Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”), shall thereafter represent that number of shares of Common Stock into which
the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above.
The par value per share of the Corporation’s capital stock and the total number of shares of all classes of capital stock that the Corporation is authorized to issue pursuant to this Article IV shall, in each case, not be affected by the Reverse Stock Split.”
No other change to the Certificate of Incorporation is hereby made, including, without limitation, any other change to Article IV.
FOURTH: That, pursuant to a majority action by the Corporation’s Stockholders in accordance with Section 228 of the DGCL, the holders of the necessary number of shares of the Corporation’s outstanding capital stock as required by statute approved the Amendment.
FIFTH: That said Amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL.
SIXTH: This Certificate of Amendment shall be effective as of [______] at 5:00 P.M. Eastern Standard Time.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its authorized officer this [____________].
Name: David Clark
Title: Authorized Officer
| | | | | |
OBLONG, INC. 25587 CONIFER ROAD, SUITE 105-231 CONIFER, COLORADO 80433 | VOTE BY INTERNET - www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on December 29, 2022.May 17, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on December 29, 2022.May 17, 2023. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your completed and signed proxy card must be received by December 29, 2022.May 17, 2023. |
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| | | | | | | | | | | |
| | | KEEP THIS PORTION FOR YOUR RECORDS |
| | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OBLONG, INC. |
The Board of Directors recommends you vote FOR the following:
1.Election of Directors
Nominees:
01) Jason Adelman 04) Matthew Blumberg
02) Peter Holst 05) Deborah Meredith
03) James Lusk
| For
All
☐ | Withhold
All
☐ | For All
Except
☐ | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) you wish to withhold on the line below.
| |
The Board of Directors recommends you vote “FOR” Proposal No. 2.1. | | For | Against | Abstain |
2. Ratification1. Issuance of the appointment of EisnerAmper LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022.securities in accordance with NASDAQ Rule 5635(d). | ☐ | ☐ | ☐ |
The Board of Directors recommends you vote “FOR” Proposal No. 3.2 . | For | Against | Abstain |
3. Approval of an amendment to Article FOURTH2. Adjournment of the Company's Amended & Restated CertificateSpecial Meeting to a later date or dates, if necessary, to permit further solicitation and vote of Incorporation to effect a reverse stock splitproxies if, based upon the tabulated vote at the time of the Company's issued and outstandingSpecial Meeting, there are insufficient shares of common Stock byrepresented to constitute a ratio of 1-for-5, 1-for-10,quorum or 1-for-15.to approve the issuance proposal. | ☐ | ☐ | ☐ |
The Board of Directors recommends you vote “FOR” Proposal No. 4. | For | Against | Abstain |
4. Approve, on an advisory and non-binding basis, executive compensation as described in this proxy statement. | ☐ | ☐ | ☐ |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
|
| | | |
| | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting:
The Proxy Statement and 20212022 Annual Report are available at www.proxyvote.com.
| | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | |
| | OBLONG, INC. | | |
| | AnnualSpecial Meeting of Stockholders | | |
| | December May 18, 2023 11:30 2022 9:00 AM MSTMT | | |
| | This proxy is solicited by the Board of Directors | | |
| | | | | |
| The stockholder(s) hereby appoint(s) Peter Holst and David Clark, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of OBLONG, INC. that the stockholder(s) is/are entitled to vote at the AnnualSpecial Meeting of Stockholders to be held at 9:0011:30 AM MSTMT on December 30, 2022,May 18, 2023, at the offices of Arnold & Porter Kaye Scholer LLP, located at 1144 Fifteenth Street, Suite 3100, Denver, Colorado 80202. | |
| | | | | |
| This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations and in favor of the election of each of the director nominees. | |
| | | | | |
| | | | | |
| | Continued and to be signed on reverse side | | |
| | | | | |