PROPOSAL 1ELECTIONAN AMENDMENT TO THE COMPANY’S ARTICLES OF
DIRECTORSINCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK BY TWO HUNDRED MILLION SHARES TO EIGHT HUNDRED MILION SHARES OF COMMON STOCK
The Board currently consistshas approved an amendment to our Articles of six directors,Incorporation to increase the number of authorized shares of common stock to 800 million shares from 600 million shares. If approved, the amendment would delete the text of the third paragraph thereof referring to the number of shares with par value in its entirety and by adding, in lieu thereof, the following text:
“The total number of shares which the Corporation is authorized to issue is 805,000,000 shares. 800,000,000 shares shall be Common Stock, each having a par value of whom are elected annually. Each director$0.001. 5,000,000 shares shall be Preferred Stock, each having a par value of $0.001.”
On December [•], 2020, the record date, we had 467,194,621 shares of common stock issued and outstanding and 132,805,379 shares of common stock that were authorized but unissued. On December [•], 2020, we had reserved 252,403,169 shares for future issuance, consisting of (i) 157,106,736 shares of common stock potentially issuable upon exercise of outstanding warrants, (ii) 32,618,385 shares of Common Stock potentially issuable upon exercise of outstanding stock options and (iii) 62,678,048 shares of Common Stock potentially issuable upon the conversion of outstanding convertible notes. Accordingly, we need to increase our authorized shares of common stock in order to effect the conversion of all such convertible securities.
The Board believes that the availability of additional authorized shares of common stock will hold office untilprovide the expirationCompany with additional flexibility to issue common stock for a variety of their term and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal. Vacancies ongeneral corporate purposes as the Board may determine to be filled by a majoritydesirable including, without limitation, stock splits (including splits effected through the declaration of stock dividends), raising capital, future financings, investment opportunities, licensing agreements, acquisitions or other distributions. The Company currently does not have any definitive plans, arrangements or understandings with respect to the issuance of the remaining directors, although if such majority is less than a quorum, then the vacancy may be filledadditional shares of common stock authorized by the stockholders. A director electedproposed amendment to the Articles of Incorporation.
The proposed amendment to increase the authorized number of shares of common stock could, under certain circumstances, have an anti-takeover effect or delay or prevent a change in control of the Company by providing the Company the capability to engage in actions that would be dilutive to a potential acquiror, to pursue alternative transactions, or to otherwise increase the potential cost to acquire control of the Company. Thus, while the Company currently has no intent to employ the additional unissued authorized shares as an anti-takeover device, the proposed amendment may have the effect of discouraging future unsolicited takeover attempts. The Board oris not aware of any such attempt to take control of the Company, and would act in the best interest of stockholders to fill a vacancy, including vacancies createdif any attempt was made. The proposed amendment has been prompted by anbusiness and financial considerations.
The proposed increase in the number of directors, shall serve for the remainderauthorized shares of the full termCompany's common stock will not change the number of that class and untilshares of common stock outstanding, nor will it have any immediate dilutive effect or change the director’s successor is duly elected and qualified.
The brief biographies below include information regarding the specific and particular experience, qualifications, attributes or skillsrights of current holders of the nominees for director.
Nominees for Director
The six nominees listed below are currently directorsCompany's common stock. However, the issuance of additional shares of common stock authorized by this amendment to the Articles of Incorporation may occur at times or under circumstances as to have a dilutive effect on earnings per share, book value per share or the percentage voting or ownership interest of the Company. Each director was recommendedpresent holders of the Company's common stock.
Once the proposed amendment is approved, no further action by the stockholders would be necessary prior to the Nominating and Corporate Governance Committee as a resultissuance of professional relationships, except for Mr. Richardson, who was deputizedadditional shares of common stock unless required by stockholder Prides Capital Partners LLC to serve as a director. The Board has recommended thatlaw or the rules of any stock exchange or national securities association on which the common stock is then listed or quoted. Under the proposed amendment, each of the six nominees be electednewly authorized shares of common stock will have the same rights and privileges as directors at the Annual Meeting, with terms ending at our 2021 annual meeting. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve if elected as a director.
Vote Required
The nominees receiving the largest number of “For” votes cast will be elected.
Proxies submitted to the Company cannot be voted at the Annual Meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the timecurrently authorized common stock. Adoption of the Annual Meeting,proposed amendment will not affect the persons named as proxies may vote for a substitute nominee designated by the Board. Alternatively, the Board may reduce the size of our board of directors.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” ELECTION OF
EACH OF THE SIX NOMINATED DIRECTORS.
INFORMATION REGARDING OUR NOMINEES
The following table sets forth information asrights of the latest practicable date with respect to our nominees for election to our Board.
Kevin A. Richardson, II | | | 52 | | | 2009 |
John F. Nemelka | | | 54 | | | 2009 |
Alan L. Rubino | | | 65 | | | 2013 |
A. Michael Stolarski | | | 49 | | | 2016 |
Maj-Britt Kaltoft | | | 57 | | | 2017 |
Thomas Price | | | 65 | | | 2020 |
Kevin A. Richardson, II joined the Company as chairmanholders of the board of directors in October of 2009 and joined SANUWAVE, Inc. as chairman of the board of directors in August of 2005. In November 2012, upon the resignation of the Company’s former President and Chief Executive Officer, Christopher M. Cashman, Mr. Richardson assumed the role of Active Chief Executive Officer, in addition to remaining Chairman of the Board, through the hiring of Mr. Chiarelli in February 2013. In April 2014, Mr. Richardson assumed the role of Co-Chief Executive Officer. When Mr. Chiarelli departed the Company in 2014, Mr. Richardson again assumed the role as Acting Chief Executive Officer. In November 2018, Mr. Richardson was appointed as Chief Executive Officer. Mr. Richardson brings to our board of directors a broad array of financial knowledge for healthcare and other industries. Since 2004, Mr. Richardson served as managing partner of Prides Capital LLC, an investment management firm, until its liquidation in September 2015.