effectsadjustments to the conversion prices of certain convertible securities, as described below, the reverse stock based compensationsplit will not affect any stockholder’s percentage ownership or proportionate voting power.
All shares of Series B Preferred Stock that are not present in person or by proxy at the Annual Meeting as of immediately prior to the opening of the polls at the Annual Meeting will be automatically redeemed in the Initial Redemption. Any outstanding shares of Series B Preferred Stock that were not redeemed pursuant to the Initial Redemption will be redeemed in whole, but not in part, (i) if and when ordered by our Board or (ii) automatically upon the award of bonuses underapproval by the Company’s bonus plans; (x)stockholders of the Reverse Stock Split Certificate of Amendment effecting the Reverse Stock Split. Please refer to exclude costs incurredthe discussion in connection with potential acquisitions or divestitures thatthe Questions and Answers About the Annual Meeting section under “Who is entitled to vote?”, “What are the voting rights of the stockholders?” and “What vote is required to approve each item of business?” for a description of the voting power of the Series B Preferred Stock.
Based on the Company’s capitalization as of March 31, 2023, the principal effect of the reverse stock split (at a ratio between 1-for-10 and 1-for-80), not taking into account the treatment of fractional shares described under “—Procedure for Effecting the Reverse Stock Split—Treatment of Fractional Shares” below, would be expensed under U.S. GAAP; and (xi) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under U.S. GAAP.that:
Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to Common Stock. The plan administrator will set the number of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards.
Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid to any non-employee director with respect to any calendar year, including awards granted and cash fees paid by the Company to such non-employee director, will not exceed $750,000 in total value or, in the event such non-employee director is first appointed or elected to the Board during such calendar year, $1,000,000 in total value.
Changes to Capital Structure
In the event there is a specified type of change in the Company’s capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments willCommon Stock issued and outstanding would be made to: (1) the classreduced from 28,213,378 shares to between approximately 352,667 shares and maximum2,821,337 shares;
the number of shares reserved for issuance under the 2022 Plan; (2) the class and maximum number of shares by which the share reserve may increase automatically each year; (3) the class and maximum number of shares that may be issued on the exercise of ISOs; and (4) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.
Corporate Transactions
The following applies to stock awards under the 2022 Plan in the event of a corporate transaction (as defined in the 2022 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with the Company or one of its affiliates or unless otherwise expressly provided by the plan administrator at the time of grant.
In the event of a corporate transaction, any stock awards outstanding under the 2022 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by the Company with respect to the stock award may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of such stock awards will be accelerated in full to a date prior to the effective time of the corporate transaction (contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by the Company with respect to such stock awards will lapse (contingent upon the effectiveness of the corporate transaction), and (ii) any such stock awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction, except that any reacquisition or repurchase rights held by the Company with respect to such stock awards will not terminate and may continue to be exercised notwithstanding the corporate transaction.
In the event a stock award will terminate if not exercised prior to the effective time of a corporate transaction, the plan administrator may provide, in its sole discretion, that the holder of such stock award may not exercise such stock award but instead will receive a payment equal in value to the excess (if any) of (i) value of the property that Participant would have receivedCompany’s Common Stock issuable upon the exercise of outstanding stock options would be reduced from 11,122,299 to between approximately 139,028 shares and 1,112,229 shares (and the award, over (ii) anyrespective exercise prices of the options would increase by a factor equal to the inverse of the split ratio);
the number of shares of the Company’s Common Stock issuable upon the exercise of outstanding warrants would be reduced from 36,593,924 to between approximately 457,424 shares and 3,659,392 shares (and the respective exercise prices of the warrants would increase by a factor equal to the inverse of the split ratio);
the number of shares of the Company’s Common Stock issuable upon the settlement of outstanding restricted stock units would be reduced from 2,016 to between approximately 25 shares and 201 shares;
the aggregate number of shares of the Company’s Common Stock reserved for issuance, in connection with future awards under the Company’s 2022 Equity Incentive Plan and 2021 Inducement Plan would be reduced from 2,669,478 to between approximately 33,368 shares and 266,947 shares;
the number of shares of the Company’s authorized Common Stock would remain unchanged at 150,000,000 shares;
the 10,000,000 shares of the Company’s authorized preferred stock would remain unchanged; and
the number of shares of the Company’s Common Stock that are authorized, but unissued and unreserved, would increase from 71,398,905 to between approximately 142,139,894 shares and 149,017,488 shares; and the par value of the Company’s Common Stock and preferred stock would remain unchanged at $0.001 per share, exercise price payableand, as a result, the stated capital attributable to Common Stock on the Company’s balance sheet would be reduced proportionately based on the reverse stock split ratio, the additional paid-in capital account would be credited with the amount by such holder, if applicable. In addition, any escrow, holdback, earn outwhich the stated capital is reduced, and the per-share net income or similar provisions inloss and net book value of the definitive agreement for the corporate transaction may apply to such payment to the same extent and in the same manner as such provisions apply to the holdersCompany’s Common Stock would be restated because there would be fewer shares of Common Stock.
Change in Control. Awards granted under the 2022 Plan may be subject to acceleration of vesting and exercisability upon or after a change in control (as defined in the 2022 Plan) as may be provided in the applicable stock award agreement or in any other written agreement between the Company or any affiliate and the participant, but in the absence of such provision, no such acceleration will automatically occur.
Term
Awards under the 2022 Plan may not be made after May 8, 2032, but awards granted prior to such date may extend beyond that date.Stock outstanding.