PROPOSAL 3
AUTHORIZED SHARES PROPOSAL
General
The Board has unanimously approved an amendment (the “Authorized Shares Proposal”) to the Charter to increase the number of authorized shares of capital stock from 1,208,000,000 to 1,426,000000, consisting of 1,416,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”), and 10,000,000 shares of preferred stock, par value $0.0001 per share. The Authorized Shares Proposal only increases the number of authorized shares of Common Stock and will not change the number of authorized shares of preferred stock.
The additional shares of Common Stock authorized for issuance by the Authorized Shares Proposal would be a part of the existing class of Common Stock and, if and when issued, would have the same rights and privileges as the Common Stock presently issued and outstanding. The Company’s stockholders do not have preemptive rights with respect to its Common Stock and accordingly, should the Board elect to issue additional shares of common stock, existing stockholders would not have any preferential rights to purchase the shares.
Provided the stockholders approve the Authorized Shares Proposal, the increased number of shares would be authorized for issuance but would remain unissued until such time as the Board approves a specific issuance of such shares. Other than future issuances under the Company’s equity compensation plans, the Company currently has no plans or arrangements to issue the additional authorized shares of Common Stock that will result in the event that the Company’s stockholders approve, and the Company implements, the Authorized Shares Proposal.
The description of the Authorized Shares Proposal amendment to the Charter is qualified in its entirety by reference to the text of the proposed revisions, which are attached as Appendix A. Additions are indicated by underlining, and deletions are indicated by strike-throughs. However, the text of the Authorized Shares Proposal is subject to revision to include such changes as may be required by the Secretary of State of the State of Delaware and as deemed necessary and advisable to effect the Authorized Shares Proposal. The Board reserves its right to elect not to proceed with and abandon the Authorized Shares Proposal if it determines, in its sole discretion at any time, that this proposal is no longer in the best interests of our stockholders.
If we fail to obtain stockholder approval of this proposal at the Annual Meeting, we intend to continue to seek to obtain stockholder approval at each subsequent annual meeting of stockholders and/or special meeting of stockholders until such approval has been obtained, and we will incur the costs associated therewith.
The Authorized Shares Proposal amendment to the Charter would become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we would file promptly following the Annual Meeting if our stockholders approve the Authorized Shares Proposal.
Background
The Charter currently authorizes the issuance of up to 1,208,000,000 shares of capital stock, of which (a) 1,198,000,000 shares were classified as Common Stock and (b) 10,000,000 shares were classified as preferred stock.
As of the close of business on September 14, 2024, there were approximately 875,444,828 shares of Common Stock issued and outstanding, no preferred stock issued and outstanding, and 105,606,883 shares of Common Stock reserved for issuance pursuant to outstanding option awards and other equity compensation awards, meaning that we presently have 226,948,289 authorized shares available for issuance.
Purpose of the Proposal
The Board believes it is in the best interest of the Company and its stockholders to have a greater number of authorized shares of Common Stock to provide the Company with flexibility to issue shares of common stock for any proper corporate purpose, which could include strategic investments, strategic partnership arrangements, awards or grants under employee equity incentive plans, equity based financing to support the execution of the Company’s business strategy, or other general purposes.
