Widepoint Corp PRE 14A, filed Jun 19, 2020
Widepoint Corp (WYY)
PRE 14A
2020-06-19
For: 2020-06-19
View Original
Added on
October 17, 2026
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No.______)
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Filed
by the Registrant ☒
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Filed
by a Party other than the Registrant ☐
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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☐
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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WidePoint Corporation
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(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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☐ 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.
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PRELIMINARY PROXY STATEMENT, SUBJECT TO COMPLETION, DATED JUNE 19,
2020
WIDEPOINT CORPORATION
11250 Waples Mill Road, South Tower, Suite 210
Fairfax, Virginia 22030
[July 8], 2020
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the
Stockholders of WidePoint Corporation:
We
hereby notify you that a Special Meeting of Stockholders (the
“Special Meeting”) of WidePoint Corporation, a Delaware
corporation, will be held at [10:00
a.m.], EST, on [Monday], [August 24], 2020. Due to the public
health impact of the coronavirus outbreak (i.e., COVID-19) and to
support the health and well-being of our stockholders and other
stakeholders, the Special Meeting will be a completely virtual
meeting of stockholders, which will be conducted solely online via
live webcast. You will be able to participate in the Special
Meeting online and vote your shares electronically prior to and
during the meeting by visiting:
[www.virtualshareholdermeeting.com/WYY2020]. You must enter
the control number found on your proxy card, voting instruction
form or notice you previously received. There is no physical location for the Special
Meeting. The accompanying notice of meeting and proxy statement
describe the following matters described in the accompanying proxy
statement:
(1)
to
approve an amendment to our amended and restated certificate of
incorporation, as amended (the “Restated Certificate of
Incorporation”), to effect a reverse stock split of our
issued and outstanding shares of common stock, $0.001 par value per
share, at a ratio to be determined in the discretion of the Board
of Directors within a range of one (1) share of common stock for
every five (5) to fifteen (15) shares of common stock (the
“Reverse Stock Split”), such amendment to be effected
after stockholder approval thereof only in the event the Board of
Directors still deems it advisable;
(2)
to
approve an amendment to the Restated Certificate of Incorporation,
to decrease the number of authorized shares of common stock to
30,000,000 (the “Authorized Common Stock Decrease”),
such amendment contingent upon the Reverse Stock Split being
approved and effected;
(3)
to
approve an adjournment of the Special Meeting, if the Board of
Directors determines it to be necessary or appropriate, if a quorum
is present, to solicit additional proxies if there are not
sufficient votes in favor of any of Proposal 1–the Reverse
Stock Split, and Proposal 2–the Authorized Common Stock
Decrease; and
(4)
to
transact such other business as may properly come before the
meeting or any adjournments or postponements of the
meeting.
Stockholders of record at the close of business
on [July 6], 2020
are entitled to receive notice of, and
to vote at, the Special Meeting.
YOUR VOTE IS IMPORTANT. We
encourage you to read the proxy statement and vote your shares as
soon as possible. We ask that you vote your shares via the Internet
or by telephone, as instructed on the Notice of Internet
Availability of Proxy Materials or as instructed on the
accompanying proxy. If you received or requested a copy of the
proxy card by mail, you may submit your vote by completing,
signing, dating and returning the proxy card by mail. You may also
participate in the Special Meeting online and vote your shares
electronically. We encourage you to vote via the Internet or by
telephone. These methods save us significant postage and processing
charges. Please vote your shares as soon as
possible.
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By
order of the Board of Directors,
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Jin Kang
Chief Executive Officer
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[July 8], 2020
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PRELIMINARY PROXY STATEMENT, SUBJECT TO COMPLETION, DATED JUNE 19,
2020
WIDEPOINT CORPORATION
11250 Waples Mill Road, South Tower, Suite 210
Fairfax, Virginia 22030
PROXY STATEMENT
This Proxy Statement is furnished in connection
with the solicitation by the Board of Directors of WidePoint
Corporation, a Delaware corporation (referred to herein as
“WidePoint,” the “Company,”
“we” or “our”), of proxies of stockholders
to be voted at a Special Meeting of Stockholders to be held at
[10:00 a.m.], EST, on [Monday], [August 24], 2020. Due to the
public health impact of the coronavirus outbreak (i.e., COVID-19)
and to support the health and well-being of our stockholders and
other stakeholders, the Special Meeting will be a completely
virtual meeting of stockholders, which will be conducted solely
online via live webcast. You will be able to participate in the
Special Meeting online and vote your shares electronically prior to
and during the meeting by visiting:
[www.virtualshareholdermeeting.com/WYY2020]. You must enter
the control number found on your proxy card, voting instruction
form or notice you previously received. There is no physical location for the Special
Meeting. Any stockholder executing a proxy retains the right to
revoke it at any time prior to its being exercised by giving
written notice to the Secretary of the Company.
The
Board of Directors is soliciting votes (1) FOR the approval of an amendment to our
amended and restated certificate of incorporation, as amended (the
“Restated Certificate of Incorporation”), to effect a
reverse stock split of our issued and outstanding shares of common
stock, at a ratio to be determined in the discretion of the Board
of Directors within a range of one (1) share of common stock for
every five (5) to fifteen (15) shares of common stock (the
“Reverse Stock Split”), such amendment to be effected
after stockholder approval thereof only in the event the Board of
Directors still deems it advisable; (2) FOR the approval of an amendment to the
Restated Certificate of Incorporation to decrease the number of
authorized shares of common stock from 110,000,000 to 30,000,000
(the “Authorized Common Stock Decrease”), such
amendment contingent upon the Reverse Stock Split being approved
and effected; and (3) FOR
approval to adjourn the Special Meeting, if the Board determines it
to be necessary or appropriate, if a quorum is present, to solicit
additional proxies if there are not sufficient votes in favor of
any of the Reverse Stock Split and the Authorized Common Stock
Decrease (the “Adjournment”).
This
Proxy Statement and the accompanying proxy are first being sent to
stockholders of the Company on or about [July 8],
2020.
NOTICE OF ELECTRONIC AVAILABILITY OF PROXY MATERIALS
In
accordance with regulations adopted by the Securities and Exchange
Commission, instead of mailing a printed copy of our proxy
materials, including our annual report to stockholders, to each
stockholder of record, we may now furnish these materials by mail
or e-mail. On or about [July 8], 2020, we mailed to our
stockholders who have not previously requested to receive these
materials by mail or e-mail a Notice of Internet Availability of
Proxy Materials containing instructions on how to access this proxy
statement and our annual report and to vote online. The Notice
instructs you as to how you may access and review all of the
important information contained in the proxy materials. The Notice
also instructs you as to how you may submit your proxy on the
Internet or by telephone. If you received the Notice by mail, you
will not automatically receive a printed copy of our proxy
materials or annual report unless you follow the instructions for
requesting these materials included in the Notice.
3
VOTING PROCEDURES AND SECURITIES
Your Vote is Very Important
Whether
or not you plan to attend the meeting, please take the time to vote
your shares as soon as possible. You may submit your vote by
completing, signing, dating and returning the proxy card by mail.
We encourage you to vote via the Internet or by telephone. These
methods save us significant postage and processing
charges.
Vote Required, Abstentions and Broker Non-Votes
Shares
of common stock represented by proxy will be voted according to the
instructions, if any, given in the proxy. Unless otherwise
instructed, the person or persons named in the proxy will vote (1)
FOR the approval of the
Reverse Stock Split; (2) FOR
the approval of the Authorized Common Stock Decrease; and (3)
FOR the Adjournment. The
Board of Directors has designated Jin Kang and Jason Holloway, and
each or any of them, as proxies to vote the shares of common stock
solicited on its behalf.
Votes
cast by proxy or in person at the Special Meeting will be tabulated
by an inspector of election appointed by the Company for the
meeting. A quorum of stockholders is necessary to hold a valid
meeting. A quorum will be present if at least a majority of the
outstanding shares of common stock of the Company entitled to vote
are present at the Special Meeting in person or by proxy.
Abstentions are treated as present for purposes of determining
whether a quorum exists. Your shares will be counted towards the
quorum only if you submit a valid proxy (or one is submitted on
your behalf by your broker, bank or other nominee) or if you vote
at the Special Meeting. Broker non-votes (which result when your
shares are held in “street name”, and you do not tell
the nominee how to vote your shares and the nominee does not have
discretion to vote such shares or declines to exercise discretion)
are treated as present for purposes of determining whether a quorum
is present at the meeting.
To
be approved, Proposal 1, which relates to the approval of the
Reverse Stock Split within a range of one (1) share of common stock
for every five (5) to fifteen (15) shares of common stock, must
receive FOR votes from the holders of a majority of the issued and
outstanding shares of common stock as of the record date.
Accordingly, abstentions and broker non-votes with respect this
proposal will have the same effect as voting AGAINST this proposal
(although no broker non-votes are expected to exist in connection
with Proposal 1 since this is a routine matter for which brokers
have discretion to vote if beneficial owners do not provide voting
instructions).
To
be approved, Proposal 2, which relates to the approval of the
Authorized Common Stock Decrease to decrease the number of
authorized shares of common stock from 110,000,000 to 30,000,000,
must receive FOR votes from the holders of a majority of the issued
and outstanding shares of common stock as of the record date.
Accordingly, abstentions and broker non-votes with respect this
proposal will have the same effect as voting AGAINST this proposal
(although no broker non-votes are expected to exist in connection
with Proposal 2 since this is a routine matter for which brokers
have discretion to vote if beneficial owners do not provide voting
instructions).
To
be approved, Proposal 3, which relates to the approval of the
Adjournment of the Special Meeting, if the Board determines it to
be necessary or appropriate to solicit additional proxies if there
are insufficient votes in favor of the Reverse Stock Split and the
Authorized Common Stock Decrease, must receive FOR votes from the
holders of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote at the
Special Meeting. Abstentions will be included in the vote tally and
will have the same effect as a vote AGAINST and broker non-votes
will not affect the outcome of this proposal (although no broker
non-votes are expected to exist in connection with Proposal 3 since
this is a routine matter for which brokers have discretion to vote
if beneficial owners do not provide voting
instructions).
If
your shares are held in “street name” and you do not
indicate how you wish to vote, your broker is permitted to exercise
its discretion to vote your shares on certain “routine”
matters. The routine matters to be submitted to our stockholders at
the Special Meeting are Proposals 1 and 2 and 3.
We encourage you to vote FOR all three (3) proposals.
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The
cost of soliciting proxies will be borne by the Company. Certain of
our officers and other employees may, without compensation other
than their regular compensation, solicit proxies by further mailing
or personal conversations, or by telephone, facsimile or other
electronic means. We will also, upon request, reimburse brokers and
other persons holding stock in their names, or in the names of
nominees, for their reasonable out-of-pocket expenses for
forwarding proxy materials to the beneficial owners of our stock
and to obtain proxies.
Shares Outstanding
As of [July 6], 2020, the record date for
determining stockholders entitled to vote at the Special Meeting, a
total of [ ] shares of
common stock of the Company, par value $.001 per share, which is
the only class of voting securities of the Company, were issued and
outstanding. All holders of record of the common stock as of the
close of business on [July 6], 2020 are entitled to one vote for
each share held when voting at the Special Meeting, or any
adjournment thereof, upon the matters listed in the Notice of
Special Meeting. Cumulative voting is not
permitted.
Other Business
The
Board knows of no other matters to be presented for stockholder
action at the meeting. If other matters are properly brought before
the meeting, the persons named as proxies in the accompanying proxy
card intend to vote the shares represented by them in accordance
with their best judgment.
5
PROPOSAL ONE – REVERSE STOCK SPLIT
APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE ISSUED AND
OUTSTANDING SHARES OF COMMON STOCK AT A RATIO TO BE DETERMINED IN
THE DISCRETION OF THE BOARD OF DIRECTORS WITHIN A RANGE OF ONE (1)
SHARE OF COMMON STOCK FOR EVERY FIVE (5) TO FIFTEEN (15) SHARES OF
COMMON STOCK
General
The
Board of Directors has adopted, and is recommending that our
stockholders approve, a proposed amendment to our Restated
Certificate of Incorporation to effect a Reverse Stock Split of the
issued and outstanding shares of common stock. Such amendment will
be effected after stockholder approval thereof only in the event
the Board of Directors still deems it advisable. Holders of the
common stock are being asked to approve the proposal that Article
Four of our Restated Certificate of Incorporation be amended to
effect a Reverse Stock Split of the common stock at a ratio to be
determined in the discretion of the Board of Directors within the
range of one (1) share of common stock for every five (5) to
fifteen (15) shares of common stock and also to decide whether or
not to proceed to effect a Reverse Stock Split or instead to
abandon the proposed amendment altogether. Pursuant to the laws of
the State of Delaware, our state of incorporation, the Board of
Directors must adopt any amendment to our Restated Certificate of
Incorporation and submit the amendment to stockholders for their
approval. The form of proposed amendment to effect the Reverse
Stock Split is set forth in the certificate of amendment to our
Restated Certificate of Incorporation attached as Appendix A to this proxy
statement. If the Reverse Stock Split is approved by our
stockholders and if a certificate of amendment is filed with the
Secretary of State of the State of Delaware, the certificate of
amendment to the Restated Certificate of Incorporation will effect
the Reverse Stock Split by reducing the outstanding number of
shares of common stock by the ratio to be determined by the Board
of Directors. If the Board of Directors does not implement an
approved Reverse Stock Split prior to the one-year anniversary of
this meeting, the Board will seek stockholder approval before
implementing any Reverse Stock Split after that time. The Board of
Directors may abandon the proposed amendment to effect the Reverse
Stock Split at any time prior to its effectiveness, whether before
or after stockholder approval thereof.
By
approving this proposal, stockholders will approve the amendment to
our Restated Certificate of Incorporation pursuant to which any
whole number of outstanding shares, between and including five and
fifteen, would be combined into one share of common stock, and
authorize the Board of Directors to file a certificate of amendment
setting forth such amendment, as determined by the Board of
Directors in the manner described herein. If approved, the Board of
Directors may also elect not to effect any Reverse Stock Split and
consequently not to file any certificate of amendment to the
Restated Certificate of Incorporation. The Board of Directors
believes that stockholder approval of an amendment granting the
Board of Directors this discretion, rather than approval of a
specified exchange ratio, provides the Board of Directors with
maximum flexibility to react to then-current market conditions and,
therefore, is in the best interests of our Company and its
stockholders. The Board of Directors’ decision as to whether
and when to effect the Reverse Stock Split will be based on a
number of factors, including market conditions and existing and
expected trading prices for the common stock. Although our
stockholders may approve the Reverse Stock Split, we will not
effect the Reverse Stock Split if the Board of Directors does not
deem it to be in our best interest and the best interest of our
stockholders. The Reverse Stock Split, if authorized and if deemed
by the Board of Directors to be in our best interest and the best
interest of our stockholders, will be effected, if at all, at a
time that is not later than one year from the date of the Special
Meeting.
This
Proposal 1, the proposed approval of the Reverse Stock Split as set
forth in the certificate of amendment to our Restated Certificate
of Incorporation, will not change the number of authorized shares
of common stock or preferred stock, or the par value of common
stock or preferred stock; however effecting the Reverse Stock Split
will provide for additional shares of unissued authorized common
stock. If Proposal 2 (the Authorized Common Stock Decrease) is
approved and the Board of Directors determined to effect the
Authorized Common Stock Decrease and not abandon the Authorized
Common Stock Decrease, the authorized number of shares of common
stock will be decreased from 110,000,000 to 30,000,000. As of the
date of this proxy statement, our current authorized number of
shares of common stock is sufficient to satisfy all of our share
issuance obligations and current share plans and we do not have any
current plans, arrangements or understandings relating to the
issuance of the additional shares of authorized common stock that
will become available following the Reverse Stock
Split.
6
Purpose and Background of the Reverse Stock Split
The
Board of Directors believes that the current low per share market
price of the common stock has a negative effect on the
marketability of our existing shares. The Board of Directors
believes there are several reasons for this effect. First, certain
institutional investors have internal policies preventing the
purchase of low-priced stocks. Second, a variety of policies and
practices of broker-dealers discourage individual brokers within
those firms from dealing in low-priced stocks. Third, because the
brokers’ commissions on low-priced stocks generally represent
a higher percentage of the stock price than commissions on higher
priced stocks, the current share price of the common stock can
result in individual stockholders paying transaction costs
(commissions, markups or markdowns) that are a higher percentage of
their total share value than would be the case if the share price
of the common stock were substantially higher. This factor is also
believed to limit the willingness of some institutions to purchase
the common stock. The Board of Directors anticipates that a Reverse
Stock Split will result in a higher bid price for the common stock,
which may help to alleviate some of these problems.
We
expect that, if effected, a Reverse Stock Split of the common stock
will increase the market price of the common stock. However, the
effect of a Reverse Stock Split on the market price of the common
stock cannot be predicted with any certainty, and the history of
similar stock split combinations for companies in like
circumstances is varied. It is possible that the per share price of
the common stock after the Reverse Stock Split will not rise in
proportion to the reduction in the number of shares of the common
stock outstanding resulting from the Reverse Stock Split,
effectively reducing our market capitalization, and there can be no
assurance that the market price per post-reverse split share will
be for a sustained period of time. The market price of the common
stock may vary based on other factors that are unrelated to the
number of shares outstanding, including our future
performance.
PLEASE
NOTE THAT UNLESS SPECIFICALLY INDICATED TO THE CONTRARY, THE DATA
CONTAINED IN THIS PROXY STATEMENT, INCLUDING BUT NOT LIMITED TO
SHARE NUMBERS, CONVERSION PRICES AND EXERCISE PRICES OF OPTIONS,
DOES NOT REFLECT THE IMPACT OF THE REVERSE STOCK SPLIT THAT MAY BE
EFFECTUATED.
Board Discretion to Implement the Reverse Stock Split
If
Proposal No. 1 is approved by the stockholders and the Board
determines to effect the Reverse Stock Split, it will consider
certain factors in selecting the specific stock split ratio,
including prevailing market conditions and the trading price of the
common stock. Based in part on the price of the common stock on the
days leading up to the filing of the certificate of amendment to
the Restated Certificate of Incorporation effecting the Reverse
Stock Split, the Board of Directors will determine the ratio of the
Reverse Stock Split, in the range of 1:5 to 1:15.
Notwithstanding
approval of the Reverse Stock Split by the stockholders, the Board
of Directors may, in its sole discretion, abandon the proposed
amendment and determine prior to the effectiveness of any filing
with the Secretary of State of the State of Delaware not to effect
the Reverse Stock Split prior to the one year anniversary of the
Special Meeting of stockholders, as permitted under Section 242(c)
of the DGCL. If the Board fails to implement the amendment prior to
the one-year anniversary of this meeting of stockholders,
stockholder approval would again be required prior to implementing
any Reverse Stock Split.
Consequences if Stockholder Approval for Proposal Is Not
Obtained
If
stockholder approval for Proposal No. 1 is not obtained, we will
not be able to file a certificate of amendment to the Restated
Certificate of Incorporation to effect the Reverse Stock
Split.
Principal Effects of the Reverse Stock Split
If the
stockholders approve the proposal to authorize the Board of
Directors to implement the Reverse Stock Split and the Board of
Directors determines to implement the Reverse Stock Split, we will
publicly announce the selected ratio for the Reverse Stock Split
and file the certificate of amendment to amend the existing
provision of our Restated Certificate of Incorporation to effect
the Reverse Stock Split. The text of the form of proposed amendment
is set forth in the certificate of amendment to the Restated
Certificate of Incorporation is annexed to this proxy statement as
Appendix
A.
7
The
Reverse Stock Split will be effected simultaneously for all issued
and outstanding shares of common stock and the stock split ratio
will be the same for all issued and outstanding shares of common
stock. The Reverse Stock Split will affect all of our stockholders
uniformly and will not affect any stockholder's percentage
ownership interests in our Company or proportionate voting power,
except for minor adjustment due to the additional net share
fraction that will need to be issued as a result of the treatment
of fractional shares. No fractional shares will be issued in
connection with the Reverse Stock Split. Instead, the Company will
issue one full share of the post-Reverse Stock Split common stock
to any stockholder of record who would have been entitled to
receive a fractional share as a result of the process. After the
Reverse Stock Split, the shares of the common stock will have the
same voting rights and rights to dividends and distributions and
will be identical in all other respects to the common stock now
authorized, common stock issued pursuant to the Reverse Stock Split
will remain fully paid and non-assessable. The Reverse Stock Split
will not affect us continuing to be subject to the periodic
reporting requirements of the Exchange Act. The Reverse Stock Split
is not intended to be, and will not have the effect of, a
“going private transaction” covered by Rule 13e-3 under
the Exchange Act.
The
Reverse Stock Split may result in some stockholders owning
“odd-lots” of less than 100 shares of the common stock.
Brokerage commissions and other costs of transactions in odd-lots
are generally higher than the costs of transactions in
“round-lots” of even multiples of 100
shares.
Following the
effectiveness of any Reverse Stock Split approved by the
stockholders and implementation by the Board of Directors, current
stockholders will hold fewer shares of common stock, with such
number of shares dependent on the specific ratio for the Reverse
Stock Split. For example, if the Board approves of a 1-for-5
Reverse Stock Split, a stockholder owning a “round-lot”
of 100 shares of common stock prior to the Reverse Stock Split
would hold 20 shares of common stock following the Reverse Stock
Split. THE HIGHER THE REVERSE RATIO (1-FOR-10 BEING HIGHER THAN
1-FOR-5, FOR EXAMPLE), THE GREATER THE REDUCTION OF RELATED SHARES
EACH EXISTING STOCKHOLDER, POST REVERSE STOCK SPLIT, WILL
EXPERIENCE.
Risks Associated with the Reverse Stock Split
There
are risks associated with the Reverse Stock Split, including that
the Reverse Stock Split may not result in a sustained increase in
the per share price of our common stock. There is no assurance
that:
●
the
market price per share of our common stock after the Reverse Stock
Split will rise in proportion to the reduction in the number of
shares of our common stock outstanding before the Reverse Stock
Split;
●
the
Reverse Stock Split will result in a per share price that will
attract brokers and investors who do not trade in lower priced
stocks; and
●
the
liquidity of the common stock will increase.
Stockholders should
note that the effect of the Reverse Stock Split, if any, upon the
market price for our common stock cannot be accurately predicted.
In particular, we cannot assure you that prices for shares of our
common stock after the Reverse Stock Split will be five (5) to
fifteen (15) times, as applicable, the prices for shares of our
common stock immediately prior to the Reverse Stock Split.
Furthermore, even if the market price of our common stock does rise
following the Reverse Stock Split, we cannot assure you that the
market price of the common stock immediately after the proposed
Reverse Stock Split will be maintained for any period of time. Even
if an increased per-share price can be maintained, the Reverse
Stock Split may not achieve the desired results that have been
outlined above. Moreover, because some investors may view the
Reverse Stock Split negatively, we cannot assure you that the
Reverse Stock Split will not adversely impact the market price of
the common stock.
The
market price of the common stock will also be based on our
performance and other factors, some of which are unrelated to the
Reverse Stock Split or the number of shares outstanding. If the
Reverse Stock Split is effected and the market price of the common
stock declines, the percentage decline as an absolute number and as
a percentage of our overall market capitalization may be greater
than would occur in the absence of a Reverse Stock Split. The total
market capitalization of the common stock after implementation of
the Reverse Stock Split when and if implemented may also be lower
than the total market capitalization before the Reverse Stock
Split. Furthermore, the liquidity of the common stock could be
adversely affected by the reduced number of shares that would be
outstanding after the Reverse Stock Split.
8
We
believe that the Reverse Stock Split may result in greater
liquidity for our stockholders. However, it is also possible that
such liquidity could be adversely affected by the reduced number of
shares outstanding after the Reverse Stock Split, particularly if
the share price does not increase as a result of the Reverse Stock
Split.
Common Stock
After
the effective date of the Reverse Stock Split, each stockholder
will own fewer shares of the common stock. The following table sets
forth the approximate number of shares of the common stock that
would be outstanding immediately after the Reverse Stock Split
based on the current authorized number of shares of common stock at
various exchange ratios, based on 85,910,275 shares of common stock
actually outstanding as of June 17, 2020 (without giving effect to
any adjustments for fractional shares).
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Approximate
Shares of Common Stock
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Outstanding
After Reverse Stock Split
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Based on Current
Authorized
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Ratio of Reverse
Stock Split
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Number of
Shares
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None
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—
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1:5
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17,182,055
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1:10
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8,591,028
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1:15
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5,727,352
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Procedure for Effecting Reverse Stock Split and Exchange of Stock
Certificates, if Applicable
If the
certificate of amendment is approved by the stockholders, and if at
such time the Board of Directors still believes that a Reverse
Stock Split is in our best interests and the best interests of our
stockholders, the Board of Directors will determine the ratio,
within the range approved by stockholders, of the Reverse Stock
Split to be implemented and will publicly announce the selected
ratio for the Reverse Stock Split. We will file the certificate of
amendment with the Secretary of State of the State of Delaware at
such time as the Board of Directors has determined the appropriate
effective time for the Reverse Stock Split. The Board of Directors
may delay effecting the Reverse Stock Split without re-soliciting
stockholder approval. The Reverse Stock Split will become effective
on the effective date set forth in the certificate of amendment.
Beginning on the effective date of the Reverse Stock Split, each
certificate representing pre-split shares will be deemed for all
corporate purposes to evidence ownership of post-split
shares.
As soon
as practicable after the effective date of the Reverse Stock Split,
stockholders will be notified that the Reverse Stock Split has been
effected. If you hold shares of common stock in a book-entry form,
you will receive a transmittal letter from our transfer agent as
soon as practicable after the effective time of the Reverse Stock
Split with instructions. After you submit your completed
transmittal letter, if you are entitled to post-split shares of the
common stock, a transaction statement will be sent to your address
of record as soon as practicable after the effective date of the
split indicating the number of shares of the common stock you
hold.
Some
stockholders hold their shares of common stock in certificate form
or a combination of certificate and book-entry form. We expect that
our transfer agent will act as exchange agent for purposes of
implementing the exchange of stock certificates, if applicable. If
you are a stockholder holding pre-split shares in certificate form,
you will receive a transmittal letter from our transfer agent as
soon as practicable after the effective time of the Reverse Stock
Split. The transmittal letter will be accompanied by instructions
specifying how you can exchange your certificate representing the
pre-split shares of the common stock for a statement of holding.
When you submit your certificate representing the pre-split shares
of the common stock, your post-split shares of the common stock
will be held electronically in book-entry form in the Direct
Registration System. This means that, instead of receiving a new
stock certificate, you will receive a statement of holding that
indicates the number of post-split shares you own in book-entry
form. We will no longer issue physical stock certificates unless
you make a specific request for a share certificate representing
your post-split ownership interest.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT
ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
9
Beginning on the
effective time of the Reverse Stock Split, each certificate
representing pre-split shares will be deemed for all corporate
purposes to evidence ownership of post-split shares.
Fractional Shares
No
fractional shares will be issued in connection with the Reverse
Stock Split. Instead, the Company will issue one full share of the
post-Reverse Stock Split common stock to any stockholder of record
who would have been entitled to receive a fractional share as a
result of the process. Each common stockholder will hold the same
percentage of the outstanding common stock immediately following
the Reverse Stock Split as that stockholder did immediately prior
to the Reverse Stock Split, except for minor adjustment due to the
additional net share fraction that will need to be issued as a
result of the treatment of fractional shares.
Effect of the Reverse Stock Split on Equity Incentive
Plans
We
maintain equity inventive plans (the “Plans”) pursuant
to which we have granted stock options and awards of restricted
stock that are presently outstanding and additional equity
incentive compensation awards may be granted in the future.
Pursuant to the terms of the Plans, the Board of Directors or a
committee thereof, as applicable, will adjust the number of shares
available for future grant under the Plans, the number of shares
underlying outstanding awards, the exercise price per share of
outstanding stock options and other terms of outstanding awards
issued pursuant to the Plans to equitably reflect the effects of
the Reverse Stock Split.
Accounting Matters
The
Reverse Stock Split will not affect the common stock capital
account on our balance sheet. However, because the par value of the
common stock will remain unchanged on the effective date of the
split, the components that make up the common stock capital account
will change by offsetting amounts. Depending on the size of the
Reverse Stock Split the Board of Directors decides to implement,
the stated capital component will be reduced to an amount between
one-fifth (1/5) and one-fifteenth (1/15) of its present amount, and
the additional paid-in capital component will be increased with the
amount by which the stated capital is reduced. The per share net
income or loss and net book value of the common stock will be
increased because there will be fewer shares of common stock
outstanding. Prior periods per share amounts will be restated to
reflect the Reverse Stock Split.
Material Tax Consequences of the Reverse Stock Split
Generally
The
following is a summary of the material U.S. federal income tax
consequences of the reverse stock split to holders of our common
stock and to the Company. This discussion is based on the Internal
Revenue Code of 1986, as amended (the “Code”),
existing, proposed and temporary Treasury Regulations promulgated
thereunder, Internal Revenue Service (“IRS”) rulings,
administrative pronouncements and judicial decisions in effect as
of the date of this Information Statement, all of which are subject
to change (possibly with retroactive effect) or to different
interpretations. The summary does not address all aspects of
federal income taxation that may apply to a stockholder as a result
of the Reverse Stock Split and is included for general information
only. In addition, the summary does not address any state, local or
non-U.S. income or other tax consequences of the Reverse Stock
Split.
The
summary does not address tax consequences to stockholders that are
subject to special tax rules, including, without limitation, banks,
insurance companies, regulated investment companies, personal
holding companies, non-U.S. entities, nonresident alien
individuals, broker-dealers, S corporations, entities treated as
partnerships or partners of such partnerships, persons who acquired
our common stock pursuant to the exercise of compensatory stock
options, estates, trusts and tax-exempt entities. The summary
further assumes that stockholders have held our common stock
subject to the Reverse Stock Split as a capital asset within the
meaning of Section 1221 of the Code, and will continue to hold such
common stock as a capital asset following the Reverse Stock Split.
No ruling from the IRS or opinion of counsel will be obtained
regarding the federal income tax consequences to stockholders as a
result of the Reverse Stock Split.
10
THE
FOLLOWING DISCUSSION IS BASED ON CURRENT LAW AND IS NOT INTENDED TO
CONSTITUTE A COMPLETE DESCRIPTION OF ALL U.S. FEDERAL INCOME TAX
CONSEQUENCES RELATING TO THE REVERSE STOCK SPLIT. STOCKHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE FEDERAL, STATE,
LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN
LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES. THIS DISCUSSION IS FOR
GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX
ADVICE.
We
believe that the Reverse Stock Split, if implemented, would be a
tax-free recapitalization under the Code. If the Reverse Stock
Split qualifies as a recapitalization under the Code, then,
generally, for U.S. federal income tax purposes, no gain or loss
will be recognized by the Company in connection with the Reverse
Stock Split, and no gain or loss will be recognized by stockholders
that exchange their shares of pre-split common stock for shares of
post-split common stock. The post-split common stock in the hands
of a stockholder following the Reverse Stock Split will have an
aggregate tax basis equal to the aggregate tax basis of the
pre-split common stock held by that stockholder immediately prior
to the Reverse Stock Split. Similarly, a stockholder’s
holding period for the post-split common stock will be the same as
the holding period for the pre-split common stock exchanged
therefor.
Alternative
characterizations of the Reverse Stock Split are possible. For
example, while the Reverse Stock Split, if implemented, would
generally be treated as a tax-free recapitalization under the Code,
stockholders whose fractional shares resulting from the Reverse
Stock Split are rounded up to the nearest whole share may recognize
gain for federal income tax purposes equal to the value of the
additional fractional share. However, we believe that, in such
case, the resulting tax liability may not be material in view of
the low value of such fractional interest. Stockholders should
consult their own tax advisors regarding alternative
characterizations of the Reverse Stock Split for federal income tax
purposes.
THE
COMPANY’S VIEW REGARDING THE TAX CONSEQUENCE OF THE REVERSE
STOCK SPLIT IS NOT BINDING ON THE IRS OR THE COURTS. ACCORDINGLY,
EACH STOCKHOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISORS
REGARDING ALL OF THE POTENTIAL TAX CONSEQUENCES TO HIM OR HER OF
THE REVERSE STOCK SPLIT.
Vote Required to Approve Amendment of our Restated Certificate of
Incorporation
Approval of the
Reverse Stock Split as set forth in the certificate of amendment to
our Restated Certificate of Incorporation included as Appendix A, requires an
affirmative vote of a majority of the common stock outstanding
entitled to vote at the Special Meeting as of the record date.
Abstentions and broker non-votes will have the same effect as
“against” votes. Approval by our stockholders of the
Reverse Stock Split is not conditioned upon approval by our
stockholders of the Authorized Common Stock Decrease.
Recommendation
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A
REVERSE STOCK SPLIT OF OUR COMMON STOCK AT A RATIO TO BE DETERMINED
IN THE DISCRETION OF THE BOARD OF DIRECTORS IN THE RANGE OF ONE (1)
SHARE OF COMMON STOCK FOR EVERY FIVE (5) TO FIFTEEN (15) SHARES OF
COMMON STOCK, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL
BE VOTED IN FAVOR OF THE AMENDMENT UNLESS A STOCKHOLDER INDICATES
OTHERWISE ON THE PROXY.
11
PROPOSAL 2
APPROVAL OF AMENDMENT (IN THE EVENT IT IS DEEMED BY THE BOARD TO BE
ADVISABLE) TO OUR RESTATED CERTIFICATE OF INCORPORATION TO DECREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 110,000,000 to
30,000,000
The
Board of Directors has adopted a resolution approving and
recommending to our stockholders for their approval, a proposed
amendment to our Restated Certificate of Incorporation to effect a
decrease in the number of shares of our authorized common stock
from the 110,000,000 shares that are currently authorized for
issuance pursuant to our Restated Certificate of Incorporation to a
total of 30,000,000 shares of common stock, contingent upon the
Reverse Stock Split being approved and effected in accordance with
Proposal 1. The proposed amendment to the Restated Certificate of
Incorporation reflecting the decrease to the Company's authorized
shares of common stock is included in Appendix B to this Proxy
Statement.
In the
event that the Board of Directors decides to effect the Reverse
Stock Split following stockholder approval of Proposal 1 and this
Proposal 2 is approved at the Special Meeting, the Board of
Directors will also effect an amendment to our Restated Certificate
of Incorporation that will result in a decrease in the number of
authorized shares of common stock from 110,000,000 to 30,000,000,
concurrently with the amendment to our Restated Certificate of
Incorporation to effect the Reverse Stock Split. In the event that
(i) Proposal 1 is approved by our stockholders at the Special
Meeting and the Board of Directors decides to effect the Reverse
Stock Split following such approval and (ii) this Proposal 2
is not approved at the Special Meeting, the authorized number of
shares of our common stock will remain at 110,000,000.
Even if
Proposal 2 is approved at the Annual Meeting, the Board of
Directors may determine in its sole discretion not to effect the
Reverse Stock Split and not to file any amendments to our Restated
Certificate of Incorporation. If the Board of Directors determines
not to implement the Reverse Stock Split in accordance with
Proposal 1, the number of authorized shares of our common stock
will not be reduced to 30,000,000 in accordance with this Proposal
2, even if this proposal is approved at the Special Meeting. If the
Board of Directors determines to change the number of authorized
shares of our common stock other than a reduction to 30,000,000
concurrently with effecting the Reverse Stock Split in accordance
with Proposal 1, further stockholder approval would be required
prior to the Company implementing any such change in the number of
authorized shares of our common stock.
If
Proposal 1 is not approved, then we will not amend our Restated
Certificate of Incorporation to decrease the number of authorized
shares of common stock.
No
changes to the Restated Certificate of Incorporation are being
proposed with respect to the number of authorized shares of
preferred stock.
Reasons
for the Amendment
In the
event that the Reverse Stock Split is approved and effected in
accordance with Proposal 1, the Board of Directors believes, based
on current information, that we will need fewer authorized shares
of common dtock to meet our projected capital stock needs for
capital-raising transactions, issuance of equity-based compensation
and, to the extent opportunities may arise in the future, strategic
transactions that may involve our issuance of stock-based
consideration. Therefore, the Board of Directors is seeking
approval of an amendment to our Restated Certificate of
Incorporation to reduce our authorized capital stock.
Effects
of the Amendment
The
decrease of the number of shares of authorized common stock (if it
is approved by the Company's stockholders at the Special Meeting)
will not change any rights of any holder of our common stock as
such decrease would only apply to unissued authorized common stock.
Voting rights of the holders of the issued shares of common stock
will remain the same.
12
The
proposed amendment to our Restated Certificate of Incorporation
would decrease the total number of authorized shares of our common
stock to 30,000,000 shares. However, the proposed amendment would
not change any of the current rights and privileges of our common
stock or its par value.
In
addition, the amendment proposed in this Proposal 2 would not be
expected to limit our ability to use the remaining number of
authorized shares of common stock for appropriate future corporate
purposes, including equity financing transactions, debt-for-equity
refinancing transactions, refinancing transactions with an equity
component, acquisitions involving equity consideration and other
equity considerations that the board of directors may determine to
be in the best interests of the Company and its stockholders from
time to time.
The
proposed decrease in the number of authorized shares of our common
stock could have adverse effects on us. We will have less
flexibility to issue shares of common stock, including in
connection with a potential merger or acquisition, other strategic
transaction or follow-on offering if the number of authorized
shares of our common stock is reduced. In the event that our board
of directors determines that it would be in the best interests of
the Company and its stockholders to issue a number of shares of
common stock in excess of the number of then authorized but
unissued and unreserved shares, we would be required to seek the
approval of our stockholders to increase the number of shares of
authorized common stock. If we are not able to obtain the approval
of our stockholders for such an increase in a timely fashion, we
may be unable to take advantage of opportunities that might
otherwise be advantageous to us and our stockholders.
Vote Required to Approve the Amendment of our Restated Certificate
of Incorporation
Approval of the
amendment to our Restated Certificate of Incorporation to effect a
decrease in the number of shares of our authorized common stock as
set forth in the certificate of amendment to our Restated
Certificate of Incorporation included as Appendix B, requires an
affirmative vote of a majority of the common stock outstanding
entitled to vote at the Special Meeting as of the record date.
Abstentions and broker non-votes will have the same effect as
“against” votes. In the event that the Board of
Directors decides to effect the Reverse Stock Split following
stockholder approval of Proposal 1 and this Proposal 2 is approved
at the Special Meeting, the Board of Directors will also effect an
amendment to our Restated Certificate of Incorporation that will
result in a decrease in the number of authorized shares of common
stock from 110,000,000 to 30,000,000, concurrently with the
amendment to our Restated Certificate of Incorporation to effect
the Reverse Stock Split. In the event that (i) Proposal 1 is
approved by our stockholders at the Special Meeting and the Board
of Directors decides to effect the Reverse Stock Split following
such approval and (ii) this Proposal 2 is not approved at the
Special Meeting, the authorized number of shares of our common
stock will remain at 110,000,000.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE AUTHORIZED COMMON STOCK DECREASE.
13
PROPOSAL 3
ADJOURNMENT OF THE SPECIAL MEETING OF STOCKHOLDERS, IF NECESSARY,
TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES IN
FAVOR OF PROPOSAL 1 OR PROPOSAL 2
Adjournment to Solicit Additional Proxies
If we
fail to receive a sufficient number of votes to approve any of
Proposal 1 (an amendment to the Restated Certificate of
Incorporation to effect the Reverse Stock Split), and/or Proposal 2
(an amendment to the Restated Certificate of Incorporation to
effect the Authorized Common Stock Decrease) we may propose to
adjourn the Special Meeting, if the Board of Directors determines
it to be necessary or appropriate for the purpose of soliciting
additional proxies to approve Proposal 1 and/or Proposal 2. We
currently do not intend to propose adjournment of the Special
Meeting, if there are sufficient votes in favor of each of Proposal
1 and Proposal 2. If our stockholders approve this proposal, we
could adjourn the Special Meeting and any adjourned session of the
Special Meeting and use the additional time to solicit additional
proxies, including the solicitation of proxies from our
stockholders that have previously voted. Among other things,
approval of this proposal could mean that, even if we had received
proxies representing a sufficient number of votes to defeat
Proposal 1 and Proposal 2, we could adjourn the Special Meeting
without a vote on such proposal and seek to convince our
stockholders to change their votes in favor of such
proposal.
If it
is necessary or appropriate (as determined in good faith by the
Board of Directors) to adjourn the Special Meeting, no notice of
the adjourned meeting is required to be given to our stockholders
under Delaware law, other than an announcement at the Special
Meeting of the time and place to which the Special Meeting is
adjourned, so long as the meeting is adjourned for 30 days or less
and no new record date is fixed for the adjourned meeting. At the
adjourned meeting, we may transact any business which might have
been transacted at the original meeting.
Required Vote
Approval of the
Adjournment requires an affirmative vote of a majority of the votes
cast at the Special Meeting. Abstentions and broker non-votes are
not votes cast and therefore will not affect the outcome of this
proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” PROPOSAL 3 THE ADJOURNMENT OF THE SPECIAL
MEETING, IF THE BOARD DETERMINES IT TO BE NECESSARY OR APPROPRIATE,
TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES IN
FAVOR OF PROPOSAL 1 AND/OR PROPOSAL 2.
14
OTHER INFORMATION REGARDING THE COMPANY
Security Ownership of Directors and Executive
Officers
In
general, “beneficial ownership” includes those shares a
director or executive officer has the power to vote or transfer,
except as otherwise noted, and shares underlying stock options that
are exercisable currently or within 60 days. The calculation of the
percentage of outstanding shares is based on 85,910,275 shares
outstanding as of June 17, 2020. The mailing address for each of
our directors and officers is c/o WidePoint Corporation - 11250
Waples Mill Road, South Tower, Suite 210, Fairfax, Virginia
22030.
The
following tables set forth the number of shares of our common stock
beneficially owned as of June 17, 2020 by each director and
executive officer:
|
Directors and Executive Officers
|
Direct Common Stock Owned
|
Restricted Stock Owned
|
Stock Options Exercisable (1)
|
Number of Shares of Common Stock (1)
|
Percent of Common Stock Outstanding (1)
|
|
|
|||||
|
Otto
Guenther (2) (3)
|
595,314
|
-
|
50,000
|
645,314
|
*
|
|
Jin
Kang (4)
|
3,411,385
|
422,938
|
0
|
3,834,323
|
4.5%
|
|
Jason
Holloway (5)
|
1,007,041
|
322,938
|
500,000
|
1,829,979
|
2.1%
|
|
Kellie
Kim (6)
|
-
|
100,000
|
-
|
100,000
|
*
|
|
Julia
Bowen (3)
|
167,968
|
-
|
-
|
167,968
|
*
|
|
Richard
Todaro (3)
|
267,968
|
-
|
-
|
267,968
|
*
|
|
Philip
Garfinkle (3) (7)
|
113,722
|
-
|
-
|
113,722
|
*
|
|
All
directors and executive officers as a group (7 persons)
(8)
|
5,563,398
|
845,876
|
550,000
|
6,959,274
|
8.1%
|
_________________________
*Indicates ownership percentage is less than 1.0%.
(1) Assumes in the case of each
stockholder listed above that all options and/or restricted stock
held by such stockholder that are exercisable currently or vesting
within 60 days of June 17, 2020
were fully exercised or vested by such stockholder, without the
exercise or vesting of any shares of restricted stock or options
held by any other stockholders.
(2)
Includes 50,000 earned and exercisable options to purchase shares
from the Company at a price $0.44 per share.
(3)
Excludes shares to be granted for one year service period beginning
June 19, 2020 and ending June 18, 2021.
(4)
Includes 422,938 shares of unvested restricted stock.
(5) Includes 500,000 earned and exercisable options to purchase
shares from the Company at a price $.70 per share and 322,938
shares of unvested restricted stock.
(6)
Includes 100,000 shares of unvested restricted stock.
(7)
Director as of June 19, 2020.
(8) Includes the shares referred to as included in notes (2)
through (7) above.
15
Security Ownership of Certain Beneficial Owners (Greater than 5%
Holders)
The following table sets forth beneficial owners
of more than 5% based on 85,910,275 outstanding shares of common stock as of
June 17, 2020:
|
Names and Complete Mailing Address
|
Number of Shares of Common Stock
|
|
Percent of Common Stock
Outstanding
|
|
|
|
|
|
|
Nokomis Capital, L.L.C., and
Brett Hendrickson
2305 Cedar Springs Rd., Suite 420
Dallas, Texas 75201
|
8,378,081
|
|
9.8%(1)
|
(1)
Based
on information provided in Schedule 13G filed on May 29, 2020,
Nokomis Capital, L.L.C. is a Texas limited liability company and
Mr. Brett Hendrickson is the principal of Nokomis Capital, L.L.C.
The Schedule 13D relates to shares purchased by Nokomis Capital
through the accounts of certain private funds and managed accounts
(collectively, the “Nokomis Accounts”). Nokomis Capital
serves as the investment adviser to the Nokomis Accounts and may
direct the vote and dispose of the shares held by the Nokomis
Accounts. As the principal of Nokomis Capital, Mr. Hendrickson may
direct the vote and disposition of the shares held by the Nokomis
Accounts. Pursuant to Rule 16a-1, both Nokomis Capital and Mr.
Hendrickson disclaim such beneficial ownership. On July 3, 2018, we
entered into an appointment and standstill agreement with Nokomis.
The appointment and standstill agreement, among other things,
provided that (i) Nokomis shall be entitled to appoint one
qualified independent individual as a Class III director and as a
member of the Corporate Governance and Nominating Committee and the
Compensation Committee of the Board and we shall nominate such
appointee for election at the 2019 Annual Meeting of Stockholders
and (ii) we and Nokomis shall mutually select a qualified
independent individual to serve as a Class III director and as a
member of the Corporate Governance and Nominating Committee and the
Compensation Committee of the Board and we shall nominate such
appointee for election at the 2019 Annual Meeting of Stockholders.
On February 7, 2019 and in accordance with the terms of the
appointment and standstill agreement, the Board appointed Richard
L. Todaro and Julia A. Bowen as Class III directors of the Company,
with Mr. Todaro as the appointee by Nokomis and Ms. Bowen as the
mutual appointee. Also, on July 20, 2017, we previously entered
into an appointment and standstill agreement with Nokomis, pursuant
to which, among other things, the Company agreed to immediately
appoint Alan Howe and Philip Richter as Class II directors and as
members of the Corporate Governance and Nominating Committee and
the Compensation Committee of the Board and to nominate them for
election at the Company’s 2017 Annual Meeting of
Stockholders.
16
NO DISSENTERS’ OR APPRAISAL RIGHTS
The
corporate actions described in this proxy statement will not afford
stockholders the opportunity to dissent from the actions described
herein or to receive an agreed or judicially appraised value for
their shares.
OTHER INFORMATION
We
maintain an internet website at http://www.widepoint.com.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and any amendment to those reports,
are available free of charge on our website immediately after they
are filed with or furnished to the Securities and Exchange
Commission. WidePoint’s Code of Business Conduct, Corporate
Governance Principles and Charters of the Committees of the Board
of Directors are also available free of charge on our website or by
writing to WidePoint Corporation, 11250 Waples Mill Road, South
Tower, Suite 210, Fairfax, Virginia 22030, c/o Corporate Secretary.
WidePoint’s Code of Business Conduct applies to all
directors, officers (including the Chief Executive Officer and
Chief Financial Officer) and employees. Amendments to or waivers of
the Code of Conduct granted to any of the Company’s directors
or executive officers will be published on our website within four
business days of such amendment or waiver.
STOCKHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
Proposals of stockholders intended to be presented
at the 2021 Annual Meeting must be received by the Secretary of the
Company, 11250 Waples Mill Road, South Tower, Suite 210, Fairfax,
Virginia 22030, no later than December 25, 2020 in order for them to be
considered for inclusion in the 2021 Proxy Statement. Any
such proposal must comply with Rule 14a-8 of Regulation 14A of the
proxy rules of the Securities and Exchange Commission. Based on our anticipated meeting date, a
stockholder desiring to submit a proposal to be voted on at next
year’s Annual Meeting of Stockholders, but not desiring to
have such proposal included in next year’s proxy statement
relating to that meeting, should submit such proposal to the
Company no later than December 25,
2020. Failure to comply with that advance notice requirement
will result in the proposal not being placed on the agenda at the
meeting.
OTHER MATTERS
Management
is not aware of any other matters to be considered at the Special
Meeting. If any other matters properly come before the Special
Meeting, the persons named in the enclosed Proxy will vote said
Proxy in accordance with their discretion.
17
APPENDIX A
FORM OF CERTIFICATE OF
AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
WIDEPOINT CORPORATION
(a Delaware Corporation)
WidePoint
corporation, a corporation organized and existing under the laws of
the State of Delaware (the “Corporation”),
does hereby certify:
1. The
Board of Directors of the Corporation has duly adopted a resolution
pursuant to Section 242 of the General Corporation Law of the State
of Delaware setting forth a proposed amendment to the Amended and
Restated Certificate of Incorporation of the Corporation, as
amended (the “Restated
Certificate”), and declaring said amendment to be
advisable. The requisite stockholders of the Corporation have duly
approved said proposed amendment in accordance with Section 242 of
the General Corporation Law of the State of Delaware. The Restated
Certificate is hereby amended by deleting Article FOURTH in its
entirety and substituting in lieu thereof the
following:
ARTICLE IV. CAPITAL STOCK
The
aggregate number of shares of stock that the Corporation shall have
authority to issue is one hundred twenty million (120,000,000), of
which ten million (10,000,000) shares, with a par value of $0.001
per share, are designated as Preferred Stock, and one hundred ten
million (110,000,000), with a par value of $0.001 per share, are
designated as Common Stock.
(a)
Provisions Relating to the Common Stock.
|
|
(1)
Each holder of Common Stock is entitled to one vote for each share
of Common Stock standing in such holder’s name on the records
of the Corporation on each matter submitted to a vote of the
stockholders, except as otherwise required by law.
|
|
|
(2) The
holders of the Common Stock shall have no preemptive rights to
subscribe for any shares of any class of stock of the Corporation
whether now or hereafter authorized.
(3)
Effective as of [date] (the
"Effective Time"), each [number to
be determined from five to fifteen] shares of Common Stock
issued and outstanding or held in treasury immediately prior to the
Effective Time shall be reclassified and combined into one (1)
validly issued, fully paid and non-assessable share of Common Stock
without any further action by the Corporation or any holder
thereof, subject to the treatment of fractional share interests as
described below (the "Reverse Stock Split"). The Reverse Stock
Split shall occur without any further action on the part of the
Company or the holder thereof and whether or not certificates
representing such holder's shares prior to the Reverse Stock Split
are surrendered for cancellation. No fractional interest in a share
of Common Stock shall be deliverable upon the Reverse Stock Split.
Stockholders who otherwise would be entitled to receive fractional
shares of Common Stock because they hold a number of shares not
evenly divisible by the Reverse Stock Split ratio will
automatically be entitled to receive an additional fraction of a
share of Common Stock to round up to the next whole share. Each
certificate that immediately prior to the Effective Time
represented shares of Common Stock ("Old Certificate"), 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, plus any additional fraction of a share
of Common Stock to round up to the next whole share."
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(b)
Provisions Relating to the Preferred Stock. The authority of the
Board with respect to each series shall include, but not be limited
to, determination of the following:
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(1) The
number of shares constituting that series and the distinctive
designation of that series;
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(2) The
dividend rate on the shares of that series, whether dividends shall
be cumulative, and if so, from which date(s), and the relative
rights of priority, if any, of payment of dividends on shares of
that series;
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(3)
Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights;
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(4)
Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the Board
of Directors shall determine;
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(5) Whether
or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the date or
date upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary
under different conditions and at different redemption
dates;
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(6)
Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount
of such sinking fund;
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(7) The
rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of
payment of shares of that series;
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(8) Any
other relative rights, preferences and limitations of that
series.
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Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be
paid or declared and set apart for payment on the Common Stock with
respect to the same dividend period. If upon any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to
pay such holders the full preferential amount to which they are
entitled, then such assets shall be distributed ratably among the
shares of all series of Preferred Stock in accordance with the
respective preferential amounts (including unpaid cumulative
dividends, if any) payable with respect thereto.
2. This
Certificate of Amendment shall be effective as of ____ at ____
Eastern Time.
IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Amendment to be signed this
[ ] day of [ ],
202[ ].
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WIDEPOINT CORPORATION
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By:
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Name:
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Title:
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19
APPENDIX
B
FORM OF CERTIFICATE OF
AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
WIDEPOINT CORPORATION
(a Delaware Corporation)
WidePoint
corporation, a corporation organized and existing under the laws of
the State of Delaware (the “Corporation”),
does hereby certify:
1. The
Board of Directors of the Corporation has duly adopted a resolution
pursuant to Section 242 of the General Corporation Law of the State
of Delaware setting forth a proposed amendment to the Amended and
Restated Certificate of Incorporation of the Corporation, as
amended (the “Restated
Certificate”), and declaring said amendment to be
advisable. The requisite stockholders of the Corporation have duly
approved said proposed amendment in accordance with Section 242 of
the General Corporation Law of the State of Delaware. The Restated
Certificate is hereby amended by deleting Article FOURTH in its
entirety and substituting in lieu thereof the
following:
ARTICLE IV. CAPITAL STOCK
The
aggregate number of shares of stock that the Corporation shall have
authority to issue is forty million (40,000,000), of which ten
million (10,000,000) shares, with a par value of $0.001 per share,
are designated as Preferred Stock, and thirty million (30,000,000),
with a par value of $0.001 per share, are designated as Common
Stock.
(a)
Provisions Relating to the Common Stock.
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(1)
Each holder of Common Stock is entitled to one vote for each share
of Common Stock standing in such holder’s name on the records
of the Corporation on each matter submitted to a vote of the
stockholders, except as otherwise required by law.
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(2) The
holders of the Common Stock shall have no preemptive rights to
subscribe for any shares of any class of stock of the Corporation
whether now or hereafter authorized.
(3)
Effective as of [date] (the
"Effective Time"), each [number to
be determined from five to fifteen] shares of Common Stock
issued and outstanding or held in treasury immediately prior to the
Effective Time shall be reclassified and combined into one (1)
validly issued, fully paid and non-assessable share of Common Stock
without any further action by the Corporation or any holder
thereof, subject to the treatment of fractional share interests as
described below (the "Reverse Stock Split"). The Reverse Stock
Split shall occur without any further action on the part of the
Company or the holder thereof and whether or not certificates
representing such holder's shares prior to the Reverse Stock Split
are surrendered for cancellation. No fractional interest in a share
of Common Stock shall be deliverable upon the Reverse Stock Split.
Stockholders who otherwise would be entitled to receive fractional
shares of Common Stock because they hold a number of shares not
evenly divisible by the Reverse Stock Split ratio will
automatically be entitled to receive an additional fraction of a
share of Common Stock to round up to the next whole share. Each
certificate that immediately prior to the Effective Time
represented shares of Common Stock ("Old Certificate"), 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, plus any additional fraction of a share
of Common Stock to round up to the next whole share."
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(b) Provisions Relating to the Preferred Stock. The authority of
the Board with respect to each series shall include, but not be
limited to, determination of the following:
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(1) The
number of shares constituting that series and the distinctive
designation of that series;
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(2) The
dividend rate on the shares of that series, whether dividends shall
be cumulative, and if so, from which date(s), and the relative
rights of priority, if any, of payment of dividends on shares of
that series;
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(3)
Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights;
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(4)
Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the Board
of Directors shall determine;
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(5) Whether
or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the date or
date upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary
under different conditions and at different redemption
dates;
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(6)
Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount
of such sinking fund;
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(7) The
rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of
payment of shares of that series;
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(8) Any
other relative rights, preferences and limitations of that
series.
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Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be
paid or declared and set apart for payment on the Common Stock with
respect to the same dividend period. If upon any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to
pay such holders the full preferential amount to which they are
entitled, then such assets shall be distributed ratably among the
shares of all series of Preferred Stock in accordance with the
respective preferential amounts (including unpaid cumulative
dividends, if any) payable with respect thereto.
2. This
Certificate of Amendment shall be effective as of ____ at ____
Eastern Time.
IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Amendment to be signed this day of , .
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WIDEPOINT CORPORATION
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By:
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Name:
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Title:
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21
