PROPOSAL ONEAPPROVAL OF ONE OR MORE AMENDMENTS TO THE RESTATED ARTICLES OF
INCORPORATION TO EFFECT ONE OR MORE REVERSE STOCK SPLITS
Our Board deems it advisable that the Board be granted the authority to
implement, it its sole discretion, one or more reverse stock splits of the issued and outstanding shares of our common stock at a specific exchange ratio, to be set by the Board, between one-for-two and one-for-1,000 and in the aggregate of not more than one-for-1,000, inclusive, at the discretion of the Board; provided each such reverse stock split is effected within three years of the stockholders approval. Except as described below with respect to
fractional shares, at the effective time of a reverse stock split, shares of our common stock issued and outstanding immediately prior thereto will be automatically and without any action on the part of the stockholders, combined, converted and
changed into new shares of common stock in accordance with the reverse split ratio, which shall be determined by the Board in its discretion within the set of ratios described above.
On June 15, 2023, the Companys then sole stockholder approved, among other things, a form of amendment to the Companys
Restated Articles of Incorporation to, in the Boards discretion, effect one or more reverse stock splits of the Companys issued and outstanding shares of common stock by a ratio of between one-for-two and one-for-500, inclusive, with the exact ratio to be set at a number within this range to be determined by the
Board in its discretion, within three years after such stockholders approval. A one-for-100 reverse stock split and a one-for-2.5 reverse stock split have been implemented by the Board pursuant to this stockholder approval, on April 11, 2024 and December 31, 2024, respectively, in order to regain and to maintain
compliance with the minimum bid price requirement of the Nasdaq Capital Market (Nasdaq).
The Board has determined to seek
approval from the Companys stockholders to effect one or more reverse stock splits within a wider range of reverse stock split ratios, namely one-for-two to one-for-1,000 and in the aggregate of not more than one-for-1,000, inclusive, as described
herein, to provide the Board with the flexibility to effect one or more reverse stock splits at a specific ratio within this range to best facilitate achieving the objectives of the reverse stock splits described below.
Reasons for the Possible Reverse Stock Splits. The Board anticipates that a reverse stock split would increase our stock price, and
consequently reduce the risk that our stock could be delisted from Nasdaq. To continue our listing on Nasdaq, which the Company and the Board believe is in the best interests of the Company and its stockholders, we must comply with Nasdaq Listing
Rules, which include a minimum bid price of $1.00 per share.
The Board intends to effect a reverse stock split in connection with
Proposal One only if it believes that a decrease in the number of shares of common stock outstanding is likely to improve the trading price for the Companys shares of common stock, and only if the implementation of a reverse stock split is
determined by the Board to be in the best interests of the Company and its stockholders. There can be no assurance that any reverse stock split, if and when implemented, will achieve any of the desired results. There also can be no assurance that
the Company will be successful in regaining and/or maintaining compliance with Nasdaq requirements or that the price per share of the Companys common stock immediately after any such reverse stock split, if implemented, will increase
proportionately with any reverse stock split, or that any increase will be sustained for any period of time.
The Board does not intend
for this transaction to be the first step in a series of plans or proposals of a going private transaction within the meaning of Rule 13e-3 of the U.S. Securities Exchange Act of 1934.
The Company is seeking approval from the stockholders of one or more amendments, substantially in the form below, to the Companys
Restated Articles of Incorporation to effect one or more reverse stock splits, at a ratio of not less than one-for-two and not more than
one-for-1,000 and in the aggregate of not more than one-for-1,000, inclusive, with the
Board granted authority to determine, in its sole discretion, whether to implement a reverse stock split, as well as its specific timing and ratio, within the set of ratios described above; provided such reverse stock split is effected within three
years of such stockholder approval. If the stockholders approve this Proposal One, the Board will have the sole authority to elect, in its sole discretion, without the need