SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant
to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant
x
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 the use of the Commission only
(as permitted by Rule 14a-6(e)(2))
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x
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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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MY SIZE, INC.
(Name of Registrant as Specified In Its Charter)
________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
x
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No fee required.
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¨
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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.
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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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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement
No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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MY SIZE, INC.
NOTICE OF SPECIAL
MEETING
AND
PROXY STATEMENT
Meeting to be held on
February 12, 2018, at 4:00 p.m. local time
At the offices of Barnea
& CoLaw Offices,
58 HaRakevet St., Tel Aviv 6777016, Israel
MY SIZE, INC.
NOTICE OF SPECIAL
MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 12, 2018
A special meeting (the “Special Meeting”) of
stockholders of My Size, Inc. (the “Company”) will be
held on February 12, 2018, at the offices of Barnea & CoLaw
Offices, 58 HaRakevet St., Tel Aviv 6777016, Israel, at 4:00 p.m.
local time, to consider the following proposals:
1.
Approve an amendment to the Company’s 2017 Consultant Equity
Incentive Plan to increase the reservation of common stock, par
value $0.001 per share (“Common Stock”) for issuance
thereunder to 4,500,000 shares from 3,000,000 shares;
2.
Approve an amendment to the Company’s Amended and Restated
Certificate of Incorporation (the “Certificate of
Incorporation”) to increase the authorized number of shares
of the Company’s Common Stock from 50,000,000 shares to
100,000,000 shares;
3.
Grant discretionary authority to the Company’s Board of
Directors to (A) amend the Certificate of Incorporation of the
Company to effect one or more consolidations of the issued and
outstanding shares of Common Stock, pursuant to which the shares of
Common Stock would be combined and reclassified into one (1) share
of Common Stock at a ratio within the range from 1-for-2 up to
1-for-10 (the “Reverse Stock Split”) and (B) determine
whether to arrange for the disposition of fractional interests by
stockholders entitled thereto, to pay in cash the fair value of
fractions of a share of Common Stock as of the time when those
entitled to receive such fractions are determined, or to entitle
stockholders to receive from the Company’s transfer agent, in
lieu of any fractional share, the number of shares of Common Stock
rounded up to the next whole number, provided that, (X) that the
Company shall not effect Reverse Stock Splits that, in the
aggregate, exceeds 1-for-10, and (Y) any Reverse Stock Split is
completed no later than December 18, 2018;
4.
To approve the issuance of securities in one or more non-public
offerings where the maximum discount at which securities will be
offered will be equivalent to a discount of 20% below the market
price of our Common Stock, as required by and in accordance with
Nasdaq Marketplace Rule 5635(d); and
5.
To approve the issuance of securities in one or more non-public
offerings where the maximum discount at which securities will be
offered will be equivalent to a discount of 15% below the market
price of our Common Stock, as required by and in accordance with
Nasdaq Marketplace Rule 5635(d).
BECAUSE OF THE SIGNIFICANCE OF THESE PROPOSALS TO THE COMPANY AND
ITS STOCKHOLDERS, IT IS VITAL THAT EVERY STOCKHOLDER VOTES AT THE
SPECIAL MEETING IN PERSON OR BY PROXY.
These proposals are fully set forth in the accompanying Proxy
Statement, which you are urged to read thoroughly. For the reasons
set forth in the Proxy Statement, your Board of Directors
recommends a vote “FOR” Proposals 1, 2, 3, 4 and 5. The
Company intends to mail the Proxy Statement and Proxy Card enclosed
with this notice on or about January 29, 2018 to all stockholders
entitled to vote at the Special Meeting. Only stockholders of
record at the close of business on December 18, 2017 (the
“Record Date”) will be entitled to attend and vote at
the meeting. A list of all stockholders entitled to vote at the
Special Meeting will be available at the principal
office of the Company during usual business hours, for examination
by any stockholder for any purpose germane to the Special Meeting
for 10 days prior to the date thereof. Stockholders are cordially
invited to attend the Special Meeting. However, whether or not you
plan to attend the meeting in person, your shares should be
represented and voted. After reading the enclosed Proxy Statement,
please sign, date, and return promptly the enclosed Proxy in the
accompanying postpaid envelope we have provided for your
convenience to ensure that your shares will be represented. If you
do attend the meeting and wish to vote your shares personally, you
may revoke your Proxy.
Important Notice
Regarding the Availability of Proxy Materials for the Special
Meeting of Stockholders to be held on February 12, 2018. The Proxy
Statement is available at:
http://www.vstocktransfer.com/proxy.
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By Order of the Board of Directors
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/s/ Eliyahu Walles
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Eliyahu Walles
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Chairman of the Board of Directors
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WHETHER OR NOT YOU PLAN ON ATTENDING THE MEETING IN PERSON, PLEASE
VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS
COUNTED.
My Size, Inc.
3 Arava St., pob 1026
Airport City, Israel, 701000
PROXY
STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of My Size, Inc.
(“My Size”, the “Company”,
“we”, “us”, or “our”) to be
voted at the special meeting of stockholders (“Special
Meeting”) which will be held the offices of Barnea &
CoLaw Offices, 58 HaRakevet St., Tel Aviv 6777016, Israel , at 4:00
p.m. local time, and at any postponements or adjournments thereof.
The proxy materials will be mailed to stockholders on or about
January 29, 2018.
REVOCABILITY OF PROXY
AND SOLICITATION
Any stockholder executing a proxy that is solicited hereby has the
power to revoke it prior to the voting of the proxy. Revocation may
be made by attending the Special Meeting and voting the shares of
stock in person, or by delivering to the Secretary of the Company
at the principal office of the Company prior to the Special Meeting
a written notice of revocation or a later-dated, properly executed
proxy. Solicitation of proxies may be made by directors, officers
and other employees of the Company by personal interview,
telephone, facsimile transmittal or electronic communications. No
additional compensation will be paid for any such services. This
solicitation of proxies is being made by the Company which will
bear all costs associated with the mailing of this proxy statement
and the solicitation of proxies.
RECORD DATE
Stockholders of record at the close of business on December 18,
2017 (the “Record Date”) will be entitled to receive
notice of, attend and vote at the meeting.
INFORMATION ABOUT THE
SPECIAL MEETING AND VOTING
Why am I receiving these materials?
The Company has delivered printed versions of these materials to
you by mail, in connection with the Company’s solicitation of
proxies for use at the Special Meeting. These materials describe
the proposals on which the Company would like you to vote and also
give you information on these proposals so that you can make an
informed decision.
What is included in these materials?
These materials include:
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this Proxy Statement for the Special Meeting; and
•
the Proxy Card or vote instruction form for the Special
Meeting.
What is the Proxy Card?
The Proxy Card enables you to appoint Ronen Luzon, our Chief
Executive Officer, as your representative at the Special Meeting.
By completing and returning a Proxy Card, you are authorizing Mr.
Luzon to vote your shares at the Special Meeting in accordance with
your instructions on the Proxy Card. This way, your shares will be
voted whether or not you attend the Special Meeting.
What is the purpose of the Special Meeting?
At our Special Meeting, stockholders will act upon the matters
outlined in the Notice of Special Meeting on the cover page of this
Proxy Statement, including (i) approval of an amendment to the
Company’s 2017 Consultant Equity Incentive Plan to increase
the reservation of common stock, par value $0.001 per share (the
“Common Stock”) for issuance thereunder to 4,500,000
shares from 3,000,000 shares; (ii) approval of an amendment to the
Company’s Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”) to increase the
authorized number of shares of the Company’s Common Stock
from 50,000,000 shares to 100,000,000 shares;
1
(ii) granting discretionary authority to the Company’s Board
of Directors to (A) amend the Certificate of Incorporation of the
Company to effect one or more consolidations of the issued and
outstanding shares of Common Stock, pursuant to which the shares of
Common Stock would be combined and reclassified into one (1) share
of Common Stock at a ratio within the range from 1-for-2 up to
1-for-10 (the “Reverse Stock Split”) and (B) determine
whether to arrange for the disposition of fractional interests by
stockholders entitled thereto, to pay in cash the fair value of
fractions of a share of Common Stock as of the time when those
entitled to receive such fractions are determined, or to entitle
stockholders to receive from the Company’s transfer agent, in
lieu of any fractional share, the number of shares of Common Stock
rounded up to the next whole number, provided that, (X) that the
Company shall not effect Reverse Stock Splits that, in the
aggregate, exceeds 1-for-10, and (Y) any Reverse Stock Split is
completed no later than December 18, 2018; (iv) approval the
issuance of securities in one or more non-public offerings where
the maximum discount at which securities will be offered will be
equivalent to a discount of 20% below the market price of our
Common Stock, as required by and in accordance with Nasdaq
Marketplace
Rule 5635
(d); and (v) approval
the issuance of securities in one or more non-public offerings
where the maximum discount at which securities will be offered will
be equivalent to a discount of 15% below the market price of our
Common Stock, as required by and in accordance with Nasdaq
Marketplace Rule 5635(d).
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders
of one third of the number of shares of common stock issued and
outstanding on the record date will constitute a quorum permitting
the meeting to conduct its business. As of the Record Date there
were 18,406,245 shares of the Company’s Common Stock issued
and outstanding, each share entitled to one vote at the meeting
(the “Voting Stock”). Thus, the presence of the holders
of 6,135,415 shares of Common Stock will be required to establish a
quorum.
What is the difference between a stockholder of record and a
beneficial owner of shares held in street name?
Most of our stockholders hold their shares in an account at a
brokerage firm, bank or other nominee holder, rather than holding
share certificates in their own name. As summarized below, there
are some distinctions between shares held of record and those owned
beneficially in street name.
Stockholder of
Record
If on December 18, 2017, your shares were registered directly in
your name with our transfer agent, VStock Transfer, LLC, you are
considered a stockholder of record with respect to those shares,
and the Notice of Special Meeting and Proxy Statement was sent
directly to you by the Company. As the stockholder of record, you
have the right to direct the voting of your shares by returning the
Proxy Card to us. Whether or not you plan to attend the Special
Meeting, please complete, date, sign and return a Proxy Card to
ensure that your vote is counted.
Beneficial Owner of
Shares Held in Street Name
(non-Israeli brokerage firm,
bank, broker-dealer, or other nominee holders)
If on December 18, 2017, your shares were held in an account at a
brokerage firm, bank, broker-dealer, or other nominee holder, then
you are considered the beneficial owner of shares held in
“street name,” and the Notice of Special Meeting and
Proxy Statement was forwarded to you by that organization. The
organization holding your account is considered the stockholder of
record for purposes of voting at the Special Meeting. As the
beneficial owner, you have the right to direct that organization on
how to vote the shares held in your account. However, since you are
not the stockholder of record, you may not vote these shares in
person at the Special Meeting unless you receive a valid proxy from
the organization.
How do I vote?
Stockholders of
Record.
If you are a stockholder of record, you may
vote by any of the following methods:
•
By
Mail.
You may vote by completing, signing, dating and
returning your proxy card in the pre-addressed, postage-paid
envelope provided.
•
In
Person.
You may attend and vote at the Special Meeting.
The Company will give you a ballot when you arrive.
2
Beneficial Owners of
Shares Held in Street Name.
If you are a beneficial
owner of shares held in street name, you may vote by any of the
following methods:
•
By
Mail.
You may vote by proxy by filling out the vote
instruction form and returning it in the pre-addressed,
postage-paid envelope provided.
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In
Person.
If you are a beneficial owner of shares held in
street name and you wish to vote in person at the Special Meeting,
you must obtain a legal proxy from the organization that holds your
shares.
How are Votes Counted?
Votes will be counted by the inspector of election appointed for
the Special Meeting, who will separately count, for the election of
directors, “For,” “Withhold” and broker
non-votes; and, with respect to the other proposals, votes
“For” and “Against,” abstentions and broker
non-votes. Broker non-votes will not be included in the tabulation
of the voting results of any of the proposals and, therefore, will
have no effect on such proposals.
What is a Broker Non-Vote?
If your shares are held in street name, you must instruct the
organization who holds your shares how to vote your shares. If you
sign your proxy card but do not provide instructions on how your
broker should vote on “routine” proposals, your broker
will vote your shares as recommended by the Board. If you do not
provide voting instructions, your shares will not be voted on any
“non-routine” proposals. This vote is called a
“broker non-vote.” Because broker non-votes are not
considered under Delaware law to be entitled to vote at the Special
Meeting, broker non-votes will not be included in the tabulation of
the voting results of any of the proposals and, therefore, will
have no effect on these proposals.
What is an Abstention?
An abstention is a stockholder’s affirmative choice to
decline to vote on a proposal. Under Delaware law, abstentions are
counted as shares present and entitled to vote at the Special
Meeting. Therefore, abstentions will have the same effect as a vote
“against” each of the Proposals to be presented at the
Special Meeting.
What happens if I do not give specific voting
instructions?
Shareholders of
Record.
If you are a stockholder of record and you:
•
sign and return a proxy card without giving specific voting
instructions, then the proxy holders will vote your shares in the
manner recommended by the Board of Directors on all matters
presented in this Proxy Statement and as the proxy holders may
determine in their discretion with respect to any other matters
properly presented for a vote at the Special Meeting.
Beneficial Owners of
Shares Held in Street Name.
If you are a beneficial
owner of shares held in street name and do not provide the
organization that holds your shares with specific voting
instructions, under the rules of various national and regional
securities exchanges, the organization that holds your shares may
generally vote on routine matters, but cannot vote on non-routine
matters.
What are the Board’s recommendations?
The Board’s recommendation is set forth together with the
description of each item in this Proxy Statement. In summary, the
Board recommends a vote:
•
for
the
approval of an amendment to the Company’s 2017 Consultant
Equity Incentive Plan to increase the reservation of Common Stock
for issuance thereunder to 4,500,000 shares from 3,000,000
shares;
•
for
the
approval of an amendment to the Company’s Certificate of
Incorporation to increase the authorized number of shares of the
Company’s Common Stock from 50,000,000 shares to 100,000,000
shares;
•
for
granting discretionary authority to the
Company’s Board of Directors to (A) amend the Certificate of
Incorporation of the Company to effect one or more consolidations
of the issued and outstanding shares of
3
Common Stock, pursuant to
which the shares of Common Stock would be combined and reclassified
into one (1) share of Common Stock at a ratio within the range from
1-for-2 up to 1-for-10 and (B) determine whether to arrange for the
disposition of fractional interests by stockholders entitled
thereto, to pay in cash the fair value of fractions of a share of
Common Stock as of the time when those entitled to receive such
fractions are determined, or to entitle stockholders to receive
from the Company’s transfer agent, in lieu of any fractional
share, the number of shares of Common Stock rounded up to the next
whole number, provided that, (X) that the Company shall not effect
Reverse Stock Splits that, in the aggregate, exceeds 1-for-10, and
(Y) any Reverse Stock Split is completed no later than December 18,
2018.
•
for
the
approval of the issuance of securities in one or more non-public
offerings where the maximum discount at which securities will be
offered will be equivalent to a discount of 20% below the market
price of the Company’s Common Stock; and
•
for
the
approval of the issuance of securities in one or more non-public
offerings where the maximum discount at which securities will be
offered will be equivalent to a discount of 15% below the market
price of the Company’s Common Stock.
With respect to any other matter that properly comes before the
meeting, the proxy holder will vote as recommended by the Board of
Directors or, if no recommendation is given, in his own
discretion.
Dissenters’ Right of Appraisal
Holders of shares of our Common Stock do not have appraisal rights
under Delaware law or under the governing documents of the Company
in connection with this solicitation.
How are Proxy materials delivered to households?
Only one copy of this Proxy Statement will be delivered to an
address where two or more stockholders reside with the same last
name or who otherwise reasonably appear to be members of the same
family based on the stockholders’ prior express or implied
consent.
We will deliver promptly upon written or oral request a separate
copy of this Proxy Statement upon such request. If you share an
address with at least one other stockholder, currently receive one
copy of our Proxy Statement at your residence, and would like to
receive a separate copy of our Proxy Statement for future
stockholder meetings of the Company, please specify such request in
writing and send such written request to My Size, Inc., 3 Arava
St., pob 1026, Airport City, Israel, 701000, Attention: Corporate
Secretary.
4
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of shares of our common stock as of December
18, 2017 by (i) each person known to beneficially own more than 5%
of our outstanding common stock, (ii) each of our directors, (iii)
each of our named executive officers and (iv) all of our directors
and executive officers as a group. Except as otherwise indicated,
the persons named in the table below have sole voting and
investment power with respect to all shares beneficially owned,
subject to community property laws, where applicable.
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Shares of Common
Stock Beneficially Owned
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Shoshana Zigdon
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3,500,000
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19.02
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%
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Israel Levi
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1,437,850
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7.81
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%
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Named
executive officers and directors:
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Eliyahu Walles
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300,000
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(3)
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1.60
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%
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Ronen Luzon
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2,055,950
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(4)
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10.99
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%
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Or Kles
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28,333
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(5)
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*
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Billy Pardo
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2,055,950
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(6)
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10.99
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%
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Arik Kaufman
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0
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(7)
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0
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Oren Elmaliah
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0
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(8)
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0
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Oron Branitzky
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0
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(9)
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0
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All Executive Officers and Directors as a Group
( persons)
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2,384,283
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12.53
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%
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5
ACTIONS TO BE TAKEN AT
THE MEETING
PROPOSAL NO.
1
APPROVAL OF AN AMENDMENT
TO THE COMPANY’S 2017 CONSULTANT EQUITY INCENTIVE
PLAN TO INCREASE THE RESERVATION OF COMMON STOCK FOR ISSUANCE
THEREUNDER
TO 4,500,000 SHARES FROM 3,000,000 SHARES
The Company’s 2017 Consultant Equity Incentive Plan (the
“2017 Consultant Plan”) was approved by our Board and
by our Stockholders and went into effect as of March 21, 2017. The
Board deems it advisable and in the best interest of the Company to
increase the number of shares available for issuance under the 2017
Consultant Plan to 4,500,000 from 3,000,000 in support of the
Company’s growth and desire to attract qualified consultants
and advisors. In determining the amount of the increase
contemplated by the Plan Amendment to the 2017 Consultant Plan, the
Board took into consideration the desire to continue to retain the
flexibility to offer incentives to its current and future
consultants and advisors.
Reasons for the Proposed
Plan Amendment
The purpose of this increase is to continue to be able to attract
qualified consultants and advisors, and the additional shares of
Common Stock to be reserved for issuance under the 2017 Consultant
Plan will enable us to continue to grant equity awards to our
current and future consultants and advisors at levels determined by
the Board that the Board deems are necessary to attract and
motivate such consultants and advisors who are or will be critical
to our success in achieving our business objectives and thereby
creating greater value for all our stockholders. Furthermore, we
believe that equity compensation aligns the interests of our
advisors and consultants with the interests of our other
stockholders. Equity awards are a key component of our incentive
compensation program. We believe that option grants and other forms
of equity awards such as restricted stock awards have been critical
in attracting and retaining qualified consultants and advisors and
aligning their interests with those of our stockholders, and
focusing such consultants and advisors on our long-term growth.
Approval of the amendment to the 2017 Consultant Plan will permit
us to continue to use stock-based compensation to align consultant
and advisors interests with those of our stockholders.
Description of Our 2017
Consultant Plan
Set forth below is a summary of the 2017 Consultant Plan, but this
summary is qualified in its entirety by reference to the full text
of the 2017 Consultant Plan, a copy of which can be found as
Exhibit C
to
our Definitive Proxy Statement for the Annual Meeting of
Stockholders held March 21, 2017, filed with the SEC on March 2,
2017.
Shares
Available
The 2017 Consultant Plan currently authorizes the issuance of
3,000,000 shares of Common Stock. As of the Record Date, awards
covering an aggregate of 2,950,000
1
shares were granted
under the 2017 Consultant Plan and 440,000
2
shares were
available for future awards under the 2017 Consultant Plan.
If an award is forfeited, canceled, or if any option terminates,
expires or lapses without being exercised, the Common Stock subject
to such award will again be made available for future grant.
However, shares that are used to pay
6
the exercise price of an option or that are withheld to satisfy a
participant’s tax withholding obligation will not be
available for re-grant under the 2017 Consultant Plan.
If there is any change in the Company’s corporate
capitalization or structure, the Committee (as defined below) in
its sole discretion may make substitutions or adjustments to the
number of shares of Common Stock reserved for issuance under the
2017 Consultant Plan, the number of shares covered by awards then
outstanding under the 2017 Consultant Plan, the limitations on
awards under the 2017 Consultant Plan, the exercise price of
outstanding options and such other equitable substitution or
adjustments as it may determine appropriate.
The 2017 Consultant Plan will have a term of ten years and no
further awards may be granted under the 2017 Consultant Plan after
that date.
Administration
The Company’s Compensation Committee (the
“Committee”) administers the 2017 Consultant Plan. The
Committee has the authority, without limitation to (i) to designate
participants to receive awards, (ii) determine the types of awards
to be granted to participants, (iii) determine the number of shares
of Common Stock to be covered by awards, (iv) determine the terms
and conditions of any awards granted under the 2017 Consultant
Plan, (v) determine to what extent and under what circumstances
awards may be settled in cash, shares of Common Stock, other
securities, other awards or other property, or canceled, forfeited
or suspended, (vi) determine whether, to what extent, and under
what circumstances the delivery of cash, Common Stock, other
securities, other awards or other property and other amounts
payable with respect to an award shall be made; (vii) interpret,
administer, reconcile any inconsistency in, settle any controversy
regarding, correct any defect in and/or complete any omission in
the 2017 Consultant Plan and any instrument or agreement relating
to, or award granted under, the 2017 Consultant Plan; (viii)
establish, amend, suspend, or waive any rules and regulations and
appoint such agents as the Committee shall deem appropriate for the
proper administration of the 2017 Consultant Plan; (ix) accelerate
the vesting or exercisability of, payment for or lapse of
restrictions on, awards; (x) reprice existing awards or to grant
awards in connection with or in consideration of the cancellation
of an outstanding award with a higher price; and (xi) make any
other determination and take any other action that the Committee
deems necessary or desirable for the administration of the 2017
Consultant Plan. The Committee has full discretion to administer
and interpret the 2017 Consultant Plan and to adopt such rules,
regulations and procedures as it deems necessary or advisable and
to determine, among other things, the time or times at which the
awards may be exercised and whether and under what circumstances an
award may be exercised.
Eligibility
Advisors and consultants of the Company or their affiliates are
eligible to participate in the 2017 Consultant Plan. The Committee
has the sole and complete authority to determine who will be
granted an award under the 2017 Consultant Plan; however, the
Committee may delegate such authority to one or more officers of
the Company pursuant to the terms of the 2017 Consultant Plan.
Awards Available for
Grant
The Committee may grant awards of non-qualified stock options,
incentive stock options, stock appreciation rights
(“SARs”), restricted stock awards, restricted stock
units, stock bonus awards, performance compensation awards
(including cash bonus awards) or any combination of the foregoing.
Notwithstanding, the Committee may not grant to any one person in
any one calendar year awards (i) for more than 50% of the available
shares in the aggregate or (ii) payable in cash in an amount
exceeding $10,000,000 in the aggregate.
U.S. Federal Income Tax
Consequences
The following is a general summary of the material U.S. federal
income tax consequences of the grant and exercise and vesting of
awards under the 2017 Consultant Plan and the disposition of shares
acquired pursuant to the exercise of such awards. This summary is
intended to reflect the current provisions of the Internal Revenue
Code of 1986, as amended (the “Code”) and the
regulations thereunder. However, this summary is not intended to be
a complete statement of applicable law, nor does it address
foreign, state, local and payroll tax considerations. Moreover, the
U.S. federal income tax consequences to any particular participant
may differ from those described herein by reason of, among other
things, the particular circumstances of such participant.
7
Pursuant to Section 15(e) of the 2017 Consultant Plan, the
Committee may, in its sole discretion, amend the terms of the 2017
Consultant Plan or outstanding awards (or establish a sub-plan)
with respect to such participants in order to conform such terms
with the requirements of local law or to obtain more favorable tax
or other treatment for such participants or the Company. The
Company operates in Israel, and the applicable tax consequences for
participants may be Israeli tax consequences.
Options
Options issued to consultants and advisors under the 2017
Consultant Plan shall be non-qualified stock options. No income
will be realized by a participant upon grant of a non-qualified
stock option. Upon the exercise of a non-qualified stock option,
the participant will recognize ordinary compensation income in an
amount equal to the excess, if any, of the fair market value of the
underlying exercised shares over the option exercise price paid at
the time of exercise. Such income will be subject to income tax
withholdings, and the participant will be required to pay to the
Company the amount of any required withholding taxes in respect to
such income. The Company will be able to deduct this same amount
for U.S. federal income tax purposes, but such deduction may be
limited under Sections 280G and 162(m) of the Code for compensation
paid to certain executives designated in those Sections.
Restricted Stock
A participant will not be subject to tax upon the grant of an award
of restricted stock unless the participant otherwise elects to be
taxed at the time of grant pursuant to Section 83(b) of the Code.
On the date an award of restricted stock becomes transferable or is
no longer subject to a substantial risk of forfeiture, the
participant will recognize ordinary compensation income equal to
the difference between the fair market value of the shares on that
date over the amount the participant paid for such shares, if any.
Such income will be subject to income tax withholdings, and the
participant will be required to pay to the Company the amount of
any required withholding taxes in respect to such income. If the
participant made an election under Section 83(b) of the Code, the
participant will recognize ordinary compensation income at the time
of grant equal to the difference between the fair market value of
the shares on the date of grant over the amount the participant
paid for such shares, if any, and any subsequent appreciation in
the value of the shares will be treated as a capital gain upon sale
of the shares. Special rules apply to the receipt and disposition
of restricted shares received by officers and directors who are
subject to Section 16(b) of the Exchange Act. The Company will be
able to deduct, at the same time as it is recognized by the
participant, the amount of taxable compensation to the participant
for U.S. federal income tax purposes, but such deduction may be
limited under Sections 280G and 162(m) of the Code for compensation
paid to certain executives designated in those Sections.
Restricted Stock Units
A participant will not be subject to tax upon the grant of a
restricted stock unit award. Rather, upon the delivery of shares or
cash pursuant to a restricted stock unit award, the participant
will recognize ordinary compensation income equal to the fair
market value of the number of shares (or the amount of cash) the
participant actually receives with respect to the award. Such
income will be subject to income tax withholdings, and the
participant will be required to pay to the Company the amount of
any required withholding taxes in respect to such income. The
Company will be able to deduct the amount of taxable compensation
recognized by the participant for U.S. federal income tax purposes,
but the deduction may be limited under Sections 280G and 162(m) of
the Code for compensation paid to certain executives designated in
those Sections.
SARs
No income will be realized by a participant upon grant of an SAR.
Upon the exercise of an SAR, the participant will recognize
ordinary compensation income in an amount equal to the fair market
value of the payment received in respect of the SAR. Such income
will be subject to income tax withholdings, and the participant
will be required to pay to the Company the amount of any required
withholding taxes in respect to such income. The Company will be
able to deduct this same amount for U.S. federal income tax
purposes, but such deduction may be limited under Sections 280G and
162(m) of the Code for compensation paid to certain executives
designated in those Sections.
8
Stock Bonus Awards
A participant will recognize ordinary compensation income equal to
the difference between the fair market value of the shares on the
date the shares of Common Stock subject to the award are
transferred to the participant over the amount the participant paid
for such shares, if any, and any subsequent appreciation in the
value of the shares will be treated as a capital gain upon sale of
the shares. The Company will be able to deduct, at the same time as
it is recognized by the participant, the amount of taxable
compensation to the Participant for U.S. federal income tax
purposes, but such deduction may be limited under Sections 280G and
162(m) of the Code for compensation paid to certain executives
designated in those Sections.
Section 162(m) of the
Code
In general, Section 162(m) of the Code denies a publicly held
corporation a deduction for U.S. federal income tax purposes for
compensation in excess of $1,000,000 per year per person paid to
its principal executive officer and the three other officers (other
than the principal executive officer and principal financial
officer) whose compensation is disclosed in its proxy
statement/prospectus as a result of their total compensation,
subject to certain exceptions. The 2017 Consultant Plan is intended
to satisfy an exception with respect to grants of options to
covered employees. In addition, the 2017 Consultant Plan is
designed to permit certain awards of restricted stock, restricted
stock units, cash bonus awards and other awards to be awarded as
performance compensation awards intended to qualify under the
“performance-based compensation” exception to Section
162(m) of the Code.
New Plan
Benefits
SEC rules require us to disclose any amounts that we currently are
able to determine will be allocated to our named executive
officers, directors and other employees following approval of the
amendment to the 2017 Consultant Plan. Set forth below is
information on grants under the 1,500,000 shares to be added to the
2017 Consultant Plan pursuant to the amendment to consultants and
advisors of the Company.
|
|
|
|
|
S&J Capital Corp.
|
|
|
|
1,230,000
|
(1)
|
Beverly Camhe
|
|
|
|
50,000
|
|
Emme Aronson
|
|
|
|
50,000
|
|
Susan Moses
|
|
|
|
50,000
|
|
Laurel Moody
|
|
99,000
|
|
|
|
Required Vote
The affirmative vote of a majority of the votes cast by holders of
Voting Stock present in person or represented by proxy and entitled
to vote thereon at the Special Meeting is required to approve the
increase in reserve under the 2017 Consultant Plan.
RECOMMENDATION OF THE
BOARD FOR PROPOSAL NO. 1:
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO THE
COMPANY’S 2017 CONSULTANT EQUITY INCENTIVE PLAN TO INCREASE
THE RESERVATION OF COMMON STOCK FOR ISSUANCE THEREUNDER TO
4,500,000 SHARES FROM 3,000,000 SHARES
9
PROPOSAL 2:
APPROVAL OF AN AMENDMENT
TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF THE COMPANY’S
COMMON STOCK
FROM 50,000,000 SHARES TO 100,000,000 SHARES
The Board deems it advisable and in the best interest of the
Company to file an amendment to the Company’s Certificate of
Incorporation to increase the authorized number of shares of the
Company’s Common Stock from 50,000,000 shares to 100,000,000
shares (the “Amendment”).
The form of Amendment to be filed with the Delaware Secretary of
State is set forth in
Appendix A
to this Proxy Statement (subject to any changes
required by applicable law and provided that, since Proposals 2 and
3 will result in changes to the Certificate of Incorporation, the
Company may file one or more amendments with the Delaware Secretary
of State to effect multiple approved proposals).
The terms of the additional shares of Common Stock will be
identical to those of the currently outstanding shares of Common
Stock. However, because holders of Common Stock have no preemptive
rights to purchase or subscribe for any unissued stock of the
Company, the issuance of additional shares of Common Stock will
reduce the current stockholders’ percentage ownership
interest in the total outstanding shares of Common Stock. This
Common Stock increase and the creation of additional shares of
authorized Common Stock will not alter the current number of issued
shares. (A separate proposal, however, for the Reverse Stock Split,
may, if approved, reduce the number of issued shares. See Proposal
No. 3.) The relative rights and limitations of the shares of Common
Stock will remain unchanged under this Amendment.
Reasons for the
Amendment
The Board believes that the availability of additional authorized
shares of Common Stock will provide the Company with additional
flexibility to issue Common Stock for a variety of general
corporate purposes as the Board may determine to be desirable
including, without limitation, stock splits (including splits
effected through the declaration of stock dividends), raising
capital, future financings, investment opportunities, licensing
agreements, acquisitions, or other distributions. The Board has not
authorized the Company to take any action with respect to the
shares that would be authorized under this proposal, and the
Company currently does not have any definitive plans, arrangements
or understandings with respect to the issuance of the additional
shares of Common Stock authorized by the Amendment.
Effects of the
Amendment
Following the filing of the Amendment with the Delaware Secretary
of State, we will have the authority to issue 50,000,000 additional
shares of Common Stock. Subject to limitations imposed by the
Nasdaq Stock Market, these shares may be issued without stockholder
approval at any time, in the sole discretion of our Board of
Directors. The authorized and unissued shares may be issued for
cash, to acquire property or for any other purpose that is deemed
in the best interests of the Company.
In addition, the Amendment could have a number of effects on the
Company’s stockholders depending upon the exact nature and
circumstances of any actual issuances of authorized but unissued
shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by
applicable law) in one or more transactions that could make a
change in control or takeover of the Company more difficult. For
example, additional shares could be issued by the Company so as to
dilute the stock ownership or voting rights of persons seeking to
obtain control of the Company, even if the persons seeking to
obtain control of the Company offer an above-market premium that is
favored by a majority of the independent stockholders. Similarly,
the issuance of additional shares to certain persons allied with
the Company’s management could have the effect of making it
more difficult to remove the Company’s current management by
diluting the stock ownership or voting rights of persons seeking to
cause such removal. The Board of Directors is not aware of any
attempt, or contemplated attempt, to acquire control of the
Company, and this proposal is not being presented with the intent
that it be utilized as a type of anti-takeover device. The
Amendment has been prompted by business and financial
considerations.
The Amendment will not change the number of shares of Common Stock
outstanding, nor will it have any immediate dilutive effect or
change the rights of current holders of the Company’s Common
Stock. However,
10
the issuance of additional shares of Common Stock authorized by the
Amendment may occur at times or under circumstances as to have a
dilutive effect on earnings per share, book value per share or the
percentage voting or ownership interest of the present holders of
the Company’s Common Stock.
Procedure for
Implementing the Amendment
The increase in authorized Common Stock will become effective upon
the filing or such later time as specified in the filing of the
Amendment with the Delaware Secretary of State. The form of the
Amendment is attached hereto as
Appendix A
. The exact timing of the filing of the Amendment
will be determined by our Board of Directors based on its
evaluation as to when such action will be the most advantageous to
the Company and our stockholders.
Required Vote
Approval of the amendment to the Certificate of Incorporation to
increase the authorized number of shares of Common Stock requires
the receipt of the affirmative vote of a majority of the Voting
Stock as of the Record Date.
RECOMMENDATION OF THE
BOARD FOR PROPOSAL NO. 2:
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO THE
COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF THE COMPANY’S COMMON STOCK
FROM 50,000,000 SHARES TO 100,000,000 SHARES
11
PROPOSAL 3:
GRANT OF AUTHORITY FOR A
REVERSE SPLIT OF
THE COMPANY’S COMMON STOCK
The Board deems it advisable and in the best interest of the
Company that the Board be granted the discretionary authority to
amend the Company’s Certificate of Incorporation to effect
the Reverse Stock Split of the Company’s issued and
outstanding Common Stock as described below (the “Reverse
Stock Split Amendment”).
The form of Reverse Stock Split Amendment to be filed with the
Delaware Secretary of State is set forth in
Appendix B
(subject to any changes required by applicable
law and provided that, since Proposals 2 and 3 will result in
changes to the Certificate of Incorporation, the Company may file
one or more amendments with the Delaware Secretary of State to
effect multiple approved proposals).
Approval of the proposal would permit (but not require) our Board
of Directors to effect one or more reverse stock splits of our
issued and outstanding common stock by a ratio of not less than
one-for-two and not more than one-for-ten, with the exact ratio to
be set at a number within this range as determined by our Board of
Directors in its sole discretion, provided that the Board of
Directors determines to effect the Reverse Stock Split and such
amendment is filed with the appropriate authorities in the State of
Delaware no later than December 18, 2018. The Company shall not
effect Reverse Stock Splits that, in the aggregate, exceeds
one-for-ten. We believe that enabling our Board of Directors to set
the ratio within the stated range will provide us with the
flexibility to implement the Reverse Stock Split in a manner
designed to maximize the anticipated benefits for our Stockholders.
In determining a ratio, if any, our Board of Directors may
consider, among other things, factors such as:
•
the initial or continuing listing requirements of various stock
exchanges, including the Nasdaq Capital Market;
•
the historical trading price and trading volume of our Common
Stock;
•
the number of shares of our Common Stock outstanding;
•
the then-prevailing trading price and trading volume of our Common
Stock and the anticipated impact of the Reverse Stock Split on the
trading market for our Common Stock;
•
the anticipated impact of a particular ratio on our ability to
reduce administrative and transactional costs; and
•
prevailing general market and economic conditions.
Our Board of Directors reserves the right to elect to abandon the
Reverse Stock Split, including any or all proposed reverse stock
split ratios, if it determines, in its sole discretion, that the
Reverse Stock Split is no longer in the best interests of the
Company and its stockholders.
Depending on the ratio for the Reverse Stock Split determined by
our Board of Directors, no less than two and no more than ten
shares of existing Common Stock, as determined by our Board of
Directors, will be combined into one share of Common Stock. The
Company shall not effect Reverse Stock Splits that, in the
aggregate, exceed one-for-ten. Our Board of Directors will have the
discretionary authority to determine whether to arrange for the
disposition of fractional interests by holder entitled thereto, to
pay in cash the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined, or to
entitle holders to receive from the Company transfer agent, in lieu
of any fractional share, the number of shares rounded up to the
next whole number. The amendment to our Certificate of
Incorporation to effect a Reverse Stock Split, if any, will include
only the reverse split ratio determined by our Board of Directors
to be in the best interests of our Stockholders and all of the
other proposed amendments at different ratios will be
abandoned.
Reasons for the Reverse
Stock Split; Potential Consequences of the Reverse Stock
Split
The Company’s primary reasons for approving and recommending
the Reverse Stock Split are to make the Common Stock more
attractive to certain institutional investors, which would provide
for a stronger investor base and to increase the per share price
and bid price of our Common Stock to regain compliance with the
continued listing requirements of Nasdaq.
12
On September 26, 2017, the Company received a written notice from
Nasdaq that it is not in compliance with Nasdaq Listing Rule
5550(a)(2), as the minimum bid price of the Company’s Common
Stock had been below $1.00 per share for 30 consecutive business
days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the
Company has a period of 180 calendar days, or until March 26, 2018,
to regain compliance with the minimum bid price requirement. To
regain compliance, the closing bid price of the Company’s
Common Stock must meet or exceed $1.00 per share for at least 10
consecutive business days during this 180 calendar day period. On
January 22, 2018, the Company received a written notice from Nasdaq
that it is currently in compliance with the minimum bid price
requirement as the closing bid price of the Company’s Common
Stock met/exceeded $1.00 per share for at least
10 consecutive
business days; however, there can be no assurance that the Company
will remain in compliance with the minimum bid price requirement in
the future.
Reducing the number of outstanding shares of Common Stock should,
absent other factors, generally increase the per share market price
of the Common Stock. Although the intent of the Reverse Stock Split
is to increase the price of the Common Stock, there can be no
assurance, however, that even if the Reverse Stock Split is
effected, that the Company’s bid price of the Company’s
Common Stock will be sufficient for the Company to maintain
compliance with the Nasdaq minimum bid price requirement in the
event that the Company’s Common Stock does not, in the
future, comply with the minimum bid price requirement.
In addition, the Company believes the Reverse Stock Split will make
its Common Stock more attractive to a broader range of investors,
as it believes that the current market price of the Common Stock
may prevent certain institutional investors, professional investors
and other members of the investing public from purchasing stock.
Many brokerage houses and institutional investors have internal
policies and practices that either prohibit them from investing in
low-priced stocks or tend to discourage individual brokers from
recommending low-priced stocks to their customers. Furthermore,
some of those policies and practices may function to make the
processing of trades in low-priced stocks economically unattractive
to brokers. Moreover, because brokers’ commissions on
low-priced stocks generally represent a higher percentage of the
stock price than commissions on higher-priced stocks, the current
average price per share of Common Stock can result in individual
stockholders paying transaction costs representing a higher
percentage of their total share value than would be the case if the
share price were higher. The Company believes that the Reverse
Stock Split will make the Common Stock a more attractive and cost
effective investment for many investors, which in turn would
enhance the liquidity of the holders of Common Stock.
Reducing the number of outstanding shares of our Common Stock
through the Reverse Stock Split is intended, absent other factors,
to increase the per share market price of our Common Stock.
However, other factors, such as our financial results, market
conditions and the market perception of our business may adversely
affect the market price of our Common Stock. As a result, there can
be no assurance that the Reverse Stock Split, if completed, will
result in the intended benefits described above, that the market
price of our Common Stock will increase following the Reverse Stock
Split, that as a result of the Reverse Stock Split we will be able
to meet or maintain a bid price over the minimum bid price
requirement of Nasdaq or that the market price of our Common Stock
will not decrease in the future. Additionally, we cannot assure you
that the market price per share of our Common Stock after the
Reverse Stock Split will increase in proportion to the reduction in
the number of shares of our Common Stock outstanding before the
Reverse Stock Split. Accordingly, the total market capitalization
of our Common Stock after the Reverse Stock Split may be lower than
the total market capitalization before the Reverse Stock Split.
Procedure for
Implementing the Reverse Stock Split
The Reverse Stock Split will become effective upon the filing or
such later time as specified in the filing (the “Effective
Time”) of the Reverse Stock Split Amendment with the Delaware
Secretary of State. The form of the Reverse Stock Split Amendment
is attached hereto as
Appendix B
. The exact timing of the filing of the Reverse
Stock Split Amendment and the ratio of the Reverse Stock Split
(within the approved range) will be determined by our Board of
Directors based on its evaluation as to when such action and at
what ratio will be the most advantageous to the Company and our
stockholders. In addition, our Board of Directors reserves the
right, notwithstanding stockholder approval and without further
action by the stockholders, to elect not to proceed with the
Reverse Stock Split if, at any time prior to filing the Reverse
Stock Split Amendment, our Board of Directors, in its sole
discretion, determines that it is no longer in our best interest
and the best interests of our stockholders to proceed with the
Reverse Stock Split. If the Reverse Stock Split Amendment has not
been filed with the Delaware Secretary of State by December 18,
2018, our Board of Directors will abandon the Reverse Stock
Split.
13
Effect of the Reverse
Stock Split on Holders of Outstanding Common Stock
Depending on the ratio for the Reverse Stock Split determined by
our Board of Directors, a minimum of two and a maximum of ten
shares in aggregate of existing Common Stock will be combined into
one new share of Common Stock. Based on 18,406,245 shares of Common
Stock issued and outstanding as of the Record Date, immediately
following the reverse split the Company would have approximately
9,203,123 shares of Common Stock issued and outstanding (without
giving effect to rounding for fractional shares) if the ratio for
the reverse split is 1-for-2, approximately 3,681,249 shares of
Common Stock issued and outstanding (without giving effect to
rounding for fractional shares) if the ratio for the reverse split
is 1-for-5, and approximately 1,840,625 shares of Common Stock
issued and outstanding (without giving effect to rounding for
fractional shares) if the ratio for the reverse split is 1-for-10,
which is the aggregate ratio allowed under this proposal. Any other
ratios selected within such range would result in a number of
shares of Common Stock issued and outstanding following the
transaction between 9,203,123 and 1,840,625 shares. The foregoing
does not give effect to (i) 3,115,500
3
shares of Common
Stock issuable upon exercise of outstanding options as of the
Record Date and (ii) 2,480,605
4
shares of Common Stock
issuable upon exercise of outstanding warrants as of the Record
Date.
The actual number of shares issued after giving effect to the
Reverse Stock Split, if implemented, will depend on the Reverse
Stock Split ratio and the number of Reverse Stock Splits, if any,
that are ultimately determined by our Board of Directors.
The Reverse Stock Split will affect all holders of our Common Stock
uniformly and will not affect any stockholder’s percentage
ownership interest in the Company, except that as described below
in “— Fractional Shares,” record holders of
Common Stock otherwise entitled to a fractional share as a result
of the Reverse Stock Split will be rounded up to the next whole
number. In addition, the Reverse Stock Split will not affect any
stockholder’s proportionate voting power (subject to the
treatment of fractional shares).
The Reverse Stock Split may result in some stockholders owning
“odd lots” of less than 100 shares of Common Stock. Odd
lot shares may be more difficult to sell, and brokerage commissions
and other costs of transactions in odd lots are generally somewhat
higher than the costs of transactions in “round lots”
of even multiples of 100 shares.
After the Effective Time, our Common Stock will have new Committee
on Uniform Securities Identification Procedures
(“CUSIP”) numbers, which is a number used to identify
our equity securities, and stock certificates with the older CUSIP
numbers will need to be exchanged for stock certificates with the
new CUSIP numbers by following the procedures described below.
After the Effective Time, we will continue to be subject to the
periodic reporting and other requirements of the Securities
Exchange Act of 1934 and our Common Stock will continue to be
quoted on the Nasdaq Capital Market under the symbol
“MYSZ”. The Reverse Stock Split is not intended as, and
will not have the effect of, a “going private
transaction” as described by Rule 13e-3 under the Exchange
Act.
After the Effective Time of the Reverse Stock Split, the post-split
market price of our Common Stock may be less than the pre-split
price multiplied by the Reverse Stock Split ratio. In addition, a
reduction in number of shares outstanding may impair the liquidity
for our Common Stock, which may reduce the value of our Common
Stock.
Authorized Shares of
Common Stock
The Reverse Stock Split will not change the number of authorized
shares of the Company’s Common Stock under the
Company’s Certificate of Incorporation. (A separate proposal,
however, may, if approved, increase our authorized shares of common
stock from 50,000,000 to 100,000,000. See Proposal 2.) Because the
number of issued and outstanding shares of Common Stock will
decrease, the number of shares of Common Stock remaining
available
14
for issuance will increase. Currently, under our Certificate of
Incorporation, our authorized capital stock consists of 50,000,000
shares of Common Stock.
Subject to limitations imposed by Nasdaq, the additional shares
available for issuance may be issued without stockholder approval
at any time, in the sole discretion of our Board of Directors. The
authorized and unissued shares may be issued for cash, for
acquisitions or for any other purpose that is deemed in the best
interests of the Company.
By increasing the number of authorized but unissued shares of
Common Stock, the Reverse Stock Split could, under certain
circumstances, have an anti-takeover effect, although this is not
the intent of the Board of Directors. For example, it may be
possible for the Board of Directors to delay or impede a takeover
or transfer of control of the Company by causing such additional
authorized but unissued shares to be issued to holders who might
side with the Board of Directors in opposing a takeover bid that
the Board of Directors determines is not in the best interests of
the Company or its stockholders. The Reverse Stock Split therefore
may have the effect of discouraging unsolicited takeover attempts.
By potentially discouraging initiation of any such unsolicited
takeover attempts the Reverse Stock Split may limit the opportunity
for the Company’s stockholders to dispose of their shares at
the higher price generally available in takeover attempts or that
may be available under a merger proposal. The Reverse Stock Split
may have the effect of permitting the Company’s current
management, including the current Board of Directors, to retain its
position, and place it in a better position to resist changes that
stockholders may wish to make if they are dissatisfied with the
conduct of the Company’s business. However, the Board of
Directors is not aware of any attempt to take control of the
Company and the Board of Directors has not approved the Reverse
Stock Split with the intent that it be utilized as a type of
anti-takeover device.
Beneficial Holders of
Common Stock (i.e. stockholders who hold in street name)
Upon the implementation of the Reverse Stock Split, we intend to
treat shares held by stockholders through a bank, broker, custodian
or other nominee in the same manner as registered stockholders
whose shares are registered in their names. Banks, brokers,
custodians or other nominees will be instructed to effect the
Reverse Stock Split for their beneficial holders holding our Common
Stock in street name. However, these banks, brokers, custodians or
other nominees may have different procedures than registered
stockholders for processing the Reverse Stock Split. Stockholders
who hold shares of our Common Stock with a bank, broker, custodian
or other nominee and who have any questions in this regard are
encouraged to contact their banks, brokers, custodians or other
nominees.
Registered
“Book-Entry” Holders of Common Stock (i.e. stockholders
that are registered on the transfer agent’s books and records
but do not hold stock certificates)
Certain of our registered holders of Common Stock may hold some or
all of their shares electronically in book-entry form with the
transfer agent. These stockholders do not have stock certificates
evidencing their ownership of the Common Stock. They are, however,
provided with a statement reflecting the number of shares
registered in their accounts.
Stockholders who hold shares electronically in book-entry form with
the transfer agent will not need to take action (the exchange will
be automatic) to receive whole shares of post-Reverse Stock Split
Common Stock, subject to adjustment for treatment of fractional
shares.
Holders of Certificated
Shares of Common Stock
Stockholders holding shares of our Common Stock in certificated
form will be sent a transmittal letter by our transfer agent after
the Effective Time. The letter of transmittal will contain
instructions on how a stockholder should surrender his, her or its
certificate(s) representing shares of our Common Stock (the
“Old Certificates”) to the transfer agent in exchange
for certificates representing the appropriate number of whole
shares of post-Reverse Stock Split Common Stock (the “New
Certificates”). No New Certificates will be issued to a
stockholder until such stockholder has surrendered all Old
Certificates, together with a properly completed and executed
letter of transmittal, to the transfer agent. No stockholder will
be required to pay a transfer or other fee to exchange his, her or
its Old Certificates. Stockholders will then receive a New
Certificate(s) representing the number of whole shares of Common
Stock that they are entitled as a result of the Reverse Stock
Split, subject to the treatment of fractional shares described
below. Until surrendered, we will deem outstanding Old Certificates
held by stockholders to be cancelled and only to represent the
number of whole shares of post-Reverse Stock Split Common Stock to
which
15
these stockholders are entitled, subject to the treatment of
fractional shares. Any Old Certificates submitted for exchange,
whether because of a sale, transfer or other disposition of stock,
will automatically be exchanged for New Certificates. If an Old
Certificate has a restrictive legend on the back of the Old
Certificate(s), the New Certificate will be issued with the same
restrictive legends that are on the back of the Old
Certificate(s).
The Company expects that our transfer agent will act as exchange
agent for purposes of implementing the exchange of stock
certificates. No service charges will be payable by holders of
shares of Common Stock in connection with the exchange of
certificates. All of such expenses will be borne by the
Company.
STOCKHOLDERS SHOULD NOT
DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK
CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional
Shares
The Board of Directors will have the discretionary authority to
determine whether to arrange for the disposition of fractional
interests by stockholders entitled thereto, to pay in cash the fair
value of fractions of a share as of the time when those entitled to
receive such fractions are determined, or to entitle stockholders
to receive from the Company’s transfer agent, in lieu of any
fractional share, the number of shares rounded up to the next whole
number.
If the Board of Directors determines to arrange for the disposition
of fractional interests by stockholders entitled thereto or to pay
in cash the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined,
stockholders who would otherwise hold fractional shares because the
number of shares of Common Stock they hold before the Reverse Stock
Split is not evenly divisible by the ratio ultimately selected by
the Board of Directors will be entitled to receive cash (without
interest or deduction) in lieu of such fractional shares from
either: (i) the Company, upon receipt by the transfer agent of a
properly completed and duly executed transmittal letter and, where
shares are held in certificated form, upon due surrender of any
certificate previously representing a fractional share, in an
amount equal to such holder’s fractional share based upon the
closing sale price of the Common Stock on the trading day
immediately prior to the Effective Time as reported on the Nasdaq
Capital Market, or other principal market of the Common Stock, as
applicable, as of the date the Reverse Stock Split is effected; or
(ii) the transfer agent, upon receipt by the transfer agent of a
properly completed and duly executed transmittal letter and, where
shares are held in certificated form, the surrender of all old
certificate(s), in an amount equal to the proceeds attributable to
the sale of such fractional shares following the aggregation and
sale by the transfer agent of all fractional shares otherwise
issuable. If the Board of Directors determines to dispose of
fractional interests pursuant to clause (ii) above, the Company
expects that the transfer agent would conduct the sale in an
orderly fashion at a reasonable pace and that it may take several
days to sell all of the aggregated fractional shares of Common
Stock. In this event, such holders would be entitled to an amount
equal to their pro rata share of the proceeds of such sale. The
Company will be responsible for any brokerage fees or commissions
related to the transfer agent’s open market sales of shares
that would otherwise be fractional shares.
The ownership of a fractional share interest following the Reverse
Stock Split will not give the holder any voting, dividend or other
rights, except to receive the cash payment, or, if the Board of
Directors so determines, to receive the number of shares rounded up
to the next whole number, as described above.
Stockholders should be aware that, under the escheat laws of
various jurisdictions, sums due for fractional interests that are
not timely claimed after the effective time of the Reverse Stock
Split may be required to be paid to the designated agent for each
such jurisdiction, unless correspondence has been received by the
Company or the transfer agent concerning ownership of such funds
within the time permitted in such jurisdiction. Thereafter, if
applicable, stockholders otherwise entitled to receive such funds,
but who do not receive them due to, for example, their failure to
timely comply with the transfer agent’s instructions, will
have to seek to obtain such funds directly from the state to which
they were paid.
Effect of the Reverse
Stock Split on Employee and Consultant Plans, Options, Restricted
Stock Awards and Units, Warrants, and Convertible or Exchangeable
Securities
Based upon the Reverse Stock Split ratio determined by the Board of
Directors, proportionate adjustments are generally required to be
made to the per share exercise price and the number of shares
issuable upon the exercise or conversion of all outstanding
options, warrants, convertible or exchangeable securities entitling
the holders to
16
purchase, exchange for, or convert into, shares of Common Stock.
This would result in approximately the same aggregate price being
required to be paid under such options, warrants, convertible or
exchangeable securities upon exercise, and approximately the same
value of shares of Common Stock being delivered upon such exercise,
exchange or conversion, immediately following the Reverse Stock
Split as was the case immediately preceding the Reverse Stock
Split. The number of shares deliverable upon settlement or vesting
of restricted stock awards will be similarly adjusted, subject to
our treatment of fractional shares. The number of shares reserved
for issuance pursuant to these securities will be proportionately
based upon the Reverse Stock Split determined by the Board of
Directors, subject to our treatment of fractional shares.
Accounting
Matters
The Reverse Stock Split Amendment will not affect the par value of
our Common Stock per share, which will remain $0.001 par value per
share. As a result, as of the Effective Time, the stated capital
attributable to Common Stock and the additional paid-in capital
account on our balance sheet, on aggregate, will not change due to
the Reverse Stock Split. Reported per share net income or loss will
be higher because there will be fewer shares of Common Stock
outstanding.
Certain Federal Income
Tax Consequences of the Reverse Stock Split
The following summary describes certain material U.S. federal
income tax consequences of the Reverse Stock Split to holders of
our Common Stock
Unless otherwise specifically indicated herein, this summary
addresses the tax consequences only to a beneficial owner of our
Common Stock that is a citizen or individual resident of the United
States, a corporation organized in or under the laws of the United
States or any state thereof or the District of Columbia or
otherwise subject to U.S. federal income taxation on a net income
basis in respect of our Common Stock (a “U.S. holder”).
A trust may also be a U.S. holder if (1) a U.S. court is able to
exercise primary supervision over administration of such trust and
one or more U.S. persons have the authority to control all
substantial decisions of the trust or (2) it has a valid election
in place to be treated as a U.S. person. An estate whose income is
subject to U.S. federal income taxation regardless of its source
may also be a U.S. holder. This summary does not address all of the
tax consequences that may be relevant to any particular investor,
including tax considerations that arise from rules of general
application to all taxpayers or to certain classes of taxpayers or
that are generally assumed to be known by investors. This summary
also does not address the tax consequences to (i) persons that may
be subject to special treatment under U.S. federal income tax law,
such as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt
organizations, U.S. expatriates, persons subject to the alternative
minimum tax, traders in securities that elect to mark to market and
dealers in securities or currencies, (ii) persons that hold our
Common Stock as part of a position in a “straddle” or
as part of a “hedging,” “conversion” or
other integrated investment transaction for federal income tax
purposes, or (iii) persons that do not hold our Common Stock as
“capital assets” (generally, property held for
investment).
If a partnership (or other entity classified as a partnership for
U.S. federal income tax purposes) is the beneficial owner of our
Common Stock, the U.S. federal income tax treatment of a partner in
the partnership will generally depend on the status of the partner
and the activities of the partnership. Partnerships that hold our
Common Stock, and partners in such partnerships, should consult
their own tax advisors regarding the U.S. federal income tax
consequences of the Reverse Stock Split.
This summary is based on the provisions of the Code, U.S. Treasury
regulations, administrative rulings and judicial authority, all as
in effect as of the date of this information statement. Subsequent
developments in U.S. federal income tax law, including changes in
law or differing interpretations, which may be applied
retroactively, could have a material effect on the U.S. federal
income tax consequences of the Reverse Stock Split.
PLEASE CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL,
STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE
REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE
INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING
JURISDICTION.
17
U.S. Holders
The Reverse Stock Split should be treated as a recapitalization for
U.S. federal income tax purposes. Therefore, a stockholder
generally will not recognize gain or loss on the Reverse Stock
Split, except to the extent of cash, if any, received in lieu of a
fractional share interest in the post-Reverse Stock Split shares.
The aggregate tax basis of the post-split shares received will be
equal to the aggregate tax basis of the pre-split shares exchanged
therefore (excluding any portion of the holder’s basis
allocated to fractional shares), and the holding period of the
post-split shares received will include the holding period of the
pre-split shares exchanged. A holder of the pre-split shares who
receives cash will generally recognize gain or loss equal to the
difference between the portion of the tax basis of the pre-split
shares allocated to the fractional share interest and the cash
received. Such gain or loss will be a capital gain or loss and will
be short term if the pre-split shares were held for one year or
less and long term if held more than one year. No gain or loss will
be recognized by us as a result of the Reverse Stock Split.
No Appraisal
Rights
Under Delaware law and our charter documents, holders of our Common
Stock will not be entitled to dissenter’s rights or appraisal
rights with respect to the Reverse Stock Split.
Required Vote
The affirmative vote of a majority of the votes cast by holders of
Voting Stock entitled to vote as of the Record Date is required to
approve the amendment to our Certificate of Incorporation to
implement the Reverse Split.
RECOMMENDATION OF THE
BOARD FOR PROPOSAL NO. 3:
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR GRANT OF AUTHORITY FOR A REVERSE SPLIT OF THE
COMPANY’S COMMON STOCK
18
PROPOSAL 4:
APPROVAL OF ISSUANCE OF
SECURITIES IN ONE OR MORE NON-PUBLIC OFFERINGS WHERE
THE MAXIMUM DISCOUNT AT WHICH SECURITIES WILL BE OFFERED WILL BE
EQUIVALENT
TO A DISCOUNT OF 20% BELOW THE MARKET PRICE OF OUR COMMON STOCK
IN
ACCORDANCE WITH NASDAQ MARKETPLACE RULE 5635(d)
Our Common Stock is currently listed on the Nasdaq Capital Market
and, as such, we are subject to Nasdaq Marketplace Rules. Nasdaq
Marketplace Rule 5635(d) (“Rule 5635(d)”) requires us
to obtain stockholder approval prior to the issuance of our Common
Stock in connection with certain non-public offerings involving the
sale, issuance or potential issuance by the Company of Common Stock
(and/or securities convertible into or exercisable for Common
Stock) equal to 20% or more of the common stock outstanding before
the issuance. Shares of our Common Stock issuable upon the exercise
or conversion of warrants, options, debt instruments or other
equity securities issued or granted in such non-public offerings
will be considered shares issued in such a transaction in
determining whether the 20% limit has been reached, except in
certain circumstances such as issuing warrants that are not
exercisable for a minimum of six months and have an exercise price
that exceeds market value.
We may seek to raise additional capital to implement our business
strategy and enhance our overall capitalization. We have not
determined the particular terms for such prospective offerings.
Because we may seek additional capital that triggers the
requirements of Rule 5635(d), we are seeking stockholder approval
now, so that we will be able to move quickly to take full advantage
of any opportunities that may develop in the equity markets.
We hereby submit this Proposal 4 to our stockholders for their
approval of the potential issuance of shares of our Common Stock,
or securities convertible into our Common Stock, in one or more
non-public capital-raising transactions, or offerings, subject to
the following limitations:
•
The aggregate number of shares issued in the offerings will not
exceed 8,000,000 shares of our Common Stock, subject to adjustment
for any reverse stock split effected prior to the offerings
(including pursuant to options, warrants, convertible debt or other
securities exercisable for or convertible into Common Stock) (See
Proposal 3);
•
The total aggregate consideration will not exceed $25 million;
•
The maximum discount at which securities will be offered (which may
consist of a share of Common Stock and a warrant for the issuance
of up to an additional share of Common Stock) will be equivalent to
a discount of 20% below the market price of our Common Stock at the
time of issuance in recognition of the historical volatility making
the pricing discount of our stock required by investors at any
particular time difficult, at this time, to predict. For example,
as reported in our Annual Report on Form 10-K filed with the SEC on
April 14, 2017, the range of high and low closing prices for our
Common Stock as reported by the Nasdaq Capital Market, for the
period July 25, 2016 (the date on which our Common Stock began
trading on the Nasdaq Capital Market) through April 12, 2017 was
$16.70 and $1.95, respectively.
•
Such offerings will occur, if at all, on or before February 12,
2019; and
•
Such other terms as the Board of Directors shall deem to be in the
best interests of the Company and its stockholders, not
inconsistent with the foregoing.
The issuance of shares of our Common Stock, or other securities
convertible into shares of our Common Stock, in accordance with any
offerings would dilute, and thereby reduce, each existing
stockholder’s proportionate ownership in our Common Stock.
The stockholders do not have preemptive rights to subscribe to
additional shares that may be issued by the Company in order to
maintain their proportionate ownership of the Common Stock.
The issuance of shares of Common Stock in one or more non-public
offerings could have an anti-takeover effect. Such issuance could
dilute the voting power of a person seeking control of the Company,
thereby deterring or rendering more difficult a merger, tender
offer, proxy contest or an extraordinary corporate transaction
opposed by the Company.
19
The Board of Directors has not yet determined the terms and
conditions of any offerings. As a result, the level of potential
dilution cannot be determined at this time, but as discussed above,
we may not issue more than 8,000,000 shares of Common Stock in the
aggregate pursuant to the authority requested from stockholders
under this proposal, subject to adjustment for any Reverse Stock
Split. (See Proposal 3). It is possible that if we conduct a
non-public stock offering, some of the shares we sell could be
purchased by one or more investors who could acquire a large block
of our Common Stock. This would concentrate voting power in the
hands of a few stockholders who could exercise greater influence on
our operations or the outcome of matters put to a vote of
stockholders in the future.
We cannot determine what the actual net proceeds of the offerings
will be until they are completed, but as discussed above, the
aggregate dollar amount of the non-public offerings will be no more
than $10 million. If all or part of the offerings is completed, the
net proceeds will be used for general corporate purposes. We
currently have no arrangements or understandings regarding any
specific transaction with investors, so we cannot predict whether
we will be successful should we seek to raise capital through any
offerings.
No Appraisal
Rights
Under the Delaware General Corporation Law, our stockholders are
not entitled to appraisal rights with respect to the issuance of
securities in on or more non-public offerings, and we will not
independently provide our stockholders with any such rights.
Required Vote
The affirmative vote of a majority of the votes cast for this
proposal is required to approve the issuance of securities in one
or more non-public offerings, as required by and in accordance with
Nasdaq Marketplace Rule 5635(d).
RECOMMENDATION OF THE
BOARD FOR PROPOSAL NO. 4:
THE BOARD RECOMMENDS A
VOTE FOR THE ISSUANCE OF SECURITIES IN ONE OR MORE NON-PUBLIC
OFFERINGS WHERE THE MAXIMUM DISCOUNT AT WHICH SECURITIES WILL BE
OFFERED WILL BE EQUIVALENT TO A DISCOUNT OF 20% BELOW THE MARKET
PRICE OF OUR COMMON STOCK IN ACCORDANCE WITH NASDAQ MARKETPLACE
RULE 5635(d)
20
PROPOSAL 5:
APPROVAL OF ISSUANCE OF
SECURITIES IN ONE OR MORE NON-PUBLIC OFFERINGS WHERE
THE MAXIMUM DISCOUNT AT WHICH SECURITIES WILL BE OFFERED WILL BE
EQUIVALENT
TO A DISCOUNT OF 15% BELOW THE MARKET PRICE OF OUR COMMON STOCK
IN
ACCORDANCE WITH NASDAQ MARKETPLACE RULE 5635(d)
In the event that the stockholders do not approve Proposal 4, the
Board recommends the stockholders approve the following proposal
which is identical to Proposal 4 except that the maximum discount
at which securities of the Company will be offered will be
equivalent to a discount of 15% below the market price for our
Common Stock at the time of issuance. The Board of Directors
desires to give the Company’s stockholders a meaningful
opportunity to make an informed decision regarding the maximum
discount below the market price for our Common Stock to be
authorized for future issuance consistent with the principles
adopted by Nasdaq and believes providing stockholders several
options permits a meaningful informed decision. In the event both
Proposal 4 and Proposal 5 are approved by stockholders, only
Proposal 4 shall be deemed to have any effect.
Our Common Stock is currently listed on the Nasdaq Capital Market
and, as such, we are subject to Nasdaq Marketplace Rules. Nasdaq
Marketplace Rule 5635(d) (“Rule 5635(d)”) requires us
to obtain stockholder approval prior to the issuance of our Common
Stock in connection with certain non-public offerings involving the
sale, issuance or potential issuance by the Company of Common Stock
(and/or securities convertible into or exercisable for Common
Stock) equal to 20% or more of the common stock outstanding before
the issuance. Shares of our Common Stock issuable upon the exercise
or conversion of warrants, options, debt instruments or other
equity securities issued or granted in such non-public offerings
will be considered shares issued in such a transaction in
determining whether the 20% limit has been reached, except in
certain circumstances such as issuing warrants that are not
exercisable for a minimum of six months and have an exercise price
that exceeds market value.
We may seek to raise additional capital to implement our business
strategy and enhance our overall capitalization. We have not
determined the particular terms for such prospective offerings.
Because we may seek additional capital that triggers the
requirements of Rule 5635(d), we are seeking stockholder approval
now, so that we will be able to move quickly to take full advantage
of any opportunities that may develop in the equity markets.
We hereby submit this Proposal 4 to our stockholders for their
approval of the potential issuance of shares of our Common Stock,
or securities convertible into our Common Stock, in one or more
non-public capital-raising transactions, or offerings, subject to
the following limitations:
•
The aggregate number of shares issued in the offerings will not
exceed 8,000,000 shares of our Common Stock, subject to adjustment
for any reverse stock split effected prior to the offerings
(including pursuant to options, warrants, convertible debt or other
securities exercisable for or convertible into Common Stock) (See
Proposal 3);
•
The total aggregate consideration will not exceed $25 million;
•
The maximum discount at which securities will be offered (which may
consist of a share of Common Stock and a warrant for the issuance
of up to an additional share of Common Stock) will be equivalent to
a discount of 20% below the market price of our Common Stock at the
time of issuance in recognition of the historical volatility making
the pricing discount of our stock required by investors at any
particular time difficult, at this time, to predict. For example,
as reported in our Annual Report on Form 10-K filed with the SEC on
April 14, 2017, the range of high and low closing prices for our
Common Stock as reported by the Nasdaq Capital Market, for the
period July 25, 2016 (the date on which our Common Stock began
trading on the Nasdaq Capital Market) through April 12, 2017 was
$16.70 and $1.95, respectively.
•
Such offerings will occur, if at all, on or before February 12,
2019; and
•
Such other terms as the Board of Directors shall deem to be in the
best interests of the Company and its stockholders, not
inconsistent with the foregoing.
The issuance of shares of our Common Stock, or other securities
convertible into shares of our Common Stock, in accordance with any
offerings would dilute, and thereby reduce, each existing
stockholder’s proportionate ownership
21
in our Common Stock. The stockholders do not have preemptive rights
to subscribe to additional shares that may be issued by the Company
in order to maintain their proportionate ownership of the Common
Stock.
The issuance of shares of Common Stock in one or more non-public
offerings could have an anti-takeover effect. Such issuance could
dilute the voting power of a person seeking control of the Company,
thereby deterring or rendering more difficult a merger, tender
offer, proxy contest or an extraordinary corporate transaction
opposed by the Company.
The Board of Directors has not yet determined the terms and
conditions of any offerings. As a result, the level of potential
dilution cannot be determined at this time, but as discussed above,
we may not issue more than 8,000,000 shares of Common Stock in the
aggregate pursuant to the authority requested from stockholders
under this proposal, subject to adjustment for any Reverse Stock
Split. (See Proposal 3). It is possible that if we conduct a
non-public stock offering, some of the shares we sell could be
purchased by one or more investors who could acquire a large block
of our Common Stock. This would concentrate voting power in the
hands of a few stockholders who could exercise greater influence on
our operations or the outcome of matters put to a vote of
stockholders in the future.
We cannot determine what the actual net proceeds of the offerings
will be until they are completed, but as discussed above, the
aggregate dollar amount of the non-public offerings will be no more
than $10 million. If all or part of the offerings is completed, the
net proceeds will be used for general corporate purposes. We
currently have no arrangements or understandings regarding any
specific transaction with investors, so we cannot predict whether
we will be successful should we seek to raise capital through any
offerings.
No Appraisal
Rights
Under the Delaware General Corporation Law, our stockholders are
not entitled to appraisal rights with respect to the issuance of
securities in on or more non-public offerings, and we will not
independently provide our stockholders with any such rights.
Required Vote
The affirmative vote of a majority of the votes cast for this
proposal is required to approve the issuance of securities in one
or more non-public offerings, as required by and in accordance with
Nasdaq Marketplace Rule 5635(d).
RECOMMENDATION OF THE
BOARD FOR PROPOSAL NO. 5:
THE BOARD RECOMMENDS A
VOTE FOR THE ISSUANCE OF SECURITIES IN ONE OR MORE NON-PUBLIC
OFFERINGS WHERE THE MAXIMUM DISCOUNT AT WHICH SECURITIES WILL BE
OFFERED WILL BE EQUIVALENT TO A DISCOUNT OF 15% BELOW THE MARKET
PRICE OF OUR COMMON STOCK IN ACCORDANCE WITH NASDAQ MARKETPLACE
RULE 5635(d)
22
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented at the Special Meeting. If any other matters properly
come before the meeting, the persons named in the enclosed Proxy,
or their substitutes, will vote the shares represented thereby in
accordance with their judgment on such matters.
ADDITIONAL
INFORMATION
Proxy Solicitation
Costs
The proxies being solicited hereby are being solicited by the
Company. The Company will bear the entire cost of solicitation of
proxies, including preparation, assembly, printing and mailing of
the Notice, the Proxy Statement, the Proxy Card. Copies of
solicitation materials will be furnished to banks, brokerage
houses, fiduciaries and custodians holding in their names shares of
common stock beneficially owned by others to forward to such
beneficial owners. Officers and regular employees of the Company
may, but without compensation other than their regular
compensation, solicit proxies by further mailing facsimile or
electronic means. We will, upon request, reimburse brokerage firms
and others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of stock.
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By Order of the Board of Directors,
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/s/ Eliyahu Walles
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Eliyahu Walles
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Chairman of the Board of Directors
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23
Appendix A
Certificate of
Amendment
of
Amended and Restated Certificate of Incorporation
of
My Size, Inc.
Under Section 242 of the Delaware General Corporation Law
My Size, Inc., a corporation organized and existing under the laws
of the State of Delaware (the “Corporation”) hereby
certifies as follows:
FIRST: The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by replacing FIFTH in its entirety
with the following:
FIFTH: The total number of shares of stock which the Corporation
shall have authority to issue is one hundred million (100,000,000)
shares of common stock with a par value of $0.001 per share (the
“Common Stock”). The Common Stock may be issued from
time to time without action by the stockholders. The Common Stock
may be issued for consideration as may be fixed by the
Corporation’s Board of Directors (the “
Board of
Directors
”).
SECOND: The foregoing amendment has been duly adopted in accordance
with the provisions of Section 242 of the General Corporation law
of the State of Delaware by the vote of a majority of each class of
outstanding stock of the Corporation entitled to vote thereon.
IN WITNESS WHEREOF, I have signed this Certificate this __ day of
_________, 201__.
A-1
Appendix B
Certificate of
Amendment
of
Amended and Restated Certificate of Incorporation
of
My Size, Inc.
Under Section 242 of the Delaware General Corporation Law
My Size, Inc., a corporation organized and existing under the laws
of the State of Delaware (the “Corporation”) hereby
certifies as follows:
FIRST: The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by replacing FIFTH in its entirety
with the following:
FIFTH: The total number of shares of stock which the Corporation
shall have authority to issue is one hundred million 100,000,000
shares of common stock with a par value of $0.001 per share (the
“Common Stock”). The Common Stock may be issued from
time to time without action by the stockholders. The Common Stock
may be issued for consideration as may be fixed by the
Corporation’s Board of Directors (the “
Board of
Directors
”).
The foregoing amendment shall be effective as of _____ a.m., New
York City time on _____, 201__ (the “Effective Time”),
every _____ (_____) shares of the Corporation’s Common Stock
(the “Old Common Stock”), issued and outstanding
immediately prior to the Effective Time, will be automatically
reclassified as and converted into one (1) share of common stock,
par value $0.001 per share, of the Corporation (the “New
Common Stock”) (such formula herein, the “Determined
Ratio”). Further, every right, option and warrant to acquire
shares of Old Common Stock outstanding immediately prior to the
Effective Time shall, as of the Effective Time and without any
further action, automatically be reclassified into the right to
acquire one (1) share of New Common Stock based on the Determined
Ratio of shares of Old Common Stock to shares of New Common Stock,
but otherwise upon the terms of such right, option or warrant
(except that the exercise or purchase price of such right, option
or warrant shall be proportionately adjusted).
Notwithstanding the immediately preceding paragraph, the
Corporation shall not be required to issue or deliver any
fractional shares of New Common Stock. At the Effective Time any
such fractional interest in such shares of New Common Stock shall
be [converted into the right to receive, an amount in cash, without
interest, determined by multiplying (i) the closing sale price of
the Common Stock (on a post-reverse-split basis as adjusted for the
amendment effected hereby) on the trading day immediately prior to
the Effective Time as reported on the Nasdaq Capital Market by (ii)
such fractional share interest to which the holder would otherwise
be entitled]/[rounded up to the next whole share]. Shares of Common
Stock that were outstanding prior to the Effective Time and that
are not outstanding after the Effective Time shall resume the
status of authorized but unissued shares of Common Stock.
Each stock certificate that, immediately prior to the Effective
Time, represented shares of Old Common Stock shall, from and after
the Effective Time, represent that number of whole shares of New
Common Stock into which the shares of Old Common Stock represented
by such certificate shall have been reclassified (as well as the
right to receive [cash]/[whole shares] in lieu of any fractional
shares of New Common Stock as set forth above); provided, however,
that each holder of record of a certificate that represented shares
of Old Common Stock shall receive, upon surrender of such
certificate, a new certificate representing the number of whole
shares of New Common Stock into which the shares of Old Common
Stock represented by such certificate shall have been reclassified,
as well as any [cash]/[whole share] in lieu of fractional shares of
New Common Stock to which such holder may be entitled pursuant to
the immediately preceding paragraph.
SECOND: The foregoing amendment has been duly adopted in accordance
with the provisions of Section 242 of the General Corporation law
of the State of Delaware by the vote of a majority of each class of
outstanding stock of the Corporation entitled to vote thereon.
IN WITNESS WHEREOF, I have signed this Certificate this __ day of
_________, 201__.
B-1
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VOTE
ON INTERNET
Go to http://www.vstocktransfer.com/proxy and
log-on using the below control number.
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CONTROL #
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VOTE
BY MAIL
Mark, sign and date your proxy card and return
it in the envelope we have provided.
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* SPECIMEN *
1 MAIN STREET
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ANYWHERE PA 99999-9999
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VOTE
BY FAX
Mark, sign and date your proxy card and fax it
to 646-536-3179.
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VOTE
BY EMAIL
Mark, sign and date your proxy card and send it
to vote@vstocktransfer.com.
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VOTE
IN PERSON
If you would like to vote in person, please
attend the Special Meeting to be held at the offices of Barnea
& CoLaw Offices, 58 HaRakevet St., Tel Aviv 6777016, Israel on
February 12, 2018, at 4:00 pm local time.
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Please Vote, Sign, Date
and Return Promptly in the Enclosed Envelope.
Special Meeting Proxy
Card - My Size, Inc.
q
DETACH PROXY CARD HERE TO VOTE BY MAIL
q
1.
To approve an amendment
to the Company’s 2017 Consultant Equity Incentive Plan to
increase the reservation of common stock for issuance thereunder to
4,500,000 shares from 3,000,000 shares.
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FOR
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AGAINST
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ABSTAIN
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2.
To approve an amendment
to the Company’s Amended and Restated Certificate of
Incorporation to increase the authorized number of shares of the
Company’s common stock from 50,000,000 shares to 100,000,000
shares.
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FOR
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AGAINST
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ABSTAIN
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3.
To approve an amendment
to the Company’s Amended and Restated Certificate of
Incorporation to implement a reverse stock split of the
Company’s outstanding common stock at a ratio within the
range of 1-for-2 and 1-for-10 at any time prior to December 18,
2018.
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FOR
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AGAINST
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ABSTAIN
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4.
To approve the issuance
of securities in one or more non-public offerings where the maximum
discount at which securities will be offered will be equivalent to
a discount of 20% below the market price of the Company’s
common stock, as required by and in accordance with Nasdaq
Marketplace Rule 5635(d).
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FOR
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AGAINST
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ABSTAIN
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5.
To approve the issuance
of securities in one or more non-public offerings where the maximum
discount at which securities will be offered will be equivalent to
a discount of 15% below the market price of the Company’s
common stock, as required by and in accordance with Nasdaq
Marketplace Rule 5635(d).
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FOR
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AGAINST
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ABSTAIN
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Date
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Signature
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Signature, if held jointly
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To change the address on your account, please check the box at
right and indicate your new address.
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*
SPECIMEN *
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AC:ACCT9999
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90.00
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MY SIZE, INC.
Special Meeting of
Stockholders
February 12, 2018
MY SIZE, INC.
THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronen Luzon, as proxy, with full
power of substitution, to represent and to vote all the shares of
common stock of My Size, Inc. (the “Company”), which
the undersigned would be entitled to vote, at the Company’s
Special Meeting of Stockholders to be held on February 12, 2018 and
at any adjournments thereof, subject to the directions indicated on
this Proxy Card.
In his discretion, the proxy is authorized to vote upon any other
matter that may properly come before the meeting or any
adjournments thereof. This proxy will be voted in accordance with
the specifications made, but if no choices are indicated, this
proxy will be voted FOR all the proposals listed on the reverse
side. The Board of Directors recommends a vote
FOR
proposals 1, 2, 3, 4, and 5.
Please check here if you plan to attend the Special Meeting of
Stockholders on February 12, 2018 at 4:00 p.m. local time.
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Please indicate your status by signing
Ѵ
in the
relevant checkbox:
Related Party
1
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Company officeholder
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Institutional Investor
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None of the above
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1
A holder
of not less than 5 percent of the outstanding securities.