Ok children, here is your homework assignment (For those who don't have the time or are just too lazy to look it up yourself)...read the following, from pages 16 and 17 of the latest proxy statement, to learn the company's explanation for the proposed increase in shares...I found it for you but I am not going to read it for you!
Reasons for the Increase
Our Articles currently authorize us to issue an aggregate of 71,428,571 shares of common stock, of which 59,903,876 shares were issued and outstanding as of November 1, 2017, 3,425,732 shares are reserved for issuance upon exercise of existing stock purchase warrants, 4,220,368 shares are reserved for future issuance under existing equity incentive awards and 500,000 are reserved for purchases under the Company’s Employee Stock Purchase Plan. This leaves 3,378,595 shares of unissued and unreserved common stock available for future use.
The Board of Directors believes that it is prudent to increase the authorized number of shares of common stock in order to maintain a reserve of shares available for immediate issuance to meet business needs, such as a strategic acquisition opportunity or equity offering, promptly as they arise. The Board of Directors believes that maintaining such a reserve will save time and money in responding to future events requiring the issuance of additional shares of common stock, such as strategic acquisitions or future equity offerings. In addition, the increase in the number of authorized shares of common stock will allow us to continue providing equity incentives to our employees, officers and directors.
All authorized but unissued shares of common stock will be available for issuance from time to time for any proper purpose approved by the Board of Directors (including issuances in connection with stock-based employee benefit plans and issuances to raise capital or effect acquisitions), without further vote of the stockholders, except as required under applicable law or the Nasdaq Marketplace Rules. There are currently no arrangements, agreements or understandings for the issuance of the additional shares of authorized common stock except for issuances in the ordinary course of business. The Board of Directors does not presently intend to seek further stockholder approval of any particular issuance of shares unless such approval is required by law or the Nasdaq Marketplace Rules.
If this Proposal One is approved by the stockholders, the increase in the authorized number of shares of common stock and the subsequent issuance of such shares could have the effect of delaying or preventing a change in control of the Company without further action by the stockholders. Shares of authorized but unissued common stock could (within the limits imposed by applicable law) be issued in one or more transactions which would make a change in control of the Company more difficult, and therefore less likely.
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Any such issuance of additional stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company.
Vote Required
This proposal requires the affirmative vote of the holders of a majority of the shares outstanding and entitled to vote at the Special Meeting. For this vote, abstentions and broker non-votes will be counted as votes against this proposal.
The Company’s Board of Directors recommends a vote FOR the proposal to amend our Articles of Incorporation to increase the number of authorized shares of common stock to 141,428,571.
