The Reverse Stock Split may lead to a decrease in our overall market capitalization.
The Reverse Stock Split may be viewed negatively by the market and, experienceconsequently, could lead to a decrease in our overall market capitalization. If the per share market price of our Class A common stock does not increase in proportion to the Final Ratio, or following such increase does not maintain or exceed that price, then the value of our Company, as measured by our market capitalization, will be reduced. Additionally, any reduction in our market capitalization may be magnified as a result of the boardsmaller number of total shares of Class A common stock outstanding following the Reverse Stock Split.
Effective Time
The effective time of the Reverse Stock Split (the “Effective Time”), if approved by our stockholders and
its members, specific challenges facedimplemented by the
Company orBoard, will be the
industrydate and time set forth in
which we operate and governance efficiency.the Certificate of Amendment that is filed with the Delaware Secretary of State. The
board has adopted Corporate Governance Guidelines, which provides forEffective Time could occur as soon as the
appointment of a lead independent director at any time whenbusiness day immediately following the
Chairperson is not independent. As Mr. Rood, our Chief Executive Officer, isSpecial Meeting. However, the
Chairpersonexact timing of the
board,filing of the
board has appointed Linda J. ReinersCertificate of Amendment will be determined by our Board based on its evaluation as
lead independent director.Security Director
Under our National Security Agreement (the “NSA”),to when such action will be the board must include a director who is approved by the CFIUS Monitoring Agencies. This director, referred to as the “Security Director,” has a fiduciary duty, to the extent consistent with his or her fiduciary dutiesmost advantageous to the Company and its stockholders under Delaware law, to the U.S. government. The Security Director serves as the primary liaison between the Board of Directorsour stockholders.
Notwithstanding stockholder approval, and
the CFIUS Monitoring Agencies and has authority to oversee compliance with the NSA. To the extent that the Security Director believes that a conflict of interest is reasonably likely to exist between her or his fiduciary duties under Delaware law to the Company and/or its stockholders and to the CFIUS Monitoring Agencies, the Security Director is required to promptly inform the CFIUS Monitoring Agencies of such conflict. The Security Director is the sole member of the Security Committee of the Board of Directors and has the power to effect the following actions:• In the Security Committee’s sole discretion, remove and replace any officer or employee of the Company;
• Review all contracts with customers, third-party vendors and service providers, and all contracts related to certain technical relationships and protected technical information to ensure they comport with the obligations under the NSA; and
• In the Security Committee’s sole discretion, block or terminate any contract that the Security Committee determines could reasonably be expected to allow for actions contrary to the NSA, including provisions that the Security Committee determines could reasonably be expected to provide certain parties identified in the NSA with access to protected technical information or could reasonably be expected to cause the transfer of protected technical information in a manner harmful to U.S. national security.
The Security Director is also a member of the Nominating and Corporate Governance Committee. Any individual nominatedwithout further action by the Board of Directors to serve as a director must be approved bystockholders, the Security Director. Thus, no person can be nominated to serve as a director of the Company without the approval of the Security Director.
In addition to the powers above, the Security Director has the following responsibilities:
• Provide timely responses to inquiries from the CFIUS Monitoring Agencies and maintain availability, upon reasonable notice from the CFIUS Monitoring Agencies, for discussions with the CFIUS Monitoring Agencies on matters related to the Company’s governance and compliance with the NSA;
• Develop the annual budget for third-party services and other expenses necessary for the Company to perform its obligations under the NSA and the arrangements that set forth the terms for certain parties identified in the NSA relinquishing their ability to direct the voting of interests in the Company;
• Review and approve any proposed amendments to the security plan and communications plan required by the NSA, prior to submission of the CFIUS Monitoring Agencies, and any policies and procedures adopted by the Company pursuant thereto, in each case in the Security Director’s sole discretion;
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• Consult with the CFIUS Monitoring Agencies on nominations to the board and exercise this authority in the Security Director’s sole discretion, subject to such consultation with the CFIUS Monitoring Agencies;
• Serve as the primary liaison between the board and the CFIUS Monitoring Agencies and provide timely responses to inquiries from the CFIUS Monitoring Agencies and maintain availability, upon reasonable notice from the CFIUS Monitoring Agencies, for discussions with the CFIUS Monitoring Agencies on matters relating to the Company’s governance and compliance with the NSA; and
• Report any actual or potential violation of the NSA to the CFIUS Monitoring Agencies and the third-party monitor within 24 hours of discovery.
Our amended and restated certificate of incorporation provides that the Security Director may only be removed for cause and with the approval of the CFIUS Monitoring Agencies and at least two-thirds of the voting power of the then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors voting as a single class.
In addition, as required by the NSA, if the Security Director recommends that a director be removed from the board due to an identified national security concern, as determined by the Security Director in consultation with the CFIUS Monitoring Agencies, the board must ask for the resignation of such director. If such director does not resign, the board must call a special meeting of stockholders to vote on the removal of such director. Pending such vote, we are required to ensure that such director does not receive any protected technical information of the Company.
Board, Role in Risk Oversight
One of the key functions of the board is informed oversight of the Company’s risk management process. This oversight function is administered directly through the board as a whole, as well as through various standing committees of the board that address risks inherent in their respective areas of oversight. In particular, the board is responsible for monitoring and assessing strategic risk exposure and the Company’s Audit Committee has the responsibility to consider and discuss the Company’s major financial risk exposures and the steps its management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. The Compensation Committee assesses and monitors whether the Company’s compensation plans, policies and programs comply with applicable legal and regulatory requirements. The Nominating and Corporate Governance Committee monitors the effectiveness of Company’s governance guidelines.
Committees of the Board of Directors
The Company has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each of which has the composition and responsibilities described below. Members serve on these committees until their resignation or until otherwise determined by the Board of Directors. Each committee operates under a charter approved by the board. Copies of each charter are posted on the Investor Relations section of our website at https://momentus.space. In addition to these committees, the Board has a Security Committee and a Disclosure Committee as described below.
Audit Committee
The members of the Audit Committee are Linda J. Reiners, Kimberly A. Reed and Mitchel B. Kugler. Ms. Reiners is the Chair of the committee. Each member meets the requirements for independence and financial literacy under the current Nasdaq listing standards and SEC rules and regulations, including Rule 10A-3. Ms. Reiners qualifies as an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”). This designation does not impose any duties, obligations, or liabilities that are greater than are generally imposed on members of the Audit Committee and the board.
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The Audit Committee is responsible for, among other things:
• appointing, compensating, retaining, evaluating, terminating and overseeing the Company’s independent registered public accounting firm;
• reviewing the adequacy of the Company’s system of internal controls and the disclosure regarding such system of internal controls contained in the Company’s periodic filings;
• pre-approving all audit and permitted non-audit services and related engagement fees and terms for services provided by the Company’s independent auditors;
• reviewing with the Company’s independent auditors their independence from management;
• reviewing, recommending and discussing various aspects of the financial statements and reporting of the financial statements with management and the Company’s independent auditors;
• overseeing controls governing the Company’s and its management’s public statements regarding the Company, including but not limited to the creation of a disclosure committee; and
• establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
Compensation Committee
The members of the Compensation Committee are Brian Kabot, Chris Hadfield and Mitchel B. Kugler. Mr. Kabot is the Chair of the committee. Each member meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Each member of the committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act.
The Compensation Committee is responsible for, among other things:
• setting the compensation of the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviewing and approving the compensation, and establishing the goals and objectives, of the other executive officers of the Company;
• reviewing on a periodic basis and making recommendations regarding non-employee director compensation to the board;
• administering the Company’s cash and equity-based incentive plans that are stockholder-approved and/or where participants include the Company’s executive officers and directors; and
• providing oversight of and recommending improvements to the Company’s overall compensation and incentive plans and benefit programs.
The Compensation Committee’s charter provides that it may delegate authority to one or more subcommittees or one or more officers of the Company. If the Compensation Committee delegates authority to an officer of the Company, such officer will not be delegated any authority that relates to the amount or form of compensation of “officers” as defined in Section 16 of the Exchange Act, which includes the authority related to the administration of compensation and incentive plans and benefit programs.
The charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser to assist in the evaluation of CEO or executive officer compensation at the Company’s expense, and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
During the fiscal year ended 2021, the Compensation Committee directly engaged Frederic W. Cook & Co., Inc. (“F.W. Cook”) as a compensation consultant to provide advice and recommendations on the amount and form of executive and non-employee director compensation. F.W. Cook did not provide additional services to the Company in excess of $120,000.
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Nominating and Corporate Governance Committee
The members of the Nominating and Corporate Governance Committee are Victorino G. Mercado, Chris Hadfield, and Kimberly A. Reed. Mr. Mercado is the Chair of the committee. Each member meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations.
The Nominating and Corporate Governance Committee is responsible for, among other things:
• identifying, evaluating and making recommendations to the board regarding nominees for election to the Board of Directors and its committees;
• considering and evaluating stockholder nominees for election to the Board of Directors;
• developing and making recommendations to the board regarding corporate governance and environmental, social and governance guidelines and matters;
• overseeing the board’s corporate governance practices;
• determining the desired qualifications, expertise and characteristics for potential directors, with the goal of developing an experienced and highly qualified board with a diverse background and skillset;
• overseeing the evaluation and the performance of the board and each of its committees; and
• contributing to succession planning.
As set out in its charter, the Nominating and Corporate Governance Committee is responsible for the consideration of stockholder-proposed director nominees for election to the board. The Company’s amended and restated bylaws specifically provides the procedures to be followed by stockholders submitting such recommendations. For more information regarding the process and procedures stockholders are required to follow in submitting director nominees, see “Stockholder Proposals and Director Nominations other than Pursuant to Rule 14a-8” on page 36.
Security Committee
The board has a Security Committee comprised of the Security Director. The Security Committee is responsible for overseeing and monitoring Momentus’ operations to ensure that the protective measures contained in the NSA are effectively maintained and implemented; and overseeing the development and implementation of policies and procedures to safeguard protected technical information, protected systems and protected facilities in accordance with the NSA. For more information about the Security Committee, see above under “Corporate Governance — Security Director” on pages 11-12.
Disclosure Committee
The members of the Disclosure Committee are Mitchel B. Kugler, Chris Hadfield, and John C. Rood. Mr. Kugler is the Chair of the committee.
The Disclosure Committee is overseen by the Audit Committee and is responsible for, among other things:
• coordinating and overseeing the formulation, documentation and evaluation of the Company’s disclosure controls and procedures;
• periodically reviewing and assessing the adequacy of the Company’s disclosure policy and guidelines, including without limitation the Company’s policies regarding public disclosure of material nonpublic information; and
• reviewing drafts of certain of the Company’s disclosure documents.
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Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee is or has beenmay at any time one of Momentus’ officers or employees. None of Momentus’ executive officers currently serves, or inprior to the past fiscal year has served, as a memberfiling of the boardCertificate of directorsAmendment with the Delaware Secretary of State, delay or compensation committee (or other Board of Directors committee performing equivalent functions or, inabandon the absence of any such committee, the entire Board of Directors) of any entity that has one or more executive officers serving as a member of Momentus’ board or Compensation Committee.
Code of Business Conduct
The Board of Directors has adopted a Code of Business Conduct that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Business Conduct is available in the Corporate Governance section of the Investor Relations page on our website at www.momentus.space. In addition, we have posted on the Corporate Governance section of our website all disclosures that are required by law or Nasdaq listing standards, including any amendments to, or waivers from, any provision of the Code of Business Conduct.
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EXECUTIVE OFFICERS
The following table sets forth information regarding our executive officers as of January 31, 2022:
Name
| | Age
| | Position
|
John C. Rood*
| | 53
| | Chairperson, President and CEO
|
Dawn Harms
| | 66
| | Chief Revenue Officer
|
Rob Schwarz
| | 50
| | Chief Technology Officer
|
Jikun Kim
| | 58
| | Chief Financial Officer
|
Paul Ney
| | 63
| | Chief Legal Officer and Corporate Secretary
|
* Mr. Rood is also a director of the Company and his biographical information appears on page 10.
Executive Officers
Dawn Harms. Ms. Harms is Momentus’ Chief Revenue Officer (CRO). Ms. Harms has served as our Chief Revenue Officer since November 2019. From January 2019 to November 2019, Ms. Harms was Principal at Space Architectures LLC, a defense and space consulting company. From August 2014 to December 2018, she served as Vice President of Global Sales and Marketing at Boeing Satellite Systems International. From August 2012 to August 2014, she served as Vice President of Sales and Marketing at International Launch Services, the sales organization for the Proton rocket where she also served on their Board of Directors. From 1990 to August 2012, Ms. Harms was Vice President of Sales and Marketing at Space Systems Loral (now Maxar). Ms. Harms currently is a member ofReverse Stock Split. If the Board of Directors of Mansat Ltd., an orbital spectrum management company. Ms. Harms holds a B.S. degree in Electrical Engineeringdoes not implement the Reverse Stock Split within 12 months from the University of Wisconsin-Madison and serves as an industrial advisor toSpecial Meeting, then the College of Engineering.
Rob Schwarz. Mr. Schwarz is the Chief Technology Officer (CTO) at Momentus and is responsible for the vision and technical direction of the full line of Momentus products. Mr. Schwarz has a background in spacecraft systems engineering and management, product management, and innovation. Prior to joining Momentus, Mr. Schwarz spent 20 years at Space Systems Loral (now part of Maxar) and Orbital Sciences (now part of Northrop Grumman) working on various commercial and government space projects. Mr. Schwarz was Executive Director of Systems Engineering at SSL from 2010-2015 and then moved to Product Management before becoming CTO of the Maxar Space Division in 2018. He joined Momentus in early 2020 as CTO. Mr. Schwarz holds a BS degree in Mechanical & Aerospace Engineering from Rutgers University (‘95) and a MS degree in Aeronautics and Astronautics from MIT (‘97).
Jikun Kim. Mr. Kim is Momentus’ Chief Financial Officer (CFO). Mr. Kim has served as our Chief Financial Officer since September 2020. From January 2019 to September 2020, Mr. Kim served as the Chief Financial Officer at Formlabs Inc., a 3D printer company. From June 2016 to December 2019, Mr. Kim served as the Chief Financial Officer at EMCORE Corporation, a publicly held company producing advanced semiconductor products, and from February 2015 to June 2016, he served as Chief Financial Officer at MEREX Company, a defense and space company. From June 2009 to February 2015, Mr. Kim served as Chief Financial Officer at AeroVironment, Inc., a public aviation and aerospace technology company. Mr. Kim received an M.B.A. degree from Columbia Business School, an M.S. degree in Electrical Engineering from the University of California at Los Angeles and a B.S. degree in Electrical Engineering from the University of California at Berkeley.
Paul Ney. Mr. Ney is Momentus’ Chief Legal Officer (CLO) and Corporate Secretary. Mr. Ney has nearly four decades of public service and private law practice experience. Most recently, he was presidentially appointed and confirmed by the U.S. Senate to serve as the General Counsel of the Department of Defense. In this position, he was the Department’s chief legal officer leading a team of over 12,000 lawyers that served the Department’s more than 2.8 million military and civilian personnel, and he served as the Designated Agency Ethics Official overseeing the Department’s Standards of Conduct Office. During his tenure in the
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Department of Defense, the U.S. Space Force and the U.S. Space Command were established. In earlier government roles, Mr. Ney was the Principal Deputy and the acting General Counsel of the United States Department of the Navy and Chief Deputy Attorney General for the State of Tennessee. He also served as Director of the Nashville Davidson County Mayor’s Office of Economic and Community Development. Before his most recent service in the Pentagon, Mr. Ney was a partner in the law firms Trauger, Ney & Tuke, and Patterson Intellectual Property Law, P.C. He is a registered patent attorney and has more than two decades of experience litigating intellectual property law matters.
EXECUTIVE COMPENSATION
The Company qualifies as a “smaller reporting company” under rules adopted by the SEC. Accordingly, the Company has provided scaled executive compensation disclosure that satisfies the requirements applicable to the Company in its status as a smaller reporting company. Under the scaled disclosure obligations, the Company is not required to provide, among other things, a compensation discussion and analysis or a compensation committee report, and certain other tabular and narrative disclosures relating to executive compensation.
Our named executive officers (or “NEOs”) for 2021 were as follows:
John C. Rood, our Chief Executive Officer, President and Chair of the Board;
Fred Kennedy, our former President; and
Jikun Kim, our Chief Financial Officer.
Certain information regarding the compensation of our NEOs for 2021 is provided on the following pages.
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Summary Compensation Table
The Summary Compensation Table below summarizes the compensation paid to, awarded to, or earned by our Chief Executive Officer and our two other most highly compensated officers for the fiscal years ended December 31, 2021 and 2020. Dr. Kennedy resigned as President of the Company, effective January 21, 2022. Before his resignation, he was employed by the Company for the entire 2021 fiscal year. The footnotes to the Summary Compensation Table set forth narrative discussions of the material factors necessary to understand the information disclosed in the table.
Summary Compensation Table |
Name
Principal Position(s) | Fiscal
Year | Salary
(1) | Bonus
(2) | Stock Awards
(3) | Non-Equity Incentive Plan
Compensation (4) | All Other
Compensation (5) | Total |
($) | ($) | ($) | ($) | ($) | ($) |
John C. Rood
Chief Executive Officer | 2021 | 333,333 | 633,333 | 9,999,997 | 166,667 | 71,476 (6) | 11,204,806 |
Jikun Kim
Chief Financial Officer | 2021 | 350,000 | 115,000 | 3,999,999 | — | 14,497 (7) | 4,479,996 |
2020 | 91,477 (8) | 27,041 | — | | 21,260 (9) | 139,778 |
Former Executive Officer | |
Fred Kennedy
Former President | 2021 | 350,000 | — | 4,999,998 | — | | 5,349,998 |
2020 | 104,735 | 51,781 | — | — | | 156,516 |
Fractional Shares
We will not issue fractional shares of service.
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Narrative to the Summary Compensation Table
The following isrecord who would otherwise hold a discussion of certain terms of the employment agreements with our NEOs that we believe are necessary to understand the information disclosed in the Summary Compensation Table.
Base Salaries
The Company’s NEOs receive a base salary for services rendered to the Company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities.
Bonuses
In fiscal year 2021, Mr. Rood, Mr. Kim and Dr. Kennedy were eligible to earn discretionary annual cash bonuses targeted at 100%, 30% and 50%, respectively, of their respective base salaries based on their performance, as determined by the Momentus Board of Directors. In addition, Mr. Rood was eligible for a 2021 cash bonus amount, which was prorated based onfractional share because the number of days during fiscal year 2021shares of common stock they hold of record before the Reverse Stock Split is not evenly divisible by the Reverse Stock Split ratio that Mr. Rood was employed.
Equity Compensation
Our Compensation Committee administers our 2021 Equity Incentive Plan (the “Equity Incentive Plan”) and approvesnumber of shares of common stock as rounded up to the amountnearest whole share. No stockholders will receive cash in lieu of and terms applicable to, grants of stock options, RSUs, and other types of equity awards to employees, including the Named Executive Officers.
The Equity Incentive Plan is intended to (i) attract and retain the best available personnel to ensure our success and accomplish our goals; (ii) incentivize employees, directors and independent contractors with long-term equity-based compensation to align their interests with our stockholders; and (iii) promote the success of our business.
The Equity Incentive Plan permits the grant of incentive stock options, nonstatutory stock options, stock appreciation rights (“SARs”), restricted stock, RSUs and stock bonus awards (all such types of awards, collectively, “equity awards”), although incentive stock options may only be granted to employees.
For the grant date fair valuesfractional shares.
Effects of the options and RSUs, please seeReverse Stock Split
General
After the
Summary Compensation Table above.Perquisites
In 2021, Momentus provided its NEOs with benefits intended to be competitive with market practices and to motivate them to carry out their duties with respect toEffective Time of the Company. Some of these benefits are provided under the NEOs’ employment agreements, as described below. The amount of these benefits has been included in the Summary Compensation Table in the “All Other Compensation” column.
Momentus pays the entire premiums associated with its NEOs’ medical insurance coverage; because the Company does not pay the entire premium with respect to the medical insurance coverage of employees generally, the amounts associated with the additional percentage paid by the Company have been included in the Summary Compensation Table in the “All Other Compensation” column.
The Company has established a 401(k) plan which covers all employees. Participants may make voluntary contributions to the plan subject to Internal Revenue Service limitations. The Company does not provide a matching contribution. Momentus also provides other benefits to its NEOs on the same basis as provided to all of its employees, including vacation and paid holidays.
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Executive Employment Agreements
Rood Employment Agreement
On August 1, 2021, the Company entered into an employment agreement with Mr. Rood (the “Rood Employment Agreement”), pursuant to which Mr. Rood is entitled to an annual base salary of $800,000 per year and an annual target cash incentive bonus up to $800,000, based upon the achievement of certain objective or subjective criteria determinedReverse Stock Split, if implemented by the Board, of Directors and pro-rated based on actual salary earned in 2021. As described above, the Company has agreed to grant Mr. Rood RSUs havingeach stockholder will own a grant date fair value of $10,000,000. The RSU award will be immediately vested as to 6.25% of the total number of RSUs on its grant date and will vest as to 18.75% of the total number of RSUs upon August 1, 2022, the first anniversary of his start date, and as to 25% of the total number of RSUs on August 1, 2023, August 1, 2024, and August 1, 2025, the second, third and fourth anniversaries of his start date, subject to his continued employment.
Mr. Rood is also entitled to reimbursement for his commuting (including first class airfare) and temporary housing expenses from his residence to Momentus’ headquarters, as reasonably required and a gross-up payment of any income taxes withheld on such commuting and temporary housing expenses until the fourth anniversary of his start date. Mr. Rood is eligible to participate in Momentus’ employee benefits plans maintained by Momentus and generally made available to similarly situated employees. Mr. Rood’s employment is “at-will” and may be terminated by either party at any time. Mr. Rood is entitled to severance payments and benefits upon a termination of his employment by Momentus without cause or by Mr. Rood for good reason, as are explained below under “Potential Payments Upon Termination or Change in Control.”
Kim Offer Letter
In September 2020, Momentus entered into an offer letter with Mr. Kim, pursuant to which Mr. Kim is entitled to an annual base salary of $350,000 per year and an annual target cash incentive bonus of $105,000 (which was subsequently increased to $115,000 in 2021), based upon the achievement of certain objective or subjective criteria determined by the board. As described above, Momentus has agreed to grant Mr. Kim either (i) a stock option to purchase a fixedreduced number of shares of Class A common stock. The principal effect of the Reverse Stock Split will be to proportionately decrease the number of outstanding shares of our Class A common stock based on the Final Ratio selected by our Board.
The Reverse Stock Split would be effected simultaneously for all shares of our common stock, and the Final Ratio would be the same for all shares of our common stock. The Reverse Stock Split would affect all of the holders of our common stock uniformly and would not affect any stockholder’s percentage ownership interests in the Company, voting rights or other rights in each case, other than as a result of the treatment of fractional shares as described herein. For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately prior to the effectiveness of the Reverse Stock Split will generally continue to hold 2% (other than the nominal effect of the treatment of fractional shares) of the voting power of the outstanding shares of our common stock after the Reverse Stock Split. The number of stockholders of record will not be affected by the Reverse Stock Split. If approved and implemented, the Reverse Stock Split may result in additional stockholders owning “odd lots” of less than 100 shares of our Class A 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. The Company believes, however, that these potential effects are outweighed by the benefits of the Reverse Stock Split.
