the number of shares of common stock authorized under the Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”), its 2011 Stock Option Plan (the “Stock Option Plan”) and the Cancer Prevention Pharmaceuticals, Inc. 2010 Equity Incentive Plan (the “CPP Incentive Plan”) will be proportionately adjusted for the Reverse Stock Split ratio; and
the number of stockholders owning “odd lots” of less than 100 shares of our common stock may potentially increase; odd lot shares may be more difficult to sell and brokerage commissions and other costs of transactions in odd lots generally are proportionately higher than the costs of transactions in “round lots” of even multiples of 100 shares.
However, we believe that any potential negative effects are outweighed by the benefits of the Reverse Stock Split.
Effect on Shares of Common Stock
For the purposes of providing an example of the effect of the Reverse Stock Split on our Common Stock, the following table contains approximate information (without accounting for the settlement of fractional shares), based on share information as of October 14, 2022, of the effect of a Reverse Stock Split at a ratio of 1-for-40 on the number of shares of our Common Stock authorized, outstanding, reserved for future issuance and not outstanding or reserved:
Pre-Reverse Stock Split | | | 100,000,000 | | | 27,876,962 | | | 54,652,456 | | | 17,470,582 |
Post-Reverse Stock Split 1:40 | | | 100,000,000 | | | 696,924 | | | 1,366,311 | | | 97,936,765 |
After the Effective Time of the Reverse Stock Split, our securities, including our Common Stock, will have new CUSIP numbers.
Effect on our Authorized Preferred Stock
The Reverse Stock Split, if implemented, would not affect the total authorized number of shares of our preferred stock or the par value of shares our preferred stock, none of which are outstanding or reserved for issuance.
Effect on Outstanding Equity Awards, Warrants, and Equity Plans
If the Reverse Stock Split is approved by our stockholders and our Board of Directors decides to implement the Reverse Stock Split, as of the Effective Time, proportionate adjustments will be made to all then-outstanding equity awards and Common Stock warrants with respect to the number of shares of Common Stock subject to such award or warrant and the exercise price thereof. In addition, the number of shares of Common Stock available for issuance under the Omnibus Plan, the Stock Option Plan and the CPP Incentive Plan will be proportionately adjusted for the Reverse Stock Split ratio, such that fewer shares will be subject to such plans.
Reduction in Stated Capital
Pursuant to the Reverse Stock Split, the par value of our Common Stock would remain $0.001 per share. As a result of the Reverse Stock Split, at the Effective Time, the stated capital on our balance sheet attributable to our Common Stock would be reduced in proportion to the size of the Reverse Stock Split, subject to a minor adjustment in respect of the treatment of fractional shares, and the additional paid-in capital account would be credited with the amount by which the stated capital is reduced. Our stockholders’ equity, in the aggregate, would remain unchanged.
Shares Held in Book-Entry and Through a Broker, Bank or Other Holder of Record
The combination of, and reduction in, the number of our outstanding shares of Common Stock as a result of the Reverse Stock Split will occur automatically at the Effective Time without any additional action on the part of our stockholders.
Upon the Reverse Stock Split, we intend to treat stockholders holding shares of our Common Stock in “street name” (that is, through a broker, bank or other holder of record) in the same manner as registered stockholders whose