AUTHORIZED SHARE CAPITAL INCREASE
Under Irish law, an Irish public limited company must have a maximum authorized share capital. Shareholder approval is required to increase the authorized share capital of an Irish public limited company. Under our Constitution, our authorized share capital is EUR€25,000 and US$4,400,000 divided into 25,000 Euro deferred shares of EUR€1.00 (nominal value) each, 400,000,000 ordinary shares of US$0.01 (nominal value) each and 40,000,000 preferred shares of US$0.01 (nominal value) each.
As of August 25, 2023, the Board had reserved 4,590,350 ordinary shares for issuance upon exercise of outstanding options and for restricted stock unit awards outstanding under our Share Plans, 4,993,193 ordinary shares that may be issued pursuant to future grants or rights under our Share Plans, and up to 40,672,651 ordinary shares that may be issued upon exercise of outstanding warrants. As of August 25, 2023 we had approximately 238,337,763 ordinary shares that were unissued, unreserved, or unallocated and therefore available for future use (i.e., not already outstanding or reserved for future issuance under our warrants, options, restricted stock unit awards, Share Plans, or otherwise allocated for other purposes).
If the reverse share split (Proposal 1) is approved, our authorized share capital will reduce to €25,000 and $480,000 divided into 25,000 Euro deferred shares of EUR€1.00 (nominal value) each, 8,000,000 ordinary shares of US$0.01 (nominal value) each and 40,000,000 preferred shares of US$0.01 (nominal value) each. We are seeking approval at the EGM to increase our authorized share capital to EUR€25,000 and US$800,000 divided into 25,000 Euro deferred shares of EUR€1.00 (nominal value) each, 40,000,000 ordinary shares of US$0.01 (nominal value) each and 40,000,000 preferred shares of US$0.01 (nominal value) each. Such an increase in our unissued or unreserved share capital available is necessary to enable future flexibility with respect to share issuances.
The authorized share capital increase proposal (Proposal 2) is fundamental to our business and capital management because the Company needs to maintain a greater reserve of authorized but unissued ordinary shares to potentially raise capital and for general corporate purposes. We currently have no specific plans, arrangements or understandings to issue the additional ordinary shares that would be authorized if this Proposal 2 is approved by our shareholders, but the additional shares could be used for various purposes with or without further shareholder approval, including, for example: raising capital, including potential financing that we could determine to pursue in the near-term; establishing strategic relationships with other companies; expanding our business or product pipeline through the acquisition of other businesses or products; providing equity incentives to employees, officers or directors through our equity incentive plans; compensation of vendors and other service providers; the issuance of ordinary shares in connection with any transaction that may result from our ongoing evaluation of corporate, organizational, strategic, financial and financing alternatives; or for other corporate purposes that have not yet been identified. If Proposal 2 is approved, further shareholder approval will be required to increase the number of ordinary shares available under our Amended and Restated 2018 Equity Incentive Plan.
Certain Effects of the Proposal
Irrespective of Proposal 1, if Proposal 2 is not approved by our shareholders, we will be limited to issuing no more than 288,593,957 (being 400,000,000 ordinary shares authorized less 111,406,043 ordinary shares issued and authorized) ordinary shares, based on the amount of authorized ordinary shares unissued or unreserved and therefor available for issuance as of August 25, 2023. As a result of the Company’s relatively low per share market price for its ordinary shares, the Company's financing options will be limited by the lack of sufficient unissued and unreserved authorized ordinary shares, as adjusted for the reverse share split (Proposal 1) and shareholder value may be harmed by this limitation.
If our shareholders do not approve Proposal 2, we may not be able to access the capital markets, complete strategic transactions, attract, retain and motivate employees, and pursue other business opportunities integral to our growth and success without further shareholder approval.
Based solely on the last reported sale price of our ordinary shares on the Nasdaq Global Select Market on August 24, 2023 of US$0.14 per share, and assuming we issue for cash the maximum number of ordinary shares we are currently authorized to issue for cash pursuant to our existing authority, the maximum aggregate gross cash