DEF 14A: Getaround Seeks Stockholder Approval for Reverse Stock Split, Equity Plan Changes, and More

Getaround is holding its 2024 Annual Meeting of Stockholders virtually on July 31, 2024, to vote on key proposals including a reverse stock split, director elections, and amendments to its equity incentive plan.

Summary

• Getaround, Inc. is holding its 2024 Annual Meeting of Stockholders virtually on July 31, 2024.
• Stockholders will vote on several proposals, including the election of directors, ratification of the independent accounting firm, and a reverse stock split.
• The reverse stock split proposal seeks authorization for a split ratio between 1-for-10 and 1-for-50, to be determined by the Board.
• Another key proposal involves amending the equity incentive plan to increase the number of shares available by 4,000,000 and adjust the annual evergreen percentage increase.
• Stockholders will also vote on approving potential issuances of common stock related to convertible notes and inducement grants, as well as a stock option repricing.
• The Board recommends voting FOR all proposals.

Sentiment

Score: 6

Explanation: The document is largely factual and procedural, outlining proposals for stockholder vote. While there are positive aspects like aiming for NYSE compliance and incentivizing employees, there are also risks and potential dilution, resulting in a neutral to slightly positive sentiment.

Positives

• The proposed reverse stock split aims to increase the per share trading price to meet NYSE listing requirements.
• Maintaining the NYSE listing could improve access to capital and attract institutional investors.
• The equity incentive plan amendment is intended to attract, retain, and motivate employees through equity-based compensation.
• The proposed stock option repricing could incentivize employees and align their interests with stockholders.

Negatives

• A reverse stock split may decrease stock liquidity and increase transaction costs.
• There is no guarantee that the reverse stock split will increase the stock price or maintain NYSE listing compliance.
• The potential issuance of shares related to convertible notes and inducement grants could dilute existing stockholders' ownership.
• If the reverse stock split is consummated and the per share trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split.

Risks

• Failure to maintain NYSE listing could limit access to capital and negatively affect stock value.
• Delisting would constitute a Fundamental Change under the terms of the indenture governing the Convertible Notes, whereupon the noteholders may require us to repurchase for cash all or part of their Convertible Notes at a purchase price equal to the principal amount of the Convertible Notes to be repurchased, plus a make-whole premium and accrued and unpaid interest to, but excluding, the repurchase date.
• Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.
• The proposed Reverse Stock Split could make a takeover proposal more difficult.

Future Outlook

The company aims to regain compliance with NYSE listing requirements and continue to attract, retain, and motivate employees through equity-based compensation.

Management Comments

• Eduardo Iniguez (Chief Executive Officer): 'Please use this opportunity to take part in our affairs by voting on the business to come before the Annual Meeting.'
• The Board believes that the proposed Reverse Stock Split is a potentially effective means for us to maintain compliance with the NYSE minimum share price criteria and to avoid, or at least mitigate, the likely adverse consequences of our common stock being delisted from NYSE by producing the immediate effect of increasing the per share trading price of our common stock.

Industry Context

The document reflects common corporate governance practices, including seeking stockholder approval for significant actions like reverse stock splits and equity plan amendments, particularly for companies needing to meet exchange listing requirements or incentivize employees in competitive industries.

Comparison to Industry Standards

• The proposed reverse stock split is a common strategy for companies facing delisting from major exchanges due to low stock prices; many companies in similar situations have pursued this option.
• The structure of the equity incentive plan, including the types of awards and the annual evergreen provision, aligns with standard practices in the technology industry to attract and retain talent.
• The non-employee director compensation policy, with its mix of cash retainers and equity awards, is consistent with industry benchmarks for companies of similar size and stage.
• The potential for dilution from convertible notes and equity grants is a common concern for investors, and the company's disclosure of this risk is in line with regulatory requirements and best practices.

Related Party Transactions

• Investments by Mudrick Capital Management: Amended and restated the Second A&R Note to reflect an increased aggregate principal amount of $23,941,032, which is comprised of the original $20,880,922 principal amount under the Second A&R Note, $60,110 in accrued interest as of January 19, 2024, and an additional principal amount of $3,000,000 (the Third A&R Note).
• In connection with the closing of the Third A&R Note in January 2024, Jason Mudrick, the founder and Chief Investment Officer of Mudrick Capital Management, was appointed to the Board pursuant to the terms of the A&R Incremental Subscription Agreement.
• In connection with the closing of the Fifth A&R Note in April 2024, we agreed, pursuant to the Second A&R Incremental Subscription Agreement, that Mudrick Capital Management would be entitled to identify and recommend to the Board three independent director candidates.

Stakeholder Impact

• Stockholders: Potential dilution of ownership, impact on stock price and liquidity.
• Employees: Potential for increased equity-based compensation and incentives.
• Company: Ability to maintain NYSE listing and access capital.

Next Steps

• Stockholder vote on the proposals at the Annual Meeting on July 31, 2024.
• Board determination on whether to implement the reverse stock split and at what ratio.
• Implementation of the equity incentive plan amendment and potential grant of new equity awards.
• Potential issuance of common stock related to convertible notes and inducement grants.

Key Dates

Keywords

reverse stock split, equity incentive plan, annual meeting, convertible notes, inducement grants, stock options, proxy statement, Getaround, directors, NYSE