PROXY
STATEMENT
(DEFINITIVE)
April
29, 2019
A
NOTICE OF THE INTERNET AVAILABILITY OF THIS PROXY STATEMENT IS BEING MAILED ON OR ABOUT APRIL 29, 2019 TO STOCKHOLDERS
OF RECORD ON FEBRUARY 28, 2019.
Why
am I receiving these materials?
Immune
Therapeutics, Inc. (the “Company”) has made these materials available to you on the Internet or, upon your request,
has delivered printed versions of these materials to you by mail, in connection with the Company’s solicitation of written
consent from shareholders of record as of February 28, 2019 (the “Record Date”) for the corporate actions described
herein (the “Actions”). These materials were first sent or made available to shareholders on or around April 29,
2019.
Written
consents will be directly solicited on the Company’s behalf by certain of its officers in person, by telephone or via electronic
communication from shareholders with which the officers have existing relationships and who hold the Requisite Consent (below
defined).
Why
did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy
materials?
Pursuant
to rules adopted by the SEC, the Company uses the Internet as the primary means of furnishing proxy materials to shareholders.
Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to the Company’s
shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or
request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request
a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by
mail. The Company encourages shareholders to take advantage of the availability of the proxy materials on the Internet to help
reduce the environmental impact of its Actions and the cost to the Company associated with the physical printing and mailing of
materials.
What
is included in these materials?
These
materials include:
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-The
Company’s 2018 annual report, filed April 16, 2019, and quarterly financial statements for fiscal year 2018
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-This
Proxy Statement
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If
you requested printed versions by mail, these materials also include a written consent form.
What
are the Actions for which written consent is being sought?
The
Company is seeking written consent for the following Actions:
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Authorize
the Company to issue up to 10,000,000 shares of preferred stock (“the Preferred Authorization”), to be designated
and issued by the Company’s Board of Directors, except for 1,000,000 of such preferred shares that will be designated
by the written consent (“Series D Designation”) as Series D Convertible Preferred Stock, with the rights and privileges
described in the “Certificate of Designation” attached hereto (Proposal No. 1);
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Effect
a reverse stock split (the “Reverse Split”) of the Company’s issued and outstanding, but not authorized,
common stock at a ratio between 800-to-1 to 1,000-to-1, to be determined by the Company’s Board of Directs and effectuated
no later than December 31, 2019 (Proposal No. 2); and
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Change
the Company’s name to Forte Biotechnology, Inc. (the “Name Change”) (Proposal No. 3);
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What
are the Board’s voting recommendations?
As
of the date of this Proxy Statement, no member of the Board of Directors of the Company (the “Board”) has informed
us that he/she intends to oppose any of the proposed Actions. The Board recommends that you give written consent:
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“FOR”
the Preferred Authorization and Series D Designation (Proposal No. 1);
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“FOR”
the Reverse Split (Proposal No. 2);
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“FOR”
the Name Change (Proposal No. 3);
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Why
are these Actions being proposed?
The
Preferred Authorization and Series D Designation are intended to allow the Company to raise additional capital, solicit certain
service providers, and repay some of the Company’s outstanding debt, as determined by the Company’s board of directors
to be in the best interests of the Company and its shareholders. There are not currently any specific plans, arrangements, or
understandings for the issuance of the shares of preferred stock that become authorized through the Preferred Authorization; however,
the Company does intend set terms for an offering of, and to issue, the Series D Preferred Stock prior to effectuation of the
Reverse Split in order to raise capital and retire existing debt of the Company. To the extent that the Company issues preferred
stock that is convertible into common stock or has voting rights, existing shareholders’ economic interests and voting rights
in the Company would be proportionately diluted.
The
Board believes that the Reverse Split will help simplify the Company’s capitalization table, make it more competitive with
companies of similar industry and size, make the Company’s common stock more attractive to the market, and make available
additional common stock to raise capital and entice qualified service providers throughout the Company’s lifetime. The Board
believes that this method is preferable to authorizing additional common shares to issue. Because the Company is not reducing
its authorized shares as part of the Reverse Split, the Reverse Split will have the potential effect of diluting shareholders’
interests in the Company, as discussed in more detail under “What effect will the Actions have on authorized and outstanding
shares?”.
The
Name Change is proposed to better reflect the Company’s current business model, to effect a rebranding of the Company and
to distinguish the Company from other publicly traded companies with similar names to Immune Therapeutics, Inc.
When
can I give written consent?
Written
consents will be solicited from April 29, 2019 until the earlier of June 3, 2019 or the date the Company receives the Requisite
Consent (the “Deadline Date”). Written consents will be solicited from select shareholders holding the Requisite Consent;
however, any shareholder may submit a written consent, in the manner indicated below, on or before the Deadline Date.
Can
I change or revoke my written consent?
Your
written consent may be changed or revoked at any time prior to the Deadline Date by providing the Company written notice of such
revocation, which must be received by the Company prior to the Deadline Date.
What
rights do dissenters have?
Under
the
Florida
Business Corporation Act and our Articles of Incorporation and Bylaws, no
stockholder has any right to dissent to the Actions, nor is any stockholder entitled to appraisal of or payment for their shares
of our stock.
Do
any officers or directors have any special interest in the Actions?
No
executive officer or director of the Company has any substantial interest in the Actions that is different from the other shareholders
of the Company.
If
the Actions are approved, when will they take effect?
The
Actions will become fully effective no sooner than 40 days after April 29, 2019 and no later than December 31, 2019.
Where
are the Company’s principal executive offices located and what is the Company’s main telephone number?
The
Company’s principal executive offices are located at 37 North Orange Ave, Suite 607, Orlando, FL 32801. The Company’s
main telephone number is 888-613-8802.
What
is the Company’s fiscal year?
The
Company’s fiscal year is same as the calendar year, ending on December 31. Unless otherwise stated, all information presented
in this Proxy Statement is based on the Company’s fiscal calendar.
I
share an address with another shareholder, and we received only one paper copy of the proxy materials. How may I obtain an additional
copy of the proxy materials?
The
Company has adopted an SEC-approved procedure called “householding.” Under this procedure, the Company delivers a
single copy of the Notice and, if applicable, this Proxy Statement to multiple shareholders who share the same address unless
the Company has received contrary instructions from one or more of the shareholders. This procedure reduces the Company’s
printing and mailing costs, and the environmental impact of its Actions. Shareholders who participate in householding will continue
to be able to access and receive separate proxy cards. Upon written or oral request, the Company will deliver promptly a separate
copy of the Notice and, if applicable, this Proxy Statement to any shareholder at a shared address to which the Company delivered
a single copy of any of these documents.
To
receive free of charge a separate copy of the Notice and, if applicable, this Proxy Statement or the Annual Report, shareholders
may write or call the Company at the following:
Immune
Therapeutics, Inc.
37 North Orange Ave, Suite 607
Orlando, FL 32801
888-613-8802
Shareholders
who hold shares in “street name” (as described below) may contact their brokerage firm, bank, broker-dealer or other
similar organization to request information about householding.
How
can I get electronic access to the proxy materials?
The
Company’s proxy materials are available at www.immunetherapeutics.com/ investors/secfilings/. This website address is included
for reference only. The information contained on the Company’s website is not incorporated by reference into this Proxy
Statement.
Who
may give written consent?
Each
share of the Company’s common stock has one vote on each Action. Only shareholders of record as of the close of business
on the Record Date are entitled to give written consent on any or all of the Actions. As of the Record Date, there were approximately
455,577,799 shares of the Company’s common stock issued and outstanding, held by approximately 805 holders of record. In
addition to shareholders of record of the Company’s common stock, beneficial owners of shares held in street name as of
the Record Date can vote using the methods described below. However, the Company is not soliciting written consents from all shareholders
of record, but rather from only certain shareholders holding the Requisite Consent with which officers of the Company have a direct
relationship. You may nonetheless submit a written consent, in the manner detailed below, for any or all of the Actions, should
you desire.
What
is the difference between a shareholder of record and a beneficial owner of shares held in street name?
Shareholder
of Record
. If your shares are registered directly in your name with the Company’s transfer agent, ClearTrust, LLC (“ClearTrust”),
you are considered the shareholder of record with respect to those shares, and the Notice was sent directly to you by the Company.
Beneficial
Owner of Shares Held in Street Name
. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other
similar organization, then you are the “beneficial owner” of shares held in “street name,” and a Notice
was forwarded to you by that organization. As a beneficial owner, you have the right to instruct your broker, bank, trustee, or
nominee how to vote your shares.
If
I am a shareholder of record of the Company’s shares, how do I give written consent?
If
you are a shareholder of record, you may give written consent as follows:
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Via
Email
. The Company intends to directly solicit certain shareholders holding the Requisite Consent via phone, in person
communications and email. Such shareholders may return their written consents to the Company via email to the email address
provided by the Company to such shareholders at the time of solicitation.
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By
Mail
. If you have not been solicited directly by an officer of the Company, you may give written consent by filling out
the written consent form and returning it to the Company’s address listed above prior to the Deadline Date.
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If
I am a beneficial owner of shares held in street name, how do I give written consent?
If
you are a beneficial owner of shares held in street name, you may give written consent as follows:
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By
Mail
. If you have not been solicited directly by an officer of the Company, you may give written consent by proxy by filling
out the written consent form and returning it to the Company’s address listed above prior to the Deadline Date with
a “legal proxy” from the organization that holds your shares. Please contact the organization that holds your
shares for instructions regarding obtaining a legal proxy.
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How
are proxies voted?
The
Company is seeking proxies via the written consent. You must submit a written consent for your shares to be counted towards the
Requisite Consent and, where a shareholder specifies by means of the written consent a choice with respect to any matter to be
acted upon, the shares will be voted in accordance with the shareholder’s instructions.
What
happens if I do not give written consent to any specific Action?
Shareholders
of Record
. If you are a shareholder of record and you:
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Indicate
that you wish to give consent as recommended by the Board; or
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Sign
and return a written consent without indicating to which Actions you are giving written consent,
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then
you will be deemed to have given written consent to all proposals recommended by the Board on all matters presented in this Proxy
Statement. If you do not return a written consent, your shares will not be counted towards the Requisite Consent.
Beneficial
Owners of Shares Held in Street Name
. If you are a beneficial owner of shares held in street name and do not provide the organization
that holds your shares with specific instructions then, under applicable rules, the organization that holds your shares may generally
vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your
shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform
the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally
referred to as a “broker non-vote.”
Which
ballot measures are considered “routine” or “non-routine”?
The
Name Change (Proposal 3) is considered a routine matter. All other Proposals to which this Proxy Statement pertains are considered
“non-routine” matters.
What
is the requirement to approve each of the proposals (the “Requisite Consent”)?
The
Preferred Authorization and Series D Designation (Proposal 1), require the affirmative vote of two-thirds of the Company’s
outstanding shares, or approximately 303,718,533 shares.
Approval
of Proposals 2 and 3 requires the affirmative vote of shareholders holding a majority of the voting interests of the Company,
or approximately 227,778,900 shares.
How
are broker non-votes and abstentions treated?
Broker
non-votes and abstentions are not counted towards the Requisite Consent. Only “FOR” votes are counted for purposes
of determining whether the Requisite Consent has been met.
Who
will serve as the inspector of election?
The
Company’s CEO will serve as the inspector of election.
Is
my written consent confidential?
Written
consents that identify individual shareholders are handled in a manner that protects your voting privacy. Your written consent
will not be disclosed either within the Company or to third parties, except:
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As
necessary to meet applicable legal requirements;
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To
allow for the tabulation and certification of votes; and
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To
facilitate a successful proxy solicitation.
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Where
can I find the results of the Actions?
Following
the Deadline Date, the Company will publish the final voting results in a Current Report on Form 8-K, which the Company is required
to file with the SEC within four business days following the Deadline Date.
Who
is paying the costs of this proxy solicitation?
The
Company is paying the costs of the solicitation of written consents, including mailing and shipping costs.
The
Company must also pay brokerage firms, banks, broker-dealers or other similar organizations representing beneficial owners of
shares held in street name certain fees associated with:
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Forwarding
the Notice to beneficial owners;
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Forwarding
printed proxy materials by mail to beneficial owners who specifically request them; and
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Obtaining
beneficial owners’ voting instructions.
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In
addition, certain of the Company’s officers, without additional compensation, will solicit written consents on the Company’s
behalf in person, by telephone, or by electronic communication.
Will
the proposed Actions have any federal income tax consequences?
The
description of federal income tax consequences of the Actions contained herein is based on the Internal Revenue Code of 1986,
as amended, the applicable Treasury Regulations promulgated thereunder, judicial authority, and current administrative rulings
and practices as in effect on the date of this Proxy Statement. We have not sought and will not seek an opinion of counsel or
a ruling from the Internal Revenue Service regarding the federal income tax consequences of the Actions.
We
believe that the Actions will not have federal income tax effects. The Company should not recognize gain or loss as a result of
the Actions.
What
effect will the Actions have on authorized and outstanding shares?
The
rights and preferences of shares of our common stock subsequent to the Actions will remain the same. We do not anticipate that
the number of our stockholders, or any aspect of our current business plan, will materially change as a result of these changes.
The Actions will affect all of our stockholders uniformly.
The
number of authorized common shares will remain the same following the Actions; however, the number of authorized preferred shares
will increase by 10,000,000. The Reverse Split and issuance of preferred shares following the Preferred Authorization and Series
D Designation will have the effect of diluting current shareholders. Because the number of authorized common shares will remain
the same but the issued and outstanding common stock of Company will be reduced, in the event of a 800-to-1 Reverse Split the
number of authorized common stock available for issuance will increase by approximately 455,008,326 shares, and in the event of
a 1,000-to-1 Reverse Split the number of authorized stock available for the Company to issue will increase by approximately 455,122,221
shares, each assuming no shares are issued from today until the Reverse Split is effectuated. Notwithstanding, the Company does
not currently have plans to issue additional common stock except for in the ordinary course of business.
When
will shares of Preferred Stock be issued?
Following
the Preferred Authorization, shares of Preferred Stock will be designated and issued by the Board in its sole discretion in such
amounts and at such times as approved by the board. Preferred Stock may be issued for services or for payment received by the
Company. The value of Preferred Stock provided in exchange for services or monies has not yet been established and the Company
has no current plans to designate Preferred Stock in addition to the Series D Designation. The Series D Preferred Stock will begin
to be issued once the Company has set terms for its sale or issuance, which is expected to occur once the Actions have been approved
and prior to effectuation of the Reverse Split.
What
are the rights, privileges, and restrictions of Series D Convertible Preferred Stock?
Following
the Series D Designation, holders of Series D Convertible Preferred Stock (“Series D Holders”) shall have rights,
privileges, and restrictions detailed in the Certificate of Designation attached hereto, including but not limited to, the following:
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Series
D Holders shall not be entitled to receive dividends or other distributions.
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Each
share of Series D Convertible Preferred Stock shall have a “Face Value” of $10.00.
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Each
share of Series D Convertible Preferred Stock shall be convertible, at the option of the Series D Holders, at any time following
the issuance of such shares of Series D Convertible Preferred Stock, into such number of fully paid and non-assessable shares
of Common Stock equal to the aggregate Face Value of the Series D Convertible Preferred Stock being converted, divided by
the “Exercise Price.” The “Exercise Price” shall be $0.10, as adjusted from time to time.
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If
the Company at any time subdivides its Common Stock, by split-up or stock split, or otherwise, or combines its Common Stock,
or issues additional shares of its Common Stock as a dividend, the number of shares of Common Stock issuable upon the conversion
of each share of Series D Convertible Preferred Stock shall be automatically increased proportionately in the case of a subdivision,
split, or stock dividend, or proportionately decreased in the case of a combination; provided, however, that in the case of
combination, the common stock into which the Series D Convertible Preferred Stock may be converted may not be decreased by
a ratio of more than 10:1.
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If
the Company effects a consolidation or merger pursuant to which holders of Common Stock become entitled to receive other stock,
securities, or property of another corporation for cash, or in the case of any conveyance of all or substantially all of the
assets of the Company to another corporation, the Company shall mail to each Series D Holder, at least thirty (30) days prior
to the consummation of such event, a notice thereof and each such holder shall have the option to convert such holder’s
shares of Series D Convertible Preferred Stock into Common Stock and thereafter receive the number of shares of Common Stock
and any other securities, property, or cash, as the case may be, which a holder of the number of shares of Common Stock of
the Company deliverable upon conversion of such Series D Convertible Preferred Stock would be entitled to receive.
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In
the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the assets of the Company available for distribution to its stockholders shall be distributed pro rata to Series D Holders
on an “as converted” basis into Common Stock.
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Series
D Holders have no voting rights. Except as required by law, the Series D Holders shall not be entitled to notice of any stockholder’s
meeting.
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Where
can I find more information?
Information
is available by request or can be accessed on the internet. Reports, proxy statements and other information filed with the SEC
by the Company can be accessed electronically by means of the Securities and Exchange Commission’s home page on the Internet
at http://www.sec.gov or at other Internet sites such as http://www.freeedgar.com or http://www.otcmarkets.com.
You
may also read and copy any materials that we file with the Securities and Exchange Commission at the commission’s Public
Reference Room at 100 F Street, N.E., Washington D.C. 20549. A copy of any public filing is also available to any shareholder
at no charge upon written request to the Company by providing an e-mail or facsimile number.
FORWARD-LOOKING
STATEMENTS
This
Proxy Statement contains forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties
and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance
that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not
to rely unduly on any forward-looking statements. We expressly disclaim any obligation to update any forward-looking statement
in the event it later turns out to be inaccurate, whether as a result of new information, future events or otherwise.
INCORPORATION
BY REFERENCE
The
Company’s financial statements, supplementary financial information, changes and disagreements with accountants, manager
discussion and analysis, and quantitative and qualitative disclosures about market risk from its Annual Report filed on Form 10-K
on April 2, 2018 are incorporated herein by reference. The Company’s financial statements, supplementary financial information,
manager discussion and analysis, and quantitative and qualitative disclosures about market risk from its Quarterly Reports filed
on Form 10-Q on May 15, 2018, August 14, 20018, and November 14, 2018, respectively, and the 2018 Annual Report filed on April
16, 2019, are also incorporated herein by reference. No representative from the Company’s accountant is expected to make
a statement or be available for questions regarding the Actions.
Appendix
A
WRITTEN
CONSENT OF THE
SHAREHOLDERS OF IMMUNE THERAPEUTICS, INC.
The
undersigned, being the Shareholders (the “
Shareholders
”) of Immune Therapeutics, Inc., a Florida corporation
(the “
Company
”) holding the number of shares required to approve the below actions, pursuant to the Florida
Business Corporation Act and the Bylaws of the Company, hereby consent to the following actions and hereby adopt and approve the
following recitals and resolutions by written consent.
WHEREAS
,
the Shareholders believe it is in the best interest of the Company to authorize the Company to issue up to 10,000,000 shares of
preferred stock, par value $0.0001, with the rights and privileges as designated by the Directors, and to designate 1,000,000
of such preferred shares as Series D Preferred Stock, with the rights and privileges as included in the attached “
Certificate
of Designation
” (Proposal 1);
WHEREAS
,
the Shareholders believe it in the best interest of the Company to effectuate a reverse stock split of the Company’s issued
and outstanding, but not authorized, common stock (“
Reverse Split
”) at a ratio between 800-to-1 and 1,000-to-1,
as determined by the Directors;
provided, however
, that the Reverse Split must be consummated prior to December 31, 2019
(Proposal 2); and
WHEREAS
,
the Shareholders wish the Company to change its name to Forte Biotechnology, Inc. (“
Name Change
”) (Proposal
3);
NOW,
THEREFORE, BE IT RESOLVED
, that the Company shall be authorized to issue up to 10,000,000 shares of preferred stock, par value
$0.0001.
FURTHER
RESOLVED
, that from the 10,000,000 authorized shares of preferred stock, 1,000,000 shares will be authorized and designated
as Series D Preferred Stock, with the rights and privileges as included in the attached Certificate of Designation, which each
Shareholder acknowledges it has read and approves.
FURTHER
RESOLVED
, that from the undesignated shares of preferred stock, the Company’s Board of Directors is authorized to, by
written resolution, (1) designate wholly unissued series of preferred stock, (2) direct the issuance of the preferred stock in
one or more series, (3) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of
any wholly unissued series of the preferred stock, (4) fix the number of shares for any wholly unissued series of preferred stock,
and (5) increase or decrease the number of shares of any wholly unissued series of preferred stock.
FURTHER
RESOLVED
, that the Reverse Split is approved.
FURTHER
RESOLVED
, the Name Change is approved.
FURTHER
RESOLVED
, that the officers of the Company be, and each of them hereby is, authorized and directed to take all such further
actions and to execute and deliver, in the name of and on behalf of the Company, any and all such further documents, agreements,
certificates, instruments and undertakings, and to incur all such fees and expenses, as they or any of them may deem necessary
or advisable to carry out the purpose of the foregoing resolution and that the taking of each such action, the execution and delivery
of each such document or instrument, and the payment of each such expense shall be conclusive evidence of its necessity and advisability.
FURTHER
RESOLVED
, that any and all actions taken by the officers of the Company prior to the date hereof and contemplated by the foregoing
resolutions are hereby adopted and approved as the acts and deeds of the Company.
The
undersigned hereby agrees that this written consent may be executed in one or more counterparts, each of which shall be deemed
an original, and all of which, when taken together, shall be deemed one action.
IN
WITNESS WHEREOF
, the undersigned Shareholder, by his/her/its signature hereunder, waives any requirement of notice required
by law or the Company’s Bylaws, and executes this written consent as of the ___ day of _____________________, 20____ to
approve the following Proposals (check all that apply).
Proposal
1
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Proposal
2
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Proposal
3
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Follow
Board Recommendations
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Shareholder
Signature
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Signature
of spouse, partner, or joint tenant
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Printed:
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Shares
Held:
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Appendix
B
CERTIFICATE
OF DESIGNATION OF RIGHTS, PRIVILEGES, PREFERENCES AND
RESTRICTIONS OF SERIES D CONVERTIBLE PREFERRED STOCK
OF IMMUNE THERAPEUTICS, INC.
The
undersigned, CEO and Secretary of Immune Therapeutics, Inc. (the “Corporation”), hereby certify the following:
The
Corporation is authorized to issue ten million (10,000,000) shares of preferred stock, par value $0.0001 (“Preferred Stock”).
Pursuant to resolutions adopted by the Unanimous written consent of the Board of Directors effective on or around November 25,
2018, and the written consent of over two thirds of the Corporation’s issued and outstanding voting shares (collectively,
the “Consent”) the Corporation has adopted resolutions establishing a series of Preferred Stock from its authorized
shares of Preferred Stock, designated Series D Preferred Stock, consisting of one million (1,000,000) shares (the “Series
D Stock”), with certain rights, privileges, preferences and restrictions as set forth in this Certificate of Designation
of Rights, Privileges, Preferences and Restrictions of Series D Convertible Preferred Stock of Immune Therapeutics, Inc. (“Certificate
of Designation”) as follows:
1.0
Designation and Rank
A
new series of Preferred Stock from the Corporation’s authorized shares of Preferred Stock is hereby created, designated
Series D Convertible Preferred Stock, consisting of one million (1,000,000) shares, with certain rights, privileges, preferences
and restrictions as herein set forth. Each share of Series D Stock shall have a “Face Value” of $10.00.
2.0
Dividend Rate and Rights
Holders
of the Series D Stock shall not be entitled to receive dividends or other distributions with or without the holders of the Corporation’s
Common Stock.
3.0
Conversion into Common Stock
3.1
Conversion.
Each
share of Series D Stock shall be convertible, at the option of the holder thereof and subject to notice requirements of paragraph
3.2, at any time following the issuance of such shares of Series D Stock, into such number of fully paid and non-assessable shares
of the Common Stock as is equal to the aggregate Face Value of the Series D Preferred Stock being converted, divided by the “Exercise
Price.” The “Exercise Price” shall be $0.10 per share, as adjusted per the terms hereof. 3.2 Notice of Conversion.
Holders
of Series D Stock may convert at any time by providing the Corporation with written notice to the Corporation (“Notice to
Convert”). The Notice to Convert will state the number of Series D Preferred Stock being converted, the Exercise Price,
the number of shares of Common Stock to be received and the name, tax identification number and address to which the Common Stock
should be registered.
3.3
Mechanics of Conversion.
No
fractional shares of Common Stock shall be issued upon conversion of Series D Stock and the number of shares of Common Stock to
be issued shall be determined by rounding to the nearest whole share (a half share being treated as a full share for this purpose).
Such conversion shall be determined on the basis of the total number of shares of Series D Stock the holder has at the time and
is converting into Common Stock and such rounding shall apply to the number of shares of Common Stock issuable upon aggregate
conversion. Before any holder shall be entitled to convert, he shall surrender the certificate or certificates representing Series
D Stock to be converted, duly endorsed or accompanied by proper instruments of transfer, at the office of the Corporation or of
any transfer agent and shall give written notice to the Corporation at such office that he elects to convert the same. The Corporation
shall, as soon as practicable after delivery of such certificates, or such agreement and indemnification in the case of a lost,
stolen or destroyed certificate, issue and deliver to such holder of Series D Stock a certificate or certificates for the number
of shares of Common Stock to which such holder is entitled. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series D Stock to be converted. Notwithstanding anything
to the contrary contained in this Certificate of Designation, no Holder of Series D Stock may effect any conversion of any Series
D Stock, to the extent (but only to the extent) that such Holder or any of its affiliates would beneficially own in excess of
4.99% of the then issued and outstanding shares of Common Stock.
3.4
Adjustments to Conversion Price—Recapitalization.
If
the Corporation shall at any time subdivide the Common Stock, by split-up or stock split, or otherwise, or combine its Common
Stock, or issue additional shares of its Common Stock as a dividend, the number of shares of Common Stock issuable upon the conversion
of each share of Series D Stock shall forthwith be automatically increased proportionately in the case of a subdivision, split
or stock dividend, or proportionately decreased in the case of a combination; provided, however, that in the case of combination,
the number of shares of Common Stock issuable upon the conversion of each share of Series D Stock may not be decreased by a ratio
of more than 10:1. Appropriate adjustments shall also be made to the Face Value, Exercise Price and other applicable amounts.
Any adjustment under this Section 3.4 shall become effective automatically at the close of business on the date the subdivision
or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon
the making of such dividend.
3.5
Adjustments to Conversion Price—Merger or Reorganization.
In
case of any consolidation or merger of the Corporation as a result of which holders of Common Stock become entitled to receive
other stock or securities or property of another corporation for cash, or in the case of any conveyance of all or substantially
all of the assets of the Corporation to another corporation, the Corporation shall mail to each holder of Series D Stock at least
Thirty (30) days prior to the consummation of such event, a notice thereof and each such holder shall have the option to convert
such holder’s shares of Series D Stock into Common Stock pursuant to this Paragraph 3 and thereafter receive the number
of shares of Common Stock or other securities or property, or cash, as the case may be, to which a holder of the number of shares
of Common Stock of the Corporation deliverable upon conversion of such Series D Stock would have been entitled upon conversion
pursuant to Section 8.1(a) hereof.
3.6
Leak Out
Holders
of Series D Stock may not to sell, transfer, or otherwise dispose of Common Stock received as a result of conversion of Series
D Stock in an amount more than 1% of the Corporation’s issued and outstanding Common Stock each calendar month. The Company
may place appropriate legends on the Common Stock converted from Series D Stock indicating the foregoing restrictions.
4.0
No Impairment
The
Corporation will not, by amendment of its Articles of Incorporation or by amendment to the Certificate of Designation of the Rights,
Privileges, Preferences and Restrictions of Series D Convertible Preferred Stock establishing Series D Stock, which shall be prepared
as a separate document and filed with the requisite regulatory agencies and state registry, or by resolutions adopted subsequent
to the date hereof, or through any reorganization, transfer of assets, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times
in good faith assist in the carrying out of all the provisions of this Paragraph 4, and in the taking of all such actions as may
be necessary or appropriate in order to protect against the impairment of the conversion rights of holders of the Series D Stock.
5.0
Reissuance of Certificates upon Adjustments
No
share or shares of Series D Stock acquired by the Corporation by reason of conversion or otherwise shall be reissued as Series
D Stock, and all such shares thereafter shall be returned to the status of undesignated and unissued shares of Preferred Stock
of the Corporation.
6.0
Notices of Record Date
In
the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid
in a previous quarter) or other distribution, the Corporation shall mail to each holder of shares of Series D Stock at least Ten
(10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose
of paying such dividend or distribution.
7.0
Common Stock Reserved
The
Corporation shall take such action as is necessary, and to amend its Articles of Incorporation, if required, to have authorized
such number of shares of Common Stock as shall from time to time be sufficient to effect (a) conversion of the Series D Stock
into Common Stock.
8.0
Liquidation Preference
8.1
Distribution upon Liquidation.
In
the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the assets of the Corporation available for distribution to its stockholders shall be distributed pro rata to the holders of the
Series D Stock and Common Stock (in the case of the Preferred Stock, on an “as converted” basis into Common Stock).
8.2
Definition of Liquidation.
For
purposes of this Section and unless a majority of the holders of the Series D Stock affirmatively vote or agree by written consent
to the contrary, a Liquidation shall be deemed to include (i) the acquisition of the Corporation by another entity by means of
any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation)
and (ii) a sale of all or substantially all of the assets of the Corporation, unless the Corporation’s stockholders of record
as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Corporations acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting
power of the surviving or acquiring entity.
8.3
Distributions upon Sales or Liquidation for other than Securities.
If
any of the assets of the Corporation are to be distributed other than in cash under this Section, then the board of directors
of the Corporation shall promptly engage independent competent appraisers to determine the value of the assets to be distributed
to the holders of Series D Stock or Common Stock. The Corporation shall, upon receipt of such appraiser’s valuation, give
prompt written notice to each holder of shares of Preferred Stock or common Stock of the appraiser’s valuation.
9.0
Voting Rights.
Holders
of the Series D Stock have no voting rights. Except as required by law, the holders of shares of Series D Stock shall not be entitled
to notice of any stockholder’s meeting.
10.0
Legends
Upon
conversion, the Corporation may place standard restrictive legends on the Common Stock.
11.0
Reissuance.
No
share or shares of Series D Stock acquired by the Corporation by reason of conversion or otherwise shall be reissued as Series
D Stock, and all such shares thereafter shall be returned to the status of undesignated and unissued shares of Preferred Stock
of the Corporation.
12.0
Notices
Unless
otherwise specified in the Corporation’s Articles of Incorporation or Bylaws, all notices or communications given hereunder
shall be in writing and, if to the Corporation, shall be delivered to its principal executive offices, and if to the holder of
any shares of Series D Stock, shall be delivered to it at its address as it appears on the stock records of the Corporation.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designation of Rights, Privileges, Preferences and Restrictions
of Series D Convertible Preferred Stock of Immune Therapeutics, Inc. to be signed by the Corporation’s President and Secretary
effective this ____ day of _____________, 20____.
Immune
Therapeutics, Inc.
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By
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Noreen
Griffin, CEO
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By:
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Peter
Aronstam , Secretary
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