Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year
On April 17, 2019, the Company filed Certificates of Designation of Preferences, Rights and Limitations of the Series C Preferred Shares and Series D Preferred Shares (collectively, the “Preferred Shares”) with the Secretary of State of the State of Delaware (the “Certificates of Designation”). The following is only a summary of the Certificates of Designation and is qualified in its entirety by reference to the full text of the Certificates of Designation, which are filed as Exhibit 3.1 and Exhibit 3.2 to this Current Report on Form 8-K and are incorporated by reference herein.
Designation, Amount and Par Value
. The number of Series C Preferred Shares designated shall be up to 280,898. The number of Series D Preferred Shares designated shall be up to 280,898. Each share of Series C Preferred Shares and Series D Preferred Shares have a par value of $0.001 per share and a stated value equal to $3.56 (the “Stated Value”).
Dividends
.
The holder shall be entitled to receive, and the Company shall pay, dividends on
the Preferred Shares
equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends actually
paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock. No other dividends shall be paid on the
Series
C
Preferred Shares and Series
D
Preferred
Shares
.
Voting Rights
.
Except as otherwise provided herein or as otherwise required by law, the
Preferred Shares
shall have no voting rights. However, as long as any
Series C Preferred Shares or Series D Preferred Shares
are outstanding, the Company shall not, without the affirmative vote of the holders (the “Holders”) of the respective series of
Preferred Shares
(a) alter or change adversely the powers, preferences or rights given to such series of
Preferred Shares
or alter or amend its respective Certificates of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation senior to, or otherwise
pari
passu
with, such series of
Preferred Shares
, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the respective Holders, (d) increase the number of authorized
Series C Preferred Shares and Series D Preferred Shares, respectively
, or (e) enter into any agreement with respect to any of the foregoing
.
Liquidation
. Upon any Liquidation (as defined in the Certificates of Designation), each Holder shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value, plus any other fees or liquidated damages then due and owing thereon under the Certificates of Designation, for each
Series C Preferred Share and Series D Preferred Share
before any distribution or payment shall be made to the holders of any Junior Securities (as defined in the Certificates of Designation). A Fundamental Transaction or Change of Control Transaction (each as defined in the Certificates of Designation) shall be deemed a Liquidation
.
Fundamental Transaction
.
If, at any time while the
Series C Preferred Shares and Series D Preferred Shares
are outstanding, upon a Fundamental Transaction, each Holder shall have the right to receive, for each Conversion Share (as defined in the Certificates of Designation) that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any Alternate Consideration (as defined in the Certificates of Designations) receivable as a result of such Fundamental Transaction by a holder of the number of shares of common stock for which the
Series C Preferred Shares and Series D Preferred Shares
are convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction
.
Conversion
. The Series C Preferred Shares are convertible into an aggregate of 280,898 Common Shares; however the Series C Preferred Shares contains a provision that restricts the Holder’s ability to convert the Series C Preferred Shares if the number of shares of the Company’s common stock held by such Holder and its affiliates after such conversion would exceed 9.99% of the Company’s then issued and outstanding shares of common stock. The Series D Preferred Shares are convertible into an aggregate of 280,898 Common Shares at the option of the holder.