Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
April 11, 2023 , the Company’s Board of Directors authorized an amendment to the Company’s certificate of incorporation
to establish a Series J 8% Voting, Participating, Redeemable Preferred Stock (Series J Certificate of Designation”). On April 12,
2023, the Company filed the Series J Certificate of Designation with the Secretary of State of the state of Delaware.
The
Series J Certificate of Designation sets forth the preferences, rights and limitations of the Series J Preferred Stock, a summary
of which is as follows:
Number
of Shares: The number of shares designated as Series J Preferred Stock is 15,000 (which is not subject to increase without the written
consent of a majority of the holders (each a “Series J Holder”) of the Series J Preferred Stock or as otherwise set forth
in the Series J Certificate of Designation).
Par
value: The par value of each share of Series J Preferred Stock is $0.001.
Stated
Value: The initial Stated Value of each share of Series J Preferred Stock is $100.00.
Dividend:
The Company must pay a dividend on the Series J Preferred Stock at a rate per share (as a percentage of the Stated Value per share)
of 8% per annum, payable annually within 15 calendar days of the end of each fiscal year of the Company, based on a 365-day year, in
duly authorized, validly issued, fully paid and non-assessable shares of Series J Preferred Stock, which may include fractional shares
of Series J Preferred Stock. Dividends shall accrue daily commencing on the Original Issue Date, as defined in the Series J Certificate
of Designation. The dividend to be paid at the end of the first fiscal year after closing and during the year of Redemption may
be a partial period.
Redemption:
Redemption shall happen upon the payment of an Eligible Payment which takes place upon the occurrence of an Eligible Payment Event,
as both terms are defined in the Series J Certificate of Designation.
Eligible
Payment: The Maximum Appreciated Price, (unless a lesser price is agreed by the Corporation and the Series J Holder minus
the Base Measurement Price multiplied by the number of shares of Common Stock corresponding to the number of Series J Preferred Shares
divided by the Base Measurement Price multiplied by the Stated Value.
Eligible
Payment Event: In addition to the Fundamental Transactions, as defined in the Series J Certificate of Designation,
that may cause an Eligible Payment Event as described in the Series J Certificate of Designation, the following events
shall cause an Eligible Payment: (i) any license, sublicense, joint venture or similar transaction resulting in an upfront payment of
at least $20,000,000.00, or (ii) any milestone payment with respect to research and development of at least $20,000,000.00, or (iii)
receipt of royalties in any one year of at least $20,000,000.00 or (iv) any event resulting in the Corporation’s receipt of an
amount deemed by the Corporation’s Board of Directors to be establish an Eligible Payment Event.
Base
Measurement Price: means $0.006 per share of Common Stock equivalent and shall be used for measurement of the amount of Eligible
Payment to be received by the Series J Holders in the event of an Eligible Payment Event.
Maximum
Appreciated Price: means the closing price per share of Common Stock or its equivalent on the that is the trading day on which an
Eligible Payment Event is publicly announced prior to the opening of financial markets on such date, or the trading day following the
public announcement of the Eligible Payment Event if announced after the opening of the financial markets on the date of the Eligible
Payment Event.
Voting
Rights: Each share of Series J Preferred Stock shall be entitled to that number of votes, which shall be eligible to vote along with
the Common Stockholders, or, as the case may be, when voting as a class, that is equal to one hundred (100x) times number calculated
by dividing the number of shares of Series J Preferred Stock by the Base Measurement Price as of the record date for such vote or written
consent or, if there is no specified record date, as of the date of such vote or written consent. To the extent that under the DGCL the
vote of the Series J Holders, voting separately as a class or series, as applicable, is required to authorize a given action of the Corporation,
the affirmative vote or consent of the holders of at least a majority of the then outstanding shares of the Series J Preferred
Stock represented at a duly held meeting at which a quorum is present or by written consent of Series J Holders of a majority of the
outstanding Series J Preferred Stock (except as otherwise may be required under the DGCL) shall constitute the approval of such action
by the class or series. To the extent that under the DGCL Series J Holders are entitled to vote on a matter with holders of Common Stock,
voting together as one class, each share of Series J Preferred Stock shall be entitled to the number of votes as described in the first
sentence of this paragraph.
Liquidation
Preferences: Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
no distribution shall be made to the holders of any shares of capital stock of the Corporation unless, prior thereto, the Series J Holders
shall have received out of the available assets, whether capital or surplus, of the Corporation (i) an amount equal to 100% of the stated
value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages owing thereon, for each share of Series
J Preferred Stock plus (ii) an amount equal to a pro rata portion of the Eligible Payment Amount, if any. The distribution shall result
in a Redemption. If the assets of the Corporation shall be insufficient to pay in full such amounts due the Series J Holders or any holders
of another class that is parri pasu with the Series J Holders (“Series J Pari Passu Holders”), then the entire assets shall
be distributed ratably among the Series J Holders and Series J Pari Passu Holders in accordance with the respective amounts that
would be payable on such shares if all amounts payable thereon were paid in full and such distribution shall result in a Redemption.
A Fundamental Transaction, or a Change of Control Transaction, each as defined in the Certificate, shall be deemed to be Liquidations.
Restrictions
on Transfer: Except for transfers to an immediate family member or an Affiliate (as defined in the Certificate, and which includes
trusts of which the Series J Holders or Series J Holders are grantors), Series J Holders may not, directly or indirectly, give, sell,
assign, pledge, encumber or otherwise dispose of, transfer or permit to be transferred any shares of Series J Preferred Stock held by
such Series J Holder, and any such purported transfer would have no force or effect and would not be recognized by the Company.
THE
FOREGOING SUMMARY OF THE PREFERENCES, RIGHTS, AND LIMITATIONS OF THE SERIES J PREFERRED STOCK IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE CERTIFICATE OF DESIGNATION FOR THE SERIES J PREFERRED STOCK, WHICH IS FILED AS EXHIBIT 3.1 TO THIS CURRENT REPORT ON FORM 8-K.