Item 3.03
|
Material
Modification to Rights of Security Holders.
|
Effective
February 14, 2017, the Board of Directors (the “
Board
”) of MYOS RENS Technology Inc., a Nevada corporation
(the “
Company
”), declared a dividend of one right (a “
Right
”) for each of the Company’s
issued and outstanding shares of common stock, $0.001 par value per share (“
Common Stock
”). The dividend will
be paid to the stockholders of record at the close of business on February 24, 2017 (the “
Record Date
”). Each
Right entitles the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company
one one-thousandth of a share of the Company’s Series A Preferred Stock (the “
Preferred Stock
”) at a
price of $7.00 (the “
Exercise Price
”), subject to certain adjustments. The description and terms of the Rights
are set forth in the Rights Agreement dated as of February 14, 2017 (the “
Rights Agreement
”) between the Company
and Island Stock Transfer, as Rights Agent (the “
Rights Agent
”).
The
Rights will not be exercisable until the earlier to occur of (i) the close of business on the tenth business day after a public
announcement or filing that a person has, or group of affiliated or associated persons or persons acting in concert have, become
an “
Acquiring Person
,” which is defined as a person or group of affiliated or associated persons or persons
acting in concert who, at any time after the date of the Rights Agreement, have acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the Company’s outstanding shares of Common Stock, subject to certain exceptions or (ii) the
close of business on the tenth business day after the commencement of, or announcement of an intention to commence, a tender offer
or exchange offer the consummation of which would result in any person becoming an Acquiring Person (the earlier of such dates
being called the “
Distribution Date
”). Certain synthetic interests in securities created by derivative positions,
whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of
Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares
of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the Common
Stock are directly or indirectly held by counterparties to the derivatives contracts.
With
respect to certificates representing shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for shares of Common Stock registered in the names of the holders thereof, and not
by separate Rights Certificates, as described further below. With respect to book entry shares of Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by the balances indicated in the book entry account
system of the transfer agent for the Common Stock. Until the earlier of the Distribution Date and the Expiration Date, as described
below, the transfer of any shares of Common Stock outstanding on the Record Date will also constitute the transfer of the Rights
associated with such shares of Common Stock. As soon as practicable after the Distribution Date, separate certificates evidencing
the Rights (“
Right Certificates
”) will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date, and such Right Certificates alone will evidence the Rights.
The Rights, which are not exercisable
until the Distribution Date, will expire prior to the earliest of (i) February 14, 2020; (ii) the time at which the Rights are
redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement and
(iv) the time at which the Rights are terminated upon the closing of any merger or other acquisition transaction involving the
Company pursuant to a merger or other acquisition agreement that has been approved by the Board prior to any person becoming an
Acquiring Person (the earliest of (i), (ii), (iii) and (iv) is referred to as the “
Expiration Date
”).
Each
share of Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal
to the greater of (i) $1.00 per share or (ii) an amount equal to 1,000 times the dividend declared per share of Common Stock.
Each share of Preferred Stock will entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders
of the Company. In the event of any merger, consolidation or other transaction in which shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per one share of Common Stock.
The
Exercise Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock or convertible securities at less than the then-current market price
of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other
than those referred to above). The number of outstanding Rights and the number of one one-thousandths of a Preferred Stock issuable
upon exercise of each Right are also subject to adjustment in the event of a stock split, reverse stock split, stock dividends
and other similar transactions.
In
the event that, after a person or a group of affiliated or associated persons has become an Acquiring Person, the Company is acquired
in a merger or other business combination transaction, or 50% or more of the Company’s assets or earning power are sold,
proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof
at the then-current exercise price of the Right, that number of shares of common stock of the acquiring company having a market
value at the time of that transaction equal to two times the Exercise Price.
With
certain exceptions, no adjustment in the Exercise Price will be required unless such adjustment would require an increase or decrease
of at least one percent in the Exercise Price. No fractional shares of Preferred Stock will be issued (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced
by depositary receipts) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock
on the trading day immediately prior to the date of exercise.
At
any time after any person or group of affiliated or associated persons becomes an Acquiring Person and prior to the acquisition
of beneficial ownership by such Acquiring Person of 50% or more of the outstanding shares of Common Stock, the Board, at its option,
may exchange each Right (other than Rights owned by such person or group of affiliated or associated persons which will have become
void), in whole or in part, at an exchange ratio of two shares of Common Stock per outstanding Right (subject to adjustment).
At
any time before any person or group of affiliated or associated persons becomes an Acquiring Person, the Board may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right (subject to certain adjustments) (the “
Redemption Price
”).
The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole
discretion may establish.
Immediately
upon the action of the Board electing to redeem or exchange the Rights, the Company shall make an announcement thereof, and upon
such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until
a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The
Board may amend or supplement the Rights Agreement without the approval of any holders of Rights, including, without limitation,
in order to (a) cure any ambiguity, (b) correct inconsistent provisions, (c) alter time period provisions or (d) make additional
changes to the Rights Agreement that the Board deems necessary or desirable. However, from and after any person or group of affiliated
or associated persons becomes an Acquiring Person, the Rights Agreement may not be supplemented or amended in any manner that
would adversely affect the interests of the holders of Rights.
The
Rights Agreement is attached hereto as Exhibit 4.1 and is incorporated herein by reference. The description of the Rights Agreement
herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1.