Item 5.03. Amendments to Articles of Incorporation; Change in Fiscal Year.
As previously reported in the Companys Current Report on Form 8-K dated November 7, 2019, the Company priced
a public offering (the Offering) of (i) 103,000 shares of its Series A convertible voting preferred stock, par value $0.001 per share (the Series A Preferred Stock); (ii) 312,090,000 Series A warrants to purchase up
to an aggregate of 312,090,000 shares of the Companys common stock, par value $0.001 per share (Common Stock) at an exercise price equal to $0.33 per share; and (iii) 312,090,000 Series B warrants to purchase up to an
aggregate of 102,989,700 shares of the Companys Common Stock at an exercise price equal to $0.33 per share, designated 103,000 shares of its authorized and unissued preferred stock as Series A Preferred Stock. In connection with the
Offering, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Voting Preferred Stock with the Delaware Secretary of State (the Certificate of Designation), which is attached
hereto as Exhibit 3.1.
Each share of Series A Preferred Stock will convert into that number of shares of Common Stock equal to the purchase price of the
Series A Preferred Stock divided by the conversion price of the Series A Preferred Stock, which is initially equal to $0.33.
The Series A Preferred
Stock will automatically convert into shares of Common Stock upon the 5th trading date following the Companys announcement of receiving stockholder approval for the first reverse stock split following the Offering, provided that, the Company
will not effect any conversion, and the holder will not have the right to convert, subject to certain exceptions, the Series A Preferred Stock for shares of Common Stock if, as a result of such conversion, the holder, together with its
affiliates and other attribution parties, would own more than 9.99% of the total number of shares of Common Stock then issued and outstanding, which percentage may be changed at the holders election to a lower percentage at any time or to a
higher percentage upon 61 days notice to the Company, and provided further that such limitation on exercise will automatically increase to 19.99% of the total number of shares of Common Stock then issued and outstanding during the period that
any employee, manager, partner, managing director or affiliate of such holder is then serving on the Companys board of directors. Prior to the automatic conversion described above, the Series A Preferred Stock will vote together with the
Common Stock on an as-converted basis, subject to certain limitations on conversion. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders.
Following the automatic conversion described above, the Series A Preferred Stock will be non-voting. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or sale
event, the assets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series A Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder,
treating for this purpose all such securities as if they had been converted to Common Stock. The foregoing summary of the Certificate of Designation does not purport to be complete and is subject to, and qualified in its entirety by, such document
attached as Exhibit 3.1 to this Current Report on Form 8-K, which is incorporated herein by reference.
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