DESCRIPTION OF SECURITIES
The following description of the securities of Adhera Therapeutics, Inc. (“Adhera,” the “Company,” “we,” “our” or “us”) is a summary of the material terms of, and is qualified in its entirety by reference to, our Certificate of Incorporation and our By-Laws (each as amended, restated, supplemented or modified from time to time), copies of which are filed as exhibits to this Annual Report on Form 10-K.
As of April 14, 2020, we are authorized to issue up to 180,000,000 shares of common stock, par value $0.006 per share, of which 10,869,530 are issued and outstanding.
As of December 31, 2019, 100 shares of our Series C Convertible Preferred Stock, 40 shares of our Series D Convertible Preferred Stock, 3,478 shares of our Series E Convertible Preferred Stock and 361 shares of our Series F Convertible Preferred Stock were issued and outstanding, all of which are convertible into shares of our common stock. The Certificate of Designations of each of our Series C Convertible Preferred Stock, Series D Convertible Preferred Stock, Series E Convertible Preferred Stock and Series F Convertible Preferred Stock are filed as exhibits to this Annual Report on Form 10-K.
All shares of common stock issued will be duly authorized, fully paid and non-assessable. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the holders of our common stock. Under Delaware law, stockholders generally are not liable for our debts or obligations. Our certificate of incorporation does not authorize cumulative voting for the election of directors. Subject to the rights of the holders of any class of our capital stock having any preference or priority over our common stock, the holders of shares of our common stock are entitled to receive dividends that are declared by the board of directors out of legally available funds. In the event of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in our net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or default. All shares of our common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights.
Delaware Anti-Takeover Statute
We are subject to Section 203 of the DGCL. This law prohibits a publicly held Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder unless:
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
Section 203 defines “business combination” to include:
Any merger or consolidation involving the corporation and the interested stockholder;
Any sale, transfer, pledge or other disposition of 10% or more of our assets involving the interested stockholder;
In general, any transaction that results in the issuance or transfer by a corporation of any of its stock to the interested stockholder; or
The receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In general, Section 203 defines an “interested stockholder” as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Common Stock Listing
Our common stock currently is trading on the OTCQB Tier of the OTC Markets under the symbol “ATRX.”.
Transfer Agent and Registrar
American Stock Transfer & Trust Company, LLC is the transfer agent and registrar for our common stock.