Description of Securities of the Registrant
Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
The following is a summary of the rights and preferences of the capital stock of Clene Inc. (the “Company,” “we,” “us,” or “our”). While we believe that the following description covers the material terms of our capital stock, the description may not contain all of the information that is important to you. We encourage you to read carefully our Annual Report on Form 10-K (the “Annual Report”), certificates of designation relating to the securities, as applicable, our amended and restated certificate of incorporation (the “certificate of incorporation”) and amended and restated bylaws (the “bylaws”) and the other documents we refer to for a more complete understanding of our capital stock. Copies of our certificate of incorporation and bylaws are incorporated by reference as exhibits to our Annual Report.
General
We are governed by our certificate of incorporation, as amended and restated from time to time, and the Delaware General Corporation Law (“DGCL”), and the common law of the state of Delaware. The following summary of certain provisions of our securities does not purport to be complete and is subject to our amended and restated certificate of incorporation, our amended and restated bylaws and the provisions of the DGCL. Copies of our amended and restated certificate of incorporation and certificates of amendment to our amended and restated certificate incorporation are attached to our Annual Report as Exhibits 3.1, 3.2, and 3.3. Our amended and restated bylaws are attached to our Annual Report as Exhibit 3.4.
Our amended and restated certificate of incorporation authorizes a total number of shares of all classes of stock of 601,000,000 shares, consisting of (i) 600,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”), and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).
Common Stock
Our Common Stock is listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “CLNN.” The holders of our Common Stock are entitled to one vote for each share held on all matters to be voted on by stockholders and do not have cumulative voting rights. The holders of our Common Stock are entitled to receive dividends, if and when declared by our Board of Directors (the “Board”) out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over our Common Stock. Holders of our Common Stock have no preemptive or other subscription rights. Our Board is classified.
Preferred Stock
Our Preferred Stock is currently undesignated and no shares of Preferred Stock are outstanding. The Board has the authority to issue shares of Preferred Stock from time to time on terms it may determine, to divide shares of Preferred Stock into one or more series and to fix the designations, preferences, privileges, and restrictions of Preferred Stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock could have the effect of decreasing the trading price of Common Stock, restricting dividends on our capital stock, diluting the voting power of the Common Stock, impairing the liquidation rights of our capital stock or delaying or preventing a change in control of us. There is no restriction on the repurchase or redemption of shares by us while there is any arrearage in the payment of dividends or sinking fund installments.
Warrants
As of the date of our Annual Report, we had warrants outstanding that were exercisable into a total of 7,242,876 shares of Common Stock, as outlined below.
Public Warrants
The warrants originally issued by Tottenham Acquisition I Limited (“Tottenham”) are listed on Nasdaq under the symbol “CLNNW” (the “Public Warrants”). Each Public Warrant entitles the holder thereof to purchase one-fortieth (1/40) of one share of Common Stock at a price of $230.00 per full share. We will not issue fractional shares. As a result, a Public Warrant holder must exercise warrants in multiples of forty, at a price of $230.00 per full share, subject to adjustment, to validly exercise the warrants. The Public Warrants became exercisable upon the completion of the business combination with Tottenham (the “Reverse Recapitalization”) and will expire on December 30, 2025. As of the date of our Annual Report, we had 4,815,000 Public Warrants outstanding exercisable into 120,375 shares. The Public Warrants are currently exercisable.
We may redeem the outstanding Public Warrants (excluding the private warrants that are part of the private units), in whole and not in part, at a price of $0.01 per warrant:
● | at any time while the warrants are exercisable; |
● | upon a minimum of 30 days’ prior written notice of redemption; |
● | if, and only if, the last sales price of our Common Stock equals or exceeds $330.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption; and |
● | if, and only if, (i) there is a current registration statement in effect with respect to our Common Stock underlying the warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption or (ii) the warrants may be exercised on a cashless basis as set forth in the Warrant Agreement and such cashless exercise is exempt from registration under the Securities Act. |
If the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of our Common Stock may fall below the $330.00 trigger price as well as the $230.00 exercise price per full share after the redemption notice is issued and not limit our ability to complete the redemption.
If we call the Public Warrants for redemption as described above, our management will have the option to require all warrant holders that wish to exercise the warrants to do so on a “cashless” basis. In such event, each warrant holder would pay the exercise price by surrendering the whole warrant for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of Common Stock underlying the warrants, multiplied by the difference between the exercise price of our warrants and the “fair market value” (as defined below) by (y) the fair market value. The “fair market value” means the average reported last sale price of our Common Stock for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the warrant holders. Whether we will exercise the option to require all warrant holders to exercise their warrants on a “cashless basis” will depend on a variety of factors, including the price of our Common Stock at the time the warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.
Option Warrants
In July 2021, Chardan Capital Markets, LLC (“Chardan”) exercised a unit purchase option originally issued in connection with Tottenham’s initial public offering in August 2018. Chardan elected to perform a cashless or net exercise, which resulted in a net issuance of 49,166 warrants to purchase one-fortieth (1/40) of one share of Common Stock (the “Option Warrants”). The Option Warrants became exercisable upon issuance and are subject to the same expiration and redemption terms as the Public Warrants. As of the date of our Annual Report, the Option Warrants were exercisable into 1,229 shares at a price of $230.00 per share.
2023 Avenue Warrant
In June 2023, we issued a warrant (the “2023 Avenue Warrant”) in connection with an amendment to a loan agreement with Avenue Venture Opportunities Fund, L.P. (“Avenue”). The 2023 Avenue Warrant became exercisable upon issuance and expires on June 30, 2028. Avenue may exercise the 2023 Avenue Warrant for cash or on a net or “cashless” basis. In the event of a change of control of the Company, the 2023 Avenue Warrant shall be automatically exchanged for the number of shares of Common Stock which remain exercisable thereunder immediately prior to the change of control transaction, for no payment or consideration from Avenue for such shares, and the 2023 Avenue Warrant shall be terminated. As of the date of our Annual Report, the 2023 Avenue Warrant was exercisable into 150,000 shares. Upon effectiveness of an amendment dated September 30, 2024, the 2023 Avenue Warrant was amended and restated to reflect an exercise price of $4.6014 per share. The other material terms of the 2023 Avenue Warrant remained effective as summarized herein.
Tranche A Warrants & Tranche B Warrants
In June 2023, we sold units each consisting of (i) one share of Common Stock, (ii) one warrant to purchase one share of Common Stock at an exercise price of $22.00 per share (the “Tranche A Warrants”), and (iii) one warrant to purchase one share of Common Stock at an exercise price of $30.00 per share (the “Tranche B Warrants”). The Tranche A Warrants were exercisable immediately and expire on the earlier of (i) sixty (60) days following the date of our public announcement that a new drug application (“NDA”) for CNM-Au8 has been accepted by the U.S. Food and Drug Administration (“FDA”), or (ii) June 16, 2026. The Tranche B Warrants were exercisable immediately and expire on the earlier of (i) sixty (60) days following the date of our public announcement that an NDA for CNM-Au8 has been approved by the FDA, or (ii) June 16, 2030. If we enter into or become party to a fundamental transaction (which generally includes a merger or acquisition; the sale, lease, license, or transfer of all or substantially all of our assets; tender or exchange offers; or a reclassification, reorganization, or recapitalization of our Common Stock), then (i) we or our successor shall purchase all outstanding Tranche A Warrants by paying the holders cash in an amount equal to the Black-Scholes value of the unexercised Tranche A Warrants, and (ii) upon any subsequent exercise of a Tranche B Warrant, the holder shall be entitled to receive, at the option of the holder, the number of shares of common stock of the successor or of the Company, if we are the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of Common Stock for which the warrant is exercisable immediately prior to such fundamental transaction. As of the date of our Annual Report, the Tranche A Warrants and Tranche B Warrants were exercisable into 2,500,000 and 2,500,000 shares, respectively.
2024 Pre-Funded Warrants
In a series of several separate, concurrent public and private transactions in October 2024, we sold pre-funded warrants to purchase up to 441,984 shares of Common Stock (the “2024 Pre-Funded Warrants”). The 2024 Pre-Funded Warrants were exercisable immediately at a price of $0.001 per share and expire when exercised in full. The holders may elect to exercise the 2024 Pre-Funded Warrants through a “cashless exercise,” in which case the holders would receive, upon such exercise, the net number of underlying shares determined according to the formula set forth in the 2024 Pre-Funded Warrants. No fractional shares will be issued. In lieu of fractional shares, we will, at our election, either pay the holders an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole share. If we enter into or become party to a fundamental transaction (which generally includes a merger or consolidation; the sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all our assets; purchase, tender, or exchange offers; a reclassification, reorganization, or recapitalization of our Common Stock; or a stock or share purchase agreement or other business combination), then the holders shall be entitled to receive, upon any subsequent exercise, the number of shares of common stock of the successor or acquiring corporation or of the Company, if we are the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of Common Stock for which the 2024 Pre-Funded Warrants are exercisable immediately prior to such fundamental transaction. Except as otherwise provided in the 2024 Pre-Funded Warrant or by virtue of such holder’s ownership of shares of our Common Stock, the holders of the 2024 Pre-Funded Warrants do not have the rights or privileges of holder of our Common Stock, including any voting rights, until the holders exercise the 2024 Pre-Funded Warrants. As of the date of our Annual Report, 17,626 shares had been issued upon exercise and the outstanding 2024 Pre-Funded Warrants were exercisable into 424,358 shares.
2024 Common Warrants
In a series of several separate, concurrent public and private transactions in October 2024, we sold warrants to purchase up to 1,546,914 shares of Common Stock (the “2024 Common Warrants”). The 2024 Common Warrants were exercisable immediately at a price of $4.82 per share and expire five years from issuance. If there is no effective registration statement registering the underlying shares, or the prospectus contained therein is not available for the resale of such underlying shares, then the holders may exercise the 2024 Common Warrants by means of a “cashless exercise,” in which case the holder would receive upon such exercise the net number of underlying determined according to the formula set forth in the 2024 Common Warrants. No fractional shares will be issued. In lieu of fractional shares, we will, at our election, either pay the holders an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole share. If we enter into or become party to a fundamental transaction (which generally includes a merger or consolidation; the sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all our assets; purchase, tender, or exchange offers; a reclassification, reorganization, or recapitalization of our Common Stock; or a stock or share purchase agreement or other business combination), then the holders shall be entitled to receive, upon any subsequent exercise, the number of shares of common stock of the successor or acquiring corporation or of the Company, if we are the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of Common Stock for which the 2024 Common Warrants are exercisable immediately prior to such fundamental transaction. Additionally, at the option of the holders, we or our successor shall purchase the 2024 Common Warrants by paying the holders an amount of cash equal to the Black-Scholes value of the unexercised 2024 Common Warrants; provided that, if the fundamental transaction is not within our control, including not approved by our board of directors, the holder shall only be entitled to receive the same consideration (and in the same proportion), at the Black-Scholes value of the unexercised portion of the 2024 Common Warrant, that is being offered and paid to the holders of our Common Stock in connection with the fundamental transaction; provided, further, that if holders of our Common Stock are not offered or paid any consideration in such fundamental transaction, such holders of our Common Stock will be deemed to have received common stock of the successor in such fundamental transaction. As of the date of our Annual Report, the 2024 Common Warrants were exercisable into 1,546,914 shares.
Dividends
We currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never declared or paid any cash dividends on our capital stock. We do not intend to pay cash dividends to our stockholders in the foreseeable future. Our ability to declare dividends is limited by the terms of financing or other agreements that we have entered into. Future debt or other financing arrangements also may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Investors should not purchase our common stock with the expectation of receiving cash dividends.
Any future determination to declare dividends will be made at the discretion of our Board and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our Board may deem relevant.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Equiniti Trust Company, LLC. The transfer agent and registrar’s address is 48 Wall Street, Floor 23, New York, NY 10005.