UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Filed by
the Registrant
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Filed
by a party other than the Registrant |
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Check
the appropriate box:
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Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material under § 240.14a-12 |
Aditxt,
Inc.
(Name of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check all boxes that apply):
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No
fee required |
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Fee
paid previously with preliminary materials. |
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Fee
computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a- 6(i)(1) and 0-11 |
737
N. Fifth Street, Suite 200
Richmond,
VA 23219
October 21, 2022
NOTICE
OF 2022 SPECIAL MEETING OF STOCKHOLDERS
To
Be Held on November 11, 2022
Dear
Stockholder:
We
are pleased to invite you to attend the special meeting of
stockholders (the “Special Meeting”) of Aditxt, Inc. (the
“Company”), which will be held on November 11, 2022, at 12:00 p.m.
Eastern Time.
Due
to the continuing public health impact of the coronavirus outbreak
(COVID-19) and to support the health and well-being of our
employees and stockholders, the Special Meeting will be held in a
virtual-only meeting format at
www.virtualshareholdermeeting.com/ADTX2022SM.
In addition to voting by submitting your proxy prior to the Special
Meeting, you also will be able to vote your shares electronically
during the Special Meeting. Further details regarding the virtual
meeting are included in the accompanying proxy statement. At the
Special Meeting, the holders of our outstanding common stock will
act on the following matters:
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1. |
To
approve, for the purposes of Listing Rule 5635(d) of The Nasdaq
Stock Market LLC (“Nasdaq”), the issuance of shares of common stock
underlying warrants originally issued by the Company in August
2022; and
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2. |
To
transact such other matters as may properly come before the Special
Meeting and any adjournment or postponement thereof. |
Our board of directors has fixed October 14, 2022 as the record
date (the “Record Date”) for the determination of stockholders
entitled to notice of, and to vote at, the Special Meeting and at
any adjournment or postponement of the meeting.
IF
YOU PLAN TO ATTEND:
To
be admitted to the Special Meeting at you must have your control
number available and follow the instructions found on your proxy
card or voting instruction form. You may vote during the Special
Meeting by following the instructions available on the meeting
website during the meeting. Please allow sufficient time before the
Special Meeting to complete the online check-in process. Your vote
is very important.
If
you have any questions or need assistance voting your shares,
please call Kingsdale Advisors at:
Strategic
Stockholder Advisor and Proxy Solicitation Agent
745
Fifth Avenue, 5th Floor, New York, NY 10151
North
American Toll Free Phone:
+1
(888) 564-7333
Email:
contactus@kingsdaleadvisors.com
Call
Collect Outside North America: +1 (646) 664-1397
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By
Order of the Board of Directors |
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21, 2022 |
/s/
Amro Albanna |
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Amro
Albanna
Chief
Executive Officer
Chairman
of the Board of Directors
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Whether
or not you expect to attend the Special Meeting virtually, we urge
you to vote your shares via proxy at your earliest convenience.
This will ensure the presence of a quorum at the Special Meeting.
Promptly voting your shares will save the Company the expenses and
extra work of additional solicitation. Submitting your proxy now
will not prevent you from voting your shares electronically at the
Special Meeting if you desire to do so, as your proxy is revocable
at your option. Your vote is important, so please act
today!
737
N. Fifth Street, Suite 200
Richmond,
VA 23219
PROXY
STATEMENT FOR THE
2022 SPECIAL MEETING OF STOCKHOLDERS
To
be held on November 11, 2022
The
board of directors of Aditxt, Inc. (“Aditxt” or the “Company”) is
soliciting your proxy to vote at the Special Meeting of
Stockholders (the “Special Meeting”) to be held on November 11,
2022, at 12:00 p.m. Eastern Time, in a virtual-only format online
by accessing www.virtualshareholdermeeting.com/ADTX2022SM and at
any adjournment thereof.
This
proxy statement contains information relating to the Special
Meeting. The Special Meeting of stockholders will be held as a
virtual meeting. Stockholders attending the virtual meeting will be
afforded the same rights and opportunities to participate as they
would at an in-person meeting.
You
will be able to attend and participate in the Special Meeting
online via a live webcast by visiting
www.virtualshareholdermeeting.com/ADTX2022SM. In addition to voting
by submitting your proxy prior to the Special Meeting, you also
will be able to vote your shares electronically during the Special
Meeting.
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Important
Notice Regarding the Availability of Proxy Materials
for the Special Meeting of Stockholders to be Held on November 11,
2022:
The
Notice of Meeting, Proxy Statement, and our 2021 Annual Report on
Form 10-K are available at: www.proxyvote.com
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ADITXT,
INC.
TABLE
OF CONTENTS
QUESTIONS AND ANSWERS
ABOUT THIS PROXY STATEMENT AND VOTING
What
is a proxy?
A
proxy is the legal designation of another person to vote the stock
you own. That other person is called a proxy. If you designate
someone as your proxy in a written document, that document is also
called a proxy or a proxy card. By completing, signing and
returning the accompanying proxy card, you are designating Amro
Albanna, Chief Executive Officer of the Company, and Corinne
Pankovcin, President of the Company, as your proxies for the
Special Meeting and you are authorizing Mr. Albanna and Ms.
Pankovcin to vote your shares at the Special Meeting as you have
instructed on the proxy card. This way, your shares will be voted
whether or not you attend the Special Meeting. Even if you plan to
attend the Special Meeting, we urge you to vote in one of the ways
described below so that your vote will be counted even if you are
unable or decide not to attend the Special Meeting.
What
is a proxy statement?
A
proxy statement is a document that we are required by regulations
of the SEC to give you when we ask you to sign a proxy card
designating Mr. Albanna and Ms. Pankovcin as proxies to vote on
your behalf.
Why
did you send me this proxy statement?
We
sent you this proxy statement and proxy card because our board of
directors is soliciting your proxy to vote at the Special Meeting
and any adjournment and postponement thereof. This proxy statement
summarizes information related to your vote at the Special Meeting.
All stockholders who find it convenient to do so are cordially
invited to attend the Special Meeting virtually. However, you do
not need to attend the meeting to vote your shares. Instead, you
may simply complete, sign and return the proxy card by mail or vote
over the Internet, by phone or by fax.
On or
about October 21, 2022, we intend to begin mailing to each
stockholder this proxy statement and our Annual Report on
Form 10-K for the year ended December 31, 2021 Only
stockholders who owned our common stock on October 14, 2022 are
entitled to vote at the Special Meeting.
What
Does it Mean if I Receive More than one set of proxy
materials?
If
you receive more than one set of proxy materials, your shares may
be registered in more than one name or in different accounts.
Please complete, sign, and return each proxy card to ensure that
all of your shares are voted.
How
do I attend the Special Meeting?
The Special Meeting will be held on November 11, 2022, at 12:00
p.m. Eastern Time in a virtual format online by accessing
www.virtualshareholdermeeting.com/ADTX2022SM. Information on how to
vote in person at the Special Meeting is discussed below.
Who is Entitled to Vote?
The board of directors has fixed the close of business on October
14, 2022 as the record date (the “Record Date”) for the
determination of stockholders entitled to notice of, and to vote
at, the Special Meeting or any adjournment or postponement thereof.
On the Record Date, there were 4,161,129 shares of common stock
outstanding. Each share of common stock represents one vote that
may be voted on each proposal that may come before the Special
Meeting.
What
is the Difference Between Holding Shares as a Record Holder and as
a Beneficial Owner (Holding Shares in Street Name)?
If
your shares are registered in your name with our transfer agent,
VStock Transfer, LLC, you are the “record holder” of those shares.
If you are a record holder, these proxy materials have been
provided directly to you by the Company.
If
your shares are held in a stock brokerage account, a bank or other
holder of record, you are considered the “beneficial owner” of
those shares held in “street name.” If your shares are held in
street name, the Notice has been forwarded to you by that
organization. The organization holding your account is considered
to be the stockholder of record for purposes of voting at the
Special Meeting. As the beneficial owner, you have the right to
instruct this organization on how to vote your shares. See “How
Will my Shares be Voted if I Give No Specific Instruction?” below
for information on how shares held in street name will be voted
without instructions provided.
Who
May Attend the Special Meeting?
Only
record holders and beneficial owners of our common stock, or their
duly authorized proxies, may attend the Special Meeting. If your
shares of common stock are held in street name, you will need to
provide a copy of a brokerage statement or other documentation
reflecting your stock ownership as of the Record Date.
What
am I Voting on?
There
is one matter scheduled for a vote:
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1. |
To
approve, for the purposes of Nasdaq Listing Rule 5635(d), the
issuance of shares of common stock underlying warrants originally
issued by the Company in August 2022.
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What
if another matter is properly brought before the Special
Meeting?
The
board of directors knows of no other matters that will be presented
for consideration at the Special Meeting. The proxies also have
discretionary authority to vote to adjourn the Special Meeting,
including for the purpose of soliciting votes in accordance with
our board’s recommendations. If any other matters are properly
brought before the Special Meeting, it is the intention of the
person named in the accompanying proxy to vote on those matters in
accordance with his best judgment.
How
Do I Vote?
Stockholders of Record
If you are a registered stockholder, you may vote by mail, fax,
phone or online at the Special Meeting by following the
instructions in the Notice. You also may submit your proxy by mail
by following the instructions included with your proxy card. The
deadline for submitting your proxy by Internet is 11:59 p.m.
Eastern Time on November 10, 2022. Our board’s designated proxies,
Mr. Albanna and Ms. Pankovcin, will vote your shares according to
your instructions. If you attend the live webcast of the Special
Meeting you also will be able to vote your shares electronically at
the meeting up until the time the polls are closed.
Beneficial Owners of Shares Held in Street Name
If you are a street name holder, your broker or nominee firm is the
legal, registered owner of the shares, and it may provide you with
the Notice. Follow the instructions on the Notice to access our
proxy materials and vote or to request a paper or email copy of our
proxy materials. The materials include a voting instruction card so
that you can instruct your broker or nominee how to vote your
shares. Please check the Notice or voting instruction card or
contact your broker or other nominee to determine whether you will
be able to deliver your voting instructions by Internet in advance
of the meeting and whether, if you attend the live webcast of the
Special Meeting, you will be able to vote your shares
electronically at the meeting up until the time the polls are
closed.
All shares entitled to vote and represented by a properly completed
and executed proxy received before the Special Meeting and not
revoked will be voted at the Special Meeting as instructed in a
proxy delivered before the Special Meeting. We provide Internet
proxy voting to allow you to vote your shares online, with
procedures designed to ensure the authenticity and correctness of
your proxy vote instructions. However, please be aware that you
must bear any costs associated with your Internet access, such as
usage charges from Internet access providers and telephone
companies.
How Many Votes do I Have?
On each matter to be voted upon, you have one vote for each share
of common stock you own as of the close of business on the Record
Date.
Is My Vote Confidential?
Yes, your vote is confidential. Only the inspector of elections,
individuals who help with processing and counting your votes and
persons who need access for legal reasons will have access to your
vote. This information will not be disclosed, except as required by
law.
What Constitutes a Quorum?
To carry on business at the Special Meeting, we must have a quorum.
A quorum is present when one-third of the shares entitled to vote,
as of the Record Date, are represented in person or by proxy. Thus,
1,387,043 shares must be represented in person or by proxy to have
a quorum at the Special Meeting. Your shares will be counted
towards the quorum only if you submit a valid proxy (or one is
submitted on your behalf by your broker, bank or other nominee) or
if you vote in person at the Special Meeting. Abstentions and
broker non-votes will be counted towards the quorum requirement.
Shares owned by the Company are not considered outstanding or
considered to be present at the Special Meeting. If there is not a
quorum at the Special Meeting, either the chairperson of the
Special Meeting or our stockholders entitled to vote at the Special
Meeting may adjourn the Special Meeting.
How Will my Shares be Voted if I Give No Specific
Instruction?
We must vote your shares as you have instructed. If there is a
matter on which a stockholder of record has given no specific
instruction but has authorized us generally to vote the shares,
they will be voted as follows:
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1. |
“For” the approval, for the
purposes of Nasdaq Listing Rule 5635(d), of the issuance of shares
of common stock underlying warrants originally issued by the
Company in August 2022. |
This authorization would exist, for example, if a stockholder of
record merely signs, dates and returns the proxy card but does not
indicate how its shares are to be voted on one or more proposals.
If other matters properly come before the Special Meeting and you
do not provide specific voting instructions, your shares will be
voted at the discretion of Amro Albanna and Corinne Pankovcin, the
board of directors’ designated proxies.
If your shares are held in street name, see “What is a Broker
Non-Vote?” below regarding the ability of banks, brokers and other
such holders of record to vote the uninstructed shares of their
customers or other beneficial owners in their discretion.
How are Votes Counted?
Votes will be counted by the inspector of election appointed for
the Special Meeting, who will separately count “For” and “Against,”
abstentions and broker non-votes with respect to the proposal.
Broker non-votes will not be included in the tabulation of the
voting results of the proposal and, therefore, will have no effect
on such proposal.
What is a Broker Non-Vote?
A “broker non-vote” occurs when shares held by a broker in “street
name” for a beneficial owner are not voted with respect to a
proposal because (1) the broker has not received voting
instructions from the stockholder who beneficially owns the shares
and (2) the broker lacks the authority to vote the shares at their
discretion.
Our common stock is listed on The Nasdaq Capital Market. However,
under current New York Stock Exchange (“NYSE”) rules and
interpretations that govern broker non-votes Proposal No. 1 for the
approval of the shares of common stock that may be issued upon
exercise of the warrants originally issued by the Company in August
2022 is considered a non-discretionary matter, and a broker will
not be permitted to exercise its discretion to vote uninstructed
shares on the proposal. Because NYSE rules apply to all brokers
that are members of the NYSE, this prohibition applies to the
Special Meeting even though our common stock is listed on The
Nasdaq Capital Market.
What is an Abstention?
An abstention is a stockholder’s affirmative choice to decline to
vote on a proposal. Under Delaware law, abstentions are counted as
shares present and entitled to vote at the Special Meeting.
Generally, unless provided otherwise by applicable law, our Amended
and Restated Bylaws (the “Bylaws”) provide that an action of our
stockholders (other than the election of directors) is approved if
a majority of the number of shares of stock entitled to vote
thereon and present (either in person or by proxy) vote in favor of
such action. Therefore, abstentions will have no effect with
respect to Proposal 1.
The table below summarizes the proposal that will be voted on, the
vote required to approve such proposal and how votes are
counted:
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Proposal |
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Votes
Required |
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Voting
Options |
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Impact
of
“Withhold” or
“Abstain” Votes |
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Broker
Discretionary
Voting Allowed |
| Proposal
No. 1: Approval of the shares of common stock issuable upon the
exercise of the warrants issued originally by the Company in August
2022 |
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The
affirmative vote of the holders of a majority in voting power of
the votes cast affirmatively or negatively (excluding abstentions)
at the Special Meeting by the holders entitled to vote
thereon. |
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“FOR”
“AGAINST” “ABSTAIN” |
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None(1) |
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No(2) |
| (1) |
A vote marked as an “Abstention” is
not considered a vote cast and will, therefore, not affect the
outcome of this proposal. |
| (2) |
As this proposal is not considered
a discretionary matter, brokers lack authority to exercise their
discretion to vote uninstructed shares on this proposal. |
What Are the Voting Procedures?
In voting by proxy with regard to the proposal, you may vote in
favor of or against the proposal, or you may abstain from voting on
the proposal. You should specify your choice on the accompanying
proxy card or your vote instruction form.
Is My Proxy Revocable?
You may revoke your proxy and reclaim your right to vote at any
time before your proxy is voted by giving written notice to the
Corporate Secretary of the Company by delivering a properly
completed, later-dated proxy card or vote instruction form or by
voting in person at the Special Meeting. All written notices of
revocation and other communications with respect to revocations of
proxies should be addressed to: Aditxt, Inc., 737 N. Fifth
Street, Suite 200, Richmond, VA 23219 Attention: Corporate
Secretary. Your most current proxy card or Internet proxy is the
one that will be counted.
Who is Paying for the Expenses Involved in Preparing and Mailing
this Proxy Statement?
All of the expenses involved in preparing, assembling and mailing
these proxy materials and all costs of soliciting proxies will be
paid by us. In addition to the solicitation by mail, proxies may be
solicited by our officers and other employees by telephone or in
person. Such persons will receive no compensation for their
services other than their regular salaries. Arrangements will also
be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial
owners of the shares held of record by such persons, and we may
reimburse such persons for reasonable out of pocket expenses
incurred by them in forwarding solicitation materials. We have
retained Kingsdale Advisors as our strategic stockholder advisor
and proxy solicitation agent in connection with the solicitation of
proxies for the Special Meeting. If you have any questions or
require any assistance with completing your proxy, please contact
Kingsdale Advisors by telephone (toll-free within North America) at
+1 (888) 564-7333 or call collect outside North America at +1 (646)
664-1397 or by email at contactus@kingsdaleadvisors.com.
Do I Have Dissenters’ Rights of Appraisal?
Stockholders do not have appraisal rights under Delaware law or
under the Company’s governing documents with respect to the matters
to be voted upon at the Special Meeting.
How can I Find out the Results of the Voting at the Special
Meeting?
Preliminary voting results will be announced at the Special
Meeting. In addition, final voting results will be disclosed in a
Current Report on Form 8-K that we expect to file with the SEC
within four business days after the Special Meeting. If final
voting results are not available to us in time to file a Form 8-K
with the SEC within four business days after the Special Meeting,
we intend to file a Form 8-K to publish preliminary results and,
within four business days after the final results are known to us,
file an amended Form 8-K to publish the final results.
PROPOSAL 1:
THE AUGUST 2022 TRANSACTION PROPOSAL
On August 4, 2022, August 11, 2022 and September 12, 2022, we
entered into Securities Purchase Agreements (the “Purchase
Agreements”) with certain accredited investors (the “Investors”)
for the offering, sale, and issuance (the “Offering”) of an
aggregate of $2,388,888 in principal amount of Senior Secured
Promissory Notes (the “Notes”). Concurrently with the sale of the
Notes, pursuant to the Purchase Agreements, we also issued an
aggregate of 47,780 shares of our common stock as
commitment fees and warrants (the “August Warrants”) to purchase up
to 229,773 shares of our common stock to the Investors.
Furthermore, on August 31,
2022, we entered into an Agreement for the Purchase and Sale of
Future Receipts (the “Agreement”) with a commercial funding source
(the “Funder”) pursuant to which we, among other things,
issued the Funder a warrant (the “Funder Warrant” and together with
the August Warrants, the “Warrants”) to purchase up to 26,667
shares of our common stock.
The Purchase Agreements require that we call and hold a meeting of
our stockholders for the purpose of requesting approval
(“Stockholder Approval”) of the issuance of shares of common stock
underlying the Notes and the Warrants pursuant to Nasdaq Listing
Rule 5635(d).
Nasdaq Listing Rule 5635(d) provides that stockholder approval
is required prior to the issuance of securities in a transaction,
other than a public offering, involving the sale, issuance or
potential issuance by the Company of common stock (or securities
convertible into or exercisable for common stock), which equals 20%
or more of the common stock or 20% or more of the voting power
outstanding before the issuance, at a price less than the lower of:
(i) the closing price immediately preceding the signing of the
binding agreement, or (ii) the average closing price of the
common stock for the five trading days immediately preceding the
signing of the binding agreement for the transaction. See “—
Reasons for Stockholder Approval” below.
In light of this rule, the Purchase Agreements, the Notes and the
Warrants provide that, unless we obtain the approval of our
stockholders as required by Nasdaq, the Company is prohibited from
issuing any shares of common stock pursuant to the terms of the
Notes and Warrants, if (i) the issuance of such shares of
common stock pursuant to the Notes and Warrants would exceed 19.99%
of the Company’s outstanding shares of common stock as of August 4,
2022, or, (ii) if such issuance would otherwise exceed the
aggregate number of shares of common stock which the Company may
issue without breaching its obligations under the rules and
regulations of Nasdaq. If Stockholder Approval is not obtained at
the Special Meeting, we may, among other things, be required to
make certain payments to the holders of the Notes and Warrants. See
“— Effect of Failure to Obtain Stockholder Approval”
below.
On or about September 30, 2022, prior to the issuance of any shares
of common stock upon conversion of the Notes, we repaid the
outstanding balance of the Notes, including all accrued and unpaid
interest thereon.
Accordingly, at the Special Meeting, stockholders will vote on the
approval of the issuance of securities in the transaction
contemplated by the Purchase Agreements and the Warrants, including
the shares of common stock issuable upon exercise of the
Warrants.
The following is a summary of the material features of the
Warrants. This summary is qualified in its entirety by the full
text of the Form of Warrant, a copy of which is attached to
this Proxy Statement as Appendix A.
The Warrants
The Warrants are exercisable for a period of five years commencing
on the Commencement Date (as defined in the Warrants) at an initial
exercise price of $11.78 per share, which was subsequently adjusted
to $7.50, and may be subject to additional adjustment (including
cashless exercise).
The Company is prohibited from effecting an exercise of the
Warrants to the extent that, as a result of such exercise, the
holder of the Warrant together with the holder’s affiliates, would
beneficially own more than 4.99% of the number of shares of common
stock of the Company outstanding immediately after giving effect to
the issuance of such shares.
Effect on Current Stockholders
The issuance of securities pursuant to the Warrants will not affect
the rights of the holders of outstanding common stock, but such
issuances will have a dilutive effect on the existing stockholders,
including the voting power and economic rights of the existing
stockholders.
The Warrant provides that the holder is prohibited from exercising
the warrant to the extent the holder would beneficially own more
than 4.99% of the Company’s outstanding shares of common stock
after such conversion or exercise.
Unlike Nasdaq Rule 5635(d), which limits the aggregate number
of shares the Company may issue to the holder of the Warrant, this
beneficial ownership limitation limits the number of shares the
holder may beneficially own at any one time. Consequently, the
number of shares the holder may beneficially own in compliance with
the beneficial ownership limitation may increase over time as the
number of outstanding shares of common stock increases over time.
In addition, the holder may sell some or all of the shares it
receives under the Warrant, permitting it to acquire additional
shares in compliance with the beneficial ownership limitation.
Description of Common Stock
The Company is currently authorized to issue 100,000,000 shares of
common stock, par value $0.001, and 3,000,000 shares of preferred
stock, par value $0.001.
Common Stock
Voting
The holders of our common stock are entitled to one vote for each
share held on all matters to be voted on by the Company’s
stockholders. There is no cumulative voting.
Liquidation
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of our affairs, the holders of our common
stock will be entitled to share ratably in the net assets legally
available for distribution to stockholders after the payment of or
provision for all of our debts and other liabilities.
Fully Paid and Non-assessable
All outstanding shares of common stock are duly authorized, validly
issued, fully paid and non-assessable.
Dividends
The Company has not paid any cash dividends on its common stock to
date. Any future decisions regarding dividends will be made by its
board of directors. The Company does not anticipate paying
dividends in the foreseeable future but expect to retain earnings
to finance the growth of its business. The Company’s board of
directors has complete discretion on whether to pay dividends. Even
if the Company’s board of directors decides to pay dividends, the
form, frequency and amount will depend upon the Company’s future
operations and earnings, capital requirements and surplus, general
financial condition, contractual restrictions and other factors the
board of directors may deem relevant.
Market
The Company’s common stock is traded on the Nasdaq Capital Market
under the symbol “ADTX.”
Anti-Takeover Provisions
Provisions of the General Corporation Law of the State of Delaware
(“DGCL”) and the Company’s Certificate of Incorporation and Bylaws
could make it more difficult to acquire the Company by means of a
tender offer, a proxy contest or otherwise, or to remove incumbent
officers and directors. These provisions, summarized below, are
expected to discourage certain types of coercive takeover practices
and takeover bids that the Company’s board of directors may
consider inadequate and to encourage persons seeking to acquire
control of the Company to first negotiate with its board of
directors. The Company believes that the benefits of increased
protection of its ability to negotiate with the proponent of an
unfriendly or unsolicited proposal to acquire or restructure the
Company outweigh the disadvantages of discouraging takeover or
acquisition proposals because, among other things, negotiation of
these proposals could result in improved terms for its
stockholders.
Delaware Anti-Takeover Statute. We may become subject to
Section 203 of the DGCL, which prohibits persons deemed to be
“interested stockholders” from engaging in a “business combination”
with a publicly-held Delaware corporation for three years following
the date these persons become interested stockholders unless the
business combination is, or the transaction in which the person
became an interested stockholder was, approved in a prescribed
manner or another prescribed exception applies. Generally, an
“interested stockholder” is a person who, together with affiliates
and associates, owns, or within three years prior to the
determination of interested stockholder status did own, 15% or more
of a corporation’s voting stock. Generally, a “business
combination” includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested
stockholder. The existence of this provision may have an
anti-takeover effect with respect to transactions not approved in
advance by the board of directors. A Delaware corporation may “opt
out” of these provisions with an express provision in its original
certificate of incorporation or an express provision in its
certificate of incorporation or bylaws resulting from a
stockholders’ amendment approved by at least a majority of the
outstanding voting shares. We have not opted out of these
provisions. As a result, mergers or other takeover or change in
control attempts of us may be discouraged or prevented.
Vacancies in the Board of Directors. Our Certificate of
Incorporation and Bylaws provide that, subject to limitations, any
vacancy occurring in its board of directors for any reason may be
filled by a majority of the remaining members of its board of
directors then in office. Each director elected to fill a vacancy
resulting from the death, resignation or removal of a director
shall hold office until the expiration of the term of the director
whose death, resignation or removal created the vacancy.
Advance Notice of Nominations and Stockholder Proposals. Our
Bylaws establish an advance notice procedure for stockholder
proposals to be brought before an annual meeting of our
stockholders, including proposed nominations of persons for
election to our board of directors. At an annual meeting,
stockholders may only consider proposals or nominations specified
in the notice of meeting or brought before the meeting by or at the
direction of our board of directors. Stockholders may also consider
a proposal or nomination by a person who was a stockholder at the
time of giving notice and at the time of the meeting, who is
entitled to vote at the meeting and who has complied with the
notice requirements of our Bylaws in all respects. Our Bylaws do
not give our board of directors the power to approve or disapprove
stockholder nominations of candidates or proposals regarding other
business to be conducted at a special or annual meeting of our
stockholders. However, our Bylaws may have the effect of precluding
the conduct of certain business at a meeting if the proper
procedures are not followed. These provisions may also discourage
or deter a potential acquirer from conducting a solicitation of
proxies to elect the acquirer’s own slate of directors or otherwise
attempting to obtain control of our company.
No Cumulative Voting. The DGCL provides that stockholders
are denied the right to cumulate votes in the election of directors
unless our Certificate of Incorporation provides otherwise. Our
Certificate of Incorporation does not provide for cumulative
voting.
Calling of a Stockholder Meeting. Our Bylaws provide that a
special meeting of our stockholders may be called only by our
Chairman or by resolution adopted by a majority of our board of
directors. Because our stockholders do not have the right to call a
special meeting, a stockholder could not force stockholder
consideration of a proposal over the opposition of our board of
directors by calling a special meeting of stockholders prior to
such time as a majority of our board of directors, the chairperson
of our board of directors, the president or the chief executive
officer believed the matter should be considered or until the next
annual meeting provided that the requestor met the notice
requirements. The restriction on the ability of stockholders to
call a special meeting means that a proposal to replace our board
of directors also could be delayed until the next annual
meeting.
Exclusive Forum. Our Certificate of Incorporation provides
that unless the Company consents in writing to the selection of an
alternative forum, the State of Delaware is the sole and exclusive
forum for: (i) any derivative action or proceeding brought on
behalf of us, (ii) any action asserting a claim of breach of a
fiduciary duty owed by any of our directors, officers or other
employees to us or our stockholders, (iii) any action
asserting a claim against the us, our directors, officers or
employees arising pursuant to any provision of the DGCL or our
Certificate of Incorporation or the Bylaws, or (iv) any action
asserting a claim against us, our directors, officers, employees or
agents governed by the internal affairs doctrine, except for, as to
each of (i) through (iv) above, any claim as to which the
Court of Chancery determines that there is an indispensable party
not subject to the jurisdiction of the Court of Chancery (and the
indispensable party does not consent to the personal jurisdiction
of the Court of Chancery within ten days following such
determination), which is vested in the exclusive jurisdiction of a
court or forum other than the Court of Chancery, or for which the
Court of Chancery does not have subject matter jurisdiction.
Additionally, our Bylaws provide that unless we consent in writing
to the selection of an alternative forum, the federal district
courts of the United States of America will be the exclusive
forum for the resolution of any complaint asserting a cause of
action arising under the Securities Act. Any person or entity
purchasing or otherwise acquiring any interest in shares of our
capital stock are deemed to have notice of and consented to this
provision. The Supreme Court of Delaware has held that this type of
exclusive federal forum provision is enforceable. There may be
uncertainty, however, as to whether courts of other jurisdictions
would enforce such a provision, if applicable.
Reasons for Stockholder Approval
Our common stock is listed on The Nasdaq Capital Market, and, as
such, we are subject to the Nasdaq Listing Rules. Nasdaq Listing
Rule 5635(d) requires stockholder approval prior to the
issuance of securities in a transaction, other than a public
offering, involving the sale, issuance or potential issuance by us
of common stock (or securities convertible into or exercisable for
common stock), which equals 20% or more of the common stock or 20%
or more of the voting power outstanding before the issuance, at a
price less than the lower of: (i) the closing price
immediately preceding the signing of the binding agreement, or
(ii) the average closing price of the common stock for the
five trading days immediately preceding the signing of the binding
agreement for the transaction.
The board has determined that the ability to issue securities
pursuant to the Warrants is in the best interests of the Company
and its stockholders in order to comply with the terms of the
Purchase Agreements and to receive the economic benefits of the
Warrants upon exercise thereof.
Effect of Failure to Obtain Stockholder Approval
Pursuant to the Purchase Agreement we are obligated to cause
stockholder meetings to be held until Stockholder Approval is
obtained.
Effect of Approval
Upon obtaining Stockholder Approval requested in this Proposal
No. 1, we would no longer be bound by Nasdaq Listing
Rule 5635(d)’s restriction on the number or shares of common
stock we are able to issue under the Warrants. As the exercise
price of the Warrants could be adjusted downwards upon the
occurrence of certain events in the future, we are unable to
accurately predict how many shares may be issuable upon full
exercise of the Warrants. As such, the additional shares that the
Company could issue to the holder of the Warrants may result in
significant dilution to existing stockholders, a decline in our
share price, or greater price volatility.
Each additional common share that would be issuable to the holders
of the Warrants would have the same rights and privileges as each
of our currently authorized common shares. See “— Description of
Common Stock” above.
Interests of Officers and Directors in this Proposal
Our officers and directors do not have any substantial interest,
direct or indirect, in in this proposal.
Required Vote of Stockholders
The affirmative vote of a majority of the votes cast at the Special
Meeting is required to approve Proposal 1.
Board Recommendation
The board of directors unanimously recommends a vote
“FOR” Proposal 1.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of shares of our common stock as of October
14, 2022, based on 4,161,129 shares outstanding by
(i) each person known to beneficially own more than 5% of our
outstanding common stock, (ii) each of our directors,
(iii) our executive officers and (iv) all directors and
executive officers as a group. Shares are beneficially owned when
an individual has voting and/or investment power over the shares or
could obtain voting and/or investment power over the shares within
60 days of the October 14, 2022. Except as otherwise
indicated, the persons named in the table have sole voting and
investment power with respect to all shares beneficially owned,
subject to community property laws, where applicable. Unless
otherwise indicated, the address of each beneficial owner listed
below is c/o Aditxt, Inc., 737 N. Fifth Street, Suite 200,
Richmond, VA 23219.
| |
|
Number of
shares of
Common
Stock
Beneficially
Owned |
|
|
Percentage |
|
| Directors and Officers: |
|
|
|
|
|
|
| Shahrokh
Shabahang, D.D.S., MS, Ph.D. (1) |
|
|
28,630 |
|
|
|
* |
% |
| Amro
Albanna (2) |
|
|
27,873 |
|
|
|
* |
% |
| Corinne
Pankovcin (3) |
|
|
9,061 |
|
|
|
* |
% |
| Rowena
Albanna (4) |
|
|
9,760 |
|
|
|
* |
% |
| Brian
Brady (5) |
|
|
680 |
|
|
|
* |
% |
| Namvar
Kiaie (6) |
|
|
498 |
|
|
|
* |
% |
| Jeffrey
Runge, M.D. (7) |
|
|
480 |
|
|
|
* |
% |
| Thomas
J. Farley (8) |
|
|
3,638 |
|
|
|
* |
% |
| Matthew
Shatzkes (9) |
|
|
6,300 |
|
|
|
* |
% |
| All directors and
executive officers as a group (9 persons) |
|
|
86,920 |
|
|
|
2.08 |
% |
| (1) |
Includes
(i) 20,301 beneficially owned by Shabahang-Hatami Family Trust, of
which Shahrokh Shabahang, D.D.S., MS, Ph.D. is the Trustee; (ii)
warrants to purchase 4,404 shares, including 945 Series A Warrants
issued as part of the conversion of outstanding accrued
compensation through March 31, 2020, and 3,459 warrants
beneficially owned by the Shabahang-Hatami Family Trust; (iii)
2,200 shares issuable pursuant to options that are fully vested or
will vest within 60 days of October 14, 2022; (iv) 262 shares
issuable pursuant to restricted stock units that are fully vested
or will vest within 60 days of October 14, 2022; (v) 1,463 shares
directly owned by Mr. Shabahang. |
| (2) |
Includes
(i) 12,000 shares issuable pursuant to options that are fully
vested or will vest within 60 days of October 14, 2022; (ii) 6,000
shares beneficially owned by the Albanna Family Trust, of which Mr.
Albanna is the Trustee; (iii) 9,111 shares directly owned by Mr.
Albanna; and (iv) 762 Series A Warrants issued as part of the
conversion of outstanding accrued compensation through March 31,
2020. Mr. Albanna may be deemed to beneficially own the securities
held by his wife Rowena Albanna, the Company’s Chief Operating
Officer. |
| (3) |
Includes
(i) 3,385 shares held directly by Ms. Pankovcin; and (ii) 5,676
shares issuable pursuant to options that are fully
vested or will vest within 60 days of October 14, 2022. |
| (4) |
Includes
(i) 2,798 shares held directly by Ms. Albanna; (ii) 6,000 shares
issuable pursuant to options that are fully vested or
will vest within 60 days of October 14, 2022; and (iii) 712 Series
A Warrants issued as part of the conversion of outstanding accrued
compensation through March 31, 2020; (iv) 250 shares issuable
pursuant to restricted stock units that are fully vested or will
vest within 60 days of October 14, 2022. Ms. Albanna may be deemed
to beneficially own the securities held by her husband Amro
Albanna, the Company’s Chief Executive Officer. |
| (5) |
Includes
(i) 480 shares held directly by Mr. Brady; and (ii) 200 shares
issuable pursuant to options that have vested as of October 14,
2022. |
| (6) |
Includes
(i) 275 shares held directly by Mr. Kiaie;
(ii) 23 shares issuable upon exercise of Series A
Warrants; and (iii) 200 shares issuable pursuant to
options that have vested as of October 14, 2022. |
| (7) |
Includes
(i) 50 shares held by Biologue, Inc., over which
Dr. Runge has voting and dispositive control;
(ii) 230 shares held directly by Dr. Runge; and
(iii) 200 shares issuable pursuant to options and
restricted stock units that have vested as of October 14,
2022. |
| (8) |
Includes
(i) 2,050 shares held directly by Mr. Farley; and
(ii) 1,200 shares issuable pursuant to options that have
vested or will vest within 60 days of October 14, 2022; (iii)
388 shares issuable pursuant to restricted stock units that are
fully vested or will vest within 60 days of October 14,
2022. |
| (9) |
Includes
(i) 5,475 shares held directly by Mr. Shatzkes; (ii)
825 shares issuable pursuant to restricted stock units that are
fully vested or will vest within 60 days of October 14,
2022. |
OTHER MATTERS
The board of directors knows of no other business, which will be
presented to the Special Meeting. If any other business is properly
brought before the Special Meeting, proxies will be voted in
accordance with the judgment of the persons voting the proxies. The
proxies also have discretionary authority to vote to adjourn the
Special Meeting, including for the purpose of soliciting votes in
accordance with our board of director’s recommendations.
We will bear the cost of soliciting proxies in the accompanying
form. In addition to the use of mailing, proxies may also be
solicited by our directors, officers or other employees, personally
or by telephone, facsimile or email, none of whom will be
compensated separately for these solicitation activities. We have
engaged Kingsdale Advisors to assist in the solicitation of
proxies. We will pay a fee of approximately $9,100 plus reasonable
out-of-pocket charges.
If you do not plan to attend the Special Meeting, in order that
your shares may be represented and in order to assure the required
quorum, please sign, date and return your proxy promptly. In the
event you are able to attend the Special Meeting virtually, at your
request, we will cancel your previously submitted proxy.
HOUSEHOLDING
The SEC has adopted rules that permit companies and intermediaries
(e.g., brokers) to satisfy the delivery requirements for proxy
statements and other Special Meeting materials with respect to two
or more stockholders sharing the same address by delivering a proxy
statement or other Special Meeting materials addressed to those
stockholders. This process, which is commonly referred to as
householding, potentially provides extra convenience for
stockholders and cost savings for companies. Stockholders who
participate in householding will continue to be able to access and
receive separate proxy cards.
If you share an address with another stockholder and have received
multiple copies of our proxy materials, you may write or call us at
the address and phone number below to request delivery of a single
copy of the notice and, if applicable, other proxy materials in the
future. We undertake to deliver promptly upon written or oral
request a separate copy of the proxy materials, as requested, to a
stockholder at a shared address to which a single copy of the proxy
materials was delivered. If you hold stock as a record stockholder
and prefer to receive separate copies of our proxy materials either
now or in the future, please contact us at 737 N. Fifth
Street, Suite 200, Richmond, VA 23219, Attn: Corporate
Secretary. If your stock is held through a brokerage firm or bank
and you prefer to receive separate copies of our proxy materials
either now or in the future, please con
ANNUAL REPORT
Copies of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2021 may be obtained without charge by writing
to the Company’s Secretary, Aditxt, Inc., 737 N. Fifth
Street, Suite 200, Richmond, VA 23219. The Notice, our Annual
Report on Form 10-K and this proxy statement are also
available online at www.proxyvote.com.
| |
By
Order of the Board of Directors |
| |
|
| October
21, 2022 |
/s/ Amro
Albanna |
| |
Amro
Albanna
Chief Executive Officer
Chairman of the Board of Directors |
APPENDIX A
FORM OF WARRANT
NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY
MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
ADITXT, INC.
Warrant Shares: ________
Date of Issuance: ________, 2022 (“Issuance Date”)
This COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received (in connection with the issuance of the
senior secured promissory note in the principal amount of $________
to the Holder (as defined below) of even date) (the “Note”),
______________, a _____________ (including any permitted and
registered assigns, the “Holder”), is entitled, upon the
terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time during the Exercise Period, to
purchase from ADITXT, INC., a Delaware corporation (the
“Company”), _________ shares of Common Stock (the
“Warrant Shares”) (whereby such number may be adjusted from
time to time pursuant to the terms and conditions of this Warrant)
at the Exercise Price per share then in effect. This Warrant is
issued by the Company as of the date hereof in connection with that
certain securities purchase agreement dated ________, 2022, by and
among the Company and the Holder (the “Purchase Agreement”).
In the event the Exercise Price (as defined in this Warrant) is
reduced for any reason, including but not limited to pursuant to
Section 2 of this Warrant, the number of Warrant Shares issuable
hereunder shall be increased such that the aggregate Exercise Price
payable hereunder, after taking into account the decrease in the
Exercise Price, shall be equal to the aggregate Exercise Price
prior to such adjustment.
Capitalized terms used in this Warrant shall have the meanings set
forth in the Purchase Agreement unless otherwise defined in the
body of this Warrant or in Section 12 below. For purposes of this
Warrant, the term “Exercise Price” shall mean $0.15, subject to
adjustment as provided herein (including but not limited to
cashless exercise), and the term “Exercise Period” shall mean the
period commencing on the Commencement Date (as defined in this
Warrant) and ending on 5:00 p.m. eastern standard time on the date
that is five (5) years after the Issuance Date. “Commencement Date”
shall mean the date on which the Company obtains approval by from
the shareholders of the Company with respect to the issuance of any
Warrant Shares.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and
conditions hereof, the rights represented by this Warrant may be
exercised in whole or in part at any time or times during the
Exercise Period by delivery of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”),
of the Holder’s election to exercise this Warrant. The Holder shall
not be required to deliver the original Warrant in order to effect
an exercise hereunder. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
On or before the second Trading Day (the “Warrant Share Delivery
Date”) following the date on which the Holder sent the Exercise
Notice to the Company or the Company’s transfer agent, and upon
receipt by the Company of payment to the Company of an amount equal
to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which all or a portion of this Warrant is
being exercised (the “Aggregate Exercise Price” and together
with the Exercise Notice, the “Exercise Delivery Documents”)
in cash or by wire transfer of immediately available funds (or by
cashless exercise, in which case there shall be no Aggregate
Exercise Price provided), the Company shall (or direct its transfer
agent to) issue and deliver by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the
Company’s share register in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise (or deliver such shares of
Common Stock in electronic format if requested by the Holder). Upon
delivery of the Exercise Delivery Documents, the Holder shall be
deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date of delivery of the
certificates evidencing such Warrant Shares. If this Warrant is
submitted in connection with any exercise and the number of Warrant
Shares represented by this Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no
event later than three business days after any exercise and at its
own expense, issue a new Warrant (in accordance with Section 6)
representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this
Warrant is exercised.
If the Company fails to cause its transfer agent to issue to the
Holder the respective shares of Common Stock by the respective
Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise in Holder’s sole discretion in addition to
all other rights and remedies at law, under this Warrant, or
otherwise, and such failure shall also be deemed an event of
default under the Note, a material breach under this Warrant, and a
material breach under the Purchase Agreement.
If the Market Price of one share of Common Stock is greater than
the Exercise Price, then, unless there is an effective non-stale
registration statement of the Company which contains a prospectus
that complies with Section 5(b) and Section 10 of the Securities
Act of 1933 at the time of exercise and covers the Holder’s
immediate resale of all of the Warrant Shares at prevailing market
prices (and not fixed prices) without any limitation, the Holder
may elect to receive Warrant Shares pursuant to a cashless
exercise, in lieu of a cash exercise, equal to the value of this
Warrant determined in the manner described below (or of any portion
thereof remaining unexercised) by surrender of this Warrant and an
Exercise Notice, in which event the Company shall issue to Holder a
number of Common Stock computed using the following formula:
| |
Where X
= |
the number of Shares to be issued to Holder. |
| |
|
|
| |
Y = |
the number of Warrant Shares that
the Holder elects to purchase under this Warrant (at the date of
such calculation). |
| |
|
|
| |
A = |
the Market Price (at the date of such calculation). |
| |
|
|
| |
B = |
Exercise Price (as adjusted to the date of such calculation). |
(b) No Fractional Shares. No fractional shares shall be
issued upon the exercise of this Warrant as a consequence of any
adjustment pursuant hereto. All Warrant Shares (including
fractions) issuable upon exercise of this Warrant may be aggregated
for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the
exercise would result in the issuance of a fractional share, the
Company shall, in lieu of issuance of any fractional share, pay the
Holder otherwise entitled to such fraction a sum in cash equal to
the product resulting from multiplying the then-current fair market
value of a Warrant Share by such fraction.
(c) Holder’s Exercise Limitations. Notwithstanding anything
to the contrary contained herein, the Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 1 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Exercise Notice, the
Holder (together with the Holder’s affiliates (the “Affiliates”),
and any other Persons acting as a group together with the Holder or
any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 1(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Holder is solely responsible
for any schedules required to be filed in accordance therewith. In
addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 1(c), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the
Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Company’s transfer agent setting forth the
number of shares of Common Stock outstanding. Upon the written or
oral request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the
Common Stock outstanding at the time of the respective calculation
hereunder. In addition to the beneficial ownership limitations
provided in this Warrant, the sum of the number of shares of Common
Stock that may be issued under the August 2022 Securities (as
defined in the Purchase Agreement), which includes the Warrant
Shares under this Warrant, shall be limited to 19.99% of the
Company’s outstanding shares of Common Stock as of the Issuance
Date (the “Exchange Cap”), unless Shareholder Approval (as defined
in the Purchase Agreement) is obtained by the Company to issue more
than the Exchange Cap. The Exchange Cap shall be appropriately
adjusted for any reorganization, recapitalization, non-cash
dividend, stock split (including forward and reverse), or other
similar transaction. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
(d) Compensation for Buy-In on Failure to Timely Deliver Warrant
Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Company’s transfer
agent to transmit to the Holder the Warrant Shares in accordance
with the provisions of this Warrant (including but not limited to
Section 1(a) above pursuant to an exercise on or before the
respective Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder, within one (1)
business day of Holder’s request, the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the
product of (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder within one (1) business day of Holder’s request the
number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases, or
effectuates a cashless exercise hereunder for, Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence, the Company
shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common
Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
2. ADJUSTMENTS. The Exercise Price and the number of Warrant
Shares shall be adjusted from time to time as follows:
(a) Distribution of Assets. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including without limitation any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this
Warrant, then, in each such case:
(i) any Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution
shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Exercise
Price by a fraction (i) the numerator of which shall be the Closing
Sale Price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the value of the
Distribution (as determined in good faith by the Company’s Board of
Directors) applicable to one share of Common Stock, and (ii) the
denominator of which shall be the Closing Sale Price of the shares
of Common Stock on the Trading Day immediately preceding such
record date; and
(ii) the number of Warrant Shares shall be increased to a number of
shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed
for the determination of holders of shares of Common Stock entitled
to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding clause (i);
provided, however, that in the event that the Distribution is of
shares of common stock of a company (other than the Company) whose
common stock is traded on a national securities exchange or a
national automated quotation system (“Other Shares of Common
Stock”), then the Holder may elect to receive a warrant to
purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to
those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the
Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price
equal to the product of the amount by which the exercise price of
this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding clause (i) and
the number of Warrant Shares calculated in accordance with the
first part of this clause (ii).
(b) Anti-Dilution Adjustments to Exercise Price. If the
Company or any Subsidiary thereof, as applicable, at any time
beginning on the Issuance Date and continuing through the date that
the second Subsequent Placement (as defined in the Purchase
Agreement) occurs after the date that the Note is extinguished in
the entirety (for the avoidance of doubt, this shall include the
second Subsequent Placement that occurs after the date that the
Note is extinguished in the entirety), shall sell or grant any
option to purchase, or sell or grant any right to reprice, or
otherwise dispose of or issue (or announce any offer, sale, grant
or any option to purchase or other disposition) any Common Stock or
securities (including but not limited to Common Stock Equivalents)
entitling any person or entity (for purposes of clarification,
including but not limited to the Holder pursuant to (i) any other
security of the Company currently held by Holder, (ii) any other
security of the Company issued to Holder on or after the Issuance
Date (including but not limited to the Note), or (iii) any other
agreement entered into between the Company and Holder) to acquire
shares of Common Stock (upon conversion, exercise or otherwise), at
an effective price per share less than the then Exercise Price
(such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”) (if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, elimination of
an applicable floor price for any reason in the future (including
but not limited to the passage of time or satisfaction of certain
condition(s)), reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be
entitled or potentially entitled to receive shares of Common Stock
at an effective price per share which is less than the Exercise
Price at any time while such Common Stock or Common Stock
Equivalents are in existence, such issuance shall be deemed to have
occurred for less than the Exercise Price on such date of the
Dilutive Issuance (regardless of whether the Common Stock or Common
Stock Equivalents are (i) subsequently redeemed or retired by the
Company after the date of the Dilutive Issuance or (ii) actually
converted or exercised at such Base Share Price), then the Exercise
Price shall be reduced at the option of the Holder and only reduced
to equal the Base Share Price. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued,
regardless of whether the Common Stock or Common Stock Equivalents
are (i) subsequently redeemed or retired by the Company after the
date of the Dilutive Issuance or (ii) actually converted or
exercised at such Base Share Price by the holder thereof (for the
avoidance of doubt, the Holder may utilize the Base Share Price
even if the Company did not actually issue shares of its common
stock at the Base Share Price under the respective Common stock
Equivalents). The Company shall notify the Holder in writing, no
later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 2(b),
indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing
terms (such notice the “Dilutive Issuance Notice”). For purposes of
clarification, regardless of whether (i) the Company provides a
Dilutive Issuance Notice pursuant to this Section 2(b) upon the
occurrence of any Dilutive Issuance or (ii) the Holder accurately
refers to the number of Warrant Shares or Base Share Price in the
Exercise Notice, the Holder is entitled to receive the Base Share
Price upon the occurrence of any Dilutive Issuance.
(c) Subdivision or Combination of Common Stock. If the
Company at any time on or after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one
or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the
number of Warrant Shares will be proportionately increased. If the
Company at any time on or after the Issuance Date combines (by
combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of
Warrant Shares will be proportionately decreased. Any adjustment
under this Section 2(c) shall become effective at the close of
business on the date the subdivision or combination becomes
effective. Each such adjustment of the Exercise Price shall be
calculated to the nearest one-hundredth of a cent. Such adjustment
shall be made successively whenever any event covered by this
Section 2(c) shall occur.
3. FUNDAMENTAL TRANSACTIONS. If, at any time while this
Warrant is outstanding, (i) the Company effects any merger of the
Company with or into another entity and the Company is not the
surviving entity (such surviving entity, the “Successor
Entity”), (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by
the Company or by another individual or entity, and approved by the
Company) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares of Common Stock for
other securities, cash or property and the holders of at least 50%
of the Common Stock accept such offer, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares
of Common Stock) (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive the number of
shares of Common Stock of the Successor Entity or of the Company
and any additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to
such event (disregarding any limitation on exercise contained
herein solely for the purpose of such determination). For purposes
of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any Successor Entity in such
Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the
Holder’s right to exercise such warrant into Alternate
Consideration.
4. NON-CIRCUMVENTION. The Company covenants and agrees that
it will not, by amendment of its certificate of incorporation,
bylaws or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the
generality of the foregoing, the Company (i) shall not increase the
par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of this
Warrant, and (iii) shall, beginning on the date that is sixty (60)
calendar days after the Issuance Date and for so long as this
Warrant is outstanding, have authorized and reserved, free from
preemptive rights, two (2) times the number of shares of Common
Stock into which the Warrants are then exercisable into to provide
for the exercise of the rights represented by this Warrant (without
regard to any limitations on exercise).
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as
otherwise specifically provided herein, this Warrant, in and of
itself, shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company. In addition, nothing
contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by
creditors of the Company.
6. REISSUANCE.
(a) Lost, Stolen or Mutilated Warrant. If this Warrant is
lost, stolen, mutilated or destroyed, the Company will, on such
terms as to indemnity or otherwise as it may reasonably impose
(which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuance of New Warrants. Whenever the Company is
required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant shall be of like tenor with this Warrant,
and shall have an issuance date, as indicated on the face of such
new Warrant which is the same as the Issuance Date.
7. TRANSFER. This Warrant shall be binding upon the Company
and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Notwithstanding
anything to the contrary herein, the rights, interests or
obligations of the Company hereunder may not be assigned, by
operation of law or otherwise, in whole or in part, by the Company
without the prior signed written consent of the Holder, which
consent may be withheld at the sole discretion of the Holder (any
such assignment or transfer shall be null and void if the Company
does not obtain the prior signed written consent of the Holder).
This Warrant or any of the severable rights and obligations inuring
to the benefit of or to be performed by Holder hereunder may be
assigned by Holder to a third party, in whole or in part, without
the need to obtain the Company’s consent thereto.
8. NOTICES. Whenever notice is required to be given under
this Warrant, unless otherwise provided herein, such notice shall
be given in accordance with the notice provisions contained in the
Purchase Agreement. The Company shall provide the Holder with
prompt written notice (i) immediately upon any adjustment of the
Exercise Price, setting forth in reasonable detail, the calculation
of such adjustment and (ii) at least 20 days prior to the date on
which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common
Stock, (B) with respect to any grants, issuances or sales of any
stock or other securities directly or indirectly convertible into
or exercisable or exchangeable for shares of Common Stock or other
property, pro rata to the holders of shares of Common Stock or (C)
for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.
9. AMENDMENT AND WAIVER. The terms of this Warrant may be
amended or waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written
consent of the Company and the Holder.
10. GOVERNING LAW AND VENUE. This Warrant shall be governed
by and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of laws. Any
action brought by either party against the other concerning the
transactions contemplated by this Warrant shall be brought only in
the Court of Chancery of the State of Delaware or, to the extent
such court does not have subject matter jurisdiction, the United
States District Court for the District of Delaware or, to the
extent that neither of the foregoing courts has jurisdiction, the
Superior Court of the State of Delaware. The parties to this
Warrant hereby irrevocably waive any objection to jurisdiction and
venue of any action instituted hereunder and shall not assert any
defense based on lack of jurisdiction or venue or based upon
forum non conveniens. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY
OTHER TRANSACTION DOCUMENT ENTERED INTO IN CONNECTION WITH OR
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In
the event that any provision of this Warrant or any other agreement
delivered in connection herewith is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of
any other provision of any agreement. Each party hereby irrevocably
waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this
Warrant or any other transaction document entered into in
connection with this Warrant by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to
it under the Purchase Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by
law.
11. ACCEPTANCE. Receipt of this Warrant by the
Holder shall constitute acceptance of and agreement to all of the
terms and conditions contained herein.
12. CERTAIN DEFINITIONS. For purposes of this Warrant, the
following terms shall have the following meanings:
|
(a) |
[Intentionally Omitted]. |
(b) “Closing Sale Price” means, for any security as of any
date, (i) the last closing trade price for such security on the
Principal Market, as reported by Quotestream or other similar
quotation service provider designated by the Holder, or, if the
Principal Market begins to operate on an extended hours basis and
does not designate the closing trade price, then the last trade
price of such security prior to 4:00 p.m., New York time, as
reported by Quotestream or other similar quotation service provider
designated by the Holder, or (ii) if the foregoing does not apply,
the last trade price of such security in the over-the-counter
market for such security as reported by Quotestream or other
similar quotation service provider designated by the Holder, or
(iii) if no last trade price is reported for such security by
Quotestream or other similar quotation service provider designated
by the Holder, the average of the bid and ask prices of any market
makers for such security as reported by Quotestream or other
similar quotation service provider designated by the Holder. If the
Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value
as mutually determined by the Company and the Holder. All such
determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during
the applicable calculation period.
(c) “Common Stock” means the Company’s common stock, par
value $0.001, and any other class of securities into which such
securities may hereafter be reclassified or changed.
(d) “Common Stock Equivalents” means any securities of the
Company that would entitle the holder thereof to acquire at any
time Common Stock, including without limitation any debt, preferred
stock, rights, options, warrants or other instrument that is at any
time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.
(e) “Person” and “Persons” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity and any governmental entity or any department or agency
thereof.
(f) “Principal Market” means the principal securities
exchange or trading market where such Common Stock is listed or
quoted, including but not limited to any tier of the OTC Markets,
any tier of the NASDAQ Stock Market (including NASDAQ Capital
Market), or the NYSE American, or any successor to such
markets.
(g) “Market Price” means the highest traded price of the
Common Stock during the one hundred and fifty Trading Days prior to
the date of the respective Exercise Notice.
(h) “Trading Day” means any day on which the Common Stock is
listed or quoted on its Principal Market, provided, however, that
if the Common Stock is not then listed or quoted on any Principal
Market, then any calendar day.
* * * * * * *
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the Issuance Date set forth above.
| |
ADITXT,
INC. |
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Name: |
Amro
Albanna |
| |
Title: |
Chief
Executive Officer |
EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise this Common
Stock Purchase Warrant)
THE UNDERSIGNED holder hereby exercises the
right to purchase
of the shares of Common Stock (“Warrant Shares”) of ADITXT, INC., a
Delaware corporation (the “Company”), evidenced by the attached
copy of the Common Stock Purchase Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
| 1. |
Form of Exercise Price. The Holder intends that payment
of the Exercise Price shall be made as (check one): |
|
☐ |
a cash exercise with respect to
Warrant Shares; or |
|
☐ |
by cashless exercise pursuant to
the Warrant. |
|
2. |
Payment of Exercise Price.
If cash exercise is selected above, the holder shall pay the
applicable Aggregate Exercise Price in the sum of $
to the Company in accordance with the terms of the Warrant. |
|
3. |
Delivery of Warrant Shares.
The Company shall deliver to the holder
Warrant Shares in accordance with the terms of the Warrant. |
|
Date:__________________________ |
|
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(Print Name of
Registered Holder) |
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By: |
|
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Name: |
|
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Title: |
|
EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of the Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns, and transfers unto
the right to purchase
shares of common stock of ADITXT, INC., to which the within Common
Stock Purchase Warrant relates and appoints
,
as attorney-in-fact, to transfer said right on the books of ADITXT,
INC. with full power of substitution and re-substitution in the
premises. By accepting such transfer, the transferee has agreed to
be bound in all respects by the terms and conditions of the within
Warrant.
| Dated: |
|
| |
(Signature) * |
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|
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(Name) |
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|
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|
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(Address) |
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|
| |
|
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(Social
Security or Tax Identification No.) |
* The signature on this Assignment of Warrant must correspond to
the name as written upon the face of the Common Stock Purchase
Warrant in every particular without alteration or enlargement or
any change whatsoever. When signing on behalf of a corporation,
partnership, trust or other entity, please indicate your
position(s) and title(s) with such entity.
A-10
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