JANONEINC.
AMENDED AND RESTATED CERTIFICATE OF DESIGNATION
OF THE RIGHTS, PREFERENCES, AND LIMITATIONS OF
SERIES S CONVERTIBLE PREFERRED STOCK
The undersigned, Tony Isaac, does hereby certify that:
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company by provisions of the Articles of Incorporation of the Company (the "Articles of Incorporation"), there hereby is created out of the shares of the Company's preferred stock, par value $0.001 per share, of the Company authorized in the Articles of Incorporation, a series of Preferred Stock of the Company, to be named "Series S Convertible Preferred Stock," consisting of two hundred thousand (200,000) shares, which series shall have the following designations, powers, preferences and relative and other special rights and the following qualifications, limitations, and restrictions:
Section 1.
following meanings:
Definitions. For the purposes hereof, the following terms shall have the
"$3 Million Tranche" means the number of shares of Series S Convertible Preferred Stock that Amol Soin, M.D. (or his permitted transferee) is permitted to convert into an amount not to exceed $3,000,000 of value of Common Stock.
"$10 Million Tranche" means the number of shares of Series S Convertible Preferred Stock that Amol Soin, M.D. (or his permitted transferee) is permitted to convert into an amount not to exceed $10,000,000 of value of Common Stock.
"$17 Million Tranche" means the number of shares of Series S Convertible Preferred Stock that Amol Soin, M.D. (or his permitted transferee) is pe1mitted to convert into an amount not to exceed $17,000,000 of value of Common Stock
''Business Day" means a day in which a majority of the banks in the State of Nevada
in the United States of America are open for business.
"Certificate" shall mean this Certificate of Designation of the Rights, Privileges, and Limitations of Series S Convertible Preferred Stock.
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"Common Stock" shall mean the shares of the Company's class of common stock,
$0.001 par value per share.
"Company" shall have the meaning ascribed in the initial paragraph hereof.
"Conversion" shall have the meaning ascribed in Section 6(a) below.
"Conversion Date" shall mean the date on which a share or shares of the Series S Convertible Preferred Stock is converted pursuant to the terms of this Certificate.
"Distribution" shall mean the transfer of cash or other property without consideration, whether by way of dividend or othe1wise (other than dividends on Common Stock payable in Common Stock), or the purchase or redemption of shares of the Company for cash or property other than: (i) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of capital stock of the Company in connection with the settlement of disputes with any stockholder, and (iv) any other repurchase or redemption of capital stock of the Company approved by the holders of (a) a majority of the Common Stock and (b) a majority of the Series S Convertible Preferred Stock of the Company voting as separate classes.
"Holder" shall mean the person or entity in which the Series S Convertible Preferred Stock is registered on the books of the Company, which shall initially be the person or entity that was issued shares of Series S Convertible Preferred Stock, and shall thereafter be the permitted and legal assigns of which the Company is notified by the Holder and in respect of which the Holder has provided a valid legal opinion in connection therewith to the Company.
"Holders" shall mean all Holders of shares of the Series S Convertible Preferred Stock.
"Junior Stock" shall mean the Common Stock and each other class of capital stock or series of preferred stock of the Company established prior to or after the Original Issue Date, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Series S Convertible Preferred Stock upon the liquidation, wincli11g-up, or dissolution of the Company.
"Original Issue Date" shall mean the date upon which the shares of Series S Convertible Preferred Stock ate first issued.
''Recapitalization" shall mean any stock dividend, stock split, and combination of shares, reorganization, recapitalization, reclassification, or other similar event.
"Section 6(c) Event" shall have the meaning ascribed in Section 6(c), below.
"Series S Convertible Preferred Stock" shall mean the Series S Convertible Preferred Stock designated by the Company pursuant to the Articles of Incorporation :filed with the Office of the Secretary of State of the State of Nevada.
"Stated Value" shall have the meaning ascribed in Section 2, below.
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"Triggering Event" shall have the meaning ascribed in Section 12(e), below.
Section 2. Designation; Amount: and Par Value. The series of Series S preferred stock shall be designated as the Company's Series S Convertible Preferred Stock (the "Series S Convertible Preferred Stock") and the number of shares so designated shall be up to Two Hundred Thousand (200,000) shares (which shall not be subject to increase without the written consent of the Holders of a majority of the then-issued and outstanding Series S Convertible Preferred Stock and the Board of Directors). Each share of Series S Convertible Preferred Stock shall have a stated value of $300.00 per share (the "Stated Value") and a par value of $0.001 per share.
Section 3. dividend rights.
Dividends. The shares of Series S Convertible Preferred Stock do not have
Section 4. Voting Rights. The Holder of each share of Series S Convertible Preferred Stock shall have one vote for such share. With respect to any stockholder vote, the Holder shall have full voting tights and powers equal to the voting -rights and powers of the Common Stock stockholders, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in accordance with the Bylaws of the Company, and shall be entitled to vote, together with Common Stock stockholders, with respect to any question upon which the Common Stock stockholders have the right to vote. The Holders of Series S Convertible Preferred Stock shall vote together with all other classes and series of common and preferred stock of the Company as a single class on all actions to be taken by the Common Stock stockholders, except to the extent that voting as a separate class or series is required by law o.t by this Certificate.
Section 5. Liquidation Preference: Change of Control.
1 "Aggregate Liquidation Value" shall be equivalent to the sum of Q) the Stated Value of all of the then-outstanding shares of Series S Convertible Preferred Stock remaining in the $3 Million Tranche that are, as of the date of Liquidation, convertible into shares of Common Stock plus (ii) the Stated Value of all of the then-outstanding shares of Series S Convertible Preferred Stock remaining in the $10 Million tranche that are, as of such Liquidation Date, convertible into sha:te5 of Common Stock plus, (iii) in respect of all of the then-outstanding shares of Series S Convertible Preferred Stock remaining in the $17 Million Tranche that are, as of the date of Liquidation, eligible to be converted into shares of Common Stock, an amount equal to 5% of the net sale proceeds received by the Company or its stockholders, as applicable, as a result of (a) the sale of the equity of the business entity or entities in which the Company holds the assets, as they may subsequently have been modified (the "Acquired Assets"), that it acquired in connection with the Agreement and Plan of Merger, entered into as of December 28, 2022, among the Company, STI Merger Sub Inc., Soin Therapeutics, LLC, and Amol Soin, M.D. (the ''Merger Agreement"), o:t (b) the sale of all or substa11tially all of the assets of such business entity or entities (either transaction of the type referenced in subsections (a) or (b), a "Qualified
Soin Sale"), such amount not to exceed $17 Million for such $17 Million Tranche (lets, in any case involving shares in
the $17 Million Tranche, the aggregate Conversion Price of all conversions of shares of Series S Convertible Preferred Stock in such Tranche prior to the Liquidation); provided; however, that the Aggregate Liquidation Value shall not include the Stated Value of (x) any previously converted Series S Convertible Preferred Stock or (y) any incremental Series S Convertible Preferred Stock issued pursuant to Footnote 2.
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to be distributed to the Holders of Series S Convertible P:refe.cred Stock upon any such Change of Control in the form of a cash transaction, in consideration of the cancellation of the shares of Series S Convertible Preferred Stock then held by such Holders, shall be an amount equivalent to the Aggregate Liquic½,tion Value.
(ii) Notice Waiting Period. The Company shall not consummate any voluntary Liquidation or Chat1ge of Control of the Company before the expiration of thirty (30) days after the mailing of the initial notice or ten (10) days after the mailing of any subsequent written notice, whichever is later; provided, that any such period may be shortened upon the written consent of the Holders of all the outstanding shares of Series S Convertible Preferred Stock.
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Company's sale of substantially all of the assets of Geotraq Inc. (the "Geotraq Note"), the Holders of shares of Series S Convertible Preferred Stock shall neither be entitled to nor shall receive any proceeds or other indicia of value resulting from such transaction. Accordingly, such Holders will be specifically excluded from any cash or stock or other value received by the Company or its equity or debt holders from any such transaction. Further, if the Geotraq Note or any subsidiary, division, or other asset of ARCA is distributed to the holders of capital stock of the Company or is otherwise separated from the Company, the Holders of shares of the Series S Convertible Preferred Stock, in their roles as such, shall neither be entitled to nor shall receive any ownership position therein.
Section 6. Conversion. The shares of Seri.es S Conve1tible Prefe11:ed Stock shall not be convertible into shares of Common Stock and have no other conversion rights except as specifically set forth below:
(1) June 28, 2023, or (2) the earlier of (x) the issuance to the Company by the U.S. Food and Dmg Administration of New Drug Approval for low-dose naltrexone for
2 Lower of (i) the Nasdaq Official Closing Price per share of the Common Stock (as reflected on Nasdaq.com) on the Business Day immediately preceding the effective date of the Merger Agreement or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trailing days immediately preceding the effective date of the Merger Agreement. Notwithstanding the conversion pricing formula set forth above, if, as of the effective date of the applicable notice of any conversion of shares of Series S Convertible Preferred Stock, either of the Nasdaq Official Closing Price per share of the Common Stock (as reflected on Nasdaq.com) on the Business Day immediately preceding the effective date of the applicable notice of such conversion or the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the effective date of the applicable notice of such conversion is less than $1.66 per share of Common Stock, then, although the Conversion Price will not be less than $1.66, the $3 Million Tranche, the $10 Million Tranche, and the $17 Million Tranche, as applicable, will increase to a dollar value such that, upon conversions of the Series S Convertible Preferred Stock, the Holder will receive $3 Million, $10 Million, or $17 Million value, as applicable, notwithstanding the "Nasdaq calculated" pricing rules. This calculation shall utilize the lesser of the two Nasdaq pricing rules. Further, each such conversion will be calculated on a stand-alone basis and will not affect the Conversion Price for any subsequent conversion. By way of example only, if (i) the Conversion Price were $1.66 in accordance with the alternatives set forth above and (il) the lesser of the two Nasdaq pricing rules were approximately $1.1067, then, without taking into effect . the Beneficial Ownership Limitation, and assuming that all of the $3 Million Tranche were converted in one transaction, the value of the$3 Million Tranche would increase to $4.5 Million, without effecting the value of the $10 Million Tranche or the $17 Million Tranche.
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treating pain (the ''Product") or (y) December 28, 2032, to convert any or all of the
$10 Million Tranche into shares of Common Stock; and (C) commencing on December 28, 2022, to convert any or all of the $17 Million Tranche into shares of Common Stock at a rate of five percent of the gross revenues that the Company has received and has recognized as revenue on its financial statements (that are prepared in accordance with U.S. generally accepted accounting principles) in connection with sales or license fees or other revenue resulting from the Product, provided, that each such conversion shall be in increments of not less than one million dollars of received and recognized revenue.
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conversion in a name other than that in which the shares of the Series S Convertible Preferred Stock so converted were registered, and no such issue or delive1y shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been or will be paid. The Company may withhold from any payment due whatsoever in connection with the Series S Convertible Preferred Stock any and all required withholdings and/or taxes that the Company, in its reasonable discretion deems reasonable or necessary, absent an opinion from Holder's accountant or legal counsel, acceptable to the Company in its reasonable determination, that such withholdings and/or taxes are not required to be withheld by the Company.
entity (any such corporate event, a "Section 6(c) Event"), then, in each instance, the Conversion Price shall be adjusted such that the number of shares issued upon conversion of one share of Series S Convertible Preferred Stock will equal the number of shares of Common Stock that would otherwise have been issued but for such Section 6(c) Event.
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and any other persons acting as a group together with the Holder or any of the Holder's affiliates), would beneficially own111 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 its affiliates shall include the number of sh2.tes of Common Stock issuable upon conversion of shares of Series S Convertible Preferred Stock with respect to which such determination is being 1nade, but shall exclude the number of shares of Common Stock that would be issuable upon conversion of the remaining, non converted portion of the shares of Series S Convertible Preferred Stock beneficially owned by the Holder or any of its affiliates subject to a limitation on conversion analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6(g), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith, and the Company shall have no obligation to verify or confirm the accuracy of such defemination. 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 pm-poses of this Section 6(g), 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 Securities and Exchange 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 its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Business 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 specific amount of the proposed conversion of shares of Series S Convertible Preferred Stock by the Holder or its affiliates 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 immediately after giving effect to the issuance of shares of Common Stock issuable upon a conversion hereunder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(g) to correct this paragraph (or any portion hereof) that may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to give proper effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of shares of Series S Convertible preferred Stock.
Section 7. Redemption. The Series S Convertible Preferred Stock shall have no redemption rights by the Company or any other entity.
Section 8. Protective Provisions. In addition to any other rights provided by law, at any time any shares of Series S Convertible Preferred Stock are outstanding, as a legal party in interest, the Company, through action directly initiated by the Board of Directors or indirectly initiated by the Board of Directors through ji1dicial action or process, including any action by the Common Stock stockholders, shall not, either directly or indirectly by amendment, merger, consolidation, or
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otherwise, take any of the following actions without first obtaining the affirmative approval by the Holders of a majority of the shares of Se.ti.es S Convertible Preferred Stock:
.tights set forth in this Certificate provide however, that the Company may, by any means authorized by law and without any vote of the Holders of shares of Se.ti.es S Convertible Preferred Stock, make technical, corrective, administrative, or similar changes in this Certificate that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the Holders of shares of the Series S Convertible Preferred Stock.
Section 9. Preemptive Rights. Holders of Series S Conve1tible Preferred Stock a11d Common Stock stockholders shall not be entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company, except as specifically set forth herein or in any other document agreed to by the Company. ·
Section 10. Reports. The Company shall mail to all Holders of Series S Convertible Preferred Stock those reports, proxy statements, and other materials that it mails to all of its Common Stock stockholders.
Section 11. Reserved.
Section 12. Miscellaneous.
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IN WITNESS WHEREOF, the undersigned has executed and subscribed this Amended and Restated Certificate and does affirm the foregoing as t1.11e this_ day of January, 2023.
JANONEINC.
By:
Tony Isaac, Chief Executive Officer
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