Item 1.01. Entry into a Material Definitive Agreement.
Adoption of a Shareholder Rights Plan
On January 13, 2021, the Board of Directors (the "Board") of Synaptogenix, Inc.
(the "Company") adopted a shareholder rights plan (the "Rights Plan"). The
Rights Plan is intended to protect the interests of its stockholders and enable
them to realize the full potential value of their investment by reducing the
likelihood that any person or group gains control of the Company, through open
market accumulation or other tactics, without appropriately compensating all
stockholders. Pursuant to the Rights Plan, the Company will issue, by means of a
dividend, one preferred share purchase right for each outstanding share of the
Company's common stock to shareholders of record on the close of business on
January 25, 2021. Initially, these Rights (as defined below) will trade with,
and be represented by, the shares of the Company's common stock. The Rights will
generally become exercisable only if any person (or any persons acting as a
group) acquires 15% or more of the Company's outstanding common stock (the
"Acquiring Person") in a transaction not approved by the Board, subject to
certain exceptions, as explained below.
If the Rights become exercisable, all holders of Rights, other than the
Acquiring Person, will be entitled to acquire shares of the Company's common
stock at a 50% discount or the Company may exchange each Right held by such
holders for one share of its common stock. See "Flip-In Event" below. In such
situation, Rights held by the Acquiring Person would become void and will not be
exercisable. If any person at the time of the first public announcement of the
Rights Plan owns more than the triggering percentage, then that stockholder's
existing ownership percentage will be grandfathered, although, with certain
exceptions, the Rights will become exercisable if at any time after the
announcement of the Rights Plan such stockholder increases its ownership of the
Company's common stock.
Unless earlier redeemed, terminated or exchanged pursuant to the terms of the
Rights Plan, the Rights will expire at the close of business on January 13,
2023. The Board may terminate the Rights Plan before that date if the Board
determines that there is no longer a threat to shareholder value.
On January 13, 2021, the Board declared a dividend of one preferred share
purchase right (a "Right"), payable on January 25, 2021, for each share of
common stock, par value $0.0001 per share, of the Company (the "Common Shares")
outstanding on January 25, 2021 (the "Record Date") to the stockholders of
record on that date. In connection with the distribution of the Rights, the
Company entered into a Rights Agreement (the "Rights Agreement"), dated as of
January 19, 2021, between the Company and Philadelphia Stock Transfer, Inc., as
rights agent. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Preferred Stock, par value
$0.001 per share (the "Preferred Shares"), of the Company at a price of $20 per
one one-thousandth of a Preferred Share represented by a Right (the "Purchase
Price"), subject to adjustment.
As further described below, the Rights Agreement contains the following key
· Two-year term
· 15% trigger
· No "dead-hand," "slow-hand," "no-hand," or similar feature that limits the
ability of a future board of directors to redeem the rights plan
· Grandfathering provision.
Distribution Date; Exercisability; Expiration
Initially, the Rights will be attached to all Common Share certificates and no
separate certificates evidencing the Rights ("Right Certificates") will be
issued. Until the Distribution Date (as defined below), the Rights will be
transferred with and only with the Common Shares. As long as the Rights are
attached to the Common Shares, the Company will issue one Right with each new
Common Share so that all such Common Shares will have Rights attached.
The Rights will separate and begin trading separately from the Common Shares,
and Right Certificates will be caused to evidence the Rights, on the earlier to
occur of (i) the Close of Business (as such term is defined in the Rights
Agreement) on the tenth day following a public announcement, or the public
disclosure of facts indicating (or the Board of Directors becoming aware), that
a Person (as such term is defined in the Rights Agreement) or group of
affiliated or associated Persons has acquired Beneficial Ownership (as defined
below) of 15% or more of the outstanding Common Shares (an "Acquiring Person")
(or, in the event the Board of Directors determines to effect an exchange in
accordance with Section 24 of the Rights Agreement and the Board of Directors
determines that a later date is advisable, then such later date) or (ii) the
Close of Business on the tenth Business Day (as such term is defined in the
Rights Agreement) (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or the first public announcement of the intention
to commence, a tender offer or exchange offer the consummation of which would
result in the Beneficial Ownership by a Person or group of 15% or more of the
outstanding Common Shares (the earlier of such dates, the "Distribution Date").
As soon as practicable after the Distribution Date, unless the Rights are
recorded in book-entry or other uncertificated form, the Company will prepare
and cause the Right Certificates to be sent to each record holder of Common
Shares as of the Distribution Date.
An "Acquiring Person" will not include (i) the Company, (ii) any Subsidiary (as
such term is defined in the Rights Agreement) of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, (iv) any entity
holding Common Shares for or pursuant to the terms of any such employee benefit
plan or (v) any Person who or which, together with all Affiliates and Associates
(as such terms are defined in the Rights Agreement) of such Person, at the time
of the first public announcement of the Rights Agreement, is a Beneficial Owner
of 15% or more of the Common Shares then outstanding (a "Grandfathered
Stockholder"). However, if a Grandfathered Stockholder becomes, after such time,
the Beneficial Owner of any additional Common Shares (regardless of whether,
thereafter or as a result thereof, there is an increase, decrease or no change
in the percentage of Common Shares then outstanding Beneficially Owned (as such
term is defined in the Rights Agreement) by such Grandfathered Stockholder) then
such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless,
upon such acquisition of Beneficial Ownership of additional Common Shares, such
Person is not the Beneficial Owner of 15% or more of the Common Shares then
outstanding. In addition, upon the first decrease of a Grandfathered
Stockholder's Beneficial Ownership below 15%, such Grandfathered Stockholder
will no longer be deemed to be a Grandfathered Stockholder. For the avoidance of
doubt, in the event that after the time of the first public announcement of the
. . .
Item 3.03. Material Modifications to Rights of Security Holders.
The information set forth in Items 1.01 and 5.03 of this Current Report on
Form 8-K is incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In connection with the adoption of the Rights Agreement, on January 19, 2021,
the Company filed a Certificate of Designations, Preferences and Rights of
Series A Preferred Stock (the "Certificate of Designation"), with the Secretary
of State of the State of Delaware. A copy of the Certificate of Designation is
attached hereto as Exhibit 3.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description of Exhibit
3.1 Certificate of Designations, Preferences and Rights of Series A
Preferred Stock of Synaptogenix, Inc., as filed with the Secretary
of State of the State of Delaware on January 19, 2021.
4.1 Rights Agreement, dated as of January 19, 2021, between
Synaptogenix, Inc. and Philadelphia Stock Transfer, Inc., as rights
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