Attached files
Exhibit 3.1
CERTIFICATE OF DESIGNATION OF POWERS,
PREFERENCES AND RIGHTS OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
YOUNGEVITY INTERNATIONAL, INC.
a Delaware corporation
ADOPTED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
Youngevity International, Inc., a Delaware
corporation (the “Corporation”),
pursuant to Section 151 of the General Corporation Law of the State
of Delaware, certifies that the directors of the Corporation have
unanimously adopted the resolutions attached hereto as
Appendix
I providing for the issuance of
315,790 shares of Series C Convertible Preferred
Stock.
The
undersigned certifies that he is the duly elected President of the
Corporation.
IN WITNESS
WHEREOF, the Corporation has
caused this Certificate to be executed by David Briskie, its
President, this 16th day of August, 2018.
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YOUNGEVITY
INTERNATIONAL, INC.
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By: /s/
David Briskie
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David
Briskie
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President
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APPENDIX I
The undersigned, being all of the members of the
Board of Directors of Youngevity International, Inc. (the
“Corporation”),
do hereby consent to the following actions and adopt the following
preamble and resolutions by written consent pursuant to Section
141(f) of the Delaware General Corporation Law:
WHEREAS, the Certificate of Incorporation (the
“Certificate”)
of the Corporation provides for a class of stock designated as
preferred stock, par value $.001 per share (the
“Preferred
Stock”), comprising
5,000,000 shares, issuable from time to time and in one or more
series and authorizes the Board of Directors (the
“Board”)
of the Corporation to fix or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and the number of shares
constituting any such series and the designations thereof;
and
WHEREAS, the Certificate also provides for a class of
stock designated as common stock, $.001 par value per share,
comprising 50,000,000 shares (the “Common
Stock”). The term
“Common Stock” when used in this resolution with
reference to the Common Stock into which a share of Preferred Stock
is convertible, shall mean only Common Stock of the Corporation,
$.001 par value per share, and any stock into which the Common
Stock may hereafter be changed; and
WHEREAS, it is the desire of the Board to authorize the
issuance of a series of Preferred Stock and to determine the
rights, preferences, privileges, restrictions and other matters
relating to the series of Preferred Stock.
NOW, THEREFORE, IT IS
RESOLVED that the Corporation
does hereby provide for the issuance of a series of convertible
Preferred Stock of the Corporation, consisting of 315,790 shares
which shall be designated as “Series C Convertible
Preferred Stock”, and
does hereby fix and determine the powers, preferences and rights
relating to said Series C Convertible Preferred
Stock:
SERIES C CONVERTIBLE PREFERRED STOCK
1.
Designation of Shares; Rank.
(a)
This series of preferred stock shall be designated
and known as Series C Convertible Preferred Stock (the
“Series C Preferred
Stock”). The number of
shares constituting the Series C Preferred Stock shall be 315,790
shares, par value $.001 per share.
(b)
Except as otherwise provided herein, so long as
any Series C Preferred Stock is outstanding, with respect to
redemption rights, rights on Liquidation (as hereinafter defined),
winding up, corporate reorganization and dissolution, the Series C
Preferred Stock shall rank senior to the Common Stock, the Series A
Convertible Preferred Stock (the “Series A Preferred
Stock”), the Series B
Convertible Preferred Stock (the “Series B Preferred
Stock”) and any other
class or series of stock ranking junior to the Series C Preferred
Stock, and with
respect to dividends pari
passu with the Series B
Preferred Stock.
2.
Conversion.
The holders of shares of Series C Preferred Stock shall have the
following conversion rights:
(a)
Right to
Convert. Subject to the terms
and conditions of this paragraph 2(a), each holder of any shares of
the Series C Preferred Stock shall have the right, at his, her or
its option, at any time and from time to time and without the
payment of additional consideration by the holder thereof, to
convert each share of Series C Preferred Stock held by such holder
into such number of shares of Common Stock as is determined by
dividing $9.50 by the Conversion Price (as defined below). Such
right of conversion shall be exercised by the holder hereof by
giving written notice that the holder elects to convert a stated
number of shares of Series C Preferred Stock into Common Stock and
by surrender of a certificate or certificates for the shares to be
converted to the Corporation at its principal office (or such other
office or agency of the Corporation as the Corporation may
designate in writing to the holders of Series C Preferred Stock) in
which the certificate or certificates for shares of Common Stock
shall be issued. If required by the Corporation, any certificate
for shares surrendered for conversion shall be accompanied by
instruments of transfer, in a form reasonably satisfactory to the
Corporation, duly executed by the holder of such Series C Preferred
Stock or his, her or its duly authorized
representative.
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(b)
Automatic
Conversion. In the event the
average of the daily volume weighted average price of the Common
Stock as reported by Bloomberg L.P. for the thirty (30) Trading Day
period preceding the two year anniversary of the original issuance
date of the Series C Preferred Stock is $6.00 or higher (as
adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions occurring after the
original issuance date of the Series C Preferred Stock),
each outstanding share of
Series C Preferred Stock, shall automatically convert into such
number of shares of Common Stock as is determined by dividing $9.50
by the Conversion Price.. For
the purposes hereof, “Trading Day” means: (a) any day
on which the Common Stock is listed or quoted and traded on its
primary Trading Market or (b) if the Common Stock is not then
listed or quoted and traded on any Trading Market, then a day on
which trading occurs on the NYSE AMERICAN LLC (or any successor.
For the purposes hereof, “Trading Market”
means the following market(s) or exchange(s) on which the Common
Stock is listed or quoted for trading on the date in question (as
applicable): the Nasdaq Capital Market, the Nasdaq Global Market,
the Nasdaq Global Select Market, the New York Stock Exchange or the
NYSE American LLC.
(c)
Mechanics of
Conversion. All shares of
Series C Preferred Stock which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Conversion Date at the time
of conversion, except only the right of the holders thereof to
receive shares of Common Stock in exchange therefor, to receive
payment in lieu of any fraction of a share otherwise issuable upon
such conversion and payment of any dividends declared but unpaid on
the Series C Preferred Stock. Any shares of Series C Preferred
Stock so converted shall be retired and canceled and return to the
status of and constitute authorized but unissued shares of
Preferred Stock, without classification as to series until such
shares are once more classified as a particular series by the Board
of Directors pursuant to the provisions of the Certificate of
Incorporation.
(d)
Issuance of
Certificates; Time Conversion Effected. Promptly after the conversion of Series C
Preferred Stock and surrender to the Corporation of the certificate
or certificates for the share or shares of Series C Preferred Stock
to be converted, the Corporation shall issue and deliver, or cause
to be issued and delivered, to the holder, registered in such name
or names as such holder may direct, a certificate or certificates
for the number of whole shares of Common Stock issuable upon the
conversion of such share or shares of Series C Preferred Stock. To
the extent permitted by law, such conversion shall be deemed to
have been effected as of the close of business on the later of the
date on which such written notice shall have been received by the
Corporation and the certificate or certificates for such share or
shares shall have been surrendered as aforesaid, and at such time
the rights of the holder of such share or shares of Series C
Preferred Stock shall cease, and the person or persons in whose
name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common
Stock represented thereby.
(e)
No Fractional Shares;
Dividends, Partial Conversion.
No fractional shares shall be issued upon conversion of Series C
Preferred Stock into Common Stock and no payment or adjustment
shall be made upon any conversion on account of any cash dividends
on the Common Stock issued upon such conversion. At the time of
each conversion pursuant to subparagraph 2(a) or 2(b), the
Corporation shall pay, to the extent permitted by law, in cash an
amount equal to all accrued and unpaid dividends on the shares of
Series C Preferred Stock surrendered for conversion to the date
upon which such conversion is deemed to take place as provided in
subparagraph 2(c). In case the number of shares of Series C
Preferred Stock represented by the certificate or certificates
surrendered exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder, at
the expense of the Corporation, a new certificate or certificates
for the number of shares of Series C Preferred Stock represented by
the certificate or certificates surrendered which are not to be
converted. If any fractional share of Common Stock would, except
for the provisions of the first sentence of this subparagraph 2(e),
be delivered upon such conversion, the Corporation, in lieu of
delivering such fractional share, shall pay, to the extent
permitted by law, to the holder surrendering the Series C Preferred
Stock for conversion an amount in cash equal to the current fair
market value of such fractional share as determined in good faith
by the Board.
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(f)
Conversion
Price. The initial Conversion
Price is $4.75.
(g)
Adjustment to
Conversion Price by Reason of Stock Split, Stock Dividend,
Recapitalization, Merger, etc. In the event of any change in the outstanding
shares of Series C Preferred Stock or Common Stock of the
Corporation by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange of
shares or other similar change in the capital structure of the
Corporation, the Board shall make such equitable adjustments to the
Conversion Price as it determines, in its sole discretion, are
necessary and appropriate in order to preserve the intrinsic value
of the Series C Preferred Stock. Any such adjustments shall be set
forth in a written notice to the holders of Series C Preferred
Stock and shall be conclusive and binding on each
holder.
3.
Liquidation.
(a)
Upon any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary (a
“Liquidation”),
the holders of Series C Preferred Stock shall first be entitled to
receive, out of the assets of the Corporation available for
distribution to its stockholders, before any distribution or
payment is made or any asset distributed to the holders of Common
Stock, the Series A Preferred Stock, the Series B Preferred Stock
or any other class or series of stock ranking junior to the Series
C Preferred Stock, but subject to the rights of holders of any
other then outstanding shares of preferred stock, , to be paid an
amount equal to $9.50 for each and every share of Series C
Preferred Stock held by the holders of Series C Preferred Stock,
plus all accrued and unpaid dividends (the
“Series C Liquidation
Payment”).
(b)
If upon such Liquidation, the assets to be
distributed among the holders of Series C Preferred Stock shall be
insufficient to permit payment in full to the holders of Series C
Preferred Stock and the holders of any securities ranking
pari
passu as to liquidation rights
with the Series C Preferred Stock, then the assets available for
payment or distribution to such holders shall be allocated among
the holders of the Series C Preferred Stock and such holders of
securities pari
passu with the Series C
Preferred Stock in proportion to the full respective preferential
amounts to which each are entitled.
(c)
Upon a Liquidation, immediately after the holders
of Series C Preferred Stock have received the Series C Liquidation
Payment and the holders of securities ranking pari
passu with the Series C
Preferred Stock shall have been paid the amounts due to them upon a
Liquidation in full, then the amount of the remaining assets of the
Corporation legally available for distribution, if any, shall be
distributed among the holders of the Series A Preferred Stock, the
Series B Preferred Stock and any other class or series of stock
ranking junior to the Series C Preferred Stock in accordance with
their respective priorities.
(d)
After
full payment of the Series C Liquidation Payment as set forth
above, such shares of Series C Preferred Stock shall no longer be
deemed to be outstanding and the holders thereof shall have no
further rights as holders of Series C Preferred Stock.
4.
Voting.
(a)
Except
as otherwise provided herein or as otherwise required by law, the
Series C Preferred Stock shall have no voting rights. However, as
long as any shares of Series C Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote of the holders
of a majority of the then outstanding shares of the Series C
Preferred Stock alter or change adversely the powers, preferences
or rights given to the Series C Preferred Stock or alter or amend
this Certificate of Designation.
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5.
Dividends.
(a)
Commencing
on the date of the initial issuance of the Series C Preferred
Stock, a holder of record of shares of Series C Preferred Stock
shall be entitled to receive, out of any funds at the time legally
available therefor, a cash dividend at the per annum rate of an
amount equal to the product of six percent (6%) and $9.50 per share
of the Series C Preferred Stock owned by such holder, subject to
adjustment in the event of a stock dividend stock split or other
similar event. Dividends on the Series C Preferred Stock shall be
cumulative, shall accrue and shall be payable to holders quarterly
in arrears, on or about the last day of March, June, September and
December of each year, commencing September 30, 2018, or, if such
day is not a business day, on either the immediately preceding
business day or next succeeding business day at the
Corporation’s option, except that, if such business day is in
the next succeeding year, such payment shall be made on the
immediately preceding business day, in each case with the same
force and effect as if made on such date. The term “business
day” means each day, other than a Saturday or a Sunday, which
is not a day on which banks in New York are required to
close.
(b)
Dividends on the Series C Preferred Stock are
prior and in preference to any declaration or payment of any
distribution on any outstanding shares of Common Stock, the Series
A Preferred Stock or any other class or series of stock ranking
junior to the Series C Preferred Stock and pari
passu to any declaration or
payment of any distribution on any outstanding shares of Series B
Preferred Stock or any other class or series of stock
ranking pari
passu to the Series C Preferred
Stock with respect to dividends. Such dividends shall accrue on
each share of Series C Preferred Stock whether or not earned or
declared. In the case of Series C Preferred Stock outstanding for
less than a full quarter, dividends shall be pro
rata based on the portion of
the quarter during which such shares are outstanding. If the cash
to be distributed among the holders of Series C Preferred Stock
shall be insufficient to permit payment in full to the holders of
Series C Preferred Stock, the holders of the Series B Preferred
Stock and the holders of any other securities ranking
pari
passu as to dividend rights
with the Series C Preferred Stock, then the cash available for
payment or distribution to such holders shall be allocated among
the holders of the Series C Preferred Stock and such holders of
securities pari
passu with the Series C
Preferred Stock in proportion to the full respective preferential
amounts to which each are entitled.
(c)
So
long as any shares of Series C Preferred Stock are outstanding, the
Corporation shall not declare, pay or set apart for payment any
dividend or make any distribution on Common Stock or other class or
series of stock ranking junior as to dividends to the Series C
Preferred Stock (other than dividends or distributions payable in
additional shares of junior stock), unless at the time of such
dividend or distribution the Corporation shall have paid all
accrued and unpaid dividends on the outstanding shares of Series C
Preferred Stock.
(d)
Notwithstanding
the foregoing, if the aggregate amount of dividends then accrued
and payable to a holder is less than $10.00, the Corporation may,
at its option, retain and not make payment in respect of such
dividends until the aggregate amount of dividends then accrued and
payable to the holder is not less than $10.00.
6.
Mandatory Redemption by the Corporation.
(a)
In the event the average of the daily volume
weighted average price of the Common Stock as reported by Bloomberg
L.P. for the thirty (30) day Trading Period preceding the two year
anniversary of the original issuance date of the Series C Preferred
Stock is less than $6.00 (as adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar
transactions occurring after the original issuance date of the
Series C Preferred Stock), subject to Section 6(d), the Corporation
shall redeem each outstanding share of Series C Preferred Stock for
a redemption price of $9.50 per share plus all accrued and unpaid
dividends (the “Redemption
Price”).
(b)
The
Corporation shall provide notice of any redemption by the
Corporation under subparagraph 6(a), specifying the time and place
of redemption and the redemption price, by first class or
registered mail, postage prepaid, return receipt requested, to the
applicable holder of record of Series C Preferred Stock at the
address for such holder last shown on the records of the transfer
agent therefor (or the records of the Corporation, if it serves as
its own transfer agent), not less than ten (10) days prior to each
redemption date.
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(c)
If the funds of the
Corporation legally available for redemption by the holder of the
Series C Preferred Stock pursuant to Section 6(a) on any redemption
date are insufficient to redeem all shares of the Series C
Preferred Stock being redeemed by the Corporation on such date,
those funds which are legally available will be used first to
redeem, on a pro rata basis from
the holders thereof based on the number of shares of Series C
Preferred Stock then held, the maximum possible number of shares of
the Series C Preferred Stock being redeemed in accordance with the
aggregate redemption proceeds payable with respect to the shares of
Series C Preferred Stock to be redeemed. At any time thereafter
when additional funds of the Corporation become legally available
for the redemption of the Series C Preferred Stock, such funds will
be used to redeem the balance of the shares of Series C Preferred
Stock which the Corporation was theretofore obligated to redeem as
provided in the immediately preceding sentence. Any shares of
Series C Preferred Stock which are not redeemed as a result of the
circumstances described in this Section 6(c) shall remain
outstanding until such shares shall have been redeemed and the
redemption price therefor, as applicable, shall have been paid or
set aside by the Corporation, separate and apart from its other
funds in trust for the pro rata benefit of the holders of the
shares Series C Preferred Stock to be redeemed, so as to be, and to
continue to be available.
(d)
Upon irrevocable deposit in trust by the
Corporation for holders of the Series C Preferred Stock being
redeemed pursuant to this Section 6(d)
of an amount in cash equal to the
redemption price for the shares of Series C Preferred Stock being
redeemed on any redemption date or payment of the Redemption Price
to such holders, each holder of Series C Preferred Stock will cease
to have any rights as a stockholder of the Corporation by reason of
the ownership of such redeemed shares of Series C Preferred Stock
(except for the right to receive the Redemption Price therefor upon
the surrender of the certificate or certificates representing the
redeemed shares if such certificate or certificates have not been
surrendered), and such redeemed shares of Series C Preferred Stock
will not from and after the date of payment in full of the
redemption price therefor be deemed to be
outstanding.
(e)
At any time after the receipt by a holder of a
notice of redemption from the Corporation pursuant to
Section
6(b) and prior to receipt of
the Redemption Price therefor (or, if later, the time of redemption
specified in the notice delivered pursuant to Section
6(b)), such holder shall be
permitted to convert any or all of its Series C Preferred Stock,
including any shares subject to a redemption notice, in the manner
contemplated by Section
2.
(f)
Effective immediately prior to the close of
business on the redemption date for any shares of Series C
Preferred Stock redeemed pursuant to this Section
6, dividends shall no longer
accrue or be declared on any such shares of Series C Preferred
Stock, and such shares of Series C Preferred Stock shall cease to
be outstanding.
(g)
Shares of Series C Preferred Stock redeemed in
accordance with this Section
6, shall return to the status
of and constitute authorized but unissued shares of Preferred
Stock, without classification as to series until such shares are
once more classified as a particular series by the Board of
Directors pursuant to the provisions of the Certificate of
Incorporation.
RESOLVED, that the officers of
the Corporation are authorized to file with the Secretary of State
of Delaware a Certificate of Designation providing for the issuance
of the series of stock designated in the foregoing resolution and
that each of the officers of the Corporation is individually
authorized, empowered and directed, in the name and on behalf of
the Corporation, to take all such further actions and execute and
deliver all such further documents and instruments as such officer
may approve as necessary or desirable to carry out the intent and
purpose of the foregoing resolutions, the taking of any action or
the execution and delivery of any document or instrument by that
officer to be conclusive evidence of that
approval.
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