ndra_ex412





 






  Exhibit
4.12


 



DESCRIPTION OF ENDRA LIFE SCIENCES INC.’S
SECURITIES



REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF
1934


 


The
following information is a summary of information concerning the
securities of ENDRA Life Sciences Inc. (“Company,”
“we,” “our,” or “us”) and does
not purport to be complete. It is subject to and qualified in its
entirety by reference to our Fourth Amended and Restated
Certificate of Incorporation (the “Certificate of
Incorporation”), Amended and Restated Bylaws (the
“Bylaws”) and Form of Warrant Agreement, as applicable,
each of which are incorporated by reference as an exhibit to the
Annual Report on Form 10-K of which this Exhibit 4.12 is a
part.


 



Common Stock


 


The
Certificate of Incorporation authorizes the issuance of 80,000,000
shares of common stock, par value $0.0001 per share (the
“Common Stock”). Our authorized but unissued
shares of Common Stock are available for issuance without further
action by our stockholders, unless such action is required by
applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or
traded.


 



Voting


 


Each
holder of Common Stock is entitled to one vote for each such share
outstanding in the holder’s name. No holder of Common Stock
is entitled to cumulate votes in voting for directors.


 



Dividends and Liquidation Rights


 


The
holders of outstanding shares of our Common Stock are entitled to
such dividends as may be declared by our board of directors out of
funds legally available for such purpose. The shares of our Common
Stock are neither redeemable nor convertible. Holders of our Common
Stock have no preemptive or subscription rights to purchase any of
our securities. In the event of our liquidation, dissolution or
winding up, the holders of our Common Stock are entitled to receive
pro rata our assets, which are legally available for distribution,
after payments of all debts and other liabilities.  All
of the outstanding shares of our Common Stock are fully paid and
non-assessable.  


 


We have
never paid any cash dividends on our Common Stock.


 



Warrants


 



Form


 


The
warrants were issued as individual warrants to the investors, all
of which will be governed by a warrant agreement.


 



Exercisability


 


The
warrants are exercisable at any time up to the date that is five
years after their original issuance. The warrants are exercisable,
at the option of each holder, in whole or in part by delivering to
us a duly executed exercise notice and, at any time a registration
statement registering the issuance of the shares of Common Stock
underlying the warrants under the Securities Act is effective and
available for the issuance of such shares, or an exemption from
registration under the Securities Act is available for the issuance
of such shares, by payment in full in immediately available funds
for the number of shares of Common Stock purchased upon such
exercise. If a registration statement registering the issuance of
the shares of Common Stock underlying the warrants under the
Securities Act is not effective or available and an exemption from
registration under the Securities Act is not available for the
issuance of such shares, the holder may, in its sole discretion,
elect to exercise the warrant through a cashless exercise, in which
case the holder would receive upon such exercise the net number of
shares of Common Stock determined according to the formula set
forth in the warrant. No fractional shares of Common Stock will be
issued in connection with the exercise of a warrant. In lieu of
fractional shares, we will pay the holder an amount in cash equal
to the fractional amount multiplied by the exercise
price.


 



Exercise Limitation


 


A
holder does not have the right to exercise any portion of the
warrant if the holder (together with its affiliates) would
beneficially own in excess of 4.99% of the number of shares of our
Common Stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance
with the terms of the warrants. However, any holder may increase or
decrease such percentage to any other percentage not in excess of
9.99% upon at least 61 days’ prior notice from the holder to
us.


 




 








 






  






Exercise Price


 


The
warrants have an exercise price of $6.25 per share. The exercise
price is subject to appropriate adjustment in the event of certain
stock dividends and distributions, stock splits, stock
combinations, reclassifications or similar events affecting our
Common Stock and also upon any distributions of assets, including
cash, stock or other property to our stockholders.


 



Transferability


 


Subject
to applicable laws, the warrants may be offered for sale, sold,
transferred or assigned without our consent.


 



Fundamental Transactions


 


In the
event of a fundamental transaction, as described in the warrants
and generally including any reorganization, recapitalization or
reclassification of our Common Stock, the sale, transfer or other
disposition of all or substantially all of our properties or
assets, our consolidation or merger with or into another person,
the acquisition of more than 50% of our outstanding Common Stock,
or any person or group becoming the beneficial owner of 50% of the
voting power represented by our outstanding Common Stock, the
holders of the warrants are entitled to receive upon exercise of
the warrants the kind and amount of securities, cash or other
property that the holders would have received had they exercised
the warrants immediately prior to such fundamental
transaction.


 



Rights as a Stockholder


 


Except
as otherwise provided in the warrants or by virtue of such
holder’s ownership of shares of our Common Stock, the holder
of a warrant does not have the rights or privileges of a holder of
our Common Stock, including any voting rights, until the holder
exercises the warrant.


 



Waivers and Amendments


 


Subject
to certain exceptions, any term of the warrants may be amended or
waived with our written consent and the written consent of the
holders of at least two-thirds of the then-outstanding
warrants.


 



Authorized Preferred Stock and Anti-Takeover
Provisions


 



Authorized Preferred Stock


 


The
Certificate of Incorporation authorizes us to issue 10,000,000
shares of preferred stock, par value $0.0001 per share (“Preferred
Stock”). Our board of directors has designated 10,000 shares
of Preferred Stock as Series A Convertible Preferred
Stock and 1,000 shares
of Preferred Stock as Series B Convertible Preferred Stock. Our
authorized but unissued shares of Preferred Stock are available for
issuance without further action by our stockholders, unless such
action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities may
be listed or traded.


 


Our
board of directors has the authority to issue Preferred Stock in
one or more series and to fix the designations, powers, rights,
preferences, qualifications, limitations and restrictions thereof.
These designations, powers, rights and preferences could include
voting rights, dividend rights, dissolution rights, conversion
rights, exchange rights, redemption rights, liquidation
preferences, and the number of shares constituting any series or
the designation of such series, any or all of which may be greater
than the rights of Common Stock. The issuance of Preferred Stock
could adversely affect the voting power of holders of Common Stock
and the likelihood that such holders will receive dividend payments
and payments upon liquidation. In addition, the issuance of
Preferred Stock could have the effect of delaying, deferring or
preventing change in our control or other corporate
action.


 



Anti-Takeover Provisions


 


The
provisions of Delaware law, the Certificate of Incorporation and
the Bylaws could have the effect of delaying, deferring or
discouraging another person from acquiring control of us. These
provisions, which are summarized below, may have the effect of
discouraging takeover bids. They are also designed, in part, to
encourage persons seeking to acquire control of us to negotiate
first with our board of directors. We believe that the benefits of
increased protection of our potential ability to negotiate with an
unfriendly or unsolicited acquirer outweigh the disadvantages of
discouraging a proposal to acquire us because negotiation of these
proposals could result in an improvement of their
terms.


 




 








 






  






Delaware Law


 


We are
subject to Section 203 of the Delaware General Corporation Law
(the “DGCL”), an anti-takeover law. In general,
Section 203 prohibits a Delaware corporation from engaging in
any business combination (as defined below) with any interested
stockholder (as defined below) for a period of three years
following the date that the stockholder became an interested
stockholder, unless:


 




●

prior
to that date, the board of directors of the corporation approved
either the business combination or the transaction that resulted in
the stockholder becoming an interested stockholder;








●

upon
consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares of voting stock
outstanding (but not the voting stock owned by the interested
stockholder) those shares owned by persons who are directors and
officers and by excluding employee stock plans in which employee
participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a
tender or exchange offer; or








●

on
or subsequent to the time the business combination is approved by
the board of directors of the corporation and authorized at an
annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested
stockholder.






 


In
general, Section 203 defines “business combination” to
include the following:


 




●

any
merger or consolidation involving the corporation and the
interested stockholder;








●

any
sale, lease, exchange, mortgage, transfer, pledge or other
disposition of 10% or more of the assets of the corporation
involving the interested stockholder;








●

subject
to certain exceptions, any transaction that results in the issuance
or transfer by the corporation of any stock of the corporation to
the interested stockholder;








●

subject
to limited exceptions, any transaction involving the corporation
that has the effect of increasing the proportionate share of the
stock of any class or series of the corporation beneficially owned
by the interested stockholder; or








●

the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided
by or through the corporation.






 


Section
203 generally defines an interested stockholder as any entity or
person beneficially owning 15% or more of the outstanding voting
stock of the corporation, or who beneficially owns 15% or more of
the outstanding voting stock of the corporation at any time within
a three-year period immediately prior to the date of determining
whether such person is an interested stockholder, and any entity or
person affiliated with or controlling or controlled by any of these
entities or persons.



Certificate of Incorporation and Bylaw Provisions


 


The
Certificate of Incorporation and the Bylaws include a number of
provisions that could deter hostile takeovers or delay or prevent
changes in control of us. Certain of these provisions are
summarized in the following paragraphs.


 



Effects of authorized but unissued Common Stock.    


 


One of
the effects of the existence of authorized but unissued Common
Stock may be to enable our board of directors to make more
difficult or to discourage an attempt to obtain control of us by
means of a merger, tender offer, proxy contest or otherwise, and
thereby to protect the continuity of management. If, in the due
exercise of its fiduciary obligations, the board of directors were
to determine that a takeover proposal was not in our best interest,
such shares could be issued by the board of directors without
stockholder approval in one or more transactions that might prevent
or render more difficult or costly the completion of the takeover
transaction by diluting the voting or other rights of the proposed
acquirer or insurgent stockholder group, by putting a substantial
voting block in institutional or other hands that might undertake
to support the position of the incumbent board of directors, by
effecting an acquisition that might complicate or preclude the
takeover, or otherwise.


 



Cumulative Voting.    


 


The
Certificate of Incorporation does not provide for cumulative voting
in the election of directors, which would allow holders of less
than a majority of the stock to elect some directors.


 



Director Vacancies.    


 


The
Certificate of Incorporation provides that all vacancies may be
filled only by the affirmative vote of a majority of directors then
in office, even if less than a quorum.


 




 








 






  




Stockholder Action; Special Meeting of
Stockholders.    


 


The
Bylaws provide that stockholders may act by written consent.
However, stockholders pursuing an action by written consent will be
required to comply with certain notice and record date requirements
that are set forth in the DGCL. A special meeting of stockholders
may be called by the Chairman of the board of directors, the
President, the Chief Executive Officer, or a majority of the board
of directors at any time and for any purpose or purposes as shall
be stated in the notice of the meeting, or by request of the
holders of record of at least 20% of outstanding shares of Common
Stock. This provision could prevent stockholders from calling a
special meeting because, unless certain significant stockholders
were to join with them, they might not obtain the percentage
necessary to request the meeting. Therefore, stockholders holding
less than 20% of issued and outstanding Common Stock, without the
assistance of management, may be unable to propose a vote on any
transaction which may delay, defer or prevent a change of control,
even if the transaction were in the best interests of our
stockholders.


 



Advance Notice Requirements for Stockholder Proposals and Director
Nominations.    


 


The
Bylaws establish advance notice procedures with respect to
stockholder proposals and the nomination of candidates for election
as director. In order for any matter to be “properly
brought” before a meeting, a stockholder will have to comply
with such advance notice procedures and provide us with certain
information. The Bylaws allow the presiding officer at a meeting of
stockholders to adopt rules and regulations for the conduct of
meetings which may have the effect of precluding the conduct of
certain business at a meeting if such rules and regulations are not
followed. These provisions may also defer, delay or discourage a
potential acquirer from conducting a solicitation of proxies to
elect the acquirer’s own slate of directors or otherwise
attempting to influence or obtain control of us.


 



Supermajority Voting for Amendments to Our Governing
Documents.    


 


Any
amendment to the Certificate of Incorporation requires the
affirmative vote of at least 66 2/3% of the voting power of all
shares of our capital stock then outstanding. The Certificate of
Incorporation provides that the board of directors is expressly
authorized to adopt, amend or repeal the Bylaws and that our
stockholders may amend the Bylaws only with the approval of at
least 66 2/3% of the voting power of all shares of our capital
stock then outstanding.


 



Choice of Forum.    


 


The
Certificate of Incorporation provides that, subject to certain
exceptions, the Court of Chancery of the State of Delaware will be
the exclusive forum for any claim, including any derivative claim,
(i) that is based upon a violation of a duty by a current or
former director or officer or stockholder in such capacity or
(ii) as to which the DGCL, or any other provision of Title 8
of the Delaware Code, confers jurisdiction upon the Court of
Chancery.