Blueprint





 







Exhibit 4.1


 



CERTIFICATE OF DESIGNATION OF


 



PREFERENCES, RIGHTS AND LIMITAITONS OF


 



SERIES J PREFERRED STOCK OF


 



GT BIOPHARMA, INC.


 

 


GT
BIOPHARMA, INC. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY that, pursuant to authority conferred
upon the Board of Directors by the Second Restated Certificate of
Incorporation of the Corporation, as amended, and pursuant to the
provisions of Section 151 of the General Corporation Law of the
State of Delaware, the Board of Directors, by resolutions adopted
to be effective on September 1, 2017, duly determined that
2,000,000 of the authorized shares of Preferred Stock, $.001 par
value per share, of the Corporation shall be designated "Series J
Preferred Stock," and duly adopted a resolution providing for the
voting powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations and restrictions, of the Series J Preferred Stock,
which resolution is as follows:

 


"RESOLVED,
that the Board of Directors, pursuant to the authority vested in it
by the provisions of the Second Restated Certificate of
Incorporation of the Corporation, as amended, hereby authorizes the
issuance of 2,000,000 shares of Preferred Stock, $.001 par value,
of the Corporation, which shall be designated as "Series J
Preferred Stock" (the "Series J Preferred Stock") and shall have
the following designations, powers, preferences and relative,
participating, optional and other special rights, and the
qualifications, limitations and restrictions:

 


1.
Definitions.

 


As used
herein, the following terms shall have the following
meanings:

 


(a)
"Board" shall mean the Board of Directors of the
Corporation.

 


(b)
"Common Stock" shall mean the Corporation's common stock, par value
$.001 per share.

 


(c)
"Issuance Date" shall mean the date on which the first share of
Series J Preferred Stock is issued.

 


(d)
"Liquidation" shall mean any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation.

 


(e)
"Preferred Stock" shall mean the Corporation's preferred stock, par
value $.001 per share.

 


(f)
"Securities Act" shall mean the Securities Act of 1933, as
amended.

 




 

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2.
Rank. The Series J
Preferred Stock will rank on parity to any class or series of our
capital stock hereafter created specifically ranking by its terms
on parity with the Series J Preferred Stock.

 


3.
Dividends. Shares
of Series J Preferred Stock will not be entitled to receive any
dividends, unless and until specifically declared by our board of
directors. The holders of the Series J Preferred Stock will
participate, on an as-if-converted-to-common stock basis, in any
dividends to the holders of common stock.

 


4.
Voting Rights.
Shares of Series J Preferred Stock will have the same voting rights
as shares of common stock with each share of Series J Preferred
Stock entitled to one vote at a meeting of the shareholders of the
Corporation.

 


5.
Liquidation
Preference. In the event of our liquidation, dissolution or
winding up, holders of the Series J Preferred Stock will be on
parity with the holders of our common stock and will participate,
on an as-if-converted-to-common stock basis, in any distributions
to the holders of common stock.

 


6.
Conversion Rights.
The holders of shares of Series J Preferred Stock shall have the
following conversion rights:

 


A.
Conversion Rate. Each share
of the Series J Preferred Stock is convertible into one share of
our common stock at any time at the option of the holder (the
"Conversion Rate").

 


B.
Upon Extraordinary Common Stock
Event. Upon the happening of an Extraordinary Common Stock
Event, shares of Series J Preferred Stock shall be impacted in the
same way our shares of common stock were impacted by the
Extraordinary Common Stock Event. An "Extraordinary Common Stock
Event" shall mean: (i) the issuance of additional shares of Common
Stock as a dividend or other distribution on the outstanding shares
of Common Stock, (ii) the subdivision of outstanding shares of
Common Stock into a greater number of shares of Common Stock, or
(iii) the combination of the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, in each case other
than pursuant to a transaction provided for in Section 6C or
6D.

 


C.
Capital Reorganization or
Reclassification. If the shares of Common Stock issuable
upon conversion of Series J Preferred Stock shall be changed into
the same or a different number of shares of any class or classes of
stock, whether by reorganization, reclassification or otherwise
(other than a subdivision or combination of shares or stock
dividend provided for in Section 6B, or a reorganization, merger,
consolidation or sale of assets provided for in Section 6D), then
and in each such event, the holders of shares of Series J Preferred
Stock shall have the right thereafter to convert such shares into
the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or
other change by the holders of the number of shares of Common Stock
into which such shares of Series J Preferred Stock were convertible
immediately prior to such reorganization, reclassification or other
change, all subject to further adjustment as provided
herein.

 




 

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D.
Reorganization, Merger or
Consolidation. If at any time or from time to time there
shall be a reorganization, reclassification or recapitalization of
the capital stock (other than a subdivision, combination,
reorganization, reclassification or exchange of shares provided for
elsewhere in this Section 6) (a "Reorganization"), then as a part
of such Reorganization, provision shall be made so that each holder
of Series J Preferred Stock shall thereafter be entitled to receive
upon conversion of such shares of Series J Preferred Stock, the
number of shares of stock or other securities or property to which
a holder of the number of shares of Common Stock into which such
holder's shares of Series J Preferred Stock were convertible
immediately prior to such Reorganization would have been entitled
upon consummation of such Reorganization. In any such case,
appropriate adjustment shall be made in the application of the
provisions of this Section 6 with respect to the rights of the
holders of Series J Preferred Stock after the Reorganization to the
end that the provisions of this Section 6 (including adjustment of
the Conversion Value then in effect, and the number of shares of
Common Stock issuable upon conversion of the Series J Preferred
Stock) shall be applicable after that event in as nearly equivalent
a manner as may be practicable.

 


E.
Exercise of Conversion
Privilege. To exercise the conversion right set forth in
Section 6A, a holder of shares of Series J Preferred Stock shall
surrender the certificates representing the shares being converted
to the Corporation at its principal office, and shall give written
notice to the Corporation at that office that such holder elects to
convert such shares. Such notice shall also state the name or names
(with address or addresses) in which the certificates for shares of
Common Stock issuable upon such conversion shall be issued. The
certificates for shares of Series J Preferred Stock surrendered for
conversion shall be accompanied by proper assignment thereof to the
Corporation or in blank. The date when such written notice is
received by the Corporation, together with the certificates
representing the shares of Series J Preferred Stock being
converted, shall be deemed the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue
and deliver certificates to each holder of shares of Series J
Preferred Stock so converted, or on its written order, such
certificates as it may request, for the number of whole shares of
Common Stock issuable upon the conversion of such shares of Series
J Preferred Stock in accordance with the provisions of this Section
6, and cash as provided in Section 6K, in respect of any fraction
of a share of Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been effected immediately prior
to the close of business on the Conversion Date, and at such time
the rights of the holder as holder of the converted shares of
Series J Preferred Stock shall cease and the person or persons in
whose name or names any 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.

 


G.
Cash in Lieu of Fractional
Shares. No fractional shares of Common Stock or scrip
representing fractional shares shall be issued upon any conversion
of shares of Series J Preferred Stock. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon
conversion of shares of Series J Preferred Stock, the Corporation
shall pay to the holder of shares of Series J Preferred Stock which
were converted a cash adjustment in respect of such fractional
shares in an amount equal to the same fraction of the Market Price
per share of the Common Stock at the close of business on the
Conversion Date. The determination as to whether or not any
fractional shares are issuable shall be based upon the total number
of shares of Series J Preferred Stock so converted at any one time
by any holder thereof, and not upon each share of Series J
Preferred Stock so converted.

 




 

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H.
Partial Conversion. In the
event some but not all of the shares of Series J Preferred Stock
represented by a certificate surrendered by a holder are converted,
the Corporation shall execute and deliver to or on the order of the
holder, at the expense of the Corporation, a new certificate
representing the number of shares of Series J Preferred Stock which
were not converted.

 


I.
Reservation of Common
Stock. The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of shares
of Series J Preferred Stock, such number of shares of Common Stock
as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Series J Preferred Stock, and if at
any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series J Preferred Stock, the Corporation
shall take such corporate action as may be necessary to increase
its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purpose.

 


J.
No Reissuance of Series J
Preferred Stock. Shares of Series J Preferred Stock which
are converted into shares of Common Stock as provided herein shall
not be reissued.

 


K.
Issue Tax. The issuance of
certificates for shares of Common Stock upon conversion of any
shares of Series J Preferred Stock shall be made without charge to
the holders thereof for any issuance tax in respect thereof;
provided that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that
of the holder of the shares of Series J Preferred Stock which are
being converted.

 


L.
Closing of Books. The
Corporation will at no time close its transfer books against the
transfer of any shares of Series J Preferred Stock or of any shares
of Common Stock issued or issuable upon the conversion of any
shares of Series J Preferred Stock in any manner which interferes
with the timely conversion of such shares of Series J Preferred
Stock, except as may otherwise be required to comply with
applicable securities laws.

 




 

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M.
Beneficial Ownership Limitation. The Corporation shall not effect
any conversion of the Series J Preferred Stock, and a Holder shall
not have the right to convert any portion of the Preferred Stock,
to the extent that, after giving effect to the conversion set forth
on the applicable Notice of Conversion, such Holder (together with
such Holder's Affiliates, and any Persons acting as a group
together with such Holder or any of such 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 such Holder and its Affiliates and
Attribution Parties shall include the number of shares of Common
Stock issuable upon conversion of the Series J Preferred Stock with
respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted Stated Value of
Preferred Stock beneficially owned by such Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities
of the Corporation subject to a limitation on conversion or
exercise analogous to the limitation contained herein (including,
without limitation, the Preferred Stock or the Warrants)
beneficially owned by such Holder or any of its Affiliates or
Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 6M, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. To the extent
that the limitation contained in this Section 6M applies, the
determination of whether the Preferred Stock is convertible (in
relation to other securities owned by such Holder together with any
Affiliates and Attribution Parties) and of how many shares of
Preferred Stock are convertible shall be in the sole discretion of
such Holder, and the submission of a Notice of Conversion shall be
deemed to be such Holder's determination of whether the shares of
Preferred Stock may be converted (in relation to other securities
owned by such Holder together with any Affiliates and Attribution
Parties) and how many shares of the Preferred Stock are
convertible, in each case subject to the Beneficial Ownership
Limitation. To ensure compliance with this restriction, each Holder
will be deemed to represent to the Corporation each time it
delivers a Notice of Conversion that such Notice of Conversion has
not violated the restrictions set forth in this paragraph and the
Corporation shall have no obligation to verify or confirm the
accuracy of such determination. 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
6M, in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of
Common Stock as stated in the most recent of the following: (i) the
Corporation's most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public
announcement by the Corporation or (iii) a more recent written
notice by the Corporation or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or
oral request (which may be via email) of a Holder, the Corporation
shall within two Trading Days confirm orally and in writing to such
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 Corporation, including the Preferred Stock, by
such 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 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon conversion of Series J Preferred Stock held by the
applicable Holder. A Holder, upon notice to the Corporation, may
increase or decrease the Beneficial Ownership Limitation provisions
of this Section 6M applicable to its Preferred Stock provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon
conversion of this Series J Preferred Stock held by the Holder and
the provisions of this Section 6M shall continue to apply. Any such
increase in the Beneficial Ownership Limitation will not be
effective until the 61st day after such notice is delivered to the
Corporation and shall only apply to such Holder and no other
Holder. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 6M to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation contained herein or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of Preferred
Stock.

 




 

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7.
Miscellaneous.

 


(a) The
Corporation covenants that all shares of Common Stock which may be
issued upon conversions of shares of Series J Preferred Stock will
upon issuance be duly and validly issued, fully paid and
nonassessable, free of all liens and charges and not subject to any
preemptive rights.

 


(b) No
share or shares of Series J Preferred Stock acquired by the
Corporation by reason of redemption, purchase, conversion or
otherwise, shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares which the
Corporation shall be authorized to issue.

 


The
number of shares of Series J Preferred Stock is 2,000,000, none of
which have been issued.

 


IN
WITNESS WHEREOF, this Certificate of Designation has been signed by
an authorized officer of the Corporation as of the date first
written above.

 


By:

 


/s/
Steven Weldon

 


Name:
Steven Weldon

 


Title:
CFO

 




 

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