Blueprint





  Exhibit
4.1






 







CERTIFICATE OF DESIGNATIONS

 


OF

 


ENDRA
LIFE SCIENCES INC.

 



SERIES A CONVERTIBLE PREFERRED STOCK

 


THE
UNDERSIGNED, the President and Chief Executive Officer of ENDRA
Life Sciences Inc., a Delaware corporation (hereinafter called the
“Corporation”),
DOES HEREBY CERTIFY that the following resolution has been duly
adopted by the Board of Directors of the Corporation on 2,
2019:

 


RESOLVED, that pursuant to the authority
expressly granted to and vested in the Board of Directors of the
Corporation (the “Board of
Directors”) by the provisions of Article
FOURTH of the
Certificate of Incorporation of the Corporation and Section 151(g)
of the General Corporation Law of the State of Delaware (the
“DGCL”), the
Board of Directors hereby creates and designates a series of
preferred stock, par value $0.0001 per share, of the Corporation
and authorizes the issuance thereof, and hereby fixes the
designation and amount thereof and the powers, preferences, and
relative rights thereof as follows:

 




1.

Designation;
Number of Shares.





 


The
designation of said series of the Preferred Stock shall be
“Series A Convertible Preferred Stock” (the
“Series A
Preferred Stock”). The number of authorized shares of
Series A Preferred Stock shall be 10,000.

 




2.

Dividend
Rights.





 


The
holders of Series A Preferred Stock shall be entitled to receive
as, when, and if declared by the Board of Directors, out of funds
legally available therefor, dividends at an annual rate equal to
6.0% of the Original Series A Issue Price per share for each of the
then outstanding shares of Series A Preferred Stock, calculated on
the basis of a 360-day year consisting of twelve 30-day months,
compounding annually. Such dividends shall begin to accrue and
shall accumulate (to the extent not otherwise declared and paid as
set forth above) on each share of Series A Preferred Stock, from
the date of issuance of such share of Series A Preferred Stock (the
“Original
Issue Date”), whether or not declared. So long as any
shares of Series A Preferred Stock are outstanding, no dividends
shall be paid or declared and set apart for payment upon the Junior
Securities by the Corporation.

 




3.

Liquidation
Rights.





 

(a) In
the event of any liquidation, dissolution, or winding up of the
Corporation, either voluntary or involuntary (a “Liquidation
Event”), or any Sale of the Corporation the holders of
Series A Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the
Corporation to the holders of the Corporation’s common stock,
par value $0.0001 per share (“Common Stock”)
or any other series of the Corporation’s preferred stock that
is junior to the Series A Preferred Stock (collectively, the
“Junior
Securities”), the greater of (i) an amount per share
equal to $1,000 for each outstanding share of Series A Preferred
Stock (the “Original Series A Issue
Price”), plus an amount equal to all accrued but
unpaid dividends thereon, and (ii) such amount per share as would
have been payable had all Shares of Series A Preferred Stock been
converted into Common Stock pursuant to Section 5(a) hereof immediately prior to such
Liquidation Event or Sale of the Corporation; provided, however,
that the Series A Preferred Stock must be tendered for cancellation
in connection with a payment pursuant to a Sale of the Corporation.
If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series A Preferred Stock shall
be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then the entire assets and funds of
the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series A Preferred
Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive.

 

(b) Upon the completion
of the distribution required by subparagraph (a) of this Section
3 and any other distribution that may
be required with respect to any other series of preferred stock
that may from time to time come into existence, the remaining
assets of the Corporation available for distribution to
stockholders shall be distributed among the holders of Junior
Securities.

 

(c) For purposes of
this Section 3, “Sale of the
Corporation” means

 

(i) a transaction or
series of related transactions with one or more non-affiliates,
pursuant to which such non-affiliate(s) acquires capital stock of
the Corporation or the surviving entity possessing the voting power
to elect a majority of the board of directors or managers or a
majority of the outstanding capital stock of the Corporation or
other equity interests in the surviving entity (whether by merger,
consolidation, sale or transfer of the Corporation’s
outstanding capital stock or otherwise); or

 



 







 





 

(ii) the
sale, lease or other disposition (including exclusive license) of
all or substantially all of the Corporation’s assets or any
other transaction resulting in all or substantially all of the
Corporation’s assets being converted into securities of any
other entity or cash; provided, however, that the sale by the
Corporation of capital stock for the purpose of financing its
business shall not be deemed to be a Sale of the
Corporation.

 


provided,
however, that any transaction or series of related transactions
described in this Section 3(c) will not constitute a Sale of the
Corporation if immediately prior to such Sale of the Corporation,
holders of a majority of the outstanding shares of Series A
Preferred Stock shall have waived such Sale of the
Corporation.

 




4.

Voting
Rights.





 


The
holders of shares of Series A Preferred Stock shall vote with
holders of the Common Stock, and with any other shares of preferred
stock that vote with the Common Stock, with each holder of Series A
Preferred Stock being entitled to a number of votes equal to the
number of shares of Common Stock to which such holder would be
entitled upon the conversion of its Series A Preferred Stock after
giving full effect to the Beneficial Ownership Limitation subject
to, and in accordance with, Section 5. Fractional votes, however,
shall not be permitted and any fractional voting rights resulting
from the above with respect to any holder of Series A Preferred
Stock shall be rounded upward to the nearest whole number unless
such rounding would result in the Beneficial Ownership Limitation
being surpassed, in which case, fractional votes shall be rounded
downwards to the nearest whole number. Notwithstanding the
foregoing, the holders of shares of Series A Preferred Stock shall
vote as a single class upon any action that would adversely alter,
change or otherwise affect the powers, preferences or special
rights of such holders and the affirmative vote of the holders of a
majority of the voting power of Series A Preferred Stock shall be
required for the approval of any such action.

 




5.

Conversion Rights.





 


The
holders of the Series A Preferred Stock shall have conversion
rights as follows (the “Conversion
Rights”):

 

(a) Optional. Each share of Series A
Preferred Stock shall be convertible, at the option of the holder
thereof, at any time. The number of shares of Common Stock to which
a holder of Series A Preferred Stock shall be entitled upon
conversion shall be the product obtained by multiplying the
Conversion Rate of the Series A Preferred Stock (determined as
provided in Subsection 5(c) below) by
the number of shares of Series A Preferred Stock being converted
(with any fractional shares being rounded up to the nearest whole
share).  Such conversion
shall be deemed to have been made immediately prior to the close of
business on the date of the surrender of the certificate or
certificates representing the shares of Series A Preferred Stock to
be converted in accordance with the procedures described in
Subsection 5(d) below (the
“Conversion
Date”).

 

(b) Automatic.

 

(i) If at any time (x)
the simple average of the Daily VWAP for ten (10) consecutive
Trading Days is greater than $1.74 and (y) there is an effective
registration statement registering under the Securities Act the
resale of the shares of Common Stock issuable upon conversion of
the Series A Preferred Stock to be converted pursuant to this
Subsection 5(b), the Corporation shall
have the right to deliver a written notice to all holders of Series
A Preferred Stock (an “Automatic Conversion
Notice” and the date such notice is delivered to such
holders, the “Automatic Conversion Notice
Date”) to cause each holder to convert all or part of
such holder’s Series A Preferred Stock (in accordance with
the procedures described in the second sentence of Subsection 5(a)
above and Subsection 5(d) below) pursuant to this Subsection
5(b), it being agreed that the
“Conversion
Date” for purposes of Subsection 5(b) shall be deemed
to occur on the third Trading Day following the Automatic
Conversion Notice Date.

 

(ii) The
dollar amount set forth in Subsection 5(b)(i) above shall be
subject to adjustment in the same manner as the Conversion Price
pursuant to Subsections 5(f)(i) and
5(f)(ii) below.

 

(iii) “Trading
Day” means a day on which the principal Trading Market
is open for trading, or if the Common Stock is not listed or quoted
on any Trading Market, “Trading Day” means a
“Business Day”.

 

(iv) “Trading
Market” means
any of the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market or the New York Stock Exchange (or any
successors to any of the foregoing).

 

(v) “Closing Price”
means, for any date, the closing price for the Common Stock
published by the principal Trading Market.

 


(vi) “Daily VWAP”
means for each Trading Day, the per share volume-weighted average
price of the Common Stock as displayed under the heading
“Bloomberg VWAP” on Bloomberg page “NDRA
<equity> AQR” (or its equivalent successor if such page
is not available) in respect of the period from the scheduled open
of trading until the scheduled close of trading of the primary
trading session on such Trading Day (or if such volume-weighted
average price is unavailable, the market value of one share of the
Common Stock on such Trading Day determined, using a
volume-weighted average method, by a nationally recognized
independent investment banking firm retained for this purpose by
the Company). The “Daily VWAP” will be determined
without regard to after-hours trading or any other trading outside
of the regular trading session trading hours.

 



 







 





 

(c) Conversion Rate. Subject to the
provisions of this Section 5, the
conversion rate in effect at any time with respect to a share of
Series A Preferred Stock (the “Conversion
Rate”) shall be the quotient obtained by dividing the
Original Series A Issue Price, plus an amount equal to all accrued
but unpaid dividends thereon, by the Conversion Price. The
“Conversion
Price” shall initially be $0.87 and shall be subject
to adjustments as set forth in this Section 5.

 

(d) Mechanics of Conversion. Before any
holder of Series A Preferred Stock shall be entitled to receive
certificates representing the shares of Common Stock into which
shares of Series A Preferred Stock are converted in accordance with
Subsection 5(a) or 5(b) above, such holder shall surrender the
certificate or certificates for such shares of Series A Preferred
Stock duly endorsed at (or in the case of any lost, mislaid, stolen
or destroyed certificate(s) for such shares, deliver an affidavit
as to the loss of such certificate(s), in such form as the
Corporation may reasonably require) the office of the Corporation
or of any transfer agent for the Series A Preferred Stock, and
shall give written notice to the Corporation at such office of the
name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued, if different
from the name shown on the books and records of the Corporation.
Said conversion notice shall also contain such representations as
may reasonably be required by the Corporation to the effect that
the shares to be received upon conversion are not being acquired
and will not be transferred in any way that might violate the then
applicable securities laws. The Corporation shall, as soon as
practicable thereafter and in no event later than three (3)
business days after the delivery of said certificates, issue and
deliver at such office to such holder of Series A Preferred Stock,
or to the nominee or nominees of such holder as provided in such
notice, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid.
The person or persons entitled to receive the shares of Common
Stock issuable upon a conversion pursuant to Section 5(a) or 5(b)
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock as of the Conversion Date. For the
avoidance of doubt, accumulated and unpaid dividends on shares of
Series A Preferred Stock shall not be required to be paid upon
conversion and upon such conversion any and all rights to such
accumulated and unpaid dividends shall be cancelled and forfeited.
All certificates issued upon the exercise or occurrence of the
conversion shall contain a legend governing restrictions upon such
shares imposed by law or agreement of the holder or his or its
predecessors.

 

(e) Conversion Limitation. The Corporation
shall not effect any conversion of shares of Series A Preferred
Stock held by a holder of Series A Preferred Stock (a
“Holder”), and
a Holder shall not have the right to convert any shares of Series A
Preferred Stock, pursuant to this Section 5 or otherwise, to the extent that after
giving effect to such issuance after conversion, the Holder
(together with the Holder’s Affiliates (as defined below),
and any other persons acting as a group together with the Holder or
any of the Holder’s Affiliates), 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 the Holder and its Affiliates
shall include the number of shares of Common Stock issuable upon
conversion of such Holder or any of its Affiliate’s shares of
Series A Preferred Stock up to the Beneficial Ownership Limitation,
but shall exclude the number of shares of Common Stock which would
be issuable upon (i) conversion of the remaining shares of Series A
Preferred Stock beneficially owned by the Holder or any of its
Affiliates and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Corporation
(including, without limitation, any other common stock equivalents)
subject to a limitation on conversion or exercise 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 5(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”)
and the rules and regulations promulgated thereunder. To the extent
that the limitation contained in this Section 5(e) applies, the determination of the extent
to which a Holder’s shares of Series A Preferred Stock (in
relation to other securities owned by the Holder together with any
Affiliates) are convertible shall be in the sole discretion of the
Holder, and the submission of a notice of conversion shall be
deemed to be the Holder’s determination of whether such
Holder’s shares of Series A Preferred Stock are convertible
(in relation to other securities owned by the Holder together with
any Affiliates), in each case subject to the Beneficial Ownership
Limitation, 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 5(e), in determining the
number of outstanding shares of Common Stock, Holder may rely on
the number of outstanding shares of Common Stock as reflected in
(A) the Corporation’s most recent periodic or annual report
filed with the U.S. Securities and Exchange Commission (the
“SEC”), as the
case may be, (B) a more recent public announcement by the
Corporation or (C) a more recent written notice by the Corporation
or the Corporation’s transfer agent setting forth the number
of shares of Common Stock 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 shares of Series A 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 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 the
shares of Series A Preferred Stock being converted. The Holder,
upon not less than 61 days’ prior notice to the Corporation,
may increase the Beneficial Ownership Limitation provisions of this
Section 5(e). Any such increase will
not be effective until the 61st day after such notice is delivered
to the Corporation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
“Affiliate”
means any person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a person as such terms are used in and construed under
Rule 405 under the Securities Act of 1933.

 



 







 





 

(f) Conversion Price Adjustments of Preferred
Stock for Splits and Combinations. The Conversion Price and
the Automatic Conversion Price of the Series A Preferred Stock
shall be subject to adjustment from time to time as
follows:

 

(i) In the event
the Corporation should at any time or from time to time after the
Original Issue Date fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or
the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of
Common Stock or common stock equivalents without payment of any
consideration by such holder for the additional shares of Common
Stock or common stock equivalents (including the additional shares
of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the
Conversion Price and the Automatic Conversion Price of the Series A
Preferred Stock shall be appropriately decreased so that the number
of shares of Common Stock issuable on conversion of each share of
such series shall be increased in proportion to such increase of
the aggregate of shares of Common Stock outstanding and those
issuable with respect to such common stock
equivalents.

 

(ii) If the number of shares of
Common Stock outstanding at any time after the Original Issue Date
is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date of such combination, the
Conversion Price and the Automatic Conversion Price for the Series
A Preferred Stock shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of each
share of such series shall be decreased in proportion to such
decrease in outstanding shares.

 

(g) Other Distributions. In the event the
Corporation shall declare a distribution payable in securities of
other persons, evidences of indebtedness issued by the Corporation
or other persons, assets (excluding cash dividends) or options or
rights, then, in each such case for the purpose of this subsection
5(g), the holders of the Series A
Preferred Stock shall be entitled to a proportionate share of any
such distribution as though they were the holders of the number of
shares of Common Stock of the Corporation into which their shares
of Series A Preferred Stock are convertible as of the record date
fixed for the determination of the holders of Common Stock of the
Corporation entitled to receive such distribution.

 

(h) Recapitalizations and Mergers. If at
any time or from time to time there shall be a recapitalization of
the Common Stock (other than a subdivision, common stock dividend,
combination or sale of assets transaction provided for elsewhere in
this Section 5 or Section 3) or, subject to Section 3, merger in which
the Corporation is not the surviving corporation (a
“Transaction”),
provision shall be made so that the holders of the Series A
Preferred Stock or the other shares into which such shares are
converted shall thereafter be entitled to receive upon conversion
of the Series A Preferred Stock or the other shares into which such
shares are converted the number of shares of stock or other
securities or property of the Corporation or otherwise, to which a
holder of Common Stock deliverable upon conversion would have been
entitled in connection with such Transaction. In any such case,
appropriate adjustment shall be made in the application of the
provisions of this Section 5 with
respect to the rights of the holders of the Series A Preferred
Stock after the Transaction to the end that the provisions of this
Section 5 (including adjustment of the
Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series A Preferred Stock) shall
be applicable after that event as nearly equivalent as may be
practicable.

 

(i) No Impairment. The Corporation shall
not, by amendment of its Certificate of Incorporation or Bylaws or
through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed
hereunder by the Corporation, but shall at all times in good faith
assist in the carrying out of all the provisions of this Section
5 and in the taking of all such action
as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock
against impairment.

 

(j) Certificate Regarding Adjustments. Upon
the occurrence of each adjustment or readjustment of the Conversion
Price pursuant to this Section 5, the
Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock a certificate
setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any
holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price and the
Conversion Rate at that time in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property
that at that time would be received upon the conversion of Series A
Preferred Stock.

 



 







 





 

(k) Notices of Record Date. In the event of
any taking by the Corporation of a record of the holders of any
class of securities other than Series A Preferred Stock for the
purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, any common stock
equivalents or any right to subscribe for, purchase, or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right other than to vote or to
receive notice of a meeting (which shall be given to the holders of
Series A Preferred Stock in accordance with applicable law), the
Corporation shall mail to each holder of Series A Preferred Stock,
at least twenty (20) and, in any event, no more than sixty (60)
days before the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of
such dividend, distribution, or rights, and the amount and
character of such dividend, distribution, or rights.

 

(l) Reservation of Stock Issuable Upon
Conversion. 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 the
shares of the Series A Preferred Stock such number of its shares of
Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series A Preferred
Stock; and if at any time the number of authorized but unissued
shares of Common Stock shall be insufficient to effect the
conversion of all then outstanding shares of the Series A Preferred
Stock, the Corporation shall take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.

 




6.

Notices.





 


Without
limiting the manner by which notice otherwise may be given
effectively to stockholders, any notice to the holders of Series A
Preferred Stock given by the Corporation under any provision of the
DGCL, the Certificate of Incorporation, or the bylaws may be given
in writing directed to the stockholder’s mailing address (or
by electronic transmission directed to the stockholder’s
electronic mail address, as applicable) as it appears on the
records of the Corporation and shall be given (1) if mailed, when
the notice is deposited in the U.S. mail, postage prepaid, (2) if
delivered by courier service, the earlier of when the notice is
received or left at such stockholder’s address or (3) if
given by electronic mail, when directed to such stockholder’s
electronic mail address unless the stockholder has notified the
Corporation in writing or by electronic transmission of an
objection to receiving notice by electronic mail or the giving of
notice by electronic transmission is otherwise prohibited by the
DGCL.

 




7.

Waiver.





 


Any of
the rights, powers, preferences and other terms of the Series A
Preferred Stock set forth herein, including without limitation, any
notice requirements may be waived (or shortened in the case of the
time period for notices) on behalf of all holders of Series A
Preferred Stock by the affirmative written consent or vote of the
holders of at least a majority in voting power of the shares of
Series A Preferred Stock then outstanding.

 








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IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be made under the seal of the Corporation and
signed and attested by its duly authorized officer on December 11,
2019.

 


	

 

	ENDRA LIFE SCIENCES
INC.	

 


	

 

	

 

	

 

	

 


	

	
By:  

	
/s/ 

	

 


	

 

	

 

	
Name 

	

 


	

 

	

 

	

Title