Exhibit
4.12


 


DESCRIPTION
OF SONNET BIOTHERAPEUTICS HOLDINGS, INC.’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934


 


As
of December 31, 2019, Sonnet BioTherapeutics Holdings, Inc. (“us,” “our,” “we” or the “Company”)
had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our voting common
stock, $0.0001 par value per share.


 


DESCRIPTION
OF CAPITAL STOCK


 


The
following is a summary of information concerning capital stock of the Company and certain provisions of our amended and restated
certificate of incorporation and amended and restated bylaws currently in effect. This summary does not purport to be complete
and is qualified in its entirety by the provisions of our certificate of incorporation, as amended (the “Certificate of
Incorporation”) and bylaws, as amended (the “Bylaws”), each previously filed with the Securities and Exchange
Commission (“SEC”) and incorporated by reference as an exhibit to the Annual Report on Form 10-K, as well as to the
applicable provisions of the Delaware General Corporation Law (the “DGCL”). We encourage you to read our Certificate
of Incorporation, Bylaws and the applicable portions of the DGCL carefully.


 


General


 


Our
authorized capital stock consists of:


 


		●	125,000,000
                                         shares of common stock, par value $0.0001 per share; and



 


		●	5,000,000
                                         shares of preferred stock, par value $0.0001 per share. 



 


Common
Stock


 


 Holders of our Common
Stock are each entitled to cast one vote for each share held of record on all matters presented to stockholders. Cumulative voting
is not allowed; the holders of a majority of our outstanding shares of Common Stock may elect all directors. Holders of our
Common Stock are entitled to receive such dividends as may be declared by our board out of funds legally available and, in the
event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities. Our directors are not
obligated to declare a dividend. It is not anticipated that we will pau dividends in the foreseeable future. Holders of our do
not have preemptive rights to subscribe to any additional shares we may issue in the future. There are no conversion, redemption,
sinking fund or similar provisions regarding the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable.







 


The
rights, preferences and privileges of holders of Common Stock are subject to the rights of the holders of any outstanding shares
of preferred stock.


 


Preferred
Stock


 





We
may issue up to 5,000,000 shares of preferred stock, no par value, in one or more series. Our board of directors is hereby expressly
authorized to provide, out of the unissued shares of preferred stock, for one or more series of preferred stock and, with respect
to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers,
if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any,
and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative,
participating, optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any time outstanding.


 


The
issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of Common
Stock or adversely affect the rights and powers, including voting rights, of the holders of Common Stock. The issuance of preferred
stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things,
have the effect of delaying, deferring or preventing a change in control of Sonnet, which could depress the market price of our
Common Stock.


 



    	 



     


    




 


Anti-Takeover
Effects of Certain Provisions of Delaware Law and Our Certificate of Incorporation and Bylaws


 


Our
Certificate of Incorporation and Bylaws contain provisions that could have the effect of discouraging potential acquisition proposals
or tender offers or delaying or preventing a change of control. These provisions are as follows:


 


	 	●	they provide that special meetings of stockholders may be called by the President, the board of directors or at the request by stockholders of record owning at least thirty-three and one-third (33 1/3%) percent of the issued and outstanding voting shares of our Common Stock;
	 	 	 
	 	●	they do not include a provision for cumulative voting in the election of directors. Under cumulative voting, a minority stockholder holding a sufficient number of shares may be able to ensure the election of one or more directors. The absence of cumulative voting may have the effect of limiting the ability of minority stockholders to effect changes in our board of directors; and
	 	 	 
	 	●	they allow us to issue, without stockholder approval, up to 5,000,000 shares of preferred stock that could adversely affect the rights and powers of the holders of our Common Stock.







 


We
are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. Subject to certain
exceptions, the statute prohibits a publicly held Delaware corporation from engaging in a “business combination” with
an “interested stockholder” for a period of three years after the date of the transaction in which the person became
an interested stockholder unless:


 


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



 


		●	upon
                                         consummation of the transaction which resulted in the stockholder becoming an interested
                                         stockholder, the interested stockholder owned at least eighty-five percent 85% of the
                                         voting stock of the corporation outstanding at the time the transaction commenced, excluding
                                         for purposes of determining the number of shares outstanding those shares owned (1) by
                                         persons who are directors and also officers and (2) by 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 after such date, the business combination is approved by the board of directors and
                                         authorized at an annual or special meeting of stockholders, and not by written consent,
                                         by the affirmative vote of at least sixty-six and two-thirds percent 66 2/3% of
                                         the outstanding voting stock that is not owned by the interested stockholder.



 


Generally,
for purposes of Section 203, a “business combination” includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together
with affiliates and associates, owns or, within three (3) years prior to the determination of interested stockholder status, owned
fifteen percent (15%) or more of a corporation’s outstanding voting securities.


 


Potential
Effects of Authorized but Unissued Stock


 


We
have shares of Common Stock and preferred stock available for future issuance without stockholder approval. We may utilize these
additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate
corporate acquisitions or payment as a dividend on the capital stock.


 


The
existence of unissued and unreserved Common Stock and preferred stock may enable our board of directors to issue shares to persons
friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party
attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity
of our management. In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges
and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences
of each series of preferred stock, all to the fullest extent permissible under the DGCL and subject to any limitations set forth
in our Certificate of Incorporation. The purpose of authorizing the board of directors to issue preferred stock and to determine
the rights and preferences applicable to such preferred stock is to eliminate delays associated with a stockholder vote on specific
issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible financings, acquisitions
and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage
a third-party from acquiring, a majority of our outstanding voting stock.


 


Transfer
Agent and Registrar


 





The
transfer agent and registrar for our Common Stock is Securities Transfer Corporation. The transfer agent address is Securities
Transfer Corporation, 2901 N Dallas Parkway, Suite 380, Plano, TX 75093, (469) 633-0101.