Item 3.03Material Modification to Rights of Security Holders.

On March 1, 2024, Smart for Life, Inc. (the "Company") filed a certificate of designation (the "Certificate of Designation") with the Nevada Secretary of State to create a new series of its preferred stock designated as series C preferred stock. Pursuant to the Certificate of Designation, the Company designated 20,000 shares of its preferred stock as series C preferred stock. Following is a summary of the material terms of the series C preferred stock:

● Dividend Rights. Holders of series C preferred stock are entitled to receive dividends in the same form as dividends paid on shares of the common stock only when and if such dividends are paid on shares of the common stock. No other dividends shall be paid on shares of series C preferred stock.
● Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series C preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the series C preferred stock were fully converted (disregarding for such purposes any conversion limitations) to common stock which amounts shall be paid prior to all holders of common stock and pari passu with all holders of the Company's series B preferred stock.
● Voting Rights. The series C preferred stock shall vote together with the common stock on an as-converted basis.
● Conversion Rights. Each share of series C preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into that number of shares of common stock determined by dividing the stated value of such share of series C preferred stock ($100) by the conversion price. The conversion price is $1.00 (subject to adjustments for stock dividends, stock splits, recapitalizations and certain fundamental transactions). Notwithstanding the foregoing, the Company shall not effect any conversion, and a holder shall not have the right to convert, any portion of the series C preferred stock to the extent that, after giving effect to the conversion, such holder (together with such holder's affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares issuable upon the conversion. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days' prior notice to the Company.
● No Redemption. The series C preferred stock is not redeemable.

Attachments

  • Original Link
  • Permalink

Disclaimer

Smart for Life Inc. published this content on 07 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 22:13:35 UTC.