Attached files
Exhibit 4.2
Description of the Registrant’s Securities
Registered Pursuant to Section 12 of the
Securities Exchange Act of 1934
As
of December 31, 2019, Celcuity Inc. (the “Company”) had
one class of securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”): Common Stock.
Description of Common Stock
The
following description of the Company’s Common Stock is a
summary and does not purport to be complete. It is subject to and
qualified in its entirety by reference to the Company’s
Certificate of Incorporation, as amended to date (the
“Certificate of Incorporation”), and the Bylaws (the
“Bylaws”), each of which is incorporated by reference
as an exhibit to the Annual Report on Form 10-K to which this
description is also an exhibit.
Authorized Capitalization
The
Company’s authorized capital stock consists of (i) 25,000,000
shares of common stock, par value $0.001 per share (the
“Common Stock”) and (ii) 2,500,000 shares of preferred
stock, par value $0.001 per share.
Voting Rights
Each
holder of Common Stock is entitled to one vote for each share on
all matters submitted to a vote of the stockholders.
Dividend Rights
Holders
of Common Stock are entitled to receive ratably any dividends that
the Company’s Board of Directors (the “Board”)
may declare out of funds legally available for that
purpose.
Rights and Preferences
Holders
of Common Stock have no preemptive, conversion, subscription or
other rights, and there are no redemption or sinking fund
provisions applicable to the Common Stock.
Right to Liquidation Distributions
Upon
the Company’s liquidation, dissolution or winding-up, the
assets legally available for distribution to the Company’s
stockholders would be distributable ratably among the holders of
the Common Stock and any participating preferred stock outstanding
at that time, subject to prior satisfaction of all outstanding debt
and liabilities and the preferential rights of and the payment of
liquidation preferences, if any, on any outstanding shares of
preferred stock.
Transfer Agent and Registrar
The
transfer agent and registrar for the Common Stock is Continental
Stock Transfer & Trust Company. The transfer agent and
registrar’s address is One State Street Plaza, 30th Floor,
New York, NY 10004.
The Nasdaq Capital Market
The
common stock is listed on The Nasdaq Capital Market under the
symbol “CELC.”
Anti-Takeover Effect of Delaware Law and Certain Charter and Bylaw
Provisions
The
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 of the Company. A summary of these provisions is as
follows:
●
Board
vacancies. The Bylaws authorize
only the Board to fill vacant directorships, including newly
created seats. In addition, the number of directors constituting
the Board will be permitted to be set only by a resolution adopted
by the Board. These provisions would prevent a stockholder from
increasing the size of the Board and then gaining control of the
Board by filling the resulting vacancies with its own nominees.
This makes it more difficult to change the composition of the Board
but promotes continuity of management.
●
Advance notice requirements
for stockholder proposals and director
nominations. The Bylaws provide
advance notice procedures for stockholders seeking to bring
business before an annual meeting of stockholders or to nominate
candidates for election as directors at an annual meeting of
stockholders. The Bylaws also specify certain requirements
regarding the form and content of a stockholder’s notice.
These provisions might preclude stockholders from bringing matters
before an annual meeting of stockholders or from making nominations
for directors at an annual meeting of stockholders if the proper
procedures are not followed. These provisions may also discourage
or deter a potential acquirer from conducting a solicitation of
proxies to elect the acquirer’s own slate of directors or
otherwise attempting to obtain control of the
Company.
●
No cumulative
voting. The Delaware General
Corporation Law (the “DGCL”) provides that stockholders
are not entitled to the right to cumulate votes in the election of
directors unless a corporation’s certificate of incorporation
provides otherwise. The Certificate of Incorporation does not
provide for cumulative voting.
●
Stockholder action; special
meetings of stockholders. The
Certificate of Incorporation provides that Company stockholders may
not take action by written consent, but may only take action at
annual or special meetings of stockholders. As a result, a holder
controlling a majority of the Company’s capital stock would
not be able to amend the Bylaws or remove directors without holding
a meeting of stockholders called in accordance with the Bylaws.
Further, the Bylaws provide that special meetings of stockholders
may be called only by a majority of the Board, the chairperson of
the Board, or the Company’s Chief Executive Officer, thus
prohibiting a stockholder from calling a special meeting. These
provisions might delay the ability of Company stockholders to force
consideration of a proposal or for stockholders controlling a
majority of Company capital stock to take any action, including the
removal of directors.
●
Issuance of undesignated
preferred stock. The Company
has 2,500,000 shares of undesignated preferred stock. The Board has
the authority, without further action by the stockholders, to issue
this preferred stock with rights and preferences, including voting
rights, designated from time to time by the Board. The existence of
authorized but unissued shares of preferred stock would enable the
Board to render more difficult or to discourage an attempt to
obtain control of the Company by means of a merger, tender offer,
proxy contest or other means.
●
Amendment of charter and bylaw
provisions. The affirmative
vote of stockholders representing at least two-thirds of the voting
power of all then-outstanding capital stock is required to amend,
alter or repeal certain provisions of the Certificate of
Incorporation, including the provision noted above regarding
stockholders not being able to act by written consent. A majority
of the Board has authority to adopt, amend or repeal provisions of
the Bylaws. Stockholders also have the authority to adopt, amend or
repeal provisions of the Bylaws, but only with the affirmative vote
of stockholders representing at least two-thirds of the voting
power of all then-outstanding capital stock.
The
Company is subject to the provisions of Section 203 of the DGCL, an
anti-takeover law. In general, Section 203 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 the business
combination is approved in a prescribed manner. For purposes of
Section 203, a “business combination” includes a
merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an “interested
stockholder” is a person who owns 15% or more of the voting
stock of a corporation, or any affiliate or associate of a
corporation who, within three years prior, did own 15% or more of
the voting stock of that corporation.