Brooklyn ImmunoTherapeutics, Inc.
Extract: Charter Amendment (Plain English Desc) from a DEF 14A on 07/01/2021   Download
SEC Document
SEC Filing

Proposal   — Ratification of Charter

Amendment to Increase Authorized Common Stock

 

We are asking stockholders to ratify an earlier amendment to our restated certificate of incorporation to increase the number of authorized shares of common stock from 15,000,000 to 100,000,000, which we refer to as the Share Increase Amendment. The Share Increase Amendment was approved at a special meeting of stockholders held on March 15, 2021, or the Special Meeting, and was intended to be effected by the filing of the Share Increase Amendment with the Delaware Secretary of State on March 25, 2021.

 

The board of directors has determined that it is in the best interests of our company and stockholders to ratify, pursuant to Section 204 of the DGCL, the filing and effectiveness of the Share Increase Amendment. If ratification of the Share Increase Amendment is approved by stockholders at the Annual Meeting and subsequently becomes effective as described below, the ratification will be retroactive to the filing of the Share Increase Amendment with the Delaware Secretary of State on March 25, 2021.

 

Background


As described in the proxy statement, prospectus and consent solicitation statement relating to the Special Meeting, which we refer to as the Special Meeting Proxy Statement and which was filed with the SEC on February 8, 2021, our stockholders were asked to consider and vote on a number of proposals in connection with the Merger, pursuant to which our wholly owned subsidiary BIT Merger Sub, Inc. would merge with and into Brooklyn LLC, with Brooklyn LLC surviving as our wholly owned subsidiary. See “Corporate Governance-Recent Change in Control” for a more detailed description of the Merger. Pursuant to the Merger, it was proposed that the members of Brooklyn LLC would exchange their equity interests in Brooklyn LLC for shares of common stock. As described in the Special Meeting Proxy Statement, the board of directors believed it was in the best interests of our company and stockholders to increase the number of authorized shares of common stock in order to effect the Merger and to help ensure there would be an adequate number of authorized but unissued and unreserved shares of common stock available for issuance in connection with possible future acquisitions, equity and equity based financings, possible future awards under employee benefit plans, and other corporate purposes.

At the Special Meeting, our inspector of elections determined that the proposal to approve the Share Increase Amendment received the requisite stockholder approval and certified that the proposal passed. As part of this determination, votes cast by brokers and nominees in favor of the Share Increase Amendment without instruction from the beneficial owners of certain outstanding shares of common stock were counted in favor of the Share Increase Amendment in accordance with the rules of the NYSE American. Certain statements made in the Special Meeting Proxy Statement were inconsistent with this approach. In particular, the Special Meeting Proxy Statement stated that brokers and nominees would not have discretionary voting authority with respect to the Share Increase Amendment (i.e., they would not be permitted to vote on the Share Increase Amendment without instruction from the beneficial owners of those shares).

Following the Special Meeting, we filed the Share Increase Amendment with the Delaware Secretary of State on March 25, 2021 and the Share Increase Amendment was to be effective upon filing.

Subsequently, a question has been raised regarding the validity of the stockholder vote approving the Share Increase Amendment, due to the disclosures in the Special Meeting Proxy Statement regarding the authority of brokers and nominees to vote on the Share Increase Amendment without instruction and the fact that the stockholders’ votes approving the Share Increase Amendment were not tabulated in accordance with the Special Meeting Proxy Statement disclosure.
 

The board, in consultation with counsel, has determined that the description in the Special Meeting Proxy Statement of the lack of authority of brokers and nominees to vote on the Share Increase Amendment without instruction may create some uncertainty as to the effect of the vote obtained at the Special Meeting approving the Share Increase Amendment. As a result, the board has determined that it is in the best interests of our company and stockholders to approve the ratification of the Share Increase Amendment pursuant to Section 204 of the DGCL to eliminate any uncertainty related to the effectiveness of this corporate act. If ratification of the Share Increase Amendment is approved by stockholders at the Annual Meeting and becomes effective as described below, the ratification will be retroactive to March 25, 2021, which was the date of the filing of the Share Increase Amendment with the Delaware Secretary of State and the date that the filing became effective.

 

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Among other consequences, the ratification of the Share Increase Amendment will (a) confirm that, at all times since the Share Increase Amendment was filed with the Delaware Secretary of State on March 25, 2021, we have had sufficient authorized and unissued shares of common stock to permit the sales and issuances of common stock that have occurred since that date and (b) facilitate potential future transactions, including capital-raising transactions and strategic acquisitions.