Aditxt, Inc PRE 14A, filed May 29, 2024

Aditxt, Inc. (ADTX)

PRE 14A 2024-05-29 For: 2024-05-29

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Filed by the Registrant		☒

Filed by a party other than the Registrant		☐

☒		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material under § 240.14a-12

☒		No fee required

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11

	BY ORDER OF THE BOARD OF DIRECTORS

May [*], 2024	/s/ Amro Albanna
	Amro Albanna Chief Executive Officer and Chairman of the Board of Directors

	Page
QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT AND VOTING	1
PROPOSAL NO. 1: ELECTION OF DIRECTORS	10
EXECUTIVE OFFICERS	18
EXECUTIVE COMPENSATION	19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	28
CERTAIN TRANSACTIONS WITH RELATED PERSONS	29
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	33
PROPOSAL NO. 3: THE SERIES A-1 PROPOSAL	34
PROPOSAL NO. 4: THE SERIES B-1 PROPOSAL	39
PROPOSAL NO. 5: THE SERIES B-2 PROPOSAL	43
PROPOSAL NO. 6: THE SERIES C-1 PROPOSAL	47
PROPOSAL NO. 7: THE ELOC PROPOSAL	51
PROPOSAL NO. 8: THE AUTHORIZED SHARE INCREASE PROPOSAL	54
PROPOSAL NO. 9: THE REVERSE SPLIT PROPOSAL	56
PROPOSAL NO. 10: AMENDMENT TO 2021 OMNIBUS INCENTIVE PLAN	61
PROPOSAL NO. 11: AUTHORIZATION TO ADJOURN THE ANNUAL MEETING IF NECESSARY OR APPROPRIATE	67
OTHER MATTERS	68
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS	68
HOUSEHOLDING	68
2023 ANNUAL REPORT	69

Proposal	Votes Required	Voting Options	Impact of “Withhold” or “Abstain” Votes	Broker Discretionary Voting Allowed
Proposal No. 1: Election of Directors	The plurality of the votes cast. This means that the nominees receiving the highest number of affirmative “FOR” votes will be elected as directors.	“FOR” “WITHHOLD”	None⁽¹⁾	No⁽³⁾

Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	Yes⁽⁴⁾

Proposal No. 3: Approval of, for purposes of Nasdaq Rule 5635(d), the issuance of shares of common stock underlying shares of Series A-1 Convertible Preferred Stock originally issued by the Company in December 2023 (the “Series A-1 Proposal”)	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 4: Approval of, for purposes of Nasdaq Rule 5635(d), the issuance of shares of common stock underlying shares of Series B-1 Convertible Preferred Stock originally issued by the Company in January 2024 (the “Series B-1 Proposal”)	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 5: Approval of, for purposes of Nasdaq Rule 5635(d), the issuance of shares of common stock underlying shares of Series B-2 Convertible Preferred Stock originally issued by the Company in January 2024 (the “Series B-2 Proposal”)	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 6: Approval of for the purpose of Nasdaq Marketplace Rule 5635(d), the issuance of shares of common stock underlying shares of Series C-1 Convertible Preferred Stock and warrants originally issued by the Company in May 2024 (the “Series C-1 Proposal”);	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 7: Approval of, for the purpose of Nasdaq Marketplace Rule 5635(d), the issuance of shares of common stock under the Company’s equity line of credit pursuant to the Company’s Common Stock Purchase Agreement with an equity line investor pursuant to which such investor has agreed to purchase from the Company from time to time shares of common stock having a total maximum aggregate purchase price of $150 million (the “ELOC Proposal”);	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 8: Approval of an increase to the number of authorized shares of common stock of the Company from 100,000,000 shares to [*] shares (the “Authorized Share Increase Proposal”);	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) of the outstanding shares of Common Stock and Preferred Stock of the Company entitled to vote, voting together as a single class.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	Yes⁽⁴⁾

Proposal No. 9: Authorization of the reverse stock split	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 10: Approval of an increase in number of shares of common stock issuable under the 2021 Plan	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Proposal No. 11: To authorize the adjournment of the Annual Meeting if necessary or appropriate	The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual Meeting by the holders entitled to vote thereon.	“FOR” “AGAINST” “ABSTAIN”	None⁽²⁾	No⁽³⁾

Name	Independent	Audit	Compensation	Nominating and Corporate Governance
Amro Albanna
Shahrokh Shabahang, D.D.S., MS, Ph.D.
Brian Brady	X	X*	X	X
Charles Nelson	X	X	X*	X
Jeffrey Runge, M.D.	X	X	X	X*

Director	Year	Option Awards		Restricted Stock Unit Awards		Fees Earned or Paid in Cash		All Other Compensation ($)²		Total
Amro Albanna	2023	$	—	$	—	$	—			$	—
Shahrokh Shabahang, D.D.S., MS, Ph.D.	2023	$	—	$	—	$	—			$	—
Brian Brady	2023	$	2,355	$	—	$	—	$	1,500	$	3,855
Namvar Kiaie	2023	$	2,355	$	—	$	—	$	1,500	$	3,855
Jeffrey Runge, M.D.	2023	$	2,355	$	—	$	—	$	1,500	$	3,855
Namvar Kiaie¹	2023	$	5,010	$	—	$	—		—	$	5,010

Name	Age	Positions
Amro Albanna	54	Chief Executive Officer, Director
Corinne Pankovcin	57	Chief Mergers & Acquisitions Officer
Shahrokh Shabahang, D.D.S., MS, Ph.D.	61	Chief Innovation Officer, Director
Rowena Albanna	58	Chief Operating Officer
Thomas J. Farley	51	Chief Financial Officer

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Restricted Stock Units ($)		All Other Compensation ($)⁽³⁾		Total ($)
Amro Albanna	2023		432,119		—		—		47,114		—		40,000		519,233
President, and Director, Former President⁽¹⁾	2022		500,000		—		—		—		—		—		500,000
Shahrokh Shabahang, D.D.S., MS, Ph.D.	2023		293,502		—		—		35,336		—		30,000		358,837
Chief Innovation Officer	2022		325,000		—		—		—		—		—		325,000
Corinne Pankovcin	2023		346,774		—		—		23,557		—		20,000		390,331
Chief Commercialization Officer, Former President, Former Chief Financial Officer⁽¹⁾	2022		385,000		—		—		—		—		—		385,000
Thomas J. Farley	2023		337,894		—		—		23,557		—		20,000		381,451
Chief Financial Officer	2022		360,833		—		—		—		—				360,833
Matthew Shatzkes	2023		198,670		890,893		—		—		—		34,076		1,123,639
Chief Legal Officer & General Counsel⁽²⁾	2022		368,958		246,697		—		—		218,064		—		833,719

	Option Awards							Restricted Stock Awards				Restricted Stock Units
Name	Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Option Exercise Price		Option Expiration Date	Number of securities underlying unexercised restricted stock awards (#) exercisable		Number of securities underlying unexercised restricted stock awards (#) unexercisable		Number of securities underlying unexercised restricted stock units (#) exercisable		Number of securities underlying unexercised restricted stock units (#) unexercisable
Amro Albanna		100		—	$	8,000.00	October 5, 2027		—		—		—		—
Amro Albanna		200		—	$	8,000.00	October 5, 2027		—		—		—		—
Amro Albanna		9,404			$	5.01	November 8, 2033		—		—		—		—
Corinne Pankovcin		83		—	$	8,040.00	March 20, 2025		—		—		—		—
Corinne Pankovcin		4		—	$	22,000.00	March 20, 2025		—		—		—		—
Corinne Pankovcin		83		—	$	3,840.00	November 2, 2030		—		—		—		—
Corinne Pankovcin		8		—	$	3,840.00	November 2, 2030		—		—		—		—
Corinne Pankovcin		4,702		—	$	5.01	November 8, 2033
Thomas J. Farley		30		—	$	$3,840	November 2, 2030		—		—		—		—
Thomas J. Farley		4,702		—	$	$5.01	November 8, 2033		—		—		—		—

	Number of shares of Common Stock Beneficially Owned		Percentage
Directors and Officers:
Amro Albanna⁽¹⁾		10,103		*	%
Shahrokh Shabahang, D.D.S., MS, Ph.D.⁽²⁾		7,780		*	%
Corinne Pankovcin⁽³⁾		4,966		*	%
Rowena Albanna⁽⁴⁾		4,956		*	%
Brian Brady⁽⁵⁾		488		*	%
Jeffrey Runge, M.D.⁽⁶⁾		483		*	%
Thomas J. Farley⁽⁷⁾		4,812		*	%
Charles Nelson⁽⁸⁾		731		*	%
All directors and executive officers as a group (8 persons)		34,319		2.06	%

	Submitted by the Audit Committee

	Brian Brady, Chairman
	Charles Nelson
	Jeffrey Runge, M.D.

	Year Ended December 31,
	2023		2022
Audit Fees^(a)	$	125,735	$	111,250
Tax Fees^(b)	$	—	$	—
Other Fees^(c)	$	33,325	$	7,400
Total	$	161,083	$	118,650

	BY ORDER OF THE BOARD OF DIRECTORS

[*], 2024	/s/ Amro Albanna
	Amro Albanna
	Chief Executive Officer and Chairman of the Board of Directors

ADITXT, INC.

By:	/s/ Amro Albanna
	Name:	Amro Albanna
	Title:	Chief Executive Officer

	Date of Conversion:

	Aggregate number of Preferred Shares to be converted:

	Aggregate Stated Value of such Preferred Shares to be converted:

	Aggregate accrued and unpaid Dividends with respect to such Preferred Shares to be converted:

	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED:

Please confirm the following information:

	Conversion Price:

	Number of shares of Common Stock to be issued:

ADITXT, INC.

By:	/s/ Amro Albanna
	Name:	Amro Albanna
	Title:	Chief Executive Officer

Date: _____________ __, _________________


Name of Registered Holder


By:
	Name:
	Title:

	Tax ID:_____________________________

	Facsimile:___________________________

	E-mail Address:______________________

		Page

ARTICLE I PURCHASE AND SALE OF COMMON STOCK		6
Section 1.1.	Purchase and Sale of Stock	6
Section 1.2.	Closing Date; Settlement Dates	6
Section 1.3.	Initial Public Announcements and Required Filings	7

ARTICLE II PURCHASE TERMS		7
Section 2.1.	Fixed Purchases	7
Section 2.2.	VWAP Purchases	8
Section 2.3.	Additional VWAP Purchases	9
Section 2.4.	Compliance with Rules of Trading Market	9
Section 2.5.	Beneficial Ownership Limitation	10
Section 2.6.	Commitment Fee	10

ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR		10
Section 3.1.	Organization and Standing of the Investor	10
Section 3.2.	Authorization and Power	11
Section 3.3.	No Conflicts	11
Section 3.4.	Investment Purpose	12
Section 3.5.	Accredited Investor Status	12
Section 3.6.	Reliance on Exemptions	12
Section 3.7.	Information	12
Section 3.8.	No Governmental Review	12
Section 3.9.	No General Solicitation	13
Section 3.10.	Not an Affiliate	13
Section 3.11.	No Prior Short Sales	13
Section 3.12.	Statutory Underwriter Status	13

ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY		13
Section 4.1.	Organization, Good Standing and Power	13
Section 4.2.	Authorization, Enforcement	14
Section 4.3.	Capitalization	14
Section 4.4.	Issuance of Securities	15
Section 4.5.	No Conflicts	15
Section 4.6.	Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants	16
Section 4.7.	Subsidiaries	18
Section 4.8.	No Material Adverse Effect or Material Adverse Change, No Undisclosed Liabilities	18
Section 4.9.	No Undisclosed Events or Circumstances	19
Section 4.10.	Indebtedness	19
Section 4.11.	Title to Assets	19
Section 4.12.	Actions Pending	20
Section 4.13.	Compliance With Laws	20

Section 4.14.	Certain Fees	20
Section 4.15.	Operation of Business	20
Section 4.16.	Environmental Compliance	21
Section 4.17.	Material Agreements	21
Section 4.18.	Transactions With Affiliates	21
Section 4.19.	Intellectual Property Rights	21
Section 4.20.	Use of Proceeds	22
Section 4.21.	Investment Company Act Status	22
Section 4.22.	Benefit Plans; Labor Matters	22
Section 4.23.	Taxes	23
Section 4.24.	Insurance	23
Section 4.25.	Dilutive Effect	23
Section 4.26.	Manipulation of Price	23
Section 4.27.	Securities Act	24
Section 4.28.	Listing and Maintenance Requirements; DTC Eligibility	24
Section 4.29.	Application of Takeover Protections	24
Section 4.30.	Foreign Corrupt Practices	24
Section 4.31.	Money Laundering Laws	24
Section 4.32.	OFAC	25
Section 4.33.	Information Technology; Compliance with Data Privacy Laws	25
Section 4.34.	No Disqualification Events	25
Section 4.35.	ERISA	26
Section 4.36.	No Other Similar Agreement	26
Section 4.37.	Acknowledgement Regarding Investor’s Acquisition of Securities	26

ARTICLE V ADDITIONAL COVENANTS		27
Section 5.1.	Securities Compliance	27
Section 5.2.	Reservation of Common Stock	27
Section 5.3.	Registration and Listing	27
Section 5.4.	Compliance with Laws	28
Section 5.5.	Keeping of Records and Books of Account; Due Diligence	28
Section 5.6.	No Frustration; Prohibition of Certain Issuances Before Settlement of Purchases; No Similar Transactions	29
Section 5.7.	Corporate Existence	30
Section 5.8.	Fundamental Transaction	30
Section 5.9.	Selling Restrictions	31
Section 5.10.	Effective Registration Statement	31
Section 5.11.	Blue Sky	31
Section 5.12.	Non-Public Information	32
Section 5.13.	Broker/Dealer	32
Section 5.14.	Disclosure Schedules	32
Section 5.15.	Delivery of Bring Down Opinions and Compliance Certificates Upon Occurrence of Certain Events	33
Section 5.16.	DTC Chill	33
Section 5.17.	Use of Proceeds	34
Section 5.18.	Stockholder Approval	34

ARTICLE VI CONDITIONS TO CLOSING AND CONDITIONS TO THE SALE AND PURCHASE OF THE SHARES		34
Section 6.1.	Conditions Precedent to Closing	34
Section 6.2.	Conditions Precedent to Commencement	35
Section 6.3.	Conditions Precedent to Purchases by Investor	38

ARTICLE VII TERMINATION		42
Section 7.1.	Automatic Termination; Termination by Consent	42
Section 7.2.	Other Termination	42
Section 7.3.	Effect of Termination	43

ARTICLE VIII INDEMNIFICATION		43
Section 8.1.	Indemnification of Investor	43
Section 8.2.	Indemnification Procedures	44

ARTICLE IX MISCELLANEOUS		45
Section 9.1.	Certain Fees and Expenses; Commitment Shares; Commencement Irrevocable Transfer Agent Instructions	45
Section 9.2.	Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial	46
Section 9.3.	Entire Agreement	47
Section 9.4.	Notices	47
Section 9.5.	Waivers	48
Section 9.6.	Amendments	48
Section 9.7.	Headings	49
Section 9.8.	Construction	49
Section 9.9.	Binding Effect	49
Section 9.10.	No Third Party Beneficiaries	49
Section 9.11.	Governing Law	49
Section 9.12.	Survival	49
Section 9.13.	Counterparts	50
Section 9.14.	Publicity	50
Section 9.15.	Severability	50
Section 9.16.	Further Assurances	50

THE COMPANY:

ADITXT, INC.:

By:	/s/ Amro Albanna
Name:	Amro Albanna
Title:	Chief Executive Officer

THE INVESTOR:

SEVEN KNOTS, LLC:

By:	/s/ Marissa Welner
Name:	Marissa Welner
Title:	Authorized Signatory

Fixed Purchase Share Amount (number of Shares):
Fixed Purchase Exercise Date:
Fixed Purchase Price (per Share):
Total Aggregate Fixed Purchase Price:
Fixed Purchase Share Delivery Date:
Fixed Purchase Settlement Date:
Dollar Amount of Common Stock Currently Available under the Aggregate Limit:

VWAP Purchase Share Amount (number of Shares):
VWAP Purchase Exercise Date:
VWAP Purchase Date:
VWAP Purchase Share Delivery Date:
VWAP Purchase Settlement Date:
Dollar Amount of Common Stock Currently Available under the Aggregate Limit:

Additional VWAP Purchase Share Amount (number of Shares):
Additional VWAP Purchase Date (indicate whether this is for the first, second, third, etc. Additional VWAP exercised by the Company on such Additional VWAP Purchase Date):
Additional VWAP Purchase Share Delivery Date:
Additional VWAP Purchase Settlement Date:
Dollar Amount of Common Stock Currently Available under the Aggregate Limit:

Additional VWAP Purchase Share Amount (number of Shares):
Additional VWAP Purchase Date (indicate whether this is for the first, second, third, etc. Additional VWAP exercised by the Company on such Additional VWAP Purchase Date):
Additional VWAP Purchase Commencement Time:
Additional VWAP Purchase Termination Time:
VWAP during the Additional VWAP Purchase Period:
Closing Sale Price on the Additional VWAP Purchase Date:
Additional VWAP Purchase Price (per Share) (90% of lower of two line items immediately above):
Total Aggregate Additional VWAP Purchase Price:
Additional VWAP Purchase Share Delivery Date:
Additional VWAP Purchase Settlement Date:

ADITXT, INC.

By:
Name:	Amro Albanna
Title:	Chief Executive Officer