On February 10, 2020, RealNetworks, Inc. (the “Company”) entered into a Series B Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”) with Rob Glaser, Founder, Chairman of the Board, Chief Executive Officer, and significant shareholder of the Company. to the Stock Purchase Agreement, Mr. Glaser invested approximately $10 million in the Company in exchange for the issuance to him of 8,064,516 shares of Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”).

The relative rights, preferences, limitations and powers of the Series B Preferred Stock are set forth in and governed by the Designation of Rights and Preferences of Series B Preferred Stock (the “Certificate of Designation”) in accordance with the terms and provisions of the Stock Purchase Agreement. Such rights, preferences, limitations and powers of the Series B Preferred Stock include, among other provisions, the right to proportional adjustment and the right to any dividends or distributions declared with regard to the Company’s common stock, par value $0.001 per share (the “Common Stock”), no voting rights nor consent requirement for the taking of corporate action, and limitations on transferability of the Series B Preferred Stock. Further, each share of Series B Preferred Stock is convertible into one share of Common Stock, provided, however, that no conversion is permitted in the event that such conversion would cause Mr. Glaser’s beneficial ownership of Common Stock to exceed the 38.5% threshold set forth in the Company’s Second Amended and Restated Shareholder Rights Plan dated November 30, 2018 (the “Rights Plan”).

The foregoing summary of certain rights, preferences, limitations and powers of the Series B Preferred Stock is a general description only. It does not purport to be complete and is qualified in its entirety by reference to (a) the Stock Purchase Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference, and (b) the Certificate of Designation, a copy of which is attached as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference.

Item 3.02. Unregistered Sales of Equity Securities.

to the Stock Purchase Agreement described in Item 1.01 of this Current Report on Form 8-K (which description is hereby incorporated by reference into this Item 3.02), 8,064,516 shares of Series B Preferred Stock (the “Series B Shares”) were issued to Rob Glaser, Founder, Chairman of the Board, Chief Executive Officer, and significant shareholder of the Company in exchange for cash consideration of approximately $10 million.

The Series B Shares were sold by the Company to Mr. Glaser in a private placement without registration in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D promulgated by the United States Securities and Exchange Commission to the 1933 Act.

Each of the Series B Shares is subject to the rights, preferences, limitations and powers as set forth in the Certificate of Designation, and is convertible into one share of Common Stock, provided, however, that no conversion is permitted in the event that such conversion would cause Mr. Glaser’s beneficial ownership of Common Stock to exceed the 38.5% threshold set forth in the Rights Plan.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The board of directors of the Company (the “Board”) adopted the Certificate of Designation, effective February 10, 2020, effectuating an amendment (the “Amendment”) to the Company’s Amended and Restated Articles of Incorporation (the “Articles”). The Amendment functions to amend the Articles to set forth the rights, preferences, limitations and powers of the Series B Preferred Stock, which include, among other provisions, the right to proportional adjustment and the right to any dividends or distributions declared with regard to the Common Stock, no voting rights nor consent requirement for the taking of

corporate action, and limitations on transferability of the Series B Preferred Stock. Further, the Certificate of Designation provides that each share of Series B Preferred Stock is convertible into one share of Common Stock, provided, however, that no conversion is permitted in the event that such conversion would cause Mr. Glaser’s beneficial ownership of Common Stock to exceed the 38.5% threshold set forth in the Rights Plan.

The foregoing description of the Certificate of Designation is a summary, is not complete, and is qualified in its entirety by the text of the actual Certificate of Designation, a copy of which is filed with this Current Report on Form 8-K as Exhibit 4.1 and is incorporated herein by reference.

Item 7.01. Regulation FD.

The Company’s press release dated February 10, 2020 announcing the sale and issuance of shares of its Series B Preferred Stock to Rob Glaser is included as Exhibit 99.1 to this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

REALNETWORKS INC Exhibit
EX-4.1 2 certificateofdesignationse.htm EXHIBIT 4.1 CERTIFICATE OF DESIGNATION Exhibit Exhibit 4.1REALNETWORKS,…
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About RealNetworks, Inc. (NASDAQ:RNWK)

RealNetworks, Inc. (RealNetworks) is engaged in creating applications and services, which help in connecting with digital media. The Company provides the digital media services and products it creates to consumers, mobile carriers and other businesses. It operates through three segments: RealPlayer Group, Mobile Entertainment and Games. Its RealPlayer Group business consists of its photo and video sharing product, RealTimes and its RealPlayer media player software, and related products and services. Its Mobile Entertainment segment consists primarily of the digital media services, which it provides to network service providers as software as a service (SaaS) offerings. It owns and operates casual games service, offering casual games through digital downloads, online subscription play, third-party portals, social networks and mobile devices. Its casual games include board, card, puzzle, word and hidden-object games. It develops, publishes, licenses and distributes casual games.