UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

Current Report

 

Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 3, 2019

 

ORIGINCLEAR, INC.

(Name of registrant as specified in its charter)

 

Nevada   333-147980   26-0287664
(State or other jurisdiction of   (Commission File Number)   (I.R.S. Employer
Incorporation or organization)       Identification Number)

 

525 S. Hewitt Street,    
Los Angeles, California   90013
(Address of principal executive offices)   (Zip Code)

  

Registrant’s telephone number, including area code: (323) 939-6645

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b2 of the Securities Exchange Act of 1934 (§240.12b2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

  

 

 

 

 

 

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

 

On April 3, 2019, OriginClear, Inc. (the “Company”) filed a certificate of designation (the “Series I COD”) of Series I Preferred Stock (the “Series I”) and a certificate of designation (the “Series J COD”) of Series J Preferred Stock (the “Series J”).

 

Pursuant to the Series I COD, the Company designated 4,000 shares of preferred stock as Series I. The Series I will have a stated value of $1,000 per share, and will be entitled to cumulative dividends at the annual rate of 8% of the stated value, payable quarterly within 60 days from the end of such fiscal quarter. The Series I will not be entitled to any voting rights except as may be required by applicable law, and will not be convertible into common stock. the Company will have the right to redeem the Series I at any time while the Series I are outstanding at a price equal to the stated value plus any accrued but unpaid dividends. The Company will be required to redeem the Series I two years following the date that is the later of the (i) final closing of the tranche (as designated in the applicable subscription agreement) or (ii) the expiration date of the tranche that such shares to be redeemed were a part of. The foregoing description of the Series I and the Series I COD is qualified by reference to the full text of the certificate of designation, a copy of which is attached hereto as Exhibit 3.1.

 

Pursuant to the Series J COD, the Company designated 100,000 shares of preferred stock as Series J. The Series J will have a stated value of $1,000 per share, and will be entitled to receive dividends on an as-converted basis with the Company’s common stock. The Series J will be convertible into validly-issued, fully paid and non-assessable shares of the Company’s common stock, on the terms and conditions set forth in the Series J COD, which includes certain Make-Good Shares for certain holders of the Company’s previously disclosed Series F Preferred Stock and Series G Preferred Stock. The foregoing description of the Series J and the Series J COD is qualified in its entirety by reference to the full text of the certificate of designation, a copy of which is attached hereto as Exhibit 3.2.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.   Description
     
3.1   Certificate of Designation of Series I Preferred Stock
3.2   Certificate of Designation of Series J Preferred Stock

   

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ORIGINCLEAR, INC.
   
April 9, 2019 By:  /s/ T. Riggs Eckelberry
    Name: T. Riggs Eckelberry
Title:   Chief Executive Officer

 

 

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Exhibit 3.1

 

CERTIFICATE OF DESIGNATION

OF

ORIGINCLEAR, INC.

ESTABLISHING THE DESIGNATIONS, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES I PREFERRED STOCK

 

OriginClear, Inc. (the “Company”), a corporation organized and existing under the laws of Nevada, does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Company by the Articles of Incorporation of the Company, it has adopted resolutions (a) authorizing the issuance of 4,000 shares of Series I Preferred Stock of the Company and (b) providing for the designations, preferences and relative participating, optional or other rights, and the qualifications, limitations or restrictions thereof, as follows:

 

SECTION 1. DESIGNATION OF SERIES.  There shall hereby be created and established a series of “Series I Preferred Stock” and the number of shares initially constituting such series shall be up to four thousand (4,000) shares.

 

SECTION 2. STATED VALUE.  The Stated Value of the Series I Preferred Stock will be $1,000 per share.

 

SECTION 3. DIVIDENDS.  The holders of Series I Preferred Stock (the “Holders”) will be entitled to receive, on any outstanding shares of Series I Preferred Stock held by such Holders, out of any funds and assets of the Company legally available prior and in preference to any declaration or payment of any dividend on the common stock of the Company (the “Common Stock”), cumulative dividends, payable quarterly (at the end of each fiscal quarter, and due for such fiscal quarter within 60 days of the end of such fiscal quarter), at an annual rate of 8% of the Stated Value. Such dividends will accrue commencing on the date of issuance.

 

SECTION 4. LIQUIDATION PREFERENCE.  Upon any liquidation, dissolution or winding- up of the Company, the Holders will be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series I Preferred Stock an amount equal to the Stated Value per share plus any accrued but unpaid dividends thereon before any distribution or payment may be made to the holders of any Common Stock.

 

SECTION 5. VOTING.  The Series I Preferred Stock will not entitle the Holders to any voting rights except as required under applicable law.

 

SECTION 6. NO CONVERSION RIGHTS.  The shares of the Series I Preferred Stock will have no conversion rights.

 

SECTION 7. REDEMPTION RIGHTS AND OBLIGATIONS.  (a) Redemption at Option of Company.

 

The Company may, in its sole discretion, at any time while the Series I Preferred Stock is outstanding, redeem all or any portion of the outstanding Series I Preferred Stock at a price equal to the Stated Value plus any accrued but unpaid dividends. The Company may exercise such redemption right by providing a minimum of 5 days written notice of such redemption to the Holders. In the event the Company exercises such redemption right for less than all of the then-outstanding shares of Series I Preferred Stock, the Company shall redeem the outstanding shares of the Holders of a pro rata basis.

 

(b) Mandatory Redemption.

 

The Company shall redeem in full outstanding shares of Series I Preferred Stock two years following the date that is the later of the (i) final closing of the tranche (as designated in the subscription agreement under which such shares were sold) that such shares to be redeemed were part of (a “Tranche”), or (ii) the expiration date of the Tranche that such shares to be redeemed were part of, at a price equal to the Stated Value plus any accrued but unpaid dividends.

 

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SECTION 8. NOTICES.  Any notice required hereby to be given to the Holders shall be deemed given if deposited in the United States mail, postage prepaid, or provided by fax or e-mail, to each Holder of record at his, her or its address appearing on the books of the Corporation.

 

SECTION 9. MISCELLANEOUS .

 

(a) The headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Designation.

 

(b) Whenever possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

 

(c) Except as may otherwise be required by law, the shares of the Series I Preferred Stock shall not have any powers, designations, preferences or other special rights, other than those specifically set forth in this Certificate of Designation.

 

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IN WITNESS WHEREOF, this Certificate of Designation has been executed by a duly authorized officer of the Company on this 3 day of April, 2019.

 

/s/ Riggs Eckelberry  
Name: Riggs Eckelberry  
Title:   Chief Executive Officer  

 

 

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Exhibit 3.2

 

CERTIFICATE OF DESIGNATION

OF

ORIGINCLEAR, INC.

ESTABLISHING THE DESIGNATIONS, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES J PREFERRED STOCK

 

OriginClear, Inc. (the “Company”), a corporation organized and existing under the laws of Nevada, does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Company by the Articles of Incorporation of the Company, it has adopted resolutions (a) authorizing the issuance of 100,000 shares of Series J Preferred Stock of the Company and (b) providing for the designations, preferences and relative participating, optional or other rights, and the qualifications, limitations or restrictions thereof, as follows:

 

SECTION 1. DESIGNATION OF SERIES.  There shall hereby be created and established a series of “Series J Preferred Stock” and the number of shares initially constituting such series shall be up to one hundred thousand (100,000) shares.

 

SECTION 2. STATED VALUE.  The Stated Value of the Series J Preferred Stock will be $1,000 per share.

 

SECTION 3. DIVIDENDS.  The holders of Series J Preferred Stock (the “Holders”) will be entitled to receive, on any outstanding shares of Series J Preferred Stock held by such Holders, dividends on an as-converted basis with the common stock of the Company (the “Common Stock”).

 

SECTION 4. LIQUIDATION.  Upon any liquidation, dissolution or winding- up of the Company, the Holders will be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series J Preferred Stock an amount equal to such amount as the Holder would have received had such share been converted to Common Stock, on a pari passu basis with the Common Stock..

 

SECTION 5. VOTING.  The Series J Preferred Stock will vote on an as-converted basis with the Common Stock, subject however, to the Beneficial Ownership Limitation.

 

SECTION 6. CONVERSION RIGHTS.  The shares of the Series J Preferred Stock shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in this Section 6.

 

(a) Holder’s Conversion Right. Subject to the provisions of Section 6(d), at any time and from time to time, each Holder shall be entitled to convert any number (which may include fractional amounts) of shares of Series J Preferred Stock (the “Preferred Shares”) into validly issued, fully paid and non- assessable shares of Common Stock in accordance with Section 6(b).

 

(i) Conversion Rate. The number of validly issued, fully paid and non- assessable shares of Common Stock issuable upon conversion of the Preferred Shares pursuant to Section 6(a) shall be equal to the amount of the Stated Value of the Preferred Shares being converted divided by the Conversion Price, provided that, Prior Series F or G Holders (as defined below) will be entitled to additional shares of Common Stock in accordance with clause (ii) below.. The Conversion Price will be equal to the lower of (a) closing price of the Common Stock on the date the Company has banked funds and received and accepted executed subscription documents and the purchase price under the subscription agreement under which such Preferred Shares being converted were purchased, or (b) the average closing sale price of the Common Stock for the five trading days prior to the Conversion Date (the “Variable Price”).

 

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(ii) Make-Good Shares for Prior Series F or G Holders . A Holder, who at the time such Holder was issued its shares of Series J Preferred Stock being converted, was a holder of the Company’s Series F Preferred Stock or Series G Preferred Stock (a “Prior Series F or G Holder”), upon any conversion of shares of Series J Preferred Stock, will be entitled to additional shares (the “Make-Good Shares”) of Common Stock (in addition to such shares as the Holder would receive pursuant to clause (i) above) in accordance with this clause (ii). A Prior Series F or G Holder will be entitled to Make-Good Shares calculated as follows. The number of Make-Good Shares for any such conversion will be equal to the difference between (a) the aggregate number of shares of common stock (multiplied by the New Investment Ratio and the Conversion Proportion) such Holder received as part of the Units purchased by such Holder that also included shares of Series F Preferred Stock or Series G Preferred Stock (the “Prior Units”), and (b) the number of such shares of common stock that the Holder would have received (multiplied by the New Investment Ratio and the Conversion Ratio) had the aggregate purchase price paid by the Holder for such Prior Units been equal to the purchase price paid for the Prior Units (the “Original Investment Amount”), and had the price used to calculate the number of such shares of common stock been the Variable Price. The “New Investment Ratio” means the aggregate dollar amount of the Units including Series I Preferred Stock and Series J Preferred Stock purchased by the Holder (the “New Investment Amount”), divided by the Original Investment Amount (provided that the New Investment Ratio will not be greater than 1.0). The Conversion Proportion is equal to the number of shares of Series J Preferred Stock being converted divided by the aggregate total number of shares of Series J Preferred Stock originally issued to the Holder.

 

Solely by way of illustration, in the event a Prior Series F or G Holder purchased an aggregate of $200,000 in Original Investment Amount of Prior Units, such Holder was issued 10,000,000 shares of common stock as part of such Prior Units, calculated based on a price per share of common stock of $0.01, and such Holder purchased $100,000 in New Investment Amount, the New Investment Ratio for such Holder would be 0.5. In the event such Holder was issued 50 shares of Series J Preferred Stock, and converted 25 of such shares of Series J Preferred Stock to Common Stock, the Conversion Proportion for such conversion would be equal to 0.5. In the event the Variable Price for such conversion would be equal to $0.001, the number of Make-Good Shares for such conversion would be equal to 47,500,000 (calculated as follows: [($200,000/$0.001)] * 0.5 *0.5] – [(0.5 * 10,000,000)* 0.5])

 

(iii) Fractional Shares. No fractional shares of Common Stock are to be issued upon the conversion of any Preferred Shares. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.

 

(b) Mechanics of Conversion. The conversion of each Preferred Share shall be conducted in the following manner:

 

(i) Holder’s Conversion. To convert a Preferred Share into validly issued, fully paid and non-assessable shares of Common Stock on any date (a “ Conversion Date ”), a Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion of the share(s) of Preferred Shares subject to such conversion in a form reasonably acceptable to the Company. On or before the second (2nd) Trading Day following the date of receipt of a Conversion Notice, the Company shall instruct the Company’s Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second (2 nd ) Trading Day following the date of receipt by the Company of such Conversion Notice, the Company shall (1) provided that the Transfer Agent is participating in DTC Fast Automated Securities Transfer Program and provided that such shares may be sold under Rule 144 under the Securities Act of 1933, as amended, without the need for current public information, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit and Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, or the shares are not eligible to be sold without the need for current public information under Rule 144, issue and to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled.

 

(ii) Record Holder. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date

 

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(iii) Book-Entry. Notwithstanding anything to the contrary set forth in this Section 6, upon conversion of any Preferred Shares in accordance with the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing the Preferred Shares to the Company following conversion thereof unless (A) the full or remaining number of Preferred Shares represented by the certificate are being converted (in which event such certificate(s) shall be delivered to the Company as contemplated by this Section 6 (b) such Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Preferred Shares upon physical surrender of any Preferred Shares. Each Holder and the Company shall maintain records showing the number of Preferred Shares so converted by such Holder and the dates of such conversions or shall use such other method, reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of the certificate representing the Preferred Shares upon each such conversion. In the event of any dispute or discrepancy, such records of the Company establishing the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred Shares represented by such certificate may be less than the number of Preferred Shares stated on the face thereof. Each certificate for Preferred Shares shall bear the following legend:

 

ANY TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATION RELATING TO THE SHARES OF SERIES J PREFERRED STOCK THAT MAY BE REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 6 (b) THEREOF. THE NUMBER OF SHARES OF SERIES J PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES H PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 6 (b) OF THE CERTIFICATE OF DESIGNATION RELATING TO THE SHARES OF SERIES J PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.

 

(c) Taxes. The Company shall pay any and all documentary, stamp, transfer (but only in respect of the registered holder thereof), issuance and other similar taxes that may be payable with respect to the issuance and delivery of shares of Common Stock upon the conversion of Preferred Shares.

 

(d) Limitation on Beneficial Ownership. Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of the Series J Preferred Stock be converted if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by the Holder at such time, the number of shares of Common Stock that would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules thereunder) more than 4.99% of all of the Common Stock outstanding at such time (the “ 4.99% Beneficial Ownership Limitation ”); provided, however, that, upon the Holder providing the Corporation with sixty-one (61) days’ advance notice (the “ 4.99% Waiver Notice ”) that the Holder would like to waive this Section 6(d) with regard to any or all shares of Common Stock issuable upon conversion of the Preferred Shares, this Section 6(d) will be of no force or effect with regard to all or a portion of the Series J Preferred Stock referenced in the 4.99% Waiver Notice but shall in no event waive the 9.99% Beneficial Ownership Limitation described below. Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of the Preferred Shares be converted if the number of shares of Common Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common Stock owned by the Holder at such time, would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the 1934 Act and the rules thereunder) in excess of 9.99% of the then-issued and outstanding shares of Common Stock outstanding at such time (the “ 9.99% Beneficial Ownership Limitation ” and the lower of the 9.99% Beneficial Ownership Limitation and the 4.99% Beneficial Ownership Limitation then in effect, the “ Maximum Percentage ”). By written notice to the Company, a holder of Preferred Shares may from time to time decrease the Maximum Percentage to any other percentage specified in such notice. For purposes hereof, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of a holder of Preferred Shares, the Company shall within three (3) Business Days confirm orally and in writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Preferred Shares, by the Holder and its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported, that in any event are convertible or exercisable, as the case may be, into shares of the Company’s Common Stock within 60 days’ of such calculation and that are not subject to a limitation on conversion or exercise analogous to the limitation contained herein. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) that may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

   

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SECTION 7. NO REDEMPTION RIGHTS OR OBLIGATIONS.  The Series J Preferred Stock will not be subject to any redemption rights or obligations.

 

SECTION 8. NOTICES.  Any notice required hereby to be given to the Holders shall be deemed given if deposited in the United States mail, postage prepaid, or provided by fax or e-mail, to each Holder of record at his, her or its address appearing on the books of the Corporation.

 

SECTION 9. MISCELLANEOUS .

 

(a) The headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Designation.

 

(b) Whenever possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

 

(c) Except as may otherwise be required by law, the shares of the Series J Preferred Stock shall not have any powers, designations, preferences or other special rights, other than those specifically set forth in this Certificate of Designation.

 

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IN WITNESS WHEREOF, this Certificate of Designation has been executed by a duly authorized officer of the Company on this 3 day of April, 2019.

 

/s/ Riggs Eckelberry  
Name: Riggs Eckelberry  
Title:   Chief Executive Officer  

 

 

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