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): December 11, 2019
| OriginClear, Inc. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 333-147980 | 26-0287664 | ||
|
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
525 S. Hewitt Street
Los Angeles, CA 90013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (323) 939-6645
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)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 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 1.01 Entry into a Material Definitive Agreement.
On December 11, 2019, OriginClear, Inc. (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with a noteholder of the Company. Pursuant to the Exchange Agreement, the Company issued 34,200 shares of newly created Series M Preferred Stock of the Company to the holder in exchange for an outstanding convertible note of the Company in the amount of $171,260 (including accrued interest thereon).
In connection with the Exchange Agreement, on December 11, 2019, the Company filed a Certificate of Designation of Series M Preferred Stock (the “Series M Certificate of Designation”) with the Secretary of State of Nevada, which designated 800,000 shares of the Company’s blank check preferred stock as Series M Preferred Stock. Pursuant to the Series M Certificate of Designation:
| ● | The Series M Preferred Stock entitles the holders to an annual 10% dividend, payable monthly, on the stated value of $25.00 per share, payable in preference to payment of any dividend on the common stock. |
| ● | The Series M Preferred Stock does not have voting rights, except as required by law and with respect to certain protective provisions set forth in the Series M Certificate of Designation. |
| ● | The Series M Preferred Stock has a liquidation preference of $25.00 per share plus any accrued but unpaid dividends, before any payments to holders of common stock. |
| ● | The Series M Preferred Stock is convertible into common stock in an amount determined by dividing the stated value being converted by the conversion price. The conversion price will be equal to 80% of the average closing price of the common stock for the last five trading days prior to the date the Company receives a conversion notice. The Series M Preferred Stock may not be converted to common stock to the extent such conversion would result in the holder beneficially owning more than 4.99% of the Company’s outstanding common stock. |
| ● | The Series M Preferred Stock will be redeemable at the option of the Company, after the first anniversary of the original issuance date of the Series M Preferred Stock, at a redemption price of $25.00 per share plus any accrued but unpaid dividends. |
In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.
The foregoing descriptions of the Exchange Agreement and Series M Certificate of Designation are qualified by reference to the full text of such documents which are filed as exhibits to this report.
Item 3.02 Unregistered Sales of Equity Securities.
Conversion of Notes
As previously reported, the Company entered into agreements by and between the Company and various investors by which investors hold convertible promissory notes convertible into shares of the Company’s common stock. Between December 11, 2019 and December 17, 2019, holders of convertible promissory notes converted an aggregate principal and interest amount of $27,089 into an aggregate of 281,784 shares of the Company’s common stock.
The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act since, among other things, the transactions did not involve a public offering.
Make Good Issuances
In connection with certain one-time make good agreements, on November 29, 2019, the Company issued an aggregate of 21,795 shares of its common stock to certain holders of its common stock.
The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act since, among other things, the transactions did not involve a public offering.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information under Item 1.01 is incorporated by reference into this Item 5.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 3.1 | Certificate of Designation of Series M 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. | ||
| Date: December 17, 2019 | By: | /s/ T. Riggs Eckelberry |
|
T. Riggs Eckelberry Chief Executive Officer |
||
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Exhibit 3.1
CERTIFICATE OF DESIGNATION
OF
ORIGNCLEAR, INC.
ESTABLISHING THE DESIGNATIONS, PREFERENCES,
LIMITATIONS AND RELATIVE RIGHTS OF ITS
SERIES M 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 up to eight hundred thousand (800,000) shares of Series M 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 M Preferred Stock” and the number of shares initially constituting such series shall be up to eight hundred thousand (800,000) shares.
SECTION 2. STATED VALUE. The Stated Value of the Series M Preferred Stock will be $25.00 per share.
SECTION 3. DIVIDENDS. The holders of outstanding shares of Series M Preferred Stock (the “Holders”) will be entitled to receive, out of any funds and assets of the Company legally available therefor, dividends payable monthly (within 3 business days of the end of each calendar month), at the annual rate of 10% of the Stated Value, payable in preference and priority to any payment of any dividend of the common stock of the Company (the “Common Stock”). The right to such dividends of the Holders of Series M Preferred Stock will be cumulative.
SECTION 4. LIQUIDATION. Upon any liquidation, dissolution or winding- up of the Company, the Series M Preferred Stock will entitle the Holders, out of the assets of the Company available for distribution to its shareholders upon such liquidation, an amount equal to the Stated Value, for each share of Series M Preferred Stock, plus any accrued but unpaid dividends on such shares, before any payment may be made or any assets distributed to the holders of the Common Stock.
SECTION 5. VOTING AND PROTECTIVE PROVISIONS. (a) Except as required by law or as specifically provided herein, the Holders of Series M Preferred Stock will not be entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting).
(b) So long as any shares of Series M Preferred Stock remain outstanding, the Company will not, without first obtaining the approval (by vote or written consent, as provided by law) of the Holders of at least a majority of the then outstanding shares of Series M Preferred Stock voting together as one class, alter or change the rights, preferences or privileges of the shares of the Series M Preferred Stock so as to affect materially and adversely such shares.
SECTION 6. CONVERSION. (a) Subject to Section 6(b), the Series M Preferred Stock will be convertible into shares of Common Stock (“Conversion Shares”) at any time at the option of the Holders, in an amount determined by dividing the amount of the Stated Value being converted by the Conversion Price (defined herein). To effect a conversion hereunder, the Holder shall provide the Company a notice of conversion substantially in the form of Exhibit A hereto. No fractional shares of Common Stock are to be issued upon the conversion of any Series M Preferred Stock, but rather the number of shares of Common Stock to be issued will be rounded up to the nearest whole number. For the avoidance of doubt, a Holder may not elect to convert any fraction of a share of Series M Preferred Stock. The “Conversion Price” will be equal to 80% of the average closing price of the Common Stock for the last five trading days prior to the date the Company receives the conversion notice (as adjusted for any stock splits, stock dividends, or similar transactions). Within three trading days of receipt of the conversion notice, the Company shall (i) deliver or cause to be delivered to the Holder a certificate for the Conversion Shares, (ii) or, if requested by the Holder, and there is a qualified offering statement for the issuance of the Conversion Shares (and the Company’s transfer agent for the Series M Preferred Stock is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, 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/Withdrawal at Custodian (“DWAC”) system.
(b) Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of the Series M 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 which 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 “Exchange Act”) and the rules thereunder) more than 4.99% of all of the Common Stock outstanding at such time (the “Maximum Percentage”).
SECTION 7. REDEMPTION.
The Company may in its sole discretion (to the extent it may lawfully do so), at any time commencing one year after the initial issuance date of the Series M Preferred Stock, redeem any outstanding shares of Series M Preferred Stock at a price equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event the Company exercises such redemption right for less than all of the then-outstanding shares of Series M Preferred Stock, the Company shall redeem the outstanding shares of the Holders of a pro rata basis. The Company may exercise such redemption right at any time by providing 30 days’ prior written notice of such redemption and payment of the redemption price to the Holders. For the avoidance of doubt, the Holders may, during such 30 day notice period, convert their outstanding shares of Series M Preferred Stock to Common Stock in accordance with Section 6. Upon payment of the redemption price by the Company in accordance herewith, the shares of Series M Preferred Stock that have been redeemed will revert to the status of authorized but unissued preferred stock.
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 the Holders of record at their respective addresses appearing on the books of the Company. Any notice to the Company will be by United States mail, postage prepaid, or provided by e-mail to the address below:
OriginClear, Inc.
525 S. Hewitt Street
Los Angeles, CA 90013
Email: riggs@originclear.com
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 Series M 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 11th day of December, 2019.
| /s/ T. Riggs Eckelberry | |
| Name: T. Riggs Eckelberry | |
| Title: Chief Executive Officer |
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Form of Conversion Notice
OriginClear, Inc. Series M Preferred Stock
In accordance with the Certificate of Designation of Series M Preferred Stock of OriginClear, Inc., the undersigned Holder of Series M Preferred Stock hereby elects to convert shares of Series M Preferred Stock to Common Stock as follows:
Holder:_____________________________
Number of Shares of Series M Preferred Stock held: _________________
Number of Shares of Series M Preferred Stock being converted: _____________
Stated Value of Shares of Series M Preferred Stock being converted: ______________
Number of Shares of Series M Preferred Stock held following conversion: ____________
Number of Conversion Shares to be issued and calculation of amount: _________________
Address for delivery of Conversion Shares: __________________
Or (if eligible) instruction for delivery by DWAC: _________________
Signature of Holder:
Date: __________
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