Item 5.03 Amendment to Articles of Incorporation
On January 11, 2017, Power Efficiency Corporation filed
a certificate of amendment to its Amended and Restated Certificate of Incorporation to effectuate a reverse stock split
which will serve to combine each 15 shares of issued and outstanding shares of Common Stock into 1 share (“Reverse
Split”).
The action was approved as of August 16, 2016. The Board
has waited to implement the Reverse Split for various business reasons. Holders of more than a majority of our voting
securities, including preferred stock and common stock, par value $0.001 per share (the “Common Stock”), who
collectively own approximately 65% of the voting rights of our combined Common Stock and preferred stock either directly or
indirectly (the “Voting Stockholders”) approved the Reverse Split by written consent pursuant to Section 242 of
the Delaware General Business Corporation Law. The Amendment to the Amended and Restated Certificate of Incorporation was filed with the State of Delaware on January 11, 2017.
The Board of Directors has decided to effectuate the reverse
split as of Tuesday, January 17, 2017 at 5:00 p.m (eastern time). Our stock symbol will temporarily be modified from PEFF to PEFF
D on Wednesday, January 18, 2017 for 20 twenty days. Trading of the Company’s Common Stock will remain on the OTC Pink Sheets
and trading will reflect the Reverse Split as of the morning of Wednesday, January 18, 2017.
As of August 16, 2016 (the “Record Date”)
for the action by written consent, we had 128,302,666 shares of Common Stock issued and outstanding. Additionally, we had
shares of Series B, C-1, D, and E preferred stock (collectively, the “Preferred Stock”), issued and outstanding,
representing an additional 352,200,200 aggregate voting shares (pre Reverse Split figure). The Common Stock and our
outstanding classes of Preferred Stock vote together as a single class and we received votes by written consent representing
approximately 65% of the total voting securities in favor of the Reverse Split.
The immediate effect of the Reverse Split will be to reduce
the number of issued and outstanding shares of Common Stock from 189,052,666 outstanding as of January 9, 2017 to approximately
12,603,511 shares (subject to rounding fractional shares down to the next whole share). The conversion ratios of each class of
Preferred Stock will be adjusted to reflect the Reverse Split. Our classes of Preferred Stock would be convertible into an aggregate
of approximately 23,480,013 shares of Common Stock after the Reverse Split, as follows:
Class of Preferred Stock
|
Pre-Split Conversion
|
Post-Split Conversion
|
|
|
|
Series B
|
13,300,000
|
|
866,667
|
|
|
|
|
Series C-1
|
3,462,500
|
|
230,833
|
|
|
|
|
Series D
|
30,437,700
|
|
2,029,180
|
|
|
|
|
Series E
|
305,000,000
|
|
20,333,333
|
|
Our Class E Preferred Stock will automatically convert into
Common Stock following the Reverse Split; the other classes will remain outstanding. The par value of our Common Stock (and all
Preferred Stock) will remain $0.001 per share and the number of shares of Common Stock authorized to be issued will remain at the
number authorized at the time the Reverse Split is effected, currently 350,000,000 shares. The current number of holders of record
of our Common Stock is 162.
A complete copy of the Certificate of Amendment to the
Amended and Restated Certificate of Incorporation is included as Exhibit 3.1 to this Form 8-K.