OWCP OWC Pharmaceuticals Research Corporation (CE)

Item 3.03 Material Modification to Rights of Security Holders.

On April 30, 2018, the Registrant, in connection with the Purchase Agreement, filed a Certificate of Designations with respect to its Series A Preferred Stock (the “Certificate of Designations”). The Company authorized 1,000 shares of its newly designated Series A Preferred Stock, par value $0.00001 per share (the “Preferred Shares”).

Each Holder of Preferred Shares is entitled to receive dividends on each Preferred Share, payable quarterly on March 31, June 30, September 30, and December 31, commencing June 30, 2018 (which shall be pro-rated), (the “Dividend Payment Date”), in an amount equal to five percent (5%) per annum of the Stated Value ($10,000.00 per Preferred Share) of each Preferred Share and which shall be cumulative. The dividends are due and payable in cash or freely tradable common stock of the Registrant in the sole discretion of the Registrant provided, however, that the Registrant may only elect to pay such a dividend in shares of Common Stock if, at the time such dividend is declared, the Registrant is in full compliance with all of the Equity Conditions as defined in the Certificate of Designations. In the event the Registrant properly elects to pay a dividend in shares of Common Stock, the number of shares of Common Stock issuable for each Preferred Share shall be equal to: (i) five percent (5%) of the Conversion Value (as defined in the Certificate of Designations) of such Preferred Share divided by (ii) an amount equal to (A) 85% of the quotient determined by dividing (x) the sum of the three (3) lowest closing prices of the Common Stock during the period beginning five (5) trading days prior to the Dividend Payment Date and ending three (3) trading days after the shares of Common Stock are received into the holder of Preferred Shares brokerage account and fully cleared for trading, by (y) three (3), minus (B) $0.01.

Each share of the Preferred Stock will have a liquidation preference of 120% of the Stated Value (as such term is defined in the Certificate of Designations) of a Preferred Share plus accrued but unpaid dividends and is convertible into shares of the Registrant’s Common Stock upon the terms and conditions set forth in the Certificate of Designations.

The Registrant must redeem half the outstanding shares of Preferred Shares beginning 270 days after the closing of the Purchase Agreement in an amount equal to 110% of the Stated Value in cash or Common Stock upon the terms and conditions set forth in the Certificate of Designations. The Registrant must also redeem the Preferred Shares upon any Bankruptcy Triggering Event (as such term is defined in the Certificate of Designations) in an amount set forth in the Certificate of Designations. The Certificate of Designations provides for other redemption rights as well.

Holders of Preferred Shares and the holders of shares of Common Stock will vote on all matters requiring a vote of the shareholders of the Registrant as a single class. Subject to the terms and conditions set forth in the Certificate of Designations, each Holder will be entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s Preferred Shares would be convertible using the record date for determining the stockholders of the Registrant eligible to vote on such matters as the date as of which the conversion price is calculated. Notwithstanding the foregoing, the holders of Preferred Shares will also be entitled to vote as a separate class on specific matters or upon the occurrence of certain events as governed by Delaware law.

The foregoing summary of the Certificate of Designation is not complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is attached hereto as Exhibit 3.1 and is incorporated herein by reference.