Item 3.03 Material Modification to
Rights of Security Holders.
On June 20, 2016, Knowledge Machine
International, Inc., a Nevada corporation (the “
Company
”), filed the Certificate of Designation
Establishing the Designation, Powers, Preferences, Limitations, Restrictions, and Relative Rights of Series A Preferred Stock
(the “
Designation
”). A copy of the Designation, as filed with the Secretary of State of the State of
Nevada, is attached hereto as Exhibit 3.1.
Series A Convertible Preferred Stock
We are authorized to issue 1,000,000 preferred
shares, par value $0.001 per share, including 100,000 of which are designated as Series A Shares. The Series A Shares will have
the following rights and preferences:
·
The Series A Shares will be convertible into shares of our Common Stock at any time at a conversion rate of 80 shares of
Common Stock for each Series A Share converted, subject to adjustments in the event of stock splits, recapitalizations, or similar
events, provided that the Series A Shares will not be adjusted for any reverse stock split for a period of one year from the filing
date of the Certificate of Designations creating the series, which is intended to occur with the first sale of Series A Shares
in this offering.
·
The Series A Shares will be entitled to the number of votes equal to the number of whole shares of Common Stock into which
the Series A Shares are convertible and vote together with the holders of the Common Stock, except as otherwise required by Nevada
law or as provided in the Certificate of Designations for the Series A Shares.
·
A majority vote of the outstanding Series A Shares voting as a single class is required for any of the following actions:
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o
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Any alteration, amendment, or change in the rights, preferences or privileges of the Series A Shares;
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o
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Any amendment to the Company’s Certificate of Incorporation or Bylaws that would impair or
reduce the rights of the Series A Shares; and
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o
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Any transaction resulting in the redemption of any of the Company’s securities.
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·
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our Company (including a disposition
of substantially all of our assets, whether by sale, merger or other reorganization, or a sale of over 50% of the ownership of
the Company), the holders of the Series A Shares will be entitled to receive the greater of 150% of the purchase price of the Series
A Shares, plus accrued dividends, if any, or the amount distributed to the holders of the Common Stock as though the Series A Shares
were converted. Liquidating distributions will be in preference to the holders of Common Stock.
·
The holders of the Series A Shares are not entitled to preference over the common shares on dividends, if any, declared
by the Board.
·
There are no redemption or sinking fund provisions applicable to the Series A Shares.