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Item 5.03.
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Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
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On
August 18, 2021, the Company filed a Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual
Preferred Stock of Mechanical Technology, Incorporated (the “Certificate of Designations”) with the Nevada Secretary of
State to establish the voting powers, designations, preferences and relative participation and other rights and qualifications,
limitations and restrictions of the Series A Preferred Stock. As described in Item 1.01 above, on August 23, 2021, the Company
completed a public offering of, and issued, 720,000 Shares of Series A Preferred Stock. The following is a summary description of
those terms and the general effect of the issuance of the Shares on the Company’s other classes of registered
securities.
The
Series A Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon the Company’s liquidation,
dissolution or winding-up, rank: (1) senior to all classes or series of Common Stock and to all other capital stock issued by the Company
expressly designated as ranking junior to the Series A Preferred Stock; (2) on parity with any future class or series of the Company’s
capital stock expressly designated as ranking on parity with the Series A Preferred Stock; (3) junior to any future class or series of
the Company’s capital stock expressly designated as ranking senior to the Series A Preferred Stock; and (4) junior to all the Company’s
existing and future indebtedness.
The
Series A Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. In the event of the voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of shares the Series A Preferred
Stock are entitled to be paid out of the Company’s assets legally available for distribution to its stockholders (i.e.,
after satisfaction of all the Company’s liabilities to creditors, if any) and, subject to the rights of holders of any shares of
each other class or series of capital stock ranking, as to rights to the distribution of assets upon the Corporation’s voluntary
or involuntary liquidation, dissolution or winding up, senior to the Series A Preferred Stock, a liquidation preference of $25.00 per
share, plus any amount equal to any accumulated and unpaid dividends to the date of payment (whether or not declared), before any distribution
or payment may be made to holders of shares of Common Stock or any other class of or series of the Corporation’s capital stock
ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, junior
to the Series A Preferred Stock.
The
Company will pay cumulative cash dividends on the Series A Preferred Stock when, as and if declared by its board of directors (or a duly
authorized committee of its board of directors), only out of funds legally available for payment of dividends. Dividends on the Series
A Preferred Stock will accrue on the stated amount of $25.00 per share of the Series A Preferred Stock at a rate per annum equal to 9.0%
(equivalent to $2.25 per year), payable monthly in arrears. Dividends on the Series A Preferred Stock declared by our board of directors
(or a duly authorized committee of our board of directors) will be payable monthly in arrears on the final day of each month, beginning
on August 31, 2021.
Generally,
the Series A Preferred Stock is not redeemable by the Company prior to August 23, 2026. However, upon a change of control or delisting
event (each as defined in the Certificate of Designations), the Company will have a special option to redeem the Series A Preferred Stock
for a limited period of time.
Additionally,
the Series A Preferred Stock is generally not convertible into or exchangeable for any other property or securities of the Company. However,
upon a change of control or delisting event (each as defined in the Certificate of Designations), the holders of the Series A Preferred
Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder into a number of shares of Common
Stock, subject to important limitations.
As
further described in the Certificate of Designations, so long as any share of the Series A Preferred Stock remains outstanding, unless
the Company has either paid or declared and set apart for payment full cumulative dividends on the Series A Preferred Stock for all past
completed dividends, the Company will be restricted from making certain dividends and conducting certain redemption and repurchases with
respect to its capital stock. The restrictions in the foregoing sentence are subject to limited exceptions.
Holders
of shares of the Series A Preferred Stock generally have no voting rights, except as required by law and as provided in the Certificate
of Designations. Voting rights for holders of the Series A Preferred Stock exist primarily with respect to material and adverse changes
in the terms of the Series A Preferred Stock and the creation of additional classes or series of preferred stock that rank senior to
the Series A Preferred Stock.
The
Certificate of Designations became effective upon filing, and a copy is filed as Exhibit 4.1 to this Current Report on Form 8-K. The
above description of the Certificate of Designations is a summary and, as such, does not purport to be complete and is qualified in
its entirety by reference to the full text of the Certificate of Designations, which is incorporated herein by reference. A specimen
certificate representing the Series A Preferred Stock is filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated
herein by reference.