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Exhibit 3.1
ARTICLES
OF AMENDMENT
OF
COMMAND
CENTER, INC.
Pursuant to the
provisions of the Washington Business Corporation Act, Chapter
23B.10.020 RCW, the following Articles of Amendment to Articles of
Incorporation are submitted for filing.
ARTICLE
I
Article
IV of the Corporation’s Articles of Incorporation is amended
and restated in its entirety. The text of Article IV as amended is
set forth below:
“Article
IV
Authorized Capital
Stock
a)
The authorized
capital stock of the Corporation shall consist of two classes of
stock, designated as Common Stock and Preferred Stock.
Effective at 5 p.m.
Eastern Time on December 7, 2017 (such time, on such date, the
“Effective
Time”) pursuant to the Washington Business Corporation
Act and these Articles of Amendment to the Articles of
Incorporation, as amended, (i) each twelve (12) shares of Common
Stock authorized, issued and outstanding, or held by the
Corporation in treasury stock immediately prior to the Effective
Time shall, automatically and without any action on the part of the
respective holders thereof, be combined and converted into one (1)
share of Common Stock; and (ii) each twelve (12) shares of
Preferred Stock authorized immediately prior to the Effective Time
shall automatically be combined and converted into one (1) share of
Preferred Stock (the “2017 Reverse Stock
Split”).
The
total number of shares of Common Stock that the Corporation will
have authority to issue following the Effective Time of the 2017
Reverse Stock Split is Eight Million Three Hundred Thirty-Three
Thousand Three Hundred and Thirty-Three (8,333,333). The shares of
Common Stock shall have a par value of $0.001 per share. All of the
Common Stock authorized herein shall have equal voting rights and
powers without restrictions in the preference.
No
fractional shares shall be issued in connection with the 2017
Reverse Stock Split. Stockholders who otherwise would be entitled
to receive fractional shares of Common Stock shall be entitled to
receive cash (without interest or deduction) from the
Corporation’s transfer agent in lieu of such fractional share
interests upon the submission of a transmission letter by a
stockholder holding the shares in book-entry form and, where shares
are held in certificated form, upon the surrender of the
stockholder’s Old Certificates (as defined below), in an
amount equal to the product obtained by multiplying (a) the closing
price per share of the Common Stock as reported on the OTC Markets
as of the date of the Effective Time, by (b) the fraction of one
share owned by stockholder, and (c) twelve (12) the ratio of the
2017 Reverse Stock Split. Each certificate that immediately prior
to the Effective Time represented shares of Common Stock
(“Old
Certificates”), shall thereafter represent that number
of shares of Common Stock into which the shares of Common Stock
represented by the Old Certificate shall have been combined,
subject to the elimination of fractional share interests as
described above.
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The
total number of shares of Preferred Stock that the Corporation will
have authority to issue following the Effective Time of the 2017
Reverse Stock Split is Four Hundred and Sixteen Thousand Six
Hundred and Sixty-Six (416,666). The shares of Preferred Stock
shall have a par value of $0.001 per share. The authorized but
unissued shares of Preferred Stock may be divided into and issued
in designated series from time to time by one or more resolutions
adopted by the Board of Directors. The Directors in their sole
discretion shall have the power to determine the relative powers,
preferences, and rights of each series of Preferred
Stock.
b)
First Series of Preferred Stock
The
designations, powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, with respect
to the first series of Preferred Stock are as follows:
1.
Designation. The first series
of the Preferred Stock of the Corporation authorized by the
Articles of Incorporation, as amended, will be designated as Series
A Preferred Stock (the “Series A Preferred
Stock”).
2.
Number of Shares. Forty
Thousand (40,000) shares of the authorized but previously unissued
shares of Preferred Stock will be designated as Series A Preferred
Stock.
3.
Par Value. The Series A
Preferred Stock will have a par value of $0.001 per
share.
4.
Cumulative Dividend. From and
after the date of the issuance of any shares of Series A Preferred
Stock, dividends at the rate per annum of $5.00 per share shall
accrue on such shares of Series A Preferred Stock (subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affect such
shares) (the “Accruing Dividends”).
Accruing Dividends shall accrue from day to day, whether or not
declared, and shall be cumulative; provided however, that except as
set forth in the following sentence of this Paragraph 4 or in
Paragraph 6 and 9, the Corporation shall be under no obligation to
pay such Accruing Dividends. The Corporation shall not declare, pay
or set aside any dividends on shares of any other class or series
of capital stock of the Corporation (other than dividends on shares
of Common Stock payable in shares of Common Stock) unless (in
addition to the obtaining of any consents required elsewhere in the
Articles of Incorporation) the holders of the Series A Preferred
Stock then outstanding shall first receive, or simultaneously
receive, a dividend on each outstanding share of Series A Preferred
Stock in an amount at least equal to the greater of (i) the amount
of the aggregate Accruing Dividends then accrued on such share of
Series A Preferred Stock and not previously paid and (ii) (A) in
the case of a dividend on Common Stock or any class or series that
is convertible into Common Stock, that dividend per share of Series
A Preferred Stock as would equal the product of (1) the dividend
payable on each share of such class or series determined, if
applicable, as if all shares of such class or series had been
converted into Common Stock and (2) the number of shares of Common
Stock issuable upon conversion of a share of Series A Preferred
Stock, in each case calculated on the record date for determination
of holders entitled to receive such dividend, or (B) in the case of
a dividend on any class or series that is not convertible into
Common Stock, at a rate per share of Series A Preferred Stock
determined by (1) dividing the amount of the dividend payable on
each share of such class or series of capital stock by the original
issuance price of such class or series of capital stock (subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such
shares) and (2) multiplying such fraction by an amount equal to the
Series A Original Issue Price (as defined below); provided that, if
the Corporation declares, pays or sets aside, on the same date, a
dividend on shares of more than one class or series of capital
stock of the Corporation, the dividend payable to the holders of
Series A Preferred Stock pursuant to this Paragraph 4 shall be
calculated based upon the dividend on the class or series of
capital stock that would result in the highest Series A Preferred
Stock dividend. The “Series A Original Issue
Price” shall mean $100 per share, subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect
to the Series A Preferred Stock.
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5.
Voting Rights. The Series A
Preferred Stock shall have one vote per share of Series A Preferred
Stock held, and shall be entitled to vote at elections of directors
and on other matters submitted to the shareholders of the
Corporation. In matters requiring class voting, the holders of the
outstanding Series A Preferred Stock shall vote together as a
class.
6.
Redemption. The Series A
Preferred Stock may be redeemed by the Corporation at any time
after April 1, 2007 at the Series A Original Issuer Price per
share, plus any Accruing Dividends accrued but unpaid thereon,
whether or not declared, together with any other dividends declared
but unpaid thereon. Upon a call for redemption, the holders of the
Series A Preferred Stock will have a period of thirty (30) days in
which to elect to convert the shares to Common Stock provided in
the conversion privilege granted herein.
7.
Conversion. The Series A
Preferred Stock may be converted into Common Stock at any time
after purchase at a conversion ratio of twenty (20) shares of
Common Stock for each share of preferred stock converted, provided
conversion occurs within twelve months of the purchase date of the
Series A Preferred Stock. If conversion occurs after the end of the
twelfth month following the purchase date, the conversion ration
shall be reduced by Three Percent (3%) each year thereafter. For
example, the conversion ration in year two will be 19.417 (20
1.03). This conversion calculation results in a Common Stock
equivalent price of $5.00 per share in year one, increasing by
Three Percent (3%) per year thereafter until converted. The Board
of Directors may designate the procedures for conversion by
resolution after the creation of the Series A Preferred Stock. In
order to convert the Series A Preferred Stock into Common Stock,
the shareholders shall surrender, at the principal office of the
Corporation, the certificate(s) representing the Series A Preferred
Stock duly endorsed to the Corporation and give written notice to
the Corporation that the shareholder elects to convert the Series A
Preferred Stock. The conversion right in respect to the Series A
Preferred Stock shall be deemed to have been exercised upon receipt
by the Corporation of the Series A Preferred Stock certificate(s)
so endorsed and accompanied by such written notice. As of such
receipt, the shareholder shall be treated for all purposes as the
record holder of the Common Stock into which the Series A Preferred
Stock is convertible. Within a reasonable time thereafter, the
Corporation shall issue and deliver to the shareholder certificates
representing the number of shares of Common Stock into which the
Series A Preferred Stock has been converted. Thereupon, the Series
A Preferred Stock shall be deemed to be satisfied and discharged,
and the shares of the Common Stock into which the Series A
Preferred Stock shall be so converted shall be fully paid and
non-assessable. Each certificate representing the shares of Common
Stock into which the Series A Preferred Stock has been converted
shall bear a restrictive legend.
8.
Anti-Dilution.
a.
The Series A
Preferred Stock is convertible at the rate set forth in Paragraph 7
above. This equates to an initial Common Stock equivalent price of
$5.00 per share in the first year after purchase. In the event the
Corporation issues Additional Shares of Common Stock (as defined
below) that would have the effect of increasing the number of
shares of Common Stock outstanding without a corresponding payment
in an amount equal to at least the $5.00 per share in the first
year after purchase, then the shareholder holding the Series A
Preferred Stock shall be entitled to an equitable adjustment in the
conversion price so that the shareholder receives the benefit of
the negotiated conversion price in year one. In the succeeding
years, the Common Stock equivalent price of $5.00 per share shall
be increased Three Percent (3%) per year in accordance with
Paragraph 7, and the anti-dilution provisions of this Paragraph 8
shall apply in any given year to the increased Common Stock
equivalent price then applicable as provided in Paragraph
7.
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b.
For purposes of
this Paragraph 8, the following definitions shall
apply:
i.
“Option”
shall mean rights, options or warrants to subscribe for, purchase
or otherwise acquire Common Stock or Convertible
Securities.
ii.
“Series A
Original Issue Date” shall mean the date on which the first
share of Series A Preferred Stock was issued.
iii.
“Convertible
Securities” shall mean any evidence of indebtedness, shares
or other securities directly or indirectly convertible into or
exchangeable for Common Stock, but excluding Options.
iv.
“Additional
Shares of Common Stock” shall mean all shares of Common Stock
issued by the Corporation after the Series A Original Issue Date,
other than the following shares of Common Stock, and shares of
Common Stock deemed issued pursuant to the following Options and
Convertible Securities:
1.
shares of Common
Stock, Options or Convertible Securities issued as dividend or
distribution on Series A Preferred Stock;
2.
shares of Common
Stock or Options issued to employees or directors of, or
consultants or advisors to, the Corporation or any of its
subsidiaries pursuant to a plan, agreement or arrangement approved
by the Board of Directors of the Corporation; or
3.
shares of Common
Stock or Convertible Securities actually issued upon the exercise
of Options or shares of Common Stock actually issued upon the
conversion or exchange of Convertible Securities in each case
provided such issuance pursuant to the terms of such Option or
Convertible Security;
4.
shares of Common
Stock, Options or Convertible Securities issued to banks, equipment
lessors, or other financial institutions, or to real property
lessors, pursuant to a debt financing, equipment leasing, or real
property leasing transaction approved by the Board of Directors of
the Corporation; or
5.
shares of Common
Stock issued or issuable pursuant to: (i) a sale by the Corporation
of its Common Stock in a firm commitment underwritten public
offering pursuant to a registration statement on Form S-1 or Form
SB-2 under the Securities Act of 1933, as amended, the public
offering price of which which was not less than $12,000,000 in the
aggregate (a “Qualified Public Offering”), or (ii) the
exercise of warrants or rights granted to underwriters in
connection with a Qualified Public Offering.
c.
No adjustment in
the Series A Conversion Price shall be made as the result of the
issuance of Additional Shares of Common Stock if the Corporation
receives written notice from the holders of at least a majority of
the then outstanding shares of Series A Preferred Stock agreeing
that no such adjustment shall be made as the result of the issuance
of such Additional Shares of Common Stock.
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9.
Liquidation Preference. In the
event of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the Corporation available for distribution to its
stockholders (on a pari passu basis with the holders of any series
of Preferred Stock ranking on liquidation on a parity with the
Series A Preferred Stock), and before any payment shall be made to
the holders of Common Stock or any other class or series of capital
stock ranking on liquidation junior to the Series A Preferred Stock
by reason of their ownership thereof, an amount per share equal to
the greater of (i) the Series A Original Issue Price, plus any
Accruing Dividends accrued but unpaid thereon, whether or not
declared, together with any other dividends declared but unpaid
thereon, or (ii) such amount per share as would have been payable
had each such share been converted into Common Stock pursuant to
Paragraph 7 above immediately prior to such liquidation,
dissolution, or winding up. If upon any such liquidation,
dissolution, or winding up of the Corporation, the assets of the
Corporation available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series A Preferred
Stock and any series of Preferred Stock ranking on liquidation on a
parity with the Series A Preferred Stock the full amount to which
they shall be entitled under this Paragraph 9, the holders of
shares of Series A Preferred Stock and any series of Preferred
Stock ranking on liquidation on a parity with the Series A
Preferred Stock shall share ratably in any distribution of the
assets available for distribution in proportion to the respective
amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full. After the payment of
all preferential amounts required to be paid to the holders of
shares of Series A Preferred Stock and any other series of
Preferred Stock of the Corporation ranking on liquidation senior to
the Common Stock, the remaining assets of the Corporation available
for distribution to its stockholders shall be distributed among the
holders of shares of Common Stock, pro rate based on the number of
shares held by each such holder.
10.
Sinking Fund. No sinking fund
will be established for the redemption of the Series A Preferred
Stock.
11.
Registration Rights. The Series
A Preferred Stock has not been registered and constitutes
“restricted securities” as that term is defined in Rule
144 adopted under the United States Securities Act of 1933, as
amended. No registration rights are granted in connection with the
issuance of the Series A Preferred Stock or the Common Stock
issuable on conversion of the Preferred Stock.”
ARTICLE
II
The
amendment was adopted by the Board of Directors on November 11,
2017.
ARTICLE
III
Shareholder action
on the amendment was not required. The amendment was duly adopted
by the Board of Directors by resolution without shareholder
action.
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IN WITNESS WHEREOF,
the Corporation has caused this Articles of Amendment to be
executed on this 27th day of November, 2017.
COMMAND
CENTER, INC.
By:
/s/Brendan
Simaytis
Name:
Brendan Simaytis
Title:
Secretary
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