Ocean Thermal Energy Corp 8-K

What Happened

• On July 7, 2026 Ocean Thermal Energy Corp (OTEC) sold two newly‑authorized Series E Preferred shares to two private investors at $10,000 per share ($20,000 total). The sales were made in a transaction exempt from registration under Section 4(a)(2) and Regulation D.
• On the same date OTEC filed a Certificate of Designation with the Nevada Secretary of State creating up to 150 shares of Series E Preferred Stock and describing their key terms. The Form 8-K was filed July 10, 2026 and signed by CEO/CFO Jeremy P. Feakins.

Key Details

• Initial sale: 2 shares sold at $10,000 each; $20,000 aggregate.
• Authorized amount: up to 150 Series E Preferred Shares, par value $0.001.
• Liquidation value & dividend: $10,000 liquidation value per share; 8.0% annual cumulative dividend payable in cash or in common stock.
• Conversion triggers: preferred shares convert into common stock upon (a) execution of a power purchase agreement or related commercial contract for OTEC services, (b) a change of control, or (c) a significant public offering of company shares.
• Conversion calculation: number of common shares issuable is based on the 10‑day volume‑weighted average price (VWAP) of common stock before conversion, multiplied by 0.5.
• Redemption & voting: OTEC may redeem the Preferred Shares after two years before conversion; Preferred Shares carry limited voting rights for certain matters (e.g., authorizing senior shares, changing terms, redemption, bankruptcy).

Why It Matters

• This is a financing move to raise capital and shore up the company’s balance sheet; while the initial issuance was small ($20,000), up to 150 Preferred Shares could represent up to $1.5 million in liquidation value if fully issued.
• The Preferred Shares are convertible and dividends may be paid in common stock, which creates potential dilution for common shareholders if conversions or dividend-share payments occur. The conversion formula (VWAP × 0.5) uses half the recent VWAP as part of the calculation, which can increase the number of common shares issued on conversion versus a straight VWAP conversion.
• Voting impact is limited until conversion, so immediate control changes are unlikely from this issuance alone, but investors should watch for additional issuances, conversion events (such as a power purchase agreement or a public offering), or redemptions that would affect share count and capital structure.