OWC Pharmaceutical Research Corp (OWCP)

[GP65]

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As previously reported by OWC Pharmaceutical Research Corp. (the “Company”), it sold to Discover Growth Fund (“Discover”) 500 shares of its new series of preferred stock designated as Series A Convertible Preferred Stock (the “Preferred Stock”), which were initially convertible into an aggregate of 37,500,000 shares of the Company’s common stock, par value $0.00001 per share (“Common Stock”), subject to adjustments. On January 31, 2019, and at times prior to then, the Company received notices of conversion from Discover to convert an aggregate of 35 shares of Preferred Stock, with a stated value of $10,000 per share, into an aggregate of 7,376,090 shares of Common Stock (the “Conversion”). From December 11, 2018 through February 5, 2019, the Company effected the Conversion and issued the investor an aggregate of 7,504,842 shares of Common Stock, which constitutes greater than 5% of the number of shares of common stock outstanding as reported in the Company’s last Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.

These securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. All of the securities were issued without registration under the Securities Act of 1933 in reliance upon the exemption provided in Section 4(a)(2).