OWC Pharmaceutical Research Corp (OWCP)

[BruceLake]

The following is a clarification of a comment made on July 2, 2019 by MjMilo that has created some confusion:

DGF has already cashed out...the company is free and clear of DGF..they converted the remaining preferred shares at under .015....so it makes no sense to sell at prices below what they converted at...basic math.

Let's be clear, the comment was not made as a result of what management may have said or implied. It stemmed partly from conversations we had with each other and from the following two filings:

S-1 filed on May 31, 2019
https://www.sec.gov/Archives/edgar/data/1431934/000149315219008473/forms-1.htm
Prospectus filed on June 28, 2019
https://www.sec.gov/Archives/edgar/data/1431934/000149315219010341/form424b3.htm

Within the filings the following also created some confusion:

DESCRIPTION OF CAPITAL STOCK
As of May 17, 2019, there were issued and outstanding:
433 shares of our Series A Preferred Stock, which are currently convertible into 2,514,755,816 shares of our common stock;

In another section of these filings it stated:

As of May 17, 2019, there were issued and outstanding 433 shares of the Series A Preferred Shares, which are currently convertible into 2,514,755,816 shares of our common stock at a conversion price of $0.20, subject to adjustment pursuant to the anti-dilution provisions of the Preferred Shares.

At a conversion price of $0.20?

I sought clarification from Sigal Russo. Mordechai Bignitz replied as follows:

Dear Mr xxxxxxx
Further to your mail to Mr Koch and Sigal Russo who is out of office and to your friends call to the Sec , I will explain how we calculated the correct outstanding number of share to Discover fund.
As you probably remember Discover called a triggering event and as a result please see attached the two paragraphs in the COD related to number of shares that are still to be converted.
(a) “Triggering Event Conversion Amount” means, with respect to each Preferred Share converted pursuant to Section 5(c), the sum of (1) 125% of the Liquidation Preference plus (2) accrued and unpaid dividends plus (3) an additional dividend equal to 1.5%, compounded monthly, for the duration of such Triggering Event plus (4) any accrued and unpaid Late Charges with respect to any of the amounts set forth in (1) through (3) as of such Triggering Event Conversion Date.

(b) “Triggering Event Conversion Price” means, as of any Triggering Event Conversion Date, an amount equal to (A) 75% of the quotient determined by dividing (x) the sum of the three (3) lowest Closing Prices of the Common Stock during the period beginning ten (10) Trading Days prior to such Triggering Event Conversion Date and ending three (3) Trading Days after the shares of Common Stock are received into Holder’s brokerage account and fully cleared for trading, by (y) three (3), minus (B) $0.01.

The calculated price today is : 0.0028 and not 0.017

therefore the number of shares in the filling is correct .
If you need any other explain on it do not hesitate we are here to answer .

Mordechai Bignitz
CEO
OWC Pharmaceutical Research Corp (OWCP)
Tel : [phone]
Email: [e-mail]

Quite obviously the math was not that basic. Especially not having all of the missing pieces.

The takeaway from all this is that I couldn't help thinking that Bignitz appears to be almost gleeful and matter of fact in the way he explained the "punitive", or toxic if you will, calculations.