ARCI Appliance Recycling Centers of America

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On June 21, 2019, Appliance Recycling Centers of America, Inc. (the “Company,” “our,” or “we”) filed a Certificate of Correction (the “Certificate of Correction”) with the Office of the Secretary of State of the State of Nevada (the “Nevada Secretary of State”) to correct a ministerial error in our Articles of Incorporation, as file-stamped by such Office on March 12, 2018, in connection with our redomiciling from Minnesota to Nevada. The ministerial error involved the failure of our third-party service provider to provide a complete copy of our Articles of Incorporation to the Nevada Secretary of State for filing, specifically Section 3.2.1. A complete copy of our Articles of Incorporation was attached as Appendix B to our Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission (the “Commission”) on October 25, 2017.

On June 21, 2019, we filed a Certificate of Designation of Powers, Preferences, and Rights of Series A-1 Convertible Preferred Stock (the “Certificate of Designation”) with the Nevada Secretary of State. The Series A-1 Convertible Preferred Stock is being designated pursuant to guidance received from Nasdaq and shall have virtually all of the same rights, characteristics, and attributes as the Company’s Series A Convertible Preferred Stock, except as required by the Listing Qualifications staff of The Nasdaq Stock Market LLC (i.e., Section 3.2.5 in respect of voting rights of the Series A-1 Convertible Preferred Stock and Section 3.2.1(f) in respect of a Triggering Event, as such term is defined therein, and the formula to be applied in connection therewith), with respect to each of which requirements the Company has already been in compliance.

The filing of the Certificate of Designation was unanimously approved by the Board of Directors on June 18, 2019. The affirmative approval of a majority of the holders of the Series A Convertible Preferred Stock for the exchange of such shares into shares of Series A-1 Convertible Preferred Stock occurred as of June 19, 2019. The three holders of our Series A Convertible Preferred Stock are deemed to have exchanged their shares of Series A Convertible Preferred Stock for an equivalent number of shares of Series A-1 Convertible Preferred Stock, or an aggregate of 259,729 shares.  

The foregoing descriptions in respect of the Certificate of Correction and Certificate of Designation do not purport to be complete and each is qualified in its respective entirety by reference to the full texts of (i) the Certificate of Correction, which is filed as Exhibit 3.7 to this Current Report on Form 8-K, and (ii) the Certificate of Designation, which is filed as Exhibit 3.8 to this Current Report on Form 8-K, and each is incorporated herein by reference.

Exhibits 3.7 and 3.8 filed with this Current Report on Form 8-K and our Bylaws and First Amendment to our Bylaws, which were filed as Exhibit 3.4 to our Current Report on Form 8-K filed with the Commission on March 13, 2018, and Exhibit 3.1 to our Current Report on Form 8-K filed with the Commission on December 31, 2018, respectively, constitute our charter documents as in effect as of the date of this filing.