13D Filing: Van Steenwyk Matthew and American Power Group Corp (APGI)

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Arrow is also deemed to beneficially own (i) New Warrants exercisable for 15,000,000 shares of Common Stock; (ii) Series C Warrants exercisable for 7,789,726 shares of Common Stock; and (iii) Series A Warrants exercisable for 1,540,830 shares of Common Stock.

On December 31, 2015, Arrow received 46,047 shares of Common Stock as a payment-in-kind dividend on 20.4084 shares of the Series A Preferred Stock owned at the time of the dividend payment date and 451,264 shares of Common Stock as a payment-in-kind dividend on 200 shares of the Series B Preferred Stock owned at the time of the dividend payment date (497,311 shares of Common Stock in all).

Arrow acquired 220.4084 shares of Series D-2 Preferred Stock on January 8, 2016, when it exchanged its 20.4084 shares of the Company’s Series A Preferred Stock and 200 shares of the Company’s Series B Preferred Stock for an equal number of shares of the new Series D-2 Preferred Stock in connection with the execution of the Purchase Agreement and consummation of the transactions contemplated thereby. In connection with the same series of transactions, Arrow acquired 150 shares of the newly-created Series D-3 Preferred Stock in exchange for the 150 shares of Series C Preferred Stock held by Arrow prior to execution of the Purchase Agreement.

In addition, on January 8, 2016 and as set forth in the Purchase Agreement, Arrow purchased 15 shares of Series D Preferred Stock at the stated value of $100,000 per share, and convertible at the option of the holder into 15,000,000 shares of Common Stock in the aggregate, and warrants to purchase 30,000,000 shares of Common Stock, 15,000,000 of which are immediately exercisable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Registration Rights Agreement

In connection with the transactions contemplated by the Securities Purchase Agreement, the parties to that certain Registration Rights Agreement dated as of June 2, 2015, and as amended on August 24, 2014, executed the second amendment thereto, extending the rights under the Agreement to the purchasers of shares of (i) Series D Convertible Preferred Stock, (ii) Series D-2 Convertible Preferred Stock, and/or (iii) Series D-3 Convertible Preferred Stock.

Voting Agreement

In connection with the financing, the Company’s voting agreement dated April 30, 2012, among the Company and certain investors, was amended and restated to provide that Arrow will have the rights (i) to designate two of the three members of the Board of Directors who are elected by the holders of the Company’s preferred stock voting as a separate class, (ii) to nominate the three candidates who are elected by the holders of shares of Common Stock voting as a separate class, and (iii) to nominate one candidate who will be elected by the holders of shares of Common Stock and of all classes and series of preferred stock voting together as a single class. Arrow has agreed to nominate the Company’s chief executive officer and at least one candidate who would be deemed to be an independent director for election by the holders of Common Stock.