Filing Details

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [ ]

* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

⁽¹⁾  On November 21, 2016, the Issuer agreed to sell 1,000 restricted shares of its Series A Preferred Stock to the Reporting Person for $9,000. The shares of Series A Preferred Stock will be issued within a reasonable time following filing of the Certificate of Designation of Rights, Privileges and Preferences of the Series A Preferred Stock with the Utah Division of Corporations & Commercial Code, which occurred on November 29, 2016. The Series A Preferred Stock is convertible to Common Stock of the Company on a one-share for one-share basis, based on the number of shares of Series A Preferred Stock converted and not the number of votes represented by such converted shares of Series A Preferred Stock. The Series A Preferred Stock is convertible only by the holder thereof and is convertible at any time.

Includes 481,250 shares of Common Stock currently held by Reporting Person, and assumes vesting of a 750 share restricted grant of Common Stock (scheduled to vest on December 31, 2016) (“Restricted Stock Grant”) and the conversion of 1,000 shares of Series A Preferred Stock held by the Reporting Person into 1,000 shares of Common Stock.

⁽²⁾  These shares are held in the name of the Tom Kubota Revocable Trust of 2013 (the “Trust”). The Reporting Person is the sole Trustee of the Trust and, except as otherwise described in footnote 3 below, may be deemed to have voting and dispositive power over the shares held by the Trust.

⁽³⁾  Pursuant to the terms of the Restricted Stock Grant, the Reporting Person has no right to dispose of these 750 shares of Common Stock until vesting of the Restricted Stock Grant on December 31, 2016, assuming vesting conditions are satisfied.  The Reporting Person does, however, have the right to vote the 750 share of Common Stock prior to vesting.

The acquisitions described herein were not for the purpose of changing control of the Issuer.  Prior to and following the acquisitions described herein, the Reporting Person was and continues to be the Chief Executive Officer and President and Chairman of the board of directors (the “Board”) of the Issuer.  Prior to the acquisitions, the Reporting Person was the single largest holder of Common Stock of the Issuer, owning approximately 60% of the outstanding Common Stock of the Issuer.  The Reporting Person was awarded the Restricted Stock Grant by the Board.  He acquired 1,000 shares of Common Stock in an open market transaction because they were available for sale and he elected to acquire them.  The Reporting Person may, from time to time, acquire additional shares of Common Stock.

The Board and management of the Issuer believe there may be opportunities to expand the Issuer’s business through strategic acquisitions or capital raising transactions.  The limited number of outstanding shares of Common Stock of the Issuer, however, restricts its use as consideration for acquisitions or capital raising transactions without jeopardizing the continuity of pursuing the Issuer’s strategic goals and objectives.  The Reporting Person agreed to acquire the Series A Preferred Stock to better position the Issuer to take advantage of potential strategic opportunities that may become available in a manner that will center the economic value of the Issuer among the holders of Common Stock while at the same time increasing the likelihood of continuity of pursuing the Issuer’s strategic goals and objectives in the event of an acquisition or capital raising transaction using the Company’s Common Stock. To the knowledge of Reporting Person the Issuer is not currently engaged in discussions with any party regarding a possible business acquisition or capital raising transaction and you should not assume such to be the case.  No assurance can be given that the Issuer will seek to, or can successfully identify or complete potentially strategic opportunities in the future.