Series C Non-Voting Convertible Preferred Stock
In this section, we summarize the terms of the Certificate of Designations, Preferences and Rights of Series C Non-Voting Convertible Preferred Stock (the Series C Designation) that we filed with the Utah Division on September 29, 2017. The following summary is qualified in its entirety by the terms
contained in the Series C Designation, a copy of which has been incorporated by reference from our filings with the SEC as an exhibit to the registration statement of which this prospectus forms a part. As of May 10, 2018, there were
1,440,000 shares of Series C Preferred issued and outstanding, convertible into 1,440,000 shares of common stock, and no shares of Series C Preferred available for future issuance.
Each share of Series C Preferred has no par value per share and a stated value equal to $2.50, with the aggregate stated value of all
shares of Series C Preferred being $7.0 million. The Series C Preferred is non-voting.
Except as discussed below, the Series C Preferred was converted automatically into shares of common stock, at a conversion price of $2.50
per share, upon receipt of shareholder approval at the time of our Annual Meeting of Shareholders held November 29, 2017. Certain holders of the Series C Preferred elected to continue to hold their shares following the mandatory conversion
date as permitted by the Series C Designation, subject to beneficial ownership and conversion restrictions such that we may not effect conversion of any such holders shares of Series C Preferred, and the holder may not convert any
portion of the Series C Preferred, to the extent that, after giving effect to such conversion the holder or any of such holders affiliates would beneficially own in excess of the Beneficial Ownership Limitation. Subject to this
limitation, shares of Series C Preferred are convertible automatically into shares of common stock, at the conversion price of $2.50 per share.
Outstanding shares of Series C Preferred have no dividend, liquidation preference or redemption rights, and remain subject to the
Beneficial Ownership Limitation elected by the holder.
At any time, in the event of a fundamental transaction defined in the
Series C Designation (such as a merger, consolidation, sale of all or substantially all of our assets, etc.), we may force the conversion of the outstanding Series C Preferred by delivering a written notice to all holders thereof at least
10 trading days prior to the date of consummation of the fundamental transaction; provided, however, that, if such forced conversion would result in the issuance of shares of common stock (or common stock of the successor or
acquiring corporation in such fundamental transaction) to such holder in violation of the Beneficial Ownership Limitation, such forced conversion shall apply to the extent that, and only to the extent that, such issuance of shares of common stock
(or common stock of the successor or acquiring corporation in such fundamental transaction) to the holder would not violate the Beneficial Ownership Limitation.
In connection with the issuance of the Series C Preferred, we entered into a registration rights agreement with the Series C
Preferred investors. Pursuant to the registration rights agreement, we filed a registration statement to register the resale of all shares of common stock issuable upon conversion of the Series C Preferred (Registration Statement File No. 333-220959, effective October 26, 2017).
Series D
Non-Voting Convertible Preferred Stock
In connection with the acquisition of B&C, we
issued 1,581,935 shares of newly designated Series D Non-Voting Convertible Preferred Stock (the Series D Preferred). The rights and preferences of the Series D Preferred are defined
by the Certificate of Designations, Preferences, and Rights of the Series D Non-Voting Convertible Preferred Stock (the Series D Designation) filed by us on September 29, 2017
with the Utah Division. We encourage you to read the Series D Designation thoroughly. The following summary is qualified in its entirety by the Series D Designation, a copy of which has been incorporated by reference from our filings with
the SEC as an exhibit to the registration statement of which this prospectus forms a part.
Each share of Series D Preferred has no
par value per share and a stated value equal to $2.52855, with the aggregate stated value of all shares of Series D Preferred being $4.0 million. The Series D Preferred is non-voting. The
Series D Preferred originally accrued an annual dividend at a rate of 6.0% to be paid in cash. Upon receipt of shareholder approval at our Annual Meeting of Shareholders held November 29, 2017, all issued and outstanding shares of
Series D Preferred were automatically converted into shares of our common stock, on a one-for-one basis. As of May 10, 2018, there were no shares of
Series D Preferred issued and outstanding, and no shares of Series D Preferred available for future issuance.
10