Section 5 – Corporate Governance and Management
Item 5.01
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Changes in Control of Registrant.
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On January 27, 2012, Michael Rosenberger, the Chief Executive Officer, Chief Financial Officer, Secretary and sole member of the board of directors of American Restaurant Concepts, Inc. (the “Company”), entered into a Stock Sell-Buy Agreement (as amended by those certain addendums dated March 7, 2012, May 1, 2012, May 4, 2012, May 15, 2012 and August 14, 2012, the “Agreement”) with Seenu G. Kasturi pursuant to which Mr. Rosenberger agreed to sell 15,530,000 shares (“Shares”) of the Company’s common stock, par value $0.01 per share (“Common Stock”), in exchange for $500,000 and an undertaking by Mr. Kasturi to pay certain operating expenses on behalf of the Company that are expected to be approximately $66,000 in amount (the “Transaction”). Mr. Kasturi agreed to pay for the Shares in cash out of his own personal cash resources.
Pursuant to the terms of the Agreement, the Transaction is expected to close the day after the later to occur of the following: (i) the date the Company’s Quarterly Report on Form 10-Q for its first fiscal quarter ended March 25, 2012 is completed and filed with the Securities and Exchange Commission (“SEC”), (ii) the date the Company’s Quarterly Report on Form 10-Q for its second fiscal quarter ended June 24, 2012 is completed and filed with the SEC, and (iii) the date the Common Stock is relisted on the Over-the-Counter Bulletin Board.
On August 14, 2012, the Shares represented approximately 45.3% of the outstanding shares of Common Stock. As a result, the sale of the Shares by Mr. Rosenberger to Mr. Kasturi could be deemed to result in a change in control of the Company on the date the Transaction closes.
In addition, pursuant to the terms of the Agreement, beginning on the date that is six months after the date the Transaction closes, Mr. Kasturi has the right to request that Mr. Rosenberger resign from all officer and director positions that he holds with the Company. No individuals are designated in the Agreement to fill these vacancies, and no individuals have yet been designated by Mr. Kasturi to fill these vacancies, if and when they occur. In the event Mr. Kasturi requests that Mr. Rosenberger resign from all officer and director positions with the Company and appoints other individuals to fill those vacancies, a change in control of the Company will occur.