Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
February 5, 2019, the Board of Directors (the “Board”) of Generation Alpha, Inc. (the “Company”) increased
the number of directors and appointed Mr. David Lenigas as a director of the Company, effective immediately.
David
Lenigas, age 57, is an experienced executive with significant global resources and corporate experience, having served as executive
chairman, chairman, and non-executive director of many public listed companies in London, Canada, Johannesburg, and Australia.
Mr. Lenigas currently serves as Executive Chairman of (i) AfriAg Global Plc, a NEX listed global food and logistics company, focused
on the agricultural and medicinal cannabis sectors (since June 2016), and (ii) Doriemus Plc, an Australia Securities Exchange
listed oil and gas company (since June 2016).
In
addition, Mr. Lenigas currently serves on the board of (i) Clancy Exploration, an Australia Securities Exchange listed mining
company (non-executive chairman since June 2017), (ii) Southern Hemisphere Mining Limited, an Australia Securities Exchange listed
mining company (non-executive chairman since March 2017), (iii) Anglo African Agriculture Plc, a London Stock Exchange listed
agricultural company (non-executive chairman since November 2016), (iv) LGC Capital Ltd., a TSX Venture Exchange listed cannabis
investment company (co-chairman since July 2016), (v) Macarthur Minerals Limited, a TSX Venture Exchange listed mining company
(director since July 2016), (vi) AMKI Investments Limited, a private investment company (director since March 2015), and (vii)
Hampton Bay Capital Inc., a private capital pool company that has applied to be listed on the TSX Venture Exchange.
Mr.
Lenigas has also previously served on the board of (i) Artemis Resources Limited, an Australian Securities Exchange listed mining
company (executive chairman between November 2016 and February 2019), (ii) Auroch Minerals Limited, an Australian Securities Exchange
listed mining company (non-executive director between November 2016 and June 2018), (iii) AfriAg Plc, a London AIM listed agriculture
logistics company (executive chairman between November 2012 and December 2015), (iv) TravelWelcome Ltd., a private travel agency
(director between October 2015 and July 2016), (v) Bacanora Minerals Limited, a London AIM and TSX Venture Exchange dual listed
mining company (non-executive director between March 2015 and July 2016), (vi) Leni Gas Cuba Limited, a NEX listed business development
company (executive chairman between April 2015 and July 2016), (vii) Evocutis Plc, a London AIM listed dermatology company (non-executive
director between September 2014 and December 2015), (viii) Horse Hill Developments Ltd., a UK based private oil and gas exploration
company (chairman between September 2015 and July 2015), (ix) Octagonal Plc, a London AIM listed investment and holding company
(non-executive director between June 2014 and June 2015), (x) Inspirit Energy Holdings Plc, a London AIM listed energy company
(non-executive chairman between August 2013 and December 2015), (xi) REM Mexico Limited, a private energy company (director between
May 2013 and August 2018), (xii) Polemos Plc, a London AIM listed investment company (executive chairman between April 2013 and
August 2014), (xiii) UK Oil and Gas Investments Plc, a London AIM listed oil and gas exploration company (executive chairman between
November 2013 and July 2015), (xiv) Stellar Resources Plc, a London AIM listed exploration and development company (chairman between
November 2011 and October 2014), and (xv) Rare Earth Minerals Plc, a London AIM listed minerals and metals investment company
(chairman between January 2010 and December 2015).
Mr
Lenigas has a Bachelor of Applied Science (Mining Engineering) (Distinction) from Curtin University’s Kalgoorlie School
of Mines and holds a Western Australian First Class Mine Manager’s Certificate of Competency.
Mr.
Lenigas will hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified
or until his earlier death, resignation or removal. The Board has determined that Mr. Lenigas satisfies the definition of “independent”
director, including, without limitation, the applicable requirements of the NASDAQ Listing Rules and the Securities Exchange Act
of 1934, as amended.
In
connection with the appointment of Mr. Lenigas, the Company granted him 100,000 shares of common stock, which vested immediately.
There
is no understanding or arrangement between Mr. Lenigas and any other person pursuant to which Mr. Lenigas was selected as a director.
Mr. Lenigas does not have any family relationship with any director, executive officer or person nominated or chosen by the Company
to become a director or executive officer.
Effective
February 5, 2019, the Company and Mr. Lenigas entered into a consulting agreement (the “Consulting Agreement”), pursuant
to which the Company shall pay Mr. Lenigas a monthly consulting fee of $13,000 per calendar month for his marketing, branding,
investor and public relations services. The Company also agreed, during the term of the Consulting Agreement, to issue Mr. Lenigas
such number of shares of common stock equal to two percent of the total shares then issued and outstanding upon the Company’s
common stock reaching a market capitalization (as defined in the Consulting Agreement) of $76 million for ten consecutive trading
days, and an additional two percent for each additional $76 million market capitalization achieved for ten consecutive trading
days, up to a market capitalization of $380 million. In addition, should the Company, during the consulting term or for a period
of six months thereafter, enter into a transaction that constitutes a change of control in which the enterprise value (as defined
in the Consulting Agreement) of the Company equals or exceeds, $500 million, then the Company agreed to pay Mr. Lenigas a bonus
equal to 5% of such enterprise value. The Consulting Agreement has a term of two years, and may be terminated by either party
after one year upon 30 days’ prior written notice.
The
foregoing description of the terms of the Consulting Agreement does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the Consulting Agreement, which is filed herewith as Exhibit 10.01 and is incorporated herein
by reference.