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Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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Resignation
of Carl Dorvil
On
October 15, 2018, Carl Dorvil resigned as Chief Executive Officer of the Company. In connection with his resignation, Mr. Dorvil
relinquished his role as “Principal Executive Officer” of the Company for SEC reporting purposes. Mr. Dorvil also
resigned as the Company’s Chairman of the Board of Directors as of such date. Mr. Dorvil’s resignation was for personal
reasons and was not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies,
or practices. In connection with Mr. Dorvil’s resignation, his Employment Agreement with the Company, dated June 26, 2017,
was deemed to be terminated.
In
connection with his resignation, on October 15, 2018, the Company entered into a Separation Letter and General Release Agreement
with Mr. Dorvil (the “Dorvil Separation Agreement”), pursuant to which the Company agreed to pay Mr. Dorvil severance
pay of three (3) months’ salary, in the aggregate amount of $37,500 (less standard withholding and applicable deductions),
in consideration for his general release of the Company and certain related parties from any claims he may have against them.
The severance payment is payable within 14 days from the date of Mr. Dorvil’s execution of the Dorvil Separation Agreement.
The Company also agreed to reimburse Mr. Dorvil for all unreimbursed travel and business expenses to which Mr. Dorvil is entitled.
The Dorvil Separation Agreement also contains standard provisions related to confidentiality and non-disparagement.
Resignation
of Dario Saintus
On
October 15, 2018, Dario Saintus resigned as Interim Chief Financial Officer of the Company. In connection with his resignation,
Mr. Saintus relinquished his role as “Principal Accounting Officer” of the Company for SEC reporting purposes. Mr.
Saintus also resigned as member of the Company’s Board as of such date. Mr. Saintus’s resignation was for personal
reasons and was not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies,
or practices. In connection with Mr. Saintus’s resignation, his Employment Agreement with the Company, dated May 4, 2018,
was deemed to be terminated.
In
connection with his resignation, on October 15, 2018, the Company entered into a Separation Letter and General Release Agreement
with Mr. Saintus (the “Saintus Separation Agreement”), pursuant to which the Company agreed to pay Mr. Saintus severance
pay of three (3) months’ salary, in the aggregate amount of $9,000 (less standard withholding and applicable deductions),
in consideration for his general release of the Company and certain related parties from any claims he may have against them.
The severance payment is payable within 14 days from the date of Mr. Saintus’s execution of the Saintus Separation Agreement.
The Company also agreed to reimburse Mr. Saintus for all unreimbursed travel and business expenses to which Mr. Saintus is entitled.
The Saintus Separation Agreement also contains standard provisions related to confidentiality and non-disparagement.
Resignation
of Chelsea Christopherson
On
October 15, 2018, Chelsea Christopherson resigned as President and Chief Operating Officer of the Company. Ms. Christopherson
also resigned as member of the Company’s Board as of such date. Ms. Christopherson’s resignation was for personal
reasons and was not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies,
or practices. In connection with Ms. Christopherson’s resignation, her Employment Agreement with the Company, dated June
26, 2017, was deemed to be terminated.
In
connection with her resignation, on October 15, 2018, the Company entered into a Separation Letter and General Release Agreement
with Ms. Christopherson (the “Christopherson Separation Agreement”), pursuant to which the Company agreed to pay Ms.
Christopherson severance pay of three (3) months’ salary, in the aggregate amount of approximately $25,000 (less standard
withholding and applicable deductions), in consideration for her general release of the Company and certain related parties from
any claims she may have against them. The severance payment is payable within 14 days from the date of Ms. Christopherson’s
execution of the Christopherson Separation Agreement. The Company also agreed to reimburse Ms. Christopherson for all unreimbursed
travel and business expenses to which Ms. Christopherson is entitled. The Christopherson Separation Agreement also contains standard
provisions related to confidentiality and non-disparagement.
Appointment
of Srikumar Vanamali
On
October 15, 2018, Srikumar Vanamali was appointed as a member of the Board, to fill one of the vacancies created by the resignations
described above. In addition, upon effectiveness of the resignations described above, Mr. Vanamali was appointed as the Company’s
Executive Director, Interim Chief Executive Officer, President, Interim Chief Financial Officer, Secretary and Treasurer, to serve
in such offices at the pleasure of the Board, and until his successor has been appointed by the Board.
In connection with
his appointment as Interim Chief Executive Officer and Interim Chief Financial Officer of the Company, Mr. Vanamali was designated
as the Company’s “Principal Executive Officer” and “Principal Financial and Accounting Officer,”
respectively, for SEC reporting purposes,
Except
as otherwise disclosed in this Report, there are no arrangements or understandings between Mr. Vanamali and any other person pursuant
to which he was appointed as an officer and director of the Company. In addition, there are no family relationships between Mr.
Vanamali and any of the Company’s other officers or directors. Further, except as otherwise disclosed in this Report,
there are no transactions since the beginning of our last fiscal year, or any currently proposed transaction, in which the Company
is a participant, the amount involved exceeds $120,000, and in which Mr. Vanamali had, or will have, a direct or indirect material
interest.
Set
forth below, is Mr. Vanamali’s business experience during at least the past 5 years:
Srikumar
Vanamali, 36, is an experienced post-MBA executive with 15 years of top-tier, diverse experience in strategy and
technology consulting, investment banking and professional business services. Mr. Vanamali has been leading the
Company’s Corporate Strategy functions since June 2018. Prior to that, from January 2017 through May 2018, he worked as
an investment banker at NMS Capital, a L.A.-based investment banking firm focusing on capital markets and M&A. Before joining
NMS Capital, he was a Management Consultant for Sharp Decisions Inc, a business services company through which he provided
consulting services to Toyota Financial Services from November 2014 through December 2016. Prior to this, he was a Consultant
and Technology Lead at Infosys, a global consulting firm, from November 2003 through June 2012. Mr. Vanamali earned a
Bachelor’s in Engineering, Computer Science from the University of Madras, in Chennai, Tamil Nadu, India, in 2003, and
an MBA from UCLA Anderson School of Management, in Los Angeles, California, in 2014.
The
Company believes Mr. Vanamali will make an excellent addition to the Company’s Board, because the Company will benefit from
his 15 years of experience driving growth, process improvement and turnaround strategies for companies and business divisions
in both private and public sectors. Mr. Vanamali has a diverse, global leadership background across entrepreneurship, consulting,
technology and investment banking and is uniquely positioned to identify corporate growth initiatives (organic and M&A), capital
market strategies (debt and equity), operational excellence and business development opportunities pertaining to the Company’s
business management ecosystem.
In
connection with his appointment as Executive Director and Interim Chief Executive Officer of the Company, the Company (a) agreed
to pay Mr. Vanamali and annual base salary of $100,000, and (b) issued Mr. Vanamali 300,000 non-statutory stock options (the “Vanamali
Stock Options”), exercisable at $1.00 per share, all of which stock options vested upon the date of grant.
Appointment
of Shaheed Bailey
On
October 15, 2018, Shaheed Bailey was appointed as a member of the Board, to fill one of the vacancies created by the resignations
described above. In addition, upon effectiveness of the resignations described above, Mr. Bailey was appointed as the Company’s
Interim Chief Investment Officer, to serve in such offices at the pleasure of the Board, and until his successor has been appointed
by the Board.
Except
as otherwise disclosed in this Report, there are no arrangements or understandings between Mr. Bailey and any other person pursuant
to which he was appointed as an officer and director of the Company. In addition, there are no family relationships between Mr.
Bailey and any of the Company’s other officers or directors. Further, except as otherwise disclosed in this Report,
there are no transactions since the beginning of our last fiscal year, or any currently proposed transaction, in which the Company
is a participant, the amount involved exceeds $120,000, and in which Mr. Bailey had, or will have, a direct or indirect material
interest.
Set
forth below, is Mr. Bailey’s business experience during at least the past 5 years:
Shaheed
Bailey, 31, has been serving as Managing Partner and Chief Executive Officer of Veterans Capital Inc., a consulting firm that
helps middle market companies raise equity/debt capital and locate strategic and value strategic acquisitions, and provides consulting
for cost cutting, tax savings and growth strategies, since October 2012. Prior to that, from June 2010 through September 2012,
he served as a Sales Consultant/Partner for Sales Consultants of Morris County, a company that provided strategic consulting services.
Before joining Sales Consultants of Morris County, he was a Private Banker with Wells Fargo Bank from July 2008 through April
2010.
The
Company believes Mr. Bailey is the right choice for the Company’s Board, because of his extensive experience and relationships
with private equity firms, hedge funds, family offices, alternative lenders and banks. In addition, Mr. Bailey’s ability
to provide strategic growth strategies, bring on new investors, capital, mergers & acquisition opportunities and investment
opportunities, will create tremendous value for the Company and increase both the top line and bottom line.
In
connection with his appointment as Interim Chief Investment Officer of the Company, the Company agreed to issue Mr. Bailey 300,000
non-statutory stock options, exercisable at $1.00 per share, all of which stock options vested upon the date of grant.
The
foregoing summary of the Dorvil Separation Agreement, the Saintus Separation Agreement and the Christopherson Separation Agreement
do not purport to be complete and are qualified in their entirety by reference to the Note, the Deed of Trust and the Purchase
Agreement, copies of which are filed as Exhibits 10.2, 10.3 and 10.4 to this Report, respectively, and incorporated herein by
reference.