UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under § 240.14a-12
NEXTPLAY TECHNOLOGIES,
INC.
(Name
of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a- 6(i)(1) and 0-11
1560 Sawgrass Corporate Parkway, Suite 130
Sunrise, Florida 33323
(954) 888-9779
March 11, 2022
Dear Stockholder:
The board of directors (“Board”) and officers of NextPlay
Technologies, Inc., a Nevada corporation, join me in extending to
you a cordial invitation to attend the 2022 Annual Meeting of our
stockholders (the “Meeting”) to be held on April 22, 2022 at 9:00
a.m. Eastern Time (subject to postponement(s) or adjournment(s)
thereof). The Meeting will be held virtually via live audio webcast
at https://agm.issuerdirect.com/nxtp (please note this link is case
sensitive). For further information about the virtual Meeting,
please see the Questions and Answers about the Meeting beginning on
page 1 of our Proxy Statement.
In response to the COVID-19 pandemic and as part of our efforts to
conserve environmental resources and prevent unnecessary corporate
expense, we are using the “Notice and Access” method of providing
proxy materials to you via the Internet pursuant to the regulations
promulgated by the U.S. Securities and Exchange Commission. We
believe that this process will provide you with a safe, convenient
and efficient way to access your proxy materials and vote your
shares, while also allowing us to conserve natural resources and
reduce the costs of printing and distributing the proxy materials
for the Meeting by postal mail. On or about March 11, 2022, we are
mailing to our stockholders a one-page Notice of Internet
Availability of Proxy Materials (the “Notice”) containing
instructions on how to access our Proxy Statement and vote by mail
or fax, or electronically via telephone or the Internet. The Notice
will also contain instructions on how to receive a paper copy of
your proxy materials.
Details of the business to be conducted at the Meeting are
described in the Notice and in the accompanying Proxy Statement. We
have also made a copy of our Annual Report on Form 10-K for the
year ended February 28, 2021 (the “Annual Report”) available with
our Proxy Statement. We encourage you to read our Annual Report. It
includes our audited financial statements and provides information
about our business. Please give this information your careful
attention.
Whether or not you attend the Meeting, it is important that your
shares be represented and voted. You may submit your vote on the
Internet or by fax, telephone or mail. Please refer to the Notice
for instructions on submitting your vote. If you decide to attend
the virtual Meeting, you will also be able to submit your votes, as
well as any questions that you may have, during the Meeting through
the designated website, even if you have previously submitted your
proxy. Voting at the Meeting will supersede any votes previously
cast.
Our Board has unanimously approved the proposals set forth in the
Proxy Statement and we recommend that you vote in favor of each
such proposal.
We look forward to seeing you (virtually) on April 22,
2022. Your vote and participation in our governance is very
important to us.
Sincerely,
|
/s/ John Todd Bonner |
|
| John Todd Bonner |
|
| Chairman |
|
1560 Sawgrass Corporate Parkway, Suite 130
Sunrise, Florida 33323
(954) 888-9779
NOTICE OF THE 2022 ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON APRIL 22, 2022
To the Stockholders of NextPlay Technologies, Inc.:
We are pleased to provide you notice of, and to invite you to
attend, the 2022 Annual Meeting of the stockholders (the “Meeting”)
of NextPlay Technologies, Inc., a Nevada corporation (“NextPlay,”
the “Company,” “we,” and “us”), which will be held on April 22,
2022 at 9:00 a.m. Eastern Time (subject to postponement(s) or
adjournment(s) thereof). The Meeting will be held virtually via
live audio webcast at https://agm.issuerdirect.com/nxtp (please
note this link is case sensitive). See also “Instructions for the
Virtual Meeting,” beginning on page 1 of our Proxy Statement for
additional information regarding attending the virtual Meeting. The
Meeting is being held for the following purposes:
1. To elect ten directors to hold office until our next annual
meeting of stockholders or until their successors are duly elected
and qualified, subject to prior death, resignation, or removal;
2. To ratify the selection of TPS Thayer, LLC as the Company’s
independent registered public accounting firm for the fiscal year
ending February 28, 2022;
3. To consider and vote upon a proposal to approve, in
accordance with Nasdaq Listing Rule 5635(d), an amendment to the
exercise price provisions of those warrants issued in connection
with a registered direct offering of the Company’s securities
pursuant to that Stock Purchase Agreement entered into by and among
the Company and certain investors on November 1, 2021, and
specifically to remove the $1.97 floor price (the “Floor Price”) of
the warrants such that the exercise price of the warrants may be
reduced below the Floor Price in the event that the Company issues
or enters into any agreement to issue securities for consideration
less than the then current exercise price of the warrants;
4. To consider and vote upon a proposal to authorize our board of
directors (the “Board”), in its discretion, to adjourn the Meeting
to another place, or a later date or dates, if necessary or
appropriate, to solicit additional proxies in favor of the
proposals listed above at the time of the Meeting; and
5. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
The matters are more fully discussed in the attached Proxy
Statement. Any action may be taken on any one of the foregoing
proposals at the Meeting on the date specified above or on any date
or dates to which the meeting may be postponed or adjourned. We do
not expect to transact any other business at the Meeting.
Our Board recommends that you vote your shares “For” each of
the director nominees identified in Proposal 1 and “For”
each of the other foregoing proposals.
We have elected to provide access to our proxy materials primarily
electronically via the Internet, pursuant to the “Notice and
Access” method regulations promulgated by the U.S. Securities and
Exchange Commission. We believe this method expedites our
stockholders’ safe receipt of proxy materials while the COVID-19
pandemic remains a concern, conserves natural resources and
significantly reduces the costs of the Meeting. On or about March
11, 2022, we are mailing a one-page Notice of Internet Availability
of Proxy Materials (the “Notice”) to each of our stockholders
entitled to notice of and to vote at the Meeting, which Notice
contains instructions for accessing the attached Proxy Statement,
our Annual Report on Form 10-K for our fiscal year ended February
28, 2021 (the “Annual Report”) via the Internet, as well as voting
instructions. The Notice also includes instructions on how you can
receive a paper copy of your proxy materials. The Proxy Statement
and the Annual Report are both available on the Internet at:
https://www.nextplaytechnologies.com/investors/sec-filings.
Our Board has fixed the close of business on February 24, 2022
as the record date for determining those stockholders entitled to
notice of, and to vote at, the Meeting and any adjournment or
postponement thereof. Accordingly, only stockholders of record at
the close of business on that date are entitled to notice of, and
to vote at, the Meeting. A complete list of our stockholders
entitled to vote at the Meeting will be available for examination
at our offices in Sunrise, Florida, during ordinary business hours
for a period of 10 days prior to the Meeting.
We cordially invite you to virtually attend the virtual Meeting.
Your vote is important no matter how large or small your holdings
in the Company may be. If you do not expect to be present at the
Meeting virtually, you are urged to promptly complete, date, sign,
and return the proxy card or submit your vote using another method
included in the Notice you received in the mail. If you hold your
shares beneficially in street name through a nominee, you should
follow the instructions you receive from your nominee to vote these
shares. Please review the instructions on each of your voting
options described in the enclosed Proxy Statement as well as in the
Notice you received in the mail. This will not limit your right to
virtually attend or vote at the Meeting, but will help to secure a
quorum and avoid added solicitation costs. You may revoke your
proxy at any time before it has been voted at the Meeting.
Even if you plan to attend the virtual Meeting, we request that
you submit a proxy by following the instructions provided in the
Notice you received in the mail as soon as possible in order to
ensure that your shares will be represented at the Meeting if you
are unable to attend.
| By Order
of the Board of Directors |
|
| |
|
|
/s/ John Todd Bonner |
|
| John Todd Bonner |
|
| Chairman |
|
Sunrise, Florida
March 11, 2022
|
IMPORTANT: WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING, WE ASK YOU TO VOTE BY TELEPHONE, MAIL, FAX
OR ON THE INTERNET USING THE INSTRUCTIONS PROVIDED IN THE
NOTICE. |
TABLE OF CONTENTS
PROXY STATEMENT
FOR 2022 ANNUAL MEETING OF STOCKHOLDERS
GENERAL
INFORMATION
The enclosed proxy is solicited on behalf of the Board of Directors
(the “Board”) of NextPlay Technologies, Inc. (“NextPlay,” “we,”
“us,” “our” or the “Company”) for use in connection with the
Company’s solicitation of proxies for use at our 2022 Annual
Meeting of our stockholders (the “Meeting”) to be held on April 22,
2022, at 9:00 a.m. Eastern Time, and at any postponement(s) or
adjournment(s) thereof. The Meeting will be held virtually via live
audio webcast at https://agm.issuerdirect.com/nxtp (please note
this link is case sensitive). See also “Instructions for the
Virtual Meeting,” beginning on page 1 of this Proxy Statement for
additional information regarding attending the virtual Meeting.
We have elected to provide access to the proxy materials for the
Meeting primarily over the Internet in accordance with the U.S.
Securities and Exchange Commission’s (the “SEC”) “Notice and
Access” rules. On or about March 11, 2022, we are mailing a
one-page Notice of Internet Availability of Proxy Materials
(the “Notice”) to each of our stockholders entitled to notice
of and to vote at the Meeting. The Notice contains instructions for
accessing this Proxy Statement, our Annual Report on Form 10-K for
our fiscal year ended February 28, 2021 (our “Annual Report”) and
Meeting voting instructions. The Notice also includes instructions
on how you can receive a paper copy of your proxy materials by
postal mail.
The Proxy Statement will also be accessible online on or about
March 11, 2022 at:
https://www.nextplaytechnologies.com/investors/sec-filings/. You
are invited to attend the Meeting and are requested to vote on the
proposals described in this Proxy Statement.
Information
Contained In This Proxy Statement
The information contained in this Proxy Statement relates to the
proposals to be voted on at the Meeting, the voting process,
ownership of our outstanding securities, and certain other required
information.
Instructions For The
Virtual Meeting
The Meeting will be a completely virtual meeting. There will be no
physical meeting location. The Meeting will only be conducted via
live audio webcast.
To participate in the virtual Meeting, visit
https://agm.issuerdirect.com/nxtp (please note this link is case
sensitive) and enter the control number on your proxy card, or
on the instructions included in the Notice that you received in the
mail.
You may vote during the Meeting by following the instructions
available on the Meeting website during the Meeting. To the best of
our knowledge, the virtual meeting platform is fully supported
across browsers (Internet Explorer, Firefox, Chrome, and
Safari) and devices (desktops, laptops, tablets, and cell
phones) running the most updated version of applicable
software and plugins. Participants should ensure they have a strong
Internet connection wherever they intend to participate in the
meeting. Participants should also allow plenty of time to log in
and ensure that they can hear streaming audio prior to the start of
the meeting.
Questions pertinent to meeting matters will be answered during the
Meeting, subject to time constraints. Questions which are not
pertinent to Meeting matters will not be answered.
Important Notice
Regarding the Availability of Proxy Materials
Pursuant to rules adopted by the SEC, we have elected to use the
Internet as the primary means of furnishing proxy materials to our
stockholders. Accordingly, we are mailing a Notice to each of our
stockholders entitled to notice of and to vote at the Meeting. All
stockholders will have the ability to access the proxy materials
(including our Annual Report, which does not constitute a part of,
and shall not be deemed incorporated by reference into, this Proxy
Statement or the enclosed form of proxy, except as otherwise stated
in this Proxy Statement) via the Internet
at https://www.iproxydirect.com/nxtp or request a printed
set of the proxy materials. Instructions on how to access the proxy
materials over the Internet or to request a printed copy may be
found in the Notice. The Notice contains a control number that you
will need to vote your shares. Please keep the Notice for your
reference through the date of the Meeting. In addition,
stockholders may request to receive proxy materials in printed form
by mail or electronically by email on an ongoing basis. We
encourage our stockholders to take advantage of the availability of
the proxy materials on the Internet to help reduce the
environmental impact of our Meetings.
Record Date and
Shares Entitled to Vote
Our Board has fixed the close of business on February 24, 2022, as
the record date for determining the holders of shares of our common
stock entitled to receive notice of and to vote at the Meeting and
any adjournments or postponements thereof. Only holders of record
of shares of our common stock at the close of business on that date
will be entitled to vote at the Meeting and at any adjournment or
postponement thereof. As of the record date, there
were 114,060,020 shares of our common stock issued and
outstanding and entitled to vote at the Meeting, which shares were
held by approximately 510 holders of record.
Each share of common stock is entitled to one vote on each proposal
presented at the Meeting and at any adjournment or postponement
thereof, for 114,060,020 total voting shares.
In order for us to satisfy our quorum requirements, the holders of
at least 33 1/3% of our total number of outstanding voting shares
entitled to vote at the Meeting must be present. You will be deemed
to be present if you attend the Meeting or if you submit a proxy
(including through the mail, by fax or by telephone or the
Internet) that is received at or prior to the Meeting (and not
revoked).
If your proxy is properly executed and received by us in time to be
voted at the Meeting, the shares represented by your proxy
(including those given through the mail, by fax or by telephone or
the Internet) will be voted in accordance with your instructions.
If you execute your proxy but do not provide us with any
instructions, your shares will be voted “For” each of the
director nominees identified in Proposal 1 and “For” each of
the other proposals set forth in this Proxy Statement, or as
otherwise determined by the proxies.
The only matters that we expect to be presented at our Meeting are
set forth in this Proxy Statement. If any other matters properly
come before the Meeting, the persons named in the proxy card will
vote the shares represented by all properly executed proxies on
such matters in their best judgment.
Voting
Process
If you are a stockholder of record, there are five ways to
vote:
| |
● |
At
the virtual Meeting. You may vote during the Meeting by
following the instructions available on the Meeting website during
the Meeting. |
| |
● |
Via the Internet. You may vote by proxy
via the Internet by following the instructions provided in the
Notice you received. |
| |
● |
By
Telephone. You may vote by proxy by calling the toll-free
number found on the Notice you received. |
| |
● |
By
Fax. If you requested to receive printed proxy materials, you
may vote by proxy by faxing your proxy to the number found on the
proxy card. |
| |
● |
By
Mail. If you requested to receive printed proxy materials, you
may vote by proxy by filling out the proxy card and returning it in
the postage-paid envelope provided. |
Revocability of
Proxies
The presence of a stockholder at our Meeting will not automatically
revoke that stockholder’s proxy. However, a stockholder may revoke
their proxy at any time prior to its exercise by:
| |
● |
submitting a written revocation prior to the
Meeting to the Corporate Secretary, NextPlay Technologies, Inc.,
1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida
33323; |
| |
|
|
| |
● |
submitting another signed and later dated proxy
card and returning it by mail or fax in time to be received before
our Meeting or by submitting a later dated proxy by the Internet or
telephone prior to the Meeting; or |
| |
|
|
| |
● |
attending the Meeting and voting by following the
instructions available on the meeting website during the
Meeting. |
Attendance at the
Meeting
Attendance at the Meeting is limited to holders of record of our
common stock at the close of business on the record date, February
24, 2022, and our guests. You will be asked to provide your control
number in order to be admitted into the Meeting. If your shares are
held in the name of a bank, broker, or other nominee and you plan
to attend the Meeting, you must obtain your control number from
such bank, broker, or other nominee, or contact Issuer Direct
Corporation at (919) 447-3740, or 1-866-752-VOTE (8683) to obtain
your control number, in order to be admitted. No recording of the
Meeting will be permitted. At the Meeting, our stockholders will be
afforded a reasonable opportunity to participate in the Meeting and
to vote on matters submitted to the stockholders, including an
opportunity to communicate, and to read or hear the proceedings of
the meetings in a substantially concurrent manner with such
proceedings.
Conduct at the
Meeting
The Chairman of the Meeting has broad responsibility and legal
authority to conduct the Meeting in an orderly and timely manner.
This authority includes establishing rules for stockholders who
wish to address the Meeting. Only stockholders or their valid proxy
holders may address the Meeting. The Chairman may exercise broad
discretion in recognizing stockholders who wish to speak and in
determining the extent of discussion on each item of business. In
light of the number of stockholders of the Company and the need to
conclude the Meeting within a reasonable period of time, we cannot
ensure you that every stockholder who wishes to speak on an item of
business will be able to do so.
Quorum
Our Bylaws, as amended, provide that the presence of 33 1/3% of the
outstanding shares of our capital stock entitled to vote at a
meeting, represented in person (including virtually) or by
proxy, constitutes a quorum at a meeting of our stockholders. If
you vote at the Meeting or by proxy at our Meeting, your shares
will be counted for purposes of determining whether there is a
quorum at the Meeting. Shares of our capital stock present in
person (including virtually) or by proxy at our Meeting that
are entitled to vote will be counted for the purpose of determining
whether there is a quorum for the transaction of business at the
Meeting.
Voting Requirements
for Each of the Proposals
|
|
Proposal |
|
Vote
Required |
|
Broker
Discretionary
Voting
Allowed* |
|
1.
|
To elect ten directors to hold office until our next annual meeting
of stockholders or until their successors are duly elected and
qualified, subject to prior death, resignation, or removal.
|
|
The plurality of the votes cast. This means that the nominees
receiving the highest number of affirmative (“FOR”) votes
(among votes properly cast virtually or by proxy) will be elected
as directors.
|
|
No
|
| |
|
|
|
|
|
| 2. |
To
ratify the selection of TPS Thayer, LLC as the Company’s
independent registered public accounting firm for the fiscal year
ending February 28, 2022. |
|
A
majority of the votes cast on the proposal. |
|
Yes |
| |
|
|
|
|
|
| 3. |
Approval, in accordance with Nasdaq Listing Rule 5635(d), of an
amendment to the exercise price provisions of those warrants issued
in connection with a registered direct offering of the Company’s
securities pursuant to that Stock Purchase Agreement entered into
by and among the Company and certain investors on November 1, 2021,
and specifically to remove the $1.97 floor (the “Floor Price”) of
the warrants such that the exercise price of the warrants may be
reduced below the Floor Price in the event that the Company issues
or enters into any agreement to issue securities for consideration
less than the then current exercise price of the warrants (the
“Warrant Amendment”).
|
|
A
majority of the votes cast on the proposal. |
|
No |
| 4. |
Authorization of our Board, in its discretion, to
adjourn the Meeting to another place, or a later date or dates, if
necessary or appropriate, to solicit additional proxies in favor of
the proposals listed above at the time of the Meeting. |
|
Majority of the shares of stock entitled to vote
which are present, in person (including virtually) or by proxy, at
the Meeting. |
|
No |
| * |
See also “Quorum; Broker
Non-Votes and Abstentions,” below. |
Broker Non-Votes and
Abstentions
The presence at the Meeting of the holders of 33 1/3% of the
outstanding shares of voting stock entitled to vote at the Meeting
is necessary to constitute a quorum. Broker non-votes and
abstentions are counted for purposes of determining whether a
quorum is present.
The election of directors requires a plurality of the votes cast at
the Meeting. Broker Non-Votes will have no effect on the outcome of
Proposal 1. Although our stockholders will not have the option to
“Abstain” from voting on Proposal 1, they may elect to “Withhold”
their votes for any or all of the director nominees. Withheld votes
will not have any effect on the outcome of Proposal 1.
Only “For” and “Against” votes are counted for
purposes of determining the votes received in connection with
Proposals 2 and 3. Broker non-votes and abstentions will not be
counted as votes cast, and will have no effect on determining
whether the affirmative vote constitutes a majority of the votes
cast at the Meeting for Proposals 2 and 3. However, approval of
these proposals requires the affirmative vote of a majority of the
votes cast on such proposals, and therefore broker non-votes and
abstentions could prevent the approval of these proposals because
they do not count as affirmative votes.
Proposal 4 requires the affirmative (“For”) vote of a
majority of the shares of stock entitled to vote which are present,
in person (including virtually) or by proxy, at the Meeting. Broker
non-votes will not have any effect on the outcome of Proposal 4.
Abstentions will be treated as a vote “Against” Proposal
4.
In order to minimize the number of broker non-votes, the Company
encourages you to vote or to provide voting instructions to the
organization that holds your shares by carefully following the
instructions provided in the proxy materials that you receive.
If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter. For your vote to
be counted, you must submit your voting instruction form to your
broker.
As described above, although the Company will include abstentions
and broker non-votes as present or represented for purposes of
establishing a quorum for the transaction of business, the Company
intends to exclude abstentions and broker non-votes from the
tabulation of voting results on any issues requiring approval of a
majority of the votes cast (Proposals 2 and 3).
Dissenters’
Rights
Dissenters’ rights are not available with respect to any of the
proposals to be voted on at the Meeting.
Board of Directors Voting
Recommendations
Our Board recommends that you vote your shares:
| |
● |
“FOR” each of the director nominees
identified in Proposal 1, each to hold office until our next annual
meeting of stockholders or until their successors are duly elected
and qualified, subject to prior death, resignation, or removal
(Proposal 1); |
| |
|
|
| |
● |
“FOR” the ratification of the appointment
of TPS Thayer, LLC as the Company’s independent registered public
accounting firm for the fiscal year ending on February 28, 2022
(Proposal 2); |
| |
|
|
| |
● |
“FOR” the approval, in accordance with
Nasdaq Listing Rule 5635(d), of the Warrant Amendment (Proposal 3);
and |
| |
|
|
| |
● |
“FOR” authorization of our Board, in its
discretion, to adjourn the Meeting to another place, or a later
date or dates, if necessary or appropriate, to solicit additional
proxies in favor of the proposals listed above at the time of the
Meeting (Proposal 4). |
Mailing Costs and
Solicitation of Proxies
In addition to solicitation by use of the mail, certain of our
officers and employees may solicit the return of proxies personally
or by telephone, electronic mail or facsimile. We have not and do
not anticipate retaining a third-party proxy solicitation firm to
solicit proxies on behalf of the Board. The cost of any
solicitation of proxies will be borne by us. Arrangements may also
be made with brokerage firms and other custodians, nominees and
fiduciaries for the forwarding of material to, and solicitation of
proxies from, the beneficial owners of our securities held of
record at the close of business on the record date by such persons.
We will reimburse such brokerage firms, custodians, nominees and
fiduciaries for the reasonable out-of-pocket expenses incurred by
them in connection with any such activities.
Inspector of
Voting
It is anticipated that representatives of Issuer Direct Corporation
or our legal counsel will tabulate the votes and act as inspector
of election at the Meeting.
Stockholders Entitled to
Vote at the Meeting
A complete list of stockholders entitled to vote at the Meeting
will be available to view during the Meeting. You may also access
this list at our principal executive offices, for any purpose
germane to the Meeting, during ordinary business hours, for a
period of ten days prior to the Meeting.
Voting
Instructions
Your vote is very important. Whether or not you plan to attend the
Meeting, we encourage you to read this Proxy Statement and submit
your proxy or voting instructions as soon as possible. For specific
instructions on how to vote your shares, please refer to the
instructions included on the Notice you received in the mail and
the enclosed proxy card.
Confidential
Voting
Independent inspectors count the votes. Your individual vote is
kept confidential from us unless special circumstances exist. For
example, a copy of your proxy card will be sent to us if you write
comments on the card, as necessary to meet applicable legal
requirements, or to assert or defend claims for or against the
Company.
Stockholder of
Record and Shares Held in Brokerage Accounts
If on the record date, your shares were registered in your name
with our transfer agent, then you are a stockholder of record and
you may vote at the Meeting, by proxy or by any other means
supported by us. If on the record date your shares were held in an
account at a brokerage firm, bank, dealer, or other similar
organization, then you are the beneficial owner of shares held in
“street name” and the Proxy Statement is required to be forwarded
to you by that organization. The organization holding your account
is considered the stockholder of record for purposes of voting at
the Meeting. As a beneficial owner, you have the right to direct
your broker or, other agent on how to vote the shares in your
account. You are also invited to attend the Meeting. However, you
must obtain your control number from such bank, broker, or other
nominee, or contact Issuer Direct Corporation at (919) 447-3740, or
1-866-752-VOTE (8683) to obtain your control number, in order to be
admitted and since you are not the stockholder of record, you may
not vote your shares by following the instructions available on the
Meeting website during the Meeting, unless you request and obtain a
valid proxy from your broker or, other agent.
Multiple
Stockholders Sharing the Same Address
In some cases, one copy of this Proxy Statement and the
accompanying notice of meeting of stockholders is being delivered
to multiple stockholders sharing an address. We will deliver
promptly, upon written or oral request, a separate copy of this
Proxy Statement or the accompanying notice of meeting of
stockholders to such a stockholder at a shared address to which a
single copy of the document was delivered. Stockholders sharing an
address may also submit requests for delivery of a single copy of
this Proxy Statement or the accompanying notice of meeting of
stockholders, but in such event will still receive separate forms
of the proxy for each stockholder account. To request separate or
single delivery of these materials now or in the future, a
stockholder may submit a written request to our Controller at our
principal executive offices at 1560 Sawgrass Corporate Parkway,
Suite 130, Sunrise, Florida 33323, or a stockholder may make a
request by calling our Controller at (954) 888-9779.
If you receive more than one set of proxy materials, it means that
your shares are registered differently and are held in more than
one account. To ensure that all shares are voted, please either
vote each account as discussed above under the section of this
Proxy Statement entitled “Voting Process,” or sign and return by
mail all proxy cards or voting instruction forms.
Voting
Results
The final voting results will be tallied by the inspector of voting
and published in our Current Report on Form 8-K, which we are
required to file with the SEC within four business days following
the Meeting.
Company Mailing
Address
The mailing address of our principal executive offices is 1560
Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323.
Other
Matters
As of the date of this Proxy Statement, our Board is not aware of
any business to be presented at the Meeting other than as set forth
in the proxy materials that have been mailed to you. If any other
matters should properly come before the Meeting, it is intended
that the shares represented by proxies will be voted with respect
to such matters in accordance with the judgment of the persons
voting the proxies.
FORWARD LOOKING
STATEMENTS
Statements in this Proxy Statement that are “forward-looking
statements” are based on current expectations and assumptions that
are subject to risks and uncertainties. In some cases,
forward-looking statements can be identified by terminology such as
“may,” “will,” “should,” “potential,” “continue,” “expects,”
“anticipates,” “intends,” “plans,” “believes,” “estimates,” and
similar expressions. These forward-looking statements are based on
our current estimates and assumptions and, as such, involve
uncertainty and risk. Actual results could differ materially
from projected results.
We do not assume any obligation to update information contained in
this document, except as required by applicable laws. Although this
Proxy Statement may remain available on our website or elsewhere,
its continued availability does not indicate that we are
reaffirming or confirming any of the information contained
herein. Neither our website nor its contents are a part
of this Proxy Statement.
PROPOSAL 1
ELECTION OF DIRECTORS
Nomination of
Directors
The Nominating and Corporate Governance Committee of the Board (the
“Nominating Committee”) is charged with making recommendations to
the Board regarding qualified candidates to serve as members of the
Board. The Nominating Committee’s goal is to assemble a board of
directors with the skills and characteristics that, taken as a
whole, will assure a strong board of directors with experience and
expertise in all aspects of corporate governance. Accordingly, the
Nominating Committee believes that candidates for director should
have certain minimum qualifications, seeks to achieve a balance of
knowledge, experience and capability on the Board and Board
committees and to identify individuals who can effectively assist
the Company in achieving our short-term and long-term goals,
protecting our stockholders’ interests and creating and enhancing
value for our stockholders. In so doing, the Nominating Committee
considers a person’s diversity attributes (e.g., professional
experiences, skills, background, race and gender) as a whole
and does not necessarily attribute any greater weight to one
attribute. Moreover, diversity in professional experience, skills
and background, and diversity in race and gender, are just a few of
the attributes that the Nominating Committee takes into account. In
evaluating prospective candidates, the Nominating Committee also
considers whether the individual has personal and professional
integrity, good business judgment and relevant experience and
skills, and whether such individual is willing and able to commit
the time necessary for Board and Board committee service.
While there are no specific minimum requirements that the
Nominating Committee believes must be met by a prospective director
nominee, the Nominating Committee does believe that director
nominees should possess personal and professional integrity, have
good business judgment, have relevant experience and skills, and be
willing and able to commit the necessary time for Board and Board
committee service. The Company does not have a formal diversity
policy. However, the Nominating Committee evaluates each individual
in the context of the Board as a whole, with the objective of
recommending individuals that can best perpetuate the success of
our business and represent stockholder interests through the
exercise of sound business judgment using their diversity of
experience in various areas. We believe our current directors
possess diverse professional experiences, skills and backgrounds,
in addition to (among other characteristics) high standards of
personal and professional ethics, proven records of success in
their respective fields, and valuable knowledge of our business and
our industry.
The Nominating Committee uses a variety of methods for identifying
and evaluating director nominees. The Nominating Committee also
regularly assesses the appropriate size of the Board and whether
any vacancies on the Board are expected due to retirement or other
circumstances. In addition, the Nominating Committee considers,
from time to time, various potential candidates for directorships.
Candidates may come to the attention of the Nominating Committee
through current Board members, professional search firms,
stockholders or other persons. These candidates may be evaluated at
regular or special meetings of the Nominating Committee and may be
considered at any point during the year.
The Nominating Committee evaluates director nominees at regular or
special committee meetings pursuant to the criteria described above
and reviews qualified director nominees with the Board. The
Nominating Committee selects nominees that best suit the Board’s
current needs and recommends one or more of such individuals for
election to the Board.
The Nominating Committee will consider candidates recommended by
stockholders, provided the names of such persons, accompanied by
relevant biographical information, and other information as
required by the Company’s Bylaws, are properly submitted in writing
to the Secretary of the Company in accordance with the Bylaws and
applicable law. The Secretary will send properly submitted
stockholder recommendations to the Nominating Committee.
Individuals recommended by stockholders in accordance with these
procedures will receive the same consideration received by
individuals identified to the Nominating Committee through other
means. The Nominating Committee also may, in its discretion,
consider candidates otherwise recommended by stockholders without
accompanying biographical information, if submitted in writing to
the Secretary.
There currently are no legal proceedings, and during the past ten
years there have been no legal proceedings, that are material to
the evaluation of the ability or integrity of any of our directors
or director nominees. There are no material proceedings to which
any director, officer, affiliate, or owner of record or
beneficially of more than 5% of any class of voting securities of
the Company, or any associates of any such persons, is a party
adverse to the Company or any of our subsidiaries, and none of such
persons has a material interest adverse to the Company or any of
its subsidiaries. Other than as disclosed below, during the last
five years, none of our directors held any other directorships in
any company with a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or subject to the requirements of Section
15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.
The Nominating Committee has recommended, and the Board has
nominated, J. Todd Bonner, Nithinan Boonyawattanapisut, William
Kerby, Donald P. Monaco, Athid Nanthawaroon, Carmen Diges, Komson
Kaewkham, Yoshihiro Obata, Farooq Moosa, and Edward Terrance
Gardner, Jr. as nominees for election as members of our Board at
the Meeting for a period of one year or until such director’s
successor is elected and qualified, subject to such director’s
earlier death, resignation, or removal. Each of the nominees is
currently a director of the Company. At the Meeting, ten directors
will be elected to the Board.
We believe that each of our directors possesses high standards of
personal and professional ethics, character, integrity and values;
an inquisitive and objective perspective; practical wisdom; mature
judgment; diversity in professional experience, skills and
background and a proven record of success in their respective
fields; and valuable knowledge of our business and industry.
Moreover, each of our directors is willing to devote sufficient
time to carrying out his or her duties and responsibilities
effectively and is committed to serving us and our stockholders.
Information regarding the director nominees, including a brief
description of the specific experiences, qualifications and skills
attributable to each of our director nominees that led the Board,
as of the date of this Proxy Statement, to its conclusion that such
director should serve as a director of the Company are included
below.
Arrangements Related
to the Nomination of Directors
On or around February 22, 2021, Red Anchor Trading Corporation,
T&B Media Global (Thailand) Company Limited, Tree Roots
Entertainment Group Co., Ltd. and Dees Supreme Company Limited
(collectively, the “HotPlay Stockholders”), representing all of the
stockholders of HotPlay Enterprise Limited (“HotPlay”), and
Nithinan Boonyawattanapisut, J. Todd Bonner, Athid Nanthawaroon and
Komson Kaewkham, each HotPlay nominees, entered into a Voting
Agreement with William Kerby and Donald P. Monaco (the “Voting
Agreement”). Pursuant to the Voting Agreement, each of the HotPlay
Stockholders agreed to vote all voting shares of the Company which
they hold and may hold in the future (during the term of the
agreement) to elect Mr. Kerby and Mr. Monaco to the Board, and each
of the HotPlay nominees agreed to continue to nominate each of Mr.
Kerby and Mr. Monaco to the Board. The agreement continues in
effect until the earlier of February 26, 2026, the date of both Mr.
Kerby’s and Mr. Monaco’s death, or the date that both Mr. Kerby and
Mr. Monaco have provided notice of termination to such HotPlay
Stockholders.
Other than pursuant to the Voting Agreement, there are no
arrangements or understandings between any of our current
directors, nominees for directors or officers, and any other person
pursuant to which any director, nominee for director, or officer
was or is to be selected as a director, nominee or officer, as
applicable.
Information
Regarding Directors
|
Name |
|
Age |
|
Positions
and Offices Held |
|
Director
Since |
| J.
Todd Bonner |
|
55 |
|
Chairman
of the Board |
|
2021 |
| Nithinan
Boonyawattanapisut |
|
38 |
|
Co-Chief
Executive Officer and Director |
|
2021 |
| William
Kerby |
|
64 |
|
Co-Chief
Executive Officer and Director |
|
2008 |
| Donald
P. Monaco |
|
69 |
|
Director |
|
2011 |
| Athid
Nanthawaroon |
|
40 |
|
Director |
|
2021 |
| Carmen
Diges |
|
51 |
|
Director |
|
2021 |
| Komson
Kaewkham |
|
40 |
|
Director |
|
2021 |
| Yoshihiro
Obata |
|
60 |
|
Director |
|
2021 |
| Farooq
Moosa |
|
51 |
|
Director |
|
2021 |
| Edward
Terrence Gardner, Jr. |
|
56 |
|
Director |
|
2021 |
J. Todd Bonner, age 55, Chairman of the Board
Mr. Bonner has served as Chairman of the Board since the Company’s
acquisition of HotPlay on June 30, 2021 (serving as Co-Chairman of
the Board from June 2021 to December 2021). Mr. Bonner co-founded
HotPlay, an in-game advertising platform, and HotPlay Thailand in
March 2020, and is currently the Chairman of HotPlay Thailand. He
is also a member of the Board of Directors of Axion Ventures Inc.,
an online video gaming and technology company listed on the TSX
Venture Exchange, which he co-founded in May 2016. During that
time, he started True Axion Interactive, a game studio formed via a
joint venture with True Corporation, a major Thai telecommunication
company, in April 2017. In March 2012, he co-founded Red Anchor
Trading Corporation as an incubator for developing applications and
predictive algorithms based on crowdsourced data. Mr. Bonner
founded independent AAA games studio Axion games, which was
formerly Epic Games China, in 2006. In July 2003, Mr. Bonner
founded Northstar Pacific Partners, an Indonesia Merchant Bank, and
served as Partner until September 2005. Northstar Pacific Partners
has since grown into a $2.2 billion private equity fund. Prior to
that, Mr. Bonner co-founded Pacific Century CyberWorks in June
2000, where he served as the company’s Japan based CEO from March
2001 to September 2003. During that time, he raised $2.4 billion to
acquire Hong Kong Telecom, which remains one of the largest
acquisitions in Asian history. Mr. Bonner also serves as a member
of the Board of Directors of Longroot Cayman. Mr. Bonner graduated
from Stanford University in June 1989 with a degree in Biology and
Biomedical Sciences.
We believe that Mr. Bonner’s knowledge of the industries that the
Company operates in, familiarity with the Company’s business and
technologies, and experience founding and growing companies make
him a qualified candidate for the Board.
Nithinan “Jess” Boonyawattanapisut, age 38, Co-Chief Executive
Officer and Director
Ms. Boonyawattanapisut has served as a director on our Board and as
Co-Chief Executive Officer of the Company since the Company’s
acquisition of HotPlay on June 30, 2021. Ms. Boonyawattanapisut has
was the Co-Founder and Managing Director of HotPlay, an in-game
advertising platform, and HotPlay Thailand, from March 2020 until
June 30, 2021. Since April 2017, Ms. Boonyawattanapisut has been
serving as the Managing Director of Axion Games, Inc., an
online video gaming and technology company, and leads the
content investment arm of Axion Games, Inc. She has also been
serving as the Chief Executive Officer and Chairperson of the Board
at True Axion Interactive, a game studio formed via a joint
venture with True Corporation, a major Thai telecommunication
company, since she co-founded it in March 2017. In June 2014, Ms.
Boonyawattanapisut founded HotNow (Thailand) Company Limited, a
hyper-local promotion discovery platform and has served as the
Chief Executive Officer since its inception. In March 2012, she
co-founded Red Anchor Trading Corporation, an incubator for
developing applications and predictive algorithms based on
crowdsourced data. In July 2006,
Ms. Boonyawattanapisut co-founded the independent AAA
games studio, Epic Games China, which later consolidated as Axion
Games Limited in 2014, and where Ms.
Boonyawattanapisut currently serves as Director. Ms.
Boonyawattanapisut graduated from Mahidol University with a
Bachelor of Business Administration in International Business.
We believe that Ms. Boonyawattanapisut’s knowledge of the
industries that the Company operates in, status as the Company’s
Co-Chief Executive Officer, familiarity with the Company’s business
and technologies, and experience founding and growing companies
make her a qualified candidate for the Board.
William Kerby, age 64, Co-Chief Executive Officer and
Director
William Kerby is the founder, Co-Chief Executive Officer, and a
director of the Company. From July 2008 to present, he has been the
architect of the NextPlay model, overseeing the development and
operations of the Travel, Real Estate and Television Media
divisions of the Company. In October 2012, the Company transferred
its real estate assets into a public company - Verus International,
Inc., formerly Realbiz Media Group, Inc., where Mr. Kerby served as
Chief Executive Officer until August 2015 and on the board of
directors until April of 2016. In July 2015, the decision was made
to separate the Television and Real Estate operations from the
Company, thereby allowing management to focus all efforts on the
development of its Travel division. From April 2002 to July 2008,
Mr. Kerby served as the Chief Executive Officer of various media
and travel entities that ultimately became part of Extraordinary
Vacations Group. Operations included Cruise & Vacation Shoppes,
Maupintour Extraordinary Vacations, Attaché Travel and the Travel
Magazine - a TV series of 160 travel shows. From February 1999 to
April 2002, Mr. Kerby founded and managed Travelbyus, a publicly-
traded company on the TSX and NASD Small Cap. The launch included
an intellectually patented travel model that utilized
technology-based marketing to promote its travel services and
products. Mr. Kerby negotiated the acquisition and financing of 21
companies encompassing multiple tour operators, 2,100 travel
agencies, media that included print, television, outdoor billboard
and wireless applications and leading-edge technology in order to
build and complete the Travelbyus model. The company had over 500
employees, gross revenues exceeding $3 billion and a Market Cap
over $900 million. From June 1989 to January 1999, Mr. Kerby
founded and grew Leisure Canada – a company that included the
Master Franchise for Thrifty Car Rental British Columbia,
TravelPlus (a nationwide Travel Agency), Bluebird Holidays (an
international tour company with operations in the U.S., Canada,
Great Brittan, France, South Africa and the South Pacific) and
Canadian Traveler (a travel magazine). Leisure Canada was acquired
in May 1998 by Wilton Properties, a Canadian company developing
hotel and resort properties in Cuba. From October 1980 through June
1989, Mr. Kerby worked in the financial industry as an investment
advisor. Mr. Kerby also serves as a member of the Board of
Directors of Longroot Cayman. Mr. Kerby graduated from York
University in May 1980 with a Specialized Honors Economics
degree.
We believe that Mr. Kerby’s knowledge of the travel and leisure
industry, status as the Company’s Co-Chief Executive Officer, and
experience founding and growing companies make him a qualified
candidate for the Board.
Donald P. Monaco, age 69, Director
Mr. Monaco has served as a member of the Board since August 2011
and served as Chairman of the Board from August 2018 to December
2021 (serving as Co-Chairman of the Board from June 2021 to
December 2021). Mr. Monaco served on the Verus International, Inc.,
formerly RealBiz Media Group, Inc., board of directors from October
2012 until April 2016, serving as chairman of the board from August
2015 to April 2016. Mr. Monaco has served on the board of directors
of Enderby Entertainment Inc. since March 2018, serving as its
Chief Financial Officer since January 2020. Mr. Monaco is the
founder and owner of Monaco Air Duluth, LLC, a full service,
fixed-base operator aviation services business at Duluth
International Airport in Duluth, Minnesota serving airline,
military, and general aviation customers since November 2005. Mr.
Monaco has been appointed and reappointed by Minnesota Governors
since 2009 to serve as a Commissioner of the Metropolitan Airports
Commission in Minneapolis-St. Paul, Minnesota and currently serves
as Chairman of the Operations, Finance and Administration
Committee. Mr. Monaco was a Director at Republic Bank in Duluth,
Minnesota between May 2015 until October 2019 and served as Vice
Chairman of the Board, and subsequently served on the Bell Bank
Twin-Ports Market Advisory Board. Mr. Monaco is the President and
Chairman of the Monaco Air Foundation, Treasurer of Honor Flight
Northland, Treasurer of the Duluth Aviation Institute, and a member
of the Duluth Chamber of Commerce Military Affairs Committee. Mr.
Monaco spent over 18 years as a Partner and Senior Executive of the
28 years he served as an international information technology and
business management consultant with Accenture in Chicago, Illinois.
Mr. Monaco holds Bachelor’s. and Master’s degrees in Computer
Science Engineering from Northwestern University.
We selected Mr. Monaco to serve on our Board because he brings a
strong business background to the Company, and adds significant
strategic, business and financial experience. We believe that Mr.
Monaco’s business background provides him with a broad
understanding of the issues facing us, the financial markets and
the financing opportunities available to us.
Athid Nanthawaroon, age 40, Director
Mr. Nanthawaroon has served as a member of the Board since the
Company’s acquisition of HotPlay on June 30, 2021. Mr. Nanthawaroon
co-founded and served as a director of HotPlay and HotPlay
Thailand, from the time the companies were founded in March 2020
until June 30, 2021. He also served as the President of HotPlay
Thailand since its founding. Since January 2020, Mr. Nanthawaroon
has served as a director and Chief Executive Officer of Tree Roots
Entertainment Group, a joint venture between the Thai property
developer, Magnolia Quality Development Corporation Limited, and
the IP management and investment company, T&B Media Global
(Thailand) Company Limited, where he is building an ecosystem
bridging real estate and entertainment with technology. Since
November 2014, Mr. Nanthawaroon has served as Senior Vice President
of Corporate Finance at DTGO Corporation Limited (“DTGO”), a
diversified business group established in 1993 that integrates
social contribution with business success. DTGO’s largest
investment portfolio is Magnolia Quality Development Corporation
Limited, which holds real estate assets including condominiums,
mixed-use developments and “theme” developments, and maintains a
total asset value of over approximately $5 billion. Mr.
Nanthawaroon has over a decade and a half of experience in
investment strategy and fund raising across various industries. Mr.
Nanthawaroon holds a Bachelor’s degree in Finance from Kasetsart
University and a Master’s degree in Commerce and Accountancy in
Real Estate from Thammasat University.
We believe that Mr. Nanthawaroon’s knowledge of the industries that
the Company operates in, familiarity with the Company’s business
and technologies, and significant finance, investment and
fundraising experience make him a qualified candidate for the
Board.
Carmen L. Diges, age 51, Director
Ms. Diges has served as a member of the Board since the Company’s
acquisition of HotPlay on June 30, 2021. Ms. Diges is a senior
attorney, corporate and government advisor, and international
entrepreneur, with over two decades of experience across various
public and private sectors. Since August 2014, Ms. Diges has
served as Principal at her own law firm, REVlaw. Ms. Diges has
served as the General Counsel/Corporate Secretary of McEwen Mining
Inc. (NYSE:MUX) since August 2015. From November 2011 through July
2014, Ms. Diges served as a Partner at the law firm of Miller
Thomson LLP. Prior thereto, from May 2004 to October 2011, Ms.
Diges served as a Partner at the law firm of McMillan LLP. Ms.
Diges currently serves as a Director of several private companies.
Ms. Diges holds a CFA Charter, a Master of Laws (Tax) from Osgoode
Hall Law School in Toronto, a Bachelor of Laws from Dalhousie Law
School in Halifax, as well as a Bachelor of Arts from the
University of Toronto.
We believe that Ms. Diges’ strong background in the legal and
corporate industry, as well as her significant corporate governance
experience, make her well qualified to serve on the Board.
Komson Kaewkham, age 40, Director
Mr. Kaewkham has served as a member of the Board since the
Company’s acquisition of HotPlay on June 30, 2021. Mr. Kaewkham is
the Legal Counsel and Senior Vice President of DTGO, a diversified
business group that integrates social contribution with business
success. He joined the organization’s property development
subsidiary, Magnolia Quality Development Corporation Limited, in
March 2011 as Division Manager. He then joined the Corporate Legal
team of DTGO in April 2017 and was promoted to Senior Vice
President in March 2019. During his time at the organization, Mr.
Kaewkham has specialized in legal matters related to real estate
project development, investment structures, mergers and
acquisitions, and presently is in charge of risk management and
compliance of DTP Global REITs Management limited, DTGO’s REIT
management company. From April 2009 to March 2011, Mr. Kaewkham was
a litigator at Blumenthal Ritcher & Sumet Limited’s Bangkok
office and served as legal counsel and as a litigator at Siam ILC.
Co., Ltd from March 2006 to March 2009. Mr. Kaewkham received his
Notarial Service Attorney License from Lawyers Council under the
Royal Patronage in Thailand in June 2010, and graduated from
Assumption University in May 2008 with a Master of Law Program in
Business Law.
We believe that Mr. Kaewkham’s strong background in the legal and
corporate industry, as well as his significant mergers and
acquisitions, risk management and compliance experience, make him
well qualified to serve on the Board.
Yoshihiro Obata, age 60, Director
Mr. Obata has served as a member of the Board since the Company’s
acquisition of HotPlay on June 30, 2021. Mr. Obata is an
independent Director of Axion Ventures, Inc. He has over three
decades of experience with technology companies as a founder,
software engineer, board member and senior executive. Most
recently, Mr. Obata was a founding member, director and Chief
Technology Officer of eAccess, an ADSL wholesale company, which
acquired a 3G license in 2005 and successfully introduced LTE in
2012 (under the EMOBILE brand). In 2013, after the acquisition of
eAccess by Softbank, he moved to Equinix Japan and has served as
the President and Chief Executive Officer of BizMobile Inc. since
2015.
We believe that Mr. Obata’s significant experience in the
technologies industry and founding and growing companies make him
well qualified to serve on the Board.
Farooq Moosa, age 51, Director
Mr. Moosa has served as a member of the Board since November 23,
2021. He currently serves as President, Chief Financial Officer and
a director of Avenir Senior Living Inc., a senior healthcare
operating company that builds, designs, markets owns and operates
luxury private-pay memory care communities and senior residences,
which positions that he has held since February 2021. He also
serves as President and Chief Executive Officer of 1285593 Ltd., a
company that provides capital markets and financial services
consulting services, which positions he has held since January
2021. Prior to that, Mr. Moosa served as managing director at
Echelon Wealth Partners and Artemis Investment Management, and as
director of global investment banking at Scotiabank and held
various positions, including president, Chief Executive Officer,
and director, of Scotia Managed Companies Administration, a wholly
owned subsidiary of Scotiabank. While at Scotia Managed Companies
Administration, Mr. Moosa’s responsibilities included corporate
governance, investment oversight, business risk management,
corporate due diligence, and financial analysis. Prior to that, he
served as VP of equity capital markets at BMO Capital Markets. Mr.
Moosa holds an MBA from Wilfrid Laurier University and a Bachelor
of Arts (Honours Standing) from Western University.
We believe that Mr. Moosa’s corporate governance, investment
oversight, business risk management, corporate due diligence, and
financial analysis experience, as well as his leadership experience
and familiarity with capital markets and financial reporting, make
him well qualified to serve on the Board.
Edward Terrence Gardner, Jr., age 56, Director
Mr. Gardner has served as a member of the Board since December 9,
2021. Mr. Gardner has over 25 years of capital markets, equity
research, and investment management experience. From 2015 to
present, Mr. Gardner has served as a Partner of C.J. Lawrence, LLC,
an investment management boutique and registered investment advisor
based in New York City, where he manages 50+ client accounts and
chairs the firm’s Investment Committee. Mr. Gardner also serves as
Chief Compliance Officer of C.J. Lawrence, LLC. Previously, he has
held senior analytical and management roles at Deutsche Bank
Securities, ITG, and Soleil Securities Group. Earlier, Mr. Gardner
served as an equity research analyst covering the ground
transportation industry and was ranked as the Top Stock Picker in
his category in the Wall Street Journal’s All-Star Analyst survey.
He holds a Bachelor of Arts in Economics from St. Lawrence
University.
We believe that Mr. Gardner’s extensive capital market and
management experience makes him well qualified to serve on the
Board.
Vote Required and
Recommendation of the Board
Directors are elected by plurality of the votes cast at the Meeting
by the holders of shares present virtually or represented by proxy
and entitled to vote on the election of the directors. If a quorum
is present and voting at the Meeting, the ten nominees receiving
the highest number of “FOR” votes will be elected. Shares
represented by executed proxies will be voted for which no contrary
instruction is given, if authority to do so is not withheld,
“FOR” the election of each of the nominees named above.
Votes withheld from any nominee, abstentions, and broker non-votes
will be counted only for purposes of determining a quorum. Broker
non-votes will have no effect on this proposal, as brokers or other
nominees are not entitled to vote on such proposals in the absence
of voting instructions from the beneficial owner.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE
“FOR”
THE ELECTION OF EACH NOMINEE UNDER PROPOSAL ONE
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITOR
Background
The Audit Committee of the Board (the “Audit Committee”) has
selected TPS Thayer, LLC (“TPS”) as our independent registered
public accounting firm for the fiscal year ending February 28,
2022, and has further directed that we submit the selection of TPS
as our independent registered accounting firm for ratification by
our stockholders at the Meeting. TPS was engaged effective
September 30, 2020. Thayer O’Neal Company, LLC (“Thayer”) audited
the Company’s financial statements for the fiscal years ended
February 29, 2020 and February 28, 2019, and subsequently applied
for de-registration from the Public Company Accounting Oversight
Board (“PCAOB”).
We are asking our stockholders to ratify the appointment of TPS as
our independent registered public accounting firm for the fiscal
year ending February 28, 2022. In the event our stockholders do not
ratify the appointment of TPS as our independent registered public
accounting firm, our Audit Committee will reconsider its
appointment. We do not expect that a representative of TPS will be
present at the Meeting; however, if a representative is present, he
or she will be able to make a statement if he or she so desires,
and will be available to respond to appropriate questions.
In deciding to appoint TPS as our independent registered public
accounting firm, the Audit Committee reviewed auditor independence
issues and existing commercial relationships with TPS and concluded
that TPS has no commercial relationship with the Company that would
impair its independence for the fiscal year ending February 28,
2022.
Independent
Registered Public Accounting Firm’s Fees
The following table presents fees for professional audit and merger
and acquisition related services performed by TPS and other
professional firms for the audit of our annual financial
statements, review of our quarterly financial statements, and all
merger and acquisition related activities from September 30, 2020
for the years ended February 28, 2021 and February 29, 2020.
Prior to the appointment of TPS, Thayer served as our independent
registered accounting firm from May 16, 2019 to September 30, 2020,
and audited our financial statements for the years ended February
29, 2020 and February 28, 2019. Prior to the appointment of Thayer,
M&K had served as our independent registered accounting firm
from October 11, 2018 to May 16, 2019.
| |
|
TPS |
|
|
Others |
|
| |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
| Audit Fees(1) |
|
$ |
39,500 |
|
|
$ |
— |
|
|
$ |
48,500 |
|
|
|
89,000 |
|
| Audit-Related Fees(2) |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| M&A Fees(3) |
|
|
10,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| All Other Fees(4) |
|
|
17,000 |
|
|
|
— |
|
|
|
20,000 |
|
|
|
— |
|
|
Total |
|
$ |
66,500 |
|
|
$ |
0 |
|
|
$ |
68,500 |
|
|
|
89,000 |
|
|
(1) |
Audit
fees include professional services rendered for (i) the audit
of our annual financial statements for the fiscal years ended
February 28, 2021 and February 29, 2020 and (ii) the reviews
of the financial statements included in our Quarterly Reports on
Form 10-Q for such years. |
|
(2) |
Audit-related fees consist of fees billed for
professional services that are reasonably related to the
performance of the audit or review of our consolidated financial
statements, but are not reported under “Audit fees.” |
| (3) |
Fees
include professional services relating to preparation of the annual
tax return. |
| (4) |
Other
fees include professional services for review of various filings
and issuance of consents. |
Pre-Approval
Policies and Procedures
It is the policy of our Board that all services to be provided by
our independent registered public accounting firm, including audit
services and permitted audit-related and non-audit services, must
be pre-approved by our Board. Our Board pre-approved all services,
audit and non-audit, provided to us by TPS, Thayer, and M&K for
fiscal 2021 and 2020.
In order to assure continuing auditor independence, the Audit
Committee periodically considers the independent auditor’s
qualifications, performance and independence and whether there
should be a regular rotation of our independent external audit
firm. We believe the continued retention of TPS to serve as our
independent auditor is in the best interests of the Company and its
stockholders, and we are asking our stockholders to ratify the
appointment of TPS as our independent auditor for the year ended
February 28, 2022. While the Audit Committee is responsible for the
appointment, compensation, retention, termination and oversight of
the independent registered public accounting firm, the Audit
Committee and our board of directors are requesting, as a matter of
policy, that the stockholders ratify the appointment of TPS as our
independent registered public accounting firm.
Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure
Thayer O’Neal Company, LLC
Prior to its de-registration with the PCAOB, Thayer served as our
independent registered accounting firm from May 16, 2019 to
September 30, 2020, and audited our financial statements for the
years ended February 29, 2020 and February 28, 2019. On September
30, 2020, in connection with its de-registration, the Company
dismissed Thayer as the independent registered public accounting
firm of the Company. The Company’s Board of Directors approved the
dismissal of Thayer.
The reports of Thayer regarding the Company’s financial statements
for the fiscal years ended February 29, 2020 and February 28, 2019
did not contain any adverse opinion or disclaimer of opinion and
were not modified as to uncertainty, audit scope, or accounting
principles, except each report did contain an explanatory paragraph
related to the Company’s ability to continue as a going concern.
During the Company’s fiscal years ended February 29, 2020 and
February 28, 2019, and through September 30, 2020, there were (i)
no disagreements with Thayer on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction
of Thayer would have caused Thayer to make reference to the subject
matter of the disagreements in connection with its report, and (ii)
with the exception of material weaknesses related to the
reconciliation of various accounts, lack of precision and accuracy
to properly reflect in the financial statements, there were no
“reportable events,” as that term is defined in Item 304(a)(1)(v)
of Regulation S-K.
On September 30, 2020, the Company engaged TPS as the Company’s new
independent registered public accounting firm. The appointment of
TPS was approved by the Company’s Board.
The Company disclosed the change in auditors in a Current Report on
Form 8-K filed with the Securities and Exchange Commission on
October 5, 2020.
M&K CPAS, PLLC
Prior to the appointment of Thayer, M&K served as our
independent registered accounting firm from October 11, 2018 to May
16, 2019. On May 16, 2019, M&K resigned as the independent
registered public accounting firm of the Company.
M&K reviewed the Company’s Quarterly Reports on Form 10-Q for
the quarters ended August 31, 2018 and November 30, 2018. M&K
did not provide any audit reports to the Company, and as such,
there were no adverse opinions or disclaimers of opinion and no
qualifications or modifications as to uncertainty, audit scope or
accounting principles.
During the period from October 11, 2018, and through May 16, 2019,
there were (i) no disagreements with M&K on any matter of
accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of M&K would have caused M&K
to make reference to the subject matter of the disagreements in
connection with its report, and (ii) there were no events of the
type described in Item 304(a)(1)(v) of Regulation S-K, except as
disclosed below. The Company had one disagreement with M&K.
M&K believed the complexities related to a series of
transactions warranted formal consultation with the Securities and
Exchange Commission’s Office of the Chief Accountant (“SEC-OCA”).
The Company believed that the transactions did not warrant formal
consultation with the SEC-OCA and that it did not have sufficient
time to request such formal guidance (with the due date of its
Annual Report on Form 10-K approaching). Because the Company did
not believe requesting guidance from the SEC-OCA was warranted and
because it did not want to spend the time and resources to request
guidance from the SEC-OCA, M&K resigned.
On May 16, 2019, the Company engaged Thayer as the Company’s new
independent registered public accounting firm. The appointment of
Thayer was approved by the Company’s Board.
The Company disclosed the change in auditors in a Current Report on
Form 8-K filed with the Securities and Exchange Commission on May
21, 2019.
Vote Required and
Recommendation of the Board
Ratification of this appointment requires the affirmative
(“For”) vote of a majority of the votes cast on the proposal
(more “For” votes than “Against” votes), provided
that a quorum exists at the Meeting. Broker non-votes (if any) and
abstentions will not be counted as votes cast, and will have no
effect on determining whether the affirmative votes constitute a
majority of the votes cast at the Meeting. Properly executed
proxies will be voted at the Meeting in accordance with the
instructions specified on the proxy; if no such instructions are
given, the persons named as agents and proxies in the enclosed form
of proxy will vote such proxy “For” the ratification of the
appointment of TPS.
Our Audit Committee is not required to take any action as a result
of the outcome of the vote on this Proposal. In the event
stockholders fail to ratify the appointment, the Audit Committee
may reconsider this appointment. Even if the appointment is
ratified, the Audit Committee, in its discretion, may direct the
appointment of a different independent accounting firm at any time
during the year if the committee determines that such a change
would be in our and the stockholders’ best interests.
OUR BOARD RECOMMENDS A VOTE “FOR”
THE APPOINTMENT OF TPS THAYER, LLC CERTIFIED PUBLIC ACCOUNTANTS
AS OUR INDEPENDENT PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING FEBRUARY 28, 2022.
PROPOSAL 3
APPROVAL OF THE WARRANT AMENDMENT
Background
As previously disclosed in that Current Report on 8-K filed by the
Company on November 3, 2021, on November 1, 2021 (the “Offering
8-K”), we entered into a Securities Purchase Agreement (the “SPA”)
with certain institutional investors (the “Purchasers”), pursuant
to which we agreed to issue and sell, in a registered direct
offering (the “Offering”), an aggregate of 18,987,342 shares (the
“Shares”) of our common stock, par value $0.00001 per share,
together with warrants to purchase an aggregate of 14,240,508
shares of common stock (the “Warrants”), at a combined price of
$1.58 per Share and accompanying three quarters of a Warrant.
Each whole Warrant sold in the Offering is exercisable for one
share of our common stock at an initial exercise price of $1.97 per
share (the “Initial Exercise Price”), the closing sales price of
our common stock on October 29, 2021 (the last trading day prior to
the date that the SPA was entered into). The Warrants may be
exercised commencing six months after the issuance date (the
“Initial Exercise Date”) and terminating on the fifth anniversary
of the Initial Exercise Date. The Warrants are exercisable for
cash; provided, however that they may be exercised on a cashless
exercise basis if, at the time of exercise, there is no effective
registration statement registering, or no current prospectus
available for, the issuance or resale of the shares of common stock
issuable upon exercise of the Warrants. The exercise of the
Warrants will be subject to a beneficial ownership limitation,
which will prohibit the exercise thereof, if upon such exercise the
holder of the Warrants, its affiliates and any other persons or
entities acting as a group together with the holder or any of the
holder’s affiliates would hold 4.99% (or, upon election of a
purchaser prior to the issuance of any shares, 9.99%) of the number
of shares of the common stock outstanding immediately after giving
effect to the issuance of shares of common stock issuable upon
exercise of the Warrant held by the applicable holder, provided
that the holders may increase or decrease the beneficial ownership
limitation (up to a maximum of 9.99%) upon 61 days advance notice
to the Company, which 61 day period cannot be waived.
The Warrants also include certain anti-dilution rights, which
provide that if at any time the Warrants are outstanding, we issue
or enter into any agreement to issue, or are deemed to have issued
or entered into an agreement to issue (which includes the issuance
of securities convertible or exercisable for shares of common
stock), securities for consideration less than the then current
exercise price of the Warrants, the exercise price of such Warrants
will be automatically reduced to the lowest price per share of
consideration provided or deemed to have been provided for such
securities; provided, however, that unless and until the Company
has received stockholder approval to reduce the exercise price of
the Warrants below the Floor Price, $1.97 per share, no such
adjustment to the exercise price may be made.
Pursuant to the SPA, we agreed to use our best efforts to obtain
stockholder approval within 90 days from November 1, 2021 (the date
of the prospectus supplement) to remove the Floor Price of the
Warrants (the “Warrant Amendment”). In the event that such
stockholder approval is not obtained within 90 days of November 1,
2021, we agreed to hold a special meeting of our stockholders every
three months thereafter, for so long as the Warrants remain
outstanding, to obtain such stockholder approval of the Warrant
Amendment.
In accordance with our obligations under the SPA, we held a special
meeting of our stockholders on January 28, 2022, at which special
meeting we presented a proposal to approve the Warrant Amendment to
our stockholders. However, our stockholders did not approve the
Warrant Amendment, and as a result, the original terms of the
Warrant, including the Floor Price, remain in full force and
effect.
The foregoing description of the SPA the Warrants is not complete
and is qualified in its entirety by reference to the full text of
the form of SPA and form of Common Stock Purchase Warrant, copies
of which are attached as Exhibit 10.1 and Exhibit 4.1,
respectively, to the Offering 8-K, which is incorporated by
reference herein.
Effects of the
Warrant Amendment
As discussed above, pursuant to the SPA, if at any time the
Warrants are outstanding, we issue or enter into any agreement to
issue, or are deemed to have issued or entered into an agreement to
issue (which includes the issuance of securities convertible or
exercisable for shares of common stock), securities for
consideration less than the then current exercise price of the
Warrants, the exercise price of such Warrants will be automatically
reduced to the lowest price per share of consideration provided or
deemed to have been provided for such securities, subject to the
Floor Price limitation. If we amend the Warrants to remove the
Floor Price, we will be required to reduce the exercise price of
the Warrants in the event that we issue, or enter into an agreement
to issue, securities at a price that is lower than $1.97 per share,
subject to limited exceptions.
Reduction in the exercise price of the Warrants would reduce the
proceeds that we would receive upon exercise of the Warrants by
holders thereof. In addition, the reduction in exercise price could
incentivize holders of the Warrant to exercise their Warrants when
they may not otherwise do so, which could result in significant
dilution in the percentage ownership interest of our existing
common stockholders and in a significant dilution of voting rights
and earnings per share. The sale or availability for sale of shares
issuable upon exercise of the Warrants at a reduced price per share
may depress the price of our common stock and could encourage short
sales by third parties, which could further depress the price of
our common stock. It could also make it more difficult for us to
raise additional working capital at terms favorable to the Company
and or its stockholders, which could negatively impact our
business.
To the extent that the holders the Warrants sell shares of our
common stock issued upon exercise of the Warrants, the market price
of such shares may decrease due to the additional selling pressure
in the market. In addition, the risk of dilution from issuances of
such shares may cause stockholders to sell their shares of our
common stock, which could further contribute to any decline in the
price of our common stock. Any downward pressure on the price of
our common stock caused by the sale or potential sale of such
shares could encourage short sales by third parties. In a short
sale, a prospective seller borrows shares from a stockholder or
broker and sells the borrowed shares. The prospective seller hopes
that the share price will decline, at which time the seller can
purchase shares at a lower price for delivery back to the lender.
The seller profits when the share price declines because it is
purchasing shares at a price lower than the sale price of the
borrowed shares. Such sales could place downward pressure on the
price of our common stock by increasing the number of shares of our
common stock being sold, which could further contribute to any
decline in the market price of our common stock.
Reasons for
Stockholder Approval
Our common stock is listed on the Nasdaq Capital Market, and, as
such, we are subject to the applicable rules of the Nasdaq Stock
Market LLC, including Nasdaq Listing Rule 5635(d), which requires
stockholder approval prior to the issuance of securities in
connection with a transaction other than a public offering
involving the sale, issuance or potential issuance by the Company
of common stock (or securities convertible into or exercisable for
common stock) at a price less than the greater of book or market
value which equals 20% or more of common stock or 20% or more of
the voting power outstanding before the issuance; or the sale,
issuance or potential issuance by the Company of common stock (or
securities convertible into or exercisable for common stock) equal
to 20% or more of the common stock or 20% or more of the voting
power outstanding before the issuance for less than the greater of
book or market value of the stock.
As noted above, we issued an aggregate of 18,987,342 Shares,
together with Warrants to purchase an aggregate of 14,240,508
shares of common stock, at a combined offering price of $1.58 per
Share and accompanying three quarters of a Warrant. For purposes of
Nasdaq Listing Rule 5635(d), the number of shares issued below fair
market value of our common stock in the Offering amounted to
18,987,342 shares, the number of Shares issued in the Offering,
which equaled approximately 19.94% of our issued and outstanding
shares of common stock. Because the Initial Exercise Price of the
Warrants, as well as the Floor Price of the Warrants, was equal to
fair market value of our common stock ($1.97 per share), the
Warrants were not deemed to be issued at a price less than the fair
market value of our common stock as of the date of the SPA. As a
result, we were not required to obtain stockholder approval in
order to consummate the Offering.
Because removal of the Floor Price could result in the exercise
price of the Warrants falling below the market price of our common
stock, as set forth in the SPA, which would result in our issuance
of more than 20% of our issued and outstanding securities as of the
date of the Offering at a price below market value, we must obtain
stockholder approval of such amendment in order to comply with
Nasdaq Listing Rule 5635(d).
As noted above, pursuant to the SPA, we agreed to use our best
efforts to obtain stockholder approval within 90 days from November
1, 2021 to remove the Floor Price of the Warrants. The Warrant
Amendment was not approved by our stockholders at the special
meeting held on January 28, 2022. Thus, in order to ensure that we
comply with applicable Nasdaq rules and our obligations under the
SPA, we are again asking for stockholder approval of the Warrant
Amendment.
In the event that we do not obtain the necessary stockholder
approval of the Warrant Amendment at the Meeting, we will be
obligated to hold a special meeting of our stockholders within
three months of the Meeting, and every three months thereafter, for
so long as the Warrants remain outstanding, to obtain such
stockholder approval.
Vote Required and
Recommendation by the Board
Approval of the Warrant Amendment requires the affirmative
(“For”) vote of a majority of the votes cast on the proposal
(more “For” votes than “Against” votes), provided
that a quorum exists at the Meeting. Broker non-votes and
abstentions will not be counted as votes cast, and will have no
effect on determining whether the affirmative votes constitute a
majority of the votes cast at the Meeting. Properly executed
proxies will be voted at the Meeting in accordance with the
instructions specified on the proxy; if no such instructions are
given, the persons named as agents and proxies in the enclosed form
of proxy will vote such proxy “For” approving the Warrant
Amendment.
OUR BOARD RECOMMENDS A VOTE “FOR”
APPROVING THE WARRANT AMENDMENT UNDER PROPOSAL THREE
PROPOSAL 4
ADJOURNMENT OF THE MEETING
General
Our stockholders may be asked to consider and act upon one or more
adjournments of the Meeting, if necessary or appropriate, to
solicit additional proxies in favor of any or all of the other
proposals set forth in this Proxy Statement.
If a quorum is not present at the Meeting, our stockholders may be
asked to vote on the proposal to adjourn the Meeting to solicit
additional proxies. If a quorum is present at the Meeting, but
there are not sufficient votes at the time of the Meeting to
approve one or more of the proposals, our stockholders may also be
asked to vote on the proposal to approve the adjournment of the
Meeting to permit further solicitation of proxies in favor of the
other proposals. However, a stockholder vote may be taken on one of
the proposals in this Proxy Statement prior to any such adjournment
if there are sufficient votes for approval on such proposal.
If the adjournment proposal is submitted for a vote at the Meeting,
and if our stockholders vote to approve the adjournment proposal,
the Meeting may be adjourned to enable the Board to solicit
additional proxies in favor of one or more proposals. If the
adjournment proposal is approved, and the Meeting is adjourned, the
Board will use the additional time to solicit additional proxies in
favor of any of the proposals to be presented at the Meeting,
including the solicitation of proxies from stockholders that have
previously voted against the relevant proposal.
Our Board believes that, if the number of shares of our common
stock voting in favor of any of the proposals presented at the
Meeting is insufficient to approve a proposal, it is in the best
interests of our stockholders to enable the Board, for a limited
period of time, to continue to seek to obtain a sufficient number
of additional votes in favor of the proposal. Any signed proxies
received by us in which no voting instructions are provided on such
matter will be voted in favor of an adjournment in these
circumstances. The time and place of the adjourned Meeting will be
announced at the time the adjournment is taken. Any adjournment of
the Meeting for the purpose of soliciting additional proxies will
allow our stockholders who have already sent in their proxies to
revoke them at any time prior to their use at the Meeting, as
adjourned or postponed.
Vote
Required
Authority to adjourn the Meeting pursuant to this Proposal 4, to
another place, date or time, if deemed necessary or appropriate, in
the discretion of the Board, requires the affirmative
(“For”) vote of a majority of the shares of common stock
entitled to vote which are present, in person or by proxy, at the
Meeting. Broker non-votes will not have any effect on the outcome
of this Proposal 4. Abstentions will be treated as a vote
“Against” this Proposal 4.
OUR BOARD RECOMMENDS A VOTE “FOR”
THE ADJOURNMENT OF THE MEETING,
IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL
PROXIES.
REFERENCES TO
ADDITIONAL INFORMATION
Included with this Proxy Statement is a copy of our Annual
Report, as filed with the SEC on June 8, 2021.
You may also request a copy of this Proxy Statement and the Annual
Report from Issuer Direct Corporation, our proxy agent, at the
following address and telephone number:
Issuer Direct Corporation
(919) 447-3740, or 1-866-752-VOTE (8683)
VOTING RIGHTS AND
PRINCIPAL STOCKHOLDERS
Holders of record of our common stock at the close of business on
the record date, February 24, 2022, will be entitled to one vote
per share on all matters properly presented at the Meeting and at
any adjournment or postponement thereof. As of the record date,
there were 114,060,020 shares of common stock outstanding and
entitled to vote at the Meeting and at any adjournment or
postponement thereof, held by approximately 510 holders of record.
Each share of common stock is entitled to one vote on each proposal
presented at the Meeting, for 114,060,020 total voting
shares.
Our stockholders do not have dissenters’ rights or similar rights
of appraisal with respect to the proposals described herein
Security Ownership
of Management and Certain Beneficial Owners and
Management
The following table sets forth, as of the record date, February 24,
2022, the number and percentage of outstanding shares of our common
stock beneficially owned by: (a) each person who is known by us to
be the beneficial owner of more than 5% of our outstanding shares
of common stock; (b) each of our directors; (c) our named executive
officers; and (d) all current directors, our director nominees and
executive officers, as a group. As of the record date, there
were 114,060,020 shares of common stock issued and
outstanding.
Beneficial ownership has been determined in accordance with Rule
13d-3 under the Exchange Act. Under this rule, certain shares may
be deemed to be beneficially owned by more than one person (if, for
example, persons share the power to vote or the power to dispose of
the shares). In addition, shares are deemed to be beneficially
owned by a person if the person has the right to acquire shares
(for example, upon exercise of an option or warrant or upon
conversion of a convertible security) within 60 days
of February 24, 2022. In computing the percentage ownership of
any person, the amount of shares is deemed to include the amount of
shares beneficially owned by such person by reason of such
acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in the following table does not
necessarily reflect the person’s actual voting power at any
particular date.
To our knowledge, except as indicated in the footnotes to this
table and pursuant to applicable community property laws,
(a) the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown
as beneficially owned by them, subject to applicable community
property laws; and (b) no person owns more than 5% of our
common stock. Unless otherwise indicated, the address for each of
the officers or directors listed in the table below is 1560
Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323.
|
Name of Beneficial Owner |
|
Shares
of
Common
Stock
Beneficially
Owned (1) |
|
|
Percent
of
Common
Stock
Outstanding (2) |
|
| Executive
Officers and Directors |
|
|
|
|
|
|
|
William Kerby, Co-Chief Executive Officer & Director |
|
|
905,822 |
(3) |
|
|
*
|
|
| Nithinan
Boonyawattanapisut, Co-Chief Executive Officer & Director |
|
|
23,407,110 |
(4) |
|
|
20.5 |
% |
| Sirapop “Kent”
Taepakdee, Chief Financial Officer |
|
|
27,500 |
|
|
|
*
|
|
| Tim Sikora,
Chief Information Officer |
|
|
27,000 |
|
|
|
*
|
|
| Andrew
Greaves, Chief Operating Officer |
|
|
100,000 |
|
|
|
*
|
|
| Mark Vange,
Chief Technology Officer |
|
|
1,000,000 |
|
|
|
*
|
|
| Donald P.
Monaco, Director |
|
|
2,215,669 |
(5) |
|
|
1.9 |
% |
| John Todd
Bonner, Chairman of the Board |
|
|
23,407,110 |
(4) |
|
|
20.5 |
% |
| Athid
Nanthawaroon, Director |
|
|
121,727 |
|
|
|
*
|
|
| Carmen Diges,
Director |
|
|
27,159 |
|
|
|
*
|
|
| Komson
Kaewkham, Director |
|
|
22,238 |
|
|
|
*
|
|
| Yoshihiro
Obata, Director |
|
|
777,159 |
(6) |
|
|
*
|
|
| Farooq Moosa,
Director |
|
|
1,258 |
|
|
|
*
|
|
| Edward
Terrance Gardner, Jr., Director |
|
|
629,965 |
|
|
|
*
|
|
| All Executive
Officers and Directors as a Group (14 persons) |
|
|
29,262,607 |
(7) |
|
|
25.6 |
% |
| |
|
|
|
|
|
|
|
|
| 5%
Stockholders |
|
|
|
|
|
|
|
|
| Red
Anchor Trading Corp. Limited (8) |
|
|
14,794,503 |
|
|
|
13.0 |
% |
| Tree
Roots Entertainment Group Co Ltd.(9) |
|
|
12,366,667 |
|
|
|
10.8 |
% |
|
(1) |
Includes warrants and convertible securities
exercisable or convertible for common stock within 60 days
of February 24, 2022. |
| (2) |
Based
on 114,060,020 shares of common stock outstanding as
of February 24, 2022. |
| (3) |
William Kerby holds 670,872 shares of common
stock and warrants to purchase 15,300 shares of common stock of the
Company individually. Mr. Kerby is deemed to own 80,000 shares held
by In-Room Retail Systems, LLC, which entity he owns. 139,650
shares of common stock are also issuable upon conversion of that
certain Convertible Promissory Note in the amount of $421,744,
which accrues interest at the rate of 12% per annum, compounded
monthly at the end of each calendar month, with such interest
payable at maturity or upon conversion. The principal and accrued
interest owed under the Convertible Promissory Note is convertible,
at the option of the holder thereof, into shares of the Company’s
common stock, at any time beginning seven days after the date the
HotPlay Exchange Agreement closes and prior to the payment in full
of such Convertible Promissory Note by the Company, at a conversion
price equal to the greater of (i) the closing consolidated bid
price of the Company’s common stock on April 8, 2021 (which was
$3.02); and (ii) the five-day volume weighted average price of the
Company’s common stock for the five trading days following the date
that the HotPlay Exchange Agreement closes. The Convertible
Promissory Note is unsecured, has a maturity date of April 7, 2022,
and includes standard and customary events of default. |
| (4) |
Nithinan Boonyawattanapisut and John Todd Bonner
are married. Accordingly, they beneficially own the same securities
of the Company. Ms. Boonyawattanapisut’s and Mr. Bonner’s holdings
consist of the following: (i) 2,300,204 shares of common stock held
directly by Ms. Boonyawattanapisut; (ii) 27,500 shares of common
stock held directly by Mr. Bonner; (iii) 14,794,503 shares of
common stock held by Red Anchor Trading Corporation (“Red Anchor”),
10.91% of which is owned by Ms. Boonyawattanapisut and 19.77% of
which is owned by Mr. Bonner; (iv) 2,500,000 shares of common stock
NextPlay Holdings LLC, 73.3% of which is owned by Red Anchor; (v)
1,558,046 shares of common stock held by Cern One Limited, 100% of
which is owned by Ms. Boonyawattanapisut, and (vi) 2,226,857 shares
of common stock held by Found Side Ltd., 50% of which is owned by
Ms. Boonyawattanapisut and 48% of which is owned by Mr. John Todd
Bonner. |
| (5) |
Donald P. Monaco beneficially owns (i) 934,224
shares of common stock owned by the Donald P. Monaco Insurance
Trust (the “Trust”), and (ii) 822,302 shares are beneficially owned
by Monaco Investment Partners II, LP (“MI Partners”). Mr. Monaco
also individually owns 245,530 shares of common stock of the
Company. Mr. Monaco is the managing general partner of MI Partners
and trustee of the Trust. Mr. Monaco disclaims beneficial ownership
of all shares held by the Trust and MI Partners in excess of his
pecuniary interest, if any. 213,613 shares of common stock are also
issuable upon conversion of that certain Convertible Promissory
Note in the amount of $645,112, which accrues interest at the rate
of 12% per annum, compounded monthly at the end of each calendar
month, with such interest payable at maturity or upon conversion.
The principal and accrued interest owed under the Convertible
Promissory Note is convertible, at the option of the holder
thereof, into shares of the Company’s common stock, at any time
beginning seven days after the date the HotPlay Exchange Agreement
closes and prior to the payment in full of such Convertible
Promissory Note by the Company, at a conversion price equal to the
greater of (i) the closing consolidated bid price of the Company’s
common stock on April 8, 2021 (which was $3.02); and (ii) the
five-day volume weighted average price of the Company’s common
stock for the five trading days following the date that the HotPlay
Exchange Agreement closes. The Convertible Promissory Note is
unsecured, has a maturity date of April 7, 2022, and includes
standard and customary events of default. |
| (6) |
Yoshihiro Obata’s holdings consist of 777,159
shares of common stock held by Global Networking, LLC, an entity
owned and controlled by Mr. Obata. |
| (7) |
Because Ms. Boonyawattanapisut and Mr. Bonner
beneficially own the same securities due to the fact that they are
married, such securities have only been included once for purposes
of calculating the number of shares of common stock held by all
executive officers and directors as a group. |
| |
|
| (8) |
Address: Morgan & Morgan Building, Pasea
Estate, PO Box 958, Road Town, Tortola, BVI. The shares are also
beneficially owned by Ms. Boonyawattanapisut’s and Mr. Bonner, as
discussed in footnote 4, above. Based on information reported on
Schedule 13D/A filed by Red Anchor (and others) with the SEC on
October 22, 2021, which has not been independently
verified. |
| |
|
| (9) |
Address: 695, Soi Sukhumvit 50, Sukhumvit Road
PHRA Khanong, Khlong TOIE Bangkok, Thailand 10260. Based on
information available to the Company, which has not been
independently verified. |
Delinquent Section
16(a) Reports
Section 16(a) of the Exchange Act requires our directors and
officers, and persons who beneficially own more than 10% of a
registered class of the Registrant’s equity securities, to file
reports of beneficial ownership and changes in beneficial ownership
of our securities with the SEC on Forms 3, 4 and 5. Officers,
directors and greater than 10% stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms
they file.
Based solely upon our review of the Section 16(a) filings that have
been furnished to us and filed publicly, we believe that during the
fiscal year ended February 28, 2021 no director, executive officer,
or beneficial owner of more than 10% of our common stock failed to
file a report on a timely basis, except that: Sirapop “Kent”
Taepakdee, our Chief Financial Officer, inadvertently failed to
timely disclose one transaction on Form 4 and as a result one Form
4 was filed untimely; Rupert Duchesne, who served as a director on
our Board during the relevant period, inadvertently failed to
timely disclose two transactions on Form 4 and as a result two Form
4s were filed untimely; Alexandra Zubko, who served as a director
on our Board during the relevant period, inadvertently failed to
timely disclose two transactions on Form 4 and as a result two Form
4s were filed untimely; Pasquale “Pat” LaVecchia, who served as a
director on our Board during the relevant period, inadvertently
failed to timely disclose two transactions on Form 4 and as a
result two Form 4s were filed untimely; Donald P. Monaco, our
director, inadvertently failed to timely disclose two transactions
on Form 4 and as a result two Form 4s were filed untimely; Simon
Orange, who served as a director on our Board during the relevant
period, inadvertently failed to timely disclose three transactions
on Form 4 and as a result three Form 4s were filed untimely; Doug
Checkeris, who served as a director on our Board during the
relevant period, inadvertently failed to timely disclose three
transactions on Form 4 and as a result three Form 4s were filed
untimely; and Robert “Jamie” Mendola, who served as a director on
our Board during the relevant period, inadvertently failed to
timely disclose three transactions on Form 4 and as a result three
Form 4s were filed untimely.
Pursuant to SEC rules, we are not required to disclose in this
filing any failure to timely file a Section 16(a) report that has
been disclosed by us in a prior annual report or proxy
statement.
Changes in
Control
The Company is not currently aware of any arrangements which may at
a subsequent date result in a change of control of the Company.
As previously disclosed by the Company in that Current Report on
8-K filed by the Company on July 23, 2020, the Company entered into
(a) a Share Exchange Agreement (as amended and restated to
date, the “HotPlay Exchange Agreement” and the transactions
contemplated therein, the “HotPlay Share Exchange”) with
HotPlay Enterprise Limited (“HotPlay”) and the stockholders of
HotPlay (the “HotPlay Stockholders”); and (b) a Share Exchange
Agreement (as amended to date, “Axion Exchange
Agreement”) with certain stockholders holding shares of Axion
Ventures, Inc. (“Axion” and the “Axion Stockholders”) and certain
debt holders holding debt of Axion (the “Axion Creditors”) (the
“Axion Share Exchange,” and collectively with the HotPlay Exchange
Agreement, the “Exchange Agreements,” and the transactions
contemplated therein, the “Share Exchanges”), each dated as of July
21, 2020. The Share Exchanges closed on June 30, 2021 (the
“Closing”). In connection with the Closing, the Company acquired
100% of the outstanding capital shares of HotPlay (making HotPlay a
wholly-owned subsidiary of the Company).
In connection with the Share Exchanges, upon the closing of the
HotPlay Share Exchange, the former HotPlay Stockholders were issued
52,000,000 shares of the Company’s common stock in exchange for
100% of the outstanding shares of HotPlay, and the outstanding
shares of Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock automatically converted into an
aggregate of 11,246,200 shares of our common stock (the “Preferred
Conversion”). As a result of the Closing, a change of control of
the Company occurred, with the former stockholders of HotPlay
obtaining control over the Company. The former stockholders of
HotPlay and the former holders of Series B Convertible Preferred
Stock and Series C Convertible Preferred Stock held 72.6% of the
Company’s 87,100,403 issued and outstanding shares of common stock
immediately following the Closing. Specifically, in connection with
the Closing, and the issuance of shares of common stock of the
Company in connection therewith and the Preferred Conversion,
effective June 30, 2021, Ms. Nithinan Boonyawattanapisut and Mr. J.
Todd Bonner, husband and wife, became the largest stockholders of
the Company, beneficially owning 31,117,544 shares of common stock,
or 35.7% of the Company’s then outstanding common stock (through
Ms. Boonyawattanapisut’s control of Red Anchor Trading Corporation,
which held 27,213,606 of such shares of record and Cern One
Limited, which held 3,562,208 shares of common stock, and an
additional 314,230 shares of common stock held by Ms.
Boonyawattanapisut directly and 27,500 shares held by Mr. Bonner,
directly). Separately, as of Closing, Jwanwat Ahriyavraromp and
Pornsinee Chalermrattawongz, each beneficially owned the 21,966,667
shares of common stock held by Tree Roots Entertainment Group, Ltd.
and the 3,533,333 shares of common stock held by Dee Supreme
Company Limited, issued in connection with the Closing, due to
their status as directors of such entities, which in aggregate
totaled 29.3% of the Company’s outstanding shares of common stock
immediately following the Closing.
Pursuant to the terms of the HotPlay Share Exchange, the former
HotPlay stockholders, had certain appointment rights as to officers
of the Company and directors of the Company, which were exercised
at Closing.
In addition, in connection with the above transactions, on or
around February 22, 2021, each of the HotPlay stockholders, and Ms.
Nithinan Boonyawattanapisut, Mr. J. Todd Bonner, Mr. Athid
Nanthawaroon and Mr. Komson Kaewkham, each nominees for appointment
to the Board at the closing, entered into a Voting Agreement with
Mr. William Kerby, the Company’s Chief Executive Officer (now
Co-Chief Executive Officer), and Mr. Donald P. Monaco, the Chairman
of the Board (now a Director). Pursuant to the Voting Agreement,
each of the HotPlay stockholders agreed to vote all voting shares
of the Company which they hold and may hold in the future (during
the term of the agreement) to elect Mr. Kerby and Mr. Monaco to the
Board, and each of the HotPlay nominees agreed to continue to
nominate each of Mr. Kerby and Mr. Monaco to the Board. The
agreement continues in effect until the earlier of February 26,
2026, the date of both Mr. Kerby’s and Mr. Monaco’s death, or the
date that both Mr. Kerby and Mr. Monaco have provided notice of
termination to such HotPlay Stockholders.
CERTAIN RELATIONSHIPS
AND RELATED PARTY TRANSACTIONS
Except as discussed below or otherwise disclosed below under the
section of this Proxy Statement entitled “Executive Compensation,”
which information is incorporated by reference where applicable in
this section, the following sets forth a summary of all
transactions since the beginning of the fiscal year of 2020, or any
currently proposed transaction, in which the Company was to be a
participant and the amount involved exceeded or exceeds the lesser
of $120,000 or one percent of the average of the Company’s total
assets at the fiscal year-end for 2021 and 2020, and in which any
Related Person had or will have a direct or indirect material
interest. We believe the terms obtained or consideration that we
paid or received, as applicable, in connection with the
transactions described below were comparable to terms available or
the amounts that would be paid or received, as applicable, in
arm’s-length transactions. “Related Persons” include each of our
“Named Executive Officers,” as defined under the section of this
Proxy Statement entitled “Summary Executive Compensation Table,”
each person who was serving on our board of directors as of the
date that the related party transaction occurred, and any 5%
shareholder of the Company.
Related Party
Transactions
Dividends in arrears on the previously outstanding Series A
Preferred Stock shares totaled $1,102,066 as of August 21, 2020,
May 31, 2020, February 29, 2020 and February 28, 2019. These
dividends were payable when and if declared by the Board. The
dividends were owed to an entity controlled by Donald P. Monaco,
our director (and prior Chairman of the Board), and William Kerby,
our Co-Chief Executive Officer and a director. On April 8, 2021, we
entered into an Exchange Agreement with William Kerby, our Chief
Executive Officer (at the time) and director, and Monaco Investment
Partners II, LP (“MI Partners”), of which Donald P. Monaco (who
served as the chairman of our Board at that time) is the managing
general partner (the “Exchange Agreement”). Pursuant to the
Exchange Agreement, the terms of which were approved by the Board,
Mr. Kerby and MI Partners exchanged their right to an aggregate of
$1,016,314 in accrued dividends (the “Accrued Dividends”), which
had accrued on our outstanding Series A Preferred Stock, which had
been held by Mr. Kerby and MI Partners prior to the conversion of
such Series A Preferred Stock into common stock of the Company in
August 2017, for Convertible Promissory Notes. Specifically, Mr.
Kerby exchanged rights to $430,889 of accrued dividends on the
Series A Preferred Stock for a Convertible Promissory Note with a
principal balance of $430,889 and MI Partners exchanged rights to
$585,425 of accrued dividends on the Series A Preferred Stock for a
Convertible Promissory Note with a principal balance of $585,425
(the “Convertible Promissory Notes”).
The Convertible Promissory Notes accrue interest at the rate of 12%
per annum, compounded monthly at the end of each calendar month,
with such interest payable at maturity or upon conversion. The
principal and accrued interest owed under the Convertible
Promissory Notes is convertible, at the option of the holders
thereof, into shares of our common stock, at any time beginning
seven days after the Closing Date (defined below) and prior to the
payment in full of such Convertible Promissory Notes by us, at a
conversion price equal to the greater of (i) the closing
consolidated bid price of our common stock on April 8, 2021 (which
was $3.02); and (ii) the five-day volume weighted average price of
our common stock for the five trading days following the closing
date of the HotPlay Exchange Agreement. The Convertible Promissory
Notes are unsecured, have a maturity date of April 7, 2022, and
include standard and customary events of default.
On October 29, 2019, we entered into Promissory Notes with Robert
“Jamie” Mendola, Jr. (a director of the Company at that
time) and Pasquale “Pat” LaVecchia (a director of the Company
at that time) in the amounts of $150,000 and $25,000,
respectively (the “Director Notes”). The Director Notes have an
interest rate of 12% per annum (18% upon the occurrence of an event
of default) and were originally due and payable on February 1,
2020, but were subsequently extended as discussed below, provided
that the notes may be prepaid at any time without penalty (provided
that all interest that would have been due had the notes remained
outstanding through maturity must be paid at the time of
repayment). The Company paid a 2% original issue discount in
connection with the notes.
On December 9, 2019, the Company entered into an Amended and
Restated Promissory Note with the Monaco Trust, in the amount of up
to $2,700,000 (the “Revolving Monaco Trust Note”). The Revolving
Monaco Trust Note amended and restated a previous promissory Note
entered into by the Company in favor of the Monaco Trust on
February 4, 2019 (the 2019 Monaco Trust Note discussed above), in
the amount of up to $700,000, which had a balance as of December 9,
2019 of $700,000. On the same date, the Company borrowed $200,000
from the Monaco Trust under the Revolving Monaco Trust Note. On
December 27, 2019 and February 12, 2020, the Company borrowed an
additional $300,000 and $200,000, respectively, from the Monaco
Trust under the Revolving Monaco Trust Note, which had a balance of
$1,200,000 as of February 29, 2020.
On January 22, 2020, the Company entered into Stock Purchase
Agreements with William Kerby, then the Chief Executive Officer and
director of the Company (the “Purchaser” and the “Stock Purchase
Agreement”). Pursuant to the Stock Purchase Agreement, the Company
agreed to sell the Purchaser 1,562,500 shares of restricted Series
A Convertible Preferred Stock of Verus International, Inc.
(formerly known as RealBiz Media Group, Inc. (“Verus”), which the
Company then held (out of the 31,970,101 shares of Series A
Convertible Preferred Stock of Verus which the Company then held)
for an aggregate of $25,000, or $0.016 per share. The purchase
price for the Verus shares was determined by the Board, based on
among other things, the recent trading prices of Verus’ common
stock on the OTCQB Market, as publicly reported. The sale
contemplated by the Stock Purchase Agreement closed on January
22, 2020.
On January 29, 2020, the Company entered into first amendments to
the Director Notes and Revolving Monaco Trust Note with the
directors and the Monaco Trust, respectively, to extend the
maturity date of such notes from February 1, 2020 to April 1, 2020
(the “Note Amendments”). No other changes were made to such notes
as a result of such amendments.
On March 13, 2020 and March 26, 2020, the Company borrowed an
additional $100,000 and $75,000, respectively, from the Monaco
Trust pursuant to the terms of the Revolving Monaco Trust Note.
On March 27, 2020, the Company entered into second amendments to
the Director Notes to extend the maturity date of such Director
Notes from April 1, 2020 to June 1, 2020, and entered into an
amendment to extend the due date of the Revolving Monaco Trust Note
from April 1, 2020 to December 1, 2020. All remaining terms of the
promissory notes remained unchanged.
On April 17, 2020, the Company paid off the Promissory Note with
Pasquale “Pat” LaVecchia, a member of the board of directors, in
the amount of $26,225 (the principal of $25,000 and the interest of
$6,225).
On April 27, 2020, the Company filed a verified complaint for
injunctive relief against IDS (who was a greater than 5%
stockholder of the Company at that time) and certain other
defendants affiliated with IDS in the Circuit Court of the
Seventeenth Judicial Circuit in and for Broward County, Florida.
Pursuant to the complaint, the Company alleges causes of action
against the defendants, including IDS, based on among other things,
fraud, conspiracy to commit fraud, aiding and abetting fraud,
rescission, and breach of contract, and seeks a temporary and
permanent injunction against the defendants, requiring such persons
to return the 1,968,000 shares of common stock disclosed above to
the Company and preventing such persons from selling or
transferring any shares, seeks damages from the defendants,
rescission of the IP Purchase Agreement pursuant to which the
shares were issued, attorneys fees and other amounts. The complaint
was filed as a result of IDS’ failure to deliver certain
intellectual property assets which were acquired by the Company
from IDS in August 2019, certain other actions of IDS and the other
defendants which the Company alleges constitutes fraud and to seek
to unwind the IP Purchase Agreement and provide damages to the
Company due to IDS’ and the other defendants’ breaches
thereunder.
On March 13, 2020 and March 26, 2020, the Company borrowed an
additional $100,000 and $75,000, respectively, from the Monaco
Trust pursuant to the terms of the Revolving Monaco Trust. On June
9, 2020 and June 10, 2020, the Company borrowed an additional
$300,000 and $50,000, respectively, from the Monaco Trust. On July
7, 2020 and July 20, 2020, the Company borrowed an additional
$250,000 and $50,000, respectively, from the Monaco Trust. On July
27, 2020, the Company paid principal of $50,000 and accrued
interest of $49,784. On September 22, 2020, the Company made a
payment of $200,000 under the Revolving Monaco Trust Note,
including $142,408 of principal and $57,592 of interest owed
thereunder.
On May 1, 2020, the Company paid off the Promissory Note with
Robert “Jamie” Mendola, Jr., in the amount of $157,595 (the
principal of $150,000 and the interest of $7,595).
On June 9, 2020, June 10, 2020, July 7, 2020, we borrowed an
additional $300,000, $50,000 and $250,000 from the Monaco Trust
under the Revolving Monaco Trust Note.
On November 6, 2020, the Company entered into a third amendment to
the Revolving Trust Note with the Monaco Trust, to extend the
maturity date of such Revolving Monaco Trust Note to February 28,
2021. No other changes were made to such note as a result of such
amendment.
On November 16, 2020, the Company entered into a fourth amendment
to the Revolving Trust Note with the Monaco Trust, to increase the
amount available under such Revolving Monaco Trust Note to
$2,800,000. No other changes were made to such note as a result of
such amendment.
On December 1, 2020, the Company paid $800,000 of principal and
interest due under the Revolving Trust Note.
The Revolving Trust Note was subsequently repaid in full in
December 2020, with funds raised through our December 2020
underwritten offering.
On September 8, 2020, the Company issued Sirapop “Kent” Taepakdee,
then Acting Chief Financial Officer and Vice President of Finance
(Principal Financial and Accounting Officer) and Timothy
Sikora, the Chief Operating Officer and Chief Information Officer
of the Company, an aggregate of 17,500 and 15,000 shares of common
stock of the Company, respectively, as a bonus in consideration for
services rendered. The issuances were authorized by the Board and
the Compensation Committee of the Board, and granted under the
Company’s 2017 Amended and Restated Equity Incentive Plan. The
shares vested immediately upon issuance.
On September 1, 2020, the Company entered into a consulting
agreement with Beachfront Travel Consulting LLC for their services
and expertise in Call Center and Sales Operations. The consultant
agreed to assist the Company in the development and design of a
Call Center Operation to support the Company’s brand. The Company
agreed to pay the consultant compensation of 1,500 restricted
shares of common stock per month, with a price equal to the closing
price on the last day of the month and the consultant agreed to
advise the Company on policies and procedures, performance metrics
and reporting, operational standards and training of call center
staff. The Company issued the consultant 1,500 shares of restricted
common stock for the month of December 2020. The agreement was
terminated on December 7, 2020, and the parties entered into as a
new consulting agreement, with an annual fee of $110,000 instead of
the 1,500 per month stock compensation. A consultant to Beachfront
is Beth Sikora, the wife of the COO of the Company, Tim Sikora. The
agreement provides that Mrs. Sikora will manage the Consumer
Programs and Call Center operations based on her experience and
background.
On November 16, 2020, the Company acquired 100% of Longroot, which
was in turn owned 57% of Longroot Cayman. Longroot Cayman owned 49%
of the outstanding ordinary shares (with 51% of the Preferred
shares owned by two Thai citizen shareholders) of Longroot
Thailand, provided that Longroot Cayman controls 90% of Longroot
Thailand’s voting shares and therefore effectively controls
Longroot Thailand. Subsequent to this acquisition, the
Company signed a service contract with Atato, an IT provider of
cryptocurrency website maintenance. As of November 30, 2020,
Miss Worapin Tatun, wife of the CEO of Atato and Mr. Pongsabutra
Viraseranee, an employee and developer employed by Atato, both are
minority shareholders of Longroot Thailand with a 25.5% interest of
preferred stock in Longroot Thailand each.
In December 2020 and January 2021, Sabby Management, LLC, which
previously filed a Schedule 13G with the SEC disclosing its
ownership of over 5% of our outstanding shares of common stock,
exercised warrants to purchase 125,000 shares of our common stock
with an exercise price of $2.00 per share, paid the aggregate
$250,000 exercise price for such shares, and was issued 125,000
shares of common stock, which were covered under a registration
statement filed under the Securities Act. Sabby is no longer a
greater than 5% shareholder of the Company.
On March 17, 2021, the Company entered into a master development
and license agreement with HotPlay Enterprises Limited (“HPE”) to
license software frameworks “HotNow Platform” from HPE and to
engage HPE, using the HotNow Platform as the foundation, to develop
for the Company assets and extra features required for the
Company’s travel platform. On or about May 21, 2021, the Company
and HPE expanded the agreement through additional statements of
work for a total investment of approximately $2.0 million.
On April 7, 2021, each of Mr. Pasquale “Pat” LaVecchia, Mr. Doug
Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and
Ms. Alexandra C. Zubko, each then members of the Board, provided
letters of resignation to the Company, resigning as directors (and
from any other positions they hold with the Company), with such
resignations effective automatically as of the closing of the
HotPlay Exchange Agreement.
Such resignations were solely in connection with the required terms
and conditions of the HotPlay Exchange Agreement, which requires
that the Board at the closing thereof increase to nine members,
with four appointed by HotPlay, two appointed by NextPlay (then
known as Monaker), and three appointed mutually by NextPlay (then
known as Monaker) and HotPlay.
Also on April 7, 2021, the Board ratified the current compensation
payable to members of the Board, which provides that each
non-executive member of the Board be paid (a) compensation of
20,000 shares per year; (b) compensation of 5,000 shares per year,
if they are the chairperson of any committee of the Board; and (c)
compensation of 10,000 shares per year, to the Chairman of the
Board (collectively, the “Board Compensation Terms”), except that
all shares due to the Directors serving as of March 1, 2021, for
the fiscal year ending February 28, 2022, were agreed to be issued
up front and to be fully-vested/earned on the date of grant,
instead of vesting over time, as previously awarded. In total, an
aggregate of 165,000 shares of common stock were issued to the
non-executive directors on April 8, 2021 for compensation for
fiscal 2022 (such shares, the “Fiscal 2022 Board Compensation
Shares”). The Fiscal 2022 Board Compensation Shares were issued
under the Company’s Amended and Restated 2017 Equity Incentive Plan
(the “2017 Plan”).
On April 7, 2021, the Company entered into a Lock-Up Agreement with
each of the non-executive members of the Board. Pursuant to the
Lock-Up Agreements, each non-executive director agreed not to
transfer, sell, pledge or assign any of their applicable Fiscal
2022 Board Compensation Shares until March 1, 2022.
On April 7, 2021, the Board, consistent with the employment
agreement of Mr. William Kerby, then the sole Chief Executive
Officer of the Company, which provides for Mr. Kerby to receive a
base salary of $400,000 per year, and an annual bonus payable at
the discretion of the board of directors, of up to 100% of his base
salary (50% based on meeting short term goals and 50% based on
meeting long-term goals), and other bonuses which may be granted
from time to time in the discretion of the board of directors,
agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of
$400,000, which was payable in cash or shares of common stock, at
Mr. Kerby’s option, under the Plan, with a conversion price of
$3.02 per share, the closing sales price of the Company’s common
stock on the date the Board approved such bonus.
On March 31, 2021, HotPlay Thailand entered into an asset purchase
agreement with HotNow, a related party, which is also under the
same common control of HotPlay Thailand, to purchase some of the
assets, all software used in the business including all rights
under licenses and other agreements and employees with the
aggregate price of 19,500,000 Thai Baht (inclusive of 7% value
added tax (VAT)) (approximately $624,000 US). On April 30, 2021,
HotPlay Thailand made an advanced payment to HotNow in the amount
of 5,000,000 Thai Baht (approximately $149,533 US). On June 7,
2021, HotPlay Thailand paid the remaining cost of the asset
purchase to HotNow in the amount of 14,500,000 Thai Baht
(approximately $474,467 US) pursuant to the terms of the asset
purchase agreement.
On March 24 2021, the Company entered into a short-term loan with
Magnolia Quality Development Corporation Limited for
$480,000 (15,000,000 Thai Baht) with an accrued interest
rate of 9% per annum, which is payable on demand and
unsecured.
During June and July 2020, the Company entered into a short-term
loan with Tree Roots Entertainment Group Company Limited (“TREG”)
for $543,000 (17,000,000 Thai Baht) with an accrued
interest rate of 9.7% per annum, which was payable on demand
and unsecured. On May 31, 2021, HP Thailand
repaid 7,000,000 Thai Baht (approximately $223,000) in
connection with the short-term loan from TREG.
Next Bank International currently holds a $705,000 loan that was
purchased in 2020 at a discounted purchase price of $647,776, when
the Bank was not partially or wholly owned by the Company. The
borrower is an entity affiliated with a current member of the
Bank’s Board of Directors. The Loan bears interest at an annual
rate of 10%.
On June 9, 2021, GLM Consulting Ltd (the “Consultant”), of which
Andrew Greaves, the Company’s Chief Operating Officer, serves as
the sole officer and director, entered into a Consulting Agreement
with the Company to assist the Company in growing a connected
subscriber base and ecosystem across all devices: Digital TV, Set
Top Box, Streaming Devices, PC, Laptop, Tablet and Smartphones, by
providing a range of operational expertise. The term of the
agreement started on July 6, 2021 and is effective until June 30,
2022, provided that the agreement may be terminated at any time, by
either party, with two weeks written prior notice. The Company
agreed to pay the Consultant a daily consulting fee of $1,000, for
each day of service up to a maximum amount of 20 days per month
unless previously agreed in writing with the Company. Each day of
service shall include a minimum of 8 hours. The Consulting
Agreement included confidentiality obligations of the parties and
customary work for hire language.
On August 19, 2021, the Company entered into an Intellectual
Property Purchase Agreements with Fighter Base Publishing Inc.
(“Fighter Base”) and Inc. (“Token IQ,” and together with Fighter
Base, the “IP Sellers”), dated as of the same date (each an “IPP
Agreement”, and together the “IPP Agreements”). Pursuant to the IPP
Agreements, the Company agreed to acquire certain intellectual
property owned by Fighter Base (relating to the games industry) and
by Token IQ (relating to the distributed ledger industry), both of
which entities are owned and controlled by Mark Vange, the Chief
Technology Officer of the Company.
Pursuant to the Fighter Base IPP Agreement, the intellectual
property to be acquired thereunder has a mutually agreed upon value
of $5 million, which will be paid by the Company by way of the
issuance to Fighter Base of 1,666,667 restricted shares of Company
common stock (valued at $3 per share of common stock).
Pursuant to the Token IQ IPP Agreement, the intellectual property
to be acquired thereunder has a mutually agreed upon value of $5
million, which will be paid by the Company by way of the issuance
to Fighter Base of 1,250,000 restricted shares of Company common
stock (valued at $4 per share of common stock).
Pursuant to the IPP Agreements, in the event that the shares of
Company common stock issued in connection with the foregoing
transactions are still restricted six months after closing of such
transactions, Fighter Base and Token IQ will have piggyback
registration rights with respect to such shares.
The Token IQ IPP Agreement includes the right for Token IQ to
license the intellectual property purchased thereunder to third
parties, with the approval of the Company, which shall not be
unreasonable withheld, provided that any licenses are
non-transferable, non-sublicensable and non-exclusive, and that the
licenses will not compete with the Company. Any consideration
received by Token IQ from such licenses will be split 50/50 between
the Company and Token IQ.
The closing of the transactions contemplated by the IPP Agreements
were subject to customary closing conditions, which include, due to
Mr. Vange’s status as an officer of the Company, the approval of
the Company’s shareholders of the transactions contemplated by the
IPP Agreements and the issuance of shares of Company common stock
thereunder. The Company held a meeting of its stockholders set for
January 28, 2022, at which meeting the Company’s stockholders
approved the Fighter Base and Token IQ transactions.
On August 15, 2019, the Company entered into an Intellectual
Property Purchase Agreement with IDS Inc. (“IDS” and the “IP
Purchase Agreement”). Pursuant to the agreement, the Company
purchased certain proprietary technology from IDS for the
reservation and booking of air travel, hotel accommodations, car
rentals, and ancillary products, services, and amenities,
integration of the same with the providers of such products and
services, associated functions, including website addresses,
patents, trademarks, copyrights and trade secrets relating thereto,
and all goodwill associated therewith (collectively, the “IP
Assets”). In consideration for the purchase, the Company issued IDS
1,968,000 shares of restricted common stock (the “IDS Shares”)
valued at $2.50 per share, or $4,920,000 in aggregate.
On April 27, 2020, the Company filed a verified complaint for
injunctive relief against IDS and TD Assets Holding, LLC (“TD
Asset”), Navarro McKown, Aaron McKown and Ari Daniels (“Daniels”),
which parties are affiliated with IDS, in the Circuit Court of the
Seventeenth Judicial Circuit in and for Broward County, Florida
(Case No. CACE-20-007088). Pursuant to the complaint, the Company
alleged causes of action against the defendants, including IDS,
based on among other things, fraud, conspiracy to commit fraud,
aiding and abetting fraud, rescission, and breach of contract, and
sought a temporary and permanent injunction against the defendants,
requiring such persons to return the 1,968,000 IDS Shares issued
pursuant to the terms of the IP Purchase Agreement and preventing
such persons from selling or transferring any IDS Shares, sought
damages from the defendants, rescission of the IP Purchase
Agreement, attorneys fees and other amounts. The defendants
subsequently filed various counterclaims against the Company.
The complaint was filed because of IDS’ failure to deliver the IP
Assets, certain other actions of IDS and the other of the
defendants which the Company alleged constituted fraud. The Company
sought to unwind the IP Purchase Agreement and sought damages for
the Company due to IDS’ and the other defendants’ breaches
thereunder. IDS, through its counsel, sent a letter threatening to
bring a shareholders’ derivative action and/or direct suit against
the Company. In response to such letter, the board of directors
empowered the governance committee to conduct an investigation into
the claims. The results of the investigation, conducted by several
law firms, were presented to the Board and the Board concluded that
no fraudulent activities occurred. The investigation concluded in
October 2020.
On April 29, 2020, the Company filed a Verified Motion for
Temporary Injunction (the “Injunction Motion”). Defendants IDS, TD
Assets, and Ari Daniels filed an answer, affirmative defenses, and
counterclaims (the “Answer and Counterclaim”). The Answer and
Counterclaim included alleged breach of contract and tort claims
against the Company. On September 17, 2020, the Company moved to
strike the affirmative defenses and dismiss the counterclaims. On
October 15, 2020, defendants IDS, TD Assets, and Ari Daniels filed
an amended Answer and Counterclaim, including alleged breach of
contract, tort, and federal securities claims against the Company,
Mr. William Kerby, our sole Chief Executive Officer and an employee
of the Company at that time.
On July 27, 2020, the Company entered into a confidential
settlement agreement with certain of the defendants in the IDS
matter, Navarro Hernandez, P.L., Aaron M. McKown, and Jeffery S.
Bailey. The settlement provided for mutual releases of the parties
and amounts payable from such parties to the Company in four
tranches, in consideration for such settlement, of which all such
payments have been timely paid pursuant to the terms of the
settlement.
The remaining parties to the litigation subsequently attempted to
mediate their pursuant to a court ordered mediation in February
2021.
Effective on May 18, 2021, the Company, IDS, TD Asset and Ari
Daniels, the principal of IDS, entered into an Amendment to
Intellectual Property Purchase Agreement (the “IP Purchase
Amendment”). Pursuant to the IP Purchase Agreement, the parties
amended the IP Purchase Agreement, with the Company agreeing to
make a payment to IDS in the amount of $2,850,000 (the “Payment”),
payable by way of an initial payment of $500,000, which has been
paid to date, and twelve monthly payments of approximately $195,833
(collectively, the “Required Payments”), with such monthly payments
beginning 30 days after the initial payment, which is due seven
days after the date of the IP Purchase Amendment. Such monthly
payments may be pre-paid at any time without penalty. At the
Company’s option, any portion of the amount due may be paid to IDS
by a party separate from the Company (either a related party of the
Company or a third-party) (a “Paying Party”), for the benefit of
Monaker, which shall be treated for all purposes as a payment by
the Company. As consideration for such Paying Party making such
payment on behalf of the Company, IDS agreed to transfer the Paying
Party a number of the IDS Shares equal to the amount of the cash
payment(s) made by a Paying Party multiplied by 0.6888 as to the
first $500,000 payment (which payment has been made, but which
shares have not been transferred to the Company to date), and 0.691
as to the monthly payments (as applicable, the “Applicable Portion”
of the IDS Shares).
In the event the Company fails to make any payment timely, and the
Company does not cure such default within seven days of written
notice of default being provided by IDS, IDS is entitled to entry
of a default judgment against the Company in the amount of the
differential, if any, between the realized value of the IDS Shares
upon the future sale thereof in the open market by IDS, and the
unpaid amount of any payment due. In the event of any such default,
IDS will be entitled to attorneys’ fees incurred to obtain said
judgment.
Upon each payment of amounts due to IDS pursuant to the terms of
the IP Agreement Amendment as discussed above by the Company
(instead of a Paying Party), IDS agreed to transfer the portion of
the IDS Shares equal to the Applicable Portion, to the Company.
Until such time as the IDS Shares are no longer held by IDS, IDS
agreed not to transfer or encumber any of such shares, except
pursuant to the terms of the IP Purchase Amendment.
IDS also agreed to transfer certain unbranded travel videos back to
the Company which were previously purchased by IDS from the
Company, pursuant to the IP Purchase Agreement.
A further requirement of the IP Purchase Amendment was that IDS
enter into a Shareholder Voting Representation Agreement with
William Kerby, our Chief Executive Officer and director (the
“Shareholder Voting Agreement”), which was entered into effective
on May 18, 2021. Pursuant to the Shareholder Voting Agreement, IDS
provided Mr. Kerby the right to, and an irrevocable proxy to, vote
all of the IDS Shares held by IDS at any meeting of stockholders of
the Company and/or via any written consent of stockholders of the
Company. The Shareholder Voting Agreement remains in place until
the earlier of the fifth anniversary of the Shareholder Voting
Agreement; the disposition of the IDS Shares pursuant to the IP
Purchase Amendment; a change of control of the Company resulting in
persons prior to such transaction obtaining more than 50% voting
control of the Company following such transaction; the sale of all
or substantially all of the assets of the Company; or termination
of the agreement by Mr. Kerby. Mr. Kerby may also assign his rights
under the agreement to another party and/or the Company may assign
Mr. Kerby’s rights under the agreement if Mr. Kerby is unable to
make such assignment due to his death or disability. Mr. Kerby was
provided the voting rights as the shareholder representative of,
and for the benefit of, the Company.
Also effective on May 18, 2021, the Company, IDS, TD Asset and Ari
Daniels, entered into a Confidential Settlement Agreement and
Mutual Release, whereby (a) we provided a general release to IDS,
TD Asset and Mr. Daniels, and (b) IDS, TD Asset and Mr. Daniel
provided a general release to us; the parties agreed to file a
Joint Notice of Voluntary Dismissal to dismiss the pending lawsuit
discussed above; and the parties agreed that a prior Web Based
Booking Engine Development Agreement dated October 24, 2017, was
terminated.
Pursuant to the IP Purchase Amendment, on May 19, 2021, the Company
made the initial payment of $500,000. Thereafter, the first 344,400
shares of common stock repurchased by the Company were returned to
treasury and cancelled.
On September 27, 2021, the Court entered the Agreed Order. The
Court ordered that:
|
(i) |
the Company resume the monthly
payment on or before September 28, 2021 (which payment has not been
made due to failure of IDS to provide required documents); |
|
(ii) |
$24,583.33 shall be paid monthly to
one of IDS’ counsel and the balance of each payment shall be paid
to the IDS Defendants; |
|
(iii) |
$20,000 of the 12 monthly payments
shall be withheld pending further order of the court; and |
|
(iv) |
NextPlay was awarded its fees and
costs associated with the filing of the Motion. |
As of February 24, 2022, IDS still has not provided any of the
necessary documents in order to make the stock transfers.
Review and Approval
of Related Party Transactions
The Audit Committee of the Board is tasked with reviewing and
approving any issues relating to conflicts of interests and all
related party transactions of the Company (“Related Party
Transactions”). The Audit Committee, in undertaking such review and
approval, will analyze the following factors, in addition to any
other factors the Audit Committee deems appropriate, in determining
whether to approve a Related Party Transaction: (i) the
fairness of the terms for the Company (including fairness from a
financial point of view); (ii) the materiality of the
transaction; (iii) bids/terms for such transaction from
unrelated parties; (iv) the structure of the transaction;
(v) the policies, rules and regulations of the U.S. federal
and state securities laws; (vi) the policies of the Committee;
and (vii) interests of each related party in the
transaction.
The Audit Committee will only approve a Related Party Transaction
if the Audit Committee determines that the terms of the Related
Party Transaction are beneficial and fair (including fair from a
financial point of view) to the Company and are lawful under
the laws of the United States. In the event multiple members of the
Audit Committee are deemed a related party, the Related Party
Transaction will be considered by the disinterested members of the
board of directors in place of the Audit Committee.
In addition, our Code of Ethics, which is applicable to all of our
employees, officers and directors, requires that all employees,
officers and directors avoid any conflict, or the appearance of a
conflict, between an individual’s personal interests and our
interests.
BOARD MATTERS AND CORPORATE
GOVERNANCE
Board
Composition
Our Board currently consists of the following ten directors: (i) J.
Todd Bonner, (ii) Nithinan Boonyawattanapisut, (iii) William Kerby,
(iv) Donald P. Monaco, (v) Athid Nanthawaroon, (vi) Carmen Diges,
(vii) Komson Kaewkham, (viii) Yoshihiro Obata, (ix) Farooq Moosa,
and (x) Edward Terrance Gardner, Jr. See the section of this Proxy
Statement entitled “Information Regarding Directors” included in
Proposal 1, above, for additional information regarding each of our
current directors.
As of February 28, 2021, the last day or our 2021 fiscal year, our
Board consisted of the following eight directors: (i) William
Kerby, (ii) Pasquale “Pat” LaVecchia, (iii) Donald P. Monaco, (iv)
Doug Checkeris, (v) Simon Orange, (vi) Rupert Duchesne, (vii)
Robert “Jamie” Mendola, Jr., and (viii) Alexandra C. Zubko. On
April 7, 2021, in connection with the Closing of the Company’s
acquisition of HotPlay, each of Messrs. LaVecchia, Checkeris,
Duchesne, and Mendola, Jr. and Ms. Alexandra C. Zubko, resigned as
directors (and from any other positions they hold with the
Company), with such resignations effective automatically as of the
closing of the HotPlay Exchange Agreement. Effective as of closing
of the HotPlay Exchange Agreement, and concurrently with the
foregoing resignations, each of Ms. Boonyawattanapisut, Ms. Stacey
Riddell, and Messrs. Bonner, Nanthawaroon, Kaewkham, Obata were
appointed as directors of the Company. Since that date, there have
been various other changes to the composition of our Board.
Certain disclosure that follows regarding our Board, including
corporate governance related disclosures, refers to our Board and
corporate governance policies and procedures in place as of
February 28, 2021, which information may no longer reflect our
current practices, procedures and/or status. You should read the
below disclosures carefully, paying attention to the relevant
period for which the disclosures are provided.
Board and
Stockholder Meetings and Attendance
The Board has responsibility for establishing broad corporate
policies and reviewing our overall performance rather than
day-to-day operations. The primary responsibility of the Board is
to oversee the management of the Company and, in doing so, serve
the best interests of the Company and its stockholders. The entire
Board selects, evaluates, and provides for the succession of
executive officers and, subject to stockholder election, directors.
It reviews and approves corporate objectives and strategies, and
evaluates significant policies and proposed major commitments of
corporate resources. The Board also participates in decisions that
have a potential major economic impact on the Company. Management
keeps the directors informed of Company activity through regular
communication, including written reports and presentations at Board
and committee meetings.
Directors are elected annually and hold office until the Company’s
next annual meeting of stockholders or until their successors are
duly elected and qualified, subject to prior death, resignation, or
removal.
During the fiscal year ended on February 28, 2021, the Board held
11 meetings, and took various other actions via unanimous written
consent of the Board and the various committees described below.
All directors attended at least 75% of the Board meetings and
committee meetings relating to the committees on which each
director served during the 2021 fiscal year.
The Company held a virtual 2021 Annual Meeting on
February 24, 2021, which was attended by Donald Monaco,
William Kerby, Rupert Duchesne, Simon Orange and Alexandra. Zubko,
all of whom were directors of the Company as of the date of our
2021 Annual Meeting. Each director of the Company has historically
been expected to be present at annual meetings of stockholders,
absent exigent circumstances that prevent their attendance;
however, due to COVID-19, some members of the board of directors
were unable to attend the 2021 Annual Meeting. Where a director is
unable to attend an annual meeting in person but is able to do so
by electronic conferencing, the Company will arrange for the
director’s participation by means where the director can hear, and
be heard, by those present at the meeting.
Board Committees and
Director Independence
Committees of the Board
We currently maintain an Audit Committee, Compensation Committee,
Nominating and Corporate Governance Committee, Litigation Committee
and Risk Assessment Committee, which have the committee members
described below. We have also established a disclosure committee,
comprised of senior executives, directors and employees who are
actively involved in the disclosure process, to specify, coordinate
and oversee the public disclosure of information regarding the
Company, other than through periodic and current report filings
with the SEC.
Board Committee Membership
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Independent |
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Audit
Committee |
|
Compensation
Committee
|
|
Nominating and
Corporate Governance
Committee
|
|
Litigation
Committee |
|
Risk Assessment
Committee |
| J. Todd Bonner(1) |
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|
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| Nithinan Boonyawattanapisut |
|
|
|
|
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|
|
|
|
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| William Kerby |
|
|
|
|
|
|
|
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|
|
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| Donald P. Monaco |
X |
|
|
|
M |
|
|
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|
M |
| Athid Nanthawaroon |
|
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|
|
|
|
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| Carmen Diges |
X |
|
M |
|
|
|
M |
|
C |
|
C |
| Komson Kaewkham |
X |
|
M |
|
M |
|
C |
|
M |
|
M |
| Yoshihiro Obata |
X |
|
|
|
C |
|
M |
|
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|
M |
| Farooq Moosa |
X |
|
M |
|
|
|
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|
|
|
M |
| Edward Terrance Gardner, Jr. |
X |
|
C |
|
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|
M |
(1) – Chairman of board of directors.
C – Chairman of Committee.
M – Member.
Each of these committees has the duties described below and
operates under a charter that has been approved by our
Board.
Audit Committee
The Audit Committee, which is comprised exclusively of independent
directors, has been established by the Board to oversee our
accounting and financial reporting processes and the audits of our
financial statements.
The Audit Committee has the responsibility for reviewing the
disclosures made by the Chief Executive Officer and the Chief
Financial Officer in connection with their required certifications
accompanying the Company’s periodic reports to be filed with the
SEC; reviewing and discussing the Company’s quarterly financial
results and related press releases, if any, with management and the
independent auditors prior to the release of such information to
the public; reviewing with the management the proposed scope and
plan for conducting internal audits of Company operations and
obtaining reports of significant findings and recommendations,
together with management’s corrective action plans; seeking to
ensure the corporate audit function has sufficient authority,
support and access to Company personnel, facilities and records to
carry out its work without restrictions or limitations; reviewing
the corporate audit function of the Company, including its charter,
plans, activities, staffing and organizational structure; reviewing
progress of the internal audit program, key findings and
management’s action plans to address findings; periodically
reviewing the Company’s policies with respect to legal compliance,
conflicts of interest and ethical conduct; seeking to ensure the
adequacy of procedures for the receipt, retention and treatment of
complaints regarding accounting, internal accounting control or
auditing matters, including the confidential submission of
complaints by employees regarding such matters; and recommending to
the Board any changes in ethics or compliance policies that the
committee deems appropriate.
The Board has selected the members of the Audit Committee based on
the Board’s determination that the members are financially literate
(as required by NASDAQ rules) and qualified to monitor the
performance of management and the independent auditors and to
monitor our disclosures so that our disclosures fairly present our
business, financial condition and results of operations.
The Board has also determined that each of Messrs. Gardner and
Moosa and Ms. Diges qualify as “audit committee financial experts”
(as defined in the SEC rules) because each of them has the
following attributes: (i) an understanding of generally
accepted accounting principles in the United States of America
(“GAAP”) and financial statements; (ii) the ability to
assess the general application of such principles in connection
with accounting for estimates, accruals and reserves;
(iii) experience analyzing and evaluating financial statements
that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by our
financial statements; (iv) an understanding of internal
control over financial reporting; and (v) an understanding of
audit committee functions. Each of Messrs. Gardner and Moosa and
Ms. Diges has acquired these attributes by means of having held
various positions that provided relevant experience, as described
in their biographical information disclosures, above.
The Audit Committee has the sole authority, at its discretion and
at our expense, to retain, compensate, evaluate and terminate our
independent auditors and to review, as it deems appropriate, the
scope of our annual audits, our accounting policies and reporting
practices, our system of internal controls, our compliance with
policies regarding business conduct and other matters. In addition,
the Audit Committee has the authority, at its discretion and at our
expense, to retain special legal, accounting or other advisors to
advise the Audit Committee.
During the fiscal year ended February 28, 2021, the Audit Committee
held four meetings.
The Audit Committee operates pursuant to a written charter that is
available on the Company’s website at:
https://www.nextplaytechnologies.com/investors/governance.
Compensation Committee
The Compensation Committee, which is comprised exclusively of
independent directors, is responsible for the administration of our
stock compensation plans, approval, review and evaluation of the
compensation arrangements for our executive officers and directors
and oversees and advises the Board on the adoption of policies that
govern the Company’s compensation and benefit programs. In
addition, the Compensation Committee has the authority, at its
discretion and at our expense, to retain special legal, accounting
or other advisors to advise the Compensation Committee.
During the fiscal year ended February 28, 2021, the Compensation
Committee held three meetings, and took various other actions via
consent to actions without meetings.
The Compensation Committee operates pursuant to a written charter
that is available on the Company’s website at:
https://www.nextplaytechnologies.com/investors/governance.
Nominating and Governance Committee
The Nominating and Governance Committee, which is comprised
exclusively of independent directors, is responsible for
identifying prospective qualified candidates to fill vacancies on
the Board, recommending director nominees (including
chairpersons) for each of our committees, developing and
recommending appropriate corporate governance guidelines and
overseeing the self-evaluation of the Board.
In considering individual director nominees and Board committee
appointments, our Nominating and Governance Committee seeks to
achieve a balance of knowledge, experience and capability on the
Board and Board committees and to identify individuals who can
effectively assist the Company in achieving our short-term and
long-term goals, protecting our stockholders’ interests and
creating and enhancing value for our stockholders. In so doing, the
Nominating and Governance Committee considers a person’s diversity
attributes (e.g., professional experiences, skills, background,
race and gender) as a whole and does not necessarily attribute
any greater weight to one attribute. Moreover, diversity in
professional experience, skills and background, and diversity in
race and gender, are just a few of the attributes that the
Nominating and Governance Committee takes into account. In
evaluating prospective candidates, the Nominating and Governance
Committee also considers whether the individual has personal and
professional integrity, good business judgment and relevant
experience and skills, and whether such individual is willing and
able to commit the time necessary for Board and Board committee
service.
While there are no specific minimum requirements that the
Nominating and Governance Committee believes must be met by a
prospective director nominee, the Nominating and Governance
Committee does believe that director nominees should possess
personal and professional integrity, have good business judgment,
have relevant experience and skills, and be willing and able to
commit the necessary time for Board and Board committee service.
The Company does not have a formal diversity policy. However, the
Nominating and Governance Committee evaluates each individual in
the context of the Board as a whole, with the objective of
recommending individuals that can best perpetuate the success of
our business and represent stockholder interests through the
exercise of sound business judgment using their diversity of
experience in various areas. We believe our current directors
possess diverse professional experiences, skills and backgrounds,
in addition to (among other characteristics) high standards of
personal and professional ethics, proven records of success in
their respective fields and valuable knowledge of our business and
our industry.
The Nominating and Governance Committee uses a variety of methods
for identifying and evaluating director nominees. The Nominating
and Governance Committee also regularly assesses the appropriate
size of the Board and whether any vacancies on the Board are
expected due to retirement or other circumstances. In addition, the
Nominating and Governance Committee considers, from time to time,
various potential candidates for directorships. Candidates may come
to the attention of the Nominating and Governance Committee through
current Board members, professional search firms, stockholders or
other persons. These candidates may be evaluated at regular or
special meetings of the Nominating and Governance Committee and may
be considered at any point during the year.
The Nominating and Governance Committee evaluates director nominees
at regular or special committee meetings pursuant to the criteria
described above and reviews qualified director nominees with the
Board. The Nominating and Governance Committee selects nominees
that best suit the Board’s current needs and recommends one or more
of such individuals for election to the Board.
The Nominating and Governance Committee will consider candidates
recommended by stockholders, provided the names of such persons,
accompanied by relevant biographical information, and other
information as required by the Company’s Bylaws, are properly
submitted in writing to the Secretary of the Company in accordance
with the Bylaws and applicable law. The Secretary will send
properly submitted stockholder recommendations to the Nominating
and Governance Committee. Individuals recommended by stockholders
in accordance with these procedures will receive the same
consideration received by individuals identified to the Nominating
and Governance Committee through other means. The Nominating and
Governance Committee also may, in its discretion, consider
candidates otherwise recommended by stockholders without
accompanying biographical information, if submitted in writing to
the Secretary.
During the fiscal year ended February 28, 2021, the Nominating and
Governance Committee held ten meetings and took various other
actions via consent to actions without meetings.
The Nominating and Governance Committee operates pursuant to a
written charter that is available on the Company’s website at:
https://www.nextplaytechnologies.com/investors/governance.
Litigation Committee
The Litigation Committee, which is currently comprised exclusively
of independent directors, is responsible for overseeing any
significant arbitration, litigation or other legal process
involving a dispute between the Company and a third party
(“Disputes”), and assist the Board in fulfilling its oversight
responsibilities with respect to such Disputes. In addition, the
Litigation Committee has sole authority to retain and terminate
outside counsel, or other experts or consultants, as it deems
appropriate in connection with any litigation or potential
litigation matters, including sole authority to approve the fees
and other retention terms for such persons. The Litigation
Committee operates pursuant to a written charter.
Risk Assessment Committee
The Risk Assessment Committee, which is comprised exclusively of
independent directors, has been established by the Board to oversee
significant internal complaints and investigations into management,
and to assist the Board in fulfilling its oversight responsibility
with respect to such complaints. The Risk Assessment Committee’s
responsibilities include, without limitation, consulting with
counsel to review, investigate, assess, and manage any relevant
complaints. In addition, the Risk Assessment Committee has sole
authority to retain and terminate outside counsel, or other experts
or consultants, as it deems appropriate in connection with any
matters or potential matters being considered by the committee,
including sole authority to approve the fees and other retention
terms for such persons. The Risk Assessment Committee operates
pursuant to a written charter.
Director Independence
In accordance with NASDAQ requirements, our Board is comprised of a
majority of independent directors and the Nominating and Corporate
Governance, Compensation and Audit Committees are all comprised
entirely of independent directors.
The Board annually determines the independence of each director and
nominee for election as a director. The Board makes these
determinations in accordance with The NASDAQ Capital Market’s
(“NASDAQ’s”) listing standards
for the independence of directors and the SEC’s rules.
In assessing director independence, the Board considers, among
other matters, the nature and extent of any business relationships,
including transactions conducted, between the Company and each
director and between the Company and any organization for which one
of our directors is a director or executive officer or with which
one of our directors is otherwise affiliated.
The Board has affirmatively determined that each of Messrs. Monaco,
Kaewkham, Obata, Moosa and Gardner and Ms. Diges are independent
under applicable Nasdaq rules.
Report of the Audit
Committee
The following report of the
Audit Committee does not constitute soliciting materials and should
not be deemed filed or incorporated by reference into any other
Company filing under the Securities Act, or the Exchange Act,
except to the extent we specifically incorporate such report by
reference therein.
AUDIT COMMITTEE
REPORT
The Audit Committee represents and assists the board of directors
in fulfilling its responsibilities for general oversight of the
integrity of the Company’s financial statements, the Company’s
compliance with legal and regulatory requirements, the independent
registered public accounting firm’s qualifications and
independence, the performance of the Company’s internal audit
function and independent registered public accounting firm, and
risk assessment and risk management. The Audit Committee manages
the Company’s relationship with its independent registered public
accounting firm (which reports directly to the Audit Committee).
The Audit Committee has the authority to obtain advice and
assistance from outside legal, accounting or other advisors as the
Audit Committee deems necessary to carry out its duties and
receives appropriate funding, as determined by the Audit Committee,
from the Company for such advice and assistance.
In connection with the audited financial statements of the Company
for the year ended February 28, 2021, the Audit Committee of the
Board of Directors of the Company (i) reviewed and discussed
the audited financial statements with the Company’s management;
(ii) discussed with the Company’s independent auditors the
applicable requirements of the Public Company Accounting Oversight
Board (“PCAOB”) and the Securities and Exchange Commission;
(iii) received the written disclosures and the letter from the
independent auditors required by the applicable requirements of the
PCAOB regarding the independent auditors’ communications with the
Audit Committee concerning independence; (iv) discussed with
the independent auditors the independent auditors’ independence;
and (v) considered whether the provision of non-audit services
by the Company’s principal auditors is compatible with maintaining
auditor independence.
Based upon these reviews and discussions, the Audit Committee
recommended to the board of directors, and the board of directors
approved, that the audited financial statements for the year ended
February 28, 2021 be included in the Company’s Annual Report on
Form 10-K for the year ended February 28, 2021, for filing with the
Securities and Exchange Commission.
The undersigned members of the Audit Committee have submitted this
Report to the board of directors.
|
|
Audit Committee |
| |
|
| |
/s/
Pasquale “Pat” LaVecchia (Chairman) |
| |
/s/ Rupert Duchesne |
| |
/s Alexandra C. Zubko |
Board Leadership
Structure
Our Board has the responsibility for selecting our appropriate
leadership structure. In making leadership structure
determinations, the Board considers many factors, including the
specific needs of our business and what is in the best interests of
our stockholders. Our current leadership structure is comprised of
a separate Chairman of the Board and two Co-Chief Executive
Officers. Mr. Bonner currently serves as Chairman of the Board and
Ms. Boonyawattanapisut and Mr. Kerby each serve as Co-Chief
Executive Officers of the Company. The Board does not have a policy
as to whether the Chairman should be an independent director, an
affiliated director, or a member of management. Our Board believes
that the Company’s current leadership structure is appropriate
because it effectively allocates authority, responsibility, and
oversight between management (the Company’s Co-Chief Executive
Officers, Ms. Boonyawattanapisut and Mr. Kerby) and the
members of our Board. It does this by giving primary responsibility
for the operational leadership and strategic direction of the
Company to its Co-Chief Executive Officers, while enabling our
Chairman to facilitate our Board’s oversight of management, promote
communication between management and our Board, and support our
Board’s consideration of key governance matters. The Board believes
that its programs for overseeing risk, as described below, would be
effective under a variety of leadership frameworks and therefore do
not materially affect its choice of structure.
Board’s Role in Risk
Management
The Board has responsibility for the oversight of the Company’s
risk management processes, while our management (or through the
committees of the Board) is responsible for day-to-day management
of risk. Effective risk oversight is an important priority of the
Board. Because risks are considered in virtually every business
decision, the Board regularly discusses with management our major
risk exposures, their potential impact on our business and the
steps we take to manage them throughout the year, both generally or
in connection with specific proposed actions. The Board’s approach
to risk oversight includes understanding the critical risks in the
Company’s business and strategy, evaluating the Company’s risk
management processes, allocating responsibilities for risk
oversight, and fostering an appropriate culture of integrity and
compliance with legal responsibilities. The directors exercise
direct oversight of strategic risks to the Company.
The Audit Committee reviews information regarding liquidity and
operations, and oversees our management of financial risks.
Periodically, the Audit Committee reviews our policies with respect
to risk assessment, risk management, loss prevention and regulatory
compliance. Oversight by the Audit Committee includes direct
communication with our external auditors, and discussions with
management regarding significant risk exposures and the actions
management has taken to limit, monitor or control such exposures.
The Compensation Committee is responsible for assessing whether any
of our compensation policies or programs has the potential to
encourage excessive risk-taking. The Nominating and Governance
Committee reviews compliance with external and internal compliance
with policies, procedures and practices consistent with our charter
and bylaws.
While each of our Board committees is responsible for evaluating
certain risks and overseeing the management of such risks, the
entire Board is regularly informed through committee reports and
members of our management team about such risks. Matters of
significant strategic risk are considered by our Board as a
whole.
Communications with
our Board
In connection with all other matters other than the nomination of
members of our Board (as described below), our stockholders and
other interested parties may communicate with members of the Board
by submitting such communications in writing to our Secretary at
1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323,
who, upon receipt of any communication other than one that is
clearly marked “Confidential,” will note the date the
communication was received, open the communication, make a copy of
it for our files and promptly forward the communication to the
director(s) to whom it is addressed. Upon receipt of any
communication that is clearly marked “Confidential,” our Secretary
will not open the communication, but will note the date the
communication was received and promptly forward the communication
to the director(s) to whom it is addressed. If the
correspondence is not addressed to any particular member of the
Board, the communication will be forwarded to a Board member to
bring to the attention of the Board.
Codes of Business
Conduct and Ethics
We maintain a Code of Ethics and Code of Business Conduct, which
are applicable to all of our directors, officers and employees.
These codes set forth ethical standards to which these persons must
adhere and other aspects of accounting, auditing and financial
compliance, as applicable. We undertake to provide a printed copy
of these codes free of charge to any person who requests. Any such
request should be sent to our principal executive offices
attention: Chief Financial Officer.
We intend to disclose any amendments to our Code of Ethics and Code
of Business Conduct and any waivers with respect to our Code of
Ethics and Code of Business Conduct granted to our principal
executive officer, our principal financial officer, or any of our
other employees performing similar functions on our website at
https://www.nextplaytechnologies.com/, within four business days
after the amendment or waiver. In such case, the disclosure
regarding the amendment or waiver will remain available on our
website for at least 12 months after the initial disclosure. There
have been no waivers granted with respect to our Code of Ethics and
Code of Business Conduct to any such officers or employees to
date.
Whistleblower
Protection Policy
On April 18, 2017, the Company adopted a Whistleblower Protection
Policy (“Whistleblower Policy”) that applies to all of its
directors, officers, employees, consultants, contractors and agents
of the Company. The Whistleblower Policy has been reviewed and
approved by the Board. A copy of the Whistleblower Policy is
available on the Company’s website at:
https://www.nextplaytechnologies.com/investors/governance.
Policy Against
Hedging
The Company recognizes that hedging against losses in Company
shares may disturb the alignment between stockholders and
executives that equity awards are intended to build. Accordingly,
the Company has incorporated prohibitions on “short sales” within
its insider trading policy, which applies to directors, officers
and employees.
Conflicts of
Interest
Our directors and officers are not obligated to commit their full
time and attention to our business and, accordingly, they may
encounter a conflict of interest in allocating their time between
our operations and those of other businesses. In the course of
their other business activities, they may become aware of
investment and business opportunities which may be appropriate for
presentation to us as well as other entities to which they owe a
fiduciary duty. As a result, they may have conflicts of interest in
determining to which entity a particular business opportunity
should be presented. They may also in the future become affiliated
with entities that are engaged in business activities similar to
those we intend to conduct.
In general, officers and directors of a corporation are required to
present business opportunities to the corporation if:
|
● |
the
corporation could financially undertake the
opportunity; |
|
● |
the
opportunity is within the corporation’s line of business;
and |
|
● |
it
would be unfair to the corporation and its stockholders not to
bring the opportunity to the attention of the
corporation |
We have adopted a Code of Business Conduct and Ethics, as discussed
in further detail above, that obligates our directors, officers and
employees to disclose potential conflicts of interest and prohibits
those persons from engaging in such transactions without our
consent.
Family
Relationships
Mr. Bonner, Chairman of our Board, is married to Ms.
Boonyawattanapisut, our Co-Chief Executive Officer. Except for the
foregoing relationship between Mr. Bonner and Ms.
Boonyawattanapisut, none of our directors are related by blood,
marriage, or adoption to any other director, executive officer, or
other key employees.
Director
Compensation
The following table sets forth information concerning the total
compensation that we paid or that we accrued on behalf of our
non-executive directors during the fiscal year ended February 28,
2021. The below table only includes those individuals that were
serving as non-executive directors on our Board as of February 28,
2021, and omits all individuals that have been elected to our Board
since that date. Our executive directors do not receive
compensation for their service on the Board separate from the
compensation they receive as an executive officer of the Company,
as described below in the section of this Proxy Statement entitled
“Executive Compensation and Other Information.”
|
Name |
|
Fiscal
Year
|
|
|
Fees
Earned
|
|
|
Stock
Awards*
|
|
|
Option
Awards
|
|
|
All other Compensation |
|
|
Total |
|
| Pasquale “Pat” LaVecchia,
Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
53,563 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
53,563 |
|
| Donald P. Monaco, Chairman |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
64,275 |
|
|
$ |
— |
|
|
$ |
18,000 |
(1) |
|
$ |
82,275 |
|
| Doug Checkeris, Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
53,563 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
53,563 |
|
| Simon Orange, Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
42,850 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
42,850 |
|
| Rupert Duchesne, Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
42,850 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
42,850 |
|
| Robert “Jamie” Mendola, Jr.,
Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
53,563 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
53,563 |
|
| Alexandra C. Zubko, Director |
|
|
2021 |
|
|
$ |
— |
|
|
$ |
42,850 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
42,850 |
|
No director received any Non-Equity Incentive Plan Compensation or
Non-Qualified Deferred Compensation for the period above.
|
* |
The
value of the Stock Awards in the table above was calculated based
on the fair value of such securities calculated in accordance with
Financial Accounting Standards Board Accounting Standards
Codification Topic 718. |
| |
|
|
|
(1) |
Represents amounts paid under the Guaranty
Compensation Agreement described below under “Donald P. Monaco,
Guaranty Compensation Agreement,” which agreement was terminated
automatically upon the repayment of the Company’s debt owed to
National Bank of Commerce (FKA: Republic Bank) in December
2020. |
Director
Compensation Policy
Prior to July 1, 2021, the compensation payable to the Board
consisted solely of equity, and included (a) compensation of 20,000
shares per year, issuable in equal quarterly installments, to each
non-executive member of the Board; (b) compensation of 5,000 shares
per year, issuable in equal quarterly installments, to each
chairperson of each Board committee; and (c) compensation of 10,000
shares per year, issuable in equal quarterly installments, to the
Chairman of the Board, each under the terms of the Company’s 2017
Equity Incentive Plan (collectively, the “Board Compensation
Terms”).
Effective July 1, 2021, we implemented changes to our Board
Compensation Terms. The compensation currently payable to the Board
currently consists of a mix of equity and cash, subject to certain
exceptions (as discussed below), and includes (a) compensation
in the amount of $60,000 per year, payable in equal quarterly
installments, to each non-executive member of the Board;
(b) compensation in the amount of $15,000 per year, payable in
equal quarterly installments, to the chairperson of each committee
of the Board; and (c) compensation in the amount of $30,000
per year, payable in equal quarterly installments, to the chairman
of the Board. The foregoing amounts shall be paid out as follows:
(i) in the event that the company is profitable for the two
quarters prior to any given quarterly payment, then (a) 30% of the
compensation is to paid in cash and (b) 70% of the compensation is
issued in shares of Company common stock, calculated based on the
closing price of the Company’s common stock on the date of the
award; or (ii) in the event that the company is not profitable for
the two quarters prior to any given quarterly payment, then 100% of
the relevant quarterly payment will be issued in shares of Company
common stock, calculated based on the closing price of the
Company’s common stock on the date of the award. All equity issued
to our directors as compensation for their services is issued under
the Company’s equity incentive plans.
Director compensation for the 2022 fiscal year (based on the old
compensation policy) was paid in shares of Company common stock in
April 2021 (for those directors who were members of the Board as of
such date), which shares vest in equal quarterly installments. Our
directors are entitled to receive additional compensation payable
under the new compensation policy for fiscal 2022, which shall be
payable on a pro rata basis starting on July 1, 2021 and shall take
into account the payments already made to them under the old
compensation policy in April 2021.
EXECUTIVE COMPENSATION
AND OTHER INFORMATION
Executive
Officers
The following table sets forth the names, ages, and positions of
our current executive officers. There are no arrangements,
agreements or understandings between non-management security
holders and management under which non-management security holders
may directly or indirectly participate in or influence the
management of our affairs. There are no arrangements or
understandings between any executive officer and any other person
pursuant to which any executive officer was or is to be selected as
an executive officer, as applicable. There currently are no legal
proceedings, and during the past ten years there have been no legal
proceedings that are material to the evaluation of the ability or
integrity of any of our executive officers.
|
Name |
|
Age |
|
Position(s) |
| Nithinan
Boonyawattanapisut |
|
38 |
|
Co-Chief Executive Officer and
Director |
| William Kerby |
|
64 |
|
Co-Chief Executive Officer and
Director |
| Sirapop “Kent”
Taepakdee |
|
59 |
|
Chief
Financial Officer, Treasurer and Secretary |
| Mark Vange |
|
52 |
|
Chief
Technology Officer |
| Tim Sikora |
|
48 |
|
Chief
Operating Officer and the Chief Information Officer |
Below is information regarding each executive officer’s
biographical information, including their principal occupations or
employment for at least the past five years, and the names of other
public companies in which such persons hold or have held
directorships during the past five years.
Nithinan “Jess” Boonyawattanapisut, age 38, Co-Chief Executive
Officer and Director
Ms. Boonyawattanapisut’s biographical information is provided above
under the section of this Proxy Statement entitled “Information
Regarding Directors,” and incorporated herein by reference.
William Kerby, age 64, Co-Chief Executive Officer and
Director
Mr. Kerby’s biographical information is provided above under the
section of this Proxy Statement entitled “Information Regarding
Directors,” and incorporated herein by reference.
Sirapop “Kent” Taepakdee, age 59, Controller, Vice President of
Finance, Chief Financial Officer, Treasurer and Secretary
Mr. Taepakdee has served as the Controller of the Company since
July 2019. On October 9, 2019, the Board appointed Mr. Taepakdee as
the principal financial and accounting officer of the Company. Mr.
Taepakdee has served as the Vice President of Finance, Treasurer,
and Secretary of the Company since February 1, 2020. Also, from
February 1, 2020 to December 14, 2020, Mr. Taepakdee served as the
acting Chief Financial Officer of the Company, being appointed the
Chief Financial Officer of the Company on December 14, 2020. From
February 2012 to January 2018, Mr. Taepakdee served as the
Controller of Inceptra LLC and JTH Holdings LLC, located in Weston,
Florida. Mr. Taepakdee has worked in accounting and finance for
more than 32 years, garnering diverse experiences across several
industries including hospitality, car rental, office product
retail, manufacturer software, government, and an attorney office.
His strong process improvement skills helped many companies
increase productivities and decrease costs. Kent worked closely
with IT teams to implement the Oracle system at Office Depot during
the “Project Simplify” in 2007 – 2009. At Office Depot, Mr.
Taepakdee also led the team of accountants and worked with the
auditors to do the “Fixed Asset Cost Segregation” project, which
saved the company millions. During his employment at Vanguard Car
Rental USA Inc (Alamo and National Car Rental) after the September
11, 2001 (9/11) event, he involved and worked with the recovery
team (appointed by the court) to perform due diligence after the
company filed for bankruptcy, and the company got out of the
bankruptcy in early 2004. During 1997 – 2000, he served as the
Assistant Food & Beverage Cost Controller at the Boca Raton
Resort & Club in Boca Raton, Florida, and led the team to
implement the F&B inventory system (two F&B warehouses).
Mr. Taepakdee also served as the Chief Financial Officer at the
Bangkok Naval Base (Royal Thai Navy) from 1986 to 1996. Mr.
Taepakdee also serves as a member of the Board of Directors of Next
Fintech Holdings Inc (fka: Longroot Inc). Mr. Taepakdee received an
MBA (with a specialization in Finance), from Ramkhamhaeng
University, in Bangkok, Thailand and a BBA in Accounting (First
Class Honors / Valedictorian), from Krirk University, in Bangkok,
Thailand.
Mark Vange, age 52, Chief Technology Officer
Mr. Vange has served as Chief Technology Officer of the Company
since the Company’s acquisition of HotPlay on June 30, 2021, prior
to which he served as Chief Technology Officer of HotPlay Thailand
and HotNow (Thailand) Company Limited, a hyper-local promotion
discovery platform, positions he held since March 2020 and June
2020, respectively. In May 2017, he founded Token IQ Inc., a
technology company that addresses issues in the tokenization space
such as compliance with existing securities laws, cross border
issues, token price volatility, post offering transparency, high
transactional costs, and scalability, where he has served as Chief
Executive Officer since its inception. In May 2016, Mr. Vange
founded Fighter Base Publishing Inc, developer of Fighter base, a
massively-multiplayer combat flight game, where he has served as
Chief Executive Officer since its inception. Mr. Vange is also the
Co-Founder of Tech Round LLC, a company that provides specialty
development services to many of the world’s largest publishers,
which formed in January 2015. In June 2005, Mr. Vange Founded and
served as Executive Vice President of Mobile Post Productions Inc,
a company that enabled video game publishers to enter the mobile
game space at scale. Mobile Post Productions Inc was later acquired
by Electronic Arts Inc in April 2011, and Mr. Vange served as the
Chief Technology Officer of Electronic Arts Interactive from the
date of acquisition until June 2012. To date, Mr. Vange has over
100 patents for technologies that defined industries such as 3D
gaming, massively multiplayer games, data transmission over the
Internet, large-scale data processing, and mobile
communications.
Tim Sikora, age 48, Chief Operating Officer and the Chief
Information Officer
Mr. Sikora joined the Company as Chief Information Officer
(non-executive) in October 2019, and was promoted to Chief
Operating Officer and Chief Information Officer (executive) on
February 1, 2020, in which roles he is responsible for managing all
of the Company’s information technology (“IT”) platforms,
including the software development activities for the Company’s
NextPlay Booking Engine (MBE), a customizable, instant-booking
platform for alternative lodging rentals NextTrip, the Company’s
Travel Management Solution for small to medium-sized business, and
Maupintour, an innovative leader in personalized travel
experiences. Mr. Sikora also leads the Company’s commercial sales
and technical teams. Mr. Sikora served as director of North America
Sales at The Boeing Company, the world’s largest aerospace company,
prior to joining the Company, from May 2013 to October 2019. Prior
to working with Boeing, he managed and led the expansion of two IT
services companies: Peak 10, a leading data center and cloud
services company, where he served as Director Information
Technology Service Delivery from July 2012 to May 2013, and CIBER,
Inc., a global information technology infrastructure services
provider, where he served as Information Technology Infrastructure
Service Delivery Manager from November 2010 to July 2012. Prior to
that, from November 2007 to November 2010, Mr. Sikora served as
director of Information Technology End User Services at US Airways,
Inc. While there, Mr. Sikora led the airline’s integration of IT
end-user platforms following its merger with America West and was
responsible for governing IT resource planning, budgeting, and
operational management for end-user services. Prior to joining US
Airways, Mr. Sikora served as VP of Airline Operations and Chief
Information Officer at Caribbean Sun Airlines Holdings (September
2005 to November 2007), where he directed all IT and airline
resource planning, budgeting and operational initiatives. Prior to
that, Mr. Sikora served as manager of Information technology at DHL
Airways, a $500 million cargo airline where he directed the
Information Technology group, a provider of contract aircraft
services to DHL Worldwide Express. Mr. Sikora has also held several
other software development positions, including at Midwest Express
Airlines. Mr. Sikora also serves as a member of the Board of
Directors of Longroot Cayman. Mr. Sikora received a Bachelor’s of
Science in Business Administration (Magna Cum Laude) and a
Master’s of Science in Leadership, from Embry-Riddle Aeronautical
University.
Summary Executive
Compensation Table
The following table sets forth certain information concerning
compensation earned by or paid to certain persons who we refer to
as our “Named Executive Officers” for services provided for the
fiscal years ended February 28, 2021 and February 29, 2020 (Fiscal
2021 and Fiscal 2020, respectively). Our Named Executive Officers
include persons who (i) served as our principal executive
officer or acted in a similar capacity during Fiscal 2021,
(ii) were serving as our two most highly compensated executive
officers, other than the principal executive officer, whose total
compensation exceeded $100,000 as of February 28, 2021, and
(iii) if applicable, up to two additional individuals for whom
disclosure would have been provided as a most highly compensated
executive officer, but for the fact that the individual was not
serving as an executive officer as of February 28, 2021.
Because Ms. Boonyawattanapisut and Mr. Vange were appointed as
executive officers of the Company subsequent to the year ended
February 28, 2021, they are not included in the following table. In
addition, the positions listed for each of the individuals listed
in the following table were the positions that such individuals
held as of February 28, 2021, and do not necessarily reflect their
current positions with the Company.
|
Name and
Principal Position |
|
Fiscal
Year
Ended |
|
|
Salary |
|
|
Bonus |
|
|
Stock
Awards
(1)
|
|
|
Option
Awards
|
|
|
All
Other
Compensation
|
|
|
Total |
|
William
Kerby,
|
|
|
2021 |
|
|
$ |
400,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
124,759 |
(2)(3)(7) |
|
$ |
524,759 |
|
| CEO and Vice-Chairman
of the Board |
|
|
2020 |
|
|
$ |
400,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
42,000 |
(2)(3) |
|
$ |
442,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirapop
“Kent” Taepakdee,
|
|
|
2021 |
|
|
$ |
157,834 |
|
|
$ |
10,000 |
|
|
$ |
64,850 |
(6) |
|
$ |
— |
|
|
$ |
11,211 |
(7) |
|
$ |
243,895 |
|
| VP of Finance and
Chief Financial Officer(4) |
|
|
2020 |
|
|
$ |
64,917 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
64,917 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy
Sikora,
|
|
|
2021 |
|
|
$ |
200,000 |
|
|
$ |
— |
|
|
$ |
36,300 |
(6) |
|
$ |
— |
|
|
$ |
7,762 |
(7) |
|
$ |
244,062 |
|
| COO and
CIO(5) |
|
|
2020 |
|
|
$ |
75,769 |
|
|
$ |
— |
|
|
$ |
31,800 |
(6) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
107,569 |
|
|
* |
Does not include perquisites and
other personal benefits, or property, unless the aggregate amount
of such compensation is more than $10,000. None of our executive
officers received any change in pension value and nonqualified
deferred compensation earnings during the periods presented. |
| |
|
|
|
(1) |
The
value of the Stock Awards in the table above was calculated based
on the fair value of such securities calculated in accordance with
Financial Accounting Standards Board Accounting Standards
Codification Topic 718. |
| |
|
|
|
(2) |
Mr.
Kerby receives additional compensation in the form of a car
allowance in the amount of $1,500 per month. |
| |
|
|
|
(3) |
Mr.
Kerby received additional compensation in the form of a Merchant
Banking Guarantee in the amount of $2,000 per month through
November 1, 2018, when he began receiving $2,000 as a guaranty fee
under his employment agreement, as discussed below. |
| |
|
|
|
(4) |
Mr.
Taepakdee was appointed as the principal financial officer and
principal accounting officer of the Company on October 9, 2019, and
as the Vice President of Finance, acting Chief Financial Officer
(since Chief Financial Officer), Treasurer, and Secretary of the
Company effective February 1, 2020. |
| |
|
|
|
(5) |
Mr.
Sikora was appointed as the Chief Operating Officer and the Chief
Information Officer of the Company (executive
positions) effective February 1, 2020. Served as the Chief
Information Officer (non-executive) from October 9, 2019, to
February 1, 2020, when he was appointed as an executive of the
Company. |
| |
|
|
|
(6) |
Represents the Stock Awards to Mr. Taepakdee for
27,500 shares, and to Mr. Sikora for 27,000 shares (12,000 in FY
2020 and 15,000 in FY 2021). |
| |
|
|
|
(7) |
Includes cash-out of unused vacation time, which
was paid in the form of cash, totaling $82,759 for Mr. Kerby,
$11,211 for Mr. Taepakdee, and $7,762 for Mr. Sikora. |
Employment and
Compensation Agreements
We have the following employment contracts and compensation
agreements in place with our Named Executive Officers and
Chairman:
Nithinan “Jess” Boonyawattanapisut, Employment Agreement
On September 16, 2021, the Company entered into an Employment
Agreement with Ms. Boonyawattanapisut, its Co-Chief Executive
Officer and member of its Board, which agreement has an effective
date of October 1, 2021. The agreement remains in effect (renewing
automatically on a month-to-month basis), until either party
provides the other at least 30 days prior written notice of its
intent to terminate the agreement, or until terminated as discussed
below.
The agreement includes a non-compete provision, prohibiting Ms.
Boonyawattanapisut from competing against the Company during the
term of the agreement and for a period of 12 months after
termination thereof (subject to certain exceptions described
below), in any state or country in connection with (i) the
commercial sale of products sold by the Company during the six
months preceding the termination date; and (ii) any services
the Company commercially offered during the six months prior to the
termination date (collectively, the “Non-Compete”).
During the term of the agreement, Ms. Boonyawattanapisut is to
receive a base salary of $400,000 per year, which may be increased
at any time at the discretion of the Compensation Committee of the
Board without the need to amend the agreement; an annual bonus
payable at the discretion of the Compensation Committee; other
bonuses which may be granted/approved from time to time in the
discretion of the Compensation Committee; $200,000 in cash and
25,000 shares of common stock issued as a sign-on bonus under the
terms of the Company’s Amended and Restated 2017 Equity Incentive
Plan; up to four weeks of annual paid time off, which can be
rolled-over year to year, or which in the discretion of Ms.
Boonyawattanapisut, can be required to be paid in cash at the end
of any year or the termination of the agreement; and a car
allowance equal to an equivalent of $1,500 per month, during the
term of the agreement.
The agreement provides Ms. Boonyawattanapisut with the option of
receiving some or all of the base salary and/or any bonus in shares
of the Company’s common stock, with such shares being based on the
higher of (i) the closing sales price per share on the trading
day immediately preceding the determination by Ms.
Boonyawattanapisut to accept shares in lieu of cash; and
(ii) the lowest price at which such issuance will not require
stockholder approval under the rules of the stock exchange where
the Company’s common stock is then listed or Nasdaq ((i) or
(ii) as applicable, the “Share Price” and the “Stock Option”),
provided that Ms. Boonyawattanapisut is required to provide the
Company at least five business days prior written notice if she
desires to exercise the Stock Option as to any payment of
compensation, unless such time period is waived by the Company. The
issuance of the shares described above is subject to the approval
of the stock exchange where the Company’s common stock is then
listed or Nasdaq, and where applicable, stockholder approval, and
in the sole discretion of the board of directors, may be issued
under, or outside of, a stockholder approved stock plan.
The agreement includes standard provisions relating to the
reimbursement of business expenses, indemnification rights, rights
to Company property and inventions (which are owned by the
Company), dispute resolutions, tax savings, clawback rights and
provisions entitling Ms. Boonyawattanapisut to receive any fringe
benefits offered by the Company to other executives (subsidized in
full by the Company) including, but not limited to, family
coverage for health/medical/dental/vision, life and disability
insurance.
The agreement terminates upon Ms. Boonyawattanapisut’s death and
can be terminated by the Company upon her disability (as described
in the agreement), by the Company for Cause (defined below) or
Ms. Boonyawattanapisut for Good Reason (defined below). For the
purposes of the agreement, (A) “Cause” means (i) Ms.
Boonyawattanapisut’s gross and willful misappropriation or theft of
the Company’s or any of its subsidiary’s funds or property; or
(ii) Ms. Boonyawattanapisut’s conviction of, or plea of guilty
or nolo contendere to, any felony or crime involving dishonesty or
moral turpitude; or (iii) Ms. Boonyawattanapisut materially
breaches any obligation, duty, covenant or agreement under the
agreement, which breach is not cured or corrected within thirty
days of written notice thereof from the Company (except for certain
breaches which cannot be cured); or (iv) Ms.
Boonyawattanapisut commits any act of fraud; and (B) “Good
Reason” means (i) without the consent of Ms.
Boonyawattanapisut, the Company materially reduces Ms.
Boonyawattanapisut’s title, duties or responsibilities, without the
same being corrected within ten days after being given written
notice thereof; (ii) the Company fails to pay any regular
installment of base salary to Ms. Boonyawattanapisut and such
failure to pay continues for a period of more than thirty days; or
(iii) a successor to the Company fails to assume the Company’s
obligations under the agreement, without the same being corrected
within thirty days after being given written notice thereof.
In the event of termination of the agreement for death or
disability by Ms. Boonyawattanapisut without Good Reason, or for
Cause by the Company, Ms. Boonyawattanapisut is due all
consideration due and payable to her through the date of
termination. In the event of termination of the agreement by Ms.
Boonyawattanapisut for Good Reason or the Company for any reason
other than Cause (or if Ms. Boonyawattanapisut’s employment is
terminated other than for Cause within six months before or
twenty-four months following the occurrence of a Change of Control
(defined in the agreement) of the Company), Ms.
Boonyawattanapisut is due all consideration due and payable through
the date of termination; a lump sum payment equal to twelve months
of base salary; continued participation in all benefit plans and
programs of the Company for twelve months after termination (or at
the option of the Company, reimbursement of COBRA insurance
premiums for substantially similar coverage as the Company’s
plans); and the Non-Compete will not apply to Ms.
Boonyawattanapisut.
William Kerby, Employment Agreement
On October 31, 2018, the Company entered into an Employment
Agreement with Mr. Kerby, who served as the Company’s Chief
Executive Officer and Vice Chairman of the Board at that time. The
agreement was effective as of November 1, 2018, and replaced and
superseded the terms of Mr. Kerby’s prior employment agreement
dated October 15, 2006.
The agreement remains in effect (renewing automatically on a
month-to-month basis), until either party provides the other at
least 30 days prior written notice of its intent to terminate the
agreement, or until terminated as discussed below.
The agreement includes a non-compete provision, prohibiting Mr.
Kerby from competing against the Company during the term of the
agreement and for a period of 12 months after termination thereof
(subject to certain exceptions described below), in any state or
country in connection with (A) the offer of Alternative
Lodging Rental properties (Vacation Home Rentals) which are
distributed on a Business to Business Basis; (B) the
commercial sale of specialty products sold by the Company during
the six months preceding the termination date; and (C) any
services the Company commercially offered during the six months
prior to the termination date (collectively, the
“Non-Compete”).
During the term of the agreement, Mr. Kerby is to receive a base
salary of $400,000 per year, which may be increased at any time at
the discretion of the Compensation Committee of the Board; an
annual bonus payable at the discretion of the Compensation
Committee, of up to 100% of his base salary (50% based on meeting
short term goals and 50% based on meeting long-term goals, which
are determined from time to time by the Compensation Committee);
other bonuses which may be granted from time to time in the
discretion of the Compensation Committee; 25,000 shares of common
stock issued as a sign-on bonus under the terms of the Company’s
2017 Equity Incentive Plan; up to four weeks of annual paid time
off, which can be rolled-over year to year, or which in the
discretion of Mr. Kerby, can be required to be paid in cash at the
end of any year or the termination of the agreement; and a car
allowance of $1,500 per month during the term of the agreement.
The agreement provides Mr. Kerby with the option of receiving some
or all of the base salary and/or any bonus in shares of the
Company’s common stock, with such shares being based on the higher
of (a) the closing sales price per share on the trading day
immediately preceding the determination by Mr. Kerby to accept
shares in lieu of cash; and (b) the lowest price at which such
issuance will not require stockholder approval under the rules of
the stock exchange where the Company’s common stock is then listed
or Nasdaq ((a) or (b) as applicable, the “Share Price”
and the “Stock Option”), provided that Mr. Kerby shall be required
to provide the Company at least five business days prior written
notice if he desires to exercise the Stock Option as to any payment
of compensation, unless such time period is waived by the Company.
The issuance of the shares described above is subject to the
approval of the stock exchange where the Company’s common stock is
then listed or Nasdaq, and where applicable, stockholder approval,
and in the sole discretion of the Board, may be issued under, or
outside of, a stockholder approved stock plan.
The agreement includes standard provisions relating to the
reimbursement of business expenses, indemnification rights, rights
to company property and inventions (which are owned by the
Company), dispute resolutions, tax savings, clawback rights and
provisions entitling Mr. Kerby to receive any fringe benefits
offered by the Company to other executives (subsidized in full by
the Company) including, but not limited to, family coverage
for health/medical/dental/vision, life and disability insurance, as
well as amounts under the Company’s 401(k) Savings and
Retirement.
Additionally, in consideration for Mr. Kerby having entered into
numerous personal guarantees with the Airline Reporting Commission,
sellers of travel services, merchant providers, financial
institutions, associations and service providers on behalf of the
Company, the Company agreed that, for as long as Mr. Kerby is
employed by the Company, provides services under the agreement and
is willing to continue to support the Company in connection with
such guarantees, he will receive a $2,000 per month guarantee fee.
In the event Mr. Kerby resigns for Good Reason (defined below), or
his employment is terminated by the Company, the Company agreed to
eliminate any and all guarantees within thirty days, failing which,
for each month the guarantees remain in place, the monthly
guarantee fee will rise to $10,000 per month, until such time as
the Company has assumed or terminated all such guarantees.
The agreement terminates upon Mr. Kerby’s death and can be
terminated by the Company upon his disability (as described in the
agreement), by the Company for Cause (defined below) or Mr.
Kerby for Good Reason (defined below). For the purposes of the
agreement, (A) “Cause” means (i) Mr. Kerby’s gross and
willful misappropriation or theft of the Company’s or any of its
subsidiary’s funds or property; or (ii) Mr. Kerby’s conviction
of, or plea of guilty or nolo contendere to, any felony or crime
involving dishonesty or moral turpitude; or (iii) Mr. Kerby
materially breaches any obligation, duty, covenant or agreement
under the agreement, which breach is not cured or corrected within
thirty days of written notice thereof from the Company (except for
certain breaches which cannot be cured); or (iv) Mr. Kerby
commits any act of fraud; and (B) “Good Reason” means
(i) without the consent of Mr. Kerby, the Company materially
reduces Mr. Kerby’s title, duties or responsibilities, without the
same being corrected within ten days after being given written
notice thereof; (ii) the Company fails to pay any regular
installment of base salary to Mr. Kerby and such failure to pay
continues for a period of more than thirty days; or (iii) a
successor to the Company fails to assume the Company’s obligations
under the agreement, without the same being corrected within thirty
days after being given written notice thereof.
In the event of termination of the agreement for death or
disability by Mr. Kerby without Good Reason, or for Cause by the
Company, Mr. Kerby is due all consideration due and payable to him
through the date of termination. In the event of termination of the
agreement by Mr. Kerby for Good Reason or the Company for any
reason other than Cause (or if Mr. Kerby’s employment is terminated
other than for Cause within six months before or twenty-four months
following the occurrence of a Change of Control (defined in the
agreement) of the Company), Mr. Kerby is due all consideration
due and payable through the date of termination; a lump sum payment
equal to twelve months of base salary; continued participation in
all benefit plans and programs of the Company for twelve months
after termination (or at the option of the Company, reimbursement
of COBRA insurance premiums for substantially similar coverage as
the Company’s plans); and the Non-Compete will not apply to Mr.
Kerby.
The terms of the agreement were approved by the Company’s
Compensation Committee, consisting solely of “independent” members
of our Board.
Sirapop “Kent” Taepakdee, Employment Agreement
On January 30, 2020, Mr. Taepakdee entered into an
employment agreement with the Company. Pursuant to Mr. Taepakdee’s
employment agreement, he agreed to provide services to the Company
as the VP of Finance and Chief Financial Officer.
Mr. Taepakdee receives a base salary payable in cash ($200,000 per
year) pursuant to his employment agreement and is also
eligible to receive equity compensation, when approved by the Board
and subject to the Company meeting certain metrics as follows – Mr.
Taepakdee is eligible, for a bonus of up to (a) 5,000 shares
(or $5,000 dollars), upon completion of a review of, the
improvement of, the Company’s financial reporting programs, payable
in the discretion of the Chief Executive Officer; (b) 7,500
shares (or $10,000) in the event the Company meets certain
metrics by June 30, 2020, including achieving a minimum level of
gross monthly revenues or achieving an EBITDA profit in any month,
payable in the discretion of the Chief Executive Officer;
(c) 2,000 shares or $2,000 (in Mr. Taepakdee’s discretion),
each quarter that Mr. Taepakdee works with the Chief Executive
Officer in order to prepare presentations and other public
relations items, payable in the discretion of the Chief Executive
Officer; and (d) 3,000 shares (or $4,000) in the event
the Company raises more than $3 million during the first 12 months
of the agreement, payable in the discretion of the Chief Executive
Officer. All shares earned in the first 12 months of the agreement
are valued at $2.00 per share. Upon the mutual approval of the
executive and the Company, Mr. Taepakdee’s salary may increase to
no less than $150,000 per year after the first year.
On September 8, 2020, the Company issued Mr. Taepakdee an aggregate
of 17,500 shares of common stock of the Company as a bonus in
consideration for services rendered, which vested immediately upon
issuance.
Effective on January 31, 2021, the compensation of Mr. Taepakdee
was increased from $154,000 to $200,000 per year.
On February 12, 2021, the Company issued Mr. Taepakdee an aggregate
of 10,000 shares of common stock of the Company as a bonus in
consideration for services rendered, which vested immediately upon
issuance.
The agreement has a term of three years, mutually extendable with
the consent of the parties.
In the event that Mr. Taepakdee desires to sell more than 10,000
shares of common stock in any one transaction when the daily volume
of the Company’s common stock is 10,000 or less, Mr. Taepakdee is
required to provide the Company the first right to purchase such
shares.
If the agreement is terminated by Mr. Taepakdee for good reason (as
defined in the agreement) or by the Company without cause, and
other than due to Mr. Taepakdee’s death or disability, Mr.
Taepakdee is due two calendar months of severance pay; and if the
agreement is terminated due to Mr. Taepakdee’s disability, Mr.
Taepakdee, is due compensation through the remainder of the month
during which he was terminated. If he is terminated for cause,
terminates his employment without good reason or dies, he (or his
estate, as applicable) is paid through the date of
termination. If the Company terminates the agreement within 24
months after a change in control (as described in the agreement),
then the Company is required to pay Mr. Taepakdee a severance
payment equal to twelve months’ salary, plus continue to provide
benefits equal to those provided prior to the change in control for
a period of six months. The agreement contains customary
confidentiality requirements and work for hire language. The
agreement includes a one year non-solicitation and non-competition
clause following the date of the termination of the agreement,
which non-competition clause prohibits Mr. Taepakdee (without the
prior written consent of the Company which consent will not be
unreasonably withheld) from directly or through another person
or another entity carrying on or being engaged in any business
within North America which is competitive with the business of the
Company, however the non-compete shall terminate in the event of a
termination of employment by Mr. Taepakdee for good reason or a
termination by the Company other than for cause or disability.
Mark Vange – Employment Agreement
On July 15, 2021, Mr. Vange entered into an employment agreement
with the Company. Pursuant to Mr. Vange’s employment agreement, he
agreed to provide services to the Company as the Chief Technology
Officer.
Mr. Vange receives a base salary payable in cash ($300,000 per
year) pursuant to his employment agreement and is also
eligible to receive equity compensation, when approved by the Board
and subject to the Company meeting certain metrics as follows – Mr.
Vange is eligible, for a bonus of up to (a) 10,000 shares (or
$20,000 dollars), upon the Company achieving certain gross monthly
revenue targets by August 31, 2021 or February 28, 2022, or an
EBITDA profit in any month before February 28, 2022;
(b) 20,000 shares (or $40,000) in the event certain
milestones for product and website launches and integrations are
completed payable in the discretion of the Chief Executive Officer;
(c) 60,000 shares (or $155,000) in the event certain new
lines of business, greater public recognition, and/or new
opportunities are developed by Mr. Vange, payable in the discretion
of the Chief Executive Officer, and (d) 60,000 shares (or
$155,000) in the event of the successful deployment of certain
digital securities offerings, successful implementation of certain
online banking solutions and the successful deployment of certain
key artificial intelligence capabilities throughout the Company’s
business, payable in the discretion of the Chief Executive
Officer.
The agreement remains in effect (renewing automatically on a
month-to-month basis), until terminated by either party in
accordance with its terms, as discussed below.
In the event that Mr. Vange desires to sell more than 10,000 shares
of common stock in any one transaction when the daily volume of the
Company’s common stock is 10,000 or less, Mr. Vange is required to
provide the Company the first right to purchase such shares.
If the agreement is terminated by Mr. Vange for good reason (as
defined in the agreement) or by the Company without cause, and
other than due to Mr. Vange’s death or disability, Mr. Vange is due
two calendar months of severance pay and all shares of Company
common stock held in escrow or subject to vesting schedules shall
accelerate and/or be released (as applicable); and if the agreement
is terminated due to Mr. Vange’s disability, Mr. Vange, is due
compensation through the remainder of the month during which he was
terminated. If he is terminated for cause, terminates his
employment without good reason or dies, he (or his estate, as
applicable) is paid through the date of termination. The
agreement contains customary confidentiality requirements and work
for hire language. The agreement includes a one year
non-solicitation and non-competition clause following the date of
the termination of the agreement, which non-competition clause
prohibits Mr. Vange (without the prior written consent of the
Company, which consent will not be unreasonably withheld) from
directly or through another person or another entity carrying on or
being engaged in any business within North America which is
competitive with the business of the Company, however the
non-compete shall terminate in the event of a termination of
employment by Mr. Vange for good reason or a termination by the
Company other than for cause or disability.
Timothy Sikora – Employment Agreement
On January 30, 2020, Mr. Sikora entered into an employment
agreement with the Company. Pursuant to Mr. Sikora’s employment
agreement, he agreed to provide services to the Company as the
Chief Information Officer and Chief Operations Officer.
Mr. Sikora currently receives a base salary payable in cash
($236,000 per year) pursuant to his employment agreement and
is also eligible to receive equity compensation, when approved by
the Board and subject to the Company meeting certain metrics as
follows – Mr. Sikora is eligible, for a bonus of up to
(a) 10,000 shares (or $10,000 dollars), upon the Company
achieving certain gross monthly revenue targets by June 30, 2020 or
December 30, 2020, or an EBITDA profit in any month before February
28, 2021; (b) 10,000 shares (or $10,000) in the event
certain milestones for product and website launches and
integrations are completed during calendar 2020, payable in the
discretion of the Chief Executive Officer; and (c) 25,000
shares (or $25,000) in the event the Company completes a
merger or acquisition, completes a funding, accelerates
profitability or achieves profitability by February 28, 2021,
payable in the discretion of the Chief Executive Officer.
On September 8, 2020, the Company issued Mr. Sikora an aggregate of
15,000 shares of common stock of the Company as a bonus in
consideration for services rendered, which vested immediately upon
issuance.
The agreement has a term of three years, mutually extendable with
the consent of the parties.
In the event that Mr. Sikora desires to sell more than 10,000
shares of common stock in any one transaction when the daily volume
of the Company’s common stock is 10,000 or less, Mr. Sikora is
required to provide the Company the first right to purchase such
shares.
If the agreement is terminated by Mr. Sikora for good reason (as
defined in the agreement) or by the Company without cause, and
other than due to Mr. Sikora’s death or disability, Mr. Sikora is
due two calendar months of severance pay; and if the agreement is
terminated due to Mr. Sikora’s disability, Mr. Sikora, is due
compensation through the remainder of the month during which he was
terminated. If he is terminated for cause, terminates his
employment without good reason or dies, he (or his estate, as
applicable) is paid through the date of termination. If the
Company terminates the agreement within 24 months after a change in
control (as described in the agreement), then the Company is
required to pay Mr. Sikora a severance payment equal to
twelve months’ salary, plus continue to provide benefits equal
to those provided prior to the change in control for a period of
six months. The agreement contains customary confidentiality
requirements and work for hire language. The agreement includes a
one year non-solicitation and non-competition clause following the
date of the termination of the agreement, which non-competition
clause prohibits Mr. Sikora (without the prior written consent of
the Company which consent will not be unreasonably
withheld) from directly or through another person or another
entity carrying on or being engaged in any business within North
America which is competitive with the business of the Company,
however the non-compete shall terminate in the event of a
termination of employment by Mr. Sikora for good reason or a
termination by the Company other than for cause or disability.
Donald P. Monaco, Guaranty Compensation Agreement
On October 31, 2018, and effective November 1, 2018, the Company
entered into a Guaranty Compensation Agreement with Donald P.
Monaco, who was serving as Chairman of the Company’s Board at that
time. Pursuant to the Guaranty Compensation Agreement and in
consideration for Mr. Monaco previously providing a personal
guaranty to a financial institution in connection with our line of
credit with such financial institution, we agreed that for as long
as Mr. Monaco continues to serve on the Board and continues to
maintain the guaranty (and any future guarantees he may provide),
we would pay him a $2,000 per month guarantee fee (the “Guarantee
Fee”). In December 2020, the Company repaid its credit agreement
with National Bank of Commerce (FKA: Republic Bank), which
terminated Mr. Monaco’s guaranty and the Guaranty Compensation
Agreement.
Payments Due Upon a Change of Control Under Employment
Arrangements with Ms. Boonyawattanapisut, Mr. Kerby, Mr. Taepakdee
and Mr. Sikora and Certain Other Employees
As described in greater detail above, the employment agreements
with Ms. Boonyawattanapisut, our Co-Chief Executive Officer, Mr.
Kerby, our Co-Chief Executive Officer, Mr. Taepakdee, our Chief
Financial Officer and Mr. Sikora, our Chief Operating Officer,
include provisions which provide that, if such person’s employment
with the Company is terminated within twenty-four months after a
Change of Control (descried below) (or in the case of Mr. Kerby’s
agreement, within twenty-four months after, or six months prior to,
a Change of Control), then the Company is required to pay such
executives a severance payment:
|
● |
As to
Ms. Boonyawattanapisut and Mr. Kerby, equal to (i) a lump sum
payment in an amount equal to twelve months of their base salary at
the then current rate (currently $400,000 per year); (ii) all
amounts earned, accrued or owing through the date their employment
is terminated but not yet paid; and (iii) continued
participation in all employee benefit plans, programs or
arrangements available to the Company executives in which they were
participating on such date of termination of until the earliest of:
(a) twelve months after the date of termination of employment;
(b) the date the employment agreement would have expired but
for the occurrence of the date of termination; or (c) the
date, or dates, Ms. Boonyawattanapisut or Mr. Kerby (as applicable)
receives similar coverage under a subsequent employer plan. Such
payment is required to be made in a lump sum on or before the date
ending on the expiration of three months following the date of
termination; and |
|
● |
As to
Mr. Taepakdee and Mr. Sikora, a severance payment equal to twelve
months salary ($200,000 as to Mr. Taepakdee and $200,000 as to Mr.
Sikora), plus continued benefits equal to those provided prior to
the Change of Control event for a period of six months. |
For the purposes of the employment agreements, “Change of Control”
(“Change in Control” under Mr. Kerby’s agreement) means
(a) any entity or person who becomes either individually or,
pursuant to an express agreement among all of the members of such
group, as part of a “control group” (as such term is used in
Section 13(d) of the Exchange Act) the beneficial owner
of 50% or more of the Company’s voting securities (other than an
employee, officer or stockholder of the Company as of the date of
such applicable employment agreement) or (b) there is a
liquidation of all or substantially all of the Company’s assets or
the Company dissolves. We anticipate that the closing of the
exchange agreements will constitute a Change of Control under the
employment agreements.
It is also grounds for a “Good Reason” termination under each of
the employment agreements of our officers if, in the case of Ms.
Boonyawattanapisut’s and Mr. Kerby’s agreements, without his
consent, the Company materially reduces their title, duties or
responsibilities and in the case of Messrs. Taepakdee’s, Sikora’s
and Vange’s employment agreements, there is a significant reduction
of their duties, position or responsibilities relative to the their
duties, position or responsibilities in effect immediately prior to
such reduction, or the removal of the executive from such position,
duties and responsibilities.
Additionally, in the event Mr. Kerby resigns for Good Reason, we
are required to immediately eliminate any and all guarantees which
Mr. Kerby has provided on behalf of the Company (which total an
aggregate of approximately $2 million as of the date of this Proxy
Statement), and in the event we are unable to eliminate all such
guarantees within 30 days, we are required to pay Mr. Kerby $10,000
per month in guaranty fees (compared to $2,000 per month under the
current terms of the employment agreement) until such time as
such guarantees are eliminated. Finally, in the event Mr. Kerby
resigns for Good Reason, Mr. Kerby is due the same severance
compensation described above in connection with a Change of Control
termination.
In the event Messrs. Taepakdee, Sikora or Vange terminates his
employment agreement for Good Reason, we are required to pay such
applicable executive his salary and other benefits earned or
accrued through the date of termination, and continue to pay them
two additional months of salary.
Certain employment agreements of other non-executive officers of
the Company contain similar provisions as Messrs. Taepakdee’s,
Sikora’s and Vange’s agreements, discussed above.
Outstanding Equity
Awards at Fiscal Year-End
None.
Equity Compensation
Plan Information
2017 Equity Incentive Plan
On August 25, 2017, our Board adopted, subject to the ratification
by a majority of our stockholders, which occurred effective on
September 13, 2017, the Company’s 2017 Equity Incentive Plan (the
“2017 Plan”). The 2017 Plan is intended to secure for the Company
the benefits arising from ownership of the Company’s common stock
by the employees, officers, directors and consultants of the
Company, all of whom are, and will be, responsible for the
Company’s future growth. The 2017 Plan is designed to help attract
and retain for the Company, qualified personnel for positions of
exceptional responsibility, to reward employees, officers,
directors and consultants for their services to the Company and to
motivate such individuals through added incentives to further
contribute to the success of the Company.
The 2017 Plan provides an opportunity for any employee, officer,
director or consultant of the Company, subject to any limitations
provided by federal or state securities laws, to receive
(i) incentive stock options (to eligible employees only);
(ii) nonqualified stock options; (iii) restricted stock;
(iv) stock awards; (v) shares in performance of services;
or (vi) any combination of the foregoing. Incentive stock
options granted under the 2017 Plan are intended to qualify as
“incentive stock options” within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”).
Nonqualified (non-statutory stock options) granted under the
2017 Plan are not intended to qualify as incentive stock options
under the Code.
No incentive stock option may be granted under the 2017 Plan to any
person who, at the time of the grant, owns (or is deemed to
own) stock possessing more than 10% of the total combined
voting power of our Company or any affiliate of our Company, unless
the exercise price is at least 110% of the fair market value of the
stock subject to the option on the date of grant and the term of
the option does not exceed five years from the date of grant.
The 2017 Plan is administered by the Board and/or the Company’s
Compensation Committee. Subject to adjustment in connection with
the payment of a stock dividend, a stock split or subdivision or
combination of the shares of common stock, or a reorganization or
reclassification of the Company’s common stock, the maximum
aggregate number of shares of common stock which may be issued
pursuant to awards under the 2017 Plan is 2,000,000 shares. Such
shares of common stock shall be made available from the authorized
and unissued shares of the Company.
2021 Equity Incentive Plan
On April 7, 2021, stockholders approved the adoption of the
Company’s 2021 Equity Incentive Plan (the “2021 Plan”), which is
intended to secure for the Company and its affiliates the benefits
arising from ownership of the Company’s common stock by the
employees, officers, directors and consultants of the company and
its affiliates, all of whom are and will be responsible for the
Company’s future growth. The 2021 Plan is designed to help attract
and retain for the Company and its affiliates personnel of superior
ability for positions of exceptional responsibility, to reward
employees, officers, directors and consultants for their services
and to motivate such individuals through added incentives to
further contribute to the success of the Company and its
affiliates. Awards under the 2021 Plan may be made to an eligible
person in the form of (i) incentive stock options (to eligible
employees only); (ii) nonqualified stock options; (iii) restricted
stock; (iv) stock awards; (v) performance shares; or (vi) any
combination of the foregoing. The shares eligible for future awards
under the 2021 Plan will be equal to (i) 13,065,060, which amount
is equal to 15% of the Company’s total outstanding shares of common
stock immediately after the closing of the HotPlay Share Exchange
and conversion of the Axion preferred stock, plus (ii) an annual
increase on April 1st of each calendar year, beginning in 2022 and
ending in 2030, in each case subject to the approval of the Board
or the Compensation Committee of the Company on or prior to the
applicable date, equal to the lesser of (A) 5% of the total shares
of common stock of the Company outstanding on the last day of the
immediately preceding fiscal year; (B) 5,000,000 shares of common
stock; and (C) such smaller number of shares as determined by the
board of directors or Compensation Committee (the “Share Limit”),
also known as an “evergreen” provision.
The following table provides certain aggregate information with
respect to all of our equity compensation plans in effect as of
February 28, 2021:
|
Plan category |
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights as
of February 28, 2021 |
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights |
|
|
Number of
securities remaining
available for future
issuance under
equity
compensation plans
(excluding securities
reflected in column
(a)) |
|
| |
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
Equity compensation plans approved by security holders |
|
|
— |
|
|
$ |
— |
|
|
|
1,336,279 |
|
| Equity
compensation plans not approved by security holders |
|
|
206,720 |
|
|
$ |
3.10 |
|
|
|
— |
|
| Total |
|
|
206,720 |
|
|
$ |
3.10 |
|
|
|
1,336,279 |
|
OTHER MATTERS
Stockholder
Proposals for 2023 Annual Meeting of Stockholders
Proposals of holders of our voting securities intended to be
presented at our 2023 annual meeting of stockholders and included
in our proxy statement and form of proxy relating to such meeting
pursuant to Rule 14a-8 of Regulation 14A must be received by us,
addressed to our Corporate Secretary, at our principal executive
offices at 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise,
Florida 33323, not earlier than the close of business on December
23, 2022, and not later than the close of business on January 22,
2023, together with written notice of the stockholder’s intention
to present a proposal for action at the fiscal 2023 annual meeting
of stockholders, unless our annual meeting date occurs more than 30
days before or 30 days after April 22, 2023. In that case, we must
receive proposals not earlier than the close of business on the
120th day prior to the date of the fiscal 2023 annual meeting and
not later than the close of business on the later of the 90th day
prior to the date of the fiscal 2023 annual meeting or, if the
first public announcement of the date of the fiscal 2023 annual
meeting is less than 100 days prior to the date of the meeting, the
10th day following the day on which we first make a public
announcement of the date of the meeting.
Stockholder proposals must be in writing and must include
(i) the name and record address of the stockholder who intends
to propose the business and the class or series and number of
shares of capital stock of the Company that are owned beneficially
or of record by such stockholder; (ii) a representation that
the stockholder is a holder of record of stock of the Company
entitled to vote at the Meeting and intends to appear in person or
by proxy at the meeting to introduce the business specified in the
notice; (iii) a brief description of the business desired to
be brought before the Meeting and the reasons for conducting such
business at the Meeting; (iv) any material interest of the
stockholder in such business; and (v) any other information
that is required to be provided by the stockholder pursuant to
Regulation 14A under the Exchange Act. The Board reserves the right
to refuse to submit any proposal to stockholders at the Meeting if,
in its judgment, the information provided in the notice is
inaccurate or incomplete, or does not comply with the requirements
for stockholder proposals set forth in our bylaws.
Additionally, the Nominating Committee will consider director
candidates recommended by stockholders, provided stockholders
include (i) as to each person whom the stockholder proposes
for the Nominating Committee to consider for nomination for
election as a director (a) the name, age, business address and
residence address of the person, (b) the principal occupation
or employment of the person, (c) the class or series and
number of shares of capital stock of us which are owned
beneficially or of record by the person and (d) any other
information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made
in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act, and the rules
and regulations promulgated thereunder; and (ii) as to the
stockholder giving the notice (a) the name and record address
of such stockholder, (b) the class or series and number of
shares of capital stock of the Company which are owned beneficially
or of record by such stockholder, (c) a description of all
arrangements or understandings between such stockholder and each
proposed nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made
by such stockholder, (d) a representation that such
stockholder intends to appear in person or by proxy at the meeting
to nominate the persons named in its notice, and (e) any other
information relating to such stockholder that would be required to
be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules
and regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to being
named as a nominee and to serve as a director, if elected.
Individuals recommended by stockholders in accordance with these
procedures will receive the same consideration received by
individuals identified to the Nominating Committee through other
means.
Additional
Filings
We file annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and proxy and information
statements and amendments to reports filed or furnished pursuant to
Sections 13(a) and 15(d) of the Exchange Act. The SEC maintains a
website (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding us and other
companies that file materials with the SEC electronically.
Additional information about us is available on our website at
www.Nextplaytechnologies.com. Information on our website does not
constitute part of this proxy statement.
We will provide, without charge, to each person to whom a Proxy
Statement is delivered, upon written or oral request of such person
and by first class mail or other equally prompt means within one
business day of receipt of such request, a copy of any of the
filings described above. Individuals may request a copy of such
information by sending a request to us, Attn: Corporate Secretary,
NextPlay Technologies, Inc., 1560 Sawgrass Corporate Parkway,
Suite 130, Sunrise, Florida 33323.
Other Matters to be
Presented at the Meeting
As of the date of this Proxy Statement, our management has no
knowledge of any business to be presented for consideration at the
Meeting other than that described above. If any other business
should properly come before the Meeting or any adjournment thereof,
it is intended that the shares represented by properly executed
proxies will be voted with respect thereto in accordance with the
judgment of the persons named as agents and proxies in the enclosed
form of proxy.
Our Board does not intend to bring any other matters before the
Meeting and has not been informed that any other matters are to be
presented by others.
Interest of Certain
Persons in or Opposition to Matters to Be Acted Upon:
| |
(a) |
No
officer or director of us has any substantial interest in the
matters to be acted upon, other than his or her role as an officer
or director of us, or as a stockholder of us. |
| |
(b) |
No
director of us has informed us that he or she intends to oppose the
action taken by us set forth in this Proxy Statement. |
Incorporation of
Information by Reference
The SEC allows us to “incorporate by reference” certain information
that we file with the SEC, which means that we can disclose
important information by referring you to those documents. The
information incorporated by reference is considered to be a part of
this Proxy Statement. We incorporate herein the following
information contained in or attached to our Annual Report on Form
10-K for the fiscal year ended February 28, 2021, which we filed
with the SEC on June 8, 2021: (i) Item 7 entitled “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations, and (ii) Item 8 entitled “Financial Statements and
Supplementary Data.
We will provide, without charge, to each person to whom a proxy
statement is delivered, upon written or oral request of such person
and by first class mail or other equally prompt means within one
business day of receipt of such request, a copy of any and all of
the information that has been incorporated by reference in this
Proxy Statement.
Company Contact
Information
All inquiries regarding our Company should be addressed to our
Company’s principal executive office:
NextPlay Technologies, Inc.
1560 Sawgrass Corporate Parkway, Suite 130
Sunrise, Florida 33323
| By Order of
the Board of Directors, |
|
| |
|
| /s/ John Todd
Bonner |
|
| John Todd Bonner,
Chairman |
|
NextPlay Technologies (NASDAQ:NXTP)
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