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☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under 240.14a-12
The
Arena Group Holdings, 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 the appropriate box):
☒
No fee required.
☐
Fee paid previously with preliminary materials.
☐
Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a6(i)(1) and 0-11.
The
Arena Group Holdings, Inc.
Annual
Meeting of Stockholders
December
12, 2024
Notice
and Proxy Statement
NOTICE
OF VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
To
Be Held On Thursday, December 12, 2024
Dear
Fellow Arena Group Stockholders:
November 18, 2024
It
is our pleasure to invite you to this years Annual Meeting of the Stockholders of The Arena Group Holdings Inc. (the
Annual
Meeting
). This year, the Annual Meeting will be held on Thursday, December 12, 2024 at 12:00 p.m., Eastern Time, in a virtual
meeting format only. There will be no physical location for stockholders to attend the Annual Meeting. Stockholders will be able to listen
and vote, regardless of their physical location, by logging on to
https://web.lumiconnect.com/273495257
using the meeting password
and the 11-digit control number found in the proxy materials previously distributed to you. The password for the meeting is agh2024.
If you hold your shares through an intermediary, such as a bank, broker, or other nominee, you must register in advance to attend the
Annual Meeting. To register, you must submit proof of your legal proxy obtained from your bank, broker, or nominee reflecting
your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to proxy@equiniti.com; (ii) by facsimile
to 718.765.8730; or (iii) by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 55 Challenger Rd Suite 200B 2nd
floor Ridgefield Park, NJ 07660. Please reference Arena Group 2024 Annual Meeting December 12, 2024 in the subject line.
Obtaining a legal proxy may take several days and stockholders are advised to register as far in advance as possible. Requests
for registration must be labeled as Legal Proxy and be received no later than 5:00 p.m., Eastern Time, on December 10,
2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration. If you plan to participate in the
Annual Meeting, please see the section titled Instructions for the Virtual Annual Meeting in the attached Proxy Statement.
The purpose of the Annual Meeting is to vote on the following:
1.
To
elect directors to our Board of Directors;
2.
To
ratify the selection of KPMG LLP as our independent registered public accounting firm for
the year ending December 31, 2024; and
3.
To
transact such other business as may properly come before the Annual Meeting or any postponement
or adjournment thereof.
Only
stockholders of record at the close of business on Friday October 18, 2024 will be entitled to receive notice of and to vote at the Annual
Meeting or any postponement or adjournment thereof. The enclosed Notice and Proxy Statement contain details concerning the foregoing
items and any other business to be conducted at the Annual Meeting, as well as information on how to vote your shares. Other detailed
information about us and our operations, including our audited financial statements, are included in our Annual Report on Form 10-K for
the year ended December 31, 2023 (the
Annual Report
), a copy of which is enclosed. We urge you to read and consider
these documents carefully.
Your
vote Is very important. Whether or not you expect to participate in the Annual Meeting, we urge you to cast your vote and submit your
proxy in advance of the Annual Meeting. You can vote by Internet or mail as follows:
By
Internet
By
Mail
Visit
www.voteproxy.com
Sign,
date, and return the enclosed proxy card or voting instruction form
This
Proxy Statement (this
Proxy Statement
), and the enclosed proxy card, is solicited by the Board of Directors (our
Board
) of The Arena Group Holdings, Inc., a Delaware corporation, for use at the Annual Meeting of Stockholders
(the
Annual Meeting
) to be held on Thursday, December 12, 2024 at 12:00 p.m., Eastern Time, or at any adjournments
or postponements thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be a completely virtual meeting of stockholders conducted via live audio webcast to enable our stockholders to participate from
anywhere. You will be able to virtually attend the Annual Meeting by logging on to https://web.lumiconnect.com/273495257 using the meeting
password and the 11-digit control number found in the proxy materials previously distributed to you. The password for the meeting is
agh2024. If you hold your shares through an intermediary, such as a bank, broker, or other nominee, you must register in advance to attend
the Annual Meeting. To register, you must submit proof of your legal proxy obtained from your bank, broker, or nominee
reflecting your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to proxy@equiniti.com;
(ii) by facsimile to 718.765.8730; or by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 55 Challenger Rd Suite
200B 2nd floor Ridgefield Park, NJ 07660. Please reference Arena Group 2023 Annual Meeting December 12, 2024 in the subject
line. Obtaining a legal proxy may take several days and stockholders are advised to register as far in advance as possible.
Requests for registration must be labeled as Legal Proxy and be received no later than 5:00 p.m., Eastern Time, on December
10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration.
References
in this Proxy Statement to The Arena Group Holdings, Arena Group, we, us, our,
or the Company refers to The Arena Group Holdings, Inc.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, DECEMBER 12, 2024.
This
Proxy Statement, the enclosed proxy card, and the Annual Report on Form 10-K for the fiscal year ended on December 31, 2023 (the
Annual
Report
) are all available on at https://www.astproxyportal.com/ast/26433. With respect to the Annual Meeting and all of our
future stockholder meetings, please contact
our Investor Relations Department, at 212.321.5002
,
or investorrelations@thearenagroup.net
,
to request a copy of this Proxy Statement, Annual Report, or proxy card, or to obtain information regarding such meeting.
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING AND PROCEDURAL MATTERS
What
is a proxy?
A
proxy is your legal designation of another person to vote the stock you own and are entitled to vote. The person you designate is your
proxy, and, by submitting a proxy card, you give the proxy the authority to vote your shares. We have designated Sara Silverstein,
Chief Executive Officer, and Geoffrey Wait, Principal Financial Officer, as proxies for the Annual Meeting.
Why
am I receiving these materials?
You
are receiving these proxy materials because our Board is soliciting your proxy to vote at the Annual Meeting for the purposes set forth
herein. This Proxy Statement provides you with information on the matters to be voted on at the Annual Meeting as well as instructions
on how to vote.
We
intend to begin mailing this Proxy Statement and accompanying proxy card on or about Monday, November 18, 2024 to all stockholders
of record entitled to vote at the Annual Meeting.
Who
can vote at the Annual Meeting?
You
can vote if, as of the close of business on Friday, October 18, 2024 (the
Record Date
), you were a stockholder of
record of the Companys common stock, par value $0.01 per share (our
Common Stock
), our only class of voting
stock issued and outstanding. On the Record Date, there were 47,448,047 shares of our Common Stock issued and outstanding.
2
Stockholder
of Record: Shares Registered in Your Name
If
on the Record Date, your shares were registered directly in your name with our transfer agent, Equiniti Trust Company, LLC, then you
are a stockholder of record. As a stockholder of record, you may vote virtually at the Annual Meeting or vote by proxy. Whether or not
you plan to participate in the virtual Annual Meeting, we urge you to vote through the Internet prior to the Annual Meeting to ensure
your vote is counted. Even if you vote by proxy, you may still vote at the virtual Annual Meeting. In order to virtually attend the Annual
Meeting, please log on to https://web.lumiconnect.com/273495257 using the meeting password and the 11-digit control number found in the
proxy materials previously distributed to you. The password for the meeting is agh2024.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
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 these proxy materials are being forwarded to you by that organization.
The organization holding your account is considered the stockholder of record for purposes of voting at the Annual 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. If you do not direct your broker
how to vote your shares, the broker will be entitled to vote the shares with respect to discretionary items but will not
be permitted to vote the shares with respect to non-discretionary items (resulting in a broker non-vote).
The ratification of the appointment of our independent registered public accounting firm, KPMG LLP (
KPMG
), under
Proposal No. 2, is a discretionary matter. The election of directors under Proposal No. 1 is a non-discretionary
matter.
You
are also invited to virtually participate in the Annual Meeting. However, since you are not the stockholder of record, you must register
in advance to attend the Annual Meeting. To register, you must submit proof of your legal proxy obtained from your bank,
broker, or nominee reflecting your holdings, along with your name and email address, to Equiniti Trust Company, LLC: (i) by email to
proxy@equiniti.com; (ii) by facsimile to 718.765.8730; or (iii) by mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department,
55 Challenger Rd Suite 200B 2nd floor Ridgefield Park, NJ 07660. Please reference Arena Group 2024 Annual Meeting December 12,
2024 in the subject line. Obtaining a legal proxy may take several days and stockholders are advised to register
as far in advance as possible. Requests for registration must be labeled as Legal Proxy and be received no later than 5:00
p.m., Eastern Time, on December 10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration.
How
many votes do I have?
On
each matter to be voted upon, you have one vote for each share of Common Stock you owned as of the Record Date.
What
am I voting on?
The
following matters are scheduled for the Annual Meeting: (i) the election of six directors to our Board, and (ii) the ratification
of the selection of KPMG as our independent registered public accounting firm for the year ending December 31, 2024. A vote may
also be held on any other business as may properly come before the Annual Meeting or any postponement or adjournment thereof, although
there is no other business anticipated to come before the Annual Meeting.
What
are abstentions, withholds, and broker non-vote and their effects on voting?
Abstentions
(i.e., shares of our Common Stock present at the Annual Meeting and marked abstain) are counted for purposes of determining
whether a quorum is present and are deemed to be shares present or represented by proxy and entitled to vote. Abstentions will have no
effect on Proposal No. 1 and the same effect as a vote against Proposal No. 2.
A
withhold vote, in the case of Proposal No. 1, will have no effect on the outcome of the proposal and will not prevent a candidate from
being elected in an uncontested election.
3
Brokers
have limited discretionary authority to vote shares that are beneficially owned and, therefore, are not entitled to vote on non-routine
matters in the absence of voting instructions from the beneficial owner of such shares. Broker non-votes occur when shares
of our Common Stock held by a broker, bank, trustee, or other nominee for a beneficial owner are not voted either because (i) the broker,
bank, trustee, or other nominee did not receive voting instructions from the beneficial owner, or (ii) the broker, bank, trustee, or
other nominee lacked discretionary authority to vote the shares. Broker non-votes are counted for purposes of determining whether a quorum
is present. Brokers have discretionary authority to vote shares that are beneficially owned only on Proposal No. 2 at the Annual Meeting.
Note that if you are a beneficial holder and do not provide specific voting instructions to your broker, bank, trustee, or other nominee,
the broker, bank, trustee, or other nominee that holds shares of our Common Stock will not be authorized to vote on Proposal No. 1. Accordingly,
we encourage you to provide voting instructions to your broker, bank, trustee, or other nominee, whether or not you plan to attend the
Annual Meeting.
What
are my voting choices for each of the items to be voted on at the Annual Meeting?
Proposal
No.
Board
Recommendation
Voting
Choices
Vote
Required
for Adoption
Effect
of
Absentions/
Withholds
Effect
of
Broker Non-
Votes
1
Election of Director Nominees
FOR
ALL
nominees
●
Vote
“For All” to vote for all of the nominees listed
●
Vote
“Withhold All” to withhold your vote for all of the nominees listed
●Vote “For All Except” to vote for all of the nominees listed except one or more of the nominees you specify
Plurality
of the votes present virtually or by proxy and entitled to vote at the Annual Meeting, which means that the seven nominees who receive
the highest number of shares voted for their election will be elected
No
effect
No
effect
2
Ratification of the Appointment of KPMG as our Independent Registered Public Accounting Firm for the Year Ending December
31, 2024
FOR
●Vote “For” the ratification of the appointment
●Vote “Against” the ratification of the appointment Abstain from voting on this proposal
Approved
if a majority of the voting power of the shares of Common Stock present virtually or represented by proxyand entitled
to vote, vote for the proposal
Treated
as votes against proposal
No
effect
Information
about cumulative voting
Cumulative
voting is not permitted under our Amended and Restated Certificate of Incorporation (
Certificate of Incorporation
).
Are
there interests of certain persons in matters to be acted upon?
No
person who has been a director or officer of ours at any time since the beginning of fiscal 2023, a director nominee, or any associate
of any such persons, has any substantial interest, direct or indirect, in any of the proposals to be voted upon that differs from that
of other stockholders, other than: (i) Proposal No. 1, the election of directors.
Instructions
for the Virtual Annual Meeting
Participating
in the Virtual Annual Meeting
This
years Annual Meeting will be a virtual annual meeting. There will be no physical meeting location. A virtual meeting format offers
the same participation opportunities as those opportunities available to stockholders at in-person meetings. Stockholders will be able
to listen and vote. To participate in the Annual Meeting, you must log on to https://web.lumiconnect.com/273495257 using the meeting
password and the 11-digit control number found in the proxy materials distributed to you. The password for the meeting is agh2024. For
registered stockholders, your 11-digit control number can be found on the proxy card. If you hold your shares beneficially through a
bank or broker, you must register in advance to attend the Annual Meeting. To register, you must submit proof of your legal proxy
obtained from your bank, broker, or nominee reflecting your holdings, along with your name and email address, to Equiniti Trust Company,
LLC: (i) by email to proxy@equiniti.com; (ii) by facsimile to 718.765.8730; or (iii) by mail to Equiniti Trust Company, LLC, Attn: Proxy
Tabulation Department, 6201 15th Avenue, Brooklyn, New York, 11219. Please reference Arena Group Annual Meeting December 12, 2024
in the subject line. Obtaining a legal proxy may take several days and stockholders are advised to register as far in advance
as possible. Requests for registration must be labeled as Legal Proxy and be received no later than 5:00 p.m., Eastern
Time, on December 10, 2024. You will receive a confirmation email from Equiniti Trust Company, LLC of your registration.
4
The
Annual Meeting will begin promptly at 12:00 p.m., Eastern Time, on Thursday, December 12, 2024. We encourage you to access the virtual
meeting website prior to the start time. Online check-in will begin 60 minutes prior to the start of the Annual Meeting. You should allow
ample time to ensure your ability to access the meeting. The Chairman of the Annual Meeting has broad authority to conduct the Annual
Meeting in an orderly manner.
What
if I have technical difficulties or trouble accessing the virtual Annual Meeting website during the check-in time or during the Annual
Meeting?
If
you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please click on the Help
icon button in the virtual meeting platform for assistance.
How
do I vote?
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record, you may vote using the following methods:
●
By
Internet.
To vote by proxy via the Internet, simply follow the instructions described
on the proxy card.
●
By
Mail.
To vote by mail using the proxy card, simply complete, sign, and date the enclosed
proxy card and return it promptly in the envelope provided. If you return your signed proxy
card to us before the Annual Meeting, we will vote your shares as you direct.
●
In
Person.
To vote in person, follow the instructions to participate in the Annual Meeting
in the section titled Participating in the Virtual Annual Meeting, above.
Whether
or not you plan to participate in the virtual Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still
participate in the virtual Annual Meeting and vote electronically if you have already voted by proxy.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you can vote as follows:
●
By
Internet.
You may vote through the Internet only if your broker, bank, or other agent
makes these methods available, in which case the instructions will be included with the proxy
materials. If you want to vote electronically at the virtual Annual Meeting, you must obtain
a valid proxy from your broker, bank, or other agent, follow the instructions from your broker,
bank, or agent included with these proxy materials, or contact your broker, bank, or other
agent to request a proxy form.
●
By
Mail.
You should have received a proxy card and voting instructions with these proxy
materials from the broker, bank, or other agent holding your shares rather than from us.
To vote by mail, simply complete and mail the proxy card or voting instruction form to ensure
that your vote is counted.
●
In
Person.
To vote in person, follow the instructions to participate in the Annual Meeting
in the section titled Participating in the Virtual Annual Meeting, above.
What
if I am a stockholder of record and return a proxy card but do not make specific choices?
You
should specify your choice for each matter on the proxy card. If you return a signed and dated proxy card without marking any voting
selections, your shares will be voted:
●
FOR
each of the nominees listed under Proposal No. 1; and
5
●
FOR
the ratification of KPMG as our independent registered public accounting firm under Proposal
No. 2;
If
any other matter is properly presented at the meeting, your proxy (the individual named on your proxy card) will vote your shares using
his or her best judgment.
What
if I am a beneficial owner and do not give voting instructions to my broker?
If
you fail to provide your broker with voting instructions at least ten days before the meeting, your broker may be unable to vote on the
non-discretionary matters. Your broker may use his or her discretion to cast a vote on any routine or discretionary matter.
What
does it mean if I receive more than one proxy card?
If
you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please
complete one of the available methods of voting for each control number you receive on each proxy card to ensure that all of your shares
are voted.
What
is householding?
The
Securities and Exchange Commission (the
SEC
) has adopted rules that permit companies and intermediaries such as
brokers to satisfy the delivery requirements for proxy materials with respect to two or more security holders sharing the same address
by delivering a single copy of the proxy materials addressed to those security holders. This process, which is commonly referred to as
householding, potentially means convenience for security holders and cost savings for companies.
A
number of brokers with account holders who are Arena Group stockholders will be householding our proxy materials. A single
copy of the proxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received
from the affected stockholders. Once you have received notice from your broker or us that they will be householding communications
to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, please
notify your broker and also notify us by sending your written request to our Investor Relations Firm, FNK IR LLC, c/o Robert Fink, 225
West 34th Street, 9th Floor, New York, NY 10122, or by calling 646.971.8899, and indicate you are a stockholder of The Arena Group Holdings,
Inc. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request householding
of their communications should also contact their broker and notify us in writing or by telephone.
Can
I revoke or change my vote after submitting my proxy?
Yes.
You can revoke your proxy at any time before the final vote at the Annual Meeting. You may revoke your proxy by:
●
submitting
a new proxy with a later date;
●
sending
written notice of revocation to our Corporate Secretary at The Arena Group Holdings, Inc.,
200 Vesey Street, 24th Floor, New York, New York, 10281, or the address listed for our principal
offices as set forth in our then-most recent filing with the SEC, in time for him to receive
it before the Annual Meeting; or
●
voting
electronically at the Annual Meeting. Simply participating virtually at the Annual Meeting
will not, by itself, revoke your proxy.
Who
will count votes?
Votes
will be counted by the inspector of elections appointed for the Annual Meeting. The inspector of elections will also determine the number
of shares of Common Stock outstanding, the voting power of each, the number of shares of Common Stock represented at the Annual Meeting,
the existence of a quorum, and whether or not the proxies and ballots are valid and effective.
6
What
is the quorum requirement?
A
majority of the issued and outstanding shares of Common Stock entitled to vote must be present at the Annual Meeting (virtually or represented
by proxy) in order for us to hold the Annual Meeting and conduct business. This is called a quorum. On the Record Date, there were an
aggregate of 47,448,047 outstanding shares of our Common Stock entitled to vote. Thus, 23,724,024 shares of Common Stock must be present
at the Annual Meeting (virtually or represented by proxy) to have a quorum.
Your
shares of Common Stock will be counted towards the quorum only if you submit a valid proxy or vote electronically at the Annual Meeting.
Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the shares of Common
Stock entitled to vote and present at the Annual Meeting (virtually or represented by proxy) may adjourn the meeting to another date.
No
rights of appraisal
There
are no rights of appraisal or similar rights of dissenters with respect to matters that are the subject of this proxy solicitation under
the laws of the State of Delaware, our Certificate of Incorporation, or our Second Amended and Restated Bylaws (our
Bylaws
).
How
can I find out the results of the voting at the Annual Meeting?
We
will announce preliminary voting results at the Annual Meeting. In addition, final voting results will be tallied by the inspector of
elections and will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the
Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after
the Annual Meeting, we intend to file a Form 8-K to publish the preliminary results within four business days after the Annual Meeting
and file an additional Form 8-K to publish the final results within four business days after the final results are known to us.
When
are stockholder proposals for the fiscal 2025 Annual Meeting due?
Stockholders
interested in presenting a proposal to be considered for inclusion in our proxy statement for the 2025 annual meeting of stockholders
(the
2025 Annual Meeting
) may do so by following the procedures prescribed in Rule 14a-8 under the Securities Exchange
Act of 1934, as amended (the
Exchange Act
), and our Bylaws. To be considered for inclusion, stockholder proposals
must be submitted in writing to Attention: Corporate Secretary, at the address listed for our principal offices as set forth in our then-most
recent filing with the SEC no later than July 21, 2025.
With
respect to proposals and nominations not to be included in our proxy statement for the 2025 Annual Meeting pursuant to Rule 14a-8 of
the Exchange Act, our Bylaws provide that stockholders who wish to nominate a director or propose other business to be brought before
the stockholders at an annual meeting of stockholders must be submitted in writing to Attention: Corporate Secretary, at the address
listed for our principal offices as set forth in our then-most recent filing with the SEC not later than the 45th day nor earlier than
the 75th day before the one-year anniversary of the date on which we first mail our proxy materials for the preceding years annual
meeting.
Stockholders
wishing to present nominations for director or proposals for consideration at the 2025 Annual Meeting under these provisions of our Bylaws
must submit their nominations or proposals in writing so that they are received by our Corporate Secretary at our principal executive
offices not earlier than September 4, 2025 and not later than October 4, 2025 in order to be considered. In the event that
the 2025 Annual Meeting is to be held on a date that is 30 days prior to or delayed by more than 60 days after the one-year anniversary
of the Annual Meeting, then, for notice by the stockholder to be timely, it must be so received by the Corporate Secretary not earlier
than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i)
the 90th day prior to such annual meeting or (ii) the tenth day following the day on which we first make a public announcement of the
date of the 2025 Annual Meeting.
To
comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees
for the 2025 Annual Meeting must provide notice to our Corporate Secretary at our principal executive offices that sets forth all information
required by Rule 14a-19 under the Exchange Act no later than October 13, 2025 (or, if the 2025 Annual Meeting is called for a date that
is not within 30 calendar days of the anniversary of the date of the 2024 Annual Meeting, then notice must be provided by the later of
60 calendar days prior to the date of the 2025 Annual Meeting or by the close of business on the tenth calendar day following the day
on which public announcement of the date of the 2025 Annual Meeting is first made).
How
do I get a copy of the exhibits filed with our Annual Report?
A
copy of our Annual Report, and our audited consolidated financial statements, were provided to you with this Proxy Statement. We will
provide copies of the exhibits filed with our Annual Report upon written request if you are a stockholder as of the Record Date. Requests
for such copies should be directed to J. Alex Wasserburger, Esq., our General Counsel, at the address listed for our principal offices
as set forth in our then-most recent filing with the SEC. In addition, copies of all of our electronically filed exhibits, including
our Bylaws, may be reviewed and printed from the SEC website at http://www.sec.gov.
7
PROPOSAL
NO. 1 ELECTION OF DIRECTORS
What
Am I Voting On?
Stockholders
are being asked to elect six directors: Carlo Zola, Christopher Petzel, Laura Lee, H. Hunt Allred, Christopher Fowler and Cavitt Randall
to serve for an additional one-year term ending at the annual meeting of stockholders following this Annual Meeting, or until their successors
have been duly elected and qualified. Carlo Zola, Christopher Petzel, Laura Lee, H. Hunt Allred, Christopher Fowler and Cavitt Randall
are all current members of our Board. Each of the nominees named below has been approved by our Board on recommendation from the Nominating
and Corporate Governance Committee (the
Nomination Committee
). The Nomination Committee has evaluated our governance
and leadership structure and determined that, at this time, the Company is best served by the Chief Executive Officer not serving as
a director as well. Accordingly, Ms. Silverstein is not being nominated as a director. As Chief Executive Officer, Ms. Silverstein
will still attend and play an active role in our board meetings.
If
any of the nominees becomes unable or unwilling to serve as a director before the Annual Meeting, an event which is not presently anticipated,
the appointed proxy may exercise discretionary authority to vote for substitute nominees proposed by the Board, or, if no substitute
is selected by our Board prior to or at the Annual Meeting, for a motion to reduce the present membership of our Board to the number
of nominees available.
Vote
Required and Voting Recommendation
The
six nominees receiving the most FOR votes from the holders of shares present at the Annual Meeting or represented by proxy
and entitled to vote will be elected as directors to hold office until the 2025 Annual Meeting. Only votes FOR ALL or FOR
ALL EXCEPT will affect the outcome. In an uncontested election, WITHHOLD votes will have no effect on the outcome
of the proposal and will not prevent a candidate from being elected. Broker non-votes will have no effect.
OUR
BOARD RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES IN THE ELECTION OF THE SIX DIRECTOR NOMINEES.
Board
and Committee Composition
Currently,
we have a Board comprised of seven directors, with each director serving until the expiration of the term for which he or she was elected
and until such directors successor is elected and qualified or until such directors earlier death, resignation or removal.
We anticipate having a board comprised of six directors after the Annual Meeting.
The
following table includes the names, ages and titles of our directors and executive officers as of November 8, 2024. Our directors are
elected to one-year terms by our stockholders at each annual meeting. Our executive officers are appointed by our Board. Each
executive officer holds his or her office until he or she resigns or is removed by our Board or his or her successor is appointed and
qualified.
Name
Age
Position(s)
Executive
Officers
Sara
Silverstein
43
Chief
Executive Officer
Paul
Edmondson
50
President,
Platform
Manoj
Bhargava
71
President
Geoffrey
Wait
37
Principal
Financial Officer
Non-Employee
Directors
H.
Hunt Allred
40
Director
(1)
Laura
Lee
49
Director
(2)
Christopher
Petzel
53
Director
(3)
Cavitt
Randall
47
Director
(4)
Christopher
Fowler
65
Director
Carlo
Zola
46
Director
(6)
(1)
Mr.
Allred is the Chair of our Compensation Committee and serves on our Nominating and Corporate
Governance Committee and our Special Transaction Committee.
(2)
Ms.
Lee is the Chair of our Audit Committee and serves on our Compensation Committee.
(3)
Mr.
Petzel is the Chair of our Special Transaction Committee and serves on our Audit Committee,
our Compensation Committee and our Nominating and Corporate Governance Committee.
8
(4)
Mr.
Randall was appointed Chairman of our Board of Directors on January 23, 2024. Mr. Randall
previously held the title of Chief Executive Officer from February 13, 2024 until April 19,
2024.
(5)
Mr.
Zola is the Chair of our Nominating and Corporate Governance Committee and serves on our
Audit Committee.
Biographical
and Related Information Director Nominees and Executive Officers
The
following is an overview of the biographical information for each of our director nominees and executive officers, including their age,
the year they became directors or officers, to the extent applicable, their principal occupations or employment for at least the past
five years, and certain of their other directorships.
Nominees
for Director
H.
Hunt Allred, 40,
has served as one of our directors since October 2021. Currently and since May 2017, Mr. Allred has served
as Director of Alternative Investments, leading investments on behalf of various Hunt Family entities, doing business as Petro-Hunt LLC.
The Hunt Family entities are primarily focused on investing in technology, healthcare, and other venture opportunities. Currently and
since June 2017, he also holds management positions with diversified investment firms RedCap Investments, LP and Mill Iron Operations,
and medical diagnostics technology company mLife Diagnostics. Previously, Mr. Allred held roles at hedge funds Citadel LLC, from December
2016 to April 2017, and Vollero Beach Capital Partners, from June 2012 to September 2016, where he focused on public equity investing
across the industrial, energy and utility sectors. Mr. Allred also previously served as an industrial public equity analyst at Aptigon
Capital, a division of Citadel LLC, from October 2016 to April 2017. He held various roles at Commerce Street Capital, a private equity
fund centered on investing in regional financial institutions. He began his career at ORIX USA, holding roles in both the corporate finance
group, financing sponsored backed leverage buyouts, and the real estate structured credit group, working out distressed real estate assets.
Mr. Allred received his Bachelor of Business Administration from Texas Christian University and M.B.A. from the University of Texas at
Austin. Because of his extensive investment experience across multiple asset classes, with expertise including private equity, public
equity, venture capital, credit origination, and structured credit resolutions, we believe Mr. Allred is qualified to serve as a director.
Laura
Lee, 49
, has served as a member of our Board since October 2021. Since November 2022, Ms. Lee has been employed by
Twitch, a video live streaming service, as its Chief Content Officer. Prior to this, she held the position of Senior Advisor at consulting
firm McKinsey Company, Inc., from August 2019 to November 2022, in addition to serving as an external adviser to growth companies
such as Xoogler.co, an organization focused on entrepreneurial ventures for Google alumni, from September 2018 to November 2022, and
SAAS membership platform for creators, Patreon Inc., from April 2018 to May 2020. Ms. Lee also previously held senior positions at various
media, technology, and consumer companies, including serving as Executive Vice President of Content, Strategy, and Operations at the
premiere media and entertainment company, NBC Universal Media LLC, during 2017, where she oversaw over $2 billion in key digital investments
and relationships with Snap Inc., BuzzFeed, Inc., Vox Media, Inc., and YouTube LLC (
YouTube
), new business opportunities,
and digital content production. From 2015 to 2016, Ms. Lee was the Chief Digital Officer and President of Media at Margaritaville Enterprises,
LLC (
Margaritaville
), Jimmy Buffetts lifestyle brand, where she grew Margaritavilles digital footprint
by 300% through original content and signed multi-million dollar deals for the new media business unit. From 2007 to 2015, Ms. Lee worked
at the internet media channel YouTube where she oversaw the North American Content division, launched the global transaction (VOD/EST)
business for YouTube and Google Play, and created the Global Top Creator team, which oversaw relationships with YouTubes digital-native
influencers. Prior to her time with YouTube, Ms. Lee held various roles at the mass media company Viacom Media Networks, Inc. from 2003
to 2007, including serving as Vice President of Business Development and Operations at its MTV Networks unit, where she launched VBS.TV,
a digital video business joint venture with Vice Media, (and oversaw the acquisition of Harmonix Music Systems, the developer of iconic
gaming hits Rock Band and Guitar Hero). From 2019-2022, Ms. Lee served on the board of MediaCo Holding Inc. (Nasdaq: MDIA) where she
chaired several committees, including Audit, Digital MA, and the COVID Task Force, and served on the Compensation Committee. She
formerly was an independent director on the board of American Apparel LLC, where she served on the Nominating and Corporate Governance
Committee. Ms. Lee also previously served on the board of WatchMojo, a top global entertainment network on YouTube (www.youtube.com/watchmojo).
Ms. Lee currently serves on the board of Womensphere, a social enterprise business focused on empowering women and girls globally. Ms.
Lee is a seasoned technology and media executive, advisor, and board director. She has been recognized for her industry expertise and
as a top executive by
Variety
, National Association of Corporate Directors,
Crains New York
, and
Multichannel
News
. Ms. Lee is a graduate of Brown University and Harvard Business School. We believe that her demonstrated experience corporate
finance, strategy, digital content and marketing, as well as in the technology and media industries qualifies her to serve as a director.
9
Christopher
Petzel, 53
, has served on our Board since October 2021. Mr. Petzel has broad entrepreneurial, corporate finance, and
public company board experience. He has been a managing director at Broadside Capital, LLC, a strategic advisory firm based in Puerto
Rico since January 2022, and a registered representative at Spartan Capital Securities, LLC, an investment bank in New York focused on
microcap IPOs, bridge financings and private placements since June 2023. Mr. Petzel has served as Chairman of Broadside Enterprises,
Inc. (OTC:BRSE), the operator of a digital multi-brand food delivery platform, since 2016, and as Chairman and CEO of Chancellor Group,
Inc. (OTC:CHAG), a small cap vehicle seeking acquisitions, since 2020. Previously, he served as Managing Director for predecessor companies
of Broadside Capital, LLC in Los Angeles from 2010 until December 2021. From August 2019 until December 2023, Mr. Petzel was co-founder
and Chairman at Byte to Bite Industries, Inc., a hospitality operator in Southern California, and, from 2001 to 2014, founder and CEO
of Fierce Entertainment, LLC, an independent production company which created a technology platform for major international film distributors.
During his tenure at Fierce, he financed several hundred million dollars of entertainment assets and produced films with major stars
including Sylvester Stallone, Jet Li, Jason Statham, Nicholas Cage, Jason Sudeikis and Shirley MacLaine. Prior to this, Mr. Petzel worked
for the technology, media, and telecommunications group at investment banking firm Houlihan Lokey in Los Angeles from 1999 until 2001.
Mr. Petzel commenced his career working for the media finance department of Berliner Bank AG and in international film finance and distribution
at Goldcrest Films International Ltd. in London. Mr. Petzel is fluent in German, English, French and Spanish. He studied finance and
economics at the Universities of Barcelona (Spain) and Fribourg (Switzerland), where he graduated summa cum laude in 1995. He holds FINRA
Series 7 (General Securities Representative), Series 63 (Uniform Securities Agent State Law) and Series 79 (Investment Banking Representative)
licenses. We believe that Mr. Petzel is qualified to serve as a director because of his experience with media, hospitality, technology,
and corporate finance, as well as his experience in building technology platforms and working with small cap public companies, including
with respect to their reporting requirements.
Cavitt
Randall, 47
, has served as one of our directors since December 2023 and as Chairman of the Board since January
23, 2024. Mr. Randall also served as our Chief Executive Officer from February 13, 2024 until April 19, 2024. Since August 2022,
Mr. Randall has served as the Chief Executive Officer of MBX Clearing LLC, an investment firm registered broker-dealer that self-clears
at Option Clearing Corporation (OCC). Prior to joining MBX Clearing LLC, from August 2018 to August 2022, Mr. Randall was the Chief Operating
Officer of SI Capital LLC prior to it changing its name to MBX Group LLC. Prior to SI Capital LLC, from June 2000 to August 2018, Mr.
Randall held various executive roles at GE Capital including roles as the Senior Vice President. Mr. Randall has over twenty years
experience in equity, options and debt trading and holds Series 24 (General Securities Principal), Series 57 (Securities Trader) and
FINRA SIE licenses. Mr. Randall holds a Bachelor of Arts in Finance from Michigan State University. We believe that Mr. Randall is qualified
to serve as a director given his executive leadership experience and over twenty years experience in capital markets.
Christopher
Fowler, 65
, has served on our Board of Directors since December 1, 2023. Mr. Fowler
has
served as the Chief Investment Officer of MBX Group, an investment firm where he is responsible for overseeing all investment activity
since 2015. MBX Group is an affiliate of Simplify. For 15 years, Mr. Fowler worked as a Managing Director at GE Capital. Prior, Mr. Fowler
worked at JPMorgan Chase Co. as a Senior Vice President of Leveraged Lending for 11 years. Mr. Fowler holds a Bachelor of Science
in Business/Industrial Engineering from the University of Southern California.
We believe that Mr. Fowler is qualified to serve
as a director given his executive leadership and investment experience.
Carlo
Zola, 46
, has served as a member of our Board since June 2021. Since January 2021, Mr. Zola has served as Partner and REIT Portfolio
Manager for Atlas Capital Team, L.P., a hedge fund, where he focuses on Real Estate and ESG investments, and where he was a founding
partner. Previously, Mr. Zola served as a principal of Warlock Partners, LLC (
Warlock
) and as a principal of Roundtable
Media L.L.C. From January 2020, Mr. Zola served as a founding partner at Percival Ventures, an investment firm focused on early stage
blockchain investments and cryptocurrencies. He was also previously a founding partner at Paladin Trust, a leading trust and custodian
business dedicated to cryptocurrency markets. Additionally, Mr. Zola worked for 13 years in various positions as an analyst and portfolio
manager in the Los Angeles, New York, Toronto and London offices of Capital Group, a large multi-national fund management company with
over $2 trillion in assets under management, with responsibilities including managing a portfolio of over $1 billion in assets, and with
a focus on global and fixed income asset portfolios as well as asset portfolios in Media, Metals and Mining, Chemicals and Real Estate
(REITs). During his last three years at Capital Group, Mr. Zola also served as its Research Portfolio Coordinator (RPC) overseeing diverse
investments and, during his tenure with Capital Group, Mr. Zola successfully managed a team of over 20 analysts for one of its growth
and income funds. Mr. Zola started his professional career working as a research analyst at Intermonte SIM in Milan, a leading independent
Italian investment bank. Mr. Zola is an investment professional with over 19 years of active experience in the financial markets. Mr.
Zola earned a B.A. in Economics from Bocconi University in Milan, Italy, where he graduated
summa cum laude
, and a Masters
degree in Management from CEMS, the Community of European Management Schools, in Barcelona, Spain. We believe that Mr. Zola is qualified
to serve as a director because of his extensive financial market experience.
10
Executive
Officers Who Do Not Serve as Directors
Sara
Silverstein
has served as our Chief Executive Officer since April 19, 2024. Ms. Silverstein previously served as General Manager
- Finance Arena of the Company since November 2021. Prior to that, she was Executive Editor at Business Insider from 2013 to 2020. Ms.
Silverstein started her career at a hedge fund and has been working in the media industry for the past 14 years, including other positions
with Bloomberg Media. Ms. Silverstein has a bachelors degree in mathematics from the University of Colorado and an MBA from the
University of Chicago Booth School of Business.
Paul
Edmondson
has served as our President of Platform since February 2021, when we split our President role into two separate officer
roles. As President of Platform, Mr. Edmondson currently oversees our Platform business, which offers the core content management system,
programmatic advertising technology and multitenant subscription stack for publishers serving partner publishers and our owned and operated
properties. As part of his responsibilities, Mr. Edmondson also oversees our Adventure Network and HubPages properties. Prior to this
appointment, he had served as our President since October 2019. Prior to that, Mr. Edmondson served as our Chief Operating Officer from
August 2018 to December 2019. Mr. Edmondson joined our Company in January 2018 with our acquisition of HubPages, Inc. (HubPages),
where he had served as Founder and Chief Executive Officer since 2006. Prior to HubPages, he served as the Group Product Manager for
Microsoft Corporations MSN Entertainment, having joined Microsoft Corporation in 2000 through its acquisition of MongoMusic, Inc.
Prior thereto, he developed applications for Hewlett-Packard Company.
Manoj
Bhargava
has served as President of the Company since April 26, 2024. Previously, Mr. Bhargava served as the
Companys Interim Chief Executive Officer from December 11, 2023 until January 4, 2024 and as Co-President from February 16,
2024 through April 26, 2024. Mr. Bhargava is the control person of Simplify Inventions LLC, a Delaware limited liability company (Simplify).
Mr. Bhargava is the Founder of Innovation Ventures LLC (5-hour ENERGY) and has served as its Chief Executive Officer since its
inception. Mr. Bhargava founded 5-hour ENERGY in 2000 and has grown 5-hour ENERGY to annual retail sales over $1 billion. Mr.
Bhargava has extensive management, operations and marketing experience, which he has applied to numerous new business start-ups
including a water filtration company, an RD shop and an investment company. Mr. Bhargava is a distinguished philanthropist and
the founder of several charities.
Geoffrey
Wait
was appointed as the Principal Financial Officer of The Arena Group Holdings, Inc. (the Company). Mr. Wait has
served as a senior financial advisor to the Company since June 2024 and, from April 2024 through June 2024, served as Controller of Simplify
Inventions, LLC, an affiliate of the Company (Simplify). Prior to that, he served in various capacities at American Axle
Manufacturing, Inc. beginning in 2016, including most recently as Plant Finance Manager since March 2019. Mr. Wait began his career
at Grant Thornton LLP where he served most recently as a Manager. He has a Bachelor of Arts Accounting and a Master of Science
Accounting, both from Michigan State University and is a Certified Public Accountant.
Family
Relationships
There
are no family relationships among any of our directors or executive officers.
Involvement
in Certain Legal Proceedings
None
of our directors, director nominees, and executive officers has been involved in any legal or regulatory proceedings, as set forth in
Item 401 of Regulation S-K, during the past ten years.
11
CORPORATE
GOVERNANCE
Director
Qualifications
The
Nomination Committee determines the qualifications, qualities, skills, and other expertise required to be a director and to develop,
and recommend to our Board for its approval, criteria to be considered in selecting nominees for director. The Nomination Committee and
our Board believe that at this time, it is unnecessary to adopt criteria for the selection of directors. Instead, the Nomination Committee
and our Board believe that the desirable background of a new individual member of our Board may change over time and that a thoughtful,
thorough selection process is more important than adopting criteria for directors.
Meetings
of the Board and its Committees
The
Board has an Audit Committee, a Compensation Committee, and a Nomination Committee. The entire Board met 7 times, including regularly
scheduled and special meetings, during fiscal year 2023. The Audit Committee met 5 times, the Compensation Committee met 4 times, and
the Nomination Committee met zero times, during fiscal year 2023. All directors attended at least 75% of the aggregate of our Board meetings
and meetings of all committees on which they served. We held our last annual stockholders meeting on June 1, 2023. When we hold
annual stockholders meetings, it is our policy that all of our directors are required to make a concerted and conscientious effort
to attend our annual stockholders meeting in each year during which that director serves as a member of our Board. All of our
directors then serving attended our 2023 annual meeting of stockholders.
Audit
Committee.
The Audit Committee currently consists of Laura Lee (Chair), Christopher Petzel and Carlo Zola. The Audit Committee
met 5 times during fiscal year 2023. The meetings included discussions with management and with our independent registered public accounting
firm to discuss our interim and annual financial statements and our annual report, and the effectiveness of our financial and accounting
functions and organization. The Audit Committee acts pursuant to a written charter adopted by our Board, a copy of which can be accessed
at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information on or accessible through our website
is not incorporated by reference in this Proxy Statement.
The
Audit Committee assists our Board in fulfilling its responsibility to oversee (i) the integrity of our financial statements, our accounting
and financial reporting processes and financial statement audits, (ii) our compliance with legal and regulatory requirements, (iii) our
systems of internal control over financial reporting and disclosure controls and procedures, (iv) the independent auditors engagement,
qualifications, performance, compensation, and independence, (v) review and approval of related party transactions, and (vi) the communication
among our independent auditors, our financial, and senior management and our Board. Our Board has determined that the Audit Committee
is comprised entirely of independent members who meet the requirements for independence under the NYSE American listing standards and
SEC rules and regulations. Our Board has determined that Ms. Lee, the Chair of the Audit Committee, is an audit committee financial
expert as defined under SEC rules.
Compensation
Committee.
The Compensation Committee currently consists of H. Hunt Allred (Chair), Christopher Petzel, and Laura Lee. The Compensation
Committee met 4 times during fiscal year 2023. The Compensation Committee acts pursuant to a written charter adopted by our Board, a
copy of which can be accessed at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information on or accessible
through our website is not incorporated by reference in this Proxy Statement.
The
purpose of the Compensation Committee is to evaluate, recommend, approve, and review our executive officer and director compensation
arrangements, plans and programs and to administer our cash-based and equity-based plans for employees and consultants. The Compensation
Committees principal functions are to: (i) review and recommend to our Board for approval all forms of our non-equity and equity-based
compensation of executive officers and directors; and (ii) administer our equity-based compensation plans, including administering the
2022 Stock and Incentive Plan (our
2022 Plan
), pursuant to which various types of incentive awards, including, without
limitation, stock options, restricted stock awards, stock appreciation rights, and stock units may be granted to our directors, executive
officers, and key employees. The Compensation Committee is responsible for evaluating executive compensation, including equity awards
for all of our executive officers, setting base salary amounts, fixing incentive opportunity levels, and other supplemental benefits.
This includes reviewing and making recommendations to our Board regarding corporate goals and objectives relevant to the compensation
of Chief Executive Officer and all other executive officers that report to him, evaluating, at least annually, the performance of these
officers in light of these goals and objectives, and reviewing and making recommendations to our Board regarding the compensation level
of these officers based on such evaluation.
The
Compensation Committee also annually reviews director compensation to ensure non-employee directors are adequately compensated for the
time expended in fulfilling their duties to us, as well as the skill-level required by us of members of our Board. From time to time
as the Compensation Committee deems appropriate or as requested by our Board, the Compensation Committee evaluates director compensation
arrangements and makes recommendations to our Board accordingly.
12
The
Compensation Committee is authorized to engage compensation consultants, if they deem necessary, to assist with the Compensation Committees
responsibilities related to our executive compensation program and the director compensation program.
Our
Board has determined that the Compensation Committee is comprised entirely of independent members who meet the requirements for independence
under the NYSE American listing standards and SEC rules and regulations.
Nomination
Committee.
The Nomination Committee currently consists of Carlo Zola (Chair), Christopher Petzel, and H. Hunt Allred. The Nomination
Committee did not meet separately during fiscal year 2023. The Nomination Committee acts pursuant to a written charter adopted by our
Board, a copy of which can be accessed at https://investors.thearenagroup.net/corporate-governance/documents-and-charters. Information
on or accessible through our website is not incorporated by reference in this Proxy Statement.
The
purpose of the Nomination Committee is to exercise general oversight with respect to the governance of our Board by (i) identifying,
reviewing the qualifications of, and recommending to our Board proposed nominees for election to our Board, consistent with criteria
approved by our Board, and (ii) selecting, or recommending that our Board select, the director nominees for the next annual meeting of
stockholders. The Nomination Committee provides advice, counsel, and direction to management on the basis of the information it receives,
discussions with management, and the experience of the Nomination Committee members.
Our
Board has determined that the Nomination Committee is comprised entirely of independent members who meet the requirements for independence
under the NYSE American listing standards and SEC rules and regulations.
Nominations
Process and Criteria
The
Nomination Committee determines the qualifications, qualities, skills, and other expertise required to be a director and to develop,
and recommend to our Board for its approval, criteria to be considered in selecting nominees for director. The Nomination Committee and
our Board believe that at this time, it is unnecessary to adopt criteria for the selection of directors. Instead, the Nomination Committee
and our Board believe that the desirable background of a new individual member of our Board may change over time and that a thoughtful,
thorough selection process is more important than adopting criteria for directors.
The
Nomination Committee will also identify, recruit, and screen candidates for our Board, consistent with criteria approved by our Board.
The Nomination Committee and our Board are fully open to utilizing whatever methodology is efficient in identifying new, qualified directors
when needed, including industry contacts of our directors or professional search firms. The Nomination Committee also considers any director
candidates recommended by our stockholders pursuant to the procedures described in this Proxy Statement and any nominations of director
candidates validly made by stockholders in accordance with applicable laws, rules, and regulations, and the provisions of our charter
documents. In recommending candidates for nomination, the Nomination Committee considers candidates recommended by directors, officers,
employees, stockholders, and others, using the same criteria to evaluate all candidates. Evaluations of candidates generally involve
a review of background materials, internal discussions, and interviews with selected candidates as appropriate.
There
were no fees paid or due to third parties in fiscal year 2023 to identify or evaluate, or to assist in evaluating or identifying, potential
director nominees. For purposes of the Annual Meeting, the Nomination Committee recommended seven incumbent directors as nominees for
re-election to our Board, and our Board approved the nominees for inclusion in this Proxy Statement.
Any
stockholder wishing to propose that a person be nominated for or appointed to our Board may submit such a proposal, according to the
procedure described above in the section titled Questions And Answers About The Annual Meeting And Procedural Matters to:
Corporate Secretary, The Arena Group Holdings, Inc., at the address for our principal offices as set forth in our then-most recent filing
with the SEC.
Director
Independence
As
our Common Stock is currently listed for trading on the NYSE American, we have evaluated independence in accordance with the rules of
the NYSE American Company Guide and the SEC with respect to each director and director nominee. Our Board undertook a review of the independence
of the members of our Board and considered whether any director has a material relationship with us that could compromise his or her
ability to exercise independent judgment in carrying out his or her responsibilities. Based upon the information requested from and provided
by each director concerning their background, employment, and affiliations, including family relationships, our Board has determined
that each of the following non-employee directors are independent as that term is defined under the rules of the NYSE American Company
Guide.
13
Laura
Lee
Carlo
Zola
H.
Hunt Allred
Christopher
Petzel
In
making these determinations, our Board considered the current and prior relationships that each non-employee director has with us and
all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of
capital stock by each non-employee director, and the transactions involving their affiliates described in the section of this Proxy Statement
entitled Related Party Transactions.
All
of the members of the Audit, Nomination, and Compensation Committees are also independent.
Based
on these standards, our Board determined Cavitt Randall and Chris Fowler were not independent.
Our
Board has adopted a Business Code of Ethics and Conduct (
Code of Ethics
) that applies to our executive officers,
directors, and other employees as well as a Code of Ethics for Finance Officers (the
Senior Code of Ethics
) which
applies to our financial officers. Copies of the Code of Ethics and the Senior Code of Ethics may be accessed on our website at https://investors.thearenagroup.net/corporate-governance/documents-and-charters.
Information on or accessible through our website is not incorporated by reference in this Proxy Statement. We intend to disclose future
amendments to our Code of Ethics and the Senior Code of Ethics, or any waivers of such codes, on our website or in public filings.
Related
Party Transactions
When
we are contemplating entering into any transaction in which any executive officer, director, director nominee, or any family member of
the foregoing would have any direct or indirect interest, regardless of the amount involved, the terms of such transaction have to be
presented to the Audit Committee (other than any interested director) for approval or disapproval. Our Audit Committee has not adopted
a written policy for reviewing related party transactions but when presented with such transaction, the transaction is discussed by our
Audit Committee and documented in its meeting minutes.
The
Code of Ethics also requires our employees, officers, and directors to provide prompt and full disclosure of all potential conflicts
of interest to the appropriate person. These conflicts of interest may be specific to the individual or may extend to his or her family
members. Any officer who has a conflict of interest with respect to any matter is required to disclose the matter to our Compliance Director,
or in the case of the CFO, to the Audit Committee. All other employees are required to make prompt and full disclosure of any conflict
of interest to the Head of Internal Audit (who is our CFO, unless our Board designates some other person). Directors are required to
disclose any conflict of interest to the Chairman of our Board and to refrain from voting on any matter(s) in which they have a conflict.
Employees and officers are not permitted to participate in any matter in which he or she has a conflict of interest unless authorized
by an appropriate Company official and under circumstances that are designed to protect the interests of the Company and its stockholders
and to avoid any appearance of impropriety. In addition, directors and executive officers are required to disclose, in an annual questionnaire,
any current or proposed conflict of interests (including related party transactions).
Except
as disclosed below, since January 1, 2022, there were no current or proposed transaction or series of similar transactions in which (i)
the amounts involved exceeded or will exceed $120,000 and (ii) any of our directors, nominees for director, executive officers, or beneficial
holders of more than 5% of any class of our outstanding capital stock, or any immediate family member of, or person sharing the household
with, any of these individuals or entities, had or will have a direct or indirect material interest.
14
Financings
We
have an outstanding obligation with Renew Group Private Limited, an affiliated entity of Simplify Inventions, LLC, our largest stockholder,
where Renew purchased the all the outstanding debt held by BRF Finance Co., LLC (BRF) an affiliated entity of B. Riley
Financial, Inc. (B. Riley), who now holds the debt in its capacity as agent for the purchasers and as purchaser, pursuant
to the third amended and restated note purchase agreement entered into on December 15, 2022 (the Note Purchase Agreement),
as amended by the first amendment to the Note Purchase Agreement on August 14, 2023 (the First Amendment) with an effective
date of August 31, 2023, as further amended by the second amendment to the Note Purchase Agreement on December 1, 2023 (the Second
Amendment), as further amended by the third amended and restated note purchase agreement on July 12, 2024 (the Third
Amendment). The Note Purchase Agreement contains provisions related to the 2023 Notes, Senior Secured Notes, Delayed Draw
Term Notes and 2022 Bridge Notes, all as further described in Notes 18 and 19 to our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2023, and collectively referred to as the Notes and subsequent
quarterly reports on Form 10-Q. Under the terms of the Note Purchase Agreement, First Amendment, Second Amendment and Third
Amendment, in the event there is a mandatory prepayment requirement, the principal payment of the Notes will be applied to: (1) the
2023 Notes until paid in full; (2) then to the 2022 Bridge Notes until paid in full; (3) then to the Delayed Draw Terms Notes until paid
in full; and (4) then to the Senior Secured Notes. All borrowings under the Notes are collateralized by substantially all of our assets
secured by liens and guaranteed by our subsidiaries. The Notes provide for a default interest rate equal to 10.0%, along with
other provision for acceleration of the Notes under certain conditions. The Notes provide for certain affirmative covenants, including
certain financial reporting obligations.
On
August 19, 2024, the Company entered into an amended and restated promissory note (the Amended Promissory Note), in connection
with the amendment to the March 13, 2024 working capital loan agreement with Simplify (the Simplify Loan), pursuant to
which the Company has available up to $50,000 (originally $25,000) at ten percent (10.0%) interest rate per annum (the Applicable
Interest Rate), payable monthly in arrears with a maturity on December 1, 2026 (originally March 13, 2026). The Simplify Loan
is secured by certain assets of the Company and its subsidiaries, which are also guarantors of the obligations. In connection with the
Amended Promissory Note, on August 19, 2024, the Company and Simplify also entered into a common stock purchase agreement (the Common
Stock Purchase Agreement), whereby $15,000 of outstanding indebtedness under the Simplify Loan was exchanged shares of the Companys
common stock. In the event of a default, including but not limited to the failure to pay any amounts when due, the interest will accrue
at the Applicable Interest Rate plus five percent (5.0%) and the Simplify Loan will be payable upon demand by Simplify. As of September
30, 2024, the balance outstanding on the Simplify Loan was $1,100.
On
November 30, 2023, Simplify entered into a stock purchase and assignment agreement (the Stock Purchase Agreement), pursuant
to which it purchased an aggregate of 10,512,236 shares of our common stock for aggregate consideration of $30,485 on December 1, 2023
from B. Riley and other affiliated entities of B. Riley and certain other sellers (collectively the Sellers), resulting
in Simplify becoming a principal stockholder and the Sellers no longer owning any of our common stock.
On
November 30, 2023, Renew, and BRF, an affiliate of the Sellers, entered into a securities purchase and assignment agreement (the Debt
Purchase Agreement), pursuant to which BRF sold and assigned to Renew all of BRFs rights, duties, liabilities and obligations
pursuant to the Note Purchase Agreement, as amended, and the Notes purchased thereunder and the collateral securing such Notes on December
1, 2023, resulting in BRF no longer holding any of our debt securities. The aggregate principal balance under the Notes was $110,691
at the time of purchase by Renew.
For
the years ended December 31, 2023, we paid in cash interest of $9,068 on the Notes due to BRF.
For
the year ended December 31, 2023, we incurred interest of $2,797 for the period from October 1, 2023 to December 31, 2023 on the Notes
held by Renew, where we defaulted on the payment of $2,797 interest due on December 29, 2023.
On
March 31, 2023, in connection with the registered direct offering, we entered into common stock purchase agreements for 1,009,021 shares
of our common stock for a total of $3,915 in gross proceeds with B. Riley at a price per share of $3.88 per share.
On
August 10, 2023, the Series H Preferred Stock automatically converted into shares of our common stock at the conversion price of $7.26
per share, of which 134,550 shares were issued to B. Riley.
On
August 31, 2023, September 29, 2023 and November 27, 2023, in connection with the 2023 Notes, BRF issued $5,000, $1,000 and $2,000, respectively,
in aggregate principal amount under the 2023 Notes, where we incurred fees of $357.
Registered
Direct Offering
On
March 31, 2023, in connection with a registered direct offering, we entered into common stock purchase agreements for 317,518 shares
of our common stock for a total of $1,232 in gross proceeds with certain directors and affiliates, at a price of $3.88 per share, as
follows: (i) 64,000 shares for $248 to H. Hunt Allred, a director, through certain trusts (32,000 shares are directly beneficially owned
by the Allred 2002 Trust - HHA and 32,000 shares are directly beneficially owned by the by Allred 2002Trust - NLA); (ii) 195,529 shares
for $759 to 180 Degree Capital Corp.; (iii) 25,773 shares for $100 to Daniel Shribman, a former director; (iv) 25,773 shares for $100
to Ross Levinsohn, a former director and executive officer; and (v) 6,443 shares for $25 to Paul Edmonson, an executive officer.
Board
Leadership Structure and Role in Risk Oversight
Board
Leadership Structure
We
currently separate the roles of Chief Executive Officer and Chairman because we believe this arrangement is appropriate for the interests
of the Company. Our Board does not have a policy regarding the separation of the roles of Chairman and Chief Executive Officer, as the
Board believes it is in our stockholders best interests that we make this determination based on an assessment of the current
condition of our Company and composition of the Board. Our Board believes that having these roles separated is in the best interests
of our stockholders at this time to help ensure board continuity and oversight. As noted in Proposal One, we do not plan for our Chief
Executive Officer to be a member of the board after the Annual Meeting
15
Role
of our Board in Risk Oversight
Our
Board is responsible for the oversight of our operational risk management process. Our Board has delegated authority for addressing certain
risks, and accessing the steps management has taken to monitor, control, and report such risks, to our Audit Committee. Such risks include
risks relating to execution of our growth strategy, the effects of the global economy and general financial condition and outlook on
our business, and costs of reliance on external advisors. The Audit Committee then reports such risks as appropriate to our Board. Our
Board initiates discussions with appropriate members of our senior management if, after discussion of such risks, our Board determines
that such risks raise questions or concerns about the status of operational risks then facing us.
Our
Board relies on our Compensation Committee to address significant risk exposures we face with respect to compensation, including risks
relating to retention of key employees, management succession, and benefit costs, and, when appropriate, reports these risks to the full
Board.
Cybersecurity
Risk Oversight
Securing
the information of our users, customers, employees, partners, and other third parties is important to us. We have adopted physical, technological,
and administrative controls on data security, and have a defined procedure for data incident detection, containment, response, and remediation.
While everyone at the Company plays a part in managing these risks, oversight responsibility is shared by our Board, our Audit Committee,
and management.
The
Audit Committee of the Board of Directors oversees managements processes for identifying and mitigating risks, including cybersecurity
risks. Our VP of Information Security regularly briefs senior leadership on our cybersecurity and information security posture including
on the prevention, detection, mitigation, and remediation of cybersecurity incidents, and senior leadership will then brief the Audit
Committee. We also maintain information security risk insurance coverage.
Oversight
of Corporate Strategy
Our
Board actively oversees managements establishment and execution of corporate strategy, including major business and organizational
initiatives, annual budget and long-term strategic plans, capital allocation priorities, potential corporate development opportunities,
and risk management. At its regularly scheduled meetings and throughout the year, our Board receives information and formal updates from
our management and actively engages with the senior leadership team with respect to our corporate strategy. Our Boards diverse
skill set and experience enhances their ability to support management in the execution and evaluation of our corporate strategy.
Stockholder
Communications with our Board
Stockholders
and other parties interested in communicating directly with our Board, a committee of our Board, or any individual director, may do so
by sending a written communication to the attention of the intended recipient(s) in care of the Corporate Secretary, The Arena Group
Holdings, Inc., at the address for our principal offices set forth in our then-most recent filing with the SEC. All stockholder communications
we receive that are addressed to our Board will be reviewed and compiled by our Corporate Secretary and provided to the members of our
Board, as appropriate and in accordance with our internal policies. If the correspondence is not addressed to a particular director,
such correspondence will be forwarded, depending on the subject matter, to the Chair of the Audit Committee, Compensation Committee,
or Nominations Committee. Sales materials, abusive, threatening, or otherwise inappropriate materials and items unrelated to the duties
and responsibilities of our Board will not be provided to our directors.
16
SECURITY
OWNERSHIP OF
CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Common
Stock
The
following table sets forth information regarding beneficial ownership of our Common Stock by: (i) each person who is known by us to beneficially
own more than 5% of our Common Stock; (ii) our directors and our named executive officers; and (iii) all of our directors and executive
officers as a group.
Name and Address of Beneficial Owner
*
Amount and Nature of Beneficial Ownership
(1)
Percent of Class
(2)
Five Percent Stockholders:
Simplify Inventions, LLC
(3)
33,865,608
71.37
%
James C. Heckman
(4)
2,757,199
5.81
%
Directors and Named Executive Officers:
Sara Silverstein
(5)
76,167
**
Geoffrey Wait
-
-
Ross Levinsohn
(6)
288,873
**
%
Manoj Bhargava
(3)
33,865,608
Grady Tripp
(7)
6,635
**
Avi Zimak
(8)
220,768
**
Henry Robertson Barrett
-
-
H. Hunt Allred
(9)
280,370
**
Laura Lee
(10)
52,414
**
Christopher Petzel
(11)
46,644
**
Carlo Zola
(12)
51,211
**
Cavitt Randall
(13)
183,049
**
Christopher Fowler
(14)
49,619
**
Kathryn Kulik
(15)
70,000
-
Directors and Executive Officers, as a group (14 persons)
35,191,358
74.2
%
*
the
address for each person listed above is 200 Vesey Street, 24th Floor, New York, New York,
10281, unless otherwise indicated.
**
Less
than 1.00%.
1.
Unless
otherwise indicated, each person has sole investment and voting power with respect to the
shares indicated, subject to community property laws, where applicable. Includes any securities
that such person has the right to acquire within sixty (60) days of October 18, 2024, pursuant
to options, warrants, conversion privileges, or other rights.
2.
Percentage
calculated in accordance with Rule 13(d)-3(d)(1)(i) promulgated under the Exchange Act and
based on 47,448,047 shares of our common stock issued and outstanding as of October 18, 2024.
3.
Shares
of our common stock beneficially owned consist of 33,865,608 shares held by Simplify Inventions,
LLC; Manoj Bhargava is the control person for Simplify Inventions, LLC. Mr. Bhargava is deemed
to be beneficially own all of the shares of Simply Inventions, LLC. address for this stockholder
is 38955 Hills Tech Drive, Farmington Hills, MI 48331.
4.
Shares
of our common stock beneficially owned consist of 2,757,199 shares held in book entry form
by the below referenced persons that, according to a Schedule 13D filed on January 25, 2024,
formed a voting group with respect to Company securities beneficially owned by such persons:
Warlock Partners, LLC, The Roundtable LLC, Series 1111, Brock Pierce, Mark Strome and James
Heckman. Mr. Heckman is the CEO of Roundtable Media. The Roundtable LLC, Series 1111 is the
manager of Warlock Partners, LLC. Includes shares underlying currently exercisable stock
options received by Mr. Heckman when he served as our Chief Executive Officer. The address
for this investor is c/o Roundtable Media, 4300 University Way NE, Suite C, Seattle, WA 98105.
5.
Consists
of the following securities directly beneficially owned by Ms. Silverstein: (i) 59,879 shares
of our Common Stock; and (ii) 16,288 shares of our common stock issuable upon the exercise
of options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
6.
The
securities reported in this row consist of 288,873 shares of our common stock directly beneficially
owned by Mr. Levinsohn, according to the Companys transfer agent records.
17
7.
Consists
of the following securities directly beneficially owned by Mr. Tripp: (i) 6,635 shares of
our Common Stock.
8.
Consists
of the following securities directly beneficially owned by Mr. Zimak: (i) 38,604 shares of
our Common Stock; and (ii) 182,164 shares of our common stock issuable upon the exercise
of options which are vested as of October 18, 2024.
9.
Consists
of the following securities: (i) 58,030 shares of our common stock directly beneficially owned
by Mr. Allred; (ii) 6,731 shares of our common stock issuable upon the settlement of restricted
stock units which may be acquired by Mr. Allred within 60 days following October 18, 2024;
(iii) 75,479 shares of our common stock directly beneficially owned by the Allred 2002 Trust
- HHA (the HHA Trust); (iv) 75,479 shares of our common stock directly beneficially
owned by the Allred 2002 Trust - NLA (the NLA Trust); and (v) 64,651 shares
of our common stock directly beneficially owned by Redcap Investment, LP (RedCap
and, together with the HHA Trust and the NLA Trust, the Investment Entities).
The trustee of the HHA Trust and the NLA Trust is Mr. Allreds spouse, and Mr. Allred
and his sister, respectively, are beneficiaries of the HHA Trust and the NLA Trust. The general
partner of RedCap is Redcap Investments Management, LLC, of which Mr. Allred serves as President.
Mr. Allred may be deemed to exercise voting and investment discretion with respect to shares
of our common stock owned by the Investment Entities. Additionally, of the aforementioned
securities, 1,138 shares of our common stock may under certain circumstances be pledged as
security pursuant to an account agreement that Mr. Allred has entered into in connection
with his brokerage trading account.
10.
Consists
of the following securities directly beneficially owned by Ms. Lee: (i) 45,683 shares of
our common stock; and (ii) 6,731 shares of our common stock issuable upon the exercise of
options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
11.
Consists
of the following securities directly beneficially owned by Mr. Petzel: (i) 39,913 shares
of our common stock; and (ii) 6,731 shares of our common stock issuable upon the exercise
of options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
12.
Consists
of the following securities directly beneficially owned by Mr. Zola: (i) 44,480 shares of
our common stock; and (ii) 6,731 shares of our common stock issuable upon the exercise of
options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
13.
Consists
of the following securities directly beneficially owned by Mr. Randall: (i) 178,811 shares
of our common stock; and (ii) 4,238 shares of our common stock issuable upon the exercise
of options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
14.
Consists
of the following securities directly beneficially owned by Mr. Fowler: (i) 45,381 shares
of our common stock; and (ii) 4,238 shares of our common stock issuable upon the exercise
of options or the settlement of restricted stock units which may be acquired within 60 days
following October 18, 2024.
15.
Consists
of the following securities directly beneficially owned by Ms. Kulik: (i) 70,000 shares of
our common stock.
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires our officers, directors, and persons who own more than ten percent of a class of our equity securities
registered pursuant to Section 12 of the Exchange Act to file with the SEC certain reports concerning beneficial ownership, and changes
thereto. Officers, directors, and ten-percent stockholders are required by regulation to furnish us with copies of all Section 16(a)
forms they file. Based solely on a review of copies of the reports furnished to us and written representations from persons concerning
the necessity to file these reports, we believe that all reports required to be filed pursuant to Section 16(a) of the Exchange Act during
fiscal year 2023 were filed with the SEC on a timely basis, except for the following:
Allred
Due
to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on March 31, 2023
Levinsohn
Due
to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on March
31, 2023
Zola
Due
to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023
Petzel
Due
to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023
Lee
Due
to inadvertent error, an RSU grant issued on January 1, 2023 was reported late on a Form 4 filed on April 10, 2023.
Barrett
Due
to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on April
28, 2023.
Kraft
Due
to inadvertent error, the withholding of shares for tax withholding on March 6, 2023 was reported late on a Form 4 filed on November
6, 2023.
Kulik
Due
to administrative issues, a Form 3 was not filed for Ms. Kulik upon his start date or prior to her departure from Company, and a
Form 4 was not filed to report an option granted on November 23, 2023.
Tripp
Due
to administrative issues, a Form 3 was not filed for Mr. Tripp upon his start date or prior to his departure from Company, and a
Form 4 was not filed to report an option granted on January 1, 2023.
18
EXECUTIVE
COMPENSATION
Named
Executive Officers
For
fiscal year 2023, our named executive officers were as follows:
●
Ross
Levinsohn, Former Chief Executive Officer and Chairman
●
Manoj
Bhargava, Former Interim Chief Executive Officer
●
Grady
D. Tripp, Former Senior Vice President and Chief People Officer
●
Kathryn
Kulik, Former Chief Revenue Officer
●
Avi
Zimak, Former Chief Revenue and Strategy Officer
●
Henry
Robertson Barrett, Former President, Media
Compensation
Philosophy and Objectives
Our
compensation policy is designed to attract and retain qualified key executive officers critical to our achievement of our growth and
long-term success. To attract, retain, and motivate the executive officers to accomplish our business strategy, the Compensation Committee
of our Board of Directors establishes our executive compensation policies and oversees our executive compensation practices. We provide
what we believe is a competitive total compensation package to our management team through a combination of base salary, bonuses and
equity awards.
Elements
of our Executive Compensation and Benefits Programs
Base
Salary
The
Compensation Committee considers what salaries must be paid in order to attract and retain high-quality executive officers. We annually
review our executive officers base salaries and make adjustments only when necessary based on individual and Company performance.
We provide a minimum, fixed level of cash compensation to reflect the level of accountability of talented executive officers who can
continue to improve our overall performance. In addition, salary is based on experience, industry knowledge, duties and scope of responsibility,
as well as the competitive market for talent.
Annual
Bonus Opportunity
Our
named executive officers are eligible for annual cash-based bonus payments that are based on the achievement of certain individual and
Company performance metrics. We use the annual performance bonus opportunity to motivate our named executive officers to achieve our
business goals. The annual performance bonus opportunity provides payments if our named executive officers produce short-term results
that meet or exceed certain pre-established annual financial targets or individual performance goals in effect as determined from time
to time by us and approved by the Compensation Committee.
Incentive
Compensation
Equity
awards under the 2022 Stock and Equity Compensation Plan (the 2022 Plan) are a vital piece of our total compensation package.
Equity awards are intended to compensate named executive officers for sustained long-term performance, align the interests of our named
executive officers and stockholders, and encourage retention through multi-year vesting schedules. Equity incentive awards may take a
variety of forms. Levels, mix, and frequency of awards are determined by the Compensation Committee, and are designed to reflect each
recipients level of responsibility and performance.
19
Retirement
Benefits
We
offer a qualified 401(k) defined contribution plan. All of our employees are eligible to participate in this plan, including our named
executive officers, subject to limitations imposed by the Internal Revenue Code of 1986, as amended. We currently match 100% of contributions
made by participants in the 401(k) up to 4% of eligible annual compensation.
Other
Compensation
In
2022 and 2023, we provided our employees, including each of our named executive officers, with health insurance coverage.
Hedging
Policy and Pledging of Securities
Pursuant
to our Insider Trading Policy, our employees, officers, and directors cannot engage in hedging transactions related to our securities.
Employees, officers, and directors are also prohibited from holding our securities in a margin account or otherwise pledging our securities
as collateral for a loan.
Summary
Compensation Table
The
following table sets forth information concerning compensation awarded to, earned by, or paid to each of our named executive officers
for all services rendered in all capacities during 2022 and 2023:
(a)
Name and Principal Position
(b) Year
(c) Salary
(e) Stock Awards
(1)
(f) Option Awards
(1)(2)
(g) Non-Equity Incentive Plan Compensation
(f) All Other Compensation
(i) Total Compensation
Ross Levinsohn
(3)(4)
2023
$
742,708
$
-
$
-
$
-
$
-
$
742,708
Former Chief Executive Officer and Chairman
2022
550,000
801,640
759,018
1,750,000
-
3,860,658
Manoj Bhargava
(5)
2023
-
-
-
-
-
-
President and Former Interim Chief Executive Officer
Grady D Tripp
(6)
2023
300,000
212,200
105,762
-
-
617,962
Former Senior Vice President and Chief People Officer
Kathryn Kulik
(7)
2023
106,250
282,800
82,959
-
-
472,009
Former Chief Revenue Officer
Avi Zimak
(8)(9)(10)
2023
225,000
-
284,254
206,250
715,504
Former Chief Revenue Officer
2022
450,000
320,700
411,814
566,794
-
1,749,308
Henry Robertson Barrett
(11)(12)
2023
338,125
-
-
-
278,820
616,945
Former President, Media
2022
420,000
320,700
253,233
472,351
-
1,466,284
(1)
The
fair value of stock awards and option awards granted during the years ended December 31,
2023 and 2022 was calculated in accordance with ASC 718. Refer to our consolidated financial
statements for the year ended December 31, 2023 in Note 22, Stock-Based Compensation, filed
as part of our Annual Report on Form 10-K for the year ended December 31, 2023 (the Annual
Report) for valuation assumptions.
20
(2)
Effective
March 18, 2022, the Board approved a decrease of the exercise price, to $8.82 per share,
for certain stock options previously issued to the Companys executives. Pursuant to
the action taken by the Board on March 18, 2022, all other terms of those options remained
the same, including, but not limited to, the vesting schedules and expiration dates. Mr.
Levinsohn held an aggregate 405,561 options that were repriced effective March 18, 2022,
which had a weighted average exercise price prior to the decrease of $15.22 per share. Mr.
Zimak held an aggregate 152,164 options that were repriced effective March 18, 2022, which
had a weighted average exercise price prior to the decrease of $17.08 per share. Mr. Barrett
held one award for 58,182 options that was repriced effective March 18, 2022, which had an
exercise price prior to the decrease of $17.38 per share. The amounts shown under the Option
Awards and Total Compensation columns for 2022 include the incremental
amounts by which the fair value of the modified options exceeded the fair value of the original
options as of the date of such modification, which amounts were as follows: (i) for Mr. Levinsohn:
$529,278; (ii) for Mr. Zimak: $258,654; and (iii) for Mr. Barrett: $100,073.
(3)
Our
Board of Directors terminated the employment of Mr. Levinsohn on December 11, 2023.
(4)
On
November 22, 2022, the Board approved the modification of the vesting schedule to a performance-based
equity award previously granted to Mr. Levinsohn, consisting of 232,815 restricted stock
units (Mr. Levinsohns RSU Award). Pursuant to that modification, the
market trading volume condition was removed as a vesting trigger and Mr. Levinsohns
RSU Award remained subject only to the remaining performance criteria for each tranche, which
relate to the achievement of stock price targets, based on a 45-day volume weighted average
price, for the Companys common stock. In the table above, the amounts in the Stock
Awards and Total Compensation columns for Mr. Levinsohn for 2022 include
the incremental amount by which the fair value of Mr. Levinsohns RSU Award exceeded
its original fair value on the modification date.
(5)
Mr.
Bhargava served as our Interim Chief Executive Officer from December 11, 2023 until January
4, 2024 and as Co-President from February 16, 2024 through April 26, 2024. He currently serves
as President.
(6)
Mr.
Tripp was appointed as our Senior Vice President and Chief People Officer in August 2023,
is no longer providing services to us and is no longer an executive officer as of March 13,
2024, but he continued to be paid as an employee through June 11, 2024.
(7)
Ms.
Kulik was appointed as our Chief Revenue Officer in November 2023 and ceased her employment
on April 22, 2024.
(8)
Mr.
Zimak stepped down as our Chief Revenue Officer effective June 30, 2023.
(9)
All
Other Compensation consists of $206,250 that Mr. Zimak received pursuant to a Separation
Agreement and General Release that was entered into in June 2023.
(10)
On
June 30, 2023, the Company modified certain equity awards upon the resignation of Mr. Zimak
pursuant to which unvested restricted stock units for 42,635 shares of the Companys
common stock vested, and unvested options for 29,701 shares of the Companys common
stock vested with the exercise period extended for the 10-year contractual term of the options
from the grant date of the award. In connection with the termination, the unamortized costs
of the awards of $773 was recognized at the termination date and $284 of incremental cost
was recognized as a result of the option award modification upon termination of the senior
executive.
(11)
Mr.
Barretts employment as our President, Media was terminated on December 5, 2023.
(12)
All
Other Compensation consists of $2,458 of retro payment and $276,361 of special bonus.
(13)
Ms.
Silverstein and Mr. Wait do not appear in the table, as they were not named executive officers
during the periods shown.
Named
Executive Officer Employment Agreements
We
do not include a summary of the employment agreements for Messrs. Levinsohn, Zimak, Barrett, Tripp or Ms. Kulik as none of those individuals
are still employed by us.
Mr.
Bhargava does not have an employment agreement with us and receives no compensation for his services as President.
Ms.
Silverstein, though not a Named Executive Officer in 2023, entered into an executive employment agreement with the Company upon her appointment
as CEO on April 19, 2024. The employment agreement is terminable at will by either the Company or Ms. Silverstein. The employment agreement
provides that Ms. Silverstein will be paid an annual base salary of $400,000, subject to annual review by the Board. Ms. Silverstein
is also eligible to earn an annual bonus based on the discretion of the Companys board of directors (the Board).
She is eligible to participate in Company incentive plans and also entitled to the same employment benefits available to the Companys
other employees, as well as to the reimbursement of business expenses during her term of employment. The employment agreement provides
for various termination events, including termination without cause or for good reason (both as defined in the employment agreement),
pursuant to which Ms. Silverstein would be entitled to certain COBRA reimbursement and incentive equity vesting acceleration. Ms. Silverstein
is also subject to restrictive covenants with respect to the solicitation of employees, solicitation of customers, use of trade secrets,
and competition with us for a period of up to one year after termination of the employment agreement.
21
Mr.
Wait, though not a Named Executive Officer in 2023, entered into an executive employment agreement with the Company upon his appointment
as CFO on August 6, 2024. The employment agreement is terminable at will by either the Company or Mr. Wait. The employment agreement
provides that Mr. Wait will be paid an annual base salary of $200,000, subject to annual review by the Companys board of directors
(the Board). Mr. Wait is also eligible to earn an annual bonus based on the discretion of the Board. He is eligible to
participate in the Companys incentive plans and also entitled to the same employment benefits available to the Companys
employees, as well as to the reimbursement of business expenses during his term of employment. The employment agreement provides for
various termination events, including termination without cause or for good reason (both as defined in the agreement), pursuant to which
Mr. Wait would be entitled to certain COBRA reimbursement. Mr. Wait is also subject to restrictive covenants with respect to the solicitation
of employees, solicitation of customers, use of trade secrets, and competition with the Company for a period of up to one year after
termination of the employment agreement.
Potential
Payments Upon Termination or Change-of-Control
We
do not include a summary of potential payments upon termination or a change of control for Messrs. Levinsohn or Barrett, as none of those
individuals were employed by us as of December 31, 2023 and did not receive any payments in connection with their terminations other
than for accrued salary and expenses. The employment of Ms. Kulik and Mr. Tripp ceased after December 31, 2023 but prior to this filing.
Mr. Bhargava is not entitled to any payments upon termination or a change of control.
Upon
his separation from the Company in June 2023, Mr. Zimak received severance payments of $206,250, as reflected in the Summary Compensation
Table.
Pursuant
to her employment agreement, upon a separation from the Company without cause, Ms. Kulik would have been entitled to up to 12 months
salary, a prorated quarterly bonus, and vesting of all outstanding stock awards.
Outstanding
Equity Awards at Fiscal Year-End
The
following tables provide information concerning options to purchase shares of our Common Stock and stock awards held by the named executive
officers on December 31, 2023.
(a)
Name
(b)
Number of Securities Underlying Unexercised Options (exercisable)
(c) Number of Securities Underlying Unexercised Options (unexercisable)
(d)
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
(e)
Option exercise price ($)
(1)
(f) Option expiration date
Ross Levinsohn
24,182
-
(2)
-
8.82
4/10/2029
Ross Levinsohn
90,910
-
(2)
-
8.82
6/11/2029
Ross Levinsohn
90,910
-
(2)
-
8.82
9/16/2029
Ross Levinsohn
99,779
-
(2)
-
8.82
2/18/2031
Ross Levinsohn
22,499
-
(2)
-
10.69
6/6/2032
Avi Zimak
51,137
-
(2)
-
8.82
12/2/2029
Avi Zimak
51,137
-
(2)
-
8.82
12/2/2029
Avi Zimak
49,890
-
(3)
-
8.82
2/18/2031
Avi Zimak
30,000
-
(3)
-
10.69
6/6/2032
Henry Robertson Barrett
53,333
-
(2)
-
8.82
2/18/2031
Henry Robertson Barrett
14,166
-
(2)
-
10.69
6/6/2032
Grady D. Tripp
-
20,000
(4)
-
10.61
1/1/2033
Kathryn Kulik
-
40,000
(5)
-
4.04
11/2/2033
(1)
As
discussed above under the Summary Compensation Table, effective March 18, 2022, the Board
approved a decrease of the exercise price, to $8.82 per share, for certain stock options
previously issued to the Companys executives. The Outstanding Equity Awards at Fiscal
Year End Table reflects the modified option exercise price for those modified options held
by our named executive officers which remained outstanding as of December 31, 2023.
22
(2)
As
of December 31, 2023, the options are fully vested.
(3)
The
options were subject to accelerated vesting in the event the executives employment
is terminated by us without cause and the exercise period extended to the full
10-year term.
(4)
The
options vested as to one-third of the total award on January 1, 2024, with the balance vesting
thereafter in ratable monthly installments over the next 24 months, subject to Mr. Tripps
continued service with our Company. These awards were forfeited in connection with Mr. Tripps
separation from the Company.
(5)
The
options vest as to one-third of the total award on November 2, 2024, with the balance vesting
thereafter in ratable monthly installments over the next 24 months, subject to Ms. Kuliks
continued service with our Company. These awards were forfeited in connection with Ms. Kuliks
separation from the Company.
(a)
Name
(g) Number of shares or units of stock that have not vested (#)
(h) Market value of shares or units of stock that have not vested ($)
(i)
Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)
(j)
Equity incentive plan awards: Market or payout value of unearned shares, units or other units or other rights that have not vested ($)
Grady D. Tripp
20,000
47,600
(6)
-
-
Kathryn Kulik
70,000
166,600
(7)
-
-
(6)
Mr.
Tripp was granted a restricted stock unit award consisting of 20,000 restricted stock units
on January 1, 2023. One-third of the shares of our common stock underlying the restricted
stock units vested on January 1, 2024, and the balance vested or vests thereafter ratably
in monthly installments over the next 24 months, subject to Mr. Tripps continued service
with our Company.
(7)
Ms.
Kulik was granted a restricted stock unit award consisting of 70,000 restricted stock units
on November 2, 2023. One-third of the shares of our common stock underlying the restricted
stock units will vest on November 2, 2024, and the balance vested or vests thereafter ratably
in monthly installments over the next 24 months, subject to Ms. Kulik continued service with
our Company.
23
DIRECTOR
COMPENSATION
Director
Compensation
The
following table provides information for the year ended December 31, 2023 regarding all compensation awarded to, earned by, or paid to
each person who served as a director for some portion or all of 2023, other than Mr. Levinsohn, our Chief Executive Officer and Chairman.
Mr. Levinsohn is not included in the table below, as he was an employee and received no additional compensation for his service as a
director during 2023. The compensation received by Mr. Levinsohn as an employee is shown in the
Executive Compensation-2023
Summary Compensation Table
above.
(a)
Name of Director
(b) Fees Earned or Paid in Cash
(1)
(c) Stock Awards
(2)
(h) Total
H. Hunt Allred
(3)
$
87,750
$
47,257
$
135,007
Laura Lee
(3)
87,750
47,257
135,007
Christopher Petzel
(4)
55,250
29,750
85,000
Daniel Shribman
(4), (6)
55,250
29,750
85,000
Todd D. Sims
(3), (6)
87,750
47,257
135,007
Carlo Zola
(4)
55,250
29,750
85,000
Cavitt Randall
(5)
4,607
-
4,607
Christopher Fowler
(5)
4,607
-
4,607
(1)
Fees
Earned or Paid in Cash set forth in column (b) includes all meeting and retainer fees paid
quarterly in cash.
(2)
Restricted
stock awards were issued pursuant to the 2022 Plan and our Director Compensation Policy.
Each of these restricted stock awards were fully vested as of December 31, 2023. The table
reflects the fair value of the stock awards calculated in accordance with FASB ASC 718. Refer
to our consolidated financial statements for the year ended December 31, 2023 in Note 22,
Stock-Based Compensation, filed as part of our Annual Report.
(3)
As
of December 31, 2023, the aggregate number of shares of our common stock underlying the stock
awards in column (c), corresponding to equity awards granted to each of Allred, Lee and Sims
was 4,454 shares.
(4)
As
of December 31, 2023, the aggregate number of shares of our common stock underlying the stock
awards in column (c), corresponding to equity awards granted to each of Petzel, Shribman
and Zola was 2,804 shares.
(5)
Appointed
to the Board on December 1, 2023.
(6)
Resigned
from the Board prior to December 31, 2023.
Director
Compensation Policies
Our
current Director Compensation Policy for our non-employee directors provides that the non-employee directors will be granted annually
a restricted stock award of a number of shares of our common stock equal in value to $29,750, vesting monthly in 12 equal installments,
and annual cash compensation to each non-employee director of $55,250, payable in four equal quarterly installments at each quarter end.
The Director Compensation Policy also provides that any non-employee director who serves as the chairperson of one or more committees
of our Board will be granted annually an additional restricted stock award of a number of shares of our common stock equal in value to
$17,500, vesting monthly, and additional annual cash compensation of $32,500, payable in four equal quarterly installments at each quarter
end.
Risks
from Compensation Policies and Practices
The
Compensation Committee reviews our compensation policies and practices to determine areas of potential risks and the actions we have
taken, or should take, to mitigate any such identified risks. Based on the Compensation Committees review of our compensation
policies and practices, we do not believe that any risks relating to our compensation policies and practices for our employees are reasonably
likely to have a material adverse effect on our business.
24
EQUITY
COMPENSATION PLAN INFORMATION
Equity
Compensation Plan Information
A
summary of our securities authorized for issuance under equity compensation plans as of December 31, 2023 is as follows:
Plan Category
(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders
5,331,781
$
9.59
701,251
Equity compensation plans not approved by security holders
1,129,527
11.17
114,110
Total
6,461,308
$
9.86
815,361
Plans
Adopted by Stockholders
2016
Stock Incentive Plan
In
December 2016 our Board approved the 2016 Stock Incentive Plan (the
2016 Plan
) which was subsequently approved by
our stockholders. The purpose of the 2016 Plan is to retain the services of our directors, employees, and consultants, align the interests
of these individuals with the interests of our stockholders, and to serve as an aid and inducement in the hiring of new employees through
awards of stock options, restricted stock awards, unrestricted stock awards, and performance stock awards (collectively,
2016
Plan Awards
). Under the terms of the 2016 Plan, 2016 Plan Awards to purchase up to 454,545 shares of our Common Stock may
be granted to eligible participants. As of March 31, 2023, no shares of our Common Stock remain available for issuance pursuant to the
2016 Plan. The 2016 Plan will terminate on December 19, 2026, unless previously terminated by our Board. The 2016 Plan is administered
by our Board, or any committee of directors designated by our Board and their respective delegates, as described in the 2016 Plan.
2019
Stock Incentive Plan
In
April 2019 our Board approved the 2019 Stock Incentive Plan (the
2019 Plan
) which was subsequently approved by our
stockholders. The purpose of the 2019 Plan is to retain the services of our directors, employees, and consultants and align the interests
of these individuals with the interests of our stockholders through awards of stock options, restricted stock awards, unrestricted stock
awards, and stock appreciation rights (collectively,
2019 Plan Awards
). Under the terms of the 2019 Plan, 2019 Plan
Awards to purchase up to 8,409,090 shares of our Common Stock may be granted to eligible participants. As of March 31, 2023, no shares
of our Common Stock remain available for issuance pursuant to the 2019 Plan. The 2019 Plan will terminate on April 4, 2029, unless previously
terminated by our Board. The 2019 Plan is administered by our Board, or any committee of directors designated by our Board and their
respective delegates, as described in the 2019 Plan.
2022
Plan
In
April 2022 our Board adopted the 2022 Plan which was subsequently approved by our stockholders. The purpose of the 2022 Plan is to foster
the growth and success of the Company by providing a means to attract, motivate and retain officers, directors, key employees, and consultants
through awards of stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards and restricted stock units
(collectively, the
2022 Plan Awards
). Under the terms of the 2022 Plan, 2022 Plan Awards to purchase up to 1,800,000
shares of our Common Stock may be granted to eligible participants. As of March 31, 2023, 363,599 shares of our Common Stock remain available
for issuance pursuant to the 2022 Plan. Shares subject to an award that have been canceled, expired, settled in cash, or not issued or
forfeited for any reason will not reduce the aggregate number of shares that may be subject to or delivered under the 2022 Plan and will
be available for future awards granted under the 2022 Plan. The 2022 Plan will continue unless terminated by our Board. The 2022 Plan
is administered by our Board, or any committee of directors designated by our Board and their respective delegates, as described in the
2022 Plan.
25
Plans
Adopted Without Approval of Security Holders
Publisher
Partner Warrant Program
On
May 20, 2020, our Board approved the third Publisher Partner Warrant Program, which superseded the second Publisher Partner Warrant Program
and authorized us to grant Publisher Partner Warrants to purchase up to 90,910 shares of our common stock. Such Publisher Partner Warrants
granted under the third Publisher Partner Warrant Program were to be issued with the same terms as under the second Publisher Partner
Warrant Program that was terminated on March 10, 2019, except that any Publisher Partner Warrants issued under the third Publisher Partner
Warrant Program are no longer subject to performance conditions. Warrants issued under the second Publisher Partner Warrant Program were
to be issued with the same terms as under the first Publisher Partner Program, except that the shares of our common stock underlying
the Publisher Partner Warrants under the second Publisher Partner Warrant Program were to be earned and vest over three-years. Warrants
issued prior to the third and second Publisher Partner Warrant Programs, or under the first Publisher Partner Warrant Program that was
approved by our Board on December 19, 2016, were exercisable over a three-year vesting period once earned based on certain performance
conditions within six-months issuance, on a cashless basis with a five-year term. The issuance of the Publisher Partner Warrants is administered
by management and approved by our Board. We have not granted any Publisher Partner Warrants under any such program since fiscal 2018.
On
November 2, 2022, our Board approved a plan (the Warrant Incentive Program) to grant warrants to certain publishers (the
New Publisher Partner Warrants), that authorized us to grant New Publisher Partner Warrants to purchase up to 33,000 shares
of our common stock. The New Publisher Partner Warrants granted under the Warrant Incentive Program will have the following terms: (i)
one-third will become exercisable and vest on the one-year anniversary of the issuance; (ii) the remaining warrants will become exercisable
and vest in a series of twenty-four (24) successive equal monthly installments following the first anniversary of the issuance; and (iii)
the New Publisher Partner Warrants will have a five-year term. The issuance of the New Publisher Partner Warrants is administered by
management and approved by the Board. As of December 31, 2023 there were outstanding New Publisher Partner Warrants to purchase a total
of 9,800 shares.
Outside
Options
During
fiscal 2018, our Board approved the granting of options outside of the 2016 Plan (the Outside Options) to certain officers,
directors, and employees to provide equity incentive in exchange for consideration in the form of services to us. The Outside Options
are exercisable for shares of our common stock. The Outside Options either vest upon the passage of time or are tied to the achievement
of certain performance targets. On January 8, 2021, our Board approved an amendment to the Outside Option award grants, which eliminated
the performance targets, therefore, the awards continue to vest solely on the time vesting conditions. Our Board approved a repricing
of our Outside Options for a certain employee on March 18, 2022 and our stockholders approved the repricing on June 2, 2022. We are no
longer issuing Outside Options. As of December 31, 2023, there were outstanding Outside Options to acquire 120,187 shares of our common
stock.
Warrants
On
June 14, 2019, we issued 999,540 warrants to acquire our common stock to Authentic Brands Group (the ABG Warrants) in connection
with a licensing agreement pursuant to which we were granted the exclusive right and license in the United States, Canada, Mexico, the
United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated print and digital media business under
the Sports Illustrated brand (the Licensing Agreement). The warrants provided time-based vesting in equal monthly increments
over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (the Time-Based Warrants)
and performance based vesting based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021,
2022, or 2023 (the Performance-Based Warrants). The warrants also provide that (1) under certain circumstances we may require
ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (2) all of the warrants
automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (3) ABG
has the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any future equity
issuance by us (subject to customary exceptions). As of December 31, 2023, 399,816 Time-Based Warrants are vested and 599,724 Performance-Based
Warrants are not vested. On January 18, 2024, ABG terminated the Licensing Agreement and as a result all outstanding and unvested ABG
Warrants became immediately vested and exercisable. The ABG Warrants expire ten years from their issue date.
On
October 26, 2020, we issued 5,682 warrants to AllHipHop, LLC (the AllHipHop Warrants) to acquire our common stock in exchange
for the surrender and termination of 6,819 previously issued Publisher Partner Warrants, with an exercise price of $14.30.
26
Pay
Versus Performance
As
required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are
providing the following disclosure regarding executive compensation for our former chief executive officer (
CEO
),
interim CEO and our other named executive officers (
Non-CEO NEOs
) and Company performance for the fiscal years listed
below. For more information concerning our pay-for-performance philosophy and how we structure our executive compensation to drive and
reward performance, see the section titled
Executive Compensation.
The information contained in this Pay Versus
Performance section will not be incorporated into any of the Companys filings under the Securities Act or the Exchange Act, except
to the extent the Company specifically incorporates such information by reference therein.
Fiscal Year
Summary
Compensation
Table Total for
Former CEO
(1)
Summary Compensation Table Total for Interim CEO
(1)
Compensation
Actually Paid to
Former CEO
(2)
Compensation
Actually Paid to
Former CEO
(2)
Average
Summary
Compensation
Table Total for
Non-CEO
NEOs
(1)
Average
Compensation
Actually Paid
to Non-CEO
NEOs
(2)
Total
Shareholder
Return
(4)
Net Income
(Loss)
(5)
2023
$
742,708
$
-
$
504,634
$
-
$
605,605
$
(520,850
)
$
18.03
$
(55,582,000
)
2022
$
3,860,658
$
-
$
3,604,568
$
-
$
1,607,796
$
1,401,026
$
80.37
$
(70,858,000
)
2021
$
10,733,857
$
-
$
7,663,426
$
-
$
3,803,592
$
2,901,166
$
106.67
$
(89,940,000
)
(1)
2023
CEOs are Mr. Levinsohn (former) and Mr. Bhargava (interim). 2022 and 2021 CEO was Mr. Levinsohn.
The individuals comprising the Non-CEO NEOs for fiscal year 2023 consist of Grady Tripp,
Kathryn Kulik, Avi Zimak, and Henry Robertson Barrett. The individuals comprising the Non-CEO
NEOs for fiscal year 2022 consist of Avi Zimak and Henry Robertson Barrett. The individuals
comprising the Non-CEO NEOs for fiscal year 2021 consist of Avi Zimak and Paul Edmondson.
(2)
The
dollar amounts reported in column (c) represent the amount of compensation actually
paid to our CEO, while the dollar amounts reported in column (e) represent the average
amount of compensation actually paid for the NEOs (excluding our CEO) for the
applicable year. Compensation Actually Paid has been calculated based on the requirements
and methodology set forth in applicable SEC rules (Item 402(v) of Regulation S-K). The details
for the Compensation Actually Paid calculation for 2022 and 2021 are available in the prior
years proxy statement. To calculate Compensation Actually Paid for 2023 the following
amounts were deducted from and added to the total compensation number shown in the Summary
Compensation Table.
Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for 2023
Adjustments
Former PEO
($)
Interim PEO
($)
Average of Other NEOs
($)
Total Compensation from SCT
742,708
605,605
Adjustments for stock and option awards
Deduction Amounts Reported under the Stock Awards Column in the Summary Compensation Table
(495,000
)
Deduction for Amounts Reported under the Option Awards Columns in the Summary Compensation Table
(472,975
)
Increase for Fair Value of Awards Granted During Current Fiscal Year which Remain Unvested as of the End of Current Fiscal Year
252,350
Increase for Fair Value at Vesting of Option Awards and Stock Awards Granted During Current Fiscal Year That Vested During Current Fiscal Year
Change in Fair Value from Prior Fiscal Year End to Current Fiscal Year End of Option Awards and Stock Awards Granted Prior to Current Fiscal Year that were Outstanding and Unvested as of Current Fiscal Year End
Change in Fair Value from Prior Fiscal Year End to Vesting Date of Option Awards and Stock Awards Granted Prior to Current Fiscal Year But Which Vested During Current Fiscal Year
(238,075
)
(695,084
)
Deduction of Fair Value of Option Awards and Stock Awards Granted prior to Current Fiscal Year That Were Forfeited During the Current Fiscal Year
Increase Based upon Incremental Fair Value of Option Awards and Stock Awards Modified During Current Fiscal Year
284,254
Subtract fair value at end of prior year for awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during fiscal year 2023
Add dividends or other earnings paid on stock or option awards in 2023 prior to vesting if not otherwise included in total compensation for fiscal year 2023
Compensation Actually Paid (as calculated)
504,634
(520,850
)
(3)
Total
shareholder return (
TSR
) assumes an investment of $100 on December 31,
2020, the start of the measurement period, and the reinvestment of any dividends.
(4)
The
dollar amounts reported represent the amount of net loss reflected in our audited financial
statements for the applicable fiscal year as disclosed in our Annual Report.
27
Analysis
of the Information Presented in the Pay versus Performance Table
In
accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented
in the Pay versus Performance table. For further information concerning our pay-for-performance philosophy and how we structure our executive
compensation to drive and reward performance, refer to Executive Compensation.
Chart
Showing Graphical Relationship Between Former CEO and Non-CEO NEOs Compensation Actually Paid and TSR
*
CAP
stands for Compensation Actually Paid and is presented in thousands. ** TSR
stands for or Total Shareholder Return. Our Interim CEO had no compensation
reported in the Summary Compensation Table in 2023 and thus, is not shown in the graph provided.
28
Chart
Showing Graphical Relationship Between Former CEO and Non-CEO NEOs Compensation Actually Paid and Net Income (Loss)
*
CAP
stands for Compensation Actually Paid and is presented in thousands. Our Interim
CEO had no compensation reported in the Summary Compensation Table in 2023 and thus, is not
shown in the graph provided.
29
PROPOSAL
NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
What
Am I Voting On?
It
is the responsibility of the Audit Committee to select and retain our independent registered public accounting firm. Our Audit Committee
has appointed KPMG LLP (KPMG) as our independent registered public accounting firm for our fiscal year ending December
31, 2023. Although stockholder ratification of the Audit Committees selection of our independent registered public accounting
firm is not required by our Bylaws or otherwise, we are submitting the selection of KPMG for stockholder ratification so that our stockholders
may participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the
Audit Committee will not be required to select different independent registered public accounting firm for us.
Representatives
of KPMG will be present at the Annual Meeting and will have an opportunity to make a statement and respond to questions from stockholders
submitted prior to the Annual Meeting. See the section entitled Instructions for the virtual Annual Meeting
Participating
in the Virtual Annual Meeting
above for how to submit questions.
Vote
Required and Voting Recommendation
The
ratification of the appointment of KPMG as our independent registered public accounting firm for the year ending December 31, 2024
requires the affirmative vote of a majority of the voting power of the Common Stock present virtually or represented by proxy at
the Annual Meeting and entitled to vote thereon. Abstentions will be treated as votes against this proposal. Broker non-votes will have
no effect on the outcome of this proposal.
OUR
BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE YEAR ENDING DECEMBER 31, 2024.
Additional
Information Regarding Change of Independent Auditor
As
reported on our Current Report on Form 8-K, dated July 17, 2024, our Audit Committee, on July 11, 2024, following the completion of a
competitive process with several independent registered public accounting firms, appointed KPMG as our independent registered public
accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2024.
On
August 19, 2024, when we filed our Quarterly Report on Form 10-Q for the three months ended March 31, 2024, with the SEC, Marcum LLP
(Marcum) completed its review of our consolidated financial statements for such fiscal quarter, and our retention of Marcum
as our independent registered public accounting firm with respect to the audit of our consolidated financial statements ended as of that
date as a result of the Audit Committees decision to dismiss Marcum in connection with its decision to retain KPMG.
The
reports of Marcum on the Companys consolidated financial statements for the fiscal years ended December 31, 2023 and 2022 did
not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting
principles, except that such audit reports contained in the Companys Annual Report on Form 10-K for the fiscal years ended December
31, 2023 and 2022 contained an explanatory paragraph expressing substantial doubt as to the Companys ability to continue as a
going concern, and the report of Marcum on the Companys internal control of financial reporting as of December 31, 2022 expressed
an adverse opinion because of the existence of material weaknesses.
During
our fiscal year ended December 31, 2021 and in the subsequent interim period through April 15, 2022, (i) there were no disagreements
(as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with SG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of
SG, would have caused SG to make reference to the subject matter of such disagreement in connection with its reports on the
financial statements for such periods, and (ii) there were no reportable events (as that term is defined in Item 304(a)(1)(v)
of Regulation S-K and the related instructions), except that, in the Companys 2022 Annual Report on Form 10-K and 2023 Annual
Report on Form 10-K, the Company reported material weaknesses in the Companys internal control over financial reporting as of
December 31, 2022: (i) the Company had inadequate segregation of duties consistent with control objectives related to the Companys
information technology general controls (ITGCs), specifically as it relates to change management; and (ii) there was insufficient
validation of non-Google impression data provided by certain third party service providers. These material weaknesses were remedied in
fiscal 2023 by (i) implementing new permissions and approval requirements in the Companys change management process in the Companys
systems previously identified with inadequate segregation of duties and (ii) obtaining, reviewing, and mapping a System and Organization
Controls - SOC 1 Type 2 report from third party service providers for the effectiveness of third party controls relevant to the Companys
internal control over financial reporting, including validation of impression data, and implementing compensating management controls
to further validate non-Google impressions data provided by certain third party service providers. The Committee discussed the subject
matter of the reportable event described above with Marcum and remediation thereto. The Committee authorized Marcum to respond fully
to inquiries of the successor accountant (described below) concerning the reportable event.
30
During
our two most recent fiscal years ended December 31, 2023 and 2022 and in the subsequent interim period through July 11, 2024, neither
we nor anyone on our behalf consulted KPMG regarding (i) the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, in connection with
which either a written report or oral advice was provided to us that KPMG concluded was an important factor considered by us in reaching
a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a disagreement,
as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event, as that term is defined in Item
304(a)(1)(v) of Regulation S-K.
Audit
Fees
The
following table sets forth the aggregate fees billed and incurred to both us or our subsidiaries by our independent registered public
accounting firm for the years ended December 31, 2023 and 2022 for professional services by Marcum, our former independent auditor. No
fees were incurred by KPMG during the years ended December 31, 2023 and 2022.
Category
2023
2022
Audit Fees
(1)
$
1,344,925
$
1,800,000
Audit-related Fees
(2)
All Other Fees
(3)
Tax Fees
(4)
Total Fees
$
1,344,925
$
1,800,000
(1)
Audit
fees include fees for audit services primarily related to the audit of our annual
consolidated financial statements; the review of our quarterly consolidated financial statements;
assistance with and review of documents filed with the SEC; services in connection with registration
statements filed in 2023 and 2022; and other accounting and financial reporting consultation
and research work billed as audit fees or necessary to comply with the standards of the Public
Company Accounting Oversight Board (United States).
(2)
Marcum
did not provide any services not disclosed in the table above during 2023 and 2022. As a
result, there were no audit-related fees billed or paid during 2023 or 2022.
(3)
Marcum
did not provide any services not disclosed in the table above during 2023 and 2022. As a
result, there were no other fees billed or paid during 2023 or 2022.
(4)
Tax
fees include fees for tax compliance and advice. Tax advice fees encompass a variety
of permissible tax services, including technical tax advice related to federal and state
income tax matters, assistance with sales tax, and assistance with tax audits.
Pre-Approval
Policies and Procedures
Our
Audit Committee has considered the nature and amount of fees billed by our independent registered public accounting firm and believes
that the provision of services for activities to the audit is in compliance with maintaining the independence of our independent registered
public accounting firm.
All
audit fees are approved by the Audit Committee. The Audit Committee reviews, and in its sole discretion pre-approves, our independent
auditors annual engagement letter including proposed fees and all audit and non-audit services provided by the independent auditor.
Accordingly, all services described under Audit Fees, Audit-related Fees, All Other Fees, and
Tax Fees, as applicable, were pre-approved by our Audit Committee. The Audit Committee may not engage the independent auditor
to perform the non-audit services proscribed by law or regulations.
31
REPORT
OF THE AUDIT COMMITTEE
This
report of the Audit Committee is required by the Securities and Exchange Commission (SEC) and, in accordance with the SECs
rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement
into any filing under the Securities Act of 1933, as amended (Securities Act) or under the Securities Exchange Act of 1934,
as amended (Exchange Act), except to the extent that we specifically incorporate this information by reference, and will
not otherwise be deemed soliciting material or filed under either the Securities Act or the Exchange Act.
Our
Audit Committee has reviewed and discussed with our management and Marcum LLP our audited consolidated financial statements for the fiscal
year ended December 31, 2023. Our Audit Committee has also discussed with Marcum LLP the matters required to be discussed by Auditing
Standard No. 1301 adopted by the Public Company Accounting Oversight Board (United States) (
PCAOB
) regarding
Communications
with Audit Committees
and the Securities and Exchange Commission.
The
Audit Committee has also received and reviewed the written disclosures and the letter from Marcum LLP required by applicable requirements
of the PCAOB regarding the independent accountants communications with the Audit Committee concerning independence, and has discussed
with Marcum LLP its independence from us.
Based
on the foregoing, the Audit Committee recommended to our Board that the audited consolidated financial statements for the fiscal year
ended December 31, 2023 be included in our Annual Report on Form 10-K.
By:
The Audit Committee
Laura
Lee (Chair)
Carlo
Zola
Christopher
Petzel
32
OTHER
BUSINESS
Our
Board is not aware of any other business to be considered or acted upon at the Annual Meeting other than that for which notice is provided
in this Proxy Statement and the accompanying notice. In the event any other matters properly come before the Annual Meeting, it is expected
that the shares represented by proxy will be voted with respect thereto in accordance with the judgment of the persons voting them.
2023
ANNUAL REPORT ON FORM 10-K
Copies
of our Annual Report for fiscal 2023, which contains our Form 10-K for the fiscal year ended December 31, 2023, and consolidated financial
statements, as filed with the SEC, have been included with the proxy materials. A copy may be obtained without charge to stockholders
upon written request to Investor Relations at the address for our principal offices as set forth in our then-most recent filing with
the SEC. In addition, copies of this document, the Annual Report and all other documents filed electronically by us may be reviewed and
printed from the SECs website at: http://www.sec.gov.
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