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PART III
Item 10. Directors, Executive Officers, and Corporate Governance
The following table sets forth the names, ages, and positions of our executive officers, senior management, and directors as of December 31, 2022. Directors serve until the next annual meeting of stockholders or until their successors are elected and qualify. Officers are elected by the Board of Directors and their terms of offices are, except to the extent governed by employment contracts, at the discretion of the Board of Directors. There is no family relationship between any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer.
Executive Officers and Directors
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| Name | | Age | | Position |
| Sadiq (Sid) Toama | | 40 | | Chief Executive Officer and Director |
| Erica Naidrich | | 48 | | Chief Financial Officer |
| Randall Miles | | 66 | | Chairman of the Board |
| Grant Lyon | | 59 | | Director |
| Thomas Ochocki | | 46 | | Director |
| Wendy Parker | | 57 | | Director |
| Martin Pompadur | | 87 | | Director |
| Jeffrey S. Stein | | 53 | | Director |
| Sabrina Yang | | 43 | | Director |
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Executive Officers
Sadiq (Sid) Toama
Sadiq (Sid) Toama was elected President of Troika Media Group, Inc. and joined the Company’s Board of Directors on March 21, 2022. Subsequently, Mr. Toama was elected Chief Executive Officer of the Company. Mr. Toama joined Converge in 2016. He started his career as a commercial attorney in London, representing distressed brands through product liability and crisis management events. Mr.Toama oversaw complex and international cases, advising clients on legal and commercial strategies leveraging PR and marketing extensively to contest regulatory pressures and win back consumer confidence for his clients.
Having represented the leading children’s product manufacturer, Maclaren, Mr.Toama became Maclaren’s Global Chief Executive Officer in 2011, instigating its global corporate and operational restructuring to help it rediscover its former glory days. Mr. Toama expanded Maclaren’s Brand standing, in part, by implementing multi-year licensing and product development partnerships with brands such as BMW, Gucci, Liberty, Juicy Couture, Cath Kidston, and Emirates Airlines. Mr. Toama oversaw Maclaren’s product expansion into nursery products, furniture, hard goods, toys, and accessories as well as contract manufacturing for black label brands. Mr.Toama developed extensive luxury retail experience, selling premium products directly in over sixty (60) countries and developing long term partnerships. Mr. Toama spent five (5) years leading Maclaren’s shift to a vertically integrated business bringing functions such as product development, sales, marketing, and eCommerce, as well as customer care in-house, across the United Kingdom, France, Spain, Germany, the USA, China, Japan, and Hong Kong. Mr. Toama instigated Maclaren’s move to a selective distribution model and the expansion into eCommerce which paved the way for emerging market expansion.
In 2016, Mr. Toama became the Chief Operating Officer of Converge. Mr. Toama’s primary focus has been on the digitization of the business and supporting clients to implement agile and optimized lower funnel customer acquisition solutions across their digital, in-store, and call center journeys. The drive has been to build the required infrastructure to transition the business to an outcome-based remuneration model with higher margins, which has been underwritten by an unwavering focus on Converge’s media investment measurement delivered by a robust focus on business intelligence.
Mr. Toama has architected and overseen the implementation of Enterprise Resource Planning and Business Intelligence platforms at a global and national level including NetSuite and Salesforce; with extensive experience in eCommerce, CRM,
inventory management, and order management system implementation for B2B/B2C systems for internal teams as well as client operated systems.
Since 2016, Mr. Toama has spearheaded all ad-tech and mar-tech systems integrations and reporting for clients and internal teams to ensure on time delivery of data across all sales and marketing platforms. In particular, Mr. Toama has architected and implemented Converge’s proprietary business intelligence platform, Helix, to leverage disparate and unstructured and varied data points into actionable insights. Mr. Toama routinely works with clients to curate their implementation of ad-tech services with platforms such as The Trade Desk and other demand-side platforms such as Google and Adobe.
Erica Naidrich
On May 23, 2022, Troika Media Group, Inc. appointed Erica Naidrich to serve as the Company’s Chief Financial Officer replacing Christopher Broderick, our former Chief Financial Officer. Ms. Naidrich brings substantial financial and business knowledge to Troika, with experience within public companies in corporate finance, operational management systems, and financial reporting. Ms. Naidrich joined the Troika Executive Team to oversee the Company’s global finance and enterprise functions; she reports to Sid Toama, Chief Executive Officer and President of Troika.
Prior to joining Troika Media Group, Ms. Naidrich served as Vice President of Accounting and Controller for Madison Square Garden Entertainment Corp. (“MSG”), a leader in live sports, entertainment, and programming. Prior to her role at MSG, Ms. Naidrich held multiple Controller roles within the technology, consumer goods and professional services industries, in addition to spending eight (8) years managing SEC Reporting in the private equity space. Ms. Naidrich started her career in Public Accounting for RSM and PricewaterhouseCoopers. Ms. Naidrich possesses valuable experience in Troika’s core sectors providing financial oversight of sports and entertainment, technology and media, private equity and professional services businesses.
Ms. Naidrich is a certified public accountant (currently inactive) and obtained a Certificate in Accounting in June 2003 from the University of California, San Diego - La Jolla, California. Ms. Naidrich received a Bachelor of Arts in Communications Studies from West Virginia University, Morgantown, West Virginia in August 1996.
Directors
Randall Miles
On July 15, 2022, Randall Miles, was elected as Chairman of the Board of Directors, as well as a Director, of Troika Media Group, Inc.
Mr. Miles serves as Chairman & CEO of SCM Capital Group, a global transaction and strategic advisory firm. In addition, Mr. Miles sits on the boards of eXp World Holdings, Inc. (NASDAQ:EXPI) as Vice Chairman, private equity-backed Arthur H Thomas Companies as Vice Chairman, and Kuity, Inc. as Chairman.
For over thirty (30) years Mr. Miles has held senior executive leadership positions in global financial services, financial technology, and investment banking companies, including at bulge bracket, regional and boutique firms. His extensive investment experience advising companies on strategic and financial needs has spanned many disciplines while serving as CEO, Executive Committee Chair, Head of FIG, Head of M&A, and other responsibilities across these industries. Mr. Miles’ transactional and advisory experience is complemented by leadership of public and private equity backed financial technology, specialty finance, and software companies: Chairman and CEO at LIONMTS, where he was nominated for the Ernst & Young Entrepreneur of the Year award, CEO at Syngence Corporation, COO of AtlasBanc Holdings Corp., and CEO of Advantage Funding / NAFCO Holdings.
Mr. Miles has broad public, private, and non-profit board experience and has been active for many years in leadership roles with the Make-A-Wish Foundation. Mr. Miles holds a BBA from the University of Washington and holds FINRA licenses Series 7, 24, 63 and 79.
Grant Lyon
On November 8, 2022, Mr. Lyon joined the Company's Board of Directors where he has a seat on the Company's Special Committee. Mr. Lyon has over thirty (30) years of experience in corporate restructuring, expert testimony and corporate governance. Mr. Lyon has served as Co-founder and managing partner of Arete Capital Partners, LLC, a special situation
advisory firm, since July 2020. He previously served as founder and managing director of Atera Capital, LLC, a fiduciary and financial advisory firm, from June 2017 to June 2020. Mr. Lyon also served as managing director of KRyS Global USA, a restructuring advisory and distressed investment consulting firm, from 2014 to June 2017. Mr. Lyon has served as the financial advisor to the Government of the Commonwealth of the Bahamas. Mr. Lyon has served numerous times as a Chapter 11 Trustee, state-court receiver, chief executive officer, chief financial officer and chief restructuring officer. Mr. Lyon has testified many times in numerous jurisdictions, including bankruptcy court, federal district court and state court.
Mr. Lyon has a Masters of Business Administration degree and a Bachelor of Science degree in Accounting from Brigham Young University.
Thomas Ochocki
Mr. Ochocki has served on the Board of Directors since 2018. He is serving on the Board of Directors representing the Coates families’ equity interest, and has over twenty (20) years of experience in stock brokering, private equity, and investment banking in the United Kingdom. He is currently Chief Executive Officer and majority stockholder of Union Investment Management Ltd., whose history dates back to The Union Discount Company of London (est. 1885). An Old Cholmeleian of Highgate School, Mr. Ochocki read Psychology & Computer Science at Liverpool University prior to working with Sony Interactive Entertainment on the PlayStation launch titles. He went on to manage and facilitate the development of over fifty (50) published video games before switching to his predominant career in the capital markets.
The Company believes that Mr. Ochocki’s broad entrepreneurial, financial, and business expertise and his experience with markets in the United Kingdom and interactive entertainment give him the qualifications and skills to serve as a Director.
Wendy Parker
On April 27, 2022, Wendy Parker joined the Board of Directors as an independent Director. Since 2002, Ms. Parker has been a London, England based barrister and has been a member of Gatehouse Chambers’ Commercial, Property and Insurance Groups in London where she undertakes most areas of work within those fields. She has developed a strong practice both as an adviser and advocate and has experience appearing in the specialist commercial and property forums as well as Tribunals and the Court of Appeal.
Ms. Parker has been involved in many technically complex cases. She has a strong academic background which she combines with a practical and common sense approach in order to assist clients in achieving their objectives. Ms. Parker is a member of the United Kingdom Chancery Bar Association and the COMBAR (the Specialist Bar Association for Commercial Barristers advising the international business community).
Martin Pompadur
Mr. Pompadur was elected to the Board of Directors in April 2021 upon the listing on the Nasdaq Capital Market. Mr. Pompadur is a private investor, senior advisor, consultant, and Board member. Mr. Pompadur entered the media field when in 1960, he joined American Broadcasting Companies, Inc. ("ABC, Inc."). He remained at ABC, Inc. for seventeen (17) years, culminating with his becoming the youngest person ever appointed to the ABC, Inc. Board of Directors.
Mr. Pompadur is a board member of two additional public companies: Nexstar Broadcasting Group and Truli Media Group. Previously, he was a board member of many public and private companies including Imax Corporation, ABC, Inc., BSkyB, Sky Italia, Premier World, Fox Kids Europe, Metromedia International, and Elong.
Jeffrey S. Stein
On November 8, 2022, Mr. Stein joined the Company's Board of Directors where he has a seat on the Company's Special Committee. Mr. Stein is an accomplished corporate executive and director who provides the perspective of a successful investment professional with over thirty (30) years of experience in both the debt and equity asset classes. Mr. Stein is Founder and Managing Partner of Stein Advisors LLC, a financial advisory firm that provides consulting services to public and private companies and institutional investors. Previously, Mr. Stein was a Co-Founder and Principal of Durham Asset Management LLC, a global event driven distressed debt and special situations equity asset management firm. From January 2003 through December 2009, Mr. Stein served as Co-Director of Research at Durham responsible for the identification, evaluation, and management of investments for the various Durham portfolios. Mr. Stein was a member of the Executive and Investment Committees at Durham responsible for oversight of the management company and investment funds,
development and execution of the investment strategy, portfolio composition and risk management. Mr. Stein is a Certified Turnaround Professional (CTP) as designated by the Turnaround Management Association (TMA).
Mr. Stein received an M.B.A. with Honors in Finance and Accounting from New York University and a B.A. in Economics from Brandeis University.
Sabrina Yang
On April 27, 2022, Sabrina Yang joined the Company’s Board of Directors and she serves as a member of the Audit Committee. Ms. Yang is a seasoned finance executive with over seventeen (17) years of experience in accounting, financial planning, and analysis (“FP&A”), M&A advisory, and corporate finance. Since 2021, Ms. Yang has served as CFO of Final Bell Holdings, Inc. (“Final Bell”), an industry leader in providing end-to-end product development and supply chain solutions to leading cannabis brands in the United States and Canada. During her tenure at Final Bell, she has led the reverse take-over transaction process, establishing a path for Final Bell to become a publicly traded company on the Canadian Stock Exchange. In conjunction with the reverse takeover, she also integrated and managed all of Final Bell’s administrative functions, including accounting, finance, legal, HR, and IT operations.
Prior to joining Final Bell and since 2018, Ms. Yang has served as CFO, on a part-time basis, of Apollo Program, a data-driven advertising technology company, where she ran all administrative and operating functions. She also served as deputy CFO for a private school with operations in both the United States and China. She has held prior roles in strategy, analytics, and FP&A at the Topps Company, a collectibles and licensing company, and at Undertone, a digital advertising company. Sabrina started her career with five (5) years at KPMG LLP in its transaction services team, in which she advised clients on strategy, corporate finance, valuation, and financial modeling. Ms. Yang is a Certified Public Accountant with Masters of Science in Accounting and Applied Statistics from Louisiana State University.
Board Composition
Our amended and restated bylaws provide that the number of directors shall be fixed from time to time by our Board of Directors. Vacancies occurring on the Board of Directors may be filled by the vote or written consent of a majority of our stockholders or our directors. Eight (8) directors were serving on the board as of December 31, 2022.
Director Independence
We have reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based on this review, our Board has determined that Grant Lyon, Randall Miles, Wendy Parker, Martin Pompadur, Jeffrey S. Stein and Sabrina Yang, six (6) of our eight (8) directors are “independent directors” as defined by the Nasdaq Capital Market.
Committees of our Board of Directors
Our Board of Directors has an Audit Committee, a Compensation Committee, a Special Committee and a Nominating and Governance Committee, each of which has the composition and responsibilities described below.
Audit Committee. The principal responsibilities of the Audit Committee are:
•appointing, compensating, and overseeing the work of any registered public accounting firm employed by us;
•resolving any disagreements between management and the auditor regarding financial reporting;
•pre-approving all auditing and non-audit services;
•retaining independent counsel, accountants, or others to advise the audit committee or assist in the conduct of an investigation;
•seeking any information it requires from employees-all of whom are directed to cooperate with the audit committee’s requests-or external parties;
•meeting with our officers, external auditors, or outside counsel, as necessary; and
•overseeing the establishment and maintenance of management processes to assure our compliance with all applicable laws, regulations and corporate policy.
Our independent auditor is ultimately accountable to the Audit Committee. The Audit Committee has the ultimate authority and responsibility to select, evaluate, approve terms of retention and compensation of, and, where appropriate, replace the independent auditor.
The current members of the Audit Committee are Randall Miles, Martin Pompadur, and Sabrina Yang, with Mr. Miles serving as chair. The Board of Directors determined that each of the current Audit Committee members is (a) independent, as defined in the listing standards of Nasdaq, (b) a “non-employee director,” as defined in Rule 16b-3 under the Securities Exchange Act, (c) an “outside director,” as defined in Section 162(m) of the Internal Revenue Code of 1986, or the Code, and (d) financially literate. The Board also determined that each of Randall Miles, Martin Pompadur, and Sabrina Yang is an audit committee financial expert in accordance with the standards of the SEC. The Audit Committee meets quarterly and met five (5) times in the 2022 calendar year. The meetings were attended by all members.
Compensation Committee. The principal responsibilities of the Compensation Committee are to assist the Board of Directors in fulfilling its responsibilities relating to:
•compensation of our directors, executive officers and key employees;
•assisting the Board of Directors in establishing appropriate incentive compensation and equity-based plans and to administer such plans;
•overseeing the annual process of evaluation of the performance of our management; and
•performing such other duties and responsibilities as enumerated in and consistent with the Compensation Committee’s charter.
The current members of the Compensation Committee are Martin Pompadur, Wendy Parker, and Randall Miles, with Mr. Pompadur serving as chair. The Board of Directors determined that each of the current Compensation Committee members is (a) independent, as defined in the listing standards of Nasdaq, (b) a “non-employee director,” as defined in Rule 16b-3 under the Securities Exchange Act and (c) an “outside director,” as that term is defined in Section 162(m) of the Code.
The Compensation Committee has the sole authority to retain, oversee, and terminate any compensation consultant to be used to assist in the evaluation of executive compensation and to approve the consultant’s fees and retention terms. The Compensation Committee held five (5) meetings in the 2022 calendar year. Each of the then-serving members participated in all of the meetings of the Compensation Committee during 2022.
Compensation Committee Interlocks and Insider Participation
During 2022, none of the members of the Compensation Committee was an officer or employee of our company or any of our subsidiaries, and none of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the Board of Directors or Compensation Committee.
Nominating and Governance Committee. The principal responsibilities of the Nominating and Governance Committee are:
•assisting the Board of Directors by identifying qualified candidates for director nominees, and to recommend to the Board of Directors the director nominees for the next annual meeting of stockholders;
•leading the Board of Directors in its annual review of its performance;
•recommending to the Board of Directors nominees for each Committee of the Board of Directors; and
•developing and recommending to the Board of Directors corporate governance guidelines applicable to us.
The current members of the Nominating and Governance Committee are Randall Miles and Martin Pompadur, with Mr. Miles serving as chair. The Board of Directors determined that each of the current Nominating and Governance Committee members is independent, as defined in the listing standards of Nasdaq.
The Nominating and Governance Committee has the sole authority to retain, oversee, and terminate any consulting or search firm to be used to identify director candidates or assist in evaluating director compensation and to approve any such firm’s fees and retention terms. The Nominating and Governance Committee held three (3) meetings in the 2022 calendar year. Each of the then-serving members participated in all of the meetings of the Nominating and Governance Committee during 2022.
Special Committee. In November 2022, the Board formed the Special Committee. The principal responsibilities of the Special Committee are:
•negotiating with the Company’s stakeholders, including Blue Torch and the holders of the Company’s Series E Preferred Stock;
•investigating past corporate transactions (including activities involving insiders);
•analyzing and pursuing claims the Company may hold;
•assessing historical intercompany claims and transfers;
•negotiating new financing facilities and agreements;
•evaluating, negotiating, and approving the Company’s entry into and consummation of strategic transaction(s);
•taking any action with respect to matters pertaining to strategic transactions in which a conflict of interests exists (or is reasonably likely to exist) between the Company and any of its equity holders, affiliates, directors, officers, or other stakeholders; and
•considering other matters as may be requested by the Company or the Board or deemed appropriate by the Committee.
The current members of the Special Committee are Grant Lyon, Randall Miles, and Jeffrey S. Stein. The Special Committee held twenty-two (22) meetings in the 2022 calendar year. The Board of Directors determined that each of the current Special Committee members is independent, as defined in the listing standards of Nasdaq.
Executive Sessions
The Company holds regularly scheduled Board of Directors meetings at which only independent directors are present, as required by Nasdaq corporate governance rules.
Code of Ethics
We have adopted a Code of Ethics for our principal executive officers, which include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The code concerns conflicts of interest and compliance with laws, rules and regulations of federal, state and local governments, foreign governments and other appropriate private and public regulatory agencies that govern our business. A copy of our Code of Ethics is filed as an exhibit to this Amendment to the Transition Report.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership of our common stock and other equity securities with the SEC. In 2022, the Company did not have effective processes in place to monitor the director and executive officer compliance with Section 16 of the Exchange Act. As a result a Form 3 was not timely filed upon the appointment of Grant Lyon and Jeffrey Stein to our Board of Directors. In addition, we believe that certain of our current and former directors and officers may have failed to file initial reports of ownership and/or reports of changes in ownership of our common stock with the SEC when required by Section 16(a) of the Exchange Act. We are working with outside legal counsel to determine whether and to what extent any such instances of non-compliance have occurred and to implement appropriate compliance procedures.
Item 11. Executive Compensation.
Compensation Discussion and Analysis
The primary objectives of our executive compensation program are to attract and retain the best possible executive talent, to motivate our executive officers to enhance our growth and profitability, to increase stockholder value, and to reward superior performance and contributions to the achievement of corporate objectives. The focus of our executive pay strategy is to tie short-term and long-term cash and equity incentives to the achievement of measurable corporate and individual performance objectives, and to align executives’ incentives with stockholder value creation. Our compensation plan is designed to attract and retain the best possible talent, and we recognize that different elements of compensation are more or less valuable depending on the individual. For this reason, we offer a broad range of compensation elements. We offer our executive team salaries that are competitive with the market, executive bonuses that are in line with our corporate goals and dependent on measurable results, plus stock option awards designed to retain talent, promote a sense of company ownership, and tie corporate success to monetary rewards. Specifically, all management employed by the Company or one of its subsidiaries are entitled to participate in an equity incentive plan that will compensate management if certain financial performance and milestones are met. The Company reserves the right to increase the size of the plan as it deems necessary, at its sole discretion.
Base salaries for our executive officers are determined based on the scope of their job responsibilities, prior experience, and depth of their industry skills, education, and training. Compensation paid by industry competitors for similar positions, as well as market demand, are also taken into account. Base salaries are reviewed annually as part of our performance management program, whereby merit or equity adjustments may be made. Merit adjustments are based on the level of success in which individual and corporate performance goals have been met or exceeded. Equity adjustments may be made to ensure base salaries are competitive with the market and will be determined using benchmark survey data.
Our compensation structure is primarily comprised of base salary, annual performance bonus, and stock options. In setting executive compensation, the Board of Directors will consider the aggregate compensation payable to an executive officer and the form of the compensation. The Board will seek to achieve an appropriate balance between immediate cash rewards and long-term financial incentives for the achievement of both annual and long-term financial and non-financial objectives.
Relationship of Elements of Compensation
The compensation paid to our executives for the transition period ended December 31, 2022, consisted of the following components:
Base Salary. Base salaries for our executives are established based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies for similar positions. Base salaries are reviewed annually and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance, and experience. Annual reviews will typically be delivered in February of each year.
Discretionary Annual Bonus. The compensation committee has the authority to award discretionary annual bonuses to our executive officers and senior management and will set the terms and conditions of those bonuses and take all other actions necessary for the plan’s administration. These awards are intended to compensate officers for achieving financial and operational goals and for achieving individual annual performance objectives. These objectives vary depending on the individual.
Long-Term Incentive Program. We believe that long-term performance is achieved through an ownership culture that encourages such performance by our executive officers through the use of stock and stock-based awards. Our stock compensation plans have been established to provide certain of our employees, including our executive officers, with incentives to help align those employees’ interests with the interests of stockholders.
Summary Compensation Table
We are eligible, and have chosen, to comply with the scaled executive and director compensation disclosure rules applicable to a “smaller reporting company,” as defined in applicable SEC rules.
The following provides information concerning the compensation paid to our “named executive officers” for the transition period running from July 1, 2022 through December 31, 2022 (the “2022TP” or “2022 transition period”) and the fiscal years ended June 30, 2022 and June 30, 2021:
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Name and
Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) (3) | | Option Awards ($) (4) | | All Other Comp ($) (5) | | Total ($) |
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| Sadiq (Sid) Toama, | | 2022TP | | $ | 269,000 | | | $ | — | | | $ | — | | | $ | — | | | $ | 25,000 | | | $ | 294,000 | |
President and CEO (1) | | 2022 | | $ | 115,000 | | | $ | — | | | $ | 2,625,000 | | | $ | — | | | $ | 13,000 | | | $ | 2,753,000 | |
| | 2021 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A |
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| Erica Naidrich, | | 2022TP | | $ | 200,000 | | | $ | — | | | $ | — | | | $ | — | | | $ | 23,600 | | | $ | 223,600 | |
Chief Financial Officer (2) | | 2022 | | $ | 44,000 | | | $ | 100,000 | | | $ | 190,000 | | | $ | — | | | $ | 4,000 | | | $ | 338,000 | |
| | 2021 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A |
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| (1) | Mr. Toama was elected President of the Company in March 2022 and was appointed Chief Executive Officer in May 2022. On March 22, 2022, Mr. Toama was also granted 2,500,000 Restricted Stock Units (“RSUs”) in connection with his election as President. |
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| (2) | Ms. Naidrich was elected Chief Financial Officer of the Company in May 2022. On May 27, 2022, Ms. Naidrich was also granted 200,000 RSUs in connection with her election as Chief Financial Officer. |
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| (3) | The amounts in this column represent the aggregate grant-date fair value of RSUs awarded to each named executive officer, computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. See Note 15. Stockholders Equity of the Notes to the Financial Statements included in the 2022 Form 10-KT for a discussion of the assumptions made in determining the grant-date fair value of the Company’s equity awards. |
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| (4) | The amounts in this column represent the aggregate grant-date fair value of option awards granted to each named executive officer, computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. See Note 15. Stockholders Equity of the Notes to the Financial Statements included in the 2022 Form 10-KT for a discussion of the assumptions made in determining the grant-date fair value of the Company’s equity awards. |
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| (5) | The amount reported in the "All Other Comp" column for each NEO includes:
(a) For Mr. Toama: (i) car allowance payments totaling $6,000 and $4,000 for the 2022 transition period and 2022 fiscal year, respectively; (ii) payments for the cost of reimbursable medical, dental, and other benefits totaling $14,000 and $6,000 for the 2022 transition period and 2022 fiscal year, respectively; and (iii) Company paid life insurance premiums totaling $5,000 and $3,000 for the 2022 transition period and 2022 fiscal year respectively.
(b) For Ms. Naidrich: (i) car allowance payments totaling $6,000 and $4,000,for the 2022 transition period and 2022 fiscal year, respectively; (ii) payments for the cost of reimbursable medical, dental, and other benefits totaling $17,600 for the 2022 transition period. |
Employment Agreements
Sadiq (“Sid”) Toama
The Company entered into an Executive Employment Agreement (“EEA”), effective as of January 1, 2022, with Sadiq (“Sid”) Toama to serve as its President. He was later elected Chief Executive Officer of the Company on May 19, 2022. The EEA is for an initial term of five (5) years, which automatically renews for additional one (1) year periods unless either party delivers written notice to the other at least ninety (90) days’ prior to the end of a term, that the applicable term will not be extended. Notwithstanding the foregoing, the EEA provides that, on or before the third (3rd) anniversary date of the EEA, the Company may offer to extend the term for an additional period of five (5) years, which Mr. Toama may accept or reject. If the Company does not offer such extension, or if Mr. Toama rejects the extension offered by the Company, Mr. Toama may resign, and such resignation will be deemed to be with good reason (as defined in the EEA), or he may not resign, in which case the terms of the EEA will continue.
Mr. Toama’s annual base salary for the transition period ended December 31, 2022 was $500,000, Mr. Toama is entitled to receive an annual bonus, subject to bonus increases at least annually upon mutually agreed-to performance milestones, as well as discretionary bonuses. Mr. Toama also received restricted stock units (“RSUs”) for 2,500,000 shares, which shares vest one-third on the first anniversary date of the EEA and two-thirds in two (2) equal installments on the second and third anniversary dates of the EEA. Mr. Toama may participate, to the extent eligible, in all employee benefit plans and programs provided by the Company to its Senior Executives. For the transition period ended December 31, 2022, Mr. Toama also received an auto allowance of $1,000 per month and life insurance benefits of $9,135 per year.
On February 10, 2023 the Company entered into an agreement that amends the terms of Mr. Toama's EEA with the Company (the "Toama Amendment"). The Toama amendment provides that, among other things, Mr. Toama shall (i) serve as the Chief Executive Officer of the Company, (ii) have a base salary of $750,000 and a car allowance of $3,000 per month, and (iii) be eligible for an annual incentive bonus of up to 200% of his base salary based on achievement of annual Company and individual performance objectives as determined by the Compensation Committee.
If Mr. Toama’s employment is terminated by the Company other than for cause (as defined in the EEA) or by him for good reason (as defined in the EEA), he is entitled to severance in an amount equal to his then-current base salary for a minimum of twelve (12) months or, if longer, until the end of the term, plus a pro rata bonus, immediate vesting of options and stock grants, and COBRA continuation coverage under its health plans at the Company's expense for an eighteen (18) month period. Upon a termination of Mr. Toama’s employment due to death or disability, all equity awards that would have vested during the twenty-four (24) months following such termination shall immediately vest. Upon a "Change of Control" (as defined in the EEA), all of Mr. Toama’s then-unvested shares or options shall immediately vest, all performance bonuses (both current and future) shall be immediately due and payable, and if, after a Change of Control, Mr. Toama terminates his employment with the Company, he shall receive the severance benefits described above.
The EEA also provides that during his employment and, if his employment is terminated for cause (as defined in the EEA), for one (1) year following his termination date, or, if his employment is terminated for any other reason, for the longer of six (6) months or the period during which he is receiving severance payments, Mr. Toama cannot: (i) compete, directly or indirectly, anywhere in the U.S. as an employee, consultant, or director or have any financial interest in a competitive business; or (ii) hire, solicit for services, encourage the resignation of any employee or consultant (devoting more than seventy (70%) percent of consultant’s time) to a consulting business.
Further, under the terms of the Toama Amendment, Mr. Toama will be entitled to a one-time Retention Bonus upon the occurrence of a "Triggering Event" (as defined in the amendment), subject to Mr. Toama's continuous employment through the occurrence thereof. The amount of Mr. Toama's retention bonus, if any, will be, $2,250,000 if the Triggering Event is a "Change of Control", or, $1,500,000 if the Triggering Event is a "Financing Transaction" (each as defined in the amendment). In addition, if no Change of Control or Financing Transaction has been consummated by February 10, 2024, or if Mr. Toama's employment is terminated by the Company other than for cause (as defined in the EEA) or he resigns for good reason (as defined in the EEA) prior to a Triggering Event, the retention bonus, if paid, will be in lieu of Mr. Toama's annual bonus for the 2023 fiscal year.
Erica Naidrich
The Company entered into an EEA, effective as of May 23, 2022, with Erica Naidrich to serve as its Chief Financial Officer. The EEA is for an initial term of three (3) years, which automatically renews for additional one (1) year periods
unless either party delivers written notice to the other at least sixty (60) days prior to the end of a term, that the applicable term will not be extended.
Ms. Naidrich's annual base salary for the transition period ended December 31, 2022 was $400,000. She also received a one-time signing bonus of $100,000 on June 30, 2022. She is also eligible for discretionary bonuses as determined by the Compensation Committee and an annual bonus of thirty (30%) percent of her base salary subject to meeting the specified performance objectives of such bonus, and her continued employment at the time payment is due. Ms. Naidrich was granted 200,000 RSUs, which vest over three (3) years. She may participate, to the extent eligible, at a level commensurate with her position, in all employee benefit programs of the Company. She also receives an auto allowance of $1,000 per month.
On February 13, 2023 the Company entered an agreement that amends the terms of Ms. Naidrich's EEA with the Company (the “Naidrich Amendment”). The Naidrich Amendment provides that, among other things, Ms. Naidrich shall (i) receive a base salary of $450,000 and a car allowance of $3,000 per month, (ii) be entitled to annual reimbursement of $5,481 for life insurance, and (iii) be eligible for an annual incentive bonus of up to 100% of her base salary based on achievement of annual Company and individual performance objectives as determined by the Compensation Committee.
If Ms. Naidrich’s employment is terminated by the Company other than for cause (as defined in the EEA) or by her for good reason (as defined in the EEA), she is entitled to severance in an amount equal to six (6) months of her then-current base salary, a pro rata bonus for the year of her termination, immediate vesting of any equity awards, and COBRA continuation coverage under its health plans at the Company's expense for a thirty (30) day period. Upon a termination of Ms. Naidrich’s employment due to her death or disability, all equity awards that would have vested during the twelve (12) months following such termination shall immediately vest.
Ms. Naidrich's EEA provides that during the term of employment and for three (3) months after termination, Ms. Naidrich shall not compete with the Company nor solicit employees of the Company.
Further, under the terms of the Naidrich Amendment, Ms. Naidrich will be entitled to a one-time Retention Bonus upon the occurrence of a "Triggering Event" (as defined in the amendment), subject to Ms. Naidrich's continuous employment through the occurrence thereof. The amount of Ms. Naidrich's retention bonus, if any, will be, $900,000, if the Triggering Event is a "Change of Control," or, $450,000 if the Triggering Event is a "Financing Transaction" (each as defined in the EEA). In addition, if no Change of Control or Financing Transaction has been consummated by February 10, 2024, or if Ms. Naidrich's employment is terminated by the Company other than for cause (as defined in the EEA) or she resigns for good reason (as defined in the EEA) prior to a Triggering Event, the retention bonus, if paid, will be in lieu of Mr. Naidrich's annual bonus for the 2023 fiscal year.
Outstanding Equity Awards at Fiscal Year End
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| | OPTION AWARDS | | STOCK AWARDS |
| Name | | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable | | Number of Securities Underlying Unexercised Options Unexercisable | | | Option Exercise Price | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) |
Sadiq (Sid) Toama1 | | 3/21/2022 | | — | | — | | | — | | | — | | | 2,500,000 | | | $ | 300,000 | |
Erica Naidrich2 | | 5/23/2022 | | — | | — | | | — | | | — | | | 200,000 | | | $ | 24,000 | |
| | | | | | | | | | | | | | |
(1) Granted under the Company’s equity plan, Mr. Toama’s awards consist of
2,500,000 RSUs granted on March, 31, 2022, which vest in three (3) equal annual installments, beginning on March 31, 2023. |
|
(2) Granted under the Company’s equity plan, Ms. Naidrich’s awards consist of
200,000 RSUs granted on May, 27, 2022, which vest 25.0% on April 1, 2023, 37.5% on April 1, 2024 and 37.5% on April 1, 2025. |
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| (3) Determined by multiplying the $0.12 closing price of the Company’s common stock on December 31, 2022 by the number of shares of common stock underlying the RSUs. |
For information regarding the vesting acceleration provisions applicable to the equity awards held by our named executive officers, please see “Employment Agreements” above.
Pension Benefits
Each of Troika Media Group Inc., Converge Direct, LLC, and Mission-Media USA, Inc., has a 401(k) benefit plan. We currently do not make any matching contributions to any of the foregoing retirement plans and did not make any matching contributions with respect to the 2022 plan year.
Nonqualified Deferred Compensation
We do not have any non-qualified defined contribution plans or other deferred compensation plans.
Director Compensation
Our director compensation program is intended to enhance our ability to attract, retain, and motivate non-employee directors of exceptional ability and to promote the common interest of directors and stockholders in enhancing the value of the common stock. The Board of Directors reviews director compensation annually based on recommendations by the Nominating and Governance Committee. The Nominating and Governance Committee has the sole authority to engage a consulting firm to evaluate director compensation.
Under our non-employee director compensation program, each non-employee director is eligible to receive compensation for Board and Committee service consisting of annual cash retainers and equity awards. Directors also may be paid for serving on ad hoc committees of the Board of Directors. Sadiq Toama, our Chief Executive Officer, does not receive any additional compensation for his service as a director. Mr. Toama's total compensation can be found under "Executive Compensation" above.
Under our non-employee director compensation program, in 2022 our non-employee directors were eligible to receive the following annual cash compensation for their service on the Board of Directors and the Board’s standing committees:
| | | | | |
| Position | Annual Cash Retainer |
| Chairman of the Board | $300,000 |
| Member(s) of Special Committee | $480,000 |
| Wendy Parker | $60,000 |
| All other directors | $30,000 |
| Note: Additional Compensation is not paid for sitting on sub-committees. | |
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In connection with their appointment to the Board, it was determined that in lieu of the standard compensation for non-employee directors, each of Messrs. Lyon and Stein will receive $40,000 per month in cash compensation, plus $5,000 per day in the event that they are obligated to participate in litigation proceedings as witnesses, or otherwise.
The following table shows the total compensation for non-employee directors during the transition period ended December 31, 2022:
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| Name | | Year | | Fees Earned or Paid in Cash($) | | Option
Awards($) | | Stock
Awards($) | | Total($) |
| Grant Lyon | | 2022TP | | $ | 69,000 | | | $ | — | | | $ | — | | | $ | 69,000 | |
| Randall Miles | | 2022TP | | $ | 137,500 | | | $ | 564,000 | | | $ | — | | | $ | 701,500 | |
| Thomas Ochocki | | 2022TP | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Martin Pompadur | | 2022TP | | $ | 15,000 | | | $ | — | | | $ | — | | | $ | 15,000 | |
| Jeffrey S. Stein | | 2022TP | | $ | 69,000 | | | $ | — | | | $ | — | | | $ | 69,000 | |
| Wendy Parker | | 2022TP | | $ | 30,000 | | | $ | — | | | $ | 37,000 | | | $ | 67,000 | |
| Sabrina Yang | | 2022TP | | $ | 15,000 | | | $ | — | | | $ | 37,000 | | | $ | 52,000 | |
| John Belniak+ | | 2022TP | | $ | 7,500 | | | $ | — | | | $ | — | | | $ | 7,500 | |
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| + Denotes former director | | | | | | | | | | |
Limitation of Officers’ and Directors’ Liability and Indemnification
Nevada Revised Statutes (“NRS”) 78.7502(1) provides that a corporation may indemnify, pursuant to the provisions of that statute, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. NRS 78.7502(2) provides that a corporation may indemnify, pursuant to the provisions of that statute, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by the person in connection with the defense or settlement of the action or suit if the person (a) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the defense. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person is liable pursuant to NRS 78.138 or did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, or that, with respect to any criminal action or proceeding, he or she had reasonable cause to believe that the conduct was unlawful. Indemnification made pursuant to NRS 78.7502 may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
NRS 78.7502(3) provides that any discretionary indemnification pursuant to NRS 78.7502 (unless ordered by a court or advanced pursuant to NRS 78.751(2)), may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made (i) by the stockholders; (ii) by the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding; (iii) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or (iv) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. NRS 78.751(2) provides that unless otherwise restricted by the corporation’s articles of incorporation or bylaws, or an agreement made by the corporation, the corporation may pay the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the corporation.
Our amended and restated articles of incorporation provide that our directors or officers shall not be personally liable to us or our stockholders for monetary damages for breach of such director’s or officer’s fiduciary duty, except for liability (i) for any breach of the duty of loyalty to our company or our stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which the officer or director derived any improper personal benefit. Our amended and restated articles of incorporation and our amended and restated bylaws provide for the indemnification of any of our directors and officers who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the our company, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, subject to certain express limitations and conditions. We believe that these provisions in our articles of incorporation and bylaws, as amended, are necessary to attract and retain qualified persons as directors and officers.
These limitations of liability, indemnification, and expense advancements may discourage a stockholder from bringing a lawsuit against directors for breach of their fiduciary duties. The provisions may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if settlement and damage awards against directors and officers pursuant to these limitations of liability and
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer, or controlling person in a successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Insurance: The Registrant maintains directors and officer’s liability insurance, which covers directors and officers of the Registrant against certain claims or liabilities arising out of the performance of their duties.
Compensation Committee Interlocks and Insider Participants. Randall Miles, Wendy Parker, and Martin Pompadur, independent directors, served as members of the Compensation Committee for the transition period ended December 31, 2022. Neither had any interlocking relationship and there was no inside participation.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The table sets forth the number of outstanding shares of common stock beneficially owned, and the percentage of the class beneficially owned, as of December 31, 2022, by:
•each named executive officer included in "Executive Compensation- Summary Compensation Table";
•each current director; and
•all of our current executive officers and directors, as a group.
We have based our calculations of the percentage of beneficial ownership on 139,302,225 shares of our common stock. The number of shares of common stock beneficially owned by each person is determined under the rules of the SEC. Under
these rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power.
| | | | | | | | | | | | | | |
| | Shares of Common Stock |
| Names of Beneficial Owners | | Number | | % |
Peter Coates+ | | 10,597,996 | | 7.6% |
Thomas Marianacci+ (1) | | 7,020,000 | | 5.0% |
Thomas Ochocki (2) | | 3,404,001 | | 2.4% |
Sadiq (Sid) Toama (3) | | 1,970,000 | | 1.4% |
Randall Miles (4) | | 416,667 | | * |
Martin Pompadur (5) | | 70,000 | | * |
Sabrina Yang (6) | | — | | * |
Wendy Parker (6) | | — | | * |
| Grant Lyon | | — | | * |
| Jeffrey S. Stein | | — | | * |
Erica Naidrich (7) | | — | | * |
| | | | |
| All Officers and Directors as a Group | | 23,478,664 | | 16.9% |
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| * Less than one (1%) of the issued and outstanding shares of common stock. |
| + Denotes a five (5%) percent or greater stockholder of the Company. | | | | |
(1) Of these shares, ten (10%) percent are held in escrow until March 21, 2023, under the terms of an escrow agreement under the Converge Acquisition. Does not include 1,000,000 RSUs which vest in three (3) equal installments on March 21, 2023, 2024, and 2025 pursuant to the Executive Employment Agreement.
(2) These shares include common stock held by Mr. Ochocki, Union Investment Management, and Union Eight Ltd, affiliates of Mr. Ochocki.
(3) Of these shares ten (10%) percent are held in escrow until March 21, 2023, under the terms of an escrow agreement under the Converge Acquisition. Does not include 2,500,000 RSUs which vest in three (3) equal installments on March 21, 2023, 2024, and 2025 pursuant to the Executive Employment Agreement.
(4) 2,000,000 options vesting monthly over thirty-six (36) months.
(5) Mr. Pompadur was granted 20,000 warrants to purchase common stock of the Company which vested nine (9) months from the date of issuance upon his joining the Board of Directors, exercisable for five (5) years at $0.75 per share; and 50,000 shares were issued upon conversion of RSUs.
(6) Ms. Yang and Ms. Parker were each issued 50,000 RSUs on August 1, 2022, which will vest on August 1, 2023.
(7) Ms. Naidrich was granted 200,000 RSUs on May 27, 2022, which will vest 25% on April 1, 2023, and in two (2) equal installments of 37.5% on April 1, 2024 and April 1, 2025.
Item 13. Certain Relationships and Related Person Transactions and Director Independence.
The following is a description of the transactions we have engaged in during the six months ended December 31, 2022 with our directors, executive officers and beneficial owners of more than five (5%) percent of our voting securities and their affiliates.
See “Executive Compensation” for the terms and conditions of employment agreements and senior management consulting agreements and options and warrants issued to officers, directors, consultants, and senior management of the Company.
Converge Direct, LLC Acquisition
Certain terms of the Converge Acquisition resulted in amounts remaining to be paid to the Converge Sellers. At the time of the Acquisition the Company owed to Converge Sellers (i) an approximate $4.34 million payment under the terms of the Membership Interest Purchase Agreement dated as of November 22, 2021 (“MIPA”) on account of excess working capital retained by the Company and (ii) a $5.0 million payment pursuant to a side letter agreement, dated as of March 9, 2022 (the “Side Letter”), by the Borrower and Converge Direct, LLC which specified that $5.0 million of the purchase price will be retained by the Company for working capital and be repaid twelve (12) months from the Acquisition date.
Union Ventures Limited purchase of Mission-Media Holdings Limited
On August 1, 2022, Troika-Mission Holdings, Inc, ("TMH or Seller"), a subsidiary of the Company, entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Union Ventures Limited (“UVL”), a company organized under the 2006 Companies Act in the United Kingdom (“Buyer”). UVL is a company owned by Union Investments Management Limited which is shareholder and affiliated with Daniel Jankowski, a former director of the Company, and Thomas Ochocki, a current Director of the Company. Per the agreement, the Buyer shall purchase from Sellers, all of Sellers' right, title, and interest in and to Sellers' respective Mission UK Shares, including any and all liabilities and assets on an as is basis (the "Mission UK Shares") in Mission-Media Holdings Limited, a private limited company incorporated under the Laws of England and Wales ("Mission UK"). As consideration for all the Mission UK Shares, Buyer shall pay Sellers an aggregate purchase price, of $1,000 USD.
Media Resource Group
Mr. Tom Marianacci, who is the Head of Demand Solutions of the Company and one of the Converge sellers, currently holds more than 5% of the Company’s equity. Mr. Marianacci serves as an owner and executive director of Media Resource Group (“MRG”) company that entered into a service agreement with the Company, dated January 1st, 1997, under which MRG agreed to provide certain media services to the Company. The Company paid approximately $0.8 million to MRG for the six months ended December 31, 2022.
Policy for Approval of Related Person Transactions
Pursuant to the charter of our audit committee, the audit committee is responsible for reviewing and approving in advance, all transactions in which we are a participant and in which any of the following persons has or will have a direct or indirect material interest:
•our executive officers;
•our directors;
•the beneficial owners of more than five (5%) percent of our securities;
•the immediate family members of any of the foregoing persons; and
•any other persons whom our Board of Directors determines may be considered related persons.
For purposes of this policy, “immediate family members” means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and any person (other than a tenant or employee) sharing the household with the executive officer, director or five percent beneficial owner.
In reviewing and approving such transactions, our audit committee shall obtain, or shall direct our management to obtain on its behalf, all information that the committee believes to be relevant and important to a review of the transaction prior to its approval. Following receipt of the necessary information, a discussion shall be held of the relevant factors if deemed to be necessary by the committee prior to approval. If a discussion is not deemed to be necessary, approval may be given by written consent of the committee. This approval authority may also be delegated to the chair of the audit committee in some circumstances. No related person transaction shall be entered into prior to the completion of these procedures.
Our audit committee or its chair, as the case may be, shall approve only those related person transactions that are determined to be in, or not inconsistent with, our best interest and our stockholders’ best interests, taking into account all available facts and circumstances as the committee or the chair determines in good faith to be necessary. These facts and circumstances will typically include, but not be limited to, the benefits of the transaction to us; the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or executive officer; the availability of other sources for comparable products or services; the terms of the transaction; and the terms of comparable transactions that would be available to unrelated third parties or to
employees generally. No member of our audit committee shall participate in any review, consideration or approval of any related person transaction with respect to which the member or any of his or her immediate family members is the related person.
Item 14. Principal Accountant Fees and Services
The following table sets forth the aggregate fees billed to us by RBSM, our current independent auditor, for professional services rendered for the transition period ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021.
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| Six Months Ended | Year Ended |
| December 31, | June 30, |
| 2022 | 2022 | 2021 |
Audit Fees (1) | $ | 347,350 | | $ | 460,000 | | $ | 360,000 | |
Audit Related Fees (2) | — | | 520,000 | | — | |
Tax Fees (3) | — | | — | | — | |
| All Other Fees | — | | — | | 150,000 | |
| Total Fees | $ | 347,350 | | $ | 980,000 | | $ | 510,000 | |
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| (1) | Includes services relating to the audit of annual consolidated financial statements, review of quarterly consolidated financial statements, statutory audits, comfort letters, and consents and review of documentation filed with SEC-registered and other securities offerings. |
| (2) | Includes services related to assistance with general accounting matters, work performed on acquisitions and divestitures, employee benefit plan audits, and assistance with statutory audit matters. |
| (3) | Includes services for tax compliance, tax advice, and tax planning. |
Audit Committee Pre-Approval Policies and Procedures
The audit committee approves in advance all audit and non-audit services performed by the independent registered public accounting firm. There are no other specific policies or procedures relating to the pre-approval of services performed by the independent registered public accounting firm.
(a) Exhibits
The following Exhibits are filed with this Report Amendment No. 1 to Form 10-K/T or incorporated by reference:
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| Exhibit No. | | Description |
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| | Escrow Agreement, dated as of March 21, 2022, between Alter Domus (US) LLC, , Blue Torch Finance LLC, Troika Media Group, Inc., and Maarten Terry, Michael Carrano, Sadiq Toama, and Thomas Marianacci as the sellers, with Thomas Marianacci as the representative for the aforenamed sellers. (16) |
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| 101** | | The following materials from Troika’s Form 10-K Report for the year ended June 30, 2022, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Changes in Stockholders' Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements. |
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| 104 | | Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101. |
_____________
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| * | Filed herewith |
| ** | Included in Part IV in our Transition Report on Form 10-K for the transition period ended December 31, 2022, filed with the SEC on March 7, 2023. |
| ^ | Furnished herewith pursuant to item 601(b) of Regulation S-K |
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| (1) | Incorporated by reference to the Registrant’s Form 8-K filed on April 2, 2015 |
| (2) | Incorporated by reference to the Registrant’s Form 8-K filed on June 20, 2017 |
| (3) | Incorporated by reference to the Registrant’s Form 8-K filed on September 18, 2017 |
| (4) | Incorporated by reference to the Registrant’s Form 8-K filed on July 6, 2018 |
| (5) | Incorporated by reference to the Registrant’s Draft Registration Statement No. 333-254889 filed on August 1, 2019 |
| (6) | Incorporated by reference to the Registrant’s Registration Statement No. 333-254889 filed on March 31, 2021, as amended on April 8, 2021 |
| (7) | Incorporated by reference to the Registrant’s Form 8-K filed on May 25, 2021 |
| (8) | Incorporated by reference to the Registrant’s Schedule 14C Information Statement filed on January 6, 2022 |
| (9) | Incorporated by reference to the Registrant’s Form 8-K filed on February 24, 2022 |
| (10) | Incorporated by reference to the Registrant’s Form 8-K filed on March 18, 2022 |
| (11) | Incorporated by reference to the Registrant’s Form 8-K filed on March 24, 2022 |
| (12) | Incorporated by reference to the Registrant’s Form 8-K filed on April 27, 2022 |
| (13) | Incorporated by reference to the Registrant’s Form 8-K filed on May 25, 2022 |
| (14) | Incorporated by reference to the Registrant’s Form 8-K filed on June 13, 2022 |
| (15) | Incorporated by reference to the Registrant’s Form 8-K filed on September 27, 2022 |
| (16) | Incorporated by reference to the Registrant’s Form 10-K filed on September 28, 2022, as amended on November 22, 2022 |
| (17) | Incorporated by reference to the Registrant’s Form 10-Q filed on November 14, 2022 |
| (18) | Incorporated by reference to the Registrant’s Form 8-K filed on February 16, 2023 |
| (b) | Financial Statement Schedules |
(b)Financial Statement Schedules
Financial Statement Schedules are omitted because the information is included in our financial statements or notes to those financial statements.
