Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers.
Effective June 5, 2023, Rosie O'Meara provided notice of her resignation as a
member of the Board of Directors (the "Board") of AiAdvertising, Inc. (the
"Company'). Ms. O'Meara's resignation was not as a result of any disagreement
with the Company's Board or management.
Appointment of James B. Renacci and Thomas O. Hicks, Jr. to the Board of
Directors
As previously disclosed, on April 10, 2023, the Company entered into a
securities purchase agreement (the "Purchase Agreement") with Hexagon Partners,
Ltd., (the "Purchaser"), pursuant to which the Company agreed to issue and sell
to the Purchaser up to 2,918,560 shares of its Series I Preferred Stock (the
"Series I Preferred Stock") for an aggregate purchase price of up to $9,250,000
(the "Purchase Price"), in three tranches. Tranche A comprises 2,272,727 shares
of Series I Preferred Stock at a purchase price of $2.20 per share of Series I
Preferred Stock purchased at an initial closing on April 11, 2023. The Company
also granted the Purchaser a six-month option from the date of the initial
closing, which the Purchaser has the right to assign subject to certain
restrictions, to purchase (i) up to 333,333 additional shares of Series I
Preferred Stock at a purchase price of $6.00 per share of Series I Preferred
Stock, and (ii) up to 312,500 shares of Series I Preferred Stock at a purchase
price of $7.20 per share of Series I Preferred Stock. The Purchase Agreement
also gave the Purchaser the right to appoint two directors to the Company's
Board for so long as at least 50% of the shares purchased thereunder have not
been redeemed by the Company or converted into common stock of the Company.
In accordance with terms of the Purchase Agreement, the Company's Bylaws were
amended to increase the size of the Board to six and James B. Renacci and Thomas
O. Hicks, Jr. were appointed to the Board on June 2, 2023. Messrs. Renacci and
Hicks will serve as members of the Board until the next annual meeting of the
Company's stockholders, and until their successors are elected and qualified or
until their death, resignation or removal.
James B. Renacci, age 64, is the founder and president of LTC Management
Services, Inc., a management and financial services consulting services company
since 1985. With more than 30 years of experience in leadership of multiple
businesses, Mr. Renacci's business experience includes manufacturing,
healthcare, construction, entertainment and CPA consulting services. He also
has in-depth knowledge of mergers and acquisitions. Renacci represented the
16th District of the State of Ohio in the United States House of Representatives
from January 3, 2011 until January 3, 2019, where he served on the Ways and
Means, Budget and Financial Services Committees. Prior to serving in Congress,
Mr. Renacci owned and operated more than 60 businesses, including multiple auto
dealerships, nursing facilities, sports and entertain businesses and a CPA firm.
From 2003 to 2008, Mr. Renacci served as a managing board member of the Arena
Football League. From 2020 to 2022, Mr. Renacci served as a board member of Hill
International Inc. (NYSE: HIL) and as its Audit Committee Chairman. Mr. Renacci
is a current board member at Alithya Group, Inc. (NASDAQ: ALYA), Custom Glass,
Inc. and the Franklin Center for Global Policy Exchange. Mr. Renacci is a
certified public accountant and holds a bachelors degree in business
administration from Indiana University of Pennsylvania.
We believe Mr. Renacci is qualified to serve on our Board due to, among other
things, his business experience, which we anticipate will help us expand the
breadth and depth of our reach as a Company, positioning us to scale our
platform as we enter the next phase of growth and create additional value for
our shareholders.
In connection with his appointment to the Board, the Board appointed Mr. Renacci
to serve as a member of the Special Committee, which was formed by the Board and
granted full authority to act on behalf of the Board and take all actions deemed
advisable relating to the previously disclosed rights agreement. The Board also
appointed Mr. Renacci to serve as a member of the Nominating and Corporate
Governance Committee and to serve as the Chairperson of the Audit Committee.
Thomas O. Hicks, Jr., age 45, is a founder, chairman and CEO of 90 Degree North
Holdings LCC, an investment and advisory firm, and a co-founder of Sempre, Inc.,
a global provider of physical and cyber protection for critical infrastructure.
He is a current board member of Drilling Tools International, Inc., a leading
provider of downhole drilling tools to the international land and offshore
markets, which recently announced a merger with the publicly-traded ROC Energy
Acquisition Corporation, LLC. From 2005 through 2019, Mr. Hicks was a partner of
Hicks Holdings LLC, a family investment firm, focusing on equity investments in
media, technology, consumer brands, manufacturing and energy. Prior to that, he
was an analyst at Greenhill & Co, LLC, a New York-based advisory and investment
firm. He previously served on the boards of Resolute Energy Corporation, Carol's
Daughter Holdings, Berkshire Resources LLC, Standard Industrial Manufacturing
Partners LTD, and Sight Sciences, Inc. Mr. Hicks was on the national board of
the American Enterprise Institute's Enterprise Club and was a founding member
for its Dallas chapter in 2014. He served as Chapter Chair of Young Presidents
Organization's Dallas Chapter in 2013-14. Mr. Hicks was chairman of Big Brothers
Big Sisters North Texas Campaign for Children in Crisis in 2006-2010,
successfully raising over $35 million to support mentoring for children in
Dallas / Fort Worth. Mr. Hicks served on the board of Big Brothers Big Sisters
of North Texas from 2006 through 2011, and the board of the SM Wright
Foundation, organized to engage with the citizens in the Fair Park area of
Dallas from 2005-2008. Mr. Hicks, a former Golden Gloves boxer, graduated from
the University of Texas at Austin in 2001.
We believe Mr. Hicks is qualified to serve on our board of directors due to,
among other things, his valuable experience and insights into technology,
finance and the capital markets.
In connection with his appointment to the Board, the Board appointed Mr. Hicks
to serve as a member of the Special Committee, Compensation Committee, and
Nominating and Corporate Governance Committee.
Each of the new directors will receive compensation for their service as a
director or committee member in accordance with the Company's standard director
compensation of $30,000 annually.
Except for the Purchase Agreement, Messrs. Renacci and Hicks were not selected
pursuant to any arrangement or understanding between them and any other person.
Messrs. Renacci and Hicks were recommended for nomination by the Purchaser and
evaluated and nominated by the Company's Nominating and Corporate Governance
Committee. There are no arrangements or understandings between Messrs. Renacci
and Hicks and any other persons pursuant to which Messrs. Renacci and Hicks were
appointed directors of the Company, and there are no family relationships
between Messrs. Renacci and Hicks and any director or executive officer of the
Company.
There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which such individuals were
selected as directors. There are no transactions involving any of the
individuals listed above that would be required to be reported under
Item 404(a) of Regulation S-K of the Securities Act of 1933, as amended.
Item 7.01 Regulation FD Disclosure.
On June 8, 2023, the Company issued a press release announcing the appointments
of Messrs. Renacci and Hicks to the Board. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall
not be deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended ("Exchange Act") or otherwise subject to the
liabilities of that section, and shall not be deemed to be incorporated by
reference into any filing made by us under the Exchange Act or Securities Act,
regardless of any general incorporation language in any such filing, except as
shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Exhibit
99.1 Press Release issued June 8, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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