Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers





Director Appointment

On May 29, 2020, the Board of Directors (the "Board") of SITO Mobile, Ltd. (the "Company") appointed Stephen D. Baksa to the Board to fill a vacancy, to hold office until the Company's 2020 Annual Meeting or until his successor has been elected and qualified. Mr. Baksa has also been appointed to serve on the Audit Committee of the Board.

Mr. Baksa, who has previously served on the Board and is a significant stockholder of the Company, was a General Partner at The Vertical Group, a private equity and venture capital firm focused on the fields of medical technology and biotechnology. For more than 30 years, The Vertical Group has been an early stage investor and major shareholder of some of the medical technology industry's most successful companies. Before Mr. Baksa joined The Vertical Group, he was co-founder of Paddington Partners, a firm engaged in special situation investing focused on public health care equities. Mr. Baksa holds an M.B.A. from The Rutgers School of Business and a B.A. in Economics from Gettysburg College.

There are no arrangements or understandings between Mr. Baksa and any other person pursuant to which Mr. Baksa was selected as a director.

Mr. Baksa is the holder of a secured convertible promissory note issued by the Company on March 31, 2020, in the original principal amount of $526,829 (the "Note"). The Note accrues simple interest on any unpaid principal balance at the rate of twelve percent (12.0%) per annum and has a maturity date of March 31, 2022. A portion of the principal amount and accrued interest outstanding under the Note is convertible at the election of the holder into shares of the Company's common stock, par value $0.01 per share ("Common Stock"), at $0.25 per share. The Note is one of a series of convertible promissory notes issued pursuant to that certain Note and Warrant Purchase Agreement, dated as of March 31, 2020, between the Company and certain investors (the "Note Purchase Agreement"). Pursuant to the Note Purchase Agreement, the Company also issued to Mr. Baksa a warrant (the "Warrant") to purchase 625,000 shares of Common Stock, subject to customary adjustments, at an exercise price of $0.63 per share. The Warrant expires on the one-year anniversary of the date of issuance or upon the Company's entering into certain fundamental transactions. Mr. Baksa is also party to that certain Investors' Rights Agreement dated as of March 31, 2020, pursuant to which the Company granted certain registration rights related to the shares of Common Stock issuable upon conversion or exercise of the Note and the Warrant.

Other than the foregoing, there are no transactions in which the Company is a party and in which Mr. Baksa has a material interest subject to disclosure under Item 404(a) of Regulation S-K.

Non-Employee Director Compensation Policy

The Board also approved a revised compensation policy for non-employee directors, pursuant to which non-employee directors will be compensated in the cash amount of $4,000 per month. Each of the Company's current Board members, including Mr. Baksa, will be compensated under this revised non-employee director compensation policy beginning as of June 1, 2020.


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