UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment
No. )
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☐ |
Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☒ |
Definitive
Proxy Statement |
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☐ |
Definitive
Additional Materials |
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Soliciting
Material under §240.14a-12 |
LOOP
MEDIA, INC.
(Name
of Registrant as Specified in its Charter)
(Name(s)
of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
☒ |
No
fee required |
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☐ |
Fee
paid previously with preliminary materials. |
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Fee
computer on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
LOOP
MEDIA, INC.
2600
West Olive Avenue, Suite 5470
Burbank,
CA 91505
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be held on September 19, 2024
To
the Stockholders of Loop Media, Inc.
You
are cordially invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of Loop Media, Inc. (the “Company”)
to be held on September 19, 2024, at 12:00 p.m., Eastern Time. We are planning to hold the Annual Meeting virtually via the Internet
at www.virtualshareholdermeeting.com/LPTV2024. You will not be able to attend the Annual Meeting at a physical location. At the Annual
Meeting, stockholders will act on the following matters:
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To
elect five director nominees to serve as directors until the next annual meeting of stockholders; |
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To
ratify the appointment of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending
September 30, 2024; |
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To
approve an amendment to the Company’s Restated Articles of Incorporation, as amended, to increase the number of shares of common
stock authorized for issuance thereunder to 225,000,000 shares (“Proposal 3”); |
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To
approve the adjournment of the Annual Meeting in the event that the number of shares of common stock present or represented by proxy
at the Annual Meeting and voting “FOR” the adoption of Proposal 3 is insufficient; |
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To
approve, on an advisory basis, the executive compensation of the Company’s named executive officers as described in the attached
proxy statement; |
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To
vote, on an advisory basis, on how often the Company will conduct an advisory vote on executive compensation (every year, every two
years or every three years); and |
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To
consider any other matters that may properly come before the Annual Meeting, including any adjournment or postponement thereof. |
Only
holders of our common stock, par value $0.0001 per share, of record at the close of business on August 20, 2024, are entitled to receive
notice of and to vote at the Annual Meeting or any postponement or adjournment thereof.
Your
vote is important. Whether or not you plan to attend the Annual Meeting, please vote electronically via the Internet or by telephone,
or please complete, sign, date and return the accompanying proxy card or voting instruction card in the enclosed postage-paid envelope.
If you attend the Annual Meeting and prefer to vote during the Annual Meeting, you may do so even if you have already voted your shares.
You may revoke your proxy in the manner described in the proxy statement at any time before it has been voted at the Annual Meeting.
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By
Order of the Board of Directors |
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/s/ Justis Kao |
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Justis
Kao |
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Chief
Executive Officer |
August
22, 2024
Burbank,
CA
PROXY
STATEMENT
TABLE
OF CONTENTS
LOOP
MEDIA, INC.
PROXY
STATEMENT
FOR
THE 2024 ANNUAL MEETING OF STOCKHOLDERS
GENERAL
INFORMATION
This
proxy statement (this “Proxy Statement”) contains information related to the Annual Meeting of Stockholders (the “Annual
Meeting”) to be held on September 19, 2024, at 12:00 p.m., Eastern Time. We are planning to hold the Annual Meeting virtually via
the Internet, or at such other time and place to which the Annual Meeting may be adjourned or postponed. In order to attend our Annual
Meeting, you must log in to www.virtualshareholdermeeting.com/LPTV2024 using the 16-digit control number on the proxy card or voting
instruction form that accompanied the proxy materials.
Proxies
for the Annual Meeting are being solicited by the Board of Directors (the “Board”) of Loop Media, Inc. (collectively, “we,”
“us,” “our” or the “Company”). This Proxy Statement is first being made available to stockholders
on or about August 22, 2024.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting To Be Held on September 19, 2024.
Our
proxy materials including our Proxy Statement for the Annual Meeting, our annual report for the fiscal year ended September 30, 2023,
and proxy card are available on the Internet at www.proxyvote.com. Under the Securities and Exchange Commission (the “SEC”)
rules, we are providing access to our proxy materials both by sending you this full set of proxy materials and by notifying
you of the availability of our proxy materials on the Internet.
About
the Meeting
We
are calling the Annual Meeting to seek the approval of our stockholders:
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To
elect five director nominees to serve as directors until the next annual meeting of stockholders; |
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To
ratify the appointment of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending
September 30, 2024; |
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To
approve an amendment to the Company’s Restated Articles of Incorporation, as amended (the “Articles of Incorporation”),
to increase the number of shares of common stock authorized for issuance thereunder to 225,000,000 shares (“Proposal 3”); |
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To
approve the adjournment of the Annual Meeting in the event that the number of shares of common stock present or represented by proxy
at the Annual Meeting and voting “FOR” the adoption of Proposal 3is insufficient; |
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To
approve, on an advisory basis, the executive compensation of the Company’s named executive officers as described in this Proxy
Statement; |
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To
vote, on an advisory basis, on how often the Company will conduct an advisory vote on executive compensation (every year, every two
years or every three years); and |
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To
consider any other matters that may properly come before the Annual Meeting, including any adjournment or postponement thereof. |
What
are the Board’s recommendations?
Our
Board believes that the election of the director nominees identified herein, the ratification of the appointment of Marcum LLP as our
independent registered public accounting firm for the fiscal year ending September 30, 2024, , the amendment to our Articles of Incorporation
to increase the number of shares of common stock authorized for issuance thereunder, and the adjournment of the Annual Meeting in the
event of insufficient proxies at the Annual Meeting to approve Proposal 3, are each advisable and in the best interests of the Company
and its stockholders and recommends that you vote FOR each of these proposals. Our Board believes that the compensation of our
named executive officers for the fiscal year ended September 30, 2023, as described in this Proxy Statement, was appropriate and recommends
that you vote FOR the resolution to approve such compensation. Our Board believes that an annual vote on conducting an advisory
vote on named executive officer compensation is advisable and in the best interests of the Company and its stockholders and recommends
that you vote for ONE YEAR for this proposal. If you are a stockholder of record and you return a properly executed proxy card
or vote by proxy over the Internet but do not mark the boxes showing how you wish to vote, your shares will be voted in accordance with
the recommendations of the Board, as set forth above. With respect to any other matter that properly comes before our Annual Meeting,
the proxy holders will vote as recommended by the Board or, if no recommendation is given, at their own discretion.
Who
is entitled to vote at the Annual Meeting?
Only
stockholders of record at the close of business on the record date, August 20, 2024 (the “Record Date”), are entitled to
receive notice of the Annual Meeting and to vote the shares of our common stock that they held on that date at the Annual Meeting, or
any postponement or adjournment of the Annual Meeting. Each share of common stock is entitled to one vote on each proposal. As of the
Record Date, we had shares of common stock outstanding.
Who
can attend the meeting?
All
stockholders as of the Record Date, or their duly appointed proxies, may attend the Annual Meeting.
Attendance
at the Annual Meeting shall solely be via the Internet at www.virtualshareholdermeeting.com/LPTV2024 using the 16-digit control number
on the proxy card or voting instruction form that accompanied the proxy materials. Stockholders will not be able to attend the Annual
Meeting at a physical location.
The
live webcast of the Annual Meeting will begin promptly at 12:00 p.m., Eastern Time on September 19, 2024. Online access to the webcast
will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for our stockholders to log in and test their
devices’ audio system. We encourage our stockholders to access the Annual Meeting in advance of the designated start time.
An
online portal will be available to our stockholders at www.proxyvote.com commencing approximately on or about August 21, 2024.
By accessing this portal, stockholders will be able to vote in advance of the Annual Meeting. Stockholders may also vote, and submit
questions, during the Annual Meeting at www.virtualshareholdermeeting.com/LPTV2024. To demonstrate proof of stock ownership, you will
need to enter the 16-digit control number received with your proxy card or voting instruction form to submit questions and vote at our
Annual Meeting. If you hold your shares in “street name” (that is, through a broker or other nominee), you will need authorization
from your broker or nominee in order to vote. We intend to answer questions submitted during the Annual Meeting that are pertinent to
the Company and the items being brought for stockholder vote at the Annual Meeting, as time permits, and in accordance with the Rules
of Conduct for the Annual Meeting. To promote fairness, efficiently use the Company’s resources, and ensure all stockholder questions
are able to be addressed, we will respond to no more than three questions from a single stockholder. We have retained Broadridge Financial
Solutions to host our virtual Annual Meeting and to distribute proxies and receive, count and tabulate votes.
What
constitutes a quorum?
The
presence at the Annual Meeting, in person or by proxy, of at least a majority of the voting power of all issued and outstanding shares
of our common stock entitled to vote at the Annual Meeting will constitute a quorum for the Annual Meeting.
Abstentions
will be counted for the purpose of determining whether a quorum is present. If brokers have, and exercise, discretionary authority on
at least one item on the agenda for the Annual Meeting, uninstructed shares for which broker non-votes occur will constitute voting power
present for the discretionary matter and will therefore count towards the quorum.
How
do I vote?
You
may vote on the Internet, by telephone, by mail or by attending the Annual Meeting and voting electronically, all as described below.
The Internet and telephone voting procedures are designed to authenticate stockholders by use of a control number and to allow you to
confirm that your instructions have been properly recorded. If you vote by telephone or on the Internet, you do not need to return your
proxy card or voting instruction card.
If
your shares are held in a stock brokerage account or by a bank or other nominee, you are the beneficial owner of shares held in “street
name,” and these proxy materials are being forwarded to you by your broker or other nominee, considered to be the stockholder of
record. As the beneficial owner, you have the right to tell your nominee how to vote. Your nominee has sent you instructions on how to
direct the nominee’s vote. You may submit a proxy to vote by following those instructions.
Vote
on the Internet
If
you are a stockholder of record, you may submit your proxy by going to www.proxyvote.com and following the instructions provided in the
proxy card that accompanied the proxy materials. . Have your proxy card or voting instruction card in hand when you access the voting
website. On the Internet voting site, you can confirm that your instructions have been properly recorded. If you vote on the Internet,
you can also request electronic delivery of future proxy materials. Internet voting facilities are available now and will be available
24 hours a day until 11:59 p.m., Eastern Time, on September 18, 2024.
Vote
by Telephone
If
you are a stockholder of record, you can also vote by telephone by dialing 1-800-690-6903. Have your proxy card or voting instruction
card in hand when you call. Telephone voting facilities are available now and will be available 24 hours a day until 11:59 p.m., Eastern
Time, on September 18, 2024.
Vote
by Mail
You
may choose to vote by mail, by marking your proxy card or voting instruction card, dating and signing it, and returning it in the postage-paid
envelope provided. If the envelope is missing and you are a stockholder of record, please mail your completed proxy card to Vote Processing,
c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If the envelope is missing and your shares are held with a broker, please mail your
completed voting instruction card to the address specified therein. Please allow sufficient time for mailing if you decide to vote by
mail as it must be received by 11:59 p.m., Eastern Time, on September 18, 2024.
Voting
at the Annual Meeting
You
will have the right to vote on the day of, or during, the Annual Meeting on www.virtualshareholdermeeting.com/LPTV2024. To demonstrate
proof of stock ownership, you will need to enter the 16-digit control number received with your proxy card or voting instruction form
to vote at our Annual Meeting.
Even
if you plan to attend our Annual Meeting, we recommend that you also submit your proxy as described above so that your vote will be counted
if you later decide not to attend our Annual Meeting.
The
shares voted electronically, telephonically or represented by the proxy cards received, properly marked, dated, signed and not revoked,
will be voted at the Annual Meeting.
What
if I vote and then change my mind?
You
may revoke your proxy at any time before it is exercised by:
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filing with the Secretary of the Company a notice of revocation;
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submitting a later-dated vote by telephone or on the Internet;
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sending in another duly executed proxy bearing a later date; or
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attending the Annual Meeting remotely and casting your vote in the manner set forth above. Your latest vote will be the vote that is
counted.
What
is the difference between holding shares as a stockholder of record and as a beneficial owner?
Many
of our stockholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized
below, there are some distinctions between shares held of record and those owned beneficially.
Stockholder
of Record
If
your shares are registered directly in your name with our transfer agent, ClearTrust, LLC, you are considered, with respect to those
shares, the stockholder of record. As the stockholder of record, you have the right to directly grant your voting proxy or to vote at
the Annual Meeting.
Beneficial
Owner
If
your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held
in street name, and these proxy materials are being forwarded to you by your broker, bank or nominee which is considered, with respect
to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker as to how to vote and are
also invited to attend the Annual Meeting. However, because you are not the stockholder of record, you may not vote these shares unless
you obtain a signed proxy from the record holder giving you the right to vote the shares. If you do not provide the stockholder of record
with voting instructions or otherwise obtain a signed proxy from the record holder giving you the right to vote the shares, broker non-votes
may occur for the shares that you beneficially own. The effect of broker non-votes is more specifically described in “What vote
is required to approve each proposal?” below.
What
vote is required to approve each proposal?
Assuming
that a quorum is present, the following votes will be required:
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The
first proposal (“Proposal 1”), to elect five director nominees to serve as directors until the next annual meeting of
stockholders, requires a plurality of the votes cast at the Annual Meeting on Proposal 1. The director nominees who receive the greatest
number of votes at the Annual Meeting (up to the total number of directors to be elected) will be elected. As a result, withheld
votes and broker non-votes (see below), if any, will not affect the outcome of this proposal. |
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The
second proposal (“Proposal 2”), to ratify the appointment of Marcum LLP as our independent registered public accounting
firm for the fiscal year ending September 30, 2024, requires a majority of the total votes cast at the Annual Meeting, whether in
person or represented by proxy, on Proposal 2. As a result, abstentions, if any, will not affect the outcome of the vote on this
proposal. Because this proposal is “routine” (see below), no broker non-votes will occur on this proposal. |
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The
third proposal (“Proposal 3”), to approve an amendment to our Articles of Incorporation to increase the number of shares
of common stock authorized for issuance thereunder to 225,000,000, requires a majority of the voting power of the issued and outstanding
shares of common stock that are entitled to vote on Proposal 3. As a result, abstentions and broker non-votes (see below), if any,
will have the effect of a vote “AGAINST” Proposal 3 if such proposal is deemed “non-routine” as described
below. Accordingly, it is particularly important that beneficial owners instruct their brokers how they wish to vote their shares.
If this proposal is deemed to be “routine,” no broker non-votes will occur on this proposal. |
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The
fourth proposal (“Proposal 4”), to approve the adjournment of the Annual Meeting to the extent there are insufficient
proxies at the Annual Meeting to approve Proposal 3, requires a majority of the total votes cast at the Annual Meeting, whether in
person or represented by proxy, on Proposal 4. As a result, abstentions and broker non-votes, if any, will not affect the outcome
of this proposal. If this proposal is deemed to be “routine” as described below, no broker non-votes will occur on this
proposal. |
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The
fifth proposal (“Proposal 5”), to approve, on an advisory basis, the executive compensation of the Company’s named
executive officers as described in this Proxy Statement, requires a majority of the total votes cast at the Annual Meeting, whether
in person or represented by proxy, on Proposal 5. As a result, abstentions and broker non-votes (see below), if any, will not affect
the outcome of the vote on this proposal. |
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The
sixth proposal (“Proposal 6”), the advisory vote on the frequency of the advisory vote on executive compensation, has
three possible substantive responses (every 1 year, every 2 years or every 3 years), and the response that receives the highest number
of votes cast will be the frequency of the advisory vote on the executive compensation of our named executive officers. As a result,
abstentions and broker non-votes, if any, will not affect the outcome of this proposal. |
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With
respect to any other matter that may properly come before the Annual Meeting, a majority of the total votes cast by holders of our
common stock, whether in person or represented by proxy, is required to approve such proposals, except as required by law. As a result,
abstentions, if any, will not affect the outcome of the vote on these proposals. No broker non-votes will occur on any “routine”
proposals, and broker non-votes will not affect the outcome of any “non-routine” proposals. |
You
will not have any dissenters’ rights of appraisal in connection with any of the matters to be voted on at the meeting.
What
are “broker non-votes”?
Banks
and brokers acting as nominees are permitted to use discretionary voting authority to vote proxies for proposals that are deemed “routine”
by the New York Stock Exchange, which means that they can submit a proxy or cast a ballot on behalf of stockholders who do not provide
a specific voting instruction. Brokers and banks are not permitted to use discretionary voting authority to vote proxies for proposals
that are deemed “non-routine” by the New York Stock Exchange. The determination of which proposals are deemed “routine”
versus “non-routine” may not be made by the New York Stock Exchange until after the date on which this Proxy Statement has
been mailed to you. As such, it is important that you provide voting instructions to your bank, broker or other nominee, if you wish
to ensure that your shares are present and voted at the Annual Meeting on all matters and if you wish to direct the voting of your shares
on “routine” matters.
When
there is at least one “routine” matter to be considered at a meeting, a “broker non-vote” occurs when a proposal
is deemed “non-routine” and a nominee holding shares for a beneficial owner does not have discretionary voting authority
with respect to the “non-routine” matter being considered and has not received voting instructions with respect to such matter
from the beneficial owner.
Proposal
1, the election of directors, Proposal 5, the advisory vote on executive compensation, and Proposal 6, the advisory vote on the frequency
of the advisory vote on executive compensation, are generally not or may not be considered to be “routine” matters by the
New York Stock Exchange and banks or brokers are not or may not be permitted to vote on these matters if the bank or broker has not received
instructions from the beneficial owner. Accordingly, it is particularly important that beneficial owners instruct their brokers how they
wish to vote their shares for Proposals 1, 5, and 6. Under the applicable rules governing such brokers, we believe Proposal 2, to ratify
the appointment of Marcum LLP as our independent registered public accounting firm, Proposal 3, the approval of an amendment to our Articles
of Incorporation to increase the number of shares of common stock authorized for issuance thereunder, and Proposal 4, to approve the
adjournment of the Annual Meeting to the extent there are insufficient proxies at the Annual Meeting to approve Proposal 3, are likely
to be considered “routine” items. Therefore, a bank or broker may be able to vote on these proposals even if it does not
receive instructions from you, so long as it holds your shares in its name.
How
are we soliciting this proxy?
We
are soliciting this proxy on behalf of our Board and will pay all expenses associated therewith. In the event that we need to adjourn
the Annual Meeting to solicit additional votes for Proposal 3, we may at that time retain a proxy solicitor at an additional cost to
us. Some of our officers, directors and other employees also may, but without compensation other than their regular compensation, solicit
proxies by further mailing or personal conversations, or by telephone, facsimile or other electronic means.
We
will also, upon request, reimburse brokers and other persons holding stock in their names, or in the names of nominees, for their reasonable
out-of-pocket expenses for forwarding proxy materials to the beneficial owners of the capital stock and to obtain proxies.
PROPOSAL
1
ELECTION
OF DIRECTORS
Our
Board is currently composed of five directors, all of whom are being nominated for re-election at this Annual Meeting. Vacancies
on the Board may be filled only with persons elected by a majority of the remaining directors or by a sole remaining director. A director
elected by the Board to fill a vacancy, including vacancies created by an increase in the number of directors, shall serve for the remainder
of the full term of that director for which the vacancy was created and until the director’s successor is duly elected and qualified.
Each
of the five nominees listed below are incumbent directors. If elected at the Annual Meeting, each of these nominees would serve until
the next annual meeting and until his or her successor has been duly elected and qualified, or, if sooner, until the director’s
death, resignation or removal. Because the number of nominees properly nominated for the Annual Meeting is the same as the number of
directors to be elected, the election of directors at this Annual Meeting is uncontested.
Directors
are elected by a plurality of the votes cast on the election of directors. In accordance with our Amended and Restated Bylaws (the “Bylaws”)
and Nevada law, a stockholder entitled to vote for the election of directors may withhold authority to vote for certain nominees for
directors or may withhold authority to vote for all nominees for directors. Withheld votes and broker non-votes will not be treated as
a vote for or against any particular director nominee and will not affect the outcome of this election. Stockholders may not vote, or
submit a proxy, for a greater number of nominees than the five nominees named below. The director nominees receiving the highest number
of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for
the election of the five director nominees named below. If any director nominee becomes unavailable for election as a result of an unexpected
occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed
by our Board. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee
will be unable to serve.
Nominees
for Election Until the Next Annual Meeting
The
following table sets forth the name, age, position and tenure of each of the nominees at the Annual Meeting:
Name | |
Age | | |
Position(s) Held With Loop Media, Inc. | |
Director Since | |
Bruce A. Cassidy | |
| 74 | | |
Executive Chairman of the Board | |
| 2019 | |
Jon M. Niermann | |
| 58 | | |
Founder, Director | |
| 2016 | |
Denise M. Penz | |
| 55 | | |
Director | |
| 2021 | |
Sonya Zilka | |
| 55 | | |
Director | |
| 2021 | |
David Saint-Fleur | |
| 39 | | |
Director | |
| 2022 | |
The
following includes a brief biography of each of the nominees standing for election to the Board at the Annual Meeting, based on information
furnished to us by each director nominee, with each biography including information regarding the experiences, qualifications, attributes
or skills that caused the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance
Committee”) and the Board to determine that the applicable nominee should serve as a member of our Board.
Bruce
A. Cassidy has been a member of our Board since December 2019, was appointed as Chairman of the Board in November 2022 and was appointed
to serve as Executive Chairman of the Board in March 2024. In addition to his role on our Board, Mr. Cassidy currently serves on the
boards of various companies, including as Chairman of the Board of each of KeyStar Corp, Arboreta Healthcare, Inc., Selinsky Force, LLC
and The Sarasota Green Group. He was also the founding investor and served on the board of directors of Ohio Legacy Corp. Previously,
Mr. Cassidy was the founder and CEO of Excel Mining Systems from 1991 until its sale in 2007 to Orica Mining Services, and from 2008
to 2009, served as the President and CEO of one of its subsidiaries, Minora North & South Americas. He is currently the President
of The Concession Golf Club in Sarasota, Florida. Mr. Cassidy was chosen to serve as a member of our Board due to his extensive leadership
and business experience in the entertainment and media industry and as a CEO of a large company, as well as his service on other boards
of directors.
Jon
M. Niermann is our Co-Founder, and served as our Chief Executive Officer from May 2016 until March 2024 when he assumed a new role
to assist the Company with outward-facing sales and distribution efforts, and until November 2022, served as Chairman of the Board. Prior
to founding Loop Media, Inc. in 2016, Mr. Niermann founded FarWest Entertainment, a global platform bridging the Asia-Pacific region
and the West through multimedia entertainment and strategic partnerships and served as its Chief Executive Officer and Executive Producer
from 2010 to 2015. From 2008 to 2011, Mr. Niermann was a late-night talk show host for the Fox International Channel’s “Asia
Uncut.” He served as President of Electronic Arts Asia from 2003 to 2010, where he helped move the company’s game portfolio
into online gaming, and spent fifteen years, from 1988- 2003, with The Walt Disney Company, including as Managing Director and President,
Asia Pacific, of Walt Disney International from 2001 to 2003. Mr. Niermann holds a Bachelor of Science and Arts in Finance and Marketing
from the University of Denver, and an MBA from UCLA’s Anderson School of Management. Mr. Niermann was chosen to serve as a member
of our Board due to his extensive experience in the entertainment industry, as well as the perspective he brings as our Co-Founder and
Chief Executive Officer.
Denise
M. Penz has been a member of our Board since October 2021. In addition to her role on our Board, Ms. Penz concurrently serves as
the Chief Executive Officer and Vice-Chairman of The Preferred Legacy Trust Company, a state-chartered trust company which Ms. Penz also
founded. Ms. Penz served as Founder, Executive Vice President, Chief Operating Officer and Wealth Manager of Premier Bank & Trust
/ Ohio Legacy Corp for nine years from 2010 to 2019. In this role, Ms. Penz was responsible for four major sales divisions in retail
banking, mortgage banking, private banking, and wealth services (including trust and investments). From 2008 to 2010, Ms. Penz founded
Excel Financial / Excel Bancorp and led a group of private equity investors to create a community bank and trust company. Lastly, Ms.
Penz was the Senior Vice President & Trust and Investment Services Director of the Belmont National Bank / Sky Bank / Huntington
Bank from 1996 to 2008, where she managed the trust and investment departments, developed strategic planning initiatives and was directly
responsible to the CEO and Board of Directors. Ms. Penz holds a Bachelor of Science in Management and Accounting from West Liberty State
College, and an MBA from Wheeling Jesuit University. Ms. Penz was chosen to serve as a member of our Board due to her considerable leadership
experience in the financial sector along with proven success in raising capital, strategic planning and organizational growth.
Sonya
Zilka has been a member of our Board since October 2021. In addition to her role on our Board, Ms. Zilka currently serves as the
President & Chair of The Beyond Benefits Life Sciences Board of Trustees, a position she has held since 2020. Furthermore, since
2019, Ms. Zilka has served as the Chief People Officer at the Chan Zuckerberg Biohub where she leads HR functions and spearheads internal
communications. From 2013 through 2015, and again in 2018, Ms. Zilka was an Executive Coach and Organizational Development/Human Resource
consultant at ZHR Consulting, a firm specializing in independent organizational development and human capital consulting. From 2015 to
2018, Ms. Zilka served as Vice President of Human Resources at Actelion Pharmaceuticals, where she led human resources, corporate communications
and facilities for the United States. Ms. Zilka holds a Bachelor of Science in Psychology from Washington State University, and a Master’s
Degree in Organizational Psychology from Columbia University. Ms. Zilka was chosen to serve as a member of our Board for her proven leadership
and extensive experience in human capital consulting and human resources.
David
Saint-Fleur was appointed to serve as a member of our Board in September 2022. In addition to his role on our Board, Mr. Saint-Fleur
currently serves in a senior role in Global Artists & Repertoire (“A&R”) at Atlantic Records, a position he has held
since June 2021. Prior to this, Mr. Saint-Fleur was in a senior role in Global A&R at Warner Music Group from 2017 to 2021. Mr. Saint-Fleur
also serves as a music producer and songwriter at Saint Productions, LLC, his own production company, which he started in 2007. In his
role at Saint Productions LLC, Mr. Saint-Fleur has produced and written for various notable artists, including (but not limited to) David
Guetta, Nicki Minaj, Bebe Rexha, Dolly Parton, Jason Derulo and Little Mix. Mr. Saint-Fleur was chosen to serve as a member of our Board
for his considerable experience in the music industry, particularly in artist relations, and his proven track record in producing and
developing emerging and established talent.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” ALL OF THE NOMINEES FOR ELECTION AS DIRECTORS.
CORPORATE
GOVERNANCE
Board
of Directors Composition
Our
Board currently consists of five members. Our directors hold office until their successors have been elected and qualified or until the
earlier of their resignation or removal.
We
have no formal policy regarding board diversity. Our priority in selection of board members is identification of members who will further
the interests of our stockholders through their established record of professional accomplishment, the ability to contribute positively
to the collaborative culture among board members, knowledge of our business and understanding of the competitive landscape.
Board
of Director Meetings
Our
Board met three (3) times in fiscal 2023. Each director attended at least 75% of the aggregate of (i) the total number of meetings of
our Board (held during the period for which such director served on the Board) and (ii) the total number of meetings of all committees
of our Board on which such director served (during the periods for which the director served on such committee or committees). We do
not have a formal policy requiring members of the Board to attend our annual meetings. All members of the Board attended our 2023 annual
meeting of stockholders.
Director
Independence
Under
the rules of the NYSE American LLC (the “NYSE American”), a director will only qualify as an “independent director”
if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes
of Rule 10A-3 of the Securities Exchange Act of 1934 (the “Exchange Act”), a member of an audit committee of a listed company
may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee,
accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries
or otherwise be an affiliated person of the listed company or any of its subsidiaries.
Our
Board has determined that Mr. Cassidy, Ms. Penz, Ms. Zilka and Mr. Saint-Fleur are “independent directors” as such term is
defined under the applicable rules of the NYSE American.
We
have established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our Board has determined
that Ms. Penz is an “audit committee financial expert,” as defined under the applicable rules of the SEC, and that all members
of the Audit Committee of the Board (the “Audit Committee”) are “independent” within the meaning of the applicable
NYSE American rule and the independence standards of Rule 10A-3 of the Exchange Act. Each of the members of the Audit Committee meets
the requirements for financial literacy under the applicable rules and regulations of the SEC and the NYSE American.
Board
Committees
Our
Board has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Our Board may
establish other committees to facilitate the management of our business. The composition and functions of each committee are described
below. Members serve on these committees until their resignation or until otherwise determined by our Board.
Audit
Committee
Our
Audit Committee consists of Denise Penz, Sonya Zilka, and Bruce Cassidy, with Denise Penz serving as the Chair of the Audit Committee.
Our Board has determined that the directors that serve on our Audit Committee are independent within the meaning of the NYSE American
listing rules and Rule 10A-3 under the Exchange Act. In addition, our Board has determined that Denise Penz qualifies as an “audit
committee financial expert” within the meaning of SEC regulations and the NYSE American rules.
The
Audit Committee oversees and monitors our financial reporting process and internal control system, reviews and evaluates the audit performed
by our registered independent public accountants and reports to the Board any substantive issues found during the audit. The Audit Committee
is directly responsible for the appointment, compensation and oversight of the work of our registered independent public accountants.
The Audit Committee reviews and approves all transactions with affiliated parties.
Our
Audit Committee operates pursuant to a charter that is available on our website at https://ir.loop.tv/corporate-governance. Our Audit
Committee met three (3) times in fiscal 2023.
Compensation
Committee
Our
Compensation Committee of the Board (the “Compensation Committee”) consists of Denise Penz and Sonya Zilka, with Sonya Zilka
serving as the Chairman of the Compensation Committee. Our Board has determined that the directors that serve on our Compensation Committee
are independent under the listing standards and are “non-employee directors” as defined in rule 16b-3 promulgated under the
Exchange Act.
The
Compensation Committee provides advice and makes recommendations to the Board in the areas of employee salaries, benefit programs and
director compensation. The Compensation Committee also reviews and approves corporate goals and objectives relevant to the compensation
of our Chief Executive Officer and other officers and makes recommendations in that regard to the Board as a whole.
Our
Compensation Committee operates pursuant to a charter that is available on our website at https://ir.loop.tv/corporate-governance. Our
Compensation Committee met two (2) times in fiscal 2023.
Nominating
and Corporate Governance Committee
Our
Nominating and Corporate Governance Committee consists of Denise Penz, Bruce Cassidy and David Saint-Fleur, with Bruce Cassidy serving
as the Chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee nominates individuals
to be elected to the Board by our stockholders. The Nominating and Corporate Governance Committee considers recommendations from stockholders
if submitted in a timely manner in accordance with the procedures set forth in our Bylaws and will apply the same criteria to all persons
being considered. All members of the Nominating and Corporate Governance Committee are independent directors as defined under the NYSE
American rules.
Our
Nominating and Corporate Governance Committee operates pursuant to a charter that is available on our website at https://ir.loop.tv/corporate-governance.
Our Nominating and Corporate Governance Committee met two (2) times in fiscal 2023.
Stockholder
Nominations for Directorships
Stockholders
may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by
submitting their names and background to the Secretary of the Company at the address set forth below under “Stockholder Communications”
in accordance with the provisions set forth in our Bylaws. All such recommendations will be forwarded to our Nominating and Corporate
Governance Committee, which will review and only consider such recommendations if appropriate biographical and other information is provided,
including, but not limited to, the items listed below, on a timely basis. All security holder recommendations for director candidates
must be received by the Company in the timeframe(s) set forth under the heading “Stockholder Proposals” below, and
include the following information:
|
● |
the
name and address of record of the security holder; |
|
|
|
|
● |
a
representation that the security holder is a record holder of the Company’s securities, or if the security holder is not a
record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Exchange Act; |
|
|
|
|
● |
the
name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation
or employment for the preceding five (5) full fiscal years of the proposed director candidate; |
|
|
|
|
● |
a
description of the qualifications and background of the proposed director candidate and a representation that the proposed director
candidate meets applicable independence requirements; |
|
|
|
|
● |
a
description of any arrangements or understandings between the security holder and the proposed director candidate; and |
|
● |
the
consent of the proposed director candidate to be named in the proxy statement relating to the Company’s annual meeting of stockholders
and to serve as a director if elected at such annual meeting. |
Assuming
that appropriate information is provided for candidates recommended by stockholders, the Nominating and Corporate Governance Committee
will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates
submitted by members of the Board or other persons, as described above and as set forth in its written charter.
Board
Leadership Structure and Role in Risk Oversight
Our
founder and former Chief Executive Officer, Mr. Niermann, is also a Board member and until November 2022, was the Chairman of the Board,
at which time Mr. Bruce Cassidy was appointed Chairman of the Board. Further, in connection with restructuring and cost-cutting efforts
undertaken by the Company earlier this year, Mr. Cassidy was appointed as Executive Chairman of the Board. Periodically, our Board assesses
these roles and the Board leadership structure to ensure the interests of the Company and our stockholders are best served. The Board
recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure, so as to provide independent
oversight of management. The Board understands that there is no single, generally accepted approach to providing Board leadership and
that given the dynamic and competitive environment in which we operate, the right Board leadership structure may vary as circumstances
warrant. Consistent with this understanding, the Nominating and Corporate Governance Committee periodically considers the Board’s
leadership structure. This consideration includes the pros and cons of alternative leadership structures in light of our operating and
governance environment at the time, with the goal of achieving the optimal model for effective oversight of management by the Board.
We
do not have a specific policy regarding the separation of the offices of Chairman of the Board and the Chief Executive Officer. The Board
believes that this separation is presently appropriate as it allows the Chief Executive Officer to focus primarily on leading our day-to-day
operations while the Chairman of the Board can focus on leading the Board in the performance of its duties. We acknowledge, however,
that there may be circumstances in the future when it is in our best interests to combine the positions of Chairman of the Board and
the Chief Executive Officer.
While
management is responsible for assessing and managing risks to our Company, our Board is responsible for overseeing management’s
efforts to assess and manage risk. This oversight is conducted primarily by our full Board, primarily through the following:
|
● |
the
Board’s review and approval of our plans for our business (presented to the Board by the Chief Executive Officer and other
management), including the projected opportunities and challenges facing our business; |
|
|
|
|
● |
the
Board’s periodic review of our business developments and financial results; |
|
|
|
|
● |
our
Audit Committee’s oversight of our internal controls over financial reporting and its discussions with management and the independent
accountants regarding the quality and adequacy of our internal controls and financial reporting; and |
|
|
|
|
● |
our
Compensation Committee’s review and recommendations to the Board regarding our executive compensation and its relationship
to our business goals. |
Our
Board believes that full and open communication between management and the Board is essential for effective risk management and oversight.
Stockholder
Communications
Our
Board will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate.
Absent unusual circumstances or as contemplated by committee charters, and subject to advice from legal counsel, the Secretary of the
Company is primarily responsible for monitoring communications from stockholders and for providing copies or summaries of such communications
to the Board as the Secretary considers appropriate.
Communications
from stockholders will be forwarded to all directors if they relate to important substantive matters or if they include suggestions or
comments that the Secretary considers to be important for the Board to know. Communication relating to corporate governance and corporate
strategy are more likely to be forwarded to the Board than communications regarding personal grievances, ordinary business matters, and
matters as to which the Company tends to receive repetitive or duplicative communications.
Stockholders
who wish to send communications to the Board should address such communications to: The Board of Directors, Loop Media, Inc., 2600 West
Olive Avenue, Suite 5470, Burbank, CA 91505, Attention: Secretary.
Code
of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies to our directors, officers and employees.
The purpose of the Code Ethics is to deter wrongdoing and to provide guidance to our directors, officers and employees to help them recognize
and deal with ethical issues, to provide mechanisms to report unethical or illegal conduct and to contribute positively to our culture
of honesty and accountability. Our Code of Ethics is publicly available on our website at https://www.loop.tv. If we make any substantive
amendments to the Code of Ethics or grant any waiver, including any implicit waiver from a provision of the Code of Ethics to our directors
or executive officers, we will disclose the nature of such amendments or waiver on our website or in a current report on Form 8-K.
Anti-Hedging
Policy
Under
the terms of our insider trading policy, we prohibit each officer, director and employee, and each of their family members and controlled
entities, from engaging in certain forms of hedging or monetization transactions. Such transactions include those, such as zero-cost
collars and forward sale contracts, that would allow them to lock in much of the value of their stock holdings, often in exchange for
all or part of the potential for upside appreciation in the stock, and to continue to own the covered securities but without the full
risks and rewards of ownership.
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires our directors and executive, officers, and persons who are beneficial owners of more than 10% of a
registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. These persons are required
by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based
solely upon our review of copies of Forms 3, 4 and 5 furnished to us, we believe that all of our directors, executive officers and any
other applicable stockholders timely filed all reports required by Section 16(a) of the Exchange Act during the fiscal year ended September
30, 2023, except for the following: we filed a Form 4 for Jon M. Niermann and Pioneer Productions, LLC, on October 6, 2023, covering
a transaction that required a Form 4 filing due on October 21, 2022.
EXECUTIVE
OFFICERS
The
following table sets forth certain information regarding our current executive officers:
Name
of Individual |
|
Age |
|
Position(s) |
Justis
Kao |
|
43 |
|
Interim
Chief Executive Officer |
Neil
Watanabe |
|
70 |
|
Chief
Financial Officer |
Justis
Kao was on the founding team of Loop Media and was appointed to serve as our Interim Chief Executive Officer in March 2024. Mr. Kao
has served in various roles in the Company, including Chief Content Officer from May 2023 until March 2024; Chief of Staff from Sept
2022 until May 2023; Chief Communications Officer from 2016 until Sept 2022; Head of Industry Relations from September 2021 to September
2023; Head of Investor Relations from January 2016 to December 2019 and Head of Human Resources from May 2016 to December 2019. Prior
to joining the founding team at Loop Media, Mr. Kao was Managing Partner and Chief Operating Officer of Circle 77 Holdings, LLC, from
2015 to 2016, and he served as Creative Director at FarWest Entertainment from 2012 to 2015. Mr. Kao holds a Bachelor of Music from Berklee
College of Music.
Neil
Watanabe has served as our Chief Financial Officer since September 2021. He is responsible for overseeing our financial affairs.
Prior to joining Loop Media, Inc., Mr. Watanabe was most recently Principal of Watanabe Associates where he provided senior financial
and accounting leadership to various companies, including Value Village Inc. (d.b.a. “Savers”) and High Times Holding Corp.
From 2015 to 2019, Mr. Watanabe was Chief Financial Officer of CarParts.com, Inc., (NASDAQ: PRTS), a publicly traded American online
retailer of automotive parts and accessories for cars, vans, trucks, and sport utility vehicles. Mr. Watanabe also served as EVP &
Chief Financial Officer of PetSmart Inc. (NASDAQ: PETM). Mr. Watanabe also worked in various financial and operational leadership roles
at National Stores, Inc. and Shoe Pavilion, Inc. (previously listed on Nasdaq while Mr. Watanabe was employed), and Mac Frugal’
s Bargains — Closeouts Inc. (d.b.a. “Pic N’ Sav”) (previously listed on NYSE while Mr. Watanabe was employed).
Mr. Watanabe served as EVP and Chief Financial Officer of Anna’s Linens, Inc. from June 2006 until April 2014, when he voluntarily
resigned. Anna’s Linens, Inc. filed a petition under Chapter 11 of the U.S. Bankruptcy Code on June 13, 2015. Mr. Watanabe is currently
a board member of the National Corvette Museum and Reality Venture International and received his CPA certification in the State of Illinois.
Mr. Watanabe holds a Bachelor of Arts from University of California, Los Angeles and a CPA Certification from University of Illinois
at Urbana-Champaign.
EXECUTIVE
COMPENSATION
All
decisions regarding compensation for our executive officers and executive compensation programs are reviewed, discussed and approved
by the Compensation Committee. All compensation decisions are determined following a detailed review and assessment of the executive’s
leadership and operational performance and contributions to our success; any significant changes in role or responsibility; our financial
resources, results of operations and financial projections; the nature, scope and level of the executive’s responsibilities; and
internal equity of pay relationships.
The
Compensation Committee determines each element of compensation for our Chief Executive Officer. When making determinations about each
element of compensation for our other executive officers, the Compensation Committee also considers recommendations from our Chief Executive
Officer. Additionally, at the Compensation Committee’s request, our executive officers may assess the design of, and make recommendations
related to, our compensation and benefit programs, including recommendations related to the performance measures used in our incentive
programs. The Compensation Committee is under no obligation to implement these recommendations.
Summary
Compensation Table
The
following table summarizes information concerning the compensation awarded to, earned by, or paid to, our former Chief Executive Officer
(“Principal Executive Officer”) and our two most highly compensated executive officers other than the Principal Executive
Officer (collectively, the “Named Executive Officers”) during fiscal years ended September 30, 2023, and 2022.
Name & Principal Position | |
Fiscal Year Ended | | |
Salary ($) | |
|
Bonus ($) | | |
Option Awards ($) | | |
Restricted Stock Option Awards ($) | | |
Total ($) | |
| |
| | |
| |
|
| | |
| | |
| | |
| |
Jon M. Niermann(1) | |
| 2023 | | |
| 565,417 | (2) |
|
| — | (3) | |
| — | | |
| — | | |
| 565,417 | |
Former Chief Executive Officer | |
| 2022 | | |
| 364,479 | |
|
| 925,000 | (4) | |
| 1,750,000 | (5) | |
| 1,750,000 | (6) | |
| 4,214,479 | |
| |
| | | |
| | |
|
| | | |
| | | |
| | | |
| | |
Liam McCallum(7) | |
| 2023 | | |
| 393,333 | (2) |
|
| — | (3) | |
| — | | |
| — | | |
| 393,333 | |
Former Chief Product and Technical Officer | |
| 2022 | | |
| — | |
|
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | |
|
| | | |
| | | |
| | | |
| | |
Bob Gruters(8) | |
| 2023 | | |
| 916,263 | (2)(9) |
|
| — | (3) | |
| — | | |
| — | | |
| 916,263 | |
Former Chief Revenue Officer | |
| 2022 | | |
| 1,380,466 | (10) |
|
| — | | |
| 750,000 | (5) | |
| 750,000 | (6) | |
| 2,880,466 | |
(1) |
Effective
March 17, 2024, Mr. Niermann stepped down as our Chief Executive Officer but remains a member of our Board and management team. |
|
|
(2) |
Effective
as of September 1, 2023, the salaries of members of our senior management, including each Named Executive Officer, were reduced as
part of our efforts to reduce our overall SG&A costs. |
|
|
(3) |
No
bonuses were or will be paid in respect of fiscal 2023. |
|
|
(4) |
Mr.
Niermann received a bonus upon the closing of the underwritten public offering on September 26, 2022 (the “September 2022 Offering”)
and a performance-based bonus for fiscal 2023. |
|
|
(5) |
The
fair value of stock options is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model. We use the
simplified method to estimate the expected term of options due to insufficient history and high turnover in the past. |
(6) |
The
number of restricted stock units granted to each Named Executive Officer is equal to the dollar amount noted in the table above,
divided by $5.00, which was the public offering price per share sold in the September 2022 Offering. |
|
|
(7) |
Effective
May 31, 2024, Mr. McCallum resigned as our Chief Product and Technical Officer but remains an advisor to the Company. |
|
|
(8) |
Effective
March 17, 2024, Mr. Gruters resigned as our Chief Revenue Officer but remains an advisor to the Company. |
|
|
(9) |
Mr.
Gruters’ salary for fiscal 2023 includes $548,763 in sales commissions paid in accordance with the terms of the CRO Employment
Letter Agreement, as defined below. See “—Employment Agreements – Bob Gruters – Employment Letter Agreement.” |
|
|
(10) |
Mr.
Gruters’ salary for fiscal 2022 includes $1,097,705 in sales commissions paid in accordance with the terms of the CRO Employment
Letter Agreement, as defined below. See “—Employment Agreements – Bob Gruters – Employment Letter Agreement.” |
As
of the fiscal year ended September 30, 2023, we had no plans in place and had never maintained any plans that provided for the payment
of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred
benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution
plans.
Employment
Agreements
Jon
Niermann — Employment Agreement
We
entered into an employment agreement with Jon Niermann, our former Chief Executive Officer (the “CEO Employment Agreement”),
effective as of March 1, 2021. Pursuant to the CEO Employment Agreement, the term of employment was three (3) years, renewable every
three (3) years, unless terminated. Until September 2022, Mr. Niermann was entitled to receive an annual base salary of $350,000 as well
as discretionary bonuses as may be awarded from time to time by the Compensation Committee of the Board, if one exists, or by our Board.
Mr. Niermann received a bonus of $350,000 upon the closing of the September 2022 Offering. Mr. Niermann was eligible to participate in
all benefit plans that we offer to our executive officers, including any incentive compensation plans. Effective upon the last pay cycle
of fiscal year 2022, Mr. Niermann’s salary was increased to $575,000 per year. He was also granted retention equity grants under
the 2020 Plan consisting of (i) 350,000 restricted stock units (“RSUs”), based on a value of $1,750,000 and a per share price
of $5.00, vesting 25% upon one year from the grant date and the remainder in equal quarterly installments over three years, and (ii)
options to purchase 707,070 shares of common stock, at an exercise price of $4.95 per share, vesting 100% on grant date. See “—Outstanding
Equity Awards at Fiscal Year-End.” Effective September 1, 2023, Mr. Neirmann’s monthly base salary was reduced from $47,917
to $38,333 for an indefinite period of time as part of our efforts to reduce our overall SG&A costs. The CEO Employment Agreement
contained provisions to terminate upon death or disability and could be terminated by us with or without cause, and by Mr. Niermann with
or without good reason (all as defined in the CEO Employment Agreement). If the CEO Employment Agreement was terminated upon the death
or disability of Mr. Niermann, he would have received unpaid and accrued base salary through date of termination, unpaid and accrued
bonus, and payment of pro rata portion of yearly bonus (if any). In addition, upon termination for disability, Mr. Niermann would have
received twelve (12) months’ severance.
If
we had terminated Mr. Niermann for cause or Mr. Niermann had resigned without good reason, Mr. Niermann would have received only unpaid
and accrued base salary through the date of termination and any unpaid and accrued bonus. If Mr. Niermann would have been terminated
without cause or resign with good reason, Mr. Niermann was entitled to receive unpaid and accrued base salary and unpaid and accrued
bonus through the date of termination, payment of the pro rata portion of yearly bonus of at least one year’s base salary, a lump
sum payment of twenty-four (24) months’ salary, payment of his base salary for the remaining term of the CEO Employment Agreement
or a period of twelve (12) months, whichever is longer, and full vesting of all stock grants.
If
at any time during the term of the CEO Employment Agreement Mr. Niermann’s employment would have been terminated after a “Change
in Control” (as defined in the CEO Employment Agreement), compensation would have been similar to that in a termination without
cause or resignation for good reason. In addition, Mr. Niermann would have been entitled to receive a lump sum payment equal to the sum
of (i) ten (10) times his base salary, bonuses, and the value of certain annual fringe benefits specified in the CEO Employment Agreement
for the year in which Mr. Niermann’s term of employment terminates, and (ii) the value of the portion of his benefits under any
savings, pension, profit sharing or deferred compensation plans that are forfeited under those plans by reason of the termination of
his employment.
Mr.
Niermann’s right to receive any severance benefit under the CEO Employment Agreement was subject to the execution and delivery
to us of a general release of claims in substantially the form attached to the CEO Employment Agreement.
The
CEO Employment Agreement contained customary non-compete, non-solicitation, and other restrictive covenants to which Mr. Niermann was
subject during the term of his employment and for a 12- month period following termination for cause or resignation without good reason.
Effective
March 17, 2024, Mr. Niermann resigned as our Chief Executive Officer and remains a member of our Board and management team.
Jon
Niermann – Employment Letter Agreement
In
connection with Mr. Niermann’s new role, Mr. Niermann entered into an employment letter agreement with the Company (the “Niermann
Employment Letter Agreement”), effective March 17, 2024, which supersedes any prior employment agreement Mr. Niermann previously
had with the Company. Pursuant to the Niermann Employment Letter Agreement, Mr. Niermann is entitled to receive an annual base salary
of $575,000.00. Mr. Niermann, like other executive officers, agreed to a salary reduction in October 2023, and further agreed to an additional
salary reduction in March 2024, resulting in a current annual salary of $368,000. In the event the Company implements any further across-the-board
salary reductions affecting all or substantially all senior executives of the Company, Mr. Niermann’s annual salary will be proportionally
reduced. Mr. Niermann’s previously awarded equity grants remain in effect, subject to the terms and conditions of the governing
award agreements and plan documents.
The
Niermann Employment Letter Agreement terminates upon death or disability and may be terminated by the Company with or without Cause,
by Mr. Niermann with or without Good Reason (all as defined in the Niermann Employment Letter Agreement) and with or without advance
notice. If Mr. Niermann’s employment is terminated by the Company without Cause or by Mr. Niermann for Good Reason unrelated to
Change in Control, Mr. Niermann will receive unpaid and accrued base salary through date of termination as well as twelve (12) months’
severance, payable over a twelve (12) month period on the Company’s regular payroll schedule and will be subject to applicable
tax withholdings. In addition, the Company agreed to incorporate certain other severance provisions into the Niermann Employment Agreement
to which Mr. Niermann was entitled under his prior employment agreement.
In
addition, if Mr. Niermann’s employment is terminated during a “Change in Control Period” (as defined in the Niermann
Employment Letter Agreement), compensation is substantially similar to that in a termination without Cause or resignation for Good Reason,
except Mr. Niermann’s entitlement to receive a lump sum payment equal to twelve (12) months of his then-current base salary will
be payable within 60 days following Separation of Service (as defined in the Niermann Employment Letter Agreement). Mr. Niermann’s
right to receive any severance benefit under the Niermann Employment Letter Agreement is subject to the execution and delivery to the
Company of a general release of claims. If the Company terminates Mr. Niermann for Cause or Mr. Niermann resigns without Good Reason,
Mr. Niermann will receive unpaid and accrued base salary through the date of termination.
Liam
McCallum – Employment Agreement
We
entered into an employment agreement with Liam McCallum, our former Chief Product and Technical Officer (the “CPTO Employment Agreement”),
which was effective as of April 1, 2021. Pursuant to the CPTO Employment Agreement, the term of employment was three (3) years, renewable
every three (3) years, unless terminated. Mr. McCallum was entitled to receive an annual base salary of $275,000 as well as discretionary
bonuses as may be awarded from time to time by the Compensation Committee of the Board, if one exists, or by our Board, and he was entitled
to an up-list bonus of $250,000 upon the listing of our common stock on a national securities exchange. Mr. McCallum was eligible to
participate in all benefit plans that we offer to our executive officers, including any incentive compensation plans. Effective September
1, 2023, Mr. McCallum’s monthly base salary was reduced from $33,333 to $26,666 for an indefinite period of time as part of our
efforts to reduce our overall SG&A costs.
The
CPTO Employment Agreement terminated upon death or disability and may be terminated by us with or without cause, and by Mr. McCallum
with or without good reason (all as defined in the CPTO Employment Agreement). If the CPTO Employment Agreement was terminated upon the
death or disability of Mr. McCallum, he would receive unpaid and accrued base salary through date of termination, unpaid and accrued
bonus, and payment of pro rata portion of yearly bonus (if any). In addition, upon termination for disability, Mr. McCallum would receive
six (6) months’ severance.
If
we had terminated Mr. McCallum for cause or Mr. McCallum resigned without good reason, Mr. McCallum would have received only unpaid and
accrued base salary through the date of termination and any unpaid and accrued bonus. Should Mr. McCallum have been terminated without
cause or resigned with good reason, Mr. McCallum would have been entitled to receive unpaid and accrued base salary and unpaid and accrued
bonus through termination of the CPTO Employment Agreement, payment of the pro rata portion of yearly bonus, a lump sum payment of six
(6) months’ salary, and full vesting of all stock grants.
In
addition, if at any time during the term of the CPTO Employment Agreement Mr. McCallum’s employment would have been terminated
after a “Change in Control” (as defined in the CPTO Employment Agreement), compensation would have been similar to that in
a termination without cause or resignation for good reason. In addition, Mr. McCallum would have been entitled to receive a lump sum
payment equal to the sum of: (i) two (2) times his base salary, bonuses, and the value of certain annual fringe benefits specified in
the CPTO Employment Agreement for the year in which Mr. McCallum’s term of employment terminates, and (ii) the value of the portion
of his benefits under any savings, pension, profit sharing or deferred compensation plans that are forfeited under those plans by reason
of the termination of his employment.
Mr.
McCallum’s right to receive any severance benefit under the CPTO Employment Agreement was subject to the execution and delivery
to us of a general release of claims in substantially the form attached to the CPTO Employment Agreement.
The
CPTO Employment Agreement contained customary non-compete, non-solicitation, and other restrictive covenants to which Mr. McCallum was
subject during the term of his employment and for a 12-month period following termination for cause or resignation without good reason.
Effective
May 31, 2024, Mr. McCallum stepped down as our Chief Product and Technical Officer but remains an advisor to the Company.
Bob
Gruters — Employment Letter Agreement
We
entered into an employment letter agreement with Bob Gruters, our former Chief Revenue Officer (the “CRO Employment Letter Agreement”),
which was effective as of May 3, 2021. Pursuant to the CRO Employment Letter Agreement, Mr. Gruters’ employment did not have a
fixed term and he was employed on an “at will” basis. Through fiscal year 2022, Mr. Gruters was entitled to receive an annual
base salary of $275,000, as well as sales commission of five percent (5%) of all advertising and sponsorship revenue brought in by him
or his sales team, payable on a quarterly basis and as determined with reference to revenue actually recognized by and paid to us, and
subject to industry standard terms and practice, as agreed between Mr. Gruters and the former Chief Executive Officer, and approved by
the Board. Mr. Gruters was eligible to participate in all customary benefit plans and programs. Effective upon the last pay cycle of
fiscal year 2022, Mr. Gruters’ salary was increased to $365,000 per year. He was also granted retention equity grants under the
2020 Plan consisting of (i) 150,000 RSUs based on a value of $750,000 and a price per share of $5.00, vesting 25% upon one year from
the grant date and the remainder in equal quarterly installments over three years and (ii) options to purchase 303,030 shares of common
stock, with an exercise price of $4.95 per share, vesting 25% upon one year from the grant date and the remainder in equal monthly installments
over three years. See “—Outstanding Equity Awards at Fiscal Year-End.” Effective September 1, 2023, Mr. Gruter’s
monthly base salary was reduced from $31,250 to $25,000 for an indefinite period of time as part of our efforts to reduce our overall
SG&A costs.
The
CRO Employment Letter Agreement contained customary non-solicitation, and other restrictive covenants to which Mr. Gruters was subject
during the term of his employment and for a 24-month period following termination for any reason.
During
fiscal year 2023, in addition to his base salary, Mr. Gruters was entitled to earn sales commission of one percent (1%) of all advertising
and sponsorship revenue brought in by him or his sales team, subject to established performance goals being met.
Effective
March 17, 2024, Mr. Gruters resigned as Chief Revenue Officer to pursue another business opportunity outside of the Company but remains
an advisor to the Company.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth certain information concerning outstanding stock awards held by the Named Executive Officers and our directors
as of September 30, 2023:
Name | |
Number of securities underlying unexercised options (#) Unexercisable | | |
Number of securities underlying unexercised options (#) Exercisable | | |
Option Exercise Price ($) | | |
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 ($) | |
| |
| | |
| | |
| | |
| |
| | |
| |
Jon M. Niermann(1) | |
| 52,084 | (2) | |
| 364,582 | (2) | |
| 3.30 | | |
November 10, 2030 | |
| 262,500 | (4) | |
| 1,312,500 | (5) |
Former CEO | |
| — | (3) | |
| 707,070 | (3) | |
| 4.95 | | |
September 22, 2032 | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | |
Liam McCallum(6) | |
| — | | |
| 668,917 | (7) | |
| 1.98 | | |
September 30, 2028 | |
| 67,500 | (10) | |
| 337,500 | (5) |
Former CPTO | |
| 20,834 | (8) | |
| 145,832 | (8) | |
| 3.30 | | |
November 10, 2030 | |
| | | |
| | |
| |
| — | (9) | |
| 181,820 | (9) | |
| 4.95 | | |
September 22, 2032 | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | |
Bob Gruters (11) | |
| 44,445 | (12) | |
| 155,555 | (12) | |
| 8.25 | | |
May 3, 2031 | |
| 112,500 | (14) | |
| 562,500 | (5) |
Former CRO | |
| 227,273 | (13) | |
| 75,757 | (13) | |
| 4.95 | | |
September 22, 2032 | |
| | | |
| | |
(1) |
Effective
March 17, 2024, Mr. Niermann resigned as our Chief Executive Officer but remains a member of our Board and management team. |
|
|
(2) |
Of
Mr. Niermann’s 416,666 options, 364,582 options had vested as of September 30, 2023. |
|
|
(3) |
Mr.
Niermann’s 707,070 options fully vested and became exercisable on September 22, 2022, the date the award was granted. |
|
|
(4) |
Of
Mr. Niermann’s 350,000 restricted stock units (“RSUs”), 87,500 had vested as of September 30, 2023. |
|
|
(5) |
RSUs
were issued to each Named Executive Officer at $5.00 per share, the public offering price per share sold in the September 2022 Offering. |
|
|
(6) |
Effective
May 31, 2024, Mr. McCallum resigned as our Chief Product and Technical Officer but remains an advisor to the Company. |
|
|
(7) |
Mr.
McCallum’s 668,917 options fully vested and became exercisable on October 31, 2018, the date the award was granted. |
|
|
(8) |
Of
Mr. McCallum’s 166,666 options, 145,832 had vested as of September 30, 2023. |
|
|
(9) |
Mr.
McCallum’s 181,820 options fully vested and became exercisable on September 22, 2022, the date the award was granted. |
|
|
(10) |
Of
Mr. McCallum’s 90,000 RSUs, 22,500 had vested as of September 30, 2023. |
|
|
(11) |
Mr.
Gruters resigned as our Chief Revenue Officer to pursue another business opportunity outside of the Company but remains an advisor
to the Company. |
|
|
(12) |
Of
Mr. Gruters’ 200,000 options, 155,555 had vested as of September 30, 2023. |
|
|
(13) |
Of
Mr. Gruters’ 303,030 options, 75,757 had vested as of September 30, 2023. |
|
|
(14) |
Of
Mr. Gruter’s 150,000 RSUs, 37,500 had vested as of September 30, 2023. |
Pay
Versus Performance
Pay
Versus Performance Table
In
accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the “Dodd-Frank
Act,” below is disclosure regarding executive compensation for our Principal Executive Officer and other Named Executive Officers
and company financial performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance
disclosure below in making its pay decisions for any of the years shown. Pursuant to SEC rules, the information in this “Pay
Versus Performance” section shall not be deemed to be incorporated by reference into any Loop Media, Inc. filing under the
Securities Act of 1933, as amended, or Exchange Act, unless expressly incorporated by specific reference in such filing.
Year |
|
Summary
Compensation
Table Total for
PEO ($) (1) |
|
|
Compensation
Actually Paid to
PEO ($) |
|
|
Average
Summary Compensation Table Total for Non-PEO NEOs ($) (1) |
|
|
Average
Compensation Actually Paid to Non-PEO NEOs ($) |
|
|
Value
of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(2) |
|
|
Net
Loss ($)(3) |
|
2023 |
|
|
565,417 |
|
|
|
277,398 |
|
|
|
654,798 |
|
|
|
253,122 |
|
|
|
6.76 |
|
|
|
(31,963,679 |
) |
2022 |
|
|
4,214,479 |
|
|
|
4,886,426 |
|
|
|
2,880,466 |
|
|
|
4,339,890 |
|
|
|
60.68 |
|
|
|
(29,479,448 |
) |
(1) |
Mr.
Niermann, our former Chief Executive Officer, was our Principal Executive Officer for 2023 and 2022. Mr. McCallum, our former Chief
Product and Technical Officer, was a Named Executive Officer for 2023 and 2022, and Mr. Gruters, our former Chief Revenue Officer,
was a Named Executive Officer for 2023. |
(2) |
Cumulative
total stockholder return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement
period, assuming dividend reinvestment, and the difference between our Company’s share price at the end and the beginning of
the measurement period by our Company’s share price at the beginning of the measurement period. No dividends were paid on our
common stock in 2023 or 2022. |
|
|
(3) |
The
dollar amounts reported represent the amount of net loss reflected in our consolidated audited financial statements for the applicable
year. |
| |
2023 | | |
2022 | |
| |
PEO | | |
Average Non-PEO NEOs | | |
PEO | | |
Average Non-PEO NEOs | |
Summary Compensation Table Totals for PEO and Non-PEO NEOs | |
$ | 565,417 | | |
$ | 654,798 | | |
$ | 4,214,479 | | |
$ | 2,880,466 | |
Add (Subtract): | |
| | | |
| | | |
| | | |
| | |
Fair value of equity awards granted during the year from the Summary Compensation Table | |
| - | | |
| - | | |
| (3,878,281 | ) | |
| (683,789 | ) |
Fair value at year end of equity awards granted during the year that were outstanding and unvested as of the end of the year | |
| - | | |
| - | | |
| 1,561,000 | | |
| 1,449,342 | |
Fair value at vesting date of equity awards granted and vested during the year | |
| - | | |
| - | | |
| 2,128,281 | | |
| 547,278 | |
Change in fair value of equity awards granted in prior years that were unvested as of the end of the year | |
| 344,537 | | |
| 149,738 | | |
| 940,627 | | |
| 366,945 | |
Change in fair value of equity awards granted in prior years that partially vested during the year | |
| (632,557 | ) | |
| (551,414 | ) | |
| (79,680 | ) | |
| (220,352 | ) |
Change in fair value of equity awards granted in prior years that fully vested during the year | |
| - | | |
| - | | |
| - | | |
| - | |
Compensation Actually Paid Totals | |
$ | 277,398 | | |
$ | 253,122 | | |
$ | 4,886,426 | | |
$ | 4,339,890 | |
Pay
Versus Performance Relationships Descriptions
In
accordance with Item 402(v) of Regulation S-K, the graphs below compare the compensation actually paid to our Principal Executive Officer
and the average of the compensation actually paid to our remaining Named Executive Officers, with (i) our TSR, and (ii) our net income
(net loss), in each case, for the fiscal years ended December 31, 2022, and December 31, 2023. TSR amounts reported in the graph assume
an initial fixed investment of $100.
A
portion of our Named Executive Officer’s compensation consists of equity awards. As a result, the change between the values disclosed
in our Summary Compensation Table and Compensation Actually Paid tends to be directionally aligned with changes in our TSR.
All
information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference
in any filing of our company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective
of any general incorporation language in any such filing.
DIRECTOR
COMPENSATION
The
following table summarizes the compensation paid to each of our non-employee directors for the fiscal year ended September 30, 2023:
Name | |
Fees earned or paid in cash ($) | | |
Stock awards ($) | | |
Option awards ($) | | |
Total ($) | |
| |
| | |
| | |
| | |
| |
Bruce Cassidy | |
| 94,000 | | |
| — | | |
| — | | |
| 94,000 | |
Denise Penz | |
| 75,750 | | |
| — | | |
| 22,777 | | |
| 98,527 | |
Sonya Zilka | |
| 67,500 | | |
| — | | |
| 22,777 | | |
| 90,277 | |
David Saint-Fleur | |
| 49,000 | | |
| — | | |
| — | | |
| 49,000 | |
Our
non-employee directors had the following outstanding equity awards as of September 30, 2023:
Name | |
Number of securities underlying unexercised options (#) Unexercisable | | |
Number of securities underlying unexercised options (#) Exercisable | | |
Option Exercise Price ($) | | |
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 ($) | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Bruce Cassidy | |
| — | | |
| — | | |
| — | | |
| — | | |
| 36,616 | | |
| 203,200 | |
| |
| — | | |
| — | | |
| — | | |
| — | | |
| 20,385 | | |
| 127,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Denise Penz | |
| — | | |
| 14,366 | (1) | |
| 6.90 | | |
| October 11, 2031 | | |
| 36,616 | | |
| 203,200 | |
| |
| — | | |
| 7,183 | (2) | |
| 6.23 | | |
| January 3, 2033 | | |
| 20,385 | | |
| 127,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Sonya Zilka | |
| — | | |
| 14,366 | (3) | |
| 6.90 | | |
| October 11, 2031 | | |
| 36,616 | | |
| 203,200 | |
| |
| — | | |
| 7,183 | (4) | |
| 6.23 | | |
| January 3, 2033 | | |
| 20,385 | | |
| 127,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
David Saint-Fleur | |
| — | | |
| — | | |
| — | | |
| — | | |
| 36,616 | | |
| 203,200 | |
| |
| — | | |
| — | | |
| — | | |
| — | | |
| 20,385 | | |
| 127,000 | |
(1) |
Ms.
Penz’s 14,366 options had fully vested as of September 30, 2023. |
|
|
(2) |
Ms.
Penz’s 7,183 options had fully vested as of September 30, 2023. |
|
|
(3) |
Ms.
Zilka’s 14,366 options had fully vested as of September 30, 2023. |
|
|
(4) |
Ms.
Zilka’s 7,183 options had fully vested as of September 30, 2023. |
In
September 2022, we adopted a compensation policy pursuant to which our Board members may receive cash and equity remuneration for their
services as directors, as set forth below. All equity awards to be granted under this policy will be granted pursuant to the 2020 Plan,
including vesting periods, which may vary and are determined by the Board or a committee of the Board.
|
● |
Each
non-employee director is entitled to receive an annual fee from us of $44,000; |
|
|
|
|
● |
each
chair of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive an annual fee
from us of $20,000, $13,500 and $10,000, respectively; |
|
|
|
|
● |
each
non-chairperson member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive
an annual fee from us of $10,000, $6,750 and $5,000, respectively; |
|
|
|
|
● |
the
non-executive chairperson, if any, will receive an annual fee from us of $30,000; |
|
|
|
|
● |
the
lead independent director, if any, will receive an annual fee from us of $15,000; |
|
|
|
|
● |
each
non-employee director is entitled to receive an initial equity grant in the form of RSUs with a value of $203,200, vesting over time
subject to continued service; and |
|
|
|
|
● |
each
non-employee director is entitled to receive an annual equity grant in the form of RSUs with a value of $127,000, vesting over time
subject to continued service. |
Board
Cash Compensation Deferral
Effective
as of May 3, 2024, our Board agreed to defer all cash compensation due to them for the remainder of fiscal year 2024 until October 1,
2024, at which time deferred payments are expected to be paid and regularly quarterly payments are scheduled to resume.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table summarizes the number of shares of our common stock authorized for issuance under our equity compensation plans as of
September 30, 2023.
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights |
|
|
Weighted-average
exercise price of outstanding options, warrants and rights |
|
|
Number
of securities remaining available for future issuances under equity compensation plans under equity compensation (excluding) securities
reflected in column (a) |
|
Plan
Category |
|
(a) |
|
|
(b)(3) |
|
|
(c)(4) |
|
Equity
compensation plans approved by security holders (1) |
|
|
10,005,703 |
(1)
(2) |
|
$ |
3.84 |
|
|
|
1,413,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
10,005,703 |
|
|
$ |
3.84 |
|
|
|
1,413,357 |
|
|
(a) |
8,849,306
shares issuable upon the exercise of outstanding options; |
|
|
|
|
(b) |
1,156,397
shares issuable upon the vesting of restricted stock units; and |
|
|
|
|
(c) |
1,885,681
shares underlying stock option awards that were granted under the Loop Media, Inc. Amended and Restated 2016 Equity Incentive Plan
(the “2016 Plan”), which was adopted by the Board and approved by stockholders on June 7, 2016, and amended and restated
by the Board and approved by stockholders October 4, 2016. No further awards of any type available under this plan may be granted. |
(2) |
Does
not include outstanding shares issuable upon the exercise of warrants, which are not issued under our 2020 Plan. |
|
|
(3) |
The
weighted-average exercise price does not consider the shares issuable upon vesting of outstanding RSUs, which have no exercise price. |
|
|
(4) |
All
securities remaining available for future issuance will be made in accordance with the 2020 Plan, which was ratified by the holders
of a majority of our outstanding voting stock pursuant to the Majority Written Consent of Stockholders in Lieu of Annual Meeting
dated April 27, 2021, and further amended and restated by the Board on September 18, 2022. |
REPORT
OF THE AUDIT COMMITTEE*
The
undersigned members of the Audit Committee of the Board of Directors of Loop Media, Inc. submit this report in connection with the Audit
Committee’s review of the financial reports for the fiscal year ended September 30, 2023, as follows:
|
1. |
The
Audit Committee has reviewed and discussed with management the audited financial statements for the Company for the fiscal year ended
September 30, 2023. |
|
|
|
|
2. |
The
Audit Committee has discussed with representatives of Marcum LLP, the independent public accounting firm, the matters which are required
to be discussed with them under the provisions of Auditing Standard No. 61, as amended (Communications with Audit Committees). |
|
|
|
|
3. |
The
Audit Committee has discussed with Marcum LLP, the independent public accounting firm, the auditors’ independence from management
and the Company has received the written disclosures and the letter from the independent auditors required by applicable requirements
of the Public Company Accounting Oversight Board. |
In
addition, the Audit Committee considered whether the provision of non-audit services by Marcum LLP, is compatible with maintaining its
independence. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors
(and the Board of Directors has approved) that the audited financial statements be included in our Annual Report on Form 10-K for the
fiscal year ended September 30, 2023, for filing with the Securities and Exchange Commission.
Audit
Committee of Loop Media, Inc.
Denise
Penz
Sonya
Zilka
Bruce
Cassidy
* |
The
foregoing report of the Audit Committee is not to be deemed “soliciting material” or deemed to be “filed”
with the Securities and Exchange Commission (irrespective of any general incorporation language in any document filed with the Securities
and Exchange Commission) or subject to Regulation 14A of the Securities Exchange Act of 1934, as amended, or to the liabilities of
Section 18 of the Securities Exchange Act of 1934, except to the extent we specifically incorporate it by reference into a document
filed with the Securities and Exchange Commission. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As
of August 20, 2024, there were 80,825,910 shares of common stock outstanding.
The
following table sets forth, as of August 20, 2024, ownership of our voting securities that are beneficially owned by:
|
● |
each
person, or group of affiliated persons, known by us to beneficially own more than 5% of any class of our voting securities; |
|
|
|
|
● |
each
of our Named Executive Officers; |
|
|
|
|
● |
each
of our directors; and |
|
|
|
|
● |
all
of our executive officers and directors as a group. |
Information
relating to beneficial ownership of the voting securities by our principal stockholders and management is based upon each person’s
information using “beneficial ownership” concepts under the SEC rules. Under these rules, a person is deemed to be a beneficial
owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security,
or investment power, which includes the power to vote or direct the voting of the security. For purposes of computing the number and
percentage of shares beneficially owned by a security holder, any shares which such person has the right to acquire within 60 days of
August 20, 2024, are deemed to be outstanding, but those shares are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other security holder.
Under
the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a
beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, ownership
consists of sole ownership, voting and investment rights, and the address for each stockholder listed is c/o Loop Media, Inc., 2600 West
Olive Avenue, Suite 5470, Burbank, CA 91505.
| |
Amount and Nature of Beneficial | |
| |
Ownership of Common Stock | |
| |
Number of | | |
Percent | |
Name of Beneficial Holder | |
Shares Owned | | |
of Class | |
Named Executive Officers and Directors | |
| | | |
| | |
Justis Kao, Interim Chief Executive Officer (1) | |
| 793,794 | | |
| 1.0 | % |
Jon Niermann, Director and Former Chief Executive Officer (2) | |
| 7,921,919 | | |
| 9.7 | % |
Liam McCallum, Former Chief Product & Technical Officer (3) | |
| 2,384,554 | | |
| 2.9 | % |
Bob Gruters, Former Chief Revenue Officer (4) | |
| 413,879 | | |
| * | |
Bruce A. Cassidy, Executive Chairman (5) | |
| 23,624,594 | | |
| 26.7 | % |
Denise A. Penz, Director (6) | |
| 706,948 | | |
| * | |
Sonya Zilka, Director (7) | |
| 60,281 | | |
| * | |
David Saint-Fleur, Director (8) | |
| 38,732 | | |
| * | |
All Executive Officers and Directors as a Group | |
| 36,553,200 | | |
| 39.6 | % |
|
* |
Indicates
less than 1% of class. |
(1) |
Mr.
Kao’s beneficial ownership includes (i) 6,603 shares of our common stock; (ii) 29,358 shares of common stock underlying a stock
option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $2.58 per
share; (iii) 637,308 shares of common stock underlying a stock option, which is fully vested and exercisable within 60 days of August
20, 2024, at an exercise price of $1.98 per share; (iv) 83,333 shares of common stock underlying a stock option, which is fully
vested and exercisable within 60 days of August 20, 2024, at an exercise price of $3.30 per share; (v) 31,567 shares of common
stock underlying a stock option, which are vested and exercisable, or which will vest and be exercisable within 60 days of August
20, 2024, at an exercise price of $4.95 per share; (vi) 5,625 shares of common stock underlying restricted stock units (“RSUs”)
that are vested or will vest within sixty (60) days of August 20, 2024. Excludes (i) 29,043 shares of common stock underlying
a stock option at an exercise price of $4.95 per share, and (ii) 1,215,000 shares of common stock underlying unvested RSUs, held
by Mr. Kao, that are not exercisable within sixty (60) days of August 20, 2024. |
|
|
(2) |
Mr.
Niermann’s beneficial ownership includes (A) (i) 65,891 shares of common stock; (ii) 707,070 shares of common stock underlying
an option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $4.95
per share; (iii) 416,666 shares of common stock underlying a stock option, which is fully vested and exercisable within sixty (60)
days of August 20, 2024, at an exercise price of $3.30 per share; and (iv) 65,625 shares of common stock underlying RSUs that
are vested or will vest within sixty (60) days of August 20, 2024, all held directly by Mr. Niermann; (B) 6,666,666 shares
of common stock held directly by The Jon Maxwell Niermann Living Trust, of which Mr. Niermann is the Trustee; and (C) one (1) share
of common stock held by Pioneer Productions, 420 8th Street, Huntington Beach, CA 92648, of which Mr. Niermann is the Sole Member.
Excludes 450,000 shares of common stock underlying unvested RSUs held by Mr. Niermann that are not exercisable within sixty (60)
days of August 20, 2024. |
(3) |
Mr.
McCallum’s beneficial ownership includes (i) 1,350,276 shares of common stock; (ii) 181,820 shares of common stock underlying
a stock option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $4.95
per share; (iii) 166,666 shares of common stock underlying a stock option, which is fully vested and exercisable within sixty (60)
days of August 20, 2024, at an exercise price of $3.30 per share; (iv) 668,917 shares of common stock underlying an option,
which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $1.98 per share;
and (v) 16,875 shares of common stock underlying RSUs that are vested or will vest within sixty (60) days of August 20, 2024.
Excludes 320,000 shares of common stock underlying unvested RSUs held by Mr. McCallum that are not exercisable within sixty (60)
days of August 20, 2024. |
|
|
(4) |
Mr.
Gruter’s beneficial ownership includes (i) 27,926 shares of common stock; (ii) 200,000 shares of common stock underlying a
stock option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $8.25
per share; (iii) 157,828 shares of common stock underlying a stock option, which are vested and exercisable, or which will vest and
be exercisable within sixty (60) days of August 20, 2024, at an exercise price of $4.95 per share; and (iv) 28,125 shares
of common stock underlying RSUs which are vested or will vest within sixty (60) days of August 20, 2024, all held directly
by Mr. Gruters. Excludes (i) 145,202 shares of common stock underlying a stock option at an exercise price of $4.95 per share, and
(ii) 150,000 shares of common stock underlying unvested RSUs, held by Mr. Gruters, that are not exercisable within sixty (60) days
of August 20, 2024. |
|
|
(5) |
Mr.
Cassidy’s beneficial ownership includes (A) (i) 13,378,225 shares of our common stock, (ii) a warrant to purchase up to 3,125,000
shares of our common stock which is exercisable within sixty (60) days of August 20, 2024, currently exercisable at $0.80
per share, and (iii) a pre-funded warrant to purchase up to 4,347,826 shares of our common stock, issued at a price of $0.2308 per
share, which is exercisable within sixty (60) days of August 20, 2024, at an exercise price of $0.0001 per share, which is
held directly by Excel Family Partners, LLLP (“Excel”), where Mr. Cassidy is the Manager of Excel’s general partner;
(B) (i) 2,738,889 shares of our common stock held directly by Eagle Investment Group, LLC (“Eagle”), where Mr. Cassidy
is the Manager; and (C) (i) 28,539 shares of our common stock and (ii) 6,115 shares of our common stock underlying RSUs that are
vested or will vest within sixty (60) days of August 20, 2024, held directly by Mr. Cassidy. Excludes 18,347 shares of common
stock underlying unvested RSUs held directly by Mr. Cassidy that are not exercisable within sixty (60) days of August 20,
2024. |
|
|
(6) |
Ms.
Penz’s beneficial ownership includes (A) (i) 648,539 shares of common stock; (ii) 14,366 shares of common stock underlying
a stock option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $6.90
per share; (iii) 7,183 shares of common stock underlying a stock option, which is fully vested and exercisable within sixty (60)
days of August 20, 2024, at an exercise price of $6.23 per share; and (iv) 6,115 shares of common stock underlying RSUs which
are vested or will vest within sixty (60) days of August 20, 2024, all held directly by Ms. Penz; and (B) 26,667 shares of
common stock held by Ms. Penz in a Self-Directed Traditional IRA. Excludes 18,347 shares of common stock underlying unvested RSUs
held by Ms. Penz that are not exercisable within sixty (60) days of August 20, 2024. |
|
|
(7) |
Ms.
Zilka’s beneficial ownership includes (i) 28,539 shares of common stock; (ii) 14,366 shares of common stock underlying a stock
option, which is fully vested and exercisable within sixty (60) days of August 20, 2024, at an exercise price of $6.90 per
share; (iii) 7,183 shares of common stock underlying a stock option, which is fully vested and exercisable within sixty (60) days
of August 20, 2024, at an exercise price of $6.23 per share; and (iv) 6,115 shares of common stock underlying RSUs which are
vested or will vest within sixty (60) days of August 20, 2024, all held directly by Ms. Zilka. Excludes 18,347 shares of common
stock underlying unvested RSUs held by Ms. Zilka that are not exercisable within sixty (60) days of August 20, 2024. |
|
|
(8) |
Mr.
Saint-Fleur’s beneficial ownership includes (i) 28,539 shares of common stock and (ii) 6,115 shares of common stock underlying
RSUs which are vested or will vest within sixty (60) days of August 20, 2024, all held directly by Mr. Saint-Fleur. Excludes
18,347 shares of common stock underlying unvested RSUs held by Mr. Saint-Fleur that are not exercisable within sixty (60) days of
August 20, 2024. |
TRANSACTIONS
WITH RELATED PERSONS
Related
Party Transactions
SEC
rules require us to disclose any transaction since October 1, 2021, or any currently proposed transaction, in which we are a participant
and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent
(1%) of the average of our total assets as of the end of last two completed fiscal years. A related person is any executive officer,
director, nominee for director or holder of 5% or more of our common stock, or an immediate family member of any of those persons.
Revolving
Lines of Credit
Excel
Revolving Line of Credit
Effective
as of December 14, 2023, we entered into a Revolving Line of Credit Loan Agreement with Excel Family Partners, LLLP, an entity managed
by Bruce Cassidy, Executive Chairman of our Board (“Excel” and the “Excel Revolving Line of Credit Agreement”)
for up to a principal sum of $2,500,000, under which we may pay down and re-borrow up to the maximum amount of the $2,500,000 limit (the
“Excel Revolving Line of Credit”). Our drawdown on the Excel Revolving Line of Credit is limited to no more than twenty-five
percent (25%) of the last three full months’ revenue, not to exceed $1,250,000 in any quarter, and not to exceed in aggregate the
outstanding debt amount of $2,500,000.The Excel Revolving Line of Credit is a perpetual loan, with a maturity date that is twelve (12)
months from the date of formal notice of termination by Excel, and accrues interest, payable semi-annually in arrears, at a fixed rate
of interest equal to ten percent (10%) per year. Under the Excel Revolving Line of Credit Agreement, we granted to Excel a security interest
in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products
and proceeds thereof, which security interest is pari passu with the May 13, 2022, Secured Non-Revolving Line of Credit Loan Agreement
(the “RAT Non-Revolving Line of Credit Agreement”) entered into with several institutions and individuals (each, a “RAT
Lender”) for an aggregate principal amount of $2,200,000 (the “RAT Non-Revolving Line of Credit”) and the May 2023
Secured Line of Credit (as defined below), but is subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement
(each as defined below).
Under
the terms of the Excel Revolving Line of Credit Agreement, on December 14, 2023, we issued to Excel a warrant to purchase up to an aggregate
of 3,125,000 shares of our common stock. The warrant has an exercise price of $0.80 per share, which was the closing price of our common
stock on December 13, 2023, expires on December 14, 2026, and is exercisable at any time prior to such date, to the extent that after
giving effect to such exercise, Excel and its affiliates would beneficially own, for purposes of Section 13(d) of the Exchange Act, no
more than 29.99% of the outstanding shares of our common stock.
The
Excel Revolving Line of Credit had a balance, including accrued interest, amounting to $2,519,396 and $0 as of March 31, 2024, and September
30, 2023, respectively. We incurred interest expense for the Excel Revolving Line of Credit in the amount of $118,284 and $0 for the
six months ended March 31, 2024, and 2023, respectively.
GemCap
Revolving Line of Credit
Effective
as of July 29, 2022, we entered into a Loan and Security Agreement with Industrial Funding Group, Inc. (the “Initial Lender”)
for a revolving loan credit facility for the initial principal sum of up to $4,000,000, and through the exercise of an accordion feature,
a total sum of up to $10,000,000 (the “GemCap Revolving Line of Credit Agreement”), evidenced by a Revolving Loan Secured
Promissory Note, also effective as of July 29, 2022 (the “GemCap Revolving Line of Credit”). In connection with the GemCap
Revolving Line of Credit Agreement and the Revolving Loan Note, we also executed and delivered to the Initial Lender the Loan Agreement
Schedule dated as of July 29, 2022 (the “Loan Agreement Schedule”) and other Loan Documents (as defined in the GemCap Revolving
Line of Credit Agreement). Shortly after the effective date of the GemCap Revolving Line of Credit Agreement, the Initial Lender assigned
the GemCap Revolving Line of Credit Agreement, and the Loan Documents, to GemCap Solutions, LLC (“GemCap” or the “Senior
Lender”). Effective as of October 27, 2022, we entered into Amendment Number 1 to the Loan and Security Agreement and to the Revolving
Loan Agreement Schedule, and the Amended and Restated Secured Promissory Note (Revolving Loans) with the Senior Lender to increase the
principal sum available under the GemCap Revolving Line of Credit Agreement from $4,000,000 to $6,000,000.
Effective
July 29, 2024, we entered into Amendment Number 2 to the Loan and Security Agreement, the Loan Agreement Schedule, the Revolving Loan
Note and to the other Loan Documents to amend certain material terms, including to (i) extend the maturity date of the GemCap Revolving
Line of Credit Agreement by one (1) year, from July 29, 2024, to July 29, 2025, and (ii) to make Retail Media TV, Inc., our wholly-owned
subsidiary, a co-borrower thereunder.
The
GemCap Revolving Line of Credit had an original maturity date of July 29, 2024, and began accruing interest on the unpaid principal balance
of advances, payable monthly in arrears, on September 7, 2022, at an annual rate equal to the greater of (I) the sum of (i) the “Prime
Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes,
plus (ii) zero percent (0.00%), and (II) four percent (4.00%). Availability for borrowing under the GemCap Revolving Line of Credit is
dependent upon our assets in certain eligible accounts and measures of revenue, subject to reduction for reserves that the Senior Lender
may require in its discretion, and the accordion feature is a provision whereby we may request that the Senior Lender increase availability
under the GemCap Revolving Line of Credit, subject to its sole discretion.
Under
the GemCap Revolving Line of Credit Agreement, we have granted to the Senior Lender a first-priority security interest in all of our
present and future property and assets, including products and proceeds thereof. In connection with the loan, our existing secured lenders,
some of whom are the RAT Lenders under our RAT Non-Revolving Line of Credit (collectively, the “Subordinated Lenders”) delivered
subordination agreements (the “GemCap Subordination Agreements”) to the Senior Lender. We are permitted to make regularly
scheduled payments, including payments upon maturity, to such subordinated lenders and potentially other payments subject to a measure
of cash flow and receiving certain financing activity proceeds, in accordance with the terms of the GemCap Subordination Agreements.
In connection with the delivery of the GemCap Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants
to each Subordinated Lender on identical terms for an aggregate of up to 296,329 shares of our common stock (each, a “Subordination
Agreement Warrant”). Each Subordination Agreement Warrant has an exercise price of $5.25 per share, expires on July 29, 2025, and
is exercisable at any time prior to such date. One warrant for 191,570 warrant shares was issued to Eagle Investment Group, LLC, an entity
managed by Mr. Cassidy, as directed by his affiliate, Excel, an entity also managed by Mr. Cassidy, one of the Subordinated Lenders.
This warrant held by Eagle was repriced and immediately exercised into shares of common stock as part of the Warrant Repricing in December
2023, as defined and described below. The Subordinated Lenders receiving warrants for the remaining 104,759 warrant shares were also
entitled to receive a cash payment of $22,000 six months from the date of the GemCap Subordination Agreements, representing one percent
(1.00%) of the outstanding principal amount of the loan held by such Subordinated Lenders. This cash payment was made to those Subordinated
Lenders on January 25, 2023.
The
GemCap Revolving Line of Credit had a balance, including accrued interest, amounting to $2,147,821 and $3,757,074 as of March 31, 2024,
and September 30, 2023, respectively. We incurred interest expense for the GemCap Revolving Line of Credit in the amount of $707,962
and $714,740 for the six months ended March 31, 2024, and 2023, respectively.
Non-Revolving
Lines of Credit
Excel
Non-Revolving Loan Agreement
On
February 23, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Prior Excel Loan Agreement”) with
Excel, an entity managed by Bruce Cassidy, Executive Chairman of our Board, for an aggregate principal amount of $1,500,000, which was
amended on April 13, 2022, to increase the aggregate principal amount to $2,000,000 (the “$2m Loan”). Effective as of April
25, 2022, we entered into a Non- Revolving Line of Credit Loan Agreement (the “Excel Non-Revolving Loan Agreement”) with
Excel for an aggregate principal amount of $4,022,986 (the “Excel Non-Revolving Loan”). The Excel Non-Revolving Loan matures
eighteen (18) months from the date of the Excel Non-Revolving Loan Agreement and accrues interest, payable semi-annually in arrears,
at a fixed rate of interest equal to twelve (12) percent per year. On April 25, 2022, we used $2,000,000 of the proceeds of the Excel
Non-Revolving Loan to prepay all of the remaining outstanding principal and interest of the $2m Loan and the Prior Excel Loan Agreement
was terminated in connection with such prepayment. Under the Excel Non-Revolving Loan Agreement, we granted to the lender a security
interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including
products and proceeds thereof (which was subsequently subordinated in connection with the Revolving Loan Agreement). In connection with
the Excel Non-Revolving Loan, on April 25, 2022, we issued a warrant to purchase up to 383,141 shares of our common stock. The warrant
has an exercise price of $5.25 per share, expires on April 25, 2025, and shall be exercisable at any time prior to the expiration date.
Effective as of December 14, 2022, we entered into a Non-Revolving Line of Credit Agreement Amendment and a Non-Revolving line of Credit
Promissory Note Amendment with Excel to extend the maturity date from eighteen (18) months to twenty-four (24) months from the date of
the Excel Non-Revolving Loan Agreement. Effective as of May 10, 2023, we entered into a Non-Revolving Line of Credit Agreement Amendment
No. 2 and a Non-Revolving Line of Credit Promissory Note Amendment No. 2 with Excel to extend the maturity date of the Excel Non-Revolving
Loan from twenty-four (24) months to twenty-five (25) months from the date of the Excel Non-Revolving Loan Agreement.
As
of September 12, 2023, $4,444,060 of principal and interest on the Excel Non-Revolving Line of Credit was outstanding (the “Excel
Non-Revolving Line of Credit Pay Off Amount”). On September 12, 2023, we entered into a Note Conversion Agreement with Excel (the
“Excel Non-Revolving Note Conversion Agreement”), pursuant to which Excel agreed to convert the Excel Non-Revolving Line
of Credit Amount owed under the Excel Non-Revolving Line of Credit Agreement into 6,005,487 shares of our common stock, par value $0.0001
per share, at a conversion price per share of $0.74. The Excel Non-Revolving Note Conversion Agreement contains customary representations,
warranties, agreements and obligations of the parties. After the conversion of the Excel Non-Revolving Line of Credit Pay Off Amount
and the issuance of the shares, there was no principal or interest remaining under the Excel Non-Revolving Line of Credit and the Prior
Excel Line of Credit Agreement was terminated in connection with such conversion.
The
Excel Non-Revolving Loan had a balance, including accrued interest, amounting to $0 and $0 as of March 31, 2024, and September 30, 2023,
respectively. We incurred interest expense for the Excel Non-Revolving Loan in the amount of $0 for the six months ended March 31, 2024.
May
2023 Secured Loan
Effective
as of May 10, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “May 2023 Secured Line of Credit
Agreement”) with several individuals and institutional lenders for aggregate loans of up to $4.0 million (the “May 2023 Secured
Line of Credit”), evidenced by the Secured Non-Revolving Line of Credit Promissory Notes (each a “May 2023 Secured Note”
and collectively, the “May 2023 Secured Notes”), also effective as of May 10, 2023. The May 2023 Secured Line of Credit matures
twenty-four (24) months from the date of the May 2023 Secured Line of Credit and accrues interest, payable semi-annually in arrears,
at a fixed rate of interest equal to twelve percent (12%) per year. We granted to the lenders under the May 2023 Secured Line of Credit
Agreement a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever
located, including products and proceeds thereof, which security interest is pari passu with the RAT Non-Revolving Line of Credit
Agreement and the Excel Revolving Line of Credit Agreement, but is subordinate in rights to GemCap under the GemCap Revolving Line of
Credit Agreement. See “— GemCap Revolving Line of Credit Agreement.”
In
connection with the May 2023 Secured Line of Credit, on May 10, 2023, we agreed to issue to each lender under the May 2023 Secured Line
of Credit Agreement, upon a drawdown, a warrant to purchase up to an aggregate of 369,517 shares of our common stock. Each warrant has
an exercise price of $4.33 per share, expires on May 10, 2026, and is exercisable at any time prior to such date.
As
of May 10, 2023, Excel, an entity managed by Mr. Cassidy, had committed to be a lender under the May 2023 Secured Line of Credit Agreement
for an aggregate loan of $2.65 million, and as of September 11, 2023, Excel had not loaned any funds under the May 2023 Secured Line
of Credit. On May 31, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “Excel $2.2M Secured Line
of Credit Agreement”) with Excel for an aggregate principal amount of up to $2,200,000 (the “Excel $2.2M Line of Credit”),
evidenced by a Non-Revolving Line of Credit Promissory Note (the “Excel $2.2M Note”). Pursuant to the terms of a Pay Off
Letter Agreement with Excel dated September 12, 2023, we refinanced the outstanding principal and interest of the Excel $2.2M Line of
Credit to be included as part of the obligations of the May 2023 Secured Line of Credit Agreement. As a result of such refinancing, as
of September 12, 2023, no principal or interest remained outstanding under the Excel $2.2M Secured Line of Credit, and the Excel $2.2M
Secured Line of Credit Agreement was terminated, and as of September 12, 2023, Excel had loaned $2,266,733 under the May 2023 Secured
Line of Credit Agreement and received a warrant to purchase 209,398 shares of our common stock.
As
of December 14, 2023, of the total aggregate principal and interest outstanding under the May 2023 Secured Line of Credit of $3,262,817,
the outstanding principal and interest on Excel’s portion of the May 2023 Secured Line of Credit was $2,328,617 (the “Excel
May 2023 Secured Line of Credit Pay Off-Amount”). On December 14, 2023, Excel agreed to convert the Excel May 2023 Secured Line
of Credit Pay-Off Amount owed under the May 2023 Secured Line of Credit Agreement into 2,910,771 shares of our common stock at a conversion
price per share of $0.80. In addition, in connection with the Warrant Repricing (as defined below), on December 14, 2023, Excel agreed
to reprice the per share warrant exercise price of the warrant for 209,398 shares of our common stock to $0.80 per warrant share and
immediately exercised the warrant, delivering the net proceeds of $167,518.40 to us. See “—Repricing and Exercise of Certain
Warrants.”
On
December 31, 2023, one of the remaining lenders under the May 2023 Secured Line of Credit converted $101,699.83 in outstanding principal
and interest into 127,124 shares of our common stock at a conversion price per share of $0.80. As of March 31, 2024, a total principal
amount of $800,000 remained outstanding on the May 2023 Secured Line of Credit and warrants for a total of 83,142 warrant shares had
been issued to the remaining lenders in connection with the May 2023 Secured Line of Credit.
The
May 2023 Secured Loan had a principal balance, including accrued interest, amounting to $861,333 and $3,214,769 as of March 31, 2024,
and September 30, 2023, respectively. We incurred interest expense for the May 2023 Secured Loan in the amount of $576,229 and $0 for
the six months ended March 31, 2024, and 2023, respectively.
Excel
$1.0M Line of Credit
On
March 28, 2024, we entered into a Secured Non-Revolving Line of Credit Loan Agreement with Excel, an entity managed by Bruce Cassidy,
Executive Chairman of our Board (the “Excel $1.0M Secured Line of Credit Agreement”), for an aggregate principal amount of
up to $1,000,000 (the “Excel $1.0M Line of Credit”), evidenced by a Secured Non-Revolving Line of Credit Promissory Note
(the “Excel $1.0M Note”). The Excel $1.0M Line of Credit matures one hundred eighty (180) days from the date of the Excel
$1.0M Secured Line of Credit Agreement (the “Excel $1.0M Line of Credit Maturity Date”) and accrues interest, payable in
arrears on the Excel $1.0M Line of Credit Maturity Date, at a fixed rate of interest equal to twelve percent (12%) per year.
Under
the Excel $1.0M Secured Line of Credit Agreement, we granted to Excel a security interest in all of our present and future assets and
properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest
is subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement.
On
May 31, 2024, we entered into a Waiver and Consent Letter Agreement with Excel (the “Excel Waiver Agreement”), pursuant to
which Excel irrevocably agreed to waive its rights under the Excel $1.0M Secured Line of Credit Agreement to receive five hundred thousand
dollars ($500,000) of the net proceeds of any non-affiliate capital raise and consented to us not paying any of such proceeds to it,
contingent upon the closing of such a non-affiliate capital raise.
The
Excel $1.0M Line of Credit had a balance, including accrued interest, amounting to $1,001,000 and $0 as of March 31, 2024, and September
30, 2023, respectively. We incurred interest expense for the Excel $1.0M Line of Credit in the amount of $1,000 and $0 for the six months
ended March 31, 2024, and 2023, respectively.
Repricing
and Exercise of Certain Existing Warrants
On
December 14, 2023, we agreed to offer to amend certain existing warrants exercisable for an aggregate of up to 4,055,240 shares of our
common stock (each such warrant an “Existing Warrant”) to reduce the respective exercise prices thereof to $0.80 per share
(such new price being referred to as the “Amended Warrant Exercise Price”), which was the closing price per share of our
common stock as quoted on the NYSE American on December 13, 2023, on the condition that the holder of each Existing Warrant would commit
to exercise the Existing Warrant within a certain period of time, paying the aggregate Amended Warrant Exercise Price of each respective
Existing Warrant in cash to us (the “Warrant Repricing”). As of December 14, 2023, Existing Warrants exercisable for an aggregate
of up to 786,482 shares of our common stock were held by Excel and Eagle, entities managed by Mr. Cassidy and Existing Warrants exercisable
for an aggregate of up to 443,332 shares of our common stock were held by Denise Penz, a member of our Board. In connection with the
Warrant Repricing, each of Mr. Cassidy and Ms. Penz exercised their Existing Warrants, resulting in net proceeds to us of $983,851.
As
of March 31, 2024, holders of Existing Warrants (including those held by Mr. Cassidy and Ms. Penz) had exercised warrants for 1,850,874
shares for an aggregate exercise price of $1,480,699. No other Existing Warrants have been repriced or exercised under the Warrant Repricing.
Securities
Purchase Agreement – Private Placement with Excel Family Partners, LLLP
On
June 10, 2024, pursuant to a securities purchase agreement between the Company and Excel, we issued and sold to Excel in a private placement
a pre-funded warrant to purchase up to 4,347,826 shares of our common stock at a price of $0.2308 per underlying share, which is immediately
exercisable at an exercise price of $0.0001 per share.
500
Limited
For
the years ended September 30, 2023, and 2022, we paid 500 Limited $394,300 and $413,469, respectively, for programming services provided
to the Company. For the six months ended March 31, 2024, and 2023, we paid 500 Limited $145,500 and $219,400, respectively, for programming
services provided to the Company. 500 Limited is an entity controlled by Liam McCallum, our former Chief Product and Technical Officer.
Related
Person Transaction Approval Policy
We
have in place a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5%
of any class of our common stock, any members of the immediate family of any of the foregoing persons and any firms, corporations or
other entities in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such
person has a 5% or greater beneficial ownership interest, or related parties, are not permitted to enter into a transaction with us without
the prior consent of our Board acting through the Audit Committee or, in certain circumstances, the Chair of the Audit Committee. Any
request for us to enter into a transaction with a related party, in which the amount involved exceeds $120,000 and such related party
would have a direct or indirect interest must first be presented to our Audit Committee, or in certain circumstances the Chair of our
Audit Committee, for review, consideration and approval. In approving or rejecting any such proposal, our Audit Committee is to consider
the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms
generally available to an unaffiliated third party.
PROPOSAL
2
RATIFY
THE APPOINTMENT OF MARCUM LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2024
Audit
Fees
The
aggregate fees billed to us by our principal accountants, Marcum LLP, for professional services rendered during the twelve months ended
September 30, 2023, and 2022, are set forth in the table below:
Fee Category | |
Twelve months ending September 30, 2023 | | |
Twelve months ending September 30, 2022 | |
Audit fees (1) | |
$ | 342,680 | | |
$ | 323,420 | |
Audit-related fees (2) | |
| — | | |
| — | |
Tax fees (3) | |
| — | | |
| — | |
All other fees (4) | |
| — | | |
| — | |
(1) |
Audit
fees consist of fees incurred for professional services rendered for the audit of financial statements, for reviews of our interim
consolidated financial statements included in our quarterly reports on Form 10-Q, and for services that are normally provided in
connection with statutory or regulatory filings or engagements. |
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(2) |
Audit-related
fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our
financial statements but are not reported under “Audit fees.” |
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(3) |
Tax
fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice. |
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(4) |
All
other fees consist of fees billed for services not associated with audit or tax. |
Pre-Approval
Practices and Procedures
In
December 2021, we established an Audit Committee, the purpose of which is to assist the Board in fulfilling its responsibilities related
to our financial accounting, reporting and controls. The Audit Committee’s principal functions are to assist the Board in its oversight
of:
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the
integrity of our accounting and financial reporting processes and the audits of our financial statements by our independent auditors
(the “Independent Auditors”); |
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the
periodic reviews of the adequacy of the accounting and financial reporting processes and systems of internal control that are conducted
by the Independent Auditors and our senior management; |
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the
independence and performance of the Independent Auditors; and |
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our
compliance with legal and regulatory requirements. |
Attendance
at Annual Meeting
Representatives
of Marcum LLP will be present at the Annual Meeting and will have an opportunity to make a statement if they so desire and will be available
to respond to appropriate questions from stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
PROPOSAL
3
APPROVAL
OF AN AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE
THEREUNDER TO 225,000,000
Our
Board believes that it is in the best interests of the Company and our stockholders to amend our Articles of Incorporation to increase
the number of authorized shares of common stock. Upon consultation with our management, our Board unanimously approved, and unanimously
recommends for stockholder approval, the proposal to adopt a Certificate of Amendment to our Articles of Incorporation (the “Certificate
of Amendment”), to increase the number of shares of common stock authorized for issuance thereunder to 225,000,000 shares, each
share of common stock having a par value of $0.0001. As of the date of this Proxy Statement, we were authorized under our Articles of
Incorporation to issue up to a total of 166,666,667 shares of capital stock, comprised of 150,000,000 shares of common stock
and 16,666,667 shares of preferred stock. The form of the amendment is set forth as Appendix A to this Proxy Statement (subject
to any changes required by applicable law). As of the Record Date, there were (i) 80,825,910 shares of common stock outstanding,
(ii) 11,214,525 shares of common stock reserved for future issuance upon exercise of warrants currently outstanding, (iii) 7,832,151
shares of common stock reserved for future issuance upon exercise of options currently outstanding under our equity plans, (iv) 4,258,103
shares of common stock underlying unvested RSUs issued under the 2020 Plan, and (v) 3,499,367 shares of common stock reserved
for future grants under the 2020 Plan. The additional shares of common stock to be authorized by adoption of the Certificate of Amendment
would have rights identical to the currently outstanding shares of common stock. Adoption of the Certificate of Amendment would not affect
the rights of the holders of currently outstanding common stock, except, to the extent the additional authorized shares are issued, for
effects incidental to increasing the number of shares of common stock outstanding, such as dilution of earnings per share and voting
rights of current holders of common stock. If the amendment is adopted, it will become effective upon the filing of the Certificate of
Amendment with the Secretary of State of the State of Nevada.
The
description of the Certificate of Amendment should be read in conjunction with and is qualified in its entirety by reference to the text
of the proposed Certificate of Amendment attached to this Proxy Statement as Appendix A.
Purpose
of the Proposal
The
approval of the Certificate of Amendment is important for our ongoing business. Our Board believes it would be prudent and advisable
to have the additional shares available to provide additional flexibility for the potential use of shares of common stock for business
and financial purposes in the future. Having an increased number of authorized but unissued shares of common stock would allow us to
take prompt action with respect to corporate opportunities that develop, without the delay and expense of convening a special meeting
of stockholders for the purpose of approving an increase in our authorized shares. The additional shares could be used for various purposes
without further stockholder approval. These purposes may include: (i) raising capital, if we have an appropriate opportunity, through
offerings of common stock or securities that are convertible into common stock; (ii) expanding our business through potential strategic
transactions; (iii) establishing strategic relationships with other companies; (iv) exchanges of common stock or securities that are
convertible into common stock for other outstanding securities; (iv) providing equity incentives pursuant to the 2020 Plan, or another
plan we may adopt in the future, to attract and retain employees, officers or directors; and (vi) other general corporate purposes. We
intend to use the additional shares of common stock that will be available to undertake any such issuances described above. As is the
case with the shares of common stock which are currently authorized but unissued, if the Certificate of Amendment is adopted by the stockholders,
the Board will only have authority to issue the additional shares of common stock from time to time without further action on the part
of stockholders to the extent not prohibited by applicable law or by the rules of any stock exchange or market on which our securities
may then be listed or authorized for quotation. Because it is anticipated that our directors and executive officers will be granted additional
equity awards under the 2020 Plan, or another plan we adopt in the future, they may be deemed to have an indirect interest in the Certificate
of Amendment, because absent the Certificate of Amendment, we may not have sufficient authorized shares to grant such awards.
The
increase in authorized shares of our common stock will not have any immediate effect on the rights of existing stockholders. However,
because our stockholders do not have any preemptive rights, future issuance of shares of common stock or securities exercisable for or
convertible into shares of common stock could have a dilutive effect on our earnings per share, book value per share, and the voting
rights of stockholders and could have a negative effect on the price of our common stock.
Disadvantages
to an increase in the number of authorized shares of common stock may include:
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Stockholders
may experience further dilution of their ownership. |
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Stockholders
will not have any preemptive or similar rights to subscribe for or purchase any additional shares of common stock that may be issued
in the future, and therefore, future issuances of common stock, depending on the circumstances, will have a dilutive effect on the
earnings per share, voting power and other interests of our existing stockholders. |
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The
additional shares of common stock for which authorization is sought in this proposal would be part of the existing class of common
stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently outstanding. |
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The
issuance of authorized but unissued shares of common stock could be used to deter a potential takeover of us that may otherwise be
beneficial to stockholders by diluting the shares held by a potential suitor or issuing shares to a stockholder that will vote in
accordance with the Board’s desires. A takeover may be beneficial to independent stockholders because, among other reasons,
a potential suitor may offer such stockholders a premium for their shares of stock compared to the then-existing market price. We
do not have any plans or proposals to adopt provisions or enter into agreements that may have material anti-takeover consequences. |
We
have no specific plan, commitment, arrangement, understanding or agreement, either oral or written, regarding the issuance of common
stock subsequent to this proposed increase in the number of authorized shares at this time, and we have not allocated any specific portion
of the proposed increase in the authorized number of shares to any particular purpose. However, we have in the past conducted certain
public and private offerings of common stock and warrants, and we will continue to require additional capital in the near future to fund
our operations. As a result, it is foreseeable that we will seek to issue such additional shares of common stock in connection with any
such capital raising activities, or any of the other activities described above. The Board does not intend to issue any common stock
or securities convertible into common stock except on terms that the Board deems to be in the best interests of us and our stockholders.
We are therefore requesting our stockholders approve this proposal to amend our Articles of Incorporation to increase the number of shares
of common stock authorized for issuance thereunder to 225,000,000 shares.
Approval
Required
The
approval of this Proposal 3 will require a majority of the voting power of the issued and outstanding shares of common stock that are
entitled to vote on Proposal 3 at the Annual Meeting. Accordingly, abstentions and, in the event that Proposal 3 is deemed “non-routine,”
broker non-votes, if any, will have the effect of a vote “AGAINST” this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO THE COMPANY’S ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE THEREUNDER TO 225,000,000.
PROPOSAL
4
APPROVAL
OF THE ADJOURNMENT OF THE ANNUAL MEETING IN THE EVENT THAT THE NUMBER OF SHARES OF COMMON STOCK PRESENT OR REPRESENTED BY PROXY AT THE
ANNUAL MEETING AND VOTING “FOR” THE ADOPTION OF PROPOSAL 3 ARE INSUFFICIENT.
Adjournment
of the Annual Meeting
In
the event that the number of shares of common stock present or represented by proxy at the Annual Meeting and voting “FOR”
the adoption of Proposal 3 are insufficient to approve such proposals, we may move to adjourn the Annual Meeting in order to enable us
to solicit additional proxies in favor of the adoption of Proposal 3. In that event, we will ask stockholders to vote only upon Proposal
4 and not on any other proposal discussed in this Proxy Statement. If the adjournment is for more than thirty (30) days, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to vote at the Annual Meeting.
For
the avoidance of doubt, any proxy authorizing the adjournment of the Annual Meeting shall also authorize successive adjournments thereof,
at any meeting so adjourned, to the extent necessary for us to solicit additional proxies in favor of the adoption of any such proposal.
Approval
Required
The
approval of this Proposal 4 will require a majority of the total votes cast, whether in person or represented by proxy, on Proposal 4
at the Annual Meeting. As a result, abstentions and broker non-votes, if any, will not affect the outcome of the vote of this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT OF THE ANNUAL MEETING IF THE VOTES FOR PROPOSAL
3 ARE INSUFFICIENT.
PROPOSAL
5
ADVISORY
VOTE TO APPROVE EXECUTIVE COMPENSATION
The
Board believes that the Company’s compensation program for executive officers is designed to attract and retain high quality people
and to motivate them to achieve both our long-term and short-term goals.
Under
the Dodd-Frank Act, and Section 14A of the Exchange Act, this proposal, commonly referred to as the “Say on Pay” resolution,
seeks a stockholder advisory vote on the compensation of our named executive officers as disclosed pursuant to Item 402 of Regulation
S-K.
The
Say on Pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board. Nevertheless, our Board
and our Compensation Committee value the opinions of our stockholders, whether expressed through this vote or otherwise, and accordingly,
the Board and Compensation Committee intend to consider the results of this vote among the many factors they consider in making determinations
in the future regarding executive compensation arrangements. The Company will disclose the results of the stockholder advisory vote as
a part of its report on voting results for the Annual Meeting.
A
majority of votes cast, whether in person or represented by proxy, at the Annual Meeting and entitled to vote thereon will be required
for the approval of this proposal. As a result, abstentions and broker non-votes, if any, will not affect the outcome of this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THE ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION.
PROPOSAL
6
ADVISORY
VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
The
Dodd-Frank Act and Section 14A of the Exchange Act also enables our stockholders to indicate their preference regarding how frequently
we should seek non-binding advisory votes on the compensation of our named executive officers, as disclosed in our proxy statements pursuant
to the SEC’s compensation disclosure rules. By voting on this Proposal 6, stockholders may indicate whether they would prefer an
advisory vote on the compensation of our named executive officers once every one, two, or three years. Alternatively, stockholders may
abstain from casting a vote. After careful consideration of this proposal, our Board has determined that an advisory vote on executive
compensation that occurs every year is the most appropriate alternative for the Company, and therefore our Board recommends that you
vote for a one-year interval for the stockholder advisory vote on executive compensation.
In
formulating its recommendation, our Board considered that an annual advisory vote on executive compensation will allow our stockholders
to provide us with their direct input on our compensation practices as disclosed in our proxy statements every year. The Board’s
determination was influenced by the fact that the compensation of our named executive officers is evaluated, adjusted and approved on
an annual basis. As part of the annual review process, the Board believes that stockholder sentiment should be a factor that is taken
into consideration by the Board and the Compensation Committee in making decisions with respect to executive compensation.
While
the Board believes that its recommendation is appropriate at this time, stockholders are not voting to approve or disapprove that recommendation,
but are instead asked to indicate their preference, on an advisory basis, as to whether the non-binding stockholder advisory votes on
the approval of our named executive officer compensation practices should be held every year, every two years or every three years. The
option among those choices receiving the highest number of votes cast, whether in person or represented by proxy, at the Annual Meeting
will be deemed to be the frequency preferred by our stockholders. The Board and the Compensation Committee value the opinions of our
stockholders in this matter and, to the extent there is any significant vote in favor of one frequency over the other options, even if
less than a majority of the votes cast support such frequency, the Board will consider our stockholders’ concerns and evaluate
any appropriate next steps. However, because this vote is advisory and not binding on the Board or the Company in any way, the Board
may decide that it is in the best interests of our stockholders and the Company to hold stockholder advisory votes on executive compensation
more or less frequently than the option approved by our stockholders.
Of
the three possible substantive responses for this proposal (every 1 year, every 2 years or every 3 years), the response that receives
the highest number of votes cast at the Annual Meeting, whether in person or represented by proxy, will be the frequency of the advisory
vote on executive compensation. As a result, abstentions and broker non-votes, if any, will not affect the outcome of this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE FOR “ONE YEAR” AS THE FREQUENCY FOR HOLDING THE ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION.
STOCKHOLDER
PROPOSALS
Stockholder
Proposals for 2025 Annual Meeting
Any
stockholder proposals submitted, in reliance on Rule 14a-8 under the Exchange Act, for inclusion in our proxy statement and form of proxy
for our 2025 Annual Meeting of Stockholders, must be received by the Company no later than April 24,
2025, in order to be considered for inclusion in our proxy statement and form of proxy. Such proposal must also comply with the requirements
as to form and substance established by the SEC if such proposals are to be included in the proxy statement and form of proxy. Any such
proposal shall be mailed to: Loop Media, Inc., 2600 West Olive Avenue, Suite 5470, Burbank, CA 91505, Attn.: Secretary.
Our
Bylaws state that a stockholder must provide timely written notice of a proposal to be brought before the meeting and supporting documentation
as well as be present at such meeting, either in person or by a representative. For our 2025 Annual Meeting of Stockholders, a stockholder’s
notice shall be timely received by us at our principal executive office if received no later than June 21, 2025, and no earlier than
May 22, 2025, provided, however, in the event the date of the 2025 Annual Meeting of Stockholders is more than 25 days prior to or more
than 25 days after the one-year anniversary of the date of the Annual Meeting, then, for the notice to be timely, it must be so received
by the Secretary not earlier than the close of business on the 120th day prior to the 2025 Annual Meeting of Stockholders and not later
than the close of business on the later of (A) the 90th day prior to the 2025 Annual Meeting of Stockholders, or (B) the tenth day following
the day on which public announcement of the date of 2025 Annual Meeting of Stockholders. Proxies solicited by our Board will confer discretionary
voting authority with respect to these proposals, subject to the SEC’s rules and regulations governing the exercise of this authority.
Any such proposal shall be mailed to: Loop Media, Inc., 2600 West Olive Avenue, Suite 5470, Burbank, CA 91505, Attn.: Secretary.
Further,
if you intend to nominate a director and solicit proxies in support of such director nominee(s) at the 2025 Annual Meeting of Stockholders,
you must also provide the notice and additional information required by Rule 14a-19 to: Loop Media, Inc., 2600 West Olive Avenue, Suite
5470, Burbank, CA 91505, Attn.: Secretary, no later than July 21, 2025. This deadline under Rule 14a-19 does not supersede any of the
timing requirements for advance notice under our Bylaws. The supplemental notice and information required under Rule 14a-19 is in addition
to the applicable advance notice requirements under our Bylaws as described in this section and it shall not extend any such deadline
set forth under our Bylaws.
ANNUAL
REPORT
A
copy of our Annual Report on Form 10-K (including audited financial statements) filed with the SEC is enclosed herewith. Additional copies
of our Annual Report on Form 10-K may be obtained without charge by writing to Loop Media, Inc., 2600 West Olive Avenue, Suite 5470,
Burbank, CA 91505, Attn.: Secretary. Exhibits to our Annual Report on Form 10-K will be mailed upon request therefor by a holder or a
beneficial owner of our common stock on August 20, 2024, accompanied by a payment of specified fees to cover the costs of copying
and mailing such materials.
Our
audited financial statements for the fiscal year ended September 30, 2023, and certain other related financial and business information
are contained in our Annual Report on Form 10-K, which is being made available to our stockholders along with this Proxy Statement, but
which is not deemed a part of the proxy soliciting material.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
Some
banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements.
This means that only one copy of this Proxy Statement may have been sent to multiple stockholders in the same household. We will promptly
deliver a separate copy of this Proxy Statement to any stockholder upon written or oral request to: Loop Media, Inc., 2600 West Olive
Avenue, Suite 5470, Burbank, CA 91505 or by phone at (213) 436-2100. Any stockholder who wants to receive a separate copy of this Proxy
Statement, or of our proxy statements or annual reports in the future, or any stockholder who is receiving multiple copies and would
like to receive only one copy per household, should contact the stockholder’s bank, broker, or other nominee record holder, or
the stockholder may contact us at the address and phone number above.
OTHER
MATTERS
As
of the date of this Proxy Statement, the Board does not intend to present at the Annual Meeting any matters other than those described
herein and does not presently know of any matters that will be presented by other parties at the Annual Meeting. If any other matter
requiring a vote of the stockholders should come before the Annual Meeting, it is the intention of the persons named in the proxy to
vote with respect to any such matter in accordance with the recommendation of the Board or, in the absence of such a recommendation,
in accordance with the best judgment of the proxy holder.
|
By
Order of the Board of Directors |
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/s/
Justis Kao |
|
Justis
Kao |
|
Chief
Executive Officer |
August
22, 2024
Burbank,
CA
Appendix
A
Exhibit
A
ARTICLE
III
CAPITAL
STOCK
Section
1. Authorized Shares. The aggregate number of shares which the Corporation shall have authority to issue is two hundred forty-one
million six hundred sixty-six thousand six hundred sixty seven (241,666,667) shares, consisting of two classes to be designated, respectively,
“Common Stock” and “Preferred Stock,” with all of such shares having a par value of $.0001 per share. The total
number of shares of Common Stock that the Corporation shall have authority to issue is two hundred twenty-five million (225,000,000)
shares. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is sixteen million six hundred
sixty-six thousand six hundred sixty-seven (16,666,667) shares. The Preferred Stock may be issued in one or more series, each series
to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. The voting powers, designations,
preferences, limitations, restrictions, and relative, participating, optional and other rights, and the qualifications, limitations,
or restrictions thereof, of the Preferred Stock shall hereinafter be prescribed by resolution of the board of directors pursuant to Section
3 of this Article III, except for the Series A Convertible Preferred Stock, which is set forth herein.1
1 |
The
Series B stock was created by a Certificate of Designation which is incorporated into these Restated Articles. |
Loop Media (AMEX:LPTV)
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