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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
___________________________________________________________________
Date of Report (Date of earliest event reported): January
29, 2024
RISKON INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Nevada |
|
001-40701 |
|
30-0680177 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
303 Pearl Parkway Suite 200, San Antonio, TX
78215
(Address of principal executive offices) (Zip Code)
(800) 762-7293
(Registrant's telephone number, including area
code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
|
Trading
Symbol(s) |
|
Name of each exchange on which registered |
| Common Stock, $0.001 par value |
|
ROI |
|
The Nasdaq Capital Market |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| ITEM 5.02 | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
Resignations
Effective January 29, 2024 (the “Effective
Date”), RiskOn International, Inc., a Nevada corporation (the “Company”), accepted the resignations of (i)
Randy May, its former Chairman of the Board of Directors (the “Board”) in such capacity, and as the Company’s
Chief Executive Officer, and (ii) Jay Puchir, its former Chief Financial Officer, each of which was submitted to the Company on January
28, 2024. Notwithstanding Mr. Puchir’s resignation as the Company’s Chief Financial Officer, he has agreed to remain with
the Company as its Vice President until January 28, 2024 to undertake the responsibility described in Item 8.01 hereto.
Neither Mr. May’s or Mr. Puchir’s
resignation was the result of any disagreement with the Company, or its management on any matter relating to the Company's operations,
policies or practices. The Company thanks Messrs. May and Puchir for their contributions.
Appointments
Milton C. Ault.
As previously disclosed on a Current Report
on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on January 4, 2024, the Company appointed
Milton C. Ault, III to its board of directors (the “Board”) effective on the foregoing date.
On the Effective Date, the Company appointed
Mr. Ault as its Chairman of the Board as well as its Chief Executive Officer.
Mr. Ault, 54, currently holds the position
of Executive Chairman at Ault Alliance, Inc. (“AAI”), a diversified holding company listed on the NYSE American and
Chairman of the Board at Ault Disruptive Technologies Corporation (“ADRT”), a Special Purpose Acquisition Company listed
on the NYSE. Since January 2011, Mr. Ault has been the Vice President of Business Development at MCKEA Holdings, LLC, a family office.
He has also been the Chairman of Avalanche International Corp. (“AVLP”), a publicly traded Nevada company categorized
as a "voluntary filer" (not required to file periodic reports) since September 2014. Since December 2015, Mr. Ault has held
the positions of Chairman and Chief Executive Officer at Ault & Company, Inc., a Delaware holding company. On February 25, 2016, Mr.
Ault founded Alzamend Neuro, Inc. (“ALZN”), a biotechnology firm dedicated to researching and finding treatments, prevention
methods, and cures for Alzheimer's Disease. He served as its Chairman until its initial public offering, at which point he transitioned
to the role of Chairman Emeritus and consultant. In April 2023, Mr. Ault was appointed as the Executive Chairman of the board of directors
of the Singing Machine Company, Inc., a company listed on the Nasdaq Stock Market. Throughout his career, Mr. Ault has provided consulting
services to both publicly traded and privately held companies, offering them the benefit of his diverse expertise, spanning from development
stage to well-established businesses. With over twenty-seven years of experience, he is a seasoned business professional and entrepreneur
with a track record of identifying value in various financial markets, including equities, fixed income, commodities, and real estate.
There are no family relationships between
Mr. Ault and any of our other officers and directors. There is no arrangement or understanding between Mr. Ault and any other persons
pursuant to which Mr. Ault was appointed as a director. Other than as set forth below under the heading “Compensation,” there
are no related party transactions involving Mr. Ault that are reportable under Item 404(a) of Regulation S-K.
Mr. Ault will not, at the present time,
be compensated for his services as the Company’s Chief Executive Officer.
Compensation. On March 6, 2023, the
Company entered into an Amendment (the “Amendment”) to the Share Exchange Agreement (the “Agreement”)
dated as of February 8, 2023 by and among Ault Alliance, Inc. (“AAI”), the owner of approximately 86% of BitNile.com,
Inc. (“BitNile.com”), providing for the acquisition of all of the outstanding shares of capital stock of BitNile.com,
in exchange for (i) 8,637.5 shares of newly designated Series B Convertible Preferred Stock of the Company issued to AAI (which as amended
is subject to upward adjustment ad more fully described below) (the “Series B”), and (ii) 1,362.5 shares of newly designated
Series C Convertible Preferred Stock of the Company to be issued to the to the minority shareholders of BitNile.com (the “Series
C,” and together with the Series B, the “Preferred Stock”). The original terms of the Agreement and each
series of Preferred Stock was previously disclosed in the Company’s Current Report on Form 8-K filed by the Company on February
14, 2023. The Preferred Stock is convertible at $0.25 per share and is not convertible until the first day after the record date for seeking
shareholder approval.
The parties closed on the Agreement with
the amended terms which are summarized below on March 6, 2023 (the “Closing”). As a result of the Closing, BitNile.com
became a wholly owned subsidiary of the Company. As previously disclosed, BitNile.com’s principal business entails the development
and operation of a metaverse platform, the beta for which launched on March 1, 2023.
Pursuant to the Amendment, a new provision
was added to the Agreement which requires that as of the Closing, the Company shall have established a bonus pool pursuant to which, upon
the date that BitNile.com shall have generated $100 million of revenue in the aggregate, the Company shall pay a bonus in the aggregate
amount of $25 million to three executives of AAI in the following proportions: (i) $10 million, (ii) $10 million and (iii) $5 million.
Such bonus payments will be payable in cash, provided, however, that if in AAI’s reasonable determination the payment of the foregoing
bonus payments would materially and adversely impact the Company’s cash position, AAI shall direct the Company to make such payments
in shares of common stock. The number of shares of common stock issuable by the Company shall in such case be determined by dividing the
amount of the bonus payment by the closing sale price of the common stock on the trading day immediately preceding AAI’s determination.
Mr. Ault is one of the three AAI executive
officers entitled to participate in the bonus provided for by the Amendment in the amount of $10 million if the threshold is met. He acquired
62.5 shares of Series C in exchange for his shares of BitNile.com common stock.
William B. Horne
As of the Effective Date, the Company appointed
Mr. Horne to the Board.
Mr. Horne, 55, has served as a member of
AAI’s board of directors since October 2016. On January 19, 2021, Mr. Horne resigned as AAI’s President and was appointed
as its Chief Executive Officer. On August 19, 2020, Mr. Horne resigned as AAI’s Chief Financial Officer and was appointed as its
President. He was appointed as AAI’s Chief Financial Officer on January 25, 2018. Prior to his appointment as our Chief Financial
Officer, Mr. Horne served as one of AAI’s independent directors. Mr. Horne has served as the Chief Executive Officer and on the
board of directors of ADRT since its incorporation in February 2021. Mr. Horne has served on the board of directors of Giga-Tronics Incorporated
since September of 2022. Mr. Horne is a director and Chief Financial Officer of AVLP. Mr. Horne has served on the board of directors of
ALZN since June 1, 2016 and became its chairman of the board upon consummation of its IPO. He served as the Chief Financial Officer of
Targeted Medical Pharma, Inc. (OTCBB: TRGM) from August 2013 to May 2019. Mr. Horne previously held the position of Chief Financial Officer
in various public and private companies in the healthcare and high-tech fields. Mr. Horne has a Bachelor of Arts Magna Cum Laude in Accounting
from Seattle University. We believe that Mr. Horne's extensive financial and accounting experience in diversified industries and with
companies involving complex transactions give him the qualifications and skills to serve as one of our directors.
There are no family relationships between
Mr. Horne and any of our other officers and directors. There is no arrangement or understanding between Mr. Horne and any other persons
pursuant to which Mr. Horne was appointed as a director. Other than as set forth below under the heading “Compensation,” there
are no related party transactions involving Mr. Horne that are reportable under Item 404(a) of Regulation S-K.
Mr. Horne will be compensated in accordance
with the Company’s standard compensation policies and practices for the Board, the components of which were disclosed in the Company’s
annual report on Form 10-K for the fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission on July 14, 2023,
under Item 11.
Compensation. The first three paragraphs
of this heading applicable to Mr. Ault above are incorporated herein by reference.
Mr. Horne is one of the three AAI executive
officers entitled to participate in the bonus provided for by the Amendment in the amount of $10 million if the threshold is met. He acquired
250 shares of Series C in exchange for his shares of BitNile.com common stock.
Steve J. Smith
As of the Effective Date, the Company appointed
Mr. Smith to the Board.
Mr. Smith, 70, is a seasoned business leader
recognized for pioneering computer numerical control (“CNC”) programming, co-founding and scaling multiple companies, and
steering operational and financial excellence, having operated in this space for more than 35 years. Mr. Smith’s leadership has
been instrumental in driving growth, optimizing operations, and ensuring the delivery of high-quality, competitively priced products.
From 1994 to the present, Mr. Smith has acted as a CNC consultant for a number of entities, including JBL Speakers, Pioneer Electronics,
Steelcase Manufacturing, Olhausen Billiards, World of Leisure Pool Tables, Rickenbacker Guitars and Fender Musical Instruments, Inc. Mr.
Smith received his Bachelor of Science in Business Administration from Point Loma Nazarene University in 1977. We believe that Mr. Smith’s
a rich background in business administration and a track record of impactful leadership roles, including board positions, give him the
qualifications and skills to serve as one of our directors.
There are no family relationships between
Mr. Smith and any of our other officers and directors. There is no arrangement or understanding between Mr. Smith and any other persons
pursuant to which Mr. Smith was appointed as a director. There are no related party transactions involving Mr. Smith that are reportable
under Item 404(a) of Regulation S-K.
Mr. Smith will be compensated in accordance
with the Company’s standard compensation policies and practices for the Board, the components of which were disclosed in the Company’s
annual report on Form 10-K for the fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission on July 14, 2023,
under Item 11.
Kayson Pulsipher
On the Effective Date, the Company appointed
Mr. Pulsipher as its Chief Financial Officer, replacing Mr. Puchir in such capacity.
Employment Agreement
On the Effective Date, the Company entered
into an employment agreement (the “Agreement”) with Mr. Pulsipher to serve as its Chief Financial Officer of the Company
through January 28, 2027 (the “Initial Term”), unless earlier terminated in accordance with the provisions thereof,
and shall be automatically renewed for successive one (1) year periods (each, a “Renewal Term”) thereafter unless either
party provides the other party with written notice of his or its intention not to renew this Agreement at least one (1) month prior to
the expiration of the Initial Term or any Renewal Term of the Agreement
Pursuant to the Agreement, Mr. Pulsipher
will be paid a base salary of $250,000 per annum (the “Base Salary”). In addition, Mr. Pulsipher shall be eligible
to earn a cash bonus as the Board may determine, from time to time, based on meeting performance objectives and bonus criteria to be identified
by the Board (the “Performance Bonus”). The determination of whether the Company has achieved a certain financial performance
objective in any year for the purposes of the Performance Bonus shall be made by the independent registered public accounting firm regularly
retained or employed by the Company within ninety (90) days after the end of each fiscal year.
Further, Mr. Pulsipher is entitled to a
signing bonus of $50,000, payable on the Effective Date. In addition, Mr. Pulsipher shall be entitled to annual bonuses of $50,000, payable
on each of January 31, 2024, January 31, 2025 and January 31, 2026.
Pursuant to the Agreement, Mr. Pulsipher
may be granted such equity awards as the Board may from time to time deem appropriate.
Mr. Pulsipher’s bonuses, if any, and
all stock based compensation shall be subject to “Company Clawback Rights” if during the period that Mr. Pulsipher is employed
by the Company and upon the termination of Mr. Pulsipher’s employment and for a period of two years thereafter, if there is a restatement
of any of the Company’s financial results from which any bonuses and stock based compensation to Mr. Pulsipher shall have been determined.
Upon termination of Mr. Pulsipher’s
employment (other than upon the expiration of the employment), Mr. Pulsipher shall be entitled to receive: (A) any earned but unpaid Base
Salary through the termination date; (B) all reasonable expenses paid or incurred; and (C) any accrued but unused vacation time.
Further, unless Mr. Pulsipher’s employment
is terminated as a result of his death or disability or for cause or he terminates his employment without good reason, then upon the termination
of Mr. Pulsipher’s employment, the Company shall pay to Mr. Pulsipher a separation payment as follows: (a) an amount equal to six
(6) months of the Base Salary (as in effect immediately prior to the termination date), and (b) a prorated Performance Bonus amount calculated
in accordance with the Performance Bonus criteria set forth in the Agreement and the actual number of days Mr. Pulsipher worked in the
calendar year prior to the termination date.
The preceding discussion is qualified in
its entirety to the Agreement, which has been filed as Exhibit 10.1 hereto and is incorporated by reference herein in its
entirety.
Side Letter
On December 29, 2023, the Company and Mr.
Pulsipher entered into a side letter with the Company and two of the AAI Executives that provided for:
| (a) | a change in his title from Director of Reporting & Technical Accounting to Senior Vice President of
Finance; |
| (b) | an annual payment of $1,000 for each profitable clinic that the Company, through a subsidiary, opens,
where “profitable” means that the clinic has shown positive EBITDA for any given year; |
| (c) | the payment to Mr. Pulsipher of an additional $50,000 per year, i.e., from $200,000 to $250,000, to be
paid to Mr. Pulsipher no later than December 29, 2023, commencing January 1, 2024; and |
| (d) | two of the above referenced AAI executive officers agreeing to allocate 12.5% of their bonus payments
to Mr. Pulsipher, which bonus payments are disclosed under the heading “Compensation” above for Messrs. Ault and Horne. |
Mr. Pulsipher, 43, brings more than 15 years
of professional experience in various senior accounting and finance roles to the Company. Prior to his appointment as the Chief Financial
Officer, Mr. Pulsipher served as the Director of Reporting and Technical Accounting since August 17, 2023 for the Company, as well as
its Senior Vice President of Finance since December 19, 2023. Mr. Pulsipher has served as AAI’s Director of Reporting and Technical
Accounting since October 10, 2022. Prior to joining AAI, Mr. Pulsipher served as the interim Controller as an outside contractor from
January 2022 until September 2022 for both Office Depot, a subsidiary of The ODP Corporation, a NASDAQ listed company (ODP) and Porch,
also a NASDAQ listed company (PRCH). Prior thereto, he had financial leadership accounting and SEC reporting roles with increasing responsibilities
at Light & Wonder a NASDAQ listed company (LNW), formerly known as Scientific Games, from March 2019 to December 2021. Mr. Pulsipher
began his professional accounting career in the construction field and ultimately as that company’s controller before entering the
public accounting profession in 2013 at RSM, formerly known as McGladrey & Pullen, LLP and held several positions at Deloitte &
Touche, LLP where he was eventually promoted to Audit Manager. Mr. Pulsipher’s industry experience is vast, with extensive experience
in fast-growth environments, building teams and having been engaged with multiple types of financing transactions, including IPOs, convertible
debt, term loans, acquisitions and lines of credit. Mr. Pulsipher holds a Master of Science degree in Accounting from Southern Utah University.
Mr. Pulsipher has been a licensed Certified Public Accountant since 2015 and has an active license in the state of Nevada.
There are no family relationships between
Mr. Pulsipher and any of our other officers and directors. There is no arrangement or understanding between Mr. Pulsipher and any other
persons pursuant to which Mr. Pulsipher was appointed as the Company’s Chief Financial Officer other than as set forth above. There
are no related party transactions involving Mr. Pulsipher that are reportable under Item 404(a) of Regulation S-K other
than as set forth above.
Joseph M. Spaziano
On the Effective Date, the Company appointed
Mr. Spaziano as its Chief Operating Officer.
Mr. Spaziano, 51, is the Chief Information
Officer and Chief Technology Officer of AAI, where his leadership over the past five years has been pivotal in transforming the company's
technological framework. His accomplishments include the development of a multi-use data center for Bitcoin mining, and significantly
enhancing the IT infrastructure and security protocols. Mr. Spaziano has held multiple certifications from Microsoft and Google, underscoring
his deep expertise in the field. Prior to his tenure at AAI, he served honorably in the United States Army and Army Reserve for nine years,
a period that ingrained in him a strong sense of discipline and leadership, which has been instrumental in his professional achievements.
Mr. Spaziano will not, at the present time,
be compensated for his services as the Company’s Chief Operating Officer.
There are no family relationships between
Mr. Spaziano and any of our other officers and directors. There is no arrangement or understanding between Mr. Spaziano and any other
persons pursuant to which Mr. Spaziano was appointed as the Company’s Chief Operating Officer. There are no related party transactions
involving Mr. Spaziano that are reportable under Item 404(a) of Regulation S-K other than that he acquired 62.5 shares
of Series C in exchange for his shares of BitNile.com common stock.
Douglas Gintz
On the Effective Date, the Company appointed
Mr. Gintz as its Chief Technology Officer.
Mr. Gintz, 57, has been the Chief Technology
Officer of Imperalis Holding Corp., a Nevada corporation d/b/a TurnOnGreen, Inc. (“TOG”), since September of 2022 and
served as the Chief Technology Officer for one of its subsidiaries between February 2021 and September 2022. He joined TOG’s Board
of Directors in September 2022. Mr. Gintz is responsible for driving strategic software initiatives and delivering key technologies essential
to the market penetration of our EV charging solutions business. Mr. Gintz also currently serves as the Chief Technology Officer and Director
of Global Technology Implementation at AAI since February 2021. Mr. Gintz's previous leadership roles include Chief Executive Officer
of Pacific Coders, LLC from August 2002 to January 2022, and Chief Technology Officer of Endocanna Health, Inc. from January 2019 to January
2021. Mr. Gintz served at Targeted Medical Pharma, Inc., a publicly traded microcap, as Chief Marketing Officer and Technology Officer,
from January 2018 to December 2019, and Chief Technology Officer and Chief Information Officer from January 2012 to May 2016. Mr. Gintz
has over 30 years of hands-on experience bringing products to market. Specializing in emerging technologies, Mr. Gintz has developed manufacturing
compliance systems, DNA reporting engines, medical billing software, e-commerce applications, and retail software for companies ranging
from startups to multinational corporations.
Mr. Gintz will not, at the present time,
be compensated for his services as the Company’s Chief Technology Officer.
There are no family relationships between
Mr. Gintz and any of our other officers and directors. There is no arrangement or understanding between Mr. Gintz and any other persons
pursuant to which Mr. Gintz was appointed as the Company’s Chief Technology Officer. There are no related party transactions involving
Mr. Gintz that are reportable under Item 404(a) of Regulation S-K other than that he acquired 87.5 shares of Series C in
exchange for his shares of BitNile.com common stock.
| ITEM 7.01 | REGULATION FD DISCLOSURE. |
On January 29, 2024, the Company issued a
press release announcing the execution of the Agreement. A copy of the press release is furnished herewith as Exhibit 99.1
and is incorporated by reference herein.
In accordance with General Instruction B.2
of Form 8-K, the information under this item shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended,
except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed an admission as to the materiality
of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
The Securities and Exchange Commission encourages
registrants to disclose forward-looking information so that investors can better understand the future prospects of a registrant and make
informed investment decisions. This Current Report on Form 8-K and exhibits may contain these types of statements, which are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and
reflect the Registrant’s judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among
other things, operating results and are indicated by words or phrases such as “expects,” “should,” “will,”
and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ
materially from those anticipated at the date of this Current Report on Form 8-K. Investors are cautioned not to rely unduly on forward-looking
statements when evaluating the information presented within.
On September 11, 2022 and September 30, 2022, the Company issued
press releases announcing a record date for the distribution (the “Distribution”) of its shares of common stock of
its majority owned subsidiary, White River Energy Corp. (“White River”) and described in greater detail in the registration
statement on Form S-1 (File No. 333-268707) filed by White River with respect to such distribution. The Company has concluded that it
will not, for regulatory reasons, be able to effectuate the distribution as originally contemplated.
On January 28, 2024, the Company, Mr. Puchir and Brian McBride
entered into the Transfer Agreement. The Transfer Agreement was entered into in an effort to redress the Company’s inability to
complete the Distribution, to the extent possible under applicable law. Pursuant to the Transfer Agreement, the Parties thereto will cooperate
in undertaking to communicate with as many eligible shareholders as Messrs. Puchir and McBride can identify with a view to transferring
to them the Company’s shares of White River as the foregoing press releases and registration statement envisioned when originally
issued and filed, respectively.
A copy of the Transfer Agreement is furnished herewith as Exhibit
99.2 and is incorporated by reference herein.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
* Indicates management contract or compensatory plan or arrangement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
RISKON INTERNATIONAL, INC. |
| |
|
| |
|
| Dated: January 29, 2024 |
/s/ Henry Nisser |
|
| |
Henry Nisser |
| |
President and General Counsel |
- 7 -
Exhibit 10.1
EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into as of January 28, 2024 and effective as of January 29, 2024 (“Effective
Date”), by and between RiskOn International, Inc., a Nevada corporation with an address of 303 Pearl Parkway Suite 200, San
Antonio, TX 78215 (the “Company”) and Kayson Pulsipher, an individual (the “Executive”).
W I T N E S S E T H:
WHEREAS,
the Executive desires to be employed by the Company as its Chief Financial Officer and the Company wishes to employ Executive in such
capacity;
NOW, THEREFORE,
in consideration of the foregoing recitals and the respective covenants and agreements of the parties contained in this Agreement, the
Company and Executive hereby agree as follows:
1. Employment
and Duties. The Company agrees to employ and Executive agrees to serve as the Company's Chief Financial Officer. The rights, duties
and responsibilities of Executive shall include the right and duty to manage the day to day financial operations of the Company and such
other duties and responsibilities as are consistent with Executive’s position. Executive shall report to the Executive Chairman,
the Chief Executive Officer and the board of directors (the “Board”) of the Company.
Executive shall devote a sufficient
amount of his working time and efforts during the Company's normal business hours to the business and affairs of the Company and its subsidiaries
in order to diligently and faithfully perform his duties and responsibilities duly assigned to him pursuant to this Agreement. Executive
shall be permitted to carry on additional activities provided that none of the additional activities interferes with the performance of
the duties and responsibilities of Executive or are determined to be inconsistent with the position, standing, stature, reputation or
best interests of the Company; nothing in this Section 1, shall prohibit Executive from (a) serving as a director or member of
a committee of entities that do not, in the reasonable good faith determination of the Board, compete with the Company or otherwise create,
or could create, in the reasonable good faith determination of the Board, a conflict of interest with the business of the Company; (b)
delivering lectures, fulfilling speaking engagements, and any writing or publication relating to his area of expertise; (c) serving as
a director or trustee of any governmental, charitable or educational organization; or (d) engaging in additional activities in connection
with personal and/or business investments and community affairs.
2. Term.
The term of this Agreement shall commence on the Effective Date and shall continue through January 28, 2027 (the “Initial Term”)
unless earlier terminated in accordance with the provisions hereof, and shall be automatically renewed for successive one (1) year periods
(each, a “Renewal Term”) thereafter unless either party provides the other party with written notice of his or its
intention not to renew this Agreement at least one (1) month prior to the expiration of the Initial Term or any Renewal Term of this
Agreement. “Employment Period” shall mean the Initial Term plus Renewal Term, if any.
3. Place
of Employment. Executive's services may, but need not, be performed at the Company's offices at the address in the first paragraph
above. The Executive may, beginning on the Effective Date, from time to time perform his duties to the Company at another location or
locations, at the discretion of Executive in consultation with the Executive Chairman. The parties acknowledge, however, that Executive
may be required to travel in connection with the performance of his duties hereunder.
4. Base
Salary. For all services to be rendered by Executive pursuant to this Agreement, the Company agrees to pay Executive during the Employment
Period a base salary at an annual rate of $250,000 (the “Base Salary”). In addition, the Base Salary as then in effect
shall be subject to such further upward adjustments as shall be determined by the Board in its sole discretion. The Base Salary shall
be paid in periodic installments in accordance with the Company's regular payroll practices.
5. Bonuses.
During the Employment Period, the Executive shall be entitled to an annual bonus (the “Annual Bonus”) if the Company
meets or exceeds criteria adopted by the Compensation Committee of the Board (the “Compensation Committee”) for earning
bonuses which shall be adopted by the Compensation Committee annually. The Annual Bonus shall be paid by the Company to the Executive
promptly after determination that the relevant targets have been met, it being understood that the attainment of any financial targets
associated with any bonus shall not be determined until following the completion of the Company’s annual audit and public announcement
of such results and shall be paid promptly following the Company’s announcement of earnings. For each year that Executive is employed
by the Company, the Annual Bonus shall be 100% of Base Salary upon substantially meeting the budgeted revenues and the budgeted net income
or such other criteria established by the Company’s Compensation Committee, and shall be paid pro-rata for performance in excess
of such benchmarks, up to a maximum of 300% of Base Salary.
For the avoidance
of doubt, if Executive is employed immediately prior to the expiration of the term of this Agreement, he shall be entitled to the Annual
Bonus for such last year on a pro-rata basis through the last date of employment, even if he is not employed by the Company on the date
the Annual Bonus is paid for such last year.
In addition to the
foregoing, additional bonuses may be awarded by the Compensation Committee. Any such bonus shall be paid by the Company to the Executive
promptly after determination that if any targets relate to fiscal period performance having been met, it being understood that the attainment
of any financial targets associated with any bonus shall not be determined until following the completion of the Company’s annual
audit and public announcement of such results and shall be paid to Executive promptly following the Company’s announcement of earnings.
In the event that the Compensation Committee is unable to act or if there shall be no such Compensation Committee, then all references
herein to the Compensation Committee (except in the proviso to this sentence) shall be deemed to be references to the Board.
Further, Executive
shall be entitled to a Signing Bonus in the amount of $50,000, which shall be payable on the Effective Date.
Additionally, Executive
shall be entitled to an annual bonus of $50,000 per annum payable on each of January 31, 2024, January 31, 2025 and January 31, 2026.
All bonus or other
incentive-based or equity-based compensation provided to the Executive shall be subject to the Company’s Clawback Policy for Restatements,
which is appended hereto as Annex A.
6. Equity
Awards. The Company shall grant to Executive such equity awards as it deems appropriate, which determination shall be made from determined
from time to time by the Board.
7. Expenses.
Executive shall be entitled to prompt reimbursement by the Company for all reasonable and necessary travel, entertainment, and other expenses
incurred by Executive while employed (in accordance with the policies and procedures established by the Company for its executive officers)
in the performance of his duties and responsibilities under this Agreement; provided, that Executive shall properly account for such expenses
in accordance with Company policies and procedures. Notwithstanding anything herein or in the Company’s policies and procedures
to the contrary, Executive shall be reimbursed for all travel expenses and shall be entitled to travel and lodging not less than business
class.
8. Other
Benefits.
(a) Benefit
Plans. During the term of this Agreement, the Executive shall be eligible to participate in incentive, stock purchase, savings, retirement
(401(k)), and welfare benefit plans, including, without limitation, health, medical, dental, vision, life (including accidental death
and dismemberment) and disability insurance plans (collectively, “Benefit Plans”), in the same manner and at the same
levels as the Company makes such opportunities available to the Company's managerial or salaried executive employees.
(b) Vacation.
The Executive shall be entitled to four (4) weeks of vacation (in addition to the usual national holidays) during each contract year during
which he serves hereunder. Such vacation shall be taken at such time or times as will be mutually agreed between the Executive and the
Company. Vacation not taken during a calendar year may be carried forward, with a maximum accrual of eight (8) weeks.
(c) Vehicle
Expense Reimbursement. Executive will be entitled to a vehicle expense allowance in the amount of $1,500 per month.
(d) Severance
Compensation. Upon termination of Executive's employment (other than upon the expiration of the Term): (i) Executive shall be entitled
to receive any earned but unpaid Base Salary through the termination date; (ii) Executive shall be entitled to receive any and all reasonable
expenses paid or incurred by the Executive in connection with and related to the performance of his duties and responsibilities for the
Company during the period ending on the termination date, and (iii) Executive shall be entitled to receive any accrued but unused vacation
time through the termination date. Further, unless the Executive's employment is terminated as a result of his death or Disability or
for Cause or Executive terminates his employment without Good Reason, then upon the termination of Executive's employment, the Company
shall pay to Executive a severance payment as follows: the Company shall pay Executive (a) an amount equal to six (6) months of Executive's
Base Salary (as in effect immediately prior to the termination date), and (b); and a prorated Bonus amount equal to the estimated Annual
Bonus generated during the fraction of the year that the Executive has been employed as of the termination date, payable in accordance
with standard bonus payment practices of the Company.
For purposes of this Agreement,
the following terms shall have the meanings set forth below:
“Cause”
shall mean (a) the willful and continued failure of the Executive to perform substantially his duties and responsibilities for the Company
(other than any such failure resulting from Executive’s death or Disability) after a written demand by the Executive Chairman on
behalf of the Board for substantial performance is delivered to the Executive by the Company, which specifically identifies the manner
in which the Board and/or the Executive Chairman believes that the Executive has not substantially performed his duties and responsibilities,
which willful and continued failure is not cured by the Executive within thirty (30) days of his receipt of such written demand; (b) the
conviction of, or plea of guilty or nolo contendere to, a felony, or (c) fraud, dishonesty or gross misconduct which is materially
and demonstratively injurious to the Company.
“Change
of Control” shall mean the occurrence of any one or more of the following: (i) the accumulation (if over time, in any consecutive
twelve (12) month period), whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50.1% or more of the shares of the outstanding
Common Stock of the Company, whether by merger, consolidation, sale or other transfer of shares of Common Stock (other than a merger or
consolidation where the stockholders of the Company prior to the merger or consolidation are the holders of a majority of the voting securities
of the entity that survives such merger or consolidation), or (ii) a sale of all or substantially all of the assets of the Company;
provided, however, that the following acquisitions shall not constitute a Change of Control for the purposes of this Agreement:
(A) any acquisitions of Common Stock or securities convertible, exercisable or exchangeable into Common Stock directly from the Company
or from any affiliate of the Company, (B) any acquisition of Common Stock or securities convertible, exercisable or exchangeable into
Common Stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company, or (C) any acquisitions of Common
Stock or securities convertible, exercisable or exchangeable into Common Stock directly from the Company by, or a merger, consolidation,
sale of assets or reorganization with, Ault & Company, Inc., or any of the Company’s other affiliates or related parties.
“Disability”
shall mean a physical or mental disability that prevents the performance by the Executive, with or without reasonable accommodation, of
his duties and responsibilities hereunder for a period of not less than an aggregate of three (3) months during any six (6) consecutive
months.
“Good Reason”
shall mean (1) the assignment, without the Executive’s consent, to the Executive of duties that are significantly different from,
and that result in a diminution of, the duties that he assumed on the Effective Date or the imposition of a requirement that Executive
report to any person other than the Board, the Executive Chairman or the Chief Executive Officer; (2) the assignment, without the Executive’s
consent, to the Executive of a title that is different from and subordinate to the title Chief Financial Officer of the Company and/or
functionally equivalent to a subordinate role at the Company, provided, however, for the absence of doubt following a Change of Control,
should the Executive cease to retain either the title or responsibilities assumed on the Effective Date, or Executive is required to serve
in a diminished capacity or lesser title in a division or unit of another entity (including the acquiring entity), such event shall constitute
Good Reason regardless of the title of Executive in such acquiring company, division or unit; (3) material breach by the Company of this
Agreement; and (4) the relocation of Executive’s regular office to a location that is more than fifty (50) miles from the Company’s
San Antonio or Las Vegas office.
9. Confidential
Information.
(a) Disclosure
of Confidential Information. The Executive recognizes, acknowledges and agrees that he has had and will continue to have access to
secret and confidential information regarding the Company, its subsidiaries and their respective businesses (“Confidential Information”),
including but not limited to, its products, methods, formulas, software code, patents, sources of supply, customer dealings, data, know-how,
trade secrets and business plans, provided Confidential Information shall not include information and know how that was known to Executive
prior to his employment hereunder, is in or does hereafter become part of the public domain, or becomes known to others through no fault
of the Executive. The Executive acknowledges that such Confidential Information is of great value to the Company, is the sole property
of the Company, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Company
herein, the Executive will not, at any time, during or after his employment hereunder, reveal, divulge or make known to any person, any
Confidential information acquired by the Executive during the course of his employment, which is treated as confidential by the Company,
and not otherwise in the public domain. The provisions of this Section 9 shall survive the termination of the Executive’s employment
hereunder.
(b) In
the event that the Executive’s employment with the Company terminates for any reason, the Executive shall deliver forthwith to the
Company any and all originals and copies, including those in electronic or digital formats, of Confidential Information; provided, however,
that Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs,
correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing his compensation or
relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax purposes, (iv) copies of plans,
programs and agreements relating to his employment, or termination thereof, with the Company, and (v) one copy of the Confidential Information
in his confidential files to monitor compliance with this Agreement.
10. Non-Competition
and Non-Solicitation. To the fullest extent permissible under applicable law, Executive agrees that both during the term of this Agreement
and for a period of two (2) years following termination of this Agreement, Executive shall not take any action to induce employees or
independent contractors of the Company to sever their relationship with the Company and accept an employment or an independent contractor
relationship with any other business.
(a) The
Executive agrees and acknowledges that the Confidential Information that the Executive has already received and will receive is valuable
to the Company and that its protection and maintenance constitutes a legitimate business interest of the Company, to be protected by the
non-competition restrictions set forth herein. The Executive agrees and acknowledges that the non-competition restrictions set forth herein
are reasonable and necessary and do not impose undue hardship or burdens on the Executive. The Executive also acknowledges that the products
and services developed or provided by the Company, its affiliates and/or its clients or customers are or are intended to be sold, provided,
licensed and/or distributed to customers and clients primarily in and throughout the United States (the “Territory”)
(to the extent the Company comes to operate, either directly or through the engagement of a subsidiary, distributor or joint or co-venturer,
or sell a significant amount of its products and services to customers located, in areas other than the United States during the term
of the Employment Period, the definition of Territory shall be automatically expanded to cover such other areas), and that the Territory,
scope of prohibited competition, and time duration set forth in the non-competition restrictions set forth below are reasonable and necessary
to maintain the value of the Confidential Information of, and to protect the goodwill and other legitimate business interests of, the
Company, its affiliates and/or its clients or customers. The provisions of this Section 10 shall survive the termination of the Executive’s
employment hereunder.
(b) The
Executive hereby agrees and covenants that he shall not, during the Employment Period, without the prior written consent of the Company,
directly or indirectly, in any capacity whatsoever, including, without limitation, as an employee, employer, consultant, principal, partner,
shareholder, officer, director or any other individual or representative capacity (other than (i) as a holder of less than five percent
(5%) of the outstanding securities of a Company whose shares are traded on any national securities exchange or (ii) as a limited partner,
passive minority interest holder in a venture capital fund, private equity fund or similar investment entity which holds or may hold an
equity or equity-linked security position in portfolio companies that are directly competitive with the Company’s products or services;
provided however, that the Executive shall be precluded from serving as an operating partner, general partner, manager or governing board
designee with respect to such portfolio companies), or whether on the Executive's own behalf or on behalf of any other person or entity
or otherwise howsoever, during the Employment Period and thereafter to the extent described below, within the Territory:
(1) Engage,
own, manage, operate, control, be employed by, consult for, participate in, or be connected in any manner with the ownership, management,
operation or control of any business in direct competition with the business of the Company;
(2) Recruit,
solicit or hire, or attempt to recruit, solicit or hire, any employee, or independent contractor of the Company to leave the employment
(or independent contractor relationship) thereof, whether or not any such employee or independent contractor is party to an employment
agreement, for the purpose of directly competing with the business of the Company;
(3) Attempt
in any manner to solicit or accept from any customer of the Company, with whom Executive had significant contact during Executive’s
employment by the Company (whether under this Agreement or otherwise), business of the kind or competitive with the business done by the
Company with such customer or to persuade or attempt to persuade any such customer to cease to do business or to reduce the amount of
business which such customer has customarily done or might do with the Company, or if any such customer elects to move its business to
a person other than the Company, provide any services of the kind or competitive with the business of the Company for such customer, or
have any discussions regarding any such service with such customer, on behalf of such other person; or
(4) Interfere
with any relationship, contractual or otherwise, between the Company and any other party, including, without limitation, any supplier,
distributor, co-venturer or joint venturer of the Company, for the purpose of soliciting such other party to discontinue or reduce its
business with the Company.
For purposes hereof, a business
shall not be deemed to be in competition with the business of the Company, nor shall any products or services be deemed to compete with
those of the Company, unless the Company presently produces, sells or distributes or, has, during the Employment Period, plans to produce,
sell or distribute, such products or services.
With respect to the activities
described in Paragraphs (1), (2), (3) and (4) above, the restrictions of this Section 10(b) shall continue during the Employment Period
following the termination of this Agreement or of the Executive’s employment with the Company (including upon expiration of this
Agreement), whichever occurs later; provided, however that, in the event this Agreement or Executive’s employment is terminated
by Executive for Good Reason or is terminated by Company without Cause, then the restrictions contained in Section 10(b) shall continue
during the Employment Period, and not beyond.
11. Section
409A.
The provisions
of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a manner consistent
with the requirements for avoiding taxes or penalties under Section 409A. The Company and Executive agree to work together in good faith
to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition
of any additional tax or income recognition prior to actual payment to Executive under Section 409A.
To the extent
that Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (a) the right
to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible
for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related
to the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following
the taxable year in which you incurred the expense.
A termination
of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts
or benefits upon or following a termination of employment unless such termination constitutes a “Separation from Service”
within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,”
“termination of employment” or like terms shall mean Separation from Service.
Each installment
payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation
Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule set forth in Treasury
Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment is intended to be
a payment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq.,
to the maximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section
409A.
Notwithstanding
anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the
time of Executive’s termination, then only that portion of the severance and benefits payable to Executive pursuant to this Agreement,
if any, and any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together,
the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit
(as defined herein) may be made within the first six (6) months following Executive’s termination of employment in accordance with
the payment schedule applicable to each payment or benefit. Any portion of the Deferred Compensation Separation Benefits in excess of
the Section 409A Limit otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue
during such six (6) month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following
the date of Executive’s termination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable
in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive
dies following termination but prior to the six (6) month anniversary of Executive’s termination date, then any payments delayed
in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s
death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each
payment or benefit.
For purposes
of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to March 15 following
the year in which Executive’s termination occurs plus (y) the lesser of two (2) times: (i) Executive’s annualized compensation
based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year
of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance
issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which Executive’s employment is terminated.
12. Golden
Parachute Limitation. If any payment or benefit Executive would receive pursuant to a termination from the Company or otherwise (“Payment”)
would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject
to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before
any amounts of the Payment are paid to Executive, which of the following two amounts would maximize Executive's after-tax proceeds: (i)
payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment
so that Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”),
whichever amount results in Executive's receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. For purposes of determining whether to make a Full Payment or a Reduced
Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the
Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be
obtained from a deduction of such state and local taxes). If a Reduced Payment is made (i) the Payment shall be paid only to the extent
permitted under the Reduced Payment alternative, and Executive shall have no rights to any additional payments and/or benefits constituting
the Payment, and (ii) reduction in payments and/or benefits shall occur in the following order: reduction of cash payments, cancellation
of accelerated vesting of stock awards, and reduction of other benefits. In the event that acceleration of compensation from Executive's
equity awards is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant unless Executive
elects in writing a different order for cancellation.
The independent
registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the termination
shall make all determinations required to be made under this Section 12. If the independent registered public accounting firm so engaged
by the Company is serving as accountant or auditor for the individual, entity or group effecting the termination, the Company shall appoint
a different nationally recognized independent registered public accounting firm to make the determinations required hereunder. The Company
shall bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder.
The independent registered public accounting firm engaged to make the determinations hereunder shall provide its calculations, together
with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive's
right to a Payment is triggered (if requested at that time by the Company or Executive) or at such other time as requested by the Company.
If the independent registered public accounting firm determines that no Excise Tax is payable with respect to a Payment, either before
or after the application of the Reduced Amount, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive
that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall
be final, binding and conclusive upon the Company and Executive.
(a) The
Executive acknowledges that the services to be rendered by him under the provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services. Furthermore, the parties acknowledge that monetary damages
alone would not be an adequate remedy for any breach by the Executive of Section 9 or Section 10 of this Agreement. Accordingly, the Executive
agrees that any breach or threatened breach by him of Section 9 or Section 10 of this Agreement shall entitle the Company, in addition
to all other legal remedies available to it, to apply to any court of competent jurisdiction to seek to enjoin such breach or threatened
breach. The parties understand and intend that each restriction agreed to by the Executive hereinabove shall be construed as separable
and divisible from every other restriction, that the unenforceability of any restriction shall not limit the enforceability, in whole
or in part, of any other restriction, and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances
warrant. In the event that any restriction in this Agreement is more restrictive than permitted by law in the jurisdiction in which the
Company seeks enforcement thereof, such restriction shall be limited to the extent permitted by law. The remedy of injunctive relief herein
set forth shall be in addition to, and not in lieu of, any other rights or remedies that the Company may have at law or in equity.
(b) Neither
the Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express written consent
of the other; provided, however, that the Company shall have the right to delegate its obligation of payment of all sums
due to the Executive hereunder, provided that such delegation shall not relieve the Company of any of its obligations hereunder.
(c) During
the term of this Agreement, the Company shall indemnify and hold harmless Executive and his heirs and representatives as provided under
the Company’s certificate of incorporation and bylaws.
(d) This
Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to the Executive’s
employment by the Company, supersedes all prior understandings and agreements, whether oral or written, between the Executive and the
Company, and shall not be amended, modified or changed except by an instrument in writing executed by the party to be charged (it being
understood that, pursuant to Section 6, relevant option agreements shall govern with respect to the subject matter thereof). The invalidity
or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of this Agreement. No waiver
by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same time or any prior or subsequent time.
(e) This
Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective successors,
heirs, beneficiaries and permitted assigns. The headings contained in this Agreement are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
(f) All
notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or
by reputable national overnight delivery service (e.g. Federal Express) for overnight delivery to the party at the address set forth in
the preamble to this Agreement, or to such other address as either party may hereafter give the other party notice of in accordance with
the provisions hereof. Notices shall be deemed given on the sooner of the date actually received or the third business day after deposited
in the mail or one business day after deposited with an overnight delivery service for overnight delivery.
(g) Choice
of Law, Jurisdiction and Venue. The corporate laws of the State of New York shall govern all issues concerning this Agreement. All
other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the New York, New York, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(h) This
Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one of the same instrument. The signatures of both parties need not appear on the same counterpart. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed
signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof. The parties hereto have executed this
Agreement as of the date set forth above.
(i) The
Executive represents and warrants to the Company that he has the full power and authority to enter into this Agreement and to perform
his obligations hereunder and that the execution and delivery of this Agreement and the performance of his obligations hereunder will
not conflict with any agreement to which Executive is a party. The Company represents and warrants to Executive that it has the full power
and authority to enter into this Agreement and to perform its obligations hereunder and that the execution and delivery of this Agreement
and the performance of its obligations hereunder will not conflict with any agreement to which the Company is a party.
[Signature page follows]
IN WITNESS
WHEREOF, the Executive and the Company have caused this Executive Employment Agreement to be executed as of the date first above written.
RISKON INTERNATIONAL, INC.
| By: |
/s/ Henry Nisser |
| Name: |
Henry Nisser |
| Title: |
President |
EXECUTIVE
| By: |
/s/ Kayson Pulsipher |
| Name: |
Kayson Pulsipher |
| Title: |
an Individual |
Annex A
RISKON INTERNATIONAL, INC.
DODD-FRANK CLAWBACK POLICY
The Board of Directors (the
“Board”) of RiskOn International, Inc. (the “Company”) has adopted this clawback policy (the “Policy”)
as a supplement to any other clawback policies in effect now or in the future at the Company to provide for the recovery of erroneously
awarded Incentive-Based Compensation from Executive Officers. This Policy shall be interpreted to comply with the clawback rules found
in 17 C.F.R. §240.10D and Listing Rule 5608(c) of the Nasdaq Stock Market (the “Exchange”), and, to the extent
this Policy is in any manner deemed inconsistent with such rules, this Policy shall be treated as retroactively amended to be compliant
with such rules.
1. Definitions. 17 C.F.R. §240.10D-1(d)
defines the terms “Executive Officer,” “Financial Reporting Measures,” “Incentive-Based
Compensation,” and “Received.” As used herein, these terms shall have the same meaning as in that regulation.
2. Application of the Policy. This Policy
shall only apply in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the
Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an
error in previously issued financial statements that is material to the previously issued financial statements, or that would result in
a material misstatement if the error were corrected in the current period or left uncorrected in the current period. In the event of such
an accounting restatement, the Company will recover reasonably promptly the Erroneously Awarded Compensation Received in accordance with
this Policy.
3. Recovery Period. The Incentive-Based
Compensation subject to clawback is the Incentive-Based Compensation Received by an Executive Officer (1) after beginning service as an
Executive Officer and (2) during the three completed fiscal years immediately preceding the date that the Company is required to prepare
an accounting restatement as described in section 2, provided that the person served as an Executive Officer at any time during the performance
period applicable to the Incentive-Based Compensation in question (whether or not such person is serving as an Executive Officer at the
time the Erroneously Awarded Compensation is required to be repaid to the Company). The date that the Company is required to prepare an
accounting restatement shall be determined pursuant to 17 C.F.R. §240.10D-1(b)(1)(ii).
(a) Notwithstanding the foregoing, the
Policy shall only apply if the Incentive-Based Compensation is Received (1) while the Company has a class of securities listed on the
Exchange and (2) on or after October 2, 2023.
(b) See 17 C.F.R. §240.10D-1(b)(1)(i)
for certain circumstances under which the Policy will apply to Incentive-Based Compensation Received during a transition period arising
due to a change in the Company’s fiscal year.
4. Erroneously Awarded Compensation. The
amount of Incentive-Based Compensation subject to recovery under this Policy with respect to each Executive Officer in connection with
an accounting restatement described in Section 2 (“Erroneously Awarded Compensation”) is the amount of Incentive-Based
Compensation Received that exceeds the amount of Incentive Based-Compensation that otherwise would have been Received had it been determined
based on the restated amounts and shall be computed without regard to any taxes paid. For Incentive-Based Compensation based on the Company’s
stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation
directly from the information in an accounting restatement: (1) the amount shall be based on a reasonable estimate of the effect of the
accounting restatement on the Company’s stock price or total shareholder return upon which the Incentive-Based Compensation was
Received; and (2) the Company must maintain documentation of the determination of that reasonable estimate and provide such documentation
to the Exchange.
5. Recovery of Erroneously Awarded Compensation.
The Company shall recover reasonably promptly any Erroneously Awarded Compensation except to the extent that the conditions of paragraphs
(a), (b), or (c) below apply. The Board shall determine the amount of Erroneously Awarded Compensation Received by each Executive Officer,
shall promptly notify each Executive Officer of such amount and demand repayment or return of such compensation based on a repayment schedule
determined by the Board in a manner that complies with this “reasonably promptly” requirement. Such determination shall be
consistent with any applicable legal guidance, by the Securities and Exchange Commission (the “SEC”), judicial opinion,
or otherwise. The determination of “reasonably promptly” may vary from case to case and the Board is authorized to adopt additional
rules to further describe what repayment schedules satisfy this requirement.
(a) Erroneously Awarded Compensation
need not be recovered if the direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered
and the Board has made a determination that recovery would be impracticable. Before concluding that it would be impracticable to recover
any amount of Erroneously Awarded Compensation based on expense of enforcement, the Company shall make a reasonable attempt to recover
such Erroneously Awarded Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Exchange.
(b) Erroneously Awarded Compensation
need not be recovered if recovery would violate home country law where that law was adopted prior to November 28, 2022. Before concluding
that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company
shall obtain an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation and shall
provide such opinion to the Exchange.
(c) Erroneously Awarded Compensation
need not be recovered if recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available
to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
6. Board Decisions. Decisions of the Board
with respect to this Policy shall be final, conclusive and binding on all Executive Officers subject to this Policy, unless determined
to be an abuse of discretion.
7. No Indemnification. Notwithstanding
anything to the contrary in any other policy of the Company or any agreement between the Company and an Executive Officer, no Executive
Officer shall be indemnified by the Company against the loss of any Erroneously Awarded Compensation or any claims related to the Company’s
enforcement of its rights under this Policy.
8. Agreement to Policy by Executive Officers.
The Board shall take reasonable steps to inform Executive Officers of this Policy and obtain their agreement to this Policy, which steps
may constitute the inclusion of this Policy as an attachment to any award that is accepted by the Executive Officer.
9. Other Recovery Rights. Any employment
agreement, equity award agreement, compensatory plan or any other agreement or arrangement with an Executive Officer shall be deemed to
include, as a condition to the grant of any benefit thereunder, an agreement by the Executive Officer to abide by the terms of this Policy.
Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available
to the Company under applicable law, regulation or rule or pursuant to the terms of any policy of the Company or any provision in any
employment agreement, equity award agreement, compensatory plan, agreement or other arrangement. Without limiting the generality of the
foregoing, (i) with respect to Executive Officers, if application of the provisions of any section of the Company’s stock incentive
plans, either currently in place or adopted in the future (the “Plan Clawback Provisions”) to any Executive Officer
provides that a greater amount of such compensation may be subject to clawback, the Board may, in its sole discretion, elect to apply
the Plan Clawback Provisions; and (ii) with respect to other persons employed by or providing services to the Company, this Policy does
not limit or supersede the provisions of any section of the Company’s stock incentive plans, either currently in place or adopted
in the future, and the Board may elect to apply the Plan Clawback Provisions in the Board’s sole discretion.
10. Disclosure. The Company shall file
all disclosures with respect to this Policy required by applicable SEC filings and rules.
11. Amendments. The Board may amend this
Policy from time to time in its discretion and shall amend this Policy as it deems necessary. Notwithstanding anything in this Section
11 to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking
into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal
securities laws, SEC rule or Exchange rule.
[end of policy]
EXHIBIT A
RISKON INTERNATIONAL, INC. DODD-FRANK CLAWBACK
POLICY
ACKNOWLEDGMENT FORM
By signing below, the undersigned acknowledges
and confirms that the undersigned has received and reviewed a copy of the RiskOn International, Inc. (the “Company”)
Dodd-Frank Clawback Policy (the “Policy”).
By signing this Acknowledgment Form, the undersigned
acknowledges and agrees that the undersigned is and will continue to be subject to the Policy and that the Policy will apply both during
and after the undersigned’s employment with the Company. Further, by signing below, the undersigned agrees to abide by the terms
of the Policy, including, without limitation, by returning any Erroneously Awarded Compensation (as defined in the Policy) to the Company
to the extent required by, and in a manner consistent with, the Policy.
Exhibit 99.1
RiskOn Announces Planned Transition of Executive Leadership
RiskOn Further Announces an Update on its Previously Announced Distribution
of its Holdings of White River Energy Corp Stock
LAS VEGAS--(BUSINESS
WIRE) – January 29, 2024 – RiskOn International, Inc. (Nasdaq:
ROI) (“RiskOn,” or the “Company”), today announced that Randy May, Chairman and Chief Executive
Officer, and Jay Puchir, Chief Financial Officer, submitted their resignations, which shall take effect at the close of business on Monday,
January 29, 2024. Todd Ault, Vice Chairman of the Company has been unanimously appointed by the Company’s Board of Directors as
Chairman and Chief Executive Officer, and Kayson Pulsipher has been unanimously appointed as Chief Financial Officer.
“I’d like to thank both Randy and
JP for their work with the Company not only during this transition period but throughout their tenure with the Company. I am thrilled
to be stepping into the role as the Company’s Chairman & CEO and am extremely optimistic about the future of the Company,”
stated Todd Ault, currently the Vice Chairman of RiskOn. “RiskOn is building an innovative Artificial Intelligence product and service
offering, along with its Metaverse Social gaming platform powered by Meetkai. My team and I are committed to continuing to execute on
our growth plans for the Company.”
Additionally, the Company has concluded that,
for regulatory reasons, it will be unable to effect the distribution of its shares of White River common stock (the “WTRV Shares”)
as contemplated by the press releases issued by the Company on each of September 11, 2022 and September 30, 2022 and described in greater
detail in the registration statement on Form S-1 (File No. 333-268707) filed by White River (the “Registration Statement”).
In an effort to attempt to fulfill its original intent to transfer shares (the “Distributable Shares”) to beneficial
and registered shareholders (the “Holders”) as of September 30, 2022, the intended record date for the distribution
described in the Registration statement, the Company will send each such Holder an agreement (the “Letter Agreement”)
whereby qualified Holders can (i) demonstrate to the Company’s satisfaction that he/she/it in fact was a beneficial holder of the
Company’s common or preferred stock as of September 30 2022 and (ii) affirm that such Holder is an “accredited investor”
as that term is defined in Rule 501 of the Securities Act of 1933, as amended (the “Securities Act”).
Jay Puchir, the Company’s departing CFO,
has agreed to transition to a limited scope officer role to help facilitate the validation and transfer of WTRV Shares. Any beneficial
holder who can provide evidence of share ownership as of September 30, 2022 and qualifies as an accredited investor is encouraged to contact
the Company at WTRV@Riskonint.com to request additional information about obtaining potential
WTRV Shares. All Distributable Shares will be “restricted securities” as such term is defined in Rule 144 of the Securities
Act.
About RiskOn International, Inc.
Founded in 2011, the
Company owns 100% of BitNile.com, Inc., including the BitNile.com metaverse platform (the “Platform”). The Platform,
which went live to the public on March 1, 2023, allows users to engage with a new social networking community and purchase both digital
and physical products while playing 3D immersive games. RiskOn recently formed GuyCare to open specialized men’s healthcare clinics.
In addition, the Company also owns approximately 66% of Wolf Energy Services Inc. (OTCQB: WOEN) indirectly and approximately 70% of White
River (OTCQB: WTRV) directly.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended These forward-looking statements generally include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,”
“projects,” “estimates,” “expects,” “intends,” “strategy,” “future,”
“opportunity,” “may,” “will,” “should,” “could,” “potential,”
or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based
on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they
are made, and RiskOn will not undertake any obligation to update any of these statements publicly in light of new information or future
events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. In
addition to risks relating to the acceptance of the Platform by individuals, competition with much larger companies operating metaverses
and RiskOn’s ability to raise capital, investors should review risk factors, that could affect RiskOn’s business and financial
results which are included in RiskOn’s filings with the U.S. Securities and Exchange Commission, including, but not limited to,
Forms 10-K, 10-Q and 8-K. All such filings are available at www.sec.gov and on the Company’s website at www.riskonint.com.
Contacts
ir@riskonint.com or 1-800-762-7293
Exhibit 99.2
TRANSFER AGREEMENT
This Transfer Agreement is
dated January 28, 2024 (this “Agreement”), and entered into by and among RiskOn International, Inc., a Nevada corporation
(“RiskOn”), Jay Puchir (the “RiskOn Representative”) and Brian McBride (the “Second Level
Reviewer”). RiskOn, the RiskOn Representative and the Second Level Reviewer are at times individually referred to as a “Party”
and collectively as the “Parties.”
WHEREAS, RiskOn is
the holder of 1,200 shares of Series A Convertible Preferred Stock (the “Series A Shares”) of White River Energy Corp.
(“White River”) with rights, preferences and limitations set forth in that certain Certificate of Designation of the
Series A, as amended (the “Certificate”);
WHEREAS, pursuant to
Section 3 of the Certificate, the Series A Shares are convertible into 42,253,521 shares of White River common stock plus any additional
shares of White River common stock necessary to round up fractional shares to the nearest whole share (the “Conversion Shares”);
WHEREAS, due to RiskOn’s
inability to obtain a non-objecting beneficial owners list as of September 30, 2022, RiskOn has been unable to effect a distribution of
the Conversion Shares as originally contemplated pursuant to White River’s registration statement on Form S-1 declared effective
by the Securities and Exchange Commission (the “SEC”) on September 29, 2023 (the “Distribution”);
WHEREAS, RiskOn desires
to locate and verify the beneficial and record owners of the RiskOn shares of common stock and Series A Convertible Redeemable Preferred
Stock (the “RiskOn Shares”) as of the close of business on September 30, 2022 who are entitled, as contemplated by
this Agreement, in lieu of the Distribution, to receive Conversion Shares in a number proportionate to their ownership of RiskOn Shares
on September 30, 2022 (each a “Shareholder” or a “Beneficial Owner”);
WHEREAS, RiskOn wishes
to engage Jay Puchir, departing Chief Financial Officer, to act as the RiskOn Representative, in cooperation with the Second Level Reviewer,
in transferring the Conversion Shares in accordance with the terms and conditions of the letter agreement attached hereto as Exhibit
A (the “Letter Agreement”), to the Beneficial Owners, the Conversion Shares and to perform the Services (as
defined below);
WHEREAS, RiskOn has
been advised by White River that it has agreed to amend and restate the Certificate to permit the actions contemplated by this Agreement
(the “Amended Certificate”), a copy of which is attached as Exhibit B.
NOW, THEREFORE, in
consideration of the promises and agreements of RiskOn and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties agree as follows:
ARTICLE 1
APPOINTMENT OF THE RISKON REPRESENTATIVE AND
THE DUTIES OF RISKON AND THE RISKON REPRESENTATIVE
Section 1.1 Appointment
of the RiskOn Representative. RiskOn hereby designates and appoints Jay Puchir, as the RiskOn Representative, per the employment
agreement attached hereto as Exhibit C (the “Employment Agreement”), to perform the services described
below in accordance with the term of this Agreement, and the RiskOn Representative accepts such appointment.
Section 1.2 Responsibilities
of RiskOn and the RiskOn Representative. RiskOn irrevocably agrees to use its commercially reasonable
efforts to assist the RiskOn Representative in locating the Beneficial Owners and entering into the Letter Agreement, which may not be
amended in any way other than dates and names of the Shareholders, and any other requisite agreement with any Shareholder, including,
without limitation, to:
(a) review
the documentation submitted by any Shareholder to establish beneficial ownership as of September 30, 2022, and, if deemed sufficient in
the exercise of its reasonable judgment, shall oversee the process of the conversion of the Series A Shares in accordance the provisions
of the Amended Certificate;
(b) deliver
executed conversion notices from any Shareholder to the Chief Financial Officer (or any other officer) of White River so that White River
can convert the Series A Shares into Conversion Shares and thereby enable RiskOn to transfer such Conversion Shares to the applicable
Shareholder(s);
(c) take
such other actions required by this Agreement including taking the actions required by RiskOn specified in Section 1.2(b) and (d).
(d) filing
a Current Report on Form 8-K (the “8-K”) and issuing a related press release in form and substance satisfactory to
RiskOn and filing such 8-K with the SEC within four days after the execution and delivery of this Agreement;
(e) obtain
a second level review and signature by the Second Level Reviewer of all executed Letter Agreements;
(f) if
the RiskOn Representative and the Second Level Reviewer disagree about the validity of the documentation provided by any individuals claiming
to be entitled to the Conversion Shares, then RiskOn will be prohibited from executing a Letter Agreement with that party or parties;
(g) use
its commercially reasonable efforts to locate the Beneficial Owners of RiskOn common stock (on an as-converted basis with respect to RiskOn
convertible preferred stock) as of September 30, 2022, and permitting the RiskOn Representative to write to or otherwise communicate with
all broker-dealers and banks through which any known shareholders may have held RiskOn common stock as of September 30, 2022; and
(h) deliver
such stock powers as the RiskOn Representative may require in connection with the delivery of Conversion Shares to Shareholders.
(i) enter
into Letter Agreements with the Shareholders;
(j) defend
any lawsuit instituted against it or the RiskOn Representative or Second Level Reviewer related to this Agreement or any other lawsuit
regarding the transfer of the Conversion Shares; and
(k) Retain
Brian McBride as the Second Level Reviewer, a current active full-time employee of RiskOn, through the end of the Termination Date (as
such term is hereinafter defined).
ARTICLE 2
CONVERSION OF THE SERIES A
Section 2.1 Conversion
of Series A.
(a) Upon
execution of this Agreement, RiskOn hereby grants to the RiskOn Representative the power and authority to execute and deliver to White
River the Conversion Notices (as defined in the Certificate) on behalf of RiskOn to convert the applicable number of Series A Shares into
Conversion Shares in accordance with this Agreement, the Amended Certificate and the Letter Agreements. Thereafter, RiskOn, in cooperation
with the RiskOn Representative, shall cause White River to instruct the RiskOn Representative to issue the Conversion Shares to applicable
Shareholders. Upon the execution and delivery of this Agreement, RiskOn shall execute and deliver to the RiskOn Representative a stock
power with respect to the Series A Shares duly executed by RiskOn (the “Stock Power”) necessary to permit the RiskOn
Representative to execute and deliver a Conversion Notice to allow for the conversion of the Series A Shares necessary to distribute Conversion
Shares to a Shareholder. The Certificate will govern the terms of any conversion and the calculation of amount of the Conversion Shares.
Fractional Conversion Shares shall be rounded up to the nearest whole share amount.
(b) RiskOn
shall provide the RiskOn Representative with a spreadsheet that calculates the amount of Conversion Shares that each Shareholder who complies
with the terms of this Agreement and the Letter Agreement is entitled to receive upon conversion of the Series A Shares. RiskOn shall
archive all executed agreements and the spreadsheet on a cloud-based repository such as Dropbox.
(c) In
the event the issuance of Conversion Shares to a Shareholder who holds or held RiskOn convertible preferred stock as of September 30,
2022 which contains a beneficial ownership limitation, the RiskOn Representative shall give effect to such beneficial ownership limitation,
and RiskOn and the RiskOn Representative shall cause White River to maintain a reserve for an amount of Conversion Shares which it cannot
issue due to the beneficial ownership limitation.
(d) Each
Party agrees to execute such further documents and to take such further action to give effect to the foregoing and the related transactions
contemplated by this Agreement.
ARTICLE 3
TERMINATION
Section 3.1 Termination.
This Agreement shall terminate six months after the date of this Agreement (the “Termination Date”). In the event that
any Series A Shares shall remain outstanding on the Termination Date, all such shares remaining shall be retained by RiskOn (except for
instances where litigation referred to above is ongoing or where the Series A Shares cannot be issued due to the beneficial ownership
limitation) and RiskOn may convert such Series A into Conversion Shares as it deems appropriate.
ARTICLE 4
PROVISIONS CONCERNING THE RISKON REPRESENTATIVE
Section 4.1 Indemnification.
RiskOn shall indemnify, defend and hold harmless the RiskOn Representative from and against any and all loss, liability, cost, damage
and expense, including, without limitation, reasonable attorneys’ fees and expenses or other professional fees and expenses which
the RiskOn Representative may suffer or incur by reason of any action, claim or proceeding brought against the RiskOn Representative,
arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates, unless such loss, liability,
cost, damage or expense shall have been finally adjudicated to have been directly caused by the willful misconduct or gross negligence
of the RiskOn Representative. The provisions of this Section 4.1 shall survive the resignation or removal of the RiskOn Representative
and the termination of this Agreement.
Section 4.2 Limitation
of Liability. The RiskOn Representative shall not be liable, directly or indirectly, for any (i) damages, losses or expenses
arising out of the services provided hereunder, other than damages, losses or expenses which have been finally adjudicated to have directly
resulted from the RiskOn Representative’s gross negligence or willful misconduct, or (ii) special, indirect or consequential damages
or losses of any kind whatsoever (including without limitation lost profits), even if the RiskOn Representative has been advised of the
possibility of such losses or damages and regardless of the form of action.
Section 4.3 Resignation
or Removal. The RiskOn Representative may resign by furnishing 20 days’ advance written notice of its resignation to the
other Parties. Such resignation shall be effective 20 days after the delivery of such notice or upon the earlier appointment of a successor.
If the other Parties have failed to appoint a successor RiskOn Representative prior to the expiration of 20 days following the delivery
of such notice of resignation, the RiskOn Representative may petition any court of competent jurisdiction for the appointment of a successor
RiskOn Representative or for other appropriate relief, and any such resulting appointment shall be binding upon RiskOn. In the event that
the other Parties cannot agree on a successor RiskOn Representative prior to the RiskOn Representative’s termination hereunder,
then beginning on the date of the RiskOn Representative’s termination and while such disagreement is continuing and until the earlier
to occur of the other Parties’ agreement on a successor RiskOn Representative or a court of competent jurisdiction’s appointment
a successor RiskOn Representative, RiskOn shall cause White River to act as the RiskOn Representative and perform the duties and obligations
of the RiskOn Representative in accordance with this Agreement. Any replacement RiskOn Representative shall require the approval of the
Chief Financial Officer of White River.
Section 4.4 Compensation.
The RiskOn Representative shall be entitled to compensation for his services contemplated as set forth in the Employment Agreement. The
fee agreed upon for the services rendered hereunder is intended as full compensation for the RiskOn Representative’s services as
contemplated by this Agreement.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Registration;
Securities Laws. RiskOn shall, and RiskOn and the RiskOn Representative shall cause White River to, comply with applicable United
States federal and state securities laws in connection with the delivery of the Conversion Shares. RiskOn shall deliver Conversion Shares
to any accredited investors, as defined by Rule 501 of the Securities Act, it determines were Beneficial Owners as of September 30, 2022
and for which it has a reasonable basis are accredited investors, provided that RiskOn’s Chief Executive Officer agrees with such
determination. Letter Agreements will only be executed with individuals who attest they are accredited investors. RiskOn shall cause White
River to not move forward with a S-1 registration statement for these shares and ensure that holders must comply with the mandatory Rule
144 holding period on the Conversion Shares, including the request for a legal opinion with respect to the sale, transfer or other disposition
of such shares.
Section 5.2 Pledged
Collateral. ROI shall be prohibited from pledging the White River Series A shares as collateral to the extent that it affects
the rights of any beneficial shareholder of RiskOn.
Section 5.3 Successors
and Assigns. This Agreement shall be binding on and inure to the benefit of the Parties and their respective successors and permitted
assigns. No other persons shall have any rights under this Agreement. No assignment of the interest of any of the Parties shall be binding
unless and until written notice of such assignment shall be delivered to the other Parties and shall require the prior written consent
of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed).
Section 5.4 Other
Representations and Warranties. RiskOn represents that it has not pledged the White River Series A shares as collateral for any
loans or similar transactions, and it has the full power and authority to implement this Agreement, and that no other approval or consent
is needed from Ault Alliance, Inc., Arena Investors, LP, and Walleye Capital LLC, or any affiliate of any of the foregoing is required
to implement the transactions contemplated by this Agreement.
Section 5.5 Notices
and Addresses. All notices, offers, acceptance and any other acts under this Agreement shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by Federal Express or similar overnight next business day delivery, or by email delivery
followed by overnight next business day delivery, as follows:
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If to RiskOn: |
RiskOn International, Inc. |
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11411 Southern Highlands Pkwy #240 |
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Las Vegas, NV 89141 |
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Attention: Milton C. Ault, Chief Executive Officer |
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Email: Todd@riskonint.com |
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With a Copy to: |
Henry Nisser, Esq. |
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100 Park Avenue, Suite 1658 |
| |
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New York, NY 10017 |
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Email: henry@riskonint.com |
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If to the RiskOn Representative: |
Jay Puchir |
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609 W Dickson St, Suite 102G |
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Fayetteville, AR 72701 |
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Email: jpuchir@white-river.com |
or to such other address as any of them, by notice
to the other may designate from time to time. Time shall be counted from the date of transmission.
Section 5.4 Governing
Law; Exclusive Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State
of New York without reference to principles of conflicts of laws. Each Party consents to the exclusive jurisdiction of any federal or
state court located in the State, City and County of New York in any civil action or legal proceeding arising hereunder. In the event
of litigation relating to this Agreement, if a court of competent jurisdiction determines in a final, non-appealable order that this
Agreement has been breached by a Party, then such Party will reimburse the other Parties for its costs and expenses (including, without
limitation, legal fees and expenses) incurred in connection with all such litigation.
Section 5.5 Entire
Agreement. This Agreement, together with the Amended Certificate, sets forth the entire agreement and understanding of RiskOn
related to the subject matter of this Agreement and the distribution of the Conversion Shares.
Section 5.6 Amendment.
This Agreement may be amended, modified, superseded, rescinded, or canceled only by a written instrument executed by RiskOn and the
RiskOn Representative.
Section 5.7 Waivers.
The failure of any party to this Agreement at any time or times to require performance of any provision under this Agreement shall in
no manner affect the right at a later time to enforce the same performance. A waiver by any party to this Agreement of any such condition
or breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall neither
be construed as a further or continuing waiver of any such condition or breach nor a waiver of any other condition or breach of any other
term, covenant, representation, or warranty contained in this Agreement.
Section 5.8 Headings.
Section headings of this Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify
any of the terms or provisions of this Agreement.
Section 5.9 Counterparts.
This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, and such counterparts
shall together constitute one and the same instrument. Counterparts delivered by facsimile, e-mail or other electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[The remainder of this page left intentionally
blank]
IN WITNESS WHEREOF,
this Agreement has been duly executed as of the date first written above.
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RISKON INTERNATIONAL, INC.
a Nevada corporation
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By: |
/s/ Randy May |
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Name: |
Randy May |
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Title: |
CEO |
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By: |
/s/ Jay Puchir |
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Name: |
Jay Puchir |
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Title: |
Vice President, RiskOn Representative |
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By: |
/s/ Brian McBride |
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Name: |
Brian McBride |
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Title: |
Second Level Reviewer |
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