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): August 28, 2023
COURTSIDE GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | | 333-269028 | | 35-2503373 |
(State or other jurisdiction
of incorporation) | | (Commission File Number) | | (I.R.S. Employer
Identification No.) |
335 N. Maple Drive Suite 127
Beverly Hills, CA 90210
(Address of principal executive offices) (Zip Code)
(310) 858-0888
(Registrant’s telephone number, including area code)
n/a
(Former name or former address, if changed since last report.)
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 (see General Instruction A.2. below):
| ☐ | 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 |
| | | | | |
Securities registered pursuant to Section 12(g) of the Act: None
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 1.01 Entry Into a Material Definitive Agreement.
The information set forth in Item 5.02 below is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 5.02 below is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement
On August 28, 2023 and effective as of January 1, 2023 (the “Effective Date”), Courtside Group, Inc. (the “Company”) entered into a new employment agreement with Kit Gray, the Company’s current President (the “Employment Agreement”). The term of the Employment Agreement is for two years from the Effective Date at an annual salary of $375,000. Mr. Gray is eligible to earn an annual fiscal year performance bonus for each whole or partial fiscal year of his employment period with the Company in accordance with the Company’s ABP (as defined below) applicable to the Company’s executive officers and other employees. Mr. Gray’s “target” performance bonus shall be 100% of his average annualized base salary during the fiscal year for which the performance bonus is earned. Pursuant to the Employment Agreement, Mr. Gray was granted: (i) 325,000 restricted stock units of the Company (the “Company RSUs”), and (ii) 150,000 restricted stock units of LiveOne, Inc. (“LiveOne”), the Company’s parent (the “LiveOne RSUs” and together with the Company RSUs, the “RSUs”). The Company RSUs were granted pursuant to the Company’s 2022 Equity Incentive Plan (the “Company EIP”), and the LiveOne RSUs were granted pursuant to LiveOne’s 2016 Equity Incentive Plan, as amended. 50% of the RSUs shall vest on the one year anniversary of the Effective Date (the “Initial Vesting Date”), and the remaining 50% of the RSUs shall vest in four equal increments every three months from the Initial Vesting Date (each a “Subsequent Vesting Date” and collectively with the Initial Vesting Date, the “Vesting Dates”), subject to Mr. Gray being continuously employed by and being in good standing with the Company and the Employment Agreement being in effect, in each case through each applicable Vesting Date (except as provided below). Each vested Company RSU shall be settled by delivery to Mr. Gray of one share of the Company’s common stock promptly following the applicable Vesting Date (except as provided below) (a “PC1 Settlement Date”). Each vested LiveOne RSU shall be settled by delivery to Mr. Gray of one share of LiveOne’s common stock promptly following the applicable Vesting Date. If at the time of a PC1 Settlement Date, the Company has not completed the Going Public Transaction (as defined below), the Company agreed to cause LiveOne to issue to Mr. Gray, in lieu of the Company’s common stock that would be issued upon the settlement of any Company RSUs that would vest on such PC1 Settlement Date, such number of shares of LiveOne’s common stock for each vested Company RSU as would equal to a 3.5 to 3.25 ratio. After any settlement of any vested Company RSUs, the remaining unvested Company RSUs shall be settled in the Company’s common stock, subject to the terms of the Employment Agreement. “Going Public Transaction” means the earlier of (i) the date on which the Company consummates the direct listing of its common stock on a national stock exchange and (ii) the date of completion of any other transaction by the Company as a result of which the Company’s common stock is listed on a national stock exchange.
In the event a PC1 Change of Control (as defined in the Employment Agreement), if Mr. Gray remains employed by the Company through the date of such PC1 Change of Control, 50% of then unvested Company RSUs shall vest in full effective immediately prior to such event. In the event a LVO Change of Control (as defined in the Employment Agreement), if Mr. Gray remains employed by the Company through the date of such LVO Change of Control, 50% of then unvested LiveOne RSUs shall vest in full effective immediately prior to such event. The RSUs grants will be evidenced by a standard form of the Company’s or LiveOne’s restricted stock units award agreement, as applicable.
If Mr. Gray’s employment is terminated by the Company without “Cause” or by Mr. Gray for “Good Reason” (each as defined in the Employment Agreement, subject to the Company’s right to cure), he will be entitled to termination benefits, pursuant to which the Company will be obligated to (i) pay Mr. Gray certain accrued obligations and to continue to pay Mr. Gray his base salary for a period that is the lesser of (x) 6 months from the effective termination date and (y) the remaining period of the term of his Employment Agreement, and (ii) accelerate the vesting of 100% of any unvested RSUs and any other equity awards granted by the Company to Mr. Gray. The foregoing termination benefits are subject to Mr. Gray’s delivery to the Company of an executed release of claims against it and its affiliates and continued compliance with his confidentiality agreement with the Company.
The Employment Agreement contains covenants for the benefit of the Company relating to non-interference with the Company’s business after termination of employment and protection of the Company’s confidential information, certain customary representations and warranties and standard Company indemnification obligations.
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated herein by reference.
The shares of the Company’s common stock and LiveOne’s common stock underlying the RSUs may be issued, if any, in a private placement transaction that will rely upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder, or pursuant to the Company’s Registration Statement on Form S-8, if and when such is filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”), or LiveOne’s Registration Statement on Form S-8, as applicable.
Annual Bonus Plan
On August 23, 2023, the Company’s board of directors approved the Company’s 2023 Annual Bonus Plan (the “ABP”), in the form and on the terms as previously reported in the Company’s Current Report on Form 8-K, filed with the SEC on August 15, 2023.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| † | Indicates a management contract or compensatory plan. |
SIGNATURES
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.
| | COURTSIDE GROUP, INC. |
| | |
| Dated: September 1, 2023 | By: | /s/ Aaron Sullivan |
| | Name: | Aaron Sullivan |
| | Title: | Interim Chief Financial Officer |
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