Certain Relationships and Related Transactions
The Company’s policy requiring that independent directors approve any related party transaction is not evidenced by writing but has been the Company’s consistent practice. Each director and executive officer must promptly notify the Chief Executive Officer and the Audit Committee of the Board of any matter that he or she believes may raise doubt regarding his or her ability to act objectively and in the Company’s best interest. In determining whether to approve, ratify, disapprove or reject such related party transaction, the Audit Committee may take into account, among other factors it deems appropriate, whether such related party transaction is entered into on terms no less favorable to the Company than terms generally available to an unaffiliated third-party under the same or similar circumstances. These policies and procedures are evidenced in writing in the Audit Committee charter and the Company’s Code of Business Conduct and Ethics.
On November 4, 2020, Sanford Enterprises, LLC (“Sanford Enterprises”), a wholly-owned entity of Mr. Glenn Sanford, our Chief Executive Officer, a Director and Chairman of the Board of the Company, purchased all of the membership equity interests in Success Enterprises LLC (“Success”) from Success Partners Holding Co, a third party media vendor to us, for $8.0 million in cash. On December 4, 2020, we completed the acquisition of Success and its related media properties, including SUCCESS® print magazine, SUCCESS.com, SUCCESS® newsletters, podcasts, digital training courses and affiliated social media accounts across platforms (the “Success Acquisition”) from Sanford Enterprises for cash consideration of $8.0 million using cash on hand. After being informed of all material facts related to Mr. Sanford’s interest in the transaction, the Success Acquisition was approved by the Board (with Mr. Sanford recused) on December 4, 2020.
As of fiscal year ended 2020, except for the Success Acquisition, in addition to revenue sharing payments made to our named executive officers as disclosed in “Executive Compensation” and to certain of our directors as disclosed in “Director Compensation”, there were no other Related Party Transactions.
None of our current or former directors or executive officers is indebted to us, nor are any of these individuals indebted to another entity which indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by us.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who owned more than 10% of the Company’s common stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership of common stock and other securities of the Company on Forms 3, 4 and 5 with the SEC. Reporting Persons were required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they filed.
Based solely on review of reports received by the Company or written representations from the Reporting Persons, the Company believes that with respect to the fiscal year ended December 31, 2020, all Reporting Persons complied with all applicable Section 16(a) filings, except for the following, which were inadvertently omitted due to administrative oversight: (i) Mr. Miles filed two late Forms 4: one on December 21, 2020 to report the acquisition of non-derivative securities on December 16, 2020, the disposition of shares of common stock on December 16, 2020 and the acquisition of derivative securities on December 16, 2020, and one on November 27, 2020 to report the acquisition of non-derivative and derivative securities on November 24, 2020; (ii) Mr. Cheng filed a late Form 3 on November 20, 2020 to report his appointment as Controller of the Company on October 15, 2020; (iii) Mr. Whiteside filed a late Form 4 on November 19, 2020 to report the acquisition of derivative securities November 1, 2020; (iv) Mr. Jacklin filed three late Forms 4: one on November 18, 2020 to report the disposition of shares of common stock on September 25, 2020 and September 28, 2020, one on February 6, 2020 to report the acquisition of non-derivative securities on January 31, 2020, and one on January 16, 2020 to report the acquisition of non-derivative securities on December 31, 2019; (v) Mr. Frederick filed four late Forms 4: one on August 31, 2020 to report the disposition of shares of common stock on August 12, 2020 and August 13, 2020, one on July 15, 2020 to report the acquisition of non-derivative securities on January 31, 2017, May 31, 2017, June 30, 2017, August 31, 2017, November 30, 2017, January 31, 2018, February 28, 2018, April 30, 2018, May 31, 2018, September 30, 2018, October 31, 2018, January 31, 2019, March 31, 2019, April 30, 2019, June 30, 2019, October 31, 2019, November 30, 2019, March 1, 2020, April 1, 2020, April 30, 2020, May 1, 2020, and July 12, 2020, one on February