SCHEDULE: Marchex Founder Shifts to Schedule 13D Filing

Russell C. Horowitz, Marchex founder and Chairman, transitions to a Schedule 13D filing, reporting beneficial ownership of 18.5% of the company's shares following a recent acquisition.

Summary

• Russell C. Horowitz, founder and Chairman of Marchex, Inc., has filed a Schedule 13D, indicating a change in his reporting status from Schedule 13G.
• This transition is due to acquiring beneficial ownership of more than two percent of Marchex's shares, bringing his total to 8,813,485 shares, representing approximately 18.5% of the outstanding Class B Common Stock.
• The increase in ownership stems from a transaction on July 1, 2026, where Horowitz acquired $4.9 million in convertible promissory notes from Marchex.
• These notes are initially convertible into 2,702,703 shares at $1.80 per share.
• Additional shares may be issued to Horowitz over the next two years based on Archenia, Inc.'s revenue, Adjusted EBITDA, and integration targets, following Marchex's acquisition of Archenia's capital stock.
• Horowitz holds sole voting and dispositive power over these shares through MARRCH Investments, LLC.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral to slightly positive, reflecting a founder's continued commitment and strategic involvement, but also introducing potential dilution and increased insider influence.

Positives

• Founder and Chairman Russell C. Horowitz demonstrates continued significant investment and belief in Marchex by increasing his beneficial ownership.
• The acquisition of Archenia, Inc. is expected to drive future growth, with potential for additional share issuance to Horowitz tied to performance milestones.
• Horowitz's sole voting and dispositive power ensures decisive management of his substantial stake.

Negatives

• The shift from a 13G to a 13D filing suggests a more active or significant stake, which could imply a greater focus on influencing company direction, potentially creating uncertainty for other investors if intentions are not fully aligned with broader shareholder interests.
• The convertible notes and potential future share issuances represent dilution to existing shareholders if fully converted or issued.

Risks

• Potential for future share dilution through the conversion of promissory notes and performance-based share issuances.
• The integration and performance targets for Archenia, Inc. present execution risks that could impact future share issuances to Horowitz.
• Horowitz's stated intention to potentially acquire additional securities and dispose of existing ones indicates potential for market activity that could influence share price.

Future Outlook

The filing indicates that Russell C. Horowitz may, from time to time, acquire additional securities of Marchex or dispose of all or a portion of his existing holdings. Future share issuances to Horowitz are contingent on Archenia, Inc.'s revenue, Adjusted EBITDA, and integration/customer retention targets over the next two years.

Management Comments

• Russell C. Horowitz is a founder of Marchex and currently serves as its Chairman.
• The Reporting Person may in the future take actions with respect to his investment in Marchex as it deems appropriate, including changing his current intentions.
• From time to time, the Reporting Person may acquire beneficial ownership of additional securities of Marchex, by purchase or otherwise, including additional purchases of shares in the open-market or privately negotiated transactions or otherwise.
• In addition, from time to time, the Reporting Person may dispose of all or a portion of the securities of Marchex that he beneficially owns.

Industry Context

StockSavvy.ai notes that the transition to a Schedule 13D filing by a founder and Chairman often signals increased strategic involvement or a significant shift in beneficial ownership, which is a common occurrence in the technology and marketing services sectors as companies pursue growth through acquisitions and performance-based incentives.

Comparison to Industry Standards

• In the technology and marketing services sector, it is not uncommon for founders and key executives to hold significant stakes and transition reporting as their ownership levels change due to strategic transactions.
• The structure of performance-based earn-outs, such as those tied to Archenia's revenue and EBITDA, is a standard practice in M&A to align seller incentives with post-acquisition performance.
• The conversion price of $1.80 per share for the convertible notes is a key metric. Industry benchmarks for such conversions vary widely based on company stage, market conditions, and the strategic importance of the acquisition.

Related Party Transactions

• Marchex acquired capital stock of Archenia, Inc. from its sellers, and in connection with this, issued $4.9 million in convertible promissory notes to Russell C. Horowitz, who is the Chairman of Marchex and a founder.
• Additional shares may be issued to Russell C. Horowitz based on Archenia's performance metrics.

Stakeholder Impact

• Shareholders may experience dilution if the convertible notes are fully converted and additional performance-based shares are issued.
• The increased beneficial ownership by the founder and Chairman could lead to greater influence on corporate strategy and decision-making.

Next Steps

• Marchex will monitor Archenia, Inc.'s revenue, Adjusted EBITDA, and integration/customer retention targets for the first and second 12-month periods following July 1, 2026.
• Russell C. Horowitz may acquire additional Marchex securities or dispose of existing holdings.
• Marchex may issue additional shares to Russell C. Horowitz based on Archenia's performance milestones.

Key Dates

Recommendation

The filing indicates a significant increase in beneficial ownership by a key insider, which is generally a positive signal of confidence. However, the details of convertible notes and potential future share issuances introduce a degree of future dilution. The lack of specific financial performance updates or strategic shifts beyond the Archenia acquisition warrants a 'hold' recommendation pending further clarity on Marchex's operational performance and the successful integration of Archenia.

Keywords

Schedule 13D, Marchex, Russell C. Horowitz, Beneficial Ownership, Convertible Promissory Notes, Stock Purchase Agreement, Archenia, Inc., Class B Common Stock, Chairman, Insider Trading, SEC Filing