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| Filed by the Registrant | ☒ | |||||||
| Filed by a Party other than the Registrant | ☐ | ||||||||
| ☐ | Preliminary Proxy Statement | |||||||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11. | |||||||
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TO THE STOCKHOLDERS:
AUGUST 18, 2023
The boardNotice of directorsSpecial Meeting of Stockholders.
All A complete list of registered stockholders entitled to vote at the Special Meeting will be available for inspection at our offices during regular business hours for the 10 calendar days prior to the Special Meeting and during the Special Meeting.
By Orderduring the meeting.
Loretta P. Mayer, Chair of the Board we thank you for your continued support and interest in SenesTech, Inc.
Important Notice Regarding the AvailabilityJuly 31, 2023
A-1 | |||||
These proxy solicitation materials were mailed on, a Delaware corporation.
Any proxy given pursuant
Stockholders
Thismore information.
Non-Votes; Results
Broker non-votes can occur as to shares held in street name. Under the current rules that govern brokers and other nominee holders of record, if a street-name holder does not give instructions to its broker or other nominee, such broker or other nominee will be able to vote such shares only with respect to proposals for which the broker or other nominee has discretionary voting authority.authority, i.e., “routine” matters under The Nasdaq Stock Market LLC, or Nasdaq, rules. A “broker non-vote” occurs when a broker or other nominee submits a proxy for the AnnualSpecial Meeting but does not vote on a particular proposal because such broker or other nominee either does not exercise its discretionary voting authority or does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner.
The approval
all matters.
| Proposal | Voting Options | Vote Required to Adopt the Proposal | Effect of Abstentions | Effect of Broker Non-Votes | ||||||||||||||||||||||
1.Reverse Stock Split Proposal | For, against or abstain | To be approved by stockholders, this proposal must receive the affirmative “FOR” vote of a majority of the votes cast by holders of the outstanding shares of Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal. | No effect | Brokers have discretion to vote | ||||||||||||||||||||||
2.Adjournment Proposal | For, against or abstain | To be approved by stockholders, this proposal must receive the affirmative “FOR” vote of the majority of the voting power of the outstanding shares of Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal. | Against | Brokers have discretion to vote | ||||||||||||||||||||||
FOR“FOR” the director nominees named inReverse Stock Split Proposal No. 1 of this proxy statement; and
FOR Proposal No. 2, to ratify “FOR” the appointment of M&K CPAS, PLLC as our independent registered public accounting firm.
Adjournment Proposal.
Stockholder
such date will be considered untimely. Submitting a stockholder proposal does not guarantee that it will be included in our proxy statement and form of proxy.
21, 2024.
We strongly encourage any stockholder interested in submitting a proposal to contact our Secretary in advance of these deadlines to discuss any proposal he or she is considering, and stockholders may want to consult knowledgeable counsel with regard to the detailed requirements of applicable securities laws.
THE REVERSE STOCK SPLIT PROPOSAL
The board of directors is divided into three classes. Except for the remainder of the initial terms for the Class II and Class III directors elected at the 2016 annual meeting of stockholders, which initial terms are currently in progress, each director will serve a three-year term. A director serves in office until her or his respective successor is duly elected and qualified, unless the director is removed, resigns or, by reason of death or other cause, is unable to serve in the capacity of director. We expect that any additional directorships resulting from an increase in the numbermarket price of directorsour Common Stock, which could lead to increased interest in our Common Stock and possibly promote greater liquidity for our stockholders. However, the Reverse Stock Split will be distributed among the three classes so that, as nearly as possible, each class will consist of one third ofalso reduce the total number of directors.
Set forth belowoutstanding shares of Common Stock, which may lead to reduced trading and a smaller number of market makers for our Common Stock, particularly if the price per share of our Common Stock does not increase as a result of the Reverse Stock Split.
Two directors are to be elected at the Annual Meetingcompany, except to the terms set forth below. The boardextent that the Reverse Stock Split would result in an adjustment to a stockholder’s
Unless otherwise instructed, the proxy holders will vote the proxies received by themfor the election of Julia Williams and Marc Dumontfractional shares). Common Stock issued pursuant to the boardReverse Stock Split will remain fully paid and nonassessable, and the par value per share of directors. Each of these individuals has indicated that she or heCommon Stock will serve if elected. We do not anticipate that any of these nominees will be unable or unwilling to stand for election, but if that occurs, all proxies received may be voted by the proxy holders for another person nominated by the board of directors. remain $0.001.
If a quorum is present, the nominees for election to the board of directors receiving the greatest number of votes cast “for” the election of the directors by the shares present, in person or by proxy, will be elected to the board of directors.
The names and certain information as of the record date, aboutwe had 2,964,485 shares of Common Stock outstanding. For purposes of illustration, if the nomineesReverse Stock Split is effected at a ratio of 1-for-2 or 1-for-12, the number of issued and each director continuing in officeoutstanding shares of Common Stock after the Annual MeetingReverse Stock Split would be approximately 1,482,243 shares and 247,040 shares, respectively.
 | | | | | ||||
| Name of Director Nominees | Age | Position | Director Since | Term Expires | ||||
| Marc Dumont | 73 | Director | 2016 | 2017 (Class I) | ||||
| Julia Williams, M.D. | 57 | Director | 2011 | 2017 (Class I) |
| | | | | ||||
| Name of Continuing Directors | Age | Position | Director Since | Term Expires | ||||
| Cheryl A. Dyer, Ph.D. | 65 | Director; President and Chief Research Officer | 2004 | 2018 (Class II) | ||||
| Loretta P. Mayer, Ph.D. | 67 | Chair of the Board, Chief Executive Officer and Chief Scientific Officer | 2004 | 2019 (Class III) | ||||
| Bob Ramsey | 71 | Director | 2016 | 2018 (Class II) | ||||
| Matthew Szot | 42 | Director | 2015 | 2019 (Class III) | ||||
| Grover Wickersham | 68 | Vice-Chair of the Board | 2015 | 2019 (Class III) |
Marc Dumontwas electedcurrently authorized to our boardissue a maximum of directors in January 2016. Mr. Dumont is owner, chairman and chief executive officer of Chateau de Messey Wineries, Meursault, France, a position he has held since March 1995. Mr. Dumont served as the president of PSA International SA (a PSA Peugeot Citroen Group company) from January 1981 to March 1995. He is an international financial consultant and advisor for clients in Europe and Asia, as well as the United States. He has served as the chairman of Sanderling Ventures (a European affiliate of a U.S. venture capital firm) since 1996. In the past, Mr. Dumont has served as director of Finter Bank Zurich, Novalog/Winslow Corporation, NUKO Information Systems Inc. in San Jose, CA, and Banque Internationale in Luxembourg, all of which were public companies. Mr. Dumont holds a Degree in Electrical Engineering and Applied Economics from the University of Louvain, Belgium and an MBA from the University of Chicago. We believe Mr. Dumont is qualified to serve as a member100,000,000 shares of our board of directors because of his experience and knowledge of corporate finance, international business development and operations, and his experience as a past director of other public and private companies.
Julia Williams, M.D. was elected to our board of directors in August 2011. She has been an emergency department physician since 1989. She has worked at Flagstaff Medical Center since 1999. Dr. Williams is the founder and President of Humanitarian Efforts Reaching Out, or HERO, a non-profit 501(c)(3) organization that provides humanitarian services including medical and dental care, alternative power sources, solar cookers, vitamins, eye glasses, nutritional support and animal care. HERO’s mission is to help build healthy sustainable communities in underdeveloped Nations around the world. Dr. Williams has received her Doctor of Medicine from the University of Maryland School of Medicine and her Bachelors of Science from the University of Maryland. We believe that Dr. Williams is qualified to serve as a member of our board of directors because of her medical and scientific background, commitment to and experience with animal care, and long commitment to our vision.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTEFORTHE ELECTION OF DR. WILLIAMS AND MR. DUMONT TO THE BOARD OF DIRECTORSAS CLASS I DIRECTORS, EACH TO SERVE FOR A THREE-YEAR TERM UNTIL THE ANNUAL GENERAL MEETING OF STOCKHOLDERS TO BE HELD IN 2020.
Cheryl A. Dyer, Ph.D.is one of our co-founders and has served as our president and a member of our board of directors since our inception in July 2004. She has served as our chief research officer since 2004, where she oversees all of our research activities for relevance to our business goals, adherence to scientific standards and assurance of regulatory, legal and contractual compliance. From June 1990 to September 1995, Dr. Dyer served as a NIH-funded Principal Investigator at The Scripps Research Institute, La Jolla, California and from 1995 to 2010 was on faculty at Northern Arizona University, Flagstaff, Arizona where she maintained an extramurally-funded research program and laboratory. She was the first Research Professor in the Department of Biology at Northern Arizona University and the first Established Investigator for the American Heart Association in the State of Arizona. Dr. Dyer earned a Bachelor’s degree in Biology from the University of California at San Diego in 1974 and a Ph.D. in Physiology and Pharmacology in 1986 in the School of Medicine at University of California at San Diego. Dr. Dyer was appointed as an Adjunct Member of the Graduate Faculty at Texas A&M University in 2015. We believe that Dr. Dyer is qualified to serve as a member of our board of directors because of her unique scientific background, her role as our co-founder and inventor of our first product, ContraPest.
Loretta P. Mayer, Ph.D.is one of our co-founders, and has served as our chair of the board since our inception in July 2004. Since June 2009, Dr. Mayer has served as our chief scientific officer. In December 2015, she assumed the title of chief executive officer, a position she previously held from June 2011 to January 2015. She is a co-inventor on the patent licensed from the University of Arizona that formed the basis for the launch of our research and development efforts and continues to contribute as co-inventor on additional patent improvements and new technology. Prior to her career in medicine and science, from 1978 to 1991 Dr. Mayer served as CEO of Binnacle Development, Inc., a California-based Real Estate Development company, where she established the first Senior Citizen Housing project in the city of San Diego, developed $45 million in product and managed an annual budget of $10 million. Dr. Mayer also served as Vice President of Soroptimist International of the Americas from 1990 to 1991, where she was responsible for NGO representation at United Nations and international board meetings, Cambridge, UK 1990 – 1991. She also served Soroptimist International of the Americas as a federation board member from 1988 to 1990 and as regional governor from 1984 to 1986. She earned a master’s degree in 1997 and a Ph.D. in 2000 in Biology from Northern Arizona University. Dr. Mayer earned a bachelors degree in Sociology from University of California, San Diego in 1971. She accepted a post-doctoral appointment with the College of Medicine at the University of Arizona in 2000. We believe that Dr. Mayer is qualified to serve as a member of our board of directors because of her scientific experience, business background and her role as our co-founder.
Bob Ramseywas elected to our board of directors in January 2016. Since 1978, Mr. Ramsey has served as chief executive officer of Starwest Associates, which develops and implements new business models in public partnerships for ambulance and EMS services. Mr. Ramsey also currently serves as chief executive officer of the Ramsey Social Justice Foundation, a non-profit organization that is dedicated to charitable work in the fields of global sustainability and affordable housing for at-risk and vulnerable populations, including women and children. The Ramsey Social Justice Foundation is a member of the Clinton Global Initiative. Mr. Ramsey has been appointed by six different Arizona governors to various Arizona state boards and commissions, including the Arizona Department of Health Services Emergency Medical Services Council on which he has served continuously since 1988. Mr. Ramsey holds a Bachelor of Arts from Arizona State University, and Arizona State University has named a school after Mr. Ramsey. We believe Mr. Ramsey is qualified to serve as a member of our board of directors because of his experience and knowledge of business development, global sustainability, charitable organizations and state and local government.
Matthew Szotwas elected to our board of directors in December 2015 and appointed as the chairman of the audit committee of our board of directors in December 2015 and as the chairman of the compensation committee of our board of directors in July 2016. Since March 2010, he has served as the chief financial officer and treasurer of S&W Seed Company, a Nasdaq-listed agricultural seed company. From February 2007 until October 2011, Mr. Szot served as the chief financial officer for Cardiff Partners, LLC, a strategic consulting company that provided executive financial services to various publicly traded and privately held companies. From 2003 to December 2006, Mr. Szot served as chief financial officer and Secretary of Rip Curl, Inc., a market leader in wetsuit and action sports apparel products. From 1996 to 2003, Mr. Szot was a Certified Public Accountant with KPMG and served as an Audit Manager for various publicly traded companies. Mr. Szot has a Bachelor of Science degree in Agricultural Economics/Accountancy from the University of Illinois, Champaign-Urbana and is a Certified Public Accountant in the State of California. We believe that Mr. Szot is qualified to serve as a member of our board of directors because of his experience and knowledge of corporate finance, mergers and acquisitions, corporate governance as well as other operational, financial and accounting matters gained as a past and present chief financial officer of other public and private companies.
Grover Wickershamwas elected to our board of directors and appointed as its vice-Chairman in December 2015. Mr. Wickersham also serves on the board of directors of S&W Seed Company, a Nasdaq-traded agricultural company, Eastside Distilling, Inc., an OTCQB-traded producer of high quality spirits, and Verseon Corporation, a London AIM-listed pharmaceutical development company. Since November 2016, Mr. Wickersham has served as the chief executive officer of Eastside Distilling, Inc. Mr. Wickersham has been a director and portfolio advisor of Glenbrook Capital Management, the general partner of a partnership that invests primarily in the securities of public companies, from 1996 to present. For
more than five years, Mr. Wickersham has served as the chairman of the board of trustees of Purisima Fund, a mutual fund advised by Fisher Investments of Woodside, California, which fund has assets under management of approximately $375 million. Between 1976 and 1981, Mr. Wickersham served as a staff attorney, and then as a branch chief, of the U.S. Securities and Exchange Commission. He holds an A.B. from the Univ. of California at Berkeley, an M.B.A. from Harvard Business School and a J.D. from Univ. of California (Hastings). We believe that Mr. Wickersham is qualified to serve as a member of our board of directors because of his experience and knowledge of corporate finance and legal matters, his experience and knowledge of operational matters gained as a past and present director of other public and private companies, and his knowledge of our company.
The names and certain information about our executive officers asCommon Stock. As of the record date, are set forth below:
| | | ||
Drs. Mayerthere were 2,964,485 shares of our Common Stock issued and Dyer’s biographical details are set out above underoutstanding. Although the heading “Continuing Directors.”
Tom Chesterman joinednumber of authorized shares of our company in September 2015, and has served as our chief financial officer and treasurer since December 2015. He has over 20 years of experience as the chief financial officer of a public company in the life science, technology and telecommunications industries. Most recently, he was the vice president and treasurer of General Communication Inc., a telecommunications company in Alaska, from 2013 to 2015. Previously, he was the chief financial officer of life science companies Bionovo Inc. from 2007 to 2012, Aradigm Corp. from 2002 to 2007 and Bio-Rad Laboratories, Inc. from 1996 to 2002. Mr. Chesterman is adept at a variety of capital market access techniques, and has significant experience in developing the operational and financial infrastructures in companies to help support successful and rapid growth. Mr. Chesterman earned a bachelor’s degree from Harvard University and an MBA from the University of California at Davis.
Kim Wolin joined our companyCommon Stock will not change as a marketing technologistresult of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in May 2013,proportion to the ratio selected by our Board of Directors. Thus, the Reverse Stock Split will effectively increase the number of authorized and in May 2014 was appointed executive vice presidentunissued shares of operations. From January 2009 to May 2013, she was a vice president, branch sales and service managerour Common Stock available for future issuance by the amount of Sunwest Bank, a community bank located in Flagstaff, Arizona. From November 1996 to December 2009, Ms. Wolin held the positions of assistant vice president, branch manager and Licensed Financial Advisor at Wells Fargo Bank. She has owned and operated Creative Net Solutions, a website design and hosting business, since 1994. From 1984 to 1992, Ms. Wolin owned and operated Kodas Produce Market, a health food and organic produce store in Oakland, CA. Ms. Wolin earned a bachelor’s degree in Psychology fromreduction effected by the State University of New York/Buffalo in 1977.
The boardwill have the authority, subject to applicable securities laws, to issue all authorized and unissued shares without further stockholder approval, upon such terms and conditions as our Board of directors has adopted a structureDirectors deems appropriate. In addition, some of the additional shares underlie stock options and warrants, which could be exercised after the Reverse Stock Split Charter Amendment is effected.
Our board chair is responsible for the effective functioning of our board of directors, enhancing its efficacy by guiding board of directors processes and presiding at board of directors meetings. Our board chair presides at stockholder meetings and ensures that directors receive appropriate information from our management to fulfill their responsibilities. Our board chair also acts as a liaison between our board of directors and executive management, facilitating clear and open communication between management and the board of directors.
Onehold 1% of the key functionsvoting power of our boardthe outstanding Common Stock after the Reverse Stock Split.
Generally,an award granted under the continued listing requirements and rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. Our board of directors has undertaken a review of its composition, the composition of its committees and the independence of each director. Our board of directors has determined that Messrs. Dumont, Ramsey, Szot and Wickersham, and Dr. Williams are independent within the meaning of Nasdaq listing standards and that none of such directors has any relationship with us that would interfereIncentive Plan, in order to comply with the exerciserequirements of their independent business judgment. Accordingly, a majority of our directors is independent, as required under applicable Nasdaq rules. In making this determination, our board of directors considered the currentSections 409A and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.
The board of directors held a total of 14 meetings during 2016. All directors attended more than 75% of the aggregate of the meetings of the board of directors and committees thereof, if any, upon which such director served during the period for which he or she has been a director or committee member during 2016.
Our board of directors includes an audit committee, a compensation committee and a corporate governance and nominating committee. Our audit, compensation and governance committees are comprised solely of independent board members. Information about these standing committees and committee meetings is set forth below.
Our audit committee currently consists of Matthew Szot, who is the chair of the committee, Grover Wickersham and Marc Dumont. The board of directors has determined that, after consideration of all relevant factors, each of these directors qualifies as an “independent” director under applicable SEC and NASDAQ rules. Each member of the audit committee is able to read and understand fundamental financial statements, including our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows. Further, no member of the audit committee has participated in the preparation of our consolidated financial statements, or those of any of our current subsidiaries, at any time during the past three years. The board of directors has designated Mr. Szot as an “audit committee financial expert” as defined under applicable SEC rules and has determined that Mr. Szot possesses the requisite “financial sophistication” under applicable NASDAQ rules. The audit committee operates under a written charter setting forth the functions and responsibilities of the committee, which is reviewed by the audit committee on an annual basis. A current copy of the audit committee charter is available on our website athttp://senestech.investorroom.com/ on the “Board Committees” page under the heading “Corporate Governance.” The functions of the audit committee include:
Both our independent registered accounting firm and internal financial personnel regularly meet with our audit committee and have unrestricted access to the audit committee.
Our compensation committee currently consists of Matthew Szot, who is the chair of the committee, Bob Ramsey and Julie Williams, each of whom has been determined by our board of directors to be independent in accordance with Nasdaq standards. Each member of our compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m)424 of the Internal Revenue Code of 1986 (the “Code”).
Our nominating and corporate governance committee currently consists of Grover Wickersham, who is the chairbest interests of the committee, Marc Dumont and Bob Ramsey, eachstockholders to enable our Board of whom has been determined by our boardDirectors to continue to seek to obtain a sufficient number of directorsadditional votes to be independent in accordance with Nasdaq standards. The corporate governance and nominating committee operates under a written charter, which is reviewed byapprove the committee on an annual basis andReverse Stock Split Proposal.
The board of directors has determined that director nomination responsibilities should be overseen by the Nominating and Corporate Governance Committee (the “Committee”). OneAdditionally, approval of the Committee’s goals is to assemble a BoardAdjournment Proposal could mean that, brings to us a variety of perspectives and skills derived from high quality business and professional experience. Factors considered by the Committee include judgment, knowledge, skill, diversity (including factors such as race, gender and experience), integrity, experience with businesses and other organizations of comparable size, including experience in animal and health sciences, business, finance, administration or public service, the relevance of a candidate’s experience to our needs and experience of other Board members, familiarity with national and international business matters, experience with accounting rules and practices, the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members, and the extent to which a candidate would be a desirable addition to the board of directors and any committees of the board of directors. In addition, directors are expected to be able to exercise their best business judgment when acting on behalf of us and our stockholders, act ethically at all times and adhere to the applicable provisions of our code of ethics and business conduct. Other than consideration of the foregoing and applicable SEC and Nasdaq requirements, unless determined otherwise by the Committee, there are no stated minimum criteria, qualities or skills for director nominees. However, the Committee may also consider such other factors as it may deem are in the best interests of us and our stockholders. In addition, at least one member of the board of directors serving on the audit committee should meet the criteria for an “audit committee financial expert” having the requisite “financial sophistication” under applicable Nasdaq and SEC rules, andevent we receive proxies indicating that a majority of the membersvotes cast by holders of the boardoutstanding shares of directors should meetour Common Stock present in person or represented by proxy at the definitionSpecial Meeting will vote against the Reverse Stock Split Proposal, we could adjourn or postpone the Special Meeting without a vote on the Reverse Stock Split Charter Amendment and use the additional time to solicit the holders of “independent director” under applicable Nasdaq rules.
The Committee identifies director nominees by first evaluating the current membersthose shares to change their vote in favor of the boardReverse Stock Split Proposal.
qualified individuals. Nominees for director are selected by a majority of the membersshares of Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on this proposal is required to approve this proposal. Each of the Committee, with any current directors who may be nominees themselves abstaining from anyfailure to vote relatingby proxy or to their own nomination.
It isvote in person and a broker non-vote will have no effect on the policy of the Committee to consider suggestions for persons to be nominated for director that are submitted by stockholders. The CommitteeAdjournment Proposal. An abstention will evaluate stockholder suggestions for director nominees inhave the same mannerpractical effect as it evaluates suggestions for director nominees made by management, then-current directorsa vote against this proposal. As described above, the Adjournment Proposal is considered a “routine” matter. Therefore, your broker, bank or other appropriate sources. Stockholders suggesting persons as director nominees should send information about a proposed nominee may vote your shares without receiving instructions from you on this proposal and accordingly, we do not expect any broker non-votes on this proposal. A failure to our Secretary at our principal executive offices as referenced above at least 120 days before the anniversary of the mailing date of the prior year’s proxy statement. This information should be in writing and should include a signed statement by the proposedinstruct your broker, bank or other nominee that he or she is willingon how to servevote your shares will not necessarily count as a director of SenesTech, a description of the proposed nominee’s relationship to the stockholder and any information that the stockholder feels will fully inform the Committee about the proposed nominee and his or her qualifications. The Committee may request further information from the proposed nominee and the stockholder making the recommendation. In addition, a stockholder may nominate one or more persons for election as a director at our annual meeting of stockholders if the stockholder complies with the notice, information, consent and other provisions relating to stockholder nominees contained in our Bylaws. Please see the section above titled “Deadlines for Receipt of Stockholder Proposals” for important information regarding stockholder proposals, including director nominations.
We have adopted a Code of Business Conduct and Ethics in compliance with applicable rules of the SEC that applies to our principal executive officer, our principal financial officer and our principal accounting officer or controller, or persons performing similar functions, as well as to all members of ourvote against this proposal.
The following table sets forth information regarding compensation earned by or paid to our non-employee directors during the year ended December 31, 2016.
| | | | | ||||||||||||
| Name | Cash Awards ($) | Option Awards ($)(3) | RSU Award ($)(4) | Total ($) | ||||||||||||
| Marc Dumont | $ | 32,500 | (1) | $ | 169,040 | $ | 24,997 | $ | 226,537 | |||||||
| Bob Ramsey | $ | 30,000 | (1) | $ | 169,040 | $ | 24,997 | $ | 224,037 | |||||||
| Matthew K. Szot | $ | 105,000 | (2) | $ | 88,240 | $ | 24,997 | $ | 218,237 | |||||||
| Julia Williams, M.D. | $ | 27,500 | (1) | $ | 88,240 | $ | 24,997 | $ | 140,737 | |||||||
| Grover Wickersham | $ | 70,000 | (1) | $ | 88,240 | $ | 24,997 | $ | 183,237 | |||||||
Non-Employee Director Compensation Program
On December 19, 2016, the Board adopted a non-employee director compensation program (the “Program”) for providing cash and equity compensation to its non-employee directors for their service on the Board and committees of the Board. The Program became effective for the service of non-employee directors beginning January 1, 2017. The components of the Program are as follows:
| | |||
| Cash Compensation: | Amount | |||
| Annual general retainer for serving on the Board | $ | 25,000 | ||
| Incremental annual retainer for the Vice-Chair of the Board | $ | 30,000 | ||
| Incremental annual retainer for Chair of the Audit Committee | $ | 20,000 | ||
| Incremental annual retainer for directors also serving on the Audit Committee | $ | 5,000 | ||
| Incremental annual retainer for each Chair of the Compensation and Nominating and Corporate Governance Committees | $ | 10,000 | ||
| Incremental annual retainer for directors also serving on the Compensation and Nominating and Corporate Governance Committees | $ | 2,500 | ||
| Incremental fee for attendance at each meeting of the Audit, Compensation and Nominating and Corporate Governance Committees exceeding one hour | $ | 250 | ||
| | |
In addition, we reimburse non-employee directors for reasonable travel expenses for participation in board meetings and for travel conducted on behalf of our business.
Each of Dr. Mayer, who serves as our chair of the board, chief executive officer and chief scientific officer, and Dr. Dyer, who serves as our president and chief research officer, receives no compensation for her service as a director, and the compensation received by Drs. Mayer and Dyer as employees during 2016 is presented in “Executive Officer Compensation — Summary Compensation Table.”
As a smaller reporting company, we are not required to provide a separately-captioned “Compensation Discussion and Analysis” (“CD&A”) section. However, in order to provide a greater understanding to our stockholders regarding our compensation policies and decisions with respect to our named executive officers, we are including the following narrative disclosure to highlight salient portions of a typical CD&A. This narrative disclosure should be read in conjunction with the Summary Compensation Table and related tables that are presented elsewhere in this Proxy Statement.
Compensation for our executives and key employees is designed to attract and retain people who share our vision and values and who can consistently perform in such a manner that enables us to achieve its strategic goals. The compensation committee believes that the total compensation package for each of our executive officers is competitive with the market, thereby allowing us to retain executive talent capable of leveraging the skills of our employees and our unique assets in order to increase stockholder value. Our “named executive officers” refers to those executive officers identified in the Summary Compensation Table below. Our named executive officers for fiscal year 2016 included the following individuals: Loretta P. Mayer, Ph.D., Chair of the Board, Chief Executive Officer and Chief Scientific Officer; Cheryl A. Dyer, Ph.D., President and Chief Research Officer; and Thomas Chesterman, Chief Financial Officer, Treasurer and Assistant Secretary.
Our executive compensation programs are designed to (1) motivate and reward our executive officers, (2) retain our executive officers and encourage their quality service, (3) incentivize our executive officers to appropriately manage risks while improving our financial results, and (4) align executive officers’ interests with those of our stockholders. Under these programs, our executive officers are rewarded for the achievement of company objectives and the realization of increased stockholder value.
The program seeks to remain competitive with the market while also aligning the executive compensation program with stockholder interests through the following types of compensation: (i) base salary; (ii) annual cash-based incentive bonuses; and (iii) equity-based incentive awards.
The compensation policies developed by the compensation committee are based on the philosophy that compensation should reflect both Company-wide performance, financially and operationally, and the individual performance of the executive, including management of personnel under his supervision. The compensation committee’s objectives when setting compensation for our executive officers include:
Our compensation program is designed to reward superior performance of both the Company and of each individual executives and seeks to encourage actions that drive our business strategy. In fiscal 2016, we instituted a process by which the compensation committee or a member thereof, will meet with each of our executives quarterly to review performance, goals and expectations so that our annual compensation decisions, when made, will be more transparent. Our compensation strategy is to provide a competitive opportunity for
senior executives, taking into account their total compensation packages, which include a combination of base salary, cash-based incentive bonuses and equity-based incentive bonuses.
The Role of the Compensation Committee in Setting Compensation. Our compensation committee determines and recommends to our board of directors the compensation of our executive officers. The compensation committee also makes recommendations to our board of directors regarding equity compensation under our 2015 Equity Incentive Plan (the “2015 Plan”). The compensation committee reviews base salary levels for executive officers of our company and recommends raises and bonuses based upon the company’s achievements, individual performance and competitive and market conditions. The compensation committee may delegate certain of its responsibilities, as it deems appropriate, to compensation subcommittees or to our officers, but it has not elected to do so to date.
The Role of Executives in Setting Compensation. While the compensation committee does not delegate any of its functions to others in setting the compensation of senior management, it includes members of senior management in the compensation committee’s executive compensation process. We have asked each of our senior executives to annually provide us with input with regard to their goals for the coming year. These proposals include suggested company-wide and individual performance goals. The compensation committee reviews these proposals with the executives and provides the Committee’s perspective on those aspects that the Committee may feel should be modified. Quarterly meetings with the executives will permit an ongoing dialog to further our goal of enhancing communication and managing expectations regarding compensation matters.
The Role of Consultants in Setting Compensation. In fiscal 2016, the compensation committee did not retain compensation consultants to assist it in its review of executive compensation although it is empowered by its charter to do so. As the compensation committee deems necessary or helpful, it may retain the services of compensation consultants in connection with the establishment and development of our compensation philosophy and programs in the future.
As part of its risk assessment process, the compensation committee reviewed material elements of executive and non-executive employee compensation. The compensation committee concluded that these policies and practices do not create risk that is reasonably likely to have a material adverse effect on us.
The structure of our compensation program for our executive officers does not incentivize unnecessary or excessive risk taking. The base salary component of compensation does not encourage risk taking because it is a fixed amount. The incentive plan awards have risk-limiting characteristics:
The material elements of the compensation program for our named executive officers include: (i) base salary; (ii) cash-based incentive bonuses; and (iii) equity-based incentive awards.
Base Salaries. We provide our named executive officers with a base salary to compensate them for services rendered during the fiscal year and sustained performance. The purpose of the base salary is to reflect job responsibilities, value to us and competitiveness of the market. Salaries for our named executive officers are determined by the compensation committee based on the following factors: nature and responsibility of the position and, to the extent available, salary norms for comparable positions; the expertise of the individual executive; and the competitiveness of the market for the executive’s services.
Performance Cash-Based Incentive Bonuses. Our practice is to award cash-based incentive bonuses, based in part on the achievement of performance objectives or significant accomplishments as established by the compensation committee from time-to-time in its discretion. These performance objectives and significant accomplishments are, in part, developed in partnership with the executive and are discussed on an ongoing basis throughout the year.
Equity-Based Incentive Awards. Our equity-based incentive awards are designed to align our interests with those of our employees and consultants, including our named executive officers. Our compensation committee is responsible for approving equity grants. As of the end of fiscal 2016, our named executive officers have been granted both stock option awards and restricted stock units. Vesting of the stock option and restricted stock unit awards is tied to continuous service with us and serves as an additional retention measure and long-term incentive.
For fiscal 2016, each executive was entitled to receive an annual incentive bonus, pursuant to their employment agreements. Following the completion of the 2016 fiscal year, each of our executive officers self-evaluated themselves against their specific goals and presented their assessment to the compensation committee. The compensation committee followed with its own assessment and discussed the results with each of our executive officers. Based on the year-end assessments, and pursuant to each executive’s current employment agreement, the compensation committee determined that our executive officers were entitled to incentive bonuses as follows:
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| | |||
| Loretta P. Mayer, PH.D., Chair of the Board, Chief Executive Officer and Chief Scientific Officer | $ | 300,000 | ||
| Cheryl A. Dyer, PH.D., President and Chief Research Officer | $ | 250,000 | ||
| Thomas C. Chesterman, Chief Financial Officer and Treasurer | $ | 250,000 | ||
| | |||
| Loretta P. Mayer, PH.D., Chair of the Board, Chief Executive Officer and Chief Scientific Officer | $ | 250,308 | (1) | |
| Cheryl A. Dyer, PH.D., President and Chief Research Officer | $ | 237,599 | (2) | |
| Thomas C. Chesterman, Chief Financial Officer and Treasurer | $ | 115,944 | ||
| | | ||||||
| Named Executive Officer | Restricted Stock Units | Dollar Value of Options and RSUs | ||||||
| Loretta P. Mayer | 225,556 | (1) | $ | 595,000 | ||||
| Cheryl A. Dyer | 223,241 | (1) | $ | 576,250 | ||||
| Thomas C. Chesterman | 10,494 | $ | 85,000 | |||||
The following table sets forth the compensation earned during the past two fiscal years by (i) the person who served as our principal executive officer during 2016 and (ii) the two most highly compensated executive officers other than the chief executive officer who were serving as executive officers at the end of 2016 and whose total compensation for 2016 exceeded $100,000. The persons described in clauses (i) and (ii) above are collectively referred to herein as our “named executive officers.”
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| Name and Position | Year | Salary ($) | Bonus ($)(5) | Option Awards ($)(1) | RSU Awards ($)(2) | All Other Comp ($)(4) | Total ($) | |||||||||||||||||||||
| Loretta P. Mayer, PH.D., Chair of the Board, Chief Executive Officer and Chief Scientific Officer | 2016 | $ | 207,958 | $ | 250,308 | $ | — | $ | 595,000 | $ | 14,427 | $ | 1,067,693 | |||||||||||||||
| 2015 | $ | 107,000 | $ | 81,836 | $ | 2,410,400 | $ | — | $ | 14,426 | $ | 2,613,662 | ||||||||||||||||
| Cheryl A. Dyer, PH.D., President and Chief Research Officer | 2016 | $ | 182,958 | $ | 237,599 | $ | — | $ | 576,250 | $ | 12,699 | $ | 1,009,506 | |||||||||||||||
| 2015 | $ | 107,000 | $ | 60,000 | $ | 2,410,400 | $ | — | $ | 6,749 | $ | 2,584,149 | ||||||||||||||||
| Thomas Chesterman(3) Chief Financial Officer and Treasurer | 2016 | $ | 250,000 | $ | 115,944 | $ | — | $ | 85,000 | $ | — | $ | 450,944 | |||||||||||||||
| 2015 | $ | — | $ | — | $ | 861,600 | $ | — | $ | — | $ | 861,600 | ||||||||||||||||
In June 2016, per the terms of employment letter agreements with each Dr. Dyer and Dr. Mayer, as further described below, our board of directors granted to each of Dr. Dyer and Dr. Mayer, an award of restricted stock units (RSUs) representing the right to receive 220,000 shares of the Company’s common stock. The RSU awards will vest and be settled over a three-year period, with one-third of the units vesting on the twelve-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service. In December 2016, our board of directors granted RSUs to each of Loretta Mayer, Cheryl Dyer and Tom Chesterman in the amounts of 5,556, 3,241 and 10,494 shares respectively. These were issued as part of their 2016 incentive compensation.
The following table sets forth all outstanding equity awards held by each of our named executive officers as of December 31, 2016.
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| Equity Awards | ||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($)(1) | Option Expiration Date | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($) | |||||||||||||||||||||
| Loretta P. Mayer | 7/3/2015 | 300,000 | — | $ | 0.50 | 7/3/2025 | — | |||||||||||||||||||||
| 10/15/2015 | 40,000 | — | $ | 0.50 | 10/15/2025 | — | ||||||||||||||||||||||
| 6/30/2016 | — | — | $ | — | 220,000 | $ | 1,793,000 | |||||||||||||||||||||
| Cheryl A. Dyer | 7/3/2015 | 300,000 | — | $ | 0.50 | 7/3/2025 | — | |||||||||||||||||||||
| 10/15/2015 | 40,000 | — | $ | 0.50 | 10/15/2025 | — | ||||||||||||||||||||||
| 6/30/2016 | — | — | $ | — | 220,000 | $ | 1,793,000 | |||||||||||||||||||||
| Thomas C. Chesterman | 12/1/2015 | 45,000 | 75,000 | $ | 0.50 | 12/15/2025 | — | |||||||||||||||||||||
| 9/9/2015(2) | 15,000 | — | $ | 0.50 | 9/9/2018 | — | ||||||||||||||||||||||
We have agreements with our named executive officers, which include provisions regarding post-termination compensation. We do not have a formal severance policy or plan applicable to our executive officers as a group.
Agreement with Dr. Mayer. We entered into an employment letter agreement with Dr. Mayer dated June 30, 2016. Pursuant to this agreement, Dr. Mayer is entitled to receive an annual base salary of $300,000, which will be reviewed and may be adjusted periodically by the our compensation committee or board of directors. Dr. Mayer was paid a signing bonus of $150,000 immediately following the signing of her employment letter agreement. By entering into the employment letter agreement and accepting the signing bonus, Dr. Mayer agreed to waive all rights to receive any compensation amounts provided for in her previous employment agreement dated October 16, 2013.
During the term of Dr. Mayer’s employment with us, Dr. Mayer is eligible receive an annual bonus in an amount of up to 50% of her annual base salary, provided that whether Dr. Mayer is entitled to receive any bonus in any given year, and the specific amount of such bonus, shall be determined annually by our board of directors, and shall be based upon mutually agreeable performance objectives and other criteria to be determined by the board of directors. Annual bonuses will be payable within thirty days after the board of director’s determination that an annual bonus shall be awarded.
Pursuant to the terms of her employment letter agreement, on June 30, 2016 we granted to Dr. Mayer an award of restricted stock units (RSU) under our 2015 Plan, representing the right to receive 220,000 shares of our common stock. The RSU award vests and will be settled over a three-year period, with one-third of the units vesting on the 12-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service.
Upon a change of control of our company, we have agreed to pay Dr. Mayer a bonus equal to (i) 1% of the amount of the net sale price (as such term is defined in her employment letter agreement) of our company that is $100,000,000 or less, plus (ii) an additional 0.5% of the amount of the net sale price of our company that is more than $100,000,000, payable in cash or other proceeds payable to our other stockholders. Under the terms of her agreement, Dr. Mayer shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of her employment by us without cause (as such term is defined in her employment letter agreement and excluding death or disability) or within 12 months following Dr. Mayer’s resignation for good reason (as such term is defined in her employment letter agreement), provided that Dr. Mayer remains in compliance with her confidentiality and other ongoing post-termination obligations under the employment letter agreement.
Dr. Mayer shall be entitled to accrue four weeks paid vacation and sick leave per calendar year, and may participate in our standard benefits plans. Dr. Mayer is also entitled to be reimbursed for reasonable out-of-pocket expenses incurred in the performance of her duties to our company in accordance with our rules and policies. We have agreed to pay the annual premiums for a key person term life insurance policy of $1,000,000, subject to underwriter’s acceptance.
In the event that Dr. Mayer is terminated without cause (as such term is defined in her employment letter agreement) or if she resigns for good reason (as such term is defined in her employment letter agreement), then Dr. Mayer shall receive her base salary and health insurance benefits for a period of 12 months following the effective date of such termination. Dr. Mayer will also be entitled to any earned but unpaid annual bonus, and all of her outstanding equity awards will accelerate immediately upon the date of her termination without cause (excluding death or disability) or resignation for good reason.
Agreement with Dr. Dyer. We entered into an employment letter agreement with Dr. Dyer dated June 30, 2016. Pursuant to this agreement, Dr. Dyer is entitled to receive an annual base salary of $250,000, which will be reviewed and may be adjusted periodically by the our compensation committee or board of directors. Dr. Dyer was paid a signing bonus of $150,000 immediately following the signing of her employment letter agreement. By entering into the employment letter agreement and accepting the signing bonus, Dr. Dyer agreed to waive all rights to receive any compensation amounts provided for in her previous employment agreement dated October 16, 2013.
During the term of Dr. Dyer’s employment with us, Dr. Dyer is eligible to receive an annual bonus in an amount of up to 35% of her annual base salary, provided that whether Dr. Dyer is entitled to receive any bonus in any given year, and the specific amount of such bonus, shall be determined annually by our board of directors, and shall be based upon mutually agreeable performance objectives and other criteria to be
determined by the board of directors. Annual bonuses will be payable within thirty days after the board of director’s determination that an annual bonus shall be awarded.
Pursuant to the terms of her employment letter agreement, on June 30, 2016, we granted to Dr. Dyer an RSU award under our 2015 Plan, representing the right to receive 220,000 shares of our common stock. The RSU award vests and will be settled over a three-year period, with one-third of the units vesting on the 12-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service.
Upon change of control of our company, we have agreed to pay Dr. Dyer a bonus equal to (i) 1% of the amount of the net sale price (as such term is defined in her employment letter agreement) of our company that is $100,000,000 or less, plus (ii) an additional 0.5% of the amount of the net sale price of our company that is more than $100,000,000, payable in cash or other proceeds payable to our other stockholders in such company. Under the terms of her agreement, Dr. Dyer shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of her employment by us without cause (as such term is defined in her employment letter agreement and excluding death or disability) or within 12 months following Dr. Dyer’s resignation for good reason (as such term is defined in her employment letter agreement), provided that Dr. Dyer remains in compliance with her confidentiality and other ongoing post-termination obligations under the employment letter agreement.
Dr. Dyer shall be entitled to accrue four weeks paid vacation and sick leave per calendar year, and may participate in our standard benefits plans. Dr. Dyer is also entitled to be reimbursed for reasonable out-of-pocket expenses incurred in the performance of her duties to our company in accordance with our rules and policies. We have agreed to pay the annual premiums for a key person term life insurance policy of $1,000,000, subject to underwriter’s acceptance.
In the event that Dr. Dyer is terminated without cause (as such term is defined in her employment letter agreement) or if she resigns for good reason (as such term is defined in her employment letter agreement), then Dr. Dyer shall receive her base salary and health insurance benefits for a period of 12 months following the effective date of such termination. Dr. Dyer will also be entitled to any earned but unpaid annual bonus, and all of her outstanding equity awards will accelerate immediately upon the date of her termination without cause (excluding death or disability) or resignation for good reason.
Agreement with Mr. Chesterman. We entered into an employment offer letter with Mr. Chesterman dated November 20, 2015 to serve as our chief financial officer. Pursuant to this agreement, we pay Mr. Chesterman a salary of $250,000 per year, and in accordance with the letter agreement, Mr. Chesterman’s salary may be paid up to fifty percent (50%) in stock options until we are in the financial position to pay the salary entirely in cash, to be determined by the chief executive officer. In addition, Mr. Chesterman is eligible for a performance bonus, which amounts shall be determined at least annually by mutual agreement on achievement of personal and company goals, which bonus will be targeted to be no less than $200,000 per year. Per the offer letter, we granted Mr. Chesterman a stock option to purchase 120,000 share of our common stock at an exercise price equal to $0.50 per share, which option vests over a four-year vesting schedule, with 1/48th of the option vesting monthly beginning on January 1, 2016, until such option is vested in full or Mr. Chesterman’s employment is terminated. The vesting of the option shall accelerate in full upon a change in control of us. Mr. Chesterman’s option may also be early exercised by entering into a restricted stock purchase agreement containing a right of repurchase in favor of us on any unvested portion of the shares subject to the option.
The following table presents certain information regarding our common stock that may be issued upon the exercise of options and vesting of restricted stock units granted to employees, consultants or directors as of December 31, 2016:
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| Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||||
| Equity compensation plans approved by security holders | 2,762,014 | (1) | $ | 2.65 | 979,480 | |||||||
| Equity compensation plans not approved by security holders | — | $ | — | — | ||||||||
We have granted options to purchase common stock to our officers, directors, employees and consultants under our 2015 Equity Incentive Plan (the “Plan”). The Plan also enables us to grant restricted stock, restricted stock units and certain other equity-based compensation to our officers, directors, employees and consultants. Under the Plan, we awarded restricted stock units to each of our non-employee directors in 2015 and 2016. We also awarded restricted stock units to certain of our officers in 2016 under the Plan.
We pay 75% of premiums for medical insurance and dental insurance for all full-time employees, including our named executive officers. We also offer high deductible plan options that include a healthcare flexible spending account component for all full-time employees, including our named executive officers. These benefits are available to all full-time employees, subject to applicable laws. We also pay premiums for life insurance and long-term disability insurance benefits for two of our named executive officers per the terms of their respective employment letter agreements, Loretta P. Mayer, Ph.D. and Cheryl A. Dyer, Ph.D., and we also pay premiums for long-term disability insurance benefits for Kim Wolin, our executive vice president — operations and secretary, per the terms of her employment agreement.
The following table sets forth, as of April 12, 2017,July 28, 2023, information regarding beneficial ownership of our common stockCommon Stock by:
Of this total amount, the number of shares of common stock underlying options and RSUs that are currently vested and stock options and restricted stock units that are not currently vested but will become vested within 60 days after April 12, 2017July 28, 2023 are deemed outstanding for the purpose of computing the percentage ownership of common stockCommon Stock outstanding beneficially owned by a stockholder, director or executive officer, (the “Deemedor the Deemed Outstanding Shares”)Shares, and are also separately listed below under the heading “Number of Shares UnderlyingIssuable Upon Exercise of Warrants and Options and RSUs,”Exercisable or Vested” but the Deemed Outstanding Shares are not treated as outstanding for the purpose of computing the percentage ownership of common stockour Common Stock outstanding beneficially owned by any other person. This table is based on information supplied by officers, directors, principal stockholders and filings made with the SEC. Percentage ownership is based on 10,161,0422,964,485 shares of common stockCommon Stock outstanding as of April 12, 2017.
July 28, 2023.
| | | | | ||||||||||||
| Name and Address of Beneficial Owner | Number of Shares Beneficially Held | Number of Shares Issuable Upon Conversion or Exercise of Options and RSUs by June 12, 2017 | Total Shares Beneficially Owned | |||||||||||||
| Shares | Percent | |||||||||||||||
| 5% Owners: | ||||||||||||||||
| Gilder, Gagnon, Howe and Co., LLC 475 10th Avenue, New York, NY 10018 | 1,070,775 | — | 1,070,775 | 10.5 | % | |||||||||||
| NAU Ventures, LLC PO Box 4094, Flagstaff, AZ 86011 | 400,000 | 210,526 | 610,526 | 6.0 | % | |||||||||||
| Directors and Named Executive Officers: | ||||||||||||||||
| Loretta P. Mayer, Ph.D.(1) | 473,376 | 340,000 | 813,376 | 8.0 | % | |||||||||||
| Cheryl A. Dyer Ph.D.(1) | 487,962 | 340,000 | 827,962 | 8.1 | % | |||||||||||
| Thomas C. Chesterman | 7,273 | 60,000 | 67,273 | * | ||||||||||||
| Name of Beneficial Owner | Number of Shares Beneficially Held | Number of Shares Issuable Upon Exercise of Warrants and Options Exercisable or Vested as of July 28, 2023 | Total Shares Beneficially Owned | |||||||||||||||||||||||||||||
| Shares | Percent | |||||||||||||||||||||||||||||||
| Directors and Named Executive Officers: | ||||||||||||||||||||||||||||||||
| Joel L. Fruendt | 13,225 | 17,874 | 31,099 | 1.04% | ||||||||||||||||||||||||||||
Kenneth Siegel(1) | 1,757 | 20,370 | 22,127 | * | ||||||||||||||||||||||||||||
| Thomas C. Chesterman | 25 | 11,943 | 11,968 | * | ||||||||||||||||||||||||||||
Nicole C. Williams(2) | — | 4,876 | 4,876 | * | ||||||||||||||||||||||||||||
| Jamie Bechtel, JD, Ph.D. | 143 | 16,686 | 16,829 | * | ||||||||||||||||||||||||||||
| Delphine François Chiavarini | 67 | 16,877 | 16,944 | * | ||||||||||||||||||||||||||||
| Phil N. Grandinetti III | — | 30,368 | 30,368 | 1.01% | ||||||||||||||||||||||||||||
| Jake S. Leach | 7,500 | 25,200 | 32,700 | 1.09% | ||||||||||||||||||||||||||||
| Matthew K. Szot | 234 | 25,278 | 25,512 | * | ||||||||||||||||||||||||||||
| All current executive officers and directors as a group (7 persons) | 21,194 | 144,226 | 165,420 | 5.32% | ||||||||||||||||||||||||||||
| 5% Owners: | ||||||||||||||||||||||||||||||||
| Armistice Capital, LLC | 367,570 | (3) | — | (4) | 367,570 | 9.99% | ||||||||||||||||||||||||||
| Lind Global Fund II LP | 285,715 | (5) | — | (6) | 285,715 | 9.64% | ||||||||||||||||||||||||||
| Intracoastal Capital LLC | 31,765 | (7) | 122,263 | (8) | 154,028 | 4.99% | ||||||||||||||||||||||||||
| | | | | ||||||||||||
| Name and Address of Beneficial Owner | Number of Shares Beneficially Held | Number of Shares Issuable Upon Conversion or Exercise of Options and RSUs by June 12, 2017 | Total Shares Beneficially Owned | |||||||||||||
| Shares | Percent | |||||||||||||||
| Marc Dumont(2) | 121,637 | 18,889 | 140,526 | 1.4 | % | |||||||||||
| Bob Ramsey(3) | 261,748 | 10,000 | 271,748 | 2.7 | % | |||||||||||
| Matthew K. Szot | 34,000 | 10,000 | 44,000 | * | ||||||||||||
| Julia Williams, M.D.(4) | 108,212 | 10,000 | 118,212 | 1.2 | % | |||||||||||
| Grover Wickersham(5) | 322,100 | 10,000 | 332,100 | 3.3 | % | |||||||||||
| All executive officers and directors as a group (9 persons)(6) | 1,891,873 | 893,889 | 2,785,762 | 27.4 | % | |||||||||||
| * Represents beneficial ownership |
Section 16(a) of less than one percent (1%).
We have been party to the following transactions since January 1, 2016, in which the amount involved exceeded or will exceed $120,000, and in which anybeneficially own greater than 9.99% of our executive officers, directors, promoters or holderscompany, and 285,715 shares of common stock underlying warrants held by Armistice Capital Master Fund Ltd., which includes a provision limiting the holder’s ability to exercise the warrants if such exercise would cause the holder to beneficially own greater than 4.99% of our company.
The following table summarizes theMr. Asher is 111 W. Jackson Boulevard, Suite 200, Chicago, Illinois 60604.
| | | | |||||||||
| Name of director, officer or 5% stockholder | Date issued | Number of shares of common stock | Aggregate purchase price paid | |||||||||
| Grover Wickersham | March 30, 2016 | 320,000 | $ | 160,000 | ||||||||
| Marc Dumont(1) | May 6, 2016 | 59,930 | $ | 149,824 | ||||||||
| Bob Ramsey | April 7, 2016 | 20,000 | $ | 150,000 | ||||||||
| NR Malibu Road LLC(2) | May 6, 2016 | 140,202 | $ | 350,505 | ||||||||
| Julia A. Williams(3) | May 6, 2016 | 52,800 | $ | 132,000 | ||||||||
We have entered into employment agreements with certain of our executive officers. For more information regarding these agreements, see the section of the prospectus captioned “Executive Officer Compensation — Employment Agreements.”
We have entered into indemnification agreements with each of our directors and executive officers. These agreements provide for the indemnification of such persons for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were serving in such capacity. We believe that these charter provisions and indemnification agreements are necessary to attract and retain qualified persons as directors, officers and employees. Furthermore, we have obtained director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to us.
We have adopted a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the prior consent of our audit committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must first be presented to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, our audit committee is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under
the same or similar circumstances and the extent of the related person’s interest in the transaction. All of the transactions described above were entered into prior to the adoption of such policy, but after presentation, consideration and approval by our board of directors.
In addition, if a related person transaction will compromise the independence of one of our directors, our audit committee may recommend that our board of directors reject the transaction if it could affect our ability to comply with securities laws and regulations or the Nasdaq Stock Market listing requirements.
The independent registered public accounting firm of M&K CPAS, PLLC (“M&K”) has acted as our auditor since December 22, 2014 and has audited our financial statements for the years ended December 31, 2016, 2015 and 2014. M&K is responsible for performing an independent audit of our consolidated financial statements in accordance with auditing standards generally accepted in the United States and issuing a report on its audit. A representative of M&K is expected to be present at the Annual Meeting, where he or she will have the opportunity to make a statement and to respond to appropriate questions.
The audit committee has appointed, and the board of directors has ratified the audit committee’s appointment of, M&K as our independent registered public accounting firm for the fiscal year ending December 31, 2017.
The aggregate fees billed by M&K for the years ended December 31, 2016 and 2015 for professional services described below are as follows:
| | | ||||||
| Year Ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| Audit fees(1) | $ | 49,491 | $ | 55,370 | ||||
| Audit-related fees(2) | $ | 28,400 | $ | — | ||||
| Tax fees | $ | — | $ | — | ||||
| All other fees | $ | — | $ | — | ||||
| Total fees | $ | 77,891 | $ | 55,370 | ||||
We have implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, our audit committee pre-approves all services to be provided by M&K and the estimated fees related to these services.
All audit, audit related, and tax services were pre-approved by the audit committee, which concluded that the provision of such services by M&K was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. Our pre-approval policies and procedures provide for the audit committee’s pre-approval of specifically described audit, audit-related, and tax services on an annual basis, but individual engagements anticipated to exceed pre-established thresholds must be separately approved. The policies and procedures also require specific approval by the audit committee if total fees for audit-related and tax services would exceed total fees for audit services in any fiscal year. The policies and procedures authorize the audit committee to delegate to one or more of its members pre-approval authority with respect to permitted services.
In connection with our financial statements for the fiscal year ended December 31, 2016, the Audit Committee has:
Based upon these reviews and discussions, the Audit Committee approved our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC.
Submitted by the Audit Committee:Matthew K. Szot (Chair)Grover T. WickershamMarc Dumont
The ratification of the appointment of M&K CPAS, PLLC as our independent registered public accounting firm requires that the votes cast in favor of the proposal exceed the votes cast against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTEFOR RATIFICATION OF THE APPOINTMENT OF M&K CPAS, PLLCAS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FORTHE FISCAL YEAR ENDING DECEMBER 31, 2017.
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Our Annual LetterRestated Certificate of Incorporation of the Corporation and declaring said amendment to Stockholders forbe advisable. The requisite stockholders of the year ended December 31, 2016 (whichCorporation have duly approved the proposed amendment in accordance with Section 242 of the General Corporation Law of the State of Delaware. The amendment amends the Amended and Restated Certificate of Incorporation of the Corporation as follows:
By Orderreceive fractional shares, will automatically be entitled to rounding up of their fractional share to the nearest whole share. No stockholders will receive cash in lieu of fractional shares. Each certificate that immediately prior to the Effective Time represented shares of Common Stock shall thereafter automatically and without the necessity of presenting the same for exchange, subject to the adjustment for fractional shares as described above, represent that number of whole shares of Common Stock into which the shares of Common Stock formerly represented such certificate shall have been combined, provided however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been combined.”
Loretta P. MayerChairdirectors.
| SENESTECH, INC. | ||||||||
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