SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Spine Injury Solutions, Inc. |
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SPINE INJURY SOLUTIONS, INC.
5225 Katy Freeway, Suite 600
Houston, Texas 77007
TO BE HELD NOVEMBER 10, 2015
We hereby give notice that the Annual Meeting of Stockholders of Spine Injury Solutions, Inc. (formerly Spine Pain Management, Inc.) will be held on November 10, 2015,October 30, 2018, at 2:3:00 p.m. local time, at 5225 Katy Freeway, Suite 600, Houston, Texas 77007, for the following purposes:
(1) | To elect five directors; |
(2) | To ratify the selection of Ham, Langston & Brezina, LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
(3) | To transact such other business as may properly come before the meeting. |
Under Delaware law, only stockholders of record on the record date, which is September 24, 2015,7, 2018, are entitled to notice of and to vote at the Annual Meeting or any adjournment. It is important that your shares of common stock be represented at this meeting so that the presence of a quorum is assured.
Your vote is important. Even if you plan to attend the meeting in person, please date and execute the enclosed proxy and return it promptly in the enclosed postage-paid envelope as soon as possible. If you attend the meeting, you may revoke your proxy and vote your shares in person.
By Order of the Board of Directors, | |
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September 19, 2018 | William F. Donovan, M.D. |
Chief Executive Officer and Chairman of the Board |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of |
The Proxy Statement, form of proxy card and Annual Report are available at: www.spineinjurysolutions.com |
SPINE INJURY SOLUTIONS, INC.
5225 Katy Freeway, Suite 600
Houston, Texas 77007
PROXY STATEMENT
INFORMATION CONCERNING THE ANNUAL MEETING
Mailing and Solicitation
. Proxies are being solicited on behalf of the Board of Directors of Spine Injury Solutions, Inc. This Proxy Statement and accompanying form of proxy card will be sent on or aboutAnnual Report on Form 10-K
. A copy of our Annual Report on Form 10-K for the year ended December 31,Proxies
. Whether or not you plan to attend the Annual Meeting, we request that you date and execute the enclosed proxy card and return it in the postage-paid return envelope. If your shares are held in “street name” through a brokerage, bank or other institution, telephone and internet instructions are also provided on the proxy card you receive. The availability of telephone and internet proxy will depend on the nominee’s proxy processes. A control number, located on the proxy card, is designed to verify your identity, allow you to vote your shares, and confirm that your voting instructions have been properly recorded.Under the rules of the New York Stock Exchange (“NYSE”), brokers who hold shares in “street name” for customers are precluded from exercising voting discretion with respect to the approval of non-routine matters (so called “broker non-votes”) where the beneficial owner has not given voting instructions. With respect to the election of directors (Proposal 1), a broker is not entitled to vote the shares of common stock unless the beneficial owner has given instructions. With respect to the ratification of the selection of Ham, Langston & Brezina, LLP as our independent registered public accounting firm (Proposal 2), a broker will have discretionary authority to vote the shares of common stock if the beneficial owner has not given instructions.
Revocation of Proxies
. The proxy may be revoked by the stockholder at any time before a vote is taken by notifying our President in writing at the address of Spine Injury Solutions, Inc. given above; by executing a new proxy bearing a later date or by submitting a new proxy by telephone or internet; or by attending the Annual Meeting and voting in person.Voting in Accordance with Instructions
. The shares represented by your properly completed proxy will be voted in accordance with your instructions marked on it. If you properly sign, date, and deliver to us your proxy but you mark no instructions on it, the shares represented by your proxy will be voted for the election of the director nominees as proposed (Proposal 1), and for the ratification of Ham, Langston & Brezina, LLP as our independent registered public accounting firm forQuorum
. The presence in person or by proxy of a majority of the shares of common stock outstanding on the record date constitutes a quorum for purposes of voting on a particular matter and conducting business at the meeting.Required Vote
. A plurality of the common stock present in person or represented by proxy at the Annual Meeting will elect as directors the nominees proposed (Proposal 1). The ratification of Ham, Langston & Brezina, LLP as our independent registered public accounting firm forRecord Date
. The close of business on SeptemberNo Dissenters’ Rights
. Under the Delaware General Corporation Law, stockholders are not entitled to dissenters’ rights with respect to the matters to be voted on at the Annual Meeting.PROPOSAL 1 - ELECTION OF DIRECTORS
General Information
Under our bylaws, the Board of Directors consists of at least one director and may consist of such number of directors as may be fixed from time to time by action of the stockholders or of the Board of Directors. Directors are elected to hold office until the next Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Presently, the Board of Directors consists of five members, William F. Donovan, M.D., John Bergeron, Jerry Bratton, Peter L. Dalrymple and Franklin A. Rose, M.D.members. Our Nominating Committee recommended to the Board of Directors did not nominate Franklin A. Rose for re-election to the Board.
The persons named in the enclosed Proxy (“Proxy”) have each been selected by the Board of Directors to serve as proxy and will vote the shares represented by valid proxies at the Annual Meeting and adjournments thereof. Unless otherwise instructed or unless authority to vote is withheld, the enclosed Proxy will be voted for the election of the nominees listed below. Each duly elected director will hold office until his successor shall have been elected and qualified. Although our Board of Directors does not contemplate that any of the nominees will be unable to serve, if such a situation arises prior to the Annual Meeting, the person named in the enclosed Proxy will vote for the election of such other person(s) as may be nominated by the Board of Directors.
Information Regarding Nominees
The names of the nominees for election to the Board, their principal occupations and certain other information follow:
William F. Donovan, M.D.
– ageJohn Bergeron, CPA
– ageJerry Bratton, J.D., MBA – age 6366 – Mr. Bratton has served as one of our directors since July 2010. He has served as President of Bratton Steel, L.P. since 2006 and previously with Bratton Steel, Inc. (its predecessor) since 1991. Bratton Steel is a structural steel fabricating company. As President, Mr. Bratton has grown the company from a startup to a company that employs up to approximately 75 employees. He has significant experience in overseeing sales, estimating, project management and contracting. Mr. Bratton served as President of the Texas Structure Steel Institute from 2007 to 2008. He is also a member of the American Institute of Steel Construction. Mr. Bratton has business and investment background in medical software, personal medical information records storage, RFID security products and energy ventures. Mr. Bratton is a licensed attorney in the State of Texas and previously served as an assistant general counsel in the construction industry. Mr. Bratton earned Juris Doctorate and Master of Business Administration degrees from Texas Tech University in 1977.
Peter L. Dalrymple
– ageJeffrey A. Cronk, D.C., J.D.
– ageOF THE NOMINEES LISTED ABOVE.
Information Regarding Executive Officers
Executive officers are appointed to serve at the discretion of the Board. Our current executive officers are as follows:
Name | Age | Position(s) and Office(s) | ||
William F. Donovan, M.D. | 75 | Chief Executive Officer, President and Director (Chairman) | ||
John Bergeron | 61 | Chief Financial Officer and Director |
See “Information Regarding Nominees” above for biographical information of Dr. Donovan and Mr. Bergeron.
CORPORATE GOVERNANCE MATTERS
Meetings of the Board
All directors are expected to make every effort to attend meetings of the Board, meetings of any Board Committees on which such director serves, and annual meetings of stockholders. The Board of Directors held fivefour meetings during the fiscal year ended December 31, 2014.2017. The Board of Directors also executed three written consents to action in lieu of a meeting during the year ended December 31, 2017, which consent were each approved unanimously. The Board of Directors currently has an Audit Committee, a Compensation Committee and a Nominating Committee. During 2014,2017, the Audit Committee held threefour meetings, the Compensation Committee held one meeting,no meetings, and the Nominating Committee held one meeting. Also during 2014, the independent members of2017, the Board of Directors held onetwo “executive session” meeting.meetings. Of our incumbent directors, during 2014 only Franklin A. Rose, M.D.2017, all attended no fewer than 75 percent of the aggregate of (i) the total number of meetings of the Board of Directors (including consents to action in lieu of a meeting) held during the period for which he has been a director, and (ii) the total number of meetings held by all committees of the Board on which he served during the periods that he served. FourAll of our incumbent directors attended the 20142017 Annual Meeting of Stockholders.
Stockholder Communications with Directors
Any stockholder desiring to contact the Board, or any specific director(s), may send written communications to: Board of Directors (Attention: (Name(s) of director(s), as applicable)), c/o President, 5225 Katy Freeway, Suite 600, Houston, Texas 77007. Any communication so received will be processed and conveyed to the member(s) of the Board named in the communication or to the Board, as appropriate, except for junk mail, mass mailings, product or service complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material.
Director Independence
We currently have twoone independent directorsdirector on our Board, Jerry Bratton, J.D. and Franklin A. Rose, M.D. Dr. Rose is not standing for reelection at the 2015 Annual Meeting. Additionally, a director nominee, Jeffrey A. Cronk, D.C., J.D., is independent.Bratton. The definition of “independent” used herein is arbitrarily based on the independence standards of The NASDAQ Stock Market LLC. The Board performed a review to determine the independence of Jerry Bratton and Jeffrey Cronk and made a subjective determination as to each of these directors that no transactions, relationships or arrangements exist that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Spine Injury Solutions, Inc. In making these determinations, the Board reviewed information provided by these directors with regard to each individual’s business and personal activities as they may relate to us and our management.
Our Board is currently composed of five directors, with William F. Donovan, M.D. carrying the title of “Chairman” of the Board. In addition to serving on the Board, Dr. Donovan also currently serves as President and Chief Executive Officer. Accordingly, there is often little separation in Dr. Donovan’s role as principal executive officer and his role as Chairman. To mitigate any apparent conflicts this may create, we have chosen to maintain a Board of Directors that includes independent directors. Currently, twoone of our five directors are independent, and if all five nominees are elected at the 2015 Annual Meeting, two of five of our directors will beis independent. We believe having independent directors allows the Board to better oversee and manage risk. NoneAlthough we presently have only one independent director, historically, none of our independent directors holdshave held the title of “lead” independent director. Accordingly,director, and accordingly, all of our independent directors have had an equal role in the leadership of the Board. We believe that our overall leadership structure is appropriate based on our current size.
As a part of its oversight function, the Board of Directors monitors how management operates the company. Risk is an important part of deliberations at the Board and committee level throughout the year. Committees consider risks associated with their particular areas of responsibility. The Board of Directors as a whole considers risks affecting us. The Board and its committees consider, among other things, the relevant risks to the company when granting authority to management and approving business strategies. Through this risk oversight process, the Board reserves the right to make changes to our leadership structure in the future if it deems such changes are appropriate and in the best interest of our stockholders.
Audit Committee
We maintain a separately-designated standing audit committee. The Audit Committee currently consists of Peter Dalrymple, and our two independent directors, Jerry Bratton and Franklin Rose, M.D. Jeffrey A. Cronk. Although the Charter of the Audit Committee provides for a majority of the Audit Committee to be independent, presently only Mr. Bratton is independent. A majority of the Audit Committee was independent until August 2017 when Dr. Cronk was appointed Chief Operating Officer and is no longer deemed independent. We anticipate that Dr. Cronk will remain on the Audit Committee until we appoint or elect an additional independent member of the Board who can join the Audit Committee. If we are unable to appoint or elect an additional independent member of the Board, we will consider amending the Charter of the Audit Committee.
Mr. Bratton is the Chairman of the Audit Committee, and the Board of Directors has determined that he is an audit committee financial expert as defined in Item 5(d)(5) of Regulation S-K. The primary purpose of the Audit Committee is to oversee our accounting and financial reporting processes and audits of our financial statements on behalf of the Board of Directors. The Audit Committee meets privately with our management and with our independent registered public accounting firm and evaluates the responses by our management both to the facts presented and to the judgments made by our outside independent registered public accounting firm. Our Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 20142017 with our management.
In January 2011, our Board adopted a charter for the Audit Committee. A copy of the Charter of the Audit Committee can be found in our website at www.spinepaininc.com.www.spineinjurysolutions.com. The Charter establishes the independence of our Audit Committee and sets forth the scope of the Audit Committee'sCommittee’s duties. A majority of the members of the Audit Committee will be independent. The Audit Committee is objective, and reviews and assesses the work of our independent registered public accounting firm and our internal accounting.
Report of the Audit Committee
The Audit Committee has reviewed and discussed with management the audited financial statements of Spine Injury Solutions, Inc. for the fiscal year ended December 31, 2014.2017. The Audit Committee has discussed with Ham, Langston & Brezina, LLP, our independent auditors (“HLB”), the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has received the written disclosures and the letter from HLB required by applicable requirements of the Public Company Accounting Oversight Board regarding HLB’s communications with the Audit Committee concerning independence, and has discussed with HLB the independence of HLB.
Based on the review and discussions referred to in the paragraph above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our annual report on Form 10-K for the fiscal year ended December 31, 2014.2017. This report is furnished by the Audit Committee of our Board of Directors, whose members are:
Jerry Bratton (Chairman of the Audit Committee);
Peter L. Dalrymple; and
Jeffrey A. Cronk, D.C.
All information within this “Audit Committee” section of the Proxy Statement, including but not limited to the Report of the Audit Committee, shall not be deemed to be “soliciting material,” or to be “filed” with the SEC or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101) or to the liabilities of section 18 of the Exchange Act. Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
Compensation Committee
We have a Compensation Committee whose members are Jerry Bratton, Peter Dalrymple and Franklin Rose, M.D.Jeffrey A. Cronk. Our Compensation Committee does not currently have a written charter. Our Compensation Committee makes recommendations to the Board of Directors as to employee benefit programs and officer, director and employee compensation. The primary objectives of our executive compensation programs are to: (1) attract, retain and motivate skilled and knowledgeable individuals; (2) ensure that compensation is aligned with our corporate strategies and business objectives; (3) promote the achievement of key strategic and financial performance measures by linking short-term and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and (4) align executives’ and directors’ incentives with the creation of stockholder value. To achieve these objectives, our Compensation Committee evaluates our executive compensation program with the objective of setting compensation at levels it believes will allow us to attract and retain qualified executives and directors. The Compensation Committee will take under consideration recommendations from executive officers and directors regarding its executive compensation program. The Compensation Committee also has the authority to obtain advice and assistance from external advisors, including compensation consultants, although the Compensation Committee did not elect to retain a compensation consultant to assist with determining executive compensation during 2014.
Nominating Committee
We have a Nominating Committee whose members are Jerry Bratton, Peter Dalrymple and Franklin Rose, M.D.Jeffrey A. Cronk. The Nominating Committee’s primary duties are to identify, evaluate and recommend to the Board nominees for director. See “Procedures for Director Nominations” below for the criteria it uses to evaluate nominee candidates. Based on our size, the Nominating Committee does not yet have a written charter and does not have a written policy with regard to the consideration of any director candidates recommended by stockholders. The Nominating Committee will, however, consider written nominations of candidates for election to the Board properly submitted by stockholders. For information regarding the procedures for stockholder nominations to the Board, see “Procedures for Director Nominations” below.
Procedures for Director Nominations
Members of the Board are expected to collectively possess a broad range of skills, industry and other knowledge and expertise, and business and other experience useful for the effective oversight of our business. All candidates must meet the minimum qualifications and other criteria established from time to time by the Board and the Nominating Committee. In considering possible candidates for election as director, the Board and Nominating Committee are guided by the following standards:
(1) | Each director should be an individual of the highest character and integrity; |
(2) | Each director should have substantial experience that is of particular relevance to us; |
(3) | Each director should have sufficient time available to devote to the affairs of the company; and |
(4) | Each director should represent the best interests of the stockholders as a whole. |
We also consider the following criteria, among others, in our selection of directors:
(1) | Medical, technical, scientific, academic, financial and other expertise, skills, knowledge and achievements useful to the oversight of our business; |
(2) | Diversity of viewpoints, backgrounds, experiences and other demographics; and |
(3) | The extent to which the interplay of the candidate’s expertise, skills, knowledge and experience with that of other Board members will build a Board that is effective, collegial and responsive to the needs of the company. |
The Nominating Committee evaluates suggestions concerning possible candidates for election to the Board submitted to us, including those submitted by Board members (including self-nominations) and stockholders. All candidates, including those submitted by stockholders, will be similarly evaluated by the Nominating Committee using the Board membership criteria described above and in accordance with applicable procedures, including such procedures prescribed by the SEC. Once candidates have been identified, the Nominating Committee will determine whether such candidates meet our qualifications for director nominees and select and recommend nominees to the Board accordingly.
As noted above, the Nominating Committee will consider qualified director nominees recommended by stockholders when such recommendations are submitted in accordance with applicable SEC requirements and any other applicable law, rule or regulation regarding director nominations. When submitting a nomination to us for consideration, a stockholder must provide certain information that would be required under applicable SEC rules, including the following minimum information for each director nominee: full name and address; age; principal occupation during the past five years; current directorships on publicly held companies and registered investment companies; and number of shares of our common stock owned, if any. No candidates for director nominations were submitted to the Board by any stockholder in connection with the 20142018 Annual Meeting.
COMPENSATION DISCUSSION
The following table provides summary information for the years 20142017 and 20132016 concerning cash and non-cash compensation paid or accrued to or on behalf of certain executive officers (“named executive officers”).
Summary Executive Compensation Table
Name and Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||
William Donovan, M.D. | 2014 | $ | 102,461 | $ | - | $ | - | $ | 62,110 | (1) | $ | - | $ | - | $ | - | $ | 164,571 | ||||||||||||||||
CEO and President | 2013 | 96,000 | - | - | 144,000 | (1) | - | - | - | 240,000 | ||||||||||||||||||||||||
John Bergeron | 2014 | 88,988 | - | 44,000 | (2) | - | - | 132,988 | ||||||||||||||||||||||||||
CFO | 2013 | 90,000 | 8,509 | 48,000 | (2) | - | 146,509 |
Change in | |||||||||||||||||||||||||||||||||
Pension | |||||||||||||||||||||||||||||||||
Value | |||||||||||||||||||||||||||||||||
Non-Equity | and | ||||||||||||||||||||||||||||||||
Incentive | Nonqualified | ||||||||||||||||||||||||||||||||
Name and | Stock | Option | Plan | Deferred | All Other | ||||||||||||||||||||||||||||
Principal | Salary | Bonus | Awards | Awards | Compensation | Compensation | Compensation | Total | |||||||||||||||||||||||||
Position | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||
William Donovan, M.D. | 2017 | $ | 120,000 | - | - | - | - | - | - | 120,000 | |||||||||||||||||||||||
CEO and President | 2016 | 120,000 | - | - | - | - | - | - | 120,000 | ||||||||||||||||||||||||
John Bergeron | 2017 | 110,000 | - | - | - | - | - | - | 110,000 | ||||||||||||||||||||||||
CFO | 2016 | 110,000 | - | - | - | - | - | - | 110,000 | ||||||||||||||||||||||||
Jeffery Cronk, D.C | 2017 | 15,000 | - | 15,800 | - | - | - | - | 30,800 | ||||||||||||||||||||||||
COO | 2016 | - | - | - | - | - | - | - | - |
Employment Agreements
On September 16, 2014, we entered into an2017, our employment agreement with our President and Chief Executive Officer, William F. Donovan, M.D. The contract providesexpired. Since that we will pay Dr. Donovantime, he has worked for us on an at-will basis and presently receives an annual base salary of $120,000. The agreement also provides that we may grant Dr. Donovan performance bonuses from time to time at the discretion of the Board of Directors. The agreement has a confidentiality provision and provides that Dr. Donovan cannot compete with us for a period upon termination of the agreement.
On November 30, 2014.
Outstanding Equity Awards at Fiscal Year End
There are no equity awards held by our named executive officersoutstanding at December 31, 2014:
Option Awards | ||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
William F. Donovan, M.D. | 550,000 | (1) | - | - | 0.77 | 06/06/2016 | ||||||||||||||
John R. Bergeron (3) | 200,000 | (2) | - | - | 0.54 | 12/01/2017 |
Compensation of Directors
Currently, Board members are not compensated for attending meetings nor do they receive any other form of compensation in their capacity as Board members.members of the Board. We anticipate the Board willmay revisit the issue of Board member compensation at a later date. Compensation to directors during the year ended December 31, 2014 was as follows:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
John Bergeron | - | - | - | - | - | - | 0 | |||||||||||||||||||||
Jerry Bratton | 600 | - | - | - | - | - | 600 | |||||||||||||||||||||
William Donovan, M.D. | - | - | - | - | - | - | - | |||||||||||||||||||||
Franklin Rose, M.D. | 300 | - | - | - | - | - | 300 | |||||||||||||||||||||
Peter Dalrymple | - | - | - | - | - | - | - |
Compensation Policies and Practices as they Relate to Risk Management
We attempt to make our compensation programs discretionary, balanced and focused on the long term. We believe goals and objectives of our compensation programs reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single performance measure. Our approach to compensation practices and policies applicable to employees and consultants is consistent with that followed for its executives. Based on these factors, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more than ten percent of our common stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission. Based solely upon a review of Forms 3, 4 and 5 furnished to us during the fiscal year ended December 31, 2014,2017, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2014,2017, except for (i) a Form 4 that was filed late by William Donovan,Jeffrey Cronk, our Chief Executive Officer, (ii) a Form 3 and two Form 4s that were filed late by Peter Dalrymple, a Director, and (iii) a Form 3 and Form 4 that were filed late by LPD Investments, Ltd, a beneficial owner of more than 10% of our common stock over which Mr. Dalrymple has voting and investment authority.Operating Officer.
Related Person Transactions
We have an agreement with Northshore Orthopedics, Assoc. ("NSO"(“NSO”), which is 100% owned by our Chief Executive Officer, William Donovan, M.D., to provide medical services as our independent contractor. As of December 31, 20132017 and 2012,2016, we had balances payable to NSO of $0$27,910 and $10,406,$0 respectively. This outstanding payable is non-interest bearing, due on demand and does not follow any specific repayment schedule. We do not directly pay Dr. Donovan (in his individual capacity as a physician) any fees in connection with NSO. However, Dr. Donovan is the sole owner of NSO, and we pay NSO under the terms of our agreement.
On August 29, 2012, we issued Peter Dalrymple, a $1,000,000 three-yearmember of our Board of Directors, a secured promissory note bearingthat is presently outstanding. The note was amended in September 2014, August 2016, September 2017 and September 2018, and presently has a maturity date of September 8, 2019. The note bears interest at 12%the rate of 6% per year, with thirty-fiveannum. Interest only is payable monthly payments of interest commencing on September 29, 2013, and continuing thereafter on the 29th day of each successive month throughout the term of the promissory note. Under the terms of the secured promissory note, the holder received a detachable warrant to purchase 333,333 shares of our common stock at the price of $1.60 per share that expires on August 29, 2015. This promissory note is secured by $3,000,000 in gross accounts receivable. Onuntil the maturity date when one balloon payment of the entire outstanding principal amount plus any accrued and unpaid interest is due.
On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank, thatN.A. The maturity date of this line of credit was extended in September 2017 and in September 2018, and presently it is personally guaranteed by Mr. Dalrymple. Underdue and payable on August 31, 2019 and the terms of the financing agreement previously discussed,maximum amount we granted 800,000 unvested and restricted shares of common stock to Mr. Dalrymple with 100,000 shares vesting upon finalization ofcan borrow under it is $1,750,000. Outstanding principal on the line of credit agreement on September 8, 2014,bears interest at the 30-day London Interbank Offered Rate (“LIBOR”) plus 2%, resulting in an effective rate of 3.57% at December 31, 2017. The line of credit is guaranteed by Mr. Dalrymple and is secured by a first lien interest in certain of his assets. As of December 31, 2017 and 2016, outstanding borrowings under the remaining shares vesting, in 100,000 share increments, quarterly so long as the revolvingline of credit remains in effect.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, as of September 24, 2015,7, 2018, concerning, except as indicated by the footnotes below, (i) each person whom we know beneficially owns more than 5% of our common stock, (ii) each of our directors, (iii) each of our named executive officers, (iv) all of our directors and executive officers as a group, and (v) each of our nominees for election to the Board of Directors. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. Applicable percentage ownership is based on 19,755,88220,265,882 shares of common stock outstanding at September 24, 2015.7, 2018. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of September 24, 2015.7, 2018. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, stock options and warrants referenced in the footnotes below are currently fully vested and exercisable.
Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percent of Class | ||||||
William F. Donovan, M.D. (1) | 4,357,427 | (2) | 21.46% | |||||
Franklin A. Rose, M.D. (1) | 200,000 | (3) | 1.01% | |||||
John Bergeron (1) | 385,000 | (4) | 1.93% | |||||
Jerry Bratton (1) | 1,581,100 | (5) | 7.99% | |||||
Peter L. Dalrymple (1) | 3,020,609 | (6) | 15.04% | |||||
All Directors and named executive officers as a group (5 persons) | 9,344,136 | 45.16% | ||||||
Jeffrey A. Cronk, D.C. (7) | - | 0% |
Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percent of Class | |||||||
William F. Donovan, M.D. (1) | 3,872,427 | (2 | ) | 19.11 | % | ||||
Jeffrey Cronk, D.C.(1) | 85,000 | (3 | ) | 0.42 | % | ||||
John Bergeron (1) | 160,000 | (4 | ) | 0.79 | % | ||||
Jerry Bratton (1) | 1,556,100 | (5 | ) | 7.68 | % | ||||
Peter L. Dalrymple (1) | 2,987,276 | (6 | ) | 14.74 | % | ||||
All Directors and named executive officers as a group (5 persons) | 8,660,803 | 42.74 | % |
(1) | The named individual is one of our executive officers or directors. His address is c/o Spine Injury Solutions, Inc., 5225 Katy Freeway, Suite 600, Houston, Texas 77007. |
(2) | Includes 557,486 shares of common stock held indirectly through NorthShore Orthopedics, Assoc. (of which Dr. Donovan is the sole shareholder and has voting and investment authority) and | |||
(3) | Includes 85,000 shares of common |
(4) |
Includes 160,000 shares of common |
(5) | Includes 1,556,100 shares of common stock held by Mr. Bratton, of which Mr. Bratton has sole voting and investment authority of 320,000 shares and shared voting and investment authority with his spouse of 1,236,100 shares. |
(6) | Includes (a) securities held individually by Peter L. Dalrymple, including (i) |
Securities Authorized for Issuance under Equity Compensation Plans
The following table summarizes our equity compensation plan information as of December 31, 2014:
Plan Category | (a) Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights ($) | (c) Common Shares Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
Equity compensation plans approved by our stockholders | -- | -- | -- | |||||||||
Equity compensation plans not approved by our stockholders (1) | 550,000 | 0.77 | ||||||||||
150,000 | 1.15 | |||||||||||
550,000 | 0.54 | -- | ||||||||||
Total | 1,250,000 | 0.72 | -- |
Plan Category | (a) Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights ($) | (c) Common Shares Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | ||||||||||
Equity compensation plans approved by our stockholders | -- | -- | -- | ||||||||||
Equity compensation plans not approved by security holders | 20,000 | (1 | ) | 0.40 | -- | ||||||||
Total | 20,000 | 0.40 | -- |
(1) | Consists of common shares to be issued upon exercise of outstanding stock |
The Board of Directors has selected Ham, Langston & Brezina, LLP as our independent registered public accounting firm for the current fiscal year. Ham, Langston & Brezina, LLP has served as our independent registered public accounting firm continuously since September 2010. The Board of Directors wishes to obtain from the stockholders a ratification of the Board’s action in selecting Ham, Langston & Brezina, LLP for the fiscal year ending December 31, 2015.2018. Such ratification requires the affirmative vote of a majority of the shares of common stock present or represented by proxy and entitled to vote at the Annual Meeting. We do not anticipate a representative from Ham, Langston & Brezina, LLP to be present at the meeting.
Although not required by law or otherwise, the selection is being submitted to the stockholders for their approval as a matter of good corporate practice. In the event the selection of Ham, Langston & Brezina, LLP as our independent registered public accounting firm is not ratified by the stockholders, the adverse vote will be considered as a direction to the Board of Directors to reconsider whether or not to retain that firm as independent registered public accounting firm for the fiscal year ending December 31, 2015.2018. Even if the selection is ratified, the Board of Directors in its discretion may direct the selection of a different independent accounting firm at any time during or after the year if it determines that such a change would be in the best interests of us and our stockholders.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”“FOR” RATIFICATION OF THE SELECTION OFHAM, LANGSTON & BREZINA, LLPAS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THEFISCAL YEAR ENDING DECEMBER 31, 2015.
Disclosure about Fees
The following table sets forth the fees paid or accrued by us for the audit and other services provided or to be provided by our principal independent accountants during the years ended December 31, 20142017 and 2013.
2014 | 2013 | |||||||
Audit Fees(1) | $ | 56,210 | $ | 62,317 | ||||
Audit Related Fees(2) | - | - | ||||||
Tax Fees(3) | - | - | ||||||
All Other Fees | - | - | ||||||
Total Fees | $ | 56,210 | $ | 62,317 |
2017 | 2016 | |||||||
Audit Fees(1) | $ | 64,000 | $ | 67,000 | ||||
Audit Related Fees(2) | - | - | ||||||
Tax Fees(3) | - | - | ||||||
Total Fees | $ | 64,000 | $ | 67,000 |
(1) | Audit Fees: This category represents the aggregate fees billed for professional services rendered by the principal independent accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years. |
(2) | Audit Related Fees: This category consists of the aggregate fees billed for assurance and related services by the principal independent accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” |
(3) | Tax Fees: This category consists of the aggregate fees billed for professional services rendered by the principal independent accountant for tax compliance, tax advice, and tax planning. |
Pre-Approval of Audit and Non-Audit Services
All above audit services, audit-related services and tax services, for the fiscal years ended December 31, 20142017 and 2013,2016, were pre-approved by our Audit Committee, which concluded that the provision of such services was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of all services performed by the outside auditors.
INTERESTS OF CERTAIN PERSONS IN OPPOSITION TO
None of the persons who have served as our executive officers or directors since the beginning of our last fiscal year, or any associates of such persons, have any substantial interest, direct or indirect, in any of the proposals set forth herein, other than elections to office.
OTHER MATTERS WHICH MAY BE PRESENTED FOR ACTION AT THE MEETING
The Board of Directors does not intend to present for action at this Annual Meeting any matter other than those specifically set forth in the Notice of Annual Meeting. If any other matter is properly presented for action at the Annual Meeting, it is the intention of persons named in the proxy to vote thereon in accordance with their judgment pursuant to the discretionary authority conferred by the proxy.
PROPOSALS FOR 2016 2019ANNUAL MEETING
Under SEC regulations, any stockholder desiring to make a proposal pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, to be acted upon at the 20162019 Annual Meeting of Stockholders must present the proposal to us at our principal executive offices at 5225 Katy Freeway, Suite 600, Houston, Texas, 77007, Attn: William Donovan, M.D, by June 11, 2016May 22, 2018 for the proposal to be eligible for inclusion in our proxy statement. Notice of a stockholder proposal submitted outside the processes of Rule 14a-8 for the 20162018 Annual Meeting of Stockholders will be considered untimely unless received by us no later than 45 days before the date on which we first sent our proxy materials for this year’s Annual Meeting.
MISCELLANEOUS
We file annual, quarterly and current reports, proxy statements, and registration statements with the SEC. These filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with the SEC without charge at the public reference facility maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
By Order of the Board of Directors, | |
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William F. Donovan, M.D. | |
Dated: | Chief Executive Officer and |
PROXY
SPINE INJURY SOLUTIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 10, 2015
The undersigned hereby appoints William F. Donovan, M.D. and John Bergeron, and each of them as the true and lawful attorney, agent and proxy of the undersigned, with full power of substitution, to represent and to vote all shares of common stock of Spine Injury Solutions, Inc. (formerly Spine Pain Management, Inc.) (the “Company”) held of record by the undersigned on September 24, 2015,7, 2018, at the Annual Meeting of Stockholders to be held on November 10, 2015,October 30, 2018, at 2:3:00 p.m. (Central Time) at 5225 Katy Freeway, Suite 600, Houston, Texas 77007, and at any adjournments thereof. Any and all other proxies heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR
THE NOMINEES LISTED IN NUMBER 1, FOR THE RATIFICATION IN NUMBER 2,AND FOR THE APPROVAL IN NUMBER1. ELECTION OF DIRECTORS OF THE COMPANY. (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH, OR OTHERWISE STRIKE, THAT NOMINEE'S NAME IN THE LIST BELOW.)
☐ FOR all nominees listed below except as marked to the contrary. | ☐ WITHHOLD authority to vote for all nominees below. |
William F. Donovan, M.D.
John Bergeron
Jerry Bratton
Peter L. Dalrymple
Jeffrey A. Cronk, D.C.
2. PROPOSAL TO RATIFY THE SELECTION OF HAM, LANGSTONHam, Langston & BREZINA,Brezina, LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMindependent registered public accounting firm FOR THE FISCAL YEAR ENDING DECEMBER 31, 2015.
☐ FOR o☐ AGAINST o☐ ABSTAIN
3. IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
☐ FOR o☐ AGAINST o☐ ABSTAIN
Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a partnership, please sign in partnership name by authorized person. If a corporation or other business entity, please sign in full corporate name by President or other authorized officer.
NUMBER OF SHARES OWNED _______________ | SIGNATURE: ___________________________________________ PRINTED NAME: _______________________________________ DATE: ________________________________________________ |
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held |
The Proxy Statement, form of proxy card and Annual Report are available at: www.spineinjurysolutions.com |