UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
Preliminary Proxy Statement |
☐ | Confidential, |
Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under |
ONCOSEC MEDICAL INCORPORATED |
(Name of Registrant as Specified In Its Charter) |
N/A |
(Name of Person(s) Filing Proxy Statement, if |
Payment of Filing Fee (Check all boxes that apply):
☒ | No fee |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
ONCOSEC MEDICAL INCORPORATED
24 NorthN. Main Street
Pennington, NJ 08534
To the Stockholders of OncoSec Medical Incorporated:
You are cordially invited to attend the Special Meeting of Stockholders (the “Meeting”) of OncoSec Medical Incorporated 2022 Annual Meeting of Stockholders,(the “Company”) to be held virtually on July 12,December 30, 2022 at 9:00 a.m., Eastern Time. The Annual Meeting can be accessed by visiting https://virtualshareholdermeeting.com/ONCS2022,www.virtualshareholdermeeting.com/ONCS2022SM, where you will be able to listen to the meetingMeeting live, submit questions and vote online. The Notice of AnnualSpecial Meeting of Stockholders and Proxy Statement, which describe the formal business to be conducted at the Annual Meeting, follow this letter. At the Annual Meeting, theour stockholders will be asked to (i) re-elect six directorsapprove an amendment to our Articles of Incorporation, as amended to date, to increase the Company’s Boardtotal number of Directors, eachshares of common stock, par value $0.0001 per share, authorized for issuance thereunder from 4,545,455 shares to serve until our next annual meeting of stockholders or until his or her respective successor is duly elected100,000,000 shares, and qualified, (ii) ratify the appointment of Mayer Hoffman McCann P.C. as the Company’s independent registered public accounting firm for our fiscal year ending July 31, 2022, and (iii) transact suchto consider any other business as may properly come before the Annual Meeting andor any postponement or adjournment or postponement thereof.
We are pleased to take advantageIn accordance with the rules and regulations of the Securities and Exchange Commission, (“SEC”) rules that allow us to furnishbeginning on or about December 12, 2022, we are mailing a full set of our proxy materials consistingto all of the Noticeour stockholders of Annual Meeting, the Proxy Statement,record and a Proxy Card, and our Annual Report on Form 10-K via the Internet. On May 31, 2022, we made available to stockholdersbeneficial owners as of the record datedate. Enclosed is our Proxy Statement that describes the matter to be presented to stockholders at the Meeting, as well as a notice with instructions on how to access our Annual Meeting materials and vote via the Internet, or by mail or telephone. The notice also contains instructions on how to request a paper copy of our proxy materials and our Annual Report.card.
Your vote is very important to us. Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. As an alternative to voting at the Annual Meeting, you may vote via the internet,Internet, by telephone, or by mail. If you are a registered holder, that is, a stockholder who holds shares of our common stock in your own name, you may also vote by mail by completing, dating and signing the enclosed proxy card and returning it in the enclosed, postage-paid envelope. If you decide to attend the virtual Meeting, you will also be able to submit your votes during the Meeting through the designated website, even if you receive a paper proxy card inhave previously submitted your proxy. Voting at the mail, by mailing the completed proxy card.Meeting will supersede any votes that you have previously cast. Voting by any of these methods will ensure your representation at the Annual Meeting.
TheOur Board of Directors has unanimously approved the proposal set forth in the Proxy Statement and we recommend that you vote in favor of each such proposal.
Our Board of Directors and management look forward to seeing you at the Annual Meeting.
Sincerely, | |
Robert H. Arch | |
Chief Executive Officer and President |
May 31,December [__] , 2022
ONCOSEC MEDICAL INCORPORATED
24 NorthN. Main Street
Pennington, NJ 08534
(855) 662-6732
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of OncoSec Medical Incorporated:
The 2022 AnnualA Special Meeting of Stockholders (the “Annual Meeting”“Meeting”) of OncoSec Medical Incorporated (the “Company,” “OncoSec,” “we,” “us” or “our”) will be held virtually on July 12,December 30, 2022 at 9:00 a.m., Eastern Time, for the following purposes, which are further described in the accompanying proxy statement (the “Proxy Statement”):
(1) to elect six directors to the Company’s Board of Directors, each to serve until our next annual meeting of stockholders or until his or her respective successor is duly elected and qualified;
(1) | approve an amendment to our Articles of Incorporation, as amended to date, to increase the total number of shares of common stock, par value $0.0001 per share, authorized for issuance thereunder from 4,545,455 shares to 100,000,000 shares; and |
(2) to ratify the appointment of Mayer Hoffman McCann P.C. as the Company’s independent registered public accounting firm for our fiscal year ending July 31, 2022; and
(3) to transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
(2) | To consider any other business as may properly come before the Meeting or any postponement or adjournments thereof. |
TheOur Board of Directors recommends a vote “FOR” each of the director nominees named in the accompanying Proxy Statement, and “FOR” Proposals 2.Proposal 1.
Only stockholders of record at the close of business on May 18,December 1, 2022, the record date, are entitled to receive notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. OnIn accordance with the rules and regulations of the Securities and Exchange Commission, beginning on or about May 31,December 12, 2022, we expect to send our stockholders (other than those stockholders who previously requested paper delivery)are mailing a Noticefull set of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials includingto all of our stockholders of record and beneficial owners as of the Proxy Statement and our Annual Report on Form 10-K for our fiscal year ended July 31, 2021.record date. Whether or not you expect to attend the Annual Meeting, please vote as promptly as possible by following the instructions in the Notice of Internet Availability of Proxy Materials orincluded on the proxy card you receive in the mail.
By order of the Board of Directors, | |
Robert H. Arch | |
Chief Executive Officer and President |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUALSPECIAL MEETING OF STOCKHOLDERS TO BE HELD VIRTUALLY ON JULY 12,DECEMBER 30, 2022: WHETHER OR NOT YOU PLAN TO ATTEND THE NOTICE OFMEETING, WE ASK YOU TO VOTE BY TELEPHONE, MAIL, FAX OR ON THE ANNUAL MEETING OF STOCKHOLDERS ANDINTERNET USING THE INSTRUCTIONS ON THE PROXY STATEMENT ARE AVAILABLE AT WWW.PROXYVOTE.COM.CARD.
Pennington, NJ
May 31,
December [__] , 2022
TABLE OF CONTENTS
ONCOSEC MEDICAL INCORPORATED
24 NorthN. Main Street
Pennington, NJ 08534
(855) 662-6732
PROXY STATEMENT
2022 ANNUAL
SPECIAL MEETING OF STOCKHOLDERS
This proxy statement (“Proxy Statement”) is being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors” or the “Board”) of OncoSec Medical Incorporated, a Nevada corporation (the “Company,” “OncoSec,” “we,” “us” or “our”), for use at our 2022 AnnualSpecial Meeting of Stockholders (the “Annual Meeting”“Meeting”) to be held virtually on July 12,December 30, 2022 at 9:00 a.m., Eastern Time, and at any adjournments or postponements thereof. Stockholders are being asked to vote at the Annual Meeting on the following proposals: (1)(i) to approve an amendment to our Articles of Incorporation, as amended to date (the “Articles”), to increase the re-electiontotal number of six directorsshares of common stock, par value $0.0001 per share (“Common Stock”), authorized for issuance thereunder from 4,545,455 shares to the Board; (2)100,000,000 shares (the “Authorized Share Increase”), and (ii) to ratify the appointment of Mayer Hoffman McCann P.C. as the Company’s independent registered public accounting firm for our fiscal year ending July 31, 2022; and (3) suchconsider any other business as may properly come before the Annual Meeting.Meeting or any postponement or adjournment thereof. This Proxy Statement summarizes the information you need to know in order to vote on these proposals in an informed manner.
Delivery of Proxy Materials
PursuantYour vote is very important to rules adopted by the United States Securities and Exchange Commission (“SEC”), we have elected to provide access on the internet to our proxy materials, including this Proxy Statement and our Annual Report for our fiscal year ended July 31, 2021 (“Fiscal Year 2021,” and such annual report, the “Annual Report”). In addition,us. Accordingly, beginning on or about May 31,December 12, 2022, we are mailing a Notice of Internet Availability of Proxy Materials to all of our stockholders of record and beneficial owners as of the record date for the Annual Meeting. We will mail a full set of our proxy materials to thoseall of our stockholders that previously requested paper delivery.of record as of December 1, 2022 (the “Record Date”) and beneficial owners as of the Record Date.
Q: | When is the |
A. | The |
Q: | Where will the |
A. | The |
Q: | What is the purpose of the |
A. | At the |
Q: | How many votes do I have? |
A. | On each matter to be voted upon, you have one vote for each share of |
Q: | Who is entitled to vote at |
A. | Only stockholders of record at the close of business on |
Stockholders of Record: Shares Registered in Your Name. If on the Record Date your shares were registered directly in your name with our transfer agent, Nevada Agency and Transfer Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the | |
Beneficial Owner: Shares Registered in the Name of a Broker, Bank, Custodian or Other Nominee. If on the Record Date your shares were held in an account at a brokerage firm, bank, custodian or other nominee, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the | |
Q: | Are dissenters’ rights available with respect to any of the matters to be voted on at the Meeting? |
A. | Dissenters’ rights are not available with respect to any of the matters to be voted on at the Meeting. |
Q: | What if I have technical difficulties or trouble accessing the virtual |
A. | We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual |
Q: | Why is the |
A. | By conducting our |
Q: | How may I vote my shares at the virtual |
A. | If, as of the Record Date, you hold shares of |
Q: | How do I vote? |
A. | Whether you hold shares directly as the stockholder of record or indirectly as the beneficial owner of shares held for you by a broker or other nominee (i.e., in “street name”), you may direct your vote without attending the |
By Internet — If you have internet access, you may authorize your proxy from any location in the world as directed in | |
By Telephone — | |
By Mail — You may authorize your proxy by signing your proxy card and mailing it in the enclosed, postage-prepaid and addressed envelope. For shares you hold in street name, you may sign the voting instruction form included by your broker or nominee and mail it in the envelope provided. | |
Q: | What is a proxy? |
A. | A proxy is a person you appoint to vote your shares of our |
Q: | How will my shares be voted if I vote by proxy? |
Your proxy will be voted according to the instructions you provide. If you complete and submit your proxy but do not otherwise provide instructions on how to vote your shares, your shares will be voted | |
Q: | Can I change my vote after I return my proxy card? |
A. | Yes. You may revoke your proxy at any time before the final vote at the |
You may send a written notice that you are revoking your proxy to our Corporate Secretary, Robert J. DelAversano at 24 North Main Street Pennington, NJ 08534 (so long as we receive such notice no later than the close of business on the day before the | |
You may submit a later dated proxy card or vote again via the | |
You may attend the | |
If your shares are held by your broker, bank, custodian or other nominee, you should follow the instructions provided by such broker, bank, custodian or other nominee. | |
Q: | Is my vote confidential? |
A. | Yes. All votes remain confidential, unless you provide otherwise. |
Q: | How are votes counted? |
A. | Before the |
Abstentions, and Broker non-votes occur when shares are held indirectly through a broker, bank or other intermediary on behalf of a beneficial owner (referred to as held in “street name”) and the broker submits a proxy but does not vote for a matter because the broker has not received voting instructions from the beneficial owner and (i) the broker does not have discretionary voting authority on the matter or (ii) the broker chooses not to vote on a matter for which it has discretionary voting authority. Brokers are permitted to exercise discretionary voting authority only on “routine” matters Abstentions and broker non-votes (if any) are not counted in determining the number of shares voted “for” or “against” the Authorized Share Increase. However,
The |
Q: | What constitutes a quorum at the |
A. | In accordance with Nevada law (the law under which we are incorporated) and our |
If a quorum is not present at the | |
Q: | What vote is required to |
A. | The affirmative vote of a |
Q: | What percentage of our outstanding |
A. | As of |
Q: | How can I find out the results of the voting at the |
A. | We will announce preliminary voting results at the |
5 |
Important Notice Regarding the Availability of Proxy Materials for the
Virtual Annual Meeting of Stockholders to Be Held on July 12,December 30, 2022
The Notice of AnnualSpecial Meeting of Stockholders and this Proxy Statement and the Annual Report are available at www.proxyvote.com.www.proxyvote.com.
You are encouraged to access and review all of the important information contained in the proxy materials before voting.
Who Can Vote; Outstanding Shares
The Record Date for the Annual Meeting is May 18,December 1, 2022. All holders of record of our common stockCommon Stock on the Record Date are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.
As of the Record Date for the Annual Meeting, there were 39,365,5432,970,515 shares of our common stockCommon Stock issued and outstanding.
Voting Information
Effect of Not Providing Voting Instructions; Broker Non-Votes
If you are a stockholder of record and you submit a valid proxy that is not revoked before your shares are voted at the Annual Meeting and that does not provide voting instructions with respect to your shares, all shares represented by your proxy will be voted in accordance with the recommendation of the Board of Directors on each proposal to be presented at the Annual Meeting, as described in this Proxy Statement.
If you hold your shares in “street name” (that is, your shares are held by a broker or other nominee on your behalf as the beneficial owner, but are not held of record in your name), it is critical that you provide a completed voting instruction form to your broker or other nominee if you want your personal vote to count on Proposal 1 (election(approval of directors)the Authorized Share Increase). This proposal constitutes a “non-routine” matter on which a broker or other nominee is not entitled to vote shares held for a beneficial owner without receiving specific voting instructions from the beneficial owner. As a result,However, if you hold your shares in street name and you do not instruct your broker onor other nominee as to how you would like to vote, on Proposal 1, no vote will be cast on this proposal on your behalf and a “broker non-vote” will occur. Your broker or other nominee will however, have discretion to vote such uninstructed shares on Proposal 2 (ratification1 (approval of appointment of independent registered public accounting firm),the Authorized Share Increase) because this proposal constitutes a “routine” matter on which a broker or other nominee is entitled to vote shares held for a beneficial owner even without receiving voting instructions from the beneficial owner.
Tabulation of Votes
The inspector of elections of the Annual Meeting will tabulate the votes of our stockholders. All shares entitled to vote and represented by properly submitted proxies (including those submitted via the internet,Internet, by telephone and by mail) that are received before the voting deadlines described under “How to Cast or Revoke Your Vote—Voting Deadlines” below and are not revoked or superseded will be voted at the Annual Meeting in accordance with the instructions indicated on the proxies. If such a properly submitted and unrevoked proxy does not provide voting instructions on a proposal, then the shares represented by the proxy will be voted on the proposal at the Annual Meeting by the proxy holders named in the proxy in accordance with the recommendations of our Board, as described in this Proxy Statement. If the Annual Meeting is adjourned or postponed, properly submitted and unrevoked proxies will remain effective and will be voted at the adjourned or postponed Annual Meeting, and stockholders will retain the right to change or revoke any such proxy until it is actually voted at the adjourned or postponed Annual Meeting.
How to Cast or Revoke Your Vote
You may vote virtually by attending the Annual Meeting at www.virtualshareholdermeeting.com/ONCS2022,ONCS2022SM, or you may vote by submitting a proxy.
Stockholders of Record
You are a stockholder of record if your shares are registered directly in your name with Nevada Agency and Transfer Company, our transfer agent. If you were a stockholder of record at the close of business on the record dateRecord Date for the Annual Meeting, you may vote by submitting your proxy via the internet,Internet, by telephone or through the mail. To vote via the internet,Internet, follow the instructions in the Notice of Internet Availability of Proxy Materials orand go to the internetInternet address stated on your proxy card. To vote by telephone, call the number stated on your proxy card. If you have received a proxy card in the mail and wish to vote by mail, simply mark your proxy card, date and sign it, and return it in the postage-prepaid envelope. If you do not have the postage-prepaid envelope, please mail your completed proxy card to the following address: Vote Processing,OncoSec Medical Incorporated, c/o Broadridge,Proxy Services, 51 Mercedes Way, Edgewood, New York 11717. If you receive only the Notice of Internet Availability of Proxy Materials and would like to vote by mail, follow the procedures described in such notice to request a paper proxy card to submit your vote by mail.
As a stockholder of record, you are entitled to revoke your proxy at any time before it is voted at the Annual Meeting. A proxy may be revoked by submitting a later-dated vote in person at the Annual Meeting, via the internet,Internet, by telephone or by mail, or by delivering to us a written notice of revocation. A later-dated proxy may be submitted by any of the voting methods described above, and a written notice of revocation may be sent to OncoSec Medical Incorporated, 24 North Main Street, Pennington, NJ 08534.
Beneficial Owners
You are a beneficial owner of shares held in street name if your shares are held by a broker or other nominee and not in your name. As a beneficial owner, you have the right to direct your broker or other nominee on how to vote the shares held in your account as of the record dateRecord Date for the Annual Meeting. You should receive a voting instruction form from the broker or other nominee that holds your shares, and you should follow these instructions in order to direct your broker or other nominee on how to vote your shares. The availability of various voting methods for beneficial owners, including voting via the internet,Internet, by telephone or by mail, will depend on the voting processes of each broker or other nominee.
Beneficial owners of shares are held in street name should follow the instructions provided by their broker or other nominee regarding how to revoke a previously submitted proxy.
Voting Deadlines
The internetInternet and telephone voting facilities will close at 11:59 p.m., Eastern Time, on July 11,December 29, 2022, the day before the Annual Meeting. Stockholders who submit a proxy via the internetInternet should be aware that they may incur costs to access the internet,Internet, such as usage charges from telephone companies or internetInternet service providers, and that these costs must be borne by such stockholders. Stockholders who submit a proxy via the internetInternet or by telephone need not return a proxy card or the form provided by your broker or other nominee.
YOUR VOTE IS VERY IMPORTANT.
We recommend that you promptly submit your proxy, even if you plan to attend the virtual Annual Meeting.
Attending the Annual Meeting
All stockholders that owned our common stockCommon Stock at the close of business on the Record Date for the Annual Meeting, or their duly appointed proxies, may attend the virtual Annual Meeting. Whether or not you plan to attend our virtual Annual Meeting, we encourage you to submit your proxy or voting instruction form as soon as possible. Submitting your vote prior to the Annual Meeting will not affect your right to vote at the Annual Meeting if you decide to attend; however, your attendance at the Annual Meeting after having submitted a valid proxy will not in and of itself constitute a revocation of your proxy. You will be able to revoke a previously submitted proxy at the Annual Meeting, by visiting https://virtualshareholdermeeting.com/ONCS2022,www.virtualshareholdermeeting.com/ONCS2022SM, where you will be able to listen to the meetingMeeting live, submit questions and vote online.
Proxy Solicitation Costs
The accompanying proxy is solicited on behalf of theour Board. We will pay for the cost of preparing, assembling, printing and mailing the proxy materials for the Annual Meeting to our stockholders, as well as the cost of soliciting proxies for the Annual Meeting. We may request brokers and other nominees holding shares in their names that are beneficially owned by others to solicit proxies for the Annual Meeting from these beneficial owners, and we will reimburse these brokers and other nominees for their reasonable out-of-pocket expenses regarding these solicitations. Our directors, officers and other employees may supplement the original solicitation of proxies through the use of the mail, by telephone, facsimile, e-mail or personal solicitation. We will pay no additional compensation to our directors, officers and other employees for these activities. We have not engaged employees for the specific purpose of soliciting proxies or a proxy solicitation firm to assist us in soliciting proxies, but we may elect to engage and pay the cost of such employees or such a proxy solicitation firm at any time.
The Company’s Annual ReportInterest of Certain Persons in or Opposition to Matters to Be Acted Upon
A copyNo officer or director of our Annual Report on Form 10-K for the year ended July 31, 2021,Company has been posted on the Internet along with this Proxy Statement, each of which is accessible by following the instructionsany substantial interest in the Noticematters to be acted upon, other than as a result of Internet Availabilityhis or her role as an officer or director of Proxy Materials. The Annual Report on Form 10-K is not incorporated into this Proxy Statement and is not considered proxy-soliciting material.us, or as a stockholder of us.
We filed our Annual Report on Form 10-K for Fiscal Year 2021 with the SEC on October 29, 2021. Our Annual Report on Form 10-K is available through our website, www.oncosec.com. We will also mail without charge, upon written request, a copy of our Annual Report on Form 10-K for the year ended December 31, 2021, excluding exhibits unless requested. The reference to our website address above and throughout this Proxy Statement does not constitute incorporation by reference of the information contained at or available through our website. Any such requests should be directed to us by writing to 24 North Main Street, Pennington, NJ 08534, Attn: Secretary, or by calling 855-662-6732.
ELECTION
APPROVAL OF DIRECTORSTHE AUTHORIZED SHARE INCREASE
General
At the Annual Meeting, stockholders will be askedOur Articles currently authorize us to elect six directors each to serve until our next annual meetingissue 4,545,455 shares of stockholders or until his or her respective successor is elected and qualified. Each of the nominees is currently a director on the Board.Common Stock. Our Board of Directors has determined to nominate Linda Shi, M.D., Ph.D., James M. DeMesa, M.D., Joon Kim, Herbert Kim Lyerly, M.D., Kevin R. Smith,approved, and Chao Zhou for re-electionis seeking stockholder approval of, an amendment to our BoardArticles (the “Amendment”) to increase the total number of Directors.shares of Common Stock authorized for issuance thereunder from 4,545,455 shares to 100,000,000.
If the Authorized Share Increase is approved by our stockholders, we intend to file the Amendment with the Secretary of State of Nevada, in substantially in the form of Exhibit A hereto, with the Secretary of State of Nevada as soon as practicable following the approval in order to effectuate the Authorized Share Increase.
The Amendment is not intended to modify the rights of existing stockholders in any material respect. The additional shares of Common Stock to be authorized pursuant to the Amendment would have rights identical to the currently outstanding Common Stock of the Company. Except for certain limited participation, veto and anti-dilution rights of a limited number of our shareholders, as previously disclosed in our filings with the SEC, our stockholders do not currently have any preemptive or similar rights to subscribe for or purchase any additional shares of Common Stock that may be issued in the future; therefore, future issuances of Common Stock may, depending on the circumstances, have a dilutive effect on the earnings per share, voting power and other interests of the existing stockholders.
On February 7, 2020, the Company closed (the “Closing”) a strategic transaction (the “CGP Transaction”) with Grand Decade Developments Limited, a direct, wholly-owned subsidiary of Grand Pharmaceutical Group Limited (formerly China Grand Pharmaceutical & Healthcare Holdings Ltd.), a company formed under the laws of the British Virgin Islands (“CGP”), and its affiliate, Sirtex Medical US Holdings, Inc., a Delaware corporation (“Sirtex”).
In connection with the Closing,registered public offering of our securities that closed on December 1, 2022 (the “Offering”), and as a condition to closing thereof, investors in the CompanyOffering entered into Voting Agreements, wherein they agreed to vote all shares of Common Stock beneficially owned in favor of the Authorized Share Increase. As a Stockholders Agreement (the “Stockholders Agreements”) with eachresult, we anticipate that such investors will vote in favor of CGP and Sirtex, pursuant to which, among other things, CGP exercised its option to nominate two (2) individuals to the Board and Sirtex exercised its option to nominate one (1) director to the Board. Pursuant to the Stockholders Agreements, CGP nominated Yuhang Zhao, Ph.D., and Chao Zhou to the Company’s Board, and Sirtex nominated Kevin R. Smith to the Company’s Board. On December 15, 2021, Dr. Zhao resigned from the Board and CGP exercised its option pursuant to its Stockholders Agreement and appointed Dr. Shi as her replacement.this proposal.
On August 31, 2018, OncoSecOur Board of Directors has unanimously determined that the Authorized Share Increase is advisable and Alpha Holdings, Inc. (“Alpha”) entered into a stock purchase agreement (the “Alpha Stock Purchase Agreement”), pursuant to which OncoSec agreed to issue and sell to Alpha shares of its common stock. Pursuant toin the Alpha Stock Purchase Agreement, Alpha was given the option to nominate one individual to the Company’s Board. Mr. Kim was appointed to the Board in accordance with the termsbest interests of the Alpha Stock Purchase Agreement in conjunction withCompany and our stockholders, and recommends that our stockholders approve the closing of the transaction in December 2018.
Other than as described above, there is no arrangement or understanding between any nominee and any other person or persons pursuant to which any nominee was or is to be selected as a director or director nominee of the Company. There are no family relationships between any of the director nominees named below or our executive officers.Authorized Share Increase.
Director NomineesReasons for Increase
As of the Record Date, there were only 34,272 shares of Common Stock available for issuance under our Articles, taking into consideration all shares of Common Stock that were issued and outstanding as of the Record Date, as well as those shares of Common Stock that were reserved for issuance under our equity incentive plans and for the exercise or conversion of derivative securities exercisable for or convertible into shares of our Common Stock. This number does not include up to an additional 360,769 shares of Common Stock issuable upon conversion of that Secured Convertible Promissory Note (the “Note”) issued by the Company on November 25, 2022, the conversion of which is conditioned upon approval and implementation of the Authorized Share Increase. Our Board of Directors believes that it is prudent to increase the authorized number of shares of Common Stock in order to maintain a reserve of shares available for immediate issuance to meet business needs, such as a strategic acquisition opportunity or equity offering and/or equity compensation to our officers, directors and employees, promptly as they arise, as well as to allow for the discretionary conversion of the Note by the holder thereof.
All authorized but unissued shares of Common Stock will be available for issuance from time to time for any proper purpose approved by our Board of Directors (including issuances in connection with issuances to raise capital, effect acquisitions or stock-based employee benefit plans), without further vote of the stockholders, except as required under applicable law or the Nasdaq Marketplace Rules. Although at present, other than as it relates to our rights and obligations under certain financing instruments, we have no current plans, arrangements or understandings to issue additional shares of Common Stock that would be made available for issuance upon effectiveness of the Authorized Share Increase, such additional shares may be used by us for various purposes in the future without further stockholder approval. Such purposes may include, among other things:
● | the sale of shares to raise additional capital; | |
● | the issuance of Common Stock to satisfy our obligations under certain financing instruments; | |
● | the issuance of equity incentives to our employees, officers or directors; | |
● | establishment of strategic relationships with other companies and suppliers; and | |
● | strategic transactions. |
There are currently no arrangements, agreements or understandings for the issuance of the additional shares of authorized Common Stock except for issuances in the ordinary course of business, including upon conversion or exercise of outstanding derivative securities and pursuant to certain financing instruments, and to satisfy our obligations in the event that those shareholders with participation, veto and anti-dilution rights elect to exercise such rights. The Board of Directors does not presently intend to seek further stockholder approval of any particular issuance of shares unless such approval is required by law or the Nasdaq Marketplace Rules.
Anti-Takeover Effects
The Nominating and Corporate Governance Committee of our Board has recommended, and our Board has nominated eachproposed Authorized Share Increase could, under certain circumstances, have an anti-takeover effect or delay or prevent a change in control of the nominees named below for electionCompany by providing the Company with the capability to engage in actions that would be dilutive to a potential acquirer, to pursue alternative transactions, or to otherwise increase the potential cost to acquire control of the Company. The Company currently has no intent to employ the additional unissued authorized shares of Common Stock as an anti-takeover device. However, the proposed Authorized Share Increase, if approved by our directorsstockholders, may have the effect of discouraging future unsolicited takeover attempts. The Board is not currently aware of any such unsolicited attempt to take control of the Company, and would act in the best interest of stockholders if any such attempt is made in the future.
Effective Time of the Amendment
If our stockholders approve the Authorized Share Increase at the Meeting, we will file the Amendment with the office of the Secretary of State of Nevada as soon as practicable following the Annual Meeting. Each nominee has consented to being named in this Proxy Statement as a director nomineeUpon approval and has agreed to serve as a director if elected.following such filing with the Secretary of State of Nevada, the Amendment will become effective on the date it is filed.
If any nominee becomes unavailable to serve as director, it is intended that votes will be cast, pursuant to properly submitted proxies, for such substitute nominee(s) asVote Required and Recommendation of the Board may select.
The information below sets forth the principal occupation or employment and principal businessaffirmative (“FOR”) vote of the employer, if any,holders of each director nominee, as well as his or her position(s)a majority of the issue and tenure withoutstanding shares of the Company age, other directorships and other business experience and qualifications. In addition,as of the information below describes each nominee’s specific experience, qualifications, attributes and skills that led our Board andRecord Date is required to approve the Nominating and Corporate Governance Committee to nominate these nominees for re-election as directors. The Board and Nominating and Corporate Governance Committee believe these nominees collectively provide a diverse range of perspectives and business acumen to fully engage each other and management in addressing the Company’s needs.Authorized Share Increase.
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Dr. Linda Shi, M.D., Ph.D., isAbstentions and broker non-votes (if any) are not counted in determining the deputy presidentnumber of shares voted “for” or “against” the Authorized Share Increase. However, because we need to obtain the affirmative vote of a majority of shares of our Common Stock issued and Chief Medical officeroutstanding as of Grand Pharma (China) Co. Ltd. (Grand Pharma),the Record Date to approve the Authorized Share Increase, abstentions and broker non-votes (if any) will be counted as well as an Executive Director of Grand Pharmaceutical Group Limited, a publicly listed company in Hong Kong. Priorentitled to joining Grand Pharma in 2019, Dr. Shi wasvote and will, therefore, have the EU Regulatory Leader in the Global Regulatory Affairs (GRA) for Neuroscience at Janssen R&D in Belgium for more than 12 years.
Dr. Shi has over 30 years of clinical and research experience in academic settings and the pharmaceutical industry, with significant experience working with global multifunctional matrixed teams to drive forward complex projects. She led various applications for clinical trials (Clinical Trial Applications (CTA) and Investigational New Drug Applications (IND)) across Europe and in the United States, particularly in relation to strategic assessments of first-in-human clinical trials with innovative research paths. Dr. Shi obtained her M.D. in China and also a Ph.D. in Medical Sciences from Vrije Universiteit Brussel. She has been appointedsame effect as a guest professor and visiting fellow in various universities worldwide. Dr. Shi’s extensive experience and expertise in the pharmaceutical industry are the primary qualifications the Board considered in nominating her as a director of the Company.vote “against” this proposal.
James M. DeMesa, M.D., has served on our Board since February 2011. Since March 2017, Dr. DeMesa has served as President and CEO, and as a director, of Emerald Health Pharmaceuticals Inc., a pharmaceutical development company, and a director of Induce Biologics, a regenerative medicine company. In 2008, Dr. DeMesa retired from his role as President, Chief Executive Officer and a director of Migenix Inc., a publicly traded biotechnology company. From 1997 to 2001, he was President, Chief Executive Officer and a director of GenSci Regeneration Sciences Inc., (now part of Integra LifeSciences, NASD: IART), a publicly-traded biotechnology company. From 1992 to 1997, Dr. DeMesa was Vice President, Medical and Regulatory Affairs at Biodynamics International, Inc. (now part of RTI Surgical, NASD: RTIX), a surgical implant company, and from 1989 to 1992 he was Vice President, Medical and Regulatory Affairs of Bentley Pharmaceuticals (now part of Teva Pharmaceuticals), a multinational pharmaceutical company. Dr. DeMesa is a co-founder of CommGeniX, a medical communications company, and MedXcel, a medical education company. Dr. DeMesa was formerly a practicing physician until 1989. Dr. DeMesa attended the University of South Florida where he received his B.A. (Chemistry), M.D., and M.B.A. degrees and completed his medical residency at the University of North Carolina. He is the author of two books and speaks regularly to companies and organizations throughout North America.
Dr. DeMesa has served as a senior executive with several international pharmaceutical and biotech companies, and provides the Board with extensive experience in the areas of corporate management, regulatory affairs and pre-clinical and clinical pharmaceutical product development. Dr. DeMesa also contributes expertise based on his professional training and experience as a medical doctor. We believe that Dr. DeMesa is qualified to serve on ourOur Board of Directors due to his leadership and management experience, his service as an executive of biopharmaceutical companies and his knowledge of our business and industry.
Mr. Joon Kim has served in our Board since December 2018. Mr. Kim is an accomplished litigator with extensive experience in both business and criminal litigation matters. With a particularly strong background in representing clients in court proceedings, Mr. Kim has a comprehensive understanding of every stage ofrecommends that you vote “FOR” the litigation process, including all aspects of initial investigatory/discovery proceedings, settlement negotiations, contested hearings, pretrial and trial motions, evidentiary issues, trials, and the handling of post-judgment challenges and appeals. Mr. Kim advises corporate clients of varying sizes on a variety of subject matters, inclusive of assisting the top management with strategic decision-making. Mr. Kim has acted as an advisor to Alpha Holdings, Co., Ltd. since July 2018.Authorized Share Increase.
From April 2017 to March 2020, as a partner in Lee & Ko’s International Litigation and Dispute Resolution and White Collar Crime Practice Groups, Mr. Kim advised clients, both domestic and international, on a broad range of litigation and dispute-resolution matters. In addition, Mr. Kim served as a public prosecutor in California, representing the People of the State of California in criminal proceedings. In that capacity, Mr. Kim has first-chaired both jury and non-jury trials, and has been trained in all aspects of litigation. During his time as a public prosecutor, Mr. Kim also had the experience of serving as a research fellow at the Institute of Justice, under the auspices of the Ministry of Justice of the Republic of Korea, where he worked closely with Korean public prosecutors. Mr. Kim received his J.D. from Berkeley School of Law and his B.S. from the Berkeley School of Business. Mr. Kim’s legal experience and expertise are the primary qualifications for him to serve as a director of the Company.
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Herbert Kim Lyerly, M.D., is the George Barth Geller Professor of Cancer Research (from 2004), Professor of Surgery (from 1997), Immunology (from 2017) and Pathology (from 2018), and Director of the Surgical Sciences Applied Therapeutics section at Duke University (from 2021), and former Director of the Duke Comprehensive Cancer Center, a position he held from 2003 to 2011. He is an internationally-recognized expert in cancer therapy and immunotherapy, has published over 300 scientific articles and book chapters, and has edited ten textbooks on surgery, cancer immunotherapy and novel cancer therapies. He serves on the editorial board of 12 scientific journals.
Dr. Lyerly was appointed in 2008 by President George W. Bush to serve on the National Cancer Advisory Board, which oversees the National Cancer Institute, where he served until 2014. He has served as Chair of the Cancer Center’s Subcommittee and served on the Global Health Subcommittee of the National Cancer Advisory Board. He has served on the National Institutes of Health (“NIH”) Council of Councils, and on the board of the NIH Office of AIDS Research. He has also been a member of the scientific advisory boards of the Susan G. Komen Foundation and the Burroughs Welcome Foundation. He is a highly sought-after consultant and advisor and has served on the Cancer Center’s external advisory boards for the M.D. Anderson Cancer Center, University of Michigan, University of Chicago, University of Alabama, University of Arizona, Boston University and Purdue University. He has served as an advisor to the University of Washington and Case Western Reserve Clinical and Translational Science Institutes. Dr. Lyerly’s experience and expertise in the field of oncology are the primary qualifications for him to serve as a director of the Company.
Kevin R. Smith is currently the Chief Executive Officer and Executive Director of Sirtex Medical US Holdings, Inc. (“Sirtex”), a position that he has held since October 2019. Mr. Smith served as the interim Chief Executive Officer of OncoSec from February 2022 to May 2022. He combines more than 20 years of sales and marketing experience in the medical device industry with the keen instincts of an entrepreneur. Prior to his appointment to Chief Executive Officer of Sirtex , Mr. Smith served as Sirtex’s interim Chief Executive Officer from April 2019 to October 2019 and Executive Vice President of Sales & Marketing, Americas from August 2017 to April 2019. Before joining Sirtex, Mr. Smith was Executive Vice President of Business Development at Gel-e, Inc., a company based at the University of Maryland specializing in advanced material hemostasis products, a position he held since January 2017. Mr. Smith’s previous positions include Chief Commercial Officer of Sensium Healthcare along with Global Vice President of Sales & Marketing at Teleflex, where he was the senior sales and marketing executive in the company’s cardiac business unit. Kevin holds a Master of Business Administration in Global Management from the University of Phoenix and a Bachelor of Science in Marketing from the University of Kentucky. Mr. Smith’s leadership experience, as well as his experience in the marketing and sales sector of the medical device industry, are the primary qualifications the Board considered in nominating him as a director of the Company.
Mr. Chao Zhou is currently the Chief Executive Officer of Grand Pharmaceutical Group Limited, a public company listed on the Hong Kong stock exchange that develops, manufactures and distributes pharmaceutical products and medical devices to retailers and medical organizations with significant experience in R&D and product commercialization in China, a position he has held since June 2021. Since 2018, Mr. Zhou has served on the Board of Directors of Grand Pharma Sphere Pte. Ltd, a Singapore based company, Sirtex Medical Pty Ltd., the Australian based global medical device company and Cloudbreak Pharmaceutical Inc., an Cayman Islands based company which is engaged in the business of the research, development, manufacturing and commercialization of biopharmaceutical product. Prior to his role as Chief Executive Officer of Grand Pharmaceutical Group Limited, from 2013 Mr. Zhou served as a Management Director in the Department of Legal Security for China Grand Enterprises, Inc., an investment company engaged in the operation and management of businesses covering pharmaceuticals and healthcare, commodity trading, real estate investment, financial service and other sectors. He earned his Bachelor in Law from Ocean University of China and a Master in International Law from the University of International Business and Economics. We believe that Mr. Zhou is qualified to serve on our Board of Directors due to his commercial experience in the biopharmaceutical industry.
The Board of Directors recommends that you vote “FOR” the election of each of the named director nominees.
RATIFICATION OF THE APPOINTMENT OF OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
The Audit Committee has re-appointed Mayer Hoffman McCann P.C. (“MHM”) as our independent registered public accounting firm for our fiscal year ending July 31, 2022. MHM has served as the Company’s independent registered public accounting firm since May 2011. In re-appointing MHM, the Audit Committee considered MHM’s independence with respect to the services to be performed by it, as well as other factors the Audit Committee and the Board considered relevant.
At the Annual Meeting, stockholders will be asked to ratify the appointment of MHM as the Company’s independent registered public accounting firm for our current fiscal year. Stockholder ratification of the appointment of MHM is not required by our bylaws or otherwise. However, the Board of Directors, at the direction of the Audit Committee, is submitting the appointment of MHM to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain the firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
Representatives of MHM are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees and Services
The following table presents the aggregate fees billed to the Company for professional services rendered by MHM in our fiscal years ended July 31, 2021 and 2020:
Fiscal Year | ||||||||
2021 | 2020 | |||||||
Audit Fees (1) | $ | 329,443 | $ | 273,250 | ||||
Audit Related Fees (2) | – | – | ||||||
Tax Fees (3) | – | – | ||||||
All Other Fees (4) | – | – | ||||||
Total (5) | $ | 329,443 | $ | 273,250 |
Pre-Approval Policies and Procedures
Our Audit Committee’s charter requires this Committee to pre-approve all audit and permissible non-audit services to be performed for the Company by our independent registered public accounting firm, as well as the fees and terms for these services, subject to certain exceptions for “de minimis” amounts as permitted by applicable SEC rules. In considering such services and fees for approval, the Audit Committee considers whether the provision of the services and the payment of the related fees are compatible with maintaining the independence of our independent registered public accounting firm.
All of the fees and services provided by MHM described in the table above were authorized and approved by the Audit Committee in compliance with these pre-approval policies and procedures.
The Board of Directors recommends that you vote “FOR” the ratification of the appointment of Mayer Hoffman McCann P.C. as our independent registered public accounting firm.
Role of the Board
The primary functions and responsibilities of the Board are to oversee management’s operation of the business and affairs of the Company, the determination of our objectives and strategies, and the management of our risks. The functions of the Board are carried out by the full Board and, when delegated, by our Board committees, and each director is a full and equal participant in the major strategic and policy decisions of the Company. The Board has adopted Corporate Governance Guidelines to assist the Board and its committees in performing their duties and serving the best interests of the Company and its stockholders. These Corporate Governance Guidelines are available on our website, located at www.oncosec.com, on the Governance page under the Investors tab.
Board Committees
The Board has established the following standing committees: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. The Board may also create additional, temporary committees from time to time, including committees relating to financings, strategic transactions or other significant corporate matters. The Board has adopted a written charter for each of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, current copies of which are available on our website, located at www.oncosec.com, on the Governance page under the Investors tab.
The current membership on each of our Board committees is as follows:
Director | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||
Dr. Linda Shi, M.D., Ph.D. | – | – | – | ||||
Dr. James M. DeMesa, M.D. | X | X | Chair | ||||
Joon Kim | – | – | – | ||||
Dr. Herbert Kim Lyerly, M.D. | X | X | – | ||||
Kevin R. Smith | X | X | |||||
Chao Zhou | – | – | – |
Audit Committee
The primary functions of the Audit Committee are, among other things: overseeing our accounting and financial reporting processes and the audits of our financial statements and internal control over financial reporting; reviewing the policies and procedures adopted by the Company to fulfill its responsibilities regarding the fair and accurate presentation of financial statements; appointing, retaining and overseeing the work of our independent registered public accounting firm; reviewing and discussing reports from our independent registered public accounting firm regarding critical accounting policies and practices, alternative treatments of financial information and any material written communications between such firm and management; reviewing and discussing with management and our independent registered public accounting firm the Company’s financial statements and financial disclosures prior to the filing thereof in any report filed with the SEC; taking appropriate action to oversee and ensure the independence of our independent registered public accounting firm; and establishing procedures for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. The Audit Committee met 5 times in Fiscal Year 2021.
Nasdaq has established rules and regulations regarding the composition of audit committees and the qualifications of audit committee members. Our Board of Directors has examined the composition of our Audit Committee and the qualifications of our Audit Committee members in light of the current rules and regulations governing audit committees. Based upon this examination, our Board of Directors has determined that each member of our Audit Committee is independent and is otherwise qualified to be a member of our Audit Committee in accordance with such rules. Our Board of Directors is currently in the process of identifying a third, independent Audit Committee member and expects to appoint such member ahead of the Annual Meeting.
Additionally, the U.S. Securities and Exchange Commission (“SEC”) requires that at least one member of the Audit Committee have a “heightened” level of financial and accounting sophistication. Such a person is known as the “audit committee financial expert” under the SEC’s rules. Our Board of Directors has determined that Dr. James DeMesa is an “audit committee financial expert,” as the SEC defines that term, and that each member of the Audit Committee has sufficient knowledge in reading and understanding the Company’s financial statements to serve on such committee.
Compensation Committee
The primary functions of the Compensation Committee are, among other things: reviewing and approving compensation programs and arrangements applicable to our officers; determining the objectives of our executive officer compensation programs, including reviewing and establishing goals and objectives relevant to Chief Executive Officer compensation, and determining the extent to which they are achieved and any related compensation earned; administering our incentive compensation and equity-based plans; reviewing management’s risk assessment regarding the compensation policies and practices of the Company and taking steps to provide that such policies and practices do not encourage unnecessary or excessive risk-taking; and reviewing and approving director compensation and benefits. The Compensation Committee met 13 times in Fiscal Year 2021.
While certain members of senior management, including primarily our Chief Executive Officer, present their views regarding attainment of business objectives and recommended compensation, the Compensation Committee performs its own independent analysis and makes final determinations regarding compensation-related matters. Our Chief Executive Officer is not present during the Compensation Committee’s or the Board’s voting or deliberations regarding his own compensation.
The Compensation Committee’s charter gives the Compensation Committee the authority, without any approval of the Board or management, to engage and compensate compensation consultants and other advisors as it deems necessary or desirable to carry out its duties, including its evaluation of director or executive officer compensation. Pursuant to its charter and in accordance with applicable Nasdaq and SEC rules, the Compensation Committee would assess the independence of any compensation consultant, including the existence of any conflicts of interest, prior to any engagement.
In Fiscal Year 2021, the Compensation Committee directly engaged Anderson Pay Advisors, LLC, an independent compensation consultant, to review and evaluate all elements of our executive compensation program. Based on their evaluation, they concluded executive compensation generally was below market median. Their input may be considered by the Compensation Committee in making future compensation decisions.
Nasdaq has established rules and regulations regarding the composition of compensation committees and the qualifications of compensation committee members. As a controlled company, we are not required to have a compensation committee composed entirely of independent directors. However, our Board of Directors has examined the composition of our Compensation Committee and the qualifications of our Compensation Committee members in light of the current rules and regulations governing compensation committees. Based upon this examination, our Board of Directors has determined that two members of our Compensation Committee are independent and all members are otherwise qualified to be a member of our Compensation Committee in accordance with such rules.
Nominating and Corporate Governance Committee
The primary functions of the Nominating and Corporate Governance Committee are, among other things: assisting in the identification of nominees for election to our Board, consistent with qualifications and criteria approved by the Board; determining the composition of the Board and its committees; recommending to the Board the director nominees for the annual meeting of stockholders; establishing and monitoring a process of assessing the Board’s effectiveness; developing and overseeing a set of corporate governance guidelines and procedures; and overseeing the evaluation of the Board and the Company’s management. The Nominating and Corporate Governance Committee met 4 times in Fiscal Year 2021.
Board Diversity
The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors.
Board Diversity Matrix (As of May 18, 2022) | ||||||||
Total Number of Directors | 6 | |||||||
Female | Male | Non- Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 3 | 0 | 2 | ||||
Part II: Demographic Background | ||||||||
African American or Black | 0 | 0 | 0 | 0 | ||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||
Asian | 0 | 0 | 0 | 0 | ||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||
White | 0 | 2 | 0 | 0 | ||||
Two or More Races or Ethnicities | 0 | 1 | 0 | 0 | ||||
LGBTQ+ | 0 | |||||||
Did Not Disclose Demographic Background | 3 |
Nomination of Directors
Our Nominating and Corporate Governance Committee is responsible for identifying and evaluating individuals qualified to become directors and recommending these candidates to our Board for nomination or appointment.
Director Qualifications
In considering potential new directors, the Nominating and Corporate Governance Committee may review individuals from various disciplines and backgrounds. Among the qualifications to be considered in the selection of candidates are broad experience in business, finance or administration; familiarity with the Company’s industry; and prominence and reputation. Since prominence and reputation in a particular profession or field of endeavor are what bring most persons to the Board’s attention, there is further consideration of whether the individual has the time available to devote to the work of the Board and on one or more of its committees. To this end, our Corporate Governance Guidelines provide that no director is to hold more than four directorships of publicly traded companies, and no member of our Audit Committee is to sit on the Audit Committee of more than two other publicly traded companies. The Nominating and Corporate Governance Committee also reviews the activities and associations of each candidate to ensure there is no legal impediment, conflict of interest or other consideration that might hinder or prevent service on the Board. With respect to the nomination of continuing directors for re-election, an individual’s past contributions to the Board are also considered.
Other than the foregoing, there are no stated minimum criteria for director nominees and the Nominating and Corporate Governance Committee may also consider these factors and any such other factors as it deems appropriate and in the best interests of the Company and our stockholders. The Nominating and Corporate Governance Committee does, however, recognize that under applicable regulatory requirements at least one member of the Board should meet the criteria for an “audit committee financial expert” as defined by SEC rules and the members of certain of our Board committees must satisfy enhanced independence criteria under applicable Nasdaq and SEC rules. Further, although the Company does not have a formal diversity policy, the Nominating and Corporate Governance Committee seeks to assemble a Board that brings to the Company a variety of perspectives, skills, expertise, and sound business understanding and judgment, derived from a broad range of business, professional, governmental, finance, community and industry experience.
Identification and Evaluation of Director Nominees
The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Potential director candidates may come to the attention of the Nominating and Corporate Governance Committee through current members of the Board, executive officers, professional search firms, stockholders or others. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee and may be considered at any point during the year. The Nominating and Corporate Governance Committee recommends the director nominees to our Board for approval for election at each annual meeting of stockholders. Under our bylaws, any director appointed by our Board is subject to re-election by our stockholders at our next annual meeting of stockholders.
Code of Business Conduct and Ethics
The Board has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer and principal financial and accounting officer. The Code of Business Conduct and Ethics is available for review on our website at www.oncosec.com, on the Governance page under the Investors tab, and is also available in print, without charge, to any stockholder who requests a copy by writing to us at OncoSec Medical Incorporated, 24 N. Main Street, Pennington, NJ 08534, Attention: Investor Relations. We expect that any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, will be disclosed on our website.
Prohibition on Hedging and Pledging
Our Insider Trading Policy prohibits our directors, officers, employees, and agents (such as consultants and independent contractors) and their spouses or other members of their households from entering into hedging or monetization transactions or similar arrangements with respect to our securities without advance approval.
In addition, our Insider Trading Policy prohibits our directors, officers and employees and their spouses or other members of their households from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan.
Director Independence and Controlled Company Exemption
The Company’s common stock is listed on the Nasdaq Capital Market. The rules of Nasdaq require our Board to make an affirmative determination as to the independence of each director, and require a majority of the Company’s directors be “independent directors,” as defined by Nasdaq rules. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a company’s audit, compensation and nominating committee be independent. Audit committee and compensation committee members must also satisfy enhanced independence criteria under certain SEC rules and corresponding Nasdaq rules.
Consistent with these rules, our Board undertook its annual review of director independence on May 30, 2022. During the review, our Board considered relationships and transactions during Fiscal Year 2021 and since inception between each director or any member of his immediate family, on the one hand, and the Company and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that Dr. James M. DeMesa, Dr. Herbert Kim Lyerly and Mr. Joon Kim are independent under the criteria established by Nasdaq and our Board.
Upon the Closing of the CGP Transaction described above, CGP and Sirtex, acting as a “group” for purposes of Section 13(d) of the Exchange Act, collectively beneficially owns common stock representing more than 50% of the voting power of our Common Stock eligible to vote in the election of directors. As a result, we qualify as a “controlled company” and avail ourselves of certain “controlled company” exemptions under the Nasdaq corporate governance rules. As a controlled company, we are not required to have a majority of “independent directors” on our Board as defined under the Nasdaq rules, or have a compensation, nominating or governance committee composed entirely of independent directors. In light of our status as a controlled company, our Board has determined to utilize the majority board independence exemption and the exemption applying to compensation committee member independence.
Board Leadership Structure
Under our Corporate Governance Guidelines, the Board has the flexibility to decide whether the roles of Chief Executive Officer and Chair of the Board should be separated or combined. The Board has determined that it is currently in the best interest of the Company and our stockholders for the roles of Chief Executive Officer and Chair of the Board to be separated in recognition of the differences between these two roles and to permit the individual serving in each role to focus on different aspects of our business.
For example, our Chief Executive Officer is responsible for setting our strategic direction and managing our day-to-day leadership, operations and performance, while the Chair of the Board focuses on organizing Board activities and maintaining effective working relationships with senior management and among Board members to enable the Board to provide guidance to and oversight (including risk oversight) and accountability of management, provide the Chief Executive Officer ongoing direction regarding Board needs, interests and opinions, and ensure Board agendas are appropriately directed toward the Company’s most significant matters. Dr. Linda Shi has served as Chair of the Board since December 2021, and Dr. Robert Arch has served as our Chief Executive Officer since May 2022. Dr. Arch does not serve as a member of our Board of Directors.
The Board periodically reviews the Board’s leadership structure to determine whether it continues to best serve the Company and its stockholders. As a result, the Board may determine in the future that these interests are best served by selecting one person to occupy both the Chief Executive Officer and Chair of the Board roles.
Board Meetings and Director Attendance at Stockholder Meetings
Our Board met 13 times in Fiscal Year 2021, and each director attended at least 75% of the meetings of the Board and of the Board committees on which he or she served during that period.
As set forth in our Corporate Governance Guidelines, we expect that our directors will attend our Annual Meetings of Stockholders absent a valid reason for not attending. All of our directors who served the Company at the time of our 2021 annual meeting of stockholders attended the meeting.
Stockholder Recommendations of Director Candidates
Pursuant to its charter, our Nominating and Corporate Governance Committee is responsible for considering director candidates recommended by our stockholders. As a result, our Nominating and Corporate Governance Committee considers and evaluates director candidates that are properly submitted by our stockholders in the same manner as other prospective director candidates. Any such submission should be made in writing to the Company at OncoSec Medical Incorporated, 24 North Main Street, Pennington, NJ 08534, Attn: Secretary, and should include the name, address and a current resume of the proposed director candidate, a statement describing the candidate’s qualifications and consent to serve on our Board if selected as a director nominee, and contact information for personal and professional references. The submission should also include the name and address of the stockholder who is submitting the proposed director candidate, the number of shares of our common stock that are owned of record or beneficially by the submitting stockholder and a description of all arrangements or understandings between the submitting stockholder and the candidate. Any stockholder-proposed candidate that is selected by our Nominating and Corporate Governance Committee would be recommended by this committee as a director nominee to the Board, which would then consider and evaluate the candidate in the same manner and based on the same criteria and qualifications as other prospective director candidates. If approved by the Board, the individual would be appointed as a director to a vacant seat on the Board or included in the Board’s slate of recommended director nominees for election at our next annual meeting of stockholders.
Stockholder Nominations of Directors
Our bylaws provide that any stockholder who is entitled to vote at an annual meeting of our stockholders and who complies with the applicable notice requirements set forth in our bylaws may nominate persons for election to our Board at the annual meeting. A stockholder desiring to nominate a director to our Board must do so in a written notice delivered to or received by the Company at OncoSec Medical Incorporated, 24 North Main Street, Pennington, NJ 08534, Attn: Secretary, within a specified time period before the annual meeting of stockholders at which the proposed director candidate is to be up for election. See “Stockholder Director Nominations and Other Proposals for Our Next Annual Meeting of Stockholders” below for more information, including specific information about these time periods in connection with our next annual meeting of stockholders. The stockholder’s notice must include, among other things as specified in our bylaws: certain personal identification information about the stockholder and its director nominee(s); the principal occupation or employment of the director nominee(s); the class and number of shares of the Company that are beneficially owned by the stockholder and its director nominee(s); and any other information relating to the director nominee(s) that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Exchange Act. A stockholder who complies with the notice requirements set forth in our bylaws will be permitted to present the director nominee at the applicable annual meeting of stockholders, but will not be entitled to have the nominee included in our proxy statement for the annual meeting, unless an applicable rule of the SEC requires that we include the director nominee in our proxy statement.
Board Role in Risk Oversight
Risk is inherent in every business. We face a number of risks, including business, operational, strategic, research and development, financial and legal and regulatory risks. In general, our management is responsible for the day-to-day management of the risks we face, while our Board, as a whole and through its committees, is responsible for the oversight of risk management. The Board performs its risk oversight function as a whole, as well as through its committee structure.
The involvement of the full Board in setting our business strategy and objectives is integral to the Board’s assessment of our risks, as well as determining appropriate levels of risk and how best to manage risk. In its risk oversight role, the Board receives regular reports and/or presentations from applicable members of management and from the committees of the Board regarding areas of significant risk, assesses these risks in the context of our business and individual transactions or arrangements, and addresses any risk issues with management throughout the year as necessary.
While our Board of Directors has ultimate oversight responsibility for the risk management process, the Board delegates responsibility for certain aspects of risk management oversight to its committees. In particular:
We believe our Board’s regular review and analysis of our risks and risk management policies, the separation of the roles of Chair of the Board and Chief Executive Officer, and the role of our Board committees in the Board’s performance of its risk oversight function, provide appropriate independent oversight of our risk management practices, policies and procedures.
Communications with the Board
Any stockholder who desires to contact our Board or any member(s) of our Board may do so by writing to: Board of Directors, c/o Secretary, OncoSec Medical Incorporated, 24 North Main Street, Pennington, NJ 08534. Copies of any such written communications received by the Secretary will be provided to our full Board or any identified member(s), unless they are considered, in the reasonable judgment of the Secretary, to be improper for submission to the intended recipient(s).
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our officers, directors and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the SEC. To our knowledge, based solely on our review of such reports filed electronically with the SEC or written representations from persons subject to Section 16(a), we believe that during Fiscal Year 2021, all Section 16(a) reporting requirements applicable to our directors, executive officers and 10% stockholders were completed in a timely manner, except for (i) a late Form 3 was filed by Brian A. Leuthner, and (ii) a late Form 4 was filed by the following reporting persons (each relating to one transaction, except as noted): Brian Leuthner, Alpha Holdings, Inc., and Grand Pharmaceutical Group Limited (formerly China Grand Pharmaceutical & Healthcare Holdings Ltd.) (relating to two transactions).
Certain Relationships and Related Party Transactions
Related Party Transactions
Except as described below and except for employment arrangements and compensation for Board service, which are described under “Executive Compensation” below, during Fiscal Year 2021, there has not been, nor is there currently proposed, any transaction in which we are or were a participant, the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive officers, holders of more than 5% of our common stock or any immediate family member of any of the foregoing had or will have a direct or indirect material interest.
We have entered into indemnification agreements with each of our directors and executive officers. In general, these indemnification agreements require the Company to indemnify a director to the fullest extent permitted by law against liabilities that may arise in connection with that director’s service as a director for the Company.
Equity Offerings
During Fiscal Year 2021, shares of common stock issued to third party investors related to warrant exercises totaled 1,389,261. On April 16, 2021, in accordance with their Stock Purchase Agreements, CGP and Sirtex exercised their rights to purchase additional shares of common stock at a purchase price equal to the same exercise price paid by each warrant holder in order to maintain their respective ownership percentages of the outstanding shares of common stock as of October 10, 2019. We issued 1,409,838 shares of common stock to CGP at an exercise price of $3.45 per share, resulting in gross proceeds of approximately $4.8 million. We issued 281,968 shares of common stock to Sirtex at an exercise price of $3.45 per share, resulting in gross proceeds of approximately $1.0 million.
On January 25, 2021, we completed the offer and sale of an aggregate of 7,711,284 shares of common stock at a purchase price of $5.45 per share in a public offering. CGP and Sirtex participated in the offering. Each of CGP and Sirtex exercised its right of participation in future offerings in order to maintain respective ownership percentages of the outstanding shares of common stock upon close, and purchased 3,389,198 and 677,839 shares of common stock, respectively, at a purchase price of $5.45 per share.
On August 19, 2020, we completed the offer and sale of an aggregate of 4,608,589 shares of common stock at a purchase price of $3.25 per share in a registered direct offering. CGP and Sirtex participated in the registered direct offering and maintained their respective ownership percentages of the outstanding shares of common stock upon close, and purchased 1,999,000 and 399,800 shares of common stock, respectively, at a purchase price of $3.25 per share.
Co-Promotion Agreement
In January 2021, we entered into a co-promotion agreement with Sirtex, pursuant to which we granted Sirtex the option to co-promote our lead product candidate, a DNA-encoded interleukin-12 (“IL-12”) called tavokinogene telseplasmid (“TAVO™”), for the treatment of anti-PD-1 refractory locally advanced or metastatic melanoma in the U.S., including its territories and possessions. In consideration for the option, we received an upfront, non-refundable payment of $5.0 million from Sirtex (the “option fee”). The option to co-promote is non-exclusive and may be exercised at any time by Sirtex from the effective date until 90 days following the receipt by Sirtex of a complete copy of the final Biologics License Application (“BLA”) filed by us with the U.S. Food and Drug Administration (“FDA”) (the “option period”). If Sirtex exercises the option, we will receive an additional non-refundable and non-creditable option exercise fee of $25.0 million, comprised of $20.0 million in cash, and $5.0 million for the issuance of shares of common stock determined by the average closing price of the stock for the 30 days prior to the date of receipt of the exercise notice for the option.
Under the terms of the co-promotion agreement, if Sirtex exercises the co-promote option, we will pay to Sirtex a high-teens to low-twenties royalty of U.S. net sales of the TAVO products. The co-promotion agreement will continue until the earlier of the expiration of the option period without Sirtex extending the option or the eighth anniversary of the first FDA approval of the BLA, and can be extended by mutual agreement between us and Sirtex. During the co-promotion term, we are responsible for funding approximately two-thirds of the promotional costs incurred by Sirtex and Sirtex shall be responsible for approximately one-third.
Policies and Procedures for Review and Approval of Related Party Transactions
Pursuant to its charter and in accordance with applicable Nasdaq rules, our Audit Committee has the responsibility to review and approve in advance any transactions with a related party. In addition, our Code of Business Conduct and Ethics addresses conflicts of interest, and requires that the existence of any actual or potential conflict be disclosed to the Chairman of the Audit Committee to enable the committee’s full review of the potential conflict. The Audit Committee intends to approve only those related party or conflict of interest transactions that are considered to be in the best interests of the Company and our stockholders. In considering whether to approve any such transaction, the Audit Committee considers such factors as it deems appropriate, and generally focuses on whether the terms of the transaction are at least as favorable to us as terms we would receive on an arm’s-length basis from an unaffiliated third party and whether any such transaction might impair the independence of a director or present a conflict of interest for a director or executive officer.
Family Relationships
There are no family relationships among our current directors and executive officers.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The table below sets forth certain information regarding the beneficial ownership of our common stockCommon Stock of (i) each person who, to our knowledge, owns more than 5% of our common stockCommon Stock as of May 18,December 1, 2022, (ii) each of our directors and named executive officers, (consisting of the persons described under “Executive Compensation” below), and (iii) all of our current directors and executive officers as a group. Unless otherwise indicated in the footnotes to the table below, the address of each person named in the table is: c/o OncoSec Medical Incorporated, 24 N. Main Street, Pennington, NJ 08534.
Beneficial ownership is determined and calculated in accordance with applicable SEC rules, and generally includes sole or shared voting and/or investment power with respect to securities. These rules provide that shares of our common stockCommon Stock subject to options, warrants, restricted stock units or other rights that are currently exercisable or subject to vesting within 60 days after May 18,December 1, 2022 are deemed to be beneficially owned and outstanding for purposes of computing the share and percentage ownership of the person holding such options, warrants, restricted stock units or other rights, but are not deemed outstanding for computing the percentage ownership of any other person.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership (No. of Shares) | Percentage Beneficially Owned (%)(1) | Amount and Nature of Beneficial Ownership (No. of Shares) | Percentage Beneficially Owned (%)(1) | ||||||||||||
Directors and Named Executive Officers | ||||||||||||||||
Daniel J. O’Connor, J.D.(2) | 545,950 | 1.37 | ||||||||||||||
Robert H. Arch, Ph.D.(2) | 15,910 | * | ||||||||||||||
George Chi | - | - | ||||||||||||||
Robert J. DelAversano(3) | 111,886 | * | 5,667 | * | ||||||||||||
Brian A. Leuthner(4) | 108,262 | * | 1,564 | * | ||||||||||||
Dr. James M. DeMesa, M.D.(5) | 114,750 | * | 5,217 | * | ||||||||||||
Joon Kim(6) | 58,750 | * | 2,860 | * | ||||||||||||
Dr. Herbert Kim Lyerly, M.D.(7) | 75,000 | * | 3,410 | * | ||||||||||||
Kevin R. Smith(8) | 43,750 | * | 2,179 | * | ||||||||||||
Chao Zhou(8) | 43,750 | * | 2,179 | * | ||||||||||||
Dr. Linda Shi | - | - | ||||||||||||||
All directors, nominees and current executive officers as a group (9 persons) | 1,102,098 | 2.73 | ||||||||||||||
Dr. Linda Shi, M.D., Ph.D. | - | - | ||||||||||||||
Stephany Foster | 569 | * | ||||||||||||||
All directors, nominees and current executive officers as a group (11 persons) | 39,555 | 1.32 | % | |||||||||||||
5% Stockholders | ||||||||||||||||
Grand Pharmaceutical Group Limited (formerly China Grand Pharmaceutical & Healthcare Holdings Ltd.) and Grand Decade Developments Limited(9) | 16,798,036 | 42.7 | 1,124,318 | 37.8 | % | |||||||||||
Sirtex Medical US Holdings, Inc.(10) | 3,359,607 | 8.5 | 152,711 | 5.1 | % | |||||||||||
Avidity Partners Management LP(11) | 2,945,000 | 7.5 |
* Indicates beneficial ownership of less than 1% of the total outstanding stock.
(1) | Based on |
(2) | Includes |
(3) | Includes 4,668 shares of Common Stock issuable upon exercise of options currently exercisable or exercisable within 60 days after December 1, 2022. |
(4) | |
(5) | Includes |
(6) | Includes |
(7) | Includes |
(8) | Includes |
(9) | Based |
(10) | Based solely upon a Form 4 filed on April 26, 2021 by Sirtex Medical US Holdings, Inc. (“Sirtex”). Sirtex beneficially owns |
Securities Authorized for Issuance Under Equity Compensation PlansChanges in Control
The following table provides information asCompany is not currently aware of July 31, 2021 regarding compensation plans underany arrangements which our equity securities are authorized for issuance:
Equity Compensation Plan Information | ||||||||||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | ||||||||||
Equity compensation plans approved by security holders | 2,964,391 | (1) | $ | 2.87 | 838,310 | (2) | ||||||
Equity compensation plans not approved by security holders | 590,000 | (3) | $ | 5.00 | - | |||||||
TOTAL | 3,554,391 | 3.27 | 838,310 |
INFORMATION ABOUT EXECUTIVE OFFICERS
Set forth below is certain information regarding the current executive officersmay at a subsequent date result in a change of control of the Company, including biographical summaries for each of our executive officers who are not also members of our Board.Company.
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Dr. Archhas served as an independent consultant to various pharmaceutical and biotechnology companies since July 2021. Previously, Dr. Arch served as Head of Research at Elpiscience Biopharma, Ltd. from October 2019 to June 2021 and Head of the Liver Disease Department at China Novartis Institutes for BioMedical Research from February 2017 to October 2019. Dr. Arch’s leadership roles have been focused on shaping strong teams and building diversified research and development pipelines with innovative assets, from ideas to late-stage clinical development programs. Dr. Arch’s career over 28 years extends from academia to the pharmaceutical industry, including positions at Novartis, Takeda, GlaxoSmithKline, and Pfizer. Dr. Arch’s expertise in basic research and drug development includes chronic liver disease, cancer, immuno-oncology, respiratory disease, and inflammatory disorders. Dr. Arch holds a Ph.D. in Germany from the University of Wuerzburg and the German Cancer Research Center (the “DKFZ”), Heidelberg. After postdoctoral training at the DKFZ and the University of Chicago, Dr. Arch started his independent career as a faculty member in the Departments of Medicine and Pathology & Immunology at Washington University in Saint Louis. Dr. Arch is an author on more than 40 publications and book chapters and co-inventor on several patents for clinical-stage assets.
Mr. Chijoins the Company from THPlasma, where he served as Chief Executive Officer since July 2020 and helped found the company’s plasma collection business and establish regular commercial sales. Prior to joining THPlasma, Mr. Chi served as Chief Financial Officer of CASI Pharmaceuticals, Inc. (“CASI”), a biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products, from September 2018 to February 2020. Prior to joining CASI, Mr. Chi was Vice President of Finance at Flavors Holdings, Inc., a packaged food company, from October 2016 to September 2018, where he led the global accounting function, including financial reporting, planning, treasury, investor relations, tax and auditing with global sales in 90 countries. Prior to his time at Flavor Holdings, Inc. from 2014-2016, Mr. Chi was Chief Financial Officer at BPL Plasma, a large third party blood plasma collection businesses. From 2008-2013, Mr. Chi was finance director at Unilever PLC where he was responsible for leading the accounting function including financial reporting, annual budgeting and strategic planning. Mr. Chi holds a bachelor’s degree in engineering from Tsinghua University, Beijing, China and a M.B.A. in finance and operations from the Yale School of Management. He also holds certifications as a CPA and CFA.
This section discusses the material components of the executive compensation program for our named executive officers who are named in the “Summary Compensation Table” below. As a “smaller reporting company” we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to smaller reporting companies.
Summary Compensation Table
The following table sets forth the total compensation awarded to, earned by or paid to those individuals who served as our named executive officers during Fiscal Year 2021. Dr. Robert Arch was appointed as our Chief Executive Officer effective May 2, 2022, and was not a named executive officer during Fiscal Year 2021 or the fiscal year ended July 31, 2020.
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | Nonequity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||||||
Daniel J. O’Connor, J.D. | 2021 | 517,731 | 262,500 | – | 410,872 | – | 1,812,101 | 3,003,204 | |||||||||||||||||||||||
Former President and Chief Executive Officer (4) | 2020 | 513,462 | 326,993 | – | 502,086 | – | 10,645 | 1,353,186 | |||||||||||||||||||||||
Robert J. DelAversano | 2021 | 270,285 | 83,500 | 66,850 | 150,373 | – | 7,391 | 578,399 | |||||||||||||||||||||||
Principal Accounting Officer and Controller (5) | 2020 | 202,432 | 91,557 | – | 89,319 | – | 6,613 | 389,921 | |||||||||||||||||||||||
Brian A. Leuthner | 2021 | 167,058 | – | 606,720 | 856,477 | – | 54,446 | 1,684,701 | |||||||||||||||||||||||
Former Interim Chief Executive Officer, Former Chief Operating Officer (6) | 2020 | – | – | – | – | – | – | – |
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Outstanding Equity Awards at Fiscal Year End
The following table sets forth information regarding equity awards held by the named executive officers as of July 31, 2021:
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options, Exercisable (#) | Number of Securities Underlying Unexercised Options, Not Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | ||||||||||||||||||
Daniel J. O’Connor | 304,000 | (4) | – | 1.56 | 6/24/2023 | (10) | – | – | ||||||||||||||||
152,000 | (5) | – | 3.82 | 6/24/2023 | (10) | – | – | |||||||||||||||||
Robert J. DelAversano | 54,000 | (4) | – | 1.56 | 4/14/2030 | – | – | |||||||||||||||||
6,750 | (5) | 20,250 | (5) | 3.82 | 8/24/2030 | – | – | |||||||||||||||||
8,750 | (6) | 26,250 | (6) | 3.16 | 6/28/2031 | – | – | |||||||||||||||||
– | – | – | – | 7,656 | (7) | 16,690 | ||||||||||||||||||
Brian A. Leuthner | 51,563 | (9) | 98,437 | (9) | 7.45 | 2/2/2031 | (11) | – | – | |||||||||||||||
8,250 | (6) | 24,750 | (6) | 3.16 | 6/28/2031 | (11) | – | – |
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Compensation Matters
Cash Bonuses
On December 24, 2020, the Compensation Committee approved discretionary cash bonus awards to certain of our employees, including our named executive officers, as follows: (i) Mr. O’Connor received a cash bonus of $262,500 and (ii) Mr. DelAversano received a cash bonus of $73,500. On February 2, 2021, the Compensation Committee approved discretionary cash bonus awards to certain of our employees, including Mr. DelAversano in the amount of $10,000.
Equity Awards
The named executive officers received grants of equity awards in Fiscal Year 2021 as described below.
Daniel J. O’Connor
On August 24, 2020, the Compensation Committee approved the grant of 152,000 options to Mr. O’Connor. The options vests quarterly over a three-year period from the date of grant.
Robert J. DelAversano
On August 24, 2020, the Compensation Committee approved the grant of 27,000 options to Mr. DelAversano. The options vests quarterly over a three-year period from the date of grant.
On February 1, 2021, the Compensation Committee approved the grant of 8,750 restricted stock units to Mr. DelAversano. The units vest in equal quarterly installments of 1,904 units beginning on May 1, 2021 and ending on February 1, 2023.
On June 28, 2021, the Compensation Committee approved the grant of 35,000 options to Mr. DelAversano. The options vested 25% on the date of the grant and the remainder vests quarterly over a two-year period from the date of grant.
Brian A. Leuthner
On February 2, 2021, in connection with the appointment of Mr. Leuthner as the Company’s Chief Operating Officer, Mr. Leuthner received a one-time inducement award of 150,000 stock options to purchase the Company’s common stock. A total of 37,500 of the options vested on February 2, 2021, and the remaining 112,500 options vests quarterly over a two-year period.
On June 28, 2021, the Compensation Committee approved the grant of 33,000 options to Mr. Leuthner. The options vested 25% on the date of the grant and the remainder vests quarterly over a two-year period from the date of grant.
On June 28, 2021, the Compensation Committee approved the grant of 192,000 restricted stock units to Mr. Leuthner. The units vested 25% on the date of the grant and the remainder vests quarterly over a two-year period from the date of grant.
Mr. Leuthner voluntarily resigned from his position effective as of August 13, 2021 and 109,124 unvested options and 144,000 restricted stock units were forfeited on such date.
Employment Agreements
The following is a description of the prior employment agreement for Mr. O’Connor, our former Chief Executive Officer.
On November 7, 2017, we entered into an executive employment agreement with Mr. O’Connor, our former Chief Executive Officer. The employment agreement provided for the following, among other things:
We do not have an employment agreement with Mr. DelAversano, and did not enter into employment agreements with Mr. Leuthner prior to his resignation. However, we entered into an offer letter on February 1, 2021 with Mr. Leuthner, which provided for the following, among other things:
Other Elements of Compensation
Health and Welfare Plans
Our executive officers are eligible to participate in our employee benefit plans, including our health and welfare plans, on the same basis as our other employees.
401(k) Plan
We currently maintain a defined contribution savings plan pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. The plan is for the benefit of all qualifying employees, including our executive officers, and permits voluntary contributions by employees of up to 100% of eligible compensation, subject to maximum limits imposed by the Internal Revenue Service. The terms of the plan allow for discretionary employer contributions, and we currently match 100% of each employee’s contributions, up to a maximum of 3% of such employee’s annual compensation.
Director Compensation Policy
The Board determines the form and amount of director compensation after its review of recommendations made by the Compensation Committee. Directors who are also employees of our Company do not receive any separate compensation for their service as directors, except that all directors receive reimbursement for reasonable out-of-pocket expenses incurred in attending Board or Board committee meetings or otherwise in connection with performance of their duties as directors. Under our director compensation policy in place for Fiscal Year 2021, our directors’ cash compensation was as follows:
In addition, each non-employee independent director will receive a stock option award of 50,000 upon election and 25,000 annually thereafter.
Director Compensation Table
The following table provides information about the compensation of our non-employee directors for Fiscal Year 2021:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1)(6) | Total ($) | ||||||||||||
Robert E. Ward | 66,500 | – | 114,136 | (2)(3) | 180,636 | |||||||||||
Dr. James M. DeMesa, M.D. | 69,500 | – | 173,341 | (3)(4) | 242,841 | |||||||||||
Margaret Dalesandro, Ph.D. | 101,250 | – | 141,602 | (2)(5) | 242,852 | |||||||||||
Joon Kim | – | – | 54,931 | (3) | 54,931 | |||||||||||
Dr. Herbert Kim Lyerly, M.D. | 62,000 | – | 114,136 | (2)(3) | 176,136 | |||||||||||
Yuhang Zhao, Ph.D. | – | – | 54,931 | (3) | 54,931 | |||||||||||
Chao Zhou | – | – | 54,931 | (3) | 54,931 | |||||||||||
Kevin R. Smith | – | – | 54,931 | (3) | 54,931 |
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Each of Mr. Ward, Dr. Dalesandro, and Dr. Zhao voluntarily resigned from the Board on November 23, 2021, December 13, 2021 and December 15, 2021, respectively.
Management of the Company is responsible for preparing OncoSec’s financial statements, as well as for OncoSec’s financial reporting processes, accounting principles and internal controls. Mayer Hoffman McCann P.C., or MHM, the Company’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), including expressing an opinion on our financial statements and our internal control over financial reporting, in each case, when required. The Audit Committee is responsible for providing independent, objective oversight of these processes and functions on behalf of the Board.
In fulfilling its responsibilities, the Audit Committee has reviewed and discussed with management and MHM the Company’s audited consolidated financial statements included in the Annual Report. The Audit Committee has also discussed with MHM the matters required to be discussed by the applicable requirements of the PCAOB and the SEC, including Auditing Standards No. 1301, Communications with Audit Committees. In addition, the Audit Committee has received the written disclosures and the letter from MHM required by the applicable requirements of the PCAOB regarding MHM’s communications with the Audit Committee concerning independence, and has discussed with MHM its independence.
Based on the Audit Committee’s reviews and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Annual Report.
May 31, 2022
This Audit Committee Report shall not be deemed to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act other than as provided by applicable SEC rules, or to the liabilities of Section 18 of the Exchange Act except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Householding of Annual Meeting Materials
The SEC has adopted rules that allow a company to deliver a single set of proxy materials including a Notice of Internet Availability of Proxy Materials and/or a complete copy of the proxy statement, Annual Report and proxy card, to multiple stockholders who share the same address, unless contrary instructions have been received from a stockholder. This method of delivery, known as “householding,” permits companies to realize cost savings, reduces the amount of duplicate information stockholders receive and reduces the environmental impact of printing and mailing these materials to stockholders. We have adopted householding for the Annual Meeting, and as a result, stockholders sharing an address will receive only one copy of our proxy materials. Upon our receipt of a written or oral request, we will deliver promptly, at no charge, a separate copy of the proxy materials for the Annual Meeting to any stockholder at a shared address to which we have delivered a single copy of these materials. In addition, stockholders who share an address and receive a single copy of our proxy materials for the Annual Meeting may submit a request to receive multiple copies of these materials for future annual meetings of our stockholders, and stockholders who share an address and receive multiple copies of our proxy materials for the Annual Meeting may request to receive a single copy of these materials for our future annual meetings of stockholders. Any such requests should be directed to us by writing to 24 North Main Street, Pennington, NJ 08534, Attn: Secretary, or by calling 855-662-6732.
If you hold your shares in “street name” and reside in a household that received only one copy of the proxy materials, you can request to receive a separate copy in the future by following the instructions sent by your bank or broker. If your household receives multiple copies of the proxy materials, you may request that only a single set of materials be sent by following the instructions sent by your bank or broker.
Stockholder Director Nominations and Other Proposals for Our Next Annual Meeting of Stockholders
The submission deadline for stockholder proposals to be included in our proxy materials for our next annual meeting of stockholders after the Annual Meeting pursuant to Rule 14a-8 under the Exchange Act is at least 120 days before the anniversary date of the Company’s definitive proxy statement for the previous year’s annual meeting. We suggest that stockholders submit any stockholder proposal by certified mail, return receipt requested. All such proposals must be in writing and sent to our Secretary at the address of our principal executive offices, and must otherwise comply with Rule 14a-8 in all respects.
In addition, under our bylaws, director nominees and other proposals may be presented at an annual meeting of stockholders only by or at the direction of the Board or by a stockholder who has given us timely written notice of the nomination or proposal. To be timely for our 2023 annual meeting of stockholders, (i) in the case of a stockholder seeking inclusion of a proposal (but not a director nominee) in our proxy materials, the stockholder’s notice must be delivered to or mailed and received by our Secretary at the address of our principal executive offices not less than 120 days or more than 180 days prior to the first anniversary date of the date on which the Company first mailed its proxy materials for the 2022 Annual Meeting.annual meeting. Therefore, OncoSec must receive notice of a stockholder proposal no sooner than December 2, 2022 and no later than January 31, 2023. A stockholder’s notice must set forth, as to each director nominee or other proposal the stockholder proposes to bring before the meeting, all of the information required by our bylaws. If the stockholder is not seeking inclusion of the proposal in our proxy materials, timely notice consists of a stockholder’s notice delivered to or mailed and received at our principal executive offices not less than 90 days prior to the date of the annual meeting.
If the date of our next annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, then to be timely, notice by the stockholder must be delivered to the Secretary at our principal executive offices not later than the close of business on the later of (i) 90 days prior to such annual meeting or (ii) the 15 days following the day on which public announcement of the date of such meeting is first made.
Stockholders may obtain more information about these notice requirements by referencing a copy of our bylaws contained in the filings we make with the SEC, which are available through our website at www.oncosec.com or through the SEC’s website at www.sec.gov.
We will not entertain any director nominations or other proposal at the Annual Meeting or at our 2022 Annual Meeting2023 annual meeting of stockholders that do not meet the requirements set forth in our Bylaws. Further, if we comply and the stockholder does not comply with the requirements of Rule 14a-4(c)(2) under the Exchange Act, we may exercise discretionary voting authority under proxies that we solicit to vote in accordance with our best judgment on any such stockholder proposal or director nominee.
Other Business at the Annual Meeting
TheOur Board of Directors is not aware of any matter to be presented at the Annual Meeting that is not listed on the Notice of AnnualSpecial Meeting of Stockholders and discussed in this Proxy Statement. If other matters should properly come before the Annual Meeting, the persons named in the accompanying proxy intend to vote all proxies in accordance with the recommendation of the Board or, if no such recommendation is given, in their own discretion.
By order of the Board of Directors, | |
Robert H. Arch | |
Chief Executive Officer and President | |
13 |
FORM OF
CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION
OF
ONCOSEC MEDICAL INCORPORATED
(Pursuant to NRS 78.385 and 78.390)
A-2 |