DEF 14A of Atossa Therapeutics, Inc., May 23, 2024

DEF 14A of Atossa Therapeutics, Inc.

Filed May 23, 2024 · FY20230000950170-24-063763

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Amended and Restated Certificate of Incorporation of the Company provides that the Board is to be divided into three classes nearly equal in number as reasonably possible, with directors in each class serving three-year terms. The total Board size is currently fixed at seven directors. Currently, the Class III directors (whose terms expire at this Annual Meeting) are Shu-Chih Chen, Ph.D. and H. Lawrence Remmel, Esq. The Class I directors (whose terms expire at the 2025 Annual Meeting of Stockholders) are Steven C. Quay, M.D., Ph.D. and Jonathan F. Finn, C.F.A. The Class II directors (whose terms expire at the 2026 Annual Meeting of Stockholders) are Stephen J. Galli, M.D., Richard I. Steinhart and Tessa Cigler, M.D., M.P.H. The Class III directors elected at the Annual Meeting will hold office until the 2027 Annual Meeting of Stockholders and until their successors are duly elected and qualified, or until their earlier resignation, death or removal. As described below, the Board has nominated Dr. Chen and Mr. Remmel for reelection as Class III directors at the Annual Meeting. Both nominees were most recently elected by stockholders at the 2021 Annual Meeting of Stockholders. Both nominees have indicated their willingness and ability to serve if elected. Should either of the nominees become unavailable for election at the Annual Meeting, unable to serve or, for good cause, unwilling to serve, the persons named on the enclosed proxy as proxy holders may vote all proxies given in response to this solicitation for the election of a substitute nominee chosen by the Board, or the Board may decrease the size of the Board.

  2. Nomination of Directors

    Nomination of Directors The Nominating and Governance Committee reviews and recommends to the Board potential nominees for election to the Board. In reviewing potential nominees, the Nominating and Governance Committee considers the qualifications of each potential nominee in light of the Board’s existing and desired mix of experience and expertise. Specifically, the Nominating and Governance Committee considers each potential nominee’s personal and professional ethics, integrity and values, business acumen, interest in the Company and commitment to representing the long-term interests of the stockholders. The Nominating and Governance Committee also seeks to have a Board that encompasses a range of talents, ages, skills, diversity, and expertise sufficient to provide sound and prudent oversight with respect to the operations and interests of the business. These criteria are set forth in our Corporate Governance Guidelines, a copy of which is available on our website at https://investors.atossatherapeutics.com/. After reviewing the qualifications of potential Board candidates, the Nominating and Governance Committee presents its recommendations to the Board, which selects the final director nominees. Upon the recommendation of the Nominating and Governance Committee, the Board nominated for reelection Dr. Chen and Mr. Remmel as the Company’s Class III directors. The Company did not pay any fees to any third parties to identify or assist in identifying or evaluating nominees for the Annual Meeting. It is the Nominating and Governance Committee’s policy to consider written recommendations from stockholders for director candidates. The Nominating and Governance Committee considers stockholder nominees in the same manner and using the same criteria as nominees recommended by other sources. Any such recommendations should be submitted to the committee as described under “Stockholder Communications” and should include the same information required under our Bylaws for nominating a director, as described under “Stockholder Proposals.”

  3. Board Diversity

    Board Diversity Although the Nominating and Governance Committee may consider whether nominees contribute to a mix of Board members that represents a diversity of background and experience, which is not only limited to race, gender, or national origin, we have no formal policy regarding board diversity. The Nominating and Governance Committee assesses its effectiveness in balancing these considerations in connection with its annual evaluation of the composition of the Board. Our current Board of seven directors includes two directors who self-identify as female (29%) and 2 directors who self-identify as racially/ethnically diverse (29%). In accordance with Nasdaq’s board diversity listing standards, we are disclosing aggregated statistical information about our Board’s self-identified gender and racial characteristics as voluntarily confirmed to us by each of our directors.

  4. Board Diversity

    | Board Diversity Matrix (as of the date of this Proxy Statement) | | | | | | Total number of directors - 7 | | | | | | Gender identity: | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 2 | 5 | 0 | 0 | | Number of directors who identify in any of the categories below: | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or Native American | 0 | 1 | 0 | 0 | | Asian | 1 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Islander | 1 | 0 | 0 | 0 | | White | 1 | 5 | 0 | 0 | | Two or More Races or Ethnicities | 1 | 1 | 0 | 0 | | LGBTQ+ | 1 | | | | | Did Not Disclose Demographic Background | 0 | | | |

  5. Nominees and Incumbent Directors

    Nominees and Incumbent Directors The Nominating and Governance Committee has recommended, and the Board has nominated, Dr. Chen and Mr. Remmel to be reelected as Class III directors at the Annual Meeting. The following table sets forth the following information for these nominees and the Company’s continuing directors: the year each was first elected a director of the Company; their respective ages as of the date of this Proxy Statement; the positions currently held with the Company; the year their current term will expire; and their current class. There are no family relationships among any of our directors or executive officers, except for Dr. Chen, who is married to Dr. Quay.

  6. Nominees and Incumbent Directors

    | Nominee/Director Name and Year First Became a Director | Age | Position(s) with the Company | Year Current Term Expires | Current Director Class | | Nominees for Class III Directors: | | | | | | Shu-Chih Chen, Ph.D. (2009) | 62 | Director | 2024 | III | | H. Lawrence Remmel, Esq. (2012) | 72 | Director | 2024 | III | | Continuing Directors | | | | | | Steven C. Quay, M.D., Ph.D. (2009) | 73 | Chairman of the Board of Directors, President, and Chief Executive Officer | 2025 | I | | Jonathan F. Finn, C.F.A. (2023) | 51 | Director | 2025 | I | | Stephen J. Galli, M.D. (2011) | 77 | Director | 2026 | II | | Richard I. Steinhart (2014) | 67 | Director | 2026 | II | | Tessa Cigler, M.D., M.P.H. (2024) | 50 | Director | 2026 | II |

  7. Class III Director Nominees

    Class III Director Nominees Shu-Chih Chen, Ph.D. Dr. Chen has served as a director since April 2009. She was a founder of the Company and has served as Chief Scientific Officer of the Company since it was incorporated in April 2009 through August 2014. Prior to joining the Company, she was an Associate Professor at National Yang Ming University, Taipei, Taiwan, and served as the principal investigator of an NIH RO1 grant, studying tumor suppression by gap junction protein connexin 43, at the Department of Molecular Medicine at Northwest Hospital, Seattle, WA. She has two issued U.S. patents and 20 pending U.S. patent applications related to cancer therapeutics. Dr. Chen received her Ph.D. degree in microbiology and public health from Michigan State University in 1992 and has published extensively on molecular oncology. She received her B.S. degree in medical technology from National Yang Ming University, Taipei, Taiwan in 1984. Dr. Chen has been selected to serve on the Company’s Board of Directors because of her role as a founder of the Company and her qualifications in medical technology and as a professor and researcher in the field of cancer therapeutics. H. Lawrence Remmel, Esq. Mr. Remmel has served as a director of the Company since February 2012. He is currently a partner of the law firm Pryor Cashman LLP, located in New York City, where he chairs the Banking and Finance practice group. Mr. Remmel joined Pryor Cashman in 1988. His practice includes corporate and banking financings, issues relating to the Investment Company Act of 1940, and intellectual property and licensing issues, in particular in the biotechnology and biocosmeceutical areas. Mr. Remmel previously served on the Board of Advisors of CytoDel, LLC, an early-stage bio-pharmaceutical company developing products for bio-defense, neuronal drug delivery, and musculoskeletal and aesthetic medicine. In February 2018, he became a director of CytoDel, Inc., the successor to CytoDel LLC. In March 2019, he became a director of Aufbau Holdings Limited, an Irish limited company, developing therapeutics in ophthalmology and other areas. He was an associate of the law firm Reboul, MacMurray, Hewitt, Maynard & Kristol from 1984 to 1988, and began his legal career at Carter, Ledyard & Milburn, where he was an associate from 1979 to 1984. He was admitted to the New York bar in 1980 and is a member of the New York State Bar Association. He received his J.D. from the Washington & Lee University School of Law in 1979 and his B.A. from Princeton University in 1975. He currently is a doctoral candidate in the Graduate School of Life Sciences of the University of Utrecht, in the Department of Clinical and Translational Oncology, with a thesis project in hyperplasia and early-stage breast cancer. Mr. Remmel has been selected to serve on the Company’s Board of Directors because of his substantial experience as a corporate attorney advising biotechnology companies and his familiarity with the fiduciary duties and the regulatory requirements affecting publicly traded companies.

  8. Class I Directors Continuing in Office Until 2025

    Class I Directors Continuing in Office Until 2025 Steven C. Quay, MD., Ph.D. Steven C. Quay, M.D., Ph.D. has served as Chief Executive Officer, President and Chairman of the Board of Directors of the Company since the Company was incorporated in April 2009. Dr. Quay is certified in Anatomic Pathology with the American Board of Pathology, has completed both an internship and residency in anatomic pathology at Massachusetts General Hospital, a Harvard Medical School teaching hospital, and is a former faculty member of the Department of Pathology, Stanford University School of Medicine. Dr. Quay is a named inventor on 90 U.S. patents, 862 published US and international patent applications, and is a named inventor on patents covering seven pharmaceutical products that have been approved by the U.S. Food and Drug Administration. Dr. Quay received an M.D. in 1977 and a Ph.D. in 1975 from the University of Michigan. He received his B.A. degree in biology, chemistry and mathematics from Western Michigan University in 1971. He is a director and the Chair of the Governance Committee, of the Taipei-American School in Taipei, Taiwan. He was selected to serve on the Company’s Board of Directors because of his role as a founder of the Company, as well as his qualifications as a physician and the principal researcher overseeing the research, preclinical, clinical and regulatory development of the Company’s pharmaceutical programs. Jonathan F. Finn, C.F.A. Jonathan F. Finn has served as a director of the Company since November 2023. Mr. Finn has worked at Vantage Consulting Group, an investment advisory firm, since 1995 and served as Executive Vice President and Chief Investment Officer at Vantage since 2005. In this role, he directs investment strategy, asset allocation, manager selection and portfolio construction. Mr. Finn is also a Founding Partner of Scientia Ventures, a manager of venture capital funds that invest in companies targeting computational biology and chemistry, the digitization of medicine, digital therapies, and traditional drug development businesses at the cutting edge of the life sciences industry, and has served in this role since 2006. Earlier in his career, Mr. Finn was a portfolio manager for the Lindner family of mutual funds, serving as co-manager for the Small Cap and Asset Allocation funds from 2000 to 2001. He currently serves as director of Verigraft AB, a regenerative medicine venture, Rose Pharma LLC, a development stage specialty pain company, and Solör Bioenergy Holdings AB, a bioenergy business. Mr. Finn has a B.A. in Economics from the University of Virginia and holds the Chartered Financial Analyst designation. Mr. Finn has been selected to serve on the Company’s Board of Directors because of his qualifications as a business executive and his familiarity with investment strategy in the biotechnology sector.

  9. Class II Directors Continuing in Office Until 2026

    Class II Directors Continuing in Office Until 2026 Stephen J. Galli, M.D. Dr. Galli has served as a director of the Company since July 2011. Dr. Galli has been a Professor of Pathology and of Microbiology & Immunology and the Mary Hewitt Loveless, M.D., Professor, at Stanford University School of Medicine, Stanford, California since February 1999. He served as Chair of the Department of Pathology at Stanford University School of Medicine from 1999 to 2016. Before joining Stanford, he was on the faculty of Harvard Medical School. He holds 16 U.S. patents and has over 490 publications. He is the past president of the American Society for Investigative Pathology, the past president of the Collegium Internationale Allergologicum, and the past president of the Pluto Club (Association of University Pathologists). In addition to receiving several awards for his research, and being elected to the National Academy of Medicine (USA), the Accademia Nazionale de Lincei (Rome, Italy), and the American Clinical and Climatological Association, he was recognized with the 2010 Stanford University President’s Award for Excellence through Diversity for his recruitment and support of women and underrepresented minorities at Stanford University. He received his B.A. degree in biology, magna cum laude, from Harvard College in 1968 and his M.D. degree from Harvard Medical School in 1973 and completed a residency in anatomic pathology at the Massachusetts General Hospital in 1977. Dr. Galli has been selected to serve on the Company’s Board of Directors because of his qualifications as a professor and physician, and his specialized expertise as a pathologist. Richard I. Steinhart. Mr. Steinhart has served as a director of the Company since March 2014. Mr. Steinhart is currently the Senior Vice President and Chief Financial Officer of BioXcel Therapeutics, Inc., a clinical-stage biopharmaceutical company, which he joined in October 2017. From October 2015 to June 2017, he was Vice President and Chief Financial Officer of Remedy Pharmaceuticals, Inc., a privately held pharmaceuticals company. From January 2014 until he joined Remedy Pharmaceuticals, Mr. Steinhart acted as an independent financial consultant to various companies in the biotechnology and medical device industries. From April 2006 to December 2013, Mr. Steinhart was an executive at MELA Sciences, Inc., serving as its Senior Vice President, Chief Financial Officer, Treasurer and Secretary. From 1992 to 2006, Mr. Steinhart was Managing Director at Forest St. Capital/SAE Ventures. Earlier, he served as Vice President and Chief Financial Officer at Emisphere Technologies from 1991 to 1992 and as General Partner and Chief Financial Officer of CW Group Inc. Mr. Steinhart is a Member of the Board of Directors of Actinium Pharmaceuticals where he is Chairman of the Audit Committee. From 2004 to 2012, Mr. Steinhart was a Member of the Board of Directors of Manhattan Pharmaceuticals and was Chairman of the Audit Committee. Mr. Steinhart received his B.B.A. and M.B.A. degrees from Pace University. Mr. Steinhart has been selected to serve on the Company’s Board of Directors because of his qualifications as a business executive and audit committee financial expert, and his prior experience as a Chief Financial Officer, director and committee member of public companies. Tessa Cigler, M.D., M.P.H. Dr. Cigler joined the Company as a director in March 2024. Dr. Cigler is a medical oncologist whose work is dedicated to the treatment and prevention of breast cancer. Dr. Cigler joined the Cornell faculty in August 2007 as a medical oncologist and clinical investigator at the Weill Cornell Breast Center. As a member of the Weill Cornell Breast Center research team, she heads several clinical trials. Dr. Cigler received her undergraduate degree from Harvard College, and her M.D. from Duke University School of Medicine. She also holds a Master’s in Public Health from the Harvard School of Public Health. She completed her residency in Internal Medicine at New York Presbyterian Hospital Weill Cornell Medical Center, followed by a fellowship in Medical Oncology and Hematology at the Dana-Farber Harvard Cancer Center. The two director nominees who receive the highest number of affirmative votes cast will be elected as Class III directors. Votes that are withheld and broker non-votes, if any, are not counted as votes cast and will have no effect on the outcome of the matter. Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made but the card is signed, “FOR” the election of each of the director nominees named in this Proxy Statement. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES IDENTIFIED ABOVE.

  10. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Non-employee director compensation is generally reviewed and set annually at the Board meeting held in connection with the Annual Meeting of Stockholders. The non-employee directors of the Company received the following for service on the Board from May 2023 through May 2024: upon joining the Board, an initial fee of $50,000 in cash; • an annual cash payment of $50,000 for each board member; and • an annual grant of options exercisable for 125,000 shares. The Compensation Committee has engaged Aon to provide advice regarding the amount and form of director compensation. Based on their compensation analysis, and to more closely align with our peers, the annual grant of options was increased in May 2023 from 50,000 shares to 125,000 shares. All other Board compensation was unchanged. In addition to the above, annual compensation for service on the Audit Committee is $20,000 for the Chair and $15,000 for each committee member, paid in cash quarterly. Annual compensation for service on the Compensation Committee and Nominating and Governance Committee is $15,000 for the Chair and $10,000 for each committee member, paid in cash quarterly. The independent board members are also reimbursed on a case-by-case basis up to a pre-set amount for actual out of pocket expenses for graduate level course work in fields related to the business of the Company, though no such reimbursements were made with respect to 2023. The employee directors receive no compensation for their board service. Pursuant to the policies of Pryor Cashman, the law firm of which Mr. Remmel is a partner, the compensation Mr. Remmel receives for his services as a director (other than expense reimbursement) is paid to the firm directly. All directors receive reimbursement for reasonable travel expenses. The following table sets forth information regarding compensation earned by our non-employee directors during the fiscal year ended December 31, 2023:

  11. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash | Option Awards Dollar Amount(1) | Options Awards Number of Shares | All Other Compensation | Total | Outstanding Option Awards(2) | | Shu-Chih Chen, Ph.D. | $50,000 | $66,169 | 125,000 | $— | $116,169 | 366,555 | | Stephen Galli, M.D. | $78,750 | $66,169 | 125,000 | $— | $144,919 | 366,658 | | H. Lawrence Remmel, Esq.(3) | $78,750 | $66,169 | 125,000 | $— | $144,919 | — | | Richard Steinhart | $80,000 | $66,169 | 125,000 | $— | $146,169 | 364,926 | | Jonathan F. Finn, C.F.A.(4) | $60,834 | $33,146 | 62,500 | $— | $93,980 | 62,500 |

  12. DIRECTOR COMPENSATION

    (1) The value of the awards has been computed in accordance with Accounting Standards Codification Topic 718, Compensation - Stock Compensation (ASC 718). Assumptions used in the calculations for these amounts are included in the notes to our financial statements included in our Annual Report for the fiscal year ended December 31, 2023. Except for Mr. Finn, option awards consist of 2023 annual option grants, to purchase shares of Common Stock with an exercise price of $0.66, which was the fair value of our Common Stock at the time of grant. Options vest quarterly over a year. Mr. Finn’s Option awards were granted when he commenced service on the Board with an exercise price of $0.65, which was the fair value of our Common Stock at the time of grant. (2) The shares reported in this column represent the aggregate number of option awards outstanding as of December 31, 2023. (3) The compensation Mr. Remmel receives for his services as a director in the form of an option grant is assigned to the Pryor Cashman law firm of which Mr. Remmel is a partner. Mr. Finn was added to the Board on November 8, 2023.

  13. Summary Compensation Table

    Summary Compensation Table The following table sets forth the compensation earned by our President and Chief Executive Officer and Senior Vice President of Finance and Accounting, and our two former Chief Financial Officers (together, the “2023 Named Executive Officers”) for fiscal year 2023 and, in the case of Dr. Quay and Mr. Guse, fiscal year 2022:

  14. Summary Compensation Table

    | Name and Position | | Year | Salary | Bonus | Option Awards (1) | Non-equity Incentive Plan Compensation (2) | All Other Compensation (3) | Total | | Steven C. Quay, M.D. Ph. D. | President and Chief | 2023 | $705,910 | $— | $1,143,927 | $469,783 | $36,600 | $2,356,220 | | | Executive Officer | 2022 | $705,910 | $— | $2,019,697 | $402,369 | $32,900 | $3,160,876 | | Heather Rees, CPA (inactive) | Senior Vice President | 2023 | $331,585 | $— | $166,818 | $152,460 | $36,600 | $687,463 | | | Finance and Accounting | | | | | | | | | Kyle Guse | Former Chief Financial Officer, | 2023 | $248,358 | $— | $342,790 | $— | $580,483 | $1,171,631 | | | General Counsel and Secretary | 2022 | $466,658 | $— | $788,918 | $239,395 | $32,900 | $1,527,871 | | Greg Weaver | Former Chief Financial Officer | 2023 | $197,756(4) | $43,493(5) | $2,116,394 | $— | $21,783 | $2,379,426 |

  15. Summary Compensation Table

    (1) The value of the option awards has been computed in accordance with ASC 718. Assumptions used in the calculations for these amounts are included in the notes to our financial statements included in our Annual Report. The options vest quarterly over two years from the date of grant, except for 125,000 options with a grant date fair value of $66,169 that were granted to Mr. Weaver in connection with his service as a non-employee director prior to commencing service as Chief Financial Officer, which options were scheduled to vest quarterly over one year from the date of grant, and 2,600,000 options with a grant date fair value of $2,050,225 that were granted to Mr. Weaver in connection with his appointment as Chief Financial Officer, which options were scheduled to vest 25% on the one-year anniversary of the date of grant with the remainder scheduled to vest in equal quarterly installments over the following three years. In connection with his termination of service as Chief Financial Officer and a member of the Board, however, all of Mr. Weaver’s unvested options were terminated. (2) Amounts represent the annual performance bonus. (3) Amounts represent the 401(k) match made by the Company on behalf of the Named Executive Officer and reimbursements under our wellness program. For Mr. Guse the amount also includes a $553,533 severance payment. (4) Includes $33,333 paid to Mr. Weaver in connection with his service as a non-employee director prior to becoming Chief Financial Officer. Mr. Weaver received a sign on bonus of $125,000, but upon his resignation from the Company, he was required to return $81,507 to the Company per his employment agreement.

  16. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table shows information regarding our outstanding equity awards at December 31, 2023 for the 2023 Named Executive Officers under the Company’s Incentive Plans:

  17. Outstanding Equity Awards at Fiscal Year-End

    | Name | | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | | Steven Quay, | President and Chief | 5/6/2014 | 1,389 | — | $219.60 | 5/6/2024 | | M.D. Ph.D | Executive Officer | 3/16/2015 | 1,528 | — | $338.40 | 3/16/2025 | | | | 5/18/2016 | 3,163 | — | $47.34 | 5/18/2026 | | | | 5/24/2017 | 47,992 | — | $5.64 | 5/24/2027 | | | | 5/17/2019 | 2,300,000 | — | $1.36 | 5/17/2029 | | | | 4/9/2020 | 195,000 | — | $1.48 | 4/9/2030 | | | | 5/15/2020 | 1,305,000 | — | $1.48 | 5/15/2030 | | | | 5/14/2021 | 1,900,000 | — | $2.90 | 5/14/2031 | | | | 2/24/2022 | 1,662,500(1) | 237,500 | $1.25 | 2/24/2032 | | | | 3/2/2023 | 702,415(1) | 1,170,685 | $0.72 | 3/2/2033 | | Heather Rees, | Senior Vice President | 4/9/2020 | 32,500 | — | $1.48 | 4/9/2030 | | CPA (inactive) | Finance and Accounting | 7/3/2020 | 23,500 | — | $3.18 | 7/3/2030 | | | | 5/14/2021 | 129,700 | — | $2.90 | 5/21/2031 | | | | 8/11/2021 | 100,000 | — | $3.18 | 8/11/2031 | | | | 5/13/2022 | 112,500(1) | 37,500 | $0.93 | 5/13/2032 | | | | 6/12/2023 | 56,500(1) | 169,500 | $0.92 | 6/12/2033 | | Kyle Guse | Former Chief Financial Officer, | 1/8/2014 | 778 | — | $396.00 | 1/8/2024 | | | General Counsel and Secretary | 5/6/2014 | 1,112 | — | $219.60 | 5/6/2024 | | | | 3/16/2015 | 1,056 | — | $338.40 | 3/16/2025 | | | | 5/18/2016 | 6,056 | — | $47.34 | 5/18/2026 | | | | 5/24/2017 | 41,280 | — | $5.64 | 5/24/2027 | | | | 5/17/2019 | 800,000 | — | $1.36 | 5/17/2029 | | | | 4/9/2020 | 195,000 | — | $1.48 | 4/9/2030 | | | | 5/15/2020 | 395,000 | — | $1.48 | 5/15/2030 | | | | 5/14/2021 | 850,000 | — | $2.90 | 5/14/2031 | | | | 2/24/2022 | 606,669(2) | — | $1.25 | 2/24/2032 | | | | 3/2/2023 | 278,953(2) | — | $0.72 | 3/2/2033 | | Greg Weaver(3) | Former Chief Financial Officer | 5/6/2014 | 84 | — | $219.60 | 4/05/2024 | | | | 5/12/2015 | 223 | — | $246.60 | 4/05/2024 | | | | 5/18/2016 | 624 | — | $47.34 | 4/05/2024 | | | | 5/14/2021 | 50,000 | — | $2.90 | 4/05/2024 | | | | 5/13/2022 | 50,000 | — | $0.93 | 4/05/2024 | | | | 5/4/2023 | 31,250 | — | $0.66 | 4/05/2024 |

  18. Outstanding Equity Awards at Fiscal Year-End

    (1) Option vests quarterly over two years from the date of grant. (2) Option accelerated upon termination per Mr. Guse's employment agreement. Mr. Weaver’s vested options expired six months following his October 5, 2023 termination date.

  19. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of SEC Regulation S-K, we are providing the following specified disclosures regarding the relationship between the compensation actually paid to our executive officers and certain measures of financial performance. The following table reports the compensation of Steven Quay, our Chairman and CEO (our Principal Executive Officer, or “PEO”) and the average compensation of the other Named Executive Officers (our “Non-PEO NEOs”) as reported in the Summary Compensation Table for the past two fiscal years, as well as their “compensation actually paid” as calculated pursuant to the SEC rules (referred to as “CAP”).

  20. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1)(2) | Summary Compensation Table Total for Non-PEO NEOs (1) | Compensation Actually Paid to Non-PEO NEOs (1)(3) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(4) | Net Loss | | 2023 | $2,356,220 | $2,653,763 | $1,412,840 | $715,616 | $(7) | $(30,094,000) | | 2022 | $3,160,876 | $2,971,123 | $1,527,871 | $1,445,374 | $(44) | $(26,960,000) | | 2021 | $5,892,563 | $5,705,285 | $2,801,628 | $2,726,119 | $68 | $(20,606,000) |

  21. PAY VERSUS PERFORMANCE

    (1) Dr. Steven Quay is our PEO for each of the years shown. For 2023, our Non-PEO NEOs were Ms. Rees and Messrs. Guse and Weaver. Mr. Guse was our only Non-PEO NEO for years 2022 and 2021. (2) The table below shows the amount of CAP to our PEO, as computed in accordance with Item 402(v) of SEC regulation S-K. The dollar amounts reported do not reflect actual amount of compensation earned by or paid to our PEO during the applicable year, and the Compensation Committee did not consider CAP in making any executive compensation decisions with respect to our PEO. In accordance with SEC rules, these amounts reflect the “Total” compensation as set forth in the Summary Compensation Table for the applicable year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  22. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO | Equity Awards in SCT (A) | Equity Award Adjustments (B) | Compensation Actually Paid to PEO | | 2023 | $2,356,220 | $(1,143,927) | $1,441,470 | $2,653,763 | | 2022 | $3,160,876 | $(2,019,697) | $1,829,944 | $2,971,123 | | 2021 | $5,892,563 | $(4,707,913) | $4,520,635 | $5,705,285 |

  23. PAY VERSUS PERFORMANCE

    (A) Represents the amounts reported in the Option Awards column in the Summary Compensation Table (“SCT”) for the applicable year. (B) Represents the equity award adjustments (deductions and additions) for PEO equity awards for each applicable year calculated as follows:

  24. PAY VERSUS PERFORMANCE

    | Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year-over-Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in the Fair Value from Prior Fiscal Year End to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Award Adjustments | | 2023 | $1,093,739 | $(15,321) | $428,413 | $(65,361) | $1,441,470 | | 2022 | $1,226,109 | $(50,510) | $755,829 | $(101,484) | $1,829,944 | | 2021 | $3,454,245 | $(36,544) | $1,176,146 | $(73,212) | $4,520,635 |

  25. PAY VERSUS PERFORMANCE

    The table below shows CAP for the Non-PEO NEOs, as computed in accordance with Item 402(v) of SEC Regulation S-K. The dollar amounts reported do not reflect the actual amount of compensation earned by or paid to our Non-PEO NEOs during the applicable year, and the Compensation Committee did not consider CAP in making any executive compensation decisions with respect to our Non-PEO NEOs. In accordance with SEC rules, these amounts reflect the “Total” compensation as set forth in the Summary Compensation Table for the applicable year, on average, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  26. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for Non-PEO NEOs | Equity Awards in SCT (A) | Equity Award Adjustments (B) | Compensation Actually Paid to Non-PEO NEOs | | 2023 | $1,412,840 | $(875,334) | $178,110 | $715,616 | | 2022 | $1,527,871 | $(788,918) | $706,421 | $1,445,374 | | 2021 | $2,801,628 | $(2,108,013) | $2,032,504 | $2,726,119 |

  27. PAY VERSUS PERFORMANCE

    (A) Represents the average of the amounts reported in the Option Awards column in the Summary Compensation Table for the applicable year. (B) Represents the equity average award adjustments (deductions and additions) for our Non-PEO NEOs equity awards for the applicable year calculated as follows:

  28. PAY VERSUS PERFORMANCE

    | Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year-over-Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in the Fair Value from Prior Fiscal Year End to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Prior Year End Fair Value for Equity Awards Granted in Prior Years that were Forfeited During the Year | Total Equity Award Adjustments | | 2023 | $113,935 | $(536) | $76,474 | $(8,675) | $(3,088) | $178,110 | | 2022 | $480,268 | $(22,448) | $293,960 | $(45,359) | - | $706,421 | | 2021 | $1,547,312 | $(13,620) | $526,170 | $(27,358) | - | $2,032,504 |

  29. PAY VERSUS PERFORMANCE

    (4) Total Shareholder Return (“TSR”) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period, by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2020.

  30. Description of Certain Relationships between Information Presented in the Pay versus Performance Table

    Description of Certain Relationships between Information Presented in the Pay versus Performance Table While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Compensation Actually Paid and Cumulative TSR Compensation Actually Paid and Net Loss