DEF 14A of ClearPoint Neuro, Inc., Apr 9, 2025

DEF 14A of ClearPoint Neuro, Inc.

Filed Apr 9, 2025 · FY20240000950170-25-052528

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. What is the structure of our Board?

    What is the structure of our Board? Pursuant to Delaware law and our governing documents, our business and affairs are managed under the direction of our Board. Our Board is our ultimate decision-making and oversight body, except with respect to matters reserved to the stockholders. The directors are charged with the responsibility of exercising their fiduciary duties to act in our best interest and the best interest of our stockholders. Our Board selects and oversees members of executive management who have the authority and responsibility for the conduct of the day-to-day operations of the business. The number of directors that constitutes our Board is fixed from time to time by a resolution adopted by the affirmative vote of a majority of the authorized number of directors at any regular or special meeting of our Board. On an annual basis, the Corporate Governance and Nominating Committee will consider the size and composition of our Board and report to our Board the results of its review and any recommendations for change. Currently, our Board is fixed at eight directors. Our directors stand for election at each annual meeting of the stockholders and serve on our Board until the next annual meeting of the stockholders and until a successor has been duly elected and qualified or until such director’s earlier death, resignation, disqualification or removal.

  3. How are nominees evaluated? What are the minimum qualifications?

    How are nominees evaluated? What are the minimum qualifications? The Corporate Governance and Nominating Committee is responsible for recommending to the Board the type of skills and qualifications required of directors, based on our needs from time to time. In evaluating candidates for director, the Corporate Governance and Nominating Committee may consider several factors, including relevant experience, education, independence, commitment, prominence and understanding of the Company’s business, as well as any other factors it deems relevant. The Board will nominate individuals to serve on our Board only from director candidates screened and approved by the Corporate Governance and Nominating Committee and recommended to the Board. The directors’ experiences, qualifications and skills that the Corporate Governance and Nominating Committee considered in their nomination are included in their individual biographies.

  4. Who are the nominees this year?

    Who are the nominees this year? Upon the recommendation of the Corporate Governance and Nominating Committee, our Board has nominated the following eight persons to serve as directors: Joseph M. Burnett, R. John Fletcher, Lynnette C. Fallon, Pascal E.R. Girin, B. Kristine Johnson, Matthew B. Klein, Linda M. Liau and Timothy T. Richards. If elected, each nominee identified above will serve on our Board until the 2026 Annual Meeting of Stockholders or until his or her earlier death, resignation or removal. We anticipate that each of these nominees will be available for election, but if a situation arises in which he or she is unavailable, the proxy will be voted in accordance with the best judgment of the named proxies unless directed otherwise.

  5. What are the backgrounds and qualifications of this year’s nominees?

    What are the backgrounds and qualifications of this year’s nominees? Information about the following eight individuals nominated as directors is provided below.

  6. What are the backgrounds and qualifications of this year’s nominees?

    | Director Nominees | Age | | Joseph M. Burnett | 48 | | R. John Fletcher | 79 | | Lynnette C. Fallon | 65 | | Pascal E.R. Girin | 65 | | B. Kristine Johnson | 73 | | Matthew B. Klein | 53 | | Linda M. Liau | 58 | | Timothy T. Richards | 67 |

  7. What are the backgrounds and qualifications of this year’s nominees?

    Joseph M. Burnett joined us as President and Chief Executive Officer and became a member of our Board of Directors in November 2017. Before joining our Company, Mr. Burnett served as Vice President and General Manager of Neuro Diagnostics and Therapy at Philips, a publicly-traded global health technology company, since March 2016. Prior to serving in such role, Mr. Burnett was the Senior Vice President and Business Leader of Image Guided Therapy Devices at Philips and General Manager of Volcano Corporation (a Philips company) from February 2015 to March 2016. Before joining Philips, Mr. Burnett worked for Volcano Corporation, where he served in various positions from November 2004 to February 2015, most recently as Executive Vice President and General Manager of its Coronary & Systems Business Unit. Prior to joining Volcano Corporation, Mr. Burnett served as an R&D Engineer and Product Manager at Guidant Corporation from August 1999 to November 2004 and worked as a Bio-Medical Engineering Researcher at Duke University from May 1998 to May 1999. Mr. Burnett holds an MBA from The Fuqua School of Business at Duke University and a B.S.E. degree in Bio-Medical Engineering from Duke University. As our Chief Executive Officer, and as a result of his substantial leadership experience and expertise in the medical device industry and neurology, we believe Mr. Burnett offers a unique understanding of our business and industry that is invaluable to our Board. R. John Fletcher joined our Board in May 2017 and currently serves as Chairman of our Board. Mr. Fletcher founded Fletcher Spaght in 1983 where, as Managing Partner emeritus, he remains active in both the consulting practice and venture capital activities, with analytical insights and creative solutions derived from his years of experience with clients, portfolio companies and the investment community. Mr. Fletcher works across Fletcher Spaght’s practice groups, with a focus on healthcare. He has particular interests in devices, specifically in cardiology, cardiac surgery, and orthopedics, as well as in biopharma and healthcare IT. Prior to founding Fletcher Spaght, Mr. Fletcher was a Senior Manager at The Boston Consulting Group, advising a broad range of companies in healthcare and high technology industries. Mr. Fletcher serves on the Boards of Directors of KORU Medical Systems (Nasdaq: KRMD), Metabolon and OptiNose, Inc. (Nasdaq: OPTN), and served on the Board of Directors of Spectranetics until it was acquired by Philips in August 2017. He serves on the Board of Advisors of Beth Israel Deaconess Medical Center and the Whitehead Institute at MIT. Mr. Fletcher received his MBA from Southern Illinois University, an MS in International Finance from Central Michigan University, and a BBA in Marketing from George Washington University. He was an Instructor for courses in international business and a Ph.D. Candidate at the Wharton School of the University of Pennsylvania. He served as a Captain and jet pilot in the U.S. Air Force and continues to be active in aviation. We believe Mr. Fletcher brings strategic insight, leadership and a wealth of experience in healthcare to our Board. He has experience as a director on several publicly traded company Boards. Mr. Fletcher was named 2018 Director of the Year by The National Association of Corporate Directors (NACD) for his work leading to the turnaround at Spectranetics, as well as his contributions leading the success of other companies. Lynnette C. Fallon joined our Board in July 2021. Ms. Fallon is currently a Senior Advisor at Axcelis Technologies, Inc. (Nasdaq: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry, with locations in eight countries. Ms. Fallon served as Axcelis’ Executive Vice President, HR/Legal from May 2005 until February 2025, also holding the roles of General Counsel and Secretary from 2001 until December 2024. As a member of Axcelis’ executive team for more than 20 years, Ms. Fallon was involved with business development, financial and tax management, investor relations, public offerings, M&A, risk management, executive compensation, and all aspects of international corporate compliance. Before joining Axcelis, Ms. Fallon worked at the Boston law firm of Palmer & Dodge LLP as a partner from 1992 to 2001, prior to which she was an associate since 1987. During her more than 10 years at Palmer & Dodge, Ms. Fallon’s work was primarily for clients in the biotech industry. She was head of Palmer & Dodge’s business law department for the three years prior to joining Axcelis. Ms. Fallon’s M&A and financial transaction experience began in 1984 at a Wall Street boutique firm, doing tax-driven LBOs, venture capital and private equity transactions. She holds a J.D., cum laude, from the School of Law at Boston University and a B.A. with departmental and general honors, Phi Beta Kappa, from Vassar College. We believe that Ms. Fallon is qualified to serve on our Board given her extensive business and leadership experience and her legal expertise. Pascal E.R. Girin joined our Board in September 2014. Mr. Girin possesses over two decades of management and executive experience in the field of medical technology. Since September 2016, Mr. Girin has served as President and CEO of Balt SAS, a private company specializing in the treatment of neurovascular diseases, where he was recruited to lead the company’s global expansion. Mr. Girin served as Executive Vice President and Chief Operating Officer of Wright Medical Technology, Inc. from November 2012 until October 2015, at which time the company successfully merged with Tornier N.V. and formed Wright Medical Group N.V. Prior to joining Wright Medical, Mr. Girin served as President and Chief Executive Officer of Keystone Dental Inc. from February 2011 to June 2012, at which time the company successfully merged with Southern Implants Inc. From October 2010 to February 2011, Mr. Girin served as Executive Vice President and Chief Operating Officer of Keystone Dental Inc. From July 2010 to September 2010, Mr. Girin served as Chief Operating Officer of ev3 Inc. following its acquisition by a wholly owned subsidiary of Covidien Group S.a.r.l. Prior to that time, Mr. Girin served as Executive Vice President and Chief Operating Officer of ev3 Inc. from January 2010 to July 2010, as Executive Vice President and President, Worldwide Neurovascular and International of ev3 Neurovascular Inc. from July 2008 to January 2010, as Senior Vice President and President, International of ev3 International from July 2005 to July 2008, and as General Manager, Europe of ev3 Inc. from September 2003 to July 2005. From September 1998 to August 2003, Mr. Girin served in various capacities at BioScience Europe Baxter Healthcare Corporation, most recently as Vice President. Mr. Girin received an engineering education at the French Ecole des Mines. From November 2010 until November 2, 2012, Mr. Girin had served as a director of Tornier N.V., a publicly traded global medical device company, as well as a member of its Nominating, Corporate Governance and Compliance Committees. With nearly three decades of experience as an executive and director in the medical device industry, both in the U.S. and in Europe, we believe Mr. Girin brings invaluable industry experience and leadership qualities to our Board, as well as insight into international markets.

  8. What are the backgrounds and qualifications of this year’s nominees?

    B. Kristine Johnson joined our Board in September 2019. Ms. Johnson served as President and General Partner of Affinity Capital Management, a venture capital firm that invested primarily in seed and early-stage health care companies in the U.S., from 2000 to 2024. Prior to working for Affinity Capital Management, Ms. Johnson was employed for seventeen years at Medtronic, Inc., a manufacturer of cardiac pacemakers, neurological and spinal devices and other medical products, serving most recently as Senior Vice President and Chief Administrative Officer from 1998 to 1999. Her experience at Medtronic also includes service as President of the Vascular business and President of the Tachyarrhythmia Management business, among other roles. Ms. Johnson serves on the Boards of Directors of Atricure, Inc. (Nasdaq: ATRC) and Paragon28, Inc. (NYSE: FNA). She was previously lead director of the Piper Sandler Board and was recognized in 2018 by NACD for excellence in the boardroom. She has also served on the Boards of Directors for several public and private medical technology companies. Ms. Johnson earned a bachelor’s degree, summa cum laude, from St. Olaf College. She is also a recipient of the college’s Distinguished Alumni Award. We believe that Ms. Johnson’s extensive experience with health care companies and her leadership experience qualify her to serve on our Board. Matthew B. Klein joined our Board in April 2020. Dr. Klein serves as the Chief Executive Officer and President of PTC Therapeutics, Inc., or “PTC”. Dr. Klein joined PTC in October 2019 as Global Head Gene and Mitochondrial Therapies, became Chief Development Officer in April 2020, assumed the role of Chief Operating Officer in January 2022, and became Chief Executive Officer and President in March 2023. Prior to joining PTC, Dr. Klein was Chief Executive Officer and a Director of BioElectron Technology Corporation, or “BioElectron,” from 2018 to 2019. Dr. Klein served as the Chief Medical Officer of BioElectron from 2013 to 2019 and was Senior Vice President, Clinical Science at BioElectron from 2012 to 2013. Dr. Klein has a B.A. from the University of Pennsylvania, an M.D. from Yale University School of Medicine and an M.S. in epidemiology from the University of Washington School of Public Health. We believe that Dr. Klein is qualified to serve on our Board because of his medical background, leadership experience and gene therapy and biopharmaceutical industry expertise. Linda M. Liau joined our Board in November 2021. She is a Professor at the David Geffen School of Medicine at UCLA, and has served as the W. Eugene Stern Chair of the Department of Neurosurgery at the David Geffen School of Medicine at UCLA since 2017. She is also the Co-Director of the UCLA Brain Tumor Center and Principal Investigator and Director of the NCI-designated UCLA Brain Tumor SPORE (Specialized Program of Research Excellence). Dr. Liau has authored over 200 peer-reviewed research articles and is internationally recognized for her achievements in understanding the immunology of malignant brain tumors and pioneering the use of dendritic cell-based vaccines for glioblastoma. Clinically, she has developed novel ways to map brain function during awake brain tumor surgeries using functional MRI (fMRI) correlates and specializes in surgery for brain tumors in eloquent areas. Dr. Liau received her B.S. and B.A. degrees from Brown University. She earned her M.D. degree from Stanford University and a Ph.D. in Neuroscience from UCLA. After completing her residency and fellowship training in neurosurgery at UCLA, she joined the faculty at the UCLA School of Medicine. While practicing, she earned an MBA from the UCLA Anderson School of Management. We believe that Dr. Liau’s expertise in neurosurgery and her vast leadership experience qualify her to serve on our Board. Timothy T. Richards joined our Board in March 2014. Mr. Richards serves as the Chief Business Officer at Jana Care, a venture capital funded company focused on chronic kidney and heart disease testing and monitoring, a position he has held since December 2021. Prior to joining Jana Care, Mr. Richards was Chief Commercial Officer for YourBio Health (formerly Seventh Sense BioSystems, Inc.), and former President of Facet Technologies, LLC, a privately held supplier to major diagnostic companies. Additionally, Mr. Richards held executive-level positions within the Covidien organization, first as U.S. President of the Patient Care & Safety Products business unit and subsequently as President of VNUS Medical Technologies following its acquisition by Covidien in 2009. From October 2003 through October 2008, Mr. Richards served as Senior Vice President, Chief Marketing Officer and a member of the Executive Board of B. Braun Medical, Inc. Before joining B. Braun Medical, he held a number of progressive leadership positions throughout the U.S. and in Asia with Becton Dickinson and Company. We believe Mr. Richards brings to our Board extensive leadership experience and expertise in general management, manufacturing and R&D operations, commercial management and strategy in relevant markets and technologies.

  9. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table and accompanying footnotes set forth information with respect to the compensation of our non-employee directors in 2024.

  10. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) | Total ($) | | R. John Fletcher | 92,204(2) | 134,995(3) | — | 227,616 | | Lynnette C. Fallon | 67,500 | 134,995(3) | — | 202,494 | | Pascal E.R. Girin | 53,417(4) | 134,995(3) | — | 192,654 | | B. Kristine Johnson | 55,000 | 134,995(3) | — | 189,994 | | Matthew B. Klein | 40,000 | 134,995(3) | — | 174,994 | | Linda M. Liau | 47,344(5) | 134,995(3) | — | 182,494 | | Timothy T. Richards | 58,962(6) | 134,995(3) | — | 194,751 |

  11. DIRECTOR COMPENSATION

    (1) These amounts do not represent cash compensation paid to the named individuals. These non-cash amounts represent the aggregate grant date fair value of the restricted stock units as computed in accordance with the FASB Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 718. For a discussion of the assumptions made in the valuation of the awards, see the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Estimates–Share-Based Compensation” and Note 2 to the audited financial statements included our Annual Report on Form 10-K for the year ended December 31, 2024. (2) Under our Non-Employee Director Compensation Plan, Mr. Fletcher elected to receive 2,812 shares of our common stock in lieu of cash fees totaling $22,829. (3) In accordance with the Non-Employee Director Compensation Plan, this reflects the grant on May 16, 2024 of 21,093 restricted share units to each non-employee director under the Fifth Amended and Restated 2013 Incentive Compensation Plan. Subject to the director’s continued service, the restricted share unit awards vest on the earlier of May 16, 2025 or the day immediately preceding the next annual meeting of stockholders after the 2024 annual meeting. The Company’s closing common share price on May 16, 2024 was $6.40. (4) Under our Non-Employee Director Compensation Plan, Mr. Girin elected to receive 3,352 shares of our common stock in lieu of cash fees totaling $26,542. (5) Under our Non-Employee Director Compensation Plan, Dr. Liau elected to receive 1,443 shares of our common stock in lieu of cash fees totaling $11,719. (6) Under our Non-Employee Director Compensation Plan, Mr. Richards elected to receive 5,429 shares of our common stock in lieu of cash fees totaling $44,087. We adopted the 2013 Non-Employee Director Equity Incentive Plan (“DEIP”) in December 2013 to enable us to attract, retain and motivate non-employee directors of outstanding ability through the granting of stock-based awards. Of the 14,250 shares of common stock that were eligible for issuance pursuant to awards made under the DEIP, 2,500 shares of common stock were subject to options outstanding as of December 31, 2024, with a weighted average exercise price of $41.60 per share and expiring in June 2025. Although the DEIP remains in effect and options under the DEIP remain outstanding, stock-based awards to our non-employee directors are being issued under the 2013 Incentive Compensation Plan. In 2019, PTC Therapeutics, Inc. invested $4 million in the Company and acquired 1,290,323 shares of our common stock in our private placement. In connection with this transaction, PTC received a contractual right to designate a nominee to our Board which shall continue until the date as of which PTC owns less than 500,000 shares of the Company’s Common Stock. Since April 2020, Dr. Klein, PTC’s current Chief Executive Officer and President, has been PTC’s designated director on our Board. Other than as described above with respect to Dr. Klein, there are no arrangements between any director or director nominee and any person or entity other than the Company relating to the compensation or other payment in connection with the director or nominee’s candidacy or service.

  12. How is executive compensation determined?

    How is executive compensation determined? The compensation of our named executive officers is designed to tie a significant percentage of an executive’s compensation to the attainment of financial and other performance measures that the Board believes promote the creation of long-term stockholder value and position the Company for long-term success. As described more fully in the “Executive Compensation” section of the Proxy Statement, the mix of fixed and performance-based compensation, the terms of long-term incentive awards and the terms of executives’ employment agreements are designed to enable the Company to attract, motivate and retain key executives crucial to our long-term success while, at the same time, creating a close relationship between performance and compensation. The Compensation Committee and the Board believe that the design of the current compensation practices, and hence the compensation awarded to our named executive officers under the current compensation practices, fulfills this objective. The Compensation Committee, with support from our external compensation consultant, develops and administers our executive compensation program. The Compensation Committee bases compensation on scope of responsibility, market data from peer companies, and individual performance. The Compensation Committee considers an executive officer’s scope of duties and responsibilities to establish a compensation scheme that is both competitive and equitable, and promotes the executive officer’s long term engagement and high performance. Each year, the Compensation Committee, with support from our external compensation consultant, identifies a group of peer companies comparable in size, organizational structure, and complexity, and considers such market compensation when setting each component of compensation for our executive officers. The Compensation Committee also considers each individual executive officer’s contribution towards the Company’s annual performance plan goals which are set in advance and approved by our Board.

  13. Enrollment and Payroll Deductions

    Enrollment and Payroll Deductions Eligible employees participate by timely completing, signing and delivering an authorization form provided by the Company to have a whole number percentage of their regular and reoccurring cash compensation (including, but not limited to, sales commissions, but excluding any overtime pay or shift differentials, annual cash incentive compensation, and annual cash bonuses, and further excluding extraordinary cash items, all non-cash items, moving or relocation allowances, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, payments for or related to equity compensation, and any similar items) up to a maximum of 15% such compensation withheld during the applicable purchase period for the purpose of using such accumulated deductions to purchase common shares at the end of the purchase period. A purchase right entitles the participant to purchase the whole number of shares of common stock obtained by dividing the participant's payroll deductions for each purchase period by the purchase price in effect (which includes the discount) for that purchase period.

  14. Change of Control

    Change of Control In the event of a Corporate Transaction (which generally means a change of control of the Company), each outstanding right to purchase common shares will be assumed or an equivalent option will be substituted by the successor corporation. In the event that the successor corporation refuses to assume or substitute for the purchase right, the offering period with respect to which such purchase right relates will be shortened by setting a new purchase date (the “New Purchase Date”) and will end on the New Purchase Date. The New Purchase Date will occur on or prior to the consummation of the Corporate Transaction, and the Plan will terminate on the consummation of the Corporate Transaction. Applicable Law. The ESPP is governed by the substantive laws (excluding the conflict of laws rules) of the State of Delaware.

  15. Summary Compensation Table – Years Ended December 31, 2024 and 2023

    Summary Compensation Table – Years Ended December 31, 2024 and 2023 The following table shows the compensation awarded or paid to, or earned by, Joseph M. Burnett, our Chief Executive Officer, Danilo D’Alessandro, our Chief Financial Officer, and Jeremy L. Stigall, our Chief Business Officer, for the years ended December 31, 2024 and 2023. Mr. D’Alessandro and Mr. Stigall were our two most highly compensated executive officers in 2024 other than Mr. Burnett. We refer to these three executive officers as our “named executive officers.”

  16. Summary Compensation Table – Years Ended December 31, 2024 and 2023

    | Named Executive Officer | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Joseph M. Burnett | 2024 | 537,692 | 1,299,995 | — | 680,400 | 14,587 | 2,532,674 | | Chief Executive Officer | 2023 | 517,692 | 959,996 | 232,225 | 273,000 | 12,424 | 1,995,337 | | Danilo D’Alessandro | 2024 | 351,816 | 549,994 | — | 250,000 | 14,557 | 1,166,367 | | Chief Financial Officer | 2023 | 339,375 | 379,995 | 91,727 | 107,494 | 12,388 | 930,979 | | Jeremy L. Stigall | 2024 | 326,539 | 574,991 | — | 222,500 | 10,072 | 1,134,101 | | Chief Business Officer | 2023 | 300,000 | 359,996 | 85,842 | 84,000 | 8,656 | 838,494 |

  17. Summary Compensation Table – Years Ended December 31, 2024 and 2023

    (1) These amounts do not represent cash compensation paid to the named individual. These non-cash amounts represent the aggregate grant date fair value of the restricted stock units as computed in accordance with FASB Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 718. For a discussion of the assumptions made in the valuation of the awards, see the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Estimates–Share-Based Compensation” and Note 2 to the audited financial statements included our Annual Report on Form 10-K for the year ended December 31, 2024. On March 11, 2024, Mr. Stigall and Mr. D'Alessandro were granted 16,583 and 8,291 restricted share units under the Fourth Amended and Restated 2013 Incentive Compensation Plan, respectively. Subject to remaining in continued service to the Company, these restricted share units will incrementally vest 50% on each of March 11, 2025 and March 11, 2026. The last sales price of our common stock on March 11, 2024, as reported on the Nasdaq Capital Market, was $6.03. On May 20, 2024, Mr. Burnett, Mr. D'Alessandro and Mr. Stigall were granted 212,071, 81,566 and 77,487 restricted share units under the Fifth Amended and Restated 2013 Incentive Compensation Plan, respectively. Subject to remaining in continued service to the Company, these restricted share units will incrementally vest as follows: 20% upon March 12, 2025 and 40% on each of March 12, 2026 and March 12, 2027. The last sales price of our common stock on May 20, 2024, as reported on the Nasdaq Capital Market, was $6.13. (2) These amounts do not represent cash compensation paid to the named individual. These non-cash amounts represent the aggregate grant date fair value of the option awards as computed in accordance with the SEC’s Staff Accounting Bulletin 107. For a discussion of the assumptions made in the valuation of the awards, see the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Estimates–Share-Based Compensation” and Note 2 to the audited financial statements included our Annual Report on Form 10-K for the year ended December 31, 2024. (3) These amounts represent bonuses earned in each respective fiscal year, and paid in the first quarter of the subsequent fiscal year. (4) These amounts consist of: (i) the group life and disability premiums that we paid; and (ii) matching contributions we paid to the individual’s 401(k) plan that we sponsor.

  18. Summary Compensation Table – Years Ended December 31, 2024 and 2023

    | NEO | 401K Plan Company Matching Contributions ($) | Other Compensation ($) | Total for 2024 ($) | | Joseph M. Burnett | 13,800 | 787 | 14,587 | | Danilo D'Alessandro | 13,800 | 757 | 14,557 | | Jeremy L. Stigall | 9,315 | 757 | 10,072 |

  19. Summary Compensation Table – Years Ended December 31, 2024 and 2023

    We offer a 401(k) plan pursuant to Section 401(k) of the Code. All full-time United States employees, including the named executive officers, are eligible to participate in the plan. The plan permits pretax contributions by participants not to exceed annual amounts allowable under the Code. Participants are fully vested in their contributions.

  20. Payments Upon Termination or Change of Control

    Payments Upon Termination or Change of Control Termination Payments. Upon any termination of employment of any named executive officer, they will be entitled to receive any base salary and bonus compensation earned but unpaid as of the termination date along with any unreimbursed business expenses to which he is entitled as of the termination date. In the event the Company terminates the employment of a named executive officer without cause, if the named executive officer terminates his employment for good reason, or if there is a termination by the Company of the agreement’s term, as those terms are defined in his employment agreement, as amended, then he will be entitled to receive: (i) an amount equal to his annual base salary in effect on the termination date; (ii) an amount equal to his average bonus for the previous two years; and (iii) $18,000. In addition, (a) any unvested stock options and restricted stock previously granted to him prior to March 3, 2023 will become fully vested on the termination date and, in the case of stock options, will be exercisable until the earlier of three years after the termination date or the final expiration date provided for in the applicable option agreement; and (b) any unvested stock options and restricted stock granted to him on or after March 3, 2023 scheduled to vest within the twelve (12) month period following the termination date will become fully vested on the termination date and, in the case of stock options, will be exercisable until the earlier of one year after the termination date or the final expiration date provided for in the applicable option agreement. Change of Control Payments. Upon a change of control, as such term is defined in the named executive officer’s employment agreement, any unvested stock options and restricted stock previously granted to such named executive officer will become fully vested. In addition, if the Company terminates the named executive officer’s employment without cause, or if he terminates his employment for good reason, in either case within two months prior to or within 12 months following the change of control, then the named executive officer will be entitled to receive a lump sum payment equal to the sum of: (i) two times his annual base salary in effect on the termination date; (ii) two times the average of his two highest bonuses paid in the previous three years; and (iii) $18,000. In addition, outstanding stock options will be exercisable until the earlier of three years after the termination date or the final expiration date provided for in the applicable option agreement. The foregoing severance and change of control benefits are conditioned upon the named executive officer executing a release and waiver on such terms and conditions as the Company may reasonably require as a condition of entitlement to such benefits.

  21. Outstanding Equity Awards at December 31, 2024

    Outstanding Equity Awards at December 31, 2024 The table below sets forth information regarding the outstanding equity awards held by our named executive officers at December 31, 2024.

  22. Outstanding Equity Awards at December 31, 2024

    | | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock that have not vested (#) | Market Value of Shares of Stock that have not vested ($) | | Joseph M. Burnett | 350,000(1) | — | $2.50 | November 7, 2027 | — | — | | | 74,404(2) | — | $3.47 | August 15, 2029 | — | — | | | 52,356(3) | — | $3.24 | July 9, 2030 | — | — | | | 29,377(4) | — | $16.71 | August 20, 2031 | 28,046(5) | 431,347(5) | | | 28,046(6) | 18,697(6) | $11.41 | June 10, 2032 | 94,814(7) | 1,458,239(7) | | | 7,901(8) | 31,605(8) | $8.10 | March 6, 2033 | 212,071(9) | 3,261,652(9) | | Danilo D’Alessandro | 75,000(10) | — | $5.80 | September 29, 2030 | 9,360(5) | 143,957(5) | | | 11,750(4) | —(4) | $16.71 | August 20, 2031 | 37,530(7) | 577,211(7) | | | 9,360(6) | 6,240(6) | $11.41 | June 10, 2032 | 8,291(11) | 127,516(11) | | | 3,127(8) | 12,510(8) | $8.10 | March 6, 2033 | 81,566(9) | 1,254,485(9) | | Jeremy L. Stigall | 5,875(4) | —(4) | $16.71 | August 20, 2031 | 2,535(12) | 38,988(12) | | | 7,012(6) | 4,674(6) | $11.41 | June 10, 2032 | 7,011(5) | 107,829(5) | | | 2,963(8) | 11,851(8) | $8.10 | March 6, 2033 | 35,555(7) | 546,836(7) | | | | | | | 16,583(11) | 255,047(11) | | | | | | | 77,487(9) | 1,191,750(9) |

  23. Outstanding Equity Awards at December 31, 2024

    (1) One third of the shares subject to this option vested on the first anniversary of the grant date, November 7, 2018. The remaining two-thirds of the shares vested ratably in 8 equal quarterly installments beginning in the first quarter following the first anniversary of the grant date. (2) The shares subject to this option vested as follows: (i) 20% of the total shares on August 15, 2020; (ii) 40% of the total shares on August 15, 2021; and (iii) 40% of the total shares on August 15, 2022. (3) The shares subject to this option vested as follows: (i) 20% of the total shares on July 9, 2021; (ii) 40% of the total shares on July 9, 2022; and (iii) 40% of the total shares on July 9, 2023. (4) The shares subject to this option vested as follows: (i) 20% of the total shares on August 20, 2022; (ii) 40% of the total shares on August 20, 2023; and (iii) 40% of the total shares on August 20, 2024. (5) The shares subject to this restricted stock grant vested, or will vest, as follows: (i) 20% of the total shares on June 10, 2023; (ii) 40% of the total shares on June 10, 2024; and (iii) 40% of the total shares on June 10, 2025. (6) The shares subject to this option vested, or will vest, as follows: (i) 20% of the total shares on June 10, 2023; (ii) 40% of the total shares on June 10, 2024; and (iii) 40% of the total shares on June 10, 2025. (7) The shares subject to this restricted stock unit grant vested, or will vest, as follows: (i) 20% of the total shares on March 6, 2024; (ii) 40% of the total shares on March 6, 2025; and (iii) 40% of the total shares on March 6, 2026. (8) The shares subject to this option vested, or will vest, as follows: (i) 20% of the total shares on March 6, 2024; (ii) 40% of the total shares on March 6, 2025; and (iii) 40% of the total shares on March 6, 2026. (9) The shares subject to this restricted stock unit grant will vest as follows: (i) 20% of the total shares on March 12, 2025; (ii) 40% of the total shares on March 12, 2026; and (iii) 40% of the total shares on March 12, 2027. (10) The shares subject to this option vested as follows: (i) one-third of the total shares on September 29, 2021; (ii) one-third of the total shares on September 29, 2022; and (iii) one-third of the total shares on September 29, 2023. (11) The shares subject to this restricted stock unit grant will vest as follows: (i) 50% of the total shares on March 11, 2025 and (ii) 50% of the total shares on March 11, 2026. The shares subject to this restricted stock grant vested, or will vest, as follows: (i) 20% of the total shares on February 22, 2023; (ii) 40% of the total shares on February 22, 2024; and (iii) 40% of the total shares on February 22, 2025.

  24. Option Exercises

    Option Exercises None of our named executive officers exercised stock options in 2024.

  25. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The disclosures included in this section are prescribed by SEC rules and do not necessarily align with how the Company, our Board, or the Compensation Committee view the link between the Company's performance and named executive officer pay, and neither the Board nor the Compensation Committee uses compensation actually paid as the basis for making compensation decisions. The tabular disclosure and the following graphs were developed in accordance with SEC rules and do not fully represent the actual final amount of compensation earned by or actually paid to our named executive officers during the applicable fiscal years.

  26. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table total for PEO ($) (1)(2) | Compensation Actually Paid to PEO ($) (1)(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) (1)(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($) (1)(3) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($) | Net Income (Loss) ($ thousands) (4) | | 2024 | 2,532,674 | 5,879,998 | 1,150,234 | 2,511,546 | 137.08 | (18,914) | | 2023 | 1,995,337 | 1,460,479 | 884,737 | 654,045 | 42.73 | (22,089) | | 2022 | 2,130,142 | 1,933,980 | 835,055 | 652,882 | 53.30 | (16,435) |

  27. PAY VERSUS PERFORMANCE

    The NEOs included in these columns reflect the following:

  28. PAY VERSUS PERFORMANCE

    | Year | PEO | Non-PEO NEOs | | 2024 | Mr. Burnett | Mr. D'Alessandro and Mr. Stigall | | 2023 | Mr. Burnett | Mr. D'Alessandro and Mr. Stigall | | 2022 | Mr. Burnett | Mr. D'Alessandro and Mr. Stigall |

  29. PAY VERSUS PERFORMANCE

    (2) Amounts reflect the total compensation for our NEOs, as reported in the Summary Compensation Table for each applicable year. (3) In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards were remeasured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the tables below. For a discussion of the assumptions made in the valuation at grant, see the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Estimates–Share-Based Compensation” and Note 2 to the audited financial statements included our Annual Report on Form 10-K for the year ended December 31, 2024. For each fiscal year reflected, the "compensation actually paid" to the PEO and the average "compensation actually paid" to the non-PEO NEOs reflect the following adjustments made to the total compensation amounts reported in the Summary Compensation Table for each applicable fiscal year, computed in accordance with Item 402(v) of Regulation S-K.

  30. PAY VERSUS PERFORMANCE

    | | 2024 | 2023 | 2022 | | Summary Compensation Table Total for PEO | 2,532,674 | 1,995,337 | 2,130,142 | | Less: Grant Date Fair Value of Equity Awards | (1,299,995) | (1,192,211) | (1,209,602) | | Add: Year-End Fair Value of Awards Granted in the Applicable Year that are Outstanding and Unvested | 3,261,652 | 1,017,832 | 865,816 | | Add: Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | 1,390,188 | (207,879) | (175,560) | | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | (4,521) | (152,600) | 323,184 | | Add: Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | — | — | — | | Less: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | — | — | — | | Add: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | — | — | | Compensation Actually Paid for PEO | 5,879,998 | 1,460,479 | 1,933,980 |

  31. PAY VERSUS PERFORMANCE

    | | 2024 | 2023 | 2022 | | Average of Summary Compensation Table Total for NEOs (other than PEO) | 1,150,234 | 884,737 | 835,055 | | Less: Grant Date Fair Value of Equity Awards | (562,493) | (458,781) | (378,194) | | Add: Year-End Fair Value of Awards Granted in the Applicable Year that are Outstanding and Unvested | 1,414,399 | 392,284 | 279,546 | | Add: Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | 511,654 | (73,359) | (77,399) | | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | (2,248) | (90,836) | (6,126) | | Add: Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | — | — | — | | Less: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | — | — | — | | Add: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | — | — | | Average Compensation Actually Paid for NEOs (other than PEO) | 2,511,546 | 654,045 | 652,882 |

  32. PAY VERSUS PERFORMANCE

    Amounts reflect the Company's net income as reported in our audited financial statements for the applicable year.

  33. Description of Relationship Between Compensation Actually Paid and Company Performance

    Description of Relationship Between Compensation Actually Paid and Company Performance We generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “Compensation Actually Paid,” calculated in accordance with Item 402(v) of Regulation S-K, for a particular year. However, we believe the values reflected above for Compensation Actually Paid in each of the covered years demonstrate how the Compensation Committee structures our compensation program to prioritize “pay for performance.” It is important to note that Compensation Actually Paid to our NEOs does not necessarily reflect the actual value that an executive will receive in the stated fiscal year as such value will depend on a variety of factors. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following graphical descriptions of the relationship between compensation actually paid and certain Company financial performance metrics utilizing the information presented in the above Pay versus Performance table. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.