DEF 14A of Protara Therapeutics, Inc., Apr 26, 2024

DEF 14A of Protara Therapeutics, Inc.

Filed Apr 26, 2024 · FY20230001213900-24-036627

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our board of directors currently consists of nine members and is divided into three classes. Each class consists of one-third of the total number of directors, and each class has a three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to hold office from the time of election until the third annual meeting following the election. Our directors are divided into the three classes as follows: • Class I directors: Jane Huang, M.D., Richard Levy, M.D. and Michael Solomon, Ph.D., whose terms will expire at this Annual Meeting; • Class II directors: Luke Beshar, Roger Garceau, M.D. and Gregory Sargen, whose terms will expire at the annual meeting of stockholders to be held in 2025; and • Class III directors: Jesse Shefferman, Barry Flannelly, Pharm.D., and Cynthia Smith, whose terms will expire at the annual meeting of stockholders to be held in 2026. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Vacancies on the board of directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the board of directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of the Company. Dr. Huang, Dr. Levy and Dr. Solomon are currently members of our board of directors and have been nominated for reelection to serve as Class I directors. Each of these nominees has agreed to stand for reelection at the Annual Meeting. Our management has no reason to believe that any nominee will be unable to serve. If elected at the Annual Meeting, each of these nominees would hold office until the annual meeting of stockholders to be held in 2027 and until his or her successor has been duly elected or qualified, or if sooner, until the director’s death, resignation or removal. Directors are elected by a plurality of the votes of the holders of shares of our common stock present by virtual attendance or represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees, Dr. Huang, Dr. Levy and Dr. Solomon. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by us. Our nominating and corporate governance committee seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise, diversity and high-level management experience necessary to oversee and direct our business. To that end, the committee has identified and evaluated nominees in the broader context of the board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the committee views as critical to effective functioning of the board. To provide a mix of experience and perspective on the board, the committee also considers gender, ethnic, age and geographic diversity. The biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or director nominee that led the committee to believe that that nominee should continue to serve on the board. However, each of the members of the committee may have a variety of reasons why a particular person would be an appropriate nominee for the board, and these views may differ from the views of other members. Our Board Of Directors Recommends A Vote FOR Each Class I Director Nominee Named Above.

  2. Information Regarding Director Nominees and Current Directors

    Information Regarding Director Nominees and Current Directors The following table sets forth, for the Class I nominees and our other directors who will continue in office after the Annual Meeting, their ages and position or office held with us as of the Record Date:

  3. Information Regarding Director Nominees and Current Directors

    | Name | Age | Position | | Class I director nominees for election at the 2024 Annual Meeting of Stockholders | | | | Jane Huang, M.D. | 51 | Director | | Richard Levy, M.D. | 66 | Director | | Michael Solomon, Ph.D. | 54 | Director | | Class II directors continuing in office until the 2025 Annual Meeting of Stockholders | | | | Luke Beshar | 65 | Director, Chairman of the Board | | Roger Garceau, M.D. | 70 | Director | | Gregory Sargen | 58 | Director | | Class III directors continuing in office until the 2026 Annual Meeting of Stockholders | | | | Jesse Shefferman | 52 | Chief Executive Officer and Director | | Barry Flannelly, Pharm.D. | 66 | Director | | Cynthia Smith | 55 | Director |

  4. Information Regarding Director Nominees and Current Directors

    Set forth below is biographical information for the director nominees and each person whose term of office as a director will continue after the Annual Meeting. This includes information regarding each director’s experience, qualifications, attributes or skills that led our board of directors to recommend them for board service.

  5. Nominees for Election at the 2024 Annual Meeting of Stockholders

    Nominees for Election at the 2024 Annual Meeting of Stockholders Jane Huang, M.D. has served as a member of our board of directors since June 2021. Dr. Huang is an experienced biotech executive and proven leader throughout the development life cycle of multiple oncology therapeutics globally. Since April 2022, she has served as President and Chief Medical Officer of Prelude Therapeutics Incorporated, a clinical stage precision oncology company. From September 2016 until March 2022, Dr. Huang was Chief Medical Officer, Hematology at BeiGene, Ltd. At BeiGene, Dr. Huang oversaw hematology drug development, and played a key role in the first approval of tislelizumab, BeiGene’s PD-1 inhibitor as well as zanubrutinib, BeiGene’s BTK inhibitor. Prior to joining BeiGene, Dr. Huang was Vice President and Head of Development at Acerta Pharma B.V., where she oversaw global clinical development of the BTK inhibitor acalabrutinib. Previously, she served as Group Medical Director at Genentech (a member of the Roche Group) where she played a leading role in drug development programs for several molecules at all stages of development, including venetoclax and obinutuzumab. Dr. Huang also serves as a Clinical Assistant Professor (adjunct), Thoracic Oncology, at Stanford University. She received her B.S. from Stanford University and her M.D. from University of Washington School of Medicine. She is board certified in hematology, oncology, and internal medicine, and she completed her residency in Internal Medicine and fellowships in Hematology and Oncology at Stanford University. Our nominating and corporate governance committee and board of directors believe that Dr. Huang’s pharmaceutical and biotechnology industry experience qualifies her to serve on our board of directors. Richard Levy, M.D. served as a member of the board of directors of Private ArTara from December 2019 until the Merger and has served as a member of our board of directors since January 2020. Dr. Levy also currently serves on the board of directors of Kodiak Sciences Inc., Kiniksa Pharmaceuticals, Ltd. and Madrigal Pharmaceuticals, Inc., each a publicly traded pharmaceutical company. Dr. Levy previously served on the boards of directors of Aquinox Pharmaceuticals, Inc. and Constellation Pharmaceuticals Inc., each a publicly-traded pharmaceutical company, from March 2017 until March 2019 and from April 2019 until July 2021, respectively. Previously, from December 2016 until May 2019, Dr. Levy served as a part-time senior advisor for Baker Bros. Advisors, L.P., a firm that primarily manages long-term investment funds focused on publicly traded life sciences companies. Dr. Levy served as Executive Vice President and Chief Drug Development officer at Incyte Corporation from January 2009 until his retirement in April 2016, and as Senior Vice President of Drug Development at Incyte from August 2003 until January 2009. Prior to joining Incyte, Dr. Levy served as Vice President, Biologic Therapies, at Celgene Corporation, a publicly-held biopharmaceutical company, from 2002 until 2003. From 1997 until 2002, Dr. Levy served in various executive positions with DuPont Pharmaceuticals Company, first as Vice President, Regulatory Affairs and Pharmacovigilance, and thereafter as Vice President, Medical and Commercial Strategy. Dr. Levy served at Novartis AG, and its predecessor company, Sandoz AG, from 1991 until 1997 in positions of increasing responsibility in clinical research and regulatory affairs. Prior to joining the pharmaceutical industry, Dr. Levy served as an assistant professor of medicine at the UCLA School of Medicine. Dr. Levy is board certified in internal medicine and gastroenterology and received his A.B. in biology from Brown University, his M.D. from the University of Pennsylvania School of Medicine, and completed his training in internal medicine at the Hospital of the University of Pennsylvania and a fellowship in gastroenterology and hepatology at UCLA. Our nominating and corporate governance committee and board of directors believe that Dr. Levy’s more than 30 years of experience in the pharmaceutical and biotechnology industries, as well as his extensive board experience, qualifies him to serve on our board of directors. Michael Solomon, Ph.D. served as a member of the board of directors of Private ArTara from May 2018 until the Merger and has served as a member of our board of directors since January 2020. Dr. Solomon has more than 20 years of experience in the biotechnology industry and has spent the last 14 years focused on creating and operating early-stage companies. Dr. Solomon has served as Chief Executive Officer of Ribometrix, Inc., a privately held therapeutics company focused on targeting RNA with small molecules, since October 2017, and serves on its board. Dr. Solomon served as a venture partner at SV Health Investors from December 2016 until December 2018. Previously, Dr. Solomon served as Chief Operating Officer at Decibel Therapeutics, Inc., a biotechnology company focused on hearing disorders, from 2015 until 2016. Dr. Solomon served as Chief Operating Officer of Ember Therapeutics, Inc., a publicly traded pharmaceutical company, from 2012 until 2015, and as Chief Business Officer of Link Medicine Corporation, a privately held biopharmaceutical company, from 2009 until 2012. Dr. Solomon was a founder and Vice President of Discovery at Epizyme Therapeutics, Inc., a clinical stage biopharmaceutical company, and Vice President of Discovery at Hypnion, Inc., a sleep disorder company that was sold to Eli Lilly and Company in 2007. Dr. Solomon earned his B.S. in chemistry from the University of Massachusetts, Amherst and his Ph.D. in organic chemistry from the University of Wisconsin. Our nominating and corporate governance committee and board of directors believe that Dr. Solomon’s industry experience in creating and operating early-stage companies qualifies him to serve on our board of directors.

  6. Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders Luke Beshar served as a member of the board of directors of Private ArTara from October 2018 until the Merger and has served as Chairman of our board of directors since January 2020. Mr. Beshar has over 30 years of experience in serving as chief financial officer and in executive leadership roles principally for publicly traded and privately held pharmaceutical companies. Mr. Beshar has served on the board of directors of Omega Therapeutics, Inc., a publicly traded biotechnology company developing epigenetic technology, since May 2021, and has served as chairman of the board of directors of Inotrem Therapeutics, S.A., an advanced clinical stage privately-owned biotechnology company specializing in immunotherapy to control dysregulated inflammatory reactions, since May 2022. Mr. Beshar served on the board of directors of REGENXBIO, Inc., a publicly traded leading clinical-stage gene therapy company, from May 2015 until September 2021, and Trillium Therapeutics Inc., a publicly traded immuno-oncology company, from March 2014 until November 2021 when the company was acquired by Pfizer Inc. Previously, Mr. Beshar served as Executive Vice President, Chief Financial Officer of NPS Pharmaceuticals, Inc., a publicly traded global biopharmaceutical company focused on rare diseases, from 2007 until February 2015 when the company was acquired by Shire plc. Prior to NPS Pharmaceuticals, Mr. Beshar served as Executive Vice President, Chief Financial Officer of Cambrex Corporation, a publicly traded manufacturer of branded and generic active pharmaceutical ingredients and provider of related services, from 2002 until 2007. Mr. Beshar began his career with Arthur Andersen & Co. and is a certified public accountant. Mr. Beshar earned his B.A. in accounting and financial administration from Michigan State University and is a graduate of The Executive Program at the Darden Graduate School of Business at the University of Virginia. Our nominating and corporate governance committee and board of directors believe that Mr. Beshar’s executive leadership and financial experience and his extensive director experience on other publicly held biotechnology companies qualifies him to serve on our board of directors. Roger Garceau, M.D. served as a member of the board of directors of Private ArTara from January 2019 until the Merger and has served as a member of our board of directors since January 2020. Dr. Garceau has more than 30 years of broad pharmaceutical industry experience. He has served as a member of the board of directors of Entera Bio Ltd., a biotechnology company specializing in the oral delivery of large molecules and biologics and has served as its interim Chief Executive Officer from August 2020 to January 2021 and as its Chief Development Advisor from December 2016 to December 2021 (excluding the period he served as interim Chief Executive Officer). Prior to joining Entera, Dr. Garceau served as Chief Medical Officer and Executive Vice President of NPS Pharmaceuticals, Inc. from December 2008 and January 2013, respectively, until February 2015, when the company was acquired by Shire plc. Previously, Dr. Garceau also served in several other managerial positions with NPS Pharmaceuticals, Sanofi S.A. and Pharmacia Corporation. Dr. Garceau has served as a member of the board of directors of Enterome S.A., a privately held clinical-stage biopharmaceutical company, since December 2016. Dr. Garceau is a board-certified pediatrician and is a fellow of the American Academy of Pediatrics. Dr. Garceau earned his B.S. in biology from Fairfield University and his M.D. from the University of Massachusetts Medical School. Our nominating and corporate governance committee and board of directors believe that Dr. Garceau’s pharmaceutical industry experience, both in management and at the board level, qualifies him to serve on our board of directors. Gregory Sargen served as a member of the board of directors of Private ArTara from November 2019 until the Merger and has served as a member of our board of directors since January 2020. Mr. Sargen most recently served as Chief Financial Officer and Executive Vice President, Corporate Development and Strategy of Cambrex Corporation from January 2017 until January 2020, following the December 2019 acquisition of Cambrex by a private equity company. Mr. Sargen previously served in various managerial roles at Cambrex from February 2007 to January 2017. Prior to Cambrex, Mr. Sargen served as Executive Vice President, Chief Financial Officer of Expanets, Inc., a communications company, from 1999 until 2002, as Vice President of Finance at Fisher Scientific International, Inc.’s chemicals manufacturing division, from 1996 until 1998, and held various positions in finance, accounting and auditing with Merck & Co., Inc., Heat and Control, Inc. and Deloitte & Touche LLP. Mr. Sargen also serves on the boards of Avid Bioservices, Inc., a publicly traded contract manufacturer focused on the development and manufacture of biopharmaceuticals derived from mammalian cell culture, Umoja Biopharma, Inc., a privately owned biotechnology company developing next-generation immunotherapies, Kindeva Drug Delivery, L.P., a privately owned contract development and manufacturing organization (“CDMO”) of complex drug delivery systems, and Veranova, L.P., a global CDMO focused on specialty active pharmaceutical ingredients. Mr. Sargen is a Certified Public Accountant (non-practicing) and earned his B.S. in accounting from Pennsylvania State University and his M.B.A. in finance from The Wharton School of the University of Pennsylvania. Our nominating and corporate governance committee and board of directors believe that Mr. Sargen’s industry experience, both in management and at the board level, qualifies him to serve on our board of directors.

  7. Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders Jesse Shefferman co-founded Private ArTara and served as its Chief Executive Officer and a member of its board of directors from November 2017 until the Merger and has served as our Chief Executive Officer and a member of our board of directors since January 2020. Prior to co-founding Private ArTara, Mr. Shefferman served as Vice President and Head of Business Development at Retrophin Inc., a publicly traded company focusing on rare diseases, from March 2014 until October 2017. Prior to Retrophin, Mr. Shefferman served as Director, Strategy & Business Development at Vertex Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, from September 2012 until March 2014. Mr. Shefferman previously served as an investment banker with Barclays Plc and Lehman Brothers Inc. Mr. Shefferman earned his B.A. in accounting from Gordon College and his M.B.A. and certificate in health sector management from Duke University’s Fuqua School of Business. Our nominating and corporate governance committee and board of directors believe that Mr. Shefferman’s experience in strategy, management and financial roles in the biopharmaceutical industry qualifies him to serve on our board of directors. Barry P. Flannelly, Pharm.D. has served as a member of our board of directors since July 2020. Dr. Flannelly has served as Executive Vice President and General Manager US of Incyte Corporation, a publicly traded biopharmaceutical company, since June 2015 and joined Incyte Corporation as Executive Vice President, Business Development and Strategic Planning in August 2014. Prior to joining Incyte Corporation, he served as Chief Executive Officer of OSS Healthcare Inc., a biotechnology start-up company, from August 2013 to July 2014. Dr. Flannelly also served as Vice President, Global Product Strategy and Commercial Planning of Nektar Therapeutics, a biopharmaceutical company, from April 2011 until April 2013, and as Senior Vice President, Commercial, of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from August 2008 until January 2011. Dr. Flannelly has also held key positions at biopharmaceutical and pharmaceutical companies such as Abraxis BioScience, Inc. and Novartis Pharmaceuticals Corporation. Dr. Flannelly also served on the board of directors of Genomic Health, Inc., a publicly traded genomic-based diagnostic company, in 2019 until its merger with Exact Sciences Corp. Dr. Flannelly earned his B.S. degree in Pharmacy from the Massachusetts College of Pharmacy, his M.B.A. from the University of Baltimore and his Pharm.D. from the University of Maryland School of Pharmacy. Our nominating and corporate governance committee and board of directors believe that Dr. Flannelly’s pharmaceutical and biotechnology industry experience, both in management and at the board level, qualifies him to serve on our board of directors. Cynthia Smith has served as a member of our board of directors since January 2021. Ms. Smith is a biotechnology executive with over 20 years of experience in the pharmaceutical industry. From June 2013 to December 2016, she was Chief Commercial Officer of ZS Pharma, Inc. through the company’s initial public offering and acquisition by Astra Zeneca Plc. From October 2008 to March 2013, Ms. Smith was Vice President, Market Access & Commercial Development at Affymax, Inc., a biotechnology company focused on the development and commercialization of novel renal therapies. Prior to Affymax, Ms. Smith was Executive Director of Healthcare System and Medicare Strategy at Merck & Co., Inc. During her tenure at Merck from June 2000 to October 2008, she also held various leadership positions in corporate strategy, public policy, and external affairs, including global crisis management for the Vioxx recall. Before joining the pharmaceutical industry, Ms. Smith served in the White House Office of Management and Budget in the Clinton Administration. She has served on the board of directors of Agios Pharmaceuticals, Inc., a publicly-traded biopharmaceutical company focused on cellular metabolism and adjacent areas of biology, since August 2022, and also serves on the boards of directors of Spero Therapeutics, Inc. and Akebia Therapeutics, Inc. She previously served on the board of Dicerna Pharmaceuticals, Inc. until its acquisition by Novo Nordisk A/S in December 2021. She also is a board member of the French American Foundation. Ms. Smith earned a B.A. from the University of North Carolina at Chapel Hill, an M.S. in public policy from the Eagleton Institute of Politics at Rutgers University and an M.B.A. from The Wharton School of the University of Pennsylvania. Our nominating and corporate governance committee and board of directors believe that Ms. Smith’s pharmaceutical and biotechnology industry experience qualifies her to serve on our board of directors.

  8. Board diversity matrix

    Board diversity matrix In accordance with Nasdaq’s board diversity listing standards, we are also disclosing aggregated statistical information about our board’s self-identified gender and demographic background characteristics as voluntarily confirmed to us by each of our directors.

  9. Board diversity matrix

    | Board Diversity Matrix (as of the Record Date) | | | | Total Number of Directors – 9 | | | | | Female | Male | | Directors | 2 | 7 | | Number of Directors who identify in any of the categories below: | | | | Asian | 1 | | | White | 1 | 6 | | Did Not Disclose Demographic Background | | 1 |

  10. information regarding the board of directors and corporate governance

    information regarding the board of directors and corporate governance

  11. APPROVAL OF THE 2024 EQUITY INCENTIVE Plan

    APPROVAL OF THE 2024 EQUITY INCENTIVE Plan At the Annual Meeting, our stockholders will be asked to approve the Protara Therapeutics, Inc. 2024 Equity Incentive Plan (the “2024 Plan”). The Board adopted the Plan on April 25, 2024, subject to approval by our stockholders at the Annual Meeting. If approved by our stockholders, the Plan will become effective as of the date on which the Plan is so approved and will replace our current plan, the Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”), and we will cease granting awards under the 2014 Plan and any shares remaining available for future issuance under the 2014 Plan will be cancelled and will no longer be available for future issuance; however, the 2014 Plan will in any event continue to govern awards previously granted under it. An aggregate of 1,500,000 shares of our common stock have initially been reserved for issuance under the 2024 Plan. The Board believes that the future success of the Company depends on our ability to attract and retain the best available employees responsible for the continued development and growth of our business and that the ability to grant equity awards is a necessary and powerful recruiting and retention tool for the Company. We believe that equity awards motivate high levels of performance, align the interests of our personnel and stockholders by giving our personnel an opportunity to hold an ownership stake in the Company, and provide an effective means of recognizing their contributions to the success of the Company. In addition, stock options, restricted stock units and other types of equity awards are considered a competitive necessity in the life sciences and biotechnology industries in which we compete. If our stockholders do not approve the 2024 Plan, the Plan will not become effective. In that case, the 2014 Plan will continue to be administered in its current form and will expire on August 21, 2024, unless sooner terminated by the Board. As discussed below, the 2024 Plan includes features that are designed to protect the interests of our stockholders and we believe it is beneficial for our stockholders to approve the 2024 Plan and to discontinue the use of the 2014 Plan. As of April 11, 2024, an aggregate of 672,582 shares remain available for issuance under our equity incentive plans (excluding our 2014 Employee Stock Purchase Plan (the “2014 ESPP”)), comprised of 480,779 shares available for issuance under the 2014 Plan and 191,803 shares available for issuance under our 2020 Inducement Plan (the “Inducement Plan”). As of April 11, 2024, an aggregate of 4,321,871 shares were subject to outstanding awards granted pursuant to our equity incentive plans, comprised of stock options to purchase 3,733,857 shares and 588,014 shares subject to restricted stock unit awards. The per share weighted-average exercise price of the outstanding stock options is $7.70 and the weighted average remaining term of the outstanding options was 7.93 years.

  12. Purpose of the 2024 Plan

    Purpose of the 2024 Plan Our board adopted the 2024 Plan to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants, to promote the success of our business and to align employee’s interests with stockholders’ interests. These incentives can be provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock and cash awards.

  13. Shares Available for Issuance

    Shares Available for Issuance Subject to the adjustment provisions in the 2024 Plan, our stockholders are being asked to approve a number of shares for issuance under the 2024 Plan equal to 1,500,000 new shares. If we substitute equity awards for equity awards of acquired entities in connection with mergers, reorganizations, separations, or other transactions as described in the 2024 Plan, the grant of such substituted awards will not decrease the number of shares available for issuance under the 2024 Plan. Shares may either be authorized, but unissued shares or shares held by the Company in its treasury. If an option or stock appreciation right granted under the 2024 Plan expires, terminates, or is cancelled for any reason without having been exercised in full, if any other award is forfeited, or if the award is settled for cash (in whole or in part) the shares of stock not purchased by the holder of the award, which are forfeited or which are settled in case, as the case may be, will again be available for awards to be granted under the 2024 Plan. In the event of certain dividends or other distributions (whether in the form of cash, shares, other securities, or other property), reorganization, recapitalization, reclassification, stock split, reverse stock split or other similar distribution affecting our shares, the 2024 Plan administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2024 Plan, will adjust the number and kinds of shares that may be delivered under the 2024 Plan, and/or the number, class and price of shares of stock subject to outstanding awards, and exercise price or repurchase price, as applicable. During the term of this 2024 Plan, we will at all times reserve and keep available a number of shares sufficient to satisfy the requirements of the 2024 Plan.

  14. Limitations on Awards to Non-Employee Directors

    Limitations on Awards to Non-Employee Directors The 2024 Plan also provides that no non-employee director may be paid compensation for their service as a director that, in the aggregate, exceeds $750,000 for any fiscal year of ours, increased to $1,000,000 for the non-employee director for our fiscal year in which he or she joins our board of directors as a non-employee director. For these purposes, compensation includes equity awards (including any awards issued under the 2024 Plan), with the value of such equity awards measured based on the accounting grant date fair value, and any other compensation (such as cash retainers or fees) for director service.

  15. Minimum Vesting Requirements

    Minimum Vesting Requirements Any awards that are payable in shares of our common stock under the 2024 Plan will vest no earlier than the first anniversary of the grant date of the award, other than awards in respect of a maximum of 5% of the shares available for grant under the 2024 Plan. The administrator may also provide for accelerated vesting in connection with a participant’s death, disability, retirement or other involuntary termination or in connection with a change of control.

  16. Eligibility

    Eligibility All types of awards, other than incentive stock options, may be granted to officers, employees, consultants and advisors of ours and our affiliates and to our non-employee directors or any director of any of our affiliates. No non-employee director, however, may be paid compensation for service as a non-employee director that, in the aggregate, exceeds $750,000 for any fiscal year of ours, increased to $1,000,000 for the non-employee director for our fiscal year in which he or she joins our board of directors as a non-employee director. Incentive stock options may be granted only to employees of ours or any parent or subsidiary corporation of ours. As of April 11, 2024, we had approximately 25 employees (including one employee director), eight non-employee directors and approximately four consultants who would be eligible to participate in the 2024 Plan.

  17. Options

    Options An option gives a participant the right to purchase a specified number of shares for a fixed exercise price during a specified period. Each option granted under the 2024 Plan will be evidenced by an award agreement specifying the number of shares subject to the option and the other terms of the option, consistent with the 2024 Plan. The exercise price per share of each option may not be less than the fair market value of a share on the date of grant (except, in the case of a nonstatutory stock option, as otherwise required by applicable laws). However, any incentive stock option granted to a person who at the time of grant owns stock representing more than 10% of the total combined voting power of all classes of our stock or any parent or subsidiary corporation of ours (a “Ten Percent Owner”) must have an exercise price per share equal to at least 110% of the fair market value of a share on the date of grant. For this purpose, the fair market value of a share is generally the closing sales price of our stock, as reported on the primary stock exchange on which it is traded. On April 11, 2024, the closing price of a share on The NASDAQ Global Market was $3.09. Options will be exercisable at such times or under such conditions as determined by the administrator and set forth in the award agreement. When a participant’s service ends, the unvested portion of the participant’s option generally expires. The vested portion of the option will remain exercisable for the period following the end of the participant’s service that was determined by the administrator and specified in the participant’s award agreement, and if no such period was specified in the award agreement, the vested portion of the option will remain exercisable for 90 days following the end of the participant’s service provider status. The term of an option will be specified in the award agreement, but the term of an option may not be more than 10 years (or five years for an incentive stock option granted to a Ten Percent Owner). The administrator will determine the acceptable form(s) of consideration for exercising an option. An option will be deemed exercised when we receive the notice of exercise and full payment for the shares to be exercised, together with any amounts necessary to satisfy withholding obligations for tax-related items.

  18. Restricted Stock Awards

    Restricted Stock Awards Awards of restricted stock are awards of shares that are nontransferable and subject to a risk of forfeiture until specific conditions established by the administrator in its sole discretion have been met. Unless the administrator provides otherwise, participants holding shares of restricted stock will have voting rights with respect to such shares without regard to vesting. All ordinary cash dividends or other ordinary cash distributions paid upon any restricted stock will be retained by the Company and will be paid to the participant when the restricted stock vests. All ordinary stock dividends or other distributions payable in shares of stock or other securities of the Company will constitute additional restricted stock, subject to the same risk of forfeiture as the shares of restricted stock in respect of which such shares of stock were paid.

  19. Restricted Stock Units

    Restricted Stock Units A restricted stock unit represents a right to receive shares upon the end of the restriction period established by the administrator and subject to a risk of forfeiture arising on the basis of such conditions relating to the performance of services, Company or affiliate performance or otherwise as the administrator may determine and provide for in the applicable award agreement. Each award of restricted stock units granted under the Plan will be evidenced by an award agreement specifying the number of shares subject to the award and other terms of the award. A participant will forfeit any unearned restricted stock units on the date specified in the participant’s award agreement. The administrator in its sole discretion may pay earned restricted stock units in cash, shares, or a combination of both.

  20. Performance Units and Performance Shares

    Performance Units and Performance Shares Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. Performance units will have an initial value established by the administrator on or before the date of grant. Performance units and performance shares will result in a payment to a participant only if the performance goals or other vesting criteria set by the administrator are achieved or the awards otherwise vest. Each award of performance units or performance shares granted under the 2024 Plan will be evidenced by an award agreement specifying the performance period and other terms of the award. The administrator may set vesting criteria based upon the achievement of company-wide, divisional, business unit or individual goals (such as continued employment or service), applicable U.S. or non-U.S. federal or state securities laws, or any other basis determined by the administrator, in its discretion. The administrator has the discretion to pay earned performance units or performance shares in the form of cash, shares (which will have an aggregate fair market value equal to the earned performance units or performance shares at the close of the performance period), or a combination of both. A participant will forfeit any performance units or performance shares not earned and not vested as of the date specified in the participant’s award agreement.

  21. Change of Control

    Change of Control If the Company terminates the employment of a participant in the 2024 Plan without cause, or if a participant in the 2024 Plan resigns his or her employment with the Company for good reason, either case, on or within two (2) years after a change of control, then, any and all options and stock appreciation rights not already exercisable in full will fully accelerate and become exercisable; any risk of forfeiture applicable to restricted stock and restricted stock units which is not based on achievement of performance goals or other business objectives will lapse; and all outstanding awards of restricted stock and restricted stock units conditioned on the achievement of performance goals or other business objectives and the payouts attainable under outstanding performance units will be deemed to have been satisfied based on the greater of target and actual performance as of the effective date of the change of control, except to the extent otherwise determined by the administrator in its sole discretion at any time prior to, or upon, such change of control. For awards granted to each of our non-employee directors, in the event of a change in control, all shares subject to any then-outstanding and unvested equity awards granted pursuant to our non-employee director compensation policy will become fully vested immediately prior to the closing of such change in control.

  22. Termination and Amendment

    Termination and Amendment The administrator may amend, alter, suspend, or terminate the 2024 Plan at any time; provided, that, without stockholder approval, no amendment or modification may (i) increase the number of shares of stock which may be issued under the 2024 Plan, (ii) change the description of the persons eligible for awards, or (iii) effect any other change for which stockholder approval is required by law or the rules of any relevant stock exchange . No amendment, alteration, suspension, or termination may impair the rights of any participant with respect to his or her outstanding awards unless mutually agreed otherwise between the participant and the administrator. The 2024 Plan will continue until terminated by the administrator, but no incentive stock option may be granted after the tenth anniversary of the 2024 Plan’s adoption by our board of directors. Notwithstanding the prior paragraph, the administrator may amend the terms of any one or more awards without an affected participant’s consent even if it does impair the participant’s rights, subject to the limitations of applicable laws, if any, if (i) such amendment is done in a manner expressly permitted under the Plan; (ii) the administrator determines in its sole discretion and prior to the date of any change of control that such amendment or alteration either is required or advisable in order for the Company, the 2024 Plan or the award to satisfy any law or regulation, including without limitation the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, (iii) the administrator determines in its sole discretion and prior to the date of any change of control that such amendment or alteration is not reasonably likely to significantly diminish the benefits provided under the award, or that any such diminution has been adequately compensated, or (iv) the administrator reasonably determines on or after the date of change of control that such amendment or alteration either is required or advisable in order for the Company, the 2024 Plan or the award to satisfy any law or regulation, including without limitation the provisions of Section 409A of the Code.

  23. Incentive Stock Options

    Incentive Stock Options A participant recognizes no taxable income for regular income tax purposes because of the grant or exercise of an option that qualifies as incentive stock option under Section 422 of the Code. If a participant exercises the option and then later sells or otherwise disposes of the shares acquired through the exercise of the option after both the two-year anniversary of the date the option was granted and the one-year anniversary of the exercise, the participant will recognize a capital gain or loss equal to the difference between the sale price of the shares and the exercise price. However, if the participant disposes of such shares either on or before the two-year anniversary of the date of grant or on or before the one-year anniversary of the date of exercise (a “disqualifying disposition”), any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price generally will be taxed as ordinary income, unless the shares are disposed of in a transaction in which the participant would not recognize a loss (such as a gift). However, if the proceeds from the disqualifying disposition are less than the fair market value of the shares on the date of exercise, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. Any gain in excess of that amount of ordinary income recognized by the participant will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment item in computing the participant’s alternative minimum taxable income in the year of exercise. In addition, special alternative minimum tax rules may apply to certain subsequent disqualifying dispositions of the shares or provide certain basis adjustments or tax credits.

  24. Nonstatutory Stock Options

    Nonstatutory Stock Options A participant generally recognizes no taxable income as the result of the grant of a nonstatutory stock option. However, upon exercising the option with respect to any shares, the participant normally recognizes ordinary income equal to the amount that the fair market value of such shares on such date exceeds the exercise price for such shares. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of the shares acquired by exercising a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss.

  25. Restricted Stock Awards

    Restricted Stock Awards A participant acquiring shares of restricted stock generally will recognize ordinary income as the shares subsequently vest, in an amount equal to the excess of the fair market value of the shares on the vesting date over the purchase price paid by the participant for such shares (if any). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, under Section 83(b) of the Code, to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired. Upon the sale of shares acquired under a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

  26. Restricted Stock Unit Awards

    Restricted Stock Unit Awards There are no immediate tax consequences of receiving an award of restricted stock units. A participant who is awarded restricted stock units generally will recognize ordinary income equal to the fair market value of shares issued to such participant at the end of the applicable vesting period or, if later, the settlement date elected by the administrator or a participant. If the participant is an employee, such ordinary income generally is subject to withholding of income. Also, if the participant is an employee, the fair market value of the shares covered by the award on the vesting date will be subject to employment taxes. Any additional gain or loss recognized upon any later disposition of any shares received will be taxed as capital gain or loss.

  27. Performance Unit Awards

    Performance Unit Awards A participant generally will recognize no income upon the grant of a performance unit award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any cash or unrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income. Also, if the participant is an employee, the fair market value of the shares covered by the award on the vesting date will be subject to employment taxes. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

  28. Tax Effect for Us

    Tax Effect for Us We generally will be entitled to a tax deduction in connection with an award under the 2024 Plan equal to the ordinary income realized by a participant when the participant recognizes such income (for example, the exercise of a nonstatutory stock option or the disqualifying disposition of shares acquired through the exercise of an incentive stock option) except to the extent such deduction is limited by applicable provisions of the Code. Special rules limit the deductibility of compensation paid to our chief executive officer and other “covered employees” as determined under Section 162(m) and applicable guidance. Under Section 162(m), the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000. THE SUMMARY ABOVE IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION ON PARTICIPANTS AND US WITH RESPECT TO AWARDS UNDER THE PLAN. IT IS NOT INTENDED TO BE COMPLETE AND MAY NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH, OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR NON-U.S. COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

  29. Equity Compensation Plan Information

    Equity Compensation Plan Information The following table summarizes our equity compensation plan information as of December 31, 2023.

  30. Equity Compensation Plan Information

    | Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) | | Equity compensation plans approved by stockholders | 2,883,056(1)(2) | 9.97 | 593,494(3) | | Equity compensation plans not approved by stockholders | 409,000(4) | 6.91 | 191,000(5) | | Total | 3,292,056 | | 784,494 |

  31. Equity Compensation Plan Information

    (1) This table does not include the number of shares issuable upon exercise of issued and outstanding awards under the Private ArTara Plan, which we assumed upon the closing of the Merger. No new awards may be issued under the Private ArTara Plan. As of December 31, 2023, a total of 134,328 shares of our common stock were reserved for issuance upon the exercise of outstanding options under the Private ArTara Plan, with a weighted-average exercise price of $9.18. (2) Includes securities issuable under our 2014 Plan and the 2014 ESPP. (3) Includes (i) 547,382 shares of common stock available for issuance under our 2014 Plan and (ii) 46,112 shares of common stock available for issuance under our 2014 ESPP. The number of shares of our common stock reserved for issuance under the 2014 Plan automatically increases on January 1 of each calendar year in an amount equal to (a) 4% of the total number of shares of the Registrant’s Stock (as defined in the 2014 Plan) outstanding as of the end of the immediately preceding fiscal year; or (b) such lesser number of shares of our common stock as is determined by our board of directors for the applicable year. The number of shares of our common stock reserved under the 2014 ESPP for issuance automatically increases on January 1 each calendar year, from January 1, 2015 and ending on (and including) January 1, 2024, in an amount equal to (a) the lesser of (i) 1% of the total number of shares of our common stock outstanding as of the end of the immediately preceding fiscal year or (ii) 281,000 shares of our common stock prior to the Merger, or 7,025 shares of our common stock following the Merger, commensurate with 1-for-40 reverse stock split; or (b) such lesser number of shares of our common stock as is determined by our board of directors for the applicable year. (4) Includes 409,000 securities issuable pursuant to outstanding stock options under the Inducement Plan adopted exclusively for grants of awards to individuals that were not previously our employees or directors, as an inducement material to the individual’s entry into employment with us within the meaning of Rule 5635(c)(4) of the Nasdaq listing rules. The terms and conditions of the Inducement Plan and the equity awards to be granted thereunder are substantially similar to the 2014 Plan. (5) Includes 191,000 shares of common stock available for issuance under the Inducement Plan.

  32. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table shows for the fiscal years ended 2023 and 2022, compensation awarded to or paid to, or earned by, our named executive officers.

  33. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Jesse Shefferman | 2023 | 607,882 | — | 154,926 | 736,124 | 341,351 | 65,849 | 1,906,132 | | President, Chief Executive Officer and Director | 2022 | 587,622 | — | 291,870 | 1,377,367 | 460,103 | 63,934 | 2,780,896 | | Patrick Fabbio | 2023 | 412,875 | 25,000 | — | 746,910 | 206,758 | 51,986 | 1,443,529 | | Chief Financial Officer | | | | | | | | | | Jacqueline Zummo, Ph.D. | 2023 | 432,446 | — | 60,098 | 285,592 | 200,625 | 61,087 | 1,039,848 | | Chief Scientific Operations Officer | 2022 | 417,835 | — | 97,290 | 460,752 | 264,150 | 61,691 | 1,301,718 |

  34. 2023 Summary Compensation Table

    ____________ (1) This column reflects the one-time signing bonus paid to Mr. Fabbio in February 2023 in connection with entering into his employment agreement. (2) This column reflects the aggregate grant date fair value of stock awards granted during 2023 and 2022, as applicable, computed in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification Topic 718 for stock-based compensation transactions (“ASC 718”). Assumptions used in the calculation of these amounts are included in the notes to our audited consolidated financial statements included in the Annual Report. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the stock awards or the sale of the common stock underlying such stock awards. (3) This column reflects the aggregate grant date fair value of the option awards granted during 2023 and 2022, as applicable, computed in accordance with FASB ASC 718. Assumptions used in the calculation of these amounts are included in the notes to our audited consolidated financial statements included in the Annual Report. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. (4) This column reflects the annual performance-based bonuses earned in 2023 and paid in 2024 upon approval of our board of directors. (5) This column reflects life insurance premiums, health insurance premiums, disability insurance, 401(k) matching contributions paid by us on behalf of each named executive officer. These benefits are provided to the named executive officers on the same terms as provided to all of our regular full-time employees in the United States. Amounts for 2023 include life insurance premiums of $976, $436, and $627 for Mr. Shefferman, Mr. Fabbio, and Dr. Zummo respectively; health insurance premiums of $50,801, $38,162, and $50,063 for Mr. Shefferman, Mr. Fabbio, and Dr. Zummo respectively; short-term disability insurance premiums of $404, $370, and $404 for Mr. Shefferman, Mr. Fabbio, and Dr. Zummo respectively; long-term disability insurance premiums of $468, $429, and $468 for Mr. Shefferman, Mr. Fabbio and Dr. Zummo respectively; and 401(k) matching contributions of $13,200, $12,589, and $9,525 for Mr. Shefferman, Mr. Fabbio, and Dr. Zummo, respectively.

  35. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table sets forth certain information regarding outstanding equity awards granted to our named executive officers that remain outstanding as of December 31, 2023.

  36. Outstanding Equity Awards as of December 31, 2023

    | | | Option Awards(1) | | | | Stock Awards(1) | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#)(2) | Number of Securities Underlying Unexercised Options Unexercisable (#)(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | | Jesse Shefferman | 1/10/2020 | 108,933 | 2,317 | 30.00 | 1/9/2030 | | | | | 1/10/2020 | — | — | — | — | 12,500 | $23,438 | | | 7/10/2020 | 95,026 | 16,224 | 27.42 | 7/9/2030 | | | | | 1/19/2021 | 147,291 | 54,709 | 19.82 | 1/18/2031 | | | | | 1/03/2022 | 121,468 | 132,032 | 6.90 | 1/2/2032 | | | | | 1/03/2022 | — | — | — | — | 28,199 | 52,873 | | | 1/19/2023 | — | 307,500 | 3.02 | 1/18/2033 | | | | | 1/19/2023 | — | — | — | — | 51,300 | 96,188 | | Patrick Fabbio | 1/30/2023 | — | 300,000 | 3.14 | 1/29/2033 | | | | Jacqueline Zummo, Ph.D. | (6) | 19,075 | — | 9.18 | 7/11/2028 | | | | | (7) | 9,537 | — | 9.18 | 12/3/2028 | | | | | (8) | 9,537 | — | 9.18 | 9/16/2029 | | | | | 1/10/2020 | — | — | — | — | 11,375 | 21,328 | | | 1/19/2021 | 54,687 | 20,313 | 19.82 | 1/18/2031 | | | | | 1/3/2022 | 40,633 | 44,167 | 6.90 | 1/2/2032 | | | | | 1/3/2022 | — | — | — | — | 9,399 | 17,623 | | | 1/19/2023 | — | 119,300 | 3.02 | 1/18/2033 | | | | | 1/19/2023 | — | — | — | — | 19,900 | 37,313 |

  37. Outstanding Equity Awards as of December 31, 2023

    ____________ (1) Option awards and RSU awards granted before the Merger were granted under the Private ArTara Plan. The remaining option awards and RSU awards were granted under the 2014 Plan with the exception of Mr. Fabbio’s granted on January 30, 2023, which was granted under the 2020 Inducement Plan. The terms of such plans and the related award agreements are described below under “— Equity Benefit Plans.” (2) This column represents the number of shares under the option awards that have vested. Unless otherwise noted, all of the option awards vest as follows: 25% of the shares vest on the one-year anniversary of the grant date, and 1/48th of the shares vest monthly thereafter, subject to the holder’s continuous service with us as of each such date. (3) This column represents the number of shares under the option awards that have not vested. (4) Unless otherwise noted, all of the RSU awards issued in 2020 vest as follows: 25% of the shares vest on the one-, two-, three- and four-year anniversary of the grant date, respectively subject to the awardee’s continuous service with us as of each such date. All of the RSU awards issued in 2022 and 2023 vest as follows: 33.3% of the shares vest on the first, second and third anniversaries of the grant date, respectively, subject to the awardee’s continuous service with us as of each such date. (5) The market value of stock awards that have not yet vested is calculated based on the closing price of our common stock on December 29, 2023, the last trading day of 2023, of $1.875. (6) The share numbers and exercise prices reflected are those of options deemed to have been issued to the executive upon completion of the Merger in January 2020. These options were deemed to have been issued upon completion of the Merger in exchange for options to purchase 100,000 shares of Private ArTara common stock, which would have vested monthly over four years following August 1, 2018, at an exercise price of $1.75 per share awarded to the executive by Private ArTara in 2018. (7) The share numbers and exercise prices reflected in this column are those underlying options deemed to have been issued to Dr. Zummo upon completion of the Merger in January 2020 in exchange for options to purchase 50,000 shares of Private ArTara common stock, which would have vested monthly over four years following January 1, 2019, at an exercise price of $1.75 per share awarded to Dr. Zummo by Private ArTara in 2018. (8) The share numbers and exercise prices reflected in this column are those of options deemed to have been issued to Dr. Zummo upon completion of the Merger in January 2020. These options were deemed to have been issued upon completion of the Merger in exchange for options to purchase 50,000 shares of Private ArTara common stock, of which 22,000 (44%) of the shares vested immediately upon the date of grant, with the remaining 28,000 shares which would have vested monthly in 27 approximately equal monthly increments following September 17, 2019, at an exercise price of $1.75 per share awarded to the executive by Private ArTara in 2019.

  38. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Under the terms of the employment agreements with each of our named executive officers described above, either we or the executive may terminate the executive’s employment at any time. Each of our named executive officers is eligible, under the terms of his or her employment agreement to receive, in exchange for a release of claims, severance benefits upon termination of employment whether by us, without cause, or by the executive for good reason, with additional severance benefits provided in the event the termination is in connection with a change in control. In addition, the terms of equity awards granted to our named executive officers are subject to the terms of our equity plan and award agreements thereunder, which include accelerated vesting provisions upon certain change in control transactions. We do not provide any excise tax gross-ups or change-in-control benefits. Jesse Shefferman Mr. Shefferman’s employment agreement provides that upon written notice, either party may terminate the employment arrangement with or without cause (as defined in his employment agreement). The agreement provides that if we terminate Mr. Shefferman’s employment without cause or if Mr. Shefferman resigns for good reason (as defined in his employment agreement), then Mr. Shefferman will be eligible to receive (i) any unpaid base salary through the effective date of termination, (ii) his base salary for a period of 18 months paid in a lump sum, (iii) a one-time lump sum payment equal to 12 months of his bonus at 100% of target, (iv) reimbursement of all unpaid business expenses for which he is entitled, (v) reimbursement of premium costs under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for the same level of coverage he had during employment for 12 months, (vi) pro-rata vesting of any outstanding equity awards to the extent Mr. Shefferman is not employed through the one-year anniversary of the applicable grant date of such outstanding equity awards and (vii) any unused and accrued vacation. The severance benefits described in the foregoing sentence are, in each case, subject to Mr. Shefferman’s compliance with continuing obligations to the Company and his execution of a general release in favor of the Company. In addition to the foregoing, if Mr. Shefferman is terminated for other than cause, death or disability during the twelve months following a change in control of the Company, Mr. Shefferman will be entitled to acceleration of 100% of his then unvested outstanding equity awards. Patrick Fabbio Mr. Fabbio’s employment agreement provides that upon written notice, either party may terminate the employment arrangement with or without cause (as defined in his employment agreement). The agreement provides that if we terminate Mr. Fabbio’s employment without cause or if Mr. Fabbio resigns for good reason (as defined in his employment agreement), then Mr. Fabbio will be eligible to receive (i) any unpaid base salary through the effective date of termination, (ii) his base salary for a period of nine months paid in a lump sum, (iii) a one-time lump sum payment equal to his annual bonus at target, (iv) reimbursement of all unpaid business expenses for which he is entitled, (v) reimbursement of any healthcare premium costs for nine months, at the same level of coverage as he had during employment and (vii) any unused and accrued vacation. The severance benefits described in the foregoing sentence are, in each case, subject to Mr. Fabbio’s compliance with continuing obligations to the Company and his execution of a general release in favor of the Company. In addition to the foregoing, if Mr. Fabbio is terminated for other than cause, death or disability during the twelve months following a change in control of the Company, Mr. Fabbio will be entitled to acceleration of 100% of his then unvested outstanding equity awards and a lump sum severance payment equal to twelve months of his base salary (in lieu on (ii) above). Jacqueline Zummo, Ph.D. Dr. Zummo’s employment agreement provides that upon written notice, either party may terminate the employment arrangement with or without cause (as defined in her employment agreement). The agreement provides that if we terminate Dr. Zummo’s employment without cause or if Dr. Zummo resigns for good reason (as defined in her employment agreement), then Dr. Zummo will be eligible to receive (i) any unpaid base salary through the effective date of termination, (ii) her base salary for a period of nine months paid in a lump sum, (iii) a one-time lump sum payment equal to nine months of her bonus at target, (iv) reimbursement of all business expenses for which she is entitled, (v) reimbursement of any healthcare premium costs for nine months, at the same level of coverage as she had during employment, (vi) pro-rata vesting of any outstanding equity awards to the extent Dr. Zummo is not employed through the one-year anniversary of the applicable grant date of such outstanding equity awards and (vii) any unused and accrued vacation. The severance benefits described in the foregoing sentence are, in each case, subject to Dr. Zummo’s compliance with continuing obligations to the Company and her execution of a general release in favor of the Company. In addition to the foregoing, if Dr. Zummo is terminated for other than cause, death or disability during the eighteen months following a change in control of the Company, Dr. Zummo will be entitled to acceleration of 100% of her then unvested outstanding equity awards.

  39. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation None of our named executive officers participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. Our board of directors may elect to provide our officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.

  40. Pay Versus Performance

    Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we are providing the following disclosure regarding the relationship between executive compensation and certain financial performance measures of the Company. As we are permitted to report as a “smaller reporting company” as defined under the U.S. federal securities laws, we have not included a tabular list of financial performance measures, and the table below does not include a column for a “Company — Selected Measure” as defined in Item 402(v) of Regulation S-K.

  41. Pay Versus Performance Table

    Pay Versus Performance Table The following table shows the past two fiscal years’ total compensation for our named executive officers as set forth in the Summary Compensation Table, the compensation actually paid to our named executive officers (as determined under SEC rules, “Compensation Actually Paid”), our total shareholder return (“TSR”) and our net income. SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine Compensation Actually Paid as reported in the Pay Versus Performance Table. Compensation Actually Paid does not necessarily represent compensation actually earned, realized or received by the applicable named executive officer, but rather is a valuation calculated under applicable SEC rules by adjusting the Summary Compensation Table totals for the applicable year as described in the footnotes to the Pay Versus Performance Table.

  42. Pay Versus Performance Table

    | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3) ($) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(4) ($) | Net Income (Loss) (millions)(5) ($) | | 2023 | 1,906,132 | 1,272,679 | 1,241,689 | 958,775 | 7.74 | (40.4) | | 2022 | 2,780,896 | 1,014,561 | 1,286,977 | 730,748 | 11.07 | (66.0) | | 2021 | 4,068,661 | (2,164,421) | 1,768,542 | (144,544) | 27.88 | (47.3) |

  43. Pay Versus Performance Table

    (1) Mr. Shefferman was our principal executive officer (“PEO”) for each of the 2023, 2022 and 2021 fiscal years. (2) Compensation Actually Paid to our PEO was calculated in accordance with Item 402(v) of Regulation S-K by deducting and adding from the Summary Compensation Table totals as shown below:

  44. Pay Versus Performance Table

    | Year | Reported Summary Compensation Table Total for PEO ($) | Less: Reported Value of Equity Awards(a) ($) | Equity Award Adjustments | | | | | | Compensation Actually Paid to PEO ($) | | | | | Plus: Year End Fair Value of Equity Awards Granted in the Year that are Unvested at Year End ($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested at Year End ($) | Plus: Fair Value of Equity Awards that were Granted and Vested in the Same Year at Vesting Date ($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Less: Year End Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions ($) | Plus: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | | 2023 | 1,906,132 | (891,050) | 515,157 | (186,258) | — | (71,302) | — | — | 1,272,679 | | 2022 | 2,780,896 | (1,669,237) | 567,002 | (447,678) | — | (216,422) | — | — | 1,014,561 | | 2021 | 4,068,661 | (3,111,830) | 685,952 | (2,598,026) | — | (1,209,178) | — | — | (2,164,421) |

  45. Pay Versus Performance Table

    ____________ (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (3) For the 2023 fiscal year, our Non-PEO NEOs were: Patrick Fabbio and Jacqueline Zummo, Ph.D. For the 2022 fiscal year, our Non-PEO NEOs were: Jathin Bandari, M.D. and Jacqueline Zummo, Ph.D. Additionally for the 2022 fiscal year, Blaine Davis, a former executive who would have been one of our next two most highly compensated executive officers but for his separation, is included. For the 2021 fiscal year, our Non-PEO NEOs were: Blaine Davis and Jacqueline Zummo, Ph.D. Compensation Actually Paid to our Non-PEO NEOs was calculated in accordance with Item 402(v) of Regulation S-K by deducting and adding from the Summary Compensation Table totals as shown below:

  46. Pay Versus Performance Table

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Less: Reported Value of Equity Awards(b) ($) | Equity Award Adjustments(a) | | | | | | Average Compensation Actually Paid to Non-PEO NEOs ($) | | | | | Plus: Year End Fair Value of Equity Awards Granted in the Year that are Unvested at Year End ($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested at Year End ($) | Plus: Fair Value of Equity Awards that were Granted and Vested in the Same Year at Vesting Date ($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Less: Year End Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions ($) | Plus: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | | 2023 | 1,241,689 | (546,300) | 302,879 | (32,834) | — | (6,659) | — | — | 958,775 | | 2022 | 1,286,977 | (533,726) | 124,525 | (82,913) | 22,254 | (52,326) | (34,043) | — | 730,748 | | 2021 | 1,768,542 | (1,155,383) | 254,685 | (697,653) | — | (314,735) | — | — | (144,544) |

  47. Pay Versus Performance Table

    (a) Jathin Bandari, M.D. was appointed as an executive officer in January 2022 and only became an NEO in the 2022 fiscal year. As such, the calculation of the Compensation Actually Paid to Non-PEO NEOs includes the change in value of equity awards held by Dr. Bandari during his tenure as an NEO. (b) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (4) The values disclosed in this TSR column represent the value at year-end, for each noted year, of an initial fixed investment of $100 made on December 31, 2020. (5) The dollar amounts reported represent the amount of net income (loss) reflected in our audited consolidated financial statements included in the Annual Report for the applicable year.

  48. Relationships Between Executive Compensation Actually Paid and the Company’s Financial Performance Measures

    Relationships Between Executive Compensation Actually Paid and the Company’s Financial Performance Measures Relationship Between Compensation Actually Paid and Net Income (Loss) We are a clinical-stage biopharmaceutical company with a limited operating history. As a pre-commercial company, our expenses and results of operations have fluctuated from year to year and we expect to incur significant expenses and increasing operating losses as we continue to develop and seek approvals for our product candidates and begin the commercialization for any approved products. Consequently, we did not have any revenue during the periods presented and as a result, our Company has not historically used net income (loss) as a performance measure for our executive compensation program. As displayed in our Pay Versus Performance Table, from 2021 to 2022, our net loss increased and the Compensation Actually Paid our PEO and Non-PEO NEOs also increased between those years. From 2022 to 2023, our net loss decreased while the compensation actually paid increased. This does not reflect a change in our compensation practices but is rather a function of a larger decrease in the value of our stock price in 2021 versus 2022 and 2023. A portion of the Compensation Actually Paid to our PEO and Non-PEO NEOs are performance-based awards, as described under “— Bonus Opportunity” which is based on achievement against pre-established metrics relating to the development of our non-clinical programs, ongoing trials and development path of our product candidates. While our PEO and Non-PEO NEOs successfully achieved the corporate goals, resulting in a higher Compensation Actually Paid each consecutive year from 2021 through 2023, our net loss fluctuated, increasing from 2021 to 2022, resultant of a one-time non-cash goodwill impairment charge in 2022, and then subsequently decreasing from 2022 to 2023. Additionally, we award grants of options and time-based RSUs to our employees, including our PEO and non-PEO NEOs. Due to the decline in our stock price from approximately $24.21 at the end of fiscal year 2020 to $6.75 at the end of fiscal year 2021, the value of our option and stock awards also decreased resulting in a negative Compensation Actually Paid for 2021. Although our stock price declined again from 2021 to 2022 (from $6.75 on December 31, 2021 to $2.68 on December 30, 2022), the decrease in value was less significant in 2022, therefore the Compensation Actually Paid for 2022 resulted in a positive number. The trend of a less significant change in value continued from 2022 to 2023 (from $2.68 on December 31, 2022 to $1.88 on December 29, 2023), resulting in an increase of the Compensation Actually Paid in 2023 when compared to 2022. Relationship Between Compensation Actually Paid and Company Total Shareholder Return (“TSR”) As outlined in the Pay Versus Performance Table, the increases in the compensation values for our PEO and non-PEO NEOs over the three-year period 2021 through 2023 differ from the decreases in the Company’s TSR over this same period. The fluctuations of the Compensation Actually Paid to the NEOs with our TSR is due primarily to an emphasis in the design of the Company’s compensation programs on structuring of short-term and long-term compensation for the NEOs. A large component of our executive compensation is equity-based to align compensation with performance. We believe the equity-based compensation strongly aligns our PEO and Non-PEO NEOs’ interests with those of our stockholders to maximize long-term value and encourages long-term employment. In particular, we view stock options, which are an integral part of our executive compensation program, as related to Company performance although not directly tied to TSR, because they provide value only if the market price of our common stock increases above the option exercise price and if the executive officer continues in our employment over the vesting period. The ultimate value of these equity awards, and the resulting impact on compensation actually paid, aligns with the Company’s TSR performance and ultimately the shift from a negative compensation paid in 2021 to increases in each of the next two consecutive years is primarily a result of the grant date fair value deduction in the compensation actually paid. The grant date fair value in 2021 was larger as a result of a higher stock price. In 2022, the stock price decreased at a slower pace, which continued through 2023. 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.

  49. Non-Employee Director Compensation

    Non-Employee Director Compensation

  50. 2023 Non-Employee Director Compensation Table

    2023 Non-Employee Director Compensation Table The following table sets forth the compensation (cash and equity) received by our non-employee directors during the year ended December 31, 2023.

  51. 2023 Non-Employee Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Stock Awards ($)(2) | Total ($) | | Luke Beshar | 171,500 | 20,763 | — | 192,263 | | Barry Flannelly, Pharm.D. | 46,000 | 20,763 | — | 66,763 | | Roger Garceau, M.D. | 71,000 | 20,763 | — | 91,763 | | Jane Huang, M.D. | 65,000 | 20,763 | — | 85,763 | | Richard Levy, M.D. | 97,500 | 20,763 | — | 118,263 | | Gregory Sargen | 55,000 | 20,763 | — | 75,763 | | Cynthia Smith | 52,000 | 20,763 | — | 72,763 | | Michael Solomon, Ph.D. | 51,000 | 20,763 | — | 71,763 |

  52. 2023 Non-Employee Director Compensation Table

    ____________ (1) Amounts reported represents the aggregate grant date fair value of stock options granted to our directors during 2023 under the 2014 Plan, computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options reported in this column are set forth in the notes to our audited consolidated financial statements included in the Annual Report. This amount does not reflect the actual economic value that may be realized by the non-employee director. As of December 31, 2023, the aggregate number of shares outstanding under all options to purchase our common stock held by our non-employee directors were: Mr. Beshar: 68,566; Dr. Flannelly: 56,250; Dr. Garceau: 61,890; Dr. Huang: 50,000; Dr. Levy: 39,000; Mr. Sargen: 39,000; Ms. Smith: 51,750; and Dr. Solomon: 68,565. (2) Amounts reported represents the aggregate grant date fair value of RSUs granted to our directors during 2023, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in the notes to our audited consolidated financial statements included in the Annual Report. This amount does not reflect the actual economic value that may be realized by the non-employee director. As of December 31, 2023, there are no unvested RSUs; the aggregate number of vested but not settled RSUs, consistent with the applicable RSU agreements, held by our non-employee directors were: Mr. Beshar: 168,000; Dr. Flannelly: 0; Dr. Garceau: 33,000; Dr. Huang: 0; Dr. Levy: 31,000; Mr. Sargen: 31,000; Ms. Smith: 0; and Dr. Solomon: 26,500. Mr. Shefferman, our Chief Executive Officer, is also a member of our board of directors but does not receive any additional compensation for his service as a director. See the section titled “Executive Compensation” for more information regarding the compensation earned by Mr. Shefferman and our other named executive officers.

  53. Non-Employee Director Compensation Policy

    Non-Employee Director Compensation Policy Our compensation committee reviews the compensation program for our non-employee directors on an annual basis, with the assistance of its independent compensation consultant, who prepares a comprehensive assessment of our non-employee director compensation program. Such assessment includes comparing our current non-employee director compensation against competitive market practices using the same compensation peer group used for executive compensation purposes and an update on recent trends in director compensation. Following such review, the compensation committee recommends, and our board of directors approves, updates, if any, to our Non-Employee Director Compensation policy. Under our Non-Employee Director Compensation Policy, each of our non-employee directors is eligible to receive compensation for service on our board of directors and committees of our board of directors, with cash compensation (as described below) deemed effective as of the later of (i) October 1, 2019 or (ii) the date such non-employee director was appointed or elected to our board of directors. The Non-Employee Director Compensation Policy provides our non-employee directors with the following compensation for their services: • an annual cash retainer of $40,000 for all non-employee directors; • an annual cash retainer of $115,000 for the chair of our board of directors (in addition to the annual cash retainer above); • an additional annual cash retainer of $7,500, $6,000, $5,000 and $25,000 for service as a member of the audit committee, the compensation committee, the nominating and corporate governance committee and the scientific advisory committee, respectively; • an additional annual cash retainer of $15,000, $12,000, $9,000 and $50,000 for service as chair of the audit committee, the compensation committee, the nominating and corporate governance committee and the scientific advisory committee, respectively (in lieu of the committee member retainer above); • an initial option grant, for new non-employee directors, to purchase 20,000 shares of our common stock, vesting in 36 equal monthly installments; and • an annual option grant to purchase 10,000 shares of our common stock, vesting on the earlier of (1) the one-year anniversary of the date of grant and (2) the date immediately prior to the next following annual stockholder meeting, which annual option grant shall be made at the close of business on the date of each of our annual stockholder meetings. Our board of directors also adopted a provision in the Non-Employee Director Compensation Policy pursuant to which no non-employee director may be granted (in any calendar year) compensation with a value greater than $750,000 (or $1,000,000 solely with respect to the calendar year in which such director is first appointment or elected to the board), with the value of any initial option grant or any annual grant based on the accounting grant date value of such grant. All vesting of the equity awards granted under our Non-Employee Director Compensation Policy is subject to the director’s continuous service as of each applicable vesting date. Notwithstanding the foregoing, in the event of a “change in control” (as defined in the 2014 Plan), all shares subject to any then-outstanding and unvested equity awards granted pursuant to the Non-Employee Director Compensation Policy will become fully vested immediately prior to the closing of such change in control.