DEF 14A of Sensus Healthcare, Inc., Apr 29, 2024

DEF 14A of Sensus Healthcare, Inc.

Filed Apr 29, 2024 · FY20230001213900-24-037153

Open on EDGAR

  1. Proposal 1 — Election of Directors

    Proposal 1 — Election of Directors

  2. Director Nominating Process

    Director Nominating Process The Nominating and Corporate Governance Committee, comprised solely of independent directors, is responsible for identifying potential directors, reviewing each potential nominee’s qualifications, and recommending director nominees to the Board for its consideration. To fulfill these responsibilities, the Committee annually assesses the requirements of the Board and makes recommendations to the Board regarding its size, composition, and structure. In determining whether to nominate an incumbent director for reelection, the Committee evaluates each incumbent director’s continued service in light of the current assessment of the Board’s requirements. When the need to fill a new Board seat or vacancy arises, the Committee proceeds by whatever means it deems appropriate to identify a qualified candidate or candidates, which may include engaging an outside search firm or considering recommendations from stockholders, current directors, and executive officers. The Committee reviews the qualifications of each potential candidate, which may include the candidate’s integrity, character, independent judgment, breadth of experience, insight, knowledge and business acumen, as well as whether the potential candidate is independent, as that term is defined in the Nasdaq Stock Market listing standards. Leadership skills and executive experience, expertise in medical technology or devices, medical knowledge, financial and accounting knowledge, prior experience in our core markets, expertise in capital markets, strategic planning and marketing expertise, among others, may also be among the relevant selection criteria. The Committee strives to maintain a Board that reflects a diversity of experience and personal backgrounds and characteristics (see the Board Diversity Matrix below). The selection criteria may vary over time depending on the needs of the Board.

  3. Director Nominating Process

    | Board Diversity Matrix As of April 1, 2024 | | | | | | Total Number of Directors | 7 | | | | | Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 1 | 6 | | | | Part II: Demographic Background | | | | | | White | 1 | 6 | | |

  4. Director Nominating Process

    Final candidates are generally interviewed by one or more Committee members. The Committee makes a recommendation to the Board based on its review, the results of interviews with the candidates, and other available information. The Board makes the final decision on whether to invite a candidate to join the Board based on the totality of the merits of each candidate rather than any specific or minimum qualifications or attributes. The Board-approved invitation is extended by the Chairman of the Board.

  5. Independent Directors

    Independent Directors Our common stock is listed on the Nasdaq Capital Market. Nasdaq requires that a majority of our directors be “independent,” as defined by Nasdaq’s rules. Generally, a director does not qualify as an independent director if the director or a member of a director’s immediate family has had in the past three years certain relationships or affiliations with us, our external or internal auditors, or other companies that do business with us. Based on these rules, our Board has affirmatively determined that Ms. Cornish and Messrs. Heinrich, McCall, Petrelli and O’Rear are independent and that Mr. J. Sardano, our CEO, and Mr. M. Sardano, our President, General Counsel, and Corporate Secretary, are not independent.

  6. Director Recommendations by Stockholders

    Director Recommendations by Stockholders The Committee will consider recommendations for director nominees from stockholders made in writing and addressed to the attention of the Chairman of the Nominating and Corporate Governance Committee, in care of the Corporate Secretary, Sensus Healthcare, Inc., 851 Broken Sound Parkway, NW #215, Boca Raton, FL 33487. Our Nominating and Corporate Governance Committee will consider recommendations from stockholders on the same basis as other recommendations.

  7. Election of Directors

    Election of Directors The Board is divided into three classes, designated Classes I, II, and III. The directors in each class are elected for terms of three years or until their successors are duly elected and qualified. We believe this classified board structure is appropriate for the Company. Obtaining a three-year commitment from our directors assists us in retaining highly qualified directors who have experience and familiarity with our business. We believe that such long-term institutional knowledge benefits Sensus and enables the Board to better consider and provide long-term strategic planning. At the Annual Meeting, stockholders will elect two Class III directors for terms ending at the 2027 Annual Meeting. The Board proposes the nominees set forth below for election as directors at the Annual Meeting. Unless instructed otherwise, the designated proxies will vote each properly delivered proxy for the election of each of the nominees as director. If a nominee is unable to serve, the shares represented by all valid proxies that have not been revoked will be voted for the election of a substitute nominee selected by the Board, or the Board may by resolution reduce the size of the Board to eliminate the resulting vacancy. At this time, the Board knows of no reason why any nominee might be unable to serve. All nominees are currently serving as directors. The Board currently consists of seven members. Samuel O’Rear has decided not to stand for reelection to the Board and will be retiring after the Annual Meeting. Once the Annual Meeting has concluded, the Board will be reduced from seven to six directors. Ms. Cornish is currently a Class II Director but will resign from that position upon her election as a Class III Director. If Ms. Cornish is not elected as a Class III Director, she will remain a Class II Director with a term expiring at the 2026 Annual Meeting of Stockholders. The following paragraphs provide information as of the date of this Proxy Statement about each nominee and each incumbent director who will remain in office following the Annual Meeting. While the following paragraphs note certain individual qualifications and skills of our directors that contribute to the Board’s effectiveness as a whole, we also believe that all of our nominees and incumbent directors have demonstrated integrity, honesty, and adherence to high ethical standards, as well as strong leadership skills, business acumen, an ability to exercise sound judgment, and a commitment of service to our stockholders.

  8. Nominees to Serve as Class III Directors for a Three-Year Term Expiring in 2027

    Nominees to Serve as Class III Directors for a Three-Year Term Expiring in 2027

  9. Nominees to Serve as Class III Directors for a Three-Year Term Expiring in 2027

    | Non-Employee Director Age: 39 Director since: 2021 Board committees: None Other public company boards: None | MEGAN CORNISH Megan Cornish is the Chief Customer Officer and Corporate Secretary of Moth+Flame, a leader in virtual reality. From 2016-2020, she served as the Vice President of External Affairs of FoodMaven Corporation, where she led the company strategy in communications, government, and industry affairs. Ms. Cornish is a founding board member of the Upcycled Food Association and Upcycled Food Foundation, which were formed in 2019 to influence sustainable practices in the food industry. From 2019-2021, she was on the ReFED Expert Network as an industry leader in sustainability and food and beverage. As a lobbyist and consultant since 2013, Ms. Cornish has advised a broad range of companies in a variety of industries including virtual reality, food and beverage, health, technology, and communications. In 2013, she served as Legislative Assistant to Representative Tim Holden (PA), who was a member of the U.S. Committee on Agriculture. Previously, Ms. Cornish handled immigration, science and technology, homeland security and animal rights issues, and special projects as a Legislative Correspondent and Legislative Assistant for Congressman Ed Towns (NY) while he was Chairman of the US House Committee on Oversight and Government Reform. Ms. Cornish received a B.A. in political science from Colorado College and an M.A. in global security from Johns Hopkins University. She is a certified yoga instructor and certified sailboat captain. Given Mrs. Cornish’s extensive experience in public relations, entrepreneurship, and United States politics, our Board believes that she is qualified to serve as a director. | | Chairman and CEO Age: 71 Director since: 2010 Board committees: None Other public company boards: None | JOSEPH C. SARDANO Mr. Sardano is our co-founder and has been our Chief Executive Officer and Chairman of the Board since our inception in 2010. Mr. Sardano has over 40 years of experience in the healthcare industry. Prior to founding Sensus, Mr. Sardano served as Chief Commercial Officer of Xoft, Inc., an electronic brachytherapy medical device company; as managing partner and healthcare consultant for Molecular Imaging Ventures; as Sr. Vice President of Global Sales and Marketing of CTI Molecular Imaging and Pet Net Pharmaceuticals, a developer of imaging and isotope solutions for the healthcare industry; as Americas Sales Manager for Functional Imaging at GE Medical Systems; as Vice President of Sales and Marketing for Elscint Inc., a developer and manufacturer of medical imaging solutions; and as Region Sales Manager of Toshiba America Medical Systems. Mr. Sardano also currently serves as a board member of Birch BioMed, a Canadian company, as well as a board member for BioFlorida, which promotes Florida-based healthcare companies and technologies. Mr. Sardano has a Bachelor of Arts degree from Concordia University in Montreal, Canada, as well as several Business Certificates from McGill University School of Management. Our Board believes that Mr. Sardano’s breadth of experience with and leadership of the introduction and commercialization of new technologies and services within the healthcare industry qualifies him to serve as our Chief Executive Officer and Chairman of the Board. |

  10. Nominees to Serve as Class III Directors for a Three-Year Term Expiring in 2027

    | The Board recommends a vote “FOR” the nominees. |

  11. Continuing Directors

    Continuing Directors We have two directors continuing in office as Class I Directors, with terms expiring at the 2025 Annual Meeting of Stockholders:

  12. Continuing Directors

    | Independent Director Age: 77 Director since: 2012 Board committees: Audit and Nominating and Corporate Governance Other public company boards: None | JOHN HEINRICH Dr. Heinrich currently serves as Chief Executive Officer of PhoenixNMR LLC, a provider of probes for solid state nuclear magnetic resonance, and as Managing Partner of Kansas Analytical Services, a provider of analytical services. He has held those positions since 2014 and 2007, respectively. Prior to, and in some cases, concurrently with, serving in these roles, Dr. Heinrich served as an officer or partner of various companies engaged in a range of development and marketing activities involving medical equipment, diagnostics, software, and technologies. Mr. Heinrich has a Ph.D. in Metallurgical Engineering from the University of Notre Dame. Given Dr. Heinrich’s substantial involvement in the development and management of a wide range of diagnostic imaging, therapeutic, medical diagnostic, and scientific instrument companies for more than 30 years, our Board believes that he is qualified to serve as a director. | | Non-Employee Director Age: 71 Director since: 2016 Board committees: Audit Committee Other public company boards: Ring Energy, Inc. | ANTHONY PETRELLI Mr. Petrelli is currently a Financial Consultant and Registered Representative of Momentum Independent Network. From 2010 through 2022, Mr. Petrelli was the President, Chairman, and Director of Investment Banking Services of NTB Financial Corporation, a Denver, Colorado-based financial services firm founded in 1977. Beginning his career in investment banking in 1972, Mr. Petrelli has extensive experience in the areas of corporate finance, underwriting, management, operations, sales, and trading. He has served on numerous regulatory and industry committees, including the FINRA Corporate Finance Committee, FINRA National Adjudicatory Council (Vice Chairman), FINRA Small Firm Advisory Board, and FINRA District Business Conduct Committee for District 3 (Chairman). Since 2013, Mr. Petrelli has served as a director of Ring Energy, Inc. Mr. Petrelli has also served as a director on several other public company boards. In addition to his career in the investment industry, Mr. Petrelli served on the board of directors of Southwest Counseling Associates, a Denver-based professional counseling firm. Mr. Petrelli established Equinox Counseling LLC in 2012, and is a Licensed Professional Counselor, a National Certified Counselor and an Approved Clinical Supervisor. Mr. Petrelli received his Bachelor of Science degree in Business (Finance) and his Master of Business Administration degree from the University of Colorado. In addition, he received his Master of Arts degree in Counseling from Denver Seminary. Given Mr. Petrelli’s substantial experience in corporate finance, our Board believes that he is qualified to serve as a director. |

  13. Continuing Directors

    We also have two directors continuing in office as Class II Directors, with terms expiring at the 2024 Annual Meeting of Stockholders:

  14. Continuing Directors

    | Independent Director Age: 77 Director since: 2015 Board committees: Audit, Compensation, and Corporate Governance and Nominating Other public company boards: None | WILLIAM McCALL Mr. McCall is currently Managing Director of Heritage Advisory Group, a financial advisory practice of Ameriprise Financial Services Inc., and has worked in such capacity since 2014. Mr. McCall also currently serves as a partner of Investors Capital Alliance LLC (since 2009), a consulting company; Chief Executive Officer of WMW Partners LLC (since 2009), an SEC-registered investment adviser; and a member of Pandora Mineral Resources LLC (since 2015). Mr. McCall has a B.S. in business administration from the University of Tennessee and also earned his Chartered Wealth Advisor® designation through the Michigan State University Estate and Wealth Management Institute. In light of Mr. McCall’s substantial experience as a financial advisor and portfolio manager, our Board believes that he is qualified to serve as a director. | | President, General Counsel and Corporate Secretary Age: 36 Director since: 2024 Other public company boards: None | Michael Sardano Mr. Sardano has served as our President, General Counsel and Corporate Secretary since February 2022. Prior to that, Mr. Sardano served as our Vice President and General Counsel from January 2018 to February 2022, our General Counsel/Director of Governance and Regulatory from January 2017 to December 2017, our Corporate Counsel/Director of Governance and Regulatory from January 2016 to December 2016, and our Corporate Counsel and Quality Assurance and Regulatory Affairs Manager from August 2013 to December 2015. Mr. Sardano worked as a legal intern for the Office of Appeals for the Massachusetts Department of Revenue from August 2012 to April 2013 and as a United States Senate Intern for the Committee on Rules and Administration in the office of Senator Lamar Alexander from May 2012 to August 2012. Mr. Sardano holds a Juris Doctor from New England Law-Boston and a Bachelor of Science degree in Management and Finance from Bentley University. Mr. Sardano has fourteen years of experience in the dermatology industry and has developed a large network that is valuable for directing our business in various areas, including sales, clinical research, government affairs, and federal coding and reimbursement. For these reasons, our Board believes that he is qualified to serve as a director. |

  15. Director Compensation

    Director Compensation Prior to 2023, we paid a $15,000 quarterly fee to each of our non-employee directors. As of January 1, 2023, we pay a $20,000 quarterly fee to each of our non-employee directors. From time to time, we also grant equity compensation to each of our non-employee directors. Additionally, we reimburse each director for all reasonable expenses incurred in connection with serving on our Board. The following Director Compensation Table sets forth a summary of the 2023 compensation we paid to our directors, other than Messrs. J. Sardano and. M. Sardano (both of whom are executive officers and receive no compensation with respect to service as a director):

  16. Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | | John Heinrich | 75,000 | — | — | — | 75,000 | | William McCall | 75,000 | — | — | — | 75,000 | | Samuel O’Rear | 75,000 | — | — | — | 75,000 | | Anthony Petrelli | 75,000 | — | — | — | 75,000 | | Megan Cornish | 75,000 | — | — | — | 75,000 |

  17. Director Compensation

    (1) This column includes a $15,000 payment made in the first quarter of 2024 and $20,000 payments made in each of the second, third, and fourth quarters of 2023.

  18. Introduction

    Introduction We are a “smaller reporting company”. As such, under SEC rules, we are not required to include a Compensation Discussion and Analysis section in this Proxy Statement and have elected to comply with other reduced compensation disclosure requirements as permitted under SEC rules. For 2023, our named executive officers, or NEOs, were Joseph C. Sardano, Michael Sardano, and Javier Rampolla. The objective of our compensation program is to provide a total compensation package to each named executive officer that will enable us to attract, motivate and retain outstanding individuals, reward named executive officers for performance, and align the financial interests of each named executive officer with the interests of our stockholders to encourage each named executive officer to contribute to our long-term performance and success. The compensation program for our named executive officers consists of the following elements: base salary; performance-based discretionary cash bonus; equity-based incentive compensation; and severance and change-in-control benefits. Our Compensation Committee, with input from the Board, determines the compensation for our named executive officers, subject where applicable to any employment agreements.

  19. Performance-Based Cash Bonus Compensation

    Performance-Based Cash Bonus Compensation Our executive compensation program for our NEOs includes an annual performance-based discretionary cash bonus. Our Board approves the terms and conditions of these awards on an annual basis. We have maintained, and intend to continue, an annual performance-based cash bonus program for the named executive officers that do not receive sales commissions.

  20. Equity Incentive Compensation

    Equity Incentive Compensation In 2017, we adopted, and our stockholders approved, our broad-based 2017 Incentive Plan under which we can award various forms of equity-based incentive compensation, including incentive and nonqualified stock options, stock appreciation rights, restricted stock awards, performance shares and phantom stock, and awards consisting of combinations of such incentive awards. In 2023, our stockholders approved an amendment to our 2017 Incentive Plan, to, among other things, increase the number of shares that may be issued under the plan.

  21. Summary Compensation Table

    Summary Compensation Table The following summary compensation table shows compensation information for our principal executive officer and our two most highly compensated executive officers as of December 31, 2023. We refer to each of the individuals named in the table below as “named executive officers.”

  22. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Nonequity Incentive Plan Compensation ($) | All Other Compensation ($)(2) | Total ($) | | Joseph C. Sardano | 2023 | 450,000 | 175,000 | — | — | 62,599 | 687,599 | | Chief Executive Officer | 2022 | 400,000 | 300,000 | — | — | 54,428 | 754,428 | | Michael Sardano | 2023 | 300,000 | 30,000 | 89,600 | — | 32,933 | 452,533 | | President, General Counsel, & Corporate Secretary | 2022 | 225,000 | 150,000 | — | — | 29,739 | 404,739 | | Javier Rampolla | 2023 | 250,000 | 62,500 | — | — | 44,562 | 357,062 | | Chief Financial Officer | 2022 | 225,000 | 175,000 | — | — | 39,144 | 439,144 |

  23. Summary Compensation Table

    ____________ (1) The amounts in this column reflect the grant date fair value of restricted stock awards and stock options in the years indicated. The assumptions used to determine the grant date fair value of awards listed in this column are set forth in Note 10 to our Financial Statements included in our 2023 Annual Report on Form 10-K that accompanies this Proxy Statement. The amounts in this column do not reflect the value of shares actually received or which may be received in the future with respect to such awards. (2) All other compensation includes the following:

  24. Summary Compensation Table

    | Name | Year | Life Insurance ($) | Health Insurance ($) | 401(k) Match, HSA Contribution ($) | Car Allowance ($) | | Mr. Joseph Sardano | 2023 | 21,524 | 18,931 | 9,150 | 12,994 | | | 2022 | 13,803 | 18,931 | 8,700 | 12,994 | | Mr. Michael Sardano | 2023 | 961 | 9,755 | 9,150 | 13,066 | | | 2022 | — | 8,369 | 8,304 | 13,066 | | Mr. Javier Rampolla | 2023 | | 31,568 | | 12,994 | | | 2022 | — | 26,150 | — | 12,994 |

  25. Summary Compensation Table

    We previously entered into written employment agreements with Messrs. J. Sardano, M. Sardano, and Rampolla. The following is a summary of the material terms of these agreements.

  26. Outstanding Equity Awards at Fiscal Year-End 2023

    Outstanding Equity Awards at Fiscal Year-End 2023 The following table provides information, for our named executive officers, on unvested option and stock awards and other equity plan awards at the end of 2023.

  27. Outstanding Equity Awards at Fiscal Year-End 2023

    | | | Option Awards | | | Stock Awards | | | | | Name | Grant Date | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned `Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of shares of stock that have not vested (#) | Market value of shares of stock that have not vested ($) | Equity incentive plan awards: number of unearned shares (#) | Equity incentive plan awards: market or payout value of unearned shares ($) | | Joseph Sardano | — | — | — | — | — | — | — | — | | Michael Sardano | 7/21/2021 | — | — | — | 10,000 | 23,600 | — | — | | Javier Rampolla | 2/1/2021 | — | — | — | 2,500 | 5,900 | — | — | | | 7/21/2021 | — | — | — | 10,000 | 23,600 | — | — |

  28. Pay Versus Performance

    Pay Versus Performance

  29. Pay Versus Performance Table for 2023, 2022, and 2021

    Pay Versus Performance Table for 2023, 2022, and 2021 As required by the SEC rules, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last two years. In determining “compensation actually paid,” or “CAP,” to our NEOs, those rules require us to make various adjustments to amounts that have been previously reported in the Summary Compensation Table (“SCT”) in previous years, as the SEC’s valuation methods for this section differ from those required in the SCT. The table below summarizes compensation values both previously reported in our SCT, as well as the adjusted values required in this section for 2021, 2022, and 2023. Note that for our NEOs other than our principal executive officer (the “PEO”), compensation is reported as an average. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the company’s performance, see the section entitled “Executive Compensation” above.

  30. Pay Versus Performance Table for 2023, 2022, and 2021

    | Year | Summary compensation table total for PEO(1) | Compensation actually paid to PEO(1)(4) | Average summary compensation table total for non-PEO named executive officers(2) | Average compensation actually paid to non-PEO named executive officers(2)(4) | Value of initial fixed $100 investment based on Total Shareholder Return(3) | Net Income in thousands | | 2023 | $687,599 | $687,599 | $404,798 | $290,948 | $32 | $485 | | 2022 | $754,428 | $754,428 | $421,942 | $338,917 | $103 | $24,244 | | 2021 | $628,451 | $628,451 | $418,178 | $399,778 | $187 | $4,119 |

  31. Pay Versus Performance Table for 2023, 2022, and 2021

    ____________ (1) The PEO in all three years is our CEO, Mr. Joseph Sardano. (2) The non-PEO NEOs in 2023 and 2022 were Mr. M. Sardano and Mr. Rampolla. The non-PEO NEOs in 2021 were Mr. M. Sardano and Mr. Stephen Cohen. (3) Pursuant to SEC rules, the Total Shareholder Return (“TSR”) figures assume an initial investment of $100 on December 31, 2020 and represent the value of such investment as of December 31, 2021, 2022, and 2023, respectively. (4) The following table sets forth the adjustments made during each year represented in the PVP Table to arrive at compensation “actually paid” to our Non-PEO NEOs during each of the years in question (no adjustments were necessary for our PEO):

  32. Pay Versus Performance Table for 2023, 2022, and 2021

    | Adjustments to Determine Compensation “Actually Paid” for Non-PEO NEOs | 2023 | 2022 | 2021 | | Deduction for Amounts Reported under the “Stock Awards” Column in the SCT | — | — | $(153,600) | | Increase for Fair Value of Awards Granted during year that Remain Unvested as of Year end | — | — | $101,400 | | Increase for Fair Value of Awards Granted during year that Vest during year | — | — | $33,800 | | Increase/deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | $(113,850) | $9,000 | — | | Increase/deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | — | $74,025 | — | | Total Adjustments | $(113,850) | $83,025 | $(18,400) |