DEF 14A of Soundhound Ai, Inc., Apr 29, 2024

DEF 14A of Soundhound Ai, Inc.

Filed Apr 29, 2024 · FY20230001213900-24-037308

Open on EDGAR

  1. How many votes are required to elect the Director Nominees as directors of the Company?

    How many votes are required to elect the Director Nominees as directors of the Company? In the election of directors, the five persons receiving the highest number of affirmative votes at the Annual Meeting will be elected. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a plurality.

  2. PROPOSAL 1 ELECTION OF DIRECTORS

    PROPOSAL 1 ELECTION OF DIRECTORS Introduction The Board has nominated the Director Nominees to stand for election at the Annual Meeting. Stockholders will be asked to elect each of the Director Nominees, each to hold office until the 2025 Annual Meeting of Stockholders or until his or her successor is elected and qualified. The enclosed proxy, if returned, and unless indicated to the contrary, will be voted for the election of each of the Director Nominees. We have been advised by each of the Director Nominees that he or she is willing to be named as a nominee and each is willing to serve or continue to serve as a director if elected. If some unexpected occurrence should make necessary, in the discretion of the Board, the substitution of some other person for the nominees, it is the intention of the persons named in the proxy to vote for the election of such other persons as may be designated by the Board. Board Qualifications We believe that the collective skills, experiences, and qualifications of our directors provide our Board with the expertise and experience necessary to advance the interests of our stockholders. In selecting directors, the Board considers candidates that possess qualifications and expertise that will enhance the composition of the Board, including the considerations set forth below. The considerations set forth below are not meant as minimum qualifications, but rather as guidelines in weighing all of a candidate’s qualifications and expertise. In addition to the individual attributes of each of our current directors described below, we believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, exhibit commitment to enhancing stockholder value and have sufficient time to carry out their duties and to provide insight and practical wisdom based on their past experience. Director Nominees Our Board currently consists of five directors, Dr. Keyvan Mohajer, James Hom, Larry Marcus, Diana Sroka, and Dr. Eric Ball. Accordingly, at the Annual Meeting, five directors are to be elected, each to serve until the next Annual Meeting of Stockholders and until his or her successor shall be elected and shall qualify. Each of the current directors that has determined to stand for reelection at the Annual Meeting has been nominated for reelection to the Board. All of the Director Nominees are available for election as members of the Board. If for any reason a Director Nominee becomes unavailable for election, the proxies solicited by the Board will be voted for a substitute nominee selected by the Board. The following sets forth the biographical background information for all of our Director Nominees: Dr. Keyvan Mohajer. Dr. Keyvan Mohajer has been our Chief Executive Officer and a member of the Board since the consummation of the Business Combination in April 2022. Dr. Mohajer has served as Legacy SoundHound’s Chief Executive Officer and a member of Legacy SoundHound’s Board of Directors (the “Legacy SoundHound Board”) since 2005, when he co-founded Legacy SoundHound. Dr. Mohajer is a technical founder and visionary entrepreneur with over 20 years of experience scaling multiple companies. Dr. Mohajer is a key contributor to SoundHound’s core technologies, with over 90 patents granted or pending. In 2017, Dr. Mohajer was named a “Top 40 Under 40” business leader by Silicon Valley Business Journal. Dr. Mohajer received his Bachelor of Science degree in Electrical Engineering from the University of Toronto in 2000, his Master of Science from Stanford University in 2002 and his Ph.D. in Electrical Engineering from Stanford University in 2007. James Hom. James Hom has been a member of the Board and Chief Product Officer since the consummation of the Business Combination in April 2022. Mr. Hom, one of SoundHound’s co-founders, has served as Vice President of Products and a member of the Legacy SoundHound Board since 2006. As Vice President of Products, Mr. Hom leads product development and advancement of SoundHound’s Voice AI platform and multiple business-to-consumer products. Mr. Hom earned his Bachelor of Science Degree in Computer Science from Stanford University in 2005. Larry Marcus. Larry Marcus has been a member of the Board since the consummation of the Business Combination in April 2022. Prior to that, Mr. Marcus served as a member of the Legacy SoundHound Board since 2009. He is a Co-founder and Managing Director of Marcy Venture Partners, a San Francisco-based venture capital firm investing in consumer, culture and positive impact businesses since February 2018. Since June 2000, Mr. Marcus has also been a Managing Director at Walden Venture Capital. Previously, Mr. Marcus was a digital media sell-side equity research analyst at Deutsche Bank Alex Brown from 1995 to 2000. Mr. Marcus currently serves, and in the past has served, on the boards of directors of a number of private companies, some of which have gone on to become public companies. Mr. Marcus received his Bachelor of Arts in Political Economy of Industrial Societies in 1987 and his Master of Business Administration in 1993, both from the University of California, Berkeley. We believe that Mr. Marcus is well qualified to serve as a member of the Board because, as a member of the Legacy SoundHound Board, he has extensive knowledge of the Company’s business, and also because of this significant venture capital and finance experience. Diana Sroka. Diana Sroka has been a member of the Board since the consummation of the Business Combination in April 2022. In 2001, Ms. Sroka joined HP Inc. (“HP”) (f/k/a Hewlett-Packard Company) (NYSE:HPQ), a global technology company based in Palo Alto, California, and has held various leadership roles in finance and business functions within HP. Starting May 2023, Ms. Sroka is serving as the global product leader for HP’s new Consumer Services Business, expanding her prior role leading consumer print services. Prior to these assignments, from March 2017 to November 2020, Ms. Sroka served as HP’s Chief Executive Officer’s Chief of Staff, where she was responsible for regular review and approval of internal Sarbanes-Oxley Act controls related to matters managed by the Executive Leadership Team. Prior to serving as Chief of Staff, Ms. Sroka served as an Investor Relations Officer on HP’s Investor Relations team commencing in June 2014. From November 2015 through March 2017, she served as HP’s Head of Investor Relations. Prior to her employment at HP, Ms. Sroka was a Business Planning Analyst for Visteon Corporation and a Product Engineer with Ford Motor Company. Ms. Sroka was elected to the Board of Professional Business Women of California in November 2022, and in July 2023, she was elected the Treasurer of the Executive Committee. Ms. Sroka earned her Bachelor of Science Degree in Mechanical Engineering from Pennsylvania State University in 1995 and her Master of Business Administration Degree from the University of Michigan in 2000. We believe that Ms. Sroka is well qualified to serve as a member of the Board because she has extensive background in accounting, financial management and internal accounting controls.

  3. PROPOSAL 1 ELECTION OF DIRECTORS

    Dr. Eric R. Ball. Dr. Eric R. Ball has been a member of our Board since the Company’s initial public offering in March 2021 and remained on the Board following the Business Combination. Since 2016, Dr. Ball has been the General Partner of Impact Venture Capital, a Silicon Valley based venture firm investing in early-stage applied-AI start-up companies. From 2015 until 2016, Dr. Ball served as the Chief Financial Officer for C3 AI, an enterprise AI software provider. From 2005 to 2015, Dr. Ball served as Senior Vice President and Treasurer for Oracle. Prior to 2005, Dr. Ball served in a variety of finance roles at Flextronics International, Cisco Systems, Avery Dennison, and AT&T. Dr. Ball has served as the Chairman of the Board of CapConnect+, a start-up company that is focused on linking corporate bond issuers to their institutional buyers, since 2020. Dr. Ball also served as an advisor to Kyriba, a private treasury management software provider from 2017 until November 2022. Dr. Ball also served as a board member and Audit Chairman of Glu Mobile Inc, a developer and publisher of mobile games from 2013 until April 2021. Dr. Ball received his Ph.D. in management at the Drucker-Ito School of Claremont Graduate University. Dr. Ball received his MBA in finance and MA in economics at the University of Rochester. Dr. Ball graduated with honors from the University of Michigan with a Bachelor of Arts degree in Economics. Dr. Ball is also the co-author of the book “Unlocking the Ivory Tower”. We believe that Dr. Ball is well-qualified to serve as a director of the company given his extensive finance, mergers, and acquisition, investing and public company experience in the technology industry. In addition to the foregoing, we believe that each of the Director Nominees that is nominated for reelection is well-qualified to serve as a member of our Board due to their prior experience and work with and on our Board. Required Vote In the election of directors, the five persons receiving the highest number of affirmative votes cast at the Annual Meeting will be elected. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

  4. EXECUTIVE OFFICERS, DIRECTORS, AND CORPORATE GOVERNANCE

    EXECUTIVE OFFICERS, DIRECTORS, AND CORPORATE GOVERNANCE

  5. Current Directors and Executive Officers

    Current Directors and Executive Officers Listed below are the names of the current directors and executive officers of the Company, their ages and positions held as of the Record Date and biographies if not disclosed above:

  6. Current Directors and Executive Officers

    | Name | Age | Position with the Company | | Dr. Keyvan Mohajer | 46 | Director, Chief Executive Officer | | James Hom | 40 | Director, Chief Product Office | | Larry Marcus | 58 | Director | | Diana Sroka | 51 | Director | | Dr. Eric Ball | 60 | Director | | Dr. Majid Emami | 47 | Chief Science Office and Senior Vice President of Engineering | | Timothy Stonehocker | 43 | Chief Technology Officer | | Nitesh Sharan | 49 | Chief Financial Officer | | Michael Zagorsek | 49 | Chief Operating Officer |

  7. Current Directors and Executive Officers

    To the best of the Company’s knowledge, there are no other arrangements or understandings currently existing between any director, Director Nominee or executive officer and any other person pursuant to which any person was selected as a director, Director Nominee or executive officer. There are no family relationships between any of the Company’s directors, Director Nominees or executive officers. Kamyar Mohajer, the brother of the Company’s CEO, Keyvan Mohajer, is an employee of SoundHound and serves as a senior executive leader. To the Company’s knowledge there have been no material legal proceedings as described in instruction 4 to Item 103 of Regulation S-K or Item 401(f) of Regulation S-K during the last ten years that are material to an evaluation of the ability or integrity of any of the Company’s directors or executive officers.

  8. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

    EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

  9. Determination of Executive Compensation

    Determination of Executive Compensation Role of the Compensation Committee Our Compensation Committee is responsible for establishing and overseeing our executive compensation programs, and annually reviewing and determining the compensation to be provided to our NEOs. In setting executive compensation, the Compensation Committee considers a number of factors, including the recommendations of our Chief Executive Officer (other than with respect to his own compensation), current and past total compensation, market compensation data provided by an independent compensation consultant, our financial and operational performance in the most recent fiscal year, and each executive’s impact on our performance. Our Chief Executive Officer makes recommendations based on his evaluation of each executive’s performance, of which he has direct knowledge. Role of Management Our executives consulted with the Compensation Committee in 2023 and provided valuable insights into the Company’s operations and future expectations. The Compensation Committee also sought and received feedback from executives regarding how compensation plans should be structured to provide the maximum benefit to the Company. No executives were present during the Compensation Committee’s discussions, deliberations, or decisions regarding his or her own compensation. Also, no executive provided the Compensation Committee with recommendations regarding his or her own compensation. Role of Compensation Consultant Compensia (“Compensia” or the “Compensation Consultant”) provides executive consulting services to our Compensation Committee. The Compensation Committee most recently engaged Compensia in November 2021 to provide executive compensation consulting services. At this time, Compensia provided services related to the review of our compensation levels, our equity awards, the structure of our incentive compensation plans, equity ownership, regulatory developments, and our compensation peer group. Compensia did not provide any services to the Company other than its engagement by the Compensation Committee. The Compensation Committee reviewed Compensia’s independence under NASDAQ and SEC rules and concluded that its work has not raised any conflict of interest. Compensia developed the below peer group in November 2021, which continues to inform our executive compensation programs. Specifically, we use peer group data to obtain compensation benchmarks for our named executive officers, specifically with technology companies, with a focus on software companies, with revenue below $500M and market cap between $500M to $5B.

  10. Determination of Executive Compensation

    The current executive compensation packages are benchmarked conservatively to be reflective of a newly public company, but also competitive enough to attract and retain the right talent. Our executive compensation decisions are informed by competitive market data in addition to the reviews of individual roles and performance. We review our compensation levels annually against our peer group and assess executives based on their individual performance and overall company performance. The Compensation Committee, comprised entirely of independent directors, then reviews these recommendations, considers any relevant guidance from the Compensation Consultant, and makes the final decision on compensation for our named executive officers.

  11. Elements of Compensation

    Annual bonus compensation plan In 2023, as part of their employment Agreements, executives were eligible for bonuses, as approved by the Compensation Committee and the Board, with pre-established goals and weightings, which were designed to reward achievements based upon quantitative & qualitative Company performance (the “Company Objectives”), and to incentivize and reward NEOs for achieving performance goals that drive Company performance, align pay and performance, and support the long-term growth of the Company. All incentive payouts are calculated based solely on Company Objectives to closely align compensation with the Company’s performance. The Compensation Committee set thresholds, target, and maximum performance goals, and related payout levels, considering annual cash incentive compensation levels for comparable positions within our peer group. An NEO could earn between 0% and 150% of the NEOs’ Target Award for achievement of Corporate Objectives, dependent upon the level of achieved performance. Our 2023 annual bonus compensation plan included the following goals and weightings:

  12. Elements of Compensation

    | Name | Target Bonus | 2023 Bonus Earned | 2023 Bonus Actually Paid | | Dr. Keyvan Mohajer, CEO | $450,000 | $215,359 | $116,103 | | Nitesh Sharan, CFO | $210,000 | $100,501 | $54,181 | | Michael Zagorsek, COO | $210,000 | $100,501 | $54,181 | | Timothy Stonehocker | $167,500 | $80,161 | $43,216 | | James Hom | $167,500 | $80,161 | $43,216 |

  13. Elements of Compensation

    Bonuses were paid in March 2024 based on our 2023 fiscal year performance. Even though revenue performance targets were exceeded, the Compensation Committee reviewed the overall achievement and considered other measures of the Company and determined that 25% pay-out on targets was more aligned with our financial situation. Accordingly, the Compensation Committee exercised its discretion to reduce payouts to 25% of the amount earned for each of our NEOs. Equity Incentive Compensation The Compensation Committee believes that equity incentives in the form of service vesting-based restricted stock awards are effective instruments for long-term compensation. Restricted stock awards align individual and team performance with the achievement of the Company’s strategic and financial goals, long-term value creation, and shareholders’ interests. Restricted stock awards are impacted by all stock price changes, so the value to the executive officers is affected by both increases and decreases in stock price from the market price at the date of grant. In benchmarking against companies in the same industry that are similar in size, value, and market cap, equity incentive awards for 2023 in the form of Restricted Stock Awards were determined by targeting the 50th percentile of our peer group. Total Compensation packages are highly leveraged on equity to provide overall packages that are both competitive to the market, while aligning our status as a newly public company on the path to profitability. Following the Compensation Committee’s benchmarking and considering the equity awards granted to our NEOs in 2022 in connection with their entering into new employment agreements, the Compensation Committee determined to grant service-based-vesting restricted stock to our NEOs in 2023 to enhance retention. The details of the grants made to each NEO in 2023 are shown in the table below. The awards vest in 36 monthly increments beginning in September 2023. The table below does not include the restricted stock grants made to some of our NEOs pursuant to the salary reduction program discussed above.

  14. Elements of Compensation

    | Name | Number of Restricted Stock Awards Received in 2023 | Value of Restricted Stock Awards Received | | Dr. Keyvan Mohajer, CEO | 600,000 | $1,326,000 | | Nitesh Sharan, CFO | 350,000 | $773,500 | | Michael Zagorsek, COO | 350,000 | $773,500 | | Timothy Stonehocker | 200,000 | $442,000 | | James Hom | 200,000 | $442,000 |

  15. Elements of Compensation

    ____________ * Excludes restricted stock awards made pursuant to the salary reduction program. Retirement Savings, Health, and Welfare Benefits All full-time employees, including the executive officers, are eligible to participate in the health benefits programs, including medical, dental and vision care coverage, disability and life insurance and the Company’s 401(k) plan. Other Employee Benefits We generally do not provide perquisites to our NEOs, and we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Severance and Change in Control Arrangements Payments to our NEOs upon a termination of employment are described under the “Potential Payments Upon a Termination or Change in Control” table below. These compensation arrangements are contained in each NEO’s employment agreement and are not a factor in the Compensation Committee’s determination of current-year compensation. These arrangements are the result of arm’s length negotiations.

  16. Other Compensation Policies and Considerations

    Other Compensation Policies and Considerations Derivatives Trading, Hedging, and Pledging Policies Our insider trading policy prohibits our executive officers and directors from (i) using any strategies or products (including derivative securities, such as put or call options, or short-selling techniques) to hedge against potential changes in the value of our stock and (ii) holding our stock in margin accounts or pledging our stock as collateral for a loan. Tax and Accounting Considerations The Compensation Committee considers the tax and accounting consequences of our compensation programs, including the impact of Section 162(m) of the Internal Revenue Code, which generally limits the tax deductibility of compensation paid by public companies to certain executive officers of public companies to $1 million. Our Compensation Committee may exercise business judgment in accordance with its compensation philosophy to award compensation that is not tax deductible if it determines that such award is in the best interests of the Company and our stockholders. Award Timing The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information. Similarly, we do not time the release of material nonpublic information based on equity award grant dates. Accounting for Share-Based Compensation We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, (“ASC Topic 718”), for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors based on the grant date fair value of these awards. ASC Topic 718 also requires companies to recognize the compensation cost of their share-based compensation awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award. Clawback Policy For information on our Executive Compensation Clawback Policy, see section below entitled “Compensation Recovery and Clawback Policy.”

  17. Executive Compensation

    | Name | Fiscal Year | Salary(1) | Bonus | Stock Awards(2) | Option Awards | Non-Equity Incentive Plan Compensation(3) | All Other Compensation | Total | | Dr. Keyvan Mohajer, | 2023 | $421,875 | — | $1,326,000(4) | — | $116,103 | — | $1,863,978 | | CEO | 2022 | $381,042 | — | $10,054,500 | — | — | — | $10,435,542 | | | 2021 | $260,000 | — | — | — | — | — | $260,000 | | Nitesh Sharan, | 2023 | $350,000 | | $773,500(5) | — | $54,181 | — | $1,177,681 | | CFO | 2022 | $328,958 | $75,000 | $4,302,250 | — | — | — | $4,706,208 | | | 2021 | $83,333 | $75,000 | — | $952,070 | — | — | $1,110,403 | | Michael Zagorsek, | 2023 | $350,000 | — | $773,500(6) | — | $54,181 | — | $1,177,681 | | COO | 2022 | $308,958 | — | $4,302,250 | — | — | — | $4,611,208 | | | 2021 | $240,000 | — | — | — | — | — | $240,000 | | James Hom, | 2023 | $335,000 | — | $442,000(7) | — | $43,216 | — | $820,216 | | CPO | 2022 | $302,479 | — | $3,426,750 | — | — | — | $3,729,229 | | | 2021 | $250,000 | — | — | — | — | — | $250,000 | | Timothy Stonehocker, | 2023 | $335,000 | — | $442,000(8) | — | $43,216 | — | $820,216 | | CTO | 2022 | $302,479 | — | $4,035,235 | — | — | — | $4,337,714 | | | 2021 | $250,000 | — | — | — | — | — | $250,000 |

  18. Narrative Disclosure to Summary Compensation Table

    Narrative Disclosure to Summary Compensation Table Agreements with the Company’s Named Executive Officers as of December 31, 2023 On June 2, 2022, our Compensation Committee and full Board approved certain compensation adjustments for its named executive officers. The Company also entered into new employment letter agreements with Dr. Keyvan Mohajer, the Company’s Chief Executive Officer; Mr. Nitesh Sharan, the Company’s Chief Financial Officer, Mr. Michael Zagorsek, the Company’s Chief Operating Officer, Mr. Timothy Stonehocker, the Company’s Chief Technology Officer, and Mr. James Hom, the Company’s Chief Product Officer, which employment agreements replaced and superseded all prior employment agreements with such named executive officers. In addition, the Board adopted and approved a Non-Employee Director Compensation Policy. Employment Agreement with Keyvan Mohajer, Chief Executive Officer Under Dr. Mohajer’s employment agreement (the “June 2022 CEO Employment Agreement”), Dr. Mohajer receives a base salary of $450,000. In addition, Dr. Mohajer is eligible to earn an annual incentive bonus, with a target equal to 100% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect. The annual bonus will be determined by the Company in its sole discretion based upon achievement of performance objectives to be determined by the Company. The June 2022 CEO Employment Agreement provides for the grant to Dr. Mohajer of 720,000 restricted stock units (the “RSUs”) under the SoundHound AI, Inc. 2022 Incentive Award Plan (the “2022 Incentive Award Plan”), which grant became effective upon the filing of the Company’s Registration Statement on Form S-8 (the “Form S-8”) filed with the SEC on July 20, 2022 to register shares under the 2022 Incentive Award Plan. The RSUs have a 4-year vesting period, vesting in equal quarterly installments with vesting measured from the vesting commencement date of May 1, 2022, subject to continued employment with the Company through each vesting date. In August 2022, Dr. Mohajer was granted an additional 450,000 RSUs under the 2022 Incentive Award Plan. The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date. Dr. Mohajer was also granted 480,000 RSUs that are subject to performance-based vesting (the “PSUs”) under the Incentive Award Plan, which became effective upon the filing of the Form S-8 with the SEC. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. In addition, Dr. Mohajer is eligible to participate in the standard benefit plans offered to similarly situated employees by the Company from time to time. The June 2022 CEO Employment Agreement specifies certain compensation following termination of employment, including potential severance payments of three months of Dr. Mohajer’s then current base salary and payment for three months of any COBRA premiums if Dr. Mohajer’s employment is terminated by the Company without “Cause” (as defined in the 2022 Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement). If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the 2022 Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs. The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction. Any severance is subject to the executive timely delivering a release of claims in favor of the Company. Dr. Mohajer has also entered into the Company’s standard form of confidential information and inventions assignment agreement. Employment Agreement with Nitesh Sharan, Chief Financial Officer Under Mr. Sharan’s employment agreement (the “June 2022 CFO Employment Agreement”), Mr. Sharan receives a base salary of $350,000. In addition, Mr. Sharan is eligible to earn an annual incentive bonus, with a target equal to 60% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect. The annual bonus will be determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company. The June 2022 CFO Employment Agreement provides for a grant to Mr. Sharan of 300,000 RSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC. The RSUs have a 4-year vesting period vesting in equal quarterly installments with vesting measured from the vesting commencement date of September 15, 2021, subject to continued employment with the Company through each vesting date. In August 2022, Mr. Sharan was granted an additional 225,000 RSUs under the 2022 Incentive Award Plan. The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date. Mr. Sharan was also granted 200,000 PSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. In addition, Mr. Sharan is eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time. The June 2022 CFO Employment Agreement specifies certain compensation following termination of employment, including potential severance payments of three months of Mr. Sharan’s then current base salary and payment for three months of any COBRA premiums if Mr. Sharan’s employment is terminated by the Company without “Cause” (as defined in the 2022 Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement). If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the 2022 Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs. The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction. Any severance is subject to the executive timely delivering a release of claims in favor of the Company. Mr. Sharan has also entered into the Company’s standard form of confidential information and inventions assignment agreement. Employment Agreement with Michael Zagorsek, Chief Operating Officer

  19. Narrative Disclosure to Summary Compensation Table

    Under Mr. Zagorsek’s employment agreement (the “June 2022 COO Employment Agreement”), Mr. Zagorsek receives a base salary of $350,000. In addition, Mr. Zagorsek is eligible to earn an annual incentive bonus, with a target equal to 60% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect. The annual bonus will be determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company. The June 2022 COO Employment Agreement provides for a grant to Mr. Zagorsek of 300,000 RSUs under the 2022 Incentive Award Plan, which became effective upon the filing of the Form S-8 with the SEC. The RSUs have a 4-year vesting period vesting in equal quarterly installments with vesting measured from the vesting commencement date of May 1, 2022, subject to continued employment with the Company through each vesting date. In August 2022, Mr. Zagorsek was granted an additional 225,000 RSUs under the 2022 Incentive Award Plan. The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date. Mr. Zagorsek was also granted 200,000 PSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. In addition, Mr. Zagorsek is eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time. The June 2022 COO Employment Agreement specifies certain compensation following termination of employment, including potential severance payments of three months of Mr. Zagorsek’s then current base salary and payment for three months of any COBRA premiums if Mr. Zagorsek’s employment is terminated by the Company without “Cause” (as defined in the 2022 Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement). If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the 2022 Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs. The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction. Any severance is subject to the executive timely delivering a release of claims in favor of the Company. Mr. Zagorsek has also entered into the Company’s standard form of confidential information and inventions assignment agreement. Employment Agreement with Timothy Stonehocker, Chief Technology Officer Under Mr. Stonehocker’s employment agreement (the “June 2022 CTO Employment Agreement”), Mr. Stonehocker receives a base salary of $335,000. In addition, Mr. Stonehocker is eligible to earn an annual incentive bonus, with a target equal to 50% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect. The annual bonus will be determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company. The June 2022 CTO Employment Agreement provides for a grant to Mr. Stonehocker of 210,000 RSUs under the 2022 Incentive Award Plan, which became effective upon the filing of the Form S-8 with the SEC. The RSUs have a 4-year vesting period vesting in equal quarterly installments with vesting measured from the vesting commencement date of May 1, 2022, subject to continued employment with the Company through each vesting date. In August 2022, Mr. Stonehocker was granted an additional 175,000 RSUs under the 2022 Incentive Award Plan. The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date. Mr. Stonehocker was also granted 140,000 PSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. In addition, Mr. Stonehocker is eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time. The June 2022 CTO Employment Agreement specifies certain compensation following termination of employment, including potential severance payments of three months of Mr. Stonehocker’s then current base salary and payment for three months of any COBRA premiums if Mr. Stonehocker’s employment is terminated by the Company without “Cause” (as defined in the 2022 Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement). If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the 2022 Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs. The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction. Any severance is subject to the executive timely delivering a release of claims in favor of the Company. Mr. Stonehocker has also entered into the Company’s standard form of confidential information and inventions assignment agreement. Employment Agreement with James Hom, Chief Product Officer Under Mr. Hom’s employment agreement (the “June 2022 CPO Employment Agreement”), Mr. Hom receives a base salary of $335,000. In addition, Mr. Hom is eligible to earn an annual incentive bonus, with a target equal to 50% of his annual base salary as then in effect, with a maximum payout at 150% of his annual base salary as then in effect. The annual bonus will be determined by the Company in its sole discretion, based upon achievement of performance objectives to be determined by the Company. The June 2022 CPO Employment Agreement provides for a grant to Mr. Hom of 240,000 RSUs under the 2022 Incentive Award Plan, which became effective upon the filing of the Form S-8 with the SEC. The RSUs have a 4-year vesting period vesting in equal quarterly installments with vesting measured from the vesting commencement date of May 1, 2022, subject to continued employment with the Company through each vesting date. In August 2022, Mr. Hom was granted an additional 175,000 RSUs under the 2022 Incentive Award Plan. The RSUs have a 10-year term and 3-year vesting period, vesting in equal monthly installments with vesting measured from the vesting commencement date of August 1, 2022, subject to continued employment with the Company through each vesting date.

  20. Narrative Disclosure to Summary Compensation Table

    Mr. Hom was also granted 160,000 PSUs under the 2022 Incentive Award Plan, which grant became effective upon the filing of the Form S-8 with the SEC. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. In addition, Mr. Hom is eligible to participate in the standard benefit plans offered to similarly-situated employees by the Company from time to time. The June 2022 CPO Employment Agreement specifies certain compensation following termination of employment, including potential severance payments of three months of Mr. Hom’s then current base salary and payment for three months of any COBRA premiums if Mr. Hom’s employment is terminated by the Company without “Cause” (as defined in the 2022 Incentive Award Plan) or if the executive resigns his employment for “Good Reason” (as defined in the employment agreement). If such a qualified termination occurs within three months prior to, or one year after, a Change in Control (as defined the 2022 Incentive Award Plan), the severance period is increased to 12 months of then current base salary and 12 months of COBRA premiums, and vesting will be accelerated for any stock options that have time-based vesting and for the RSUs. The Company may accelerate the vesting of the PSUs in connection with the negotiation of any Change in Control transaction. Any severance is subject to the executive timely delivering a release of claims in favor of the Company. Mr. Hom has also entered into the Company’s standard form of confidential information and inventions assignment agreement.

  21. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth certain information regarding each grant of plan-based awards made to a named executive officer in the last completed fiscal year under any plan, including awards that subsequently have been transferred.

  22. Grants of Plan-Based Awards

    | Name | Grant date | Estimated future payouts under non-equity incentive plan awards (3) | | | All other stock awards: Number of shares of stock or units (#) | Grant date fair value of stock and option awards | | | | Threshold ($) | Target ($) | Maximum ($) | | | | Dr. Keyvan Mohajer, CEO | February 28, 2023 | $— | $450,000 | $675,000 | | | | | August 3, 2023 | — | — | — | 600,000(1) | $1,326,000 | | Nitesh Sharan, CFO | February 28, 2023 | $— | $210,000 | $315,000 | | | | | August 3, 2023 | — | — | — | 350,000(1) | $773,500 | | | August 21, 2023 | — | — | — | 22,636(2) | $53,421 | | Michael Zagorsek, COO | February 28, 2023 | $— | $210,000 | $315,000 | | | | | August 3, 2023 | — | — | — | 350,000(1) | $773,500 | | | August 21, 2023 | — | — | — | 25,723(2) | $60,706 | | Timothy Stonehocker, CTO | February 28, 2023 | $— | $167,500 | $251,250 | | | | | August 3, 2023 | — | — | — | 200,000(1) | $442,000 | | | August 21, 2023 | — | — | — | 22,458(2) | $53,001 | | James Hom, CPO | February 28, 2023 | $— | $167,500 | $251,250 | | | | | August 3, 2023 | — | — | — | 200,000(1) | $442,000 | | | August 21, 2023 | — | — | — | 22,655(2) | $53,466 |

  23. Grants of Plan-Based Awards

    ____________ (1) Service vesting-based restricted stock granted on August 3, 2023 as part of the company wide annual compensation review. The service vesting-based restricted stock award will vest 1/36 on a monthly schedule on September 1, 2023 with the remainder vesting over 3 years. (2) Service vesting-based restricted stock granted on August 21, 2023 vesting immediately, in lieu of the 15% salary reduction from December 2022 through May 2023. (3) Despite our strong 2023 performance, our Compensation Committee exercised its discretion to reduce payouts under our 2023 non-equity incentive plan awards to 25% of our NEOs’ target amounts.

  24. Outstanding Equity Awards at 2023 Fiscal Year End

    Outstanding Equity Awards at 2023 Fiscal Year End The following table presents information regarding outstanding equity awards held by the Company’s named executive officers as of December 31, 2023.

  25. Outstanding Equity Awards at 2023 Fiscal Year End

    | | Option awards | | | | | | Name | Number of securities underlying unexercised options (#) exercisable(1) | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | | Dr. Keyvan Mohajer, CEO | 833,435 | — | — | $2.18 | 3/28/2027 | | Nitesh Sharan, CFO | 173,632 | 135,045(2) | — | $7.51 | 9/27/2031 | | Michael Zagorsek, COO | 416,718 | | | $2.16 | 7/26/2026 | | | 138,906 | | | $2.18 | 9/6/2027 | | | 138,907 | | | $2.90 | 8/15/2029 | | | 351,893 | 92,606(3) | | $3.67 | 10/27/2020 | | Timothy Stonehocker, CTO | 222,250 | | | $1.39 | 5/19/2025 | | | 416,719 | | | $2.18 | 12/15/2026 | | | 166,688 | | | $2.90 | 8/15/2029 | | James Hom, CPO | — | | | — | — |

  26. Outstanding Equity Awards at 2023 Fiscal Year End

    (1) Awards are fully vested. (2) Grant Date of September 27, 2021; four year vesting schedule, under which 25% will vest 12 months after the grant date, and 3/48th of the shares will vest at the end of each quarter thereafter. (3) Grant Date of October 27, 2020; four year vesting schedule, under which 1/48th of the shares will vest at the end of each month thereafter.

  27. Outstanding Equity Awards at 2023 Fiscal Year End

    | | Stock Awards | | | | | | Name | Grant Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested(2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested(1) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(2) ($) | | Dr. Keyvan Mohajer, CEO | 7/20/2022(3) | 435,000 | $922,200 | 480,000 | $1,017,600 | | | 9/7/2022(4) | 250,000 | $530,000 | | | | | 8/3/2023(4) | 533,333 | $1,130,666 | | | | Nitesh Sharan, CFO | 7/20/2022(3) | 131,250 | $278,250 | 200,000 | $424,000 | | | 9/7/2022(4) | 125,000 | $265,000 | | | | | 8/3/2023(4) | 311,111 | $659,555 | | | | Michael Zagorsek, COO | 8/4/2022(3) | 181,250 | $384,250 | 200,000 | $424,000 | | | 9/7/2022(4) | 125,000 | $265,000 | | | | | 8/3/2023(4) | 311,111 | $659,555 | | | | James Hom, CPO | 8/4/2022(3) | 145,000 | $307,400 | 160,000 | $339,200 | | | 9/7/2022(4) | 97,222 | $206,111 | | | | | 8/3/2023(4) | 177,778 | $376,889 | | | | Timothy Stonehocker, CTO | 8/4/2022(3) | 126,875 | $268,975 | 140,000 | $296,800 | | | 9/7/2022(4) | 97,222 | $206,111 | | | | | 8/3/2023(4) | 177,778 | $376,889 | | |

  28. Outstanding Equity Awards at 2023 Fiscal Year End

    ____________ (1) PSU awards with performance goals not currently expected to be achieved but reported above in accordance with SEC rules. The PSUs have a four-year performance period and are subject to the following vesting schedule: (i) 25% if the Company achieves $100 million of GAAP revenue in a trailing 12 months; (ii) 25% if the Company is cash-flow positive in a trailing 12 months; (iii) 25% if the Company’s stock price reaches a 90-day average of $15; and (iv) 25% if the Company’s stock price reaches a 90-day average of $20. (2) The dollar amounts shown in Market Value columns determined by multiplying the number of shares or units shown in ‘share or units’ columns, as applicable, by $2.12, the closing price of our common stock on December 29, 2023. (3) Vesting in equal monthly installments over 4 years (48 months) from the grant date listed. (4) Vesting in equal monthly installments over 3 years (36 months) from the grant date listed.

  29. Option Exercises and Stock Vested at 2023 Fiscal Year End

    Option Exercises and Stock Vested at 2023 Fiscal Year End The following Option Exercises and Stock Vested table sets forth certain information regarding each exercise of stock options and each vesting of restricted stock during the last completed year for each of the named executive officers on an aggregated basis.

  30. Option Exercises and Stock Vested at 2023 Fiscal Year End

    | | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Dr. Keyvan Mohajer, CEO | 157,905 | $426,899(1) | 396,667 | $949,926 | | Nitesh Sharan, CFO | — | — | 211,525 | $505,475 | | Michael Zagorsek, COO | — | — | 214,612 | $511,228 | | Timothy Stonehocker, CTO | — | — | 155,514 | $372,362 | | James Hom, CPO | — | — | 163,211 | $391,252 |

  31. Option Exercises and Stock Vested at 2023 Fiscal Year End

    ____________ (1) Includes 49,978 shares acquired on June 20, 2023 with a FMV of $4.05, 45,525 shares acquired on September 20, 2023 with a FMV of $2.08 and 62,402 shares acquired December 20, 2023 with a FMV of $2.08.

  32. Pension Benefits

    Pension Benefits The Company has no defined benefit plans or other supplemental retirement plans for the named executive officers.

  33. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The Company has no nonqualified defined contribution plans or other nonqualified deferred compensation plans for the named executive officers.

  34. Potential Payments Upon a Termination or Change in Control

    Potential Payments Upon a Termination or Change in Control Payments to our NEOs upon a termination of employment are described under the “Potential Payments Upon a Termination or Change in Control” table below. The benefits payable upon termination were determined through arm’s length negotiations in connection with each NEO entering into an employment letter agreement with the Company. Any amounts that could be received upon termination or change in control are subject to a full release of claims in favor of the Company.

  35. Potential Payments Upon a Termination or Change in Control

    | NAME | BASE SALARY CONTINUATION ($)(1) | ANNUAL CASH BONUS CONTINUATION ($) | ACCRUED ANNUAL CASH BONUS ($) | ACCELERATION/ CONTINUED VESTING & EXERCISABILITY OF UNVESTED STOCK OPTIONS(2) ($) | ACCELERATION/ CONTINUED VESTING OF UNVESTED STOCK UNITS(3) ($) | HEALTH BENEFIT CONTINUATION(4) ($) | TOTAL ($) | | Dr. Keyvan Mohajer, CEO | | | | | | | | | Without Cause/With Good Reason(1) | $112,500 | $0 | $450,000 | — | — | | $562,500 | | Change in Control(2) | $450,000 | $0 | $450,000 | — | $3,600,466 | $8,746 | $4,509,212 | | Nitesh Sharan, CFO | | | | | | | | | Without Cause/With Good Reason | $87,500 | $0 | $210,000 | — | — | | $297,500 | | Change in Control | $350,000 | $0 | $210,000 | $0 | $1,626,805 | $5,041 | $2,191,847 | | Michael Zagorsek, COO | | | | | | | | | Without Cause/With Good Reason | $87,500 | $0 | $210,000 | — | — | | $297,500 | | Change in Control | $350,000 | $0 | $210,000 | $0 | $1,732,805 | $6,099 | $2,298,905 | | Timothy Stonehocker, CTO | | | | | | | | | Without Cause/With Good Reason | $83,750 | $0 | $167,500 | — | — | | $251,250 | | Change in Control | $335,000 | $0 | $167,500 | — | $1,148,775 | $0.00 | $1,651,275 | | James Hom, CPO | | | | | | | | | Without Cause/With Good Reason | $83,750 | $0 | $167,500 | — | — | | $251,250 | | Change in Control | $335,000 | $0 | $167,500 | — | $1,229,600 | $0.00 | $1,732,100 |

  36. Potential Payments Upon a Termination or Change in Control

    (1) The Company will pay an amount equal to 3 months of the NEOs’ then current base salary (2) Based on the closing market price of a share of our Class A common stock as of December 29, 2023 ($2.12), minus, in the case of stock options, the exercise price. (3) The Company will accelerate the vesting of any stock options that have time-based vesting and the RSUs such that will be deemed vested (as of the date of employment terminates). The Company may accelerate the vesting of PSUs in connection with the negotiation of any Change in Control transaction. (4) The Company will pay the entire COBRA premiums necessary to continue health insurance coverage in effect for the executive and eligible dependents on the termination date until the earliest of (A) the close of the 3 months period following the termination of employment, (B) the expiration of eligibility for the continuation coverage under COBRA, and (C) the date when becoming eligible for substantially equivalent health insurance coverage in connection with new employment.

  37. CEO Pay Ratio

    CEO Pay Ratio Pursuant to a mandate of the Dodd-Frank Act, the SEC adopted a rule requiring that we annually disclose the ratio of our median employee’s total annual compensation to the total annual compensation of our CEO, Keyvan Mohajer, who is also our principal executive officer (the “CEO Pay Ratio”). The Company’s compensation and benefits philosophy and the overall structure of the compensation and benefit programs are broadly similar across the organization and aim to encourage and reward all employees who contribute to the Company’s success. The Company strives to ensure the pay of every employee reflects the level of his or her job impact and responsibilities and is competitive within the Company’s peer group. Compensation rates are benchmarked and are generally set to be market-competitive in the country in which the jobs are performed. The Company’s ongoing commitment to pay equity is critical to successfully supporting a diverse workforce with opportunities for all employees to grow, develop, and contribute. We identified the median employee using annual total compensation, as determined pursuant to the Company’s tax and payroll records. We then determined the median employee’s compensation in accordance with Item 402(c)(2)(x) of Regulation S-K, as if the median employee’s pay were reportable in the Summary Compensation Table. Salary and wages were annualized for any permanent employees hired during the most recent fiscal year. A total of 259 employees globally who were employed by the Company on December 31, 2023, the last day of the Company’s fiscal year, were included in the determination of this calculation (including all employees, whether employed on a full-time, part-time, seasonal or temporary basis). As illustrated in the table below, the Company’s 2023 CEO Pay Ratio was approximately 12:1.

  38. CEO Pay Ratio

    | Dr. Keyvan Mohajer, CEO 2023 Compensation | $$1,863,978 | | Median Employee 2023 Compensation | $156,472 | | CEO Pay Ratio | 12:1 |

  39. Pay Versus Performance

    Pay Versus Performance As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information regarding executive pay and performance. The table below shows pay both as reported in the Summary Compensation Table for the applicable fiscal year and as “compensation actually paid” (or “CAP”) for our principal executive officer and as an average of all of our other NEOs (the “Non-PEO NEOs”) for the applicable fiscal year. Both the Summary Compensation Table pay and CAP are calculated in accordance with the requirements of Regulation S-K and may differ substantially from the manner in which the Compensation Committee makes decisions regarding executive pay. We describe the Compensation Committee’s decision-making process for executive compensation above in the CD&A.

  40. Pay Versus Performance

    | Year | Summary Compensation Total Compensation for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total Compensation Paid to Non- PEO NEOs(1) | Average Compensation Actually Paid to Non-CEO NEOs(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income(4) | [Company-Selected Metric](5) | | | | | | | Total Shareholder Return(3) | Peer Group Total Shareholder Return(3) | | | | 2023 | $1,863,978 | $998,949 | — | — | — | — | — | — | | 2022 | $10,435,542 | — | — | — | — | — | — | — | | 2021 | $260,000 | — | — | — | — | — | — | — |

  41. Pay Versus Performance

    (1) For 2023, our PEO was Dr. Mohajer, and our Non-PEO NEOs were Messrs. Sharan, Zagorsek, Hom, and Stonehocker. For 2022, our PEO was Dr. Mohajer, and our Non-PEO NEOs were Messrs. Sharan and Irani. For 2021, our PEO was Dr. Mohajer, and our Non-PEO NEOs were Messrs. Sharan and Irani. (2) The following table describes the adjustments to the Summary Compensation Table total pay for our PEO, as well as the average for our Non-PEO NEOs, to determine CAP, which has been computed in accordance with Item 402(v). Amounts do not reflect actual compensation earned or paid to our NEOs during the applicable year.

  42. Pay Versus Performance

    | | PEO | | | Average of Non-PEO NEOs | | | | Year in Table: | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | | Total Compensation as reported in the Summary Compensation Table (“SCT”) | — | — | — | — | — | — | | Less: Grant Date Fair Value of Equity Awards as reported in SCT | — | — | — | — | — | — | | Add: Year-End Fair Value of Equity Awards Granted in the Year | — | — | — | — | — | — | | Add: Change in Fair Value of Outstanding and Unvested Equity Awards | — | — | — | — | — | — | | Add: Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | — | — | — | — | — | — | | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | — | — | — | — | — | — | | Compensation Actually Paid | — | — | — | — | — | — |

  43. Pay Versus Performance

    (3) The amounts reflect the cumulative total shareholder return (TSR) of our common stock and [peer group] at the end of each fiscal year. The TSR value listed in each year reflects what the cumulative value of $100 would be if invested on [either share price on December 31, 2020 or later date if IPO was after that]. (4) The dollar amounts reported represent the net income reflected in the Company’s audited financial statements for the applicable year. (5) While we use many financial and non-financial metrics to develop our executive compensation programs, [Company-Selected Measure] is the financial performance measure that, in our assessment, represents the most important financial performance measure used to link compensation actually paid to NEOs to company performance in our most recently completed fiscal year.

  44. Director Compensation

    Director Compensation On June 2, 2022, our Board adopted and approved a director compensation policy, which provides to each of the non-employee directors (i) an annual retainer of $32,000, payable quarterly (ii) additional annual cash retainers, payable quarterly, for committee service as follows: (A) Chair of the Audit Committee: $20,000; (B) member of the Audit Committee: $10,000; (C) Chair of the Compensation Committee: $14,500; (D) member of the Compensation Committee: $7,300; (E) Chair of the Nominating and Corporate Governance Committee: $7,500; and (F) member of the Nominating and Corporate Governance Committee: $3,800; (iii) an initial grant of restricted stock units having a grant day value of $380,000, although a director may elect to receive half of the initial grant in nonqualified stock options, which initial grant shall vest over three years; (iv) an annual grant of restricted stock units having a grant day value of $165,000, which shall vest over four quarters; and (iv) travel expense reimbursement. In the event of a Change in Control (as defined in the 2022 Incentive Award Plan), any then-unvested initial grant or annual RSU grant will fully vest (and become exercisable, in the case of an option) as of immediately prior to the effective time of such transaction, subject to the outside director’s continuous board service through the effective date of such transaction. The following table sets forth information regarding compensation earned by our non-employee directors for the year ended December 31, 2023.

  45. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards ($) | Total ($) | | Eric Ball | 63,100 | 216,500(2) | — | 279,600 | | Larry Marcus | 64,000 | 216,500(3) | — | 280,500 | | Diana Sroka | 42,000 | 216,500(4) | — | 258,500 |

  46. Director Compensation

    ____________ (1) Stock Awards granted June 29, 2023 were 48,111 RSUs with a value of $3.43 determined by trailing 20-day average trading price prior to grant date. The values reported here are the aggregate grant date fair values of such awards computed in accordance with FASB ASC Topic 718. (2) Eric Ball has 39,990 stock options and 41,083 Restricted Stock Awards unvested outstanding. (3) Larry Marcus has 58,111 Restricted Stock Awards unvested outstanding. (4) Diana Sroka has 39,990 Stock Options and 41,083 Restricted Stock Awards unvested outstanding.