DEF 14A of Incannex Healthcare Inc., Nov 12, 2024

DEF 14A of Incannex Healthcare Inc.

Filed Nov 12, 2024 · FY20240001213900-24-096099

Open on EDGAR

  1. Our Board of Directors

    Our Board of Directors Our amended and restated certificate of incorporation and amended and restated bylaws provide that our business is to be managed by or under the direction of our board of directors. Our board of directors is divided into three classes for purposes of election. One class is elected at each annual meeting of stockholders to serve for a three-year term. Our board of directors currently consists of five members, classified into three classes as follows: (1) Peter Widdows constitutes a class with a term ending at the Annual Meeting; (2) Dr. George Anastassov and Robert Clark constitute a class with a term ending at the 2025 annual meeting; and (3) Joel Latham and Troy Valentine constitute a class with a term ending at the 2026 annual meeting. Peter Widdows has been nominated for election at the Annual Meeting for a term of three years to serve until the 2027 annual meeting of stockholders, and until his successor has been elected and qualified or subject to his earlier death, resignation, disqualification or removal. The following table sets forth certain information concerning our directors as of October 21, 2024:

  2. Our Board of Directors

    | Name | Age | Position with the Company | | Joel Latham | 35 | Chief Executive Officer, President and Director | | Troy Valentine | 50 | Chairperson | | Peter Widdows | 58 | Director | | Dr. George Anastassov | 60 | Director | | Robert Clark | 64 | Director |

  3. Our Board of Directors

    Joel Latham. Joel Latham has served as the Chief Executive Officer, President, and Director of Incannex Healthcare Inc. since July 2023. With over 20 years of experience in both public and private sectors, Mr. Latham leads Incannex’s strategic vision, focusing on advancing innovative therapies through clinical development and regulatory approval. Previously, he was the Chief Executive Officer and Managing Director of Incannex Healthcare Limited, which became a subsidiary of Incannex following the re-domiciliation (“Incannex Australia”), where he played a key role in the company’s growth and its successful transition to Nasdaq. Prior to his appointment as Chief Executive Officer of Incannex Australia, Mr. Latham was the General Manager of Incannex Australia since 2016. Mr. Latham has also held senior roles at Mars Foods, Tabcorp, and Philip Morris International, bringing extensive expertise in corporate strategy and global market expansion. The board of directors has concluded that Mr. Latham should serve as a director because of his extensive leadership, business and corporate strategy expertise in the life sciences industry. Troy Valentine. Troy Valentine has served as the Chairperson of the Board of Directors of Incannex Healthcare Inc. since November 2023 and was the Chairperson of the Board for Incannex Australia from December 2017 to November 2023. With over 30 years of experience in finance, managerial, and board roles, Mr. Valentine began his career at Hartley Poynton (now Euroz Hartleys Limited) in 1994 before moving to Patersons Securities (now Canaccord Genuity) in 2000, where he became an Associate Director. He is also a director and co-founder of Alignment Capital Pty Ltd, a boutique corporate advisory firm established in 2014. Mr. Valentine holds a Bachelor of Commerce from the University of Western Australia. The board of directors has concluded that Mr. Valentine should serve as a director because of his board and managerial experience and his experience in the life sciences industry. Peter Widdows. Peter Widdows has served as a Director of Incannex Healthcare Inc. since November 2023, following his role as Director at Incannex Australia from March 2018 to November 2023. Mr. Widdows is the current Board Chair and and non-executive director of Youi Insurance, an Australian general Insurance company and the non-executive Chaiman of Sunny Queens Australia, an Australian FMCG company. He has extensive experience in global leadership having served as the Regional Chief Executive Officer for a large part of Asia and Australasia for H. J. Heinz Company, a global food company, from 2008 to 2010, and earlier, the Chief Executive Officer and Managing Director for Heinz Australia from 2002 to 2008. He also held managing director roles in New Zealand and senior Strategic and Finace executive roles at StarKist Foods Inc, a global seafood and petfood company based in Cincinnati, Ohio. He is a Fellow of the Institute of Chartered Accountants in England and Wales, bringing deep expertise across finance, strategy, and operations. The board of directors has concluded that Mr. Widdows should serve as a director because of his financial expertise and experience in the life sciences industries. Dr. George Anastassov. Dr. George Anastassov has been a Director of Incannex Healthcare Inc. since November 2023, following his role as Director at Incannex Australia from June 2022 to November 2023. A pioneer in cannabinoid-based therapeutics, Dr. Anastassov co-developed the world’s first cannabinoid-containing chewing gum delivery system. From September, 2000 to July, 2019, he served as the Director of Sannamad Foundation and Sannamad Pharmaceuticals, a Biotechnology Company he cofounded. He co-founded and served as Managing Director of APIRx Pharmaceuticals LLC from 2017 to 2022, playing a pivotal role in the development of Combination Compounds for wide range of medical indications. Previously, he was the CEO and co-founder of AXIM Biotechnologies, an biotechnology research and development company, from 2014 to 2018. Under Dr. Anastassov’ leadership AXIM was voted as top 5 growing biotech companies by Fox Business News in 2017. Dr. Anastassov holds a BA degree in Fine Arts from The Fine Arts School in Sofia, Bulgaria, MD degree from Higher Medical Institute, Sofia, Bulgaria, DDS degree from New York University and a MBA degree from Haslam Business School, The University of Tennessee, Knoxville. Dr. Anastassov is trained as a craniomaxillofacial and base of the skull surgeon and has been on the clinical and academic faculty at Mt. Sinai School of Medicine, New York, USA since July of 1997.The board of directors has concluded that Dr. Anastassov should serve as a director because of his significant experience in the development of cannabinoid-based therapies, commercial operations and strategic decision-making. Robert Clark. Robert Clark has been a Director of Incannex Healthcare Inc. since November 2023, having previously held the same position at Incannex Australia from August 2022 to November 2023. He is a seasoned expert in strategic regulatory affairs, boasting over 40 years of extensive regulatory experience in the U.S. and internationally. Mr. Clark spent more than 20 years at Pfizer Inc., a pharmaceutical and biotechnology company, and over 10 years at Novo Nordisk. Since May 2012, he has held the role of Vice President, U.S. Regulatory Affairs at Novo Nordisk. Prior to this, he served as Vice President of Worldwide Regulatory Strategy and U.S. Regulatory Affairs at Pfizer from 1992 to 2021. Mr. Clark holds a Masters of Science degree in Pharmacology from New York Medical College. The board of directors has concluded that Mr. Clark should serve as a director because of his extensive regulatory experience in the life sciences industry.

  4. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

    EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

  5. Summary Compensation Table

    Summary Compensation Table The following table sets forth information shows the total compensation paid or accrued to our named executive officers during the fiscal years ended June 30, 2024 and 2023. All compensation to our named executive officers, with the exception of Dr. Barbato, is paid in Australian dollars and then converted in U.S. dollars for purposes of reporting. Our named executive officers consist of (1) our Chief Executive Officer and President, (2) our Chief Technology Officer, (3) our Chief Financial Officer, and (4) our Chief Medical Officer.

  6. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | | Joel | 2024 | 595,958 | — | 4,955,360 | 189,429 | — | 13,112 | 5,753,859 | | Latham(2) | 2023 | 552,206 | 286,878 | 713,604 | 471,838 | — | — | 2,024,526 | | Lekhram | 2024 | 137,645 | — | — | — | — | — | 137,645 | | Changoer | 2023 | 106,061 | — | — | — | — | — | 106,061 | | Joseph | 2024 | 107,940 | 26,873 | 64,663 | 8,417 | — | — | 207,893 | | Swan(3) | 2023 | 85,211 | 10,943 | 35,965 | 24,199 | — | — | 158,652 | | Luigi | 2024 | — | — | — | — | — | — | — | | M. Barbato, M.D.(4) | 2023 | — | — | — | — | — | — | — |

  7. Summary Compensation Table

    ____________ (1) The amounts reported in the “Stock Awards” and “Option Awards” column represent the aggregate grant date fair value of the stock options awarded to our named executive officers during the applicable fiscal year, calculated in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 12 to our Financial Statements, included in our Annual Report. The amounts reported in these columns reflect the accounting cost for the stock awards and stock options and do not reflect the actual economic value that will be realized by the individual upon the vesting of the stock awards and stock options, and the exercise of the stock options or the sale of the common stock underlying such awards. (2) The amount reported in the “All Other Compensation” column includes $13,112 for Mr. Latham’s car allowance. The amount presented in this table does not include fees paid in connection with Mr. Latham’s board service, which is presented in the table below, and also does not include Australian post-employment benefits. (3) This amount does not include Australian post-employment benefits. (4) Dr. Barbato was appointed Chief Medical Officer effective October 21, 2024 and therefore did not receive any compensation in the years ended June 30, 2024 or June 30, 2023.

  8. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding outstanding equity awards held by our named executive officers as of June 30, 2024.

  9. Outstanding Equity Awards at Fiscal Year-End

    | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested ($)(1) | | Joel Latham | 11/28/23 | 7,500 | — | $3.29 | 06/30/2025 | — | — | | | 11/28/23 | 7,500 | — | $3.29 | 06/30/2026 | — | — | | | 11/28/23 | 7,500 | — | $3.29 | 06/30/2027 | — | — | | | 11/28/23 | 7,500 | — | $3.29 | 06/30/2026 | — | — | | | 11/28/23 | 7,500 | — | $3.29 | 06/30/2027 | — | — | | | 11/28/23 | 7,500 | — | $3.29 | 06/30/2028 | — | — | | | 11/28/23 | 9,334 | — | $17.10 | 07/01/2025 | — | — | | | 11/28/23 | 9,334 | — | $20.39 | 07/01/2026 | — | — | | | 11/28/23 | 9,334 | — | $23.02 | 07/01/2027 | — | — | | | 11/28/23 | 9,334 | — | $17.10 | 07/01/2026 | — | — | | | 11/28/23 | 9,334 | — | $20.39 | 07/01/2027 | — | — | | | 11/28/23 | — | 9,334(2) | $23.02 | 07/01/2028 | — | — | | | 11/28/23 | 15,833 | — | $16.44 | 04/30/2026 | | — | | | 12/13/23 | — | — | — | — | $335,000 | $1,373,500 | | Lekhram Changoer | — | — | — | — | — | — | — | | Joseph Swan | 11/28/23 | 1,000 | — | $17.10 | 07/01/2025 | — | — | | | 11/28/23 | 1,000 | — | $20.39 | 07/01/2026 | — | — | | | 11/28/23 | 1,000(3) | 1,000 | $23.02 | 07/01/2027 | — | — | | | 05/06/24 | — | — | — | — | $33,862 | $133,332 |

  10. Outstanding Equity Awards at Fiscal Year-End

    ____________ (1) The market value of the stock awards is based on the closing price of our common stock of $2.94 per share on June 28, 2024. (2) Granted on November 28, 2023. Vesting to occur on June 30, 2025, provided Mr. Latham is still employed on such date. (3) Granted on November 28, 2023. Vested on July 1, 2024.

  11. Option Exercises and Stock Vested at Fiscal Year End

    Option Exercises and Stock Vested at Fiscal Year End The following table shows information regarding exercises of options to purchase our common stock and vesting of stock awards held by each of our named executive officers during the fiscal year ended June 30, 2024.

  12. Option Exercises and Stock Vested at Fiscal Year End

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) | | (a) | (b) | (c) | (d) | (e) | | Joel Latham | — | — | 1,005,000(1) | 3,450,500 | | Lekhram Changoer | — | — | — | — | | Joseph Swan | — | — | 16,931(2) | 49,946 |

  13. Option Exercises and Stock Vested at Fiscal Year End

    (1) 335,000 shares vested on December 31, 2023 and 770,000 shares vested on June 30, 2024, and the value realized is calculated by multiplying the number of vested shares by the closing price of our common stock on the Nasdaq Global Market on the applicable vesting date. (2) 16,931 shares vested on June 30, 2024, and the value realized is calculated by multiplying the number of vested shares by the closing price of our common stock on the Nasdaq Global Market on the applicable vesting date.

  14. Pension Benefits

    Pension Benefits We do not have any qualified or non-qualified defined benefit plans.

  15. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation We do not have any nonqualified defined contribution plans or other deferred compensation plans.

  16. Potential Payments upon Termination or Change-In-Control

    Potential Payments upon Termination or Change-In-Control Regardless of the manner in which our named executive officers’ employment or service terminates, they are entitled to receive certain accrued amounts previously earned during their term of employment or service, including unpaid salary, reimbursement of expenses owed, and accrued but unpaid paid time off and any continuation of benefits required by applicable law. Lekhram Changoer Pursuant to the service agreement by and between Incannex Healthcare Inc. and Lekhram Changoer (the “Changoer Service Agreement”), the performance rights issued to Mr. Changoer will be immediately exercised and shares issued to him (i) upon the occurrence of a takeover bid, under which a bid to acquire all or some of the ordinary shares in the capital of Incannex Healthcare Inc. is approved by the board of directors of Incannex Healthcare Inc. and recommended to its stockholders that the takeover bid be accepted, (ii) if a court approves a scheme of arrangement, which would result in a person having a Relevant Interest (as defined in the Corporations Act 2001(Cth)) in more than 50% of the ordinary shares in the capital of Incannex Healthcare Inc., or (iii) if Incannex Healthcare Inc. announced to the Australian Securities Exchange an intention to sell all or substantially all of its business undertakings or assets. 2023 Equity Incentive Plan In the event of a “change in control” of Incannex Healthcare Inc., as defined in the 2023 Plan, then unless otherwise provided in an award agreement, the Committee (as defined in the 2023 Plan) may, in its sole discretion: (i) cancel awards for a cash payment equal to their fair value (as determined in the sole discretion of the Committee), (ii) provide for the issuance of replacement awards on substantially similar terms, (iii) terminate stock options without providing accelerated vesting, (iv) accelerate the exercisability or vesting of any Award (as defined in the 2023 Plan) or (v) take any other action with respect to the awards the Committee deems appropriate. The treatment of awards upon a change in control may vary among participants and types of awards in the Committee’s sole discretion. Awards subject to performance goals are required to be settled upon a “change in control” of Incannex Healthcare Inc. based upon the extent to which the performance goals underlying such awards have been achieved as determined in the sole discretion of the Committee.

  17. Director Compensation

    Director Compensation We pay directors’ fees to our directors for their service on our board of directors. We generally provide our non-employee directors with cash and equity compensation for their service on the board of directors. The board of directors is responsible for considering and approving the compensation paid to our non-employee directors, upon recommendation from the compensation committee. We also have a policy of reimbursing all of our non-employee directors for their reasonable out-of-pocket expenses in connection with attending board and committee meetings. The directors’ compensation for their services on the board of directors is periodically reviewed by the compensation committee which may recommend changes to such compensation to the board of directors as appropriate. The following table sets forth information regarding compensation earned with respect to the fiscal year ended June 30, 2024, by each individual who served as a director during such fiscal year. All compensation for Mr. Latham, Mr. Valentine and Mr. Widdows is paid in Australian dollars and then converted in US dollars for purposes of reporting. All compensation for Dr. Anastassov and Mr. Clark is paid in US dollars. The following table shows the total compensation paid or accrued during the fiscal year ended June 30, 2024 each of our non-employee directors. Directors who are employed by us are not compensated for their service on our board of directors.

  18. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Joel Latham(2) | 95,000 | — | — | — | — | — | 95,000 | | Troy Valentine | 312,976 | 2,477,681 | 94,715 | — | — | — | 2,885,372 | | Peter Widdows | 283,770 | 343,849 | — | — | — | — | 627,619 | | Dr. George Anastassov | 132,000 | 343,849 | — | — | — | — | 475,849 | | Robert Clark | 75,000 | 343,849 | — | — | — | — | 418,849 |

  19. Director Compensation

    ____________ (1) The amounts reported in the “Stock Awards” and “Option Awards” column represent the aggregate grant date fair value of the stock options awarded to our named executive officers during the applicable fiscal year, calculated in accordance with FASB, ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 12 “Stock-based payments” of the “Notes to Consolidated Financial Statements” in the Annual Report. The amounts reported in these columns reflect the accounting cost for the stock awards and stock options and do not reflect the actual economic value that will be realized by the individual upon the vesting of the stock awards and stock options and the exercise of the stock options or the sale of the common stock underlying such awards. (2) Mr. Latham served as our Chief Executive Officer during the fiscal year ended June 30, 2024; as such, his compensation earned as a director is disclosed in the Summary Compensation Table above. The following table shows the aggregate number of shares subject to options and RSUs held by each of our non-employee directors as of June 30, 2024.

  20. Director Compensation

    | Name | Number of Stock Options Held at Fiscal Year-End | Number of Shares of Restricted Stock Held at Fiscal Year-End | | Troy Valentine | — | 167,500 | | Peter Widdows | — | 25,000 | | Dr. George Anastassov | — | 25,000 | | Robert Clark | — | 25,000 |

  21. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS On October 24, 2024, Peter Widdows was nominated for election at the Annual Meeting. The board of directors currently consists of five members, classified into three classes as follows: Peter Widdows solely constitutes a class with a term ending at the Annual Meeting; Dr. George Anastassov and Robert Clark constitute a class with a term ending at the 2025 annual meeting of stockholders; and Joel Latham and Troy Valentine constitute a class with a term ending at the 2026 annual meeting of stockholders. At each annual meeting of stockholders, directors are elected for a full term of three years to succeed those directors whose terms are expiring. The board of directors has voted to nominate Peter Widdows for election at the Annual Meeting for a term of three years to serve until the 2027 annual meeting of stockholders, and until his successor has been elected and qualified or subject to his earlier death, resignation, disqualification or removal. The Class II directors (Dr. George Anastassov and Robert Clark) and the Class III directors (Joel Latham and Troy Valentine) will serve until the annual meetings of stockholders to be held in 2025 and 2026, respectively, and until their respective successors have been elected and qualified. Unless authority to vote for Peter Widdows is withheld, the shares represented by the enclosed proxy will be voted FOR the election of Peter Widdows as director. In the event that Mr. Widdows becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as the board of directors may recommend in his place. We have no reason to believe that Mr. Widdows will be unable or unwilling to serve as a director. A plurality of the shares voted for Mr. Widdows at the Annual Meeting is required to elect Mr. Widdows as a director. THE board of directors Recommends The Election Of PETER WIDDOWS As Director, And Proxies Solicited By THE board of directors Will Be Voted In Favor Thereof Unless A Stockholder Has Indicated Otherwise On The Proxy.