DEF 14A of DiaMedica Therapeutics Inc.
Filed Mar 28, 2025 · FY20240001437749-25-009696
SKILLS AND EXPERIENCES OF DIRECTOR NOMINEES
SKILLS AND EXPERIENCES OF DIRECTOR NOMINEES The matrix below summarizes what the Board of Directors believes are desirable types of skills and experiences possessed by DiaMedica’s director nominees because of their particular relevance to our Company’s business and strategy. While all of these were considered by the Board of Directors in connection with this year’s director nomination process, the following matrix does not encompass all skills and experiences of our director nominees.
SKILLS AND EXPERIENCES OF DIRECTOR NOMINEES
| | Rick Pauls | James Parsons | Michael Giuffre, M.D. | Richard Kuntz, M.D., M.Sc. | Tanya Lewis | Daniel O’Connor | Charles Semba, M.D. | | Skills/Experiences | | | | | | | | | Public Company CEO | ✔ | | | | | ✔ | | | Public Company Senior Executive | ✔ | ✔ | | ✔ | ✔ | ✔ | ✔ | | Licensing/Business Development and Mergers and Acquisitions | ✔ | ✔ | ✔ | ✔ | | ✔ | | | Strategic Planning | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | Clinical and Clinical Development | ✔ | | ✔ | ✔ | ✔ | ✔ | ✔ | | Commercialization and Product Planning | | ✔ | ✔ | ✔ | ✔ | ✔ | | | Medical/Scientific/Research and Development | | | ✔ | ✔ | ✔ | | ✔ | | Pharmaceutical Industry | ✔ | ✔ | | | ✔ | ✔ | ✔ | | Regulatory and Quality | ✔ | | ✔ | ✔ | ✔ | ✔ | | | Reimbursement/Payer/Health Outcomes | | | | ✔ | | ✔ | | | CFO/Financial Expertise and Accounting | | ✔ | | | | ✔ | | | Capital Markets/Raising Additional Financing | ✔ | ✔ | | | | ✔ | | | Public Company Governance | ✔ | ✔ | ✔ | ✔ | | ✔ | | | Investor Relations | ✔ | ✔ | | | | ✔ | ✔ | | Legal and Compliance/Ethics | | | | | | ✔ | | | Manufacturing/Operations | ✔ | | | | ✔ | ✔ | | | International Experience | ✔ | ✔ | ✔ | | | ✔ | ✔ |
EXECUTIVE COMPENSATION BEST PRACTICES
| What We Do: | What We Don’t Do: | | ● Emphasize pay for performance | ● No guaranteed salary increases or bonuses | | ● Structure our executive compensation so a significant portion of pay is at risk | ● No repricing of stock options unless approved by shareholders | | ● Maintain competitive pay packages | ● No liberal share counting under our equity plan | | ● Structure our executive compensation so a significant portion is paid in equity | ● No hedging or pledging of DiaMedica securities | | ● Maintain a clawback policy | ● No perquisites |
HOW WE PAY
| ● | Short-term incentive – a variable, short-term element that is payable in cash and is based on annual corporate performance objectives and individual performance objectives. |
HOW WE PAY
| ● | Long-term incentive – a variable, long-term element that is provided in stock options. |
VOTING PROPOSAL ONE—ELECTION OF DIRECTORS
VOTING PROPOSAL ONE—ELECTION OF DIRECTORS
Board Size and Structure
Board Size and Structure Our Articles provide that the Board of Directors will consist of at least three members. The size of the Board of Directors is currently fixed at eight since the Board of Directors currently consists of eight directors. The Board of Directors has reduced the size of the Board at seven effective as of the Annual General Meeting since Richard Pilnik, a current director, is not standing for re-election at the Annual General Meeting. Each director is elected annually by the shareholders and serves for a term that will end at the next annual general meeting of shareholders.
Information about Board Nominees
Information about Board Nominees The Board of Directors has nominated the following seven individuals to serve as our directors until the next annual general meeting of shareholders or until their respective successors are elected and qualified. All of the nominees for director named below are current members of the Board of Directors.
Information about Board Nominees
| Name | Age | Position | | James Parsons(1)(2) | 59 | Chairman of the Board | | Rick Pauls | 53 | President and Chief Executive Officer, Director | | Michael Giuffre, M.D.(1)(3)(4)(5) | 69 | Director | | Richard Kuntz, M.D., M.Sc.(1)(2)(5) | 67 | Director | | Tanya Lewis(1)(3)(4)(5) | 54 | Director | | Daniel O’Connor(1)(2)(4) | 60 | Director | | Charles Semba, M.D.(1)(2)(3)(5) | 65 | Director |
Information about Board Nominees
| (1) Independent Director |
Information about Board Nominees
| (2) Member of the Audit Committee |
Information about Board Nominees
| (3) Member of the Compensation Committee |
Information about Board Nominees
| (4) Member of the Nominating and Corporate Governance Committee |
Information about Board Nominees
| (5) Member of the Scientific and Clinical Research Committee |
Information about Board Nominees
Richard Pilnik, a current Board member and the former Chairman of the Board, is not standing for re-election at the Annual General Meeting. The Board of Directors thanks Mr. Pilnik for his 16 years of dedicated service to our Company, including during the last 10 years serving as Chairman of the Board.
Additional Information about Board Nominees
Additional Information about Board Nominees The following paragraphs provide information about each current director and nominee for director, including all positions held, principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the director or nominee currently serves as a director or has served as a director during the past five years. We believe that all of our directors and nominees display personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of the Board of Directors and its committees; a fit of skills and personality with those of our other directors that helps build a board that is effective, collegial and responsive to the needs of our Company; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our shareholders. The information presented below regarding each director and nominee also sets forth specific experience, qualifications, attributes and skills that led the Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure. James Parsons has served as a member of the Board of Directors since October 2015. Mr. Parsons has served as our Chairman of the Board since January 2025. Mr. Parsons currently serves as Chief Financial Officer of Sernova Corp., a TSX listed biotechnology company, a position he has held since October 2024. Prior to Sernova, Mr. Parsons served as Chief Financial Officer and Corporate Secretary of Trillium Therapeutics Inc., a Nasdaq-listed immuno-oncology company, from August 2011 until its acquisition by Pfizer in November 2021, at which time he became employed by Pfizer Canada ULC until March 2022. Mr. Parsons serves as a member of the board of directors, nominating and governance and audit committees of Oncolytics Biotech Inc., a Nasdaq/TSX listed company, and served on the board of directors and chair of both the audit committee and nominating and corporate governance committee of Sernova Corp. from April 2012 to January 2025. Mr. Parsons has been a Chief Financial Officer in the life sciences industry since 2000 with experience in therapeutics, diagnostics and devices. Mr. Parsons has a Master of Accounting degree from the University of Waterloo and is a Chartered Professional Accountant and Chartered Accountant. Mr. Parsons is a resident of Ontario, Canada. We believe that Mr. Parsons’s financial experience, including his history and knowledge of our Company, enable him to make valuable contributions to the Board of Directors. Rick Pauls was appointed our President and Chief Executive Officer in January 2010. Mr. Pauls has served as a member of the Board of Directors since April 2005 and served as Chairman of the Board from April 2008 to July 2014. Prior to joining DiaMedica, Mr. Pauls was the Co-Founder and Managing Director of CentreStone Ventures Inc., a life sciences venture capital fund, from February 2002 until January 2010. Mr. Pauls was an analyst for Centara Corporation, another early-stage venture capital fund, from January 2000 until January 2002. From June 1997 until November 1999, Mr. Pauls worked for General Motors Acceptation Corporation specializing in asset-backed securitization and structured finance. Mr. Pauls previously served as an independent member of the board of directors of LED Medical Diagnostics, Inc. Mr. Pauls received his Bachelor of Arts in Economics from the University of Manitoba and his MBA in Finance from the University of North Dakota. Mr. Pauls is a resident of Minnesota, USA. We believe that Mr. Pauls’s experience in the biopharmaceutical industry as an executive and investor and his extensive knowledge of all aspects of our Company, business, industry, and day-to-day operations as a result of his role as our President and Chief Executive Officer enable him to make valuable contributions to the Board of Directors. In addition, as a result of his role as President and Chief Executive Officer, Mr. Pauls provides unique insight into our future strategies, opportunities and challenges, and serves as the unifying element between the leadership and strategic direction provided by the Board of Directors and the implementation of our business strategies by management. Michael Giuffre, M.D. has served as a member of the Board of Directors since August 2010. Since July 2009, Dr. Giuffre has served as a Clinical Professor of Cardiac Sciences and Pediatrics at the University of Calgary and has had an extensive portfolio of clinical practice, cardiovascular research and university teaching. Dr. Giuffre is actively involved in health care delivery, medical leadership and in the biotechnology business sector. From 2012 to October 2019, Dr. Giuffre served as Chief Scientific Officer and President of FoodChek Laboratory, a global developer and provider of proprietary rapid and accurate food safety tests for the detection of foodborne and environmental pathogens and other microorganisms, and also as a member of the board of directors of FoodChek Systems Inc. From November 2017 to October 2019, he served as FoodChek Systems Inc.’s Chairman of the Board. Dr. Giuffre previously served on the board of directors of the Canadian Medical Association (CMA), Unicef Canada, the Alberta Medical Association (AMA), Can-Cal Resources Ltd, Vacci-Test Corporation, IC2E International Inc., MedMira Inc. and Brightsquid Dental, Inc. Dr. Giuffre has received a Certified and Registered Appointment and a Distinguished Fellow appointment by the American Academy of Cardiology. In 2005, he was awarded Physician of the Year by the Calgary Medical Society and in 2017 was “Mentor of the Year” for the Royal College of Physicians and Surgeons of Canada. Dr. Giuffre was also a former President of the AMA and the Calgary and Area Physicians Association and also a past representative to the board of the Calgary Health Region. Dr. Giuffre holds a Bachelor of Science in cellular and microbial biology, a Ph.D. candidacy in molecular virology, an M.D. and an M.B.A. He is Canadian Royal College board certified FRCPS in specialties that include Pediatrics and Pediatric Cardiology and has a subspecialty in Pediatric Cardiac Electrophysiology. Dr. Giuffre is currently a member of the board of directors of Avenue Living (AL) Asset Management, a private real estate company in Alberta, Canada and its affiliates, AL Real Estate Opportunity Trust and AgriSelect Trust. Dr. Giuffre is currently a resident of Alberta, Canada. We believe that Dr. Giuffre’s medical experience, including as a practicing physician and professor, enable him to make valuable contributions to the Board of Directors.
Additional Information about Board Nominees
Richard Kuntz, M.D., M.Sc. has served as a member of our board of directors since May 2023. Dr. Kuntz recently retired from Medtronic plc (NYSE:MDT), a global medical device company, where he was the Chief Medical Officer & Scientific Officer and a member of the Executive Committee. Prior to that, he served as Senior Vice President and President, Neuromodulation of Medtronic from October 2005 to August 2009. Before joining Medtronic, he was the founder and Chief Scientific Officer of the Harvard Clinical Research Institute in Boston. He also served as an Associate Professor of Medicine at Harvard Medical School, Chief of the Division of Clinical Biometrics, and as an Interventional Cardiologist in the division of cardiovascular diseases at the Brigham and Women’s Hospital in Boston. In addition, he served as a founding Governor of the Patient Centered Outcomes Research Institute (PCORI), as part of the US Affordable Care Act. He also served as an advisor to multiple national and regional committees, in the National Academy of Medicine and National Institutes of Health (NIH). He is presently serving as a working group member of NIH’s Helping to End Addiction Long-term® (HEAL) program. Dr. Kuntz serves as a member of the board of directors of ZimVie Inc. and IDENTIV, INC., which are Nasdaq listed companies. Dr. Kuntz has directed numerous multicenter clinical trials and has authored more than 250 original publications. His major interests are traditional and alternative clinical trial design and biostatistics. Dr. Kuntz graduated from Miami University and received his medical degree from Case Western Reserve University School of Medicine. He completed his residency and chief residency in internal medicine at the University of Texas Southwestern Medical School, Parkland Hospital, Dallas, and then completed fellowships in cardiovascular diseases and interventional cardiology at the Beth Israel Hospital and Harvard Medical School, Boston. Dr. Kuntz received his Master of Science in biostatistics from the Harvard T.H. Chan School of Public Health. We believe that Dr. Kuntz’s experience in the pharmaceutical industry, particularly his demonstrated leadership skills relating to medical advancements in neurology and his deep expertise in stroke treatments, enable him to make valuable contributions to the Board of Directors. Tanya Lewis has served as a member of the Board of Directors since March 2023. Ms. Lewis served as the Chief Development Operations Officer at Replimune Group, Inc., a Nasdaq listed clinical-stage biotechnology company, from May 2021 to April 2024 and from November 2020 to May 2021, served as a director of Replimune Group, Inc. Ms. Lewis served as Executive Vice President, Chief Regulatory Officer and Quality Officer at Karyopharm Therapeutics Inc., a pharmaceutical company, from November 2019 to May 2021, and previously served as Senior Vice President, Regulatory and Quality Affairs from November 2018 to November 2019. Ms. Lewis is also a former director of Karyopharm Therapeutics Inc. Prior to joining Karyopharm Therapeutics Inc., Ms. Lewis served as Vice President, Regulatory and Quality Affairs for Syros Pharmaceuticals, Inc., a pharmaceutical company, from January 2017 to July 2018. Prior to joining Syros Pharmaceuticals, Ms. Lewis served as Vice President, Regulatory Affairs and Quality Assurance for Idera Pharmaceuticals, Inc., a pharmaceutical company, from October 2015 to December 2016. Before joining Idera Pharmaceuticals, Ms. Lewis served as Vice President, Regulatory Affairs for Tesaro, Inc., a pharmaceutical company, from October 2011 to June 2015 and prior to that served in various roles at Millennium Pharmaceuticals. Inc. Ms. Lewis serves as a member of the board of directors of Sernova Corp, a TSX listed biotech company. Ms. Lewis holds a Bachelor of Science degree in Biology from Northeastern University and a Master of Science degree in Regulatory Affairs and Health Policy from Massachusetts College of Pharmacy and Allied Health Science. We believe that Ms. Lewis’s experience in the pharmaceutical industry, particularly in drug development and commercial planning for specialty biopharmaceuticals, enable her to make valuable contributions to the Board of Directors. Daniel O’Connor has served as a member of the Board of Directors since February 2025. Mr. O’Connor previously served as President and Chief Executive Officer and a member of the board of directors of Ambrx Biopharma Inc. (Nasdaq: AMAM), a clinical-stage biotechnology company, from November 2022 through its acquisition by Johnson & Johnson in March 2024. From June 2021 to December 2022, Mr. O’Connor served as Chief Executive Officer and Chairman of the Board of Larkspur Health Acquisition Corp., a special purpose acquisition company which merged with and is now known as ZyVersa Therapeutics, Inc. (Nasdaq: ZVSA). Mr. O’Connor continued to serve on the board of directors of ZyVersa until May 2023. From September 2017 to June 2021, Mr. O’Connor served as President and Chief Executive Officer and a member of the board of directors of OncoSec Medical Incorporated, a cancer immunotherapy company. Prior to OncoSec, Mr. O’Connor served as President and Chief Executive Officer and a member of the board of directors of Advaxis, Inc., a cancer immunotherapy company, from January 2013 until July 2017. Prior to Advaxis, Mr. O’Connor held several positions in senior leadership, including Senior Vice President and General Counsel for Bracco Diagnostics Inc., a diagnostic imaging company; Assistant General Counsel, Chief Compliance Officer and Consultant for NPS Pharmaceuticals, Inc., a pharmaceutical company; Senior Vice President, General Counsel and Secretary for ImClone Systems Incorporated, a biopharmaceutical company; and General Counsel at PharmaNet (formerly inVentiv Health, now Syneos Health), a clinical research company. He previously served as a member of the board of directors of Seelos Therapeutics Inc. from January 2019 to May 2024 and as Vice Chairman and member of the board of trustees of BioNJ from March 2016 to November 2021. In October 2017, Mr. O’Connor was appointed to the New Jersey Biotechnology Task Force by its Governor. Prior to his career in biotechnology and drug development, Mr. O’Connor was a former criminal prosecutor in Somerset County, New Jersey. Mr. O’Connor holds a Juris Doctor degree from the Pennsylvania State University’s Dickinson School of Law and previously served as a Trusted Advisor to its Dean. He graduated from the United States Marines Corps Officer Candidate School and was commissioned as an officer in the U.S. Marines, attaining the rank of Captain. Mr. O’Connor volunteered to serve and was deployed to Saudi Arabia in advance of and during Operation Desert Shield. We believe that the breadth and depth of Mr. O’Connor’s experience in the biopharmaceutical industry and his recent experience as Chief Executive Officer of several biotech companies, as well as other positions in senior management, enable him to make valuable contributions to the Board of Directors.
Additional Information about Board Nominees
Charles Semba, M.D. has served as a member of the Board of Directors since July 2021. Dr. Semba has over 20 years of drug-development experience in public and venture-funded biotechnology companies. Since June 2020, Dr. Semba has served as the Chief Medical Officer of Eluminex Biosciences, an ophthalmology-focused biotechnology company. From June 2016 to March 2020, Dr. Semba served as the Chief Medical Officer of Graybug Vision, Inc., a clinical-stage biopharmaceutical company focused on developing transformative medicines for the treatment of chronic diseases of the retina and optic nerve, and from June 2014 to June 2016, Dr. Semba served as the Chief Medical Officer of ForSight VISION5 (acquired by Allergan), a company focused on developing non-invasive products that replace eye drops and provide sustained therapy for major eye diseases, including glaucoma, dry eye, and allergy. Prior to his work at ForSight VISION5, Dr. Semba held senior positions at biopharmaceutical companies including Genentech (a Roche company) and Shire (acquired by Takeda). Additionally, since 1992, Dr. Semba has served as an adjunct professor of vascular and interventional radiology at the Stanford University School of Medicine. Dr. Semba holds a Bachelor of Arts in Chemistry from Carleton College and an M.D. from the University of Minnesota Medical School and is a recognized expert in endovascular therapy, thrombolysis, mechanical thrombectomy, and endovascular surgery. Dr. Semba is currently a resident of California, USA. We believe that Dr. Semba’s experience in the biotechnology and biopharmaceutical industries, particularly in drug development and clinical-stage companies, enable him to make valuable contributions to the Board of Directors.
Why You Should Vote in Favor of our Say-on-Pay Vote
| What We Do: | What We Don’t Do: | | ● Emphasize pay for performance | ● No guaranteed salary increases or bonuses | | ● Structure our executive compensation so a significant portion of pay is at risk | ● No repricing of stock options unless approved by shareholders | | ● Maintain competitive pay packages | ● No liberal share counting under our equity plan | | ● Structure our executive compensation so a significant portion is paid in equity | ● No hedging or pledging of DiaMedica securities | | ● Maintain a clawback policy | ● No perquisites |
Board Leadership Structure
Board Leadership Structure Under our Corporate Governance Guidelines, the Board of Directors may select from its members a Chairman of the Board. The office of Chairman of the Board and the office of President and Chief Executive Officer may be held by one person. The Board of Directors believes it is best not to have a fixed policy on this issue and that it should be free to make this determination based on what it believes is best in light of current circumstances. The Board of Directors, acting as a group or through the Nominating and Corporate Governance Committee, will periodically review the leadership structure of the Board of Directors to assess whether it is appropriate given the specific characteristics and circumstances of DiaMedica. However, the Board of Directors does strongly endorse the concept of independent directors being in a position of leadership. If at any time, the Chief Executive Officer and Chairman of the Board are the same, the Board of Directors shall elect an independent director to serve as the lead director. The lead director will have the following duties and responsibilities in addition to such other duties and responsibilities as may be determined by the Board of Directors from time to time.
Board Leadership Structure
| ● | chairing the executive sessions of the independent directors and calling meetings of the independent directors; |
Board Leadership Structure
| ● | determining the agenda for the executive sessions of the independent directors and participating with the Chairman of the Board in establishing the agenda for Board meetings; |
Board Leadership Structure
| ● | coordinating feedback among the independent directors and the Chief Executive Officer; |
Board Leadership Structure
| ● | overseeing the development of appropriate responses to communications from shareholders and other interested persons addressed to the independent directors as a group; |
Board Leadership Structure
| ● | on behalf of the independent directors, retaining legal counsel or other advisors as they deem appropriate in the conduct of their duties and responsibilities; and |
Board Leadership Structure
| ● | performing such other duties as the Board of Directors deems appropriate from time to time. |
Board Leadership Structure
Mr. Parsons currently serves as Chairman of the Board and Rick Pauls currently serves as President and Chief Executive Officer. We currently believe this leadership structure of an independent Chairman of the Board is in the best interests of DiaMedica and our shareholders and strikes the appropriate balance between the President and Chief Executive Officer’s responsibility for the strategic direction, day-to-day leadership and performance of our Company and the Chairman of our Board’s responsibility to guide overall strategic direction of our Company and provide oversight of our corporate governance and guidance to our President and Chief Executive Officer and to set the agenda for and preside over Board meetings. We recognize that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. We believe that our Company is well served by this leadership structure. We anticipate that the Board of Directors will periodically review our leadership structure and may make such changes in the future as it deems appropriate.
Compensation Committee
| ● | recommending and leading a process for the determination of non-employee director compensation. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Non-Employee Director Compensation Program
Non-Employee Director Compensation Program Overview. Our non-employee directors currently consist of Michael Giuffre, M.D., Richard Kuntz, M.D., M.Sc., Tanya Lewis, Daniel O’Connor, James Parsons, Richard Pilnik, and Charles Semba, M.D. We use a combination of cash and long-term equity-based incentive compensation in the form of annual stock option grants and either deferred stock units or restricted stock units in lieu of cash retainers to attract and retain qualified candidates to serve on the Board of Directors. In setting non-employee director compensation, we follow the process and procedures described under “Corporate Governance—Compensation Committee—Processes and Procedures for the Determination of Director Compensation.” On May 22, 2024, the Board approved, upon recommendation of the Compensation Committee, the following changes to our Non-Employee Director Compensation Program:
Non-Employee Director Compensation Program
| ● | A $4,000 annual cash retainer for members of the new Scientific and Clinical Research Committee and an $8,000 annual cash retainer for the Chair of the Scientific and Clinical Research Committee; |
Non-Employee Director Compensation Program
| ● | An increase in the annual equity award for non-employee directors from 0.06% to 0.075% of our outstanding common shares; and |
Non-Employee Director Compensation Program
| ● | An increase in the initial equity award for new non-employee directors from 0.12% to 0.15% of our outstanding common shares. |
Non-Employee Director Compensation Program
In recommending these changes, the Compensation Committee consulted with its independent compensation consultant, Alpine Rewards, LLC, and reviewed a competitive analysis prepared by Alpine Rewards that used the same peer group as used in reviewing our executive compensation program. Cash Retainers. The following table sets forth the annual cash retainers paid to our non-employee directors during fiscal 2024:
Non-Employee Director Compensation Program
| Description | Annual Cash Retainer | | Board Member | $40,000 | | Chairman of the Board | 30,000 | | Audit Committee Chair | 15,000 | | Audit Committee Member (Excluding Chair) | 7,500 | | Compensation Committee Chair | 10,000 | | Compensation Committee Member (Excluding Chair) | 5,000 | | Nominating and Corporate Governance Committee Chair | 8,000 | | Nominating and Corporate Governance Committee Member (Excluding Chair) | 4,000 | | Scientific and Clinical Research Committee Chair | 8,000 | | Scientific and Clinical Research Committee Member (Excluding Chair) | 4,000 |
Non-Employee Director Compensation Program
Annual Stock Options. Under the Non-Employee Director Compensation Program, each non-employee director each year is granted a stock option to purchase a number of common shares equal to 0.075% of our outstanding shares and the Chairman of the Board is granted an additional stock option to purchase a number of common shares equal to 0.02% of our outstanding shares, in each case rounding down to the nearest whole share. These annual stock options are granted effective as of June 1st each year. All of these stock options have a term of 10 years, a per share exercise price equal to 100% of the fair market value of a common share on the date of grant, and vest and become exercisable in four as nearly equal as possible quarterly installments over one year, and in each case so long as the non-employee director is a director of DiaMedica as of such date. Accordingly, on June 1, 2024, each of our then non-employee directors received an option to purchase 28,472 common shares at an exercise price equal to $2.90 per share and Mr. Pilnik as our then Chairman of the Board received an additional 7,593 common shares at an exercise price equal to $2.90 per share. These options expire on May 31, 2034. Our Non-Employee Director Compensation Program also provides that each new non-employee director will be granted a stock option to purchase a number of common shares equal to 0.15% of our outstanding shares, rounding down to the nearest whole share, effective as of the new director’s first day as a director. This initial equity award is in lieu of an annual equity award for the first year of service. This initial stock option has a term of 10 years, a per share exercise price equal to 100% of the fair market value of a common share on the date of grant and vests and becomes exercisable in 12 as nearly equal as possible quarterly installments over three years, and in each case so long as the non-employee director is a director of DiaMedica as of such date. Deferred Stock Units or Restricted Stock Units in Lieu of Annual Cash Retainers. We provide our non-employee directors the opportunity to elect to receive DSUs or RSUs in lieu of up to 100% of their annual cash retainers payable for services to be rendered as a non-employee director, chairman and chair or member of any board committee. Effective as of the first trading day of each year, each non-employee director who elected to receive DSUs or RSUs in lieu of all or a portion of such director’s annual cash retainers is be granted a DSU or RSU award under the 2019 Plan or any other shareholder-approved plan covering that number of shares as determined based on the following formula (rounding down to the nearest whole share):
Non-Employee Director Compensation Program
| ● | the aggregate dollar amount of the elected portion of the annual cash retainers that otherwise would have been payable to the non-employee director for services to be rendered as a non-employee director, Chairman of the Board and Chair or member of any Board committee during the year (or transition or other period, if applicable) based on such director’s Board committee memberships and Chair positions as of the date of grant, divided by |
Non-Employee Director Compensation Program
| ● | the 10-trading day average closing sale price of our common shares, as reported by The Nasdaq Capital Market, and as determined on the third (3rd) trading day prior to the anticipated grant date of the award. |
Non-Employee Director Compensation Program
Such DSU and RSU awards vest in four as nearly equal as possible quarterly installments, on March 31, June 30, September 30 and December 31, (or prorated from the first date as a director in the case of new directors) in each case so long as the non-employee director is a director of DiaMedica as of such date. DSU awards are settled following a separation from service by such director and RSU awards are settled immediately upon vesting or, if earlier, the death of the director. If a non-employee director who elected to receive a DSU or RSU award in lieu of all or a portion of such director’s annual cash retainers is no longer a director of DiaMedica before such director’s interest in all of the shares underlying the DSU or RSU award have vested, the director will forfeit his or her rights to receive all of such unvested shares on the day his or her status as a director of DiaMedica terminates. However, shares underlying the DSU or RSU award corresponding to the elected cash retainers for such quarter in which the director’s status changed will vest ratably for such quarter based on the number of days of service as a director of DiaMedica during such quarter. If a non-employee director of DiaMedica who elected to receive a DSU or RSU award in lieu of his or her annual cash retainers becomes entitled to receive an increased or additional annual cash retainer during the year, the director will receive such increased or additional annual cash retainer in cash until the director makes his or her election for the following year. Conversely, if a non-employee director of DiaMedica who elected to receive a DSU or RSU award in lieu of such director’s annual cash retainers experiences a change in committee membership or Chair positions during the year, such that the aggregate amount of annual cash retainers for the year to which the director is entitled is less than the aggregate amount used to calculate the director’s most recent DSU or RSU award, the director will forfeit effective as of such change his or her rights to receive the corresponding portion of the shares underlying such DSU or RSU award; provided, however, that in the event the director elected to receive only a portion of his or her cash retainers in the form of a DSU or RSU award, the amount of cash retainers to be received will be reduced first. In addition, in the event shares underlying the DSU or RSU award are forfeited, the vesting of the DSU or RSU award will be revised accordingly as of the date of such change.
Director Compensation Table
Director Compensation Table The table below provides summary information concerning the compensation of each individual who served as a director of DiaMedica during the fiscal year ended December 31, 2024, other than Rick Pauls, our President and Chief Executive Officer, who was not compensated separately for serving on the Board of Directors during fiscal 2024. His compensation for serving as an executive officer is set forth under “Executive Compensation—Summary Compensation Table.”
Director Compensation Table
| Name | Fees Earned or Paid in Cash(1) | Option Awards(2)(3) | Stock Awards(4)(5) | All Other Compensation(6) | Total | | Michael Giuffre, M.D. | $56,190 | $59,210 | $575 | — | $115,975 | | Richard Kuntz, M.D. | 45,516 | 59,210 | 427 | — | 105,153 | | Tanya Lewis | 47,758 | 59,210 | — | — | 106,968 | | James Parsons | 60,000 | 59,210 | 641 | — | 119,851 | | Richard Pilnik | 85,500 | 75,001 | 910 | — | 161,411 | | Charles Semba, M.D. | 55,258 | 59,210 | 281 | — | 114,749 |
Director Compensation Table
| (1) The following directors elected to receive DSUs or RSUs in exchange for all or part of their cash retainers: Dr. Giuffre ($53,750 was paid in the form of 19,196 DSUs); Dr. Kuntz ($40,000 was paid in the form of 14,285 RSUs); Mr. Parsons ($60,000 was paid in the form of 21,428 DSUs); Mr. Pilnik ($85,000 was paid in the form of 30,357 DSUs); and Dr. Semba ($26,250 was paid in the form of 9,375 RSUs). |
Director Compensation Table
| (2) Amounts reflect the grant date fair value for option awards granted to each non-employee director computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. |
Director Compensation Table
| (3) The following current directors held the following option awards as of December 31, 2024: Dr. Giuffre (28,472 options); Dr. Kuntz (28,472 options); Ms. Lewis (28,472 options); Mr. Parsons (28,472 options); Mr. Pilnik (36,065 options); and Dr. Semba (28,472 options). |
Director Compensation Table
| (4) Represents the difference between the grant date fair value of the DSUs or RSUs received by the director, using the grant date fair value of $2.83 per underlying share, and the dollar amount of retainers elected to be received in DSUs or RSUs, calculated using the average stock price of $2.80 per share as determined under the terms of our non-employee director compensation plan. |
Director Compensation Table
| (5) The following current directors held the following stock awards (all in the form of DSUs) as of December 31, 2024: Dr. Giuffre (DSU - 88,301); Dr. Kuntz (0); Ms. Lewis (0); Mr. Parsons (57,687); Mr. Pilnik (137,149) and Dr. Semba (0). |
Director Compensation Table
| (6) We do not provide perquisite and other personal benefits to our non-employee directors. |
Use of Market Data
Use of Market Data We strive to compensate our executive officers competitively relative to other companies that are similar to us in market capitalization, revenue, number of employees and stage of clinical development. To ensure reasonableness and competitiveness of our executive compensation packages relative to our peer companies, the Compensation Committee evaluates our peer group with the aid of our independent compensation consultant and with input from management. The peer group used to help determine 2024 compensation was approved by the Compensation Committee in December 2023 and includes the following 18 companies:
Use of Market Data
| Annovis Bio, Inc. | Applied Therapeutics, Inc. | Athira Pharma, Inc. | | BioVie Inc. | Clene Inc. | Fulcrum Therapeutics, Inc. | | Galectin Therapeutics Inc. | GlycoMimetics, Inc. | Immunic, Inc. | | Kezar Life Sciences, Inc. | Longboard Pharmaceuticals, Inc. | Matinas BioPharma Holdings, Inc. | | MediciNova, Inc. | Ovid Therapeutics Inc. | Soleno Therapeutics, Inc. | | Spruce BioSciences, Inc. | Vigil Neuroscience, Inc. | Zynerba Pharmaceuticals, Inc. |
Use of Market Data
Data from this peer group, therefore, was considered in the compensation benchmarking process as one input in helping us determine appropriate pay levels for our executives.
Elements of Our Executive Compensation Program
| Element | Key Characteristics | Purpose | Key 2024 Changes | | Base Salary (Fixed, Cash) | A fixed amount, paid in cash periodically throughout the year and reviewed annually and, if appropriate, adjusted. | Provides a source of fixed income that is market competitive and reflects scope and responsibility of the position held. | Our CEO received a base salary increase of 5% and our CFO received a base salary increase of 6%. Our CMO joined DiaMedica in January 2024 and her base salary was set at $425,000. | | Short-Term Incentive (STI) (Variable, Cash) | A variable, short-term element of compensation that is payable in cash based on achievement of key pre-established annual corporate objectives, and for certain executives, individual goals. | Motivates and rewards our executives for achievement of annual corporate and other objectives. | The target incentive percentage under our short-term incentive plan for 2024 was 50% of base salary for our CEO and 40% of base salary for our CFO, which were unchanged from last year. The target incentive percentage for our new CMO was set at 40% of base salary. | | Long-Term Incentives (LTI) (Variable, Equity-Based Awards) | A variable, long-term element of compensation that is provided in the form of time-vested stock option awards. | Aligns the interests of our executives with our shareholders; encourages our executives to focus on our long-term performance; promotes retention; and encourages significant share ownership. | Our NEOs received stock option awards, with 25% vesting on the one-year anniversary of the grant date and the remaining 75% vesting in 12 equal quarterly installments thereafter. The awards for our CEO and CFO were annual awards; whereas, the award for our CMO was a new hire award. | | Retirement Benefits | A defined contribution retirement plan with a discretionary company match. | Provides an opportunity for employees to save and prepare financially for retirement. | No changes. |
Elements of Our Executive Compensation Program
We describe each key element of our executive compensation program in more detail in the following pages, along with the compensation decisions made in 2024. The compensation paid to our named executive officers is governed, in part, by written employment agreements with them, which are described below under “—Employment Agreements.” The named executive officers also have termination and change in control benefits as set forth in their respective employment agreements. See “—Post-Termination Severance and Change in Control Arrangements.”
Annual Short-Term Incentive Compensation
Annual Short-Term Incentive Compensation In addition to base compensation, we provide our named executive officers the opportunity to earn short-term incentive (STI) compensation based on the achievement of certain annual corporate and individual performance goals. Our STI program directly aligns the interests of our executive officers and shareholders by providing an incentive for the achievement of key corporate and individual performance objectives that are critical to the success of our Company and linking a significant portion of each executive’s annual compensation to the achievement of such objectives. Under the 2024 STI program, each named executive officer had a target incentive percentage that was a percentage of their base salary.
Annual Short-Term Incentive Compensation
| Name | Percentage of Base Salary | | Rick Pauls | 50% | | Lorianne Masuoka, M.D. | 40% | | Scott Kellen | 40% |
Annual Short-Term Incentive Compensation
2024 STI payouts were based primarily on corporate objectives, which had a 75% weighting, and to a lesser extent, individual objectives, which had a 25% weighting. The corporate objectives related to our ReMEDy2 trial, manufacturing, and raising additional capital, and were determined by the Compensation Committee to have been achieved at 76.4% of target. The individual objectives varied by executive and related to our ReMEDy2 trial, manufacturing, developing people and organization, evidence development for our product candidate DM199, accounting and financial reporting, and partnering activities. The individual objectives were determined by the Compensation Committee to have been achieved at 100% of target for our CEO, 40% of target for our CMO and 80% of target for our CFO. The following sets forth each executive’s target bonus opportunity and actual STI payout for 2024:
Annual Short-Term Incentive Compensation
| Officer Name and Position | 2024 Base Salary | Target Incentive Percentage of Base Salary | Target Bonus Opportunity(1) | 2024 Actual Payout(1) | | Rick Pauls | $600,000 | 50% | $300,000 | $306,975 | | Lorianne Masuoka, M.D. | 425,000 | 40% | 161,309 | 116,667 | | Scott Kellen | 380,000 | 40% | 152,000 | 147,934 |
Annual Short-Term Incentive Compensation
| (1) Dr. Masuoka’s 2024 target bonus opportunity and actual payout were prorated for her January 22, 2024 start date. |
Annual Short-Term Incentive Compensation
2024 actual payouts reflected the following discretionary upward adjustments for the following NEOs to recognize their significant efforts in advancing the Company’s preeclampsia program and the recent protocol amendment to the ReMEDy2 trial: Mr. Pauls – 20% or $60,000 adjustment, resulting in an actual bonus of 102.3% of target; Dr. Masuoka – 5% or $8,066 adjustment, resulting in an actual bonus of 72.3% of target; and Mr. Kellen – 20% or $30,400 adjustment, resulting in an actual bonus of 97.3% of target.
Long-Term Equity-Based Incentive Compensation
Long-Term Equity-Based Incentive Compensation The long-term equity-based incentive compensation component consists of stock options granted under the DiaMedica Therapeutics Inc. Amended and Restated 2019 Omnibus Incentive Plan, and sometimes, in the case of Dr. Masuoka’s new hire grant, under the DiaMedica Therapeutics Inc. 2021 Employment Inducement Incentive Plan. Long-term equity-based incentives are intended to comprise a significant portion of each executive’s compensation package, consistent with our executive compensation objective to align the interests of our executives with the interests of our shareholders. The Compensation Committee believes that stock options effectively incentivize executives to maximize Company performance over the long-term, as the value of awards is directly tied to an appreciation in the value of our common shares. Stock options also provide an effective retention mechanism because of vesting provisions. An important objective of our long-term equity-based incentive program is to strengthen the relationship between the long-term value of our common shares and the potential financial gain for our executives. Stock options provide recipients with the opportunity to purchase our common shares at a price fixed on the grant date regardless of future market price. Because stock options become valuable only if the share price increases above the exercise price and the option holder remains employed during the period required for the option to vest, they provide an incentive for an executive to remain employed. In addition, stock options link a portion of an executive’s compensation to the interests of our shareholders by providing an incentive to achieve corporate goals and increase the market price of our common shares over time. The table below sets forth the stock options that we granted to our named executive officers in 2024, which options vest with respect to 25% of the underlying common shares on the one-year anniversary of the grant date, and with respect to the remaining 75% of the underlying common shares in 12 as nearly equal as possible quarterly installments commencing after the one-year anniversary of the grant date:
Long-Term Equity-Based Incentive Compensation
| Name | Grant Date | Grant Date Fair Value | Number of Shares Underlying Options | Exercise Price | | Rick Pauls | 06/01/24 | $633,510 | 300,000 | $2.90 | | Lorianne Masuoka, M.D. | 01/22/24 | 637,260 | 285,000 | 2.79 | | Scott Kellen | 06/01/24 | 274,521 | 130,000 | 2.90 |
Long-Term Equity-Based Incentive Compensation
The number of stock options granted to our executives was determined based on a percent of outstanding Company common shares analysis as opposed to a value analysis. Dr. Masuoka’s option grant was a new hire grant which typically represents a greater number of shares than an individual’s annual equity award. Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We maintain an equity grant policy. With respect to the timing equity awards, it is our policy to grant annual equity awards with a grant date of June 1st of each year and to grant new hire awards effective as of the 15th day of the month after the later of: the new hire employee’s first date of employment or the approval of the award by the Compensation Committee. Under our equity grant policy, an employee who received a new hire equity award within three months prior to our fiscal year end (December 31) (received a new equity award on or after October 1st) will not be eligible for an annual equity award during the following fiscal year and an employee who received a new hire equity award more than three months prior to our fiscal year end (received a new equity award prior to October 1st but on or after January 1st of that same year) will be eligible for a prorated annual equity award during the following fiscal year based on the employee’s hire date and our fiscal year end date. Our equity grant policy also provides that to the extent practicable, the Compensation Committee will not grant stock options or other equity-based incentive awards in the period beginning four business days before the filing of a periodic report on Form 10-Q or Form 10-K or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information (other than a current report on Form 8-K disclosing a material new option award grant under Item 5.02(e) of that form), and ending one business day after the filing or furnishing of such report, and will instead grant the stock options or other equity-based awards on the second business day after the filing or furnishing of such report.
Employment Agreements
Employment Agreements We typically enter into employment agreements with our executive officers, which provide for an annual base salary, subject to periodic reviews, incentive based compensation, equity-based compensation and benefits, in each case as determined by the Board of Directors (or a committee thereof) from time to time. The agreements contain standard confidentiality, non-competition, non-solicitation and assignment of intellectual property provisions. The agreements also contain standard severance and change in control provisions which are described under “—Post-Termination Severance and Change in Control Arrangements.”
Post Termination Severance and Change in Control Arrangements
Post Termination Severance and Change in Control Arrangements Severance Arrangements. Under the terms of the employment agreements with our executive officers, if we terminate the executive’s employment without “cause”, the executive will be entitled to: (i) salary continuation payments for 12 months in the case of Mr. Pauls and nine months in the case of each of the other executives, (ii) Consolidated Omnibus Budget Reconciliation Act (COBRA) premium reimbursement during the salary continuation period, (iii) a pro rata portion of the executive’s target annual bonus for the year of termination, and (iv) immediate acceleration of all or a portion of the executive’s equity awards. These severance benefits are subject to the executive executing a separation agreement and release of claims. “Cause” is defined in the employment agreements as: (i) gross negligence or willful failure to perform the executive’s duties and responsibilities to DiaMedica; (ii) commission of any act of fraud, theft, embezzlement, financial dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to DiaMedica; (iii) conviction of, or pleading guilty or nolo contendere to, any felony or a lesser crime involving dishonesty or moral turpitude; (iv) material breach by the executive of any of their obligations under the agreement or any written agreement or covenant with DiaMedica, including the policies adopted from time to time by DiaMedica applicable to all executives, that has not been cured within 30 days of notice of such breach; or (v) we terminate the employment of the executive in connection with a liquidation, dissolution or winding down of DiaMedica. We believe that the form and amount of these severance benefits are fair and reasonable to both DiaMedica and our executives. The Compensation Committee reviews our severance arrangements periodically to ensure that they remain necessary and appropriate. Change in Control Arrangements. To encourage continuity, stability and retention when considering the potential disruptive impact of an actual or potential corporate transaction, we have established change in control arrangements, including provisions in the 2019 Plan and executive employment agreements. These arrangements are designed to incentivize our executives to remain with our Company in the event of a change in control or potential change in control. Under the terms of the 2019 Plan, subject to the terms of the applicable award agreement or an individual agreement between DiaMedica and a participant, upon a change in control, the Board of Directors may, in its discretion, determine whether some or all outstanding options and stock appreciation rights shall become exercisable in full or in part, whether the restriction period and performance period applicable to some or all outstanding restricted stock awards and restricted stock unit awards shall lapse in full or in part and whether the performance measures applicable to some or all outstanding awards shall be deemed to be satisfied. The Board of Directors may further require that shares of stock of the corporation resulting from such a change in control, or a parent corporation thereof, be substituted for some or all of our common shares subject to an outstanding award and that any outstanding awards, in whole or in part, be surrendered to us by the holder, to be immediately cancelled by us, in exchange for a cash payment, shares of capital stock of the corporation resulting from or succeeding us or a combination of both cash and such shares of stock. Under the terms of the employment agreements, if we terminate the executive’s employment without “cause” or the executive terminates their employment with “good reason” in connection with or within 12 months after a “change in control,” the executive will be entitled to: (i) salary continuation payments for 18 months in the case of Mr. Pauls and 12 months in the case of each of the other executives, (ii) COBRA premium reimbursement during the salary continuation period, (iii) a pro rata portion of their target annual bonus for the year of termination, and (iv) immediate acceleration of all or a portion of their equity awards. These severance benefits are subject to the executive executing a separation agreement and release of claims. “Good reason” is defined in the employment agreements as the executive’s resignation within 30 days following the expiration of any cure period following the occurrence of one or more of the following, without the executive’s express written consent: (i) a material reduction of the executive’s duties, authority, reporting level, or responsibilities, relative to their duties, authority, reporting level, or responsibilities in effect immediately prior to such change in control; (ii) a material reduction in the executive’s base compensation; or (iii) DiaMedica’s requiring of the executive to change the principal location at which the executive is to perform services by more than 50 miles. “Change in control” is defined in the employment agreements as the occurrence of any of the following: (i) the acquisition, other than from us, by any individual, entity or group of beneficial ownership of 50% or more of either our then outstanding common shares or the combined voting power of our then outstanding voting securities entitled to vote generally in the election of directors; (ii) the consummation of a reorganization, merger or consolidation of DiaMedica, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of our common shares and voting securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, of then outstanding common shares and the combined voting power of then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or (iii) the sale or other disposition of all or substantially all of our assets. We believe these change in control arrangements are an important part of our executive compensation program in part because they mitigate some of the risk for executives working in a smaller company where there is a meaningful risk that DiaMedica may be acquired. Change in control benefits are intended to attract and retain qualified executives who, absent these arrangements and in anticipation of a possible change in control of our Company, might consider seeking employment alternatives to be less risky than remaining with our Company through the transaction. We believe that the form and amount of these change in control benefits are fair and reasonable to both our Company and our executives. The Compensation Committee periodically reviews our change in control arrangements to ensure that they remain necessary and appropriate.
Summary Compensation Table
Summary Compensation Table The table below provides summary information concerning all compensation awarded to, earned by or paid to our named executive officers during our 2024 and 2023 fiscal years. Mr. Pauls is also a director of DiaMedica but did not receive any compensation related to his role as a director.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus(1) | Option Awards(2) | Non- Equity Incentive Plan Compen- sation(3) | All Other Compen- sation(4) | Total | | Rick Pauls | 2024 | $593,250 | $— | $633,510 | $306,975 | $17,250 | $1,550,985 | | President and Chief Executive Officer | 2023 | 562,000 | — | 396,553 | 239,958 | 16,650 | 1,215,161 | | Lorianne Masuoka, M.D.(5) | 2024 | 403,277 | — | 637,260 | 116,667 | 17,106 | 1,174,310 | | Chief Medical Officer | | | | | | | | | Scott Kellen | 2024 | 374,250 | — | 274,521 | 147,934 | 17,250 | 813,955 | | Chief Financial Officer and Secretary | 2023 | 352,750 | — | 146,790 | 116,025 | 16,650 | 632,215 |
Summary Compensation Table
| (1) We generally do not pay discretionary bonuses. Our annual cash bonuses which are typically based on performance and measured against pre-established performance goals are reported in the “Non-Equity Incentive Plan Compensation” column. |
Summary Compensation Table
| (2) Amounts reflect the full grant-date fair value of stock options granted during the applicable year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. The grant date fair value is determined based on the Black-Scholes option pricing model. The table below sets forth the specific assumptions used in the valuation of each such option award: |
Summary Compensation Table
| Grant Date | Grant Date Fair Value Per Share | Risk Free Interest Rate | Expected Life | Expected Volatility | Expected Dividend Yield | | 06/01/2024 | $2.11 | 4.00% | 5.7 years | 102.5% | — | | 01/22/2024 | $2.24 | 4.50% | 5.5 years | 87.1% | — | | 06/01/2023 | $1.94 | 2.93% | 5.6 years | 102.9% | — |
Summary Compensation Table
There can be no assurance that unvested awards will vest and, absent vesting and exercise, no value will be realized by the executive for the award.
Summary Compensation Table
| (3) Amounts reported represent awards earned for that year under our annual short-term incentive plan but paid during the following year. See “—Executive Compensation Overview—Annual Short-Term Incentive Compensation.” |
Summary Compensation Table
| (4) The amounts shown in the “All Other Compensation” column for fiscal 2024 include the following with respect to each named executive officer: |
Summary Compensation Table
| Name | 401(k) Match | Health Savings Account Contribution | Total | | Rick Pauls | $13,800 | $3,450 | $17,250 | | Lorianne Masuoka, M.D. | 13,800 | 3,306 | 17,106 | | Scott Kellen | 13,800 | 3,450 | 17,250 |
Summary Compensation Table
| (5) Ms. Masuoka was appointed as our Chief Medical Officer effective January 22, 2024. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table presents for each named executive officer information regarding outstanding equity awards held as of December 31, 2024.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards(1) | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested(3) (#) | Market Value of Shares or Units of Stock That Have Not Vested(4) ($) | | Rick Pauls | | | | | | | | Stock Options | 67,500 | — | (CAD$) 3.00 | 12/01/2025 | | | | | 42,500 | — | (CAD$) 5.20 | 11/28/2026 | | | | | 42,500 | — | (CAD$) 6.40 | 06/19/2027 | | | | | 33,500 | — | (CAD$) 11.20 | 04/17/2028 | | | | | 264,000 | — | (US$) 4.60 | 06/23/2029 | | | | | 56,000 | — | (US$) 4.64 | 05/31/2030 | | | | | 142,188 | 32,813 | (US$) 5.00 | 07/27/2031 | | | | | 110,625 | 66,375 | (US$) 2.45 | 05/31/2032 | | | | | 67,875 | 113,125 | (US$) 2.73 | 05/31/2033 | | | | | — | 300,000 | (US$) 2.90 | 05/31/2034 | | | | DSUs | | | | | 1,749 | (US$) 9,497 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards(1) | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested(3) (#) | Market Value of Shares or Units of Stock That Have Not Vested(4) ($) | | Lorianne Masuoka, M.D. | | | | | | | | Stock Options | — | 285,000 | (US$) 2.79 | 01/21/2034 | | | | Scott Kellen | | | | | | | | Stock Options | 50,250 | — | (CAD$) 11.20 | 04/17/2028 | | | | | 99,750 | — | (US$) 4.60 | 06/23/2029 | | | | | 35,000 | — | (US$) 4.64 | 05/31/2030 | | | | | 48,750 | 11,250 | (US$) 5.00 | 07/27/2031 | | | | | 37,500 | 22,500 | (US$) 2.45 | 05/31/2032 | | | | | 25,125 | 41,875 | (US$) 2.73 | 05/31/2033 | | | | | — | 130,000 | (US$) 2.90 | 05/31/2034 | | |
Outstanding Equity Awards at Fiscal Year-End
| (1) The stock options that remained unvested as of December 31, 2024 generally vest monthly or quarterly and may be accelerated under certain circumstances, including if the recipient’s employment or service relationship with our Company is involuntarily terminated. |
Outstanding Equity Awards at Fiscal Year-End
| (2) All stock options have a 10-year term but may terminate earlier if the recipient’s employment or service relationship with our Company terminates. |
Outstanding Equity Awards at Fiscal Year-End
| (3) All DSU awards are settled after the holder’s employment or service relationship with our Company terminates. |
Outstanding Equity Awards at Fiscal Year-End
| (4) The market value of DSU awards that have not been settled as of December 31, 2024 is based on the closing sale price of our common shares as reported by The Nasdaq Capital Market on December 31, 2024 ($5.43). |
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our named executive officers, within the meaning of such rules, and certain financial performance measures of our Company. The table below provides information regarding compensation actually paid to our CEO who is our principal executive officer (PEO), and the average compensation actually paid to our other non-PEO named executive officers, during each of the past three fiscal years, as well as total shareholder return and net income (loss) for each of the past three fiscal years.
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(4) | Average Compensation actually Paid to Non-PEO NEOs(5)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(7) | Net Income (Loss)(8) | | 2024 | $1,550,985 | $2,441,991 | $994,133 | $1,381,183 | $342 | $(24,381) | | 2023 | 1,215,161 | 1,424,344 | 587,222 | 707,892 | 74 | (19,381) | | 2022 | 1,080,607 | 534,244 | 784,132 | 507,196 | 41 | (13,676) |
Pay Versus Performance Disclosure
| (1) Amounts reported represent the Summary Compensation Table total for our CEO for each of the years presented. See “Executive Compensation – Summary Compensation Table.” |
Pay Versus Performance Disclosure
| (2) Amounts reported represent “compensation actually paid” to our CEO for each of the years presented. The dollar amounts in this column do not reflect the actual amount of compensation earned by or paid to our CEO during the applicable year. |
Pay Versus Performance Disclosure
| (3) Compensation actually paid to our PEO consists of the following amounts deducted from or added to the Summary Compensation Table total for our CEO for each of the years presented: |
Pay Versus Performance Disclosure
| | Rick Pauls | | Summary Compensation Table Total for 2024 | $1,550,985 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (633,510) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 1,113,890 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 379,163 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 31,462 | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2024 | 2,441,990 | | Summary Compensation Table Total for 2023 | $1,215,161 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (396,553) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 387,114 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 139,587 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 79,035 | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2023 | 1,424,344 | | Summary Compensation Table Total for 2022 | $1,080,607 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (343,819) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 147,914 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | (266,518) | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | (83,940) | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2022 | 534,244 |
Pay Versus Performance Disclosure
| (a) Represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |
Pay Versus Performance Disclosure
| (b) Represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. |
Pay Versus Performance Disclosure
| (c) Represents the year-end value of equity awards granted during the applicable year that are outstanding and unvested as of the end of such applicable year. |
Pay Versus Performance Disclosure
| (d) Represents the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year. |
Pay Versus Performance Disclosure
| (e) Represents the amount of change as of the vesting date (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that vested during the applicable year. |
Pay Versus Performance Disclosure
Since we do not have a pension plan, all of the foregoing adjustments are equity award adjustments for each applicable year and include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of such applicable year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year; (iii) for equity awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for equity awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for equity awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for such applicable year. Adjustments as provided in clauses (iii) and (vi) are inapplicable for all of the years presented in the table. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The value of option awards is based on the fair value as of the end of the covered year or change in fair value during the covered year, in each case based on the Black-Scholes option pricing model, the assumptions of which are described in Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Pay Versus Performance Disclosure
| (4) Average Summary Compensation Table total for non-PEO named executive officers reflects the average Summary Compensation Table total for Dr. Masuoka and Mr. Kellen for 2024; for Mr. Kellen, Julie Daves and Kirsten Gruis, M.D. for 2023; and for Mr. Kellen and Dr. Gruis for 2022. |
Pay Versus Performance Disclosure
| (5) The amounts in this column represent the average compensation actually paid to the non-PEO named executive officers for each of the years presented. The dollar amounts in this column do not reflect the actual amount of compensation earned by or paid to our non-PEO named executive officers during the applicable year. |
Pay Versus Performance Disclosure
| (6) Average compensation actually paid to our non-PEO named executive officers consists of the following amounts deducted from or added to the Summary Compensation Table total for each of the years presented: |
Pay Versus Performance Disclosure
| Average for Non-PEO Named Executive Officers | | | Summary Compensation Table Total for 2024 | $994,133 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (455,891) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 770,451 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 67,155 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 5,335 | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2024 | 1,381,183 |
Pay Versus Performance Disclosure
| Summary Compensation Table Total for 2023 | $587,222 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (137,296) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 134,028 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 81,901 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 42,037 | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2023 | 707,892 | | Summary Compensation Table Total for 2022 | $784,132 | | Deduct: Stock awards(a) | — | | Deduct: Option awards(b) | (302,169) | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 75,730 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | (36,824) | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | (13,673) | | Add: Value of dividend equivalents accrued on equity awards during the year | — | | Compensation Actually Paid for 2022 | 507,196 |
Pay Versus Performance Disclosure
| (a) Represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |
Pay Versus Performance Disclosure
| (b) Represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. |
Pay Versus Performance Disclosure
| (c) Represents the year-end value of equity awards granted during the applicable year that are outstanding and unvested as of the end of such applicable year. |
Pay Versus Performance Disclosure
| (d) Represents the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year. |
Pay Versus Performance Disclosure
| (e) Represents the amount of change as of the vesting date (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that vested during the applicable year. |
Pay Versus Performance Disclosure
Since we do not have a pension plan, all of the foregoing adjustments are equity award adjustments for each applicable year and include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of such applicable year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year; (iii) for equity awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for equity awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for equity awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for such applicable year. Adjustments as provided in clauses (iii) and (vi) are inapplicable for all of the years presented in the table. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The value of option awards is based on the fair value as of the end of the covered year or change in fair value during the covered year, in each case based on the Black-Scholes option pricing model, the assumptions of which are described in Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Pay Versus Performance Disclosure
| (7) The total shareholder return is calculated by the difference between our common share price at the end of the measurement period by our common share price at the beginning of the measurement period. |
Pay Versus Performance Disclosure
| (8) Amounts reported represent the amount of net loss reflected in our audited consolidated financial statements for the applicable year and is presented in thousands. |
Pay Versus Performance Relationship
Pay Versus Performance Relationship In accordance with Item 402(v) of SEC Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table above. As demonstrated by the following graph, there is a high degree of correlation between the amount of compensation actually paid to our NEOs and our cumulative total shareholder return (TSR) over the three years presented in the table. The alignment of compensation actually paid with our cumulative TSR over the period presented is because a significant portion of the compensation actually paid to our NEOs is comprised of equity awards, the value of which is driven by our share price. The amount of compensation actually paid to our NEOs has increased year-over-year during the last three years despite simultaneous increases in our net loss. This is a result of year-over-year increases in our stock price during the last three years, which increased the compensation actually paid to our NEOs, despite simultaneous increases in our net loss. The information contained in the “Pay Versus Performance Disclosure” section above shall not be deemed to be “soliciting material” or to be “filed” with the SEC, or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.