DEF 14A of InfuSystem Holdings, Inc, Apr 10, 2024

DEF 14A of InfuSystem Holdings, Inc

Filed Apr 10, 2024 · FY20230001628280-24-015635

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will consider and vote upon the election of seven directors. The Board has nominated Ralph Boyd, Richard DiIorio, Kenneth Eichenbaum, Paul Gendron, Beverly Huss, Carrie Lachance, and Scott Shuda for election as directors of the Company. Other than Dr. Eichenbaum and Ms. Huss, each of these nominees for director is a current director of the Company. Mr. R. Rimmy Malhotra's March 2024 resignation from the Board and the departure of Gregg Lehman, also a current director, who is not standing for re-election, have left vacancies that the nominations of Kenneth Eichenbaum and Beverly Huss are intended to fill. Mr. Malhotra's resignation was not the product of any disagreement between himself and the Company. The Company's bylaws provide that the number of authorized directors shall be fixed from time to time by the Board, and the Board approved the reduction in the size of the Board to seven directors at the time of the Company's Annual Meeting in 2023. The seven nominees for election to the Board, if elected, will serve until the 2025 Annual Meeting and until their successors are duly elected and qualified. We urge you to vote "FOR" each of Ralph Boyd, Richard DiIorio, Kenneth Eichenbaum, Paul Gendron, Beverly Huss, Carrie Lachance, and Scott Shuda. The table set forth below lists the names and ages of each of our seven nominees to the Board of Directors. Each director elected will serve a one-year term and hold office until the next annual meeting of stockholders and until such director’s successor has been elected and qualified or until such director’s earlier death, resignation or removal. Each nominee has consented to being named in this proxy statement and to serve on the Board of Directors if elected. If any nominee becomes unavailable to serve for any reason as a director at the time of the Annual Meeting, which is not expected, the Board of Directors will eliminate the Board position effective at the Annual Meeting or the proxy holders will vote the proxies in their discretion for the nominee designated by the Board of Directors to fill the vacancy unless otherwise instructed by a stockholder.

  2. ELECTION OF DIRECTORS

    | Name | Age | Position | | Ralph Boyd | 67 | Director | | Richard DiIorio | 49 | Director | | Dr. Kenneth D. Eichenbaum, MD, MSE | 47 | Director | | Paul A. Gendron | 62 | Director | | Beverly A. Huss | 64 | Director | | Carrie Lachance | 47 | Director | | Scott Shuda | 58 | Director, Chairman |

  3. ELECTION OF DIRECTORS

    Ralph F. Boyd (Director). Ralph F. Boyd has been a member of the Company's Board of Directors since May 17, 2022. Mr. Boyd served as a governance and strategy consultant to the Company from February 2022 until his election to the Board. Since April 2020, he has served as President & CEO of SOME, Inc., a nonprofit developer, owner, operator, and provider of affordable housing, clinical healthcare and human services, food insecurity and emergency services, and employment training. Previously he held positions with The Urban Land Institute where he served as Senior Resident Fellow for Leadership and Strategy/Global from August 2018 to March 2020, and Chief Executive Officer/ULI Americans from July 2017 to July 2018. Mr. Boyd was the Chief Executive Officer of the American Red Cross/Massachusetts Region from 2014 to 2017. He holds a Juris Doctor degree from Harvard Law School and a Bachelor of Arts degree in political science from Haverford College. Mr. Boyd brings a background in governance, risk management and financial reporting. He currently serves as a director of Sandy Spring Bancorp (NASDAQ: SASR) where he chairs the compensation committee and is a member of the executive and nominating committees. He has served on for-profit and not-for-profit boards throughout his career including DirecTV Group Inc. (formerly NASDAQ; DTV) where he chaired the audit committee and served on the nominating and governance committee. Richard A. DiIorio (Director). Richard A. DiIorio, who joined the Company in 2004, was appointed as the Company’s President and Chief Executive Officer and member of the Board of Directors on November 15, 2017. He served as President until March 2021, at which time Ms. Lachance was appointed President, and Mr. DiIorio continued to serve as the Company's Chief Executive Officer. Previously, he served as the Company’s Executive Vice President and General Manager of Oncology from May 2017 to November 2017 and as a member of the Office of the President. Mr. DiIorio also held, within the Company, the previous positions of Vice President of Oncology Sales, Regional Vice President-Eastern Region and Territory Manager. Before joining the Company, he held various sales and sales leadership roles at Stryker, Novartis, and Thermo Scientific. Mr. DiIorio holds a Bachelor of Science degree in biology from Boston College. With over 20 years of successful healthcare experience, Mr. DiIorio brings extensive expertise in sales, customer service, product launch and market knowledge focused on driving growth within the infusion market. Mr. DiIorio currently serves on the board of Dignitana AB (NASDAQ: DIZTF), a Swedish medical technology company. Dr. Kenneth D. Eichenbaum, MD, MSE (Director Nominee). Dr. Kenneth D. Eichenbaum, MD, MSE is a board certified Anesthesiologist who has practiced clinically at Corewell Health William Beaumont University Hospital since 2017, and Trinity Health Oakland Hospital since 2021. Dr. Eichenbaum completed a Fellowship in Cardiothoracic Anesthesia at Stanford University and holds a Medical Degree from the Icahn School of Medicine at Mount Sinai in New York. He holds a Master of Science Degree in Data Network Engineering and a Bachelor of Science Degree in Materials Science Engineering from the University of Pennsylvania. He also holds a Bachelor's Degree from The Wharton School with a concentration in Finance. Dr. Eichenbaum has extensive experience working with infusion pumps and related technologies for the delivery of critical care and pain management therapies. He has a strong business background in evaluating biotech and med-tech companies and has 20 years of experience working with Investment Firms. He also lectures in hospital business management and advises Accountable Care Organizations. Paul A. Gendron (Director). Paul A. Gendron has been a member of the Company's Board of Directors since May 15, 2019. Mr. Gendron also served as a financial consultant to the Company from January 2019 until his election to the Board. Previously, he was a client service partner with PriceWaterhouseCoopers LLP where he held various leadership roles, including North Texas Market Assurance Leader, U.S. Assurance Talent Transformation Leader, and Southwest Region Technology Practice Risk Management Leader. In his Market Assurance Leader role, Mr. Gendron lead the Assurance practice in the Dallas, Fort Worth, Austin and Little Rock offices, providing services in internal and external audit, risk and information technology assurance, and accounting and capital markets advisory. Mr. Gendron is a CPA and holds a Bachelor of Business Administration degree in accounting from the University of Texas at Austin. He has served on non-profit boards during his career as well as the Accounting Advisory Council at the University of Texas at Austin. Mr. Gendron brings over 30 years of public accounting experience at PriceWaterhouseCoopers LLP, including 22 years as audit partner, where he served global public and private multibillion-dollar corporations. His areas of strength include board governance, audit project management, risk management, executive management, public offerings, and mergers and acquisitions. Beverly A. Huss (Director Nominee). Beverly A. Huss served as the Chief Executive Officer of Pagonia Medical, Inc. (“Pagonia”), a private medical device company focused on the preservation of tissue following a heart attack, stroke, traumatic brain injury and other medical conditions from January 2021 until June 2022. From September 2013 until January 2021, she served as President and Chief Executive Officer of Qool Therapeutics, Inc. (“Qool”), formerly Thermocure, Inc., a company focused on temperature management therapies that underwent an assignment for the benefit of creditors under California law in November 2020 as a result of the COVID-19 pandemic. Prior to joining Qool, Ms. Huss was President and Chief Executive Officer at a start-up medical device company, Vibrynt, Inc., and held multiple senior level leadership positions at Guidant Corporation, including, President, Endovascular Solutions, and Vice President, Global Marketing, Vascular Intervention, and Vice President of the Stent Business Unit. Ms. Huss currently serves on the boards of directors of publicly-traded Accuray Incorporated, an oncology company (chair of the Accuray compensation committee), Iridex Inc., an ophthalmology laser company (chair of the Iridex compensation committee), and Vicarious Surgical Inc., a held robotics company developing technology with a focus on abdominal access and visualization through a single port. Her prior public company board experience includes Artes Medical, Inc., Coala-Life Group AB, Wright Medical Group N.V. and Dade Behring Holdings, Inc. Ms. Huss holds a B.S. in metallurgical engineering from the University of Illinois and a M.S. in technology management from Pepperdine University. As a current chief executive officer with more than 25 years of management experience in the medical device industry, and a current and former member of several public and private company boards for two decades, Ms. Huss brings to the Board extensive experience medical devices and medical services, including experience in the areas of business operations, management and corporate governance. Her education and experience make her qualified to serve on our Board. Carrie A. Lachance (Director). Carrie A. Lachance who joined the Company in September 2010 was elected to the Board on May 18, 2021. Ms. Lachance has held multiple positions with the Company. She was promoted to President and

  4. ELECTION OF DIRECTORS

    Chief Operating Officer in March 2021. She previously served as Executive Vice President and Chief Operating Officer from October 2019 to March 2021; Senior Vice President of Clinical and Customer Services from October 2018 to October 2019; Vice President of Clinical and Customer Services from December 2017 to October 2018 and Director of Clinical Resources until December 2017. Ms. Lachance began her career as a registered nurse and is also a certified infusion nurse. She holds a Bachelor of Science degree in nursing and a Master of Business Administration-Management degree from Rivier University. With over 25 years in the health care industry, Ms. Lachance brings extensive experience in healthcare operations and expertise in clinical and customer service. Scott A. Shuda (Director, Chairman). Scott A. Shuda has been a member of the Company’s Board of Directors since September 7, 2016 and was elected Chairman of the Board effective December 19, 2018. Mr. Shuda is a Managing Director and Co-founder of Meridian OHC Partners, LP (“Meridian”) and BlueLine Partners, LLC, investment firms that focus on publicly listed technology and healthcare companies. Mr. Shuda has served as a director of Iridex Corporation ("Iridex") (NASDAQ: IRIX), a global leader in ophthalmic laser systems since 2019 and was elected chairman of the board effective June 24, 2020. He also serves as a member of the compensation committee and the nominating & governance committees. He previously served on the Iridex Board from 2012 to 2017. Mr. Shuda holds both a Juris Doctor degree and a Master of Business Administration degree from Georgetown University. Mr. Shuda has extensive experience with small public companies particularly those within the medical devices industry. He brings more than 25 years of professional experience in law, technology and entrepreneurial endeavors, including transactions that range from initial public offerings and venture financings to mergers and acquisitions. Mr. Shuda also serves as the Managing Director of TSV Investment Partners, LLC, which is the sole general partner of Meridian and a Company stockholder.

  5. Directors’ Compensation

    | | Fees Earned or Paid in Cash | Option Awards | All Other Compensation | Total | | Name | ( $ ) | ( $ ) (1) (2) | ( $ ) | ( $ ) | | Ralph F. Boyd (3) | $68,316 | $99,093 | $— | $167,409 | | Paul A. Gendron (4) | $80,496 | $99,093 | $— | $179,589 | | Gregg O. Lehman (5) | $69,880 | $99,093 | $— | $168,973 | | R. Rimmy Malhotra (6) | $56,222 | $99,093 | $— | $155,315 | | Christopher R. Sansone (7) | $24,219 | $— | $— | $24,219 | | Scott A. Shuda (8) | $97,632 | $99,093 | $— | $196,725 |

  6. Current Independent Director Compensation

    Current Independent Director Compensation Each of the non-employee directors received the following annual cash compensation (or portion of cash compensation for fiscal year during which served as a director or committee member) in 2023: •$50,000 for each non-employee Independent Director on the Board; •$90,000 for the Chairman of the Board; •$20,000 for the Chair of the Audit Committee and $10,000 for each Audit Committee member; •$12,500 for each Co-Chair of the Compensation Committee; and •$10,000 for the Chair of the Nominating Committee and $5,000 for each Nominating Committee member. Board and committee compensation is paid quarterly in arrears, on calendar quarters. The non-employee directors received the following annual stock compensation grants in 2023 with the exception noted in Footnote 2 above.: •Options for 24,424 shares of the Company’s Common Stock for each Independent Director. Any such grant of options to non-employee directors are contingent upon sufficient share capacity under the Company’s 2021 Equity Incentive Plan. Further, such options are typically granted on the date of the Company’s annual meeting of stockholders. Options were granted in 2023 with an exercise price equal to the closing price of the stock on the grant date and vest over a period of one year or immediately upon a change in control, as defined under the Company’s 2021 Equity Incentive Plan.

  7. Addam Chupa

    Addam Chupa Addam Chupa joined InfuSystem in January 2020 as Senior Vice President of Information Technology. He previously served as Director of Information Technology Operations of Forum Health from April 2019 to January 2020. Prior to these roles, he served in various capacities including Director of IT Operations at Diplomat Pharmacy from January 2014 to April 2019. Mr. Chupa received his Bachelor of Business Administration degree with a major in computer information systems from Walsh College.

  8. Jerod Funke

    Jerod Funke Jerod Funke joined InfuSystem in October 2023 as Executive Vice President and Chief Human Resources Officer. He previously worked for Insulet Corporation from March 2021 through October 2023 serving as Vice President Global Talent Acquisition from March 2021 though October 2023 and Senior Human Resources Business Partner-Global Operations from June 2021 through October 2023. Prior to that he served as Vice President Global Talent Acquisition for Vertex Pharmaceuticals from January 2017 though February 2021. Mr. Funke earned a Bachelor of Arts degree in psychology and a Master of Arts degree in developmental psychology from Boston College while competing as a Division-1 football player.

  9. Barry Steele

    Barry Steele Barry Steele joined InfuSystem in March 2020 as Executive Vice President, Chief Financial Officer. He previously served as Chief Financial Officer of Horizon Global Corporation from February 2019 to June 2019 and as Vice President of Finance and Chief Financial Officer of Gentherm from October 2004 to December 2018. Earlier he held various finance positions with Advanced Accessory Systems, LLC including Chief Financial Officer. Mr. Steele, who is a CPA, began his career with Price Waterhouse LLP in 1993. He received his Bachelor of Science degree, majoring in Accounting, from Hillsdale College.

  10. Summary Compensation Table

    Summary Compensation Table The following table sets forth the compensation of the named executive officers of the Company for the fiscal years presented below.

  11. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Stock Awards (2) ($) | Option Awards (2) ($) | All Other Compensation (3) ($) | Total ($) | | Richard DiIorio | 2023 | $600,000 | $498,000 | $615,238 | $535,108 | $38,311 | $2,286,657 | | Chief Executive Officer | 2022 | $600,000 | $174,000 | $526,503 | $214,599 | $32,265 | $1,547,367 | | Carrie Lachance | 2023 | $410,000 | $405,225 | $189,180 | $243,773 | $16,081 | $1,264,258 | | President and Chief Operating Officer | 2022 | $389,481 | $67,860 | $228,151 | $92,993 | $16,200 | $794,685 | | Barry Steele | 2023 | $400,000 | $308,200 | $184,584 | $237,825 | $17,231 | $1,147,839 | | Executive Vice President and Chief Financial Officer | 2022 | $300,000 | $43,500 | $175,495 | $71,534 | $15,958 | $606,487 |

  12. Summary Compensation Table

    (1)For 2023, amounts represent discretionary annual bonus awards earned by our named executive officers with respect to the Company’s performance for 2023 (Mr. DiIorio: $498,000; Ms. Lachance: $255,225 and Mr. Steele: $208,200) and cash retention awards payable to our named executive officers in four equal installments in May 2023, July 2023, October 2023 and January 2024 (Ms. Lachance: $150,000; and Mr. Steele: $100,000). (2)In accordance with the SEC's proxy disclosure rules, included in the "Stock Awards" and "Option Awards" columns are the aggregate grant date fair values of stock awards and option awards made during the respective fiscal years computed in accordance with FASB ASC Topic 718. The measurement objective of FASB ASC Topic 718 is to estimate the fair value at the grant date of the equity instruments that the entity is obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments (for example, to exercise share options). That estimate is based on the share price and other pertinent factors, such as in the case of stock options the expected volatility at the grant date. The grant date fair value of an award reflects the accounting expense and may not represent the actual value that will be realized. For a discussion of the assumptions used in computing this valuation, see Note 12 of the Notes to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (3)The Company matches all of an employee's 401(k) contribution up to a maximum of 5% of a participant’s eligible salary, or certain statutory limits. All Other Compensation for 2023 consists of the following: (i) for Mr. DiIorio, $21,727 for use of a company vehicle, $16,169 for employer 401(k) matching contributions, and miscellaneous other benefits; (ii) for Ms. Lachance, $15,665 for employer 401(k) matching contributions, and miscellaneous other benefits; and (iii) for Mr. Steele, $16,594 for employer 401(k) matching contributions, and miscellaneous other benefits.

  13. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table shows all unexercised options and unvested stock incentive plan awards for each of the named executive officers as of December 31, 2023:

  14. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards: | | | | | Stock Awards: | | | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (1) ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units That Have Not Vested (1) ($) | | | Richard DiIorio (2) | 50,000 | — | | 2.69 | 12/08/24 | | | | | | | | | 25,000 | — | | 2.60 | 03/10/25 | | | | | | | | | 40,000 | — | | 2.76 | 08/18/26 | | | | | | | | | 25,000 | — | | 2.15 | 03/15/27 | | | | | | | | | 25,000 | — | | 11.07 | 05/20/30 | | | | | | | | | 13,786 | 6,892 | | 19.50 | 05/18/31 | | | | | | | | | 19,998 | 39,986 | | 8.58 | 05/17/32 | | | | | | | | | — | 131,891 | | 9.18 | 05/18/33 | | | | | | | | | | | | | | 74,620 | | 786,495 | | | | | | | | | | | | | | 42,235 | | 445,157 | | | | | | | | | | | 19,608 | | 206,668 | | Carrie Lachance (3) | 50,000 | — | | 2.70 | 4/19/28 | | | | | | | | | 40,000 | — | | 4.70 | 5/15/29 | | | | | | | | | 20,000 | — | | 11.07 | 5/20/30 | | | | | | | | | 41,230 | 20,613 | | 19.50 | 5/18/31 | | | | | | | | | 8,666 | 17,327 | | 8.58 | 5/17/32 | | | | | | | | | — | 60,084 | | 9.18 | 5/18/33 | | | | | | | | | | | | | | 84,736 | | 893,117 | | | | | | | | | | | | | | 8,864 | | 93,427 | | | | | | | | | | | 8,932 | | 94,143 | | Barry Steele (4) | 50,000 | — | | 6.82 | 03/18/25 | | | | | | | | | 15,000 | — | | 11.07 | 05/20/30 | | | | | | | | | 6,893 | 3,446 | | 19.50 | 05/18/31 | | | | | | | | | 6,666 | 13,329 | | 8.58 | 05/17/32 | | | | | | | | | — | 58,618 | | 9.18 | 05/18/33 | | | | | | | | | | | | | | 29,402 | | 309,897 | | | | | | | | | | | | | | 6,818 | | 71,862 | | | | | | | | | | | 8,715 | | 91,856 |

  15. Outstanding Equity Awards at Fiscal Year End

    (1)Represents unvested restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”), each representing a contingent right to receive one share of the Company's Common Stock, multiplied by $10.54, the closing price of the Company's Common Stock on December 31, 2023, as quoted by the NYSE American LLC. The number and payout value for the PSUs included in this table are based on achieving threshold performance. (2)At December 31, 2023, Mr. DiIorio owned 20,455 and 21,780 target-level PSUs that will vest on May 17, 2024 and March 15, 2025, respectively, subject to the attainment of performance goals discussed below. At December 31, 2023, Mr. DiIorio owned 19,608 PSUs that are earned, provided his employment is continuing on the vesting date, based upon the achievement of the market condition which is the Total Shareholder Return (“TSR”) attained during the performance period ranked on a percentile basis relative to a comparator group consisting of each company included in the Russell 2000 index. TSR is defined as stock price appreciation plus reinvested dividends and the performance period starts on January 1, 2023 and ends on December 31, 2024. The Relative TSR PSUs are earned from 50% to 200% of target based on actual performance, which thereafter represents the right to receive one share of the Company’s common stock for each PSU. At December 31, 2023, Mr. DiIorio owned the 74,620 RSUs which will vest subject to his continued employment as follows: (i) 14,103 on May 18, 2024; (ii) 40,909 on May 17, 2025; and (iii) 19,608 on May 18, 2026. Settlement of the Common Stock underlying RSUs will occur on each vesting date and settlement of the Common Stock underlying PSUs will occur following certification of the achievement of the specified performance goals. At December 31, 2023, Mr. DiIorio owned the following unvested options: (i) unvested options to purchase 6,892 shares of Common Stock, which vest on May 18, 2024; and (ii) unvested options to purchase 39,986 shares of Common Stock, which vest in two equal annual installments starting on May 17, 2024; and (iii) unvested options to purchase 131,891 shares of Common Stock which will vest in three equal annual installments starting on May 18, 2024. (3)At December 31, 2023, Ms. Lachance owned 8,864 target-level PSUs that will vest on May 17, 2024, subject to the attainment of performance goals discussed below. At December 31, 2023, Ms. Lachance owned 8,932 PSUs that are earned, provided her employment is continuing on the vesting date, based upon the achievement of the market condition which is the Total Shareholder Return (“TSR”) attained during the performance period ranked on a percentile basis relative to a comparator group consisting of each company included in the Russell 2000 index. TSR is defined as stock price appreciation plus reinvested dividends and the performance period starts on January 1, 2023 and ends on December 31, 2024. The Relative TSR PSUs are earned from 50% to 200% of target based on actual performance, which thereafter represents the right to receive one share of the Company’s common stock for each PSU. At December 31, 2023, Ms. Lachance owned 84,736 RSUs which will vest subject to her continued employment as follows: (i) 50,000 on March 1, 2024; (ii) 8,077 on May 18, 2024; (iii) 17,727 on May 17, 2025; and 8,932 on May 18, 2026. Settlement of the Common Stock underlying RSUs will occur on each vesting date and settlement of the Common Stock underlying PSUs will occur following certification of the achievement of the specified performance goals. At December 31, 2023, Ms. Lachance owned the following unvested options: (i) unvested options to purchase 20,613 shares of Common Stock, which vest on May 18, 2024; (ii) unvested options to purchase 17,327 shares of Common Stock, which vest in two equal annual installments starting on May 17, 2024; and (iii) unvested options to purchase 60,084 shares of Common Stock, which vest in three equal annual installments starting on May 18, 2024. (4)At December 31, 2023, Mr. Steele owned 6,818 target-level PSUs that will vest on May 17, 2024, subject to the attainment of performance goals discussed below. At December 31, 2023, Mr. Steele owned 8,715 PSUs that are earned, provided his employment is continuing on the vesting date, based upon the achievement of the market condition which is the Total Shareholder Return (“TSR”) attained during the performance period ranked on a percentile basis relative to a comparator group consisting of each company included in the Russell 2000 index. TSR is defined as stock price appreciation plus reinvested dividends and the performance period starts on January 1, 2023 and ends on December 31, 2024. The Relative TSR PSUs are earned from 50% to 200% of target based on actual performance, which thereafter represents the right to receive one share of the Company’s common stock for each PSU. At December 31, 2023, Mr. Steele owned 29,402 RSUs which will vest subject to his continued employment as follows: (i) 7,051 on May 18, 2024; (ii) 13,636 on May 17, 2025; and (iii) 8,715 on May 18, 2026. Settlement of the Common Stock underlying RSUs will occur on each vesting date and settlement of the Common Stock underlying PSUs will occur following certification of the achievement of the specified performance goals. At December 31, 2023, Mr. Steele owned the following unvested options: (i) unvested options to purchase 3,446 shares of Common Stock, which vest on May 18, 2024; (ii) unvested options to purchase 13,329 shares of Common Stock, which vest in two equal annual installments starting on May 17, 2024; and (iii) unvested options to purchase 58,618 shares of Common Stock, which vest in three equal annual installments starting on May 18, 2024.

  16. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Executive Compensation.”

  17. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (5) | Net Income (6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $2,286,657 | $2,413,801 | $1,206,049 | $1,246,269 | $56.12 | $872,000 | | 2022 | $1,547,367 | $109,085 | $821,176 | $(5,465) | $46.22 | $18,000 | | 2021 | $1,720,360 | $1,244,800 | $1,681,464 | $1,448,239 | $90.68 | $1,420,000 |

  18. PAY VERSUS PERFORMANCE

    (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. DiIorio (the Company's Chief Executive Officer and Principal Executive Officer ("PEO")) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary Compensation Table.” (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. DiIorio, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. DiIorio during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. DiIorio's total compensation for each year to determine the compensation actually paid:

  19. PAY VERSUS PERFORMANCE

    | Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards (a) | Equity Award Adjustments (b) | Compensation Actually Paid to PEO | | 2023 | $2,286,657 | $(1,150,346) | $1,277,490 | $2,413,801 | | 2022 | $1,547,367 | $(741,102) | $(697,180) | $109,085 | | 2021 | $1,720,360 | $(1,075,175) | $599,615 | $1,244,800 |

  20. PAY VERSUS PERFORMANCE

    (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (b) The equity award adjustments for each applicable year 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 the 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 awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for 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 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 stock or option 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 the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:

  21. PAY VERSUS PERFORMANCE

    | Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | $1,292,739 | $51,913 | $— | $(3,559) | $(63,603) | $— | $1,277,490 | | 2022 | $751,761 | $(989,510) | $— | $(345,892) | $(113,539) | $— | $(697,180) | | 2021 | $799,331 | $(307,717) | $149,995 | $(41,994) | $— | $— | $599,615 |

  22. PAY VERSUS PERFORMANCE

    (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. DiIorio, who has served as our CEO since 2017) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. DiIorio) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023 , Ms. Lachance and Mr. Steele; (ii) for 2022, Ms. Lachance and Thomas Ruiz, the Company's former Executive Vice President and Chief Commercial Officer; and (iii) for 2021, Ms. Lachance and Mr. Steele. (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. DiIorio), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. DiIorio) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. DiIorio) for each year to determine the compensation actually paid, using the same methodology described above in Note 2:

  23. PAY VERSUS PERFORMANCE

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments (a) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $1,206,049 | $(427,681) | $467,901 | $1,246,269 | | 2022 | $821,176 | $(273,795) | $(552,846) | $(5,465) | | 2021 | $1,681,464 | $(1,352,027) | $1,118,802 | $1,448,239 |

  24. PAY VERSUS PERFORMANCE

    (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows:

  25. PAY VERSUS PERFORMANCE

    | Year | Average Year End Fair Value of Equity Awards | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Award Adjustments | | 2023 | $478,428 | $64,272 | $— | $(41,971) | $(32,828) | $— | $467,901 | | 2022 | $244,256 | $(415,176) | $— | $(268,387) | $(113,539) | $— | $(552,846) | | 2021 | $1,141,204 | $(123,821) | $62,498 | $38,921 | $— | $— | $1,118,802 |

  26. PAY VERSUS PERFORMANCE

    (5) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. (6) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year.

  27. Compensation Actually Paid and Cumulative TSR

    Compensation Actually Paid and Cumulative TSR As demonstrated by the following graph, the amount of compensation actually paid to Mr. DiIorio and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. DiIorio) is aligned with the Company’s cumulative TSR over the two years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is because a significant portion of the compensation actually paid to Mr. DiIorio and to the other NEOs is comprised of equity awards.

  28. Compensation Actually Paid and Net Income

    Compensation Actually Paid and Net Income As demonstrated by the following table, the amount of compensation actually paid to Mr. DiIorio and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. DiIorio) is generally aligned with the Company’s net income over the two years presented in the table.