DEF 14A of Delcath Systems, Inc., Apr 12, 2024

DEF 14A of Delcath Systems, Inc.

Filed Apr 12, 2024 · FY20230001628280-24-016059

Open on EDGAR

  1. Nominee for Election as Class III Director

    Nominee for Election as Class III Director

  2. Nominee for Election as Class III Director

    | Name | Age | Position with Delcath | Director Since | | Steven Salamon | 58 | Director | 2020 |

  3. Nominee for Election as Class III Director

    Biographical information, including principal occupation and business experience during the last five years, for our director nominee is set forth below. Steven Salamon was appointed as a director of the Company in May 2020. Mr. Salamon is a co-founder of, and has served as Portfolio Manager at, Rosalind Advisors, Inc., a life sciences-focused investment manager (“Rosalind Advisors”), since 2006. Mr. Salamon holds an MBA from the Ivey Business School and a Bachelors of Applied Science degree in Engineering Physics from the University of Toronto. Prior to co-founding Rosalind Advisors, Mr. Salamon worked as an equity analyst at HSBC Securities and RBC Capital Markets (formerly RBC Dominion Securities). Prior to completing his MBA, Mr. Salamon worked as a product engineer for Chrysler Corporation. Mr. Salamon brings to our Board his manufacturing, financial and investment industry experience, his understanding of our business and our industry and his strategic insight. In addition, Mr. Salamon provides a valuable stockholder perspective to the Board. Mr. Salamon was elected to our Board pursuant to a Board Appointment Agreement entered into with certain of our stockholders, Rosalind Master Fund L.P. and Rosalind Opportunities Fund I L.P.

  4. Directors Continuing in Office

    Directors Continuing in Office

  5. Directors Continuing in Office

    | Name | Age | Position with Delcath | Director Since | | Gerard Michel | 60 | CEO/Director | 2020 | | Gilad Aharon, Ph.D. | 50 | Director | 2020 | | Elizabeth Czerepak | 68 | Director | 2020 | | John R. Sylvester | 60 | Non-Executive Chairman | 2019 |

  6. Directors Continuing in Office

    Biographical information, including principal occupation and business experience during the last five years, for our directors whose terms continue is set forth below.

  7. Class I Directors (Term Expires at 2025 Annual Meeting)

    Class I Directors (Term Expires at 2025 Annual Meeting) Gerard Michel was appointed as a director of the Company and its Chief Executive Officer in October 2020. Mr. Michel has over 30 years of experience in the pharmaceutical and medical technology industries across multiple functional areas. Prior to joining the Company as its Chief Executive Officer on October 1, 2020, he was Chief Financial Officer of Vericel Corporation, a biopharmaceutical company, since June 2014 where he was a key member of the management team that integrated a transformative acquisition and revised the company’s business model from a research focused company to a fully integrated, profitable commercial business. Mr. Michel also served as Chief Financial Officer and Vice President, Corporate Development of Biodel, Inc. from November 2007 to May 2014, and Chief Financial Officer and Vice President of Corporate Development of NPS Pharmaceuticals Inc. from August 2002 to November 2007. Prior to that, Mr. Michel was a Principal at Booz Allen and held a variety of commercial roles at both Lederle Labs and Wyeth Labs. Mr. Michel holds an M.S. in Microbiology from the University of Rochester School of Medicine, an M.B.A. from the Simon School of Business, and a B.S. in both Biology and Geology from the University of Rochester. We believe that the Board is greatly enhanced by Mr. Michel’s decades of experience in the pharmaceutical and medical technology industries, his strong leadership skills and his in-depth understanding of the Company and its goals from his experience as our Chief Executive Officer. Gilad Aharon, Ph.D. was appointed as a director of the Company in May 2020. Dr. Aharon is a co-founder of and has served as a Portfolio Manager at Rosalind Advisors, Inc., since 2006. Dr. Aharon holds a Ph.D. in Biophysics and Molecular Biology from the University of Toronto. Prior to co-founding Rosalind Advisors, Dr. Aharon worked as an equity analyst at Infinium Securities Inc. Dr. Aharon’s financial and investment industry experience, his understanding of our business and our industry and his educational background make him extremely valuable to our Board. Dr. Aharon also provides a valuable stockholder perspective to the Board. Dr. Aharon was elected to our Board pursuant to a Board Appointment Agreement entered into with certain of our stockholders, Rosalind Master Fund L.P. and Rosalind Opportunities Fund I L.P.

  8. Class II Directors (Term Expires at 2026 Annual Meeting)

    Class II Directors (Term Expires at 2026 Annual Meeting) Elizabeth Czerepak was appointed as a director of the Company in February 2020. Ms. Czerepak has more than thirty-five years of financial leadership and strategy development experience across the pharmaceutical and biotechnology fields. Ms. Czerepak most recently served as the Chief Financial Officer at Sorrento Therapeutics, Inc., a clinical stage biopharmaceutical company focused on developing oncology, non-opioid pain, and Covid therapies, from May 2022 to November 2023. Ms. Czerepak also served as Chief Financial Officer at Scilex Holdings Company, a commercial pharmaceutical company focused on developing and commercializing non-opioid pain therapies, from May 2022 to September 2023. She will continue to serve as consultant to Scilex until September 2024. Prior to that, from September 2020 to May 2022, she served as Chief Financial Officer at BeyondSpring Inc. (NASDAQ:BYSI), a global biopharmaceutical company focused on developing innovative immuno-oncology cancer therapies, and from May 2018 to January 2020, she served as Chief Financial Officer and Chief Business Officer of Genevant Sciences, Inc., a technology focused nucleic acid delivery company. Earlier experience includes CFO roles at other biotechnology companies including Altimmune, Inc. (NASDAQ: ALT), Isarna Therapeutics, and Cancer Genetics (NASDAQ: CGIX), where she led Altimmune’s IPO through reverse merger, and Cancer Genetics’ IPO and subsequent uplisting to NASDAQ. She has extensive experience in biotech venture capital investment as a Managing Director at JP Morgan/Bear Stearns, where she led investments in 13 biotech companies, providing primary support in completing large private financings, and exits through IPO and acquisition. Ms. Czerepak began her career serving in senior and executive level positions for 18 years at BASF Pharma, Hoffmann-La Roche, and Merck & Co. Her pharma executive level experience includes M&A, licensing, business development and finance. Ms. Czerepak served as a member of the board of directors of Sorrento Therapeutics, Inc. from October 2021 to November 2023. In November of 2023, Sorrento announced it commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code and entered into a court-approved asset sale. Ms. Czerepak also served as a director of Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) from June 2019 to December 2020, and as a director of Scilex Pharmaceuticals, Inc., a private company, from 2019 to 2020. Earlier, from 2001 to 2010, Ms. Czerepak served as a director for many, mostly private, companies in which she was an investor. She received a B.A. magna cum laude in Spanish and Mathematics Education from Marshall University and an MBA from Rutgers University. In 2020, Elizabeth earned a Corporate Director Certificate from Harvard Business School. Ms. Czerepak brings to our Board extensive experience in the pharmaceutical and biotech industries, including as a senior finance executive of publicly traded biopharmaceutical companies. John R. Sylvester was appointed as a director of the Company in July 2019. He has served as the Non-Executive Chairman of the Board since February 2023. Mr. Sylvester most recently served as CEO of Curium Pharma’s SPECT and International businesses. Prior to that he served as Chief Commercial Officer of BTG plc, which he joined in 2011 and had roles leading both their Interventional Oncology and Interventional Vascular businesses as well as a period as Chief Development Officer accountable for Strategy, M&A and Market access. This culminated in an exit to Boston Scientific for $4.2 billion. Prior to BTG, John was Managing Director of Biocompatibles plc, building their Interventional Oncology business which led to a successful exit to BTG for £166.0 million. John joined Biocompatibles following a period as the Vice President of Marketing for Baxter Healthcare’s $750.0 million European Medication Delivery business based in Brussels then Zurich accountable for six strategic business units incorporating drugs, devices and drug device combinations. Before this, John held a number of senior commercial roles in the industrial sector. Immediately prior to Baxter Healthcare, John was the General Manager of a Minerals company with $4.0 billion of assets on three continents, $500.0 million of sales and 1,500 employees. John graduated with joint honors in Biochemistry and Applied Molecular Biology from the University of Manchester Institute of Science and Technology (U.M.I.S.T.). Mr. Sylvester’s extensive international experience with business strategy and commercialization in the healthcare space as well as his educational background enhances our Board.

  9. Board of Directors

    Board of Directors We currently have six directors serving on the Board. The Board oversees the business affairs of the Company and monitors the performance of management. In accordance with our corporate governance principles, our Board does not involve itself in the day-to-day operations of the Company. The directors keep themselves informed through discussions with the Chairman of the Board, Mr. Sylvester, Mr. Michel, in his capacity as Director and Chief Executive Officer, or CEO, and other key executives, and by reading the reports and other materials that management sends them and by participating in Board and committee meetings. Our directors hold office until their successors have been elected and qualified unless the director resigns or is removed or by reason of death or other cause is unable to serve in the capacity of director.

  10. Compensation and Stock Option Committee

    Compensation and Stock Option Committee The Compensation and Stock Option Committee, or the Compensation Committee, assists the Board in the discharge of the Board’s responsibilities with respect to the compensation of our directors, executive officers, and other key employees and consultants. The Compensation Committee establishes our overall compensation philosophy and is authorized to approve the compensation payable to our executive officers, including our named executive officers, and other key employees, including all perquisites, equity incentive awards, cash bonuses, and severance packages. The Compensation Committee also administers certain of the Company’s employee benefit plans, including its equity incentive plans, and is responsible for assessing the independence of compensation consultants and legal advisors. The Compensation Committee exercises sole power to retain compensation consultants and advisors and to determine the scope of the associated engagements. During the fiscal year 2023, our Compensation Committee engaged Frederick W. Cook & Co., Inc. in an effort to better align our compensation program with best practices. The current members of the Compensation Committee are Mr. Sylvester (Chair), Dr. Stoll, and Dr. Aharon, each of whom is “independent” within the meaning of the Nasdaq listing rules. During 2023, the Compensation Committee met five times. The Compensation Committee has a written charter, that satisfies the applicable listing standards of Nasdaq and can be accessed on our website; go to www.delcath.com, click on “Investors,” then “Corporate Governance.”

  11. Recommendations by Stockholders of Director Nominees

    Recommendations by Stockholders of Director Nominees The Nominating Committee will consider any recommendation by a stockholder of a candidate for nomination as a director. If a stockholder wants to recommend a director candidate for consideration by the Nominating Committee, the stockholder should submit the name of the proposed nominee, together with the reasons why the stockholder believes the election of the candidate would be beneficial to the Company and our stockholders and the information about the nominee that would be required in a proxy statement requesting proxies to vote in favor of the candidate. The stockholder’s submission must be accompanied by the written consent of the proposed nominee to being nominated by the Board and the candidate’s agreement to serve if nominated and elected. Any such submission should be directed to the Nominating Committee at our principal office, 566 Queensbury Avenue, Queensbury, NY 12804. If a stockholder intends to nominate a person for election to the Board at an annual meeting, the stockholder must provide us with written notice of his or her intention no later than the deadline for receiving a stockholder proposal for inclusion in our Proxy Statement for such meeting and must otherwise comply with our amended and restated certificate of incorporation. Copies of any recommendation received in accordance with these procedures will be distributed to each member of the Nominating Committee. One or more members of the Nominating Committee may contact the proposed candidate to request additional information.

  12. NON-EMPLOYEE DIRECTOR COMPENSATION

    NON-EMPLOYEE DIRECTOR COMPENSATION The Compensation Committee reviews and recommends to the Board appropriate non-employee director compensation programs for service as directors, committee chairs, and committee members. In lieu of per-meeting fees, non-employee directors of the Company are paid an annual retainer of $43,000 and certain additional annual retainers for chairing or serving as a member of the committees of the Board as follows:

  13. NON-EMPLOYEE DIRECTOR COMPENSATION

    | Name | Annual Retainer ($) | | Board Service | 43,000 | | Chairman of the Board | 25,000 | | Chair of Audit Committee | 20,000 | | Member of Audit Committee | 8,000 | | Chair of Compensation Committee | 12,000 | | Member of Compensation Committee | 5,000 | | Chair of Nominating and Corporate Governance Committee | 8,000 | | Member of Nominating and Corporate Governance Committee | 4,000 |

  14. NON-EMPLOYEE DIRECTOR COMPENSATION

    Additionally, we reimburse all non-employee directors for their reasonable out-of-pocket travel expenses incurred in attending meetings of our Board or any committees of the Board. The following table sets forth the compensation awarded to, earned by or paid to each non-employee director who served on our Board in 2023.

  15. NON-EMPLOYEE DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Total ($) | | Gil Aharon, Ph.D. | 48,000 | 124,956 | 172,956 | | Elizabeth Czerepak | 63,550 | 124,956 | 188,506 | | Steven Salamon | 59,000 | 124,956 | 183,956 | | Roger G. Stoll, Ph.D. | 63,524 | 124,956 | 188,480 | | John Sylvester | 79,927 | 124,956 | 204,883 |

  16. NON-EMPLOYEE DIRECTOR COMPENSATION

    (1)Amounts shown in this column do not reflect dollar amounts actually received by non-employee directors. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted computed in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Commission on March 26, 2024. The Black-Scholes assumptions used were an expected term of 5.2 years, expected volatility 129.8%, and a risk-free interest rate of 3.9%. Our non-employee directors will only realize compensation to the extent the trading price of our Common Stock is greater than the exercise price of such stock options. (2)As of December 31, 2023, the following non-employee directors held options to purchase the following number of shares of our Common Stock:

  17. NON-EMPLOYEE DIRECTOR COMPENSATION

    | Name | Options Outstanding | | Gil Aharon, Ph.D. | 57,682 | | Elizabeth Czerepak | 57,682 | | Steven Salamon | 57,682 | | Roger G. Stoll, Ph.D. | 77,824 | | John Sylvester | 67,682 |

  18. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table sets forth the total compensation awarded to, earned by or paid to our named executive officers during the fiscal years ending December 31, 2023 and December 31, 2022.

  19. SUMMARY COMPENSATION TABLE

    | Name and Position | Year | Salary ($) | Non-Equity Incentive Plan Compensation ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | Total ($) | | Gerard Michel, | 2023 | 538,078 | 189,888 | 1,792,348 | — | 2,520,314 | | Chief Executive Officer | 2022 | 521,024 | 131,175 | 800,499 | 19,500 | 1,472,198 | | John Purpura, M.S. | 2023 | 409,229 | 129,977 | 663,821 | — | 1,203,027 | | Chief Operating Officer | 2022 | 396,136 | 89,785 | 318,407 | — | 804,328 | | Kevin Muir,(3) | 2023 | 316,272 | 78,130 | 621,582 | — | 1,015,984 | | General Manager, Interventional Oncology | 2022 | — | — | — | — | — |

  20. SUMMARY COMPENSATION TABLE

    (1)Amounts reported in this column represent annual cash incentive bonuses, which were awarded based on achievement of corporate performance goals for the year indicated. The 2023 cash incentive bonus determinations are described in more detail above under the heading “Annual Incentive Plan”. (2)Amounts shown in this column do not reflect dollar amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted computed in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718. Assumptions used in the calculation of these amounts are included in Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Commission on March 26, 2024. Our named executive officers will only realize compensation to the extent the trading price of our Common Stock is greater than the exercise price of such stock options. (3)Mr. Muir was not a named executive officer in 2022 and thus, only 2023 compensation information is shown for him in this table.

  21. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control Mr. Michel may resign his at-will employment with the Company for “Good Reason” (as defined within the Michel Employment Agreement) and the Company may terminate Mr. Michel’s at-will employment other than for “Cause” (as defined within the Michel Employment Agreement). If Mr. Michel resigns his at-will employment for Good Reason or the Company terminates Mr. Michel’s employment other than for Cause, then Mr. Michel shall be entitled to his accrued and unpaid compensation and, subject to him entering into and not revoking a general release of claims in favor of the Company and fully complying with the terms of an Employee Confidentiality, Invention Assignment and Restrictive Covenants Agreement (the “Restrictive Covenants Agreement”), Mr. Michel shall also be entitled to: •A severance payment equal in the aggregate to twelve (12) months of his annual base salary at the time of termination, payable in twelve (12) equal monthly installments (and subject to applicable withholdings and deductions) beginning on the last Company payroll date of the first full month following termination of employment (“Severance Benefits”); and •If Mr. Michel timely and properly elects health plan (medical, dental and/or vision) continuation coverage under COBRA, the Company will reimburse Mr. Michel in an amount equal to the difference between the monthly COBRA premium paid by Mr. Michel for him and his dependents and the monthly premium amount paid by similarly situated active executives under the Company’s group health plans (“COBRA Benefits”). Such reimbursement will be paid to Mr. Michel on or by the last day of the month immediately following the month in which Mr. Michel timely remits the COBRA premium payment. Mr. Michel will be eligible to receive COBRA premium reimbursement until the earliest of: (x) the twelve-month anniversary of the date his employment with the Company terminates; (y) the date Mr. Michel is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Mr. Michel becomes eligible to receive substantially similar coverage from another employer. •In addition, the Michel Employment Agreement provides that if Mr. Michel’s at-will employment is terminated by Mr. Michel for Good Reason or by the Company without Cause, in each case within three (3) months before or twelve (12) months following a change in control of the Company, Mr. Michel shall be entitled to receive his accrued and unpaid compensation and, subject to Mr. Michel entering into and not revoking a general release of claims in favor of the Company and fully complying with the Restrictive Covenants Agreement, Mr. Michel shall be entitled to receive (i) the Severance Benefits, (ii) the COBRA Benefits, (iii) immediate acceleration of any unvested portion of any other outstanding stock options granted to him that are outstanding at the time of such termination and (iv) a pro-rated annual cash incentive bonus for the fiscal year in which Mr. Michel’s employment terminates, as determined by the Board or the Compensation Committee based on its assessment of the actual performance of the Company and Mr. Michel following the completion of the fiscal year in which the termination of employment occurs; such pro-rated cash incentive bonus to be paid to Mr. Michel in a lump sum no later than 60 days after the filing of the Company’s Annual Report on Form 10-K for the fiscal year in which the termination of employment occurs. Mr. Purpura and the Company have entered into an Executive Security Agreement dated as of March 20, 2018 the purpose of which is to provide to Mr. Purpura severance payments in the event of a qualifying termination of his employment (a termination of his employment by the Company without cause or if the Company gives him a good reason to voluntarily terminate his employment). In the event that Mr. Purpura’s employment is terminated (other than “for cause” (as defined in the Executive Security Agreement) or due to his death or disability) or by Mr. Purpura’s resignation for “good reason” (as defined in the Executive Security Agreement), the Company is obligated to pay Mr. Purpura the following amounts or benefits: (a) any accrued but unpaid annual base salary and any other form or type of compensation, benefit or perquisite that was approved by the Company’s Board that is vested or accrued on the date of the termination, to be paid in cash in a lump sum within ten calendar days following the date of the termination; (b) payment for any accrued paid time off in accordance with Company policy, to be paid in cash in a lump sum within ten calendar days following the date of the termination; (c) and, if any employee participant of the Company receives an AIP payment for the fiscal year in which Mr. Purpura’s termination occurs, he will be entitled to receive a prorated AIP payment (based on the portion of the fiscal year he was employed by the Company) pursuant to the AIP for that fiscal year, subject and according to the terms and conditions of the AIP, with payment to be made at the time the Company pays that fiscal year’s AIP payments to its other executives but in no event later than March 15 of the subsequent fiscal year; (d) a severance payment equal to eighteen months (the “Severance Period”) of base salary, based upon his annual base salary in effect on the date of the termination, to be paid in cash, less all applicable withholdings and deductions, in approximately equal installments according to the Company’s regular payroll schedule over the 18 month period following the termination; provided, however, that no payments will be made prior to the 60th calendar day following the date of the termination. On the 60th calendar day following the date of the termination, the Company will pay Mr. Purpura in a lump sum the amount of the severance payments that he would have received during such 60-day period under the Company’s regular payroll schedule, and the balance of such severance will be paid to him in approximately equal installments over the remainder of the Severance Period; (e) if Mr. Purpura elects continuation coverage under COBRA for himself and his covered dependents under the Company’s group health and/or dental plans following the termination, then the Company will pay the COBRA premiums necessary to continue his group health and/or dental coverage in effect for himself and his eligible dependents until the earliest of (i) the close of the Severance Period following the date of the termination, (ii) the date Mr. Purpura ceases to participate, for whatever reason, in the Company’s group health and/or dental plans, or (iii) the date on which Mr. Purpura is covered or is eligible to be covered under another group health and/or dental plan or is otherwise no longer eligible for coverage under COBRA. In addition, in the event that there is a “change of control” of the Company and Mr. Purpura’s employment has been terminated by the Company other than for “cause” or if Mr. Purpura resigns for “good reason” during the 12 months immediately following the change of control, then on the 60th calendar day following the date of the qualifying termination, Mr. Purpura will receive a lump sum severance payment equal to 18 months of base salary, based upon his annual base salary in effect on the date of the termination. Mr. Purpura and Delcath entered into a Separation Agreement and Release letter on March 19, 2024, under which among other things, Delcath will pay Mr. Purpura 18 months of severance, and, in exchange for Mr. Purpura’s cooperation and consulting, as necessary, the Company agreed to accelerate the vesting of Mr. Purpura’s stock options such that the options will all vest within six months of his termination date and extend the post-termination exercise period of the all stock options until 18 months following his termination date.

  22. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END —2023

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END —2023 The following table sets forth information concerning unexercised stock options for each named executive officer as of December 31, 2023 that had been granted under the 2020 Plan, unless otherwise noted in the footnotes to this table.

  23. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END —2023

    | | | Option Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price Per Share ($) | Option Expiration Date | | Gerard Michel | 10/1/2020(2) | 396,000 | — | 11.67 | 10/1/30 | | | 10/1/2020(2) | 51,000 | — | 17.51 | 10/1/30 | | | 10/1/2020(2) | 51,000 | — | 23.34 | 10/1/30 | | | 8/5/2021(3) | 111,078 | 13,922 | 10.16 | 8/5/31 | | | 2/8/2022 | 74,198 | 41,939 | 7.14 | 2/8/32 | | | 2/8/2023 | 42,900 | 97,500 | 4.67 | 2/8/33 | | | 6/12/2023 | 32,844 | 136,043 | 7.25 | 6/12/33 | | John Purpura, M.S.(6) | 2/1/2019(4) | 357 | — | 196.70 | 2/1/29 | | | 10/1/2020 | 175,000 | — | 11.67 | 10/1/30 | | | 8/5/2021(3) | 39,978 | 5,022 | 10.16 | 8/5/31 | | | 2/8/2022 | 29,532 | 16,666 | 7.14 | 2/8/32 | | | 2/8/2023 | 17,160 | 39,000 | 4.67 | 2/8/33 | | | 6/12/2023 | 11,634 | 48,179 | 7.25 | 6/12/33 | | Kevin Muir | 12/7/2020(5) | 30,000 | — | 15.32 | 12/7/30 | | | 8/5/2021(3) | 35,536 | 4,464 | 10.16 | 8/5/31 | | | 2/8/2022 | 24,610 | 13,889 | 7.14 | 2/8/32 | | | 2/8/2023 | 14,300 | 32,500 | 4.67 | 2/8/33 | | | 6/12/2023 | 11,634 | 48,179 | 7.25 | 6/12/33 |

  24. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END —2023

    (1)Unless otherwise noted, option shares vest over three years in equal monthly installments with the first vesting occurring on the grant date. (2)On October 1, 2020, Mr. Michel was granted a nonqualified and non-plan stock option “inducement award” to purchase 498,000 shares of our Common Stock in reliance on Nasdaq Rule 5635(c)(4) pursuant to the terms of a stock option award agreement. The stock option vests ratably over a 36-month period beginning on October 31, 2020 (i.e., 1/36th will vest at the end of each month during said 36-month period), subject to Mr. Michel’s continued service with the Company on each respective vesting date. The exercise price of the stock option is equal to (i) $11.67, the closing trading price per share of our Common Stock on October 1, 2020 as to the first 396,000 option shares to vest, (ii) 1.5 times the closing trading price per share of our Common Stock on October 1, 2020 as to the next 51,000 option shares to vest and (iii) 2.0 times the closing trading price per share of the Company’s Common Stock on October 1, 2020 as to the remaining 51,000 option shares to vest. (3)Four-thirty-sixths (4/36th) of the option shares immediately vested on the grant date and the remaining option shares vest and become exercisable at the rate of one-thirty-sixth (1/36th) per month for the next thirty-two months. (4)Mr. Purpura was granted an option to purchase 357 shares of the Company’s Common Stock under the Company’s 2019 Equity Incentive Plan. The options vested in equal monthly installments over one year with the first vesting occurring on the grant date. (5)Options vest over three years, with 33% vesting on the first anniversary of the grant date and the remaining 66% vesting in equal monthly installments over the next two years. (6)Pursuant to the Separation Agreement and Release letter entered into by Mr. Purpura and the Company, all of Mr. Purpura’s unvested stock options as of March 19, 2024 will vest within six months of his termination date.

  25. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  26. Pay Versus Performance Table

    Pay Versus Performance Table 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, as defined below, and certain financial performance of the Company.

  27. Pay Versus Performance Table

    | Pay Versus Performance | | | | | | | | Year | Summary Compensation Table Total for PEO (1) (3) | Compensation Actually Paid to PEO (1) (2) (5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) (2)(4) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (1) (2) (6) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (7) | Net Income (Loss) (8) | | (a) | (b) | (c) | (d) | (e) | (f) | (h) | | 2023 | $2,520,314 | $2,154,023 | $1,109,506 | $952,501 | $23.21 | $(47,678,000) | | 2022 | $1,472,198 | $(188,099) | $770,916 | $266,160 | $20.09 | $(36,407,000) | | 2021 | $1,914,402 | $(2,082,129) | $900,633 | $(133,040) | $43.97 | $(25,650,000) |

  28. Pay Versus Performance Table

    (1)We are a smaller reporting company pursuant to Rule 405 of the Securities Act and as such, we are only required to include information for the past three fiscal years in the table. (2)For each of the three years presented in the above table, Gerard Michel was our Principal Executive Officer (“PEO”). Our Non-PEO Named Executive Officers (“Non-PEO NEOs”) were John Purpura, M.S. and Johnny John in 2021 and 2022 and John Purpura, M.S. and Kevin Muir in 2023. (3)The dollar amounts reported in column (b) are the amounts of total compensation reported for our PEO for each corresponding year in the “Total” column of the Summary Compensation Table above and in the Summary Compensation Table as disclosed in our proxy statement filed with the Commission on May 1, 2023. (4)The dollar amounts reported in column (d) represent the average of the amounts reported for the Non-PEO NEOs as a group for each corresponding year in the “Total” column of the Summary Compensation Table above and in the Summary Compensation Table as disclosed in our proxy statement filed with the Commission on May 1, 2023. (5)For purposes of this table, the compensation actually paid (“Compensation Actually Paid”) to our PEO has been computed in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not reflect the actual amount of compensation earned by or paid to our PEO during 2023. The dollar amounts reported in column (c) for 2023 represent total compensation as reflected in the above Summary Compensation Table for 2023, adjusted as follows:

  29. Pay Versus Performance Table

    | | PEO | | | 2023 | | Summary Compensation Table Totals for PEO | $2,520,314 | | Additions (Subtractions) for Equity Awards | | | Fair Value at Year-End of Outstanding and Unvested Equity Awards Granted in the Covered Year | (1,792,348) | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | 846,622 | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | 7,167 | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Year | 326,952 | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | 245,316 | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | | Compensation Actually Paid to PEO | $2,154,023 |

  30. Pay Versus Performance Table

    (6)The following adjustments were made to average total compensation for the Non-PEO NEOs as a group for each year to determine the Compensation Actually Paid, using the same methodology described above in Note 5:

  31. Pay Versus Performance Table

    | | Other non-PEO NEOs (Average) | | | 2023 | | Summary Compensation Table Totals for Non-PEO NEOs | $1,109,506 | | Additions (Subtractions) for Equity Awards | | | Average Fair Value at Year-End of Outstanding and Unvested Equity Awards Granted in the Covered Year | (642,702) | | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | 304,334 | | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | 2,594 | | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Year | 118,207 | | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | 60,562 | | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | | Compensation Actually Paid to non-PEO NEOs | $952,501 |

  32. Pay Versus Performance Table

    (7)Cumulative Total Shareholder Return (“TSR”) represents the return on a fixed investment of $100 in our Common Stock for the period beginning on the last trading day of 2020 through the last trading day of the applicable fiscal year. (8)The dollar amounts reported represent the amount of net loss reflected in the Company’s audited financial statements for 2023.

  33. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above.

  34. Compensation Actually Paid and Cumulative TSR

    Compensation Actually Paid and Cumulative TSR The following graph sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years.

  35. Compensation Actually Paid and Net Income (Loss)

    Compensation Actually Paid and Net Income (Loss) Because the Company did not commercially launch the HEPZATO KIT during 2023 and the Company incurred expenses related to completing the FOCUS clinical trial and preparing for commercialization, we have incurred net losses during the periods presented. Consequently, we have not looked to our net loss as a performance measure for our executive compensation program. Moreover, with no revenue in the United States, we do not believe there is any meaningful relationship between our net loss and Compensation Actually Paid to our NEOs during the periods presented. For 2021, 2022 and 2023, our net loss and the Compensation Actually Paid for both our PEO and non-PEO NEOs increased during each such annual fiscal period. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.