DEF 14A of Eos Energy Enterprises, Inc., Apr 2, 2024

DEF 14A of Eos Energy Enterprises, Inc.

Filed Apr 2, 2024 · FY20230001805077-24-000025

Open on EDGAR

  1. TABLE OF CONTENTS

    | | Page | | Proposal No. 1 Election of Directors | 3 | | Directors | 5 | | Corporate Governance | 8 | | Director Compensation Table | 13 | | Proposal No. 2 Ratification of Selection of Independent Registered Public Accounting Firm | 15 | | Report of the Audit Committee of the Board of Directors | 16 | | Executive Officers | 17 | | Executive Compensation | 18 | | Proposal No. 3 Advisory Vote to Approve Our Named Executive Compensation | 26 | | Proposal No. 4 Authorized Shares Amendment | 27 | | Proposal No. 5 Amendment to the Amended and Restated 2020 Incentive Plan | 29 | | Certain Relationships and Related Person Transactions | 36 | | Security Ownership of Certain Beneficial Owners and Management | 38 | | Delinquent Section 16(a) Reports | 40 | | Additional Information | 41 | | Information About the Proxy Process and Voting | 42 | | Appendix A Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation | 48 | | Appendix B Third Amendment to the Amended and Restated 2020 Incentive Plan | 50 | | Appendix C Amended and Restated 2020 Incentive Plan | 52 |

  2. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board is divided into three (3) classes with only one class of directors being elected in each year and each class serving a three (3) year term. The directors hold their office for a term of three (3) years or until their respective successors are elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Class I directors are Marian “Mimi” Walters, Audrey Zibelman and Jeffrey McNeil; Class II directors are Joe Mastrangelo, our CEO, and Alex Dimitrief; and Class III directors are Russell Stidolph, the Chair of our Board, Jeff Bornstein and Claude Demby. Class I directors standing for re-election at the Annual Meeting are Marian “Mimi” Walters and Jeffrey McNeil. Audrey Zibelman is not standing for re-election at the Annual Meeting. Class II and Class III directors will stand for election at the 2025 and 2026 annual meetings of stockholders, respectively. Each of the nominees for election as Class I directors is currently a director. If elected at the Annual Meeting, each of the nominees for election as Class I directors would serve for three years and until his/her successor is duly elected and qualified, or until his/her earlier death, resignation or removal. If any nominee is unable or unwilling to be a candidate for election, the Board may appoint another nominee or reduce the size of the Board. The following table sets forth information for the nominees who are currently standing for election:

  3. ELECTION OF DIRECTORS

    | Name | Age | Director Since | | Marian “Mimi” Walters (1) | 61 | 2020 | | Jeffrey McNeil (2) | 62 | 2023 |

  4. ELECTION OF DIRECTORS

    (1) Member of the Leadership Development & Compensation Committee and member of the Nominating and Corporate Governance Committee. (2) Member of the Audit Committee and member of the Leadership Development & Compensation Committee. Set forth below is biographical information for the nominees. The following includes certain information regarding the nominees’ individual experience, qualifications, attributes and skills that led the Board to conclude that they should serve as a director. Marian “Mimi” Walters, 61, has served as a director since the closing of the Business Combination in 2020. Ms. Walters has been serving as a director for B. Riley Financial, Inc. (Nasdaq: RILY) since July 2019 and has been Chief Commercial Officer for Leading Edge Power Solutions, LLC since November 2019. From 2015 to 2019, she served as a Member of the U.S. House of Representatives (the “House”) from California’s 45th District where she worked on key legislation, business and policy initiatives related to energy, technology, environmental and healthcare. Ms. Walters was a member of House Leadership and served on the influential Energy and Commerce Committee. She was a member of the Communications and Technology, Digital Commerce and Consumer Protection, and Oversight and Investigations subcommittees. Prior to her election to Congress, Ms. Walters was a member of the California State Senate, from 2008 to 2014, where she served on the Banking and Financial Institutions Committee and was Vice Chair of the Appropriations Committee. She previously served in the California State Assembly and was mayor and council member for the City of Laguna Niguel. Prior to her career in public service, Ms. Walters was an investment professional at Drexel Burnham Lambert and Kidder, Peabody & Co. She earned a B.A. in Political Science from the University of California, Los Angeles. Ms. Walters’ qualifications to serve on our board of directors include: her experience with the alternative energy industry, policy and government affairs and her background in investment banking. Jeffrey McNeil, 62, has served as a member of our Board since 2023. Mr. McNeil has held various significant positions, showcasing his vast experience and leadership capabilities. Since April of 2023, Mr. McNeil has served as Executive Vice President - Advisor at Enphase Energy, playing a pivotal role in guiding the company's strategic initiatives. Before this role, he served as Chief Operations Officer (2019-2023) and Vice President of Quality and Customer Support (2018-2019) at Enphase Energy, demonstrating his commitment to operational excellence. Mr. McNeil's dedication to the advancement of renewable energy solutions is evident in his roles at other leading companies in the industry. He served as Senior Vice President of Operations at Energous Corporation (2016-2018) and held key positions at Cypress Semiconductor Corporation for over two decades (1994-2012), including Senior Vice President of Worldwide Operations and Vice President of Planning. Mr. McNeil’s career journey also includes notable positions at Upstart Power, Inc., where he currently serves on the board of directors, as well as Heraeus, Digital Equipment Corporation (later acquired by Hewlett Packard Enterprise), Seagate Technology, and Memorex. Mr. McNeil earned his Bachelor of Science degree from San Jose University, majoring in Chemical Engineering. Mr. McNeil’s qualifications to serve on our board of directors include: four decades of experience spanning various facets of the energy and technology sectors and a proven track record of driving growth and innovation, positioning Mr. McNeil as a key asset in our mission to deliver scalable and sustainable energy storage solutions.

  5. THE BOARD RECOMMENDS A VOTE

    THE BOARD RECOMMENDS A VOTE

  6. FOR THE ELECTION OF EACH OF THE ABOVE-NAMED CLASS I NOMINEES

    FOR THE ELECTION OF EACH OF THE ABOVE-NAMED CLASS I NOMINEES

  7. DIRECTORS

    DIRECTORS The following table sets forth the name, age as of March 1, 2024 and position of the nominees for election at the Annual Meeting and the other current directors of Eos Energy Enterprises, Inc. whose terms extend past the Annual Meeting. The following also includes certain information regarding our directors’ individual experience, qualifications, attributes and skills and brief statements of those aspects of our directors’ backgrounds that led us to conclude that they are qualified to serve as directors (information for Ms. Walters and Mr. McNeil is set forth above in “Proposal No. 1 Election of Directors”).

  8. DIRECTORS

    | Name | Age | Position | Independent | | Russell Stidolph (2) (3) | 48 | Independent Chair; Director | ☑ | | Jeff Bornstein (1) (2) | 58 | Director | ☑ | | Claude Demby (1) (3) | 59 | Director | ☑ | | Alex Dimitrief (1) (3) | 65 | Director | ☑ | | Joe Mastrangelo | 55 | Chief Executive Officer and Director | | | Jeffrey McNeil (1) (2) | 62 | Director | ☑ | | Marian “Mimi” Walters (2) (3) | 61 | Director | ☑ |

  9. DIRECTORS

    (1) Member of the Audit Committee (2) Member of the Leadership Development & Compensation Committee (3) Member of the Nominating and Corporate Governance Committee Russell Stidolph, 48, has served as a member of our Board since the closing of the Business Combination in 2020. He has also served as a director of Eos Energy Storage LLC (“EES LLC”) since 2014 and the chairman of the board of EES LLC since 2018, and continued in both positions following the closing of the Business Combination. Mr. Stidolph is the founder of AltEnergy, LLC a private equity firm focused on alternative energy investing, where he has served as Managing Director since 2006 and is the Chairman and CEO of AltEnergy Acquisition Corp. (NASDAQ: AEAE). He also serves as director of Hulett Bancorp. Prior to forming AltEnergy, Mr. Stidolph was a Principal at J.H. Whitney & Co., LLC, a middle-market private equity firm based in New Canaan, Connecticut. While at J.H. Whitney, Mr. Stidolph was responsible for starting and developing the firm’s alternative energy investing practice where he was responsible for Hawkeye Renewables, LLC and Iowa Winds, LLC. Mr. Stidolph was both the Chief Financial Officer and Vice Chairman of Hawkeye Renewables, LLC before it was sold in 2006 to Thomas H. Lee Partners, LP. Prior to joining J.H. Whitney, Mr. Stidolph was a member of the corporate finance group at PaineWebber, Inc., that was responsible for high yield and leverage finance origination. Mr. Stidolph also acted as Senior Vice President and the Chief Financial Officer of Tres Amigas, LLC and he still sits on the company’s board of directors, and was Chair of the board of directors of Viridity Energy, Inc. before it was sold to Ormat Technologies in 2017. Russell received a Bachelor of Arts degree from Dartmouth College. Mr. Stidolph’s qualifications to serve on our Board include: his background in financial investments, financial and risk management, equity capital markets and the renewable energy industry. Jeff Bornstein, 58, has served as a member of our Board since September 2022, and was recommended by both a non-management director and our chief executive officer. Mr. Bornstein is the founder, principal and co-managing partner of Whipstick Ventures LLC, an investment company focused on early-stage companies with novel solutions across energy storage and efficiency, services, biotech, and fin-tech. He also currently serves as the managing partner of Generation Capital Partners and sits on the board of AlloVir (NASDAQ: ALVR) as Chair of their Audit Committee. Before establishing Whipstick Ventures in 2018, Mr. Bornstein held pivotal roles at General Electric (GE), notably as Vice Chairman and Chief Financial Officer from 2013 to 2017. During his tenure, he led significant portfolio transformations, including divesting the Appliances division, merging GE Oil & Gas with Baker Hughes, and streamlining GE Capital's assets by over $300 billion. He also facilitated GE's acquisition of Alstom while implementing cost-saving measures. Mr. Bornstein's GE journey began in 1989 with the GE Power Systems' Financial Management Program. Over the years, he ascended through various finance roles within the company, notably serving as Senior Vice President and Chief Financial Officer of GE Capital for 12 years. His leadership during the financial crisis and transition to Federal Reserve regulation were instrumental in navigating challenging times. Beyond his corporate responsibilities, Mr. Bornstein is a trustee of Northeastern University, on the board of Build On, and is involved in a number of youth programs. He holds a B.S. in Business Administration from Northeastern University. Mr. Bornstein's appointment to our Board is underpinned by his extensive finance background, executive leadership experience, and deep industry knowledge, particularly in the energy sector. Claude Demby, 59, has served as a member of our Board since 2021. Mr. Demby has led complex global organizations through turnaround and fast growth periods with his extensive executive leadership experience within the automotive, aerospace and materials technology industries. He has established international operations and infrastructure throughout the world including Asia, Europe and the Americas during his career. Mr. Demby served as President of Cree LED, a lighting and industrials innovation company with 2,400 employees, 13 global locations servicing over 25,000 customers in 101 different countries from 2018 to 2022. In this role, Mr. Demby led the turnaround and growth of this recognized global brand delivering application optimized solutions worldwide. Prior to leading the LED business, Mr. Demby led Mergers and Acquisitions for Cree Inc., driving the M&A strategy establishing the foundation for Cree’s future growth platform into the power, communications and infrastructure sectors. Prior to leading M&A, Mr. Demby was the Senior VP and General Manager of the Cree’s Semiconductor Materials Business. Before joining Cree, Mr. Demby served as the CEO and Director of Noel Group, an industrial holding company owning 5 global businesses focused on the manufacture of synthetic materials. At Noel Group, Mr. Demby led the turnaround of this business across the globe establishing the strategy, processes and global footprint significantly improving company financial health and shareholder value. Before his role at Noel Group, Mr. Demby served as the President and COO of L&L Products Inc., a global automotive and aerospace OEM delivering solutions to reduce the noise and vibration while reinforcing application structural integrity. Mr. Demby led L&L Products through one of its fastest growth periods in the company’s history establishing operations throughout the world. Mr. Demby began his career in engineering roles with Proctor and Gamble and GE and has extensive public and private board experience. He currently serves as the Chair of Nominating and Governance Committee and Director on the board of Brown Capital Management Mutual Fund Trust; and as the Chair of the Nominating and Governance Committee, member of the Audit Committee, and Director on the board of Piedmont Lithium Incorporated (NASDAQ: PLL), a clean energy company, with prior service as a Director on the board of the Federal Reserve Bank of Richmond Charlotte branch from 2012 to 2017 including a period as Chairman. In addition to his professional experience and corporate board service, Mr. Demby has a strong record of community service through his founding and leadership of Valour Academy Schools Inc. Raleigh, past service on multiple leadership committees on Raleigh Chamber of Commerce Board including Chair Elect and past service as an advisor. Mr. Demby's qualifications to serve on our Board include: his extensive experience in industrial manufacturing, materials technology, executive level leadership as well as his experience in international operations.

  10. DIRECTORS

    Alex Dimitrief, 65, has served as a director since the closing of the Business Combination in 2020. Mr. Dimitrief is an experienced director, C-suite leader and general counsel who has steered varied energy-related and other global businesses through a wide range of complex commercial, legal, and organizational challenges. He has previously served as a director of both public and non-public companies including The We Company, Synchrony Financial (NYSE: SYF), SmileDirectClub (Nasdaq: SDC), and GE Capital Bank and presently sits on the Advisory Board of Cresset Capital Management. Since November 2022, Mr. Dimitrief has been serving as Senior Vice President and General Counsel of Sotera Health Co. (Nasdaq: SHC). Previously, as President and Chief Executive Officer of General Electric’s Global Growth Organization, Mr. Dimitrief was responsible for driving GE’s growth in more than 180 countries. Under Mr. Dimitrief’s watch in 2018, GE achieved $76 billion in international orders and secured billions in financing for many of GE’s emerging market customers. As GE’s General Counsel from 2015-2018, Mr. Dimitrief served as the principal executive advisor to GE’s board and led a global team responsible for GE’s legal matters, compliance, SEC reporting, government affairs and environmental safety programs. In previous roles at GE, Mr. Dimitrief was a leader of the transformation of GE Capital (including the IPO/split-off of Synchrony Financial) and led joint venture negotiations for GE Energy in China and Russia. In announcing Mr. Dimitrief’s retirement from GE in January 2019, Chief Executive Officer Larry Culp described Mr. Dimitrief as “one of the most respected leaders at GE” who “effectively represented GE before governments, regulators, and customers throughout the world and is widely recognized as a compelling champion of integrity, transparency and the rule of law.” In 2007, Mr. Dimitrief came to GE after 20 years as a senior partner at Kirkland & Ellis LLP, where he “first chaired” and regularly advised boards about securities, restructuring, intellectual property, product liability, environmental, governance and commercial disputes. Mr. Dimitrief earned his B.A. from Yale College and his J.D. from Harvard Law School. Mr. Dimitrief’s qualifications to serve on our board of directors include: his lengthy executive and board experiences, as well as his expertise in managing risk, legal compliance, governance, and other functions at mature companies with large workforces. Joe Mastrangelo, 55, has served as a director and the Chief Executive Officer since the closing of the Business Combination in 2020. He joined EES LLC as a Board advisor in March 2018 and assumed the role of Chief Executive Officer from August 2019 until the closing of the Business Combination. Before coming to Eos, Mr. Mastrangelo was president and chief executive officer of General Electric's Gas Power Systems since September 2015. As an energy industry leader for the past two decades, Mr. Mastrangelo has extensive experience leading diverse teams to develop and deploy commercial scale projects around the world. Mr. Mastrangelo has broad operating experience across the energy value chain including serving as Chief Executive Officer of GE’s Power Conversion business, applying science and systems of power conversion to increase the efficiency of the world’s energy infrastructure. Mr. Mastrangelo spent ten years with GE Oil & Gas, in leadership roles in finance, quality, and commercial operations, culminating in being named a GE Corporate Officer in 2008. Joe began his career with GE in the company’s Financial Management Program and then joined GE’s Corporate Audit Staff. Originally from New York, Mr. Mastrangelo earned a Bachelor of Science in Finance from Clarkson University and an Associate of Science, Business Administration and Management from Westchester Community College. Mr. Mastrangelo’s qualifications to serve on our Board include: his extensive experience in operations management at executive level positions, as well as his educational background in finance and business.

  11. DIRECTOR COMPENSATION TABLE

    DIRECTOR COMPENSATION TABLE The following table sets forth information concerning the compensation earned by each of our non-employee directors during the fiscal year ended December 31, 2023. Mr. Mastrangelo does not earn any additional compensation for service on our Board.

  12. DIRECTOR COMPENSATION TABLE

    | Name and Principal Position | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(2) ($) | All Other Compensation ($) | Total ($) | | Russell Stidolph | 25,000 | 75,000 | 125,229 | — | 225,229 | | Alex Dimitrief | 25,000 | 75,000 | 100,184 | — | 200,184 | | Audrey Zibelman | 25,000 | 75,000 | 75,138 | — | 175,138 | | Marian "Mimi" Walters | 25,000 | 75,000 | 75,138 | — | 175,138 | | Claude Demby | 25,000 | 75,000 | 75,138 | — | 175,138 | | Jeff Bornstein | 25,000 | 75,000 | 125,229 | — | 225,229 | | Jeffrey McNeil (3) | 6,250 | 75,000 | 75,192 | — | 156,442 |

  13. DIRECTOR COMPENSATION TABLE

    (1) Represents the grant date fair value of restricted stock unit awards, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For a discussion of the valuation methodology used, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in the Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the stock awards by the non-employee directors. The aggregate number of stock awards (in the form of restricted stock units) outstanding for our non-employee directors as of December 31, 2023 was: Mr. Stidolph: 32,328, Mr. Dimitrief: 32,328, Ms. Zibelman: 32,328, Ms. Walters: 32,328, Mr. Demby: 32,328, Mr. Bornstein: 32,328, and Mr. McNeil: 36,232. (2) Represents the grant date fair value of option awards, computed in accordance with FASB ASC Topic 718. Grant date fair value is calculated based on the Black-Scholes option pricing model. For information regarding the assumptions used in determining the grant date fair value, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in the Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the option awards by the named executive officers. The aggregate number of option awards outstanding for our non-employee directors as of December 31, 2023 was: Mr. Stidolph: 594,246, Mr. Dimitrief: 272,647, Ms. Zibelman: 245,488, Ms. Walters: 245,488, Mr. Demby: 231,175, Mr. Bornstein: 213,718, and Mr. McNeil: 82,452. (3) Mr. McNeil was appointed to the Board effective October 6, 2023.

  14. Director Compensation

    Director Compensation On December 8, 2020, our compensation committee approved our Non-Employee Director Compensation Policy (the “Director Compensation Policy”). Under the Director Compensation Policy, each non-employee director is eligible to receive (i) an annual cash retainer equal to $25,000, payable in equal quarterly installments in arrears, and (ii) an annual equity-based retainer (the “Equity Retainer”) with a grant date fair value of $150,000, payable 50% in restricted stock units and 50% in stock options. The Equity Retainers vest, subject to continued service, on the earlier of (i) the one-year anniversary of the grant date and (ii) immediately prior to the date of the next annual stockholders meeting of the Company following the grant date (with accelerated vesting upon a change in control). In addition, all members of our Board will be reimbursed for their costs and expenses in attending Board meetings. On September 7, 2022, the Board approved certain amendments to the Director Compensation Policy, which provide for additional equity compensation, in the form of stock options, to be paid to any chairperson of the Board or one of its committees (the “Chairperson Grants”). The chairperson of the Board or the Audit Committee are eligible to receive a Chairperson Grant valued at $50,000 and the chairperson of the compensation committee or the nominating committee are eligible to receive a Chairperson Grant valued at $25,000. The Chairperson Grants will be effective beginning with the service year beginning at the Annual Meeting. Equity Retainers for 2023 were granted to our non-employee directors on May 18, 2023 and October 6, 2023. In the future, Equity Retainers and Chairperson Grants will generally be granted on the second trading day following each annual meeting of our stockholders. Any individual that becomes a non-employee director for the first time other than by election or appointment at an annual meeting of our stockholders will be granted an Equity Retainer in connection with his or her appointment and will be eligible to receive an Equity Retainer with the next annual stockholders meeting so long as such annual stockholders meeting is more than four calendar months from the date such individual becomes a non-employee director. The Equity Retainer and Chairperson Grants will be granted pursuant to our 2020 Plan.

  15. Summary Compensation Table

    Summary Compensation Table The following table presents summary information regarding the total compensation paid to, earned by and awarded to each of our NEOs for the fiscal year ended December 31, 2023.

  16. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan and Compensation ($) | All Other Compensation (3) ($) | Total ($) | | Joe Mastrangelo, Chief Executive Officer | 2023 | 650,000 | — | 3,250,000 | — | 292,500 | 129,698 | 4,322,198 | | | 2022 | 648,929 | — | — | 298,568 | 162,500 | 125,302 | 1,235,299 | | Nathan Kroeker(4), Chief Financial Officer | 2023 | 415,385 | — | 2,620,000 | — | 105,750 | 1,163 | 3,142,298 | | Melissa Berube, General Counsel, Chief Compliance Officer and Corp. Secretary | 2023 | 334,750 | — | 552,339 | — | 75,319 | 744 | 963,152 | | | 2022 | 332,723 | — | 259,500 | 158,704 | 41,683 | — | 792,610 |

  17. Summary Compensation Table

    (1) Represents the grant date fair value of restricted stock unit awards, computed in accordance with FASB ASC Topic 718. For a discussion of the valuation methodology used, see Note 17, “Stock-Based Compensation” of the notes to Eos Energy Enterprises, Inc. consolidated financial statements included in our Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the stock awards by the NEOs. (2) Represents the grant date fair value of option awards, computed in accordance with FASB ASC Topic 718. Grant date fair value is calculated based on the Black-Scholes option pricing model. For information regarding the assumptions used in determining the grant date fair value, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in our Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the option awards by the NEOs. (3) Amounts in this column reflect for Mr. Mastrangelo (i) for fiscal 2023, $66,800 in residential expenses, $7,301 in a car allowance, and $51,985 in travel expense reimbursement and (ii) for fiscal 2022, $6,120 in a car allowance, $54,750 in residential expenses and $64,432 in travel expense reimbursement. Additionally, amounts of $3,612, $1,163, and $744 for Mr. Mastrangelo, Mr. Kroeker, and Ms. Berube, respectively as earnings reported for the Company’s Group Term Life policy. (4) Mr. Kroeker was appointed Chief Financial Officer on January 23, 2023.

  18. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning outstanding equity awards for our NEOs as of the end of our fiscal year ended December 31, 2023.

  19. Outstanding Equity Awards at Fiscal Year-End

    | | | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) (1) | | Joe Mastrangelo | 10/23/2020 (2) | 691,656 | — | — | $8.67 | 6/30/2025 | — | — | | | 10/23/2020 (3) | 345,828 | — | — | $8.67 | 10/23/2030 | — | — | | | 2/26/2021 (4) | — | — | — | — | — | 250,000 | $272,500 | | | 6/16/2022 (5) | 200,000 | — | — | $1.34 | 6/16/2032 | — | — | | | 7/5/2023 (6) | — | — | — | — | — | 762,911 | $831,573 | | Nathan Kroeker | 1/23/2023 (7) | — | — | — | — | — | 300,000 | $327,000 | | | 7/3/2023 (8) | — | — | — | — | — | 160,829 | $175,304 | | | 7/5/2023 (9) | — | — | — | — | — | 315,024 | $343,376 | | Melissa Berube | 7/28/2021 (10) | — | — | — | — | — | 25,000 | $27,250 | | | 2/9/2022 (11) | — | — | — | — | — | 50,000 | $54,500 | | | 6/16/2022 (12) | 200,000 | — | — | $1.34 | 6/16/2032 | — | — | | | 7/5/2023 (13) | — | — | — | — | — | 129,657 | $141,326 |

  20. Outstanding Equity Awards at Fiscal Year-End

    (1) The market value is calculated by multiplying the closing price of the Company's common stock on December 29, 2023, which was $1.09, by the number of restricted stock units that had not vested. (2) 691,656 of the shares of common stock subject to this option vested upon Mr. Mastrangelo's continued employment through the vesting dates of June 22, 2021, June 22, 2022 and June 22, 2023. (3) 345,828 of the shares of common stock subject to this option vested upon the Board's determination that the Company had successfully closed an equity financing transaction prior to June 22, 2023 in connection with the merger agreement with BMRG. (4) The RSUs vest in three equal installments on each of January 3, 2022, January 2, 2023 and January 1, 2024, subject to continued service through each vesting date. (5) The stock options vest in two equal installments based on the achievement of certain performance conditions during specified time periods (each, a "Milestone Event"), with the full vesting of the applicable tranche of stock options to occur 60 days after the achievement of the applicable Milestone Event. The first of the Milestone Events was achieved on July 29, 2022 and the stock options with respect to 200,000 shares of common stock became fully vested and exercisable on the 60th day following the date of the achievement of the Milestone Event, subject to Mr. Mastrangelo's continued employment with the issuer through such date. The remaining 200,000 stock options pertaining to the second of the Milestone Events were forfeited on December 30, 2022. (6) The RSUs vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026, subject to continued service through each vesting date. (7) The RSUs vest in three equal installments on each of January 23, 2024, January 23, 2025 and January 23, 2026, subject to continued service through each vesting date. (8) The RSUs vest in three equal installments on each of July 3, 2024, July 3, 2025 and July 3, 2026, subject to continued service through each vesting date. (9) The RSUs vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026, subject to continued service through each vesting date. (10) The RSUs were originally scheduled to vest in three equal installments on each of June 15, 2022, June 15, 2023 and June 15, 2024. In connection with Ms. Berube's resignation effective January 31, 2024, 25,000 RSUs were accelerated. (11) The RSUs were originally scheduled to vest in three equal installments on each of February 9, 2023, February 9, 2024 and February 9, 2025. In connection with Ms. Berube's resignation effective January 31, 2024, 50,000 RSUs were accelerated. (12) The stock options vest in two equal installments based on the achievement of a Milestone Event, with the full vesting of the applicable tranche of stock options to occur 60 days after the achievement of the applicable Milestone Event. The first and second of the Milestone Events were achieved on July 29, 2022 and August 31, 2023, respectively, and the stock options with respect to 200,000 shares of common stock became fully vested and exercisable on the 60th day following the date of the achievement of the Milestone Events, subject to Ms. Berube's continued employment with the issuer through such date. In connection with Ms. Berube's resignation, her previously granted performance options were amended to allow for the vested options to remain outstanding until the earlier of Ms. Berube’s exercising the options or the expiration of the options on June 16, 2032. (13) The RSUs were originally scheduled to vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026. In connection with Ms. Berube's resignation effective January 31, 2024, 129,657 RSUs were accelerated.

  21. Pay Versus Performance

    Pay Versus Performance The following table sets forth the compensation for our Chief Executive Officer and the average compensation for our other NEOs, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC rules, for each of 2023, 2022 and 2021. The table also provides information on our cumulative total shareholder return (“TSR”) and Net Income.

  22. 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 Named Executive Officers(1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(3) | Net Income (Loss) (in Thousands)(4) | | 2023 | $4,322,198 | $1,956,453 | $2,052,725 | $1,039,489 | $4.88 | $(229,506) | | 2022 | $1,235,299 | $(3,054,439) | $1,770,017 | $490,324 | $6.62 | $(229,813) | | 2021 | $16,678,672 | $2,432,410 | $3,177,554 | $1,770,916 | $33.65 | $(124,216) |

  23. Pay Versus Performance

    (1) Compensation for our PEO, Joe Mastrangelo, reflects the amounts reported in the “Summary Compensation Table” for the respective years. Average compensation for non-PEOs includes the following NEOs: (i) in 2023, Nathan Kroeker and Melissa Berube, (ii) in 2022, Randall Gonzales and Melissa Berube, and (iii) in 2021, Sagar Kurada and Jody Markopoulos. (2) Compensation “actually paid” for the PEO and average compensation “actually paid” for our non-PEOs in 2023 reflects the respective amounts set forth in columns (b) and (d), adjusted as follows in the table below, as determined in accordance with SEC rules. These dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO and our other NEOs during the applicable year. (3) Total Shareholder Return is cumulative for the measurement periods beginning on December 31, 2020 and ending on December 31 of each of 2023, 2022, and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K. (4) Reflects “Net Income” in the Company’s Consolidated Statements of Income included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022 and 2021, respectively.

  24. Pay Versus Performance

    | | PEO 2023 | Non-PEOs 2023 | | Summary Compensation Table Total | $4,322,198 | $2,052,725 | | Less Stock Award and Option Award Value Reported in Summary Compensation Table for the Covered Year | (3,250,000) | (1,586,169) | | Plus Fair Value for Unvested Awards Granted in the Covered Year | 831,573 | 493,503 | | Change in Fair Value of Outstanding Unvested Awards from Prior Years | (97,500) | (29,250) | | Plus Fair Value for Vested Awards Granted in the Covered Year | — | 63,600 | | Change in Fair Value of Awards from Prior Years that Vested in the Covered Year | 150,182 | 45,080 | | Less Fair Value of Awards Forfeited during the Covered Year | — | — | | Compensation Actually Paid | $1,956,453 | $1,039,489 |

  25. Pay Versus Performance

    Note: Fair values set forth in the table above are computed in accordance with ASC 718 as of the end of the respective fiscal year, other than fair values of awards that vest in the covered year, which are valued as of the applicable vesting date.

  26. Relationship Between Compensation Actually Paid and Cumulative TSR

    Relationship Between Compensation Actually Paid and Cumulative TSR The amount of compensation actually paid to the PEO and the average amount of compensation actually paid to the non-PEO NEOs have generally aligned with the Company’s cumulative TSR over the three-year period presented in the table. From January 1, 2021 to December 31, 2023, cumulative TSR decreased by approximately 95%. For the three-years presented, the decline in both compensation actually paid and cumulative TSR are primarily driven by the decline in the Company's stock price from $22.35 as of December 31, 2020, $7.52 as of December 31, 2021, $1.48 as of December 31, 2022, to $1.09 as of December 31, 2023. Stock price is a large driver in the value of the equity incentive awards, which is a major component of compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs.