DEF 14A of Cipher Digital Inc., Apr 21, 2025

DEF 14A of Cipher Digital Inc.

Filed Apr 21, 2025 · FY20240001819989-25-000027

Open on EDGAR

  1. TO BE HELD ON JUNE 3, 2025

    | | Page | | PAY VERSUS PERFORMANCE | | | Relationship between Compensation Actually Paid Versus Cumulative TSR of Company | 30 | | Relationship between Compensation Actually Paid Versus Net Loss | 31 | | STOCK OWNERSHIP | 32 | | Security Ownership of Certain Beneficial Owners and Management | 32 | | CERTAIN TRANSACTIONS WITH RELATED PERSONS | 34 | | Policies and Procedures for Approval of Related Person Transactions | 34 | | Board Observer Agreement | 34 | | Director and Officer Indemnification | 34 | | STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS | 35 | | HOUSEHOLDING | 36 | | 2024 ANNUAL REPORT | 37 |

  2. PROPOSAL NO. 1 ELECTION OF DIRECTORS

    PROPOSAL NO. 1 ELECTION OF DIRECTORS

  3. Board Size and Structure

    Board Size and Structure Our second amended and restated certificate of incorporation, as currently in effect (“Certificate of Incorporation”) provides that the number of directors shall be established from time to time by our Board of Directors. Our Board of Directors has fixed the number of directors at eight, and we currently have eight directors serving on the Board. Mr. Robert Dykes is not standing for re-election at the Annual Meeting and his term as a director will end at the Annual Meeting. The Board expresses appreciation to Mr. Dykes for his years of service to the Board. The Board has also authorized the size of the Board to be reduced to seven members effective immediately at the Annual Meeting. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal. Our Certificate of Incorporation provides that the Board be divided into three classes, designated as Class I, Class II and Class III. Each class of directors must stand for re-election no later than the third annual meeting of stockholders subsequent to their initial appointment or election to the Board, provided that the term of each director will continue until the election and qualification of his or her successor and is subject to his or her earlier death, resignation or removal. Generally, vacancies or newly created directorships on the Board will be filled only by vote of a majority of the directors then in office although less than a quorum, or by a sole remaining director. A director appointed by the Board to fill a vacancy will hold office until the next election of the class for which such director was chosen, subject to the election and qualification of his or her successor and his or her earlier death, resignation, retirement, disqualification or removal.

  4. Current Directors and Terms

    Current Directors and Terms Our current directors and their respective classes and terms are set forth below.

  5. Current Directors and Terms

    | Class I Directors – Current Term Ending at 2025 Annual Meeting | Class II Directors – Current Term Ending at 2026 Annual Meeting | Class III Directors – Current Term Ending at 2027 Annual Meeting | | Robert Dykes | Holly Morrow Evans | Tyler Page | | Robert Flatley | James Newsome | Cary Grossman | | Caitlin Long | Wesley Williams | |

  6. Nominees for Director

    Nominees for Director Mr. Flatley and Ms. Long have been nominated by the Board to stand for re-election at the Annual Meeting. As the directors assigned to Class I, each of Mr. Flatley and Ms. Long's current terms of service will expire at the Annual Meeting. If elected by the stockholders at the Annual Meeting, Mr. Flatley and Ms. Long will each serve for a term expiring at our annual meeting of stockholders to be held in 2028 (the “2028 Annual Meeting”) and the election and qualification of his or her successor or until his or her earlier death, resignation or removal. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve. If, however, prior to the Annual Meeting, the Board of Directors should learn that any nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for this nominee will be voted for a substitute nominee as selected by the Board. Alternatively, the proxies, at the Board’s discretion, may be voted for that fewer number of nominees as results from the inability of any nominee to serve. The Board has no reason to believe that any of the nominees will be unable to serve.

  7. Information About Board Nominees and Continuing Directors

    Information About Board Nominees and Continuing Directors The following pages contain certain biographical information as of the date hereof for each nominee for director and each director whose term as a director will continue after the Annual Meeting, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the director or nominee currently serves as a director or has served as a director during the past five years. We believe that all of our directors and nominees display personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of our Board of Directors and its committees, as applicable; skills and personality that complement those of our other directors that helps build a board that is effective, collegial and responsive to the needs of our Company; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below regarding each nominee and continuing director also sets forth specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure.

  8. Nominees for Election to Three-Year Terms Expiring No Later than the 2028 Annual Meeting

    Nominees for Election to Three-Year Terms Expiring No Later than the 2028 Annual Meeting

  9. Nominees for Election to Three-Year Terms Expiring No Later than the 2028 Annual Meeting

    | Class I Directors | Age | Director Since | Current Position at Cipher | | Robert Flatley | 62 | 2023 | Director | | Caitlin Long | 55 | 2021 | Director |

  10. Nominees for Election to Three-Year Terms Expiring No Later than the 2028 Annual Meeting

    Robert Flatley has served on our board of directors since August 2023. Since 2021, Mr. Flatley has served as a director, the Chief Executive Officer and founder of TS Imagine, which was formed following the merger of Trading Screen and Imagine Software. From 2018 to 2019, Mr. Flatley served as a director and as President, Chief Financial Officer and Chief Operating Officer at New York Digital Investment Group (NYDIG). From 2010 to 2018, he served as a director and Chief Executive Officer of CoreOne Technologies. Earlier in his career, Mr. Flatley was a Managing Director at both Deutsche Bank Securities, and at Banc of America Securities. He has hands-on experience in various capital markets roles, including trading, securities and prime finance, building SaaS business models, market structure, quantitative trading, software development, and software M&A. He founded successful companies as a technology entrepreneur using both software and data-as-a-service models, and he was a founding employee of two statistically driven trading businesses at bulge bracket financial institutions. He earned a B.B.A. in Accounting from the University of Iowa in 1985. We believe that Mr. Flatley is well qualified to serve on our board of directors due to his extensive experience in regulated financial services institutions and as a founder of four successful fintech companies. Caitlin Long has served as a member of our board of directors since August 2021. Ms. Long has extensive experience in both traditional financial services and cryptocurrencies. She is the Founder and Chief Executive Officer of Custodia Bank, Inc. (formerly Avanti Financial Group, Inc.), a chartered bank that she founded in 2020 to serve as a compliant bridge between the U.S. dollar and cryptocurrency financial systems. From 2016 to 2018, Ms. Long served as the Chairman and President of Symbiont.io, an enterprise fintech company that utilizes blockchain technology. Beginning in 2017 she helped lead the charge in her native state of Wyoming to enact more than 20 blockchain‑enabling laws during consecutive legislative sessions, and in 2018 she was appointed by two Wyoming Governors to serve on related legislative committees. She worked at investment banks in New York and Zurich from 1994 to 2016, where she held senior roles as a Managing Director at Morgan Stanley and Credit Suisse. Ms. Long earned a B.A. from the University of Wyoming and a joint J.D./ M.P.P. degree from Harvard Law School and Harvard Kennedy School of Government. We believe that Ms. Long is well qualified to serve on our board of directors due to her extensive digital asset experience, her legal and regulatory expertise, and her prior experience working with public companies.

  11. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

  12. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    | Class II Directors | Age | Director Since | Current Position at Cipher | | Holly Morrow Evans | 49 | 2021 | Director | | James Newsome | 65 | 2021 | Chairman of the Board | | Wesley Williams | 48 | 2021 | Director |

  13. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    Holly Morrow Evans has served on our board of directors since August 2021. Since 2015, Mrs. Evans has been a partner at Hakluyt and Company, where she currently serves as the firm’s Deputy Managing Partner. Previously, she also served as the firm's Head of Risk. From 2007 to 2013, she was a senior adviser for ExxonMobil. She also served as director on the National Security Council from 2005 to 2007 and as China advisor to the office of the Vice President from 2003 to 2005. Mrs. Evans holds a B.A. in Political Science from Georgetown and an M.A. in Asian Studies from Harvard University. We believe that Mrs. Evans is well qualified to serve on our board of directors due to her extensive advisory experience. James Newsome has served as a member of our board of directors since August 2021. Mr. Newsome served on the advisory board of Bitfury Top HoldCo from 2015 until 2021. Mr. Newsome served as president of the New York Mercantile Exchange from August of 2004 until it was acquired by the CME Group in 2009. He subsequently served on the board of CME Group from 2009 until 2011. Mr. Newsome has also previously served on the board of directors of the Dubai Mercantile Exchange and is a former director of the National Futures Association. From 1998 until 2004, Mr. Newsome held various senior roles at the U.S. Commodity Futures Trading Commission (“CFTC”) from Commissioner (1998 to 2000) to a Chairman of CFTC (2000 to 2004). As a Chairman of CFTC, Mr. Newsome guided the regulation of the nation’s futures markets and led the CFTC’s regulatory implementation of the Commodity Futures Modernization Act of 2000. He also served as one of four members of the President’s Working Group for Financial Markets, along with the Secretary of the Treasury and the Chairmen of the Federal Reserve and the Securities and Exchange Commission ("SEC"). Mr. Newsome is also presently a founding partner of Delta Strategy Group, a full‑service government affairs firm based in Washington, D.C. He earned a B.S. in Economics from the University of Florida, a Masters in Genetics from Mississippi State University and a Ph.D. in Economics from Mississippi State University. We believe that Mr. Newsome is well qualified to serve on our board of directors due to his extensive corporate finance and management experience. Wesley Williams has served on our board of directors since August 2021. Mr. Williams brings over 25 years of experience in corporate finance. Since 2021, Mr. Williams has served as the Head of Aquarian Credit Partners, the syndicated high yield credit investing arm of insurance holding company Aquarian Holdings. Beginning in 2017, he served as Portfolio Manager, Chief Operating Officer, and a member of the Board of Managers of Gallatin Loan Management, a high yield credit investment management firm. From 2013 until 2016, Mr. Williams was a founding partner of Hildene Leveraged Credit, until its sale to affiliates of Fortress Investment Group. From 2010 through 2012, he worked as a turnaround Operating Partner, Interim CFO, and Shareholder Representative for Goldman Sachs portfolio companies. From 2006 until 2008, Mr. Williams worked as a Vice President of specialty finance and leveraged credit at Marathon Asset Management, a high yield credit investment manager. From 1999 through 2005, Mr. Williams also held various roles in the Investment Banking and Merchant Banking Divisions of Goldman Sachs. He holds an AB in Sociology from Harvard College and an MBA from Harvard Business School. We believe that Mr. Williams is well qualified to serve on our board of directors due to his extensive corporate finance and overall management experience.

  14. Class III Directors Whose Terms Expire at the 2027 Annual Meeting of Stockholders

    Class III Directors Whose Terms Expire at the 2027 Annual Meeting of Stockholders

  15. Class III Directors Whose Terms Expire at the 2027 Annual Meeting of Stockholders

    | Class III Directors | Age | Director Since | Current Position at Cipher | | Tyler Page | 49 | 2021 | Chief Executive Officer and Director | | Cary Grossman | 71 | 2021 | Director |

  16. Class III Directors Whose Terms Expire at the 2027 Annual Meeting of Stockholders

    Tyler Page has served as Cipher’s Chief Executive Officer and as a member of the Board since August 2021. From 2020 to 2021, Mr. Page served as Head of Business Development for digital asset infrastructure at Bitfury Holding, where he was responsible for business development and strategic planning work of the Bitfury Group. He brings more than 20 years of experience in institutional finance and fintech, including as a member of the Management Committee and Head of Client Strategies at New York Digital Investment Group (NYDIG), from 2017 to 2019, and as Head of Institutional Sales at Stone Ridge Asset Management, from 2016 to 2019. Previously, he served as Global Head of Business Development for Fund Solutions at Guggenheim Partners in New York and London, as well as in various roles on derivatives teams at Goldman Sachs and Lehman Brothers. He began his career as an attorney at Davis Polk & Wardwell LLP. He holds a J.D. from the University of Michigan Law School and a B.A. from the University of Virginia. Cary Grossman has served as a member of our board of directors since August 2021. Mr. Grossman co-founded GWAC in 2020 and served as its President and a member of its board of directors from June 2020 through August 2021. Mr. Grossman also served as CEO, President, Chief Financial Officer and a member of the board of directors of Good Works II Acquisition Corp. during the period from February 2021 through February 2023. Mr. Grossman is a veteran corporate finance professional with a combination of executive management, investment banking and public accounting experience. In 2010, Mr. Grossman co-founded Shoreline Capital Advisors, Inc., an advisory firm focused on providing financial advisory services to middle-market companies. Prior to Shoreline Capital Advisors, from 1991 to 2002, Mr. Grossman co-founded and was the CEO of another investment banking firm, McFarland, Grossman & Company. Earlier in his career, he practiced public accounting for 15 years. Mr. Grossman also held a number of executive positions, including: President of XFit, Inc. from 2019 to 2020; Chief Financial Officer of Blaze Metals, LLC from 2007 to 2010; Executive Vice President, Chief Financial Officer and Chief Operating Officer of Gentium, S.P.A. from 2004 to 2006; Chief Executive Officer of ERP Environmental Services, Inc. and Chief Financial Officer of U.S. Liquids, Inc. from 2001 to 2003. He also co-founded Pentacon, Inc. (NYSE: JIT) and served as a board member and Executive Chairman from 1998 until 2002, and as a director of Metalico (NYSE: MEA) from 2014 until 2015 and INX Inc. (Nasdaq: INXI) from 2004 until 2011. Mr. Grossman is a Certified Public Accountant and earned a B.B.A. in Business Administration from the University of Texas. We believe that Mr. Grossman is well qualified to serve on our board of directors due to his extensive corporate finance and management experience and his overall public company experience. The Board of Directors unanimously recommends a vote FOR the election of each of Robert Flatley and Caitlin Long as a Class I director to hold office until the 2028 Annual Meeting and until his or her successor has been duly elected and qualified until his or her earlier death, resignation or removal.

  17. Compensation Consultants

    Compensation Consultants As mentioned above, the Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In 2024, the Compensation Committee engaged each of Pay Governance LLC ("Pay Governance") and Semler Brossy Consulting Group, LLC ("Semler Brossy") as a consultant and advisor to provide information on competitive market pay practices for senior executives, as described in further detail under “Executive and Director Compensation, Equity Awards – Elements of Our Executive Compensation Program.” Neither Pay Governance nor Semler Brossy maintained any other direct or indirect business relationships with the Company or any of its affiliates. The Compensation Committee reviewed the independence of Pay Governance and Semler Brossy, including the factors required by Nasdaq and the SEC, and determined that the services provided by Pay Governance and Semler Brossy did not raise any conflicts of interest.

  18. EXECUTIVE AND DIRECTOR COMPENSATION

    EXECUTIVE AND DIRECTOR COMPENSATION This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2024, our “named executive officers” and their positions were as follows: •Rodney Tyler Page, Chief Executive Officer; •Edward Farrell, Chief Financial Officer; •Patrick Kelly, Co-President and Chief Operating Officer; and •William Iwaschuk, Co-President, Chief Legal Officer and Corporate Secretary. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from the currently planned programs summarized in this discussion.

  19. Summary Compensation Table

    Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2024 and December 31, 2023.

  20. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | | Rodney Tyler Page | 2024 | 825,000 | 1,650,000 | 14,858,933 | 13,800 | 17,347,733 | | Chief Executive Officer | 2023 | 562,500 | 2,485,000 | 2,600,000 | 9,000 | 5,656,500 | | Edward Farrell | 2024 | 525,000 | 787,500 | 3,467,086 | 12,925 | 4,792,511 | | Chief Financial Officer | 2023 | 362,500 | 1,242,083 | 1,300,000 | 8,389 | 2,912,972 | | Patrick Kelly | 2024 | 525,000 | 787,500 | 4,457,679 | 13,800 | 5,783,979 | | Co-President and Chief Operating Officer | 2023 | 362,500 | 1,242,083 | 1,300,000 | 9,778 | 2,914,361 | | William Iwaschuk | 2024 | 525,000 | 787,500 | 4,457,679 | 5,250 | 5,775,429 | | Co-President, Chief Legal Officer and Corporate Secretary | 2023 | 362,500 | 1,242,083 | 1,300,000 | 11,319 | 2,915,902 |

  21. Summary Compensation Table

    __________________________________________ (1)Amounts reflect the actual base salaries paid to each named executive officer in respect of fiscal years 2024 and 2023. (2)Amounts reflect (i) 2024 annual bonus awards granted in recognition of performance in 2024, which were paid on January 15, 2025, (ii) 2023 annual bonus awards granted in recognition of performance in 2023, which were paid on February 15, 2024 and (iii) discretionary cash bonus awards paid in 2023. The aggregate amount of annual bonus awards paid to each named executive officer for 2024 was $1,650,000 to Mr. Page and $787,500 each to Messrs. Farrell, Kelly and Iwaschuk. The amount of annual bonus awards paid to each named executive officer in 2023 was $1,485,000 to Mr. Page, $708,750 to Messrs. Farrell, Kelly and Iwaschuk. The amount of discretionary cash bonus awards paid to each named executive officer in 2023 was $1,000,000 to Mr. Page, and $533,333 to Messrs. Farrell, Kelly and Iwaschuk. (3)Amounts reflect the full grant-date fair value of restricted stock unit, or RSU, awards granted during 2024 and 2023 computed in accordance with ASC Topic 718. The RSUs granted to the named executive officers in 2024 and 2023 were subject to service-based vesting conditions. For information regarding the assumptions used to calculate the value of all RSU awards made to named executive officers, see “Notes to Consolidated Financial Statements – Note 17. Share-Based Compensation” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and for the fiscal year ended December 31, 2023. (4)Amounts reflect matching contributions made to each named executive officer’s 401(k) plan account in 2024 and 2023.

  22. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2024.

  23. Outstanding Equity Awards at Fiscal Year-End

    | | Stock Awards | | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Rodney Tyler Page | 3/9/2024 | 3,134,796 | 14,545,453 | — | — | | | 6/14/2023 | 666,666(2) | 3,093,330 | — | — | | | 9/13/2022 | 166,667(3) | 773,335 | — | — | | | 11/17/2021 | —(4) | — | 4,257,710(4) | 19,755,774 | | Edward Farrell | 3/9/2024 | 731,453 | 3,393,942 | — | — | | | 6/14/2023 | 333,334(2) | 1,546,670 | — | — | | | 9/13/2022 | 366,667(3) | 1,701,335 | — | — | | Patrick Kelly | 3/9/2024 | 940,440 | 4,363,642 | — | — | | | 6/14/2023 | 333,334(2) | 1,546,670 | — | — | | | 9/13/2022 | 366,667(3) | 1,701,335 | — | — | | William Iwaschuk | 3/9/2024 | 940,440 | 4,363,642 | — | — | | | 6/14/2023 | 333,334(2) | 1,546,670 | — | — | | | 9/13/2022 | 366,667(3) | 1,701,335 | — | — |

  24. Outstanding Equity Awards at Fiscal Year-End

    __________________________________________ (1)Amounts are calculated by multiplying the number of RSUs shown in the table by $4.64, the closing market price of our stock on December 31, 2024. (2)Represents all of the June 2023 RSUs that vest on each of June 14, 2025 and June 14, 2026. (3)Represents all of the Special Retention RSUs that vest on September 13, 2025. (4)Represents all of the performance-based RSUs granted to Mr. Page, calculated based on the achievement of the following performance goals: one-third of the performance-based RSUs will vest upon the company achieving a market capitalization equal to or exceeding $5 billion, $7.5 billion and $10 billion, in each case over a 30-day lookback period and subject to Mr. Page’s continuous service through the end of the applicable 30-day period.

  25. Director Compensation

    Director Compensation The following table provides information concerning compensation awarded to, earned by and paid to each person who served as a non-employee member of our board of directors during the fiscal year ended December 31, 2024. Mr. Page is not included in the table below as he is employed as our Chief Executive Officer and receives no compensation for his service as a director. The compensation received by Mr. Page as an employee is shown in “Executive Compensation-Summary Compensation Table” above.

  26. Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | James Newsome | 206,250 | 217,976 | 424,226 | | Robert Dykes | 170,625 | 217,976 | 388,601 | | Holly Morrow Evans | 158,750 | 217,976 | 376,726 | | Robert Flatley | 161,250 | 217,976 | 379,226 | | Cary Grossman | 171,875 | 217,973 | 389,848 | | Caitlin Long | 151,875 | 217,976 | 369,851 | | Wesley Williams | 161,250 | 217,976 | 379,226 |

  27. Director Compensation

    __________________________________________ (1)Amounts reflect the annual cash retainers that the non-employee directors earned for their service in respect of 2024 under our non-employee director compensation policy. (2)Amounts reflect the full grant-date fair value of stock awards granted during 2024 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. For information regarding the assumptions used to calculate the value of all stock awards made to our directors see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Policies—Share-based compensation.” No non-employee directors held unvested stock awards as of December 31, 2024. Under our amended and restated non-employee director compensation policy (the “Director Compensation Policy”), each non-employee director is entitled to a $150,000 annual cash retainer, and the lead independent director is also entitled to a $75,000 additional annual cash retainer. The chairs of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are entitled to an additional annual cash retainer of $25,000, $25,000, and $15,000, respectively and any non-employee director serving as a member of the Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee (other than the chairs of the respective committees) are entitled to an additional annual retainer of $12,500, $12,500 and $10,000, respectively. The cash fees are paid to non-employee directors quarterly in arrears and will be pro-rated for any quarter of partial service. In addition to such cash compensation, under the Director Compensation Policy, at each annual meeting of our stockholders, non-employee directors who serve on the board as of the annual meeting and will continue to serve on the board following the annual meeting (including non-employee directors who are elected to serve on the board at the annual meeting) will receive an equity award of fully vested shares of our common stock that has a grant date value of $200,000. If a non-employee director is initially elected to the board on a date other than the annual meeting, the non-employee director will receive, on the date of such non-employee director’s initial election or appointment, an initial equity award of fully vested shares of our common stock that has a grant date value of $200,000, multiplied by a fraction, the numerator of which is 365 minus the number of days from the most recent annual meeting to the non-employee director’s start date and the denominator of which is 365.

  28. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table sets forth certain information with respect to the Company’s financial performance and the compensation paid to our Principal Executive Officer (“PEO”) and other named executive officers (“NEOs”) for the fiscal years ended on December 31, 2024 and December 31, 2023, in accordance with the SEC disclosure requirements for a smaller reporting company as set forth in Item 402(v)(8) of Regulation S-K.

  29. PAY VERSUS PERFORMANCE

    | Year (a) | Summary Compensation Table Total for PEO(1) (b) | Compensation Actually Paid to PEO(2) (c) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) (d) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(2) (e) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (f)(3) | Net Loss (in Thousands)(4) (g) | | 2024 | $17,347,733 | $28,950,963 | $5,450,640 | $8,929,968 | $828.57 | $(44,635) | | 2023 | $5,656,500 | $13,868,064 | $2,914,412 | $8,798,410 | $737.50 | $(25,777) |

  30. PAY VERSUS PERFORMANCE

    (1) Compensation for our PEO, Rodney Tyler Page, reflects the amounts reported in the “Summary Compensation Table” for the respective years. Average compensation for non-PEOs includes the following NEOs for all of the respective years above: Edward Farrell, Patrick Kelly, and William Iwaschuk. (2) Compensation “actually paid” for the PEO and average compensation “actually paid” for our non-PEOs in the respective years reflect 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.

  31. PAY VERSUS PERFORMANCE

    | | PEO 2024 | PEO 2023 | Non-PEOs 2024 | Non-PEOs 2023 | | Summary Compensation Table Total | $17,347,733 | $5,656,500 | $5,450,640 | $2,914,412 | | Less Stock Award Value Reported in Summary Compensation Table for the Covered Year | (14,858,933) | (2,600,000) | (4,127,481) | (1,300,000) | | Plus Fair Value for Unvested Awards Granted in the Covered Year | 14,545,453 | 4,130,000 | 4,040,404 | 2,065,000 | | Change in Fair Value of Outstanding Unvested Awards from Prior Years | 425,000 | 6,256,675 | 357,000 | 4,290,002 | | Plus Fair Value for Vested Awards Granted in the Covered Year | 9,858,933 | — | 2,948,257 | — | | Change in Fair Value of Awards from Prior Years that Vested in the Covered Year | 1,632,776 | 424,888 | 261,148 | 828,996 | | Less Fair Value of Awards Forfeited during the Covered Year | — | — | — | — | | Compensation Actually Paid | $28,950,963 | $13,868,064 | $8,929,968 | $8,798,410 |

  32. PAY VERSUS PERFORMANCE

    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. (3) TSR is cumulative for the measurement periods beginning on December 31, 2022 and ending on December 31 of each of 2024 and 2023, respectively, calculated in accordance with Item 201(e) of Regulation S-K. (4) Reflects “Net Loss” 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, 2024 and December 31, 2023.

  33. Relationship between Compensation Actually Paid Versus Cumulative TSR of Company

    Relationship between Compensation Actually Paid Versus Cumulative TSR of Company 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 two-year period presented in the table. From January 1, 2023 to December 31, 2024, cumulative TSR increased by approximately 364%, while compensation actually paid to the PEO increased by approximately 109% and the average compensation actually paid to the non-PEO NEOs increased by approximately 2.2% over the same period. For the two years presented, the increase in both compensation actually paid and cumulative TSR are primarily driven by the change in the Company's stock price from $0.56 as of December 31, 2022, $4.13 as of December 31, 2023, to $4.64 as of December 31, 2024. 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.

  34. Relationship between Compensation Actually Paid Versus Net Loss

    Relationship between Compensation Actually Paid Versus Net Loss There is a limited relationship between net loss and our PEO and NEO “compensation actually paid.” This is primarily because the Company's 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. In addition, for the periods reported in the table, we did not use net loss as a measure of our performance in any of our executive compensation plans.