None.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common stock
held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter
was $25,377,272. For purposes of calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding
shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater stockholders.
In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances
which would indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding
common stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors and 5% or greater
stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates of our company.
Further information concerning shareholdings of our officers, directors and principal stockholders is included in Part III, Item 12 of
this Annual Report on Form 10-K/A.
As of March 31, 2023, there were 3,746,906 shares
of common stock issued and outstanding.
None.
On
March 31, 2023, 180 Life Sciences Corp. (“180 Life,” the “Company,” “we,” “us,”
or “our”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Original
Form 10-K”) with the U.S. Securities and Exchange Commission (the “SEC”). The Original Form 10-K omitted
certain disclosures under Part III, Items 10, 11, 12, 13 and 14 of Form 10-K in reliance on General Instruction G(3) to Form 10-K, which
provides that such information may be either incorporated by reference from the registrant’s definitive proxy statement or included
in an amendment to Form 10-K, in either case filed with the SEC not later than 120 days after the end of the fiscal year.
We
currently do not expect to file our definitive proxy statement for the 2023 annual meeting of our stockholders within 120 days of December
31, 2022. Accordingly, we are filing this Amendment No. 1 to the Original Form 10-K (this “Amendment No. 1”) solely
to:
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE.
Executive Officers
The following table sets forth
certain information, including ages as of April 28, 2023, of our executive officers:
Name |
|
Position |
|
Age |
James N. Woody, M.D., Ph.D. |
|
Chief Executive Officer and Director |
|
80 |
Ozan Pamir |
|
Chief Financial Officer and Secretary |
|
32 |
Jonathan Rothbard, Ph.D. |
|
Chief Scientific Officer |
|
71 |
Below is information regarding
each executive officer’s biographical information, including their principal occupations or employment for at least the past five years,
and the names of other public companies in which such persons hold or have held directorships during the past five years.
JAMES N. WOODY, M.D., Ph.D.
— CHIEF EXECUTIVE OFFICER AND DIRECTOR — Dr. Woody has served as our Chief Executive Officer and as a director since the
Closing of the Business Combination in November 2020. Dr. Woody has served as the CEO of 180 since July 2020, and as a
director of 180 since September 2020. Dr. Woody was a founder and served as Chairman of the Board of Directors for Viracta Pharmaceuticals,
a lymphoma therapeutic company (July 2014 to December 2020). With the company undergoing a reverse merger into a public company,
he resigned his Board member position and continues as a Board observer. He served as a General Partner of Latterell Venture Partners
(February 2006 to December 2019) then moved to a Venture Partner position, for the one remaining LVP legacy company, PerceptiMed,
a Pharmacy management company, where he continues to serve on the Board as they plan their IPO. He served as an interim CEO for MaraBio
Systems Inc., a startup autism diagnostic company, from November 2018 to December 2022, when a new full time CEO was selected and
he continues to serve as Vice Chairman, on the Board of Directors. He also serves as Chairman of the Board for Enosi Life Sciences, a
next generation TNF inhibitor company, which position he has held since July 2020. He served as a Board member of IntegenX Inc. (2012
to 2018), and Neuraltus Pharmaceuticals, Inc. (February 2009 to December 2019). Dr. Woody was the founding CEO and Chairman
of the Board of OncoMed Pharmaceuticals, Inc. (2004 to 2014), a NASDAQ listed company with a focus on antibodies targeting cancer stem
cells. He previously served as a member of the Board of Directors of Protein Simple, formerly Cell Biosciences (2005 to 2014), acquired
by Bio-Techne; Forte Bio Corporation, acquired by PALL in 2012 (2005 to 2012); Bayhill Therapeutics, Inc. (2004 to 2012); Femta Pharmaceuticals
(2008 to 2012); and Proteolix, Inc. (2005 to 2009), acquired by Onyx for the multiple myeloma drug Carfilzomib. Dr. Woody also served
on the Board of Directors of Talima Therapeutics, Inc. (2007 to 2011); HemaQuest Pharmaceuticals, Inc. (2009 to 2013); Calistoga (2009
to 2011), acquired by Gilead for the lymphoma drug Idelalisib (Zydelig); Tetralogic (2008 to 2014), a NASDAQ listed company; and Avidia
(2003 to 2006), acquired by Amgen. From 1996 to 2004, He was President and General Manager of Roche Biosciences, Palo Alto, California
(formerly Syntex), where he had responsibility for all bioscience research and development, ranging from genetics and genomics to clinical
development of numerous new pharmaceuticals, as well as former Syntex administrative matters. From 1991 to 1996, Dr. Woody served
as Senior Vice President of Research and Development and Chief Scientific Officer of Centocor, Inc., Malvern, Pennsylvania, where he assisted
in the development of several new major antibody-based therapeutics in the fields of oncology and autoimmune and cardiovascular disease,
including Remicade®, a multi-billion dollar pharmaceutical. Prior to that time, he served as a Medical Officer in the U.S. Navy,
retiring as a CAPT (06) and as Commanding Officer of the Naval Medical Research and Development Command in 1991. Dr. Woody and
his colleagues, with U.S. Navy and Congressional approval, founded the National Marrow Donor Program. He is a member of the Research
Advisory Committee for the Veterans Gulf War Illness. Dr. Woody was a member of the Board of Directors of the Lucille Packard (Stanford)
Children’s Hospital (LPCH) in Palo Alto, California, (July 2002 to December 2020), serving as Chairman of the LPCH Quality
Service and Safety Committee and a Member of the Patient Safety Oversight Committee. Dr. Woody also is a member of the Stanford Medical
School Dean’s Research Committee and Stanford “SPARK” research initiatives program. Dr. Woody received a
B.S. in Chemistry from Andrews University, Berrien Springs, Michigan, an M.D. from Loma Linda University and Pediatric Subspecialty Training
at Duke University School of Medicine and Harvard University School of Medicine. He received a Ph.D. in Immunology from the University
of London, England. We believe that his expertise and experience in the life sciences and venture capital industries and his educational
background make him qualified to serve as a director.
OZAN PAMIR — CHIEF
FINANCIAL OFFICER AND SECRETARY — Ozan Pamir has served as our Chief Financial Officer since April 2023, and prior
to that, as interim Chief Financial Officer from November 2020 to April 2023. Mr. Pamir has also served as the Chief Financial
Officer and as a member of the Board of Directors of 180, our wholly-owned subsidiary following the Closing of the Business Combination,
since October 2018. Mr. Pamir has also served as the Chief Financial Officer and as a member of the Board of Directors of Unify
Pharmaceuticals between August 2019 and July 2021, and as the Chief Financial Officer of Enosi Life Sciences between May 2020
and April 2021, both of which are pre-clinical companies focused on autoimmune diseases. Previously, Mr. Pamir served in
various positions with Echelon Wealth Partners, a leading Canadian investment bank, from June 2014 to October 2018, including
Investment Banking Analyst (June 2014 — June 2015), Senior Associate, Investment Banking (June 2015 — September 2017)
and Vice President of Investment Banking (September 2017 — October 2018), as well as Investment Banking Analyst of
OCI Groups from October 2013 to June 2014. Mr. Pamir holds an Economics and Finance degree from McGill University and is
a CFA Charterholder.
JONATHAN ROTHBARD, PH.D.
— CHIEF SCIENTIFIC OFFICER — Jonathan Rothbard, Ph.D. has served as our Chief Scientific Officer since
the Closing of the Business Combination in November 2020. Dr. Rothbard has served as the Chief Executive Officer and Chief Scientific
Officer of Katexco since November 2018. Previously, he was a founder of ImmuLogic Pharmaceutical Corp., in Palo Alto, California, where
he served as Chief Scientific Officer from 1989 to 1995, a founder of Amylin Corporation in San Diego, California in 1989, and CellGate
Incorporated in Redwood City, California, where he served as Chief Scientific Officer from 1998 to 2004. Dr. Rothbard served on the faculty
in the Departments of Neurology (2007-2018), Chemistry (2005-2006), Medicine-division of Rheumatology (1996-1998) at Stanford University
School of Medicine. His first academic faculty position was as the head of the Molecular Immunology Laboratory at the Imperial Cancer
Research Fund in London from 1985-1989. Dr. Rothbard received his BA from Hamilton College in 1973 and his Ph.D. from Columbia University
in 1977 and completed post-doctoral fellowships at The Rockefeller University and Stanford University Medical School.
The following table sets forth
certain information, including ages as of April 28, 2023, of our directors:
Name |
|
Age |
|
Position With Company |
|
Date First
Appointed as
Officer or
Directors |
|
Director Class* |
Class I Directors |
|
|
|
|
|
|
|
|
Lawrence Steinman, M.D. |
|
75 |
|
Executive Co-Chairman |
|
November 2020 |
|
Class I |
James N. Woody, M.D., Ph.D. |
|
80 |
|
Chief Executive Officer and Director |
|
November 2020 |
|
Class I |
Russell T. Ray, MBA |
|
76 |
|
Director |
|
July 2021 |
|
Class I |
Francis Knuettel II, MBA |
|
57 |
|
Director |
|
July 2021 |
|
Class I |
|
|
|
|
|
|
|
|
|
Class II Directors |
|
|
|
|
|
|
|
|
Sir Marc Feldmann, Ph.D. |
|
78 |
|
Executive Co-Chairman, and Chairman, CEO and Executive Director of CannBioRex |
|
November 2020 |
|
Class II |
Larry Gold, Ph.D. |
|
81 |
|
Director |
|
November 2020 |
|
Class II |
Donald A. McGovern, Jr., MBA |
|
72 |
|
Director |
|
November 2020 |
|
Class II |
Teresa M. DeLuca, M.D., MBA |
|
58 |
|
Director |
|
July 2021 |
|
Class II |
Pamela G. Marrone, Ph.D. |
|
66 |
|
Director |
|
July 2021 |
|
Class II |
| * | Terms expire at the 2023 annual meeting of stockholders (Class I)
and the annual meeting of stockholders to be held in 2024 (Class II). |
LAWRENCE STEINMAN
CO-EXECUTIVE CHAIRMAN AND CLASS I DIRECTOR
Lawrence Steinman, M.D.
has served as Co-Executive Chairman since the Closing of the Business Combination in November 2020. He also has primary scientific
responsibility for our α7nAChR platform. Dr. Steinman served as Co-Chairman of 180 and as a member of its board of directors since
April 2019. Prior to joining 180, he served on the Board of Directors of Centocor Biotech, Inc., from 1989 to 1998, the Board of Directors
of Neurocine Biosciences from 1997 to 2005, the Board of Directors of Atreca from 2010 – 2019, the Board of Directors of BioAtla,
Inc. (NASDAQ:BCAB) from July 2020 to present (he also serves on the Compensation Committee and Nominating and Corporate Governance Committee
of BioAtla), the Board of Directors of Tolerion, Inc. from 2013 to 2020 and the Board of Directors of Alpha5 Integrin from November 2020
to June 2022, and the Board of Directors of Pasithea Therapeutics Corp. (NASDAQ:KTTA) from August 2020 to the present. He is currently
the George A. Zimmermann Endowed Chair in the Neurology Department at Stanford University and previously served as the Chair of the Interdepartmental
Program in Immunology at Stanford University Medical School from 2003 to 2011. He is a member of the National Academy of Medicine and
the National Academy of Sciences. He also founded the Steinman Laboratory at Stanford University, which is dedicated to understanding
the pathogenesis of autoimmune diseases, particularly multiple sclerosis and neuromyelitis optica. He received the Frederic Sasse Award
from the Free University of Berlin in 1994, the Sen. Jacob Javits Award from the U.S. Congress from 1988 through 2002, the John Dystel
Prize in 2004 from the National MS Society in the U.S., the Charcot Prize for Lifetime Achievement in Multiple Sclerosis Research in 2011
from the International Federation of MS Societies and the Anthony Cerami Award in Translational Medicine by the Feinstein Institute of
Molecular Medicine in 2015. In 2023, he was honored as a Pioneer in Medicine by the Society for Brain Mapping and Therapeutics. He also
received an honorary Ph.D. from the Hasselt University in 2008, and from the University of Buenos Aires in 2022. He received his BA (physics)
from Dartmouth College in 1968 and his MD from Harvard University in 1973. He also completed a fellowship in chemical immunology at the
Weizmann Institute (1974 – 1977) and was an intern and resident at Stanford University Medical School. We believe Dr. Steinman’s
extensive experience leading the research and development of numerous therapeutics qualify him to serve as a director.
PROF. SIR MARC FELDMANN, PH.D.
EXECUTIVE CO-CHAIRMAN AND CLASS II
DIRECTOR
CHAIRMAN, CEO AND EXECUTIVE DIRECTOR OF CANNBIOREX
Prof. Sir Marc Feldmann,
Ph.D. FRS has served as Co-Executive Chairman since the Closing of the Business Combination in November 2020. He also has primary
scientific responsibility for our synthetic cannabidiol (“CBD”) analogues programs. Prof. Sir Feldmann has served as Co-Chairman
of 180 and as a member of its board of directors since April 2018. Since June 1, 2018, Prof. Sir Feldmann has served as Chairman, CEO
and Executive Director of CannBioRex. Since August 2018, Prof. Sir Feldmann has also served as a director of Enosi Therapeutics Corp.,
a company which he founded that is a pre-clinical company focused on cancer and autoimmune deficiencies. He is an Emeritus Prof. at the
Kennedy Institute of Rheumatology, Department of Orthopedics, Rheumatology and Musculoskeletal Sciences at the University of Oxford. He
is renowned as an expert in the development of anti-inflammatory therapeutics and has published over 700 papers reflecting a long-term
commitment to the cellular and molecular aspects of inflammatory autoimmune diseases, cytokines and their therapeutic applications. In
1983, he published a new hypothesis explaining the mechanism of induction of autoimmune diseases, highlighting the role of cytokines,
potent signaling proteins which drive the important processes of inflammation, immunity and cell growth. In collaboration with Sir Ravinder
Maini, he showed that tumor necrosis factor (“TNF”) was a key driver of rheumatoid arthritis, and that blocking it was beneficial,
first in novel test tube systems (in vitro) using human disease tissue from rheumatoid joints, then animal models and in a series of clinical
trials. Maini and Feldmann developed a key patent for the optimal use of antibodies for TNF, which was licensed to Centocor and AbbVie,
and eventually led to the acquisition of Centocor by Johnson & Johnson. Medically he is a Fellow of the Royal College of Physicians,
the Royal College of Pathologists of London. In recognition of his scientific work, which has led to anti-TNF currently being the best-selling
drug class in the world, Prof. Sir Feldmann was elected to the Academy of Medical Sciences and the Royal Society in London, is a Fellow
of the Australian Academy of Science, and is an International Member of the National Academy of Sciences, USA. He was knighted by Queen
Elizabeth II in 2010 for his outstanding services to medicine, and also received the Australian equivalent, the Companion of Honour (AC).
He was awarded the Crafoord Prize in 2000, the Albert Lasker Award for Clinical Medical Research in 2003, the Cameron Prize for Therapeutics
by the University of Edinburgh in 2004, the John Curtin Medal of the Australian National University in 2007 and the Dr. Paul Janssen Award
for Biomedical Research in 2008, the Ernst Schering Prize in 2010 and the Gairdner International Award in 2014, together with Sir Ravinder
Maini, and separately the European Inventor Award (Lifetime Achievement) by the European Patent Office in 2007, and the Tang Prize in
2020. He graduated with an MBBS degree from the University of Melbourne in 1967 and earned a Ph.D. in Immunology at the Walter and Eliza
Hall Institute of Medical Research in 1972. He undertook postdoctoral research at the Imperial Cancer Research Fund’s Tumour Immunology
Unit in 1972 before moving to the Charing Cross Sunley Research Centre in 1985, which later merged with the Kennedy Institute of Rheumatology
which then joined the Faculty of Medicine at Imperial College in 2000 and was transferred to the University of Oxford in 2011.
JAMES N. WOODY, M.D., PH.D.
CHIEF EXECUTIVE OFFICER AND CLASS I DIRECTOR
Information regarding Dr. Woody
is set forth above under “Executive Officers”.
RUSSELL T. RAY, MBA
CLASS I DIRECTOR
Russell T. Ray, MBA
has served as a director of our Company since July 9, 2021. Mr. Ray was a Senior Advisor to HLM Venture Partners, a health care venture
capital firm, from February 2017 to December 2017 and from January 2014 to December 2015. From January 2016 to February 2017, Mr. Ray
was a Managing Director and Vice Chairman of Healthcare Investment Banking at Stifel, Nicolaus & Company, Incorporated, an investment
banking firm, with a focus on health care investments. From September 2003 to September 2015, Mr. Ray served as a Partner and Senior Advisor
with HLM Venture Partners, a health care focused venture capital firm that invests in health care services, health care information technology
and medical technology companies. Prior to his work with HLM, he served as Managing Director and President of Chesapeake Strategic Advisors
(2002 to 2003), which invested in health care services, health care information technology and medical technology companies. Mr. Ray was
formerly Managing Director and Co-Head of Global Health Care Investment Banking at Credit Suisse First Boston Corporation (1999 to 2002)
where he led a 50-person team with offices in Baltimore, Chicago, London, New York and San Francisco focused on providing corporate finance
and M&A advisory services to private and public companies in the biotechnology, health care services and health care information technology
sectors. From 1987 to 1999, Mr. Ray was a Managing Director and Global Co-Head of Healthcare Investment Banking at Deutsche Bank and its
predecessor entities, BT Alex. Brown and Alex. Brown & Sons. Mr. Ray served on the board of directors of Allergan, Inc. from 2003
to 2015. Mr. Ray also served as Chairman of the Audit and Finance Committee of Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) (which
position he held between January 2015 and June 2022), which specializes in developing drugs for the treatment of cancer.
Mr. Ray is a former Captain
in the United States Army and recipient of the Bronze Star Medal, two Air Medals and two Army Commendation Medals for Meritorious Service.
He obtained a Bachelor’s of Science degree in Engineering from the United States Military Academy at West Point, a Bachelor’s
of Science degree in Ecology and Evolutionary Biology from the University of Washington, a Master of Science degree from the University
of Pennsylvania in Ecology and Evolutionary Biology and received a Master of Business Administration degree in Finance from the Wharton
School of Business at the University of Pennsylvania.
FRANCIS KNUETTEL II, MBA
CLASS I DIRECTOR
Francis Knuettel II,
MBA has been a director of our Company since July 2, 2021. Mr. Knuettel has over 25 years of management experience in venture and
private-equity backed public companies, and has advised public and private companies on financial management and controls, mergers and
acquisitions, capital markets transactions and operating and financial restructurings. Since April 2022, he has been managing Camden Capital
LLC, where he provides fractional and interim Chief Financial Officer and board services, including serving as Chief Financial Officer
of OceanTech Acquisition Corp (Nasdaq:OTEC) since March 2023. From December 2020 to July 2021, Mr. Knuettel served as the President of
Unrivaled Brands, Inc. (OTCQX:UNRV), a vertically integrated company focused on the cannabis sector with operations in California and
Nevada, from December 2020 to March 2021, he served as the Interim Chief Executive Officer of Unrivaled and he served as Chief Executive
Officer of Unrivaled from March 2021 to March 2022 and as a director from December 2020 through April 2022. Mr. Knuettel has served as
a member of the Board of Directors, Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee of Murphy
Canyon Acquisition Corp. (MURF) since February 2022, and as a member of the Board of Directors, Audit Committee and Nominations and Corporate
Governance Committee of Relativity Acquisition Corp. (NASDAQ:RACY), since February 2022, both Special Purpose Acquisition Companies. Mr.
Knuettel was formerly Director of Capital and Advisory at Viridian Capital Advisors, a position he held from June 2020 to January 2021,
following the sale but prior to the close of the acquisition of One Cannabis Group, Inc. (“OCG”) by an OTCQX listed company.
At OCG, Mr. Knuettel served from June 2019 to January 2021 as Chief Financial Officer of the company, a leading cannabis dispensary franchisor,
with over thirty cannabis dispensaries across seven states. Prior to joining OCG, Mr. Knuettel was Chief Financial Officer at MJardin
Group, Inc. (“MJardin”) (August 2018 to January 2019), a Denver-based cannabis cultivation and dispensary management company,
where he led the company’s IPO on the Canadian Securities Exchange. Following the IPO, Mr. Knuettel managed the merger with GrowForce,
a Toronto-based cannabis cultivator, after which he moved over to the Chief Strategy Role (January 2019 to June 2019). In his role as
CSO, he managed the acquisition of several private companies before recommending and executing the consolidation of management and other
operations to Toronto and the closure of the executive office in Denver. From April to August 2018, Mr. Knuettel served as Chief Financial
Officer of Aqua Metals, Inc. (NASDAQ:AQMS), an advanced materials firm that developed technology in battery recycling. Prior to that,
from April 2014 to April, 2018, Mr. Knuettel served as Chief Financial Officer at Marathon Patent Group, Inc. (NASDAQ:MARA), a patent
enforcement and licensing company. Before that, Mr. Knuettel held numerous CFO and CEO positions at early-stage companies where he had
significant experience both building and restructuring businesses. In addition to the Board of Director positions set forth above, he
currently serves as the Chairman of the Board of Directors of a MedTech company focused on smart intubation devices. Mr. Knuettel graduated
cum laude from Tufts University with a B.A. degree in Economics and from The Wharton School at the University of Pennsylvania with an
M.B.A. in Finance and Entrepreneurial Management.
LARRY GOLD, PH.D.
CLASS II DIRECTOR
Larry Gold, Ph.D. has
served as a director of our Company since the Closing of the Business Combination in November 2020. Dr. Gold is the Founder and Chairman
Emeritus of the Board, and former CEO of SomaLogic, Inc. Prior to SomaLogic, he also founded and was the Chairman of NeXagen, Inc., which
later became NeXstar Pharmaceuticals, Inc. In 1999, NeXstar merged with Gilead Sciences, Inc. to form a global organization committed
to the discovery, development and commercialization of novel products that treat infectious diseases. During his nearly 10 years at NeXstar,
Dr. Gold held numerous executive positions including Chairman of the Board, Executive Vice President of R&D, and Chief Science Officer.
Before forming NeXagen, he also co-founded and served as Co-Director of Research at Synergen, Inc., a biotechnology company later acquired
by Amgen, Inc. Dr. Gold became the Chairman of Lab79, a new biotech company in Boulder, Colorado in 2014. Since 1970, Dr. Gold has been
a professor at the University of Colorado at Boulder. While at the University, he served as the Chairman of the Molecular, Cellular and
Developmental Biology Department from 1988 to 1992. Between 1995 and 2013, Dr. Gold received the CU Distinguished Lectureship Award, the
National Institutes of Health Merit Award, the Career Development Award, the Lifetime Achievement Award from the Colorado Biosciences
Association, and the Chiron Prize for Biotechnology. Dr. Gold was also awarded the 8th International Steven Hoogendijk Prize by the Dutch
Batavian Society of Experimental Philosophy in 2018. In addition, Dr. Gold has been a member of the American Academy of Arts and Sciences
since 1993 and the National Academy of Sciences since 1995. He is a fellow of the National Academy of Inventors. Dr. Gold also serves
on the Board of Directors for Lab79, Deck Therapeutics, COLS (a charitable foundation) and a new pain company, TenZero, each private companies.
Dr. Gold established the Gold Lab at the University of Colorado Boulder in 1971. Starting with basic research on bacteria and bacteriophage,
the lab shifted its focus to human disease following the invention of the SELEX process in 1989. The Gold Lab today focuses on the utilization
of biological and information technology to improve healthcare. Dr. Gold also began holding the GoldLab Symposia in 2010, an annual event
that tackles big questions in healthcare. He is determined to change healthcare for the better through teaching, research, and debate
among scientists and citizens throughout the world. Dr. Gold received a BA in 1963 in Biochemistry from Yale University, a Ph.D. in 1967
in Biochemistry from the University of Connecticut, and was an NIH Postdoctoral Fellow until 1969 at Rockefeller University.
DONALD A. MCGOVERN, JR., MBA
CLASS II DIRECTOR
Donald A. McGovern,
Jr., MBA has served as a director of our Company since the Closing of the Business Combination in November 2020 and became our
lead director on March 30, 2021. Mr. McGovern is a retired Vice Chairman, Global Assurance, of PricewaterhouseCoopers LLP (PwC). Through
decades of leadership at PwC and board experience, Mr. McGovern brings wide-ranging operational, financial, accounting and audit and public
company experience. He currently serves on the board of Cars.com (NYSE: CARS). Mr. McGovern joined the Board of Cars.com in May 2017 upon
the spinout of Cars.com from Tegna creating a new public company listed on the NYSE. Cars.com is a leading two-sided digital automotive
marketplace. Mr. McGovern is chair of the Audit Committee, an audit committee financial expert under SEC regulations, and a member of
the Compensation Committee of Cars.com. His past public board experience has been with CRH, plc. Mr. McGovern served two three-year terms
(2013 – 2019) on the board of directors of CRH. During his tenure, he was Senior Independent Director, chair of the Remuneration
Committee, a member of the Nomination Committee and of the Audit Committee and an audit committee financial expert under U.S. SEC and
U.K. FRC regulations. CRH is headquartered in Dublin, Ireland and listed on the London, Irish and New York Stock Exchanges. His past private
company board experience includes Neuraltus Pharmaceuticals (2014 – 2019) and eASIC Corp (2016 – 2018). Mr. McGovern joined
the Board of Neuraltus in preparation for Neuraltus doing a potential IPO. Neuraltus was a privately held, venture capital backed biopharmaceutical
company dedicated to the development of therapeutics to treat neurological disorders. Mr. McGovern was chair of the Audit Committee and
Compensation Committee. Mr. McGovern joined the Board of eASIC as the Company was in the process of filing a Form S-1 registration statement
for an IPO. eASIC, a privately held, venture capital backed, fabless semiconductor company, was acquired by Intel Corporation. Mr. McGovern
was chair of the Audit Committee and member of the Nomination Committee.
He is by background a High
Technology Industry Assurance partner and served as the global engagement partner, lead audit partner, or concurring partner, for numerous
Silicon Valley and other U.S. public companies such as Cisco Systems, Applied Materials, Schlumberger, Ltd., Hewlett-Packard, Agilent
Technologies, Nvidia, eBay, and Varian Medical. He also has served Silicon Valley pre-IPO companies and during his career had been involved
in over 35 IPOs. He has extensive experience for SEC current reporting and securities filings related to initial public offerings and
other SEC registration statements, due diligence, mergers and acquisitions, restructurings, divestitures and risk management.
Mr. McGovern spent 39 years
at PwC including 26 years as a partner. Mr. McGovern was Vice Chairman, Global Assurance Leader and a member of the PwC Global Network
Executive Team, from July 2008 until his retirement from PwC on June 30, 2013. He had been the Managing Partner of the firm’s Silicon
Valley Office from July 2001 to June 2007 and previously held other operating roles. In April 2001, Mr. McGovern was elected to the PwC
Board of Partners and Principals of the U.S. firm as well as to PwC’s Global Board. He was the first ever lead director for the
U.S. Board (2001 – 2005) and was elected to serve 2 terms on each Board.
Mr. McGovern is a member of
the American Institute of Certified Public Accountants and has an active CPA license to practice in California, Illinois and New York.
He received a BA from Marquette University in 1972 and received an MBA from DePaul University in 1975. He also attended the Executive
Program for Growing Companies of the Stanford University Graduate School of Business in 1992.
TERESA M. DELUCA, M.D., MBA
CLASS II DIRECTOR
Teresa M. DeLuca, M.D.,
MBA, has served as a director of our Company since July 9, 2021. Dr. DeLuca is a physician executive and psychiatrist in New York,
New York, resuming her own practice, since January 2020. Dr. DeLuca previously served as a Managing Director at Columbia University’s
NY Life Science Venture Fund from January 2018 to December 2019. Her responsibilities as Managing Director included leading a consortium
of 12 private/public institutions (Cold Spring Harbor Laboratory, Columbia, CUNY, Einstein, Hospital for Special Surgery, Memorial Sloan
Kettering Cancer Center, Mount Sinai, NYU, Rockefeller University, SUNY Downstate Medical Center, Stony Brook, Weil Cornell), and providing
due diligence support for potential investments, partnerships, acquisitions, commercialization, licensing, and IPOs. Before that she served
as Assistant Clinical Professor of Psychiatry at the Icahn School of Medicine at Mount Sinai in New York City from August 2014 to December
2017 and as the Chief Medical Officer of Magellan Pharmacy Solutions at Magellan Health from December 2012 to July 2014. Prior to that,
she served as SVP of Pharmacy Health Solutions at Humana, VP of Clinical Sales Solutions & National Medical Director at Walgreen Co.,
and VP of Personalized Medicine as well as VP of Medical Policy & Clinical Quality at Medco. Prior to taking on these executive leadership
roles, Dr. DeLuca was a Senior Medical Scientist at GlaxoSmithKline. Dr. DeLuca served as a director at North Bud Farms, Inc., a pharmaceutical
company from May 2018 to February 2020 (CSE:NBUD) and has served as a director of Surgery Partners, Inc. (NASDAQ:SGRY), a leading operator
of surgical facilities and ancillary services, since September 2016, and also currently serves on the Audit Committee and Chair Compliance
and Ethics Committee of the Board of Directors of Surgery Partners, Inc. In March 2022, Dr. DeLuca joined the Board of Directors of Rejuveron,
a private Swiss drug discovery company and serves on the Audit Committee and Chair of Governance and Remuneration Committees of such company.
Dr. DeLuca received a Bachelor’s
degree from the University of Rochester / LIU. Dr. DeLuca received her M.B.A. from Drexel University and her M.D. from St. Georges University
School of Medicine, before undertaking her residency at Thomas Jefferson University Medical School. A strong advocate for good board governance,
in 2016, Dr. DeLuca earned the Carnegie Mellon Cybersecurity certificate and in 2022 passed the Digital Directors Network Cyber Risk Masterclass
examination. She continues to maintain good standing with the National Association of Corporate Directors (NACD) as a Board Leadership
Fellow (Masters Level), and in 2020 Dr. DeLuca passed the NACD’s “Directorship Certified” examination (NACD.DC). In
addition, in 2022, Dr. DeLuca became a NACD “Subject Matter Expert” in examination development and a Board Advisory Faculty
Member and also earned the American College of Corporate Directors (ACCD) “Advanced Professional Director” credential. Dr.
DeLuca was also named “2020 Director to Watch” in the Directors & Board Annual Report and named “2022 Director of
the Month” in Chief Executive Magazine. Dr. DeLuca is also the Co-Chair and Leadership Council Member for the international organization,
Women Corporate Directors (WCD).
PAMELA G. MARRONE, PH.D.
CLASS II DIRECTOR
Pamela G. Marrone,
Ph.D. has been a director of our Company since July 2, 2021. Dr. Marrone is currently co-founder and Executive Chair of the Invasive
Species Corporation, bringing biological solutions to control difficult invasive species in water, forestry and agriculture. She was founder
and was Chief Executive Officer of Marrone Bio Innovations, Inc. (NASDAQ:MBII), a natural products company producing pest management and
plant health products, from April 2006 until her retirement in August 2020, and then served on the Board of Directors until its sale to
Bioceres Crop Solutions in July 2022. In July 2022, she was elected Chair of the Board of Directors of Elicit Plant, a French venture
capital-backed company developing and selling plant natural products to reduce crop stress. In July 2021, she was appointed as senior
fellow of Arizona State University’s Swette Center for Sustainable Food Systems. She also currently serves on the board of Stem
Express LLC. Prior to founding Marrone Bio, in 1995 Dr. Marrone founded AgraQuest, Inc. (acquired by Bayer), where she served as board
member, president and chief executive officer until May 2004 and as board member, president or chair from such time until March 2006 and
she remained on the board until March 2007. While there, she led teams that discovered and commercialized several bio-based pest management
products. She served as founding president and business unit head for Entotech, Inc., a biopesticide subsidiary of Denmark-based Novo
Nordisk A/S (acquired by Abbott Laboratories), from 1990 to 1995, and held various positions at the Monsanto Company from 1983 until 1990,
where she led the Insect Biology Group, which was involved in pioneering projects in transgenic crops, natural products and microbial
pesticides. Dr. Marrone is an author of over twenty invited publications, an inventor on more than 400 patents and is in demand as a speaker
and has served on the boards and advisory councils of numerous professional and academic organizations. In 2016, Dr. Marrone was elected
to the Cornell University Board of Trustees and completed her four-year term in July 2020. In 2013, Dr. Marrone was named the Sacramento
region’s “Executive of the Year” by the Sacramento Business Journal and “Cleantech Innovator of the Year”
by the Sacramento Area Regional Technology Alliance and Best Manager with Strategic Vision by Agrow in 2014. In January 2019, she was
awarded the “Sustie” award by the Ecological Farming Association for her decades-long leadership in sustainable agriculture.
In March 2020, she was awarded the Most Admired CEO, Distinguished Career Award by the Sacramento Business Journal. In 2022, she was the
first woman to receive the Kathryn C. Hach Award for Entrepreneurial Success from the American Chemical Society. Dr. Marrone earned a
B.S. in Entomology from Cornell University and a Ph.D. in Entomology from North Carolina State University.
Director Qualifications
The Board believes that each
of our directors is highly qualified to serve as a member of the Board. Each of the directors has contributed to the mix of skills, core
competencies and qualifications of the Board. When evaluating candidates for election to the Board, the Board seeks candidates with certain
qualities that it believes are important, including integrity, an objective perspective, good judgment, and leadership skills. Our directors
are highly educated and have diverse backgrounds and talents and extensive track records of success in what we believe are highly relevant
positions.
Corporate Governance
The Company promotes accountability
for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports
and documents that the Company files with the SEC and in other public communications made by the Company; and strives to be compliant
with applicable governmental laws, rules and regulations.
Family Relationships
There are no family relationships
among executive officers and directors.
Arrangements between Officers and Directors
There is no arrangement or
understanding between our directors and executive officers and any other person pursuant to which any director or officer was or is to
be selected as a director or officer. There are also no arrangements, agreements or understandings to our knowledge between non-management stockholders
that may directly or indirectly participate in or influence the management of our affairs.
Other Directorships
None of the directors of our
Company are also directors of issuers with a class of securities registered under Section 12 of the Exchange Act (or which otherwise
are required to file periodic reports under the Exchange Act), other than:
| ● | Mr. McGovern (who serves on the Board of Directors of Cars.com
and as the Chairman of the Audit Committee and Member of the Compensation Committee of Cars.com), |
| | |
| ● | Prof. Steinman (who serves on the Board of Directors of BioAtla,
Inc. (NASDAQ:BCAB), on the Compensation Committee and Nominating and Corporate Governance Committee of BioAtla and on the Board of Directors
of Pasithea Therapeutics Corp. (NASDAQ:KTTA), and also on the Compensation Committee and Nominating and Corporate Governance Committee
of Pasithea), |
| | |
| ● | Dr. DeLuca (who serves on the Board of Directors of Surgery
Partners, Inc. (NASDAQ:SGRY) and on the Audit Committee and Chair Compliance and Ethics Committee of the Board of Directors of Surgery
Partners, Inc.), and |
| | |
| ● | Mr. Knuettel (who serves as a member of the Board of Directors,
Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee of Murphy Canyon Acquisition Corp. (MURF),
as a member of the Board of Directors, Audit Committee and Nominations and Corporate Governance Committee of Relativity Acquisition Corp.
(NASDAQ:RACY). |
Involvement in Certain Legal Proceedings
To the best of our knowledge,
during the past ten years, none of our directors or executive officers were involved in any of the following: (1) any bankruptcy petition
filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time; (2) any conviction in a criminal proceeding or being a named subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a
civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law;
(5) being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation;
(ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6)
being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization
(as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange
Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated
with a member.
Board Committee
Membership
Our
Board of Directors has four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee,
and a Risk, Safety and Regulatory Committee. All four committees are composed solely of independent directors. We filed a copy of our
Audit Committee charter and our Compensation Committee charter as exhibits to the registration statement that we filed in connection with
our IPO. We filed a copy of our Nominating and Corporate Governance Committee charter as an exhibit to our Current Report on Form 8-K that
we filed with the SEC on November 12, 2020. We filed a copy of our Risk, Safety and Regulatory Committee charter as an exhibit to
our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that we filed with the SEC on July 9, 2021.
You can review the charters for our standing committees by accessing our public filings at the SEC’s web site at www.sec.gov
or on our website at https://ir.180lifesciences.com/corporate-governance/board-committees.
The current members of the
committees of our Board of Directors are as follows:
Director Name | |
Independent | |
Audit Committee | |
Compensation Committee | |
Nominating and Corporate Governance Committee | |
Risk, Safety and Regulatory Committee |
Lawrence Steinman, M.D.(1) | |
| |
| |
| |
| |
|
Sir Marc Feldmann, Ph.D.(1) | |
| |
| |
| |
| |
|
James N. Woody, M.D., Ph.D. | |
| |
| |
| |
| |
|
Larry Gold, Ph.D. | |
X | |
M | |
| |
C | |
|
Donald A. McGovern, Jr.(2) | |
X | |
C | |
M | |
| |
M |
Russell T. Ray, MBA | |
X | |
M | |
M | |
M | |
|
Teresa DeLuca, M.D., MBA | |
X | |
| |
C | |
M | |
|
Francis Knuettel II, MBA | |
X | |
M | |
| |
| |
M |
Pamela G. Marrone, Ph.D. | |
X | |
| |
M | |
| |
C |
(1) | Co-Executive Chairman of the Board of Directors. |
(2) | Lead independent director. |
C | Chairperson of the Committee. |
M | Member of the Committee. |
Each of these committees has
the duties described below and operates under a charter that has been approved by our Board of Directors.
Audit Committee
NASDAQ listing standards and
applicable SEC rules require that the Audit Committee of a listed company be comprised solely of independent directors. We have established
an Audit Committee of the Board of Directors, which currently consists of Donald A. McGovern, Jr., MBA (Chair), Larry Gold, Ph.D.,
Russell T. Ray, MBA and Francis Knuettel II, MBA. Each member of the Audit Committee meets the independent director standard
under NASDAQ’s listing standards and under Rule 10A-3(b)(1) of the Exchange Act. Each member of the Audit Committee
is financially literate and our Board of Directors has determined that Mr. McGovern qualifies as an “audit committee financial
expert” as defined in applicable SEC rules.
Responsibilities of the Audit
Committee include:
| ● | the appointment, compensation, retention, replacement, and oversight
of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged
by us; |
| ● | pre-approving all audit and non-audit services to
be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing
pre-approval policies and procedures; |
| ● | reviewing and discussing with the independent registered public
accounting firm all relationships the firm has with us in order to evaluate their continued independence; |
| ● | setting clear hiring policies for employees or former employees
of the independent registered public accounting firm; |
| ● | setting clear policies for audit partner rotation in compliance
with applicable laws and regulations; |
| ● | obtaining and reviewing a report, at least annually, from the
independent registered public accounting firm describing (i) the independent auditor’s internal quality-control procedures
and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm,
or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one
or more independent audits carried out by the firm and any steps taken to deal with such issues; |
| ● | reviewing and approving any related party transaction required
to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;
and |
| ● | reviewing with management, the independent registered public
accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or published reports that raise material issues regarding our consolidated
financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial
Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation Committee
We have established a Compensation
Committee of the Board of Directors. The members of our Compensation Committee are Teresa DeLuca MD, Ph.D. (Chair), Donald A. McGovern,
Jr., MBA, Russell T. Ray, MBA and Pamela G. Marrone, Ph.D. We have adopted a Compensation Committee charter, which details
the principal functions of the Compensation Committee, including:
| ● | reviewing and approving on an annual basis the corporate goals
and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance
in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on
such evaluation in executive session at which the Chief Executive Officer is not present; |
| ● | reviewing and approving the compensation of all of our other
executive officers; |
| ● | reviewing our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration
plans; |
| ● | assisting management in complying with our proxy statement and
annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and
other special compensation and benefit arrangements for our executive officers and employees; |
| ● | producing a report on executive compensation to be included
in our annual proxy statement; and |
| ● | reviewing, evaluating and recommending changes, if appropriate,
to the remuneration for directors. |
The Compensation Committee
charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such
adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the
Compensation Committee will consider the independence of each such adviser, including the factors required by NASDAQ and the SEC.
Nominating and Governance Committee
We have established a nominating
and corporate governance committee of the Board of Directors. The members of our Nominating and Governance Committee are Larry Gold, Ph.D.
(Chair), Russell T. Ray, MBA and Teresa DeLuca MD, MBA. Our Board has determined that each member is independent under applicable
NASDAQ listing standards. We have adopted a Compensation Committee charter, which details the principal functions of the nominating and
corporate governance committee. Specific responsibilities of the Nominating and Corporate Governance Committee include:
| ● | making recommendations to our Board regarding candidates for
directorships; |
| ● | making recommendations to our Board regarding the size and composition
of our Board; |
| ● | overseeing our corporate governance policies and reporting;
and |
| ● | making recommendations to our Board concerning governance matters. |
Risk, Safety and Regulatory Committee
In May 2021, the Board
of Directors adopted a charter of a Risk, Safety and Regulatory Committee, which committee is tasked with, among other things, overseeing
our risk management policies and procedures, reviewing our principal risk and compliance policies and our approach to risk management,
dealing with risk identification and risk assessment for the principal operational, business, compliance and ethics risks facing our company,
whether internal or external in nature including, but not limited to, the risks and incident responses associated with: information security;
business continuity and disaster recovery; vendor management; operations risks; supply chain risks; employment and workplace conduct practices;
safety and environmental matters; and legal risks, overseeing our compliance programs, reviewing our compliance with relevant laws, regulations,
and corporate policies (including our Code of Ethics), overseeing significant complaints and other matters raised through our compliance
reporting mechanisms, including the review and investigation of such matters as necessary, reviewing significant government inquiries
or investigations and other significant legal actions, reviewing information about current and emerging legal and regulatory compliance
risks and enforcement trends that may affect our business operations, performance or strategy, meeting, and reviewing and discussing with
management the implementation and enforcement of policies, standards, procedures and risk management programs, and compliance with applicable
laws and regulations, related to the manufacture and supply of products consistent with applicable high-quality and medical product
safety standards. The members of our Risk, Safety and Regulatory Committee are Pamela G. Marrone, Ph.D. (Chair), Donald A. McGovern,
Jr., MBA, and Francis Knuettel II, MBA. Our Board has determined that each member is independent under applicable NASDAQ listing
standards.
Delinquent Section 16(a) Reports
Section 16(a) of
the Exchange Act requires our directors and officers, and persons who beneficially own more than 10% of a registered class of the
Registrant’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of our securities with
the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file.
Based solely upon our review
of the Section 16(a) filings that have been furnished to us and filed publicly, we believe that during the year ended December 31,
2022, that no director, executive officer, or beneficial owner of more than 10% of our common stock failed to file a report on a timely
basis, except that: Larry Gold, our director, inadvertently failed to timely disclose one transaction on Form 4, and as a result,
one Form 4 was untimely filed.
Pursuant to SEC rules, we
are not required to disclose in this filing any failure to timely file a Section 16(a) report that has been disclosed by us
in a prior annual report or proxy statement.
Website Availability of Documents
The charters of the Audit
Committee, Compensation Committee and Nominating and Corporate Governance Committee and our Code of Business Conducts and Ethics can be
found on our website at https://ir.180lifesciences.com/corporate-governance/governance-documents. Unless specifically stated
herein, documents and information on our website are not incorporated by reference in this Amendment No. 1.
Stockholder Communications with the
Board of Directors
Our stockholders and other
interested parties may communicate with members of the Board of Directors by submitting such communications in writing to our Corporate
Secretary, 3000 El Camino Real, Bldg. 4, Suite 200, Palo Alto, California 94306, who, upon receipt of any communication other than
one that is clearly marked “Confidential,” will note the date the communication was received, open the communication,
make a copy of it for our files and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of
any communication that is clearly marked “Confidential,” our Corporate Secretary will not open the communication, but
will note the date the communication was received and promptly forward the communication to the director(s) to whom it is addressed.
If the correspondence is not addressed to any particular board member or members, the communication will be forwarded to a board member
to bring to the attention of the Board of Directors.
Lead Independent Director
Our lead independent director
has a clearly defined set of responsibilities and provides significant independent Board leadership. Donald A. McGovern, Jr., MBA,
has served as our lead independent director since March 2021.
Our lead director: will preside
at any meetings of the independent directors, including executive sessions, and take the lead role in communicating to the Co-Chairmen any
feedback, as appropriate; will (a) assist in the recruitment of board candidates; (b) have active involvement in board evaluations;
(c) have active involvement in establishing committee membership and committee chairs; and (d) have active involvement in the
evaluation of the chief executive officer; will provide board performance feedback to the Co-Chairmen; will work with committee chairs
as necessary to ensure committee work is conducted at the committee level and appropriately reported to the board; will communicate with
the independent directors between meetings when appropriate; and will recommend consultants and outside advisors to the board as necessary
or appropriate. The lead director may also attend meetings of committees on which the lead director is not a member.
Classified Board of Directors
The Board of Directors is
divided into two classes. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be
elected to serve from the time of election and qualification until the second annual meeting following the election. The directors are
divided among the two classes as follows:
| ● | the Class I directors are Lawrence Steinman, James N. Woody, Russell T. Ray and Francis
Knuettel II, and their terms expire at the 2023 annual meeting of stockholders; and |
| | |
| ● | the Class II directors are Larry Gold, Sir Marc Feldmann, Donald A. McGovern, Jr., Teresa M. DeLuca
and Pamela G. Marrone, and their terms expire at the annual meeting of stockholders to be held in 2024. |
Any additional directorships
resulting from an increase in the number of directors will be distributed among the two classes so that, as nearly as possible, each class
will consist of one-half of the directors. The division of the Board of Directors into two classes with staggered
two-year terms may delay or prevent a change of our management or a change in control.
Executive Sessions of the Board of Directors
The independent members of
our Board of Directors meet in executive session (with no management directors or management present) from time to time. The executive
sessions include whatever topics the independent directors deem appropriate.
Code of Ethics
We have adopted a Code of
Ethics applicable to our directors, officers and employees, which we filed as an exhibit to the registration statement that we filed in
connection with our IPO. You can review our Code of Ethics by accessing our public filings at the SEC’s web site at www.sec.gov.
In addition, a copy of our Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to
or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. There have been no waivers granted with
respect to our Code of Ethics to any such officers or employees to date.
Policy on Equity Ownership
The
Company does not have a policy on equity ownership at this time. However, as illustrated under “Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters”, below, all current Named Executive
Officers and directors are beneficial owners of stock of the Company.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Executive Compensation Table
The following table sets forth
certain information concerning compensation earned by or paid to certain persons who we refer to as our “Named Executive Officers”
for services provided for the fiscal years ended December 31, 2022 and 2021. Our Named Executive Officers include persons who
(i) served as our, or 180’s, principal executive officer or acted in a similar capacity during the years ended December 31,
2022 and 2021, (ii) were serving at fiscal year-end as our two most highly compensated executive officers, other than the principal
executive officer, whose total compensation exceeded $100,000, and (iii) if applicable, up to two additional individuals for whom
disclosure would have been provided as a most highly compensated executive officer, but for the fact that the individual was not serving
as an executive officer at fiscal year-end.
Name and Principal Position | |
Year | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($) | | |
Non-Equity
Incentive Plan
Compensation | | |
All Other Compensation ($) | | |
Total ($) | |
James N. Woody | |
2022 | |
$ | 463,500 | | |
$ | (*) | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 463,500 | |
CEO and Director | |
2021 | |
$ | 448,270 | | |
$ | 50,000 | | |
$ | — | | |
$ | 4,262,492 | (a) | |
$ | — | | |
$ | — | | |
$ | 4,760,762 | |
Ozan Pamir | |
2022 | |
$ | 309,000 | | |
$ | (*) | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 309,000 | |
CFO | |
2021 | |
$ | 304,355 | | |
$ | 52,500 | | |
$ | — | | |
$ | 548,035 | (b) | |
$ | — | | |
$ | — | | |
$ | 904,890 | |
Quan Anh Vu(1) | |
2022 | |
$ | 401,700 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 333,490 | (2) | |
$ | 735,190 | |
Former COO and CBO | |
2021 | |
$ | 65,000 | | |
$ | — | | |
$ | — | | |
$ | 846,573 | (c) | |
$ | — | | |
$ | — | | |
$ | 911,573 | |
Jonathan Rothbard | |
2022 | |
$ | 268,906 | | |
$ | (*) | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 268,906 | |
Chief Scientific Officer | |
2021 | |
$ | 372,034 | | |
$ | 10,000 | | |
$ | 160,671 | (d) | |
$ | 923,534 | (e) | |
$ | — | | |
$ | — | | |
$ | 1,466,239 | |
Does not include perquisites
and other personal benefits or property, unless the aggregate amount of such compensation is more than $10,000. No executive officer earned
non-equity incentive plan compensation or nonqualified deferred compensation during the periods reported above. Option Awards and
Stock Awards represent the aggregate grant date fair value of awards computed in accordance with Financial Accounting Standards Board
Accounting Standard Codification Topic 718. For additional information on the valuation assumptions with respect to the restricted
stock grants, refer to “Note 12 — Stockholders’ Equity” to the audited financial statements included herein.
No executive officer serving as a director received any compensation for services on the Board of Directors separate from the compensation
paid as an executive for the periods above.
| * | The amount of each executive’s 2022 bonuses has not yet been
determined by the Compensation Committee and/or the Board of Directors as of the date of this filing, and are therefore not included in
the table above. The amount of each executive’s bonuses for fiscal 2022, if any, will be disclosed in a separate filing under Item 5.02(f) of
Form 8-K within four days of the date finalized by the Compensation Committee and/or the Board of Directors. Such bonuses
may be in the form of cash or equity or a combination of cash and equity. |
| | |
| (1) | On October 29, 2021, the Board appointed Mr. Quan
Anh Vu as Chief Operating Officer/Chief Business Officer (“COO/CBO”) of the Company. On October 27, 2021, and effective
on November 1, 2021, the Company entered into an Employment Agreement with Quan Ahn Vu. In consideration for performing services
under the agreement, the Company agreed to pay Mr. Vu a starting salary of $390,000 per year. As of the date of this proxy statement,
all of the amounts owed to Mr. Vu have been fully paid. Mr. Vu’s employment agreement was terminated effective January 15,
2023. |
(2) | Represents amounts paid to Mr. Vu for the termination of
his employment agreement. |
(a) | Represents the value of ten year options to purchase 70 ,000 shares
of common stock with an exercise price of $88.60 per share which were granted on February 26, 2021. |
(b) | Represents the value of ten year options to purchase 9,000 shares
of common stock with an exercise price of $88.60 per share which were granted on February 26, 2021. |
(c) | Represents the value of ten year options to purchase 13,750 shares
of common stock with an exercise price of $79.00 per share which were granted on December 8, 2021. |
(d) | Represents the value of 1,215 shares of common stock issued
to Dr. Rothbard in consideration for services rendered to the Company as Chief Scientific Officer on April 7, 2021. |
(e) | Represents the value of ten year options to purchase 15,000 shares
of common stock with an exercise price of $79.00 per share which were granted on December 8, 2021. |
Bonuses
No bonuses were paid to the
officers named in the table above during the fiscal years ended December 31, 2022 or 2021, except as disclosed in the table
above.
Outstanding Equity Awards at Fiscal
Year End
| |
| Option awards | |
Name | |
| Number
of
securities
underlying
unexercised
options (#)
exercisable | | |
| Number
of
securities
underlying
unexercised
options (#)
unexercisable | | |
| Option
exercise
price
($) | | |
| Option
expiration
date | |
James N. Woody | |
| 48,222 | | |
| 21,778 | (1) | |
$ | 88.60 | | |
| 2/26/2031 | |
Ozan Pamir | |
| 6,200 | | |
| 2,800 | (1) | |
$ | 88.60 | | |
| 2/26/2031 | |
Quan Anh Vu* | |
| 3,724 | | |
| 10,026 | (2) | |
$ | 79.00 | | |
| 12/8/2031 | |
Jonathan Rothbard | |
| 10,417 | | |
| 4,583 | (3) | |
$ | 79.00 | | |
| 12/8/2031 | |
| * | Employment terminated effective January 15, 2023. |
| | |
| (1) | (a) 1/5th of such options vesting on the
grant date (February 26, 2021); and (b) 4/5ths of such options vesting ratably on a monthly basis over the following 36 months
on the last day of each calendar month. |
| (2) | The options vest in 48 equal monthly installments, beginning
on the last day of November 2021, and continuing on the last day of each calendar month thereafter, subject to the holder’s
continued service to the Company on such vesting dates. |
| (3) | The options vest at the rate of 1/3rd of such
options at the date of grant (December 8, 2021) with the remaining options vesting at the rate of 24 equal monthly installments,
beginning on the last day of December 31, 2021, and continuing on the last day of each calendar month thereafter, subject
to the Reporting Person’s continued service to the Company on such vesting dates. |
There were no outstanding unvested
stock awards as of December 31, 2022.
Executive and Other Compensation Agreements
General
Upon the Closing of the Business
Combination, James N. Woody, M.D., Ph.D., the Chief Executive Officer of 180, was appointed to serve as the Chief Executive Officer
of our Company, and Jonathan Rothbard, Ph.D., the Chief Executive Officer and Chief Scientific Officer of Katexco, was appointed
to serve as the Chief Scientific Officer of our Company. Also following the Closing of the Business Combination, Ozan Pamir, the Chief
Financial Officer of 180, continued to serve in that position for 180, and on November 27, 2020, he was appointed to serve as the
Interim Chief Financial Officer of our Company. In April 2023, Mr. Pamir was appointed as Chief Financial Officer of the Company. Effective
on October 29, 2021, the Board appointed Mr. Quan Anh Vu as Chief Operating Officer/Chief Business Officer (“COO/CBO”)
of the Company and he served in that role until his resignation on January 18, 2023.
A description of the employment
or services agreements with each of the foregoing persons is set forth below.
Description of Employment Agreements
Each
of the salaries of the executives described below and certain of the compensation payable to the consultants described below, are subject
to the increases in salary and the temporary salary accruals discussed below under “Salary Increases and Temporary Salary
and Compensation Accruals”.
James N. Woody 180 Employment Agreement
James N. Woody, M.D.,
Ph.D. and 180 entered into an employment agreement on July 1, 2020 (which agreement was amended on September 18, 2020), effective
as of July 1, 2020, whereby Dr. Woody served as the Chief Executive Officer of 180 and began serving as our Chief Executive
Officer following the Closing of the Business Combination. The initial term of the employment agreement started on July 1, 2020,
was for a period of one (1) year, and was subject to automatic renewal for consecutive one (1) year terms unless either party
provided 60 days’ notice. Dr. Woody’s annual base salary was initially $250,000 per year from July 1, 2020
to September 1, 2020, and increased to $360,000 per year on September 1, 2020. The agreement provided that Dr. Woody’s
salary was to be renegotiated with the completion of the next qualified financing of over $20 million. Dr. Woody is eligible
to participate in any stock option plans and receive other equity awards, as determined from time to time.
James N. Woody Amended and Restated Employment
Agreement
On February 25, 2021,
the Company entered into an Amended and Restated Employment Agreement with James N. Woody (the “A&R Agreement”),
dated February 24, 2021, and effective November 6, 2020, which replaced and superseded the July 2020 agreement with 180
as discussed above. Pursuant to the A&R Agreement, Dr. Woody agreed to serve as the Chief Executive Officer of the Company. The
A&R Agreement has a term of three years from its effective date (through November 6, 2023) and is automatically renewable
thereafter for additional one-year periods, unless either party provides the other at least 90 days written notice of their
intent to not renew the agreement. Dr. Woody’s annual base salary under the agreement was initially increased to $450,000 per
year, subject to automatic 5% yearly increases. For the 2021 year, Dr. Woody’s salary was $450,000, for 2022, Dr. Woody’s
salary was $463,500, and for the 2023 year, Dr. Woody’s salary will be $490,000 (see also “Payment of Back Pay; 2021 Bonuses
and Increases in Salaries”, below). The Board of Directors, as recommended by the Compensation Committee, may increase Dr. Woody’s
salary from time to time, which increases do not require an amendment to his agreement.
Dr. Woody is also eligible
to receive an annual bonus, with a target bonus equal to 45% of his then-current base salary, based upon the Company’s
achievement of performance and management objectives as set and approved by the Board of Directors and/or Compensation Committee in consultation
with Dr. Woody. At Dr. Woody’s option, the annual bonus can be paid in cash or the equivalent value of the Company’s
common stock or a combination therefore. The Board of Directors, as recommended by the Compensation Committee or separately, may also
award Dr. Woody bonuses from time to time (in stock, options, cash, or other forms of consideration) in its discretion.
Under the employment agreement,
Dr. Woody is eligible to participate in any stock option plans and receive other equity awards, as determined by the Board of Directors
from time to time.
The agreement can be terminated
any time by the Company for cause (subject to the cure provisions of the agreement), or without cause (with 60 days prior written
notice to Dr. Woody), by Dr. Woody for good reason (as described in the agreement, and subject to the cure provisions of the
agreement), or by Dr. Woody without good reason. The agreement also expires automatically at the end of the initial term or any renewal
term if either party provides notice of non-renewal as discussed above.
In the event the A&R Agreement
is terminated without cause by the Company, or by Dr. Woody for good reason, the Company agreed to pay him the lesser of 18 months
of salary or the remaining term of the agreement, the payment of any accrued bonus from the prior year, his pro rata portion of any current
year’s bonus and health insurance premiums for the same period that he is to receive severance payments (as discussed above).
The A&R Agreement contains
standard and customary invention assignment, indemnification, confidentiality and non-solicitation provisions, which remain in effect
for a period of 24 months following the termination of his agreement.
Dr. Rothbard’s Employment Agreement
On August 21, 2019, 180
entered into an Employment Agreement with Dr. Rothbard which replaced a prior agreement, which was not effective until the Closing
Date, but became effective on such date. The Employment Agreement has a term of three years from the Closing Date (i.e., until November 6,
2023), automatically extending for additional one-year terms thereafter unless either party terminates the agreement with at least
90 days prior written notice before the next renewal date.
The Employment Agreement provides
for Dr. Rothbard to be paid a salary of $375,000 per year, with automatic increases in salary, on the first anniversary of the effective
date, and each anniversary thereafter, of 10%. For the 2021 year, Dr. Rothbard’s salary was $375,000, for the 2022 year, Dr. Rothbard’s
salary was $268,906, and for 2023, Dr. Rothbard’s salary will be $200,000 (see also “Payment of Back Pay; 2021 Bonuses
and Increases in Salaries”, below). The salary for the 2023 year represents Dr. Rothbard’s commitment of 50% of his work-related
time to the Company. The Board of Directors, as recommended by the Compensation Committee, may increase Dr. Rothbard’s salary from
time to time, which increases do not require an amendment to his agreement.
The Employment Agreement provides
for Dr. Rothbard to receive an annual bonus subject to meeting certain objectives set by the Board of Directors, with a targeted
bonus amount of 50% of his then salary, payable on or before February 15th of each year.
The Employment Agreement also
provides for Dr. Rothbard to earn equity compensation in the discretion of the Board of Directors. Dr. Rothbard may also be
issued bonuses, from time to time, in the discretion of the Board of Directors, which may be payable in cash, stock or options.
In the event Dr. Rothbard’s
employment is terminated by the Company without cause, by Dr. Rothbard for good reason (as discussed in the employment agreement),
or the agreement is not renewed by the Company, he is required to be paid 36 months of severance pay (if such termination occurs
during the first year of the term); 24 months of severance pay (if such termination occurs during the second year of the term); and
12 months of severance pay (if such termination occurs after the second year of the term), along with any accrued bonus amount and
a pro rata annual bonus based on the targeted bonus, as well as the payment of health insurance premiums for the same period over which
he is required to be paid severance pay.
The Employment Agreement was
amended effective January 1, 2022, to override the automatic annual salary increases of 10% per annum and instead provide for future increases
in the sole determination of the Board of Directors. The Employment Agreement was further amended effective June 1, 2022, to adjust the
base salary of Dr. Rothbard to $193,125.
Ozan Pamir Katexco Employment Agreement
Our indirect wholly-owned subsidiary
Katexco entered into an employment agreement with Mr. Pamir on October 22, 2018. The agreement provides for an indefinite term
that continues until termination. The initial annual base salary set forth in the agreement was CAD $120,000, with annual increases as
determined by the Board of Directors. The agreement also provided Mr. Pamir with a CAD $20,000 signing bonus. Any bonuses, including
stock options, are in the sole discretion of Katexco, depending on financial circumstances and the performance of the services under the
agreement. In 2019, the compensation was increased to $120,000 per annum in US dollars.
On February 1, 2020,
there was an amendment to Mr. Pamir’s consulting agreement with Katexco, whereby the contract was transferred from Katexco
to Katexco Pharmaceuticals Corp. — US.
Ozan Pamir Company Employment Agreement
On February 25, 2021,
the Company entered into an Employment Agreement dated February 24, 2021, and effective November 6, 2020, which agreement was
amended and corrected on March 1, 2021, to be effective as of the effective date of the original agreement (which amendment and correction
is retroactively updated in the discussion of the agreement), with Ozan Pamir, the Company’s then Interim Chief Financial Officer,
which replaced and superseded Mr. Pamir’s agreement with Katexco, as discussed above. Pursuant to the agreement, Mr. Pamir
agreed to serve as the Interim Chief Financial Officer of the Company; and the Company agreed to pay Mr. Pamir $300,000 per year
for 2021, which was increased to $309,000 for the 2022 year, and, based on his appointment as Chief Financial Officer in April 2023, and
$380,000 for the 2023 year (see also “Payment of Back Pay; 2021 Bonuses and Increases in Salaries”, below)). Such salary
is to be increased to a mutually determined amount upon the closing of a new financing, and shall also be increased on a yearly basis.
The Board of Directors, as recommended by the Compensation Committee, may increase Mr. Pamir’s salary from time to time, which increases
do not require an amendment to his agreement.
Under the agreement, Mr. Pamir
is eligible to receive an annual bonus, in a targeted amount of 30% of his then salary for the 2021 and 2022 years, and 40% for the 2023
year (see also “Payment of Back Pay; 2021 Bonuses and Increases in Salaries”, below)), based upon the Company’s
achievement of performance and management objectives as set and approved by the Chief Executive Officer, in consultation with Mr. Pamir.
The bonus amount is subject to adjustment. The Board of Directors, as recommended by the Compensation Committee of the Company (and/or
the Compensation Committee) or separately, may also award Mr. Pamir bonuses from time to time (in stock, options, cash, or other
forms of consideration) in its discretion.
Under the employment agreement,
Mr. Pamir is also eligible to participate in any stock option plans and receive other equity awards, as determined by the Board of
Directors from time to time.
The agreement can be terminated
at any time by the Company with or without cause with 60 days prior written notice and may be terminated by Mr. Pamir at any
time with 60 days prior written notice. The agreement may also be terminated by the Company with sixty days’ notice in
the event the agreement is terminated for cause under certain circumstances. Upon the termination of Mr. Pamir’s agreement
by the Company without cause or by Mr. Pamir for good reason, the Company agreed to pay him three months of severance pay.
The agreement contains standard
and customary invention assignment, indemnification, confidentiality and non-solicitation provisions, which remain in effect for
a period of 24 months following the termination of his agreement.
On May 27, 2021, the
Company entered into a Second Amendment to Employment Agreement with Ozan Pamir (the “Second Amendment”). The Second
Amendment amended the terms of Mr. Pamir’s employment solely to provide that all compensation payable to Mr. Pamir under
such agreement would be paid directly by the Company.
On September 14, 2021,
the Board authorized a discretionary bonus of $30,000 to Mr. Pamir in consideration for services rendered.
Quan Anh Vu Executive Employment Agreement
(terminated); and Separation Agreement
On October 27, 2021,
and effective on November 1, 2021, the Company entered into an Employment Agreement with Quan Anh Vu, its then Chief Operating Officer/Chief
Business Officer.
Pursuant
to the employment agreement, Mr. Vu agreed to serve as Chief Operating Officer/Chief Business Officer for the Company. In consideration
therefore, the Company agreed to pay Mr. Vu a starting salary of $390,000 per year, subject to annual increases of up to 5% (on
each November 1st, but effective as of the following January 1st, including a 3% increase to $401,700
for 2022, as discussed below under “Salary Increases and Temporary Salary and Compensation Accruals”).
In addition to the base salary, Mr. Vu was eligible to receive an annual bonus, with a target bonus opportunity of 50% of the then-current base
salary, based on achievement of performance and management objectives established by the CEO and the Compensation Committee, in consultation
with Mr. Vu, payable on or before March 31st of the year following the year in which the bonus is earned. Mr. Vu
could elect the Annual Bonus to be paid in cash or the equivalent value in the Company’s common stock, or a combination of the
two.
The Employment Agreement
contains standard and customary invention assignment, indemnification, confidentiality and non-solicitation provisions, which remain
in effect for a period of 24 months following the termination of the agreement.
On January 18, 2023, Mr.
Vu resigned as Chief Operating/Chief Business Officer of the Company effective January 15, 2023, and entered into a Separation and Release
Agreement with the Company (as amended, the “Separation Agreement”).
Under the Separation Agreement,
the Company agreed to pay Mr. Vu (a) $297,440, less all applicable withholdings and required deductions; and (b) reimburse up to $1,100
a month for eight months for Mr. Vu’s health insurance expenses, whether under COBRA or otherwise (collectively, (a) and (b), the
“Severance Payment”). The Severance Payment (except for the amounts payable pursuant to (b) which shall be paid by
the 15th day of each calendar month during the applicable eight-month period) is required to be paid within 30 days of the Separation
Date (the “Payment Date”). In addition to the Severance Payment, by the Payment Date, the Company agreed to pay Mr.
Vu $73,645 for accrued backpay and $36,050 for accrued paid time off. Under the Separation Agreement, Mr. Vu agreed that his resignation
was voluntary, provided a customary general release to the Company and also agreed to certain confidentiality, non-disclosure, non-solicitation,
non-disparagement, and cooperation covenants in favor of the Company.
On March 29, 2023, an error
in the Separation Agreement was corrected by the parties’ entry into a First Amendment to Separation Agreement (the “First
Amendment”), effective as of the date of the original agreement, which clarified that none of the amount received by Mr. Vu
pursuant to the Separation Agreement related to a bonus for 2021.
Description of Material Consulting
Agreements
Inflammation consultancy Agreements with each
of Prof. Sir Marc Feldmann and Prof. Jagdeep Nanchahal
On November 1, 2013,
our wholly-owned subsidiary 180 LP entered into letter agreements regarding inflammation consultancy services (each, an “Inflammation
Consultancy Agreement”, and, collectively, the “Inflammation Consultancy Agreements”) with Isis Innovation
Limited for the services of each of Prof. Sir Marc Feldmann and Prof. Jagdeep Nanchahal (each, an “Inflammation Consultant”).
Pursuant to the Inflammation Consultancy Agreements, each Inflammation Consultant agreed to provide advice and expertise on inflammatory
and degenerative diseases including fibrosis as exemplified by Dupuytren’s Disease and osteoinduction (bone formation), in relation
to the technology, programs and products of 180 LP, and, specifically, to provide general and specific advice and guidance on how 180
LP might further develop its different programs that are ongoing, contemplated, or conceived at or by 180 LP (the “Inflammation
Consulting Services”).
In consideration of the Inflammation
Consulting Services, Prof. Sir Marc Feldmann and Prof. Jagdeep Nanchahal were paid a fixed fee of $500 and $10,000 per annum, respectively.
The initial term of each
Advisory Services Agreement was until November 1, 2015. On November 8, 2015, each of the Advisory Services Agreement was extended
until November 1, 2020. A new contract with Prof. Jagdeep Nanchahal is described below which replaced the prior Advisory Services
Agreement with Prof. Nanchahal. Prof. Sir Marc Feldmann’s agreement was terminated on November 1, 2020.
Service Agreement with Prof. Sir Marc Feldmann
On June 1, 2018, CannBioRex
Pharma Limited (“CannBioRex”) and Prof. Sir Marc Feldmann Ph.D., our Executive Co-Chairman, entered into a Service
Agreement (the “Feldmann Employment Agreement”). Pursuant to the Feldmann Employment Agreement, Prof. Sir Feldmann
serves as the Chairman, CEO and Executive Director of CannBioRex or in such other capacity consistent with his status. Prof. Sir Feldmann’s
responsibilities include those customary for the roles in which he serves. Prof. Sir Feldmann originally received compensation of £115,000
per year, with annual compensation reviewed by the Board and eligibility for discretionary bonuses, as determined by the Board. CannBioRex
also reimburses Prof. Sir Feldmann’s travelling and other business expenses.
Pursuant to the Feldmann
Employment Agreement, all intellectual property rights created by Prof. Sir Feldmann or related to his employment belong to and vest
in CannBioRex.
The Feldmann Employment Agreement
contains a customary non-compete clause prohibiting Prof. Sir Feldmann from working for any competing businesses during the term
of his employment, or holding equity in other businesses, except he may hold or beneficially own securities of publicly-traded companies
if the aggregate beneficial interests of him and his family does not exceed 5% of that class of securities.
Prof. Sir Feldmann is also
prohibited for 12 months following termination (the “Post-Termination Period”) to be involved in any capacity
with a competing business or potential joint venturer in the United Kingdom or in any other country. During the Post-Termination Period,
he may not solicit business from CannBioRex and its affiliates’ customers; or any company with whom he was actively involved in
the course of his employment; or about which he holds confidential information. Prof. Sir Feldmann further covenants to not interfere
with CannBioRex’s business relationships by inducing or attempting to induce suppliers to take adverse actions during the Post-Termination Period.
He also agreed not to induce or attempt to induce any CannBioRex employee to leave the company during the Post-Termination Period.
The Feldmann Employment Agreement
contains customary non-disclosure and confidentiality obligations, sick leave and vacation time.
The Feldmann Employment Agreement
does not have a fixed term. Either party may terminate the agreement by delivering written notice 9 months in advance. CannBioRex
may also terminate the Feldmann Employment Agreement at any time with immediate effect by giving written notice. If CannBioRex terminates
Prof. Sir Feldmann’s employment without providing 9 months written notice, he will become entitled to a payment equal to his
basic salary he would have been entitled to receive if 9 months’ notice were given. The governing law for the Feldmann Employment
Agreement is the law of England.
The Board of Directors, as
recommended by the Compensation Committee of the Company (and/or the Compensation Committee) or separately, may also award Prof. Sir
Feldmann bonuses from time to time (in stock, options, cash, or other forms of consideration) in its discretion.
On November 17, 2021,
the Board of Directors, as recommended by the Compensation Committee of the Company, increased the annual compensation of Prof. Sir Feldmann
to $225,000 per year.
Consultancy Agreement with Prof. Lawrence
Steinman
On May 31, 2018, CannBioRex
Pharma Limited (“CannBioRex”) and Prof. Lawrence Steinman, our Executive Co-Chairman, entered into a Consultancy Agreement
(the “Steinman Agreement”). Prof. Steinman committed to making himself available to provide services to CannBioRex
that may require Prof. Steinman’s expertise. In consideration for the services provided, CannBioRex will pay Prof. Steinman approximately
$50,000 per year, in monthly installments. Prof. Steinman is also entitled to reimbursement of all business expenses, including travel.
Although Prof. Steinman is
not prohibited from engaging in other business activities during the term of the agreement, he must remain compliant with the terms of
the agreement and seek prior written consent before conducting business with a business similar to, or competitive with, CannBioRex.
The Steinman Agreement contains customary confidentiality and assignment of intellectual property provisions.
The Steinman Agreement had
a two-year term. The agreement may be terminated earlier by Prof. Steinman or CannBioRex with six months’ written notice.
CannBioRex may terminate the agreement at any time with immediate effect if Prof. Steinman fails or neglects to efficiently and diligently
perform services pursuant to the agreement or breaches its terms; is guilty of fraud, dishonesty or acts in a manner which the Company
reasonably deems is likely to disparage himself or the Company; becomes unable to provide services for ten working days in any month;
or Prof. Steinman becomes bankrupt or arranges for compromises with his creditors. Upon termination of the Steinman Agreement, Prof.
Steinman must return property related to the consultancy and delete his own electronic records. The parties have continued to operate
under the terms of the agreement even though the agreement expired.
In addition, Prof. Steinman
had a verbal agreement with Katexco Pharmaceuticals Corp., a wholly-owned subsidiary of the Company, to provide services for $100,000
per year, since Katexco’s incorporation in 2018. This agreement was replaced and superseded by the consulting agreement discussed
below.
Consulting Agreement with Prof. Lawrence Steinman
On November 17, 2021,
and effective on November 1, 2021, the Company entered into a Consulting Agreement with Lawrence Steinman, M.D., the Company’s
Executive Co-Chairman (the “Consulting Agreement”). Pursuant to the Consulting Agreement, Dr. Steinman agreed
to provide certain consulting services to the Company, including, but not limited to, participating in defining and setting strategic
objectives of the Company; actively seeking out acquisition and merger candidates; and having primary scientific responsibility for the
Company’s α7nAChR platform (collectively, the “Services”). The term of the agreement was for one
year (the “Initial Term”); provided that the agreement automatically extends for additional one year periods after
the Initial Term (each an “Automatic Renewal Term” and the Initial Term together with all Automatic Renewal Terms,
if any, the “Term”), subject to the Renewal Requirements (described below), in the event that neither party provided
the other written notice of their intent not to automatically extend the term of the agreement at least 30 days prior to the end
of the Initial Term or any Automatic Renewal Term, and as such, since neither party has terminated the agreement, the agreement is currently
in effect until November 1, 2023, subject to further Automatic Renewal Terms. The Term can only be extended for an Automatic Renewal
Term, provided that (i) Dr. Steinman is re-elected to the Board of Directors at the Annual Meeting of Stockholders of
the Company immediately preceding the date that such Automatic Renewal Term begins; (ii) the Board affirms his appointment as Co-Chairman for
the applicable Automatic Renewal Term (or fails to appoint someone else as Co-Chairman prior to such applicable Automatic Renewal
Term); and (iii) Dr. Steinman is continuing in his role of having the responsibility for the scientific development for the
Company’s α7nAChR platform (the “Renewal Requirements”). The Consulting Agreement also expires immediately
upon the earlier of: (i) the date upon which Dr. Steinman no longer serves as Co-Chairman and no longer has primary scientific
responsibility for our α7nAChR platform; and (ii) any earlier date requested by either (1) the Company (as evidenced
by a vote of a majority of the Board (excluding Dr. Steinman) at a meeting of the Board), or (2) Dr. Steinman (as evidenced
by written notice from Dr. Steinman to the Board). Additionally, the Company may terminate the Consulting Agreement immediately
and without prior notice if Dr. Steinman is unable or refuses to perform the Services, and either party may terminate the Consulting
Agreement immediately and without prior notice if the other party is in breach of any material provision of the Consulting Agreement.
The Company agreed to pay
Dr. Steinman $225,000 per year during the term of the agreement, along with a one-time payment of $43,750, representing the
difference between his old compensation and new compensation, dating back to April 1, 2021. Pursuant to the Consulting Agreement,
Dr. Steinman agreed to not compete against the Company, unless approved in writing by the Board of Directors, during the term of
the agreement, and also agreed to certain customary confidentiality provisions and assignment of inventions requirements. The Consulting
Agreement also has a 12 month non-solicitation prohibition following its termination.
Beginning in calendar year
2022, for each year during the Term of the Consulting Agreement, the Company will, subject to future approval by the Board, grant Dr. Steinman
$125,000 of value of equity compensation. Future equity grants will vest over a 48 month period and be in accordance with the Plan.
Timing of the future grants, nature of the equity grants (e.g., RSU, PSU, restricted stock, etc.) and any changes in the value of future
equity will be recommended by the Company’s Compensation Committee and/or Audit Committee and approved by the Board.
The Board of Directors, as
recommended by the Compensation Committee of the Company (and/or the Compensation Committee) or separately, may also award Dr. Steinman
bonuses from time to time (in stock, options, cash, or other forms of consideration) in its discretion.
Prof. Jagdeep Nanchahal Consulting Agreement
On February 25, 2021,
we (and CannBioRex Pharma Limited, which was added as a party to the agreement later), entered into a Consultancy Agreement dated February 22,
2021, and effective December 1, 2020, with Prof. Jagdeep Nanchahal (as amended, the “Consulting Agreement”).
Prof. Nanchahal has been providing services to the Company and/or its subsidiaries since 2014, and is formerly a greater than 5% stockholder
of the Company and the Chairman of our Clinical Advisory Board.
On March 31, 2021, we entered
into a First Amendment to Consultancy Agreement with Prof. Jagdeep Nanchahal, which amended the Consultancy Agreement entered into with
Prof. Nanchahal on February 25, 2021, to include CannBioRex Pharma Limited, a corporation incorporated and registered in England
and Wales (“CannBioRex”), and an indirect wholly-owned subsidiary of the Company, as a party thereto, and to
update the prior Consultancy Agreement to provide for cash payments due to Prof. Nanchahal to be paid by CannBioRex, for tax purposes,
provide for CannBioRex to be party to certain other provisions of the agreement and to provide for the timing of certain cash bonuses
due under the terms of the agreement.
Prof. Nanchahal is a surgeon
scientist focusing on defining the molecular mechanisms of common diseases and translating his findings through to early phase clinical
trials. He undertook his Ph.D., funded by the U.K. Medical Research Council, whilst a medical student in London and led a lab group
funded by external grants throughout his surgical training. After completing fellowships in microsurgery and hand surgery in the USA
and Australia, he was appointed as a senior lecturer at Imperial College. His research is focused on promoting tissue regeneration by
targeting endogenous stem cells and reducing fibrosis. In 2013, his group identified anti-tumor necrosis factor (TNF) as a
therapeutic target for Dupuytren’s disease, a common fibrotic condition of the hand. He is currently leading a phase 2b clinical
trial funded by the Wellcome Trust and Department of Health to assess the efficacy of local administration of anti-TNF in patients
with early-stage Dupuytren’s disease. He is a proponent of evidence-based medicine and was the only plastic surgery member
of the NICE Guidance Development Groups on complex and non-complex fractures. He was a member of the group that wrote the Standards
for the Management of Open Fractures published in 2020. This is an open-source publication to facilitate the care of patients with
these severe injuries.
Pursuant to the Consulting
Agreement, Prof. Nanchahal agreed, during the term of the agreement, to serve as a consultant to the Company and provide such services
as the Chief Executive Officer and/or the Board of Directors of the Company shall request from time to time, including but not be limited
to: (1) conducting clinical trials in the fields of Dupuytren’s disease, frozen shoulder and post-operative delirium/cognitive
decline; and (2) conducting laboratory research in other fibrotic disorders, including fibrosis of the liver and lung (collectively,
the “Services”).
In consideration for providing
the Services, the Company (through CannBioRex Pharma Limited) agreed to pay Prof. Nanchahal 15,000 British Pounds (GBP) per
month (approximately $20,800) during the term of the agreement, increasing to GBP 23,000 (approximately $32,000) on the date
(a) of publication of the data from the phase 2b clinical trial for Dupuytren’s disease (RIDD) and (b) the date
that the Company has successfully raised over $15 million in capital. The fee will increase annually thereafter to reflect progression
in other clinical trials and laboratory research as approved by the Board of Directors. The Company also agreed to pay Prof. Nanchahal
a bonus (“Bonus 1”) in the sum of GBP 100,000 upon submission of the Dupuytren’s disease clinical trial
data for publication in a peer-reviewed journal. In addition, for prior work performed, including completion of the recruitment
to the RIDD (Dupuytren’s) trial, the Company agreed to pay Prof. Nanchahal GBP 434,673 (approximately $596,545)(“Bonus
2”). At the election of Prof. Nanchahal, Bonus 2 could be paid at least 50% (fifty percent) or more, as Prof. Nanchahal elected,
in shares of the Company’s common stock, at a share price of $60.00 per share, or the share price on the date of the grant, whichever
is lower, with the remainder paid in GBP. Bonus 2 was deemed earned and payable upon the Company raising a minimum of $15 million
in additional funding, through the sale of debt or equity, after December 1, 2020 (the “Vesting Date”) and
was not to be accrued, due or payable prior to such Vesting Date (which funding was raised on August 23, 2021). Finally, Prof. Nanchahal
shall receive another one-time bonus (“Bonus 3”) of GBP 5,000 (approximately $7,000) on enrollment
of the first patient to the phase 2 frozen shoulder trial, and another one-time bonus (“Bonus 4”) of GBP
5,000 (approximately $7,000) for enrollment of the first patient to the phase 2 delirium/POCD trial.
Effective March 30,
2021, in satisfaction of amounts owed to Prof. Nanchahal for 50% of Bonus 2, the Company issued 5,035 shares of the Company’s
common stock to Prof. Nanchahal. Additionally, on April 15, 2021, in satisfaction of amounts owed to Prof. Nanchahal for an additional
19% of Bonus 2, the Company issued 1,886 of the Company’s common stock to Prof. Nanchahal. Both issuances were made under
the Company’s 2020 Omnibus Incentive Plan.
On August 23, 2021,
at the request of Prof. Nanchahal, the Company agreed to issue Prof. Nanchahal 3,077 shares of common stock in consideration for
the remaining 31% (or 134,748.63 GBP, or $184,605.62) of Bonus 2 (the “Nanchahal Shares”), based on a $60.00
per share price, which shares were issued on August 23, 2021. The shares were issued under the Company’s 2020 Omnibus Incentive
Plan.
On December 28, 2022, the
Company and CannBioRex Pharma Limited, a corporation incorporated and registered in England and Wales (“CannBioRex”),
and an indirect wholly-owned subsidiary of the Company, entered into a Third Amendment to Consultancy Agreement (the “Third
Amendment”) with Prof. Jagdeep Nanchahal, which amended the Consultancy Agreement with Prof. Nanchahal.
The Third Amendment amended
the Consultancy Agreement to provide that the monthly cash fee payable to Prof. Nanchahal pursuant to such agreement would remain at
its current rate, £23,000 per month, through December 31, 2022, and then increase to £35,000 per month during the term of
the Consultancy Agreement from January 1, 2023, until the end of the term of the Consultancy Agreement (collectively, the “Fee”).
The Third Amendment also provided that the Fee will be adjusted yearly with the recommendation of the Board of Directors or the Compensation
Committee of the Company, which will consider in its determination of the amount of such increase, the UK consumer price index and Prof.
Nanchahal’s contributions to advancing the Company’s mission, among other things. The Third Amendment also provided that
in the event the Consultancy Agreement is terminated by the Company for any reason other than cause, Prof. Nanchahal is entitled to a
lump sum payment of 12 months of his monthly fee as at the date of termination.
Notwithstanding the above,
the Board of Directors or Compensation Committee of the Company may grant Prof. Nanchahal additional bonuses from time to time in their
discretion, in cash, stock or options.
The Consulting Agreement
has an initial term of three years, and renews thereafter for additional three-year terms, until terminated as provided in
the agreement. The Consulting Agreement can be terminated by either party with 12 months prior written notice (provided the Company’s
right to terminate the agreement may only be exercised if Prof. Nanchahal fails to perform his required duties under the Consulting Agreement),
or by the Company immediately if (a) Prof. Nanchahal fails or neglects efficiently and diligently to perform the Services or is
guilty of any breach of its or his obligations under the agreement (including any consent granted under it); (b) Prof. Nanchahal
is guilty of any fraud or dishonesty or acts in a manner (whether in the performance of the Services or otherwise) which, in the
reasonable opinion of the Company, has brought or is likely to bring Prof. Nanchahal, the Company or any of its affiliates into disrepute
or is convicted of an arrestable offence (other than a road traffic offence for which a non-custodial penalty is imposed); or (c) Prof.
Nanchahal becomes bankrupt or makes any arrangement or composition with his creditors. If the Consulting Agreement is terminated by the
Company for any reason other than cause, Prof. Nanchahal is entitled to a lump sum payment of 12 months of his fee as at the date
of termination.
The Consulting Agreement
includes a 12 month non-compete and non-solicitation obligation of Prof. Nanchahal, preventing him from competing against
the Company in any part of any country in which he was actively engaged in the Company’s business, subject to certain exceptions,
including research conducted at the University of Oxford. The Consulting Agreement also includes customary confidentiality and assignment
of inventions provisions, in each case subject to the Company’s previously existing agreements with various universities, including
the University of Oxford, where Prof. Nanchahal serves as a Professor of Hand, Plastic and Reconstructive Surgery.
Salary Increases and Temporary Salary
and Compensation Accruals
Effective on April 27,
2022, the Company (directly or through an indirectly wholly-owned subsidiary of the Company) entered into (a) a First Amendment
to Amended and Restated Employment Agreement with Dr. Woody (the “First Woody Amendment”); (b) a First Amendment
to Employment Agreement with Mr. Vu (the “First Vu Amendment”); (c) a First Amendment to Employment Agreement
with Dr. Rothbard (“First Rothbard Amendment”); (d) a First Amendment to Employment Agreement with Prof.
Sir Feldmann (the “First Feldmann Amendment”); (e) a First Amendment to Consulting Agreement with Prof. Steinman
(the “First Steinman Amendment”); and (f) a Second Amendment to Consulting Agreement with Prof. Nanchahal (the
“Second Nanchahal Amendment”), which each amended the agreements currently in place with such individuals as discussed
above.
Pursuant to the First Woody
Amendment, First Vu Amendment and First Rothbard Amendment, each of Dr. Woody, Mr. Vu and Dr. Rothbard, agreed that effective
January 1, 2022, their base salaries of $450,000, $390,000 and $375,000, respectively (their “Base Salaries”)
(as provided for in their employment agreements) were amended to increase such amounts by 3% (the “Increase in Salary”)
and effective March 1, 2022, their base salaries were reduced by 20% each ($92,700, $80,340 and $96,563, respectively) and that
such reduced amounts (the “Accrued Amounts”) shall be accrued until such time as the Board of Directors determines
that the Company has sufficient cash on hand to pay such Accrued Amounts, which the Company expects will not be until it has raised a
minimum of $15,000,000 (the “Funding Determination Date”); and that $370,800, $321,360, and $289,688 of such base
salaries, shall be payable per the payroll practices of the Company in cash by the Company to each of Dr. Woody, Mr. Vu and
Dr. Rothbard, respectively, starting effective March 1, 2022 until the Funding Determination Date, and that on the Funding
Determination Date, their salaries shall increase to the new base salary taking into account the Increase in Salary (with no accrual)
($463,500, $401,700 and $386,250, respectively) and the Accrued Amounts shall be paid by the Company, provided that in addition, at the
discretion of the Board of the Directors, the base salaries on the Funding Determination Date of each executive may be further increased
by 2%. Additionally, Mr. Rothbard agreed that any future increases to salary will be determined on an annual basis by the Company’s
Board of Directors at the recommendation of the Compensation Committee, and the annual 10% increases provided in his agreement shall
be overridden by such future determinations by the Board of Directors.
Pursuant to the First Feldmann
Amendment and First Steinman Amendment, Prof. Sir Feldmann and Prof. Steinman agreed effective March 1, 2022, that their salary
would be reduced by $225,000 (100%) and $56,250 (25%), respectively, and that such reduced amounts shall be accrued and paid on the Final
Determination Date.
Pursuant to the Second Nanchahal
Amendment, Prof. Nanchahal agreed that upon acceptance of the data for the phase 2b clinical trial for Dupuytren’s disease for
publication (which occurred March 1, 2022, subject to editing and final approvals), his monthly fee was increased to £23,000,
provided that £4,000 of such increase shall be accrued and £19,000 per month of such fees shall be payable per the payroll
practices of the Company in cash by the Company starting effective March 1, 2022, and until the earlier of (a) November 1,
2022 and (b) the Funding Determination Date, at which time all accrued amounts shall be due.
On May 26, 2022, and effective
on June 1, 2022, the Company entered into (a) a Second Amendment to Employment Agreement with James N. Woody, M.D., Ph.D., the Chief
Executive Officer and Director of the Company; (b) a Second Amendment to Employment Agreement with Quan Anh Vu, the former Chief Operating
Officer and Chief Business Officer of the Company; (c) a Second Amendment to Employment Agreement with Jonathan Rothbard, Ph.D.,
Chief Scientific Officer of the Company; and (d) a Second Amendment to Consulting Agreement with Lawrence Steinman, M.D., the Executive
Co-Chairman of the Company (collectively, the “Second Amendments”).
Pursuant to the Second Amendments,
each of Dr. Woody, Mr. Vu, Dr. Steinman, and Dr. Rothbard, effective as of June 1, 2022, agreed to a further reduction of the base salaries
set forth in their respective amended employment and consulting agreements (the “Base Salaries”) by an amount which,
after taking into account the First Accrued Amounts, equals 50% of their respective Base Salaries ($231,750, $200,850, $112,500, and
$193,125, in total respectively). The reductions to the base salaries of Dr. Woody, Mr. Vu, and Dr. Steinman as affected by the Second
Amendments ($139,050, $120,510, $56,250, respectively) (the “Second Accrued Amounts”), are to accrue until such time
as the Company has raised a minimum of $1,000,000 (the “Second Accrued Amount Funding Determination Date”). There
will be no accrual of the $96,562.50 reduction to the base salary of Dr. Rothbard which was affected by his Second Amendment, provided
that Dr. Rothbard’s accrued salary through the effective date of his Second Amendment will continue to remain accrued and will
be paid on the Funding Determination Date.
Payment of Back Pay; 2021 Bonuses and Increases
in Salaries
On April 27, 2023, and effective
on January 1, 2023, the Company entered into (a) a Third Amendment to Employment Agreement with James N. Woody, M.D., Ph.D., the Chief
Executive Officer and Director of the Company; (b) a Third Amendment to Employment Agreement with Ozan Pamir, the Chief Financial Officer
of the Company; and (c) a Third Amendment to Employment Agreement with Jonathan Rothbard, Ph.D., Chief Scientific Officer of the
Company (collectively, the “Third Amendments”), which each amended the compensation agreements currently in place
with such individuals.
The Third Amendments reflected
(a) an increase in the salary of each of Dr. Woody, Mr. Pamir and Dr. Rothbard of 3.5%, effective as of January 1, 2023; and (b) in the
case of Mr. Pamir, a further increase in salary to $380,000 per annum and an increase in his target bonus to 40%, effective April 1, 2023,
as well as a change in his title to Chief Financial Officer.
On April 27, 2023, based on
the recommendation of the Compensation Committee, the Board of Directors determined discretionary bonus compensation for the year ended
December 31, 2021 for Dr. Woody ($50,000); Mr. Pamir ($22,500, which is in addition to $30,000 previously paid during 2021); and Dr. Rothbard
($10,000). The Board of Directors also determined that no other bonuses would be paid to any executive officer of the Company for fiscal
2021.
Effective April 27, 2023,
the Board of Directors, with the recommendation of the Compensation Committee of the Board of Directors, approved the payment of $111,675
to Dr. Woody; $24,154 to Mr. Pamir; and $50,343 to Dr. Rothbard, in back pay owed to such officers. As a result, no back pay is currently
owed to Dr. Woody, Mr. Pamir or Dr. Rothbard.
Potential Payments Upon Termination
Pursuant to the employment
agreements for Dr. Woody, Dr. Rothbard, and Mr. Pamir, severance benefits will be paid in the event of a termination without
“just cause” (as defined in such agreements). Dr. Woody, in the event of such termination, is entitled to severance
payments in the form of continued base salary, for the lesser of eighteen (18) months or the then remaining term of the agreement,
(ii) payment of any accrued and unpaid annual bonus for any year preceding the year in which the employment terminates; (iii) payment
of a pro rata annual bonus for the year in which the employment terminates calculated by multiplying the target bonus amount by a fraction,
the numerator of which is the number of calendar days elapsed in the year as of the effective date of termination of employment
and the denominator of which is 365; and (iv) payment by the Company of Dr. Woody’s monthly health insurance premiums.
For Dr. Rothbard, in the event of such termination during his first year, Dr. Rothbard would be entitled to his then base salary
for a period of 36 months, during his second year, Dr Rothbard would be entitled to his then base salary for a period of 24 months,
and 12 months if the termination happens in the third year of Dr. Rothbard’s employment or thereafter; (ii) payment
of any accrued and unpaid annual bonus for any year preceding the year in which the employment terminates; (iii) payment of a pro
rata annual bonus for the year in which the employment terminates calculated by multiplying the target bonus amount by a fraction, the
numerator of which is the number of calendar days elapsed in the year as of the effective date of termination of employment and
the denominator of which is 365; and (iv) payment by the Company of monthly health insurance premiums. For Mr. Pamir, in the
event of such termination, he would be entitled to an amount equal to his then current base salary for a period of (3) months.
Director Compensation
The following table sets
forth compensation information with respect to our non-employee directors during our fiscal year ended December 31, 2022:
Name | |
Fees
earned or paid in cash ($) | | |
Stock awards
($)(4) | | |
Option
Awards ($)(4) | |
All
other compensation ($) | | |
Total
($) | |
Lawrence
Steinman | |
$ | 225,000 | | |
$ | — | | |
$ | — |
| |
$ | — | | |
$ | 225,000 | |
Sir
Marc Feldmann, Ph.D., M.D. | |
$ | 225,000 | (5) | |
$ | — | | |
$ | — |
| |
$ | — | | |
$ | 225,000 | |
Larry
Gold, Ph.D. | |
$ | 14,375 | | |
$ | 43,125 | (6) | |
$ | 15,255 |
(1) | |
$ | — | | |
$ | 72,755 | |
Donald
A. McGovern, Jr. | |
$ | 16,875 | | |
$ | 50,625 | (6) | |
$ | 145,254 |
(1)(3) | |
$ | — | | |
$ | 212,754 | |
Russell
T. Ray, MBA | |
$ | 14,375 | | |
$ | 43,125 | (6) | |
$ | 21,357 |
(2) | |
$ | — | | |
$ | 78,857 | |
Teresa
DeLuca, M.D., MBA | |
$ | 55,000 | | |
$ | — | | |
$ | 21,357 |
(2) | |
$ | — | | |
$ | 76,357 | |
Francis
Knuettel II, MBA | |
$ | 55,000 | | |
$ | — | | |
$ | 21,357 |
(2) | |
$ | — | | |
$ | 76,357 | |
Pamela
G. Marrone, Ph.D. | |
$ | 15,000 | | |
$ | 45,000 | (6) | |
$ | 21,357 |
(2) | |
$ | — | | |
$ | 81,357 | |
* | The table above does not include the amount of any expense
reimbursements paid to the above directors. No directors received any Non-Equity Incentive Plan Compensation or Nonqualified Deferred
Compensation. Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation
is more than $10,000. |
(1) | On May 19, 2022, we granted to each of Dr. Gold and
Mr. McGovern, options to purchase up to 750 shares of our common stock at an exercise price of $20.34 per share. The options vest
in equal monthly instalments over the 39 months beginning on May 31, 2022, subject to such director’s continued service to
our company on such vesting dates. |
(2) | On May 19, 2022, we granted to each of Mr. Ray, Dr. DeLuca,
Mr. Knuettel, and Dr. Marrone, options to purchase up to 1,050 shares of our common stock at an exercise price of $20.34 per share. The
options vest in equal monthly instalments over the 39 months beginning on May 31, 2022, subject to such director’s continued service
to our company on such vesting dates. |
(3) | On May 19, 2022, we granted to Mr. McGovern options to purchase up
to 6,706 shares of our common stock at an exercise price of $27.20 per share. The options vested immediately upon grant. |
(4) | Represents the aggregate grant date fair value of the award
computed in accordance with the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718.
The assumptions used in calculating the aggregate grant date fair value of the awards reported in this column are set forth in our consolidated
financial statements included in this prospectus. The values provided for these awards are based on applicable accounting standards and
do not necessarily reflect the actual amounts realized or realizable. As of December 31, 2022, the aggregate number of option awards
outstanding held by each non-employee director (including vested and unvested awards) serving on that date was as follows: Lawrence
Steinman — 1,250; Prof. Sir Marc Feldmann — 1,250; Larry Gold — 5,000; Donald A. McGovern,
Jr. — 11,706; Russell T. Ray — 5,000; Teresa DeLuca — 5,000; Francis Knuettel II — 5,000;
and Pamela G. Marrone — 5,000. None of the non-executive directors held any unvested stock awards as of December 31,
2021. |
(5) | Amounts paid were for services rendered as the Chairman,
CEO and Executive Director of CannBioRex, pursuant to the June 2018 Service Agreement
(as amended), discussed in greater detail above under “Executive and Director Compensation — Executive
Compensation — Compensation of Officers by 180 Life Sciences Corp. following
the Closing of the Business Combination — General — Employment
Agreements — Service Agreement with Prof. Sir Marc Feldmann”. |
(6) | On May 19, 2022, the Company issued 529 shares
of common stock to Dr. Gold, 621 shares of common stock to Mr. McGovern, 529 shares of common
stock to Mr. Ray, and 552 shares of common stock to Dr. Marrone, in lieu of quarterly cash
fees earned by each director for the quarter ended March 31, 2022. On July 27, 2022, the
Company issued 654 shares of common stock to Dr. Gold, 767 shares of common stock to Mr.
McGovern, 654 shares of common stock to Mr. Ray, and 682 shares of common stock to Dr. Marrone,
in lieu of quarterly cash fees earned by each director for the quarter ended June 30, 2022.
On October 31, 2022, the Company issued 1,536 shares of common stock to Dr. Gold, 1,803 shares
of common stock to Mr. McGovern, 1,536 shares of common stock to Mr. Ray, and 1,602 shares
of common stock to Dr. Marrone, in lieu of quarterly cash fees earned by each director for
the quarter ended September 30, 2022. |
In connection with each of
Mr. Ray’s, Dr. DeLuca’s, Mr. Knuettel’s and Dr. Marrone’s appointment to the Board, such
persons entered into offer letters with the Company, dated on or around May 21, 2021 (collectively, the “Offer Letters”).
The Offer Letters set forth the compensation that Mr. Ray, Dr. DeLuca, Mr. Knuettel and Dr. Marrone are entitled
to receive, including a grant of options to purchase $425,000 of value of shares of the Company’s common stock (value per share
and number of shares determined by the Black-Scholes calculation on the date of grant)(i.e., options to purchase 3,950 shares
of common stock)(the “Initial Option Grant”), which have been granted to date, and which will vest as to 1/48 of the
balance of the option shares upon each month of service after the date of grant and have an exercise price per share equal to the closing
sales price of a share of common stock on the grant date.
Board of Director Fees
The current policy of the
Board is to pay each independent Board Member, in addition to equity compensation as may be approved from time to time by the Board and/or
Compensation Committee, $40,000 per compensation year as an annual retainer fee payable to each member of the Board, plus additional
committee fees of $5,000 for each member of the Compensation Committee or Nomination and Corporate Governance Committee, and $7,500 for
each member of the Audit Committee or Risk Committee; $10,000 for the Chairperson of the Compensation Committee and the Nomination and
Corporate Governance Committee and $15,000 for the Chairperson of the Audit Committee and of the Risk Committee. Additionally, the Lead
Director (currently Mr. McGovern) is to receive an additional equity grant each year valued at $30,000. For independent directors,
cash fees are earned and paid one quarter in arrears. The Board also currently grants each new independent director an option to purchase
5,000 shares of common stock, at the exercise price equal to the fair market value on the date of grant as calculated pursuant to
the Plan, and such options vesting in equal monthly installments over the 48 months after the grant date, subject to the holder’s
continued service to the Company on such vesting dates. Due to limitations on the amount of compensation that can be paid to directors
in a compensation year, as defined, new independent directors in 2021 were issued an option to purchase 3,950 shares of common stock
in 2021 and were issued options to purchase an additional 1,050 shares of common stock in 2022 as part of the new independent director
grant. In addition, in 2022 Dr. Gold and Mr. McGovern were issued an option to purchase 750 shares of common stock in
2022 representing the remaining balance of their initial new independent director grant.
The Board has not yet initiated
a recurring yearly equity compensation grant for independent directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Ownership of Management and Certain
Beneficial Owners and Management
The following table contains
information regarding the beneficial ownership of our voting stock as of April 28, 2023 (the “Date of Determination”),
held by (i) each stockholder known by us to beneficially own more than 5% of the outstanding shares of any class of voting stock; (ii)
our directors; (iii) our Named Executive Officers as defined in the paragraph preceding the Summary Executive Compensation Table contained
elsewhere in this Amendment No. 1 and our current executive officers; and (iv) all current directors and executive officers as a group.
Except where noted, all holders listed below have sole voting power and investment power over the shares beneficially owned by them.
Unless otherwise noted, the address of each person listed below is c/o 180 Life Sciences Corp., 3000 El Camino Real, Bldg. 4, Suite
200, Palo Alto, California 94306.
Beneficial ownership has
been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to
be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares).
In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon
exercise of an option or warrant or upon conversion of a convertible security) within 60 days of the date as of which the information
is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially
owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in
the following table does not necessarily reflect the person’s actual voting power at any particular date.
Beneficial ownership as set
forth below is based on our review of our record stockholders list and public ownership reports filed by certain stockholders of the
Company, and may not include certain securities held in brokerage accounts or beneficially owned by the stockholders described below.
Name and Address of Beneficial Owners | |
Number of Common Stock Shares Beneficially Owned | |
| |
Percent of Common Stock | |
Directors, Executive Officers and Named Executive Officers | |
| |
| |
| |
James N. Woody | |
| 59,443 | (1) |
| |
| 1.1 | % |
Jonathan Rothbard | |
| 40,939 | (2) |
| |
| * | |
Ozan Pamir | |
| 11,221 | (3) |
| |
| * | |
Quan Anh Vu(a) | |
| 1,025 | |
| |
| * | |
Lawrence Steinman | |
| 31,379 | (4) |
| |
| * | |
Marc Feldmann | |
| 141,747 | (4) |
| |
| 2.7 | % |
Donald A. McGovern, Jr. | |
| 14,761 | (5) |
| |
| * | |
Larry Gold | |
| 6,246 | (6) |
| |
| * | |
Francis Knuettel II | |
| 2,269 | (7) |
| |
| * | |
Pamela G. Marrone | |
| 5,278 | (7) |
| |
| * | |
Teresa M. DeLuca | |
| 2,894 | (7) |
(8) | |
| * | |
Russell T. Ray | |
| 5,223 | (7) |
| |
| * | |
| |
| | |
| |
| | |
All officers and directors as a group (11 persons)(9) | |
| 321,400 | |
| |
| 5.9 | % |
| |
| | |
| |
| | |
5% Stockholders | |
| | |
| |
| | |
None. | |
| | |
| |
| | |
** | Percentages based upon 5,317,586 shares of our common stock
issued and outstanding at April 28, 2023. |
(a) | Resigned effective January 15, 2023, but included as a “Named
Executive Officer” for fiscal 2022. |
(1) | Includes options to purchase 57,555 shares of common
stock at an exercise price of $88.60 per share, which have vested, and/or which vest within 60 days of the Date of Determination. |
(2) | Includes options to purchase 12,916 shares of common
stock at an exercise price of $79.00 per share, which have vested, and/or which vest within 60 days of the Date of Determination. |
(3) | Includes options to purchase 7,400 shares of common
stock at an exercise price of $88.60 per share, which have vested, and/or which vest within 60 days of the Date of Determination. |
(4) | Includes options to purchase 1,250 shares of common
stock at an exercise price of $79.00 per share, which have vested, and/or which vest within 60 days of the Date of Determination. |
(5) | Includes options to purchase 1,250 shares of common
stock at an exercise price of $49.80 per share, options to purchase 1,438 shares of common stock at an exercise price of $7.56,
and options to purchase 6,707 shares of common stock at an exercise price of $27.20 per share, in each case which have vested, and/or
which vest within 60 days of the Date of Determination. |
(6) | Includes options to purchase 1,250 shares of common
stock at an exercise price of $49.80 per share, and options to purchase 1,438 shares of common stock at an exercise price of $7.56,
and options to purchase 250 shares of common stock at an exercise price of $27.20 per share, in each case which have vested, and/or which
vest within 60 days of the Date of Determination. |
(7) | Includes options to purchase 1,893 shares of common
stock at an exercise price of $151.20 per share, and options to purchase 350 shares of common stock at an exercise price of $27.20
per share, in each case which have vested, and/or which vest within 60 days of the Date of Determination. |
(8) | Includes 125 shares of common stock held by Teresa M. DeLuca’s
spouse, 125 shares of common stock held by The Santina Iraggi Irrvoc TR, U/A 11/2/20, an irrevocable trust, of which Teresa M. DeLuca
is beneficiary and trustee, and 125 shares of common stock held by the REV TR FBO Teresa M Deluca, a revocable trust, of which Teresa
M. DeLuca is beneficiary and trustee, all of which shares Teresa M. DeLuca is deemed to beneficially own. |
(9) | Does not include the ownership of Quan Vu, who is a Named
Executive Officer, but who resigned from the Company effective January 18, 2023. |
Equity Compensation Plan Information
The following table sets
forth information, as of December 31, 2022, with respect to our compensation plans under which common stock is authorized for issuance.
Plan Category | |
Number of securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights (A) |
| |
Weighted-
average exercise price of
outstanding
options,
warrants and
rights (B) | | |
Number of securities
remaining available for future issuance
under equity
compensation
plans (excluding
securities
reflected in
Column A)
(C) | |
Equity compensation plans approved by stockholders(1) | |
| 149,207 | | |
$ | 85.15 | | |
| 129,388 | |
Equity compensation plans not approved by stockholders(2) | |
| 3,183 | | |
$ | 105.60 | | |
| — | |
Total | |
| 179,703 | | |
| | | |
| 129,388 | |
(1) | Options granted and awards available for future issuance
under the 2020 OIP (defined below) and 2022 OIP (defined below), each discussed below. |
(2) | This relates to five-year warrants granted on March 12,
2021, for the purchase of 3,183 shares of the Company’s common stock at an exercise price of $105.60 held by Alliance Global Partners
(“AGP”). |
2020 Omnibus Incentive Plan
We have reserved 185,907 shares
of our common stock for grant under our 2020 Omnibus Incentive Plan (“2020 OIP”), of which 15,861 shares are available
for future awards as of the date of this Amendment No. 1.
The purpose of the 2020 OIP
is to promote the interests of the Company and its subsidiaries and its stockholders by (i) attracting and retaining directors,
executive officers, employees and consultants of outstanding ability; (ii) motivating such individuals by means of performance-related incentives
to achieve the longer-range performance goals of the Company and its subsidiaries; and (iii) enabling such individuals to participate
in the long-term growth and financial success of the Company.
Awards under the 2020 OIP
may be made in the form of performance awards, restricted stock, restricted stock units, stock options, which may be either incentive
stock options or non-qualified stock options, stock appreciation rights, other stock-based awards and dividend equivalents.
Awards are generally non-transferable.
2022 Omnibus Incentive Plan
We have reserved 120,000 shares
of our common stock for grant under our 2022 Omnibus Incentive Plan (“2022 OIP”), of which 113,526 shares are available
for future awards as of the date of this Amendment No. 1.
The purpose of the 2022 OIP
is to promote the interests of the Company and its subsidiaries and its stockholders by (i) attracting and retaining directors,
executive officers, employees and consultants of outstanding ability; (ii) motivating such individuals by means of performance-related incentives
to achieve the longer-range performance goals of the Company and its subsidiaries; and (iii) enabling such individuals to participate
in the long-term growth and financial success of the Company.
Awards under the 2022 OIP
may be made in the form of performance awards, restricted stock, restricted stock units, stock options, which may be either incentive
stock options or non-qualified stock options, stock appreciation rights, other stock-based awards and dividend equivalents.
Awards are generally non-transferable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Except
as discussed below or otherwise disclosed above under “Item 11. Executive Compensation”,
there have been no transactions over the last two fiscal years, and there is not currently any proposed transaction, in which the
Company was or is to be a participant, where the amount involved exceeds the lesser of (a) $120,000 or (b) one percent of the
Company’s total assets at year-end for the last two completed fiscal years, and in which any officer, director, or any
stockholder owning greater than five percent (5%) of our outstanding voting shares, nor any member of the above referenced individual’s
immediate family, had or will have a direct or indirect material interest.
Related Party Agreements
360 Life Sciences Corp. Agreement — Related
Party (Acquisition of ReFormation Pharmaceuticals Corp.)
On July 1, 2020, the
Company entered into an amended agreement with ReFormation Pharmaceuticals, Corp. (“ReFormation”) and 360 Life Sciences Corp.
(“360”), whereby 360 has entered into an agreement to acquire 100% ownership of ReFormation, on or before July 31,
2020 (“Closing Date”). The Company used to share a director with each of ReFormation and 360. On March 25, 2022,
our director resigned from serving on the Board of 360 and he had previously resigned from serving on the Board of Reformation. Upon
the Closing Date, 360 agreed to make tranche payments in tranches to 180 LP in the aggregate amount of $300,000. The parties agreed that
the obligations will be paid by 360 to 180 LP by payments of $100,000 for every $1,000,000 raised through the financing activities of
360, up to a total of $300,000, however, not less than 10% of all net financing proceeds received by 360 shall be put towards the obligation
to the Company until paid in full. This transaction closed on July 31, 2020.
On February 26, 2019,
180 LP entered into a one-year agreement (the “Pharmaceutical Agreement”) with ReFormation, a related party that
shares directors and officers of 180 LP, pursuant to which ReFormation agreed to pay 180 LP $1.2 million for rights of first negotiation
to provide for an acquisition of any arising intellectual property or an exclusive licensing, partnering, or collaboration transaction
to use any arising intellectual property with respect to a contemplated research agreement between the Company and Oxford (see Oxford
University Agreements, above), which was signed on March 22, 2019 and therefore is the start date of the project. Of the $1.2 million
receivable from Reformation pursuant to the Pharmaceutical Agreement, $0.9 million was received by the Company on March 14,
2019 and the remaining $0.3 million was expected to be received over the one-year term of the agreement.
180 LP is recognizing the
income earned in connection with the Pharmaceutical Agreement on a straight-line basis over the term of the agreement. During the
years ended December 31, 2022 and 2021, 180 LP recognized no income related to the Pharmaceutical Agreement, which is included in other
income in the accompanying consolidated statement of operations and other comprehensive income loss. As of December 31, 2021, the Company
charged the $300,000 receivable to bad debt expense.
On November 17, 2021, the
Company provided notice to 360, which initiated the right of first negotiation term, which expired unexercised on February 1, 2022. As
such, the Company is no longer under any obligation to negotiate with 360.
Notice of Acceleration
On December 29, 2020,
we received notice from Marlene Krauss, M.D., the former Chief Executive Officer and director of KBL, alleging the occurrence of an event
of default of the terms of a certain promissory note in the amount of $371,178, dated March 15, 2019, evidencing amounts owed by
the Company to KBL IV Sponsor LLC (of which Dr. Krauss serves as sole managing member), for failure to repay such note within
five days of the release of funds from escrow in connection with the terms of a purchase agreement. Dr. Krauss has declared
the entire amount of the note to be immediately due and payable. The note, pursuant to its terms, accrues damages of $2,000 per day
until paid in full (subject to a maximum amount of damages equal to the principal amount of the note upon the occurrence of the event
of default thereunder). There are continuing disputes regarding amounts that may be due to Dr. Krauss under the note.
Inflammation consultancy Agreements
with each of Prof. Sir Marc Feldmann and Prof. Jagdeep Nanchahal
See
“Inflammation consultancy Agreements with each of Prof. Sir Marc Feldmann and Prof. Jagdeep Nanchahal” under “Description
of Material Consulting Agreements”, under “Item 11. Executive Compensation”,
above.
Service Agreement with Prof. Sir Marc
Feldmann
See
“Service Agreement with Prof. Sir Marc Feldmann” under “Description of Material Consulting Agreements”,
under “Executive and Director Compensation”, above.
Prof. Jagdeep Nanchahal Consulting
Agreement
See
“Prof. Jagdeep Nanchahal Consulting Agreement” under “Description of Material Consulting Agreements”,
under “Item 11. Executive Compensation”, above.
During the year ended December
31, 2022, we incurred research and development expenses – related parties of $240,731 compared to $2,947,536 incurred for the year
ended December 31, 2021, representing a decrease of $2,706,805 or 92%. The decrease includes a decrease in stock-based compensation expense
of $2,300,000; this decrease is comprised of approximately $800,000 paid to Jagdeep Nanchahal in the prior year for his research in the
Phase 2b clinical trial for Dupuytren’s Contracture (RIDD), as well as stock-based compensation expense of approximately $1,400,000
paid to Mr. Nanchahal in the prior year as well. There was also a decrease in consulting expenses of $460,000.
Prof. Lawrence Steinman Consultancy
Agreement and Consulting Agreement
See
“Consultancy Agreement with Prof. Lawrence Steinman” and “Consulting Agreement with Prof. Lawrence Steinman under
“Description of Material Consulting Agreements”, under “Item 11. Executive
Compensation”, above.
General and Administrative –
Related Parties
During the year ended December
31, 2022, we incurred general and administrative expenses – related parties of $5,612 compared to $462,580 incurred for the year
ended December 31, 2021, representing a decrease of $456,968, or 99%. Of the expenses incurred during 2022, these primarily relate to
professional fees paid to current or former officers, directors or greater than 10% investors, or affiliates thereof. Of the expenses
incurred during 2021, approximately $338,000 represents bad debt expense incurred in connection with a receivable from related parties,
and approximately $124,000 represents professional fees paid to current or former officers, directors or greater than 10% investors,
or affiliates thereof.
Interest Expense on Loans Payable
For the year ended December
31, 2022, the Company recognized interest expense and interest income — related parties associated with outstanding loans, of $14,156
and $1,490, respectively.
For the year ended December
31, 2021, the Company recognized interest expense and interest expense — related parties associated with outstanding loans, of
$24,019 and $38,874, respectively.
As of December 31, 2022,
the Company had accrued interest and accrued interest — related parties associated with outstanding loans, of $37,960 and $16,770,
respectively.
As of December 31, 2021,
the Company had accrued interest and accrued interest — related parties associated with outstanding loans, of $24,212 and $812,
respectively.
Accrued Expenses - Related Parties
Accrued expenses - related
parties was $188,159 as of December 31, 2022 and consists of deferred compensation for certain executives. Accrued expenses - related
parties was $18,370 as of December 31, 2021 and consists of interest accrued on loans and convertible notes due to certain officers and
directors of the Company.
The aggregate amount of accrued expenses due to related parties as of December 31, 2022, is comprised of amounts due to Prof. Feldmann,
Dr. Steinman, Dr. Rothbard, Dr. Woody and Mr. Pamir for deferred compensation.
Research and Development Expenses -
Related Parties
Research and Development
Expenses – Related Parties of $240,731 and $2,947,536 during the years ended December 31, 2022 and 2021, respectively, is related
to consulting and professional fees paid to current or former officers, directors, or affiliates thereof.
Interest Expense - Related Parties
During the year ended December
31, 2022, the Company recorded $1,508 of interest expense – related parties, which related to interest expense on loans with officers
and directors of the Company.
During the year ended December
31, 2021, the Company recorded $50,255 of interest expense – related parties, of which $11,380 related to the convertible notes
with officers and directors of the Company and $38,875 related to interest expense on loans with officers, directors and a greater than
10% investor of the Company.
Exchanges of Related Party Loans and
Convertible Notes
On September 30, 2021,
Dr. Lawrence Steinman and Prof. Sir Marc Feldmann, Ph.D., each of whom serve as Co-Executive Chairmen of the Company’s
Board of Directors, agreed with the Company to convert amounts owed under outstanding loans with an aggregate principal balance of $693,371
and an aggregate accrued interest balance of $157,741 into an aggregate of 7,093 shares of the Company’s common stock at the
conversion price of $120.00 per share, pursuant to the terms of the agreement, which conversion rate was above the closing consolidated
bid price of the Company’s common stock on the date the binding agreement was entered into.
Notes and Debt Conversion Agreement
The Company assumed $270,000
of debt related to convertible notes payable; during the second quarter of 2021 in connection with a reorganization, the Company repaid
the former CEO of 180 Therapeutics L.P., our wholly-owned subsidiary, a convertible note payable in cash for the principal amount of
$10,000 and $1,873 of accrued interest. During the third quarter of 2021, the $260,000 remaining principal balance of convertible notes
payable owed to an Executive Co-Chairman of the Company, plus $96,208 of related accrued interest, was converted into 2,969 shares of
the Company’s common stock, pursuant to a debt conversion agreement dated September 30, 2021.
On February 10, 2021,
the Company entered into amended loan agreements to modify the terms of certain loan agreements in the aggregate principal amount of
$432,699, previously entered into with Prof. Sir Marc Feldmann and Dr. Lawrence Steinman, the Co-Executive Chairmen of the
Board of Directors. The loan agreements were extended and modified to be paid back at the Company’s discretion, either by 1) repayment
in cash, or 2) by converting the outstanding amounts into shares of common stock at the same price per share as the next financing transaction.
Subsequently, on February 25, 2021, and effective as of the date of the original February 10, 2021 amendments, the Company
determined that such amendments were entered into in error and each of Prof. Sir Feldmann and Dr. Steinman rescinded such February 10,
2021 amendments pursuant to their entry into Confirmations of Rescission acknowledgements. On April 12, 2021, the Company
entered into amended loan agreements with each of Prof. Sir Feldmann and Dr. Steinman, which extended the date of all of their outstanding
loan agreements to September 30, 2021. On September 30, 2021, we entered into a Debt Conversion Agreement with Dr. Steinman
and Prof. Sir Feldmann, pursuant to which: (x) we and Dr. Steinman agreed to convert an aggregate of $31,297 owed by us to
Dr. Steinman into an aggregate of 261 shares of our common stock; and (y) we and Prof. Sir Feldmann agreed to convert
an aggregate of $819,818 owed by us to Prof. Sir Feldmann into an aggregate of 6,832 shares of our common stock. Pursuant to
the Debt Conversion Agreement, each of Dr. Steinman and Prof. Sir Feldmann agreed that the shares of common stock issuable in connection
therewith were in full and complete satisfaction of amounts owed to such persons.
During the years ended December
31, 2021, the Company recorded interest expense of $109,767 related to convertible notes payable, In November 2020, 3,164 restricted
shares of common stock were issued to insiders (Prof. Sir Feldmann and Dr. Lawrence Steinman) as a result of conversion of $239,320
of convertible debt.
As of December 31, 2021,
a total of $81,277 of related party loans were outstanding.
Registration Rights
The holders of the founder
shares and private placement units (and their component securities) and their permitted transferees are entitled to registration rights
pursuant to a registration rights agreement signed on the effective date of our initial public offering (“IPO”). The
holders of these securities and their permitted transferees are entitled to make up to three demands, excluding short form demands, that
we register such securities. In addition, the holders and their permitted transferees have certain “piggy-back” registration
rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require
us to register for resale such securities pursuant to Rule 415 under the Securities Act. Notwithstanding the foregoing, the underwriters
may not exercise their demand and “piggyback” registration rights after five (5) and seven (7) years after the
effective date of the registration statement relating to our IPO and may not exercise their demand rights on more than one occasion.
Further, the holders and their permitted transferees have certain “piggy-back” registration rights regarding the shares of
our common stock issuable upon the conversion of a promissory note with respect to the registration statement(s) that we may file
pursuant to the Registration Rights Agreement that we entered into in connection with the June 2020 offering. We satisfied the foregoing
registration rights through the filing of a Registration Statement on Form S-1 (No. 333-248539), which registration statement
was declared effective on November 2, 2020; provided, however, that such registration statement became stale and an updated registration
went effective on August 24, 2021. The Company has an obligation to register shares held by KBL IV Sponsor LLC which shares
have not been registered.
Related Party Litigation
Action Against Former Executive of
KBL
On September 1, 2021, the
Company initiated legal action in the Chancery Court of Delaware against Dr. Marlene Krauss, the Company’s former Chief Executive
Officer and director (“Dr. Krauss”) and two of her affiliated companies, KBL IV Sponsor, LLC and KBL Healthcare Management,
Inc. (collectively, the “KBL Affiliates”) for, among other things, engaging in unauthorized monetary transfers
of the Company’s assets, non-disclosure of financial liabilities within the Company’s Consolidated Financial Statements,
issuing shares of stock without proper authorization; and improperly allowing stockholder redemptions to take place. The Company’s
complaint alleges causes of action against Dr. Krauss and/or the KBL Affiliates for breach of fiduciary duties, ultra vires acts, unjust
enrichment, negligence and declaratory relief, and seeks compensatory damages in excess of $11,286,570, together with interest, attorneys’
fees and costs. There can be no assurance that the Company will be successful in its legal actions. As of December 31, 2022, the Company
has a legal accrual of $125,255 recorded to cover the legal expenses of the former executives of KBL.
On October 5, 2021, Dr. Krauss
and the KBL Affiliates filed an Answer, Counterclaims and Third-Party Complaint (the “Krauss Counterclaims”) against
the Company and twelve individuals who are, or were, directors and/or officers of the Company, i.e., Marc Feldmann, Lawrence Steinman,
James N. Woody, Teresa DeLuca, Frank Knuettel II, Pamela Marrone, Lawrence Gold, Donald A. McGovern, Jr., Russell T. Ray, Richard
W. Barker, Shoshana Shendelman and Ozan Pamir (collectively, the “Third-Party Defendants”). On October
27, 2021, the Company and Ozan Pamir filed an Answer to the Krauss Counterclaims, and all of the other Third-Party Defendants filed a
Motion to Dismiss as to the Third-Party Complaint.
On January 28, 2022, in lieu
of filing an opposition to the Motion to Dismiss, Dr. Krauss and the KBL Affiliates filed a Motion for leave to file amended counterclaims
and third-party complaint, and to dismiss six of the current and former directors previously named, i.e., to dismiss Teresa DeLuca,
Frank Knuettel II, Pamela Marrone, Russell T. Ray, Richard W. Barker and Shoshana Shendelman. The Motion was granted by stipulation
and, on February 24, 2022, Dr. Krauss filed an amended Answer, Counterclaims and Third-Party Complaint (the “Amended Counterclaims”).
In essence, the Amended Counterclaims allege (a) that the Company and the remaining Third-Party Defendants breached fiduciary duties
to Dr. Krauss by making alleged misstatements against Dr. Krauss in SEC filings and failing to register her shares in the Company so
that they could be traded, and (b) the Company breached contracts between the Company and Dr. Krauss for registration of such shares,
and also failed to pay to Dr. Krauss the amounts alleged to be owing under a promissory note in the principal amount of $371,178, plus
an additional $300,000 under Dr. Krauss’s resignation agreement. The Amended Counterclaims seek unspecified amounts
of monetary damages, declaratory relief, equitable and injunctive relief, and attorney’s fees and costs.
On March 16, 2022, Donald
A. McGovern, Jr. and Lawrence Gold filed a Motion to Dismiss the Amended Counterclaims against them, and the Company and the remaining
Third-Party Defendants filed an Answer to the Amended Counterclaims denying the same. On April 19, 2022, Dr. Krauss stipulated
to dismiss all of her counterclaims and allegations against both Donald A. McGovern, Jr. and Lawrence Gold, thereby mooting their Motion
to Dismiss the Amended Counterclaims against them. The Company and the Third-Party Defendants intend to continue to vigorously defend
against all of the Amended Counterclaims, however, there can be no assurance that they will be successful in the legal defense of such
Amended Counterclaims. In April 2022, Donald A. McGovern, Jr. and Lawrence Gold were dismissed from the lawsuit as parties. Discovery
has not yet commenced in the case. The Company and the Third-Party Defendants intend to continue to vigorously defend against all
of the Amended Counterclaims, however, there can be no assurance that they will be successful in the legal defense of such Amended Counterclaims.
Action Against the Company by Dr. Krauss
On August 19, 2021, Dr. Krauss
initiated legal action in the Chancery Court of Delaware against the Company. The original Complaint sought expedited relief and
made the following two claims: (1) it alleged that the Company is obligated to advance expenses including, attorney’s fees,
to Dr. Krauss for the costs of defending against the SEC and certain Subpoenas served by the SEC on Dr. Krauss; and (2) it alleged that
the Company is also required to reimburse Dr. Krauss for the costs of bringing this lawsuit against the Company. On or about
September 3, 2021, Dr. Krauss filed an Amended and Supplemental Complaint (the “Amended Complaint”) in this action,
which added the further claims that Dr. Krauss is also allegedly entitled to advancement by the Company of her expenses, including attorney’s
fees, for the costs of defending against the Third-Party Complaint in the Tyche Capital LLC action referenced below, and the costs of
defending against the Company’s own Complaint against Dr. Krauss as described above. On or about September 23, 2021,
the Company filed its Answer to the Amended Complaint in which the Company denied each of Dr. Krauss’ claims and further raised
numerous affirmative defenses with respect thereto.
On November 15, 2021, Dr.
Krauss filed a Motion for Summary Adjudication as to certain of the issues in the case, which was opposed by the Company. A hearing
on such Motion was held on December 7, 2021, and, on March 7, 2022, the Court issued a decision in the matter denying the Motion
for Summary Adjudication in part and granting it in part. The Court then issued an Order implementing such a decision on March 29,
2022. The parties are now engaging in proceedings set forth in that implementing Order. The Court granted Dr. Krauss’s request
for advancement of some of the legal fees which Dr. Krauss requested in her Motion, and the Company was required to pay a portion of
those fees while it objects to the remaining portion of disputed fees. These legal fees have been accrued on the Company’s balance
sheet.
On October 10, 2022, Dr.
Krauss filed an Application to compel the Company to pay the full amount of fees requested by Dr. Krauss for May-July 2022, and to modify
the Court’s Order. The Company filed its Opposition thereto. On January 18, 2023, Dr. Krauss filed a Second Application
to compel the Company to pay the full amount of fees requested by Dr. Krauss for August-October 2022, and to modify the Court’s Order.
The Company filed its Opposition thereto. Although the Court has indicated that it would consider and rule on both of such Applications concurrently,
no hearing has yet been scheduled by the Court. Notwithstanding any requirement by the Court for the Company to advance attorneys’
fees to Dr. Krauss, no adjudication has yet been made as to whether Dr. Krauss will ultimately be entitled to permanently retain such
advancements. The Company is seeking payment for a substantial portion of such amounts from its director and officers’ insurance
policy, of which no assurance can be provided that the directors and officers insurance policy will cover such amounts. See “Declaratory
Relief Action Against the Company by AmTrust International” below.
On April 29, 2022 and May
24, 2022, we made payments of $975,122 and $849,122, respectively ($1,824,244 in aggregate) to our former Chief Executive Officer, Dr.
Marlene Krauss, a then greater than 5% stockholder, in settlement of certain claims by Dr. Krauss for the advancement of expenses incurred
by Dr. Krauss in certain pending legal matters to which Dr. Krauss, pursuant to our organizational documents and Delaware law, was determined
to be owed indemnification for. The Company is seeking payment for a substantial portion of such amounts from its director and officers’
insurance policy, of which no assurance can be provided that the directors and officers insurance policy will cover such amounts.
Action Against Tyche Capital LLC
The Company commenced and
filed an action against defendant Tyche Capital LLC (“Tyche”) in the Supreme Court of New York, in the County of New York,
on April 15, 2021. In its Complaint, the Company alleged claims against Tyche arising out of Tyche’s breach of its written
contractual obligations to the Company as set forth in a “Guarantee And Commitment Agreement” dated July 25, 2019, and a
“Term Sheet For KBL Business Combination With CannBioRex” dated April 10, 2019 (collectively, the “Subject Guarantee”).
The Company alleges in its Complaint that, notwithstanding demand having been made on Tyche to perform its obligations under the Subject
Guarantee, Tyche has failed and refused to do so, and is currently in debt to the Company for such failure in the amount of $6,776,686,
together with interest accruing thereon at the rate set forth in the Subject Guarantee.
On or about May 17, 2021,
Tyche responded to the Company’s Complaint by filing an Answer and Counterclaims against the Company alleging that it was the Company,
rather than Tyche, that had breached the Subject Guarantee. Tyche also filed a Third-Party Complaint against six third-party defendants,
including three members of the Company’s management, Prof. Sir Marc Feldmann, Dr. James Woody, and Ozan Pamir (collectively, the
“Individual Company Defendants”), claiming that they allegedly breached fiduciary duties to Tyche with regards to
the Subject Guarantee. In that regard, on June 25, 2021, each of the Individual Company Defendants filed a Motion to Dismiss
Tyche’s Third-Party Complaint against them.
On November 23, 2021, the
Court granted the Company’s request to issue an Order of attachment against all of Tyche’s shares of the Company’s
stock that had been held in escrow. In so doing, the Court found that the Company had demonstrated a likelihood of success on the
merits of the case based on the facts alleged in the Company’s Complaint.
On February 18, 2022, Tyche
filed an Amended Answer, Counterclaims and Third-Party Complaint. On March 22, 2022, the Company and each of the Individual Company
Defendants filed a Motion to Dismiss all of Tyche’s claims. A hearing on such Motion to Dismiss was held on August 25,
2022, and the Court granted the Motion to Dismiss entirely as to each of the Individual Company Defendants, and also as to three of the
four Counterclaims brought against the Company, only leaving Tyche’s declaratory relief claim. On September 9, 2022, Tyche filed
a Notice of Appeal as to the Court’s decision, which has not yet been briefed or adjudicated. On August 26, 2022, Tyche filed a
Motion to vacate or modify the Company’s existing attachment Order against Tyche’s shares of the Company’s stock held
in escrow. The Company has filed its Opposition thereto, and the Court summarily denied such Motion without hearing on January 3, 2023.
Tyche subsequently filed a Notice of Appeal as to that denial and filed its Opening Brief on January 30, 2023. The Company
filed its opposition brief on March 2, 2023, and no hearing date has been set. On April 12, 2023, the Company filed a Motion for Summary
Judgment against Tyche. The Court has scheduled a hearing in New York on such Motion for June 20, 2023.
On January 30, 2023,
the Company filed a Notice of Motion for Summary Judgment and to Dismiss Affirmative Defenses against Tyche. Tyche has
not yet filed its opposition thereto, and no hearing has yet been set on this matter. The Company and the Individual
Company Defendants intend to continue to vigorously defend against all of Tyche’s claims, however, there can be no assurance
that they will be successful in the legal defense of such claims. Written discovery proceedings and depositions have occurred among the
parties.
Action Against Ronald Bauer &
Samantha Bauer
The Company and two of
its wholly-owned subsidiaries, Katexco Pharmaceuticals Corp. and CannBioRex Pharmaceuticals Corp. (collectively, the “Company Plaintiffs”),
initiated legal action against Ronald Bauer and Samantha Bauer, as well as two of their companies, Theseus Capital Ltd. and Astatine
Capital Ltd. (collectively, the “Bauer Defendants”), in the Supreme Court of British Columbia on February 25, 2022. The Company
Plaintiffs are seeking damages against the Bauer Defendants for misappropriated funds and stock shares, unauthorized stock sales, and
improper travel expenses, in the combined sum of at least $4,395,000 CAD [$3,178,025 USD] plus the additional sum of $2,721,036 USD.
The Bauer Defendants filed an answer to the Company Plaintiffs’ claims on May 6, 2022. There can be no assurance that the Company
Plaintiffs will be successful in this legal action.
Declaratory Relief Action Against the Company
by AmTrust International
On June 29, 2022, AmTrust
International Underwriters DAC (“AmTrust”), which was the premerger directors’ and officers’ insurance policy
underwriter for KBL, filed a declaratory relief action against the Company in the U.S. District Court for the Northern District
of California (the “Declaratory Relief Action”) seeking declaration of AmTrust’s obligations under the directors’
and officers’ insurance policy. In the Declaratory Relief Action, AmTrust is claiming that as a result of the merger
the Company is no longer the insured under the subject insurance policy, notwithstanding the fact that the fees which the Company
seeks to recover from AmTrust relate to matters occurring prior to the merger.
On September 20, 2022, the
Company filed its Answer and Counterclaims against AmTrust for bad faith breach of AmTrust’s insurance coverage obligations to
the Company under the subject directors’ and officers’ insurance policy, and seeking damages of at least $2 million in compensatory
damages, together with applicable punitive damages. In addition, the Company brought a Third-Party Complaint against its excess insurance
carrier, Freedom Specialty Insurance Company (“Freedom”) seeking declaratory relief that Freedom will also be required to
honor its policy coverage as soon as the amount of AmTrust’s insurance coverage obligations to the Company have been exhausted.
On October 25, 2022, AmTrust filed its Answer to the Company’s Counterclaims and, on October 27, 2022, Freedom filed its Answer
to the Third-Party Complaint.
On November 22, 2022, the
Company filed a Motion for Summary Adjudication against both AmTrust and Freedom. The Motion was fully briefed, and a hearing was held
on March 9, 2023. The standard to prevail on a Motion for Summary Adjudication in the Court is high to prevail and requires a judge to
find that there are no disputed issues of fact so that they can rule on the issues as a matter of law. In this instance the judge found
three major issues could be decided as a matter of law in the Company’s favor and that one issue, the Change in Control exclusion,
requires further discovery.
On April 21, 2023, the Court issued
an Order Granting in Part and Denying in Part the Company’s Motion for Partial Summary Judgment. Specifically, the Court granted
summary adjudication in favor of the Company on the following issues: (a) that the Company is, in fact, an insured under both the AmTrust
and Freedom insurance policies; (b) that certain SEC subpoena related expenses for defendants Dr. Marlene Krauss, the Company’s
former Chief Executive Officer and Director, and George Hornig, the former Chairman of the Board, are within the basic scope of coverage
under both the AmTrust and Freedom insurance policies; and (c) that the Insured vs. Insured exclusion relied upon by AmTrust and Freedom
is not applicable to bar any such coverage.
The Court also found that there
were issues of disputed facts as to the Change in Control exclusion contained within the policies, which therefore precluded the Court
from granting the remainder of the Company’s requests for summary adjudication as a matter of law. Accordingly, the Court, at this
time, denied the Company’s further requests for summary adjudication and deemed that for the time being, the Change in Control issue
is to be determined at the time of trial, in order to find that the policies (i) provide coverage for the fees which the Company has advanced
and will advance to Dr. Marlene Krauss and George Hornig; (ii) that AmTrust has breached the policy; (iii) that AmTrust must pay such
expenses of the Company; and that, once the AmTrust policy has been exhausted, (iv) Freedom will be obligated to pay such expenses of
the Company pursuant to its policy. The Company intends to continue to vigorously pursue this final matter in order to establish the Company’s
entitlement to full payment by both AmTrust and Freedom of the subject advancement expenses of the Company.
While the Company continues to
believe it has a strong case against both AmTrust and Freedom, and believes the Court ruling in its favor in regards to the matters discussed
above is a significant positive outcome for the Company, there can be no assurance that the Company will prevail in this action.
Indemnification Agreements
We have entered into indemnification
agreements with each of our directors and officers. The indemnification agreements and our Certificate of Incorporation and Bylaws require
us to indemnify our directors and officers to the fullest extent permitted by Delaware law.
Related Party Transaction Policy
Our Audit Committee must
review and approve any related party transaction we propose to enter into. Our Audit Committee charter details the policies and procedures
relating to transactions that may present actual, potential or perceived conflicts of interest and may raise questions as to whether
such transactions are consistent with the best interest of our company and our stockholders. A summary of such policies and procedures
is set forth below.
Any potential related party
transaction that is brought to the Audit Committee’s attention will be analyzed by the Audit Committee, in consultation with outside
counsel or members of management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a related
party transaction. At its meetings, the Audit Committee will be provided with the details of each new, existing or proposed related party
transaction, including the terms of the transaction, the business purpose of the transaction and the benefits to us and to the relevant
related party.
In determining whether to
approve a related party transaction, the Audit Committee must consider, among other factors, the following factors to the extent relevant:
| ● | whether the terms of the transaction are fair to us and on
the same basis as would apply if the transaction did not involve a related party; |
| ● | whether there are business reasons for us to enter into the
transaction; |
| ● | whether the transaction would impair the independence of an
outside director; and |
| ● | whether the transaction would present an improper conflict
of interest for any director or executive officer. |
Any member of the Audit Committee
who has an interest in the transaction under discussion must abstain from any voting regarding the transaction, but may, if so, requested
by the Chairman of the Audit Committee, participate in some or all of the Audit Committee’s discussions of the transaction. Upon
completion of its review of the transaction, the Audit Committee may determine to permit or to prohibit the transaction.
Director Independence
In evaluating the independence
of each of our directors and director nominees, the Board considers transactions and relationships between each director or nominee,
or any member of his or her immediate family, and the Company and its subsidiaries and affiliates. The Board also examines transactions
and relationships between directors and director nominees or their known affiliates and members of the Company’s senior management
and their known affiliates. The purpose of this review is to determine whether any such relationships or transactions are inconsistent
with a determination that the director is independent under applicable laws and regulations and Nasdaq listing standards.
Our Board of Directors has
affirmatively determined that each of Donald A. McGovern, Jr., MBA, Larry Gold, Ph.D., Russell T. Ray, MBA, Teresa M. DeLuca,
M.D., MBA, Pamela G. Marrone, Ph.D. and Francis Knuettel II, MBA is an independent director as defined under the NASDAQ rules
governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act, and has no relationship
that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Furthermore, the Board has
determined that each of the members of our Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and
Risk, Safety and Regulatory Committee is independent within the meaning of Nasdaq director independence standards applicable to members
of such committees, as currently in effect.
The Compensation Committee
members also qualify as “non-employee directors” within the meaning of Section 16 of the Exchange Act.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Our independent public accounting
firm is Marcum LLP, San Francisco, CA, PCAOB Auditor ID Auditor Firm Id: 688.
Marcum LLP (“Marcum”) has
served as the independent registered public accounting firm for the Company since the closing of the Business Combination on November 6,
2020.
The following is a summary
of fees paid or to be paid for audit, tax and related fees for services rendered during the periods indicated:
| |
For the Fiscal Year Ended December 31, | |
| |
2022 | | |
2021 | |
Marcum | |
| | |
| |
Audit Fees | |
$ | 682,951 | | |
$ | 538,408 | |
Audit-Related Fees | |
| — | | |
| — | |
Tax Fees | |
| 76,713 | | |
| 10,400 | |
All Other Fees | |
| — | | |
| | |
Total | |
$ | 759,664 | | |
$ | 548,808 | |
Audit Fees. Audit
fees consist of fees billed for professional services rendered for the audit of our annual consolidated financial statements and services
that are normally provided by Marcum, in connection with regulatory filings, including for professional services rendered for the audit
of our annual consolidated financial statements, review of the financial information included in our Forms 10-Q for the respective
periods and other required filings with the SEC for the applicable years. The above amounts include interim procedures and audit
fees, as well as attendance at Audit Committee meetings.
Audit-Related Fees. Audit-related services
consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our consolidated
financial statements and are not reported under “Audit Fees.” These services include attest services that are not
required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Fees. Includes
fees paid for tax return services.
All Other Fees. Includes
fees not included under “Audit Fees”, “Audit-Related Fees” and “Tax Fees”.
Audit Committee Policy for Pre-approval of
Independent Registered Public Accounting Firm Services
The Audit Committee of the
Board is required to pre-approve all audit and non-audit services provided by the Company’s independent registered public accounting
firm in order to assure that the provision of such services does not impair the independent registered public accounting firm’s
independence. The Audit Committee has established a policy regarding pre-approval of permissible audit, audit-related, and other services
provided by the independent registered public accounting firm, which services are periodically reviewed and revised by the Audit Committee.
Unless a type of service has received general pre-approval under the policy, the service will require specific approval by the Audit
Committee. All audit and permitted non-audit services and all fees associated with such services performed by our independent registered
public accounting firm in fiscal 2022 and 2021 were approved by the Audit Committee consistent with the policy described above.