Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary
Proxy Statement |
| | |
| ☐ | Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| | |
| ☒ | Definitive
Proxy Statement |
| | |
| ☐ | Definitive
Additional Materials |
| | |
| ☐ | Soliciting
Material Pursuant to §240.14a-12 |
Tivic Health Systems, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ☒ | No
fee required. |
| | |
| ☐ | Fee
paid previously with preliminary materials. |
| | |
| ☐ | Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and
0-11. |
47685 Lakeview Blvd.
Fremont, CA 94538
(888) 276-6888
Tivic Health Systems, Inc.
NOTICE OF THE 2025 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 2025
Dear Stockholder:
Notice is hereby given that the 2025 Annual Meeting
of Stockholders (the “Annual Meeting”) of Tivic Health Systems, Inc., a Delaware corporation (the “Company”),
will be held on Monday, June 30, 2025, at 1:00 p.m. Pacific Time. We have adopted a virtual format for our Annual Meeting to provide a
consistent and convenient experience to all stockholders regardless of location. You may attend the Annual Meeting virtually via the Internet
at www.virtualshareholdermeeting.com/TIVC2025, where you will be able to vote electronically and submit questions for management’s
consideration. You may also attend the Annual Meeting and submit your vote by proxy and may submit questions ahead of the Annual Meeting
through the designated website. For further information, please see the Questions and Answers about these Proxy Materials and Voting beginning
on the first page of the accompanying Proxy Statement. The purposes of the Annual Meeting are as follows:
| 1. | To elect one Class I director to hold
office until our 2028 annual meeting of stockholders, or until her successor is duly elected
and qualified, subject to prior death, resignation or removal; |
| | | |
| 2. | To approve an amendment to our Amended
and Restated 2021 Equity Incentive Plan (the “2021 Plan”) to increase the number
of shares of common stock authorized for issuance thereunder by 425,000 shares, pursuant
to the terms and conditions of the 2021 Plan; |
| | | |
| 3. | To ratify the selection of Rosenberg
Rich Baker Berman, P.A. as our independent registered public accounting firm for the fiscal
year ending December 31, 2025; |
| | | |
| 4. | To approve, in accordance with Nasdaq
Listing Rule 5635(a) and Nasdaq Listing Rule 5635(d), the issuance of shares of our common
stock, including upon conversion of shares our of Series A Non-Voting Convertible Preferred
Stock that have been, or may in the future be, issued pursuant to that Exclusive License
Agreement entered into by and between us and Statera Biopharma, Inc. on February 11, 2025,
as may be amended from time to time; |
| | | |
| | 5. | To approve, in accordance with
Nasdaq Listing Rule 5635(d), the issuance of shares of our common stock upon conversion of those shares of our Series B Non-Voting
Convertible Preferred Stock and exercise of those warrants to purchase shares of our common stock that we may in the future issue to
an investor pursuant to that Securities Purchase Agreement entered into by and between us and such investor on April 29, 2025; |
| | | |
| 6. | To approve, in accordance with Nasdaq
Listing Rule 5635(d), the sale and issuance of shares of our common stock pursuant to that
Equity Purchase Agreement entered into by and between us and Mast Hill Fund, L.P. on March
18, 2025; |
| | | |
| 7. | To approve the adjournment of the Annual
Meeting to another place, or a later date or dates, if necessary or appropriate, to solicit
additional proxies in the event we have not received sufficient votes in favor of any of
the foregoing proposals; and |
| | | |
| 8. | To consider and act upon any other
matters which may properly come before the Annual Meeting or any adjournment or postponement
thereof. |
Our Board of Directors (the “Board”)
has carefully reviewed and considered the foregoing proposals, and has concluded that each proposal is in the best interests of the Company
and its stockholders. Therefore, our Board has approved each proposal and recommends that you vote “For” the Class I director
nominee and “For” each of Proposals 2, 3, 4, 5, 6 and 7. These proposals are more fully described in the Proxy Statement
accompanying this Notice. Action may be taken on any one of the foregoing proposals at the Annual Meeting on the date specified above
or on any date or dates to which the meeting may be postponed or adjourned. We do not expect to transact any other business at the Annual
Meeting.
Our Board has fixed the close of business on
May 14, 2025 (the “Record Date”) as the record date for the determination of the stockholders entitled to notice of, and
to vote at, the Annual Meeting. Holders of outstanding shares of our Series A Non-Voting Convertible Preferred Stock are not entitled
to vote on any of the matters to be presented to our stockholders for approval at the Annual Meeting. Accordingly, only stockholders
of record of shares of our common stock as of the close of business on the Record Date will be entitled to vote at the Annual Meeting.
A list of the stockholders of record as of the close of business on the Record Date will be available for inspection by our stockholders
for any purpose germane to the Annual Meeting during normal business hours at our principal executive offices, located at 47685 Lakeview
Blvd., Fremont, California 94538, beginning ten days before the Annual Meeting through the date of the Annual Meeting.
On or about June 2, 2025, we are mailing this
Notice, along with the accompanying Proxy Statement, proxy card and our Annual Report on Form 10-K for the year ended December 31, 2024,
to each of our stockholders entitled to notice of and to vote at the Annual Meeting. Accompanying this Notice is the Proxy Statement and
a proxy card that includes voting instructions. Whether or not you expect to attend our Annual Meeting, please read these materials carefully,
complete, sign and date the enclosed proxy card and return it promptly, or complete and submit your proxy via phone or the Internet in
accordance with the instructions provided on the enclosed proxy card.
We cordially invite you to virtually attend the
Annual Meeting. Your vote is important no matter how large or small your holdings in the Company may be. If you do not expect to be present
at the Annual Meeting virtually, you are urged to promptly complete, date, sign, and return the enclosed proxy card or to submit your
vote using another method included in the proxy card you receive in the mail. If you hold your shares beneficially in street name through
a nominee, you should follow the instructions you receive from your nominee to vote your shares. Please review the instructions on each
of your voting options described in the enclosed Proxy Statement as well as in the enclosed proxy card. This will not limit your right
to virtually attend or vote at the Annual Meeting, but will help to secure a quorum and avoid added solicitation costs. You may revoke
your proxy at any time before it has been voted at the Annual Meeting.
Even if you plan to attend the virtual Annual
Meeting, we request that you submit a proxy by following the instructions provided in the enclosed proxy card you receive in the mail
as soon as possible in order to ensure that your shares will be represented at the Annual Meeting if you are unable to attend.
| |
By order of the Board of Directors, |
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|
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/s/ Sheryle Bolton |
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Sheryle Bolton |
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|
| |
Chairperson of the Board |
Fremont, California
June 2, 2025
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING, WE ASK YOU TO VOTE BY TELEPHONE, MAIL, FAX OR ON THE INTERNET USING THE INSTRUCTIONS PROVIDED IN THE ENCLOSED PROXY
CARD.
TABLE OF CONTENTS
47685 Lakeview Blvd.
Fremont, California 94538
(888) 276-6888
PROXY STATEMENT
FOR THE 2025 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 2025
GENERAL INFORMATION
This proxy statement (the “Proxy Statement”)
is furnished in connection with the solicitation of proxies by the board of directors (the “Board”) of Tivic Health Systems,
Inc., a Delaware corporation (the “Company,” “Tivic,” “we” or “us”), for use at the 2025
Annual Meeting of Stockholders of the Company (the “Annual Meeting”), to be held on Monday, June 30, 2025, at 1:00 p.m. Pacific
Time. We have adopted a virtual format for our Annual Meeting to provide a healthy, consistent, and convenient experience to all stockholders,
regardless of location. You may attend the Annual Meeting virtually via the Internet at www.virtualshareholdermeeting.com/TIVC2025, where
you will be able to vote electronically and submit questions for management’s consideration. You may also attend the Annual Meeting
and submit your vote by proxy and may submit questions ahead of the Annual Meeting through the designated website. For further information,
please see the Questions and Answers about these Proxy Materials and Voting beginning on page 2 of this Proxy Statement.
Holders of outstanding shares of our Series A
Non-Voting Convertible Preferred Stock (“Series A Preferred”) are not entitled to vote such shares on any of the matters to
be presented to our stockholders for approval at the Annual Meeting. Accordingly, only stockholders of record of shares of our common
stock (“Common Stock”) as of the close of business on the Record Date will be entitled to vote at the Annual Meeting.
On or about June 2, 2025, we are mailing this
Proxy Statement and the accompanying proxy card, together with a copy of our Annual Report on Form 10-K for the year ended December 31,
2024 (our “Annual Report”), to each of our stockholders entitled to notice of and to vote at the Annual Meeting. This Proxy
Statement and the enclosed proxy card include instructions for how stockholders entitled to vote at the Annual Meeting may vote their
shares.
This Proxy Statement and our Annual Report will
also be accessible online on or about June 2, 2025 at: https://ir.tivichealth.com/investors/sec-filings/.
Only stockholders of record of our Common Stock
at the close of business on May 14, 2025 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting.
At the close of business on the Record Date, there were 878,341 shares of our Common Stock issued and outstanding, which were held by
approximately 95 stockholders of record as of such date. Shares of our Common Stock cannot be voted at the Annual Meeting unless the holder
thereof is present or represented by proxy. The presence at the Annual Meeting, virtually or by proxy, of the holders of one-third of
the Company’s Common Stock issued and outstanding, as of the close of business on the Record Date, and entitled to vote at the Annual
Meeting will constitute a quorum for the transaction of business at the Annual Meeting and any adjournment or postponement thereof.
Our Board has selected Jennifer Ernst to serve
as the holder of proxies for the Annual Meeting. The shares of Common Stock represented by each executed and returned proxy will be voted
by Ms. Ernst in accordance with the directions indicated on the proxy. If you sign your proxy card without giving specific instructions,
Ms. Ernst will vote your shares “FOR” the Class I director nominee and “FOR” each of the other proposals being
made at the Annual Meeting. The proxy also confers discretionary authority to vote the shares authorized to be voted thereby on any other
matter that may be properly presented for action at the Annual Meeting; we currently know of no other business to be presented.
Any proxy given may be revoked by the person
giving it at any time before it is voted at the Annual Meeting. If you have not voted through your broker or other third-party intermediary,
there are three ways for you to revoke your proxy and change your vote. First, you may send a written notice to the Company’s Secretary
stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card or otherwise submit a new proxy
through the methods noted on the proxy card, but such new proxy must bear a later date than the original proxy. Third, you may vote virtually
at the Annual Meeting. However, your attendance at the Annual Meeting will not, by itself, revoke your proxy. If you have instructed
a broker or other third-party intermediary to vote your shares, you must follow the directions you receive from them to change your vote.
Your last submitted proxy will be the proxy that is counted. Please note that dissenters’ rights are not available with respect
to any of the proposals to be voted on at the Annual Meeting.
We will provide copies of this Proxy Statement,
our Annual Report, and accompanying materials to brokerage firms, fiduciaries, and custodians for forwarding to beneficial owners and
will reimburse these persons for their costs of forwarding these materials. Our directors, officers, and employees may solicit proxies
by telephone, facsimile, or personal solicitation. We will not pay additional compensation for any of these services.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
| Q. | When is the Annual Meeting? |
| A. | Monday, June 30, 2025, at 1:00 p.m. Pacific Time. |
| Q. | Where will the Meeting be held?
|
| A. | We have adopted a completely virtual format
for our Annual Meeting to provide a healthy, consistent, and convenient experience to all
stockholders regardless of location. You may attend, vote, and submit questions for management’s
consideration during the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/TIVC2025. |
| Q. | Will there be a Q&A session
during the Annual Meeting? |
| A. | We will not be holding a live Q&A session
as part of the Annual Meeting; however, stockholders may submit questions for management’s
consideration through the virtual Annual Meeting platform both before and during the Annual
Meeting. |
| Q. | Why am I receiving these Proxy Materials?
|
| A. | We sent you this Proxy Statement and the enclosed
proxy card because our Board is soliciting your proxy to vote at the Annual Meeting. This
Proxy Statement summarizes information related to the proposals being presented for your
vote at the Annual Meeting. You are invited to virtually attend the Annual Meeting to vote
on the proposals described in this Proxy Statement. However, you do not need to attend the
Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the
enclosed proxy card, or complete and submit your proxy via phone or the internet in accordance
with the instructions provided on the enclosed proxy card. We intend to begin mailing this
Proxy Statement, together with the accompanying Notice of Annual Meeting, enclosed proxy
card and our Annual Report, on or about June 2, 2025, to all stockholders of record entitled to
vote at the Annual Meeting. |
| Q. | Who is entitled to vote at the Annual
Meeting? |
| A. | Only stockholders who owned shares of
our Common Stock at the close of business on the Record Date are entitled to notice of, and
to vote at, the Annual Meeting and at any postponements or adjournments thereof. Holders
of outstanding shares of our Series A Preferred are not entitled to vote such shares on any
of the matters to be presented to our stockholders for approval at the Annual Meeting. |
At the close of business on the Record
Date, there were 878,341 shares of our Common Stock issued and outstanding which were held by approximately 95 stockholders of record
as of such date. For each share of Common Stock held as of the Record Date, the holder is entitled to one vote on each proposal to be
voted on.
Notwithstanding the foregoing, for
purposes of the listing rules of the Nasdaq Stock Market, (i) Statera Biopharma, Inc. (“Statera”) and Avenue Venture Opportunities
Fund, L.P. (“Avenue”) are not entitled to vote the 61,205 and 50,134 shares of Common Stock, respectively, that they received
prior to the Record Date pursuant to that Exclusive License Agreement entered into by and between us and Statera on February 11, 2025
(as may be amended from time to time, the “License Agreement”) on Proposal 4, and (ii) Mast Hill Fund, L.P. (“Mast Hill”)
is not entitled to vote the 29,800 shares of Common Stock that it received prior to the Record Date as commitment shares pursuant to that
Equity Purchase Agreement entered into by and between us and Mast Hill on March 18, 2025 (the “Equity Line of Credit”) on
Proposal 6. Accordingly, although we will include any votes cast by Statera, Avenue and Mast Hill on Proposals 4 and 6, as applicable,
in the voting tally for purposes of determining whether the respective proposals have been approved under Delaware law, to comply with
Nasdaq rules, to the extent such shares are voted on the respective proposals, we will instruct the inspector of elections to conduct
a separate tabulation that subtracts such shares cast by Statera, Avenue and Mast Hill, respectively, on such proposals from the total
number of shares voted on Proposals 4 and 6, as applicable, to determine whether such proposals have been approved in accordance with
applicable Nasdaq rules.
| Q. | How many shares must be present
to conduct business? |
| A. | The presence at the Annual Meeting, virtually
or by proxy, of the holders of one-third of the Company’s Common Stock issued and outstanding,
as of the close of business on the Record Date, and entitled to vote at the Annual Meeting
will constitute a quorum for the transaction of business at the Annual Meeting and any adjournment
or postponement thereof. A quorum is required to conduct business at the Annual Meeting and
any adjournment or postponement thereof. |
| Q. | What will be voted on at the Annual
Meeting? |
| A. | The following chart sets forth the proposals
scheduled for a vote at the Annual Meeting and the vote required for such proposals to be
approved. |
Proposal
|
Votes Required
|
Voting
Options
|
Board
Recommendation
|
| Proposal 1: To elect one Class I director to hold office until
our 2028 annual meeting of stockholders, or until her successor is duly elected and qualified, subject to prior death, resignation
or removal. |
The plurality of the votes cast
at the Annual Meeting. This means that the nominee receiving the highest number of affirmative (“FOR”) votes (among votes
properly cast virtually or by proxy) will be elected as the Class I director.
Only votes “FOR” will
affect the outcome. “WITHHOLD” votes and broker non-votes will not affect the outcome of the vote on this proposal. |
“FOR”
or “WITHHOLD” |
“FOR” the nominated Class I Director |
| |
|
|
|
| Proposal 2: To approve an amendment to our Amended and Restated
2021 Equity Incentive Plan (the “2021 Plan”) to increase the number of shares of Common Stock authorized for issuance
thereunder by 425,000 shares, pursuant to the terms of the 2021 Plan. |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes will not affect the outcome of the vote on this proposal. The approval of Proposal 2 is a non-routine
proposal on which a broker or other nominee does not have discretionary authority to vote. |
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| |
|
|
|
| Proposal 3: To ratify selection of Rosenberg Rich Baker Berman,
P.A. as our independent registered public accounting firm for the fiscal year ending December 31, 2025. |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes, if any, will not affect the outcome of the vote on this proposal. However, because we believe that this
proposal will be treated as a routine matter, we do not expect to receive any broker non-votes with respect to this proposal. |
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| |
|
|
|
| Proposal 4: To approve, in accordance with Nasdaq Listing Rule
5635(a) and Nasdaq Listing Rule 5635(d), the issuance of shares of our Common Stock, including upon conversion of shares our Series
A Preferred that have been, or may in the future be, issued pursuant to the License Agreement. |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes, if any, will not affect the outcome of the vote on this proposal. The approval of Proposal 4 is a non-routine
proposal on which a broker or other nominee does not have discretionary authority to vote.
|
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| |
|
|
|
| Proposal 5: To approve, in accordance with Nasdaq Listing Rule
5635(d), the issuance of shares of our Common Stock upon conversion of those shares of our Series B Non-Voting Convertible Preferred
Stock (“Series B Preferred”) and exercise of those warrants to purchase shares of our Common Stock (the “Warrants”)
that we may in the future issue to an investor pursuant to that Securities Purchase Agreement entered into by and between us and
such investor on April 29, 2025 (the “Preferred Purchase Agreement”). |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes, if any, will not affect the outcome of the vote on this proposal. The approval of Proposal 5 is a non-routine
proposal on which a broker or other nominee does not have discretionary authority to vote.
|
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| |
|
|
|
| Proposal 6: To approve, in accordance
with Nasdaq Listing Rule 5635(d), the sale and issuance of shares of our Common Stock to Mast Hill pursuant to the Equity Line of
Credit. |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes, if any, will not affect the outcome of the vote on this proposal. The approval of Proposal 6 is a non-routine
proposal on which a broker or other nominee does not have discretionary authority to vote.
|
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| Proposal 7: To approve the adjournment
of the Annual Meeting to another place, or a later date or dates, if necessary or appropriate, to solicit additional proxies in the
event we have not received sufficient votes in favor of any of the foregoing proposals. |
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter.
Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
proposal. Broker non-votes, if any, will not affect the outcome of the vote on this proposal. However, because we believe that this
proposal will be treated as a routine matter, we do not expect to receive any broker non-votes with respect to this proposal. |
“FOR”
or “AGAINST” or
“ABSTAIN” |
“FOR” |
| Q. | What shares can I vote at the Annual
Meeting? |
| A. | You may vote all of the shares of Common Stock
owned by you as of the Record Date, including (i) shares held directly in your name as the
stockholder of record, and (ii) shares held for you as the beneficial owner through a broker,
trustee, or other nominee such as a bank. |
| Q. | What is the difference between holding
shares as a stockholder of record and as a beneficial owner? |
| A. | Some of our stockholders hold shares of our
Common Stock in their own name rather than through a broker or other nominee. As summarized
below, there are some distinctions between shares held of record and those owned beneficially. |
Stockholders of Record. If
your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, you are considered to be, with respect
to those shares, the stockholder of record, and these proxy materials were sent directly to you. As the stockholder of record, you have
the right to vote virtually at the Annual Meeting and to vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge
you to vote by Internet, by phone, or by mail to ensure your vote is counted. You may still attend the Annual Meeting and vote virtually
if you have already voted by proxy.
Beneficial Owner. If your
shares are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street
name,” and these proxy materials, together with a voting instruction card, are being forwarded to you from that organization. As
the beneficial owner, you have the right to direct your broker, trustee, or nominee how to vote on your behalf and are also invited to
attend the Annual Meeting. Please note that since a beneficial owner is not the stockholder of record, you may not vote these shares
virtually at the Annual Meeting unless you obtain a “legal proxy” from the broker, trustee, or nominee that holds your shares,
giving you the right to vote the shares at the Annual Meeting. If this applies to you, your broker, trustee, or nominee will have enclosed
or provided voting instructions for you to use in directing the broker, trustee, or nominee how to vote your shares.
| Q. | How can I vote my shares without
attending the Annual Meeting? |
| A. | Whether you hold shares directly as the stockholder
of record or beneficially in street name, you may direct how your shares are voted without
attending the Annual Meeting. If you are a stockholder of record, you may vote by proxy by
Internet, by phone, or by mail by following the instructions provided on the enclosed proxy
card. Record holders have the option of voting by telephone at 1 (800) 690-6903 or by Internet
at www.proxyvote.com. Additionally, record holders can vote by filling out the enclosed proxy
card, signing it, and returning it in the postage paid return envelope. If you hold shares
in street name, you must vote by giving instructions to your bank, broker, or other nominee.
You should follow the voting instructions on the form that you receive from your bank, broker,
or other nominee. |
If you submit your vote via phone
or the Internet or you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. Stockholders
who hold shares beneficially in street name may cause their shares to be voted by proxy in accordance with the instructions provided
by their broker, trustee, or nominee, by using the proxy card provided by the broker, trustee, or nominee and mailing them in the envelope
provided by such person.
| Q. | How can I vote my shares at the
Annual Meeting? |
| A. | Stockholders who attend the Annual Meeting
virtually should follow the instructions at www.virtualshareholdermeeting.com/TIVC2025 to
vote or submit questions for management’s consideration during the Annual Meeting.
Voting online during the Annual Meeting will replace any previous votes, and the online polls
will close at approximately 1:05 p.m. Pacific Time on June 30, 2025. |
| Q. | How do I attend the virtual Annual
Meeting? |
| A. | You may attend the Annual Meeting virtually, including to vote and/or submit
questions for management’s consideration during the Annual Meeting, by logging in at www.virtualshareholdermeeting.com/TIVC2025.
The Annual Meeting will begin at approximately 1:00 p.m. Pacific Time, with log-in beginning at 12:45 p.m., on June 30, 2025. |
| Q. | How do I gain admission to the Annual
Meeting? |
| A. | You are entitled to vote on the matters being
presented to our stockholders for approval at the Annual Meeting only if you were a stockholder
of record who owned shares of our Common Stock at the close of business on May 14, 2025,
the Record Date. To attend online and participate in the Annual Meeting, stockholders of
record will need to use the control number included on their proxy card to log into www.virtualshareholdermeeting.com/TIVC2025;
beneficial owners who do not have a control number may gain access to the Annual Meeting
by logging into their brokerage firm’s website and selecting the stockholder communication
mailbox to link through to the Annual Meeting. Instructions should also be provided on the
voting instruction card provided by their broker, bank, or other nominee. |
We encourage you to access the Annual
Meeting prior to the start time. Please allow time for online check-in, which will begin at 12:45 p.m. Pacific Time. If you have difficulties
during the check-in time or during the Annual Meeting, please call technical support at 1(844) 986-0822.
Stockholders will have multiple opportunities
to submit questions to the Company for consideration both before and during the Annual Meeting. Stockholders who wish to submit a question
may do so in the question tab of the webcast online upon logging in and during the Annual Meeting at www.virtualshareholdermeeting.com/TIVC2025.
| A. | If you provide specific instructions with
regard to an item, your shares will be voted as you instruct on such item. If you sign your
proxy card without giving specific instructions, your shares will be voted in accordance
with the recommendations of the Board (“FOR” the Class I director nominee, “FOR”
Proposal 2, “FOR” Proposal 3, “FOR” Proposal 4, “FOR”
Proposal 5, “FOR” Proposal 6, “FOR” Proposal 7, and in the discretion
of the proxy holder on any other matters that properly come before the Annual Meeting). |
| Q. | What is a “broker non-vote”?
|
| A. | A broker non-vote occurs when a beneficial
owner of shares held in street name does not give instructions to the broker or nominee holding
the shares as to how to vote on matters deemed “non-routine.” Generally, if shares
are held in street name, the beneficial owner of the shares is entitled to give voting instructions
to the broker or nominee holding the shares. If the beneficial owner does not provide voting
instructions, the broker or nominee can still vote the shares with respect to matters that
are considered to be “routine,” but not with respect to “non-routine”
matters. Under the rules and interpretations of the New York Stock Exchange (the “NYSE”),
brokers, trustees or other nominees may generally vote on routine matters but cannot vote
on non-routine matters. The determination of which proposals are deemed “routine”
versus “non-routine” may not be made by the NYSE until after the date on which
this proxy statement has been mailed to you. As such, it is important that you provide voting
instructions to your bank, broker or other nominee, in order to ensure that your shares are
voted. The shares that cannot be voted by brokers and other nominees on non-routine matters
but are represented at the Annual Meeting will be deemed present at our Annual Meeting for
purposes of determining whether the necessary quorum exists to proceed with the Annual Meeting,
but will not be considered entitled to vote on the non-routine proposals. |
We believe that Proposals 1, 2, 4,
5 and 6 are considered non-routine matters under applicable rules. Accordingly, brokers or other nominees cannot vote on these proposals
without instructions from beneficial owners.
We believe that under applicable
rules, Proposals 3 and 7 are considered routine matters for which brokerage firms may vote shares that are held in the name of brokerage
firms and which are not voted by the applicable beneficial owners. Accordingly, if you do not instruct your broker or nominee to vote
your shares, the broker or other nominee may either (a) vote your shares on routine matters, or (b) leave your shares unvoted altogether.
If Proposals 3 and 7 are treated as routine matters, as expected, we do not expect to receive any broker non-votes with respect to Proposals
3 and 7.
| Q. | How are abstentions counted? |
| A. | If you return a proxy card that indicates
an abstention from voting on all matters, the shares represented will be counted for the
purpose of determining the presence of a quorum. |
With regard to Proposal 1, votes
may be cast in favor of the Class I director nominee or withheld. Because directors are elected by plurality, withhold votes will have
no effect on its outcome.
With regard to each of Proposals 2,
3, 4, 5, 6 and 7, abstentions will be treated as shares that are present and entitled to vote on each of such proposals, and will therefore
be treated as a vote “AGAINST” such proposals.
| Q. | Are dissenters’ rights available
with respect to any of the proposals? |
| A. | Dissenters’ rights are not available
with respect to any of the proposals to be voted on at the Annual Meeting. |
| Q. | What should I do if I receive more
than one Set of Proxy Materials? |
| A. | If you receive more than one set of proxy
materials, your shares are registered in more than one name or are registered in different
accounts. Please follow the instructions on each proxy card you receive to ensure that all
of your shares are voted. |
| Q. | Can I change my mind after I return
my proxy? |
| A. | Yes. You may change your vote at any time
before your proxy is voted at the Annual Meeting. If you are a stockholder of record, there
are three ways for you to revoke your proxy and change your vote. First, you may send a written
notice to the Company’s Secretary stating that you would like to revoke your proxy.
Second, you may complete and submit a new proxy, but it must bear a later date than the original
proxy. Third, you may vote virtually at the Annual Meeting. However, your attendance at the
Annual Meeting will not, by itself, revoke your proxy. If you are a stockholder in “street”
or “nominee” name, you should consult with the bank, broker, or other nominee
regarding that entity’s procedures for revoking your voting instructions. Your last
submitted proxy will be the proxy that is counted. |
| Q. | Who is soliciting my vote and who
is paying the costs? |
| A. | Your vote is being solicited on behalf of
the Board, and the Company will pay the costs associated with the solicitation of proxies,
including preparation, assembly, printing, and mailing of the proxy materials. |
| Q. | How can I find out the results of
the voting? |
| A. | We intend to announce preliminary voting results
at the Annual Meeting and publish final results in a Current Report on Form 8-K filed with
the Securities and Exchange Commission (the “Commission”) within four business
days from the Annual Meeting. |
PROPOSAL 1
ELECTION OF CLASS I DIRECTOR
Background
In accordance with the terms of our amended and
restated certificate of incorporation, as amended (our “Charter”), our Board is divided into three staggered classes of directors,
and each of our directors is assigned to one of the three classes, Class I, Class II and Class III. Currently, our directors are divided
among the three classes as follows:
| · | the
Class I director is Christina Valauri, and her current term will expire at the Annual Meeting; |
| | | |
| · | the
Class II director is Dean Zikria, and his current term will expire at our 2026 annual meeting
of stockholders; and |
| | | |
| · | the
Class III directors are Sheryle Bolton and Jennifer Ernst, and their current terms will expire
at our 2027 annual meeting of stockholders. |
The Nominations and Corporate Governance Committee
of our Board has recommended, and our Board has nominated, Christina Valauri for re-election as our Class I director at the Annual Meeting
for a period of three years, or until her successor is elected and qualified, subject to her earlier death, resignation or removal. At
the Annual Meeting, one Class I director will be elected to our Board.
Information Regarding our Class I Director
The below table and narrative disclosures include
information about our Class I director nominee.
Name
|
|
Age
|
|
Position
|
| Christina Valauri |
|
69 |
|
Class I Director |
Christina Valauri has served as
a director on our Board since July 1, 2024, prior to which she served as a strategic advisor to the Company starting in April 2023. Ms.
Valauri brings over 30-years of experience as a seasoned capital markets professional with extensive analytical and management experience.
She has a proven track record as a senior healthcare analyst, U.S. and Global Head of Equity Research, senior broker-dealer manager,
strategic business consultant, and board director and advisor. As a managing director and senior manager within capital markets, she
has successfully developed and executed transformational business strategies in the U.S. and internationally to drive growth and provide
enhanced operating performance and comprehensive regulatory and supervisory oversight. She has held leadership roles at U.S. and international
firms, including as the Global Director of Research at Cantor Fitzgerald, and senior research management roles at Credit Lyonnais, ING
and Natixis. Ms. Valauri’s career in equity securities research expands the Boards’ deep expertise in pharmaceutical, biotech,
and med-tech industries. She has extensive experience identifying and analyzing the commercial potential of breakthrough innovations,
as well as mentoring and advising C-suite teams of private and public early-stage healthcare companies through product development, regulatory,
go-to-market strategies, potential mergers and acquisitions, and IPOs. Ms. Valauri has served as a Mentor at Weill Cornell Medicine BioVenture
eLab since April 2021, where she previously served as an Entrepreneur in Residence from July 2023 to July 2024. Ms. Valauri is the founder
of Sagestone Advisory, LLC, where she has served as Chief Executive Officer since July 2017, and also serves as a senior advisor with
Hanover International, Inc. and Astia.org. She has been recognized by The Wall Street Journal’s “Best on The Street”
All-Star Analyst Survey and has received the Award for Excellence in Medical Education Public. Ms. Valauri has served as a director on
the board of Precipio, Inc. (NASDAQ: PRPO) and a member of its nominations and governance committee since January 2024, prior to which,
from June 2023 to December 2023, she served as an advisor to the board of Precipio. Ms. Valauri holds a Bachelor of Arts in Biology from
Reed College and a Master of Business Administration from Cornell University Johnson School of Management.
We believe that Ms. Valauri is qualified to serve
as a member of our Board due to her significant experience as an entrepreneur, executive and public company board member, as well as
experience in the capital markets space.
Nomination of Directors
Our Nominations and Corporate Governance Committee
is charged with making recommendations to our Board regarding qualified candidates to serve as members of the Board. The Nominations
and Corporate Governance Committee’s goal is to assemble a board of directors with the skills and characteristics that, taken as
a whole, will assure a strong board of directors with experience and expertise in all aspects of corporate governance. Accordingly, the
committee believes that candidates for director should have certain minimum qualifications, including personal integrity, strength of
character, an inquiring and independent mind, practical wisdom, and mature judgment. In evaluating director nominees, the Nominations
and Corporate Governance Committee considers the following factors:
| (1) | The appropriate size of the Board; |
| (2) | The Company’s needs with respect
to the particular talents and experience of its directors; |
| (3) | The knowledge, skills, and experience
of nominees, including experience in technology, business, finance, administration, and/or
public service; and |
| (4) | Relevant Nasdaq, SEC, California, and
investor recommendations and requirements. |
Other than the foregoing, there are no stated
minimum criteria for director nominees, although the Nominations and Corporate Governance Committee may also consider such other factors
as it deems to be in the Company’s and its stockholders’ best interests, including diversity. The Nominations and Corporate
Governance Committee does, however, believe it appropriate for at least one member of the Board to meet the criteria for an “audit
committee financial expert,” as defined by Commission rules, and for a majority of the members of the Board to meet the definition
of an “independent director” under Nasdaq listing standards. The Nominations and Corporate Governance Committee also believes
it is appropriate for our Chief Executive Officer to serve on our Board.
The Nominations and Corporate Governance Committee
identifies nominees by first evaluating the current members of the relevant class of our Board that are willing to continue in service.
Current members of our Board with skills and experience that are relevant to our business and who are willing to continue in service
are considered for re-nomination, but the committee at all times seeks to balance the value of continuity of service by existing members
of the Board with that of obtaining a new perspective. If any member of the relevant class of our Board does not wish to continue in
service at the time that their term is scheduled to expire, the Nominations and Corporate Governance Committee’s policy is to not
re-nominate that member for re-election. The Nominations and Corporate Governance Committee identifies the desired skills and experience
of a new nominee, and then uses its network and external resources to solicit and compile a list of eligible candidates.
We do not have a formal policy concerning stockholder
recommendations of nominees for director to the Nominations and Corporate Governance Committee as, to-date, we have not received any
recommendations from stockholders requesting the Nominations and Corporate Governance Committee to consider a candidate for inclusion
among the Company’s slate of nominees in our proxy statements. However, the absence of such a policy does not mean that such recommendations
will not be considered. Notwithstanding the foregoing, stockholders wishing to recommend a candidate for election must follow the process
outlined in Section 2.5 of our amended and restated bylaws, as amended (our “Bylaws”), and comply with the rules established
by the Commission, including Rule 14a-19 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable.
In connection with the exclusive license agreement
that we entered into with Statera on February 11, 2025, Statera is entitled to nominate one individual to serve as a director on the Board;
however, Statera has not exercised its right to do so as of the date of this Proxy Statement. Except for Statera’s right to nominate
an individual to serve as a director on our Board, there are no arrangements or understandings between any of our directors, nominees
for directors or officers and any other person pursuant to which any director, nominee for director, or officer was or is to be selected
as a director, nominee or officer, as applicable. To our knowledge, there are currently no legal proceedings, and during the past ten
years there have been no legal proceedings, that we believe are required to be disclosed pursuant to Item 4.01(f) of Regulation S-K. There
are no material proceedings to which any director, officer, affiliate, or owner of record or beneficial owner of more than 5% of the issued
and outstanding shares of Common Stock of the Company, or any associates of any such persons, is a party adverse to the Company, and,
to our knowledge, none of such persons has a material interest adverse to the Company. Other than as disclosed elsewhere in this Proxy
Statement, to our knowledge, during the last five years, none of our directors held any other directorships in any company with a class
of securities registered pursuant to Section 12 of the Exchange Act, or subject to the requirements of Section 15(d) of the Exchange Act
or any company registered as an investment company under the Investment Company Act of 1940.
Vote Required
If a quorum is present and voting at the Annual
Meeting, the one Class I director nominee receiving the highest number of “FOR” votes will be elected to our Board. Votes
withheld from any nominee and broker non-votes will be counted only for purposes of determining a quorum. Broker non-votes will have
no effect on the outcome of this Proposal 1, as brokers and other nominees are not entitled to vote on this proposal in the absence of
voting instructions from the beneficial owner.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ELECTION OF THE
CLASS I DIRECTOR NOMINEE UNDER PROPOSAL 1
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE AMENDED AND RESTATED
2021 EQUITY INCENTIVE PLAN
At the Annual Meeting, our stockholders will
be asked to approve an amendment to our Amended and Restated 2021 Equity Incentive Plan (the “2021 Plan”) to increase the
number of shares of our Common Stock authorized for issuance thereunder by 425,000 shares (the “Plan Amendment”).
Background and the
Proposed Plan Amendment
In August 2021, our Board adopted, and our stockholders
approved, our original 2021 Equity Incentive Plan, which became effective upon completion of the initial public offering of our Common
Stock in November 2021.
On June 15, 2024, our Board unanimously approved
the amendment and restatement of our original 2021 Equity Incentive Plan and the adoption of the 2021 Plan (as amended and restated),
subject to stockholder approval, on June 15, 2024, and our stockholders approved the 2021 Plan (as amended and restated) at our 2024 annual
meeting of stockholders held on August 9, 2024. On August 9, 2024, effective upon receipt of stockholder approval, we amended and restated
our original 2021 Equity Incentive Plan, which amended and restated the original plan in full.
On May 14, 2025, our Board unanimously approved
the Plan Amendment, subject to stockholder approval thereof, and directed that the Plan Amendment be submitted to our stockholders for
approval at the Annual Meeting. Except for the proposed increase in the number of shares of our Common Stock that may be issued pursuant
to awards granted under the 2021 Plan and related conforming changes to the 2021 Plan, the Plan Amendment does not change any other term
or provision of the 2021 Plan as in effect prior to the Plan Amendment. If approved by our stockholders, the Plan Amendment will become
effective as of the date of such approval.
As of May 14, 2025, an aggregate of 86,669 shares
of Common Stock are currently authorized for issuance under the 2021 Plan, approximately 53,268 of which were subject to outstanding awards
issued under the 2021 Plan and only approximately 33,401 shares of which were available for future awards under the 2021 Plan. If the
Plan Amendment is approved, there will be an aggregate of 511,669 shares of Common Stock authorized for issuance under the 2021 Plan.
Purpose of the 2021 Plan
The principal purpose of the 2021 Plan is to
attract, retain and incentivize the Company’s officers, directors employees and other service providers through the grant of certain
stock-based awards, including performance-based awards.
We believe that the grant of equity awards to
our officers, directors, employees and service providers provides additional incentive for such individuals to further the growth, development
and financial success of the Company by providing a means by which such persons can personally benefit through the ownership of capital
stock of the Company. Additionally, we believe that including the grant of equity awards as a portion of the compensation we pay to our
officer, directors, employees and certain service providers better enables us to secure and retain key employees, directors and consultants
considered important to the long-term success of the Company by offering such persons an opportunity to own capital stock of the Company.
Reasons for Approval
of the Plan Amendment
The primary purpose of the Plan Amendment is to
increase the number of shares available for issuance pursuant to awards that may be granted to our officers, directors, employees and
key service providers from time to time under the 2021 Plan. Our Board believes that our interests and the interests of our stockholders
will be advanced if we can continue to offer our current and future members of senior management, employees, non-employee directors, advisors
and consultants the opportunity to acquire or increase their equity interests in the Company. The market for quality personnel is competitive,
and our Board has concluded that our ability to attract, retain and motivate top quality management and employees is material to our success.
Given our limited cash resources and planned investments in our pre-clinical and clinical programs, we believe that our ability to grant
equity as a component of our compensation programs is particularly important for long-term incentives that further our business, establish
and maintain alignment between management and our stockholders, and provide strong incentive opportunities to increase stockholder value.
As disclosed in our filings with the Commission,
on February 11, 2025, we entered into the License Agreement with Statera, pursuant to which we acquired worldwide exclusive license rights
to the late-stage Toll-like Receptor 5 (“TLR5”) agonist Entolimod for the treatment of acute radiation syndrome, as well as
an exclusive option to license five additional indications and clinical use cases for Entolimod and second generation product candidate,
Entolasta. Additionally, on March 28, 2025, we notified Statera of our election to exercise our exclusive option with respect to the neutropenia
indication for Entolimod. As a result of the licenses, we added biologic immunotherapy to our clinical pipeline and launched our TLR5
focused biopharma program. In connection therewith, on February 18, 2025, we hired Michael Handley, Statera’s former Chief Executive
Officer, and appointed him as our Chief Operating Officer and President of Tivic Biopharma. Since February, we have hired an additional
three employees to service our TLR5 business, and we expect that we will need to continue to hire additional employees and engage additional
service providers as we continue to move forward with the expansion and development of our business, including through pre-clinical and
clinical trials, research and development activities, obtaining regulatory approval and potential commercialization of our drug candidates.
As a result, we have already increased, and expect to further increase in the near term, the number of individuals eligible to receive
awards under the 2021 Plan.
Additionally, we expect that we will need to secure
significant additional capital to fund our business, which may result in the issuance of a significant number of shares of our Common
Stock or equity convertible or exercisable for shares of our Common Stock. On March 18, 2025, we entered into the Equity Line of Credit
with Mast Hill, pursuant to which, subject to certain limitations (including stockholder approval, as requested pursuant to Proposal 6
hereof), we will have the right to sell to Mast Hill, and Mast Hill will have the obligation to purchase, up to $25 million shares of
our Common Stock over the two year term of the agreement. On April 29, 2025, we entered into the Preferred Purchase Agreement with Helena
Global Investment Opportunities 1 Ltd. (the “Series B Preferred Investor”), pursuant to which, subject to the conditions set
forth therein (including stockholder approval, as requested pursuant to Proposal 5 hereof), the Series B Preferred Investor shall purchase
up to 8,400 shares of our Series B Preferred Stock and Warrants for a total purchase price of up to $8.4 million in several tranche closings
prior to December 31, 2025 (the “Preferred Offering”). Furthermore, as of May 14, 2025, we have issued an aggregate of 490.7958
shares of Series A Preferred to Statera and Avenue in connection with the License Agreement. Subject to certain limitations, the shares
of Series A Preferred and Series B Preferred are or will be convertible into shares of our Common Stock, as more particularly discussed
in Proposals 4 and 5 hereof. We believe that in order to ensure that our officers, directors, employees and other service providers are
incentivized to further the growth, development and financial success of the Company, the number of shares subject to equity awards granted
to them should provide for a meaningful ownership interest in our securities. Accordingly, we believe that the Plan Amendment is important
to ensure that we have sufficient shares available for issuance under the 2021 Plan to effectively utilize the grant of equity awards
to incentivize such persons, taking into consideration the number of shares of our Common Stock that are likely to be issued in the near
term pursuant to the foregoing arrangements.
Overall, we believe that adoption of the Plan
Amendment will significantly enhance our ability to attract and retain highly qualified officers, directors, employees and key service
providers, increase our flexibility in developing meaningful compensation plans that motivate such individuals to expend maximum effort
to improve our business results, and provide those individuals an opportunity to acquire or increase a direct proprietary interest in
our operations and the future success they drive to create. For the foregoing reasons, our Board believes that the Plan Amendment is
necessary for the continued optimal use of the 2021 Plan.
If our stockholders do not approve the Plan Amendment
at the Annual Meeting, the Plan Amendment will not become effective, and the number of shares of Common Stock authorized for issuance
under the Plan will remain at 86,669 shares of Common Stock (subject to the annual increase on January 1 of every year, as provided by
the 2021 Plan).
Dilution Analysis
Our Board evaluated the dilution potentially
caused by the Plan Amendment in connection with its approval of the Plan Amendment and believes the potential dilutive impact of the
increase in the number of shares of Common Stock proposed to be added to the 2021 Plan pursuant to the Plan Amendment is reasonable in
light of the objectives and other considerations summarized above.
The table below shows the potential dilution
resulting from the Plan Amendment based on the number of shares of our Common Stock outstanding as of May 14, 2025 and the number of
shares of our Common Stock that would be outstanding on a pro-forma partially-diluted basis as of May 14, 2025, calculated based on the
formula and assumptions described in footnote (2) to the below table. We believe it is appropriate to measure dilution relative to our
pro-forma partially-diluted capitalization given the number of shares of Common Stock potentially issuable upon conversion of the outstanding
shares of Series A Preferred and the shares of Series B Preferred that may be sold and issued to the Series B Preferred Investor pursuant
to the Preferred Offering, as we believe such issuances and conversions are probable.
We believe that the number of shares of Common
Stock proposed to be added to the 2021 Plan by the Plan Amendment represents a reasonable amount of potential equity dilution and will
allow us to continue granting equity awards, while also pursuing our objectives to (i) create a culture of ownership among our employee
and director base, (ii) align the interests of our employees and stockholders, (iii) attract and retain top talent, and (iv) reduce the
amount of cash used in our compensation programs in order to build the amount of cash we have available to operate and grow our business.
| Shares authorized under the 2021 Plan prior to the Plan Amendment: | |
| |
| Total shares authorized issuance under the 2021 Plan as of May 14, 2025 | |
| 86,669 | |
| Total shares subject to outstanding awards as of May 14, 2025 | |
| 53,268 | |
| Available shares as of May 14, 2025 (prior to Plan Amendment and any future evergreen increases) | |
| 33,401 | |
| | |
| | |
| Additional shares requested for the 2021 Plan pursuant to the Plan Amendment: | |
| 425,000 | |
| | |
| | |
| Total potential 2021 Plan overhang after the Plan Amendment:(1) | |
| 511,669 | |
| | |
| | |
| Pro-forma partially diluted shares outstanding as of May 14, 2025, including additional shares requested under Plan Amendment:(2) | |
| 3,926,628 | |
| Potential pro-forma partially-diluted overhang, assuming the Plan Amendment: | |
| 13.03% | |
| |
(1) |
Total shares authorized under the 2021 Plan after the Plan Amendment is calculated as the sum of: (i) the total shares of Common Stock that remain available for issuance under the 2021 Plan as of May 14, 2025 (excluding any shares that may be added in the future pursuant to the evergreen provision of the 2021 Plan); (ii) the total number of shares of Common Stock issuable under awards made under the 2021 Plan that were outstanding as of May 14, 2025; and (iii) the 425,000 additional shares of Common Stock to be added to the 2021 Plan by the Plan Amendment, assuming stockholder approval of this Proposal 2. |
| |
(2) |
Pro forma partially-diluted shares outstanding as of May 14, 2025 is calculated as the sum of: (i) 878,341 shares of Common Stock outstanding as of May 14, 2025, the Record Date; (ii) 288,705 shares of Common Stock issuable upon conversion of all 490.7958 shares of our Series A Preferred outstanding as of May 14, 2025; (iii) 2,247,913 shares of our Common Stock issuable upon conversion of the 8,400 shares of Series B Preferred that may be issued to the Series B Preferred Investor pursuant to the Preferred Purchase Agreement, based on an assumed conversion price of $3.737 (90% of the volume weighted average price of our Common Stock over the five trading days prior to May 14, 2025); and (iv) those shares included in the calculation set forth in footnote (1), above. This calculation does not take into account any limitations on conversion of the Series A Preferred or Series B Preferred, including without limitation beneficial ownership limitations and stockholder approval requirements, and assumes that all such shares are converted in full. |
Description of the 2021 Plan
The principal provisions of the 2021 Plan are
summarized below. This summary is not a complete description of all of the 2021 Plan’s provisions and is qualified in its entirety
by reference to the full text of the 2021 Plan, a copy of which is attached as an exhibit to our Annual Report.
Share reserve. Under the Plan, an aggregate
of 86,669 shares of our Common Stock are currently authorized for issuance pursuant to a variety of stock-based compensation awards, including
stock options, restricted stock awards, restricted stock units, stock bonus awards and performance-based awards. If the proposed Plan
Amendment is approved by our stockholders, the number of shares of our Common Stock authorized for issuance under the Plan would be increased
to 511,669. With respect to the share reserve under the 2021 Plan:
| · | to
the extent that an award terminates, expires or lapses for any reason or an award is settled
in cash without the delivery of shares, any shares subject to the award at such time will
be available for future grants under the 2021 Plan; and |
| | | |
| · | to
the extent that shares of our Common Stock are repurchased by us at the original purchase
price, such shares will be available for future grants under the 2021 Plan. |
In addition, the 2021 Plan provides that additional
shares will automatically be added to the shares authorized for issuance under the 2021 Plan on January 1 of each year. The number of
shares added each year will be equal to the lesser of: (i) 5.0% of the shares of Common Stock outstanding on December 31st of the preceding
calendar year or (ii) such number of shares determined by the Board, in its discretion.
Administration. The Compensation Committee
of the Board is authorized to administer the 2021 Plan unless the Board subsequently assumes authority for administration. The Compensation
Committee must consist of at least two members of the Board, each of whom is intended to qualify as a “non-employee director”
for purposes of Rule 16b-3 under the Exchange Act and an “independent director” within the meaning of the rules of the applicable
stock exchange, or other principal securities market on which shares of our Common Stock are traded. The term Administrator refers to
either the Board or the Compensation Committee, as applicable.
Additionally, the Board or Compensation Committee
may delegate certain functions under the 2021 Plan to designated employees who are not Officers to be recipients of awards under the
2021 Plan, and to determine the number of shares subject to awards granted to such employees.
Subject to the terms and conditions of the 2021
Plan, the Administrator has the authority to construe and interpret the 2021 Plan and awards granted under it and to determine the persons
to whom and the dates on which awards will be granted, the number of shares of Common Stock to be subject to each award, the time or
times during the term of each award within which all or a portion of such award may be exercised, the exercise price, the type of consideration
and other terms of the award. All decisions, determinations and interpretations by the Administrator regarding the 2021 Plan shall be
final and binding on all participants or other persons claiming rights under the 2021 Plan or any award.
Awards. The 2021 Plan provides that the
Administrator may grant or issue stock options, restricted stock, restricted stock units, other stock-based awards and dividend equivalents,
or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate
the type, terms and conditions of the award.
Eligibility. Options, restricted stock,
restricted stock units and all other stock-based awards under 2021 Plan may be granted to individuals who are then our officers, employees,
directors or consultants or are the officers, employees or consultants of certain of our subsidiaries. Only employees of our Company
or certain of our subsidiaries may be granted incentive stock options, or ISOs. No ISO may be granted under the 2021 Plan to any person
who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of the Company
or any affiliate of the Company, unless the exercise price is at least 110% of the fair market value of the stock subject to the option
on the date of grant and the term of the option does not exceed five years from the date of grant. In addition, the aggregate fair market
value, determined at the time of grant, of the shares of Common Stock with respect to which ISOs are exercisable for the first time by
a participant during any calendar year (under the 2021 Plan and all other such plans of the Company and its affiliates) may not exceed
$100,000. ISOs are not transferable except by will or by the laws of descent and distribution, provided that a participant may designate
a beneficiary who may exercise an option following the participant’s death.
| · | Stock
Options. Options granted under the 2021 Plan may become exercisable in cumulative increments
(“vest”) as determined by the Administrator. Such increments may be based on
continued service to the Company over a certain period of time, the occurrence of certain
performance milestones, or other criteria. Options granted under the 2021 Plan may be subject
to different vesting terms. |
| | | |
| | | To the extent provided by the terms
of an option, a participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of such option
by a cash payment upon exercise, by authorizing the Company to withhold a portion of the stock otherwise issuable to the participant,
or by such other method as may be set forth in the option agreement. The maximum term of options under the 2021 Plan is 10 years, except
that in certain cases (see Eligibility) the maximum term of certain incentive stock options is five years. Options under the 2021 Plan
generally terminate sixty days after termination of the participant’s service unless (i) such termination is due to the participant’s
disability, in which case the option may, but need not, provide that it may be exercised at any time within 6 months of such termination;
(ii) the participant dies before the participant’s service has terminated, or within three months after termination of such service,
in which case the option may, but need not, provide that it may be exercised within 12 months of the participant’s death by the
person or persons to whom the rights to such option pass by will or by the laws of descent and distribution; or (iii) the option by its
terms specifically provides otherwise. If an optionee’s service with the Company, or any affiliate of the Company, ceases with
cause, the option will terminate at the time the optionee’s service ceases. In no event may an option be exercised after its expiration
date. |
| | | |
| · | Stock
Bonuses and Restricted Stock Awards. Stock bonus awards and restricted stock awards are
granted through a stock bonus award agreement or restricted stock award agreement. The purchase
price for a stock purchase award (if any) may be payable in cash, or any other form of legal
consideration approved by the Administrator. Stock bonus awards may be granted in consideration
for the recipient’s past services for the Company. Common Stock issued under a restricted
stock or stock bonus award agreement may be subject to a share repurchase option or forfeiture
right in our favor, each in accordance with a vesting schedule and subject to the minimum
vesting requirement. If a recipient’s service relationship with us terminates, we may
reacquire or receive via forfeiture all of the shares of our Common Stock issued to the recipient
pursuant to a restricted stock or stock bonus award that have not vested as of the date of
termination. Rights under a stock bonus or restricted stock bonus agreement may be transferred
only as expressly authorized by the terms of the applicable stock bonus or restricted stock
purchase agreement. |
| | | |
| · | Restricted
Stock Units. Restricted stock unit awards are issued pursuant to a restricted stock unit
award agreement. The consideration for a stock unit award shall be determined by the Administrator
and may be payable in any form acceptable to the Administrator and permitted under applicable
law. The Administrator may impose any restrictions or conditions upon the vesting of restricted
stock unit awards, or that delay the delivery of the consideration after the vesting of stock
unit awards, that it deems appropriate consistent with the minimum vesting requirement. Restricted
stock unit awards may be settled in cash or shares of the Company’s Common Stock, as
determined by the Administrator. No dividends payments will be made on unvested restricted
stock unit awards, but instead any dividends will be deferred until awards become vested.
If a restricted stock unit award recipient’s service relationship with the Company
terminates, any unvested portion of the restricted stock unit award is forfeited upon the
recipient’s termination of service. |
| | | |
| · | Performance-Based
Award. Any award may be granted as a performance award, meaning that the award will be
subject to vesting and/or payment based on the attainment of specified performance goals.
Generally, such pre-established performance goals consist of one or more business criteria
and a targeted performance level with respect to such criteria as a condition of awards being
granted or becoming exercisable, or as a condition to accelerating the timing of such events.
Performance may be measured over a period of any length specified by the Administrator. |
Certain Corporate Transactions. In the
event of a merger, sale of all or substantially all of the assets of the Company or other change of control transaction, unless otherwise
determined by the Board, all outstanding awards will be subject to the agreement governing such merger, asset sale or other change of
control transaction. Such agreement need not treat all such awards in an identical manner, and it will provide for one or more of the
following with respect to each award: (i) the continuation of the award, (ii) the assumption of the award, (iii) the substitution of
the award, or (iv) the payment of the excess of the fair market value of the shares subject to the award over the exercise price or purchase
price of such shares. In the event the successor corporation refuses to either continue, assume or substitute the shares subject to the
award pursuant to the terms of the 2021 Plan, or pay the excess of the fair market value of the shares subject to the award over the
exercise price or purchase price of such shares, then outstanding awards shall vest and become exercisable as to 100% of the shares subject
thereto contingent upon the consummation of such change of control transaction.
Adjustments Provisions. Transactions not
involving receipt of consideration by the Company, such as a merger, consolidation, reorganization, recapitalization, reincorporation,
reclassification, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, or a change in corporate structure may change the type(s), class(es) and number of shares of Common Stock subject to the 2021
Plan and outstanding awards. In that event, the 2021 Plan will be appropriately adjusted as to the type(s), class(es) and the maximum
number of shares of Common Stock subject to the 2021 Plan, and outstanding awards will be adjusted as to the type(s), class(es), number
of shares and price per share of Common Stock subject to such awards.
Amendment and termination. The administrator
may terminate, amend or modify the 2021 Plan at any time and from time to time. However, we must generally obtain stockholder approval
to amend or modify the 2021 Plan to the extent required by applicable law, rule or regulation (including any applicable stock exchange
rule). Notwithstanding the foregoing, an option may be amended to reduce the per share exercise price below the per share exercise price
of such option on the grant date and options may be granted in exchange for, or in connection with, the cancellation or surrender of
options having a higher per share exercise price without receiving additional stockholder approval.
New Plan Benefits
At the present time, no specific determination
has been made as to the grant or allocation of future awards under the 2021 Plan. Awards granted under the 2021 Plan are within the Board’s
and the Compensation Committee’s discretion, and neither the Board nor the Compensation Committee has determined future awards
or who might receive them. Therefore, at this time, the benefits that will be awarded or paid under the 2021 Plan, if stockholder approval
of the Plan Amendment is obtained, cannot currently be determined. The 2021 Plan does not have set benefits or amounts, and no grants
or awards have been made by the Board or the Compensation Committee that are conditioned upon stockholder approval of the Plan Amendment.
Effective Date
The Plan Amendment will be effective as of June
30, 2025, subject to stockholder approval at the Annual Meeting.
Vote Required
The affirmative (“FOR”) vote of a
majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is
required to approve the Plan Amendment. Abstentions, if any, will be treated as shares that are present and entitled to vote on this
proposal, and will therefore be treated as a vote “AGAINST” this Proposal 2. This Proposal 2 is a non-routine proposal on
which a broker or other nominee does not have discretionary authority to vote. Broker non-votes will not affect the outcome of the vote
on this proposal.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL OF THE PLAN
AMENDMENT
PROPOSAL 3
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Background
Our Audit and Risk Committee has selected Rosenberg
Rich Baker Berman, P.A. (“RRBB”) as our independent registered public accounting firm for the fiscal year ending December
31, 2025, and has further directed that we submit the selection of the independent registered accounting firm for ratification by our
stockholders at the Annual Meeting. RRBB has audited the Company’s financial statements since 2020. Representatives of RRBB are
not expected to be present at the Annual Meeting.
Neither our governing documents nor any applicable
laws require stockholder ratification of the selection of RRBB as our independent registered public accounting firm. However, our Audit
and Risk Committee is submitting the selection of RRBB to our stockholders for ratification as a matter of good corporate practice. If
our stockholders do not ratify this selection, the Audit & Risk Committee will reconsider its selection of RRBB and will either continue
to retain the firm or appoint a new independent registered public accounting firm. Even if the selection is ratified, the Audit &
Risk Committee may, in its sole discretion, determine to appoint a different independent registered public accounting firm at any time
during the year if it determines that such a change would be in our and our stockholders’ best interests.
The Audit and Risk Committee reviews and must
pre-approve all audit and non-audit services performed by our independent registered public accounting firm, as well as the fees charged
by it for such services. In its review of non-audit service fees, the Audit and Risk Committee considers, among other things, the possible
impact of the performance of such services on the accounting firm’s independence.
Independent Registered Public Accounting Firm
Fee Information
The following table sets forth the aggregate
fees billed by RRBB for the services indicated for each of the years ended December 31, 2024 and 2023:
| | |
December 31,
2024 | | |
December 31,
2023 | |
| Audit fees (1) | |
$ | 135,000 | | |
$ | 143,075 | |
| Audit related fees | |
| – | | |
| – | |
| Tax fees | |
| – | | |
| – | |
| All other fees | |
| – | | |
| – | |
| Total | |
$ | 135,000 | | |
$ | 143,075 | |
| (1) | Includes fees for professional services rendered
in connection with (i) the audit of our annual financial statements for the fiscal years
ended December 31, 2024 and 2023 included in the Annual Report; (ii) the review of our interim
period financial statements for fiscal years 2024 and 2023; (iii) the S-1 Registration Statement,
as amended, initially filed with the Commission in 2022 in connection with our public offering
that closed in February 2023, and the prospectus supplements to our S-3 Registration Statement
that were filed in 2024 and 2023 in connection with our equity offerings that closed in 2024
and 2023, including for consents and comfort letters; and (iv) related services that are
normally provided in connection with regulatory filings or engagements. |
All fees described
above were approved by the Audit and Risk Committee.
Audit and Risk Committee Pre-Approval Policies
and Procedures
Our Audit and Risk Committee pre-approves all
auditing services and the terms of non-audit services provided by our independent registered public accounting firm, but only to the
extent that the non-audit services are not prohibited under applicable law and the committee determines that the non-audit services do
not impair the independence of the independent registered public accounting firm. Under our Audit and Risk Committees pre-approval policies
and procedures, the Audit and Risk Committee generally pre-approves specified services in defined categories up to specified amounts.
Pre-approval may also be given as part of the Audit and Risk Committee’s approval of the scope of the engagement of the independent
registered public accounting firm or on a case-by-case basis for specific tasks before engagement. Our Audit and Risk Committee has considered
and determined that the provision of the non-audit services described is compatible with maintaining the independence of our registered
public accounting firm.
Vote Required
The affirmative (“FOR”) vote of a
majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is
required to ratify the selection of RRBB for the fiscal year ended December 31, 2025. Abstentions, if any, will be treated as shares
that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this Proposal 3.
In the event that there are any broker non-votes, they will not affect the outcome of the vote on this Proposal 3. However, because we
believe that this Proposal 3 will be treated as a routine matter on which a broker or other nominee has discretionary authority to vote,
we do not expect to receive any broker non-votes with respect to this Proposal 3.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE RATIFICATION OF THE SELECTION
OF
ROSENBERG RICH BAKER BERMAN, P.A. AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2025
PROPOSAL 4
APPROVAL
OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK, INCLUDING UPON CONVERSION OF SHARES OUR OF SERIES A PREFERRED THAT HAVE BEEN, OR MAY IN
THE FUTURE BE, ISSUED PURSUANT TO THE LICENSE AGREEMENT, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(A) AND NASDAQ LISTING RULE 5635(D)
General
We are asking our stockholders to approve, in
accordance with Nasdaq Listing Rule 5635(a) and Nasdaq Listing Rule 5635(d), the issuance of more than 19.99% of the number of shares
of our Common Stock issued and outstanding as of February 11, 2025, including upon conversion of shares of Series A Preferred that have
been, or may in the future be, issued as consideration for our acquisition of worldwide license rights to Entolimod for the treatment
of acute radiation syndrome and the option to acquire the worldwide license to additional indications and clinical use cases for Entolimod
and Entolasta, as well as for payment of certain milestone payments, pursuant to the License Agreement.
As discussed
in further detail below, as consideration for the rights we received pursuant to the License Agreement, in February 2025, we issued an
aggregate of 55,635 shares of Common Stock and 359.6691 shares of Series A Preferred to Statera. Additionally, in March 2025, we issued
an aggregate of 55,704 shares of Common Stock and 131.1267 shares of Series A Preferred to Statera and Avenue as payment for the Neutropenia
Milestone Payment (as defined below). As a result, as of May 14, 2025, we have issued an aggregate of 111,399 shares of Common Stock and
490.7958 shares of Series A Preferred (convertible into an aggregate of 288,705 shares of Common Stock) pursuant to the License Agreement.
Pursuant to the License Agreement, we have the option to issue additional shares of our Series A Preferred Stock, in lieu of cash, in
the future to satisfy certain milestone payment obligations.
On February
11, 2025, immediately prior to execution of the License Agreement, there were 556,978 shares of our Common Stock issued and outstanding.
Pursuant to the applicable Nasdaq Listing Rules, we must obtain stockholder approval prior to the issuance of more than 111,399 shares
of our Common Stock, equal to 19.99% of the number of shares of our Common Stock outstanding as of February 11, 2025, pursuant to the
License Agreement. As a result, unless and until such stockholder approval is obtained, we may not issue additional shares of Common
Stock pursuant to the License Agreement and the holders of shares of Series A Preferred may not convert any such shares.
Statera
License Agreement
On February
11, 2025, we entered into the License Agreement with Statera, whereby we acquired (i) an exclusive worldwide license to the patented TLR5
agonist lead program of Statera known as Entolimod as it relates to the acute radiation syndrome indication (“ARS”) and (ii)
an exclusive option (the “Exclusive Option”) to acquire the exclusive worldwide license to additional indications, including
lymphocyte exhaustion, immunosenescence, neutropenia and/or vaccine adjuvant (the “Subsequent Indications”) and to the TLR5
agonist follow-on program of Statera known as Entolasta. Under the terms of the License Agreement, Statera granted us an exclusive worldwide
license, with the right to grant and authorize sublicenses, under Statera’s patents, trademarks, know-how and other intellectual
property to develop, test, make, have made, use, sell, offer for sale, import and otherwise exploit the product Entolimod as it relates
to the Initial Indication during the term of the License Agreement. As consideration for the License Agreement, we paid Statera a license
fee of $1,500,000 consisting of (i) $300,000 in cash consideration and (ii) $1,200,000 in stock consideration, consisting of (i) 55,635
shares of Common Stock and (ii) 359.6691 shares of Series A Preferred.
The License
Agreement obligates us to develop and commercialize the licensed products, at our own cost and expense, inclusive of licensed products
with respect to any Subsequent Indications obtained upon exercise of an Exclusive Option. In the development and commercialization process,
we are obligated to meet certain milestones, and must provide Statera with certain milestone payments, payable in either the form of cash
or shares of Series A Preferred (at our sole discretion), upon accomplishing each milestone as outlined below.
| Event | |
Payment | |
| Validation of current inventory of Materials for distribution and sales | |
$ | 750,000 | |
| Filing of BLA with FDA for Acute Radiation Syndrome | |
| 1,000,000 | |
| Total Acute Radiation Syndrome Development Milestones | |
$ | 1,750,000 | |
Upon exercise
of an Exclusive Option with respect to one or more Subsequent Indications, the following corresponding applicable milestones and milestone
payments (all milestone payments, collectively, the “Milestone Payments”), payable in either cash or shares of Series A Preferred
(at our sole discretion), become obligations of the Company as well:
| Event | |
Payment | |
| File IND and Initiate Phase 2 Clinical Study for Neutropenia | |
$ | 500,000 | |
| Phase III Completion - successfully meets endpoint required to secure FDA approval for treatment of Neutropenia | |
| 750,000 | |
| File BLA with FDA and achieve FDA Approval for Neutropenia | |
| 1,500,000 | |
| File IND and Initiate Phase 2 study of Lymphocyte Exhaustion | |
| 500,000 | |
| Phase III Completion - successfully meets endpoint required by FDA for treatment of Lymphocye Exhaustion | |
| 750,000 | |
| File BLA with FDA and achieve FDA Approval for Lymphocyte Exhaustion | |
| 1,500,000 | |
| IND approval and initiation of Phase 3 study as a Vaccine Adjuvant | |
| 500,000 | |
| File US BLA with FDA and achieve FDA Approval for use as a Vaccine Adjuvant | |
| 500,000 | |
| Total Potential Development Milestones for additional Indications (as applicable) | |
$ | 6,500,000 | |
Pursuant to the License
Agreement, in the event that we exercise our Exclusive Option with respect to one or more Subsequent Indications, we may elect, in our
sole discretion, to accelerate any of the Milestone Payments in advance of the milestone achievements.
On March 28, 2025, we
notified Statera of our election to exercise our Exclusive Option to acquire the exclusive worldwide license to the neutropenia indication
for Entolimod under the License Agreement (the “Neutropenia Option”) and to accelerate the first Milestone Payment of $500,000
related to the neutropenia indication, payable by the Company in connection with the filing of an IND and initiation of a Phase 2 clinical
study for neutropenia (the “Neutropenia Milestone Payment). As payment of the Neutropenia Milestone Payment, we issued Statera and
Avenue an aggregate of 55,704 shares of Common Stock and 131.1267 shares of Series A Preferred.
As a result of our exercise
of the Neutropenia Option, we are obligated to develop and commercialize the expanded licensed products related to the neutropenia indication,
at our own cost and expense, including to meet those milestones discussed above, and are obligated to pay the Milestone Payments, other
than the Neutropenia Milestone Payment, upon accomplishing each such milestone.
As of May 14, 2025, assuming
that we elect to exercise our Exclusive Option with respect to all of the Subsequent Indications and either achieve all of the foregoing
milestones or otherwise choose to accelerate the relevant Milestone Payments, we may be obligated to pay up to an aggregate of $7,750,000
in Milestone Payments pursuant to the License Agreement. We may choose to pay such amounts in either cash or shares of our Series A Preferred,
or a mixture of both, in our discretion. If we choose to make such payments through the issuance of shares of our Series A Preferred,
the number of shares of Series A Preferred that we must issue will be calculated based on a price per share equal to the twenty trading
day volume weighted average price (“VWAP”) of our Common Stock prior to the date of achievement of the applicable milestone
or event.
Pursuant to the License
Agreement and securities purchase agreements we entered into with Statera and Avenue in connection therewith, we agreed to hold a stockholders’
meeting to submit the approval of the conversion of shares of the shares of our Series A Preferred that have been issued, or may in the
future be issued in satisfaction of the Milestone Payments, into shares of Common Stock in accordance with the rules of the Nasdaq Stock
Market LLC to our stockholders for their consideration and approval. If the requisite stockholder approval is not obtained on or prior
to June 30, 2025, then we shall convene additional stockholder meetings every 90 days thereafter until the requisite stockholder approval
is obtained.
Summary of Terms of the Series A Preferred
The powers, preferences, rights, qualifications,
limitations and restrictions applicable to the Series A Preferred are set forth in the Certificate of Designation of Series A Non-Voting
Convertible Preferred Stock (the “Series A Certificate of Designation”). The Certificate of Designation authorizes 6,000 shares
of Series A Preferred. A summary of the principal terms of the Series A Preferred are set forth below:
Ranking. The Series A Preferred ranks on
parity with our Common Stock and junior to our Series B Preferred stock with respect to dividend rights and rights on the distribution
of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.
Dividends. To
the extent that dividends are paid to holders of Common Stock, holders of Series A Preferred shall be entitled to participate in such
dividends on an as-if-converted-to-Common-Stock basis, without regard to the beneficial ownership limitations set forth in the Series
A Certificate of Designation.
Voting. Except as otherwise provided by
the Series A Certificate of Designation or required by law, the Series A Preferred does not have voting rights. However, as long as any
shares of Series A Preferred are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the
then-outstanding shares of the Series A Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series
A Preferred or alter or amend the Series A Certificate of Designation, amend or repeal any provision of, or add any provision to, our
Charter or Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any
series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers
of, or restrictions provided for the benefit of the Series A Preferred, (ii) issue further shares of Series A Preferred, or (iii) enter
into any agreement with respect to any of the foregoing.
Conversion. Subject to certain beneficial
ownership limitations and the Company’s receipt of stockholder approval in accordance with the listing rules of the Nasdaq Stock
Market, each share of Series A Preferred is convertible into approximately 588 shares of Common
Stock (the “Series A Conversion Ratio”), as follows:
| · | Automatic Conversion - effective as of 5:00 p.m. Eastern time on the third business day after the date
that our stockholders approve the conversion of the Series A Preferred into shares of common stock in accordance with the listing rules
of the Nasdaq Stock Market, each share of Series A Preferred then outstanding shall automatically convert into a number of shares of Common
Stock equal to the Series A Conversion Ratio, subject to the applicable beneficial ownership limitations. |
| | | |
| · | Optional Conversion - subject to the applicable beneficial ownership limitations and the automatic conversion
(discussed above), each share of Series Preferred outstanding shall be convertible, at any time and from time to time following 5:00 p.m.
Eastern time on the third business day after the date that the requisite stockholder approval is obtained, at the option of the holder
thereof, into a number of shares of Common Stock equal to the Series A Conversion Ratio. |
Liquidation. In the event of the liquidation,
dissolution, or winding up of the affairs of the Company, whether voluntary or involuntary, holders of Series A Preferred shall rank on
parity with common stockholders as to the distributions of assets.
Beneficial Ownership Limitation. A holder
of Series A Preferred Stock is prohibited from converting shares of Series A Preferred into shares of Common Stock if, as a result of
such conversion, such holder, together with its affiliates, would beneficially own in excess of the applicable beneficial ownership limitation.
For purposes of the Series A Preferred, the beneficial ownership Limitation shall initially be set at 9.9% for each holder and its affiliates
and may be adjusted at the discretion of the holder to a percentage between 4.9% and 19.9% (but not to exceed 19.9%) of the number of
shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to such conversion.
Redemption. Shares of Series A Preferred
Stock are not redeemable.
Nasdaq
Stockholder Approval Requirements; Reasons for Stockholder Approval
Nasdaq Listing Rule 5635(a)
Under Nasdaq Listing Rule 5635(a), stockholder
approval is required prior to the issuance of securities by a listed company in connection with the acquisition of the stock or assets
of another company if such securities, including shares that may be issued pursuant to an earn-out provision or similar provision and
upon conversion of convertible securities issued in connection with the transaction, (i) have, or will have upon issuance, voting power
equal to or in excess of 20% of the voting power outstanding before the issuance of stock or securities convertible into or exercisable
for Common Stock); or (ii) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number
of shares of common stock outstanding before the issuance of the stock or securities.
Our acquisition of the licenses and other rights,
including the option to acquire additional licenses for the Subsequent Indications, pursuant to the License Agreement may constitute the
acquisition of assets of another company pursuant to Nasdaq Listing Rule 5635(a). We have already issued that number of shares of our
Common Stock equal to 19.99% of the number of shares of our Common Stock outstanding immediately prior to execution of the License Agreement
pursuant thereto, and the conversion of the shares of Series A Preferred that we have issued would cause us to exceed the number of shares
of Common Stock that may be issued without stockholder approval pursuant to Nasdaq Listing Rule 5635(a). Additionally, pursuant to the
License Agreement, we may, at our election, issue additional shares of Series A Preferred in the future to satisfy our payment obligations
with respect to the Milestone Payments under the License Agreement. Accordingly, we are seeking stockholder approval of this Proposal
4 in order to (i) permit the holders of outstanding shares of our Series A Preferred to convert their shares of Series A Preferred into
shares of our Common Stock (for an aggregate of 288,705 shares of Common Stock) and (ii) permit the conversion of all shares of Series
A Preferred that we may issue in the future to satisfy our payment obligations with respect to the Milestone Payments under the License
Agreement into shares of Common Stock.
Nasdaq Listing Rule 5635(d)
Under Nasdaq Listing Rule 5635(d), stockholder
approval is required prior to the sale, issuance, or potential issuance by a listed company, in a transaction other than a public offering,
of shares of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock outstanding
or 20% or more of the voting power outstanding before the issuance for a price that is less than the lower of (i) the company’s
Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average
of the company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five trading days immediately preceding the
signing of the binding agreement (the “Minimum Price”). Pursuant to Nasdaq rules, the presence of any provision that could
cause the conversion or exercise price of a convertible security to be reduced to below the Minimum Price immediately before the entering
into of the binding agreement will cause the transaction to be viewed as a discounted issuance.
As of May 14, 2025, all of the shares of Common
Stock and Series A Preferred that we have issued pursuant to the License Agreement were issued at a price in excess of the Minimum Price
under Nasdaq Listing Rule 5635(d). However, because the number of shares of Series A Preferred that we may issue in the future in satisfaction
of the Milestone Payments, if any, shall be calculated based on a per share price equal to the twenty trading day VWAP of our Common Stock
prior to the date of achievement of the applicable milestone or event, it is possible that we may issue shares of our Series A Preferred
(and/or the shares of Common Stock issuable upon conversion thereof) at a price below the Minimum Price in the future. Accordingly, in
order to maintain as much flexibility as possible with respect to our future payment obligations under the License Agreement, we are seeking
stockholder approval of this Proposal 4 in order to permit us to issue additional shares of our Series A Preferred, including the shares
of Common Stock issuable upon conversion thereof, at a price below the Minimum Price to the extent that the number of shares of Common
Stock issuable upon conversion of such shares of Series A Preferred would equal or exceed 20% or more of the number of shares of our Common
Stock outstanding or 20% or more of the voting power of our Common Stock outstanding as of February 11, 2025.
Potential Effects of this
Proposal
In the event that our stockholders approve this Proposal 4 at the Annual Meeting, subject to the beneficial ownership limitation
applicable to the respective holders (currently 9.9% of our outstanding shares of Common Stock), each share of Series A Preferred outstanding
as of the date of such approval shall automatically convert into shares of our Common Stock on the third business day after such approval.
Additionally, after such date, the holders of shares of our Series A Preferred will have the right, subject to the applicable beneficial
ownership limitation (which shall in no event exceed 19.99% of our outstanding Common Stock), to convert the shares of Series A Preferred
held by them into shares of our Common Stock at any time, in their discretion. The additional shares of Common Stock that would become
issuable upon conversion of the Series A Preferred would have the same rights and privileges as the shares of the Company’s currently
outstanding Common Stock. The issuance of such shares will not affect the rights of the holders of outstanding Common Stock, but such
issuances will have a dilutive effect on the existing stockholders, including on the voting power and economic rights of the existing
stockholders, and may result in a decline in the price of our Common Stock or in greater price volatility.
In addition to the foregoing, in the event that
our stockholders approve this Proposal 4 at the Annual Meeting, we will have the ability to issue additional shares of Series A Preferred
convertible into 20% or more of the outstanding shares of our Common Stock as of February 11, 2025 at a price below the Minimum Price
in satisfaction of Milestone Payments, if and when such Milestone Payments are due.
As of May 14, 2025, the total number of shares
of our Common Stock that may be issued upon conversion of outstanding shares of our Series A Preferred, without taking into consideration
the stockholder approval requirement or beneficial ownership limitations, was 288,705 shares of Common Stock. Assuming our stockholders
approve this Proposal 4, we may, at our election, issue up to an aggregate of $7,750,000 shares of Series A Preferred in the future in
satisfaction of Milestone Payments under the License Agreement. Because we do not know at this time (i) whether we will exercise our Exclusive
Option with respect to any of the other Subsequent Indications, (ii) whether we will achieve each or any of the milestones set forth in
the License Agreement, or (iii) whether we will elect to pay any Milestone Payments that become due in cash or in shares of our Series
A Preferred, and because the number of shares of Series A Preferred that we may issue in the future in satisfaction of any Milestone Payments,
if any, will depend on the VWAP of our Common Stock prior to the date of achievement of the applicable milestone or event, we cannot predict
the number of shares of Series A Preferred that we may issue in the future, or the price at which we may issue such shares. However, the
conversion of any such additional shares of Series A Preferred that we may issue in the future could result in significant dilution to
our holders of our Common Stock.
We are not seeking the approval of stockholders
to authorize entry into the License Agreement or the related agreements, or to issue the Series A Preferred, as we have already done so,
and such documents already are binding obligations of the Company. The failure of our stockholders to approve this Proposal 4 will not
negate the existing terms of the agreements, which will remain binding on the Company.
In the event that our stockholders do not approve
this Proposal 4 at the Annual Meeting, then holders of the outstanding shares of Series A Preferred will not be able to convert such
shares into shares of our Common Stock. Additionally, we will be prohibited from issuing shares of our Common Stock constituting 20%
or more of the number of shares of our Common Stock outstanding as of February 11, 2025 upon conversion of shares of Series A Preferred
that we may issue in the future to the extent that such shares are issued at a price below the Minimum Price. This may limit our ability
to issue shares or our Series A Preferred in satisfaction of our Milestone Payment obligations under the License Agreement in the future.
Additionally, pursuant to the agreements we entered into with Statera and Avenue in connection with the License Agreement, in the event
that our stockholders do not approve this Proposal 4 at the Annual Meeting, we will be required to convene and hold special meetings
of our stockholders every 90 days after the Annual Meeting until the requisite stockholder approval is obtained. The process of continuing
to hold stockholder meetings to obtain the requisite stockholder approval would cause us to incur significant legal expenses and would
divert our management’s attention from the operation of our business, which could materially harm our business.
Vote Required
The affirmative (“FOR”) vote of a
majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is
required to approve the adjournment of the Annual Meeting pursuant to this Proposal 4. Abstentions, if any, will be treated as shares
that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this Proposal 4.
This Proposal 4 is a non-routine proposal on which a broker or other nominee does not have discretionary authority to vote. Broker non-votes
will not affect the outcome of the vote on this proposal.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL
OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK, INCLUDING UPON CONVERSION OF SHARES OUR OF SERIES A PREFERRED, THAT HAVE BEEN, OR MAY
IN THE FUTURE BE, ISSUED PURSUANT TO THE LICENSE AGREEMENT, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(A) AND NASDAQ LISTING RULE 5635(D)
PROPOSAL 5
APPROVAL OF THE ISSUANCE OF SHARES OF OUR COMMON
STOCK UPON CONVERSION OF THOSE SHARES OF SERIES B PREFERRED AND EXERCISE OF THOSE WARRANTS THAT WE MAY IN THE FUTURE ISSUE TO THE SERIES
B PREFERRED INVESTOR PURSUANT TO THE PREFERRED PURCHASE AGREEMENT, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(A) AND NASDAQ LISTING
RULE 5635(D)
General
We are asking our stockholders to approve, in
accordance with Nasdaq Listing Rule 5635(d), the issuance of more than 19.99% of the number of shares of our Common Stock issued and outstanding
as of April 19, 2025 (the “Preferred Offering Share Cap”) upon conversion of those shares of Series B Preferred and the exercise
of those Warrants that we may in the future issue to the Series B Preferred Investor pursuant to the Preferred Purchase Agreement.
As discussed
in further detail below, on April 29, 2025, we entered into the Preferred Purchase Agreement with the Series B Preferred Investor, pursuant
to which, subject to the conditions set forth therein (including stockholder approval, as requested pursuant to this Proposal 5), the
Series B Preferred Investor shall purchase up to 8,400 shares of our Series B Preferred Stock and Warrants for a total purchase price
of up to $8.4 million in several tranche closings prior to December 31, 2025.
On April
29, 2025, immediately prior to execution of the Preferred Purchase Agreement, there were 878,341 shares of our Common Stock issued and
outstanding. Pursuant to Nasdaq Listing Rule 5635(d), we must obtain stockholder approval prior to the issuance of more than 175,580 shares
of our Common Stock, equal to 19.99% of the number of shares of our Common Stock outstanding as of April 29, 2025, at a price per share
below the Minimum Price upon conversion of the shares of Series B Preferred and exercise of the Warrants sold and issued pursuant to the
Preferred Purchase Agreement. As a result, unless and until such stockholder approval is obtained, we may not issue more than an aggregate
of 175,580 shares of Common Stock to the Series B Preferred Investor at a price below the Minimum Price upon conversion of shares of Series
B Preferred or exercise of Warrants that we may sell and issue to the Series B Preferred Investor pursuant to the Preferred Purchase Agreement.
Additionally, as discussed in additional detail below, pursuant to the Preferred Purchase Agreement, unless and until we receive stockholder
approval of the elimination of the Preferred Offering Share Cap, the Series B Preferred Investor shall have no obligation to complete
the second or any of the subsequent Tranche Closings (as defined below).
As of May
14, 2025, we have not issued any shares of Series B Preferred, Warrants or other securities of the Company pursuant to the Preferred Purchase
Agreement. However, subject to satisfaction of the conditions set forth in the Preferred Purchase Agreement, we are bound to issue, and
the Series B Preferred Investor is required to purchase, the securities.
Preferred Purchase Agreement
On April
29, 2025, we entered into the Preferred Purchase Agreement with the Series B Preferred Investor, pursuant to which, subject to the conditions
set forth therein, we shall sell to the Series B Preferred Investor, and the Series B Preferred Investor shall purchase from us, up to
8,400 shares of the our Series B Preferred and Warrants to purchase shares of the our Common Stock for a total purchase price of up to
$8,400,000 in several tranche closings (each, a “Tranche Closing”).
The Preferred
Purchase Agreement provides that the Preferred Offering shall be conducted through six separate Tranche Closings, pursuant to which, subject
to satisfaction of the applicable closing conditions set forth in the Preferred Purchase Agreement, we shall sell and issue the Series
B Preferred Investor up to an aggregate of 8,400 shares of Series B Preferred as follows: (i) 700 shares of Series B Preferred, for $700,000,
in the initial Tranche Closing, which shall be consummated upon effectiveness of a registration statement registering the shares of common
stock issuable upon conversion of the shares of Series B Preferred and exercise of the Warrants for resale by the Series B Preferred Investor;
(ii) 700 shares of Series B Preferred, for $700,000, in the second Tranche Closing, which shall be consummated 10 trading days after the
initial Tranche Closing; (iii) 1,750 shares of Series B Preferred, for $1,750,000, in the third Tranche Closing, which shall be consummated
20 trading days after the second Tranche Closing; (iv) 1,750 shares of Series B Preferred, for $1,750,000, in the fourth Tranche Closing,
which shall be consummated 20 trading days after the third Tranche Closing; (v) 1,750 shares of Series B Preferred, for $1,750,000, in
the fifth Tranche Closing, which shall be consummated 20 trading days after the fourth Tranche Closing; and (vi) 1,750 shares of Series
B Preferred, for $1,750,000, in the final Tranche Closing, which shall be consummated 20 trading days after the fifth Tranche Closing.
Subject
to certain beneficial ownership limitations and, until such date that stockholder approval is obtained, the Preferred Offering Share Cap,
at any time after the issuance date, each holder of Series B Preferred shall have the right, at such holder’s option, to convert
any or all of the shares of Series B Preferred held by such holder into fully paid and nonassessable shares of our Common Stock. The number
of shares of Common Stock issuable upon conversion of each share of Series B Preferred shall be equal to the quotient obtained by dividing
(i) the Stated Value of such share of Series B Preferred plus all accrued and unpaid dividends thereon by (ii) the Conversion Price in
effect on the date of conversion.
In addition
to the shares of Series B Preferred to be sold and issued to the Series B Preferred Investor in the Preferred Offering, at each Tranche
Closing we shall also issue the Series B Preferred Investor a Warrant to purchase that number of shares of our Common Stock equal to 30%
of shares of Common Stock issuable upon conversion in full of the shares of Series B Preferred issued at the same Tranche Closing. Each
Warrant shall be immediately exercisable (subject to certain beneficial ownership limitations and stockholder approval), expire five years
from the date of issuance, and have an initial exercise price equal to the average closing price of our Common Stock during the prior
five trading days preceding each Tranche Closing (as may be adjusted for stock dividends, subdivisions, or combinations in the manner
described in the Warrant). In the event that Warrants issued to the Series B Preferred Investor in a subsequent Tranche Closing have a
lower exercise price than those Warrants outstanding as of such later Tranche Closing, immediately after the Tranche Closing the exercise
price of all outstanding Warrants held by the Series B Preferred Investor shall automatically be reduced to equal such lower exercise
price of the Warrants issued in such Tranche Closing.
In the event
that the average closing price of our Common Stock during the prior three trading days preceding a Tranche Closing date shall not be equal
to or greater than the Floor Price (as defined below), then the applicable Tranche Closing shall be delayed until such time as the price
meets the required threshold for a period of five consecutive trading days. Notwithstanding the foregoing, the Series B Preferred Investor
has the ability, subject to prior written consent of the Company, to purchase any number of shares of Series B Preferred prior to the
dates of the Tranche Closings provided for in the Preferred Purchase Agreement.
The consummation
of the transactions contemplated by the Preferred Purchase Agreement is subject to various customary closing conditions. In addition,
pursuant to the Preferred Purchase Agreement, unless and until we obtain the stockholder approval of the elimination of the Preferred
Offering Share Cap, the Series B Preferred Investor is prohibited from converting its shares of Series B Preferred and exercising its
Warrants to the extent that such conversions and exercises would, in the aggregate, result in the issuance of shares of common stock exceeding
the Preferred Offering Share Cap. The Series B Preferred Investor shall have no obligation to fund the second or subsequent Tranche Closings
unless and until such stockholder approval has been obtained.
Pursuant
to the Preferred Purchase Agreement, subject to certain exceptions, for so long as any shares of Series B Preferred remain outstanding
(the “ROFR Period”), the Series B Preferred Investor will have a right of first refusal to with respect to any investment
proposed to be made by any other person for each and every future variable rate transaction during the ROFR Period. Additionally, subject
to certain exceptions, for so long as the Series B Preferred Investor holds any shares of Series B Preferred, Warrants, or shares of Common
Stock issued upon conversion of the Series B Preferred or exercise of the Warrants, the Series B Preferred Investor shall have the right
to participate in any subsequent financing for up to 20% of such financing. Moreover, for so long as any shares of Series B Preferred
remain outstanding, subject to certain exceptions, the Series B Preferred Investor shall have the right to require us to use 25% of the
proceeds received by us from any future financing to redeem any shares of Series B Preferred held by the Series B Preferred Investor in
accordance with the terms of the Certificate of Designation of Preferences, Rights and Limitations of the Series B Non-Voting Convertible
Preferred Stock (the “Series B Certificate of Designation”).
The Preferred
Purchase Agreement contains certain termination rights, representations, warranties, covenants and events of default. The Purchase Agreement
will automatically terminate if any Tranche Closing has not occurred prior to December 31, 2025.
The Series
B Preferred Investor has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging
of our Common Stock during any time prior to the termination of the Preferred Purchase Agreement.
In connection
with the Purchase Agreement, we also entered into a registration rights agreement with the Series B Preferred Investor, pursuant to which
we agreed to file with the Commission a registration statement registering the shares of common stock issuable upon conversion of the
shares of Series B Preferred and exercise of the Warrants for resale by the Series B Preferred Investor.
Pursuant to the Preferred Purchase Agreement,
we agreed to hold a stockholders’ meeting to submit the approval of the conversion of shares of the shares of our Series B Preferred
and exercise of the Warrants that may be issued to the Series B Preferred Investor pursuant to the Preferred Purchase Agreement, in accordance
with the rules of the Nasdaq Stock Market LLC, as soon a reasonably practicable after execution of the Preferred Purchase Agreement. If
the requisite stockholder approval is not obtained at the Annual Meeting, then we shall convene additional stockholder meetings every
120 days thereafter until the requisite stockholder approval is obtained.
Summary of Terms of the Series B Preferred
The powers, preferences, rights, qualifications,
limitations and restrictions applicable to the Series B Preferred are set forth in the Series B Certificate of Designation. The Series
B Certificate of Designation authorizes 8,400 shares of Series B Preferred. A summary of the principal terms of the Series A Preferred
are set forth below:
Ranking. The Series B Preferred ranks senior
to our Common Stock and Series A Preferred stock with respect to dividend rights and rights on the distribution of assets on any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the Company.
Dividends. The holders of outstanding shares
of Series B Preferred shall be entitled to cumulative dividends at an annual rate of 10% of the Stated Value (as defined below) per share.
Dividends shall accrue from the date of each such Tranche Closing, and for as long as any shares of Series B Preferred remain issued and
outstanding and are payable quarterly in arrears. At the Company’s option, dividends on the Series B Preferred may be paid in (i)
cash, (ii) by adding the amount of dividends payable on such date to the aggregate Stated Value of such Holder’s shares of Series
B Preferred Stock (“PIK Dividends”), or (iii) any combination of cash and PIK Dividends. The “Stated Value” shall
mean $1,000 per share, subject to adjustment in the event of any stock dividend (including PIK Dividends), stock split, combination, recapitalization,
or other similar event affecting such shares.
Voting. Except as otherwise provided by
the Series B Certificate of Designation or required by law, the Series B Preferred does not have voting rights. However, as long as any
shares of Series B Preferred are outstanding, we shall not, without the affirmative vote of the holders of a majority of the then-outstanding
shares of the Series B Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series B Preferred or alter
or amend the Series B Certificate of Designation, amend or repeal any provision of, or add any provision to, our Charter or Bylaws, or
file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock,
in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided
for the benefit of the Series B Preferred, (ii) issue further shares of Series B Preferred, or (iii) enter into any agreement with respect
to any of the foregoing.
Conversion. Subject to certain beneficial
ownership limitations and, until such date that stockholder approval in accordance with the listing rules of the Nasdaq Stock Market is
obtained, the Series B Exchange Cap, at any time after the issuance date, each holder of Series B Preferred shall have the right, at such
holder’s option, to convert any or all of the shares of Series B Preferred held by such holder into fully paid and nonassessable
shares of Common Stock. The number of shares of Common Stock issuable upon conversion of each share of Series B Preferred shall be equal
to the quotient obtained by dividing (i) the Stated Value of such share of Series B Preferred plus all accrued and unpaid dividends thereon
by (ii) the Conversion Price (as defined below) in effect on the date of conversion. The conversion price (the “Conversion Price”)
in effect on any conversion date shall be equal to 90% of the lowest closing VWAP of our Common Stock on the Nasdaq Capital Market for
the five trading days immediately preceding the date of the conversion notice delivered by the holder, subject to adjustment, provide,
however, that in no event shall the Conversion Price be lower than $1.294 per share (the “Floor Price”), subject to adjustment.
Liquidation. In the event of any liquidation,
dissolution, or winding up of the Company, whether voluntary or involuntary, the holders of Series B Preferred shall be entitled to receive,
prior and in preference to any distribution of any of the assets, funds, or proceeds available for distribution of the Company to the
holders of Common Stock or any other class or series of capital stock ranking junior to the Series B Preferred upon liquidation, by reason
of their ownership thereof, an amount per share equal to the greater of (i) the Stated Value plus all accrued and unpaid dividends thereon
or (ii) the amount that such Holder would receive if such Holder converted all of its shares of Series B Preferred into common stock immediately
prior to such liquidation, dissolution or winding up.
Redemption. The Company may, at any time
and in its sole discretion, request to redeem all or any portion of the outstanding shares of Series B Preferred at a price equal to 115%
of the Stated Value plus all accrued and unpaid dividends thereon by providing the holder at least 10 days prior written notice, during
which 10 day period the holder thereof shall have the right to convert such holder’s shares of Series B Preferred into shares of
Common Stock. Upon the closing of any equity or equity-linked financing by the Company after the issuance date, the holder shall have
the right, but not the obligation, to require the Company to redeem, out of the proceeds of such financing, up to 25% of the aggregate
amount of net proceeds raised in the financing, outstanding shares of Series B Preferred at a per share price equal to the Stated Value
plus all accrued and unpaid dividends thereon, provided that such right shall expire 5 days after the holder receives notice from the
Company of the consumption of a financing.
Nasdaq Stockholder Approval Requirement; Reasons
for Stockholder Approval
Under Nasdaq Listing Rule 5635(d), stockholder
approval is required prior to the sale, issuance, or potential issuance by a listed company, in a transaction other than a public offering,
of shares of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock outstanding
or 20% or more of the voting power outstanding before the issuance for a price that is less than the Minimum Price. Pursuant to Nasdaq
rules, the presence of any provision that could cause the conversion or exercise price of a convertible security to be reduced to below
the Minimum Price immediately before the entering into of the binding agreement will cause the transaction to be viewed as a discounted
issuance.
As discussed above, the price at which the shares
of Series B Preferred that we shall issue to the Series B Preferred Investor shall convert into shares of our Common Stock shall be equal
to 90% of the lowest closing VWAP of our Common Stock on the Nasdaq Capital Market for the five trading days immediately preceding the
date of the conversion notice delivered by the holder. Additionally, the exercise price of the Warrants shall be equal to the average
closing price of our Common Stock during the prior five trading days preceding each Tranche Closing (subject to certain adjustments, including
downward adjustment in the event that we issue Warrants to the Series B Preferred Investor that have a lower exercise price in connection
with a subsequent Tranche Closing). As a result of the formulas that will be used to determine the applicable Conversion Price for the
shares of Series B Preferred and the exercise price of the Warrants that we will issue pursuant to Preferred Purchase Agreement, it is
possible that we may issue shares of our Common Stock upon conversion of the shares of Series B Preferred and exercise of the Warrants
at a price below the Minimum Price in the future. Accordingly, we are seeking stockholder approval of this Proposal 5 in order to permit
us to issue shares of Common Stock in excess of the Preferred Offering Share Cap to the Series B Preferred Investor upon conversion of
the shares of the Series B Preferred and exercise of the Warrants at a price below the Minimum Price. As a result of the foregoing, and
in order to comply with our obligations under the Preferred Purchase Agreement and to allow us to fully utilize the Preferred Purchase
Agreement, we are seeking stockholder approval of the elimination of the Preferred Offering Share Cap, in accordance with Nasdaq Listing
Rule 5635(d).
Potential Effects of this Proposal
In the event that our stockholders approve this
Proposal 5 at the Annual Meeting, the Preferred Offering Share Cap will be eliminated and, subject to certain beneficial ownership limitations
and certain other conditions, the Series B Preferred Investor will have the right to convert the shares of Series B Preferred and exercise
the Warrants we issue to it pursuant to the Preferred Purchase Agreement. Additionally, receipt of stockholder approval of this Proposal
5 at the Annual Meeting is necessary in order for us to complete the Second and subsequent Tranche Closing pursuant to the Preferred Purchase
Agreement. This would allow us to access up to the full $8,400,000 of capital provided for pursuant to the Preferred Purchase Agreement,
excluding any additional proceeds that we would receive in the event that the Series B Preferred Investor exercises its Warrants, on favorable
terms. Access to such financing would provide much needed working capital for the purpose of growing our business and the development
of our product candidates.
Because the number of shares of Common Stock that
we may issue upon conversion of the shares of Series B Preferred and exercise of the Warrants that we may issue to the Series B Preferred
Investor pursuant to the Preferred Purchase Agreement will be determined at the time of conversion of shares of the Series B Preferred
and issuance of the Warrants, respectively, based upon the VWAP and closing price of our Common Stock (as described in additional detail
above), we cannot predict the number of shares of our Common Stock that may be issued upon conversion of the shares of Series B Preferred
and/or exercise of the Warrants we may issue to the Series B Preferred Investor pursuant to the Preferred Purchase Agreement. The issuance
of shares of Common Stock upon conversion of shares of the Series B Preferred and exercise of the Warrants will not affect the rights
of the holders of outstanding Common Stock, but such issuances will have a dilutive effect on the existing stockholders, including on
the voting power and economic rights of the existing stockholders, and may result in a decline in the price of our Common Stock or in
greater price volatility.
We are not seeking the approval of stockholders
to authorize entry into the Preferred Purchase Agreement, as we have already done so, and such agreement is already binding on the Company.
In the event that our stockholders do not approve
this Proposal 5 at the Annual Meeting, unless the Series B Preferred holder elects to waive the relevant conditions to closing, our access
to capital pursuant to the Preferred Purchase Agreement will be limited to the $700,000 we shall receive in connection with the initial
Tranche Closing and we will not be able to complete any of the other Tranche Closings. If we cannot complete any of the other Tranche
Closings, we may need to raise additional capital through other sales of our equity securities, which may not be available if and when
we need it, may be on terms less favorable to us and could result in significant dilution to our stockholders. The failure of our stockholders
to approve this Proposal 5 could severely limit our ability to raise additional capital.
Additionally, in the event that our stockholders
do not approve this Proposal 5 at the Annual Meeting, we will be required to convene and hold special meetings of our stockholders every
120 days after the Annual Meeting until the requisite stockholder approval is obtained. The process of continuing to hold stockholder
meetings to obtain the requisite stockholder approval would cause us to incur significant legal expenses and would divert our management’s
attention from the operation of our business, which could materially harm our business.
Vote Required
The affirmative (“FOR”)
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter is required to approve the adjournment of the Annual Meeting pursuant to this Proposal 5. Abstentions, if any, will be treated
as shares that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this
Proposal 5. This Proposal 5 is a non-routine proposal on which a broker or other nominee does not have discretionary authority to vote.
Broker non-votes will not affect the outcome of the vote on this proposal.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL OF THE ISSUANCE
OF SHARES OF OUR COMMON STOCK UPON CONVERSION OF THOSE SHARES OF SERIES B PREFERRED AND EXERCISE OF THOSE WARRANTS THAT WE MAY IN THE
FUTURE ISSUE TO THE SERIES B PREFERRED INVESTOR PURSUANT TO THE PREFERRED PURCHASE AGREEMENT, IN ACCORDANCE WITH NASDAQ LISTING RULE
5635(D)
PROPOSAL 6
APPROVAL OF THE SALE AND ISSUANCE OF SHARES
OF OUR COMMON STOCK TO MAST HILL PURSUANT TO THE EQUITY LINE OF CREDIT, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(D)
General
We are asking our stockholders
to approve, in accordance with Nasdaq Listing Rule 5635(d), the potential issuance of more than 19.99% of the number of shares of our
Common Stock outstanding as of March 18, 2025 (the “ELOC Share Cap”) pursuant to the Equity Line of Credit we entered into
with Mast Hill on March 18, 2025, which provides that, upon the terms and subject to the conditions and limitations set forth therein,
we have the right, but not the obligation, to sell to Mast Hill up to $25,000,000 shares of Common Stock from time to time over the 24-month
term of the Equity Line of Credit.
On March
18, 2025, immediately prior to execution of the Equity Line of Credit, there were 620,137 shares of our Common Stock issued and outstanding.
Pursuant to Nasdaq Listing Rule 5635(d), we must obtain stockholder approval prior to the issuance of more than 123,965 shares of our
Common Stock, equal to 19.99% of the number of shares of our Common Stock outstanding as of March 18, 2025, at a price per share below
the Minimum Price pursuant to the Equity Line of Credit. As a result, unless and until such stockholder approval is obtained, we may not
sell and issue more than an aggregate of 123,965 shares of Common Stock, which includes the 29,800 shares of Common Stock we issued to
Mast Hill on March 18, 2025 as Commitment Shares (as discussed below), to Mast Hill pursuant to the Equity Line of Credit.
As of May
14, 2025, we had only issued the 29,800 Commitment Shares to Mast Hill pursuant to the Equity Line of Credit. As a result, we have the
ability to sell and issue an aggregate of 94,165 additional shares of Common Stock to Mast Hill pursuant to the Equity Line of Credit
prior to receipt of stockholder approval of the elimination of the ELOC Share Cap.
Equity Line of Credit
On
March 18, 2025, we entered into the Equity Line of Credit with Mast Hill, pursuant to which, subject to certain conditions precedent and
other limitations, including stockholder approval of elimination of the ELOC Share Cap with respect to the sale and issuance of shares
in excess of the ELOC Share Cap, we will have the right, but not the obligation, to sell to Mast Hill, and Mast Hill will have the obligation
to purchase from us, up to $25,000,000 (the “Maximum Commitment Amount”) shares of our Common Stock (the “Put Shares”),
from time to time over the term of the Equity Line of Credit.
Unless
earlier terminated, the Equity Line of Credit will remain in effect until the earlier of March 18, 2027 or the date on which Mast Hill
has purchased the Maximum Commitment Amount (the “Commitment Period”). We have the right to terminate the Purchase Agreement
at any time, subject to limitations set forth in the Purchase Agreement.
During
the Commitment Period, we will have the right, but not the obligation, to direct Mast Hill to purchase the Put Shares by delivering written
notice to Mast Hill (a “Put Notice”) on any trading day (the “Put Date”) to purchase a number of Put Shares pursuant
to a formula set forth in the Equity Line of Credit. The purchase price for the Put Shares under the Purchase Agreement will be equal
to 95% of the lowest VWAP of our Common Stock on the Nasdaq Capital Market on any trading day during the pricing period, and the pricing
period for each sale of Put Shares will be the five trading days immediately after receipt of the Put Shares by Mast Hill, subject to
adjustment as provided in the Equity Line of Credit.
Each
Put Notice shall direct Mast Hill to purchase Put Shares (i) in a minimum amount not less than $50,000 and (ii) in a maximum amount up
to $500,000, provide further that the number of Put Shares in each respective Put shall not exceed 100% of the average trading volume
of our Common Stock during the five trading days immediately preceding the date of the Put Notice. Mast Hill’s obligation to purchase
Put Shares is subject to a 4.99% beneficial ownership blocker. Additionally, pursuant to the Purchase Agreement, we may not sell or issue
to Mast Hill more than 123,965 shares of our Common Stock (including the Commitment Shares), representing 19.99% of the number of shares
of our common stock issued and outstanding immediately prior to execution of the Equity Line of Credit (the ELOC Share Cap), unless and
until we obtain stockholder approval to issue additional shares, in accordance with applicable Nasdaq rules.
Actual
sales of shares of our Common Stock, if any, to Mast Hill under the Equity Line of Credit will depend on a variety of factors to be determined
by the us from time to time, including, among others, market conditions, the trading price of our Common Stock and determinations by us
as to the appropriate sources of funding for the Company and our operations. The net proceeds to the Company from sales of our common
stock to Mast Hill under the Purchase Agreement, if any, will depend on the frequency and prices at which we sell shares to Mast Hill
under the Purchase Agreement.
As
consideration for Mast Hill’s commitment to purchase shares of our Common Stock under the Equity Line of Credit, we issued Mast
Hill 29,800 restricted shares of Common Stock (the “Commitment Shares”) following the execution of the Equity Line of Credit.
In
connection with the Equity Line of Credit, we entered into a registration rights agreement with Mast Hill, pursuant to which we agreed
to register for resale under the Securities Act the shares of our Common Stock that may be issued to Mast Hill under the Equity Line of
Credit, including the Commitment Shares. We filed the registration statement with the Commission on May 5, 2025 and it was declared effective
by the Commission on May 13, 2025.
We
do not know what the purchase price for our Common Stock will be, and therefore cannot be certain as to the number of shares of Common
Stock that we might sell and issue to Mast Hill under the Equity Line of Credit if our stockholders approve this Proposal 6 at the Annual
Meeting.
Nasdaq Stockholder Approval Requirement; Reasons
for Stockholder Approval
Under Nasdaq Listing Rule 5635(d), stockholder
approval is required prior to the sale, issuance, or potential issuance by a listed company, in a transaction other than a public offering,
of shares of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock outstanding
or 20% or more of the voting power outstanding before the issuance for a price that is less than the Minimum Price. Pursuant to Nasdaq
rules, the presence of any provision that could cause the conversion or exercise price of a convertible security to be reduced to below
the Minimum Price immediately before the entering into of the binding agreement will cause the transaction to be viewed as a discounted
issuance.
As discussed above, pursuant to the Equity Line
of Credit, we have the right, but not the obligation to cause Mast Hill to purchase up to $25,000,000 shares of our Common Stock; provided,
however, that because the price at which we have a right to sell shares of Common Stock to Mast Hill pursuant to the Equity Line of Credit
is less than the Minimum Price, unless and until we obtain stockholder approval to sell and issue a number of shares of Common Stock in
excess of the ELOC Share Cap, the number of shares that we may be able to sell will be significantly less than $25 million. As a result
of the foregoing, in order to provide us with the most flexibility to raise additional capital under the Equity Line of Credit, we are
seeking stockholder approval of the elimination of the ELOC Share Cap, in accordance with Nasdaq Listing Rule 5635(d).
Potential Effects of this Proposal
In the event that our stockholders approve this
Proposal 6 at the Annual Meeting, the ELOC Share Cap will be eliminated and, subject to certain beneficial ownership limitations and certain
other conditions, we will have the option to sell and issue the maximum number of shares of Common Stock issuable pursuant to the Equity
Line of Credit (up to $25,000,000 shares of Common Stock) to Mast Hill, which would exceed 19.99% of our issued and outstanding shares
of common stock as of the date we executed the Equity Line of Credit. This would allow the Company to access capital quickly and on favorable
terms if and when needed in order to pursue its business growth and development of its product candidates.
As of May 14, 2025, we have issued 29,800 shares
of Common Stock to Mast Hill as Commitment Shares; we have not sold any other shares of Common Stock. We may, from time to time prior
to receipt of stockholder approval, sell up to an aggregate of 94,165 shares of our Common Stock (in addition to the Commitment Shares)
under the Equity Line of Credit, which is equal to 19.99% of the number of shares of our Common Stock outstanding as of March 18, 2025.
Assuming our stockholders approve this Proposal 6 at the Annual Meeting, we may, at our election, sell and issue up to an aggregate of
$25,000,000 shares of Common Stock to Mast Hill under the Equity Line of Credit. Because the Share Price to be paid by Mast Hill for each
share of Common Stock at each Closing shall be equal to 95% of the lowest VWAP of Common Stock on any trading day during the pricing period,
the number of shares of Common Stock that we may sell pursuant to the Equity Line of Credit will depend on the VWAP of our Common Stock
as of each Closing and we cannot predict the number of shares of Common Stock that we may issue pursuant to the Equity Line of Credit
in the future, or the price at which we may issue such shares. However, the issuance of shares of Common Stock that we may sell to Mast
Hill pursuant to the Equity Line of Credit could result in significant dilution to our holders of our Common Stock.
Any shares of Common Stock that we sell and issue
under the Equity Line of Credit will have the same rights and privileges as the shares of our currently outstanding Common Stock. The
issuance of such shares will not affect the rights of the holders of outstanding Common Stock, but such issuances will have a dilutive
effect on the existing stockholders, including on the voting power and economic rights of the existing stockholders, and may result in
a decline in the price of our Common Stock or in greater price volatility.
We are not seeking the approval of stockholders
to authorize entry into the Equity Line of Credit, as we have already done so, and such agreement is already binding on the Company.
In the event that our stockholders do not approve
this Proposal 6 at the Annual Meeting, we will be severely limited in the value of the shares of Common Stock that we can sell and issue
under the Equity Line of Credit. If we cannot utilize the Equity Line of Credit, we may need to raise additional capital through other
sales of our equity securities, which may not be available if and when we need it, may be on terms less favorable to us and could result
in significant dilution to our stockholders. The failure of our stockholders to approve this Proposal 6 could severely limit our ability
to raise additional capital.
Vote Required
The affirmative (“FOR”) vote of a
majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is
required to approve the adjournment of the Annual Meeting pursuant to this Proposal 6. Abstentions, if any, will be treated as shares
that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this Proposal 6.
This Proposal 6 is a non-routine proposal on which a broker or other nominee does not have discretionary authority to vote. Broker non-votes
will not affect the outcome of the vote on this proposal.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE SALE AND ISSUANCE OF
SHARES OF OUR COMMON STOCK TO MAST HILL PURSUANT TO THE EQUITY LINE OF CREDIT, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(D)
PROPOSAL 7
ADJOURNMENT OF THE ANNUAL MEETING
General
Our stockholders may be asked to consider and
act upon one or more adjournments of the Annual Meeting, if necessary or appropriate, to solicit additional proxies in favor of any of
the proposals set forth in this Proxy Statement.
If a quorum is not present at the Annual Meeting,
our stockholders may be asked to vote on this proposal to adjourn the Annual Meeting to solicit additional proxies. If a quorum is present
at the Annual Meeting, but there are not sufficient votes at the time of the Annual Meeting to approve any of the foregoing proposals,
our stockholders may also be asked to vote on this proposal to approve the adjournment of the Annual Meeting, in full or in part, to
permit further solicitation of proxies in favor of any of the proposals.
If this adjournment proposal is submitted for
a vote at the Annual Meeting, and if our stockholders vote to approve the adjournment proposal, the Annual Meeting may be adjourned,
in full or in part, to another place, or a later date or dates, to enable us to solicit additional proxies in favor of any of the proposals.
If the adjournment proposal is approved, and the Annual Meeting is adjourned, we will use the additional time to solicit additional proxies
in favor of the relevant proposals to be presented at the Annual Meeting, including the solicitation of proxies from stockholders that
have previously voted against any of the proposals.
Our Board believes that, if the number of shares
of our Common Stock voting in favor of any of the proposals at the Annual Meeting is insufficient to approve such proposals, it is in
the best interests of our stockholders to enable us, if we so choose and for a limited period of time, to continue to seek to obtain
a sufficient number of additional votes in favor of such proposals. Any signed proxies received by us in which no voting instructions
are provided on such matter will be voted in favor of an adjournment in these circumstances. If the Annual Meeting is adjourned, in full
or in part, the time and place of the adjourned Annual Meeting will be announced at the time the adjournment is taken. Any adjournment
of the Annual Meeting for the purpose of soliciting additional proxies will allow our stockholders who have already sent in their proxies
to revoke them at any time prior to their use at the Annual Meeting, as adjourned or postponed.
Vote Required
The affirmative (“FOR”) vote of a
majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is
required to approve the adjournment of the Annual Meeting pursuant to this Proposal 7. Abstentions, if any, will be treated as shares
that are present and entitled to vote on this proposal, and will therefore be treated as a vote “AGAINST” this Proposal 7.
In the event that there are any broker non-votes, they will not affect the outcome of the vote on this Proposal 7. However, because we
believe that this Proposal 7 will be treated as a routine matter on which a broker or other nominee has discretionary authority to vote,
we do not expect to receive any broker non-votes with respect to this Proposal 7.
RECOMMENDATION OF THE BOARD
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ADJOURNMENT OF THE ANNUAL
MEETING PURSUANT TO THIS PROPOSAL 7, TO ANOTHER PLACE, DATE OR TIME, IF DEEMED NECESSARY OR APPROPRIATE
BOARD MATTERS AND CORPORATE GOVERNANCE
Our Board
As discussed in Proposal 1, above, the Board
has nominated Ms. Christina Valauri as our Class I director, to be elected to serve for a period of three years or until her successor
is elected and qualified, subject to her earlier death, resignation or removal.
The below table and narrative disclosures include
information about our current directors, including our Class II and Class III directors, which Class II and Class III directors are not
up for election or re-election at this Annual Meeting.
| Name |
|
Age |
|
Position |
| Jennifer Ernst |
|
56 |
|
Chief Executive Officer and Class III Director |
| Sheryle Bolton |
|
78 |
|
Chairperson of the Board, Class III Director |
| Christina Valauri |
|
69 |
|
Class I Director |
| Dean Zikria |
|
57 |
|
Class II Director |
To our knowledge, there are currently no legal
proceedings, and during the past ten years there have been no legal proceedings, that we believe are required to be disclosed pursuant
to Item 4.01(f) of Regulation S-K.
Jennifer Ernst is a co-founder
and has served as our Chief Executive Officer and as a director since September 2016; she also served as our Chief Financial Officer
from September 2016 to July 2021. Previously, Ms. Ernst served as the Chief Executive Officer of the U.S. subsidiary of Thin Film Electronics
ASA from April 2011 to December 2015. Ms. Ernst also served as the Chief Strategy Officer of Thin Film Electronics ASA from January 2014
to December 2015, where she established and guided the strategic planning process across all business functions and four separate product
lines. Ms. Ernst also worked for Xerox PARC for over 20 years, where she held multiple go-to-market roles, including as the Director
of Business Development. Ms. Ernst previously served as a director of FlexTech Alliance, the U.S. national consortium for flexible and
printed electronics, for four years, including one year as the Chair. Ms. Ernst earned a Bachelor of Arts in Broadcast Communication
Arts from San Francisco University and a Master of Business Administration degree from Santa Clara University.
Sheryle Bolton has served as a
director on our Board since July 16, 2019, and as Chair of the Board since August 18, 2021. She is an experienced serial technology entrepreneur,
public company chief executive officer, corporate executive, speaker, board member, and investor. Ms. Bolton has been a corporate executive
in financial services, media, and health care and has served on the boards of private and public corporations, ranging from large groups
of mutual funds to technology and finance companies, as well as non-profits, including an NGO, where she served as Chair of the audit
committee, focused on financing small businesses in Asia and Sub-Saharan Africa and Berry College, a private college with an internationally
known work-study program. Ms. Bolton previously worked in private equity investing as an investment banker at Merrill Lynch Capital Markets,
as Director of Strategy at Home Box Office and in asset management at Rockefeller & Co. In her roles as Chief Executive Officer,
she raised significant funding for several start-ups from angels, venture capital, and the public and institutional markets. She previously
served as Chief Executive Officer of Scientific Learning Corporation, a health care and educational technology company, where she led
the company from pre-product to IPO with venture funding from Warburg Pincus. She also served as Chief Executive Officer and Chair of
the public company after completion of their IPO. She has served as a board member for more than forty Scudder-Kemper mutual funds. From
2015 to 2021, Ms. Bolton was an adjunct Professor of Practice at Hult International Business School, where she taught entrepreneurship
and finance courses in graduate and undergraduate programs. She has also been an invited speaker on business and entrepreneurship in
the U.S., Asia, the Pacific Rim, Latin America, and Europe. Harvard Business School recognized Ms. Bolton as one of its most influential
female graduates in Silicon Valley and the San Francisco Bay Area. She was a recipient of the first Springboard All-Women’s IPO
Class award, formerly served as Chair of Watermark, the largest organization in Silicon Valley for female executives and entrepreneurs,
and is a recipient of the “A Woman Who Made Her Mark” award, among many other honors and recognition. Ms. Bolton started
her career as a Peace Corps Volunteer in Africa. She holds a Bachelor of Arts and a Master of Arts in English and Linguistics, respectively,
from the University of Georgia and a Master of Business Administration from Harvard Business School.
Christina Valauri - See biographical
information set forth above under “Proposal 1—Election of Class I Director.”
Dean Zikria has served as a director
on our Board since July 10, 2019. Mr. Zikria brings deep industry experience in allergy and asthma as well as other chronic diseases
to the Board, as well as experience in strategic planning, scenario planning and analysis, and mergers and acquisitions, including sourcing,
transactions and integration. Since August 2019, Mr. Zikria has been the Founder, Chief Executive Officer and Chairman of Mind Machine
LLC, a Silicon Valley based marketing/advertising agency focused on the MedTech industry. From May 2021 until January 2023, he served
as the Chief Commercial Officer at Intuity Medical Inc., a Silicon Valley MedTech company launching a highly disruptive glucose meter
in the diabetes industry. In addition, he has served as Chairman of DZ Advisors, LLC, a company founded by Mr. Zikria in 2017 that provides
consulting and advisory services to the medtech, biotech, digital health and pharmaceutical industries; since inception, where he also
served as President from December 2017 until May 31, 2021. Mr. Zikria has also served on the boards of the following privately held companies:
AsthmaTek, Inc., a startup digital health company in the asthma space; LarmorBio, an invitro diagnostics company, from February 2025
to present; and Brev.Dev, Inc., a technology company developing a disruptive platform to aid developers, from February 2021 to July 2024.
Mr. Zikria previously served as Chief Executive Officer of Spirosure Inc., a FeNO detection company for asthma diagnostics, from 2014
to 2017. Additionally, he previously served as head of global marketing for Johnson & Johnson’s Animas Corporation within their
medical device & diagnostics division. He was head of strategy for Pfizer Pharmaceuticals U.S. Cardiovascular Unit, a division with
approximately $7 billion in annual revenues. Mr. Zikria holds a Bachelor of Science in Biology from Rutgers University: Cook College
and a Master of Business Administration from Rutgers Graduate School of Management.
Board and Stockholder Meetings and Attendance
Our Board has responsibility for establishing
broad corporate policies and reviewing our overall performance rather than day-to-day operations. The primary responsibility of the Board
is to oversee the management of the Company and, in doing so, serve the best interests of the Company and its stockholders. The entire
Board selects, evaluates and provides for the succession of executive officers and, subject to stockholder election and the recommendations
of our Nominations and Corporate Governance Committee, directors. It reviews and approves corporate objectives and strategies, and evaluates
significant policies and proposed major commitments of corporate resources. The Board also participates in decisions that have a potential
major economic impact on the Company. Management keeps the directors informed of Company activity through regular communication, including
written reports and presentations at Board and committee meetings.
During the year ended December 31, 2024, there
were five formal Board meetings, various informal meetings and various actions were approved by unanimous written consent. None of our
directors attended fewer than 75% of the total number of meetings of the Board and meetings of any committee of the Board on which such
director served during the time each such individual director was serving as a director. We encourage, but do not require, our directors
to attend our annual meetings of stockholders. All four of the Company’s then-serving directors attended our 2024 annual meeting
of stockholders.
Composition of our Board
Our business and affairs are managed under the
direction of our Board. The number of directors is fixed by our Board, subject to the terms of our Charter and Bylaws, which include
a requirement that the number of directors be fixed exclusively by a resolution adopted by directors constituting a majority of the total
number of authorized directors, whether or not there exist any vacancies in previously authorized directorships. The size of our Board
is currently fixed at five directors, with one vacancy.
When considering whether directors and nominees
have the experience, qualifications, attributes or skills, taken as a whole, to enable our Board to satisfy its oversight responsibilities
effectively in light of our business and structure, our Nominations and Corporate Governance Committee and the full Board focus primarily
on each person’s background and experience as reflected in the information discussed in each of the directors’ individual
biographies set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and
nature of our business.
Director Independence
The Nasdaq rules require that, subject to specified
exceptions, each member of a listed company’s audit, compensation and nominations committees be independent, or, if a listed company
has no nominations committee, that director nominees be selected or recommended for the board’s selection by independent directors
constituting a majority of the board’s independent directors. The Nasdaq rules further require that audit committee members satisfy
independence criteria set forth in Rule 10A-3 under the Exchange Act and that compensation committee members satisfy the independence
criteria set forth in Rule 10C-1 under the Exchange Act. The Nasdaq independence definition includes a series of objective tests, including
that the director is not, and has not been for at least three years, one of our employees, and that neither the director nor any of his
or her family members have engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our Board
has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
After reviewing the independence of our directors,
our Board has affirmatively determined that each of Dean Zikria, Sheryle Bolton, and Christina Valauri qualify as an independent director,
as defined under the applicable corporate governance standards of Nasdaq. In making these determinations, our Board reviewed and discussed
information provided by the directors and us with regard to each director’s business and personal activities and relationships
as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.
Committees of the Board
Our Board has three standing committees, the
Audit and Risk Committee, the Compensation Committee, and the Nominations and Corporate Governance Committee, to assist it with the performance
of its responsibilities. The Board designates the members of these committees and the committee chairs based on the recommendation of
the Nominations and Corporate Governance Committee. The Board has adopted written charters for each of these committees, all of which
can be found on our corporate website at https://tivichealth.com/investor/. The chair of each committee develops the agenda for that
committee and determines the frequency and length of committee meetings.
Audit and Risk Committee
Our Board has established an Audit and Risk Committee
which consists of three independent directors, Dean Zikria, Sheryle Bolton and Christina Valauri, with Sheryle Bolton serving as the
Chairperson. The Board has determined that each member of the Audit and Risk Committee meets the independence requirements of Rule 10A-3
of the Exchange Act and the applicable rules of Nasdaq, and has sufficient knowledge in financial and auditing matters to serve on the
Audit and Risk Committee. The committee’s primary duties include:
| · | selecting
a firm to serve as the independent registered public accounting firm to audit our financial
statements; |
| · | reviewing
and discussing with management and our independent auditor our annual and quarterly financial
statements and related disclosures, including disclosure under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” and the
results of the independent auditor’s audit or review, as the case may be; |
| · | reviewing
our financial reporting processes and internal control over financial reporting systems and
the performance, generally, of our internal audit function; |
| · | overseeing
the audit and other services of our independent registered public accounting firm and being
directly responsible for the appointment, independence, qualifications, compensation and
oversight of the independent registered public accounting firm, which reports directly to
the Audit and Risk Committee; |
| · | providing
an open means of communication among our independent registered public accounting firm, management,
our internal auditing function and our Board; |
| · | reviewing
any disagreements between our management and the independent registered public accounting
firm regarding our financial reporting; |
| · | preparing
the Audit and Risk Committee report for inclusion in our proxy statement for our annual stockholder
meetings; |
| · | establishing
procedures for complaints received regarding our accounting, internal accounting control
and auditing matters; |
| · | overseeing
the Company’s enterprise risk management process; and |
| · | approving
all audit and permissible non-audit services conducted by our independent registered public
accounting firm. |
The Board has determined that Sheryle Bolton
is an “audit committee financial expert,” as that term is defined in the rules promulgated by the Commission pursuant to
the Sarbanes-Oxley Act. The Board has further determined that each of the members of the Audit and Risk Committee is financially literate
and that at least one member of the committee has accounting or related financial management expertise, as such terms are interpreted
by the Board in its business judgment.
During the year ended December 31, 2024, our
Audit and Risk Committee held five formal meetings and various informal meetings and various actions were approved by unanimous written
consent.
Compensation Committee
Our Board has established a Compensation Committee,
which currently consists of three independent directors (as defined under the general independence standards of Nasdaq and our Corporate
Governance Guidelines): Dean Zikria, Sheryle Bolton and Christina Valauri, with Sheryle Bolton serving as the Chairperson. The Board
has determined that each member of the Compensation Committee is a “non-employee” director, within the meaning of Rule 16b
of the Exchange Act and meets the independence requirements set forth in the applicable rules of Nasdaq. The committee’s primary
duties include:
| · | reviewing
all overall compensation policies and practices; |
| · | administering
the Company’s compensation recovery policy; |
| · | approving
corporate goals and objectives relevant to executive officer compensation and evaluating
executive officer performance in light of those goals and objectives; |
| · | determining
and approving executive officer compensation, including base salary and incentive awards; |
| · | reviewing
and approving, or making recommendations to the Board regarding, compensation plans; |
| · | administering
our equity incentive plan, subject to Board approval; and |
| · | reviewing
succession planning for key executives. |
Our Compensation Committee determines and approves
elements of executive officer compensation, except that compensation of our chief executive officer and interim chief financial officer
will be subject to review and approval by the Board. It also provides recommendations to the Board with respect to non-employee director
compensation. The Compensation Committee may not delegate its authority to any other person, other than to a subcommittee.
During the year ended December 31, 2024, our
Compensation Committee held seven formal meetings and various informal meetings and various actions were approved by unanimous written
consent.
Nominations and Corporate Governance Committee
Our Board has also established a Nominations
and Corporate Governance Committee, which currently consists of three independent directors: Dean Zikria, Sheryle Bolton and Christina
Valauri, with Christina Valauri serving as Chairperson. The committee’s primary duties include:
| · | recruiting
new directors, consider director nominees recommended by stockholders and others and recommend
nominees for election as directors; |
| · | reviewing
the size and composition of our Board and committees; |
| · | overseeing
the evaluation of the Board; |
| · | recommending
actions to increase the Board’s effectiveness; and |
| · | developing,
recommending and overseeing our corporate governance principles, including our Code of Business
Conduct and Ethics and our Corporate Governance Guidelines. |
During the year ended December 31, 2024, our
Nominations and Corporate Governance Committee held five formal meetings and various informal meetings and various actions were approved
by unanimous written consent.
Report of the Audit and Risk Committee of
the Board of Directors
The Audit and Risk Committee oversees the Company’s
financial reporting process on behalf of our Board. Management has the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed
the audited financial statements in the Company’s Annual Report with management, including engaging in a discussion of any significant
changes in the selection or application of accounting principles, the reasonableness of significant judgments, the clarity of disclosures
in the financial statements and the effect of any new accounting pronouncements.
The Audit and Risk Committee reviewed with RRBB,
which is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted
accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and
such other matters as are required to be discussed with the Audit and Risk Committee under the applicable requirements of the Public
Company Accounting Oversight Board and the Commission. In addition, the Audit and Risk Committee has discussed with RRBB its independence
from management and the Company, has received from RRBB the written disclosures and the letter required by applicable requirements of
the Public Company Accounting Oversight Board regarding RRBB’s communications with the Audit and Risk Committee concerning independence,
and has considered the compatibility of non-audit services with the auditors’ independence.
The Audit and Risk Committee met with RRBB to
discuss the overall scope of its services, the results of its audit and reviews, and the overall quality of the Company’s financial
reporting. RRBB, as the Company’s independent registered public accounting firm, also periodically updates the Audit and Risk Committee
about new accounting developments and their potential impact on the Company’s reporting. The Audit and Risk Committee’s meetings
with RRBB were held with and without management present. The Audit and Risk Committee is not employed by the Company, nor does it provide
any expert assurance or professional certification regarding the Company’s financial statements. The Audit and Risk Committee relies,
without independent verification, on the accuracy and integrity of the information provided, and representations made, by management
and the Company’s independent registered public accounting firm.
In reliance on the reviews and discussions referred
to above, the Audit and Risk Committee has recommended to the Board that the audited financial statements of the Company be included
in its Annual Report on Form 10-K for the year ended December 31, 2024. The Audit and Risk Committee and the Board also have recommended
that the ratification of the appointment of RRBB as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2025 be submitted as a proposal at the Annual Meeting.
The Audit and Risk Committee reviews and assesses
the adequacy of its charter on an annual basis. While the Audit and Risk Committee believes that the charter in its present form is adequate,
it may in the future recommend to the Board amendments to the charter as it may deem necessary or appropriate.
|
Respectfully submitted, |
| |
|
|
The Audit and Risk Committee of the Board of Directors |
| |
|
|
Sheryle Bolton (Chairperson) |
| |
|
|
Dean Zikria |
| |
|
|
Christina Valauri |
Board Diversity
Our Nominations and Corporate Governance Committee
is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills and experience required for
the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current
members), the Nominations and Corporate Governance Committee, in recommending candidates for election, and the Board, in approving (and,
in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:
| · | Personal
and professional integrity, ethics and values; |
| | | |
| · | Experience
in corporate management, such as serving as an officer or former officer of a publicly-held
company; |
| | | |
| · | Experience
as a board member or executive officer of another publicly-held company; |
| | | |
| · | Diversity
of expertise and experience in substantive matters pertaining to our business relative to
other Board members; |
| | | |
| · | Diversity
of background and perspective, including, but not limited to, with respect to age, gender,
race, sexual orientation, place of residence and specialized experience; |
| | | |
| · | Experience
relevant to our business industry and with relevant social policy concerns; and |
| | | |
| · | Relevant
academic expertise or other proficiency in an area of our business operations. |
Currently, our Board evaluates each individual
in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and
represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. Although
we do not have a formal diversity policy in place, our Board values diversity and supports having directors of diverse gender, race,
and ethnicity, along with varied skills and experiences.
Board Leadership Structure
Our Board currently consists of four directors.
The positions of Chairperson of the Board and Chief Executive Officer are currently separated. Our Board does not have a policy regarding
the separation of the roles of Chairperson of the Board and Chief Executive Officer, as our Board believes it is in the best interest
of the Company to make that determination based on the position and direction of the Company and the membership of the Board. We believe
that the current structure is appropriate at this time in that it enables Ms. Ernst to focus on her role as Chief Executive Officer of
the Company, while enabling Ms. Bolton, Chairperson of the Board, to continue to provide leadership on policy at the Board level. For
these reasons, our Board has concluded that our current leadership structure is appropriate at this time for the size and scope of operations
of a company of our size. Our Board will continue to periodically review our leadership structure and may make such changes in the future
as it deems appropriate to ensure the interests of the Company and our stockholders are best served.
Board’s Role in Risk Management
Risk assessment and oversight are an integral
part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management
into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management
meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis
of the risks facing us. Our Board, together with our Audit and Risk Committee, administers risk management oversight. Additionally, the
standing committees of the Board address risks inherent in their respective areas of oversight. Our management is responsible for day-to-day
management of risk. The Board regularly discusses with management our major risk exposures, their potential impact on our business and
the steps we take to manage them. The risk oversight process includes receiving regular reports from Board committees and members of
senior management to enable our Board to understand the Company’s risk identification, risk management and risk mitigation strategies
with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.
Our Audit and Risk Committee reviews information
regarding liquidity and operations and oversees our management of financial risk exposures and the steps our management has taken to
monitor and control these exposures. The Audit and Risk Committee also monitors compliance with legal and regulatory requirements and
considers and approves or disapproves any related person transactions. Periodically, the Audit and Risk Committee reviews our policies
with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the Audit and Risk Committee
includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the
actions management has taken to limit, monitor or control such exposures. The Compensation Committee is responsible for assessing whether
any of our compensation policies or programs have the potential to encourage excessive risk-taking. The Nominations and Corporate Governance
Committee reviews compliance with external and internal policies, procedures, and practices consistent with our Charter and Bylaws.
While each committee is responsible for evaluating
certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports and members
of our management team about such risks. Matters of significant strategic risk and enterprise-wide risk exposures are considered by our
Board as a whole. The Board does not believe that its role in the oversight of our risks affects the Board’s leadership structure.
Stockholder Communications with the Board
Stockholders seeking to communicate with members
of the Board should submit their written comments to Tivic Health Systems, Inc., 47685 Lakeview Blvd., Fremont, California 94538, Attn:
Secretary. Our Secretary will forward such communications to each member of the Board; provided that, if in the opinion of our Secretary
it would be inappropriate to send a particular stockholder communication to a specific director, such communication will only be sent
to the remaining directors (subject to the remaining directors concurring with such opinion) or specific committees of the Board, as
applicable.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and
Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our
Code of Business Conduct and Ethics is available on the investor relations section of our corporate website. We will also provide a copy,
free of charge, to any stockholder upon written request to Tivic Health Systems, Inc., 47685 Lakeview Blvd., Fremont, California 94538.
We intend to disclose any amendments to the code, or any waivers of its requirements, on our corporate website or in a Current Report
on Form 8-K.
Insider Trading Policy
The Company has adopted the Insider Trading Policy
(the “Insider Trading Policy”) governing the purchase, sale, and/or other dispositions of its securities by its directors,
officers and employees that it believes is reasonably designed to promote compliance with insider trading laws, rules and regulations
applicable to the Company. A copy of the Insider Trading Policy was filed as Exhibit 19.1 to the Annual Report.
Anti-Hedging Policy
Our Insider Trading Policy prohibits our directors,
officers and employees, and any entities they control, from engaging in transactions in publicly traded options related to the Company’s
equity securities that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s equity
securities.
Family Relationships
There are no family relationships between or
among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
DIRECTOR COMPENSATION
The following table sets forth information regarding
the compensation awarded to, earned by, or paid to our non-employee directors who served on our Board for the year ended December 31,
2024.
| Name | |
Fees
earned
or paid in
cash ($)(1) | | |
Stock
awards ($) | | |
Option
awards
($)(2)(3) | | |
Non-equity
incentive
plan
compensation ($) | | |
Nonqualified
deferred
compensation
earnings ($) | | |
All other
compensation
($) | | |
Total ($) | |
| Sheryle Bolton | |
| 65,250 | | |
| – | | |
| 3,930 | | |
| – | | |
| – | | |
| – | | |
| 69,180 | |
| Karen Drexler | |
| 36,000 | | |
| – | | |
| 1,050 | | |
| – | | |
| – | | |
| – | | |
| 37,050 | |
| Dean Zikria | |
| 35,000 | | |
| – | | |
| 3,354 | | |
| – | | |
| – | | |
| – | | |
| 38,354 | |
| Christina Valauri | |
| 20,500 | | |
| – | | |
| 3,354 | | |
| – | | |
| – | | |
| – | | |
| 23,854 | |
| (1) | These amounts reflect the cash payments that we made
as compensation for Board services during fiscal year 2024. |
| (2) | These amounts represent the
grant date fair value of stock options granted in fiscal 2024 computed in accordance with
FASB ASC Topic 718. We do not include any impact of estimated forfeitures related to service-based
vesting terms in these calculations. |
| (3) | As of December 31, 2024,
the number of shares subject to all outstanding option awards and stock awards held by our
non-employee directors were as follows: |
| Director | |
Number of Shares Subject to Option Awards | | |
Number of Shares Subject to Stock Awards | |
| Sheryle Bolton | |
| 1,115 | | |
| – | |
| Dean Zikria | |
| 938 | | |
| – | |
| Christina Valauri | |
| 899 | | |
| – | |
On December 16, 2021, our Board, upon recommendation
of the Compensation Committee, approved an annual compensation plan for our Board (the “Board Compensation Plan”), which
Board Compensation Plan is still in effect. In accordance with the Board Compensation Plan, directors of the Company will be entitled
to receive the following annual compensation, which amounts will be paid in equal quarterly installments in accordance with our policies:
| · | Annual
Retainer for all Directors: $35,000 |
| · | Chairperson
of the Board: $15,000 |
| · | Chairperson
of the Audit and Risk Committee: $13,000 |
| · | Chairperson
of the Compensation Committee: $9,000 |
| · | Chairperson
of the Nominating and Governance Committee: $6,000 |
To the extent that an individual serves as a
director, committee member or committee chair for a portion of the year, they shall be entitled to a pro rata portion of the compensation
set forth above for the portion of the year that they serve in such role.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
The following table sets forth the names, ages,
and positions of our executive officers as of May 14, 2025. There are no arrangements, agreements or understandings between non-management
security holders and management under which non-management security holders may directly or indirectly participate in or influence the
management of our affairs. Mr. Handley was hired as our Chief Operating Officer and President of Tivic Biopharma in connection with,
and pursuant to, the License Agreement entered into with Statera in February 2025. Other that with respect to Mr. Handley, there are
no arrangements or understandings between any executive officer and any other person pursuant to which any executive officer was or is
to be selected as an executive officer.
| Name |
|
Age |
|
Position |
| Jennifer Ernst |
|
56 |
|
Chief Executive Officer and Director |
| Lisa Wolf |
|
62 |
|
Interim Chief Financial Officer |
| Blake Gurfein, PhD |
|
41 |
|
Chief Scientific Officer |
| Michael Handley |
|
54 |
|
Chief Operating Officer and President of Tivic Biopharma |
Jennifer Ernst—See biographical
information set forth above under “Board Matters and Corporate Governance – Our Board.”
Lisa Wolf currently serves as our
Interim Chief Financial Officer, a role she has held since October 1, 2024. Ms. Wolf brings over 30 years of experience in public accounting
and private industry, including for both public and private companies spanning multiple industries. Ms. Wolf has played a key role in
supporting the Company’s accounting and Securities and Exchange Commission reporting functions on an out-sourced basis since June
2022, when she joined Murdock Martell as Vice President. In addition to her role as interim Chief Financial Officer of the Company, Ms.
Wolf served as Vice President at Murdock Martell from June 2022 to April 2025. Murdock Martell is a consulting and recruiting firm offering
cutting-edge finance, accounting and human relations solutions focused primarily on life science and technology sectors. Prior to joining
Murdock Martell, Ms. Wolf spent eight years at Resonant, Inc. (Nasdaq: RESN), a micro-cap public technology company that was acquired
by Murata Electronics North America, Inc. in March 2022, initially serving as Vice President of Finance and then Chief Accounting Officer
of Resonant, Inc. Ms. Wolf holds a Bachelor of Science in Business Administration from California State University, Northridge and earned
her CPA while working at Arthur Andersen.
Blake Gurfein, PhD serves as our
Chief Scientific Officer, a role that he has held since March 2019, prior to which he served as our Vice President of Research commencing
in January 2018. Dr. Gurfein leads our clinical and scientific research. In addition to his full-time role with the Company, he has also
served as an Adjunct Assistant Professor of Medicine at the University of California San Francisco since 2012. He also founded Humanity
Neurotech, a neurotechnology company developing safe and effective treatments for brain conditions, in 2022. Dr. Gurfein is an expert
in neuromodulation device development and has served as a research executive and consultant for several medical device and pharma companies,
including as Chief Scientific Officer of Rio Grande Neurosciences from 2014 to 2017 and as a Medical Writer for EMD Serono/Pfizer in
2012. Dr. Gurfein’s prior research in neuroscience and immunology was funded by the National Institutes of Health and philanthropic
donors, yielding high-impact journal publications. Dr. Gurfein has a Ph.D. in Neuroscience from the Icahn School of Medicine at Mount
Sinai and an Sc.B. in Neuroscience from Brown University. He also completed a postdoctoral fellowship in neuroimmunology at the University
of California, San Francisco.
Michael Handley has served as our
Chief Operating Officer and President of Tivic Biopharma since February 18, 2025. Mr. Handley also holds the title of President of Tivic
Biopharma. Prior to joining the Company, from July 2021 until February 2025, Mr. Handley served as President, Chief Executive Officer
and Chairman of Statera. From July 2019 to March 2020, he served as the Chief Executive Officer and a director of Immune Therapeutics.
Prior to that, from 2012 to 2018, Mr. Handley served as the Chief Executive Officer and a director of Armis Biopharma, a development-stage
healthcare company, where Mr. Handley was responsible for day-to-day operations, executing a profitable growth strategy, obtaining global
product approvals, overseeing intellectual property strategy, product commercialization, business development and financing. Mr. Handley
founded Vessix Vascular, Inc. in 2011 and served as its Vice President of Clinical, Quality and Regulatory until 2012, when it was acquired.
Mr. Handley also served as the Global Head of Regulatory at Acclarent, Inc. from 2010 to 2011 until it was acquired. Prior to that, he
served in senior executive roles at Spectranetics (Nasdaq: SPNC), a medical device company, and Accelapure Corporation, a biotechnology
company. Prior to beginning his business career, Mr. Handley spent several years in various consulting and drug development roles at
the public biotech companies Genentech, Inc. (Nasdaq: DNA), Amgen Inc. (Nasdaq: AMGN) and Gliatech Inc. (formerly Nasdaq: GLIA). Mr.
Handley graduated cum laude from Colorado State University with Bachelor of Science degrees in molecular biology, physiology and minors
in chemistry, and neurobiology in 1995. Mr. Handley attended The Graziadio Business School of Pepperdine University for his Executive
Master of Business Administration degree.
Overview
This section discusses the material components
of the executive compensation program for our named executive officers who are named in the “Summary Compensation Table,”
below. For the fiscal year ending December 31, 2024, our “named executive officers” and their positions were as follows:
| · | Jennifer
Ernst, our Chief Executive Officer; |
| | | |
| · | Blake
Gurfein, our Chief Scientific Officer; and |
| | | |
| · | Kimberly
Bambach, our former interim Chief Financial Officer. |
This discussion may contain forward-looking statements
that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation
programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.
Summary Compensation Table
The following table sets forth, for the fiscal
years ended December 31, 2024 and December 31, 2023, the dollar value of all cash and noncash compensation earned by our named executive
officers, as set forth above.
| Name and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards
($)(1) | | |
Option
Awards
($)(2) | | |
All
Other
Compensation
($)(3) | | |
Totals
($) | |
| Jennifer Ernst, | |
| 2024 | | |
| 275,000 | | |
| – | | |
| 113,000 | | |
| 36,160 | | |
| 42,456 | | |
| 430,456 | |
| CEO and Director | |
| 2023 | | |
| 275,000 | | |
| – | | |
| – | | |
| 15,393 | | |
| 38,947 | | |
| 313,947 | |
| Blake Gurfein, PhD | |
| 2024 | | |
| 350,000 | | |
| 33,000 | | |
| 50,850 | | |
| 11,300 | | |
| 52,674 | | |
| 486,524 | |
| Chief Scientific Officer | |
| 2023 | | |
| 303,409 | | |
| 40,625 | | |
| – | | |
| 12,315 | | |
| 48,672 | | |
| 392,706 | |
| Kimberly Bambach | |
| 2024 | | |
| – | | |
| – | | |
| 10,050 | | |
| – | | |
| 204,275 | | |
| 214,325 | |
| Former Interim Chief Financial
Officer(4) | |
| 2023 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 197,755 | | |
| 197,755 | |
| (1) | Amounts shown in the “Stock
Awards” column represent the aggregate grant date fair value of restricted stock awards
and restricted stock units issued in fiscal 2024. These amounts represent the grant date
fair value of stock awards granted in fiscal 2024 computed in accordance with FASB ASC Topic
718. See Note 11 to our financial statements included in our Annual Report regarding assumptions
underlying the valuation of equity awards. There were no stock awards earned by our named
executive officers in 2023. |
| (2) | Amounts shown in the “Option
Awards” column represent the aggregate grant date fair value of stock options issued
in fiscal 2024 and 2023. These amounts represent the grant date fair value of stock options
granted in fiscal 2024 and 2023 computed in accordance with FASB ASC Topic 718. We do not
include any impact of estimated forfeitures related to service-based vesting terms in these
calculations. See Note 11 to our financial statements included in our Annual Report regarding
assumptions underlying the valuation of equity awards. |
| (3) | For Jennifer Ernst and Blake
Gurfein, employees of the Company, the amount includes the cost of health insurance coverage
and benefits paid by the Company that is not reimbursed. For Kimberly Bambach, a former consultant
to the Company, the amount includes compensation for services rendered. |
| (4) | Kimberly Bambach provided
services as our Interim Chief Financial Officer, as a contractor, for the period from April
2023 until September 2024. Ms. Bambach tendered her resignation from her role as Interim
Chief Financial Officer of the Company, effective October 1, 2024; she continues to provide
services to the Company in an advisory role. Effective October 1, 2024, Lisa Wolf was appointed
as the Company’s new interim Chief Financial Officer. |
Narrative to the Summary Compensation Table
Employment Agreements/Arrangements
As of the year ended December 31, 2024, we had
executive offer letters in place with Jennifer Ernst, our Chief Executive Officer, and Blake Gurfein, our Chief Science Officer; as well
as a consulting agreement with Lisa Wolf, our Interim Chief Financial Officer. Prior to her resignation, we had a consulting agreement
in place with Kimberly Bambach for services she rendered in her capacity as Interim Chief Financial Officer of the Company. A summary
of the material terms of such agreements is set forth below.
Currently, the annual compensation of each of
our executive officers is determined by the Board. The named executive officers, with the exception of our Interim Chief Financial Officer,
are also entitled to participate in the Company’s benefit plans, which benefits are generally available to all full-time employees.
Executive Offer Letter with Jennifer Ernst
On July 31, 2021, we entered into an executive
offer letter with Jennifer Ernst. Pursuant to her executive offer letter, effective July 31, 2021, Ms. Ernst is entitled to a base salary
of $275,000 and, commencing with the 2022 calendar year (payable in the first quarter of 2023), is eligible to receive, at the sole discretion
of the Board, an annual end-of-year incentive bonus in an amount up to 40% of her base salary. The annual end-of-year incentive bonus,
if earned, will be determined by the Board, in its sole discretion, and will be dependent upon the achievement of certain Company milestones
and profitability, and such other milestones as the Board deems appropriate.
Ms. Ernst’s employment is “at will,”
meaning that either she or the Company are entitled to terminate Ms. Ernst’s employment at any time and for any reason, with or
without cause. In the event that her employment with the Company is terminated for any reason before December 31 of any given year, she
will not be entitled to receive an annual end-of-year bonus. In the event that (i) Ms. Ernst elects to terminate her employment with
the Company other than for good reason, (ii) the Company terminates her employment for cause, or (iii) her employment is terminated as
a result of her death of complete disability, then Ms. Ernst will not be entitled to receive any separation benefits. In the event that
Ms. Ernst terminates her employment for good reason or the Company terminates her employment without cause, Ms. Ernst shall be entitled
to receive severance in an amount equal to 1/12 of her base salary for a period of six months after termination, as well payment of COBRA
premiums for her and her covered dependents for six months after termination.
Executive Offer Letter with Blake Gurfein
In January 2018, we entered into a standard at
will offer letter with Blake Gurfein, which was amended in part in February 2019. Pursuant to his offer letter, Mr. Gurfein is entitled
to a base salary of $350,000 per annum and is eligible to receive, at the sole discretion of the Board, an annual end-of-year incentive
bonus in an amount up to 25% of his base salary. The annual end-of-year incentive bonus, if earned, will be determined by the Board,
in its sole discretion, and will be based on subjective or objective criteria, as approved by the Board.
Mr. Gurfein’s employment is “at will,”
meaning that either he or the Company are entitled to terminate Mr. Gurfein’s employment at any time and for any reason, with or
without cause. In the event that his employment with the Company is terminated for any reason before December 31 of any given year, he
will not be entitled to receive an annual end-of-year bonus. In the event that Mr. Gurfein’s employment terminates as a result
of an involuntary Separation of Service (as defined in the regulations interpreting Section 409A of the Internal Revenue Code), other
than for cause, Mr. Gurfein will be eligible to receive his full base salary for a period of six months after termination, as well as
reimbursement for COBRA premiums him and his covered dependents for six months after termination. Notwithstanding the foregoing, such
severance benefits shall be waived in the event that a Separation of Services occurs within 12 months of a change of control that results
in proceeds to Mr. Gurfein of $2,000,000 or more.
Agreement with Kimberly Bambach
Kimberly Bambach was appointed as the Company’s
Interim Chief Financial Officer, effective April 28, 2023, and was retained to provide such services as a non-employee consultant pursuant
to a consulting agreement through the effective date of her resignation (October 1, 2024). Pursuant to such agreement, Ms. Bambach was
entitled to receive $200 per hour for services provided in her capacity as Interim Chief Financial Officer. The agreement was to continue
perpetually until such time as it was terminated by either party.
Agreement with Lisa Wolf
Effective October 1, 2024, Lisa Wolf was appointed
as the Company’s Interim Chief Financial Officer and Principal Financial and Principal Accounting Officer. Ms. Wolf has been retained
to provide such services as a non-employee consultant of the Company. In connection with her appointment as Interim Chief Financial Officer,
the Company entered into a consulting agreement with Ms. Wolf, whereby Ms. Wolf is entitled to receive $275 per hour for services provided
in her capacity as Interim Chief Financial Officer. The agreement shall continue perpetually until terminated by either party.
Compensation Recovery Policy
In November 2023, we adopted a compensation recovery
policy (the “Compensation Recovery Policy”) that is designed to comply with, and will be interpreted in a manner consistent
with, Section 10D and Rule 10D-1 of the Exchange Act and the applicable rules of the Nasdaq Stock Market, including any interpretive
guidance provided by Nasdaq. Under our Compensation Recovery Policy, in the event of an accounting restatement due to the Company’s
material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement
to correct a material error in previously issued financial statements, or that would result in a material misstatement if the error were
corrected in the current period or left uncorrected in the current period, the Company must recover erroneously awarded incentive-based
compensation previously paid to the Company’s executive officers in accordance with the terms of such Compensation Recovery Policy.
Furthermore, under the Compensation Recovery Policy, the Company is prohibited from indemnifying any executive officer or former executive
officer against the loss of erroneously awarded incentive-based compensation and from paying or reimbursing an executive officer for
purchasing insurance to cover any such loss.
Outstanding Equity Awards at Fiscal Year-End
2024
The following table provides information regarding
the outstanding equity awards held by our named executive officers as of December 31, 2024. See “Equity Incentive Plan Information,”
below, for additional information regarding our equity incentive plans.
| | |
Outstanding
Equity Awards at Fiscal Year-End | |
| | |
Option
Awards | |
Stock
Awards | |
| Name | |
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable | |
Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | |
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | |
Option
Exercise
Price ($) | |
Option
Expiration
Date | |
Number
of Shares
of Stock
That
Have Not
Vested
(#) |
| | |
Market
Value
of
Shares of
Stock That
Have Not
Vested ($) | |
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
(#) | | |
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($) | |
| Jennifer Ernst | |
| 34 | |
| – | |
| – | |
$ | 224.40 | |
| 4/1/2028 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 84 | |
| 34 | (1) |
| – | |
$ | 3,111.00 | |
| 2/4/2027 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 30 | |
| 44 | (2) |
| – | |
$ | 221.00 | |
| 5/8/2033 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| – | |
| 1,883 | (5) |
| – | |
$ | 22.78 | |
| 3/12/2034 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| – | |
| – | |
| – | |
| – | |
| – | |
| – |
| | |
– | |
| 29,412 | (7) | |
| 173,000 | |
| Blake Gurfein | |
| 37 | |
| 12 | (3) |
| – | |
$ | 7,803.00 | |
| 12/14/2031 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 5 | |
| – | |
| – | |
$ | 204.00 | |
| 4/3/2028 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 4 | |
| – | |
| – | |
$ | 204.00 | |
| 6/27/2028 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 15 | |
| 6 | (4) |
| – | |
$ | 2,839.00 | |
| 2/4/2032 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| 24 | |
| 35 | (2) |
| – | |
$ | 221.00 | |
| 5/8/2033 | |
| – |
| | |
– | |
| – | | |
| – | |
| | |
| – | |
| 589 | (5) |
| – | |
$ | 22.78 | |
| 3/12/2034 | |
| |
| | |
| |
| | | |
| | |
| | |
| – | |
| – | |
| – | |
| – | |
| – | |
| – |
| | |
– | |
| 13,236 | (7) | |
| 77,850 | |
| Kimberly Bambach | |
| – | |
| – | |
| – | |
| – | |
| – | |
| 111 |
(6) | | |
2,513 | |
| – | | |
| – | |
| (1) | The options vest as follows:
(i) 25% on February 4, 2023, and (ii) the remaining 75% in equal installments over the next
36 months. |
| (2) | The options vest as follows:
(i) 25% on May 8, 2024, and (ii) the remaining 75% in equal installments over the next 36
months. |
| (3) | The options vest as follows:
(i) 25% on December 14, 2022, and (ii) the remaining 75% in equal monthly installments over
the next 36 months. |
| (4) | The options vest as follows:
(i) 25% on February 4, 2022, and (ii) the remaining 75% in equal monthly installments over
the next 36 months. |
| (5) | The options vest as follows:
(i) 50% on March 12, 2025, and (ii) the remaining 50% in equal monthly installments over
the next 12 months. |
| (6) | The restricted stock award
vests as follows: (i) 53.33% vest in a series of 12 equal monthly installments, rounded downward
to the nearest whole share, commencing on the one-month anniversary, and (ii) the remaining
shares vest on the one year anniversary. |
| (7) | The restricted stock units
vest as follows: (i) 50% on December 18, 2025, and (ii) the remaining 50% in a series of
eight successive equal quarterly installments. |
2017 Equity Incentive Plan
The Board adopted our 2017 Equity Inventive Plan
(the “2017 Plan”) on April 13, 2017. The principal purpose of the 2017 Plan was to attract, retain and motivate selected
employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.
The material terms of the 2017 Plan are summarized below.
In August 2021, the Board adopted and our stockholders
approved the 2021 Plan, which became effective upon the completion of our IPO. Upon the effectiveness of the 2021 Plan, it replaced the
2017 Plan, except with respect to awards outstanding under the 2017 Plan, and no further awards may be granted under the 2017 Plan. Additionally,
any awards that are canceled or expire under the 2017 Plan will not be reissued.
Share reserve. Under the 2017 Plan, 578
shares of our Common Stock were reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options,
restricted stock awards, and other stock-based awards. With respect to the share reserve under the 2017 Plan:
| · | to
the extent that an award terminated, expired or lapsed for any reason or an award was settled
in cash without the delivery of shares prior to the effectiveness of the 2021 Plan, any shares
subject to the award at such time would have been available for future grants under the 2017
Plan; and |
| | | |
| · | prior
to the effectiveness of the 2021 Plan, to the extent that shares of our Common Stock were
repurchased by us prior to vesting so that shares were returned to us, such shares would
have been available for future grants under the 2017 Plan. |
As noted above, upon the effectiveness of the
2021 Plan, it replaced the 2017 Plan, except with respect to awards outstanding under the 2017 Plan, and no further awards are available
for grant under the 2017 Plan.
Administration. Following completion of
our IPO, the Compensation Committee of the Board began administering the 2017 Plan. Prior to that, the 2017 Plan was administered by
the Board.
Subject to the terms and conditions of the 2017
Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be
subject to awards and the terms and conditions of awards, and to make all other determinations and to take all other actions necessary
or advisable for the administration of the 2017 Plan. The administrator is also authorized to adopt, amend or rescind rules relating
to administration of the 2017 Plan. The Board may at any time remove the Compensation Committee as the administrator and revest in itself
the authority to administer the 2017 Plan.
Eligibility. Options, restricted stock
and all other stock-based and cash-based awards under the 2017 Plan may be granted to individuals who are then our officers, employees
or consultants or are the officers, employees or consultants of certain of our subsidiaries. Such awards also may be granted to our directors.
Only employees of our Company may be granted incentive stock options (“ISOs”).
Awards. The 2017 Plan provides that the
administrator may grant or issue stock options, restricted stock, other stock- or cash-based awards and dividend equivalents, or any
combination thereof; provided, however, that as noted above, no additional awards may be issued under the 2017 Plan. Each award will
be set forth in a separate agreement with the person receiving the award, which will indicate the type, terms and conditions of the award.
| · | Incentive
stock options. ISOs will be designed in a manner intended to comply with the provisions
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)
and will be subject to specified restrictions contained in the Code. Among such restrictions,
ISOs must have an exercise price of not less than the fair market value of a share of Common
Stock on the date of grant, may only be granted to employees, and must not be exercisable
after a period of ten years measured from the date of grant. In the case of an ISO granted
to an individual who owns (or is deemed to own) at least 10% of the total combined voting
power of all classes of our capital stock, the 2017 Plan provides that the exercise price
must be at least 110% of the fair market value of a share of Common Stock on the date of
grant and the ISO must not be exercisable after a period of five years measured from the
date of grant. |
| | | |
| · | Nonstatutory
stock options. Nonstatutory Stock Options, or NSOs, will provide for the right to purchase
shares of our Common Stock at a specified price which may not be less than fair market value
on the date of grant, and usually will become exercisable (at the discretion of the administrator)
in one or more installments after the grant date, subject to the participant’s continued
employment or service with us and/ or subject to the satisfaction of corporate performance
targets and individual performance targets established by the administrator. NSOs may be
granted for any term specified by the administrator that does not exceed ten years. |
| | | |
| · | Restricted
stock. Restricted stock may be granted to any eligible individual and made subject to
such restrictions as may be determined by the administrator. Restricted stock, typically,
may be forfeited for no consideration or repurchased by us at the original purchase price
if the conditions or restrictions on vesting are not met. In general, restricted stock may
not be sold or otherwise transferred until restrictions are removed or expire. Purchasers
of restricted stock, unlike recipients of options, will have voting rights and will have
the right to receive dividends, if any, prior to the time when the restrictions lapse, however,
extraordinary dividends will generally be placed in escrow, and will not be released until
restrictions are removed or expire. |
| | | |
| · | Other
stock-based awards. Other stock-based awards are awards of fully vested shares of our
Common Stock and other awards valued wholly or partially by referring to, or otherwise based
on, shares of our Common Stock. |
Other stock-based awards may be granted to participants
and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of base
salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. The plan administrator
will determine the terms and conditions of other stock-based awards, which may include vesting conditions based on continued service,
performance and/or other conditions.
Any award may be granted as a performance award,
meaning that the award will be subject to vesting and/or payment based on the attainment of specified performance goals.
Change in control. In the event of a change
in control, to the extent that an award (i) is vested, (ii) the terms of an award provide for acceleration of vesting upon a change in
control, or (iii) the administrator elects to accelerate the vesting of the award in connection with the change in control, the plan
administrator may elect to provide for the purchase or exchange of an award for cash or other property in an amount equal to the difference
between (x) the value of cash or other property the optionee would receive in connection with such change in control if the optionee
exercised the award, and (y) the aggregate exercise price of the vested portion of the award. If the award is not purchased or exchanged
as provided above, then the award will be terminated and cease to be exercisable unless the award is expressly assumed or substituted
by the acquirer.
Adjustments of awards. In the event of
any stock dividend or other distribution, stock split, reverse stock split, reorganization, combinations or exchange of share, merger,
consolidation, split-up, spin off, recapitalization, repurchase or any other corporate event affecting the number of outstanding shares
of our Common Stock or the share price of our Common Stock that would require adjustments to the 2017 Plan or any awards under the 2017
Plan in order to prevent the dilution or enlargement of the potential benefits intended to be made available thereunder, the administrator
will make appropriate, proportionate adjustments to: (i) the aggregate number and type of shares subject to the 2017 Plan; (ii) the number
and kind of shares subject to outstanding awards and terms and conditions of outstanding awards (including, without limitation, any applicable
performance targets or criteria with respect to such awards); and (iii) the grant or exercise price per share of any outstanding awards
under the 2017 Plan. In connection with the 1-for-4 reverse stock split of our issued and outstanding shares of Common Stock that was
effected on August 31, 2021 and the 1-for-17 reverse stock split if our issued and outstanding share of Common Stock that was effected
on March 7, 2025, the terms of awards previously granted under our 2017 Plan were equitably adjusted in accordance with the provisions
thereof.
Amendment and termination. The administrator
may terminate, amend or modify the 2017 Plan at any time and from time to time. However, we must generally obtain stockholder approval
to amend or modify the 2017 Plan to the extent required by applicable law, rule or regulation (including any applicable stock exchange
rule). Notwithstanding the foregoing, an option may be amended to reduce the per share exercise price below the per share exercise price
of such option on the grant date and options may be granted in exchange for, or in connection with, the cancellation or surrender of
options having a higher per share exercise price without receiving additional stockholder approval.
No ISOs may be granted pursuant to the 2017 Plan
after the tenth anniversary of the effective date of the 2017 Plan. Any award that is outstanding on the termination date of the 2017
Plan will remain in force according to the terms of the 2017 Plan and the applicable award agreement.
2021 Equity Incentive Plan
See the summary of the material terms of the
2021 Plan set forth above under “Proposal 2— Approval of Amendment to the Amended and Restated 2021 Equity Incentive Plan.”
Equity Incentive Plan Information
The following table provides information as of
December 31, 2024, regarding our equity compensation plans:
| Plan Category | |
Number of
securities
to be issued
upon exercise of
outstanding options,
warrants and rights | | |
Weighted-average
exercise price
of outstanding
options,
warrants and rights | | |
Number of
securities
remaining available
for future issuance
under equity
compensation plans | |
| Equity compensation plans approved by security holders (1) | |
| 150,349 | | |
$ | 12.62 | | |
| 94,430 | |
| Equity compensation plans not approved by security holders | |
| – | | |
| – | | |
| – | |
| Total | |
| 150,349 | | |
$ | 12.62 | | |
| 94,430 | |
| (1) | Represents outstanding stock
options granted to our current or former employees, directors and consultants pursuant to
the 2017 Plan and 2021 Plan. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information
regarding the beneficial ownership of our outstanding Common Stock as of May 14, 2025 by: (i) each person known by us to be the beneficial
owner of more than 5% of the outstanding shares of our common stock, (ii) each of our directors, (iii) each of our named executive officers
(as defined by Item 402(a)(3) of Regulation S-K promulgated under the Exchange Act), and (iv) all of our current directors and executive
officers as a group. As of May 14, 2025, there are no persons known to us to beneficially own more than 5% of each class of our outstanding
Common Stock.
Beneficial ownership has been determined in accordance
with Rule 13d-3 under the Exchange Act. The percentages in the table have been calculated on the basis of treating as outstanding for
a particular person, all shares of our Common Stock outstanding on that date and all shares of our Common Stock issuable to that holder
in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are
exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power
with respect to all shares of our Common Stock owned by them, except to the extent that power may be shared with a spouse. The Company
does not know of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.
| Beneficial owner(1) |
|
Amount
and Nature
of Beneficial
Ownership |
|
|
Percent
of Class |
|
| 5% or greater stockholders |
|
|
|
|
|
|
|
|
| Statera BioPharma, Inc.(2) |
|
|
61,205 |
|
|
|
7.3% |
|
| Avenue Venture Opportunities Fund, L.P.(2) |
|
|
50,134 |
|
|
|
5.7% |
|
| Directors and Named Executive Officers |
|
|
|
|
|
|
|
|
| Jennifer Ernst(3) |
|
|
2,144 |
|
|
|
* |
|
| Blake Gurfein, PhD(4) |
|
|
572 |
|
|
|
* |
|
| Dean Zikria(5) |
|
|
569 |
|
|
|
* |
|
| Sheryle Bolton(6) |
|
|
659 |
|
|
|
* |
|
| Christina Valauri(7) |
|
|
533 |
|
|
|
* |
|
| Kimberly Bambach(8) |
|
|
442 |
|
|
|
* |
|
| All current directors and executive officers as a group (7 persons)(9) |
|
|
4,447 |
|
|
|
* |
|
* Less than 1%
| |
(1) |
Unless otherwise indicated in the footnotes to the table, the address for each beneficial owner listed is c/o Tivic Health Systems, Inc., 47685 Lakeview Blvd., Fremont, California 94538. |
| |
(2) |
Based on information included in the registered stockholder list received by the Company from its transfer agent in connection with the Annual Meeting. |
| |
(3) |
Includes 706 shares of Common Stock held by Ms. Ernst, and options to purchase 1,438 shares of Common Stock that are vested and exercisable (or will be vested and exercisable within 60 days of May 14, 2025). |
| |
(4) |
Includes 66 shares of Common Stock held by Dr. Gurfein, as well as options to purchase 506 shares of Common Stock that are vested and exercisable (or will be vested and exercisable within 60 days of May 14, 2025). |
| |
(5) |
Includes options to purchase 569 shares of Common Stock that are vested and exercisable (or will be vested and exercisable within 60 days of May 14, 2025). |
| |
(6) |
Includes options to purchase 659 shares of Common Stock that are vested and exercisable (or will be vested and exercisable within 60 days of May 14, 2025). |
| |
(7) |
Includes options to purchase 533 shares of Common Stock that are vested and exercisable (or will be vested and exercisable within 60 days of May 14, 2025). |
| |
(8) |
Includes 442 shares of Common Stock held by Ms. Bambach. |
| |
(9) |
Consists of the shares described in Notes (3) through (7) above, less the 442 shares of Common Stock held by Ms. Bambach, who resigned as Interim Chief Financial Officer of the Company effective October 1, 2024. Lisa Wolf, Interim Chief Financial Officer of the Company, and Michael Handley, Chief Operating Officer of the Company and President of the Tivic Biopharma, are excluded from the table because they do not beneficially own any shares of Company Common Stock as of May 14, 2025, but are included in the total number of current directors and executive officers of the Company. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the
Company’s directors and executive officers and persons who beneficially own more than ten percent of a registered class of the
Company’s equity securities to file with the Commission initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial stockholders are required
by Commission regulations to furnish us with copies of all Section 16(a) forms they file. To the best of the Company’s knowledge
based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December
31, 2024 and written representations that no other reports were required, each of Kimberly Bambach, Jennifer Ernst and Blake Gurfein
inadvertently failed to timely file Form 4 in March 2024; there were no other late Section 16 filings during the year ended December
31, 2024.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
There have not been any transactions or any series
of similar transactions, since January 1, 2023, nor are we aware of any such pending transactions, to which we were a party or will be
a party, in which:
| · | the
amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average
of our total assets for the last two fiscal years; and |
| | | |
| · | any
of our directors, executive officers, holders of more than 5% of our capital stock or any
member of their immediate family had or will have a direct or indirect material interest,
other than equity and other compensation, termination, change in control and other arrangements
with directors and executive officers, which are described where required under the sections
above entitled “Executive Compensation and Other Information” and “Director
Compensation.” |
Policies and Procedures Regarding Related
Party Transactions
Our Board has adopted a written related person
transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions.
This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement
or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where
the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without
limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest,
indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions,
our Audit and Risk Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction
is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s
interest in the transaction. The related person transactions disclosed in this Proxy Statement were each approved by the full Board or
Audit and Risk Committee, as applicable.
Interests of Certain Persons in Matters to
be Acted Upon
Other than with respect to the election of our
Class I director nominee, none of our directors, nominees for director, executive officers, any person who has served as a director or
executive officer since the beginning of the last fiscal year, or their associates have any interest, direct or indirect, by security
holdings or otherwise, in any of the matters to be acted upon at the Annual Meeting as described in this Proxy Statement, except to the
extent that such persons may be granted awards under our Plan Amendment.
STOCKHOLDER PROPOSALS
Our Bylaws and Rule 14a-8 of the Exchange Act
establish advance notice procedures with regard to certain matters (other than director nominations), including stockholder proposals
not included in our proxy statement, to be brought before an annual meeting of stockholders. In general, notices must meet the requirements
in our Bylaws and Rule 14a-8 of the Exchange Act and must be received at our principal executive offices not less than 90 calendar days
before nor more than 120 calendar days prior to the first anniversary of the preceding year’s annual meeting in order to be included
in our proxy statement. Therefore, to be presented at our 2026 annual meeting of stockholders, such a proposal must be received by us
no earlier than March 2, 2026, and no later than April 1, 2026. However, if the date of the 2026 annual meeting of stockholders is more
than 30 days before or more than 60 days after such anniversary date, notice must be received no earlier than the close of business on
the 120th day prior to such annual meeting and not later than the later of (i) the 90th day prior to such annual meeting and (ii) the
close of business on the tenth calendar day following the day on which public disclosure of the date of such annual meeting was first
made. If the stockholder fails to give notice by these dates, and otherwise comply with the requirements set forth in our Bylaws or requirements
of the Exchange Act, then the persons named as proxies in the proxies solicited by the Board for the 2026 annual meeting of stockholders
may exercise discretionary voting power regarding any such proposal. Stockholders are advised to review our Bylaws and Rule 14a-8 of
the Exchange Act, which also specify requirements as to the form and content of a stockholder’s notice.
Furthermore, our Bylaws and Rule 14a-19 of the
Exchange Act establish advance notice procedures and certain other requirements that stockholders who wish to nominate directors for
election at a stockholder meeting must comply with. In general, notices must meet the requirements in our Bylaws and Rule 14a-19 of the
Exchange Act and must be received at our principal executive offices not less than 90 calendar days before nor more than 120 calendar
days prior to the first anniversary of the preceding year’s annual meeting. Therefore, to ensure that stockholder nominees for
election of directors will be included for election at our 2026 annual meeting of stockholders, such a proposal must be received by us
no earlier than March 2, 2026, and no later than April 1, 2026. However, if the date of the 2026 annual meeting of stockholders is more
than 30 days before or after such anniversary date, notice must be received no earlier than the close of business on the 120th day prior
to such annual meeting and not later than the later of (i) the 90th day prior to such annual meeting and (ii) the close of business on
the tenth calendar day following the day on which public disclosure of the date of such annual meeting was first made. If the stockholder
fails to give notice by these dates, then the persons named as proxies in the proxies solicited by the board of directors for the 2026
annual meeting of stockholders may exercise discretionary voting power regarding any such proposal. Stockholders are advised to review
our Bylaws, which also specify requirements as to the form and content of a stockholder’s notice.
In addition to satisfying the requirements under
our Bylaws, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide us notice
that sets forth the information required by Rule 14a-19 of the Exchange Act.
OTHER BUSINESS
The Board knows of no matter other than those
described herein that will be presented for consideration at the Annual Meeting. However, should any other matters properly come before
the Annual Meeting or any adjournments or postponements thereof, it is the intention of the person(s) named in the accompanying proxy
to vote in accordance with their best judgment in the interest of the Company and its stockholders.
MISCELLANEOUS
The Company will bear all costs incurred in the
solicitation of proxies. In addition to solicitation by mail, our officers and employees may solicit proxies by telephone, the Internet
or personally, without additional compensation. We may also make arrangements with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial owners of shares of our Common Stock held of record by such
persons, and we may reimburse such brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses incurred
in connection therewith. We have not engaged a proxy solicitor.
The Commission has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred
to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. The Company
and some brokers household proxy materials and may deliver a single proxy statement and/or Notice of Internet Availability of Proxy Materials
to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you
have received notice from your broker or the Company that they or the Company will be householding materials to your address, householding
will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker if
your shares are held in a brokerage account or the Company if you hold registered shares of capital stock. We will also deliver a separate
copy of this Proxy Statement to any stockholder upon written request. Similarly, stockholders who have previously received multiple copies
of disclosure documents may write to the address or call the phone number listed below to request delivery of a single copy of these
materials in the future. You can notify the Company by sending a written request to Tivic Health Systems, Inc., 47685 Lakeview Blvd.,
Fremont, California 94538, Attn: Secretary, by registered, certified or express mail or by calling the Company at (888) 276-6888.
AVAILABILITY OF ADDITIONAL INFORMATION
We file annual, quarterly and current reports,
proxy statements, and other information with the Commission. The Commission maintains a website at http://www.sec.gov that contains reports,
proxy and information statements, and other information regarding issuers that file electronically with the Commission.
Our Annual Report (which is not a part of our
proxy soliciting materials) is being mailed with this Proxy Statement. This Proxy Statement and our Annual Report are also available
on our website at https://tivichealth.com/investor/. Additionally, and in accordance with Commission rules, you may access our Proxy
Statement at www.proxyvote.com. We make available on or through our website free of charge our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and all amendments to such reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act as soon as reasonably practicable after filing.
| |
By Order of the Board of Directors, |
| |
|
| |
/s/ Sheryle Bolton |
| |
Sheryle Bolton |
| |
|
| |
Chairperson of the Board |
June 2, 2025
234567 234567 234567 234567 234567 234567 1 OF 1 1 NAME THE COMPANY NAME INC. - COMMON THE COMPANY NAME INC. - CLASS A THE COMPANY NAME INC. - CLASS B THE COMPANY NAME INC. - CLASS C THE COMPANY NAME INC. - CLASS D THE COMPANY NAME INC. - CLASS E THE COMPANY NAME INC. - CLASS F THE COMPANY NAME INC. - 401 K x 02 0000000000 2 1 OF 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 2 PAGE CONTROL # → THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: SHARES SCAN TO VIEW MATERIALS & VOTE 0000679928_1 R1.0.0.2 The Board of Directors recommends you vote FOR the following Class I Director Nominee: 1. Election of Class I Director to be elected for a three year term expiring in 2028. Nominees For Withhold 1A Christina Valauri 0 0 Against Abstain For 0 0 0 5. Approval, in accordance with Nasdaq Listing Rule 5635(d), of the issuance of shares of Common Stock upon conversion of those shares of Series B Non - Voting Convertible Preferred Stock and exercise of those warrants to purchase shares of Common Stock that the Company may in the future issue to an investor pursuant to that Securities Purchase Agreement entered into by and between the Company and such investor on April 29, 2025. The Board of Directors recommends you vote FOR Proposals 2, 3, 4, 5, 6 and 7. For Against Abstain 2. Approval of an amendment to the Company's Amended and Restated 2021 0 0 0 Equity Incentive Plan (the "2021 Plan") to increase the number of shares of Common Stock authorized for issuance thereunder by 425,000 shares, pursuant to the terms and conditions of the 2021 Plan. 0 0 0 6. Approval, in accordance with Nasdaq Listing Rule 5635(d), of the sale and issuance of shares of Common Stock pursuant to that Equity Purchase Agreement entered into by and between the Company and Mast Hill Fund, L.P. on March 18, 2025. 3. Ratification of the selection of Rosenberg Rich Baker Berman, P.A. as 0 0 0 the Company's independent registered public accounting firm for the fiscal year ending December 31, 2025. 0 0 0 7. Approval of the adjournment of the 2025 Annual Meeting to another place, or a later date or dates, if necessary or appropriate, to solicit additional proxies in the event the Company has not received sufficient votes in favor of any of the foregoing proposals. NOTE: In their discretion, the proxyholders will vote on such other business as may properly come before the 2025 Annual Meeting of Stockholders or any adjournment or postponement thereof. 4. Approval, in accordance with Nasdaq Listing Rule 5635(a) and Nasdaq 0 0 0 Listing Rule 5635(d), of the issuance of shares of common stock, including upon conversion of shares of Series A Non - Voting Convertible Preferred Stock that have been, or may in the future be, issued pursuant to that Exclusive License Agreement entered into by and between the Company and Statera Biopharma, Inc. on February 11, 2025, as may be amended from time to time. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. SHARES CUSIP # SEQUENCE # JOB # Signature (Joint Owners) Date Signature [PLEASE SIGN WITHIN BOX] Date TIVIC HEALTH SYSTEMS, INC 47685 LAKEVIEW BLVD. FREMONT, CA 94538 Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 06/29/2025. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During the meeting - Go to www.virtualshareholdermeeting.com/TIVC2025 You may attend the meeting via the internet and vote during the meeting . Have the information that is printed in the box marked by the arrow available and follow the instructions . VOTE BY PHONE - 1 - 800 - 690 - 6903 Use any touch - tone telephone to transmit your voting instructions . Vote by 11 : 59 P . M . ET on 06 / 29 / 2025 . Have your proxy card in hand when you call and then follow the instructions . VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage - paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 .
0000679928_2 R1.0.0.2 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10 - K are available at www.proxyvote.com TIVIC HEALTH SYSTEMS, INC 2025 Annual Meeting of Stockholders June 30, 2025 1:00 PM PDT This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Jennifer Ernst as proxy and attorney - in - fact with the power to appoint her substitute, and hereby authorizes her to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of TIVIC HEALTH SYSTEMS, INC. that the stockholder(s) is/are entitled to vote at the 2025 Annual Meeting of Stockholders to be held at 1:00 PM, PDT on June 30, 2025, virtually at www.virtualshareholdermeeting.com/TIVC2025, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein by the undersigned. If no such direction is given, but this proxy is signed, this proxy will be voted FOR the election of each of the Class I Director Nominee, FOR Proposals 2, 3, 4, 5, 6 and 7, and in the discretion of the proxy with respect to such other business as may properly come before the meeting. Continued and to be signed on reverse side
Tivic Health Systems (NASDAQ:TIVC)
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