Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large
accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company"
in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Yes ☐ No ☒
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the registrant’s voting stock held
by non-affiliates as of June 30, 2022, was approximately $84,020,909 based on the closing price of $1.77 of the Common Stock of the registrant
as reported on the Nasdaq Capital Market on such date. Shares of common stock held by each executive officer and director and by each
other person who may be deemed to be an affiliate of the Registrant have been excluded from this computation. The determination of affiliate
status for this purpose is not necessarily a conclusive determination for other purposes. As of March 16, 2023, there were 119,080,135
shares of the registrant’s Common Stock, par value $0.001 per share, outstanding.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Directors
The following table sets forth the names, ages and current
positions of our directors, as of April 11, 2023. Following the table is biographical information for each director.
| Name |
|
Age |
|
Principal Occupation |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Cameron Durrant, M.D., MBA |
|
62 |
|
Chairman, Chief Executive Officer, and Acting Chief Financial Officer, Humanigen, Inc. |
|
| Dale Chappell, M.D., MBA |
|
52 |
|
Director and Chief Scientific Officer, Humanigen, Inc. |
|
| Ronald Barliant, JD(3) |
|
77 |
|
Of Counsel, Goldberg Kohn, Ltd. |
|
| Rainer Boehm, M.D., MBA(1)(3) |
|
63 |
|
Former Chief Commercial and Medical Officer and interim Chief Executive Officer at Novartis Pharmaceuticals |
|
| Cheryl Buxton, MA(1)(2) |
|
63 |
|
Former Vice Chairman, Global Sector Leader, Pharmaceuticals, Korn Ferry International |
|
| John Hohneker, M.D.(2)(3) |
|
63 |
|
Former President and Chief Executive Officer of Anokion SA |
|
| Kevin Xie, Ph.D.(1)(2) |
|
52 |
|
Chief Financial Officer, Gracell Biotechnologies |
|
_____________________________
| (1) | Member of the Audit Committee |
| (2) | Member of the Compensation Committee |
| (3) | Member of the Nominating and Corporate Governance Committee |
Cameron
Durrant, M.D., MBA, has served as our Chairman of our board of directors (the “Board”) since January 2016, as our
Chief Executive Officer since March 2016 and as our Acting Chief Financial Officer since October 2022. In addition, Dr. Durrant served
as our Interim Chief Financial Officer from July 1, 2019 to July 31, 2020. He previously has been a senior executive at Johnson and Johnson,
Pharmacia Corporation, GSK and Merck. Dr. Durrant currently serves on the boards of directors of two privately held healthcare companies.
Dr. Durrant earned his medical degree from the Welsh National School of Medicine, Cardiff, UK, his DRCOG from the Royal College of Obstetricians
and Gynecologists, London, UK, his MRCGP from the Royal College of General Practitioners, London, UK, and his MBA from Henley Management
College, Oxford, UK. He was elected as a Fellow of the Learned Society of Wales in 2022. Dr. Durrant brings to the Board extensive experience
as a pharma/biotech entrepreneur, operating executive and board member, as well as his day-to-day operating experience as our Chief Executive
Officer.
Dale Chappell, M.D., MBA,
has served as a member of our Board since February 2021 and was appointed as our Chief Scientific Officer on July 6, 2020. Dr. Chappell
is the managing member of BH Management, a private investment manager that specializes in biopharmaceuticals and a significant stockholder,
a position he has held since 2002. Since April 2015, Dr. Chappell has served as CEO, President and CFO of Cheval US Holdings, Inc., a
private investment company with holdings in the hospitality industry. Previously, Dr. Chappell was an associate with Chilton Investment
Company, covering healthcare, and an analyst at W.P. Carey & Company. Dr. Chappell, who received his MD from Dartmouth Medical School
and his MBA from Harvard Business School, began his career as a Howard Hughes Medical Institute fellow at the National Cancer Institute
where he studied tumor immunology, worked as a researcher in the labs of Dr. Steven A. Rosenberg (widely thought of as one of the pioneers
in CAR-T therapy) and Dr. Nicholas P. Restifo (a leading researcher in the field of immunology) and is published in the field of GM-CSF.
Dr. Chappell served as a member of the Board from June 2016 to November 2017. Prior to joining Humanigen in a full-time role as our Chief
Scientific Officer, Dr. Chappell advised and consulted with management as our ex-officio chief scientific officer. Dr. Chappell brings
to the Board valuable experience in the biopharmaceuticals industry and unparalleled insight into the Company’s development pipeline
in his capacity as Chief Scientific Officer, as well as the perspective of a significant stockholder in the Company.
Ronald
Barliant, JD, has served as a member of our Board since January 2016. Mr. Barliant has been Of Counsel to Goldberg Kohn,
Ltd. since January 2016, and immediately prior to that had served as a principal in Goldberg Kohn’s Bankruptcy & Creditors’
Rights Group since September 2002. He previously served as U.S. bankruptcy judge for the Northern District of Illinois from 1988 to 2002.
Mr. Barliant has represented debtors and creditors in complex bankruptcy cases, and counseled major financial institutions, business
firms and boards of directors in connection with workouts. Mr. Barliant brings to the Board valuable experience gained from a distinguished
legal career as a counselor to numerous boards, considered judgment and financial sophistication.
Rainer
Boehm, M.D., MBA, has served as a member of our Board since February 2018. Mr. Boehm has been a biopharmaceutical
industry leader for more than three decades. At Novartis for 29 years, he held roles of increasing responsibility culminating with his
position as Chief Commercial and Medical Affairs Officer and as ad interim CEO of Novartis’ pharmaceuticals division. His background
spans senior leadership, marketing, sales and medical affairs positions in both oncology and pharmaceuticals and he has led regions around
the world, including North America, Asia and all emerging markets. Mr. Boehm has overseen the launch and commercialization of many new
drugs in his career, including blockbuster breakthroughs Cosentyx and Entresto, and major oncology brands including Afinitor, Exjade,
Tasigna, Femara, Zometa and Glivec. Mr. Boehm also currently serves on the board of directors for the following companies: Cellectis
SA, a clinical-stage biopharmaceutical company focused on immunotherapies based on gene-edited CAR-T cells; Omega Therapeutics, Inc.,
a clinical-stage biopharmaceutical company focused on epigenetics; BioCopy AG, a preclinical-stage company focused on copying of biomolecules;
Berlin Cures AG, a clinical-stage biopharmaceutical company focused on the development of therapies against auto-antibodies. He graduated
from the medical school at the University of Ulm in Germany and received his MBA from Schiller University at the Strasbourg campus in
France. Mr. Boehm brings to the Board significant knowledge and experience within the biopharmaceutical industry, as well as financial
acumen and operational experience.
Cheryl Buxton, MA, has
served as a member of our Board since December 2019. Until her retirement in December 2020, Ms. Buxton worked for over 25 years at Korn/Ferry
International, the world’s largest executive search company. Most recently, she served as the Korn Ferry Vice Chairman, Global
Sector Leader, Pharmaceuticals, based in the Princeton office. Ms. Buxton conducted senior level assignments, with a special focus on
research driven organizations. She also led the R&D sector for the Pharmaceutical and Consumer divisions within Korn Ferry. Ms. Buxton
joined Korn Ferry’s London office and European headquarters before spending time in Paris and then relocating to Princeton in 1997.
Prior to joining Korn Ferry, Ms. Buxton was human resources director for Johnson & Johnson Pharmaceuticals (Cala Ltd), based in the
U.K., where her focus was on organizational issues and strategic resourcing and guidance on European directives. She also provided human
resources support to three smaller companies in the group for Europe. Her human resources career started at Bristol Myers Ltd., where
she was responsible for its consumer and pharmaceutical business. Ms. Buxton holds a master’s degree in employment law and industrial
relations from Leicester University, a degree in Nursing, a diploma in personnel management and is a member of the Institute of Personnel
and Development. and the Advisory Board for South Asia Pharmaceutical Council. She previously was on the board of directors of SIFE.
Ms. Buxton brings to the Board significant knowledge and experience within the biopharmaceutical industry, as well as leadership experience
and an extensive executive network.
John Hohneker, M.D., has
served as a member of our Board since October 2021 and has over 30 years of drug development and leadership experience in the biopharmaceutical
industry. Dr. Hohneker most recently served as President and CEO of Anokion SA, a Swiss biotechnology company, from January 2018 to January
2021. Prior to Anokion SA, he led Research and Development at Forma Therapeutics, a biotechnology company, from August 2015 to January
2018. Prior to Forma, Dr. Hohneker held various leadership roles during his 14 years at Novartis AG, from 2001 to 2015, where he last
served as Senior Vice President and Global Head of Development, Immunology and Dermatology. Prior to Novartis, he held several positions
of increasing responsibility over a nearly 11-year period beginning at Burroughs Wellcome and then with its successor Glaxo Wellcome.
Dr. Hohneker also currently serves on the board of directors for the following companies: Curis, Inc.(Nasdaq: CRIS), a publicly traded
biotechnology company focused on the development and commercialization of innovative therapeutics for the treatment of cancer; BioTheryX,
Inc., a private clinical-stage biopharmaceutical company focused on restoring protein homeostasis; Aravive, Inc. (Nasdaq: ARAV), a publicly
traded biotechnology company focused on cancer treatments; Evelo Biosciences (Nasdaq: EVLO), a publicly traded clinical-stage biotechnology
company developing orally delivered product candidates; Inzen Therapeutics, a private research stage biotechnology company, and Trishula
Therapeutics, a private clinical-stage biotechnology company targeting cancer immunotherapy. He also served as a director of Dimension
Therapeutics, Inc., which was a publicly traded biotechnology company, from January 2017 until it was acquired by Ultragenyx Pharmaceutical
Inc. in October 2017. Dr. Hohneker received a bachelor’s degree in chemistry from Gettysburg College and a medical degree from
the University of Medicine and Dentistry of New Jersey at Rutgers Medical School. He completed his internship and residency in internal
medicine and his fellowship in medical oncology, all at the University of North Carolina at Chapel Hill. In addition to his operational
experience and expertise in the biopharmaceutical industry, Dr. Hohneker brings to the Board his direct experience leading business development
and licensing deals, raising capital, and serving on corporate boards through acquisitions.
Kevin Xie, Ph.D., has
served as a member of our Board since October 2021. Dr. Xie has nearly twenty years of experience evaluating and investing in companies
across an array of healthcare-related industries, first for 13 years on the buy-side and then for six years in industry where he also
demonstrated the ability to add value through operational improvements. He is currently the Chief Financial Officer of Gracell Biotechnologies
Inc. (Nasdaq: GRCL), a global clinical-stage biopharmaceutical company dedicated to discovering and developing breakthrough cell therapies
intended to disrupt conventional approaches to CAR-T cell therapies, a position he has held since July 2020. Prior to Gracell, Dr. Xie
was the President of Healthcare Holdings for Fosun Group from March 2015 to July 2020, where he focused on investment projects in biotechnology,
pharmaceutical, healthcare information technology, and healthcare services industries. Dr. Xie co-founded and served as Portfolio Manager
of Locust Walk Capital from April 2010 to January 2012. Dr. Xie had previously served as Healthcare Sector Head at Scopia Capital, and
as a Managing Director at Great Point Partners. He previously served on the Board of Directors for ViewRay, Inc. (Nasdaq: VRAY), a publicly
traded medical device company that develops advanced radiation therapy technology for the treatment of cancer, from October 2019 to March
2022. In addition, from July 2020 to September 2021, Dr. Xie served on the Board of Directors of Alpha Healthcare Acquisition Corp.,
a publicly traded special purpose acquisition company, leading up to its business combination with Humacyte, Inc. Dr. Xie has a Bachelor
of Science in Material Science and Engineering from Tianjin University, an MBA in Finance from The Wharton School of the University of
Pennsylvania, and a PhD in Chemistry from The City University of New York. Dr. Xie brings to the Board his extensive experience in raising
capital and serving on boards within the biopharmaceutical and biotechnology industries.
Executive Officers
The information required by this item
regarding our executive officers is incorporated by reference to Part I of the 2022 Annual Report under the caption “Information
About our Executive Officers.”
Process for Recommending and Nominating Candidates for
Election to the Board
There have been no material changes to
the procedures by which stockholders may recommend nominees to our Board since we last provided disclosure of such procedures. However,
in addition to satisfying the requirements under our Second Amended and Restated Bylaws, to comply with the SEC’s universal proxy
rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees at any annual
meeting of stockholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than
60 days prior to the anniversary of the previous year's annual meeting date, except that, if we did not hold an annual meeting during
the previous year, or if the date of the meeting has changed by more than 30 calendar days from the previous year, then notice must be
provided by the later of 60 calendar days prior to the date of the annual meeting or the 10th calendar day following the day on which
we first announce the date of the annual meeting. For the 2023 annual meeting of stockholders, stockholders must have provided notice
that sets forth the information required by Rule 14a-19 under the Exchange Act prior to April 10, 2023. However, if the date of our 2023
annual meeting of stockholders is not held between May 10, 2023 and July 9, 2023, to be timely, such notice must be received in accordance
with the alternative timing requirements of Rule 14a-19, as described above.
Audit Committee
Pursuant to the audit committee charter,
the functions of the audit committee include, among other things:
| ● | appointing,
approving the compensation of, and assessing the independence of our registered public accounting
firm; |
| ● | overseeing
the work of our registered public accounting firm, including through the receipt and consideration
of reports from such firm; |
| ● | reviewing
and discussing with management and the registered public accounting firm our annual and quarterly
financial statements and related disclosures; |
| ● | monitoring
our internal control over financial reporting and our disclosure controls and procedures; |
| ● | meeting
independently with our registered public accounting firm and management; |
| ● | preparing
the audit committee report required by SEC rules; |
| ● | reviewing
and approving or ratifying any related person transactions; and |
| ● | overseeing
our risk assessment and risk management policies. |
Each member of our audit committee can
read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements and is also independent under
Nasdaq’s heightened independence standards for audit committee members. In arriving at this determination, our Board has examined
each audit committee member’s scope of experience and the nature of their prior and/or current employment. Additionally, our Board
has determined that each of Dr. Xie (who currently serves as chairman) and Mr. Boehm qualifies as an audit committee financial expert
within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq listing rules. Both our independent
registered public accounting firm and management periodically meet privately with our audit committee.
Our audit committee also has the authority
to retain special legal, accounting or other advisors or consultants as it deems necessary or appropriate to carry out its duties. We
believe that the composition and functioning of our audit committee complies with all applicable requirements of the Sarbanes-Oxley Act,
and all applicable SEC and Nasdaq listing rules and regulations. We intend to comply with future requirements to the extent they become
applicable to us.
Code of Ethics
We have adopted a Code of Business Conduct
that applies to all of our directors, officers and employees, including our principal executive officer and principal financial officer.
The Code of Business Conduct is posted on our website at www.humanigen.com/governance. If we make any substantive amendments to, or grant
any waivers from, the Code of Business Conduct for any officer or director, we will disclose the nature of such amendment or waiver on
our website or in a Current Report on Form 8-K.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires
our executive officers, directors and persons who beneficially own more than 10% of a registered class of our common stock to file with
the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company.
To the Company’s knowledge,
based solely on a review of the copies of such reports filed with the SEC and written representations that no other reports were required,
the Company believes that all Section 16(a) executive officers, directors and individuals who are greater than 10% beneficial stockholders
of the Company complied with applicable Section 16(a) requirements during the fiscal year ended December 31, 2022, except for a Form
4 for Adrian Kilcoyne, our former Chief Medical Officer, filed late on March 14, 2022 to report a series of purchases of the Company’s
common stock that occurred on March 8, 2022 and March 9, 2022.
ITEM 11. EXECUTIVE COMPENSATION
Our
“named executive officers” for the year ended December 31, 2022, consisting of our chief executive officer, the two
other most highly compensated executive officers serving as of December 31, 2022 and one other former executive officer who would have
been included as one of the two most highly compensated executive officers if such person had remained employed by us through December
31, 2022, were:
| ● | Cameron Durrant,
our Chairman, Chief Executive Officer, and Acting Chief Financial Officer |
| ● | Dale Chappell,
a director and Chief Scientific Officer |
| ● | Edward
Jordan, Chief Commercial Officer |
| ● | Timothy Morris,
Former Chief Operating and Financial Officer |
Mr. Morris resigned from his position as Chief Operating
and Financial Officer on October 23, 2022.
Summary Compensation Table
The following summary compensation table
shows, for the fiscal years ended December 31, 2022 and December 31, 2021, information regarding the compensation awarded to, earned
by or paid to our named executive officers.
Name and
Principal Position | |
Year | |
Salary ($) | | |
Bonus ($) | |
Option Awards ($)(3) | | |
Non-Equity
Incentive Plan
Compensation ($)(4) | | |
All
Other
Compensation ($) | | |
Total ($) | |
| Cameron Durrant(1) | |
2022 | |
| 640,000 | | |
— | |
| 459,058 | | |
| — | | |
| — | | |
| 1,099,058 | |
Chairman,
Chief
Executive Officer and Acting
Chief Financial
Officer | |
2021 | |
| 640,000 | | |
— | |
| 8,874,712 | | |
| 203,039 | | |
| — | | |
| 9,717,751 | |
| Dale Chappell | |
2022 | |
| 410,000 | | |
— | |
| 251,955 | | |
| — | | |
| — | | |
| 661,955 | |
Director
and Chief Scientific
Officer | |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Edward Jordan | |
2022 | |
| 360,000 | | |
— | |
| 249,309 | | |
| — | | |
| 4,750 | (5) | |
| 614,059 | |
Chief
Commercial Officer | |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | |
| Timothy Morris(2) | |
2022 | |
| 385,038 | | |
— | |
| 333,997 | | |
| — | | |
| 5,800 | (5) | |
| 724,835 | |
Former Chief Operating and
Financial Officer | |
2021 | |
| 475,000 | | |
— | |
| 152,487 | | |
| 143,983 | | |
| 5,800 | (5) | |
| 777,270 | |
| (1) | Dr. Durrant has served as our Acting
Chief Financial Officer since October 24, 2022. |
| (2) | Mr. Morris resigned from his position
as Chief Operating and Financial Officer on October 23, 2022. Compensation reported in 2022
is for a partial year of employment. |
| (3) | The amounts in this column represent
the aggregate grant date fair value of option awards granted to each named executive officer,
computed in accordance with FASB ASC Topic 718, as further described in Note 8 of the notes
to our Consolidated Financial Statements included our 2022 Annual Report, which contains
a discussion of all assumptions made by us in determining the grant date fair value of our
equity awards. See “—Narrative to Summary Compensation Table” for
additional information about the option awards granted in 2022. |
| (4) | The amounts in this column represent
the payouts under our annual cash incentive plan. |
| (5) | Reflects matching contributions made
by the Company under its 401(k) Plan. |
Narrative to Summary Compensation Table
Our executive compensation and corporate
governance programs are designed to attract, motivate and retain our executive talent, aligning the interests of our executives with
the interests of our stockholders to ensure prudent actions that will drive long-term value. Our executive compensation program includes
three primary components: 1) base salary, 2) annual cash incentive opportunities geared toward achievement of goals set by the compensation
committee, and 3) long-term incentives in the form of stock option grants.
As described in more detail in the 2022
Annual Report, topline results from the Accelerating COVID-19 Therapeutic Interventions and Vaccines-5 (“ACTIV-5”) and Big
Effect Trial, in the “B” arm of the trial (“BET-B”), referred to as the ACTIV-5/BET-B trial, did not achieve
statistical significance on the primary endpoint, as announced in July 2022. Our forward-looking business operations are dependent on
our ability to successfully execute our strategic realignment plan, as announced in July 2022, raise additional capital and manage our
liabilities in a way that permits us to continue as a going concern. As described in more detail in the 2022 Annual Report, we are currently
focused on executing our strategic realignment plan.
In light of the topline results from
the ACTIV-5/BET-B trial and resulting failure to attain a regulatory approval and commence revenue generating sales of lenzilumab, our
cash position has been constrained to such a degree that our Board and compensation committee determined not to award any salary increases
or payouts under the Company's 2022 annual incentive plan. In July 2022, the Board approved the grant of stock option awards to the named
executive officers. The grants were intended to enhance the Company’s ability to retain its executive officers and provide them
continuing incentives to execute against our strategic realignment plan. The Company granted stock options to purchase 808,906; 518,205;
455,010; and 600,360 shares of common stock to Dr. Durrant, Dr. Chappell, Mr. Jordan and Mr. Morris, respectively, on July 27, 2022.
The options have an exercise price of $0.38 and will vest pursuant to their terms in two equal tranches on the first and second anniversaries
of the grant date. The grant date fair values of the awards made to the Company’s named executive officers were approximately 40%
of the respective named executive officers’ base salaries for 2022.
For further detail regarding the compensation of our
named executive officers, see “—Employment Arrangements.”
Outstanding Equity Awards at 2022 Fiscal Year End
The following table shows certain information
regarding outstanding equity awards held by our named executive officers as of December 31, 2022.
| | |
| |
Option Awards |
| | |
| |
| | |
| | |
| | |
|
| | |
| |
Number of | | |
Number of | | |
| | |
|
| | |
| |
Securities | | |
Securities | | |
| | |
|
| | |
| |
Underlying | | |
Underlying | | |
| | |
|
| | |
| |
Unexercised | | |
Unexercised | | |
Option | | |
Option |
| | |
| |
Options | | |
Options | | |
Exercise | | |
Expiration |
| Name | |
| |
(#) Exercisable | | |
(#) Unexercisable | | |
Price ($) | | |
Date |
| Cameron Durrant | |
(1) | |
| 208,604 | | |
| — | | |
$ | 16.90 | | |
9/12/2026 |
| | |
(2) | |
| 1,463,349 | | |
| — | | |
$ | 3.33 | | |
3/8/2028 |
| | |
(3) | |
| 28,571 | | |
| — | | |
$ | 4.20 | | |
1/24/2029 |
| | |
(4) | |
| 63,620 | | |
| — | | |
$ | 2.00 | | |
1/27/2030 |
| | |
(5) | |
| 50,000 | | |
| — | | |
$ | 4.30 | | |
5/19/2030 |
| | |
(6) | |
| 82,622 | | |
| — | | |
$ | 12.14 | | |
10/4/2030 |
| | |
(7) | |
| 380,706 | | |
| 271,934 | | |
$ | 16.07 | | |
3/11/2031 |
| | |
(8) | |
| 25,333 | | |
| 50,667 | | |
$ | 3.72 | | |
12/30/2031 |
| | |
(9) | |
| — | | |
| 84,385 | | |
$ | 2.99 | | |
1/12/2032 |
| | |
(10) | |
| — | | |
| 808,906 | | |
$ | 0.38 | | |
7/27/2032 |
| Dale Chappell | |
(11) | |
| 100,320 | | |
| 33,440 | | |
$ | 9.65 | | |
9/17/2030 |
| | |
(12) | |
| 22,626 | | |
| — | | |
$ | 5.93 | | |
9/30/2031 |
| | |
(13) | |
| 44,600 | | |
| 29,734 | | |
$ | 3.72 | | |
12/30/2031 |
| | |
(14) | |
| — | | |
| 36,550 | | |
$ | 2.99 | | |
1/12/2032 |
| | |
(15) | |
| — | | |
| 518,205 | | |
$ | 0.38 | | |
7/27/2032 |
| | |
| |
| | | |
| | | |
| | | |
|
| Edward P. Jordan | |
(16) | |
| 51,450 | | |
| 33,440 | | |
$ | 9.65 | | |
9/17/2030 |
| | |
(17) | |
| 9,800 | | |
| 19,600 | | |
$ | 3.72 | | |
12/30/2031 |
| | |
(18) | |
| — | | |
| 43,763 | | |
$ | 2.99 | | |
1/12/2032 |
| | |
(19) | |
| — | | |
| 455,010 | | |
$ | 0.38 | | |
7/27/2032 |
| Timothy Morris | |
(20) | |
| 20,000 | | |
| — | | |
$ | 16.90 | | |
1/21/2023 |
| | |
(21) | |
| 17,647 | | |
| — | | |
$ | 3.33 | | |
1/21/2023 |
| | |
(22) | |
| 143,175 | | |
| — | | |
$ | 3.33 | | |
1/21/2023 |
| | |
(23) | |
| 100,879 | | |
| — | | |
$ | 9.65 | | |
1/21/2023 |
| | |
(24) | |
| 12,750 | | |
| — | | |
$ | 3.72 | | |
1/21/2023 |
| (1) | On September 13, 2016, Dr. Durrant
was issued stock options to purchase 208,604 shares of common stock at an exercise price
of $16.90. As of December 31, 2022, the options were fully vested. |
| (2) | On March 9, 2018, Dr. Durrant was
issued stock options to purchase 1,493,349 shares of common stock at an exercise price of
$3.33, of which 30,000 have since been exercised. As of December 31, 2022, all of these options
were fully vested. |
| (3) | On January 25, 2019, Dr. Durrant
was issued stock options to purchase 28,571 shares of common stock at an exercise price of
$4.20 in lieu of cash in respect of 50% of Dr. Durrant’s 2018 bonus. These options
were fully vested on the grant date. |
| (4) | On January 28, 2020, Dr. Durrant
was issued stock options to purchase 63,620 shares of common stock at an exercise price of
$2.00. These stock options were granted in lieu of a portion of the cash bonus payable to
Dr. Durrant in respect of his services as Chief Executive Officer in 2019. These options
were fully vested on the grant date. |
| (5) | On May 20, 2020, Dr. Durrant was
issued stock options to purchase 50,000 shares of common stock at an exercise price of $4.30.
As of December 31, 2022, these options were fully vested. |
| (6) | On October 5, 2020, Dr. Durrant
was issued stock options to purchase 82,622 shares of common stock at an exercise price of
$12.14. These stock options were granted to Dr. Durrant as part of his fiscal year 2020 bonus
pursuant to our 2020 annual incentive plan. These options were fully vested on the grant
date. |
| (7) | On March 12, 2021, Dr. Durrant
was issued stock options to purchase 652,640 shares of common stock at an exercise price
of $16.07. These stock options vest in 12 ratable quarterly installments commencing June
30, 2021. |
| (8) | On December 31, 2021, Dr. Durrant
was issued stock options to purchase 76,000 shares of common stock at an exercise price of
$3.72. These stock options vest in 12 ratable quarterly installments commencing March 31,
2022. |
| (9) | On January 12, 2022, Dr. Durrant
was issued stock options to purchase 84,385 shares of common stock at an exercise price of
$2.99. These stock options were issued in satisfaction of amounts earned under the Company's
2021 annual incentive plan. Subsequent to December 31, 2022, these stock options vested in
full on January 12, 2023. |
| (10) | On July 27, 2022, Dr. Durrant
was issued stock options to purchase 808,906 shares of common stock at an exercise price
of $0.38. The stock options were issued as part of the Company’s retention plan in
connection with its strategic realignment and vest in two equal installments on the first
and second anniversaries of the grant date, on July 27, 2023 and July 27, 2024, respectively. |
| (11) | On September 18, 2020, Dr. Chappell
was issued stock options to purchase 133,760 shares of common stock at an exercise price
of $9.65. These stock options vest in 12 ratable quarterly installments commencing December
31, 2020. |
| (12) | On September 30, 2021, Dr. Chappell
was issued stock options to purchase 22,626 shares of common stock at an exercise price of
$5.93. These stock options were granted in lieu of Dr. Chappell’s base salary for the
fourth quarter of 2021. The options vested in three ratable installments on each of October
31, 2021, November 30, 2021 and December 31, 2021, and were fully vested as of December 31,
2022. |
| (13) | On December 31, 2021, Dr. Chappell
was issued stock options to purchase 44,600 shares of common stock at an exercise price of
$3.72. These stock options vest in 12 ratable quarterly installments commencing March 31,
2022. |
| (14) | On January 12, 2022, Dr. Chappell
was issued stock options to purchase 36,550 shares of common stock at an exercise price of
$2.99. These stock options were issued in satisfaction of amounts earned under the Company's
2021 annual incentive plan. Subsequent to December 31, 2022, these stock options vested in
full on January 12, 2023. |
| (15) | On July 27, 2022, Dr. Chappell
was issued stock options to purchase 518,205 shares of common stock at an exercise price
of $0.38. The stock options were issued as part of the Company’s retention plan in
connection with its strategic realignment and vest in two equal installments on the first
and second anniversaries of the grant date, on July 27, 2023 and July 27, 2024, respectively. |
| (16) | On September 18, 2020, Mr. Jordan
was issued stock options to purchase 88,200 shares of common stock at an exercise price of
$9.65, of which 14,700 have since been exercised. These stock options vest in 12 ratable
quarterly installments commencing December 31, 2020. |
| (17) | On December 31, 2021, Mr. Jordan
was issued stock options to purchase 29,400 shares of common stock at an exercise price of
$3.72. These stock options vest in 12 ratable quarterly installments commencing March 31,
2022. |
| (18) | On January 12, 2022, Mr. Jordan
was issued stock options to purchase 43,763 shares of common stock at an exercise price of
$2.99. These stock options were issued in satisfaction of amounts earned under the Company's
2021 annual incentive plan. Subsequent to December 31, 2022, these stock options vested in
full on January 12, 2023. |
| (19) | On July 27, 2022, Mr. Jordan was
issued stock options to purchase 455,010 shares of common stock at an exercise price of $0.38.
The stock options were issued as part of the Company’s retention plan in connection
with its strategic realignment and vest in two equal installments on the first and second
anniversaries of the grant date, on July 27, 2023 and July 27, 2024, respectively. |
| (20) | On September 13, 2016, Mr. Morris
was issued stock options to purchase 20,000 shares of common stock at an exercise price of
$16.90. As of December 31, 2022, these options were fully vested. The 20,000 vested options
remained unexercised and were forfeited in January 2023 following Mr. Morris’s resignation. |
| (21) | On March 9, 2018, Mr. Morris was
issued stock options to purchase 17,647 shares of common stock at an exercise price of $3.33.
These stock options were granted in lieu of 50% of the cash compensation payable to Mr. Morris
in respect of his services as a director during 2017. These options were fully vested on
the grant date. The 17,647 vested options remained unexercised and were forfeited in
January 2023 following Mr. Morris’s resignation. |
| (22) | On March 9, 2018, Mr. Morris was
issued stock options to purchase 143,175 shares of common stock at an exercise price of $3.33.
As of December 31, 2021, the options were fully vested. The 143,175 vested options remained
unexercised and were forfeited in January 2023 following Mr. Morris’s resignation. |
| (23) | On September 18, 2020, Mr. Morris
was issued stock options to purchase 151,316 shares of common stock at an exercise price
of $9.65, of which 50,437 were cancelled upon his resignation in October 2022. These stock
options vested in 12 ratable quarterly installments commencing December 31, 2020. The 100,879
vested options remained unexercised and were forfeited in January 2023 following Mr. Morris’s
resignation. |
| (24) | On December 31, 2021, Mr. Morris
was issued stock options to purchase 51,000 shares of common stock at an exercise price of
$3.72, of which 38,250 were cancelled upon his resignation in October 2022. These stock options
vest in 12 ratable quarterly installments commencing March 31, 2022. The 12,750 vested options
remained unexercised and were forfeited in January 2023 following Mr. Morris’s resignation. |
Retirement Benefits
We have established a 401(k)
tax-deferred savings plan (the “401(k) Plan”), which permits participants, including our named executive officers, to make
contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code. We are responsible for administrative costs
of the 401(k) Plan. We may, in our discretion, make matching contributions to the 401(k) Plan. We contributed a total of $24,000 in matching
contributions to the 401(k) Plan for the year ended December 31, 2022.
Employment Arrangements
Dr. Durrant
On October 29, 2020, the Company entered
into an amended and restated employment agreement (the “Durrant 2020 Agreement”) with Dr. Durrant, replacing Dr. Durrant’s
previous employment agreement with the Company (the “Durrant 2016 Agreement”). Consistent with the terms of the Durrant 2016
Agreement, the Durrant 2020 Agreement provides that Dr. Durrant’s initial annual base salary will remain at $600,000 and he will
remain eligible for an annual bonus targeted at 60% of his base salary, with Dr. Durrant’s base salary and target bonus subject
to review by the compensation committee and the Board in connection with its regular review of the Company’s executive compensation
program. Based on a review of Dr. Durrant’s base salary for 2021 in accordance with the terms of the Durrant 2020 Agreement, the
compensation committee recommended, and the Board approved, an increase in Dr. Durrant’s annual base salary to $640,000, effective
January 1, 2021.
The Durrant 2020 Agreement provided
for a term ending December 31, 2021, with such term extending automatically for successive one-year terms thereafter unless either Dr.
Durrant or the Company gives six months prior notice of non-renewal.
Under the Durrant 2020 Agreement, Dr.
Durrant is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates
Dr. Durrant’s employment for any reason other than “Cause”, or if Dr. Durrant resigns for “Good Reason”
(each as such term is defined in the Durrant 2020 Agreement), Dr. Durrant will receive a lump sum payment equal to the sum of (i) his
then-current annual salary and (ii) the amount of the annual bonus earned by Dr. Durrant for the year prior to the year of termination.
In addition, upon such a resignation or termination, Dr. Durrant will also be entitled to be reimbursed for certain monthly health plan
continuation premiums for up to 12 months, and all outstanding stock options held by Dr. Durrant will immediately vest and become exercisable.
The Durrant 2020 Agreement additionally
provides that if Dr. Durrant resigns for Good Reason or the Company terminates his employment other than for Cause within the three-month
period prior to or the two year period following a change in control (as such term is defined in the Durrant 2020 Agreement), the Company
must pay or cause its successor to pay Dr. Durrant a lump sum cash payment equal to two times (a) his annual salary plus (b) the aggregate
bonus received by Dr. Durrant for the year immediately preceding the change in control. In addition, upon such a resignation or termination,
Dr. Durrant will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 18 months, and all
outstanding stock options held by Dr. Durrant will immediately vest and become exercisable.
Dr. Chappell
The Company entered into an employment
agreement with Dr. Chappell in connection with his appointment as Chief Scientific Officer (the “Chappell Agreement”). The
Chappell Agreement provides for an initial annual base salary for Dr. Chappell of $410,000 as well as eligibility for an annual bonus
targeted at 40% of his base salary. Dr. Chappell is entitled to participate in certain of the Company’s benefit plans available
to other executives.
Under the Chappell Agreement, Dr. Chappell
is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Dr. Chappell’s
employment for any reason other than “Cause”, or if Dr. Chappell resigns for “Good Reason” (each as such term
is defined in the Chappell Agreement), Dr. Chappell will receive his annual salary and the amount of the actual bonus earned by Dr. Chappell
under the Chappell Agreement for the year prior to the year of termination, pro-rated based on the portion of the year Dr. Chappell was
employed by the Company during the year of termination, or if no bonus had been received, 50% of his target bonus. In addition, upon
such a resignation or termination, Dr. Chappell will also be entitled to be reimbursed for certain monthly health plan continuation premiums
for up to 12 months.
The Chappell Agreement additionally
provides that if Dr. Chappell resigns for Good Reason or the Company terminates his employment other than for Cause within the three-month
period prior to or the two year period following a change in control (as such term is defined in the Chappell Agreement), the Company
must pay or cause its successor to pay Dr. Chappell a lump sum cash payment equal to (a) his annual salary plus (b) the aggregate bonus
received by Dr. Chappell for the year immediately preceding the change in control or, if no bonus had been received, 50% of the target
bonus. In addition, upon such a resignation or termination, Dr. Chappell will also be entitled to be reimbursed for certain monthly health
plan continuation premiums for up to 18 months, and all outstanding stock options held by Dr. Chappell will immediately vest and become
exercisable.
Pursuant to the terms of the Chappell
Agreement, in connection with his appointment as Chief Scientific Officer, in September 2020, Dr. Chappell was issued stock options to
purchase 133,760 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments
commencing December 31, 2020.
Mr. Jordan
The Company entered into an employment
agreement with Mr. Jordan in connection with his appointment as Chief Commercial Officer (the “Jordan Agreement”). The Jordan
Agreement provides for an initial annual base salary for Mr. Jordan of $360,000 as well as eligibility for an annual bonus targeted at
40% of his base salary. Mr. Jordan is entitled to participate in certain of the Company’s benefit plans available to other executives.
Under the Jordan Agreement, Mr. Jordan
is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Mr. Jordan’s
employment for any reason other than “Cause”, or if Mr. Jordan resigns for “Good Reason” (each as such term is
defined in the Jordan Agreement), Mr. Jordan will receive his annual salary and the amount of the actual bonus earned by Mr. Jordan under
the Jordan Agreement for the year prior to the year of termination, pro-rated based on the portion of the year Mr. Jordan was employed
by the Company during the year of termination, or if no bonus had been received, 50% of his target bonus. In addition, upon such a resignation
or termination, Mr. Jordan will also be entitled to be reimbursed for certain monthly health plan continuation premiums for up to 12
months.
The Jordan Agreement additionally provides
that if Mr. Jordan resigns for Good Reason or the Company terminates his employment other than for Cause within the three-month period
prior to or the two year period following a change in control (as such term is defined in the Jordan Agreement), the Company must pay
or cause its successor to pay Mr. Jordan a lump sum cash payment equal to (a) his annual salary plus (b) the aggregate bonus received
by Mr. Jordan for the year immediately preceding the change in control or, if no bonus had been received, 50% of the target bonus. In
addition, upon such a resignation or termination, Mr. Jordan will also be entitled to be reimbursed for certain monthly health plan continuation
premiums for up to 18 months, and all outstanding stock options held by Mr. Jordan will immediately vest and become exercisable.
Pursuant to the terms of the Jordan
Agreement, in connection with his appointment as Chief Commercial Officer, in September 2020, Mr. Jordan was issued stock options to
purchase 88,200 shares of common stock at an exercise price of $9.65. These stock options vest in 12 ratable quarterly installments commencing
December 31, 2020.
Mr. Morris
The Company entered into an employment
agreement with Mr. Morris in connection with his appointment as our Chief Operating and Financial Officer (the “Morris Agreement”).
The Morris Agreement provided for an initial annual base salary for Mr. Morris of $475,000 as well as eligibility for an annual bonus
targeted at 50% of his base salary. In addition, Mr. Morris was entitled to participate in certain of the Company’s benefit plans
available to other executives.
On September 23, 2022, Mr. Morris informed
the Company of his resignation from his position as Chief Operating and Financial Officer of the Company, effective October 23, 2022.
Mr. Morris resigned without “Good Reason” (as defined in the Morris Agreement), and as a consequence, did not receive any
payments or benefits in connection with his termination of employment. In addition, Mr. Morris’s unvested stock options were forfeited
on October 23, 2022, and all vested but unexercised stock options expired in January 2023.
Director Compensation
Pursuant to our Director Compensation
Program, each member serving on our Board during 2022 who was not our employee was eligible to compensation for his or her service. Director
retainer fees are payable, at the option of the director, in either cash, common stock or immediately exercisable stock options having
a grant date fair value equal to the equivalent cash compensation owed. For 2022, the retainer fees for service as a director, committee
member and/or committee chair were as follows:
| ● | Board
of Directors member: $40,000; |
| ● | Audit
committee member: $10,000; |
| ● | Audit
committee chair: $20,000; |
| ● | Compensation
committee member: $6,000; |
| ● | Compensation
committee chair: $12,000; |
| ● | Nominating
and corporate governance committee member: $4,000; and |
| ● | Nominating
and corporate governance committee chair: $8,000. |
In addition, in July 2022, the Board
approved the grant of stock option awards to the Company’s directors, as further described in the table below. These stock options
were granted in recognition of the commitments of the directors in developing and overseeing the Company’s strategic realignment
plan. These stock options have an exercise price of $0.38 and will vest pursuant to their terms in two equal tranches on the first and
second anniversaries of the grant date.
The following table shows for the fiscal
year ended December 31, 2022 certain information with respect to the compensation of our non-employee directors. Neither Dr. Durrant
nor Dr. Chappell, both named executive officers for 2022, received any additional compensation for services provided as a director, and
accordingly compensation information in respect of each of them has been omitted from the table that follows.
| | |
| | |
Option | | |
| |
| | |
Fees Earned or Paid in Cash | | |
Awards | | |
Total | |
| Name | |
($)(1) | | |
($)(2) | | |
($) | |
| Ronald Barliant, JD(3) | |
| 44,000 | | |
| 17,601 | | |
| 61,601 | |
| Rainer Boehm, M.D., MBA (4) | |
| 58,000 | | |
| 23,202 | | |
| 81,202 | |
| Cheryl Buxton, MA (5) | |
| 62,000 | | |
| 24,802 | | |
| 86,802 | |
| John Hohneker, M.D. (6) | |
| 50,000 | | |
| 20,001 | | |
| 70,001 | |
| Kevin Xie, Ph.D. (7) | |
| 66,000 | | |
| 26,402 | | |
| 92,402 | |
| (1) | The amounts in this column reflect
retainers earned under the Board of Directors Compensation Program for fiscal year 2022. |
| (2) | The amounts in this column represent
the aggregate grant date fair value of option awards granted to each director, computed in
accordance with FASB ASC Topic 718, as further described in Note 8 of the notes to our Consolidated
Financial Statements included in our 2022 Annual Report, which contains a discussion of all
assumptions made by us in determining the grant date fair value of our equity awards. |
| (3) | On July 27, 2022, Mr. Barliant was
issued stock options to purchase 55,612 shares of common stock as part of the Company’s
retention plan in connection with its strategic realignment. As of December 31, 2022, Mr.
Barliant held options to purchase an aggregate of 274,487 shares of common stock, of which
options to purchase 218,875 were vested. |
| (4) | On July 27, 2022, Mr. Boehm was issued
stock options to purchase 73,307 shares of common stock as part of the Company’s retention
plan in connection with its strategic realignment. As of December 31, 2022, Mr. Boehm held
options to purchase an aggregate of 173,874 shares of common stock, of which options to purchase
100,567 were vested. |
| (5) | On July 27, 2022, Ms. Buxton was
issued stock options to purchase 78,362 shares of common stock as part of the Company’s
retention plan in connection with its strategic realignment. As of December 31, 2022, Ms.
Buxton held options to purchase an aggregate of 227,060 shares of common stock, of which
options to purchase 148,698 were vested. |
| (6) | On July 27, 2022, Dr. Hohneker was
issued stock options to purchase 63,195 shares of common stock as part of the Company’s
retention plan in connection with its strategic realignment. As of December 31, 2022, Dr.
Hohneker held options to purchase an aggregate of 109,599 shares of common stock, of which
options to purchase 17,826 were vested. |
| (7) | On July 27, 2022, Dr. Xie was issued
stock options to purchase 83,418 shares of common stock as part of the Company’s retention
plan in connection with its strategic realignment. As of December 31, 2022, Dr. Xie held
options to purchase an aggregate of 130,958 shares of common stock, of which options to purchase
18,962 were vested. |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership Information
The following table presents information
regarding beneficial ownership of our common stock as of April 11, 2023 by:
| ● | each
stockholder or group of stockholders known by us to be the beneficial owner of more than
5% of our common stock; |
| ● | each
of our named executive officers; and |
| ● | all
of our current directors and executive officers as a group. |
Beneficial ownership is determined in
accordance with the rules of the SEC, and thus represents voting or investment power with respect to our securities. Unless otherwise
indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect
to all shares beneficially owned, subject to community property laws where applicable.
Percentage ownership of our common stock
is based on 119,080,135 shares of our common stock outstanding as of April 11, 2023.
Shares of our common stock subject to
options that are currently exercisable or exercisable within 60 days of April 11, 2023 are deemed to be outstanding and to be beneficially
owned by the person holding the options but are not deemed to be outstanding for the purpose of computing the percentage ownership of
any other person. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Humanigen, Inc.,
830 Morris Turnpike, 4th Floor, Short Hills, NJ 07078.
| Name and Address of Beneficial Owner | |
Shares of
Common
Stock
Beneficially
Owned | | |
Percentage
of Shares
Beneficially
Owned | |
| 5% Stockholders | |
| | |
| |
| Entities affiliated with Black Horse Capital LP and Dr. Chappell(1) | |
| 12,323,513 | | |
| 10.3 | % |
| | |
| | | |
| | |
| Named Executive Officers and Directors | |
| | | |
| | |
| Cameron Durrant, M.D., MBA(2) | |
| 2,447,912 | | |
| 2.0 | % |
| Dale Chappell, M.D., MBA(1) (3) | |
| 12,323,513 | | |
| 10.3 | % |
| Edward Jordan (4) | |
| 127,313 | | |
| * | |
| Ronald Barliant, JD(5) | |
| 308,745 | | |
| * | |
| Rainer Boehm, M.D., MBA(6) | |
| 185,553 | | |
| * | |
| Cheryl Buxton(7) | |
| 153,062 | | |
| * | |
| John Hohneker, M.D. (8) | |
| 21,398 | | |
| * | |
| Kevin Xie, Ph.D. (9) | |
| 22,534 | | |
| * | |
| Timothy Morris (10) | |
| — | | |
| * | |
| All current executive officers and directors as a group (8 persons)(1)(11) | |
| 15,660,030 | | |
| 12.8 | % |
_____________
* Represents less than 1%
| (1) | Number of shares based on information
reported on Form 4 filed with the SEC on May 20, 2022, reporting beneficial ownership by
the Black Horse Entities (as defined below), BH Management, and Dale Chappell. According
to the report, Black Horse Capital LP (“BHC”) has sole voting and dispositive
power with respect to 1,075,789 shares, Black Horse Capital Master Fund Ltd. (“BHCMF”)
has shared voting and dispositive power with respect to 2,383,417 shares, Cheval Holdings,
Ltd. (“Cheval” and collectively with BHCMF and BHC, the “Black Horse Entities”)
has shared voting and dispositive power with respect to 8,675,081 shares, BH Management has
sole voting and dispositive power with respect to 9,750,870 shares and Dr. Chappell has shared
voting and dispositive power with respect to 12,242,373 shares. The number of shares reported
for Dr. Chappell also includes options to purchase 189,226 shares of common stock that may
be exercised within 60 days of April 11, 2023. The business address of each of BHC, BHCMF,
BH Management and Dr. Chappell is c/o Opus Equum, Inc. P.O. Box 788, Dolores, Colorado 81323.
The business address of Cheval is P.O. Box 309G, Ugland House, Georgetown, Grand Cayman,
Cayman Islands KY1-1104. Dr. Chappell, who currently serves as our Chief Scientific Officer
and as a director, is the managing member of BH Management and BHC and a director of BHCMF
and Cheval. |
| (2) | Includes options to purchase 2,447,912
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (3) | Includes options to purchase 189,226
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (4) | Includes options to purchase 114,813
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (5) | Includes options to purchase 218,875
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (6) | Includes options to purchase 100,567
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (7) | Includes options to purchase 148,698
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (8) | Includes options to purchase 21,398
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (9) | Includes options to purchase 22,534
shares of common stock that may be exercised within 60 days of April 11, 2023. |
| (10) | Mr. Morris resigned from his position
as Chief Operating and Financial Officer on October 23, 2022. |
| (11) | Includes options to purchase 3,264,023
shares of common stock that may be exercised within 60 days of April 11, 2023. |
Equity Compensation Plan Information
The following table sets forth information
as of December 31, 2022 with respect to shares of common stock that may be issued under our existing equity compensation plans.
| | |
| | |
| | |
Number of | |
| | |
| | |
| | |
Securities | |
| | |
| | |
| | |
Remaining | |
| | |
| | |
| | |
Available for | |
| | |
| | |
| | |
Issuance Under | |
| | |
Number of | | |
Weighted- | | |
Equity | |
| | |
Securities to be | | |
Average | | |
Compensation | |
| | |
Issued Upon | | |
Exercise | | |
Plans (Excluding | |
| | |
Exercise of | | |
Price of | | |
Securities | |
| | |
Outstanding | | |
Outstanding | | |
Reflected in | |
| | |
Options | | |
Options | | |
Column (a)) | |
| Plan Category | |
(a) | | |
(b) | | |
(c) | |
| Equity compensation plans approved by security holders(1) | |
| 5,018,389 | | |
$ | 4.04 | | |
| 1,948,135 | |
| Equity compensation plans not approved by security holders(2) | |
| 2,453,667 | | |
| 4.64 | | |
| — | |
| Total | |
| 7,472,056 | | |
$ | 4.23 | | |
| 1,948,135 | |
| (1) | Represents shares reserved for issuance
under the 2020 Omnibus Incentive Compensation Plan (the “2020 Equity Plan”). |
| (2) | As of December 31, 2022, there were
no shares available for grant under the 2012 Equity Plan. The 2020 Equity Plan has replaced
the 2012 Equity Plan and no further grants will be made under the 2012 Equity Plan. However,
outstanding awards under the 2012 Equity Plan will continue in accordance with the terms
of the 2012 Equity Plan and any award agreement executed in connection with such outstanding
awards. On September 13, 2016 and March 9, 2018, the Board approved an amendment to the 2012
Equity Plan (the “2012 Equity Plan Amendments”) to increase the number of shares
of our common stock available for issuance under the 2012 Equity Plan by 120,000 and 642,000
shares, respectively. The 2012 Equity Plan Amendments were not approved by our stockholders. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
There has not been since January 1,
2021, nor is there currently proposed, any transaction or series of similar transactions to which we were or are to be a party in which
the amount involved exceeds $120,000 and in which any current director, executive officer, holder of more than 5% of our common stock
or any immediate family member of any of the foregoing persons had or will have a direct or indirect material interest other than compensation
arrangements, described under Item 11 titled “Executive Compensation” and indemnification agreements described below.
Indemnification Agreements
We have entered into indemnification
agreements with each of our current directors and officers. These agreements provide for the indemnification of such persons for all
reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that
they are or were serving in such capacity. We believe that these indemnification agreements are necessary to attract and retain qualified
persons as directors and officers. Furthermore, we have obtained director and officer liability insurance to cover liabilities our directors
and officers may incur in connection with their services to us.
Director Independence
We use the definition of “independent”
set forth in Nasdaq listing rules in determining whether a director is independent in the capacity of director. Nasdaq’s independence
criteria include a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various
types of business dealings with us. In addition, as further required by Nasdaq listing rules, our Board has subjectively determined as
to each director whether any relationship exists that, in the opinion of the Board, would interfere with each such person's exercising
independent judgment in carrying out his or her responsibilities as a director. In making these determinations on the independence of
our directors, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances
the Board deemed relevant in determining independence, including the beneficial ownership of our capital stock by each such person.
Consistent with the foregoing independence
criteria, our Board affirmatively determined that all of our current directors, each of whom served throughout 2022, other than Dr. Durrant,
our Chief Executive Officer, and Dr. Chappell, our Chief Scientific Officer, are independent. In addition, each member of the audit,
compensation, and nominating and corporate governance committees meets the applicable independence requirements of the SEC and the Nasdaq
listing rules for service on each committee on which she or he serves.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Independent Registered Public Accounting Firm’s
Fees
The following table represents aggregate fees billed to us for the years ended December 31, 2022 and 2021 by our independent registered accounting firm, HORNE LLP (Ridgeland, Mississippi, PCAOB ID: 171).
| | |
Fiscal Year
Ended December 31, | |
| | |
2022 | | |
2021 | |
| Audit Fees (1) | |
$ | 375,000 | | |
$ | 408,192 | |
| Tax Fees (2) | |
| 16,000 | | |
| 14,000 | |
| Total Fees | |
$ | 391,000 | | |
$ | 422,192 | |
| (1) | Audit fees in 2022 and 2021 include
fees billed or incurred by HORNE LLP for professional services rendered in connection with
the annual audit of our financial statements in 2022, the audit of our financial statements
and internal controls over financial reporting in 2021, and the review of our quarterly reports
on Form 10-Q and consents associated with registration statements and comfort letters associated
with public offerings for each year. |
| (2) | Fees for services consist
of tax compliance, including the preparation and review of federal and state tax returns. |
All fees described above were pre-approved
by the audit committee in accordance with the requirements of Regulation S-X under the Exchange Act.
Pre-Approval Policies and Procedures
The audit committee’s policy is
to pre-approve all audit and permissible non-audit services rendered by our independent registered public accounting firm. The audit
committee can pre-approve specified services in defined categories of audit services, audit-related services and tax services up to specified
amounts, as part of the audit committee’s approval of the scope of the engagement of our independent registered public accounting
firm or on an individual case-by-case basis before our independent registered public accounting firm is engaged to provide a service.
The audit committee has determined that the rendering of tax-related services by our independent registered public accounting firm is
compatible with maintaining the principal accountant’s independence for audit purposes. Our independent registered public accounting
firm has not been engaged to perform any non-audit services other than tax-related services.