| | | | | | | | _________________
(1)Mr. Marchio served as the Company’s Chief Financial Officer during 2022 and 2023 and was also appointed as the Company’s Chief Executive Officer and Secretary, as well as a director and Chairman of the Board, in each case effective as of October 2, 2023. Mr. Marchio succeeded Mr. Sklawer, who since January 31, 2023, was appointed and served as the Company’s President and Chief Executive Officer, and prior to that date, he served as President and Chief Operating Officer. Mr. Sklawer was terminated without cause effective on the Separation Date. Mr. Sklawer succeeded Mr. Brown, the former Chief Executive Officer of the Company, who notified the Company in January 2023 of his decision to retire and resign, effective January 31, 2023.
Effective September 20, 2022, the Board appointed Mr. Chadha, the Company’s then-Chief Research and Development Officer, to the additional position of Chief Operating Officer, resulting in Mr. Chadha holding both positions until September 1, 2023, at which date Mr. Chadha was terminated without cause from the Company.
Mr. McAvoy served as the Company’s General Counsel and Chief Compliance Officer during 2022 until September 2023, when Mr. McAvoy was terminated without cause from the Company.
(2)Relates to retention bonuses that were awarded in 2023, each of which was paid in two equal installments if the applicable executive remained employed by the Company or had not provided notice of intent to resign on and as of June 30, 2023 and December 31, 2023.
(3)These amounts represent the grant date fair value of equity-based awards granted by the Company during the years presented, determined in accordance with FASB ASC Topic 718. For a detailed discussion of our grant date fair value calculation methodology, including assumptions and estimates inherent therein, please refer to Note 7 to the consolidated financial statements contained within this Annual Report.
(4)Consists of cash bonus payments pursuant to pre-established performance objectives.
(5)Includes temporary living expenses provided to Mr. Brown pursuant to his employment or separation agreements in effect during 2022 and 2023 of $5,400 and $36,000, respectively. See “Employment Agreements” section below.
(6)Includes severance expenses and amounts paid for previously accrued but unused time off pursuant to employment agreements or separation agreements in effect during 2022 and 2023. Severance payments were paid in 2023 and 2024 to the following executive officers in the following amounts: Mr. Brown — $21,334; Mr. Sklawer — $441,000; Mr. Chadha — $415,000; and Mr. McAvoy — $262,500. Amounts for previously accrued but unused time off were paid in 2023 and 2024 to the following executive officers in the following amounts: Mr. Brown — $94,843; Mr. Sklawer — $165,375; Mr. Chadha — $45,490; and Mr. McAvoy — $39,038. See “Employment Agreements” section below.
(7)Includes payments for consulting services provided in 2023 by the following executive officers in the following amounts: Mr. Marchio — $251,834; Mr. Brown — $116,419; Mr. Sklawer — $9,775; and Mr. McAvoy — $64,114. See “Employment Agreements” section below for additional details of the consulting agreements.
Outstanding Equity Awards at Year-End
The Company’s equity compensation plans were terminated in December 2023 in conjunction with the Company’s Plan of Dissolution. Therefore, as of December 31, 2023, the Company’s named executive officers had no outstanding stock-based awards under any of the company’s prior equity compensation plans.
Employment Agreements
The Company has entered into employment agreements with each of its named executive officers as described below.
Albert N. Marchio, II
Mr. Marchio provides services on a part-time basis pursuant to a Consulting Agreement between the Company and Danforth Advisors, LLC (Mr. Marchio’s employer), effective December 1, 2020 (the “Marchio Consulting Agreement”). The term of the Marchio Consulting Agreement will continue until such time as either party gives written notice of termination. The Marchio Consulting Agreement provides for compensation for services provided at a rate of $350 per hour, as well as reimbursement of Mr. Marchio’s covered commuting expenses to our Boulder, Colorado location and any other such necessary business expenses.
Robert B. Brown
Employment Agreement
Under the terms of the employment agreement entered into between the Company and Robert B. Brown, Mr. Brown was entitled to an annual base salary of $450,000, subject to adjustment upon annual review by the Board, and was eligible for our benefit programs, vacation benefits, and medical benefits. In addition, Mr. Brown was entitled to a performance bonus of up to 50% of his base salary. Under the employment agreement, Mr. Brown was also eligible for reimbursement of relocation assistance of up to $3,000 a month for living expenses for 36 months (unless subsequently extended), along with up to $75,000 of one-time relocation expenses.
The agreement provided that upon written notice, either party could have terminated the employment arrangement with or without cause, but 15 days’ written notice was required if the agreement was terminated by Mr. Brown. In addition, the agreement provided that if we terminated Mr. Brown’s employment without cause or Mr. Brown terminated his employment for good reason, Mr. Brown would be eligible to receive:
•any unpaid base salary through the effective date of termination;
•any accrued but unpaid vacation;
•any accrued and/or pro-rated but unpaid incentive compensation;
•base salary for a period of 12 months paid in a lump sum; and
•continuation of health benefits under COBRA for 12 months.
The agreement further provided that if we terminated Mr. Brown’s employment without cause or Mr. Brown terminated his employment for good reason within 12 months following a change in control, Mr. Brown would have been eligible to receive:
•any accrued but unpaid personal days;
•fully accelerated vesting of all outstanding unvested options or other equity instruments;
•base salary for a period of 12 months in the form of salary continuation; and
•continuation of health benefits under COBRA for 12 months.
Transition and Release Agreement
Mr. Brown notified the Company in January 2023 of his decision to retire and resign as Chief Executive Officer, effective January 31, 2023. In connection with Mr. Brown’s resignation, on February 1, 2023, we and Mr. Brown entered into a transition and release agreement. Pursuant to the agreement, Mr. Brown received (i) a 2022 performance bonus of $184,343, (ii) a lump sum of $21,334 to reimburse certain future medical, vision, and dental insurance expenses for Mr. Brown and his spouse as part of his transition, (iii) $3,000 to mitigate the cost of terminating Mr. Brown’s apartment lease in Boulder, Colorado, and (iv) a lump sum of $94,843 as payment for previously accrued but unused paid time off as a Company employee. The transition and release agreement also provided that Mr. Brown will not receive any severance benefits pursuant to his former employment agreement, which terminated at the same time as his employment termination and included a release of claims in favor of the Company and customary confidentiality and non-disparagement provisions.
Consulting Agreement
In connection with Mr. Brown’s resignation as Chief Executive Officer, we and Dancing Bear Consulting, LLC, a limited liability company owned by Mr. Brown, entered into a consulting agreement, which became effective as of February 1, 2023, under which Mr. Brown will personally provide consulting and advisory services to the Company. The initial term of the consulting agreement is one year, subject to automatic renewal for additional one-year terms unless either party terminates. The consulting agreement provides for compensation at a fixed rate of $10,000 per month, as well as reimbursement of Mr. Brown’s related business expenses. Mr. Brown will provide consulting and advisory services as requested by the Company. If the consulting agreement had been terminated (i) without cause by the Company or (ii) by Mr. Brown for cause or in the event of our bankruptcy or insolvency, we would have been obligated to pay the remaining compensation that would have been payable
during the initial one-year term. The consulting agreement was terminated by the Company effective January 31, 2024.
Andrew D. Sklawer
Employment Agreement
On February 21, 2023, we entered into an amended and restated employment agreement with Mr. Sklawer, pursuant to which Mr. Sklawer’s annual base salary was $441,000, retroactive to January 1, 2023, subject to increase from time to time, and he was eligible to receive (i) an annual target performance bonus of 50% of his base salary, (ii) equity awards, and (iii) health insurance, retirement, and other benefits.
Upon written notice, either party could have terminated the agreement with or without cause, but 15-days’ written notice was required if the termination was by Mr. Sklawer. Upon Mr. Sklawer’s termination by the Company without cause or Mr. Sklawer’s termination of the agreement for good reason, and subject to his execution of a general release of claims in favor of the Company and its employees, officers and directors, Mr. Sklawer was entitled to receive severance payments equal to (i) 12 months of base salary (18 months if the termination had been within 12 months following a change in control of the Company) and (ii) the cost of health insurance for him and his eligible dependents for a period of 12 months (18 months if the termination had been within 12 months following a change in control of the Company). If Mr. Sklawer’s employment had been terminated by the Company without cause or by him for good reason within 12 months following a change in control of the Company, Mr. Sklawer also would have received an amount equal to 150% of his target performance bonus for the year in which the termination occurred. In addition, upon the termination of Mr. Sklawer’s employment for any reason other than by the Company for cause or due to his disability, all unvested equity awards fully vested, and an exercise period of three years from that accelerated vesting date applied. Subject to certain exceptions, the agreement also prohibited Mr. Sklawer from soliciting our current or former employees and actual or targeted clients and customers during the term of his employment and for one year following his date of termination.
Separation and Release Agreement
We terminated Mr. Sklawer without cause, effective on the Separation Date. In connection with Mr. Sklawer’s separation from the Company, on October 3, 2023, the Company and Mr. Sklawer entered into a separation and release agreement. Pursuant to the separation and release agreement, Mr. Sklawer received a lump sum of (i) $441,000 in severance, which is an amount equal to 12 months of Mr. Sklawer’s base salary in effect as of the Separation Date and (ii) $44,100 in accordance with that certain employee retention bonus agreement, dated as of February 21, 2023, between the Company and Mr. Sklawer. In addition, Mr. Sklawer was paid a lump sum of $165,375 for previously accrued but unused paid time off as a Company employee, and we paid for 12 months of Mr. Sklawer’s health care premiums; however, if we can no longer provide group health insurance for the full 12-month period, we will make a lump sum payment to Mr. Sklawer for the remaining premiums, grossed up by 35% to minimize the impact of any applicable taxes. Finally, all of Mr. Sklawer’s outstanding and unvested equity awards vested in full as of the Separation Date, and an exercise period of three years from that accelerated vesting date applied.
Consulting Agreement
In connection with Mr. Sklawer’s separation from the Company, we and Yonder Partners, LLC, a limited liability company owned by Mr. Sklawer, also entered into a consulting agreement on October 3, 2023, under which Mr. Sklawer will personally provide consulting and advisory services to the Company. The term of the consulting agreement continues until terminated, which either party may do (i) with cause upon 30 calendar days’ prior written notice or (ii) without cause upon 45 calendar days’ prior written notice. The consulting
agreement provides for compensation at a fixed rate of $425 per hour, as well as reimbursement of Mr. Sklawer’s related business expenses.
David R. McAvoy
Employment Agreement
On February 21, 2023, we entered into an amended and restated employment agreement with Mr. McAvoy, pursuant to which Mr. McAvoy’s annual base salary was $350,000, retroactive to January 1, 2023, subject to increase from time to time, and he was eligible to receive (i) an annual target performance bonus of 40% of his base salary, (ii) equity awards, and (iii) health insurance, retirement, and other benefits.
Upon written notice, either party could have terminated the agreement with or without cause, but 15-days’ written notice was required if the termination was by Mr. McAvoy. Upon Mr. McAvoy’s termination by the Company without cause or Mr. McAvoy’s termination of the agreement for good reason, and subject to his execution of a general release of claims in favor of the Company and its employees, officers and directors, Mr. McAvoy was entitled to receive severance payments equal to (i) nine months of base salary (12 months if the termination had been within 12 months following a change in control of the Company) and (ii) the cost of health insurance for him and his eligible dependents for a period of nine months (12 months if the termination had been within 12 months following a change in control of the Company). If Mr. McAvoy’s employment had been terminated by the Company without cause or by him for good reason within 12 months following a change in control of the Company, Mr. McAvoy also would have received an amount equal to 100% of his target performance bonus for the year in which the termination occurred. In addition, upon the termination of Mr. McAvoy’s employment for any reason other than by the Company for cause or due to his disability, all unvested equity awards fully vested, and an exercise period of three years from that accelerated vesting date applied. Subject to certain exceptions, the agreement also prohibited Mr. McAvoy from soliciting our current or former employees and actual or targeted clients and customers during the term of his employment and for one year following his date of termination.
Separation and Release Agreement
We terminated Mr. McAvoy without cause, effective on the Separation Date. In connection with Mr. McAvoy’s separation from the Company, on October 3, 2023, the Company and Mr. McAvoy entered into a separation and release agreement. Pursuant to the separation and release agreement, Mr. McAvoy received or is entitled to receive, (i) $262,500 in severance, which is an amount equal to nine months of Mr. McAvoy’s base salary in effect as of the Separation Date and (ii) $35,000 in accordance with that certain employee retention bonus agreement, dated as of February 21, 2023, between the Company and Mr. McAvoy. In addition, Mr. McAvoy was paid a lump sum of $39,038 for previously accrued but unused paid time off as a Company employee, and we will pay for nine months of Mr. McAvoy’s health care premiums; however, if we can no longer provide group health insurance for the full nine-month period, we will make a lump sum payment to Mr. McAvoy for the remaining premiums, grossed up by 35% to minimize the impact of any applicable taxes. Finally, all of Mr. McAvoy’s outstanding and unvested equity awards vested in full as of the Separation Date, and an exercise period of three years from that accelerated vesting date applied.
Consulting Agreement
In connection with Mr. McAvoy’s separation from the Company, we and McAvoy Law LLC, a limited liability company owned by Mr. McAvoy, also entered into a consulting agreement on October 3, 2023, under which Mr. McAvoy will personally provide consulting and advisory services to the Company. The term of the consulting agreement continues until terminated, which either party may do (i) with cause upon 30 calendar days’ prior written notice or (ii) without cause upon 45 calendar days’ prior written notice. The consulting
agreement provides for compensation at a fixed rate of $425 per hour, as well as reimbursement of Mr. McAvoy’s related business expenses.
Deepak Chadha
Employment Agreement
On February 21, 2023, we entered into an amended and restated employment agreement with Mr. Chadha, pursuant to which Mr. Chadha’s annual base salary was $415,000, retroactive to January 1, 2023, subject to increase from time to time, and he was eligible to receive (i) an annual target performance bonus of 40% of his base salary, (ii) equity awards, and (iii) health insurance, retirement, and other benefits.
Upon written notice, either party could have terminated the agreement with or without cause, but 15-days’ written notice was required if the termination was by Mr. Chadha. Upon Mr. Chadha’s termination by the Company without cause or Mr. Chadha’s termination of the agreement for good reason, and subject to his execution of a general release of claims in favor of the Company and its employees, officers and directors, Mr. Chadha was entitled to receive severance payments equal to (i) 12 months of base salary and (ii) the cost of health insurance for him and his eligible dependents for a period of 12 months. If Mr. Chadha’s employment had been terminated by the Company without cause or by him for good reason within 12 months following a change in control of the Company, Mr. Chadha also would have received an amount equal to 100% of his target performance bonus for the year in which the termination occurred. In addition, upon the termination of Mr. Chadha’s employment for any reason other than by the Company for cause or due to his disability, all unvested equity awards fully vested, and an exercise period of three years from that accelerated vesting date applied. Subject to certain exceptions, the agreement also prohibited Mr. Chadha from soliciting our current or former employees and actual or targeted clients and customers during the term of his employment and for one year following his date of termination.
Separation and Release Agreement
We terminated Mr. Chadha without cause, effective on September 1, 2023. In connection with Mr. Chadha’s separation from the Company, on October 6, 2023, the Company and Mr. Chadha entered into a separation and release agreement. Pursuant to the separation and release agreement, Mr. Chadha received (i) $415,000 in severance, which is an amount equal to 12 months of Mr. Chadha’s base salary in effect as of September 1, 2023 and (ii) $41,500 in accordance with that certain employee retention bonus agreement, dated as of February 21, 2023, between the Company and Mr. Chadha. In addition, Mr. Chadha was paid a lump sum of $45,490 for previously accrued but unused paid time off as a Company employee, and we will pay for 12 months of Mr. Chadha’s health care premiums; however, if we can no longer provide group health insurance for the full nine-month period, we will make a lump sum payment to Mr. Chadha for the remaining premiums, grossed up by 35% to minimize the impact of any applicable taxes. Finally, all of Mr. Chadha’s outstanding and unvested equity awards vested in full as of September 1, 2023, and an exercise period of three years from that accelerated vesting date applied.
Director Compensation
The compensation program for our non-employee directors is intended to fairly compensate them for the time and effort required of a director. The Board takes into consideration the performance of the Company and the director’s role in committee assignments when determining the appropriate level of their compensation.
Director Cash Fees and Equity Awards
The current compensation arrangement for the non-employee directors of the Company, excluding Mr. Marchio, is as follows:
Cash Fees
•Annual cash fee of $44,000
•Additional annual cash fee of $20,000 for the Chairman of the Board
•Choice of an additional $10,000 in cash or 1,500 stock options
•Additional annual cash fee for Committee Chairs as follows:
•Audit Committee: $15,000
•Compensation Committee: $10,000
•Nominating and Corporate Governance Committee: $10,000
•Additional annual cash fee for non-Chair members of the Committees as follows:
•Audit Committee: $7,000
•Compensation Committee: $7,000
•Nominating and Corporate Governance Committee: $7,000
•All cash fees are payable on a quarterly basis
Equity Awards
•Annual Equity Awards
•65,000 stock options, granted on the date of the annual meeting of stockholders each year, beginning in 2022
•Vests 100% after one year of grant date
•New Board Members
•60,000 stock options granted on the date of appointment or election, as applicable, to the Board
•Vests 25% after one year of grant date, with the remainder on a monthly basis over the next three years
Non-employee directors are also reimbursed for any of their business expenses for each meeting attended.
Director Compensation Table
The table below summarizes the compensation paid by the Company to non-employee directors for the year ended December 31, 2023.
| | | | | | | | |
| Name | | Fees Earned or Paid in Cash
($) |
| Reginald Hardy | | 56,667 |
| Gary A. Lyons | | 51,000 |
| Vijay B. Samant | | 57,000 |
| Robert B. Brown | | 25,667 |
| Albert N. Marchio, II | | — |
Retention Agreements
We entered into employee retention bonus agreements, dated as of February 21, 2023, with Messrs. Sklawer, McAvoy and Chadha. Pursuant to the retention agreements, each executive officer was eligible to receive a cash bonus equal to 20% of his base salary in effect as of January 2, 2023, 50% of which (the “First Bonus”) was
earned if such executive officer remained employed by the Company through 11:59 p.m. MT on June 30, 2023 (the “First Bonus Eligibility Date”) and 50% of which (the “Second Bonus,” and together with the First Bonus, the “Bonuses”) was earned if such executive officer remained employed by the Company through 11:59 p.m. MT on December 31, 2023 (the “Second Bonus Eligibility Date”).
If an executive officer had been terminated without cause, died or become disabled (each, a “Specified Termination”) prior to the First Bonus Eligibility Date, he (or his estate) would have been entitled to receive only the First Bonus. Upon a Specified Termination after the First Bonus Eligibility Date, he (or his estate) was entitled to receive both Bonuses.
The retention agreements were subsequently amended to change the Second Bonus Eligibility Date to the Separation Date.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Securities
The following table sets forth information with respect to the beneficial ownership of our common stock as of March 13, 2024 by:
•our named executive officers;
•each of our directors;
•all of our executive officers and directors as a group; and
•each person or group of affiliated persons known by us to beneficially own more than 5% of our common stock.
The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. Applicable percentage ownership is based on 5,973,306 shares of common stock outstanding as of March 13, 2024. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or other rights held by such person that are currently exercisable or that will become exercisable or otherwise vest within 60 days of
March 13, 2024 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Common Stock | | | Rights to Acquire Shares Within 60 Days of March 13, 2024(1) | | | Total Stock and
Stock-Based
Holdings | | | Percent of Total(2) | |
| 5% or Greater Stockholders | | | | | | | | | | | | |
Exploration Capital Fund, LP(3) Stephen L. Gustin 250 East 200 South, Floor 16 Salt Lake City, UT 84111 | | 1,010,842 | | | — | | | 1,010,842 | | | 16.9% | |
| Named Executive Officers and Directors |
| Albert N. Marchio, II | | — | | | — | | | — | | | * | |
Robert B. Brown(4) | | 7,034 | | | 3,257 | | | 10,291 | | | * | |
Andrew D. Sklawer(4) | | — | | | 357 | | | 357 | | | * | |
David R. McAvoy(4) | | 16,371 | | | 973 | | | 17,344 | | | * | |
Deepak Chadha(4) | | 22,314 | | | 728 | | | 23,042 | | | * | |
| All current directors and executive officers as a group (1 person) | | — | | | — | | | — | | | * | |
_________________
* Less than 1%
(1)Rights to acquire shares within 60 days of March 13, 2024 consist of warrants to purchase our common stock.
(2)Percent of shares beneficially owned by any person is calculated by dividing the number of shares beneficially owned by that person as of March 13, 2024 (including any shares which that person has the right to acquire beneficial ownership of within 60 days of March 13, 2024), by the sum of the total number of shares outstanding as of March 13, 2024, and the number of shares which that person has the right to acquire beneficial ownership of within 60 days of March 13, 2024. Applicable percentages are based on 5,973,306 shares of our common stock outstanding as of March 13, 2024.
(3)Based on a Schedule 13G filed with the SEC on January 17, 2024 and other Forms 3 and 4 filed with the SEC through March 13, 2024, Exploration Capital Fund, LP (the “Partnership”) is the beneficial owner of 927,404 shares of our common stock. Exploration Capital, LLC (“X-Cap”) is the investment manager of the Partnership and as a result may be deemed to be the beneficial owner of all the securities held by the Partnership. Exploration Capital General Partner, LLC (the “GP”) is the general partner of the Partnership and as a result may be deemed to be the beneficial owner of all the securities held by the Partnership. Stephen L. Gustin is the Managing Partner of X-Cap and as a result may be deemed to be the beneficial owner of all the securities held by the Partnership. Mr. Gustin disclaims beneficial ownership of the reported securities held by the Partnership except to the extent of his pecuniary interest. Mr. Gustin also has sole voting and dispositive power over 47,000 shares he directly owns.
(4)These named executive officers were no longer serving as executive officers as of March 13, 2024.
Equity Compensation Plan Information
The Company’s equity compensation plans were terminated in December 2023 in conjunction with the Company’s Plan of Dissolution. Therefore, as of December 31, 2023, the Company had no outstanding, issuable shares under any of the Company’s prior equity compensation plans.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Independence of the Board
Under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Historically, our Board of Directors consulted with our General Counsel and external counsel to ensure that the Board’s determinations were consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of their family members, and us, our senior management and our independent registered public accounting firm, our Board affirmatively determined that former directors Messrs. Lyons and Samant were independent directors within the meaning of the applicable Nasdaq listing standards. Currently, our Board has one member, Mr. Marchio, who is not independent.
On September 18, 2023, in connection with the approval of the Plan of Dissolution and the resignation of each of Messrs. Hardy, Lyons, and Samant from the Board, the Board dissolved the Company’s Audit, Compensation and Nominating and Corporate Governance Committees, effective October 2, 2023.
Certain Relationships and Related-Person Transactions
We have adopted a Related-Person Transactions Policy to monitor transactions in which the Company and any of the following have an interest: a director, executive officer, or other employee or a nominee to become a director of the Company; a security holder known by the Company to be the record or beneficial owner of more than 5% of any class of the Company’s voting securities; an “immediate family member” of any of the foregoing, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such person, and any person (other than a tenant or employee) sharing the household of such person; and any firm, corporation or other entity in which any of the foregoing persons is an executive, partner or principal or holds a similar control position or in which such person directly or indirectly has a 5% or greater equity interest (collectively, “Related Persons”). The policy covers any transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which the Company is, was, or will be a participant in which the amount involved exceeds $120,000 U.S. dollars and in which any Related Person had, has or will have a direct or indirect material interest (“Related-Person Transactions”). Transactions involving compensation for services provided to the Company as an employee, consultant, or director are not considered Related-Person Transactions under this policy.
Under this policy, any proposed transaction that has been identified as a Related Person Transaction may be consummated or materially amended only following approval by the Audit Committee or the Board in accordance with the provisions of this policy. In the event that it is inappropriate for the Audit Committee or the Board to review the transaction for reasons of conflict of interest or otherwise, after taking into account possible recusals by Audit Committee or Board members, then the Related Person Transaction shall be reviewed and decided upon by another independent member of the Board. Subsequent to the dissolution of the Compensation Committee effective October 2, 2023, the Board is responsible for reviewing and approving Related Person Transactions.
There were no Related-Person Transactions in 2022 or 2023.
Executive Compensation and Employment Arrangements
Information on compensation arrangements with the Company’s executive officers is described in detail in section Item 11. “Executive Compensation.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees of Principal Accounting Firm
The following table sets forth fees billed for professional audit services and other services rendered to the Company by Ernst & Young and its affiliates for the following fiscal years ended December 31:
| | | | | | | | | | | | | | |
| | Year Ended
December 31, |
|
| | 2023 | | 2022 |
| Audit Fees | | $ | 292,000 | | | $ | 473,750 | |
| Audit-Related Fees | | — | | — |
| Tax Fees | | — | | — |
| All Other Fees | | — | | — |
| Total | | $ | 292,000 | | $ | 473,750 |
Audit Fees. Audit fees consist of aggregate fees for professional services rendered for the audit of the Company’s annual consolidated financial statements and review of financial statements included in the Company’s Form 10-Q filings, and other services that are normally provided in connection with regulatory filings or engagements.
All fees described above were pre-approved by the Audit Committee of our Board.
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The financial statements required by this item are submitted in a separate section beginning on page 35 of this Annual Report. (a)(2) Financial Statement Schedules
Financial statement schedules have been omitted because they are either not required, not applicable, or the information is otherwise included.
(a)(3) Exhibits
See Exhibit Index, which is incorporated herein by reference.
EXHIBIT INDEX
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Exhibit
Number | | Description of Exhibit | Form | Date of Filing | Exhibit Number | Filed Herewith |
| 2.1 | | | 8-K | 9/19/2023 | 2.1 | |
| 3.1 | | | 8-K | 9/8/2022 | 3.2 | |
| 3.2 | | | 8-K | 9/19/2023 | 3.1 | |
| 4.1 | | | S-8 | 9/10/2019 | 4.1 | |
| | | | | |
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4.2 | | | S-1 | 10/13/2020 | 4.2 | |
4.3 | | | S-1 | 10/13/2020 | 4.4 | |
4.4 | | | S-1/A | 6/17/2020 | 4.4 | |
4.5 | | | S-1/A | 6/17/2020 | 4.2 | |
4.6 | | | 10-K | 3/30/2023 | 4.80 | |
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| 10.1† | | | 8-K | 9/1/2021 | 10.1 | |
| 10.2† | | | 8-K | 2/2/2022 | 10.1 | |
10.3† | | | 8-K | 3/7/2024 | 10.1 | |
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10.4† | | | 8-K | 5/3/2022 | 10.1 | |
10.5† | | | 10-Q | 11/14/2022 | 10.6 | |
10.6† | | | 8-K | 5/3/2022 | 10.2 | |
10.7 | | | 8-K | 7/21/2023 | 10.1 | |
10.8† | | | 8-K | 9/3/2019 | 10.2 | |
10.9† | | | S-1/A | 6/8/2020 | 10.2 | |
10.10† | | Amendment No. 2 to License, Development and Commercialization Agreement, dated October 6, 2017, by and between Brickell Biotech, Inc. and Kaken Pharmaceutical Co., Ltd., including Right of First Negotiation Agreement, as amended, dated October 6, 2017, by and between Brickell Biotech, Inc. and Kaken Pharmaceutical Co., Ltd. | 8-K | 9/3/2019 | 10.3 | |
10.11† | | | S-1/A | 6/8/2020 | 10.4 | |
10.12† | | | S-1/A | 6/8/2020 | 10.5 | |
10.13† | | | S-1 | 10/13/2020 | 10.6 | |
10.14† | | | 10-K | 3/9/2021 | 10.7 | |
10.15† | | | 10-Q | 8/12/2021 | 10.4 | |
10.16† | | | 8-K | 2/18/2020 | 10.1 | |
| | | | | | | | | | | | | | | | | | | | |
10.17† | | | 8-K | 2/18/2020 | 10.2 | |
10.18† | | | 8-K | 5/3/2022 | 10.3 | |
10.19† | | | 10-Q | 11/14/2022 | 10.7 | |
10.20 | | | 8-K | 7/21/2023 | 10.2 | |
|
| 10.21 | | | 8-K | 9/3/2019 | 10.10 | |
10.22 | | | 10-Q | 8/12/2021 | 10.1 | |
10.23 | | | 10-K | 3/30/2023 | 10.20 | |
10.24 | | | 10-Q | 5/10/2023 | 10.9 | |
|
10.25+ | | | 10-K | 3/30/2023 | 10.21 | |
10.26+ | | | 8-K | 2/7/2023 | 10.1 | |
10.27 | | | 8-K | 1/27/2023 | 10.1 | |
10.28+ | | | 8-K | 2/24/2023 | 10.1 | |
10.29+ | | | 8-K | 10/10/2023 | 10.1 | |
10.30 | | | 8-K | 10/10/2023 | 10.2 | |
10.31+ | | | 8-K | 11/24/2020 | 10.2 | |
| | | | | | | | | | | | | | | | | | | | |
10.32+ | | | 8-K | 2/24/2023 | 10.2 | |
10.33+ | | | 10-Q | 11/13/2023 | 10.7 | |
10.34+ | | | 10-K | 3/30/2023 | 10.27 | |
10.35+ | | | 10-Q | 11/13/2023 | 10.5 | |
10.36 | | | 10-Q | 11/13/2023 | 10.6 | |
10.37+ | | | 10-K/A | 5/1/2023 | 10.29 | |
10.38+ | | | 8-K | 2/24/2023 | 10.3 | |
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| 21.1 | | | | | | × |
| | | | | |
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| 31.1 | | | | | | × |
| | | | | |
| 32.1* | | | | | | × |
| 101.INS | | Inline XBRL Instance Document | | | | × |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | | | × |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | | × |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | | | × |
| 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document | | | | × |
| | | | | | | | | | | | | | | | | | | | |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | | × |
| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | | | | × |
__________________
| | | | | |
| + | Indicates a management contract or compensatory plan. |
|
| † | Certain confidential information contained in this agreement has been omitted because it is both not material and is the type that the registrant treats as private or confidential. |
| * | This certification is being furnished pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Exchange Act and is not to be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof. |
|
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | | | | |
| | Fresh Tracks Therapeutics, Inc. |
| | | | |
| Date: March 15, 2024 | | By: | | /s/ Albert N. Marchio, II |
| | | | Albert N. Marchio, II Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
| | | | |
| | |
| | |
| | |
| | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
| /s/ Albert N. Marchio, II | | Chairman of the Board Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) | | March 15, 2024 |
| Albert N. Marchio, II | | |
| | | | |
| /s/ Aaron Fox-Collis | | VP of Finance and Chief Accounting Officer
(Principal Accounting Officer) | | March 15, 2024 |
| Aaron Fox-Collis | | |
| | | | |
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