UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
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by the Registrant ☒
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Preliminary
Information Statement
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☒ Definitive
Information Statement
MONOPAR
THERAPEUTICS INC.
(Name
of Registrant as Specified In Its Charter)
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statement number, or the Form or Schedule and the date of its
filing.
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Registration Statement No.:
Date
Filed:
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 27, 2019
at 10:00am Central Time
Dear
Stockholder:
You are cordially invited to attend the Annual
Meeting of Stockholders of Monopar Therapeutics Inc., a Delaware
corporation (the “Company”),
which will be held on June 27, 2019, at 10:00am Central Time
at the Company’s
headquarters at 1000 Skokie Blvd., Wilmette, IL 60091 (the
“Annual
Meeting”). Only
stockholders who held stock at the close of business on the record
date, May 15, 2019, may vote at the Annual Meeting, including any
adjournment or postponement thereof.
At the Annual Meeting, you will be asked to
consider and vote upon: (1) the election of six
directors named herein to our Board of Directors to serve until our
next annual meeting of stockholders or until their respective
successors are duly elected and qualified; and (2) the ratification of the selection of
BPM LLP as our independent registered public accounting firm for
the year ending December 31, 2019. No other items of business
are expected to be considered, and no other director nominees will
be entertained, at the Annual Meeting.
The
accompanying Information Statement more fully describes the details
of the business to be conducted at the Annual Meeting. Proposal
No. 1 relates solely to the election of the six directors
nominated by the Board of Directors. Proposal No. 2 relates to the
ratification of the selection of BPM LLP as our independent
registered public accounting firm for the year ending December 31,
2019. After careful consideration, our Board of Directors has
unanimously approved the proposals and recommends that you vote FOR
each of the six director nominees and FOR the ratification of the
selection of BPM LLP. In accordance with Delaware law, a list of
stockholders entitled to vote at the Annual Meeting will be
accessible during normal business hours for ten days prior to the
meeting at our corporate headquarters at 1000 Skokie Blvd., Suite
350, Wilmette, IL 60091.
We are pleased to make use of the U.S. Securities
and Exchange Commission (“SEC”) rules that allow
companies to furnish information statements to their stockholders
via the Internet. We believe the ability to deliver materials
electronically allows us to provide our stockholders with the
information they need, while lowering the costs of delivery and
reducing the environmental impact from the distribution of our
Annual Meeting materials. The Information Statement and Annual
Report on Form 10-K are available at www.monopartx.com
in the “Annual Meeting”
subsection of the “Investors” tab. You may contact us
toll free at (888) 517-6366 or by email at info@monopartx.com in
order to obtain directions to be able to attend the meeting and
vote in person on the Proposals set forth in this Information
Statement, or to request that a copy of the Information Statement
and Annual Report be provided to you by paper or electronic mail.
If you do not request that a copy of our Annual Meeting materials
be sent to you prior to June 13, 2019, you will not receive a copy.
We look forward to speaking with you at the Annual
Meeting.
Sincerely,
/s/
Chandler D. Robinson
Chandler
D. Robinson, MD MBA MSc
Chief
Executive Officer and Director
May
17, 2019
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 27,
2019:
The Information Statement and Annual Report on Form 10-K for the
year ended December 31, 2018 are available at monopartx.com in
the “Annual Meeting” subsection of the
“Investors” tab.
TABLE
OF CONTENTS
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MONOPAR
THERAPEUTICS INC.
1000
Skokie Blvd., Suite 350
Wilmette,
IL 60091
INFORMATION
STATEMENT FOR
2019
ANNUAL MEETING OF STOCKHOLDERS
To
Be Held on June 27, 2019 at 10:00am Central Time
at
Monopar Therapeutics Inc.
1000
Skokie Blvd.
Wilmette,
IL 60091
This
Information Statement is furnished in connection with Monopar
Therapeutics Inc.’s (“Monopar” or the
“Company”) 2019 Annual Meeting of Stockholders, to be
held on June 27, 2019, at 10:00am Central Time (the “Annual
Meeting”) at the Company’s headquarters located at 1000
Skokie Blvd., Wilmette, IL 60091. The Notice regarding the
Availability of Materials for the Annual Meeting of Stockholders
(the “Notice”) containing instructions on how to access
this Information Statement and our Annual Report on Form 10-K for
the year ended December 31, 2018 (the “Annual Report”)
is first being mailed on or about May 17, 2019 to all stockholders
entitled to vote at the Annual Meeting. Pursuant to the rules
promulgated by the SEC, we have elected to provide access to our
Information Statement primarily by notifying you of the
availability of our materials on the Internet, instead of mailing
printed copies of those materials to stockholders. The Information
Statement and Annual Report on Form 10-K are available at
www.monopartx.com in
the “Annual Meeting” subsection of the
“Investors” tab. We will pay all of the costs of
distributing this Information Statement.
The
Notice instructs you as to how you may access and review important
information contained in this Information Statement. If you receive
a Notice by mail and would like to receive a printed copy of our
Annual Meeting materials, you should follow the instructions for
requesting such materials included in the Notice.
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
Shares Outstanding and Voting Rights
Only
holders of record of our common stock at the close of business on
May 15, 2019 (the “Record Date”), are entitled to
notice of and to vote at the Annual Meeting. On the Record Date,
9,291,420.614 shares of common stock were issued and
outstanding.
Each
share of common stock is entitled to one vote on all matters to be
voted upon at the Annual Meeting. Holders of common stock do not
have the right to cumulative voting in the election of directors.
The presence, in person or by proxy, of the holders of a majority
of the outstanding shares on the Record Date will constitute a
quorum for the transaction of business at our Annual Meeting and
any postponement or adjournment thereof, though the Board of
Directors (the “Board of Directors” or the
“Board”) may fix a new record date for purposes of a
postponed or adjourned meeting.
The
required vote for each of the proposals expected to be acted upon
at the Annual Meeting and the treatment of abstentions under each
proposal are described below:
Proposal No. 1 — Election of directors. Directors are elected
by a plurality of the votes cast, with the six nominees obtaining
the greatest number of affirmative votes being elected as
directors. As a result, abstentions will have no effect on the vote
outcome.
Agreement Regarding Election of Directors
The
limited liability company agreement of TacticGem LLC
(“TacticGem”), the majority stockholder of the Company,
provides that CDR Pharma, LLC, the Manager of TacticGem, is
required to vote TacticGem’s shares of our common stock to
elect Tactic Pharma, LLC’s (“Tactic Pharma”)
nominees to our Board plus one person designated by Gem
Pharmaceuticals, LLC (“Gem”). Because TacticGem is the
controlling stockholder, no additional stockholder votes are
required in order to elect the director nominees. The Gem board
nomination right terminates at such time as we achieve a listing on
a national stock exchange (e.g. Nasdaq, the NYSE or similar
national stock exchange). Gem’s designee for election to our
Board for a second term is Arthur J. Klausner, former chief
executive officer of Gem.
Proposal No. 2 — Ratification of the Audit Committee’s
selection of the independent registered public accounting firm.
This proposal must be approved by a majority of the votes cast on
the proposal (meaning the number of shares voted “for”
this proposal must exceed the number of shares voted
“against” such proposal). As a result, abstentions will
have no effect on the vote outcome.
PROPOSAL NO. 1 – ELECTION OF
DIRECTORS
Nomination
of Directors
Your
vote is requested in favor of six nominees named herein to our
Board of Directors to serve until the next annual meeting of
stockholders or until their successors are duly elected and
qualified. Each of the nominees is currently a director of the
Company, and each nominee's term expires at this annual meeting or
when his or her successor is duly elected and
qualified.
Our
Amended and Restated Bylaws provide that the number of directors
shall be fixed by the affirmative vote of the holders of a majority
or more of the voting power of the Company. Our Board of Directors
is currently fixed at six members. .
Directors typically
are elected for a period of one year and thereafter serve until the
next annual meeting at which their successors are duly elected by
our stockholders, or until his or her successor is duly elected and
qualified. Each nominee for election has agreed to serve if
elected, and we have no reason to believe that any nominee will be
unavailable to serve.
The
following table sets forth the name, age and positions of each of
our director nominees as of the date of this Information Statement.
Each of the nominees listed below is currently a director of
Monopar and has been elected to serve until our next annual meeting
of stockholders or until their respective successors are duly
elected and qualified.
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Positions
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Director Since
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Christopher M.
Starr, Ph.D.
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66
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Executive Chairman,
Director, Member of Plan Administrator Committee
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December
2014
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Chandler D.
Robinson, MD MBA MSc
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35
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Chief Executive
Officer, Director
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December
2014
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Andrew P. Mazar,
Ph.D.
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57
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Executive Vice
President of Research and
Development, Chief
Scientific Officer, Director
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December
2014
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Michael J. Brown,
MSc
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60
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Director, Member of
the Audit Committee, Member of the Compensation Committee, Member
of the Corporate Governance & Nominating Committee, Member of
Plan Administrator Committee
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December
2014
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Raymond W.
Anderson, MBA
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77
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Director, Chair of
the Audit Committee, Chair of the Compensation Committee, Member of
the Corporate Governance & Nominating Committee, Member of Plan
Administrator Committee
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April
2017
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Arthur J. Klausner,
MBA
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59
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Director, Chair of
the Corporate Governance and Nominating Committee, Member of the
Audit Committee, Member of the Compensation Committee
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August
2017
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Business Experience and Directorships
The
following describes the background of our directors.
Christopher
M. Starr, PhD - Executive Chairman and Board Member
Dr.
Starr is a co-founder and has been our Executive Chairman and a
Board Member of ours and our predecessor, Monopar Therapeutics,
LLC, since its inception in December 2014. Dr. Starr was the
co-founder and served as the chief executive officer
(“CEO”) at Raptor Pharmaceuticals
(“Raptor”) (Nasdaq: RPTP), since its inception in 2006
through December 2014 and continued to serve Raptor as a member of
its board of directors until Raptor was sold to Horizon Pharma plc
in October 2016. The principal business of Raptor was the
development and commercialization of treatments for rare diseases.
Dr. Starr was also a co-founder of BioMarin Pharmaceutical
(“BioMarin”) (Nasdaq: BMRN) in 1997 where he last
served as Vice President of Research and Development until 2006.
BioMarin is a fully-integrated multinational biopharmaceutical
company. Dr. Starr earned a B.S. from Syracuse University and a
Ph.D. in Biochemistry and Molecular Biology from the State
University of New York Health Science Center, in Syracuse, New
York.
Dr. Starr’s board qualifications include over 25 years of
executive experience in funding and operating biopharma companies,
including public companies in the biopharmaceutical industry. We
believe Dr. Starr’s experience qualifies him to serve as the
executive chairman of our Board.
Chandler
D. Robinson, MD MBA MSc - Chief Executive Officer and Board
Member
Dr.
Robinson is a co-founder and has been our CEO and a Board Member of
ours and our predecessor, Monopar Therapeutics, LLC, since its
inception in December 2014. Since 2010, Dr. Robinson has been, and
continues to be, a manager of Tactic Pharma, which he co-founded
and led as CEO until it became a holding company in April 2014.
Tactic Pharma acquired and developed preclinical and clinical stage
biopharmaceutical compounds. From 2009 to 2010 Dr. Robinson
conducted research at Northwestern University on a drug candidate
currently being developed to treat Wilson’s disease, which
was acquired by Tactic Pharma in 2010 and sold in 2014. Among his
previous experiences, Dr. Robinson in 2008 worked at Onyx
Pharmaceuticals, an oncology biopharmaceutical company, in their
Nexavar marketing division, from 2008 to 2009 as a co-manager of a
healthcare clinic in San Jose CA, from 2004 to present as Founder
and President of an undergraduate research focused non-profit now
in its 15th year, and from 2006 to 2007 as part of a quantitative
internal hedge-fund style team at Bear Stearns investment bank. He
was previously on the board of Wilson Therapeutics (acquired by
Alexion Pharmaceuticals Inc.), a biopharmaceutical company, and is
currently on the board of Northwestern University’s Chemistry
of Life Processes Institute. Dr. Robinson graduated summa cum laude
from Northwestern University, earned a master’s degree in
International Health Policy and Health Economics from the London
School of Economics on a Fulbright Scholarship, an MBA from
Cambridge University on a Gates Scholarship through Bill
Gates’ Trust, and an MD from Stanford
University.
Dr. Robinson’s extensive leadership and management experience
along with his medical and business degrees and his entrepreneurial
and strategic vision and knowledge of Monopar’s product
candidates and operations led to the conclusion that he should
serve as a member of our Board.
Andrew
P. Mazar, PhD – Executive Vice President of Research and
Development, Chief Scientific Officer and Board Member
Dr.
Mazar is a co-founder and has been our Chief Scientific Officer and
a Board Member of ours and our predecessor, Monopar Therapeutics,
LLC, since its inception in December 2014. Dr. Mazar became our
Executive Vice President of Research and Development effective as
of November 1, 2017. Dr. Mazar has founded or co-founded eight
start-up companies to commercialize new drug discoveries, including
Tactic Pharma, formerly a biopharmaceutical company, where he
worked since 2010, and which acquired and developed preclinical and
clinical stage compounds. Dr. Mazar has founded or advised several
start-up companies over the past five years including Tactic
Pharma, Valence Therapeutics (a biopharmaceutical company), Wilson
Therapeutics (a biopharmaceutical company), Panther Biotechnology
(a biopharmaceutical company), Lung Therapeutics Inc. (a
biopharmaceutical company), Actuate Therapeutics (an oncology
biopharmaceutical company), AvidTox (a biopharmaceutical company)
and Tempus (a biopharmaceutical company). Prior to joining Tactic
Pharma in 2010 and the Chemistry of Life Processes Institute at
Northwestern University in 2009, Dr. Mazar was the Chief Scientific
Officer at Attenuon, LLC, a biopharmaceutical company in San Diego
from 2000 to 2009. Dr. Mazar is the previous Chair of the National
Cancer Institute Nanotechnology Alliance Animal Model working group
(2011-2015) and has been a member of the National Heart, Lung and
Blood Institute Scientific Review Board (SRB) for the SMARTT
program since 2011. Dr. Mazar is currently a member of the
editorial board of Clinical Cancer Research and the External
Advisory Board for NewCures at Northwestern University. Dr. Mazar
earned a Ph.D. in biochemistry at the University of Illinois
College of Medicine.
Dr. Mazar’s extensive experience in leadership positions in
the biopharmaceutical industry led to the conclusion that he should
serve as a member of our Board.
Michael
J. Brown, MSc – Board Member
Mr.
Brown has been a Board Member of Monopar and our predecessor,
Monopar Therapeutics, LLC since its inception in December 2014.
Since 1994, Mr. Brown has served as Chairman, and since 1996 as
CEO, of Euronet Worldwide Inc. (“Euronet”) (Nasdaq:
EEFT) which offers payment and transaction processing and
distribution solutions to financial institutions, retailers,
service providers and individual consumers. Mr. Brown has been
President of Euronet since December 2014. Mr. Brown has also served
on the boards of Euronet’s predecessor companies. He has an
M.S. in molecular and cellular biology.
Mr. Brown’s extensive leadership and management experience,
including strategic planning, business development, and financing
strategies led to the conclusion that he should serve as a member
of our Board.
Raymond
W. Anderson, MBA, MS – Board Member
Mr.
Anderson has been a Board Member of Monopar since April 2017. Mr.
Anderson served as a board member and chair of the audit committee
at Raptor, a biopharmaceutical company, from its founding in 2006
to its acquisition in 2016. Mr. Anderson worked at Dow
Pharmaceutical Sciences, Inc., a topical drug formulation company,
from July 2003 until he retired in June 2010. He most recently
served as Dow’s Managing Director from January 2009 to June
2010, and previously served as Dow’s Chief Financial Officer
and Vice President, Finance and Administration. Prior to joining
Dow in 2003, Mr. Anderson was Chief Financial Officer for
Transurgical, Inc., a private medical technology company. Prior to
that, Mr. Anderson served as Chief Operating Officer and Chief
Financial Officer at BioMarin, a biopharmaceutical company, from
June 1998 to January 2002. Mr. Anderson holds an M.B.A. from
Harvard University, an M.S. in administration from George
Washington University and a B.S. in engineering from the U.S.
Military Academy.
Mr. Anderson’s background and experience as a finance
executive in the biopharmaceutical industry and his qualification
as an “audit committee financial expert” under SEC and
Nasdaq rules led to the conclusion that he should serve as a member
of our Board.
Arthur
J. Klausner, MBA – Board Member
Mr.
Klausner has been a Board Member of Monopar since August 2017.
Since 2018 Mr. Klausner has served as President, CEO, and a
Director of the start-up drug development company Goldilocks
Therapeutics, Inc. Mr. Klausner has been a consultant to the
biopharmaceutical industry since 2009. He served as Chief Executive
Officer of Gem from September 2012 until Gem’s drug
development assets were acquired by us in 2017. In addition to his
role at Gem, Mr. Klausner served as CEO of Jade Therapeutics Inc.
(“Jade”) from September 2012 until December 2015.
Jade’s focus was on the development of proprietary,
cross-linked hyaluronic acid formulations for ophthalmic
applications until its March 2016 acquisition by EyeGate
Pharmaceuticals, Inc. (Nasdaq: EYEG). Previously, Mr. Klausner
spent a total of 18 years at the life science venture capital firms
Domain Associates and Pappas Ventures. Mr. Klausner currently
serves on the board of directors of Cennerv Pharma (S) Pte. Ltd.
(Singapore), and on the life science investment review board for
the New York University Innovation Venture Fund. He received his
M.B.A. from the Stanford University Graduate School of Business and
his B.A. in biology from Princeton University.
Mr.
Klausner’s extensive leadership and management experience in
the biopharmaceutical industry led to the conclusion that he should
serve as a member of our Board.
Audit Committee
Our
Board formed an Audit Committee in October 2017 and appointed Mr.
Anderson, Dr. Starr, Mr. Klausner and Mr. Brown to serve as
independent members. Mr. Anderson was appointed to serve as chair
of the Audit Committee. Mr. Anderson is a financial expert as
defined by Nasdaq and the SEC and is an independent board member as
contemplated by Rule 10A-3 under the Exchange Act. Dr. Starr served
on the Audit Committee until August 2018.
The functions of our Audit Committee include, among other duties
and responsibilities:
●
to assist the Board
of Directors in its oversight responsibilities for the integrity of
the Company’s financial statements;
●
to assure the
quality of the accounting and financial reporting processes of the
Company;
●
to assure the
effectiveness of the Company’s internal controls over
financial reporting;
●
to assist with the
Company’s compliance with legal and regulatory
requirements;
●
to review and
discuss with management and the independent registered public
accounting firm the Company’s annual and quarterly SEC
reports including the audit of the annual financial statements and
the reviews of the quarterly financial statements and related
disclosures;
●
to be directly
responsible for the appointment, compensation, retention, and
oversight of the work of the independent registered public
accounting firm and any other independent registered public
accounting firm performing other audit, review, or attest services
for the Company;
●
to review and
discuss with the Company’s management the risk assessment and
risk management policies of the Company;
●
to oversee systems
and procedures for the receipt, retention and resolution of
complaints received by the Company regarding accounting, internal
financial controls or auditing matters and for the confidential and
anonymous submission by Company employees of concerns regarding
potential fraud or questionable financial, accounting, internal
financial controls or auditing matters;
●
to periodically
review and update the financial-related sections of the
Company’s Code of Business Conduct and Ethics and review
programs established to monitor compliance with and to improve
employees’ knowledge of the Code;
●
to review and
approve or disapprove any transaction required to be disclosed
according to SEC regulations between the Company and any related
party and to oversee the Company’s policies and procedures
for judgments as to related party transactions; and
●
to prepare the
Audit Committee’s report required by SEC rules, when such
requirement becomes applicable to the Company.
The
Audit Committee is governed by a written charter adopted by the
Board in May 2018 and updated in December 2018. The Audit Committee
Charter can be found in the Corporate Governance section of the
Investors section of our website at www.monopartx.com. Information
on our website is NOT incorporated by reference in this Information
Statement. The Audit Committee Charter complies with the guidelines
established by Nasdaq.
As
required by its Charter, the Audit Committee conducts a
self-evaluation at least annually. The Audit Committee also
annually reviews and assesses the adequacy of its Charter,
including the Audit Committee’s role and responsibilities,
and recommends any proposed changes to the Board for its
consideration.
Corporate Governance and Nominating Committee
Our
Board formed a Corporate Governance and Nominating
(“CG&N”) Committee in October 2017 and appointed
Mr. Brown, Dr. Starr, Mr. Anderson and Mr. Klausner as independent
members. Mr. Klausner was appointed to serve as the chair of the
CG&N Committee in August 2018. Dr. Starr served on the CG&N
Committee until August 2018.
The functions of our corporate governance and nominating committee
include, among other things:
●
overseeing the
composition of the Board to ensure that qualified individuals
meeting the criteria of applicable rules and regulations serve as
members of the Board and its committees
●
identifying,
reviewing and evaluating individuals qualified to serve on the
Board consistent with criteria approved by the Board as vacancies
arise, and seeking out nominees to enhance the diversity, expertise
and independence of the Board;
●
considering and
assessing the independence of directors, including whether a
majority of the Board continue to be independent from management in
both fact and appearance, as well as within the meaning prescribed
by the listing standards of Nasdaq;
●
recommending to our
Board the persons to be nominated for election as directors and to
each of the Board's committees;
●
considering
proposals appropriately submitted by our stockholders;
●
reviewing and
making recommendations to the Board with respect to management
succession planning;
●
developing and
recommending to the Board corporate governance guidelines;
and
●
overseeing an
annual evaluation of the Board.
The
CG&N Committee is governed by a written charter adopted by the
Board in May 2018. The CG&N Committee Charter can be found in
the Corporate Governance section of the Investors section of our
website at www.monopartx.com. Information on our website is NOT
incorporated by reference in this Information Statement. The
CG&N Committee Charter complies with the guidelines established
by Nasdaq. The Charter of the CG&N Committee grants the
CG&N Committee full access to all of our books, records,
facilities and personnel, as well as authority to obtain, at our
expense, advice and assistance from internal and external legal,
accounting or other advisors and consultants and other external
resources that the CG&N Committee considers necessary or
appropriate in the performance of its duties.
As
required by its Charter, the CG&N Committee conducts a
self-evaluation at least annually. The CG&N Committee also
periodically reviews and assesses the adequacy of its Charter,
including the CG&N Committee’s role and responsibilities,
and recommends any proposed changes to the Board for its
consideration.
Compensation Committee
Our
Board also formed a Compensation Committee in October 2017 and
appointed Mr. Brown, Dr. Starr, Mr. Anderson and Mr. Klausner as
independent members. Mr. Anderson was appointed to serve as the
chair of the Compensation Committee in August 2018. Dr. Starr
served on the Compensation Committee until August
2018.
During the year ended December 31, 2018, the Compensation Committee
did not engage an independent third-party compensation expert. The
functions of our Compensation Committee include, among other
things:
●
annually reviewing
and approving corporate goals and objectives relevant to our CEO's
compensation;
●
determining our
CEO's compensation;
●
reviewing and
approving, or making recommendations to our Board with respect to,
the compensation of our other executive officers;
●
overseeing an
evaluation of our senior executives;
●
overseeing and
administering our equity incentive plans;
●
reviewing and
making recommendations to our Board with respect to director
compensation; and
●
preparing the
annual Compensation Committee report to the extent required by SEC
rules, when such requirement becomes applicable to us.
The
Compensation Committee is governed by a written charter adopted by
the Board in May 2018. The Compensation Committee Charter can be
found in the Corporate Governance section of the Investors section
of our website at www.monopartx.com. Information on our website is
NOT incorporated by reference in this Information Statement. The
Compensation Committee Charter complies with the guidelines
established by Nasdaq.
As
required by its Charter, the Compensation Committee conducts a
self-evaluation at least annually. The Compensation Committee also
periodically reviews and assesses the adequacy of its Charter,
including the Compensation Committee’s role and
responsibilities, and recommends any proposed changes to the Board
for its consideration.
Plan Administrator Committee
Our
Board formed a Plan Administrator Committee in February 2018 and
appointed Dr. Starr, Mr. Brown and Mr. Anderson to serve as
independent members. The Plan Administrator Committee does not have
a charter, but the functions of the Plan Administrator Committee
include, among other things:
●
appointing
individuals responsible for the day-to-day administration of the
Plan including the issuance and routing of stock option grant
agreements based upon Plan Administrator Committee approved grants
and related recordkeeping and accounting functions;
●
pursuant to the
Plan, granting “performance based” and “time
based” options or stock awards to our directors, officers,
employees and consultants;
●
determining the
number of shares of common stock and the type of awards granted
under the Plan to optionees; and
●
determining
restrictions and terms of awards including modifications or
amendments to awards under the Plan.
Compensation Committee Interlocks and Insider
Participation
During
2018, the Compensation Committee consisted of Dr. Starr (until
August 2018), Mr. Anderson, Mr. Brown, and Mr. Klausner. None of
the members of our Compensation Committee has at any time been one
of our officers or employees. None of our executive officers
currently serves, or in the past fiscal year has served, as a
member of the board of directors or compensation committee of any
entity that has one or more executive officers serving on our Board
or Compensation Committee.
Board
and Committee Meetings; Annual Meeting Attendance
In the
year ended December 31, 2018, there were seven meetings of the
Board of Directors and six unanimous written actions by Directors.
There were five Audit Committee meetings and one unanimous written
action by the Audit Committee, one Compensation Committee meeting,
and no Corporate Governance and Nominating Committee meetings in
2018. All Board Members attended at least 75% of the total meetings
of the Board and of the committees on which they served in 2018,
except due to Mr. Brown’s complex schedule, his attendance
was 64%. The Company does not currently have a policy with regard
to Board Members’ attendance at annual meetings of
stockholders.
Independence of the
Board of Directors
We
believe it is important to have independent directors on our Board
who can make decisions without being influenced by personal
interests. Additionally, because one of our goals is to qualify for
listing with Nasdaq, we are following the Nasdaq listing standards,
which requires that a majority of the members of our Board of
Directors must qualify as “independent,” as
affirmatively determined by our Board. Our Board consults with our
counsel to ensure that our Board’s determinations are
consistent with 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 identified
transactions or relationships between each director, or any of his
family members, and us, our senior management and our independent
registered public accounting firm, our Board has affirmatively
determined that the following directors are independent directors
within the meaning of the applicable Nasdaq listing standards: Dr.
Starr, Mr. Brown, Mr. Anderson and Mr. Klausner. In making this
determination, our Board found that none of the directors had a
material or other disqualifying relationship with us. Dr. Robinson,
our President and Chief Executive Officer, is not an independent
director by virtue of his employment relationship with us, and
similarly Dr. Mazar by virtue of his employment relationship with
us is not an independent director.
There are no family relationships among any of our directors or
executive officers.
Vote
Required
Directors are
elected by a plurality of the votes cast, with the six nominees
obtaining the greatest number of affirmative votes being elected as
directors, even if less than a majority. As a result, abstentions
will have no effect on the vote outcome.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" EACH OF THE NOMINEES FOR DIRECTOR.
PROPOSAL NO. 2 – RATIFICATION OF THE SELECTION
OF THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Our
Audit Committee has selected BPM LLP as our independent registered
public accounting firm for the year ending December 31, 2019 and
has further directed that we submit the selection of BPM LLP for
ratification by our stockholders at the Annual
Meeting.
We are
not required to submit the selection of our independent registered
public accounting firm for stockholder approval but are submitting
our selection of BPM LLP for stockholder ratification as a matter
of good corporate governance. If the stockholders do not ratify
this selection, the Audit Committee will reconsider its selection
of BPM LLP. Even if the selection is ratified, our Audit Committee
may direct the appointment of a different independent registered
public accounting firm at any time during the year if the Audit
Committee determines that the change would be in our best
interests.
In
October 2017, the Audit Committee was formed. Thereafter all audit,
audit-related, tax and other services rendered by BPM LLP have been
and will be reviewed, pre-approved and performance monitored by the
Audit Committee. Effective March 19, 2018, the Audit Committee
delegated pre-approval authority to Mr. Anderson, its chair, and to
Mr. Klausner, an Audit Committee member. Pre-approval decisions are
reported by the chair/delegate to the Audit Committee promptly but
not later than the next scheduled Audit Committee
meeting.
In its
review of BPM LLP's services, the Audit Committee considers, among
other factors, the possible impact of the performance of such
services on the independence of BPM LLP. The Audit Committee has
determined that the services performed by BPM LLP for the year
ended December 31, 2018 were compatible with maintaining the
independence of BPM LLP. Additional information concerning the
Audit Committee and its activities can be found in the following
sections of this Information Statement: "Board Committees" and
"Report of the Audit Committee."
BPM LLP
has audited our financial statements since 2015. Representatives of
BPM LLP will be available by telephone at the Annual Meeting, will
have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate stockholders’
questions.
Fees for Independent Registered Public Accounting
Firm
The
following is a summary of the aggregate fees billed or expected to
be billed to us for the audit and other services rendered by BPM
LLP, our independent registered public accounting firm, for the
years ended December 31, 2018 and 2017.
|
|
For
the Year Ended December 31,
|
|
Description
of Services Provided by BPM LLP
|
|
|
|
Audit
Fees: These
services relate to review or audit of our financial
statements.
|
$110,993
|
$83,815
|
|
Audit-Related Fees: These services
relate to assurance and services reasonably related to or
derivative from the performance of the audit or review of our
financial statements.
|
28,510
|
28,325
|
|
Tax Compliance Fees: These services
relate to the preparation of our federal, state and foreign tax
returns and other filings.
|
6,437
|
3,150
|
|
Tax Consulting and Advisory Services:
These services primarily relate to the area of tax strategy and
minimizing our Federal, state, local and foreign taxes.
|
—
|
1,250
|
|
All
Other Fees
|
—
|
—
|
Vote
Required
Ratification of the
selection of the independent registered public accounting firm
requires the affirmative vote of a majority of the votes cast.
Because abstentions are not counted as votes cast for or against
this proposal, they will have no effect on the outcome of the
vote.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO.
2.
REPORT OF THE AUDIT COMMITTEE
The
primary purpose of the Audit Committee is to assist the Board in
its oversight responsibility to the stockholders, potential
stockholders, the investment community and others relating to: (1)
the integrity of the Company’s financial statements; (2) the
quality of the accounting and financial reporting processes of the
Company; (3) the effectiveness of the Company’s internal
control over financial reporting; (4) the Company’s
compliance with legal and regulatory requirements; and (5) the
qualifications, independence, compensation and performance of the
Company’s independent registered public accounting firm BPM
LLP.
In fulfilling its responsibilities for the 2018 financial
statements, the Audit Committee took the following
actions:
●
analyzed, reviewed
and discussed the audited financial statements with management and
BPM LLP;
●
reviewed and
discussed with BPM LLP various communications that they provided to
the Audit Committee, including the matters required to be discussed
by the Public Company Accounting Oversight Board’s
(“PCAOB”) Auditing Standard No. 1301,
Communications with Audit
Committees; and
●
received from and
discussed with BPM LLP their written disclosures and letter
required by PCAOB standards regarding their independence and
further discussed directly with BPM LLP their independence from the
Company.
Based on the review and discussions referred to in the foregoing
paragraphs and other additional procedures, the Audit Committee
recommended to the Board that the audited financial statements be
included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2018 for filing with the
SEC.
Audit
Committee
/s/
Raymond W. Anderson, Chair
/s/
Michael J. Brown
/s/
Arthur J. Klausner
Board Leadership Structure and Risk Oversight
We have
structured our Board in a way that we believe effectively serves
our objectives of corporate governance and management oversight. We
separate the roles of Chief Executive Officer and Executive
Chairman of the Board in recognition of the differences between the
two roles. We believe that the Chief Executive Officer should be
responsible for Monopar’s day-to-day leadership and
performance, while our Executive Chairman of the Board should work
with our Chief Executive Officer and the rest of our Board to help
set our strategic direction and provide guidance to, and oversight
of our Chief Executive Officer. Our Executive Chairman sets the
agenda for Board meetings and presides over them.
Pursuant to our Audit Committee Charter, which was approved by our
Board on March 22, 2018 and amended on December 4, 2018, our Audit
Committee is responsible for the oversight of our risk management
programs, and specifically:
●
Risk assessment and
risk management. The Audit Committee shall review (at least
annually or as needed due to specific circumstances) with the
Company’s management and the independent registered public
accounting firm the Company’s policies, procedures and
current status with respect to risk assessment and risk management
including steps taken by management to monitor, mitigate and manage
risk exposures; and
●
The Audit Committee
review shall also include the Company’s major financial risk
exposures and other major risk exposures as assigned by the Board
to the Audit Committee for oversight. The Audit Committee shall
review with the Company’s senior management our overall
anti-fraud programs and controls. The Audit Committee shall
consider the risk of the Company’s management’s ability
to override the Company’s internal controls.
Director
Compensation for the Year Ended December 31, 2018
The following table sets forth the compensation of our non-employee
Board of Directors during the year ended December 31,
2018.
|
|
|
|
|
|
|
Name
|
|
|
|
|
|
Christopher M.
Starr, Ph.D.
|
105,673
|
109,523
|
—
|
215,196
|
|
Michael J.
Brown
|
45,500
|
109,523
|
—
|
155,023
|
|
Raymond W.
Anderson
|
55,625
|
109,523
|
—
|
165,148
|
|
Arthur J.
Klausner
|
46,125
|
109,523
|
—
|
155,648
|
(1)
Based upon the Black-Scholes valuation model for stock option
compensation expense, Option Awards represent stock options to
purchase up to 26,100 shares of our common stock, awards of which
were granted to each of our non-employee directors on August 28,
2018. The options commenced vesting on October 1, 2018, vested
quarterly over five quarters and were valued at $109,523 for each
individual.
As of
December 31, 2018, our directors held the following number of stock
options:
|
Name
|
Aggregate Number of Shares Subject to Stock Options
|
|
Christopher
M. Starr, Ph.D.
|
194,100
|
|
Michael
J. Brown
|
47,124
|
|
Raymond
W. Anderson
|
47,124
|
|
Arthur
J. Klausner
|
47,124
|
Options Exercised and Stock Vested
None of our executive officers or non-employee directors exercised
any options during the years ended December 31, 2018 and
2017.
Code
of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics that is
applicable to our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions. It also applies to all of our
employees and our non-employee directors. Our Code of Business
Conduct and Ethics is available on our website at www.monopartx.com
and will be provided to any person without charge upon request.
Information on our website is NOT incorporated by reference in this
Information Statement.
Our
current executive officers, their respective ages as of the date of
this Information Statement and positions are set forth in the
following table. Biographical information regarding each executive
officer (other than Dr. Robinson and Dr. Mazar) is set forth
following the table. Biographical information for Dr. Robinson and
Dr. Mazar is set forth above under Proposal No. 1 (Election of
Directors).
|
|
Age
|
|
|
Chandler D.
Robinson, MD MBA MSc
|
35
|
Chief Executive
Officer, Director
|
|
Andrew P. Mazar,
Ph.D.
|
57
|
Executive Vice
President of Research and Development, Chief Scientific Officer,
Director
|
|
Kim R.
Tsuchimoto
|
56
|
Chief Financial
Officer, Secretary and Treasurer
|
|
Patrice Rioux, MD,
Ph.D.
|
68
|
Acting Chief
Medical Officer
|
Kim
R. Tsuchimoto – Chief Financial Officer
Ms.
Tsuchimoto has been our Chief Financial Officer since June 2015.
Ms. Tsuchimoto spent over nine years at Raptor, a biopharmaceutical
company, as its Chief Financial Officer from Raptor’s
inception in May 2006 until September 2012, as Raptor’s Vice
President of International Finance, Tax & Treasury from
September 2012 to February 2015, and lastly as Raptor’s Vice
President, Financial Planning & Analysis and Internal Controls
from February to May 2015. Prior to Raptor, Ms. Tsuchimoto spent
eight years at BioMarin, a biopharmaceutical company, and its
predecessor, Glyko, Inc., where she held the positions of Vice
President-Treasurer, Vice President-Controller and Controller. Ms.
Tsuchimoto received a B.S. in Business Administration from San
Francisco State University. She holds an inactive California
Certified Public Accountant license.
Patrice
Rioux, MD, Ph.D. – Acting Chief Medical Officer
Dr.
Rioux has been our Acting Chief Medical Officer since December
2016. Dr. Rioux has been performing development,
medical/regulatory, and clinical consulting services for us through
his consulting company, pRx Consulting, LLC from June 2004 to the
present. Dr. Rioux received his medical education at Faculté
de Médecine Pitié-Salpetriere, his Ph.D. in Mathematical
Statistics at Faculté des Sciences, and his Degree of
Pharmacology (pharmacokinetics and clinical pharmacology) at
Faculté de Médecine Pitié-Salpetriere.
Summary
Compensation Table
The
following table sets forth for the fiscal years ended December 31,
2018, 2017 and 2016, the compensation of the Company’s Chief
Executive Officer and the Company's two highest compensated
executive officers whose compensation exceeded $100,000 during our
last fiscal year.
|
|
|
|
|
|
All Other Compensation ($)(3)
|
|
|
|
|
|
|
|
|
|
|
Chandler
D. Robinson M.D., Chief Executive Officer and
Director
|
2018
|
375,000
|
—
|
640,928
|
55,000
|
1,070,928
|
|
2017
|
330,545
|
—
|
46
|
70,000
|
400,591
|
|
|
|
300,000
|
—
|
42
|
75,000
|
375,042
|
|
|
|
Andrew P. Mazar, Ph.D.(4),
Executive Vice President of Research and Development and
Chief Scientific Officer and
Director
|
2018
|
350,000
|
—
|
591,592
|
55,000
|
996,592
|
|
2017
|
75,731
|
—
|
46
|
238,750
|
314,527
|
|
|
|
—
|
—
|
42
|
197,500
|
197,542
|
|
|
|
|
|
|
|
|
|
Kim R. Tsuchimoto(5),
Chief Financial
Officer
|
2018
|
125,991
|
—
|
181,046
|
18,000
|
325,037
|
|
2017
|
11,370
|
—
|
13
|
50,000
|
61,383
|
|
|
|
—
|
—
|
11
|
79,500
|
79,511
|
|
|
|
|
|
|
|
|
|
Kirsten B. Anderson(6),
Former Senior Vice President, Clinical
Development
|
2018
|
123,000
|
-
|
-
|
80,618
|
203,618
|
|
2017
|
43,000
|
5,000
|
132,041
|
78,550
|
278,591
|
|
|
|
—
|
—
|
—
|
—
|
—
|
(1) The amounts in this
column represent the aggregate grant date fair value of stock
options awarded during the applicable year to the named executive
officers, computed in accordance with FASB ASC Topic 718. The fair
value of stock options is estimated on the date of grant using the
Black-Scholes option pricing model for employees and on each
remeasurement date for consultants. For a discussion of valuation
assumptions, see Note 4 to our consolidated financial statements
included in our Annual Report on Form 10-K filed on February 26,
2019.
(2) In 2016, each of
Dr. Robinson and Dr. Mazar were granted options to purchase up to
84,000 shares of our common stock and Ms. Tsuchimoto was granted
options to purchase up to 21,000 shares of our common stock as
discussed below in the section “Outstanding Equity Awards at
Fiscal Year End”. Based upon the Black-Scholes valuation
model for stock option compensation expense, the value of Dr.
Robinson’s and Dr. Mazar’s stock options was $42 and
the value of Ms. Tsuchimoto’s stock options was $11. The
options vested 50% on the grant date (April 4, 2016), 25% on the
six-month anniversary of the grant date (October 4, 2016) and 25%
on the one- year anniversary of the grant date (April 3,
2017).
In
2017, each of Dr. Robinson and Dr. Mazar was granted options to
purchase up to 84,000 shares of our common stock and Ms. Tsuchimoto
was granted options to purchase up to 23,520 shares of our common
stock as discussed below in the section “Outstanding Equity
Awards at Fiscal Year End”. Based upon the Black-Scholes
valuation model for stock option compensation expense, the value of
Dr. Robinson’s, Dr. Mazar’s and Ms. Tsuchimoto’s
stock options was $46, $46, and $13, respectively. The options
granted to Dr. Robinson, Dr. Mazar and Ms. Tsuchimoto in 2017
vested 6/48ths on the six-month anniversary of grant date (August
20, 2017) and 1/48th per month thereafter.
In
2018, Dr. Robinson, Dr. Mazar and Ms. Tsuchimoto were granted
options to purchase up to 145,500, 134,300 and 41,000 shares of our
common stock, respectively, as discussed below in the section
“Outstanding Equity Awards at Fiscal Year End”. Based
upon the Black-Scholes valuation model for stock option
compensation expense, the value of Dr. Robinson’s, Dr.
Mazar’s and Ms. Tsuchimoto’s stock options was
$640,928, $591,592, and $181,046, respectively. The options granted
in 2018 to Dr. Robinson, Dr. Mazar and Ms. Tsuchimoto commenced
vesting on October 1, 2018 and vested 6/48ths on the six-month
anniversary of vesting commencement date (March 31, 2019) and
1/48th per month thereafter.
(3) For 2016, All Other
Compensation consisted of the following: for Dr. Robinson, an
employer funded 401(k) in the amount of $53,000 plus $22,000
representing amounts paid in lieu of insurance and other medical
benefits (“Benefits”); for Dr. Mazar $197,500 of
consulting fees earned prior to becoming an employee on November 1,
2017; and for Ms. Tsuchimoto $79,500 of consulting fees earned
prior to becoming an employee on November 1, 2017.
For
2017, All Other Compensation consisted of the following: for Dr.
Robinson, an employer funded 401(k) in the amount of $54,000 plus
$16,000 in lieu of Benefits; for Dr. Mazar $225,000 of consulting
fees earned prior to becoming an employee on November 1, 2017 plus
$13,750 in lieu of Benefits as an employee; and for Ms. Tsuchimoto
$50,000 of consulting fees earned prior to becoming an employee on
November 1, 2017.
For
2018, All Other Compensation consisted of the following: for Dr.
Robinson, Dr. Mazar and Ms. Tsuchimoto in lieu of Benefits of
$55,000, $55,000 and $18,000, respectively.
(4)
Until November 1, 2017,
Dr. Mazar was a consultant acting as chief scientific officer for
$225,000 and $197,500 in consulting fees in 2017 and 2016,
respectively, with no additional compensation for Board Member
services. As of November 1, 2017, Dr. Mazar became employed as our
Executive Vice President of Research and Development, and Chief
Scientific Officer at an annual base salary of $350,000 and an
amount in lieu of benefits of $55,000. A pro rata amount of in lieu
of benefits of $13,750 is included in All Other
Compensation.
(5) Until November 1,
2017, Ms. Tsuchimoto was a consultant acting as chief financial
officer for $50,000 and $79,500 in consulting fees in 2017 and
2016, respectively. As of November 1, 2017, Ms. Tsuchimoto became
employed as our Chief Financial Officer initially at ¼ of
full-time at an annual base salary of $68,750 and as of March 1,
2018, Ms. Tsuchimoto commenced working ½ of full time at an
annual base salary of $137,500 and an amount in lieu of Benefits of
$21,600. In 2018, a pro rata amount of in lieu of Benefits of
$18,000 is included in All Other Compensation.
(6) Until November 1,
2017, Ms. Anderson was a consultant during 2017 providing clinical
development strategy for $78,550 in consulting fees. As of November
1, 2017, Ms. Anderson became employed as our Senior Vice President,
Clinical Development at an annual base salary of $260,000 and a
sign-on bonus of $25,000. On November 1, 2017, Ms. Anderson was
granted options to purchase up to 40,000 shares of our common stock
as discussed below in the section “Outstanding Equity Awards
at Fiscal Year End”. Based upon the Black-Scholes valuation
model for stock option compensation expense, the value of Ms.
Anderson’s stock options was $132,041. The options vested
6/48ths on the six-month anniversary of grant date (May 1, 2018)
and 1/48th per month thereafter. As of June 20, 2018, Ms. Anderson
was no longer with the Company, at which time options to purchase
up to 34,167 shares of our common stock were forfeited and options
to purchase up to 5,833 shares of our common stock expired
unexercised on September 20, 2018. For 2018, All Other Compensation
for Ms. Anderson consisted of the following: $4,818 in lieu of
Benefits from April 1, 2018 to June 20, 2018; $65,000 representing
three months of base salary severance; and $10,800 representing six
months in lieu of Benefits.
In
December 2016, we entered into an employment agreement with Dr.
Robinson for his role as our chief executive officer. Although we
have been paying Dr. Robinson as our employee since January 1,
2016, we did not enter into a formal employment agreement until
December 2016. Dr. Robinson’s employment agreement is for an
indefinite term (for at-will employment). The agreement was amended
and restated on November 1, 2017.
Under
his employment agreement, Dr. Robinson currently receives a
$375,000 per year base salary, which may be adjusted from time to
time in accordance with normal business practice and in our sole
discretion. In addition, Dr. Robinson will be eligible for an
annual performance bonus, of up to 50% of his base salary, based on
achieving goals as determined by our Board and our Compensation
Committee. Until we obtain retirement and healthcare benefits for
our eligible employees and Dr. Robinson elects to opt in to such
benefits, Dr. Robinson is entitled to an additional salary of at
least $4,583.33 per month (or such greater amount as determined by
our Board) in lieu of such benefits. Effective January 1, 2019, the
Board approved a cost of living increase resulting in a new base
salary for Dr. Robinson of $386,250. In March 2019, the Board
awarded to Dr. Robinson a bonus of $7,500 related to 2018
performance.
On
November 1, 2017, we entered into an employment agreement with Dr.
Mazar for his role as our Executive Vice President of Research and
Development and Chief Scientific Officer. Dr. Mazar’s
employment agreement is for an indefinite term (for at-will
employment). Under his employment agreement, Dr. Mazar receives a
$350,000 per year base salary, which may be adjusted from time to
time in accordance with normal business practice and in our sole
discretion. In addition, Dr. Mazar will be eligible for an annual
performance bonus, of up to 40% of his base salary, based on
achieving goals as determined by our Board and our Compensation
Committee. Until we obtain retirement and healthcare benefits for
our eligible employees and Dr. Mazar elects to opt in to such
benefits, Dr. Mazar is entitled to an additional salary of at least
$4,583.33 per month (or such greater amount as determined by our
Board) in lieu of such benefits. Effective January 1, 2019, the
Board approved a cost of living increase resulting in a new base
salary for Dr. Mazar of $360,500. In March 2019, the Board awarded
to Dr. Mazar a bonus of $5,600 related to 2018
performance.
On
November 1, 2017, we entered into an employment agreement with Ms.
Tsuchimoto for her role as our Chief Financial Officer. Ms.
Tsuchimoto’s employment agreement is for an indefinite term
(for at-will employment). The agreement was amended on March 1,
2018. Under her employment agreement, Ms. Tsuchimoto receives a
$137,500 per year base salary to reflect 50% time, which may be
adjusted from time to time in accordance with normal business
practice and in our sole discretion. Ms. Tsuchimoto is entitled to
an additional salary of up to $1,800 per month in lieu of medical,
dental and vision benefits until such time the Company has such
benefit plans in place. In addition, Ms. Tsuchimoto will be
eligible for an annual performance bonus determined by our Board
and our Compensation Committee. Effective January 1, 2019, the
Board approved a cost of living increase resulting in a new base
salary for Ms. Tsuchimoto of $141,625. In March 2019, the Board
awarded to Ms. Tsuchimoto a bonus of $2,200 related to 2018
performance.
On
November 1, 2017, we entered into an employment agreement with Ms.
Anderson for her role as our Senior Vice President of Clinical
Development. Ms. Anderson’s employment agreement was for an
indefinite term (for at-will employment). Under her employment
agreement, Ms. Anderson received a $260,000 per year base salary,
which may be adjusted from time to time in accordance with normal
business practice and in our sole discretion. Ms. Anderson's
employment agreement included a $25,000 sign-on bonus. As of June
20, 2018, Ms. Anderson was no longer with the Company. Pursuant to
Ms. Anderson’s termination agreement, she received a lump sum
representing three months of base salary totaling $65,000 plus six
months of taxable fringe benefits to cover healthcare insurance
totaling $10,800.
Outstanding Equity Awards at December 31,
2018
The
following table sets forth outstanding stock option awards held by
named executive officers as of December 31, 2018. There were no
outstanding stock awards as of December 31, 2018.
|
|
Number
of securities underlying unexercised options (#)
exercisable
|
Number
of securities underlying unexercised options (#)
unexercisable
|
Option exercise price ($)
|
Option expiration date
|
|
Chandler
D. Robinson, M.D., Chief Executive Officer and
Director
|
—(1)
|
145,500(1)
|
$6.00
|
August
27, 2028
|
|
|
38,500(2)
|
45,500(2)
|
$0.001
|
February
19, 2027
|
|
|
84,000(3)
|
—(3)
|
$0.001
|
April
3, 2026
|
|
|
|
|
|
Andrew
P. Mazar, Ph.D., Executive Vice President of Research and
Development and Chief Scientific Officer and
Director
|
—(1)
|
134,300(1)
|
$6.00
|
August
27, 2028
|
|
|
38,500(2)
|
45,500(2)
|
$0.001
|
February
19, 2027
|
|
|
84,000(3)
|
—(3)
|
$0.001
|
April
3, 2026
|
|
|
|
|
|
|
|
|
|
Kim
R. Tsuchimoto, Chief Financial Officer
|
—(1)
|
41,100(1)
|
$6.00
|
August
27, 2028
|
|
|
10,780(2)
|
12,740(2)
|
$0.001
|
February
19, 2027
|
|
|
21,000(3)
|
—(3)
|
$0.001
|
April
3, 2026
|
|
|
|
|
|
|
|
|
|
Kirsten
B. Anderson Former Senior Vice President, Clinical
Development
|
—(4)
|
—(4)
|
N/A
|
N/A
|
(1)
Dr. Robinson, Dr.
Mazar and Ms. Tsuchimoto were granted stock option awards on August
28, 2018 which commenced vesting on October 1, 2018 and vested 6/51
on the six-month anniversary of vesting commencement date (March
31, 2019) and vest 1/51 per month thereafter.
(2)
Dr. Robinson, Dr.
Mazar and Ms. Tsuchimoto were granted stock option awards on
February 20, 2017 which vested 6/48ths on the six-month anniversary
of grant date (August 20, 2017) and 1/48th per month
thereafter.
(3)
Dr. Robinson, Dr.
Mazar and Ms. Tsuchimoto were granted stock option awards on April
4, 2016 which vested 50% on the grant date (April 4, 2016), 25% on
the six-month anniversary of the grant date (October 4, 2016) and
25% on the one-year anniversary of the grant date (April 3,
2017).
(4)
On November 1,
2017, Ms. Anderson was granted options to purchase up to 40,000
shares of our common stock. As of June 20, 2018, Ms. Anderson was
no longer with the Company, at which time options to purchase up to
34,167 shares of our common stock were forfeited and options to
purchase up to 5,833 shares of our common stock expired unexercised
on September 20, 2018.
Potential Payments upon Termination or Change in
Control
Each of
Dr. Robinson’s, Dr. Mazar’s and Ms. Tsuchimoto’s
employment agreements provides that upon execution and
effectiveness of a release of claims, Dr. Robinson, Dr. Mazar and
Ms. Tsuchimoto will be entitled to severance payments if their
employment with us terminates under certain circumstances. If we
terminate their employment without “cause,” or if Dr.
Robinson, Dr. Mazar or Ms. Tsuchimoto resigns for “good
reason,” in each case absent a “change in
control,” Dr. Mazar and Dr. Robinson would receive, (1) base
salary continuation for 12 months, (2) to provide that any equity
awards will continue vesting, (3) payment of or reimbursement for
COBRA continuation coverage until the earlier of 12 months
following termination or the date the executive become eligible for
coverage under an employer’s plan and (4) to the extent
allowed by applicable law and the applicable plan documents,
continue to provide all of our employee benefit plans and
arrangements that the employee was receiving at the time of
termination. Ms. Tsuchimoto would receive, (1) base salary
continuation for 3 months, (2) to provide that any equity awards
will continue vesting, (3) if Ms. Tsuchimoto is full-time, payment
of or reimbursement for COBRA continuation coverage until the
earlier of 12 months following termination or the date the
executive become eligible for coverage under an employer’s
plan and (4) to the extent allowed by applicable law and the
applicable plan documents, continue to provide all of our employee
benefit plans and arrangements that the employee was receiving at
the time of termination. In addition, equity awards held by the
terminated employee, that vest solely on the passage of time, will
be accelerated by 12 months.
If Dr.
Robinson’s or Dr. Mazar’s employment is terminated
without cause or for good reason within 12 months following a
change in control, they would be entitled to (1) a lump sum payment
in an amount equal to 1.5 times his respective base salary plus
target annual bonus for the year in which the termination occurs,
(2) payment of or reimbursement for COBRA continuation coverage
until the earlier of 18 months following termination or the date
the executive becomes eligible for coverage under an
employer’s plan and (3) full vesting acceleration of all
outstanding equity awards. If either of Dr. Mazar’s or Dr.
Robinson’s employment is terminated because of death or
permanent disability, we will be obligated to provide base salary
continuation and COBRA payment or reimbursement for a period of
three months.
If Ms.
Tsuchimoto’s employment is terminated without cause or for
good reason within 12 months following a change in control, she
would be entitled to (1) a lump sum payment in an amount equal to
..25 times her base salary plus target annual bonus for the year in
which the termination occurs, (2) if Ms. Tsuchimoto is full-time,
payment of or reimbursement for COBRA continuation coverage until
the earlier of 3 months following termination or the date the
executive becomes eligible for coverage under an employer’s
plan and (3) full vesting acceleration of all outstanding equity
awards. If Ms. Tsuchimoto’s employment is terminated because
of death or permanent disability, we will be obligated to provide
base salary continuation and COBRA payment or reimbursement for a
period of three months.
Upon any
termination of employment, Dr. Robinson, Dr. Mazar and Ms.
Tsuchimoto are entitled to receive any accrued but unpaid base
salary and any earned but unpaid annual bonus.
The
employment agreements with Dr. Robinson, Dr. Mazar and Ms.
Tsuchimoto provide that, in the event that any payments the
executives received in connection with a change in control of our
Company are subject to the excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, such payments will be
reduced to the greatest amount payable that would not result in no
such tax owed, but only if it is determined that such reduction
would cause the executive to be better off, on a net after-tax
basis, than without such reduction and payment of the excise tax
under Section 4999 of the Code.
In
April 2016, our Board and stockholders holding more than a majority
of our outstanding convertible preferred stock approved the Monopar
Therapeutics Inc. 2016 Stock Incentive Plan (as subsequently
amended, the “Plan”).
Share Reserve
The
Plan originally allowed us to grant up to an aggregate 10,000
shares of stock awards, stock options, stock appreciation rights
and other stock-based awards to employees, non-employee directors
and consultants. In March 2017, at the time of the conversion of
the then outstanding preferred stock to our common stock and a
concurrent 70-for-1 split of our common stock, the Administrator
effected the 70-for-1 stock split for the Plan which increased the
stock option pool from 10,000 to 700,000 and changed the stock
options granted in 2016 and in February 2017 by a 70-for-1 factor.
No other features were changed on the outstanding stock options
granted.
The
Plan was subsequently amended and restated in October 2017, which
was approved by stockholders holding more than a majority of our
outstanding common stock, in order to increase the maximum
aggregate grants under the Plan from 700,000 to 1,600,000 shares of
stock awards, stock options, stock appreciation rights and other
stock-based awards.
Administration
The
Plan provides that the administrator of the Plan will be our Board,
a committee designated by our Board, or an individual designee (the
“Administrator”). On February 28, 2018, our independent
Directors approved the appointment of a committee (the “Plan
Administrator Committee”) consisting of three independent,
non-employee Directors (Dr. Starr, Mr. Brown, and Mr. Anderson) to
serve as the Administrator of the Plan. The Plan Administrator
Committee will require a quorum of at least two of the three
members on all decisions. The Administrator has exclusive
authority, consistent with laws and the terms of the Plan, to
designate recipients of options to be granted thereunder and to
determine the number and type of options and the number of shares
subject thereto. Prior to the formation of the Plan Administrator
Committee, Mr. Brown was the Board-representative Administrator of
the Plan.
Eligibility
Under the Plan, awards may be granted only to our directors,
employees and consultants or any of our affiliates; provided,
however, that Incentive Stock Options may be granted only to our
employees and employees of our subsidiaries (within the meaning of
Section 424(f) of the Code).
Under
the Plan, the per share exercise price for the shares to be issued
upon exercise of an option is to be determined by the Plan
administrator, except that the per share exercise price may be no
less than 100% of the fair market value per share on the grant
date. Fair market value is established by our Board, using third
party valuation reports and recent financings. Stock options
generally expire after ten years.
Options
The per
share exercise price for the shares to be issued upon exercise of
an option shall be determined by the Administrator, except that the
per share exercise price shall be no less than 100% of the fair
market value per share on the grant date, except with respect to
conversion awards. Subject to Section 15 of the Plan, the exercise
price of an option may not be reduced without shareholder approval,
nor may outstanding options be cancelled in exchange for cash,
other awards or options with an exercise price that is less than
the exercise price of the original option without shareholder
approval. Options granted under the Plan shall vest and/or be
exercisable at such time and in such installments during the period
prior to the expiration of the option’s term as determined by
the Administrator and as specified in the option agreement. The
Administrator shall have the right to make the timing of the
ability to exercise any option granted under this Plan subject to
continued active employment (or retention in the case of a
consultant or director), the passage of time and/or such
performance requirements as deemed appropriate by the
Administrator. At any time after the grant of an option, the
Administrator may reduce or eliminate any restrictions surrounding
any participant’s right to exercise all or part of the
option. Fair market value is established by our Board, using third
party valuation reports and recent financings. Stock options
generally expire after ten years.
Stock Appreciation Rights
A Stock
Appreciation Right is a right that entitles the awardee to receive,
in cash or shares (as determined by the Administrator), value equal
to or otherwise based on the excess of (i) the fair market value of
a specified number of shares at the time of exercise over (ii) the
aggregate exercise price of the right, as established by the
Administrator on the grant date. Stock Appreciation Rights may be
granted to awardees either alone (“freestanding”) or in
addition to or in tandem with other awards granted under the Plan
and may, but need not, relate to a specific option granted under
the Plan. To date, we have not granted any Stock Appreciation
Rights under the Plan.
Stock Awards
Each
Stock Award agreement shall contain provisions regarding (i) the
number of shares subject to such stock award or a formula for
determining such number, (ii) the purchase price of the shares, if
any, and the means of payment for the shares, (iii) the performance
criteria, if any, and level of achievement versus these criteria
that shall determine the number of shares granted, issued,
retainable and/or vested, (iv) such terms and conditions on the
grant, issuance, vesting and/or forfeiture of the shares as may be
determined from time to time by the Administrator, (v) restrictions
on the transferability of the Stock Award, and (vi) such further
terms and conditions, in each case not inconsistent with the Plan,
as may be determined from time to time by the Administrator. To
date, we have not granted any Stock Awards under the
Plan.
Other Stock-Based Awards
An
“Other Stock-Based Award” means any other type of
equity-based or equity-related award not otherwise described by the
terms of the Plan (including the grant or offer for sale of
unrestricted shares), as well as any cash bonus based on the
attainment of qualifying performance criteria, in such amount and
subject to such terms and conditions as the Administrator shall
determine. Such awards may involve the transfer of actual shares to
participants, or payment in cash or otherwise of amounts based on
the value of shares or pursuant to attainment of a performance
goal. To-date, we have not granted any Other Stock-Based Awards
under the Plan.
Limited Transferability
Unless
determined otherwise by the Administrator, an award may not be
sold, pledged, assigned, hypothecated, transferred or disposed of
in any manner other than by beneficiary designation, will or by the
laws of descent or distribution, including but not limited to any
attempted assignment or transfer in connection with the settlement
of marital property or other rights incident to a divorce or
dissolution, and any such attempted sale, assignment or transfer
shall be of no effect prior to the date an Award is vested and
settled. The Administrator may only make an award transferable to
an awardee’s family member or any other person or entity
provided the awardee does not receive consideration for such
transfer. If the Administrator makes an award transferable, either
as of the grant date or thereafter, such award shall contain such
additional terms and conditions as the Administrator deems
appropriate, and any transferee shall be deemed to be bound by such
terms upon acceptance of such transfer.
Change of Control
In the
event of a change of control, unless otherwise determined by the
Administrator as of the grant date of a particular award (or
subsequent to the grant date), the following acceleration,
exercisability and valuation provisions shall apply: (i) on the
date that such change of control occurs, any or all options and
Stock Appreciation Rights awarded under the Plan not previously
exercisable and vested shall become fully exercisable and vested;
(ii) except as may be provided in an individual severance or
employment agreement (or severance plan) to which an awardee is a
party, in the event of an awardee’s termination of employment
within two (2) years after a change of control for any reason other
than because of the awardee’s death, retirement, disability
or termination for cause, each option and Stock Appreciation Right
held by the awardee (or a transferee) that is vested shall remain
exercisable until the earlier of the third (3rd) anniversary of
such termination of employment (or any later date until which it
would remain exercisable under such circumstances by its terms) or
the expiration of its original term; (iii) on the date that such
change of control occurs, the restrictions and conditions
applicable to any or all Stock Awards and Other Stock-Based Awards
shall lapse and such awards shall be fully vested. Unless otherwise
provided in an award at the grant date, upon the occurrence of a
change of control, any performance-based award shall be deemed
fully earned at the target amount as of the date on which the
change of control occurs. All Stock Awards, Other Stock-Based
Awards and cash awards shall be settled or paid within thirty (30)
days of vesting hereunder; (iv) the Administrator, in its
discretion, may determine that, upon the occurrence of a change of
control of the Company, each option and Stock Appreciation Right
outstanding shall terminate within a specified number of days after
notice to the participant, and/or that each participant shall
receive, with respect to each share subject to such option or Stock
Appreciation Right, an amount equal to the excess of the fair
market value of such share immediately prior to the occurrence of
such change of control over the exercise price per share of such
option and/or Stock Appreciation Right; such amount to be payable
in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a
combination thereof, as the Administrator, in its discretion, shall
determine, and if there is no excess value, the Administrator may,
in its discretion, cancel such awards.
Adjustments
In the
event of (i) a stock dividend, extraordinary cash dividend, stock
split, reverse stock split, share combination, or recapitalization
or similar event affecting our capital structure or (ii) a merger,
consolidation, acquisition of property or shares, separation,
spin-off, reorganization, liquidation, disaffiliation, or similar
event affecting us or any of our subsidiaries, the Administrator or
our Board may in its discretion make such substitutions or
adjustments as it deems appropriate and equitable. In the case of
share changes, such adjustments shall be mandatory in order to
avoid material impairment of any outstanding award; provided,
however, the Administrator or the Board shall retain discretion to
determine the appropriate and equitable substitutions and
adjustments that will be made to avoid such material
impairment.
Amendment and Termination
Our
Board may amend, alter or discontinue the Plan or any award
agreement, but any such amendment shall be subject to approval of
our stockholders in the manner and to the extent required by
applicable law.
Option Grants Under the Plan
In
April 2016, our Board granted to non-employee board members and our
acting chief financial officer stock options to purchase up to an
aggregate 273,000 shares of our common stock at an exercise price
of $0.001 per share (the par value) based upon a third-party
valuation of our common stock. Such stock options vested 50% on
grant date, 25% on the six-month anniversary of the grant date and
25% on the one year, anniversary of the grant date. In December
2016, our Board granted to our acting chief medical officer options
to purchase up to 7,000 shares of our common stock. Such options
vested monthly over six months from the grant date. In February
2017, our Board granted to its Members and our acting chief
financial officer stock options to purchase up to an aggregate
275,520 shares of our common stock at an exercise price of $0.001
per share (the par value) based upon a third-party valuation of our
common stock. Such options vest 6/48ths upon the six-month
anniversary of the grant date and 1/48th per month thereafter. In
September 2017 and November 2017, stock options to purchase up to
an aggregate 103,072 shares of our common stock were granted at an
exercise price of $6.00, based on the price per share at which
common stock was sold in our most recent private offering. 61,024
of such options vest 6/48ths upon the six-month anniversary of the
grant date and 1/48th per month thereafter, 21,024 of such options
vest 6/42nd upon the six month anniversary of the grant date and
1/42nd per month thereafter and 21,024 of such options vest 6/24ths
upon the six month anniversary of the grant date and 1/24th per
month thereafter. On January 1, 2018, our Board granted to our
acting chief medical officer options to purchase up to 32,004
shares of our common stock at an exercise price of $6 per share,
and such options vest 12,000 on the date of grant and 1,667 options
on the 1st of each month thereafter. On May 21, 2018, our Board
granted to an employee options to purchase up to 5,000 shares of
our common stock at an exercise price of $6 per share, and such
options vest 6/48ths on the grant date ant 1/48th per month
thereafter. On August 6, 2018, our Board granted to an employee
options to purchase up to 5,000 shares of our common stock at an
exercise price of $6 per share, and such options vest 6/48ths on
the six-month anniversary of grant date ant 1/48th per month
thereafter. In August 2018, stock options to purchase up to an
aggregate 425,300 shares of our common stock were granted at an
exercise price of $6.00. 104,400 options vests commencing on
October 1, 2018 quarterly over five quarters. 320,900 options
vest
commencing on October 1, 2018, 6/51 on the six-month anniversary of
vesting commencement date and 1/51 per month thereafter. In
December 2018, stock options to purchase up to an aggregate 20,000
shares of our common stock were granted at an exercise price of
$6.00. The exercise price of the stock options granted in 2018 are
based upon the price per share at which our common stock was sold
in our most recent private offering. In 2018, 40,000 options
expired related to an employment termination. All outstanding stock
options have a ten-year term. 1,105,896 stock options were
outstanding as of December 31, 2018.
We do not have a defined benefit pension plan.
Our named executive officers did not participate in, or otherwise
receive any special benefits under, any pension or defined benefit
retirement plan sponsored by us during the year ended December 31,
2018.
We
maintain a defined contribution employee retirement plan for our
employees. The plan is intended to qualify as a tax-qualified plan
under Section 401(k) of the Code so that contributions to the
401(k) plan, and income earned on such contributions, are not
taxable to participants until withdrawn or distributed from the
401(k) plan.
The
401(k) plan provides that each participant may contribute up to
100% of his or her pre-tax compensation, up to a statutory limit,
which is $18,500 for 2018, a $500 rise from 2017 and 2016 limits.
Participants who are at least 50 years old can also make
“catch-up” contributions, which in 2018 may be up to an
additional $6,000 above the statutory limit. Employees become
eligible to participate in the 401(k) plan after four months of
active employment with the Company.
Under
the 401(k) plan, each employee is fully vested in his or her
deferred salary contributions. Employee contributions are held and
invested by the plan’s trustee. The 401(k) plan also permits
us to make discretionary profit-sharing contributions and
discretionary matching contributions, subject to established limits
and a vesting schedule. To date, we have not made any discretionary
profit sharing or discretionary matching contributions to the plan
on behalf of participating employees.
During
the period between January 2016 and October 2017, we maintained an
individual defined contribution employee retirement plan
(“i401(k)”) for Dr. Robinson, our only employee during
that period. Under the i401(k) plan we contributed for the benefit
of Dr. Robinson up to the statutory limit under Section 415(c)
(1)(A) of the Code, which was $54,000 in 2017 and $53,000 in 2016
and is included under All Other Compensation on the Summary
Compensation Table.
Nonqualified
Deferred Compensation
During
the year ended December 31, 2018, our named executive officers did
not contribute to, or earn any amount with respect to, any defined
contribution or other plan sponsored by us that provides for the
deferral of compensation on a basis that is not
tax-qualified.
CERTAIN RELATIONSHIPS AND RELATED-PERSON
TRANSACTIONS
Relationships and Related-Person
Transactions
Since
January 2015, we (including as Monopar Therapeutics, LLC) have
engaged in the following transactions with our directors, executive
officers, holders of more than 5% of our voting securities, and
affiliates or immediate family members of our directors, executive
officers and holders of more than 5% of our voting securities, and
our co-founders. We believe that all of these transactions were on
terms as favorable as could have been obtained from unrelated third
parties.
During
the years ended December 31, 2018 and 2017, we paid or accrued
legal fees to Baker & Hostetler, LLP, a large national law
firm, in which a family member of the Company’s Chief
Executive Officer was a law partner until January 31, 2019,
approximately $152,094 and $289,175, respectively. The family
member billed a de minimis
amount of time on our legal engagement with Baker & Hostetler,
LLP.
Contributions
by Tactic Pharma
We were
initially formed as a Delaware limited liability company in
December 2014, with the name Monopar Therapeutics, LLC, at which
time Tactic Pharma contributed technology and related assets of
MNPR- 101 to us, in exchange for 1,000,000 shares of Series Z
Preferred Units, which were exchanged for 100,000 shares of Series
Z Preferred Stock at the time of our conversion to a corporation.
The issued Series Z Preferred Stock was recorded at par value
$0.001 per share on our balance sheet reflecting the historical
capitalized cost basis, due to the fact that MNPR-101’s
development costs were previously expensed (not capitalized) by
Tactic Pharma. In March 2017, the 100,000 shares of Series Z
Preferred Stock were converted into 7,000,000 shares of our common
stock, $.0001 par value in connection with the Conversion. See
“Conversion of Preferred Stock to common stock”. We
reimbursed Tactic Pharma, a de
minimis amount in monthly storage fees during the year ended
December 31, 2017 and nothing during the year ended December 31,
2018. In March 2017, Tactic Pharma wired $1,000,000 to us in
advance of the sale of our common stock at $6 per share under a
private placement memorandum. In April 2017, we issued to Tactic
Pharma 166,667 shares in exchange for the $1,000,000 at $6 per
share once we began selling our common stock to unaffiliated
parties under the private placement memorandum. In August 2017,
Tactic Pharma surrendered 2,888,727.12 shares of our common stock
back to us as a contribution to the capital of the Company. This
resulted in reducing Tactic Pharma’s ownership in us from
79.5% to 69.9%. Following the surrender of the common stock, Tactic
Pharma contributed 4,111,272.88 shares of its holdings in our
common stock to TacticGem pursuant to the Gem Transaction discussed
in detail in below. As of May 10, 2019, Tactic Pharma beneficially
owned 46% of our common stock, and TacticGem owned 77% of our
common stock.
Gem
Pharmaceuticals, LLC (“Gem”)
Transaction
On June
27, 2017, we signed a term sheet with Gem pursuant to which Gem was
to transfer assets related to certain of its product candidate
programs to us in exchange for 32% of our outstanding common stock
on a fully-diluted basis. The Gem transaction was structured
through a limited liability company, TacticGem, which Gem formed
with Tactic Pharma, our largest stockholder at that time. Gem
contributed certain of Gem’s product candidates’
intellectual property and agreements associated primarily with
Gem’s GPX-150 (renamed camsirubicin or MNPR-201) product
candidate program, along with $5,000,000 in cash (the “Gem
Contributed Assets”) to TacticGem for a 42.633% interest, and
Tactic Pharma contributed 4,111,272.88 shares of our common stock
to TacticGem for a 57.367% interest. Then, TacticGem contributed
the Gem Contributed Assets to us in exchange for 3,055,394.12 newly
issued shares of our common stock (31.4% on a fully-diluted basis)
(the two contributions collectively, the “Gem
Transaction”). The contribution by TacticGem, made in
conjunction with contributions from outside investors in a private
offering, was intended to qualify for tax-free treatment. The Gem
Transaction closed on August 25, 2017. Following the Gem
Transaction, TacticGem owns 7,166,667 shares of our stock. Pursuant
to the TacticGem limited liability company agreement, all votes of
our common stock by TacticGem (aside from the election of our Board
of Directors) is required to be passed through to Tactic Pharma and
Gem based on their percentage interest (currently pursuant to this
voting agreement, Tactic Pharma has voting and investment power
over 4,111,272.88 shares of our common stock and Gem has voting and
investment power over 3,055,394.12 shares of our common stock).
Neither Gem nor TacticGem was a related person prior to the Gem
Transaction. The TacticGem limited liability company agreement
provides that its manager will vote all shares of our common stock
held by it to elect Tactic Pharma’s nominees to our Board of
Directors plus one person nominated by Gem, initially Arthur J.
Klausner. Gem submitted an IND in February 2007, for camsirubicin,
formerly known as GPX-150, for the treatment of cancer. The IND
remains open and was transferred to us in February
2018.
Pursuant to the
Conversion and the Gem Transaction and sales of our common stock in
September 2017, Tactic Pharma now holds voting and investment power
over 4,277,939.88 shares of our common stock, which is 46.0% of our
outstanding common stock. In the ordinary course of business, we
have reimbursed and continue to reimburse Tactic Pharma for
expenses Tactic Pharma has paid on our behalf, which historically
included legal patent fees and storage rental fees. Certain of our
Board Members and executive officers own and control Tactic Pharma.
Although no single person has a controlling interest in Tactic
Pharma, acting together, they are able to control Tactic Pharma and
a large voting block of our common stock.
Stock Purchases by Directors and Executive
Officers
The following table sets forth the number of shares of our common
stock owned by our co-founders and directors (taking into account
the Conversion).
|
|
|
|
|
|
Transaction Value (and Related Person’s Interest)
($)
|
Christopher M.
Starr, Ph.D.
|
Executive
Chairman
|
2016
|
29,400
|
$ 3.57
|
105,000
|
|
|
|
2017
|
20,000
|
$6.00
|
120,000
|
|
Chandler D.
Robinson, M.D.
|
Director, Chief
Executive Officer
|
2016
|
14,002.30
|
$3.57
|
50,010
|
|
Andrew P. Mazar,
Ph.D.
|
Director,
Executive Vice President of Research and Development, Chief
Scientific Officer
|
2016
|
14,002.30
|
$3.57
|
50,010
|
|
Michael J.
Brown
|
Director
|
2016
|
210,000
|
$3.57
|
750,000
|
|
Raymond W.
Anderson
|
Director
|
2017
|
1,000
|
$6.00
|
6,000
|
|
Arthur
Klausner
|
Director
|
2017
|
5,000
|
$6.00
|
30,000
|
Procedures
for Related-Person Transactions
A
“related person” includes any director, nominee for
director or executive officer of the Company; a beneficial owner of
more than five percent of any class of our voting securities; and a
person who is an immediate family member of any such director,
nominee for director, executive officer or more-than-five percent
beneficial owner (the term “immediate family member”
shall include 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 and any person (other than a tenant
or employee) sharing the household of any such director, nominee
for director, executive officer or more- than-five percent
beneficial owner).
Our
Board has adopted our Audit Committee Charter which delegates the
review and approval of related-person transactions to the Audit
Committee. The Audit Committee reviews and approves or disapproves
any transaction required to be disclosed according to SEC
Regulation S-K, Item 404 between the Company and any related party
on an on-going basis and oversees policies and procedures for the
Audit Committee’s judgments as to related party transactions
as required by Nasdaq. Our Audit Committee will discuss with our
management the business rationale for the transactions and whether
appropriate disclosures have been made.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table and the related notes present information on
the beneficial ownership of shares of our common stock, our only
outstanding class of stock, as of May 10, 2019 by:
●
each of our named
executive officers;
●
all of our current
directors and executive officers as a group; and
●
each person known
by us to beneficially own more than five percent of our common
stock
Beneficial
ownership is determined in accordance with the rules of the SEC and
includes voting or investment power with respect to the securities.
Shares of our common stock that may be acquired by an individual or
group within 60 days of May 10, 2019, pursuant to the exercise of
options or warrants, are deemed to be outstanding for the purpose
of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person shown in the table.
Beneficial ownership is based upon 9,291,421 shares of our common
stock outstanding as of May 10, 2019.
Except
as indicated in footnotes to this table, we believe that the
stockholders named in this table have sole voting and investment
power with respect to all shares of common stock shown to be
beneficially owned by them, based on information provided to us by
such stockholders.
|
Name and Address of Beneficial Owner
|
|
|
*Unless otherwise noted, addresses are:
1000 Skokie Blvd., Suite 350, Wilmette, IL 60091
|
|
|
|
|
|
|
|
TacticGem, LLC(1)
|
7,166,667
|
77.10%
|
|
Tactic Pharma
LLC(1)
|
4,277,940
|
46.00%
|
|
Gem Pharmaceutical LLC(1) 941 Lake Forest Cir., Birmingham, AL
35244
|
3,055,394
|
32.90%
|
|
Chandler D. Robinson, Chief
Executive Officer and Director(2)
|
172,673
|
1.80%
|
|
Christopher M. Starr, Executive
Chairman and Director(3)
|
198,060
|
2.10%
|
|
Andrew P. Mazar, Executive Vice
President of Research and Development, Chief Scientific Officer and
Director(4)
|
170,696
|
1.80%
|
|
Michael J. Brown,
Director(5)
|
244,056
|
2.60%
|
|
Raymond W. Anderson,
Director(6)
|
27,173
|
*
|
|
Arthur J. Klausner,
Director(7)
|
30,296
|
*
|
|
Kim R. Tsuchimoto, Chief
Financial Officer(8)
|
41,971
|
*
|
|
Patrice P. Rioux, Acting Chief
Medical Officer(9)
|
49,005
|
*
|
|
Named executive officers and
directors as a group (8 persons)(10)
|
8,100,597
|
81.60%
|
(1)
Tactic Pharma
shares voting and investment power over 4,111,273 shares of our
common stock owned by TacticGem, and Gem shares voting and
investment power over 3,055,394 shares of our common stock owned by
TacticGem, because pursuant to the TacticGem limited liability
company agreement all votes of our common stock (other than votes
for the election of directors) are passed through to Tactic Pharma
and Gem in proportion to their percentage interests in TacticGem,
and after an initial holding period, which ends after we have been
subject to the reporting requirements of the Exchange Act and have
filed all required reports for a period of at least 12 months,
either member of TacticGem can cause up to its proportionate shares
of our common stock to be distributed to it. Tactic Pharma holds
166,667 shares of stock in its own name. Dr. Mazar and Dr. Robinson
are managers of Tactic Pharma; because of this, they control voting
and dispositive power over 4,111,273 shares of our common stock
owned by TacticGem, and over our common stock owned by Tactic
Pharma. Gem is controlled by Pharma Investments, LLC, which is in
turn controlled by Diane M. Hendricks.
(2)
Includes 158,670
common stock options that vest within 60 days after May 10,
2019.
(3)
Includes 148,660
common stock options that vest within 60 days after May 10,
2019.
(4)
Includes 156,693
common stock options that vest within 60 days after May 10,
2019.
(5)
Includes 34,056
common stock options that vest within 60 days after May 10,
2019.
(6)
Includes 26,173
common stock options that vest within 60 days after May 10,
2019.
(7)
Includes 25,296
common stock options that vest within 60 days after May 10,
2019.
(8)
Includes 41,971
common stock options that vest within 60 days after May 10,
2019.
(9)
Includes 49,005
common stock options that vest within 60 days after May 10,
2019.
(10)
Shares
held by TacticGem are only included in the total beneficial
ownership of our named executive officers and directors because the
limited liability agreement of TacticGem provides that the Manager
of TacticGem will vote our common stock held by TacticGem to elect
Tactic Pharma’s nominees plus one person designated by Gem
(until we achieve listing on a national stock exchange) to our
Board, and acting together the directors are able to control Tactic
Pharma and how it selects its nominees for our Board.
*
Less than 1%
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Under
Section 16(a) of the Exchange Act and SEC rules, our directors,
executive officers and beneficial owners of more than 10% of any
class of equity security are required to file periodic reports of
their ownership, and changes in that ownership, with the SEC. To
our knowledge, based solely on the review of copies of the reports
filed with the SEC and any written representations that no other
reports were required, all reports required to be filed by our
executive officers, directors and beneficial owners of more than
10% of our common stock were timely filed during the year ended
December 31, 2018, except that Forms 4 reporting the grants of
stock options on August 28, 2018 were filed on September 27, 2018
for the following directors and officers: Dr. Robinson, Dr. Mazar,
Dr. Starr, Ms. Tsuchimoto, Mr. Brown, Mr. Anderson and Mr.
Klausner.
OTHER
BUSINESS
We know
of no other matters to be submitted to a vote of stockholders at
our Annual Meeting. In order for any stockholder to nominate a
candidate or to submit a proposal for other business to be acted
upon at a given annual meeting, he or she must provide timely
written notice to our corporate Secretary in the form prescribed by
our Amended and Restated Bylaws, as described below.
SECURITY
HOLDER COMMUNICATIONS TO THE BOARD OF DIRECTORS
Security holders
may send communications to the Board of Directors care of our
investor relations department at 1000 Skokie Blvd., Suite 350,
Wilmette, IL 60091.
STOCKHOLDER
PROPOSALS
Stockholder
proposals intended to be included in the proxy statement for the
2020 annual meeting of stockholders pursuant to SEC Rule 14a-8 must
be received by our corporate Secretary no later than the close of
business on December 29, 2019. In order to be considered for
inclusion in our proxy statement, these proposals must satisfy the
requirements of SEC Rule 14a-8.
To be
properly brought before the 2020 annual meeting of stockholders,
stockholders who intend to present a stockholder proposal or
director nomination at the meeting must deliver written notice of
the proposal or nomination to our corporate Secretary between 90
and 120 days prior to the one-year anniversary date of the 2019
annual meeting (that is, between February 27, 2020 and March 29,
2020); provided, however, that if the 2020 annual meeting date is
advanced by more than 30 days before or delayed by more than 60
days after the anniversary date of the 2019 annual meeting, then
such notice must be received on or before 10 days after the day on
which the date of the 2020 annual meeting is first disclosed in a
public announcement. Proposals not meeting the requirements set
forth above will not be entertained at the Annual Meeting. If a
stockholder fails to meet these deadlines or fails to satisfy the
requirements of SEC Rule 14a-4, the persons named in the proxy will
be allowed to use their discretionary voting authority to vote on
any such proposal or nomination as they determine appropriate if
and when the matter is raised at the Annual Meeting.
All
notices of proposals or nominations, as applicable, must be
addressed to our corporate Secretary at 1000 Skokie Blvd., Suite
350, Wilmette, IL 60091.
DELIVERY OF INFORMATION STATEMENT
Our
Annual Report to stockholders on Form 10-K for the year ended
December 31, 2018, including audited financial statements,
accompanies this Information Statement. Copies of our Annual Report
on Form 10-K and the exhibits thereto are available from us without
charge upon written request of a stockholder to our investor
relations department at 1000 Skokie Blvd., Suite 350, Wilmette, IL
60091. Copies of these materials are also available online through
the SEC at www.sec.gov. We may satisfy SEC rules regarding delivery
of materials, including the Information Statement and Annual Report
on Form 10-K or Notice, as applicable, by delivering a single
Information Statement and Annual Report on Form 10-K or a single
Notice, as applicable, to an address shared by two or more of our
stockholders. This delivery method can result in meaningful cost
savings for us. In order to take advantage of this opportunity, we
may deliver only one Information Statement and Annual Report on
Form 10-K or one Notice, as applicable, to multiple stockholders
who share an address, unless contrary instructions are received
from one or more stockholders at that address prior to the mailing
date. We undertake to deliver promptly upon written or oral request
a separate copy of the Information Statement and Annual Report on
Form 10-K or Notice, as applicable, to a stockholder at a shared
address to which a single copy of these materials was delivered. If
you hold stock as a registered holder and prefer to receive
separate copies of these materials either now or in the future,
please contact our investor relations department at 1000 Skokie
Blvd., Suite 350, Wilmette, IL 60091 or by telephone at (847)
388-0349.
Similarly, if you
share an address with another stockholder and have received
multiple copies of our Information Statement and Annual Report on
Form 10-K or Notice, you may write or call us at the address and
phone number above to request delivery of a single copy of these
materials in the future. If your stock is held through a brokerage
firm, bank or other financial institution and you prefer to receive
separate copies of our proxy and/or Information Statement and
Annual Report on Form 10-K or Notice, as applicable, either now or
in the future, please contact your brokerage firm, bank or other
financial institution.
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