9 unchanged sentences
This Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting as required by Section 404(b) of the Sarbanes Oxley Act of 2002.
−Removed: As a non-accelerated filer, our management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Form 10-K.
+Added: accelerated filer, our management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Form 10-K.
Changes in Internal Control over Financial Reporting
We monitor our internal control over financial reporting on a continuous basis.
−Removed: There has not been any change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the year ended December 31, 2023 which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: There has not been any change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during the year ended December 31, 2024 which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
2 unchanged sentences
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
−Removed: Directors and Executive Officers
−Removed: The following table sets forth information as to each person who is, as of the filing hereof, a director and/or executive officer of the Company.
−Removed: Officers are appointed by our Board of Directors and serve at the discretion of our Board of Directors, subject to applicable employment agreements:
−Removed: Director, Chief Executive Officer and President
−Removed: Director, Chief Financial Officer, Treasurer and Secretary
−Removed: Antonella Favit-Van Pelt, Ph.D.
−Removed: Chief Medical Officer
−Removed: Sherrie Perkins
−Removed: No Family Relationships
−Removed: There is no family relationship between any director and executive officer or among any directors or executive officers.
−Removed: Business Experience and Background of Directors and Executive Officers
−Removed: Blane Walter has served as a member of our Board of Directors since December 2015 and as Chairman of the Board since August 2020.
−Removed: Walter is a partner at Talisman Capital Partners, a position he has held since 2011.
−Removed: Walter founded inChord Communications, Inc., a global private healthcare communications company, which was acquired by inVentiv Health in 2005.
−Removed: Walter joined inVentiv Health as president of the Communications division in 2005 and was named Chief Executive Officer in 2008 and served in that capacity until leading the sale of the company to Thomas H.
−Removed: Lee Partners in 2010.
−Removed: Following the buyout, Mr.
−Removed: Walter served as vice chairman of inVentiv Group, a holding company which survived the buyout, from 2011 to August 2017.
−Removed: Walter received a B.S.
−Removed: in marketing and finance from Boston College in 1993.
−Removed: Our Board believes that Mr.
−Removed: Walter is qualified to serve as director based on his background in the healthcare and pharmaceutical industries.
−Removed: Andreeff served as our Interim President and Chief Executive Officer from August 2020 until June 2021 when he was appointed President and Chief Executive Officer.
−Removed: He has served as a member of our Board of Directors since August 2017.
−Removed: Andreeff is the General Partner and Portfolio Manager at Maple Leaf Partners, LP.
−Removed: Maple Leaf Partners, LP is a hedge fund founded by Mr.
−Removed: Andreeff, where he has been employed since 1996.
−Removed: In 2003, the fund was seeded by Julian Robertson’s Tiger Management and later grew to over $2 billion in assets under management.
−Removed: Andreeff also serves as a member of the board of directors of privately-held HDL Therapeutics, Inc.
−Removed: and Myocardial Solutions, Ltd.
−Removed: Andreeff received his Bachelor’s degree in Economics from the University of Texas at Arlington in 1989 and his Master’s degree in Economics from the University of Texas at Arlington in 1991.
−Removed: Our Board believes that Mr.
−Removed: Andreeff’s extensive experience in the investment industry and capital markets and significant experience advising other companies as a board member, including multiple companies in the healthcare sector, make him a valuable member of the Board.
−Removed: Mathiesen has served as Chief Financial Officer, Treasurer and Secretary of the Company since June 2021.
−Removed: Mathiesen also has served as a member of the Board of Directors since May 2022 and previously served as a member of our Board of Directors from June 2020 to June 2021.
−Removed: Additionally, Mr.
−Removed: Mathiesen has served as Vice Chair and Lead Independent Director since March 2020 and as Director and Audit Committee Chair, since 2015, of Panbela Therapeutics, Inc.
−Removed: PBLA), a publicly traded biopharmaceutical company developing therapies for pancreatic diseases, and as a director and Audit Committee Chair of NeuroOne Medical Technologies Corporation (Nasdaq:
−Removed: NMTC), a publicly traded medical technology company focused on improving surgical care options and outcomes for
−Removed: patients suffering from neurological disorders, since 2017, and Healthcare Triangle, Inc.
−Removed: HCTI), a publicly traded provider of cloud and data transformation platform and solutions for healthcare and life sciences, from March 2021 to December 2021, and eNeura, Inc., a privately held medical technology company providing therapy for both acute treatment and prevention of migraine, from 2018 to 2020.
−Removed: Mathiesen served as Advisor to the CEO of Teewinot Life Sciences Corporation, a privately held global leader in the biosynthetic development and production of cannabinoids and their derivatives for consumer and pharmaceutical products, from October 2019 to December 2019, and served as Chief Financial Officer from March 2019 to October 2019.
−Removed: In August 2020, Teewinot Life Insurance Sciences filed a voluntary petition under Chapter 11 of the United Stated Bankruptcy Code.
−Removed: Mathiesen previously served as Chief Financial Officer of Gemphire Therapeutics Inc., which was acquired by NeuroBo Pharmaceuticals, Inc.
−Removed: NRBO) in January 2020, a publicly-held clinical-stage biopharmaceutical company developing therapies for patients with cardiometabolic disorders, from 2015 to 2018, and as Chief Financial Officer of Sunshine Heart, Inc.
−Removed: CHFS), a publicly-held early-stage medical device company, from 2011 to 2015.
−Removed: Mathiesen received a B.S.
−Removed: in Accounting from the University of South Dakota and is a Certified Public Accountant.
−Removed: Our Board believes that Mr.
−Removed: Mathiesen is qualified to serve as a director based on his background in a broad range of responsibilities in financial and operational roles, including manufacturing, quality and procurement, in addition to traditional CFO roles in organizations with operations in North America, Europe, Southeast Asia and Australia.
−Removed: Antonella Favit-Van Pelt , Ph.D.
−Removed: has served as Chief Medical Officer of the Company since July 2021.
−Removed: Prior to joining the Company, Dr.
−Removed: Favit-Van Pelt led U.S.
−Removed: Medical Strategy for the Neurology program of H.
−Removed: Lundbeck A/S (LUN.CO, LUN DC, HLUYY), a global pharmaceutical company that specializes in the treatment of brain diseases, from 2018 to 2021.
−Removed: In this position, she oversaw the U.S.
−Removed: medical and life-cycle program activities related to therapies for movement disorders and epilepsy.
−Removed: Favit-Van Pelt founded Synaerion Therapeutics (“ Synaerion ”) and, in 2016, its affiliate Thera Neuropharma, Inc.
−Removed: (“ Thera ”), two privately-held biotechnology companies developing a small molecule regenerative therapy and RNAi-based integrated technology platform for ALS and traumatic brain injury.
−Removed: She oversaw all aspects of Synaerion’s and Thera’s management and strategy as Chief Executive Officer, President & Chairwoman of the Board from 2014 to 2017 and she continues to serve as President & Chairwoman.
−Removed: In 2009, she founded StratMedica, LLC, a privately-held company designed to provide corporate clients with contract senior management support.
−Removed: As Principal of StratMedica from 2009 to 2016, she directed clinical development and medical programs for eight healthcare companies, including Johnson & Johnson (NYSE:
−Removed: JNJ) and Teva (NYSE:
−Removed: Favit-Van Pelt served as Senior Director and Global Medical Lead at Shire Pharmaceuticals (Nasdaq:
−Removed: SPHG) from 2007 to 2008, as Director of Medical Strategy at Bristol-Myers Squibb (NYSE:
−Removed: BMY) from 2005 to 2007, and as Global Clinical Development Lead at GE Healthcare (formerly Amersham Health) from 2001 to 2005.
−Removed: Favit-Van Pelt is a Board-certified neurologist who began clinical practice activity in 1994, with a focus on patients with rare neuromuscular disorders.
−Removed: She holds a graduate degree in Medicine and Surgery and a Ph.D.
−Removed: in Pharmacology from the School of Medicine and Surgery at the University of Catania, Italy.
−Removed: Paul Buckman has served as a member of our Board of Directors since September 2021.
−Removed: Buckman has served as the President of North America for LivaNova PLC (Nasdaq:
−Removed: LIVN) since April 2019 and previously served as the General Manager of Structural Heart for LivaNova PLC from April 2017 to December 2019.
−Removed: Prior to joining LivaNova PLC, Mr.
−Removed: Buckman served as chief executive officer of Conventus Orthopaedics, a Minnesota-based company specializing in peri-articular bone fracture fixation, from September 2013 until March of 2017.
−Removed: Buckman was chief executive officer of Sentreheart, Inc., a medical technology company focused on closure of various anatomic structures, from February 2012 to September 2013.
−Removed: Previously, Mr.
−Removed: Buckman served as chief executive officer and chairman of Pathway Medical Technologies, Inc., a medical device company focused on treatment of peripheral arterial disease, from September 2008 to February 2012; as chief executive officer of Devax, Inc., a developer and manufacturer of drug eluting stents, from December 2006 to September 2008; as president of the cardiology division of St.
−Removed: Jude Medical, Inc., a publicly traded diversified medical products company, from August 2004 to December 2006; and as chairman of the board of directors and chief executive officer of ev3, LLC, a Minnesota-based medical device company focused on endovascular therapies that Mr.
−Removed: Buckman founded and developed into an $80 million business, from January 2001 to January 2004.
−Removed: Buckman has worked in the medical device industry for over 30 years, including 10 years at Scimed Life Systems, Inc.
−Removed: and Boston Scientific Corporation (NYSE:
−Removed: BSX), a publicly traded medical device manufacturer, where he held several executive positions before becoming president of the cardiology division of Boston Scientific in January 2000.
−Removed: Buckman also currently serves as a director for Ablative Solutions, Inc., ActivOrtho, Shoulder Innovations, and as chairman of Miromatrix, Inc.
−Removed: and NeuroOne Medical Technologies Corporation (Nasdaq:NMTC).
−Removed: He previously served
−Removed: as a director of Conventus Orthopaedics, Caisson Interventional LLC, Velocimed, Inc., where he was a co-founder, EndiCor, Inc., Microvena, Inc., Sunshine Heart, Inc., n/k/a Nuwellis, Inc.
−Removed: NUWE), a publicly-held early-stage medical device company, NexGen Medical, Micro Therapeutics, Inc., and as chairman of the board of NeuroOne, Inc.
−Removed: Our Board believes that Mr.
−Removed: Buckman is qualified to serve as director based on his background in the healthcare and pharmaceutical industries.
−Removed: Sherrie Perkins has served as a member of our Board of Directors since March 2021.
−Removed: Perkins has served in the University of Texas MD Anderson Cancer Center’s Venture Mentoring Service since 2017 providing guidance and perspective on commercialization-related topics that are important and relevant to the progression of various ventures.
−Removed: Perkins also served as an independent member of the board of directors of eNeura, Inc., a privately held medical technology company providing therapy for both acute treatment and prevention of migraines, from 2018 to 2020.
−Removed: Perkins served as a consultant to LivaNova, PLC (Nasdaq:
−Removed: LIVN), a publicly-held global medical technology company that creates innovative and meaningful medical solutions for the benefit of patients, healthcare professionals, and healthcare systems, from January 2017 to June 2019, and served as Vice President in the sleep apnea, new ventures space within LivaNova from October 2015 to January 2017.
−Removed: Perkins previously served as Vice President of Marketing and New Business Development of Cyberonics, Inc., an affiliate of LivaNova, from November 2011 to October 2015.
−Removed: Perkins received a B.S.
−Removed: in Medical Technology from Mississippi State University and an M.A.
−Removed: in Management from Central Michigan University.
−Removed: Since June 2021, Ms.
−Removed: Perkins has served as an adjunct professor in the Master of Clinical Translation Management program in The Cameron School of Business at University of St.
−Removed: Our Board believes that Ms.
−Removed: Perkins is qualified to serve as director based on her background and broad range of responsibilities in financial and operational roles, including marketing, business development and commercialization.
−Removed: Straw is a Vice Admiral, USN, (Retired) and has served as a member of our Board of Directors since November 2014.
−Removed: He founded Osprey Venture Partners in 2011, a firm that mentors young entrepreneurs seeking investment capital and assists with business development and serves as the managing director.
−Removed: Previously he was president, global operations of The Estée Lauder Companies from 2000 to 2005, senior vice president global operations of the Compaq Computer Corporation from 1998 to 2000, and president of Ryder Integrated Logistics from 1996 to 1998.
−Removed: Prior to joining the private sector, he had a distinguished 35-year career in the U.S.
−Removed: Navy and retired as a three-star admiral.
−Removed: During his military service, Vice Admiral Straw was Director (CEO) of the Defense Logistics Agency, the largest military logistics command supporting the American armed forces.
−Removed: He is a former member of the Defense Science Board, is lead independent director/and former Chairman of Odyssey Logistics and currently sits on the boards of The Boston Consulting Federal Group (lead independent director), and Academy Securities.
−Removed: He is a former board member of Eddie Bauer (audit committee), MeadWestvaco (audit committee), Ply Gem Industries and Panther Logistics.
−Removed: Vice Admiral Straw received a B.S.
−Removed: degree from the United States Naval Academy, an MBA from The George Washington University, and is a graduate of the National War College.
−Removed: Our Board believes that Vice Admiral Straw is qualified to serve as a director based on his extensive leadership experience in both the private sector and the U.S.
−Removed: Board and Committee Information
−Removed: During the Company’s fiscal year ended December 31, 2023, the Board held a total of five meetings, and each director attended at least 75% or more of the aggregate number of meetings of the Board and of the committees on which he or she served that were held during a portion of the last fiscal year.
−Removed: Board Leadership Structure
−Removed: The Company’s Board of Directors is currently chaired by Blane Walter, an independent member of the Board.
−Removed: The Board does not have a formal policy with respect to the separation of the offices of Chief Executive Officer and Chair of the Board.
−Removed: It is the Board’s view that rather than having a formal policy, the Board, upon consideration of all relevant factors and circumstances, will determine, as and when appropriate, whether it is in the best interests of the Company and its stockholders for such offices to be separate or combined.
−Removed: The Board currently believes that, by separating the positions of Chair of the Board and Chief Executive Officer, the Board can provide significant leadership to management and strong oversight of key opportunities and risks impacting the Company.
−Removed: Role of the Board in Risk Oversight
−Removed: The Company’s Board of Directors plays an active role in overseeing management of our risks.
−Removed: The Board regularly reviews information regarding the Company’s strategy, liquidity and operations, as well as the risks associated with each.
−Removed: The Audit Committee of the Board is responsible for overseeing the management of financial risks.
−Removed: The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation policies and arrangements, and for managing risks relating to the Company’s director compensation policies and arrangements.
−Removed: The Company’s Nominating and Corporate Governance Committee is responsible for reviewing the independence of the Board and other corporate governance matters.
−Removed: Board Committees
−Removed: The Company’s Board of Directors has three standing committees:
−Removed: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.
−Removed: The following table provides current committee membership:
−Removed: Nominating and
−Removed: Sherrie Perkins
−Removed: *Committee Chairperson
−Removed: Below is a description of each committee of the Board of Directors.
−Removed: Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
−Removed: Audit Committee
−Removed: Our Audit Committee is comprised of Messrs.
−Removed: Buckman, Straw and Walter.
−Removed: Buckman is the chair of the Audit Committee.
−Removed: The Board of Directors has also determined that each of Mr.
−Removed: Buckman and Mr.
−Removed: Walter qualifies as an “audit committee financial expert,” as defined in applicable SEC rules.
−Removed: The Board made a qualitative assessment of Mr.
−Removed: Buckman’s and Mr.
−Removed: Walter’s level of knowledge and experience based on a number of factors.
−Removed: The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), to oversee the Company’s corporate accounting and financial reporting processes and audits of its financial statements.
−Removed: For this purpose, the Audit Committee performs several functions including the following:
−Removed: ● evaluating the performance of and assessing the qualifications of the independent auditors;
−Removed: ● determining and approving the engagement of the independent auditors;
−Removed: ● determining whether to retain or terminate the existing independent auditors or to appoint and engage new independent auditors;
−Removed: ● reviewing and approving the retention of the independent auditors to perform any proposed permissible non-audit services;
−Removed: ● monitoring the rotation of partners of the independent auditors on the Company’s audit engagement team as required by law;
−Removed: ● reviewing and approving or rejecting transactions between the Company and any related persons;
−Removed: ● conferring with management and the independent auditors regarding the scope, adequacy and effectiveness of internal control over financial reporting;
−Removed: ● establishing procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters;
−Removed: ● meeting to review the Company’s annual audited financial statements and quarterly financial statements with management and the independent auditor.
−Removed: The Audit Committee met four times during 2023.
−Removed: The Board has adopted a written Audit Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com .
−Removed: The Board of Directors reviews the definition of independence for Audit Committee members under SEC rules and Nasdaq listing standards on an annual basis and has determined that all members of the Company’s Audit Committee are independent for such purposes.
−Removed: Compensation Committee
−Removed: Our Compensation Committee is comprised of Messrs.
−Removed: Buckman, Straw and Ms.
−Removed: Straw is the chair of the Compensation Committee.
−Removed: The Compensation Committee was established in March 2018.
−Removed: All members of the Company’s Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq Listing Rules).
−Removed: The Compensation Committee met one time during 2023.
−Removed: The Board has adopted a written Compensation Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com .
−Removed: The Compensation Committee acts on behalf of the Board to do the following:
−Removed: ● reviewing, recommending for adoption and overseeing the Company’s compensation strategy, policies, plans and programs, including establishing corporate and individual performance objectives relevant to the compensation of the Company’s executive officers and other senior management and evaluation of performance in light of these stated objectives;
−Removed: ● reviewing and recommending to the Board for approval the compensation and other terms of employment or service, including severance and change-in-control arrangements, of the Company’s Chief Executive Officer, the other executive officers and the directors;
−Removed: ● administering and enforcing the Company’s Clawback Policy;
−Removed: ● administering the Company’s equity compensation plans, pension and profit-sharing plans, deferred compensation plans and other similar plans and programs.
−Removed: Nominating and Corporate Governance Committee
−Removed: Our Nominating and Corporate Governance Committee is currently comprised of Messrs.
−Removed: Buckman, Straw and Ms.
−Removed: Perkins is the chair of the Nominating and Corporate Governance Committee.
−Removed: The Nominating and Corporate Governance Committee was established in March 2018.
−Removed: All members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq Listing Rules).
−Removed: The Nominating and Corporate Governance Committee did not meet during 2023, but approved
−Removed: certain matters via written consent.
−Removed: The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com .
−Removed: The Nominating and Corporate Governance Committee is responsible for the following:
−Removed: ● identifying, reviewing and evaluating candidates to serve as directors of the Company (consistent with criteria approved by the Board);
−Removed: ● reviewing and evaluating incumbent directors;
−Removed: ● selecting or recommending to the Board for selection candidates for election to the Board of Directors;
−Removed: ● making recommendations to the Board regarding the membership of the committees of the Board;
−Removed: ● assessing the performance of management and the Board;
−Removed: ● developing a set of corporate governance principles for the Company.
−Removed: Code of Business Conduct and Ethics
−Removed: The Company has adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees.
−Removed: The Code of Business Conduct and Ethics is available on the Company’s website at www.heliusmedical.com .
−Removed: If the Company makes any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website.
−Removed: Hedging Policy
−Removed: The Company’s Insider Trading Policy is designed to create reasonable processes to prevent the Company and its directors, officers, employees and specified other persons from insider trading and any appearance of improper conduct.
−Removed: Our Insider Trading Policy specifically prohibits, among other things, all directors and executive officers and employees of the Company from effecting hedging or monetization transactions, such as zero-cost collars and forward sale contracts.
−Removed: Policy for the Recovery of Erroneously Awarded Compensation
−Removed: As required by the listing standards adopted by Nasdaq as a result of SEC rulemaking, the Company’s Board of Directors recently adopted a new Policy for the Recovery of Erroneously Awarded Compensation.
−Removed: The policy provides that the Company must promptly recover specified incentive-based compensation that is received by our Section 16 officers on or after October 2, 2023, regardless of fault or misconduct, upon specified accounting restatements of the Company’s financial statement that resulted in such persons receiving an amount that exceeded the amount that would have been received if based on the restated financial statements.
−Removed: There are limited exceptions to the recovery requirement as set forth in the listing standards.
−Removed: Incentive-based compensation is defined as any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure.
−Removed: The subject compensation will be determined without regard to any net settlement of, or taxes paid or payable or withheld on, such compensation, but there will not be any duplicative recovery by the Company.
−Removed: As specified in the listing standards, the Company cannot indemnify, or pay or reimburse for insurance for, a Section 16 officer for recoveries under this policy.
−Removed: The recovery period under the policy is three full years preceding the date our Board or a committee thereof as directed by the Board concludes, or reasonably should have concluded, that an accounting restatement is required .
−Removed: If applicable, the Company will provide the current or former Section 16 officer with a written demand for repayment or return and the method thereof.
−Removed: If such repayment or return is not made when due, the policy provides that the Company will take all reasonable and appropriate actions to recover such erroneously awarded compensation from such person.
+Added: The information required by Item 10 is hereby incorporated by reference to the sections of the 2025 Proxy Statement under the captions “Information Regarding the Board of Directors and Corporate Governance,” “Proposal 1 - Election of Directors,” “Executive Officers”, and “Delinquent Section 16(a) Reports”.
EXECUTIVE COMPENSATION
−Removed: The following tables and accompanying narrative disclosure discuss the compensation awarded to, earned by, or paid to:
−Removed: Andreeff, our President and Chief Executive Officer;
−Removed: Mathiesen, our Chief Financial Officer, Treasurer and Secretary;
−Removed: ● Antonella Favit-Van Pelt, our Chief Medical Officer.
−Removed: We refer to these three executive officers as the “named executive officers” (as determined pursuant to the SEC’s disclosure requirements for executive compensation in Item 402 of Regulation S-K).
−Removed: The following table presents summary information regarding the total compensation for services rendered in all capacities that was earned by the Company’s named executive officers during the fiscal years ended December 31, 2023 and 2022.
−Removed: Incentive Plan
−Removed: Name and Principal Position
−Removed: President and Chief
−Removed: Executive Officer
−Removed: Chief Financial Officer,
−Removed: Treasurer and Secretary
−Removed: Antonella Favit-Van Pelt
−Removed: Chief Medical Officer
−Removed: The amounts reflect the full grant date fair value for awards granted during the indicated year.
−Removed: The grant date fair value was computed in accordance with ASC Topic 718, Compensation-Stock Compensation.
−Removed: The assumptions we used in valuing options are described in Note 9 to our audited financial statements included in this Form 10-K.
−Removed: The table below details the amounts reported as all other compensation for 2023 include $23,412 in health benefits and $19,300 in 401(k) contributions for Dane C.
−Removed: Andreeff, $20,451 in health benefits and $30,000 in 401(k) contributions for Jeffrey S.
−Removed: Mathiesen, and $17,089 in health benefits and $18,750 in 401(k) contributions for Antonella Favit-Van Pelt along with life insurance premiums for each of the NEOs.
−Removed: Narrative to Summary Compensation Table
−Removed: The compensation program for the Company’s named executive officers for 2023 had three primary components:
−Removed: base salary, annual bonus and equity grants.
−Removed: Annual Base Salary
−Removed: We have entered into employment agreements with each of our named executive officers that establish annual base salaries, which are reviewed periodically by our Compensation Committee in order to compensate our named executive officers for the satisfactory performance of duties to the Company.
−Removed: Annual base salaries are intended to provide a fixed component of compensation to our named executive officers, reflecting their skill sets, experience, roles and responsibilities.
−Removed: Base salaries for our named executive officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent.
−Removed: On February 14, 2023, our Compensation Committee, in consultation with an independent compensation consultant, Grant Thornton LLP, approved a 5% increase to the base salaries of our executive officers for 2023 as an adjustment to account for cost of living increases.
−Removed: Pursuant to the Interim President and CEO Employment Letter Agreement entered into with Mr.
−Removed: Andreeff on August 23, 2020, Mr.
−Removed: Andreeff elected to take no additional compensation in return for his service as Interim President and Chief Executive Officer.
−Removed: Additionally, since he was not a member of any Board committees, Mr.
−Removed: Andreeff was not eligible for any additional cash retainer in respect of committee membership in 2022.
−Removed: Effective with his appointment as President and Chief Executive Officer on June 14, 2021, the Company entered into an employment agreement with Mr.
−Removed: Andreeff that provides for an annual base salary of $350,000 subject to annual review by the Compensation Committee.
−Removed: As a result of our Compensation Committee’s decision to increase our executive officers’ salaries by 5% to account for increases in cost of living, Mr.
−Removed: Andreeff’s annual base salary for 2023 was $386,000.
−Removed: Effective with his appointment as Chief Financial Officer, Treasurer and Secretary on June 14, 2021, the Company entered into an employment agreement with Mr.
−Removed: Mathiesen that provides for an annual base salary of $335,000, subject to annual review by the Compensation Committee.
−Removed: As a result of our Compensation Committee’s decision to increase our executive officers’ salaries by 5% to account for increases in cost of living, Mr.
−Removed: Mathiesen’s annual base salary for 2023 was $370,000.
−Removed: Favit-Van Pelt.
−Removed: Effective with her appointment as Chief Medical Officer on July 7, 2021, the Company entered into an employment agreement with Dr.
−Removed: Favit-Van Pelt that provides for an annual base salary of $340,000, subject to annual review by the Compensation Committee.
−Removed: As a result of our Compensation Committee’s decision to increase our executive officers’ salaries by 5% to account for increases in cost of living, Ms.
−Removed: Favit-Van Pelt’s annual base salary for 2023 was $375,000.
−Removed: Non-Equity Incentive Plan
−Removed: In 2023, each of the Company’s named executive officers had a target bonus, set forth as a percentage of annual base salary.
−Removed: Pursuant to the employment agreements between the Company and Messrs.
−Removed: Andreeff and Mathiesen, target bonuses for Messrs.
−Removed: Andreeff and Mathiesen were set at 50% and 40%, respectively, with the Compensation Committee able to determine that a portion of such target be paid in equity in lieu of cash.
−Removed: Under the employment agreement between the Company and Dr.
−Removed: Favit-Van Pelt, her target bonus was set at 35%.
−Removed: In February 2023, the Compensation Committee recommended, and the Board approved, performance targets for fiscal 2023 that it would consider in approving bonus payments for 2023.
−Removed: These targets included various corporate objectives related to company revenue goals, financing goals, clinical research and development goals, and a goal related to the transition of the Company’s manufacturer.
−Removed: In February 2024, the Compensation Committee determined that 50% of the performance targets had been met, and approved the bonus payments to Mr.
−Removed: Andreeff, Mr.
−Removed: Mathiesen, and Dr.
−Removed: Favit-Van Pelt at 50% of their respective targets.
−Removed: Equity-Based Awards
−Removed: Stock Options
−Removed: Our equity-based incentive awards which are mainly comprised of stock options are designed to align our interests with those of our employees and consultants, including our named executive officers.
−Removed: Our Compensation Committee has responsibility for granting equity-based incentive awards to our named executive officers.
−Removed: Vesting of equity awards is generally tied to continuous service with us and serves as an additional retention measure.
−Removed: Our executives generally are awarded an initial new hire grant upon commencement of employment.
−Removed: Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance.
−Removed: On February 14, 2023, our Board, upon recommendation of the Compensation Committee, approved the grant of an option to purchase 5,181,000 shares of Common Stock to Mr.
−Removed: Andreeff, an option to purchase 2,693,000 shares of Common Stock to Mr.
−Removed: Mathiesen, and an option to purchase 1,463,000 shares of common stock to Ms.
−Removed: Favit-Van Pelt pursuant to the Company’s 2022 Equity Incentive Plan (the “ 2022 Plan ”).
−Removed: Each of these stock options has an exercise price equal to the fair market value of a share of Common Stock as of the grant date, as determined in accordance with our 2022 Plan.
−Removed: Each of stock options granted to Messrs.
−Removed: Andreeff and Mathiesen and Ms.
−Removed: Favit-Van Pelt, respectively,
−Removed: vest in a series of twelve successive equal quarterly installments on the last day of each fiscal quarter beginning on March 31, 2023.
−Removed: Retirement Benefits and Other Compensation
−Removed: Our named executive officers do not participate in, or otherwise receive any benefits under, any pension or deferred compensation plan sponsored by us.
−Removed: We provide our employees a percentage match to the contributions made by our employees to the Company’s 401(k) savings plan and we provide life insurance benefits to our named executive officers.
−Removed: Our named executive officers were eligible to participate in our employee benefits, including health benefits, on the same basis as our other employees.
−Removed: We generally do not provide perquisites or personal benefits except in limited circumstances.
−Removed: Employment Agreement and Arrangements (including Payments upon Termination or Change in Control)
−Removed: The following is a description of our current executive employment agreements:
−Removed: In connection with the Company’s appointment of Mr.
−Removed: Andreeff as President and Chief Executive Officer on June 14, 2021, the Company entered into an Employment Agreement with Mr.
−Removed: Andreeff (the “ Andreeff Employment Agreement ”).
−Removed: The Andreeff Employment Agreement has an initial term of three years beginning on June 14, 2021 and automatically renews for an additional one year period at the end of the initial term and each anniversary thereafter, provided that at least 90 days prior to the expiration of the initial term or any renewal term the Board does not notify Mr.
−Removed: Andreeff of its intention not to renew.
−Removed: The Andreeff Employment Agreement entitles Mr.
−Removed: Andreeff to, among other benefits, the following compensation:
−Removed: ● An annual base salary of $350,000, reviewed at least annually;
−Removed: ● An annual cash bonus in an amount of up to 50% of annual base salary;
−Removed: provided, that the Company may elect to pay up to 50% of any earned annual bonus in fully vested shares of common stock in lieu of cash;
−Removed: ● Participation in equity-based long-term incentive compensation plans generally available to senior executive officers of the Company;
−Removed: ● Participation in welfare benefit plans, practices, policies and programs (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) made available to other senior executive officers of the Company;
−Removed: ● Prompt reimbursement for all reasonable expenses in accordance with the plans, practices, policies and programs of the Company; and
−Removed: ● 20 days of paid vacation, to be taken in accordance with the Company’s policies and practices.
−Removed: In the event that the Company consummates a transaction that constitutes a Change in Control (as defined in the Andreeff Employment Agreement), all of the unvested shares underlying Mr.
−Removed: Andreeff’s options will fully vest and become exercisable immediately prior to the effectiveness of such Change in Control.
−Removed: In the event of Mr.
−Removed: Andreeff’s death during the employment period or a termination due to disability, for cause by the Company or as a result of resignation without good reason, Mr.
−Removed: Andreeff or his beneficiaries or legal representatives will be provided any annual base salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the employment period ends and the following additional other benefits under the Andreeff Employment Agreement (the “ Unconditional Entitlements ”):
−Removed: ● All benefits payable to Mr.
−Removed: Andreeff under any employee benefit plans (including, without limitation any pension plans or 401(k) plans) of the Company or any of its affiliates applicable to Mr.
−Removed: Andreeff at the time of his
−Removed: termination of employment and all amounts and benefits (other than the Conditional Benefits) which are vested or which Mr.
−Removed: Andreeff is otherwise entitled to receive under the terms of any plan, policy, practice or program of, or any contract or agreement with, the Company, at or subsequent to the Termination Date without regard to the performance by Mr.
−Removed: Andreeff of further services or the resolution of a contingency, will be paid or provided according to the terms of such plans, as determined on the basis of the actual date of termination of Mr.
−Removed: Andreeff’s employment with the Company;
−Removed: ● Any right which Mr.
−Removed: Andreeff may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Mr.
−Removed: Andreeff’s activities as an officer, director or employee of the Company shall be unaffected by Mr.
−Removed: Andreeff’s termination of employment and shall remain in effect;
−Removed: Andreeff will be entitled to continuation of health care coverage as is required under, and in accordance with, applicable law or otherwise provided in accordance with the Company’s policies;
−Removed: Andreeff will be entitled to reimbursement, in accordance with the Company’s policies regarding expense reimbursement for all business expenses incurred prior to the Termination Date;
−Removed: ● Except to the extent additional rights are provided upon Mr.
−Removed: Andreeff’s qualifying to receive the Conditional Benefits (as defined in the Andreeff Employment Agreement), Mr.
−Removed: Andreeff’s rights with respect to any stock option, restricted stock or other equity award granted by the Company will be governed by the terms and provisions of the applicable equity incentive plan, stock option award documents or grant agreement.
−Removed: In the event of a resignation by Mr.
−Removed: Andreeff for good reason, the exercise by the Company of its right to terminate his employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the initial term or any renewal term (not within twelve months following or three months prior to the effective date of a Change in Control), Mr.
−Removed: Andreeff will receive the Unconditional Entitlements and, subject to his signing and delivering to the Company and not revoking a general release of claims in favor of the Company and certain related parties, the Company shall provide Mr.
−Removed: Andreeff (i) a severance amount equal to the sum of his annual base salary as of the termination date and a pro-rated portion of his cash bonus for the year in which the termination occurs, (ii) Company-paid continued medical coverage for up to twelve months following such termination, and (iii) continued vesting of equity awards that would have vested if he had remained employed with the Company through the end of the then remaining portion of the initial term or the renewal term, as applicable (the “ Conditional Benefits ”).
−Removed: In the event of a resignation by Mr.
−Removed: Andreeff for good reason, the exercise by the Company of its right to terminate his employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the initial term or any renewal term, in each case, within twelve months following or three months prior to the effective date of a Change in Control, Mr.
−Removed: Andreeff shall receive (i) the Unconditional Entitlements, (ii) 2.0 times the sum of his annual base salary and target cash bonus, (iii) accelerated vesting of all equity awards that were assumed, continued or substituted by the surviving or acquiring corporation in the Change in Control and remain subject to time-based vesting conditions, if any, and (iv) the Conditional Benefits except the severance amount provided in the Andreeff Employment Agreement.
−Removed: During employment and for the one year period after termination, Mr.
−Removed: Andreeff is subject to non-solicitation and non-competition obligations.
−Removed: In connection with the company’s appointment of Mr.
−Removed: Mathiesen as Chief Financial Officer, Treasurer and Secretary on June 14, 2021, the Company entered into an Employment Agreement with Mr.
−Removed: Mathiesen (the “ Mathiesen Employment Agreement ”).
−Removed: The Mathiesen Employment Agreement has an initial term of three years beginning on June 14, 2021 and automatically renews for an additional one year period at the end of the initial term and each anniversary thereafter, provided that at least 90 days prior to the expiration of the initial term or any renewal term the Board does not notify Mr.
−Removed: Mathiesen of its intention not to renew.
−Removed: The Employment Agreement entitles Mr.
−Removed: Mathiesen to, among other benefits, the following compensation:
−Removed: ● An annual base salary of $335,000, reviewed at least annually;
−Removed: ● An annual cash bonus in an amount of up to 40% of annual base salary, provided, that the Company may elect to pay up to 70% of any earned annual bonus in fully vested shares of common stock in lieu of cash;
−Removed: ● Participation in equity-based long-term incentive compensation plans generally available to senior executive officers of the Company;
−Removed: ● Participation in welfare benefit plans, practices, policies and programs (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) made available to other senior executive officers of the Company;
−Removed: ● Prompt reimbursement for all reasonable expenses in accordance with the plans, practices, policies and programs of the Company; and
−Removed: ● 20 days of paid vacation, to be taken in accordance with the Company’s policies and practices.
−Removed: In the event that the Company consummates a transaction that constitutes a Change in Control (as defined in the Mathiesen Employment Agreement), all of the unvested shares underlying Mr.
−Removed: Mathiesen’s options will fully vest and become exercisable immediately prior to the effectiveness of such Change in Control.
−Removed: In the event of Mr.
−Removed: Mathiesen’s death during the employment period or a termination due to disability, for cause by the Company or as a result of resignation without good reason, Mr.
−Removed: Mathiesen or his beneficiaries or legal representatives will be provided any annual base salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the employment period ends and the following additional other benefits under the Mathiesen Employment Agreement (the “ Unconditional Entitlements ”):
−Removed: ● All benefits payable to Mr.
−Removed: Mathiesen under any employee benefit plans (including, without limitation any pension plans or 401(k) plans) of the Company or any of its affiliates applicable to Mr.
−Removed: Mathiesen at the time of his termination of employment and all amounts and benefits (other than the Conditional Benefits (as defined in the Mathiesen Employment Agreement)) which are vested or which Mr.
−Removed: Mathiesen is otherwise entitled to receive under the terms of any plan, policy, practice or program of, or any contract or agreement with, the Company, at or subsequent to the termination date without regard to the performance by Mr.
−Removed: Mathiesen of further services or the resolution of a contingency, will be paid or provided according to the terms of such plans, as determined on the basis of the actual date of termination of Mr.
−Removed: Mathiesen’s employment with the Company;
−Removed: ● Any right which Mr.
−Removed: Mathiesen may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Mr.
−Removed: Mathiesen’s activities as an officer, director or employee of the Company shall be unaffected by Mr.
−Removed: Mathiesen’s termination of employment and shall remain in effect;
−Removed: Mathiesen will be entitled to continuation of health care coverage as is required under, and in accordance with, applicable law or otherwise provided in accordance with the Company’s policies;
−Removed: Mathiesen will be entitled to reimbursement, in accordance with the Company’s policies regarding expense reimbursement for all business expenses incurred prior to the Termination Date;
−Removed: ● Except to the extent additional rights are provided upon Mr.
−Removed: Mathiesen’s qualifying to receive the Conditional Benefits , Mr.
−Removed: Mathiesen’s rights with respect to any stock option, restricted stock or other equity award granted by the Company will be governed by the terms and provisions of the applicable equity incentive plan, stock option award documents or grant agreement.
−Removed: In the event of a resignation by Mr.
−Removed: Mathiesen for good reason, the exercise by the Company of its right to terminate his employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the initial term or any renewal term (not within twelve months following or three months prior to the effective date of a Change in Control), Mr.
−Removed: Mathiesen will receive the Unconditional Entitlements and, subject to his signing and delivering to the Company and not revoking a general release of claims in favor of the Company and certain related parties, the Company shall provide Mr.
−Removed: Mathiesen (i) a severance amount equal to the sum of his annual base
−Removed: salary as of the termination date and a pro-rated portion of his cash bonus for the year in which the termination occurs, (ii) Company-paid continued medical coverage for up to twelve months following such termination, and (iii) continued vesting of equity awards that would have vested if he had remained employed with the Company through the end of the then remaining portion of the Initial Term or the Renewal Term, as applicable (the “ Conditional Benefits ”).
−Removed: In the event of a resignation by Mr.
−Removed: Mathiesen for good reason, the exercise by the Company of its right to terminate his employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the Initial Term or any renewal term, in each case, within twelve months following or three months prior to the effective date of a Change in Control, Mr.
−Removed: Mathiesen shall receive (i) the Unconditional Entitlements, (ii) 1.5 times the sum of his annual base salary and target cash bonus, (iii) accelerated vesting of all equity awards that were assumed, continued or substituted by the surviving or acquiring corporation in the Change in Control and remain subject to time-based vesting conditions, if any, and (iv) the Conditional Benefits except the severance amount.
−Removed: During employment and for the one year period after termination, Mr.
−Removed: Mathiesen is subject to non-solicitation and non-competition requirements.
−Removed: Antonella Favit-Van Pelt, M.D., Ph.D.
−Removed: Effective with her appointment as Chief Medical Officer on July 7, 2021, Dr.
−Removed: Favit-Van Pelt and the Company entered into an employment agreement (the “ Favit-Van Pelt Employment Agreement ”) with an initial term of three years beginning on July 7, 2021 and which automatically renews for an additional one year period at the end of the initial term and each anniversary thereafter, provided that at least 90 days prior to the expiration of the initial term or any renewal term the Board does not notify Dr.
−Removed: Favit-Van Pelt of its intention not to renew.
−Removed: The Favit-Van Pelt Employment Agreement entitles Dr.
−Removed: Favit-Van Pelt to, among other benefits, the following compensation:
−Removed: ● An annual base salary of $340,000, reviewed at least annually;
−Removed: ● An annual cash bonus in an amount of up to 35% of annual base salary;
−Removed: ● Participation in equity-based long-term incentive compensation plans generally available to senior executive officers of the Company;
−Removed: ● Participation in welfare benefit plans, practices, policies and programs (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) made available to other senior executive officers of the Company;
−Removed: ● Prompt reimbursement for all reasonable expenses in accordance with the plans, practices, policies and programs of the Company; and
−Removed: ● 20 days of paid vacation, to be taken in accordance with the Company’s policies and practices.
−Removed: In the event that the Company consummates a transaction that constitutes a Change in Control (as defined in the Favit-Van Pelt Employment Agreement), all of the unvested shares underlying Dr.
−Removed: Favit-Van Pelt’s options will fully vest and become exercisable immediately prior to the effectiveness of such Change in Control.
−Removed: In the event of Dr.
−Removed: Favit-Van Pelt’s death during the employment period or a termination due to disability, for cause by the Company or as a result of resignation without good reason (the date of such termination, the “ Termination Date ”), Dr.
−Removed: Favit-Van Pelt or her beneficiaries or legal representatives will be provided any annual base salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the employment period ends and the following additional other benefits under the Favit-Van Pelt Employment Agreement (the “ Unconditional Entitlements ”):
−Removed: ● All benefits payable to Dr.
−Removed: Favit-Van Pelt under any employee benefit plans (including, without limitation any pension plans or 401(k) plans) of the Company or any of its affiliates applicable to Dr.
−Removed: Favit-Van Pelt at the time of her termination of employment and all amounts and benefits (other than the Conditional Benefits) which are vested or which Dr.
−Removed: Favit-Van Pelt is otherwise entitled to receive under the terms of any plan, policy, practice or program of, or any contract or agreement with, the Company, at or subsequent to the Termination Date without
−Removed: regard to the performance by Dr.
−Removed: Favit-Van Pelt of further services or the resolution of a contingency, will be paid or provided according to the terms of such plans, as determined on the basis of the actual date of termination of Dr.
−Removed: Favit-Van Pelt’s employment with the Company;
−Removed: ● Any right which Dr.
−Removed: Favit-Van Pelt may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Dr.
−Removed: Favit-Van Pelt’s activities as an officer, director or employee of the Company shall be unaffected by Dr.
−Removed: Favit-Van Pelt’s termination of employment and shall remain in effect;
−Removed: Favit-Van Pelt will be entitled to continuation of health care coverage as is required under, and in accordance with, applicable law or otherwise provided in accordance with the Company’s policies;
−Removed: Favit-Van Pelt will be entitled to reimbursement, in accordance with the Company’s policies regarding expense reimbursement for all business expenses incurred prior to the Termination Date;
−Removed: ● Except to the extent additional rights are provided upon Dr.
−Removed: Favit-Van Pelt’s qualifying to receive the Conditional Benefits (as defined in the Favit-Van Pelt Employment Agreement), Dr.
−Removed: Favit-Van Pelt’s rights with respect to any stock option, restricted stock or other equity award granted by the Company will be governed by the terms and provisions of the applicable equity incentive plan, stock option award documents or grant agreement.
−Removed: In the event of a resignation by Dr.
−Removed: Favit-Van Pelt for good reason, the exercise by the Company of its right to terminate her employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the initial term or any renewal term (not within twelve months following or three months prior to the effective date of a Change in Control), Dr.
−Removed: Favit-Van Pelt will receive the Unconditional Entitlements and, subject to her signing and delivering to the Company and not revoking a general release of claims in favor of the Company and certain related parties, the Company shall provide Dr.
−Removed: Favit-Van Pelt (i) a severance amount equal to the sum of her annual base salary as of the termination date and a pro-rated portion of her cash bonus for the year in which the termination occurs, (ii) Company-paid continued medical coverage for up to twelve months following such termination, and (iii) continued vesting of equity awards that would have vested if she had remained employed with the Company through the end of the then remaining portion of the Initial Term or the Renewal Term, as applicable (the “ Conditional Benefits ”).
−Removed: In the event of a resignation by Dr.
−Removed: Favit-Van Pelt for good reason, the exercise by the Company of its right to terminate her employment other than for cause, death or disability or the Company’s election not to extend the employment period upon expiration of the Initial Term or any Renewal Term, in each case, within twelve months following or three months prior to the effective date of a Change in Control, Dr.
−Removed: Favit-Van Pelt shall receive (i) the Unconditional Entitlements, (ii) 1.5 times the sum of her annual base salary and target cash bonus, (iii) accelerated vesting of all equity awards that were assumed, continued or substituted by the surviving or acquiring corporation in the Change in Control and remain subject to time-based vesting conditions, if any, and (iv) the Conditional Benefits except the severance amount.
−Removed: During employment and for the one year period after termination, Dr.
−Removed: Favit-Van Pelt is subject to non-solicitation and non-competition requirements.
−Removed: Equity Incentive Plans
−Removed: Certain of our named executive officers have outstanding awards under (i) 2018 Plan, (ii) the 2022 Plan and (iii) the Company’s 2021 Inducement Plan (the “ Inducement Plan ”, and together with the 2018 Plan and the 2022 Plan, the “ Plans ”).
−Removed: Under the 2018 Plan and the 2022 Plan, the Compensation Committee may provide, in individual award agreements or in any other written agreement between a participant and the company that the award will be subject to additional acceleration of vesting and exercisability in the event of a termination of employment or change in control.
−Removed: Under the Inducement Plan, an award may be subject to additional acceleration of vesting and exercisability upon or after a change in control as may be provided in the award agreement for such award or as may be provided in any other written agreement between the Company and the participant, but in the absence of such provision, no such acceleration will automatically occur.
−Removed: Outstanding Equity Awards at December 31, 2023
−Removed: The following tables set forth certain information about equity awards granted to our named executive officers that remain outstanding as of December 31, 2023.
−Removed: Opti on Awards
−Removed: Unexercisable
−Removed: Antonella Favit-Van Pelt
−Removed: These options were granted on May 25, 2021.
−Removed: All of the shares subject to the option have vested.
−Removed: This option was granted on June 2, 2021.
−Removed: All of the shares subject to the option have vested.
−Removed: This option was granted on August 8, 2017.
−Removed: All of the shares subject to the option have vested.
−Removed: This option was granted on May 15, 2018.
−Removed: All of the shares subject to the option have vested.
−Removed: This option was granted on March 28, 2019.
−Removed: All of the shares subject to the option have vested.
−Removed: These options were granted on June 10, 2020.
−Removed: All of the shares subject to the option have vested.
−Removed: These options were granted on May 25, 2021.
−Removed: All of the shares subject to the option have vested.
−Removed: This option was granted on June 2, 2021.
−Removed: All of the shares subject to the option have vested.
−Removed: These options were granted on June 14, 2021.
−Removed: 25% of the shares were fully vested as of the grant date;
−Removed: 25% of the shares will vest based on a performance condition;
−Removed: of the remaining shares, 25% of such number remaining shall vest on the one year anniversary of the grant date, and the remainder shall vest in thirty-six successive equal monthly installments on the last day of each full month.
−Removed: This option was granted on July 7, 2021.
−Removed: The shares vest in equal annual installments over 4 years from the date of grant.
−Removed: This options was granted on May 23, 2022.
−Removed: 583 shares of this option vested on June 30, 2022 and the remainder shall vest in ten successive equal quarterly installments on the last day of each fiscal quarter beginning on September 30, 2022.
−Removed: These options were granted on September 13, 2022 and shall vest in 12 successive equal quarterly installments on the last day of each fiscal quarter beginning on September 30, 2022.
−Removed: This option was granted on May 23, 2022.
−Removed: 123 shares of this option vested on June 30, 2022 and the remainder shall vest in ten successive equal quarterly installments on the last day of each fiscal quarter beginning on September 30, 2022.
−Removed: This option was granted on February 16, 2022 and shall vest in 12 successive equal quarterly installments on the last day of each fiscal quarter beginning on March 31, 2022.
−Removed: This option was granted on September 13, 2022 and shall vest in 12 successive equal quarterly installments on the last day of each fiscal quarter beginning on September 30, 2022.
−Removed: This option was granted on February 14, 2023 and shall vest in 12 successive equal quarterly installments on the last day of each fiscal quarter beginning on March 31, 2023.
−Removed: Chief Executive Officer Pay Ratio
−Removed: As a “smaller reporting company”, we are not required to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees, as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
−Removed: Non-Employee Director Compensation
−Removed: The Company maintains a non-employee director compensation policy, effective as of April 1, 2021, pursuant to which all of our non-employee directors receive an annual cash retainer of $35,000 for Board service except for the Chairman of the Board who receives an annual cash retainer of $68,000.
−Removed: In addition, directors receive an additional cash retainer for serving as a committee chair or member as follows:
−Removed: Nominating and
−Removed: Committee Chair
−Removed: Committee Member (other than the Chair)
−Removed: Further, each director receives an annual equity retainer with a target value of approximately $50,000.
−Removed: The equity retainer is paid 70% in options to purchase shares of our Common Stock, which vest in increments of 1/12 per month and 30% in restricted stock units (RSUs), which vest in increments of 1/12 per month.
−Removed: We also reimburse non-employee directors for reasonable expenses incurred in connection with attending Board and committee meetings.
−Removed: The following table shows certain information with respect to the compensation of all non-employee directors of the Company for the fiscal year ended December 31, 2023.
−Removed: Fees earned or
−Removed: Paul Buckman (1)
−Removed: Sherrie Perkins (2)
−Removed: Blane Walter (4)
−Removed: Buckman held options to purchase a total of 6,180 shares of common stock and 557 unvested RSUs at December 31, 2023.
−Removed: Perkins held options to purchase a total of 6,190 shares of common stock and 557 unvested RSUs at December 31, 2023.
−Removed: Vice Admiral (Retired) Straw held options to purchase a total of 6,274 shares of common stock and 557 unvested RSUs at December 31, 2023.
−Removed: Walter held options to purchase a total of 6,273 shares of common stock and 557 unvested RSUs at December 31, 2023.
−Removed: The amounts reflect the full grant date fair value for awards granted during the fiscal year ended December 31, 2023.
−Removed: The grant date fair value was computed in accordance with ASC Topic 718, Compensation-Stock Compensation.
−Removed: The assumptions we used in valuing options are described in Note 9 to our audited financial statements included in this Form 10-K.
+Added: The information required by Item 11 is hereby incorporated by reference to the sections of the 2025 Proxy Statement under the captions “Executive Compensation” and “Information Regarding the Board of Directors and Corporate Governance– Non-Employee Director Compensation.”
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
−Removed: The following table sets forth certain information regarding the ownership of our Common Stock as of March 1, 2024 by:
−Removed: (i) each director;
−Removed: (ii) each of our named executive officers;
−Removed: (iii) all executive officers and directors of the Company as a group;
−Removed: and (iv) all those known by the Company to be beneficial owners of more than five percent of our Common Stock.
−Removed: We have determined beneficial ownership in accordance with the rules of the SEC.
−Removed: These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities.
−Removed: In addition, these rules require that we include shares of Common Stock issuable pursuant to the vesting of warrants and the exercise of stock options that are either immediately exercisable or exercisable within 60 days of March 1, 2024, and restricted stock units that vest within 60 days of March 1, 2024.
−Removed: These shares are deemed to be outstanding and beneficially owned by the person holding those warrants or options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
−Removed: This table is based on information supplied by officers, directors and principal stockholders and Schedule 13D, Schedule 13G and Section 16 filings, if any, with the SEC.
−Removed: Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
−Removed: Except as otherwise noted below, the address for persons listed in the table is c/o Helius Medical Technologies, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940.
−Removed: As of March 1, 2024, we had 887,295 shares of Common Stock outstanding.
−Removed: Beneficial Ownership (1)
−Removed: Number of Shares
−Removed: of Common Stock
−Removed: Beneficial Owner
−Removed: Beneficially Owned
−Removed: Columbus Capital Management, LLC (2)
−Removed: Hudson Bay Capital Management LP (3)
−Removed: Antonella Favit-Van Pelt (4)
−Removed: Sherrie Perkins (5)
−Removed: Blane Walter (7)
−Removed: Paul Buckman (8)
−Removed: Mathiesen (9)
−Removed: Andreeff (10)
−Removed: All current executive officers and directors as a group (7 persons) (11)
−Removed: * Less than one percent
−Removed: This table is based upon information supplied by officers, directors and principal stockholders.
−Removed: Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.
−Removed: Applicable percentages are based on 887,295 shares of common stock outstanding on March 1, 2024.
−Removed: Includes 50,000 shares of common stock, and 20,116 shares of common stock issuable upon the exercise of warrants.
−Removed: Columbus Capital Management, LLC, which serves as the general partner and investment manager to each of Columbus Capital QP Partners, L.P., Columbus Capital Partners, L.P., and Columbus Capital Offshore QP Fund, LTD.
−Removed: (collectively “the Funds”), and Mr.
−Removed: Ockner, as Managing Member of Columbus Capital Management, LLC, with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares of common stock held by the Funds.
−Removed: The business address of Matthew D.
−Removed: Ockner is 1 Embarcadero Center, Suite 1130, San Francisco, CA 94111.
−Removed: The percentage in this table reflects that the reporting persons may not exercise the warrants to the extent such exercise would cause the reporting persons to beneficially own a number of shares of common stock that would exceed 9.99% of our then outstanding common stock following such exercise.
−Removed: Includes 60,422 shares of common stock issuable upon the exercise of warrants.
−Removed: Hudson Bay Capital Management LP (“Hudson Bay”), which serves as the investment manager to Hudson Master Fund Ltd.
−Removed: (the “Fund”) with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares of Common stock held by the Fund.
−Removed: The business address of Hudson Bay Capital Management LP is 28 Havemeyer Place, 2nd Floor, Greenwich, Connecticut 06830.
−Removed: The percentage in this table reflects that the reporting persons may not exercise the warrants to the extent such exercise would cause the reporting persons to beneficially own a number of shares of common stock that would exceed 9.99% of our then outstanding common stock following such exercise.
−Removed: Includes 12,939 shares of common stock issuable upon the exercise of stock options.
−Removed: Includes 1,520 shares of common stock, 6,190 shares of common stock issuable upon the exercise of stock options, and 281 shares of common stock issuable upon the vesting of restricted stock units.
−Removed: Includes 1,520 shares of common stock, 6,274 shares of common stock issuable upon the exercise of stock options, and 281 shares of commons issuable upon the vesting of restricted stock units.
−Removed: Includes 1,612 shares of Common Stock, 6,273 shares of common stock issuable upon the exercise of stock options, and 281 shares of common stock issuable upon the vesting of restricted stock units.
−Removed: Includes 1,516 shares of common stock, 6,180 shares of common stock issuable upon the exercise of stock options, and 281 shares of common stock issuable upon the vesting of restricted stock units.
−Removed: Includes 238 shares of common stock and 25,069 shares of common stock issuable upon the exercise of stock options.
−Removed: Includes 16,511 shares of common stock and 246 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Partners, L.P., 3,402 shares of common stock and 67 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Partners I, L.P., 11,594 shares of common stock and 163 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Discovery I, L.P., 1,882 shares of common stock and28 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Offshore, Ltd., 29 shares on common stock held directly by Mr.
−Removed: Andreeff and 53,193 shares of common stock issuable upon the exercise of stock options held directly by Mr.
−Removed: Andreeff has sole voting and dispositive power over shares held by Maple Leaf Partners, L.P., Maple Leaf Partners I, L.P., Maple Leaf Discovery I, L.P.
−Removed: and Maple Leaf Offshore, Ltd.
−Removed: Includes 39,824 shares of common stock, 504 shares of common stock issuable upon the exercise of warrants, 116,118 shares of common stock issuable upon the exercise of stock options, and 1,124 shares of common stock issuable upon the vesting of restricted stock units.
−Removed: Securities Authorized for Issuance Under Equity Compensation Plans
−Removed: The following table presents information as of December 31, 2023 with respect to compensation plans under which shares of the Company’s Common Stock may be issued.
−Removed: Weighted-average
−Removed: column(a)) (1)(2)
−Removed: Plan Category
−Removed: Equity compensation plans not approved by security holders(3)
−Removed: Equity compensation plan approved by security holders
−Removed: The number of shares of common stock reserved for issuance under our 2022 Plan automatically increases on January 1st of each calendar year, starting on January 1, 2023 through January 1, 2028, to an amount equal to 20% of the total number of fully-diluted shares of our common stock as of December 31 of the preceding calendar year, or a lesser number of shares determined by our Board.
−Removed: Consists of 14,121 shares remaining available for issuance under the 2022 Plan, 0 shares remaining available for issuance under the 2018 Plan, and 9,240 shares remaining available for issuance under the 2021 Inducement Plan
−Removed: There are no other securities available for future issuance under Plans of the Company as of December 31, 2023.
+Added: The information required by Item 12 is hereby incorporated by reference to the sections of the 2025 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management" and "Executive Compensation.”
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
−Removed: Certain Relationships and Related Transactions
−Removed: The following includes a summary of transactions since January 1, 2023 to which the Company has been a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the average of the Company’s total assets at year end for the last two completed fiscal years, and in which any of our directors, executive officers or holders of more than five percent of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest.
−Removed: Other than described below, there have not been, nor are there currently any proposed, transactions or series of similar transactions to which we have been or will be a party other than compensation arrangements, which include equity and other compensation, termination, change in control and other arrangements, which are described under “Item 11 - Executive Compensation.”
−Removed: Indemnification Agreements
−Removed: The Company provides indemnification for its directors and officers so that they will be free from undue concern about personal liability in connection with their service to the Company.
−Removed: Under the Company’s Second Amended and Restated Bylaws, the Company is required to indemnify its directors and officers to the extent not prohibited under Delaware or other applicable law.
−Removed: The Company has also entered into indemnity agreements with its officers and directors.
−Removed: These agreements provide, among other things, that the Company will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of the Company, and otherwise to the fullest extent permitted under applicable law and the Company’s Second Amended and Restated Bylaws.
−Removed: Policies and Procedures for Transactions with Related Parties
−Removed: In January 2018, the Company adopted a written Related-Person Transactions Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration and approval or ratification of “related-persons transactions.” For purposes of the Company’s policy only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company and any “related person” are participants involving an amount that exceeds $120,000.
−Removed: Transactions involving compensation for services provided to the Company as an employee, director, consultant or similar capacity by a related person are not covered by this policy.
−Removed: A related person is any executive officer, director, nominee to become director, or more than 5% stockholders of the Company, including any of their immediate family members, and any entity owned or controlled by such persons.
−Removed: Under the policy, where a transaction has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the Board) for consideration and approval or ratification.
−Removed: The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to the Company of the transaction and whether any alternative transactions were available.
−Removed: To identify related-person transactions in advance, the Company relies on information supplied by its executive officers, directors and certain significant stockholders.
−Removed: In considering related-person transactions, the Audit Committee takes into account the relevant available facts and circumstances including, but not limited to (a) the risks, costs and benefits to the Company, (b) the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products and (e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
−Removed: In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval.
−Removed: The policy requires that, in determining whether to approve, ratify or reject a related-person transaction, the Audit Committee consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of the Company and its stockholders, as the Audit Committee determines in the good faith exercise of its discretion.
−Removed: The Audit Committee and/or the independent directors of the Board review such proposed business transactions to ensure that the Company’s involvement in such transactions is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and is in the best interests of the Company and its stockholders.
−Removed: Director Independence
−Removed: The Board reviews its composition annually, including the determination of the independence of our directors.
−Removed: Our Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent” set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
−Removed: Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board has affirmatively determined that all of the Company’s director nominees, other than Messrs.
−Removed: Andreeff and Mathiesen, are independent, as defined under the Nasdaq listing standards.
−Removed: In making those independence determinations, the Board took into account certain relationships and transactions that occurred in the ordinary course of business between the Company and entities with which some of its directors are or have been affiliated.
−Removed: The Board considered all relationships and transactions that occurred during any 12-month period within the last three fiscal years.
−Removed: The Board determined that the relationships would not interfere with their exercise of independent judgment in carrying out their responsibilities as directors.
+Added: The information required by Item 13 is hereby incorporated by reference to the sections of the 2025 Proxy Statement under the captions “Certain Relationships and Related Transactions” and “Information Regarding the Board of Directors and Corporate Governance - Independence of the Board of Directors.”
PRINCIPAL ACCOUNTING FEES AND SERVICES
−Removed: The Audit Committee retained Baker Tilly US, LLP to audit the Company’s consolidated financial statements for the years ended December 31, 2023 and December 31, 2022.
−Removed: The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2023 and December 31, 2022 (amounts in thousands).
−Removed: Fiscal Year Ended
−Removed: Fiscal Year Ended
−Removed: December 31, 2023
−Removed: December 31, 2022
−Removed: Audit Fees (1)
−Removed: Audit-Related Fees
−Removed: All Other Fees
−Removed: Audit fees included amounts billed for professional services rendered in connection with the audit of our consolidated financial statements and review of our interim consolidated financial statements included in quarterly reports and services that are normally provided by our principal accountant in connection with statutory and regulatory filings as well as professional services rendered in connection with the Company’s public offerings, including reviewing registration statements and prospectuses and preparing comfort letters.
−Removed: Tax fees included amounts billed for professional services for tax compliance, tax advice and tax planning.
−Removed: These services included assistance regarding federal, state and tax compliance.
−Removed: All fees described above were pre-approved by the Audit Committee.
−Removed: Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
−Removed: The Company’s Audit Committee has adopted policies and procedures for the pre-approval of audit services and permitted non-audit and tax services rendered by our independent registered public accounting firm.
−Removed: The policy generally provides pre-approval of specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.
−Removed: Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service.
−Removed: The Audit Committee must pre-approve all services provided by the independent registered public accounting firm.
−Removed: The Audit Committee has determined that the rendering of services other than audit services by Baker Tilly US, LLP is compatible with maintaining the principal accountant’s independence.
+Added: The information required by Item 14 is hereby incorporated by reference to the sections of the 2025 Proxy Statement under the caption “Proposal 2 - Ratification of Appointment of Independent Registered Public Accounting Firm.”
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
8 unchanged sentences
Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Form 8-K filed March 15, 2024)
−Removed: Form of Warrant (incorporated by reference to Exhibit 4.1 to the Form 8-K filed October 26, 2020)
Form of Warrant (incorporated by reference to Exhibit 4.1 to the Form S-1/A filed January 20, 2021)
6 unchanged sentences
and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.2 to the Form 8-K filed August 9, 2022)
+Added: Form of Series A Warrant to purchase shares of Common Stock (incorporated by reference to Exhibit 4.1 to the Form 8-K filed May 9, 2024)
+Added: Form of Series B Warrant to purchase shares of Common Stock (incorporated by reference to Exhibit 4.2 to the Form 8-K filed May 9, 2024)
+Added: Form of Placement Agent Warrant to purchase shares of Common Stock (incorporated by reference to Exhibit 4.3 to the Form 8-K filed May 9, 2024)
+Added: Form of Pre-Funded Warrant to purchase shares of Common Stock (incorporated by reference to Exhibit 4.4 to the Form 8-K filed May 9, 2024)
+Added: Form of Inducement Warrant to purchase shares of Common Stock (incorporated by reference to Exhibit 4.1 to the Form 8-K filed January 24, 2025)
License Agreement between Advanced NeuroRehabilitation, LLC and Yuri Danilov, Mitchell Tyler, Kurt Kaczmarek and John Klus, dated June 29, 2011 (incorporated by reference to Exhibit 10.8 to the Amendment to Form S-1 filed with the SEC on September 23, 2014)
2 unchanged sentences
Design and Manufacturing Consultant Agreement between Helius Medical, Inc and Clinvue, LLC, dated January 30, 2013 (incorporated by reference to Exhibit 10.3 to the Form S-1 filed with the SEC on July 14, 2014)
−Removed: Commercial Development-to-Supply Program between Helius Medical, Inc and Ximedica, dated October 25, 2013 (incorporated by reference to Exhibit 10.4 to the Form S-1 filed with the SEC on July 14, 2014)
Asset Purchase Agreement between the Company and A&B (HK) Company Limited, dated as of October 9, 2015 (incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the SEC on October 16, 2015)
10 unchanged sentences
2016 Omnibus Incentive Plan Form of Canada Option Grant Agreement (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on May 18, 2017)
+Added: Commercial Lease Agreement, dated November 29, 2021 between Helius Medical, Inc and 660 Tudor Square, L.P.
+Added: Lease Addendum #1, dated January 16, 2025 between Helius Medical Technologies, Inc.
+Added: and 660 Tudor Square, L.P.
2018 Omnibus Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Form 10-Q filed November 8, 2018)
17 unchanged sentences
2021 Inducement Plan (incorporated by reference to Exhibit 4.5 to the Form S-8 filed July 7, 2021)
+Added: Amendment to the Helius Medical Technologies, Inc.
+Added: 2021 Inducement Plan (incorporated by reference to Exhibit 4.8 to the Form S-8 filed July 24, 2024)
Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Helius Medical Technologies, Inc.
2021 Inducement Plan (incorporated by reference to Exhibit 4.6 to the Form S-8 filed July 7, 2021)
−Removed: Purchase Agreement between Helius Medical Technologies, Inc.
−Removed: and Lincoln Park Capital Fund, LLC dated September 1, 2021 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on September 2, 2021)
Employment Agreement between Helius Medical Technologies, Inc.
2 unchanged sentences
2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on February 18, 2022)
+Added: Amendment to the Helius Medical Technologies, Inc.
+Added: 2022 Equity Incentive Plan, effective as of June 27, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 28, 2024)
Helius Medical Technologies, Inc.
2 unchanged sentences
and Roth Capital Partners, LLC, dated June 23, 2023 (incorporated by reference to Exhibit 1.1 to the Form 8-K filed on June 23, 2023)
+Added: Placement Agency Agreement dated as of May 6, 2024 by and between Helius Medical Technologies, Inc.
+Added: and Craig-Hallum Capital Group LLC (incorporated by reference to Exhibit 10.1 to the Form 8-K filed May 9, 2024)
+Added: Insider Trading Policy
Subsidiaries of Helius Medical Technologies, Inc.
28 unchanged sentences
To the shareholders and the board of directors of Helius Medical Technologies, Inc.:
−Removed: Opinion on the Consolidated Financial Statements
+Added: Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Helius Medical Technologies, Inc.
22 unchanged sentences
Critical Audit Matter
−Removed: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Critical audit matter is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Critical Audit Matter Description
6 unchanged sentences
The primary procedures we performed to address this critical audit matter included:
−Removed: ◾ With the assistance of a firm valuation specialist, evaluated the methodology(ies) and key assumptions used by management to assess the Company’s fair value of the warrant liability, including assessing the reasonableness of the source information underlying the valuation assumptions.
−Removed: ◾ Performing an independent calculation to test the reasonableness of the fair value of the warrant liability.
+Added: ◾ Evaluated the methodologies, with the assistance of a firm valuation specialist, and key assumptions used by management to assess the Company’s fair value of the warrant liability, including assessing the reasonableness of the source information underlying the valuation assumptions.
+Added: ◾ Performed an independent calculation to test the reasonableness of the fair value of the warrant liability.
/s/ Baker Tilly US, LLP
5 unchanged sentences
(in thousands, except share and per share amounts)
+Added: December 31, 2024
+Added: December 31, 2023
Current assets
19 unchanged sentences
Total liabilities
−Removed: Commitments and contingencies
+Added: Commitments and contingencies (Note 13)
Stockholders' equity
16 unchanged sentences
Cost of revenue
+Added: Gross (loss) profit
Operating expenses
2 unchanged sentences
Amortization expense
−Removed: Goodwill and fixed asset impairment
+Added: Fixed asset impairment
Total operating expenses
Loss from operations
−Removed: Nonoperating income (expense)
−Removed: Interest income (expense), net
+Added: Nonoperating income
+Added: Interest (expense) income, net
Change in fair value of derivative liability
−Removed: Foreign exchange gain (loss)
−Removed: Other income (expense), net
−Removed: Nonoperating income (expense), net
+Added: Foreign exchange (loss) gain
+Added: Other income, net
+Added: Nonoperating income, net
Loss before provision for income taxes
12 unchanged sentences
Balance as of January 1, 2023
−Removed: Common stock issued under equity line of credit
Issuance of common stock in public offering
Share issuance costs
+Added: Exercise of warrants
Settlement of restricted stock units
−Removed: Common stock issued for services
Stock-based compensation
−Removed: Other comprehensive gain
+Added: Other comprehensive income
Balance as of December 31, 2023
3 unchanged sentences
Issuance of common stock in public offering
+Added: Issuance of warrants in public offering
Share issuance costs
12 unchanged sentences
Stock-based compensation expense
−Removed: Common stock issued for services
−Removed: Foreign exchange (gain) loss
+Added: Foreign exchange loss (gain)
Depreciation expense
Amortization expense
−Removed: Goodwill and fixed asset impairment
+Added: Fixed asset impairment
Provision for (reversal of) inventory reserve
11 unchanged sentences
Purchase of property and equipment
−Removed: Proceeds from sale of property and equipment
Net cash used in investing activities
1 unchanged sentence
Proceeds from issuance of common stock
+Added: Proceeds from issuance of warrants
Proceeds from exercise of warrants
2 unchanged sentences
Effect of currency exchange rate changes on cash and cash equivalents
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
1 unchanged sentence
Supplemental cash flow information
−Removed: Cash paid for interest (share issuance costs allocated to derivative liability)
Non-cash investing and financing transactions:
−Removed: Right-of-use assets obtained in exchange for new lease liabilities
Derivative warrant liability reclassified to equity on exercise of warrants
+Added: Deferred offering costs reclassified to equity upon public offering
The accompanying notes are an integral part of these consolidated financial statements.
26 unchanged sentences
All intercompany balances and transactions have been eliminated in consolidation.
−Removed: Reclassifications
−Removed: Certain prior period amounts have been reclassified to conform to the current period presentation.
Use of Estimates
7 unchanged sentences
All assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date.
−Removed: Income and expense items are translated at the weighted-average exchange rate prevailing during the period.
+Added: Income and expense items are translated at the weighted-average exchange rate
+Added: prevailing during the period.
The effects of foreign currency translation adjustments are deferred and reported in stockholders' equity as a component of “Accumulated Other Comprehensive Loss.” The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in “Foreign Exchange (Loss) Gain” in the Consolidated Statements of Operations and Comprehensive Loss.
14 unchanged sentences
Accounts receivable arise primarily from product sales in Canada and generally require payment within 30 days.
−Removed: The Company provides reserves against accounts receivable for estimated credit losses that may result from a customer’s inability to pay based on a combination of factors, such as the aging of accounts receivable, the customer’s financial strength and payment history.
+Added: The Company provides reserves against accounts receivable for estimated credit losses that may result from a customer’s inability to pay based on a combination of factors, such as the aging of accounts receivable past the due date, the customer’s financial strength and payment history.
Amounts determined to be uncollectible are charged or written off against the reserve.
5 unchanged sentences
The Company recognizes government credits for which there is a reasonable assurance of compliance with credit conditions and receipt of credits.
−Removed: The Company recorded a credit of $ 0.5 million against operating expenses on the Consolidated Statement of Operations and Comprehensive Loss and as a current asset on the consolidated balance sheets during the year ended December 31, 2023.
+Added: The Company accounts for the ERC as government assistance and applies the grant accounting model by analogy to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance.
+Added: Under this approach, the Company recognizes the credit when there is reasonable assurance that it will comply with the conditions of the grant and that the credit will be received.
+Added: The Company recorded a credit of $ 0.5 million against operating expenses on the Consolidated Statement of Operations and Comprehensive Loss during the year ended December 31, 2023 and as a current asset on the consolidated balance
+Added: sheets during the year ended December 31, 2024 and December 31, 2023 as an other receivable.
The Company expects to receive the credit in the next twelve months.
28 unchanged sentences
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
−Removed: Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
−Removed: taxable income in the years in which those temporary differences are expected to be recovered or settled.
+Added: Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
A valuation allowance for deferred income tax assets is recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
+Added: Selling, General and Administrative Expenses
+Added: Selling, general and administrative expenses are charged to expense when incurred.
+Added: Advertising expenses were $ 651 thousand and $ 670 thousand for the years ended December 31, 2024 and 2023, respectively.
Research and Development Expenses
Research and development costs are charged to expense when incurred.
−Removed: Segment Information
−Removed: Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.
−Removed: Our CODM is the Chief Executive Officer.
−Removed: The Company operates and manages its business within one operating and reportable segment related to the sale of PoNS devices in the United States and Canada.
The Company does not engage in hedging activities.
1 unchanged sentence
The result of this accounting treatment is that the fair value of the derivative is re-measured at each balance sheet date and recorded as a liability or asset and the change in fair value is recorded in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: Reclassifications or partial reclassifications to equity are recorded based on the fair value of the derivative on the transaction date.
Refer to Note 8 for additional information about the derivative liability.
4 unchanged sentences
Recent Accounting Pronouncements
−Removed: In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses.
−Removed: As the Company meets the SEC definition of a Smaller Reporting Company filer, the guidance was effective for fiscal years beginning after December 15, 2022.
−Removed: The adoption of this guidance on January 1, 2023 did not have a material impact on the Company's Consolidated Financial Statements.
−Removed: GOODWILL AND FIXED ASSETS IMPAIRMENT
−Removed: Fixed Asset Impairment
−Removed: The Company identified an impairment indicator associated with its property and equipment and performed interim impairment tests on the long-lived tangible assets as a result of a planned change of the Company’s contract manufacturing partner to be completed in less than one year from September 30, 2023.
+Added: Accounting Standards Adopted
+Added: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures.
+Added: ASU 2023-07 modifies reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses categorized as significant or regularly provided to the CODM.
+Added: In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements.
+Added: The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.
+Added: This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted.
+Added: Refer to Note 14 for additional information regarding implementation of this new standard.
+Added: Accounting Standards Not Yet Adopted
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses.
+Added: ASU 2024-03 requires
+Added: interim and annual tabular disclosure of disaggregated information for certain income statement expense captions.
+Added: Specific expense categories required to be disclosed quantitatively include inventory purchases, employee compensation, depreciation, and intangible asset amortization, as well as other specified expense categories currently disclosed under existing disclosure requirements.
+Added: Additionally, any remaining amounts that are not separately disaggregated are required to be described qualitatively.
+Added: ASU 2024-03 also requires separate disclosure of total selling expenses incurred each reporting period, with annual disclosure of the entity's definition of selling expenses.
+Added: The annual disclosures required by ASU 2024-03 are effective for the Company beginning in its fiscal year ending December 31, 2027, with interim disclosures effective beginning in its fiscal year ending December 31, 2028.
+Added: The provisions of ASU 2024-03 are to be applied prospectively, although retrospective application is permitted.
+Added: Early adoption is also permitted.
+Added: The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures.
+Added: The guidance requires expanded annual disclosures including the standardization and disaggregation of income tax rate reconciliation categories and the amount of income taxes paid by jurisdiction.
+Added: The guidance is effective for the Company beginning in its fiscal year ending December 31, 2025.
+Added: The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.
+Added: In March 2024, the SEC adopted rules under SEC Release No.
+Added: 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements.
+Added: For non-accelerated filers and smaller reporting companies, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2027, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements.
+Added: The Company is currently evaluating the impact these rules will have on its consolidated financial statements and related disclosures.
+Added: FIXED ASSETS IMPAIRMENT
+Added: In the fourth quarter of 2024, the Company made the decision to no longer utilize certain capitalized software associated with its enterprise resource planning system and as a result, impairment charges of $ 40 thousand were recorded in the fourth quarter of 2024 on its long-lived tangible assets.
+Added: In the third quarter of 2023, the Company identified an impairment indicator associated with its property and equipment and performed interim impairment tests on the long-lived tangible assets as a result of a planned change of the Company’s contract manufacturing partner to be completed in less than one year from September 30, 2023.
The interim impairment tests were performed using estimated market prices.
−Removed: The Company has determined that the fair value of certain long-lived tangible assets is lower than the related book values.
+Added: The Company had determined that the fair value of certain long-lived tangible assets was lower than the related book values.
Additionally, for certain long-lived tangible assets, it is more likely than not that those long-lived assets will be disposed significantly before the end of their previously estimated useful lives.
As a result, impairment charges of $ 159 thousand were recorded in the third quarter of 2023 on its long-lived tangible assets.
−Removed: Goodwill Impairment
−Removed: In September 2022, the Company recorded an impairment charge of $ 757 thousand for the full write-down of the goodwill recorded in connection with its acquisition of Heuro Canada, Inc.
−Removed: The significant decline in the price of the Company’s Class A common stock (“common stock”) following the Company’s registered public offering in August 2022 was considered a triggering event for testing whether goodwill was impaired.
−Removed: The Company elected to perform a quantitative impairment test as of September 30, 2022 for its one identified reporting unit, and determined that the carrying value exceeded the estimated fair value based on the closing price of the Company’s common stock on the Nasdaq Capital Market.
SUPPLEMENTAL BALANCE SHEET DISCLOSURES
1 unchanged sentence
Accounts receivable, net
−Removed: Accounts receivable are net of allowance for doubtful accounts of $ 0 and less than $ 1 thousand as of December 31, 2023 and 2022, respectively.
+Added: Accounts receivable is net of allowance for doubtful accounts of $ 0 as of December 31, 2024 and 2023.
Inventory, net (in thousands)
12 unchanged sentences
Property and equipment, net (in thousands)
+Added: December 31, 2024
+Added: December 31, 2023
Furniture and fixtures
15 unchanged sentences
This Exclusivity Agreement replaced the previous Clinical Research and Co-Promotion Agreement (“Co-Promotion Agreement”) between the parties entered into in October 2019 that included a similar exclusive right provision.
−Removed: The exclusive right under the Exclusivity Agreement was granted for a value of CAD$ 273 thousand, which is represented by the unamortized up-front payment under the former Co-Promotion Agreement.
+Added: The exclusive right under the Exclusivity Agreement was granted for a fixed value of CAD$ 273 thousand, which is represented by the unamortized up-front payment under the former Co-Promotion
The initial term of the Exclusivity Agreement expires on December 31, 2027, and is renewable by HTC for one additional five-year term upon sixty days ’ written notice to the Company.
1 unchanged sentence
Revenue recognized is included in other revenue in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: Revenue recognized for the years ended December 31, 2024 and 2023 were $ 41 thousand and $ 35 thousand, respectively.
The Company has an operating lease for office space with lease terms that commenced in January 2022 and will expire in March 2025.
1 unchanged sentence
Operating lease costs for the years ended December 31, 2024 and 2023 were $ 41 thousand and $ 54 thousand, respectively.
+Added: On January 16, 2025, the Company entered into an agreement to extend the operating lease for the Newtown, PA office through March 31, 2026, at a rate of $ 4 thousand per month effective April 1, 2025.
Maturities of operating lease liabilities as of December 31, 2024 were as follows (in thousands):
2 unchanged sentences
Total lease liabilities
−Removed: The following table provides information on the lease terms and discount rates for the operating lease as of December 31, 2023:
−Removed: Weighted average remaining lease term (in years)
−Removed: Weighted average discount rate
+Added: The following table provides information on the lease term and discount rate for the operating lease as of December 31, 2024:
+Added: Remaining lease term (in years)
+Added: Discount rate
INTANGIBLE ASSETS
4 unchanged sentences
Total intangible assets
−Removed: Estimated amortization expense for the year ending December 31, 2024 is $ 24 thousand.
FAIR VALUE MEASUREMENTS
14 unchanged sentences
If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value.
−Removed: See Note 3 – Goodwill and Fixed Asset Impairment for further detail.
+Added: See Note 3 – Fixed Asset Impairment for further detail.
COMMON STOCK AND WARRANTS
1 unchanged sentence
Such issuances of common stock may include the issuance or sale of warrants to purchase common stock.
+Added: As of December 31, 2024, the Company reserves 146,271,828 shares of Class A Common Stock and 10,000,000 shares of unissued preferred stock for future issuances and future exercises of outstanding warrants and stock-based compensation awards.
Equity Transactions
+Added: Public Offering
+Added: On May 9, 2024, the Company closed on a registered public offering consisting of 704,999 shares of Common Stock (the “2024 Public Offering”), pre-funded warrants to purchase 2,147,222 shares of Common Stock (the “Pre-funded Warrants”) and accompanying Series A Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series A Warrants”) and Series B Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series B Warrants”, and together with the Series A Warrants, the “2024 Public Warrants”).
+Added: The 2024 Public Offering price per share of Common Stock and accompanying Series A Warrants and Series B Warrants was $ 2.25 , the public offering price per Pre-funded Warrant and accompanying Series A and Series B warrant was $ 2.249 .
+Added: The Pre-funded Warrants have an exercise price of $ 0.001 per share and 1,076,445 were exercised on the closing date.
+Added: Net proceeds from the 2024 Public Offering, after deducting placement agent fees and expenses and other offering costs, were approximately $ 5.5 million.
+Added: The 2024 Public Warrants have an exercise price of $ 2.25 per share and are exercisable upon issuance.
+Added: The Series A Warrants will expire five years following the date of issuance and the Series B Warrants will expire twelve months following the date of issuance.
+Added: The Pre-funded Warrants are exercisable upon issuance and may be exercised at any time until the Pre-funded Warrants are exercised in full.
At-The-Market Offering
1 unchanged sentence
Roth is entitled to a commission at a fixed commission rate equal to up to 3 % of the gross proceeds pursuant to the Sales Agreement.
−Removed: As of December 31, 2023, 53,010 share issuances of securities have occurred in connection with the ATM generating net proceeds of $ 0.4 million inclusive of $ 0.1 million of share issuance costs.
−Removed: On February 8, 2024, 148,201 shares were issued with the ATM, generating net proceeds of $ 1.3 million.
+Added: As of December 31, 2024, 201,211 share issuances of securities have occurred in connection with the ATM generating net proceeds of $ 1.3 million and $ 0.4 million inclusive of share issuance costs in 2024 and 2023, respectively.
+Added: On January 17, 2025, 93,300 shares were issued with the ATM, generating net proceeds of $ 0.1 million inclusive of share issuance costs.
Series B Preferred Stock
−Removed: On March 23, 2023, the Board of Directors declared a dividend of one one-thousandth of a share of Series B Preferred Stock (“Series B Preferred Stock”) for each outstanding share of Common Stock held of record on April 3, 2023, and the Certificate of Designation was filed with the Delaware Secretary of State and became effective on March 24, 2023.
+Added: On March 23, 2023, the Board of Directors declared a dividend of one one -thousandth of a share of Series B Preferred Stock (“Series B Preferred Stock”) for each outstanding share of Common Stock held of record on April 3, 2023.
The value of the Series B Preferred Stock issued in connection with the stock dividend was immaterial.
−Removed: The Series B Preferred Stock is not transferrable by the holder except in connection with a transfer by such holder of any shares of common stock held by such holder.
−Removed: The Series B Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.
−Removed: The Series B Preferred Stock has no stated maturity and is not subject to any sinking fund.
−Removed: The Series B Preferred Stock is not subject to any restriction on the redemption or repurchase of shares by the Company while there is any arrearage in the payment of dividends or sinking fund installments.
−Removed: The holder of Series B Preferred Stock is not entitled to receive dividends.
+Added: The outstanding shares of Series B Preferred Stock voted together with the outstanding shares of the Company’s Common Stock, as a single class, exclusively with respect to a proposal giving the Board of Directors the authority, as it determines appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the foregoing matters.
Each share of Series B Preferred Stock entitled the holder to 1,000,000 votes per share and each fraction of a share of Series B Preferred Stock had a ratable number of votes.
−Removed: The outstanding shares of Series B Preferred Stock voted together with the outstanding shares of the Company’s common stock, as a single class, exclusively with respect to the proposal giving the Board of Directors the authority, as it would determine appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders (the “Reverse Stock Split Proposal”), as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the foregoing matters (the “Adjournment Proposal”).
+Added: The holder of Series B Preferred Stock, as such, are not entitled to receive dividends.
At the annual meeting of stockholders of the Company held on May 24, 2023, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its outstanding Common Stock.
4 unchanged sentences
At the annual meeting of stockholders on May 24, 2023, our stockholders voted to approve a reverse stock split of our outstanding Class A common stock at a ratio in the range of 1-for- 10 to 1-for- 80 to be determined at the discretion of the Board of Directors.
−Removed: On August 11, 2023, the Board approved a 1-for- 50 reverse stock split of the Company’s issued and outstanding Common Stock (the “Reverse Stock Split”) that became effective 5:00 p.m.
−Removed: Eastern Time on August 16, 2023.
−Removed: All issued and outstanding Common Stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented.
−Removed: In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and warrants to purchase shares of Common Stock.
−Removed: Per the warrant agreement for the Public Warrants, the exercise price for these warrants was reset to the volume-weighted average price for the five days following the Reverse Stock Split.
−Removed: A proportionate adjustment was also made to the number of shares reserved for issuance pursuant
−Removed: to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split.
−Removed: Any fraction of a share of Common Stock that was created as a result of the Reverse Stock Split was rounded down to the next whole share and stockholders received cash settlement equal to the market value of the fractional share, determined by multiplying such fraction by the closing sales price of the Company’s Common Stock as reported on Nasdaq on the last trading day before the Reverse Stock Split effective date.
−Removed: The authorized shares and par value of the Common Stock and preferred stock were not adjusted as a result of the Reverse Stock Split.
−Removed: August 2022 Issuance of Common Stock and Warrants
−Removed: On August 9, 2022, the Company closed on a registered public offering (“August 2022 Public Offering”) and issued an aggregate of 480,000 shares of common stock for gross proceeds of $ 18 million.
−Removed: The Company paid $ 1.7 million of share issuance costs, which consisted of placement agent fees and expenses and other offering costs.
−Removed: In connection with the August 2022 Public Offering, the Company issued warrants to purchase an aggregate of 720,000 shares of common stock (“Public Warrants”).
+Added: On August 11, 2023, the Board approved a 1-for- 50 reverse stock split of the Company’s issued and outstanding Common Stock (the “Reverse Stock Split”).
+Added: August 2022 Warrants
+Added: In connection with the Company’s registered public offering that closed on August 9, 2022, the Company issued warrants to purchase an aggregate of 720,000 shares of common stock (“2022 Public Warrants”).
The Company performed an analysis of the provisions of the Public Warrants and concluded that the Public Warrants did not meet the guidance for being classified as an equity instrument due to a potential price reset prompted by a change in an unrelated instrument’s conversion rate or, in the event of a fundamental transaction, settlement rights that differ from those of the underlying common stockholders.
−Removed: As a result of the derivative liability classification of the Public Warrants, the gross proceeds were first allocated to the fair value of the Public Warrants as of August 9, 2022 of $ 9.9 million and the remaining $ 8.1 million in gross proceeds were allocated to stockholders’ equity.
−Removed: The share issuance costs associated with the August 2022 Public Offering were allocated between the issuance of common stock and Public Warrants on a pro rata basis with the allocation of the gross proceeds, which resulted in $ 0.8 million of share issuance costs being recorded as a reduction of additional paid-in capital and $ 0.9 million of share issuance costs being recorded in interest expense on the Consolidated Statements of Operations and Comprehensive Loss.
The fair value of the derivative liability as of December 31, 2024 and 2023 was $ 0.2 million and $ 3.3 million, respectively.
−Removed: The change in the fair value of the derivative liability was recognized as a component of nonoperating income (expense) in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
+Added: The change in the fair value of the derivative liability was recognized as a component of nonoperating income in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
The fair value of the 2022 Public Warrants was determined using both a Monte Carlo simulation model, which uses multiple input variables to determine the probability of the occurrence of a price reset or a fundamental transaction and the Black-Scholes option pricing model.
4 unchanged sentences
Dividend rate
−Removed: Lincoln Park Purchase Agreement
−Removed: During the year ended December 31, 2022 the Company issued 7,827 shares at an average price per share of $ 82.32 to Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to a purchase agreement (the “LPC Purchase Agreement”) and registration rights agreement with Lincoln Park entered into on September 1, 2021.
−Removed: Lincoln Park has no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to the provisions of the LPC Purchase Agreement and applicable rules of the Nasdaq Capital Market.
−Removed: The Company does not intend to issue any additional shares under the LPC Purchase Agreement.
−Removed: The 627,090 of outstanding liability classified Public Warrants have an exercise price that was reset to $ 6.9135 per share as a result of the Company’s Reverse Stock Split on August 16, 2023 are exercisable upon issuance and will expire five years following the date of issuance.
−Removed: 92,910 Public Warrants were exercised and the Company received gross proceeds of $ 0.6 million.
+Added: The 603,690 of outstanding liability classified Public Warrants have an exercise price that was reset to $ 1.6163 per share as a result of the 2024 Public Offering are exercisable upon issuance and will expire five years following the date of issuance.
+Added: 23,400 Public Warrants were exercised and the Company received gross proceeds of $ 0.2 million during the year ended December 31, 2024.
No warrants were cancelled during the year ended December 31, 2024.
−Removed: The Company has outstanding equity-classified warrants to purchase 9,969 shares of common stock at a weighted average exercise price of $ 819.77 , with expiration dates ranging from March 2025 to February 2026.
−Removed: During the year ended December 31, 2023, no warrants were exercised and 1,884 warrants were cancelled due to expiration.
+Added: Equity-classified Warrants
+Added: The Company has outstanding equity-classified warrants to purchase 5,869,244 shares of common stock at a weighted average exercise price of $ 3.64 , with expiration dates ranging from March 2025 to May 2029.
+Added: The weighted average exercise price includes 12,222 Pre-funded Warrants with a nominal exercise price of $ 0.001 outstanding as of December 31, 2024.
+Added: The weighted average exercise price excluding the outstanding Pre-funded Warrants is $ 3.65 as of December 31, 2024.
+Added: During the year ended December 31, 2024, 2,135,000 Pre-funded Warrants were exercised for 2,134,754 common shares as the result of the cashless exercise provision and no warrants were cancelled due to expiration.
STOCK-BASED COMPENSATION
5 unchanged sentences
Options granted under the 2022 Plan generally vest over periods of between one to three years and expire no later than ten years from the date of grant .
−Removed: The 2022 Plan contains an automatic increase provision which provides for an annual increase to the maximum number of authorized shares on January 1 of each year beginning on January 1, 2023 through January 1, 2027, to an amount equal to (i) 20 % of the fully diluted number of shares of common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the board of directors prior to the date of the increase.
+Added: On May 30, 2024, the Board adopted a First Amendment (the “Amendment”) to the 2022 Plan.
+Added: On June 27, 2024, at the annual meeting of stockholders, the stockholders of the Company approved the Amendment.
+Added: Pursuant to the terms and conditions of the Amendment, the 2022 Plan was amended to increase the aggregate number of shares of Common Stock that may be issued under the 2022 Plan to 2,089,000 new shares with an automatic increase on January 1st of each year by an amount equal to 5 % of the Fully Diluted Shares (as defined in the 2022 Plan) as of the last day of the preceding calendar year.
As of January 1, 2025, the number of shares authorized for issuance increased from 2,089,000 to 2,703,678 and there were 637,237 shares of common stock available for issuance under the 2022 Plan.
2 unchanged sentences
The exercise price of each option is equal to the fair market value of the common stock at the date of grant.
+Added: On July 2, 2024, the Company approved an amendment to the Inducement Plan pursuant to which, the Inducement Plan was amended to increase the
+Added: aggregate number of shares of Common Stock that may be issued under the Inducement Plan to 150,000 new shares.
As of December 31, 2024, there were 123,980 shares of common stock available for issuance under the Inducement Plan.
11 unchanged sentences
Fair value, per share
+Added: During the year ended December 31, 2024 and 2023, 1,335,623 options with a total grant date fair value of $ 2.5 million and 86,580 options with a total grant date fair value of $ 1.6 million vested, respectively.
The fair value of restricted stock units granted during the years ended December 31, 2024 and 2023 was based on the closing price of the Company’s common stock on the Nasdaq Capital Market on the day of the grant.
16 unchanged sentences
Total stock-based compensation expense
−Removed: Stock-based compensation expense for the year ended December 31, 2022 included $ 1.2 million of expense associated with the vesting of performance-based stock options upon the achievement of the performance criteria when the public offering in August 2022 was completed.
−Removed: As of December 31, 2023, the total remaining unrecognized compensation expense related to nonvested stock options and restricted stock units was $ 2.5 million which will be amortized over weighted-average remaining requisite service period of 1.0 years.
+Added: As of December 31, 2024, the total remaining unrecognized compensation expense related to nonvested stock options was $ 1.5 million which will be amortized over weighted-average remaining requisite service period of 0.7 years.
BASIC AND DILUTED LOSS PER SHARE
6 unchanged sentences
Loss per share — diluted
−Removed: For the years ended December 31, 2023 and 2022, no adjustment was made to the numerator and no incremental shares were added to the denominator for the Public Warrants being accounted for as a derivative liability, as the Public Warrants were out-of-the-money.
−Removed: Refer to Note 8 for additional information about the Public Warrants.
+Added: In May 2024, in connection with the 2024 Public Offering, the Company issued and sold Pre-funded Warrants exercisable for an aggregate of 2,147,222 shares of Common Stock.
+Added: The total price of the Pre-funded Warrants is $ 2.25 per share, $ 2.249 of which was pre-funded and paid to the Company upon issuance of the Pre-funded Warrants.
+Added: The exercise price of the Pre-funded Warrants is $ 0.001 per share.
+Added: The Pre-funded Warrants are immediately exercisable and do not expire.
+Added: As of December 31, 2024, 2,052,703 Pre-funded Warrants were exercised and 12,222 Pre-funded Warrants remained outstanding.
+Added: As the remaining shares underlying the Pre-funded Warrants are exercisable for nominal consideration of $ 0.001 per share, 12,222 in common shares underlying the unexercised Pre-funded Warrants were considered outstanding for purposes of the calculation of loss per share for the year ended December 31, 2024.
+Added: Refer to Note 8 for additional information about the Pre-funded Warrants.
+Added: For the years ended December 31, 2024 and 2023, no adjustment was made to the numerator.
The following outstanding securities, presented based on amounts outstanding as of the end of each period, were not included in the computation of diluted loss per share for the periods indicated, as they would have been anti-dilutive due to the net loss in each period.
8 unchanged sentences
Share based payments
−Removed: Goodwill impairment
Foreign income taxed at foreign rate
12 unchanged sentences
Deferred revenue
−Removed: Lease liability
−Removed: Inventory reserve
Total deferred tax assets
1 unchanged sentence
Property and equipment
−Removed: Intangible assets
−Removed: Right-of-use asset
−Removed: Unrealized foreign currency gains
Total deferred tax liabilities
20 unchanged sentences
It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
−Removed: As of both December 31, 2023 and 2022, the Company does no t have an accrual relating to uncertain tax positions.
+Added: As of both December 31, 2024 and 2023, the Company does not have an accrual relating to uncertain tax positions.
It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.
12 unchanged sentences
For the years ended December 31, 2024 and 2023, the Company recorded royalty expense from the sale of devices of approximately $ 19 thousand and $ 24 thousand, respectively, in its Consolidated Statements of Operations and Comprehensive Loss.
−Removed: ENTERPRISE-WIDE DISCLOSURES
+Added: SEGMENT AND GEOGRAPHIC INFORMATION
+Added: Segment Information
+Added: Operating segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance.
+Added: The Company’s CODM is its Chief Executive Officer.
+Added: The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is the business of development and commercialization of products related to PoNS® devices.
+Added: The Company has a single reporting segment and the determination of the single segment is consistent with the information provided to the CODM.
+Added: The CODM evaluates performance and allocates resources based on the Company’s consolidated financial results.
+Added: Geographic Information
The following table presents the Company’s revenue disaggregated by geographic area (in thousands):
4 unchanged sentences
Total revenue
−Removed: Two customers accounted for 65 % of net product sales for the year ended December 31, 2023 and a single customer accounted for 35 % of net product sales for the year ended December 31, 2022.
−Removed: A single customer accounted for 83 % and 89 % of accounts receivable, net for the years ended December 31, 2023 and 2022, respectively.
+Added: Two customers accounted for 72 % and 65 % of net product sales for the years ended December 31, 2024 and 2023, respectively.
+Added: Two customers accounted for 100 % of accounts receivable, net as of December 31, 2024 and a single customer accounted for 83 % of accounts receivable, net as of December 31, 2023.
+Added: Long-lived assets are held in the United States and Canada with the majority of long-lived assets being held in the United States as of December 31, 2024 and 2023.
+Added: As of December 31, 2024, the carrying value of long-lived assets held in Canada is $ 0 .
+Added: SUBSEQUENT EVENTS
+Added: Warrant inducement
+Added: On January 21, 2025, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”) of its existing 2024 Public Warrants to purchase shares of the Company’s Class A common stock (the “Existing Warrants”), pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase an aggregate of 4,971,110 shares of the Company’s common stock, in the aggregate, at a reduced exercise price of $ 0.751 per share, in exchange for the Company’s agreement to issue new Series C Warrants and Series D Warrants (the “Inducement Warrants”) on substantially the same terms as the Existing Warrants described below, to purchase up to 6,213,888 shares of the Company’s common stock (the “Inducement Warrant Shares”).
+Added: The Company received aggregate gross proceeds of approximately $ 3.7 million from the exercise of the Existing Warrants by the
+Added: The Company engaged Roth to act as its financial advisor with the transactions summarized above and has paid Roth $ 0.2 million for its services, in addition to reimbursement for certain expenses along with other legal and regulatory expenses resulting in net proceeds of $ 3.4 million.
+Added: The Company has filed a registration statement on Form S-3 covering the resale of the Inducement Warrants Shares issued or issuable upon the exercise of the Inducement Warrants.
+Added: In the Inducement Letters, the Company agreed not to issue any shares of common stock or common stock equivalents or to file any other registration statement with the SEC (in each case, subject to certain exceptions) for sixty (60) calendar days.
+Added: The Company also has agreed not to effect or agree to effect any variable rate transaction (as defined in the Inducement Letters) for seventy-five (75) calendar days from the date of the Inducement Letters.
+Added: The Company has agreed to hold an annual or special meeting of stockholders on or prior to the date that is ninety (90) calendar days following the date of the Inducement Letters for the purpose of obtaining stockholder approval, with the recommendation of the Company’s board of directors that such proposals are approved.
+Added: If the Company does not obtain stockholder approval at the first meeting, the Company has agreed to call a meeting to seek stockholder approval every ninety (90) calendar days until the date that the Inducement Warrants are no longer outstanding.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
18 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.