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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-29 · 479 added, 377 removed, 851 unchanged (50% of the section changed)

23 unchanged sentences

Item 10 —Directors, Executive Officers and Corporate Governance

The information required under this item is incorporated by reference to the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders (the "2023 Proxy Statement") which is to be filed with the SEC and is hereby incorporated by reference.

The Company's Certificate of Incorporation provides for a classified Board of Directors, consisting of three classes, each class serving a three-year term on a staggered basis.

Two are Class A Directors, two are Class B Directors, and two are Class C Directors.

The Company has the following six directors:

Michael Blechman (age 66), a director since April 2024, through his affiliate Intracoastal Strategies Group LLC, has been a consultant and advisor for various businesses since February 2023.

From January 2017 to January 2023 Mr.

Blechman was CEO of ACC, Inc., a systems integration and technology product company.

He was President from 1996 to 2016, and held various other management roles from 1988 to 1995 at ACC, Inc.

Christopher Cox (age 60), a director since February 2021, has been a Co-Founder and Managing Partner of Population Health Partners LP.

since May 2020.

Cox has been on the Board of Directors of Nyrada, Inc.

since January 2019.

Cox has been a corporate attorney for over 25 years, most recently at Cadwalader, Wickersham & Taft LLP, which he joined as a partner in January 2012 and where he was a co-chair of the global corporate group and a member of the firm’s management committee until February 2016.

From February 2016 to March 2019, Mr.

Cox was Executive Vice President and Chief Corporation Development Officer of Medicines Company.

Prior to January 2012, Mr.

Cox was a partner at Cahill Gordon & Reindel.

John Nicols (age 61) , a director since March 2024 and Chairman of the Board of Scientific Bioprocessing, Inc., has been a consultant and advisor to the Company's Bioprocessing Systems Operations since September 2023.

Nicols, who is director certified by the National Association of Corporate Directors, currently serves since April 2023 as chair on the board of directors of Antheia, Inc., a synthetic biology company and chair of the Board of Solve ME/CFS Initiative, a non-profit organization and advocacy group for chronic diseases since January 2015.

From June 2012 to August 2022 Mr.

Nicols was CEO of Codexis, Inc., a Nasdaq listed synthetic biology company.

Moore (age 59), a Director since January 2019 and Chairman of the Board since January 2020, and was also the Chairman of Scientific Bioprocessing Industries (“SBI”) from March until March 2024 and prior was President of SBI from January 2020 through April 2022, and had been providing consulting services to SBI since March 2019.

Moore serves as Chairman of Nyrada, Inc., a drug development company since July 2019 and prior to that served as a director with Noxopharm Limited, a drug development company, and is also the Chairman of Trialogics, a clinical trial software provider.

Since March 2022 he serves as the Chairman of Cormetech, a leading air emissions provider for power plants.

Moore was President, Chief Executive Officer and director of Acorn Energy, Inc.

from 2006 to 2016.

Santos (age 60), a Director since 2009, has been employed by the Company since 1994, and has served since August 2002 as its President, Chief Executive Officer, Treasurer and, until April 2022, its Chief Financial Officer.

She had served as Vice President, Controller from 1997 and as Secretary from May 2001.

Jurgen Schumacher (age 70), a Director since May 2021, is currently a private investor in various startups and growth phase technology companies over the past five years.

Board Committee

The Board of Directors (the “Board”) currently has three standing committees:

Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

All committee members are appointed by the Board on an annual basis.

Each committee operates under a written charter establishing its roles and responsibilities The composition and responsibilities of each committee are described below.

Audit Committee

The Audit Committee is responsible for assisting the Board in its oversight of the integrity of our financial statements, the qualifications and independence of our independent auditors, and our internal financial and accounting controls.

The Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the audit committee.

The Audit Committee also prepares the audit committee report that the SEC requires to be included in our annual proxy statement.

The Audit Committee discusses with the Company’s internal auditors the overall scope and plans for their respective audits and meets with the internal auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s disclosure and internal controls and the overall quality of the Company’s financial reporting.

The Audit Committee periodically reviews and approves all “related party transactions,” as defined in SEC regulations.

The members of the Audit Committee are Messrs.

Michael Blechman, Christopher Cox and John Nicols.

All members of the Audit Committee qualify as an independent director under the corporate governance standards of the NASDAQ Listing Rules and the independence requirements of Rule 10A-3 of the Exchange Act.

The Board has determined that all of the members of the Audit Committee are “financially literate,” as defined under NASDAQ listing standards.

Compensation Committee

The Compensation Committee approves the compensation objectives for the Company, approves the compensation of the Chief Executive Officer of the Company and approves or recommends to the Board for approval the compensation for other executives.

The Compensation Committee reviews all compensation components, including equity-based compensation plans, base salary, bonus, benefits and other perquisites.

The Compensation Committee shall be tasked with issuing a “Compensation Committee Report” to be included in the Company’s annual report, as may be necessary.

The members of the Compensation Committee are Messrs.

Blechman, Christopher Cox and John Nicols.

Each member of the Compensation Committee is a non-employee director within the meaning of Rule 16b-3 of the rules promulgated under the Exchange Act, each is an outside director as defined by Section 162(m) of the U.S.

Internal Revenue Code of 1986, as amended, or the Code, and each is an independent director as defined by the NASDAQ Listing Rules, including NASDAQ Listing 5605(d)(2).

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for making recommendations to the Board regarding candidates for directorships and the structure and composition of the Board and the board committees in addition to development and maintaining the Company’s corporate governance policies and any related matters required by federal securities laws.

In addition, the Nominating and Corporate Governance Committee is responsible for developing and recommending to the Board corporate governance guidelines applicable to the Company and advising the Board on corporate governance matters.

The Nominating and Governance Committee identifies and recommends to the Board candidates for election as directors and recommends any changes it believes desirable in the size and composition of the Board as well as Board committee structure and membership.

The members of the Nominating and Corporate Governance Committee are Messrs.

Michael Blechman, Christopher Cox and John Nicols.

Each member of the Nominating and Corporate Governance Committee is an independent director within the meaning of Rule 16b-3 of the rules promulgated under the Exchange Act and an independent director as defined by the NASDAQ Listing Rules.

Executive Officers & Significant Employees

See above for the employment history of Ms.

Santos and Mr.

Reginald Averilla (age 46), is the Chief Financial Officer of the Company and has been employed by the Company since April 2022.

He was the VP Controller of Medical Knowledge Group, a privately held company from July 2020 to April 2022.

From 2017 to July 2020, he was the VP Controller for Film Expo Group, a privately held company.

Prior to 2017, he was the Assistant Controller to SFX Entertainment, previously a publicly traded company.

Nichols (age 64), is the President of the Genie Products Division of the Benchtop Laboratory Equipment operations and Corporate Secretary and has been employed by the Company since February 1998.

Previously, he had been since May 2001, the Company’s Vice President of Engineering.

Nowosielski (age 47), is the President of the Torbal Products Division of the Benchtop Laboratory Equipment operations and Director of Marketing for the Company.

He was Vice President of Fulcrum, Inc.

(the seller of the Torbal Products Division assets) from 2004 until February 2014.

Daniel Donadille (age 37), is the Chief Executive Officer of the Company’s Bioprocessing operations.

Prior to the Company’s acquisition of Aquila, he served as Aquila’s Chief Executive Officer since he co-founded Aquila in 2014.

Section 16(a) Beneficial Ownership Reporting Compliance

The Company believes that, for the year ended December 31, 2024, its officers, directors and 10% stockholders timely complied with all filing requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended.

Code of Ethics

The Company has adopted a code of ethics that applies to the Executive Officers and Directors.

A copy of the code of ethics can be found on the Company’s website.

Insider Trading Policy

The Company has adopted an insider trading policy that applies to the Executive Officers, Directors and other Company insiders.

A copy of the insider trading policy is filed herewith as Exhibit 19.1 to this Form 10-K.

Executive Compensation

Compensation Discussion and Analysis

The Compensation Committee reviews and recommends to the Board of Directors compensation be paid to each executive officer.

Executive compensation, in all instances except for the compensation for the Chief Executive Officer (“CEO”), is based on recommendations from the CEO.

The CEO makes a determination by comparing the performance of each executive being reviewed with objectives established at the beginning of each fiscal year and with objectives established during the business year with regard to the success of the achievement of such objectives and the successful execution of management targets and goals.

With respect to the compensation of the CEO, the Committee considers performance criteria, 50% of which is related to the direction, by the CEO, of the reporting executives, the establishment of executive objectives as components for the successful achievement of Company goals and the successful completion of programs leading to the successful completion of the Business Plan for the Company and 50% of which is based on the achievement by the Company of its financial and personnel goals tempered by the amount of the income or loss of the Company during the fiscal year.

The compensation at times includes grants of options under its stock option plan to the named executives.

Each officer is employed pursuant to a long-term employment agreement, containing terms proposed by the Compensation Committee and approved as reasonable by the Board of Directors.

The Board is cognizant that as a relatively small company, the Company has limited resources and opportunities with respect to recruiting and retaining key executives.

Accordingly, the Company has relied upon long-term employment agreements and grants of stock options to retain qualified personnel.

Compensation for each of its executive officers provided by their employment agreements were based on the foregoing factors and the operating and financial results of the segments under their management.

Item 11 —Executive Compensation

The information required under this item is incorporated by reference to the 2023 Proxy Statement.

The following table summarizes all compensation paid by the Company to its Chief Executive Officer, Chief Financial Officer and the two other most highly compensated executive officers for the years ended December 31, 2024 and 2023.

SUMMARY COMPENSATION TABLE

Name and Principal

Compensation ($)

Compensation ($ (5)

Santos, CEO, President (1)

Santos, CEO, President

Moore, Chairman (2)

Moore, Chairman

Reginald Averilla, CFO (3)

Reginald Averilla, CFO

Daniel Donadille,CEO of Bioprocessing Operations (4)

Daniel Donadille,CEO of Bioprocessing Operations

__________________

The amount of Option Awards for 2024 represents compensation expense for stock options granted valued utilizing the Black-Scholes-Merton options pricing model disregarding estimates of forfeitures related to service-based vesting considerations.

The amounts represent the Company’s matching contribution under the Company’s 401(k).

Employment Agreements

Helena Santos

The Company has an employment agreement with Helena Santos, its President and CEO, which expires on June 30, 2025.

The agreement provided for an annual base salary of $175,000 for the year ended June 30, 2018, with subsequent annual increases of 3% or the applicable annual percentage increase in the U.S.

Consumer Price Index (“CPI”), whichever is higher, plus a discretionary bonus.

The agreement contains a provision that within one year of a change of control, if either the Company terminates the employment for any reason other than for “cause” or the President terminates the employment for “good reason”, the President will have the right to receive a lump sum payment equal to three times the average of their total annual compensation paid for the last five years preceding such termination.

The employment agreement also contains a termination provisions stipulating that if the Company terminates the employment other than for death, disability, or cause (as such term is defined therein), or if the relevant employee resigns for “good reason” (as such term is defined therein), the Company shall pay severance payments equal to one year’s salary at the rate of the compensation at the time of termination, and continue to pay the regular benefits provided by the Company for a period of one year from termination.

Reginald Averilla

The Company has an employment agreement with its Chief Financial Officer, which expires on June 30, 2025, providing for an annual base salary of $195,000 plus 10% discretionary bonus .

The agreement contains a provision that within one year of a change of control, if either the Company terminates the employment for any reason other than for “cause” or the employee terminates the employment for “good reason”, the employee will have the right to receive a lump sum payment equal to one times the average of their total annual compensation paid for the last five years preceding such termination.

The Company has an employment agreement with its chairman, which expires on June 30, 2024, and was extended through June 30, 2025.

The agreement provides for an annual base salary of $175,000 for the year ended June 30, 2021, with subsequent annual increases of 3% plus discretionary bonuses.

The agreement also provides for a grant of options to purchase 215,366 shares which were authorized by the Board of Directors during the year ended June 30, 2020, subject to amendment of the Company’s 2012 Stock Option Plan to increase the number of shares authorized for issuance thereunder which was approved in February 2021, following which Mr.

Moore’s options were issued on February 23, 2021.

The employment agreement contains termination provisions stipulating that if the Company terminates the employment other than for death, disability, or cause (as such term is defined therein), or if the employee resigns for “good reason”(as such term is defined in the agreement) , the Company shall pay severance payments equal to either one year’s salary at the rate of the compensation at the time of termination is employee is terminated within 12 months of the date of the agreement or six months’ salary is the employee is terminated after 12 months of the date of the agreement.

The Company will continue to pay the regular benefits provided by the Company for the period equal to the length of the severance payments and pay a pro rata portion of any bonus achieved prior to such termination of employment.

Daniel Donadille

The Company has employment agreements with the Chief Executive Officer of Aquila for an indefinite term, which can be terminated by either party upon a twelve-month written notice, in accordance with German law.

The agreement provides for an annual base salary of 213,000 euros, which was reduced by 25% starting April 1, 2024 under the Company’s salary reduction program.

The agreement includes a retention bonus of 25,000 euros if the employees do not terminate their employment with the Company within two years after the agreement date or the Company does not terminate their employment for good cause.

OUTSTANDING EQUITY (OPTIONS) AWARDS

For the Year Ended December 31, 2024

Underlying Unexercised

Number Of Securities

Underlying Unexercised

Unexercisable

Equity Incentive

Underlying Unexercised Unearned

Option Exercise Price ($)

Expiration Date

Helena Santos

07/2027-04/2034

03/2029-04/2034

Reginald Averilla

Daniel Donadille

Robert Nichols

Karl Nowosielski

DIRECTORS’ COMPENSATION

For the Year Ended December 31, 2024

Fees Earned or Paid in Cash($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Non-qualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Michael Blechman (1)

Christopher Cox (2)

John Nicols (3)

Jurgen Schumacher (4)

Marcus Frampton (5)

On May 17, 2024, 25,000 stock options were granted to Mr.

Blechman, and on the same date 7,186 options were awarded to Mr.

Blechman in lieu of $6,000 cash fees owed.

On July 1, 2024, 5,000 stock options were granted to Mr.