10-K/A
1
xenetic_10ka1-123123.htm
AMENDMENT NO. 1 TO FORM 10-K
XENETIC BIOSCIENCES, INC. 10-K
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Amendment No. 1
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 2023
☐
TRANSITION REPORTS PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
Commission File Number: 001-37937
XENETIC BIOSCIENCES, INC.
(Exact name of registrant as specified in its
charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
45-2952962
(IRS Employer
Identification No.)
945 Concord Street
Framingham, Massachusetts 01701
(Address of principal executive offices (Zip code)
781-778-7720
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 par value per share
XBIO
The Nasdaq Capital Market
Purchase Warrants
XBIOW
The Nasdaq Capital Market
Securities registered pursuant to Section 12(g)
of the Act:
None
Indicate by check mark
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☐ No ☒
Indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes ☐ No ☒
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate by check mark
whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files): Yes ☒ No ☐
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark
whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared
or issued its audit report. ☐
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark
whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark
whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2): Yes ☐ No ☒
The aggregate market
value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2023, the last business day of
the registrant’s most recently completely second fiscal quarter, based upon the closing price of the registrant’s common stock
on the Nasdaq Capital Market on that date of $3.28, was approximately $5,026,928. For purposes of this computation, all officers, directors,
and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that
such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.
As of April 19, 2024,
the number of outstanding shares of the registrant’s common stock was 1,540,684.
DOCUMENTS INCORPORATED BY REFERENCE
None
EXPLANATORY NOTE
The Registrant is filing this Amendment No. 1
on Form 10-K/A (this “Amendment”) to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2023,
originally filed with the Securities and Exchange Commission (“SEC”) on March 21, 2024 (the “Original Filing”),
to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from the
Original Filing in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above-referenced items to
be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after
our fiscal year-end. We are filing this Amendment to include Part III information in our Form 10-K because our definitive proxy statement
will be filed later this year.
Part III of the Original Filing (Items 10
through 14) is being amended and restated in its entirety by this Amendment. In addition, pursuant to Rule 12b-15 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), Part IV, Item 15 of the Original Filing is being amended to contain
the currently dated certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto as Exhibit 31.3
and Exhibit 31.4, respectively. Because no financial statements are included in this Amendment and this Amendment does not contain or
amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of the certifications have been omitted.
Further, we are amending the cover page to update the number of shares of our stock outstanding and to remove the statement that information
is being incorporated by reference from our definitive proxy statement.
Except as described above, this Amendment
does not amend or otherwise update any other information in the Original Filing. Accordingly, this Amendment should be read in conjunction
with the Original Filing. In addition, this Amendment does not reflect events that may have occurred subsequent to the date of the Original
Filing.
As used
in this Amendment, unless otherwise indicated, all references herein to “Xenetic,” the “Company,” “we”
or “us” refer to Xenetic Biosciences, Inc. and its wholly owned subsidiaries.
i
XENETIC BIOSCIENCES, INC.
2023 ANNUAL REPORT ON FORM 10-K
TABLE OF
CONTENTS
PART III
Item 10
Directors, Executive Officers and Corporate Governance
1
Item 11
Executive Compensation
6
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13
Item 13
Certain Relationships and Related Transactions, and Director Independence
16
Item 14
Principal Accounting Fees and Services
19
PART IV
20
Item 15
Exhibits and Financial Statement Schedules
20
ii
PART
III
ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE
Directors and Executive Officers
Set forth below is the name, age, position
and brief biographies of each of our executive officers and directors as of April 19, 2024.
Name
Age
Position
Mr. Jeffrey Eisenberg
58
Chief Executive Officer and Director
Dr. Curtis Lockshin
63
Chief Scientific Officer
Mr. James Parslow
59
Chief Financial Officer
and Corporate Secretary
Dr. Grigory Borisenko
55
Director
Dr. James Callaway
67
Director (1), (2),
(3)
Mr. Firdaus Jal Dastoor, FCS
71
Director (1), (2)
Dr. Dmitry Genkin
55
Director
Dr. Roger Kornberg
76
Director (3)
Mr. Adam Logal
46
Director (1), (2),
(3)
Mr. Moshe Mizrahy
71
Director
Dr. Alexey Vinogradov
53
Director
__________________
(1)
Member of
the Audit Committee
(2)
Member of the Compensation
Committee
(3)
Member of the Nominating
and Corporate Governance Committee
Jeffrey Eisenberg was appointed
our Chief Executive Officer on October 26, 2017, after serving as Chief Operating Officer since December 2, 2016, and has served as a
member of our Board since July 2016. Mr. Eisenberg previously worked at Noven Pharmaceuticals, Inc. (“Noven”), a subsidiary
of Hisamitsu Pharmaceutical, Inc., where he held various positions of increasing responsibility, most recently serving from 2009-2016
as Noven’s president, chief executive officer and as a member of its board of directors. Mr. Eisenberg obtained his J.D. at Columbia
University Law School and a B.S. in Economics from the Wharton School, University of Pennsylvania. We believe Mr. Eisenberg’s significant
life science executive experience and leadership experience in the areas of R&D, operations, manufacturing/quality, business development,
strategic partnering, product development, commercialization, and human resources provides him with the appropriate set of skills to
serve as a member of our Board.
Curtis Lockshin, PhD initially
joined us on a part-time basis in March 2014 as our Vice President of Research & Operations and was appointed our Chief Scientific
Officer effective January 1, 2017. Dr. Lockshin has held several management positions at development and commercial stage biotechnology
companies, with experience including discovery, preclinical and clinical development, as well as commercial manufacturing. Since May
2013, he has held the position of president and chief executive officer of Guardum Pharmaceuticals LLC (“Guardum”), a wholly
owned subsidiary of PJSC Pharmsynthez, a position which he continues to hold in addition to his position with us. Dr. Lockshin does not
receive a salary for these services but did receive medical benefits and was covered under Guardum’s health plan through July 31,
2018. In addition, Dr. Lockshin has served as an officer or consultant of several biotechnology companies on a part-time basis, including
as an officer of a series of related companies following multiple mergers beginning as chief executive officer and director of SciVac
Therapeutics, Inc. and its subsidiary SciVac, Ltd., from September 2014 until July 2016. After SciVac Therapeutics, Inc.’s merger
with VBI Vaccines, Inc. in July 2016, Dr. Lockshin served as chief technical officer of the merged company until December 2016. Dr. Lockshin
is currently serving as a member of the board of directors of Phio Pharmaceuticals Corporation, a publicly traded clinical-stage RNAi
company focused on immune-oncology, a position he has held since April 2013. Dr. Lockshin has an S.B. in Life Sciences and a Ph.D. in
Biological Chemistry from the Massachusetts Institute of Technology. Since April 2004, Dr. Lockshin has also served as a member of the
board of directors of the Ruth K. Broad Biomedical Research Foundation, a Duke University Support Corporation that supports basic research
related to Alzheimer’s disease and neurodegeneration via intramural, extramural and international grants.
1
James Parslow was appointed
our Chief Financial Officer on April 3, 2017. Mr. Parslow most recently served as Chief Financial Officer, Treasurer and Secretary of
World Energy Solutions, Inc., a publicly-traded business-to-business e-commerce company brokering energy and environmental commodities,
from 2006 until its acquisition by EnerNOC, Inc. in 2015. From 2015 until 2017, he served as an independent consultant providing interim
chief financial officer services to multiple emerging technology companies. Mr. Parslow is a Certified Public Accountant with over 35
years of experience serving private and public companies in the biotech, clean tech, e-commerce, and high-tech manufacturing industries.
He holds an A.B. in Economics and Accounting from the College of the Holy Cross and an M.B.A. with a concentration in Finance from Bentley
University.
Grigory Borisenko, PhD was appointed
to the Board in September 2019. Dr. Borisenko has over 20 years of scientific, management and strategic experience in the life science
field. Since April 2022, Dr. Borisenko has been an independent consultant for a number of companies. Prior to that time, Dr. Borisenko
served as an Investment Director of RUSNANO Management Company LLC, a venture capital & private equity management company in Russia,
and has specialized in investment projects in life sciences from 2012 through March 31, 2022. Dr. Borisenko has served on the board of
directors of Atea Pharmaceuticals, Inc., Adastra Pharmaceuticals, Inc., Nearmedic Pharm LLC, Novamedica LLC and RusnanoMedInvest LLC.
Prior to his investment career, Dr. Borisenko held academic appointments with the University of Pittsburgh, Russian State Medical University
and Institute of Medico-Biological Problems. He has co-authored over fifty peer-reviewed publications in leading biochemistry and cell
biology journals. Dr. Borisenko received his M.S. and Ph.D. from the Russian State Medical University, and is a recipient of Fogarty
International and International Fellowship Awards from NIH. We believe Dr. Borisenko’s extensive background in the life sciences
and biotechnology industries provide him with the appropriate set of skills to serve as a member of our Board.
James Callaway, PhD was appointed
to the Board on August 14, 2017. Dr. Callaway has over 30 years of experience in the execution of product development operations for
biotherapeutics and currently serves as an independent board member of KalGene Pharmaceuticals (“KalGene”) and Nuravax. Dr.
Callaway is a seasoned CEO within the venture-backed biotech community and over the course of his career he has built and operated several
companies, transforming each from research companies to clinical stage operating entities. He also serves as a Corporate Strategy Consultant
to the biotech community at Callaway Innovations. Dr. Callaway has served as CEO of privately-held biotech companies including KalGene,
a company focused on disease-modifying therapies in Alzheimer’s Disease, ArmaGen, Inc., a BBB transport company, and CEBIX, Inc.,
a diabetic neuropathy company. Prior to these efforts, Dr. Callaway held multiple senior leadership positions at Elan Pharmaceuticals,
including simultaneously acting as Head of Development and overseeing the complex partnership with Wyeth Pharmaceuticals in the Alzheimer’s
disease immunotherapy program. He has developed antibodies for a wide-range of therapeutic applications over the past two decades, including
treatments of multiple sclerosis (Tysabri®: pharmaceutical development), Alzheimer’s disease (bapineuzumab: Program Executive),
and blood brain barrier transport, and has worked with the United States Food and Drug Administration on multiple orphan drug development
programs. We believe Dr. Callaway’s significant life sciences executive, leadership and strategic experience in the area of biotherapeutics
provides him with the appropriate set of skills to serve as a member of our Board.
Firdaus Jal Dastoor, FCS was
initially appointed as a member of our Board in January 2014 pursuant to terms of the agreement of our acquisition of Xenetic U.K. He
has been employed by the Cyrus Poonawalla Group, a conglomerate in India with interests in horse breeding, biotech and life sciences,
and financial services, in business development strategies and operational roles since October 1981. Mr. Dastoor is currently a Group
Director in charge of Finance and Corporate Affairs and Company Secretary of the Serum Institute of India Private Limited at the Cyrus
Poonawalla Group. He has been a Fellow Member of The Institute of Company Secretaries of India since 1990. Mr. Dastoor is on the board
of several private companies operating in the fields of life sciences and biotech, international trade, financial services and quality
standards certifications. Mr. Dastoor received a B.A. in Commerce from the University of Poona. We believe Mr. Dastoor’s knowledge
of investments in the life sciences and biotechnology industries, and his finance and business development background provide him with
the appropriate set of skills to serve as a member of our Board.
2
Dmitry Genkin, MD has
served as a member of our Board since December 2023. Dr. Genkin previously served on the Company’s Board of Directors from
2017-2021. He has the Russian equivalent of an MD in Internal Therapy and studied drug delivery under Professor Gregory Gregoriadis
at The School of Pharmacy, University of London in 1992, as well as the Department of Clinical Pharmacology at Karolinska Hospital,
Stockholm from 1992 until 1993. Since 2005, Dr. Genkin has served as Executive Chairman of PJSC Pharmsynthez, a public company and a
stockholder of Xenetic. Dr. Genkin is founder and board member of Santersus AG – a Swiss private pharmaceutical company
developing novel apheresis therapies for unmet medical need indications. Dr. Genkin is on the oard of CLS Therapeutics Inc. and
Peri-Ness Ltd. – private biotechnology companies developing anti-NETosis therapies. Prior to 2005, Dr. Genkin headed a number
of Russia’s largest pharmaceutical companies including Pharmavit, a large player in the Russian pharmaceutical market. In
1998, he was awarded the silver medal by the Russian Natural Science Academy. We believe Dr. Genkin’s significant life
sciences, biotechnology and international background provide him with the appropriate set of skills to serve as a member of our
Board.
Roger Kornberg, PhD has
served as a member of our Board since February 2016. Dr. Kornberg is a member of the U.S. National Academy of Sciences and the Winzer
Professor of Medicine in the Department of Structural Biology at Stanford University. He earned his B.S. in chemistry from Harvard University
in 1967 and his Ph.D. in chemical physics from Stanford in 1972. He became a postdoctoral fellow at the Laboratory of Molecular Biology
in Cambridge, England and then an assistant professor of biological chemistry at Harvard Medical School in 1976, before moving to his
present position as professor of structural biology at Stanford Medical School in 1978. In 2006, Dr. Kornberg was awarded the Nobel Prize
in Chemistry in recognition for his studies of the molecular basis of Eukaryotic Transcription, the process by which DNA is copied to
RNA. Dr. Kornberg is also the recipient of several awards, including the 2001 Welch Prize, the highest award granted in the field of
chemistry in the United States, and the 2002 Leopald Mayer Prize, the highest award granted in the field of biomedical sciences from
the French Academy of Sciences. Dr. Kornberg has served as a director of Cocrystal Pharma, Inc. (NasdaqCM: COCP) since April 2020. We
believe Dr. Kornberg’s prior experience serving on the boards of directors of large organizations as well as his scientific background
provides him with the appropriate set of skills to serve as a member of our Board.
Adam Logal was appointed to
the Board in August 2017. Mr. Logal has 20 years of experience in the biopharmaceuticals industry. Since March 2014, Mr. Logal has served
as Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer of OPKO Health, Inc. (“OPKO”),
a publicly-traded company, and from March 2007 until March 2014 served as OPKO’s Vice President of Finance, Chief Accounting Officer
and Treasurer. Prior to joining OPKO, Mr. Logal served in senior management roles at Nabi Biopharmaceuticals, a publicly-traded
biopharmaceutical company. Mr. Logal is a strategic finance executive with extensive experience in SEC compliance and reporting, domestic
and international finance, strategic planning, cash flow management, budgeting, taxation, treasury and business development. We believe
Mr. Logal’s extensive financial experience with public companies in the life sciences industry provides him with the appropriate
set of skills to serve as a member of our Board.
Moshe Mizrahy has served as
a member of our Board since December 2023. Mr. Mizrahy is co-founder of InMode Ltd. (NASDAQ: INMD) and has served as its Chief
Executive Officer and Chairman of its board of directors since its inception in 2008. Prior to that, Mr. Mizrahy was co-founder and
chief executive officer of Syneron Medical Ltd. Mr. Mizrahy was also the former chief executive officer of Home Skinovations Ltd.,
and is currently chairman of its board. In addition to Home Skinovations Ltd., Mr. Mizrahy currently sits on the board of directors
of SipNose Ltd., Pet Novations Ltd., Peri-Ness Technologies Ltd., Santersus AG, Easy-Lap Ltd., O.B.-Tools Ltd., Urifer Ltd., Easy
Notes Ltd., Escape Rescue Systems Ltd., M.N. Business Strategy Ltd., Silk’n Cure Ltd., Himalaya Family Office Advising Ltd.
and Polimer Logistics (Israel) Ltd. Mr. Mizrahy is co-founder and general partner of Nitzanim AVX Kyocera Venture Capital Fund and
First Israel Mezzeine Investors Fund. Mr. Mizrahy has expertise in value creation for medical technologies, fundraising, public
offerings, marketing and regulatory affairs. Mr. Mizrahy has a B.S. in Engineering from the Tel Aviv University and an MBA from Pace
University, New York. We believe Dr. Mizrahy’s executive leadership background provide him with the appropriate set of skills
to serve as a member of our Board.
Alexey Vinogradov has served
as a member of our Board since July 2019. Mr. Vinogradov currently works as Business Development Manager at Mag. Peter G. Wahl’s
Law Firm in Vienna, Austria, whose main focus is on corporate, property and commercial law. Mr. Vinogradov previously acted as Business
Development Director and Operations Director at Cantreva LLC, a Russian company with extensive specialized experience of delivering services
in the field of renewable energy (solar, wind, hydro power), performing works on a “turnkey” basis from September 2017 to
2022. Mr. Vinogradov previously served as General Manager at Togas Middle East LLC in Dubai, UAE from May 2015 to May 2017. Prior to
that, Mr. Vinogradov served as branch manager at Togas Group LLC in Russia from March 2012 to November 2016. We believe Mr. Vinogradov’s
experience in business communication, international business development and financial analytics provides him with the appropriate set
of skills to serve as a member of our Board.
3
There are no family relationships among any
of our directors and executive officers and, to the best of our knowledge, none of our directors or executive officers has, during the
past ten years, been involved in any legal proceedings which are required to be disclosed pursuant to the rules and regulations of the
SEC.
Board Role in Risk Oversight and Board Leadership
Our management is principally responsible
for defining the various risks facing the Company, formulating risk management policies and procedures, and managing our risk exposures
on a day-to-day basis. The Board’s principal responsibility in this area is to ensure that sufficient resources, with appropriate
technical and managerial skills, are provided throughout the Company to identify, assess and facilitate processes and practices to address
material risk and to monitor our risk management processes by informing itself concerning our material risks and evaluating whether management
has reasonable controls in place to address the material risks. The involvement of the Board in reviewing our business strategy is an
integral aspect of the Board’s assessment of management’s tolerance for risk and its determination of what constitutes an
appropriate level of risk for the Company.
We separate the roles of Chief Executive Officer
and Board Chair in recognition of the differences between the two roles. The Board of Directors is currently chaired by independent director,
Adam Logal, and our Chief Executive Officer, Jeffrey Eisenberg, is our only employee-director. The Chief Executive Officer is responsible
for setting the strategic direction for the Company and the day to day leadership and performance of the Company, while the Board Chair
is responsible for leading the Board in the execution of its fiduciary duties. The Board Chair presides over meetings of the full Board.
While we recognize that different board leadership structures may be appropriate for companies in different situations, we believe our
current leadership structure is the optimal structure for the Company at this time.
Our Board of Directors
During fiscal year 2023, the following served
as a member of the Company’s Board of Directors: Jeffrey Eisenberg, Dr. Grigory Borisenko, Dr. James Callaway, Firdaus Jal Dastoor,
Dr. Dmitry Genkin, Dr. Roger Kornberg, Adam Logal, Mr. Moshe Mizrahy and Alexey Vinogradov. Directors shall hold office for a one-year
term or until their successors have been duly elected and qualified. Vacancies on the Board resulting from death, resignation, disqualification,
removal, or other causes can be filled by the affirmative vote of a majority of the directors then in office. Any director so elected,
shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s
successor shall have been duly elected and qualified.
Committees of the Board
The Board has three standing committees:
an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The Board also has two special
committees: the Special Committee, which was formed on January 16, 2024, and the Financing Committee, which was formed in August 2020.
The Company has adopted charters to govern the conduct, authority and responsibilities of each of the Audit Committee, Compensation
Committee and Nominating and Corporate Governance Committee, which are available to stockholders on the Company’s website at
http://ir.xeneticbio.com/. The information on our website is not incorporated by reference into, or a part of, this Amendment or the
Original Filing.
4
Audit Committee
The Audit Committee of the Board of Directors
was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee the Company’s corporate accounting
and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions.
The Audit Committee evaluates the performance of and assesses the qualifications of the independent auditors; determines and approves
the engagement of the independent auditors; determines whether to retain or terminate the existing independent auditors or to appoint
and engage new independent auditors; reviews and approves the retention of the independent auditors to perform any proposed permissible
non-audit services; monitors the rotation of partners of the independent auditors on the Company’s audit engagement team as required
by law; reviews and approves or rejects transactions between the Company and any related persons; confers with management and the independent
auditors regarding the effectiveness of internal control over financial reporting; establishes procedures, as required under applicable
law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls
or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing
matters; and meets to review the Company’s annual audited financial statements and quarterly financial statements with management
and the independent auditor, including a review of the Company’s disclosures under the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” section of the Company’s Annual Report to Stockholders on Form
10-K.
For the fiscal year 2023, the Audit Committee
was composed of three directors: Mr. Dastoor, Dr. Callaway, and Mr. Logal (chair). The Audit Committee met five times during fiscal year
2023. The Board has adopted a written Audit Committee charter that is available to stockholders on the Company’s website at http://ir.xeneticbio.com/.
The information on our website is not incorporated by reference into, or a part of, this Amendment or the Original Filing.
The Board of Directors reviews the Nasdaq
Stock Market LLC (“Nasdaq”) listing standards definition of independence for Audit Committee members on an annual basis and
has determined that all current members of our Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i)
and (ii) of the Nasdaq listing standards).
The Board of Directors has also determined
that Mr. Logal qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative
assessment of Mr. Logal’s level of knowledge and experience based on a number of factors, including his formal education and experience
as a chief financial officer.
Director Nominations
No material changes have been made to the procedures by which stockholders
may recommend nominees to our Board.
Code of Business Conduct and Ethics
We have adopted the Xenetic Biosciences, Inc.
Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our principal executive officer,
principal financial officer and principal accounting officer. The Code of Business Conduct and Ethics is available on our website, www.xeneticbio.com,
under “Investors” at “Corporate Governance.” If we make any substantive amendments to the Code of Business Conduct
and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, we intend
to promptly disclose the nature of the amendment or waiver on our website, to the extent required by the applicable rules and exchange
requirements. The information on our website is not incorporated by reference into, or a part of, this Amendment or the Original Filing.
5
ITEM 11 – EXECUTIVE COMPENSATION
Summary Compensation Table – 2022
- 2023
The following table sets forth, for the years
ended December 31, 2023 and 2022, the compensation information for Jeffrey Eisenberg, our Chief Executive Officer, Dr. Curtis Lockshin,
our Chief Scientific Officer, and James Parslow, our Chief Financial Officer. We refer to Messrs. Eisenberg, Lockshin, and Parslow herein,
collectively, as our “named executive officers.”
Name and Principal Position
Year
Salary
($)
Option
Awards (1)
($)
Non-Equity
Incentive Plan Compensation (2) ($)
All Other
Compensation
($)
Total
($)
Jeffrey F. Eisenberg,
2023
$ 404,250
$ 67,863
$ 58,617
$ 32,764 (3)
$ 563,494
Chief Executive Officer
2022
$ 404,250
$ 98,882
$ 99,041
$ 30,654
$ 632,827
James Parslow,
2023
$ 329,175
$ 33,932
$ 33,411
$ 37,214 (4)
$ 433,732
Chief Financial Officer
2022
$ 329,175
$ 49,441
$ 56,455
$ 38,919
$ 473,990
Dr. Curtis Lockshin,
2023
$ 329,175
$ 33,932
$ 33,411
$ 39,298 (5)
$ 435,816
Chief Scientific Officer
2022
$ 329,175
$ 49,441
$ 56,455
$ 35,300
$ 470,371
_______________
(1)
The amounts
represent the aggregate grant date fair value of stock options granted in the applicable fiscal year, computed in accordance with
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, excluding
the effect of estimated forfeitures. Assumptions used in the calculation of this amount are set forth in Note 11 to our audited consolidated
financial statements included in Item 8 of the Original Filing. Mr. Eisenberg, Mr. Parslow, and Dr. Lockshin were granted options
to purchase 20,000 shares, 10,000 shares and 10,000 shares of common stock, respectively, during 2023.
(2)
Represents incentive
compensation payments earned.
(3)
Includes $19,564 for
health and welfare plans and $13,200 employer matching 401(k) contribution.
(4)
Includes $24,014 for
health and welfare plans and $13,200 employer matching 401(k) contribution.
(5)
Includes $27,164 for
health and welfare plans and $12,134 employer matching 401(k) contribution.
401(k) Plan
The Company provides all full-time employees,
including our named executive officers, with the opportunity to participate in a defined contribution 401(k) plan. Our 401(k) plan is
intended to qualify under Section 401 of the Internal Revenue Code so that employee pre-tax contributions and income earned on such contributions
are not taxable to employees until withdrawn. Employees may elect to defer up to 80 percent of their eligible compensation (not to exceed
the statutorily prescribed annual limit) in the form of elective deferral contributions to our 401(k) plan. Our 401(k) plan also has
a “catch-up contribution” feature for employees aged 50 or older (including those who qualify as “highly compensated”
employees) who can defer amounts over the statutory limit that applies to all other employees. The 401(k) plan matches 100% of employee
contributions up to a maximum of 4% of employees’ salary. Matching contributions are fully vested at the time of contribution.
6
Outstanding Equity Awards at Fiscal Year-End
– 2023
The following table sets forth certain information
with respect to outstanding equity awards held by our named executive officers at December 31, 2023.
Option
Awards
Stock
Awards
Name
Number
of Securities Underlying Unexercised Options, Exercisable
Number
of Securities Underlying Unexercised Options, Unexercisable
Option
Exercise Price ($)
Option
Expiration Date
Number
of Shares or Units of Stock That Have Not Vested
Market
Value of Shares or Units of Stock That Have Not Vested ($)
Jeffrey F. Eisenberg
1,917
(1)
–
409.20
12/2/2026
–
–
1,042
(2)
–
253.20
10/26/2027
–
–
23,000
(3)
–
13.10
12/4/2029
–
–
9,167
(4)
833
(4)
26.00
3/18/2031
–
–
5,834
(5)
4,166
(5)
11.20
3/24/2032
–
–
–
(6)
20,000
(6)
3.88
12/11/2033
–
–
James Parslow
1,459
(7)
–
548.40
4/3/2027
–
–
8,000
(8)
–
13.10
12/4/2029
–
–
4,583
(9)
417
(9)
26.00
3/18/2031
–
–
2,917
(10)
2,083
(10)
11.20
3/24/2032
–
–
–
(11)
10,000
(11)
3.88
12/11/2033
–
–
Curtis Lockshin
122
(12)
–
550.80
12/31/2024
–
–
127
(13)
–
550.80
9/6/2025
–
–
1,459
(14)
–
516.00
1/1/2027
–
–
9,000
(15)
–
13.10
12/4/2029
4,583
(16)
417
(16)
26.00
3/18/2031
–
–
2,917
(17)
2,083
(17)
11.20
3/24/2032
–
–
–
(18)
10,000
(18)
3.88
12/11/2033
–
–
________________
(1)
392
options vested 100% on the date of grant. Remainder vested one-third upon the first anniversary of the grant date, one-third of the
remaining amount upon the second anniversary of the grant date and one-third of the remaining amount on the third anniversary of
the grant date.
(2)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(3)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(4)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 18, 2022 and ending on March 18, 2024.
7
(5)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 24, 2023 and ending on March 24, 2025.
(6)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
March 11, 2025 and ending on December 11, 2026.
(7)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(8)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(9)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 18, 2022 and ending on March 18, 2024.
(10)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 24, 2023 and ending on March 24, 2025.
(11)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
March 11, 2025 and ending on December 11, 2026.
(12)
Vested
one-third upon March 3, 2015, one-third upon March 15, 2016 and one-third upon March 15, 2017.
(13)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(14)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(15)
Vested
one-third upon the first anniversary of the grant date, one-third upon the second anniversary of the grant date and one-third upon
the third anniversary of the grant date.
(16)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 18, 2022 and ending on March 18, 2024.
(17)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
June 24, 2023 and ending on March 24, 2025.
(18)
Vests
one-third upon the first anniversary of the grant date and the remaining two-thirds over eight equal quarterly installments commencing
March 11, 2025 and ending on December 11, 2026.
Pay Versus Performance Disclosure
The following tables and related disclosures
provide information about (i) the “total compensation” of our CEO, and our other named executive officers (the “ Other
NEOs ” or the “ Non-CEO NEOs ”) as presented in the Summary Compensation Table within this proxy statement,
(ii) the “compensation actually paid” to our CEO and our Other NEOs, as calculated pursuant to the SEC’s pay-versus-performance
rules, (iii) certain financial performance measures, and (iv) the relationship of the “compensation actually paid” to those
financial performance measures.
This disclosure has been prepared in accordance
with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended, and does not necessarily reflect value actually
realized by the executives or how our compensation committee evaluates compensation decisions in light of company or individual performance.
8
Year
Summary
Compensation Table Total for CEO (1)
($)
Compensation
Actually Paid to CEO (1)(2)(3)
($)
Average
Summary Compensation Table for Non-CEO NEOs (1) ($)
Average
Compensation Actually Paid to Non-CEO NEOs (1)(2)(3)
($)
Value
of Initial Fixed $100 Investment Based on Total Shareholder Return (4)
($)
Net Loss
($)
2023
$ 563,494
$ 560,385
$ 434,774
$ 433,219
$ 16.91
$ (4,134,578 )
2022
$ 632,827
$ 425,619
$ 472,180
$ 377,162
$ 13.98
$ (6,552,353 )
2021
$ 750,231
$ 505,360
$ 514,564
$ 407,285
$ 63.24
$ (5,645,179 )
_______________
(1)
The CEO
for 2023, 2022 and 2021 is Jeffrey Eisenberg. The Non-CEO NEOs for whom average compensation is presented in this table for 2023,
2022 and 2021 are James Parslow and Dr. Curtis Lockshin.
(2)
The amounts shown as
Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation
actually realized or received by the Company’s NEOs. These amounts reflect total compensation as set forth in the Summary Compensation
Table for each year, adjusted as described in footnote 3 below.
(3)
Compensation Actually
Paid reflects the exclusions and inclusions for the CEO and the Non-CEO NEOs set forth below. Amounts excluded, which are set forth
in the table below in the “Minus Stock and Option Awards from Summ. Comp. Table” columns below, represent the Stock Awards
and Option Awards reported in the Stock Awards and Option Awards columns of the Summary Compensation Table for each applicable year.
Amounts added back to determine Compensation Actually Paid are made up of the following components as applicable: (i) the fair value
as of the end of the fiscal year of outstanding and unvested equity awards granted in that year; (ii) the change in fair value during
the year of equity awards granted in prior years that remained outstanding and unvested at the end of the year; (iii) the fair value
as of the vesting date of equity awards that were granted and vested in that year, if any and (iv) the change in fair value during
the year through the vesting date of equity awards granted in prior years that vested during that year. The fair value at the end
of the prior year of awards granted in any prior year that failed to meet applicable vesting conditions during the covered year are
subtracted, although there were no such awards for the CEO or the Non-CEO NEOs in 2021, 2022 or 2023. Equity values are calculated
in accordance with ASC Topic 718.
Year
Summary
Comp.
Table
Total for
CEO
Minus
Stock and
Option
Awards
from
Summ.
Comp.
Table
Plus
Year-End
Equity
Value of
Unvested
Awards
Granted
During
Year
Plus
Change in
Value
of
Unvested
Awards
Granted
in Prior
Years
Plus
Change in
Value
of Prior
Years’
Awards
Vested
During
Year
Comp.
Actually
Paid
to CEO
2023
$ 563,494
$ 67,863
$ 59,661
$ 1,103
$ 3,990
$ 560,385
2022
$ 632,827
$ 98,882
$ 20,922
$ (37,387 )
$ (91,861 )
$ 425,619
2021
$ 750,231
$ 234,052
$ 105,378
$ (57,273 )
$ (58,924 )
$ 505,360
9
Year
Avg.
Summary
Comp.
Table
Total
for Other
NEOs
Minus
Avg. Stock
and
Option
Awards
from
Summ.
Comp.
Table
Plus
Avg. Year-
End
Equity Value
of
Unvested
Awards
Granted
During
Year
Plus
Avg. Change
in
Value of
Unvested
Awards
Granted
in Prior
Years
Plus
Avg. Change
in
Value of Prior
Year’s
Awards
Vested
During
Year
Average
Comp.
Actually
Paid to
Other
NEOs
2023
$ 434,774
$ 33,932
$ 29,830
$ 552
$ 1,995
$ 433,219
2022
$ 472,180
$ 49,441
$ 10,461
$ (18,693 )
$ (37,345 )
$ 377,162
2021
$ 514,564
$ 117,026
$ 52,689
$ (21,166 )
$ (21,776 )
$ 407,285
For the equity values
included in the above tables, the valuation assumptions used to calculate fair values of stock options were materially different
from those disclosed at the time of the grant of the stock options. The assumptions used in determining fair value of the stock options
that vested during 2021, 2022 and 2023, or that were outstanding as of December 31, 2021, December 31, 2022 or December 31, 2023,
as applicable, are as follows:
Options Vested During Year or Outstanding
on
December 31 of:
2023
2022
2021
Expected Volatility
105.80%
- 121.52%
123.60%
- 135.86%
132.43%
- 137.44%
Risk-Free Interest
Rate
3.54%
- 4.80%
2.15%
- 4.05%
1.00%
- 1.27%
Expected Dividend
Yield
0%
0%
0%
Expected Term (in
years)
3.63
- 5.82
3.5
- 5.12
4.0
– 5.12
(4)
Total Shareholder
Return illustrates the value, as of the last day of the indicated fiscal year of an investment of $100 in Xenetic common stock on
December 31, 2020.
Description of Relationship Between NEO Compensation Actually
Paid and Company Total Shareholder Return (“ TSR ”) and Net Loss
The Compensation Actually Paid to our CEO
and the average of Compensation Actually Paid to our Non-CEO NEOs increased in 2023, which corresponded to the increase in the Company’s
TSR and decrease in Net Loss in 2023. The CEO and Non-CEO NEOs Non-Equity Incentive Plan Compensation is determined based on our strategic,
financial and operating performance objectives that have been established by the Compensation Committee. While not directly tied to stock
price performance and/or net loss, these performance objectives have been established as core drivers of TSR.
Employment Agreements with our Named Executive
Officers
Employment Agreement with Mr. Eisenberg
We entered into an employment agreement with
Mr. Eisenberg effective as of December 1, 2016 for him to serve as Chief Operating Officer (the “Original Agreement”). The
Original Agreement was for an initial term of one year, and automatically renewed for successive one year periods unless either party
gave notice to the other no later than 90 days prior to the expiration of the then-applicable term; provided, however, that we could
terminate the Original Agreement at any time. Mr. Eisenberg’s annual salary under the Original Agreement was $300,000, and was
subject to annual review and upward adjustment only by the Compensation Committee of the Board. Mr. Eisenberg was also eligible to receive
a bonus equal to 35% of his annual salary based on the attainment of certain individual and/or Company goals established by the Board
or a committee thereto. Mr. Eisenberg was also eligible to participate in our employee benefit, welfare and other plans, as may be maintained
by us from time to time, on a basis no less favorable than those provided to other similarly situated executives of the Company. Mr.
Eisenberg was also subject to certain customary confidentiality, non-solicitation and non-competition provisions.
10
Under the Original Agreement, if Mr. Eisenberg’s
employment was terminated by us without “Cause” (as defined in the Original Agreement) or if he resigned for “Good
Reason” (as defined in the Original Agreement), he was entitled to receive (i) six months of his then current base salary, paid
over time in accordance with our payroll practices then in effect if he had been employed by us for six months or less, (ii) 12 months
of his then current base salary, paid over time in accordance with our payroll practices then in effect if he had been employed by us
for more than six months, (iii) a pro-rated annual bonus and (iv) payment of premiums for continued health benefits under COBRA for up
to six months.
On October 26, 2017, the Company amended and
restated the Original Agreement in order to employ Mr. Eisenberg as the Chief Executive Officer of the Company, effective as of the same
date (the “Amended Agreement”). The terms of the Amended Agreement were substantially similar to the terms of the Original
Agreement, except that Mr. Eisenberg is eligible to receive a bonus equal to 50% of his annual salary based on the attainment of certain
individual and/or Company goals established by the Board or a committee thereto, and if Mr. Eisenberg’s employment is terminated
by us without “Cause” (as defined in the Amended Agreement) or if he resigns for “Good Reason” (as defined in
the Amended Agreement), he will be entitled to receive (i) within thirty days following the date of termination, an amount equal to one
times his then current base salary, (ii) a pro-rated annual bonus and (iii) payment of premiums for continued health benefits under COBRA
for up to twelve months.
Employment Agreement with Mr. Parslow
We entered into an employment agreement with
Mr. Parslow effective as of April 3, 2017 (the “Parslow Employment Agreement”). The Parslow Employment Agreement does not
provide for a specified term of employment and Mr. Parslow’s employment will be on an at-will basis. Mr. Parslow received
an initial annual base salary of $265,000 and is eligible to earn an annual cash incentive bonus, which is set at a target aggregate
bonus amount of 35% of Mr. Parslow’s base salary, upon achievement of certain individual and/or Company performance goals set by
the Compensation Committee. Mr. Parslow is also eligible to participate in the Company’s employee benefit, welfare and other
plans, as may be maintained by the Company from time to time, on a basis no less favorable than those provided to other similarly-situated
executives of the Company. Mr. Parslow is also subject to certain customary confidentiality, non-solicitation and non-competition provisions.
If Mr. Parslow’s employment is terminated
by the Company without “cause” (as defined in the Parslow Employment Agreement) or Mr. Parslow resigns for “Good Reason”
(as defined in the Parslow Employment Agreement), he will be entitled to receive (i) one year of his then current base salary, paid over
time in accordance with the Company’s payroll practices then in effect and (ii) payment of premiums for continued health benefits
under COBRA for up to one year.
Employment Agreement with Dr. Lockshin
We entered into an employment agreement with
Dr. Lockshin effective as of January 1, 2017 (the “Lockshin Employment Agreement”). The Lockshin Employment Agreement does
not provide for a specified term of employment and Dr. Lockshin’s employment will be on an at-will basis. Dr. Lockshin received
an initial annual base salary of $250,000 and is eligible to earn an annual performance-based cash incentive bonus, which is set at a
target aggregate bonus amount of 35% of Dr. Lockshin’s base salary, upon achievement of certain individual and/or Company performance
goals established by the Board or a committee thereto. Dr. Lockshin is also eligible to participate in the Company’s employee benefit,
welfare and other plans, as may be maintained by the Company from time to time, on a basis no less favorable than those provided to other
similarly-situated executives of the Company. Dr. Lockshin is also subject to certain customary confidentiality, non-solicitation and
non-competition provisions.
If Dr. Lockshin’s employment is terminated
by the Company without “Cause” (as defined in the Lockshin Employment Agreement) or Dr. Lockshin terminates his employment
for “Good Reason” (as defined in the Lockshin Employment Agreement) and Dr. Lockshin executes and does not revoke a general
release of claims against the Company, then he will be entitled to receive (i) one year of his then current base salary, paid over time
in accordance with the Company’s payroll practices then in effect and (ii) payment of premiums for continued health benefits under
COBRA for up to twelve months.
11
Potential Payments Upon Termination or
Change of Control
Our named executive officers may be entitled
to payments upon termination or change of control. The details of such payments are included in the description of their employment agreements
above.
Director Compensation
Each of our non-employee, independent directors
is currently entitled to receive an annual retainer of $50,000, payable in equal quarterly installments, an option to acquire 2,500 shares
of the Company’s common stock upon initial appointment to the Board, and an additional option to acquire 2,500 shares each year
thereafter on the date of the Company’s annual meeting of stockholders. Upon expansion of the board from seven to nine members on December 6, 2023, the annual cash retainer was reduced to $43,000. No other changes were made to the director compensation
policy. All members of our Board are reimbursed for their usual and customary expenses incurred in connection with their service on the
Board, including out-of-pocket expenses, transportation, and airfare on the Company’s business.
Director Compensation Table
As an employee director during fiscal year
2023, Mr. Eisenberg did not receive any compensation for his Board service during the last completed year. The following table sets forth
information for the year ended December 31, 2023 regarding the compensation awarded to, earned by or paid to our non-employee directors:
Name
Fees
Earned
or Paid
in Cash
($)
Stock
Awards
($)
Option
Awards (1)(2)
($)
All
Other
Compensation
($)
Total
($)
Dr. Grigory Borisenko
$ 48,250
–
$ 9,291
–
$ 57,541
Dr. James Callaway
$ 48,250
–
$ 9,291
–
$ 57,541
Firdaus Jal Dastoor
$ 48,250
–
$ 9,291
–
$ 57,541
Dr. Dmitry Genkin (3)
$ –
–
$ –
–
$ –
Dr. Roger Kornberg
$ 48,250
–
$ 9,291
–
$ 57,541
Mr. Adam Logal
$ 48,250
–
$ 9,291
–
$ 57,541
Mr. Moshe Mizrahy (4)
$ 3,038
–
$ 9,291
–
$ 12,329
Dr. Alexey Vinogradov
$ 48,250
–
$ 9,291
–
$ 57,541
__________
(1)
The amounts
represent the aggregate grant date fair value of stock options granted during 2023, computed in accordance with FASB ASC Topic 718.
For a discussion of the assumptions and methodology used to calculate the value of our stock options, see Note 11 to our audited
financial statements included in Item 8 of the Original Filing.
(2)
The table below shows
the aggregate number of option awards outstanding for each of our non-employee directors as of December 31, 2023:
12
Name
Option Awards (#)
Dr. Grigory Borisenko
5,000
Dr. James Callaway
12,917
Firdaus Jal Dastoor
13,296
Dr. Dmitry Genkin
–
Dr. Roger Kornberg
13,126
Adam Logal
12,917
Mr. Moshe Mizrahy
2,500
Dr. Alexey Vinogradov
12,500
(3)
Elected
to the Board on December 6, 2023.
(4)
Elected to the Board
on December 6, 2023. Represents pro rata payment of director compensation for the partial period served during the year ended December
31, 2023.
See “Certain Related Person Transactions”
below for compensation arrangements involving specific members of the Board.
ITEM 12 – SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table and footnotes set forth
certain information known to us regarding beneficial ownership of our capital stock as of March 31, 2024 for:
·
each person
known by us to be the beneficial owner of more than 5% of our capital stock;
·
our named executive
officers;
·
each of our directors;
and
·
all executive officers
and directors as a group.
The number of shares beneficially owned by
each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over
which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire
within 60 days through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable
community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock
held by that person or entity.
13
The percentage of shares beneficially owned
is computed on the basis of 1,540,684 shares of our common stock outstanding as of March 31, 2024, on an as-converted basis. Shares of
our common stock that a person has the right to acquire within 60 days after March 31, 2024 are deemed outstanding for purposes of computing
the percentage ownership of the person or entity holding such rights, but are not deemed outstanding for purposes of computing the percentage
ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless
otherwise indicated below, the address for each beneficial owner listed is c/o Xenetic Biosciences, Inc., at 945 Concord Street, Framingham,
Massachusetts 01701.
Name of Beneficial Owner
Number
of Shares
Beneficially Owned (1)
Percentage of Class
Beneficially
Owned
Fiscal Year 2023 Named Executive Officers and Directors
Jeffrey Eisenberg
43,042 (2)
2.7%
James Parslow
17,792 (3)
1.1%
Dr. Curtis Lockshin
19,042 (4)
1.2%
Dr. Grigory Borisenko (5)
2,500 (6)
*
Dr. James Callaway
10,417 (7)
*
Firdaus Jal Dastoor
10,796 (8)
*
Dr. Dmitry Genkin (5)
215,964 (9)
14.0%
Dr. Roger Kornberg
10,626 (10)
*
Adam Logal
10,417 (11)
*
Moshe Mizrahy
–
*
Alexey Vinogradov
28,679 (12)
1.8%
All executive officers and directors as a group (11 persons)
221,775 (13)
13.2%
5% Current Stockholders
CLS Therapeutics Ltd.
147,500 (9)
9.6%
PJSC Pharmsynthez (5)
97,922 (14)
6.2%
_______________________
*
Represents
beneficial ownership of less than one percent (1%).
(1)
Unless otherwise indicated
below, this table is based upon corporate records, information supplied by officers, directors and, in the case of principal stockholders,
information provided by our transfer agent.
(2)
The total beneficial
ownership consists of 42,625 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024 and 417
vested restricted stock units.
(3)
The total beneficial
ownership consists of 17,792 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(4)
The total beneficial
ownership consists of 19,042 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(5)
Dr. Borisenko was employed
by Rusnano LLC, an entity affiliated with Pharmsynthez, through March 31, 2022. Dr. Dmitry Genkin is the Executive Chairman of the
board of directors of Pharmsynthez. Refer to the “Transactions with Related Persons” section below for additional information
with respect to certain related party transactions involving Dr. Genkin and Pharmsynthez (including its wholly owned subsidiaries).
(6)
The total beneficial
ownership consists of 2,500 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(7)
The total beneficial
ownership consists of 10,417 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(8)
The total beneficial
ownership consists of 10,796 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
14
(9)
Based on
the Schedule 13D/A filed with the SEC on March 18, 2024 by CLS Therapeutics Ltd., a limited company organized under the laws of Guernsey,
United Kingdom (“CLS”), CLS Therapeutics, LLC, a Delaware limited liability company and subsidiary of CLS (“CLS
LLC”), Dmitry Genkin (“Genkin”), Victor Tets (“VT”), Georgy Tets (“GT”) and M. Scott Maguire
(“Maguire”) (the “CLS 13D”): CLS has sole voting and dispositive power as to 147,500 shares of common stock,
which includes 85,000 shares of common stock owned by CLS LLC; CLS LLC has sole voting and dispositive power as to 85,000 shares
of common stock; Genkin has sole voting and dispositive power as to 68,464 shares of common stock and shared voting and dispositive
power as to 147,500 shares of common stock; VT and GT each have shared voting and dispositive power as to 147,500 shares of common
stock; and Maguire has sole voting and dispositive power as to 3,800 shares of common stock, and shared voting and dispositive power
as to 2,202 shares of common stock. CLS, as the ultimate parent of CLS LLC, may exercise voting and dispositive power over the shares
owned by CLS LLC, and as such, may be deemed the beneficial owner of such shares. Genkin, VT and GT may exercise voting and dispositive
power over the shares owned by CLS and CLS LLC, and as such, may be deemed to be the beneficial owner of such shares. According
to the 13D, the address of Genkin is Pazzale Baracca 2, Milan, Italy; the address of CLS and CLS LLC is PO Box 175, Frances House,
Sir William Place, St. Peter Port Guernsey, Channel Islands GY1 4HQ; and the address of VT and GT is 180 Varick Street, New York,
NY 10014. Refer to the “Transactions with Related Persons” section below for additional information with respect to certain
related party transactions involving CLS.
(10)
The total beneficial
ownership consists of 10,626 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(11)
The total beneficial
ownership consists of 10,417 shares issuable upon exercise of options that are exercisable within 60 days of March 31, 2024.
(12)
The total beneficial
ownership consists of 18,679 shares of common stock owned directly and 10,000 shares issuable upon exercise of options that are exercisable
within 60 days of March 31, 2024.
(13)
The total beneficial
ownership consists of 87,143 shares of common stock owned directly, 134,215 shares issuable upon exercise of options that are exercisable
within 60 days of March 31, 2024 and 417 shares of restricted stock units that are vested.
(14)
The total beneficial
ownership consists of 52,797 shares of common stock owned directly or indirectly through SynBio and 45,125 shares issuable upon the
conversion of Series B Preferred Stock that are exercisable within 60 days of March 31, 2024. SynBio is a wholly-owned subsidiary
of Pharmsynthez. Pharmsynthez may be deemed to have shared voting and shared dispositive power with respect to all the shares owned
by SynBio and therefore, Pharmsynthez may be deemed to be the beneficial owner of such shares. The address of PJSC Pharmsynthez is
9 Korpusnaya Street, Letter A 1 st Floor, St. Petersburg, 197110, Russia. Refer to the “Transactions with Related
Persons” section below for additional information with respect to certain related party transactions involving Pharmsynthez.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires
our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership of our ordinary shares and other equity securities. Such
persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review
of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year
ended December 31, 2023, we believe that all Section 16(a) filing requirements applicable to our executive officers, directors and greater
than 10% beneficial owners were complied with, except for the following: (i) Mr. Mizrahy’s initial Form 3 and initial Form 4 reporting
the initial grant of stock options upon his election to the Board were filed late, and (ii) Dr. Genkin has not yet filed the initial
Form 3 since his election to the Board.
15
Equity Compensation Plan Information
The following table sets forth information
as of December 31, 2023 with respect to compensation plans under which equity securities are authorized for issuance:
Plan Category
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights (a)
Weighted
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights (b)
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (excluding securities reflected in column (a))
(c)
Equity compensation plans approved by security holders
202,254 (1)
$ 33.52
50,310
Equity compensation plans not approved by security holders
1,459 (2)
548.40
–
Total
203,713
$ 37.22
50,310
____________________
(1)
Consists
of 202,254 shares of our common stock to be issued upon the exercise of outstanding stock options and restricted stock units under
the Xenetic Biosciences, Inc. Amended and Restated Equity Incentive Plan (“Equity Plan.”)
(2)
Represents inducement
award granted to Mr. Parslow in 2017 in connection with his employment with the Company that was not covered under the Equity Plan
in accordance with Nasdaq Listing Rule 5635(c)(4). The option has a ten-year term and is fully vested.
ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the fiscal years ended December 31,
2023 and December 31, 2022, there was not, nor is there any currently proposed transaction or series of similar transactions to which
Xenetic was or is to be a party in which the amount involved exceeded or exceeds the lesser of $120,000 or 1% of the average of our total
assets at year end for the last two completed fiscal years and in which any executive officer, director or holder of more than 5% of
any class of voting securities of Xenetic and members of that person’s immediate family had, has or will have a direct or indirect
material interest, other than as set forth in “Executive Compensation” and “Director Compensation Table” above
and as disclosed below.
Policy Regarding Related Party Transactions
Our Board adopted an amended written related
party transaction policy on August 27, 2020 to set forth the policies and procedures for the review and approval or ratification of related
party transactions by our audit committee, which replaced the policy previously adopted in November 1, 2016. Any transaction between
the Company and its officers, directors, principal stockholders or affiliates is required to be on terms no less favorable to us than
could be reasonably obtained in arms-length transactions with independent third-parties. Transactions described in this section that
occurred prior to November 1, 2016 were not covered by the Company’s related party transaction policy.
16
Certain Related Person Transactions
PJSC Pharmsynthez
Pharmsynthez directly, and indirectly through
its wholly-owned subsidiary SynBio LLC (“SynBio”), had a share ownership in the Company of approximately 3% of the total
outstanding common stock at March 31, 2024. In addition to its common stock ownership, Pharmsynthez holds approximately 1.5 million shares
of our outstanding Series B Preferred Stock at March 31, 2024. In addition, one of our directors, Dr. Dmitry Genkin, is the Executive
Chairman of the board of directors of Pharmsynthez, and, prior to March 31, 2022, Dr. Grigory Borisenko, one of our current directors,
was employed as the Investment Director of Rusnano LLC, an entity affiliated with Pharmsynthez. Additionally, one of our executive officers,
Dr. Curtis Lockshin, is an officer of a wholly-owned subsidiary of Pharmsynthez.
In August 2011, SynBio and the Company entered
into a stock subscription and collaborative development agreement (the “Co-Development Agreement”). The Company granted an
exclusive license to SynBio to develop, market and commercialize certain drug candidates utilizing molecules based on SynBio’s
technology and the Company’s proprietary technologies (PolyXen, OncoHist and ImuXen) in Russia and CIS, collectively referred to
herein as the SynBio Market. In return, SynBio granted an exclusive license to the Company to use the preclinical and clinical data generated
by SynBio in certain agreed products and to engage in the development of commercial candidates in any territory outside of the SynBio
Market.
SynBio is solely responsible for funding and
conducting their own research and clinical development activities. There are no milestone or other research-related payments provided
for under the Co-Development Agreement other than fees for the supply of each company’s respective research supplies based on their
technology, which, when provided, are due to mutual convenience and not representative of an ongoing or recurring obligation to supply
research supplies. Upon successful commercialization of any resultant products, the Company is entitled to receive a 10% royalty on sales
in certain territories and pay royalties to SynBio for sales outside those certain territories, subject to the terms of the Co-Development
Agreement. Effective December 20, 2021, SynBio assigned the Co-Development Agreement to Pharmsynthez.
Through December 31, 2023, Pharmsynthez continued
to engage in research and development activities with no resultant commercial products. In December 2020, Pharmsynthez reported positive
data from its Phase 3 clinical study of Epolong, a treatment for anemia in patients with chronic kidney disease leveraging the Company’s
PolyXen technology. In February 2021, Pharmsynthez reported in a press release that it had started the registration phase of Epolong
by filing a registration dossier to obtain approval in Russia. Pharmsynthez had reported in its press release that it expected that the
Russian stage of registration activities would be completed in 2021 and that it would be able to start production of the product as early
as the first quarter of 2022. Pharmsynthez has informed the Company that it has received a response letter indicating certain deficiencies
in the dossier and continues to develop a gap mitigation strategy with the intent of refiling the registration upon correction. The Company
did not recognize revenue in connection with the Co-Development Agreement during the years ended December 31, 2023 and 2022.
During the fourth
quarter of 2019, the Company entered into a loan agreement with Pharmsynthez (the “Pharmsynthez Loan”), pursuant to which
the Company advanced Pharmsynthez an aggregate principal amount of up to $500,000 to be used for the development of a specific product
under the Company’s Co-Development Agreement with Pharmsynthez. The Pharmsynthez Loan had an initial term of 15-months and accrued
interest at a rate of 10% per annum. The Pharmsynthez Loan was guaranteed by all of the operating subsidiaries of Pharmsynthez, including
SynBio and AS Kevelt, and was secured by all of the common and preferred stock of the Company owned by Pharmsynthez and SynBio. Pharmsynthez
paid all obligations due under the Pharmsynthez Loan in May 2023, and no further amounts are due under the Pharmsynthez Loan.
17
Serum Institute
Serum Institute had a share ownership of less
than 1% of the Company’s total outstanding common stock as of March 31, 2024. One of the Company’s directors, Firdaus Jal
Dastoor, is currently a Group Director in charge of Finance and Corporate Affairs and Company Secretary of Serum Institute. In August
2011, the Company entered into a collaborative research and development agreement with Serum Institute of India Limited (“Serum
Institute”) providing Serum Institute an exclusive license to use the Company’s PolyXen technology to research and develop
one potential commercial product, Polysialylated Erythropoietin. Serum Institute is responsible for conducting all preclinical and clinical
trials required to achieve regulatory approvals within the certain predetermined territories at Serum Institute’s own expense.
Royalty payments are payable by Serum Institute to the Company for net sales to certain customers in the Serum Institute sales territory.
There are no milestone or other research-related payments due under the collaborative arrangement. Through December 31, 2023 and 2022,
no commercial products were developed and no royalty revenue or expense was recognized by the Company related to the arrangement.
CLS Therapeutics, Ltd.
In April 2022, the Company entered into exclusive
License and Sublicense Agreements with CLS to develop its interventional DNase based oncology platform. In connection with the CLS agreements,
the Company entered into subscription agreements with CLS and OPKO pursuant to which the Company agreed to issue to CLS and OPKO, and
CLS and OPKO agreed to subscribe for, 62,500 and 25,000 shares, respectively, of the Company’s common stock. On October 12, 2022,
the Company entered into a Subscription Agreement with CLS LLC, pursuant to which the Company agreed to issue to CLS LLC, and CLS LLC
agreed to subscribe for, 85,000 shares of the Company’s common stock as consideration for the assignment by CLS and its affiliates
to the Company of certain patent rights owned by CLS and its affiliates. One of the Company’s directors, Roger Kornberg, is a member
of the scientific advisory board of CLS. However, Mr. Kornberg does not own any equity of CLS and is not receiving any economic benefit
as a result of the transactions contemplated by such agreements. Mr. Adam Logal, one of our directors, is Senior Vice President, Chief
Financial Officer, Chief Accounting Officer and Treasurer of OPKO. Two of the Company’s directors, Dr. Genkin and Mr. Mizrahy,
were recommended to the Board by CLS.
Director Independence
As required under the Nasdaq listing standards,
a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively
determined by the Board of Directors. The Board consults with advisors to ensure that the Board’s determinations are consistent
with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth
in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after
review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company,
its senior management and its independent auditors, the Board affirmatively determined that the following directors were independent
directors within the meaning of the applicable Nasdaq listing standards for the period during which they served as a member of the Board
during fiscal year 2023: Dr. Callaway, Mr. Dastoor, Dr. Kornberg, Mr. Logal, Mr. Mizrahy, Mr. Vinogradov and Dr. Borisenko.
During fiscal year 2023, all members of our
Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee were independent (as independence is currently
defined in Rule 5605 of the Nasdaq listing standards).
18
ITEM 14 – PRINCIPAL ACCOUNTING FEES AND
SERVICES
The following table represents aggregate fees
billed to the Company for the fiscal years ended December 31, 2023 and December 31, 2022, by Marcum LLP, the Company’s principal
accountant.
2023
2022
Audit Fees
$ 168,228
$ 171,454
Audit-Related Fees
20,342
20,394
Tax Fees
–
–
All Other Fees
–
–
$ 188,570
$ 191,848
Audit Fees
Audit fees include the total fees incurred
in connection with the audit of our annual consolidated financial statements for each of the years ended December 31, 2023 and 2022.
Audit-Related Fees
Audit related fees during the years ended
December 31, 2023 and December 31, 2022 include fees incurred in connection with comfort letters issued in connection with our At-The-Market
program under our S-3 registration statement.
Audit and Non-Audit Services Pre-Approval
Policy
The Audit Committee pre-approves all audit
and non-audit accounting services provided by our independent, registered accounting firm. All audit and non-audit fee services described
above were pre-approved by the Audit Committee.
Pursuant to the Board of Directors’
policy, to help ensure the independence of our independent registered public accounting firm, all auditing services and permitted non-audit
services (including the terms thereof) to be performed for us by our independent registered public accounting firm must be pre-approved
by the Audit Committee, subject to the de-minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange
Act, which are approved by the Audit Committee prior to the commencement of services.
Our Audit Committee approved and retained
Marcum LLP to audit our consolidated financial statements for 2023. Our Audit Committee reviewed all services provided by Marcum LLP
in 2023 and concluded that the services provided were compatible with maintaining its independence.
19
PART IV
ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
(a)
The following financial
statements, schedules and exhibits are filed as part of this report:
Consolidated Financial
Statements: The consolidated financial statements and report of independent registered public accounting firm required
by this item are included in Part II, Item 8 of the Original Filing;
Financial Statement
Schedules: All schedules were omitted because they are not applicable or not required, or because the required information
is shown in the consolidated financial statements or in the notes thereto.
(b)
Exhibits: The
exhibits required to be filed by Item 15 are set forth in, and filed with or incorporated by reference in, the “Exhibit Index”
of the Original Filing. The attached list of exhibits in the “Exhibit Index” sets forth the additional exhibits required
to be filed with this Amendment and is incorporated herein by reference in response to this item.
EXHIBIT INDEX
Exhibit
No.
Exhibit Index
Form
Filing Date
Exhibit
Number
Filed
Herewith
31.3
Certification of Principal Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)
X
31.4
Certification of Principal Executive Officer and Principal Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350)
X
20
SIGNATURES
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.
XENETIC BIOSCIENCES, INC.
Date: April 26, 2024
By:
/s/ JEFFREY F. EISENBERG
Jeffrey F. Eisenberg
Chief Executive Officer
21
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.