UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
(RULE 14a-101)
SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE
ACT OF 1934
(AMENDMENT NO. )
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
| ☒ |
Preliminary Proxy Statement |
| |
|
| ☐ |
Confidential, For Use of the Commission Only
(as Permitted by Rule 14a-6(e)(2)) |
| |
|
| ☐ |
Definitive Proxy Statement |
| |
|
| ☐ |
Definitive Additional Materials |
| |
|
| ☐ |
Soliciting Material under §240.14a-12 |
Lipella
Pharmaceuticals Inc.
(Name of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
| ☒ |
No fee required |
| |
|
| ☐ |
Fee paid previously
with preliminary materials. |
| |
|
| ☐ |
Fee computed on
table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11. |
7800
Susquehanna St., Suite 505
Pittsburgh,
PA
(412) 894-1853
Important
Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to Be Held on September 10, 2024
The
Notice of Annual Meeting, Proxy Statement
and
Annual Report on Form 10-K are available at:
www.proxyvote.com
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 10, 2024
To
the Stockholders of Lipella Pharmaceuticals Inc.:
NOTICE
IS HEREBY GIVEN that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Lipella Pharmaceuticals
Inc. (the “Company”) will be held online on September 10, 2024 at 2:00 p.m. Eastern Time. The Annual Meeting will
be a virtual stockholder meeting, conducted via live audio webcast, through which you can submit questions and vote online. The
Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LIPO2024 and entering your 16-digit control number (included on the proxy card attached to this proxy
statement, which is being mailed to stockholders of record on or about August 1, 2024).
The
Annual Meeting is being held for the purposes of considering and voting on the following proposals:
| |
1. |
To
elect seven (7) members of the Company’s board of directors (the “Board”), each to serve until the next
annual meeting of the Company’s stockholders and until each of their respective successors are elected and qualified
or until each of their earlier resignation or removal (“Proposal No. 1”); |
| |
2. |
To
authorize the Board to amend the Company’s second amended and restated certificate of incorporation, as amended (the
“Certificate of Incorporation”), to effect a reverse stock split (the “Reverse Stock Split”) of all
outstanding shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), by a
ratio in the range of one-for-five to one-for-one hundred and fifty, to be determined in the Board’s sole discretion
at any time after approval of such amendment and no later than the one year anniversary of such approval (“Proposal
No. 2”); |
| |
3. |
To
ratify the Board’s selection of Urish Popeck & Co., LLC as the Company’s independent registered public accountants
for the fiscal year ending December 31, 2024 (“Proposal No. 3”); and |
| |
4. |
To
transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
The
foregoing items of business are more fully described in the proxy statement (the “Proxy Statement”) that is attached
and made a part of this notice of Annual Meeting. Only stockholders of record of the Common Stock at the close of business on
August 1, 2024 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. Your vote is important regardless of the number of shares of Common Stock that you own.
The
Board of Directors recommends that you vote “FOR” each director nominee and “FOR” each of Proposals No.
2 and No. 3.
Only
stockholders of record at the close of business (5:00 p.m. Eastern Time) on August 1, 2024 are entitled to notice of, and to vote
at, the Annual Meeting and at any adjournments or postponements thereof. Whether or not you expect to attend the virtual Annual
Meeting, please complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope in order to ensure
representation of your shares of Common Stock. It will help in our preparations for the Annual Meeting if you would check the
box on the form of proxy if you plan on attending the virtual Annual Meeting. Your proxy is revocable in accordance with the procedures
set forth in the Proxy Statement.
Voting
materials, which include this Proxy Statement and the enclosed proxy card, will be first mailed to stockholders on or about August
__, 2024. If you desire to submit your vote via internet or telephone, follow the instructions at www.proxyvote.com and use the
16-digit control number provided in the proxy materials.
If
you hold shares in the name of a brokerage firm, bank, nominee or other institution, you must provide a legal proxy from that
institution in order to vote your shares at the Annual Meeting, except as otherwise discussed in the Proxy Statement.
If
you have any questions regarding the Proxy Statement, please call the toll-free number 1-800-690-6903.
All
stockholders are cordially invited to attend the virtual Annual Meeting.
| Pittsburgh, Pennsylvania |
By Order of the Board of Directors, |
| |
|
| __________, 2024 |
|
| |
Jonathan Kaufman |
| |
President, Chief Executive Officer and Chairman
of the Board |
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on September 10, 2024: This notice
of Annual Meeting and the Proxy Statement are available at www.proxyvote.com.
TABLE
OF CONTENTS
PROXY
STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
In
this proxy statement (“Proxy Statement”), Lipella Pharmaceuticals Inc., a Delaware corporation, is referred to as
“Lipella,” the “Company,” “we,” “us” and “our.”
Information
Concerning the Proxy Materials and the Annual Meeting
Proxies
in the form enclosed with this Proxy Statement are being solicited by our board of directors (the “Board”) for use
at our Annual Meeting of Stockholders (the “Annual Meeting”) to be held online on September 10, 2024 at 2:00
p.m. Eastern Time. Your vote is very important. For this reason, the Board is requesting that you permit your shares of
common stock, par value $0.0001 per share (the “Common Stock”), to be represented at the Annual Meeting by the proxies
named on the enclosed proxy card. This Proxy Statement contains important information for you to consider when deciding how to
vote on the matters brought before the Annual Meeting. Please read it carefully.
Voting
materials, which include this Proxy Statement and the enclosed proxy card, will be first mailed to stockholders on or about August
__, 2024. Voting materials, which include this Proxy Statement and the enclosed proxy card, and
our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”), filed with the U.S.
Securities and Exchange Commission (the “SEC”) on February 27, 2024, are available at www.proxyvote.com.
Only
stockholders of record of our shares of Common Stock as of the close of business on August 1, 2024 (the “Record Date”)
will be entitled to notice of, and to vote at, the Annual Meeting. As of the Record Date, 7,605,636 shares of Common Stock were
issued and outstanding. Stockholders may vote and submit proxy via the internet, by phone, or by signing, dating and returning
a proxy card; however, granting a proxy does not in any way affect a stockholder’s right to attend the Annual Meeting and
vote. Any stockholder giving a proxy has the right to revoke that proxy by (i) filing a later-dated proxy or a written notice
of revocation via internet at any time before the original proxy is exercised or (ii) attending the Annual Meeting via internet
and voting.
Dr.
Jonathan Kaufman is named as attorney-in-fact in the proxy. Dr. Kaufman is our President and Chief Executive Officer and will
vote all shares represented by properly executed proxies returned in time to be counted at the Annual Meeting, as described below
under “Voting Procedures and Vote Required.” Where a vote has been specified in the proxy with respect to the
matters identified in the Notice of the Annual Meeting, the shares represented by the proxy will be voted in accordance with those
voting specifications. If no voting instructions are indicated, your shares will be voted as recommended by the Board on all matters
and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote before
the Annual Meeting.
The
stockholders will consider and vote upon (i) a proposal to elect seven (7) members of the Board, each to serve until the Company’s
2025 Annual Meeting of Stockholders and until each of their respective successors are elected and qualified or until each of their
earlier resignation or removal (“Proposal No. 1”); (ii) a proposal to authorize the Board to amend the Company’s
second amended and restated certificate of incorporation, as amended (the “Certificate of Incorporation”) to effect
a reverse stock split (the “Reverse Stock Split”) of all outstanding shares of the Common Stock by a ratio in the
range of one-for-five to one-for-one hundred and fifty, to be determined in the Board’s sole discretion, at any time after
approval of such amendment and no later than the one year anniversary of such approval (“Proposal No. 2”); and (iii)
a proposal to ratify the Board’s selection of Urish Popeck & Co., LLC as the Company’s independent registered
public accountants for the fiscal year ending December 31, 2024 (“Proposal No. 3”). Stockholders also will consider
and act upon such other business as may properly come before the Annual Meeting.
Voting
Procedures and Vote Required
Dr.
Kaufman will vote all shares represented by properly executed proxies returned in time to be counted at the Annual Meeting. The
presence, via internet or by proxy, of at least one-third (1/3) of the outstanding shares of Common Stock entitled to vote at
the Annual Meeting is necessary to establish a quorum for the transaction of business. Shares represented by proxies which contain
withhold votes or abstention votes, as well as “broker non-vote” shares (described below), are counted as present
for purposes of determining the presence of a quorum for the Annual Meeting.
All
properly executed proxies delivered pursuant to this solicitation and not revoked will be voted at the Annual Meeting as specified
in such proxies.
Vote
Required for Election of Directors (Proposal No. 1). Our Certificate of Incorporation does not authorize cumulative voting.
Delaware law and our second amended and restated by-laws (our “Bylaws”) provide that our directors are to be elected
by a plurality of the votes cast by holders of the shares of Common Stock present and entitled to vote generally on the election
of directors. This means that the seven (7) candidates receiving the highest number of affirmative votes at the Annual Meeting
will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s
achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present
by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s
achievement of a plurality.
Vote
Required for Authorization of the Board to Amend the Certificate of Incorporation to Effect the Reverse Stock Split (Proposal
No. 2). Our Bylaws provide that, on all matters (other than the election of directors and except to the extent
otherwise required by our Certificate of Incorporation, Bylaws or applicable Delaware law), the affirmative vote of a majority
of the votes cast by holders of the shares of Common Stock present and entitled to vote on the matter will be required for approval.
Accordingly, the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present and entitled
to vote on the matter will be required to authorize the Board to amend the Certificate of Incorporation to effect the Reverse
Stock Split. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 2.
Vote
Required for Ratification of Independent Registered Public Accountants (Proposal No. 3). Our Bylaws provide that, on all
matters (other than the election of directors and except to the extent otherwise required by our Certificate of Incorporation,
Bylaws or applicable Delaware law), the affirmative vote of a majority of the votes cast by holders of the shares of Common Stock
present and entitled to vote on the matter will be required for approval. Accordingly, the affirmative vote of a majority of the
votes cast by the holders of shares of Common Stock present and entitled to vote on the matter will be required to ratify the
Board’s selection of Urish Popeck & Co., LLC as our independent registered public accountants for the fiscal year ending
December 31, 2024. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 3.
If
you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute
“broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter
without instructions from the beneficial owner and instructions are not given. Brokers that have not received voting instructions
from their clients cannot vote on their clients’ behalf on “non-routine” proposals. Broker non-votes are not
counted in tabulating the voting result for any particular proposal where the voting standard calls for the approval of “a
plurality of the votes cast” and such shares that constitute broker non-votes are not considered entitled to vote; broker
non-votes are also not counted in tabulating the voting result for any particular proposal where the voting standard calls for
the approval of “a majority of the votes cast by holders of shares of Common Stock and entitled to vote on the matter”.
However, such shares that constitute broker non-votes are counted as “shares present” at the Annual Meeting for purposes
of determining the presence of a quorum.
The
votes on Proposal No. 1 and Proposal No. 2 are considered “non-routine,” and the vote on Proposal No. 3 is considered
“routine.”
Abstentions
are counted as “shares present” at the Annual Meeting for purposes of determining the presence of a quorum but are
not counted where the voting standard for such approval calls for the approval of “a majority of the votes cast by holders
of shares of Common Stock and entitled to vote on the matter,” which is the voting standard for Proposal No. 2 and Proposal
No. 3.
Votes
at the Annual Meeting will be tabulated by one or more inspectors of election appointed by the Chief Executive Officer.
Stockholders
will not be entitled to dissenter’s rights with respect to any matter to be considered at the Annual Meeting.
Delivery
of Documents to Stockholders Sharing an Address
The
Company is required to provide an annual report and proxy statement or notice of availability of these materials to all stockholders
of record. If you have more than one account in your name or at the same address as other stockholders, the Company or your broker
may discontinue mailings of multiple copies. If you are voting by Internet and you wish to receive multiple copies, you may notify
us at the address and phone number at the end of the following paragraph if you are a stockholder of record or notify your broker
if you hold through a broker.
Once
you have received notice from your broker or us that they or we will discontinue sending multiple copies to the same address,
you will receive only one copy until you are notified otherwise or until you revoke your consent. If you received only one copy
of this proxy statement and the annual report or notice of availability of these materials and wish to receive a separate copy
for each stockholder at your household, or if, at any time, you wish to resume receiving separate proxy statements or annual reports
or notices of availability, or if you are receiving multiple statements and reports and wish to receive only one, please notify
your broker if your shares are held in a brokerage account or us if you hold registered shares. You can notify us by sending a
written request to Lipella Pharmaceuticals Inc., c/o Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717
or by calling Broadridge at 1-800-690-6903, and we will promptly deliver additional materials as requested.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our capital stock as of July 29, 2024 by
(a) each person, or group of affiliated persons, who is known to us to own beneficially 5% or more of our outstanding voting securities;
(b) each of our directors; (c) each of our named executive officers; and (d) all of our named executive officers and directors
as a group. Except as otherwise indicated in the footnotes below, we believe, based on the information provided to us, that all
persons listed below have sole voting power and investment power with respect to their shares of Common Stock or other equity
securities that they beneficially own, subject to community property laws where applicable.
For
purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common
Stock or other equity securities of the Company that such person has the right to acquire within sixty (60) days of July 29, 2024.
For purposes of computing the percentage of outstanding shares of our Common Stock or other equity securities of the Company held
by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60)
days of July 29, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person. The inclusion herein of any shares of Common Stock or other equity securities of the Company listed
as beneficially owned does not constitute an admission of beneficial ownership.
| Shares
Beneficially Owned |
| |
| Name
of and Address of Beneficial Owner(1)(2): |
|
Shares
of
Common Stock
Beneficially
Owned (3) |
|
|
Percentage
of
Common Stock
Beneficially
Owned (3) |
|
| Directors
and executive officers |
|
|
|
|
|
|
| Jonathan
Kaufman (4) |
|
|
1,671,682 |
|
|
|
20.0 |
% |
| Michael
Chancellor (5) |
|
|
1,650,470 |
|
|
|
19.7 |
% |
| Douglas
Johnston (6) |
|
|
83,333 |
|
|
|
1.1 |
% |
| Lori
Birder (7) |
|
|
16,667 |
|
|
|
|
* |
| Byong
(Christopher) Kim (8) |
|
|
51,667 |
|
|
|
|
* |
| Ryan
Pruchnic (9) |
|
|
51,667 |
|
|
|
|
* |
| Naoki
Yoshimura (10) |
|
|
55,667 |
|
|
|
|
* |
| Daniel
Cohen (11) |
|
|
41,667 |
|
|
|
|
* |
| All
executive officers and directors as a group (8 persons) |
|
|
3,516,154 |
|
|
|
37.6 |
% |
| |
|
|
|
|
|
|
|
|
| 5%
or greater stockholders: |
|
|
|
|
|
|
|
|
| Leaf
Huang (12) |
|
|
555,556 |
|
|
|
7.3 |
% |
| Richa
Mishra (13) |
|
|
508,939 |
|
|
|
6.7 |
% |
*
Less than 1%
| (1) | Except
as otherwise indicated, the persons named in the table above have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them. |
| (2) | Unless
specified otherwise, the address of each of our directors and executive officers is c/o Lipella Pharmaceuticals Inc., 7800 Susquehanna
St., Suite 505, Pittsburgh, Pennsylvania. |
| (3) | Based
on 7,605,636 shares of Common Stock issued and outstanding as of July 29, 2024. |
| (4) | Number
of shares of Common Stock beneficially owned consists of (i) 898,849 shares of Common Stock and (ii) 772,833 shares of Common
Stock issuable upon the exercise of stock options held by Dr. Kaufman. Such number of shares beneficially owned does not include
26,666 shares of Common Stock issuable upon the exercise of stock options held by Dr. Kaufman, which will not vest within 60 days
from the date of this Proxy Statement. Such stock options held by Dr. Kaufman are exercisable for shares of Common Stock at prices
ranging from $0.77 to $5.00 per share. |
|
(5) | Number
of shares of Common Stock beneficially owned consists of (i) 877,637 shares of Common Stock and (ii) 772,833 shares of Common
Stock issuable upon the exercise of stock options held by Dr. Chancellor. Such number of shares beneficially owned does not include
26,666 shares of Common Stock issuable upon the exercise of stock options held by Dr. Chancellor, which will not vest within 60
days from the date of this Proxy Statement. Such stock options held by Dr. Chancellor are exercisable for shares of Common Stock
at prices ranging from $0.77 to $5.00 per share. |
| (6) | Number
of shares of Common Stock beneficially owned consists of 83,333 shares of Common Stock issuable upon the exercise of stock options
held by Mr. Johnston. Such number of shares beneficially owned does not include 16,667 shares of Common Stock issuable upon the
exercise of stock options held by Mr. Johnston, which will not vest within 60 days from the date of this Proxy Statement. Such
stock options held by Mr. Johnston are exercisable for shares of Common Stock at prices ranging from $0.77 to $2.19 per share. |
| (7) | Number
of shares of Common Stock beneficially owned consists of 16,667 shares of Common Stock issuable upon the exercise of stock options
held by Dr. Birder. Such number of shares beneficially owned does not include 8,333 shares of Common Stock issuable upon the exercise
of stock options held by Dr. Birder, which will not vest within 60 days from the date of this Proxy Statement. Such stock options
held by Dr. Birder are exercisable for shares of Common Stock at $0.77 per share. |
| (8) | Number
of shares of Common Stock beneficially owned consists of 51,667 shares of Common Stock issuable upon the exercise of stock options
held by Dr. Kim. Such number of shares beneficially owned does not include 8,333 shares of Common Stock issuable upon the exercise
of stock options held by Dr. Kim, which will not vest within 60 days from the date of this Proxy Statement. Such stock options
held by Dr. Kim are exercisable for shares of Common Stock at prices ranging from $0.77 to $5.00 per share. |
| (9) | Number
of shares of Common Stock beneficially owned consists of 51,667 shares of Common Stock issuable upon the exercise of stock options
held by Mr. Pruchnic. Such number of shares beneficially owned does not include 8,333 shares of Common Stock issuable upon the
exercise of stock options held by Mr. Pruchnic which will not vest within 60 days from the date of this Proxy Statement. Such
stock options held by Mr. Pruchnic are exercisable for shares of Common Stock at prices ranging from $0.77 to $5.00 per share. |
| (10) | Number
of shares of Common Stock beneficially owned consists of 55,667 shares of Common Stock issuable upon the exercise of stock options
held by Dr. Yoshimura. Such number of shares beneficially owned does not include 8,333 shares of Common Stock issuable upon the
exercise of stock options held by Dr. Yoshimura, which will not vest within 60 days from the date of this Proxy Statement. Such
stock options held by Dr. Yoshimura are exercisable for shares of Common Stock at prices ranging from $0.77 to $5.00 per share. |
| (11) | Number
of shares of Common Stock beneficially owned consists of 41,667 shares of Common Stock issuable upon the exercise of stock options
held by Mr. Cohen. Such number of shares beneficially owned does not include 8,333 shares of Common Stock issuable upon the exercise
of stock options held by Mr. Cohen, which will not vest within 60 days from the date of this Proxy Statement. Such stock options
held by Mr. Cohen are exercisable for shares of Common Stock at prices ranging from $0.77 to $2.19 per share. |
| (12) | Number
of shares of Common Stock beneficially owned is based solely on an Amendment No. 1 to Schedule 13G filed by Leaf Huang with the
SEC on January 25, 2024 (the “Huang Schedule 13G”). In accordance with the disclosures set forth in the Huang Schedule
13G, Mr. Huang reports sole voting and sole dispositive power over 555,556 shares of Common Stock. Based on the information provided
in the Huang Schedule 13G, the address of Mr. Huang is 4201 Branchwood Dr., Durham, NC 27705. |
| (13) |
Based
on information provided from a list of non-objecting beneficial owners list for the Common Stock as of July 29, 2024, such
holder beneficially owns 508,939 shares of Common Stock and such holder’s address is c/o Lipella Pharmaceuticals Inc.,
7800 Susquehanna Street, Suite 505, Pittsburgh, PA 15208. |
ELECTION
OF DIRECTORS
(Proposal
No. 1)
The
following individuals have been nominated as members of the Board, each to serve until the Company’s 2025 Annual Meeting
of Stockholders, until each of their respective successors are elected and qualified, or until each of their earlier resignation
or removal. Pursuant to Delaware law and our Bylaws, directors are to be elected by a plurality of the votes of the shares cast
by holders present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors.
This means that the seven (7) candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected
as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement
of a plurality. Proxies cannot be voted for a greater number of persons than the number of nominees named or for persons other
than the named nominees.
Following
is information about each nominee, including biographical data for at least the last five (5) years, presented as of July 29,
2024. Should one or more of these nominees become unavailable to accept nomination or election as a director, the individuals
named as proxies on the enclosed proxy card will vote the shares that they represent for the election of such other persons as
the Board may recommend, unless the Board reduces the number of directors. We have no reason to believe that any nominee will
be unable or unwilling to serve if elected as a director.
| Name
of Director |
|
Age |
|
Director
Since |
| Jonathan Kaufman |
|
58 |
|
2005 |
| Michael Chancellor |
|
66 |
|
2008 |
| Lori Birder |
|
64 |
|
2023 |
| Daniel Cohen |
|
60 |
|
2023 |
| Byong (Christopher) Kim |
|
53 |
|
2022 |
| Ryan Pruchnic |
|
50 |
|
2021 |
| Naoki Yoshimura |
|
67 |
|
2021 |
Jonathan
Kaufman, PhD, MBA, President, Chief Executive Officer, Secretary, Treasurer and Chairman of the Board of Directors
Jonathan
Kaufman, PhD, MBA, has served as a director and as our Chief Executive Officer, President, Secretary and Treasurer since the Company’s
inception in 2005. From 2016 to 2019, Dr. Kaufman was a managing director and registered representative of Pickwick Capital Partners,
LLC, a growth equity firm, and from 2015 to 2018 he consulted for multiple biotechnology companies, including Menogenix Inc.,
and Frequency Therapeutics Inc. (Nasdaq: FREQ). Previously, Dr. Kaufman served as chief financial officer of Semprus Biosciences
Corp. (acquired by Teleflex Incorporated (NYSE: TFX)), chief science officer at LaunchCyte LLC, a company that creates, seeds
and harvests life science innovations from top U.S. academic institutions (“LaunchCyte”), fellow in the department
of radiation at the Hospital of the University of Pennsylvania, consultant to GlaxoSmithKline plc. (NYSE: GSK). Also, Dr. Kaufman
served on the new technology committee during his employment at Merck & Co., Inc. (NYSE: MRK). Dr. Kaufman is the co-founder
of Knopp Biosciences LLC, a privately held drug discovery and development company, and until March 2022 had served on the board
of directors of Reaction Biology Corporation, a pre-clinical contract research organization that provides a full suite of preclinical
drug discovery services. Dr. Kaufman received an MBA from the Wharton School, a PhD from the University of Pennsylvania School
of Medicine, an MS from Brown University, and a BS from Carnegie Mellon University. We believe that Dr. Kaufman is qualified to
serve on the Board due to his extensive business experience and knowledge in the life science industry.
Michael
Chancellor, MD, Chief Medical Officer and Director
Michael
Chancellor, MD, has served as a director and as our Chief Medical Officer since 2008 and has been a consultant to the Company
since 2005. Since 2008, Dr. Chancellor has served as a professor and research director at the William Beaumont School of Medicine.
He is co-founder of Cook Myosite Incorporated, company that develops and commercializes technology related to the collection,
selection, and expansion of human skeletal muscle cells for the treatment of various disorders and a wholly owned subsidiary of
Cook Medical Incorporated, a medical device company. Dr. Chancellor has been principal investigator in more than 75 clinical trials
has authored hundreds of publications regarding the treatment of urinary bladder dysfunction, has received more than 90 awards
in connection with his work with urinary bladder dysfunction, and is generally considered an international key opinion leader
in the industry. Dr. Chancellor is a board-certified urologist, previously holding the positions of instructor at the College
of Physicians and Surgeons Columbia University, associate professor at Jefferson Medical College, and professor at University
of Pittsburgh School of Medicine. He received an MD from the Medical College of Wisconsin and completed his urology residency
at the University of Michigan and his neurourology and female urology fellowship at Columbia University. We believe that Dr. Chancellor
is qualified to serve on the Board due to his extensive business experience as an executive in the pharmaceutical industry, and
his depth of knowledge and substantial experience as a research scientist.
Lori
Birder, PhD, Director
Lori
A. Birder, PhD, has served as a director of the Company since June 2023. Since 2001, Dr. Birder has been a tenured Professor of
Medicine and Pharmacology and Chemical Biology at the University of Pittsburgh School of Medicine. Dr. Birder’s research
has been durably funded by the NIH, including an NIH MERIT award, and focusses on understanding mechanisms underlying lower urinary
tract dysfunction with chronic stress, pain and aging. Dr. Birder has published more than 200 peer-reviewed articles, book chapters
and reviews. She has organized and chaired a number of symposia and workshops involving chronic visceral pain and aging, is a
member of several scientific and editorial boards and scientific societies (e.g., International Continence Society-ICS,
International Neurourology Society-INUS, International Society for the Study of Bladder Pain Syndrome-ESSIC and the Society of
Urodynamics, Female Pelvic Medicine & Urogenital Reconstruction-SUFU) and serves as an ICS Board of Trustee member and the
Founding Editor-in-Chief for the open access International Continence Society (ICS) journal ‘Continence’. We believe
that Dr. Birder is qualified to serve on our board of directors due to her experience in the field of genitourinary research and
her deep knowledge of the pharmaceutical industry.
Daniel
Cohen, MBA, Director
Daniel
Cohen, MBA, has served as a director of the Company since March 21, 2023. Since 2018, Mr. Cohen has served as managing member
and founder at Brightdrum LLC, a management consulting firm that works to accelerate growth of technology ventures. From 2021
to 2023, Mr. Cohen also served as an executive at Mojo Vision, a technology company, where he led healthcare product strategy
and medical device product management. As a serial entrepreneur, Mr. Cohen founded and served as CEO of five startups with exits,
including Personity, a mobile infrastructure software company, acquired by Openwave Systems (now Enea, STO: ENEA), and USConnect,
an enterprise software company, acquired by IKON (now Canon, NYSE: CAJ). Mr. Cohen has also held executive leadership roles in
product management, strategic partnerships, and business operations in companies including Google (now Alphabet, Nasdaq: GOOG)
and Yahoo. Mr. Cohen has worked across multiple technology sectors including health tech, IoT, consumer web, and enterprise SaaS.
Mr. Cohen is co-author of eight patents including innovations in ophthalmic medical devices, mobile communications, user interfaces,
security, presence, messaging, and peer-to-peer networks. Mr. Cohen holds a dual BS degree in electrical engineering and computer
engineering from Carnegie Mellon University, and an MBA from the Wharton School of the University of Pennsylvania. We believe
that Mr. Cohen is qualified to serve on the Board because of his extensive experience in operating and advising diverse technology
companies and commercializing innovation.
Byong
(Christopher) Kim, PhD, Director
Byong
(Christopher) Kim, PhD, has served as a director of the Company since March 2022 and is a venture capitalist with a focus on drug
discovery. Since 2015, Dr. Kim has served as managing director at Novatio Ventures, which invests in seed- to early-stage life
sciences companies originating from the U.S., Canada and Korea. He has also served as a member of the selection committee for
BaseLaunch since July 2020, an accelerator firm located in Basel, Switzerland which has supported ventures that have since raised
over $390M since its founding in 2018. Additionally, since 2016, Dr. Kim has served as an executive vice president and board member
of Bridge Biotherapeutics, Inc., a clinical stage biotech company that went public on the Korean stock exchange KOSDAQ in December
2019. Mr. Kim holds a B.S. in Biology from the University of California at Irvine, a PhD in Developmental Biology from the University
of Texas at MD Anderson, and an MBA from Carnegie Mellon University. We believe that Dr. Kim is qualified to serve on the Board
because of his experience evaluating and financing early-stage biotechnology companies.
Ryan
Pruchnic, MBA, Director
Ryan
Pruchnic, MBA, has served as a director of the Company since September 2021. Mr. Pruchnic has been employed by Cook Myosite since
2001, and currently serves as managing vice president at Cook MyoSite. Mr. Pruchnic received a bachelor’s degree in biology
and a master’s degree in exercise physiology from the University of Pittsburgh and an MBA from the Joseph M. Katz Graduate
School of Business at the University of Pittsburgh. While working as a research scientist investigating the experimental uses
of skeletal muscle-derived cells for urinary tract tissue augmentation, Mr. Pruchnic was part of the original team that custom-built
the cell isolation and manufacturing technology for use in human clinical trials. Mr. Pruchnic has authored and coauthored numerous
peer-reviewed scientific journal articles and book chapters relating to gene and cell therapy research for musculoskeletal disorders.
Currently, Mr. Pruchnic oversees the day-to-day operations and the manufacturing, quality testing and releasing of the cellular
product for human use in clinical investigations at Cook MyoSite, including leading the regulatory and clinical initiatives. We
believe that Mr. Pruchnic is qualified to serve on the Board due to his experience building a substantial global research initiative
in applied regenerative medicine.
Naoki
Yoshimura, MD, PhD, Director
Naoki
Yoshimura, MD, PhD, has served as a director of the Company since September 2021. Dr. Yoshimura is a professor and the endowed
chair of neurological research in the department of urology at the University of Pittsburgh School of Medicine, where he has been
employed since 1996. Dr. Yoshimura also serves on the appeals committee of the University of Pittsburgh School of Medicine. Dr.
Yoshimura’s research interests include understanding the mechanism inducing hyperexcitability of visceral afferent pathways
innervating the lower urinary tract in relation with pathophysiological conditions such as spinal cord injury, peripheral nerve
injury, inflammation, and diabetes mellitus, and identifying the role of neurotrophic factors in controlling the activity of visceral
afferent neurons. Since 2006, Dr. Yoshimura has served on the board of directors of the Comfortable Urology Network, a non-profit
organization. In addition, Dr. Yoshimura has served as a research officer for and on the board of directors of the International
Neuro-Urology Society since its establishment in 2016. Dr. Yoshimura is a published author of more than 300 articles, abstracts,
and book chapters, teaches several courses at the University of Pittsburgh School of Medicine, and mentors a number of students,
residents, and research fellows each year. Dr. Yoshimura is also principal investigator on several sponsored research projects
and holds a number of patents in his field. Dr. Yoshimura serves as a member of the editorial board for the Journal of the Japanese
Continence Society and the International Journal of Urology. We believe that Dr. Yoshimura is qualified to serve on the Board
due to his extensive experience in urinary bladder research and related consulting experience with the pharmaceutical industry.
Vote
Required and Recommendation
Our
Certificate of Incorporation does not authorize cumulative voting. Delaware law and our Bylaws provide that directors are to be
elected by a plurality of the votes of the shares of Common Stock cast on the election of directors. This means that the seven
(7) candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares
that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. Shares
present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly
withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a plurality.
Votes
withheld will be counted for purposes of determining the presence or absence of a quorum but will not be counted as votes cast
for any particular nominee. Broker non-votes are not entitled to vote on Proposal No. 1, and broker non-votes, if any, will be
counted for purposes of determining the presence or absence of a quorum but will not be counted for purposes of determining votes
cash for any particular nominee.
At
the Annual Meeting a vote will be taken on a proposal to approve the election of the seven (7) director nominees.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ELECTION OF THE SEVEN (7) DIRECTOR NOMINEES.
CORPORATE
GOVERNANCE
Board
of Directors
The
Board oversees our business affairs and monitors the performance of our management. In accordance with our corporate governance
principles, the Board does not involve itself in day-to-day operations. The directors keep themselves informed through discussions
with the Chief Executive Officer, other key executives, and by reading the reports and other materials sent to them and by participating
in Board and committee meetings. Our directors hold office until our next Annual Meeting and until each of their respective successors
are elected and qualified or until each of their earlier resignation or removal, or if for some other reason they are unable to
serve in the capacity of director.
Director
Independence
The
Board consists of seven members. The number of directors is fixed from time to time by the Board, subject to the terms of our
Certificate of Incorporation and our Bylaws. Each of our current directors will continue to serve as a director until the election
and qualification of his or her successor, or until his or her earlier death, disqualification, resignation, or removal.
As
our Common Stock is listed on Nasdaq Capital Market (“Nasdaq”), our determination of the independence of directors
is made using the definition of “independent director” contained in Nasdaq Rule 5605(a)(2). As of July 29, 2024, the
Board has affirmatively determined that Drs. Birder, Kim and Yoshimura and Messrs. Cohen and Pruchnic are “independent directors,”
as that term is defined in the rules and regulations of The Nasdaq Stock Market LLC (“Nasdaq Rules”). Under the Nasdaq
Rules, the Board must be composed of a majority of “independent directors.” Additionally, subject to certain limited
exceptions, the Board’s audit, compensation, and nominating and corporate governance committees also must be composed of
all independent directors.
Audit
committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934
(the “Exchange Act”). Under the Nasdaq Rules, a director will only qualify as an “independent director”
if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with
the exercise of independent judgment in carrying out the responsibilities of a director.
To
be considered to be independent for purposes of Rule 10A-3 of the Exchange Act, a member of an audit committee of a listed company
may not, other than in his capacity as a member of our audit committee, the Board, or any other committee of the Board: (1) accept,
directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries;
or (2) be an affiliated person of the listed company or any of its subsidiaries.
The
Board has undertaken a review of its composition, the composition of its committees and the independence of each director. Based
upon information requested from and provided by each director concerning his or her background, employment and affiliations, including
family relationships, the Board has determined that the following members of our Board have a relationship that would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director: Dr. Kaufman and Dr. Chancellor,
and that, other than such directors, each of our directors is “independent” as that term is defined under the listing
requirements and the Nasdaq Rules. In making this determination, the Board considered the current and prior relationships that
each non-employee director has with the Company and all other facts and circumstances the Board deemed relevant in determining
their independence, including the beneficial ownership of our Common Stock by each non-employee director.
Board
Composition and Diversity
The
following table sets forth certain diversity statistics as self-reported by the current members of the Board. Each of the categories
listed in the below table has the meaning as it is used in the Nasdaq Rules.
To
view our board diversity matrix as of September 30, 2023, please see our definitive proxy statement on Schedule 14A for our 2023
annual meeting of stockholders, filed with the SEC on October 10, 2023.
| Board
Diversity Matrix for Lipella Pharmaceuticals Inc. (As of July 29, 2024) |
| Total Number of Directors |
|
7 |
|
| |
|
Female |
|
|
Male |
|
|
Non-Binary |
|
|
Did
Not
Disclosure
Gender |
|
| Part I: Gender Identity |
|
|
|
|
|
|
|
|
|
|
|
|
| Directors |
|
1 |
|
|
6 |
|
|
— |
|
|
— |
|
| Part II: Demographic Background |
|
|
|
|
|
|
|
|
|
|
|
|
| African American or Black |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Alaskan Native or Native American |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Asian |
|
— |
|
|
2 |
|
|
— |
|
|
— |
|
| Hispanic or Latinx |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Native Hawaiian or Pacific Islander |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| White |
|
1 |
|
|
4 |
|
|
— |
|
|
— |
|
| Two or More Races or Ethnicities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| LGBTQ+ |
|
— |
|
| Did Not Disclose
Demographic Background |
|
|
|
|
|
|
|
|
|
|
|
|
Board
Meetings and Attendance
During
the 2023 fiscal year, the Board conducted its annual meeting at the Company’s headquarters in November 2023. Ongoing and
ad-hoc business throughout 2023 was conducted remotely on an as needed basis, and by means of unanimous written consent.
Annual
Meeting Attendance
Although
we do not have a formal policy regarding attendance by members of the Board at our annual meeting of shareholders, the Board encourages
all of its members to attend the annual meeting of shareholders. In November 2023, all director nominees and all then directors
attended our 2023 annual meeting of shareholders virtually.
Stockholder
Communications with the Board
Stockholders
wishing to communicate with the Board, the non-management directors, or with an individual Board member may do so by writing to
the Board, to the non-management directors, or to the particular Board member, and mailing the correspondence to: info@lipella.com.
The envelope should indicate that it contains a stockholder communication. All such stockholder communications will be forwarded
to the director or directors to whom the communications are addressed.
Board
Committees
The
Board has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of
which has the composition and the responsibilities described below. Members serve on these committees until their resignation
or until otherwise determined by the Board. Each committee operates under a charter approved by the Board. Copies of each committee’s
charter are posted on the investor relations section of our website at www.lipella.com.
Nominating
and Corporate Governance Committee
The
members of our nominating and corporate governance committee are Drs. Yoshimura and Kim and Mr. Pruchnic. Dr. Yoshimura serves
as the chairperson of our nominating and corporate governance committee. The composition of our nominating and corporate governance
committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Our
nominating and corporate governance committee oversees and assists the Board in reviewing and recommending nominees for election
as directors and is responsible for, among other things:
| ● | identifying,
considering and recommending candidates for membership on the Board; |
| ● | developing
and maintaining corporate governance policies applicable to us; |
| ● | overseeing
the process of evaluating the performance of the Board; and |
| ● | advising
the Board on other corporate governance matters. |
Our
nominating and corporate governance committee operates under a written charter which satisfies the applicable rules of the SEC
and the listing standards of Nasdaq.
Audit
Committee
The
members of our audit committee are Messrs. Cohen and Pruchnic and Dr. Birder. Mr. Pruchnic serves as the chairperson of our audit
committee. Dr. Birder and Messrs. Cohen and Pruchnic each meet the requirements for independence under the current Nasdaq listing
standards and SEC rules and regulations. Each member of our audit committee is financially literate. In addition, the Board has
determined that Mr. Pruchnic is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation
S-K promulgated under the Securities Act. This designation does not impose any duties, obligations or liabilities that are greater
than are generally imposed on members of our audit committee and the Board. Our audit committee oversees our corporate accounting
and financial reporting process, assists the Board in monitoring our financial systems and is responsible for, among other things:
| ● | our
accounting and financial reporting processes and internal controls, including our financial
statement audits and the integrity of our financial statements; |
| ● | our
compliance with applicable laws (including U.S. federal securities laws and other legal
and regulatory requirements); |
| ● | our
design, implementation and performance of the Company’s internal control function; |
| ● | our
policies with respect to risk assessment and risk management pertaining to the financial,
accounting and tax matters of the Company; |
| ● | reviewing
and approving related person transactions; |
| ● | selecting
and hiring our registered independent public accounting firm; |
| ● | the
qualifications, independence and performance of our independent auditors; and |
| ● | the
preparation of the audit committee report to be included in our annual proxy statements. |
Our
audit committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of Nasdaq.
Compensation
Committee
The
members of our compensation committee are Drs. Yoshimura, Birder and Kim. Dr. Kim serves as the chairperson of our compensation
committee. The composition of our compensation committee meets the requirements for independence under the current Nasdaq listing
standards and SEC rules and regulations. Each member of such committee is: (i) an outside director, as defined pursuant to Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) a non-employee director, as defined
in Rule 16b-3 promulgated under the Exchange Act. Our compensation committee oversees our compensation policies, plans and benefits
programs and is responsible for, among other things:
| ● | evaluating,
recommending, approving and reviewing executive officer and director compensation arrangements,
plans, policies and programs; |
| ● | overseeing
the Company’s compensation policies, plans and benefit programs, and being responsible
for the Company’s overall compensation philosophy; |
| ● | administering
our cash-based and equity-based compensation plans; and |
| ● | making
recommendations to the Board regarding any other board of director responsibilities relating
to executive compensation. |
Our
compensation committee operates under a written charter which satisfies the applicable rules of the SEC and the listing standards
of Nasdaq.
Family
Relationships
There
are no family relationships between any of the officers or directors of the Company.
Involvement
in Certain Legal Proceedings
None.
Leadership
Structure of the Board
The
Board does not currently have a policy on whether the same person should serve as both the Chief Executive Officer and Chairman
of the Board or, if the roles are separate, whether the Chairman should be selected from the non-employee directors or should
be an employee. The Board believes that it should have the flexibility to make these determinations at any given point in time
in the way that it believes best to provide appropriate leadership for the Company at that time. Jonathan Kaufman serves as Chief
Executive Officer of the Company and as Chairman of the Board. The Company does not have a lead independent director.
Risk
Oversight
One
of the key functions of the Board is informed oversight of our risk management process. The Board does not anticipate having a
standing risk management committee, but rather anticipates administering this oversight function directly through the Board as
a whole, as well as through various standing committees of the Board that address risks inherent in their respective areas of
oversight. In particular, the Board is responsible for monitoring and assessing strategic risk exposure and our audit committee
has the responsibility to consider and discuss our major financial risk exposures and the steps our management has to take to
monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management
is undertaken. The audit committee also monitors compliance with legal and regulatory requirements. Our compensation committee
also assesses and monitors whether our compensation plans, policies and programs comply with applicable legal and regulatory requirements.
Director
Nomination Procedures
There
have been no material changes to the procedures by which security holders may recommend nominees to our Board.
Insider
Trading Arrangements and Policies
We
have a written insider trading policy that applies to our directors, officers, employees and contractors, including our principal
executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.
We intend to disclose future amendments to such policy, or any waivers of its requirements, applicable to any principal executive
officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our
directors on our website identified above or in a current report on Form 8-K that we would file with the SEC.
Our
directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker
to buy or sell shares of our Common Stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to
parameters established by the director or officer when entering into the plan, without further direction from them. The director
or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive
officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material non-public
information subject to compliance with the terms of our insider trading policy. Prior to 180 days after the date of the pricing
of our initial public offering of the Company, subject to early termination, the sale of any shares under such plans would be
prohibited by the lock-up agreement that the director or officer has entered into with the underwriters.
Hedging
Policy
Our
insider trading policy prohibits our directors, officers and associates from engaging in hedging or monetization transactions,
including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds.
Information
About Our Executive Officers
Our
executive officers are:
| Name |
|
Age |
|
Position |
| Jonathan Kaufman |
|
58 |
|
President, Chief Executive Officer, Secretary
and Treasurer and Chairman of the Board of Directors |
| Michael Chancellor |
|
66 |
|
Chief Medical Officer and Director |
| Douglas Johnston |
|
40 |
|
Chief Financial Officer |
Biographical
information about Jonathan Kaufman and Michael Chancellor appears above on page 11.
Douglas
Johnston, CPA, Chief Financial Officer
Douglas
Johnston, CPA, has served as the Company’s Chief Financial Officer since November 9, 2022, and previously served in a similar
capacity as the Company’s Vice President of Finance since October 2021. Mr. Johnston has more than 15 years of experience,
including working with global pharmaceutical companies and early-stage pharmaceutical and technology companies. Most recently,
Mr. Johnston served as the chief financial officer of Apogee IT Services (“Apogee”) from 2017 to 2021. Prior to Apogee,
Mr. Johnston served from 2015 to 2017 as senior manager of finance for Mylan N.V. (specialty division), a global generic and specialty
pharmaceuticals company, director of finance from 2013 to 2015 at Forever, Inc., a digital archive and internet storage company,
assistant controller from 2011 to 2013 at Kadmon Corporation, a biopharmaceutical company that discovers, develops and markets
transformative therapies for unmet medical needs and is a subsidiary of Sanofi S.A. (Nasdaq: SNY), and prior to that, he served
as an audit manager at Deloitte Touche Tohmatsu Limited. Also, Mr. Johnston is the co-founder of Stonewall Finance, LLC. Mr. Johnston
received a bachelor’s degree in accounting from Washington and Jefferson College, is a certified public accountant licensed
in Pennsylvania, and is an active member of the American Institute of Certified Public Accountants.
Significant
Employees
Michele
Gruber has served in various roles for the Company since 2009 and currently serves as the Company’s Director of
Operations, a position she has held since March 2010. She has participated in the development of multiple Company product candidates
for the treatment of urologic diseases, as well as the design and conduct of urologic clinical trials. Mrs. Gruber’s early
work in the chemistry field included development of calibration standards for a Macromizer MALDI-TOF mass spectrometry as well
as analytical work in the biofuels industry. Mrs. Gruber was responsible for the development of GMP manufacturing and validation
and stability testing of LP-10 and has been similarly responsible for LP-310 in this regard, including preparation of the related
IND package. Mrs. Gruber holds a Bachelor’s degree in Chemistry from Carnegie Mellon University.
Janet
Okonski has served as the Company’s Director of Clinical Operations since August 2021, where she is responsible
for the Company’s clinical trial data management as well as communications with the Company’s clinical trial sites
and clinical research vendors, including medical monitoring, clinical laboratories for body-fluid analysis, safety monitoring
and overall data management. For more than twenty years prior, she was employed as a clinical research director at the University
of Pittsburgh’s Department of Urology. Mrs. Okonski has experience managing over 40 clinical trials in all phases of research,
including translational clinical research, and her experience also includes participating in clinical trial design and budgeting,
preparing FDA regulatory submissions (including IND applications) and clinical trial subject recruitment, retention and data collection.
Mrs. Okonski holds a Bachelor’s degree from Indiana University of Pennsylvania.
Delinquent
Section 16(a) Reports
Under
the securities laws of the United States, our directors, executive (and certain other) officers, and any persons holding ten percent
or more of our outstanding shares of Common Stock must report on their ownership of the Common Stock and any changes in such ownership
to the SEC. Specific due dates for these reports have been established. During the fiscal year ended December 31, 2023, all reports
required to be filed by such persons pursuant to Section 16(a) were filed on a timely basis.
DIRECTOR
COMPENSATION
We
have not implemented a formal policy with respect to compensation payable to our non-employee directors. From time to time, we
have granted equity awards to attract individuals to join the Board and for their continued service thereon. In 2023, independent
directors received $25,000 in cash compensation, or $12,500 if they served less than a full year in 2023. A former independent
director who departed our board of directors in 2023 also received $12,500 for his services. In addition, in 2023 directors were
granted options to purchase 25,000 shares of Common Stock at fair market value as of the date of issuance, expiring ten years
from issuance. In addition, we reimburse our directors for expenses associated with attending meetings of the Board and its committees.
The Board is still in the process of considering the non-employee director compensation policy.
The
following table reflects all compensation awarded to and earned by the Company’s directors for the fiscal year ended December
31, 2023.
| Name |
|
Fees
Earned
or Paid in
Cash
($) |
|
|
Stock
Awards
($) |
|
|
Stock
Option
Awards
($)(1) |
|
|
Non-Equity
Incentive
Plan
Compensation
($) |
|
|
Nonqualified
Deferred
Compensation
Earnings
($) |
|
|
All
Other
Compensation
($)(2) |
|
|
Total
($) |
|
| Byong
(Christopher) Kim |
|
|
25,000 |
|
|
|
— |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
797 |
|
|
|
63,297 |
|
| Ryan
Pruchnic |
|
|
25,000 |
|
|
|
— |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
62,500 |
|
| Naoki
Yoshimura |
|
|
25,000 |
|
|
|
— |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
62,500 |
|
| Lori
Birder |
|
|
12,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,500 |
|
| Daniel
Cohen |
|
|
25,000 |
|
|
|
— |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
1,131 |
|
|
|
63,631 |
|
| David
Battleman |
|
|
12,500 |
|
|
|
— |
|
|
|
37,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,000 |
|
| (1) | Such
board member received stock options to purchase up to 25,000 shares of Common Stock, at an aggregate grant date fair value of
$1.50 per share. Options were fully vested and exercisable upon grant date, at an exercise price of $2.19 per share. |
| (2) | The
Company reimbursed board directors for travel-related expenses. |
EXECUTIVE
OFFICER COMPENSATION
Our
named executive officers for the fiscal year ended December 31, 2023, which consist of our principal executive officer and the
next two most highly compensated executive officers, are:
| ● | Jonathan
Kaufman, our Chief Executive Officer; |
| ● | Michael
Chancellor, our Chief Medical Officer; and |
| ● | Douglas
Johnston, our Chief Financial Officer. |
Summary
Compensation Table for Fiscal Years 2023 and 2022
The
following table sets forth all plan and non-plan compensation for the last two fiscal years paid to individuals who served as
the Company’s principal executive officer and the Company’s two other most highly compensated executive officers other
than the principal executive officer at the end of the last completed fiscal year, as required by Item 402(m)(2) of Regulation
S-K of the Securities Act of 1933, as amended (the “Securities Act”). We refer to these individuals collectively as
our “Named Executive Officers.”
| Name and Principal Position | |
Year | | |
Salary | | |
Bonus | | |
Stock
Awards | | |
Option
Awards
(1) | | |
Non-Equity
Incentive
Plan
Compensation | | |
Nonqualified
deferred
compensation
earnings | | |
All Other
Compensation | | |
Total | |
| Jonathan Kaufman, | |
2023 | | |
$ | 204,133 | | |
$ | — | | |
$ | — | | |
$ | 119,250 | (2) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 323,383 | |
| Chief Executive Officer | |
2022 | | |
$ | 183,300 | | |
$ | — | | |
$ | — | | |
$ | 730,500 | (2) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 913,800 | |
| Michael Chancellor, | |
2023 | | |
$ | 195,833 | | |
$ | — | | |
$ | — | | |
$ | 119,250 | (3) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 315,083 | |
| Chief Medical Officer | |
2022 | | |
$ | 175,000 | | |
$ | — | | |
$ | — | | |
$ | 730,500 | (3) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 905,500 | |
| Douglas Johnston, | |
2023 | | |
$ | 165,000 | | |
$ | 20,000 | | |
$ | — | | |
$ | 75,000 | (4) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 260,000 | |
| Chief Financial Officer | |
2022 | | |
$ | 67,500 | | |
$ | — | | |
$ | — | | |
| — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 67,500 | |
| (1) | Amounts
reflect the aggregate grant date fair value of the stock options granted to each Named Executive Officer during the fiscal year
ended December 31, 2022 and 2023, as computed in accordance with Financial Accounting Standards Board ASC 718. |
| (2) | During
the fiscal year ended December 31, 2023, the Company granted Dr. Kaufman stock options exercisable for up to an aggregate of 79,500
shares of Common Stock, which had a grant date fair value of $1.50 per share. During the fiscal year ended December 31, 2022,
the Company granted Dr. Kaufman Stock options exercisable for 260,000 shares of Common Stock, of which (i) stock options exercisable
for up to 100,000 shares of Common Stock have a grant date fair value of $2.825 per share (which stock options were granted in
order to replace expired stock options previously held by Dr. Kaufman) and (ii) stock options exercisable for up to 160,000 shares
of Common Stock have a grant date fair value of $2.80 per share. |
| (3) | During
the fiscal year ended December 31, 2023, the Company granted Dr. Chancellor stock options exercisable for up to an aggregate of
79,500 shares of Common Stock, which had a grant date fair value of $1.50 per share. During the fiscal year ended December 31,
2021, the Company granted Dr. Chancellor stock options exercisable for up to an aggregate of 260,000 shares of Common Stock, of
which (i) stock options exercisable for up to 100,000 shares of Common Stock have a grant date fair value of $2.825 per share
(which stock options were granted in order to replace expired stock options previously held by Dr. Chancellor) and (ii) stock
options exercisable for up to 160,000 shares of Common Stock have a grant date fair value of $2.80 per share. |
| (4) | During
the fiscal year ended December 31, 2023, the Company granted Mr. Johnston stock options exercisable for up to an aggregate of
50,000 shares of Common Stock, which had a grant date fair value of $1.50 per share. |
Employment
Agreements
Jonathan
Kaufman
On
July 17, 2020, Dr. Kaufman and the Company entered into an employment agreement appointing Dr. Kaufman as Chief Executive Officer
of the Company (the “Kaufman Agreement”). The Kaufman Agreement establishes an employment term of two years beginning
on July 17, 2020, which term will be automatically extended for successive one-year periods unless either party notifies the other
party of its intention not to renew upon at least 90 days’ written notice prior to the applicable renewal date. The Kaufman
Agreement provides Dr. Kaufman with an annual base salary of $183,300. In addition, Dr. Kaufman may be entitled to receive equity
awards under the Company’s stock incentive plans, as well as reimbursement of business expenses and bonus compensation,
at the discretion of the Board, depending upon relevant factors, including but not limited to fundraising success, continued ongoing
grant revenue, successful progress in the clinic and the Company’s financial position. The Kaufman Agreement also provides
that Dr. Kaufman will participate in employee benefits plans, practices and programs maintained by the Company. On August
4, 2023, the Company and Dr. Kaufman entered into an amendment agreement, dated August 4, 2023 (the “Kaufman Amendment”),
to the Kaufman Agreement. The Kaufman Amendment amended the Kaufman Agreement solely to increase Dr. Kaufman’s annual base
salary by $50,000, to $233,300.
Pursuant
to the Kaufman Agreement, either party may terminate such agreement for any reason upon 90 days’ advance written notice.
In the event that Dr. Kaufman is terminated by the Company for Cause or by Dr. Kaufman Without Good Reason (as such terms are
defined in the Kaufman Agreement), Dr. Kaufman is entitled to any accrued but unpaid base salary, employee benefits and reimbursement
of unreimbursed expenses incurred until the date of termination. In the event that Dr. Kaufman is terminated by the Company for
Without Cause or by Dr. Kaufman for Good Reason (as such terms are defined in the Kaufman Agreement), Dr. Kaufman is entitled
to his base salary for six months following such date of termination and all unvested stock options held by Dr. Kaufman under
the Company’s stock incentive plans will immediately vest. Additionally, in the event of termination without Cause by the
Company or for Good Reason by Dr. Kaufman within 12 months of a Change in Control (as defined in the Kaufman Agreement), Dr. Kaufman
is entitled to a receive a lump sum payment of two times the annual base salary within 60 days following such termination and
reimbursement for certain health insurance premium payments.
Michael
Chancellor
On
July 17, 2020, Dr. Chancellor and the Company entered into an employment agreement appointing Dr. Chancellor as Chief Medical
Officer of the Company (the “Chancellor Agreement”). The Chancellor Agreement establishes an employment term of two
years beginning on July 17, 2020, which term will be automatically extended for successive one-year periods unless either party
notifies the other party of its intention not to renew upon at least 90 days’ written notice prior to the applicable renewal
date. The Chancellor Agreement provides that Dr. Chancellor was initially to be paid an annual base salary of $45,650, provided
that if the Company achieves adequate financial liquidity and net working capital in connection with a subsequent private offering,
such salary may be increased up to a maximum of $175,000. This amount is currently covered by federal grant revenue. In addition,
Dr. Chancellor may be entitled to receive equity awards under the Company’s stock incentive plans, as well as reimbursement
of business expenses and bonus compensation at the discretion of the Board. The Chancellor Agreement also provides that Dr. Chancellor
will participate in employee benefits plans, practices and programs maintained by the Company. On August 4, 2023, the Company
and Dr. Chancellor entered into an amendment agreement, dated August 4, 2023 (the “Chancellor Amendment”), to Chancellor
Agreement. The Chancellor Amendment amended the Chancellor Agreement solely to increase Dr. Chancellor’s annual base salary
by $50,000, to $225,000.
Pursuant
to the Chancellor Agreement, either party may terminate such agreement for any reason upon 90 days’ advance written notice.
In the event that Dr. Chancellor is terminated by the Company for Cause or by Dr. Chancellor Without Good Reason (as such terms
are defined in the Chancellor Agreement), Dr. Chancellor is entitled to any accrued but unpaid base salary, employee benefits
and reimbursement of unreimbursed expenses incurred until the date of termination. In the event that Dr. Chancellor is terminated
by the Company for Without Cause or by Dr. Chancellor for Good Reason (as such terms are defined in the Chancellor Agreement),
Dr. Chancellor is entitled to his base salary for six months following such date of termination and all unvested stock options
held by Dr. Chancellor under the Company’s stock incentive plans will immediately vest. Additionally, in the event of termination
without Cause by the Company or for Good Reason by Dr. Chancellor within 12 months of a Change in Control (as defined in the Chancellor
Agreement), Dr. Chancellor is entitled to a receive a lump sum payment of two times the annual base salary within 60 days following
such termination and reimbursement for certain health insurance premium payments.
Douglas
Johnston
Effective
November 1, 2022, Mr. Johnston and the Company entered into an employment agreement appointing Mr. Johnston as Chief Financial
Officer of the Company (the “Johnston Agreement”). The Johnston Agreement establishes an employment term of two years
beginning on November 1, 2022, which term will be automatically extended for successive one-year periods unless either party notifies
the other party of its intention not to renew upon at least 90 days’ written notice prior to the applicable renewal date.
The Johnston Agreement provides that Mr. Johnston will be paid an annual base salary of $165,000. In addition, Mr. Johnston may
be entitled to receive equity awards under the Company’s stock incentive plans, as well as reimbursement of business expenses
and bonus compensation at the discretion of the Board. The Johnston Agreement also provides that Mr. Johnston will participate
in employee benefits plans, practices and programs maintained by the Company.
Pursuant
to the Johnston Agreement, either party may terminate such agreement for any reason upon 90 days’ advance written notice.
In the event that Mr. Johnston is terminated by the Company for Cause or by Mr. Johnston Without Good Reason (as such terms are
defined in the Johnston Agreement), Mr. Johnston is entitled to any accrued but unpaid base salary, employee benefits and reimbursement
of unreimbursed expenses incurred until the date of termination. In the event that Mr. Johnston is terminated by the Company for
Without Cause or by Mr. Johnston for Good Reason (as such terms are defined in the Johnston Agreement), Mr. Johnston is entitled
to his base salary for six months following such date of termination and all unvested stock options held by Mr. Johnston under
the Company’s stock incentive plans will immediately vest. Additionally, in the event of termination without Cause by the
Company or for Good Reason by Mr. Johnston within 12 months of a Change in Control (as defined in the Johnston Agreement), Mr.
Johnston is entitled to a receive a lump sum payment of two times the annual base salary within 60 days following such termination
and reimbursement for certain health insurance premium payments.
Stonewall
Finance, LLC, of which Mr. Johnston is a partner and co-founder, and the Company previously were party to an agreement, dated
October 14, 2021 and which terminated on October 22, 2022, pursuant to which Mr. Johnston had served and performed financial and
accounting services for the Company and pursuant to which Mr. Johnston received cash payments from the Company of $4,000 per month.
Other
Compensation
We
provide standard health insurance benefits to our executive officers, on the same terms and conditions as provided to all other
eligible employees. We believe these benefits are consistent with the broad-based employee benefits provided at the companies
with whom we compete for talent and therefore are important to attracting and retaining qualified employees. Other than as described
above, there were no post-employment compensation, pension or nonqualified deferred compensation benefits earned by our Named
Executive Officers during the years ended December 31, 2023 and 2022. Beginning in 2023, the Company began offering a 401(k) retirement
savings plan to all employees, which is managed by a third-party plan manager and administrator. This is offered to our executive
officers on the same terms and conditions as provided to all other eligible employees. We do not have any pension or profit-sharing
programs for the benefit of our directors, officers or other employees. The Board may recommend adoption of one or more such programs
in the future.
Outstanding
Equity Awards at 2023 Fiscal Year End
The
following table provides information relating to the vested and unvested option and stock awards held by our Named Executive Officers
as of December 31, 2023. Each award to each Named Executive Officer is shown separately, with a footnote describing the award’s
vesting schedule if not fully vested at December 31, 2023.
| | |
Option
Awards | |
Stock
Awards | |
Name and
Principal
Position | |
Number of
Securities
Underlying
Unexercised
Options
Exercisable | | |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | |
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options | | |
Option
Exercise
Price | | |
Option
Expiration
Date | |
Number
of
Shares
or
Units
of Stock
Unvested | | |
Market
Value
of
Shares
of
Units
of Stock
Unvested | | |
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Unvested
Shares | | |
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Unvested Shares | |
| Jonathan Kaufman, | |
80,000 | | |
— | | |
— | | |
1.25 | | |
10/14/2015 | |
— | | |
— | | |
— | | |
— | |
| Chief Executive Officer | |
200,000 | | |
— | | |
— | | |
1.25 | | |
10/15/2025 | |
— | | |
— | | |
— | | |
— | |
| | |
100,000 | | |
— | | |
— | | |
1.25 | | |
10/12/2027 | |
— | | |
— | | |
— | | |
— | |
| | |
66,666 | (1) | |
33,334 | (1) | |
— | | |
5.00 | | |
03/31/2031 | |
— | | |
— | | |
— | | |
— | |
| | |
106,666 | (2) | |
53,334 | (2) | |
— | | |
5.00 | | |
09/03/2031 | |
— | | |
— | | |
— | | |
— | |
| | |
79,500 | | |
— | | |
— | | |
2.19 | | |
06/16/2033 | |
— | | |
— | | |
— | | |
— | |
| Michael Chancellor, | |
80,000 | | |
— | | |
— | | |
1.25 | | |
10/14/2015 | |
— | | |
— | | |
— | | |
— | |
| Chief Medical Officer | |
200,000 | | |
— | | |
— | | |
1.25 | | |
10/15/2025 | |
— | | |
— | | |
— | | |
— | |
| | |
100,000 | | |
— | | |
— | | |
1.25 | | |
10/12/2027 | |
— | | |
— | | |
— | | |
— | |
| | |
66,666 | (3) | |
33,334 | (3) | |
— | | |
5.00 | | |
3/31/2031 | |
— | | |
— | | |
— | | |
— | |
| | |
106,666 | (4) | |
53,334 | (4) | |
— | | |
5.00 | | |
9/3/2031 | |
— | | |
— | | |
— | | |
— | |
| | |
79,500 | | |
— | | |
— | | |
2.19 | | |
06/16/2033 | |
— | | |
— | | |
— | | |
— | |
Douglas Johnston,
Chief Financial Officer | |
50,000 | | |
— | | |
— | | |
2.19 | | |
06/16/2033 | |
— | | |
— | | |
— | | |
— | |
(1)
Such stock options exercisable for up to an aggregate of 100,000 shares of Common Stock were granted under the 2020 Plan and vest
annually in equal installments over three years, commencing on the first anniversary of the date of grant. There were 33,334 unvested
options related to this grant as of December 31, 2023.
(2)
Such stock options exercisable for up to an aggregate of 160,000 shares of Common Stock were granted under the 2020 Plan and vest
annually in equal installments over three years commencing on the first anniversary of the date of grant. Of these options, 53,334
remain unvested related to this grant as of December 31, 2023.
(3)
Such stock options exercisable for up to an aggregate of 100,000 shares of Common Stock were granted under the 2020 Plan and vest
annually in equal installments over three years, commencing on the first anniversary of the date of grant. There were 33,334 unvested
options related to this grant as of December 31, 2023.
(4)
Such stock options exercisable for up to an aggregate of 160,000 shares of Common Stock were granted under the 2020 Plan and vest
annually in equal installments over three years commencing on the first anniversary of the date of grant. Of these options, 53,334
remain unvested related to this grant as of December 31, 2023.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Other
than as described below, except compensation arrangements, since the past two fiscal years, there have been no transactions, whether
directly or indirectly, between us and any of the Company’s officers, directors, beneficial owners of more than 5% of outstanding
shares of Common Stock or outstanding shares of a class of voting preferred stock, or their family members, that exceeded the
lesser of (i) $120,000 or (ii) one percent (1%) of the average of the Company’s total assets at year-end for the last two
fiscal years, and in which any of our directors, executive officers or beneficial holders of more than 5% of any class of our
capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will
have a direct or indirect material interest.
In
August 2009 and January 2015, we issued an aggregate of $100,000 in promissory notes to our co-founder, Dr. Chancellor, of which
an aggregate face value of approximately $75,000 had been outstanding immediately prior to our initial public offering (the “Chancellor
Notes”). In connection with such initial public offering, the Company and Dr. Chancellor entered into a note cancellation
and stock purchase agreement, pursuant to which the Chancellor Notes were cancelled and in connection therewith, Dr. Chancellor
was issued an aggregate of 22,950 shares of Common Stock.
As
of December 31, 2022, Jonathan Kaufman, the Company’s Chief Executive Officer, had contributed an aggregate of $250,000
in cash to the Company to support its continued operations, in the form of a note payable. This note was paid in full at maturity
and had a balance of $0 at December 31, 2023.
Review,
Approval or Ratification of Transactions with Related Parties
We
have adopted a written related-person transactions policy that provides that our executive officers, directors, nominees for election
as a director, beneficial owners of more than 5% of our Common Stock and any members of the immediate family of the foregoing
persons, are not permitted to enter into a material related-person transaction with us without the review and approval of our
audit committee, or a committee composed solely of independent directors in the event it is inappropriate for our audit committee
to review such transaction due to a conflict of interest. Such policy provides that any request for us to enter into a transaction
with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of our Common Stock
or with any of their immediate family members or affiliates, in which the amount involved exceeds the lesser of (i) $120,000 or
(ii) one percent of the average of the Company’s total assets at year-end for the last two fiscal years, will be presented
to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, we expect that our
audit committee will consider the relevant facts and circumstances available and deemed relevant to the audit committee, including,
but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third
party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
AUDIT
COMMITTEE REPORT
The
following report (the “Audit Report”) of the Board’s audit committee (the “Audit Committee”) does
not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under
the Securities Act or the Exchange Act except to the extent the Company specifically incorporates this Audit Report by reference
therein.
Role
of the Audit Committee
The
Audit Committee’s primary responsibilities fall into three (3) broad categories:
First,
the Audit Committee is charged with monitoring the preparation of quarterly and annual financial reports by the Company’s
management, including discussions with management and the Company’s outside auditors about draft annual financial statements
and key accounting and reporting matters.
Second,
the Audit Committee is responsible for matters concerning the relationship between the Company and its outside auditors, including
recommending their appointment or removal, reviewing the scope of their audit services and related fees, as well as any other
services being provided to the Company, and determining whether the outside auditors are independent.
Third,
the Audit Committee reviews financial reporting, policies, procedures, and internal controls of the Company.
The
Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that
it deems necessary or appropriate to each of the matters assigned to it under the Audit Committee’s charter. In overseeing
the preparation of the Company’s financial statements, the Audit Committee met with management and the Company’s outside
auditors, including meetings with the Company’s outside auditors without management present, to review and discuss all financial
statements prior to their issuance and to discuss significant accounting issues. Management advised the Audit Committee that all
financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee discussed
the statements with both management and the outside auditors. The Audit Committee’s review included discussion with the
outside auditors of matters required to be discussed pursuant to Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
With
respect to the Company’s outside auditors, the Audit Committee, among other things, discussed with Urish Popeck & Co.,
LLC, the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023, matters relating
to its independence, including the disclosures made to the Audit Committee as required by the Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees).
Recommendations
of the Audit Committee. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the
Board that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2023 for filing with the U.S. Securities and Exchange Commission.
This
Audit Report has been furnished by the Audit Committee of the Board.
Ryan
Pruchnic, Chairman
Lori Birder
Daniel Cohen
AUTHORIZATION
OF THE BOARD TO AMEND THE CERTIFICATE OF INCORPORATION TO
EFFECT
A REVERSE STOCK SPLIT OF ALL OUTSTANDING SHARES OF COMMON STOCK
(Proposal No. 2)
Summary
We
are seeking stockholder approval of a proposal to authorize the Board to amend the Certificate of Incorporation to effect a reverse
stock split of all outstanding shares of Common Stock by a ratio in the range of one-for-five to one-for-one hundred and fifty,
to be determined in the Board’s sole discretion, at any time after approval of such amendment and no later than the one
year anniversary of such approval. The Board has unanimously approved this Proposal No. 2.
As
previously disclosed in a Current Report on Form 8-K filed with the SEC on April 19, 2024, the Company received a letter (the
“Nasdaq Letter”) from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC stating
that, based upon the closing bid price of the Common Stock, for the last 30 consecutive business days, the Company was not in
compliance with the requirement to maintain a minimum bid price of $1.00 per share of its Common Stock, as set forth in Nasdaq
Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
Pursuant
to Nasdaq Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until October 14, 2024, to regain compliance with
the Minimum Bid Price Requirement. If at any time before October 14, 2024, the bid price of the Common Stock closes at $1.00 per
share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has
regained compliance with the Minimum Bid Price Requirement and the matter will be closed.
If
the Company does not regain compliance with the Minimum Bid Price Requirement, the Company may be eligible for an additional 180-calendar
day grace period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly
held shares and all other initial listing standards for Nasdaq, with the exception of the Minimum Bid Price Requirement, and will
need to provide written notice of its intention to cure the deficiency during the second compliance period.
If
the Company does not regain compliance with the Minimum Bid Price Requirement by October 14, 2024, and is otherwise not eligible
for such additional 180-day grace period to regain such compliance, the Staff will provide written notice to the Company that
the Common Stock will be subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings
panel of The Nasdaq Stock Market LLC.
The
exact ratio of the Reverse Stock Split will be set at a whole number within the range of one-for-five and one-for-one hundred
and fifty as determined by the Board in its sole discretion. The Board believes that the availability of alternative reverse stock
split ratios will provide it with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated
benefits for the Company and its stockholders. In determining how to implement the Reverse Stock Split following the receipt of
stockholder approval, the Board may consider, among other things, factors such as:
| ● | the
historical trading price and trading volume of shares of Common Stock; |
| ● | the
then prevailing trading price and trading volume of shares of Common Stock and the anticipated
impact of the Reverse Stock Split on the trading market for shares of Common Stock; |
| ● | our
ability to have shares of Common Stock remain listed on Nasdaq; |
| ● | the
number of shares of Common Stock needed to reserve for issuance upon exercise and conversion
of all outstanding warrants and other convertible securities; |
| ● | the
anticipated impact of the Reverse Stock Split on our ability to raise additional financing;
and |
| ● | prevailing
general market and economic conditions. |
The
Reverse Stock Split will become effective upon filing of an amendment to the Certificate of Incorporation with the Secretary of
State of the State of Delaware. The amendment filed thereby will set forth the number of shares of Common Stock immediately prior
to the Reverse Stock Split to be combined into one share of Common Stock, within the limits set forth in this proposal. Except
for adjustments that may result from the treatment of fractional shares as described below, each holder of our shares of Common
Stock will hold the same percentage of outstanding shares of Common Stock immediately following the Reverse Stock Split as such
stockholder holds immediately prior to the Reverse Stock Split.
The
form of the certificate of amendment to the Certificate of Incorporation, pursuant to which the Reverse Stock Split would be effected,
in the event this Proposal No. 2 is approved by stockholders, will be in substantially the form attached to this Proxy Statement
as Appendix A. The text of the form of amendment accompanying this Proxy Statement is subject to amendment to reflect
the exact ratio for the Reverse Stock Split and any changes that may be required by the office of the Secretary of State of the
State of Delaware or that the Board may determine to be necessary or advisable ultimately to comply with applicable law and to
effect the Reverse Stock Split.
The
Board believes that approval of the amendment to the Certificate of Incorporation to effect the Reverse Stock Split is in the
best interests of the Company and our stockholders and has unanimously recommended that the proposed amendment be presented to
our stockholders for approval.
Board
Requirement to Implement the Reverse Stock Split
If
this Proposal No. 2 is approved, the Reverse Stock Split will be implemented, if at all, at the Board’s sole discretion
and with an exchange ratio determined by the Board as described above. Such determination shall be based upon certain factors,
including, but not limited to, the need to comply with the Minimum Bid Price Requirement, the historical trading price and trading
volume of shares of Common Stock, the then prevailing trading price and trading volume of shares of Common Stock and the anticipated
impact of the Reverse Stock Split on the trading market for shares of Common Stock, our ability to have shares of Common Stock
remain listed on Nasdaq, the number of authorized and unissued shares of Common Stock available, the anticipated impact of the
Reverse Stock Split on our ability to raise additional financing, and prevailing general market and economic conditions. No further
action on the part of stockholders would be required to either implement or not implement the Reverse Stock Split. If our stockholders
approve this Proposal No. 2, we will communicate to the public, prior to the Effective Date (as defined below), additional details
regarding the Reverse Stock Split, including the specific ratio selected by the Board.
Effective
Date
If
this Proposal No. 2 is approved by our stockholders, the Board will have sole and absolute discretion to determine whether or
not to implement the Reverse Stock Split, and if so, the ratio of the Reverse Stock Split to be implemented and the time and date
of the filing of the amendment to the Certificate of Incorporation to effect the Reverse Stock Split. If the Board determines
to implement the Reverse Stock Split after receipt of stockholder approval, we will file the certificate
of amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware on such date as the Board
determines to be the appropriate effective date for the Reverse Stock Split. Unless the Board determines otherwise, the
Reverse Stock Split will become effective, as of 5:00 p.m. Eastern Time on the date of filing of such certificate of amendment
(the “Effective Date”). Except as explained below with respect to fractional shares, the issued and outstanding shares
of Common Stock immediately prior to the Effective Date will automatically be converted, as of the Effective Date, into a
lesser number of shares of Common Stock calculated in accordance with a split ratio of between one-for-five and one-for-one hundred
and fifty, as selected by the Board and set forth in the certificate of amendment.
Purposes
of the Reverse Stock Split
The
primary purpose for the Reverse Stock Split is based on the Board’s belief that the Reverse Stock Split will be necessary
to maintain the listing of shares of Common Stock on Nasdaq. The Board believes that the Reverse Stock Split could also improve
the marketability and liquidity of the Common Stock.
Maintain
our listing on Nasdaq. Our Common Stock is traded on Nasdaq. The Board has considered the potential harm to the Company
and its stockholders should our Common Stock be delisted from Nasdaq based on any failure to comply with the Minimum Bid Price
Requirement. Delisting our Common Stock could adversely affect the liquidity of our Common Stock because alternatives, such as
the Pink Market and the other over-the-counter markets operated by OTC Markets Group Inc., are generally considered to be less
efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy
our Common Stock on an over-the-counter market. Many investors likely would not buy or sell our Common Stock due to difficulty
in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or
other reasons. The Board believes that, in the event the Minimum Bid Price Requirement is not met, the Reverse Stock Split is
an effective means for us to comply with such requirement and to avoid, or at least mitigate, the likely adverse consequences
of our Common Stock being delisted from Nasdaq by producing the immediate effect of increasing the bid price of our Common Stock.
Improve
the marketability and liquidity of the Common Stock. If this Proposal No. 2 is approved by stockholders at the Annual
Meeting and the Reverse Stock Split is implemented, we also believe that the increased market price of our Common Stock expected
as a result of implementing the Reverse Stock Split will improve the marketability and liquidity of our Common Stock and will
encourage interest and trading in our Common Stock. The Reverse Stock Split could allow a broader range of institutions to invest
in our Common Stock (namely, funds that are prohibited from buying stocks whose price is below a certain threshold), potentially
increasing the liquidity of our Common Stock. The Reverse Stock Split could also help increase analyst and broker interest in
our Common Stock, as their policies can discourage them from following or recommending companies with low stock prices. Because
of the trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal
policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers
from recommending low-priced stocks to their customers. Some of those policies and practices may function to make the processing
of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced
stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average
price per share of our Common Stock can result in individual stockholders paying transaction costs representing a higher percentage
of their total share value than would be the case if the share price were substantially higher. It should be noted, however, that
the liquidity of our Common Stock may in fact be adversely affected by the proposed Reverse Stock Split given the reduced number
of shares of Common Stock that would be outstanding after the Reverse Stock Split.
For
the above reasons, we believe that the Reverse Stock Split will help us comply with the Minimum Bid Price Requirement and, as
a result, could also improve the marketability and liquidity of our Common Stock, which is in the best interests of the Company
and our stockholders.
Risks
of the Reverse Stock Split
We
cannot assure you that the proposed Reverse Stock Split will increase our stock price and have the desired effect of compliance
with the Minimum Bid Price Requirement. The Board expects that the Reverse Stock Split, if approved and implemented,
if the Board deems it necessary, will increase the market price of our Common Stock so that we are able to comply with the Minimum
Bid Price Requirement. However, the effect of the Reverse Stock Split upon the market price of our Common Stock cannot be predicted
with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied.
It
is possible that the per share price of our Common Stock after the Reverse Stock Split will not rise in proportion to the reduction
in the number of shares of our Common Stock outstanding resulting from the Reverse Stock Split, and the market price per post-Reverse
Stock Split share may not exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time, and the Reverse
Stock Split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks.
Even if we effect the Reverse Stock Split, the market price of our Common Stock may decrease due to factors unrelated to the Reverse
Stock Split. In any case, the market price of our Common Stock may also be based on other factors which may be unrelated to the
number of shares outstanding, including our future performance. If the Reverse Stock Split is consummated and the trading price
of the Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization
may be greater than would occur in the absence of the Reverse Stock Split. Even if the market price per post-Reverse Stock Split
share of our Common Stock remains in excess of $1.00 per share, we may be delisted due to a failure to meet other continued listing
requirements, including Nasdaq listing requirements related to minimum stockholders’ equity, the minimum number of shares
that must be in the public float, the minimum market value of the public float and the minimum number of round lot holders.
The
Reverse Stock Split may decrease the liquidity of our Common Stock. The liquidity of our Common Stock may be harmed by
the Reverse Stock Split given the reduced number of shares of Common Stock that would be outstanding after the Reverse Stock Split,
particularly if the stock price does not increase as a result of the Reverse Stock Split. In addition, investors might consider
the increased proportion of unissued authorized shares of Common Stock to issued shares to have an anti-takeover effect under
certain circumstances, because the proportion allows for dilutive issuances which could prevent certain stockholders from changing
the composition of the Board or render tender offers for a combination with another entity more difficult to successfully complete.
The Board does not intend for the Reverse Stock Split to have any anti-takeover effects.
Principal
Effects of the Reverse Stock Split
Common
Stock. If this Proposal No. 2 is approved by the stockholders at the Annual Meeting and the Reverse Stock Split is implemented,
subject to the conditions set out in this Proposal No. 2, and thus amend the Certificate of Incorporation, the Company will file
a certificate of amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware. Except for
adjustments that may result from the treatment of fractional shares as described below, the issued and outstanding shares of Common
Stock immediately prior to the Effective Date will automatically be converted, as of the Effective Date, into a
lesser number of shares of Common Stock based on the exchange ratio within the approved range determined by the Board.
In addition, proportional adjustments will be made to the maximum number of shares of Common Stock issuable under, and other terms
of, (i) our equity incentive plans, and (ii) the number of shares of Common Stock issuable under, and the exercise prices of,
our outstanding exercisable securities.
Except
for adjustments that may result from the treatment of fractional shares of Common Stock as described below, because the Reverse
Stock Split would apply to all issued shares of our Common Stock, the Reverse Stock Split would not alter the relative rights
and preferences of our existing stockholders nor affect any stockholder’s proportionate equity interest in the Company.
For example, a holder of two percent (2%) of the voting power of our outstanding Common Stock immediately prior to the effectiveness
of the Reverse Stock Split will generally continue to hold two percent (2%) of the voting power of our outstanding Common Stock
immediately after the Reverse Stock Split. Moreover, the number of stockholders of record of shares of Common Stock will not be
affected by the Reverse Stock Split. The amendment to the Certificate of Incorporation itself to solely effect the Reverse Stock
Split would not change the number of authorized shares of Common Stock or the par value of the Common Stock. The Reverse Stock
Split will have the effect of creating additional unreserved shares of our authorized Common Stock. Although at present we have
no current arrangements or understandings providing for the issuance of the additional shares of Common Stock that would be made
available for issuance upon effectiveness of the Reverse Stock Split (other than pursuant to the terms of anti-dilution features
in outstanding securities), these additional shares of Common Stock may be used by us for various purposes in the future without
further stockholder approval, including, among other things:
| ● | raising
capital to fund our operations and to continue as a going concern; |
| ● | establishing
strategic relationships with other companies; |
| ● | providing
equity incentives to our employees, officers or directors; and |
| ● | expanding
our business or product lines through the acquisition of other businesses or products. |
While
the Reverse Stock Split will make additional shares of Common Stock available for the Company to use in connection with the foregoing,
the primary purpose of the Reverse Stock Split is to increase our stock price in order to comply with the Minimum Bid Price Requirement
in the event such requirement is not satisfied.
Effect
on Employee Plans and Exercisable Securities. Our equity incentive plans consist of (a) the 2008 Stock Incentive Plan
(the “2008 Plan”) and (b) the 2020 Stock Incentive Plan (the “2020 Plan”).
Pursuant
to the terms of the 2008 Plan, the number and kind of shares subject to outstanding Awards (as defined in the 2008 Plan), the
Purchase Price (as defined in the 2008 Plan) for such shares, the number and kind of shares available for Awards subsequently
granted under the 2008 Plan and the maximum number of shares in respect of which Awards can be made to any Participant (as defined
in the 2008 Plan) in any calendar year will be appropriately adjusted to reflect the effect of the Reverse Stock Split. This would
result in approximately the same aggregate price being required to be paid under such outstanding securities upon exercise and
approximately the same value of shares of Common Stock being delivered upon such exercise immediately following the Reverse Stock
Split as was the case immediately preceding the Reverse Stock Split. Under the 2008 Plan, the Board has the power and sole discretion
to determine the amount of the adjustment to be made in each case.
Pursuant
to the terms of the 2020 Plan, the number and class of securities available under the 2020 Plan, (ii) the share counting rules
set forth in Section 3 of the 2020 Plan, (iii) the number and class of securities and exercise price per share of each outstanding
Option (as defined in the 2020 Plan), (iv) the share and per-share provisions and the measurement price of each outstanding SAR
(as defined in the 2020 Plan), (v) the number of shares subject to and the repurchase price per share (if any) subject to each
outstanding Stock Award (as defined in the 2020 Plan), and (vi) the share and per-share-related provisions and the purchase price,
if any, of each outstanding Other Award (as defined in the 2020 Plan), shall be equitably adjusted (or substituted Awards (as
defined in the 2020 Plan) may be made, if applicable) to reflect the effect of the Reverse Stock Split as the Board or, in the
discretion of the Board, a committee or subcommittee of the Board appointed by the Board, in its sole discretion, deems appropriate.
This would result in approximately the same aggregate price being required to be paid under such outstanding securities upon exercise,
settlement or exchange, as applicable, and approximately the same value of shares of Common Stock being delivered upon such exercise,
settlement or exchange immediately following the Reverse Stock Split as was the case immediately preceding the Reverse Stock Split.
Listing. Our
shares of Common Stock currently trade on Nasdaq. The Reverse Stock Split will directly affect the listing of our Common Stock
on Nasdaq, and we believe that the Reverse Stock Split could potentially increase our stock price, facilitating compliance with
the Minimum Bid Price Requirement. Following the Reverse Stock Split, we intend for our Common Stock to continue to be listed
on Nasdaq under the symbol “LIPO,” subject to our ability to continue to comply with the Nasdaq Rules, although our
Common Stock will have a new committee on uniform securities identification procedures (CUSIP) number, a number used to identify
our Common Stock.
“Public
Company” Status. Our Common Stock is currently registered under Section 12(b) of the Exchange Act, and we are subject
to the “public company” periodic reporting and other requirements of the Exchange Act. The proposed Reverse Stock
Split will not affect our status as a public company or this registration under the Exchange Act. The Reverse Stock Split is not
intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Exchange
Act.
Odd
Lot Transactions. It is likely that some of our stockholders will own “odd-lots” of less than 100 shares
of Common Stock following the Reverse Stock Split. A purchase or sale of less than 100 shares of Common Stock (an “odd lot”
transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service”
brokers, and generally may be more difficult than a “round lot” sale. Therefore, those stockholders who own less than
100 shares of Common Stock following the Reverse Stock Split may be required to pay somewhat higher transaction costs and may
experience some difficulties or delays should they then determine to sell their shares of Common Stock.
Authorized
but Unissued Shares; Potential Anti-Takeover Effects. The Certificate of Incorporation presently authorizes 200,000,000
shares of Common Stock and 20,000,000 shares of preferred stock, par value $0.0001 per
share. The Reverse Stock Split would not change the number of authorized shares of Common Stock or the par value per share
of the Common Stock, although the Reverse Stock Split would decrease the number of issued and outstanding shares of Common Stock.
Therefore, because the number of issued and outstanding shares of Common Stock would decrease, the number of shares of Common
Stock remaining available for issuance by us in the future would increase.
Such
additional shares of Common Stock would be available for issuance from time to time for corporate purposes such as issuances of
Common Stock in connection with capital-raising transactions and acquisitions of companies or other assets, as well as for issuance
upon conversion or exercise of securities such as convertible preferred stock, convertible debt, warrants or options convertible
into or exercisable for Common Stock. We believe that the availability of the additional shares of Common Stock will provide us
with the flexibility to meet business needs as they arise, to take advantage of favorable opportunities and to respond effectively
in a changing corporate environment. For example, we may elect to issue shares of Common Stock to raise equity capital, to make
acquisitions through the use of stock, to establish strategic relationships with other companies, to adopt additional employee
benefit plans or reserve additional shares of Common Stock for issuance under such plans, where the Board determines it advisable
to do so, without the necessity of soliciting further stockholder approval, subject to applicable stockholder vote requirements
under Delaware law and Nasdaq Rules. If we issue additional shares of Common Stock for any of these purposes, the aggregate ownership
interest of our current stockholders, and the interest of each such existing stockholder, would be diluted, possibly substantially.
The
additional shares of our Common Stock that would become available for issuance upon an effective Reverse Stock Split could also
be used by us to oppose a hostile takeover attempt or delay or prevent a change of control or changes in or removal of our management,
including any transaction that may be favored by a majority of our stockholders or in which our stockholders might otherwise receive
a premium for their shares of Common Stock over then-current market prices or benefit in some other manner. Although the increased
proportion of authorized but unissued shares of Common Stock to issued shares of Common Stock could, under certain circumstances,
have an anti-takeover effect, the Reverse Stock Split is not being proposed in order to respond to a hostile takeover attempt
or to an attempt to obtain control of the Company.
Fractional
Shares
We
will not issue fractional shares as a result of the Reverse Stock Split. Instead, in the event that a holder of pre-Reverse Stock
Split shares of Common Stock would have been entitled to receive fractional shares of Common Stock as a result of the Reverse
Stock Split, the Company will issue an additional share in lieu thereof to
such holder.
No
Dissenters’ Rights
Under
Delaware law, our stockholders would not be entitled to dissenters’ rights or rights of appraisal in connection with the
implementation of the Reverse Stock Split, and we will not independently provide our stockholders with any such rights.
Certain
United States Federal Income Tax Consequences
The
following is a summary of certain United States federal income tax consequences of the Reverse Stock Split. It does not address
any state, local or foreign income or other tax consequences, which, depending upon the jurisdiction and the status of the stockholder/taxpayer,
may vary from the United States federal income tax consequences. It applies to you only if you held pre-Reverse Stock Split shares
of Common Stock as capital assets for United States federal income tax purposes. This discussion does not apply to you if you
are a member of a class of our stockholders subject to special rules, such as (a) a dealer in securities or currencies, (b) a
trader in securities that elects to use a mark-to-market method of accounting for your securities holdings, (c) a bank, (d) a
life insurance company, (e) a tax-exempt organization, (f) a person that owns shares of Common Stock that are a hedge, or that
are hedged, against interest rate risks, (g) a person who owns shares of Common Stock as part of a straddle or conversion transaction
for tax purposes, or (h) a person whose functional currency for tax purposes is not the U.S. dollar. The discussion is based on
the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), its legislative history, existing, temporary
and proposed regulations under the Internal Revenue Code, published rulings and court decisions, all as of the date hereof. These
laws, regulations and other guidance are subject to change, possibly on a retroactive basis. We have not sought and will not seek
an opinion of counsel or a ruling from the Internal Revenue Service regarding the United States federal income tax consequences
of the Reverse Stock Split.
PLEASE
CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF THE REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE
INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.
Tax
Consequences to United States Holders of Common Stock. A United States holder, as used herein, is a stockholder who or
that is, for United States federal income tax purposes: (a) a citizen or individual resident of the United States, (b) a domestic
corporation, (c) an estate whose income is subject to United States federal income tax regardless of its source, or (d) a trust,
if a United States court can exercise primary supervision over the trust’s administration and one or more United States
persons are authorized to control all substantial decisions of the trust. This discussion applies only to United States holders.
If
a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner
of our Common Stock, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities
of the partnership. Partnerships and partners of a partnership holding our Common Stock are urged to consult their tax advisors
regarding the U.S. tax consequences of the Reverse Stock Split.
The
Company intends for the transaction to qualify as a “reorganization” within the meaning of Section 368(a) of the Code
for U.S. federal income tax purposes, and the remainder of the disclosure assumes it will so qualify. However, the Company has
not sought and will not seek any ruling from the IRS regarding any matters relating to the transaction, and as a result, there
can be no assurance that the IRS will not assert, or that a court would not sustain, a contrary position, in which case the consequences
of the transaction could be materially different from those described herein.
Provided
that the Reverse Stock Split qualifies as a “reorganization,” and except for adjustments that may result from the
treatment of fractional shares of Common Stock as described above, no gain or loss should be recognized by a stockholder upon
such stockholder’s exchange of pre-Reverse Stock Split shares of Common Stock for post-Reverse Stock Split shares of Common
Stock pursuant to the Reverse Stock Split. The aggregate adjusted basis of the post-Reverse Stock Split shares of Common Stock
received will be the same as the aggregate adjusted basis of the Common Stock exchanged for such new shares. The stockholder’s
holding period for the post-Reverse Stock Split shares of Common Stock will include the period during which the stockholder held
the pre-Reverse Stock Split shares of Common Stock surrendered.
Accounting
Consequences
Following
the Effective Date, if any, the net income or loss and net book value per share of Common Stock will be increased because there
will be fewer shares of Common Stock outstanding. We do not anticipate that any other accounting consequences would arise as a
result of the Reverse Stock Split.
Exchange
of Stock Certificates
As
of the Effective Date, each certificate representing shares of Common Stock outstanding before the Reverse Stock Split will be
deemed, for all corporate purposes, to evidence ownership of the reduced number of shares of Common Stock resulting from the Reverse
Stock Split. All shares of Common Stock underlying options, warrants, preferred stock and other securities exchangeable or exercisable
for or convertible into Common Stock also automatically will be adjusted on the Effective Date.
Our
transfer agent, Nevada Agency and Transfer Company, will act as the exchange agent for purposes of exchanging stock certificates
subsequent to the Reverse Stock Split. Shortly after the Effective Date, stockholders of record will receive written instructions
requesting them to complete and return a letter of transmittal and surrender their old stock certificates for new stock certificates
reflecting the adjusted number of shares as a result of the Reverse Stock Split. Certificates representing shares of Common Stock
issued in connection with the Reverse Stock Split will continue to bear the same restrictive legends, if any, that were borne
by the surrendered certificates representing the shares of Common Stock outstanding prior to the Reverse Stock Split. No new certificates
will be issued until such stockholder has surrendered any outstanding certificates, together with the properly completed and executed
letter of transmittal, to the exchange agent. Until surrendered, each certificate representing shares of Common Stock outstanding
before the Reverse Stock Split would continue to be valid and would represent the adjusted number of shares of Common Stock, based
on the ratio of the Reverse Stock Split.
Any
stockholder whose stock certificates are lost, destroyed or stolen will be entitled to a new certificate or certificates representing
post-Reverse Stock Split shares of Common Stock upon compliance with the requirements that we and our transfer agent customarily
apply in connection with lost, destroyed or stolen certificates. Instructions as to lost, destroyed or stolen certificates will
be included in the letter of instructions from the exchange agent.
Upon
the Reverse Stock Split, we intend to treat stockholders holding our Common Stock in “street name,” through a bank,
broker or other nominee, in the same manner as registered stockholders whose shares of Common Stock are registered in their names.
Banks, brokers and other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our
Common Stock in “street name.” However, such banks, brokers and other nominees may have different procedures than
registered stockholders for processing the Reverse Stock Split. If you hold your shares in “street name” with a bank,
broker or other nominee, and if you have any questions in this regard, we encourage you to contact your bank, broker or nominee.
YOU
SHOULD NOT DESTROY YOUR STOCK CERTIFICATES AND YOU SHOULD NOT SEND THEM NOW. YOU SHOULD SEND YOUR STOCK CERTIFICATES ONLY AFTER
YOU HAVE RECEIVED INSTRUCTIONS FROM THE EXCHANGE AGENT AND IN ACCORDANCE WITH THOSE INSTRUCTIONS.
If
any certificates for shares of Common Stock are to be issued in a name other than that in which the certificates for shares of
Common Stock surrendered are registered, the stockholder requesting the reissuance will be required to pay to us any transfer
taxes or establish to our satisfaction that such taxes have been paid or are not payable and, in addition, (a) the transfer must
comply with all applicable federal and state securities laws, and (b) the surrendered certificate must be properly endorsed and
otherwise be in proper form for transfer.
Book-Entry
The Company’s registered stockholders may hold some or all of their shares of Common Stock electronically in book-entry
form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of Common Stock. They
are, however, provided with a statement reflecting the number of shares of Common Stock registered in their accounts.
| ● | If
you hold registered shares of Common Stock in book-entry form, you do not need to take
any action to receive your post-Reverse Stock Split shares of Common Stock in registered
book-entry form. |
| ● | If
you are entitled to post-Reverse Stock Split shares of Common Stock, a transaction statement
will automatically be sent to your address of record by our transfer agent as soon as
practicable after the Effective Date indicating the number of shares of Common Stock
that you hold. |
Interests
of Directors and Executive Officers
Our
directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal
except to the extent of their ownership of shares of our Common Stock and equity awards granted to them under our equity incentive
plans.
Vote
Required and Recommendation
Our
Bylaws provide that, on all matters (other than the election of directors and except to the extent otherwise required by our Certificate
of Incorporation, Bylaws or applicable Delaware law), the affirmative vote of a majority of the votes cast by holders of the shares
of Common Stock present and entitled to vote on the matter will be required for approval. Accordingly, the affirmative vote of
a majority of the votes cast by the holders of shares of Common Stock present and entitled to vote on the matter will be required
to authorize the Board to amend the Certificate of Incorporation to effect a Reverse Stock Split of all outstanding shares of
Common Stock.
Abstentions
will be counted for purposes of determining the presence or absence of a quorum but will not be counted as votes cast and therefore
will not be counted for purposes of determining whether Proposal No. 2 has been approved. Since broker non-votes are not entitled
to vote on Proposal No. 2, broker non-votes, if any, will be counted for purposes of determining the presence or absence of a
quorum but will not be counted for purposes of determining whether Proposal No. 2 has been approved.
At
the Annual Meeting a vote will be taken on a proposal to authorize the Board to amend the Certificate of Incorporation to effect
a Reverse Stock Split of all outstanding shares of Common Stock.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE REVERSE
STOCK SPLIT PROPOSAL.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
(Proposal
No. 3)
Urish
Popeck & Co., LLC (“Urish”) has served as our independent registered public accounting firm since 2020 and has
been appointed by the Audit Committee to continue as our independent registered public accounting firm for the fiscal year ending
December 31, 2024.
At
the Annual Meeting, the stockholders will vote on a proposal to ratify this selection of Urish as our independent registered public
accounting firm. If this ratification is not approved by the affirmative vote of a majority of the shares of Common Stock present
at the Annual Meeting, in person or by proxy, and voting on the matter, the Board will reconsider its selection of Urish as our
independent registered public accounting firm.
Urish
has no interest, financial or otherwise, in our Company. We do not currently expect a representative of Urish to physically attend
the Annual Meeting, however, it is anticipated that an Urish representative will be available to participate in the Annual Meeting
via telephone in the event he or she wishes to make a statement, or in order to respond to appropriate questions.
Fees
Paid to Independent Registered Public Accounting Firm
The
following table presents aggregate fees for professional services rendered by Urish for the audit of our annual financial statements
for the fiscal years ended December 31, 2023 and 2022.
| | |
2023 | | |
2022 | |
| Audit fees(1) | |
$ | 76,617 | | |
$ | 92,397 | |
| Audit-related fees(2) | |
| — | | |
| — | |
| Tax fees(3) | |
| 14,108 | | |
| 9,554 | |
| All other fees | |
| — | | |
| — | |
| Total | |
$ | 90,725 | | |
$ | 101,951 | |
(1)
“Audit fees” include fees for professional services rendered in connection with the audit of our annual financial
statements, review of our quarterly condensed financial statements and advisory services on accounting matters that were addressed
during the annual audit and quarterly review. This category also includes fees for services that were incurred in connection with
statutory and regulatory filings or engagements, such as consents and review of documents filed with the SEC.
(2)
“Audit-related fees” include fees billed for professional services rendered that are reasonably related to the performance
of the audit or review of our financial statements, including subscription for the online library of accounting research literature
and are not reported under “Audit Fees”.
(3)
“Tax fees” include fees for tax compliance. Tax compliance fees encompass a variety of permissible services, including
technical tax advice related to federal and state income tax matters, and assistance with tax audits.
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accountant
Our
Audit Committee pre-approves all audit and non-audit services provided by our independent auditors prior to the engagement of
such independent auditors with respect to such services. The chairman of our Audit Committee has been delegated the authority
by the Audit Committee to pre-approve interim services by our independent auditors other than the annual audit. The chairman of
our Audit Committee must report all such pre-approvals to the entire Audit Committee at the next committee meeting.
Vote
Required and Recommendation
Our
Bylaws provide that, on all matters (other than the election of directors and except to the extent otherwise required by our Certificate
of Incorporation, Bylaws or applicable Delaware law), the affirmative vote of a majority of the votes cast by holders of the shares
of Common Stock present and entitled to vote on the matter will be required for approval. Accordingly, the affirmative vote of
a majority of the votes cast by holders of the shares of Common Stock present and entitled to vote on the matter will be required
to ratify the Board’s selection of Urish as our independent registered public accountants for the fiscal year ending December
31, 2024. If this ratification is not approved by the requisite vote of the stockholders, in person or by proxy, and voting on
the matter, the Board will reconsider its selection of Urish as our independent registered public accounting firm.
Abstentions
will be counted for purposes of determining the presence or absence of a quorum but will not be counted as votes cast and therefore
will not be counted for purposes of determining whether Proposal No. 3 has been approved. Since broker non-votes are not entitled
to vote on Proposal No. 3, broker non-votes, if any, will be counted for purposes of determining the presence or absence of a
quorum but will not be counted for purposes of determining whether Proposal No. 3 has been approved.
At
the Annual Meeting a vote will be taken on a proposal to ratify the selection of Urish Popeck & Co., LLC as our independent
registered public accountants for the fiscal year ending December 31, 2024.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE SELECTION OF URISH POPECK & CO., LLC AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2024.
FUTURE
STOCKHOLDER PROPOSALS
Any
stockholder who desires to submit nominations for the election to the Board for the 2025 Annual Meeting of Stockholders (the “2025
Annual Meeting”), or any stockholder who desires to include proposals in the Company’s 2025 Annual Meeting proxy materials
pursuant to Rule 14(a)-8 under the Exchange Act, for business other than nominations for the election to the Board of Directors,
must deliver written notice to the secretary of the Company at the principal executive offices of the Company no later than June
12, 2025, which is 90 calendar days prior to the anniversary of the date of the Annual Meeting, and no earlier than May 13, 2025,
which is 120 calendar days prior to the anniversary of the date of the Annual Meeting, provided that in the event that the date
of the 2025 Annual Meeting is advanced more than 30 days prior to or delayed by more than 60 days after the anniversary of the
Annual Meeting, or if no annual meeting was held in the preceding year, such notice must be received no earlier than 120 calendar
days prior to the date of the 2025 Annual Meeting and no later than the close of business on the later of (i) the 90th
day prior to the 2025 Annual Meeting and (ii) the 10th day following the day on which notice of the date of the Annual
Meeting was mailed or public announcement of the date of such meeting is first made, whichever first occurs.
EXPENSES
AND SOLICITATION
We
will bear the costs of printing and mailing proxies if such proxies are physically mailed to our stockholders. In addition to
soliciting stockholders by mail or through our regular employees, we may request banks, brokers and other custodians, nominees
and fiduciaries to solicit their customers who have shares of our Common Stock registered in the name of a nominee and, if so,
will reimburse such banks, brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket costs. Solicitation
by our officers and employees may also be made of some stockholders following the original solicitation.
OTHER
BUSINESS
Other
Matters Brought Before the Meeting
The
Board knows of no other items that are likely to be brought before the Annual Meeting except those that are set forth in the Notice
of the Annual Meeting. If any other matters properly come before the Annual Meeting, the persons designated on the enclosed proxy
will vote in accordance with their judgment on such matters.
ADDITIONAL
INFORMATION
Stockholders
Entitled to Vote
The
Common Stock is the only class of voting securities outstanding and entitled to vote at the Annual Meeting. As of 5:00 p.m. Eastern
Time on the Record Date, 7,605,636 shares of Common Stock, were outstanding and entitled to vote. Each share is entitled to one
vote on each matter.
How
to Vote
Your
vote is very important no matter how many shares of Common Stock you own. Whether or not you plan to attend the virtual Annual
Meeting live via the Internet at www.virtualshareholdermeeting.com/LIPO2024, we urge
you to vote your shares of Common Stock today.
Instructions
regarding each method of voting are provided in the proxy materials and stockholders can access proxy materials and vote at www.proxyvote.com.
If you desire to submit your vote via internet or telephone, or if you desire to submit questions while connected to the Annual
Meeting on the Internet, follow the instructions at www.proxyvote.com and use the 16-digit control number included in the enclosed
proxy card mailed to you.
If
You Are a Registered Holder of Common Stock
If
you are a registered holder of shares of Common Stock, you may vote such shares either by voting by proxy in advance of the Annual
Meeting or by voting at the virtual Annual Meeting while connected to the virtual Annual Meeting on the internet. By submitting
a proxy (on a proxy card or in the manner provided in the proxy materials), you are legally authorizing another person to vote
your shares on your behalf. If you submit your executed proxy card or submit a proxy in the manner provided in the proxy materials,
unless you direct otherwise, your shares will be voted in accordance with the Board’s recommendations set forth in this
Proxy Statement, and if any other matters are brought before the Annual Meeting (other than the proposals contained in this Proxy
Statement), then the individual(s) listed on the proxy will have the authority to vote your shares on those other matters in accordance
with their discretion and judgment.
In
the event that a quorum is not present at the Annual Meeting, the chairman of the Annual Meeting or the holders of a majority
of the voting power of the shares of Common Stock present at the Annual Meeting or represented by proxy, and cast at the Annual
Meeting, may adjourn the Annual Meeting (without notice other than announcement of adjournment at the Annual Meeting) to another
time or to another time and place.
Whether
or not you plan to attend the virtual Annual Meeting, we urge you to promptly vote over the internet, by mail or by telephone
in the manner provided on the website listed in the proxy materials or by completing and returning a proxy card. If you later
decide to vote while connected to the Annual Meeting on the internet, the vote you cast at the virtual Annual Meeting will automatically
revoke any previously submitted proxy.
Revocability
of Proxies
Any
stockholder may revoke a submitted proxy by (i) filing a later-dated proxy or a written notice of revocation via internet at any
time before the original proxy is exercised or (ii) attending the Annual Meeting via internet and voting.
Please
note, however, that only your last dated proxy will be counted, and any proxy may be revoked at any time prior to its exercise
at the Annual Meeting, as described in this Proxy Statement.
If
your shares of Common Stock are held in the name of a brokerage firm, bank, nominee or other institution, and you have instructed
your brokerage firm, bank, nominee or other institution to vote such shares, you must follow the instructions received from your
brokerage firm, bank, nominee or other institution to change your voting instruction. Please contact your custodian for detailed
instructions on how to revoke your voting instruction and the applicable deadlines.
Information
Regarding the Company
Our
principal executive offices are located at 7800 Susquehanna St., Suite 505, Pittsburgh, PA.
The
Company’s website address, www.lipella.com, is included in this Proxy Statement as a textual reference only, and the information
in the Company’s website is not incorporated by reference into this Proxy Statement.
Notice
Regarding the Availability of Proxy Materials
Voting
materials, which include this Proxy Statement and the enclosed proxy card, will be first mailed to stockholders on or about August
__, 2024.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC permits us to “incorporate by reference” into this Proxy Statement the information that we file with the SEC under
the Exchange Act, which means that we can disclose important information to you by referring you to such information. Information
that is incorporated by reference is considered to be part of this Proxy Statement. Information that we file later with the SEC
will automatically update and supersede the information that is either contained, or incorporated by reference, in this Proxy
Statement, and will be considered to be a part of this Proxy Statement from the date such information is filed. We have filed
with the SEC and incorporate by reference in this Proxy Statement, except as superseded, supplemented or modified by this Proxy
Statement, the documents listed below (excluding those portions of any Current Report on Form 8-K that are not deemed “filed”
pursuant to the General Instructions of Form 8-K):
| ● | our
Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the
SEC on February 27, 2024; |
| ● | our
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, filed with
the SEC on May 9, 2024; |
| ● | our
Current Reports on Form 8-K filed with the SEC on March 15, 2023, April 12, 2023 and
April 19, 2023; and |
| ● | the
description of our Common Stock contained in (i) our Registration Statement on Form 8-A,
filed with the SEC on December 19, 2022, pursuant to Section 12(b) of the Exchange Act
and (ii) Exhibit 4.2—Description of Securities Registered Pursuant to Section 12
of the Securities Exchange Act of 1934, to our Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, filed with the SEC on March 31, 2023. |
We
also incorporate by reference into this Proxy Statement additional documents that we may file with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof but before the Annual Meeting (excluding any information not deemed
“filed” with the SEC). Any statement contained in a previously filed document is deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained in this Proxy Statement or in a subsequently filed
document incorporated by reference herein modifies or supersedes the statement, and any statement contained in this Proxy Statement
is deemed to be modified or superseded for purposes of this Proxy Statement to the extent that a statement contained in a subsequently
filed document incorporated by reference herein modifies or supersedes the statement.
You
may obtain a copy of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2023, including exhibits, and of other documents incorporated
by reference herein, without charge, upon the written or oral request of such documents. Requests should be directed to:
Lipella
Pharmaceuticals Inc.
7800
Susquehanna St., Suite 505
Pittsburgh,
PA 15208
(412)
901-0315
info@lipella.com
Copies
of these filings are also available on our website at www.lipella.com.
Proxies
may be solicited by directors, executive officers, and other employees of the Company in person or by telephone or mail only for
use at the Annual Meeting or any adjournment thereof. The Company has retained Broadridge Financial Solutions to assist with the
solicitation of proxies for a project management fee of
$8,000, plus reimbursement for out-of-pocket expenses. All solicitation costs will be
borne by the Company.
| __________,
2024 |
By Order of the Board
of Directors, |
| |
|
| |
|
| |
Jonathan Kaufman |
| |
President, Chief Executive Officer and Chairman
of the Board |
Appendix
A
Proposed Amendment to the Certificate of Incorporation for the Reverse Stock Split
FORM
OF CERTIFICATE OF AMENDMENT OF
CERTIFICATE
OF INCORPORATION OF
LIPELLA PHARMACEUTICALS INC.
Lipella
Pharmaceuticals Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of
Delaware (the “Corporation”), does hereby certify that:
FIRST:
The name of the Corporation is Lipella Pharmaceuticals Inc.
SECOND:
This Certificate of Amendment (this “Certificate of Amendment”) amends the provisions of the Corporation’s
Second Amended and Restated Certificate of Incorporation, as amended as of the date hereof (the “Certificate of Incorporation”),
last amended by a certificate of amendment to the Certificate of Incorporation filed with the Secretary of State on December 19,
2022.
THIRD:
Article IV(A) of the Certificate of Incorporation is hereby amended by inserting the following paragraphs immediately below the
last paragraph in Article IV(A) of the Certificate of Incorporation as follows:
“(A)
Upon
the filing of this Certificate of Amendment with the Secretary of State of the State of Delaware on ______, 2024 (the “2024
Effective Time”), each ________ outstanding shares of Common Stock outstanding immediately prior to the 2024
Effective Time (the “2024 Old Common Stock”) shall be combined and converted into one (1) share of Common Stock
(the “2024 New Common Stock”) based on a ratio of one share of 2024 New Common Stock for each _____
shares of 2024 Old Common Stock (the “2024 Reverse Split Ratio”). This reverse stock split (the “2024
Reverse Split”) of the outstanding shares of Common Stock shall not affect the total number of shares of capital stock,
including the Common Stock, that the Corporation is authorized to issue, which shall remain as set forth under this Article IV.
The
2024 Reverse Split shall occur without any further action on the part of the Corporation or the holders of shares of 2024 New
Common Stock and whether or not certificates representing such holders’ shares prior to the 2024 Reverse Split are surrendered
for cancellation. No fractional interest in a share of 2024 New Common Stock shall be deliverable upon the 2024 Reverse Split,
all of which shares of 2024 New Common Stock shall be rounded up to the nearest whole number of such shares. Upon the 2024 Effective
Time, all references to “Common Stock” in this Certificate of Incorporation shall be to the 2024 New Common Stock.
The
2024 Reverse Split will be effectuated on a stockholder-by-stockholder (as opposed to certificate-by-certificate) basis, except
that the 2024 Reverse Split will be effectuated on a certificate-by-certificate basis for shares held by registered holders, as
applicable. For shares held in certificated form, certificates dated as of a date prior to the 2024 Effective Time representing
outstanding shares of 2024 Old Common Stock shall, after the 2024 Effective Time, represent a number of shares of 2024 New Common
Stock as is reflected on the face of such certificates for the 2024 Old Common Stock, divided by the 2024 Reverse Split Ratio
and rounded up to the nearest whole number. The Corporation shall not be obligated to issue new certificates evidencing the shares
of 2024 New Common Stock outstanding as a result of the 2024 Reverse Split unless and until the certificates evidencing the shares
held by a holder prior to the 2024 Reverse Split are either delivered to the Corporation or its current transfer agent, or the
holder notifies the Corporation or such transfer agent that such certificates have been lost, stolen or destroyed and executes
an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such
certificates.”
FOURTH:
This amendment was duly adopted in accordance with the provisions of Sections 212 and 242 of the General Corporation Law of the
State of Delaware.
FIFTH:
This Certificate of Amendment shall be effective as of [__:__] [a.m.][p.m.], New York Time on the date written below.
SIXTH:
All other provisions of the Certificate of Incorporation shall remain in full force and effect.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its officer thereunto duly authorized
this day of , 2024.
| |
LIPELLA PHARMACEUTICALS INC. |
| |
|
|
| |
By: |
|
| |
|
Name:
Jonathan Kaufman
Title:
Chief Executive Officer |
| |
 |
|
LIPELLA
PHARMACEUTICALS INC.
7800
SUSQUEHANNA ST., SUITE 505
PITTSBURGH,
PA 15208 |
VOTE
BY INTERNET
Before
The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions
to obtain your records and to create an electronic voting instruction form.
During
The Meeting - Go to www.virtualshareholdermeeting.com/LIPO2024
You
may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by
the arrow available and follow the instructions.
VOTE
BY PHONE - 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
|
|
|
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK
INK AS FOLLOWS: |
|
|
|
|
|
|
V55054-P17104 |
KEEP
THIS PORTION FOR YOUR RECORDS |
|
DETACH AND RETURN
THIS PORTION ONLY |
| THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
LIPELLA
PHARMACEUTICALS INC.
| The Board of Directors recommends
that you vote as follows: “FOR” the election of each of the seven nominees to the Board of Directors; “FOR”
Proposals 2, and 3. |
|
|
| |
|
|
|
| 1. |
Election of Directors of the Company |
|
|
| |
|
|
|
| |
Nominees: |
For |
Withhold |
| |
|
|
|
|
1a. Jonathan Kaufman |
☐ |
☐ |
| |
|
|
|
|
1b. Michael Chancellor |
☐ |
☐ |
| |
|
|
|
|
1c. Lori Birder |
☐ |
☐ |
| |
|
|
|
|
1d. Daniel Cohen |
☐ |
☐ |
| |
|
|
|
|
1e. Byong (Christopher) Kim |
☐ |
☐ |
| |
|
|
|
|
1f. Ryan Pruchnic |
☐ |
☐ |
| |
|
|
|
|
1g. Naoki Yoshimura |
☐ |
☐ |
Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign
in full corporate or partnership name by authorized officer.
| |
|
| |
|
| Signature [PLEASE SIGN WITHIN BOX] |
Date |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| 2. |
The approval of an
amendment to the Company’s second amended and restated certificate of incorporation, as amended, to effect a reverse
stock split of all outstanding shares of the Company’s common stock, par value $0.0001 per share, by a ratio in the
range of one-for-five to one-for-one hundred and fifty, to be determined in the Board of Director’s sole discretion
at any time after approval of such amendment and no later than the one year anniversary of such approval. |
For
☐ |
Against
☐ |
Abstain
☐ |
| |
|
|
|
|
| 3. |
Ratification of the appointment of Urish Popeck & Co., LLC as the Company’s independent registered public accountants for the fiscal year
ending December 31, 2024. |
☐ |
☐ |
☐ |
| |
|
|
|
|
| NOTE:
Such other business as may properly come before the meeting or any adjournment thereof. |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
| |
|
Signature (Joint Owners)
|
Date |
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Stockholders
to be held on September 10, 2024, at 2:00 p.m. ET:
The
Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K are available at:
www.proxyvote.com
V55055-P17104
PROXY
LIPELLA PHARMACEUTICALS INC.
Lipella Pharmaceuticals Inc.
7800 Susquehanna St., Suite 505
Pittsburgh, PA 15208
(412) 894-1853
Your
vote is important
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 2024 ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD LIVE VIA THE INTERNET – PLEASE VISIT
www.virtualshareholdermeeting.com/LIPO2024
The
undersigned hereby appoints Dr. Jonathan Kaufman as the true and lawful attorney, agent and proxy of the undersigned,
with
full power of substitution, to represent and to vote all shares of common stock of Lipella Pharmaceuticals Inc.
held
of record by the undersigned on August 1, 2024, at the 2024 Annual Meeting of Stockholders
to be held on September 10, 2024, at 2:00
p.m. ET to be held live via the internet at
www.virtualshareholdermeeting.com/LIPO2024,
and at any adjournments thereof.
Any
and all proxies heretofore given are hereby revoked.
When
properly executed, this proxy will be voted as designated by the undersigned.
In
his discretion, the proxy is authorized to vote upon such other business that may properly come before the Annual Meeting of Stockholders.
Continued
and to be signed on reverse side
Grafico Azioni Lipella Pharmaceuticals (NASDAQ:LIPO)
Storico
Da Feb 2025 a Mar 2025
Grafico Azioni Lipella Pharmaceuticals (NASDAQ:LIPO)
Storico
Da Mar 2024 a Mar 2025
