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Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held on Friday, September 21, 2018 at 9:00 a.m. Eastern time at the offices of Cooley LLP located at
The Grace Building, 1114 Avenue of Americas, 46th Floor, New York, NY, 10036-7798. The proxy statement and annual report to stockholders are available at http://www.astproxyportal.com/ast/20743.
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| | | | You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder. | |
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| | | | | A-1 | | | |
| | | | | B-1 | | |
| | | | Internet proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies. | |
Proposal Number |
| |
Proposal Description
|
| |
Vote Required for Approval
|
| |
Effect of
Abstentions |
| |
Effect of
Broker Non-Votes |
|
1 | | | Election of Class II Directors | | | Nominees receiving the most “For” votes | | | Withheld votes will have no effect | | |
None
|
|
2 | | | Reverse Stock Split Proposal | | | “For” votes from the holders of a majority of the outstanding voting shares (common stock and Series A-1 Preferred voting together as a single class) | | | Against | | |
Against
|
|
Proposal Number |
| |
Proposal Description
|
| |
Vote Required for Approval
|
| |
Effect of
Abstentions |
| |
Effect of
Broker Non-Votes |
|
3 | | | 2015 Equity Incentive Plan Amendment | | | “For” votes from the holders of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote on the subject matter | | | Against | | |
None
|
|
4 | | | Ratification of KPMG LLP as Independent Registered Public Accounting Firm for fiscal year 2018 | | | “For” votes from the holders of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote on the subject matter | | | Against | | |
None
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NAME
|
| |
AGE(1)
|
| |
Principal Occupation/Position Held With the Company
|
|
| | | | Lawrence A. Kenyon | | |
53
|
| | Director, Class II, Chief Executive Officer, President, Chief Financial Officer, Treasurer and Secretary | |
| | | | Joe Thomas | | |
61
|
| | Director, Class II | |
| | | | Joerg Windisch, Ph.D. | | |
47
|
| | Director, Class II | |
| | | |
NAME
|
| |
AGE(1)
|
| |
Principal Occupation/Position
Held With the Company, Class |
|
| | | | Yezan Haddadin | | |
43
|
| | Director, Class I | |
| | | | Kurt J. Hilzinger | | |
58
|
| | Director, Class I | |
| | | | Pankaj Mohan, Ph.D. | | |
54
|
| | Director, Class III | |
| | | | Faisal G. Sukhtian | | |
33
|
| | Director, Class I | |
| | | | Ralph H. “Randy” Thurman | | |
69
|
| | Executive Chairman, Class III | |
| | | |
Name
|
| |
Audit
|
| |
Compensation
|
| |
Nominating and
Corporate Governance |
| |||||||||
| | | |
Pankaj Mohan, Ph.D.(1)
|
| | | | | | | | | | | | | | | | | | |
| | | |
Todd C. Brady, M.D., Ph.D.(2)
|
| | | | X | | | | | | | | | | | | X | | |
| | | |
Scott Canute(3)
|
| | | | | | | | | | X* | | | | | | | | |
| | | |
Albert D. Dyrness(2)
|
| | | | | | | | | | X | | | | | | X | | |
| | | |
Donald J. Griffith(4)
|
| | | | | | | | | | | | | | | | | | |
| | | |
Kurt J. Hilzinger
|
| | | | X* | | | | | | X | | | | | | | | |
| | | |
Robin Smith Hoke(4)
|
| | | | X | | | | | | | | | | | | X* | | |
| | | |
Faisal G. Sukhtian(5)
|
| | | | X | | | | | | | | | | | | X* | | |
| | | |
Joe Thomas(5)
|
| | | | | | | | | | | | | | | | X | | |
| | | |
Total meetings in fiscal year 2017
|
| | | | 4 | | | | | | 2 | | | | | | 0 | | |
Status
|
| |
Number of
shares of Common Stock Authorized |
| |
Number of
shares of Common Stock Issued and Outstanding |
| |
Number of
shares of Common Stock Reserved for Future Issuance |
| |
Number of
shares of Common Stock Authorized but Unreserved and Unissued |
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Pre-reverse stock split
|
| | | | 200,000,000 | | | | | | 72,198,468 | | | | | | 54,688,979 | | | | | | 73,112,553 | | |
Post-reverse stock split 1-for-2
|
| | | | 200,000,000 | | | | | | 36,099,234 | | | | | | 27,344,489 | | | | | | 136,556,277 | | |
Post-reverse stock split 1-for-6
|
| | | | 200,000,000 | | | | | | 12,033,078 | | | | | | 9,114,829 | | | | | | 178,852,093 | | |
Post-reverse stock split 1-for-10
|
| | | | 200,000,000 | | | | | | 7,219,846 | | | | | | 5,468,897 | | | | | | 187,311,257 | | |
| | |
As of
August 1, 2018 |
| |||
Total shares subject to outstanding stock options
|
| | | | 1,534,454 | | |
Total shares subject to outstanding restricted stock unit awards
|
| | | | 83,821 | | |
Total shares subject to outstanding performance stock unit awards under the 2011 Stock Incentive Plan
|
| | | | 149,326 | | |
Weighted-average exercise price per share of outstanding stock options
|
| | | $ | 0.93 | | |
Weighted-average remaining term of outstanding stock options
|
| | | | 9.86 | | |
Total shares available for grant under the 2015 Plan
|
| | | | 367,377 | | |
Total shares available for grant under other equity plans
|
| | | | 289,855(1) | | |
Represents shares issuable pursuant to our 2016 Employee Stock Purchase Plan | | | | | | | |
| | |
As of
July 24, 2018 (Record Date) |
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Total common stock outstanding
|
| | | | 72,198,468 | | |
Total Series A-1 preferred stock on an as converted basis
|
| | | | 8,879,780 | | |
Closing price of common stock as reported on the Nasdaq Capital Market
|
| | | $ | 0.862 | | |
| | | |
Key Equity Metrics
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| |
2015
|
| |
2016(4)
|
| |
2017
|
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| | | |
Equity Run Rate(1)
|
| | | | 0.00% | | | | | | 4.10% | | | | | | 2.56% | | |
| | | | Overhang(2) | | | | | 7.04% | | | | | | 12.65% | | | | | | 9.70% | | |
| | | | Dilution(3) | | | | | 7.28% | | | | | | 5.88% | | | | | | 4.47% | | |
Name and position
|
| |
Number of
shares |
| |||
Lawrence A. Kenyon, Chief Executive Officer and Chief Financial Officer
|
| | | | 1,700,000(1) | | |
Kenneth M. Bahrt M.D., Chief Medical Officer
|
| | | | — | | |
Stephen J. McAndrew, Ph.D., Senior Vice President, Business Strategy & Development
|
| | | | — | | |
All current executive officers as a group
|
| | | | 1,700,000 | | |
All current directors who are not executive officers as a group
|
| | | | 60,000(2) | | |
All employees, including all current officers who are not executive officers, as a group
|
| | | | — | | |
Name and position
|
| |
Number of
shares |
| |||
Lawrence A. Kenyon, Chief Executive Officer and Chief Financial Officer
|
| | | | 593,478 | | |
Kenneth M. Bahrt M.D., Chief Medical Officer
|
| | | | 78,985 | | |
Stephen J. McAndrew, Ph.D., Senior Vice President, Business Strategy & Development
|
| | | | 117,971 | | |
All current executive officers as a group
|
| | | | 790,434 | | |
All current directors who are not executive officers as a group
|
| | | | 653,043(1) | | |
Each nominee for election as a director: | | | | | | | |
Lawrence A. Kenyon, Chief Executive Officer and Chief Financial Officer
|
| | | | 593,748 | | |
Joe Thomas
|
| | | | 25,000 | | |
Joerg Windisch, Ph.D.
|
| | | | 25,000 | | |
Each associate of any director or executive officer
|
| | | | — | | |
Each other person who received or is to receive 5% of rights under the 2015 Plan
|
| | | | — | | |
All employees, including all current officers who are not executive officers, as a group | | | | | | | |
Plan Category
|
| |
Number of
securities to be issued upon exercise of outstanding options, warrants and rights |
| |
Weighted-
average exercise price of outstanding options, warrants and rights ($) |
| |
Number of
securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (#) |
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| | |
(a)
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| |
(b)
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| |
(c)
|
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Equity compensation plans approved by security holders: | | | | | | | | | | | | | | | | | | | |
2011 Stock Incentive Plan
|
| | | | 175,530 | | | | | | 6.27(1) | | | | | | —(2) | | |
2015 Equity Incentive Plan
|
| | | | 939,879 | | | | | | 18.78(3) | | | | | | 1,214,309(4) | | |
2016 Employee Stock Purchase Plan
|
| | | | — | | | | | | — | | | | | | 289,855(5) | | |
Equity compensation plans not approved by security holders: | | | | | | | | | | | | | | | | | | | |
None
|
| | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 1,115,409 | | | | | | | | | | | | 1,504,164 | | |
|
| | |
Fiscal Year Ended
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
Audit Fees
|
| | | $ | 350,000 | | | | | $ | 350,000 | | |
Audit-related Fees
|
| | | | 27,500 | | | | | | 815,000 | | |
Tax Fees
|
| | | | 31,504 | | | | | | 87,000 | | |
Total Fees
|
| | | $ | 409,004 | | | | | $ | 1,252,000 | | |
| | |
Common Stock
|
| |
Series A-1 Preferred
|
| ||||||||||||||||||||||||
Name of Beneficial Owner
|
| |
Number of
Shares Beneficially Owned |
| |
% of
Class |
| |
Number of
Shares Beneficially Owned |
| |
% of
Class |
| |
% of
Total Voting Power |
| |||||||||||||||
Five Percent Stockholders (other than directors and officers):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
GMS Tenshi Holdings Pte. Limited(1)
|
| | | | 90,469,983 | | | | | | 76.4% | | | | | | 58,735 | | | | | | 100.0% | | | | | | 76.4% | | |
Sabby Management, LLC(2)
|
| | | | 4,794,455 | | | | | | 6.5% | | | | | | — | | | | | | — | | | | | | 5.8% | | |
Named Executive Officers and Directors: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lawrence A. Kenyon, Director, Chief Executive Officer, President, Chief Financial Officer, Treasurer and Corporate Secretary(3)
|
| | | | 45,574 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Kenneth M. Bahrt, Chief Medical Officer
|
| | | | 40,327 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Stephen McAndrew, Ph.D., Senior Vice President, Business Strategy & Development
|
| | | | 50,899 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Randy Thurman, Executive Chairman of the Board
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Yezan Haddadin, Director
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Kurt J. Hilzinger, Director
|
| | | | 35,385 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Pankaj Mohan, Ph.D., Director(4)
|
| | | | 8,097,372 | | | | | | 11.2% | | | | | | — | | | | | | — | | | | | | 10.0% | | |
Faisal G. Sukhtian, Director
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Joe Thomas, Director
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Joerg Windisch, Director
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All executive officers and directors as a group (10 persons)
|
| | | | 8,269,557 | | | | | | 11.5% | | | | | | — | | | | | | — | | | | | | 10.2% | | |
| | | |
Name
|
| |
Age
|
| |
Position(s)
|
|
| | | | Lawrence A. Kenyon | | |
53
|
| | Director, Chief Executive Officer, President, Chief Financial Officer, Treasurer and Corporate Secretary | |
| | | | Kenneth M. Bahrt, M.D. | | |
65
|
| | Chief Medical Officer | |
| | | |
Stephen J. McAndrew, Ph.D.
|
| |
64
|
| |
Senior Vice President, Business Strategy & Development
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Equity Plan
Awards ($)(3) |
| |
All Other
Compensation ($)(4) |
| |
Total
($) |
| ||||||||||||||||||
Pankaj Mohan, Ph.D.(1)
Director, former Chairman, President and former Chief Executive Officer |
| | | | 2017 | | | | | | 490,000 | | | | | | — | | | | | | 555,942 | | | | | | 31,610 | | | | | | 1,077,551 | | |
| | | 2016 | | | | | | 369,926 | | | | | | 990,000 | | | | | | 11,787,997 | | | | | | 26,658 | | | | | | 13,174,581 | | | ||
Lawrence A. Kenyon(2)
Director, Chief Executive Officer, President, Chief Financial Officer, Treasurer and Corporate Secretary |
| | | | 2017 | | | | | | 350,000 | | | | | | 100,000 | | | | | | 128,065 | | | | | | 16,940 | | | | | | 595,005 | | |
| | | 2016 | | | | | | 309,359 | | | | | | — | | | | | | 1,262,992 | | | | | | 17,727 | | | | | | 1,590,078 | | | ||
Kenneth M. Bahrt, M.D.
Chief Medical Officer |
| | | | 2017 | | | | | | 400,000 | | | | | | 100,000 | | | | | | 108,209 | | | | | | 21,469 | | | | | | 629,678 | | |
| | | 2016 | | | | | | 310,202 | | | | | | — | | | | | | 80,040 | | | | | | 22,174 | | | | | | 412,416 | | |
| | | | | | | | |
Stock Awards(1)
|
| |||||||||
| | |
Grant Date
|
| |
Number of
Share or Units of Stock That Have Not Vested (#) |
| |
Market Value of Shares
or Units of Stock That Have Not Vested ($) |
| |||||||||
Pankaj Mohan, Ph.D.
|
| | | | 12/31/2015 | | | | | | 202,899 | | | | | $ | 277,972 | | |
Lawrence A. Kenyon
|
| | | | 12/31/2015 | | | | | | 43,478(2) | | | | | | 59,565 | | |
Lawrence A. Kenyon
|
| | | | 12/21/2016 | | | | | | 50,000(3) | | | | | | 68,500 | | |
Kenneth M. Bahrt M.D.
|
| | | | 6/22/2015 | | | | | | 28,985(4) | | | | | | 39,709 | | |
Kenneth M. Bahrt M.D.
|
| | | | 12/21/2016 | | | | | | 50,000(3) | | | | | | 68,500 | | |
| | | |
Name
|
| |
Fees Earned or
Paid in Cash(1) ($) |
| |
Total
($) |
| ||||||
| | | |
Todd C. Brady, M.D., Ph.D.(3)
|
| | | | 57,596 | | | | | | 57,596 | | |
| | | |
Scott Canute
|
| | | | 50,000 | | | | | | 50,000 | | |
| | | |
Albert Dyrness(3)
|
| | | | 51,500 | | | | | | 51,500 | | |
| | | |
Donald J. Griffith(2)
|
| | | | 33,193 | | | | | | 33,193 | | |
| | | |
Kurt Hilzinger
|
| | | | 62,500 | | | | | | 62,500 | | |
| | | |
Robin Smith Hoke(2)
|
| | | | 44,573 | | | | | | 44,573 | | |
| | | |
Faisal G. Sukhtian(4)
|
| | | | — | | | | | | — | | |
| | | |
Joe Thomas(4)
|
| | | | — | | | | | | — | | |
Board Committee
|
| |
Chairperson
Fee ($) |
| |
Member
Fee ($) |
| ||||||
Audit Committee
|
| | | | 15,000 | | | | | | 7,500 | | |
Compensation Committee
|
| | | | 10,000 | | | | | | 5,000 | | |
Nominating and Corporate Governance Committee
|
| | | | 8,000 | | | | | | 4,000 | | |
Related Party
|
| |
# of Shares of
Series A Redeemable Preferred Stock Converted |
| |
# of Shares of
Common Stock Received Upon Conversion |
| |
# of Shares of
DE Series A Preferred Stock Received Upon Conversion |
| |||||||||
Mr. Canute
|
| | | | 250 shares | | | | | | 72,463 shares | | | | | | 351 shares | | |
Dr. Brady
|
| | | | 100 shares | | | | | | 28,985 shares | | | | | | 141 shares | | |
Dr. Mohan’s immediate family
|
| | | | 150 shares | | | | | | 43,478 shares | | | | | | 212 shares | | |
Mr. Gangloff’s immediate family
|
| | | | 55 shares | | | | | | 15,942 shares | | | | | | 79 shares | | |
Mr. Griffith’s immediate family
|
| | | | 35 shares | | | | | | 10,144 shares | | | | | | 50 shares | | |