CORMEDIX INC.
10-Ks and 10-Qs
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Pursuant to §
240.14a-12
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CorMedix Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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☒
No fee required.
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☐
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
Title of each class of securities to which transaction
applies:
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2)
Aggregate number of securities to which transaction
applies:
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3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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4)
Proposed maximum aggregate value of transaction:
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5)
Total fee paid:
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☐ Fee
paid previously with preliminary materials.
☐ Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1)
Amount Previously Paid:
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2)
Form, Schedule or Registration Statement No.:
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3)
Filing Party:
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4) Date
Filed:
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CORMEDIX INC.
400 Connell Drive, Suite 5000
Berkeley Heights, New Jersey 07922
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 11, 2018
TO THE
STOCKHOLDERS OF
CORMEDIX
INC.
The
annual meeting of stockholders of CorMedix Inc. will be held at the
Embassy Suites by Hilton, 250 Connell Drive, Berkeley Heights, New
Jersey, on December 11, 2018, at 10:00 a.m. Eastern time, for the
following purposes:
1.
To
elect six directors to serve until the 2019 Annual Meeting of
Stockholders and until their successors are duly elected and
qualified;
2.
To approve on a
non-binding advisory basis our executive compensation;
3.
To
ratify the appointment of Friedman LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2018; and
4.
To act
upon such other matters as may properly come before the meeting or
any adjournment thereof.
These
matters are more fully described in the proxy statement
accompanying this notice.
The
Board has fixed the close of business on October 23, 2018 as the
record date for the determination of stockholders entitled to
notice of and to vote at the meeting or any adjournment thereof. A
list of stockholders eligible to vote at the meeting will be
available for review during our regular business hours at our
principal offices in Berkeley Heights, New Jersey for the 10 days
prior to the meeting for review for any purposes related to the
meeting.
You are
cordially invited to attend the meeting in person. However, to
assure your representation at the meeting, you are urged to vote by
proxy by following the instructions contained in the accompanying
proxy statement. You may revoke your proxy in the manner described
in the proxy statement at any time before it has been voted at the
meeting. Any stockholder attending the meeting may vote in person
even if he or she has returned a proxy.
Your vote is important
.
Whether or not you plan to attend the annual
meeting, we hope that you will vote as soon as
possible.
We are
pleased to take advantage of the Securities and Exchange
Commission, or SEC, rules that allow us to furnish proxy materials,
including this notice, and the proxy statement (including an
electronic proxy card for the meeting) for the annual meeting via
the Internet. Taking advantage of these rules allows us to lower
the cost of delivering annual meeting materials to our stockholders
and reduce the environmental impact of printing and mailing these
materials.
Berkeley
Heights, New Jersey
Dated:
November 1, 2018
By
Order of the Board of Directors
Antony
E. Pfaffle, M.D.,
Secretary
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
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Q:
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Who may vote at the meeting?
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A:
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The
Board of Directors has set October 23, 2018 as the record date for
the meeting. If you owned shares of our common stock at the close
of business on October 23, 2018, you may attend and vote at the
meeting. Each stockholder is entitled to one vote for each share of
common stock held on all matters to be voted on. As of October 23,
2018, there were 100,567,206 shares of our common stock outstanding
and entitled to vote at the meeting. Our outstanding Series C-2,
C-3, D, E and F preferred stock are non-voting and therefore have
no voting rights at the Annual Meeting.
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Q:
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What is the difference between holding shares as a stockholder of
record and as a beneficial owner?
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A:
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If your
shares are registered directly in your name with our transfer
agent, VStock Transfer, LLC, you are considered, with respect to
those shares, a “stockholder of record.” If you are a
stockholder of record, we have sent the Notice of Internet
Availability of Proxy Materials to you directly.
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If your
shares are held in a stock brokerage account or by a bank or other
holder of record, you are considered the “beneficial
owner” of shares held in street name. In that case, the
Notice of Internet Availability of Proxy Materials has been
forwarded to you by your broker, bank, or other holder of record
who is considered, with respect to those shares, the stockholder of
record. As the beneficial owner, you have the right to direct your
broker, bank, or other holder of record on how to vote your shares
by using the voting instruction card you receive.
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Q:
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What is the quorum requirement for the meeting?
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A:
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A
majority of our outstanding shares of common stock entitled to vote
as of the record date must be present at the meeting in order for
us to hold the meeting and conduct business. This is called a
quorum. Your shares will be counted as present at the meeting if
you:
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are present and
entitled to vote in person at the meeting;
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properly submitted
a proxy card or voter instruction card in advance of or at the
meeting; or
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do
not provide your broker with instructions on how to vote, but the
broker submits the proxy nonetheless (a broker
non-vote).
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If you
are present in person or by proxy at the meeting, but abstain from
voting on any or all proposals, your shares are still counted as
present and entitled to vote. The proposals listed in this proxy
statement identify the votes needed to approve or ratify the
proposed actions.
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Q:
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What proposals will be voted on at the meeting?
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A:
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The
proposals to be voted on at the meeting are as
follows:
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1.
To
elect the six directors named in the proxy statement to serve until
our next annual meeting or until their successors have been elected
and qualified;
2.
To
approve on a non-binding advisory basis our executive compensation;
and
3.
To
ratify the appointment of Friedman LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2018.
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We will
also consider any other business that properly comes before the
meeting. As of the record date, we are not aware of any other
matters to be submitted for consideration at the meeting. If any
other matters are properly brought before the meeting, the persons
named in the enclosed proxy card or voter instruction card will
vote the shares they represent using their best
judgment.
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Q:
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How may I vote my shares in person at the meeting?
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A:
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If your
shares are registered directly in your name with our transfer
agent, VStock Transfer, LLC, you are considered, with respect to
those shares, the stockholder of record. As the stockholder of
record, you have the right to vote in person at the meeting. You
will need to present a form of personal photo identification in
order to be admitted to the meeting. If your shares are held in a
brokerage account or by another nominee or trustee, you are
considered the beneficial owner of shares held in street name. As
the beneficial owner, you are also invited to attend the meeting.
Because a beneficial owner is not the stockholder of record, you
may not vote these shares in person at the meeting unless you
obtain a “legal proxy” from your broker, nominee, or
trustee that holds your shares, giving you the right to vote the
shares at the meeting.
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Q:
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How can I vote my shares without attending the
meeting?
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A:
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Whether
you hold shares directly as a registered stockholder of record or
beneficially in street name, you may vote without attending the
meeting. If your common stock is held by a broker, bank or other
nominee, they should send you instructions that you must follow in
order to have your shares voted. If you hold shares in your own
name, you may vote by proxy in any one of the following
ways:
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Via the Internet by
accessing the proxy materials on the secure website
https://www.proxyvote.com and following the voting instructions on
that website;
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Via telephone by
calling toll free 1-800-690-6903 in the United States or outside
the United States and following the recorded instructions;
or
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By requesting that
printed copies of the proxy materials be mailed to you pursuant to
the instructions provided in the Notice of Internet Availability of
Proxy Materials and completing, dating, signing and returning the
proxy card that you receive in response to your
request.
The
Internet and telephone voting procedures are designed to
authenticate stockholders’ identities by use of a control
number to allow stockholders to vote their shares and to confirm
that stockholders’ instructions have been properly recorded.
Voting via the Internet or telephone must be completed by 11:59
p.m. Eastern Time on December 10, 2018. Of course, you can always
come to the meeting and vote your shares in person. If you submit
or return a proxy card without giving specific voting instructions,
your shares will be voted as recommended by the Board of
Directors.
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Q:
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How can I change my vote after submitting it?
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A:
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If you
are a stockholder of record, you can revoke your proxy before your
shares are voted at the meeting by:
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Filing with our
Corporate Secretary at 400 Connell Drive, Suite 5000, Berkeley
Heights, New Jersey 07922 a written notice of revocation bearing a
later date than the proxy either before the meeting or at the
meeting;
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Duly executing a
later-dated proxy relating to the same shares and delivering it
either before the meeting or at the meeting and before the taking
of the vote, to our Corporate Secretary at 400 Connell Drive, Suite
5000, Berkeley Heights, New Jersey 07922;
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Attending the
meeting and voting in person (although attendance at the meeting
will not in and of itself constitute a revocation of a proxy);
or
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If
you voted by telephone or via the Internet, voting again by the
same means prior to 11:59 PM Eastern Time on December 10,
2018.
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If you
are a beneficial owner of shares, you may submit new voting
instructions by contacting your bank, broker, or other holder of
record. You may also vote in person at the meeting if you obtain a
legal proxy from them as described in the answer to a previous
question.
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Q:
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Where can I find the voting results of the meeting?
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A:
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We will
announce the voting results at the annual meeting. We will publish
the results in a Form 8-K filed with the SEC within four business
days of the annual meeting.
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iii
CORMEDIX INC.
400 Connell Drive, Suite 5000
Berkeley Heights, New Jersey 07922
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 11, 2018
This
proxy statement has been prepared by the management of CorMedix
Inc. “We”, “our” and the
“Company” each refers to CorMedix Inc.
In
accordance with the rules of the SEC, instead of mailing a printed
copy of our proxy materials to each stockholder of record, we are
furnishing proxy materials, including the notice, this proxy
statement, and a proxy card for the meeting, by providing access to
them on the Internet to save printing costs and benefit the
environment. These materials were first available on the Internet
on or about November 1, 2018. We mailed a Notice of Internet
Availability of Proxy Materials on or about November 1, 2018 to our
stockholders of record and beneficial owners as of October 23,
2018, the record date for the meeting. This proxy statement and the
Notice of Internet Availability of Proxy Materials contain
instructions for accessing and reviewing our proxy materials on the
Internet and for voting by proxy over the Internet. You will need
to obtain your own Internet access if you choose to access the
proxy materials and/or vote over the Internet. If you prefer to
receive printed copies of our proxy materials, the Notice of
Internet Availability of Proxy Materials contains instructions on
how to request the materials by mail. You will not receive printed
copies of the proxy materials unless you request them. If you elect
to receive the materials by mail, you may also vote by proxy on the
proxy card or voter instruction card that you will receive in
response to your request.
GENERAL INFORMATION ABOUT SOLICITATION VOTING AND
ATTENDING
Who Can Vote
You are
entitled to attend the meeting and vote your common stock if you
held shares as of the close of business on October 23, 2018. At the
close of business on October 23, 2018, a total of 100,567,206
shares of common stock were outstanding and entitled to vote. Each
share of common stock has one vote.
Counting Votes
Consistent with
state law and our bylaws, the presence, in person or by proxy, of
at least a majority of the shares entitled to vote at the meeting
will constitute a quorum for purposes of voting on a particular
matter at the meeting. Once a share is represented for any purpose
at the meeting, it is deemed present for quorum purposes for the
remainder of the meeting and any adjournment thereof unless a new
record date is set for the adjournment. Shares held of record by
stockholders or their nominees who do not vote by proxy or attend
the meeting in person will not be considered present or represented
and will not be counted in determining the presence of a quorum.
Signed proxies that withhold authority or reflect abstentions and
“broker non-votes” will be counted for purposes of
determining whether a quorum is present. “Broker
non-votes” are proxies received from brokerage firms or other
nominees holding shares on behalf of their clients who have not
been given specific voting instructions from their clients with
respect to non-routine matters.
Assuming the
presence of a quorum at the meeting:
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The election of
directors will be determined by a plurality of the votes cast for
each director nominee. This means that the six nominees receiving
the highest number of “FOR” votes will be elected as
directors. Withheld votes and broker non-votes, if any, are not
treated as votes cast, and therefore will have no effect on the
proposal to elect directors.
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The advisory vote
on our executive compensation requires the affirmative vote of a
majority of the votes cast on the proposal. Abstentions and broker
non-votes, if any, are not treated as votes cast, and therefore
will have no effect on the proposal to approve our executive
compensation.
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The ratification of
the appointment of our independent registered public accounting
firm requires the affirmative vote of a majority of the votes cast
on the proposal. Abstentions, if any, are not treated as votes
cast, and therefore will have no effect on this
proposal.
With
respect to “routine” matters, such as the ratification
of the selection of our independent registered public accounting
firm, a bank, brokerage firm, or other nominee has the authority
(but is not required) under the rules governing self-regulatory
organizations, or SRO rules, including the NYSE American, on which
our common stock is listed, to vote its clients’ shares if
the clients do not provide instructions. When a bank, brokerage
firm or other nominee votes its clients’ shares on routine
matters without receiving voting instructions, these shares are
counted both for establishing a quorum to conduct business at the
meeting and in determining the number of shares voted FOR, AGAINST
or ABSTAINING with respect to such routine matters.
With
respect to “non-routine” matters, such as the advisory
vote to approve the compensation paid by the Company to its
executive officers, a bank, brokerage firm, or other nominee is not
permitted under the SRO rules to vote its clients’ shares if
the clients do not provide instructions. The bank, brokerage firm,
or other nominee will so note on the voting instruction form, and
this constitutes a “broker non-vote.” Broker non-votes
will be counted for purposes of establishing a quorum. Because the
proposal requires a majority of votes cast for approval, and broker
non-votes are not considered votes cast, a broker non-vote will
have no effect on this proposal.
While
the election of directors is a non-routine matter, directors are
elected by a plurality of the votes cast, which means that
the six nominees receiving the highest
number of affirmative votes will be elected.
As a result,
votes withheld and broker non-votes have no effect on the election
of directors.
In
summary, if you do not vote your proxy, your bank, brokerage firm,
or other nominee may either:
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cast a vote on
routine matters;
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cast a
“broker non-vote” on non-routine matters;
or
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leave your shares
unvoted altogether.
We
strongly encourage you to provide instructions to your bank,
brokerage firm, or other nominee by voting your proxy. This action
ensures that your shares will be voted in accordance with your
wishes at the meeting.
Cost of this Proxy Solicitation
We will
pay the cost of this proxy solicitation. In addition to soliciting
proxies by mail, our directors and employees might solicit proxies
personally and by telephone. None of these individuals will receive
any additional compensation for this. We plan to retain a proxy
solicitor to assist in the solicitation of proxies for a fee. We
will, upon request, reimburse brokers, banks and other nominees for
their expenses in sending proxy materials to their principals and
obtaining their proxies.
5
Attending the Annual Meeting
If you
are a holder of record and plan to attend the annual meeting,
please bring a photo identification to confirm your identity. If
you are a beneficial owner of common stock held by a bank or
broker, i.e., in “street name”, you will need proof of
ownership to be admitted to the meeting. A recent brokerage
statement or letter from a bank or broker are examples of proof of
ownership. If you want to vote in person your common stock held in
street name, you must get a proxy in your name from the registered
holder.
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
Our bylaws provide that the number of directors
constituting the Board shall be not less than five nor more than
nine. The Board may establish the number of directors within this
range. There are six directors presently serving on our Board, and
the number of directors to be elected at the annual meeting is six.
In March 2015, in connection with a backstop financing agreement,
w
e granted Manchester Securities Corp., our largest
stockholder, the right for as long as it or its affiliates hold any
of our common stock or securities convertible into our common stock
the right to appoint up to two members to our Board of Directors
and/or to have up to two observers attend Board meetings in a
non-voting capacity. Manchester has exercised these rights and has
appointed Janet Dillione and Myron Kaplan as members of the Board.
Manchester also appointed Gary Gelbfish as an observer who was
subsequently elected to the Board.
The
Board proposes the six nominees listed below for election to the
Board for a one-year term. The Board has determined that directors
Janet Dillione, Myron Kaplan, Mehmood Khan and Steven Lefkowitz are
independent as defined in Rule 803A(2) of the NYSE American Rules.
The Board has determined that director Khoso Baluch, who is also
our Chief Executive Officer, and Gary Gelbfish are not independent
under that definition. In addition to the specific bars to
independence set forth in that rule, we also consider whether a
director or his or her affiliates have provided any services to,
worked for or received any compensation from us or any of our
subsidiaries in the past three years in particular. Dr. Gelbfish is
not independent due to fees received during 2017 and 2018 in an
aggregate amount in excess of $120,000. None of the nominees is
related by blood, marriage or adoption to any other nominee or any
of our executive officers.
Director Nominees with Terms Expiring in 2018
The
following table sets forth information concerning our director
nominees as of October 23, 2018:
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Name
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Age
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Director Since
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Position(s) with CorMedix
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Khoso
Baluch
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60
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October 2016
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Director and Chief Executive Officer
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Janet
M. Dillione
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59
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August 2015
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Director
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Gary
Gelbfish
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59
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August 2017
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Director
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Myron
Kaplan
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73
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April 2016
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Director
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Mehmood
Khan
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60
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June 2017
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Director
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Steven
Lefkowitz
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62
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June 2017
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Director
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Khoso
Baluch
joined our Board in
October 2016 upon his appointment as our Chief Executive Officer.
Mr. Baluch previously served as Senior Vice President and President
Europe, Middle East & Africa (EMEA) of UCB, SA, or UCB, from
January 2015 to early 2016, Senior Vice President and President of
the European Region of UCB from February 2013 to December 2014, and
Senior Vice President and Chief Marketing Officer of UCB from
January 2010 to February 2013. Prior to joining UCB, Mr. Baluch
worked for Eli Lilly & Co for 24 years, holding international
positions spanning Europe, the Middle East and the United States in
general management, business development, market access and product
leadership. He has served as an independent director of Poxel SA, a
French publicly traded biotech company, since 2013. Mr. Baluch
holds a BSc in Aeronautical Engineering from City University London
and a Masters of Business Administration from Cranfield School of
Management.
Among other qualifications, attributes and
skills, Mr. Baluch’s business expertise and significant
executive management experience in the pharmaceutical industry led
to the conclusion of our Board that he should serve as a director
of our company in light of our business and structure.
6
Janet M. Dillione
has been a director of CorMedix since August 2015. Ms. Dillione has
served as the Chief Executive Officer of Bernoulli (formerly known
as Cardiopulmonary Corp.), a leader in medical device connectivity
for EMR integration, and integrated clinical applications and
workflows for over 20 years, since 2014. Previously, she was at
Nuance Communications, Inc., a leading provider of voice and
language solutions for businesses and consumers around the world,
having joined Nuance in April 2010 as Executive Vice President and
General Manager of the Healthcare Division and serving as an
executive officer from May 2010 until March 2014. From June 2000 to
April 2010, Ms. Dillione held several senior level management
positions at Siemens Medical Solutions, a global leader in medical
imaging, laboratory diagnostics, and healthcare information
technology, including President and CEO of the global healthcare IT
division.
Ms. Dillione received her
B.A. from Brown University in 1981 and completed the Executive
Program at The Wharton School of Business of the University of
Pennsylvania in 1995.
She has over 25 years of experience
leading global teams in the development and delivery of healthcare
technology and services. Among other qualifications, attributes and
skills, Ms. Dillione’s financial expertise and significant
executive management experience with medical device and healthcare
companies led to the conclusion of our Board that she should serve
as a director of our company in light of our business and
structure.
Gary
Gelbfish, M.D.
was
a director of CorMedix from December 2009 to May 2014. Dr. Gelbfish
was appointed as an observer by Manchester in July 2017 and in
August 2017 was appointed to the Board by the Board of Directors.
Dr. Gelbfish has been in private practice as a vascular surgeon
since 1990. Dr. Gelbfish has practiced vascular surgery at Beth
Israel Hospital since 1990, and has practiced vascular surgery at
New York University Downtown Hospital since 2003. Since 1997, Dr.
Gelbfish has served as an Assistant Clinical Professor of Surgery
at Mt. Sinai Hospital. Dr. Gelbfish received a B.S. from Brooklyn
College, holds an M.D. from Columbia University, and completed his
fellowship in vascular surgery at Maimonides Medical Center. Among
other experience, qualifications, attributes and skills, Dr.
Gelbfish’s in-depth knowledge of the practice of medicine and
understanding of the science behind our product candidates led to
the conclusion of our Board that he should serve as a director of
our company in light of our business and structure.
Myron
Kaplan
became a director
of CorMedix in April 2016. He is a founding partner of Kleinberg,
Kaplan, Wolff & Cohen, P.C., a New York City general practice
law firm, where he has practiced corporate and securities law for
more than forty years. In 2012, Mr. Kaplan became a trustee of the
Lehman Brothers Plan Holding Trust. Previously, he served as a
member of the board of directors of SAirGroup Finance (USA) Inc., a
subsidiary of SAirGroup that had publicly issued debt securities,
Trans World Airlines, Inc. and Kitty Hawk, Inc. Among his business
and civic involvements, Mr. Kaplan currently serves on the boards
of directors of a number of private companies and has been active
for many years on the Boards of Trustees and various board
committees of The Children’s Museum of Manhattan and JBI
International (formerly The Jewish Braille Institute of America).
Mr. Kaplan graduated from Columbia College and holds a Juris Doctor
from Harvard Law School. Among other experience, qualifications,
attributes and skills, Mr. Kaplan’s experience in a broad
range of corporate and securities matters and service as a director
of public companies led to the conclusion of our Board that he
should serve as a director of our company in light of our business
and structure.
Mehmood Khan, M.D.
became a director of CorMedix in June 2017. Dr. Khan currently
serves as Vice Chairman (since January 2015) and Chief Scientific
Officer of Global Research and Development (since December 2007)
for PepsiCo, where he leads global R&D and oversees the
company’s 2025 sustainability agenda, which includes plans
for the further transformation of its current food and beverage
portfolio as well as expansion of offerings containing positive
nutrition with a focus on reaching more underserved communities and
consumers with healthier choices. Prior positions at PepsiCo
include Chief Executive Officer, Global Nutrition Group from
January 2011 to September 2013. Previously, Dr. Khan served as Head
of Medical Affairs and then President of Takeda
Pharmaceuticals’ Global Research & Development Center
from January 2002 to December 2007. Earlier in his career Dr. Khan
was a faculty member at the Mayo Clinic and Mayo Medical School in
Rochester, Minnesota, serving as Director of the Diabetes,
Endocrine and Nutritional Trials Unit in the division of
endocrinology. Prior to the Mayo Clinic, Dr. Khan spent nine years
leading programs in diabetes, endocrinology, metabolism, and
nutrition for the Hennepin County Medical Center in Minneapolis.
His practice included extensive work with patients with diabetes
requiring hemodialysis as well as parenteral nutrition. Dr. Khan
also currently serves as a member of the board of directors for
HemoShear
Therapeutics, a biotechnology company focused on discovering novel
biological targets and developing drugs to treat rare juvenile
metabolic disorders.
He earned his medical degree from the
University of Liverpool Medical School, England. Among other
qualifications, attributes and skills, Dr. Khan’s business
expertise and significant executive management experience, as well
as his medical background and pharmaceutical company experience led
to the conclusion of our Board that he should serve as a director
of our company in light of our business and structure.
7
Steven Lefkowitz
was
a director of CorMedix from August 2011 to June 2016. He was
reappointed to the Board in June 2017. He also served as
our acting Chief Financial Officer from August 2013 to July 2014.
Mr. Lefkowitz has been the President and Founder of Wade
Capital Corporation, a financial advisory services company, since
June 1990. Mr. Lefkowitz
has
been
a director of both public and private companies. Mr.
Lefkowitz received his A.B. from Dartmouth College in 1977 and his
M.B.A. from Columbia University in 1985. Among other experience,
qualifications, attributes and skills, Mr. Lefkowitz’s
education, experience and financial expertise led to the conclusion
of our Board that he should serve as a director of our company in
light of our business and structure.
Vote Required
Directors
are elected by a plurality of the votes cast at the annual meeting.
This means that the six nominees receiving the highest number of
affirmative votes will be elected.
Recommendation
The Board recommends that stockholders vote
FOR
the election of the six nominees for
election to the Board for a one-year term.
8
PROPOSAL NO. 2
—
ADVISORY VOTE ON EXECUTIVE
COMPENSATION
As
required under Section 14A of the Exchange Act and the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, or
Dodd-Frank Act, the Board of Directors is submitting a “say
on pay” proposal for stockholder consideration. While the
vote on executive compensation is nonbinding and solely advisory in
nature, the Board and the Compensation Committee value the opinion
of our stockholders and will review and consider the voting
results.
We currently intend to hold
future advisory votes on executive compensation every three years,
and the next say on pay vote is expected to occur at the annual
meeting of our stockholders in 2021.
Our
executive officers are compensated based on performance, and in a
manner consistent with our strategy, competitive practice, sound
corporate governance principles, and our company’s and our
stockholders’ interests. We believe our compensation program
is strongly aligned with the long-term interests of our company and
our stockholders. Compensation of our executive officers is
designed to enable us to attract and retain talented and
experienced senior executives to lead our company successfully in a
competitive environment.
The
compensation of the Named Executive Officers is described on pages
21-28 of this proxy statement.
We are
asking stockholders to vote on the following
resolution:
“
RESOLVED
, that the stockholders of
CorMedix Inc. approve,
on an advisory basis,
the compensation paid to its Named Executive Officers, as disclosed
pursuant to the compensation disclosure rules of the SEC, including
the Compensation Discussion and Analysis, compensation tables and
narrative discussion as disclosed in this proxy
statement.”
As
indicated above, the stockholder vote on this resolution will not
be binding on our company or the Board of Directors, and will not
be construed as overruling or determining any decision by us or by
the Board. The vote will not be construed to create or imply any
change to our fiduciary duties or those of the Board, or to create
or imply any additional fiduciary duties for our company or the
Board.
Vote Required
The
affirmative vote of the holders of a majority of the shares of our
common stock as of the record date present or represented at the
meeting is required to approve the compensation of our Named
Executive Officers, as disclosed in this proxy
statement.
Recommendation
The
Board of Directors unanimously recommends stockholders vote, on an
advisory basis,
FOR
our
executive compensation.
9
PROPOSAL NO. 3 – RATIFICATION OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Pursuant
to its charter, the Audit Committee of our Board has appointed the
firm Friedman LLP, New York, New York, to serve as our independent
registered public accounting firm for the fiscal year ending
December 31, 2018. While the Audit Committee is solely
responsible for the appointment, compensation, retention and
oversight of the independent registered public accounting firm, the
Committee and the Board are requesting that the stockholders ratify
this appointment. If the stockholders ratify this appointment, the
Audit Committee, in its discretion, may appoint a different
independent registered public accounting firm at any time during
the year if it believes that doing so would be in the best
interests of our stockholders. If the stockholders do not ratify
this appointment, the Audit Committee may reconsider, but might not
change, its appointment.
Representatives of Friedman LLP
are expected to be present at the
annual meeting of stockholders with the opportunity to make a
statement if they desire to do so and are expected to be available
to respond to appropriate questions.
Vote Required
Ratification of the appointment of Friedman
LLP
as our independent
registered public accounting firm requires the affirmative vote of
a majority of the votes cast at the meeting.
Recommendation
The Board unanimously recommends that stockholders
vote
FOR
the ratification of the appointment of Friedman
LLP
as our independent
registered public accounting firm for the fiscal year ending
December 31, 2018.
10
CORPORATE GOVERNANCE
Information about the Board of Directors and its
Committees
Board Composition
Our
Board currently consists of six members. Directors elected at this
meeting and each subsequent annual meeting will be elected for
one-year terms or until their successors are duly elected and
qualified.
We
separate the positions of Chairman, currently held by independent
director Myron Kaplan, and that of Chief Executive Officer,
currently held by Khoso Baluch. While the Board believes that
separation of these positions serves our company well, and intends
to maintain this separation where appropriate and practicable, the
Board does not believe that it is appropriate to prohibit one
person from serving as both Chairman and Chief Executive
Officer.
Selection of Nominees for our Board of Directors
To
be considered as a director nominee, an individual must have, among
other attributes: high personal and professional ethics, integrity
and values; commitment to our company and its stockholders; an
inquisitive and objective perspective and mature judgment;
availability to perform all Board and committee responsibilities;
and independence. In addition to these minimum requirements, the
Nominating and Governance Committee will also evaluate whether the
nominee’s skills are complementary to the existing
directors’ skills and the Board’s need for operational,
management, financial, international, industry-specific or other
expertise. We do not have a specific written policy with regard to
the consideration of diversity in identifying director nominees. We
focus on identifying nominees with experience, qualifications,
attributes and skills to work with the other directors to serve the
long-term interests of our stockholders. All those matters being
equal, we do and will consider diversity a positive additional
characteristic in potential nominees.
The
Nominating and Governance Committee invites Board members to submit
nominations for director. In addition to candidates submitted by
Board members, director nominees recommended by stockholders will
be considered. Stockholder recommendations must be made in
accordance with the procedures described in the section titled
“Stockholder Proposals” below and will receive the same
consideration that other nominees receive. All nominees are
evaluated by the Nominating and Governance Committee to determine
whether they meet the minimum qualifications and whether they will
satisfy the Board’s needs for specific expertise at that
time. The Committee recommends to the full Board nominees for
election as directors at our annual meeting of
stockholders.
No
stockholder has nominated anyone for election as a director at this
annual meeting.
Board Committees
Our
Board has established an Audit Committee, Compensation Committee
and Nominating and Governance Committee. Our Audit Committee
currently consists of Mr. Lefkowitz (Chair), Ms. Dillione and Mr.
Kaplan. Our Compensation Committee currently consists of Ms.
Dillione (Chair), Mr. Khan and Mr. Lefkowitz. Our Nominating and
Governance Committee currently consists of Mr. Khan (Chair) and Mr.
Kaplan. The membership of these Committees may be changed after the
annual meeting.
Our
Board has undertaken a review of the independence of our directors
and has determined that (i) all current directors except Khoso
Baluch and Gary Gelbfish are independent within the meaning of
Section 803A(2) of the NYSE American Rules, (ii) all members of our
Audit Committee meet the additional test for independence for audit
committee members imposed by SEC regulation and Section 803B(2) of
the NYSE American Rules, (iii) all of the members of our
Compensation Committee are independent within the meaning of
Section 805(c) of the NYSE American Rules, and (iv) both members of
our Nominating and Governance Committee are independent within the
meaning of Section 804(a) and 803A of the NYSE American
Rules.
11
Each of
the above-referenced committees operates pursuant to a formal
written charter. The charters for each committee, which have been
adopted by our Board, contain a detailed description of the
respective committee’s duties and responsibilities and are
available on our website at
www.cormedix.com
under the “Investor Relations—Corporate
Governance” tab.
Our
Board has also established an ad hoc Strategic Finance Committee
that will serve for a fixed term that began on October 1, 2018 and
will end on June 30, 2019. The members of the Strategic Finance
Committee, both of whom are independent within the meaning of
803A(2) of the NYSE American Rules, are Steve Lefkowitz and Myron
Kaplan, each serving as Co-Chair.
Audit Committee
The
Audit Committee monitors our corporate financial statements and
reporting and our external audits, including, among other things,
our internal controls and audit functions, the results and scope of
the annual audit and other services provided by our independent
registered public accounting firm and our compliance with legal
matters that have a significant impact on our financial statements.
The Audit Committee also consults with our management and our
independent registered public accounting firm prior to the
presentation of financial statements to stockholders and, as
appropriate, initiates inquiries into aspects of our financial
affairs. The Audit Committee is responsible for establishing
procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls or auditing
matters, and for the confidential, anonymous submission by our
employees of concerns regarding questionable accounting or auditing
matters. In addition, the Audit Committee is directly responsible
for the appointment, retention, compensation and oversight of the
work of our independent registered public accounting firm,
including approving services and fee arrangements. All related
party transactions will be approved by the Audit Committee before
we enter into them.
Both
our independent registered public accounting firm and internal
financial personnel regularly meet with, and have unrestricted
access to, the Audit Committee.
The
Board has determined that each of Mr. Lefkowitz and Ms. Dillione
qualifies as an “audit committee financial expert” as
that term is defined in the rules and regulations of the SEC. The
designation of each of Mr. Lefkowitz and Ms. Dillione as an
“audit committee financial expert” does not impose on
them any duties, obligations or liability that are greater than
those that are generally imposed on them as a member of the Audit
Committee and the Board, and their designation as an “audit
committee financial expert” pursuant to this SEC requirement
does not affect the duties, obligations or liability of any other
member of the Audit Committee or the Board.
Compensation Committee
The
Compensation Committee reviews and approves our compensation
policies and all forms of compensation to be provided to our
executive officers and directors, including, among other things,
annual salaries, bonuses, and other incentive compensation
arrangements. In addition, the Compensation Committee administers
our stock option and employee stock purchase plans, including
granting stock options to our executive officers and directors. The
Compensation Committee also reviews and approves employment
agreements with executive officers and other compensation policies
and matters.
Since
2016, we have periodically engaged Frederick W. Cook & Co., an
independent compensation consultant, for input on the compensation
of our Named Executive Officers and directors. The Compensation
Committee assessed the independence of Frederick W. Cook & Co.,
considering the factors required by the NYSE American and concluded
that no conflict of interest exists that would prevent Frederick W.
Cook & Co. from independently representing our company. In the
future, we, or the Compensation Committee, may engage or seek the
advice of Frederick W. Cook & Co., or another compensation
consultant.
Each
member of the Compensation Committee is a non-employee director, as
defined pursuant to Rule 16b-3 promulgated under the Exchange Act,
and an outside director, as defined pursuant to Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Internal
Revenue Code”).
12
Nominating and Governance Committee
The
Nominating and Governance Committee identifies, evaluates and
recommends nominees to the Board and committees of the Board,
conducts searches for appropriate directors and evaluates the
performance of the Board and of individual directors. The
Nominating and Governance Committee also is responsible for
reviewing developments in corporate governance practices,
evaluating the adequacy of our corporate governance practices and
reporting and making recommendations to the Board concerning
corporate governance matters.
Information Regarding Meetings of the Board and
Committees
The
business of our company is under the general oversight of our Board
as provided by the laws of Delaware and our bylaws. During the
fiscal year ended December 31, 2017, the Board held 28 meetings and
also conducted business by written consent, the Audit Committee
held five meetings and also conducted business by written consent,
the Compensation Committee held three meetings and also conducted
business by written consent, and the Nominating and Governance
Committee held three meetings. Each director nominee attended at
least 75% of the Board meetings and the meetings of the committee
on which he or she served since being appointed to the Board and
respective committees. We do not have a formal written policy with
respect to Board members’ attendance at our annual meetings
of stockholders, but we encourage them to do so. Directors Janet
Dillione and Khoso Baluch attended the 2017 annual meeting in
person, and then-Directors Michael George and Taunia Markvicka also
attended in person.
Risk Oversight
Our
Board is responsible for our company’s risk oversight and has
delegated that role to the Audit Committee. In fulfilling that
role, the Audit Committee focuses on our general risk-management
strategy, the most significant risks facing our company, and
ensures that risk-mitigation strategies are implemented by
management. The Compensation Committee oversees risks related to
our compensation and benefit plans and policies to ensure sound pay
practices that do not cause risks to arise that are reasonably
likely to have a material adverse effect on our Company. The
Nominating and Governance Committee seeks to minimize risks related
to governance structure by implementing sound corporate governance
principles and practices. Each of the committees regularly reports
to the full Board as appropriate on its efforts at risk oversight,
and will report any matter that rises to the level of a material or
enterprise-level risk.
Stockholder Proposals
The
Bylaws establish procedures for stockholder nominations for
elections of directors and bringing business before any annual
meeting or special meeting of stockholders. A stockholder entitled
to vote in the election of directors may nominate one or more
persons for election as directors at a meeting only if written
notice of such stockholder’s intent to make such nomination
or nominations has been delivered to our Corporate Secretary at our
principal executive offices not less than 90 days nor more than 120
days prior to the first anniversary of the prior year’s
annual meeting. In the event that the date of the annual meeting is
more than 30 days before or more than 60 days after the anniversary
date of the prior year’s annual meeting, the stockholder
notice must be given not more than 120 days nor less than the later
of 90 days prior to the date of the annual meeting or, if it is
later, the 10
th
day following the
date on which the date of the annual meeting is first publicly
announced or disclosed by us.
A
stockholder’s notice must set forth: (a) as to each person
whom the stockholder proposes to nominate for election or
reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, or the Exchange Act,
and the rules and regulations thereunder (including such
person’s written consent to being named in the proxy
statement as a nominee and to serving as a director if elected);
(b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to
be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business
of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made, (i) the name and address of such
stockholder, as they appear on our books, and of such beneficial
owner, and (ii) the class and number of shares of our company that
are owned beneficially and of record by such stockholder and such
beneficial owner; and (d) any additional information reasonably
requested by the Board.
13
Notwithstanding
anything in the previous paragraph to the contrary, in the event
that the number of directors to be elected to the Board is
increased and there is no public announcement by us naming all of
the nominees for director or specifying the size of the increased
Board at least 70 days prior to the first anniversary of the
preceding year’s annual meeting, a stockholder’s notice
required by the Bylaws will also be considered timely, but only
with respect to nominees for any new positions created by such
increase, if it is delivered to our Corporate Secretary at our
principal executive offices not later than the close of business on
the 10
th
day following the day on which such public announcement is first
made by us.
The
chairman of the meeting has the power and duty to determine whether
a nomination or any business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance
with the procedures set forth in the Bylaws and, if any proposed
nomination or business is not in compliance with the Bylaws, to
declare that such defective proposal or nomination will be
disregarded.
Stockholder Communications with the Board
Stockholders who
wish to do so may communicate directly with the Board or specified
individual directors by writing to:
Board
of Directors (or name of individual director)
c/o
Secretary
CorMedix
Inc.
400
Connell Drive, Suite 5000
Berkeley Heights,
New Jersey 07922
We will
forward all communications from stockholders to the full Board, to
non-management directors, to an individual director or to the
chairperson of the Board committee that is most closely related to
the subject matter of the communication, except for the following
types of communications: (i) communications that advocate that we
engage in illegal activity; (ii) communications that, under
community standards, contain offensive or abusive content; (iii)
communications that have no relevance to our business or
operations; and (iv) mass mailings, solicitations and
advertisements. The Corporate Secretary will determine when a
communication is not to be forwarded. Our acceptance and forwarding
of communications to directors does not imply that directors owe or
assume any fiduciary duties to persons submitting the
communications.
Stock Ownership Requirements
We
adopted stock ownership guidelines for our non-employee directors
in October 2014 with the objective of more closely aligning the
interests of our non-employee directors with those of our
stockholders. The stock ownership guidelines require each
non-employee director to acquire $100,000 worth of our common stock
within five years of October 20, 2014 for then current directors
and within five years of joining the Board for directors joining
the Board after that date. This requirement may be met with the
purchase of shares under the Deferred Compensation Plan for
Directors, restricted stock units and the exercise of stock
options.
Executive Officers
The
following table sets forth information concerning our current
executive officers as of October 23, 2018:
|
Name
|
|
Age
|
|
|
Position(s) with CorMedix
|
|
Khoso
Baluch
|
|
60
|
|
|
Chief Executive Officer
|
|
Robert
Cook
|
|
63
|
|
|
Chief Financial Officer
|
|
John
Armstrong
|
|
74
|
|
|
Executive Vice President for Technical Operations
|
|
Elizabeth
Masson
|
|
39
|
|
|
Executive Vice President and Head of Clinical
Operations
|
See the
biography for Khoso Baluch under “Proposal No. 1 –
Election of Directors.”
14
Robert Cook
most
recently served as Chief Financial Officer of Bioblast Pharma Ltd.
from January 2016 to July 2016. His prior pharma experience
includes: Executive Vice President and Chief Financial Officer at
Strata Skin Sciences, Inc. from April 2014 to January 2016; Senior
Vice President and Chief Financial Officer at Immune
Pharmaceuticals, Inc. from August 2013 to March 2014, and its
predecessor EpiCept Corporation from April 2004 to August 2013,
including one year as Interim President and CEO of EpiCept in which
he completed the reverse merger of EpiCept into Immune. Previously
he served as CFO of publicly-held Pharmos Corporation. Mr. Cook
began his career in financial services at Chase Manhattan and he
also held a position as a Vice President in the Healthcare Group at
General Electric Capital Commercial Finance. Mr. Cook holds a B.S.
in Finance,
magna cum
laude
, from The American University, in Washington,
DC.
John Armstrong
became our
Executive Vice President
for Technical Operations
in March 2017. Prior to that, he
was employed by us as a consultant beginning in November 2014,
performing the same services that he now performs as our
Executive Vice President for Technical
Operations
.
Jack has over 45
years’ experience in the pharmaceutical industry with broad
senior level cross functional experience and has held a number of
General Management positions. Most recently, from August 2010 to
January 2013, he was President, Operations for Correvio, a private
pharmaceutical company supplying product to over 50 countries, and
prior positions include President/CEO of Genaera Corporation, Sr.
Vice President of Urocor Corporation, CEO of Mills Biopharma,
President of Oread CMO), President of Endo Laboratories (subsidiary
of DuPont Merck), President of World-wide Manufacturing for DuPont
Merck Pharmaceuticals, Vice President Operations for Marion/ Marion
Merrill Dow, and held varied roles in Manufacturing, QA, Led
Integrated business systems development for three companies as well
as having expertise in business development. Mr. Armstrong holds an
executive M.B.A. from Century University. He is also a CPIM
(Certified in Production and Inventory
Management).
Elizabeth Masson
.
Ms. Masson was hired as our Executive Vice President and Head of
Clinical Operations in March 2018. Prior to her employment, Ms.
Masson had been providing us clinical operations expertise as a
consultant since late November 2017. Before she began her
consulting career, she held several progressive management roles in
clinical operations, most recently at Gemphire Therapeutics, as
Vice President, Clinical Operations. Ms. Masson received her B.A.
in Leadership and Organizational Management from Bay Path
College.
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table shows the number of shares of our common stock
beneficially owned as of October 23, 2018 by:
●
each person known
by us to own beneficially more than 5% of the outstanding shares of
our common stock;
●
each
director;
●
each of our
executive officers named in the Summary Compensation Table below
(the “Named Executive Officers”) and our current
executive officers; and
●
all of our current
directors and executive officers as a group.
This
table is based upon the information supplied by our Named Executive
Officers, directors and principal stockholders and from Schedules
13D and 13G filed with the SEC. Except as indicated in footnotes to
this table, the persons named in this table have sole voting and
investment power with respect to all shares of common stock shown,
and their address is c/o CorMedix Inc., 400 Connell Drive, Suite
5000, Berkeley Heights, New Jersey 07922. As of October 23, 2018,
we had 100,567,206 shares of common stock outstanding. Shares of
Company common stock subject to options and warrants that are
currently vested or exercisable or that will become vested or
exercisable within 60 days after October 23, 2018, as well as
restricted stock units that vest within 60 days after October 23,
2018, are deemed to be beneficially owned by the person holding
such options for the purpose of computing the percentage of
ownership of such person but are not treated as outstanding for the
purpose of computing the percentage of any other
person.
|
Name
and Address of Beneficial Owner
|
Common
Stock
Beneficially
Owned
|
|
|
5% or Greater Stockholders
|
Shares
|
%
|
|
Elliott Associates,
L.P. (1)
|
10,699,249
|
9.99
%
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
Khoso Baluch
(2)
|
850,373
|
*
|
|
Robert Cook
(3)
|
148,333
|
*
|
|
John Armstrong
(4)
|
270,299
|
*
|
|
Elizabeth
Masson(5)
|
40,000
|
*
|
|
Janet M. Dillione
(6)
|
332,907
|
*
|
|
Gary Gelbfish
(7)
|
3,483,869
|
3.44
%
|
|
Myron Kaplan
(8)
|
437,330
|
*
|
|
Mehmood Khan
(9)
|
541,546
|
*
|
|
Steven Lefkowitz
(10)
|
452,300
|
*
|
|
All executive officers and directors as a
group (9 persons)
(11)
|
6,556,867
|
6.37
%
|
|
|
|
|
|
*
Less than 1%
|
||
16
(1)
Due to
the Ownership Limitation (as defined below), Elliott Associates,
L.P. (“Elliott Associates”) may be deemed the
beneficial owner of 10,699,249 shares of our common stock through
securities held by it and by Manchester Securities Corp., a
wholly-owned subsidiary of Elliott Associates
(“Manchester”), and Elliott International, L.P.
(“Elliott International”), the investment advisor of
which is an affiliate of the investment advisor of Elliott
Associates. Elliott Associates beneficially holds: (i) 2,833,470
shares of our common stock held by Elliott International, (ii)
1,333,398 shares of our common stock held by Elliott Associates,
(iii) May 2013 warrants held by Manchester exercisable for 500,000
shares of our common stock, (iv) 52,500 shares of our Series C-2
non-voting convertible preferred stock held by Elliott Associates
convertible into 525,000 shares of our common stock, (v) October
2013 warrants held by Elliott Associates exercisable for 262,500
shares of our common stock, (vi) 97,500 shares of our Series C-2
non-voting convertible preferred stock held by Elliott
International convertible into 1,500,000 shares of our common
stock, (vii) October 2013 warrants held by Elliott International
exercisable for 487,500 shares of our common stock, (viii) 73,962
shares of our Series D non-voting convertible preferred stock held
by Manchester convertible into 1,479,240 shares of our common
stock, (ix) March 2015 Warrants held by Manchester convertible into
200,000 shares of our common stock, (x) May 2017 Series B warrants
held by Elliott International convertible into 1,360,001 shares of
our common stock, (xi) May 2017 Series B warrants held by Elliott
Associates convertible into 640,000 shares of our common stock,
(xii) 89,623 shares of our Series E non-voting convertible
preferred stock held by Manchester convertible into 1,959,759
shares of our common stock, (xiii) 1,360 shares of our Series F
non-voting convertible preferred stock held by Elliott
International convertible into 8,395,062 shares of our common stock
(subject to adjustment), (xiv) 640 shares of our Series F
non-voting convertible preferred stock held by Elliott Associates
convertible into 3,950,617 shares of our common stock (subject to
adjustment), (xv) November 2017 warrants exercisable for 384,103
shares of our common stock held by Elliott International, and (xvi)
November 2017 warrants exercisable for 180,755 shares of our common
stock held by Elliott Associates (the May 2013 warrants, the
October 2013 warrants, the March 2015 Warrants, the May 2017 Series
B warrants, the November 2017 warrants and all shares of preferred
stock shall collectively be referred to herein as the
“Convertible Securities”). However, in accordance with
Rule 13d-4 under the Exchange Act, the number of shares of our
common stock into which the Convertible Securities are convertible
or exercisable, as applicable, are limited pursuant to the terms of
the Convertible Securities to that number of shares of our common
stock which would result in Elliott Associates having aggregate
beneficial ownership of, with respect to the May 2013 warrants, the
October 2013 warrants, the March 2015 Warrants, the May 2017 Series
B warrants, the November 2017 warrants, the Series C-2 preferred
stock, the Series D preferred stock, the Series E preferred stock
and the Series F preferred stock, 9.99% of the total issued and
outstanding shares of our common stock (the "Ownership
Limitation"). Elliott Associates disclaims beneficial ownership of
any and all shares of our common stock issuable upon any conversion
or exercise of the Convertible Securities if such conversion or
exercise would cause Elliott Associates’ aggregate beneficial
ownership to exceed or remain above the applicable Ownership
Limitation (as is currently the case). Therefore, Elliott
Associates disclaims beneficial ownership of any shares of our
common stock, issuable upon any conversion or exercise of the May
2013 warrants, the October 2013 warrants, the March 2015 Warrants,
the May 2017 Series B warrants, the November 2017 warrants, the
Series C-2 preferred stock, the Series D preferred stock, the
Series E preferred stock and the Series F preferred stock, which
conversion of exercise would be prohibited by the Ownership
Limitation. The business address of Elliott Associates is 40 West
57th Street, 30th Floor, New York, New York 10019. Based solely on
information contained in a Schedule 13D filed with the SEC on
November 13, 2017 by Elliott Associates and other information known
to us.
(2)
Consists
of (i) 225,373 shares of our common stock and (ii) 625,000 shares
of our common stock issuable upon exercise of stock
options.
(3)
Consists
of (i) 102,083 shares of our common stock and (ii) 46,250 shares of
our common stock issuable upon exercise of stock
options.
17
(4)
Consists
of (i) 38,861 shares of our common stock and (ii) 231,438 shares of
our common stock issuable upon exercise of stock
options.
(5)
Consists
of 40,000 shares of our common stock issuable upon exercise of
stock options.
(6)
Consists
of (i) 115,575 shares of our common stock, (ii) 214,999 shares of
our common stock issuable upon exercise of stock options, and (iii)
2,333 shares of our common stock upon issuance of restricted stock
units. Does not include an aggregate of 136,255 shares of our
common stock that were deferred as director fee compensation and
that are not issuable until after the individual’s cessation
of service with our Board.
(7)
Consists
of (i) 2,638,204 shares of our common stock, (ii) 14,000 shares of
our common stock held indirectly, (iii) 79,999 shares of our common
stock issuable upon the exercise of stock options, (iv) 1,666
shares of our common stock upon issuance of restricted stock units,
(v) 500,000 shares of common stock upon conversion of Series C-3
non-voting preferred stock, and (vi) 250,000 shares of common stock
issuable upon exercise of warrants.
(8)
Consists
of (i) 306,999 shares of our common stock, (ii) 119,999 shares of
our common stock issuable upon exercise of stock options, and (iii)
10,332 shares of our common stock upon issuance of restricted stock
units.
(9)
Consists
of 459,374 shares of our common stock, (ii) 79,999 shares of our
common stock issuable upon exercise of stock options, and (iii)
2,083 shares of our common stock upon issuance of restricted stock
units.
(10)
Consists
of 330,469 shares of our common stock, (ii) 79,999 shares of our
common stock issuable upon exercise of stock options, (iii) 4,332
shares of our common stock upon issuance of restricted stock units.
(iv) 22,500 shares of our common stock issuable upon exercise of
warrants, and (v) 15,000 shares of our common stock issuable upon
exercise of warrants through Wade Capital Corporation Money
Purchase Plan, an entity for which Mr. Lefkowitz has voting and
investment control.
(11)
Consists
of the following held by our directors and executive officers (i)
4,230,938 shares of our common stock, (ii) 1,517,683 shares of our
common stock issuable upon exercise of stock options, (iii) 287,500
shares of our common stock upon exercise of warrants, (iv) 500,000
shares of our warrants upon conversion of Series C-3 non-voting
preferred stock, and (v) 20,746 shares of our common stock upon
issuance of restricted stock units, as referenced in footnotes 2
through 10.
18
DIRECTOR COMPENSATION
Director Compensation in Fiscal 2017
The
following table shows the compensation earned by each non-employee
director of our company for the year ended December 31,
2017.
|
Name
|
|
Fees Earned
($)
|
|
|
Option
Awards
(1)
(2)
($)
|
|
|
Restricted Units Awards
(1) (3)
($)
|
|
|
Total
($)
|
|
||||
|
Janet M. Dillione
|
|
|
30,000
(4)
|
|
|
|
68,760
|
|
|
|
34,400
|
|
|
|
133,160
|
|
|
Gary Gelbfish
(5)
|
|
|
63,338
(5)
|
|
|
|
20,775
|
|
|
|
-
|
|
|
|
84,113
|
|
|
Michael W. George
(6)
|
|
|
14,670
(4)
|
|
|
|
68,760
|
|
|
|
27,400
|
|
|
|
110,830
|
|
|
Myron Kaplan
|
|
|
27,052
|
|
|
|
68,760
|
|
|
|
25,400
|
|
|
|
121,212
|
|
|
Mehmood Khan
|
|
|
14,895
|
|
|
|
25,500
|
|
|
|
-
|
|
|
|
40,395
|
|
|
Steven Lefkowitz
(7)
|
|
|
14,895
|
|
|
|
25,500
|
|
|
|
-
|
|
|
|
40,395
|
|
|
Taunia Markvicka
(8)
|
|
|
14,670
|
|
|
|
68,760
|
|
|
|
30,400
|
|
|
|
113,830
|
|
|
Cora Tellez
(9)
|
|
|
13,269
(4)
|
|
|
|
68,760
|
|
|
|
46,400
|
|
|
|
128,429
|
|
(1)
The
amounts included in this column are the dollar amounts representing
the full grant date fair value of each stock option award
calculated in accordance with FASB ASC Topic 718 and do not
represent the actual value that may be recognized by the directors
upon option exercise. For information on the valuation assumptions
used in calculating this amount, see Note 7 to our audited
financial statements included in our Annual Report on Form 10-K
filed on March 2018.
(2)
As of December 31,
2017, the number of shares underlying options held by each
non-employee director was as follows: 185,000 shares for Ms.
Dillione; 75,000 shares for Dr. Gelbfish; 0 shares for Mr. George;
90,000 shares for Mr. Kaplan; 75,000 shares for Dr. Khan; 75,000
shares for Mr. Lefkowitz; 0 shares for Ms. Markvicka; and 0 shares
for Ms. Tellez.
(3)
As
of December 31, 2017, the number of restricted stock units held by
each non-employee director was as follows: 15,357 shares for Ms.
Dillione; 15,000 shares for Mr. Kaplan; and 0 shares each for Dr.
Gelbfish, Mr. George, Dr. Khan, Mr. Lefkowitz. Ms. Markvicka and
Ms. Tellez.
(4)
Includes
fees of $30,000 for Ms. Dillione, $14,670 for Mr. George and
$13,269 for Ms. Tellez that were deferred. See “Directors
Compensation Plan” below for a description of the deferral
plan pursuant to which the deferrals were made.
(5)
Dr.
Gelbfish was appointed as an observer to our Board and subsequently
elected to our Board by the board of directors. Fees earned for
2017 include $10,258 as a director and $53,080 as a
consultant.
(6)
Mr.
George ceased to serve as a director in June 2017 and the stock
options and restricted stock units issued to him in 2017 were
forfeited in June 2017.
(7)
Mr.
Lefkowitz ceased to serve as a director in June 2016 and re-joined
our board in June 2017.
(8)
Ms.
Markvicka ceased to serve as a director in June 2017 and the stock
options and restricted stock units issued to her in 2017 were
forfeited in June 2017.
(9)
Ms.
Tellez ceased to serve as a director in June 2016 and the stock
options and restricted stock units granted to her in 2017 were
forfeited in June 2017.
19
Director Compensation Plan
Prior
to February 2017, we had the
following cash and equity compensation plan for non-employee
directors. Each director received an annual cash fee of $25,000,
the Board Chair received an additional $5,000 and committee Chairs
received an additional $5,000. Upon a director’s first
election to the Board, he or she was granted an option to purchase
50,000 shares of our common stock that vest one third each on the
date of grant and the first and second anniversary of the date of
grant, subject to continued service on the Board through the
vesting date. After election to the Board, in the next calendar
year after his or her election and annually thereafter, each
director was granted an option to purchase 75,000 shares of our
common stock for his or her service on the Board with an additional
25,000 options for the Board chair, 20,000 options for the Audit
Committee chair, and 15,000 options for other Committee chairs,
which options vested on the first anniversary of the date of grant,
subject to continued service on the Board.
In late
2016, with the assistance of Frederick W. Cook & Co., the
Compensation Committee reviewed a peer group of 14 public
companies, which group was used by Frederick W. Cook & Co. to
conduct a compensation study for purposes of establishing director
compensation. The composition of the peer group was based on the
following criteria: (i) companies operating in a similar industry
sector, (ii) publicly traded companies, (iii) companies of similar
size, and (iv) companies of similar business operation and stage of
research and development. The peer group companies considered by
the Compensation Committee are set forth under “Executive
Compensation” below. The Compensation Committee also used
this data in various combinations in an effort to establish
director compensation that reflects our particular facts and
circumstances.
Based
on the information presented by Frederick W. Cook & Co., in
February 2017, we adopted the following cash and equity
compensation plan for non-employee directors. Each director
receives an annual cash fee of $25,000, the Board Chair and
committee Chairs each receives an additional $5,000. Upon a
director’s first election to the Board, he or she will be
granted an option to purchase 75,000 shares of our common stock
that vest one third each on the date of grant and the first and
second anniversary of the date of grant, subject to continued
service on the Board through the vesting date. After election to
the Board, in the next calendar year after his or her election and
annually thereafter, each director will be granted (i) an option to
purchase 40,000 shares of our common stock that vest one year after
the date of grant, subject to continued service on the Board
through the vesting date, and (ii) restricted stock units in
the amount of the lesser of 10,000 units or $25,000 divided by our
stock price on the date of grant, with the Board chair receiving an
additional number of restricted stock units in the amount of the
lesser of 12,000 units or $24,000 divided by our stock price on the
date of grant, the Audit Committee chair receiving an additional
number of restricted stock units in the amount of the lesser of
6,000 units or $12,000 divided by our stock price on the date of
grant, the Compensation Committee chair receiving an additional
number of restricted stock units in the amount of the lesser of
4,000 units or $8,000 divided by our stock price on the date of
grant, and the Nomination and Governance Committee chair receiving
an additional number of restricted stock units in the amount of the
lesser of 2,500 units or $5,000 divided by our stock price on the
date of grant. Restricted stock units vest one year after the grant
date, subject to continued service on the Board through the vesting
date.
The
Strategic Finance Committee members each received restricted stock
units for 10,000 shares of common stock on October 1, 2018, the day
that the Strategic Finance Committee was organized.
The
exercise price per share of each stock option granted to our
non-employee directors is equal to the fair market value of our
common stock as determined in good faith by our Board on the date
of the grant.
In July
2014, we adopted a Deferred Compensation Plan for Directors,
pursuant to which our non-employee directors may defer all of their
cash director fees and restricted stock units. Any cash fees due a
participating director will be converted into a number of shares of
our common stock by dividing the dollar amount of fees payable by
the closing price of our common stock on the date such fees would
be payable, and the director’s unfunded account would be
credited with the shares. The shares that accumulate in a
director’s account will be paid to the director on the tenth
business day in January following the year in which the
director’s service terminates for whatever reason, other than
death, in which case the account will be paid within 30 days of the
date of death to the designated beneficiaries, if any. If there are
no designated beneficiaries, the account will be paid out the same
as with any other termination of service. In the event of a change
in control of our company, the director would receive cash in an
amount equal to the number of shares in the account multiplied by
the fair market value of our common stock on the change in control
date, and the payment would be accelerated to five business days
after the effective date of the change in control.
20
EXECUTIVE COMPENSATION
Components of Compensation
The key
components
of our executive compensation package are cash
compensation (salary and annual bonuses), long-term equity
incentive awards and change in control and other severance
agreements. These components are administered with the goal of
providing total compensation that recognizes meaningful differences
in individual performance, is competitive, varies the opportunity
based on individual and corporate performance, and is valued by our
Named Executive Officers.
Base Salary
It is the
Compensation
Committee’s objective to set a competitive
rate of annual base salary for each Named Executive Officer. The
Compensation Committee believes competitive base salaries are
necessary to attract and retain top quality executives, since it is
common practice for public companies to provide their named
executive officers with a guaranteed annual component of
compensation that is not subject to performance risk. The
Compensation Committee, on its own or with outside consultants, may
establish salary ranges for the Named Executive Officers, with
minimum to maximum opportunities that cover the normal range of
market variability. The actual base salary for each Named Executive
Officer is then derived from those salary ranges based on his
responsibility, tenure and past performance and market
comparability. Annual base salaries for the Named Executive
Officers are reviewed and approved by the Compensation Committee in
the first quarter following the end of the previous performance
year. Changes in base salary are based on the scope of an
individual’s current job responsibilities, individual
performance in the previous performance year, target pay position
relative to the peer group, and our salary budget guidelines. The
Compensation Committee reviews established goals and objectives,
and determines an individual’s achievement of those goals and
objectives and considers the recommendations provided by the Chief
Executive Officer to assist it in determining appropriate salaries
for the Named Executive Officers other than the Chief Executive
Officer.
The base salary information for our Named
Executive Officers for 2016 and 2017 is set forth in the Summary
Compensation Table below. In October 2016, February 2017 and March
2017, respectively, we entered into an employment
agreement
with each of Khoso Baluch, our Chief
Executive Officer, Robert Cook, our Chief Financial Officer, and
John Armstrong, our Executive Vice President for Technical
Operations. These agreements provide for a salary for each Named
Executive Officer and are described under the caption
“Employment Agreements.” In March 2018, we entered into
an employment agreement with Elizabeth Masson to serve as our
Executive Vice
President
and
Head of Clinical Operations. Ms. Masson is not included in the
discussions of 2017 compensation.
Annual Bonuses
As part of their compensation package, our Named
Executive Officers generally have the opportunity to earn annual
non-equity
incentive
bonuses.
Annual non-equity bonuses are designed to reward superior executive
performance while reinforcing our short-term strategic operating
goals. The Compensation Committee establishes each year a target
award for each Named Executive Officer based on a percentage of
base salary, and based on any applicable terms in any individual
employment agreements. Annual bonus targets as a percentage of
salary increase with executive rank so that for the more senior
executives, a greater proportion of their total cash compensation
is contingent upon annual performance.
At
the beginning of the performance year, each Named Executive
Officer, in conjunction with the Chief Executive Officer,
establishes annual goals and objectives. Actual bonus awards are
based on an assessment against the pre-established goals for each
Named Executive Officer’s individual performance, the
performance of the business function for which he is responsible,
the executive management team’s overall performance, and/or
our company’s overall performance for the year. For any given
performance year, proposed annual bonuses may range from 0% to 100%
of target, or higher under certain circumstances, based on
corporate, team and individual performance. Corporate, team and
individual performance has a significant impact on the annual bonus
amounts because the Compensation Committee believes it is a precise
measure of how the Named Executive Officer contributed to business
results.
21
Pursuant to their
respective employment agreements, Mr. Baluch, Mr. Cook and Mr.
Armstrong are each eligible for an annual bonus, which may equal up
to 80%, 30% and 35%, respectively, of his base salary then in
effect, as determined by our Board or compensation committee. In
determining such bonus, our Board or compensation
committee
will take into consideration the
achievement of specified company objectives, predetermined by the
Board in consultation with the Chief Executive Officer, and
specified personal objectives, predetermined by the Board and the
Chief Executive Officer. For fiscal year 2016, Mr. Baluch’s
bonus was prorated, contingent upon Mr. Baluch meeting performance
objectives established by the Board and Mr. Baluch.
On March 19, 2018,
in an effort to preserve
our cash and to further align the interests of our executive
officers with those of our stockholders, on March 15, 2018, our
executive officers agreed to modify their cash bonuses earned for
2017 by subjecting those bonuses to forfeiture unless additional
performance criteria were achieved, and subject to the
officer’s continued employment through the date such
performance criteria were to be achieved. Pursuant to their
respective employment agreements, Khoso Baluch, our Chief Executive
Officer, Robert Cook, our Chief Financial Officer, and John
Armstrong, our Executive Vice President, Technical Operations and
Head of Human Resources, are each eligible for an annual bonus,
which may equal up to 80%, 30% and 35%, respectively, of his base
salary. For 2017, the annual non-equity incentive bonus for our
executive officers was based on the achievement of company
objectives in 2017 related to clinical studies, raising capital,
technical operations, budgetary and expense matters, and regulatory
matters, all of which goals were established in February 2017. For
2017, Mr. Baluch, Mr. Cook and Mr. Armstrong were entitled to cash
bonuses in an aggregate amount of $306,601. As a result of the
modifications, in the event that we completed our interim efficacy
analysis review by the Data and Safety Monitoring Board for our
LOCK-IT 100 clinical trial on or before June 30, 2018, Mr. Baluch,
Mr. Cook and Mr. Armstrong would each have received a cash bonus
equal to 110% of their unmodified 2017 bonuses. Further, in the
event that the second milestone was met, then Mr. Baluch, Mr. Cook
and Mr. Armstrong would each receive a cash bonus of either 130%,
140% or 150% of their unmodified 2017 bonuses, depending on the
amount of those savings. If the first milestone was not achieved
then no bonuses would be awarded for 2017 at all, even if the
second milestone was achieved.
Subsequent to the
agreed modification of the bonuses, and as previously reported in
late April 2018, we entered into negotiations with our contract
research organization (“CRO”) regarding certain
remediation efforts and financial considerations related to the
complete review and source-verification of a substantial amount of
trial data, which was the cause of the ongoing delay in performing
the interim efficacy analysis of the LOCK-IT-100 trial. Solely as a
result of the significant additional on-site and other work
required to resolve these data quality issues, that could not have
been foreseen earlier, the June 30, 2018 date set in the bonus
modification agreements was not able to be met.
Because the full scope and extent of the data
issues was not discovered until after the bonus modifications,
which were an attempt to conserve cash and further motivate
management, and the resolution of which required substantial
additional unforeseen work and effort, which was outside the
control or knowledge of management, and to continue to further
incentivize management to complete the interim analysis, on June
29, 2018, we agreed with management to further modify the bonus
agreements to
(i) extend the first milestone date for the
completion of the interim analysis from June 30 to July 31, 2018,
(ii) decrease the bonus amount that can be earned by each executive
to the amount that he originally was entitled to under the 2017
plan prior to the March 2018 modification, which is an aggregate
amount of $306,601, and (iii) remove the potential increases in the
bonus amounts related to the second milestone. For 2017, 63%
of the company goals were achieved.
22
Long-Term Incentive Equity Awards
We
believe that long-term performance is achieved through an ownership
culture that encourages high performance by our Named Executive
Officers through the use of stock-based awards. Our 2006 Stock Plan
and 2013 Stock Plan were each established to provide our employees,
including our Named Executive Officers, with incentives to help
align employees’ interests with the interests of our
stockholders. Effective upon the approval by our stockholders of
our 2013 Stock Plan, we were no longer able to issue any award
under the 2006 Stock Plan. The Compensation Committee believes that
the use of stock-based awards offers the best approach to achieving
our compensation goals. We have historically elected to use stock
options as the primary long-term equity incentive vehicle; however,
the Compensation Committee has used restricted stock in the past
and may in the future utilize restricted stock as part of our
long-term incentive program. We have selected the Black-Scholes
method of valuation for share-based compensation. Due to the early
stage of our business and our desire to preserve cash, we may
provide a greater portion of total compensation to our Named
Executive Officers through stock options and restricted stock
grants than through cash-based compensation. The Compensation
Committee generally oversees the administration of our 2006 Stock
Plan and our 2013 Stock Plan.
Stock Options
Our
2013 Stock Plan (and formerly our 2006 Stock Plan) authorizes us to
grant options to purchase shares of common stock to our employees,
directors and consultants.
The
Compensation Committee reviews and approves stock option awards to
Named Executive Officers based upon a review of competitive
compensation data, its assessment of individual performance, a
review of each Named Executive Officer’s existing long-term
incentives, and retention considerations. Periodic stock option
grants are made at the discretion of the Compensation Committee to
eligible employees and, in appropriate circumstances, the
Compensation Committee considers the recommendations of our Chief
Executive Officer.
Stock
options granted to employees have an exercise price equal to the
fair market value of our common stock on the day of grant,
typically vest over a time or upon the achievement of certain
performance-based milestones and are based upon continued
employment, and generally expire 10 years after the date of grant.
The fair value of the options granted to the Named Executive
Officers in the Summary Compensation Table is determined in
accordance with the Black-Scholes method of valuation for
share-based compensation. Incentive stock options also include
certain other terms necessary to ensure compliance with the
Internal Revenue Code.
We
expect to continue to use stock options as a long-term incentive
vehicle because:
●
Stock
options align the interests of our Named Executive Officers with
those of our stockholders, supporting a pay-for performance
culture, foster employee stock ownership, and focus the management
team on increasing value for our stockholders.
●
Stock
options are performance-based. All of the value received by the
recipient of a stock option is based on the growth of the stock
price. In addition, stock options can be issued with vesting based
on the achievement of specified milestones.
●
Stock
options help to provide balance to the overall executive
compensation program as base salary and annual bonuses focus on
short-term compensation, while the vesting of stock options
increases stockholder value over the longer term.
●
The
vesting period of stock options encourages executive retention and
the preservation of stockholder value. In determining the number of
stock options to be granted to our Named Executive Officers, we
take into account the individual’s position, scope of
responsibility, ability to affect profits and stockholder value and
the individual’s historic and recent performance and the
value of stock options in relation to other elements of the
individual Named Executive Officer’s total
compensation.
23
Restricted Stock
Our
2013 Stock Plan (and formerly our 2006 Stock Plan) authorizes us to
grant restricted stock. Restricted stock grants were awarded to
John Armstrong in 2017 and are included in the summary compensation
table. In order to implement our long-term incentive goals, we may
grant shares of restricted stock in the future.
Executive Benefits and Perquisites
Our
Named Executive Officers, some of whom may be parties to employment
or consulting agreements, will continue to be parties to such
agreements in their current form until the expiration or
termination of the employment or consulting agreement or until such
time as the Compensation Committee determines in its discretion
that revisions to such agreements are advisable. In addition,
consistent with our compensation philosophy, we intend to continue
to maintain our current benefits for our Named Executive Officers,
including medical, dental and life insurance and the ability to
contribute to a 401(k) plan; however, the Compensation Committee in
its discretion may revise, amend or add to the officer’s
executive benefits if it deems it advisable. We believe these
benefits are currently comparable to benefit levels for comparable
companies.
Employment Agreements
Employment Agreements with Current Named Executive
Officers
On September 27, 2016, we entered into an
employment agreement with Khoso Baluch, our Chief Executive
Officer. On January 30, 2017, we entered into an employment
agreement, effective February 1, 2017, with Robert Cook to serve as
our Chief Financial Officer. On March 1, 2017, we entered into an
employment agreement with John Armstrong to serve as our Executive
Vice
President
for
Technical
Operations. On March 19,
2018, we entered into an employment agreement with Elizabeth Masson
to serve as our Executive Vice
President
and Head of Clinical Operations. After the initial
three-year term of each employment agreement, the agreement will
automatically renew for additional successive one-year periods,
unless either party notifies the other in writing at least 90 days
before the expiration of the then current term that the agreement
will not be renewed.
Pursuant
to their respective agreements, Mr. Baluch will receive an annual
salary of $375,000, Mr. Cook an annual salary of $350,000, Mr.
Armstrong an annual salary of $310,000, and Ms. Masson an annual
salary of $280,000 which cannot be decreased unless all officers
and/or members of our executive management team experience an equal
or greater percentage reduction in base salary and/or total
compensation, provided that any reduction in executive’s
salary may be no greater than 25%. Each executive will be eligible
for an annual bonus, which may equal up to 80% for Mr. Baluch, up
to 30% for Mr. Cook and Ms. Masson and up to 35% for Mr. Armstrong,
of his or her base salary then in effect, as determined by our
Board or the Compensation Committee. In determining such bonus, our
Board or the Compensation Committee will take into consideration
the achievement of specified company objectives, predetermined by
our Board and Chief Executive Officer, in the case of Mr. Baluch,
and by our Chief Executive Officer in the case of Mr. Cook, Mr.
Armstrong and Ms. Masson, and approved by the Board or the
Compensation Committee, and specified personal objectives,
predetermined by the Board with each executive. For fiscal year
2017, Mr. Cook’s and Mr. Armstrong’s bonuses were
prorated, contingent upon each meeting performance objectives
established by the Board with the executive. Ms. Masson did not
begin employment until March 2018. Each executive must be employed
through December 31 of a given year to earn that year’s
annual bonus.
The
following
provisions of the employment agreements with Mr.
Baluch, Mr. Cook, Mr. Armstrong and Ms. Masson are identical except
where noted.
If we terminate the executive’s employment
for Cause (as defined below), the executive will be entitled to
receive only the accrued compensation due to him or her as of the
date of such termination,
rights to indemnification and directors’ and
officers’ liability insurance, and as otherwise required by
law. All unvested shares of restricted stock in the case of Mr.
Baluch, and all unvested options then held by the executive will be
forfeited to us as of such date.
24
If we
terminate
the executive’s employment other than for
Cause, death or disability, other than by notice of nonrenewal, or
if the executive resigns for Good Reason (as defined below), the
executive will receive the following benefits: (i) payment of any
accrued compensation and any unpaid bonus for the prior year, as
well as rights
to indemnification and directors’ and
officers’ liability insurance and any rights or privilege
otherwise required by law;
(ii) we
will continue to pay his or her base salary and benefits for a
period of twelve months in the case of Mr. Baluch and nine months
for the other executives following the effective date of the
termination of employment; (iii) payment on a prorated basis
for any target bonus for the year of termination based on the
actual achievement of the specified bonus objectives; (iv) if the
executive timely elects continued health insurance coverage under
COBRA, then we will pay the premium to continue such coverage for
him or her and his or her eligible dependents in an amount equal to
the portion paid for by us during the executive’s employment
until the conclusion of the time when he or she is receiving
continuation of base salary payments or until he or she becomes
eligible for group health insurance coverage under another
employer’s plan, whichever occurs first, provided however
that we have the right to terminate such payment of COBRA premiums
on behalf of the executive and instead pay him or her a lump sum
amount equal to the COBRA premium times the number of months
remaining in the specified period if we determine in our discretion
that continued payment of the COBRA premiums is or may be
discriminatory under Section 105(h) of the Internal Revenue Code;
and (v) in the case of Mr. Baluch, all restricted shares and stock
options, and in the case of Mr. Cook and Ms. Masson, all unvested
time-based stock options that are scheduled to vest on or before
the next succeeding anniversary of the date of termination shall be
accelerated and deemed to have vested as of the termination date.
The separation benefits set forth above are conditioned upon the
executive executing a release of claims against us, our parents,
subsidiaries and affiliates and each such entities’ officers,
directors, employees, agents, successors and assigns in a form
acceptable to us, within a time specified therein, which release is
not revoked within any time period allowed for revocation under
applicable law.
For
purposes
of the agreement, “Cause” is defined
as: (i) the willful failure, disregard or refusal by the executive
to perform his or her material duties or obligations under the
agreement (other than as a result of executive’s mental
incapacity or illness, as confirmed by medical evidence provided by
a physician selected by us) that, in the case of Mr. Cook, Mr.
Armstrong and Ms. Masson, is not cured, to the extent subject to
cure, by the executive to our reasonable satisfaction within 30
days after we gave written notice thereof to executive; (ii) any
willful, intentional or grossly negligent act by the executive
having the effect of materially injuring (whether financially or
otherwise) our business or reputation or any of our affiliates;
(iii) executive’s conviction of any felony involving moral
turpitude (including entry of a guilty or nolo contendere plea);
(iv) the executive’s qualification as a “bad
actor,” as defined by 17 CFR 230.506(a); (v) the good faith
determination by the Board, after a reasonable and good-faith
investigation by us that the executive engaged in some form of
harassment or discrimination prohibited by law (including, without
limitation, harassment on the basis of age, sex or race) unless the
executive’s actions were specifically directed by the Board;
(vi) any material misappropriation or embezzlement by the
executive of our property or our affiliates (whether or not a
misdemeanor or felony); or (vii) material breach by the executive
of the agreement that is not cured, to the extent subject to cure,
by executive to our reasonable satisfaction within 30 days after we
give written notice thereof to the executive (20 days in the case
of Mr. Baluch).
For purposes of the agreement, “Good
Reason” is defined as: (i) any material breach of the
agreement by us; (ii) any material diminution by us of the
executive’s duties, responsibilities, or authority; (iii) a
material reduction in the executive’s annual base
salary
unless
all officers
and/or members of our executive management team experience an equal
or greater percentage reduction in annual base salary and/or total
compensation; (iv) in the case of Mr. Cook and Mr.
Armstrong,
a required relocation of the primary place of
performance of the executive’s duties to a location more
than
50 miles from our then
location in Bedminster, New Jersey, provided that a change in the
location of the primary place of performance of the
executive’s duties will not constitute Good Reason if such
change occurs prior to a change in control and we only require the
executive to physically work at that new location two days or less
per workweek and provide reimbursement of the executive’s
reasonable travel expenses in commuting to such new
location
; or (v) a material reduction
in the executive’s target bonus level unless all officers
and/or members of our executive management team experience an equal
or greater percentage reduction related to target bonus
levels.
If the
executive
terminates his or her employment by written notice
of termination or if the executive or we terminate his or her
employment by providing a notice of nonrenewal at least 90 days
before the agreement is set to expire, the executive will not be
entitled to receive any payments or benefits other than any accrued
compensation,
any unpaid prior year’s bonus, rights to
indemnification and directors’ and officers’ liability
insurance and as otherwise required by law.
25
If the
executive’s
employment
is
terminated as a result of his or her death or disability, we will
pay him or her or his or her estate, as applicable, any accrued
compensation and any unpaid prior year’s bonus.
Our
agreements with Mr. Baluch, Mr. Cook, Mr. Armstrong and Ms. Masson
each contain a non-compete provision that provides that during the
term
of each agreement and the
12-month period immediately following the executive’s
separation from employment for any reason, the executive is
prohibited from engaging in any business involving the development
or commercialization of a preventive anti-infective product that
would be a direct competitor of Neutrolin or a product containing
taurolidine or any other product being actively developed or
produced by us within the United States and the European Union on
the date of termination of his or her employment.
Employment Agreements with Former Named Executive
Officer
On
August 24, 2017, Dr. Judith Abrams, our former Chief Medical
Officer, resigned for personal reasons. The Company did not owe Dr.
Abrams any severance obligations under her employment agreement. In
connection with her resignation, on August 25, 2017, we entered
into a consulting agreement with Dr. Abrams for a term of up to
nine months.
Pursuant
to the
consulting agreement, Dr. Abrams received a monthly payment of
approximately $29,000, an upfront payme
n
t of approximately $17,000, vesting in
full of an option to purchase 46,250 shares of our common stock
granted under her employment agreement, and, at her option, COBRA
premiums for the period during which she receives monthly payments
under the consulting agreement.
Tax and Accounting Considerations
U.S.
federal income tax generally limits the tax deductibility of
compensation we pay to our Named Executive Officers to $1.0 million
in the year the compensation becomes taxable to the executive
officers. There is an exception to the limit on
deductibility
for performance-based
compensation that meets certain requirements. Although
deductibility of compensation is preferred, tax deductibility is
not a primary objective of our compensation programs. Rather,
we seek to maintain flexibility in how we compensate our executive
officers so as to meet a broader set of corporate and strategic
goals and the needs of stockholders, and as such, we may be limited
in our ability to deduct amounts of compensation from time to
time. Accounting rules require us to expense the cost of our
stock option grants. Because of option expensing and the
impact of dilution on our stockholders, we pay close attention to,
among other factors, the type of equity awards we grant and the
number and value of the shares underlying such awards.
Pension Benefits
We do
not maintain any qualified or non-qualified defined benefit plans.
As a result, none of our Named Executive Officers participate in or
have account balances in qualified or non-qualified defined benefit
plans sponsored by us. Our Compensation Committee may elect to
adopt qualified or non-qualified benefit plans in the future if it
determines that doing so is in our best interests.
Nonqualified Deferred Compensation
None of
our Named
Executive
Officers
participate in our have account balances in nonqualified defined
contribution plans or other non-qualified deferred compensation
plans maintained by us. Our Compensation Committee may elect to
provide our officers and other employees with non-qualified defined
contribution or other non-qualified deferred compensation benefits
in the future if it determines that doing so is in our best
interests.
26
Summary Compensation Table
The
following
table
sets forth
information with respect to compensation earned by our Named
Executive Officers in the years ended December 31, 2017 and
2016:
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Option
Awards
(1)
($)
|
|
|
Restricted Stock Units
Awards
(1)
($)
|
|
|
Non-equity
Incentive Plan Compensation
($)
|
|
|
All Other Compensation ($)
|
|
|
Total
($)
|
|
||||||
|
Khoso
Baluch
(2)
|
|
2017
|
|
|
375,000
|
|
|
|
--
|
|
|
|
--
|
|
|
|
189,474
|
|
|
|
68,533
(7)
|
|
|
|
633,007
|
|
|
Chief
Executive Officer
|
|
2016
|
|
|
93,750
|
|
|
|
3,186,450
|
|
|
|
--
|
|
|
|
75,000
|
|
|
|
39,574
(7)
|
|
|
|
3,394,774
|
|
|
Robert
W. Cook
(3)
|
|
2017
|
|
|
320,385
|
|
|
|
455,945
|
|
|
|
--
|
|
|
|
60,789
|
|
|
|
24,273
(8)
|
|
|
|
861,392
|
|
|
Chief
Financial Officer
|
|
2016
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
John
Armstrong
(4)
|
|
2017
|
|
|
341,056
(4)
|
|
|
|
167,020
|
|
|
|
78,604
(4)
|
|
|
|
57,105
|
|
|
--
|
|
|
|
643,785
|
|
|
|
Executive Vice
President for
|
|
2016
|
|
|
335,400
(4)
|
|
|
|
1,150,755
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,486,155
|
|
|
Technical
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Judith
Abrams
(5)
|
|
2017
|
|
|
346,733
(5)
|
|
|
|
455,945
|
|
|
|
--
|
|
|
|
--
|
|
|
|
15,448
(8)
|
|
|
|
818,126
|
|
|
Chief Medical
Officer
|
|
2016
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
James
Altland
(6)
|
|
2017
|
|
|
57,100
(6)
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
57,100
|
|
|
Interim Chief Financial
Officer
|
|
2016
|
|
|
244,485
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
244,485
|
|
_____________________
(1)
The
amounts included in this column are the dollar amounts representing
the full grant date fair value of each award calculated in
accordance with FASB ASC Topic 718 and do not represent the actual
value that may be recognized by the Named Executive Officers upon
option exercise.
(2)
Mr.
Baluch became our Chief Executive Officer on October 3,
2016.
(3)
Mr.
Cook became our Chief Financial Officer on February 1,
2017.
(4)
Mr.
Armstrong became our Executive Vice President for Technical
Operations on March 1, 2017. His salary for 2017 includes fees as a
consultant and his 2016 salary consists of consulting
fees.
(5)
Dr.
Abrams became our Chief Medical Officer on February 1, 2017 and
ceased to serve as our Chief Medical Officer on August 24, 2017.
Her salary for 2017 included fees as a consultant after she ceased
as our Chief Medical Officer.
(6)
Mr.
Altland was appointed as our Interim Chief Financial Officer
effective October 26, 2015. He served pursuant to a contract
arrangement with a third-party agency until February 2017. The
salary amount in 2017 was the amount paid to a third-party
agency.
(7)
C
onsists of health benefits, 401K employer match
and reimbursed moving expenses.
(8)
C
onsists of health benefits and 401K employer
match.
27
Outstanding Equity Awards at Fiscal Year-End 2017
The
following table contains certain information concerning unexercised
options for the Named Executive Officers as of December 31,
2017.
|
Name
|
Number of Shares Underlying Unexercised Options (#) –
Exercisable
|
Number of Shares Underlying Unexercised Options (#) –
Unexercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
Khoso
Baluch
|
312,500
|
1,537,500
|
2.52
|
10/03/2026
|
|
Robert
W. Cook
|
--
|
350,000
|
1.69
|
1/30/2027
|
|
John
Armstrong
|
10,000
|
--
|
1.52
|
11/14/2024
|
|
|
15,000
|
--
|
3.25
|
7/28/2025
|
|
|
171,875
|
28,125
|
2.51
|
3/08/2026
|
|
|
--
|
100,000
|
2.18
|
3/01/2027
|
|
Judith
Abrams
|
46,250
|
--
|
1.69
|
8/23/2018
|
Option Repricings
We
did not engage in any repricings or other modifications to any of
our Named Executive Officers’ outstanding options during the
year ended December 31, 2017.
Potential Payments on Change of Control
If the
severance
payments called for
in our agreements for Mr. Baluch, Mr. Cook and Mr. Armstrong had
been triggered on December 31, 2017, we would have been obligated
to make the following payments:
|
Name
|
Cash Payment
($ per month) and
(# of months paid)
|
Benefits
($ per month) and
(# of months paid)
|
Number of Options
(# that would vest) and
($ market value)
(1)
|
|||
|
Khoso
Baluch
|
$
31,250
|
12
mos.
|
$
2,564
|
12
mos.
|
1,537,500
|
--
|
|
Robert W.
Cook
|
$
29,167
|
9
mos
|
$
2,755
|
9 mos
|
350,000
|
--
|
|
John
Armstrong
|
$
25,833
|
9
mos
|
--
|
9 mos
|
128,125
|
--
|
______________________
(1)
The market value
equals the difference the fair market value of the shares that
could be acquired based on the closing sale price per share of our
common stock on the NYSE American on December 29, 2017 (the last
trading day of 2017), which was $0.50, and the exercise prices for
the underlying stock options.
28
AUDITOR AND AUDIT COMMITTEE MATTERS
Report of the Audit Committee
The Audit Committee has reviewed and discussed
with management our audited financial statements for the fiscal
year ended December 31, 2017, which were audited by
Friedman
LLP,
our independent registered public
accounting firm. The Audit Committee discussed with
Friedman
LLP
the matters required to be
discussed
pursuant to Public Company Accounting Oversight
Board (United States) Auditing Standard 16 (Communication with
Audit Committee)
. The Audit Committee
received the written disclosures and letter from the independent
registered public accounting firm required by applicable
requirements of the PCAOB regarding the independent registered
public accounting firm’s communications with the Audit
Committee concerning independence, and discussed with the
independent registered public accounting firm the independent
registered public accounting firm’s independence. The Audit
Committee also considered whether the provision of services other
than the audit of our financial statements for the fiscal year
ended December 31, 2017 were compatible with maintaining
Friedman LLP
’s
independence.
Based
on the review and discussions referred to in the foregoing
paragraph, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2017 for filing with the SEC.
All
members of our Audit Committee are independent under SEC regulation
and Section 803B(2) of the NYSE American Rules. The financial
literacy requirements of the SEC require that each member of our
Audit Committee be able to read and understand fundamental
financial statements. In addition, at least one member of our Audit
Committee must qualify as an audit committee financial expert, as
defined in Item 407(d)(5) of Regulation S-K promulgated by the
SEC, and have financial sophistication in accordance with the NYSE
American Rules 803B2(a)(iii). Our Board has determined that each of
Mr. Lefkowitz and Ms. Dillione qualifies as an audit committee
financial expert.
THE AUDIT COMMITTEE
Steven Lefkowitz, Chairman
Janet M. Dillione
Myron Kaplan
29
Fees Paid to the Independent Registered Public Accounting
Firm
The
following table sets forth fees billed to us by Friedman LLP, our
independent registered public accounting firm for the years ended
December 31, 2017 and 2016, for services relating to: auditing our
annual financial
statements
;
reviewing our financial statements included in our quarterly
reports on Form 10-Q; reviewing registration statements during 2017
and 2016; financing activities in 2017 and 2016; and services
rendered in connection with tax compliance, tax advice and tax
planning, and all other fees for services rendered.
|
|
2017
|
2016
|
|
Audit
Fees
(1)
|
$
181,500
|
$
209,000
|
|
Audit Related
Fees
(2)
|
5,000
|
--
|
|
Tax
Fees
(3)
|
11,300
|
10,800
|
|
All Other
Fees
|
--
|
--
|
|
Total
|
$
197,800
|
$
219,800
|
(1)
Audit fees relate
to professional services rendered in connection with the audit of
our annual financial statements and internal control over financial
reporting (as applicable), quarterly review of financial statements
included in our Quarterly Reports on Form 10-Q and audit services
provided in connection with our other statutory and regulatory
filings.
(2)
Audit-related fees
comprise fees for professional services that are reasonably related
to the performance of the worldwide audit or review of our
financial statements.
(3)
Tax fees relate to
professional services rendered in connection with tax audits,
international tax compliance, and international tax consulting and
planning services.
Audit Committee Pre-Approval Policies and Procedures
Pursuant to its
charter, the Audit Committee is responsible for reviewing and
approving in advance any audit and any permissible non-audit
engagement or relationship between us and our independent
registered public accounting firm. The Audit Committee may delegate
to one or more designated members of the Audit Committee the
authority to
grant
pre-approvals, provided such approvals are presented to the Audit
Committee at a subsequent meeting. If the Audit Committee elects to
establish pre-approval policies and procedures regarding non-audit
services, the Audit Committee must be informed of each non-audit
service provided by our independent registered public accounting
firm. Audit Committee pre-approval of audit and non-audit services
will not be required if the engagement for the services is entered
into pursuant to pre-approval policies and procedures, provided the
policies and procedures are detailed as to the particular service,
the Audit Committee is informed of each service provided and such
policies and procedures do not include delegation of the Audit
Committee’s responsibilities under the Exchange Act to our
management. Audit Committee pre-approval of non-audit services
(other than review and attestation services) also will not be
required if such services fall within available exceptions
established by the SEC. All services performed by our independent
registered public accounting firm during 2017 were pre-approved by
the Audit Committee.
30
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions
In
September 2014, as part of the removal of anti-dilution, price
reset and change of control provisions in various securities that
had caused those securities to be classified as derivative
liabilities, the Company entered into a Consent and Exchange
Agreement with Manchester, pursuant to which Manchester had a right
of 60% participation in equity financings undertaken by the Company
prior to September 15, 2017. Pursuant to this right of
participation, Manchester elected partial participation in the
equity financing that the Company closed on May 3, 2017 and
invested $2,000,000.
On
March 3, 2015, the Company entered into a backstop agreement with
Manchester under which Manchester had agreed to lend the Company,
at its request, up to $3,000,000. The Company did not
access the loan and the agreement expired on April 30, 2015. The
Company issued two warrants exercisable for an aggregate of up to
283,400 common shares with an exercise price of $7.00 per share and
a term of five years as a result of entering into the backstop
agreement. Additionally, the Company granted Manchester the right
for as long as it or its affiliates hold any of the Company’s
common stock or securities convertible into its common stock to
appoint up to two members to the Company’s board of directors
and/or to have up to two observers attend board meetings in a
non-voting capacity. As of December 31, 2017, two board members and
one observer had been appointed to the board. The Company’s
board of directors subsequently elected the observer to the
board.
On
April 28, 2017, we entered into an underwriting agreement with H.C.
Wainwright & Co., LLC, relating to an underwritten public
offering of 16,190,697 shares of our common stock, together with
Series A warrants to purchase up to an aggregate of 12,143,022
shares of our common stock and Series B warrants to purchase up to
an aggregate of 12,143,022 shares of our common stock, at a price
to the public of $0.75 per share and related warrants. Elliott
purchased 2,657,668 shares of common stock, Series A warrants to
purchase up to 2,000,000 shares (that expired unexercised on
September 10, 2018), and Series B warrants to purchase up to
2,000,000 shares of our common stock. Our director, Gary Gelbfish,
purchased 1,333,334 shares of common stock, Series A warrants to
purchase up to 1,000,000 shares (that expired unexercised on
September 10, 2018), and Series B warrants to purchase up to
1,000,000 shares of our common stock. The purchases by Elliott and
Dr. Gelbfish were on the same terms as those for all other
investors.
In
November 2017, the Company entered into a securities purchase
agreement with Elliott Associates, L.P. and Elliott International,
L.P., (the “Buyers”), long-term institutional investors
in CorMedix, whereby they purchased $3.0 million of a newly issued
CorMedix Series F convertible preferred stock at $1,000 per share.
Separately, on November 9, 2017, the Company entered into a
backstop agreement with the Buyers to purchase up to an additional
$3.0 million of Series F convertible preferred stock at $1,000 per
share (the “Backstop Agreement”), at the
Company’s sole discretion, beginning January 15, 2018,
through March 31, 2018. As consideration for the Backstop
Agreement, the Company issued 564,858 warrants, exercisable for
three years, to purchase shares of the Company’s common stock
at a per share exercise price of $0.001. The number of shares
issuable under the warrant was determined by the closing price of
the Company’s common stock on November 8, 2017, which was
$0.5278, reduced by the amount of equity capital raised from the
current ATM program and the sale of common stock to directors,
executive officers and other certain employees of the Company
totaling $2.4 million. The Series F preferred stock is convertible
into common stock at a price of $0.162 per share, which was reduced
from $0.6334 pursuant to the terms of the Series F preferred stock
and represents a 10% discount to the closing price of the stock on
March 31, 2018. The preferred stock will be mandatorily convertible
on or after April 2, 2018, subject to certain equity conditions,
one of which had not been met as of the date of this proxy
statement. The Backstop Agreement expired unused.
31
In
December 2017, the Company issued an aggregate of 624,246 shares of
its common stock to its directors and executive officers and to
certain of its employees at a per share purchase price of $0.48,
which was market price. This common stock financing reduced the
number of shares issuable under the warrants that the Company was
required to issue to the Buyers pursuant to a Backstop Agreement.
The Company realized gross proceeds of approximately $300,000. The
following related parties participated in the common stock
financing:
|
|
|
Amount
|
Number of
Shares
|
|
Khoso
Baluch
|
CEO and
Director
|
$
50,000
|
104,166
|
|
Robert W.
Cook
|
CFO
|
$
25,000
|
52,083
|
|
John
Armstrong
|
Executive
VP
|
$
10,000
|
20,833
|
|
Myron
Kaplan
|
Chairman of the
Board
|
$
50,000
|
104,166
|
|
Janet
Dillione
|
Director
|
$
25,000
|
52,083
|
|
Gary
Gelbfish
|
Director
|
$
25,000
|
52,083
|
|
Mehmood
Khan
|
Director
|
$
25,000
|
52,083
|
|
Steven W.
Lefkowitz
|
Director
|
$
65,000
|
135,416
|
In each
instance, the purchase was on the same terms as all other
purchasers in the offering. The Audit Committee of the Board of
Directors approved the purchase by these insiders.
On
March 19, 2018, the Company entered into a binding term sheet with
Elliott Management Corporation for a proposed $3.0 million backstop
facility. The proposed backstop facility was available for drawing
between April 16, 2018 and July 31, 2018. In view of the DSMB
recommendation to terminate the LOCK-IT-100 study for efficacy and
the Company’s ongoing negotiations with its CRO regarding
financial considerations for the interim efficacy analysis of the
LOCK-IT-100 study, the Company determined to not draw down on this
facility.
In
November 2017, the Company and Gary Gelbfish, a director, entered
into a consulting agreement whereby Dr. Gelbfish was to assist in
the data quality review for the interim analysis of the
Company’s LOCK-IT-100 clinical trial for Neutrolin. Pursuant
to the consulting agreement, the Company paid Dr. Gelbfish $53,080
for the year ended December 31, 2017, and $210,000 in 2018 for his
services through June 2018. Under the terms of the consulting
agreement, Dr. Gelbfish was compensated at the rate of $800 per
hour. The resulting agreement was terminated in September 2018 with
no services performed after June 2018.
Procedures
for Review and Approval of Transactions with Related
Persons
Pursuant to the
Audit Committee Charter, the Audit Committee is responsible for
reviewing and approving all related party transactions as defined
under Item 404 of Regulation S-K, after reviewing each such
transaction for potential conflicts of interests and other
improprieties. Our policies and procedures for review and approval
of transactions with related persons are in writing in our Code of
Conduct and Ethics available on our website at
www.cormedix.com
under the “Investor Relations—Corporate
Governance” tab.
32
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section
16(a) of the Exchange Act requires our directors, executive
officers and holders of more than 10% of our common stock to file
with the SEC initial reports of ownership and reports of changes in
the ownership of our common stock and other equity securities. Such
persons are required to furnish us copies of all Section 16(a)
filings. Based solely upon a review of the copies of the forms
furnished to us, we believe that our officers, directors and
holders of more than 10% of our common stock complied with all
applicable filing requirements during the fiscal year ended
December 31, 2017, with the exception of: a Form 4 for Robert Cook
to report the grant in connection with his employment of options to
purchase 350,000 shares of common stock, which report was due on
February 3, 2017 and was filed on February 9, 2017; a Form 4 for
Steven Lefkowitz to report the grant in connection with his
election to the Board of options to purchase 75,000 shares of
common stock, which report was due on June 27, 2017 and was filed
on June 28, 2017; a Form 4 for Mehmood Khan to report the purchase
of 50,000 shares of common stock, which report was due on August
16, 2017 and was filed on August 22, 2017; a Form 4 for Janet
Dillione to report the receipt of 20,833 shares of phantom common
stock in connection with the deferral of her cash director’s
fees, which report was due on August 16, 2017 and was filed on
August 24, 2017; and a Form 4 for Myron Kaplan to report the grant
of restricted stock units, which report was due on November 8, 2017
and was filed on December 15, 2017.
STOCKHOLDER COMMUNICATIONS
Stockholders may
send any communications regarding our company’s business to
the Board in care of our Corporate Secretary at our principal
executive offices located at 400 Connell Drive, Suite 5000,
Berkeley Heights, New Jersey 07922. The Secretary will forward all
such communications to the addressee.
DEADLINE FOR STOCKHOLDER PROPOSALS FOR 2019 ANNUAL
MEETING
We
anticipate holding the 2019 annual meeting in June 2019, consistent
with prior practice. According to the Bylaws, in the event that the
date of the 2019 annual meeting is more than 30 days before or more
than 60 days after the anniversary date of the 2018 annual meeting,
a stockholder wishing to nominate a director or have another matter
included in the proxy statement must give notice not more than 120
days nor less than the later of 90 days prior to the date of the
2019 annual meeting or, if it is later, the 10
th
day following the date on which the
date of the annual meeting is first publicly announced or disclosed
by us.
Based
on our current expectation as to the approximate timing of the 2019
annual meeting, we would expect that stockholder proposals desired
to be included in the proxy statement for that meeting will need to
be received by us not later than a date in March 2019. All
submissions must comply with all of the requirements of our bylaws
and Rule 14a-8 of the Exchange Act. Proposals should be mailed to
Antony E. Pfaffle, Corporate Secretary, CorMedix Inc., 400 Connell
Drive, Suite 5000, Berkeley Heights, New Jersey 07922. We also
would expect that management’s proxy holders for the 2019
annual meeting will have discretion to vote proxies given to them
on any stockholder proposal of which we do not have notice prior to
a date in March 2018. The specific dates will be set out in the
proxy statement for the 2019 annual meeting.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN
ADDRESS
The SEC
has adopted rules that permit companies to deliver a single copy of
proxy materials to multiple stockholders sharing an address unless
a company has received contrary instructions from one or more of
the stockholders at that address. Upon request, we will promptly
deliver a separate copy of proxy materials to one or more
stockholders at a shared address to which a single copy of proxy
materials was delivered. Stockholders may request a separate copy
of proxy materials by contacting us either by calling (908)
517-9500 or by mailing a request to 400 Connell Drive, Suite 5000,
Berkeley Heights, New Jersey 07922. Stockholders at a shared
address who receive multiple copies of proxy materials may request
to receive or a single copy of proxy materials in the future in the
same manner as described above.
33
ANNUAL REPORT ON FORM 10-K
Our
Annual Report on Form 10-K for the fiscal year ended December 31,
2017 as amended and as filed with the SEC is accessible free of
charge on its website at www.sec.gov. It contains audited financial
statements covering the fiscal years ended December 31, 2017 and
2016.
You can request a copy of our
Annual Report on Form 10-K free of charge by calling (908) 517-9500
or by mailing a request to our Corporate Secretary, 400 Connell
Drive, Suite 5000, Berkeley Heights, New Jersey 07922. Please
include your contact information with the
request.
34
DIRECTIONS TO CORMEDIX INC. 2018 ANNUAL MEETING AT
EMBASSY SUITES BY HILTON,
250 CONNELL DRIVE, BERKELEY HEIGHTS, NEW JERSEY 07922
From
Newark International Airport
Directions
Take
I-78 west to exit 41, turn right on Drift Road, turn right on
Plainfield Avenue, turn left on Connell Drive and then left on
Connell II Access.
From La
Guardia Airport
Directions
Grand
Central Parkway from Central Terminal Drive. Take I-278 east-
Harlem River Drive. Exit 24 (I-95 South/GW Bridge) Use I-95 south
upper level. Exit 14-14c -US 1/US 9/US22 to I-78 west. Exit 41
(Berkeley Height/Scotch Plains).
From
John F. Kennedy International Airport
Directions
I-678
North, towards Whitestone Bridge. Take I-95 south, over GW Bridge-
lower level. Exit 14-14c -US 1/US 9/US22 to I-78 west. Exit 41
(Berkeley Height/Scotch Plains).
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