ENDRA LIFE SCIENCES INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. )
Filed
by the Registrant [x]
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))
[x]
Definitive Proxy Statement
[ ]
Definitive Additional Materials
[ ]
Soliciting Material Pursuant to Rule 14a-12
ENDRA LIFE SCIENCES
INC.
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x]
No
fee required.
[
]
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1)
Title of each
class of securities to which transaction applies:
N/A
(2)
Aggregate
number of securities to which transaction applies:
N/A
(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):
N/A
(4)
Proposed
maximum aggregate value of transaction:
N/A
(5)
Total
fee paid: N/A
[ ]
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: N/A
(2)
Form,
Schedule or Registration Statement No.: N/A
(3)
Filing
Party: N/A
(4)
Date
Filed: N/A
3600 Green Court, Suite 350
Ann
Arbor, Michigan 48105
April
29, 2021
Dear
Stockholder:
You are
cordially invited to attend the annual meeting of stockholders of
ENDRA Life Sciences Inc. to be held at
10:00 a.m., Eastern Time, on June 8,
2021. Due to concerns about the COVID-19 pandemic and the related
protocols implemented by federal, state and local governments, this
year’s annual meeting will be held via the internet and will
be a completely virtual meeting. You may attend the annual meeting
on the internet at https://agm.issuerdirect.com/ndra.
Prior
to the meeting you may submit questions by logging into
https://agm.issuerdirect.com/ndra and, during the meeting until
polls are closed, you may vote by logging into
https://www.iproxydirect.com/NDRA using your shareholder
information provided on the Notice of Internet Availability of
Proxy Materials described below.
We are
using the “Notice and Access” method of providing proxy
materials to you via the internet. We believe that this process
should provide you with a convenient and quick way to access your
proxy materials and vote your shares, while allowing us to conserve
natural resources and reduce the costs of printing and distributing
the proxy materials. On or about April 29, 2021, we are mailing to
our stockholders a Notice of Internet Availability of Proxy
Materials (the “Notice”) containing instructions on how
to access our proxy statement and vote electronically via the
internet or by telephone. The Notice also contains instructions on
how to receive a paper copy of your proxy materials.
We look
forward to your participation in the annual meeting by attending
virtually or by submitting your proxy. Further details regarding
the matters to be acted upon at this meeting appear in the
accompanying Notice and Proxy Statement. Please give this material
your careful attention.
|
|
Very
truly yours,
David
Wells
Chief Financial Officer and Secretary
|
ENDRA Life Sciences Inc.
3600
Green Court, Suite 350
Ann Arbor, Michigan
48105
NOTICE
OF 2021 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June
8, 2021
To the
Stockholders of ENDRA Life Sciences Inc.:
NOTICE
IS HEREBY GIVEN that the 2021 Annual Meeting of Stockholders of
ENDRA Life Sciences Inc., a Delaware corporation, will take place
on June 8, 2021 at 10:00 a.m., Eastern Time. The annual meeting
will be a virtual meeting, held on the internet at
https://agm.issuerdirect.com/ndra
,
for the following purposes:
1.
To elect the five
nominees to the Board of Directors nominated by the Board of
Directors.
2.
To ratify the
appointment of RBSM LLP as our independent registered public
accounting firm for 2021.
3.
To transact such
other business as may properly come before the annual meeting and
any adjournments or postponements thereof.
Only
stockholders of record of our common stock and preferred stock at
the close of business on April 22, 2021, the record date fixed by
the Board of Directors, are entitled to notice of and to vote at
the annual meeting and any adjournment or postponement thereof.
ENDRA’s warrants do not have voting rights.
|
|
By
Order of the Board of Directors,
Francois
Michelon
Chief Executive Officer and Chairman
|
Ann
Arbor, Michigan
April
29, 2021
PROXY STATEMENT
TABLE OF CONTENTS
|
GENERAL INFORMATION
|
1
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SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
|
7
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|
PROPOSAL 1
—
ELECTION OF DIRECTORS
|
10
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INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR
DIRECTOR
|
10
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INFORMATION CONCERNING EXECUTIVE OFFICERS
|
13
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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
15
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THE BOARD OF DIRECTORS AND ITS COMMITTEES
|
19
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REPORT OF THE AUDIT COMMITTEE
|
21
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COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND
OFFICERS
|
22
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PROPOSAL 2
—
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
|
30
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
31
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DELINQUENT SECTION 16(a) REPORTS
|
32
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OTHER BUSINESS
|
32
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON JUNE 8, 2021
|
32
|
i
ENDRA Life Sciences Inc.
3600
Green Court, Suite 350
Ann Arbor, Michigan
48105
PROXY STATEMENT
The
Board of Directors (the “Board”) of ENDRA Life Sciences
Inc. (the “Company,” “ENDRA,”
“we,” “us” or “our”) is
providing these materials to you in connection with ENDRA’s
2021 annual meeting of stockholders (the “2021 Annual
Meeting”). The 2021 Annual Meeting will take place on June 8,
2021, 10:00 a.m., Eastern Time, and will be held on the internet at
https://agm.issuerdirect.com/ndra
.
This proxy statement and the form of proxy are being made
available, and the Notice of Internet Availability of Proxy
Materials (the “Notice”) is being mailed, to
stockholders on or about April 29, 2021
.
GENERAL INFORMATION
Why am I receiving these materials?
You
have received these proxy materials because the Board is soliciting
your proxy to vote your shares at the 2021 Annual Meeting. This
proxy statement includes information that we are required to
provide to you under Securities and Exchange Commission
(“SEC”) rules and is designed to assist you in voting
your shares.
Pursuant to the “notice and access” rules adopted by
the SEC, we have elected to provide stockholders access to our
proxy materials over the internet. Accordingly, we sent the Notice
to all of our stockholders as of the record date. The Notice
includes instructions on how to access our proxy materials over the
internet and how to request a printed copy of these materials. In
addition, by following the instructions in the Notice, stockholders
may request to receive proxy materials in printed form by mail or
electronically by email on an ongoing basis.
What is a proxy?
The
Board is asking for your proxy. This means that you authorize
persons selected by us to vote your shares at the 2021 Annual
Meeting in the way that you instruct. We have designated two of our
executive officers to serve as proxy holders for the 2021 Annual
Meeting. All shares represented by valid proxies received before
the 2021 Annual Meeting will be voted in accordance with the
stockholder’s specific voting instructions.
What is included in these materials?
These
materials include:
●
this proxy
statement for the 2021 Annual Meeting;
1
●
a proxy card for
the 2021 Annual Meeting; and
●
our Annual Report
on Form 10-K for the year ended December 31, 2020.
What items will be voted on at the 2021 Annual
Meeting?
There
are two proposals scheduled to be voted on at the 2021 Annual
Meeting:
●
the election of the
nominees to the Board nominated by our Board of Directors;
and
●
the ratification of
the Audit Committee’s appointment of RBSM LLP
(“RBSM”) as
the
Company’s
independent registered public accounting
firm for the fiscal year ending December 31, 2021.
The
Board is not aware of any other matters to be brought before the
meeting. If other matters are properly raised at the meeting, the
proxy holders may vote any shares represented by proxy in their
discretion.
What are the Board’s voting recommendations?
The
Board recommends that you vote your shares:
●
FOR
the nominees to the Board;
and
●
FOR
the ratification of the Audit
Committee’s appointment of RBSM as the Company’s
independent registered public accounting firm for
2021.
Why is the Annual Meeting being held in a virtual-only
format?
Due to
public health concerns resulting from the coronavirus (COVID-19),
and the related protocols that federal, state, and local
governments have implemented, the Board has determined to hold the
Annual Meeting solely by means of remote communication via webcast.
This is often referred to as a “virtual annual
meeting.” The webcast will allow all shareholders to join the
meeting, regardless of location.
How can I participate in the 2021 Annual Meeting?
You may
view the 2021 Annual Meeting online at
https://agm.issuerdirect.com/ndra.
The Annual Meeting will
begin at approximately 10:00 a.m. local time, with log-in beginning
at 9:45 a.m., on June 8, 2021. As with an in-person meeting, you
will be able to vote during the meeting by logging into
https://www.iproxydirect.com/NDRA and entering your stockholder
information provided on the Notice previously mailed to you;
however, in order to submit questions for consideration at the
meeting we ask that you log onto https://agm.issuerdirect.com/ndra
and follow the instructions to submit a question prior to 5:00 p.m.
on June 4, 2021. If you hold shares in street name, you must vote
by giving instructions to your bank or broker. You should follow
the instructions on the form that you receive from your bank or
broker in order to submit your vote or questions.
2
What if I have technical difficulties or trouble accessing the
annual meeting webcast?
We
encourage you to test your computer and internet browser prior to
the meeting. If you experience technical difficulties, please visit
the help pages found at
https://www.webcaster4.com/Support.
Who can attend and participate in the 2021 Annual
Meeting?
Issuer
Direct is hosting the annual meeting online
at https://agm.issuerdirect.com/ndra. While all stockholders
will be permitted to listen online to the 2021 Annual Meeting, only
stockholders of record and beneficial owners as of the close of
business on April 22, 2021 (the
“
record date”) may vote and ask
questions. To vote or submit a question if you are participating
online, stockholder of record will need the control number included
on their proxy cards or Notices, and to follow the instructions
posted at www.iproxydirect.com/NDRA. Beneficial owners who do not
have a control number may gain access to the meeting by following
the instructions provided by their broker, bank, or other nominee.
We encourage you to access the meeting prior to start time and
submit any questions in advance, as described above under
“How Can I Participate in the 2021 Annual Meeting?”.
Please allow time for online check-in, which will begin at 9:45
a.m. local time. If you have difficulties checking in or during the
2021 Annual Meeting, please call Issuer Direct technical support at
919-744-2718.
When is the record date and who is entitled to vote?
The
Board set April 22, 2021 as the record date. All record holders of
ENDRA common stock and preferred stock as of the close of business
on that date are entitled to vote. Each outstanding share of common
stock is entitled to one vote. Each outstanding share of Series A
Convertible Preferred Stock (“Series A Preferred
Stock”) entitles the holder thereof to a number of votes
equal to the number of shares of common stock into which each such
share of preferred stock could be converted based upon an issue
price of $1,000 per share, subject to adjustment for accrued
dividends, and a conversion price of $0.87 per share. Accordingly,
as of the record date, each share of Series A Preferred Stock is
entitled to approximately 1,244 votes. As of the record date, there
were outstanding 41,640,168 shares of common stock entitled to
41,640,168 votes at the 2021 Annual Meeting and 141.397 shares of
Series A Preferred Stock entitled to approximately 175,898 votes at
the 2021 Annual Meeting.
ENDRA’s
warrants do not have voting rights.
What is a stockholder of record?
A
stockholder of record or registered stockholder is a stockholder
whose ownership of ENDRA common stock is reflected directly on the
books and records of our transfer agent, VStock Transfer, LLC, or
whose ownership of Series A Preferred Stock is reflected directly
on the books and records kept by ENDRA. If you hold stock through
an account with a bank, broker or similar organization, you are
considered the beneficial owner of shares held in “street
name” and are not a stockholder of record. For shares held in
street name, the stockholder of record is your bank, broker or
similar organization. We only have access to stock ownership
information for registered stockholders. As described below, if you
are not a stockholder of record, you will not be able to vote your
shares unless you have a proxy from the stockholder of record
authorizing you to vote your shares.
3
How do I vote?
You may
vote by any of the following methods:
●
Virtually during the 2021 Annual
Meeting
. You may vote by attending the 2021 Annual Meeting
online. Please follow the instructions for attending and voting
virtually posted at https://agm.issuerdirect.com/ndra.
●
By mail (if you received a
paper copy of the proxy materials by mail)
.
Stockholders of record
may vote by signing and returning the proxy card
provided.
●
By submitting your proxy by phone or via the
internet.
You may submit your voting instructions by proxy,
by phone or via the Internet by following the instructions provided
in the Notice or the proxy card included with a paper copy of the
proxy statement.
●
Beneficial owners
of shares held in “street name.” You may vote by
following the voting instructions provided to you by your bank or
broker.
How can I change or revoke my vote?
If you
are a stockholder of record, you may change or revoke your proxy
any time before it is voted at the 2021 Annual Meeting
by:
●
timely delivering a
properly executed, later-dated proxy;
●
delivering a
written revocation of your proxy to our Secretary at our principal
executive offices; or
●
voting at the 2021
Annual Meeting.
If you
hold your shares beneficially in street name, you may change your
vote by submitting new voting instructions to your bank, broker or
nominee following the instructions they provide.
What happens if I do not give specific voting
instructions?
Stockholders of record.
If you are a
stockholder of record and you sign and return a proxy card without
giving specific voting instructions, then the proxy holders will
vote your shares in the manner recommended by the Board on all
matters presented in this proxy statement and as the proxy holders
may determine in their discretion for any other matters properly
presented for a vote at the meeting.
Beneficial owners of shares held in
“street name.”
If you are a beneficial owner of
shares held in street name and do not provide the organization that
holds your shares with specific voting instructions, the
organization that holds your shares may generally vote on routine
matters but cannot vote on non-routine matters. If the organization
that holds your shares does not receive instructions from you on
how to vote your shares on a non-routine matter, the organization
that holds your shares will inform the inspector of election that
it does not have the authority to vote on this matter with respect
to your shares. This is referred to as a “broker
non-vote.”
4
Which ballot measures are considered “routine” or
“non-routine”?
The
election of directors (“Proposal 1”) is considered to
be a non-routine matter under applicable rules. A broker or other
nominee cannot vote without instructions on non-routine matters,
and therefore there may be broker non-votes on Proposal
1.
The
ratification of the appointment of RBSM as our independent
registered public accounting firm for 2021 (“Proposal
2”) is considered to be a routine matter under applicable
rules. A broker or other nominee may generally vote on routine
matters, and we do not expect there to be any broker non-votes with
respect to Proposal 2.
What is the quorum for the 2021 Annual Meeting?
The
presence, in person or by proxy, of the holders of not less than
one-third in voting power of the outstanding shares of stock
entitled to vote at the meeting is necessary for the transaction of
business at the 2021 Annual Meeting. This is called a
quorum.
What is the voting requirement to approve each of the
proposals?
The
following are the voting requirements for each
proposal:
●
Proposal 1:
Election of Directors. The five nominees receiving the highest
number of votes will be elected as directors.
●
Proposal 2:
Ratification of Appointment of Independent Registered Public
Accounting Firm. The Audit Committee’s appointment of RBSM as
our independent registered public accounting firm for 2021 will be
ratified if a majority in voting power of the shares of stock of
the Company which are present or represented by proxy and entitled
to vote thereon votes in favor of the proposal.
How are abstentions and broker non-votes treated?
Broker
non-votes and abstentions are counted for purposes of determining
whether a quorum is present at the 2021 Annual Meeting. However,
broker non-votes are not counted as votes cast for any non-routine
proposal considered at the 2021 Annual Meeting and, therefore, will
have no effect on the proposal regarding the election of directors.
We expect no broker non-votes on the routine proposal to appoint
RBSM as our independent registered public accounting firm for
2021.
Abstentions will be
counted as votes present and entitled to vote on the proposals
considered at the 2021 Annual Meeting and, therefore, will be
counted as votes against the proposal to appoint RBSM as our
independent registered public accounting firm for 2021. Abstentions
will have no effect on the proposal regarding the election of
directors.
Who pays for solicitation of proxies?
ENDRA
is paying the cost of soliciting proxies and will reimburse
brokerage firms and other custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses for sending proxy materials
to stockholders and obtaining their votes. In addition to
soliciting the proxies by mail, certain of our directors, officers
and regular employees, without compensation, may solicit proxies
personally or by telephone, facsimile and email.
5
Where can I find the voting results of the 2021 Annual
Meeting?
We will
announce voting results in a Current Report on Form 8-K filed with
the SEC within four business days following the
meeting.
How can I submit a proposal for the 2022 annual meeting of
stockholders?
Requirements for Stockholder Proposals to Be
Considered for Inclusion in the Company’s Proxy
Materials.
Stockholder proposals to be considered for
inclusion in the proxy statement and form of proxy relating to the
2022 annual meeting of stockholders must be received by December
30, 2021. In addition, all proposals will need to comply with Rule
14a-8 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), which lists the requirements for the
inclusion of stockholder proposals in company-sponsored proxy
materials. Stockholder proposals must be delivered to the
Company’s Secretary at 3600 Green Court, Suite 350, Ann
Arbor, Michigan 48105.
Requirements for Stockholder Proposals to Be
Brought Before the 2022 Annual Meeting of Stockholders.
Notice of any director nomination or other proposal that you intend
to present at the 2021 annual meeting of stockholders, but do not
intend to have included in the proxy statement and form of proxy
relating to the 2022 annual meeting of stockholders, must be
delivered to the Company’s Secretary at 3600 Green Court,
Suite 350, Ann Arbor, Michigan 48105, not earlier than the close of
business on February 8, 2022 and not later than the close of
business on March 10, 2022. In addition, your notice must set forth
the information required by our bylaws with respect to each
director nomination or other proposal that you intend to present at
the 2022 annual meeting of stockholders.
6
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following tables set forth certain information regarding beneficial
ownership of our voting stock as of April 22, 2021 by:
●
each person or
group of affiliated persons known by us to be the beneficial owner
of more than 5% of any class of our voting stock;
●
each named
executive officer included in the Summary Compensation Table
below;
●
each of our
directors;
●
each person
nominated to become director; and
●
all executive
officers, directors and nominees as a group.
Unless
otherwise noted below, the address of each person listed in the
tables is c/o ENDRA Life Sciences Inc. at 3600 Green Court, Suite
350, Ann Arbor, Michigan 48105. To our knowledge, each person
listed below has sole voting and investment power over the shares
shown as beneficially owned except to the extent jointly owned with
spouses or otherwise noted below.
Beneficial
ownership is determined in accordance with the rules of the SEC.
The information does not necessarily indicate ownership for any
other purpose. Under these rules, shares of stock which a person
has the right to acquire (
i.e.
, by the exercise of any option or
warrant) within 60 days after April 22, 2021 are deemed to be
beneficially owned and outstanding for purposes of calculating the
number of shares and the percentage beneficially owned by that
person. However, these shares are not deemed to be beneficially
owned and outstanding for purposes of computing the percentage
beneficially owned by any other person. The applicable percentages
of stock outstanding as of April 22, 2021 is based upon 41,640,168
shares of common stock and 141.397 shares of Series A Preferred
Stock outstanding on that date. We are not aware of
any 5% holders of our common stock as of April 22,
2021.
7
Beneficial Ownership of Common Stock
|
Name of Beneficial Owner
|
Shares of Common Stock Beneficially Owned
|
Percentage of Common Stock Beneficially Owned
|
|
Directors and Executive Officers
|
|
|
|
Francois
Michelon
|
723,325
(1)
|
1.7
%
|
|
Michael
Thornton
|
950,963
(2)
|
2.2
%
|
|
David
Wells
|
241,112
(3)
|
*
|
|
Louis
Basenese
|
115,735
(4)
|
*
|
|
Anthony
DiGiandomenico
|
499,212
(5)
|
1.2
%
|
|
Michael
Harsh
|
198,641
(6)
|
*
|
|
Alexander
Tokman
|
126,113
(7)
|
*
|
|
All
directors and executive officers as a group (8
persons)
|
2,739,366
|
6.3
%
|
_________________
*
Less than one
percent.
(1)
Consists
of 92,091 shares of common stock, 626,602 shares of common stock
issuable upon the exercise of options that are presently
exercisable or becoming exercisable within 60 days of April 22,
2021 and 4,632 shares of common stock issuable upon the exercise of
restricted warrants.
(2)
Consists
of 293,710 shares of common stock, 620,600 shares of common stock
issuable upon the exercise of options that are presently
exercisable or becoming exercisable within 60 days of April 22,
2021 and 36,653 shares of common stock issuable upon the exercise
of restricted warrants.
(3)
Consists of 104,789
shares of common stock, 128,792 shares of common stock issuable
upon the exercise of options that are presently exercisable
or becoming exercisable within 60 days
of April 22, 2021
and 7,531
shares of common stock issuable upon the exercise
of restricted warrants
.
(4)
Consists of 99,068
shares of common stock and 16,667 shares of common stock issuable
upon the exercise of options that are presently exercisable
or becoming exercisable within 60 days
of April 22, 2021
.
(5)
Consists
of 382,012 shares of common stock, 93,256 shares of common stock
issuable upon the exercise of options that are presently
exercisable or becoming exercisable within 60 days of April 22,
2021 and 23,944 shares of common stock issuable upon the exercise
of restricted warrants.
(6)
Consists
of 69,243 shares of common stock, 123,342 shares of common stock
issuable upon the exercise of options that are presently
exercisable or becoming exercisable within 60 days of April 22,
2021 and 6,056 shares of common stock issuable upon the exercise of
restricted warrants.
(7)
Consists
of 32,857 shares of common stock and 93,256 shares of common stock
issuable upon the exercise of options that are presently
exercisable or becoming exercisable within 60 days of April 22,
2021.
8
Beneficial Ownership of Series A Preferred Stock
|
Name of Beneficial Owner
|
Shares of Series A Preferred Stock Beneficially Owned
|
Percentage of Series A Preferred Stock Beneficially
Owned
|
|
Directors and Executive Officers
|
|
|
|
Francois
Michelon
|
-
|
*
|
|
Michael
Thornton
|
-
|
*
|
|
David
Wells
|
-
|
*
|
|
Michael
Harsh
|
-
|
*
|
|
Alexander
Tokman
|
-
|
*
|
|
Anthony
DiGiandomenico
|
-
|
*
|
|
All
directors and executive officers as a group (8
persons)
|
-
|
*
|
|
5% Stockholders
|
|
|
|
Donald Kendall
(1)
|
106.421
|
75.3
%
|
|
Mark R. Busch
(2)
|
17.488
|
12.4
%
|
|
Juan R. Rivero
(3)
|
17.488
|
12.4
%
|
_________________
*
Less than one
percent.
(1)
Mr. Kendall’s
address is 2000 Edwards Street, Suite B-100, Houston, TX
77007.
(2)
Shares
jointly owned with spouse. Mr. Busch’s address is 300 S.
Tryon St., Suite 1000, Charlotte, NC 28202.
(3)
Mr. Rivero’s
address is 14521 Jockey Circle, N. Davie, FL 33330.
9
PROPOSAL 1
—
ELECTION
OF DIRECTORS
The
Company’s Board of Directors currently consists of five
members. Upon the recommendation of the Corporate Governance and
Nominating Committee of our Board of Directors, the Board has
nominated the five current directors for election at the 2021
Annual Meeting to hold office until the next annual meeting of
stockholders or until his successor is duly elected and
qualified.
Shares
represented by all proxies received by the Board and not marked so
as to withhold authority to vote for any individual nominee will be
voted
FOR
the election of
the nominees named below. The Board knows of no reason why any
nominee would be unable or unwilling to serve, but if such should
be the case, proxies may be voted for the election of some other
person nominated by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE
FOR THE NOMINEES LISTED BELOW
The
following table sets forth the nominees to be elected at the 2021
Annual Meeting, the year such director was first elected as a
director, and the positions currently held by each director with
ENDRA.
|
Nominee’s or
Director’s Name
|
Year First Became Director
|
Position with the Company
|
|
Francois
Michelon
|
2015
|
Chief
Executive Officer and Chairman of the Board
|
|
Louis
J. Basenese
|
2020
|
Director
|
|
Anthony
DiGiandomenico
|
2013
|
Director
|
|
Michael
Harsh
|
2015
|
Director
|
|
Alexander
Tokman
|
2008
|
Director
|
INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR
DIRECTOR
Set
forth below is background information for each current director and
nominee for director, as well as information regarding additional
experience, qualifications, attributes or skills that led the Board
of Directors to conclude that such director or nominee should serve
on the Board.
Francois Michelon
, age 55, joined ENDRA
as Chief Executive Officer and Chairman of our board of directors
in 2015. He has over 20 years of healthcare technology experience
in general management, operations, strategy and marketing across
the diagnostic imaging, surgical instrument and dental
sectors.
From
2012 to 2014, Mr. Michelon served as Vice President of Global
Marketing for the 3i division of Biomet, Inc. (now Zimmer Biomet
Holdings, Inc.), a provider of oral reconstruction technologies,
where he was responsible for the upstream and downstream
development of the division’s global portfolio. From 2004 to
2011, Mr. Michelon served as Group Director of Global Services and
Visualization for Smith & Nephew plc’s Advanced Surgical
Devices division, where he led in the B2B service and capital
equipment sectors, and had responsibility over the financial
performance of these as well. From 1997 to 2004, Mr. Michelon
worked at GE Healthcare in a variety of global upstream and
downstream marketing roles.
10
Mr.
Michelon received an MBA from Carnegie-Mellon University and a BA
in Economics from the University of Chicago. He has also earned his
Six Sigma Black Belt certification.
Mr.
Michelon’s extensive industry and executive experience and
his intimate understanding of our business as our Chief Executive
Officer, position him well to serve as a member of our Board of
Directors.
Louis J. Basenese
, age 43, joined our
Board of Directors in April 2020. Mr. Basenese is the Founder and
Chief Analyst of Disruptive Tech Research, LLC, an independent
equity research and advisory firm focused exclusively on disruptive
technology companies that has served the investment management
community since June 2014. Since 2005, Mr. Basenese has also
managed The Basenese Group, LLC, a consulting business focused on
communications and business development for private and public
small and microcap businesses.
Mr.
Basenese holds an M.B.A. in Finance from the Crummer Graduate
School of Business at Rollins College and a Bachelor of Arts from
the University of Florida. He is also a former Series 7 and Series
66 license holder.
Mr.
Basenese’s experience with investor relations and business
development of technology-focused companies, as well as financing
and strategic planning, provides him with the qualifications and
skills necessary to serve as a member of our Board of
Directors.
Anthony DiGiandomenico
, age 54, joined
our Board of Directors in 2013. A co-founder of MDB Capital Group
LLC, Mr. DiGiandomenico focuses on corporate finance and capital
formation for growth-oriented companies. He has participated in all
areas of corporate finance including private capital, public
offerings, PIPEs, business consulting and strategic planning, and
mergers and acquisitions.
Mr.
DiGiandomenico has also worked on a wide range of transactions for
growth-oriented companies in biotechnology, nutritional
supplements, manufacturing and entertainment industries. Prior to
forming MDB Capital Group LLC in 1997, Mr. DiGiandomenico served as
President and CEO of the Digian Company, a real estate development
company. Mr. DiGiandomenico has also served on the board of
directors of Cue Biopharma, Inc., an immunotherapy company, and
currently serves on the board of directors of Provention Bio, Inc.,
a clinical-stage biopharmaceutical company.
Mr.
DiGiandomenico holds an MBA from the Haas School of Business at the
University of California, Berkeley and a BS in Finance from the
University of Colorado.
Mr.
DiGiandomenico’s financial expertise, general business acumen
and significant executive leadership experience position him well
to make valuable contributions to our Board of
Directors.
Michael Harsh
, age 66, joined our Board
of Directors in 2015. He is a co-founder and Chief Product Officer
of Terapede Systems, a digital X-ray startup that focuses on
developing an ultra-high resolution medical flat panel X-ray
detector. He co-founded Terapede in 2015. Prior to Terapede, Mr.
Harsh had a 36-year career with General Electric
(“GE”). He held numerous positions within GE and served
as Vice President and Chief Technology Officer of GE Healthcare, a
multi-billion dollar division of GE, where he led its global
science and technology organization and research and development
teams in diagnostics, healthcare IT and life sciences. In 2004, Mr.
Harsh was named Global Technology Leader – Imaging
Technologies at the GE Global Research Center, where he led the
research for imaging technologies across the company as well as the
research associated with computer visualization and superconducting
systems.
11
Additionally, Mr.
Harsh is a member of the boards of directors of Compute Health
(NYSE: CPUH-UN), Imagion Biosystems (IBX.AX), and EmOpti, as well
as a member of the Radiological Society of North America (RSNA),
Research & Education Foundation Board of Trustees. He had
previously served as a director for FloDesign Sonics until its
acquisition by MilliporeSigma, a division of the Merck
Group. He is also a McKinsey Senior Advisor and a consultant
in the medical device industry.
Mr.
Harsh is a graduate of Marquette University, where he earned a
bachelor’s degree in Electrical Engineering. He holds
numerous U.S. patents in the field of medical imaging and
instrumentation. In 2008, Mr. Harsh was elected to the American
Institute for Medical and Biological Engineering College of
Fellows for his significant contributions to the medical and
biological engineering field.
Mr.
Harsh’s extensive industry, executive and board experience
position him well to serve on our Board of Directors.
Alexander Tokman
, age 59, joined our
Board of Directors in 2008. He currently serves as a President of
iUNU, a privately held AI/Computer Vision SaaS company and most
recently was a CEO-in-Residence at the Allen Institute for
Artificial Intelligence (AI2), from 2019 to 2020.
Mr.
Tokman served as President, Chief Executive Officer, and a director
of Microvision, Inc., a publicly traded laser beam scanning
projection and imaging company, from January 2006 to December
2017.
Previously, Mr.
Tokman completed a 10+ year tenure as an executive with GE
Healthcare, where he led several global businesses, most recently
as a General Manager of its Global Molecular Imaging and
Radiopharmacy multi-technology business unit from 2003 to
2005.
Between
1995 and 2003, Mr. Tokman served in various leadership roles at GE
Healthcare, where he led the definition and successful
commercialization of several product segments, including PET/CT,
which generated over $500 million of revenue within the first three
years of its launch.
Mr.
Tokman is a certified Six Sigma and Design for Six Sigma (DFSS)
Black Belt and Master Black Belt and as one of General Electric
Company’s Six Sigma pioneers, he drove the quality culture
change across GE Healthcare in the late 1990s. From 1989 to 1995,
Mr. Tokman served as development programs lead and a head of
Industry and Regional Development at Tracor Applied Sciences. Mr.
Tokman has both an MS and BS in Electrical Engineering from the
University of Massachusetts, Dartmouth.
Mr.
Tokman’s industry expertise and significant executive
leadership and director experience position him well to make
valuable contributions to our Board of Directors.
12
INFORMATION CONCERNING EXECUTIVE OFFICERS
Set
forth below is background information relating to our executive
officers:
|
Name
|
Age
|
Position
|
|
Francois
Michelon
|
55
|
Chief
Executive Officer and Chairman
|
|
Michael
Thornton
|
52
|
Chief
Technology Officer
|
|
David
Wells
|
58
|
Chief
Financial Officer
|
|
Renaud
Maloberti
|
52
|
Chief
Commercial Officer
|
Francois Michelon
is discussed above
under
Information Concerning
Directors and Nominees for Director.
Michael Thornton
joined ENDRA as Chief
Technology Officer in 2007. Prior to that, Mr. Thornton was a
founder and President of Enhanced Vision Systems Corp., or EVS, a
developer and supplier of medical imaging equipment to the
pharmaceutical, biotech, and academic sectors.
In
2002, EVS was acquired by General Electric Company and was
integrated into the Functional and Molecular Imaging business unit
of GE Medical Systems (now GE Healthcare, a subsidiary of General
Electric Company). Following the acquisition of EVS by GE Medical
Systems, Mr. Thornton held a number of positions at GE Healthcare,
including Sales Manager, Global Product Manager, and Site Leader.
He was a member of the leadership team that expanded the
pre-clinical imaging business to include: computed tomography,
optical, and positron emission tomography imaging technologies,
with global market reach. He is also a founder of Volumetrics
Medical Corp., a developer and manufacturer of quality assurance
devices for diagnostic imaging.
Prior
to founding EVS, Mr. Thornton developed medical imaging related
technologies at the Robarts Research Institute (London, Ontario,
Canada) for which he obtained an MSc in Electrical Engineering from
the University of Western Ontario. Mr. Thornton also holds a BASc
in Electrical Engineering from the University of Toronto and is a
member of the American Association of Physicists in
Medicine.
David Wells
became our Chief Financial
Officer on an interim basis in 2014 and on a continuing basis
in 2017. He possesses over 30 years of experience in finance,
operations and administrative positions. While mainly focused on
technology companies, Mr. Wells has also worked in the water
treatment, supply-chain management, manufacturing and professional
services industries.
Mr.
Wells is the founder of Wells Compliance Group, a technology-based
services firm supporting the financial reporting needs of publicly
traded companies and privately held firms whose investor or
shareholder base requires timely GAAP-compliant financial
reporting. Through StoryCorp Consulting (d/b/a/ Wells Compliance
Group), Mr. Wells consults with several emerging growth companies.
From 2009 to 2013, he was the President, CFO and a Director of
Sionix Corporation, a publicly traded water treatment
company.
Mr.
Wells holds an MBA from Pepperdine University and a BS in Finance
and Entrepreneurship from Seattle Pacific University.
13
Renaud Maloberti
joined ENDRA in May
2019 as our Chief Commercial Officer. He brings over 20 years of
global commercial experience in medical imaging, including 12 years
in ultrasound. Most recently, Mr. Maloberti was Chief Commercial
Officer of Bionik Laboratories, a company in the AI-enhanced
rehabilitation robotics market. From 2012 to 2018, Mr. Maloberti
held various positions at FujiFilm SonoSite Inc., most recently as
vice president and general manager of the SonoSite High Frequency
division, where he led the development and launch of the world's
first ultra-high frequency ultrasound and led the division through
double-digit revenue growth for six years.
Mr.
Maloberti previously served as general manager, Americas for BK
Medical Systems, the ultrasound subsidiary of Analogic Corporation
(Nasdaq: ALOG). Earlier in his career, Mr. Maloberti worked at
Draeger Medical Systems, a leader in patient monitoring and
healthcare IT systems. Mr. Maloberti also spent 10 years in sales
and marketing roles at GE Healthcare, a global leader in diagnostic
imaging, healthcare IT systems and services.
Maloberti holds an
M.B.A. in global marketing from Babson College and a
bachelor’s degree in International Finance from ESLSCA
Business School in Paris, France. He is fluent in English and
French.
14
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
Board
Independence
The
Board of Directors has determined that each of Mr. Basenese, Mr.
DiGiandomenico, Mr. Harsh and Mr. Tokman is an independent director
within the meaning of the director independence standards of The
Nasdaq Stock Market (“Nasdaq”). Furthermore, the Board
has determined that all of the members of the Audit Committee,
Compensation Committee and Corporate Governance and Nominating
Committee are independent within the meaning of the director
independence standards of Nasdaq and the rules of the SEC
applicable to each such committee. In reaching this determination,
the Board considered Mr. Tokman’s providing advisory services
to the Company with respect to potential strategic partnerships.
Mr. Tokman was compensated for the services at a rate of $10,000
per month during September through December 2020, for an aggregate
of $40,000. After consideration, the Board determined that this
arrangement did not impact Mr. Tokman’s ability to serve as
an independent director.
Board
Leadership Structure
We have
a Chairman of the Board who presides at all meetings of the Board.
Currently, Mr. Michelon serves as the Chairman of the Board and
Chief Executive Officer. ENDRA has no fixed policy with respect to
the separation of the offices of the Chairman of the Board and
Chief Executive Officer. Our bylaws permit these positions to be
held by the same person, and the Board believes that it is in the
best interests of the Company to retain flexibility in determining
whether to separate or combine the roles of Chairman and Chief
Executive Officer based on our circumstances. The Board has
determined that it is appropriate for Mr. Michelon to serve as both
Chairman and Chief Executive Officer because combining the roles of
Chairman and Chief Executive Officer: (1) enhances the alignment
between the Board and management in strategic planning and
execution as well as operational matters, (2) avoids the confusion
over roles, responsibilities and authority that can result from
separating the positions, and (3) streamlines board process in
order to conserve time for the consideration of the important
matters the Board needs to address. Further, four of our five
current Board members have been deemed to be independent by our
Board; therefore, we believe our Board structure provides
sufficient independent oversight of our management. The Board has
not named a lead independent director.
Communications
with the Board of Directors
Security holders
who wish to communicate directly with the Board, the independent
directors of the Board or any individual member of the Board may do
so by sending such communication by certified mail addressed to the
Chairman of the Board, the entire Board of Directors, to the
independent directors as a group or to the individual director or
directors, in each case, c/o Secretary, ENDRA Life Sciences Inc.,
3600 Green Court, Suite 350, Ann Arbor, Michigan 48105. The
Secretary reviews any such security holder communication and
forwards relevant communications to the addressee.
Policies
Regarding Director Nomination
s
The
Board has delegated to its Corporate Governance and Nominating
Committee responsibility for establishing membership criteria for
the Board, identifying individuals qualified to become directors
consistent with such criteria and recommending the director
nominees.
15
The
Corporate Governance and Nominating Committee is responsible for,
among other things: (1) recommending to the Board persons to serve
as members of the Board and as members of and chairpersons for the
committees of the Board, (2) considering the recommendation of
candidates to serve as directors submitted from the stockholders of
the Company, (3) assisting the Board in evaluating the
Board’s and its committees’ performance, (4) advising
the Board regarding the appropriate board leadership structure for
the Company, (5) reviewing and making recommendations to the Board
on corporate governance and (6) reviewing the size and composition
of the Board and recommending to the Board any changes it deems
advisable.
The
Board seeks members from diverse professional backgrounds who
combine a broad spectrum of relevant industry and strategic
experience and expertise that, in concert, offer us and our
stockholders diversity of opinion and insight in the areas most
important to us and our corporate mission. The Corporate Governance
and Nominating Committee has not set specific, minimum
qualifications that must be met by director candidates. Rather, in
determining candidates to recommend to the Board to serve as
members of the Board, the Corporate Governance and Nominating
Committee will consider, among other things, whether a candidate is
of the highest ethical character and shares the Company’s
values and whether the candidate’s reputation, both personal
and professional, in consistent with the image and reputation of
the Company. In addition, nominees for director are selected to
have complementary, rather than overlapping, skill sets. However,
the Corporate Governance and Nominating Committee does not have a
formal policy concerning the diversity of the Board.
Procedures for Recommendation of Director Nominees by
Stockholder
s
The
Corporate Governance and Nominating Committee considers individuals
properly recommended by stockholders in the same manner as it
considers director nominees identified by other means. To submit a
recommendation to the Corporate Governance and Nominating Committee
for director nominee candidates, a stockholder must make such
recommendation in writing and include:
●
as to the
stockholder making the recommendation and the beneficial owner, if
any, on whose behalf the nomination is made:
o
the name and
address of such stockholder, as they appear on the Company’s
books, and of such beneficial owner;
o
the class or series
and number of shares of capital stock of the Company which are
owned beneficially and of record by such stockholder and such
beneficial owner;
o
a description of
any agreement, arrangement or understanding with respect to the
nomination or proposal between or among such stockholder and/or
such beneficial owner, any of their respective affiliates or
associates, and any others acting in concert with any of the
foregoing, including, in the case of a nomination, the
nominee;
o
description of all
arrangements or understandings among the stockholder and the
candidate and any other person or persons pursuant to which the
recommendation is being made;
16
o
a representation
that the stockholder is a holder of record of stock of the Company
entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to propose such business or
nomination;
o
a representation
whether the stockholder or the beneficial owner, if any, intends or
is part of a group which intends (a) to deliver a proxy statement
and/or form of proxy to holders of at least the percentage of the
Company’s outstanding capital stock required to approve or
adopt the proposal or elect the nominee and/or (b) otherwise to
solicit proxies or votes from stockholders in support of such
proposal or nomination; and
o
any other
information relating to such stockholder and beneficial owner, if
any, required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies
for, as applicable, the proposal and/or for the election of
directors in an election contest pursuant to and in accordance with
Section 14(a) of the Exchange Act and the rules and regulations
promulgated thereunder; and
●
as to each person
whom the stockholder proposes to nominate for election as a
director:
o
full biographical
information concerning the director candidate, including a
statement about the candidate’s qualifications;
o
all other
information regarding each director candidate proposed by such
stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the
SEC;
o
a description of
all relationships between the candidate and any of the
Company’s competitors, customers, suppliers, labor unions or
other persons with special interests regarding the Company;
and
o
such person’s
written consent to being named in the proxy statement as a nominee
and to serving as a director if elected.
Recommendations
must be sent to the Chairperson of the Corporate Governance and
Nominating Committee, c/o Secretary, ENDRA Life Sciences Inc., 3600
Green Court, Suite 350, Ann Arbor, Michigan 48105. The Secretary
must receive any such recommendation for nomination not later than
the close of business on the 90th day nor earlier than the close of
business on the 120th day prior to the first anniversary of the
date of the preceding year’s annual meeting of stockholders;
provided, however, that with respect to a special meeting of
stockholders called by us for the purpose of electing directors to
the Board of Directors, the Secretary must receive any such
recommendation not earlier than the 120th day prior to such special
meeting nor later than the later of (1) the close of business on
the 90th day prior to such special meeting or (2) the close of
business on the 10th day following the day on which a public
announcement is first made regarding such special meeting. We will
promptly forward any such nominations to the Corporate Governance
and Nominating Committee. Once the Corporate Governance and
Nominating Committee receives a recommendation for a director
candidate, such candidate will be evaluated in the same manner as
other candidates and a recommendation with respect to such
candidate will be delivered to the Board of Directors.
17
Policy
Governing Director Attendance at Annual Meetings of
Stockholders
Each
director is encouraged to attend the 2021 Annual Meeting of
stockholders either in person or telephonically. One of our six
directors on the Board at the time attended last year’s
annual meeting either in-person or telephonically.
Code
of Business Conduct and Ethics
We have
in place a Code of Business Conduct and Ethics (the “Code of
Ethics”) that applies to all of our directors, officers and
employees. The Code of Ethics is designed to deter wrongdoing and
to promote:
●
honest and ethical
conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;
●
full, fair,
accurate, timely and understandable disclosure in reports and
documents that we file with, or submit to, the SEC and in other
public communications that we make;
●
compliance with
applicable governmental laws, rules and
regulations;
●
the prompt internal
reporting of violations of the Code of Ethics to an appropriate
person identified in the Code of Ethics; and
●
accountability for
adherence to the Code of Ethics.
A
current copy of the Code of Ethics is available at
www.endrainc.com. A copy may also be obtained, free of charge, from
us upon a request directed to ENDRA Life Sciences, Inc., 3600 Green
Court, Suite 350, Ann Arbor, Michigan 48105, attention: Investor
Relations. We intend to disclose any amendments to or waivers of a
provision of the Code of Ethics required to be disclosed by
applicable SEC rules by posting such information on our website
available at www.endrainc.com and/or in our public filings with the
SEC.
18
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board
of Directors
Our
bylaws state that the number of directors constituting the entire
Board of Directors shall be determined by resolution of the Board.
The Board has the authority to increase the number of directors,
fill any vacancies on the Board and to decrease the number of
directors. The number of directors currently fixed by our Board is
five.
Our
Board of Directors met four times during the year ended December
31, 2020. No director attended less than 75 percent of all meetings
of the Board and applicable committee meetings in 2020 held during
the period for which he was a director. The Board of Directors
currently has standing Audit, Compensation and Corporate Governance
and Nominating Committees. The Board and each standing committee
retain the authority to engage its own advisors and consultants.
Each standing committee has a charter that has been approved by the
Board of Directors. A copy of each committee charter is available
at www.endrainc.com. Each committee reviews the appropriateness of
its charter annually or at such other intervals as such committee
determines.
The
following table sets forth the current members of the Audit,
Compensation and Corporate Governance and Nominating Committees of
the Board:
|
Name
|
Audit
|
Compensation
|
Corporate Governance and Nominating
|
|
Louis
J. Basenese
|
X
|
X
|
|
|
Anthony
DiGiandomenico
|
Chair
|
X
|
|
|
Michael
Harsh
|
X
|
X
|
Chair
|
|
Francois
Michelon
|
|
|
|
|
Alexander
Tokman
|
|
Chair
|
X
|
Committees
Audit Committee
. Our Audit Committee
consists of Mr. Basenese, Mr. DiGiandomenico, and Mr. Harsh. The
Board of Directors has determined that each member of the Audit
Committee is independent within the meaning of the Nasdaq director
independence standards and applicable rules of the SEC for audit
committee members. The Board of Directors has elected Mr.
DiGiandomenico as Chairperson of the Audit Committee and has
determined that he qualifies as an “audit committee financial
expert” under the rules of the SEC. The Audit Committee is
responsible for assisting the Board of Directors in fulfilling its
oversight responsibilities with respect to financial reports and
other financial information. The Audit Committee (1) reviews,
monitors and reports to the Board of Directors on the adequacy of
the Company’s financial reporting process and system of
internal controls over financial reporting, (2) has the ultimate
authority to select, evaluate and replace the independent auditor
and is the ultimate authority to which the independent auditors are
accountable, (3) in consultation with management, periodically
reviews the adequacy of the Company’s disclosure controls and
procedures and approves any significant changes thereto, (4)
provides the audit committee report for inclusion in our proxy
statement for our annual meeting of stockholders and (5)
recommends, establishes and monitors procedures for the receipt,
retention and treatment of complaints relating to accounting,
internal accounting controls or auditing matters and the receipt of
confidential, anonymous submissions by employees of concerns
regarding questionable accounting or auditing matters. The Audit
Committee met four times in 2020.
19
Compensation Committee
. Our
Compensation Committee presently consists of Mr. Basenese, Mr.
DiGiandomenico, Mr. Harsh and Mr. Tokman, each of whom is a
non-employee director as defined in Rule 16b-3 of the Exchange Act.
The Board has also determined that each member of the Compensation
Committee is also an independent director within the meaning of
Nasdaq’s director independence standards. Mr. Tokman serves
as Chairperson of the Compensation Committee. The Compensation
Committee (1) discharges the responsibilities of the Board of
Directors relating to the compensation of our directors and
executive officers, (2) oversees the Company’s procedures for
consideration and determination of executive and director
compensation, and reviews and approves all executive compensation,
and (3) administers and implements the Company’s incentive
compensation plans and equity-based plans. The Compensation
Committee met two times in 2020.
Corporate Governance and Nominating
Committee
. Our Corporate Governance and Nominating Committee
consists of Mr. Harsh and Mr. Tokman. The Board of Directors has
determined that each member of the Corporate Governance and
Nominating Committee is an independent director within the meaning
of the Nasdaq director independence standards and applicable rules
of the SEC. Mr. Harsh serves as Chairperson of the Corporate
Governance and Nominating Committee. The Corporate Governance and
Nominating Committee (1) recommends to the Board of Directors
persons to serve as members of the Board of Directors and as
members of and chairpersons for the committees of the Board of
Directors, (2) considers the recommendation of candidates to serve
as directors submitted from the stockholders of the Company, (3)
assists the Board of Directors in evaluating the performance of the
Board of Directors and the Board committees, (4) advises the Board
of Directors regarding the appropriate board leadership structure
for the Company, (5) reviews and makes recommendations to the Board
of Directors on corporate governance and (6) reviews the size and
composition of the Board of Directors and recommends to the Board
of Directors any changes it deems advisable. The Corporate
Governance and Nominating Committee did not meet separately from
the Board of Directors in 2020 but acted by written
consent.
Role
of the Board of Directors in Risk Oversight
Enterprise risks
are identified and prioritized by management and the Board receives
periodic reports from the Company’s head of compliance
regarding the most significant risks facing the Company. These
risks include, without limitation, the following:
●
risks and exposures
associated with strategic, financial and execution risks and other
current matters that may present material risk to our operations,
plans, prospects or reputation.
●
risks and exposures
associated with financial matters, particularly financial
reporting, tax, accounting, disclosure, internal control over
financial reporting, financial policies, investment guidelines and
credit and liquidity matters.
●
risks and exposures
relating to corporate governance, and management and director
succession planning. and
●
risks and exposures
associated with leadership assessment, and compensation programs
and arrangements, including incentive plans
.
20
REPORT OF THE AUDIT COMMITTEE
The
Audit Committee is comprised of Louis Basenese, Anthony
DiGiandomenico and Michael Harsh. None of the current or former
members of the Audit Committee is an officer or employee of the
Company, and the Board has determined that each member of the Audit
Committee meets the independence requirements promulgated by The
Nasdaq Stock Market and the SEC, including Rule 10A-3(b)(1)
under the Exchange Act.
The
Audit Committee oversees the Company’s financial reporting
process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the
reporting process, including the systems of internal controls and
the certification of the integrity and reliability of the
Company’s internal controls procedures. In fulfilling its
oversight responsibilities, the Audit Committee has reviewed the
Company’s audited financial statements included in the Annual
Report on Form 10-K for the fiscal year ended December 31, 2020,
and has discussed them with both management and RBSM LLP
(“RBSM”), the Company’s independent registered
public accounting firm. The Audit Committee has also discussed with
the independent registered public accounting firm the matters
required to be discussed by the Auditing Standard No. 1301,
Communications with Audit
Committees
, as adopted by the Public Company Accounting
Oversight Board. The Audit Committee has reviewed permitted
services under rules of the SEC as currently in effect and
discussed with RBSM its independence from management and the
Company, including the matters in the written disclosures and the
letter from the independent registered public accounting firm
required by the applicable requirements of the Public Company
Accounting Oversight Board regarding the independent
accountant’s communications with the Audit Committee
concerning independence. The Audit Committee has also considered
and discussed the compatibility of non-audit services provided by
RBSM with that firm’s independence.
Based
on its review of the financial statements and the aforementioned
discussions, the Audit Committee concluded that it would be
reasonable to recommend, and on that basis did recommend, to the
Board of Directors that the audited financial statements be
included in the Company’s Annual Report.
Respectfully
submitted by the Audit Committee.
|
|
THE
AUDIT COMMITTEE:
Louis
Basenese
Anthony
DiGiandomenico, Chair
Michael
Harsh
|
21
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND
OFFICERS
As a
“smaller reporting company,” we have opted to comply
with scaled executive and director compensation disclosure rules
applicable to “smaller reporting
companies.”
Our
compensation philosophy is to offer our named executive officers
(as defined below) compensation and benefits that are competitive
and meet our goals of attracting, retaining and motivating highly
skilled management, which is necessary to achieve our financial and
strategic objectives and create long-term value for our
stockholders. We believe the levels of compensation we provide
should be competitive, reasonable and appropriate for our business
needs and circumstances. Except as described below, the principal
elements of our named executive officer compensation program for
2019 and 2020 included base salary and long-term equity
compensation in the form of stock options. We believe successful
long-term Company performance is more critical to enhancing
stockholder value than short-term results. For this reason and to
conserve cash and better align the interests of management and our
stockholders, we emphasize long-term performance-based equity
compensation over base annual salaries.
The
following table sets forth information concerning the compensation
earned by the individual that served as our Principal Executive
Officer during 2020 and our two most highly compensated executive
officers other than the individual who served as our Principal
Executive Officer during 2020, determined in accordance with SEC
rules (collectively, the “named executive
officers”):
Summary Compensation Table
|
Name and
Principal Position
|
Year
|
Salary
($)(1)
|
Option Awards
($)(2)
|
Non-equity Incentive Plan Compensation ($)(3)
|
All Other Compensation ($)(4)
|
TOTAL ($)
|
|
Francois
Michelon
|
2020
|
377,441(5)
|
--
|
133,310
|
587
|
511,338
|
|
Chief Executive Officer
|
2019
|
352,763(6)
|
514,618
|
111,935
|
--
|
979,316
|
|
Michael
Thornton
|
2020
|
280,832(7)
|
--
|
82,544(8)
|
392
|
363,768
|
|
Chief Technology Officer
|
2019
|
265,288(9)
|
484,272
|
61,478
|
--
|
811,038
|
|
David
Wells
|
2020
|
244,054(10)
|
30,497
|
54,936
|
1,519
|
331,006
|
|
Chief Financial Officer
|
2019
|
179,514(11)
|
189,935
|
48,300
|
--
|
417,749
|
(1)
As a
cash-conserving measure taken in light of the adverse economic
conditions caused by the COVID-19 pandemic, in April 2020 the
Company reduced the cash salaries of members of management by 33%
for the remainder of 2020, including the salaries of its named
executive officers. In lieu of cash, the Company paid this portion
of management salaries in the form of restricted stock units
(“RSUs”) that vested over the remainder of the year.
The amounts shown in this column indicate the grant date fair value
of RSU awards granted in the subject year computed in accordance
with FASB ASC Topic 718. For additional information regarding the
assumptions made in calculating these amounts, see note 8 to our
audited financial statements included in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020.
22
(2)
The amounts shown
in this column indicate the grant date fair value of option awards
granted in the subject year computed in accordance with FASB ASC
Topic 718. For additional information regarding the assumptions
made in calculating these amounts, see notes 2 and 8 to our audited
financial statements included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020. The shares underlying
these option awards vest and become exercisable in three equal
annual installments beginning on the first anniversary of their
respective grant dates.
(3)
Amounts paid
pursuant to our annual incentive program were previously reported
in the “Bonus” column for the year in which they were
paid. We have since concluded that it is more appropriate to
include such amounts in the “Non-equity Incentive Plan
Compensation” column for the year in which they were
earned.
(4)
Represents
insurance premiums paid by the Company with respect to life
insurance for the benefit of the named executive
officer.
(5)
$86,145 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of cash salary.
(6)
As of March 25,
2019, Mr. Michelon’s annual salary was raised from $345,000
to $355,350.
(7)
$67,572 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of cash salary.
(8)
$45,858 of the
amount shown reflects the grant date fair value of RSUs accepted by
Mr. Thornton in lieu of the cash bonus owed to him under our annual
incentive program.
(9)
As of March 25,
2019, Mr. Thornton’s annual salary was raised from $260,000
to $267,800.
(10)
$55,757 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of cash salary.
(11)
Amounts paid in
2019 until we entered into an employment agreement with Mr. Wells
effective May 13, 2019 represent fees paid pursuant to a consulting
agreement with StoryCorp Consulting (d/b/a Wells Compliance Group).
As of May 13, 2019, Mr. Wells’ annual salary was established
as $230,000.
Employment Agreements and Change of Control
Arrangements
The
following is a summary of the employment arrangements with our
named executive officers.
Francois Michelon
.
Effective May 12, 2017, the Company entered into an amended and
restated employment agreement with Francois Michelon, our Chief
Executive Officer and Chairman of the Board of Directors, which
agreement was amended on December 27, 2019. Mr. Michelon’s
employment with the Company is “at will” and may be
terminated by him or the Company at any time and for any reason.
Pursuant to the employment agreement, Mr. Michelon receives an
annual base salary that is subject to adjustment at the Board of
Directors’ discretion. Effective March 25, 2019, the Board
approved an increase in Mr. Michelon’s salary to $355,350.
Effective April 9, 2020, as a cash-saving measure in light of the
economic downturn caused by the COVID-19 pandemic, the Board of
Directors reduced Mr. Michelon’s salary by 33% for the
remainder of 2020 and issued 123,064 RSUs in lieu thereof that
vested in 2020. Mr. Michelon is also eligible for an annual cash
bonus based upon achievement of performance-based objectives
established by the Board of Directors.
23
Pursuant to the
employment agreement, in connection with the closing of our initial
public offering in May 2017, Mr. Michelon was granted options to
purchase an aggregate of 339,270 shares of common stock (the
“Michelon IPO Award”). The Michelon IPO Award vested in
three equal annual installments beginning on May 12, 2018 and has
an exercise price of $5.00 per share with respect to 307,310 shares
of common stock and $4.55 per share with respect to 31,960 shares
of common stock.
If Mr.
Michelon’s employment is terminated by the Company without
cause (as defined in the 2016 Plan) or if Mr. Michelon resigns for
good reason (as defined in the employment agreement), Mr. Michelon
will be entitled to receive, subject to his execution of a standard
release agreement, 12 months’ continuation of his current
base salary and a lump sum payment equal to 12 months of continued
healthcare coverage (or 24 months’ continuation of his
current base salary and a lump sum payment equal to 24 months of
continued healthcare coverage if such termination occurs within one
year following a change in control).
Under
his employment agreement, Mr. Michelon is eligible to receive
benefits that are substantially similar to those of the
Company’s other senior executive officers.
Michael Thornton
.
Effective May 12, 2017, the Company entered into an amended and
restated employment agreement with Michael Thornton, our Chief
Technology Officer, which agreement was amended on December 27,
2019. The employment agreement provides that Mr. Thornton’s
employment with the Company is “at will” and may be
terminated by him or the Company at any time and for any reason.
Pursuant to the employment agreement, Mr. Thornton receives an
annual base salary that is subject to adjustment at the Board of
Directors’ discretion. Effective March 25, 2019, the Board
approved an increase in Mr. Thornton’s salary to $267,800.
Effective April 9, 2020, as a cash-saving measure in light of the
economic downturn caused by the COVID-19 pandemic, the Board of
Directors reduced Mr. Thornton’s salary by 33% for the
remainder of 2020 and issued 96,213 RSUs in lieu thereof that
vested in 2020. Mr. Thornton is also eligible for an annual cash
bonus based upon achievement of performance-based objectives
established by the Board of Directors. Pursuant to the employment
agreement, in connection with the closing of our initial public
offering in May 2017, Mr. Thornton was granted options to purchase
an aggregate 345,298 shares of common stock (the “Thornton
IPO Award”). The Thornton IPO Award vested in three equal
annual installments beginning on May 12, 2018 and has an exercise
price of $5.00 per share with respect to 307,310 shares of common
stock and $4.55 per share with respect to 31,960 shares of common
stock.
If Mr.
Thornton’s employment is terminated by the Company without
cause (as defined in the 2016 Plan) or if Mr. Thornton resigns for
good reason (as defined in the employment agreement), Mr. Thornton
will be entitled to receive, subject to his execution of a standard
release agreement, 12 months’ continuation of his current
base salary and a lump sum payment equal to 12 months of continued
healthcare coverage (or 24 months’ continuation of his
current base salary and a lump sum payment equal to 24 months of
continued healthcare coverage if such termination occurs within one
year following a change in control).
Under
his employment agreement, Mr. Thornton is eligible to receive
benefits that are substantially similar to those of the
Company’s other senior executive officers.
24
David Wells
. On May
13, 2019, the Company entered into an employment agreement with
David Wells that provides for an annual base salary of $230,000 and
eligibility for an annual cash bonus to be paid based on attainment
of Company and individual performance objectives to be established
by the Board of Directors. Effective April 9, 2020, as a
cash-saving measure in light of the economic downturn caused by the
COVID-19 pandemic, the Board of Directors reduced Mr. Wells’
salary by 33% for the remainder of 2020 and issued 79,653 RSUs in
lieu thereof that vested in 2020. The employment agreement also
provides for eligibility to receive benefits substantially similar
to those of the Company’s other senior executive
officers.
Pursuant to the
employment agreement, on May 13, 2019, Mr. Wells was granted stock
options to purchase 56,000 shares of the Company’s common
stock. The stock options have an exercise price of $1.38 per share,
and vest in three equal annual installments beginning on the first
anniversary of the grant date. Upon termination without cause (as
defined in the 2016 Plan) that is not the result of death or
disability, any portion of the award scheduled to vest within 12
months will automatically vest, and upon termination without cause
that is not the result of death or disability within 12 months
following a change in control, the entire unvested portion of the
award will automatically vest. Upon termination for any other
reason, the entire unvested portion of the award will
terminate.
Mr.
Wells’ employment agreement superseded a consulting agreement
between the Company and StoryCorp dated May 12, 2017, pursuant to
which Mr. Wells provided services to the Company as its Chief
Financial Officer. Pursuant to the consulting agreement, the
Company paid to StoryCorp a monthly fee of $9,000. In June 2018,
this monthly fee was increased to $9,540. Additionally, pursuant to
the consulting agreement, the Company granted to Mr. Wells a stock
option to purchase 15,000 shares of common stock in connection with
the closing of our initial public offering, having an exercise
price per share equal to $5.00 and vesting in twelve equal
quarterly installments, and, on the anniversary of the date of the
consulting agreement, granted to Mr. Wells a stock option to
purchase the same number of shares of common stock with the same
terms.
Additionally, our
named executive officers are eligible to participate in our health
and welfare programs and 401(k) plan, and other benefit programs on
the same basis as other employees.
25
Outstanding Equity Awards at 2020 Fiscal Year End
The
following table provides information regarding equity awards held
by the named executive officers as of December 31,
2020.
|
|
Option
Awards
|
|||
|
Name
|
Number of
Securities Underlying Unexercised Options (#)
Exercisable
|
Number of
Securities Underlying Unexercised Options (#)
Unexercisable
|
Option Exercise
Price ($)
|
Option
Expiration Date
|
|
Francois
|
307,310
|
-
|
5.00
|
5/12/25
|
|
Michelon
|
31,960
|
-
|
4.55
|
5/12/25
|
|
|
83,333
|
41,667
(1)
|
2.25
|
12/13/26
|
|
|
203,998
|
407,996
(2)
|
0.90
|
12/11/29
|
|
Michael
|
313,338
|
-
|
5.00
|
5/12/25
|
|
Thornton
|
31,960
|
-
|
4.55
|
5/12/25
|
|
|
83,333
|
41,667
(1)
|
2.25
|
12/13/26
|
|
|
191,969
|
383,937
(2)
|
0.90
|
12/11/29
|
|
David
Wells
|
15,000
|
-
|
5.00
|
5/12/21
|
|
|
7,000
|
-
|
5.00
|
5/12/22
|
|
|
23,333
|
11,667
(3)
|
2.25
|
12/13/22
|
|
|
18,667
|
37,333
(4)
|
1.38
|
5/13/29
|
|
|
46,125
|
92,250
(5)
|
0.90
|
12/11/29
|
_________________
(1)
Represents unvested
portion of stock option award which vests in three equal annual
installments beginning on December 13, 2019.
(2)
Represents unvested
portion of stock option award which vests in three equal annual
installments beginning on December 11, 2020.
(3)
Represents unvested
portion of stock option award which vests in twelve equal quarterly
installments beginning on March 13, 2019.
(4)
Represents unvested
portion of stock option award which vests in three equal annual
installments beginning on May 13, 2020.
(5)
Represents unvested
portion of stock option award which vests in three equal annual
installments beginning on December 11, 2020.
26
Equity Compensation Plan Table
The
following table presents information on the Company’s equity
compensation plans as of December 31, 2020. All outstanding awards
relate to our common stock.
|
Plan
Category
|
Number of
Securities to Be Issued upon Exercise of Outstanding Options,
Warrants and Rights
(a)
|
Weighted-Average
Exercise Price of Outstanding Options, Warrants and
Rights
(b)
|
Number of
Securities Remaining Available for Future Issuance under Equity
Compensation Plans (Excluding Securities Reflected in Column
(a))
(c)
|
|
Equity compensation
plans approved by security holders
|
3,569,707
(1)
|
$
2.13
|
2,291,951
(2)
|
|
Equity compensation
plans not approved by security holders
|
—
|
—
|
—
|
|
Total
|
3,569,707
|
$
2.13
|
2,291,951
|
_________________
(1)
Consists of
outstanding stock options exercisable for shares of common stock
issued under our 2016 Omnibus Incentive Plan (as amended, the
“2016 Plan”), which amended and restated our Second
Amended and Restated 2013 Stock Incentive Plan.
(2)
On January 1, 2021,
as a result of an automatic increase to the pool of shares
available for issuance under the 2016 Plan on such date, the number
of shares available for future issuance under the 2016 Plan was
5,491,091 shares.
Director Compensation
Effective March 25,
2019, the Company adopted a non-employee director compensation
policy (the “Compensation Policy”) pursuant to which
each of our non-employee directors receives, upon his or her
initial election to the Board of Directors, a stock option
exercisable for 50,000 shares of common stock with a per share
exercise price equal to the closing price of the common stock on
the Nasdaq on the grant date. To make up for the fact that each of
the Company’s non-employee directors as of the effective date
of the Compensation Policy did not receive such a stock option upon
joining the Board, each such non-employee director received a stock
option exercisable for 50,000 shares of common stock on the
effective date of the Compensation Policy with a per share exercise
price equal to $3.09, the closing price of the common stock on the
Nasdaq on the grant date. All such stock options vest in three
equal annual installments beginning on the one-year anniversary of
the grant date. Under the policy, on the first trading day of each
calendar year, each non-employee director is awarded a stock option
exercisable for 12,000 shares of common stock, with a per share
exercise price equal to the closing price of the common stock on
the Nasdaq on the grant date, which becomes exercisable on the
first anniversary of its grant date. Additionally, pursuant to the
policy, each non-employee director is paid an annual cash retainer
of $40,000, prorated for partial years of service and paid
quarterly in arrears.
27
In
April 2020, as a cash-conserving measure taken in light of the
adverse economic conditions caused by the COVID-19 pandemic, the
Company amended the Compensation Policy to provide that its
non-employee directors’ annual retainers for the second,
third and fourth fiscal quarters of 2020 would be paid in in the
form of RSUs rather than cash. Such RSUs vested in three equal
quarterly installments on the last date of the fiscal quarter of
2020.
The
following table sets forth information with respect to compensation
earned by or awarded to each of our non-employee directors who
served on the Board of Directors during the fiscal year ended
December 31, 2020:
|
Name
|
Fees Earned or Paid in Cash ($)(1)
|
Option Awards ($)(2)
|
All Other Compensation ($)
|
Total ($)
|
|
Louis
Basenese
|
29,011
(3)
|
62,544
|
--
|
91,565
|
|
Anthony
DiGiandomenico
|
40,000
(4)
|
21,483
|
--
|
61,483
|
|
Dr.
Sanjiv Sam Gambhir
|
21,978
(5)
|
21,483
|
--
|
43,461
|
|
Michael
Harsh
|
40,000
(6)
|
21,483
|
--
|
61,483
|
|
Alexander
Tokman
|
40,000
(7)
|
21,483
|
40,000
(8)
|
101,483
|
(1)
As a
cash-conserving measure taken in light of the adverse economic
conditions caused by the COVID-19 pandemic, in April 2020 the
Company amended its Compensation Policy to provide that its
non-employee directors’ annual retainers for the second,
third and fourth fiscal quarters of 2020 would be paid in in the
form of RSUs rather than cash. Such restricted stock units issued
under the Director Compensation Policy will vest in three equal
quarterly installments on the last date of the fiscal quarter. The
amounts shown in this column indicate the grant date fair value of
RSU awards granted in the subject year computed in accordance with
FASB ASC Topic 718. For additional information regarding the
assumptions made in calculating these amounts, see note 8 to our
audited financial statements included in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020.
(2)
The amounts shown
in this column indicate the grant date fair value of option awards
granted in the subject year computed in accordance with FASB ASC
Topic 718. For additional information regarding the assumptions
made in calculating these amounts, see Notes 2 and 8 to the audited
financial statements included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020. The following table shows
the number of shares subject to outstanding option awards held by
each non-employee director as of December 31, 2020:
|
Name
|
Shares
Subject to Outstanding Option Awards (#)
|
|
Louis
Basenese
|
50,000
|
|
Anthony
DiGiandomenico
|
100,390
|
|
Dr.
Sanjiv Sam Gambhir
|
36,527
|
|
Michael
Harsh
|
105,281
|
|
Alexander
Tokman
|
105,057
|
28
(3)
The amount shown
reflects the grant date fair value of RSUs granted in lieu of a
portion of the annual retainer under the Compensation
Policy.
(4)
$30,000 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of a portion of the annual retainer under the Compensation
Policy.
(5)
$11,978 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of a portion of the annual retainer under the Compensation
Policy.
(6)
$30,000 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of a portion of the annual retainer under the Compensation
Policy.
(7)
$30,000 of the
amount shown reflects the grant date fair value of RSUs granted in
lieu of a portion of the annual retainer under the Compensation
Policy.
(8)
This amount
represents compensation paid to Mr. Tokman for advisory services
with respect to potential strategic partnerships. Mr. Tokman was
compensated at a rate of $10,000 per month for the services, which
he provided during September through December 2020.
29
PROPOSAL 2
—
RATIFICATION OF APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has appointed RBSM LLP
(“RBSM”) as
our
independent registered public accounting firm for the fiscal year
ending December 31, 2021. We are presenting this selection to our
stockholders for ratification at the 2021 Annual
Meeting.
RBSM
audited our financial statements for 2020. A representative of RBSM
is expected to be present at the 2021 Annual Meeting, have an
opportunity to make a statement if RBSM desires, and be able to
respond to appropriate questions submitted through
https://agm.issuerdirect.com/ndra prior to 5:00 p.m. Eastern Time
on June 4, 2021.
The
following table sets forth the aggregate fees billed or expected to
be billed by RBSM for audit and non-audit services in 2020 and
2019, including “out-of-pocket” expenses incurred in
rendering these services. The nature of the services provided for
each category is described following the table.
|
Fee
Category
|
2020
|
2019
|
|
Audit Fees
(1)
|
$
154,000
|
$
93,500
|
|
Audit-Related
Fees
|
‒
|
‒
|
|
Tax Fees
(2)
|
$
15,000
|
$
13,000
|
|
Total
|
$
169,000
|
$
106,500
|
_________________
(1)
Audit fees include
fees for professional services rendered for the audit of our annual
statements, quarterly reviews, consents and assistance with and
review of documents filed with the SEC.
(2)
Tax fees include
fees (or, for 2020, estimated fees) for professional services
rendered for tax compliance, tax advice and tax
planning.
Pre-Approval Policies and Procedures
The
Audit Committee has adopted a policy that requires that all
services to be provided by the Company’s independent public
accounting firm, including audit services and permitted non-audit
services, to be pre-approved by the Audit Committee. All audit and
permitted non-audit services provided by RBSM during 2020 were
pre-approved by the Audit Committee.
Vote Required for Approval
Ratification of the
appointment of
our
independent
registered public accounting firm requires the affirmative vote of
the holders of a majority of the voting power of the shares of
stock of the Company present in person (or virtually) or
represented by proxy and entitled to vote thereon. If our
stockholders fail to ratify the selection of RBSM as the
independent registered public accounting firm for 2021, the Audit
Committee will reconsider whether to retain that firm. Even if the
selection is ratified, the Audit Committee may, in its discretion,
direct the appointment of a different independent registered public
accounting firm at any time during the year.
Board Recommendation
The
Board of Directors unanimously recommends that the stockholders
vote
FOR
ratification of the
appointment of RBSM as our independent registered public accounting
firm for 2021.
30
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policy for Review of Related Person Transactions
The
Board of Directors has adopted a written policy with regard to
related person transactions, which sets forth our procedures and
standards for the review, approval or ratification of any
transaction required to be reported in our filings with the SEC or
in which one of our executive officers or directors has a direct or
indirect material financial interest, with limited exceptions. Our
policy is that the Corporate Governance and Nominating Committee
shall review the material facts of all related person transactions
(as defined in the related person transaction approval policy) and
either approve or disapprove of the entry into any related person
transaction. In the event that obtaining the advance approval of
the Corporate Governance and Nominating Committee is not feasible,
the Corporate Governance and Nominating Committee shall consider
the related person transaction and, if the Corporate Governance and
Nominating Committee determines it to be appropriate, may ratify
the related person transaction. In determining whether to approve
or ratify a related person transaction, the Corporate Governance
and Nominating Committee will take into account, among other
factors it deems appropriate, whether the related person
transaction is on terms comparable to those available from an
unaffiliated third-party under the same or similar circumstances
and the extent of the related person's interest in the
transaction.
Related Person Transactions
SEC
regulations define the related person transactions that require
disclosure to include any transaction, arrangement or relationship
in which the amount involved exceeds the lesser of (a) $120,000 or
(b) one percent of the average of the Company’s total assets
at year-end for the last two completed fiscal years in which it was
or is to be a participant and in which a related person had or will
have a direct or indirect material interest. A related person is:
(i) an executive officer, director or director nominee of the
Company, (ii) a beneficial owner of more than 5% of any class of
the Company’s voting securities, (iii) an immediate family
member of an executive officer, director or director nominee or
beneficial owner of more than 5% of any class of the
Company’s voting securities, or (iv) any entity that is owned
or controlled by any of the foregoing persons or in which any of
the foregoing persons has a substantial ownership interest or
control.
For the
period from January 1, 2019 through December 31, 2020, described
below are certain transactions or series of transactions between
the Company and certain related persons:
On
December 11, 2019, the Company closed a private placement offering
in which it sold an aggregate of 6,338.490 shares of its Series A
Convertible Preferred Stock (“Series A Preferred
Stock”) and 0.9 million shares of common stock, along with
warrants exercisable for an aggregate of 8.2 million shares of
common stock. Investors in the offering included (i) Mr.
DiGiandomenico, a director of the Company, who purchased 100,503
shares of common stock and warrants exercisable for 1005,503 shares
of common stock for $100,000, (ii) Mr. Michelon, a director and the
Company’s Chief Executive Officer, who purchased 4.372 shares
of Series A Preferred Stock and warrants exercisable for 5,026
shares of common stock for $5,000, (iii) Mr. Thornton, the
Company’s Chief Technology Officer, who purchased 43.719
shares of Series A Preferred Stock and warrants exercisable for
50,252 shares of common stock for $50,000, and (iv) Mr. Wells, the
Company’s Chief Financial Officer, who purchased 8.744 shares
of Series A Preferred Stock and warrants exercisable for 10,051
shares of common stock for $10,000.
31
DELINQUENT SECTION 16(a) REPORTS
Section
16(a) of the Exchange Act requires our directors, executive
officers and persons who own more than ten percent of a registered
class of our equity securities to file reports of ownership and
changes in ownership with the SEC. Such persons are required by SEC
regulations to furnish us with copies of all such filings. Based
solely on our review of the copies of the reports that we received
and written representations that no other reports were required, we
believe that our executive officers, directors and greater than 10%
stockholders complied with all applicable filing requirements on a
timely basis during 2020, except that Louis Basenese failed to
timely file one Form 4 with respect to an award of stock options
and RSUs on April 9, 2020.
OTHER BUSINESS
The Board
knows of no business that will be presented for consideration at
the 2021 Annual Meeting other than those items stated above. If any
other business should properly come before the 2021 Annual Meeting,
votes may be cast pursuant to proxies in respect to any such
business in the best judgment of the person or persons acting under
the proxies.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON JUNE 8, 2021
The
proxy statement and annual report to stockholders are available at
http://investors.endrainc.com/NDRA/sec_filings.
A copy of the Company’s Annual Report for the fiscal year
ended December 31, 2020 is available without charge upon written
request to: Secretary, ENDRA Life Sciences Inc., 3600 Green Court,
Ste. 350, Ann Arbor, Michigan 48105.
32
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ENDRA LIFE SCIENCES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 8, 2021 AT 10:00 AM EASTERN
TIME
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CONTROL ID:
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REQUEST ID:
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The undersigned stockholder of ENDRA LIFE SCIENCES
INC., a Delaware Corporation (the "Company"), hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement and hereby appoints Francois Michelon and David Wells or
any of them, proxies and attorneys-in-fact, with full power to each
of substitution and revocation, on behalf and in the name of the
undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of the Company to be held on June 8, 2021, at 10:00 am
Eastern time, at
https://agm.issuerdirect.com/ndra
or
at any adjournment or postponement thereof, and to vote, as
designated below, all shares of capital stock of the Company which
the undersigned would be entitled to vote if then and there
personally present, on the matters set forth
below.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING
INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card
and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/NDRA
by 11:59 pm Eastern time on June 7, 2021
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OF
ENDRA LIFE SCIENCES INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR
ALL
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WITHHOLD
ALL
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FOR
ALL
EXCEPT
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Election
of Directors
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☐
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☐
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Francois
Michelon
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☐
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Louis
J. Basenese
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☐
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CONTROL ID:
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Anthony
DiGiandomenico
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☐
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REQUEST ID:
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Michael
Harsh
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☐
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Alexander
Tokman
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☐
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Proposal
2
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FOR
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AGAINST
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ABSTAIN
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To
ratify the appointment of RBSM LLP as the Company’s
independent registered accounting firm for 2021.
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☐
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☐
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To
transact such other business as may properly come before the annual
meeting and any adjournments or postponements thereof.
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THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR ALL
PERSONS LISTED IN PROPOSAL 1 AND A VOTE FOR PROPOSAL
2.
THE
UNDERSIGNED HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE GIVEN TO
VOTE OR ACT WITH RESPECT TO THE CAPITAL STOCK OF THE COMPANY AND
HEREBY RATIFIES AND CONFIRMS ALL THAT THE PROXY, OR HIS
SUBSTITUTES, OR ANY OF THEM, MAY LAWFULLY DO BY VIRTUE
HEREOF.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
______________________________
______________________________
______________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2021
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(Print Name of
Stockholder and/or Joint Tenant)
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(Signature of
Stockholder)
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(Second Signature
if held jointly)
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TABLE OF CONTENTS