AYRO, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
☒
Filed by a Party other than the Registrant
☐
Check
the appropriate box:
☐
Preliminary Proxy
Statement
☐
Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy
Statement
☐
Definitive Additional
Materials
☐
Soliciting Material Under Section
240.14a-12
DropCar, Inc.
______________________________________________________________________
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒
No fee
required.
☐
Fee
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:
2)
Aggregate
number of securities to which transaction applies:
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):
4)
Proposed
maximum aggregate value of transaction:
5)
Total
fee paid:
☐
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:
2)
Form,
Schedule or Registration Statement No:
3)
Filing
party:
4)
Date
Filed:
November
6, 2019
To
Our Stockholders:
You
are cordially invited to attend the 2019 annual meeting of
stockholders of DropCar, Inc. (the “Company”) to be
held at 10:00 A.M. EST on Thursday, December 12, 2019, at the
offices of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.,
666 Third Avenue, New York, New York 10017.
Details
regarding the meeting, the business to be conducted at the meeting,
and information about DropCar, Inc. that you should consider when
you vote your shares are described in this proxy
statement.
At
the annual meeting, seven persons will be elected to the
Company’s Board of Directors (the “Board”). In
addition, we will ask stockholders to approve the following
proposals:
1.
To
ratify the appointment of Friedman LLP as the Company’s
independent registered public accounting firm for the fiscal year
ending December 31, 2019;
2.
To
approve by an advisory vote the compensation of our named executive
officers, as disclosed in this proxy statement; and
3.
To
approve an adjournment of our annual meeting of stockholders, if
necessary, to solicit additional proxies if there are not
sufficient votes in favor of any of the foregoing
proposals.
The
Board recommends a vote “FOR” each of the director
nominees and “FOR” the approval of each of the above
proposals. Such other business will be transacted as may properly
come before the annual meeting.
We
hope you will be able to attend the annual meeting. Whether you
plan to attend the annual meeting or not, it is important that you
cast your vote either in person or by proxy. You may vote over the
Internet as well as by telephone or by mail. When you have finished
reading the proxy statement, you are urged to vote in accordance
with the instructions set forth in this proxy statement. We
encourage you to vote by proxy so that your shares will be
represented and voted at the meeting, whether or not you can
attend.
Thank
you for your continued support of DropCar, Inc. We look forward to
seeing you at the annual meeting.
Sincerely,
Spencer
Richardson
Chief
Executive Officer
November
6, 2019
NOTICE
OF 2019 ANNUAL MEETING OF STOCKHOLDERS
TIME:
10:00 A.M. EST
DATE:
Thursday, December 12, 2019
PLACE:
Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C., located at 666
Third Avenue, New York, New York, 10017
PURPOSES:
1.
To
elect seven directors to hold office until the 2020 annual meeting
of stockholders or until their successors are duly elected and
qualified;
2.
To
ratify the appointment of Friedman LLP as the Company’s
independent registered public accounting firm for the fiscal year
ending December 31, 2019;
3.
To
approve by an advisory vote the compensation of our named executive
officers, as disclosed in this proxy statement;
4.
To
approve an adjournment of our annual meeting of stockholders, if
necessary, to solicit additional proxies if there are not
sufficient votes in favor of any of the foregoing proposals;
and
5.
To
transact such other business that is properly presented at the
annual meeting and any adjournments or postponements
thereof.
WHO
MAY VOTE:
You may vote if you were the record owner of
DropCar, Inc. common stock at the close of business on November 6,
2019
.
A list of stockholders of record will
be available at the annual meeting and, during the 10 days prior to
the annual meeting, at our principal executive offices located at
1412 Broadway, Suite 2105, New York, New York
10018.
All stockholders are cordially invited to attend
the annual meeting.
Whether you plan to attend the
annual meeting or not, we urge you to vote and submit your proxy by
the Internet, telephone or mail in order to ensure the presence of
a quorum.
You may change or
revoke your proxy at any time before it is voted at the
meeting.
BY
ORDER OF THE BOARD OF DIRECTORS
Joshua
N. Silverman
Chairman
of the Board
TABLE OF
CONTENTS
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PAGE
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Important Information About the Annual Meeting and
Voting
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3
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Security Ownership of Certain Beneficial Owners and
Management
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7
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Management and Corporate Governance
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9
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Executive Officer and Director Compensation
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14
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Equity Compensation Plan Information
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17
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Report of Audit Committee
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17
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Section 16(a) Beneficial Ownership Reporting
Compliance
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18
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Certain Relationships and Related Person Transactions
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18
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Election of Directors
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19
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Advisory Vote on Independent Registered Public Accounting
Firm
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20
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Advisory Vote on Executive Compensation as Disclosed in this Proxy
Statement
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22
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Code of Conduct and Ethics
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24
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Other Matters
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24
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Stockholder Proposals and Nominations For Director
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24
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Appendix
Appendix A – Proxy Card
DropCar, Inc.
1412 Broadway, Suite 2105
New York, New York 10018
PROXY STATEMENT FOR THE DROPCAR, INC.
2019 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 12,
2019
This
proxy statement, along with the accompanying notice of 2019 annual
meeting of stockholders, contains information about the 2019 annual
meeting of stockholders of DropCar, Inc., including any
adjournments or postponements of the annual meeting. We are holding
the annual meeting at 10:00 A.M. EST on Thursday, December 12,
2019, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky &
Popeo, P.C., 666 Third Avenue, New York, New York
10017.
In
this proxy statement, we refer to DropCar, Inc. as
“DropCar,” “the Company,” “we”
and “us.”
This
proxy statement relates to the solicitation of proxies by our Board
for use at the annual meeting.
On
or about November 6, 2019, we began sending this proxy statement,
the attached Notice of Annual Meeting of Stockholders and the
enclosed proxy card to all stockholders entitled to vote at the
annual meeting.
Although
not part of this proxy statement, we are also sending along with
this proxy statement a copy of our Annual Report on Form 10-K,
which includes financial statements for the fiscal year ended
December 31, 2018.
1
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON DECEMBER 12,
2019
This proxy statement and a copy of our Annual Report on Form 10-K,
which includes financial statements for the fiscal year ended
December 31, 2018, are available for viewing, printing and
downloading at
www.proxyvote.com.
To view these materials please have
your 16-digit control number(s) available that appears on your
proxy card. On this website, you can also elect to receive future
distributions of our proxy statements and annual reports to
stockholders by electronic delivery.
Additionally, you can find a
copy of our Annual Report on Form 10-K, which includes our
financial statements for the fiscal year ended December 31, 2018 on
the website of the Securities and Exchange Commission, or the SEC,
at
www.sec.gov
,
or in the
“Investors” section of our website at
www.dropcar.com.
You may also obtain
a printed copy of our Annual Report on Form 10-K, including our
financial statements, free of charge, from us by sending a written
request to: DropCar, Inc., Investor Relations, 1412 Broadway, Suite
2105, New York, New York 10018. Exhibits will be provided upon
written request and payment of an appropriate processing
fee.
2
IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND
VOTING
Why is the Company Soliciting My Proxy?
The
Board is soliciting your proxy to vote at the 2019 annual meeting
of stockholders to be held at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky & Popeo, P.C., 666 Third Avenue, New York, New
York 10017, at 10:00 A.M. EST on Thursday, December 12, 2019, and
any adjournments of the meeting, which we refer to as the annual
meeting. The proxy statement along with the accompanying Notice of
Annual Meeting of Stockholders summarizes the purposes of the
meeting and the information you need to know to vote at the annual
meeting.
We
have made available to you on the Internet or have sent you this
proxy statement, the Notice of Annual Meeting of Stockholders, the
proxy card and a copy of our Annual Report on Form 10-K, which
includes financial statements for the fiscal year ended December
31, 2018, because you owned shares of DropCar, Inc. common stock on
the record date. The Company intends to commence distribution of
the proxy materials to stockholders on or about November 6,
2019.
Who May Vote?
Only
stockholders who owned our common stock at the close of business on
November 6, 2019, are entitled to vote at the annual meeting. On
this record date, there were 4,060,503 shares of our common stock
outstanding and entitled to vote. Our common stock is our only
class of voting stock.
You
do not need to attend the annual meeting to vote your shares.
Shares represented by valid proxies, received in time for the
annual meeting and not revoked prior to the annual meeting, will be
voted at the annual meeting. For instructions on how to change or
revoke your proxy, see “May I Change or Revoke My
Proxy?” below.
How Many Votes Do I Have?
Each
share of our common stock that you own entitles you to one
vote.
How Do I Vote?
Whether
you plan to attend the annual meeting or not, we urge you to vote
by proxy. All shares represented by valid proxies that we receive
through this solicitation, and that are not revoked, will be voted
in accordance with your instructions on the proxy card or as
instructed via Internet or telephone. You may specify whether your
shares should be voted for or withheld for each nominee for
director and whether your shares should be voted for, against or
abstain with respect to each of the other proposals. If you
properly submit a proxy without giving specific voting
instructions, your shares will be voted in accordance with the
Board’s recommendations as noted below. Voting by proxy will
not affect your right to attend the annual meeting. If your shares
are registered directly in your name through our stock transfer
agent, Issuer Direct Corporation, or you have stock certificates
registered in your name, you may vote:
·
By Internet or by
telephone.
Follow the
instructions included in the notice or, if you received printed
materials, in the proxy card to vote by Internet or
telephone.
·
By mail.
If you received a proxy card by mail, you can vote
by mail by completing, signing, dating and returning the proxy card
as instructed on the card. If you sign the proxy card but do not
specify how you want your shares voted, they will be voted in
accordance with the Board’s recommendations as noted
below.
·
In person at the
meeting.
If you attend the
meeting, you may deliver a completed proxy card in person or you
may vote by completing a ballot, which will be available at the
meeting.
Telephone and Internet voting facilities for stockholders of record
will be available 24 hours a day and will close at 11:59 P.M.
Eastern Time on December 11, 2019.
If
your shares are held in “street name” (held in the name
of a bank, broker or other holder of record), you will receive
instructions from the holder of record. You must follow the
instructions of the holder of record in order for your shares to be
voted. Telephone and Internet voting also will be offered to
stockholders owning shares through certain banks and brokers. If
your shares are not registered in your own name and you plan to
vote your shares in person at the annual meeting, you should
contact your broker or agent to obtain a legal proxy or
broker’s proxy card and bring it to the annual meeting in
order to vote.
3
How Does the Board Recommend That I Vote on the
Proposals?
The
Board recommends that you vote as follows:
●
“
FOR
” the election of the nominees for
director;
●
“
FOR
” the ratification of the selection of
Friedman LLP as our independent registered public accounting firm
for our fiscal year ending December 31, 2019;
●
“
FOR
” the advisory vote on the compensation of
our named executive officers, as disclosed in this proxy statement;
and
●
“
FOR
” the adjournment of our annual meeting of
stockholders, if necessary, to solicit additional proxies if there
are not sufficient votes in favor of any of the foregoing
proposals.
If
any other matter is presented at the annual meeting, your proxy
provides that your shares will be voted by the proxy holder listed
in the proxy in accordance with his best judgment. At the time this
proxy statement was first made available, we knew of no matters
that needed to be acted on at the annual meeting, other than those
discussed in this proxy statement.
May I Change or Revoke My Proxy?
If
you give us your proxy, you may change or revoke it at any time
before the annual meeting. You may change or revoke your proxy in
any one of the following ways:
●
if
you received a proxy card, by signing a new proxy card with a date
later than your previously delivered proxy and submitting it as
instructed above;
●
by
re-voting by Internet or by telephone as instructed
above;
●
by
notifying DropCar’s Secretary/Clerk in writing before the
annual meeting that you have revoked your proxy; or
●
by
attending the annual meeting in person and voting in person.
Attending the annual meeting in person will not in and of itself
revoke a previously submitted proxy. You must specifically request
at the annual meeting that it be revoked.
Your
most current vote, whether by telephone, Internet or proxy card is
the one that will be counted.
What if I Receive More Than One Notice or Proxy Card?
You
may receive more than one notice or proxy card if you hold shares
of our common stock in more than one account, which may be in
registered form or held in street name. Please vote in the manner
described above under “How Do I Vote?” for each account
to ensure that all of your shares are voted.
Will My Shares be Voted if I Do Not Vote?
If
your shares are registered in your name or if you have stock
certificates, they will not be counted if you do not vote as
described above under “How Do I Vote?” If your shares
are held in street name and you do not provide voting instructions
to the bank, broker or other nominee that holds your shares as
described above, the bank, broker or other nominee that holds your
shares has the authority to vote your unvoted shares only on
certain of the proposals set forth in this proxy statement without
receiving instructions from you. Therefore, we encourage you to
provide voting instructions to your bank, broker or other nominee.
This ensures your shares will be voted at the annual meeting and in
the manner you desire. A “broker non-vote” will occur
if your broker cannot vote your shares on a particular matter
because it has not received instructions from you and does not have
discretionary voting authority on that matter or because your
broker chooses not to vote on a matter for which it does have
discretionary voting authority.
4
What Vote is Required to Approve Each Proposal and How are Votes
Counted?
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Proposal 1: Elect Directors
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The nominees for director who receive the most votes (also known as
a “plurality” of the votes cast) will be elected. You
may vote either FOR all of the nominees, WITHHOLD your vote from
all of the nominees or WITHHOLD your vote from any one or more of
the nominees. Votes that are withheld will not be included in the
vote tally for the election of the directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of the directors. As a
result, any shares not voted by a customer will be treated as a
broker non-vote. Such broker non-votes will have no effect on the
results of this vote.
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Proposal 2: Ratify Selection of Independent Registered Public
Accounting Firm
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The affirmative vote of the holders of a majority of the shares of
our common stock present and entitled to vote on the matter either
in person or by proxy at the annual meeting is required to ratify
the appointment of Friedman LLP as our independent registered
public accounting firm for the fiscal year ending December 31,
2019. Abstentions will be treated as votes against this proposal.
Brokerage firms have authority to vote customers’ unvoted
shares held by the firms in street name on this proposal. If a
broker does not exercise this authority, such broker non-votes will
have no effect on the results of this vote. We are not required to
obtain the approval of our stockholders to select our independent
registered public accounting firm. However, if our stockholders do
not ratify the selection of Friedman LLP as our independent
registered public accounting firm for 2019, the Audit Committee of
our Board will reconsider its selection.
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Proposal 3: Approve an Advisory Vote on the Compensation of our
Named Executive Officers
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The affirmative vote of a majority of the votes cast in person or
by proxy at the annual meeting is required to approve, on an
advisory basis, the compensation of our named executive officers,
as described in this proxy statement. Abstentions will be treated
as votes against this proposal. Brokerage firms do not have
authority to vote customers’ unvoted shares held by the firms
in street name on this proposal. As a result, any shares not voted
by a customer will be treated as a broker non-vote. Such broker
non-votes will have no effect on the results of this vote. Although
the advisory vote is non-binding, the Compensation Committee and
the Board will review the voting results and take them into
consideration when making future decisions regarding executive
compensation.
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Proposal 4: Approve an Adjournment of the Annual Meeting, if
Necessary, to Solicit Additional Proxies if there are not
Sufficient Votes in Favor of Any of the Foregoing
Proposals
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Approval of the adjournment of the annual meeting, if necessary, to
solicit additional proxies if there are not sufficient votes in
favor of the above proposals requires the affirmative vote of the
holders of a majority of the shares of common stock present and
entitled to vote either in person or by proxy at the annual
meeting. Abstentions will be treated as votes against this
proposal. Brokerage firms do not have authority to vote
customers’ unvoted shares held by the firms in street name on
this proposal. As a result, any shares not voted by a customer will
be treated as a broker non-vote. Such broker non-votes will have no
effect on the results of this vote.
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Is Voting Confidential?
We
will keep all the proxies, ballots and voting tabulations private.
We only let our Inspector of Election, a representative from Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C., examine these
documents. Management will not know how you voted on a specific
proposal unless it is necessary to meet legal requirements. We
will, however, forward to management any written comments you make
on the proxy card or otherwise provide.
Where Can I Find the Voting Results of the Annual
Meeting?
The
preliminary voting results will be announced at the annual meeting,
and we will publish preliminary, or final results if available, in
a Current Report on Form 8-K within four business days of the
annual meeting. If final results are unavailable at the time we
file the Form 8-K, then we will file an amended report on Form 8-K
to disclose the final voting results within four business days
after the final voting results are known. In addition, we are
required to file on a Current Report on Form 8-K no later than the
earlier of one hundred fifty calendar days after the annual meeting
or sixty calendar days prior to the deadline for submission of
stockholder proposals set forth on page 30 of this proxy statement
under the heading “Stockholder Proposals and Nominations for
Director” our decision on how frequently we will include a
stockholder vote on the compensation of our named executive
officers in our proxy materials.
What Are the Costs of Soliciting these Proxies?
We
will pay all of the costs of soliciting these proxies. Our
directors and employees may solicit proxies in person or by
telephone, fax or email. We will pay these employees and directors
no additional compensation for these services. We will ask banks,
brokers and other institutions, nominees and fiduciaries to forward
these proxy materials to their principals and to obtain authority
to execute proxies. We will then reimburse them for their
expenses.
5
What Constitutes a Quorum for the Annual Meeting?
The
presence, in person or by proxy, of the holders of thirty-three and
one-third percent (33.33%) of our outstanding shares entitled to
vote at the annual meeting is necessary to constitute a quorum at
the annual meeting. Votes of stockholders of record who are present
at the annual meeting in person or by proxy, abstentions, and
broker non-votes are counted for purposes of determining whether a
quorum exists.
Attending the Annual Meeting
The
annual meeting will be held at 10:00 A.M. EST on Thursday, December
12, 2019, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky
& Popeo, P.C., 666 Third Avenue, New York, New York 10017. When
you arrive at the meeting, signs will direct you to the appropriate
meeting rooms. You need not attend the annual meeting in order to
vote.
Householding of Annual Disclosure Documents
Some
brokers or other nominee record holders may be sending you a single
notice or, if applicable, a single set of our proxy materials if
multiple DropCar, Inc. stockholders live in your household. This
practice, which has been approved by the SEC, is called
“householding.” Once you receive notice from your
broker or other nominee record holder that it will be householding
the notice or if, applicable, our proxy materials, the practice
will continue until you are otherwise notified or until you notify
them that you no longer want to participate in the practice.
Stockholders who participate in householding will continue to have
access to and utilize separate proxy voting
instructions.
We
will promptly deliver a separate copy of our notice or if
applicable, our proxy materials to you if you write or call our
corporate secretary at: DropCar, Inc., Investor Relations, 1412
Broadway, Suite 2105, New York, New York 10018. If you want to
receive your own notice or, if applicable, set of our proxy
materials in the future or, if you share an address with another
DropCar, Inc. stockholder and together both of you would like to
receive only a single notice or, if applicable, set of proxy
materials, you should contact your broker or other nominee record
holder directly or you may contact us at the above address and
phone number.
Electronic Delivery of Company Stockholder
Communications
Most
stockholders can elect to view or receive copies of future proxy
materials over the Internet instead of receiving paper copies in
the mail.
You
can choose this option and save the Company the cost of producing
and mailing these documents by:
●
following
the instructions provided on your proxy card;
●
following
the instructions provided when you vote over the Internet;
or
●
going to
www.proxyvote.com
and following the instructions
provided.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information with respect to the
beneficial ownership of our common stock as of October 21, 2019 for
(a) the executive officers named in the Summary Compensation Table
on page 16 of this proxy statement, (b) each of our directors and
director nominees, (c) all of our current directors and executive
officers as a group and (d) each stockholder known by us to own
beneficially more than 5% of our common stock. Beneficial ownership
is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities. We deem
shares of common stock that may be acquired by an individual or
group within 60 days of October 21, 2019 pursuant to the exercise
of options or warrants or the vesting of restricted stock units to
be outstanding for the purpose of computing the percentage
ownership of such individual or group, but those shares are not
deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table. Except
as indicated in footnotes to this table, we believe that the
stockholders named in this table have sole voting and investment
power with respect to all shares of common stock shown to be
beneficially owned by them based on information provided to us by
these stockholders. Percentage of ownership is based on 4,060,503
shares of common stock outstanding on October 21, 2019. Except as
otherwise indicated, the address of each of the persons in this
table is c/o DropCar, Inc., 1412 Broadway, Suite 2105, New York,
New York 10018.
|
Name and Address of Beneficial Owner
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Number of Shares of Common Stock Beneficially Owned
|
Percent of Shares of Common Stock Beneficially Owned
|
|
Named Executive Officers and Director
|
|
|
|
Spencer Richardson
(1)
|
266,347
|
6.43
%
|
|
Mark
Corrao
|
0
|
*
|
|
David Newman
(2)
|
269,878
|
6.51
%
|
|
Sebastian Giordano
(3)
|
85,420
|
2.08
%
|
|
Zvi Joseph
(4)
|
37,025
|
*
|
|
Solomon Mayer
(5)
|
37,025
|
*
|
|
Joshua Silverman
(6)
|
57,879
|
1.42
%
|
|
Greg Schiffman
(7)
|
37,025
|
*
|
|
Paul
Commons
|
0
|
*
|
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David Allen
(8)
|
24,792
|
*
|
|
Robert Roller
(9)
|
14,997
|
*
|
|
All Current Executive Officers and Directors as a
Group (8 persons)
(10)
|
790,599
|
18.40
%
|
|
Greater than 5% Shareholders
|
|
|
|
Alpha Capital Anstalt
(11)
|
701,572
|
16.27
%
|
|
Brio Capital Master Fund, Ltd.
(12)
|
228,784
|
5.56
%
|
|
Iroquois Capital Management
LLC
(13)
|
909,965
|
21.54
%
|
*
Represents beneficial ownership of less than 1% of the outstanding
shares of our common stock.
1.
Mr.
Richardson’s total includes 181,429 shares of common stock
and options to purchase 84,918 shares of common stock that are
exercisable within 60 days of October 21, 2019.
2.
Mr.
Newman’s total includes 184,960 shares of common stock and
options to purchase 84,918 shares of common stock that are
exercisable within 60 days of October 21, 2019.
3.
Mr.
Giordano’s total includes 34,992 shares of common stock and
options to purchase 50,428 shares of common stock that are
exercisable within 60 days of October 21, 2019.
4.
Mr.
Joseph’s total includes 34,992 shares of common stock and
options to purchase 2,033 shares of common stock that are
exercisable within 60 days of October 21, 2019.
5.
Mr.
Mayer’s total includes 34,992 shares of common stock and
options to purchase 2,033 shares of common stock that are
exercisable within 60 days of October 21, 2019.
7
6.
Mr.
Silverman’s total includes 48,970 shares of common stock,
options to purchase 5,130 shares of common stock that are
exercisable within 60 days of October 21, 2019 and warrants to
purchase 3,779 shares of common stock that are exercisable within
60 days of October 21, 2019.
7.
Mr.
Schiffman’s total includes 34,992 shares of common stock and
options to purchase 2,033 shares of common stock that are
exercisable within 60 days of October 21, 2019.
8.
Mr. Allen’s
total includes options to purchase 24,792 shares of common stock
that are exercisable within 60 days of October 21,
2019.
9.
Mr. Roller’s
total includes options to purchase 14,997 shares of common stock
that are exercisable within 60 days of October 21,
2019.
10.
Includes all equity
beneficially owned by current executive officers and directors, but
does not include equity beneficially owned by Mr. Commons, Mr.
Roller or Mr. Allen, whose service with us terminated on February
28, 2019, December 24, 2018 and January 30, 2018,
respectively.
11.
Based on a Schedule
13G filed on May 24, 2018 and on information known to the Company,
which information has been updated to reflect the 1-for-6
reverse stock split that was effected on March 8, 2019. The
principal business address of the beneficial owner is Lettstrasse
32, FL-9490 Vaduz, Furstentums, Liechtenstein. Konrad Ackerman is
the Director of Alpha Capital Anstalt. Beneficial ownership
includes 450,100 shares of common stock, Series H-3 Preferred Stock
convertible into 5,142 shares of common stock, Series H-4 Preferred
Stock convertible into 60,033 shares of common stock, Series H-4
Warrants to purchase 46,997 shares of common stock, Series I
Warrants to purchase 1,413 shares of common stock and Series J
Warrants to purchase 137,887 shares of common stock, in each case
which are convertible or exercisable, as applicable, within 60 days
of October 21, 2019.
The shares
and percentage included in the table report the number of
shares that would be issuable upon the exercise and conversion of
such securities, without giving effect to the 9.99% blocker
included in certain such securities.
12.
Based on
information known to the Company. The principal business address of
Brio Capital Master Fund, Ltd. is 100 Merrick Road, Suite 401W,
Rockville Centre, New York, 11570. Shaye Hirsch is the Director of
Brio Capital Master Fund, Ltd. Beneficial ownership includes
172,455 shares of common stock, Series H-3 Preferred Stock
convertible into 3,979 shares of common stock, Series H-4 Preferred
Stock convertible into 6,050 shares of common stock, Series H-3
Warrants to purchase 5,971 shares of common stock, Series H-4
Warrants to purchase 14,799 shares of common stock, Series I
Warrants to purchase 4,946 shares of common stock and Series J
Warrants to purchase 20,584 shares of common stock, in each case
which are convertible or exercisable, as applicable, within 60 days
of October 21, 2019.
13.
Based on a Schedule
13G/A filed on February 14, 2019, which information has been
updated to reflect the 1-for-6 reverse stock split that was
effected on March 8, 2019, and information known to the Company.
The principal business address of the beneficial owner is 205 East
42nd Street, 20th Floor, New York, New York 10017. Iroquois Master
Fund (“IMF”) is a private investment fund. Iroquois
Capital Management LLC (“Iroquois Capital”) is an
investment adviser that provides investment advisory services to
IMF. Iroquois Capital Investment Group LLC (“ICIG”) is
a private investment fund. Richard Abbe shares authority and
responsibility for the investments made on behalf of IMF with
Kimberly Page, each of whom is a director of IMF. Mr. Abbe is
the President of Iroquois Capital and has sole authority and
responsibility for investments made on behalf of ICIG. Mr. Abbe is
also managing member of Kensington Investment Partners
LLC.
Beneficial
ownership for IMF includes 389,243 shares of common stock, Series
H-4 Preferred Stock convertible into 2,667 shares of common stock,
Series J Warrants to purchase 30,872 shares of common stock, Series
H-1 Warrants to purchase 43,978 shares of common stock, Series H-3
Warrants to purchase 4,986 shares of common stock, Series H-4
Warrants to purchase 22,195 shares of common stock, in each case
which are convertible or exercisable, as applicable, within 60 days
of October 21, 2019. Beneficial ownership for ICIG includes 355,910
shares of common stock, Series H-4 Preferred Stock convertible into
2,667 shares of common stock, Series J Warrants to purchase for
30,872 shares of common stock, Series H-1 Warrants to purchase
3,383 shares of common stock, Series H-3 Warrants to purchase 997
shares of common stock, Series H-4 Warrants to purchase 22,195
shares of common stock, in each case which are convertible or
exercisable, as applicable, within 60 days of October 21, 2019.
The shares and percentage
included in the table report the number of shares that would be
issuable upon the exercise and conversion of such securities,
without giving effect to the 9.99% blocker included in certain such
securities.
8
The Board of Directors
On
November 5, 2019, our Board accepted the recommendation of the
Nominating Committee of the Board (the “Nominating
Committee”) and voted to nominate Spencer Richardson, David
Newman, Sebastian Giordano, Zvi Joseph, Solomon Mayer, Joshua
Silverman and Greg Schiffman for election at the annual meeting for
a term of one year to serve until the 2020 annual meeting of
stockholders, and until their respective successors have been
elected and qualified.
Set
forth below are the names of the persons nominated as directors,
their ages, their offices in the Company, if any, their principal
occupations or employment for at least the past five years, the
length of their tenure as directors and the names of other public
companies in which such persons hold or have held directorships
during the past five years. Additionally, information about the
specific experience, qualifications, attributes or skills that led
to the Board’s conclusion at the time of filing of this proxy
statement that each person listed below should serve as a director
is set forth below:
|
Name
|
Age
|
Position(s)
|
|
Employee Directors
|
|
|
|
Spencer
Richardson
|
35
|
Chief
Executive Officer; Director
|
|
David
Newman
|
58
|
Chief
Business Development Officer; Director
|
|
Non-Employee Directors
|
|
|
|
Joshua
Silverman
|
49
|
Director;
Chairman of the Board
|
|
Sebastian
Giordano
|
62
|
Director
|
|
Zvi
Joseph
|
53
|
Director
|
|
Solomon
Mayer
|
66
|
Director
|
|
Greg Schiffman
|
61
|
Director
|
Our
Board has reviewed the materiality of any relationship that each of
our directors has with DropCar, Inc. either directly or indirectly.
Based on this review, our Board has determined that the following
members of the Board are “independent directors” as
defined by The Nasdaq Stock Market: Zvi Joseph, Solomon Mayer,
Joshua Silverman and Greg Schiffman.
On
January 30, 2018, the Company completed its business combination
with DropCar, Inc. (“Private DropCar”) in accordance
with the terms of the Agreement and Plan of Merger and
Reorganization, dated as of September 6, 2017, as subsequently
amended, by and among the Company, DC Acquisition Corporation
(“Merger Sub”), and Private DropCar (as amended, the
“Merger Agreement”), pursuant to which Merger Sub
merged with and into Private DropCar, with Private DropCar
surviving as a wholly owned subsidiary of the Company (the
“Merger”). The information below includes information
regarding each director’s service on the boards of directors
of WPCS International Incorporated (“WPCS”), Private
DropCar and the Company.
9
Employee Directors
Spencer Richardson
Mr.
Richardson has served as our Chief Executive Officer and a member
of the Board since the closing of the Merger, and prior to that
time, served as a member of the board of directors of Private
DropCar since September 2014. Mr. Richardson served as Co-Founder
and Chief Executive Officer of Private DropCar since its inception
in September 2014 through the closing of the Merger. Mr. Richardson
also served as the Chairman of our Board from January 2018 to May
2018. Prior to his service with DropCar, from March 2009 through
February 2016, Mr. Richardson served as Co-Founder and Chief
Executive Officer of FanBridge, Inc., a platform that enables
clients, such as musicians, comedians, influencers, and anyone with
a fan base, to manage fan acquisition, retention, and engagement.
In 2012, Forbes Magazine selected Mr. Richardson as a “30
Under 30” innovator. Mr. Richardson currently serves on the
boards of directors of numerous private companies. Mr. Richardson
holds a B.S. in Finance and Marketing from New York University
Stern School of Business.
David Newman
Mr.
Newman has served as our Chief Business Development Officer and a
member of the Board since the closing of the Merger, and prior to
that time, served as a member of the board of directors of Private
DropCar since its inception in September 2014. Mr. Newman served as
Co-Founder and Secretary of Private DropCar since its inception and
as Chief Business Development Officer since April 2017. Mr. Newman
also served as Treasurer and Chairman of the board of directors of
Private DropCar from its inception until January 2018. Mr. Newman
has served as President of David B. Newman Consultants, Inc., a New
York-based consulting corporation, as President of Rockland
Westchester Legal Services, PC, a New York-based legal services
company, and as a Senior Managing Director of Brock Securities LLC,
a broker-dealer that provides investment banking and advisory
services, in each instance since February 2014. He previously
served as a director of United Realty Trust Inc., a public real
estate investment trust, from August 2012 through September 2015.
Mr. Newman holds a B.B.A. in Business Management from Hofstra
University and a J.D. from Fordham University School of
Law.
Non-Employee Directors
Sebastian Giordano
Mr.
Giordano has served as a member of the Board since the closing of
the Merger, and prior to that time, served as a director of WPCS
since February 2013. Mr. Giordano served as the Interim Chief
Executive Officer of WPCS from August 2013 until April 25, 2016,
when the interim label was removed from his title. He served as the
Chief Executive Officer of WPCS since such time through the closing
of the Merger. Since 2002, Mr. Giordano has been Chief Executive
Officer of Ascentaur, LLC, a business consulting firm providing
comprehensive strategic, financial and business development
services to start-up, turnaround and emerging growth companies.
From 1998 to 2002, Mr. Giordano was Chief Executive Officer of
Drive One, Inc., a safety training and education business. From
1992 to 1998, Mr. Giordano was Chief Financial Officer of Sterling
Vision, Inc., a retail optical chain. Mr. Giordano received B.B.A.
and M.B.A. degrees from Iona College.
Mr.
Giordano’s qualifications to sit on the Board include his
broad management experience, including having served as Chief
Executive Officer of WPCS.
Greg Schiffman
Mr.
Schiffman has served as a member of the Board since the closing of
the Merger. Mr. Schiffman served as the Chief Financial Officer of
Vineti, Inc. from October 2017 through April 2018. He previously
served as the Chief Financial Officer of each of Iovance
Biotherapeutics (formerly Lion Biotechnologies), from October 2016
through June 2017, Stem Cells, Inc., from January 2014 through
September 2016, Dendreon Corporation, from December 2006 through
December 2013 and Affymetrix, Inc. from August 2001 through
November 2006. He currently serves on the boards of directors of
several private companies. Mr. Schiffman holds a B.S. in Accounting
from DePaul University and an MM (MBA) from Northwestern University
Kellogg Graduate School of Management. Mr. Schiffman’s
qualifications to sit on the Board include his financial
background, business experience and education.
Zvi Joseph
Mr.
Joseph has served as a member of the Board since the closing of the
Merger. He has served as Deputy General Counsel of Amdocs Limited,
a publicly traded corporation that provides software and services
to communications and media companies, since October 2005. He
received his A.A.S. in Business Administration from Rockland
Community College, his B.A. in Literature from New York University
and his J.D. from Fordham University School of Law. He also holds a
Certificate in Business Excellence from Columbia University School
of Business.
Mr.
Joseph’s qualifications to sit on the Board include his legal
experience and education.
10
Solomon Mayer
Mr.
Mayer has served as a member of the Board since the closing of the
Merger and, prior to that time, served as a member of the Board of
Directors of Private DropCar. He has served as President and Chief
Executive Officer of Mooney Aviation Company, a private company
that manufactures four-place, single-engine and piston-powered
aircraft, since 1999. Prior to that time, he held the position of
Chief Executive Officer of, and consultant to, Overseas Trading, a
department store wholesaler. Mr. Mayer serves as a director of
Laniado Hospital, a voluntary, not-for-profit hospital in Kiryat
Sanz, Netanya, Israel, as well as a director of several private
companies. He previously served as a consultant to and director of
each of Innovative Food Holdings, a provider of sourcing,
preparation and delivery of specialty/fresh food for both
professional chefs and consumers, and BlastGard International Inc.,
which manufactures and markets proprietary blast mitigation
materials, in each case, from 2002 until 2016.
Mr.
Mayer’s qualifications to sit on the Board include his and
extensive management experience as an executive and director of a
variety of companies.
Joshua Silverman
Mr.
Silverman has served as a member of the Board since the closing of
the Merger, and prior to that time, served as a director of WPCS
since August 2016. Mr. Silverman currently serves as the Managing
Member of Parkfield Funding LLC. Mr. Silverman was the co-founder,
and a Principal and Managing Partner of Iroquois Capital
Management, LLC, an investment advisory firm. Since its inception
in 2003 until July 2016, Mr. Silverman served as Co-Chief
Investment Officer of Iroquois. While at Iroquois, he designed and
executed complex transactions, structuring and negotiating
investments in both public and private companies and has often been
called upon by the companies solve inefficiencies as they relate to
corporate structure, cash flow, and management. From 2000 to 2003,
Mr. Silverman served as Co-Chief Investment Officer of Vertical
Ventures, LLC, a merchant bank. Prior to forming Iroquois, Mr.
Silverman was a Director of Joele Frank, a boutique consulting firm
specializing in mergers and acquisitions. Previously, Mr. Silverman
served as Assistant Press Secretary to The President of the United
States. Mr. Silverman currently serves as a director of WPCS,
Protagenic Therapeutics, Neurotrope, Inc., and TapImmune Inc., all
of which are public companies. He previously served as a Director
of National Holdings Corporation from July 2014 through August
2016, MGT Capital Investments, Inc. from December 2014 to May 2016,
and Alanco Technologies Inc. from March 2016 through August 2016.
Mr. Silverman received his B.A. from Lehigh University in
1992.
Mr.
Silverman’s qualifications to sit on the Board include his
experience as an investment banker, management consultant and as a
director of numerous public companies.
Committees of the Board and Meetings
Meeting Attendance.
During
the fiscal year ended December 31, 2018, the Board held 13 meetings
and approved certain actions by unanimous written consent. The
Company expects its directors to attend all board and committee
meetings and to spend the time needed and meet as frequently as
necessary to properly discharge their responsibilities. Each
director attended, either in person or telephonically, at least 75%
of the aggregate Board meetings and meetings of committees on which
he served during his tenure as a director or committee member. Our
Board has adopted a policy under which all directors are encouraged
to attend the annual meeting of our stockholders. All directors
attended our annual meeting of stockholders held in
2018.
Audit Committee
During
the fiscal year ended December 31, 2018, the Audit Committee of the
Board (the “Audit Committee”) held 5 meetings. The
Audit Committee consists of Greg Schiffman, Zvi Joseph and Solomon
Mayer, with Mr. Schiffman appointed as Chairman of the Committee.
The Board has determined that all of the members are
“independent” as that term is defined under applicable
SEC rules and under the current listing standards of The Nasdaq
Stock Market and that Mr. Schiffman qualifies as an “audit
committee financial expert” pursuant to Item 407(d)(5) of
Regulation S-K.
The
Audit Committee is responsible for overseeing the Company’s
corporate accounting, financial reporting practices, audits of
financial statements, and the quality and integrity of the
Company’s financial statements and reports. In addition, the
Audit Committee oversees the qualifications, independence and
performance of the Company’s independent auditors. In
furtherance of these responsibilities, the Audit Committee’s
duties include the following: evaluating the performance and
assessing the qualifications of the independent auditors;
determining and approving the engagement of the independent
auditors to perform audit, reviewing and attesting to services and
performing any proposed permissible non-audit services; evaluating
employment by the Company of individuals formerly employed by the
independent auditors and engaged on the Company’s account and
any conflicts or disagreements between the independent auditors and
management regarding financial reporting, accounting practices or
policies; discussing with management and the independent auditors
the results of the annual audit; reviewing the financial statements
proposed to be included in the Company’s annual or transition
report on Form 10-K; discussing with management and the independent
auditors the results of the auditors’ review of the
Company’s quarterly financial statements; conferring with
management and the independent auditors regarding the scope,
adequacy and effectiveness of internal auditing and financial
reporting controls and procedures; and establishing procedures for
the receipt, retention and treatment of complaints regarding
accounting, internal accounting control and auditing matters and
the confidential and anonymous submission by employees of concerns
regarding questionable accounting or auditing matters.
The Audit Committee is governed by a written
charter approved by the Board, which complies with the applicable
provisions of the Sarbanes-Oxley Act and related rules of the SEC
and the Nasdaq Stock Market. A copy of the Audit Committee charter
is available to view on the Company’s website at
www.dropcar.com
.
11
Compensation Committee
During
the fiscal year ended December 31, 2018, the Compensation Committee
of the Board (the “Compensation Committee”) held 3
meetings. The Compensation Committee consists of Zvi Joseph and
Solomon Mayer with Mr. Joseph appointed as Chairman of the
Committee. The Board has determined that all of the members are
“independent” as that term is defined under applicable
SEC rules and under the current listing standards of The Nasdaq
Stock Market.
The
Compensation Committee has responsibility for assisting the Board
in, among other things, evaluating and making recommendations
regarding the compensation of the Company’s executive
officers and directors, assuring that the executive officers are
compensated effectively in a manner consistent with the
Company’s stated compensation strategy, producing an annual
report on executive compensation in accordance with the rules and
regulations promulgated by the SEC, periodically evaluating the
terms and administration of the Company’s incentive plans and
benefit programs and monitoring of compliance with the legal
prohibition on loans to our directors and executive
officers.
The Compensation Committee is governed by a
written charter approved by the Board. A copy of the Compensation
Committee charter is available to view on the Company’s
website at
www.dropcar.com
.
Nominating Committee
During
the fiscal year ended December 31, 2018, the Nominating Committee
held 2 meetings. The Nominating Committee consists of Zvi Joseph
and Solomon Mayer with Mr. Mayer appointed as Chairman of the
Committee. The Board has determined that both members are
“independent” as that term is defined under applicable
SEC rules and under the current listing standards of The Nasdaq
Stock Market.
The Nominating Committee is responsible for
assisting the Board in identifying individuals qualified to become
members of the Board and executive officers of the Company;
selecting, or recommending that the Board select, director nominees
for election as directors by the stockholders of the Company;
developing and recommending to the Board a set of effective
governance policies and procedures applicable to the Company;
leading the Board in its annual review of the Board’s
performance; recommending to the Board director nominees for each
committee; making recommendations regarding committee purpose,
structure and operations; and overseeing and approving a managing
continuity planning process.
The Nominating Committee has
not adopted a formal diversity policy in connection with the
consideration of director nominations or the selection of nominees.
However, the Nominating Committee will consider issues of diversity
among its members in identifying and considering nominees for
director, and strive where appropriate to achieve a diverse balance
of backgrounds, perspectives, experience, age, gender, ethnicity
and country of citizenship on the Board and its
committees.
During the fiscal year ended December 31, 2018,
there were no changes to the procedures by which holders of our
common stock may recommend nominees to the Board. If a stockholder
wishes to propose a candidate for consideration as a nominee for
election to the Board, it must follow the procedures described in
our Amended and Restated Bylaws, as amended, and in
“Stockholder Proposals and Nominations For Director” at
the end of this proxy statement.
The Nominating Committee is governed by a written
charter approved by the Board. A copy of the Nominating Committee
charter is available to view on the Company’s website
at
www.dropcar.com
.
Board Leadership Structure and Role in Risk Oversight
Our
Board has four independent members, including Zvi Joseph, Solomon
Mayer, Joshua Silverman and Greg Schiffman, and three
non-independent members, Spencer Richardson, our Chief Executive
Officer, David Newman, our Chief Business Development Officer, and
Sebastian Giordano, our former Chief Executive Officer. We believe
that the number of independent, experienced directors that make up
our Board benefits our Company and our stockholders.
Our
current Board leadership structure separates the positions of CEO
and Chairman of the Board, although we do not have a corporate
policy requiring that structure. Until May 2018, Spencer Richardson
served as both our CEO and Chairman of the Board. In May 2018, Mr.
Silverman was appointed Chairman of the Board. The Board believes
that this separation is appropriate for the organization at this
time because it allows for a division of responsibilities and a
sharing of ideas between individuals having different perspectives.
Our current CEO, who is also a member of our Board, is primarily
responsible for our operations and strategic direction, while our
Chairman is primarily focused on matters pertaining to corporate
governance and management oversight. While the Board believes that
this is the most appropriate structure at this time, the Board
retains the authority to change the Board structure, including the
possibility of combining the CEO and Chairman of the Board
positions, if it deems such a change to be appropriate in the
future.
Our
management is principally responsible for defining the various
risks facing the Company, formulating risk management policies and
procedures, and managing our risk exposures on a day-to-day basis.
The Board’s principal responsibility in this area is to
ensure that sufficient resources, with appropriate technical and
managerial skills, are provided throughout the Company to identify,
assess and facilitate processes and practices to address material
risk and to monitor our risk management processes by informing
itself concerning our material risks and evaluating whether
management has reasonable controls in place to address the material
risks. The involvement of the Board in reviewing our business
strategy is an integral aspect of the Board’s assessment of
management’s tolerance for risk and also its determination of
what constitutes an appropriate level of risk for the
Company.
12
While
the full Board has overall responsibility for risk oversight, the
Board has elected to delegate oversight responsibility related to
certain committees, which, in turn, report on the matters discussed
at the committee level to the full Board. For instance, our Audit
Committee focuses on the material risks facing the Company,
including operational, market, credit, liquidity and legal risks.
Additionally, our Compensation Committee could be charged with
reviewing and discussing with management whether our compensation
arrangements are consistent with effective controls and sound risk
management. Our management reports to the Board and Audit Committee
on a regular basis regarding risk
management.
Stockholder Communications to the Board
Generally,
stockholders who have questions or concerns should contact our
Investor Relations department at (646) 916-4595. However, any
stockholders who wish to address questions regarding our business
directly with the Board or any individual director, should direct
his or her questions in writing to the Chairman of
the Board at 1412 Broadway, Suite 2105, New York,
New York 10018. Communications will be distributed to
the Board, or to any individual director or directors as
appropriate, depending on the facts and circumstances outlined in
the communications. Items that are unrelated to the duties and
responsibilities of the Board may be excluded, such
as:
●
junk
mail and mass mailings;
●
resumes
and other forms of job inquiries;
●
surveys;
or
●
solicitations
or advertisements.
In
addition, any material that is unduly hostile, threatening, or
illegal in nature may be excluded, provided that any communication
that is filtered out will be made available to any outside director
upon request.
Executive Officers
The
following table sets forth certain information regarding our
executive officers who are not also directors. All officers are
at-will employees.
|
Name
|
Age
|
Position(s)
|
|
|
Executive Officers
|
|
|
|
|
Mark Corrao
|
61
|
Chief Financial Officer
|
|
|
Leandro Larroulet
|
37
|
Chief Information Officer
|
|
Executive Officers
Mark Corrao
Mr.
Corrao has served as the Company’s Chief Financial Officer
since February 28, 2019. He has served as Chief Financial Officer
of KannaLife Sciences, Inc. since 2012. Prior to that time, Mr.
Corrao served as Chief Financial Officer of each of Business
Efficiency Experts, Inc., from 2010 through 2012, StrikeForce
Technologies, Inc., from 2001 through 2010, and Advanced
Communication Sciences, Inc. from 1997 through 2000. Mr. Corrao
also has experience in accounting, having previously served as a
partner at Frank T. LaFauci, CPAs, as controller at Design
Production Management, Inc., as assistant controller at Greenfield
Arbitrage Partners, as internal auditor at Spear, Leeds &
Kellogg and as an accountant at A.L. Wellen & Co., CPAs. He
holds a B.S. in Public Accounting from the City University of New
York – Brooklyn College.
Leandro Larroulet
Mr.
Larroulet joined Private DropCar in July 2017 as its Chief
Information Officer. Prior to joining Private DropCar, Mr.
Larroulet served as Chief Operating Officer (COO) for the Argentina
based global technology development and consulting firm FDV
Solutions from September 2016 to June 2017. Previously Mr.
Larroulet held roles at FDV including Senior Project Manager,
Software Developer and Network Operator, dating back to September
2007. Mr. Larroulet graduated from FIUBA (Engineering University of
Buenos Aires), and also currently serves as both a member of their
curricular commission for Information Systems as well as an
auxiliary teacher for their Information Analysis
program.
13
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Summary Compensation Table
The following table shows the total compensation
paid or accrued during the last two fiscal years ended December 31,
2018 and December 31, 2017 to (1) our current and former Chief
Executive Officers, (2) our current former Chief
Financial Officers and (3) our next most highly compensated
executive officer who earned more than $100,000 during the fiscal
year ended December 31, 2018.
Because SEC rules
require us to disclose this information for the previous two fiscal
years, and because the closing of the Merger occurred in January
2018, certain executive compensation disclosure relates to persons
who were executive officers of WPCS prior to its merger with
Private DropCar. We note that Mr. Giordano and Mr. Allen resigned
from their positions as executive officers on or prior to the
closing of the Merger.
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock
Awards
($)
|
Option
Awards
($)
(1)
|
All Other Compensation
($)
|
Total
($)
|
|
Spencer Richardson
Chief Executive Officer
(2)
|
2018
|
273,471
|
387,500
|
1,621,983
|
100,000
|
26,957
|
2,409,911
|
|
2017
|
17,308
|
250,000
|
273,050
|
-
|
176,365
|
716,723
|
|
|
Sebastian Giordano
former Chief Executive Officer
(3)
|
2018
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2017
|
180,000
|
-
|
-
|
104,000
|
-
|
284,000
|
|
|
Paul Commons
former Chief Financial Officer
(5)
|
2018
|
208,152
|
15,000
|
-
|
234,139
|
-
|
457,291
|
|
2017
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
David Allen
former Chief Financial Officer
(3)
|
2018
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2017
|
140,000
|
-
|
-
|
78,000
|
-
|
218,000
|
|
|
Robert Roller
President of WPCS Suisun City International Inc.
(6)
|
2018
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2017
|
170,000
|
100,000
|
-
|
78,000
|
-
|
348,000
|
|
|
David Newman
Chief Business Development Officer
(4)
|
2018
|
273,471
|
395,972
|
1,621,983
|
100,000
|
27,233
|
2,418,659
|
|
2017
|
17,308
|
250,000
|
273,050
|
-
|
156,615
|
696,973
|
(1)
The
dollar amounts in this column represent the aggregate grant date
fair value computed in accordance with FASB ASC Topic 718. The
assumptions underlying the determination of fair value of the
awards are set forth in Note 3 the financial statements included in
the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2018.
(2)
Mr.
Richardson was CEO of Private DropCar until taking over as CEO of
the Company upon the Merger.
(3)
Mr.
Giordano was CEO of WPCS until the Merger.
(4)
Mr.
Newman was Chief Business Development Officer (“CBDO”)
of Private DropCar until taking over as CBDO of the Company upon
the Merger.
(5)
Mr.
Commons was CFO from January 22, 2018 of Private DropCar until
taking over as CFO of the Company upon the Merger, until the
February 28, 2019.
14
Narrative Disclosure to Summary Compensation Table
Employment Agreements
The
compensation arrangement of Sebastian Giordano, our former Chief
Executive Officer, was set forth in a letter agreement, dated July
29, 2013, as amended on February 3, 2015. Pursuant to that
agreement, Mr. Giordano was entitled to a base salary of $180,000
per year (effective as of January 1, 2015).
On
January 30, 2018, Sebastian Giordano, our former Chief Executive
Officer, and David Allen, our former Chief Financial Officer,
resigned as officers of the Company. In connection with their
respective resignations, each of Mr. Giordano and Mr. Allen entered
into a separation agreement, effective as of January 30, 2018 (the
“Giordano Agreement” and the “Allen
Agreement,” respectively, and collectively, the
“Separation Agreements”), with the Company. Each of the
Giordano Agreement and Allen Agreement includes a customary release
by Mr. Giordano and Mr. Allen, respectively, of certain claims
against the Company that are held by Mr. Giordano and Mr. Allen,
respectively. Pursuant to the Giordano Agreement, Mr. Giordano
ceased serving as an employee of the Company effective as of
January 30, 2018 (the “Separation Date”). Pursuant to
the Giordano Agreement, Mr. Giordano received a severance payment
equal to $350,000. Pursuant to the Allen Agreement, Mr. Allen
ceased serving as an employee of the Company effective as of the
Separation Date. Pursuant to the Allen Agreement, Mr. Allen
received a severance payment equal to $150,000.
On July
11, 2018, we entered into a consulting agreement (the
“Consulting Agreement”) with Ascentaur, LLC
(“Ascentaur”). Sebastian Giordano is the Chief
Executive Officer of Ascentaur, LLC. Pursuant to the terms of the
Consulting Agreement, Ascentaur has agreed to provide advisory
services with respect to the strategic development and growth of
the Company, including advising the Company on market strategy and
overall Company strategy, advising the Company on the sale of the
Company’s WPCS International business segment, providing
assistance to the Company in identifying and recruiting prospective
employees, customers, business partners, investors and advisors
that offer desirable administrative, financing, investment,
technical, marketing and/or strategic expertise, and performing
such other services pertaining to the Company’s business as
the Company and Ascentaur may from time to time mutually agree. As
consideration for its services under the Consulting Agreement,
Ascentaur shall be entitled to receive (i) a fee of $10,000 per
month for a period of nine months from the effective date of the
Consulting Agreement, (ii) a lump sum fee of $90,000 upon the
closing of the sale of the Company’s WPCS International
business segment and (iii) reimbursement for reasonable and
customary business expenses incurred in connection with
Ascentaur’s performance under the Consulting
Agreement.
Outstanding Equity Awards at 2018 Fiscal Year-End
The following table shows grants of stock options
and grants of unvested stock awards outstanding on the last day of
the fiscal year ended December 31, 2018, including both awards
subject to performance conditions and non-performance-based
awards,
to each of the executive officers named in the
Summary Compensation Table.
|
Name
|
Number of Securities underlying Unexercised Options (#)
Exercisable
|
Number of Securities underlying Unexercised Options (#)
Unexercisable
|
Option Exercise Price ($/Share)
|
Option Expiration Date
|
Number of Shares or Units of Stock that have not vested
(#)
|
Market Value
of Shares or
units
of Stock that
have not
vested ($)
|
|
Spencer
Richardson
|
11,057
|
-
|
$
9.72
|
December
23, 2028
|
20,387
|
154,125
|
|
David
Newman
|
11,057
|
-
|
$
9.72
|
December
23, 2028
|
20,387
|
154,125
|
|
Paul
Commons
|
-
|
3,236
|
$
79.56
|
February
28, 2018
|
-
|
-
|
|
Leandro
Larroulet
|
-
|
626
|
$
79.56
|
February
28, 2018
|
-
|
-
|
(1)
Stock
options were granted under the Amended and Restated 2014 Equity
Incentive Plan and became fully vested upon the closing of the
Merger.
Pension Benefits
We do
not have any qualified or non-qualified defined benefit
plans.
15
Nonqualified Deferred Compensation
We do
not have any nonqualified defined contribution plans or other
deferred compensation plan.
Potential Payments upon Termination or
Change-In-Control
On
October 21, 2015, our subsidiary, WPCS International - Suisun City,
Inc. (the “Suisun City Operations”), entered into a
change in control agreement with Robert Roller, the President of
the Suisun City Operations. The agreement had an initial term of
two years and automatically extends for additional one-year periods
at the expiration of the initial term and on each anniversary
thereafter unless either party notifies the other party of
non-renewal no later than 30 days prior to such anniversary. Upon a
change in control of the Company or the Suisun City Operations, the
agreement continues for a term of two years and then expires.
Pursuant to the terms of the agreement, Mr. Roller is entitled to a
severance payment of $150,000 and unpaid compensation and benefits
and unused vacation accrued through the date of termination, if he
is terminated without cause or if he is terminated for good reason
within two years following a change in control of the Company or
the Suisun City Operations.
On
September 29, 2015, we entered into change of control agreements
with Messrs. Giordano and Allen. The agreements had initial terms
of four years and automatically extended for additional one-year
periods thereafter, unless either party notified the other of
non-renewal no later than 30 days prior to such anniversary. Under
the agreements, Messrs. Giordano and Allen received payments of
$350,000 and $150,000, respectively upon a change in control of the
Company.
On
January 30, 2018, in connection with the consummation of the
Merger, Mr. Giordano received a severance payment equal to $350,000
and Mr. Allen received a severance payment equal to $150,000. The
payment of the severance benefits was made immediately following
the closing of the transactions contemplated by the Merger
Agreement, as contemplated by the Merger Agreement.
Director Compensation
The
following table shows the total compensation paid or accrued during
the fiscal year ended December 31, 2018 to each of our non-employee
directors. Directors who are employed by us are not compensated for
their service on our Board.
|
Name
|
Fees
Earned or
Paid
in
Cash
($)
|
Option
Awards ($) (1)
|
Non-equity
incentive plan Compensation($)
|
Nonqualified
deferred compensation ($)
|
All
other compensation
|
Total
($)
|
|
Brian Harrington
(2)
|
25,588
|
20,042
|
-
|
-
|
|
45,630
|
|
Greg
Schiffman
|
25,588
|
20,042
|
-
|
-
|
|
45,630
|
|
Joshua
Silverman
|
81,838
|
30,046
|
-
|
-
|
|
111,884
|
|
Sebastian
Giordano
|
56,667
|
20,042
|
-
|
-
|
91,087
(3)
|
167,796
|
|
Solomon
Mayer
|
25,588
|
20,042
|
-
|
-
|
|
45,630
|
|
Zvi
Joseph
|
25,588
|
20,043
|
-
|
-
|
|
45,630
|
(1)
The dollar amounts
in this column represent the aggregate grant date fair value
computed in accordance with FASB ASC Topic 718. The assumptions
underlying the determination of fair value of the awards are set
forth in Note 3 the financial statements included in this Annual
Report on Form 10-K.
(2)
Mr. Harrington
resigned as a member of the Board effective February 6,
2019.
(3)
Mr. Giordano earned
$147,754 through the consulting agreement between the Company and
Ascentaur LLC. $90,000 of these earnings was tied to the successful
sale of the Suisun City Operations in December 2018.
From
January 31, 2018 through May 14, 2018 the Board earned cash
compensation at the rate of $2,000 per month. Effective on May 15,
2018, the Company’s directors’ receive annual
compensation of $30,000 and the Chairperson receives annual
compensation of $120,000 per year for their service on the Board,
with the exception that Mr. Giordano’s compensation was
addressed through the consulting arrangement between Ascentaur LLC
and the Company through March 10, 2019. Additionally, in May of
2018, option grants were awarded based upon the value of $30,000
for the Chairperson and $20,000 for the other non-employee
directors.
On July
30, 2019, the Board approved of certain modifications to director
compensation. As consideration for services to the Board, the
Chairman of the Board receives an annual cash retainer equal to
$90,000 and each non-Chairman member of the Board receives an
annual cash retainer equal to $30,000, each to be paid in equal
weekly installments or as determined by the Compensation
Committee.
16
EQUITY
COMPENSATION PLAN INFORMATION
The
following table provides certain aggregate information with respect
to all of the Company’s equity compensation plans in effect
as of December 31, 2018.
|
|
(a)
|
(b)
|
(c)
|
|
Plan
category
|
Number
of securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities remaining available for future issuance
under
equity compensation plans (excluding securities reflected in column
(a))
|
|
Equity compensation
plans approved by security holders (1)
|
547,416
|
$
18.30
|
159,213
|
|
Total
|
547,416
|
$
18.30
|
159,213
|
(1)
This
plan consists of the DropCar, Inc. Amended and Restated 2014 Equity
Incentive Plan.
REPORT
OF AUDIT COMMITTEE
The
Audit Committee of the Board, which consists entirely of directors
who meet the independence and experience requirements of The Nasdaq
Stock Market, has furnished the following report:
The
Audit Committee assists the Board in overseeing and monitoring the
integrity of our financial reporting process, compliance with legal
and regulatory requirements and the quality of internal and
external audit processes. This committee’s role and
responsibilities are set forth in our charter adopted by the Board,
which is available on our website at www.dropcar.com. This
committee reviews and reassesses our charter annually and
recommends any changes to the Board for approval. The Audit
Committee is responsible for overseeing our overall financial
reporting process, and for the appointment, compensation,
retention, and oversight of the work of our independent registered
public accounting firm. In fulfilling its responsibilities for the
financial statements for fiscal year 2018, the Audit Committee took
the following actions:
●
Reviewed and
discussed the audited financial statements for the fiscal year
ended December 31, 2018 with management and EisnerAmper LLP, our
previous independent registered public accounting
firm;
●
Discussed with
EisnerAmper LLP the matters required to be discussed in accordance
with Auditing Standard No. 1301- Communications with Audit
Committees; and
●
Received written
disclosures and the letter from EisnerAmper LLP regarding its
independence as required by applicable requirements of the Public
Company Accounting Oversight Board regarding EisnerAmper LLP
communications with the Audit Committee and the Audit Committee
further discussed with EisnerAmper LLP their independence. The
Audit Committee also considered the status of pending litigation,
taxation matters and other areas of oversight relating to the
financial reporting and audit process that the committee determined
appropriate
Based
on the Audit Committee’s review of the audited financial
statements and discussions with management and EisnerAmper LLP, the
Audit Committee recommended to the Board that the audited financial
statements be included in our Annual Report on Form 10-K which
includes financial statements for the fiscal year ended December
31, 2018, for filing with the SEC.
Members
of the DropCar, Inc. Audit Committee
Greg
Schiffman
Solomon
Mayer
Zvi
Joseph
17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), requires our directors, executive
officers and beneficial owners of more than 10% of our common stock
to file with the SEC initial reports of ownership and reports of
changes in the ownership of our common stock and other equity
securities. Such persons are required to furnish us copies of all
Section 16(a) filings.
Based
solely upon a review of the copies of the forms furnished to us, we
believe that our officers, directors and beneficial owners of more
than 10% of our common stock complied with all applicable filing
requirements during the fiscal year ended December 31,
2018.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Our
Board must approve in advance of all future transactions between us
and any director, executive officer, holder of 5% or more of any
class of our capital stock or any member of the immediate family
of, or entities affiliated with, any of them, or any other related
persons, as defined in Item 404 of Regulation S-K, or their
affiliates, in which the amount involved is equal to or greater
than $120,000. Any request for such a transaction must first be
presented to our Board for review, consideration and approval. In
approving or rejecting any such proposal, our Board is to consider
all available information deemed relevant by the Board, including,
but not limited to, the extent of the related person’s
interest in the transaction, and whether the transaction is on
terms no less favorable to us than terms we could have generally
obtained from an unaffiliated third party under the same or similar
circumstances.
Indemnification Agreements
We
have entered into indemnification agreements with each of our
directors and executive officers. These agreements, among other
things, require us to indemnify each director and executive officer
to the fullest extent permitted by Delaware law, including
indemnification of expenses such as attorneys’ fees,
judgments, penalties fines and settlement amounts incurred by the
director or executive officer in any action or proceeding,
including any action or proceeding by or in right of the Company,
arising out of the person’s services as a director or
executive officer.
Sale of Suisun City Operations
On
December 24, 2018, we completed the previously announced sale of
the Suisun City Operations, pursuant to the terms of a stock
purchase agreement, dated December 10, 2018 by and between us and
World Professional Cabling Systems, LLC, a California limited
liability company (the “Purchaser”). Upon the closing
of the sale, the Purchaser acquired all of the issued and
outstanding shares of common stock, no par value per share, of
Suisun City Operations, for an aggregate purchase price of
$3,500,000.
Ascentaur LLC Agreement
On
July 11, 2018, we entered into a consulting agreement (the
“Consulting Agreement”) with Ascentaur, LLC
(“Ascentaur”). Sebastian Giordano is the Chief
Executive Officer of Ascentaur, LLC. Pursuant to the terms of the
Consulting Agreement, Ascentaur has agreed to provide advisory
services with respect to the strategic development and growth of
the Company, including advising the Company on market strategy and
overall Company strategy, advising the Company on the sale of the
Company’s WPCS International business segment, providing
assistance to the Company in identifying and recruiting prospective
employees, customers, business partners, investors and advisors
that offer desirable administrative, financing, investment,
technical, marketing and/or strategic expertise, and performing
such other services pertaining to the Company’s business as
the Company and Ascentaur may from time to time mutually agree. As
consideration for its services under the Consulting Agreement,
Ascentaur shall be entitled to receive (i) a fee of $10,000 per
month for a period of nine months from the effective date of the
Consulting Agreement, (ii) a lump sum fee of $90,000 upon the
closing of the sale of the Company’s WPCS International
business segment and (iii) reimbursement for reasonable and
customary business expenses incurred in connection with
Ascentaur’s performance under the Consulting
Agreement.
18
ELECTION OF DIRECTORS
(Notice Item 1)
General
On
November 5, 2019, the Board nominated Spencer Richardson, David
Newman, Sebastian Giordano, Zvi Joseph, Solomon Mayer, Joshua
Silverman and Greg Schiffman for election at the annual meeting. If
they are elected, they will serve on our Board until the 2020
annual meeting of stockholders and until their respective
successors have been elected and qualified.
Unless authority to vote for any of these nominees
is withheld, the shares represented by the enclosed proxy will be
voted
FOR
the election as directors of Spencer Richardson,
David Newman, Sebastian Giordano, Zvi Joseph, Solomon Mayer, Joshua
Silverman and Greg Schiffman. In the event that any nominee becomes
unable or unwilling to serve, the shares represented by the
enclosed proxy will be voted for the election of such other person
as the Board may recommend in that nominee’s place. We have
no reason to believe that any nominee will be unable or unwilling
to serve as a director.
Vote Required and Board’s Recommendation
The
nominees for director who receive the most votes (also known as a
“plurality” of the votes cast) will be
elected.
THE BOARD RECOMMENDS THE ELECTION OF SPENCER RICHARDSON, DAVID
NEWMAN, SEBASTIAN GIORDANO, ZVI JOSEPH, SOLOMON MAYER, JOSHUA
SILVERMAN AND GREG SCHIFFMAN AS DIRECTORS, AND PROXIES SOLICITED BY
THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
19
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Notice Item 2)
General
The
Audit Committee has appointed Friedman LLP as our independent
registered public accounting firm, to audit our financial
statements for the fiscal year ending December 31, 2019. The Board
proposes that the stockholders ratify this appointment. We expect
that representatives of Friedman LLP will be present at the annual
meeting, will be able to make a statement if they so desire, and
will be available to respond to appropriate questions.
In
deciding to appoint Friedman LLP, the Audit Committee reviewed
auditor independence issues and existing commercial relationships
with Friedman LLP and concluded that Friedman LLP has no commercial
relationship with the Company that would impair its independence
for the fiscal year ending December 31, 2019.
The
following table presents fees for professional audit services
rendered by EisnerAmper LLP for the audit of the Company’s
annual financial statements for the years ended December 31, 2018
and December 31, 2017 and fees billed for other services rendered
by EisnerAmper LLP during those periods. EisnerAmper LLP served as
our independent registered public accounting firm until July 3,
2018, at which time EisnerAmper LLP was dismissed and Friedman LLP
was engaged.
|
|
2018
|
2017
|
|
Audit
Fees:(1)
|
$
421,373
|
307,654
|
|
Audit-Related
Fees:(2)
|
59,986
|
-
|
|
Tax
Fees:(3)
|
-
|
-
|
|
All
Other Fees:(4)
|
-
|
-
|
|
Total
|
$
481,359
|
$
307,654
|
(1)
Audit Fees
include fees for services rendered for the audit
of our annual financial statements, the review of financial
statements included in our quarterly reports on Form 10-Q,
assistance with and review of documents filed with the SEC and
consents and other services normally provided in connection with
statutory and regulatory filings or
engagements.
(2)
Audit-Related Fees
principally include fees incurred for
due diligence in connection with potential transactions and
accounting consultations.
(3)
Tax Fees
would include fees for services rendered for tax
compliance, tax advice, and tax planning. There were no Tax Fees
incurred with EisnerAmper LLP in 2018 and 2017.
(4)
All Other Fees
would include fees that do not
constitute Audit Fees, Audit-Related Fees, or Tax
Fees.
20
Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-audit Services of Independent Public Accountant
Consistent
with SEC policies regarding auditor independence, the Audit
Committee has responsibility for appointing, setting compensation
and overseeing the work of our independent registered public
accounting firm. In recognition of this responsibility, the Audit
Committee has established a policy to pre-approve all audit and
permissible non-audit services provided by our independent
registered public accounting firm.
Prior
to engagement of an independent registered public accounting firm
for the next year’s audit, management will submit an
aggregate of services expected to be rendered during that year for
each of four categories of services to the Audit Committee for
approval.
1.
Audit
services include audit work performed
in the preparation of financial statements, as well as work that
generally only an independent registered public accounting firm can
reasonably be expected to provide, including comfort letters,
statutory audits, and attest services and consultation regarding
financial accounting and/or reporting
standards.
2.
Audit-Related
services are for assurance and related
services that are traditionally performed by an independent
registered public accounting firm, including due diligence related
to mergers and acquisitions, employee benefit plan audits, and
special procedures required to meet certain regulatory
requirements.
3.
Tax
services include all services
performed by an independent registered public accounting
firm’s tax personnel except those services specifically
related to the audit of the financial statements, and includes fees
in the areas of tax compliance, tax planning, and tax
advice.
4.
Other
Fees
are those associated with
services not captured in the other categories. The Company
generally does not request such services from our independent
registered public accounting firm.
Prior
to engagement, the Audit Committee pre-approves these services by
category of service. The fees are budgeted and the Audit Committee
requires our independent registered public accounting firm and
management to report actual fees versus the budget periodically
throughout the year by category of service. During the year,
circumstances may arise when it may become necessary to engage our
independent registered public accounting firm for additional
services not contemplated in the original pre-approval. In those
instances, the Audit Committee requires specific pre-approval
before engaging our independent registered public accounting
firm.
The
Audit Committee may delegate pre-approval authority to one or more
of its members. The member to whom such authority is delegated must
report, for informational purposes only, any pre-approval decisions
to the Audit Committee at its next scheduled meeting.
In
the event the stockholders do not ratify the appointment of
Friedman LLP as our independent registered public accounting firm,
the Audit Committee will reconsider its appointment.
Vote Required and Board’s Recommendation
The
affirmative vote of a majority of the votes cast in person or by
proxy at the annual meeting is required to ratify the appointment
of Friedman LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2019.
THE BOARD RECOMMENDS A VOTE TO RATIFY THE APPOINTMENT OF FRIEDMAN
LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND
PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH
RATIFICATION UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE
PROXY.
21
ADVISORY VOTE ON APPROVAL OF EXECUTIVE COMPENSATION AS DISCLOSED IN
THIS PROXY STATEMENT
(Notice Item 3)
General
We
are seeking your advisory vote as required by Section 14A of the
Securities Exchange Act of 1934, as amended, on the approval of the
compensation of our named executive officers as described in the
compensation tables and related material contained in this proxy
statement. Because your vote is advisory, it will not be binding on
our Compensation Committee or our Board. However, the Compensation
Committee and the Board will review the voting results and take
them into consideration when making future decisions regarding
executive compensation.
Our
compensation philosophy is designed to align each executive’s
compensation with DropCar’s short-term and long-term
performance and to provide the compensation and incentives needed
to attract, motivate and retain key executives who are crucial to
our long-term success. Consistent with this philosophy, a
significant portion of the total compensation opportunity for each
of our executives is directly related to performance factors that
measure our progress against the goals of our strategic and
operating plans, as well as our performance against that of our
peer companies.
In
accordance with the rules of the SEC, the following resolution,
commonly known as a “say-on-pay” vote, is being
submitted for a stockholder vote at the 2019 annual
meeting:
“RESOLVED,
that the compensation paid to the named executive officers of
DropCar, as disclosed pursuant to the compensation disclosure rules
of the Securities and Exchange Commission, including the
compensation tables and the related material disclosed in this
proxy statement, is hereby APPROVED.”
Vote Required and Board’s Recommendation
The
affirmative vote of a majority of the votes cast in person or by
proxy at the annual meeting is required to approve, on an advisory
basis, the compensation of our named executive officers, as
described in this proxy statement.
THE BOARD RECOMMENDS A VOTE TO APPROVE THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS, AND PROXIES SOLICITED BY THE BOARD WILL
BE VOTED IN FAVOR OF SUCH APPROVAL UNLESS A STOCKHOLDER INDICATES
OTHERWISE ON THE PROXY.
22
APPROVAL OF THE ADJOURNMENT OF THE ANNUAL MEETING, IF NECESSARY, TO
SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES IN
FAVOR OF ANY OF THE FOREGOING PROPOSALS
(Notice Item 4)
We
are asking our stockholders to vote on a proposal to approve the
adjournment of the annual meeting, if necessary, to solicit
additional proxies if there are not sufficient votes in favor of
the foregoing proposals.
Vote Required and Board’s Recommendation
The
affirmative vote of a majority of the votes cast in person or by
proxy at the annual meeting is required to approve, on an advisory
basis, the compensation of our named executive officers, as
described in this proxy statement.
THE BOARD RECOMMENDS A VOTE “FOR” THE ADJOURNMENT OF
THE ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF
THERE ARE NOT SUFFICIENT VOTES IN FAVOR OF ANY OF THE FOREGOING
PROPOSALS.
23
CODE OF CONDUCT AND ETHICS
We have adopted a code of conduct and ethics that
applies to all of our employees, including our chief executive
officer and chief financial and accounting officers. The text of
the code of conduct and ethics will be posted on our website
at
www.dropcar.com
and will be made available to
stockholders without charge, upon request, in writing to the
Corporate Secretary at 1412 Broadway, Suite 2105, New York, New
York 10018. Disclosure regarding any amendments to, or waivers
from, provisions of the code of conduct and ethics that apply to
our directors, principal executive and financial officers will be
included in a Current Report on Form 8-K within four business days
following the date of the amendment or waiver, unless website
posting or the issuance of a press release of such amendments or
waivers is then permitted by the rules of The Nasdaq Stock
Market.
OTHER MATTERS
The
Board knows of no other business which will be presented to the
annual meeting. If any other business is properly brought before
the annual meeting, proxies will be voted in accordance with the
judgment of the persons named therein.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR
To
be considered for inclusion in the proxy statement relating to our
2020 annual meeting of stockholders, we must receive stockholder
proposals no earlier than August 17, 2020 and no later than
September 16, 2020. Proposals that are not received in a timely
manner will not be voted on at the 2020 annual meeting. If a
proposal is received on time, the proxies that management solicits
for the meeting may still exercise discretionary voting authority
on the proposal under circumstances consistent with the proxy rules
of the SEC. All stockholder proposals should be marked for the
attention of the Corporate Secretary, DropCar, Inc., 1412 Broadway,
Suite 2105, New York, New York 10018.
New
York, New York
November
6, 2019
24
APPENDIX A — FORM OF
PROXY CARD
TABLE OF CONTENTS