|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended
December 31,
2024
|
|
|
Year
ended
December 31,
2023
|
|
|
Audit fees(1)
|
|
$
|
610,037
|
|
|
$
|
684,591
|
|
|
Tax fees(2)
|
|
|
27,417
|
|
|
|
64,605
|
|
|
Total
|
|
$
|
637,454
|
|
|
$
|
749,196
|
|
(1)
Audit fees consists of fees billed or incurred for professional services rendered in connection with the audit of our consolidated financial statements and review of the interim condensed consolidated financial statements included in our quarterly reports.
(2)
Tax fees includes services related to the preparation or review of the U.S. federal, state and local tax returns, and other advisory and professional services.
PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by the Company’s independent auditors, Deloitte Touche LLP. The Audit Committee generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
All of the services of Deloitte Touche LLP for the years ended December 31, 2024 and 2023 described above were pre-approved in accordance with the Audit Committee Pre-Approval Policy.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “
FOR
” PROPOSAL NO. 2
.
PROPOSAL NO. 3
APPROVAL OF REVERSE STOCK SPLIT
Background Regarding Reverse Stock Split
Our Board has adopted and deemed advisable, and is recommending that our stockholders approve, a series of alternate amendments to the Company’s Amended and Restated Certificate of Incorporation, each of which would
•
effect a reverse stock split (the “Reverse Stock Split”) of all of the outstanding shares of our common stock at a ratio of between 1-for-10 and 1-for-30, inclusive; and
•
effect a proportionate reduction in the total number of authorized shares of our common stock (the “Authorized Shares Reduction”).
Accordingly, effecting a Reverse Stock Split would reduce the number of outstanding shares of our common stock and the Authorized Shares Reduction would reduce the total number of authorized shares of our common stock. The form of the proposed amendment to our amended and restated certificate of incorporation to effect the Reverse Stock Split is attached as
Appendix A
to this Proxy Statement. However, the text of the proposed amendment is subject to revision to include such changes as may be required by the Secretary of State of the State of Delaware and as the Board deems necessary or advisable to effect the proposed amendment of our amended and restated certificate of incorporation.
Our stockholders are being asked to approve these proposed amendments pursuant to this Proposals 3, and to grant authorization to our Board of Directors to determine, in its discretion, whether to implement a Reverse Stock Split, including its specific timing and ratio, and the resulting corresponding proportionate Authorized Shares Reduction. The corresponding proportionate Authorized Shares Reduction was designed so that we do not have what some stockholders might view as an unreasonably high number of authorized shares of common stock that are unissued or reserved for issuance following the Reverse Stock Split.
By approving this proposal, stockholders will (i) approve a series of amendments to our amended and restated certificate of incorporation pursuant to which any whole number of outstanding shares between and including 10 and 30 would be combined into one share of our common stock along with a corresponding proportionate reduction in the total number of authorized shares of our common stock and (ii) authorize the Board to file only one such amendment, as determined by the Board in the manner described herein and to abandon each amendment not selected by the Board. The Board believes that stockholder approval granting this discretion, rather than approval of a specified stock split ratio, provides the Board with maximum flexibility to react to then-current market conditions and, therefore, is in the best interests of the Company and its stockholders. The Board may effect only one Reverse Stock Split and Authorized Shares Reduction as a result of this authorization. The Board may also elect not to execute any Reverse Stock Split. The Board’s decision as to whether and when to effect the Reverse Stock Split and Authorized Shares Reduction and determining the Reverse Stock Split ratio will be based on a number of factors, including market conditions, existing and expected trading prices and volumes for our common stock, and the continued listing requirements of The Nasdaq Capital Market. Although our stockholders may approve the Reverse Stock Split and Authorized Shares Reduction, we will not effect the Reverse Stock Split and Authorized Shares Reduction if our Board does not deem it to be in the best interests of the Company and its stockholders. The Reverse Stock Split and Authorized Shares Reduction will take effect, if at all, after it is approved by a majority of the total votes cast on this proposal, is deemed by the Board to be in the best interests of the Company and its stockholders, and after filing the amendment to our amended and restated certificate of incorporation with the Secretary of State of the State of Delaware.
In the event that approval for the Reverse Stock Split is obtained, and the Board does not execute the Reverse Stock Split and Authorized Shares Reduction within the 12-month period following the Annual Meeting, further stockholder approval would be required prior to implementing any reverse stock split.
Reasons for the Reverse Stock Split and Authorized Shares Reduction
Our common stock is currently listed on The Nasdaq Capital Market tier of Nasdaq. In order for our common stock to continue to be listed on The Nasdaq Capital Market, we must satisfy various listing maintenance standards established by Nasdaq. If we are unable to meet the applicable listing requirements, our common stock will be subject to delisting. Under Nasdaq’s continued listing requirements, if the closing bid price of our common stock is under $1.00 per share for 30 consecutive business days and does not thereafter reach $1.00 per share or higher for a minimum of 10 consecutive business days during the 180 calendar days following notification by Nasdaq, our common stock would be subject to delisting by Nasdaq.
As previously reported, on July 10, 2024, we received a letter from the Listing Qualifications Department of Nasdaq notifying us that the listing of our common stock was not in compliance with Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market, as the minimum bid price of the Company’s common stock was less than $1.00 per share for the previous 30 consecutive business days. Under Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until January 6,
2025, to regain compliance with the rule referred to in this paragraph. To regain compliance, during this 180-day compliance period, our minimum bid price of listed securities had to close at $1.00 per share or more for a minimum of 10 consecutive business days. Even if we did not regain compliance prior to the expiration of such 180-day compliance period, we would be eligible for additional time to regain compliance by transferring to the Nasdaq Capital Market.
We did not regain compliance with the minimum bid price rule prior to January 6, 2025. However, we
were notified by Nasdaq in a letter dated January 7, 2025 that our application to transfer to the Nasdaq Capital Market was approved and we are eligible for an additional 180 calendar day period, or until July 7, 2025, to regain compliance with the minimum bid price requirement. At the opening of business on January 8, 2025, our common stock was transferred to the Nasdaq Capital Market, where it continues to trade under the symbol “SNSE”.
Accordingly, the Board has adopted resolutions, subject to approval by our stockholders, to amend our amended and restated certificate of incorporation to effect the Reverse Stock Split and Authorized Shares Reduction of our common stock at a ratio in the range of one-for-10 to one-for-30 with such ratio to be determined in the discretion of the Board. These resolutions were approved as a means of regaining compliance with the minimum bid price requirement.
The Board’s primary objective in proposing the Reverse Stock Split and Authorized Shares Reduction is to raise the per share trading price of our common stock. The Board believes that the Reverse Stock Split and Authorized Shares Reduction will result in a higher per share trading price, which is intended to enable us to maintain the listing of our common stock on The Nasdaq Capital Market and generate greater investor interest in the Company.
The Board believes that maintaining the listing of our common stock on The Nasdaq Capital Market is in the best interests of the Company and its stockholders. If our common stock were to be delisted from The Nasdaq Capital Market, the Board believes that such delisting could adversely affect the market liquidity of our common stock, decrease the market price of our common stock, adversely affect our ability to obtain financing for the continuation of our operations and result in the loss of confidence in the Company.
If the Reverse Stock Split and Authorized Shares Reduction is approved by our stockholders and implemented by the Board, we expect to satisfy the $1.00 per share minimum bid price requirement for continued listing on the Nasdaq Capital Market. However, despite the approval of the Reverse Stock Split by our stockholders and implementation by the Board, there can be no assurance that the Reverse Stock Split will result in our meeting and maintaining the $1.00 minimum bid price requirement. The effect of the Reverse Stock Split upon the market price for our common stock cannot be predicted, and the history of similar reverse stock splits for companies in like circumstances is varied. The market price per share of our common stock after the Reverse Stock Split may not rise in proportion to the reduction in the number of shares of our common stock outstanding resulting from the Reverse Stock Split due to, among other reasons, our performance and other factors that may be unrelated to the number of shares outstanding. Our common stock could also be delisted from The Nasdaq Capital Market due to our failure to comply with one or more other Nasdaq listing rules.
Authorized Shares Reduction to avoid stockholder concerns of excessive authorized and unissued shares
As a matter of Delaware law, the implementation of a Reverse Stock Split does not require a reduction in the total number of authorized shares of our common stock. The corresponding proportionate Authorized Shares Reduction was designed so that we do not have what some stockholders might view as an unreasonably high number of authorized shares of common stock that are unissued or reserved for issuance following the Reverse Stock Split.
Criteria to be Used for Decision to Implement the Reverse Stock Split
In the event that approval for the Reverse Stock Split is obtained, our Board will be authorized to proceed with the Reverse Stock Split and Authorized Shares Reduction at any time during the 12-month period following the Annual Meeting. If we regain compliance with the minimum bid price requirement prior to July 7, 2025, our Board may use its discretion to not carry out or to delay in carrying out the Reverse Stock Split.
In the event our Board delays its decision to execute the Reverse Stock Split and Authorized Shares Reduction because the Company has regained compliance with the minimum bid price requirement, if our common stock price again falls below $1.00 for a 30-day during the 12-month period following the Annual Meeting, and therefore again fails to comply with the applicable Nasdaq Capital Market minimum listing requirements, then the Reverse Stock Split may be executed as a cure for this condition.
Principal Effects Of Reverse Stock Split and Corresponding Proportionate Authorized Share Reduction on Outstanding Common Stock and Authorized Common Stock
The following table illustrates the effects of a 1-for-10, 1-for-20 and 1-for-30 Reverse Stock Split on our outstanding common stock as of March 15, 2025, without giving effect to any adjustments for fractional shares and information regarding our authorized shares based on the corresponding proportionate Authorized Shares Reduction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse Stock Split Ratio
|
|
|
—
|
|
|
10:1
|
|
|
20:1
|
|
|
30:1
|
|
|
Number of Shares of Common Stock Authorized
|
|
|
250,000,000
|
|
|
|
25,000,000
|
|
|
|
12,500,000
|
|
|
|
8,333,333
|
|
|
Number of shares of Common Stock Issued and Outstanding
|
|
|
25,208,068
|
|
|
|
2,520,806
|
|
|
|
1,260,403
|
|
|
|
840,268
|
|
|
Number of Shares of Common Stock Reserved for Future Issuance
|
|
|
9,174,209
|
|
|
|
917,420
|
|
|
|
458,710
|
|
|
|
305,806
|
|
|
Number of Shares of Common Stock Authorized but Unissued and Unreserved
|
|
|
215,617,723
|
|
|
|
21,561,774
|
|
|
|
10,780,887
|
|
|
|
7,187,259
|
|
The Reverse Stock Split will affect all of our stockholders uniformly and will not materially affect any stockholder’s percentage ownership interests in the Company or proportionate voting power. The Reverse Stock Split will not change the terms of our common stock. The shares of new common stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to the common stock now authorized (other than as a result of the payment of cash in lieu of fractional shares). For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately prior to a Reverse Stock Split would continue to hold 2% of the voting power of the outstanding shares of our common stock immediately after such Reverse Stock Split. The number of stockholders of record will not be affected by a Reverse Stock Split (except to the extent that any stockholder holds only a fractional share interest and receives cash for such interest after such Reverse Stock Split). The common stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934. We will continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934.
The principal effects of a Reverse Stock Split on will be that:
•
each 10 to 30 shares of our common stock owned by a stockholder (depending on the Reverse Stock Split ratio selected by the Board), will be combined into one new share of our common stock;
•
no fractional shares of common stock will be issued in connection with any Reverse Stock Split; instead, holders of common stock who would otherwise receive a fractional share of common stock pursuant to the Reverse Stock Split will receive cash in lieu of the fractional share as explained more fully below;
•
based upon the Reverse Stock Split ratio selected by the Board, proportionate adjustments will be made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all then outstanding stock options, restricted stock units and warrants, which will result in a proportional decrease in the number of shares of our common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants; and
•
the number of shares then reserved for issuance under our equity compensation plans will be reduced proportionately based upon the Reverse Stock Split ratio selected by the Board (as described below).
The principal effect of the Authorized Shares Reduction will be that the number of authorized shares of our common stock will be reduced, depending on the exact Reverse Stock Split ratio selected by the Board, if and when a Reverse Stock Split is implemented:
•
if Proposal 3 is approved, from 250,000,000 shares to a range of 25,000,000 to 8,333,333 shares
The Authorized Shares Reduction would not have any effect on the rights of existing stockholders, and the par value of the common stock would remain unchanged at $0.0001 per share.
Principal Effects of the Reverse Stock Split on Our Outstanding Equity Awards, Future Awards under Our Incentive Plans, and Future Purchases under our At-The-Market Offering
If the Reverse Stock Split is implemented, the number of shares of common stock subject to outstanding options, restricted stock unit awards and other equity awards issued by the Company, and the number of shares reserved for future issuance and all other share limits, under the Company’s 2018 Equity Incentive Plan, 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan will be reduced by the same ratio as the reduction in the outstanding shares, in each case rounded down to the nearest whole share. Correspondingly, the exercise price for individual outstanding options, on a per share basis, will be proportionally increased (the aggregate exercise price for all outstanding options will be unaffected, except for the rounding described below, but following the Reverse Stock Split such exercise price will apply to a reduced number of shares), in each case rounded up to the nearest cent. As of March 15, 2025, there were outstanding stock options to purchase an aggregate of 6,548,846 shares of common stock, at a weighted average exercise price of $4.57 per share. Assuming, for example, a 1-for-20 Reverse Stock Split, the number of shares covered by outstanding options will be reduced to one-twentieth the number currently issuable, and the exercise price of outstanding options will be increased by twenty times the current exercise price, rounded up to the nearest cent. In addition, the number of shares of our common stock we could offer in our at-the-market offering will be reduced by the same ratio as the reduction in the outstanding shares such that fewer shares would be available for sale in such offering.
Effective Date
The proposed Reverse Stock Split and corresponding proportionate Authorized Shares Reduction would become effective at 5:00 p.m., Eastern time, on the date of filing of a Reverse Split Certificate of Amendment with the office of the Secretary of State of the State of Delaware, or such later date as is chosen by the Board and set forth in the Certificate of Amendment, which date we refer to in this Proposal 3 as the Reverse Split Effective Date. Except as explained below with respect to fractional shares, effective as of 5:00 p.m., Eastern time, on the Reverse Split Effective Date, shares of common stock issued and outstanding immediately prior thereto will be combined, automatically and without any action on the part of us or our stockholders, into a lesser number of new shares of our common stock in accordance with the Reverse Stock Split ratio determined by our Board of Directors within the limits set forth in this Proposal 3.
Cash Payment in Lieu of Fractional Shares
No fractional shares of common stock will be issued as a result of any Reverse Stock Split. Instead, in lieu of any fractional shares to which a holder of common stock would otherwise be entitled as a result of the Reverse Stock Split, Sensei will pay cash (without interest) equal to such fraction multiplied by the average of the closing sales prices of the common stock on The Nasdaq Global Market during regular trading hours for the five consecutive trading days immediately preceding the Reverse Split Effective Date (with such average closing sales prices being adjusted to give effect to the Reverse Stock Split). After the Reverse Stock Split, a stockholder otherwise entitled to a fractional interest will not have any voting, dividend or other rights with respect to such fractional interest except to receive payment as described above.
As of March 25, 2025, there were 196 stockholders of record of our common stock, which number of record holders includes those holders who are deemed record holders for purposes of the Exchange Act. Upon stockholder approval of this Proposal 3, if our Board of Directors elects to implement the proposed Reverse Stock Split, stockholders owning, prior to the Reverse Stock Split, less than the number of whole shares of common stock that will be combined into one share of common stock in the Reverse Stock Split would no longer be stockholders. For example, if a stockholder held five shares of common stock immediately prior to the Reverse Stock Split and the Reverse Stock Split ratio selected by the Board was 1:20, then such stockholder would cease to be a stockholder of Sensei following the Reverse Stock Split and would not have any voting, dividend or other rights except to receive payment for the fractional share as described above. In addition, we do not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Exchange Act.
Record and Beneficial Stockholders
If this Proposal 3 is approved by our stockholders and our Board of Directors elects to implement a Reverse Stock Split, stockholders of record holding all of their shares of our common stock electronically in book-entry form under the direct registration system for securities will be automatically exchanged by the exchange agent and will receive a transaction statement at their address of record indicating the number of new post-split shares of our common stock they hold after the Reverse Stock Split along with payment in lieu of any fractional shares. Non-registered stockholders holding common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the Reverse Stock Split than those that would be put in place by us for registered stockholders. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.
If this Proposal 3 is approved by our stockholders and our Board of Directors elects to implement a Reverse Stock Split, stockholders of record holding some or all of their shares in certificate form will receive a letter of transmittal from Sensei or its exchange agent, as soon as practicable after the effective date of the Reverse Stock Split. Our transfer agent is expected to act as “exchange agent” for the purpose of implementing the exchange of stock certificates. Holders of pre-Reverse Stock Split shares will be asked to surrender to the exchange agent certificates representing pre-Reverse Stock Split shares in exchange for post-Reverse Stock Split shares and payment in lieu of fractional shares (if any) in accordance with the procedures to be set forth in the letter of transmittal. No new post-Reverse Stock Split share certificates will be issued to a stockholder holding shares in certificate form until such stockholder has surrendered such stockholder’s outstanding certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent.
STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.
Potential Anti-Takeover Effect
An increase in the number of our authorized but unissued shares of common stock relative to the number of outstanding shares of common stock may also, under certain circumstances, be construed as having an anti-takeover effect. Although not designed or intended for such purposes, the effect of the Reverse Stock Split might be to render more difficult or to discourage a merger, tender offer, proxy contest or change in control of us and the removal of management, which stockholders might otherwise deem favorable. For example, the authority of the Board to issue common stock might be used to create voting impediments or to frustrate an attempt by another person or entity to effect a takeover or otherwise gain control of us because the issuance of additional common stock would dilute the voting power of the common stock and preferred stock then outstanding. Our common stock could also be
issued to purchasers who would support the Board in opposing a takeover bid which our board determines not to be in our best interests and those of our stockholders. The Board is not presently aware of any attempt, or contemplated attempt, to acquire control of us and the Reverse Stock Split is not part of any plan by the Board to recommend or implement a series of anti-takeover measures.
Accounting Matters
The par value of the shares of our common stock is not changing as a result of the implementation of the Reverse Stock Split. Our stated capital, which consists of the par value per share of our common stock multiplied by the aggregate number of shares of our common stock issued and outstanding, will be reduced proportionately on the effective date of the Reverse Stock Split. Correspondingly, our additional paid-in capital, which consists of the difference between our stated capital and the aggregate amount paid to us upon the issuance of all currently outstanding shares of our common stock, will be increased by a number equal to the decrease in stated capital. Further, net loss per share, book value per share and other per share amounts will be increased as a result of the Reverse Stock Split because there will be fewer shares of common stock outstanding.
Possible Disadvantages of Reverse Stock Split
Even though the Board believes that the potential advantages of the Reverse Stock Split outweigh any disadvantages that might result, the following are some of the possible disadvantages of a Reverse Stock Split:
•
The reduced number of shares of our common stock resulting from a Reverse Stock Split could adversely affect the liquidity of our common stock.
•
The Reverse Stock Split could result in a significant devaluation of our market capitalization and the trading price of our common stock, on an actual or an as-adjusted basis, based on the experience of other companies that have effected reverse stock splits.
•
The Reverse Stock Split may leave certain stockholders with one or more “odd lots,” which are stock holdings in amounts of less than 100 shares of our common stock. These odd lots may be more difficult to sell than shares of common stock in even multiples of 100. Additionally, any reduction in brokerage commissions resulting from the Reverse Stock Split may be offset, in whole or in part, by increased brokerage commissions required to be paid by stockholders selling odd lots created by the Reverse Stock Split.
•
There can be no assurance that the market price per new share of our common stock after the Reverse Stock Split will increase in proportion to the reduction in the number of old shares of our common stock outstanding before the Reverse Stock Split. For example, based on the closing market price of our common stock on March 18, 2025 of $0.44 per share of common stock, if the stockholders approve this proposal and the Board selects and implements a Reverse Stock Split ratio of 1-for-20, there can be no assurance that the post-split market price of our common stock would be $8.80 per share or greater. Accordingly, the total market capitalization of our common stock after the proposed Reverse Stock Split may be lower than the total market capitalization before the proposed Reverse Stock Split and, in the future, the market price of our common stock following the Reverse Stock Split may not exceed or remain higher than the market price prior to the proposed Reverse Stock Split.
•
While the Board believes that a higher stock price may help generate investor interest, there can be no assurance that the Reverse Stock Split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.
•
If the Reverse Stock Split is effected and the market price of our common stock declines, the percentage decline may be greater than would occur in the absence of a Reverse Stock Split. The market price of our common stock will, however, also be based on our performance and other factors, which are unrelated to the number of shares outstanding.
Procedure for Effecting Reverse Stock Split
If our stockholders approve the Reverse Stock Split, the Reverse Stock Split would become effective at such time as it is deemed by our Board to be in the best interests of the Company and its stockholders and we file the amendment to our amended and restated certificate of incorporation with the Secretary of State of Delaware. Even if the Reverse Stock Split is approved by our stockholders, the Board has discretion not to carry out, or to delay in carrying out, the Reverse Stock Split. Upon the filing of the amendment, all of our old common stock will be converted into new common stock as set forth in the amendment. As soon as practicable after the effective time of the Reverse Stock Split, stockholders will be notified that the Reverse Stock Split has been effected.
All of our registered holders hold their shares electronically in book-entry form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If you hold registered shares in book-entry form with our transfer agent,
no action needs to be taken to receive shares of common stock following the Reverse Stock Split. If a stockholder is entitled to shares following the Reverse Stock Split, a transaction statement will automatically be sent to the stockholder’s address of record indicating the number of shares of common stock held following the Reverse Stock Split.
No Dissenters’ or Appraisal Rights
Under the Delaware General Corporation Law, our stockholders are not entitled to dissenters’ or appraisal rights with respect to our proposed amendment to our amended and restated certificate of incorporation to effect the Reverse Stock Split and we will not independently provide our stockholders with any such right.
Certain Material Federal Income Tax Consequences of the Reverse Stock Split to U.S. Holders
The following summary describes certain material U.S. federal income tax consequences of the Reverse Stock Split to certain U.S. Holders (as defined below) of our common stock, but does not purport to be a complete analysis of all potential tax effects. This discussion is based on provisions of the Internal Revenue Code of 1986, as amended (the “
Code
”), Treasury Regulations thereunder and administrative rulings, court decisions and other legal authorities related thereto, each as in effect as of the date of this proxy statement and all of which are subject to change or differing interpretations. Any such change or differing interpretation, which may or may not be retroactive, could alter the tax consequences to the stockholders described herein. This discussion is included for general informational purposes only and does not purport to consider all aspects of U.S. federal income taxation that might be relevant to a U.S. Holder. This summary, except for the discussion under “Information Reporting and Backup Withholding,” below is limited to stockholders who are U.S. Holders (as defined below).
The discussion below only addresses stockholders who hold our common stock as a capital asset within the meaning of Section 1221 of the Code (generally property held for investment). It does not address all aspects of U.S. federal income tax that may be relevant to a stockholder in light of such stockholder’s particular circumstances or to a stockholder subject to special rules, such as brokers or dealers in securities or foreign currencies, stockholders that are not U.S. Holders, regulated investment companies, real estate investment trusts, traders in securities who mark to market, banks, financial institutions or insurance companies, mutual funds, stockholders holding their stock through individual retirement or other tax-deferred accounts, tax-exempt organizations, stockholders holding their stock as “qualified small business stock” pursuant to Section 1202 of the Code or as Section 1244 stock for purposes of the Code, stockholders who acquired their stock in connection with the exercise of warrants, stock options or stock purchase plans or other employee plans or compensatory arrangements, stockholders whose functional currency is not the U.S. dollar, partnerships or other entities classified as partnerships or disregarded entities for U.S. federal income tax purposes (or persons holding our common stock through such entities), stockholders who hold their stock as part of an integrated investment (including a “straddle,” a pledge against currency risk, a hedge or other “constructive” sale or “conversion” transaction) comprised of shares of our common stock and one or more other positions, stockholders who exercise dissenters’ or appraisal rights, or stockholders who may have acquired their stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code. In addition, this summary does not address any tax consequences other than certain U.S. federal income tax consequences of the Reverse Stock Split, including the tax consequences of the Reverse Stock Split under state, local or non-U.S. tax laws, or under estate, gift, excise or other non-income tax laws, the alternative minimum tax or the Medicare contribution tax on net investment income, the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the Reverse Stock Split (whether or not any such transactions are consummated in connection with the Reverse Stock Split) including, without limitation, the tax consequences to holders of options, warrants or similar rights to acquire our common stock.
For purposes of this discussion, a “U.S. Holder” means a beneficial owner of shares of our common stock that is any of the following:
•
an individual who is a citizen or resident of the United States or someone treated as a U.S. citizen or resident for U.S. federal income tax purposes;
•
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
•
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
•
a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) are authorized or have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes.
If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our comment stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partnerships holding our common stock and the partners therein should consult their tax advisors regarding the tax consequences to them of the Reverse Stock Split.
Our view regarding the tax consequences of the Reverse Stock Split is not binding with the Internal Revenue Service (“
IRS
”) or the courts. We have not sought, and do not intend to seek, any tax opinion from counsel or ruling from the IRS with respect to any of the statements made in this summary. There can be no assurance that the IRS will not take a position contrary to these statements or that a contrary position taken by the IRS would not be sustained by a court. Accordingly, each stockholder should consult with such stockholder’s own tax advisor with respect to all of the potential tax consequences to such stockholder of the Reverse Stock Split.
STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Tax Consequences of the Reverse Stock Split
We intend to treat the Reverse Stock Split as a “recapitalization” for U.S. federal income tax purposes and that any rounding up of fractional shares to the next full share that may apply to a U.S. Holder will be solely to spare us the expense and inconvenience of issuing fractional shares and will not represent separately bargained for consideration paid to a U.S. Holder. As a result, a U.S. Holder generally should not recognize gain or loss upon the Reverse Stock Split. A U.S. Holder’s aggregate tax basis in the shares of common stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of common stock surrendered, and such U.S. Holder’s holding period for the shares of the common stock received should include the holding period for the shares of common stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of common stock surrendered to the shares of common stock received in a recapitalization pursuant to the Reverse Stock Split. U.S. Holders should consult their tax advisors as to application of the foregoing rules where shares of common stock were acquired at different times or at different prices.
Cash in Lieu of Fractional Shares
A U.S. Holder who receives cash in lieu of a fractional share of common stock pursuant to the Reverse Stock Split will be treated as having received the fractional shares pursuant to the Reverse Stock Split and then as having exchanged the fractional shares for cash in a redemption by Sensei, and generally should recognize capital gain or loss in an amount equal to the difference, if any, between the amount of cash received and the portion of the U.S. Holder’s tax basis in the shares of common stock surrendered that is allocated to such fractional share of common stock. Such capital gain or loss should be long-term capital gain or loss if the U.S. Holder’s holding period for the common stock surrendered in the Reverse Stock Split exceeds one year at the time of the Reverse Stock Split. Long-term capital gains of non-corporate U.S. Holders are generally subject to preferential tax rates. There are limitations on the deductibility of capital losses under the Code.
Information Reporting and Backup Withholding
A holder of common stock may be subject to information reporting and backup withholding on cash paid in lieu of fractional shares in connection with the Reverse Stock Split. To avoid backup withholding, each holder of common stock that does not otherwise establish an exemption should provide its taxpayer identification number and comply with the applicable certification procedures. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or credit against a U.S. Holder’s U.S. federal income tax liability, provided the required information is timely and properly furnished to the IRS. Holders of common stock should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, as well as the procedures for obtaining a credit or refund if backup withholding is imposed.
The preceding discussion is intended only as a summary of certain material U.S. federal income tax consequences of the Reverse Stock Split. It is not a complete analysis or discussion of all potential tax effects that may be important to a particular holder. All holders of our common stock should consult their own tax advisors as to the specific tax consequences of the Reverse Stock Split for them, including record retention and tax-reporting requirements, and the applicability and effect of any federal, state, local and non-U.S. tax laws.
Vote Required
The affirmative vote of holders of a majority of the total votes cast on the proposal will be required to approve the amendment of our amended and restated certificate of incorporation to effect a Reverse Stock Split of our common stock at a ratio in the range of one-for-10 to one-for-30, such ratio to be determined in the discretion of our Board. Abstentions are not treated as votes cast and, therefore, will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “
FOR
” PROPOSAL NO. 3
.
EXECUTIVE OFFICERS
The following table sets forth information concerning our executive officers as of the date hereof:
|
|
|
|
Name
|
|
Position
|
|
John Celebi
|
|
President, Chief Executive Officer and Director
|
|
Josiah Craver
|
|
Senior Vice President of Finance
|
|
Edward van der Horst, Ph.D.
|
|
Chief Scientific Officer
|
|
Stephanie Krebs
|
|
Chief Business Officer
|
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth certain information as of the date hereof with respect to our executive officers who are not directors:
Josiah Craver
, age 42
Josiah Craver has served as our Senior Vice President of Finance since July 2024 and Principal Financial and Accounting Officer since September 2024. Prior to joining Sensei, Mr. Craver was SVP of Finance and Corporate Controller at KALA BIO, a publicly-traded biotechnology company, November 2020 to July 2024 and prior to that he held senior finance positions at Solid Biosciences, a publicly-traded biotechnology, including VP of Finance and Corporate Controller, from 2017 to 2020. Mr. Craver began his career at PricewaterhouseCoopers in the health industries audit practice, primarily serving life science and biotech companies. Mr. Craver holds a M.S. in Accountancy from Stonehill College and is a Certified Public Accountant.
Edward van der Horst, Ph.D.
, age 52
Edward van der Horst, Ph.D. has served as our Chief Scientific Officer since December 2022. Dr. van der Horst previously served as our Senior Vice President of Biologics Discovery and Early Development from October 2021 to December 2022 and as our Vice President of Preclinical Development from September 2019 to October 2021. Prior to joining us, Dr. van der Horst served as Vice President, Discovery Biology Preclinical Drug Development at Zenith Epigenetics Ltd., a clinical stage oncology company, from 2017 to August 2019. Prior to Zenith Epigenetics, from 2010 to 2017, he served in various roles at Igenica Biotherapeutics, Inc., an immunotherapy company, including as Senior Director of Preclinical Development. Dr. van der Horst attended the University of Dusseldorf, holds a M.Sc. in Chemistry from Ludwig-Maximilians-Universitat Munchen and a Ph.D. in Biochemistry and Molecular Biology from Max-Plank-Institute for Biochemistry.
Stephanie Krebs
, age 47
Stephanie Krebs has served as our Chief Business Officer since November 2023. Prior to joining us, Ms. Krebs served as Chief Business Officer at SNIPR Biome APS from March 2022 to October 2023, Vice President and Head of Business Development at Valo Health, Inc. from June 2021 to February 2022, Head of Severe Genetic Disease Business Development at Bluebird Bio, Inc. from September 2019 to May 2021, Vice President of Business Development at HotSpot Therapeutics, Inc. from August 2018 to August 2019, and as Vice President of Corporate Development at Swedish Orphan Biovitrum (Sobi) AB from October 2016 to July 2018. Ms. Krebs also worked at Biogen Inc. in various roles of increasing responsibility from July 2006 to October 2016. She holds a Bachelor of Science in Microbiology and Immunology from the University of Rochester, a Master of Science in Biotechnology from Johns Hopkins University and an MBA from the William E. Simon Graduate School of Business Administration, University of Rochester.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our common stock as of March 18, 2025 for:
|
|
|
|
|
|
•
|
|
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock;
|
|
|
•
|
|
each of our named executive officers;
|
|
|
•
|
|
each of our directors; and
|
|
|
•
|
|
all of our executive officers and directors as a group.
|
We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, these rules require that we include shares of common stock issuable pursuant to the vesting of restricted stock units and the exercise of stock options that are either immediately exercisable or exercisable within 60 days of March 18, 2025. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Except as otherwise noted below, the address for persons listed in the table is c/o Sensei Biotherapeutics, Inc., 1405 Research Blvd, Suite 125, Rockville, Maryland 20850.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares Beneficially Owned
|
|
|
Percent of Shares Beneficially Owned (1)
|
|
|
|
Greater than 5% Stockholders:
|
|
|
|
|
|
|
|
|
Cambrian BioPharma Inc. (2)
|
|
|
3,719,156
|
|
|
|
14.7
|
|
%
|
|
HS Investments I LP (3)
|
|
|
4,441,624
|
|
|
|
17.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors:
|
|
|
|
|
|
|
|
|
John Celebi (4)
|
|
|
1,530,694
|
|
|
|
5.7
|
|
|
|
Edward van der Horst, Ph.D. (5)
|
|
|
403,534
|
|
|
|
1.6
|
|
|
|
Stephanie Krebs (6)
|
|
|
46,875
|
|
|
*
|
|
|
|
William Ringo (7)
|
|
|
84,465
|
|
|
*
|
|
|
|
Thomas Ricks (8)
|
|
|
411,356
|
|
|
|
1.6
|
|
|
|
James Peyer, Ph.D. (2)
|
|
|
3,719,156
|
|
|
|
14.7
|
|
|
|
Robert Holmen (9)
|
|
|
114,009
|
|
|
*
|
|
|
|
Kristian Humer (10)
|
|
|
72,115
|
|
|
*
|
|
|
|
All current directors and executive officers as a group (9 persons)
|
|
|
6,382,204
|
|
|
|
23.2
|
|
|
*Less than one percent.
(1)
This table is based upon information supplied by officers, directors and principal stockholders and filings with the SEC, if any, including Schedules 13D and 13G and Section 16 filings. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 25,208,068 shares outstanding on March 18, 2025, adjusted as required by rules promulgated by the SEC.
(2)
This information has been obtained in part from a Schedule 13G/A filed on August 4, 2023 by Cambrian BioPharma Inc. (“Cambrian”) and James Peyer. Consists of 3,653,120 shares of common stock and 66,036 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025. Cambrian is a Delaware corporation and Dr. Peyer serves as Cambrian’s Chief Executive Officer. In such capacity Dr. Peyer may direct the voting and disposition of the shares held by Cambrian, subject in certain instances to the approval of Cambrian’s board of directors. Cambrian’s business address is 228 Park Avenue S. #66643, New York, New York 10003.
(3)
This information has been obtained from a Schedule 13G filed on February 14, 2022 by entities and individuals associated with HS Investments I LP (“HS”). Consists of 4,426,000 shares of common stock and warrants exercisable for 15,624 shares of common stock held by HS Investments I, L.P. HS Ventures, LLC, its general partner, and Michael Schulman, manager of HS Ventures, may be deemed to have voting and dispositive power with respect to the shares held. The principal business address of HS Investments I, L.P. is 2101 E Coast Highway 3rd Floor Corona Del Mar, CA 92625.
(4)
Consists of 81,737 shares of common stock and 1,448,957 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025.
(5)
Consists of 47,269 shares of common stock and 356,265 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025.
(6)
Consists of 46,875 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025.
(7)
Consists of 23,399 shares of common stock and 61,066 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025
(8)
Consists of 334,931 shares of our common stock and a warrant to purchase 1,457 shares of our common stock held by Ricks Family Trust, 8,932 shares of common stock, and 66,036 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025 held by Thomas Ricks. Thomas Ricks is a trustee of the Ricks Family Trust and accordingly may be deemed to have voting and dispositive power with respect to the shares held by Ricks Family Trust.
(9)
Consists of 25,598 shares of common stock and 88,411 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025.
(10)
Consists of 8,932 shares of common stock and 63,183 shares issuable pursuant to stock options exercisable within 60 days following March 18, 2025.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and officers and holders of more than 10% of our common stock to file with the SEC initial reports of ownership of our common stock and other equity securities on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Directors and officers and holders of 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of our records and representations made by our directors and officers and certain of our more than 10% stockholders regarding their filing obligations, we believe that during the year ended December 31, 2024, our directors, executive officers and more than 10% stockholders complied with all applicable Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
Our named executive officers, consisting of our principal executive officer and our next two most highly compensated executive officers for the fiscal year ended December 31, 2024 were:
•
John Celebi, our President and Chief Executive Officer;
•
Stephanie Krebs, our Chief Business Officer; and
•
Edward van der Horst, Ph.D., our Chief Scientific Officer.
Summary Compensation Table
The following table sets forth information concerning the compensation of our named executive officers during the fiscal years ended December 31, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Option
Awards
($)(1)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total ($)
|
|
|
John Celebi
|
|
2024
|
|
|
535,600
|
|
|
|
—
|
|
|
|
311,289
|
|
|
|
268,804
|
|
|
|
67,950
|
|
(2)
|
|
1,183,643
|
|
|
President and Chief Executive Officer
|
|
2023
|
|
|
532,167
|
|
|
|
30,459
|
|
|
|
99,554
|
|
|
|
285,743
|
|
|
|
64,366
|
|
|
|
1,012,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephanie Krebs (4)
|
|
2024
|
|
|
385,000
|
|
|
|
—
|
|
|
|
40,602
|
|
|
|
140,525
|
|
|
|
18,259
|
|
(3)
|
|
584,386
|
|
|
Chief Business Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward van der Horst, Ph.D.
|
|
2024
|
|
|
400,000
|
|
|
|
—
|
|
|
|
109,948
|
|
|
|
142,000
|
|
|
|
15,768
|
|
(3)
|
|
667,716
|
|
|
Chief Scientific Officer
|
|
2023
|
|
|
382,667
|
|
|
|
25,311
|
|
|
|
82,962
|
|
|
|
230,200
|
|
|
|
17,942
|
|
|
|
739,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The amounts disclosed represent the aggregate grant date fair value of the awards granted to our named executive officers during 2024 under our 2021 Equity Incentive Plan (the “2021 Plan”), computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in the notes to our audited consolidated financial statements included in our Form 10-K, filed with the SEC on March 28, 2025. These amounts do not reflect the actual economic value that may be realized by the named executive officer.
(2)
Includes a housing allowance of $45,507, vehicle allowance, parking allowance, life insurance premiums, tax payments (including $1,155 in tax gross up payments), cell phone reimbursement and 401(k) plan matching contributions of $13,800.
(3)
Includes life insurance premiums, cell phone reimbursement and 401(k) plan matching contributions of $13,800.
(4)
Ms. Krebs was not a named executive officer for the year ended December 31, 2023 and accordingly compensation data for Ms. Krebs for 2023 has been omitted from this table.
Narrative to Summary Compensation Table
We review compensation annually for all employees, including our executive officers. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our company. Our Compensation Committee generally strives to set cash compensation at approximately the 50th percentile of our peer company data for comparable positions and total equity award value between the 50th and 75th percentile, though variations on this pay positioning may occur from year to year.
The Compensation Committee of our Board of Directors has historically determined our executives’ compensation. Our Compensation Committee typically reviews and discusses management’s proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those discussions and its discretion, the Compensation Committee then, without members of management present, discusses and ultimately approves the compensation of our executive officers.
Annual Base Salary
Our named executive officers receive a base salary to compensate them for services rendered to us. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role
and responsibilities. Mr. Celebi’s annual base salary was $535,600 for the full year of 2024. Ms. Krebs’ annual base salary was $385,000 for the full year of 2024. Dr. van der Horst’s annual base salary was $400,000 for the full year of 2024.
Annual Bonus
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations and individual performance for each fiscal year. Our named executive officers are eligible to receive annual bonuses of up to a percentage of the applicable executive’s gross base salary based on performance metrics, as determined by our Compensation Committee. For 2024 and 2023, the target bonus for each of Mr. Celebi, Ms. Krebs and Dr. van der Horst was 55%, 40% and 40%, respectively, of their respective base salaries.
The actual performance-based annual bonus paid, if any, has historically been calculated by multiplying the executive’s annual base salary at year-end, target bonus percentage and, respectively, the percentage attainment of the corporate goals established for such year, and the percentage attainment of individual goals. However, the Compensation Committee is not required to calculate bonuses in this manner and retains discretion in the amounts it awards and the factors it takes into consideration in determining bonus amounts. After the end of the year, the Compensation Committee reviews our performance against our goals and approves the extent to which our executives achieved each of our corporate and individual goals, as applicable, and, for each named executive officer, the amount of the bonus awarded.
Our 2024 corporate goals consisted of research and development, business development and financial objectives. In early 2025, the Compensation Committee determined that the 2024 corporate goals were achieved at a 82.5% level. After considering the achievement of the 2024 corporate goals together with individual goals where applicable, the Compensation Committee awarded Mr. Celebi, Ms. Krebs and Dr. van der Horst 91.3%, 91.3% and 88.8% of their target bonuses, respectively, for the year ended December 31, 2024. The actual bonus amounts paid are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.
Equity-Based Incentive Awards
We believe that equity awards provide our executives with a strong link to our long-term performance, create an ownership culture and align the interests of our executives and our stockholders. We believe that our equity awards are an important retention tool for our executive officers, as well as for our other employees.
We award equity awards broadly to our employees. Grants to our executives and other employees are made at the discretion of our board of directors and Compensation Committee. Our Compensation Committee grants stock options, restricted stock units, or a combination of both to our employees, including our named executive officers.
On February 15, 2024, Mr. Celebi and Dr. van der Horst were granted stock options to purchase 315,000 shares and 125,000 shares, respectively. One-fourth of the shares underlying the stock options vest on February 15, 2025, with the remainder vesting monthly over an additional 36 months of continuous service.
On December 20, 2024, Mr. Celebi, Ms. Krebs and Dr. van der Horst were granted stock options to purchase 355,000 shares, 120,000 shares and 100,000 shares, respectively. The full amount of the shares of the underlying stock vest on December 1, 2025 or upon the date of termination of employment other than by us for cause.
For additional information about equity grants made historically to our named executive officers, please see “—Outstanding Equity Awards as of December 31, 2024” below.
Nonqualified Deferred Compensation
Our named executive officers did not participate in, or earn any benefits under, a nonqualified deferred compensation plan sponsored by us during fiscal 2024.
Termination or Change in Control Benefits
Each of our named executive officers’ employment agreements entitles them to certain benefits upon a qualifying termination. For additional discussion, please see “Employment Agreements with our Named Executive Officers.”
Health and Welfare; Perquisites
All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees. We generally do not provide
perquisites or personal benefits to our named executive officers, except in limited circumstances (including Mr. Celebi’s housing and vehicle allowances).
401(k) Plan
We maintain a safe harbor 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation up to certain limits under the Code, which are updated annually. We have the ability to make matching and discretionary contributions to the 401(k) plan. Currently, we make matching contributions or discretionary contributions to the 401(k) plan up to a maximum of 4% of such employee’s annual compensation. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings on those amounts are generally not taxable to the employees until withdrawn or distributed from the 401(k) plan.
Employment Agreements with our Named Executive Officers
Below are descriptions of our employment agreements with our named executive officers. The agreements generally provide for at-will employment and set forth the named executive officer’s initial base salary, target bonus, eligibility for employee benefits and severance benefits upon a qualifying termination of employment. Furthermore, each of our named executive officers has executed a form of our standard proprietary information and inventions assignment agreement. The key terms of the employment agreements with our named executive officers, including potential payments upon termination or change of control, are described below.
Employment Agreements
Mr. Celebi’s employment agreement became effective upon the closing of our initial public offering. Our employment agreement with Dr. van der Horst was most recently amended and restated effective December 7, 2022 in connection with his appointment as our Chief Scientific Officer. Our employment agreement with Ms. Krebs became effective November 1, 2023 in connection with her appointment as our Chief Business Officer.
The employment agreements provide that, subject to certain conditions and limitations, upon the termination of the employment of an eligible executive officer without Cause or resignation for Good Reason (each, as defined in the employment agreements) not in connection with a Change in Control (as defined in each employment agreement):
|
|
|
|
|
|
•
|
|
Mr. Celebi will be eligible to receive continued payment of his base salary for 12 months; Ms. Krebs and Dr. van der Horst will be eligible to receive continued payment of their base salaries for nine months; and
|
|
|
|
|
|
|
•
|
|
each executive officer shall be eligible to receive COBRA premiums for the applicable length of the severance period as described above.
|
In addition, the employment agreements provide that, subject to certain conditions and limitations, upon the termination of the employment of an eligible executive officer without Cause or resignation for Good Reason (each, as defined in the employment agreements) within 12 months following a Change in Control:
|
|
|
|
|
|
•
|
|
Mr. Celebi will be eligible to receive a lump-sum cash severance benefit equal to 18 months’ base salary and 150% of his target bonus; Ms. Krebs and Dr. van der Horst will be eligible to receive a lump-sum cash severance benefit equal to 12 months’ base salary and 100% of the officer’s target bonus;
|
|
|
|
|
|
|
•
|
|
such executive officer shall be eligible to receive COBRA premiums for the applicable length of the severance period as described above; and
|
|
|
|
|
|
|
•
|
|
all unvested equity awards held by such executive officer will become immediately vested and fully exercisable.
|
The severance benefits described above are conditioned upon the executive officer’s execution and non-revocation of a separation agreement, including a release of claims, and compliance with certain restrictive covenants.
Policy on Hedging and Speculative Trading
Our insider trading and window period policy prohibits directors, officers and employees from engaging in short sales, transactions in put or call options, hedging transactions, margin accounts or other inherently speculative transactions with respect to our stock at any time.
Insider Trading Policy
We have adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by directors, officers, employees and consultants that is designed to promote compliance with insider trading laws, rules and regulations, as well as procedures designed to further the foregoing purposes. A copy of our insider trading policy was filed as Exhibit 19.1 to our Annual Report on Form 10-K for our fiscal year ended December 31, 2024.
From time to time, we may also engage in transactions in our own securities, such as in connection with our ongoing stock repurchase program. We have procedures in place designed to ensure our compliance with applicable laws and regulations relating to insider trading in connection with any such transactions.
Clawback Policy
In October 2023, the Compensation Committee adopted our Incentive Compensation Recoupment Policy (the “Clawback Policy”), designed to comply with Rule 10D-1 of the Exchange Act and Nasdaq Listing Rule 5608, which provides for recoupment of incentive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the relevant securities laws. The Clawback Policy applies to our current and former executive officers. Compensation that is granted, earned or vested based wholly or in part upon attainment of a Financial Reporting Measure (as defined in the Clawback Policy) is subject to recoupment.
Outstanding Equity Awards as of December 31, 2024
The following table sets forth certain information about equity awards granted to our named executive officers that remained outstanding as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
|
Option
Exercise
Price
|
|
|
Option
Expiration
Date
|
|
Number of shares or units of stock that have not vested
(#)
|
|
|
Market value of shares of units of stock that have not vested (9)
|
|
|
|
John Celebi
|
|
12/20/2024
|
|
|
—
|
|
|
|
355,000
|
|
(1)
|
|
$
|
0.45
|
|
|
12/20/2034
|
|
|
|
|
|
|
|
|
|
|
2/15/2024
|
|
|
165,889
|
|
|
|
315,000
|
|
(2)
|
|
$
|
0.79
|
|
|
2/15/2034
|
|
|
|
|
|
|
|
|
|
|
2/15/2023
|
|
|
41,250
|
|
|
|
48,750
|
|
(3)
|
|
$
|
1.43
|
|
|
2/15/2033
|
|
|
15,975
|
|
|
$
|
7,829
|
|
(7)
|
|
|
|
2/15/2022
|
|
|
114,466
|
|
|
|
47,134
|
|
(4)
|
|
$
|
4.30
|
|
|
2/15/2032
|
|
|
26,950
|
|
|
$
|
13,208
|
|
(8)
|
|
|
|
2/4/2021
|
|
|
399,304
|
|
|
|
17,362
|
|
(5)
|
|
$
|
19.00
|
|
|
2/3/2031
|
|
|
|
|
|
|
|
|
|
|
2/15/2020
|
|
|
559,375
|
|
|
|
—
|
|
|
|
$
|
3.22
|
|
|
8/4/2030
|
|
|
|
|
|
|
|
|
|
|
2/22/2018
|
|
|
26,666
|
|
|
|
—
|
|
|
|
$
|
122.88
|
|
|
4/1/2028
|
|
|
|
|
|
|
|
|
Stephanie Krebs
|
|
12/1/2024
|
|
|
—
|
|
|
|
120,000
|
|
(1)
|
|
$
|
0.45
|
|
|
12/20/2034
|
|
|
|
|
|
|
|
|
|
|
11/1/2023
|
|
|
33,854
|
|
|
|
91,146
|
|
(2)
|
|
$
|
0.82
|
|
|
11/1/2033
|
|
|
|
|
|
|
|
|
Edward van der Horst, Ph.D.
|
|
12/20/2024
|
|
|
—
|
|
|
|
100,000
|
|
(1)
|
|
$
|
0.45
|
|
|
12/20/2034
|
|
|
|
|
|
|
|
|
|
|
2/15/2024
|
|
|
90,102
|
|
|
|
125,000
|
|
(2)
|
|
$
|
0.79
|
|
|
2/15/2034
|
|
|
|
|
|
|
|
|
|
|
2/15/2023
|
|
|
34,375
|
|
|
|
40,625
|
|
(3)
|
|
$
|
1.43
|
|
|
2/15/2033
|
|
|
13,275
|
|
|
$
|
6,506
|
|
(7)
|
|
|
|
2/15/2022
|
|
|
31,166
|
|
|
|
12,834
|
|
(4)
|
|
$
|
4.30
|
|
|
2/15/2032
|
|
|
7,350
|
|
|
$
|
3,602
|
|
(8)
|
|
|
|
10/8/2021
|
|
|
15,832
|
|
|
|
4,168
|
|
(6)
|
|
$
|
8.69
|
|
|
10/31/2031
|
|
|
|
|
|
|
|
|
|
|
2/4/2021
|
|
|
69,877
|
|
|
|
3,039
|
|
(5)
|
|
$
|
19.00
|
|
|
2/3/2031
|
|
|
|
|
|
|
|
|
|
|
2/15/2020
|
|
|
55,208
|
|
|
|
—
|
|
|
|
$
|
3.22
|
|
|
8/4/2030
|
|
|
|
|
|
|
|
|
|
|
9/3/2019
|
|
|
3,125
|
|
|
|
—
|
|
|
|
$
|
16.32
|
|
|
9/2/2029
|
|
|
|
|
|
|
|
(1)
The unvested shares underlying this option vest 100% on the earlier of December 1, 2025 or termination of employment other than for cause.
(2)
The unvested shares underlying this option vest 25% on February 15, 2025 and thereafter in 36 equal monthly installments until February 15, 2028, generally subject to the officer’s continued service through each applicable vesting date.
(3)
The unvested shares underlying this option vest in 26 equal monthly installments until February 15, 2027, generally subject to the officer’s continued service through each applicable vesting date.
(4)
The unvested shares underlying this option vest in 14 equal monthly installments until February 15, 2026, generally subject to the officer’s continued service through each applicable vesting date.
(5)
The unvested shares underlying this option vest in 2 equal monthly installments until February 15, 2025, generally subject to the officer’s continued service through each applicable vesting date.
(6)
The unvested shares underlying this option vest in 10 equal monthly installments until October 8, 2025, generally subject to the officer’s continued service through each applicable vesting date.
(7)
The unvested shares underlying this restricted stock unit vest in 3 equal yearly installments until February 15, 2027, generally subject to the officer’s continued service through each applicable vesting date.
(8)
The unvested shares underlying this restricted stock unit vest in 2 equal yearly installments until February 15, 2026, generally subject to the officer’s continued service through each applicable vesting date.
(9)
The market value amount is calculated based on the closing price of our common stock of $0.49 per share on December 31, 2024.
Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
We have granted stock options to our employees, including our named executive officers, in 2023 and 2024. We typically have granted new-hire stock option awards or promotion stock option awards on or soon after a new hire’s employment start date or promotion, as applicable. Additionally, we have typically granted annual refresh employee stock option awards in the first quarter of each fiscal year, which refresh grants are typically approved following our regularly scheduled meeting of the Compensation Committee in which annual refresh grants are considered. We do not otherwise maintain any written policies on the timing of awards
of stock options, stock appreciation rights, or similar instruments with option-like features. The Compensation Committee considers whether there is any material nonpublic information (“MNPI”) about the Company when determining the timing of stock option grants and does not seek to time the award of stock options in relation to our public disclosure of MNPI. We have not timed the release of MNPI for the purpose of affecting the value of executive compensation.
DIRECTOR COMPENSATION
The following table sets forth information regarding the compensation earned or paid to our non-employee directors during the year ended December 31, 2024. John Celebi, our President and Chief Executive Officer, is also a member of our Board of Directors, but did not receive any additional compensation for his service as a director. Mr. Celebi’s compensation as an executive officer is set forth above under “Executive Compensation—Summary Compensation Table.” Samuel Broder resigned from our Board of Directors on February 5, 2024, but was not paid any compensation during the year ended December 31, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid in
Cash ($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)(1)(3)
|
|
|
Total ($)
|
|
|
Jessie English, Ph.D.
|
|
|
24,500
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
34,664
|
|
|
Bob Holmen
|
|
|
52,500
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
62,664
|
|
|
Kristian Humer
|
|
|
42,500
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
52,664
|
|
|
James Peyer, Ph.D.
|
|
|
49,000
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
59,164
|
|
|
William Ringo (2)
|
|
|
80,385
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
90,549
|
|
|
Tom Ricks
|
|
|
55,000
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
65,164
|
|
|
Deneen Vojta, M.D.
|
|
|
48,445
|
|
|
|
—
|
|
|
|
10,164
|
|
|
|
58,609
|
|
(1)
Amounts reported represent the aggregate grant date fair value of equity awards granted to our directors during 2024 under our 2021 Plan, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in the notes to our audited consolidated financial statements included in our Form 10-K, filed with the SEC on March 28, 2025. These amounts do not reflect the actual economic value that may be realized by the non-employee director.
(2)
As of December 31, 2024, Mr. Ringo held 2,978 RSUs.
(3)
Represents an option to purchase 19,000 shares of our common stock granted on June 10, 2024 at an exercise price of $0.71 per share. As of December 31, 2024, Dr. English, Mr. Holmen, Mr. Humer, Dr. Peyer, Mr. Ringo, Mr. Ricks and Dr. Vojta held options to purchase 44,554, 89,995, 64,767, 67,620, 62,650, 67,620 and 38,600 shares of our common stock, respectively.
Non-Employee Director Compensation Policy
Following recommendation from the compensation committee, in March 2024 our Board of Directors amended our non-employee director compensation policy (the "2024 Amended Policy").
Under the 2024 Amended Policy, each non-employee director receives cash compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Retainer ($)
|
|
|
Annual retainer
|
|
|
|
35,000
|
|
|
Additional retainer for independent chair
|
|
|
|
35,000
|
|
|
Additional retainer for audit committee chair
|
|
|
|
15,000
|
|
|
Additional retainer for audit committee non-chair member
|
|
|
|
7,500
|
|
|
Additional retainer for compensation committee chair
|
|
|
|
10,000
|
|
|
Additional retainer for compensation committee non-chair member
|
|
|
|
5,000
|
|
|
Additional retainer for nominating and corporate governance committee chair
|
|
|
|
8,000
|
|
|
Additional retainer for nominating and corporate governance committee non-chair member
|
|
|
|
4,000
|
|
|
Additional retainer for science and technology committee chair (1)
|
|
|
|
10,000
|
|
|
Additional retainer for science and technology committee non-chair member (1)
|
|
|
|
5,000
|
|
(1)
The Board dissolved the Science and Technology Committee on December 10, 2024, effective as of December 31, 2024. These retainers will not be paid beginning in 2025.
Under the 2024 Amended Policy, each non-employee director receives equity compensation as follows:
Initial equity award
. Each new non-employee director elected or appointed to our board of directors will be granted an option to purchase 38,000 shares of our common stock, vesting in 36 substantially equal monthly installments following the grant date.
In addition, if an independent chair is elected or appointed to the Board, the independent chair will be granted an additional option to purchase 10,000 shares of our common stock, vesting in full on the first anniversary of the date of grant.
Annual equity awards
. On the date of each annual meeting of stockholders of our company, each non-employee director who has served as a non-employee director for at least six months prior to such stockholder meeting and who will continue to serve on our board of directors will be granted an option to purchase 19,000 shares of our common stock, vesting in monthly installments such that the option is fully vested on the earlier of the first anniversary of the grant date or the date of our next annual stockholder meeting.
All equity awards held by a non-employee director will vest in full upon a change in control.
In addition, under the 2024 Amended Policy all stock options granted to non-employee directors shall remain exercisable following the termination of a director's service to the Company until the earliest of (x) four years following such termination of service, (y) the expiration of the option and (z) the later of (i) the number of full years of service to the Company provided by such director and (ii) three months after termination for any reason other than death or disability, 12 months after termination due to disability or 18 months due to death. Stock options shall expire immediately upon termination of a director for cause. The foregoing provisions regarding the post-termination exercise period apply to all stock options previously granted to our directors and all stock options granted in the future.
EQUITY COMPENSATION PLAN INFORMATION
The following table shows information regarding our equity compensation plans in effect as of December 31, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
5,379,253
|
|
(1)
|
$
|
4.80
|
|
(2)
|
|
2,154,375
|
|
(3)
|
|
Equity compensation plans not approved by security holders
|
|
|
416,872
|
|
|
$
|
9.82
|
|
|
|
—
|
|
|
|
Total
|
|
|
5,796,125
|
|
|
|
|
|
|
2,154,375
|
|
|
(1)
Includes shares issuable upon exercise of outstanding options under our 2018 Plan and 2021 Plan.
(2)
The weighted average exercise price is calculated based solely on outstanding stock options. It does not take into account the shares of common stock underlying RSUs, which have no exercise price. There are no warrants outstanding under our equity compensation plans.
(3)
Consists of shares available under the 2021 Plan and our 2021 Employee Stock Purchase Plan (the “ESPP”) as of December 31, 2024. On January 1 of each year, the number of shares reserved under the 2021 Plan and the ESPP is automatically increased by 4.0% and 1.0%, respectively, of the total number of shares of common stock that are outstanding at that time, or a lesser number of shares as may be determined by our board of directors. As a result, an additional 1,007,223 shares and 251,805 shares were added to the number of available shares under the 2021 Plan and ESPP, respectively, effective January 1, 2025.
TRANSACTIONS WITH RELATED PERSONS
Related-Person Transactions Policy and Procedures
We have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body of our Board of Directors, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our Code of Conduct, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our Audit Committee, or other independent body of our Board of Directors, will take into account the relevant available facts and circumstances including, but not limited to:
•
the risks, costs and benefits to us;
•
the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
•
the availability of other sources for comparable services or products; and
•
the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit Committee, or other independent body of our Board of Directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or other independent body of our Board of Directors, determines in the good faith exercise of its discretion.
Certain Related Party Transactions
Except as described below, there have been no transactions since January 1, 2023 to which we have been a participant in which the amount involved exceeded or will exceed $120,000 or, during such time as we qualify as a “smaller reporting company,” the lesser of (1) $120,000 or (2) 1% of the average of our total assets for the last two completed years, and in which any of our then directors, executive officers or holders of more than 5% of our common stock at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described in “Executive Compensation” and “Director Compensation Table.”
Investors’ Rights Agreement
We are party to an investors’ rights agreement (the “IRA”) with certain holders of our convertible preferred stock, including our 5% stockholders and their affiliates. The IRA provides these stockholders with certain registration rights, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing, and
also the right to obligate us to an agreement to provide for additional rights to demand that we file a registration statement or request that their shares be covered by a registration statement that we have filed and maintain as effective.
Indemnification Agreements
Our amended and restated certificate of incorporation contains provisions limiting the liability of directors, and our amended and restated bylaws provides that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws also provide our board of directors with discretion to indemnify our employees and other agents when determined appropriate by the board. In addition, we have entered into an indemnification agreement with each of our directors and executive officers, which requires us to indemnify them.
Purchase Agreement with Apeiron Investment Group and Affiliates
On May 23, 2023, we entered into a Purchase Agreement (the “Apeiron Purchase Agreement”) with Apeiron Investment Group Ltd., Presight Sensei Co-Invest Fund, L.P., Presight Sensei Co-Invest Management, L.L.C., Christian Angermayer, Apeiron SICAV Ltd. - Presight Capital Fund ONE, and Altarius Asset Management Ltd. (collectively, the “Apeiron Parties”). At the time of the execution of the Apeiron Purchase Agreement, the Apeiron Parties collectively held more than 5% of our voting securities.
Pursuant to the Apeiron Purchase Agreement, we agreed to purchase 4,454,248 shares of the Company’s common stock (the “Purchased Shares”) from certain of the Apeiron Parties (the “Sellers”) for a purchase price of $1.58 per share. The Purchased Shares constituted the Apeiron Parties’ entire beneficial ownership of the Company’s common stock. The transaction closed on June 1, 2023.
Purchase Agreement with Cambrian Biopharma
On July 31, 2023, we entered into a Purchase Agreement (the "Cambrian Purchase Agreement") with Cambrian Biopharma Inc. ("Cambrian"), pursuant to which we agreed to repurchase 1,587,302 shares of our common stock from Cambrian, a beneficial owner of more than 5% of our outstanding shares of common stock, at a purchase price of $1.26 per share and for an aggregate purchase price of approximately $2 million. The transaction closed on August 15, 2023. James Peyer, a director of the Company, is the CEO of Cambrian.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (for example, brokers) to satisfy the delivery requirements for Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single set of Annual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are our stockholders will be “householding” our proxy materials. A single set of Annual Meeting materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate set of Annual Meeting materials, please notify your broker or us. Direct your written request to Sensei Biotherapeutics, Inc., Attn: Secretary, 1405 Research Blvd, Suite 125, Rockville, Maryland 20850. Stockholders who currently receive multiple copies of the Annual Meeting materials at their addresses and would like to request “householding” of their communications should contact their brokers.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ Christopher W. Gerry
Christopher W. Gerry
General Counsel and Secretary
Dated: April 11, 2025
A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 is available without charge upon written request to: Corporate Secretary, Sensei Biotherapeutics, Inc., 1405 Research Blvd, Suite 125, Rockville, Maryland 20850.
APPENDIX A
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SENSEI BIOTHERAPEUTICS, INC.
Sensei Biotherapeutics, Inc. (the “
Company
”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “
DGCL
”), does hereby certify that:
First:
The name of this corporation is Sensei Biotherapeutics, Inc., and the date on which the Certificate of Incorporation of this corporation was originally filed with the Secretary of State of the State of Delaware on December 1, 2017, under the name PPI Holdings, Inc. The Certificate of Incorporation was amended and restated by an Amended and Restated Certificate of Incorporation on December 29, 2020 and on February 8, 2021.
Second:
The Board of Directors of the Company (the “
Board
”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, adopted resolutions amending its Certificate of Incorporation (the “
Certificate of Incorporation
”), as follows:
Effective as of the effective time of 5:00 p.m., Eastern Time, on [***DATE***]
1
(the “
Effective Time
”), each [ten (10) / eleven (11) / twelve (12) / thirteen (13) / fourteen (14) / fifteen (15) / sixteen (16) / seventeen (17) / eighteen (18) / nineteen (19) / twenty (20) / twenty-one (21) / twenty-two (22) / twenty-three (23) / twenty-four (24) / twenty-five (25) / twenty-six (26) / twenty-seven (27) / twenty-eight (28) / twenty-nine (29) / thirty (30)]
2
shares of the Company’s Common Stock, par value $0.0001 per share, issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the Company or the respective holders thereof, be combined into one (1) share of Common Stock without increasing or decreasing the par value of each share of Common Stock (the “
Reverse Split
”); provided, however, no fractional shares of Common Stock shall be issued as a result of the Reverse Split and, in lieu thereof, upon receipt after the Effective Time by the exchange agent selected by the Company of a properly completed and duly executed transmittal letter and, where shares are held in certificated form, the surrender of the stock certificate(s) formerly representing shares of pre-Reverse Split Common Stock, any stockholder who would otherwise be entitled to a fractional share of post-Reverse Split Common Stock as a result of the Reverse Split, following the Effective Time (after taking into account all fractional shares of post-Reverse Split Common Stock otherwise issuable to such stockholder), shall be entitled to receive a cash payment (without interest) equal to the fractional share of post-Reverse Split Common Stock to which such stockholder would otherwise be entitled multiplied by the average of the closing sales prices of a share of the Company’s Common Stock (as adjusted to give effect to the Reverse Split) on The Nasdaq Stock Market for each of the five (5) consecutive trading days immediately preceding the date this Certificate of Amendment is filed with the Secretary of State of the State of Delaware. Each stock certificate that, immediately prior to the Effective Time, represented shares of pre-Reverse Split Common Stock shall, from and after the Effective Time, automatically and without any action on the part of the Company or the respective holders thereof, represent that number of whole shares of post-Reverse Split Common Stock into which the shares of pre-Reverse Split Common Stock represented by such certificate shall have been combined (as well as the right to receive cash in lieu of any fractional shares of post-Reverse Split Common Stock as set forth above; provided, however, that each holder of record of a certificate that represented shares of pre-Reverse Split Common Stock shall receive,
1
Insert next business day after filing with the Secretary of State of the State of Delaware.
2
These amendments approve the combination of any whole number of shares of the Company’s Common Stock between and including ten (10) and thirty (30) into one (1) share of the Company’s Common Stock. By these amendments, the stockholders would approve each of the alternate amendments proposed by the Company’s Board of Directors. If the reverse stock split proposal is approved by stockholders, the Certificate of Amendment filed with the Secretary of State of the State of Delaware will include only that reverse stock split ratio determined by the Company’s Board of Directors to be in the best interests of the Company and its stockholders. The other amendments will be abandoned pursuant to Section 242(c) of the General Corporation Law of the State of Delaware. The Company’s Board of Directors may also elect not to effect any reverse stock split, in which case all proposed alternate amendments will be abandoned.
upon surrender of such certificate, a new certificate representing the number of whole shares of post-Reverse Split Common Stock into which the shares of pre-Reverse Split Common Stock represented by such certificate shall have been combined pursuant to the Reverse Split, as well as any cash in lieu of fractional shares of post-Reverse Split Common Stock to which such holder may be entitled as set forth above. The Reverse Split shall be effected on a record holder-by-record holder basis, such that any fractional shares of post-Reverse Split Common Stock resulting from the Reverse Split and held by a single record holder shall be aggregated.
Section A of Article IV of the Certificate of Incorporation is amended and restated to read in its entirety as follows:
“A. The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of all classes of capital stock which the Company shall have authority to issue is [ ] [
3
] shares, of which [ ]
shall be Common Stock (the “
Common Stock
”), each share having a par value of one-hundredth of one cent ($0.0001), and 10,000,000 shall be Preferred Stock (the “
Preferred Stock
”), each share having a par value of one-hundredth of one cent ($0.0001).”
Third:
The foregoing amendment to the Certificate of Incorporation was duly approved by the Board.
Fourth
: Thereafter, pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted in accordance with the provisions of Section 242 of the DGCL.
Fifth
: This amendment to the Certificate of Incorporation shall be effective on and as of as of the effective time of 5:00 p.m., Eastern Time, on [***DATE***]
4
.
[Signature Page Follows]
3
Assuming the reverse stock split proposal and the authorized shares reduction proposal are approved by the required stockholder vote and the Company’s Board of Directors elects to effect a reverse stock split, the number of shares of the Company’s total authorized Common Stock would be correspondingly, and proportionally to the reverse stock split ratio determined by the Company’s Board of Directors, reduced (thereby effecting a reduction in the Company’s total authorized capital stock).
4
Insert next business day after filing with the Secretary of State of the State of Delaware.
In Witness Whereof,
Sensei Biotherapeutics, Inc. has caused this Certificate of Amendment to be executed by its Chief Executive Officer as of [***DATE***].
By: ____________________________
John Celebi
President and Chief Executive Officer
