VISTAGEN THERAPEUTICS, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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[
]
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Preliminary
Proxy Statement
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[
]
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Confidential,
for Use of the SEC Only (as permitted by
Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[
]
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Definitive
Additional Materials
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[
]
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Soliciting
Material Pursuant to 14a-12
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VistaGen Therapeutics, Inc.
(Name
of Registrant as Specified In Its Charter)
_________________________________
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No fee required.
[
] Fee computed on table below
per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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4.
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Proposed
maximum aggregate value of transaction:
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5.
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Total
fee paid:
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[
] Fee paid previously with
preliminary materials.
[
] Check box if any part
of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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1.
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Amount
Previously Paid:
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2.
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Form,
Schedule or Registration Statement No.:
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3.
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Filing
Party:
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4.
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Date
Filed:
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July
29, 2020
Dear
Stockholders of VistaGen Therapeutics, Inc.:
You are
cordially invited to attend the 2020 Annual Meeting of Stockholders
(the
Annual Meeting
or the
Meeting
) of VistaGen
Therapeutics, Inc. (the
Company
) to be held at 10:00 a.m.,
Pacific Time, on Thursday, September 17, 2020. To ensure the health
and well-being of our stockholders, employees, Board members and
advisors during the ongoing COVID-19 pandemic, the Annual Meeting
will be a virtual meeting of stockholders and will be conducted
exclusively via the Internet. There will not be a physical meeting
location, and thus you will not be able to attend the Meeting in
person. Instead, you may attend the Annual Meeting online and
submit questions during the Meeting by visiting
http://www.meetingcenter.io/280599481
.
In addition, prior to the Meeting, we encourage you to vote online
by following the instructions provided on the Notice of Internet
Availability of Proxy Materials described below.
In response to the COVID-19 pandemic
and as part of our efforts to conserve environmental resources and
prevent unnecessary corporate expense,
we are once
again using the “Notice and Access” method of providing
proxy materials to you via the Internet pursuant to the regulations
promulgated by the U.S. Securities and Exchange Commission
(
SEC
). We believe that this
process should provide you with a safe, convenient and efficient
way to access your proxy materials and vote your shares, while also
allowing us to conserve natural resources and reduce the costs of
printing and distributing the proxy materials and take prudent
precautionary measures during the COVID-19 pandemic. On or about
August 3, 2020, we are mailing to our stockholders a Notice of
Internet Availability of Proxy Materials (the
Notice
) containing instructions on how
to access our Proxy Statement and vote electronically via the
Internet or by telephone. The Notice also will contain instructions
on how to receive a paper copy of your proxy
materials.
Details
of the business to be conducted at the Annual Meeting are described
in both the Notice, and in the accompanying Proxy Statement. We
have also made a copy of our Annual Report on Form 10-K for the
year ended March 31, 2020 (
Annual
Report
) available with this proxy statement. We encourage
you to read our Annual Report. It includes our audited financial
statements and provides information about our
business.
Regardless of
whether you plan to attend our Annual Meeting virtually,
please read the accompanying Proxy
Statement and then vote via the Internet, by telephone or by postal
mail as promptly as possible.
Please refer to the Notice for
instructions on submitting your votes. Voting promptly will save us
additional expense in further soliciting proxies and will ensure
that your shares are represented at the Meeting.
Our
Board of Directors has unanimously approved the proposals set forth
in the accompanying Proxy Statement and we recommend that you vote
in favor of each such proposal.
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Sincerely,
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Jon S.
Saxe
Chairman of the Board of Directors
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VistaGen Therapeutics, Inc.
343 Allerton Avenue
South San Francisco, CA 94080
Tel. (650) 577-3600
Fax (888) 482-2602
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Conducted Exclusively via the Internet on September 17,
2020
Dear
Stockholders of VistaGen Therapeutics, Inc.:
We are
pleased to invite you to attend the 2020 Annual Meeting of
Stockholders (the
Annual
Meeting
or
Meeting
)
of VistaGen Therapeutics, Inc., a Nevada corporation (the
Company
,
us
,
we
or
our
), which takes place on Thursday,
September 17, 2020 at 10:00 a.m., Pacific Time. The Annual Meeting
will be a virtual-format meeting, held exclusively via the internet
at
http://www.meetingcenter.io/280599481
,
for the following purposes:
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1.
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to
elect six directors to our Board of Directors, each to serve until
our 2021 Annual Meeting of Stockholders, or until her or his
respective successor is elected and qualified;
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2.
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to
ratify the appointment of OUM & Co. LLP as our independent
registered public accounting firm for our fiscal year ending March
31, 2021; and
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3.
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to vote
upon such other matters, if any, as may properly come before the
Annual Meeting or any adjournment or postponement of the Annual
Meeting.
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These
matters are more fully discussed in the attached Proxy
Statement.
We have
elected to provide access to our proxy materials primarily
electronically via the Internet, pursuant to the U.S. Securities
and Exchange Commission’s (
SEC
) “notice and access”
rules. We believe this process expedites our stockholders’
safe receipt of proxy materials during the COVID-19 pandemic,
conserves natural resources and significantly reduces the costs of
the Annual Meeting. On or about August 3, 2020, we will mail a
Notice of Internet Availability of Proxy Materials (the
Notice
) to each of our
stockholders entitled to notice of and to vote at the Annual
Meeting, which contains instructions for accessing the attached
Proxy Statement, our Annual Report on Form 10-K for our fiscal year
ended March 31, 2020 (the
Annual
Report
) and voting instructions. The Notice also includes
instructions on how you can receive a paper copy of your proxy
materials.
The Proxy Statement and
the Annual Report are both available on the Internet at:
http://www.edocumentview.com/VTGN
.
The
close of business on July 24, 2020 (the
Record Date
), has been fixed as the
Record Date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof. Only holders of record of our common stock
at the close of business on the Record Date are entitled to notice
of and to vote at the Annual Meeting. A complete list of these
stockholders will be available for examination by any of our
stockholders for purposes pertaining to the Annual Meeting by
sending an email to
Corp.Secretary@vistagen.com
stating the purpose of the request and providing proof of ownership
of our common stock. This list will also be available for
examination by stockholders of record during the virtual Annual
Meeting webcast at
http://www.meetingcenter.io/280599481
.
You are
entitled to attend the Annual Meeting virtually only if you were a
stockholder as of the close of business on the Record Date or hold
a valid proxy for the Annual Meeting. If you are a stockholder of
record, your ownership as of the Record Date will be verified prior
to admittance into the virtual Annual Meeting. If you are not a
stockholder of record but hold shares through a broker, trustee or
nominee, you must provide proof of beneficial ownership as of the
Record Date, such as an account statement or similar evidence of
ownership, to attend the Annual Meeting. Further information about
how to attend the Annual Meeting online, vote your shares online
during the Meeting and submit questions online during the Meeting
is included in the accompanying Proxy Statement. For instructions
on how to vote your shares, please refer to the instructions on the
Notice of Internet Availability of Proxy Materials you received in
the mail, the section titled “Voting” beginning on
page 2 of the attached Proxy Statement or, if you
requested to receive printed proxy materials, your enclosed proxy
card.
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YOUR VOTES ARE IMPORTANT
All stockholders are cordially invited to attend the Annual
Meeting. However, to ensure your representation at the Annual
Meeting, you are urged to vote online via the Internet, by
telephone or by postal mail in advance of the Annual Meeting, as
promptly as possible. Submitting your votes in advance of the
Annual Meeting assures that a quorum will be present at the Annual
Meeting and will avoid the Company incurring additional expense for
duplicate proxy solicitations. By following the procedures
described in the section entitled “Voting” beginning on
page 2 of the attached Proxy Statement, any stockholder attending
the Annual Meeting virtually may vote at the Meeting, even if he or
she has returned a proxy prior to the Annual Meeting.
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Whether or not you expect to attend the Annual
Meeting virtually, we urge you to vote your shares in advance of
the Annual Meeting, as promptly as possible, online via the
Internet, by telephone or by postal mail so that your shares may be
represented and voted at the Annual Meeting.
If your shares
are held in the name of a bank, broker, brokerage firm or other
fiduciary, please follow the instructions on the voting instruction
card furnished by such institution.
Our
Board of Directors has recommended unanimously that you vote
“FOR” each of the Director nominees identified in
Proposal No. 1 and “FOR” Proposal No. 2, both of which
are described in detail in the accompanying Proxy
Statement.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING:
THE ANNUAL REPORT AND PROXY STATEMENT ARE
AVAILABLE ONLINE VIA THE INTERNET AT
http://www.edocumentview.com/VTGN
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By
Order of the Board of Directors,
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Jerrold
D. Dotson
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Chief Financial Officer and Corporate Secretary
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South
San Francisco, California
July
29, 2020
VistaGen Therapeutics, Inc.
343 Allerton Avenue
South San Francisco, CA 94080
Tel. (650) 577-3600
Fax (888) 482-2602
PROXY STATEMENT
The
enclosed proxy is solicited on behalf of the Board of Directors
(the
Board
) of VistaGen
Therapeutics, Inc., a Nevada corporation (the
Company
,
us
,
we
or
our
), for use at the Company’s
2020 Annual Meeting of Stockholders (the
Annual Meeting
or the
Meeting
). The Annual Meeting will take
place in a virtual meeting format on Thursday September 17, 2020,
10:00 a.m., Pacific Time, and will be held exclusively via the
Internet at
http://www.meetingcenter.io/280599481
.
We have
elected to provide access to the proxy materials for the Annual
Meeting primarily over the Internet in accordance with the U.S.
Securities and Exchange Commission’s (
SEC
) “notice and access”
rules. On or about August 3, 2020, we will mail a Notice of
Internet Availability of Proxy Materials (the
Notice
) to each of our stockholders
entitled to notice of and to vote at the Annual Meeting. The Notice
contains instructions for accessing this Proxy Statement, our
Annual Report on Form 10-K for our fiscal year ended March 31, 2020
(
Annual Report
) and Annual
Meeting voting instructions. The Notice also includes instructions
on how you can receive a paper copy of your proxy materials.
This Proxy Statement and the Annual
Report are available on the Internet at:
http://www.edocumentview.com/VTGN.
Record Date and Shares Outstanding
The specific
proposals to be considered and acted upon at the Annual Meeting are
each described in this Proxy Statement. Only holders of
our common stock as of the close of business on July 24, 2020 (the
Record Date
) are entitled
to notice of and to vote at the Annual Meeting. On the Record Date,
there were 56,029,807 shares of our common stock issued and
outstanding. Each holder of common stock is entitled to one vote
for each share held as of the Record Date.
Quorum
In
order for any business to be conducted at the Annual Meeting, the
holders of more than 50% of the shares entitled to vote must be
represented at the Annual Meeting, either in person or by properly
executed proxy. If a quorum is not present at the scheduled time of
the Annual Meeting, the stockholders who are present may adjourn
the Annual Meeting until a quorum is present. The time and place of
the adjourned Annual Meeting will be announced at the time the
adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
Stockholder List
A list
of registered stockholders as of the close of business on the
Record Date will be open for examination by any stockholder for a
period of ten days prior to the Annual Meeting for a purpose
pertaining to the Meeting by sending an email to
Corp.Secretary@vistagen.com
,
stating the purpose of the request and providing proof of ownership
of our common stock. This list will also be available for
examination to stockholders of record during the virtual Annual
Meeting webcast at
http://www.meetingcenter.io/280599481
.
- 1 -
Attendance at Virtual Annual Meeting
We will
host the Annual Meeting live online, via Internet webcast. You may
attend the Annual Meeting virtually by visiting
http://www.meetingcenter.io/280599481
.
The webcast will start at 10:00 a.m., Pacific Time, on
Thursday, September 17, 2020.
To access the virtual Meeting please go to
http://www.meetingcenter.io/280599481
.
You have the option to log in to the virtual Meeting as a
“Stockholder” with a control number” or as a
“Guest.” If you are a stockholder of record (i.e., if
you hold your shares through Computershare, our registrar and
transfer agent) (a
Stockholder
), you may log in as a Stockholder using the
control number which can be found on your Notice and proxy card,
and Annual Meeting password. The password for the meeting is
VTGN2020. If you are not a stockholder of record (i.e., if
you do not hold your shares through Computershare), but hold shares
through an intermediary, such as a bank or broker, trustee or
nominee (sometimes referred to as holding in “street
name”), you may attend the Meeting as “Guest” by
entering your name and email address. As a Guest, you will have
access to the Meeting materials and will be able to ask questions
during the Meeting, but you will not be able to vote during the
Annual Meeting.
If
you hold your shares through an intermediary, such as a bank or
broker, and you desire to vote during the Annual Meeting, you must
register in advance to attend the Annual Meeting as a Stockholder.
To register to attend the virtual Annual Meeting as a Stockholder,
you must provide proof of beneficial ownership as of the Record
Date, such as an account statement, legal proxy from your broker,
or similar evidence of ownership along with your name and email
address to Computershare. Requests for Annual Meeting registration
of beneficial owners must be labeled as “Legal Proxy”
and be received no later than 5:00 p.m., Eastern Time, on
September 11, 2020. You will receive a confirmation of your Annual
Meeting registration by email after Computershare receives your
registration materials. Requests for registration should be
directed by email to
legalproxy@computershare.com
or by mail to Computershare, VistaGen Therapeutics, Inc. Legal
Proxy, P.O. Box 43001, Providence, RI 02940-3001. You will receive
a confirmation email from Computershare of your Annual Meeting
registration and will receive a control number to enter the Meeting
as a Stockholder.
Whether
you attend the virtual Annual Meeting as a Stockholder or as a
Guest, please allow yourself ample time for the online check-in
procedures.
Questions at the Annual Meeting
If you
wish to submit a question during the virtual Annual Meeting, you
may log in online, and ask a question on our virtual Annual Meeting
platform at
http://www.meetingcenter.io/280599481
.
Our virtual Annual Meeting will be governed by our Rules of Conduct
which will be available on the virtual Meeting platform during the
Annual Meeting. The Rules of Conduct will address the ability of
stockholders to ask questions during the Meeting, including rules
on permissible topics, and rules for how questions and comments
will be recognized and disclosed to Meeting
participants.
Voting
There
are four (4) ways a stockholder of record can vote:
(1)
By
Internet
: If you are a stockholder as of
the Record Date, you may vote over the Internet by following the
instructions provided in the Notice.
(2)
By
Telephone
: If you are a stockholder as of
the Record Date, you may vote by telephone by following the
instructions in the Notice.
(3)
By Mail
: If
you requested printed copies of proxy materials and are a
stockholder as of the Record Date, you may vote by mailing your
proxy as described in the proxy materials.
(4)
During the Annual
Meeting
: The Annual Meeting will be held
exclusively via the Internet, and can only be accessed at
http://www.meetingcenter.io/280599481
.
Subject to the provisions applicable to other than holders of
record as outlined above in the section entitled “Attendance
at Virtual Annual Meeting,” if you are a stockholder as of
the Record Date, you will have the ability to attend the virtual
Meeting and vote online during the Meeting. Submitting a proxy will
not prevent a stockholder from attending the Annual Meeting
virtually, revoking an earlier-submitted proxy in accordance with
the process outlined below and voting online during the virtual
Meeting.
In
order to be counted, proxies submitted by
telephone
or via the
Internet
must
be received by 11:59 p.m., Eastern Time, on September 16,
2020. Proxies submitted by
U.S. mail
must be received
before the start of the virtual Annual Meeting. If you hold your
shares through a bank or broker, please follow their voting
instructions.
- 2 -
Required Vote for Approval
Proposal No. 1: Election of
Directors.
The six nominees who receive the greatest number
of votes cast at the Annual Meeting by the shares present, either
in person or by proxy, and entitled to vote will be elected to
serve on our Board of Directors until our 2021 Annual Meeting of
Stockholders, or until her or his successor is duly elected and
qualified.
Proposal No. 2: Ratification of Appointment of
our Independent Registered Public Accounting Firm.
The
affirmative “FOR” vote of a majority of the shares
present in person or by proxy at the Annual Meeting and entitled to
vote is required for the ratification of the selection of OUM &
Co. LLP as our independent registered public accounting firm for
our current fiscal year.
Abstentions and Broker Non-Votes
All
votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes. An abstention is
the voluntary act of not voting by a stockholder who is present at
a meeting and entitled to vote. A broker “non-vote”
occurs when a broker nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not
have discretionary power for that particular item and has not
received instructions from the beneficial owner. If you hold your
shares in “street name” through a broker, brokerage
firm or other nominee, your broker, brokerage firm or nominee may
not be permitted to exercise voting discretion with respect to some
of the matters to be acted upon. If you do not give your
broker, brokerage firm or nominee specific instructions regarding
such matters, your proxy will be deemed a “broker
non-vote.”
As
noted above, the six director nominees identified under Proposal
No. 1 who receive the most votes at the Annual Meeting will be
elected to serve on our Board of Directors until our 2021 Annual
Meeting of Stockholders, or until her or his successor is duly
elected and qualified, thus abstentions and broker non-votes will
have no effect on the outcome of Proposal No. 1.
Under
Nevada law and our Amended and Restated Bylaws, each other matter
will be determined by the vote of the holders of a majority of the
voting power present or represented by proxy at the Annual Meeting.
For this matter, abstentions and any broker non-votes cast will not
be counted as votes in favor of such proposal, and will also not be
counted as shares voting on such matter.
Revocation of Proxies
The
election of directors requires the affirmative vote of a plurality
of the voting shares present or represented by proxy and entitled
to vote at the Annual Meeting. The six nominees receiving the
highest number of affirmative votes will be elected to serve on our
Board of Directors until our 2021 Annual Meeting of Stockholders,
or until her or his successor is duly elected and qualified. Unless
otherwise instructed or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the election of the nominees.
You may
revoke or change your proxy at any time before the Annual Meeting
by filing, with our Corporate Secretary at our principal executive
offices, located at 343 Allerton Avenue, South San Francisco,
California 94080, a notice of revocation or another signed proxy
with a later date. You may also revoke your proxy by virtually
attending the Annual Meeting and voting in person. Your
attendance at the virtual Annual Meeting will not, by itself,
revoke your proxy.
Solicitation
We will
bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of the Notice, as well as the
preparation and posting on the Internet of this Proxy Statement and
any additional solicitation materials furnished to the
stockholders. Copies of any solicitation materials will be
furnished to brokerage houses, fiduciaries and custodians holding
shares in their names that are beneficially owned by others so that
they may forward the solicitation materials to such beneficial
owners. In addition, we may reimburse such persons for their costs
in forwarding the solicitation materials to such beneficial owners.
The original solicitation of proxies may be supplemented by a
solicitation, by telephone, email or other means, by our directors,
officers or employees. No additional compensation will be paid to
these individuals for any such services. Except as described above,
we do not presently intend to solicit proxies other than by the
Internet, telephone, email and postal mail.
- 3 -
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Our
Bylaws provide that our Board of Directors (
Board
) shall consist of not less than
one, nor more than seven directors, and that upon any change in the
number of directors, any newly created directorships or eliminated
directorships shall be apportioned by the remaining members of the
Board or by stockholders. Our Board currently consists of six
directors, and these six directors are nominated for election at
the Annual Meeting to serve until our next annual meeting of
stockholders, or until her or his successor is duly elected and
qualified. Each nominee has confirmed that he or she is able and
willing to continue serving as a director if elected. If any of the
nominees becomes unable or unwilling to serve, your proxy will be
voted for the election of a substitute nominee recommended by the
current Board.
Upon
recommendation of the members of its Corporate Governance and
Nominating Committee, the Board has nominated for election as
directors at our Annual Meeting Mr. Jon S. Saxe, Ms. Ann M.
Cunningham, Dr. Jerry B. Gin, Mr. Shawn K. Singh, Dr. H. Ralph
Snodgrass and Dr. Brian J. Underdown.
Required Vote and Recommendation
The
election of directors requires the affirmative vote of a plurality
of the voting shares present or represented by proxy and entitled
to vote at the Annual Meeting. The six nominees receiving the
highest number of affirmative votes will be elected to serve on our
Board of Directors until our 2021 Annual Meeting of Stockholders,
or until her or his successor is duly elected and qualified. Unless
otherwise instructed or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the election of the nominees.
The
Board recommends that the stockholders vote “
FOR
” the election of Mr.
Jon S. Saxe, Ms. Ann M. Cunningham, Dr. Jerry B. Gin, Mr. Shawn K.
Singh, Dr. H. Ralph Snodgrass and Dr. Brian J.
Underdown.
The
following sections sets forth certain information regarding the
nominees for election as directors of the Company. There are no
family relationships between any of the directors and the
Company’s executive officers.
BOARD OF DIRECTORS
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Name
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Age
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Position
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Jon S.
Saxe
(1)
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84
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Director
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Ann M.
Cunningham, MBA
(2)
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52
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Director
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Jerry
B. Gin, Ph.D., MBA
(3)
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76
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Director
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Shawn
K. Singh, J.D.
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57
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Chief
Executive Officer and Director
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H.
Ralph Snodgrass, Ph.D.
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70
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President,
Chief Scientific Officer and Director
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Brian
J. Underdown, Ph.D.
(4)
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79
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Director
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(1)
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Chairman
of the Board; Chairman of the Audit Committee and member of the
Compensation Committee and Corporate Governance and Nominating
Committee.
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(2)
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Member
of the Corporate Governance and Nominating Committee.
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(3)
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Chairman
of the Corporate Governance and Nominating Committee and member of
the Audit Committee and Compensation Committee.
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(4)
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Chairman
of the Compensation Committee and member of the Audit Committee and
Corporate Governance and Nominating Committee.
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- 4 -
Jon S.
Saxe, J.D., LL.M.
has
served as Chairman of our Board since 2000, first as Chairman of
the Board of Directors of VistaGen California, then as Chairman of
our Board after completion of the Merger. He also serves as the
Chairman of our Audit Committee. Mr. Saxe is the retired
President and was a director of PDL BioPharma from 1989 to 2008.
From 1989 to 1993, he was President, Chief Executive Officer and a
director of Synergen, Inc. (acquired by Amgen). Mr. Saxe
served as Vice President, Licensing & Corporate
Development for Hoffmann-Roche from 1984 through 1989, and Head of
Patent Law for Hoffmann-Roche from 1978 through 1989. Mr. Saxe
currently is a director of Durect Corporation (NASDAQ: DRRX), and
six private life science companies, Achelios, Arbor Vita
Corporation, Aether, Inc., Arcuo Medical, LLC, Cancer Prevention
Pharmaceuticals, Inc., Trellis Bioscience, Inc. and Epalex
Corporation. Mr. Saxe has also served as a director of other
biotechnology and pharmaceutical companies, including ID Biomedical
(acquired by GlaxoSmithKline), Sciele Pharmaceuticals, Inc.
(acquired by Shionogi), Amalyte (acquired by Kemin Industries),
Cell Pathways (acquired by OSI Pharmaceuticals), Lumos Pharma, Inc.
(merged with New Link Genetics) and other companies, both public
and private. Mr. Saxe has a B.S.Ch.E. from Carnegie-Mellon
University, a J.D. degree from George Washington University and an
LL.M. degree from New York University.
We
selected Mr. Saxe to serve as Chairman of our Board of Directors
due to his numerous years of experience as a senior executive with
major pharmaceutical and biotechnology companies, including Protein
Design Labs, Inc., Synergen, Inc. and Hoffmann-Roche, Inc., as well
as his extensive experience serving as a director of numerous
private and public biotechnology and pharmaceutical companies,
serving as Chairman, and Chair and member of audit, compensation
and governance committees of both private and public
companies. Mr. Saxe provides us and our Board of
Directors with highly valuable insight and perspective into the
biotechnology and pharmaceutical industries, as well as the
strategic opportunities and challenges that we face.
Ann M. Cunningham,
MBA,
was appointed to serve on our Board on January 10,
2019. Ms. Cunningham is the Founder and Managing Partner of i3
Strategy Partners, a consulting firm founded in 2018 that
specializes in assisting companies in the pharmaceutical space.
Prior to founding i3 Strategy Partners, Ms. Cunningham served as
Vice President, Neurodegenerative Diseases and Psychiatry for Teva
Pharmaceuticals Industries, Ltd. from 2015 to 2018, as Senior
Marketing Director for Otsuka Pharmaceutical Companies from 2013 to
2015 and in several marketing-focused positions for Eli Lily and
Company from 1999 to 2013, including serving as Global Marketing
Senior Director from 2009 to 2013. Ms. Cunningham holds a B.A.
degree in Psychology from Yale University and an MBA, with a focus
on marketing management, from the University of
Michigan.
We
selected Ms. Cunningham to serve on our Board due to her
substantial experience in healthcare marketing, particularly in the
successful development, positioning and commercial launch of
products to treat diseases of the central nervous system. Ms.
Cunningham brings an insightful commercial perspective to us and to
our Board that is critical as our pipeline products move from
clinical development to commercialization.
Jerry B. Gin, Ph.D.,
MBA
was appointed to serve on our Board of Directors on
March 29, 2016. Dr. Gin is currently the co-founder and CEO of
Nuvora, Inc., a private company founded in 2006 with a drug
delivery platform for the sustained release of ingredients
through the mouth for such indications as dry mouth, biofilm
reduction and sore throat/cough relief. Dr. Gin is also co-founder
and Chairman of Livionex, a private platform technology company
founded in 2009 and focused on oral care, ophthalmology and wound
care. Previously, Dr. Gin co-founded Oculex Pharmaceuticals in
1993, which developed technology for controlled release delivery of
drugs to the interior of the eye, specifically to treat macular
edema, and served as President and CEO until it was acquired by
Allergan in 2003. Prior to forming Oculex, Dr. Gin co-founded and
took public ChemTrak, which developed a home cholesterol test
commonly available in drug stores today. Prior to ChemTrak, Dr. Gin
was Director of New Business Development and Strategic Planning for
Syva, the diagnostic arm of Syntex Pharmaceuticals, Director for
Pharmaceutical and Diagnostic businesses for Dow Chemical, and
Director of BioScience Labs (now Quest Laboratories), the clinical
laboratories of Dow Chemical. Dr. Gin received his
Bachelor’s degree in Chemistry from the University of
Arizona, his Ph.D. in Biochemistry from the University of
California, Berkeley, his MBA from Loyola College, and conducted
his post-doctoral research at the National Institutes of
Health.
We
selected Dr. Gin to serve on our Board of Directors due to his
extensive experience in the healthcare industry, focusing his
substantial business and scientific expertise on founding and
developing numerous biopharmaceutical, diagnostic and biotechnology
companies and propelling them to their next platforms of growth and
value.
- 5 -
Shawn K. Singh, J.D.
has served as our Chief Executive Officer since August 2009, first
as the Chief Executive Officer of VistaGen Therapeutics, Inc., a
California corporation (
VistaGen
California
), then as Chief Executive Officer of the Company
after the Merger. Mr. Singh first joined the Board of Directors of
VistaGen California in 2000 and served on the VistaGen California
management team (part-time) from late-2003, following VistaGen
California’s acquisition of Artemis Neuroscience, of which he
was President, to August 2009. In connection with the Merger, Mr.
Singh was appointed as a member of our Board in 2011. Mr. Singh has
nearly 30 years of experience working with biotechnology, medical
device and pharmaceutical companies, both private and public. From
2001 to August 2009, Mr. Singh served as Managing Principal of Cato
BioVentures, a life science venture capital firm, and as Chief
Business Officer and General Counsel of Cato Research Ltd, a
contract research organization (
CRO
) affiliated with Cato BioVentures.
Mr. Singh served as President (part-time) of Echo Therapeutics, a
medical device company, from 2007 to 2009, and as a member of its
Board of Directors from 2007 to 2011. He also served as Chief
Executive Officer (part-time) of Hemodynamic Therapeutics, a
private biopharmaceutical company affiliated with Cato BioVentures,
from 2004 to 2009. From 2000 to 2001, Mr. Singh served as Managing
Director of Start-Up Law, a management consulting firm serving
biotechnology companies. Mr. Singh also served as Chief Business
Officer of SciClone Pharmaceuticals (formerly NASDAQ: SCLN), a
specialty pharmaceutical company with a substantial commercial
business in Greater China, from 1993 to 2000, and as a corporate
finance associate of Morrison & Foerster LLP, an international
law firm, from 1991 to 1993. Mr. Singh earned a B.A. degree, with
honors, from the University of California, Berkeley, and a Juris
Doctor degree from the University of Maryland School of Law. Mr.
Singh is a member of the State Bar of California.
We
selected Mr. Singh to serve on our Board of Directors due to his
substantial practical experience and expertise in senior leadership
roles with multiple private and public biotechnology,
pharmaceutical and medical device companies, and his extensive
experience in corporate finance, venture capital, corporate
governance, drug development, intellectual property, regulatory
affairs and strategic collaborations.
H. Ralph Snodgrass,
Ph.D.
co-founded VistaGen California with Dr. Gordon Keller
in 1998 and served as the Chief Executive Officer of VistaGen
California until August 2009. Dr. Snodgrass has served as the
President and Chief Scientific Officer of VistaGen California from
inception to the present, and in the same positions with the
Company following the completion of the Merger. He served as a
member of the Board of Directors of VistaGen California from 1998
to 2011, and was appointed to serve on our Board after the
completion of the Merger. Prior to founding VistaGen California,
Dr. Snodgrass served as a key member of the executive management
team that led Progenitor, Inc., a biotechnology company focused on
developmental biology, through its initial public offering, and was
its Chief Scientific Officer from June 1994 to May 1998, and its
Executive Director from July 1993 to May 1994. He received his
Ph.D. in immunology from the University of Pennsylvania, and has 28
years of experience in senior biotechnology management and over 10
year’s research experience as an assistant professor at the
Lineberger Comprehensive Cancer Center, University of North
Carolina Chapel Hill School of Medicine, and as a member of the
Institute for Immunology, Basel, Switzerland. Dr. Snodgrass is a
past Board Member of the Emerging Company Section of the
Biotechnology Industry Organization (
BIO
), and past member of the
International Society of Stem Cell Research (
ISSCR
) Industry Committee. Dr.
Snodgrass has published more than 95 scientific papers, is the
inventor on more than 21 patents and a number of patent
applications, has been the Principal Investigator on U.S. federal
and private foundation sponsored research grants with budgets
totaling more than $14.5 million and is recognized as an expert in
stem cell biology with more than 32 years’ experience in the
uses of stem cells as biological tools for research, drug discovery
and development.
We
selected Dr. Snodgrass to serve on our Board of Directors due to
his expertise in biotechnology focused on developmental biology,
including stem cell biology, his extensive senior management
experience leading biotechnology companies at all stages of
development, as well as his reputation and standing in the fields
of biotechnology and stem cell research, which allow him to bring
to us and the Board of Directors a unique understanding of the
challenges and opportunities associated with pluripotent stem cell
biology, as well as credibility in the markets in which we
operate.
- 6 -
Brian J. Underdown,
Ph.D.
has served as a member of our Board of Directors since
November 2009, first as a director of VistaGen California, then as
a member of our Board after the completion of the Merger.
Dr. Underdown retired as a Venture Partner with Lumira Capital
Corp.in December 2016, after having served as a Managing Director
with Lumira from September 1997 through December 2015. During his
time at Lumira, Dr. Underdown’s investment focus was on
therapeutics in both new and established companies in both Canada
and the United States. Prior to joining Lumira and its antecedent
company MDS Capital Corp., Dr. Underdown held a number of
senior management positions in the biopharmaceutical industry and
at universities. Dr. Underdown’s current board positions
include the following private companies: Kisoji Biotechnology Inc.,
Naegis Pharmaceuticals, Inc. and Osteo QC. Some of Dr.
Underdown’s previous board roles include: Argos Therapeutics
(NASDAQ: ARGS), ID Biomedical (acquired by GlaxoSmithKline), enGene
Inc. and Ception Therapeutics (acquired by Cephalon). He
has served on a number of Boards and advisory bodies of
government-sponsored research organizations including CANVAC, the
Canadian National Centre of Excellence in Vaccines, Ontario
Genomics Institute (Chair), Allergen Plc., the Canadian National
Centre of Excellence in Allergy and Asthma. Dr. Underdown
obtained his Ph.D. in immunology from McGill University and
undertook post-doctoral studies at Washington University School of
Medicine.
We
selected Dr. Underdown to serve on our Board of Directors due to
his extensive background working in the biotechnology and
pharmaceutical industries, as a director of numerous private and
public companies, as well as his substantial corporate finance and
venture capital experience funding and advising startup and
established biopharmaceutical companies focused on development and
commercialization of novel therapeutics.
Director Compensation
We
adopted a director compensation policy for the independent
directors of our Board, as “independent” is defined by
the rules of the Nasdaq Stock Market rules, which policy became
effective for our fiscal year beginning April 1, 2014. Under our
independent director compensation policy, our independent directors
are entitled to receive a $25,000 annual retainer, payable in cash
or shares of our common stock. For service on a committee of the
Board, an independent director is entitled to receive an additional
annual cash retainer of $7,500 for service on our Audit Committee
and Compensation Committee, and $5,000 for service on our Corporate
Governance and Nominating Committee. In lieu of the annual cash
retainer for committee participation, each independent director
serving as a chair of a Board committee shall receive an annual
cash retainer of $15,000 for the Audit Committee and Compensation
Committee chairs and $10,000 for the Corporate Governance and
Nominating Committee chair. In addition, each independent director
will also receive an annual grant of an option or warrant to
purchase a minimum of 12,000 shares of our common stock, which will
vest monthly over a one-year period from the date of grant.
Prorated grants are made for partial years of service.
We paid
our independent directors cash compensation consistent with the
policy noted above during our fiscal year ended March 31,
2020.
In May
2019, we granted to each of our four independent directors options
to purchase 50,000 shares of our common stock at an exercise price
of $1.00 per share under the terms of our Amended and Restated 2016
Stock Incentive Plan (the
2016
Plan
). In October 2019, following the approval by our
stockholders of our 2019 Omnibus Equity Incentive Plan (the
2019 Plan
), we granted to
each of our four independent directors options to purchase 75,000
shares of our common stock at an exercise price of $1.41 per share
under the terms of our 2019 Plan. Each grant awarded to our
independent directors during the year ended March 31, 2020 expires
ten years after the date of grant.
The
following table sets forth a summary of the compensation earned by
our independent, non-employee directors in our fiscal year ended
March 31, 2020.
|
|
Fees
Paid
in Cash
(1)
|
Option
Awards
(2)(7)
|
Other
Compensation
|
Total
|
|
Name
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
|
|
Jon S.
Saxe
(3)
|
$
52,500
|
$
101,347
|
$
-
|
$
153,847
|
|
Brian J. Underdown,
Ph.D.
(4)
|
$
52,500
|
$
101,347
|
$
-
|
$
153,847
|
|
Jerry B. Gin,
Ph.D., M.B.A
(5)
|
$
50,000
|
$
101,347
|
$
-
|
$
151,347
|
|
Ann M. Cunningham
(6)
|
$
30,000
|
$
101,347
|
$
-
|
$
131,347
|
- 7 -
|
(1)
|
The
amounts shown represent fees earned for service on our Board, and
Audit Committee, Compensation Committee and Corporate Governance
and Nominating Committee during the fiscal year ended March 31,
2020, which amounts were paid in full during the fiscal year then
ended.
|
|
||||||||||||
|
|
|
|
||||||||||||
|
(2)
|
The
amounts in the “Option Awards” column do not represent
any cash payments actually received by Mr. Saxe, Dr. Underdown, Dr.
Gin or Ms. Cunningham with respect to any of such stock options
awarded to them during the fiscal year ended March 31, 2020
Rather, the amounts represent (i) the aggregate grant date fair
value of options to purchase shares of our common stock awarded to
Mr. Saxe, Dr. Underdown, Dr. Gin and Ms. Cunningham during our
fiscal year ended March 31, 2020, computed in accordance with the
Financial Accounting Standards Board’s Accounting Standards
Codification Topic 718, Compensation – Stock Compensation
(
ASC 718
). To date,
Mr. Saxe, Dr. Underdown, Dr. Gin and Ms. Cunningham have not
exercised any of the options granted during our fiscal year ended
March 31, 2020, and there can be no assurance that any of them will
ever realize any of the ASC 718 grant date fair value amounts
presented in the “Option Awards” column.
|
|
||||||||||||
|
(3)
|
Mr.
Saxe has served as the Chairman of our Board, the Chairman of our
Audit Committee and a member of our Compensation Committee and
Corporate Governance and Nominating Committee throughout our fiscal
year ended March 31, 2020. At March 31, 2020, Mr. Saxe
held: (i) 23,251 shares of our common stock; (ii) options to
purchase 437,500 registered shares of our common stock, of which
options to purchase 351,631 shares were exercisable; and (iii)
warrants to purchase 57,500 restricted shares of our common stock,
all of which are exercisable.
|
|
||||||||||||
|
(4)
|
Dr.
Underdown has served as a member of our Board, as the Chairman of
our Compensation Committee and as a member of our Audit Committee
and Corporate Governance and Nominating Committee throughout the
fiscal year ended March 31, 2020. At March 31, 2020, Dr.
Underdown held: (i) options to purchase 437,500 registered shares
of our common stock, of which options to purchase 351,631 shares
were exercisable; and (ii) warrants to purchase 57,500 restricted
shares of our common stock, all of which are
exercisable.
|
|
||||||||||||
|
(5)
|
Dr. Gin
has served as a member of our Board, as the Chairman of our
Corporate Governance and Nominating Committee and as a member of
our Audit Committee and Compensation Committee throughout the
fiscal year ended March 31, 2020. At March 31, 2020, Dr. Gin held:
(i) 50,000 shares of our unregistered common stock, (ii) options to
purchase 460,000 registered shares of our common stock of which
374,131 were exercisable; and (ii) warrants to purchase 50,000
restricted shares of our common stock, all of which are
exercisable.
|
|
||||||||||||
|
(6)
|
Ms.
Cunningham has served as a member of our Board and as a member of
Corporate Governance and Nominating Committee since her appointment
to both on January 10, 2019. At March 31, 2020, Ms. Cunningham held
options to purchase 150,000 registered shares of our common stock,
of which 78,386 were exercisable.
|
|
||||||||||||
|
(7)
|
The
table below provides information regarding the option awards we
granted to Mr. Saxe, Dr. Underdown, Dr. Gin and Ms. Cunningham
during fiscal 2020 and the assumptions used in the Black Scholes
Option Pricing Model to determine the grant date fair values of the
respective awards.
|
|
||||||||||||
|
|
|
|
||||||||||||
|
|
Option
|
Option
|
|
|
|
Grant
|
Grant
|
|
|
|
5/23/2019
|
10/21/2019
|
Total
|
|
Mr.
Saxe
|
$
26,916
|
$
74,431
|
$
101,347
|
|
Dr.
Underdown
|
26,916
|
74,431
|
101,347
|
|
Dr.
Gin
|
26,916
|
74,431
|
101,347
|
|
Ms.
Cunningham
|
26,916
|
74,431
|
101,347
|
|
|
$
107,662
|
$
297,725
|
$
405,388
|
|
Exercise
Price
|
$
1.00
|
$
1.41
|
|
|
Grant Date stock
price
|
$
0.80
|
$
1.41
|
|
|
Risk free interest
rate
|
2.13
%
|
1.62
%
|
|
|
Expected Term
(years)
|
5.58
|
$
5.39
|
|
|
Volatility
|
85.85
%
|
87.53
%
|
|
|
Dividend
rate
|
0.00
%
|
0.00
%
|
|
|
Fair value per
share
|
$
0.54
|
$
0.99
|
|
|
Aggregate option
shares
|
200,000
|
300,000
|
|
Mr. Saxe, Dr.
Underdown, Dr. Gin and Ms. Cunningham were each granted an option
to purchase 50,000 shares of our common stock on May 23, 2019. Each
was also granted an option to purchase 75,000 shares of our common
stock on October 21, 2019.
- 8 -
On
April 23, 2020, when the closing price of our common stock, as
reported on the Nasdaq Capital Market was $0.398 per share, the
Compensation Committee of the Board granted options from our 2019
Omnibus Equity Incentive Plan to each of Mr. Saxe, Dr. Underdown,
Dr. Gin and Ms. Cunningham to purchase 75,000 shares of our common
stock at an exercise price of $0.398 per share. Such options were
vested 25% upon grant with the remaining shares vesting ratably
over two years.
Board Attendance at Board of Directors, Committee and Stockholder
Meetings
Our
Board met five times and acted by unanimous written consent five
times during our fiscal year ended March 31, 2020. Our Audit
Committee met four times. Our Compensation Committee met once,
acted by unanimous written consent three times with respect to
executive compensation matters and grants of equity securities, and
requested action by the entire Board with respect to the adoption
of our 2019 Omnibus Equity Incentive Plan and 2019 Employee Stock
Purchase Plan and the modification of certain outstanding warrants.
Our Corporate Governance and Nominating Committee requested action
by the entire Board with respect to re-election of members of our
Board and other resolutions presented to our stockholders at our
September 2019 annual meeting of stockholders and Board committee
assignments. With the exception of Dr. Snodgrass, who was unable to
attend one Board meeting due to international travel, each director
serving during our fiscal year ended March 31, 2020 attended all of
the meetings of the Board and the committees of the Board upon
which such director served that were held during the fiscal
year.
We do
not have a formal policy regarding attendance by members of the
Board at our annual meetings of stockholders, but directors are
encouraged to attend. With the exception of Dr. Underdown and Ms.
Cunningham, each of whom was unavailable, each of our directors
attended our September 2019 Annual Meeting of Stockholders in
person.
Independent Directors
Our
securities are currently listed on the Nasdaq Capital Market, which
requires that a majority of our directors be independent.
Accordingly, we evaluate director independence under the standards
established by the SEC and the rules of the Nasdaq Stock
Market.
Subject
to some exceptions, these standards generally provide that a
director will not be independent if (a) the director is, or in the
past three years has been, an employee of ours; (b) a member of the
director’s immediate family is, or in the past three fiscal
years has been, an executive officer of ours; (c) the director or a
member of the director’s immediate family has received more
than $200,000 per year in direct compensation from us other than
for service as a director (or for a family member, as a
non-executive employee); (d) the director or a member of the
director’s immediate family is, or in the past three years
has been, employed in a professional capacity by our independent
public accountants, or has worked for such firm in any capacity on
our audit; (e) the director or a member of the director’s
immediate family is, or in the past three years has been, employed
as an executive officer of a company where one of our executive
officers serves on the compensation committee; or (f) the director
or a member of the director’s immediate family is an
executive officer of a company that makes payments to, or receives
payments from, us in an amount which, in any twelve-month period
during the past three years, exceeds the greater of $1,000,000 or
two percent of that other company’s consolidated gross
revenues.
Our
Board has undertaken a review of its composition, the composition
of its committees and the independence of each director. Based upon
information requested from and provided by each director concerning
his or her background, employment and affiliations, including
family relationships, our Board has determined that Mr. Saxe, Ms.
Cunningham, Dr. Gin and Dr. Underdown are each
“independent” as that term is defined by the rules of
the Nasdaq Stock Market. Our Board has also determined that Mr.
Saxe, Dr. Underdown and Dr. Gin, who together comprise our Audit
Committee and Compensation Committee, and, together with Ms.
Cunningham comprise our Corporate Governance and Nominating
Committee, satisfy the independence standards set forth in the
Nasdaq Stock Market rules. In making these determinations, our
Board considered the current and prior relationships that each
nonemployee director has with the Company and all other facts and
circumstances that our Board deemed relevant.
- 9 -
Board
Committees and Charters
Our
Board has established an Audit Committee, a Compensation Committee
and a Corporate Governance and Nominating Committee. The
composition and responsibilities of each committee are described
below. Members serve on these committees until their resignation or
until otherwise determined by our Board. Since April 1, 2017, only
our independent directors, Mr. Saxe, Dr. Gin and Dr. Underdown,
and, since January 10, 2019, Ms. Cunningham, serve as members of
these committees.
The
Audit Committee of our Board is comprised of Mr. Saxe, who serves
as the committee chairman, Dr. Underdown and Dr. Gin. Mr. Saxe is
also our Audit Committee financial expert, as that term is defined
under SEC rules implementing Section 407 of the Sarbanes Oxley Act
of 2002, and possesses the requisite financial sophistication, as
defined under applicable rules. The Audit Committee operates under
a written charter. Our Audit Committee charter is available on our
website at
www.vistagen.com
. Under its
charter, our Audit Committee is primarily responsible for, among
other things, the following:
|
●
|
overseeing
our accounting and financial reporting process;
|
|
●
|
selecting,
retaining and replacing our independent auditors and evaluating
their qualifications, independence and performance;
|
|
●
|
reviewing
and approving scope of the annual audit and audit
fees;
|
|
●
|
monitoring
rotation of partners of independent auditors on engagement team as
required by law;
|
|
●
|
discussing
with management and independent auditors the results of annual
audit and review of quarterly financial statements;
|
|
●
|
reviewing
adequacy and effectiveness of internal control policies and
procedures;
|
|
●
|
approving
retention of independent auditors to perform any proposed
permissible non-audit services;
|
|
●
|
overseeing
internal audit functions and annually reviewing audit committee
charter and committee performance; and
|
|
●
|
preparing
the audit committee report that the SEC requires in our annual
proxy statement.
|
Compensation Committee
The
Compensation Committee of our Board is comprised of Dr. Underdown,
who serves as the committee chairman, Mr. Saxe, and Dr. Gin. Our
Compensation Committee charter is available on our website at
www.vistagen.com
.
Under its charter, the Compensation Committee is primarily
responsible for, among other things, the following:
|
●
|
reviewing
and approving our compensation programs and arrangements applicable
to our executive officers (as defined in Rule I 6a-I (f) of the
Securities Exchange Act of 1934, as amended (the
Exchange Act
)), including all
employment-related agreements or arrangements under which
compensatory benefits are awarded or paid to, or earned or received
by, our executive officers, including, without limitation,
employment, severance, change of control and similar agreements or
arrangements;
|
- 10 -
|
|
|
●
determining
the objectives of our executive officer compensation
programs;
●
ensuring
corporate performance measures and goals regarding executive
officer compensation are set and determining the extent to which
they are achieved and any related compensation earned;
●
establishing
goals and objectives relevant to Chief Executive Officer
compensation, evaluating Chief Executive Officer performance in
light of such goals and objectives, and determining Chief Executive
Officer compensation based on the evaluation;
●
endeavoring
to ensure that our executive compensation programs are effective in
attracting and retaining key employees and reinforcing business
strategies and objectives for enhancing stockholder value,
monitoring the administration of incentive-compensation plans and
equity-based incentive plans as in effect and as adopted from time
to time by the Board;
●
reviewing
and approving any new equity compensation plan or any material
change to an existing plan; and
●
reviewing
and approving any stock option award or any other type of award as
may be required for complying with any tax, securities, or other
regulatory requirement, or otherwise determined to be appropriate
or desirable by the committee or Board.
Corporate Governance and Nominating Committee
The
Corporate Governance and Nominating Committee of our Board is
comprised of Dr. Gin, who serves as the committee chairman, Mr.
Saxe, Dr. Underdown and Ms. Cunningham. Our Corporate Governance
and Nominating Committee charter is available on our website at
www.vistagen.com
.
Under its charter, the Corporate Governance and Nominating
Committee is primarily responsible for, among other things, the
following:
●
monitoring
the size and composition of the Board;
●
making
recommendations to the Board with respect to the nominations or
elections of our directors;
●
reviewing
the adequacy of our corporate governance policies and procedures
and our Code of Business Conduct and Ethics, and recommending any
proposed changes to the Board for approval; and
●
considering
any requests for waivers from our Code of Business Conduct and
Ethics and ensure that we disclose such waivers as may be required
by the exchange on which we are listed, if any, and rules and
regulations of the SEC.
Compensation Committee Interlocks and Insider
Participation
The
Compensation Committee of our Board consists of Dr. Underdown, Mr.
Saxe and Dr. Gin, each of whom is an independent, nonemployee
director. None of the members of the Compensation Committee has a
relationship that would constitute an interlocking relationship
with executive officers or directors of another
entity.
Board Leadership Structure
The
Board currently separates the roles of Chief Executive Officer and
Chairman of the Board in recognition of the differences between the
two roles. Our Chief Executive Officer, who is also a member of our
Board, is responsible for setting the strategic direction of the
Company and the day-to-day leadership and performance of the
Company, while the Chairman of the Board provides guidance to the
Chief Executive Officer and sets the agenda for the Board meetings
and presides over meetings of the Board. Although these roles are
currently separate, the Board believes it should be able to freely
select the Chairman of the Board based on criteria that it deems to
be in the best interest of the Company and its stockholders, and
therefore one person may, in the future, serve as both the Chief
Executive Officer and Chairman of the Board.
- 11 -
Board Role in Risk Assessment
Management, in
consultation with outside professionals, as applicable, identifies
risks associated with the Company’s operations, strategies
and financial statements. Risk assessment is also performed through
periodic reports received by the Audit Committee from management,
counsel and the Company’s independent registered public
accountants relating to risk assessment and management. Audit
Committee members meet privately in executive sessions with
representatives of the Company’s independent registered
public accountants. The Board also provides risk oversight through
its periodic reviews of the financial and operational performance
of the Company.
Code of Ethics
We have
adopted a Code of Business Conduct and Ethics applicable to our
employees, officers and directors. Our Code of Business
Conduct and Ethics is available on our website at
www.vistagen.com
. We
intend to disclose any future amendments to certain provisions of
our Code of Business Conduct and Ethics, or waivers of these
provisions, on our website or in filings with the SEC under the
Exchange Act.
Stockholder Communications
If you
wish to communicate with the Board, you may send your communication
in writing to:
VistaGen
Therapeutics, Inc.
343
Allerton Avenue
South
San Francisco, California 94080
Attn:
Corporate Secretary
You
must include your name and address in the written communication and
indicate whether you are a stockholder of the Company. The
Corporate Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director or
directors or committee of the Board based on the subject
matter.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
The
Audit Committee has reviewed and discussed with management and OUM
& Co. LLP (
OUM
), our
independent registered public accounting firm, the audited
consolidated financial statements in the VistaGen Therapeutics,
Inc. Annual Report on Form 10-K for the year ended March 31, 2020.
The Audit Committee has also discussed with OUM those matters
required to be discussed by Public Company Accounting Oversight
Board (
PCAOB
) Auditing
Standard No. 16.
OUM
also provided the Audit Committee with the written disclosures and
the letter required by the applicable requirements of the PCAOB
regarding the independent auditor’s communication with the
Audit Committee concerning independence. The Audit Committee has
discussed with the registered public accounting firm their
independence from our Company.
Based
on its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, the Audit Committee
recommended to our Board of Directors that the audited financial
statements be included in our Annual Report on Form 10-K for the
year ended March 31, 2020.
|
|
Respectfully
Submitted by:
MEMBERS
OF THE AUDIT COMMITTEE
Jon S.
Saxe, Audit Committee Chairman
Jerry
B. Gin
Brian
J. Underdown
|
Dated:
June 29, 2020
The
information contained above under the caption “
Report of the Audit Committee of the Board of
Directors
” shall not be deemed to be soliciting
material or to be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to
the extent that we specifically incorporate it by reference into
such filing.
- 12 -
EXECUTIVE COMPENSATION
Executive Officers
The
Company’s executive officers are appointed by the Board of
Directors (the
Board
) and
serve at the discretion of the Board, subject to the terms of any
employment agreements they may have with the Company. The following
is a brief description of the present and past business experience
of each of the Company’s current executive
officers.
|
Name
|
|
Age
|
|
Position
|
|
Shawn
K. Singh,
J.D.
|
|
57
|
|
Chief
Executive Officer and Director
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
70
|
|
Founder,
President, Chief Scientific Officer and Director
|
|
Mark A.
Smith, M.D., Ph.D.
|
|
64
|
|
Chief
Medical Officer
|
|
Jerrold
D. Dotson, CPA
|
|
67
|
|
Vice
President, Chief Financial Officer and Secretary
|
|
Mark A.
McPartland
|
|
54
|
|
Vice
President, Corporate Development
|
Shawn K. Singh, J.D.
Please see Mr. Singh’s biography on page 6 of this Proxy
Statement, under the section titled “
Directors
.”
H. Ralph Snodgrass,
Ph.D.
Please see Dr. Snodgrass’s biography on page 6
of this Proxy Statement, under the section titled
“
Directors
.”
Mark A. Smith, M.D.,
Ph.D.
has served
as our Chief Medical Officer since June 2016. Dr. Smith
served as the Clinical Lead for Neuropsychiatry at Teva
Pharmaceuticals from November 2013 through June 2016. He
served as Senior Director of Experimental Medicine, Global Clinical
Development and Innovation at Shire Pharmaceuticals from September
2012 to October 2013 and at AstraZeneca Pharmaceutical Company
as Executive Director of Clinical Development and in other senior
positions from June 2000 through September 2012. He served as
a Senior Investigator and Principal Research Scientist in CNS
Diseases Research at DuPont Pharmaceutical Company from 1996 to
2000 and in the Biological Psychiatry and Clinical
Neuroendocrinology Branches of the National Institute of Mental
Health from 1987 through 1996. Dr. Smith has significant
expertise in drug discovery and development and clinical trial
design and execution, having directed approximately fifty clinical
trials from Phase 0 through Phase II B and served as
project leader in both the discovery and development of
approximately twenty investigational new drugs aimed at depression,
anxiety, schizophrenia and other disorders. Dr. Smith
received his Bachelor of Science and Master of Science degrees in
Molecular Biophysics and Biochemistry from Yale University; his M.D
and Ph.D. in Physiology and Pharmacology from the University of
California, San Diego and completed his residency at Duke
University Medical Center.
Jerrold D. Dotson,
CPA
has served as our Chief Financial Officer since
September 2011, as our Corporate Secretary since October 2013 and
as a Vice President since February 2014. Mr. Dotson served as
Corporate Controller for Discovery Foods Company, a privately held
Asian frozen foods company from January 2009 to September
2011. From February 2007 through September 2008, Mr.
Dotson served as Vice President, Finance and Administration
(principal financial and accounting officer) for Calypte Biomedical
Corporation (OTCBB: CBMC), a publicly held biotechnology
company. Mr. Dotson served as Calypte’s Corporate
Secretary from 2001 through September 2008. He also
served as Calypte’s Director of Finance from January 2000
through July 2005 and was a financial consultant to Calypte from
August 2005 through January 2007. Prior to joining
Calypte, from 1988 through 1999, Mr. Dotson worked in various
financial management positions, including Chief Financial Officer,
for California & Hawaiian Sugar Company, a privately held
company. Mr. Dotson is licensed as a CPA in California
and received his B.S. degree in Business Administration with a
concentration in accounting from Abilene Christian
College.
Mark A.
McPartland
has served as our Vice-President, Corporate
Development since October 2016. Mr. McPartland previously served as
the Vice President of Corporate Development and Communications at
Stellar Biotechnologies, Inc. (now Edesa Biotech, Inc. (NASDAQ:
EDSA)), from November 2013 to September 2016. While at Stellar, Mr.
McPartland was responsible for transforming and expanding its
capital markets and corporate communications strategy, while also
supporting its global business development activities. From
September 2011 to November 2013, Mr. McPartland served as Senior
Vice President at MZ North America, a subsidiary of MZ Group, a
global leader in investor relations and corporate communications,
and from January 2005 to January 2011, he served as Vice President
and Partner at Alliance Advisors, LLC where he specialized in the
implementation of capital markets strategy, market positioning and
financial communications, and Regional Vice President of Hayden
Communications, Inc. where he led investor relations and corporate
communications programs for micro and small cap companies. Mr.
McPartland received his Bachelors in Business Administration and
Marketing from Coastal Carolina University.
- 13 -
Our Compensation Objectives
Our
compensation practices are designed to attract key employees and to
retain, motivate and reward our executive officers for their
performance and contribution to our long-term success. Our Board,
through the Compensation Committee, seeks to compensate our
executive officers by combining short and long-term cash and equity
incentives. It also seeks to reward the achievement of corporate
and individual performance objectives, and to align executive
officers’ incentives with stockholder value creation. When
possible, the Compensation Committee seeks to tie individual goals
to the area of the executive officer’s primary
responsibility. These goals may include the achievement of specific
financial or business development goals. Also, when possible and
appropriate taking into account the Company’s financial
condition and other related facts and circumstances, the
compensation committee seeks to set performance goals that reach
across all business areas and include achievements in
finance/business development and corporate
development.
The
Compensation Committee makes decisions regarding salaries, annual
bonuses, if any, and equity incentive compensation for our
executive officers, approves corporate goals and objectives
relevant to the compensation of the Chief Executive Officer and our
other executive officers. The Compensation Committee solicits input
from our Chief Executive Officer regarding the performance of our
other executive officers. Finally, the Compensation Committee also
administers our incentive compensation and benefit
plans.
Although we have no
formal policy for a specific allocation between current and
long-term compensation, or cash and non-cash compensation, when
possible and appropriate taking into account the Company’s
financial condition and other related facts and circumstances, we
seek to implement a pay mix for our officers with a relatively
equal balance of both, providing a competitive salary with a
significant portion of compensation awarded on both corporate and
personal performance.
Compensation Components
As a
general rule, and when possible and appropriate taking into account
the Company’s financial condition and other related facts and
circumstances, our compensation consists primarily of three
elements: base salary, annual bonus and long-term equity
incentives. We describe each element of compensation in more detail
below.
Base Salary
Base
salaries for our executive officers are established based on the
scope of their responsibilities and their prior relevant
experience, taking into account competitive market compensation
paid by other companies in our industry for similar positions and
the overall market demand for such executives, both initially at
the time of hire and thereafter, to ensure that we retain our
executive management team. An executive officer’s base salary
is also determined by reviewing the executive officer’s other
compensation to ensure that the executive officer’s total
compensation is in line with our overall compensation
philosophy.
Base
salaries are reviewed periodically as deemed necessary by the
Compensation Committee and increased for merit reasons, based on
the executive officers’ success in meeting or exceeding
individual objectives. Additionally, we may adjust base salaries as
warranted throughout the year for promotions or other changes in
the scope or breadth of an executive officer’s role or
responsibilities.
Annual Bonus
The
Compensation Committee assesses the level of the executive
officer’s achievement of meeting individual goals, as well as
that executive officer’s contribution towards our
corporate-wide goals. The amount of the cash bonus depends on the
level of achievement of the individual performance goals, with a
target bonus generally set as a percentage of base salary and based
on the achievement of pre-determined milestones. For the
year ended March 31, 2019, each Named Executive Officer
(
NEO
) serving during that
period was awarded a bonus by the Compensation Committee in the
amount set forth in the Summary Compensation Table below. At the
time of this Proxy Statement, the Compensation Committee has not
determined or awarded a bonus to any NEO for our fiscal year ended
March 31, 2020. Payment of a bonus to a NEO for our fiscal year
ended March 31, 2020, if any, is at the discretion of the
Compensation Committee which may consider factors other than
attainment of individual or corporate goals in its determination of
bonus amounts to be granted.
- 14 -
Long-Term Equity Incentives
The
Compensation Committee believes that to attract and retain
management, employees and independent directors, the compensation
paid to these persons should include non-cash equity-based
compensation, in addition to base salary and potential annual cash
incentives, that is competitive with peer companies. The
Compensation Committee determines the amount and terms of non-cash
equity-based compensation granted under our stock option plans or
pursuant to other awards made to our executives, employees and
independent directors. Any long-term equity compensation granted to
our management, employees and independent directors does not
represent cash payments made to such individuals, and there is no
guarantee that any recipients of awards granted as long-term equity
compensation will realize any cash value as a result of the
awards.
During
the year ended March 31, 2020, the Compensation Committee granted
stock options to management, employees and independent directors as
a part of each individual's long-term compensation. The options
have a term of ten years, and an exercise price that was at or
above the market price of our common stock on the grant date, which
the Compensation Committee believes align the long-term interests
of our management, employees and independent directors with those
of our stockholders. In addition, the exercise price of the options
granted during our 2020 fiscal year remains above the market price
of our common stock as of March 31, 2020.
2020 Summary Compensation Table
The
following table shows information regarding the compensation of our
NEOs for services performed in the fiscal years ended March 31,
2020 and 2019.
|
Name and Principal
|
|
Fiscal
|
|
Salary
|
|
|
Bonus
(9)
|
|
|
Option Awards
(6)
|
|
|
|
All Other Compensation
|
|
|
Total
|
|
|||||
|
Position
|
|
Year
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
($)
|
|
|
($)
|
|
|||||
|
Shawn
K. Singh, J.D.
(1)
|
|
2020
|
|
|
498,000
|
|
|
|
-
|
|
|
|
435,667
|
|
(7)
|
|
|
-
|
|
|
|
933,667
|
|
|
Chief Executive Officer
|
|
2019
|
|
|
466,365
|
|
|
|
110,305
|
|
|
|
374,445
|
|
(8)
|
|
|
-
|
|
|
|
951,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
H.
Ralph Snodgrass, Ph.D.
(2)
|
|
2020
|
|
|
416,850
|
|
|
|
-
|
|
|
|
254,405
|
|
(7)
|
|
|
-
|
|
|
|
671,255
|
|
|
President, Chief Scientific Officer
|
|
2019
|
|
|
393,991
|
|
|
|
73,444
|
|
|
|
174,823
|
|
(8)
|
|
|
-
|
|
|
|
642,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mark A.
Smith, M.D., Ph.D.
(3)
|
|
2020
|
|
|
416,850
|
|
|
|
-
|
|
|
|
179,988
|
|
(7)
|
|
|
-
|
|
|
|
596,838
|
|
|
Chief Medical Officer
|
|
2019
|
|
|
393,991
|
|
|
|
73,444
|
|
|
|
154,922
|
|
(8)
|
|
|
-
|
|
|
|
622,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Jerrold
D. Dotson
(4)
|
|
2020
|
|
|
367,500
|
|
|
|
-
|
|
|
|
229,571
|
|
(7)
|
|
|
-
|
|
|
|
597,071
|
|
|
Vice President, Chief Financial Officer and Secretary
|
|
2019
|
|
|
344,992
|
|
|
|
64,749
|
|
|
|
131,326
|
|
(8)
|
|
|
-
|
|
|
|
541,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mark A.
McPartland
(5)
|
|
2020
|
|
|
300,000
|
|
|
|
-
|
|
|
|
179,988
|
|
(7)
|
|
|
-
|
|
|
|
479,988
|
|
|
Vice President, Corporate Development
|
|
2019
|
|
|
268,750
|
|
|
|
50,874
|
|
|
|
187,017
|
|
(8)
|
|
|
-
|
|
|
|
506,641
|
|
- 15 -
|
(1)
|
Mr.
Singh became Chief Executive Officer of VistaGen Therapeutics, Inc.
(a California corporation) (
VistaGen California
) on August 20, 2009
and our Chief Executive Officer in May 2011, in connection with the
Merger. Pursuant to his January 2010 employment
agreement, as amended in June 2016, Mr. Singh’s annual base
cash salary, was contractually set at $395,000. The Compensation
Committee has since adjusted Mr. Singh’s base annual salary
to $477,000 effective in July 2018 and to $498,000 effective in
April 2019. Pursuant to his employment agreement, Mr. Singh is
eligible to receive an annual cash incentive bonus of up to fifty
percent (50%) of his base cash salary.
|
|
|
|
|
(2)
|
Through
August 20, 2009, Dr. Snodgrass served as VistaGen
California’s President and Chief Executive Officer, at which
time he became its President and Chief Scientific
Officer. He became our President and Chief Scientific
Officer in May 2011, in connection with the
Merger. Pursuant to his January 2010 employment
agreement, as amended in June 2016, Dr. Snodgrass’ annual
base cash salary, was contractually set at $350,000. The
Compensation Committee has since adjusted Dr. Snodgrass’ base
annual salary to $397,000 effective in July 2018 and to $416,850
effective in April 2019. Pursuant to his employment agreement,
Dr. Snodgrass is eligible to receive an annual cash incentive bonus
of up to fifty percent (50%) of his base cash salary.
|
|
|
|
|
(3)
|
Dr.
Smith became our Chief Medical Officer upon his employment
effective June 18, 2016. During our fiscal year ended March 31,
2019, Dr. Smith’s annual base cash salary was $397,000. The
Compensation Committee adjusted Dr. Smith’s base annual
salary to $416,850 effective in April 2019.
|
|
|
|
|
(4)
|
Mr.
Dotson served as Chief Financial Officer on a contract basis from
September 19, 2011 through August 2012, at which time he became our
full-time employee. During our fiscal year ended March
31, 2019, Mr. Dotson’s annual base cash salary was $350,000.
The Compensation Committee adjusted Mr. Dotson’s base annual
salary to $367,500 effective in April 2019.
|
|
|
|
|
(5)
|
Mr.
McPartland has served as our Vice-President, Corporate Development
since October 2016 and was designated a NEO in September 2017.
During our fiscal year ended March 31, 2019, Mr. McPartland’s
annual base cash salary was $275,000. The Compensation Committee
adjusted Mr. McPartland’s base annual salary to $300,000
effective in April 2019.
|
|
|
|
|
(6)
|
The
amounts in the Option Awards column do not represent any cash
payments actually received by the NEOs with respect to any of such
options to purchase shares of our common stock awarded to them or
modified during the periods presented. Rather, the amounts in this
column represent only (i) the aggregate grant date fair value of
options to purchase shares of our common stock awarded to Mr.
Singh, Dr. Snodgrass, Dr. Smith, Mr. Dotson and Mr. McPartland
during the fiscal year presented, and (ii) in Fiscal 2019, the
modification date incremental fair value resulting from the
reduction of exercise prices in excess of $1.56 per share to $1.50
per share for options previously granted to Mr. Singh, Dr.
Snodgrass, Dr. Smith, Mr. Dotson and Mr. McPartland, both computed
in accordance with the Financial Accounting Standards Board’s
Accounting Standards Codification Topic 718, Compensation –
Stock Compensation (
ASC
718
). Other than the exercise of such modified options to
purchase 25,375 and 2,500 shares of our common stock at $1.50 per
share by Mr. Singh and Dr. Snodgrass, respectively, during our
fiscal year ended March 31, 2019, to date, none of the NEOs have
exercised any of such options to purchase common stock, and there
can be no assurance that any of them will ever realize any of the
ASC 718 grant date fair value amounts presented in the Option
Awards column.
|
|
|
|
|
(7)
|
The
amounts in the table below do not represent any cash payments
actually received by the NEOs with respect to any of such options
to purchase shares of our common stock awarded to them or modified
during the periods presented. Rather, the table below provides
information regarding the option awards we granted to the
NEO’s during Fiscal 2020 and the assumptions used in the
Black Scholes Option Pricing Model to determine the grant date fair
values of the respective awards.
|
|
|
|
- 16 -
|
Option Award Compensation –
|
Option Grant
|
Option Grant
|
Option Grant
|
|
|
Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
$
42,182
|
$
95,803
|
$
297,682
|
$
435,667
|
|
Dr.
Snodgrass
|
80,747
|
-
|
173,658
|
254,405
|
|
Dr.
Smith
|
80,747
|
-
|
99,241
|
179,988
|
|
Mr.
Dotson
|
80,747
|
-
|
148,824
|
229,571
|
|
Mr.
McPartland
|
80,747
|
-
|
99,241
|
179,988
|
|
|
$
365,170
|
$
95,803
|
$
818,646
|
$
1,279,619
|
|
Option Shares Granted -
|
Option Grant
|
Option Grant
|
Option Grant
|
|
|
Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
80,000
|
170,000
|
300,000
|
550,000
|
|
Dr.
Snodgrass
|
150,000
|
-
|
175,000
|
325,000
|
|
Dr.
Smith
|
150,000
|
-
|
100,000
|
250,000
|
|
Mr.
Dotson
|
150,000
|
-
|
150,000
|
300,000
|
|
Mr.
McPartland
|
150,000
|
-
|
100,000
|
250,000
|
|
|
680,000
|
170,000
|
825,000
|
1,675,000
|
|
Option Award Assumptions –
|
Option Grant
|
Option Grant
|
Option Grant
|
|
Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
|
|
|
|
|
|
Market price per
share
|
$
0.80
|
0.84
|
$
1.41
|
|
Exercise price per
share
|
$
1.00
|
1.00
|
$
1.41
|
|
Risk-free interest
rate
|
2.13
%
|
1.45
%
|
1.62
%
|
|
Volatility
|
85.9
%
|
86.0
%
|
87.5
%
|
|
Expected term
(years)
|
5.58
|
5.58
|
5.39
|
|
Dividend
rate
|
0.0
%
|
0.0
%
|
0.0
%
|
|
|
|
|
|
|
Fair value per
share
|
$
0.54
|
0.56
|
$
0.99
|
|
Aggregate
shares
|
680,000
|
170,000
|
825,000
|
|
|
|||
|
(8)
|
The amounts in the table below do not represent any cash payments
actually received by the NEOs with respect to any of such options
to purchase shares of our common stock awarded to them or modified
during the periods presented. Rather, the table below provides
information regarding the option awards we granted to the
NEO’s during Fiscal 2019 and the assumptions used in the
Black Scholes Option Pricing Model to determine the grant date fair
values of the respective awards and
modifications:
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Option
Award Compensation –
|
Option
Grant
|
Option
Modifications
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
$
-
|
$
95,436
|
$
279,009
|
$
374,445
|
|
Dr.
Snodgrass
|
122,913
|
51,910
|
-
|
174,823
|
|
Dr.
Smith
|
98,330
|
56,592
|
-
|
154,922
|
|
Mr.
Dotson
|
98,330
|
32,996
|
-
|
131,326
|
|
Mr.
McPartland
|
147,495
|
39,522
|
-
|
187,017
|
|
|
$
467,068
|
$
276,456
|
$
279,009
|
$
1,022,533
|
- 17 -
|
Option Shares Granted -
|
Option
Grant
|
Option Modifications
|
Option
Grant
|
|
|
Fiscal Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
-
|
-
|
220,000
|
220,000
|
|
Dr.
Snodgrass
|
125,000
|
-
|
-
|
125,000
|
|
Sr.
Smith
|
100,000
|
-
|
-
|
100,000
|
|
Mr.
Dotson
|
100,000
|
-
|
-
|
100,000
|
|
Mr.
McPartland
|
150,000
|
-
|
-
|
150,000
|
|
|
475,000
|
-
|
220,000
|
695,000
|
|
Option Award Assumptions -
|
Option Grant
|
Option
Modifications
|
Option Grant
|
|
Fiscal Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
|
|
|
|
|
|
Market price per
share
|
$
1.27
|
|
$
1.70
|
|
Exercise price per
share
|
$
1.27
|
|
$
1.70
|
|
Risk-free interest
rate
|
2.84
%
|
|
2.55
%
|
|
Volatility
|
99.29
%
|
|
93.56
%
|
|
Expected term
(years)
|
5.50
|
|
5.50
|
|
Dividend
rate
|
0
%
|
|
0
%
|
|
|
|
|
|
|
Fair value per
share
|
$
0.988
|
|
$
1.27
|
|
Aggregate
shares
|
475,000
|
|
220,000
|
Amounts shown for
option modification compensation reflect the modification date
incremental fair value resulting from the reduction of exercise
prices in excess of $1.56 per share to $1.50 per share for options
previously granted to the NEOs, as permitted by the 2016 Plan.
Options to purchase 555,375 shares, 346,250 shares and 231,001
shares of our common stock and having pre-modification exercise
prices from $1.96 per share to $10.00 per share were modified to
reduce the exercise price to $1.50 per share for Mr. Singh, Dr.
Snodgrass and Mr. Dotson, respectively. Options to purchase 385,000
shares of our common stock and having pre-modification exercise
prices from $1.96 per share to $3.80 per share were modified to
reduce the exercise price to $1.50 per share for Dr. Smith. Options
to purchase 265,000 shares of our common stock and having
pre-modification exercise prices from $1.96 per share to $4.27 per
share were modified to reduce the exercise price to $1.50 per share
for Mr. McPartland.
(9)
Amounts reported in the Bonus column
reflect bonuses awarded by the Compensation Committee and earned
and accrued during the year ended March 31, 2019 by each NEO for
attainment of performance-based objectives during that period.
Bonus amounts awarded by the Compensation Committee and earned by
each NEO during the year ended March 31, 2019 were paid to each NEO
during the subsequent fiscal year.
The Compensation Committee has not yet determined
or awarded a bonus to any NEO for our fiscal year ended March 31,
2020, nor have any bonus amounts been accrued as of the Record
Date.
No NEO
is entitled to receive, nor has any NEO received, any perquisites
or other personal benefits that, in the aggregate, are worth over
$50,000 or over 10% of their base salary.
Benefit Plans
401(k) Plan
We
maintain, through a registered agent, a retirement and deferred
savings plan for our officers and employees. This plan is intended
to qualify as a tax-qualified plan under Section 401(k) of the
Internal Revenue Code of 1986, as amended. The retirement and
deferred savings plan provides that each participant may contribute
a portion of his or her pre-tax compensation, subject to statutory
limits. Under the plan, each employee is fully vested in his or her
deferred salary contributions. Employee contributions are held and
invested by the plan’s trustee. The retirement and deferred
savings plan also permits us to make discretionary contributions
subject to established limits and a vesting schedule. To
date, we have not made any discretionary contributions to the
retirement and deferred savings plan on behalf of participating
employees.
- 18 -
2019 Employee Stock Purchase Plan
Following the
approval of our 2019 Employee Stock Purchase Plan (the
2019 ESPP
) by our stockholders in
September 2019, the 2019 ESPP became operational effective January
1, 2020. Under our 2019 ESPP, shares of our common stock will be
available for purchase by eligible employees, including our
NEO’s, who participate in the plan. Eligible employees will
be entitled to purchase, by means of payroll deductions, limited
amounts of our common stock at a discount to the market price
during periodic option periods under the 2019 ESPP. At March 31,
2020, no option period had been completed under the 2019
ESPP. The initial option period under the 2019 ESPP was
completed on June 30, 2020 and Mr. Singh, Dr. Snodgrass, Dr. Smith
and Mr. Dotson each purchased 5,000 shares of our common stock, the
maximum number of shares each such NEO is permitted to purchase
during any option period pursuant to the 2019 ESPP, at a price of
$0.448 per share in accordance with the provisions of the 2019
ESPP.
Outstanding Warrants and Options at March 31, 2020
The
following table provides information regarding each unexercised
stock option and warrant to purchase shares of our common stock
held by each of the NEOs as of March 31, 2020.
|
|
|
|
Stock Options and Warrants
|
|
||||||||||
|
Name
|
|
|
Number of Securities Underlying Unexercised Options and
Warrants
(#)
Exercisable
|
|
|
|
Number of Securities
Underlying Unexercised Options and Warrants
(#) Unexercisable
|
|
|
|
Exercise
Price ($)
|
|
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shawn
K. Singh, J.D.
|
|
|
5,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2021
|
|
|
|
|
|
72,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
7.00
|
|
9/2/2020
|
|
|
|
|
|
187,500
|
|
(1)
|
|
12,500
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
100,000
|
|
(2)
|
|
-
|
|
(2)
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
170,138
|
|
(3)
|
|
4,862
|
|
(3)
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
125,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
300,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
151,250
|
|
(4)
|
|
68,750
|
|
(4)
|
|
1.70
|
|
1/14/2029
|
|
|
|
|
|
58,335
|
|
(7)
|
|
21,665
|
|
(7)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
63,750
|
|
(9)
|
|
106,250
|
|
(9)
|
|
1.00
|
|
9/5/2029
|
|
|
|
|
|
121,875
|
|
(10)
|
|
178,125
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
Total:
|
|
|
1,604,848
|
|
|
|
392,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
|
150,000
|
|
|
|
-
|
|
|
|
7.00
|
|
9/20/2020
|
|
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
117,187
|
|
(1)
|
|
7,813
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
80,000
|
|
(2)
|
|
-
|
|
(2)
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
121,527
|
|
(3)
|
|
3,473
|
|
(3)
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
175,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
105,468
|
|
(5)
|
|
19,532
|
|
(4)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
68,750
|
|
(8)
|
|
81,250
|
|
(8)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
71,094
|
|
(10)
|
|
103,906
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
Total:
|
|
|
1,039,026
|
|
|
|
215,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A.
Smith, M.D. Ph.D.
|
|
|
168,750
|
|
(1)
|
|
11,250
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
80,000
|
|
(2)
|
|
-
|
|
(2)
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
121,527
|
|
(3)
|
|
3,473
|
|
(3)
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
200,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
84,375
|
|
(5)
|
|
15,625
|
|
(5)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
68,750
|
|
(8)
|
|
81,250
|
|
(8)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
40,625
|
|
(10)
|
|
59,375
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
Total:
|
|
|
864,027
|
|
|
|
170,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 19 -
|
Jerrold
D. Dotson
|
|
|
5,001
|
|
|
|
-
|
|
|
|
1.50
|
|
10/30/2022
|
|
|
|
|
|
1,000
|
|
|
|
-
|
|
|
|
1.50
|
|
10/27/2023
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
7.00
|
|
9/2/2020
|
|
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
70,312
|
|
(1)
|
|
4,688
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
50,000
|
|
(2)
|
|
-
|
|
(2)
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
97,222
|
|
(3)
|
|
2,778
|
|
(3)
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
200,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
84,375
|
|
(5)
|
|
15,625
|
|
(5)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
68,750
|
|
(8)
|
|
81,250
|
|
(8)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
60,938
|
|
(10)
|
|
89,062
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
Total:
|
|
|
847,598
|
|
|
|
193,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A.
McPartland
|
|
|
109,375
|
|
(6)
|
|
15,625
|
|
|
|
1.50
|
|
9/29/2026
|
|
|
|
|
|
40,000
|
|
(2)
|
|
-
|
|
(6)
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
97,222
|
|
(3)
|
|
2,778
|
|
(3)
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
150,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
126,562
|
|
(5)
|
|
23,438
|
|
(5)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
68,750
|
|
(8)
|
|
81,250
|
|
(8)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
40,625
|
|
(10)
|
|
59,375
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
Total:
|
|
|
682,534
|
|
|
|
182,466
|
|
|
|
|
|
|
|
|
(1)
|
Represents
an option to purchase shares of our common stock at $3.49 per share
granted on June 19, 2016 when the market price of our common stock
was $3.49 per share. The option became exercisable for
25% of the shares granted on June 19, 2017 with the remaining
shares becoming exercisable ratably monthly through June 19, 2020,
when all shares granted will be fully exercisable. The exercise
price of the option was reduced to $1.50 per share on August 29,
2018.
|
|
(2)
|
Represents
an option to purchase shares of our common stock at $3.80 per share
granted on November 9, 2016 when the market price of our common
stock was $3.80 per share. All shares granted are now
fully exercisable. The exercise price of the option was reduced to
$1.50 per share on August 29, 2018.
|
|
(3)
|
Represents
an option to purchase shares of our common stock at $1.96 per share
granted on April 26, 2017 when the market price of our common stock
was $1.96 per share. All shares granted are now fully
exercisable. The exercise price of the option was reduced to $1.50
per share on August 29, 2018.
|
|
(4)
|
Represents
an option to purchase shares of our common stock at $1.70 per share
granted on January 14, 2019 when the market price of our common
stock was $1.70 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
January 14, 2021, when all shares granted will be fully
exercisable.
|
|
(5)
|
Represents
an option to purchase shares of our common stock at $1.27 per share
granted on August 5, 2018 when the market price of our common stock
was $1.27 per share. The option became exercisable for
25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
August 5, 2020, when all shares granted will be fully
exercisable.
|
- 20 -
|
(6)
|
Represents
an option to purchase shares of our common stock at $4.27 per share
granted on September 29, 2016 when the market price of our common
stock was $4.27 per share. The option became exercisable
for 25% of the shares granted on September 29, 2017, with the
remaining shares becoming exercisable ratably monthly through
September 29, 2020, when all shares granted will be fully
exercisable. The exercise price of the option was reduced to $1.50
per share on August 29, 2018.
|
|
(7)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for
62.5% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through May
23, 2022, when all shares granted will be fully
exercisable.
|
|
(8)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for
25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through My
23, 2022, when all shares granted will be fully
exercisable.
|
|
(9)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on September 5, 2019 when the market price of our common
stock was $0.84 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
September 5, 2022, when all shares granted will be fully
exercisable.
|
|
(10)
|
Represents
an option to purchase shares of our common stock at $1.41 per share
granted on October 21, 2019 when the market price of our common
stock was $1.41 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
October 21, 2021, when all shares granted will be fully
exercisable.
|
On
April 23, 2020, when the closing price of our common stock, as
reported on the Nasdaq Capital Market was $0.398 per share, the
Compensation Committee granted options from our 2019 Omnibus Equity
Incentive Plan to Mr. Singh to purchase 300,000 shares and to each
of Dr. Snodgrass, Dr. Smith, Mr. Dotson and Mr. McPartland to
purchase 150,000 shares of our common stock at an exercise price of
$0.398 per share. Such options were vested 25% upon grant with the
remaining shares vesting ratably over two years.
Employment or Severance Agreements
We have
employment agreements with Mr. Singh and Dr. Snodgrass, the
material terms of which are described below.
Agreement with Mr. Singh
We
entered into an employment agreement with Mr. Singh on April 28,
2010. Under the agreement, as amended on June 22, 2016, Mr.
Singh’s base salary was increased from $347,500 per year to
$395,000 per year, effective June 16, 2016. The Compensation
Committee has subsequently adjusted Mr. Singh’s base annual
salary to $477,000 effective in July 2018 and to $498,000 effective
in April 2019. Under his agreement, Mr. Singh is eligible to
receive an annual incentive cash bonus of up to 50% of his base
salary. The Compensation Committee awarded Mr. Singh a cash bonus
of $110,305 for attainment of performance-based objectives during
the year ended March 31, 2019. At the time of this Proxy Statement,
the Compensation Committee has not determined or awarded a bonus to
Mr. Singh for attainment of performance-based objectives during our
fiscal year ended March 31, 2020. The award of his annual incentive
bonus, if any, is at the discretion of the Compensation Committee
of our Board of Directors. In the event we terminate Mr.
Singh’s employment without cause, he is entitled to receive
severance in an amount equal to:
- 21 -
●
twelve months of
his then-current base salary payable in the form of salary
continuation;
●
a pro-rated portion
of the incentive cash bonus that the Board of Directors determines
in good faith that Mr. Singh earned prior to his termination;
and
●
such amounts
required to reimburse him for Consolidated Omnibus Budget
Reconciliation Act (
COBRA
)
payments for continuation of his medical health benefits for such
twelve-month period.
In
addition, in the event Mr. Singh terminates his employment with
“good reason” following a “change of
control” (each as defined below), he is entitled to twelve
months of his then-current base salary payable in the form of
salary continuation.
Agreement with Dr. Snodgrass
We
entered into an employment agreement with Dr. Snodgrass on April
28, 2010. Under the agreement, as amended on June 22, 2016, Dr.
Snodgrass’s base salary was increased from $305,000 per year
to $350,000 per year, effective June 16, 2016. The Compensation
Committee has subsequently adjusted Dr. Snodgrass’ base
annual salary to $397,000 effective in July 2018 and to $416,850
effective in April 2019. Under his agreement, Dr. Snodgrass is
eligible to receive an annual incentive cash bonus of up to 50% of
his base salary. The Compensation Committee awarded Dr. Snodgrass
cash bonuses of $73,444 for attainment of performance-based
objectives during the year ended March 31, 2019. At the time of
this Proxy Statement, the Compensation Committee has not determined
or awarded a bonus to Dr. Snodgrass for attainment of
performance-based objectives during our fiscal year ended March 31,
2020. The award of his annual incentive bonus, if any, is at the
discretion of the Compensation Committee of the Board of Directors.
In the event we terminate Dr. Snodgrass’s employment without
cause, he is entitled to receive severance in an amount equal
to:
●
twelve months of
his then-current base salary payable in the form of salary
continuation;
●
a pro-rated portion
of the incentive bonus that the Board of Directors determines in
good faith that Dr. Snodgrass earned prior to his termination;
and
●
such amounts
required to reimburse him for COBRA payments for continuation of
his medical health benefits for such twelve-month
period.
In
addition, in the event Dr. Snodgrass terminates his employment
with "good reason" (as defined below), he is entitled to twelve
months of his then-current base salary payable in the form of
salary continuation.
Change of Control Provisions
Pursuant to each of
their respective employment agreements, Dr. Snodgrass is
entitled to severance if he terminates his employment at any time
for “good reason” (as defined below), while
Mr. Singh is entitled to severance if he terminates his
employment for good reason after a change of control. Under their
respective agreements, “good reason” means any of the
following events, if we affect the event without the
executive’s consent (subject to our right to
cure):
●
a material
reduction in the executive’s responsibility; or
●
a material
reduction in the executive’s base salary except for
reductions that are comparable to reductions generally applicable
to similarly situated executives of VistaGen.
Furthermore,
pursuant to their respective employment agreements and their stock
option award agreements, as amended, in the event we terminate the
executive without cause within twelve months of a change of
control, the executive’s remaining unvested option shares
become fully vested and exercisable. Upon a change of control in
which the successor corporation does not assume the
executive’s stock options, the stock options granted to the
executive become fully vested and exercisable.
Pursuant to their
respective employment agreements, a change of control occurs when:
(i) any “person” as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than
VistaGen, a subsidiary, an affiliate, or a VistaGen employee
benefit plan, including any trustee of such plan acting as trustee)
becoming the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of VistaGen representing 50% or more of the combined
voting power of VistaGen’s then outstanding securities;
(ii) a sale of substantially all of VistaGen’s assets;
or (iii) any merger or reorganization of VistaGen whether or
not another entity is the survivor, pursuant to which the holders
of all the shares of capital stock of VistaGen outstanding prior to
the transaction hold, as a group, fewer than 50% of the shares of
capital stock of VistaGen outstanding after the
transaction.
In the
event that, following termination of employment, amounts are
payable to an executive pursuant to his employment agreement, the
executive’s eligibility for severance is conditioned on
executive having first signed a release agreement.
Pursuant to their
respective employment agreements, the estimated amount that could
be paid by us assuming that a change of control occurred on the
last business day of our current fiscal year, is $498,000 for
Mr. Singh and $416,850 for Dr. Snodgrass, excluding the
imputed value of accelerated vesting of stock options, if
any.
- 22 -
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF
OUM & CO. LLP TO SERVE AS THE COMPANY'S
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR
Upon
recommendation of the Audit Committee of the Board, the Board
appointed OUM & Co. LLP (
OUM
) as our independent registered
public accounting firm for the current fiscal year and hereby
recommends that the stockholders ratify such
appointment.
The
Board may terminate the appointment of OUM as the Company’s
independent registered public accounting firm without the approval
of the Company’s stockholders whenever the Board deems such
termination necessary or appropriate.
Representatives of
OUM will be present at the Annual Meeting or available by telephone
and will have an opportunity to make a statement if they so desire
and to respond to appropriate questions from
stockholders.
Fees and Services
OUM
served as our independent registered public accounting firm for the
fiscal years ended March 31, 2020 and 2019. Information provided
below includes fees for professional services provided to us by OUM
for our fiscal years ended March 31, 2020 and 2019.
|
|
Fiscal
Years Ended
March
31,
|
|
|
|
2020
|
2019
|
|
|
|
|
|
Audit
fees
|
$
242,500
|
$
226,200
|
|
Audit-related
fees
|
22,400
|
57,600
|
|
Tax
fees
|
16,000
|
16,000
|
|
All other
fees
|
|
-
|
|
Total
fees
|
$
280,900
|
$
299,800
|
Audit
Fees:
Audit
fees include fees billed for the annual audit of the
Company’s financial statements and quarterly reviews for the
fiscal years ended March 31, 2020 and 2019, and for services
normally provided by OUM in connection with routine statutory and
regulatory filings or engagements.
Audit-Related Fees:
Audit-related fees
include fees billed for assurance and related services that are
reasonably related to the performance of the annual audit or
reviews of the Company’s financial statements and are not
reported under “
Audit
Fees
.” During our fiscal years ended March 31,
2020 and 2019, OUM billed the Company for services related to
comfort letters and consents for the use of its audit opinion in
our filings of Registration Statements on Form S-3, Form S-1, and
Form S-8 that included or incorporated by reference the
Company’s audited financial statements for the fiscal years
ended March 31, 2019 and 2018.
Tax Fees:
Tax
fees include fees for professional services for tax compliance, tax
advice and tax planning for the tax years ended March 31, 2020 and
2019.
All Other Fees:
All
other fees include fees for products and services other than those
described above. During our fiscal years ended March 31,
2020 and 2019, no such fees were billed by OUM.
Required Vote and Recommendation
Ratification of the
selection of OUM as the Company’s independent registered
public accounting firm for our fiscal year ending March 31, 2021
requires the affirmative vote of a majority of the shares present
or represented by proxy and entitled to vote at the Annual Meeting.
Unless otherwise instructed on the proxy or unless authority to
vote is withheld, shares represented by executed proxies will be
voted “FOR” the ratification of OUM as the
Company’s independent registered public accounting firm for
our fiscal year ending March 31, 2021.
The
Board unanimously recommends that stockholders vote
“
FOR
”
the ratification of the selection of OUM as our independent
registered public accounting firm for our fiscal year ending March
31, 2021.
- 23 -
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS
The
following table sets forth certain information with respect to the
beneficial ownership of our common stock as of July 20, 2020
for:
●
each stockholder
known by us to be the beneficial owner of more than 5% of our
common stock;
●
each of our
directors;
●
each of our named
executive officers; and
●
all of our
directors and executive officers as a group.
Applicable
percentage ownership is based on 55,901,807 shares of common stock
outstanding at July 20, 2020. In computing the number of shares of
common stock beneficially owned by a person, we deemed to be
outstanding all shares of common stock subject to options or
warrants and all shares of preferred stock held by that person or
entity that are currently exercisable or exchangeable or that will
become exercisable or exchangeable within 60 days of July 20,
2020. In computing the percentage of shares beneficially
owned, we deemed to be outstanding all shares of common stock
subject to options or warrants and all shares of preferred stock
held by that person or entity that are currently exercisable or
exchangeable or that will become exercisable or exchangeable within
60 days of July 20, 2020. Unless otherwise noted below,
the address of each beneficial owner listed in the table is c/o
VistaGen Therapeutics, Inc., 343 Allerton Avenue, South San
Francisco, California 94080.
|
Name and address of beneficial owner
|
|
Number of shares beneficially owned
|
|
|
Percent
of shares beneficially
owned
(1)
|
|
||
|
Executive officers and directors:
|
|
|
|
|
|
|
||
|
Shawn
K. Singh, J.D.
(2)
|
|
|
1,904,861
|
|
|
|
3.30
|
%
|
|
H.
Ralph Snodgrass, Ph.D.
(3)
|
|
|
1,251,787
|
|
|
|
2.19
|
%
|
|
Mark A.
Smith, M.D., Ph.D.
(4)
|
|
|
986,875
|
|
|
|
1.73
|
%
|
|
Jerrold
D. Dotson
(5)
|
|
|
971,627
|
|
|
|
1.71
|
%
|
|
Mark
McPartland
(6)
|
|
|
809,270
|
|
|
|
1.43
|
%
|
|
Jon S.
Saxe, J.D., LL.M.
(7)
|
|
|
491,689
|
|
|
|
*
|
|
|
Brian
J. Underdown, Ph.D.
(8)
|
|
|
468,438
|
|
|
|
*
|
|
|
Jerry
B. Gin, Ph.D., MBA
(9)
|
|
|
633,438
|
|
|
|
1.12
|
%
|
|
Ann M.
Cunningham, MBA
(10)
|
|
|
123,438
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
|
Montsant
Partners, LLC
(11)
|
|
|
4,239,331
|
|
|
|
7.07
|
%
|
|
Lincoln
Park Capital Fund, LLC
(12)
|
|
|
4,238,102
|
|
|
|
7.10
|
%
|
|
Eric D.
Weinberger
(13)
|
|
|
6,815,000
|
|
|
|
12.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
All
executive officers and directors as a group (9
persons)
|
|
|
|
|
|
|
|
%
|
____________________
* less
than 1%
|
(1)
|
Based
on 55,901,807 shares of common stock issued and outstanding as of
July 20, 2020.
|
|
(2)
|
Includes
options to purchase 1,526,252 shares of common stock exercisable
within 60 days of July 20, 2020 and currently exercisable warrants
to purchase 322,000 restricted shares of common stock.
|
|
(3)
|
Includes
options to purchase 969,063 shares of common stock exercisable
within 60 days of July 20, 2020, and currently exercisable warrants
to purchase 200,000 restricted shares of common stock.
|
- 24 -
|
(4)
|
Includes
options to purchase 981,875 shares of common stock exercisable
within 60 days of July 20, 2020.
|
|
(5)
|
Includes
options to purchase 971,627 shares of common stock exercisable
within 60 days of July 20, 2020, including options to purchase 626
shares of common stock held by Mr. Dotson’s wife, and
currently exercisable warrants to purchase 110,000 restricted
shares of common stock.
|
|
(6)
|
Includes
options to purchase 809,270 shares of common stock exercisable
within 60 days of July 20, 2020.
|
|
(7)
|
Includes
options to purchase 410,738 shares of common stock exercisable
within 60 days of July 20 2020 and currently exercisable warrants
to purchase 57,500 restricted shares of common stock.
|
|
(8)
|
Includes
options to purchase 410,938 shares of common stock exercisable
within 60 days of July 20, 2020 and currently exercisable warrants
to purchase 57,500 restricted shares of common stock.
|
|
(9)
|
Includes
50,000 restricted shares of common stock held by Dr. Gin’s
wife, options to purchase 433,438 shares of common stock
exercisable within 60 days of July 20, 2020 and currently
exercisable warrants to purchase 100,000 unregistered shares of
common stock, including currently exercisable warrants to purchase
50,000 unregistered shares held by Dr. Gin’s
wife.
|
|
(10)
|
Includes
options to purchase 123,438 shares of common stock exercisable
within 60 days of July 20, 2020.
|
|
(11)
|
Based
upon Company records of transactions between us and Montsant
Partners, LLC (
Montsant
),
through July 20, 2020. The number of beneficially owned
shares reported includes 637,500 restricted shares of common stock
that may currently be acquired by Montsant upon fixed exchange of
425,000 restricted shares of our Series A Preferred Stock
(
Series A
Preferred
).
Further,
the reported number of shares beneficially owned by Montsant also
includes 1,131,669 shares of common stock pursuant to its ownership
of 1,131,669 shares of our Series B 10% Convertible Preferred Stock
(
Series B Preferred
),
immediately convertible into a like number of shares of our common
stock, but excludes shares of unregistered common stock that may be
issued as payment of accrued but unpaid dividends in the amount of
approximately $5.30 million at July 20, 2020 on shares of Series B
Preferred owned by Montsant. Pursuant to the terms of the
Certificate of Designation of the Relative Rights and Preferences
of the Series B 10% Convertible Preferred Stock, there is, however,
a limitation on conversion of the Series B Preferred such that the
number of shares of common stock that Montsant may beneficially
acquire upon such conversion, including shares issued in payment of
accrued dividends, is limited to the extent necessary to ensure
that, following such conversion, the total number of shares of
common stock then beneficially owned by Montsant does not exceed
9.99% of the total number of then issued and outstanding shares of
our common stock without providing us with 61 days’ prior
notice thereof.
|
|
|
Further,
the reported number of shares beneficially owned by Montsant also
includes 2,318,012 shares of common stock pursuant to its ownership
of 2,318,012 shares of our Series C Convertible Preferred Stock
(
Series C Preferred
),
immediately convertible on a fixed 1:1 conversion basis into a like
number of shares of our restricted common stock. In addition to the
shares of common stock that may be issuable to Montsant upon
conversion of the shares of Series A Preferred, Series B Preferred
and Series C Preferred described above, Montsant may be deemed to
be the beneficial owner of 152,150 shares or 0.27% of our common
stock at July 20, 2020.
|
|
|
Matthew
Wright, Operating Manager of RHSW (Cayman) Ltd., and/or Moshe
Feuer, Chief Executive Officer and authorized signatory of BAM may,
subject to certain restrictions, be deemed to have voting and
investment control over the shares held by Montsant. The address
for Montsant is c/o BAM Administrative Services LLC, 105 Madison
Avenue, 19th Floor, New York, NY 10016.
|
|
(12)
|
Based
upon Company records of transactions between us and Lincoln Park
Capital Fund, LLC (
Lincoln
Park
), and upon the Schedule 13G filed by Lincoln Park with
the SEC on January 29, 2020. Includes an aggregate of
3,814,602 shares of Common Stock issuable upon exercise of Common
Stock purchase warrants held by Lincoln Park, of which warrants to
purchase 2,814,602 shares of Common Stock become exercisable on
July 25, 2020, subject to a 9.99% beneficial ownership cap that
prohibits the issuance of shares of Common Stock upon exercise of
the Common Stock purchase warrants to the extent such issuance
would cause the holder’s beneficial ownership of Common Stock
to exceed 9.99% of the outstanding Common Stock. The address for
Lincoln Park is 440 North Wells, Suite 410,
Chicago, Illinois 60654.
Lincoln Park
Capital, LLC (
LPC
) is the
Managing Member of Lincoln Park. Rockledge Capital Corporation
(
RCC
) and Alex Noah
Investors, Inc. (
Alex Noah
)
are the Managing Members of LPC. Joshua B. Scheinfeld is
the president and sole shareholder of RCC, as well as a principal
of LPC. Jonathan I. Cope is the president and sole shareholder of
Alex Noah, as well as a principal of LPC. As a result of the
foregoing, Mr. Scheinfeld and Mr. Cope have shared voting and
shared investment power over the shares of VistaGen common stock
held directly by Lincoln Park. Pursuant to Section 13(d) of the Act
and the rules thereunder, each of LPC, RCC, Mr. Scheinfeld, Alex
Noah, and Mr. Cope may be deemed to be a beneficial owner of the
shares of VistaGen common stock beneficially owned directly by
Lincoln Park. Pursuant to Rule 13d-4 of the Act, each of LPC, RCC,
Mr. Scheinfeld, Alex Noah, and Mr. Cope disclaims beneficial
ownership of the shares of Common Stock of the Issuer held directly
by Lincoln Park.
|
- 25 -
|
(13)
|
Based
upon the Company’s records. Includes currently exercisable
warrants to purchase 750,000 registered shares of common stock and
currently exercisable options to purchase 115,000 shares of
registered common stock. The shares of common stock [and warrants?]
are held by Eric D. Weinberger and Megan G. Weinberger as joint
tenants with right of survivorship. The Weinberger’s address
is 14189 Caloosa Boulevard, West Palm Beach, FL 33418. Eric D.
Weinberger and Megan G. Weinberger share voting and investment
control over the shares held.
|
Securities Authorized for Issuance Under Equity Compensation
Plans
Equity Grants
As of
July 20, 2020, options to purchase a total of 11,948,088 registered
shares of our common stock were outstanding at a weighted average
exercise price of $1.21 per share, of which 8,992,471 options were
vested and exercisable at a weighted average exercise price of
$1.32 per share and 2,955,617 were unvested and not exercisable at
a weighted average exercise price of $0.87 per share. These options
were issued under our 2019 Omnibus Equity Incentive Plan (the
2019 Plan
) and under our
Amended and Restated 2016 Stock Incentive Plan, formerly titled the
2008 Stock Incentive Plan (the
2016 Plan
), as described below. At July
20, 2020, an additional 4,785,162 shares remained available for
future equity grants under our 2019 Plan and no new awards are
available for grant under our 2016 Plan.
The
following table summarizes awards outstanding under the 2016 Plan
and the 2019 Plan, as well as shares available for issuance under
2019 Plan and our 2019 Employee Stock Purchase Plan (
2019 ESPP
) as of March 31, 2020. The
following information does not reflect issuances under the 2019
Plan or the 2019 ESPP subsequent to March 31, 2020.
|
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
|
10,003,088
|
$
1.36
|
7,730,162
|
|
Equity compensation
plans not approved by security holders
|
--
|
|
--
|
|
Total
|
10,003,088
|
$
1.36
|
7,730,162
|
- 26 -
Description of the 2016 Plan
Our
Board unanimously approved the Company’s Amended and Restated
2016 Stock Incentive Plan, formerly titled the 2008 Stock Incentive
Plan (the
2016 Plan
), on
July 26, 2016, and the 2016 Plan was approved by our stockholders
at our 2016 Annual Meeting of Stockholders on September 26, 2016,
and further amended to increase the number of shares authorized for
issuance therefrom at our 2017 Annual Meeting of Stockholders on
September 15, 2017. The 2016 Plan provided for the grant of stock
options, restricted shares of common stock, stock appreciation
rights and dividend equivalent rights, collectively referred to as
“Awards”. Stock options granted under the 2016 Plan
were either incentive stock options under the provisions of Section
422 of the Internal Revenue Code of 1986, as amended (the
Code
), or non-qualified
stock options. We could grant incentive stock options only to
employees of the Company or any parent or subsidiary of the
Company. Awards other than incentive stock options could be granted
to employees, directors and consultants. A total of 10.0 million
shares of our common stock were authorized for issuance under the
2016 Plan, of which options to purchase approximately 7.8 million
shares remain outstanding at March 31, 2020. Upon the adoption of
our 2019 Plan, no further grants were permissible under the 2016
Plan and approximately 1.4 million authorized shares were
transferred to the 2019 Plan and became issuable therefrom. All
options granted from the 2016 Plan remain operative under the terms
of the respective grants.
Description of the 2019 Plan
Our
Board approved the VistaGen Therapeutics, Inc. 2019 Omnibus Equity
Incentive Plan on May 27, 2019, and our stockholders adopted it and
ratified all previously issued grants on September 5, 2019. The
principal features of the 2019 plan are summarized
below.
The
2019 Plan provides for the grant of stock options, stock
appreciation rights (
SARs
),
restricted stock, restricted stock units, and other stock-based
awards, and performance awards, collectively referred to as
“Awards”. Awards may be granted under the 2019 Plan to
officers, employees and consultants of the Company and our
subsidiaries and to our non-employee directors. Incentive stock
options may be granted only to employees of the Company or one of
our subsidiaries. The 2019 Plan is administered by the Compensation
Committee of the Board. The Compensation Committee, in its
discretion, selects the individuals to whom awards may be granted,
the time or times at which such awards are granted, and the terms
of such awards. The Compensation Committee may delegate its
authority to the extent permitted by applicable law.
The
Compensation Committee sets stock option exercise prices and terms,
except that stock options must be granted with an exercise price
not less than 100% of the fair market value of the common stock on
the date of grant. The Compensation Committee may grant either
incentive stock options, which must comply with Section 422 of the
Code, or nonqualified stock options. At the time of grant, the
Compensation Committee determines the terms and conditions of stock
options, including the quantity, exercise price, vesting periods,
term (which cannot exceed ten years) and other conditions on
exercise.
The
Compensation Committee may grant SARs as a right in tandem with the
number of shares underlying stock options granted under the 2019
Plan or as a freestanding award. Upon exercise, SARs entitle the
holder to receive payment per share in stock or cash, or in a
combination of stock and cash, equal to the excess of the
share’s fair market value on the date of exercise over the
grant price of the SAR.
The
Compensation Committee may also grant awards of restricted stock,
which are shares of common stock subject to specified restrictions,
and restricted stock units, which represent the right to receive
shares of the common stock in the future. These awards may be made
subject to repurchase, forfeiture or vesting restrictions at the
Compensation Committee’s discretion. The restrictions may be
based on continuous service with the Company or the attainment of
specified performance goals, as determined by the Compensation
Committee. Stock units may be paid in stock or cash or a
combination of stock and cash, as determined by the Compensation
Committee.
- 27 -
The
Compensation Committee may condition the grant, exercise, vesting,
or settlement of any award on such performance conditions as it may
specify. We refer to these awards as “performance
awards.” The Compensation Committee may select such business
criteria or other performance measures as it may deem appropriate
in establishing any performance conditions. At March 31, 2020, the
Compensation Committee has not granted any performance
awards.
A total
of 7,500,000 shares of common stock were initially authorized for
issuance under the 2019 Plan. As noted previously, all awards
outstanding under the 2016 Plan at the time the 2019 Plan was
adopted remain subject to the 2016 Plan. Upon approval of the 2019
Plan, all shares of common stock remaining authorized and available
for issuance under the 2016 Plan, approximately 1.4 million shares,
automatically became available for issuance under the 2019 Plan.
Additionally, any shares subject to outstanding awards under the
2016 Plan that subsequently expire, terminate, or are surrendered
or forfeited for any reason without issuance of shares also become
available for issuance under the 2019 Plan. Further, if any award
under the 2019 Plan is canceled, terminates, expires or lapses for
any reason prior to the issuance of shares or if shares are issued
under the 2019 Plan and thereafter are forfeited to us, the shares
subject to such awards and the forfeited shares will again be
available for grant under the 2019 Plan. At March 31, 2020, a total
of 6,730,162 shares remain available for grant under the 2019
Plan.
No more
than 25% of any equity-based awards granted under the 2019 Plan
will vest on the grant date of such award. This requirement does
not apply to (i) substitute awards resulting from acquisitions or
(ii) shares delivered in lieu of fully vested cash awards. In
addition, the minimum vesting requirement does not apply to the
Compensation Committee’s discretion to provide for
accelerated exercisability or vesting of any award, including in
cases of retirement, death, disability or a change in control, in
the terms of the award or otherwise. Awards are not transferable
other than by will or the laws of descent and distribution, except
that in certain instances transfers may be made to or for the
benefit of designated family members of the participant for no
consideration.
In the
event of a change in control of the Company, the Compensation
Committee may accelerate the time period relating to the exercise
of any award. In addition, the Compensation Committee may
take other action, including (a) providing for the purchase of any
award for an amount of cash or other property that could have been
received upon the exercise of such award had the award been
currently exercisable, (b) adjusting the terms of the award in a
manner determined by the Compensation Committee to reflect the
change in control, or (c) causing an award to be assumed, or new
rights substituted therefor, by another entity with appropriate
adjustments to be made regarding the number and kind of shares and
exercise prices of the award. “Change in Control” is
defined under the 2019 Plan and requires consummation of the
applicable transaction.
Unless
earlier terminated by the Board, the 2019 Plan will terminate, and
no further awards may be granted, on September 5, 2029, which is
ten years after the date on which it was approved by our
stockholders. The Board may amend, suspend or terminate the 2019
Plan at any time. To the extent necessary to comply with applicable
provisions of U.S. federal securities laws, state corporate and
securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S.
jurisdiction applicable to Awards granted to residents therein, we
will obtain stockholder approval of any such amendment to the 2019
Plan in such a manner and to such a degree as required. The
amendment, suspension or termination of the 2019 Plan or the
amendment of an outstanding award generally may not, without a
participant’s consent, materially impair the
participant’s rights under an outstanding award.
2019 Employee Stock Purchase Plan
Our
Board approved the VistaGen Therapeutics, Inc. 2019 Employee Stock
Purchase Plan) on June 13, 2019. Our stockholders approved the 2019
ESPP at our annual meeting on September 5, 2019. The principal
terms of our 2019 ESPP are summarized below.
The
2019 ESPP is intended to qualify as an “employee stock
purchase plan” under Section 423 of the Code. The
Compensation Committee of the Board administers the 2019 ESPP. The
Compensation Committee has authority to construe, interpret and
apply the terms of the 2019 ESPP. As approved by our stockholders,
a maximum of 1,000,000 shares of our common stock may be purchased
under the 2019 ESPP.
- 28 -
The
2019 ESPP is generally expected to operate in consecutive
semi-annual periods referred to as “option periods.”
The first option period commenced on January 1, 2020 and will end
on the last trading day in the semi-annual period ending June 30,
2020, with successive option periods expected to begin on the first
day of January and July and to terminate on the last trading day of
June and December, respectively. Option periods may not last longer
than the maximum period permitted under Section 423 of the
Code, which generally limits the length of such offerings to either
5 years or 27 months, depending on the terms of the offering.
Generally, all full-time employees of the Company and its
subsidiaries will be eligible to participate in an option
period
On the
first day of each option period (the
Grant Date
), each eligible employee for
that option period will be granted an option to purchase shares of
our common stock. Each participant’s option will permit the
participant to purchase a number of shares determined by dividing
the employee’s accumulated payroll deductions for the option
period by the applicable purchase price. A participant must
designate in his or her enrollment package the percentage (if any)
of compensation to be deducted during that option period for the
purchase of stock under the 2019 ESPP. The participant’s
payroll deduction election will generally remain in effect for
future option periods unless terminated by the participant. A
participant may elect to withdraw from any option period prior to
the last day of the option period, in which case the
participant’s payroll deductions will be refunded and the
participant’s outstanding options will
terminate.
Each
participant’s payroll deductions under the 2019 ESPP will be
credited to a liability account in his or her name under the 2019
ESPP. The aggregate liability for participant payroll deductions at
March 31, 2020 was $14,700.
Each
option granted under the 2019 ESPP will automatically be exercised
on the last day of the respective option period (referred to as the
Exercise Date
). The number
of shares acquired by a participant upon exercise of his or her
option will be determined by dividing the participant’s 2019
ESPP account balance as of the Exercise Date for the option period
by the purchase price of the option. The purchase price for each
option is generally equal to the lesser of (i) 85% of the fair
market value of a share of our common stock on the applicable Grant
Date, or (ii) 85% of the fair market value of a share of our
common stock on the applicable Exercise Date. A participant’s
2019 ESPP account will be reduced upon exercise of his or her
option by the amount used to pay the purchase price of the shares
acquired by the participant. Following exercise of the option, any
excess amount in a participant’s account will be refunded
following the Exercise Date. No interest will be paid to any
participant under the 2019 ESPP.
Participation in
the 2019 ESPP is subject to the following limits:
|
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●
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A
participant cannot contribute less than 1% or more than 15% of his
or her compensation to the purchase of stock under the 2019 ESPP in
any one payroll period;
|
|
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●
|
A
participant cannot purchase any more than 5,000 shares of common
stock during an offering period, or accrue rights to purchase more
than $25,000 of stock (valued at the Grant Date of the applicable
offering period and without giving effect to any discount reflected
in the purchase price for the stock) for each calendar year in
which an option is outstanding; and
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●
|
A
participant will not be granted an option under the 2019 ESPP if it
would cause the participant to own stock and/or hold outstanding
options to purchase common stock constituting 5.0% or more of the
total combined voting power or value of all classes of stock of the
Company or of its parent or one of its subsidiaries or to the
extent it would exceed certain other limits under the
Code.
|
The
$25,000 annual purchase and the 5% ownership limitations referred
to above are required under the Code.
As is
customary in stock incentive plans of this nature, the number of
shares of stock available under the 2019 ESPP or subject to
outstanding options, is subject to adjustment in the event of
certain reorganizations, combinations, recapitalization of shares,
stock splits, reverse stock split, subdivision or other similar
change in respect of our common stock. A participant’s rights
with respect to options or the purchase of shares under the 2019
ESPP, as well as payroll deductions credited to his or her 2019
ESPP account, may not be assigned, transferred, pledged or
otherwise disposed of in any way except by will or the laws of
descent and distribution.
The
Board generally may amend, suspend, or terminate the 2019 ESPP at
any time and in any manner, except that stockholder approval is
required to increase the number of shares authorized for issuance
under the 2019 ESPP and for certain other amendments. No amendment
to the 2019 ESPP may materially adversely affect the option rights
previously granted to a participant under the 2019 ESPP, except as
required by law or regulation.
- 29 -
Our
2019 ESPP became effective on January 1, 2020 and will continue in
effect until the earlier of such time as all of the shares of the
Company’s common stock subject to the 2019 ESPP have been
sold under the 2019 ESPP or December 31, 2030, unless terminated
earlier by the Board. At March 31, 2020, no option periods had been
completed nor shares of common stock purchased by employees under
the 2019 ESPP. The initial option period under the 2019 ESPP was
completed on June 30, 2020 at which time participating employees
purchased an aggregate of 28,125 shares of common stock at a price
of $0.448 per share under the terms of the 2019 ESPP.
Certain Relationships and Related Transactions
Contract Research and Development Agreement with Cato Research
Ltd.
Cato
Holding Company (
CHC
),
doing business as Cato BioVentures (
CBV
), was the parent of Cato Research
Ltd. (
CRL
), now known as
Cato Research LLC. CRL is a contract research, development and
regulatory services organization (
CRO
) that we have, and continue to
engaged for a wide range of material aspects related to the
nonclinical and clinical development, manufacturing and regulatory
affairs associated with our efforts to develop and commercialize
PH94B, PH10, AV-101. In October 2018, CHC completed the sale of CRL
to an independent third party. As a result of this transactions,
CHC and/or CBV no longer is affiliated with or has any control over
CRL. Prior to the sale of CRL and during the year ended March 31,
2020, CBV was the beneficial owner of approximately 2.0% of our
common stock.
In July
2017, we entered into a Master Services Agreement (
MSA
) with CRL, which replaced a
substantially similar May 2007 master services agreement, pursuant
to which CRL may assist us in the evaluation, development,
commercialization and marketing of our potential product
candidates, and provide regulatory and strategic consulting
services as requested from time to time. Specific projects or
services are and will be delineated in individual work orders
negotiated from time-to-time under the MSA. Under the terms of work
orders issued pursuant to the July 2017 MSA and our prior May 2007
master services agreement, we incurred expenses of $3,802,600 and
$3,969,100 for the fiscal years ended March 31, 2020 and 2019,
respectively. We anticipate periodic expenses for CRO services from
CRL related to nonclinical and clinical development of, and
regulatory affairs related to, AV-101, PH94B, PH10 and other
potential product candidates will remain significant in future
periods.
License and Option Agreements with Pherin Pharmaceuticals,
Inc.
During
our fiscal year ended March 31, 2019, we issued an aggregate of
2,556,361 shares of our unregistered common stock having an
issue-date fair market value of $4,250,000 to Pherin
Pharmaceuticals, Inc. (
Pherin
) to acquire exclusive worldwide
licenses to develop and commercialize PH94B,
a potential first-in-class neuroactive
nasal spray with rapid-onset effects observed at microgram doses
and without systemic exposure for the treatment of Social Anxiety
Disorder (
SAD
),
and an option to acquire a similar license for PH10, a
potential first-in-class neuroactive
nasal spray with rapid-onset antidepressant effects observed at
microgram doses and without systemic exposure for the treatment of
Major Depressive Disorder (
MDD
)
.
We recorded the acquisition of the licenses as research and
development expense during our fiscal year ended March 31, 2019.
During the years ended March 31, 2020 and 2019, we recorded
$120,000 and $70,000 representing monthly support payments to
Pherin under the terms of the PH94B license agreement. We recorded
no amounts payable to Pherin at March 31, 2020 or 2019. At July 20,
2020, Pherin held approximately 2.4% of our outstanding common
stock.
Consulting Agreement
During
our fiscal year ended March 31, 2020, we engaged a consulting firm
headed by one of the independent members of our Board, to provide
various market research studies and commercial advisory projects
for certain of our CNS pipeline candidates. We recorded research
and development expense of $108,400 and $11,700 during the fiscal
years ended March 31, 2020 and 2019, respectively, related to such
studies. We recorded no amounts payable at March 31, 2020 or 2019
related to these studies.
Section 16 Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our officers, directors and
persons who beneficially own more than ten percent of our common
stock (collectively, the
Reporting
Persons
) to file reports of ownership on Form 3 and changes
in ownership on Form 4 or Form 5 with the SEC. The
Reporting Persons are also required by SEC rules to furnish us with
copies of all reports that they file pursuant to Section
16(a).
To the
Company’s knowledge, based solely on our review of the copies
of these reports furnished to the Company and written
representations that no other reports were required during the
fiscal year ended
March 31, 2020, all Reporting Persons
complied with all applicable reporting requirements.
- 30 -
ADDITIONAL INFORMATION
Deadline for Receipt of Stockholder Proposals for the 2021 Annual
Meeting
Stockholder
proposals that are intended to be presented by stockholders at the
Company’s 2021 Annual Meeting of Stockholders must be
received by the Secretary of the Company between June 7, 2021 and
July 7, 2021 in order that they may be included, if appropriate, in
the Company’s proxy statement and form of proxy relating to
that meeting. A stockholder proposal not included in the
Company’s proxy statement for the 2021 Annual Meeting of
Stockholders will be ineligible for presentation at the meeting
unless the stockholder gives timely notice of the proposal in
writing to the Secretary of the Company at the principal executive
offices of the Company and otherwise complies with the provisions
of the Company’s Bylaws. To be timely, the Bylaws provide
that the Company must have received the stockholder’s notice
not less than 60 days nor more than 90 days prior to the first
anniversary of the previous year’s annual meeting of
stockholders. However, if the date of the 2021 Annual Meeting of
Stockholders is changed by more than 30 days from the date of this
year’s Annual Meeting, the Company must receive the
stockholder’s notice no later than the close of business on
(i) the 90th day prior to such annual meeting and
(ii) the later of 60 days prior to such annual meeting, or, in
the event the Company makes a public announcement of the date of
such annual meeting less than 70 days before the meeting, within 10
days after the Company’s public announcement.
Householding of Proxy Materials
The SEC
has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements
and annual reports with respect to two or more stockholders sharing
the same address by delivering a single proxy statement and annual
report addressed to those stockholders. This process, which is
commonly referred to as “householding,” potentially
means extra convenience for stockholders and cost savings for
companies.
A
number of brokers with account holders who are stockholders of the
Company will be “householding” the Company’s
proxy materials. A single set of the Company’s proxy
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 the Company’s proxy materials, please notify your
broker or direct a written request to the Company at 343 Allerton
Avenue, South San Francisco, California 94080, or contact us at
(650) 577-3600. The Company undertakes to deliver promptly, upon
any such oral or written request, a separate copy of its proxy
materials to a stockholder at a shared address to which a single
copy of these documents was delivered. Stockholders who currently
receive multiple copies of the Company’s proxy materials at
their address and would like to request “householding”
of their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
Other Matters
At the
date of this Proxy Statement, the Company knows of no other
matters, other than those described above, that will be presented
for consideration at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
proxy holders will vote all proxies using their best judgment in
the interest of the Company and the stockholders.
The
Notice, mailed to stockholders on or about July 29, 2020, contains
instructions on how to access the Company’s Annual Report on
SEC Form 10-K for our fiscal year ended March 31, 2020. The Annual
Report, which includes audited financial statements, does not form
any part of the material for the solicitation of
proxies.
The
Board invites you to participate in our Annual Meeting virtually
via the Internet. Whether or not you expect to participate in our
virtual Annual Meeting virtually via the Internet, please submit
your vote via Internet, by telephone or by postal mail as promptly
as possible
so that
your shares will be represented at the Annual Meeting.
REGARDLESS
OF WHETHER YOU PLAN TO PARTICIPATE IN OUR ANNUAL MEETING VIRTUALLY
VIA THE INTERNET, PLEASE READ THE ACCOMPANYING PROXY STATEMENT
AND THEN VOTE BY INTERNET, TELEPHONE OR POSTAL MAIL AS PROMPTLY AS
POSSIBLE. VOTING PROMPTLY WILL SAVE US ADDITIONAL
EXPENSE IN SOLICITING PROXIES AND WILL ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE ANNUAL MEETING.
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TABLE OF CONTENTS