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
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Filed by a Party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
RegeneRx
Biopharmaceuticals, 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):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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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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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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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Form, Schedule or Registration Statement No.:
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Allan L. Goldstein, Ph.D.
Chairman and Chief Scientific Officer
September 16, 2016
Dear Fellow Stockholder:
You are cordially
invited to attend the 2016 Annual Meeting (the “Meeting”) of Stockholders of RegeneRx Biopharmaceuticals, Inc. (the
“Company”), to be held at 11:00 a.m., Eastern Time, on Wednesday, October 26, 2016, at the Company office
facility’s meeting room at 15245 Shady Grove Road, Rockville, Maryland 20850.
An important aspect
of the Meeting is the stockholder vote on corporate business items. I urge you to exercise your rights as a stockholder to vote
and participate in this process. Stockholders are being asked to consider and vote upon: (i) the election of five directors
of the Company, (ii) a non-binding advisory resolution approving named executive officer compensation, and (iii) the ratification
of the appointment of CohnReznick LLP, as the Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2016.
The Board of Directors
has determined that approval of the matters to be considered at the Meeting is in the best interests of the Company and its stockholders.
For the reasons set forth in the Proxy Statement, the Board unanimously recommends that you vote “FOR” each of the
Board of Directors’ nominees as directors specified under Proposal 1, “FOR” the non-binding advisory resolution
approving named executive officer compensation specified under Proposal 2, and “FOR” the ratification of the appointment
of the independent registered public accounting firm specified under Proposal 3.
I encourage you to
attend the Meeting in person. Whether or not you plan to attend,
please vote your shares and sign, date and return the proxy
mailed to you, or vote over the telephone or the Internet as instructed in these materials as promptly as possible
. This will
save the Company additional expense in soliciting proxies and will ensure that your shares are represented at the Meeting.
Your Board of Directors
and management are committed to the success of the Company and the enhancement of the value of your investment. I want to express
my appreciation for your confidence and support.
Very truly yours,
Allan L. Goldstein, Ph.D.
Chairman of the Board
RegeneRx Biopharmaceuticals, Inc. | 15245
Shady Grove Road, Suite 470, Rockville, MD 20850
PHONE 301.208.9191 | FAX 301.208.9194 |
WEB www.regenerx.com
REGENERX BIOPHARMACEUTICALS, INC.
15245 Shady Grove Road, Suite 470
Rockville, Maryland 20850
(301) 208-9191
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On Wednesday, October 26, 2016
Dear Stockholder:
You are cordially
invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of RegeneRx Biopharmaceuticals, Inc., a
Delaware corporation (the “Company”). The Annual Meeting will be held on Wednesday, October 26, 2016 at 11:00 a.m.
local time in the meeting room of the Company’s office facility at 15245 Shady Grove Road, Rockville, Maryland 20850, for
the following purposes:
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To elect the Board’s five nominees for director to serve until the 2016 Annual Meeting of
Stockholders and until their successors are elected and qualified.
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To consider and vote upon a non-binding advisory resolution regarding named executive officer compensation.
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3.
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To ratify the selection by the Audit Committee of the Board of Directors of CohnReznick LLP (“CohnReznick”)
as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2016.
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To conduct any other business properly brought before the Annual Meeting.
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These items of business
are more fully described in the Proxy Statement accompanying this Notice.
The record date
for the Annual Meeting is August 29, 2016. Only stockholders of record at the close of business on that date may vote at the meeting
or any adjournment thereof.
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By Order of the Board of Directors
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Allan L. Goldstein, Ph.D.
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Chairman of the Board
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Rockville, Maryland
September 16, 2016
You are cordially invited to attend
the Annual Meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy
that we may mail to you, or vote over the telephone or the Internet as instructed in these materials, as promptly as possible in
order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote in person if you attend
the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote
at the meeting, you must obtain a proxy issued in your name from that record holder.
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE
ANNUAL MEETING TO BE HELD ON OCTOBER 26, 2016:
The Proxy Statement and Fiscal 2016 Annual
Report to Stockholders are
available at: http://www.proxyvote.com
REGENERX BIOPHARMACEUTICALS, INC.
15245 Shady Grove Road, Suite 470
Rockville, Maryland 20850
(301) 208-9191
PROXY STATEMENT
FOR THE 2016 ANNUAL MEETING OF STOCKHOLDERS
October 26, 2016
QUESTIONS AND ANSWERS ABOUT THESE PROXY
MATERIALS AND VOTING
The Board of Directors
of RegeneRx Biopharmaceuticals, Inc. (the “Company”) is soliciting your proxy to vote at the Annual Meeting of Stockholders
(the “Annual Meeting”) to be held in the basement meeting room of the Company’s office facility at 15245 Shady
Grove Road, Rockville, Maryland 20850 on Wednesday, October 26, 2016 at 11:00 a.m. local time, including at any adjournments
or postponements of the Annual Meeting. You are invited to attend the Annual Meeting to vote on the proposals described in this
proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and
return the enclosed proxy card, if you received paper copies of the proxy materials, or follow the instructions below to submit
your proxy over the telephone or the Internet.
Why did I receive
in the mail a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
We are pleased to
take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly, we have sent
to our beneficial owners a Notice of Internet Availability of Proxy Materials. Instructions on how to access the proxy materials
over the Internet or to request a paper copy may be found in the Notice. Our stockholders may request to receive proxy materials
in printed form by mail or electronically on an ongoing basis. A stockholder’s election to receive proxy materials by mail
or electronically by email will remain in effect until the stockholder terminates its election.
Why did I receive
a full set of proxy materials in the mail instead of a Notice of Internet Availability of Proxy Materials?
We are providing paper
copies of the proxy materials instead of a Notice to our stockholders of record. If you are a beneficial owner or stockholder of
record who received a paper copy of the proxy materials, and you would like to reduce the environmental impact and the costs incurred
by us in mailing proxy materials, you may elect to receive all future proxy materials electronically via email or the Internet.
You can choose to
receive our future proxy materials electronically by visiting http://www.proxyvote.com. Your choice to receive proxy materials
electronically will remain in effect until you instruct us otherwise by following the instructions contained in your Notice and
visiting http://www.proxyvote.com, sending an electronic mail message to sendmaterial@proxyvote.com, or calling 1-800-579-1639.
The SEC has enacted
rules that permit us to make available to stockholders electronic versions of the proxy materials even if the stockholder has not
previously elected to receive the materials in this manner. We have chosen this option in connection with the Annual Meeting with
respect to our beneficial owners and stockholders of record.
We intend to mail
the Notice on or about September 16, 2016 to all stockholders of record entitled to vote at the Annual Meeting.
How do I attend the Annual Meeting?
The Annual Meeting
will be held on Wednesday, October 26, 2016 at 11:00 a.m. local time at the Company office facility’s basement meeting
room at 15245 Shady Grove Road, Rockville, Maryland 20850. Directions to the Company’s office facility may be found at: http://www.regenerx.com/wt/page/contact_us.Information
on how to vote in person at the Annual Meeting is discussed below.
Who can vote at the Annual Meeting?
Only stockholders
of record at the close of business on August 29, 2016 will be entitled to vote at the Annual Meeting. On this record date, there
were 106,787,151 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered
in Your Name
If, on August 29,
2016, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust, then you
are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not
you plan to attend the meeting, we urge you to fill out and return a proxy card or vote by proxy over the telephone or on the Internet
as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered
in the Name of a Broker or Bank
If on August 29, 2016,
your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization,
then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you by that
organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the
Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares
in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may
not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker, bank or other agent.
What am I voting on?
There are three matters
scheduled for a vote:
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Election of five directors;
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To consider and vote upon named executive officer compensation on a non-binding and advisory basis; and
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Ratification of the selection of CohnReznick LLP (CohnReznick) by our Audit Committee as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
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What if another matter is properly brought
before the meeting?
The Board of Directors
knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with
their best judgment.
How do I vote?
You may either vote
“For” all the nominees to the Board or you may “Withhold” your vote for any nominee you specify. For each
of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting. The procedures
for voting are fairly simple:
Stockholder of Record: Shares Registered
in Your Name
If you are a stockholder
of record, you may vote in person at the Annual Meeting, vote by proxy over the telephone, vote by proxy on the Internet or vote
by proxy using a proxy card that you may request as set forth above or that we may deliver at a later time. Whether or not you
plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote
in person even if you have already voted by proxy.
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To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive.
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To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
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To vote over the telephone, dial the number indicated on your proxy card using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice. Your vote must be received by 11:59 p.m. Eastern time on October 25, 2016, to be counted.
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To vote on the Internet, please follow the directions as instructed on the proxy card you received. You will be asked to provide the company number and control number from the Notice. Your vote must be received by 11:59 p.m. Eastern time on October 25, 2016, to be counted.
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Beneficial Owner: Shares Registered
in the Name of Broker or Bank
If you are a beneficial
owner of shares registered in the name of your broker, bank, or other agent, you should have received a Notice containing voting
instructions from that organization rather than from us. Simply follow the voting instructions in the Notice to ensure that your
vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent.
Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request
a proxy form.
We provide Internet
proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your
proxy vote instructions.
How many votes do I have?
On each matter to
be voted upon, you have one vote for each share of common stock you owned on August 29, 2016.
What if I return a proxy card or otherwise
vote but do not make specific choices?
If you return a signed
and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “FOR”
the election of all five nominees for director, “FOR” the advisory resolution on named executive officer compensation,
and “FOR” the ratification of the selection of CohnReznick as our independent registered public accounting firm for
the fiscal year ending December 31, 2016. If any other matter is properly presented at the meeting, your proxyholder (the
individual named on the proxy card) will vote your shares using his best judgment.
Who is paying for this proxy solicitation?
We will pay for the
entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in
person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation
for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials
to beneficial owners.
What does it mean if I receive more
than one Notice?
If you receive more
than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions
on
each
Notice to ensure that all of your shares are voted.
Can I change my vote after submitting
my proxy or revoke my proxy?
Yes. You can revoke
your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy
in any one of the following ways:
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You may submit another properly completed proxy card with a later date.
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You may grant a subsequent proxy by telephone or on the Internet.
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You may send a timely written notice that you are revoking your proxy to the Company’s Secretary
at 15245 Shady Grove Road, Suite 470, Rockville, Maryland 20850.
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You may attend the Annual Meeting and vote in person. Simply attending the meeting will not, by
itself, revoke your proxy.
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Your most current
proxy card or telephone or Internet proxy is the one that is counted.
If your shares are
held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals due for
next year’s annual meeting?
To be considered for
inclusion in next year’s proxy materials, your proposal must be submitted in writing by May 19, 2017, to the Company’s
Secretary at 15245 Shady Grove Road, Suite 470, Rockville, Maryland 20850. A stockholder proposal will need to comply with
the SEC regulations under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding
the inclusion of stockholder proposals in company-sponsored proxy materials. Although our Board of Directors will consider stockholder
proposals, we reserve the right to omit from our proxy statement, or to vote against, stockholder proposals that we are not required
to include under the Exchange Act, including Rule 14a-8. If you wish to bring a matter before the stockholders at next year’s
annual meeting outside of our proxy materials and you do not notify us before August 2, 2017, for all proxies we receive, the proxyholders
will have discretionary authority to vote on the matter, including discretionary authority to vote in opposition to the matter.
If you wish to nominate a director for election at next year’s annual meeting, any such nomination shall be made by notice,
in writing, to the Company’s Secretary not less than 14 days, nor more than 50 days, prior to the meeting. You
are also advised to review our bylaws, which contain additional requirements about advance notice of director nominations.
How are votes counted?
Votes will be counted
by the inspector of election appointed for the meeting.
What are “broker non-votes”?
Broker non-votes occur
when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding
the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial
owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner
does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered
to be “routine,” but not with respect to “non-routine” matters. Proposals No. 1 and 2 are considered to
be “non-routine.” Proposal No. 3, the vote to ratify the selection for our independent registered public accounting
firm, is considered to be “routine.”
How many votes are needed to approve
each proposal?
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For Proposal 1, the election of directors, the five nominees receiving the most “FOR” votes will be elected.
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Proposal 2, regarding named executive officer compensation, is an advisory vote, which means that the vote is not binding on the Company, our Board of Directors, or the Compensation Committee of the Board of Directors. To the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.
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To be approved, Proposal No. 3, the ratification of the appointment of CohnReznick as our independent registered public accounting firm for the year ending December 31, 2016, must receive “FOR” votes from the holders of a majority of shares present and entitled to vote either in person or by proxy. If you “ABSTAIN” from voting, it will have the same effect as an “Against” vote.
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What is the quorum requirement?
A quorum of stockholders
is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares
entitled to vote are present at the meeting in person or represented by proxy. On the record date, there were 106,787,151 shares
outstanding and entitled to vote. Thus, the holders of 53,393,576 shares must be present in person or represented by proxy at the
meeting to have a quorum.
Your shares will be
counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there
is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting
to another date.
How can I find out the results of the
voting at the Annual Meeting?
Preliminary voting
results will be announced at the Annual Meeting. In addition, final voting results will be published in a Current Report on Form
8-K, which we will file within four business days after the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company’s
Board of Directors currently consists of five directors. Each of the five continuing directors to be elected and qualified will
hold office until the next Annual Meeting of Stockholders and until his successor is elected and qualified, or, if sooner, until
the director’s death, resignation or removal. Each of the nominees listed below is currently a director of the Company who
was previously elected by the stockholders. It is the Company’s policy to encourage nominees for directors to attend the
Annual Meeting.
Directors are elected
by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election
of directors. The five nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election of the five nominees named below. If any nominee
becomes unavailable for election as a result of an unexpected occurrence, your shares may be voted for the election of a substitute
nominee proposed by the Company. Each person nominated for election has agreed to serve if elected. The Company’s management
has no reason to believe that any nominee will be unable to serve.
Nominees
The following is a
brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills
of each nominee that led the Board to recommend that person as a nominee for director, as of the date of this proxy statement.
Ages are as of September 16, 2016.
We seek to assemble
a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level
management experience necessary to oversee and direct our business. To that end, our Board intends to maintain membership of directors
who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment
and other qualities that we view as critical to effective functioning of the Board. The brief biographies below include information,
as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills
of each director or nominee that led the Board to believe that the director should serve on the Board.
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Name
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Age
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Principal Occupation/Position Held
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Director
since
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Allan L. Goldstein
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78
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Former Chairman, Department of Biochemistry and Molecular Biology, The George Washington University School of Medicine and Health Sciences; Founder, Chairman of the Board and Chief Scientific Advisor of the Company
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1982
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J.J. Finkelstein
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64
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President and Chief Executive Officer of the Company
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2002
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Joseph C. McNay
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82
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Chairman, Chief Investment Officer and Managing Principal, Essex Investment Management Company
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1987
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Mauro Bove
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61
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Business Development consultant to emerging pharmaceutical companies in Asia, including Lee’s Pharmaceuticals
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2004
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R. Don Elsey
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63
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CFO of Senseonics, Inc, a medical device company
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2010
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Dr. Goldstein
has served as the Chairman of our Board of Directors and our Chief Scientific Advisor since he founded our company in 1982. Dr.
Goldstein is Emeritus Professor & former Chairman of the Department of Biochemistry and Molecular Medicine at the George Washington
University School of Medicine and Health Sciences. Dr. Goldstein is a recognized expert in the field of immunology and protein
chemistry, having authored over 435 scientific articles in professional journals. He is also the inventor on over 25 issued and/or
pending patents in biochemistry, immunology, cardiology, cancer and wound healing. Dr. Goldstein discovered several important compounds,
including T
a
1, which is marketed worldwide, and T
b
4,
which is the basis for RegeneRx’s clinical program. Dr. Goldstein served on the Board of Trustees of the Sabin Vaccine Institute
from 2000 to 2012 and on the Board of Directors of the Richard B. and Lynne V. Cheney Cardiovascular Institute from 2006 to 2012.
Dr. Goldstein has also done pioneering work in the area of medical education, developing distance learning programs for the internet
entitled “Frontiers in Medicine,” a medical education series that Dr. Goldstein developed. The Board believes that
Dr. Goldstein’s scientific expertise, industry background and prior experience as our founder all position him to make an
effective contribution to the medical and scientific understanding of the Board, which the committee believes to be particularly
important as we continue our T
b
4 development efforts.
Mr. Finkelstein
has served as our President and Chief Executive Officer and a member of our Board of Directors since 2002. Mr. Finkelstein
also served as our Chief Executive Officer from 1984 to 1989 and as the Vice Chairman of our Board of Directors from 1989 to 1991.
Mr. Finkelstein has worked as an executive officer and consultant in the bioscience industry for the past 33 years, including serving
from 1989 to 1996 as chief executive officer of Cryomedical Sciences, Inc., a publicly-traded medical device company. Mr. Finkelstein
has significant experience in developing early-stage companies. He has been responsible for the regulatory approval and marketing
of several medical devices in the U.S. and abroad. Mr. Finkelstein has served on the executive committee of the Board of Directors
of the Technology Council of Maryland since 2006, MdBio, Inc. since 1998 and currently chairs the MdBio Foundation, all of which
are non-profit entities that support bioscience development and education in the State of Maryland. Mr. Finkelstein received a
business degree in finance from the University of Texas. The Board believes that Mr. Finkelstein’s history and long tenure
as our Chief Executive Officer positions him to contribute to the Board his extensive knowledge of our company and to provide Board
continuity. In addition, the Board believes that his experience at prior companies has provided him with operational and industry
expertise, as well as leadership skills that are important to the Board.
Mr. McNay
has served as a member of our Board of Directors since 2002. He is currently Chairman, Chief Investment Officer and Managing
Principal of Essex Investment Management Company, LLC, positions he has held since 1976 when he founded Essex. He has direct portfolio
management responsibilities for a variety of funds and on behalf of private clients. He is also a member of the firm’s Management
Board. Prior to founding Essex, Mr. McNay was Executive Vice President and Director of Endowment Management & Research Corp.
from 1967. Prior to that, Mr. McNay was Vice President and Senior Portfolio Manager at the Massachusetts Company. Currently he
is serving as Trustee of National Public Radio, Trustee of the Dana Farber Cancer Institute, and is a Trustee and member of the
Children’s Hospital Investment Committee. He received his A.B. degree from Yale University and his M.B.A. degree in finance
from the Wharton School of the University of Pennsylvania. The Board believes that Mr. McNay’s extensive financial experience
is valuable to our business and also positions him to contribute to the audit committee’s understanding of financial matters.
Mr. Bove
has
served as a member of our Board of Directors since 2004 and has more than 30 years of business and management experience within
the pharmaceutical industry. Mr. Bove is currently serving as a Business Development consultant to emerging pharmaceutical companies
in Asia, including Lee’s Pharmaceuticals after leading for more than 20 years Corporate & Business Development of Sigma-Tau
Finanziaria S.p.A., the holding company of Sigma-Tau Group, a leading international pharmaceutical company (Sigma-Tau Finanziaria
S.p.A. and its affiliates are collectively our largest stockholder). Mr. Bove, who resigned this role with Sigma-Tau on March 31,
2014, has also held a number of senior positions in business, licensing and corporate development within Sigma-Tau Group. Mr. Bove
obtained his law degree at the University of Parma, Italy, in 1980. In 1985, he attended the Academy of American and International
Laws at the International and Comparative Law Center, Dallas, Texas. The Board believes that Mr. Bove’s extensive business
and management experience within the pharmaceutical industry allows him to recognize and advise the Board with respect to recent
industry developments.
Mr. Elsey
has
served as a member of our Board of Directors since September 2010. Currently Mr. Elsey serves as CFO of Senseonics, Inc a medical
device company focused on continuous glucose monitoring. From May 2014 until February 2015 Mr. Elsey served as chief financial
officer of Regado Biosciences, a public, late-stage clinical development biopharmaceutical company. From December 2012 to February
2014 Mr. Elsey served as chief financial officer of LifeCell, Inc., a privately held regenerative medicine company. From June 2005
to December 2012, he served in numerous finance capacities, most recently as senior vice president and chief financial officer,
at Emergent BioSolutions Inc., a publicly held biopharmaceutical company. He served as the director of finance and administration
at IGEN International, Inc., a publicly held biotechnology company, and its successor BioVeris Corporation, from April 2000 to
June 2005. Prior to joining IGEN, Mr. Elsey served as director of finance at Applera, a genomics and sequencing company, and in
several finance positions at International Business Machines, Inc. He received an M.B.A. in finance and a B.A. in economics from
Michigan State University. Mr. Elsey is a certified management accountant. The Board believes that Mr. Elsey’s experience
as chief financial officer of a public company is particularly valuable to our business in that it positions him to contribute
to our board’s and audit committee’s understanding of financial matters.
VOTE REQUIRED
The Board recommends
that you vote “FOR” each of the nominees to the Board set forth in this Proposal 1. Under our Bylaws, the election
of each nominee requires the affirmative vote of a plurality of the votes cast by the stockholders entitled to vote on the election
of directors at the Annual Meeting at which a quorum is present.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE
Independence of the Board of Directors
Although our common
stock is no longer listed on the NYSE MKT exchange, we have determined the independence of our directors using the NYSE MKT definitions
of independence. Under NYSE MKT listing standards, a majority of the members of a listed company’s board of directors must
qualify as “independent,” as affirmatively determined by the Board. Our Board consults with counsel to ensure that
its determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,”
including those set forth in pertinent listing standards of the NYSE MKT, as they may be modified from time to time.
Consistent with these
considerations, after review of all relevant identified transactions or relationships between each director, or any of his family
members, and our company, our senior management and our independent auditors, our Board has determined that the following three
directors are independent directors within the meaning of the applicable NYSE MKT listing standards: Mr. Elsey, Mr. Bove
and Mr. McNay. In making this determination, the Board found that none of these directors had a material or other disqualifying
relationship with us. Mr. Finkelstein, our President and Chief Executive Officer, and Dr. Goldstein our Chief Scientific
Advisor, are not independent by virtue of their employment with us.
In determining the
independence of Mr. Bove, the Board took into account the significant ownership of our common stock by
Essetifin
S.p.A. (formerly Sigma-Tau)
and its affiliates. The Board does not believe that any of the transactions with
Essetifin
S.p.A.
and its affiliates described in this proxy statement has interfered or would reasonably be expected to interfere
with Mr. Bove’s exercise of independent judgment in carrying out his responsibilities as a director of our company.
Board Leadership Structure
The Board has a chairman,
Dr. Goldstein, who has authority, among other things, to call and preside over Board meetings, to set meeting agendas and
to determine materials to be distributed to the Board. Accordingly, the Chairman has substantial ability to shape the work of the
Board. We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the Board
in its oversight of our business and affairs. In addition, we believe that having a separate Chairman creates an environment that
is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability
and improving the ability of the Board to monitor whether management’s actions are in our best interests and those of our
stockholders.
Role of the Board in Risk Oversight
One of the Board’s
key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee,
but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing
committees that address risks inherent in their respective areas of oversight. Our audit committee has the responsibility to consider
and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including
guidelines and policies to govern the process by which risk assessment and management is undertaken. Our compensation committee
assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Meetings of the Board of Directors
The Board met
seven times during our 2015 fiscal year. Each of the directors attended at least 75% of the board meetings and applicable
committee meetings, with the exception of Mr. Bove.
Information Regarding Committees of
the Board of Directors
During the fiscal
year ended December 31, 2015, the Board maintained two standing committees: an Audit Committee and a Compensation Committee. The
Board does not have a standing nominating and corporate governance committee. Rather, the independent members of the full Board
perform the functions of a nominating and corporate governance committee.
The following table
provides membership and meeting information for fiscal 2015 for each of the Board’s standing committees:
|
Name
|
|
Audit
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
R. Don Elsey
|
|
X
|
|
X
|
*
|
|
Joseph McNay
|
|
X
|
*
|
X
|
|
|
Mauro Bove
|
|
|
|
X
|
|
|
Total meetings in fiscal 2015
|
|
4
|
|
1
|
|
Below is a description
of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants as
it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable
NYSE MKT rules and regulations regarding “independence” and that each member is free of any relationship that would
impair his individual exercise of independent judgment with regard to the Company.
Audit Committee
The Audit Committee
consists of Mr. McNay and Mr. Elsey, with Mr. McNay acting as the Chairman of the committee. The Audit Committee meets
no less than quarterly with management and our independent registered public accounting firm, both jointly and separately, has
sole authority to engage and terminate the engagement of our independent registered public accounting firm, and reviews our financial
reporting process on behalf of the Board. The Audit Committee met four times during the 2015 fiscal year. The Audit Committee operates
under a formal written charter available on our website at www.regenerx.com.
Each member of the
Audit Committee is an independent director determined in accordance with Rule 10A-3 of the Exchange Act. Furthermore, the
Board has determined that Mr. McNay and Mr. Elsey qualify as “audit committee financial experts” as defined
under SEC rules.
The Audit Committee
pre-approves all audit and non-audit engagement fees, and terms and services. On an ongoing basis, management communicates specific
projects and categories of services for which advance approval of the Audit Committee is required. The Audit Committee reviews
these requests and advises management and the independent auditors if the Audit Committee pre-approves the engagement of the independent
auditors for such projects and services. On a periodic basis, the independent auditors report to the Audit Committee the actual
spending for such projects and services compared to the approved amounts.
Report of the Audit Committee of the
Board of Directors
The following report
of the Audit Committee shall not be deemed to be filed with the SEC or incorporated by reference in any previous or future documents
filed by the Company with the SEC under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates the reference in any such document.
The Audit Committee
reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the
financial statements and the reporting process. The Company’s independent registered public accountant is responsible for
performing an independent audit of the Company’s financial statements and expressing an opinion on the conformity of the
audited financial statements to generally accepted accounting principles.
The members of the
Audit Committee have reviewed and discussed with management the Company’s audited financial statements as of and for the
fiscal year ended December 31, 2015. The members of the Audit Committee have discussed with CohnReznick, the Company’s independent
auditor, the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards,
Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The members of the Audit Committee
have received and reviewed the written disclosures and the letter required by applicable requirements of the Public Company Accounting
Oversight Board regarding communications with the audit committee concerning independence, and the members of the Audit Committee
have discussed with CohnReznick their independence from management and the Company. The members of the Audit Committee have considered
whether the provision of services by CohnReznick referred to above not related to the audit of the financial statements and the
reviews of the interim financial statements included in the Company’s Forms 10-Q are compatible with maintaining CohnReznick’s
independence, and have determined that they are compatible and do not impact CohnReznick’s independence.
Based on the reviews
and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements referred
to above should be included in our Annual Report on Form 10-K accompanying this Proxy Statement and filed with the SEC for the
fiscal year ended December 31, 2015.
Mr. Joseph McNay, Chairman
Mr. R. Don Elsey
Compensation Committee
The Compensation Committee
consists of Mr. McNay, Mr. Elsey and Mr. Bove with Mr. Elsey acting as the Chairman of the committee. The Compensation
Committee met once during the 2015 fiscal year. The Compensation Committee has adopted a written charter that is available to
stockholders on our website at www.regenerx.com.
The Compensation Committee
of the Board acts on behalf of the Board to review, adopt and oversee our compensation strategy, policies, plans and programs,
including:
|
|
•
|
establishment of corporate and individual performance objectives relevant to the compensation of our chief executive officer, other executive officers and Board members;
|
|
|
|
|
|
|
•
|
evaluation of performance in light of these stated objectives;
|
|
|
|
|
|
|
•
|
review and approval of the compensation and other terms of employment or service, including severance and change-in-control arrangements, of our Chief Executive Officer and the other executive officers; and
|
|
|
|
|
|
|
•
|
administration of our equity compensation plans and other similar plan and programs.
|
Compensation Committee Processes and
Procedures
Typically, the Compensation
Committee meets at least two times annually and with greater frequency if necessary. The agenda for each meeting is usually developed
by the Chairman of the Compensation Committee, in consultation with certain executive officers, including the Chief Financial Officer.
The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and
other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations,
to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings.
The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation
Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the
Compensation Committee authority to obtain, at the expense of the Company, advice and assistance from internal and external legal,
accounting or other advisors and consultants and other external resources that the Compensation Committee considers necessary or
appropriate in the performance of its duties. In particular, the Compensation Committee has the authority to retain compensation
consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s
reasonable fees and other retention terms.
Historically, the
Compensation Committee has made most of the significant adjustments to annual compensation, determined bonus and equity awards
and established new performance objectives at one or more meetings held during the first half of the year. Generally, the Compensation
Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance
objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and
considers evaluations and recommendations submitted to the Compensation Committee by the Chief Executive Officer. In the case of
the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines any
adjustments to his compensation as well as awards to be granted. For all executives and directors, as part of its deliberations,
the Compensation Committee may review and consider, as appropriate, materials such as financial reports and projections, operational
data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives
in various hypothetical scenarios, executive and director stock ownership information, company stock performance data and analyses
of historical executive compensation levels and current Company-wide compensation levels.
Nominating and Corporate Governance
The Board does not
have a standing nominating and corporate governance committee. Instead, the independent members of the Board, currently consisting
of Messrs. Elsey, McNay and Bove, are responsible for performing key nominating and corporate governance activities on behalf
of the Board, including identifying, reviewing and evaluating candidates to serve as directors of the Company, reviewing and evaluating
incumbent directors, selecting candidates for election to the Board, making recommendations to the Board regarding the membership
of the committees of the Board, assessing the performance of management and developing and maintaining a set of corporate governance
principles for the Company.
In identifying and
evaluating nominees for director, the Board considers whether the candidate has the highest ethical standards and integrity and
sufficient education, experience and skills necessary to understand and wisely act upon the complex issues that arise in managing
a publicly held company. The Board also believes that it is essential that the Board members represent diverse viewpoints. To the
extent the Board does not have sufficient information to evaluate a candidate the Board may send a questionnaire to the candidate
for completion with sufficient time for Board consideration. The Board will annually assess the qualifications, expertise, performance
and willingness to serve of existing directors. If at this time or at any other time during the year the Board determines a need
to add a new director with specific qualifications or to fill a vacancy on the Board, a director designated by the Board will then
initiate the search, seeking input from other directors and senior management, and will also consider any nominees previously submitted
by stockholders. After identifying an initial slate of candidates satisfying the qualifications set forth above, the Board will
then prioritize the candidates and determine if other directors or senior management have relationships with the preferred candidates
and can initiate contacts. To the extent feasible, all of the members of the Board will interview the prospective candidates. Evaluations
and recommendations of the interviewers will be submitted to the whole Board for final evaluation. The Board will meet to consider
such information and to select candidates for appointment to the Board at the Annual Meeting. The independent members of the Board
nominated the five directors set forth in Proposal 1 for election at the 2016 Annual Meeting.
Nominations for Election to the Board
While the Board will
consider nominees recommended by stockholders, the Board has not actively solicited such nominations. The Board does not intend
to alter the manner in which it evaluates candidates based on whether or not the candidate was recommended by a stockholder. Pursuant
to the Company’s bylaws, nominations for election as directors by stockholders at a meeting of stockholders called for the
election of directors must be made in writing and delivered to the Company’s Secretary not less than fourteen days nor more
than fifty days prior to the date of the meeting. If, however, notice of the meeting is given to stockholders less than twenty-one
days prior to the meeting, the nominations must be received by the close of business on the seventh day following the day on which
notice of the meeting was mailed to stockholders. Each such notice shall set forth, with respect to each nominee, (i) his
or her name, age, business address and, if known, residence address, (ii) his or her principal occupation or employment, and
(iii) the number of shares of stock of the Company beneficially owned by the nominee. As of the date of this proxy statement,
the Company has not received any such nominations from stockholders in connection with the Annual Meeting.
Stockholder Communications with the
Board of Directors
The Company has established
procedures for its security holders to communicate directly with the Board on a confidential basis. Security holders who wish to
communicate with the Board or with a particular director may send a letter to the Secretary of the Company at 15245 Shady Grove
Road, Suite 470, Rockville, Maryland 20850. The mailing envelope must contain a clear notation indicating that the enclosed
letter is a “Security Holder-Board Communication” or “Security Holder-Director Communication.” All such
letters must identify the author as a security holder and clearly state whether the intended recipients are all members of the
Board or specified individual directors. The Secretary will make copies of all such letters and circulate them to the directors
addressed. If a security holder wishes the communication to be confidential, such security holder must clearly indicate on the
envelope that the communication is “confidential.” The Secretary will then forward such communication, unopened, to
the individual indicated.
Code of Ethics
We have adopted a
corporate code of conduct and ethics that applies to all of our employees, officers and directors, as well as a separate code of
ethics that applies specifically to our principal executive officer and principal financial officer. The corporate code of conduct
and ethics and the code of ethics for our principal executive and financial officers are available on our corporate website at
www.regenerx.com. If we make any substantive amendments to the corporate code of conduct and ethics or the code of ethics for our
principal executive and financial officers, or grant any waivers from a provision of these codes to any executive officer or director,
we will promptly disclose the nature of the amendment or waiver on our website.
PROPOSAL 2
APPROVAL, ON AN ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall
Street Reform and Consumer Protection Act and Section 14A of the Exchange Act require that we provide our stockholders with the
opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed
in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.
We seek to closely
align the interests of our named executive officers with the interests of our stockholders. We have designed our compensation program
to reward our named executive officers for their individual performance and contributions to our overall business objectives.
The vote on this resolution
is not intended to address any specific element of compensation. Instead, the vote relates to the overall compensation of our named
executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.
Accordingly, we ask
our stockholders to vote on the following resolution at the Annual Meeting:
“RESOLVED, that
the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed
in the Company’s Proxy Statement for the Annual Meeting of Stockholders pursuant to the compensation disclosure rules of
the Securities and Exchange Commission, including the summary compensation table and the other related tables and disclosure.”
While the Board, and
especially the Compensation Committee, intend to carefully consider the results of the voting on this proposal when making future
decisions regarding executive compensation, the vote is not binding on the Company, the Compensation Committee or the Board and
is advisory in nature. To the extent there is any significant vote against the compensation of our named executive officers in
this Proposal 2, the Compensation Committee will evaluate what actions may be necessary to address our stockholders’ concerns.
VOTE REQUIRED
The Board recommends
that you vote “FOR” the non-binding advisory resolution approving the compensation of our named executive officers,
as disclosed in this proxy statement. Under applicable Delaware law, this proposal requires the affirmative vote of a majority
of the shares present and entitled to vote. This vote is advisory and is not binding on the Company, the Board or the Compensation
Committee.
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee
of the Board has selected CohnReznick LLP as the Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2016, and has further directed that management submit the selection of the independent registered public
accounting firm for ratification by the stockholders at the Annual Meeting. CohnReznick, as its predecessor Reznick Group, P.C.,
has audited the Company’s financial statements since 2000. Representatives of CohnReznick are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate
questions.
Neither the Company’s
Bylaws nor other governing documents or law require stockholder ratification of the selection of CohnReznick as the Company’s
independent auditors. However, the Audit Committee is submitting the selection of CohnReznick to the stockholders for ratification
as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether
or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment
of different independent auditors at any time during the year if they determine that such a change would be in the best interests
of the Company and its stockholders.
The affirmative vote
of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting
will be required to ratify the selection of CohnReznick. Abstentions will be counted toward the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but
are not counted for any purpose in determining whether this matter has been approved.
Principal Accountant Fees and Services
The following table
represents aggregate fees billed to us for the fiscal years ended December 31, 2015 and 2014 by CohnReznick LLP, our independent
registered public accounting firm. All such fees described below were approved by the audit committee.
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Audit fees
|
|
$
|
71,000
|
|
|
$
|
71,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-related fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
71,000
|
|
|
$
|
71,000
|
|
Pre-Approval Policies and Procedures
Our audit committee
has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered
public accounting firm, CohnReznick LLP. The policy generally pre-approves specified services in the defined categories of audit
services, audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the audit
committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual
explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. On a periodic
basis, the independent registered public accounting firm reports to the audit committee on the status of actual costs for approved
services against the approved amounts.
The audit committee
has determined that the rendering of the services other than audit services by CohnReznick LLP is compatible with maintaining that
firm’s independence.
VOTE REQUIRED
The Board recommends
that you vote “FOR” the ratification of the appointment of CohnReznick LLP as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2016. Under applicable Delaware law, this proposal requires the
affirmative vote of a majority of the shares present and entitled to vote.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table
sets forth certain information regarding the ownership of our common stock as of August 29, 2016 by (i) each director; (ii) each
of the named executive officers; (iii) all executive officers and directors as a group; and (iv) all those known by us
to be beneficial owners of more than five percent of our common stock. The address for all directors and executive officers is
c/o RegeneRx Biopharmaceuticals, Inc., 15245 Shady Grove Road, Suite 470, Rockville, MD 20850.
The following table sets forth certain
information regarding the ownership of our common stock as of August 29, 2016 by (i) each director; (ii) each named executive
officer; (iii) all currently serving executive officers and directors as a group; and (iv) all those known by us to be
beneficial owners of more than five percent of our common stock. The address for all directors and executive officers is c/o RegeneRx
Biopharmaceuticals, Inc., 15245 Shady Grove Road, Suite 470, Rockville, MD 20850.
|
|
|
Beneficial Ownership
(1)
|
|
|
Beneficial Owner
|
|
Number of Shares
|
|
|
Percent of Total
|
|
|
|
|
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
|
Entities affiliated previously affiliated with Essetifin S.p.A., Via Sudafrica, 20, Rome, Italy 00144
|
|
|
35,082,011
|
(2)
|
|
|
31.9
|
%
|
GtreeBNT Co., Ltd.
22nd FL, Parkview Tower, 248 Jungjail-ro, Bundang-gu, Seongnam-si, Gyeonggi-do 463-863, Republic of Korea
|
|
|
19,583,333
|
(3)
|
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors:
|
|
|
|
|
|
|
|
|
|
J.J. Finkelstein
|
|
|
3,135,854
|
(4)
|
|
|
2.9
|
%
|
|
Allan L. Goldstein
|
|
|
3,291,653
|
(5)
|
|
|
3.0
|
%
|
|
Joseph C. McNay
|
|
|
5,792,135
|
(6)
|
|
|
5.2
|
%
|
|
Mauro Bove
|
|
|
339,655
|
(7)
|
|
|
*
|
|
|
R. Don Elsey
|
|
|
383,333
|
(8)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (5 persons)
|
|
|
12,942,630
|
(9)
|
|
|
12.1
|
%
|
|
(1)
|
This table is based upon information supplied by officers, directors and principal stockholders. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 106,787,151 shares of common stock outstanding on August 29, 2016, adjusted as required by rules promulgated by the Securities and Exchange Commission (the “SEC”).
|
|
(2)
|
Consists of 13,921,726 shares of common stock held of record
held by Essetifin S.p.A. (f/k/a Sigma-Tau Finanziaria, S.p.A.) (“Essetifin”); 6,348,878
shares of common stock held of record held by Taufin International S.A. (“Taufin”), an entity wholly owned by
Taufin S.p.A., which is owned directly by the estate of Claudio Cavazza, who directly and indirectly owns 57% of
Essetifin; and 9,711,407 shares of common stock held of record, 3,833,333 shares of common stock issuable upon conversion
of a convertible promissory note and 266,667 shares of common stock issuable upon exercise of warrants held by Sinaf S.A.
(“Sinaf”), an indirect wholly-owned subsidiary of Aptafin S.p.A., which is owned by Paolo Cavazza and members
of his family, that are exercisable within 60 days of August 29, 2016. Paolo Cavazza directly and indirectly owns 38% of
Essetifin. The beneficial ownership of Essetifin and its affiliates is derived from the Schedule 13D/A filed by
Sigma-Tau
Finanziaria S.p.A. (now Essetifin) on September 12, 2013.
|
|
(3)
|
Consists of 19,583,333 shares of common stock held of record by GtreeBNT which were acquired in two equity purchases in March 2014 and August 2014. The beneficial ownership of GtreeBNT is derived from its Schedule 13D/A filed on February 1, 2015.
|
|
(4)
|
Consists of 1,277,638 shares of common stock held of record by Mr. Finkelstein, 1,654,883 shares of common stock issuable upon exercise of options, 20,000 shares of common stock issuable upon exercise of warrants and 183,333 shares of common stock issuable upon conversion of a convertible promissory note, in each case exercisable within 60 days of August 29, 2016.
|
|
(5)
|
Consists of 806,743 shares of common stock held of record by Dr. Goldstein, 1,166,667 shares of common stock issuable upon conversion of a convertible promissory note, 1,159,077 shares of common stock issuable upon exercise of options and 46,666 shares of common stock issuable upon exercise of warrants, in each case exercisable within 60 days of August 29, 2016.
|
|
(6)
|
Consists of 1,339,111 shares of common stock held of record by Mr. McNay, 4,083,333 shares of common stock issuable upon conversion of a convertible promissory note, 303,024 shares of common stock issuable upon exercise of options and 66,667 shares of common stock issuable upon exercise of warrants, in each case exercisable within 60 days of August 29, 2016.
|
|
(7)
|
Consists of 324,655 shares of common stock issuable upon exercise of options exercisable within 60 days of August 29, 2016. Mr. Bove was previously an officer of Sigma-Tau, but he had no beneficial ownership over the reported securities as he has no voting or dispositive power with respect to the securities held by Sigma-Tau and its affiliates described in footnote 2 above.
|
|
(8)
|
Consists of 300,000 shares of common stock issuable upon exercise of options and 83,333 shares of common stock issuable upon conversion of a convertible promissory note, in each case exercisable within 60 days of August 29, 2016.
|
|
(9)
|
Consists of 3,423,492 shares of common stock held of record, 5,516,667 shares of common stock issuable upon conversion of convertible promissory notes, 3,869,139 shares of common stock issuable upon exercise of options and 133,333 shares of common stock issuable upon exercise of warrants, in each case exercisable within 60 days of August 29, 2016.
|
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a)
of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered
class of our equity securities, to file with the SEC initial reports of their ownership of our equity securities and reports of
any subsequent changes in that ownership. Specific due dates for these reports have been established by the SEC and the Company
is required to disclose any late filings or failures to file. Officers, directors and greater than 10% stockholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. To the knowledge of the Company, based
solely on its review of the copies of such reports furnished to the Company, and written representations that no other reports
were required, the Company believes that during the past fiscal year its officers, directors and greater than ten percent beneficial
owners complied with all Section 16(a) filing requirements, other than a late Form 5 filing made by Mr. Finkelstein to report
a gift of shares.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table
shows, for the fiscal years ended December 31, 2015 and 2014, compensation awarded to or paid to, or earned by, our chief
executive officer who was our only named executive officer for fiscal 2015. For purposes of this report, we sometimes refer to
our chief executive officer as our named executive officer.
Of note, our annual
rates of compensation for our named executive officer and all employees were reduced effective December 1, 2011. Beginning in January
2012, all employees became part-time hourly employees with reduced work schedules. Additionally, in January 2012, we discontinued
providing employee health benefits and company-sponsored 401(k) matching contributions. On April 16, 2014 we entered into a new
employment agreement with Mr. Finkelstein under which Mr. Finkelstein’s base salary was set at $125,000 annually, and on
January 1, 2015 Mr. Finkelstein’s base salary was increased to $150,000.
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards(1)
|
|
|
Compensation(2)
|
|
|
Total
|
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.J. Finkelstein, President and
|
|
|
2015
|
|
|
|
154,519
|
|
|
|
—
|
|
|
|
127,104
|
|
|
|
3,360
|
|
|
|
284,983
|
|
|
Chief Executive Officer
|
|
|
2014
|
|
|
|
110,813
|
|
|
|
—
|
|
|
|
71,630
|
|
|
|
3,360
|
|
|
|
185,803
|
|
|
|
(1)
|
The 2014 & 2015 amounts reflect the aggregate total grant date fair values (computed in accordance with FASB ASC Topic 718 or ASC Topic 505) of options granted to the executives during 2014.
|
|
|
(2)
|
The 2014 & 2015 amount reflects payment of life insurance premiums for Mr. Finkelstein in the amount of $3,360
|
Employment Agreements; Potential Payments
Upon Termination or Change in Control
Employment Agreement with Mr. Finkelstein
We entered into an
employment agreement with Mr. Finkelstein on April 16, 2014 for him to serve as our president and chief executive officer.
Mr. Finkelstein’s employment agreement has an initial three-year term, which is automatically renewed for additional
one-year periods unless either we or Mr. Finkelstein elect not to renew it. Mr. Finkelstein’s annual base salary
was $125,000, which was increased to $150,000 on January 1, 2015. Mr. Finkelstein’s salary may not be adjusted downward without
his written consent, except in a circumstance which is part of a general reduction or other concessionary arrangement affecting
all employees or affecting senior executive officers. Mr. Finkelstein is also eligible to receive an annual bonus in an amount
established by the Board and is entitled to participate in and receive all standard employee benefits and to participate in all
of our applicable incentive plans, including stock option, stock, bonus, savings and retirement plans. We also provide him with
$1 million in life insurance.
Mr. Finkelstein
is eligible to receive options to purchase common stock under our equity incentive plans. The decision to grant any such options
and the terms of such options are within the discretion of our Board or the compensation committee thereof. All vested options
are exercisable for a period of time following any termination of Mr. Finkelstein’s employment as may be set forth in
the applicable benefit plan or in any option agreement between Mr. Finkelstein and us.
In the event that
Mr. Finkelstein’s employment is terminated by us without “cause” or by Mr. Finkelstein for “good reason,”
each as defined in his employment agreement, subject to Mr. Finkelstein’s entering into and not revoking a release of
claims in a form acceptable to us, Mr. Finkelstein will be entitled to receive (i) a lump sum payment in an amount equal to
one-half of his then annual base salary if within the first anniversary date of this Agreement; or (ii) a lump sum payment in an
amount equal to three-fourths of his then annual base salary if within the first anniversary date and second anniversary date of
this Agreement; or (iii) a lump sum payment in an amount equal to his then annual base salary if any time after the second anniversary
date of this Agreement, less all federal and state withholdings. In the event of a “change in control,” as defined
in his employment agreement and Mr. Finkelstein is involuntarily terminated within 12 months after a change in control event
or within 12 months after a change in control event he resigns his employment for “good reason”, then the Company shall
(i) pay Mr. Finkelstein, in a lump sum cash payment, an amount equal to his annual base salary in effect on the date of his termination
from employment, less any applicable federal and state taxes and withholdings. In addition, in each instance Mr. Finkelstein
would also be eligible to receive (i) any earned bonus and accrued vacation pay, and (ii) to the extent that he is eligible
for and participates in a Company sponsored health insurance plan the Company shall pay or reimburse Executive for the amount of
any insurance premiums for a twelve-month period, but these payments shall be limited to the amount of the premiums being paid
by the Company for Executive’s coverage or the amount being reimbursed for insurance premiums immediately prior to the date
of his termination from employment.
In addition, if Mr. Finkelstein’s
employment is terminated without “cause,” or if there is a “change in control” event, in each case as defined
in either the applicable benefit plan or in Mr. Finkelstein’s employment agreement, then the unvested portion of Mr. Finkelstein’s
outstanding options would accelerate in full.
O
utstanding Equity Awards at December 31,
2015
The following table
shows certain information regarding outstanding equity awards at December 31, 2015 for the named executive officer, all of which
were stock options granted under our Amended and Restated 2000 Stock Option and Incentive Plan or our 2010 Equity Incentive Plan.
|
|
|
Number of Shares
Underlying
Unexercised Options
(#)
|
|
|
Number of Shares
Underlying Unexercised
Options (#)
|
|
|
Option Exercise
Price
|
|
|
Option
|
|
|
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Expiration Date
|
|
Note
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Finkelstein
|
|
|
114,748
|
|
|
|
—
|
|
|
|
0.57
|
|
|
4/10/2019
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
—
|
|
|
|
0.76
|
|
|
10/11/2016
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
—
|
|
|
|
0.27
|
|
|
07/14/2017
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
—
|
|
|
|
0.22
|
|
|
8/3/2018
|
|
|
|
|
|
|
|
|
80,135
|
|
|
|
—
|
|
|
|
0.16
|
|
|
12/12/2018
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
125,000
|
|
|
|
0.14
|
|
|
1/24/2019
|
|
|
(1
|
)
|
|
|
|
|
35,000
|
|
|
|
—
|
|
|
|
0.16
|
|
|
4/4/2019
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
0.21
|
|
|
3/25/2021
|
|
|
(2
|
)
|
|
|
|
|
125,000
|
|
|
|
375,000
|
|
|
|
0.36
|
|
|
6/30/2022
|
|
|
(2
|
)
|
|
|
(1)
|
This option vests in equal installments on the first four anniversaries of the grant date. In each case these options were granted seven years prior to the listed expiration dates.
|
|
|
|
|
|
|
(2)
|
This option vests in equal installments upon grant and on the first three anniversaries of the grant date. In each case these options were granted seven years prior to the listed expiration dates.
|
Post-Employment Compensation
We do not maintain any plans providing
for payment or other benefits at, following, or in connection with retirement other than a 401(k) plan which was available to all
employees through 2011. The Company did not make any plan contributions in 2014 or 2015. In addition, we do not maintain any non-qualified
deferred compensation plans.
Equity Compensation
Plan Information
The following table provides information
as of December 31, 2015 about the securities authorized for issuance to our employees, directors and other eligible participants
under our equity compensation plans, consisting of the Amended and Restated 2000 Stock Option and Incentive Plan and the 2010 Equity
Incentive Plan.
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
remaining available for
|
|
|
|
|
Number of securities to
|
|
|
|
|
|
future issuance under
|
|
|
|
|
be issued upon exercise
|
|
|
Weighted-average exercise
|
|
|
equity compensation plans
|
|
|
|
|
of outstanding options,
|
|
|
price of outstanding options,
|
|
|
(excluding securities
|
|
|
|
|
warrants and rights
|
|
|
warrants and rights
|
|
|
reflected in column (a))
|
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans approved by security holders
|
|
|
7,131,211
|
|
|
$
|
0.30
|
|
|
|
1,548,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7,131,211
|
|
|
$
|
0.30
|
|
|
|
1,548,029
|
|
Director Compensation
The following
table sets forth certain information for the fiscal year ended December 31, 2015 with respect to the compensation of our directors.
Mr. Finkelstein’s compensation is disclose
d in the Summary Compensation Table above,
and he does not receive any additional compensation for his service as a director. Dr. Goldstein is an employee of our company
and his compensation as an employee is set forth in the table below. He does not receive any additional compensation for his service
as a director.
The
Company had in effect a non-employee director compensation policy which was suspended in November 2011 by our Board of Directors
elected to help the company preserve capital and consistent with this certain fees accrued in 2011 were forfeited and no retainer
or meeting fees were paid to non-employee directors in 2014 or 2015.
In
March 2014, in view of the Board’s November 2011 decision to temporarily cease paying cash compensation to non-employee directors
for Board and committee service, the Board elected to make director option grants to all directors to compensate them for serving
during 2014 and 2015. In 2015 each independent director was granted 100,000 options in each February and June with exercise prices
per share of $0.19 and $0.36, respectively. Each of these option grants vests in four segments pursuant to each director’s
continued service. Each director was granted a stock option to purchase a specific number of shares of common stock at an exercise
price of $0.21 per share, which vests in four segments pursuant to each director’s continued service. This option grant was
the only compensation received by non-employee directors in 2014 and 2015.
We
also reimburse directors for expenses incurred in attending meetings of the board and other events attended on our behalf and at
our request.
Director Compensation for Fiscal 2015
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
|
|
Name
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allan Goldstein, Ph.D.
|
|
|
—
|
|
|
|
63,552
|
|
|
|
92,712
|
(2)
|
|
|
156,264
|
|
|
R. Don Elsey
|
|
|
—
|
|
|
|
38,623
|
|
|
|
—
|
|
|
|
38,623
|
|
|
Joseph McNay
|
|
|
—
|
|
|
|
38,623
|
|
|
|
—
|
|
|
|
38,623
|
|
|
Mauro Bove
|
|
|
—
|
|
|
|
38,623
|
|
|
|
—
|
|
|
|
38,623
|
|
|
|
(1)
|
During 2011, our Board of Directors elected to cease paying cash compensation to non-employee directors to help the company preserve capital.
|
Options held by each Board member as of December 31,
2015, are as follows:
|
Allan Goldstein, Ph.D.
|
|
|
1,459,077
|
|
|
R. Don Elsey
|
|
|
430,000
|
|
|
Joseph McNay
|
|
|
433,024
|
|
|
Mauro Bove
|
|
|
462,155
|
|
|
|
(2)
|
In addition to being Chairman of our Board of Directors, Dr. Goldstein also serves as our Chief Science Officer. In this capacity, Dr. Goldstein received cash compensation of $92,712 in 2015. In 2015 Dr. Goldstein was also granted options to purchase 250,000 shares of common stock.
|
We entered into an employment
agreement with Dr. Goldstein on April 16, 2014 for him to serve as our Chief Science Officer. Dr. Goldstein’s employment
agreement had an initial one-year term, which has been and will be automatically renewed for additional one-year periods unless
either we or Mr. Goldstein elect not to renew it. Dr. Goldstein’s annual base salary was $75,000 and was increased
to $90,000 on January 1, 2015. Dr. Goldstein’s salary may not be adjusted downward without his written consent, except in
a circumstance which is part of a general reduction or other concessionary arrangement affecting all employees or affecting senior
executive officers. Dr. Goldstein is also eligible to receive an annual bonus in an amount established by the Board and is
entitled to participate in and receive all standard employee benefits and to participate in all of our applicable incentive plans,
including stock option, stock, bonus, savings and retirement plans.
Dr. Goldstein is eligible
to receive options to purchase common stock under our equity incentive plans. The decision to grant any such options and the terms
of such options are within the discretion of our Board or the compensation committee thereof. All vested options are exercisable
for a period of time following any termination of Dr. Goldstein’s employment as may be set forth in the applicable benefit
plan or in any option agreement between Dr. Goldstein and us.
Rule 10b5-1 Trading Plans
Our directors and
executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell
shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established
by the director or officer when entering into the plan, without further direction from the director or officer. The director or
officer may amend or terminate the plan in some circumstances. Our directors and executive officers may also buy or sell additional
shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.
CERTAIN RELATIONSHIPS
AND RELATED PARTY TRANSACTIONS
Related Party Transactions
Described below are transactions and series of similar transactions
that occurred during fiscal 2013, 2014 or 2015 to which we were a party or are a party in which:
|
·
|
the amounts involved exceeded or will exceed $120,000; and
|
|
|
|
|
·
|
a director, executive officer, beneficial owner of more than five percent of any class of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.
|
U.S. Joint Venture
On January 28, 2015, we
announced that we entered into a Joint Venture Agreement with GtreeBNT. The Joint Venture Agreement provides for the creation
of ReGenTree, owned by us and GtreeBNT, that will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy
in the United States, or other ophthalmic indications in the U.S. GtreeBNT will be responsible for funding product
development and commercialization efforts, and hold a majority interest, of ReGenTree. In conjunction with the Joint Venture
Agreement, we also entered into a royalty-bearing license agreement (the “License Agreement”) with ReGenTree
pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United
States and Canada.
In September 2015, ReGenTree began a multi-centered,
randomized, double-masked Phase 2b/3 clinical trial in patients with dry eye syndrome (“DES”) and a multi-centered,
randomized, double-masked Phase 3 clinical trial in patients with neurotrophic keratopathy (“NK”), both in the U.S.
The DES trial has completed full enrollment, treatment and follow-up of all patients. Patient data from the DES trial was released
in early May and additional clinical work is being planned for late 2016.
The study, which enrolled
317 subjects, tested two doses of RGN-259 eye drops containing 0.05% and 0.1% concentrations of the Tβ4 four times daily
for 28 days vs. placebo. On the 28th and final day of dosing, patients were subject to the Controlled Adverse Environment
(CAE) challenge. Co-primary endpoints were total corneal fluorescein staining score change on the 28th day pre-CAE and
post-CAE (sign) and total ocular discomfort score change on the 28th day pre-CAE and post-CAE (symptom). Although the
co-primary endpoints were not met, we demonstrated RGN-259’s protective efficacy in improving a sign and symptom of dry
eye syndrome, which is in line with the results observed in the previous Phase 2a trial. Importantly, we identified
approvable sign and symptom endpoints, which were met with statistical significance. ReGenTree discussed with the FDA the
Phase 3 protocol and its regulatory strategy this summer and was cleared to initiate a confirmatory Phase 3 trial, which has
been initiated.
RGN-259 was safe and well-tolerated and
comfortable for the patients with no irritation upon instillation. There were no significant drug-related adverse events for both
concentrations. The safety profile is consistent with that observed in the previous Phase 2a trial, which had a twice daily instillation
regimen.
The NK trial, a smaller study in an orphan
population, has enrolled eight patients thus far with a goal of 46. Of the eight original clinical sites for the study, six are
enrolling patients, one has yet to receive IRB approval to begin enrolling patients, and one was unable to consummate a clinical
contract with ReGenTree. ReGenTree is considering adding additional sites to accelerate patient enrollment.
GtreeBNT has developed the CMC (chemistry,
manufacturing and controls) dossier required for Phase 3 clinical trials and commercialization in the U.S. and in Korea. This comprehensive
and critical effort ensures that final drug product manufacturing, packaging, stability, purity, reproducibility, etc., meets regulatory
guidelines and product specifications. The product of this activity is the current product format being utilized in the U.S. trials
being conducted by ReGenTree and will also be utilized in the planned clinical activity to be conducted by GtreeBNT under the RGN-259
license agreement for Pan Asia.
Other Licensing Agreements with GtreeBNT
In addition to the Joint Venture Agreement,
we entered into two license agreements on March 7, 2014 with GtreeBNT. The two Licensing Agreements are for the license of territorial
rights to RGN-259 and RGN-137.
Under the License Agreement for RGN-259,
GtreeBNT has the right to develop and commercialize RGN-259 in Asia (excluding China, Hong Kong, Taiwan, and Macau). The rights
are exclusive in Korea, Japan, Australia, New Zealand, Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Mongolia, Myanmar
(Burma), Philippines, Singapore, Thailand, Vietnam, and Kazakhstan, and semi-exclusive in India, Pakistan, Bangladesh, Bhutan,
Maldives, Nepal, Sri Lanka, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, collectively, the Territory (the “259 Territory”).
Under the RGN-259 License Agreement we are eligible to receive aggregate potential milestone payments of up to $3.5 million. In
addition, we are eligible to receive royalties of a low double-digit percentage of any commercial sales of the licensed product
sold by GtreeBNT in the 259 Territory.
Under the License Agreement for RGN-137,
GtreeBNT has the exclusive right to develop and commercialize RGN-137 in the U.S. (the “137 Territory”). Under the
137 License Agreement we are eligible to receive aggregate potential milestone payments of up to $3.5 million. In addition, we
are eligible to receive royalties of a low double-digit percentage of any commercial sales of the Company’s licensed product
sold by GtreeBNT in the 137 Territory.
Each license agreement contains diligence
provisions which require the initiation of certain clinical trials within certain time periods that, if not met, would result in
the loss of rights or exclusivity in certain countries. GtreeBNT will pay for all developmental costs associated with each product
candidate. We will provide a certain limited amount of Tβ4 to GtreeBNT at no charge for initial clinical trials in Korea,
Japan and Australia for RGN-259 and in the U.S. for RGN-137 and will provide Tβ4 to GtreeBNT for all other developmental and
clinical work on a cost plus basis. We retain the manufacturing and supply rights for Tβ4 in the respective Territories and
the parties will negotiate in good faith an exclusive supply agreement for Tβ4 as soon as practicable. We also have the right
to exclusively license any improvements made by GtreeBNT to our products outside of the licensed territory on a royalty free basis.
The two firms will create a joint development
committee to discuss and agree on the development of the licensed products and share information relating thereto. Both companies
will also share all non-clinical and clinical data and other information related to development of the licensed product candidates.
Private Placement of Convertible Notes-October
2012
On October 19, 2012, we issued Sinaf a
convertible promissory note for $200,000 and a warrant to purchase 266,667 shares at a purchase price of $0.15 per share. Additionally,
the convertible promissory note is convertible into 1,333,333 shares of common stock at $0.15 cents per share. The notes issued
in October 2012 were originally to mature after twenty-four (24) months from issuance. In order to conserve the Company’s
capital, in October 2014 the holders agreed to extend the maturity date to October 19, 2017, all other terms were unchanged.
On October 19, 2012, we completed a private
placement of convertible notes (the “October 2012 Notes”) with four accredited investors raising an aggregate of $300,000
in gross proceeds.
Warrants
. In connection
with the issuance of the October 2012 Notes, we also issued warrants to each investor. The warrants are exercisable
for an aggregate of 400,000 shares of common stock with an exercise price of $0.15 per share for a period of five years.
Investors
. The investors in the
October 2012 Notes, and the principal amount of their respective October 2012 Notes and number of shares of common stock issuable
upon exercise of their respective warrants, are as set forth below:
|
Investor
|
|
October 2012
Note Principal
|
|
|
Warrants
|
|
|
SINAF S.A.
|
|
$
|
200,000
|
|
|
|
266,667
|
|
|
Joseph C. McNay
|
|
$
|
50,000
|
|
|
|
66,667
|
|
|
Allan L. Goldstein
|
|
$
|
35,000
|
|
|
|
46,666
|
|
|
J.J. Finkelstein
|
|
$
|
15,000
|
|
|
|
20,000
|
|
Sinaf S. A. is a direct wholly-owned subsidiary
of Aptafin S.p.A., or Aptafin. Aptafin is owned directly by Paolo Cavazza and members of his family, who directly and indirectly
own 38% of Sigma-Tau. The other investors are members of our Board of Directors, including Mr. Finkelstein who serves as our chief
executive officer and member of our Board of Directors, Mr. McNay who serves as a member of Board of Directors, and Dr. Goldstein
who serves as our Chief Scientific Advisor and as Chairman of our Board of Directors.
2014 Convertible Notes
On January 7, 2014, we completed a private
placement of convertible notes raising an aggregate of $55,000 in gross proceeds (the “January 2014 Notes”).
The January 2014 Notes pay interest at a rate of 5% per annum, mature 60 months after their date of issuance and are convertible
into shares of our common stock at a conversion price of $0.06 per share (subject to adjustment as described in the January 2014
Notes) at any time prior to repayment, at the election of the Investor. In the aggregate, the Notes were initially convertible
into up to 916,667 shares of our common stock.
At any time prior to maturity of the January
2014 Notes, with the consent of the holders of a majority in interest of the January 2014 Notes, we may prepay the outstanding
principal amount of the January 2014 Notes plus unpaid accrued interest without penalty. Upon the commission of any
act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing
by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation
of such petition without dismissal for a period of 90 days or more, or the appointment of a receiver or trustee to take possession
of the property or assets of the Company, the outstanding principal and all accrued interest on the January 2014 Notes will accelerate
and automatically become immediately due and payable.
The Investors in the offering included
three directors of the Company, Dr. Goldstein who serves as the Company’s Chief Scientific Advisor and Chairman of our Board
of Directors, Mr. McNay who serves as a member of Board of Directors, and L. Thompson Bowles who previously served as a member
of our Board of Directors. The original principal amounts of their respective Notes are as set forth below:
|
Investor
|
|
Note Principal
|
|
|
Joseph C. McNay
|
|
$
|
25,000
|
|
|
Allan L. Goldstein
|
|
$
|
10,000
|
|
|
L. Thompson Bowles
|
|
$
|
5,000
|
|
2013 Convertible Notes
On March 29, 2013, we completed a private
placement of convertible notes (the “March 2013 Notes”) raising an aggregate of $225,000 in gross proceeds. The March
2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance and are
convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment as described
in the March 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate, the March 2013 Notes
are initially convertible into up to 3,750,000 shares of our common stock.
At any time prior to maturity of the March
2013 Notes, with the consent of the holders of a majority in interest of the March 2013 Notes, we may prepay the outstanding principal
amount of the March 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the
Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company
of a petition in bankruptcy or any petition for relief under the Federal bankruptcy act or the continuation of such petition without
dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property
or assets of the Company, the outstanding principal and all accrued interest on the March 2013 Notes will accelerate and automatically
become immediately due and payable.
The investors in the offering included
two directors of the Company, Dr. Goldstein, the Company’s Chief Scientific Advisor and Chairman of our Board of Directors,
and Mr. McNay, an independent director. The original principal amounts of their respective March 2013 Notes are as set forth below:
|
Investor
|
|
Note Principal
|
|
|
Joseph C. McNay
|
|
$
|
50,000
|
|
|
Allan L. Goldstein
|
|
$
|
25,000
|
|
On July 5, 2013, we completed a private
placement of convertible notes (the “July 2013 Notes”) raising an aggregate of $100,000 in gross proceeds. The July
2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance and are
convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment as described
in the July 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate, the July 2013 Notes
are initially convertible into up to 1,666,667 shares of our common stock.
At any time prior to maturity of the July
2013 Notes, with the consent of the holders of a majority in interest of the July 2013 Notes, we may prepay the outstanding principal
amount of the July 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the
Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company
of a petition in bankruptcy or any petition for relief under the Federal bankruptcy act or the continuation of such petition without
dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property
or assets of the Company, the outstanding principal and all accrued interest on the July 2013 Notes will accelerate and automatically
become immediately due and payable.
The investors in the offering included
four directors of the Company, Mr. Finkelstein who serves as the Company’s Chief Executive Officer and member of our Board
of Directors, Dr. Goldstein who serves as the Company’s Chief Scientific Advisor and Chairman of our Board of Directors,
Mr. McNay who serves as a member of Board of Directors, and L. Thompson Bowles who previously served as a member of our Board of
Directors. The original principal amounts of their respective July 2013 Notes are as set forth below:
|
Investor
|
|
Note Principal
|
|
|
Joseph C. McNay
|
|
$
|
50,000
|
|
|
Allan L. Goldstein
|
|
$
|
10,000
|
|
|
J.J. Finkelstein
|
|
$
|
5,000
|
|
|
L. Thompson Bowles
|
|
$
|
5,000
|
|
On September 11, 2013, we completed a private
placement of convertible notes raising an aggregate of $321,000 in gross proceeds (the “September 2013 Notes”). The
September 2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance
and are convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment
as described in the September 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate,
the September 2013 Notes are initially convertible into up to 5,350,000 shares of our common stock.
At any time prior to maturity of the September
2013 Notes, with the consent of the holders of a majority in interest of the September 2013 Notes, we may prepay the outstanding
principal amount of the September 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any
act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing
by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation
of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take
possession of the property or assets of the Company, the outstanding principal and all accrued interest on the September 2013 Notes
will accelerate and automatically become immediately due and payable.
The investors in the offering included
an affiliate, four directors of the Company, and two unaffiliated accredited investors. The principal amounts of the affiliate
and directors respective September 2013 Notes are as set forth below:
|
Investor
|
|
Note Principal
|
|
|
SINAF S.A.
|
|
$
|
150,000
|
|
|
Joseph C. McNay
|
|
$
|
100,000
|
|
|
Allan L. Goldstein
|
|
$
|
11,000
|
|
|
L. Thompson Bowles
|
|
$
|
5,000
|
|
|
R. Don Elsey
|
|
$
|
5,000
|
|
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted
rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability
of Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering
a single Notice of Internet Availability or other Annual Meeting materials addressed to those stockholders. This process, which
is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for
companies.
This year, a number
of brokers with account holders who are stockholders of the Company will be “householding” the Company’s proxy
materials. A single Notice of Internet Availability of 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 Notice of Internet Availability of Proxy Materials, please notify your broker. Direct your
written request to the Company’s Secretary at 15245 Shady Grove Road, Suite 470, Rockville, Maryland 20850. Stockholders
who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like
to request “householding” of their communications should contact their brokers.
FORM 10-K INFORMATION
A COPY OF THE COMPANY’S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 (WITHOUT EXHIBITS), ACCOMPANIES THIS NOTICE OF MEETING AND
PROXY STATEMENT. NO PART OF THE ANNUAL REPORT IS INCORPORATED HEREIN AND NO PART THEREOF IS TO BE CONSIDERED PROXY SOLICITING MATERIAL.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PER
SON,
ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING THE FORM 10-K, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE COMPANY’S
FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH EXHIBIT(S) SHOULD BE DIRECTED TO THE COMPANY’S SECRETARY AT 15245
Shady Grove Road, Suite 470, Rockville, Maryland 20850.
OTHER MATTERS
The Board knows of
no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before
the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their
best judgment.
|
|
|
By Order of the Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
Allan L. Goldstein, Ph.D.
|
|
|
|
Chairman of the Board
|
Rockville, Maryland
September 16, 2016
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