UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
[X]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[ ]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Rule 14a-12
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Pressure
BioSciences, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No fee required.
[ ]
Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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[ ]
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Fee
paid previously with preliminary materials.
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[ ]
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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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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Pressure
BioSciences, Inc.
14
Norfolk Avenue
South
Easton, MA 02375
(508)
230-1828 (T)
(508)
230-1829 (F)
www.pressurebiosciences.com
November
[●]
, 2016
Dear
Stockholder:
You
are cordially invited to attend the Special Meeting in Lieu of the Annual Meeting of Stockholders (the “Meeting”)
of Pressure BioSciences, Inc. (the “Company”) to be held on Wednesday December 21, 2016, at 4:00 p.m. at the Company’s
principal executive offices located at 14 Norfolk Avenue, South Easton, MA 02375.
Detailed
information about the Meeting and the proposals to be acted upon is included in the accompanying notice of Meeting and proxy statement.
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 also accompanies this letter.
Whether
or not you plan to attend the Meeting, you can ensure your shares of the Company’s Common Stock are voted at the Meeting
by submitting your instructions in writing by returning the enclosed proxy card. If you plan to attend the Meeting in person,
please remember to bring a form of personal identification with you and, if you are acting as a proxy for another stockholder,
please bring written confirmation from the record owner that you are acting as a proxy.
If
your shares are held in street name, in addition to other non-routine matters, brokers may not vote your shares on the election
of directors in the absence of your specific instructions as to how to vote. All proposals presented in this Proxy Statement,
other than Proposal No. 2, are considered non-routine matters. Proposal No. 2 is considered a routine matter. If your shares are
held in street name, it is important that you provide instructions to your broker regarding the voting of your shares.
Sincerely,
Jeffrey
N. Peterson
Chairman
of the Board of Directors
PRESSURE
BIOSCIENCES, INC.
NOTICE
OF SPECIAL MEETING
IN
LIEU OF THE ANNUAL MEETING OF STOCKHOLDERS
To
be Held on December 21, 2016
Important
Notice Regarding the Availability of Proxy Materials for the
Special
Meeting in Lieu of the Annual
Meeting
of Stockholders to be Held on December 21, 2016
The
Proxy Statement and Annual Report on Form 10-K are available at
http://www.pressurebiosciences.com/newsroom/category/investor-relations/2016-shareholder-proxy
NOTICE
is hereby given that a Special Meeting in Lieu of the Annual Meeting of Stockholders (the “Meeting”) of Pressure BioSciences,
Inc. (“PBI” or the “Company”) will be held on December 21, 2016, at 4:00 p.m. at the Company’s principal
executive offices located at 14 Norfolk Avenue, South Easton, MA 02375, for the following purposes, as more fully described in
the proxy statement accompanying this notice:
1.
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To
elect two Class II Directors to hold office until the 2019 Annual Meeting of Stockholders and until their successor(s) is
(are) duly elected and qualified.
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2.
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To
ratify the appointment of MaloneBailey LLP as our independent registered public accounting firm for 2016.
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3.
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To
approve an amendment to our articles of incorporation to increase the authorized number of shares of Common Stock by up to
50,000,000 shares, such increase to be effected through one or more amendments to our articles of organization to be filed
with the Secretary of the Commonwealth of Massachusetts at the discretion of the Board of Directors at any time during the
twelve months following the date of the meeting. Even if this Proposal No. 3 is approved, the Board of Directors will not
effectuate the increase to the authorized number of shares of Common Stock if both: (a) Proposal No. 4 is approved; and (b)
the Board of Directors effectuates a reverse stock split of our Common Stock at any time within twelve months following the
Meeting.
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4.
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To
approve an amendment to our articles of organization to effect a reverse stock split of our Common Stock by a ratio of not
less than one-for-two and not more than one-for-twenty at any time within twelve months following the Meeting for the purpose
of assisting the Company in meeting the listing requirements of the NASDAQ Capital Market or another exchange, with the decision
of whether or not to implement a reverse stock split and the exact ratio to be set at a whole number within this range to
be made by our Board of Directors in its sole discretion.
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5.
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To
approve, on an advisory basis, a non-binding resolution to approve the compensation of our named executive officers, as disclosed
in the proxy statement accompanying this notice.
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6.
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To
consider and vote on a proposal to approve the adjournment of the Meeting, if necessary or appropriate, to solicit additional
proxies, in the event that there are not sufficient votes at the time of such adjournment to approve any of Proposal Nos.
1 through 5.
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7.
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To
consider and vote upon any matters incidental to the foregoing purposes and any other matters which may properly come before
the Meeting or any adjourned session thereof.
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The
Board of Directors has fixed the close of business on October 28, 2016 as the record date for determining the stockholders entitled
to notice of, and to vote at, the Meeting.
By
Order of the Board of Directors:
Richard
T. Schumacher
Clerk
South
Easton, Massachusetts
November
[●]
, 2016
IMPORTANT
Whether
or not you intend to attend the Meeting in person, please ensure that your shares of the Company’s Common Stock are present
and voted at the Meeting by submitting your instructions in writing by completing, signing, dating, and returning the enclosed
proxy card in the enclosed, self-addressed envelope.
This
notice, proxy statement and form of proxy card are being first mailed to stockholders of the Company on or about November 14,
2016.
PRESSURE
BIOSCIENCES, INC.
PROXY
STATEMENT
FOR
THE SPECIAL MEETING IN LIEU OF
THE
ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON DECEMBER 21, 2016
General
This
proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Pressure BioSciences,
Inc., a Massachusetts corporation, with its principal executive offices located at 14 Norfolk Avenue, South Easton, MA 02375,
for use at the Special Meeting in Lieu of the Annual Meeting of Stockholders to be held on December 21, 2016 at 4:00 p.m. and
at any adjournments or postponements thereof (the “Meeting”) for the purposes set forth herein and in the accompanying
Notice of Special Meeting in Lieu of the Annual Meeting of Stockholders. In this proxy statement we refer to Pressure
BioSciences, Inc. as “PBI,” “the Company,” “we,” or “us”.
The
enclosed proxy relating to the Meeting is solicited on behalf of the Company’s Board of Directors (the “Board of Directors”
or the “Board”) and the cost of such solicitation will be borne by the Company. Certain of the Company’s
officers and regular employees may solicit proxies by correspondence, telephone, or in person, without extra compensation. We
will also pay to banks, brokers, nominees, and certain other fiduciaries their reasonable expenses incurred in forwarding proxy
material to the beneficial owners of securities held by them. It is expected that this proxy statement, the accompanying
notice of Meeting, proxy card, and Annual Report on Form 10-K for the fiscal year ended December 31, 2015 will be sent or given
to stockholders on or about November 14, 2016.
Voting
Securities and Record Date
Stockholders
of record of the Company’s common stock, $0.01 par value (the “Common Stock”), at the close of business on October
28, 2016, the record date for the Meeting, will be entitled to receive notice of, and to vote at, the Meeting. As of October 28,
2016, there were issued and outstanding 30,468,862 shares of Common Stock, all of which are entitled to vote. Each share of Common
Stock outstanding at the close of business on the record date is entitled to one vote on each matter that is voted. In addition,
as of October 28, 2016, there were issued and outstanding 300 shares of the Company’s Series D Convertible Preferred Stock,
par value $0.01 per share (“Series D Preferred Stock”), 86,570 shares of the Company’s Series G Convertible
Preferred Stock, par value $0.01 per share (“Series G Preferred Stock”), 10,000 shares of the Company’s Series
H Convertible Preferred Stock, par value $0.01 per share (“Series H Preferred Stock”), 21 shares of the Company’s
Series H2 Convertible Preferred Stock, par value $0.01 per share (“Series H Preferred Stock”), 3,546 shares of the
Company’s Series J Convertible Preferred Stock, par value $0.01 per share (“Series J Preferred Stock”) and 6,816
shares of the Company’s Series K Convertible Preferred Stock, par value $0.01 per share (“Series K Preferred Stock”).
The shares of Preferred Stock are not entitled to vote on any proposal to be presented at the Meeting.
Quorum
A
quorum, consisting of the holders of a majority of the shares of Common Stock issued, outstanding, and entitled to vote at the
Meeting, will be required to be present in person or by proxy for the transaction of business at the Meeting. Stockholders of
record present at the Meeting in person or by proxy, abstentions, and “broker non-votes” (as defined below) are counted
as present or represented at the Meeting for the purpose of determining whether a quorum exists. A “broker non-vote”
occurs when a broker, bank, or representative (“broker or representative”) does not vote on a particular matter because
it either does not have discretionary voting authority on that matter or it does not exercise its discretionary voting authority
on that matter.
Manner
of Voting
Stockholders
of Record
Shares
entitled to be voted at the Meeting can only be voted if the stockholder of record of such shares is present at the Meeting or
returns a signed proxy card. Shares represented by a valid proxy will be voted in accordance with your instructions.
A
stockholder of record who votes his or her shares by returning a proxy card, may revoke the proxy at any time before the stockholder’s
shares are voted at the Meeting by written notice to the Clerk of the Company received prior to the Meeting, by executing and
returning a later dated proxy card prior to the Meeting, or by voting by ballot at the Meeting.
Beneficial
Stockholders
If
you hold your shares through a broker or representative, you can only vote your shares in the manner prescribed by the broker
or representative. Detailed instructions from your broker or representative will generally be included with your proxy material.
These instructions may also include information on whether your shares can be voted by telephone or over the Internet or the manner
in which you may revoke your votes. If you choose to vote your shares by telephone or over the Internet, you should follow the
instructions provided by the broker or representative.
Voting
of Proxies
The
votes of stockholders present in person or represented by proxy at the Meeting will be tabulated by an inspector of elections
appointed by the Company. Shares represented by proxy will be voted in accordance with your specific instructions. If you sign
and return your proxy card without indicating specific instructions, your shares will be voted FOR each proposal. If any other
matters shall properly come before the Meeting, the authorized proxy will be voted by the proxies in accordance with their best
judgment.
If
you hold your shares as a beneficial owner rather than a stockholder of record, your broker or representative will vote the shares
that it holds for you in accordance with your instructions (if timely received) or, in the absence of such instructions, your
broker or representative may vote on certain matters for which it has discretionary voting authority. Your broker will be permitted
to vote your shares on Proposal No. 2 without your instructions. All other proposals are considered “non-routine”
matters and your broker or representative does not have discretionary voting authority with respect to these matters. Therefore,
the shares that do not receive voting instructions will be treated as “broker non-votes.”
Required
Vote
Abstentions
and broker non-votes are included in the number of shares present or represented for purposes of a quorum, but are not considered
as shares voting or votes cast with respect to any matter presented at the Meeting.
The
affirmative vote of the holders of a plurality of the votes cast by stockholders at the Meeting is required for Proposal No. 1
to elect the nominees as Class II Directors of the Company. Abstentions and broker non-votes will not have any effect on the Proposal
No. 1 to elect directors.
With
respect to Proposal No. 2, our Amended and Restated Bylaws, as amended, do not require that our stockholders ratify the appointment
of MaloneBailey LLP as our independent registered public accounting firm. However, we are submitting the proposal for ratification
as a matter of good corporate governance. If our stockholders do not ratify the appointment, the Audit Committee will reconsider
whether or not to retain MaloneBaily LLP. Even if the appointment is ratified, the Audit Committee, at its discretion, may change
the appointment at any time during the year if the Audit Committee determines that such a change would be in the best interests
of the Company and its stockholders. Ratification of the appointment of MaloneBaily LLP as the Company’s independent registered
public accounting firm requires the affirmative vote of the holders of a majority of the votes cast at the Meeting for Proposal
No. 2. As abstentions are not considered to be “votes cast”, abstentions will not have any effect on Proposal No.
2. As Proposal No. 2 is considered to be a “routine” matter for which a stockholder’s broker is permitted to
vote a stockholder’s shares without such stockholder’s instructions, there will not be any broker non-votes with regard
to Proposal No. 2.
The
affirmative vote of the holders of two-thirds of the Company’s issued and outstanding Common Stock is required for the approval
of Proposal Nos. 3 and 4. Abstentions and broker non-votes will have the effect of a “no” vote on these
proposals. The affirmative vote of the holders of a plurality of the votes cast by stockholders at the Meeting is required for
Proposal No. 5 to approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed
in the proxy statement accompanying this notice. As abstentions and broker non-votes are not considered to be “votes
cast”, abstentions and broker non-votes will not have any effect on Proposal No. 5. The affirmative vote of a majority of
the votes cast at the Meeting is required for the approval of Proposal No. 6. As abstentions and broker non-votes are not
considered to be “votes cast”, abstentions and broker non-votes will not have any effect on Proposal No 6.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The
following table sets forth certain information as of October 28, 2016 concerning the beneficial ownership of Common Stock for:
(i) each director and director nominee, (ii) each named executive officer in the Summary Compensation Table under “Executive
Compensation” below, (iii) all executive officers and directors as a group, and (iv) each person (including any “group”
as that term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of 5%
or more of the Company’s Common Stock. Except as indicated below, the address for each of the persons below who
are beneficial owners of 5% or more of the Company’s Common Stock is the Company’s corporate address at 14 Norfolk
Avenue, South Easton, MA 02375.
Beneficial
ownership has been determined in accordance with the rules of the Securities and Exchange Commission (“SEC”) and is
calculated based on 30,468,862 shares of our Common Stock issued and outstanding as of October 28, 2016. Shares of Common Stock
subject to options, warrants, preferred stock or other securities convertible into Common Stock that are currently exercisable
or convertible, or exercisable or convertible within 60 days of October 28, 2016, are deemed outstanding for computing the percentage
of the person holding the option, warrant, preferred stock, or convertible security but are not deemed outstanding for computing
the percentage of any other person.
Except
as indicated by the footnotes below, the Company believes, based on the information furnished to it, that the persons and entities
named in the table below have sole voting and investment power with respect to all shares of Common Stock that they beneficially
own.
Name
of Beneficial Owner
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Amount
and Nature of Beneficially Ownership(1)
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Percent
of Class
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Richard
T. Schumacher(2)
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2,372,390
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7.4
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%
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Jeffrey
N. Peterson(3)
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1,230,663
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3.9
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%
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Kevin A.
Pollack(4)
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1,130,992
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3.6
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%
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Michael
S. Urdea(5)
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955,434
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3.1
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%
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Vito J.
Mangiardi(6)
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751,532
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2.4
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%
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Edmund Y.
Ting, Ph.D(7)
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349,124
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1.1
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%
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Alexander
V. Lazarev, Ph.D(8)
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275,781
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0.9
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%
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All other
officers
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283,136
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0.9
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%
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All Executive
Officers and Directors as a Group (eight persons) (9)
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7,349,051
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20.8
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%
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1)
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The
terms of the Company’s Series D Convertible Preferred Stock and Series D warrants; Series G Convertible Preferred Stock;
Series H Convertible Preferred Stock; Series J Convertible Preferred Stock; Series K Convertible Preferred Stock and Series
K warrants; and various Common Stock warrants issued in connection with the Company’s fundraising efforts contain a
limitation on conversion which prevents the holder from converting shares of Series D, Series G, Series H, Series J, and Series
K Convertible Preferred Stock into, or exercise of the warrants and various Common Stock warrants for, shares of Common Stock
if, after giving effect to the conversion or exercise, as the case may be, the holder would beneficially own more than 4.99%
of the outstanding shares of Common Stock. The holder may elect to increase this limitation to 9.99%, 14.99% or 19.99%, upon
not less than 61 days prior written notice to the Company.
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2)
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Includes
(i) 863,614 shares of Common Stock issuable upon exercise of options; (ii) 63,000 shares of Common Stock issuable upon conversion
of Series G Convertible Preferred Stock; (iii) 63,000 shares of Common Stock issuable upon conversion of Series J Convertible
Preferred Stock; (iv) 78,571 shares of Common Stock issuable upon conversion of Convertible Debentures; and (v) 408,403 shares
of Common Stock issuable upon the exercise of warrants. Does not include 20,162 shares of Common Stock held by Mr. Schumacher’s
minor son as his wife exercises all voting and investment control over such shares.
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3)
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Includes
(i) 436,083 shares of Common Stock issuable upon exercise of options; (ii) 165,000 shares of Common Stock issuable upon conversion
of Convertible Debentures; and (iii) 237,000 shares of Common Stock issuable upon the exercise of warrants.
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4)
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Includes
(i) 249,000 shares of Common Stock issuable upon exercise of options; (ii) 183,335 shares
of Common Stock issuable upon conversion of Convertible Debentures; and (iii) 233,334
shares of Common Stock issuable upon the exercise of warrants.
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5)
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Includes
(i) 213,583 shares of Common Stock issuable upon exercise of options; (ii) 180,714 shares of Common Stock issuable upon conversion
of Convertible Debentures; and (iii) 202,143 shares of Common Stock issuable upon the exercise of warrants.
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6)
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Includes
(i) 249,000 shares of Common Stock issuable upon exercise of options; (ii) 39,286 shares of Common Stock issuable upon conversion
of Convertible Debentures; and (iii) 117,857 shares of Common Stock issuable upon the exercise of warrants.
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7)
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Includes
(i) 324,669 shares of Common Stock issuable upon exercise of options.
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8)
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Includes
(i) 263,474 shares of Common Stock issuable upon exercise of options; (ii) 5,705 shares of Common Stock issuable upon the
exercise of warrants.
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9)
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Includes
(i) 2,859,841 shares of Common Stock issuable upon exercise of options; and (ii) 1,239,394 shares of Common Stock issuable
upon the exercise of warrants.
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Equity
Compensation Plan Information
We
maintain a number of equity compensation plans for employees, officers, directors and other entities and individuals whose efforts
contribute to our success. The table below sets forth certain information as of our fiscal year ended December 31, 2015 regarding
the shares of our Common Stock available for grant or granted under our equity compensation plans.
Plan
Category
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Number
of securities to be issued upon exercise of outstanding options
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Weighted-average
exercise price of outstanding options
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Number
of securities remaining available for future issuance under equity compensation plans
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Equity
compensation plans approved by security holders(1)
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3,503,250
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$
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0.46
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1,236,750
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Equity compensation
plans adopted by the Board of Directors(2)
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2,068,000
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0.40
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2,932,000
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(1)
Includes the following plans: 2005 Equity Incentive Plan and 2013 Equity Incentive Plan.
(2)
Includes the following plans: 2015 Non-Qualified Stock Option Plan
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
At
the Meeting, two Class II Directors are to be elected to serve until the 2019 Annual Meeting of Stockholders and until his successor
has been duly elected and qualified. The Board of Directors, upon the recommendation of the Nominating Committee, has nominated
Mr. Vito Mangiardi and Mr. Kevin Pollack as Class II Directors. Mr. Mangiardi and Mr. Pollack are currently directors of the Company
and have not been nominated pursuant to any arrangement or understanding with any person.
The
Company’s Restated Articles of Organization, as amended (the “Articles of Organization”), and Amended and Restated
Bylaws, as amended (the “Bylaws”), provide that our Board of Directors shall be divided into three classes. At each
annual meeting of stockholders, the directors elected to succeed those whose terms expire are identified as being in the same
class as the directors they succeed and are elected to hold office for a term to expire at the third annual meeting of stockholders
after their election, and until their respective successors are duly elected and qualified, unless an adjustment in the term to
which an individual director shall be elected is made because of a change in the number of directors.
Our
Articles of Organization and Bylaws do not require our stockholders to elect any directors in a class the term of office of which
extends beyond the Meeting. The terms of office of Mr. Mangiardi and Mr. Pollack, the Company’s Class II Directors, expire
at the 2016 Meeting. The terms of office of the Class I Directors and Class III Director, comprised of Mr. Peterson, Mr. Schumacher
and Dr. Urdea, continue after the Meeting.
At
the Meeting, it is the intention of the persons named as proxies to vote for the election of Mr. Mangiardi and Mr. Pollack as
Class II Directors. In the unanticipated event that Mr. Mangiardi and/or Mr. Pollack should be unable to serve, the persons named
as proxies will vote the proxy for such substitute(s), if any, as the present Board of Directors may designate or the present
Board of Directors may reduce the number of directors.
In
selecting members for our Board of Directors, we consider each individual’s unique and diversified background and expertise.
We believe that selecting directors with a wide range of talents and skills provides a functional diversity that allows our Board
to provide strong leadership. The following noteworthy experience, qualifications, attributes and skills for each Board member,
together with the biographical information for each nominee described below, led to our conclusion that the person should serve
as a director of PBI in light of our business and structure:
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Mr.
Jeffrey N. Peterson, the Chairman of our Board, is the CEO of Target Discovery, Inc., a personalized medicine diagnostics
company, and has broad executive, general management, multi-functional, multi-business, and international experience.
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●
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Mr.
Vito J. Mangiardi has broad executive, general management, multi-functional, multi-business, and international experience,
specifically in the life sciences field. Mr. Mangiardi is the founding partner, President and CEO of Marin Bay Partners, LLC
(MBP), a consulting firm focused in Life Sciences, Pharmaceutical Development and Clinical Diagnostics.
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Dr.
Michael S. “Mickey” Urdea founded and is a Partner for Halteres Associates, a biotechnology consulting firm. He
serves as an expert consultant to the life sciences industry and philanthropic organizations, and is on the scientific advisory
boards and boards of directors of a number of biotechnology and diagnostics companies.
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●
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Mr.
Kevin A. Pollack provides a wealth of knowledge and experience in financial and administrative
matters. Mr. Pollack is currently serving as Chief Financial Officer of Opiant
Pharmaceuticals, Inc. and as President of Short Hills Capital LLC, a broker-dealer.
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●
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Mr.
Richard T. Schumacher, the Company’s founder, provides valuable operational, sales and marketing, financial, and managerial
expertise and experience and has significant knowledge of the Company’s technology and products. Prior to founding the
company, Mr. Schumacher spent over 16 years working in the clinical research setting. In the more than 30 years since the
Company’s formation, Mr. Schumacher has served the Company in various roles, including President, Chief Executive Officer
and Chairman.
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Vote
Required to Elect the Nominees as Directors
The
affirmative vote of the holders of a plurality of the votes cast by stockholders at the Meeting is required for the election of
Vito Mangiardi and Kevin Pollack as Class II Directors of the Company.
Board
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” THE ELECTION OF VITO MANGIARDI AND KEVIN
POLLACK AS CLASS II DIRECTORS OF THE COMPANY.
Information
on Nominees and Other Directors
The
following information includes additional information as of the date of this proxy statement about each nominee and director whose
term extends beyond the Meeting, including his age, all positions he holds with us, his principal occupation and business experience
during the past five years, the names of other publicly-held companies for which he currently serves as a director or held a directorship
during the past five years, and the year in which each nominee’s term would expire, if elected.
Name
|
|
Age
|
|
Position
|
|
Director
Since
|
|
Year
Term Expires,
if
Elected, and Class
|
Jeffrey
N. Peterson(1)
|
|
60
|
|
Chairman
of the Board
|
|
2011
|
|
2018
Class I
|
Michael
S. Urdea
|
|
63
|
|
Director
|
|
2013
|
|
2018
Class I
|
Vito
J. Mangiardi*(1)
|
|
66
|
|
Director
|
|
2012
|
|
2019
Class II
|
Kevin
A. Pollack*(1)
|
|
45
|
|
Director
|
|
2012
|
|
2019
Class II
|
Richard
T. Schumacher
|
|
66
|
|
Director,
President, Chief Executive Officer, Treasurer, and Clerk
|
|
1978
|
|
2017
Class III
|
*Nominee
for Class II Director.
(1)
Member of the Audit Committee, Compensation Committee, and Nominating Committee
Mr.
Jeffrey N. Peterson has served as a director of the Company since July 2011 and as Chairman of the Board starting in 2012. Since
1999, he has served as the chief executive officer of Target Discovery, Inc. (“TDI”), a personalized medicine diagnostics
(PMDx) company. Mr. Peterson also serves as Chairman of TDI’s majority-owned subsidiary, Veritomyx, Inc., which is completing
development and commercialization of software tools for accurate peptide, protein and isoform identification and characterization.
Prior to incorporating and joining TDI, Mr. Peterson served as CEO of Sharpe, Peterson, Ocheltree & Associates, an international
business development consulting firm assisting Fortune 500 and many smaller firms in business expansion and strategy. Prior to
that, he spent 9 years in key management roles in Abbott Laboratories’ Diagnostics and International (Pharmaceuticals, Hospital
Products, Nutritionals, and Consumer) businesses, last serving as CEO and General Manager of Abbott South Africa. Mr. Peterson’s
experience prior to Abbott Laboratories included 11 years with General Electric’s Engineered Materials and Plastics businesses,
spanning roles in strategic planning, business development, technology licensing, marketing and sales, operations, quality control
and R&D. Mr. Peterson holds BSChE and MSChE (Chemical Engineering) degrees from MIT, as well as 6 issued US patents. He serves
as Chair Emeritus of the BayBio Institute, a non-profit organization serving the life science community, and on the board of BayBio,
a trade association for the life sciences industry in Northern California. He is a cofounder of the Coalition for 21st Century
Medicine, and of BIO’s Personalized Medicine & Diagnostics Working Group. He serves on the board of Advisors for the
Center for Professional Development and Entrepreneurship at the University of Texas MD Anderson Cancer Center.
Dr.
Michael S. Urdea has served as a director of the Company since February 8, 2013. Dr. Urdea founded and is a Founder and Partner
for Halteres Associates, a biotechnology consulting firm. He also founded and served as Chief Executive Officer of Tethys Bioscience,
a proteomics-based diagnostics company involved in preventative personalized medicine. Additionally, Dr. Urdea is a founder and
the Chairman of Catalysis Foundation for Health, an organization addressing gaps in global healthcare caused by inefficiencies
in disease diagnosis and monitoring. He serves as an expert consultant to the life sciences industry and is on the scientific
advisory boards and boards of directors of a number of biotechnology, diagnostics, venture capital and philanthropic organizations.
Prior to his current business activities, Dr. Urdea founded the Nucleic Acid Diagnostics group at Chiron Corporation, and with
colleagues, invented branched DNA molecules for amplification of signal in nucleic acid complexes. Application of this technology
resulted in the first commercial products for quantification of human hepatitis B, hepatitis C, and human immunodeficiency viruses
(HBV, HCV, and HIV, respectively). He then became business head of the Molecular Diagnostics group and Chief Scientific Officer
at Bayer Diagnostics. He continues to serve as a diagnostics industry, product development and scientific advisor to the Bill
and Melinda Gates Foundation, acted as co-chair of two of the Grand Challenges grant review committees, and served as a member
of its Diagnostic Forum. Dr. Urdea is an author on nearly 200 peer-reviewed scientific publications, nearly 300 abstracts and
international scientific presentations, and more than 100 issued and pending patents. He received his BS in Biology and Chemistry
from Northern Arizona University in Flagstaff and his Ph.D in Biochemistry from Washington State University.
Mr.
Vito J. Mangiardi has served as a director of the Company since July 2012. Mr. Mangiardi is an accomplished senior executive with
proven experience as a President, CEO and COO in the Life Sciences and Bio Energy product and service sectors. He is a strong
P&L performer and corporate strategist in General Management, Operations, Sales/Marketing, and Science. Mr. Mangiardi has
held positions as a Research Chemist for Bio-Rad Laboratories, Inc.; Sales & Marketing Director for Baxter Travenol, Inc.;
Executive VP and COO for Quintiles Transnational Corp.; President and CEO of Diagnostics Laboratories, Inc., Clingenix, Inc.,
and Bilcare, Inc.; and President of AAI Pharma, Inc. More recently he was the COO/Deputy Director of Operations and Production
at the University of California Lawrence Berkeley National Laboratory Joint Genome Institute. Mr. Mangiardi has experience with
three start-ups, two midsize, and several mature companies, and has international experience leading and managing organizations
on four continents. He has vast experience in leading alliances, acquisitions, due diligence, and post-acquisition assimilation.
Mr. Mangiardi has been on the Board of Directors of three companies and has proven success in working with both national and international
investment groups to raise funds. Mr. Mangiardi earned a BS in Biology/Chemistry from Eastern Illinois University and two MBA
degrees from Golden Gate University - in General Management and in Marketing. Mr. Mangiardi is listed as an inventor in four patents
and various publications in Protein separation techniques in the area of Metabolism, Thyroid, Anemia/Hematology and Cancer, and
is a member of numerous professional organizations. Mr. Mangiardi is the founding partner, President and CEO of Marin Bay Partners,
LLC (MBP), a consulting firm focused on Life Sciences, Pharmaceutical Development and Clinical Diagnostics.
Mr.
Kevin A. Pollack has served as a director of the Company since July 2012. Mr. Pollack is Chief Financial Officer of Opiant Pharmaceuticals,
Inc. (OPNT-OTCQB), a specialty pharmaceutical company developing pharmacological treatments for substance use, addictive, and
eating disorders. He also serves as President of Short Hills Capital LLC, where he provides a range of services. Previously, Mr.
Pollack worked in asset management at Paragon Capital LP, focusing primarily on United States-listed companies, and as an investment
banker at Banc of America Securities LLC, focusing on corporate finance and mergers and acquisitions. Mr. Pollack started his
career at Sidley Austin LLP (formerly Brown & Wood LLP) as a securities attorney focusing on corporate finance and mergers
and acquisitions. He currently sits on the Board of Directors of Opiant Pharmaceuticals, Inc. and on the Board of Directors of
MagneGas Corporation (MNGA-NASDAQ), the developer of a technology that converts liquid waste into a hydrogen-based metal working
fuel and natural gas alternative. Mr. Pollack graduated magna cum laude from the Wharton School of the University of Pennsylvania
and received a dual J.D./M.B.A. from Vanderbilt University, where he graduated with Beta Gamma Sigma honors.
Mr.
Richard T. Schumacher, the founder of the Company, has served as a director of the Company since 1978. He has served as the Company’s
Chief Executive Officer since April 16, 2004 and President since September 14, 2004. He previously served as Chief Executive Officer
and Chairman of the Board of the Company from 1992 to February 2003. From July 9, 2003 until April 14, 2004 he served as a consultant
to the Company pursuant to a consulting agreement. He served as President of the Company from 1978 to August 1999. Mr. Schumacher
served as the Director of Infectious Disease Services for Clinical Sciences Laboratory, a New England-based medical reference
laboratory, from 1986 to 1988. From 1972 to 1985, Mr. Schumacher was employed by the Center for Blood Research, a nonprofit medical
research institute associated with Harvard Medical School. Mr. Schumacher received a B.S. in Zoology from the University of New
Hampshire.
Corporate
Governance
Board
of Directors and Committee Meetings; Annual Meeting Attendance
. The Board of Directors held seven (7) meetings between January
1, 2015 and December 31, 2015. All of the directors attended at least 80% of those meetings. All of the Company’s directors
are encouraged to attend the Company’s annual meetings of stockholders. One of the directors attended the Company’s
2015 Special Meeting in Lieu of the Annual Meeting of Stockholders.
Board
Independence
. The Board of Directors has reviewed the qualifications of each of Messrs. Mangiardi, Peterson, Urdea and Pollack,
constituting more than a majority of the Company’s current directors, and has affirmatively determined that each individual
is, or at the time of their service was, “independent” as such term is defined under the current listing standards
of the Nasdaq Stock Market. The Board of Directors has determined that none of these directors has a material relationship with
the Company that would interfere with the exercise of independent judgment. In addition, each member of the Audit Committee is
independent as required under Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Stockholder
Communications
. Any stockholder wishing to communicate with any of the Company’s directors regarding the Company may
write to the director, c/o Clerk, Pressure BioSciences, Inc., 14 Norfolk Avenue, South Easton, MA 02375. The Clerk will forward
any reasonable communications directly to the director(s).
Code
of Ethics
. Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, the Company has adopted a Code of Ethics for Senior
Financial Officers that applies to the Company’s principal executive officer, principal financial officer, principal accounting
officer, controller, and other persons performing similar functions. A copy of the code of ethics is posted on, and may be obtained
free of charge from the investor relations portion of the Company’s website at www.pressurebiosciences.com. If the Company
makes any amendments to its Code of Ethics or grants any waiver, including any implicit waiver, from a provision of this Code
of Ethics to the Company’s principal executive officer, principal financial officer, principal accounting officer, controller,
or other persons performing similar functions, the Company will disclose the nature of such amendment or waiver, the name of the
person to whom the waiver was granted and the date of waiver in a Current Report on Form 8-K.
Board
Leadership Structure and Role in Risk Oversight
The
Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than
day-to-day operations. The Board’s primary responsibility is to oversee the management of the Company and, in so doing,
serve the best interests of the Company and its stockholders. The Board selects, evaluates and provides for the succession of
executive officers and, subject to stockholder election, directors. It reviews and approves corporate objectives and strategies,
and evaluates significant policies and proposed major commitments of corporate resources. The Board participates in decisions
that have a potential major economic impact on the Company and its stockholders. Management keeps the directors informed of Company
activity through regular written reports and presentations at Board and committee meetings.
The
Board of Directors is led by its Chairman, Mr. Peterson. Each of our Audit, Nominating and Compensation Committees provide oversight
and assess risk in their respective areas. In addition, the Board and each committee have an active role in overseeing management
of our Company’s risk. The Board regularly reviews information regarding our operations, credit, and liquidity, as well
as the risks associated with each.
Board
Committees
Standing
committees of the Board of Directors include an Audit Committee, a Compensation Committee, and a Nominating Committee.
Audit
Committee.
Messrs.
Mangiardi, Peterson and Pollack are currently the members of the Audit Committee, with Mr. Pollack serving as Chairman.
The
Board of Directors has determined that Mr. Pollack qualifies as an “audit committee financial expert” as defined in
Item 407(d)(5) of Regulation S-K.
The
Audit Committee operates pursuant to a written charter (the “Audit Committee Charter”), a current copy of which is
publicly available on the investor relations portion of the Company’s website at
www.pressurebiosciences.com
. Under
the provisions of the Audit Committee Charter, the primary functions of the Audit Committee are to assist the Board of Directors
with the oversight of (i) the Company’s financial reporting process, accounting functions, and internal controls, and (ii)
the qualifications, independence, appointment, retention, compensation, and performance of the Company’s independent registered
public accounting firm. The Audit Committee is also responsible for the establishment of “whistle-blowing” procedures,
and the oversight of other compliance matters. The Audit Committee held four (4) meetings during fiscal 2015.
Compensation
Committee.
General
Messrs.
Mangiardi, Peterson and Pollack are currently the members of the Compensation Committee, with Mr. Mangiardi serving as chairman.
The Compensation Committee operates pursuant to a written charter, a current copy of which is publicly available on the investor
relations portion of the Company’s website at www.pressurebiosciences.com. The primary functions of the Compensation Committee
include (i) reviewing and approving our executive compensation, (ii) reviewing the recommendations of the President and Chief
Executive Officer regarding the compensation of our executive officers, (iii) evaluating the performance of the President and
Chief Executive Officer, (iv) overseeing the administration and approval of grants of stock options and other equity awards under
our equity incentive plans, and (v) recommending compensation for our Board of Directors and each committee thereof for review
and approval by the Board of Directors. The Compensation Committee held one (1) meeting during fiscal 2015.
The
Compensation Committee may form and delegate authority to one or more subcommittees as it deems appropriate from time to time
under the circumstances (including (a) a subcommittee consisting of a single member and (b) a subcommittee consisting of at least
two members, each of whom qualifies as a “non-employee director,” as such term is defined from time to time in Rule
16b-3 promulgated under the Exchange Act, and an “outside director,” as such term is defined from time to time in
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder).
Compensation
Objectives
In
light of the relatively early stage of commercialization of our products, we recognize the importance of attracting and retaining
key employees with sufficient experience, skills, and qualifications in areas vital to our success, such as operations, finance,
sales and marketing, research and development, engineering, and individuals who are committed to our short- and long-term goals.
The Compensation Committee has designed our executive compensation programs with the intent of attracting, motivating, and retaining
experienced executives and, subject to our limited financial resources, rewarding them for their contributions by offering them
a competitive base salary, potential for annual cash incentive bonuses, and long-term equity-based incentives, typically in the
form of stock options. The Compensation Committee strives to balance the need to retain key employees with financial prudence
given our history of operating losses, limited financial resources and the early stage of our commercialization.
Executive
Officers and Director Compensation Process
The
Compensation Committee considers and determines executive compensation according to an annual objective setting and measurement
cycle. Specifically, corporate goals for the year are initially developed by our executive officers and are then presented to
the Board of Directors and Compensation Committee for review and approval. Individual goals are intended to focus on contributions
that facilitate the achievement of the corporate goals. Individual goals are first proposed by each executive officer, other than
the President and Chief Executive Officer, then discussed by the entire senior executive management team and ultimately compiled
and prepared for submission to the Board of Directors and the Compensation Committee, by the President and Chief Executive Officer.
The Compensation Committee sets and approves the goals for the President and Chief Executive Officer. Generally, corporate and
individual goals are set during the first quarter of each calendar year. The objective setting process is coordinated with our
annual financial planning and budgeting process so our Board of Directors and Compensation Committee can consider overall corporate
and individual objectives in the context of budget constraints and cost control considerations. Annual salary increases, bonuses,
and equity awards, such as stock option grants, if any, are tied to the achievement of these corporate and individual performance
goals as well as our financial position and prospects.
Under
the annual performance review program, the Compensation Committee evaluates individual performance against the goals for the recently
completed year. The Compensation Committee’s evaluation generally occurs in the first quarter of the following year. The
evaluation of each executive (other than the President and Chief Executive Officer) begins with a written self-assessment submitted
by the executive to the President and Chief Executive Officer. The President and Chief Executive Officer then prepares a written
evaluation based on the executive’s self-assessment, the President and Chief Executive Officer’s evaluation, and input
from others within the Company. This process leads to a recommendation by the President and Chief Executive Officer for a salary
increase, bonus, and equity award, if any, which is then considered by the Compensation Committee. In the case of the President
and Chief Executive Officer, the Compensation Committee conducts his performance evaluation and determines his compensation, including
salary increase, bonus, and equity awards, if any. We generally expect, but are not required, to implement salary increases, bonuses,
and equity awards, for all executive officers, if and to the extent granted, by April 1 of each year.
Non-employee
director compensation is set by our Board of Directors upon the recommendation of the Compensation Committee. In developing its
recommendations, the Compensation Committee is guided by the following goals: compensation should be fair relative to the required
services for directors of comparable companies in our industry and at our company’s stage of development; compensation should
align directors’ interests with the long-term interest of stockholders; the structure of the compensation should be simple,
transparent, and easy for stockholders to understand; and compensation should be consistent with the financial resources, prospects,
and competitive outlook for the Company.
In
evaluating executive officer and director compensation, the Compensation Committee considers the practices of companies of similar
size, geographic location, and market focus. In order to develop reasonable benchmark data, the Compensation Committee has referred
to publicly available sources such as Salary.com and the BioWorld Survey. While the Compensation Committee does not believe benchmarking
is appropriate as a stand-alone tool for setting compensation due to the unique aspects of our business objectives and current
stage of development, the Compensation Committee generally believes that gathering this compensation information is an important
part of its compensation-related decision making process.
The
Compensation Committee has the authority to hire and fire advisors and compensation consultants as needed and approve their fees.
No advisors or compensation consultants were hired or fired in fiscal 2015.
The
Compensation Committee is also authorized to delegate any of its responsibilities to subcommittees or individuals as it deems
appropriate. The Compensation Committee did not delegate any of its responsibilities in fiscal 2015.
Nominating
Committee.
Messrs.
Mangiardi, Peterson and Pollack are currently the members of the Company’s Nominating Committee with Mr. Peterson serving
as Chairman. The Nominating Committee operates pursuant to a written charter, a current copy of which is publicly available on
the investor relations portion of the Company’s website at www.pressurebiosciences.com. The Nominating Committee held one
(1) meeting during fiscal year 2015.
The
primary functions of the Nominating Committee are to (i) identify, review, and evaluate candidates to serve as directors of the
Company, (ii) make recommendations of candidates to the Board of Directors for all directorships to be filled by the stockholders
or the Board of Directors, and (iii) serve as a focal point for communication between such candidates, the Board of Directors,
and management.
The
Nominating Committee may consider candidates recommended by stockholders as well as from other sources such as other directors
or officers, third party search firms, or other appropriate sources. For all potential candidates, the Nominating Committee may
consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional
skills and experience, independence, possible conflicts of interest, diversity, the extent to which the candidate would fill a
present need on the Board of Directors, and concern for the long-term interests of the stockholders. These criteria include whether
the candidate assists in achieving a mix of Board members that represents diversity of background and professional experience,
including with respect to ethnic background, age and gender. In general, persons recommended by stockholders will be considered
on the same basis as candidates from other sources. If a stockholder wishes to recommend a candidate for director for election
at the 2017 Annual Meeting of Stockholders, he or she must follow the procedures described below under “Stockholder Proposals.”
Audit
Committee Report
The
Audit Committee has reviewed and discussed the Company’s audited financial statements for the year ended December 31, 2015
with management of the Company. The Audit Committee also discussed with MaloneBailey LLP (“MaloneBailey”), the Company’s
independent registered public accounting firm for 2015, the matters required to be discussed by the Auditing Standards Board Statement
on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit
Committee has also received and reviewed the required written disclosures and a confirming letter from MaloneBailey under applicable
requirements of the Public Accounting Oversight Board regarding MaloneBailey’s independence, and has discussed the matter
with MaloneBailey.
Based
upon its review and discussions of the foregoing, the Audit Committee recommended to the Board of Directors that the Company’s
audited financial statements for the year ended December 31, 2015 be included in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2015.
Audit
Committee:
Kevin
A. Pollack, Chair
Vito
J. Mangiardi
Jeffrey
N. Peterson
2015
Director Compensation
The
following table sets forth certain information regarding compensation earned or paid to the Company’s directors during fiscal
year 2015.
Name
|
|
Fees
Earned or Paid in Cash (1)
|
|
|
Stock
Awards (1)
|
|
|
Option
Awards (2)(3)
|
|
|
Total
|
|
Vito
J. Mangiardi
|
|
$
|
40,000
|
|
|
$
|
-
|
|
|
$
|
29,149
|
|
|
$
|
69,149
|
|
Jeffrey
N. Peterson
|
|
|
60,000
|
|
|
|
-
|
|
|
|
52,361
|
|
|
|
112,361
|
|
Kevin A.
Pollack
|
|
|
40,000
|
|
|
|
-
|
|
|
|
29,149
|
|
|
|
69,149
|
|
Michael
S. Urdea
|
|
$
|
45,000
|
|
|
$
|
-
|
|
|
$
|
22,402
|
|
|
$
|
77,402
|
|
Our
non-employee directors receive the following compensation for service as a director:
(1)
Each director received a quarterly stipend of $10,000 for attending meetings. Mr. Peterson received $15,000/quarter for attending
and leading meetings as the Chairman of the Board of Directors. There is no limit to the number of meetings that can be called
for of our Board of Directors or committees. Dr. Urdea received an additional $5,000 for his role as Chairman of the Scientific
Advisory Board in 2015.
(2)
Amounts shown do not reflect compensation received by the directors. Instead, the amounts shown are the aggregate grant date fair
value as determined pursuant to FASB ASC 718, Compensation-Stock Compensation. Please refer to Note 2, xiii, “Accounting
for Stock-Based Compensation” in the Notes to the Consolidated Financial Statements for the fiscal year ended December 31,
2015, for the relevant assumptions used to determine the valuation of stock option grants.
(3)
The following table shows the total number of outstanding stock options and stock awards as of December 31, 2015 that have been
issued as director compensation as described in item 1 above.
Name
|
|
Aggregate
Number of Stock Options Outstanding
|
|
|
|
|
|
Vito
J. Mangiardi
|
|
|
258,000
|
|
Jeffrey
N. Peterson
|
|
|
452,250
|
|
Kevin A.
Pollack
|
|
|
258,000
|
|
Michael
S. Urdea, Ph. D.
|
|
|
220,500
|
|
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
Summary Compensation Table below sets forth the total compensation paid or earned for the fiscal years ended December 31, 2015
and 2014 for: (i) each individual serving as our chief executive officer (“
CEO
”) or acting in a similar capacity
during any part of fiscal 2015; and (ii) the other two most highly paid executive officers (collectively, the “
Named
Executive Officers
”) who were serving as executive officers at the end of fiscal 2015.
Name
and Principal Position
|
|
Fiscal
Year
|
|
|
Salary(1)
|
|
|
Bonus
|
|
|
Stock
Awards
|
|
|
Option
Awards(2)
|
|
|
Non-Qualified
Deferred Compensation Earning
|
|
|
All
other Compensation(3)
|
|
|
Total
|
|
Richard
T. Schumacher
|
|
|
2015
|
|
|
$
|
294,250
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
343,000
|
|
|
$
|
-
|
|
|
$
|
16,098
|
|
|
$
|
653,348
|
|
President,
CEO
|
|
|
2014
|
|
|
|
294,250
|
|
|
|
-
|
|
|
|
-
|
|
|
|
71,910
|
|
|
|
-
|
|
|
|
70,880
|
|
|
|
437,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edmund Ting,
Ph.D
|
|
|
2015
|
|
|
|
197,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
35,672
|
|
|
|
-
|
|
|
|
1,216
|
|
|
|
234,488
|
|
Senior Vice
President of Engineering
|
|
|
2014
|
|
|
|
197,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47,940
|
|
|
|
-
|
|
|
|
1,670
|
|
|
|
247,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander
Lazarev, Ph.D
|
|
|
2015
|
|
|
|
165,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,556
|
|
|
|
-
|
|
|
|
7,656
|
|
|
|
204,812
|
|
Vice President
of Research and Development
|
|
|
2014
|
|
|
|
165,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
35,955
|
|
|
|
-
|
|
|
|
7,910
|
|
|
|
209,465
|
|
(1)
Salary refers to base salary compensation paid through our normal payroll process. No bonus was paid to any named executive officer
for 2015 or 2014.
(2)
Amounts shown do not reflect compensation received by the Named Executive Officers. Instead, the amounts shown are the aggregate
grant date fair value as determined pursuant to FASB ASC 718, Compensation-Stock Compensation. Please refer to Note 2, xiii, “Accounting
for Stock-Based Compensation” in the accompanying Notes to Consolidated Financial Statements for the fiscal year ended December
31, 2015, for the relevant assumptions used to determine the valuation of stock option grants.
(3)
“All Other Compensation” includes our Company match to the executives’ 401(k) contribution and premiums paid
on life insurance for the executives. Both of these benefits are available to all of our employees. In the case of Mr. Schumacher,
“All Other Compensation” also includes $13,448 in premiums we paid for a life insurance policy to which Mr. Schumacher’s
wife is the beneficiary. In 2014, Mr. Schumacher received $50,927 for unused earned time off. “All Other Compensation”
for Dr. Lazarev includes $6,000 paid to Dr. Lazarev in lieu of his participation in the medical benefit plan offered by the Company.
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth certain information regarding outstanding stock options awards for each of the Named Executive Officers
as of December 31, 2015.
|
|
Option
Awards
|
|
|
|
|
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable (1)
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
Richard
T. Schumacher
|
|
|
70,000
|
|
|
|
-
|
|
|
$
|
1.00
|
|
|
2/12/2017
|
President,
CEO
|
|
|
75,000
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
3/12/2019
|
|
|
|
15,000
|
|
|
|
-
|
|
|
$
|
1.00
|
|
|
9/09/2021
|
|
|
|
30,000
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
3/13/2022
|
|
|
|
75,000
|
|
|
|
-
|
|
|
$
|
0.40
|
|
|
5/14/2023
|
|
|
|
216,670
|
|
|
|
83,330
|
(2)
|
|
$
|
0.30
|
|
|
9/24/2024
|
|
|
|
381,944
|
|
|
|
868,056
|
(3)
|
|
$
|
0.40
|
|
|
12/31/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edmund Y.
Ting, Ph.D
|
|
|
12,000
|
|
|
|
-
|
|
|
$
|
1.00
|
|
|
2/12/2017
|
Senior Vice
President of Engineering
|
|
|
42,000
|
|
|
|
-
|
|
|
$
|
.60
|
|
|
3/12/2019
|
|
|
|
15,000
|
|
|
|
-
|
|
|
$
|
1.00
|
|
|
9/09/2021
|
|
|
|
17,500
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
3/13/2022
|
|
|
|
54,000
|
|
|
|
-
|
|
|
$
|
0.40
|
|
|
5/14/2023
|
|
|
|
144,447
|
|
|
|
55,553
|
(2)
|
|
$
|
0.30
|
|
|
9/24/2024
|
|
|
|
39,722
|
|
|
|
90,278
|
(3)
|
|
$
|
0.40
|
|
|
12/31/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander
V. Lazarev, Ph.D
|
|
|
10,000
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
2/12/2017
|
Vice President
of Research & Development
|
|
|
35,000
|
|
|
|
-
|
|
|
$
|
.60
|
|
|
3/12/2019
|
|
|
|
15,000
|
|
|
|
-
|
|
|
$
|
1.00
|
|
|
9/09/2021
|
|
|
|
15,000
|
|
|
|
-
|
|
|
$
|
0.60
|
|
|
3/13/2022
|
|
|
|
45,000
|
|
|
|
-
|
|
|
$
|
0.40
|
|
|
5/14/2023
|
|
|
|
108,335
|
|
|
|
41,665
|
(2)
|
|
$
|
0.30
|
|
|
9/24/2024
|
|
|
|
35,139
|
|
|
|
79,861
|
(3)
|
|
$
|
0.40
|
|
|
12/31/2025
|
(1)
|
All
unvested stock options listed in this column were granted to the Named Executive Officer pursuant to our 2005 Equity Incentive
Plan, our 2013 Equity Incentive Plan, and our 2015 Non-Qualified Stock Option Plan. All options expire ten years after the
date of grant. Unvested stock options become fully vested and exercisable upon a change of control of our company.
|
|
|
(2)
|
Options
to purchase shares of Common Stock were granted on September 24, 2014 to each of the
Named Executive Officers, of which 3/36
th
of the options vest at Dec. 31,
2014 with the remainder vesting at 1/33
th
per month for the remainder of the
36-month vesting period.
|
(3)
|
Options
to purchase shares of Common Stock were granted on December 31, 2015 to each of the Named Executive Officers, of which 1/36
th
of the options vest per month for the 36-month vesting period.
|
Retirement
Plan
All
employees, including the named executive officers, may participate in our 401(k) Plan. Under the 401(k) Plan, employees may elect
to make before tax contributions of up to 60% of their base salary, subject to current Internal Revenue Service limits. The 401(k)
Plan does not permit an investment in our Common Stock. We match employee contributions up to 50% of the first 2% of the employee’s
earnings. Our contribution is 100% vested immediately.
Severance
Arrangements
Each
of Mr. Schumacher, Dr. Ting, Dr. Lazarev, and Dr. Lawrence, executive officers of the Company, are entitled to receive a severance
payment if terminated by us without cause. The severance benefits would include a payment in an amount equal to one year of such
executive officer’s annualized base salary compensation plus accrued paid time off. Additionally, the officer will be entitled
to receive medical and dental insurance coverage for one year following the date of termination.
Change-in-Control
Arrangements
Pursuant
to severance agreements with each of Mr. Schumacher, Dr. Ting, Dr. Lazarev and Dr. Lawrence, each such executive officers, is
entitled to receive a change of control payment in an amount equal to one year (other than Mr. Schumacher) of such executive officer’s
annualized base salary compensation, accrued paid time off, and medical and dental coverage, in the event of a change of control
of our company. In the case of Mr. Schumacher, his payment is equal to two years of annualized base salary compensation, accrued
paid time off, and two years of medical and dental coverage.
Pursuant
to our 2005 Equity Incentive Plan, 2013 Equity Incentive Plan and 2015 Nonqualified Plan, any unvested stock options held by a
named executive officer will become fully vested upon a change in control (as defined in the 2005 Equity Incentive Plan and the
2013 Equity Incentive Plan).
PROPOSAL
NO. 2
RATIFICATION
OF THE APPOINTMENT OF THE
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
You
are being asked to ratify the Board of Directors’ appointment of MaloneBaily LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2016. MaloneBaily LLP has served as the Company’s independent registered public
accounting firm since July 1, 2015. A representative of MaloneBaily LLP is expected to attend the Meeting and will have an opportunity
to make a statement and respond to appropriate questions. Refer to the Audit Committee Report and the information under the heading
“Independent Registered Public Accounting Firm” in this proxy statement for information regarding services performed
by, and fees paid to, Marcum LLP (our previous independent registered public accounting firm) during the year 2014.
Our
Bylaws do not require that our stockholders ratify the appointment of MaloneBaily LLP as our independent registered public accounting
firm. However, we are submitting the proposal for ratification as a matter of good corporate governance. If our stockholders do
not ratify the appointment, the Audit Committee will reconsider whether or not to retain MaloneBaily LLP. Even if the appointment
is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if the Audit Committee
determines that such a change would be in the best interests of the Company and its stockholders.
Vote
Required
The
affirmative vote of the holders of a majority of the votes cast at the Meeting is required for the approval of Proposal No. 2.
Board
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSAL NO. 2, THE RATIFICATION OF
THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee appointed MaloneBaily LLP (“MaloneBaily”), an independent registered public accounting firm, to audit
the Company’s consolidated financial statements for the fiscal year ending December 31, 2015. In prior years Marcum LLP,
and its predecessor UHY LLP (“UHY”), had served as the Company’s independent registered public accounting firm
since September 14, 2006. A representative of MaloneBaily will be available during the Meeting to make a statement if such representative
desires to do so and to respond to questions.
Independent
Registered Public Accounting Fees
The
following is a summary of the fees billed to the Company by Marcum, the Company’s previous independent registered public
accounting firm, for the fiscal year ended December 31, 2015 and 2014:
|
|
Fiscal
2015
Fees
|
|
|
Fiscal
2014
Fees
|
|
Audit Fees
|
|
$
|
126,620
|
|
|
$
|
140,184
|
|
Audit-Related Fees
|
|
|
20,354
|
|
|
|
20,762
|
|
Tax and Other Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
146,974
|
|
|
$
|
160,946
|
|
Audit
Fees
. Consist of aggregate fees billed for professional services rendered for the audit of the Company’s consolidated
financial statements and review of the interim consolidated financial statements included in quarterly reports, as well as services
that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings
or engagements.
Audit-Related
Fees
. Consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of
the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
Fees billed for 2015 were associated with the S-8 filing and while 2014 fees were associated with derivative valuations. There
were no other fees for services rendered by Marcum other than those described above.
Audit
Committee Policy on Pre-Approval of Services
The
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered
public accounting firm. These services may include audit services, audit-related services, tax services, and other services. Pre-approval
is generally provided for up to one year. The Audit Committee may also pre-approve particular services on a case-by-case basis.
PROPOSAL
NO. 3
APPROVAL
OF AMENDMENT TO THE COMPANY’S ARTICLES OF ORGANIZATION
TO
INCREASE THE AUTHORIZED COMMON STOCK
We
require additional capital to fund our continuing operations. We may not have enough authorized but unissued shares of Common
Stock to raise needed capital through an equity financing. An equity financing may be the best or only financing alternative available
to us and there may not be sufficient time to seek stockholder approval of a specific equity financing transaction given our limited
cash resources.
In
addition, we do not have enough authorized but unissued shares of Common Stock available to satisfy all of our obligations under
equity incentive plans, outstanding convertible securities, convertible notes and warrants. As of the Record Date, there were
approximately 30.5 million shares of Common Stock issued and outstanding. In addition, as of the Record Date, there were approximately
15.1 million shares of Common Stock issuable upon conversion of the Company’s Series D Preferred Stock, Series G Preferred
Stock, Series J Preferred Stock, Series H Preferred Stock and Series K Preferred Stock, 51.8 million shares of Common Stock reserved
for issuance upon exercise of or conversion of outstanding warrants and convertible loans, 5.3 million shares of Common Stock
reserved for issuance upon exercise of outstanding stock options, and additional 4.5 million shares reserved for issuance for
future awards under our 2005 Equity Incentive Plan, our 2013 Equity Incentive Plan, and our 2015 Non-Qualified Stock Option Plan.
Based on the number of outstanding and reserved shares of Common Stock described above, in order to satisfy all such obligations,
we would need to increase the authorized shares of Common Stock.
For
these reasons, we are seeking stockholder approval to authorize our Board of Directors, in its sole discretion, to amend Article
IV of our Articles of Organization to increase the number of authorized shares of Common Stock of the Company by up to an additional
50 million through one or more amendments to our Articles of Organization made during the twelve months after the date of this
Meeting. This approval will give our Board of Directors additional flexibility to act in the best interests of the Company and
our stockholders.
If
Proposal No. 3 is approved by the stockholders, the Board of Directors will have the authority, in its sole discretion and without
further action by stockholders, to increase the authorized shares of Common Stock through one or more amendments to the Articles
of Organization at any time within twelve months from the Meeting by up to an additional 50 million shares of Common Stock. Assuming
that the stockholders approve the amendment to increase the number of authorized shares of Common Stock, and subsequently, our
Board of Directors decides to move forward to implement the amendment, the amendment will be effective upon its filing with the
Secretary of the Commonwealth of the Commonwealth of Massachusetts. Our Board of Directors reserves the right, notwithstanding
stockholder approval and without further action by the stockholders, to decide not to proceed with increasing the number of shares
of authorized Common Stock if our Board of Directors determines, in its sole discretion, that such actions are in the best interests
of the Company and its stockholders. In addition, even if this Proposal No. 3 is approved by the stockholders, the Board of Directors
will not effectuate the increase to the authorized number of shares of Common Stock if both: (a) Proposal No. 4 is approved by
the stockholders; and (b) the Board of Directors effectuates a reverse stock split of our Common Stock at any time within twelve
months following the Meeting.
If
approved by our stockholders, the additional authorized shares of Common Stock would be available for issuance for any proper
corporate purpose as determined by our Board of Directors without further approval by the stockholders, except as required by
law. Our Board of Directors is seeking approval of the amendment to our Articles of Organization to increase our authorized Common
Stock now because opportunities requiring prompt action may arise in the near future and our Board of Directors believes the delay
and expense in seeking stockholder approval for additional authorized Common Stock at that time could deprive the Company and
our stockholders of the ability to benefit effectively from such opportunities. Other than as described below, as of the date
of this proxy statement, we have no current intended uses for the additional shares that would be available for issuance following
approval of the amendment to our Articles of Organization to increase our authorized Common Stock by our stockholders, we continue
to actively seek additional financing opportunities, including through the issuance of our equity securities, and a transaction
involving the issuance of additional shares of our Common Stock could arise at any time following the date of this proxy statement.
In addition, the Company may be required to issue additional shares of Common Stock in excess of the current number of authorized
but unissued shares under the terms of our equity incentive plans, outstanding convertible securities, convertible notes and warrants.
The
additional shares of Common Stock to be authorized will have rights identical to our currently outstanding Common Stock. The proposed
amendment will not affect the par value of the Common Stock, which will remain at $0.01 per share. Under our Articles of Organization,
our stockholders do not have preemptive rights to subscribe to additional securities that we may issue; in other words, current
holders of Common Stock do not have a prior right to purchase any new issue of our capital stock to maintain their proportionate
ownership of Common Stock. If we issue additional shares of Common Stock or other securities convertible into Common Stock in
the future, it will dilute the voting rights of existing holders of Common Stock and will also dilute earnings per share and book
value per share.
Anti-Takeover
Effects
The
proposed amendment to our Articles of Organization to increase the number of our authorized shares of Common Stock could, under
certain circumstances, have an anti-takeover effect, although this is not the intent of the Board of Directors. For example, it
may be possible for the Board of Directors to delay or impede a takeover or transfer of control of the Company by causing such
additional authorized shares to be issued to holders who might side with the Board of Directors in opposing a takeover bid that
the Board of Directors determines is not in the best interests of the Company and its stockholders. The amendment to our Articles
of Organization therefore may have the effect of discouraging unsolicited takeover attempts. By potentially discouraging initiation
of any such unsolicited takeover attempt, the proposed amendment may limit the opportunity for our stockholders to dispose of
their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. The
proposed amendment may have the effect of permitting our current management, including the current Board of Directors, to retain
its position, and place it in a better position to resist changes that stockholders may wish to make if they are dissatisfied
with the conduct of the Company’s business. The Board of Directors, however, is not aware of any attempt to take control
of the Company and the Board of Directors has not presented this proposal with the intent that it be utilized as a type of anti-takeover
device. There are other provisions currently in the Company’s Articles of Organization, Bylaws and Massachusetts law which
could have an anti-takeover effect. A summary of these provisions is set forth below.
Massachusetts Law
Control
Share Acquisition Law.
Under Chapter 110D of the Massachusetts General Laws governing “control share acquisitions,”
any stockholder of certain publicly-held
Massachusetts corporations
who
acquires
certain ranges
of
voting power
—
one-fifth
or more but less than one-third of all voting power, one- third or more but less than a majority of all voting power, or
a majority or more of all voting power — may not (except in certain transactions) vote such stock
unless
the stockholders (excluding the shares held by the interested stockholders) of the corporation so authorize. As permitted
by Chapter 110D, our Bylaws include a provision which excludes the Company from the applicability of that statute.
Business
Combination Statute
. Chapter 110F of the Massachusetts General Laws, entitled “Business Combinations with Interested
Shareholders,” applies to publicly-held Massachusetts corporations with 200 or more stockholders of record. Generally, this
statute prohibits such Massachusetts corporations from engaging in a
“business combination”
with an “interested shareholder” for a period of three years following the date of the transaction in which
the person becomes an
interested shareholder unless
(a) the
interested
shareholder obtains
the
approval
of the
corporation’s
Board of Directors prior to becoming an interested shareholder; (b) the interested shareholder acquires at least 90% of
the voting stock of the corporation (excluding shares held by certain affiliates of the
corporation)
outstanding at the time he becomes an interested shareholder; or (c) the business combination is both approved by the Board
of Directors and authorized at an annual or special meeting of stockholders by the holders of at least
two-thirds
of the
outstanding voting stock
of the
corporation
(excluding shares held
by
the
interested shareholder). An “interested
shareholder” is a person who, together with affiliates and associates, owns (or at any time within the prior three years
did
own) 5% or more of the outstanding voting stock of the corporation. A
“business
combination”
includes, among other transactions, a merger, stock or asset sale
and
other transactions resulting in a financial benefit to the stockholder. Our Articles of Organization and Bylaws do not
expressly provide for opting out of
the
provisions of Chapter 110F. As a result, the
application of this statute to the Company could discourage or make it more difficult for any person or group of persons to attempt
to obtain control over the Company. We may at any time amend our Articles of Organization or Bylaws to elect not to be governed
by Chapter 110F, by a vote of the holders of a majority of our outstanding Common Stock, but such an amendment would not be effective
for twelve months and would not apply to a business combination with any person who became an interested shareholder prior to
the date of the amendment.
Certain
Provisions of the Company’s Articles of Organization, Bylaws and Shareholder Rights Plan
Our
Articles of Organization include several provisions which may render more difficult an unfriendly tender offer, proxy contest,
merger or other change in control of our ownership.
Preferred
Stock
. Our Articles of Organization permit our Board of Directors to issue preferred stock in one or more series and to fix
the rights, preferences, privileges and restrictions thereof, without further vote or action by the stockholders. The issuance
of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company and may adversely
affect the voting and other rights of the holders of our Common Stock.
Classification
of Board of Directors
. Our Articles of Organization provide for the classification of our Board of Directors into three classes,
with the classes being elected for staggered three-year terms. At each annual meeting of stockholders, directors will be elected
to succeed those in the class whose term then expires, and each elected director shall serve for a term expiring at the third
succeeding annual meeting of stockholders after such director’s election, and until the director’s successor is elected
and qualified. Thus, directors stand for election only once in three years. This provision also restricts the ability of stockholders
to enlarge
the
Board of Directors. Changes in the number of directors may be effected
by a vote of a majority of the Continuing Directors (as defined in our Articles of Organization) or by the stockholders by vote
of at least 80% of our outstanding Common Stock, voting as a single class. Under this provision, directors may only be removed
with or without cause by the affirmative vote of the holders at least 80% of the combined voting power of the outstanding shares
of our Common Stock, voting together as a single class, or upon the vote of a majority of the Continuing Directors.
Fair
Price Provision.
Our Articles of Organization contain a “Fair Price Provision”
that
is
intended
to
protect stockholders
who
do not
tender their
shares
in a takeover
bid by guaranteeing them a minimum price for their shares in any subsequent attempt to purchase such remaining shares at a price
lower than
the
acquirer’s original acquisition price. The Fair Price Provision
requires the affirmative vote of the holders of at least 80% of our outstanding Common Stock for certain business combinations
with a Related Person (as defined in our Articles of Organization), unless specified price criteria and procedural requirements
are met or the business combination is approved by a majority of the Continuing Directors. A Related Person includes a person
who, together with affiliates and associates beneficially owns more than 5% of the Company’s outstanding Common
Stock.
Indemnification
Provision
. Our Articles of Organization provide that we may, either in our Bylaws or by contract, provide for the indemnification
of our directors, officers, employees and agents, by whomever elected or appointed, to the fullest extent permitted by applicable
law, as it may be amended from time to time.
No
Appraisal Rights.
Under the Massachusetts Business Corporation Act, stockholders will not be entitled to appraisal rights
with respect to the proposed amendment to our Articles of Organization to increase the number of our authorized shares of Common
Stock, and we do not intend to independently provide stockholders with any such right.
Vote
Required
The
affirmative vote of the holders of two-thirds of the shares of the Company’s Common Stock issued and outstanding and entitled
to vote is required to approve the amendment of our Articles of Organization to increase the number of authorized shares of Common
Stock by up to 50 million shares.
Board
Recommendation
THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSAL NO. 3, THE APPROVAL OF THE AMENDMENT TO OUR ARTICLES
OF ORGANIZATION TO INCREASE THE NUMBER OF OUR AUTHORIZED SHARES OF COMMON STOCK BY UP TO 50 MILLION SHARES.
PROPOSAL
NO. 4
APPROVAL
OF AMENDMENT TO THE COMPANY’S ARTICLES OF ORGANIZATION TO EFFECT A REVERSE STOCK SPLIT
Introduction
Our
Board of Directors is recommending that our stockholders approve an amendment to our Articles of Organization to effect a reverse
stock split of the Company’s outstanding shares of Common Stock at a ratio within a range of 1:2 to 1:20 for the purpose
of assisting the Company in meeting the listing requirements of the Nasdaq Capital Market or another exchange. If this proposal
is approved, our Board of Directors or a committee thereof will have the authority and discretion to decide, within twelve months
from the Meeting, whether to implement the split and the exact amount of the split within this range, if it is to be implemented.
If our Board of Directors decides to implement the split, it will become effective upon the filing of an amendment to our Articles
of Organization with the Secretary of the Commonwealth of the Commonwealth of Massachusetts (the “Effective Date”).
If the reverse stock split is implemented, the number of issued and outstanding shares of Common Stock would be reduced in accordance
with the exchange ratio selected by the Board of Directors or committee thereof. The total number of authorized shares of Common
Stock would remain unchanged. The form of amendment to our Articles of Organization to effect the reverse stock split is attached
as
Annex A
to this proxy statement.
Purpose
and Background of the Reverse Stock Split
The
primary objective in proposing the reverse stock split is to raise the per share trading price of our Common Stock for the purpose
of assisting the Company in meeting the listing requirements of the Nasdaq Capital Market or another exchange. In addition, the
reverse split would also have the effect of increasing the number of shares of Common Stock available for future issuance, as
described below. Our Board of Directors believes that the reverse stock split would, among other things, (i) better enable us
to apply for the listing of our Common Stock on the Nasdaq Capital Market, and (ii) better enable us to raise funds to finance
our operations. Our Board of Directors believes implementing a reverse split within the range of 1:2 to 1:20 is in the best interests
of the Company if done for assisting the Company in meeting the listing requirements of the Nasdaq Capital Market or another exchange.
Our
Common Stock is currently traded over-the-counter on the OTC Markets QB exchange. The closing sale price of our
Common Stock on October 28, 2016 was $0.32 per share. Our Board of Directors believes that a reverse stock split could help us
meet the listing requirements necessary in order to list our Common Stock on the Nasdaq Capital Market or another exchange. Our
Board of Directors believes that the reverse stock split could also facilitate our efforts to raise capital to fund our operations.
As previously disclosed in our periodic reports filed with the SEC, we will need to raise additional capital and may elect to
do so through the issuance of equity securities. The reverse stock split would reduce the number of shares of Common Stock outstanding
without reducing the total number of authorized shares of Common Stock. As a result, we would have a larger number of authorized
but unissued shares from which to issue additional shares of Common Stock, or securities convertible or exercisable into shares
of Common Stock, in equity financing transactions.
We
currently have no immediate intended uses for the additional shares that would be available for issuance following the reverse
stock split. However, based on our current business plan, we will require significant additional capital to fund our operations.
As of the date of this proxy statement, however, we have no such plans, agreements or understandings in place with respect to
any potential sources of funds. The purpose of seeking stockholder approval of a range of exchange ratios from 1:2 to 1:20 (rather
than a fixed exchange ratio) is to provide us with the flexibility to achieve the desired results of the reverse stock split.
If our stockholders approve this proposal, our Board of Directors or a committee thereof would effect a reverse stock split only
upon the Board of Directors or committee’s determination that a reverse stock split would be in the best interests of the
Company at that time. If our Board of Directors were to effect a reverse stock split, the Board of Directors would set the timing
for such a split and select the specific ratio within the range of 1:2 to 1:20. No further action on the part of stockholders
would be required to either implement or abandon the reverse stock split. If our stockholders approve the proposal, and the Board
of Directors or a committee of the Board of Directors determines to effect the reverse stock split, we would communicate to the
public, prior to the Effective Date, additional details regarding the reverse stock split, including the specific ratio selected
by the Board or committee. If our Board of Directors or a committee thereof does not implement the reverse stock split within
twelve months from the Meeting, the authority granted in this proposal to implement the reverse stock split will terminate. Our
Board of Directors reserves its right to elect not to proceed with the reverse stock split if it determines, in its sole discretion,
that this proposal is no longer in the best interests of the Company.
Material
Effects of Proposed Reverse Stock Split
Our
Board of Directors believes that the reverse stock split will increase the price level of our Common Stock in order to, among
other things, help us apply for listing with the Nasdaq Capital Market or another exchange. The Board of Directors cannot predict,
however, the effect of the reverse stock split upon the market price for the Common Stock, and the history of similar reverse
stock splits for companies in like circumstances is varied. The market price per share of Common Stock after the reverse stock
split may not rise in proportion to the reduction in the number of shares of Common Stock outstanding resulting from the reverse
stock split, which would reduce the market capitalization of the Company. The market price per post-reverse stock split share
may not remain in excess of the minimum bid price as required by the Nasdaq Capital Market, or we may not otherwise meet the additional
requirements for listing on the Nasdaq Capital Market or another exchange. The market price of the Common Stock may also be based
on our performance and other factors, the effect of which our Board of Directors cannot predict.
The
reverse stock split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership
interests or proportionate voting power, except to the extent that the reverse stock split results in any of stockholders owning
a fractional share. In lieu of issuing fractional shares, stockholders who otherwise would be entitled to receive fractional shares
because they hold a number of shares not evenly divisible by the reverse stock split ratio will automatically be entitled to receive
an additional fraction of a share of Common Stock to round up to the next whole share.
The
principal effects of the reverse stock split will be that (i) the number of shares of Common Stock issued and outstanding will
be reduced from 30,468,862 shares as of October 28, 2016 to a range of approximately 15,234,431 (1:2 reverse split ratio) to 1,523,443
(1:20 reverse split ratio) shares, depending on the exact split ratio chosen by our Board of Directors or a committee thereof,
(ii) the conversion ratio for all outstanding shares of our issued and outstanding Preferred Stock will be adjusted such that
the number of shares of Common Stock issuable upon the conversion of such Preferred Stock will be reduced to one-half to one-twentieth
of the number of shares of Common Stock that were issuable upon conversion of such Preferred Stock immediately before the Effective
Date, (iii) all outstanding options and warrants entitling the holders thereof to purchase shares of Common Stock will enable
such holders to purchase, upon exercise of their options or warrants, one-half to one-twentieth of the number of shares of Common
Stock which such holders would have been able to purchase upon exercise of their options or warrants immediately preceding the
reverse stock split, at an exercise price equal to two to twenty times the exercise price specified before the reverse stock split,
resulting in the same aggregate price being required to be paid upon exercise thereof immediately preceding the reverse stock
split and (iv) the number of shares reserved for issuance pursuant to the 2005 Equity Incentive Plan, the 2013 Equity Incentive
Plan, and the 2015 Non-Qualified Stock Option Plan of additional awards will be reduced to one-half to one-twentieth of the number
of shares currently included in each such plan.
The
reverse stock split will not affect the par value of the Common Stock. As a result, on the Effective Date of the reverse stock
split, the stated capital on the Company’s balance sheet attributable to the Common Stock will be reduced to one-half to
one-twentieth of its present amount, depending on the exact amount of the split, and the additional paid-in capital account will
be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of the
Common Stock will be retroactively increased for each period because there will be fewer shares of Common Stock outstanding.
The
amendment will not change the terms of the Common Stock. After the reverse stock split, the shares of Common Stock will have the
same voting rights and rights to dividends and distributions and will be identical in all other respects to the Common Stock now
authorized. Each stockholder’s percentage ownership of the new Common Stock will not be altered except for the effect of
eliminating fractional shares. The Common Stock issued pursuant to the reverse stock split will remain fully paid and non-assessable.
The reverse stock split is not intended as, and will not have the effect of, a “going private transaction” covered
by Rule 13e-3 under the Exchange Act. Following the reverse stock split, we will continue to be subject to the periodic reporting
requirements of the Exchange Act.
The
reverse stock split will not change the number of issued and outstanding shares of our Series D Preferred Stock, Series G Preferred
Stock , Series H Preferred Stock, Series J Preferred Stock, and Series K Preferred Stock (collectively, the “Preferred Stock”)
or the terms of the Preferred Stock, except that the conversion ratio for all issued and outstanding shares of the Preferred Stock
will be adjusted upon the Effective Date, such that the number of shares of Common Stock issuable upon the conversion of the Preferred
Stock will be reduced to one-half to one-twentieth of the number of shares of Common Stock that were issuable upon conversion
of the Preferred Stock immediately before the Effective Date.
Because
we will not reduce the number of authorized shares of Common Stock, the overall effect will be an increase in authorized but unissued
shares of Common Stock as a result of the reverse stock split. These shares may be issued at the Board’s discretion. Any
future issuances will have the effect of diluting the percentage of stock ownership and voting rights of the present holders of
Common Stock. If the reverse stock split is not approved, we may be unable to raise additional capital. Because the reverse split
will not reduce the number of our authorized shares of Common Stock, the effect of such increase in our authorized but unissued
shares of Common Stock could be viewed, under certain circumstances, to have an anti-takeover effect, although this is not the
intent of the Board of Directors. For a discussion of potential anti-takeover effects, please see the discussion under the heading
“Anti-Takeover Effects” in Proposal No. 3.
The
reverse stock split would result in some stockholders owning “odd-lots” of less than 100 shares of our Common Stock.
Brokerage commissions and other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots”
of even multiples of 100 shares.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock Certificates
If
the reverse stock split is approved by our stockholders, and our Board of Directors or a committee thereof determines it is in
the best interests of the Company to effect the split, the reverse stock split would become effective at such time as the amendment
to our Articles of Organization, the form of which is attached as
Annex A
to this proxy statement, is filed with the Secretary
of the Commonwealth of the Commonwealth of Massachusetts. Upon the filing of the amendment, all of our existing Common Stock will
be converted into new Common Stock as set forth in the amendment.
As
soon as practicable after the Effective Date, stockholders will be notified that the reverse stock split has been effected. Computershare
Trust Company, our transfer agent, will act as exchange agent for purposes of implementing the exchange of stock certificates.
Holders of pre-reverse stock split shares will be asked to surrender to the exchange agent certificates representing pre-reverse
stock split shares in exchange for certificates representing post-reverse stock split shares in accordance with the procedures
to be set forth in a letter of transmittal that will be delivered to the Company’s stockholders. No new certificates will
be issued to a stockholder until the stockholder has surrendered to the exchange agent his, her or its outstanding certificate(s)
together with the properly completed and executed letter of transmittal. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES
AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO. Stockholders whose shares are held by their broker or representative
do not need to submit old share certificates for exchange. These shares will automatically reflect the new quantity of shares
based on the reverse stock split. Beginning on the Effective Date, each certificate representing pre-reverse stock split shares
will be deemed for all corporate purposes to evidence ownership of post-reverse stock split shares.
Fractional
Shares
The
Company will not issue fractional certificates for post-reverse stock split shares in connection with the reverse stock split.
In lieu of issuing fractional shares, stockholders who otherwise would be entitled to receive fractional shares because they hold
a number of shares not evenly divisible by the reverse stock split ratio will automatically be entitled to receive an additional
fraction of a share of Common Stock to round up to the next whole share.
Criteria
to be Used for Decision to Apply the Reverse Stock Split
If
the stockholders approve the reverse stock split, our Board of Directors or a committee thereof will be authorized to proceed
with the reverse stock split. In determining whether to proceed with the reverse stock split and setting the exact amount of split,
if any, our Board of Directors or committee thereof will consider a number of factors, including market conditions, existing and
expected trading prices of our Common Stock, the Nasdaq Capital Market listing requirements, the listing requirements of other
exchanges we may consider, our funding requirements and the amount of our authorized but unissued Common Stock.
No
Appraisal Rights
Under
the Massachusetts Business Corporation Act, stockholders will not be entitled to appraisal rights with respect to the proposed
amendment to our Articles of Organization to effect the reverse stock split, and we do not intend to independently provide stockholders
with any such right.
Certain
U.S. Federal Income Tax Consequences of the Reverse Stock Split
The
following summary describes certain material U.S. federal income tax consequences of the reverse stock split to holders of our
Common Stock.
Unless
otherwise specifically indicated herein, this summary addresses the tax consequences only to a beneficial owner of our Common
Stock that is a citizen or individual resident of the United States, a corporation organized in or under the laws of the United
States or any state thereof or the District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis
in respect of our Common Stock (a “U.S. holder”). This summary does not address all of the tax consequences that may
be relevant to any particular investor, including tax considerations that arise from rules of general application to all taxpayers
or to certain classes of taxpayers or that are generally assumed to be known by investors. This summary also does not address
the tax consequences to (i) persons that may be subject to special treatment under U.S. federal income tax law, such as banks,
insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations,
U.S. expatriates, persons subject to the alternative minimum tax, traders in securities that elect to mark to market and dealers
in securities or currencies, (ii) persons that hold our Common Stock as part of a position in a “straddle” or as part
of a “hedging,” “conversion” or other integrated investment transaction for federal income tax purposes,
or (iii) persons that do not hold our Common Stock as “capital assets” (generally, property held for investment).
This
summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, administrative
rulings and judicial authority, all as in effect as of the date of this proxy statement. Subsequent developments in U.S. federal
income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material
effect on the U.S. federal income tax consequences of the reverse stock split.
If
a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our
Common Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the
partner and the activities of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should
consult their own tax advisors regarding the U.S. federal income tax consequences of the reverse stock split.
U.S.
Holders
The
reverse stock split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss will
be recognized upon the reverse stock split. Accordingly, the aggregate tax basis in the Common Stock received pursuant to the
reverse stock split should equal the aggregate tax basis in the Common Stock surrendered, and the holding period for the Common
Stock received should include the holding period for the Common Stock surrendered.
Non-U.S.
Holders
The
discussion in this section is addressed to “non-U.S. holders.” A non-U.S. holder includes a beneficial owner of our
Common Stock that is a foreign corporation or who is a non-resident alien individual. Generally, non-U.S. holders will not recognize
any gain or loss upon the reverse stock split.
Each
stockholder should consult his, her or its own tax advisers concerning the particular U.S. federal tax consequences of the reverse
stock split, as well as the consequences arising under the laws of any other taxing jurisdiction, including any state, local or
foreign income tax consequences.
To
ensure compliance with Treasury Department Circular 230, each holder of Common Stock is hereby notified that: (a) any discussion
of U.S. federal tax issues in this proxy statement is not intended or written to be used, and cannot be used, by such holder for
the purpose of avoiding penalties that may be imposed on such holder under the Internal Revenue Code of 1986, as amended; (b)
any such discussion has been included by the Company in furtherance of the reverse stock split on the terms described herein;
and (c) each such holder should seek advice based on its particular circumstances from an independent tax advisor.
Vote
Required
The
affirmative vote of the holders of two-thirds of the shares of the Company’s Common Stock issued and outstanding and entitled
to vote is required to approve the amendment of our Articles of Organization to effect a reverse stock split of the Common Stock
in the range of 1:2 to 1:20.
Board
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSAL NO. 4, THE APPROVAL OF THE
AMENDMENT TO OUR ARTICLES OF ORGANIZATION TO EFFECT A REVERSE STOCK SPLIT.
PROPOSAL
NO. 5
NON-BINDING
ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION
The
Dodd-Frank Wall Street Reform and Consumer Protection Act amended Section 14A of the Securities Exchange Act of 1934 and related
SEC regulations require that, at least once every three years, we provide our shareholders 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 first held this vote, which is often referred to as the Say-on-Pay vote,
at a special meeting of shareholders held on December 12, 2013. At such meeting, our shareholders voted to hold the frequency
of our Say-on-Pay vote every three years. The Company will hold future non-binding advisory votes on the compensation of our named
executive officers every three years, at least until the next required vote of frequency of shareholder votes on the compensation
of our named executive officers. Such Say-on-Frequency vote must occur no later than the annual or other meeting of shareholders
held in the sixth calendar year after the immediately preceding Say-on-Frequency vote (annual meeting held on December 12, 2013).
An issuer could hold a Say-on-Frequency vote more frequently than every six years if it elects to do so.
As
described in more detail in Proposal No. 1, under Executive Compensation, we seek to closely align the interests of our Named
Executive Officers with the interests of our shareholders. Our compensation programs are designed to reward our Named Executive
Officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total
shareholder return. This vote is advisory, which means that the vote on executive compensation is not binding on the Company,
our Board of Directors or the Compensation Committee of the Board of Directors. However, we welcome input from our shareholders
regarding executive compensation and other matters related to the company’s success generally. We believe in a corporate
governance structure that is responsive to shareholder concerns and we view this vote as a meaningful opportunity to gauge
shareholder
approval of our executive compensation policies.
Vote
Required
The
affirmative vote of the holders of a plurality of the votes cast by stockholders at the Meeting is required to approve, on an
advisory basis, the executive of the Company’s Named Executive Officers.
Board
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSAL NO. 5, TO APPROVE AND VOTE
“
FOR”
THE FOLLOWING NON-BINDING RESOLUTION AT OUR MEETING:
“RESOLVED,
that the Company’s shareholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed
in the Company’s Proxy Statement for the 2016 Special Meeting of Shareholders pursuant to the compensation disclosure rules
of the Securities and Exchange Commission, including the Summary Compensation Table and the other related tables and disclosure.”
PROPOSAL
NO. 6
THE
ADJOURNMENT PROPOSAL
The
Meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are not
sufficient votes at the time of the Meeting to approve any of Proposal Nos. 1 through 5. The Meeting may be adjourned
from time to time to a date that is not more than 120 days after the original record date for the Meeting.
If,
at the Meeting, the number of shares of Common Stock present or represented and voting in favor of the approval of any of Proposal
Nos. 1 through 5 is not sufficient to approve that proposal, we currently intend to move to adjourn the Meeting in order to enable
our Board of Directors to solicit additional proxies for the approval of any of Proposal Nos. 1 through 5. In that event, we will
ask our stockholders to vote only upon the adjournment proposal, and not upon any of Proposal Nos. 1 through 5.
In
this proposal, we are asking our stockholders to authorize the holder of any proxy solicited by our Board of Directors to vote
in favor of granting discretionary authority to the proxy holders, and each of them individually, to adjourn the Meeting to another
time and place for the purpose of soliciting additional proxies. If the stockholders approve the adjournment proposal, we could
adjourn the Meeting and any adjourned session of the Meeting and use the additional time to solicit additional proxies, including
the solicitation of proxies from stockholders who have previously voted.
Vote
Required for Approval
If
the proposal to adjourn the Meeting for the purpose of soliciting additional proxies is submitted to the stockholders for approval,
such proposal will be approved by the affirmative vote of a majority of the votes cast at the Meeting.
Recommendation
of the Board
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “
FOR
” PROPOSAL NO. 6, AS TO THE ADJOURNMENT
OF THE MEETING IF NECESSARY OR APPROPRIATE TO SOLICIT ADDITIONAL PROXIES IN FAVOR OF THE APPROVAL OF ANY OF PROPOSAL NOS. 1 THROUGH
5.
OTHER
MATTERS
Transactions
with Related Persons
None.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than 10% of
the Company’s Common Stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC.
Based
solely on the Company’s review of the copies of such Forms and written representations from certain reporting persons, the
Company believes that all filings required to be made by the Company’s Section 16(a) reporting persons during the Company’s
fiscal year ended December 31, 2015 were made on a timely basis.
Other
Proposed Action
The
Board of Directors knows of no matters which may come before the Meeting other than the matters described in this proxy statement.
However, if any other matters should properly be presented to the Meeting, the persons named as proxies shall have discretionary
authority to vote the shares represented by the accompanying proxy in accordance with their own judgment.
Stockholder
Proposals
Proposals
which stockholders intend to present at the Company’s 2017 Annual Meeting of Stockholders (“2017 Annual Meeting”)
and wish to have included in the Company’s proxy materials pursuant to Rule 14a-8 promulgated under the Exchange Act, must
be received by the Company no later than July 24, 2017. If the date of next year’s annual meeting is moved by more than
30 days before or after the anniversary date of this year’s annual meeting, then the deadline for inclusion of a stockholder
proposal in the Company’s proxy materials is instead a reasonable time before the Company begins to print and send its proxy
materials for that meeting.
Stockholders
who wish to make a proposal at the Company’s 2017 Annual Meeting, other than one that will be included in the Company’s
proxy materials, should notify the Company no later than December 6, 2017 (assuming the meeting is held on December 21, 2017),
unless the date of next year’s annual meeting is moved by more than 30 days before or after the anniversary date of this
year’s annual meeting, in which case the notice must be received a reasonable time before the Company sends its proxy materials
for that meeting. If a proponent who wishes to present such a proposal at the 2017 Annual Meeting fails to notify the
Company by the proper date, the proxies solicited by the Board of Directors, with respect to such 2017 Annual Meeting, may grant
discretionary authority to the proxies named therein, to vote with respect to such matter if such matter is properly brought before
the 2017 Annual Meeting. If a stockholder makes a timely notification, the proxies may still exercise discretionary authority
under circumstances consistent with the proxy rules of the SEC.
Stockholders
may make recommendations to the Nominating Committee of candidates for its consideration as nominees for director at the 2017
Annual Meeting by submitting the name, qualifications, experience, and background of such person, together with a statement signed
by the nominee in which he or she consents to act as such, to the Nominating Committee, c/o Clerk, Pressure BioSciences, Inc.,
14 Norfolk Avenue, South Easton, MA 02375. Generally, under the Company’s Bylaws, notice of such recommendations must be
submitted in writing not later than 90 days prior to the anniversary date of the immediately preceding annual meeting or special
meeting in lieu thereof and must contain specified information and conform to certain requirements set forth in the Company’s
Bylaws. The Company will accept from stockholders recommendations for nominees for director to be considered in connection with
the 2017 Annual Meeting no later than September 21, 2017 (assuming the meeting is held on December 21, 2017). In addition, any
persons recommended should at a minimum meet the criteria and qualifications referred to in the Nominating Committee’s charter,
a copy of which may be obtained from the Company by written request sent to its principal executive offices. The Nominating Committee
may refuse to acknowledge the nomination of any person not made in compliance with the procedures set forth herein or in the Company’s
Bylaws.
Incorporation
by Reference
To
the extent that this Proxy Statement has been or will be specifically incorporated by reference into any filing by the Company
under the Securities Act of 1933, as amended, or the Exchange Act, the section of the Proxy Statement entitled “Audit Committee
Report” shall not be deemed to be so incorporated, unless specifically otherwise provided in any such filing.
Additional
Copies of our Annual Report on Form 10-K
Additional
copies of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and as filed with the SEC,
are available to stockholders without charge upon written request addressed to Clerk, Pressure BioSciences, Inc., 14 Norfolk Avenue,
South Easton, MA 02375.
Annex
A
Form
of Amendment to
Article
IV of Articles of Organization
to
Effect Reverse Stock Split
That,
the Corporation’s Restated Articles of Organization, as amended, be further amended by inserting the following in Article
IV:
Upon
the filing (the “Effective Time”) of these Articles of Amendment with the Secretary of the Commonwealth of the Commonwealth
of Massachusetts pursuant to the Massachusetts Business Corporation Act, each ______ (_____) shares of the Corporation’s
common stock, $.01 par value per share, issued and outstanding immediately prior to the Effective Time (the “Old Common
Stock”) shall automatically without further action on the part of the Corporation or any holder of Old Common Stock, be
reclassified, combined, converted and changed into one (1) fully paid and nonassessable share of common stock, $0.01 par value
per share (the “New Common Stock”), subject to the treatment of fractional share interests as described below (the
“Reverse Stock Split”). The conversion of the Old Common Stock into New Common Stock will be deemed to occur at the
Effective Time. From and after the Effective Time, certificates representing the Old Common Stock shall represent the number of
shares of New Common Stock into which such Old Common Stock shall have been converted pursuant to these Articles of Amendment.
No certificates representing fractional shares of New Common Stock will be issued in connection with the Reverse Stock Split.
Holders who otherwise would be entitled to receive fractional share interests of New Common Stock because they hold a number of
shares not evenly divisible by the Reverse Stock Split ratio will automatically be entitled to receive an additional fraction
of a share of New Common Stock to round up to the next whole share of New Common Stock in lieu of any fractional share created
as a result of such Reverse Stock Split.
Appendix
A – Common Stock
PROXY
PRESSURE
BIOSCIENCES, INC.
The
undersigned hereby appoints Dr. Nathan Lawrence or Ms. Maria Luna, acting singly, with full power of substitution, attorneys and
proxies to represent the undersigned at the Special Meeting in Lieu of Annual Meeting of Stockholders of Pressure BioSciences,
Inc. to be held on December 21, 2016 and at any adjournment(s) or postponement(s) thereof, with all power which the undersigned
would possess if personally present, and to vote all shares of stock which the undersigned may be entitled to vote at said meeting
upon the matters set forth in the Notice of and Proxy Statement for the Meeting in accordance with the following instructions
and with discretionary authority upon such other matters as may come before the Meeting. All previous proxies are hereby revoked.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION
IS INDICATED, IT WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTOR AND FOR PROPOSALS 2, 3, 4, 5, and 6, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT.
(IMPORTANT
- TO BE SIGNED AND DATED ON THE REVERSE SIDE)
[X]
Please indicate your vote below, as in this example.
The
Board of Directors recommends a vote “FOR” the election of the nominees as directors, and “FOR” Proposals
No. 2, 3, 4, and 5.
1.
To elect the following nominees as Class II Directors:
|
For
|
Withhold
|
Vito
Mangiardi
|
[ ]
|
[ ]
|
Kevin
Pollack
|
[ ]
|
[ ]
|
2.
To ratify the appointment of MaloneBaily LLP as the Company’s independent registered public accounting firm for 2016.
|
[ ]
|
FOR
|
|
[ ]
|
AGAINST
|
|
[ ]
|
ABSTAIN
|
3.
To approve an amendment to the Company’s articles of organization to increase the authorized number of shares of Common
Stock by up to 50,000,000 shares, such increase to be effected through one or more amendments to our articles of organization
to be filed with the Secretary of the Commonwealth of Massachusetts at the discretion of the Board of Directors at any time during
the twelve months following the date of the Meeting. Even if this Proposal No. 3 is approved, the Board of Directors will not
effectuate the increase to the authorized number of shares of Common Stock if both: (a) Proposal No. 4 is approved; and (b) the
Board of Directors effectuates a reverse stock split of our Common Stock at any time within twelve months following the Meeting.
|
[ ]
|
FOR
|
|
[ ]
|
AGAINST
|
|
[ ]
|
ABSTAIN
|
4.
To approve an amendment to the Company’s articles of organization to effect a reverse stock split of our Common Stock by
a ratio of not less than one-for-two and not more than one-for-twenty at any time within twelve months following the Meeting,
for the purpose of assisting the Company in meeting the listing requirements of the Nasdaq Capital Market or another exchange.
|
[ ]
|
FOR
|
|
[ ]
|
AGAINST
|
|
[ ]
|
ABSTAIN
|
5.
To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement accompanying
this notice.
|
[ ]
|
FOR
|
|
[ ]
|
AGAINST
|
|
[ ]
|
ABSTAIN
|
6.
To consider and vote on a proposal to approve the adjournment of the Meeting, if necessary or appropriate, to solicit additional
proxies, in the event that there are not sufficient votes at the time of such adjournment to approve any of Proposal Nos. 1 through
5.
|
[ ]
|
FOR
|
|
[ ]
|
AGAINST
|
|
[ ]
|
ABSTAIN
|
|
[ ]
|
MARK HERE
FOR ADDRESS CHANGE AND NOTE SUCH CHANGE AT LEFT
|
(Signatures
should be the same as the name printed hereon. Executors, administrators, trustees, guardians, attorneys, and officers of corporations
should add their titles when signing).
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