UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 26, 2019

 

Veritas Farms, Inc.
(Exact name of registrant as specified in charter)

 

Nevada   333-191251    90-1254190
(State or other Jurisdiction
of Incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

1512 E. Broward Blvd., Suite 300, Fort Lauderdale, FL   33301
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (561) 288-6603

 

 
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of Company under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None        

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

As used in this Current Report on Form 8-K, and unless otherwise indicated, the terms “the Company,” “Veritas Farms,” “we,” “us” and “our” refer to Veritas Farms, Inc. and its subsidiary.

 

Item 5.02           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of New Director

 

Effective September 26, 2019, Shea A. Smith joined our board of directors. The following is a brief description of the background and business experience of Mr. Smith.

 

Shea A. Smith, 44, has been a practicing certified public accountant for nearly twenty (20) years. Since 2003, he has been affiliated with the South Florida-based accounting and advisory firm, Berkowitz Pollack Brant, where he currently Director of Audit and Attest Services. Mr. Smith provides accounting, auditing and consulting services for businesses in a variety of industries and fields. Mr. Smith holds bachelor’s and master’s degrees in accounting from the University of Florida. We believe that given his extensive accounting and auditing experience, Mr. Shea will be a valuable addition to the Veritas Farms board of directors.

 

As is the case with our other non-employee directors, Dr. Bao Tran Doan and Kellie Newton, we will compensate Mr. Smith with an annual grant of stock options under our 2017 Incentive Stock Plan, in an amount and on terms to be determined by the board of directors. The initial grant to Mr. Smith is for an option to purchase 25,000 shares at an exercise price of $3.88 per share. The options vests in four (4) quarterly installments commencing ninety (90) days from the date of grant and is contingent upon his continued service on the board. As is the case with our other nonemployee directors, we have also agreed to reimburse Mr. Smith for out-of-pocket expenses incurred in connection with attending board and committee meetings and have entered into an indemnification agreement with him.

 

Director Independence

 

The Company’s board of directors has determined that each of our three non-employee directors, Dr. Bao Tran Doan, Kellie Newton and Shea A. Smith, is “independent” within the meaning of the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the listing standards of the Nasdaq Stock Market and the NYSE American. Moreover, our board of directors has determined that Mr. Smith qualifies as an “audit committee financial expert” as the term is defined by the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market and the NYSE American, based on his almost twenty (20) years of experience as a practicing certified public accountant.

 

Establishment of Board Committees

 

General

 

As our board of directors is now comprised of a majority of “independent” directors and Mr. Smith qualifies as an “audit committee financial expert,” the Veritas Farms board of directors has established three standing committees, an audit committee, a compensation committee and a nominating and corporate governance committee. Dr. Doan, Ms. Newton and Mr. Smith will be members of each of the committees.

 

Copies of the Charter for each of the audit committee, compensation committee and nominating and corporate governance committee are files as Exhibits 99.1, 99.2 and 99.3 to this Current Report on Form 8-K.

 

Audit Committee

 

The audit committee assists the Veritas Farms board of directors in its oversight of the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements, including (a) the quality and integrity of the Company’s financial statements; (b) the Company’s compliance with legal and regulatory requirements; (c) the independent auditors’ qualifications and independence; and (iv) the performance of our Company’s internal audit functions and independent auditors, as well as other matters which may come before it as directed by the board of directors. Further, the audit committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall:

 

be responsible for the appointment, compensation, retention, termination and oversight of the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;

 

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discuss the annual audited financial statements and the quarterly unaudited financial statements with management and the independent auditor prior to their filing with the SEC in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q;

 

review with the Company’s financial management on a period basis (a) issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles; and (b) the effect of any regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company;

 

monitor the Company’s policies for compliance with federal, state, local and foreign laws and regulations and the Company’s policies on corporate conduct;

 

maintain open, continuing and direct communication between the board of directors, the audit committee and our independent auditors; and

 

monitor our compliance with legal and regulatory requirements and shall have the authority to initiate any special investigations of conflicts of interest, and compliance with federal, state and local laws and regulations, including the Foreign Corrupt Practices Act, as may be warranted.

 

Mr. Smith will be the chairperson of the audit committee.

 

Compensation Committee

 

The compensation committee aids our board of directors in meeting its responsibilities relating to the compensation of the Company’s executive officers and to administer all incentive compensation plans and equity-based plans of the Company, including the plans under which Company securities may be acquired by directors, executive officers, employees and consultants. Further, the compensation committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall:

 

review periodically the Company’s philosophy regarding executive compensation to (a) ensure the attraction and retention of corporate officers; (b) ensure the motivation of corporate officers to achieve the Company’s business objectives, and (c) align the interests of key management with the long-term interests of our shareholders;

 

review and approve corporate goals and objectives relating to Chief Executive Officer compensation and other executive officers of Veritas Farms;

 

make recommendations to the board of directors regarding compensation for non-employee directors, and review periodically non-employee director compensation in relation to other comparable companies and in light of such factors as the compensation committee may deem appropriate; and

 

review periodically reports from management regarding funding the Company’s pension, retirement, long-term disability and other management welfare and benefit plans.

 

Dr. Doan will be the chairperson of our compensation committee.

 

Nominating and Corporate Governance Committee

 

The nominating and corporate governance committee recommends to the board of directors individuals qualified to serve as directors and on committees of the board of directors to advise the board of directors with respect to the board of directors composition, procedures and committees to develop and recommend to the board of directors a set of corporate governance principles applicable to the Company; and to oversee the evaluation of our board of directors and management.

 

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Further, the nominating and corporate governance committee, to the extent it deems necessary or appropriate, among its several other responsibilities shall:

 

recommend to the board of directors and for approval by a majority of independent directors for election by shareholders or appointment by the board of directors as the case may be, pursuant to our bylaws and consistent with the board of directors’ criteria for selecting new directors;

 

review the suitability for continued service as a director of each member of the board of directors when his or her term expires or when he or she has a significant change in status;

 

review annually the composition of the board of directors and to review periodically the size of the board of directors;

 

make recommendations on the frequency and structure of board of directors’ meetings or any other aspect of procedures of the board of directors;

 

make recommendations regarding the chairmanship and composition of standing committees and monitor their functions;

 

review annually committee assignments and chairmanships;

 

recommend the establishment of special committees as may be necessary or desirable from time to time; and

 

develop and review periodically corporate governance procedures and consider any other corporate governance issue.

 

Ms. Newton will be the chairperson of the nominating and corporate governance committee.

 

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits

 

Exhibit No   Description
     
99.1   Audit Committee Charter
     
99.2   Compensation Committee Charter
     
99.3   Nominating and Corporate Governance Committee Charter

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated:  September 27, 2019 VERITAS FARMS, INC.
     
  By: /s/ Alexander M. Salgado
    Alexander M. Salgado, Chief Executive Officer

 

 

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