UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
Filed by the Registrant x |
Filed by a party other than the Registrant ¨ |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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x |
Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
CELLECTAR 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 all boxes that apply):
x |
No fee required. |
¨ |
Fee paid previously with preliminary materials. |
¨ |
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Cellectar Biosciences, Inc.
100 Campus Drive
Florham Park, New Jersey 07932
Notice of 2022 Annual Meeting of Stockholders
To Be Held on June 15, 2022
The 2022 Annual Meeting of Stockholders (the “Annual
Meeting”) of Cellectar Biosciences, Inc. (the “Company”) will be held on Wednesday, June 15, 2022 at 10:00
A.M., local time, at the Company’s headquarters at 100 Campus Drive, Florham Park, New Jersey 07932, for the following purposes:
| 1. | To vote upon the election of two Class II directors; |
| 2. | To approve an increase in the number of shares of common stock available for issuance under our 2021 Stock Incentive Plan by 5,000,000
shares; |
| 3. | To approve an amendment to our Second Amended and Restated Certificate of Incorporation to effect a reverse stock split of our common
stock at a ratio between 1:5 and 1:10 if and when determined by our Board of Directors; |
| 4. | To ratify the appointment of Baker Tilly US, LLP (formerly known as Baker Tilly Virchow Krause, LLP) as our independent registered
public accounting firm for the fiscal year ending December 31, 2022; and |
| 5. | To transact such other business as may properly come before the Annual Meeting and at any adjournments or postponements of the Annual
Meeting in accordance with our by-laws. |
While we intend to hold the Annual Meeting in person,
we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials currently
have in place or may issue in light of the ongoing COVID-19 coronavirus pandemic. As a result, we may impose additional procedures or
limitations on meeting attendees, or may decide to hold the meeting in a different location or solely by means of remote communication
(i.e., a solely virtual meeting). We plan to announce any changes regarding the Annual Meeting by issuing a press release and filing the
press release as definitive additional soliciting material with the Securities and Exchange Commission at least 10 calendar days before
the meeting. The Company shall not be held liable for harm to any attendee, including a stockholder or guest, due to any of the foregoing.
Consistent with the guidelines set forth by the United States Center for Disease Control and Prevention as then in effect, we may require
all attendees, including all stockholders, to practice social distancing at the Annual Meeting.
Stockholders of record at the close of business
on Tuesday, April 26, 2022 are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.
Your vote is important. Whether or not you plan
to attend the Annual Meeting, please authorize proxies to cast your votes today by following the easy instructions on the proxy card enclosed with the proxy materials.
YOUR VOTE IS IMPORTANT
You may cast your vote over
the Internet, by telephone or by completing and mailing a proxy card. Returning the proxy does not deprive you of your right to attend
the Annual Meeting and to vote your shares in person.
Proxies forwarded by or for
banks, brokers or other nominees should be returned as requested by them. We encourage you to vote promptly to ensure your vote is represented
at the Annual Meeting, regardless of whether you plan to attend in person.
You can find detailed information
regarding voting in the section entitled “General Information” on pages 2 through 7 of the accompanying proxy statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF
PROXY MATERIALS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON JUNE 15, 2022
The Notice of the Annual Meeting, this Proxy
Statement and the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, are available at www.cellectar.com.
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By order of the Board of Directors |
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![](https://content.edgar-online.com/edgar_conv_img/2022/04/29/0001104659-22-053571_tm2212872d2_def14aimg01.jpg) |
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Chad J. Kolean, Secretary |
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Florham Park, New Jersey |
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April 29, 2022 |
TABLE OF CONTENTS
Cellectar Biosciences, Inc.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To be held on June 15, 2022
GENERAL INFORMATION
This proxy statement is furnished to the stockholders
of Cellectar Biosciences, Inc. (the “Company”, “Cellectar”, “we”, “us”, “our”)
in connection with the solicitation of proxies by and on behalf of the Board of Directors of the Company (the “Board of Directors”
or the “Board”) for use at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at the Company’s
corporate headquarters located at 100 Campus Drive, Florham Park, New Jersey 07932, on June 15, 2022 at 10:00 A.M., local time, and
at any adjournment or adjournments thereof.
While we intend to hold the Annual Meeting in person,
we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials currently
have in place or may issue in light of the ongoing COVID-19 coronavirus pandemic. As a result, we may impose additional procedures or
limitations on meeting attendees, or may decide to hold the meeting in a different location or solely by means of remote communication
(i.e., a solely virtual meeting). We plan to announce any changes regarding the Annual Meeting by issuing a press release and filing the
press release as definitive additional soliciting material with the Securities and Exchange Commission (“SEC’) at least 10
calendar days before the meeting. Stockholders who attend or attempt to attend the Annual Meeting will be deemed to have understood, accepted,
and assumed all physical, physiological, and psychological risks associated with attending any public or private event during the COVID-19
pandemic. The Company shall not be held liable for harm to any attendee, including a stockholder or guest, due to any of the foregoing.
Consistent with the guidelines set forth by the United States Center for Disease Control and Prevention as then in effect, we may require
all attendees, including all stockholders, to practice social distancing at the Annual Meeting.
Stockholders of record at the close of business on Tuesday, April 26, 2022 are entitled to notice of, and to vote at, the Annual Meeting
and any adjournment or postponement thereof.
THE INFORMATION PROVIDED IN THE “QUESTIONS
AND ANSWERS” FORMAT BELOW IS FOR YOUR
CONVENIENCE AND INCLUDES ONLY A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS PROXY
STATEMENT.
YOU SHOULD READ THIS ENTIRE PROXY STATEMENT CAREFULLY.
QUESTIONS AND ANSWERS
Why am I receiving these materials?
We are distributing our proxy materials because
our Board of Directors is soliciting your proxy to vote at the Annual Meeting. This proxy statement summarizes the information you need
to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote your shares.
What proposals will be voted on at our Annual Meeting?
Stockholders will vote on four proposals at our
Annual Meeting:
| 1. | the election of two Class II director nominees; |
| 2. | the approval of an increase in the number of shares of common stock available for issuance under our 2021 Stock Incentive Plan (the
“2021 Plan”) by 5,000,000 shares; |
| 3. | the approval of an amendment to our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”)
to effect a reverse stock split of our common stock at a ratio between 1:5 and 1:10, if and when determined by our Board of Directors
(the “Amendment Proposal”); and |
| 4. | the ratification of the appointment of Baker Tilly US, LLP (formerly known as Baker Tilly Virchow Krause, LLP) as our independent
registered public accounting firm for the fiscal year ending December 31, 2022. |
We will also consider other business, if any,
that properly comes before our Annual Meeting.
What happens if other business not discussed in this proxy statement
comes before the meeting?
The Company does not know of any business to be
presented at the Annual Meeting other than the proposals discussed in this proxy statement. If other business comes before the meeting
and is proper under our Certificate of Incorporation, our by-laws, and Delaware General Corporation Law (“DGCL”), the Company
representatives, James V. Caruso, Chad J. Kolean and Asher Rubin, acting as proxies, will use their discretion in casting all of the votes
that they are entitled to cast.
How does our Board recommend that stockholders vote on the proposals?
Our Board recommends that stockholders vote “FOR”
the election of each director nominee, “FOR” the approval of an increase in the number of shares of common stock available
for issuance under our 2021 Plan by 5,000,000 shares, “FOR” the approval of an amendment to our Certificate of Incorporation
to effect a reverse stock split of our common stock at a ratio between 1:5 and 1:10, if and when determined by our Board of Directors
and “FOR” the ratification of the appointment of Baker Tilly US, LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2022.
Who is entitled to vote?
The Record Date for our Annual Meeting is the
close of business on April 26, 2022. As of the Record Date, there were issued, outstanding and entitled to vote 61,101,251
shares of our common stock, $0.00001 par value per share. Only stockholders of record of our common stock as of the Record Date will
be entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Each stockholder is
entitled to one vote for each share of our common stock held by such stockholder on the Record Date.
What do I need for admission to our Annual Meeting?
Admittance is limited to stockholders of the Company.
If you are the stockholder of record, your name will be verified against the list of stockholders prior to your admittance to our Annual
Meeting. You should be prepared to present photo identification for admission at our Annual Meeting. If you hold your shares in street
name, you should provide proof of beneficial ownership on the Record Date, such as a brokerage account statement showing that you owned
shares of our common stock as of the Record Date, a copy of the voting instruction card provided by your broker, bank or other nominee
or other similar evidence of ownership as of the Record Date, as well as your photo identification, for your admission. If you do not
provide photo identification or comply with the other procedures outlined above upon request, you will not be admitted to our Annual Meeting.
Please note that if your shares are held of record by a bank, broker or other nominee, and you decide to attend our annual meeting, you
may not vote in person at our Annual Meeting unless you present a legal proxy, issued in your name from the record holder (your bank,
broker or other nominee).
How can I vote my shares without attending our Annual Meeting?
If you are a holder of record of shares of common
stock of the Company, you may direct your vote without attending the Annual Meeting by following the instructions on your proxy card.
If you hold your shares in street name via a broker,
bank or other nominee, you may direct your vote without attending the Annual Meeting by signing, dating and mailing your voting instruction
card. Internet or telephonic voting may be available. Please see your voting instruction card provided by your broker, bank or other nominee
for further details.
Can I change my vote or revoke my proxy?
You may change your vote or revoke your proxy at
any time before it is voted at the Annual Meeting. If you are a stockholder of record, you may change your vote or revoke your proxy by:
| • | delivering a written notice of revocation of your proxy to the attention of the Secretary at the following address: 100 Campus Drive,
Florham Park, New Jersey 07932; |
| • | delivering to us an authorized proxy bearing a later date (including a proxy over the Internet or by telephone); or |
| • | attending the Annual Meeting and voting during the meeting. Attendance at the Annual Meeting will not, by itself, revoke a proxy. |
If your shares are held in the name of a bank,
broker or other nominee, you may change your vote by submitting new voting instructions to your bank, broker or other nominee, or as otherwise
instructed by such bank, broker or nominee.
What is a broker non-vote?
Brokers, banks or other nominees
holding shares on behalf of a beneficial owner may vote those shares in their discretion on certain “routine” matters even
if they do not receive timely voting instructions from the beneficial owner. With respect to “non-routine” matters, the broker,
bank or other nominee is not permitted to vote shares for a beneficial owner without timely received voting instructions. The only routine
matters to be presented at the Annual Meeting are the approval of an amendment to our Certificate of Incorporation to effect a reverse
stock split of our common stock at a ratio between 1:5 and 1:10, if and when determined by our Board of Directors (Proposal Three) and
the proposal to ratify the appointment of Baker Tilly US, LLP as our independent registered public accounting firm for the fiscal year
ending December 31, 2022 (Proposal Four). The election of the Class II directors (Proposal One) and the approval of an increase
in the number of shares of common stock available for issuance under our 2021 Plan by 5,000,000 shares (Proposal Two) are non-routine
matters.
A broker non-vote occurs when
a broker, bank or other nominee does not vote on a non-routine matter because the beneficial owner of such shares has not provided voting
instructions with regard to such matter. If a broker, bank or other nominee exercises their discretionary voting authority on Proposal
Three or Four, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to
Proposal One, Proposal Two, or any other non-routine matters that are properly presented at the Annual Meeting. Broker non-votes will
have no impact on the voting results.
What constitutes a quorum?
In accordance with our by-laws, the presence at
the Annual Meeting, either in person or by proxy, of holders of a majority of the aggregate number of shares of our issued and outstanding
common stock entitled to vote thereat as of the record date shall constitute a quorum for the transaction of business at the Annual Meeting.
What vote is required to approve each matter to be considered at
our Annual Meeting?
Election of Class II Directors (Proposal
One). Our by-laws provide for a plurality voting standard for the election of directors in uncontested elections. An abstention or
a broker non-vote on Proposal One will not affect the election of the director.
2021 Plan Proposal (Proposal Two). Proposal
Two asks our stockholders to approve an increase in the number of shares of common stock available for issuance under our 2021 Plan by
5,000,000 shares. The affirmative vote of a majority of the votes cast is required for approval of Proposal Two. An abstention or a broker
non-vote will not affect the outcome of Proposal Two.
Amendment Proposal (Proposal Three). Proposal
Three will be approved if the holders of a majority in voting power of the outstanding shares of our common stock vote at the annual meeting
“FOR” such proposal. An abstention on Proposal Three will have the same effect as a vote “AGAINST” Proposal Three.
Brokers will have discretionary authority to vote on this proposal. Accordingly, there will not be any broker non-votes on Proposal Three.
Ratification of the Appointment of Baker Tilly
US, LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2022 (Proposal Four). The
affirmative vote of a majority of the votes cast is required for the approval of Proposal Four. An abstention on Proposal Four will not
have any effect on Proposal Four. Brokers will have discretionary authority to vote on this proposal. Accordingly, there will not be any
broker non-votes on Proposal Four.
What is the deadline for submitting a proxy?
To ensure that proxies are received in time to
be counted prior to the Annual Meeting, proxies submitted by Internet or by telephone should be received by 11:59 p.m. Eastern Time
on the day before the Annual Meeting, and proxies submitted by mail should be received by the close of business on the day prior to the
date of the Annual Meeting.
What does it mean if I receive more than one proxy card?
If you hold your shares in more than one account,
you will receive a proxy card for each account. To ensure that all of your shares are voted, please complete, sign,
date and return a proxy card for each account or follow the voting instructions on the proxy card for each account
to vote your shares. To ensure that all your shares are represented at the Annual Meeting, we recommend that you vote every proxy card that you receive.
How will my shares be voted if I return a blank
proxy card or a blank voting instruction card?
If you are a holder of record
of our common stock and you sign and return a proxy card or otherwise submit a proxy without giving specific voting instructions, your
shares will be voted:
| • | “FOR” the election of two Class II director nominees; |
| • | “FOR” the approval of an increase in the number of shares of common stock available for issuance under our 2021
Plan by 5,000,000 shares; |
| • | “FOR” the Amendment Proposal; and |
| • | “FOR” the ratification of the appointment of Baker Tilly US, LLP as our independent
registered public accounting firm for the fiscal year ended December 31, 2022. |
If you hold your shares in
street name via a broker, bank or other nominee and do not provide the broker, bank or other nominee with voting instructions, your shares:
| • | will be counted as present for purposes of establishing a quorum; |
| • | will be voted in accordance with the broker’s, bank’s or other nominee’s discretion
on “routine” matters, which includes the Amendment Proposal (Proposal Three) and the proposal to ratify the appointment of
Baker Tilly US, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 (Proposal Four);
and |
| • | will not be counted in connection with the election of two Class II director nominees named in this
proxy statement (Proposal One) and the approval of an increase in the number of shares of common stock available for issuance under our
2021 Plan by 5,000,000 shares (Proposal Two), or any other non-routine matters that are properly presented at the Annual Meeting. For
each of these proposals, your shares will be treated as “broker non-votes.” A broker non-vote will have no impact on voting
results of Proposals One or Two. |
Our Board of Directors knows of no matter to be
presented at the Annual Meeting other than Proposals One through Four. If any other matters properly come before the Annual Meeting upon
which a vote properly may be taken, shares represented by all proxies received by us will be voted with respect thereto as permitted and
in accordance with the judgment of the proxy holders.
Who is making this solicitation and who will pay the costs?
This proxy solicitation is being made on behalf
of the Board. The Company has engaged Alliance Advisors, LLC, to assist in the solicitation of proxies and provide related advice and
informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $160,000.
We will pay all of the costs of this proxy solicitation. We will also reimburse brokers, banks, nominees and other fiduciaries for their
expenses in sending these materials to you and getting your voting instructions.
Will a stockholder list be available for inspection?
In accordance with DGCL, a list of stockholders
of record entitled to vote at the Annual Meeting will be open to examination by any stockholder, for any purpose germane to the Annual
Meeting, during normal business hours for a period of ten days before the Annual Meeting at our corporate offices at 100 Campus Drive,
Florham Park, New Jersey 07932.
What is “householding” and how does it affect me?
We have adopted a procedure approved by the SEC,
called “householding.” Under this procedure, we send only one proxy statement and one annual report to eligible stockholders
who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is
designed to eliminate duplicate mailings, conserve natural resources and reduce our printing and mailing costs. Stockholders who participate
in householding will continue to receive separate proxy cards.
If you share an address with another stockholder
and receive only one set of proxy materials but would like to request a separate copy of these materials, please contact our mailing agent,
Broadridge Financial Solutions toll free at 1-866-540-7095 or via mail at the Householding Department, 51 Mercedes Way, Edgewood, New
York 11717. Similarly, if you receive multiple copies of the proxy materials and would prefer to receive a single copy in the future,
you may also contact Broadridge Financial Solutions, Inc. at the above telephone number or address. Stockholders can also contact
Investor Relations, Cellectar Biosciences, Inc., 100 Campus Drive, Florham Park, New Jersey 07932, by telephone at (608) 441-8120
or by e-mail to investors@cellectar.com in this manner to indicate that they wish to receive separate sets of proxy materials, or to request
that we send only a single set of materials, as applicable. If you own shares through a bank, broker, or other nominee, you should contact
the nominee concerning householding procedures.
How can I find out the results of the voting at the Annual Meeting?
We will announce preliminary voting results at
the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four
business days after the Annual Meeting.
When are stockholder proposals or director nominations due for next
year’s Annual Meeting?
Our stockholders are entitled to present proposals
for action at a forthcoming meeting if they comply with the requirements of our Certificate of Incorporation, our by-laws, and the rules established
by the SEC.
Under Rule 14a-8 under the Securities Exchange
Act of 1934 (the “Exchange Act”), if you want us to include a proposal in the proxy materials for our 2023 annual meeting
of stockholders, we must receive the proposal at our executive offices at 100 Campus Drive, Florham Park, New Jersey 07932, no later than
December 30, 2022.
Pursuant to our by-laws, a stockholder proposal
of business submitted outside of the process established in Rule 14a-8 and nominations of directors must be received no earlier than
February 15, 2023 and not later than March 17, 2023 and must otherwise comply with the requirements set forth in our by-laws. Any proposal or nomination
should be addressed to the attention of the Secretary, and we suggest that it be sent by certified mail, return receipt requested or through
another mailing service that provides tracking information and proof of receipt.
In addition to satisfying the requirements of our
by-laws, to comply with the universal proxy rules once effective, stockholders who intend to solicit proxies in support of director
nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under
the Exchange Act no later than April 16, 2023.
Whom can I contact for further information?
If you have questions about the Annual Meeting, the proposals, or the procedures for voting your shares, you
should contact the Secretary at 100 Campus Drive, Florham Park, New Jersey 07932 or by telephone at (608) 441-8120.
Who should I contact if I have any questions about how to vote?
If you have any questions about how to vote your
shares, you may contact our proxy solicitor at:
Alliance Advisors, LLC
200 Broadacres Drive, 3rd Floor Bloomfield, NJ 07003
ATTN: William M. Poudrier
Telephone: (833) 757-0783
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL 1
ELECTION OF DIRECTORS
Our Board of Directors currently consists of six
directors divided into three classes: Class I, Class II and Class III. The term of one class of directors expires each
year at the annual meeting of stockholders (or any special meeting in lieu thereof). Each director also continues to serve as a director
until his or her successor is duly elected and qualified. This year, the term of the Class II directors, James V. Caruso and Frederick
W. Driscoll, is expiring.
Our Board of Directors has nominated Mr. Caruso
and Mr. Driscoll to serve as Class II directors for a three-year term, until the 2025 Annual Meeting of Stockholders, or until
their respective successor has been duly elected and qualified.
If a nominee at the time of the election is unable
or unwilling to serve or is otherwise unavailable for election and our Board of Directors designates another nominee, the persons named
as proxies will vote the proxy for such substitute, if any. Our nominees have consented to being named in this proxy statement and have
agreed to serve if reelected, and our Board of Directors has no reason to believe that the nominees will be unable to serve.
Recommendation
Our Board of Directors recommends that you vote
FOR the election of Mr. Caruso and Mr. Driscoll.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL 2
APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES
OF COMMON STOCK AVAILABLE FOR ISSUANCE UNDER OUR 2021 PLAN
Our Board of Directors has adopted and is seeking
stockholder approval of an amendment to our 2021 Plan to increase the number of shares of common stock that are available to be issued
under the 2021 Plan by 5,000,000 shares (subject to adjustment for stock splits, stock dividends and similar events). No additional changes
to the 2021 Plan are proposed. There were 1,605,449 shares of common stock available for future grants or awards as of April 14,
2022; provided that if the reverse stock split described in Proposal Three is approved by our stockholders, then, in accordance with the
adjustment provisions set forth in the 2021 Plan, the number of shares of our common stock available for grants or awards under the 2021
Plan will be proportionately adjusted based on the ratio elected by our Board within the Split Ratio Range, as described further in Proposal
Three: Approval of an Amendment to Our Certificate of Incorporation to Effect a Reverse Stock Split of Our Common Stock at a ratio
between 1:5 and 1:10, If and When Determined by Our Board of Directors. While some additional shares may become available as
a result of forfeitures or similar events, this number is not expected to be significant.
Our Board recommends approval of the increase in
shares of common stock available under the 2021 Plan in order to enable us to continue to provide equity compensation to attract, retain
and motivate current and prospective directors, officers, employees and consultants. Our Board believes that stock options and other forms
of equity compensation promote growth and provide a meaningful incentive to directors and employees of successful companies.
As a clinical phase biopharmaceutical business,
the Company relies heavily upon stock incentive compensation to attract and retain key employees and other key service providers, and
has limited financial resources to utilize cash compensation as an alternative means to attract and retain such individuals. As of the
Record Date, there were 61,101,251 shares of our common stock outstanding. Our current dilution (which is the number of shares available for
grant under our equity compensation plans as of April 14, 2022, divided by the total number of shares of our common stock outstanding) is approximately
2.6%. If the proposed amendment to the 2021 Plan is approved, the potential dilution from authorized issuances for stock-based awards
will increase to approximately 10.8%.
The following is a summary of the material terms
of our 2021 Plan (as proposed to be amended, the “Amended 2021 Plan”). The summary is qualified in its entirety by reference
to the complete text of the Amended 2021 Plan. Stockholders are urged to read the actual text of the 2021 Plan, which is set forth as
Appendix A to our 2021 proxy statement filed with the SEC on May 13, 2021, and the proposed amendment to the 2021 Plan, which is
set forth as Appendix A to this proxy statement.
Summary of the Amended 2021 Plan
The Amended 2021 Plan terminates on the tenth anniversary
of its effective date of March 4, 2021, unless it is earlier terminated by our Board.
The Amended 2021 Plan authorizes:
| • | the grant of stock options to purchase shares of common stock intended to qualify as incentive stock options (“incentive options”); |
| • | the grant of stock options not intended to qualify as incentive stock options (“non-statutory options”); |
| • | the grant of restricted and unrestricted shares of common stock; |
| • | the grant of rights to receive shares of common stock, cash payments or a combination of shares and cash based on, or measured by,
appreciation in the market price of common stock (“stock appreciation rights”); and |
| • | the grant of awards entitling the recipient to acquire shares of common stock or cash upon attainment of specified performance goals
(“performance shares”). |
The Amended 2021 Plan is administered by the Compensation
Committee of our Board (the “Compensation Committee”) consisting of “non-employee directors” for purposes of Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Compensation Committee selects the individuals
to whom awards are granted and determines the terms of each award, subject to the provisions of the Amended 2021 Plan. The Compensation
Committee has the power and authority to grant and modify awards consistent with the terms of the Amended 2021 Plan, including the power
and authority to accelerate the exercisability or vesting of all or any portion of an award. Participants do not have a right to receive
dividend payments or dividend equivalent payments with respect to shares of common stock subject to any outstanding awards.
Awards other than incentive options may be granted
under the Amended 2021 Plan to officers, directors, employees, consultants and other individuals who render services to us and our subsidiaries.
Incentive options may be granted under the Amended 2021 Plan to our officers and other employees. As of the Record Date, five non-employee
directors, three executive officers and twelve non-officer employees were eligible to participate in the Amended 2021 Plan.
Incentive Options and Non-Statutory Options.
Stock options represent the right to purchase shares of our common stock. The exercise price of all stock options granted under the Amended
2021 Plan must be at least equal to the fair market value of the common stock on the date of grant (110% in the case of an incentive option
granted to an optionee who owns stock possessing more than 10% of the voting power of our outstanding capital stock). The Compensation
Committee determines when options become vested and exercisable.
Stock options may not extend for more than ten
years from the date of grant (five years in the case of an incentive option held by an optionee who owns stock possessing more than 10%
of the voting power of our outstanding capital stock). The aggregate fair market value (determined at the time of grant) of shares issuable
pursuant to incentive options, which first become exercisable by an employee or officer in any calendar year, may not exceed $100,000.
Options are non-transferable except by will or
by the laws of descent or distribution and are exercisable, during the optionee’s lifetime, only by the optionee. The Compensation
Committee in its discretion may determine the conditions with respect to any transfer or termination of any stock options granted under
the Amended 2021 Plan. Stock options generally may not be exercised:
| • | after the end of the term of the option; |
| • | following termination by us with cause; |
| • | after 90 days following retirement or termination by us without cause; |
| • | after 30 days following voluntary termination by the optionee; |
| • | after 90 days following the permanent disability of the optionee; and |
| • | after 180 days following the death of the optionee. |
Payment of the exercise price may be made:
| • | with cash, certified or bank check or other instrument acceptable to the Compensation Committee; |
| • | if provided for in the option agreement, with shares of common stock that are not subject to restrictions having a fair market value
equal to the option price for such shares; |
| • | if provided for in the option agreement, an exercise notice with irrevocable instructions to a broker to promptly deliver cash or
a check payable to us to pay the purchase price; or |
| • | if provided for in the option agreement, reduction of the number of shares of common stock otherwise issuable to the optionee upon
the exercise of the stock option by a number of shares of common stock having a fair market value equal to the aggregate exercise price. |
Restricted and Unrestricted Stock Awards.
Restricted stock awards entitle the recipient the right to hold shares of common stock that are subject to restrictions on transferability
and such other restrictions and conditions as the Compensation Committee may determine at the time of grant. The Compensation Committee
determines the restrictions and conditions, including continued employment and/or achievement of pre-established performance goals and
objectives. Upon satisfaction of the applicable restrictions and conditions, the shares of common stock subject to a restricted stock
award become transferrable. Unrestricted stock awards do not have any such restrictions or conditions.
Stock Appreciation Rights. Stock appreciation
rights entitle the holder the right to receive the appreciation of the fair market value of a specified number of shares of common stock
over the exercise price, subject to the satisfaction of such restrictions and conditions as the Compensation Committee may determine.
The exercise price of all stock appreciation rights granted under the Amended 2021 Plan must be at least equal to the fair market value
of the common stock on the date of grant. In the applicable award agreement, the Compensation Committee may determine whether the amount
of such appreciation will be settled in stock, cash or a combination of both.
Restricted Stock Units. Restricted stock
unit awards entitle the holder the right to receive shares of common stock (or equivalent cash, at the Compensation Committee’s
discretion), subject to the satisfaction of such restrictions and conditions as the Compensation Committee may determine at the time of
grant. The Compensation Committee determines the restrictions and conditions applicable to any restricted stock units.
Performance Share Awards. Performance share
awards entitle the holder the right to receive shares of common stock (or equivalent cash, at the Compensation Committee’s discretion)
upon the attainment of specified performance goals, subject to the satisfaction of such other restrictions and conditions as the Compensation
Committee may determine at the time of grant. The Compensation Committee determines the performance goals, the periods during which the
performance is measured and all other restrictions and conditions.
Amendment of the Amended 2021 Plan. Our
Board may modify, revise or terminate the Amended 2021 Plan at any time and from time to time, except that the class of persons eligible
to receive options and the aggregate number of shares issuable pursuant to the Amended 2021 Plan may not be changed or increased (other
than pursuant to certain changes in our capital structure) without the consent of our stockholders. The Compensation Committee may amend
or cancel outstanding awards for changes in the law or other lawful purpose. Such changes may not adversely affect the rights under outstanding
awards without the consent of the holder.
New Plan Benefits(1)
The benefits that will be awarded or paid under the 2021 Plan, if stockholder
approval of this Proposal Two is obtained, cannot currently be determined. Awards granted under the 2021 Plan are within the Compensation
Committee’s discretion, and the Compensation Committee has not determined future awards or who might receive them.
For illustrative purposes, the following table shows the number of
awards made under the 2021 Plan to named executive officers, current executive officers as a group, current directors who are not executive
officers as a group, and all employees, including all current officers who are not executive officers, as a group, in each case for the
fiscal year ended December 31, 2021:
Name and Position | |
Number of Stock Options | |
James V. Caruso, President and Chief Executive Officer | |
| 1,600,000 | |
Jarrod Longcor, Chief Operating Officer | |
| 450,000 | |
John E. Friend II, M.D., Former Chief Medical Officer | |
| 330,000 | |
Dov Elefant, Former Chief Financial Officer | |
| 430,000 | |
All current executive officers, as a group (3 persons) | |
| 2,050,000 | |
All current directors who are not executive officers, as a group (5 persons) | |
| 429,000 | |
All employees, including all current officers who are not executive officers, as a group (11 persons) | |
| 248,500 | |
| (1) | This table includes our named executive officers for the fiscal year ended December 31, 2021. As of April 14, 2022, Dr. Friend
and Mr. Elefant are no longer employees of the Company and are not included in the total for all current executive officers. Mr. Elefant
was succeeded by Chad J. Kolean as Chief Financial Officer on February 22, 2022. |
Federal Income Tax Information with Respect to the Amended 2021
Plan
The following summarizes certain U.S. federal income
tax considerations generally applicable to awards granted under the Amended 2021 Plan. This summary does not purport to be complete and
is based on current provisions of the U.S. federal tax laws and regulations, all of which are subject to change (possibly with retroactive
effect) and does not address any tax consequences arising under the laws of any state, local or foreign jurisdiction.
Non-Statutory Options. The grantee of a
non-statutory option recognizes no income for federal income tax purposes on the grant thereof. On the exercise of a non-statutory option,
the excess of the fair market value of the underlying shares of common stock on the exercise date over the option exercise price is treated
as compensation to the holder of the option taxable as ordinary income in the year of exercise, and such fair market value becomes the
basis for the underlying shares which will be used in computing any capital gain or loss upon disposition of such shares (which will be
long-term capital gain if the shares are held for more than one year). Subject to certain limitations, we may deduct for the year of exercise
an amount equal to the amount recognized by the option holder as ordinary income upon exercise of a non-statutory option.
Incentive Options. The grantee of an incentive
option recognizes no income for federal income tax purposes on the grant thereof. There is no tax upon exercise of an incentive option,
but the excess of the fair market value of the underlying shares over the option exercise price at the time of exercise will constitute
an item of tax preference for purposes of the alternative minimum tax. If no disposition of shares acquired upon exercise of the option
is made by the option holder within the later of (i) two years from the date of the grant of the option and (ii) one year after
exercise of the incentive option, any gain realized by the option holder on the subsequent sale of such shares is treated as a long-term
capital gain for federal income tax purposes. If the shares are sold prior to the expiration of such periods, the difference between the
lesser of the value of the shares at the date of exercise or at the date of sale and the exercise price of the incentive option is treated
as compensation to the employee taxable as ordinary income and the excess gain, if any, is treated as capital gain (which will be long-term
capital gain if the shares are held for more than one year).
In connection with the sale of the shares covered
by incentive options, we are allowed a deduction for federal tax purposes only to the extent, and at the time, the option holder receives
ordinary income (for example, by reason of the sale of shares by the holder of an incentive option within the later of two years of the
date of the option grant or one year after the exercise of the option), subject to certain limitations on the deductibility of compensation
paid to executives.
Restricted Stock Awards. The grantee of
a restricted stock award recognizes no income for federal income tax purposes upon the receipt of common stock pursuant to that award,
unless, as described below, the grantee otherwise elects. Instead, the grantee will recognize ordinary income in an amount equal to the
fair market value of the common stock on the date that it is no longer subject to a substantial risk of forfeiture less the amount, if
any, the grantee paid for such stock. Such fair market value becomes the basis for the underlying shares and will be used in computing
any capital gain or loss upon the disposition of such shares (which will be long-term capital gain if the grantee held the shares for
more than one year after the date on which the shares are no longer subject to a substantial risk of forfeiture).
Alternatively, the grantee of a restricted stock
award may elect, pursuant to Section 83(b) of the Internal Revenue Code of 1986 (the “Code”), within 30 days of
the acquisition of common stock pursuant to the restricted stock award, to include in gross income as ordinary income for the year in
which the common stock is received, the fair market value of the common stock on the date of grant less the amount, if any, the grantee
paid for such stock. Such fair market value will become the basis for the shares and will be used in determining any capital gain or loss
upon the disposition of such shares (which will be long-term capital gain if the disposition is more than one year after the date of grant).
Grantees of restricted stock awards are advised to consult their own tax advisors with regard to elections pursuant to Section 83(b) of
the Code.
Unrestricted Stock Awards. Upon receipt
of common stock pursuant to an unrestricted stock award, the grantee will recognize as ordinary income the difference between the fair
market value of the common stock less the amount, if any, the grantee paid for such stock. The grantee’s basis in such shares will
be equal to the fair market value of the shares on the date of receipt, and this basis will be used in determining any capital gain or
loss upon a subsequent disposition of the shares (which will be long-term capital gain if the disposition is more than one year after
the date the shares are received).
Subject to certain limitations, we may deduct an
amount equal to the amount recognized by the grantee of a restricted or unrestricted stock award as ordinary income for the year in which
such income is recognized.
Stock Appreciation Rights. The grantee of
a stock appreciation right recognizes no income for federal income tax purposes on the grant thereof. On the exercise of a stock appreciation
right, the grantee will recognize as ordinary income the excess of the fair market value of the common stock delivered the grantee (and
the amount of cash, if any, paid to the grantee) in connection with such exercise.
Subject to certain limitations, we may deduct an
amount equal to the amount recognized by the grantee of a stock appreciation right as ordinary income for the year in which the stock
appreciation right is exercised or lapses.
Restricted Stock Units. The grantee of a
restricted stock unit recognizes no income for federal income tax purposes on the grant thereof. When the cash or shares (as applicable)
are transferred (upon vesting of the award), the grantee will recognize as ordinary income the value of cash or shares transferred. If
shares are received, the grantee’s basis in such shares will be equal to the fair market value of the shares upon receipt, and this
basis will be used in determining any gain or loss upon a subsequent disposition of the shares (which will be long-term capital gain if
the disposition is more than one year after the date the shares are received).
Subject to certain limitations, we may deduct an
amount equal to the amount recognized by the grantee of a restricted stock unit as ordinary income for the year in which such income is
recognized.
Performance Share Awards. The federal income
tax laws applicable to performance share awards are the same as those applicable to restricted stock units, described above.
Withholding. Subject to certain limitations,
we are required to withhold taxes from amounts taxable to our employees as compensation.
Recommendation
Shares available under the 2021 Plan will not be
increased unless the amendment is approved by stockholders. If the amendment to the 2021 Plan is not approved by stockholders, the 2021
Plan will remain in effect in its current form, with the remaining pool of shares, and we may not have sufficient shares available to
meet our needs for the next year.
Our Board of Directors recommends that you vote
FOR the approval of the increase in the number of shares of common stock available for issuance under our 2021 Plan.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK AT A RATIO BETWEEN 1:5
AND 1:10, IF AND WHEN DETERMINED BY OUR
BOARD OF DIRECTORS
Overview
The amendment proposal, if
approved, would not immediately cause a reverse stock split, but rather would grant authorization to our Board to effect a reverse stock
split (without reducing the number of authorized shares of our common stock), if, and when determined by our Board. Our Board has deemed
it advisable, approved and is hereby soliciting stockholder approval of, an amendment to our Certificate of Incorporation to effect a
reverse stock split at a ratio between one-for-five (1:5) and one-for-ten (1:10) (the “Split Ratio Range”), in the form set
forth in Appendix B to this proxy statement.
If we receive the required
stockholder approval, our Board would have the sole authority to elect, at any time prior to December 15, 2022, whether or not to
effect a reverse stock split. Even with stockholder approval of the Amendment Proposal, our Board will not be obligated to pursue the
reverse stock split. Rather, our Board will have the flexibility to decide whether or not a reverse stock split (and at what ratio within
the Split Ratio Range) is in the best interests of the Company.
If approved by our stockholders
and following such approval our Board determines that effecting a reverse stock split is in the best interests of the Company and our
stockholders, the reverse stock split would become effective upon filing an amendment to our Certificate of Incorporation with the Secretary
of State of the State of Delaware. As filed, the amendment would state the number of outstanding shares to be combined into one share
of our common stock, at the ratio approved by our Board within the Split Ratio Range. The amendment would not change the par value of
our common stock and would not impact the total number of authorized shares of our common stock. Therefore, upon effectiveness of a reverse
stock split, the number of shares of our common stock that are authorized and unissued will increase relative to the number of issued
and outstanding shares of our common stock.
Although we presently intend
to effect the reverse stock split to regain compliance with the Nasdaq Capital Market’s minimum bid price requirement, under Section 242(c) of
the Delaware General Corporation Law, our Board has reserved the right, notwithstanding our stockholders’ approval of the proposed
amendment of the Certificate of Incorporation at the annual meeting, to abandon the proposed amendment at any time (without further action
by our stockholders) before the amendment of the Certificate of Incorporation is filed with the Secretary of State of the State of Delaware.
Our Board may consider a variety of factors in determining whether or not to proceed with the proposed amendment of the Certificate of
Incorporation, including overall trends in the stock market, recent changes and anticipated trends in the per-share market price of our
common stock, business developments and our actual and projected financial performance. If the closing bid price of our common stock on
the Nasdaq Capital Market reaches a minimum of $1.00 per share and remains at or above that level for a minimum of ten consecutive trading
days (or longer, if required by the Nasdaq Listing Qualifications Panel), as discussed more fully below, our Board may decide to abandon
the filing of the proposed amendment of the Certificate of Incorporation.
Purpose and Overview of the Reverse Stock Split
Our primary objective in effectuating
the reverse stock split would be to attempt to raise the per-share trading price of our common stock to continue our listing on the Nasdaq
Capital Market. To maintain listing, the Nasdaq Capital Market requires, among other things, that our common stock maintain a minimum
closing bid price of $1.00 per share. On April 28, 2022, the closing bid price for our common stock on the Nasdaq Capital Market
was $0.52 per share.
On November 1, 2021,
we received a deficiency letter from the Nasdaq Stock Market notifying the Company that, for the last 30 consecutive business days, beginning
on September 20, 2021 and ending on October 29, 2021, the bid price for the Company’s common stock had closed below the
minimum bid price. In accordance with Nasdaq rules, the Company was provided an initial period of 180 calendar days, or until May 2,
2022, to regain compliance. The Company intends to seek an extension from Nasdaq. If the Company does not regain compliance with the minimum
bid price rule, Nasdaq will provide written notification to the Company that its common stock may be delisted.
Our Board is seeking stockholder
approval for the authority to effectuate the reverse stock split as a means of increasing the share price of our common stock at or above
$1.00 per share in order to avoid further action by Nasdaq, in the event we are not able to satisfy the minimum bid price requirement
in adequate time before the deadline. We expect that the reverse stock split would increase the bid price per share of our common stock
above the $1.00 per share minimum price, thereby satisfying this listing requirement. However, there can be no assurance that the reverse
stock split would have that effect, initially or in the future, or that it would enable us to maintain the listing of our common stock
on the Nasdaq Capital Market. We are not aware of any present efforts by anyone to accumulate our common stock, and the proposed reverse
stock split is not intended to be an antitakeover device.
In addition, we believe that
the low per-share market price of our common stock impairs its marketability to, and acceptance by, institutional investors and other
members of the investing public and creates a negative impression of the Company. Theoretically, decreasing the number of shares of our
common stock outstanding should not, by itself, affect the marketability of the shares, the type of investor who would be interested in
acquiring them or our reputation in the financial community. In practice, however, many investors, brokerage firms and market makers consider
low-priced stocks as unduly speculative in nature and, as a matter of policy, avoid investment and trading in such stocks. Moreover, the
analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks. The presence
of these factors may be adversely affecting, and may continue to adversely affect, not only the price of our common stock but also its
trading liquidity. In addition, these factors may affect our ability to raise additional capital through the sale of our common stock.
We also believe that a higher
stock price could help us attract and retain employees and other service providers. We believe that some potential employees and service
providers are less likely to work for a company with a low stock price, regardless of the size of the company’s market capitalization.
If the reverse stock split successfully increases the per-share price of our common stock, we believe this increase would enhance our
ability to attract and retain employees and service providers. Further, the reverse stock split will result in additional authorized and
unissued shares becoming available for general corporate purposes as the Board may determine from time to time, including for use under
its equity compensation plans.
We believe that the decrease
in the number of shares of our outstanding common stock because of the reverse stock split, and the anticipated increase in the price
per share, would possibly promote greater liquidity for our stockholders with respect to their shares. However, liquidity may be adversely
affected by the reduced number of shares that would be outstanding if the reverse stock split is effected, particularly if the price per
share of our common stock begins a declining trend after the reverse stock split is effectuated.
There can be no assurance
that the reverse stock split would achieve any of the desired results. There also can be no assurance that the price per share of our
common stock immediately after the reverse stock split would increase proportionately with the reverse stock split, or that any increase
would be sustained for any period of time.
If our stockholders do
not approve the Amendment Proposal and our stock price does not otherwise increase to greater than $1.00 per share for at least ten
consecutive trading days before May 2, 2022 (or before the end of an extended compliance period, if granted), we expect our common stock to be subject to a delisting action by the Nasdaq
Capital Market. We believe the reverse stock split is the most likely way to assist the stock price in reaching the minimum bid
level required by the Nasdaq Capital Market, although effecting the reverse stock split cannot guarantee that we would be in
compliance with the minimum bid price requirement for even the minimum ten-day trading period required by the Nasdaq Capital Market.
Furthermore, the reverse stock split cannot guarantee we would be in compliance with the market capitalization, net worth or
stockholders’ equity criteria required to maintain our listing on the Nasdaq Capital Market.
If our common stock were delisted
from the Nasdaq Capital Market, trading of our common stock would thereafter be conducted on the OTC Bulletin Board or the “pink
sheets.” As a result, an investor may find it more difficult to dispose of, or to obtain accurate quotations as to the price of,
our common stock. To relist shares of our common stock on the Nasdaq Capital Market, we would be required to meet the initial listing
requirements for either the Nasdaq Capital Market or the Nasdaq Global Market, which are more stringent than the maintenance requirements.
If our common stock were delisted
from the Nasdaq Capital Market and the price of our common stock were below $5.00 at such time, such stock would come within the definition
of “penny stock” as defined in the Exchange Act and would be covered by Rule 15g-9 of the Exchange Act. That rule imposes
additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5 million or individuals with net worth in excess of $1 million or annual
income exceeding $200,000 or $300,000 jointly with their spouse). For transactions covered by Rule 15g-9, the broker-dealer must
make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior
to the sale. These additional sales practice restrictions would make trading in our common stock more difficult and the market less efficient.
In evaluating whether to seek
stockholder approval for the reverse stock split, our Board took into consideration negative factors associated with reverse stock splits.
These factors include: the negative perception of reverse stock splits that investors, analysts and other stock market participants may
hold; the fact that the stock prices of some companies that have effected reverse stock splits have subsequently declined, sometimes
significantly, following their reverse stock splits; the possible adverse effect on liquidity that a reduced number of outstanding
shares could cause; and the costs associated with implementing a reverse stock split.
Even if our stockholders approve
the reverse stock split, our Board reserves the right not to effect the reverse stock split if in our Board’s opinion it would not
be in the best interests of the Company or our stockholders to effect such reverse stock split.
Risks Associated with the Reverse Stock Split
We cannot predict whether
the reverse stock split, if completed, will increase the market price for our common stock. The history of similar stock split combinations
for companies in like circumstances is varied. There is no assurance that:
| • | the market price per share would either exceed or remain in excess of the $1.00 minimum bid price per
share as required to maintain the listing of our common stock on the Nasdaq Capital Market; |
| • | we would otherwise meet the requirements for continued listing of our common stock on the Nasdaq Capital
Market; |
| • | the market price per share of our common stock after the reverse stock split would rise in proportion
to the reduction in the number of shares outstanding before the reverse stock split; |
| • | the reverse stock split would result in a per-share price that would attract brokers and investors who
do not trade in lower-priced stocks; |
| • | the reverse stock split would result in a per-share price that would increase our ability to attract and
retain employees and other service providers; or |
| • | the reverse stock split would promote greater liquidity for our stockholders with respect to their shares. |
In addition, the reverse stock
split would reduce the number of outstanding shares of our common stock without reducing the number of shares of available but unissued
common stock, increasing the number of authorized but unissued shares of common stock. Therefore, the number of shares of our common stock
that are authorized and unissued will increase relative to the number of issued and outstanding shares of our common stock following the
reverse stock split. The Board may authorize the issuance of the remaining authorized and unissued shares without further stockholder
action for a variety of purposes, except as such stockholder approval may be required in particular cases by our Certificate of Incorporation,
applicable law or the rules of any stock exchange on which our securities may then be listed. The issuance of additional shares would
be dilutive to our existing stockholders and may cause a decline in the trading price of our common stock.
The market price of our common
stock is based on our performance and other factors, some of which are unrelated to the number of shares outstanding. If the reverse stock
split is effected and the market price of our common stock declines, the percentage decline as an absolute number and as a percentage
of our overall market capitalization may be greater than would occur in the absence of a reverse stock split.
Principal Effects of the Reverse Stock Split
on the Market for Our Common Stock
On April 28, 2022, the
closing bid price for our common stock on the Nasdaq Capital Market was $0.52 per share. By decreasing the number of shares of our common
stock outstanding without altering the aggregate economic interest represented by the shares, we believe the market price would be increased.
The greater the market price rises above $1.00 per share, the less risk there would be that we would fail to meet the requirements for
maintaining the listing of our common stock on the Nasdaq Capital Market. However, there can be no assurance that the market price of
the common stock would rise to or maintain any particular level or that we would at all times be able to meet the requirements for maintaining
the listing of our common stock on the Nasdaq Capital Market.
Principal Effects of the Reverse Stock Split
on Our Common Stock; No Fractional Shares
If our stockholders
approve granting our Board the authority to amend our Certificate of Incorporation to effect a reverse stock split, and if our Board
decides to effectuate such amendment, the principal effect of the amendment would be to reduce the number of issued and outstanding
shares of our common stock, in accordance with the Split Ratio Range, from 61,101,251 shares as of the Record Date to
between and including approximately 12,220,000 shares and 6,110,000 shares. If the reverse stock split is effectuated, the total number of
shares of our common stock each stockholder holds would be reclassified automatically into the number of shares of our common stock
equal to the number of shares of our common stock each stockholder held immediately before the reverse stock split divided by the
ratio approved by the Board within the Split Ratio Range.
Effecting the reverse stock
split will not change the total authorized number of shares of our common stock. However, the reduction in the issued and outstanding
shares would provide more authorized shares available for future issuance.
The reverse stock split would
affect all of our stockholders uniformly and would not affect any stockholder’s percentage ownership interests, except to the extent
that the reverse stock split results in such stockholder owning a fractional share. No fractional shares will be issued. As soon as practicable
after the amendment to our Certificate of Incorporation is filed, American Stock Transfer & Trust Company, our transfer agent,
would aggregate all fractional shares and arrange for them to be sold at the then prevailing prices on the open market on behalf of those
stockholders who would otherwise be entitled to receive a fractional share. We expect that the transfer agent would cause the sale to
be conducted in an orderly fashion at a reasonable pace and that it may take several days to sell all of the aggregated fractional shares
of our common stock. After completing the sale, stockholders would receive a cash payment from the transfer agent in an amount equal to
their pro rata shares of the total net proceeds of these sales. The proceeds would be subject to certain taxes as discussed below. In
addition, stockholders would not be entitled to receive interest for the period of time between the filing of the amendment to the Certificate
of Incorporation and the date a stockholder receives payment for the cashed-out shares. The payment amount would be paid to the stockholder
in the form of a check in accordance with the procedures outlined below.
After the reverse stock split,
a stockholder would have no further interest in the Company with respect to such stockholder’s cashed-out fractional shares. A person
otherwise entitled to a fractional interest would not have any voting, dividend or other rights except to receive payment as described
above.
Principal Effects of the Reverse Stock Split
on Outstanding Options and Warrants
As of the Record Date, we had outstanding (a) stock
options to purchase an aggregate of 6,064,033 shares of our common stock with exercise prices ranging from $0.49 to $1,500 per share and (b) warrants
to purchase an aggregate of 15,633,825 shares of our common stock with exercise prices ranging from $1.2075 to $17.80 per share. Under the terms of
the stock options and warrants, when the reverse stock split becomes effective, the number of shares of our common stock covered by each
of them would be divided by the number of shares being combined into one share of our common stock in the reverse stock split and the
exercise or conversion price per share would be increased to a dollar amount equal to the current exercise or conversion price, multiplied
by the number of shares being combined into one share of our common stock in the reverse stock split. This results in the same aggregate
price being required to be paid upon exercise as was required immediately preceding the reverse stock split. The number of shares reserved
under our option plan would decrease by the ratio approved by Board within the Split Ratio Range.
Principal Effects of the
Reverse Stock Split on Outstanding Preferred Stock
As of the Record Date, we had outstanding 111 shares of our Series D Convertible Preferred Stock with a conversion price of $1.35. If
the reverse stock split is effectuated, the conversion price of our issued and outstanding Series D Convertible Preferred Stock would
adjust proportionately to the ratio approved by the Board within the Split Ratio Range.
Principal Effects of the Reverse Stock Split
on Legal Ability to Pay Dividends
Our Board has not declared,
nor does it have any plans to declare in the foreseeable future, any distributions of cash, dividends or other property, and we are not
in arrears on any dividends. Therefore, we do not believe that the reverse stock split would have any effect with respect to future distributions,
if any, to holders of our common stock.
Accounting Matters
The reverse stock split would
not affect the par value of our common stock or preferred stock, which would remain unchanged at $0.00001 per share. As a result, on the
effective date of the reverse stock split, the stated capital on our balance sheet attributable to our common stock would be reduced by
the ratio approved by the Board within the Split Ratio Range, and the additional paid-in capital account would be credited with the amount
by which the stated capital is reduced. The per-share net income or loss and net book value of our common stock would be increased because
there would be fewer shares of our common stock outstanding.
Beneficial Holders of Our Common Stock (Stockholders
Who Hold in “Street Name”)
Upon the reverse stock split,
we intend to treat shares held by stockholders in “street name,” through a broker, in the same manner as registered stockholders
whose shares are registered in their names. Brokers would be instructed to effect the reverse stock split for their beneficial holders
holding our common stock in “street name.” However, brokers may have different procedures than registered stockholders for
processing the reverse stock split and making payment for fractional shares. Stockholders holding shares of our common stock with a broker
and having any questions in this regard should contact their broker.
Registered “Book-Entry” Holders
of Our Common Stock
If a stockholder holds registered
shares in book-entry form with the transfer agent, no action needs to be taken to receive post-reverse stock split shares or cash payment
in lieu of any fractional share interest, if applicable. If such a stockholder is entitled to post-reverse stock split shares, a transaction
statement would automatically be sent to such stockholder’s address of record indicating the number of shares of our common stock
held following the reverse stock split.
If such a stockholder is entitled
to a payment in lieu of any fractional share interest, a check would be mailed to the stockholder’s registered address as soon as
practicable after the effective time of the reverse stock split. By signing and cashing the check, stockholders would warrant that they
owned the shares of our common stock for which they received a cash payment. The cash payment is subject to applicable federal and state
income tax and state abandoned property laws. No stockholders would be entitled to receive interest for the period of time between the
effective time of the reverse stock split and the date payment is received.
No Dissenters’ Rights
Under the Delaware General
Corporation Law, stockholders are not entitled to dissenters’ rights with respect to the reverse stock split.
Material 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.
For purposes of this summary
a “non-U.S. holder” is any beneficial owner of our common stock that is not a “U.S. holder.” A “U.S. holder”
any beneficial owner of our common stock that for U.S. federal income tax purposes is any of the following:
| • | an individual who is or is treated as a citizen or resident of the United States; |
| • | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created
or organized under the laws of the United States, any state thereof or the District of Columbia; |
| • | an estate the income of which is subject to U.S. federal income taxation regardless of its source;
or |
| • | a trust (i) if a court within the United States is able to exercise primary supervision over the
administration of such trust and one or more “United States Persons” have the authority to control all substantial decisions
of such trust or (ii) that has a valid election in effect to be treated as “United States Persons” for U.S. federal income
tax purposes. |
This summary does not address
all of the tax consequences that may be relevant to any particular stockholder, 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 stockholders. 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 Code, 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.
EACH STOCKHOLDER SHOULD
CONSULT ITS OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER 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, except as described below with respect to cash in lieu
of fractional shares, no gain or loss should be recognized upon the reverse stock split. In addition, 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 (excluding the
portion of the tax basis that is allocable to any fractional share), and the holding period for the common stock received should include
the holding period for the common stock surrendered.
A U.S. holder that receives
cash in lieu of a fractional share of common stock in the reverse stock split generally will be treated as having received such fractional
share and then as having received such cash in redemption of such fractional share interest. A U.S. holder generally will recognize gain
or loss measured by the difference between the amount of cash received and the portion of the basis of the pre-reverse stock split common
stock allocable to such fractional interest. Such gain or loss generally will constitute capital gain or loss and will be long-term capital
gain or loss if the U.S. holder’s holding period in our common stock surrendered in the reverse stock split was greater than one
year as of the date of the exchange.
U.S. Information Reporting and Backup Withholding
Information returns generally
will be required to be filed with the Internal Revenue Service (“IRS”) with respect to the receipt of cash in lieu of a fractional
share of our common stock pursuant to the reverse stock split in the case of certain U.S. holders. In addition, U.S. holders may be subject
to a backup withholding tax at the rate specified in the Code on the payment of such cash if they do not provide their taxpayer identification
numbers in the manner required or otherwise fail to comply with applicable backup withholding tax rules. Backup withholding is not an
additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the U.S. holder’s
federal income tax liability, if any, provided the required information is timely furnished to the IRS.
Non-U.S. Holders
Generally, non-U.S. holders
will not recognize any gain or loss upon completion of the reverse stock split. In particular, gain or loss will not be subject to U.S.
federal income or withholding tax with respect to cash received in lieu of a fractional share provided that (a) such gain or loss
is not effectively connected with the conduct of a trade or business in the United States (or, if certain income tax treaties apply, is
not attributable to a non-U.S. holder’s permanent establishment or fixed base in the United States), (b) with respect to non-U.S.
holders who are individuals, such non-U.S. holders are present in the United States for less than 183 days in the taxable year of the
reverse stock split and other conditions are met, and (c) such non-U.S. holders comply with certain certification requirements.
U.S. Information Reporting and Backup Withholding
Tax
In general, backup withholding
and information reporting will not apply to payments of cash in lieu of a fractional share of our common stock to a non-U.S. holder pursuant
to the reverse stock split if the non-U.S. holder certifies under penalties of perjury that it is a non-U.S. holder and the applicable
withholding agent does not have actual knowledge to the contrary. Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be refunded or allowed as a credit against the non-U.S. holder’s U.S. federal income tax liability,
if any, provided that certain required information is timely furnished to the IRS. In certain circumstances the amount of cash paid to
a non-U.S. holder in lieu of a fractional share of our common stock, the name and address of the beneficial owner and the amount, if any,
of tax withheld may be reported to the IRS.
Interests of Certain Persons
Our officers and directors
have an interest in this proposal as a result of their ownership of shares of our common stock. However, we do not believe that our officers
or directors have interests in this proposal that are different or greater than those of any of our other stockholders.
Recommendation
Our Board of Directors recommends that you vote
FOR the approval of an amendment to our certificate of incorporation to effect a reverse stock split of our common stock at a ratio
between 1:5 and 1:10, if and when determined by our Board of Directors.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal 4 concerns the ratification of the appointment
by our Audit Committee of Baker Tilly US, LLP (formerly known as Baker Tilly Virchow Krause, LLP) to be our independent registered public
accounting firm for the fiscal year ending December 31, 2022.
Under rules of the SEC and the Nasdaq Stock
Market, the appointment of our independent registered public accounting firm is the direct responsibility of our Audit Committee. Although
ratification by our stockholders of this appointment is not required by law, our Board of Directors believes that seeking stockholder
ratification is a good practice, which provides stockholders an avenue to express their views on this important matter.
Our Audit Committee has appointed Baker Tilly US,
LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. Our Board of Directors recommends
that stockholders vote to ratify the appointment. If our stockholders do not ratify the appointment of Baker Tilly US, LLP, the Audit
Committee may reconsider its decision. In any case, the Audit Committee may, in its discretion, appoint a new independent registered public
accounting firm at any time during the year if it believes that such change would be in our best interest and the best interest of our
stockholders. We expect that representatives of Baker Tilly US, LLP will not attend the Annual Meeting, but will be available by telephone.
They will have an opportunity to make a statement if they wish and will be available to respond to appropriate questions from stockholders.
Audit and Other Fees
The following table shows fees for professional
audit services, audit-related fees, tax fees and other services rendered by Baker Tilly US, LLP (formerly known as Baker Tilly Virchow
Krause, LLP), including its affiliates, for the audit of our annual financial statements for the fiscal years ended December 31,
2020 and 2021:
Fee Category | |
Fiscal 2020 | | |
Fiscal 2021 | |
Audit fees | |
$ | 156,100 | | |
$ | 247,117 | |
Audit-related fees (1) | |
| 112,000 | | |
| — | |
Tax fees | |
| — | | |
| — | |
All other fees | |
| — | | |
| — | |
Total fees | |
$ | 268,100 | | |
$ | 247,117 | |
| (1) | In the Fiscal 2020 fee presentation, professional services related to consents and comfort letters in support of S-1, S-3 and S-8
filings, issued by Baker Tilly US, LLP, were classified as “Audit-related fees.” In the presentation for Fiscal 2021, such
fees are included in the “Audit fees” caption. |
Audit Fees. Audit fees were for professional
services rendered for the audit of our annual financial statements, the review of quarterly financial statements and the preparation of
statutory and regulatory filings.
Audit-Related Fees. Audit-related fees include
fees for assurance and related services by the principal accountant that are reasonably related to the performance of audit and reviews
but that are not included under “Audit Fees” above.
Tax Fees. Tax fees consist of fees billed
for professional services for tax compliance, tax planning and tax advice. These services include assistance regarding federal, state
and international tax compliance and planning and mergers and acquisitions.
All Other Fees. All other fees include assistance
with miscellaneous reporting requirements and interpretation of technical issues.
Our Audit Committee has determined that the services
Baker Tilly US, LLP performed for us during fiscal 2021 were at all times compatible with its independence.
Policy on Pre-Approval of Audit and Non-Audit Services
At present, our Audit Committee approves each engagement
for audit and non-audit services before we engage Baker Tilly US, LLP to provide those services.
Our Audit Committee has not established any pre-approval
policies or procedures that would allow our management to engage Baker Tilly US, LLP to provide any specified services with only an obligation
to notify the Audit Committee of the engagement for those services. None of the services provided by Baker Tilly US, LLP for the fiscal
year ended December 31, 2021 were obtained in reliance on the waiver of the pre-approval requirement afforded in SEC regulations.
Recommendation
If the selection of the independent registered
public accounting firm is not ratified, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit
Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time if the
Audit Committee believes that such a change would be in the best interest of the Company and our stockholders.
Our Board of Directors recommends that you vote
FOR ratification of the appointment by our Audit Committee of Baker Tilly US, LLP as our independent registered public accounting
firm for the year ending December 31, 2022.
OFFICERS AND DIRECTORS
Our executive officers and directors as of the
date hereof are as follows:
Name | |
Age | |
Position |
James V. Caruso | |
63 | |
President, Chief Executive Officer and Director |
Chad J. Kolean | |
57 | |
Vice President, Secretary and Chief Financial Officer |
Jarrod Longcor | |
49 | |
Chief Operating Officer |
Douglas J. Swirsky (1)(2) | |
52 | |
Chairman of the Board and Director |
Asher Chanan-Khan, M.B.B.S., M.D.(3) | |
53 | |
Director |
John Neis (1)(2) | |
66 | |
Director |
Stefan D. Loren, Ph.D. (2)(3) | |
58 | |
Director |
Frederick W. Driscoll (1)(3) | |
71 | |
Director |
| (1) | Member of the Compensation Committee. |
| (2) | Member of the Nominating and Corporate Governance Committee. |
| (3) | Member of the Audit Committee. |
The following biographical descriptions set forth
certain information with respect to the nominees for election as Class II directors, the incumbent, continuing directors who are
not up for election at this Annual Meeting and our current executive officers who are not directors. This information has been furnished
by the respective individuals.
Class II Directors – Term Expiring 2022 and Nominees
James V. Caruso. Mr. Caruso was appointed
our President and Chief Executive Officer and a director in June 2015. He came to Cellectar from Hip Innovation Technology, a medical
device company where he was a founder and served as Executive Vice President and Chief Operating Officer from August 2010 to June 2015,
and he currently serves on their board. Prior to his time at Hip Innovation Technology, he was Executive Vice President and Chief Commercial
Officer of Allos Therapeutics, Inc., an oncology company acquired by Spectrum Pharmaceuticals, from June 2006 to August 2010.
He was also Senior Vice President, Sales and Marketing, from June 2002 to May 2005, at Bone Care International, Inc., a
specialty pharmaceutical company that was acquired by Genzyme Corporation. In addition, Mr. Caruso has held key positions at several
well-known pharmaceutical companies, including Novartis, where he was Vice President of Neuroscience Specialty Sales, BASF Pharmaceuticals-Knoll,
where he was Vice President, Sales, and Bristol-Myers Squibb Company in several senior roles. Mr. Caruso earned a Bachelor of Science
degree in Finance from the University of Nevada. Mr. Caruso’s extensive experience in the biotechnology industry and his recent
experience as our Chief Executive Officer make him a highly qualified member of our Board of Directors.
Frederick W. Driscoll. Mr. Driscoll
was appointed as a director of Cellectar in April 2017. Mr. Driscoll served as Chief Financial Officer at Flexion Therapeutics,
a biopharmaceutical company, from 2013 to 2017, spearheading an initial public offering in 2014. Prior to joining Flexion, he was Chief
Financial Officer at Novavax, Inc., a publicly traded biopharmaceutical company, from 2009 to 2013. From 2008 to 2009, Mr. Driscoll
served as Chief Executive Officer of Genelabs Technologies, Inc., a publicly traded biopharmaceutical and diagnostics company later
acquired by GlaxoSmithKline. He previously served as Genelabs’ Chief Financial Officer from 2007 to 2008. From 2000 to 2006, Mr. Driscoll
served as Chief Executive Officer at OXiGENE, Inc., a biopharmaceutical company. Mr. Driscoll has also served as Chairman of
the Board and Audit Committee Chair at OXiGENE and as a member of the Audit Committee for Cynapsus, a specialty central nervous system
pharmaceutical company which was sold to Sunovion Pharmaceuticals in 2016. Mr. Driscoll earned a Bachelor’s degree in accounting
and finance from Bentley University. Mr. Driscoll is a member of the board of directors of Cue Biopharma and MEI Pharma. Mr. Driscoll
chairs the Audit Committee and is a member of the Compensation Committee. Mr. Driscoll’s significant corporate management and
board experience at multiple biotechnology companies as well as his strong financial background make him a highly qualified member of
our Board of Directors.
Class III Directors – Term Expiring in 2023
Stefan D. Loren, Ph.D. Dr. Loren was
appointed as director of Cellectar in June 2015. Dr. Loren is currently a managing director with Oppenheimer and Company’s
healthcare investment banking group. Prior, he was the founder and managing member of Loren Capital Strategy (LCS), a strategic consulting
and investment firm focused on life science companies since February 2014. Prior to LCS, he headed the life science practice of Westwicke
Partners, a healthcare-focused consulting firm from July 2008 to February 2014. Prior to joining Westwicke, he worked as an
Analyst/Portfolio Manager with Perceptive Advisors, a health care hedge fund, and MTB Investment Advisors, a long-term oriented family
of equity funds. His focus areas included biotechnology, specialty pharmaceuticals, life science tools, and health care service companies.
Prior to moving to the buy side, Dr. Loren was Managing Director, Health Care Specialist/Desk Analyst for Legg Mason where he discovered,
evaluated, and communicated investment opportunities in the health care area to select clients. In addition, he assisted both advising
management teams on strategic options. He started his Wall Street career as a sell side analyst at Legg Mason covering biotechnology,
specialty pharmaceuticals, life science tools, pharmaceuticals, and chemistry outsourcing companies. In his research career, Dr. Loren
was an early member of Abbott Laboratories Advanced Technologies Division, analyzing and integrating new technological advances in Abbott’s
pharmaceutical research. Prior to that, he was a researcher at The Scripps Research Institute, a nonprofit American medical research facility,
working with Nobel Laureate K. Barry Sharpless on novel synthetic routes to chiral drugs. Dr. Loren received a doctorate in Organic
Chemistry from the University of California at Berkeley and an undergraduate degree in Chemistry from UCSD. His scientific work has been
featured in Scientific American, Time, Newsweek, and Discover, as well as other periodicals and journals. Dr. Loren is Chair of the
Nominating and Corporate Governance Committee and member of the Audit Committee. Dr. Loren’s extensive experience in the biotechnology
and financial industries make him a highly qualified member of our Board of Directors.
Douglas J. Swirsky. Mr. Swirsky was
appointed as a director of Cellectar in April 2017 and Chairman of our Board in August 2017. Since February 2021, Mr. Swirsky
has served as Chief Financial Officer and Treasurer of AavantiBio, a gene therapy company. Prior to AavantiBio, Mr. Swirsky served
as President, Chief Executive Officer and a director of Rexahn Pharmaceuticals, a clinical-stage biopharmaceutical company from November 2018
to November 2020; having previously served as Rexahn’s President and Chief Financial Officer from January 2018 until his
appointment as CEO. Prior to Rexahn, Mr. Swirsky served as President and Chief Executive Officer of GenVec, Inc., a clinical-stage
biopharmaceutical company, from 2014 to June 2017. From 2006 through 2014, Mr. Swirsky served as Senior Vice President, Chief
Financial Officer, Treasurer and Corporate Secretary of GenVec. Mr. Swirsky previously held investment banking positions at Stifel,
UBS, PaineWebber, Morgan Stanley, and Legg Mason. His experience also includes positions in public accounting and consulting. Mr. Swirsky
received his undergraduate degree in business administration from Boston University and his M.B.A. from the Kellogg School of Management
at Northwestern University. Mr. Swirsky is a Certified Public Accountant and a CFA® charterholder. Mr. Swirsky
currently serves on the board of directors of NeuroBo Pharmaceuticals, Inc. Within the past five years, Mr. Swirsky has also
served on the board of Fibrocell Science, Inc., Pernix Therapeutics Holdings, Inc. and GenVec, Inc.. Mr. Swirsky is
a member of the Compensation Committee and the Nominating and Corporate Governance Committee. Mr. Swirsky’s distinguished career
in financial services and corporate management, including his investment banking experience and his experience serving as a principal
executive officer and principal financial officer, make him a highly qualified member of our Board of Directors. Mr. Swirsky is National
Association of Corporate Directors (NACD) Directorship Certified™. The NACD Directorship Certification® program equips
directors with the foundation of knowledge sought by boards to effectively contribute in the boardroom. NACD Directorship Certified directors
establish themselves as committed to continuing education on emerging issues and helping to elevate the profession of directorship.
Class I Directors – Term Expiring 2024
John Neis. Mr. Neis has been a member
of the Board of Directors since 2008. Mr. Neis is a Managing Director of Venture Investors LLC, a healthcare-focused venture capital
firm. He led the firm and headed the firm’s Health Care practice from 2000 to 2021. He also serves on the Board of Directors of
privately held Delphinus Medical Technologies, Inc. and Health Scholars, Inc. He serves on the Board of Directors of the Wisconsin
Technology Council, the science and technology advisor to Wisconsin’s Governor and Legislature, and the Wisconsin Venture Capital
Association. He serves on the Board of Trustees at the Morgridge Institute for Research. He also serves on the Weinert Applied Ventures
Program Advisory Board in the School of Business and chairs the Tandem Press Advisory Board in the School of Education at the University
of Wisconsin – Madison. He holds a B.S. in finance from the University of Utah, and received a M.S. in Marketing and Finance from
the University of Wisconsin – Madison. He is a Chartered Financial Analyst. Mr. Neis’ extensive experience leading emerging
companies and his financial experience makes him a highly qualified member of our Board of Directors, chair of the Compensation Committee
and member of the Nominating and Corporate Governance Committee.
Asher Chanan-Khan, M.B.B.S., M.D. Dr. Chanan-Khan
was appointed as a director of Cellectar in June 2021. Dr. Chanan-Khan currently serves as Professor of Medicine &
Oncology at the Mayo Clinic School of Medicine, a position he has held since November 2011. He served as Chair, Department of Hematology &
Oncology at the Mayo Clinic, Florida from October 2011 to January 2018. Prior to joining Mayo Clinic, Dr. Chanan-Khan spent
over a decade as an attending physician at the Roswell Park Comprehensive Cancer Center. He was a tenured member of the Faculty of Medicine
at the State University of New York (SUNY) Buffalo. Dr. Chanan-Khan received his Bachelor of Medicine and Bachelor of Surgery from
the Allama Iqbal Medical College of Punjab University in Lahore Pakistan. He then completed an internship and residency in Internal Medicine
from the College of Physicians & Surgeons at Columbia University in New York followed by fellowships in Hematology and Medical
Oncology from New York University. In addition, he also completed a fellowship in translational research from Dr. Takeshita’s
laboratory at NYU. Dr. Chanan-Khan’s extensive experience in oncology and hematology make him a highly qualified member of
our Board of Directors, as well as member of the Audit Committee.
Executive Officers Who Are Not Directors
Jarrod Longcor. Mr. Longcor was appointed
Chief Operating Officer in February 2022. He previously served as Chief Business Officer from September 2017 to January 2022
and Senior Vice President of Corporate Development and Operations from July 2016 to August 2017. Mr. Longcor brings years
of pharmaceutical and biotech experience to Cellectar and was previously the Chief Business Officer for Avillion LLP, a drug development
company. In this role, he was responsible for executing the company’s unique co-development partnership strategy. Prior to Avillion,
Mr. Longcor was the Vice President of Corporate Development for Rib-X Pharmaceuticals, Inc. (now Melinta Therapeutics), a publicly-traded
biopharmaceutical company where he was responsible for identifying and concluding several critical collaborations for the company, including
a major discovery collaboration with Sanofi Aventis valued over $700M. Prior to Rib-X, Mr. Longcor held key positions in several
small to midsized biotech companies where he was responsible for business development, strategic planning and operations. Mr. Longcor
holds a B.S. from Dickinson College, a M.S. from Boston University School of Medicine and an M.B.A. from Saint Joseph’s University’s
Haub School of Business.
Chad J. Kolean. Mr. Kolean was appointed
our Vice President and Chief Financial Officer in February 2022 and our Secretary in April 2022. Mr. Kolean has more than
30 years of experience at both public and private companies. Most recently, he served as Chief Financial Officer of Vivex Biologics, Inc.,
a developer, manufacturer and distributor of regenerative medical products from October 2019 to January 2022. Prior to his service
at Vivex Biologics, Inc., Mr. Kolean served as Chief Financial Officer of Titan Spine, Inc., a designer, manufacturer and
distributor of titanium spinal implants from September 2017 to September 2019 (Titan was acquired by Medtronic plc in June 2019).
Prior to his time at Vivex, Mr. Kolean served as Chief Financial Officer of Cellectar from May 2014 to September 2017.
Before that, Mr. Kolean served as Chief Financial Officer of Pioneer Surgical Technology, Inc., a global manufacturer and distributor
of spinal, biological and orthopedic implants from April 2012 until its acquisition by RTI Biologics in July 2013, and Chief
Accounting Officer from September 2011 to March 2012. Prior to Pioneer, Mr. Kolean was the Corporate Controller of TomoTherapy, Inc.,
a publicly traded developer and manufacturer of radiation oncology equipment from July 2010 to August 2011 (TomoTherapy merged
with Accuray Incorporated in June 2011). Mr. Kolean also served as Director of Financial Reporting for Pioneer Surgical Technology, Inc.
from March 2009 to July 2010. From 2001 to 2008, Mr. Kolean held a number of leadership positions at Metavante Corporation,
a provider of banking and payments technologies and services to financial institutions, including: Director of Planning, Analysis and
Reporting, Vice President and FSG Controller and Vice President of Shared Services. Prior to his tenure at Metavante, Mr. Kolean
held leadership roles at Snap-On Inc., Herman Miller, Inc. and Kaydon Corporation. Mr. Kolean began his career at Arthur Andersen
LLP where he practiced as a certified public accountant. Mr. Kolean holds a B.A. in Business Administration from Hope College.
CORPORATE GOVERNANCE
Classified Board of Directors
Our Board consists of six members and is divided
into three classes of directors that serve staggered three-year terms. At each annual meeting of stockholders, a class of directors will
be elected for a three-year term to succeed the same class whose term is then expiring. As a result, only one class of directors will
be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year
terms.
Director Independence
Our Board of Directors has determined that, with
the exception of Mr. Caruso who is our employee, all of the members of our Board of Directors are “independent directors”
under the applicable rules and regulations of the SEC and the listing requirements of the Nasdaq Stock Market. Our Board of Directors
has also determined that each member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee
is an “independent director” under the rules of the Nasdaq Stock Market applicable to such committees.
Board Leadership Structure
The Board does not have a formal policy on whether
the roles of Chairman of the Board and Chief Executive Officer should be separate and believes that it should retain the flexibility to
make this determination in the manner it believes will provide the most appropriate leadership for our Company from time to time. Currently,
we split these positions with Douglas Swirsky serving as Chairman of the Board and James V. Caruso serving as Chief Executive Officer.
Board Diversity Matrix
The table below provides information regarding
certain diversity attributes of our Board members and nominees as of April 14, 2022, with categories as set forth by Nasdaq Listing
Rule 5605(f).
Board Diversity Matrix |
Total Number of Directors: 6 |
|
Female |
Male |
Gender Identity |
Directors |
— |
6 |
Demographic Background |
Asian |
— |
1 |
White |
— |
5 |
Board Committees
Our Board has established an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance Committee. Each committee operates pursuant to a written charter. The
composition and responsibilities of each of the committees of our Board of Directors are described below and copies of the charters are
available on our website at www.cellectar.com. The information in or accessible through our website is not incorporated into, and is not
considered part of, this proxy statement.
Audit Committee. Our Audit Committee is
currently composed of Mr. Driscoll (Chairman), Dr. Chanan-Khan and Dr. Loren. The Board has determined that each member
of our Audit Committee is independent within the meaning of Rule 10A-3 under the Exchange Act. The Board has also determined that
Mr. Driscoll is an “audit committee financial expert” within the meaning of the applicable SEC rules and regulations.
The Audit Committee provides the opportunity for direct contact between our independent registered public accounting firm and members
of the Board, and the independent registered public accounting firm reports directly to the Audit Committee. The Audit Committee assists
the Board in overseeing the integrity of our financial statements, our compliance with legal and regulatory requirements, and our independent
registered public accounting firm’s qualifications, independence and performance. The Audit Committee is directly responsible for
appointing, compensating, evaluating and, when necessary, terminating our independent registered public accounting firm. The Audit Committee
has established procedures for the treatment of complaints regarding accounting, internal accounting controls or auditing matters, including
procedures for the confidential and anonymous submission by our employees of concerns regarding questionable accounting, internal accounting
controls or auditing matters. Our Audit Committee met four times during the fiscal year ended December 31, 2021.
Compensation Committee. Our Compensation
Committee is currently composed of Mr. Neis (Chairman), Mr. Driscoll and Mr. Swirsky. The Board has determined that each
member of our Compensation Committee is independent under the Nasdaq listing standards and a “non-employee director” as defined
in Rule 16b-3 promulgated under the Exchange Act. The Compensation Committee’s responsibilities include providing recommendations
to the Board regarding the compensation levels of directors; approving, or recommending for approval by the Board, the compensation levels
of executive officers; providing recommendations to our Board regarding compensation programs; administering our incentive compensation
plans and equity-based plans; authorizing grants under our 2021 Plan; and authorizing other equity compensation arrangements. Our Compensation
Committee met twice during the fiscal year ended December 31, 2021. The Compensation Committee shall have the authority to retain,
at Company expense, independent advisers (including legal counsel, accountants and independent compensation or other consultants) as it
determines necessary to carry out its duties, and shall be directly responsible for the appointment, compensation and oversight of the
work of any compensation consultant, legal counsel and other adviser retained by the Committee. In 2021, the Compensation Committee retained
Aon/Radford as an independent consultant to advise it on compensation matters. Aon/Radford was engaged directly by and reported directly
to our Compensation Committee and did no other work for the Company. The Compensation Committee considered the applicable Nasdaq listing
rules and determined that Aon/Radford qualified as an independent compensation consultant in accordance with applicable SEC and Nasdaq
listing rules and regulations.
Nominating and Corporate Governance Committee.
Our Nominating and Corporate Governance Committee is currently composed of Dr. Loren (Chairman), Mr. Neis and Mr. Swirsky.
The Board has determined that each member of our Nominating and Corporate Governance Committee is independent under the applicable Nasdaq
listing standards. The Nominating and Corporate Governance Committee’s responsibilities include, to the extent deemed necessary
or appropriate by the committee: developing and recommending to the Board criteria for the selection of individuals to be considered as
candidates for election to the Board; identifying individuals qualified to become members of the Board; making recommendations to the
Board regarding its size and composition; approving director nominations to be presented for stockholder approval at the Company’s
annual meeting; approving nominations to fill any vacancies on the Board; and developing and recommending corporate governance principles
to the Board. Our Nominating and Corporate Governance Committee met once during the fiscal year ended December 31, 2021.
Director Qualification Standards
The process followed by the Nominating and Corporate
Governance Committee to identify and evaluate director candidates includes requests to the Board members and others for recommendations,
meetings from time to time to evaluate biographical information and background materials relating to potential candidates, and interviews
of selected candidates by members of the committee and other members of the Board. The committee may also solicit the opinions of third
parties with whom the potential candidate has had a business relationship. Once the committee is satisfied that it has collected sufficient
information on which to base a judgment, the committee votes on the candidate or candidates under consideration.
In evaluating the qualifications of any candidate
for director, the Nominating and Corporate Governance Committee considers, among other factors, the candidate’s depth of business
experience, reputation for personal integrity, understanding of financial matters, familiarity with the periodic financial reporting process,
reputation, degree of independence from management, possible conflicts of interest and willingness and ability to serve. The Nominating
and Corporate Governance Committee also considers the degree to which the candidate’s skills, experience and background complement
or duplicate those of our existing directors and the long-term interests of our stockholders. The Nominating and Corporate Governance
Committee considers factors such as gender, ethnicity/race and other characteristics when evaluating how a candidate for director could
contribute to the diversity of the Board. In the case of incumbent directors whose terms are set to expire, the Nominating and Corporate
Governance Committee also gives consideration to each director’s prior contributions to the Board. In selecting candidates to recommend
for nomination as a director, the Nominating and Corporate Governance Committee abides by our company-wide non-discrimination policy.
The Nominating and Corporate Governance Committee
will consider director candidates recommended by stockholders and uses the same process to evaluate candidates regardless of whether the
candidates were recommended by stockholders, directors, management or others. The Nominating and Corporate Governance Committee has not
adopted any particular method that stockholders must follow to make a recommendation. We suggest that stockholders make recommendations
by writing to the chairman of the Nominating and Corporate Governance Committee, in care of our offices, with sufficient information about
the candidate, his or her work experience, his or her qualifications for director, and his or her references to enable the Nominating
and Corporate Governance Committee to evaluate the candidacy properly. We also suggest that stockholders make their recommendations well
in advance of the anticipated mailing date of our next proxy statement so as to provide the Nominating and Corporate Governance Committee
an adequate opportunity to complete a thorough evaluation of the candidacy, including personal interviews.
Code of Business Conduct and Ethics
We have adopted a Code of Ethics applicable to our employees, officers and directors. A copy of our Code is available on our principal corporate website at www.cellectar.com.
Amendments to the Code or waivers of this Code may be made only by the Audit Committee and the Board of Directors and must be promptly
disclosed to stockholders as required by Nasdaq listing rules, SEC regulation or any other law or regulation.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee
is or has been an officer or employee of us or any of our subsidiaries. In addition, none of our executive officers serves or has served
as a member of the Board of Directors, Compensation Committee or other board committee performing equivalent functions of any entity that
has one or more executive officers serving as one of our directors or on our Compensation Committee.
Role of the Board in Risk Oversight
Management is responsible for the day-to-day management
of the risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management.
In its risk oversight role, the Board is responsible for satisfying itself that our risk management processes are adequate and functioning
as designed. Our Board’s involvement in risk oversight includes receiving regular reports from members of management and evaluating
areas of material risk, including operational, cybersecurity and technology, financial, legal and compliance, regulatory, strategic and
competitive, and brand and reputational risks. As a smaller reporting company with a small Board of Directors, we believe it is appropriate
to have the involvement and input of all of our directors in risk oversight matters. In addition, the Board has delegated risk oversight
to each of its committees within their areas of responsibility. Our Compensation Committee assists the Board in its risk oversight function
by overseeing strategies related to our incentive compensation programs and key employee retention. Our Audit Committee assists the Board
in its risk oversight function by reviewing our system of disclosure controls and procedures and our internal control over financial reporting.
Our Nominating and Corporate Governance Committee assists the Board in its risk oversight function by managing risks associated with director
candidate selection, governance and succession matters. Our Nominating and Corporate Governance Committee also oversees the Company’s
environmental, sustainability and governance (ESG) efforts and related risks.
Evaluations of the Board of Directors
The Board of Directors evaluates
its performance and the performance of its committees and individual directors on an annual basis through an evaluation process administered
by our Nominating and Corporate Governance Committee. The Board of Directors discusses each evaluation to determine what, if any, actions
should be taken to improve the effectiveness of the Board of Directors or any committee thereof or of the directors.
Meetings of the Board of Directors
Board Meetings. Our Board of Directors held
four meetings during the fiscal year ended December 31, 2021. Each of our directors attended all of the meetings held by the Board
and the committees of the Board on which he served during the fiscal year ended December 31, 2021.
Meetings of Independent Directors. Our independent
directors are expected, but not required, to meet without management present at least twice per year.
Director Attendance at the Annual Meeting of Stockholders
We believe that there are benefits to having members
of the Board attend our annual meetings of stockholders. From time to time, however, a member of the Board might have a compelling and
legitimate reason for not attending. As a result, the Board has decided that director attendance at our annual general meetings of stockholders
should be encouraged, but not required. All of our directors attended the 2021 annual meeting of stockholders.
Prohibition on Hedging and Pledging of Company Securities
We maintain an insider trading policy that applies
to our officers, directors and employees that prohibits them from engaging in speculative transactions in our securities, such as short
sales, puts, calls, straddles, hedging or monetization transactions, including but not limited to prepaid variable forwards, equity swaps,
collars and exchange funds, or similar transactions. Since the adoption of our insider trading policy, the Audit Committee has not granted
any such exemptions to the policy’s general prohibition on hedging and pledging.
Communications with the Board
Stockholders and interested parties wishing to
communicate with the Board or any director or group of directors should direct their communications to: Secretary, Cellectar Biosciences, Inc.,
100 Campus Drive, Florham Park, New Jersey 07932. The Secretary will forward the stockholder or interested-party communication to the
Board or to any individual director or directors to whom the communication is directed; provided, however, that if the communication is
unduly hostile, profane, threatening, illegal or otherwise inappropriate, the Secretary has the authority to discard the communication
and take any appropriate legal action.
CERTAIN RELATIONSHIPS AND RELATED-PERSON TRANSACTIONS
We do not have a written policy for the review,
approval or ratification of transactions with related parties or conflicted transactions. When such transactions arise, they are referred
to the Audit Committee for consideration or referred to the Board of Directors for its consideration.
On August 11, 2020, we entered into an equity
distribution agreement with Oppenheimer pursuant to which we agreed to pay Oppenheimer a commission of 3.0% of the gross proceeds from
the sales of up to $14.5 million in our common stock, or up to $435,000. We sold shares having an aggregate offering price of approximately
$69,000 pursuant to the equity distribution agreement during 2021. Dr. Loren is currently a managing director with Oppenheimer in
its healthcare investment banking group. Dr. Loren did not participate in the agreement on behalf of the Company or Oppenheimer and
had no direct interest in the transaction.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
As of April 14, 2022, there were 61,101,251
shares of our common stock outstanding. The following table provides information regarding beneficial ownership of our common stock as
of April 14, 2022:
| • | each person known by us to be the beneficial owner of more than 5% of our common stock; |
| • | each executive officer named in the summary compensation table; and |
| • | all of our current directors and executive officers as a group. |
The address of each executive officer and director
is c/o Cellectar Biosciences, Inc., 100 Campus Drive, Florham Park, New Jersey 07932, except as otherwise indicated. The persons
named in this table have sole voting and investment power with respect to the shares listed, except as otherwise indicated. In these cases,
the information with respect to voting and investment power has been provided to us by the security holder. The identification of natural
persons having voting or investment power over securities held by a beneficial owner listed in the table below does not constitute an
admission of beneficial ownership of any such natural person. Shares included in the “Right to Acquire” column consist of
shares that may be purchased through the exercise of options or warrants that are exercisable within 60 days of April 14, 2022. The
information in the table below has not been adjusted to reflect the reverse stock split described in Proposal Three.
Name and Address of Beneficial Owner | |
Outstanding | | |
Right to Acquire | | |
Total | | |
Percentage | |
Rosalind Advisors, Inc. (1) | |
| 6,052,282 | | |
| — | | |
| 6,052,282 | | |
| 9.9 | % |
Laurence W. Lytton (2) | |
| 4,177,792 | | |
| — | | |
| 4,177,792 | | |
| 6.8 | % |
James V. Caruso (3) | |
| 86,231 | | |
| 892,953 | | |
| 979,184 | | |
| 1.6 | % |
Chad J. Kolean | |
| 240 | | |
| — | | |
| 240 | | |
| * | |
Jarrod Longcor (4) | |
| 102,148 | | |
| 312,275 | | |
| 414,423 | | |
| * | |
Frederick W. Driscoll | |
| 19,417 | | |
| 52,444 | | |
| 71,861 | | |
| * | |
Asher Chanan-Khan, M.B.B.S., M.D. | |
| — | | |
| — | | |
| — | | |
| * | |
Stefan D. Loren, Ph.D. | |
| — | | |
| 54,794 | | |
| 54,794 | | |
| * | |
John Neis (5) | |
| 62,609 | | |
| 54,844 | | |
| 117,453 | | |
| * | |
Douglas Swirsky | |
| 25,000 | | |
| 81,361 | | |
| 106,361 | | |
| * | |
John E. Friend II, M.D. (6) | |
| 3,333 | | |
| — | | |
| 3,333 | | |
| * | |
Dov Elefant (7) | |
| 11,755 | | |
| 2,174 | | |
| 13,924 | | |
| * | |
All current directors and officers as a group (8 persons) | |
| 295,645 | | |
| 1,448,671 | | |
| 1,744,316 | | |
| 2.8 | % |
| (1) | As reported in Schedule 13G/A filed with the SEC on January 21, 2022. Based on such 13G/A filing, each of Rosalind Advisors, Inc.,
Rosalind Master Fund L.P., Steven Salamon and Gilad Aharon has sole voting power over 0 shares, shared voting power over 6,052,282 shares,
sole dispositive power over 0 shares and shared dispositive power over 6,052,282 shares. The address of each of Rosalind Advisors, Inc.,
Steven Salamon and Gilad Aharon is 175 Bloor Street East, Suite 1316, North Tower, Toronto, Ontario, M4W 3R8 Canada. The address
of Rosalind Master Fund L.P. is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
| (2) | As reported in Schedule 13G/A filed with the SEC on February 15, 2022. Based on such 13G/A filing, Laurence W. Lytton has sole
voting power over 4,169,292 shares, shared voting power over 8,500 shares, sole dispositive power over 4,169,292 shares and shared dispositive
power over 8,500 shares. The principal business office address of Laurence W. Lytton is 467 Central Park West, New York, New York 10025. |
| (3) | Shares in the “Right to Acquire” column consist of (i) 10,870 shares of common stock issuable upon the exercise of
warrants held by Mr. Caruso and (ii) common stock issuable currently or within 60 days upon exercise of options to purchase
882,083 shares of common stock issued to Mr. Caruso. |
| (4) | Shares in the “Right to Acquire” column consist of (i) 32,609 shares of common stock issuable upon the exercise of
warrants held by Mr. Longcor and (ii) common stock issuable currently or within 60 days upon exercise of options to purchase
279,666 shares of common stock issued to Mr. Longcor. |
| (5) | Consists of shares of common stock held by Advantage Capital Wisconsin Partners I, Limited Partnership. Venture Investors LLC is the
submanager and special limited partner of Advantage Capital Wisconsin Partners I, Limited Partnership. The investment decisions of Venture
Investors LLC are made collectively by five managers, including Mr. Neis. Each such manager and Mr. Neis disclaim such beneficial
ownership except to the extent of his pecuniary interest therein. The address of Mr. Neis is c/o Venture Investors LLC, 505 South
Rosa Road, #201, Madison, Wisconsin 53719. Shares in the “Right to Acquire” column consist of common stock issuable currently
or within 60 days upon exercise of options to purchase 54,844 shares of common stock issued to Mr. Neis in his capacity as director. |
| (6) | Dr. Friend resigned from the position of Vice President and Chief Medical Officer on November 2, 2021. His beneficial ownership
is reported as of the date of his resignation. |
| (7) | Mr. Elefant resigned from the position of Vice President and Chief Financial Officer on February 22, 2022. |
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
This section provides information, in tabular and
narrative formats specified in applicable SEC rules, regarding the amounts of compensation paid to each of our named executive officers,
or NEOs and related information. As a smaller reporting company, the Company has presented such information in accordance with the scaled
disclosure requirements permitted under applicable SEC regulations.
The following table sets forth certain information
concerning all cash and non-cash compensation awarded to, earned by or paid to our each of NEOs for the years ended 2021 and 2020:
Summary Compensation Table
Name and Principal Position | |
Year | | |
Salary ($) | | |
Non-Equity
Incentive Plan
Compensation ($) (1) | | |
Option Awards ($) (2) | | |
Other
Compensation
($) (3) | | |
Total ($) | |
James V. Caruso | |
| 2021 | | |
| 522,500 | | |
| 156,750 | | |
| 1,472,000 | | |
| — | | |
| 2,151,250 | |
President and Chief Executive Officer | |
| 2020 | | |
| 475,000 | | |
| 332,500 | | |
| 208,740 | | |
| — | | |
| 1,016,240 | |
Jarrod Longcor | |
| 2021 | | |
| 385,037 | | |
| 92,409 | | |
| 414,000 | | |
| — | | |
| 891,446 | |
Chief Operating Officer and Former Chief Business Officer (4) | |
| 2020 | | |
| 353,245 | | |
| 137,766 | | |
| 83,496 | | |
| — | | |
| 574,507 | |
John E. Friend II, M.D. | |
| 2021 | | |
| 376,364 | | |
| — | | |
| 303,600 | | |
| 26,585 | | |
| 706,549 | |
Former Vice President and Chief Medical Officer (5) | |
| 2020 | | |
| 200,000 | | |
| 78,000 | | |
| 108,310 | | |
| — | | |
| 386,310 | |
Dov Elefant | |
| 2021 | | |
| 356,895 | | |
| 85,655 | | |
| 395,600 | | |
| — | | |
| 838,150 | |
Former Vice President and Chief Financial Officer (6) | |
| 2020 | | |
| 324,450 | | |
| 126,536 | | |
| 20,874 | | |
| — | | |
| 471,860 | |
| (1) | Amounts
in this column represent bonuses paid by the Compensation Committee based on its annual review
of the performance of the executive officers against predetermined financial and strategic
objectives. Executive officers are paid the same percentage upon the achievement of financial
objectives and may be paid varied percentages upon the achievement of strategic objectives
depending on the subject matter. |
| (2) | The
reported amounts represent the aggregate grant date fair value computed in accordance with
ASC 718. All assumptions made regarding the valuation of equity awards can be referenced
in Note 7 to the financial statements included in our Annual Report on Form 10-K filed
with the SEC on March 21, 2022. |
| (3) | The
methodology used to compute the aggregate incremental cost of perquisites and other personal
benefits for each individual NEO is based on the total cost to the Company, and such costs
are required to be reported under SEC rules when the total costs are equal to or greater
than $10,000 in the aggregate for a NEO. |
| (4) | Mr. Longcor
was promoted to the Company’s Chief Operating Officer on February 22, 2022. He
had previously served as the Company’s Chief Business Officer and Senior Vice President
of Operations since 2017. |
| (5) | Dr. Friend
served as the Company’s Vice President and Chief Medical Officer from July 1,
2020 until his resignation effective November 2, 2021. The amount included in “Other
Compensation” for Dr. Friend represents his accrued but unused vacation time as
of the time of his resignation. |
| (6) | Mr. Elefant
resigned from the position of Vice President and Chief Financial Officer on February 22,
2022 and was succeeded by the Company’s current Chief Financial Officer, Chad J. Kolean. |
Employment Agreements
James V. Caruso. We entered into
an employment agreement with Mr. Caruso as of June 15, 2015, as amended and restated on April 15, 2019, pursuant to
which Mr. Caruso serves as President and Chief Executive Officer of the Company. Under the agreement, the Company pays
Mr. Caruso a base salary that is adjusted from time to time. Mr. Caruso is also eligible for an annual bonus, based on
performance, with an initial target of up to 50% of his base salary at the discretion of the Compensation Committee. If
Mr. Caruso is terminated other than for cause or by Mr. Caruso for good reason within 12 months after a change in control
(i.e. double trigger), he is entitled to severance in an amount equal to (i) 24 months of base salary, (ii) his then applicable
target bonus payable over 24 months (a total of 1.5x the annual target bonus payable at the time of termination) and (iii) 24 months
of payment or reimbursement of health insurance (equal to the premium paid by the Company prior to the date of termination), each
payable in installments over 24 months. Following a termination of employment by the Company without cause or by Mr. Caruso for
good reason that is not within 12 months after a change in control, Mr. Caruso is entitled to severance in an amount equal to
12 months base salary plus payment or reimbursement of health insurance for 12 months (equal to the premium paid by the Company
prior to the date of termination). Each of the foregoing severance benefits is conditioned on Mr. Caruso’s execution of a
release agreement in favor of the Company.
Dov Elefant. We entered into an
employment agreement with Mr. Elefant as of August 15, 2019, pursuant to which Mr. Elefant served as Vice President
and Chief Financial Officer of the Company. Under the agreement, the Company paid Mr. Elefant a base salary that was adjusted
from time to time. Further, Mr. Elefant was eligible for an annual bonus, based on performance, with an initial target of up to
30% of his base salary. If Mr. Elefant were terminated other than for cause or by Mr. Elefant for good reason, contingent
upon the execution of a release agreement in favor of the Company, Mr. Elefant would have been entitled to (i) severance
in an amount equal to nine months of 75% of Mr. Elefant’s annual base salary, provided that if such termination occurred
within 12 months after a change in control (i.e. double trigger), such severance would have been increased to 18 months of
Mr. Elefant’s full base salary, each payable in monthly installments, (ii) payment or reimbursement of health
insurance (for nine or 18 months, as applicable), each payable in monthly installments, (iii) a payment amount equal to the
annual bonus Mr. Elefant would have received for the calendar year in which the termination occurred prorated for the number of
days elapsed in such year, and (iv) outplacement services not to exceed $7,500. Mr. Elefant voluntarily resigned (i.e.,
not for good reason) from the position of Vice President and Chief Financial Officer on February 22, 2022.
Jarrod Longcor. We entered into an
employment agreement with Mr. Longcor as of July 15, 2016, as amended and restated on April 15, 2019 and amended on November 10,
2019, pursuant to which Mr. Longcor serves as the Chief Operating Officer of the Company. Under the agreement, the Company is paying
Mr. Longcor a base salary that is adjusted from time to time. Mr. Longcor is eligible for an annual bonus, based on performance,
with an initial target of up to 30% of his base salary. If Mr. Longcor’s employment is terminated other than for cause or by
Mr. Longcor for good reason, contingent upon the execution of a release agreement in favor of the Company, Mr. Longcor is entitled
to (i) severance in an amount equal to nine months of 75% of Mr. Longcor’s annual base salary, provided that if such termination
occurs within 12 months after a change in control (i.e. double trigger), such severance is increased to 18 months of Mr. Longcor’s
full base salary, each payable in monthly installments, (ii) payment or reimbursement of health insurance (for nine or 18 months,
as applicable), each payable in monthly installments, (iii) a payment amount equal to the annual bonus Mr. Longcor would have
received for the calendar year in which the termination occurred prorated for the number of days elapsed in such year, and (iv) outplacement
services not to exceed $7,500.
John E. Friend II, M.D. We entered
into an employment agreement with Dr. Friend as of July 1, 2020, pursuant to which Dr. Friend served as Vice President
and Chief Medical Officer of the Company. Under the agreement, the Company paid Dr. Friend a base salary that was adjusted from time
to time. Further, Dr. Friend was eligible for an annual bonus, based on performance, with an initial target of up to 30% of his base
salary. If Dr. Friend is terminated other than for cause or by Dr. Friend for good reason, contingent upon the execution of
a release agreement in favor of the Company, Dr. Friend would have been entitled to (i) severance in an amount equal to nine
months of 75% of Dr. Friend’s annual base salary, provided that if such termination occurred within 12 months after a change
in control (i.e. double trigger), such severance would have been increased to 12 months of Dr. Friend’s full base salary, each
payable in monthly installments, (ii) payment or reimbursement of health insurance (for nine 9 or 12 months, as applicable), each
payable in monthly installments, (iii) a payment amount equal to the annual bonus Dr. Friend would have received for the calendar
year in which the termination occurred prorated for the number of days elapsed in such year, and (iv) outplacement services not to
exceed $7,500. Dr. Friend voluntarily resigned (i.e., not for good reason) as the Company’s Vice President and Chief Medical
Officer effective November 1, 2021.
Outstanding Equity Awards at Fiscal Year-End
| |
| |
Option Awards | | |
| |
Stock Awards | |
Name | |
Date of Award | |
Number of securities underlying unexercised options (# exercisable) | | |
Number of securities underlying unexercised options (# unexercisable) | | |
Option Exercise Price ($/share) | | |
Option Expiration date | |
Number of Shares or Units of Stock that Have Not Vested (#) | | |
Market Value of Shares or Units of Stock that Have Not Vested ($) | |
James V. Caruso | |
3/4/2021(7) | |
| — | | |
| 1,600,000 | | |
| 1.74 | | |
3/4/2031 | |
| — | | |
| | |
| |
2/3/2020(7) | |
| 33,333 | | |
| 66,667 | | |
| 2.71 | | |
2/3/2030 | |
| — | | |
| — | |
| |
1/17/2019(1) | |
| 50,000 | | |
| 25,000 | | |
| 1.99 | | |
1/17/2029 | |
| — | | |
| — | |
| |
10/12/2018(2) | |
| 150,000 | | |
| — | | |
| 2.61 | | |
10/12/2028 | |
| — | | |
| — | |
| |
5/12/2016(4) | |
| 20,000 | | |
| — | | |
| 14.80 | | |
5/12/2026 | |
| — | | |
| — | |
| |
6/15/2015(5) | |
| 3,750 | | |
| — | | |
| 264.00 | | |
6/15/2025 | |
| — | | |
| — | |
Dov Elefant (8) | |
3/4/2021(7) | |
| — | | |
| 430,000 | | |
| 1.74 | | |
3/4/2031 | |
| — | | |
| — | |
| |
2/3/2020(7) | |
| 3,333 | | |
| 6,667 | | |
| 2.71 | | |
2/3/2030 | |
| — | | |
| — | |
| |
9/10/2019(3) | |
| 60,000 | | |
| 30,000 | | |
| 2.32 | | |
9/10/2029 | |
| — | | |
| — | |
Jarrod Longcor | |
3/4/2021(7) | |
| — | | |
| 450,000 | | |
| 1.74 | | |
3/4/2031 | |
| — | | |
| — | |
| |
2/3/2020(7) | |
| 13,333 | | |
| 26,667 | | |
| 2.71 | | |
2/3/2030 | |
| — | | |
| — | |
| |
1/17/2019(1) | |
| 19,166 | | |
| 10,834 | | |
| 1.99 | | |
1/17/2029 | |
| — | | |
| — | |
| |
10/12/2018(6) | |
| 63,000 | | |
| — | | |
| 2.61 | | |
10/12/2028 | |
| — | | |
| — | |
| |
9/18/2017(4) | |
| 2,500 | | |
| — | | |
| 18.30 | | |
9/18/2027 | |
| — | | |
| — | |
| |
7/15/2016(4) | |
| 7,500 | | |
| — | | |
| 29.30 | | |
7/15/2026 | |
| — | | |
| — | |
The following table sets forth certain information
with respect to outstanding equity awards as of December 31, 2021 with respect to our NEOs:
| (1) | These shares vest in increments of one-third at first anniversary from grant date and then vesting in 24 equal monthly installments
over a 24-month period beginning on the first anniversary of the grant date. |
| (2) | This option grant was divided into a definitive grant of 70,950 shares, which vested on October 12, 2019, and a contingent grant
of 79,050 shares, which vest in 24 equal monthly installments over a 24-month period beginning on the first anniversary of the grant date. |
| (3) | These shares vest annually in increments of one-third over three years from the date of grant. |
| (4) | These shares vest quarterly in increments of one-twelfth over three years from the date of grant. The exercise price equals the closing
price on the date of grant. |
| (5) | These shares vest annually in increments of one-fourth over four years from the date of grant. The exercise price equals the closing
price on the date of grant. |
| (6) | This option grant was divided into a definitive grant of 29,820 shares which vested on October 12, 2019, and a contingent grant
of 33,180 shares, which vested in 24 equal monthly installments over a 24-month period beginning on the first anniversary of the grant
date. |
| (7) | These shares vest annually in increments of one-third over three years from the date of grant. The exercise price equals the closing
price on the date of grant. |
| (8) | Mr. Elefant resigned from the position of Vice President and Chief Financial Officer on February 22, 2022, at which time
all of his then-unvested stock options were forfeited. His vested stock options remained exercisable for 30 days following his resignation. |
Pursuant to the terms of the option award agreements, options granted
pursuant to the Amended and Restated 2015 Stock Incentive Plan and the 2021 Plan become fully vested upon a termination event within one
year following a change in control, as defined therein. A termination event is defined as either termination of employment other than
for cause or constructive termination resulting from a significant reduction in either the nature or scope of duties and responsibilities,
a reduction in compensation or a required relocation.
Director Compensation
The following table sets forth certain information about the compensation
of our non-employee directors who served during the year ended December 31, 2021:
Name | |
Year | |
Director Fees ($)(1) | | |
Option Awards ($) | | |
Total ($) | |
Asher Chanan-Khan, M.B.B.S., M.D. (2) | |
2021 | |
$ | 30,000 | | |
$ | 66,300(4) | | |
$ | 96,300 | |
Frederick W. Driscoll | |
2021 | |
| 60,000 | | |
| 66,300(4) | | |
| 126,300 | |
Stephen A. Hill, M.D. (3) | |
2021 | |
| 30,000 | | |
| 42,500(4) | | |
| 72,500 | |
Stefan D. Loren, Ph.D. | |
2021 | |
| 60,000 | | |
| 66,300(4) | | |
| 126,300 | |
John Neis | |
2021 | |
| 60,000 | | |
| 66,300(4) | | |
| 126,300 | |
Douglas J. Swirsky | |
2021 | |
| 60,000 | | |
| 99,450(4) | | |
| 159,450 | |
| (1) | Director fees consist of annual cash fees for service. |
| (2) | Dr. Chanan-Khan was appointed as a director of the Company effective as of June 24, 2021. |
| (3) | Dr. Hill served as a director of the Company until the 2021 Annual Meeting of Stockholders on June 23, 2021. |
| (4) | Granted on June 30, 2021 at an exercise price of $1.19 per share, which cliff vest on the first anniversary of the grant
date. All assumptions made regarding the valuation of equity awards can be referenced in Note 7 to the financial statements included
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 21, 2022. |
During 2021, we paid each of our non-employee directors
a quarterly cash fee of $15,000. We reimbursed directors for reasonable out-of-pocket expenses incurred in attending Board and committee
meetings and undertaking certain matters on our behalf. Mr. Swirsky receives additional option awards for his service as Chairman
of the Board of the Company. Directors who are our employees do not receive additional fees for their services as directors.
The aggregate number of option awards outstanding
as of December 31, 2021 for each non-employee director was as follows:
Name and Principal Position | |
Stock Options Outstanding | |
Frederick W. Driscoll | |
| 45,500 | |
Stephen A. Hill | |
| 122,929 | |
Stefan D. Loren, Ph.D. | |
| 47,850 | |
John Neis | |
| 47,900 | |
Douglas J. Swirsky | |
| 70,250 | |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of
December 31, 2021 regarding the number of shares of our common stock that may be issued under our equity compensation plans.
Plan Category | |
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) | | |
Weighted Average Exercise Price of Outstanding Options and Rights (b) | | |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |
Equity compensation plans approved by security holders (1) | |
| 4,136,950 | (2) | |
$ | 1.98 | (3) | |
| 3,521,949 | (4) |
Equity compensation plans not approved by security holders | |
| 101,250 | | |
$ | 14.01 | | |
| n/a | |
Total | |
| 4,238,200 | | |
$ | 2.27 | | |
| 3,521,949 | |
| (1) | Includes our Amended and Restated 2015 Stock Incentive Plan and the 2021 Plan. If Proposal Two is approved
by our stockholders at the annual meeting, the number of shares of our common stock remaining available for issuance under our equity
compensation plans will increase by 5,000,000 shares to 6,605,449 shares. If the reverse stock split described in Proposal Three is approved
by our stockholders, then, in accordance with the adjustment provisions set forth in the 2021 Plan, the number of shares of our common
stock available for grants and awards under the 2021 Plan will be proportionately adjusted based on the ratio elected by our Board within
the Split Ratio Range, as described further in Proposal Three. |
AUDIT COMMITTEE REPORT
The Board appointed the Audit Committee to review
the Company’s financial statements and financial reporting procedures, the adequacy and effectiveness of its accounting and financial
controls and the independence and performance of its independent registered public accounting firm. The Audit Committee also selects our
independent registered public accounting firm.
The Company’s management is responsible for
the financial reporting process, including the system of internal controls, and for the preparation of financial statements in accordance
with generally accepted accounting principles. The Company’s independent auditors are responsible for auditing those financial statements
and affirming their independence on an annual basis. Our responsibility is to monitor and review these processes. However, we are not
professionally engaged in the practice of accounting or auditing and are not experts in the fields of accounting or auditing, including
with respect to auditor independence. We have relied, without independent verification, on the information provided to us and on the representations
made by the Company’s management and independent registered public accounting firm.
In fulfilling our oversight responsibilities, we
have:
| • | reviewed and discussed our financial statements as of and for the fiscal year ended December 31, 2021 with management and Baker
Tilly US, LLP; |
| • | discussed with Baker Tilly US, LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting
Oversight Board and the SEC; |
| • | received the written disclosures and the letter from Baker Tilly US, LLP required by the applicable requirements of the Public Company
Accounting Oversight Board; and |
| • | discussed the independence of Baker Tilly US, LLP with that firm. |
Based on the Audit Committee’s review and
discussions noted above, the Audit Committee recommended to our Board of Directors, and our Board of Directors approved, that the audited
financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with
the SEC. The Audit Committee also appointed Baker Tilly US, LLP as our independent registered public accounting firm for fiscal year ending
December 31, 2022.
Submitted by the Audit Committee of our Board of Directors,
Frederick W. Driscoll, Chairman
Asher Chanan-Khan, M.B.B.S., M.D.
Stefan D. Loren, Ph.D.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, file electronically with the SEC our annual,
quarterly and current reports, proxy statements and other information. We make available on the investor relations page of our website
at https://investor.cellectar.com/ free of charge, copies of these reports, as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov. The information
in or accessible through the websites referred to above are not incorporated into, and are not considered part of, this proxy statement.
Further, our references to the URLs for these websites are intended to be inactive textual references only.
You should rely on the information
contained in this proxy statement to vote your shares at the Annual Meeting. We have not authorized anyone to provide you with information
that is different from what is contained in this proxy statement. This proxy statement is dated April 29, 2022. You should not assume that
the information contained in this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement
to stockholders at any time after that date does not create an implication to the contrary. This proxy statement does not constitute a
solicitation of a proxy in any jurisdiction where, or to or from any person to whom, it is unlawful to make such proxy solicitations in
such jurisdiction.
FORM 10-K
Our Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 is available on the investor relations page of our website at
https://investor.cellectar.com.
We will provide, without charge, to any
stockholder of record or beneficial owner of our common stock as of the Record Date, upon the written or oral request of any such
persons, a copy or our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC.
Request for such copies should be addressed to the Secretary at: Investor Relations, Cellectar Biosciences, Inc., 100 Campus
Drive, Florham Park, New Jersey 07932, by telephone at (608) 441-8120 or by e-mail to investors@cellectar.com.
Please include your contact information with the
request. The exhibits set forth on the exhibit index of the Form 10-K may be made available at a reasonable charge.
APPENDIX A
AMENDMENT NO. 1 TO
Cellectar
Biosciences, Inc.
2021 STOCK INCENTIVE PLAN
This Amendment No. 1
(this “Amendment”) to the 2021 Stock Incentive Plan (the “Plan”) of Cellectar Biosciences, Inc.
(the “Company”) is effective as of the date of approval by the Board of Directors of the Company (the “Board”),
contingent on the approval of the stockholders of the Company (the “Stockholders”). All capitalized terms used but
not defined in this Amendment shall have the meanings assigned to such terms in the Plan.
W I T N E S S E T H:
WHEREAS, Section 14
of the Plan reserves to the Board the right to amend the Plan at any time;
WHEREAS, Nasdaq Listing
Rule 5635(c) requires that a Nasdaq listed company seek stockholder approval when it materially amends an equity compensation
plan such as the Plan;
WHEREAS, the Plan initially
authorized up to 6,000,000 shares of Stock to be issued in respect of Awards granted under the Plan, subject to adjustment as provided
in the Plan, plus the number of shares available under the Company’s 2015 Plan and 2006 Plan; and
WHEREAS, the Board
and the Stockholders desire to increase the number of shares of Stock available for issuance under the Plan by 5,000,000 shares.
NOW, THEREFORE, the
Plan is hereby amended as follows:
RESOLVED, Section 3(a) of
the Plan is hereby amended and restated in its entirety, to read as follows:
“(a) Shares Issuable.
The maximum number of shares of Stock which may be issued in respect of Awards (including Stock Appreciation Rights) granted under the
Plan, subject to adjustment upon changes in capitalization of the Company as provided in this Section 3, shall be 11,000,000 shares,
plus an additional number of shares, that are currently available under the Company’s Amended and Restated 2015 Stock Incentive
Plan (the “2015 Plan”) and Amended and Restated 2006 Stock Incentive Plan (the “2006 Plan”) or may be added back
to the Plan pursuant to the next sentence, in each case subject to adjustment upon changes in capitalization of the Company as provided
in this Section 3. All of the shares described in the previous sentence may be granted as Incentive Stock Options. For purposes of
this limitation, the shares of Stock underlying any Awards, or awards under the 2015 Plan or 2006 Plan, as applicable, which are forfeited,
cancelled, reacquired by the Company or otherwise terminated (other than (i) Shares tendered as payment for an option exercise; (ii) Shares
withheld to cover taxes; (iii) Shares added back that have been repurchased by the Company using stock option proceeds; and (iv) stock-settled
awards where only the actual shares delivered count against the Plan) shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan. Shares issued under the Plan may be authorized but unissued shares or shares reacquired by the Company.”;
and
RESOLVED FURTHER, except as set forth herein,
the Plan shall remain in full force and effect without modification.
* * *
APPENDIX B
FORM OF AMENDMENT TO SECOND AMENDED AND
RESTATED
CERTIFICATE OF INCORPORATION
OF
CELLECTAR BIOSCIENCES, INC.
Cellectar Biosciences, Inc., (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, hereby certifies as follows:
1. This
Certificate of Amendment amends the provisions of the Corporation’s Second Amended and Restated Certificate of Incorporation, as
amended and filed with the Secretary of State of the State of Delaware (the “Second Amended and Restated Certificate of Incorporation”).
2. The first paragraph of Article FOURTH of the Second Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety as follows:
FOURTH: The aggregate number of shares
of stock that the Corporation shall have authority to issue is one hundred sixty million and seven thousand (160,007,000), of which one hundred sixty million (160,000,000) shares shall be designated ‘Common Stock’ and seven thousand (7,000) shares shall be designated ‘Preferred Stock.’ Shares of Common Stock and Preferred Stock shall have a par value
of $.00001 per share.
Upon the filing and effectiveness (the “Effective
Time”) pursuant to the General Corporation Law of the State of Delaware of this Certificate of Amendment to the Second
Amended and Restated Certificate of Incorporation of the Corporation, each [[*] ([*])]1
shares of common stock either issued and outstanding or held by the Corporation in treasury stock immediately prior to the Effective
Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one
(1) share of common stock (the “Reverse Stock Split”).
No fractional shares shall be issued in connection with the Reverse
Stock Split. In lieu thereof, the aggregate of all fractional shares otherwise issuable to the holders of record of common stock shall
be issued to the transfer agent, as agent for the accounts of all holders of record of common stock and otherwise entitled to have a fraction
of a share issued to them. The sale of all of the fractional interests will be effected by the transfer agent as soon as practicable after
the Effective Time on the basis of the prevailing market prices of the common stock at the time of the sale. After such sale, the transfer
agent will pay to such holders of record their pro rata share of the total net proceeds derived from the sale of the fractional interests.
3. The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
4. All other provisions of the Second Amended and Restated Certificate of Incorporation shall remain in full force and effect.
5. The foregoing amendment shall be effective as of 11:59 p.m., Eastern Time, on the date of filing with the Secretary of State of the State of Delaware.
1 The reverse stock split shall be at a ratio of not less
than 1:5 and not more than 1:10.
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D83868 - P73803 1. Election of Class II Directors Nominees: 1) James V. Caruso 2) Frederick W. Driscoll For Withhold For All A ll Al l Except ! ! ! ! ! ! ! ! ! ! ! ! To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below . CELLECTAR BIOSCIENCES, INC. The Board of Directors recommends you vote FOR the following: CELLECTAR BIOSCIENCES, INC. 100 CAMPUS DRIVE FLORHAM PARK, NJ 07932 Please sign exactly as your name(s) appear(s) hereon . When signing as attorney, executor, administrator, or other fiduciary, please give full title as such . Joint owners should each sign personally . All holders must sign . If a corporation or partnership, please sign in full corporate or partnership name by authorized officer . 3. To approve an amendment to our Second Amended and Restated Certificate of Incorporation to effect a reverse stock split of our common stock at a ratio between 1:5 and 1:10, if and when determined by our Board of Directors. 4. To ratify the appointment of Baker Tilly US, LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022. 5. Such other business as may properly come before the meeting or any adjournment thereof. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. 2. To approve an increase in the number of shares of common stock available for issuance under the 2021 Stock Incentive Plan by 5,000,000 shares. NOTE: The undersigned acknowledges receipt from the Company before the execution of this proxy of the Notice of Annual Meeting of Stockholders and a Proxy Statement for the Annual Meeting of Stockholders. For Against Abstain VOTE BY INTERNET - www . proxyvote . com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information . Vote by 11 : 59 p . m . Eastern Time on June 14 , 2022 . Follow the instructions to obtain your records and to create an electronic voting instruction form . ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e - mail or the Internet . To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years . VOTE BY PHONE - 1 - 800 - 690 - 6903 Use any touch - tone telephone to transmit your voting instructions . Vote by 11 : 59 p . m . Eastern Time on June 14 , 2022 . Have your proxy card in hand when you call and then follow the instructions . VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage - paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 . SCAN TO VIEW MATERIALS & VOTE w
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10 - K are available at www.proxyvote.com. D83869 - P73803 CELLECTAR BIOSCIENCES, INC. Annual Meeting of Stockholders June 15, 2022 10:00 AM, EDT This proxy is solicited by the Board of Directors The undersigned hereby appoints James Caruso, Chad Kolean and Asher Rubin, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Cellectar Biosciences, Inc . that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at 10 : 00 AM, EDT on June 15 , 2022 , at Cellectar's headquarters at 100 Campus Drive, Florham Park, New Jersey 07932 , and any adjournment or postponement thereof . This proxy, when properly executed, will be voted in the manner directed herein . If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations . Continued and to be signed on reverse side
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