Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Appointment
of President
On
June 10, 2021 (the “Effective Date”), the Board appointed Mr. Alexander Mironov as the Company’s President (the “Appointment”).
Mr.
Mironov, age 41, brings a wealth of knowledge from his over 20 years of experience leading business development, mergers, and acquisitions,
as well as corporate strategy in the pharmaceutical space, most recently at Covis Pharma, a global private pharmaceutical company backed
by Apollo Global Management, Inc., an investment manager with nearly half a trillion of total assets under management. Over his career,
Mr. Mironov has led transactions in the pharmaceutical space totaling over $5 billion in value including M&A, licensing, and equity
and debt financings. At Covis, he served as Chief Business Officer from 2016 to 2021, leading global business development and M&A,
corporate strategy, and life-cycle management, and taking responsibility for over half a dozen transformational transactions, which significantly
contributed to the accelerated growth and expansion of Covis to over 50 global markets and new therapeutic segments. His contributions
at Covis directly led to revenues increasing over 10x during his tenure. Prior to Covis, Mr. Mironov held similar roles focusing on a
buy and build strategy at Alvogen, Pernix Pharma, Esprit Pharma, EKR Therapeutics, and Valera Pharma.
In
connection with the Appointment, Mr. Mironov entered into an Employment Agreement (the “Employment Agreement”) with the Company.
The Employment Agreement is for an indefinite term and may be terminated with or without cause. Pursuant to the Employment Agreement,
Mr. Benathen will receive an annual base salary of $500,000.00 and shall be eligible to earn a performance bonus in such amount, if any,
as determined in the sole discretion of the Board, with a target amount of 20% of the base salary. To induce Mr. Mironov to enter into
the Employment Agreement, he was granted a performance-based grant of up to 300,000 restricted shares of the Company’s common stock
(the “Restricted Shares”), subject to, inter alia, his sourcing, and material contribution to, the consummation of
pharmaceutical deals, as set forth in more detail in the Employment Agreement. As a further inducement to enter into the Employment Agreement,
Mr. Mironov received stock options (the “Stock Options”) to purchase up to 200,000 shares of the Company’s common stock.
The Stock Options have a term of five years and shall vest in equal monthly tranches, based on the passage of time, over the 36 months,
beginning on the Effective Date.
Upon
termination of Mr. Mironov without cause, or upon his resignation for good reason, the Company shall pay or provide to Mr. Mironov severance
pay equal to his then current monthly base salary for twelve months from the date of termination, during which time Mr. Mironov shall
continue to receive all employee benefits and employee benefit plans as described in the Employment Agreement. As a full-time employee
of the Company, Mr. Mironov will be eligible to participate in all of the Company’s benefit programs.
Item
5.02 of this Current Report on Form 8-K contains only a brief description of the material terms of and does not purport to be a complete
description of the rights and obligations of the parties to the Employment Agreement, and such descriptions is qualified in its entirety
by reference to the full text of the Employment Agreement, which will be filed with the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2021.