Item 10. Directors, Executive Officers and Corporate Governance.
The following table contains
the name and age of our executive officers and directors as of April 29, 2022.
Name |
|
Age |
|
Position
Held |
Joshua R. Lamstein |
|
52 |
|
Chairman and Director |
Robert J. Gibson, CFA |
|
42 |
|
Vice Chairman, Secretary, Treasurer, and Director |
Ira Scott Greenspan |
|
63 |
|
Senior Advisor, Director and Executive Committee Chairman |
David A. Buckel, CMA |
|
60 |
|
Director |
Raphael (“Rafi”) Hofstein, Ph.D. |
|
72 |
|
Director |
David Weild IV |
|
65 |
|
Director |
Paul Hopper |
|
65 |
|
Director |
Ashish P. Sanghrajka |
|
48 |
|
Director |
Joshua R. Lamstein
has been a Chairman and a director since our inception. Mr. Lamstein became sole Chairman in October 2020. Mr. Lamstein has also been
our Principal Executive Officer since May 2020. Since 2014, Mr. Lamstein has also been Vice Chairman of HCFP and Co-Chairman and Co-Managing
Partner of HCFP/Capital Partners. HCFP/Capital Partners is a co-founder of Scopus. Mr. Lamstein is also a senior officer and/or
director of other portfolio companies of HCFP/Capital Partners. He also serves as a Venture Partner of a seed-stage venture fund with
approximately $100 million of assets under management. Mr. Lamstein has worked in venture capital and private equity for over
20 years, including as a Managing Director of GF Capital Private Equity Fund, a $240 million middle market private equity fund,
and as a Partner of LMS Capital, a FTSE 250 London Stock Exchange-listed investment trust. Mr. Lamstein initiated the trust’s
presence in San Francisco and Silicon Valley. He began his career in private equity at Apollo Advisors, a global alternative investment
manager now known as Apollo Global Management, Inc. Prior thereto he was an investment banker in New York and London at Lehman Brothers.
Mr. Lamstein has been a member of the board of directors of numerous private and public companies. We believe Mr. Lamstein
is well-qualified to be on our Board due to his broad experience in private equity, venture capital, and investing in and managing early-stage
ventures, his widespread relationships in the private equity and venture capital communities and his knowledge of public healthcare.
Mr. Lamstein received his B.A., with honors, from Colgate University and his M.B.A. from the MIT Sloan School of Management.
Robert J. Gibson, CFA has
been Vice Chairman, Secretary and Treasurer and a director since our inception. Mr. Gibson has also been our Principal Accounting Officer
and Principal Financial Officer since May 2020. Since May 2016, Mr. Gibson also has been an Executive Vice President of HCFP
and Co-Chairman of HCFP/Capital Markets LLC, a middle-market investment bank. Until joining HCFP, Mr. Gibson was Senior Vice President — Investment
Banking, specializing in biotechnology, biopharmaceutical and specialty pharmaceutical companies, at CRT Capital Group LLC, a middle
market investment bank. Mr. Gibson rejoined CRT in 2014 after having been previously employed at such firm from 2003 to 2008, most
recently as a Vice President — Investment Banking, specializing in healthcare. Mr. Gibson began his career in
the Healthcare Investment Banking Group at Bear, Stearns & Co. Inc. From 2009 to 2014, Mr. Gibson was Senior Vice President,
overseeing healthcare investments, at Balance Point Capital Partners, L.P., a middle market private equity fund, which, together with
a related fund, then had approximately $150 million of assets under management. We believe Mr. Gibson is well-qualified to
be on our Board due to his extensive experience in both investment banking and private equity, including advising, raising capital, and
investing in biotechnology, biopharmaceutical specialty pharmaceutical and other healthcare companies. Mr. Gibson is a Chartered Financial
Analyst, or CFA. Mr. Gibson received his B.A., magna cum laude, from Amherst College.
Ira Scott Greenspan has
been a Senior Advisor and director since our inception and Executive Committee Chairman since May 2019. Mr. Greenspan is Chairman
and Chief Executive Officer of HCFP and Co-Chairman and Co-Managing Partner of HCFP/Capital Partners, and certain other affiliates of
HCFP. Each of HCFP and Mr. Greenspan is a co-founder of Scopus. For more than 25 years, Mr. Greenspan has been a senior
executive, partner and/or director of HCFP and its predecessors and related entities, including having served as Chairman and Co-Managing
Partner of HCFP/Brenner Equity Partners, the indirect majority shareholder of HCFP/Brenner Securities LLC, a middle market investment
bank originally founded by former senior executives and directors of Drexel Burnham Lambert. For more than five years prior to entering
the financial services industry, Mr. Greenspan was a corporate and securities lawyer at leading New York law firms, including as
a Partner of the New York predecessor of Blank Rome. He began his law career at the New York predecessor of Sidley Austin. Mr. Greenspan
has been chairman and/or a member of the boards of directors of numerous public and private companies, most recently including: PAVmed
Inc., a publicly-traded multi-product medical device company (Nasdaq: “PAVM”), of which he was a co-founder and Senior Advisor
and/or director from inception in 2014 until October 2018. Mr. Greenspan worked in the Branch of Small Issues of the Division
of Corporation Finance in the New York Regional Office of the Securities and Exchange Commission during law school and advised family
offices on the then increasing internationalization of securities markets and the evolving extraterritorial scope of the U.S. securities
laws, resulting from both regulatory and judicial action. We believe Mr. Greenspan is well-qualified to be on our Board due to his
significant experience advising entrepreneurial growth companies as both a financial services executive and corporate and securities
lawyer, his pioneering role in numerous innovative corporate finance products and strategies, his role as a founder or founding advisor
of numerous private and public companies, including biopharmaceutical, biotechnology and other medical technology companies, his investment
experience with early-stage companies, his experience as a director of numerous private and publicly-traded companies, and his extensive
relationships in the financial community. Mr. Greenspan received his B.A., with high distinction, from Harpur College/Binghamton
University, where he was elected to Phi Beta Kappa and Pi Sigma Alpha and was the recipient of the University Foundation Award recognizing
him as one the top students in his graduating class. Mr. Greenspan received his J.D. from New York University School of Law, where
he was on the Editorial Board of the Annual Survey of American Law, an honorary law journal.
David A. Buckel, CMA joined
us as a director in December 2020 in connection with our IPO. He was a Senior Advisor to us from November 2019 until his appointment
as a director. Since 2007, Mr. Buckel has served as President and Managing Director of BVI Venture Services, an outsourced provider
of financial, accounting, management, and other professional services to private and small public companies. Mr. Buckel serves as
a director of SharpSpring, Inc. (Nasdaq: “SHSP”), a publicly-traded cloud-based marketing technology company, head of the
audit committee and a member of the nominating and corporate governance committees. From 2003 to 2007, Mr. Buckel served as Chief
Financial Officer of Internap Network Services Corporation (Nasdaq: “INAP”), a publicly-traded IT infrastructure services
company. Mr. Buckel previously served as an officer, Chief Financial Officer and/or director of numerous additional private and
Nasdaq-listed public companies. We believe Mr. Buckel is well-qualified to serve on our Board due to his broad experience as a board
member and Chief Financial Officer of numerous private and publicly-traded emerging growth companies, his deep knowledge of public accounting
and corporate governance, and his expertise in serving on board committees, especially as a member and/or head of public company audit
committees. Mr. Buckel received his B.S. in Accounting from Canisius College and his M.B.A. from the Syracuse University Martin
J. Whitman School of Management. Mr. Buckel is a Certified Management Accountant.
Raphael (“Rafi”)
Hofstein, Ph.D. joined us as a director in December 2020 in connection with our initial public offering (“IPO”)
and served as a director until January 2022. Dr. Hofstein rejoined us as a director in April 2022. From 2009 to March 2020, Dr. Hofstein
was President and Chief Executive Officer of Toronto Innovation Acceleration Partners, or TIAP. TIAP, formerly named MaRS Innovation,
is a consortium of leading universities, teaching hospitals and other institutions and research institutes with the mandate of identifying
life sciences and other technology research from within the consortium and investing in newly-created or other early-stage ventures organized
to advance and commercialize scientific breakthroughs. Industry partners of TIAP include Amgen, Baxter, GlaxoSmithKlein, Johnson &
Johnson, Merck, Pfizer, and Takeda. Over 50 new life sciences and other healthcare-related companies were launched and/or financed during
Dr. Hofstein’s tenure with TIAP. Dr. Hofstein has been a founder, executive and/or director, including serving as chairman,
with a number of TIAP biopharmaceutical, biotechnology and other healthcare-related portfolio companies, including: Fibrocor Therapeutics,
Inc., a private biotechnology company targeting fibrotic diseases; Encycle Therapeutics Inc., a private biotechnology company which was
acquired for consideration of up to approximately $80 million in 2019 by Zealand Pharma A/S (Nasdaq: “ZEAL”), a publicly-traded
biotechnology company; Notch Therapeutics Inc., a private biotechnology company focused on gene-edited T cell therapies, which has a
strategic partnership with Allogene Therapeutics, Inc. (Nasdaq: “ALLO”), a publicly-traded biotechnology company; and Triphase
Accelerator, a private Toronto-based drug development company which entered into a strategic partnership with Celgene relating to early-stage
oncology assets. From 1990 to 2009, Dr. Hofstein was President and Chief Executive Officer of Hadasit Ltd., the technology transfer
company of Hadassah University Hospital, the teaching hospital of Hebrew University. Dr. Hofstein also founded and, from 2006 to
2011, was Chairman of Hadasit Bio-Holdings Ltd., a then publicly-traded holding company for biopharmaceutical and biotechnology companies
(TASE: “HDST”). Dr. Hofstein has been a founder, executive and/or director, including serving as chairman, of subsidiaries
and affiliates of Hadasit, including: BioLineRx Ltd. (Nasdaq: “BLRX”); Exalenz Bioscience Ltd., a TASE-listed company which
was acquired by Meridian Bioscience, Inc. (Nasdaq: “VIVO”); and KAHR Medical Ltd., a private biotechnology company developing
immune-oncology therapies. During this period, Dr. Hofstein was also a Venture Partner at Medica Venture Partners, a leading medical
technology venture capital firm in Israel, and a director of Evogene Ltd., a publicly-traded company on Nasdaq (Nasdaq: “EVGN”),
and LifeBond Limited Ltd., which was acquired by C.R. Bard. Previously, Dr. Hofstein was Vice President — Business
Development for Ecogen Inc., a publicly-traded agricultural biotechnology company on Nasdaq until its acquisition by Monsanto, prior
to which he was a Scientific Director for Ecogen in Israel. Dr. Hofstein has also been an officer, director and/or advisor of numerous
not-for-profit life sciences-related entities, including: Centre for Commercialization of Regenerative Medicine, or CCRM, a public/private
consortium supporting the development of gene and cell therapies and regenerative medicine; Life Sciences Ontario, an organization seeking
to advance the life sciences sector in Ontario; and Clinical Trials Ontario, an independent organization established to advance patient
care. Previously, Dr. Hofstein was Scientific Director of Biotechnological Applications Ltd. and Manager of Research and Development
and Chief of Immunochemistry at the International Genetic Scientific Partnership, both pivotal organizations in the development of Israel’s
biotechnology industry. Dr. Hofstein co-founded the Israel Life Science Industry Organization, or ILSI, and the Israel Tech Transfer
Network, or ITTN, both private organizations seeking to advance the life sciences sector in Israel. We believe Dr. Hofstein is well-qualified
to be on our board of directors due to his broad experience across multiple scientific and medical sectors for numerous public and private
biopharmaceutical, biotechnology and pharmaceutical companies; his role as a founder or member of the founding team for many private
and public biopharmaceutical, biotechnology and other medical technology companies, including in his capacities as Chairman and/or President
and Chief Executive Officer of TIAP and Hadasit; his corporate governance experience gained by serving as a member of numerous board
of directors, including as chairman, and various board committees and his widespread relationships throughout the biotechnology ecosystem,
including entrepreneurs, managers and private equity and venture capital investors on a global basis. Dr. Hofstein received
his B.Sc. in Chemistry and Physics from Hebrew University and his M.Sc. and Ph.D. in Life Sciences and Chemistry from the Weizmann Institute
of Science. Dr. Hofstein was awarded the Chaim Weizmann Post-Doctoral Fellowship and the Hereditary Disease Foundation Fellowship
while completing his post-doctoral training and research in the Department of Neurobiology at Harvard Medical School.
David Weild IV joined
us as a director in December 2020 in connection with our IPO. He was a Senior Advisor to us from November 2019 until his appointment
as a director. For more than 15 years, Mr. Weild has been Chairman and Chief Executive Officer of Weild & Co. (including
its predecessors), a boutique investment bank focused on emerging growth companies. From 2008 to 2013, Mr. Weild also served concurrently
as Senior Advisor — Capital Markets for Grant Thornton, a global public accounting firm. From 2000 to 2003, Mr. Weild
was Vice Chairman of Nasdaq and served as a member of Nasdaq’s Executive Committee. For more than 13 years prior to joining
Nasdaq, Mr. Weild was an executive of Prudential Securities Inc., including Head of Corporate Finance, Head of the Global Equities
Transaction Group and President of Prudentialsecurities.com. Mr. Weild is a director of PAVmed Inc. (Nasdaq: “PAVM”)
and BioSig Technologies Inc. (Nasdaq: “BSGM”), both medical technology companies. Mr. Weild is a recognized expert on
capital formation and capital markets structure and co-authored a number of definitive white papers that were key catalysts for new legislation
and regulatory reforms, including the JOBS Act. We believe Mr. Weild is well-qualified to serve on our board our directors due to
his experience serving on the boards of directors of multiple medical technology companies, including his service on audit committees,
extensive expertise in corporate finance, his deep knowledge and recognized leadership in capital formation and capital markets structure
and his widespread relationships in the financial community. Mr. Weild received his B.A. from Wesleyan University and M.B.A. from
New York University Stern School of Business. Mr. Weild also studied at the Sorbonne, Ecoles des Hautes Etudes Commerciales (HEC
Paris) and the Stockholm School of Economics.
Paul Hopper has been
a director of the company since June 2020. Mr. Hopper was also co-chairman (non-executive) from June 2020 until October 2020. Mr. Hopper
is Executive Chairman of Chimeric Therapeutics Limited, a CAR-T cell therapy company, which completed an initial public offering and
began trading on the Australian Securities Exchange, or ASX (ASX: “CHM”), in January 2021. Mr. Hopper has also been a founder,
senior officer and/or director of other publicly-traded biopharmaceutical companies, predominantly on the ASX, including: Imugene Limited
(ASX: “IMU”); and Viralytics Ltd., previously traded on the ASX. Mr. Hopper is Chairman of the Life Sciences Portfolio Managers
Trust. Mr. Hopper received a B.A. from the University of New South Wales in Sydney, Australia.
Ashish P. Sanghrajka
has been a director of the company since June 2020. Mr. Sanghrajka was also President of the company from August 2019 until July 2021,
when his employment was terminated as described below. For more than 25 years prior to joining us, Mr. Sanghrajka was an investment banker
across multiple sectors, with a particular concentration in biotechnology, biopharmaceuticals, and pharmaceuticals. Most recently, Mr.
Sanghrajka was Managing Director — Equity Capital Markets, at Mizuho Securities USA. Prior to joining Mizuho in 2011,
Mr. Sanghrajka was a Managing Director in the United States for Collins Stewart, then a leading U.K.-based growth company investment
bank, which acquired C.E. Unterberg, Towbin and subsequently was acquired by Canaccord Financial Inc. From 2002 to 2010, Mr. Sanghrajka
was the Managing Partner of BIO-IB, a boutique investment bank specializing in licensing/partnering and mergers and acquisitions for
emerging private and publicly-held healthcare companies, with an emphasis on biotechnology, biopharmaceuticals and pharmaceuticals. From
1994 to 2002, Mr. Sanghrajka was an investment banker specializing in healthcare and other growth sectors at ABN Amro Rothschild (including
predecessors ING Barings and Furman Selz). Mr. Sanghrajka received his B.S. in Engineering and Applied Sciences from the University of
Rochester and his Certificate in Finance from the University of Rochester Simon Business School.
Set forth below is summary
biographical information on certain of our key employees, officers and senior advisors.
Alan Horsager, Ph.D.
is our President – Immuno-Oncology and President and Chief Executive Officer of Duet BioTherapeutics, our wholly-owned subsidiary. Prior to joining the company,
Dr. Horsager was Director of LA BioSpace, a life science incubator focused on developing and supporting early-stage biotech companies
spinning out from regional research centers such as Caltech, City of Hope, and USC. During this time, Dr. Horsager also served as Interim
CEO and Director of Duet (formerly Olimmune), which was acquired by Scopus in June 2021. Prior to this, Dr. Horsager was Founder,
President, & CEO of Episona, a company that developed an epigenetic-based diagnostic test for infertility, which was sold into fertility
clinics and direct-to-consumer, internationally. Prior to Episona, Dr. Horsager was the Co-founder & Chief Science Officer of Eos
Neuroscience. Eos developed an optogenetic-based gene therapy for the treatment of retinitis pigmentosa (“RP”) through a
collaborative effort between USC, MIT, and the University of Florida. Dr. Horsager’s doctoral thesis was focused on developing
computational methods to improve vision in RP patients implanted with electrical retinal prostheses. This research was in collaboration
with Second Sight Medical Products (Nasdaq: “EYES”). Dr. Horsager also worked as a Consultant at L.E.K. Consulting and has
numerous scientific publications and patents. Dr. Horsager holds a bachelor’s degree in Psychology from the University of Washington
and a doctorate in Neuroscience from the University of Southern California. He has received many awards for his academic work, including
a Burroughs Wellcome Fund CASI award.
Aharon Schwartz, Ph.D.
is a Senior Scientific Advisor to us and Executive Chairman of Scopus BioPharma Israel Ltd, or Scopus Israel. Since 2004, Dr. Schwartz
has been the Chairman of the Board of BioLineRx Ltd. (Nasdaq: “BLRX”), and a director of Foamix Pharmaceuticals Ltd. (Nasdaq:
“FOMX”) and Protalix BioTherapeutics, Inc. (NYSE American: “PLX”), all publicly-traded biopharmaceutical/specialty
pharmaceutical companies. From 1975 to 2011, Dr. Schwartz served in various management positions at Teva Pharmaceutical Industries Limited
(NYSE: “TEVA”), most recently as Vice President — Head of Teva Innovative Ventures. Dr. Schwartz’s
prior positions at Teva included Vice President — Strategic Business Planning and New Ventures; Vice President — Global
Products Division; Vice President — Copaxone Division; Vice President — Business Development;
and Head of the Pharmaceuticals Division. Dr. Schwartz received his B.Sc. in Chemistry and Physics from Hebrew University, his M.Sc.
in Organic Chemistry from the Technion and his Ph.D. from the Weizmann Institute of Science. Dr. Schwartz also holds an additional
Ph.D. in history and philosophy of science from Hebrew University.
David Silberg has
been a Senior Advisor to us and Scopus Israel since October 2018. Since 2000, Mr. Silberg has served as Managing Director of
Mercator Research Ltd., a business, financial and strategic advisory firm. Until 2009, Mercator Research served as the representative
in Israel for Mercator Capital, a cross-border private equity and investment banking firm. Mr. Silberg was responsible for developing
Mercator’s principal and investment banking activities in Israel, including business development with Israel’s leading technology
companies and venture capital firms. For more than 25 years prior to founding Mercator, Mr. Silberg held various positions
in the Office of the Prime Minister of Israel, reaching the rank of Head of Directorate, a position equivalent to Brigadier General.
While in the Prime Minister’s Office, Mr. Silberg was responsible for, among other things, high level legal, diplomatic, financial
and defense assignments and played an active role in the peace negotiations between various Israeli Prime Ministers and the Heads of
State of certain Arab countries, culminating in the 1994 Middle East peace agreements. In connection with these breakthrough achievements,
Mr. Silberg was awarded a Distinction of Honor from the Israeli Prime Minister’s Office. Mr. Silberg received an LL.B.
degree from Tel-Aviv University Law School and an M.A., with honors, from the Haifa University. Mr. Silberg is also
a graduate of the IDF National Defense College and of the Advanced Management Program of the INSEAD Business School in Fontainebleau,
France.
Additional Information
On April 7, 2021, Morris Laster
(“Laster”) filed a Schedule 13D (the “13D”) stating, among other things, that Laster intended to vote against
the future election of members of Scopus’ then current Board. On May 9, 2021, Laster submitted nominations for Messrs. Levine and
Hacham for election to the Board at the 2021 Annual Meeting, which nominations were subsequently disclosed in an amendment to the 13D
filed by Laster on May 12, 2021 (the “Amended 13D”). A definitive proxy statement naming Messrs. Levine and Hacham as Laster’s
nominees was filed on October 6, 2021. As disclosed in an amended Current Report on Form 8-K filed with the SEC on January 10, 2022, which
was filed to disclose the final voting results of the 2021 Annual Meeting, it was disclosed that, on
January 3, 2022, the Executive Committee Directors filed a Verified Complaint pursuant to Section 225 of the Delaware General Corporation
Law challenging the results of the 2021 Annual Meeting (the “Section 225 Action”), on the basis that, among other things,
(i) Laster improperly voted 6,000,000 shares of the company’s common stock at the 2021 Annual Meeting because Laster does not own
such shares over which Laster improperly and incorrectly claimed ownership, and (ii) Laster would not have succeeded at the 2021 Annual
Meeting but for the fact he improperly voted such shares. If the Executive Committee Directors were to prevail in the Section 225 Action,
then the outcome of the 2021 Annual Meeting would be deemed invalid. On April 26, 2022, Joshua Levine and Mordechai Hacham resigned from
the Board.
On
April 28, 2022, a vacancy on the Board was filled with the appointment of Dr. Hofstein.
As disclosed in the Current
Report on Form 8-K filed by the company on July 9, 2021, the Audit Committee of the Board commenced an internal review of Messrs. Sanghrajka
and Hopper. The review was conducted by the Audit Committee with the assistance of outside counsel. The review has focused on possible
breaches of fiduciary duties and contractual obligations by, and certain other matters relating to, Messrs. Sanghrajka and Hopper. As
a result of such internal review, the Audit and Executive Committees of the Board requested the resignations of Messrs. Sanghrajka and
Hopper from the Board. On August 24, 2021, the company was advised that Messrs. Sanghrajka and Hopper were not resigning from the Board.
As further disclosed in the Form 8-K, on July 2, 2021, the company terminated the employment of Mr. Sanghrajka, in accordance
with the terms of his amended and restated employment agreement, pursuant to which the company has no further financial obligations.
Composition of our Board of Directors
Effective as of April 28,
2022, our Board is comprised of eight members. In accordance with our certificate of incorporation, our Board is divided into three classes
with staggered three-year terms. At each annual meeting of stockholders, the successors to the directors whose terms then expire will
be elected to serve until the annual meeting that is three years following the election. The terms of the Class A, Class B and Class
C directors expire at the 2024, 2022 and 2023 annual meetings of stockholders, respectively. Our directors are divided among the three
classes as follows:
Class A: Raphael Hofstein, Ph.D.
Class B: Paul E. Hopper, Joshua R. Lamstein, Ashish
P. Sanghrajka, and David A. Buckel
Class C: Ira Scott Greenspan,
Robert J. Gibson, and David Weild IV
Our certificate of incorporation
provides that the authorized number of directors comprising our Board shall be fixed by a majority of the total number of directors.
Any additional directorships resulting from an increase in the number of directors will be distributed among the classes as nearly equally
as possible. Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation
or removal. There are no family relationships among any of our directors or executive officers.
Director Independence
and Board Committees
Under Nasdaq listing rules,
an “independent director” is defined as a person other than an officer or employee of the company or its subsidiaries or any
other individual having a relationship, which, in the opinion of the company’s Board, would interfere with the director’s
exercise of independent judgment in carrying out the responsibilities of a director. Nasdaq listing rules require that a listed company
have a board comprised of a majority of independent directors (“Majority Indpendent Requirement”). In addition, Nasdaq listing
rules require that the company maintain an audit committee of the board comprised of a minimum of three independent directors, and a compensation
committee of the board comprised of a minimum of two independent directors (“Audit Committee and Compensation Committee Requirements”).
Subsequent to the certification
of the election results from the 2021 Annual Meeting, the company was unable to determine the independence of certain of the company’s
directors. As a result, the company no longer satisfied the Majority Independent Requirement and the Audit Committee and Compensation
Committee Requirements. On March 18, 2022, the company received deficiency notification letters
from Nasdaq indicating that the company was not in compliance with Nasdaq’s Majority Independent Requirement and the Audit Committee
and Compensation Committee Requirements.
The Nasdaq deficiency notification
letters require the company to regain compliance with the Majority Independent Requirement and the
Audit Committee and Compensation Committee Requirements in a timeframe specified by Nasdaq. As a result of the reconstitution of the Board
and Audit Committee and Compensation Committee resulting from the resignations of two directors whose independence could not be assessed
and the addition of Dr. Hofstein to the Board, the company believes, subject to a determination by Nasdaq, that it has regained compliance
with the Audit Committee and Compensation Committee Requirements. As required by Nasdaq, the company intends to submit its plan for regaining
compliance with the Majority Independent Requirement shortly.
Audit Committee
Effective as of April 28,
2022, our Audit Committee is comprised of Messrs. Buckel and Weild and Dr. Hofstein, each of whom is an “independent director”
under Nasdaq listing rules. Mr. Buckel is the Chair of the Audit Committee. The Audit Committee’s duties, which are specified
in our Audit Committee Charter, include, but are not limited to:
• reviewing and discussing with
management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial
statements should be included in our Form 10-K;
• discussing with management and
the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial
statements;
• discussing with management major
risk assessment and risk management policies;
• monitoring the independence
of the independent auditor;
• verifying the rotation of the
lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the
audit as required by law;
• inquiring and discussing with
management our compliance with applicable laws and regulations;
• pre-approving all audit services
and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;
• appointing or replacing the
independent auditor;
• determining the compensation
and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor
regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; and
• establishing procedures for
the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which
raise material issues regarding our financial statements or accounting policies.
Financial Experts on Audit Committee
The Audit Committee will
at all times be composed exclusively of “independent directors” who are “financially literate” as defined under
Nasdaq listing rules. Nasdaq listing rules define “financially literate” as being able to read and understand fundamental
financial statements, including a company’s balance sheet, income statement and cash flow statement.
In addition, we must certify
to Nasdaq that the Audit Committee has, and will continue to have, at least one member who has past employment experience in finance
or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s
financial sophistication. Each of Messrs. Buckel and Weild and Dr. Hofstein qualifies as an “audit committee financial expert,”
as defined under rules and regulations of the SEC.
Compensation Committee
Effective as of April 28,
2022, our Compensation Committee is comprised of Dr. Hofstein and Mr. Buckel, each of whom is an “independent director” under
Nasdaq listing rules. Dr. Hofstein is the Chair of the Compensation Committee. The Compensation Committee’s duties, which are specified
in our Compensation Committee Charter, include, but are not limited to:
• reviewing and approving on an
annual basis the corporate goals and objectives relevant to our executive officers and evaluating our executive officers’ performance
in light of such goals and objectives;
• reviewing and approving the
compensation of all of our executive officers (including through our management services agreements described below);
• reviewing our executive compensation
policies and plans;
• implementing and administering
our incentive compensation equity-based remuneration plans;
• assisting management in complying
with our proxy statement and annual report disclosure requirements;
• approving all special perquisites,
special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
• if required, producing a report
on executive compensation to be included in our annual proxy statement; and
• reviewing, evaluating, and recommending
changes, if appropriate, to the remuneration for directors.
Nominating Committee
Effective as of April 28,
2022, our Nominating Committee is comprised of Mr. Weild and Dr. Hofstein, each of whom is an “independent director” under
Nasdaq listing rules . Mr. Weild is the Chair of the Nominating Committee. The Nominating Committee is responsible for overseeing the
selection of persons to be nominated to serve on our Board. The Nominating Committee considers persons identified by its members, management,
stockholders, investment bankers and others.
The guidelines for selecting
nominees, which are specified in the Nominating Committee Charter, generally provide that persons to be nominated:
• should have demonstrated notable
or significant achievements in business, education, or public service;
• should possess the requisite
intelligence, education, and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives,
and backgrounds to its deliberations; and
• should have the highest ethical
standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.
The Nominating Committee will consider a number
of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s
candidacy for membership on the Board. The Nominating Committee may require certain skills or attributes, such as financial or accounting
experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its
members to obtain a broad and diverse mix of board members. The Nominating Committee does not distinguish among nominees recommended
by stockholders and other persons.
Executive Committee
We maintain an Executive
Committee of the Board, which consists of Messrs. Greenspan, Lamstein and Gibson. Mr. Greenspan is the Chair of the Executive Committee.
The role of the executive committee includes, but is not limited to, implementing the Board’s fiduciary, strategic, and other plans,
policies, and decisions consistent with the company’s vision, mission, and guiding principles. The Executive Committee assists
the company in decision making between meetings of the Board or in circumstances where the full Board may not be immediately available,
and any such decisions will be reviewed at the next regularly scheduled or special board meeting, as the case may be. The Executive Committee
can act on behalf of the entire Board, except with respect to any matters that (1) are expressly delegated to other committees of the
Board, (2) are under active review by the Board or another committee of the Board, unless the Board specifically authorizes such action,
or (3) under General Corporation Law of the State of Delaware, the company’s certificate of incorporation or amended and restated
by-laws (“By-laws”), cannot be delegated by the Board to a committee of the Board.
Code of Business Conduct and Ethics
We have adopted a code of
business conduct and ethics that applies to all of our employees, officers, and directors, including those officers responsible for financial
reporting. Our code of business conduct and ethics is available on our website www.scopusbiopharma.com. We expect that any amendments
to the code, or any waivers of its requirements, will be disclosed on our website.
Deliquent Section 16(a)
Reports
Section 16(a) of the Exchange
Act requires our directors and executive officers and persons who own more than 10% of a registered class of our equity securities to
file various reports with the SEC concerning their holdings of, and transactions in, securities we issued. Each such person is required
to provide us with copies of the reports filed. Based on a review of the copies of such forms furnished to us and other information, we
believe that our officers, directors and/or owners of 10% of any class of our registered securities reported transactions in such securities
on a timely basis, except that Laster and Messrs. Hopper and Sanghrajka failed to file or timely file certain required filings regarding
the ownership of our securities.
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets
forth the compensation paid or accrued during the fiscal years ended December 31, 2021 and 2020, respectively, to our named
executive officers.
Name and Principal Position | |
Year | | |
Salary | | |
Bonus | | |
Awards | | |
All Other Compensation(1) | | |
Total | |
Joshua R. Lamstein | |
| 2021 | | |
| | | |
| | | |
| | | |
$ | 213,060 | | |
$ | 213,060 | |
Chairman (Principal Executive Officer) | |
| 2020 | | |
| | | |
| | | |
| | | |
$ | 180,000 | | |
$ | 180,000 | |
Robert J. Gibson | |
| 2021 | | |
| | | |
| | | |
| | | |
$ | 200,000 | | |
$ | 200,000 | |
Vice Chairman (Principal Financial and Accounting Officer) | |
| 2020 | | |
| | | |
| | | |
| | | |
$ | 180,000 | | |
$ | 180,000 | |
Ashish P. Sanghrajka | |
| 2021 | | |
$ | 182,308 | | |
| | | |
| | | |
| | | |
$ | 182,308 | |
Former President(2) | |
| 2020 | | |
$ | 300,000 | | |
$ | 300,000 | | |
| | | |
| | | |
$ | 600,000 | |
Ira Scott Greenspan | |
| 2021 | | |
| | | |
| | | |
| | | |
$ | 200,000 | | |
$ | 200,000 | |
Executive Committee Chairman | |
| 2020 | | |
| | | |
| | | |
| | | |
$ | 180,000 | | |
$ | 180,000 | |
(1) |
For additional information relating to compensation matters, see “Narrative
to Summary Compensation Table,” below. |
(2) |
Mr. Sanghrajka was terminated in July 2021. |
Narrative to Summary Compensation Table
Employment Agreements, Arrangements or Plans
For 2020 and 2021, the
services of Joshua R. Lamstein, Robert J. Gibson and Ira Scott Greenspan, our Chairman, Vice Chairman and Executive Committee
Chairman, respectively, were provided pursuant to a management services agreement (“MSA”) with HCFP/Portfolio Services
LLC (“Portfolio Services MSA”). Under the Portfolio Services MSA, we pay a monthly management services fee for executive
management, financial and accounting management, general advisory and administrative and other services. We paid or accrued
management services fees under the Portfolio Services MSA in the amounts of $540,000 and $600,000 in 2020 and 2021,
respectively.
In June 2020, the employment
agreement of Ashish P. Sanghrajka was amended and restated. Pursuant to the amended agreement, Mr. Sanghrajka served as the company’s
president and was appointed as a director, in connection with which he relinquished his role as chief financial officer. The amended
agreement provided for payment of an annual base salary of $300,000 for 2020 with an increase to $360,000 for the year ended December 31,
2021. A guaranteed bonus of $300,000 was paid for the year ended December 31, 2020. The amended agreement provided for an increase of
the guaranteed bonus to $324,000 for the year ended December 31, 2021. As disclosed in Item 10. Directors, Executive Officers
and Corporate Governance – Additional Information, on July 2, 2021, the company terminated the employment of Mr. Sanghrajka
for cause, in accordance with the terms of his amended and restated employment agreement, pursuant to which the company has no further
financial obligations. The amended agreement maintains in effect the confidentiality and restrictive covenants set forth in the initial
employment agreement.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2021, there were no outstanding
equity awards to any executive officer.
Director Compensation
Each of our independent directors
receives annual director fees of $40,000. Audit Committee, Compensation Committee and Nominating Committee members each receive an additional
annual fee of $5,000. The chair of each of the Audit, Compensation and Nominating Committee receives an additional annual fee of $5,000.
We also reimburse directors for costs incurred in attending board and committee meetings. During the period from March 2021 through April
29, 2022, 600,000 of options were forfeited by former directors and an officer. Mr. Hopper was not paid any compensation during 2021.
The table below summarizes compensation paid for service as a director for the year ended December 31, 2021.
Name | |
Director Fees | | |
Stock Awards | | |
Option Awards | | |
All Other
Compensation | | |
Total | |
David S. Battleman, M.D. | |
$ | 45,000 | | |
| | | |
| | | |
| | | |
$ | 45,000 | |
David A. Buckel | |
$ | 55,000 | | |
| | | |
| | | |
| | | |
$ | 55,000 | |
Raphael Hofstein, Ph.D. | |
$ | 57,930 | | |
| | | |
| | | |
| | | |
$ | 57,930 | |
Lesley Russell, Ph.D. | |
$ | 13,750 | | |
| | | |
| | | |
| | | |
$ | 13,750 | |
David Weild IV | |
$ | 55,000 | | |
| | | |
| | | |
| | | |
$ | 55,000 | |
2018 Equity Incentive Plan
On September 24, 2018, our
Board and stockholders adopted our 2018 Equity Incentive Plan, or the stock plan. The stock plan is designed to enable us to offer our
employees, officers, directors, and consultants whose past, present and/or potential contributions to us have been, are or will be important
to our success, an opportunity to acquire a proprietary interest in us. The various types of incentive awards that may be provided under
the stock plan are intended to enable us to respond to changes in compensation practices, tax laws, accounting regulations and the size
and diversity of our business. The stock plan, as amended, reserves 2,400,000 shares of common stock for issuance in accordance with
the stock plan’s terms.
All our officers, directors,
employees, and consultants, as well as those of our subsidiaries, are eligible to be granted awards under the stock plan. An incentive
stock option may be granted under the stock plan only to a person who, at the time of the grant, is an employee of ours or our subsidiaries.
All awards are subject to approval by the Board. As of April 29, 2022, 600,000 options are outstanding under the stock plan.
Administration
The stock plan is administered
by our Board. Subject to the provisions of the stock plan, the Board determines, among other things, the persons to whom from time to
time awards may be granted, the specific type of awards to be granted, the number of shares subject to each award, share prices, any
restrictions or limitations on the awards, and any vesting, exchange, deferral, surrender, cancellation, acceleration, termination, exercise
or forfeiture provisions related to the awards.
Stock Subject to the Plan
Shares of stock subject to
other awards that are forfeited or terminated will be available for future award grants under the stock plan. Shares of common stock
that are surrendered by a holder or withheld by the company as full or partial payment in connection with any award under the stock plan,
as well as any shares of common stock surrendered by a holder or withheld by the company or one of its subsidiaries to satisfy the tax
withholding obligations related to any award under the stock plan, shall not be available for subsequent awards under the stock plan.
Under the stock plan, on
a change in the number of shares of common stock as a result of a dividend on shares of common stock payable in shares of common stock,
common stock forward split or reverse split or other extraordinary or unusual event that results in a change in the shares of common
stock as a whole, the terms of the outstanding award will be proportionately adjusted.
Eligibility
Awards may be granted under
the stock plan to employees, officers, directors, and consultants who are deemed to have rendered, or to be able to render, significant
services to us and who are deemed to have contributed, or to have the potential to contribute, to our success.
Types of Awards
Options. The stock
plan provides both for “incentive” stock options as defined in Section 422 of the Internal Revenue Code (the “Code”)
and for options not qualifying as incentive options, both of which may be granted with any other stock based award under the stock plan.
The board determines the exercise price per share of common stock purchasable under an incentive or non-qualified stock option, which
may not be less than 100% of the fair market value on the day of the grant or, if greater, the par value of a share of common stock.
However, the exercise price of an incentive stock option granted to a person possessing more than 10% of the total combined voting power
of all classes of stock may not be less than 110% of the fair market value on the date of grant. The aggregate fair market value of all
shares of common stock with respect to which incentive stock options are exercisable by a participant for the first time during any calendar
year, measured at the date of the grant, may not exceed $100,000 or such other amount as may be subsequently specified under the Code
or the regulations thereunder. An incentive stock option may only be granted within a ten-year period commencing on September 24, 2018
and may only be exercised within ten years from the date of the grant, or within five years in the case of an incentive stock option
granted to a person who, at the time of the grant, owns common stock possessing more than 10% of the total combined voting power of all
classes of our stock. Subject to any limitations or conditions the board may impose, stock options may be exercised, in whole or in part,
at any time during the term of the stock option by giving written notice of exercise to us specifying the number of shares of common
stock to be purchased. The notice must be accompanied by payment in full of the purchase price, either in cash or, if provided in the
agreement, in our securities or in combination of the two.
Generally, stock options
granted under the stock plan may not be transferred other than by will or by the laws of descent and distribution and all stock options
are exercisable during the holder’s lifetime, or in the event of legal incapacity or incompetency, the holder’s guardian,
or legal representative. If the holder is an employee, no stock options granted under the stock plan may be exercised by the holder unless
he or she is employed by us or a subsidiary of ours at the time of the exercise and has been so employed continuously from the time the
stock options were granted. However, in the event the holder’s employment is terminated due to disability, the holder may still
exercise his or her vested stock options for a period of 12 months or such other greater or lesser period as the board may determine,
from the date of termination or until the expiration of the stated term of the stock option, whichever period is shorter. Similarly,
should a holder die while employed by us or a subsidiary of ours, his or her legal representative or legatee under his or her will may
exercise the decedent holder’s vested stock options for a period of 12 months from the date of his or her death, or such other
greater or lesser period as the board may determine or until the expiration of the stated term of the stock option, whichever period
is shorter. If the holder’s employment is terminated due to normal retirement, the holder may still exercise his or her vested
stock options for a period of 12 months from the date of termination or until the expiration of the stated term of the stock option,
whichever period is shorter. If the holder’s employment is terminated for any reason other than death, disability or normal retirement,
the stock option will automatically terminate, except that if the holder’s employment is terminated without cause, then the portion
of any stock option that is vested on the date of termination may be exercised for the lesser of three months after termination
of employment, or such other greater or lesser period as the board may determine but not beyond the balance of the stock option’s
term.
Stock Appreciation Rights.
Under the stock plan, stock appreciation rights may be granted to participants who have been, or are being, granted stock options
under the stock plan as a means of allowing the participants to exercise their stock options without the need to pay the exercise price
in cash or without regard to the grant of options. A stock appreciation right entitles the holder to receive an amount equal tote excess
of the fair market value of a share of common stock over the grant price of the award which cannot be less than the fair market value
of a share at the time of grant.
Restricted Stock.
Under the stock plan, shares of restricted stock may be awarded either alone or in addition to other awards granted under the stock plan.
The board determines the persons to whom grants of restricted stock are made, the number of shares to be awarded, the price if any to
be paid for the restricted stock by the person receiving the stock from us, the time, or times within which awards of restricted stock
may be subject to forfeiture, the vesting schedule, and rights to acceleration thereof, and all other terms and conditions of the restricted
stock awards.
Restricted stock awarded
under the stock plan may not be sold, exchanged, assigned, transferred, pledged, encumbered, or otherwise disposed of, other than to
us, during the applicable restriction period. In order to enforce these restrictions, the stock plan provides that all shares of restricted
stock awarded to the holder remain in our physical custody until the restrictions have terminated and all vesting requirements with respect
to the restricted stock have been fulfilled. Except for the foregoing restrictions, the holder will, even during the restriction period,
have all of the rights of a stockholder, including the right to receive and retain all regular cash dividends and other cash equivalent
distributions as we may designate, pay, or distribute on the restricted stock and the right to vote the shares.
Other Stock-Based Awards.
Under the stock plan, other stock-based awards may be granted, subject to limitations under applicable law, that are denominated
or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of common stock, as deemed consistent
with the purposes of the stock plan. These other stock-based awards may be in the form of deferred stock awards and stock issued in lieu
of bonuses. These other stock-based awards may include performance shares or options, whose award is tied to specific performance criteria.
These other stock-based awards may be awarded either alone, in addition to, or in tandem with any other awards under the stock plan.
Other Limitations.
The board may not modify or amend any outstanding option or stock appreciation right to reduce the exercise price of such option or stock
appreciation right, as applicable, below the exercise price as of the date of grant of such option or stock appreciation right.
Item 13. Certain Relationships and Related
Transactions, and Director Independence.
Other than compensation arrangements,
we describe below transactions and series of similar transactions over the two most recently completed fiscal years, as well as the current
fiscal year, to which we were a party or will be a party, in which:
• The amounts involved exceeded
or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years;
and
• Any of our directors, executive
officers, or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will
have a direct or indirect material interest.
Since inception, the services of our Chairman,
Vice Chairman and Executive Committee Chairman have been provided to us pursuant to the Portfolio Services MSA. These executives commit
a significant portion of their business time to us. In connection with the services provided by our executive officers under the Portfolio
Services MSA and pursuant to other arrangements, as set forth below, such executives are supported by additional personnel of the entities
which provide such services. The Portfolio Services MSA, as amended, provides for a monthly management services fee of $50,000 and a
monthly fee for office space and facilities of $3,000. The aggregate management and office space and facilities fees paid or accrued
under the Portfolio Services MSA were $576,000 and $636,000 in 2020 and 2021, respectively. We are also obligated to reimburse reasonable
and properly documented out-of-pocket expenses. HCFP/Portfolio Services LLC is an affiliate of HCFP Inc. and HCFP LLC, together HCFP.
These entities and other affiliated entities, including HCFP/Strategy Advisors LLC, or Strategy Advisors, HCFP/Direct Investments LLC,
or Direct Investments, and HCFP/Capital Partners, or Capital Partners, are also affiliates of three of our directors. In addition to
our arrangements with Portfolio Services, from time to time, we also obtain specialized strategy advisory services and we have engaged
in other transactions with such entities. No fees were paid for such services in 2020, 2021. To assist us with our liquidity requirements,
from time to time, HCFP and Direct Investments have invested in our securities, provided us with cash advances and paid certain expenses
to third-parties on our behalf in an aggregate amount of approximately $250,000, of which $162,000 was invested in our private placements
on the same terms as third-party investors in such private placements. Cash advances and expenses paid on our behalf aggregated approximately
$88,000, all of which have been repaid in full as of July 2020. To further address our liquidity, Portfolio Services agreed to defer
some of our payment obligations pursuant to the Portfolio Services MSA in the aggregate amount of $200,000. In June 2020, Portfolio
Services agreed to exchange $200,000 of deferred payments into $200,000 of our convertible notes and warrants, also on the same terms
of unaffiliated investors. In July 2021, Portfolio Services converted the principal amount and accrued and unpaid interest into warrants
on the maturity date, on the same terms of unaffiliated investors. Also, in June 2020, an affiliate of Capital Partners purchased
3,000,000 Series W Warrants, or W Warrants, in exchange for a $1,500,000 note (the “Warrant Note”). The company’s ability
to issue shares of common stock has been impeded due to a lack of sufficient shares of authorized common stock, which has constrained
the company’s ability to raise capital. Increasing the number of authorized shares requires shareholder approval, which we may
not be able to obtain on a timely basis or at all. At the time the company was seeking to execute the November Financing, the company
was subject to the Proxy Contest and was not in a position to obtain stockholder approval. In order to ensure that the company could
obtain the critical financing necessary to sustain its operations, the affiliate of Capital Partners contributed all 3,000,000 W Warrants
to the company. As part of such contribution, the Warrant Note was canceled. In 2020, we retained HCFP/Capital Markets LLC, or Capital
Markets, of which an executive officer and director is an affiliate, to act as placement agent in connection with the sale of our equity
and debt securities. We paid Capital Markets placement fees and other fees and non-accountable expense allowances, in the aggregate,
of $201,561 in 2020. No fees were paid for such services in 2021. On September 26, 2021, the Board
approved an indemnification agreement (the “Indemnification
Agreement”), pursuant
to which the company has agreed to indemnify each of the Executive Committee Directors, the employees of HCFP, and certain affiliates
and related entities (collectively, the “Indemnified
Parties”) from and
against any losses, claims, damages or liabilities, including reasonable attorney’s
fees, suffered or incurred by the Indemnified Parties in connection with any disputes, litigation or threatened litigation (whether existing
prior to or commencing after the date of the Indemnification Agreement) involving certain current or former executives and directors
of the company and arising or resulting from any Indemnified Party’s
affiliation or involvement with the company, including in connection with the provision of additional services beyond those initially
contemplated under the Portfolio Services management services agreement. The Indemnification Agreement also provides that the company
will advance expenses to any Indemnified Party, including legal fees, incurred by such Indemnified Party in connection with any litigation
or proceeding to which such Indemnified Party is entitled to indemnification under the Indemnification Agreement. The company incurred
approximately $462,929 in legal fees in connection with this Indemnification Agreement in
2021.
Since inception, pursuant
to a management services agreement with an affiliate of Laster, the company paid or accrued fees in the amount $128,333 in 2020. Such
agreement was terminated in June 2020. Pursuant to a management services agreement with an affiliate of Mr. Hopper, from June through
October 2020, at which time Mr. Hopper resigned as Co-Chairman, we paid $58,333 under such agreement. In June 2020, we
entered into an amended and restated employment agreement with Mr. Sanghrajka with terms that are set forth in the Executive Compensation
section of this 10-K/A. In connection with the acquisition of Bioscience Oncology Pty., Ltd. (“Bioscience Oncology”), of
which Mr. Hopper was Executive Chairman, we have paid total consideration, including milestone payments, and expense reimbursements
of $290,000 in cash, 2,533,334 shares of common stock and 911,343 W Warrants, of which Mr. Hopper received $184,875 in cash, 1,412,666
shares of our common stock and 508,193 W Warrants, and Mr. Sanghrajka received, as consideration, 380,000 shares of our common stock
and 136,702 W Warrants, inclusive of 80,000 shares of our common stock and 28,780 W Warrants received by Mr. Sanghrajka’s
minor children.
Transactions between us and
any of our officers and directors or their respective affiliates are or will be on terms believed by us to be no less favorable to us
than are available from unaffiliated third parties. Our Audit Committee Charter contains our related-party transaction policy, which
provides for the Audit Committee to review, approve and oversee any transaction between the company and any related person and any other
potential conflict of interest situations on an ongoing basis.