Q:     What are abstentions and broker non-votes and how do they affect voting?

A:     Abstentions — If you specify that you wish to “abstain” from voting on an item, your shares will not be voted on that item. Abstentions are counted toward establishing a quorum. Abstentions have no effect on the election of directors, but are included in the shares entitled to vote on Proposal No. 2 and No. 3. On Proposal No. 2 and No. 3, abstentions have the effect of a vote against the proposal.

Broker Non-Votes — If your broker holds your shares in its name and does not receive voting instructions from you, your broker has discretion to vote these shares on certain “routine” matters, such as the ratification of the appointment of the independent registered public accounting firm. However, on non-routine matters such as the election of directors your broker must receive voting instructions from you, because your broker does not have discretionary voting power for those particular items. So long as the broker has discretion to vote on at least one proposal, these “broker non-votes” are counted toward establishing a quorum. When voted on “routine” matters, broker non-votes are counted toward determining the outcome of that “routine” matter.

Q:     What vote is needed?

A:     For Proposal No. 1, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Votes cast shall include direction to withhold authority in each case and exclude abstentions with respect to that director’s election.

For Proposal No. 2 and No. 3, an affirmative vote of the majority of shares present at the meeting or represented by proxy at the Annual Meeting and entitled to vote is required.

Q:     Is cumulative voting permitted for the election of directors?

A:     No, in accordance with our certificate of incorporation, you may not cumulate your votes for the election of directors.

Q:     Can I vote on other matters?

A:     You are entitled to vote on any other matters that are properly brought before the Annual Meeting. Our Bylaws limit the business conducted at any annual meeting to (1) business in the notice of the Annual Meeting, (2) business directed by the Board and (3) business brought by a stockholder of record entitled to vote at the meeting so long as the stockholder has met the requirements for submitting stockholder proposals provided in our Bylaws. Under our Bylaws, a stockholder must notify our Secretary in writing (at our Salt Lake City, Utah headquarters) of the proposal not less than 90 days nor more than 120 days before the anniversary of the prior year’s annual meeting, which for the 2022 Annual Meeting of Stockholders will be no earlier than January 18, 2022 and no later than February 17, 2022. The notice must give a brief description of the business to be brought before the Annual Meeting, the reasons for conducting the business and the text of the proposal, as well as the name and address of the stockholder giving the notice and the beneficial owner on whose behalf the proposal is made, the number of shares owned and information about that beneficial ownership, all as detailed in our Bylaws. The notice must also describe any material interest the stockholder or beneficial owner has in the business and arrangements between such stockholder or beneficial owner and any other person in connection with the proposal and must include certain representations, all as detailed in our Bylaws.

We do not currently expect any matters other than those listed in this Proxy Statement to come before the Annual Meeting. If any other matter is presented, your proxy gives the individuals named as proxyholders the authority to vote your shares to the extent authorized by Rule 14a-4(c) under the Securities Exchange Act of 1934 (the “Exchange Act”).

Q:     When must I submit a proposal to have it considered for presentation in next year’s proxy materials?

A:     To have your stockholder proposal be considered for presentation in the proxy statement and proxy card for our 2022 Annual Meeting of Stockholders, rather than just voted upon at the meeting without inclusion in the proxy statement and proxy card, a stockholder must submit to our Secretary (at our Salt Lake City, Utah headquarters) a written proposal no later than December 7, 2021. The submission must contain the information required under Rule 14a-8 under the Exchange Act.

Q:     How do I suggest potential candidates for director positions?

A:     A stockholder may suggest one or more potential candidates for consideration by the Board as nominees for election as one of our directors at an annual meeting of stockholders. Pursuant to our governing documents and the General Corporation Law of the State of Delaware, this can be done by notifying our Corporate Secretary in writing (at our Salt Lake City, Utah headquarters) not less than 90 days nor more than 120 days before the anniversary of the prior year’s annual meeting, which for the 2022 Annual Meeting of Stockholders will be no earlier than January 18, 2022 and no later than February 17, 2022. The notice must include all information about the potential candidate that must be disclosed in proxy solicitations pursuant to Regulation 14A under the Exchange Act (including the potential candidate’s written consent to being named as a nominee and serving as a director) and a description of all material monetary agreements during the past three years and any other material relationships between such stockholder and a beneficial owner on whose behalf the potential candidacy is made and their affiliates and associates, or others acting in concert, on the one hand, and each potential candidate, and their affiliates and associates, or others acting in concert, on the other hand, including all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if the stockholder were a “registrant,” all as described in our Bylaws. The notice must also include certain additional information about and representations by, the stockholder and/or the beneficial owner, all as detailed in our Bylaws.

Q:     How does the Board select nominees for election to the Board?

A:     The Nominating and Corporate Governance Committee will consider potential candidates for directors submitted by stockholders, in addition to those suggested by other Board members and members of our management, and does not evaluate potential candidates differently based upon the source of the potential candidate. The Nominating and Corporate Governance Committee considers and evaluates each properly submitted potential candidate for director in an effort to achieve a balance of skills and characteristics on the Board, as well as to ensure that the composition of the Board at all times adheres to the independence requirements applicable to companies listed on the Nasdaq Stock Market LLC (“Nasdaq”) and other regulatory requirements applicable to us. Please refer to “Proposal No. 1  — Election of Directors” and our Code of Business Conduct and Ethics (a copy of which can be found at invest.clene.com) for additional details on our policy, process and membership criteria. A stockholder may recommend potential candidates for director by notifying our Corporate Secretary in writing (at our Salt Lake City, Utah headquarters) as detailed in the question and answer above.

Q:     How may I communicate with the Board?

A:     Stockholders and other interested parties may communicate with the Board, the Board’s Chairman or any other director or with the independent directors as a group or any other group of directors through the Board’s Chairman by sending an email to board@clene.com. Messages received will be forwarded to the appropriate director or directors.

Q:     When and where is the Annual Meeting being held?

A:     The Annual Meeting will be held on Tuesday, May 18, 2021 at 1:00 p.m. Mountain Daylight Time. The meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast available at http://www.virtualshareholdermeeting.com/CLNN2021. If you have any questions about attending the Annual Meeting, please contact us via email at ir@clene.com.

Q:     How can I find the results of the Annual Meeting?

A:     Preliminary results will be announced at the Annual Meeting. Final results will also be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our Board

Our Board has fixed the number of directors at nine. Under our charter, ourOur Board is divided into three classes, designated as Class I, Class II and Class III. Each class servesIII, that each serve staggered three-yearthree-year terms. The terms of office of our Class I directors will expire at the upcoming Annual Meeting. TheMeeting, the terms of office of our Class II directors will expire at the annual meeting2025 Annual Meeting of stockholders to be held in 2022. TheStockholders, and the terms of office of our Class III directors will expire at the annual meeting2026 Annual Meeting of stockholders to be held in 2023.Stockholders.

The Board believes

We believe it is in the Company’sour best interest to continue to have a classified board structure with three-yearthree-year terms for its directors, due to the uniqueness of the Company’sour assets and strategies. The Company’sOur focus on the research and development of pharmaceuticals requires long-termlong-term business strategies. Westrategies, and we believe that this requires the Company’sour directors to have a long-termlong-term outlook and understanding rather than a focus on short-termshort-term results. We believe that this focus on long-termlong-term results will serve the Company well and create value for our stockholders. Further, weWe believe that the classification of our Board will encourage experience and leadership stability and will assure desirable continuity in leadership and policy.

Selection of Nominees

Based on the recommendations from the Nominating and Corporate Governance Committee, our Board has nominated three continuing directors, Fiona Costello, M.D., Jonathon T. Gay, Vallerie V. McLaughlin, M.D., and Reed N. Wilcox, to stand for re-electionre-election to the Board, each to serve a three-yearthree-year term expiring at the 2024 annual meeting2027 Annual Meeting of stockholdersStockholders or until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal.

Dr. Costello and

Each of Mr. Gay, Dr. McLaughlin, and Mr. Wilcox are each independent directors as defined by applicable Nasdaq Stock Marketlisting standards governing the independence of directors. Each nominee has consented to being named as a nominee in this Proxy Statement and has indicated a willingness to serve on the Board if elected. However, if any nominee is unable to serve, proxies will be voted for any replacement candidate nominated by our Board.

Class I Director Nominees for Election for a Three-Year Term Ending with the 20242027 Annual Meeting: of Stockholders:

Vote Required and Board Recommendation

The affirmative vote of a majority

Directors shall be elected by the holders of the plurality of the votes cast by the holders of shares of Common Stock properly castpresent in person or represented by proxy at the Annual Meeting is requiredand entitled to approve this proposal.vote on the election of directors.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR”“FOR” THE ELECTION OF EACH OF THESE NOMINEES AS DIRECTOR.

8Information Regarding the Board and Director Nominees

Table

The following table provides summary information about the director nominees and our other directors, and the membership of Contentsour standing committees.

The following table provides information regarding the demographics of our nominees for director and directors continuing in office following the Annual Meeting.

Class II Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders:

Class III Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders:

PROPOSAL NO. 2
APPROVAL OF THE SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF THE COMPANY

(INCREASING AUTHORIZED SHARES OF COMMON STOCK TO 150,000,000)

Overview

The Company’s Certificate of Incorporation currently authorizes the issuance of 100,000,000 shares of Common Stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock (the “Preferred Stock”). On March 31, 2021, the Company had no shares of Preferred Stock and 59,526,171 shares of Common Stock issued and outstanding.

In addition, there were approximately 7,032,590 shares issuable upon the exercise of options granted under the 2014 Stock Plan, approximately 5,566,363 shares of Common Stock issuable upon exercise of warrants and 1,000,000 shares of Common Stock reserved for future issuance under the 2020 Employee Stock Purchase Plan. We do not intend to issue any additional options under the 2014 Stock Plan and have not yet begun to use the 2020 Employee Stock Purchase Plan. Currently, there are 11,870,000 shares available for the grant of options under the 2020 Equity Incentive Plan (the “Plan”). In connection with the Reverse Recapitalization, a total of 53,286,115 stock options of Clene Nanomedicine common stock were cancelled and the holders thereof in exchange received 0.1320 newly issued stock options of Clene Inc. Common Stock for a total of 7,032,590 stock options, which is equal to 95% of the Exchange Ratio. Pursuant to the Merger Agreement, the Company also issued an aggregate of up to 370,136 RSUs to the option holders which complements the 5% closing payment shares held in escrow for Clene Nanomedicine common shareholders. The number of shares issuable in connection with these RSUs will not be known until the expiration of the escrow under the Merger Agreement. In addition, the Company issued an aggregate of up to 1,136,961 RSUs to option holders to complement the earn-out payments that would be contingently issued to certain current Clene Nanomedicine shareholders upon the achievement of milestones set forth in the Merger Agreement.

The Board has unanimously approved, subject to stockholder approval, an amendment to the Company’s Certificate of Incorporation to effect an increase in the number of authorized shares of Common Stock from 100,000,000 to 150,000,000 (the “Authorized Share Increase”). The Board has not approved an increase in the shares of Preferred Stock. The additional shares of Common Stock authorized by the Authorized Share Increase, if and when issued, would have the same rights and privileges as the shares of Common Stock previously authorized. A copy of the Second Amended and Restated Certificate of Incorporation as anticipated to be filed if Proposal No. 2 is approved is attached hereto as Exhibit A. The description of the Second Amended and Restated Certificate of Incorporation herein is qualified entirely by reference to Exhibit A.

The additional shares of Common Stock authorized by approval of Proposal No. 2 could be issued at the discretion of the Board from time to time for any proper corporate purpose, including, without limitation, the acquisition of other businesses, the raising of additional capital for use in our business, including in connection with the issuance and exercise of warrants, a split of or dividend on then-outstanding shares or in connection with any employee stock plan or program. Except to the extent required by applicable law or regulation, any future issuances of authorized shares of Common Stock may be approved by the Board without further action by the stockholders. The availability of additional shares of Common Stock would be particularly important in the event that the Board needs to undertake any of the foregoing actions on an expedited basis in order to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Common Stock where such approval might otherwise be required.

Although the Board will issue Common Stock only when required or when the Board considers such issuance to be in the Company’s best interests, the issuance of additional Common Stock may, among other things, have a dilutive effect on the earnings per share (if any) and on the equity and voting rights of our existing stockholders.

Additionally, the presence of such additional authorized but unissued shares of Common Stock could discourage unsolicited business combination transactions which might otherwise be desirable to stockholders. While it may be deemed to have potential anti-takeover effects, the proposed increase in the number of authorized shares of Common Stock is not prompted by any specific effort or takeover threat currently perceived by management. The Board believes that the benefits of providing it with the flexibility to issue shares without delay for any proper business purpose, including as an alternative to an unsolicited business combination opposed by the Board, outweigh the possible disadvantages of dilution and discouraging unsolicited business combination proposals and that it is prudent and in the best interests of stockholders to provide the advantage of greater flexibility which will result from the recommended increase.

If Proposal No. 2 is approved, the Board plans to file the Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware promptly thereafter. The Second Amended and Restated Certificate of Incorporation will become effective on the date of filing by the Secretary of State of the State of Delaware. The text of the Second Amended and Restated Certificate of Incorporation is subject to modification to include such changes as may be required by the office of the Secretary of State of the State of Delaware and as the Board deems necessary and advisable to effect the planned increase in the authorized number of shares of Common Stock.

Vote Required and Board Recommendation

The affirmative vote of a majority of the shares of Common Stock properly cast at the Annual Meeting is required to approve this proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE SECONDED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.

PROPOSAL NO. 3
RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The firm of PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, has audited our financial statements for the year ended December 31, 2020. Below is summary information about PwC’s fees for services provided for fiscal year 2020.

____________

(1)      Audit Fees consist of professional services rendered for the audits of our financial statements and reviews of quarterly financial statements. The Audit Fees also include fees of $1,456,000 related to services performed in connection with the Reverse Recapitalization, which was completed in December 2020.

Detailed disclosure of the audit and tax fees we paid to PwC in 2020 may be found in the “Audit Fees” section of this Proxy Statement.

Despite having adequately fulfilled their roleserve as our independent registered public accounting firm for fiscal year 2020, after careful consideration, our Audit Committee has determined not to appoint PwC as our auditorsauditor for the fiscal year ending December 31, 2021. Rather, our Audit Committee2024. Deloitte has appointed Deloitte to serveserved as our auditors forauditor since the fiscal year endingended December 31, 2021.

Based on information in the Audit Committee Report provided elsewhere in this Proxy Statement, our Audit Committee is satisfied that Deloitte is sufficiently independent of management to perform its duties properly. Although not legally required to do so, our Board considers it desirable to seek, and recommends, stockholder ratification of our selection of Deloitte as our independent registered public accounting firm for fiscal year 2021.2024. If the stockholders fail to ratify our selection, the Audit Committee will reconsider whether or not to retain that firm. 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 during the year if the Audit Committee determines that such a change would be in the best interest of Clene Inc. and its stockholders.

Vote Required and Board Recommendation

The affirmative vote of a majority of the shares of Common Stock properly cast at the Annual Meeting is required to ratify this proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2021.

CORPORATE GOVERNANCE

Role of the Board of Directors

Our Board oversees the chief executive officer (“CEO”) and other senior management in the competent and ethical operation of Clene on a day-to-day basis and assures that the long-term interests of stockholders are being served.

Our key governance documents, including our Code of Business Conduct and Ethics and each standing committee’s charter, are available at www.invest.clene.com/governance/governance-documents. When describing meetings of the Board and its committees, and attendance thereat, this Proxy Statement refers to the board and committees of Clene Nanomedicine, Inc. prior to the Reverse Recapitalization, and to the Board and committees of Clene Inc. following the Reverse Recapitalization. We have not provided information regarding meetings of Tottenham, PubCo or Merger Sub prior to the Reverse Recapitalization because we believe they are not relevant and none of the directors of those entities have continued as directors of the Company. The Board met nine times during 2020, and each member of the Board who served during 2020 attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board held during 2020, and (ii) the total number of meetings held by each committee of the Board on which such member served during 2020.

The Board’s Role in Risk Oversight

The Board has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting to the Board by the audit committee. The audit committee represents the Board by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls and our compliance with legal and regulatory requirements. Through its regular meetings with management, including the finance, legal, internal audit and information technology functions, the audit committee reviews and discusses all significant areas of our business and summarizes for the Board all areas of risk and the appropriate mitigating factors. In addition, our Board receives periodic detailed operating performance reviews from management.

Composition of the Board and its Committees

Board Structure

Our Board has fixed the number of directors at nine. Under our charter, our Board is divided into three classes, designated as Class I, Class II and Class III. Each class serves staggered three-year terms. The Board is committed to inclusiveness and diversity, and has adopted a Board Diversity Policy.

The Board does not believe that rotating committee members at set intervals should be mandated as a policy since there may be reasons at a given point in time to maintain an individual Board member’s committee membership for a longer period.

The annual cycle of agenda items for Board and committee meetings reflects Board and committee requests and changing business and legal issues. The Board receives regularly scheduled presentations from our finance, legal and compliance departments and major business units and operations, and reviews enterprise risk at least annually. The Board’s and committees’ annual agenda includes review of, among other items, our long-term strategic plans and periodic reports on progress against these plans, emerging and disruptive technologies, potential acquisition or investment targets, capital projects, the evaluation of the CEO and management, and Board succession.

We have three standing committees of the Board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each current director attended at least 75% of the total Board meetings and meetings of the committees on which they served that were held in fiscal year 2020. All directors of the Company are strongly encouraged to attend our annual meeting of stockholders. The combined Company did not hold an annual meeting of stockholders in 2020.

Standing Committees

Each of our standing committees has a written charter approved by the Board that clearly establishes the committee’s roles and responsibilities. Copies of the charters for the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee, as well as our Code of Business Conduct

and Ethics, can be found through the “Governance” link on the Investors page on our website at www.clene.com. Please note that information on, or that can be accessed through, our website is not part of these proxy soliciting materials, is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, and, except for information filed by the Company under the cover of Schedule 14A, is not deemed to be proxy soliciting materials.

Our president and CEO and other executive officers will regularly report to the non-executive directors and Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls.

The following table provides summary information about the director nominees and our other Board members.

____________

(CB)  Chairman of the Board

(FE)   Audit Committee Financial Expert

C       Chair

M       Member

AC     Audit Committee

CC     Compensation Committee

NC     Nominating and Corporate Governance Committee

The total number of meetings of the Board held during our last fiscal year was nine. The director nominees are all current directors, and all members of the Board attended at least 75% of the aggregate of all fiscal year 2020 meetings of the Board and each committee on which each director served.

Audit Committee

Members:

The Audit Committee consists of Ms. Mosca, the chair, Mr. Ugwumba, and Mr. Jacobovitz.

Member Qualifications

Each member of the Audit Committee meets the additional requirements regarding independence for Audit Committee members under Nasdaq listing requirements. The Board has determined that Ms. Mosca, Mr. Ugwumba, and Mr. Jacobovitz are each an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act based upon their professional experience and education.

Committee Functions:

The Audit Committee oversees our accounting and financial reporting process and audits of financial statements. It also assists the Board in oversight and monitoring of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications and independence, (iv) the performance of our internal audit function and of the independent registered public accounting firm and (v) the principal risk exposures facing the Company that are related to financial statements, legal, regulatory and other similar matters, such as risks related to cybersecurity, as well as the Company’s related mitigation efforts. Additionally, the Audit Committee is responsible for preparing prepares the Audit Committee Report included in our Proxy Statement. It also provides the Board with the results of its monitoring and any additional information and materials as the committee may determine is necessary to make the Board aware of significant financial matters requiring the Board’s attention.

Meetings:

The Audit Committee took all of its actions in 2020 by unanimous written consent.

Compensation Committee

Members:

The Compensation Committee consists of Mr. Jacobovitz, the chair, Dr. Stevens, and Ms. Mosca.

Member Qualifications

In addition to being independent, each member of the Compensation Committee is a “non-employee director” for purposes of the Exchange Act. No member of the Compensation Committee was at any time during fiscal years 2019 or 2020, or at any other time, one of our officers or employees. None of our executive officers has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any entity, one of whose executive officers served as a director of our Board or member of our compensation committee.

Committee Functions:

The Compensation Committee is responsible for overseeing our compensation program and determining the compensation of our executive officers. The Compensation Committee Evaluates our compensation and incentive plans, policies and programs for executive officers and recommends the establishment of policies dealing with various compensation and employee benefit plans. Additionally, it reviews and discusses with management and recommends to the Board whether the disclosures under “Compensation Discussion and Analysis” should be included in our Proxy Statement. The Compensation Committee is also tasked with, at least annually, assessing the risks associated with our compensation policies, and reports to the Board and the Audit Committee whether our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on us.

The Compensation Committee also reviews the compensation paid to directors for service on the Board and its committees. It provides advice on management development matters that have major implications for the growth, development, and depth of our management team, including reviewing succession plans.

The Compensation Committee reviews, approves and when appropriate makes recommendations to the Board regarding the compensation of all executive officers. The Compensation Committee meets with its independent advisors and other independent members of the Board to determine the CEO’s compensation. Additionally, the Compensation Committee has the power to grant incentive and non-statutory stock options and restricted stock units and other forms of stock awards to employees, officers, directors, and consultants.

Meetings:

The Compensation Committee was formed in 2020 and did not meet separately from the full board during that year.

Compensation Committee Advisors

To independently assist and advise the Compensation Committee, the Compensation Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its compensation consultant. The engagement with FW Cook is exclusively with the Compensation Committee, which has sole authority to retain and terminate any compensation consultant or other advisor that it uses. FW Cook does not have any relationship with the Company or management except as it may relate to performing services on behalf of the Compensation Committee.

Nominating and Corporate Governance Committee

Members:

The Nominating and Corporate Governance Committee consists of Mr. Matlin, the chair, Mr. Gay and Dr. Stevens.

Member Qualifications

Each member of the Nominating and Corporate Governance Committee must be independent in accordance with Nasdaq rules.

Committee Functions:

The Nominating and Corporate Governance Committee identifies qualified individuals who should be considered for current or upcoming vacancies on the Board, consistent with the qualification criteria approved by the Board. It also reviews the qualifications of incumbent directors to determine whether to recommend them for reelection and selecting, or recommending that the Board select, the director nominees for the next annual meeting of stockholders. The Nominating and Corporate Governance Committee is also responsible for identifying Board members who are qualified to fill vacancies on any Board committee and recommending that the Board appoint the identified member or members to the applicable committee.

The Nominating and Corporate Governance Committee also reviews and recommends applicable corporate governance principles to the Board. Additionally, it oversees the evaluation of the Board and management team and handles such other matters as are specifically delegated to the committee by the Board from time to time.

The Company has adopted a policy strongly discouraging directors and officers from engaging in transactions that hedge or offset any decrease in the market value of the company, or are designed to do so.

Meetings:

The Nominating and Corporate Governance Committee was formed in 2020 and did not meet separately from the full board that year.

Corporate Governance Policies and Practices

We are committed to strong corporate governance. Our governance policies and practices include:

Ethical Conduct and Strong Governance

•        The Board has adopted a Code of Business Conduct and Ethics applicable to all our employees, including the executive officers, and our directors.

•        The Code of Business Conduct and Ethics articulates clear corporate governance policies, which include basic director duties and responsibilities.

•        The fundamental responsibility of the Board is to represent the interests of the stockholders of the Company. In fulfilling its responsibilities, the Board performs the following principal functions: (i) reviewing corporate strategy, annual operating budgets, mergers and acquisitions over a certain threshold and significant financings; (ii) providing general oversight of the Company’s business; (iii) selecting, evaluating, and compensating the Company’s CEO and other executive officers; (iv) evaluating and establishing Board processes, performance and compensation; (v) selecting directors; and (vi) monitoring legal and ethical conduct.

•        We have a hotline for employees to report concerns regarding ethics and financial matters, including accounting, internal controls, and audit concerns, and have established procedures for anonymous submission of these matters.

•        Each director is responsible for disclosing to the Nominating and Corporate Governance Committee and General Counsel situations that such director reasonably believes give rise to a potential conflict of interest or related person transaction. The Board, upon recommendation of the Nominating and Corporate Governance Committee and after consultation with the Company’s legal counsel, determines on a case-by-case basis or where it deems appropriate by specific category whether such a conflict of interest or related person transaction exists. Please refer to the discussion under “Certain Relationships and Related Transactions” for more information.

•        The Board conducts an annual assessment on its effectiveness and the effectiveness of each of its committees.

•        Directors are expected to attend all stockholder meetings.

•        The Board encourages directors to participate in developmental continuing education programs applicable to their position as a director of the Company, including, but not limited to, those recommended by the Nominating and Corporate Governance Committee.

Director Independence

•        The Company currently has an independent non-employee director as Chairman.

•        A majority of the Board members are independent of the Company and our management.

•        All members of our Board committees — the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee — are independent.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics (our “Code of Business Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer, which is available on our website. Our Code of Business Conduct is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct on our website.

Our Code of Business Conduct also provides that our officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our voting securities, any member of the immediate family of any

of the foregoing persons and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest, are not permitted to enter into a related party transaction with the Company without the approval of the Nominating and Corporate Governance Committee, subject to the exceptions described below.

A related person transaction is generally a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not covered by our Code of Business Conduct.

Under our Code of Business Conduct, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant shareholder, to enable the Company to identify any existing or potential related-person transactions and to effectuate the terms of our Code of Business Conduct. In addition, under the Code of Business Conduct, employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

Our Code of Business Conduct requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit Committee, or other independent body of our Board, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the Company’s best interests and those of our shareholders, as our Audit Committee, or other independent body of our Board, determines in the good faith exercise of its discretion.

Our Audit Committee has determined that certain transactions will not require the approval of the Audit Committee including certain employment arrangements of officers, director compensation, transactions with another company at which a related party’s only relationship is as a director, non-executive employee or beneficial owner of less than 10% of that company’s outstanding capital stock, transactions where a related party’s interest arises solely from the ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis and transactions available to all employees generally.

Directors and Executive Officers

Robert Etherington.    Mr. Etherington has been Clene’s President, Chief Executive Officer and Director since April 2013 and is in charge of overall management, business, and strategy of Clene. Mr. Etherington has over 28 years of experience in commercialization of pharmaceuticals and biotech products. Mr. Etherington began his pharmaceutical career with a number of sales and marketing roles at Parke-Davis, a division of Pfizer, culminating in a Team Leader position over the drug Lipitor. He left Pfizer in 2000 to be the founding Director of Marketing during the IPO year of Swiss-based, Actelion Pharmaceuticals, focused in cardiopulmonary disease. Mr. Etherington has served on the board of BioUtah, an independent trade association serving the life science industry in the State of Utah, including a term as Vice-chair, Chairman and Executive Chair, since June 2016. Mr. Etherington has also been a director of Corsair LLC, a privately held biotechnology company, since March 2018. Mr. Etherington obtained a bachelor’s degree of art from Brigham Young University in August 1990. He received his master’s degree of business administration from Brigham Young University in April 1992, majored in business with a pharmaceutical healthcare emphasis. Mr. Etherington also completed the alumnus-granting General Management Program in Harvard University in June 2011. Mr. Etherington was selected to serve on the board of directors because, as CEO of Clene, he provides valuable operational and strategic insights to the board’s decision-making process. The Board also values and benefits from Mr. Etherington’s experience in the pharmaceutical industry

Mark Mortenson.    Mr. Mortenson is Clene’s co-founder (2013) and Chief Science Officer of Clene. Mr. Mortenson is the co-inventor of the technology platform developed to produce clean-surface nanocrystal (CSN™) therapeutics, as well as the inventor/co-inventor on 30 other US patents and hundreds of corresponding foreign patents. Mr. Mortenson is a former chief patent counsel responsible for approximately 5,500 patents and patent applications in the United States and 44 foreign countries, and is the former Chief Operating Officer of research, development, and manufacturing for an advanced materials-based company of over 300 employees. Mr. Mortenson received his bachelor’s degrees in physics and in ceramic engineering from Alfred University in 1980, his master’s degree in material science from Pennsylvania State University in 1982, and his Juris Doctor from George Washington University in 1986.

Dr. Robert Glanzman.    Dr. Glanzman has been Clene’s Chief Medical Officer since July 2019. Dr. Glanzman is board certified in neurology, and a Fellow of the American Academy of Neurology. Dr. Glanzman spent seven years as Assistant Clinical Professor at Michigan State University, where he maintained clinical practice, taught residents and acted as principal investigator for numerous clinical trials. Dr. Glanzman spent eight years at Pfizer as Senior Medical Director and Team Leader of the medical affairs team for interferon beta-1a (Rebif). In 2007, he moved to Novartis where he oversaw the successful Phase III development of fingolimod (Gilenya) and the commercial launch of interferon beta-1b (Extavia), in the US. In 2009, he was recruited by the Roche Group as Global Development Team Leader for the ocrelizumab (Ocrevus) program from the end of Phase II through the initiation of Phase III, in 2012. Following this, he held positions of increasing responsibilities at Purdue Pharmaceuticals, Nektar Therapeutics and, from December 2015 to June 2019, was Chief Medical Officer of GeNeuro S.A. Dr. Glanzman has co-authored numerous peer-reviewed publications. Dr. Glanzman received a bachelor’s degree of science in biology from the University of North Carolina at Charlotte in 1982. He obtained a doctorate in medicine from the Wake Forest University School of Medicine in 1987. Dr. Glanzman’s clinical training includes an internship in internal medicine at the NY Medical College, completed in 1988, a residency in neurology at the University of Michigan, completed in 1991, and a fellowship in diagnostic nuclear medicine at Duke University, completed in June 1992.

Dr. Ted (Tae Heum) Jeong.    Dr. Jeong has been Clene’s Chief Financial Officer since December 2020. Dr. Jeong has more than 20 years of experience as a venture capitalist and a financial executive. He is a Managing Partner at KSV Global Innovations, a growth-stage investment firm which he co-founded in 2018. Before becoming CFO of Clene, Dr. Jeong was CFO of Rexahn Pharmaceuticals, Inc. (Nasdaq: REXN), an oncology and CNS-focused biopharmaceutical company, from 2002 to 2018, where he completed equity financings totaling more than $170 million and was also responsible for forming strategic alliances and executing license deals in the U.S., Europe, and Asia. From 1997 to 2002, he served as the Senior Investment Manager at Hyundai Venture Investment Corporation, a subsidiary of the Hyundai Motors conglomerate and one of the largest venture capital firms in South Korea, where he operated two of the first healthcare venture capital funds in Korea. From 2019 to 2021, he also served on the board of directors of Neurobo Pharmaceuticals (Nasdaq: NRBO), where he was chair of the audit committee. Dr. Jeong received his bachelor’s and master’s degrees of science in chemistry from Pohang University of Science & Technology. He also holds a master of science in finance degree from Johns Hopkins University, and a doctorate of management from the University of Maryland.

Shalom Jacobovitz.    Mr. Jacobovitz has been Clene’s director since March 2013 and the chairman of Clene’s Board since November 2015, and is in charge of supervising and providing independent judgement to our Board, as well as overall strategic planning and business planning of Clene. Mr. Jacobovitz has over 30 years of professional experience in the development of pharmaceuticals and biotech products. From October 2003 to April 2013, Mr. Jacobovitz served as the President of Actelion Pharmaceuticals U.S., Inc., a subsidiary of Actelion, and was responsible for implementing strategies globally. From April 2013 to February 2018, Mr. Jacobovitz was the Chief Executive Officer of American College of Cardiology, and was responsible for developing and implementing strategies and managing the members. Since March 2018, Mr. Jacobovitz has been serving at CiVi Biopharma, Inc., a biopharmaceutical company based in the United States, as the Chief Executive Officer and in charge of the overall management and business strategies. Mr. Jacobovitz received his bachelor’s degree of science in biology from the Western University (formerly known as the University of Western Ontario) in 1986. Mr. Jacobovitz was invited to serve as a director of Clene because of his extensive experience in the pharmaceutical and biotech industries, training in strategy and proven leadership qualities.

Alison Mosca.    Ms. Mosca has been on Clene’s board of directors since September 2019. Ms. Mosca is a Managing Director & CEO of Kensington Capital Holdings, the firm she co-founded in 2008. Ms. Mosca brings over 25 years of experience, focused on private family wealth management, including wealth structuring, preservation and transfer, philanthropic advising, tax, investment and risk management counsel. Prior to founding Kensington Capital Holdings, Ms. Mosca built a multi-family office within Audax Group, a leading middle-market private equity firm for the founding members and their families. Previous to her work at Audax Group, Ms. Mosca spent several years at PricewaterhouseCoopers. Her experience at PricewaterhouseCoopers included the Private Client Group & Audit Assurance serving a variety of clients, including broker-dealers, venture capital & private equity funds and their general partners, investment managers, insurance, high tech and manufacturing companies. Ms. Mosca’s experience also includes both non-profit and for-profit board level experience and mentoring. Ms. Mosca is a Certified Public Accountant, she received her MS with distinction in Personal Financial Planning

from Bentley University and her BS, cum laude with university honors program distinction, in Accounting from Northeastern University. Ms. Mosca was selected as director because of her deep experience in financial, accounting and both public and private investment matters.

Dr. John Stevens.    Dr. Stevens has been Clene’s director since November 2015. From March 2013 to July 2015, he also served as the chairman of Clene’s Board. Dr. Stevens founded Heartport, Inc., a minimally invasive cardiac surgery company that was acquired by Johnson & Johnson in 2001, and served as the Chief Technology Officer with that company from 1996 to 2001. Dr. Stevens co-founded Amp Resources, a renewable energy company, and served as the executive chairman of the board. Dr. Stevens co-founded Sundrop Fuels, Inc. and served as the Chief Executive Officer. From April 2010 to May 2019, and again beginning in January of 2021, Dr. Stevens was the co-founder of and served as the Chief Executive Officer at HeartFlow, Inc., a medical technology company focusing on cardiovascular disease. Dr. Stevens received a bachelor’s degree of science in psychology and communications from University of Utah in 1982. He obtained a doctor of medicine degree in medicine from Stanford University in June 1987. Dr. Stevens was chosen to serve as a director due to his medical credentials, understanding of human physiology, depth of knowledge and experience in clinical, ethical, quality and regulatory requirements for a healthcare company, and for his knowledge regarding investing in growth-oriented companies.

Chidozie Ugwumba.    Mr. Ugwumba has been on Clene’s board of directors since 2020. Since 2018, Mr. Ugwumba has served as a Managing Director and the Co-Head of the Direct and Impact Investment Group of WIT, LLC  — an investment management entity affiliated with Walton Enterprises. In his role, Mr. Ugwumba co-leads a multi-asset class investment team, and has an individual focus on sourcing, due diligence, and execution of healthcare and biotech venture capital transactions. He has led numerous investments in therapeutics companies in the US and Europe, across CNS, GI, cardiac, oncology, and infectious disease, and across modalities including small molecule, cell, gene, and regenerative therapy. Mr. Ugwumba also provides strategic advice to WIT, LLC’s healthcare and biotech portfolio companies and venture capital fund partners as a Director or Advisory Committee member. From 2015 to 2018, Mr. Ugwumba worked on the Private Credit and Infrastructure teams at Partners Group, a global private investment manager. He began his investment career as a public equity analyst at Neuberger Berman, and was a co-founder of Hunting Hill Global Capital  — a global event-driven hedge fund. Mr. Ugwumba received an MBA from the Johnson Graduate School of Management at Cornell University, and a BA in Political Science from Amherst College. He is a CFA, and CAIA charter holder. Mr. Ugwumba was selected to serve as a director because of his relevant experience and expertise and extensive knowledge of biotech investments.

David Matlin.    Mr. Matlin has been on Clene’s board of directors since 2020. Mr. Matlin is the Chief Executive Officer of MatlinPatterson Global Advisers LLC, a global private equity firm, which he co-founded in 2002. David was a former Managing Director at Credit Suisse First Boston and also a founding partner of Merrion Group, L.P. He currently serves on the public boards of Flagstar Bancorp, Inc. (NYSE: FBC) and U.S. Well Services, Inc. (NASDAQ: USWS), as well as privately held DermaSensor, Inc., Pristine Surgical, LLC, and Traffk, LLC. Mr. Matlin holds a Juris Doctor degree from the Law School of the University of California at Los Angeles and a BS in Economics from the Wharton School of the University of Pennsylvania. Mr. Matlin was selected to serve as a director due to his many years of experience successfully investing in and controlling a wide array of both mature and start-up businesses.

Jonathon Gay.    Mr. Gay is a Managing Partner at Kensington-SV Global Innovations LP (KSV), a growth stage investment firm which he co-founded in 2018. Prior to joining KSV, Mr. Gay served for five years as a Managing Partner and co-led the investment strategy of Kensington Capital Ventures, an investment group within Kensington Capital Holdings. While there, he oversaw transaction and execution of deals and monitored portfolio companies. Previous to co-leading KCV, he was a principal at KCH, a single-family office where he focused on PE/VC fund and direct investment strategies. Prior to joining KCH, Mr. Gay worked as a Vice President at HGGC in Palo Alto, California. While at HGGC, Mr. Gay performed functions in all aspects of the firm’s private equity practice including fund raising, investment sourcing, investment analysis and deal execution. Prior to joining HGGC, Mr. Gay served as an Operations Analyst at Sorenson Capital. Mr. Gay received his MBA from the Fuqua School of Business at Duke University. Mr. Gay was selected to serve as a director due to his investment experience in healthcare and biotech industries; expertise in venture, growth equity and late-stage investments; and proven business acumen.

Reed Wilcox.    Mr. Wilcox was a co-founder of Clene and served as its Chief Development Officer from March 2013 to September 2014. From January 2015 to September 2019, Mr. Wilcox has provided strategic innovation and growth consulting services to Clene. Mr. Wilcox has extensive experience in management, growth and strategy consulting, having served as Vice President and Director of Boston Consulting Group, co-founder and Chief Development Officer of General Resonance LLC, and founder and owner of Resonance RNW LLC. Since September 2014, Mr. Wilcox has been president, trustee and member of the board executive committee of Southern Virginia University, a private liberal arts college in Buena Vista, Virginia. Mr. Wilcox earned a bachelor’s degree in economics and international relations summa cum laude from Brigham Young University, MBA with High Distinction as a Baker Scholar from Harvard Business School, and Juris Doctor degree cum laude from Harvard Law School. Mr. Wilcox is an inventor on over 20 US patents and has extensive international business experience in Europe, China and Africa. His perspective as a co-founder of Clene and his strong background in strategy and innovation qualify him for service on the Board.

Dr. Fiona Costello.    Dr. Costello has been on Clene’s Board since December 2020. Dr. Costello is a professor affiliated with the Departments of Clinical Neurosciences and Surgery (Ophthalmology), University of Calgary and a Clinician Scientist with the Hotchkiss Brain Institute (HBI). She completed her medical school (1995) and Neurology residency training (2000) at Memorial University of Newfoundland, and then embarked on a clinical fellowship in Neuro-Ophthalmology at the University of Iowa (2000 – 2002). Her fellowship training was supported by an E.A. Baker Scholarship she received from the Canadian National Institute for the Blind. Since 2007, she has run a clinical practice in Calgary as a neuro-ophthalmologist, serving the needs of patients with disorders involving the visual pathways and the central nervous system. Dr. Costello’s area of research focuses on using the eye as a model for brain disorders including multiple sclerosis and tumors. In 2013, Dr. Costello was named Chair to the Roy and Joan Allen Investigatorship for Vision Research and was working to establish a translational vision research program at the HBI. She has published nearly 120 peer reviewed papers, 21 book chapters and has been invited to give over 220 national and international presentations at numerous academic venues. Dr. Costello’s advanced medical training and area of research make her valuable as a director in guiding the Company’s decisions regarding research, development and commercialization of its drug candidate products.

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

Introduction

Clene’s executive compensation program is designed to attract and retain individuals with the qualifications to manage and lead Clene as well as to motivate them to develop professionally and contribute to the achievement of Clene’s financial goals and ultimately to create and grow Clene’s overall enterprise value.

Clene’s named executive officers (“NEOs”) for 2020 are:

1.      Robert Etherington: Chief Executive Officer and President

2.      Mark Mortenson: Chief Science Officer

3.      Robert Glanzman, M.D., FAAN: Chief Medical Officer

Employment Agreements

Mr. Etherington is party to an Executive Officer letter agreement with Clene dated August 1, 2014 (the “Etherington Agreement”), which provides for a base salary of $300,000 per year (subject to periodic adjustment as determined by the Board), an annual incentive bonus of up to 30% of his base salary based on the achievement of performance objectives determined by the Board each year, eligibility to participate in Clene’s benefits plans and paid vacation. Mr. Etherington’s base salary in 2020 was $335,000. Mr. Etherington’s compensation was most recently adjusted in 2021, his base salary is now $415,000 per year and his annual incentive bonus can be up to 40% of his base salary. Mr. Etherington is also entitled to certain severance benefits upon a termination of his employment by Clene for a reason other than “cause” or his termination of his employment for “good reason.” Please see “— Severance Arrangements” for additional details.

Mr. Mortenson is party to an Executive Officer letter agreement with Clene dated August 1, 2014, which provides for a base salary of $300,000 per year (subject to periodic adjustment as determined by Clene’s employee compensation policies), and eligibility to participate in Clene’s benefits plans and paid vacation. Mr. Mortenson is entitled to an annual bonus with a target pay-out of 25% of his salary. Mr. Mortenson’s base salary in 2020 was $350,000. Mr. Mortenson’s base salary was most recently adjusted in 2021 and is now $385,000.

Dr. Glanzman is party to an Employment Agreement with Clene dated December 31, 2020 (the “Glanzman Agreement”), which provides for a base salary of $350,000 per year (subject to periodic adjustment as determined by Clene’s employee compensation policies), and eligibility to participate in Clene’s benefits plans and paid vacation. Dr. Glanzman is entitled to an annual bonus with a target pay-out of 25% of his salary. Dr. Glanzman’s base salary in 2020 was $350,000. Dr. Glanzman’s base salary was most recently adjusted in 2021 and is now $385,000. Dr. Glanzman may also receive pay in lieu of notice following the termination of his employment. See “— Severance Arrangements” for additional details.

Long-Term Incentive Compensation

The Plan provides for the grant of incentive and non-statutory stock options and restricted stock units and other forms of stock awards to employees, officers, directors, and consultants. Shares subject to options that are expired, terminated, surrendered or cancelled under the Plan without having been exercised will be available for future grants of awards. In addition, options for shares of Common Stock that are tendered to Clene by a participant to exercise an award are added back to the Plan’s option pool to increase the number of shares of Common Stock available for the grant of future awards. The exercise prices, vesting periods and other restrictions are determined at the discretion of the Board, except that the exercise price per share of options may not be less than 100% of the fair market value of the Common Stock on the date of grant. Stock options awarded under the Plan expire ten years after the grant date, unless the Board sets a shorter term. Stock options granted to employees, officers, members of the Board and consultants typically become exercisable over a four-year period. The purpose of the Plan is to align the interests of management with those of stockholders.

Severance Arrangements

Mr. Robert Etherington  — Pursuant to the Etherington Agreement, upon a termination of Mr. Etherington’s employment by Clene for a reason other than “cause” or Mr. Etherington’s termination of his employment for “Good Reason,” in exchange for execution and non-revocation of a comprehensive general release of claims, Mr. Etherington is entitled to receive one year of base salary, to be paid in accordance with Clene’s usual payroll practices. In addition, if Mr. Etherington’s employment is terminated by Clene for any reason other than “cause” or permanent disability, Clene will pay the same portion of his health insurance premiums of coverage under the Consolidated Omnibus Budget Reconciliation Action (“COBRA”) as it pays for active employees until the earliest of (i) the close of the three-month period following his termination of employment, (ii) the expiration date of his continuation coverage under COBRA or (iii) the date that he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

The Etherington Agreement generally provides that “cause” means Mr. Etherington’s (i) unauthorized use or disclosure of Clene’s confidential information or trade secrets, which use or disclosure causes material harm to Clene, (ii) material breach of any written agreement between him and Clene, (iii) material failure to comply with Clene’s written policies or rules after receiving notice of such failure, (iv) conviction of, or his plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State, (v) gross negligence or willful misconduct in the performance of his duties to Clene, (vi) continuing failure to perform assigned duties after receiving written notification of the failure from the Board or (vii) failure to reasonably cooperate in good faith with a governmental or internal investigation of Clene or its directors, officers or employees, if Clene has requested his cooperation, unless such request by Clene or cooperation by him is contrary to law or his legal rights.

The Etherington Agreement generally provides that “good reason” means that Mr. Etherington resigns within 12 months after one of the following conditions has come into existence without his consent: (i) a reduction in his base salary by more than 10%, (ii) a material diminution of his authority, duties or responsibilities, (iii) his permanent disability or (iv) a relocation of his principal workplace by more than 50 miles; provided that a condition will not be considered “good reason” unless he gives Clene written notice of the condition giving rise to “good reason” within 90 days after the condition comes into existence and Clene fails to remedy the condition within 30 days after receiving his written notice.

Dr. Robert Glanzman  — Dr. Glanzman and Clene have entered into an agreement which entitles Dr. Glanzman to severance payments under certain conditions. If Dr. Glanzman’s employment is terminated by Clene for “Cause” as defined in the agreement or if he resigns without “Good Reason” as defined in the agreement, then Dr. Glanzman is entitled to receive the “Termination Amounts” as defined in the agreement. If Dr. Glanzman’s employment is terminated by Clene other than for “Cause,” or if Dr. Glanzman terminates his employment for “Good Reason,” then Dr. Glanzman is entitled to receive the Termination Amounts, and in exchange for a general release of claims, Dr. Glanzman will also be entitled to receive one year of his base salary in accordance with Clene’s usual payroll practices and any option he holds to purchase Clene stock will become fully exercisable. If Dr. Glanzman’s employment is terminated due to his permanent disability, Clene will reimburse him for monthly COBRA premiums he pays for himself and his dependents for up to 18 months unless he obtains substantially equivalent health insurance from a new employer.

The Glanzman Agreement generally provides that “cause” means Dr. Glanzman’s (i) unauthorized use or disclosure of Clene’s confidential information or trade secrets, which use or disclosure causes material harm to Clene, (ii) material breach of any written agreement between him and Clene, (iii) material failure to comply with Clene’s written policies or rules after receiving notice of such failure, (iv) conviction of, or his plea of “guilty” or “no contest” to, a felony involving moral turpitude under the laws of the United States or any State, (v) grossly negligent act that has the effect of materially injuring Clene, (vi) continuing failure to perform assigned duties after receiving written notification of the failure from the Board or (vii) failure to reasonably cooperate in good faith with a governmental or internal investigation of Clene or its directors, officers or employees, if Clene has requested his cooperation, unless such request by Clene or cooperation by him is contrary to law or his legal rights.

The Glanzman Agreement generally provides that “good reason” means that Dr. Glanzman resigns after one of the following conditions has come into existence without his consent: (i) a reduction in his base salary or his bonus eligibility, (ii) a material diminution of his authority, duties or responsibilities, (iii) any failure of Clene or an affiliate to pay Dr. Glanzman any amount owed to him, (iv) Clene’s failure to obtain an agreement from any of Clene’s successors to assume and agree to perform the Glanzman Agreement in the same manner and to the same extent that Clene would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (v) a relocation of his principal workplace by more than 50 miles; provided that a condition will

not be considered “good reason” unless he gives Clene written notice of the condition giving rise to “good reason” within 30 days after the condition comes into existence and Clene fails to remedy the condition within 30 days after receiving his written notice.

The Glanzman Agreement generally provides that “Termination Amounts” means (i) any base salary owed to Dr. Glanzman through the date of termination; (ii) expense reimbursement amounts owed to Dr. Glanzman; (iii) all unpaid bonuses Dr. Glanzman earned prior to the termination date; (iv) a cash lump sum in respect to accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination; (v) any payments and benefits to which Dr. Glanzman (or his estate) is entitled pursuant to the terms of any employee benefit or compensation plan or program in which he participates (or participated); and (vi) any amount to which Dr. Glanzman is entitled pursuant to any other written agreements between the Company or any of its affiliates and Dr. Glanzman.

Compensation Actions Taken in 2020

In April 2020, a 3% cost of living adjustment raise was paid to all Clene employees including the executives, with the exception of Mr. Etherington. A bonus was paid to all employees in May 2020 calculated as a percentage of salary. This bonus included all the executives, with the exception of Mr. Etherington; Mr. Etherington’s bonus was paid in August 2020 at 40% of his salary as proposed by the Board and after receiving Board approval. In addition, in August 2020 after the close of the Series D capital raise, selected salary adjustments were paid to many Clene employees, including some of the executives as listed above at such salaries as noted.

Treatment of Equity Incentive Awards in Connection with the Merger

Upon closing of the merger, Clene stock options currently outstanding under the Plan converted into options to purchase the Parent’s common stock on the same basis as Clene common stock converted into Parent common stock.

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of Clene’s NEOs for the years listed below:

____________

(1)      There have been no grants of stock to the NEOs. Stock options are valued using the Black-Scholes option pricing model. Given the absence of trading history of Clene’s common stock, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within Clene’s industry that Clene considers to be comparable to its own business over a period equivalent to the expected term of the stock option grants. The risk-free interest rate for periods within the contractual life of the stock options is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend is assumed to be zero as Clene has never paid dividends and has no current plans to do so. The expected term represents the period that stock-based awards are expected to be outstanding. For option grants that are considered to be in the ordinary course, Clene determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For other option grants, Clene estimates the expected term using historical data on employee exercises and post-vesting employment termination behavior taking into account the contractual life of the award. The assumptions used to calculate the value of the stock option awards granted in 2018 are presented in Clene’s financial statements. The weighted average grant-date fair values of options granted for the years ended December 31, 2020 and 2019 were $2.3923 and $1.5806, respectively. Additional shares may be issued to the NEOs pursuant to RSUs related to options they currently hold upon the expiration of the escrow under the Merger Agreement or the Company’s achievement of milestones under the Merger Agreement. The exact number of shares issuable under such RSUs is not determinable until the occurrence of these events.

Outstanding Equity Awards  — 2020

The following table provides information regarding outstanding equity awards for Clene’s NEOs as of December 31, 2020:

____________

(1)      Additional shares may be issued to the NEOs pursuant to RSUs related to options they currently hold upon the expiration of the escrow under the Merger Agreement or the Company’s achievement of milestones under the Merger Agreement. The exact number of shares issuable under such RSUs is not determinable until the occurrence of these events.

(2)      Vesting dates  — (a) 25% vested on 4/1/2014 and 1/48 vested monthly thereafter; (b) 25% vested on 4/1/2014 and 1/48 vested monthly thereafter.

(3)      Vesting dates  — (a) 25% vested 12/28/2013 and 1/48 vested monthly thereafter (b) 25% vested on 8/26/2019 and 1/48 vested monthly thereafter.

(4)      Vesting dates  — 25% vested on 8/26/2019 and 1/48 vested monthly thereafter.

Potential Payments Upon Termination or Change in Control

See “— Severance Arrangements.”

Equity Compensation Plan

Purpose of the 2020 Stock Plan

Our 2020 Stock Plan was approved by our stockholders as part of the Reverse Recapitalization. The purpose of the Plan is to attract and retain the services of (i) selected employees, officers, and directors of the combined company or any parent or subsidiary of Clene, and (ii) selected nonemployee agents, consultants, advisers, and independent contractors of Clene or any parent or subsidiary of Clene. The intention is to provide a means whereby the combined company can align the long-term financial interests of its employees, consultants, and directors with the financial interests of its stockholders. Our employee equity compensation program, as implemented under the Plan, will allow us to remain competitive with comparable companies in our industry by giving us the resources to attract and retain talented individuals to achieve our business objectives and build stockholder value. The ability to grant options and other equity-based awards will help the combined company to motivate employees, consultants, and directors and encourage them to devote their best efforts to the combined company’s business and financial success.

Description of the 2020 Stock Plan

Subject to adjustment for various corporate actions such as stock splits or mergers described in more detail below, the shares to be offered under the Plan will consist of Clene’s Common Stock, and the total number of shares of Common Stock that may be issued under the Plan shall be 12,000,000, all of which may be issued pursuant to Incentive Stock Options or any other type of award under the Plan. If an option or other award granted under the Plan expires, terminates or is cancelled, the unissued shares subject to that option or award shall again be available under the Plan. If shares awarded pursuant to the Plan are forfeited to or repurchased at original cost by the post-combined company, the number of shares forfeited or repurchased at original cost shall again be available under the Incentive Plan.

The Plan has been adopted and approved by the Board and became effective as of the closing of the Reverse Recapitalization (the “Effective Date”) by a vote of the stockholders. Options and stock awards may be granted at any time after the Effective Date and before termination of the Plan. The Plan will continue in effect until the earlier of (i) the date that is ten years after the Effective Date or (ii) such time as all shares available for issuance under the Plan have been issued and all restrictions on the shares have lapsed. Our Board may suspend or terminate the Plan at any time except with respect to options and stock awards then outstanding under the Plan. No options or stock awards may be granted under the Plan after its termination. Termination does not affect any outstanding options or stock awards, any right of ours to repurchase shares or the forfeitability of shares issued under the Plan.

The Plan is administered by our Board or compensation committee to which the Board may delegate any or all authority for the administration of the Plan. If authority is delegated to the compensation committee, all references to the Board in the Plan and in this description shall mean and relate to the committee, except (i) as otherwise provided by the Board and (ii) that only the Board may amend or terminate the Plan. The Board or the compensation committee shall determine and designate the individuals to whom options or other awards shall be made (“Recipients”), the number of such options or awards, and the other terms and conditions of such options or awards. Subject to the provisions of the Plan and applicable law, the Board may adopt and amend rules and regulations relating to the administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares, and make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Board shall be final and conclusive. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner, and to the extent it deems expedient to carry the Plan into effect, and the Board shall be the sole and final judge of such expediency.

Our Board may, from time to time, take the following actions, separately or in combination, under the Plan: (i) grant incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) grant options other than incentive stock options; and (iii) grant stock awards as defined in the Plan. Awards may be made to employees, including employees who are officers or directors, and to other individuals selected by the Board; provided, however, that only our employees or any of our parent or subsidiary are eligible to receive incentive stock options. The Board will select the individuals to whom awards shall be made and shall specify the action taken with respect to each individual to whom an award is made.

With respect to each option grant, the Board will determine the number of shares subject to the option, the exercise price, the duration of the option, the times at which the option may be exercised and whether the option is an incentive stock option or a non-statutory stock option. The exercise price per share will be determined by the Board at the time of the grant. The exercise price will not be less than 100% of the fair market value of the Common Stock covered by the option at the date the option is granted (110% for holders of 10% or more of our voting power). The fair market value will be the closing price of the Common Stock on the last trading day before the date the option is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the Board in good faith. No Recipient of any option or other award under the Plan will have any rights as a stockholder with respect to any shares of Common Stock subject to such option or award until the date the Recipient becomes the holder of record of such shares.

The Board may issue shares under the Plan as stock awards for any form of consideration determined by the Board, including promissory notes and services and including no consideration or such minimum consideration as may be required by law. Stock awards shall be subject to the terms, conditions, and restrictions determined by the Board. The restrictions may include restrictions concerning transferability, repurchase by the post-combined company, and forfeiture of the shares issued, together with any other restrictions determined by the Board. Stock awards subject to restrictions may be either restricted stock awards under which shares are issued immediately upon grant subject to forfeiture if vesting conditions are not satisfied or restricted stock unit awards under which shares are not issued until after vesting conditions are satisfied. The related stock award agreement may contain any terms, conditions, restrictions, representations, and warranties required by the Board. No shares shall be issuable under a restricted stock unit award or similar stock award after the expiration of ten years from the date such award is granted.

We may require any Recipient of a stock award to pay to us in cash or by check amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the Recipient fails to pay the amount demanded, we may withhold that amount from other amounts payable to the Recipient, including salary, subject to applicable law. With the Board’s consent, a Recipient may satisfy this obligation, in whole or in part, by instructing us to withhold from any shares to be issued or by delivering to us other shares of Common Stock of Clene; provided, however, that the number of shares so withheld or delivered shall not exceed the amount necessary to pay tax withholding to each jurisdiction calculated at the maximum tax rate applicable to income earned in that jurisdiction.

If our outstanding Common Stock is increased or decreased or changed into or exchanged for a different number or kind of shares or other securities by reason of any stock split, reverse stock split, combination of shares, dividend payable in shares, recapitalization, reclassification or other distribution of Common Stock to stockholders generally without the receipt of consideration by us, appropriate adjustment will be made by the Board in the number and kind of shares available for grants under the Plan and in all other share amounts set forth in the Plan. In addition, the Board will make appropriate adjustments in (i) the number and kind of shares subject to outstanding awards, and (ii) the exercise price per share of outstanding options, so that the Recipient’s proportionate interest before and after the occurrence of the event is maintained. Unless otherwise determined by the Board, in the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which we are a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of our assets, the Board shall, in its sole discretion and to the extent possible under the structure of the transaction and the Plan, with respect to each outstanding option and stock award under the Plan, choose how options and awards shall be handled.

The Board may at any time modify or amend the Plan in any respect; provided, however, that any modification or amendment of the Plan shall be subject to stockholder approval to the extent required under applicable law or the rules of Nasdaq. No change in an option or other award already granted shall be made without the written consent of the Recipient if the change would adversely affect such Recipient.

DIRECTOR COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee is currently reviewing a director compensation policy but has not yet adopted one. The following table provides information regarding non-statutory stock option awards made to directors for the years listed below:

____________

(1)      There have been no grants of stock to the directors. Stock options are valued using the Black-Scholes option pricing model. Given the absence of trading history of Clene’s Common Stock, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within Clene’s industry that Clene considers to be comparable to its own business over a period equivalent to the expected term of the stock option grants. The risk-free interest rate for periods within the contractual life of the stock options is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend is assumed to be zero as Clene has never paid dividends and has no current plans to do so. The expected term represents the period that stock-based awards are expected to be outstanding. For option grants that are considered to be in the ordinary course, Clene determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For other option grants, Clene estimates the expected term using historical data on employee exercises and post-vesting employment termination behavior taking into account the contractual life of the award. The weighted average grant-date fair value of options granted to Directors during 2018 was $0.833, and during 2019 was $2.500, and no options were granted to Directors in 2020. Additional shares may be issued to these directors pursuant to RSUs related to options they currently hold upon the expiration of the escrow under the Merger Agreement or the Company’s achievement of milestones under the Merger Agreement. The exact number of shares issuable under such RSUs is not determinable until the occurrence of these events.

(2)      395,933 options to purchase Common Stock at an exercise price of $0.833 per share.

(3)      39,593 options to purchase Common Stock at an exercise price of $2.500 per share.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In August 2018, in conjunction with an investment made in the Company’s Series C Preferred Stock and Series C Preferred Stock Warrants by 4Life, LLC, an investor, the Company entered into a supply agreement with the investor. Under the terms of this agreement, the Company granted the investor an exclusive license to pursue development of dietary supplements using certain of the Company’s intellectual property (IP). The exclusive rights to the IP will be for a term of 5 years from the commencement of sales of licensed product by the investor, with a deemed commencement date of January 1, 2023 if sales have not yet commenced, and is subject to annual minimum sales. The agreement may be renewed for additional 5-year terms. If the investor fails to meet the annual minimum sales requirements, the investor may pay an additional fee to maintain exclusivity or have the investor’s license converted to non-exclusive rights. As part of this agreement, the Company will provide non-pharmaceutical product to the investor for development efforts and potential future production, and the investor is to pay royalties of 3% of incremental sales, as defined in the agreement. As of December 31, 2020, the Company had sold $70 thousand of product under this agreement, as well as $62 thousand of product not under this agreement, and received $0.1 million in advance to be applied against future sales of product under this agreement. The Company recorded this advanced amount as deferred revenue as of December 31, 2020 within accrued liabilities, and the Company expects to fulfil the performance obligations to release the deferred revenue in the first half of 2021 as the investor purchases product. The investor has not yet made commercial sales of their products under the agreement, and as such the Company has not yet earned royalty revenues. As of and for the year ended December 31, 2019, the Company had not sold any product under this agreement, and there were no balances outstanding due to or from the investor.

Clene did not have any material related party transactions during 2018, or 2019.

Registration Rights Agreements

In connection with the Reverse Recapitalization, Clene entered into a Registration Rights Agreement with certain of Clene’s current stockholders that provided for the registration of approximately 21.3 million shares of Common Stock being issued to Clene’s stockholders in connection with the transactions. These Clene stockholders are entitled to (i) make a written demand for registration under the Securities Act of all or part of their closing payment shares (up to a maximum of two demands in total), and (ii) “piggy-back” registration rights with respect to registration statements filed following the consummation of the Reverse Recapitalization. Clene will bear the expenses incurred in connection with the filing of any such registration statements.

All of the shares of Common Stock subject to the Registration Rights Agreement were registered on an S-1 registration statement that became effective in March 2020.

Lock-Up Agreements

Clene entered into Lock-Up Agreements with certain Clene stockholders individually beneficially owning more than 2.5% of Clene’s Common Stock in December 2020 (an aggregate of 36,854,068 shares of our Common Stock). The Lock-Up Agreements provide that these stockholders will not, for at the least six months from the closing of the Reverse Recapitalization and subject to certain exceptions, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the ordinary shares issued in connection with the Acquisition Merger, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise. Such lock-up provisions will not apply to the transfer by gift or court order, or transfers to permitted transferees such as immediate family members or affiliates, provided that any such transferee will also be subject to the Lock-Up Agreement.

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. Each indemnification agreement provides for indemnification and advancement by us of certain expenses and costs relating to claims, suits or proceedings arising from service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

(23)    The shares owned by AK Holdings Company, LC may also be deemed to be beneficially owned by Alan and Karen Ashton. Mr. and Ms. Ashton each own 50% of AK Holdings Company, LC and Mr. Ashton is the chief executive officer of AK Holdings Company, LC. The registered address of AK Holdings Company, LC is 3200 W. Clubhouse Dr., Suite 200, Lehi UT 84043.

(24)    This amount includes approximately 864,660 shares that would be issued to AK Holdings Company, LC if it elected to convert its Series A warrant and 160,220 shares that would be issued to AK Holdings Company, LC if it elected to convert its senior warrant.

(25)    General Resonance is a limited liability company and its board of managers exercises voting and dispositive power concerning Clene’s Common Stock. The registered address of General Resonance is 6510 S Millrock Dr, Suite 250, Holladay, UT 84121.

(26)    The shares beneficially owned by Mr. Walton are those over which he indirectly exercises sole investment power. The registered address for Mr. Walton is PO Box 1860, Bentonville, AR 72712.

AUDIT COMMITTEE REPORT

The following is the report of the Audit Committee with respect to Clene Inc.’s audited financial statements for the year ended December 31, 2020.

The purpose of the Audit Committee is to assist the Board in fulfilling its responsibility to oversee our accounting and financial reporting, internal controls and audit functions. The Audit Committee Charter describes in greater detail the full responsibilities of the Committee and is available in the “Governance” section of our website at www.clene.com. The Audit Committee is comprised entirely of independent directors as defined by applicable Nasdaq Stock Market standards.

Management is responsible for our internal controls and the financial reporting process. PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm for the fiscal year ended December 31, 2020, was responsible for performing an independent audit of our consolidated financial statements in accordance with the standards established by the Public Company Accounting Oversight Board (United States) and issuing a report thereon. The Committee’s responsibility is to monitor these processes. The Audit Committee has reviewed and discussed the consolidated financial statements with management and PwC.

In the course of its oversight of our financial reporting process, the Audit Committee:

•        reviewed and discussed with management and PricewaterhouseCoopers LLP our audited financial statements for the fiscal year ended December 31, 2020;

•        discussed with PwC the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees;

•        received written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence;

•        reviewed with management and PwC our critical accounting policies;

•        discussed with management the quality and adequacy of our internal controls;

•        discussed with PwC any relationships that may impact their objectivity and independence; and

•        considered whether the provision of non-audit services by PwC is compatible with maintaining its independence.

Based on the foregoing review and discussions, the Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the Securities and Exchange Commission.

By the Audit Committee,

Alison Mosca, Chair

Chidozie Ugwumba

Shalom Jacobovitz

Dismissal of PricewaterhouseCoopers LLP

On March 30, 2021, the Audit Committee of the Board of Directors (the “Audit Committee”) of Clene Inc. (the “Company”) approved the dismissal of PricewaterhouseCoopers LLP (“PwC”), which was then serving as the Company’s independent registered public accounting firm. PwC was dismissed on March 30, 2021 as the Company’s independent registered accounting firm, effective immediately.

PwC’s reports on the Company’s financial statements for the years ended December 31, 2020 and 2019 did not contain any adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles except for (i) the emphasis of matter discussed relating to the Company needing additional financing or a collaboration agreement to fund future operations in the 2020 report, and (ii) the substantial doubt about the Company’s ability to continue as a going concern disclosed in the 2019 report.

During the Company’s two most recent fiscal years ended December 31, 2020 and 2019 and the subsequent interim period through March 30, 2021 there were no (i) disagreements, within the meaning of Item 304(a)(1)(iv) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (“Regulation S-K”), and the related instructions thereto, with PwC on any manner of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the subject matter of the disagreements in connection with its reports; or (ii) reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto, except for the material weaknesses identified related to (i) an ineffective control environment commensurate with its financial reporting requirements, including (a) lack of a sufficient number of trained professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately; and (b) lack of structures, reporting lines and appropriate authorities and responsibilities to achieve financial reporting objectives, which contributed to the following additional deficiencies (each of which individually represents a material weakness) in Clene’s internal control over financial reporting; (ii) lack of formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of account reconciliations and journal entries; (iii) lack of segregation of duties related to manual journal entries, including the ability to both prepare and post manual journal entries without an independent review by someone without the ability to prepare and post manual journal entries; (iv) lack of formal accounting policies related to complex transactions specifically related to warrants to purchase preferred stock and convertible promissory notes with embedded derivatives and the completeness and accuracy of the data used in the valuation; and (v) ineffective controls over certain information technology (“IT”) general controls for IT systems.

The Company provided PwC with a copy of the foregoing disclosures prior to the filing of the Company’s Current Report on Form 8-K and requested that PwC furnish a letter addressed to the SEC stating whether it agrees with such disclosures, and, if not, stating the respects in which it does not agree. PwC’s letter is attached as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed on April 2, 2021.

AppointmentRepresentatives of Deloitte & Touche LLP

On March 31, 2021, the Audit Committee, under delegated authority of the Board, appointed Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021, effective immediately. During our two most recent fiscal years ended December 31, 2020 and 2019, and the subsequent interim period through March 31, 2021, neither the Company nor anyone acting on its behalf consulted with Deloitte regarding any of the matters described in Items 304(a)(2)(i) and (ii) of Regulation S-K.

Audit Fees for 2020

PwC, an independent registered public accounting firm, audited our financial statements for the year ended December 31, 2020. Representatives of PricewaterhouseCoopers LLP are expected to attend the Annual Meeting, be available to respond to appropriate questions, and they will have the opportunity to make a statement if they desire.desire to do so.

Principal Accounting Fees and Services

The aggregate fees for audit and other services provided by PricewaterhouseCoopers LLPDeloitte for the fiscal yearyears ended December 31, 20202023 and 2022 are as follows:

____________

(1)      Audit Fees consistCommittee Policy for Pre-Approval of professional services rendered for the audits of our financial statements and reviews of quarterly financial statements. The Audit Fees also include fees of $1,456,000 related to services performed in connection with the Reverse Recapitalization, which was completed in December 2020.Independent Registered Public Accountant Services

Our Audit Committee has adopted procedures requiring the pre-approvalpre-approval of all non-auditnon-audit (including tax) services performed by our independent registered public accounting firm in order to assure that these services do not impair the auditor’s independence. These procedures generally approve the performance of specific services subject to a cost limit

for all such services. This general approval is to be reviewed, and if necessary modified, at least annually. Management must obtain the specific prior approval of the Audit Committee for each engagement of the independent registered public accounting firm to perform other audit-relatedaudit-related or other non-auditnon-audit services. For engagements for audit-relatedaudit-related or tax-relatedtax-related services within a specified dollar limit, the Chair of the Audit Committee has authority to provide such prior approval, and she reports to the full committee whenever she has exercised that authority. The Audit Committee does not delegate its responsibility to approve services performed by the independent registered public accounting firm to any member of management.

The standard applied by the Audit Committee in determining whether to grant approval of any type of non-auditnon-audit service, or of any specific engagement to perform a non-auditnon-audit service, is whether the services to be performed, the compensation to be paid therefore and other related factors are consistent with the independent registered public accounting firm’s independence under guidelines of the SEC and applicable professional standards. Relevant considerations include whether the work product is likely to be subject to, or implicated in, audit procedures during the audit of our financial statements, whether the independent registered public accounting firm would be functioning in the role of management or in an advocacy role, whether the independent registered public accounting firm’s performance of the service would enhance our ability to manage or control risk or improve audit quality, whether such performance would increase efficiency because of the independent registered public accounting firm’s familiarity with our business, personnel, culture, systems, risk profile and other factors, and whether the amount of fees involved, or the non-auditnon-audit services portion of the total fees payable to the independent registered public accounting firm in the period, would tend to reduce the independent registered public accounting firm’s ability to exercise independent judgment in performing the audit. During the year ended December 31, 2023, all services provided by Deloitte were pre-approved by the Audit Committee.

DismissalVote Required and Board Recommendation

The affirmative vote of Friedman LLPthe holders of a majority of the votes cast is required to ratify this proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024.

PROPOSAL NO. 3

APPROVAL, ON AN ADVISORY BASIS, OF OUR EXECUTIVE COMPENSATION

Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with an opportunity to cast an advisory, non-binding vote on the compensation of our NEOs, commonly referred to as a “say-on-pay” vote.

Our executive compensation programs are designed to attract and retain individuals with the proper qualifications to manage and lead Clene, to motivate them to develop professionally and contribute to the achievement of our financial goals, and to ultimately create and grow our overall enterprise value. Our Compensation Committee regularly reviews our executive compensation programs to ensure they continue to meet our objectives and align our executive compensation structure with the interests of stockholders. This vote is not intended to address any specific item of compensation or any specific NEO, but rather the overall compensation of all our NEOs as described in this Proxy Statement. We encourage stockholders to read the section “—Executive Compensation” below for detailed information about our executive compensation programs and their objectives.

Our Board and Compensation Committee believe our executive compensation programs use appropriate structures and sound pay practices that are effective in achieving our core objectives. Accordingly, our Board and Compensation Committee asks that you vote in favor of the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the Company’s Proxy Statement for the Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative disclosures.”

Because this is an advisory vote, the outcome will not be binding on us or our Board or Compensation Committee. Nevertheless, our Board and Compensation Committee value the opinions expressed by our stockholders and will take the outcome of the vote into account in future determinations concerning our executive compensation program.

Vote Required and Board Recommendation

The affirmative vote of the holders of a majority of the votes cast is required to approve this proposal, on an advisory basis.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

PROPOSAL NO. 4

INDICATION, ON AN ADVISORY BASIS, OF THE PREFERRED FREQUENCY OF STOCKHOLDER ADVISORY VOTES ON OUR EXECUTIVE COMPENSATION

Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with an opportunity to cast an advisory, non-binding vote on how frequently we should seek an advisory, non-binding vote on the compensation of our NEOs (such as Proposal No. 3 beginning on page 15 of this Proxy Statement). Section 14A of the Exchange Act enables our stockholders to indicate, at least once every six years, how frequently we should seek an advisory, non-binding vote on the compensation of our NEOs, commonly referred to as a “say-on-frequency” vote. By voting on this Proposal No. 4, stockholders may indicate whether they would prefer an advisory, non-binding vote on compensation of our NEOs once every one year, two years or three years.

After careful consideration, our Board and Compensation Committee have determined that an advisory, non-binding vote on compensation of our NEOs that occurs every year is the most appropriate alternative for the Company, and therefore our Board and Compensation Committee recommend that you vote for a one-year interval for the advisory, non-binding vote on compensation of our NEOs. In formulating its recommendation, our Board and Compensation Committee considered that an annual advisory, non-binding vote will enable our stockholders to provide timely, direct input on our executive compensation programs and is consistent with our efforts to engage in an ongoing dialogue with our stockholders. The next vote on the frequency of the advisory, non-binding vote on executive compensation is expected to be held at the 2030 Annual Meeting of Stockholders.

You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting.

The Board and Compensation Committee will consider the frequency option that receives the majority of the votes cast to be the recommendation of the stockholders. However, because this vote is advisory and non-binding, if none of the frequency options receives such a majority, the option receiving the greatest number of votes will be considered the frequency recommended by our stockholders. Our Board and Compensation Committee value the opinions expressed by our stockholders in these votes, and even through non-binding, will consider the outcome of these votes in making its decisions on compensation of our NEOs. The Board and Compensation Committee may decide that it is in the best interests of our stockholders and the Company to hold an advisory, non-binding vote on compensation of our NEOs more or less frequently than the option approved by our stockholders.

Vote Required and Board Recommendation

The frequency option of one year, two years or three years receiving the majority of the votes cast will be considered the frequency for the advisory, non-binding vote on the compensation of our NEOs preferred by our stockholders. However, because this vote is advisory and non-binding, if none of the frequency options receives such a majority, the option receiving the greatest number of votes will be considered the frequency recommended by our stockholders.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “ONE YEAR” AS THE PREFERRED FREQUENCY OF STOCKHOLDER ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

PROPOSAL NO. 5

APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

The Board has unanimously approved, subject to stockholder approval, an amendment to our Certificate of Incorporation (the “Authorized Share Increase Amendment”) to increase the number of our authorized shares of Common Stock (the “Authorized Share Increase Proposal”) from 300,000,000 to 600,000,000 (the “Authorized Share Increase”), subject to stockholder approval. The Board has not approved an increase in the shares of our preferred stock, par value $0.0001 per share (“Preferred Stock”).

Our Certificate of Incorporation currently authorizes the issuance of 300,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. As of April 1, 2024, 128,433,721 shares of Common Stock and no shares of Preferred Stock were issued and outstanding. In addition, the following potentially dilutive shares were outstanding as of our latest quarter ended December 202031, 2023:

On

The additional shares of Common Stock authorized by the Authorized Share Increase, if and when issued, would have the same rights and privileges as the shares of Common Stock previously authorized.

The additional shares of Common Stock authorized by the Authorized Share Increase could be issued at the discretion of the Board from time to time for any proper corporate purpose, including, without limitation, the acquisition of other businesses, the raising of additional capital for use in our business, including in connection with the issuance and exercise of warrants, a split of or dividend on then-outstanding shares or in connection with any employee stock plan or program. Except to the extent required by applicable law or regulation, any future issuances of authorized shares of Common Stock may be approved by the Board without further action by the stockholders. The availability of additional shares of Common Stock would be particularly important in the event that the Board needs to undertake any of the foregoing actions on an expedited basis in order to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Common Stock where such approval might otherwise be required.

Although the Board will issue Common Stock only when required or when the Board considers such issuance to be in our best interest, the issuance of additional Common Stock may, among other things, have a dilutive effect on the earnings per share (if any) and on the equity and voting rights of our existing stockholders.

Additionally, the presence of such additional authorized but unissued shares of Common Stock could discourage unsolicited business combination transactions which might otherwise be desirable to stockholders. While it may be deemed to have potential anti-takeover effects, the proposed increase in the number of authorized shares of Common Stock is not prompted by any specific effort or takeover threat currently perceived by management. The Board believes that the benefits of providing it with the flexibility to issue shares without delay for any proper business purpose, including as an alternative to an unsolicited business combination opposed by the Board, outweigh the possible disadvantages of dilution and discouraging unsolicited business combination proposals and that it is prudent and in the best interests of stockholders to provide the advantage of greater flexibility which will result from the recommended increase.

If Proposal No. 5 is approved, the Board plans to file the Certificate of Amendment to the Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware promptly thereafter. The Certificate of Amendment will become effective on the date of filing by the Secretary of State of the State of Delaware. The text of the Certificate of Amendment is subject to modification to include such changes as may be required by the office of the Secretary of State of the State of Delaware and as the Board deems necessary and advisable to effect the planned increase in the authorized number of shares of Common Stock. A copy of the Certificate of Amendment as anticipated to be filed if Proposal No. 5 is approved is attached hereto as Annex A, and the description of the Certificate of Amendment herein is qualified entirely by reference to Annex A.

In addition to the Authorized Share Increase Proposal, we are seeking stockholder approval of the Reverse Stock Split Proposal (Proposal No. 7) at the Annual Meeting. If this Proposal No. 5 and Proposal No. 7 are both approved by our stockholders at the Annual Meeting and the Reverse Stock Split is implemented by our Board, we would expect to file the Authorized Share Increase Amendment with the Secretary of State of the State of Delaware promptly after the Annual Meeting and subsequently file a Reverse Stock Split Amendment with the Secretary of State of the State of Delaware at a ratio to be determined by the Board within the range of ratios approved by the stockholders at the Annual Meeting.

Vote Required and Board Recommendation

The affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon is required to approve this proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 600,000,000.

PROPOSAL NO. 6

APPROVAL OF AN AMENDMENT TO OUR AMENDED 2020 STOCK PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE

Overview

The Amended 2020 Stock Plan, which replaced our 2014 Stock Plan, was initially approved by our stockholders on December 30, 2020 and was previously amended on May 9, 2023. The purpose of the Amended 2020 Stock Plan is to attract and retain the services of (i) selected employees (approximately 67 persons), executive officers (approximately 6 persons), and directors of the Company or any parent or subsidiary (approximately 8 persons), and (ii) selected nonemployee agents, consultants, advisers, and independent contractors of the Company or any parent or subsidiary (approximately 10 persons).

Our Board has unanimously adopted, and is submitting for stockholder approval, an amendment to the Amended 2020 Stock Plan to increase the number of shares of Common Stock reserved for issuance thereunder by 30,000,000 shares (from 18,400,000 shares to 48,400,000 shares). As of April 1, 2024, we had a total of 128,433,721 shares of Common Stock issued and outstanding, 17,596,920shares of Common Stock issued under the Amended 2020 Stock Plan as stock options or restricted stock awards, and 476,347 remaining shares of Common Stock available for issuance under the 2020 Stock Plan. As of April 1, 2024, the closing price of our Common Stock on Nasdaq was $0.4199. Accordingly, our Board has determined that there are not sufficient shares of Common Stock available under the Amended 2020 Stock Plan to support our intended compensation programs over the next several years. Our Board believes that our equity compensation program, as implemented under the Amended 2020 Stock Plan, allows us to remain competitive with comparable companies in our industry by giving us the resources to attract and retain talented individuals to achieve our business objectives and build stockholder value. The ability to grant options and other equity-based awards helps us to motivate employees, executive officers, directors, and consultants and encourage them to devote their best efforts to our business and financial success.

If the Company’s stockholders approve this Proposal No. 6, we expect the number shares of Common Stock available for issuance under the Amended 2020 Stock Plan will be sufficient to meet our expected needs for up to three years based on our historical practices and performance and our anticipated future plans as determined by the Compensation Committee with input from its independent compensation consultant and our management. If the Company’s stockholders do not approve this Proposal No. 6, the current Amended 2020 Stock Plan will continue in its current form, but the proposed 30,000,000 share increase will not be effective and could result in a serious disruption of our compensation programs and will limit our ability to attract and retain the services of employees, executive officers, directors, and consultants.

Information Regarding the Amended 2020 Stock Plan

Burn Rate and Overhang

In setting and recommending to stockholders the number of additional shares to authorize under the Amended 2020 Stock Plan, the Board and Compensation Committee considered the historical number of equity awards granted under the Amended 2020 Stock Plan, and, as applicable, the 2014 Stock Plan, as well as the Company’s three-year average burn rate for the preceding three fiscal years as follows:

An additional metric that we use to measure the cumulative dilutive impact of our equity program is fully-diluted overhang (the sum of (1) the number of shares subject to equity awards outstanding under our 2014 Stock Plan and Amended 2020 Stock Plan, but not yet exercised or settled and (2) the number of shares available to be granted under our Amended 2020 Stock Plan, divided by the sum of (1) the total shares of Common Stock outstanding at the Record Date, (2) the number of shares subject to equity awards outstanding under our 2014 and Amended 2020 Stock Plan, but not yet exercised or settled, and (3) the number of shares available to be granted under our Amended 2020 Stock Plan. Our approximate fully-diluted overhang as of the Record Date was 15.4% as a percent of fully-diluted common shares outstanding. If the amendment to the Amended 2020 Stock Plan is approved, our approximate potential fully-diluted overhang as of that date would increase to 29.4% and then will decline over time.

In addition to the preceding information, the following are significant factors that we considered in the evaluation of the Compensation Committee, with input from its independent compensation consultant and our management, in determining acceptable and targeted levels of dilution: (i) competitive data from relevant peer companies and (ii) potential future cost saving initiatives, including reductions in compensation, hiring freezes, and/or elimination of certain staff positions. Our equity programs are assessed on an ongoing basis and the Compensation Committee regularly consults with its independent compensation consultant and management.

Outstanding Awards

The grant of awards under the Amended 2020 Stock Plan is discretionary, and we cannot determine now the number or type of options or other awards to be granted in the future to any particular person or group. The awards granted under the Amended 2020 Stock Plan as of April 1, 2024, are as follows:

Purpose of the Amended 2020 Stock Plan

Our Amended 2020 Stock Plan was approved by our stockholders on December 30, 2020 (the “Effective Date”) and amended on May 9, 2023. The purpose of the Amended 2020 Stock Plan is to attract and retain the services of (i) selected employees, executive officers, and directors of the Company or any parent or subsidiary, and (ii) selected nonemployee agents, consultants, advisers, and independent contractors of the Company or any parent or subsidiary. Our employee equity compensation program, as implemented under the Amended 2020 Stock Plan, will allow us to remain competitive with comparable companies in our industry by giving us the resources to attract and retain talented individuals to achieve our business objectives and build stockholder value. The ability to grant options and other equity-based awards will help us to motivate employees, executive officers, directors, and consultants and encourage them to devote their best efforts to our business and financial success.

Description of the Amended 2020 Stock Plan

Subject to adjustment for various corporate actions such as stock splits or mergers described in more detail below, the shares to be offered under the Amended 2020 Stock Plan will consist of our Common Stock, and the total number of shares of Common Stock that may be issued under the Amended 2020 Stock Plan is 18,400,000, all of which may be issued pursuant to Incentive Stock Options or any other type of award under the Amended 2020 Stock Plan. If an option or other award granted under the Amended 2020 Stock Plan expires, terminates or is cancelled, the unissued shares subject to that option or award shall again be available under the Amended 2020 Stock Plan. If shares awarded pursuant to the Amended 2020 Stock Plan are forfeited to or repurchased at original cost by the Company, the number of shares forfeited or repurchased at original cost shall again be available under the Incentive Plan.

Options and stock awards may be granted at any time after the Effective Date and before termination of the Amended 2020 Stock Plan. The Amended 2020 Stock Plan will continue in effect until the earlier of (i) the date that is ten years after the Effective Date or (ii) such time as all shares available for issuance under the Amended 2020 Stock Plan have been issued and all restrictions on the shares have lapsed. Our Board may suspend or terminate the Amended 2020 Stock Plan at any time except with respect to options and stock awards then outstanding under the Amended 2020 Stock Plan. No options or stock awards may be granted under the Amended 2020 Stock Plan after its termination. Termination does not affect any outstanding options or stock awards, any right of ours to repurchase shares or the forfeitability of shares issued under the Amended 2020 Stock Plan.

The Amended 2020 Stock Plan is administered by our Board or our Compensation Committee to which the Board may delegate any or all authority for the administration of the Amended 2020 Stock Plan. If authority is delegated to our Compensation Committee, all references to the Board in the Amended 2020 Stock Plan and in this description shall mean and relate to the Compensation Committee, except (i) as otherwise provided by the Board; and (ii) that only the Board may amend or terminate the Amended 2020 Stock Plan. The Board or the Compensation Committee shall determine and designate the individuals to whom options or other awards shall be made (“Recipients”), the number of such options or awards, and the other terms and conditions of such options or awards. Subject to the provisions of the Amended 2020 Stock Plan and applicable law, the Board may adopt and amend rules and regulations relating to the administration of the Amended 2020 Stock Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares, and make all other determinations in the judgment of the Board necessary or desirable for the administration of the Amended 2020 Stock Plan. The interpretation and construction of the provisions of the Amended 2020 Stock Plan and related agreements by the Board shall be final and conclusive. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Amended 2020 Stock Plan or in any related agreement in the manner, and to the extent it deems expedient to carry the Amended 2020 Stock Plan into effect, and the Board shall be the sole and final judge of such expediency.

Our Board may, from time to time, take the following actions, separately or in combination, under the Amended 2020 Stock Plan: (i) grant incentive stock options as defined in Section 422 of the Internal Revenue Code, (ii) grant options other than incentive stock options; and (iii) grant stock awards as defined in the Amended 2020 Stock Plan. Awards may be made to employees, executive officers, directors, and other individuals selected by the Board, provided that only our employees or employees of any subsidiary are eligible to receive incentive stock options. The Board will select the individuals to whom awards shall be made and shall specify the action taken with respect to each individual to whom an award is made.

With respect to each option grant, the Board will determine the number of shares subject to the option, the exercise price, the duration of the option, the times at which the option may be exercised and whether the option is an incentive stock option or a non-statutory stock option. The exercise price per share will be determined by the Board at the time of the grant. The exercise price will not be less than 100% of the fair market value of the Common Stock covered by the option at the date the option is granted (110% for holders of 10% or more of our voting power). The fair market value will be the closing price of the Common Stock on the last trading day before the date the option is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the Board in good faith. No Recipient of any option or other award under the Amended 2020 Stock Plan will have any rights as a stockholder with respect to any shares of Common Stock subject to such option or award until the date the Recipient becomes the holder of record of such shares.

The Board may issue shares under the Amended 2020 Stock Plan as stock awards for any form of consideration determined by the Board, including promissory notes and services and including no consideration or such minimum consideration as may be required by law. Stock awards shall be subject to the terms, conditions, and restrictions determined by the Board. The restrictions may include restrictions concerning transferability, repurchase by the Company, and forfeiture of the shares issued, together with any other restrictions determined by the Board. Stock awards subject to restrictions may be either restricted stock awards under which shares are issued immediately upon grant subject to forfeiture if vesting conditions are not satisfied or restricted stock units under which shares are not issued until after vesting conditions are satisfied. The related stock award agreement may contain any terms, conditions, restrictions, representations, and warranties required by the Board. No shares shall be issuable under a restricted stock award or similar stock award after the expiration of ten years from the date such award is granted.

We may require any Recipient of a stock award to pay to us in cash or by check amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the Recipient fails to pay the amount demanded, we may withhold that amount from other amounts payable to the Recipient, including salary, subject to applicable law. With the Board’s consent, a Recipient may satisfy this obligation, in whole or in part, by instructing us to withhold from any shares to be issued or by delivering to us other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the amount necessary to pay tax withholding to each jurisdiction calculated at the maximum tax rate applicable to income earned in that jurisdiction.

If our outstanding Common Stock is increased or decreased or changed into or exchanged for a different number or kind of shares or other securities by reason of any stock split, reverse stock split, combination of shares, dividend payable in shares, recapitalization, reclassification or other distribution of Common Stock to stockholders generally without the receipt of consideration by us, appropriate adjustment will be made by the Board in the number and kind of shares available for grants under the Amended 2020 Stock Plan and in all other share amounts set forth in the Amended 2020 Stock Plan. In addition, the Board will make appropriate adjustments in (i) the number and kind of shares subject to outstanding awards, and (ii) the exercise price per share of outstanding options, so that the Recipient’s proportionate interest before and after the occurrence of the event is maintained. Unless otherwise determined by the Board, in the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which we are a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of our assets, the Board shall, in its sole discretion and to the extent possible under the structure of the transaction and the Amended 2020 Stock Plan, with respect to each outstanding option and stock award under the Amended 2020 Stock Plan, choose how options and awards shall be handled.

The Board may at any time modify or amend the Amended 2020 Stock Plan in any respect; provided, however, that any modification or amendment of the Amended 2020 Stock Plan shall be subject to stockholder approval to the extent required under applicable law or the rules of Nasdaq. No change in an option or other award already granted shall be made without the written consent of the Recipient if the change would adversely affect such Recipient.

U.S. Federal Income Tax Consequences

Stock option grants under the Amended 2020 Stock Plan may be intended to qualify as incentive stock options under Section 422 of the Code or may be non-qualified stock options. Generally, no federal income tax is payable by a participant upon the grant of a stock option and no deduction is taken by the Company. Our practice has been (i) to grant incentive stock options to executive officers and employees up to the $100,000 per year limitation under Section 422 of the Code, with any options in excess of the limited granted as non-qualified stock options, and (ii) to grant non-qualified stock options to directors and consultants. Under current tax laws, if a participant exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the fair market value of the common stock on the exercise date and the stock option exercise price. We will be entitled to a corresponding deduction on our corporate income tax return. A participant will have no taxable income upon exercising an incentive stock option provided that the applicable periods for holding the resulting shares of stock are satisfied (except that alternative minimum tax may apply), and we will receive no deduction when an incentive stock option is exercised. The tax treatment for a participant of a disposition of shares acquired through the exercise of an option depends on how long the shares were held and on whether the shares were acquired by exercising an incentive stock option or a non-qualified stock option. We may be entitled to a deduction in the case of a disposition of shares acquired under an incentive stock option before the applicable holding periods have been satisfied.

For restricted stock awards, no taxes are due when the award is initially made (unless the recipient makes a timely election under Section 83(b) of the Code), but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” ​(i.e., becomes vested or transferable). Income tax is paid at ordinary rates on the value of the stock when the restrictions lapse, and then at capital gain rates when the shares are sold if the value of the stock increases after the vesting date. Similarly, for RSUs, the award generally becomes taxable when the shares vest. Income tax is paid at ordinary rates on the value of the RSUs when the restrictions lapse, and then at capital gain rates when the shares are sold if the value of the stock increases after the vesting date.

The Amended 2020 Stock Plan has been drafted with the intention of avoiding the application of taxes under Section 409A of the Code to any participant on account of the grant, vesting, or settlement of awards.

Equity Compensation Plan Information

The number of shares of our Common Stock that may be issued under existing equity compensation plans as of December 31, 2023 was as follows:

Amendment to the Amended 2020 Stock Plan

Description of the Amendment to the Amended 2020 Stock Plan

The following is a summary of the proposed amendments to the Amended 2020 Stock Plan. The Amended 2020 Stock Plan for stockholder approval is included as Annex B to this Proxy Statement and the description of the amendment to the Amended 2020 Stock Plan herein is qualified entirely by reference to Annex B.

New Plan Benefits

The benefits or amounts that will be received by or allocated to any executive officers or employees under the Amended 2020 Stock Plan are not currently determinable since grants are at the discretion of the Compensation Committee.

SEC Registration

If Proposal No. 6 is approved, we intend to file a registration statement on Form S-8 in mid-2024 to register the additional shares added to the Amended 2020 Stock Plan.

Vote Required and Board Recommendation

The affirmative vote of the holders of a majority of the votes cast is required to approve this proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO OUR AMENDED 2020 STOCK PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER BY 30,000,000 SHARES.

PROPOSAL NO. 7

APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT AT A RATIO NOT LESS THAN 1-FOR-5 AND NOT GREATER THAN 1-FOR-20, WITH THE EXACT RATIO TO BE SET WITHIN THAT RANGE AT THE DISCRETION OF OUR BOARD WITHOUT FURTHER APPROVAL OR AUTHORIZATION OF OUR STOCKHOLDERS 

Overview

The Board believes that it is advisable and in the best interests of the Company and its stockholders, and has unanimously approved, subject to stockholder approval, an amendment to our Certificate of Incorporation (the “Certificate of Amendment”) to effect a reverse stock split at a ratio not less than 1-for-5 and not greater than 1-for-20 (the “Reverse Stock Split”), with final decision of whether to proceed with the Reverse Stock Split, the effective time of the Reverse Stock Split, and the exact ratio of the Reverse Stock Split determined by the Board, in its sole discretion and without further approval or authorization of our stockholders. If the Certificate of Amendment is filed with the Secretary of State of the State of Delaware, the Certificate of Amendment will effect the Reverse Stock Split by reducing the number of issued and outstanding shares of our Common Stock by the ratio to be determined by our Board, but will not increase the par value of our Common Stock.