UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to § 240.14a-11(c) or § 240.14a-2 |
CYCLO THERAPEUTICS, INC. | ||
(Name of Registrant as Specified in Its Charter) |
CYCLO THERAPEUTICS, INC.
(Name of Registrant as Specified in Its Charter)________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table |
NOTICE OF 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held on June 24, 2022[●] 2023
Dear Stockholders of Cyclo Therapeutic, Inc.:
We are pleased to invite you to attend our 2022 Annuala Special Meeting of Stockholders to be held on June 24, 2022,[●] 2023, at 10:00 a.m. Eastern Daylight Time at the offices of Fox Rothschild LLP, located at 777 S. Flagler Drive, Suite 1700 West Tower, West Palm Beach, FL 33401[●] (the “AnnualSpecial Meeting”). The AnnualSpecial Meeting is being held forto approve an amendment to our Articles of Incorporation increasing the following purposes:number of our authorized shares of Common Stock from 20,000,000 shares to 50,000,000 shares.
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Our Board of Directors has fixed the close of business on April 26, 2022[●], 2023 as the record date for the AnnualSpecial Meeting. Only stockholders of record as of April 26, 2022[●], 2023 may vote at the AnnualSpecial Meeting or any postponements or adjournments of the meeting. This notice of annual meeting,Special Meeting, proxy statement, and form of proxy are being made available on or about April 30, 2022.[●], 2023.
Your vote is important. Whether or not you plan to attend the AnnualSpecial Meeting, we would like for your shares to be represented. Please vote as soon as possible via the Internet, telephone, or mail.
Sincerely, | |
N. Scott Fine | |
Chief Executive Officer |
April 30, 2022[●], 2023
Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder Meeting To Be Held on
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PROXY STATEMENT
CYCLO THERAPEUTICS, INC.
2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 24, 2022[●] 2023
TABLE OF CONTENTS
Page | |
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR | 2 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |
OTHER MATTERS |
PROXY STATEMENT
FOR 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held at 10:00 a.m. Eastern Standard Time on June 24, 2022[●] 2023
This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our Board of Directors (the “Board” or “Board of Directors”) for use at the 2022 annual meetinga Special Meeting of stockholders of Cyclo Therapeutics, Inc., a Nevada corporation, and any postponements, adjournments or continuations thereof (the “Annual“Special Meeting”). The AnnualSpecial Meeting will be held on June 24, 2022[●] 2023 at 10:00 a.m. Eastern Daylight Time at the offices of Fox Rothschild LLP, located at 777 S. Flagler Drive, Suite 1700 West Tower, West Palm Beach, FL 33401.[●]. References in this Proxy Statement to “we,” “us,” “our,” the “Company” or “Cyclo Therapeutics” refer to Cyclo Therapeutics, Inc.
The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this Proxy Statement and our Annual Report is first being mailed on or about May 2, 2022[●], 2023 to all stockholders entitled to vote at the AnnualSpecial Meeting.
THE INFORMATION PROVIDED IN THE “QUESTION AND ANSWER” FORMAT BELOW IS FOR YOUR CONVENIENCE ONLY AND IS MERELY A SUMMARY OF THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. YOU SHOULD READ THIS ENTIRE PROXY STATEMENT CAREFULLY.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUALSPECIAL MEETING
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Q: | Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials? |
A: | In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this Proxy Statement, |
Q: | What items will be voted on at the |
A: | Stockholders will vote on the following items at the |
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● | Such other business as may properly come before the Meeting or any adjournments or postponements thereof. |
Q: | How does the Board of Directors recommend I vote on |
A: | The Board of Directors unanimously recommends that the stockholders vote: |
● | FOR the |
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With respect to any other matter that properly comes before the Special Meeting, the proxies will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion. |
Q: | Who may vote at the |
A: | Stockholders of record as of the close of business on |
Q: | What is the voting requirement to approve |
A: | The |
Q: | How many shares must be present or represented to conduct business at the |
A: | At the |
Q: | If I am a stockholder of record, how do I vote? |
A: | If you are a stockholder of record, there are four ways to vote: |
● | At the |
● | Via the Internet. You may vote by proxy via the Internet by following the instructions found on the proxy card. |
● | By Telephone. You may vote by proxy by calling the toll-free number found on the proxy card. |
● | By Mail. You may vote by proxy by filling out the proxy card and returning it in the envelope provided. If you vote by mail, your proxy card must be received by |
Please note that the Internet and telephone voting facilities will close at 11:59 p.m. Eastern Time | |
Q: | If I am a beneficial owner of shares held in street name, how do I vote? |
A: | If you are a beneficial owner of shares held in street name, you should have received from your broker, bank, trustee or other nominee instructions on how to vote or instruct the broker to vote your shares, which are generally contained in a “vote instruction form” sent by the broker, bank, trustee or other nominee. Please follow their instructions carefully. Street name stockholders generally may vote by one of the following methods: |
● | At the |
● | Via the Internet. You may vote by proxy via the Internet by following the instruction form provided to you by your broker, bank, trustee, or other nominee. |
● | By Telephone. You may vote by proxy by calling the toll-free number found on the vote instruction form provided to you by your broker, bank, trustee, or other nominee. |
● | By Mail. You may vote by proxy by filling out the vote instruction form and returning it in the envelope provided to you by your broker, bank, trustee, or other nominee. |
Q: | What is the difference between a stockholder of record and a beneficial owner of shares held in street name? |
A: | Stockholder of Record. If your shares are registered directly in your name with our transfer agent, vStock Transfer, LLC, you are considered the stockholder of record with respect to those shares, and the Notice or these proxy materials were sent directly to you by us. |
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and the Notice or these proxy materials were forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the |
Q: | How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions? |
A: | Brokerage firms and other intermediaries holding shares of our Common Stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will |
Q: | Can I change my vote or revoke my proxy? |
A: | You may change your vote or revoke your proxy at any time prior to the taking of the vote at the |
If you are the stockholder of record, you may change your vote by (1) granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (and until the applicable deadline for each method), (2) providing a written notice of revocation to our Corporate Secretary at Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, FL 32653 prior to your shares being voted, or (3) attending the |
For shares you hold beneficially in street name, you generally may change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee following the instructions they provided, or, if you have obtained a legal proxy from your broker, bank, trustee, or nominee giving you the right to vote your shares, by attending the |
Q: | If I submit a proxy, how will it be voted? |
A: | When proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted at the |
Q: | How are proxies solicited for the |
A: | Our Board of Directors is soliciting proxies for use at the |
Q: | What should I do if I get more than one proxy or voting instruction card? |
A: | Stockholders may receive more than one set of voting materials, including multiple copies of the proxy materials and multiple Notices, proxy cards, or voting instruction cards. For example, stockholders who hold shares in more than one brokerage account may receive separate sets of proxy materials for each brokerage account in which shares are held. Stockholders of record whose shares are registered in more than one name will receive more than one set of proxy materials or one Notice. You should vote in accordance with all of the proxy cards and voting instruction cards you receive relating to our |
Q: | I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials? |
A: | The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process is commonly referred to as “householding.” |
A single set of proxy materials may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you notify your broker or us that you no longer wish to participate in householding. |
If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, you may (1) notify your broker, or (2) direct your written request to: Corporate Secretary, Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, FL 32653. Stockholders who receive multiple copies of the proxy statement or annual report at their address and would like to request householding of their communications should contact their broker. In addition, we will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the Annual Report and Proxy Statement to a stockholder at a shared address to which a single copy of the documents was delivered. |
Q: | Where can I find the voting results of the |
A: | We will announce preliminary voting results at the |
Q: | What is the deadline to propose actions for consideration at next year’s Annual Meeting of Stockholders or to nominate individuals to serve as directors? |
A: | Stockholder Proposals: Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at our next |
Proposals should be addressed to: | Cyclo Therapeutics, Inc. Attn: Corporate Secretary 6714 NW 16th Street, Suite B, |
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCETHE PROPOSAL:
APPROVAL OF AN AMENDMENT TO OUR ARTICLES OF INCORPORATION INCREASING THE NUMBER OF OUR AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 SHARES TO 50,000,000 SHARES.
Executive Officers and DirectorsOverview
The following table sets forth the names, ages and positions of our executive officers, directors, and director nominees (ages as of April 15, 2022):
Name | Age | Positions and Offices | Year First Became | ||||||
N. Scott Fine | 65 | Director, Chief Executive Officer | 2014 | ||||||
Jeffrey L. Tate, Ph.D. | 64 | Director, Chief Operating Officer | 2010 | ||||||
C.E. Rick Strattan (2) | 76 | Director | 1990 | ||||||
Markus W. Sieger (1) (3) | 56 | Director and Chairman of the Board of Directors | 2014 | ||||||
F. Patrick Ostronic (1) | 66 | Director and Vice Chairman of the Board of Directors | 2014 | ||||||
William S. Shanahan (2) (3) | 82 | Director | 2016 | ||||||
Dr. Randall M. Toig (1) | 71 | Director | 2018 | ||||||
Joshua M. Fine | 40 | Chief Financial Officer and Secretary | N/A | ||||||
Dr. Lise Kjems | 58 | Chief Medical Officer | N/A | ||||||
Michael Lisjak | 48 | Chief Regulatory Officer and SVP for Business Development | N/A |
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Biographies of Directors and Officers
N. Scott Fine has been a Director of the Company since February 2014, and became our Chief Executive Officer on September 14, 2015. From 2004 until 2014, he was a principal at Scarsdale Equities, an investment banking firm located in New York City.
Mr. Fine has been involved in investment banking for over 35 years, working on a multitude of debt and equity financings, buy and sell side M&A, strategic advisory work, and corporate restructurings. Much of his time has been focused on transactions in the healthcare and consumer products area. He has led global transactions in healthcare, including medical devices, generic pharmaceuticals, and genetics. Additionally, he worked with The Tempo Group of Jakarta, Indonesia when Mr. Fine and his family resided in Jakarta
Mr. Fine was Chairman of the Board of The Global Virus Network (GVN), and he also was the lead investment banker on the initial public offering of Green Mountain Coffee Roasters, Inc. and Central European Distribution Corporation (“CEDC”), a multi-billion-dollar alcohol company. Mr. Fine continued his involvement with CEDC serving as a director from 1996 until 2014, during which time he led the CEDC Board in its successful efforts in 2013 to restructure the company through a pre-packaged Chapter 11 process whereby CEDC was acquired by the Russian Standard alcohol group. Recently, Mr. Fine served as Vice Chairman and Chairman of the Restructuring Committee of Pacific Drilling from 2017 to 2018 where he successfully led the independent directors to a successful reorganization. He also served as sole director of Better Place Inc. from 2013 until 2015. In his role there, Mr. Fine successfully managed the global wind down of the company in a timely and efficient manner which was approved by both the Delaware and Israeli Courts.
Mr. Fine currently serves on the board of directors of Kenon Holdings Ltd. (NYSE: KEN). Mr. Fine also devotes time to several non-profit organizations, including through his service on the Board of Trustees for the IWM American Air Museum in Britain. Mr. Fine has been a guest lecturer at Ohio State University’s Moritz School of Law and Fordham University Law School.
Mr. Fine’s relationships within the financial community in New York and around the world, as well as his significant experience with equity and debt financing, make him a valuable contributor as a Director. Mr. Fine was appointed to theCompany’s Board of Directors in connection withhas unanimously approved a private placementproposal to amend our Articles of Incorporation to increase the authorized shares of Common Stock by the Company in February 2014, and has the right to be nominated to our Board (or to have a representative nominated to our Board) for up to seven years from the date of that offering. Mr. Fine is the father of Joshua M. Fine, our Chief Financial Officer.
Dr. Jeffrey L. Tate has served as a Director of the Company since August 2010 and since September 14, 2015 has served as our Chief Operating Officer. Prior to Mr. Fine’s appointment as Chief Executive Officer, Dr. Tate served as our President (from August 2010) and Chief Executive Officer (from July 2014). From January 2007 to February 2010, he was president of J-Jireh Products, Incorporated, a company that develops and markets industrial, food, cosmetic and nutritional products manufactured using pulse drying technology. From January 1995 to December 2006, Dr. Tate served as a principal of J. Benson Tate Consultants LLC, a management consulting company. From July 1999 to January 2005, Dr. Tate served as Vice President of Scientific and Regulatory Affairs of Natural Biologics, LLC, a pharmaceutical company. Dr. Tate received his B.Sc. from the University of Minnesota Department of Botany and his M.Sc. and Ph.D. from the University of Minnesota Graduate School in Management of Technology and Plant Physiology, respectively.
Dr. Tate was selected to serve as a member of our Board of Directors because of his position with Cyclo Therapeutics, Inc. and his experience with biopharmaceutical development, manufacturing and regulatory compliance.
C.E. Rick Strattan has served as Director of the Company since 1990. Mr. Strattan served as Chairman and CEO from 1990 until his retirement in 2014, and as treasurer of the Company from August 199020,000,000 shares to May 1995. From November 1987 through July 1989, Mr. Strattan was with Pharmatec, Inc., where he served as Director of Marketing50,000,000 shares, subject to stockholder approval. The Board has declared this amendment to be advisable and Business Developmentrecommended that this proposal be presented to the Company’s stockholders for cyclodextrins. Mr. Strattan was responsible for cyclodextrin sales and related business development efforts. From November, 1985 through May, 1987, Mr. Strattan served as Chief Technical Officer for Boots-Celltech Diagnostics, Inc. He also served as Product Sales Manager for American Bio-Science Laboratories, a Division of American Hospital Supply Corporation. Mr. Strattan is a graduateapproval. The text of the Universityform of Florida receiving a B.S. degree in chemistry and mathematics, and has also received an MS degree in pharmacology, and an MBA degree in Marketing/Computer Information Sciences, fromproposed amendment to the same institution. Mr. Strattan has written and published numerous articles and a book chapter onCompany’s Articles of Incorporation to increase the subjectauthorized shares of cyclodextrins.
Mr. Strattan was selected to serve as a member of our Board of Directors because of his extensive experience with cyclodextrins, his years of executive level experience, and his advanced degrees in pharmacology.
Markus W. Sieger has been a DirectorCommon Stock of the Company since February 2014 and servesto 50,000,000 shares is attached to this proxy statement as Exhibit A.
If the ChairmanCompany’s stockholders approve this Proposal, the Company expects to promptly file articles of amendment to the Company’s Articles of Incorporation with the Secretary of State of the Company’s BoardState of Directors. Mr. Sieger is an alumniNevada to increase the number of Stanford Graduate Schoolauthorized shares of Business and holds a degree in Economics from the University of Applied Sciences for Business and Administration Zurich. He is a seasoned entrepreneur and senior executive with a multi-industry experience in emerging industries like healthcare, information technology, digital media and fast-moving consumer goods in the United States, Switzerland, Poland and other countries in Central and Eastern Europe. He held management roles in companies such as Zurich Insurance Group (Switzerland), TVN (Poland) and several others. He was and is a member of the boards of directors of various public and private companies in the United States and Europe. Since June 2016 Mr. Sieger has been CEO of Polpharma Group (Netherlands), one of the leading healthcare companies in the CEE/CIS region. Mr. Sieger is vice-president of the Executive Board of Medicines for Europe, representing the generics industry to the European Union. In this function Mr. Sieger focuses on digitalization and preventive aspects of healthcare.Common Stock.
Mr. Sieger’s extensive experienceReasons for the Increase in strategic, operational and investment roles inAuthorized Shares
As of January [●], 2023, the healthcare and other industries make him a valuable memberrecord date for the special meeting, the Company had an aggregate of our Board of Directors. Mr. Sieger was appointed to the Board of Directors in connection with a private placement[9,411,848] shares of Common Stock byoutstanding, and outstanding options and warrants to purchase an aggregate of approximately [9,541,783] additional shares of Common Stock. Accordingly, at present, the Company in February 2014.
F. Patrick Ostronichas been a director since April 2014. Mr. Ostronic has been an officeronly [1,046,369] authorized shares of US Pharmacia International, Inc., a subsidiary of the USP Group (where he also acts as Chief Financial Officer), since November 2006. Mr. Ostronic is also a director of Novit US, Inc., the general partner of Novit LP. Mr. Ostronic holds a B.A. in Economics and Accounting from The College of the Holy Cross, an M.S. in Accounting from Old Dominion University, and a J.D. from the University of Maryland School of Law, and was previously licensed as a Certified Public Accountant.
Mr. Ostronic’s extensive experience in finance and the pharmaceutical industry make him a valuable member of the Board of Directors. Mr. Ostronic was appointedits Common Stock available for issuance, before giving effect to the Board in connection with a private placement2,480,042 shares of Common Stock by the Company in April 2014.
William S. Shanahan has been a director since June 2016. Mr. Shanahan is currently retired and served as the President of Colgate-Palmolive Company from 1992 until to September 30, 2005. More recently he was a Management Advisorreserved for ValueAct Capital LLC of San Francisco. Mr. Shanahan holds a B.A. from Dartmouth University.
Mr. Shanahan’s vast experience will greatly benefit the Company as it seeks to execute its global growth plan, and makes him a valuable member of the Board of Directors.
Dr. Randall M. Toig has been a director since March 2018. Until his recent retirement from private practice, Dr. Toig was a practicing physician for more than 35 years in obstetrics, gynecology and gynecological surgery at Gold Coast Gynecology, of which he was the Chief Executive Officer. Dr. Toig is currently an associate professor of clinical obstetrics and gynecology at Northwestern University, Northwestern Memorial Hospital and Northwestern Medical School Prentice Women’s Hospital. He previously served at Northwestern Memorial Hospital practicing, teaching and serving on active staff. Dr. Toig holds a B.S. from University of Michigan and received his M.D. from the University of Pittsburgh.
Dr. Toig’s medical experience makes him a valuable member of the Board of Directors.
Joshua M. Fine was appointed our Chief Financial Officer on June 11, 2019, and has been our Secretary since 2014. From 2011 until his appointment as our Chief Financial Officer, he served as the Vice President/Director, Healthcare Capital Markets, of Scarsdale Equities. Mr. Fine was also the Senior Vice President of Finance and Operations for Icagen, Inc., a biotechnology company, from 2017 until it was wound down in November 2020 after the successful sale of its assets. While at Icagen, Mr. Fine worked closely with the CEO to successfully negotiate and execute licensing deals with Roche, Sanofi, and the Cystic Fibrosis Foundation, and was part of the management team that completed the strategic sale of Icagen’s assets to Ligand in April of 2020. Mr. Fine holds a Bachelor of Arts in Political Science from Hartwick College. Mr. Fine is the son of N. Scott Fine, our Chief Executive Officer.
Dr. Lise Kjems was appointed our Chief Medical Officer on September 27, 2021. From October 2019 until joining us, Dr. Kjems served as the Vice President, Head of Clinical Development at Albireo Pharma, Inc., where she was responsible for leading end-to-end drug development process for rare hepatic cholestatic diseases and other hepatic diseases, culminating with the recent FDA and EMA approvals of Bylvay™ (odevixibat) for Progressive Familial Intrahepatic Cholestasis. Prior to that, she served as the Vice President, Clinical Development at Aldeyra Therapeutics, from February 2018 until October 2019, and Executive Medical Director at Intarcia Therapeutics, from April 2014 until February 2018. From 2005 – 2014 she served in a number of roles at Novartis, including Global Program Medical Director/Medical Brand Director, where she was accountable for the global clinical strategy and led clinical teams. Additionally, she served as Senior Global Program Diagnostic Executive Director, Molecular Diagnostics and Executive Director, Deputy Head of Translational Medicine, Diabetes/Metabolism during her tenure at Novartis. Career appointments also include Executive Director, Project Team Leader – 113715, PTP-1B Antisense Inhibitor and the ApoB 100 inhibitor Programs at Ionis Pharmaceuticals (formerly Isis Pharmaceuticals); Group Director, Clinical Drug Evaluation at Johnson & Johnson; and Senior Clinical Pharmacologist, Clinical Research at Eli Lilly. Dr. Kjems holds a Doctor of Medicine, Physiology and Endocrinology, from the University of Copenhagen.
Michael Lisjak joined us as our Global Head of Regulatory Affairs and Senior Vice President for Business Development in July 2019, and was appointed our Chief Regulatory Officer in September 2020. He has more than 20 years of regulatory strategy and operations experience within the biopharmaceutical and consulting industries for multiple therapeutic areas, including cardiovascular, metabolic, neuroscience and pain and inflammation. Prior to joining the Company, Mr. Lisjak was the Director of Global Regulatory Affairs at Sanofi from July 2015 to June 2016, leading the Endocrinology and Neuromuscular Rare Disease Area, and then served as Sanofi’s Head of Global Regulatory Affairs for Established Products and Global Health until July 2019. Prior to Sanofi, Mr. Lisjak served as the Global Regulatory Services Lead for Accenture’s Life Sciences group accountable for the growth and strategic oversight for Accenture’s global regulatory offerings, capabilities and go-to-market strategy. Before Accenture, he held multiple leadership roles at Pfizer and Wyeth with responsibility for developing, maintaining and directing global regulatory strategies and resources in the provision of regulatory guidance and filings ensuring optimal regulatory interactions with global/regional Health Authorities. Mr. Lisjak holds a B.A. in Biology from Rochester Institute of Technology.
Each executive officer serves at the discretion of our Board of Directors and holds office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. Except as set forth above, there are no family relationships among any of our directors or executive officers.
Director Independence
Our Board of Directors currently consists of seven directors, five of whom are “independent” as definedissuance under the rulesCompany’s 2021 Equity Incentive Plan, and no shares of Common Stock available for issuance after giving effect to the Nasdaq Capital Market because they are not employees or executive officersshares of Common Stock reserved for issuance under the Company, and have not been paid more than $120,000 of compensation by the Company in any consecutive 12-month period during the past three years. N. Scott Fine, our Chief Executive Officer, and Dr. Jeffrey L. Tate, our Chief Operating Officer, are not independent directors due to their employment by us as executive officers.
Board Leadership Structure and Role in Risk Oversight
Our Board of Directors focuses on the most significant risks facing us and our general risk management strategy, and also ensuring that risks undertaken by us are consistent with the Board’s appetite for risk. While the Board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing us and that our Board leadership structure supports this approach.
We separate the roles of Chief Executive Officer and Chairman of the Board because we believe that our corporate governance is most effective when these positions are not held by the same person. The Board recognizes the differences between the two roles and believes that separating them allows each person to focus on his individual responsibilities. Under this leadership structure, our Chief Executive Officer can focus his attention on managing the day-to-day company operations, while our Chairman can focus his attention on Board responsibilities.2021 Equity Incentive Plan.
Although at present the BoardCompany has not adopted a formal policy regarding the separationno commitments or agreements to issue additional shares of the roles of the Chairman and the Chief Executive Officer, we believe that having separate positions is the appropriate leadership structureCommon Stock, it desires to have additional shares available to provide additional flexibility to use its capital stock for us at this time. Depending on the circumstances, other leadership models, such as combining the role of Chairman with the role of Chief Executive Officer, might be appropriate. Accordingly, our Board of Directors intends to periodically review our leadership structure.
Board Committees
Our Board of Directors currently has an audit committee, a compensation committee, and a corporate governance and nominating committee. The composition and responsibilities of each of the committees of our Board of Directors are described below. Members serve on these committees until their resignation or until otherwise determined by our Board of Directors.
Audit Committee. Our audit committee is comprised of Patrick Ostronic, Markus Sieger and Dr. Randall Toig. Patrick Ostronic serves as the chairman of our audit committee. Our Board has determined that each member of our audit committee meets the requirements for independencebusiness and financial literacypurposes in the future, as well as for issuance under the applicable rules and regulations of the SEC and the listing standards of the Nasdaq. Our Board has also determined that Patrick Ostronic is an “audit committee financial expert” as defined in the rules of the SEC and has the requisite financial sophistication as defined under the listing standards of the Nasdaq. The responsibilities of our audit committeeCompany’s 2021 Equity Incentive Plan. These purposes may include, among other things: others:
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Our audit committee operates under a written charter which satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq, and is available on our website at www.cyclotherapeutics.com.
Compensation Committee. Our compensation committee is comprised of Markus Sieger and William Shanahan. Mr. Sieger serves as the chairman of our compensation committee. Our Board has determined that each member of our compensation committee meets the requirements for independence under the applicable rules and regulations of the SEC and listing standards of Nasdaq. Each member of the compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The purpose of our compensation committee is to oversee our compensation policies, plans and benefit programs and to discharge the responsibilities of our Board relating to compensation of our executive officers. The responsibilities of our compensation committee include, among other things:
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Our compensation committee operates under a written charter which satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq, and is available on our website at www.cyclotherapeutics.com.
Corporate Governance and Nominating Committee. Our corporate governance and nominating committee is comprised of William Shanahan and C.E. Rick Strattan. William Shanahan serves as chairman of our corporate governance and nominating committee. Our Board has determined that all members of our corporate governance and nominating committee meet the requirements for independence under the applicable rules and regulations of the SEC and listing standards of Nasdaq. The responsibilities of our corporate governance and nominating committee include, among other things:
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Our corporate governance and nominating committee operates under a written charter which satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq, and is available on our website at www.cyclotherapeutics.com.
Board Meetings and Director Communications
In 2021, the Board of Directors held four meetings and each director attended at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors held during the period for which he has been a director and (ii) the total number of meetings held by all committees of the Board of Directors on which he served during the periods that he or she served. Although, we have no formal policy regarding director attendance at annual meetings, we encourage all directors to attend.
Stockholders and other interested parties may communicate with the non-management members of the Board of Directors by mail sent to the Company’s Corporate Secretary, addressed to the intended recipient and care of the Corporate Secretary. The Corporate Secretary will review all incoming stockholder communications (except for mass mailings, job inquiries, business solicitations and patently offensive or otherwise inappropriate material) and route such communications as appropriate to member(s) of the Board of Directors. For a more detailed description of stockholder communications, see “Communications with Our Board of Directors.”
Considerations in Evaluating Director Nominees
Our corporate governance and nominating committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our corporate governance and nominating committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors. Some of the qualifications that our corporate governance and nominating committee considers include, without limitation: issues of character, integrity, and judgment; independence; diversity, including diversity of experience; experience in corporate management, operations, finance, business development, and mergers and acquisitions; experience relevant to the Company’s industry; experience as a board member or executive officer of another publicly held company; length of service; and any other relevant qualifications, attributes, or skills. Nominees also must have the ability to offer advice and guidance to our Chief Executive Officer based on past experience. Director candidates must have sufficient time available in the judgment of our corporate governance and nominating committee to perform all Board of Directors responsibilities and responsibilities of those committees on which they serve.
Members of our Board of Directors are expected to prepare for, attend, and participate in all Board of Directors and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our corporate governance and nominating committee may also consider such other factors as it may deem, from time to time, are in the best interests of the Company and its stockholders.
The policy of our corporate governance and nominating committee is to consider properly submitted stockholder recommendations for candidates for membership on the Board. In evaluating such recommendations, the corporate governance and nominating committee will address the membership criteria set forth above.
Although our Board of Directors does not maintain a specific policy with respect to board diversity, our Board of Directors believes that it should be a diverse body, and our corporate governance and nominating committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our corporate governance and nominating committee may take into account the benefits of diverse viewpoints. Our corporate governance and nominating committee also considers these and other factors as it oversees the annual Board of Directors and committee evaluations. After completing its review and evaluation of director candidates, our corporate governance and nominating committee recommends to our full Board of Directors the director nominees for selection.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and agents and representatives, including consultants. A copy of the code of ethics and conduct will be available on our website at www.cyclotherapeutics.com.
EXECUTIVE COMPENSATION
The following table contains information concerning the compensation paid during our fiscal years ended December 31, 2021 and 2020 to (i) the person who served as our Chief Executive Officer during 2021, and (ii) our two most highly compensated executive officers as of December 31, 2021 other than our Chief Executive Officer (collectively, our “Named Executive Officers”).
SUMMARY COMPENSATION TABLE
Name & Principal Position | Year | Salary ($) | Stock Awards ($) (1) | Option Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||
N. Scott Fine | 2021 | 508,333 | 50,300 | 323,308 | 198,714 | 1,080,655 | ||||||||||||||||
CEO | 2020 | 400,000 | -0- | -0- | 89,200 | 489,200 | ||||||||||||||||
Michael Lisjak | 2021 | 316,333 | 50,300 | 134,288 | 130,103 | 631,024 | ||||||||||||||||
Chief Regulatory Officer | 2020 | 258,000 | -0- | -0- | 41,447 | 299,447 | ||||||||||||||||
Sharon H. Hrynkow, Ph.D. (4) | 2021 | 306,333 | 50,300 | 134,288 | 109,165 | 600,086 | ||||||||||||||||
Chief Scientific Officer | 2020 | 248,000 | -0- | -0- | 49,855 | 297,855 |
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Outstanding Equity Awards at Fiscal Year End
As of December 31, 2021, our Named Executive Officers had outstanding unexercised options as set forth below. Our named Executive Officers did not have any unvested stock awards outstanding at December 31, 2021.
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option Exercise Price | Option | |||||||||
N. Scott Fine (1) | 4,775 | 52,525 | 7.46 | August 27, 2031 | |||||||||
Michael Lisjak (1) | 1,983 | 21,817 | 7.46 | August 27, 2031 | |||||||||
Sharon H. Hrynkow, Ph.D. | 1,983 | 21,817 | 7.46 | August 27, 2031 |
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Employment Agreements
On February 28, 2022, we entered into employment agreements with each of Mr. Fine and Mr. Lisjak. Dr. Hrynkow resigned effective March 31, 2022, and is not a party to an employment agreement with us. The employment agreements with our Named Executive Officer include the following material terms:
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Compensation of Directors
The following table shows certain information with respect to the compensation of all of our non-employee directors during our year ended December 31, 2021.
Name | Fees Earned or Paid in Cash | Option Awards (1) | All other compensation | Total | ||||||||||||
C.E. Rick Strattan | 14,667 | 35,408 | -0- | 50,075 | ||||||||||||
Markus W. Sieger | 14,750 | 35,408 | 14,750 | 64,908 | ||||||||||||
F. Patrick Ostronic | -0- | 35,408 | 18,333 | 53,741 | ||||||||||||
William S. Shanahan | 17,833 | 35,408 | -0- | 53,241 | ||||||||||||
Dr. Randall M. Toig | 7,917 | 35,408 | 7,917 | 51,241 |
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Our BoardThe terms of Directors has approved a compensation program for non-employee directors under which each such director is entitled to receive (i) an initial option to purchase 6,700additional shares of Common Stock (ii) an annual optionwill be identical to those of the currently outstanding shares of the Company’s Common Stock. However, because holders of the Company’s Common Stock have no preemptive rights to purchase 3,350or subscribe for any unissued stock of the Company, the issuance of any additional shares of Common Stock and (iii) andauthorized as a result of the following annual cash compensation:increase in the number of authorized shares of Common Stock will reduce the current stockholders’ percentage of ownership interest in the total outstanding shares of Common Stock.
Member | Chair | |||||||
Board of Directors | $ | 40,000 | $ | 70,000 | ||||
Audit Committee | $ | 7,500 | $ | 15,000 | ||||
Compensation Committee | $ | 5,500 | $ | 11,000 | ||||
Nominating and Governance Committee | $ | 4,000 | $ | 8,000 |
Equity Compensation PlanEffects of Informationthe Increase in Authorized Shares
The following table summarizesproposed increase in the number of outstanding options and rights granted to our employees, consultants and directors, as well as theauthorized number of shares of Common Stock remaining available for future issuance, under our equity compensation plans ascould have a number of December 31, 2021:
Plan Category | Number of Securities to be issued upon exercise of outstanding options, warrants and rights (a) (#) | Weighted average exercise price outstanding options, warrants and rights (b) ($) | Number of securities reflected in column (a)) (c) (#) | |||||||||
Equity compensation plans not approved by security holders (1) | 23,457 | $ | 32.00 | 0 | ||||||||
Equity compensation plans approved by security holders (2) | 222,700 | 7.45 | 2,760,247 | |||||||||
Total: | 246,157 | 2,760,247 |
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Delinquent Section 16(a) Reports
We are required to identify each person who was an officer, director or beneficial owner of more than 10% of our registered equity securities during our most recent fiscal year and who failed to fileeffects on a timely basis reports required by Section 16(a)the stockholders of the Securities Exchange ActCompany depending upon the exact nature and circumstances of 1934. Based solely uponany actual issuances of authorized but unissued shares. The increase could have an anti-takeover effect, in that additional shares could be issued (within the limits imposed by applicable law) in one or more transactions that could make a reviewchange in control or takeover of Forms 3 and 4 and amendments thereto filedthe Company more difficult. For example, additional shares could be issued by the Company so as to dilute the stock ownership or voting rights of persons seeking to obtain control of the Company. Similarly, the issuance of additional shares to certain persons allied with the SEC duringCompany’s management could have the year ended December 31, 2021, no person who, at any time duringeffect of making it more difficult to remove the year ended December 31, 2021 was a director, officerCompany’s management by diluting the stock ownership or beneficial ownervoting rights of more than 10 percent of our Common Stock, failedpersons seeking to timely file the reports required by Section 16(a) of the Exchange Act during the year ended December 31, 2021, except for one transaction filed on a Form 4 two days late by C.E. Rick Strattan, and a stock grant transaction filed 10 days late on a Form 4 by each of N. Scott Fine, Joshua Fine, Jeffrey Tate, Sharon Hrynkow and Michael Lisjak.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Since October 2016, we have paid a monthly fee of $5,000 to a non-profit organization of which C.E. Rick Strattan is the Executive Director, in consideration of consulting services provided to us by Mr. Strattan. Mr. Strattan is our founder, former Chief Executive Officer and one of our directors.
In June 2019, we engaged Joshua M. Fine, the son of our Chief Executive Officer, to serve as our Chief Financial Officer. Mr. Fine currently receives an annual salary of $335,780. In addition, he was awarded a cash bonus of $75,000 and $15,000 in 2021 and 2020, respectively. Also in 2021, Joshua Fine was awarded stock options with a value of $184,588 that vests over four years.
Rebecca A. Fine, the daughter of our Chief Executive Officer, provides executive assistant services. In 2021, Ms. Fine received a salary of $90,000 and a cash bonus of $15,000. In 2021 Ms. Fine was also awarded stock options with a value of $5,030 that vests over four years. In 2020, Ms. Fine received a salary of $72,933 and a cash bonus of $6,250.
Kevin J. Strattan, the son of C.E. Rick Strattan, has been employed by us since 2008, and since 2014 has been our Vice President, Finance – Compensation. His annual salary was $149,800 and $107,200 in 2021 and 2020, respectively. In addition, he received cash bonuses of $30,000 and $12,250 in 2021 and 2020, respectively. In 2021 Mr. Strattan was also awarded stock options with a value of $82,535 that vests over four years.cause such removal.
Corey E. Strattan,The proposed amendment to Company’s Articles of Incorporation to increase the daughter-in-lawnumber of C.E. Rick Strattan, has been employed by us since 2011 as a documentation specialist and logistics coordinator, at an annual salaryauthorized shares of $90,000 in 2021. In addition, she received a cash bonusCommon Stock from 20,000,000 shares to 50,000,000 shares will be effective upon the filing of $15,000 in 2021. In 2021 Ms. Strattan was also awarded stock optionsthe articles of amendment with a valuethe Secretary of $5,030 that vests over four years. In 2020, Ms. Strattan received an annual salaryState of $78,000 and a cash bonusthe State of $7,896.Nevada. The Company expects to file such proposed amendment promptly following approval of this Proposal.
Related-Person Transactions Policy And ProceduresRequired Vote
We haveThe affirmative vote of at least a written Related-Person Transactions Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration and approval or ratification of “related-persons transactions.” For purposesmajority of our policy only, a “related-person transaction”outstanding shares of Common Stock is a transaction, arrangement or relationship (or any seriesrequired to approve this proposed amendment to our Articles of similar transactions, arrangements or relationships) in which the Company and any “related person” are participants involving an amount that exceeds $25,000. Transactions involving compensation for services provided to the Company as an employee, director, consultant or similar capacity by a related person are not covered by this policy. A related person is any executive officer, director, or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by such persons.Incorporation.
UnderThe Board of Directors unanimously recommends that stockholders vote “FOR” the policy, where a transaction has been identified as a related-person transaction, management must present information regardingamendment of our Articles of Incorporation increasing the proposed related-person transactionnumber of our authorized shares of Common Stock from 20,000,000 shares to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the Board) for consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to the Company of the transaction and whether any alternative transactions were available. To identify related-person transactions in advance, the Company relies on information supplied by its executive officers and directors. In considering related-person transactions, the Committee takes into account the relevant available facts and circumstances including, but not limited to (a) the risks, costs and benefits to the Company, (b) the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products, and (e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. In the event a director has an interest in the proposed transaction, the director must recuse himself or herself form the deliberations and approval. The policy requires that, in determining whether to approve, ratify or reject a related-person transaction, the Committee look at, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of the Company and its stockholders, as the Committee determines in the good faith exercise of its discretion50,000,000 shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our Common Stock as of April 15, 2022,January 20, 2023, based on 8,415,1969,411,848 shares of Common Stock outstanding as of such date, by:
● | each person, or group of affiliated persons, who we know to beneficially own more than 5% of our Common Stock; |
● | each of our named executive officers; |
● | each of our directors and director nominees; and |
● | all of our executive officers and directors as a group. |
Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our Common Stock. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of our Common Stock issuable pursuant to the exercise of warrants. These shares are deemed to be outstanding and beneficially owned by the person holding those warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
Names and Address of Individual or Identity of Group(1) | Number of Shares Beneficially Owned | Beneficial | Number of Shares Beneficially Owned | Beneficial | |||||||||||||
Named Executive Officers and Directors | |||||||||||||||||
N. Scott Fine | 206,190 | (2) | 2.44 | % | 229,786 | (2) | 2.4 | % | |||||||||
C.E. Rick Strattan | 212,784 | (3) | 2.53 | % | 212,784 | (3) | 2.2 | % | |||||||||
Jeffrey L. Tate | 40,819 | (4) | * | 55,624 | (4) | * | |||||||||||
Markus Sieger | 137,753 | (5) | 1.63 | % | 157,234 | (5) | 1.7 | % | |||||||||
F. Patrick Ostronic | 147,175 | (6) | 1.75 | % | 181,389 | (6) | 1.9 | % | |||||||||
William S. Shanahan | 117,773 | (7) | 1.39 | % | 117,773 | (7) | 1.2 | % | |||||||||
Dr. Randall M. Toig | 66,043 | (8) | * | 76,500 | (8) | * | |||||||||||
Dr. Sharon Hrynkow | 26,621 | (9) | * | ||||||||||||||
Dr. Lise Kjems | 36,738 | (9) | * | ||||||||||||||
Michael Lisjak | 18,809 | (10) | * | 28,614 | (10) | * | |||||||||||
All Directors and Executive Officers as a Group (11 Persons) | 1,041,997 | (11) | 11.99 | % | |||||||||||||
All Directors and Executive Officers as a Group (10 Persons) | 1,041,997 | (11) | 11.8 | % | |||||||||||||
5% Holders | |||||||||||||||||
N/A | |||||||||||||||||
Armistice Capital Master Fund, Ltd (12) | 975,804 | 9.9 | % |
* Less than one percent. |
(1) | Unless otherwise indicated, the business address of each officer and director of the Company is c/o Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, Florida 32653. |
(2) | Includes currently exercisable warrants to purchase 45,765 shares of Common Stock, and currently exercisable options to purchase |
(3) | Based solely on a Schedule 13D/A filed by Mr. Strattan with the SEC on October 20, 2015, and Form 4s filed by Mr. Strattan subsequent to such date. Includes currently exercisable warrants to purchase 400 shares of Common Stock, currently exercisable options to purchase 6,700 shares of Common Stock, and 6,307 shares of Common Stock owned by TFBU, Inc. (“TFBU”), a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code. Mr. Strattan has sole voting and dispositive power with respect to the shares of Common Stock issued in the name of TFBU. |
(4) | Includes currently exercisable warrants to purchase 7,250 shares of Common Stock, and currently exercisable options to purchase |
(5) | Includes currently exercisable warrants to purchase 49,364 shares of Common Stock, and currently exercisable options to purchase 6,700 shares of Common Stock. |
(6) | Includes currently exercisable warrants to purchase 12,199 shares of Common Stock, and currently exercisable options to purchase 6,700 shares of Common Stock. |
(7) | Includes currently exercisable warrants to purchase 47,396 shares of Common Stock, and currently exercisable options to purchase 6,700 shares of Common Stock. |
(8) | Includes currently exercisable warrants to purchase 13,078 shares of Common Stock, and currently exercisable options to purchase 6,700 shares of Common Stock. |
(9) | Includes currently exercisable |
(10) | Includes currently exercisable options to purchase |
(11) | Includes |
COMMUNICATIONS WITH OUR BOARD OF DIRECTORS
Interested parties who wish to communicate with our Board of Directors or any specified individual director, including our non-employee directors, may send their communications in writing to the Corporate Secretary at Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, FL 32653, Attn: Corporate Secretary. The Corporate Secretary shall review all incoming communications (except for mass mailings, job inquiries, business solicitations and patently offensive or otherwise inappropriate material) and, if appropriate, route such communications to the appropriate member(s) of the Board of Directors or, if none is specified, to the Chair of the Board.
The Corporate Secretary may decide in the exercise of his or her judgment whether a response to any communication is necessary and shall provide a report to the corporate governance and nominating committee on a quarterly basis of any communications received for which the Corporate Secretary has either responded or determined no response is necessary.
This procedure for communications with the non-management directors is administered by the Company’s corporate governance and nominating committee. This procedure does not apply to (a) communications to non-employee directors from officers or directors of the Company who are stockholders, or (b) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act.
PROPOSAL ONE: ELECTION OF DIRECTORS
Our Board of Directors has nominated seven candidates for election as director for a term expiring at the next annual meeting of stockholders. All of the nominees are currently members of our Board. Directors are elected to serve for their respective terms of one year or until their successors have been duly elected or appointed and qualified. The Board has no reason to believe that any of the nominees named below will be unavailable, or if elected, will decline to serve.
Pursuant to our Bylaws, generally the number of directors is fixed and may be increased or decreased from time to time by resolution of our Board. The Board has fixed the number of directors at seven members. Proxies cannot be voted for a greater number of persons than the number of nominees named. In the event one or more of the named nominees is unable to serve, the persons designated as proxies may cast votes for other persons as substitute nominees.
Nominees
Our corporate governance and nominating committee of the Board of Directors recommended, and the Board of Directors approved, N. Scott Fine, Markus W. Sieger, Jeffrey L. Tate, Randall M. Toig, William S. Shanahan, F. Patrick Ostronic and C.E. Rick Strattan as nominees for re-election to the Board of Directors at the Annual Meeting.
Please see “Directors, Executive Officers and Corporate Governance” in this Proxy Statement for information concerning the nominees.
Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR N. Scott Fine, Markus W. Sieger, Jeffrey L. Tate, Randall M. Toig, William S. Shanahan, F. Patrick Ostronic and C.E. Rick Strattan. If a nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for another nominee designated by the Board of Directors. We are not aware of any reason that a nominee would be unable or unwilling to serve as a director.
Required Vote
Each director is elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of the vote.
The Board of Directors unanimously recommends that stockholders vote “FOR” the re-election of each of N. Scott Fine, Markus W. Sieger, Jeffrey L. Tate, Randall M. Toig, William S. Shanahan, F. Patrick Ostronic and C.E. Rick Strattan to the Board of Directors.
PROPOSAL TWO: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), our stockholders are entitled to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the SEC’s rules. Please read the “Executive Compensation” section of this Proxy Statement for additional details about our executive compensation program.
We are asking our stockholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2022 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.”
We believe that our compensation policies and procedures are intended to be aligned with the long-term interests of our stockholders. The say-on-pay vote is advisory, and therefore not binding on the Company, the compensation committee or the Board. However, the Board and compensation committee value the opinions of our stockholders, we will consider our stockholders’ concerns, and the compensation committee will consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
Required Vote
Assuming that a quorum is present at the Meeting, approval of this proposal requires the affirmative vote of holders of a majority of the shares present and entitled to vote thereon either in person or represented by proxy at the Meeting.
The Board of Directors unanimously recommends that stockholders vote “FOR” the approval, on a nonbinding advisory basis, of the compensation of our named executive officers.
PROPOSAL THREE: RATIFICATION OF SELECTION OF INDEPENDENTREGISTERED PUBLIC ACCOUNTANTS
Our audit committee of the Board of Directors has appointed WithumSmith+Brown, PC as our independent registered public accountants for the year ending December 31, 2022, and the Board recommends that stockholders vote for ratification of such appointment.
Notwithstanding its selection or voting results, the audit committee in its discretion may appoint new independent registered public accountants at any time during the year if the audit committee believes that such a change would be in the best interests of the Company and its stockholders. If our stockholders do not ratify the appointment, the audit committee may reconsider whether it should appoint another independent registered public accounting firm.
WithumSmith+Brown, PC served as our independent registered public accounting firm for the year ended December 31, 2021. We currently do not expect that a representative of WithumSmith+Brown, PC will be present at the Annual Meeting.
Principal Accounting Fees and Services
The following table sets forth all fees accrued or paid to WithumSmith+Brown, PC for the years ended December 31, 2021 and 2020:
Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
Audit Fees (1) | $ | 107,960 | $ | 114,848 | ||||
Audit-Related Fees (2) | $ | 97,851 | $ | 92,546 | ||||
Tax Fees | - | - | ||||||
All Other Fees | - | - | ||||||
Total | $ | 205,810 | $ | 207,394 |
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Pre-approval Policy. Under our audit committee’s policy governing our use of the services of our independent registered public accountants, the audit committee is required to pre-approve all audit and permitted non-audit services performed by our independent registered public accountants in order to ensure that the provision of such services does not impair the public accountants’ independence. In the years ended December 31, 2021 and 2020, all fees identified above under the captions “Audit Fees,” and “All Other Fees” that were billed by WithumSmith+Brown, PC were approved by the audit committee in accordance with SEC requirements.
In the year ended December 31, 2021, there were no other professional services provided by WithumSmith+Brown, PC, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of WithumSmith+Brown, PC.
Required Vote
Assuming that a quorum is present at the Meeting, approval of this proposal requires the affirmative vote of holders of a majority of the shares present and entitled to vote thereon either in person or represented by proxy at the Meeting.
The Board of Directors unanimously recommends that stockholders vote “FOR” the ratification of the selection of WithumSmith+Brown, PC as the Company’s independent registered public accountants for the year ending December 31, 2022.
AUDIT COMMITTEE REPORT
The following is the report of the audit committee of our Board of Directors. The audit committee has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 2021 with our management. In addition, the audit committee has discussed with WithumSmith+Brown, PC, our independent registered public accountants, the matters required to be discussed by standards promulgated by the American Institute of Certified Public Accountants (“AICPA”) and Public Company Accounting Oversight Board (the “PCAOB”), including PCAOB Auditing Standard No. 16 “Communications with Audit Committees.” The audit committee also has received the written disclosures and the letter from WithumSmith+Brown, PC as required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and the audit committee has discussed with WithumSmith+Brown, PC the independence of WithumSmith+Brown, PC.
Based on the audit committee’s review of the matters noted above and its discussions with our independent accountants and our management, the audit committee recommended to the Board of Directors that the financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
ANNUAL REPORTS
The Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (our “Annual Report”) (which is not a part of our proxy soliciting materials), is being mailed with this Proxy Statement to those stockholders that request to receive a copy of the proxy materials in the mail. Stockholders that received the Notice of Internet Availability of Proxy Materials can access this Proxy Statement and our Annual Report at www.proxyvote.com. Requests for copies of our Annual Report may also be directed to the Corporate Secretary at Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, FL 32653, Attn: Corporate Secretary.
We filed our Annual Report with the SEC on March 11, 2022. It is available free of charge at the SEC’s web site at www.sec.gov. Upon written request by a stockholder, we will mail without charge a copy of our Annual Report, including the financial statements and financial statement schedules, but excluding exhibits to our Annual Report. Exhibits to our Annual Report are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit(s). All requests should be directed to the Corporate Secretary at Cyclo Therapeutics, Inc., 6714 NW 16th Street, Suite B, Gainesville, FL 32653, Attn: Corporate Secretary.
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented at the AnnualSpecial Meeting. If any additional matters are properly presented or otherwise allowed to be considered at the AnnualSpecial Meeting, the persons named in the enclosed proxy will have discretion to vote shares they represent in accordance with their own judgment on such matters.
It is important that your shares be represented at the meeting, regardless of the number of shares that you hold. You are, therefore, urged to submit your proxy or voting instructions at your earliest convenience.
EXHIBIT A