UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. )
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
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Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material under §240.14a-12 |
Indaptus
Therapeutics, Inc.
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
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No
fee required. |
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Fee
paid previously with preliminary materials. |
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Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Indaptus
Therapeutics, Inc.
NOTICE
& PROXY STATEMENT
Annual
Meeting of Stockholders
May
25, 2023
10:00
a.m. (Eastern time)
INDAPTUS
THERAPEUTICS, INC.
3
COLUMBUS CIRCLE, 15TH FLOOR
NEW
YORK, NY 10019
April
12, 2023
To
Our Stockholders:
You
are cordially invited to attend the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Indaptus Therapeutics,
Inc. at 10:00 a.m. Eastern time, on Thursday, May 25, 2023, at the offices of Indaptus Therapeutics, Inc., 3 Columbus Circle, 15th Floor,
New York, NY. Please note that in order to gain admission to the site of the Annual Meeting, all attendees will need to present a photo
identification card and have their name previously provided to building security. As such, in order to facilitate your attendance at
the Annual Meeting, we strongly encourage you to advise Nir Sassi by email at nir@indaptusrx.com or phone at (646) 427-2727 if
you plan to attend the meeting prior to 5:00 p.m., Eastern time, on May 24, 2023, so that we can timely provide your name to building
security.
The
Notice of Meeting and Proxy Statement on the following pages describe the matters to be presented at the Annual Meeting. Please see the
section called “Who can attend the Annual Meeting?” on page 3 of the proxy statement for more information about how to attend
the meeting in person.
Whether
or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, I urge
you to promptly vote and submit your proxy by phone, via the Internet, or, if you received paper copies of these materials, by signing,
dating and returning the enclosed proxy card in the enclosed envelope, which requires no postage if mailed in the United States. If you
have previously received our Notice of Internet Availability of Proxy Materials, then instructions regarding how you can vote are contained
in that notice. If you have received a proxy card, then instructions regarding how you can vote are contained on the proxy card. If you
decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.
Thank
you for your support.
Sincerely,
Roger
J. Pomerantz, M.D., F.A.C.P.
Chairman
Table
of Contents
INDAPTUS
THERAPEUTICS, INC.
3
Columbus Circle
New
York, NY 10019
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD THURSDAY, May 25, 2023
The
Annual Meeting of Stockholders (the “Annual Meeting”) of Indaptus Therapeutics, Inc., a Delaware corporation (the “Company”),
will be held at 10:00 a.m. Eastern time on Thursday, May 25, 2023, at the offices of Indaptus Therapeutics, Inc., 3 Columbus Circle,
15th Floor, New York, NY. The Annual Meeting will be held for the following purposes:
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To
elect William B. Hayes and Anthony Maddaluna as Class II directors, to serve until the 2026 Annual Meeting of Stockholders, and until
their respective successors shall have been duly elected and qualified; |
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To
ratify the appointment of Haskell & White LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2023; and |
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To
transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment of
the Annual Meeting. |
Holders
of record of our common stock as of the close of business on March 31, 2023 are entitled to notice of and to vote at the Annual Meeting,
or any continuation, postponement or adjournment of the Annual Meeting. A complete list of such stockholders will be open to the examination
of any stockholder at the offices of the Company during regular business hours for a period of ten days prior to the Annual Meeting for
any purpose germane to the meeting. The list of these stockholders will also be available during the Annual Meeting for inspection by
any stockholder who is present. The Annual Meeting may be continued, postponed, or adjourned from time to time without notice other than
by announcement at the Annual Meeting.
Please
note that in order to gain admission to the site of our Annual Meeting, all attendees will need to present a photo identification card
and have their name previously provided to building security. As such, in order to facilitate your attendance at the Annual Meeting,
we strongly encourage you to advise Nir Sassi by email at nir@indaptusrx.com or phone at (646) 427-2727 if you plan to attend
the meeting prior to 5:00 p.m., Eastern time, on May 24, 2023, so that we can timely provide your name to building security. In the event
that you do not advise us ahead of time that you will be attending the Annual Meeting, we encourage you to arrive at the meeting no later
than 9:00 a.m., Eastern time, in order to ensure that you are able to pass through security prior to the start of the meeting. We currently
intend to hold the meeting in person. However, if we determine that a change to a virtual meeting format is advisable or required, an
announcement of such change will be made on the Investors page of our website at https://indaptusrx.com and in a Current Report on Form
8-K as promptly as practicable. We encourage you to check that website one week prior to the meeting date if you are planning to attend
the Annual Meeting. We ask that each stockholder evaluate the relative benefits of in-person attendance at the Annual Meeting and take
advantage of the ability to vote by proxy or to provide voting instructions in accordance with the voting materials that have been provided
to you.
It
is important that your shares be represented regardless of the number of shares you may hold. Whether or not you plan to attend the Annual
Meeting in person, we urge you to vote your shares via the toll-free telephone number or over the Internet, as described in the enclosed
materials. If you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the enclosed return envelope.
Promptly voting your shares will ensure the presence of a quorum at the Annual Meeting and will save us the expense of further solicitation.
Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is
revocable at your option.
By
Order of the Board of Directors
Roger
J. Pomerantz, M.D., F.A.C.P.
Chairman
New
York, New York
April
12, 2023
INDAPTUS
THERAPEUTICS, INC.
3
Columbus Circle, 15th Floor
New
York, NY 10019
PROXY
STATEMENT
This
proxy statement is furnished in connection with the solicitation by the Board of Directors (the “Board” or “Board of
Directors”) of Indaptus Therapeutics, Inc. of proxies to be voted at our Annual Meeting of Stockholders to be held on Thursday,
May 25, 2023 (the “Annual Meeting”), at 10:00 a.m. Eastern time, at the offices of Indaptus Therapeutics, Inc., 3 Columbus
Circle, 15th Floor, New York, NY, and at any continuation, postponement, or adjournment of the Annual Meeting.
Holders
of record of shares of our common stock, $0.01 par value per share, as of the close of business on March 31, 2023 (the “Record
Date”), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement, or adjournment of the
Annual Meeting. As of the Record Date, there were 8,401,047 shares of common stock outstanding and entitled to vote at the Annual Meeting.
Each share of common stock is entitled to one vote on any matter presented to stockholders at the Annual Meeting.
This
proxy statement and the Company’s Annual Report to Stockholders for the year ended December 31, 2022 (the “2022 Annual Report”)
will be released on or about April 12, 2023 to our stockholders on the Record Date.
In
this proxy statement, “Indaptus”, “Company”, “we”, “us”, and “our” refer
to Indaptus Therapeutics, Inc. (formerly Intec Parent, Inc.) and, where appropriate, its consolidated subsidiaries, Intec Pharma Ltd.
and Decoy Biosystems, Inc. References to “Intec Parent” refer to Intec Parent, Inc., the successor of Intec Pharma Ltd. following
the domestication merger (the “Domestication Merger”) with Intec Parent, references to “Intec Israel” refer to
Intec Pharma Ltd., the predecessor of Indaptus prior to the Domestication Merger, and references to “Decoy” refer to Decoy
Biosystems, Inc., the entity acquired by Indaptus in connection with the merger with Decoy (the “Merger”).
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON THURSDAY, MAY 25, 2023
This
Proxy Statement and our 2022 Annual Report to Stockholders are available at http://www.proxyvote.com/
Proposals
At
the Annual Meeting, our stockholders will be asked:
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To
elect William B. Hayes and Anthony Maddaluna as Class II directors to serve until the 2026 Annual Meeting of Stockholders, and until
their respective successors shall have been duly elected and qualified; |
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To
ratify the appointment of Haskell & White LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2023; and |
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To
transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment of
the Annual Meeting. |
We
know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for
a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance
with their best judgment.
Recommendations
of the Board
The
Board of Directors recommends that you vote your shares as indicated below. If you return a properly completed proxy card, or vote your
shares by telephone or Internet, your shares of common stock will be voted on your behalf as you direct. If not otherwise specified,
your shares of common stock represented by the proxies will be voted, and the Board of Directors recommends that you vote:
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FOR
the election of William B. Hayes and Anthony Maddaluna as Class II directors; and |
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FOR
the ratification of the appointment of Haskell & White LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2023. |
If
any other matter properly comes before the stockholders for a vote at the Annual Meeting, the proxy holders named on the Company’s
proxy card will vote your shares in accordance with their best judgment.
Information
About This Proxy Statement
Why
you received this proxy statement. You are viewing or have received these proxy materials because Indaptus’ Board of Directors
is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to
provide to you under the rules of the Securities and Exchange Commission (“SEC”) and that is designed to assist you in voting
your shares.
Notice
of Internet Availability of Proxy Materials. As permitted by SEC rules, Indaptus is making this proxy statement and its 2022 Annual
Report available to its stockholders electronically via the Internet. On or about April 12, 2023, we commenced mailing to our stockholders
a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) containing instructions on how to access this
proxy statement and our 2022 Annual Report and vote online. If you received an Internet Notice by mail, you will not receive a printed
copy of the proxy materials in the mail unless you specifically request them.
Instead,
the Internet Notice instructs you on how to access and review all of the important information contained in the proxy statement and 2022
Annual Report. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you received an Internet
Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such
materials contained on the Internet Notice.
Printed
Copies of Our Proxy Materials. If you received printed copies of our proxy materials, then instructions regarding how you can vote
are contained on the proxy card included in the materials.
Householding.
The SEC rules permit us to deliver a single set of proxy materials to one address shared by two or more of our stockholders. This
delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity,
we have delivered only one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions
from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy
of the proxy materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered.
If you prefer to receive separate copies of the proxy materials, contact Broadridge Financial Solutions, Inc. at 1-866-540-7095 or in
writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
If
you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future proxy materials
for your household, please contact Broadridge at the above phone number or address.
QUESTIONS
AND ANSWERS ABOUT THE 2023 ANNUAL MEETING OF STOCKHOLDERS
Who
is entitled to vote at the Annual Meeting?
The
Record Date for the Annual Meeting is March 31, 2023. You are entitled to vote at the Annual Meeting only if you were a stockholder of
record at the close of business on that date, or if you hold a valid proxy for the Annual Meeting. Each outstanding share of common stock
is entitled to one vote for all matters before the Annual Meeting. At the close of business on the Record Date, there were 8,401,047
shares of common stock outstanding and entitled to vote at the Annual Meeting.
What
is the difference between being a “record holder” and holding shares in “street name”?
A
record holder (also referred to as a “registered stockholder”) holds shares in his or her name. Shares held in “street
name” means shares that are held in the name of a bank or broker on a person’s behalf.
Am
I entitled to vote if my shares are held in “street name”?
Yes.
If your shares are held by a bank or a brokerage firm, you are considered the “beneficial owner” of those shares held in
“street name.” If your shares are held in street name, these proxy materials are being provided to you by your bank or brokerage
firm, along with a voting instruction card if you received printed copies of our proxy materials. As the beneficial owner, you have the
right to direct your bank or brokerage firm how to vote your shares, and the bank or brokerage firm is required to vote your shares in
accordance with your instructions. If your shares are held in “street name” and you would like to vote your shares in person
at the Annual Meeting, you should contact your bank or brokerage firm to obtain a “legal proxy” to bring to the Annual Meeting.
How
many shares must be present to hold the Annual Meeting?
A
quorum must be present at the Annual Meeting for any business to be conducted. The presence in person at the Annual Meeting or by proxy,
of the holders of not less than 33.3% of the voting power of the capital stock issued and outstanding and entitled to vote on the Record
Date will constitute a quorum.
Who
can attend the Annual Meeting?
You
may attend the Annual Meeting in person only if you are an Indaptus stockholder of record who is entitled to vote at the Annual Meeting,
or if you hold a valid proxy for the Annual Meeting. If you would like to attend the Annual Meeting, you must contact Nir Sassi by email
at nir@indaptusrx.com or phone at (646) 427-2727 no later than 5:00 p.m., Eastern time, on May 24, 2023 to have your name placed
on the attendance list. In order to be admitted into the Annual Meeting, your name must appear on the attendance list and you must present
government-issued photo identification (such as a driver’s license). If your shares are held in “street name,” you
should contact your bank or brokerage firm to obtain a “legal proxy” to bring to the Annual Meeting.
What
if a quorum is not present at the Annual Meeting?
If
a quorum is not present at the scheduled time of the Annual Meeting, the Chairperson of the Annual Meeting is authorized by our Amended
and Restated Bylaws to adjourn the meeting, without the vote of stockholders.
What
does it mean if I receive more than one Internet Notice or more than one set of proxy materials?
It
means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your
shares. To ensure that all of your shares are voted, for each Internet Notice or set of proxy materials, please submit your proxy by
phone, via the Internet, or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy
card in the enclosed envelope.
How
do I vote?
Stockholders
of Record. If you are a stockholder of record, you may vote in person at the Annual Meeting or by proxy. There are three ways to
vote by proxy:
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by
Internet—You can vote over the Internet by going to www.proxyvote.com and following the instructions ; |
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by
Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions; or |
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by
Mail—If you received a proxy card, you can vote by mail by signing and dating the proxy card and returning it in accordance
with the instructions on the card. |
Internet
and telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m., Eastern time,
on May 24, 2023. To vote via the Internet or telephone, you will need the 16-digit control number included on your Internet Notice or
on your proxy card.
Whether
or not you expect to attend the Annual Meeting in person, we urge you to vote your shares as promptly as possible to ensure your representation
and the presence of a quorum at the Annual Meeting. If you submit your proxy, you may still decide to attend the Annual Meeting and vote
your shares in person.
Beneficial
Owners of Shares Held in “Street Name.” If your shares are held in “street name” through a bank or
broker, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares
to be voted. Internet and telephone voting also may be offered to stockholders owning shares through certain banks and brokers. If your
shares are not registered in your own name and you would like to vote your shares in person at the Annual Meeting, you should contact
your bank or broker to obtain a “legal proxy” and bring it to the Annual Meeting.
Can
I change my vote after I submit my proxy?
Yes.
If
you are a registered stockholder, you may revoke your proxy and change your vote:
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by
submitting a duly executed proxy bearing a later date; |
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by
granting a subsequent proxy through the Internet or telephone; |
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by
giving written notice of revocation to the Secretary of Indaptus prior to or at the Annual Meeting; or |
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by
voting in person at the Annual Meeting. |
Your
most recent proxy card or proxy submitted by Internet or telephone is the one that is counted. Your attendance at the Annual Meeting
by itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you
vote in person at the Annual Meeting.
If
your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided
to you by your bank or broker, or you may vote in person at the Annual Meeting by obtaining a “legal proxy” and bringing
it to the Annual Meeting.
Who
will count the votes?
Nir
Sassi, our inspector of election appointed for the Annual Meeting, will tabulate and certify the votes.
What
if I do not specify how my shares are to be voted?
If
you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations
of the Board of Directors. The Board of Directors’ recommendations are indicated on page 2 of this proxy statement, as well as
with the description of each proposal in this proxy statement.
Will
any other business be conducted at the Annual Meeting?
We
know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for
a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance
with their best judgment.
Will
there be a question and answer (Q&A) session during the Annual Meeting?
As
part of the Annual Meeting, we will hold a live Q&A session, during which we intend to answer questions submitted during the meeting
that are pertinent to the Company and the meeting matters, as time permits. Only stockholders admitted to the Annual Meeting by following
the procedures outlined above in “Who can attend the Annual Meeting?” will be permitted to submit questions during the Annual
Meeting. Each stockholder is limited to no more than two questions. Questions should be succinct and only cover a single topic. We will
not address questions that are, among other things:
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irrelevant
to the business of the Company or to the business of the Annual Meeting; |
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related
to material non-public information of the Company, including the status or results of our business since our last Quarterly Report
on Form 10-Q; |
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related
to any pending, threatened or ongoing litigation; |
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related
to personal grievances; |
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derogatory
references to individuals or that are otherwise in bad taste; |
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substantially
repetitious of questions already made by another stockholder; |
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in
excess of the two-question limit; |
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in
furtherance of the stockholder’s personal or business interests; or |
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out
of order or not otherwise suitable for the conduct of the Annual Meeting as determined by the Chairperson or Secretary in their reasonable
judgment. |
How
many votes are required for the approval of the proposals to be voted upon and how will abstentions and broker non-votes be treated?
Proposal |
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Votes
required |
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Effect
of Votes Withheld / Abstentions and Broker Non-Votes |
Proposal
1: Election of Directors |
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The
plurality of the votes cast. This means that the two nominees receiving the highest number
of affirmative “FOR” votes will be elected as Class II Directors. |
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Votes
withheld and broker non-votes will have no effect. |
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Proposal
2: Ratification of Appointment of Independent Registered Public Accounting Firm |
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The
affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively. |
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Abstentions
will have no effect. We do not expect any broker non-votes on this proposal. |
What
is a “vote withheld” and an “abstention” and how will votes withheld and abstentions be treated?
A
“vote withheld,” in the case of the proposal regarding the election of directors, or an “abstention,” in the
case of the proposal regarding the ratification of the appointment of Haskell & White LLP as our independent registered public accounting
firm, represents a stockholder’s affirmative choice to decline to vote on a proposal. Votes withheld and abstentions are counted
as present and entitled to vote for purposes of determining a quorum. Votes withheld have no effect on the election of directors. Abstentions
have no effect on the ratification of the appointment of Haskell & White LLP.
What
are broker non-votes and do they count for determining a quorum?
Generally,
broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to
a particular proposal because the broker (1) has not received voting instructions from the beneficial owner and (2) lacks discretionary
voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters, such as the ratification
of the appointment of Haskell & White LLP as our independent registered public accounting firm, without instructions from the beneficial
owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote
shares held for a beneficial owner on non-routine matters, such as the election of directors. Broker non-votes count for purposes of
determining whether a quorum is present.
Where
can I find the voting results of the Annual Meeting?
We
plan to announce preliminary voting results at the Annual Meeting, and we will report the final results in a Current Report on Form 8-K,
which we intend to file with the SEC after the Annual Meeting.
PROPOSALS
TO BE VOTED ON
Proposal
1: Election of Directors
At
the Annual Meeting, two (2) Class II Directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in
2026 and until each such director’s respective successor is duly elected and qualified or until each such director’s earlier
death, resignation or removal.
We
currently have nine (9) directors on our Board. Our current Class II Directors are William B. Hayes, Anthony Maddaluna and Brian O’Callaghan.
The Board has nominated William B. Hayes and Anthony Maddaluna for election as Class II Directors at the Annual Meeting. Brian O’Callaghan
has not been nominated for election as a Class II director at the Annual Meeting following the end of his current term. Proxies cannot
be voted for a greater number of persons than the number of nominees named in this proposal.
As
set forth in our Amended and Restated Certificate of Incorporation, the Board is currently divided into three classes with staggered,
three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve
from the time of election and qualification until the third annual meeting following the election. The current class structure is as
follows: Class I, whose term will expire at the 2025 Annual Meeting of Stockholders; Class II, whose current term will expire at
the 2023 Annual Meeting of Stockholders and, if elected at the Annual Meeting, whose subsequent term will expire at the 2026 Annual Meeting
of Stockholders; and Class III, whose term will expire at the 2024 Annual Meeting of Stockholders. The current Class I Directors
are Mark J. Gilbert, M.D., Hila Karah and Robert E. Martell, M.D., Ph.D.; the current Class II Directors are William
B. Hayes, Anthony Maddaluna and Brian O’Callaghan; and the current Class III Directors are Jeffrey A. Meckler, Michael J.
Newman, Ph.D. and Dr. Roger J. Pomerantz, M.D., F.A.C.P.
Our
Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the authorized number of directors may
be changed from time to time by the Board. Any additional directorships resulting from an increase in the number of directors will be
distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division
of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control
of our Company. Our directors may be removed only for cause by the affirmative vote of the holders of a majority of our outstanding voting
stock entitled to vote in the election of directors.
If
you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of common stock represented
thereby for the election as Class II Directors of the persons whose names and biographies appear below. In the event that any of Mr.
Hayes or Mr. Maddaluna should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will
be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. The Board has no reason to believe
that Mr. Hayes or Mr. Maddaluna will be unable to serve if elected. Each of Mr. Hayes and Mr. Maddaluna has consented to being named
in this proxy statement and to serve if elected.
Vote
required
The
proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the two nominees
receiving the highest number of affirmative “FOR” votes will be elected as Class II Directors.
Votes
withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on
this proposal.
Recommendation
of the Board of Directors
The
Board of Directors unanimously recommends a vote FOR the election of each of the below Class II Director nominees.
Nominees
For Class II Directors (terms to expire at the 2026 Annual Meeting)
The
current members of the Board of Directors who are also nominees for election to the Board of Directors as Class II Directors are as follows:
Name | |
Age | | |
Served
as a Director Since | | |
Position
with Indaptus |
William B. Hayes | |
57 | | |
2021 | | |
Director |
Anthony Maddaluna | |
70 | | |
2021 | | |
Director |
The
principal occupations and business experience, for at least the past five years, of each Class II Director nominee for election at the
Annual Meeting are as follows:
William
B. Hayes has served on our Board since July 2021 and previously served on Intec Israel’s board of directors since June
2018 until the Merger. Most recently, Mr. Hayes was Executive Vice President, Chief Financial Officer and Treasurer of Laboratory Corporation
of America Holdings (LabCorp) (NYSE: LH), a diagnostics laboratory company. Mr. Hayes joined LabCorp in 1996, where he was responsible
for day-to-day operations of the revenue cycle function. He rose through a series of promotions and in 2005 was named Executive Vice
President, Chief Financial Officer and Treasurer of LabCorp, a role he held until his retirement in 2014. Prior to LabCorp, Mr. Hayes
was at KPMG for nine years in their audit department. Since October 2019, Mr. Hayes has served on the board of Builders FirstSource,
a supplier and manufacturer of building materials (Nasdaq: BLDR), and currently chairs its audit committee. Previously, Mr. Hayes served
as a director from March 2016 for Patheon N.V. (NYSE: PTHN), a pharmaceutical manufacturing company, until its acquisition by Thermo
Fisher in late 2017. Mr. Hayes holds a Bachelor of Science in accounting from the University of North Carolina at Greensboro. We believe
Mr. Hayes is qualified to serve on our Board because of his accounting background and experience serving on public company boards.
Anthony
Maddaluna has served on our Board since July 2021 and previously served on Intec Israel’s
board of directors since December 2017 until the Merger. Mr. Maddaluna has more than 40 years of experience in the pharmaceutical manufacturing
industry, including leadership positions in plants, regions and globally. From January 2011 to December 2016, Mr. Maddaluna held a series
of positions at Pfizer Inc., most recently serving as the Executive Vice President and President of Pfizer Global Supply. Prior to that
Mr. Maddaluna served as Senior Vice President of Pfizer Global Manufacturing Strategy and Supply Network Transformation from 2008 until
2011, and as Vice President of Pfizer Global Manufacturing Europe Area from 1998 until 2008. Mr. Maddaluna served as a director of Albany
Molecular Research Inc. from February 2016 until its acquisition by The Carlyle Group and GTCR in August 2017 and currently serves on
the board of managers for the private company. Mr. Maddaluna holds a B.S. in Chemical Engineering from Northeastern University and an
M.B.A. from Southern Illinois University. We believe Mr. Maddaluna is qualified to serve on our Board because of his extensive experience
in the pharmaceutical manufacturing industry, including his service at Pfizer, and his experience serving on company boards.
Continuing
members of the Board of Directors:
Class
I Directors (terms to expire at the 2025 Annual Meeting)
The
current members of the Board of Directors who are Class I Directors are as follows:
Name | |
Age | | |
Served
as a Director Since | | Position
with
Indaptus |
Mark J. Gilbert, M.D. | |
62 | |
| 2021 | | |
Director |
Hila Karah | |
54 | |
| 2021 | | |
Director |
Robert E. Martell, M.D., Ph.D. | |
60 | |
| 2023 | | |
Director |
The
principal occupations and business experience, for at least the past five years, of each Class I Director are as follows:
Mark
J. Gilbert, M.D. has
served on our Board since November 2021. Dr. Gilbert brings more than 30 years of experience in global medical and clinical research
and development, and management of medical affairs. From March 2019 to March 2022, Dr. Gilbert served as Executive Vice President of
Research and Development at Acepodia, Inc., a clinical-stage biotechnology company addressing gaps in cancer care. and since June 2021,
Dr. Gilbert has served as a Clinical Development Advisor to Decoy Biosystems, Inc., the Company’s wholly owned-subsidiary. In addition,
from July 2022, Dr. Gilbert serves as the Clinical Development Advisor at Tune Therapeutics, a biotechnology company focused on epigenetic
edited-therapeutic medicines; from October 2020, Dr. Gilbert serves as the Chairman of the Scientific Advisory Board at Inceptor Bio,
LLC, a biotechnology company developing multiple next-generation cell and gene therapy platforms for underserved and difficult-to-treat
cancers, and has served as a member of their board of directors since November 2022; from October 2020, he serves as a Strategic Advisor
at Kineticos Ventures, a firm providing advisory services and capital to emerging life sciences firms; and from March 2020, he serves
as Chief Medical Officer of JW Therapeutics, a biotechnology company focused on cell immunotherapy products. Prior to these positions,
between November 2013 and January 2020, Dr. Gilbert was the Chief Medical Officer of Juno Therapeutics Inc., a biopharmaceutical company,
where he led the clinical development of some of the first CAR-T cell therapies. Before that, Dr. Gilbert held leadership positions at
Bayer Schering Pharma AG, where he served as Vice President and Head of Global Clinical Development, Therapeutic Area Oncology;
Berlex Pharmaceuticals, Inc., where he served as Vice President of Medical Affairs, Oncology, and Vice President and Head of Global Medical
Development Group, Oncology; and Immunex Corporation, where he served as Senior Medical Director, Clinical Research and Development.
Between May 2019 and May 2021, Dr. Gilbert served as an Independent Director of Silicon Therapeutics, Inc., a fully integrated drug design
and development company. Dr. Gilbert earned a Bachelor of Science degree in Biochemistry from the University of Iowa and a Medical Doctor
degree from the University of Iowa College of Medicine. He trained in internal medicine, infectious disease and medical oncology at the
University of California, San Francisco, and the University of Washington, respectively. We believe Dr. Gilbert is qualified to serve
on our Board because of his significant scientific and executive in drug development and in the pharmaceutical industry.
Hila
Karah has served on our Board since July 2021 and previously served as a member
of Intec Israel’s board of directors since December 2009 until the Merger. Ms. Karah is an experienced board director and since
2013 serves as an independent business consultant to private and public companies on strategy, operations, financing, regulatory and
corporate governance. From November 2017 to September 2018, Ms. Karah was the executive chairperson of FloraFotonica Ltd., an Israeli
Agro Tech startup. From 2006 until 2013, Ms. Karah was the chief investment officer of Eurotrust Ltd., a family office, where she focused
primarily on investments in life science, internet and high-tech companies. Prior to joining Eurotrust, Ms. Karah served as a senior
analyst at Perceptive Life Sciences Ltd., a New York-based hedge fund. Prior to her position at Perceptive, Ms. Karah was a research
analyst at Oracle Partners Ltd., a healthcare-focused hedge fund based in Connecticut. Ms. Karah has served on the board of Cyren Ltd.,
a cyber security company (Nasdaq, TASE: CYRN), since 2008 and the board of Dario Health Corp. (Nasdaq: DRIO) since 2014. She also serves
on the board of several private companies. Ms. Karah has a BA in molecular and cell biology from the University of California, Berkeley,
and has studied at the UCSB - UCSF Joint Medical Program. We believe Ms. Karah is qualified to serve on our Board because of her longstanding
service with Intec Israel, her investment career in life science companies, her scientific background and experience serving on public
company boards.
Robert
E. Martell, M.D., Ph.D. has served on our Board since February 2023. Dr. Martell
brings more than 20 years of experience in the pharmaceutical industry. Since June 2018, Dr. Martell serves as Head of Research and Development
at Curis, Inc., a biotechnology company focused on the development of innovative therapeutics for the treatment of cancer, and served
on its board of directors from November 2011 to May 2018. He is also co-founder of Epi-Cure Pharmaceuticals, a privately held early-stage
biotechnology company, and served as its president and member of board of directors from 2016 to 2018. Dr. Martell also currently serves
as an attending physician at Tufts University Medical Center, a position he has held since 2009. Prior to these positions, from 2012
to 2015, Dr. Martell served as the Chief Medical Officer of Tesaro, Inc., an oncology-focused biopharmaceutical company, where he had
led the medical and pharmacological aspects of development. Before that, from 2005 to 2009, he served as the Chief Medical Officer of
MethylGene, Inc., a publicly traded biopharmaceutical company focused on cancer therapeutics, where he had oversight of all aspects of
clinical strategy and development. He also held positions as Director of Oncology Global Clinical Research at Bristol-Myers Squibb, a
biopharmaceutical company, from 2002 to 2005; and as Associate/Deputy Director at Bayer Corporation Pharmaceutical Division from 2000
to 2002. In addition, Dr. Martell has held a number of academic positions, including at Yale University School of Medicine as Assistant
Clinical Professor of Oncology from 2001 to 2005, and at Duke Medical Center from 1998 to 2000 where he achieved the rank of Assistant
Professor. Dr. Martell received a B.A. in chemistry from Kalamazoo College, a Ph.D. in Pharmacology from University of Michigan and an
M.D. from Wayne State University. He completed his Internal Medicine internship and residency at Duke University Medical Center, and
his Fellowship in Medical Oncology also at Duke. We believe Dr. Martell is qualified to serve on our Board due to his significant experience
in research and development and as a Chief Medical Officer of public biopharmaceutical companies.
Class
III Directors (terms to expire at the 2024 Annual Meeting)
The
current members of the Board of Directors who are Class III Directors are as follows:
Name | |
Age | | |
Served
as a
Director Since | | |
Position
with Indaptus |
Jeffrey A. Meckler | |
56 | | |
2021 | | |
Chief Executive Officer and Director |
Michael J. Newman, Ph.D. | |
67 | | |
2021 | | |
Chief Scientific Officer and Director |
Dr. Roger J. Pomerantz, M.D., F.A.C.P. | |
66 | | |
2021 | | |
Chairman of the Board |
The
principal occupations and business experience, for at least the past five years, of each Class III Director are as follows:
Jeffrey
A. Meckler has served as our Chief Executive Officer since July 2021 and member of our Board since inception in February 2021.
Previously, Mr. Meckler served as our sole officer from inception to July 2021, Intec Israel’s Vice Chairman of the
board of directors from April 2017, as Intec Israel’s Chief Executive Officer from July 2017 and as President and
Secretary and director of Intec Parent from March 2021 until the Merger. Mr. Meckler has served on numerous public and private corporate
boards and since October 2014 has served as a director of Travere Therapeutics (Nasdaq: TVTX). Mr. Meckler served as Chief Executive
Officer and a director of CoCrystal Pharma, Inc., a pharmaceutical company, from April 2015 to July 2016. He has also served as a director
of QLT, Inc. (Nasdaq: QLTI), a biotechnology company, from June 2012 to November 2016, as well as the Managing Director of The Andra
Group, a life sciences consulting firm since 2009. Mr. Meckler also served as Chief Executive Officer of Trieber Therapeutics from January
2017 to July 2017. Earlier in his career, Mr. Meckler held a series of positions at Pfizer Inc. in manufacturing systems, market research,
business development, strategic planning and corporate finance, which included playing a significant role in acquisitions and divestitures.
Mr. Meckler is the past President and continues to serve on the board
of directors of Children of Bellevue, a non-profit organization focused on advocating and developing pediatric programs at Bellevue Hospital
Center. Mr. Meckler holds a B.S. in Industrial Management and M.S. in Industrial Administration from Carnegie Mellon University. In addition,
Mr. Meckler received his J.D. from Fordham University School of Law. We believe that Mr. Meckler is qualified to serve on our Board because
of his extensive executive leadership experience in the biopharmaceutical industry, including his service at Pfizer, and his experience
serving on public company boards.
Michael
J. Newman, Ph.D. has served as our Chief Scientific Officer and a member of our
Board since August 2021. Dr. Newman is a pharmaceutical/biotechnology executive with over 35 years of experience carrying out and managing
oncology research and development, in addition to undergraduate and graduate research and training in microbiology. He was the Founder,
President, Chief Executive Officer and a member of the board of directors of Decoy (from August 2013 to August 2021). His previous positions
also include faculty appointments in Biochemistry at Brandeis University (from 1984 to 1987) and the Roche Institute of Molecular Biology
(from 1987 to 1992), Senior Associate Director of Oncology at Sandoz Pharmaceuticals (world-wide head of Cancer Biology), and Executive
Director of Oncology at Novartis Pharmaceuticals (Head of Cancer Biology in the U.S.) (from 1992 to 1997), and senior management at several
Biotechnology companies (from 1998 to 2012). Dr. Newman received a bachelor’s degree in biology from the University of California
at San Diego, a Ph.D. in Cell and Developmental Biology from Harvard Medical School (National Science Foundation Pre-Doctoral Fellow)
and carried out post-doctoral research at Cornell University. We believe that Dr. Newman is qualified to serve on our Board because of
his extensive scientific and research background, as well as his experience as founder and CEO of Decoy.
Roger
J. Pomerantz, M.D., F.A.C.P. has served as our Chairman since July 2021 and previously
served on Intec Israel’s board of directors from March 2018 until the Merger. Dr. Pomerantz has served as Chairman and Chief Executive
Officer of Contrafect Corporation (Nasdaq: CFRX) since April 2019 and Vice Chairman of Contrafect since May 2014. Previously, Dr. Pomerantz
was a Venture Partner at Flagship Pioneering from 2014 through 2019. In addition, from November 2013 to December 2019, Dr. Pomerantz
served as Chairman of the board of directors of Seres Therapeutics, Inc. (Nasdaq: MCRB), a biotechnology company, and as its President
and Chief Executive Officer from June 2014 to January 2019. Prior to joining Seres, Dr. Pomerantz was Worldwide Head of Licensing &
Acquisitions, Senior Vice President at Merck & Co., Inc., where he oversaw all licensing and acquisitions at Merck Research Laboratories,
including external research, out-licensing regional deals, and academic alliances. Previously, he served as Senior Vice President and
Global Franchise Head of Infectious Diseases at Merck. Prior to joining Merck, Dr. Pomerantz was Global Head of Infectious Diseases for
J&J. Dr. Pomerantz has served as a member of the board of directors of Viracta (Nasdaq: VIRX) since June 2020 and was appointed Chair
in September 2020. Since February 2020, he served as Chairman of Collplant Biotechnologies (Nasdaq: CLPT) and was previously a member
of the board of directors of Rubius Therapeutics (Nasdaq: RUBY). Dr. Pomerantz earned his B.A. in biochemistry at the Johns Hopkins University
and his M.D. at the Johns Hopkins School of Medicine. He completed his internal medicine internship and residency training, and his subspecialty
clinical and research training in infectious diseases and virology at the Massachusetts General Hospital of Harvard Medical School. His
post-doctoral research training in molecular retrovirology was obtained at both Harvard Medical School and the Whitehead Institute of
the Massachusetts Institute of Technology (MIT). Dr. Pomerantz also served as the Chief Resident at the Massachusetts General Hospital.
Following his medical-scientist training, he was an Endowed, Tenured Professor of Medicine and Molecular Pharmacology and Chairman of
the Infectious Diseases Department of Thomas Jefferson University in Philadelphia. Dr. Pomerantz is an internationally recognized expert
in HIV molecular pathogenesis and latency. He has developed ten approved infectious disease drugs in important diseases including HIV,
HCV, tuberculosis, and Clostridium difficile infection. We believe Dr. Pomerantz is qualified to serve on our Board because of his significant
scientific, executive and board leadership experience in drug development and in the pharmaceutical industry.
Proposal
2: Ratification of Appointment of Independent Registered Public Accounting Firm
Our
Audit Committee has appointed Haskell & White LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2023. Our Board has directed that this appointment be submitted to our stockholders for ratification at the Annual Meeting.
Although ratification of our appointment of Haskell & White LLP is not required, we value the opinions of our stockholders and believe
that stockholder ratification of our appointment is a good corporate governance practice.
Haskell
& White LLP also served as our independent registered public accounting firm for the fiscal year ended December 31, 2022. Neither
the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity
other than as our auditors, providing audit and non-audit services. A representative of Haskell & White LLP is not expected to attend
the Annual Meeting and is not expected to have an opportunity to make a statement and be available to respond to appropriate questions
from stockholders.
In
the event that the appointment of Haskell & White LLP is not ratified by the stockholders, the Audit Committee will consider this
fact when it appoints the independent auditors for the fiscal year ending December 31, 2024. Even if the appointment of Haskell &
White LLP is ratified, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines
that such a change is in the interest of the Company.
Vote
Required
This
proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively. Abstentions
are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. Because brokers
have discretionary authority to vote on the ratification of the appointment of Haskell & White LLP, we do not expect any broker non-votes
in connection with this proposal.
Recommendation
of the Board of Directors
The
Board of Directors unanimously recommends a vote FOR the Ratification of the Appointment of Haskell & White LLP as our Independent
Registered Public Accounting Firm for the fiscal year ending December 31, 2023.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit Committee has reviewed the audited consolidated financial statements of Indaptus Therapeutics, Inc. (the “Company”)
for the fiscal year ended December 31, 2022 and has discussed these financial statements with management and the Company’s independent
registered public accounting firm. The Audit Committee has also received from, and discussed with, the Company’s independent registered
public accounting firm various communications that such independent registered public accounting firm is required to provide to the Audit
Committee, including the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board
(“PCAOB”) and the Securities and Exchange Commission.
The
Company’s independent registered public accounting firm also provided the Audit Committee with a formal written statement required
by PCAOB Rule 3526 (Communications with Audit Committees Concerning Independence) describing all relationships between the independent
registered public accounting firm and the Company, including the disclosures required by the applicable requirements of the PCAOB regarding
the independent registered public accounting firm’s communications with the Audit Committee concerning independence. In addition,
the Audit Committee discussed with the independent registered public accounting firm its independence from the Company.
Based
on its discussions with management and the independent registered public accounting firm, and its review of the representations and information
provided by management and the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors
that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2022.
William
B. Hayes (Chairman)
Hila
Karah
Brian
O’Callaghan
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER MATTERS
The
following table summarizes the fees of Haskell & White LLP, our independent registered public accounting firm, billed to us for their
professional services for each of the last two fiscal years:
Fee
Category | |
2022 | | |
2021 | |
Audit Fees | |
$ | 225,540 | | |
$ | 470,000 | |
Audit Related Fees | |
| — | | |
| — | |
Tax Fees | |
| — | | |
| — | |
All Other Fees | |
| — | | |
| — | |
Total Fees | |
$ | 225,540 | | |
$ | 470,000 | |
Audit
Fees
Audit
fees for the fiscal year ended December 31, 2022 include fees for professional services rendered for the audit and quarterly review of
our financial statements included in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC, and services
provided in connection with SEC filings, including consents and comfort letters. Audit fees for the fiscal year ended December 31, 2021
include fees for professional services rendered for the audit and quarterly review of our financial statements included in our annual
report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC, and services provided in connection with SEC filings, including
consents and comfort letters.
Audit
Committee Pre-Approval Policy and Procedures
On
a periodic basis, the Audit Committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that
may be provided by Haskell & White LLP without first obtaining specific pre-approval from the Audit Committee. The Audit Committee
may revise the list of general pre-approved services from time to time, based on subsequent determinations. Our Audit Committee pre-approves
all audit, review, and attest services proposed to be performed by our independent auditor that have not been generally pre-approved,
including the scope of services to be performed and the compensation to be paid to the auditor, prior to commencement of such engagements
of the independent auditor. Our Audit Committee has authorized all auditing and non-auditing services provided by Haskell &White
LLP during the fiscal year ended December 31, 2022 and the fees paid for such services.
EXECUTIVE
OFFICERS
The
following table identifies our current executive officers:
Name |
|
Age |
|
Position |
Jeffrey
A. Meckler (1) |
|
56 |
|
Chief
Executive Officer and Director |
Michael
J. Newman, Ph.D. (2) |
|
67 |
|
Chief
Scientific Officer and Director |
Nir
Sassi (3) |
|
47 |
|
Chief
Financial Officer |
Walt
A. Linscott, Esq. (4) |
|
62 |
|
Chief
Operating Officer |
(1) |
See
biography on page 9 of this proxy statement. |
|
|
(2) |
See
biography on page 9 of this proxy statement. |
|
|
(3) |
Nir
Sassi has served as our Chief Financial Officer since July 2021 and served as Intec Israel’s Chief Financial Officer from March
2010 until the Merger (other than from January 2015 to August 2016, during which period Mr. Sassi served as Intec Israel’s
VP Finance), and its President from March 2021 until the Merger. Prior to his service with Intec Israel, Mr. Sassi served as a Senior
Manager at PricewaterhouseCoopers Israel, an accounting firm, from 2002 until 2010, including two years relocation to the PricewaterhouseCoopers
New York office. Mr. Sassi is a certified public accountant in Israel and has a bachelor’s degree in economics and accounting
from Ben Gurion University in Be’er Sheva, Israel. |
|
|
(4) |
Walt
A. Linscott, Esq. has served as our Chief Operating Officer since March 2023. Prior to that, Mr. Linscott served as our Chief Business
Officer from July 2021 to March 2023 and previously joined Intec Israel in October 2017 and served as its Chief Administrative Officer
from October 2017 to July 2018 and its Chief Business Officer from July 2018 until the Merger. Prior to his service with Intec Israel,
Mr. Linscott co-founded a global consulting enterprise in October 2014 providing strategic advice to developing companies and most
recently served as the President and Chief Operating Officer of Treiber Therapeutics, Inc. from March 2017 to October 2017. Mr. Linscott
also has held senior level executive positions at public and private medical device and pharmaceutical companies including Cocrystal
Pharma, Inc., from July 2015 to March 2017, Carestream Health, Inc., from January 2011 to January 2015 and Solvay Pharmaceuticals,
Inc., from 2001 to 2005. In addition to this experience, he was an associate and partner at Thompson Hine LLP from 1990 to 2001,
and again as a partner from 2005 to 2010 where he founded the firm’s Atlanta, Georgia office, served as Partner in Charge and
Chair of the firm’s Life Science Practice Group. Mr. Linscott holds a Master of Science in Experimental and Translational Therapeutics
from the University of Oxford, a Postgraduate Diploma in Global Business from the University of Oxford and a Postgraduate Diploma
in Entrepreneurship from Cambridge University. He earned a bachelor’s degree from Syracuse University and a Juris Doctor from
the University of Dayton School of Law. Mr. Linscott served on active duty as an Officer in the United States Marine Corps prior
to attending law school. |
CORPORATE
GOVERNANCE
General
Our
Board of Directors has adopted a Code of Business Conduct and Ethics and charters for our Nominating Committee, Audit Committee and Compensation
Committee to assist the Board in the exercise of its responsibilities and to serve as a framework for the effective governance of the
Company. You can access our Code of Business Conduct and Ethics and our current committee charters in the “Corporate Governance”
section of the “Investors” page of our website located at www.indaptusrx.com, or by writing to our Secretary at our
offices at 3 Columbus Circle, 15th Floor, New York, NY 10019.
Board
Composition
Our
Board of Directors currently consists of nine members: Mark J. Gilbert M.D., William B. Hayes, Hila Karah, Anthony Maddaluna, Robert
E. Martell, M.D., Ph.D., Jeffrey A. Meckler, Michael J. Newman, Ph.D., Brian O’Callaghan, and Roger J. Pomerantz, M.D., F.A.C.P.
As set forth in our Amended and Restated Certificate of Incorporation, the Board of Directors is currently divided into three classes
with staggered, three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be
elected to serve from the time of election and qualification until the third annual meeting following election. Our Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws provide that the authorized number of directors may be changed only by resolution
of the Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among
the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board of
Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of
our Company. Our directors may be removed only for cause by the affirmative vote of the holders of a majority in voting power of the
outstanding shares of our capital stock entitled to vote in the election of directors.
Director
Independence
Each
of the directors on our Board of Directors other than Mr. Meckler and Dr. Newman qualifies as “independent” in accordance
with the listing requirements of Nasdaq. The Nasdaq independence definition includes a series of objective tests, including that the
director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his family
members has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our Board of Directors has
made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board of Directors,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations,
our Board of Directors reviewed and discussed information provided by the directors and us with regard to each director’s business
and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of
our directors or executive officers.
Board
Diversity Matrix
Board
Diversity Matrix (As of April 12, 2023) |
Total
Number of Directors | |
9 |
| |
| Female | | |
| Male | |
|
| Non-Binary | | |
Did
Not Disclose Gender |
Part
I: Gender Identity | |
| | | |
| | |
|
| | | |
|
Directors | |
| 1 | | |
| 7 | |
|
| 0 | | |
1 |
Part
II: Demographic Background | |
| | | |
| | |
|
| | | |
|
African
American or Black | |
| 0 | | |
| 0 | |
|
| 0 | | |
0 |
Alaskan
Native or Native American | |
| 0 | | |
| 0 | |
|
| 0 | | |
0 |
Asian | |
| 0 | | |
| 0 | |
|
| 0 | | |
0 |
Hispanic
or Latinx | |
| 0 | | |
| 0 | |
|
| 0 | | |
0 |
Native
Hawaiian or Pacific Islander | |
| 0 | | |
| 0 | |
|
| 0 | | |
0 |
White | |
| 1 | | |
| 7 | |
|
| 0 | | |
0 |
Two
or More Races or Ethnicities | |
| 0 |
LGBTQ+ | |
| 0 |
Did
Not Disclose Demographic Background | |
| 1 |
Director
Candidates
The
Nominating Committee is primarily responsible for recommending to the Board nominees for election as director, and the Board is responsible
for selecting nominees for election. In identifying director candidates for the Board, the Nominating Committee may solicit current directors
and executives of the Company for the names of potentially qualified candidates or ask directors and executives to pursue their own business
contacts for the names of potentially qualified candidates. The Nominating Committee may also consult with outside advisors or retain
search firms to assist in the search for qualified candidates, or consider director candidates recommended by our stockholders. Once
potential candidates are identified, the Nominating Committee reviews the backgrounds and qualifications of those candidates in light
of the function and needs of the Board, evaluates candidates’ independence from the Company and potential conflicts of interest
and determines if candidates meet the qualifications desired by the Nominating Committee for candidates for election as a director. The
Nominating Committee and the Board utilize the same criteria for evaluating candidates regardless of the source of the referral.
Stockholder
recommendations of director candidates should be addressed to the Nominating Committee in care of the Secretary, c/o Indaptus Therapeutics,
Inc., 3 Columbus Circle, 15th Floor, New York, NY 10019. In the event there is a vacancy, and assuming that appropriate biographical
and background material has been provided on a timely basis, the Nominating Committee will evaluate stockholder-recommended candidates
by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by
others.
To
date, the Nominating Committee has not adopted a formal policy with respect to a fixed set of specific minimum qualifications for its
candidates for membership on the Board. Instead, when considering candidates for director, the Nominating Committee will generally consider
all of the relevant qualifications of Board members, including such factors such as the candidate’s relevant expertise upon which
to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence
in his or her field, having relevant financial or accounting expertise, having the ability to exercise sound business judgment, having
the commitment to rigorously represent the long-term interests of our shareholders and whether the director candidates will be independent
for purposes of the Nasdaq listing standards, as well as the current needs of the Board and the Company.
In
addition, while it does not have a formal policy on the Board’s diversity, the Nominating Committee will take into account a broad
range of diversity considerations when assessing director candidates, including individual backgrounds and skill sets, professional experiences
and other factors that contribute to the Board having an appropriate range of expertise, talents, experiences and viewpoints. When considering
any candidate or nominee to serve on the Board, the Nominating Committee shall seek to attain diversity and balance among directors of
race, gender, geography, thought, viewpoints, backgrounds, skills, experience, and expertise from, among other areas, professional and
academic areas relevant to the Company’s area of focus.
Communications
from Stockholders
Stockholders
who wish to communicate with a member or member(s) of the Board, including a specified Board committee or the independent directors as
a group or the full Board may do by the following means:
Mail: |
|
c/o
Chief Financial Officer and Secretary |
|
|
Chairman
of the Board |
|
|
Indaptus
Therapeutics, Inc. |
|
|
3
Columbus Circle, 15th Floor |
|
|
New
York, NY 10019 |
|
|
|
Email: |
|
nir@indaptusrx.com |
Each
communication should specify the applicable addressee or addressees to be contacted as well as the general topic of the communication.
Our Secretary will forward such correspondence to the Chairman of the Board, who will initially receive and process communications before
forwarding them to the specified addressee(s). The Chairman of the Board generally will not forward to the directors a communication
that he determines to be primarily commercial in nature or related to an improper or irrelevant topic, or that requests general information
about us. Concerns about questionable accounting or auditing matters or possible violations of the Indaptus Code of Business Conduct
and Ethics should be reported pursuant to the procedures outlined in the Code of Business Conduct and Ethics, which is available on the
Investors page of the Company’s website under “Governance Highlights”.
Board
Leadership Structure
Our
Board is committed to promoting effective, independent governance of the Company. Our Board believes it is in the best interests of the
stockholders and the Company for the Board to have the flexibility to select the best director to serve as Chairman at any given time,
regardless of whether that director is an independent director or the Chief Executive Officer. Consequently, we do not have a policy
governing whether the roles of Chairman of the Board and Chief Executive Officer should be separate or combined. This decision is made
by our Board, based on the best interests of the Company considering the circumstances at the time.
Currently,
the offices of the Chairman of the Board and the Chief Executive Officer are held by two different people. Dr. Pomerantz is our independent,
non-executive Chairman of the Board and Mr. Meckler is our Chief Executive Officer. The Chief Executive Officer is responsible for the
day to day leadership and performance of the Company, while the Chairman of the Board provides guidance to the Chief Executive Officer
and sets the agenda for Board meetings and presides over meetings of the Board. We believe that separation of the positions reinforces
the independence of the Board in its oversight of the business and affairs of the Company, and creates an environment that is more conducive
to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability
of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders. Furthermore,
we believe that Dr. Pomerantz is especially suited to serve as our chairman of the Board, in light of his significant strategic management
experience in the U.S. healthcare industry, which provides him with a unique perspective on the best methods of growth for a life sciences
company.
However,
our Board of Directors will continue to periodically review our leadership structure and may make such changes in the future as it deems
appropriate.
Role
of the Board in Risk Oversight
One
of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management
committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing
committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for
monitoring and assessing strategic risk exposure and our Audit Committee has the responsibility to consider and discuss our major financial
risk exposures and the steps management will take to monitor and control such exposures, including guidelines and policies to govern
the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory
requirements and considers and approves or disapproves any related person transactions. Our Compensation Committee assesses and monitors
whether our compensation plans, policies and programs comply with applicable legal and regulatory requirements. The Board does not believe
that its role in the oversight of our risks affects the Board’s leadership structure.
Code
of Ethics
We
have a written 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. We have posted
a current copy of the Code of Business Conduct and Ethics on our website, www.indaptusrx.com, in the “Investors” section
under “Corporate Governance.” In addition, we intend to post on our website all disclosures that are required by law or the
rules of Nasdaq concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.
Anti-Hedging
Policy
Our
Board of Directors has adopted an Insider Trading Compliance Policy, which applies to all of our directors, officers and employees. The
policy prohibits our directors, officers and employees and any entities they control from engaging in short sales and transactions in
put or call options and other forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, and
other similar transactions, unless such transaction has been pre-approved by the Chief Financial Officer.
Attendance
by Members of the Board of Directors at Meetings
There
were 5 meetings of the Board of Directors during the fiscal year ended December 31, 2022. During the fiscal year ended December 31, 2022,
each director attended at least 75% of the aggregate of (i) all meetings of the Board of Directors and (ii) all meetings of the committees
on which the director served during the period in which he or she served as a director. We do not maintain a formal policy regarding
director attendance at the Annual Meeting; however, members of our Board of Directors are encouraged to attend. One of our directors
then serving attended the 2022 Annual Meeting of Stockholders.
COMMITTEES
OF THE BOARD
Our
Board has established four standing committees—Audit, Compensation, Nominating, and Science and Technology. Each of Audit, Compensation
and Nominating Committee operates under a written charter that has been approved by our Board.
The
members of each of the Board committees and committee Chairpersons are set forth in the following chart.
Name | |
Audit | | |
Compensation | | |
Nominating | | |
Science
and Technology | |
Mark J. Gilbert, M.D. | |
| | | |
| | | |
| | | |
| X | |
William B. Hayes | |
| Chairperson | | |
| X | | |
| | | |
| | |
Hila Karah | |
| X | | |
| | | |
| X | | |
| | |
Anthony J. Maddaluna | |
| | | |
| Chairperson | | |
| X | | |
| X | |
Robert E. Martell, M.D., Ph.D. | |
| | | |
| | | |
| | | |
| X | |
Michael J. Newman, Ph.D. | |
| | | |
| | | |
| | | |
| Chairperson | |
Brian O’Callaghan | |
| X | | |
| | | |
| Chairperson | | |
| | |
Audit
Committee
Our
Audit Committee’s responsibilities include:
|
● |
appointing,
approving the compensation of, and assessing the independence of our independent registered public accounting firm; |
|
|
|
|
● |
monitoring
the rotation of the partners of our independent registered public accounting firm on our audit engagement team and considering periodically
the rotation of auditing firms; |
|
|
|
|
● |
overseeing
the work of our independent registered public accounting firm; |
|
|
|
|
● |
reviewing
and discussing with management and the independent registered public accounting firm the results of the annual audit, including our
annual financial statements and related disclosures, and the results of the review by the independent registered public accounting
firm of our quarterly financial statements and related disclosures; |
|
|
|
|
● |
discussing
with management and the independent registered public accounting firm the adequacy of our internal control over financial reporting,
disclosure controls and procedures, compliance with legal and regulatory requirements, and code of business conduct and ethics; |
|
|
|
|
● |
discussing
with management and the independent registered public accounting firm our risk management policies; |
|
|
|
|
● |
establishing
policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and retention
of accounting related complaints and concerns; |
|
|
|
|
● |
meeting
independently with our independent registered public accounting firm and management; |
|
|
|
|
● |
reviewing
and providing oversight of any related person transactions, including establishing such policies and procedures as appropriate to
facilitate such review; and |
|
|
|
|
● |
preparing
the audit committee report required by the SEC rules (which is included on page 11 of this proxy statement). |
The
Audit Committee charter is available on the Investors page of our website at www.indaptusrx.com. The members of the Audit Committee
are Mr. Hayes, Ms. Karah, and Mr. O’Callaghan. Mr. Hayes serves as the Chairperson of the committee. Our Board has affirmatively
determined that each of Mr. Hayes, Ms. Karah, and Mr. O’Callaghan is independent for purposes of serving on an audit committee
under Rule 10A-3 promulgated under the Exchange Act and the Nasdaq Rules, including those related to Audit Committee membership. The
Board has not nominated Mr. O’Callaghan for re-election at the Annual Meeting. The Board intends to appoint an independent director
to the Audit Committee to replace Mr. O’Callaghan, effective upon the conclusion of the Annual Meeting.
The
members of our Audit Committee meet the requirements for financial literacy under the applicable Nasdaq rules. In addition, our Board
of Directors has determined that Mr. Hayes qualifies as an “audit committee financial expert,” as such term is defined in
Item 407(d)(5) of Regulation S-K, and under the similar Nasdaq Rules requirement that the Audit Committee have a financially sophisticated
member.
The
Audit Committee met 4 times in 2022.
Compensation
Committee
Our
Compensation Committee is responsible for assisting the Board in the discharge of its oversight responsibilities relating to the evaluation
of our executive officers (including the Chief Executive Officer), determining the compensation of our executive officers, and overseeing
the management of risks associated therewith. In fulfilling its purpose, our Compensation Committee has the following principal duties:
|
● |
reviewing
and approving, or recommending for approval by the Board, our overall compensation strategy and policies, including evaluating risks
associated with our compensation policies and practices; |
|
|
|
|
● |
reviewing
and approving, or recommending for approval by the Board, the compensation of our CEO and our other executive officers; |
|
|
|
|
● |
overseeing
and administering our cash and equity incentive plans; |
|
|
|
|
● |
reviewing
and making recommendations to the Board of Directors with respect to non-employee director compensation; |
|
|
|
|
● |
reviewing
and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required; and |
|
|
|
|
● |
preparing
the annual compensation committee report, to the extent required by SEC rules. |
The
Compensation Committee generally considers the Chief Executive Officer’s recommendations when making decisions regarding the compensation
of executive officers (other than the Chief Executive Officer). Pursuant to the Compensation Committee’s charter, which is available
on the Investors page of our website at www.indaptusrx.com, the Compensation Committee has the authority to retain or obtain the
advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. In 2022, the Compensation
Committee engaged Radford/AON, a compensation consulting firm (“Radford”), to assist in making decisions regarding the amount
and types of compensation to provide our executive officers and non-employee directors. Radford reports directly to the Compensation
Committee. The Compensation Committee has considered the adviser independence factors required under SEC rules as they relate to Radford
and has determined that Radford’s work does not raise a conflict of interest.
The
Compensation Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to
time. The Compensation Committee may also delegate to an officer the authority to grant equity awards to certain employees, as further
described in its charter and subject to the terms of our equity plans.
The
members of our Compensation Committee are Mr. Maddaluna and Mr. Hayes. Mr. Maddaluna serves as the Chairperson of the Compensation Committee.
Each member of the Compensation Committee qualifies as an independent director under Nasdaq’s heightened independence standards
for members of a compensation committee and as a “non-employee director” as defined in Rule 16b-3 of the Exchange Act.
The
Compensation Committee met one time in 2022.
Nominating
Committee
Our
Nominating Committee’s responsibilities include:
|
● |
identifying
individuals qualified to become Board members; |
|
|
|
|
● |
recommending
to the Board the persons to be nominated for election as directors and to each Board committee; |
|
|
|
|
● |
reviewing
with the Chief Executive Officer and making recommendations to the Board with respect to our succession plans for the Chief Executive
Officer and other executive officers; |
|
|
|
|
● |
reviewing
and making recommendations to the Board the composition and chairperson of each Board committee; and |
|
|
|
|
● |
overseeing
the evaluation of the Board and its committees. |
The
Nominating Committee charter is available on the Investors page of our website at www.indaptusrx.com. The members of our Nominating
Committee are Ms. Karah, Mr. Maddaluna and Mr. O’Callaghan. Mr. O’Callaghan serves as the Chairperson of the Nominating Committee.
The Nominating Committee has the authority to consult with outside advisors or retain search firms to assist in the search for qualified
candidates or consider director candidates recommended by our stockholders.
The
Nominating Committee did not have any meetings in 2022.
Science
and Technology Committee
Our
Science and Technology Committee’s responsibilities include:
|
● |
reviewing
and advising on our drug development strategy, including the selection of therapeutic targets, the design and execution of clinical
trials, and the regulatory pathway for approval; |
|
|
|
|
● |
assessing
our research pipeline and recommending changes or improvements to ensure a sustainable and diverse portfolio of drug candidates; |
|
|
|
|
● |
evaluating
our intellectual property strategy and overseeing the implementation of appropriate measures to protect our discoveries and inventions;
and |
|
|
|
|
● |
reviewing
our manufacturing strategy and overseeing the quality controls put in place to meet regulatory requirements. |
The
members of our Science and Technology Committee are Dr. Gilbert, Mr. Maddaluna, Dr. Martell, and Dr. Newman, and Dr. Newman serves as
the Chairperson of the Science and Technology Committee.
The
Science and Technology Committee held two meetings in 2022.
EXECUTIVE
COMPENSATION
Our
named executive officers for 2022, which consist of our principal executive officer and the next two most-highly compensated executive
officers who were serving as executive officers as of December 31, 2022. are:
|
● |
Jeffrey
A. Meckler, Chief Executive Officer and Director; |
|
|
|
|
● |
Walt.
A. Linscott, Esq., Chief Operating Officer; and |
|
|
|
|
● |
Boyan
Litchev, M.D., former Chief Medical Officer. |
Summary
Compensation Table
The
following table sets forth all of the compensation awarded to, earned by or paid to our named executive officers during 2022 and 2021.
Name
and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards ($) | | |
Option
Awards (1) ($) | | |
Non-equity
Incentive Plan Compensation | | |
All
Other Compensation (2) ($) | | |
Total
($) | |
Jeffrey
A. Meckler, | |
| 2022 | | |
| 552,000 | | |
| — | | |
| — | | |
| 792,210 | | |
| 276,000 | | |
| 60,322 | | |
| 1,680,532 | |
Chief
Executive Officer(3) | |
| 2021 | | |
| 540,000 | | |
| 200,000 | | |
| — | | |
| 2,635,157 | | |
| 166,698 | | |
| 52,139 | | |
| 3,593,994 | |
Walt
A. Linscott, Esq., | |
| 2022 | | |
| 405,000 | | |
| — | | |
| — | | |
| 181,614 | | |
| 202,500 | | |
| 59,130 | | |
| 848,244 | |
Chief
Operating Officer(3) | |
| 2021 | | |
| 366,541 | | |
| 175,000 | | |
| — | | |
| 1,475,688 | | |
| 126,299 | | |
| 51,287 | | |
| 2,194,815 | |
Boyan
Litchev, M.D., | |
| 2022 | | |
| 391,193 | | |
| 75,000 | (4) | |
| — | | |
| 361,484 | | |
| 125,000 | | |
| 324,990 | | |
| 1,277,667 | |
Former
Chief Medical Officer | |
| 2021 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
(1)
The amounts reported do not reflect the amounts actually received by our named executive officers. Instead, in accordance with SEC rules,
these amounts reflect the grant date fair value of stock options granted to our named executive officers during the fiscal years ended
December 31, 2022 and 2021, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic
718 for stock-based compensation transaction. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 6 to our consolidated
financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on
March 17, 2023. Our named executive officers who have received options will only realize compensation with regard to these options to
the extent the trading price of our common stock is greater than the exercise price of such options.
(2)
For 2022 and 2021, referenced amount is for the Company paid portion of medical premiums and life insurance. For Dr. Litchev for 2022,
the referenced amount also includes severance payments in the amount of $212,500, Company-paid medical premiums following his termination
of employment on December 31, 2022 as part of his severance package in the amount of $31,978 and $20,390, representing the total value
of the accrued but unused paid time off paid to Dr. Litchev in connection with his termination of employment, as described below under
the section titled “Litchev Separation Agreement”.
(3)
Compensation amounts in 2021 include compensation as an executive officer of Intec Israel prior to the Merger and Domestication Merger.
(4)
Represents a signing bonus paid to Dr. Litchev in connection with his commencement of employment.
Narrative
Description to Summary Compensation Table
Base
Salaries
In
general, base salaries for our named executive officers are initially established through arm’s length negotiation at the time
the executive is hired, taking into account such executive’s qualifications, experience and prior salary. Base salaries of our
named executive officers are approved and reviewed annually by our Compensation Committee or Board of Directors and adjustments to base
salaries are based on the scope of an executive’s responsibilities, individual contribution, prior experience and sustained performance.
Decisions regarding salary increases may take into account an executive officer’s current salary, equity ownership, and the amounts
paid to an executive officer’s peers inside our company by conducting an internal analysis, which compares the pay of an executive
officer to other members of the management team. Base salaries are also reviewed in the case of promotions or other significant changes
in responsibility. Base salaries are not automatically increased if the Board of Directors and Compensation Committee believe that other
elements of the named executive officer’s compensation are more appropriate in light of our stated objectives. This strategy is
consistent with our intent of offering compensation that is both cost-effective, competitive and contingent on the achievement of performance
objectives.
The
actual base salaries paid to all of our named executive officers for 2022 are set forth in the “Summary Compensation Table”
above.
In
January 2022, our Compensation Committee approved a base salary increase for Mr. Meckler to $552,000, which represented an adjustment
of approximately 2.2%. Mr. Linscott did not receive a salary increase in 2022. In February 2023, our Compensation Committee approved
base salary increases for 2023 for Mr. Meckler and Mr. Linscott to $565,000 and $425,000, respectively. These base salary increases represented
adjustments of approximately 2.4% and 4.9%, respectively. Pursuant to his employment agreement, effective January 31, 2022, Dr. Litchev’s
base salary for 2022 was $425,000, prorated for the portion of the year he actually served as our Chief Medical Officer. Dr. Litchev’s
employment with the Company terminated on December 31, 2022.
Annual
Cash Performance Bonuses
Each
named executive officer is also eligible for a performance bonus based upon the achievement of certain corporate performance goals and
objectives approved by our Compensation Committee and Board of Directors.
Bonuses
are set based on a percentage of the executive’s base salary as of the end of the bonus year and are expected to be paid out in
the first quarter of the following year. The target levels for 2022 executive bonuses were as follows: 50% for our Mr. Meckler, 50% for
Mr. Linscott, and 40% for Dr. Litchev. All final bonus payments to our named executive officers are determined by our Compensation Committee
or our Board of Directors. The actual bonuses awarded in any year, if any, may be more or less than the target, depending on individual
performance and the achievement of corporate objectives and may also vary based on other factors at the discretion of the Compensation
Committee.
For
2022, the corporate performance objectives for our named executive officers were related to clinical milestones, research and development
goals, business development opportunities, financing objectives and human capital management objectives. These performance objectives
and areas of emphasis were used as a guide by the Compensation Committee and Board of Directors in determining overall corporate performance
for these executives as they represented those areas in which they were expected to focus their efforts during the year. Both qualitative
and quantitative guidelines were established for purposes of evaluating performance relating to these corporate objectives during 2022.
Based on its review of our overall performance relative to our corporate objectives, the Compensation Committee determined to award a
corporate achievement level of 100% for annual bonus plan purposes.
The
overall achievement level was then used to determine each named executive officer’s bonus. The bonuses paid to our named executive
officers for 2022 are set forth in the “Summary Compensation Table” above.
Equity
Compensation
The
goals of our long-term, equity-based incentive awards are to align the interests of our named executive officers and other employees,
non-employee directors and consultants with the interests of our stockholders. Because vesting is based on continued employment, our
equity-based incentives also encourage the retention of our named executive officers through the vesting period of the awards. In determining
the size of the long-term equity incentives to be awarded to our named executive officers, we take into account a number of internal
factors, such as the relative job scope, the value of existing long-term incentive awards, individual performance history, prior contributions
to us and the size of prior grants.
To
reward and retain our named executive officers in a manner that best aligns employees’ interests with stockholders’ interests,
we use stock options as the primary incentive vehicles for long-term compensation. We believe that stock options are an effective tool
for meeting our compensation goal of increasing long-term stockholder value by tying the value of the stock options to our future performance.
Because employees are able to profit from stock options only if our stock price increases relative to the stock option’s exercise
price, we believe stock options provide meaningful incentives to employees to achieve increases in the value of our stock over time.
The
exercise price of each stock option grant is the fair market value of our common stock on the grant date, as determined by our Board
of Directors from time to time. Stock option awards granted to our named executive officers generally vest as to one-third of the total
shares on the first anniversary of the grant date and thereafter the remaining shares vest in equal quarterly installments over the following
24 months. From time to time, our Compensation Committee may, however, determine that a different vesting schedule is appropriate.
In
January 2022, Mr. Meckler and Mr. Linscott were granted stock options to purchase 200,000 shares and 45,850 shares of our common stock,
respectively. The stock options vest as to one-third of the total shares on January 26, 2023 and thereafter the remaining shares vest
in equal quarterly installments over the following 24 months. In January 2023, Mr. Meckler and Mr. Linscott were granted stock options
to purchase 100,000 shares and 40,000 shares of our common stock, respectively. The stock options vest as to one-third of the total shares
on January 18, 2024 and thereafter the remaining shares vest in equal quarterly installments over the following 24 months. Pursuant to
his employment agreement, Dr. Litchev was granted a stock option to purchase 90,000 shares of the Company’s common stock, with
one-third of such shares vesting on the first anniversary of the effective date of his employment with the Company and the remaining
shares vesting in equal monthly installments over the next two years; however, these stock options were forfeited upon the termination
of his employment with the Company on December 31, 2022.
We
have had no program, plan or practice pertaining to the timing of stock option grants to named executive officers coinciding with the
release of material non-public information. Stock options granted to our named executive officers may be subject to accelerated vesting
in certain circumstance. For additional discussion, please see “Employment Agreements and Potential Payments on Employment Termination”
below.
Other
Elements of Compensation
Retirement
Plans
Effective
January 1, 2023, we maintain a 401(k) retirement savings plan that allows eligible employees to contribute a portion of their compensation,
within limits prescribed by the Internal Revenue Code, on a pre-tax basis through contributions to the plan. Our named executive officers
are eligible to participate in the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k)
plan adds to the overall desirability of our executive compensation package and further incentivizes our named executive officers in
accordance with our compensation policies.
Employee
Benefits and Perquisites
Our
named executive officers are eligible to participate in our health and welfare plans. We pay for the health and welfare benefits of our
named executive officers. We do not provide our named executive officers with any other significant perquisites or other personal benefits.
No
Tax Gross-Ups
We
do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation
paid or provided by our company.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information concerning outstanding option awards as of December 31, 2022, for each named executive officer:
Option
Awards
Name | |
Grant
Date | | |
Number
of Securities Underlying Unexercised Options Exercisable (#) | | |
Number
of Securities Underlying Unexercised Options Unexercisable (#) | | |
Option
Exercise Price ($) | | |
Option
Expiration Date(1) |
Jeffrey A. Meckler, Chief Executive
Officer | |
| 04/10/17 | | |
| 1,500 | | |
| — | | |
| 425.6 | | |
04/10/27 |
| |
| 05/01/17 | | |
| 813 | | |
| — | | |
| 425.6 | | |
05/01/27 |
| |
| 12/11/17 | | |
| 4,750 | | |
| — | | |
| 536.0 | | |
12/11/27 |
| |
| 06/28/18 | | |
| 1,250 | | |
| — | | |
| 355.2 | | |
06/28/25 |
| |
| 04/04/19 | | |
| 1,562 | | |
| — | | |
| 611.2 | | |
04/04/26 |
| |
| 07/15/20 | (2) | |
| 2,812 | | |
| 938 | | |
| 24.6 | | |
07/15/27 |
| |
| 08/04/21 | (3) | |
| 218,750 | | |
| 156,250 | | |
| 8.87 | | |
8/4/2031 |
| |
| 01/26/22 | (4) | |
| — | | |
| 200,000 | | |
| 4.90 | | |
01/26/32 |
Walt A. Linscott, Esq., Chief Operating Officer | |
| 10/23/17 | | |
| 750 | | |
| — | | |
| 684.8 | | |
10/23/27 |
| |
| 12/11/17 | | |
| 1,750 | | |
| — | | |
| 684.8 | | |
12/11/27 |
| |
| 01/22/19 | | |
| 1,125 | | |
| — | | |
| 610.4 | | |
01/22/26 |
| |
| 09/13/19 | | |
| 2,500 | | |
| — | | |
| 72.0 | | |
09/13/26 |
| |
| 02/17/20 | (5) | |
| 1,031 | | |
| 94 | | |
| 34.3 | | |
02/17/27 |
| |
| 09/16/20 | | |
| 1,250 | | |
| — | | |
| 25.7 | | |
09/16/27 |
| |
| 08/04/21 | (3) | |
| 87,500 | | |
| 122,500 | | |
| 8.87 | | |
8/4/2031 |
| |
| 01/26/22 | (4) | |
| — | | |
| 45,850 | | |
| 4.90 | | |
01/26/32 |
Boyan Litchev, M.D., Former Chief Medical Officer | |
| 02/01/22 | (6) | |
| — | | |
| 90,000 | | |
| 4.97 | | |
02/01/32 |
(1)
The options have a seven-year term or ten-year term as noted in the table subject to earlier expiration upon termination.
(2)
The options vest over a period of three years from July 15, 2020, 33.3% on the first anniversary of such date and 8.33% every three months
thereafter, ending July 15, 2023.
(3)
The options vest over a period of three years from August 4, 2021, 33.3% on the first anniversary of such date and 8.33% every three
months thereafter, ending August 4, 2024.
(4)
The options vest over a period of three years from January 26, 2022, 33.3% on the first anniversary of such date and 8.33% every three
months thereafter, ending January 26, 2025.
(5)
The options vest over a period of three years from February 17, 2020, 33.3% on the first anniversary of such date and 8.33% every three
months thereafter, ending February 17, 2023.
(6)
All of Dr. Litchev’s options were forfeited in connection with the termination of his employment with the Company on December 31,
2022.
Employment
Agreements and Potential Payments on Employment Termination
Set
forth below is a description of the employment agreements with our named executive officers and a summary of the benefits that would
be payable upon termination of employment or in connection with a change in control to our named executive officers under their employment
agreements with us. Because Dr. Litchev’s employment with the Company terminated effective December 31, 2022, the severance benefits
to which he is entitled under his separation agreement with the Company is described below under section titled “Litchev Separation
Agreement”.
Jeffrey
A. Meckler
We
have entered into an employment agreement with Jeffrey A. Meckler (the “Meckler Employment Agreement”), which superseded
and replaced his employment agreement dated December 11, 2017 with Intec Pharma, Inc., a subsidiary of Intec Israel, to serve as our
Chief Executive Officer. The Meckler Employment Agreement provides for an annual base salary, subject to review for an upward adjustment
on at least an annual basis. Mr. Meckler is eligible to participate in an annual executive bonus plan, pursuant to which he may earn
an annual target bonus of up to 50% of his base salary, based on the achievement of certain individual and company-wide objectives, which
shall be established by our Board of Directors on an annual basis. The Board may, in its discretion, grant Mr. Meckler a bonus in excess
of the target bonus if the performance criteria are exceeded or for such additional contributions that the Board may choose to recognize.
Upon
termination of Mr. Meckler’s employment by us without cause or Mr. Meckler’s resignation for good reason, Mr. Meckler will
be entitled to a severance benefit equal to (i) twelve months of his base salary as in effect prior to the termination date, payable
in bi-monthly installments and (ii) an amount equal to Mr. Meckler’s cost of continued health insurance coverage for twelve months.
In addition, if Mr. Meckler is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance
goals (and ignoring any continuation of employment requirements), Mr. Meckler (or his representatives) shall be entitled to receive such
bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage
of days Mr. Meckler was employed relative to the total number of days in the bonus earning period.
If
Mr. Meckler’s employment is terminated by us without cause or by Mr. Meckler for good reason during the one year period immediately
following a change in control or six months before a change in control, then Mr. Meckler will be entitled to receive, (i) eighteen months
of his base salary as in effect prior to the termination date, payable in bi-monthly installments, (ii) an amount equal to Mr. Meckler’s
cost of continued health insurance coverage for eighteen months, (iii) his target annual bonus for the year of termination, which shall
be paid within 30 days of termination, and (iv) full accelerated vesting of all of outstanding equity incentive awards upon the later
of the change in control or Mr. Meckler’s termination of employment.
In
the event that Mr. Meckler’s employment terminates by reason of his death or disability, and Mr. Meckler is entitled to receive
a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment
requirements), Mr. Meckler (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants
in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Meckler was employed relative to
the total number of days in the bonus earning period.
Walt
A. Linscott, Esq.
We
have entered into an employment agreement with Walt A. Linscott, Esq. (the “Linscott Employment Agreement”), which supersedes
and replaces his employment agreement dated October 23, 2017 with Intec Pharma, Inc., a subsidiary of Intec Israel. The Linscott Employment
Agreement provides for an annual base salary, subject to review for an upward adjustment on at least an annual basis. Mr. Linscott is
eligible to participate in an annual executive bonus plan, pursuant to which he may earn an annual target bonus of up to 50% of his base
salary, based on the achievement of certain individual and company-wide objectives, which shall be established by the Company’s
Board of Directors on an annual basis. The Board may, in its discretion, grant Mr. Linscott a bonus in excess of the target bonus if
the performance criteria are exceeded or for such additional contributions that the Board may choose to recognize.
Upon
termination of Mr. Linscott’s employment by us without cause or Mr. Linscott’s resignation for good reason, Mr. Linscott
will be entitled to a severance benefit equal to (i) twelve months of his base salary as in effect prior to the termination date, payable
in bi-monthly installments and (ii) an amount equal to Mr. Linscott’s cost of continued health insurance coverage for twelve months.
In addition, if Mr. Linscott is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance
goals (and ignoring any continuation of employment requirements), Mr. Linscott (or his representatives) shall be entitled to receive
such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the
percentage of days Mr. Linscott was employed relative to the total number of days in the bonus earning period.
If
Mr. Linscott’s employment is terminated by us without cause or by Mr. Linscott for good reason during the one year period immediately
following a change in control or six months before a change in control, then Mr. Linscott will be entitled to receive, (i) eighteen months
of his base salary as in effect prior to the termination date, payable in bi-monthly installments, (ii) an amount equal to Mr. Linscott’s
cost of continued health insurance coverage for eighteen months, (iii) his target annual bonus for the year of termination, which shall
be paid within 30 days of termination, and (iv) full accelerated vesting of all of outstanding equity incentive awards upon the later
of the change in control or Mr. Linscott’s termination of employment.
In
the event that Mr. Linscott’s employment terminates by reason of his death or disability, and Mr. Linscott is entitled to receive
a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment
requirements), Mr. Linscott (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants
in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Linscott was employed relative
to the total number of days in the bonus earning period.
Litchev
Separation Agreement
We
previously entered into an employment agreement with Boyan Litchev, M.D. (the “Litchev Employment Agreement”), who served
as our Chief Medical Officer from January 31, 2022 through December 31, 2022. The Litchev Employment Agreement provided for an annual
base salary of $425,000, subject to review for an upward adjustment on at least an annual basis. Under the Litchev Employment Agreement,
Dr. Litchev was eligible to participate in an annual executive bonus plan, pursuant to which he may earn an annual target bonus of up
to 40% of his base salary, based on the achievement of certain individual and company-wide objectives, which shall be established by
the Company’s Board of Directors on an annual basis. Dr. Litchev was also awarded a one-time signing bonus of $75,000, provided
that, in the event Dr. Litchev resigned without good reason or was terminated for cause at any time prior to the one-year anniversary
of the effective date of the Litchev Employment Agreement, Dr. Litchev was obligated to repay the signing bonus.
In
connection with the termination of Dr. Litchev’s employment with the Company effective December 31, 2022, the Company and Dr. Litchev
entered into a separation agreement (the “Litchev Separation Agreement”) pursuant to which Dr. Litchev agreed to a general
release of claims in exchange for certain severance benefits. Under the Litchev Separation Agreement, Dr. Litchev is entitled to (i)
continued payment of his base salary for 6 months following the date of termination, (ii) a cash lump-sum payment of $125,000 representing
his 2022 bonus as determined by the Board of Directors, and (iii) reimbursement of health insurance premiums until the earlier of (a)
6 months from the date of termination, or (b) the date upon which he becomes covered under similar plans of a subsequent employer.
Equity
Compensation Plans
The
following table gives information as of December 31, 2022 about shares of our common stock that may be issued upon the exercise of options
under the Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan (the “2021 Plan”):
Plan
Category | |
Number
of securities to be issued upon exercise of outstanding options, warrants and rights(1) | | |
Weighted-average
exercise price of outstanding options, warrants and rights | | |
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | |
Equity compensation
plan approved by security holders(2) | |
| 1,672,873 | | |
$ | 13.01 | | |
| 314,494 | |
Equity compensation plans not approved by security
holders | |
| — | | |
| — | | |
| — | |
(1)
Represents stock options outstanding under the 2021 Plan.
(2)
Our 2021 Plan has an evergreen provision that allows for an annual increase on each January 1 beginning on January 1, 2022 and ending
on and including January 1, 2024, equal to the lesser of (A) 3% of the aggregate number of shares of our shares of common stock outstanding
on the final day of the immediately preceding calendar year or (B) such smaller number of shares as is determined by our Board of Directors.
Pay
Versus Performance Table
The
following table sets forth information concerning the compensation of our named executive officers, or NEOs, the compensation actually
paid to our NEOs, as determined under SEC rules (and described below), our total shareholder return and our net loss, in each case for
each of the fiscal years ended December 31, 2021 and 2022:
(a) | | |
(b) | | |
(c) | | |
(d) | | |
(e) | | |
(f) | | |
(h) | |
| | |
| | |
| | |
| | |
| | |
Value
of Initial Fixed $100 Investment Based on: | | |
| |
Year | | |
| Summary
Compensation Table Total for PEO ($) | | |
| Compensation
Actually Paid to PEO ($)(1) | | |
| Average
Summary Compensation Table Total for Non-PEO NEOs ($) | | |
| Average
Compensation Actually Paid to Non-PEO NEOs ($)(1) | | |
| Total
Shareholder Return ($) | | |
| Net
Loss ($) | |
2022 | | |
$ | 1,680,532 | | |
$ | (38,385 | ) | |
$ | 1,062,955 | | |
$ | 500,074 | | |
$ | 41 | | |
$ | (14,322,798 | ) |
2021 | | |
$ | 3,593,994 | | |
$ | 2,537,836 | | |
$ | 2,349,869 | | |
$ | 1,647,534 | | |
$ | 25 | | |
$ | (7,711,386 | ) |
(1) |
Amounts
represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant
fiscal year, as determined under SEC rules, which includes the individuals indicated in the table below for each fiscal year: |
Year | | |
PEO | |
Non-PEO
NEOs |
2022 | | |
Jeffrey A. Meckler | |
Walt A. Linscott, Esq. and Boyan Litchev, M.D. |
2021 | | |
Jeffrey A. Meckler | |
Walt A. Linscott, Esq. and Michael J. Newman,
Ph.D. |
The
amounts reported in the “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs”
columns do not reflect the actual compensation paid to or realized by our PEO or our non-PEO NEOs during each applicable year. The calculation
of compensation actually paid for purposes of this table includes point-in-time fair values of stock awards and these values will fluctuate
based on our stock price and various accounting valuation assumptions. See the Summary Compensation Table for certain other compensation
of our PEO and our non-PEO NEOs for each applicable fiscal year.
Compensation
actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable
fiscal year, as adjusted as follows:
| |
2021 | | |
2022 | |
Adjustments | |
PEO | | |
Average
Non-PEO NEOs | | |
PEO | | |
Average
Non-PEO NEOs | |
Deduction
for Amounts Reported under the “Stock Awards” and “Option Awards”
Columns in the Summary Compensation Table for Applicable FY | |
$ | (2,635,157 | ) | |
$ | (1,756,771 | ) | |
$ | (792,210 | ) | |
$ | (271,549 | ) |
Increase
based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as
of Applicable FY End, determined as of Applicable FY End | |
| 1,596,462 | | |
| 1,064,308 | | |
| 194,807 | | |
| 22,330 | |
Deduction
for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY
End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY
End | |
| (14,991 | ) | |
| (6,741 | ) | |
| (757,464 | ) | |
| (211,478 | ) |
Deduction
for Awards Granted during Prior FY that Vested During Applicable FY, determined based on
change in ASC 718 Fair Value from Prior FY End to Vesting Date | |
| (2,472 | ) | |
| (3,131 | ) | |
| (364,050 | ) | |
| (102,184 | ) |
TOTAL
ADJUSTMENTS | |
$ | (1,056,158 | ) | |
$ | (702,335 | ) | |
$ | (1,718,917 | ) | |
$ | (562,881 | ) |
Fair
value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined
by reference to a Black Scholes value as of the applicable year-end or vesting date(s), determined based on the same methodology as used
to determine grant date fair value but using the closing stock price on the applicable revaluation date as the current market price and
with an estimated expected life using the simplified method, and in all cases based on volatility and risk free rates determined as of
the revaluation date based on the expected life period and based on an expected dividend rate of 0%. For additional information on the
assumptions used to calculate the valuation of the awards, see Note 6 to our consolidated financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 17, 2023, and our Annual Reports on Form
10-K for prior fiscal years.
Narrative
Disclosure to Pay Versus Performance Table
Relationship
Between Financial Performance Measures
The
graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs,
with our cumulative TSR for the fiscal years ended December 31, 2021 and 2022.
TSR
amounts reported in the graph assume an initial fixed investment of $100. We do not pay dividends.
The
graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs,
with our net loss for the fiscal years ended December 31, 2021 and 2022.
DIRECTOR
COMPENSATION
The
following table provides certain information concerning the compensation for services rendered in all capacities by each non-employee
director serving on our Board during the year ended December 31, 2022, other than Mr. Meckler, our Chief Executive Officer, who did not
receive additional compensation for his service as a director and whose compensation is set forth in the Summary Compensation Table under
the section entitled Executive Compensation above. Dr. Newman, our Chief Scientific Officer, is also an employee and executive officer,
who did not receive additional compensation for his service as a director. Dr. Newman is not one of our NEOs for 2022 and so he does
not appear in the Summary Compensation Table. Because Dr. Newman is an employee and an executive officer, he is not required to be included
in the table below.
Name | |
Fees
earned ($) | | |
Stock
awards ($) | | |
Option
awards ($)(1) | | |
All
other compensation ($) | | |
Total ($) | |
Roger J. Pomerantz | |
| 150,000 | | |
| — | | |
| 144,233 | | |
| — | | |
| 294,233 | |
Hila Karah | |
| 62,500 | | |
| — | | |
| 24,341 | | |
| — | | |
| 86,841 | |
Anthony J. Maddaluna | |
| 65,000 | | |
| — | | |
| 24,341 | | |
| — | | |
| 89,341 | |
William B. Hayes | |
| 71,000 | | |
| — | | |
| 24,341 | | |
| — | | |
| 95,341 | |
Brian O’Callaghan | |
| 65,500 | | |
| — | | |
| 24,341 | | |
| — | | |
| 89,841 | |
Mark Gilbert, M.D. | |
| 50,000 | | |
| — | | |
| 24,341 | | |
| 60,000 | (2) | |
| 134,341 | |
(1)
The amounts reported do not reflect the amounts actually received by our non-employee directors. Instead, in accordance with SEC rules,
these amounts reflect the grant date fair value of stock options granted to our non-employee directors during the fiscal year ended December
31, 2022, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for stock-based
compensation transaction. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based
vesting conditions. Assumptions used in the calculation of these amounts are included in Note 6 to our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 17, 2023. Our
non-employee directors who have received options will only realize compensation with regard to these options to the extent the trading
price of our common stock is greater than the exercise price of such options. As of December 31, 2022, our non-employee directors held
the following numbers of stock options: Dr. Pomerantz, 123,000 stock options; Ms. Karah 28,781 stock options, Mr. Maddaluna 28,500 stock
options, Mr. Hayes 28,500 stock options, Mr. O’Callaghan 48,426 stock options, and Dr.Gilbert 33,750 stock options.
(2)
Represents quarterly retainer fees paid to Dr. Gilbert for consultation services.
Pursuant
to our director compensation policy, the annual retainer for non-employee directors is $50,000 and the annual retainer for the chair
of the Board of Directors is $150,000. Annual retainers for committee membership are as follows:
Audit committee chairperson | |
$ | 15,000 | |
Audit committee member | |
$ | 7,500 | |
Compensation committee chairperson | |
$ | 10,000 | |
Compensation committee member | |
$ | 6,000 | |
Nominating committee chairperson | |
$ | 8,000 | |
Nominating committee member | |
$ | 5,000 | |
Scientific and technology committee chairperson | |
$ | 8,000 | |
Scientific and technology committee member | |
$ | 4,000 | |
These
fees are payable in advance in four equal quarterly installments during the first week of each quarter, provided that the amount of such
payment will be prorated for any portion of such quarter that a director is not serving on our Board of Directors, on such committee
or in such position. Non-employee directors are also reimbursed for reasonable out-of-pocket business expenses incurred in connection
with attending meetings of the Board of Directors and any committee of the Board of Directors on which they serve and in connection with
other business related to the Board of Directors. Directors may also be reimbursed for reasonable out-of-pocket business expenses authorized
by the Board of Directors or a committee that are incurred in connection with attending conferences or meetings with management in accordance
with a travel policy, as may be in effect from time to time.
On
the date of the annual meeting of stockholders for 2022, each non-employee director (other than the board chair) received a grant of
13,750 stock options, and the board chair received a grant of 81,000 stock options, as determined by our Compensation Committee. The
stock options vest in full on the first anniversary of the grant date, subject to continued service on the Board and the options shall
also vest in full immediately upon a change of control.
In
March 2023, the Board amended our director compensation policy to provide that, on the date an individual is first elected or appointed
as a non-employee director, such individual will receive a grant of 25,000 stock options, and that, on the date of each annual meeting
of stockholders, commencing with the annual meeting of stockholders for 2023, each non-employee director (other than the board chair)
will receive a grant of 12,500 stock options and the board chair will receive 30,000 stock options. The initial stock options vest in
over three years from the grant date in equal quarterly installments, subject to continued service on the Board and the options shall
also vest in full immediately upon a director’s death, disability or a change of control. The annual stock options vest in full
on the first anniversary of the grant date, subject to continued service on the Board and the options shall also vest in full immediately
upon a director’s death, disability or a change of control.
On
February 13, 2023, the Board of Directors increased its size to provide for a total of nine directors authorized to serve on the Board
and appointed Robert Martell, M.D., Ph.D. as a director of the Company. Dr. Martell is eligible to participate in the Company’s
non-employee director compensation policy, including receipt of an annual retainer of $50,000 for his Board service, an initial award
of an option to purchase 20,000 shares of the Company’s common stock. In connection with his election to the Board, Dr. Martell
received an initial equity award having an exercise price equal to $1.71 per share, which vests on February 13, 2024, subject to Dr.
Martell’s continued service on the Board.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information with respect to holdings of our common stock by (i) stockholders who beneficially owned
more than 5% of the outstanding shares of our common stock, and (ii) each of our directors (which includes all nominees), each of our
named executive officers and all directors and executive officers as a group as of March 31, 2023, unless otherwise indicated. The number
of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, beneficial ownership
includes any shares as to which a person has sole or shared voting power or investment power. Applicable percentage ownership is based
on 8,401,047 shares of common stock outstanding as of March 31, 2023. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common stock subject to options, or other rights held by such person that are
currently exercisable or will become exercisable within 60 days of March 31, 2023 are considered outstanding, although these shares are
not considered outstanding for purposes of computing the percentage ownership of any other person.
Unless
otherwise indicated, the address of each beneficial owner listed below is 3 Columbus Circle, 15th Floor, New York, NY 10019.
We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with
respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.
Name
of Beneficial Owner | |
Number
of Shares Beneficially Owned | | |
Percentage
of Shares Beneficially Owned | |
Persons or entities
holding 5% or more our outstanding common stock | |
| | |
| |
Glen R. Anderson | |
| 1,087,048 | (1) | |
| 12.9 | % |
Named executive officers
and directors | |
| | | |
| | |
Jeffrey A. Meckler | |
| 390,773 | (2) | |
| 4.7 | % |
Michael J. Newman, Ph.D. | |
| 1,555,585 | (3) | |
| 18.5 | % |
Walt A. Linscott, Esq.. | |
| 150,257 | (4) | |
| 1.8 | % |
Boyan Litchev, M.D.** | |
| 1,150 | (5) | |
| * | |
Hila Karah | |
| 14,990 | (6) | |
| * | |
Anthony J. Maddaluna | |
| 15,378 | (7) | |
| * | |
William B. Hayes | |
| 14,708 | (8) | |
| * | |
Dr. Roger J. Pomerantz | |
| 14,625 | (9) | |
| * | |
Brian O’Callaghan | |
| 34,676 | (10) | |
| * | |
Mark Gilbert, M.D. | |
| 20,000 | (11) | |
| * | |
Robert E. Martell, M.D., Ph.D. | |
| - | | |
| * | |
All executive officers
and directors as a group (11 persons) | |
| 2,278,596 | (12) | |
| 27.1 | % |
* |
Less
than one percent. |
|
|
** |
Effective
as of December 31, 2022, Dr. Litchev’s employment with us was terminated. |
|
|
(1) |
Based
solely upon a Schedule 13G filed on July 7, 2022, 973,130 shares are held by the Anderson Family Trust U/A/D January 7, 2017 in which
Glen R. Anderson is a trustee of the Anderson Family Trust and shares voting and dispositive control with his spouse, and 113,918
shares are held by Mr. Anderson over which he has sole voting and dispositive power. |
|
|
(2) |
Consists
of (i) 75,374 shares of common stock, and (ii) 315,399 shares of common stock issuable upon exercise of outstanding options, of which
47,917 will vest within 60 days of March 31, 2023. |
|
|
(3) |
Consists
of (i) 1,341,524 shares of common stock held by the Michael J. Newman Trust, dated January 21, 2008, Michael J. Newman, Trustee;
(ii) 26,832 shares of common stock held by Janet Lee Harris, Trustee of the Janet Harris Living Trust, executed on March 25, 2009.
Ms. Harris is the spouse of Dr. Newman, and as such, Dr. Newman is deemed to beneficially own such shares; and (iii) 187,229 shares
of common stock issuable upon exercise of outstanding options, of which 27,779 will vest within 60 days of March 31, 2023. |
|
|
(4) |
Consists
of (i) 150 shares of common stock and (ii) 150,107 shares of common stock issuable upon exercise of outstanding options, of which
21,321 will vest within 60 days of March 31, 2023. |
|
|
(5) |
Consists
of 1,150 shares of common stock beneficially owned by Dr. Litchev as of December 31, 2022. |
|
|
(6) |
Consists
of 14,990 shares of common stock issuable upon exercise of outstanding options. |
|
|
(7) |
Consists
of (i) 670 shares of common stock and (ii) 14,708 shares of common stock issuable upon exercise of outstanding options. |
|
|
(8) |
Consists
of 14,708 shares of common stock issuable upon exercise of outstanding options. |
|
|
(9) |
Consists
of 14,635 shares of common stock issuable upon exercise of outstanding options. |
|
|
(10) |
Consists
of 34,676 shares of common stock issuable upon exercise of outstanding options. |
|
|
(11) |
Consists
of 20,000 shares of common stock issuable upon exercise of outstanding options. |
|
|
(12)
|
Consists
of (i) 1,444,550 shares of common stock, and (ii) 834,046 shares of common stock issuable upon exercise of outstanding options, of
which 102,017 will vest within 60 days of days of March 31, 2023. |
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires our executive officers and directors and persons who beneficially own more than 10% of our common
stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. To our knowledge, based solely
on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2022 filed with the
SEC and on written representations by our directors and executive officers, all required Section 16 reports under the Exchange Act for
our directors, executive officers and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the
year ended December 31, 2022 other than: one Form 4 reporting one late transaction by our former executive officer, Boyan Litchev, M.D.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Policies
and Procedures for Related Person Transactions
In
accordance with our audit committee charter, the Audit Committee is required to approve related party transactions. In general, the Audit
Committee will review any proposed transaction that has been identified as a related person transaction under Item 404 of Regulation
S-K, which means a transaction, arrangement or relationship in which we and any related person (as defined below) are participants in
which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at fiscal
year-end for the last two completed fiscal years, and in which any related person had, has or will have a direct or indirect material
interest. A “related person” includes (i) a director, director nominee or executive officer of the Company, (ii) any immediate
family member of the foregoing, or (iii) a security holder known to be a beneficial owner of more than 5% of any class of our voting
securities.
Other
than the compensation agreements and other arrangements described under “Executive Compensation” and the transactions described
below, since January 1, 2021, there has not been and there is not currently proposed, any transaction or series of similar transactions
to which we were, or will be, a participant in which the amount involved exceeded, or will exceed, $120,000 (or, if less, 1% of the average
of our total assets at December 31, 2022 and 2021, as applicable) and in which any related person, had, or will have, a direct or indirect
material interest.
Director
and Officer Indemnification and Insurance
We
have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things,
require us or will require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including
indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive
officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services
as a director or executive officer.
We
also maintain an insurance policy that insures our directors and executive officers against certain liabilities, including liabilities
arising under applicable securities laws.
STOCKHOLDERS’
PROPOSALS
Stockholders
who intend to have a proposal considered for inclusion in our proxy materials for presentation at our 2024 Annual Meeting of Stockholders
pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Secretary at our offices at 3 Columbus Circle, 15th
Floor, New York, NY 10019 in writing not later than December 14, 2023.
Stockholders
intending to present a proposal at the 2024 Annual Meeting of Stockholders, but not to include the proposal in our proxy statement, or
to nominate a person for election as a director, must comply with the requirements set forth in our Amended and Restated Bylaws. Our
Amended and Restated Bylaws require, among other things, that our Secretary receive written notice from the stockholder of record of
their intent to present such proposal or nomination not earlier than the 120th day and not later than the 90th day prior to the anniversary
of the preceding year’s annual meeting. Therefore, we must receive notice of such a proposal or nomination for the 2024 Annual
Meeting of Stockholders no earlier than January 26, 2024 and no later than February 25, 2024. The notice must contain the information
required by the Amended and Restated Bylaws, a copy of which is available upon request to our Secretary. In the event that the date of
the 2024 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after May 25, 2024, then our Secretary must
receive such written notice not earlier than the close of business on the 120th day prior to the 2024 Annual Meeting and not later than
the close of business on the 90th day prior to the 2024 Annual Meeting or, if later, the close of business on 10th day following the
day on which public disclosure of the date of such meeting is first made by us.
In
addition to satisfying the foregoing requirements under our Amended and Restated Bylaws, to comply with the universal proxy rules, stockholders
who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth
the information required by Rule 14a-19 under the Exchange Act.
We
reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with
these or other applicable requirements.
OTHER
MATTERS
Our
Board of Directors is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above
and does not intend to bring any other matters before the Annual Meeting. However, if other matters should come before the Annual Meeting,
it is intended that holders of the proxies named on the Company’s proxy card will vote thereon in their discretion.
SOLICITATION
OF PROXIES
The
accompanying proxy is solicited by and on behalf of our Board of Directors, whose Notice of Annual Meeting is attached to this proxy
statement, and the entire cost of our solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal
interview, telephone, e-mail and facsimile by our directors, officers and other employees who will not be specially compensated for these
services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial
owners of shares held by the brokers, nominees, custodians and other fiduciaries. We will reimburse these persons for their reasonable
expenses in connection with these activities.
Certain
information contained in this proxy statement relating to the occupations and security holdings of our directors and officers is based
upon information received from the individual directors and officers.
In
connection with our solicitation of proxies for our 2024 Annual Meeting, we intend to file a proxy statement and WHITE proxy card with
the SEC. Stockholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed
with the SEC without charge from the SEC’s website at: www.sec.gov.
INDAPTUS’
ANNUAL REPORT ON FORM 10-K
A
copy of Indaptus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022, including financial statements and schedules
thereto but not including exhibits, as filed with the SEC, will be sent to any stockholder of record on March 31, 2023 without charge
upon written request addressed to:
Indaptus
Therapeutics, Inc.
Attention:
Secretary
3
Columbus Circle, 15th Floor
New
York, NY 10019
A
reasonable fee will be charged for copies of exhibits. You also may access this proxy statement and our Annual Report on Form 10-K at
www.proxyvote.com. You also may access our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 at www.indaptusrx.com.
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, WE URGE YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE
INTERNET, AS DESCRIBED IN THIS PROXY STATEMENT. IF YOU RECEIVED A COPY OF THE PROXY CARD BY MAIL, YOU MAY SIGN, DATE AND MAIL THE PROXY
CARD IN THE ENCLOSED RETURN ENVELOPE. PROMPTLY VOTING YOUR SHARES WILL ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING AND WILL
SAVE US THE EXPENSE OF FURTHER SOLICITATION.
By
Order of the Board of Directors
Nir
Sassi, Chief Financial Officer, Treasurer and Secretary
New
York, New York
April
12, 2023
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