UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
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:
| ☐ |
Preliminary Proxy Statement |
| ☐ |
Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| ☒ |
Definitive Proxy Statement |
| ☐ |
Definitive Additional Materials |
| ☐ |
Soliciting Material Under §240.14a-12 |
ORGENESIS
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):
| ☒ |
No fee required |
| ☐ |
Fee paid previously with preliminary materials |
| ☐ |
Fee computed on table in exhibit required by Item 25(b)
per Exchange Act Rules 14a-6(i)(1) and 0-11 |
ORGENESIS
INC.
20271
Goldenrod Lane
Germantown,
Maryland 20876
May
3, 2024
To
Our Stockholders:
You
are cordially invited to attend the 2024 annual meeting of stockholders of Orgenesis Inc. (the “Company”) to be held at June
27, 2024 at 10:00 a.m. EST. We have decided to hold this year’s annual meeting virtually via live audio webcast on the internet.
We believe hosting a virtual annual meeting enables greater stockholder attendance and participation from any location around the world,
improves meeting efficiency and our ability to communicate effectively with our stockholders, and reduces the cost and environmental
impact of our annual meeting. You will be able to attend the annual meeting, vote and submit your questions during the annual meeting
by first registering at www.viewproxy.com/ORGS/2024. On the day of the Annual Meeting of Stockholders, if you have properly registered,
you may enter the meeting by clicking on the link provided and the password you received via email in your registration confirmations.
You will not be able to attend the annual meeting physically.
Details
regarding the meeting, the business to be conducted at the meeting, and information about the Company that you should consider when you
vote your shares are described in the accompanying proxy statement.
At
the annual meeting, six (6) persons will be elected to our board of directors (“Board of Directors”). In addition, we will
ask stockholders to approve a proposed amendment to the 2017 Equity Incentive Plan and to ratify the appointment of Kesselman & Kesselman
C.P.A.s, a member firm of PricewaterhouseCoopers International Limited, as our independent registered public accounting firm for our
fiscal year ending December 31, 2024. Our Board of Directors
recommends the approval of each of these proposals and a vote for a frequency of voting on executive compensation every three years.
Such other business will be transacted as may properly come before the annual meeting.
Under
Securities and Exchange Commission rules that allow companies to furnish proxy materials to stockholders over the Internet, we have elected
to deliver our proxy materials to the majority of our stockholders over the Internet. This delivery process allows us to provide stockholders
with the information they need, while at the same time conserving natural resources and lowering the cost of delivery. On May 3, 2024,
we intend to begin sending to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing
instructions on how to access our proxy statement for our 2024 Annual Meeting of Stockholders and our 2023 annual report to stockholders.
The Notice also provides instructions on how to vote online or by telephone, how to access the virtual annual meeting and how to receive
a paper copy of the proxy materials by mail.
We
hope you will be able to attend the annual meeting. Whether or not you plan to attend the annual meeting, we hope you will vote promptly.
Information about voting methods is set forth in the accompanying proxy statement. Thank you for your continued support of Orgenesis
Inc. We look forward to your attendance at the annual meeting.
Sincerely,
|
/s/
Vered Caplan
|
|
| Vered Caplan |
|
| Chairperson of the Board |
|
ORGENESIS
INC.
20271
Goldenrod Lane
Germantown,
Maryland 20876
May
3, 2024
NOTICE
OF 2024 ANNUAL MEETING OF STOCKHOLDERS
ACCESS:
This year’s annual meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the annual
meeting, vote and submit your questions during the meeting by first registering at www.viewproxy.com/ORGS/2024. On the day of the Annual
Meeting of Stockholders, if you have properly registered, you may enter the meeting by clicking on the link provided and the password
you received via email in your registration confirmations. For further information about the virtual annual meeting, please see the Questions
and Answers about the Meeting beginning on page 3 of the accompanying proxy statement.
PURPOSES:
| 1. | To
elect six (6) directors to serve one-year terms expiring in 2025; |
| 2. | To
approve a proposed amendment to the 2017 Equity Incentive Plan to increase the number of
shares available for the grant of awards by 9,000,000 shares; |
| 3. | To
ratify the appointment of Kesselman & Kesselman C.P.A.s, a member firm of PricewaterhouseCoopers
International Limited, as our independent registered public accounting firm for the fiscal
year ending December 31, 2024; |
| 4. | To
transact such other business that is properly presented at the annual meeting and any adjournments
or postponements thereof. |
WHO
MAY VOTE:
You
may vote if you were the record owner of Orgenesis Inc. common stock at the close of business on May 1, 2024. A list of stockholders
of record will be available at the annual meeting and, during the 10 days prior to the annual meeting, at our principal executive offices
located at 20271 Goldenrod Lane, Germantown, MD 20876.
All
stockholders are cordially invited to attend the annual meeting. Whether you plan to attend the annual meeting or not, we urge you
to vote and submit your proxy by the Internet, telephone or mail by following the instructions in the Notice of Internet Availability
of Proxy Materials that you previously received in order to ensure the presence of a quorum. You may change or revoke your proxy
at any time before it is voted at the annual meeting. If you participate in and vote your shares at the annual meeting, your proxy will
not be used.
BY
ORDER OF OUR BOARD OF DIRECTORS
| /s/
Victor Miller |
|
| Chief Financial Officer, Treasurer and Secretary |
|
TABLE
OF CONTENTS
ORGENESIS
INC.
20271
GOLDENROD LANE
GERMANTOWN,
MARYLAND 20876
PROXY
STATEMENT FOR THE ORGENESIS INC.
2024
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 27, 2024
This
proxy statement, along with the accompanying notice of 2024 annual meeting of stockholders, contains information about the 2024 annual
meeting of stockholders of Orgenesis Inc., including any adjournments or postponements of the annual meeting. This year’s annual
meeting will be held via live audio webcast on the internet. You will be able to participate, vote and submit your questions during the
annual meeting by first registering at www.viewproxy.com/ORGS/2024. On the day of the Annual Meeting of Stockholders, if you have properly
registered, you may enter the meeting by clicking on the link provided and the password you received via email in your registration confirmations.
You will not be able to attend the annual meeting physically.
In
this proxy statement, we refer to Orgenesis Inc. as “Orgenesis,” “the Company,” “we” and “us.”
This
proxy statement relates to the solicitation of proxies by our Board of Directors for use at the annual meeting.
On
or about May 3, 2024, we intend to begin sending to our stockholders the Important Notice Regarding the Availability of Proxy Materials
containing instructions on how to access our proxy statement for our 2024 annual meeting of stockholders and our 2023 annual report to
stockholders.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 27, 2024
This
proxy statement, the Notice of Annual Meeting of Stockholders, our form of proxy card and our 2023 annual report to stockholders are
available for viewing, printing and downloading at www.iproxydirect.com/ORGS. To view these materials please have your control
number(s) available that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of
our proxy statements and annual reports to stockholders by electronic delivery.
Additionally,
you can find a copy of our Annual Report on Form 10-K, which includes our financial statements for the fiscal year ended December 31,
2023, on the website of the Securities and Exchange Commission, or the SEC, at www.sec.gov, or in the “SEC Filings”
section of the “Investors” section of our website at https://www.viewproxy.com/orgs/2024. You may also obtain
a printed copy of our Annual Report on Form 10-K, including our financial statements, free of charge, from us by sending a written request
to: Investor Relations, Orgenesis Inc., 20271 Goldenrod Lane, Germantown MD 208176. Exhibits will be provided upon written request and
payment of an appropriate processing fee.
IMPORTANT
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why
is the Company Soliciting My Proxy?
Our
Board of Directors is soliciting your proxy to vote at the 2024 annual meeting of stockholders, and any adjournments or postponements
of the meeting, which we refer to as the annual meeting, to be held at 10:00 a.m. EST on June 27, 2024. This year’s annual meeting
will be held via live audio webcast on the internet. You will be able to participate, vote and submit your questions during the annual
meeting by first registering at www.viewproxy.com/ORGS/2024 by 11:59 p.m. ET on June 25, 2024. On the day of the Annual Meeting of Stockholders,
if you have properly registered, you may enter the meeting by clicking on the link provided and the password you received via email in
your registration confirmations. If you encounter any difficulties accessing the virtual meeting during check-in or the meeting, please
call the technical support member that will be posted on the virtual shareholder meeting log-on page. We believe that a virtual meeting
will provide expanded stockholder access and participation and improved communications. You will not be able to attend the annual meeting
physically. This proxy statement, along with the accompanying Notice of Annual Meeting of Stockholders, summarizes the purposes of the
meeting and the information you need to know to vote at the annual meeting.
We
have made available to you on the Internet or have sent you this proxy statement, the Notice of Annual Meeting of Stockholders, the proxy
card and a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 because you owned shares of our common
stock on the record date. We intend to commence distribution of the Important Notice Regarding the Availability of Proxy Materials, which
we refer to throughout this proxy statement as the Notice, and, if applicable, proxy materials to stockholders on or about May 3, 2024.
Why
Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?
As
permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we may furnish our proxy materials to our stockholders
by providing access to such documents on the Internet, rather than mailing printed copies of these materials to each stockholder. Most
stockholders will not receive printed copies of the proxy materials unless they request them. We believe that this process should expedite
stockholders’ receipt of proxy materials, lower the costs of the annual meeting and help to conserve natural resources. If you
received the Notice by mail or electronically, you will not receive a printed or email copy of the proxy materials, unless you request
one by following the instructions included in the Notice. Instead, the Notice instructs you as to how you may access and review all of
the proxy materials and submit your proxy on the Internet. If you requested a paper copy of the proxy materials, you may authorize the
voting of your shares by following the instructions on the proxy card, in addition to the other methods of voting described in this proxy
statement.
Why
Are You Holding a Virtual Annual Meeting?
This
year’s annual meeting will be held in a virtual meeting format. We have designed our virtual format to enhance, rather than constrain,
stockholder access, participation and communication. For example, the virtual format allows stockholders to communicate with us in advance
of, and during, the annual meeting so they can ask questions of our Board of Directors or management, as time permits.
What
Happens if There Are Technical Difficulties during the Annual Meeting?
We
will have technicians ready to assist you with any technical difficulties you may have accessing the virtual annual meeting, voting at
the annual meeting or submitting questions at the annual meeting. If you encounter any difficulties accessing the virtual annual meeting
during the check-in or meeting time, please call 1-866-612-8937.
Who
May Vote?
Only
stockholders of record at the close of business on May 1, 2024 will be entitled to vote at the annual meeting. On this record date, there
were 34,380,280 shares of our common stock outstanding and entitled to vote. Our common stock is our only class of voting stock.
If
on May 1, 2024 your shares of our common stock were registered directly in your name with our transfer agent, Securities Transfer Corporation,
then you are a stockholder of record.
If
on May 1, 2024 your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization,
then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you by that organization.
The organization holding your account is considered to be the stockholder of record for purposes of voting at the annual meeting. As
a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are
also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote your shares at the
annual meeting unless you request and obtain a valid proxy from your broker or other agent.
You
do not need to attend the annual meeting to vote your shares. Shares represented by valid proxies, received in time for the annual meeting
and not revoked prior to the annual meeting, will be voted at the annual meeting. For instructions on how to change or revoke your proxy,
see “May I Change or Revoke My Proxy?” below.
How
Many Votes Do I Have?
Each
share of our common stock that you own entitles you to one vote.
How
Do I Vote?
Whether
you plan to attend the annual meeting or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through
this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via
the Internet or telephone. You may specify whether your shares should be voted FOR or WITHHELD for each nominee for director, and whether
your shares should be voted for, against or abstain with respect to each of the other proposals. If you properly submit a proxy without
giving specific voting instructions, your shares will be voted in accordance with our Board of Directors’ recommendations as noted
below. Voting by proxy will not affect your right to attend the annual meeting.
If
your shares are registered directly in your name through our stock transfer agent, Securities Transfer Corporation, or you have stock
certificates registered in your name, you may vote:
| ● | By
Internet or by telephone. Follow the instructions included in the Notice or, if you received
printed materials, in the proxy card to vote over the Internet or by telephone. |
| ● | By
mail. If you received a proxy card by mail, you can vote by mail by completing, signing,
dating and returning the proxy card as instructed on the card. If you sign the proxy card
but do not specify how you want your shares voted, they will be voted in accordance with
our Board of Directors’ recommendations as noted below. |
| ● | At
the meeting. You may vote your shares electronically at the virtual annual meeting. You
will need the control number(s) on your Notice or proxy card in order to vote at the meeting.
Even if you plan to attend the annual meeting virtually, we encourage you to vote in advance
so that your vote will be counted in the event you later decide not to attend. |
Telephone
and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time
on June 26, 2024.
If
your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions
from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and
Internet voting also will be offered to stockholders owning shares through certain banks and brokers. You will be able to attend the
annual meeting, vote and submit your questions during the annual meeting by first registering at www.viewproxy.com/ORGS/2024. On the
day of the Annual Meeting of Stockholders, if you have properly registered, you may enter the meeting by clicking on the link provided
and the password you received via email in your registration confirmations. For further information about the virtual annual meeting,
please see the Questions and Answers about the Meeting beginning on page 3 of the accompanying proxy statement.
How
Does Our Board of Directors Recommend that I Vote on the Proposals?
Our
Board of Directors recommends that you vote as follows:
| ● | “FOR”
the election of the nominees for director; |
| ● | “FOR”
the approval of the amendment to the 2017 Equity Incentive Plan; and |
| ● | “FOR”
the ratification of the appointment of Kesselman & Kesselman C.P.A.s, a member firm of
PricewaterhouseCoopers International Limited, as our independent registered public accounting
firm for our fiscal year ending December 31, 2024. |
If
any other matter is presented at the annual meeting, your proxy provides that your shares will be voted by the proxy holder listed in
the proxy in accordance with his or her best judgment. At the time this proxy statement was first made available, we knew of no matters
that needed to be acted on at the annual meeting, other than those discussed in this proxy statement.
May
I Change or Revoke My Proxy?
If
you give us your proxy, you may change or revoke it at any time before the annual meeting. You may change or revoke your proxy in any
one of the following ways:
| ● | if
you received a proxy card, by signing a new proxy card with a date later than your previously
delivered proxy and submitting it as instructed above; |
| ● | by
re-voting by Internet or by telephone as instructed above; |
| ● | by
notifying Orgenesis’ secretary (the “Corporate Secretary”), Victor Miller,
in writing before the annual meeting that you have revoked your proxy; or |
| ● | by
attending the annual meeting and voting at the meeting. Attending the annual meeting will
not in and of itself revoke a previously submitted proxy. You must specifically request at
the annual meeting that it be revoked. |
Your
most current vote, whether by telephone, Internet or proxy card is the one that will be counted.
What
is a proxy?
A
proxy is a person you appoint to vote on your behalf. By using any of the methods discussed above, you will be appointing Vered Caplan
and Victor Miller as your proxies. They may act together or individually on your behalf, and will have the authority to appoint a substitute
to act as proxy. If you are unable to attend the Annual Meeting, please use the means available to you to vote by proxy so that your
shares of common stock may be voted.
What
if I Receive More Than One Notice or Proxy Card?
You
may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered
form or held in street name. Please vote in the manner described above under “How Do I Vote?” for each account to ensure
that all of your shares are voted.
Will
My Shares be Voted if I Do Not Vote?
If
your shares are registered in your name or if you have stock certificates, they will not be counted if you do not vote as described above
under “How Do I Vote?” If your shares are held in street name and you do not provide voting instructions to the bank, broker
or other nominee that holds your shares as described above, the bank, broker or other nominee that holds your shares has the authority
to vote your unvoted shares only on the ratification of the appointment of our independent registered public accounting firm (Proposal
3 of this proxy statement) without receiving instructions from you. Therefore, we encourage you to provide voting instructions to your
bank, broker or other nominee. This ensures your shares will be voted at the annual meeting and in the manner you desire. A “broker
non-vote” will occur if your broker cannot vote your shares on a particular matter because it has not received instructions from
you and does not have discretionary voting authority on that matter or because your broker chooses not to vote on a matter for which
it does have discretionary voting authority.
What
Vote is Required to Approve Each Proposal and How are Votes Counted?
| Proposal
1: Elect Directors |
|
The
nominees for director who receive the most votes (also known as a “plurality” of the votes cast) will be elected. You
may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of
the nominees. Votes that are withheld will not be included in the vote tally for the election of the directors. Brokerage firms do
not have authority to vote customers’ unvoted shares held by the firms in street name for the election of the directors. As
a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the
results of this vote. |
| Proposal 2: Approve Amendment
to the 2017 Equity Incentive Plan |
|
The affirmative
vote of a majority of the votes cast on the matter is required to approve the amendment to the 2017 Equity Incentive Plan to increase
in the aggregate number of shares to be granted under the Company’s 2017 Equity Incentive Plan. Brokerage firms do not have
authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not
voted by a customer will be treated as a broker non-vote. Abstentions and broker non-votes will have no effect on determining whether
the affirmative vote constitutes a majority of the votes of the shares present in person or represented by proxy at the annual meeting. |
| |
|
|
| Proposal 3: Ratify Appointment of Independent Registered
Public Accounting Firm |
|
The affirmative vote of
a majority of the votes present or represented by proxy and entitled to vote at the annual meeting is required to ratify the selection
of our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms
have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise
this authority, such broker non-votes will have no effect on the results of this vote. We are not required to obtain the approval
of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the appointment
of Kesselman & Kesselman C.P.A.s as our independent registered public accounting firm for 2024, our Audit Committee of our Board
of Directors will reconsider its selection. |
Who
counts the votes?
We
have engaged Alliance Advisors (“Alliance”) as our independent agent to tabulate stockholder votes. If you are a stockholder
of record, and you choose to vote over the Internet, by telephone or fax, Alliance will access and tabulate your vote electronically,
and if you choose to sign and mail your proxy card, your executed proxy card is returned directly to Alliance for tabulation. As noted
above, if you hold your shares through a broker, your broker (or its agent for tabulating votes of shares held in street name, as applicable)
returns one proxy card to Alliance on behalf of all its clients.
Is
Voting Confidential?
We
will keep all the proxies, ballots and voting tabulations private. We only let our Inspectors of Election, Alliance, examine these documents.
Management will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward
to management any written comments you make on the proxy card or that you otherwise provide.
Where
Can I Find the Voting Results of the Annual Meeting?
The
preliminary voting results will be announced at the annual meeting, and we will publish preliminary, or final results if available, in
a Current Report on Form 8-K within four business days of the annual meeting. If final results are unavailable at the time we file the
Form 8-K, then we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final
voting results are known.
What
Are the Costs of Soliciting these Proxies?
We
will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax
or email. We will pay these employees and directors no additional compensation for these services. We will ask banks, brokers and other
institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies.
We will then reimburse them for their expenses.
What
Constitutes a Quorum for the Annual Meeting?
The
presence, at the meeting or by proxy, of the holders of one-third of the shares of common stock outstanding on the record date entitled
to vote at the annual meeting is necessary to constitute a quorum at the annual meeting. Votes of stockholders of record who are present
at the annual meeting or by proxy, abstentions, and broker non-votes are counted for purposes of determining whether a quorum exists.
Attending
the Annual Meeting
This
year, the annual meeting will be held in a virtual meeting format only. To attend the annual meeting, you have to first register at www.viewproxy.com/ORGS/2024.
On the day of the Annual Meeting of Stockholders, if you have properly registered, you may enter the meeting by clicking on the link
provided and the password you received via email in your registration confirmations. For further information about the virtual annual
meeting, please see the Questions and Answers about the Meeting beginning on page 3 of the accompanying proxy statement. You need not
attend the annual meeting in order to vote.
Householding
of Annual Disclosure Documents
Some
brokers or other nominee record holders may be sending you, a single set of our proxy materials if multiple Orgenesis stockholders live
in your household. This practice, which has been approved by the SEC, is called “householding.” Once you receive notice from
your broker or other nominee record holder that it will be “householding” our proxy materials, the practice will continue
until you are otherwise notified or until you notify them that you no longer want to participate in the practice. Stockholders who participate
in householding will continue to have access to and utilize separate proxy voting instructions.
We
will promptly deliver a separate copy of our Notice or if applicable, our proxy materials to you if you write or call our Corporate Secretary
to: Investor Relations, Orgenesis Inc., 20271 Goldenrod Lane, Germantown MD 208176, or call us at (480) 659-6404. If you want to receive
your own set of our proxy materials in the future or, if you share an address with another stockholder and together both of you would
like to receive only a single set of proxy materials, you should contact your broker or other nominee record holder directly or you may
contact us at the above address and phone number.
Electronic
Delivery of Company Stockholder Communications
Most
stockholders can elect to view or receive copies of future proxy materials over the Internet instead of receiving paper copies in the
mail.
You
can choose this option and save us the cost of producing and mailing these documents by:
| ● | following
the instructions provided on your Notice or proxy card; |
| ● | following
the instructions provided when you vote over the Internet; or |
| ● | going
to www.iproxydirect.com/ORGS and following the instructions provided. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 23, 2024 for
(a) the executive officers named in the Summary Compensation Table on page 20 of this proxy statement, (b) each of our directors and
director nominees, (c) all of our current directors and executive officers as a group and (d) each stockholder known by us to own beneficially
more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment
power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of
April 23, 2024 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership
of such individual or group, but those shares are not deemed to be outstanding for the purpose of computing the percentage ownership
of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this
table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on
information provided to us by these stockholders. Percentage of ownership is based on 34,380,280 shares of common stock outstanding on
April 23, 2024.
Security
Ownership of Greater than 5% Beneficial Owners
| Name
and Address of Beneficial Owner | |
Amount
and Nature of Beneficial
Ownership (1) | | |
Percent(1) | |
Jacob
Safier c/o
The Wolfson Group, One State Street
Plaza, 29th Floor New
York, NY 10004 | |
| 5,110,100
| (2) | |
| 14.86 | % |
Yehuda Nir
c/o Orgenesis Inc.
20271
Goldenrod Lane
Germantown, MD 20876 | |
| 11,297,179 | (3) | |
| 24.73 | % |
Security
Ownership of Directors, New Director Nominees and Executive Officers
| Name
and Address of Beneficial Owner | |
Amount and Nature of Beneficial Ownership (1) | | |
Percent(1) | |
Vered
Caplan
c/o
Orgenesis Inc.
20271
Goldenrod Lane
Germantown,
MD 20876 | |
| 1,252,757 | (4) | |
| 3.54 | % |
Victor
Miller
c/o
Orgenesis Inc.
20271
Goldenrod Lane
Germantown,
MD 20876 | |
| 25,000 | (5) | |
| <1
| % |
Guy
Yachin
c/o
Orgenesis Inc.
20271
Goldenrod Lane
Germantown,
MD 20876 | |
| 150,867 | (8) | |
| <1
| % |
Dr.
David Sidransky
c/o
Orgenesis Inc.
20271
Goldenrod Lane
Germantown,
MD 20876 | |
| 153,467 | (9) | |
| <1
| % |
Yaron
Adler
c/o
Orgenesis Inc.
20271
Goldenrod Lane
Germantown,
MD 20876 | |
| 203,721 | (10) | |
| <1
| % |
Ashish Nanda
c/o Orgenesis Inc.
20271 Goldenrod Lane
Germantown, MD 20876 | |
| 98,400 | (11) | |
| <1
| % |
Mario Philips
c/o Orgenesis Inc.
20271 Goldenrod Lane
Germantown, MD 20876 | |
| 60,000 | (12) | |
| <1
| % |
Kevin Choquette
c/o Orgenesis Inc.
20271 Goldenrod Lane
Germantown, MD 20876 | |
| - | | |
| 0 | % |
Mark Goodman
c/o Orgenesis Inc.
20271 Goldenrod Lane
Germantown, MD 20876 | |
| - | | |
| 0 | % |
Curtis Slipman
c/o Orgenesis Inc.
20271 Goldenrod Lane
Germantown, MD 20876 | |
| - | | |
| 0 | % |
| Directors & Executive
Officers as a Group (7 persons) | |
| 1,944,212 | | |
| 5.66 | % |
Notes:
| (1) | Percentage
of ownership is based on 34,380,280 shares of our common stock outstanding as of April 23,
2024. Except as otherwise indicated, we believe that the beneficial owners of the common
stock listed above, based on information furnished by such owners, have sole investment and
voting power with respect to such shares, subject to community property laws where applicable.
Beneficial ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of common stock subject
to options, warrants or convertible debt currently exercisable, or convertible or exercisable
or convertible within 60 days, are deemed outstanding for purposes of computing the percentage
ownership of the person holding such options, warrants or convertible debt but are not deemed
outstanding for purposes of computing the percentage ownership of any other person. |
| (2) | Consists
of 5,110,100 shares of common stock. |
| (3) | Consists
of (i) 10,016 shares of common stock, (ii) 453,294 shares of common stock issuable upon exercise
of outstanding warrants at a price of $6.24 per share, exercisable until, January 31, 2026,
(iii) 277,778 shares of common stock issuable upon exercise of outstanding warrants at a
price of $4.50 per share, exercisable until, January 31, 2026, (iv) 1,111,111 shares of common
stock issuable upon exercise of outstanding warrants at a price of $2.50 per share, exercisable
until, January 31, 2026, (v) 840,000 shares of common stock issuable upon exercise of outstanding
warrants at a price of $0.85 per share, exercisable until, December 31, 2026, (vi) 218,750
shares of common stock issuable upon exercise of outstanding warrants at a price of $0.80
per share, exercisable until, October 4, 2024, (vii) 7,375,100 shares of common stock issuable
upon conversion of convertible debt at a conversion price of $2.50 per share, and (viii)
936,477 shares of common stock issuable upon conversion of convertible debt at a conversion
price of $0.85 per share. |
| (4) | Consists
of (i) 278,191 shares of common stock, (ii) 230,189 shares of common stock issuable upon
exercise of outstanding options at a price of $0.0012 per share, (iii) 166,667 shares of
common stock issuable upon exercise of outstanding options at a price of $4.80 per share,
(iv) 83,334 shares of common stock issuable upon exercise of outstanding options at a price
of $7.20 per share, (v) 250,001 shares of common stock issuable upon exercise of outstanding
options at a price of $8.36 per share, (vi) 85,000 shares of common stock issuable upon exercise
of outstanding options at a price of $5.99 per share, (vii) 85,000 shares of common stock
issuable upon exercise of outstanding options at a price of $2.99 per share, and (viii) 74,375
shares of common stock issuable upon exercise of outstanding options at a price of $2.00
per share. Does not include option for 10,625 shares of common stock with an exercise price
of $2.00 per share that are exercisable quarterly after June 24, 2024. |
| (5) | Consists
of 25,000 shares of common stock. |
| (6) | Consists
of 25,000 shares of common stock issuable upon exercise of outstanding options at a price
of $0.58 per share. |
| (7) | Consists
of (i) 16,667 shares of common stock issuable upon exercise of outstanding options at a price
of $4.80 per share, (ii) 15,000 shares of common stock issuable upon exercise of outstanding
options at a price of $5.99 per share, (iii) 15,000 shares of common stock issuable upon
exercise of outstanding options at a price of $2.99 per share, and (iv) 7,500 shares of common
stock issuable upon exercise of outstanding options at a price of $2.00 per share. |
| (8) | Consists
of (i) 41,667 shares of common stock issuable upon exercise of outstanding options at a price
of $4.80 per share, (ii) 28,750 shares of common stock issuable upon exercise of outstanding
options at a price of $5.99 per share, (iii) 25,000 shares of common stock issuable upon
exercise of outstanding options at a price of $2.99 per share, (iv) 16,250 shares of common
stock issuable upon exercise of outstanding options at a price of $4.60 per share, (v) 19,600
shares of common stock issuable upon exercise of outstanding options at a price of $2.89
per share. and(v) 19,600 shares of common stock issuable upon exercise of outstanding options
at a price of $1.86 per share. Does not include option for 19,600 shares of common stock
with an exercise price of $0.45 per share that are exercisable on December 13, 2024. |
| (9) | Consists
of (i) 41,667 shares of common stock issuable upon exercise of outstanding options at a price
of $4.80 per share, (ii)29,200 shares of common stock issuable upon exercise of outstanding
options at a price of $5.99 per share, (iii) 25,000 shares of common stock issuable upon
exercise of outstanding options at a price of $2.99 per share, (iv) 16,700 shares of common
stock issuable upon exercise of outstanding options at a price of $4.60 per share, (v) 20,450
shares of common stock issuable upon exercise of outstanding options at a price of $2.89
per share, and (vi) 20,450 shares of common stock issuable upon exercise of outstanding options
at a price of $1.86 per share. Does not include option for 20,450 shares of common stock
with an exercise price of $0.45 per share that are exercisable on December 13, 2024. |
| (10) | Consists
of (i) 63,304 shares of common stock, (ii) 41,667 shares of common stock issuable upon exercise
of outstanding options at a price of $4.80 per share, (iii) 28,750 shares of common stock
issuable upon exercise of outstanding options at a price of $5.99 per share, (iv) 25,000
shares of common stock issuable upon exercise of outstanding options at a price of $2.99
per share, (v) 15,000 shares of common stock issuable upon exercise of outstanding options
at a price of $4.60 per share,(vi) 15,000 shares of common stock issuable upon exercise of
outstanding options at a price of $2.89 per share, and (vi) 15,000 shares of common stock
issuable upon exercise of outstanding options at a price of $1.86 per share. Does not include
option for 15,000 shares of common stock with an exercise price of $0.45 per share that are
exercisable on December 13, 2024. |
| (11) | Consists
of (i) 27,100 shares of common stock issuable upon exercise of outstanding options at a price
of $5.99 per share, (ii) 25,000 shares of common stock issuable upon exercise of outstanding
options at a price of $2.99 per share, (iii) 14,600 shares of common stock issuable upon
exercise of outstanding options at a price of $4.60 per share, (iv) 15,850 shares of common
stock issuable upon exercise of outstanding options at a price of $2.89 per share, and (iv)
15,850 shares of common stock issuable upon exercise of outstanding options at a price of
$1.86 per share. Does not include option for 15,850 shares of common stock with an exercise
price of $0.45 per share that are exercisable on December 13, 2024. |
| (12) | Consists
of (i) 6,250 shares of common stock issuable upon exercise of outstanding options at a price
of $4.70 per share, (ii) 12,500 shares of common stock issuable upon exercise of outstanding
options at a price of $2.99 per share, (iii) 13,750 shares of common stock issuable upon
exercise of outstanding options at a price of $4.60 per share, (iv) 13,750 shares of common
stock issuable upon exercise of outstanding options at a price of $2.89 per share, and (iv)
13,750 shares of common stock issuable upon exercise of outstanding options at a price of
$1.86 per share. Does not include option for 13,750 shares of common stock with an exercise
price of $0.45 per share that are exercisable on December 13, 2024. |
MANAGEMENT
AND CORPORATE GOVERNANCE
Our
Board of Directors
On
May 3, 2024, our Board of Directors accepted the recommendation of the Nominating Committee and voted to nominate Vered Caplan, Yaron
Adler, Ashish Nanda, Kevin Choquette, Curtis Slipman and Mark Goodman for election at the annual meeting to serve until the 2025 annual
meeting of stockholders, and until their respective successors have been duly elected and qualified.
Set
forth below are the names of the persons nominated for election as directors, their ages, their offices in the Company, if any, their
principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other
public companies in which such persons hold or have held directorships during the past five years. Additionally, information about the
specific experience, qualifications, attributes or skills that led to our Board of Directors’ conclusion at the time of filing
of this proxy statement that each person listed below should serve as a director is set forth below:
| Name |
|
Age |
|
Position
with the Company |
|
Year
Became a Director |
| Vered
Caplan |
|
55 |
|
Chief
Executive Officer,
Chairperson
of the Board of Directors |
|
2012 |
| Kevin
Choquette |
|
68 |
|
Director |
|
n/a |
| Curtis
Slipman |
|
65 |
|
Director |
|
n/a |
| Yaron
Adler |
|
53 |
|
Director |
|
2012 |
| Ashish
Nanda |
|
58 |
|
Director |
|
2017 |
| Mark
Goodman |
|
66 |
|
Director |
|
n/a |
Our
Board of Directors has reviewed the materiality of any relationship that each of our directors has with Orgenesis, either directly or
indirectly. Based upon this review, our Board of Directors has determined that the following members of our Board of Directors are “independent
directors” as defined by The Nasdaq Stock Market: Dr. Sidransky, and Messrs. Yachin, Adler, Nanda and Philips.
Vered
Caplan – Chief Executive Officer and Chairperson of the Board of Directors
Ms.
Caplan has served as our CEO and Chairperson of the Board of Directors since August 14, 2014, prior to which she served as Interim President
and CEO commencing on December 23, 2013. She joined our Board of Directors in February 2012. She has 26 years
of industry experience, previously holding positions as CEO of Kamedis Ltd. from 2009 to
2014, CEO of GammaCan International Inc. from 2004 to 2007. She also served as a director of the following companies: Opticul
Ltd., Inmotion Ltd., Nehora Photonics Ltd., Ocure Ltd., Eve Medical Ltd., and Biotech Investment Corp. Ms. Caplan holds a M.Sc. in biomedical
engineering from Tel Aviv University specializing in signal processing; management for engineers from Tel Aviv University specializing
in business development; and a B.Sc. in mechanical engineering from the Technion– Israel Institute of Technology specialized in
software and cad systems.
We
believe that Ms. Caplan’s significant experience relating to our industry and a deep knowledge of our business, based on her many
years of involvement with the Company, makes her desirable to serve as a director of the Company.
Ashish Nanda – Director
Mr. Nanda has served as a
director since his appointment on February 22, 2017. Since 1998, Mr. Nanda has been the Managing Director of Innovations Group, one of
the largest outsourcing companies in the financial sector that employs close to 14,000 people working across various financial sectors.
Since 1992, Mr. Nanda has served as the Managing Partner of Capstone Insurance Brokers LLC and, since 2009, has served as Managing Partner
of Dive Tech Marine Engineering Services L.L.C. From 1991 to 1994, Mr. Nanda held the position of Asst. Manager Corporate Banking at
Emirates Banking Group where he was involved in establishing relationships with business houses owned by UAE nationals and expatriates
in order to set up banking limits and also where he managed portfolios of USD $26 billion. Mr. Nanda holds a Chartered Accountancy from
the Institute of Chartered Accountants from India.
We believe that Mr. Nanda
is qualified to serve on our Board of Directors because of his business experience and strategic understanding of advancing the valuation
of companies in emerging industries.
Kevin
Choquette – Director
Mr.
Choquette is a retired senior capital markets and banking professional with expertise in the equity capital markets and financial
services industry. Since April 2024, Mr. Choquette has served as an advisor to the Company to provide strategic advice
and assistance. From 2019 to 2021, Mr. Choquette served as a Board Member and Treasurer of the Porsche Club of America, Upper
Canada Region. Mr. Choquette was previously a top ranked research analyst by Brendan Woods International and Greenwich and
winner of many StarMine awards. From 2014 to 2016, Mr. Choquette served as a Managing Director Equity Research at Credit
Suisse Securities (Canada) where he covered banks and life insurance companies and was a member of the Capital Operating
Committee. From 1998 to 2013, Mr. Choquette held the position of Managing Director at Scotiabank where he established a
research platform involving 20 banks in Canada, the United States, Chile and Mexico. From 1993 to 1998, he served as Senior Vice
President and Co-director of Research responsible for supervising a large research department and covering banks and non-bank
financials. From 1989 to 1993 he served as vice president of Equity Research at First Boston Canada Ltd. From 1986 to 1989 he served
as Vice President and financial services analyst at Midland Doherty Ltd. From 1984 to 1986, he served as vice president of Irving
Bank Canada where he was responsible for the finance and administration function of the Canadian operations. From 1980 to
1984, he served in various roles at Seattle First Bank Canada, including Treasurer, Controller, Chief Financial Officer and Board
Member. Mr. Choquette is certified as a Certified Public Accountant, Certified Management Accountant and Chartered Financial
Analyst. Mr. Choquette holds a BCom from the University of Saskatchewan.
We believe that
Mr. Choquette is qualified to serve on our Board of Directors because of his business experience in the equity capital markets and financial
services industry.
Curtis
Slipman – Director
Dr. Slipman is
one of the world’s foremost authorities on medical, interventional and rehabilitation approaches to treating back and neck pain
and has been recognized internationally as a leading researcher and educator on the subject. Since April 2024, Dr. Slipman has served
as a principal owner and president of CWS Consulting LLC, a medical consulting business specializing in advisory services within the
healthcare field. Since April 2019, Dr. Slipman practiced in the field of International Medical Consulting. From January 2019
to January 2022, Dr. Slipman served as a member of the Scientific Advisory Board of Cyphi, LLC, a Medicine Software Company. Prior
to that, from 2013 to 2018, Dr. Slipman served as CEO of Cutting Edge Medical Solutions, LLC, a healthcare company focused on the
delivery of home based immunotherapy. From March 2021 through March 2023, Dr. Slipman served as a member of the Board of Directors
of Quantaira Inc., a New York based health technology company focused on using software to improve patient health and clinical outcomes.
Dr. Slipman worked in the University of Pennsylvania Health System from 1992 to 2008, where he founded and served as Director of the
University of Pennsylvania Spine Center. Dr. Slipman has also acted as a medical and business consultant internationally since 2008.
Dr. Slipman received
his BA in Psychology from Stony Brook University where he graduated sum cum laude and received his medical degree from Baylor College
of Medicine. He completed his residency in physical medicine and rehabilitation at Columbia-Presbyterian Hospital.
We believe Dr.
Slipman is qualified to serve on our Board of Directors because of his medical background and experience within the life science industry.
Mark
Goodman – Director
Since May 2019,
Mr. Goodman has served as a consultant to early-stage technology startup companies specializing in marketing, business growth and financing.
From August 2021 to August 2023, Mr. Goodman also served as Chief Executive Officer and Founder of Vexxit Inc., which established the
first digital marketplace that connects consumers and small businesses with professionals, such as lawyers and accountants. From May
2014 until May 2019, Mr. Goodman served as Chief Executive Officer and co-founder for Mirum, leading the Canadian segment of the
global agency platform. Mirum is owned by WPP plc, a British multinational communications and advertising company whose agencies develop
and scale ideas that connect brands and products with consumers. Mr. Goodman founded Mirum by consolidating his company, Twist Image,
with eleven other companies that were also owned by WPP from around the world. Mr. Goodman was one of four partners who founded Twist
Image, a digital agency, and served as CEO from 2006 to 2014. Mr. Goodman helped grow Twist Image by developing relationships with clients
such as Adidas, Walmart and Pfizer. Mr. Goodman was instrumental in leading Twist Image through its successful acquisition by WPP in
2014. Mr. Good man was also a guest lecturer professor at Concordia University in 2023 and taught international marketing and entrepreneurship.
Mr. Goodman holds a BCom from Concordia University.
We believe that
Mr. Goodman is qualified to serve on our Board of Directors because of his success with early-stage enterprises and his business acumen.
| Board
Diversity Matrix as of May 1, 2024 |
|
| Total
Number of Directors |
|
6 |
|
| Part
I: Gender Identity |
|
Female |
|
|
Male |
|
|
Non-Binary |
|
|
Did
Not Disclose Gender |
|
| Directors |
|
|
1 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
| Part
II: Demographic Background |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| African
American or Black |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Alaskan
Native or American Indian |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asian |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
| Hispanic
or Latina |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Native
Hawaiian or Pacific Islander |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| White |
|
|
1 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
| Two
or More Races or Ethnicities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LGBTQ+ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Did
Not Disclose Demographic Background |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Committees
of our Board of Directors and Meetings
Meeting
Attendance. During the fiscal year ended December 31, 2023 there were 4 meetings of our Board of Directors, and the various committees
of our Board of Directors met a total of 10 times. No director attended fewer than 75% of the total number of meetings of our Board of
Directors and of committees of our Board of Directors on which he or she served during fiscal 2023. Our Board of Directors does not have
a formal policy with respect to members of our Board of Directors’ attendance at annual stockholder meetings, although it encourages
directors to attend such meetings. Two directors attended our annual meeting of stockholders held in 2023.
Audit
Committee. Our Audit Committee (“Audit Committee”) met four times during fiscal 2023. This committee currently
has three members, Dr. Sidransky and Messrs. Yachin and Philips. Our Audit Committee’s role and responsibilities are set forth
in the Audit Committee’s written charter and include the authority to retain and terminate the services of our independent registered
public accounting firm. In addition, the Audit Committee reviews annual financial statements, considers matters relating to accounting
policy and internal controls and reviews the scope of annual audits. All members of the Audit Committee satisfy the current independence
standards promulgated by the Securities and Exchange Commission and by The Nasdaq Stock Market, as such standards apply specifically
to members of audit committees. Our Board of Directors has determined that Dr. Sidransky is an “audit committee financial expert,”
as the Securities and Exchange Commission has defined that term in Item 407 of Regulation S-K. Please also see the report of the Audit
Committee set forth elsewhere in this proxy statement.
A
copy of the Audit Committee’s written charter is publicly available on the investor relations section of our website, which is
located at http://www.orgenesis.com.
Compensation
Committee. Our Compensation Committee (“Compensation Committee”) met four times during fiscal 2023 and also
acted by unanimous written consent from time to time. This committee currently has three members, Dr. Sidransky and Messrs. Adler and
Yachin. Our Compensation Committee’s role and responsibilities are set forth in the Compensation Committee’s written charter
and includes reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure
that legal and fiduciary responsibilities of our Board of Directors are carried out and that such policies, practices and procedures
contribute to our success. Our Compensation Committee also administers our stock and incentive compensation plans. The Compensation Committee
is responsible for the determination of the compensation of our chief executive officer, and shall conduct its decision making process
with respect to that issue without the chief executive officer present. All members of the Compensation Committee qualify as independent
under the definition promulgated by The Nasdaq Stock Market.
The
Compensation Committee is responsible for approving issuances of all compensatory options from the available pool in the amounts and
vesting terms that may be presented by the executive officers of the Company from time-to-time. The Compensation Committee does not delegate
its authority in such matters.
A
copy of the Compensation Committee’s written charter is publicly available on the investor relations section of our website, which
is located at http://www.orgenesis.com.
Research
and Development Committee. Our Research and Development Committee (“R&D Committee”) acted by unanimous
written consent in fiscal 2023 and has two members, Messrs. Yachin and Sidransky. Our Board of Directors has determined that Messrs.
Yachin and Sidransky qualify as independent under the definition promulgated by The Nasdaq Stock Market. The R&D responsibilities
are set forth in the R&D written charter and include assisting our Board of Directors in determining R&D strategy.
Nominating
and Corporate Governance Committee. Our Nominating and Corporate Governance Committee (“Nominating Committee”)
acted by unanimous written consent or held two meetings in fiscal 2023 and has three members, Messrs. Nanda, Adler and Yachin. Our Board
of Directors has determined that Messrs. Nanda, Adler and Yachin qualify as independent under the definition promulgated by The Nasdaq
Stock Market. The Nominating Committee’s responsibilities are set forth in the Nominating Committee’s written charter and
include assisting our Board of Directors in:
| ● | identifying
qualified individuals to become directors, |
| ● | determining
the composition of our Board of Directors and its committees, |
| ● | developing
succession plans for executive officers, |
| ● | monitoring
a process to assess our Board of Directors’ effectiveness, and |
| ● | developing
and implementing our corporate governance procedures and policies. |
While
the Nominating Committee has not yet established a formal policy with respect to diversity, our Board of Directors believes that it is
essential that members of our Board of Directors represent diverse business backgrounds and experience and include individuals with a
background in related fields and industries. In considering candidates, our Board of Directors considers the entirety of each candidate’s
credentials in the context of these standards. We believe that the backgrounds and qualifications of our directors, considered as a group,
should and do provide a composite mix of experience, knowledge and abilities that will allow our Board of Directors to fulfill its responsibilities.
The
Company will consider candidates that are nominated by its stockholders. The name, business experience and other relevant background
information of a candidate should be sent to the Chief Executive Officer who will then forward such information to the Nominating Committee
for their review and consideration. The process for determining whether to nominate a director candidate put forth by a stockholder is
the same as that used for reviewing candidates submitted by directors. Other than candidates submitted by its directors and executive
officers, the Company has never received a proposed candidate for nomination from any security holder that beneficially owned more than
5% of our common stock.
The
Company has not, to date, implemented a policy or procedure by which its stockholders can communicate directly with its directors. Due
to the small size of the Company and its resources, the Company believes that this is appropriate.
A
copy of the Nominating Committee’s written charter is publicly available on the investor relations section of our website, which
is located at http://www.orgenesis.com.
Board
Leadership Structure
Ms.
Caplan has served as our Chief Executive Officer and Chairperson since August 2014. Prior to that time and since December 2013, she was
Interim President and Interim Chief Executive Officer. The Board of Directors believes that its current leadership structure, in which
the positions of Chairperson and Chief Executive Officer are held by Ms. Caplan, is appropriate at this time and provides the most effective
leadership for the Company in a highly competitive and rapidly changing technology industry. Our Board of Directors believes that combining
the positions of Chairperson and Chief Executive Officer under Ms. Caplan allows for focused leadership of our organization which benefits
us in our relationships with investors, customers, suppliers, employees and other constituencies. We believe that any risks inherent
in that structure are balanced by the oversight of our independent members of our Board of Directors. Given Ms. Caplan’s past performance
in the roles of Chairperson of the Board of Directors and Chief Executive Officer, at this time the Board of Directors believes that
combining the positions continues to be the appropriate leadership structure for our Company and does not impair our ability to continue
to practice good corporate governance.
Board’s
Role in Risk Oversight
Management
is responsible for the day-to-day management of risks the Company faces, while the Board of Directors, as a whole and through its committees,
has responsibility for the oversight of material risk management. In its risk oversight role, the Board of Directors reviews significant
individual matters as well as risk management processes designed and implemented by management with respect to risk generally. The Board
of Directors has designated the Audit Committee as the Board of Directors’ committee with general risk oversight responsibility.
The Audit Committee periodically discusses with management the Company’s major risk exposures and the processes management has
implemented to monitor and control those exposures and broader risk categories, including risk assessment and risk management policies.
Additionally,
members of our senior corporate management and senior executives regularly attend meetings of our Board of Directors and are available
to address inquiries of our Board of Directors on risk oversight matters. Separate and apart from the periodic risk reviews and other
communications between senior executives and the Board of Directors, many actions that potentially present a higher risk profile, such
as acquisitions, material changes to our capital structure, or significant investments, require review or approval of our Board of Directors
or its committees as a matter of oversight and corporate governance.
Stockholder
Communications to our Board of Directors
Generally,
stockholders who have questions or concerns should contact our Investor Relations department at (480) 659-6404. The Company has not,
to date, implemented a policy or procedure by which its stockholders can communicate directly with its directors. Due to the small size
of the Company and its resources, the Company believes that this is appropriate.
Executive
Officers
The
following table sets forth certain information as of May 1, 2024 regarding our executive officers who are not also directors.
| Name |
|
Age |
|
Position |
| |
|
|
|
|
| Victor
Miller |
|
54 |
|
Chief
Financial Officer, Secretary and Treasurer |
Victor
Miller - Chief Financial Officer, Secretary and Treasurer
On
December 28, 2023, we appointed Victor Miller as our Chief Financial Officer, Secretary and Treasurer effective January 2, 2024. Mr.
Miller previously served as Chief Financial Officer and Secretary at Hycor Biomedical LLC. (“HYCOR”), an in vitro allergy
diagnostic company, from 2014 to May 2023. Mr. Miller has over 30 years of healthcare and finance industry experience, including 14 years
leading finance functions at early-stage life science companies. From 2009 to 2014, prior to joining HYCOR, Mr. Miller led the Finance
function at Neos Therapeutics, an early-stage specialty pharmaceutical company. From 2000 to 2009, Mr. Miller developed broad healthcare
functional experience with roles in Corporate Development, Business Development, Marketing and Strategy while working for Baxter Healthcare
and Giles & Associates. From 1996 to 2000, Mr. Miller gained significant transaction experience as an investment banker in London
for Bankers Trust and Merrill Lynch. Mr. Miller holds a Bachelor of Science in Economics from The Wharton School, University of Pennsylvania
and is a Chartered Financial Analyst.
PAY
VERSUS PERFORMANCE
The
following table shows the relationship between executive compensation actually paid (“CAP”) to our Chief Executive Officer
and our named executive officers (“NEOs”) and certain financial performance of the Company during the last three fiscal years
ended December 31, 2023, December 31, 2022 and 2021 as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and Item 402(v) of Regulation S-K.
| Year | |
Summary
Compensation Table Total for PEO (1) | | |
Compensation
Actually Paid to PEO (2) | | |
Average
Summary Compensation Table Total for Non-PEO NEOs (3) | | |
Average
Compensation Actually Paid to Non-PEO NEOs (4) | | |
Value
of Initial Fixed $100 Investment Based on Total Shareholder Return (5) | | |
Net
Loss (in thousands) (6) | |
| 2023 | |
$ | 341,384 | | |
$ | 289,658 | | |
$ | 215,088 | | |
$ | 170,555 | | |
$ | (74 | ) | |
$ | (64,918 | ) |
| 2022 | |
$ | 443,909 | | |
$ | 433,261 | | |
$ | 185,442 | | |
$ | 183,806 | | |
$ | (57 | ) | |
$ | (12,169 | ) |
| 2021 | |
$ | 3,976,828 | | |
$ | 3,927,599 | | |
$ | 227,795 | | |
$ | 226,725 | | |
$ | (36 | ) | |
$ | (18,059 | ) |
| (1) | Ms.
Caplan was our Chief Executive Officer for each of 2023, 2022 and 2021. The dollar amounts
reported in this column are the amounts of total compensation reported for Ms. Caplan for
each corresponding year in the “Total” column of the Summary Compensation Table. |
| (2) | The
dollar amounts reported in this column represent the CAP to Ms. Caplan, as computed in accordance
with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of
compensation earned by or paid to Ms. Caplan during the applicable year. |
In
accordance with Item 402(v) of Regulation S-K, the following adjustments were made to Ms. Caplan’s total compensation for each
year to determine CAP:
| Year | |
Reported
Summary Compensation Table Total for PEO | | |
Reported
Value of Equity Awards (i) | | |
Equity
Award Adjustments (ii) | | |
Compensation
Actually Paid to PEO | |
| 2023 | |
$ | 341,384 | | |
$ | - | | |
$ | (51,726 | ) | |
$ | 289,658 | |
| 2022 | |
$ | 443,909 | | |
$ | (107,941 | ) | |
$ | 97,293 | | |
$ | 433,261 | |
| 2021 | |
$ | 3,976,828 | | |
| - | | |
$ | (49,229 | ) | |
$ | 3,927,599 | |
| (i) | The
grant date fair value of equity awards in this column represents the total of the amounts
reported in the “Stock Awards” and “Option Awards” columns in the
Summary Compensation Table for the applicable year. |
| (ii) | The
equity award adjustments in this column include the addition (or subtraction, as applicable)
of the following: (1) the year-end fair value of any equity awards granted in the applicable
year that are outstanding and unvested as of the end of the year; (2) the amount of change
as of the end of the applicable year (from the end of the prior fiscal year) in fair value
of any awards granted in prior years that are outstanding and unvested as of the end of the
applicable year; (3) for awards that are granted and vest in same applicable year, the fair
value as of the vesting date; (4) for awards granted in prior years that vest in the applicable
year, the amount equal to the change as of the vesting date (from the end of the prior fiscal
year) in fair value; (5) for awards granted in prior years that are determined to fail to
meet the applicable vesting conditions during the applicable year, a deduction for the amount
equal to the fair value at the end of the prior fiscal year; and (6) the dollar value of
any dividends or other earnings paid on stock or option awards in the applicable year prior
to the vesting date that are not otherwise reflected in the fair value of such award or included
in any other component of total compensation for the applicable year. The valuation assumptions
used to calculate fair values did not materially differ from those disclosed at the time
of grant. The amounts deducted or added in calculating the equity award adjustments are as
follows: |
| Year | |
Year
End Fair Value of Equity Awards | | |
Year
over Year Change in Fair Value of Outstanding and Unvested Equity Awards | | |
Fair
Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | |
Year
over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | |
Fair
Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | |
Value
of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | |
Total Equity Award
Adjustments | |
| 2023 | |
$ | 4,148 | | |
$ | (22,236 | ) | |
$ | - | | |
$ | (33,638 | ) | |
$ | - | | |
$ | - | | |
$ | (51,726 | ) |
| 2022 | |
$ | 79,151 | | |
$ | - | | |
$ | 20,885 | | |
$ | (2,743 | ) | |
$ | - | | |
$ | - | | |
$ | 97,293 | |
| 2021 | |
$ | - | | |
$ | (38,356 | ) | |
$ | - | | |
$ | (10,873 | ) | |
$ | - | | |
$ | - | | |
$ | (49,229 | ) |
| (3) | The
dollar amounts reported in this column represent the average of the amounts reported for
the Company’s NEOs as a group (excluding Ms. Caplan, who has served as our CEO since
2014) in the “Total” column of the Summary Compensation Table in each applicable
year. The names of each of the NEOs (excluding Ms. Caplan) included for purposes of calculating
the average amounts in each applicable year are as follows: (i) for 2023, Mr. Maltz and Ms.
Assa Kunik; (ii) for 2022, Mr. Reithinger and Ms. Assa Kunik; and (iii) for 2021, Mr. Reithinger
and Ms. Assa Kunik. |
| (4) | The
dollar amounts reported in this column represent the average amount of CAP to the NEOs as
a group (excluding Ms. Caplan), as computed in accordance with Item 402(v) of Regulation
S-K. |
In
accordance with Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group
(excluding Ms. Caplan) for each year to determine the CAP, using the same methodology described above in Footnote 2:
| Year | |
Average
Reported Summary Compensation Table Total for Non-PEO NEOs | | |
Average
Reported Value of Equity Awards | | |
Average
Equity Award Adjustments (i) | | |
Average
Compensation Actually Paid to Non-PEO NEOs | |
| 2023 | |
$ | 215,088 | | |
$ | 40,942 | | |
$ | (3,592 | ) | |
$ | 170,555 | |
| 2022 | |
$ | 185,442 | | |
$ | 19,048 | | |
$ | 17,412 | | |
$ | 183,806 | |
| 2021 | |
$ | 227,795 | | |
$ | - | | |
$ | (1,070 | ) | |
$ | 226,725 | |
| (i) | The
amounts deducted or added in calculating the total average equity award adjustments are as
follows: |
| Year | |
Average
Year End Fair Value of Equity Awards | | |
Year
over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | | |
Average
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | |
Year
over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | |
Average
Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | |
Average
Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | |
Total Average
Equity Award
Adjustments | |
| 2023 | |
$ | 244 | | |
$ | (1,308 | ) | |
$ | 3,270 | | |
$ | (2,694 | ) | |
$ | (3,104 | ) | |
$ | - | | |
$ | (3,592 | ) |
| 2022 | |
$ | 13,968 | | |
| - | | |
$ | 3,686 | | |
$ | (242 | ) | |
$ | - | | |
$ | - | | |
$ | 17,412 | |
| 2021 | |
$ | - | | |
$ | (3,384 | ) | |
$ | - | | |
$ | 2,314 | | |
$ | - | | |
$ | - | | |
$ | (1,070 | ) |
| (5) | The
cumulative total shareholder return (“TSR”) amounts reported in this column are
calculated by dividing the sum of the cumulative amount of dividends for the measurement
period, assuming dividend reinvestment, and the difference between the Company’s share
price at the end and the beginning of the measurement period by the Company’s share
price at the beginning of the measurement period. |
| (6) | The
dollar amounts reported in this column are the Company’s net income amounts reflected
in the Company’s audited financial statements for the applicable year. |
Analysis
of Information Presented in the Pay Versus Performance Table
The
following graphs address the relationship between CAP as disclosed in the Pay Versus Performance table and (i) the Company’s TSR
and (ii) the Company’s net income (loss).
EXECUTIVE
OFFICER AND DIRECTOR COMPENSATION
The
following table shows the total compensation paid or accrued during the years ended December 31, 2023 and 2022 to our Chief Executive
Officer, former Chief Financial Officer and former Chief Development Officer. As of December 31, 2023, there were no other executive
officers who earned more than $100,000 during the year ended December 31, 2023 and were serving as executive officers as of such date
(the “NEOs”). The table includes two additional executive officers who would have been among the three most highly compensated
executive officers except for the fact that they were not serving as executive officers of the Company as of the end of 2023.
Summary
Compensation Table
| Name
and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards ($) | | |
Option
Awards ($)(1) | | |
Non-Equity
Incentive Plan Compensa-tion ($) | | |
Non-qualified
Deferred Compensation Earnings ($) | | |
All
Other Compensa-tion ($) (2) | | |
Total
($) | |
| Vered Caplan | |
| 2023 | | |
| 259,029 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 82,355 | | |
| 341,384 | |
| CEO | |
| 2022 | | |
| 243,868 | | |
| - | | |
| - | | |
| 107,941 | | |
| - | | |
| - | | |
| 92,100 | | |
| 443,909 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Elliot Maltz | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Former
CFO, Treasurer & Secretary(3) | |
| 2023 | | |
| 111,667 | | |
| - | | |
| - | | |
| 81,883 | | |
| - | | |
| - | | |
| - | | |
| 195,550 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Efrat
Assa Kunik, Former Chief Development Officer(4) | |
| 2023 | | |
| 129,633 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 18,690 | | |
| 148,323 | |
| | |
| 2022 | | |
| 162,316 | | |
| - | | |
| - | | |
| 19,048 | | |
| - | | |
| - | | |
| 44,467 | | |
| 225,831 | |
| (1) | In
accordance with SEC rules, the amounts in this column reflect the fair value on the grant
date of the option awards granted to the NEO, calculated in accordance with ASC Topic 718.
Stock options were valued using the Black-Scholes model. The grant-date fair value does not
necessarily reflect the value of shares which may be received in the future with respect
to these awards. The grant-date fair value of the stock options in this column is a non-cash
expense for us that reflects the fair value of the stock options on the grant date and therefore
does not affect our cash balance. The fair value of the stock options will likely vary from
the actual value the holder receives because the actual value depends on the number of options
exercised and the market price of our Common Stock on the date of exercise. For a discussion
of the assumptions made in the valuation of the stock options, see Note 15 to our Annual
Report on Form 10-K for the year ended December 31, 2023. No executive officers received
options awards in the year ended December 31, 2023. See below for a summary of options awarded
in previous years. |
| (2) | For
2023 and 2022, represents the compensation as described under the caption “All Other
Compensation” below. |
| (3) | Mr.
Maltz resigned from his position at the Company effective December 31, 2023. |
| (4) | Ms.
Assa
Kunik resigned from her position at the Company effective August 8, 2023. |
All
Other Compensation
The
following table provides information regarding each component of compensation for the years ended December 31, 2023 and 2022 included
in the All Other Compensation column in the Summary Compensation Table above. Represents amounts paid in New Israeli Shekels (NIS) or
Swiss Franks and converted at average exchange rates for the year.
| Name | |
Year | | |
Automobile
and Communication Related Expenses $ | | |
Social
Benefits $ (1) | | |
Total
$ | |
| Vered Caplan | |
2023 | | |
| 2,627 | | |
| 79,728 | | |
| 82,355 | |
| | |
2022 | | |
| 2,536 | | |
| 89,564 | | |
| 92,100 | |
| Efrat Assa Kunik | |
2023 | | |
| 377 | | |
| 18,313 | | |
| 18,690 | |
| | |
2022 | | |
| 436 | | |
| 44,031 | | |
| 44,467 | |
|
(1) | These
are comprised of contributions by the Company to savings, health, severance, pension, disability
and insurance plans generally provided in Israel and Switzerland, including health, education,
managerial insurance funds, and redeemed vacation pay. This amount represents Israeli and
Swiss severance fund payments, managerial insurance funds, disability insurance, supplemental
education fund contribution and social securities. See discussion below under “Narrative
Disclosure to Summary Compensation Table – Vered Caplan.” |
Outstanding
Equity Awards at December 31, 2023
The
following table summarizes the outstanding equity awards held by each NEO as of December 31, 2023.
| Name | |
Grant
Date | |
Number
of Shares Underlying Unexercised Options (#) Exercisable | | |
Number
of Shares Underlying Unexercised Options (#) Unexercisable | | |
Option
Exercise Price ($) | | |
Option
Expiration Date |
| | |
| |
| | |
| | |
| | |
|
| Vered Caplan | |
22-Aug-14(1) | |
| 230,189 | | |
| - | | |
| 0.0012 | | |
22-Aug-24 |
| | |
09-Dec-16(1) | |
| 166,667 | | |
| - | | |
| 4.80 | | |
09-Dec-26 |
| | |
06-Jun-17(1) | |
| 83,334 | | |
| - | | |
| 7.20 | | |
06-Jun-27 |
| | |
28-Jun-18(1) | |
| 250,001 | | |
| - | | |
| 8.36 | | |
28-Jun-28 |
| | |
22-Oct-18(1) | |
| 85,000 | | |
| - | | |
| 5.99 | | |
22-Oct-28 |
| | |
19-Mar-20(1) | |
| 85,000 | | |
| - | | |
| 2.99 | | |
18-Mar-30 |
| | |
14-Jun-22(2) | |
| 63,750 | | |
| 21,250 | | |
| 2.00 | | |
13-Jun-32 |
| Elliot Maltz | |
04-Sep-23 | |
| 25,000 | | |
| - | | |
| 2.00 | | |
13-Jun-32 |
| Efrat Assa Kunik | |
09-Dec-16(1) | |
| 16,667 | | |
| - | | |
| 4.8 | | |
09-Dec-26 |
| | |
22-Oct-18(1) | |
| 15,000 | | |
| - | | |
| 5.99 | | |
22-Oct-28 |
| | |
19-Mar-20(1) | |
| 15,000 | | |
| - | | |
| 2.99 | | |
18-Mar-30 |
| | |
14-Jun-22(2) | |
| 7,500 | | |
| - | | |
| 2.00 | | |
13-Jun-32 |
| (1) | The
options
were fully vested as of December 31, 2023.
|
| (2) | The
options
vest on a quarterly basis over a period of two years
from the date of grant. |
Option
Exercises and Stock Vested in 2023
The
following table shows information regarding exercises of options to purchase our common stock and vesting of stock awards held by each
executive officer named in the Summary Compensation Table during the year ended December 31, 2023.
| |
|
Option
Awards |
|
|
Stock
Awards |
|
| Name |
|
Number
of
Shares
Acquired
on Exercise
(#) |
|
|
Value
Realized
on Exercise
($) (1) |
|
|
Number
of
Shares
Acquired
on Vesting
(#) |
|
|
Value
Realized
on Vesting
($) |
|
| (a) |
|
(b) |
|
|
(c) |
|
|
(d) |
|
|
(e) |
|
| Vered
Caplan |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| (1) | Amounts
shown in this column do not necessarily represent actual value realized from the sale of
the shares acquired upon exercise of options because in many cases the shares are not sold
on exercise but continue to be held by the executive officer exercising the option. The amounts
shown represent the difference between the option exercise price and the market price on
the date of exercise, which is the amount that would have been realized if the shares had
been sold immediately upon exercise. |
Narrative
Disclosure to Summary Compensation Table
Vered
Caplan
On
August 14, 2014, our Board of Directors confirmed that Ms. Vered Caplan, who had served as our President and Chief Executive Officer
on an interim basis since December 23, 2013, was appointed as our President and Chief Executive Officer.
On
November 19, 2020, we and Ms. Caplan entered into an executive directorship agreement, effective as of October 1, 2020 (the “Executive
Directorship Agreement”), that superseded and replaced a previous employment agreement (the “Prior Agreement”). Pursuant
to the Executive Directorship Agreement, Ms. Caplan will continue to serve the Company as its Chairperson of the Board of Directors (the
“Board”) and shall receive in consideration for her serving as Chairperson of the Board an annual regular Board fee in the
amount of $75,000 payable by the Company in equal quarterly installments in advance. In addition, Ms. Caplan may be eligible for non-recurring
special Board fees as reviewed and approved by the Compensation Committee of the Board (the “Compensation Committee”) and
then reviewed and ratified by the Board. In addition, Ms. Caplan may be granted option awards from time to time at the discretion of
the Compensation Committee.
Ms.
Caplan’s position as Chairperson of the Board under the Executive Directorship Agreement may be terminated for any reason by either
Ms. Caplan or the Company upon 90 days prior written notice (the “Notice Period”), provided that the Company may terminate
such appointment as Chairperson at any time during the Notice Period subject to certain conditions. Such termination as Chairperson of
the Board will be deemed a termination even if Ms. Caplan remains as a regular director of the Board. Upon termination by the Company
of Ms. Caplan’s employment other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations
(as defined therein) she shall be entitled to receive a lump sum payment equal to the sum of (i) the annual regular Board fee (the “Board
Fee”) and (ii) the greater of actual or target annual performance bonus to which she may have been entitled to as of the termination
date (in each case, less all customary and required taxes and related deductions).
Ms.
Caplan’s position under the Executive Directorship Agreement may be terminated in the event of a Change of Control (as defined
therein) by the Company other than for cause or by Ms. Caplan for any reason whatsoever. In the event of a Change of Control and if,
within one year following such Change of Control, employment under the Executive Directorship Agreement is terminated by the Company
other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations, she shall be entitled to receive
a lump sum payment equal to one and a half times the sum of (i) the Board Fee and (ii) the target annual performance remuneration to
which she may have been entitled as of the termination date (in each case, less all customary and required taxes and related deductions).
In
addition, on November 19, 2020, Orgenesis Services Sàrl, a Swiss corporation and wholly-owned, direct subsidiary of the Company
(“Orgenesis Services”), and Ms. Caplan entered into a personal employment agreement (the “Swiss Employment Agreement”
and together with the Executive Directorship Agreement, the “Agreements”), pursuant to which Ms. Caplan will serve as Chief
Executive Officer, President and Chairperson of the Board of Directors of Orgenesis Services and will be a material provider of services
to the Company pursuant to a services agreement between the Company and Orgenesis Services. The Swiss Employment Agreement provides that
Ms. Caplan is entitled to a monthly base salary of CHF 13,345.05 (equivalent to $14,583 based on the current exchange rate at signing),
and an annual representation fee of CHF 24,000 (equivalent to $26,226 based on the current exchange rate at signing), payable in monthly
installments of CHF 2,000. Ms. Caplan is eligible to receive a bonus at the absolute discretion of Orgenesis Services and its compensation
committee. Ms. Caplan may also be granted option awards from time to time, as per the recommendation of the compensation committee of
Orgenesis Services as reviewed and approved by the Compensation Committee. Under the Swiss Employment Agreement, Ms. Caplan is entitled
to be paid annual vacation days, monthly travel allowance, sick leave, expenses reimbursement and a mobile phone. The Swiss Employment
Agreement had an effective date as of October 1, 2020.
Employment
under the Swiss Employment Agreement may be terminated for any reason by Ms. Caplan or by Orgenesis Services other than for just cause
(as defined therein) upon six months prior written notice or by Orgenesis Services other than for just cause in the event of a Change
of Control (as defined therein) of the Company upon at least 12 months prior written notice. Upon termination by Orgenesis Services of
Ms. Caplan’s employment without just cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations (as
defined therein), she shall be entitled to receive a lump sum payment equal to the sum of (i) her Base Salary (as defined therein) at
the rate in effect as of the termination date and (ii) the greater of actual or target annual performance bonus to which she may have
been entitled to for the year in which employment terminates (in each case, less all customary and required taxes and employment-related
deductions). In the event of a Change of Control and if, within one year following such Change of Control, employment is terminated by
Orgenesis Services other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations she shall
be entitled to receive a lump sum payment equal to one and a half times the sum of (i) her Base Salary and (ii) the target annual performance
bonus to which she may have been entitled to for the year in which employment terminates (in each case, less all customary and required
taxes and employment-related deductions).
The
Swiss Employment Agreement provides for customary protections of Orgenesis’ confidential information and intellectual property.
Ms.
Caplan received an aggregate salary and board fee of $259,029 during 2023. As of December 31, 2023, the $150,000 chairperson fee for
2022 and 2023 was unpaid, but accrued, per agreement by Ms. Caplan. In addition, in 2022 Ms. Caplan was awarded options to purchase 85,000
shares of common stock.
Ms.
Caplan received reimbursement for automobile and communication related expenses in the amount of $2,627 in 2023 and $2,536 in 2022. In
addition, the Company contributed to savings, health, severance, pension, disability and insurance plans generally provided in Switzerland,
including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $79,728 in 2023 and $89,564
in 2022. These amounts represent Swiss severance fund payments, managerial insurance funds, disability insurance, supplemental education
fund contribution and social securities.
Elliot
Maltz, former CFO, Secretary and Treasurer
Mr.
Maltz was appointed Chief Financial Officer, Treasurer and Secretary on September 1, 2023. Pursuant to Mr. Maltz’s personal employment
agreement (the “Employment Agreement”) with the Company he is entitled to receive an annual base salary of $335,000 and an
annual cash bonus of up to 40% of his then-current base salary (the “Annual Performance Bonus”). The Annual Performance Bonus,
if any, will be based upon the achievement of certain corporate and individual performance objectives. Additionally, pursuant to the
Employment Agreement Mr. Maltz was granted 200,000 stock options (the “Stock Award”). The Stock Award will vest quarterly
from the grant date over four years subject to Mr. Maltz’s continued employment through each such vesting date. Mr. Maltz resigned
his position at the Company effective December 31, 2023. Mr. Maltz base salary of $111,667 earned during 2023 was paid to him as per
his employment and we have no further obligations due to him.
Efrat
Assa Kunik
Ms.
Assa-Kunik was appointed Chief Development Officer in December 2021. According to the terms of Ms. Assa-Kunik’s Employment Agreement,
Ms. Assa Kunik is entitled to a monthly salary of 45 thousand New Israeli Shekels, customary contributions to a pension and training
fund, participation in cellphone expenses, and annual leave of 24 days. In 2022, Ms. Assa-Kunik was awarded options to purchase 15,000
shares of common stock. Ms. Assa Kunik resigned her position at the Company effective August 2023.
Ms.
Assa-Kunik received an aggregate salary of $126,933 during 2023 and $162,316 in 2022. In addition, in 2022 Ms. Assa-Kunik was awarded
options to purchase 15,000 shares of common stock.
Ms.
Assa-Kunik received reimbursement for automobile and communication related expenses in the amount of $377 in 2023 and $436 in 2022. In
addition, the Company contributed to savings, health, severance, pension, disability and insurance plans generally provided in Israel,
including health, education, managerial insurance funds, and redeemed vacation pay in an amount equivalent to $18,313 in 2023 and $44,031
in 2022. These amounts represent Israeli severance fund payments, managerial insurance funds, disability insurance, supplemental education
fund contribution and social securities.
Potential
Payments upon Change of Control or Termination following a Change of Control
Our
employment agreements with our NEOs provide incremental compensation in the event of termination, as described herein. In certain circumstances
we may provide severance specifically upon a change in control or provide for accelerated vesting upon change in control. Termination
of employment also impacts outstanding stock options.
Due
to the factors that may affect the amount of any benefits provided upon the events described below, any actual amounts paid or payable
may be different than those shown in this table. Factors that could affect these amounts include the basis for the termination, the date
the termination event occurs, the base salary of an executive on the date of termination of employment and the price of our common stock
when the termination event occurs.
The
following table sets forth the compensation that would have been received by each of the Company’s executive officers had they
been terminated as of December 31, 2023.
| Name | |
Salary
Continuation | |
| Vered Caplan | |
$ | * | |
(*)
Termination by Company without cause: $250,000.
Termination
without cause following a change in control: $375,000.
Director
Compensation
The
following table sets forth for each non-employee director that served as a director during the year ended December 31, 2023:
Year
Ended December 31, 2023
| Name | |
Fees
Earned or Paid in Cash ($) | | |
Stock
Awards ($) | | |
Option
Awards ($) (1) | | |
Non-equity
Incentive Plan Compensation ($) | | |
Nonqualified
Deferred Compensation Earnings ($) | | |
All
Other Compensation ($) | | |
Total
($) | |
| Guy Yachin | |
| 100,000 | | |
| - | | |
| 6,067 | (2) | |
| - | | |
| - | | |
| - | | |
| 106,067 | |
| Yaron Adler | |
| 60,000 | | |
| - | | |
| 4,643 | (3) | |
| - | | |
| - | | |
| - | | |
| 64,643 | |
| Dr. David Sidransky | |
| 105,000 | | |
| - | | |
| 6,330 | (4) | |
| - | | |
| - | | |
| - | | |
| 111,330 | |
| Ashish Nanda | |
| 65,000 | | |
| - | | |
| 4,907 | (5) | |
| - | | |
| - | | |
| - | | |
| 69,907 | |
| Mario Philips | |
| 50,000 | | |
| - | | |
| 4,256 | (6) | |
| - | | |
| - | | |
| - | | |
| 54,256 | |
| (1) | In
accordance with SEC rules, the amounts in this column reflect the fair value on the grant
date of the option awards granted to the NEO, calculated in accordance with ASC Topic 718.
Stock options were valued using the Black-Scholes model. The grant-date fair value does not
necessarily reflect the value of shares which may be received in the future with respect
to these awards. The grant-date fair value of the stock options in this column is a non-cash
expense for us that reflects the fair value of the stock options on the grant date and therefore
does not affect our cash balance. The fair value of the stock options will likely vary from
the actual value the holder receives because the actual value depends on the number of options
exercised and the market price of our common stock on the date of exercise. For a discussion
of the assumptions made in the valuation of the stock options, see Note 15 (Stock Based Compensation)
to our financial statements, which are included in our Annual Report on Form 10-K. |
| (2) | In
respect of 19,600 options which will vest on December 12, 2024. |
| (3) | In
respect of 15,000 options which will vest on December 12, 2024. |
| (4) | In
respect of 20,450 options which will vest on December 12, 2024. |
| (5) | In
respect of 15,850 options which will vest on December 12, 2024. |
| (6) | In
respect of 13,750 options which will vest on December 12, 2024. |
All
directors receive reimbursement for reasonable out of pocket expenses in attending Board of Directors meetings and for participating
in our business.
Compensation
Policy for Non-Employee Directors.
In
January 2021, the Board of Directors adopted an updated compensation policy for non-employee directors which replaced the previous non-employee
director compensation terms and which became effective January 2021. Under the policy, each director is to receive an annual cash compensation
of $40,000 and the Chairman or lead director is paid an additional $20,000 per annum. Each committee member will be paid an additional
$10,000 per annum and the committee chairman of the Audit and Research and Development committees is to receive $20,000 per annum while
the chairman of the other committees is to receive $15,000 per annum. Cash compensation will be made on a quarterly basis.
All
newly appointed directors also receive options to purchase up to 6,250 shares of the Company’s common stock. All directors are
entitled to an annual bonus of options for 12,500 shares and each committee member is entitled to a further option to purchase up to
1,250 shares of common stock and each committee chairperson to options for an additional 2,100 shares of common stock. In addition, the
Chairman and Vice Chairman shall be granted an option to purchase 4,200 shares of the Company’s shares of common stock. In all
cases, the options are granted at a per share exercise price equal to the closing price of the Company’s publicly traded stock
on the date of grant and the vesting schedule is determined by the Compensation Committee at the time of grant.
Compensation
Committee Interlocks and Insider Participation
None
of our executive officers has served as a member of the Board of Directors, or as a member of the compensation or similar committee,
of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee during the fiscal
year ended December 31, 2023.
EQUITY
COMPENSATION PLAN INFORMATION
Securities
Authorized for Issuance Under Existing Equity Compensation Plans
The
following table summarizes certain information regarding our equity compensation plans as of December 31, 2022:
| Plan
Category | |
Number
of Securities to be Issued Upon Exercise of Outstanding Options (a) | | |
Weighted-Average
Exercise Price of Outstanding Options (b) | | |
Number
of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c) | |
| Equity compensation
plans approved by security holders (1) | |
| 2,944,865 | | |
$ | 3.66 | | |
| 2,046,646 | |
| Equity compensation plans not approved by security
holders | |
| 491,671 | | |
$ | 4.80 | | |
| - | |
| Total | |
| 3,436,536 | | |
$ | 3.82 | | |
| 2,046,646 | |
| (1) | Consists
of the 2017 Equity Incentive Plan and the Global Share Incentive Plan (2012). For a short
description of those plans, see Note 15 to our 2023 Consolidated Financial Statements included
in our Annual Report on Form 10-K for the year ended December 31, 2023. |
REPORT
OF AUDIT COMMITTEE
The
Audit Committee of our Board of Directors, which consists entirely of directors who meet the independence and experience requirements
of The Nasdaq Capital Market, has furnished the following report:
The
Audit Committee assists our Board of Directors in overseeing and monitoring the integrity of our financial reporting process, compliance
with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities
are set forth in our charter adopted by our Board of Directors, which is available on our website at https://www.orgenesis.com.
This committee reviews and reassesses our charter annually and recommends any changes to our Board of Directors for approval.
The Audit Committee is responsible for overseeing our overall financial reporting process, and for the appointment, compensation, retention,
and oversight of the work of Kesselman & Kesselman C.P.A.s. In fulfilling its responsibilities for the financial statements for fiscal
year December 31, 2023, the Audit Committee took the following actions:
| ● | Reviewed
and discussed the audited financial statements for the fiscal year ended December 31, 2023
with management and Kesselman & Kesselman C.P.A.s, our independent registered public
accounting firm; |
| ● | Discussed
with Kesselman & Kesselman C.P.A.s the matters required to be discussed in accordance
with Auditing Standard No. 1301- Communications with Audit Committees; and |
| ● | Received
written disclosures and the letter from Kesselman & Kesselman C.P.A.s regarding its independence
as required by applicable requirements of the Public Company Accounting Oversight Board regarding
Kesselman & Kesselman C.P.A.s’ communications with the Audit Committee and the
Audit Committee further discussed with Kesselman & Kesselman C.P.A.s their independence.
The Audit Committee also considered the status of pending litigation, taxation matters and
other areas of oversight relating to the financial reporting and audit process that the committee
determined appropriate. |
Based
on the Audit Committee’s review of the audited financial statements and discussions with management and Kesselman & Kesselman
C.P.A.s, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.
Members
of the Orgenesis Inc. Audit Committee
David
Sidransky
Guy
Yachin
Mario
Philips
DELINQUENT
SECTION 16(a) REPORTS
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires officers and directors of the Company
and persons who beneficially own more than ten percent (10%) of the Common Stock outstanding to file initial statements of beneficial
ownership of Common Stock (Form 3) and statements of changes in beneficial ownership of Common Stock (Forms 4 or 5) with the SEC. Officers,
directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all such forms they file.
Our
records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Exchange Act were filed on a timely
basis.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions
with Related Persons
Except
as set out below, as of December 31, 2023, there have been no transactions, or currently proposed transactions, in which we were or are
to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end
for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest:
| ● | any
director or executive officer of our company; |
| ● | any
person who beneficially owns, directly or indirectly, shares carrying more than 5% of the
voting rights attached to our outstanding shares of common stock; |
| ● | any
promoters and control persons; and |
| ● | any
member of the immediate family (including spouse, parents, children, siblings and in laws)
of any of the foregoing persons. |
Pursuant
to our Audit Committee charter adopted in March 2017, the Audit Committee is responsible for reviewing and approving, prior to our entry
into any such transaction, all transactions in which we are a participant and in which any parties related to us have or will have a
direct or indirect material interest.
Named
Executive Officers and Current Directors
For
information regarding compensation for our NEOs and current directors, see “Executive Officer and Director Compensation.”
Director
Independence
See
“Management and Corporate Governance – Our Board of Directors” above.
Proposal
No. 1
ELECTION
OF DIRECTORS
(Notice
Item 1)
On
May 3, 2024, our Board of Directors nominated Vered Caplan, Kevin Choquette, Yaron Adler, Ashish Nanda, Curtis Slipman and Mark
Goodman for election at the annual meeting. If they are elected, they will serve on our Board of Directors until the 2025 annual Meeting
of Stockholders and until their respective successors have been elected and qualified.
Unless
authority to vote for any of these nominees is withheld, the shares represented by the enclosed proxy will be voted FOR the election
of Vered Caplan, Kevin Choquette, Yaron Adler, Ashish Nanda, Curtis Slipman and Mark Goodman as directors. In the event that any
nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other
person as our Board of Directors may recommend in that nominee’s place. We have no reason to believe that any nominee will be unable
or unwilling to serve as a director.
A
plurality of the shares voted for each nominee at the Meeting is required to elect each nominee as a director.
OUR
BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF VERED CAPLAN, KEVIN CHOQUETTE, YARON ADLER, ASHISH NANDA, CURTIS SLIPMAN, AND
MARK GOODMAN AS DIRECTORS, AND PROXIES SOLICITED BY OUR BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
Proposal
No. 2
APPROVAL
OF AN AMENDMENT TO INCREASE THE NUMBER OF SHARES TO BE GRANTED UNDER THE COMPANY’S 2017 EQUITY INCENTIVE PLAN.
(Notice
Item 2)
General
Our
Board of Directors is requesting that our stockholders approve the adoption of an amendment to our 2017 Equity Incentive Plan (the “Plan”),
which amendment was approved by the Board of Directors on May 3, 2024 effective upon approval by our stockholders at the annual meeting.
If this proposal is approved:
| ● | the
number of shares authorized for issuance of awards under the Plan will be increased by 9,000,000
shares from 3,000,000 to an aggregate of 12,000,000 shares of common stock. |
The
Plan was approved by our Board of Directors and stockholders in 2017. By its terms, the Plan may be amended by the compensation committee
provided that any amendment that the Board of Directors or compensation committee determines requires stockholder approval is subject
to receiving such stockholder approval. Approval by our stockholders is required by the listing rules of the Nasdaq Stock Market. In
addition, stockholder approval is required in order to ensure favorable federal income tax treatment for grants of incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
As
of April 23, 2024, a total of 413,631 shares of our common stock remain available for issuance under the Plan and options to purchase
a total of 3,516,038 shares of common stock remain outstanding. As of April 23, 2024, a total of 3,516,038 shares of our common stock
have been issued upon the exercise of options and vesting of other equity awards granted under the Plan.
The
outstanding options under the Plan have a consolidated weighted average exercise price of $3.69 and a consolidated weighted average remaining
term of 4.95 years. As of April 23, 2024, the equity overhang, represented by (a) the sum of all outstanding stock options and other
stock-based awards under all Company equity plans, plus the number of shares available for issuance pursuant to future awards under the
Plan as a percentage of (b) the sum of (i) the number of shares of our common stock outstanding as of April 23, 2024, plus (ii) the number
of shares described in clause (a) above, was 10.26%. If the amendment to the Plan is approved by stockholders, the equity overhang would
be 27.33%.
The
compensation committee has considered our historical annual burn rate in granting awards under the Plan, and believes that our burn rate,
determined on this basis, is reasonable for a company of our size and in our industry. We are in a highly competitive marketplace for
biotech talent, and we strive to offer competitive equity grants to attract and retain talent. If we lose, or fail to recruit, key employees,
our ability to execute on our business strategy could be impaired and stockholder value could decrease. The following table shows our
3-year burn rate history (including new hire awards):
| | |
FY
2023 | | |
FY
2022 | | |
FY
2021 | |
| Adjusted Gross
Burn Rate as a % of Outstanding Shares(1) | |
| 1.92 | % | |
| 2.20 | % | |
| 1.52 | % |
| Adjusted Net Burn Rate as
a % of Outstanding Shares(2) | |
| (0.40 | )% | |
| 1.22 | % | |
| 1.26 | % |
(1)
Adjusted gross burn rate is calculated as the result of (a) shares subject to awards granted during the applicable fiscal year (including
new hire awards), divided by (b) the weighted average common shares outstanding during the applicable fiscal year.
(2)
Adjusted net burn rate is calculated as the result of (a) shares subject to awards granted during the applicable fiscal year, minus shares
subject to awards that were forfeited, canceled or terminated (other than upon exercise) during the applicable fiscal year, divided by
(b) the weighted average common shares outstanding during the applicable fiscal year.
Reasons
for Amendment of the Plan
Our
Board, the compensation committee and management believe that the effective use of stock-based long-term incentive compensation is vital
to our ability to achieve strong performance in the future. The Plan will maintain and enhance the key policies and practices adopted
by our management and Board of Directors to align employee and stockholder interests and to link compensation to Company performance.
In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining
and motivating key personnel. We believe that the increase in the number of shares available for issuance under our Plan is essential
to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and
directors. Our Board of Directors believes that the number of shares currently remaining available for issuance pursuant to future awards
under the Plan (as of April 23, 2024) is not sufficient for future granting needs. Our Board of Directors currently believes that if
the amendment to the Plan is approved by stockholders, the 12,929,669 shares available for issuance under the Plan will result in an
adequate number of shares of common stock being available for future awards under the Plan for 3 additional years following the current
year.
The
following is a brief summary of the Plan, as amended. This summary is qualified in its entirety by reference to the text of the Plan,
a copy of which is attached as Appendix A to this Proxy Statement.
Summary
of Material Features of our Plan.
Purpose
and Eligibility. The purpose of the Plan is to advance the interests of the Company’s stockholders by enhancing the Company’s
ability to attract, retain and motivate persons who are expected to make important contributions to the Company and its subsidiaries
by providing such persons with equity ownership opportunities that are intended to better align the interests of such persons with those
of the Company’s stockholders. All of the Company’s employees, officers and directors, as well as consultants and advisors
to the Company are eligible to be granted Awards under the Plan. As of April 23, 2024, there were approximately 147 individuals eligible
to participate in the Plan “Award” means Qualified and Non-Qualified Options (the “Options”) under the Code,
grants by the Company of shares under the Plan (the “Stock Grants”), grants by the Company under the Plan of an equity award
or equity based award which is not an Option or Stock Grant (the “Stock-Based Awards”), rights to the Shares or the value
of the Shares of the Company granted pursuant to the Plan (the “Stock Rights”).
Shares
Subject to the Plan. The maximum aggregate number of shares of our Common Stock currently reserved under the Plan is 3,000,000 shares.
Any shares of stock that are subject to an Award under the Plan that expires, is terminated, surrendered or forfeited will again be available
for the grant of awards under the Plan.
Adjustments.
In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares,
spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an
ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and sub-limits,
(iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the number of shares subject to
and the repurchase price per share subject to each outstanding Stock Award and (vi) the share and per-share-related provisions and the
purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted awards
may be made, if applicable) in the manner determined by our Board of Directors.
Administration.
The Plan is administered by our Board of Directors, which may delegate any or all of its powers under the Plan to one or more committees
or subcommittees of our Board of Directors (a “Committee”). To the extent that our Board of Directors determines to qualify
Awards as performance-based compensation within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee
of two or more “outside directors” within the meaning of Section 162(m) of the Code.
Options
Price and Duration. The purchase price per share of our Common Stock deliverable upon the exercise of a Non-Qualified Option will
be at least the greater of the par value or the fair market value per share of Common Stock on the date of grant of the Option. The purchase
price per share of our Common Stock deliverable upon the exercise of a Qualified Option will be no less than 100% of the fair market
value of the Common Stock on the day any such Option is granted. In addition, the exercise price of an incentive stock option granted
to any participant who owns more than 10% of the total voting power of all classes of our outstanding stock, must be at least 110% of
the fair market value of the Common Stock on the grant date.
Subject
to certain limitations, each Option shall be exercisable at such times and subject to such terms and conditions as our Board of Directors
may specify in the applicable option agreement; provided, however, that no Option will be granted with a term in excess of 10 years,
and with respect to Qualified Options granted to any participant who owns more than 10% of the total voting power of all classes of our
outstanding stock, no Option will be granted with a term in excess of 5 years.
Each
option agreement shall also set forth the effect on an award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a participant and the extent to which, and the period during which, rights under an Option
are exercisable.
Stock
Awards. Our Board of Directors may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”),
subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or
to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by our Board of
Directors in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by our
Board of Directors for such Award. Our Board of Directors may also grant awards entitling the recipient to receive shares of Common Stock
or cash to be delivered at the time such Award vests (“Restricted Stock Units”).
Exercise.
Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company,
together with payment in full (in the manner specified in the Plan) of the exercise price for the number of shares for which the Option
is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.
Transferability.
Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily
or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the participant, shall be exercisable only by the participant;
provided, however, that our Board of Directors may permit gratuitous transfer of the Award by the participant to or for the benefit of
any immediate family member, family trust or other entity established for the benefit of the participant and/or an immediate family member
thereof if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Common Stock
subject to such Award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted
transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument
in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of
the Award.
Term
and Termination of the Plan. The Plan was approved by the Company’s stockholders on May 11, 2017 (the “Effective Date”).
No Awards shall be granted under the Plan after the expiration of 10 years from the Effective Date, but Awards previously granted may
extend beyond that date.
Amendment.
The Plan may be amended by the shareholders of the Company and our Board of Directors. In the discretion of our Board of Directors, outstanding
agreements under the Plan may be amended by our Board of Directors in a manner which is not adverse to the participant.
Federal
Income Tax Considerations
The
material federal income tax consequences of the issuance and exercise of stock options and other awards under the Plan, based on the
current provisions of the Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below.
This summary assumes that all awards granted under the Plan are exempt from or comply with, the rules under Section 409A of the Code
related to nonqualified deferred compensation.
| |
Incentive Stock Options: |
Incentive stock options are
intended to qualify for treatment under Section 422 of the Code. An incentive stock option does not result in taxable income to the
optionee or deduction to us at the time it is granted or exercised, provided that no disposition is made by the optionee of the shares
acquired pursuant to the option within two years after the date of grant of the option nor within one year after the date of issuance
of shares to the optionee (referred to as the “ISO holding period”). However, the difference between the fair market value
of the shares on the date of exercise and the option price will be an item of tax preference includible in “alternative minimum
taxable income” of the optionee. Upon disposition of the shares after the expiration of the ISO holding period, the optionee
will generally recognize long term capital gain or loss based on the difference between the disposition proceeds and the option price
paid for the shares. If the shares are disposed of prior to the expiration of the ISO holding period, the optionee generally will recognize
taxable compensation, and we will have a corresponding deduction, in the year of the disposition, equal to the excess of the fair market
value of the shares on the date of exercise of the option over the option price. Any additional gain realized on the disposition will
normally constitute capital gain. If the amount realized upon such a disqualifying disposition is less than fair market value of the
shares on the date of exercise, the amount of compensation income will be limited to the excess of the amount realized over the optionee’s
adjusted basis in the shares. |
| |
Non-Qualified Options: |
Options otherwise qualifying
as incentive stock options, to the extent the aggregate fair market value of shares with respect to which such options are first exercisable
by an individual in any calendar year exceeds $100,000, and options designated as non-qualified options will be treated as options
that are not incentive stock options. |
| |
|
|
| |
|
A non-qualified option ordinarily will not
result in income to the optionee or deduction to us at the time of grant. The optionee will recognize compensation income at the time
of exercise of such non-qualified option in an amount equal to the excess of the then value of the shares over the option price per
share. Such compensation income of optionees may be subject to withholding taxes, and a deduction may then be allowable to us in an
amount equal to the optionee’s compensation income. |
| |
|
|
| |
|
An optionee’s initial basis in shares
so acquired will be the amount paid on exercise of the non-qualified option plus the amount of any corresponding compensation income.
Any gain or loss as a result of a subsequent disposition of the shares so acquired will be capital gain or loss. |
| |
Stock Grants: |
With respect to stock grants
under our Plan that result in the issuance of shares that are either not restricted as to transferability or not subject to a substantial
risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of shares received. Thus, deferral
of the time of issuance will generally result in the deferral of the time the grantee will be liable for income taxes with respect
to such issuance. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. |
| |
|
|
| |
|
With respect to stock grants involving the
issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally
recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or
are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt
of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently
forfeits such shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares
on which he previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt
of the shares. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. |
| |
Stock Units: |
The grantee recognizes no
income until the issuance of the shares. At that time, the grantee must generally recognize ordinary income equal to the fair market
value of the shares received. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by
the grantee. |
Plan
Benefits
Since
the adoption of the Plan through April 23, 2024, we have granted the following stock options under the Plan to the individuals and groups
listed below. In all cases, the securities underlying such stock options were shares of our common stock. As of the date hereof we have
granted only stock options and restricted stock units and no other type of award under the Plan.:
| Name and
Position | |
Number
of shares subject to Stock Options |
|
| |
| Named Executive
Officers | |
| 1,323,525 |
|
| |
| All current executive officers
as a group | |
| 1,323,525 |
|
| |
| All current directors who
are not executive officers as a group | |
| 687,801 |
|
| |
| Each director nominee | |
| - |
|
| |
| Each associate of all directors,
nominees and executive officers | |
| - |
|
| |
| Each person who received
5% of such awards | |
| - |
|
| |
| All employees who are not
executive officers as a group | |
| 1,504,712 |
|
| |
The
amounts of future grants under the Plan are not determinable and will be granted at the sole discretion of the compensation committee
or other delegated persons. We cannot determine at this time either the persons who will receive such awards under the Plan or the amount
or types of any such awards.
On
May 1, 2024, the closing market price per share of our common stock was $0.51, as reported by the Nasdaq Stock Market.
THE
BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE AMENDMENT TO THE 2017 EQUITY INCENTIVE PLAN TO INCREASE BY 9,000,000 SHARES THE AGGREGATE
NUMBER OF SHARES WHICH MAY BE GRANTED, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE VOTED IN FAVOR OF THE AMENDMENT UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
Proposal
No. 3
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Notice
Item 3)
The
Audit Committee has appointed Kesselman & Kesselman C.P.A.s, a member firm of PricewaterhouseCoopers International Limited, as our
independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2024. Kesselman
& Kesselman C.P.A.s has served as our independent registered public accounting firm since 2012. Our Board of Directors proposes that
the stockholders ratify this appointment. Kesselman & Kesselman C.P.A.s audited our financial statements for the fiscal year ended
December 31, 2023. We expect that representatives of Kesselman & Kesselman C.P.A.s will be present at the annual meeting, will be
able to make a statement if they so desire, and will be available to respond to appropriate questions.
In
deciding to appoint Kesselman & Kesselman C.P.A.s, the Audit Committee reviewed auditor independence issues and existing commercial
relationships with Kesselman & Kesselman C.P.A.s and concluded that Kesselman & Kesselman C.P.A.s has no commercial relationship
with the Company that would impair its independence for the fiscal year ending December 31, 2024.
The
following table presents fees for professional audit services rendered by Kesselman & Kesselman C.P.A.s for the audit of the Company’s
annual financial statements for the years ended December 31, 2023 and December 31, 2022, and fees billed for other services rendered
by Kesselman & Kesselman C.P.A.s during those periods.
| | |
Year
Ended December 31, | |
| Services | |
2023 | | |
2022 | |
| Audit Fees (1) | |
$ | 225,000 | | |
$ | 288,705 | |
| Audit-Related fees (2) | |
| 42,000 | | |
| 6,405 | |
| Total
fees | |
$ | 267,000 | | |
$ | 295,110 | |
| (1) | Audit
fees consisted of audit work performed in the preparation and review of financial statements,
as well as work generally only the independent registered public accounting firm can reasonably
be expected to provide, such as statutory audits. |
| (2) | Audit
related fees consisted principally of audits of employee benefit plans and special procedures
related to regulatory filings in 2023. |
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Public Accountant
Our
Audit Committee preapproves all services provided by our independent registered public accounting firm. All of the above services and
fees were reviewed and approved by our Board of Directors before the respective services were rendered. Our Board of Directors has considered
the nature and amount of fees billed by Kesselman & Kesselman and believes that the provision of services for activities unrelated
to the audit is compatible with maintaining their respective independence.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE TO RATIFY THE APPOINTMENT OF KESSELMAN & KESSELMAN C.P.A.S AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM, AND PROXIES SOLICITED BY OUR BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF SUCH RATIFICATION UNLESS A STOCKHOLDER INDICATES
OTHERWISE ON THE PROXY.
CODE
OF CONDUCT AND ETHICS
We
have adopted a code of conduct and ethics that applies to all of our employees, including our chief executive officer and chief financial
and accounting officers. The text of the code of conduct and ethics is posted on the investor relations section of our website, which
is located at http://www.orgenesis.com, and will be made available to stockholders without charge, upon request, in writing to
the Corporate Secretary at Orgenesis Inc., 20271 Goldenrod Lane, Germantown, MD, 20876, Attn: Corporate Secretary. We also intend to
disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on our website.
OTHER
MATTERS
Our
Board of Directors knows of no other business which will be presented to the annual meeting. If any other business is properly brought
before the annual meeting, proxies will be voted in accordance with the judgment of the persons named therein.
STOCKHOLDER
PROPOSALS AND NOMINATIONS FOR DIRECTOR
To
be considered for inclusion in the proxy statement relating to our 2025 Annual Meeting of Stockholders, we must receive stockholder proposals
(other than for director nominations) no later than 120 days prior to the date that is one year from this year’s mailing date.
To be considered for presentation at the 2025 Annual Meeting, although not included in the proxy statement, proposals (including director
nominations that are not requested to be included in our proxy statement) must be received no earlier than the close of business on the
150th day (January 28, 2025) nor later than the close of business on the 120th day (February 27, 2025) prior to the
first anniversary of the date of the preceding year’s Annual Meeting as first specified in the notice of meeting (without regard
to any postponements or adjournments of such meeting after the notice was first given). The notice must include information concerning
the nominee or proposal, as the case may be, and information concerning the proposing or nominating stockholder’s ownership of
and agreements related to our stock. If the 2025 Annual Meeting is held more than 30 days before or after the first anniversary of the
date of the 2024 Annual Meeting, the stockholder must submit notice of any such nomination and of any such proposal that is not made
pursuant to Rule 14a-8 by the later of the 90th day prior to the 2025 Annual Meeting or the 10th day following the date on which public
announcement of the date of such meeting is first made. Proposals that are not received in a timely manner will not be voted on at the
2025 Annual Meeting. If a proposal is received on time, the proxies that management solicits for the meeting may still exercise discretionary
voting authority on the proposal under circumstances consistent with the proxy rules of the SEC. All stockholder proposals should be
marked for the attention of Corporate Secretary, Orgenesis Inc., 20271 Goldenrod Lane, Germantown, MD, 20876.
In
order for stockholders to give timely notice of nominations for directors, other than those nominated by the Company, for inclusion on
a universal proxy card in connection with the 2025 annual meeting, notice must be submitted no later than April 28, 2025 and
include all of the information required by Rule 14a-19 under the Exchange Act. However, if the date of the 2025 annual meeting changes
by more than 30 days from this year’s Annual Meeting, Rule 14a-19 requires the notice be provided by the later of 60 calendar days
prior to the date of the 2025 annual meeting or the tenth (10th) calendar day following the day on which we first publicly announce the
date of the 2024 annual meeting.
Germantown,
MD
May
3, 2024
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