Blueprint
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
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐
Preliminary Proxy
Statement
☐ Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy
Statement
☐ Definitive
Additional Materials
☐ Soliciting
Material Pursuant to §240.14a-12.
INNOVUS PHARMACEUTICALS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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No fee required.
☐
Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to
which transaction applies:
______________________________________________________________________________________
2)
Aggregate number of securities to
which transaction applies:
______________________________________________________________________________________
3)
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value of transaction computed pursuant to Exchange Act Rule 0-11:
(set forth the amount on which the filing fee is calculated and
state how it was determined):
______________________________________________________________________________________
4)
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transaction:
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5)
Total fee paid:
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materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
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INNOVUS PHARMACEUTICALS, INC.
8845 Rehco Road
San Diego, CA 92121
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholders:
You are cordially invited to attend the Annual
Meeting of Stockholders of Innovus Pharmaceuticals, Inc., a Nevada
corporation (“Innovus” or “Company”), to be held on Tuesday, May 29, 2018 at
8:00 a.m., local time, at the Hyatt House San Diego, 10044
Pacific Mesa Boulevard, San Diego, California 92121. The purpose of our Annual Meeting is to do the
following:
1.
To elect five members of the Board of Directors to hold office
until the next annual meeting or until his or her successor has
been elected and qualified, or until their earlier resignation or
removal;
2.
To ratify the appointment of Hall & Company, Inc., an
independent registered public accounting firm, as our independent
auditors for the fiscal year ending December 31, 2018; and
3
To
consider and act upon any other matters that may properly come
before the meeting or any adjournment thereof.
These matters are more fully discussed in the attached proxy
statement.
Our Board of Directors has fixed the close of
business on April 26, 2018 as the record date
(“Record Date”) for the purpose of determining the
stockholders who are entitled to receive notice of and to vote at
the Annual Meeting or any adjournment thereof. A list of such
stockholders will be available for examination by any stockholder
at the Annual Meeting. For ten days prior to the Annual Meeting,
this list will also be available for inspection by stockholders,
for any purpose germane to the Annual Meeting, during normal
business hours at the Company’s executive offices at
8845 Rehco Road, San Diego, California 92121.
Our
Board of Directors unanimously recommends that you vote
“FOR” Proposal Nos. 1 and 2, which are described in
detail in the accompanying proxy
statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON MAY 29,
2018:
THE ANNUAL REPORT AND PROXY STATEMENT
ARE AVAILABLE ONLINE AT HTTP://CLIENT.IRWEBKIT.COM/INNOVUSPHARMA/FILINGS?QM_PAGE=38298
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By Order of the Board of Directors
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/s/
Bassam Damaj
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Bassam Damaj, Ph.D.
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President, Chief Executive Officer and Director
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San Diego, California
April 30, 2018
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YOUR VOTE IS IMPORTANT
You can vote electronically at www.iproxydirect.com/INNV. Your vote
is important. Whether or not you expect to attend the Annual
Meeting in person, we urge you to please vote your shares at your
earliest convenience. This will ensure the presence of a quorum at
the Annual Meeting. We urge you to promptly vote your shares by
signing, dating and mailing the enclosed proxy. Doing so will save
the Company the expense and extra work of additional solicitation.
Submitting your proxy now will not prevent you from voting your
shares at the Annual Meeting if you desire to do so, as your proxy
is revocable at your option.
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INNOVUS PHARMACEUTICALS, INC.
8845 Rehco Road
San Diego, CA 92121
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the
Board of Directors of Innovus Pharmaceuticals, Inc., a Nevada
corporation (the “Company”), for use at the 2018 Annual Meeting of
Stockholders (“Annual
Meeting”) to be held on
May 29, 2018 at 8:00 a.m., local time, and at any adjournment
or postponement thereof, at the Hyatt House San Diego, 10044
Pacific Mesa Boulevard, San Diego, California 92121. This proxy statement, the enclosed proxy card
and a copy of our Annual Report on Form 10-K for the year ended
December 31, 2017 are first being mailed to stockholders entitled
to vote on or about April 30, 2018.
Voting
The specific proposals to be considered and acted
upon at our Annual Meeting are summarized in the accompanying
notice (“Notice”) and are described in more detail in this
proxy statement. Stockholders of record at the close of
business on April 26, 2018 (the “Record Date”) are entitled to notice of and to vote at
the Annual Meeting. As of the close of business on the Record Date,
the Company had 194,046,100, shares of common stock, $0.001 par value per share
(“Common
Stock”), issued and
outstanding. Each holder of Common Stock is entitled to one vote
for each share held as of the Record Date.
Quorum
In
order for any business to be conducted at the Annual Meeting, the
holders of more than 50% of the shares entitled to vote must be
represented at the Annual Meeting, either in person or by properly
executed proxy. If a quorum is not present at the scheduled time of
the Annual Meeting, the stockholders who are present may adjourn
the Annual Meeting until a quorum is present. The time and place of
the adjourned Annual Meeting will be announced at the time the
adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
Required Vote for Approval
Proposal No. 1: Election of
Directors. The five
nominees who receive the greatest number of votes cast at the
Annual Meeting by the shares present in person or by proxy and
entitled to vote will be elected.
Proposal No. 2: Ratification
of Appointment of Auditors. To ratify the appointment of Hall & Company,
Inc. as our independent registered public accounting firm for the
fiscal year ending December 31, 2018, the number of votes cast
“FOR” must exceed the number of votes cast
“AGAINST” this Proposal.
Abstentions and Broker Non Votes
All
votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes. An abstention is
the voluntary act of not voting by a stockholder who is present at
a meeting and entitled to vote. A “broker non-vote”
occurs when a broker nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not
have discretionary power for that particular item and has not
received instructions from the beneficial owner. If you hold your
shares in “street name” through a broker or other
nominee, your broker or nominee may not be permitted to exercise
voting discretion with respect to some of the matters to be acted
upon. If you do not give your broker or nominee specific
instructions regarding such matters, your proxy will be deemed a
“broker non-vote.”
Under
Nevada law and our Bylaws, each matter (other than the election of
directors) is determined by the vote of the holders of a majority
of the voting power present or represented by proxy. For these
matters, abstentions are treated as shares present or represented
by proxy, so abstentions have the same effect as negative votes.
Broker non-votes, however, are not deemed to be present to
represent by proxy and, therefore, do not have any effect on the
outcome of these matters.
Proxies
You can vote by
proxy electronically at www.iproxydirect.com/INNV. If
your proxy is properly returned to the Company, the shares
represented thereby will be voted at the Annual Meeting in
accordance with the instructions specified thereon. If you return
your proxy without specifying how the shares represented thereby
are to be voted, the proxy will be voted
(i) FOR the election of five directors nominated by
our Board, (ii) FOR ratification of the appointment of Hall
& Company, Inc. as our independent registered public accounting
firm for fiscal year 2018, and (iii) at the discretion of the proxy
holders on any other matter that may properly come before the
Annual Meeting or any adjournment or postponement
thereof.
You may revoke or change your proxy at any time
before the Annual Meeting by filing with our Corporate Secretary at
our principal executive offices at 8845 Rehco Road, San
Diego, CA 92121, a notice of
revocation or another signed proxy with a later date. You may also
revoke your proxy by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting alone will not revoke
your proxy. If you are a stockholder whose shares are not
registered in your own name, you will need additional documentation
from your broker or record holder to vote personally at the Annual
Meeting.
Solicitation
We will bear the entire cost of solicitation,
including the preparation, assembly, printing and mailing of the
Notice, as well as the preparation and posting of this proxy
statement and any additional solicitation materials furnished to
the stockholders. Copies of any solicitation materials will be
furnished to brokerage houses, fiduciaries and custodians holding
shares in their names that are beneficially owned by others so that
they may forward this solicitation material to such beneficial
owners. In addition, we may reimburse such persons for their costs
in forwarding the solicitation materials to such beneficial owners.
The original solicitation of proxies may be supplemented by a
solicitation by telephone, e-mail or other means by our directors,
officers or employees. No additional compensation will be paid to
these individuals for any such services. Except as described above,
we do not presently intend to solicit proxies other than by mail,
telephone and electronic mail.
Important
Notice Regarding Availability of Proxy Materials
This proxy statement, the form of proxy card
and our Annual Report on Form 10-K for the year ended December 31,
2017, are available in the SEC Filings section of our website
at https://innovuspharma.com/investors/sec-filings/.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Our
Bylaws provide that the Board of Directors shall consist of not
less than one and no more than nine directors, and that upon any
change in the number of directors, any newly created directorships
or eliminated directorships shall be apportioned by the remaining
members of the Board of Directors or by stockholders. The
Company’s Board of Directors currently consists of four
directors, and these four directors along with a fifth additional
director nominee are nominated for election at the Annual Meeting.
Each nominee has confirmed that they will be able and willing to
serve as a director if elected. If any of the nominees becomes
unable or unwilling to serve, your proxy will be voted for the
election of a substitute nominee recommended by the current Board
of Directors. Upon recommendation of the Corporate
Governance/Nominating Committee, the Board of Directors has
nominated for election as directors at our Annual Meeting Dr.
Bassam Damaj, Dr. Henry Esber, Vivian Liu, Dr. Ziad Mirza, and Dean
Nuhaily.
Required Vote and Recommendation
The
election of directors requires the affirmative vote of a plurality
of the voting shares present or represented by proxy and entitled
to vote at the Annual Meeting. The five nominees receiving the
highest number of affirmative votes will be elected. Unless
otherwise instructed or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the election of the nominees.
The Board of Directors
recommends that the stockholders vote “FOR”
the election of Dr. Damaj, Dr. Esber, Ms. Liu, Dr.
Mirza and Mr.
Nuhaily.
The following sections set forth certain
information regarding the nominees for election as directors of the
Company. Other than Drs. Mirza and Damaj, who are first
generation cousins, there are no familial relationships among any
of our directors and/or executive officers.
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Name
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Age
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Title
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Served as Director Since
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Bassam
Damaj, Ph.D.
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49
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President, Chief Executive Officer and Director
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January 2013
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Henry
Esber, Ph.D.
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Chairman of the Board of Directors
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January 2011
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Vivian
Liu
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Director
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December 2011
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Director
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December
2011
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Dean
Nuhaily
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Director
Nominee
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Nominee
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Bassam Damaj, Ph.D. has served on our Board of Directors and as our
President and Chief Executive Officer since January, 2013, and as
our Chief Accounting Officer from July 2015 until September 6, 2016
and from April 6, 2018 to April 26, 2018. Before joining Innovus,
Dr. Damaj served as President and Chief Executive Officer of
Apricus Biosciences, Inc. (Nasdaq: APRI), a drug discovery and
development company (“Apricus Bio”), from December 2009 until November 2012.
Before joining Apricus Bio, Dr. Damaj was a co-founder of
Bio-Quant, Inc., a pre-clinical contract services company
(“Bio-Quant”) and served as the Chief Executive Officer
and Chief Scientific Officer and as a member of Bio-Quant’s
Board of Directors from its inception in June 2000 until its
acquisition by Apricus Bio in June 2011. In addition, Dr. Damaj was
the founder, Chairman, President and Chief Executive Officer of
R&D Healthcare, a wholesale drug distribution company, and the
co-founder of Celltek Biotechnologies, a drug discovery and
services company. He also served as a member of the Board of
Directors of CreAgri, Inc., a drug discovery company, and was a
member of the Scientific Advisory Board of MicroIslet, Inc., a drug
discovery company. From July 2016 to January 2018, Dr. Damaj served
as a member of the Board of Directors of Life on Earth, Inc.
(formerly Hispanica International
Delights of America, Inc.) (OTCQB:HISP), a health beverage
and food company. He is the author of
the Immunological Reagents and Solutions reference book, the
inventor of many patents and the author of numerous peer reviewed
scientific publications. Dr. Damaj won a U.S. Congressional award
for the Anthrax Multiplex Diagnostic Test in 2003. Dr. Damaj holds
a Ph.D. degree in Immunology/Microbiology from Laval University and
completed a postdoctoral fellowship in molecular oncology at McGill
University.
Dr.
Damaj’s significant experience with our business and his
significant executive leadership experience, including his
experience leading several pharmaceutical companies, were
instrumental in his selection as a member of the Board of
Directors.
Henry Esber,
Ph.D. has served as a member of
our Board of Directors since January 2011 and has served as
Chairman of the Board since January 2013. In 2000, Dr. Esber
co-founded Bio-Quant, and from 2000 to 2010, he served as its
Senior Vice President and Chief Business Development Officer. Dr.
Esber has more than 30 years of experience in the pharmaceutical
service industry. Dr. Esber served on the Board of Directors of
Apricus Bio from December 2009 to January 2013, and currently
serves on the Board of Directors of several private pharmaceutical
companies. Dr. Esber holds a Ph.D. in Immunology/Microbiology from
the West Virginia University School of Medicine, as well as an M.S.
in Public Health and Medical Parasitology from University of North
Carolina Chapel Hill. His PreMed B.S. is from Norfolk College of
William and Mary, now Old Dominion University.
Dr.
Esber is the Chair of our Board’s Corporate
Governance/Nominating Committee and is a member of the
Board’s Audit and Compensation Committees.
Dr.
Esber’s significant scientific background and experience was
instrumental in his selection as a member of the Board of
Directors.
Vivian Liu has served as a member of our Board of Directors
since December 2011, and served as our President, Chief Executive
Officer and Chief Financial Officer from December 2011 to January
22, 2013. Prior to that, she served as the President and Chief
Executive Officer of FasTrack Pharma (“FasTrack
Pharma”), a
pharmaceutical company, from January 2011 to December 2011. Ms. Liu
is currently the Chief Operating Officer of Cesca Therapeutics,
Inc. (“Cesca”). She has been a member of the Board of
Directors of Cesca since November 2016. From February 2013 to March
2017, Ms. Liu served as Managing Director of OxOnc Services
Company, an oncology development company. In 1995, Ms. Liu
co-founded NexMed, Inc., a Delaware corporation
(“NextMed”), which in 2010 was renamed to Apricus
BioSciences, Inc. Ms. Liu was NexMed’s President and Chief
Executive Officer from 2007 to 2009. Prior to her appointment as
President, Ms. Liu served in several executive capacities,
including Executive Vice President, Chief Operating Officer, Chief
Financial Officer and Vice President of Corporate Affairs. She was
appointed as a director of NexMed in 2007 and served as Chairman of
its board of directors from 2009 to 2010. Ms. Liu has an M.P.A.
from the University of Southern California and has a B.A. from the
University of California, Berkeley.
Ms. Liu
is the Chair of our Board’s Audit Committee and is a member
of the Board’s Compensation and Corporate
Governance/Nominating Committees.
Ms.
Liu’s significant executive leadership experience, including
her experience leading several pharmaceutical companies, as well as
her membership on public company boards was instrumental in her
selection as a member of the Board of Directors.
Ziad Mirza, M.B.A., MD has served as a member of our Board of Directors
since December 2011, and served as Chairman of our Board of
Directors from December 2011 to January 2013. He also served as
FasTrack Pharma’s Acting Chief Executive Officer from March
2010 to December 2010. Since February 2016, Dr. Mirza has been the
Chief Medical Officer of HyperHeal Hyperbarics, Inc., an outpatient
hyperbaric oxygen therapy company. He is the President and co-founder of Baltimore
Medical and Surgical Associates. He is a Certified Medical Director
of long term care through the American Medical Directors
Association. He is also a Certified Physician Executive from the
American College of Physician Executives. He consults for
pharmaceutical companies on clinical trial design. Dr. Mirza has an
M.D. from the American University of Beirut and completed his
residency at Good Samaritan Hospital in Baltimore, Maryland. He
received an M.B.A. from the University of
Massachusetts.
Dr.
Mirza is Chair of our Board’s Compensation Committee and is a
member of the Board’s Audit and Corporate
Governance/Nominating Committees.
Dr.
Mirza’s significant medical and scientific background and
experience was instrumental in his selection as a member of the
Board of Directors.
New
Director Nominee
Dean Nuhaily
is the President and Founder of the
Shoe Shack Corporation. He is serial retail and franchise
entrepreneur and the co-founder and co-owner of Work Zone Inc. Mr.
Nuhaily served as the community representative for the ILAC
committee at Bio-Quant, Inc. from 2006-2010 (acquired by Apricus
Biosciences in 2009) and on the Board of Sorrento Pharmaceuticals,
Inc. from 2010-2012. He holds a business management degree from
Southwestern College of Business.
Mr.
Nuhaily's significant business and executive experience was
instrumental in his selection as a nominee to the Board of
Directors.
The
nominees have consented to their nomination to the Board of
Directors, and have agreed to serve if elected. The Company has no
reason to believe that the nominees will be unavailable to serve as
directors.
There have been no events under any bankruptcy act, no criminal
proceedings and no judgments or injunctions material to the
evaluation of the ability and integrity of any director or nominee
during the past ten years.
When
the accompanying proxy is properly executed and returned, the
shares it represents will be voted in accordance with the
directions indicated thereon. We expect the nominees to be able to
serve if elected, but if a nominee notifies us before the Annual
Meeting that he or she is unable to do so, then the proxies will be
voted for a substitute nominee or nominees.
CORPORATE GOVERNANCE, BOARD COMPOSITION AND BOARD
COMMITTEES
Term of Office
Pursuant
to our Bylaws, each member of our Board of Directors shall serve
from the time they are duly elected and qualified until our next
Annual Meeting of Stockholders, or their death, resignation or
removal from office.
Board Member Independence
Although
our Common Stock is not currently listed on a national securities
exchange, we have elected to adopt the NASDAQ Stock Market Rules to
determine director independence. Three of our four current Board
members – Dr. Esber, Ms. Liu and Dr. Mirza, and Mr. Nuhaily,
our new Board nominee, are considered independent (as independence
is defined by Rule 5605(a)(2) of the NASDAQ Stock Market
Rules).
Board Risk Oversight
Our
Board administers its oversight function through both regular and
special meetings and by frequent telephonic updates with our senior
management. A key element of these reviews is gathering and
assessing information relating to risks of our business. All
business is exposed to risks, including unanticipated or undesired
events or outcomes that could impact an enterprise’s
strategic objectives, organizational performance and stockholder
value. A fundamental part of risk management is not only
understanding such risks that are specific to our business, but
also understanding what steps management is taking to manage those
risks and what level of risk is appropriate for us. In setting our
business strategy, our Board assesses the various risks being
mitigated by management and determines what constitutes an
appropriate level of risk.
Nominations for Directors
Our Corporate Governance/Nominating Committee
evaluates and recommends to the Board of Directors nominees for
each election of directors. There are no stated minimum criteria
for director nominees; rather, in considering potential new
directors, the Corporate Governance/Nominating Committee considers
a variety of factors and may identify and evaluate individuals from
various disciplines and backgrounds. Among the qualifications to be
considered in the selection of candidates are the following: broad
experience in business, finance or administration; familiarity with
the Company’s industry; prominence and reputation in a
particular profession or field of endeavor; and whether the
individual has the time available to devote to the work of the
Board and one or more of its committees. The Corporate
Governance/Nominating Committee also reviews the activities and
associations of each candidate to determine the independence of the
candidate under applicable exchange and Securities and Exchange
Commission (“SEC”) rules and to ensure that there is no
legal impediment, conflict of interest or other consideration that
might hinder or prevent service on the Board. In addition to these
factors, the Corporate Governance/Nominating Committee may also
consider such other factors as it may deem relevant or in the best
interests of the Company and its stockholders. The Corporate
Governance/Nominating Committee recognizes that under applicable
regulatory requirements at least one member of the Board must, and
believes that it is preferable that more than one member of the
Board should, meet the criteria for an “audit committee
financial expert” as defined by SEC rules. Further, although
the Company does not have a formal diversity policy, the Corporate
Governance/Nominating Committee seeks to nominate directors that
bring to the Company a variety of perspectives, skills, expertise,
and sound business understanding and judgment, derived from
business, professional, governmental, finance, community and
industry experience.
The
Corporate Governance/Nominating Committee identifies nominees by
first evaluating the current members of the Board of Directors
willing to continue in service. Current members of the Board of
Directors with skills and experience that are relevant and
considered valuable to the Company’s business and who are
willing to continue in service are considered for re-nomination,
balancing the value of continuity of service by existing members of
the Board of Directors with that of obtaining new perspectives. If
any member of the Board of Directors up for re-election at an
upcoming annual meeting of stockholders does not wish to continue
in service, the Corporate Governance/Nominating Committee would
identify a new nominee to replace such director in light of the
criteria and factors described above. If the Corporate
Governance/Nominating Committee believes that the Board of
Directors requires additional candidates for nomination, it may
explore alternative sources for identifying additional candidates.
This may include engaging, as appropriate, a third party search
firm to assist in identifying qualified candidates.
The Corporate Governance/Nominating Committee
reviews all director nominees, including those recommended by
stockholders, in accordance with the factors and qualifications
described above to determine whether they possess attributes the
committee believes would be beneficial and valuable to the Company.
The Corporate Governance/Nominating Committee will select qualified
candidates and make its recommendations to the Board, which will
formally decide whether to nominate the recommended candidates for
election to the Board. Stockholders may recommend nominees for
consideration by the Corporate Governance/Nominating Committee by
complying with certain notification requirements set forth in our
Bylaws. These requirements provide that a stockholder who desires
to recommend a candidate for nomination to our Board of Directors
must do so in writing to our Corporate Secretary at our principal
executive offices, which written notice must be received no later
than 90 days before the date of the annual meeting of stockholders
at which directors are to be elected. The stockholder’s
written notice must include, among other things as specified in our
Bylaws, certain personal identification information about the
stockholder and its recommended director nominee(s); the principal
occupation or employment of the recommended director nominee(s);
the class and number of shares of the Company that are beneficially
owned by the stockholder and its recommended director nominee(s);
and any other information relating to the recommended director
nominee(s) that is required to be disclosed in solicitations for
proxies for the election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”). Stockholders may
obtain a copy of our Bylaws by writing to our Corporate Secretary
at Innovus Pharmaceuticals, Inc., c/o Corporate Secretary, 8845
Rehco Road, San Diego, California 92121, or by accessing our Bylaws
on the Investor Relations section of our website at
http://www.innovuspharma.com. A stockholder who complies in full
with all of the notice provisions set forth in our Bylaws will be
permitted to present the director nominee at the applicable annual
meeting of stockholders, but will not be entitled to have the
nominee included in our proxy statement for the annual meeting
unless an applicable SEC rule requires that we include the director
nominee in our proxy statement.
Stockholder Communications with Directors
Stockholders
may communicate with the Board of Directors by sending a letter to
the Corporate Secretary, Innovus Pharmaceuticals, Inc., 8845 Rehco
Road, San Diego, CA 92121. Each communication must set forth the
name and address of the stockholder on whose behalf the
communication is sent and should indicate in the address whether
the communication is intended for the entire Board, the
non-employee directors as a group or an individual director. Each
communication will be screened by the Corporate Secretary or his or
her designee to determine whether it is appropriate for
presentation to the Board or any specified director(s). Examples of
inappropriate communications include junk mail, spam, mass
mailings, resumes, job inquiries, surveys, business solicitations
and advertisements, as well as unduly hostile, threatening,
illegal, unsuitable, frivolous, patently offensive or otherwise
inappropriate material. Communications determined to be appropriate
for presentation to the Board or the director(s) to whom they are
addressed will be submitted to the Board or such director(s) on a
periodic basis. Any communications that concern accounting,
internal control or auditing matters will be handled in accordance
with procedures adopted by the Audit Committee.
Code of Business Conduct and Ethics
Our
Board has adopted a Code of Business Conduct and Ethics, which is
available for review on our website at http:/innovuspharma.com and
is also available in print, without charge, to any stockholder who
requests a copy by writing to us at Innovus Pharmaceuticals, Inc.,
8845 Rehco Road, San Diego, CA 92121, Attention: Investor
Relations. A form of the Code of Business Conduct and Ethics was
filed as Exhibit 14.1 to our Annual Report on Form 10-K for
December 31, 2017, which was filed with the SEC on April 2,
2018.
Each
of our directors, employees and officers, including our Chief
Executive Officer, Executive Vice President, Corporate Development
and General Counsel and Vice President, Chief Financial Officer,
and all of our other principal executive officers, are required to
comply with the Code of Business Conduct and Ethics. There have not
been any waivers of the Code of Business Conduct and Ethics
relating to any of our executive officers or directors in the past
year.
Meetings and Committees of the Board
Our
Board is responsible for overseeing the management of our business.
We keep our directors informed of our business at meetings and
through reports and analyses presented to the Board and the
committees of the Board. Regular communications between our
directors and management also occur outside of formal meetings of
the Board and committees of the Board.
Meeting Attendance
Our
Board generally holds meetings on a quarterly basis, but may hold
additional meetings as required. In 2017, the Board held four
meetings. Each of our directors attended 100% of the Board meetings
that were held during the periods when he or she was a director and
100% of the meetings of each committee of the Board on which he
served that were held during the periods that he served on such
committee. We do not have a policy requiring that directors attend
our annual meetings of stockholders.
Committees of the Board of Directors
Our
Board currently has three standing committees to facilitate and
assist the Board in the execution of its responsibilities: the
Audit Committee, the Compensation Committee and the Corporate
Governance/Nominating Committee, all of which were created in
mid-2017.
Audit Committee
Our Audit Committee is currently composed of Ms.
Lui (Chair), Dr. Esber and Dr. Mirza. Our Board has affirmatively
determined that each member of the Audit Committee in 2017 was
independent under Nasdaq Marketplace Rule 5605(a)(2) and satisfied
all other qualifications under Nasdaq Marketplace Rule 5065(c) and
the applicable rules of the SEC, and that each current member of
the Audit Committee is independent under Nasdaq Marketplace Rule
5605(a)(2) and satisfies all other qualifications under Nasdaq
Marketplace Rule 5605(c) and the applicable rules of the SEC. Our
Board has also affirmatively determined that Ms. Liu qualifies as
an “audit committee financial expert,” as such term is
defined in Regulation S-K under the Securities Act of 1933, as
amended (the “Securities
Act”). The Audit
Committee held one meeting in 2017 as a separate committee and
three meetings as the full Board of Directors acting to review the
financials of the Company.
The
Audit Committee acts pursuant to a written charter that has been
adopted by the Board, which is available for review on our website
at http://www.innovuspharma.com. The responsibilities of the Audit
Committee include overseeing, reviewing and evaluating our
financial statements, accounting and financial reporting processes,
internal control functions and the audits of our financial
statements. The Audit Committee is also responsible for the
appointment, compensation, retention, and as necessary, the
termination of our independent registered public accounting
firm.
Compensation Committee
Our
Compensation Committee is currently composed of Dr. Mirza (Chair),
Ms. Liu and Dr. Esber. Our Board has affirmatively determined that
each member of the Compensation Committee during 2017 was
independent under Nasdaq Marketplace Rule 5605(a)(2) and satisfied
all other qualifications under Nasdaq Marketplace Rule 5065(d) and
the applicable rules of the SEC, and that each current member of
the Compensation Committee is independent under Nasdaq Marketplace
Rule 5605(a)(2) and satisfies all other qualifications under Nasdaq
Marketplace Rule 5065(d) and the applicable rules of the SEC. The
Compensation Committee held no meetings in 2017.
The
Compensation Committee acts pursuant to a written charter that has
been adopted by the Board, which is available for review on our
website at innovuspharma.com. The responsibilities of the
Compensation Committee include reviewing and making recommendations
to our Board concerning the compensation and benefits of our
executive officers, including our Chief Executive Officer, and
directors, overseeing the administration of our stock option and
employee benefits plans, and reviewing general policies relating to
compensation and benefits.
Corporate Governance/Nominating Committee
Our
Corporate Governance/Nominating Committee is currently composed of
Dr. Esber (Chair), Ms. Liu and Dr. Mirza. Our Board has
affirmatively determined that each member of the Corporate
Governance/Nominating Committee during 2017 was independent under
Nasdaq Marketplace Rule 5605(a)(2), and that each current member of
the Corporate Governance/Nominating Committee is independent under
Nasdaq Marketplace Rule 5605(a)(2). The Corporate
Governance/Nominating Committee held no meetings in
2017.
The
Corporate Governance/Nominating Committee acts pursuant to a
written charter that has been adopted by the Board, which is
available for review on our website at
http://www.innovuspharma.com. The responsibilities of the Corporate
Governance/Nominating Committee include evaluating and making
recommendations to the Board with respect to director nominees and
providing oversight of our corporate governance policies and
practices.
Board Leadership Structure
The
Board does not have a policy regarding the separation of the roles
of the Chief Executive Officer and Chairman of the Board, as the
Board believes it is in the best interest of the Company and its
stockholders to make that determination based on the position and
direction of the Company and the membership of the Board, from time
to time. Currently, Dr. Esber, an independent director, serves as
our Chairman of the Board. Dr. Damaj currently serves as our
principal executive officer and as a director.
Board Role in Risk Management
The
Board as a whole has responsibility for risk oversight, and each
Board committee has responsibility for reviewing certain risk areas
and reporting to the full Board. The oversight responsibility of
the Board and its committees is enabled by management reporting
processes that are designed to provide visibility to the Board
about the identification, assessment, and management of critical
risks and management’s risk mitigation strategies in certain
focus areas. These areas of focus include strategic, operational,
financial and reporting, succession and compensation, and other
areas. The Board and its committees oversee risks associated with
their respective areas of responsibility, as summarized below. Each
committee meets with key management personnel and representatives
of outside advisors as required.
|
Board/Committee
|
|
Primary Areas of Risk Oversight
|
|
Full
Board
|
|
Risks
and exposures associated with our business strategy and other
current matters that may present material risk to our financial
performance, operations, prospects or reputation.
|
|
Audit
Committee
|
|
Overall
policies with respect to risk assessment and risk management,
material pending legal proceedings involving the Company and other
contingent liabilities, any potential related party or conflict of
interest transactions, as well as other risks and exposures that
may have a material impact on our financial
statements.
|
|
Compensation
Committee
|
|
Risks
and exposures associated with management succession planning and
executive compensation programs and arrangements, including
incentive plans.
|
|
Corporate
Governance/Nominating Committee
|
|
Risks
and exposures associated with director succession planning,
corporate governance, and overall board effectiveness.
|
Company Policy Regarding Related Party Transactions
The charter of the Audit Committee of our Board
tasks the Audit Committee with reviewing all related party
transactions for potential conflict of interest situations on an
ongoing basis (if such transactions are not reviewed and overseen
by another independent body of the Board). In accordance with that
policy, the Audit Committee’s general practice is to review
and oversee any transactions that are reportable as related party
transactions under the Financial Accounting Standards Board
(“FASB”) and SEC rules and regulations. Management
advises the Audit Committee and the full Board of Directors on a
regular basis of any such transaction that is proposed to be
entered into or continued and seeks approval.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Exchange Act requires our executive officers,
directors and persons who beneficially own more than 10% of our
Common Stock to file initial reports of ownership and reports of
changes in ownership with the SEC. Such persons are required by SEC
regulations to furnish us with copies of all Section 16(a) reports
filed by such persons.
Based
solely on our review of the copies of such reports furnished to us,
we believe that during the fiscal year ended December 31, 2017, all
executive officers, directors and greater than 10% beneficial
owners of our Common Stock complied with the reporting requirements
of Section 16(a) of the Exchange Act.
Stockholder Communications with the Board of Directors
Our
Board of Directors provides stockholders with the ability to send
communications to the Board of Directors, and stockholders may do
so at their convenience. In particular, stockholders may send their
communications to:
Board of Directors
c/o Corporate Secretary
Innovus Pharmaceuticals, Inc.
8845 Rehco Road
San Diego, California 92121
All
communications received by the Corporate Secretary are relayed to
the Board of Directors of the Company. Members of the Board of
Directors are not required to attend our Annual Meetings of
Stockholders.
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT
OF HALL & COMPANY, INC. AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31,
2018
Upon
the recommendation of our Audit Committee, the Board of Directors
has appointed Hall & Company, Inc. as our independent
registered public accounting firm for the current fiscal year
ending December 31, 2018, and hereby recommends that the
stockholders ratify such appointment. Hall & Company, Inc.
has served as our independent registered public accounting firm
since February 16, 2016.
The
Board of Directors and the Audit Committee may terminate the
appointment of Hall & Company, Inc. as the Company’s
independent registered public accounting firm without the approval
of the stockholders whenever the Board of Directors and the Audit
Committee deems such termination necessary or
appropriate.
Representatives
of Hall & Company, Inc. will be present at the Annual Meeting,
or available by telephone, and will have an opportunity to make a
statement if they so desire and to respond to appropriate questions
from stockholders.
Principal Accountant Fees and Services
The
following table presents aggregate fees for the fiscal years ended
December 31, 2017 and 2016, for professional services rendered
by Hall & Company, Inc.:
|
|
|
|
|
Audit Fees
(1)
|
$57,225
|
$46,380
|
|
Audit-Related Fees
(2)
|
30,580
|
9,185
|
|
Tax
Fees
|
-
|
-
|
|
Other
Fees
|
-
|
-
|
|
Total
|
$87,805
|
$55,565
|
(1)
“Audit
Fees” represent fees for professional services provided in
connection with the audit of our annual consolidated financial
statements, review of consolidated financial statements included in
our quarterly reports and related services normally provided in
connection with statutory and regulatory filings and engagements by
Hall & Company, Inc.
(2)
“Audit-Related
Fees” represent
fees for professional services provided in connection with the
review of our registration statements on Forms S-8 and S-1
by Hall & Company, Inc.
The
Board of Directors has considered whether the provision of
non-audit services is compatible with maintaining the principal
accountant’'s independence. There were no fees
billed by or paid to our independent registered public accounting
firm during the years ended December 31, 2017 and 2016 for tax
compliance, tax advice or tax planning services or for financial
information systems design and implementation
services.
Determination of Independence
The Audit Committee has received and reviewed the
written disclosures and the letter from the independent registered
public accounting firm required by the Public Company Accounting
Oversight Board (“PCAOB”) Rule 3526, Communication with Audit
Committees Concerning Independence, and has discussed with its auditors its
independence from the Company.
Audit Committee Policies and Procedures
The Audit Committee acts pursuant to a written
charter that has been adopted by the Board, which is available for
review on our website at http://innovuspharma.com. The
responsibilities of the Audit Committee include overseeing,
reviewing and evaluating our financial statements, accounting and
financial reporting processes, internal control functions and the
auditing of our financial statements. The Audit Committee is also
responsible for the appointment, compensation, retention, and as
necessary, the termination of our independent registered public
accounting firm. We adhere to accounting standards set forth
by the Financial Accounting Standards Board with respect to
financial reporting and discussed with the
independent registered public accounting firm the matters required
to be discussed by Statement on Auditing Standards No.
1301, Communications
with Audit Committees, as adopted by the
PCAOB.
Our Board Audit Committee, pre-approves all services to be provided
by Hall & Company, Inc. All fees paid to Hall &
Company, Inc. for services performed in 2017 and 2016 were
pre-approved by our Audit Committee.
Required Vote and Recommendation
Ratification
of the selection of Hall & Company, Inc. as the Company’s
independent registered public accounting firm for the fiscal year
ending December 31, 2018, requires the affirmative vote of a
majority of the shares present or represented by proxy and entitled
to vote at the Annual Meeting. Under Nevada law and our Bylaws, an
abstention will have the same legal effect as a vote against the
ratification of Hall & Company, Inc., and each broker non-vote
will reduce the absolute number, but not the percentage, of
affirmative votes necessary for approval of the ratification.
Unless otherwise instructed on the proxy or unless authority to
vote is withheld, shares represented by executed proxies will be
voted “FOR” the ratification of Hall & Company,
Inc. as the Company’s independent registered public
accounting firm for the fiscal year ending December 31,
2018.
The Board of Directors recommends that stockholders vote
“FOR” the ratification of the selection of Hall &
Company, Inc. as the Company’s independent registered public
accounting firm for the fiscal year ending December 31,
2018.
EXECUTIVE OFFICERS
The following table sets forth
information regarding the executive officers of the
Company:
|
Name
|
|
Age
|
|
Title
|
|
|
|
|
|
|
|
Bassam
Damaj, Ph.D.
|
|
49
|
|
Chief
Executive Officer, President, Director
|
|
|
|
|
|
|
|
Randy
Berholtz, M.B.A., JD
|
|
56
|
|
Executive
Vice President, Corporate Development, and General
Counsel
|
|
|
|
|
|
|
|
Ryan
Selhorn, CPA
|
|
36
|
|
Vice
President, Chief Financial Officer
|
The
Chief Executive Officer and other officers of the Company hold
their respective offices at the discretion of the Board. The
background and principal occupations of each of our executive
officers are set forth below:
Bassam Damaj, Ph.D. See Dr.
Damaj’s background and principal occupations under
“Election of Directors” above.
Randy Berholtz, MBA, JD has served as
our Executive Vice President, Corporate Development and General
Counsel since January 9, 2017. He also became the Secretary of the
Company at that time. Mr. Berholtz was previously a part-time
consultant for the Company from July 2013 to mid-May 2016. Mr.
Berholtz was recently the founding partner of the Sorrento Valley
Law Group, a healthcare and life sciences law firm. Previously,
from 2011 to 2013, he was the Executive Vice President, General
Counsel and Secretary of Apricus Biosciences, Inc.; from 2004 to
2010, he was the Vice President, General Counsel and Secretary of
the ACON Group of private U.S. and Chinese life science companies;
from 2003 to 2004, he was the Chief Operating Officer and General
Counsel to Inglewood Ventures, a life sciences venture capital
firm; and from 2000 to 2003, he held multiple titles and rose to
become the Acting General Counsel and Secretary of Nanogen, Inc., a
genomics tools company. From 1992 to 2000, Mr. Berholtz was in
private practice with law firms in New York and San Diego, and from
1990 to 1991, he was a law clerk to Judge Jerry E. Smith on the
U.S. Court of Appeals for the Fifth Circuit. Mr. Berholtz is a
member of the Board of Directors of Life on Earth, Inc., a health
beverage and food company, and Larada Health, Inc., a private
company in the medical supply business, and is a Senior Advisor to
Mesa Verde Ventures, a life sciences venture capital firm. Mr.
Berholtz received his B.A. from Cornell University, his M.Litt.
from Oxford University, where he was a Rhodes Scholar, his J.D.
from Yale University and his M.B.A. from the University of San
Diego School of Business.
Ryan Selhorn, CPA has served as our Vice
President and Chief Financial Officer since April 27, 2018. From
July 2013 to April 2018, he was the Chief Financial Officer and
Chief Accounting Officer of Signature Analytics, an outsourced
finance and accounting firm. From October 2003 to July 2013, he was
an Audit Senior Manager with Grant Thornton LLP, a financial
accounting firm. Mr. Selhorn has significant experience with
venture financings, public equity offerings, public debt offerings,
mergers and acquisitions, interaction with the SEC and PCAOB, and
implementation and monitoring compliance with the requirements of
the Sarbanes-Oxley Act. Additionally, Mr. Selhorn has
participated in several financial due diligence processes for
acquisitions and capital financings. Mr. Selhorn received his B.S.
in Accounting and Finance from Georgetown University, McDonough
School of Business, and he is a certified public accountant in
California.
Indemnification of Officers and Directors
To
the extent permitted by Nevada law and our Bylaws, we will
indemnify our directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being or
having been Company directors or officers unless, in any such
action, they are adjudged to have acted with gross negligence or
willful misconduct. Indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted for
directors, officers and controlling persons of the Company pursuant
to the foregoing or otherwise. However, the Company has been
advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information
concerning the compensation paid to the Company’s Chief
Executive Officer, and the Company’s two most highly
compensated executive officers other than its Chief Executive
Officer, who were serving as executive officers as of December 31,
2017 and whose annual compensation exceeded $100,000 during such
year (collectively the “Named Executive
Officers”):
Summary Compensation Table
|
Name
and Principal Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bassam Damaj Ph.
D.,
|
2017
|
$585,640
|
(1)
|
$575,000
|
(2)
|
$-
|
$-
|
|
$-
|
$1,160,640
|
|
President and Chief
Executive Officer, and former Principle Officer (4)
|
2016
|
$532,400
|
(1)
|
$-
|
|
$-
|
$240,000
|
(3)
|
$-
|
$772,400
|
|
|
|
|
|
|
|
|
|
|
|
Randy Berholtz,
MBA/JD
Executive
Vice President,
Corporate
Development and General Counsel
(5)
|
2017
|
$273,718
|
|
$87,159
|
|
$-
|
$420,000
|
(3)
|
$-
|
$780,877
|
|
|
|
|
|
|
|
|
|
|
|
|
Rauly Gutierrez,
CPA(6)
|
2017
|
$200,000
|
|
$45,625
|
|
$-
|
$47,500
|
(3)
|
$-
|
$293,125
|
|
(1)
|
Pursuant
to the terms of a line of credit
convertible debenture with Dr. Damaj (the
“LOC
Convertible Debenture”), Dr. Damaj agreed not to
draw a salary pursuant to his employment agreement for so long as
payment of such salary would jeopardize the Company’s ability
to continue as a going concern and not to draw any salary accrued
through December 31, 2015. Salary through June 30, 2016 was accrued
for and remained unpaid as of December 31, 2017. Effective July 1,
2016, Dr. Damaj started receiving his salary in cash.
|
|
(2)
|
Dr. Damaj’s bonus paid for 2017 and 2016.
|
|
(3)
|
Represents
the total grant date fair value, as determined under FASB ASC Topic
718, Stock Compensation, of
restricted stock unit awards granted during the respective fiscal
year.
|
|
(4)
|
Dr.
Damaj served as Chief Financial Officer from July 2015 until
September 6, 2016, when Mr. Robert E. Hoffman became Executive Vice
President and Chief Financial Officer.
|
| (5) |
Mr. Berholtz
started with the Company on January 9, 2017.
|
|
(6)
|
Mr.
Gutierrez started with the Company in September 2016 but only
became an executive officer of the Company in April 2017. Mr.
Gutierrez resigned from the Company on April 5, 2018.
|
Employment Agreements
Bassam Damaj. On January 22, 2013, the Company
entered into an employment agreement (the “Damaj Employment Agreement”) with
Dr. Bassam Damaj to serve as its President and Chief Executive
Officer, which was amended on January 21,
2015.
The
Damaj Employment Agreement has an initial term of five years, which
term will be extended by an additional year on the fourth and each
subsequent anniversary. Dr. Damaj earned a base salary of
$375,000 for the first year, $440,000 in the second year and
increasing a minimum of 10% per year thereafter. Dr.
Damaj’s salary will be accrued and not paid for so long as
payment of such salary would jeopardize the Company’s ability
to continue as a going concern, in Dr. Damaj’s sole
determination. Dr. Damaj will have annual cash bonus targets equal
to 75% and 30%, respectively, of base salary, based on performance
objectives established by the Board of Directors, with the Board of
Directors determining the amount of the annual bonus.
Dr.
Damaj received 6.0 million shares of restricted stock units
(“RSUs”)
covering shares of Common Stock on January 22, 2013, of which 2.0
million shares vested immediately, and the remaining 4.0 million
shares vested in eight equal quarterly installments beginning on
April 1, 2013.
Upon
termination of the Damaj Employment Agreement for any reason, Dr.
Damaj will receive (i) a pro-rata bonus during that fiscal year
based on the number of days employed during that fiscal year, and
(ii) Company group medical, dental and vision insurance coverage
for Dr. Damaj and his dependents for 12 months paid by the
Company.
Pursuant to the
Damaj Employment Agreement, in the event Dr. Damaj’s
employment is terminated as a result of death, disability or
without Cause, or Dr. Damaj resigns for Good Reason, Dr. Damaj or
his estate, as applicable, is entitled to the following payments
and benefits, provided that a mutual release of claims is executed:
(1) a cash payment in an amount equal to 1.5 times his then base
salary and annual target bonus amount, or two times his then base
salary and annual target bonus amount if such termination occurs
within 24 months of a change of control; (2) Company group medical,
dental and vision insurance coverage for Dr. Damaj and his
dependents for 24 months paid by the Company; and (3) the automatic
acceleration of the vesting and exercisability of outstanding
unvested stock awards.
For
purposes of the Damaj Employment Agreement,
“Cause” generally means (1) commission of fraud or
other unlawful conduct in the performance of duties for the
Company, (2) conviction of or, entry into, a plea of
“guilty” or “no contest” to a felony under
United States federal or state law, and such felony is either
work-related or materially impairs Dr. Damaj’s ability to
perform services to the Company, and (3) a willful, material
breach of the Damaj Employment Agreement that causes material harm
to the Company, provided, however, that the Board of Directors must
provide 30 days prior written notice of its intention to terminate
for Cause and give Dr. Damaj the opportunity to cure or remedy such
alleged Cause and present Dr. Damaj’s case to the Board of
Directors and afterwards, at least 75% of the Board of Directors
(except for Dr. Damaj in the event he is the subject of the
hearing) affirmatively determines that termination is for
Cause.
For
purposes of the Damaj Employment Agreement, “Good
Reason” generally means that within one year prior to the
date of resigning, one of the following occurs: (1) a material
diminution in Dr. Damaj’s title, authority, duties or
responsibilities (for Dr. Damaj, this includes remaining a member
of the Board of Directors), (2) a reduction in Dr.
Damaj’s base salary or target bonus amount, (3) a change
in the geographic location greater than 25 miles from the current
office at which Dr. Damaj must perform his duties, (4) the
Company elects not to renew the Damaj Employment
Agreement for another term, or (5) the Company materially
breaches any provision of the Damaj Employment Agreement, provided,
however, that Dr. Damaj must provide 30 days prior written notice
of his intention to resign for Good Reason, which notice must be
given within 90 days of the initial occurrence of such cause and
gives the Company the opportunity to cure or remedy such alleged
Good Reason.
Randy Berholtz. The Company and Mr. Berholtz entered into an
employment agreement, effective January 9, 2017 (the
“Berholtz Employment
Agreement”), wherein Mr.
Berholtz received an annual base salary of $280,000 as well as an
annual bonus based on personal performance and as approved by the
Board of Directors. The target bonus amount was 35% of his annual
base salary.
Mr.
Berholtz received RSUs covering 2.0 million shares of Common Stock;
666,666 of which vested after one year of employment. The remaining
RSUs will vest in eight equal quarterly installments over two years
of continued service.
Upon
termination of the Berholtz Employment Agreement for any reason,
Mr. Berholtz will receive (i) a pro-rata bonus during that fiscal
year based on the number of days employed during that fiscal year,
and (ii) Company group medical, dental and vision insurance
coverage for Mr. Berholtz and his dependents for six months paid by
the Company.
Pursuant to the
Berholtz Employment Agreement, if Mr. Berholtz’s employment
is terminated as a result of death, disability or without Cause, or
Mr. Berholtz resigns for Good Reason, Mr. Berholtz or his estate,
as applicable, is entitled to the following payments and benefits,
provided that a mutual release of claims is executed: (1) a cash
payment in an amount equal to six months of his then base salary
and annual target bonus amount, if such termination occurs within
six months of a change of control; (2) Company group medical,
dental and vision insurance coverage for Mr. Berholtz and his
dependents for six months paid by the Company; and (3) the
automatic acceleration of the vesting and exercisability of
outstanding unvested stock awards.
For
purposes of the Berholtz Employment Agreement,
“Cause” generally means (1) commission of fraud or
other unlawful conduct in the performance of duties for the
Company, (2) conviction of or, entry into, a plea of
“guilty” or “no contest” to a felony under
United States federal or state law, and such felony is either
work-related or materially impairs Mr. Berholtz’s ability to
perform services to the Company, and (3) a willful, material
breach of the Berholtz Employment Agreement that causes material
harm to the Company, provided, however, that the Board of Directors
must provide 30 days prior written notice of its intention to
terminate for Cause and give Mr. Berholtz the opportunity to cure
or remedy such alleged Cause and present Mr. Berholtz’s case
to the Board of Directors and afterwards, at least 75% of the Board
of Directors (except for Mr. Berholtz in the event he is the
subject of the hearing) affirmatively determines that termination
is for Cause.
For
purposes of the Berholtz Employment Agreement, “Good
Reason” generally means that within one year prior to the
date of resigning, one of the following occurs: (1) a material
diminution in Mr. Berholtz’s title, authority, duties or
responsibilities (for Mr. Berholtz, this includes remaining a
member of the Board of Directors), (2) a reduction in Mr.
Berholtz’s base salary or target bonus amount, (3) a
change in the geographic location greater than 25 miles from the
current office at which Mr. Berholtz must perform his duties,
(4) the Company elects not to renew the Berholtz
Employment Agreement for another term, or (5) the Company
materially breaches any provision of the Berholtz Employment
Agreement, provided, however, that Mr. Berholtz must provide 30
days prior written notice of his intention to resign for Good
Reason, which notice must be given within 90 days of the initial
occurrence of such cause and gives the Company the opportunity to
cure or remedy such alleged Good Reason.
Mr.
Berholtz’s employment agreement was amended by the Board of
Directors of the Company on April 5, 2018 to provide for an annual
bonus of 40% of his base salary and to provide for nine (9) months
of severance in case of a Company “change
of control” as
defined in the Berholtz Employment Agreement.
Ryan Selhorn. The Company and Mr. Selhorn entered into an
employment agreement, effective April 27, 2018 (the
“Selhorn Employment
Agreement”), wherein Mr.
Selhorn will receive an annual base salary of $250,000 as well as
an annual bonus based on personal performance and as approved by
the Board of Directors. The target bonus amount is 25% of his
annual base salary.
Mr.
Selhorn will also receive RSUs covering 1.2 million shares of
Common Stock; 400,000 of which will vest after one year of
employment. The remaining RSUs will vest in eight equal quarterly
installments over two years of continued service.
Upon
termination of the Selhorn
Employment Agreement for any reason, Mr. Selhorn will receive (i) a
pro-rata bonus during that fiscal year based on the number of days
employed during that fiscal year, and (ii) Company group medical,
dental and vision insurance coverage for Mr. Selhorn and his
dependents for six months paid by the Company.
Pursuant to the
Selhorn Employment Agreement,
if Mr. Selhorn’s employment is terminated as a result of
death, disability or without Cause, or Mr. Selhorn resigns for Good
Reason, Mr. Selhorn or his estate, as applicable, is entitled to
the following payments and benefits, provided that a mutual release
of claims is executed: (1) a cash payment in an amount equal to six
months of his then base salary and annual target bonus amount, if
such termination occurs within six months of a change of control;
(2) Company group medical, dental and vision insurance coverage for
Mr. Selhorn and his dependents for six months paid by the Company;
and (3) the automatic acceleration of the vesting and
exercisability of outstanding unvested stock awards.
For
purposes of the Selhorn
Employment Agreement, “Cause” generally means
(1) commission of fraud or other unlawful conduct in the
performance of duties for the Company, (2) conviction of or,
entry into, a plea of “guilty” or “no
contest” to a felony under United States federal or state
law, and such felony is either work-related or materially impairs
Mr. Selhorn’s ability to perform services to the Company, and
(3) a willful, material breach of the Selhorn Employment Agreement that causes
material harm to the Company, provided, however, that the Board of
Directors must provide 30 days prior written notice of its
intention to terminate for Cause and give Mr. Selhorn the
opportunity to cure or remedy such alleged Cause and present Mr.
Selhorn’s case to the Board of Directors and afterwards, at
least 75% of the Board of Directors (except for Mr. Selhorn in the
event he is the subject of the hearing) affirmatively determines
that termination is for Cause.
For
purposes of the Employment Agreement, “Good
Reason” generally means that within one year prior to the
date of resigning, one of the following occurs: (1) a material
diminution in Mr. Selhorn’s title, authority, duties or
responsibilities), (2) a reduction in Mr. Selhorn’s base
salary or target bonus amount, (3) a change in the geographic
location greater than 25 miles from the current office at which Mr.
Selhorn must perform his duties, (4) the Company elects not
to renew the Selhorn
Employment Agreement for another term, or (5) the Company
materially breaches any provision of the Selhorn Employment Agreement, provided,
however, that Mr. Selhorn must provide 30 days prior written notice
of his intention to resign for Good Reason, which notice must be
given within 90 days of the initial occurrence of such cause and
gives the Company the opportunity to cure or remedy such alleged
Good Reason.
Outstanding Equity Awards at Fiscal Year-End 2017
The
following table presents, for each of the Named Executive Officers,
information regarding outstanding RSUs held as of December 31,
2017.
|
Name
|
Grant Date
|
Equity
incentive plan awards: Number of unearned shares, units or other
rights that have not vested (#)
|
Equity
incentive plan awards: Market or payout value of unearned shares,
units or other rights
|
|
Randy
Berholtz (1)
|
Jan. 9,
2017
|
2,000,000
|
$420,000
|
|
Rauly
Gutierrez (2)
|
Sep. 23,
2016
|
820,312
|
$229,687
|
|
Rauly
Gutierrez (2)
|
Apr. 24,
2017
|
500,000
|
$47,500
|
(1)
Unvested RSUs
vest 25% on January 9, 2018, with the remaining balance vesting
ratably over eight quarters and fully vesting on January 9,
2020.
(2)
For the grant on
September 23, 2016, unvested RSUs were to vest 25% on September 23,
2017, with the remaining balance vesting ratably over eight
quarters and fully vesting on September 23, 2019. For the grant on
April 24, 2017, unvested RSUs were to vest 33% on April 24, 2018,
with the remaining balance vesting ratably over eight quarters and
fully vesting on April 24, 2018. Mr. Gutierrez resigned from his
position with the Company effective April 5, 2018, and thus RSUs
totaling 1,036,459 were forfeited and returned to the available
pool for the Amended and Restated 2016 Equity Incentive
Plan.
Description of Equity Compensation Plans
2013 Equity Incentive
Plan. The Company has issued
Common Stock, RSUs and stock option awards to employees,
non-executive directors and outside consultants under the 2013
Incentive Plan (“2013 Plan”). The 2013 Plan allows for the
issuance of up to 10.0 million shares of the Company’s Common
Stock to be issued in the form of stock options, stock awards,
stock unit awards, stock appreciation rights, performance shares
and other share-based awards. The exercise price for all
equity awards issued under the 2013 Plan is based on the fair
market value of the Common Stock on the date of
issuance. Currently, because the Company’s Common Stock
is quoted on the OTCQB, the fair market value of the Common Stock
is equal to the last-sale price reported by the OTCQB as of the
date of determination, or if there were no sales on such date, on
the last date preceding such date on which a sale was
reported. Generally, each vested stock unit entitles the
recipient to receive one share of Company Common Stock, which is
eligible for settlement at the earliest of their termination, a
change in control of the Company or a specified date. RSUs can
vest according to a schedule or immediately upon award. Stock
options generally vest over a three-year period, first year cliff
vesting with quarterly vesting thereafter on the three-year awards,
and have a ten-year life. Stock options outstanding are
subject to time-based vesting, as described above, and thus are not
performance-based. As of December 31, 2017, 89,516 shares were
available for issuance under the 2013 Plan.
2014 Equity Incentive
Plan. The Company has issued
Common Stock, RSUs and stock option awards to employees,
non-executive directors and outside consultants under the 2014
Incentive Plan (“2014 Plan”). The 2014 Plan allows for the
issuance of up to 20.0 million shares of the Company’s Common
Stock to be issued in the form of stock options, stock awards,
stock unit awards, stock appreciation rights, performance shares
and other share-based awards. The exercise price for all
equity awards issued under the 2014 Plan is based on the fair
market value of the common stock on the date of
issuance. Currently, because the Company’s Common Stock
is quoted on the OTCQB, the fair market value of the Common Stock
is equal to the last-sale price reported by the OTCQB as of the
date of determination, or if there were no sales on such date, on
the last date preceding such date on which a sale was
reported. Generally, each vested stock unit entitles the
recipient to receive one share of Company Common Stock, which is
eligible for settlement at the earliest of their termination, a
change in control of the Company or a specified date. RSUs can
vest according to a schedule or immediately upon award. Stock
options generally vest over a three-year period, first year cliff
vesting with quarterly vesting thereafter on the three-year awards
and have a ten-year life. Stock options outstanding are
subject to time-based vesting, as described above, and thus are not
performance-based. As of December 31, 2017, 49,367 shares were
available for issuance under the 2014 Plan.
2016 Equity Incentive
Plan. On March 21, 2016, our
Board of Directors approved the adoption of the 2016 Equity
Incentive Plan, and on October 20, 2016 adopted the Amended and
Restated 2016 Equity Incentive Plan (“2016 Plan”). The 2016 Plan was then approved by
our stockholders in November 2016. The 2016 Plan allows for the
issuance of up to 20.0 million shares of our Common Stock to be
issued in the form of stock options, stock awards, stock unit
awards, stock appreciation rights, performance shares and other
share-based awards. The 2016 Plan includes an evergreen
provision in which the number of shares of Common Stock
authorized for issuance and available for future grants under the
2016 Plan will be increased each January 1 after the effective date
of the 2016 Plan by the number of shares of Common Stock equal to
the lesser of: (a) 4% of the number of shares of Common Stock
issued and outstanding on a fully-diluted basis as of the close of
business on the immediately preceding December 31, or (b) a number
of shares of Common Stock set by our Board of Directors. In
March 2017, our Board of Directors approved an increase of
5,663,199 shares of Common Stock to the shares authorized under the
2016 Plan in accordance with the evergreen provision in the 2016
Plan. The exercise price for all equity awards issued under the
2016 Plan is based on the fair market value of the common stock on
the date of issuance. Generally, each vested stock unit
entitles the recipient to receive one share of our Common Stock,
which is eligible for settlement at the earliest of their
termination, a change in control of the Company, or a specified
date. RSUs can vest according to a schedule or immediately
upon award. Stock options generally vest over a three-year
period, first year cliff vesting with quarterly vesting thereafter
on the three-year awards and have a ten-year life. Stock
options outstanding are subject to time-based vesting, as described
above, and thus are not performance-based. As of December 31, 2017,
21,008,882 shares were available for issuance under the 2016
Plan.
Equity Compensation Plan Information
The
following table provides information as of December 31, 2017
regarding our equity compensation plans.
|
Plan
Category
|
Number
of Securities to be Issued Upon Exercise of Outstanding
Options,
Warrants
and Rights
|
Weighted-Average
Exercise Price of Outstanding Options,
Warrants
and Rights
|
|
Number
of Securities
Remaining
Available for
Future
Issuance Under Equity
Compensation
Plans (excluding securities reflected
in
column(a))
|
|
|
|
|
|
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Equity Compensation
Plans Approved by Security Holders:
|
|
|
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|
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|
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Amended and
Restated 2016 Equity Incentive Plan
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4,168,987
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$0.305
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(1)
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21,008,882
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|
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|
|
|
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Equity Compensation
Plans Not Approved by Security Holders:
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|
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2013 Equity
Incentive Plan
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1,036,349
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$0.157
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(1)
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89,516
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2014 Equity
Incentive Plan
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8,073,999
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$0.145
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(1)
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49,367
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Total
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13,279,835
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$0.153
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(1)
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21,147,765
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(1)
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Excludes
outstanding RSUs, which have no associated exercise
price.
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DIRECTOR COMPENSATION
We currently have four directors. Our director
compensation plan, approved by the Board of Directors as of January
1, 2018, provides that each non-employee director of the
Company is to receive (1) quarterly cash compensation of $3,000,
(2) $6,000 in RSUs per quarter, (3) $500 in cash per committee
meetings attended, (4) a grant of 500,000 RSUs to vest 25% after
one year and then quarterly for the next two years, and (5)
reimbursement of travel expenses for in-person meetings, which is
paid in RSUs. In addition, the Chairman of the Board of Directors
is entitled to receive an additional $3,000 in quarterly
compensation paid in RSUs.
In
2017, our then director compensation plan provided that each
non-employee director of the Company receive quarterly compensation
of $3,000, which was paid in RSUs. In addition, that director plan
provided that the Chairman of the Board of Directors was entitled
to receive an additional $3,000 in quarterly compensation paid in
RSUs.
The
following table sets forth summary information concerning the total
compensation paid to our non-employee directors in 2017 for
services to the Company.
|
Name
|
Fees
Earned
or
Paid in
Cash
|
|
|
|
|
Henry Esber,
Ph.D.
|
$-
|
$-
|
$24,000
|
$24,000
|
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Vivian
Liu
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-
|
-
|
12,000
|
12,000
|
|
Ziad Mirza, MBA,
M.D.
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-
|
-
|
12,000
|
12,000
|
|
Total
|
$-
|
$-
|
$48,000
|
$48,000
|
(1)
Represents the
total grant date fair value, as determined under FASB ASC Topic
718, Stock Compensation, of
restricted unit awards granted during the respective fiscal
year.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Transactions with Related Persons
Other
than the following transactions, there has not been, nor currently
are there proposed, any transactions or series of similar
transactions in which we were or are to be a participant and the
amount involved exceeds or will exceed the lesser of $120,000 or 1%
of the average of our total assets as of December
31, 2017 and 2016, and in which any of our directors, executive
officers, holders of more than 5% of our common stock or any member
of the immediate family of any of the foregoing persons, had or
will have a direct or indirect material interest.
Related Party Financings
We have
raised capital in various financing transactions in which related
parties have been involved, and we have issued our securities to
those related parties. The following table below sets forth the
principal amount of certain related party debt we issued, and the
repayment of such debt during 2016.
|
|
Outstanding
Principal
and
Interest at date of conversion or repayment
|
Common
Stock Issued
on
date of conversion
|
Original
Principal Amount
(in
U.S. dollars)
|
|
Related
Party Debt Repaid During 2016:
|
|
|
|
|
Line of
Credit
|
|
|
|
|
Bassam Damaj,
Ph.D., President and Chief Executive and Principal Financial
Officer (1) –
Repaid
|
$472,879
|
N/A
|
$409,192
|
|
Note
Payable
|
|
|
|
|
Bassam Damaj,
Ph.D., President and Chief Executive and Principal Financial
Officer (1) –
Repaid
|
$29,986
|
N/A
|
$25,000
|
(1) Dr. Damaj served
as Chief Financial Officer from July 2015 until September 6, 2016,
when Mr. Robert E. Hoffman became Executive Vice President and
Chief Financial Officer.
Dr. Damaj, our President and Chief Executive
Officer, was the holder of the LOC Convertible Debenture,
which was paid in full in the fiscal year ended December 31,
2016.
We did
not borrow from any related parties during the years ended December
31, 2017 and 2016. At December 31, 2017 and 2016, there was
no related party line of credit, debentures or notes payable
outstanding.
OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The
following table presents information, to the best of our knowledge, about the
beneficial ownership of our Common Stock as of April 26, 2018 by
those persons known to beneficially own more than 5% of our capital
stock, by each of our directors and named executive officers, and
all of our directors and current executive officers as a group. The
percentage of beneficial ownership for the following table is based
on 194,046,100 shares of Common Stock outstanding as of April 26,
2018.
Beneficial
ownership is determined in accordance with the rules of the SEC and
does not necessarily indicate beneficial ownership for any other
purpose. Under these rules, beneficial ownership includes those
shares of common stock over which the stockholder has sole or
shared voting or investment power. It also includes shares of
common stock that the stockholder has a right to acquire within 60
days after April 26, 2018 pursuant to options, warrants,
restricted stock units, conversion privileges or other rights. The
percentage of ownership of the outstanding common stock, however,
is based on the assumption, expressly required by the rules of the
SEC, that only the person or entity whose ownership is being
reported has converted options or warrants into shares of our
Common Stock.
|
NAME
OF OWNER (1)
|
SHARES
BENEFICIALLY OWNED (2)
|
PERCENTAGE OF COMMON STOCK (3)
|
|
5%
Stockholders
|
|
|
|
Novalere Holdings
LLC
151 Treemont
Street, Penthouse
Boston, MA
02111
|
25,617,592
|
13.20%
|
|
|
|
|
|
Directors
and Named Executive Officers:
|
|
|
|
Bassam Damaj, Ph.D.
(4)
|
23,703,347
|
11.98%
|
|
Randy Berholtz,
M.B.A., JD (5)
|
1,024,333
|
*
|
|
Ryan Selhorn,
CPA
|
-
|
*
|
|
Rauly Gutierrez,
CPA (6)
|
713,541
|
*
|
|
Henry Esber, Ph.D.
(7)
|
2,748,290
|
1.40%
|
|
Vivian Liu
(8)
|
3,111,900
|
1.59%
|
|
Ziad Mirza, M.B.A.,
M.D. (9)
|
2,685,164
|
1.37%
|
|
Officers and
Directors as a Group (7 persons)
|
33,986,575
|
16.43%
|
* Represents less than 1%
(1)
Unless otherwise
indicated, each person named in the table has sole voting and
investment power and that person’s address is c/o Innovus
Pharmaceuticals, Inc., 8845 Rehco Road, San Diego, California
92121.
(2)
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 or warrants
currently exercisable or convertible, or exercisable or convertible
within 60 days of April 26, 2018 are deemed outstanding for
computing the percentage of the owner’s holding such option
or warrant, but are not deemed outstanding for computing the
percentage of any other owner.
(3)
Percentage based
upon 194,046,100 shares of Common Stock issued and outstanding as
ofApril 26, 2018.
(4)
Includes
3,875,000 shares of Common Stock issuable upon conversion of vested
RSUs within 60 days after April 30, 2018 and 129,393 shares of
Common Stock held by Dr. Damaj’s spouse.
(5)
Includes
1,008,333 shares of Common Stock issuable upon conversion of vested
RSUs within 60 days after April 26, 2018.
(6)
Includes 713,541
shares of Common Stock issuable upon conversion of vested RSUs
within 60 days after April 26, 2018. Mr. Gutierrez, our Vice
President, Finance, was appointed as the principal financial and
accounting officer of the Company effective April 24, 2017, and
resigned from his position effective April 5, 2018.
(7)
Includes
2,648,290 shares of Common Stock issuable upon conversion of vested
RSUs within 60 days after April 26, 2018.
(8)
Includes
2,267,217 shares of Common Stock issuable upon conversion of vested
RSUs within 60 days after April 26, 2018.
(9)
Includes
2,267,217 shares of Common Stock issuable upon conversion of vested
RSUs within 60 days after April 26, 2018.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
The Audit Committee has reviewed and discussed
with management and Hall & Company, Inc., our independent
registered public accounting firm, the audited consolidated
financial statements in the Innovus Pharmaceuticals,
Inc. Annual Report on Form 10-K for the year ended December
31, 2017. The Audit Committee has also discussed with Hall &
Company, Inc. those matters required to be discussed by Public
Company Accounting Oversight Board (“PCAOB”) Auditing Standard No.
16.
Hall
& Company, Inc. also provided the Audit Committee with the
written disclosures and the letter required by the applicable
requirements of the PCAOB regarding the independent auditor’s
communication with the Audit Committee concerning independence. The
Audit Committee has discussed with the registered public accounting
firm their independence from our Company.
Based
on its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, 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
year ended December 31, 2017.
|
|
Respectfully Submitted,
Vivian
Liu, Chair
Henry
Esber
Ziad
Mirza
|
The information contained above under the caption
“Report of the Audit Committee
of the Board of Directors” shall not be deemed to be soliciting
material or to be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, except to the extent that we specifically
incorporate it by reference into such filing.
ADDITIONAL INFORMATION
Deadline for Receipt of Stockholder Proposals
Pursuant to Rule 14a-8 under the Exchange
Act, stockholder proposals to be presented at our 2018 Annual
Meeting of Stockholders and included in our Proxy Statement and
form of proxy relating to that annual meeting must be received by
us at our principal executive offices at 8845 Rehco Road,
San Diego, California 92121, addressed
to our Corporate Secretary, not later than 90 days nor more
than 120 days prior to the first anniversary of the preceding
year’s annual meeting. These
proposals must comply with applicable Nevada law, the rules and
regulations promulgated by the SEC and the procedures set
forth in our Bylaws.
We
reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and all other applicable
requirements.
Householding of Proxy Materials
The
SEC has adopted rules that permit companies and intermediaries
(e.g., brokers) to satisfy the delivery requirements for proxy
statements and annual reports with respect to two or more
stockholders sharing the same address by delivering a single proxy
statement and annual report addressed to those stockholders. This
process, which is commonly referred to as
“householding,” potentially means extra convenience for
stockholders and cost savings for companies.
A number of brokers with account holders who are
stockholders of the Company will be “householding” the
Company’s proxy materials. A single set of the
Company’s proxy materials will be delivered to multiple
stockholders sharing an address unless contrary instructions have
been received from the affected stockholders. Once you have
received notice from your broker that they will be
“householding” communications to your address,
“householding” will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in “householding” and would
prefer to receive a separate set of the Company’s proxy
materials, please notify your broker or direct a written request to
the Corporate Secretary at 8845 Rehco Road, San Diego,
California 92121, or by calling
858-964-5123. The Company undertakes to deliver promptly, upon any
such oral or written request, a separate copy of its proxy
materials to a stockholder at a shared address to which a single
copy of these documents was delivered. Stockholders who currently
receive multiple copies of the Company’s proxy materials at
their address and would like to request “householding”
of their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
Other Matters
At
the date of this proxy statement, the Company knows of no other
matters, other than those described above, that will be presented
for consideration at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
proxy holders will vote all proxies using their best judgment in
the interest of the Company and the stockholders.
The Board of Directors invites you to attend the
Annual Meeting in person. Whether or not you expect to attend the
Annual Meeting in person, please submit your vote by internet,
telephone or mail as promptly as possible so that your shares will be represented at the
Annual Meeting.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE READ THE PROXY STATEMENT AND THEN VOTE BY MAIL
AS PROMPTLY AS POSSIBLE. VOTING PROMPTLY WILL SAVE US
ADDITIONAL EXPENSE IN SOLICITING PROXIES AND WILL ENSURE THAT YOUR
SHARES ARE REPRESENTED AT THE ANNUAL MEETING.
|
San
Diego, California
April 30, 2018
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By Order of the Board of Directors
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/s/
Henry Esber, Ph. D.
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Chairman
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INNOVUS PHARMACEUTICALS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
Annual Meeting of Stockholders
May 29, 2018, 8:00AM
..
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CONTROL ID:
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REQUEST ID:
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The undersigned appoints Henry Esber, Ph.D, Chairman of Innovus
Pharmaceuticals, Inc. with full power of substitution, the attorney
and proxy of the undersigned, to attend the Annual Meeting of
Stockholders of Innovus Pharmaceuticals, Inc. to be held May 29,
2018 beginning at 8:00 a.m., Local Time, at the Hyatt House
San Diego, 10044 Pacific Mesa Boulevard, San Diego, California
92121, and at any adjournment thereof,
and to vote the stock the undersigned would be entitled to vote if
personally present, on all matters set forth in the proxy statement
to Stockholders dated April 30, 2018, a copy of which has been
received by the undersigned, as follows:
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please mark, sign, date, and return this Proxy Card promptly using
the enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/INNV
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PHONE:
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1-866-752-VOTE(8683)]
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ANNUAL MEETING OF THE STOCKHOLDERS OF
INNOVUS PHARMACEUTICALS, INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE: ☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR ALL
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AGAINST
ALL
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FOR ALL
EXCEPT
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Election of Directors: The Board of Directors recommends a vote FOR
nominees.
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☐
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☐
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Bassam
Damaj, Ph.D.
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☐
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Henry
Esber, Ph.D.
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☐
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CONTROL ID:
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Vivian
Liu
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☐
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Ziad
Mirza, M.B.A., MD
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☐
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Dean
Nuhaily
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☐
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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The ratification of Hall & Company, Inc. as the Company’s
Independent Registered Public Accounting Firm for the year ending
December 31, 2018
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING: ☐
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MARK HERE FOR ADDRESS CHANGE ☐ New Address (if
applicable):
_____________________________
_____________________________
_____________________________
IMPORTANT: Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2018
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(Print Name of Stockholder and/or Joint Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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