Xenetic Biosciences, Inc. (NASDAQ:XBIO) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of ListingItem 3.01
(b)On August 9, 2017, each of Edward Benz MD, Darlene Deptula-Hicks and Michael Scott Maguire resigned as a member of the Board of Directors (the “Board”) of Xenetic Biosciences, Inc. (the “Company”) and as a member of all committees of the Board on which they served.
Prior to his resignation, Dr. Benz was a member of the Board’s Audit Committee and Compensation Committee. Prior to her resignation, Ms. Deptula-Hicks was the chairman of each of the Board’s three standing committees: Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Prior to his resignation, Mr. Maguire also served as Chairman of the Board. As of the effective time of these resignations, the Audit Committee and the Compensation Committee will each be comprised of one director who is deemed independent under Nasdaq Listing Rules.
As a result, commencing on August 9, 2017 and extending until such time that the Company appoints replacements to fill the seats vacated by Dr. Benz and Ms. Deptula-Hicks, the Company will not be in compliance with (i) Nasdaq Listing Rule 5605(c)(2)(A), which requires that the Audit Committee be comprised of at least three independent directors, (ii) Nasdaq Listing Rule 5605(d)(2)(A), which requires that the Compensation Committee be comprised of at least two independent directors and (iii) Nasdaq Listing Rule 5605(b)(1), which requires that the Board be comprised of a majority of independent directors.
While the Company qualifies as a “controlled company” within the meaning of the listing standards of The Nasdaq Stock Market LLC (“NASDAQ”) and may elect not to comply with certain NASDAQ corporate governance requirements, including (i) the requirement that a majority of the board of directors consist of independent directors and (ii) the requirement that the Company have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, the Company has not currently elected to utilize these exemptions.
On August 9, 2017, the Company notified NASDAQ of its non-compliance with the Nasdaq Listing Rules noted above.
As a result of the appointment of the directors and subsequent Board committee appointments on August 14, 2017 described in Item 5.02 below, the Company believes it has regained compliance with the audit committee requirements as set forth in Nasdaq Listing Rule 5605(c)(2)(A), the compensation committee requirements set forth in Nasdaq Listing Rule 5605(d)(2)(A) and the majority independent board requirements set forth in Nasdaq Listing Rule 5605(b)(1).
| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers. |
(b)As disclosed under Item 3.01 above, on August 9, 2017, each of Dr. Benz, Ms. Deptula-Hicks and Mr. Maguire resigned as a member of the Board and as a member of all committees of the Board on which they served. Mr. Maguire did not resign from his position as President and Chief Executive Officer of the Company.
(d)On August 14, 2017, the Board appointed James Callaway, Dmitry Genkin and Adam Logal to serve as directors of the Company, effective immediately. Also on August 14, 2017, the Board appointed Dr. Callaway and Mr. Logal to each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Board, effective immediately. The remaining members of the Board performed the functions that would customarily be performed by a nominating committee.
The Company does not have a formal director compensation policy. Dr. Callaway, Dr. Genkin and Mr. Logal will be eligible to receive compensation for their services, consisting of cash retainers and eligibility for equity awards under the Company’s equity plans. In connection with their appointment as directors, Drs. Callaway and Genkin and Mr. Logal will each enter into the Company’s standard form of indemnification agreement.
There have been no transactions involving Dr. Callaway or Mr. Logal requiring disclosure under Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended. There are no agreements or understandings between Dr. Callaway, Dr. Genkin or Mr. Logal and any other person to which Dr. Callaway, Dr. Genkin or Mr. Logal were each selected to serve as directors of the Company.
Dr. Genkin was previously a party to a consulting agreement with the Company that was mutually terminated on August 1, 2017, to which he was paid approximately $190,000 from January 1, 2016 through August 1, 2017. to the consulting agreement, Dr. Genkin provided advisory services related to the Company’s XBIO-101 and Oncohist programs. Dr. Genkin also previously served as a member of the Board until May 3, 2016, and the Company paid Dr. Genkin $1,074 for his services as a director during 2016.
Dr. Genkin is also an employee and chairman of the board of directors of PJSC Pharmsynthez (“Pharmsynthez”), the Company’s largest and controlling stockholder. During the Company’s fiscal year ended December 31, 2016, Pharmsynthez converted all of the convertible notes previously issued by the Company to Pharmsynthez in the principal amount of $6.5 million plus accrued interest of approximately $0.2 million at a conversion rate of $4.95 per share. The Company then issued to Pharmsynthez 1,373,036 shares of common stock in connection with conversion of the convertible notes. In addition, on November 1, 2016, Pharmsynthez purchased 1,454,545 shares of the Company’s Convertible Series B Preferred Stock for approximately $6.0 million.
| Item 9.01 | Financial Statements and Exhibits. |
(d)Exhibits.
| Exhibit No. | Description |
| 99.1 | Press release issued by Xenetic Biosciences, Inc. on August 14, 2017. |
Xenetic Biosciences, Inc. ExhibitEX-99.1 2 xenetic_8k-ex9901.htm PRESS RELEASE Exhibit 99.1 Xenetic Biosciences Announces Appointment of Three Directors to the Board New Board appointments add drug development,…To view the full exhibit click here
About Xenetic Biosciences, Inc. (NASDAQ:XBIO)
Xenetic Biosciences, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the research and development of certain pharmaceutical products for use in humans that includes the use of the Company’s platform technologies that enables the creation of drug therapies primarily for orphan indications. The Company’s technologies include PolyXen, Virexxa, OncoHist and ImuXen. The Company is focused primarily on developing its lead product candidates, including ErepoXen, Virexxa and OncoHist, and PolyXen technology. The Company’s lead product candidate ErepoXen, a polysialylated form of erythropoietin (EPO) for the treatment of anemia in pre-dialysis patients with chronic kidney disease, and Food and Drug Administration (FDA) orphan designated oncology therapeutics Virexxa and OncoHist for the treatment of progesterone receptor negative endometrial cancer and refractory Acute Myeloid Leukemia, respectively. It is also developing PSA-FVIII.