UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
For
the fiscal year ended
or
For the transition period from ______________ to ______________
Commission
File Number:
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
(Address of Registrant’s principal executive offices)
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files).
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act of 1934). Yes ☐ No
The
aggregate market value of the registrant’s voting stock held by non-affiliates of the registrant was approximately $
The
number of shares of the Company’s common stock, $.01 par value, outstanding at November 21, 2023 was
DOCUMENTS INCORPORATED BY REFERENCE
None
| Auditor Name: | Auditor Location: | Auditor Firm ID: | ||
TABLE OF CONTENTS
| Description | Page | |||
| Part III | ||||
| Item 10. | Directors, Executive Officers and Corporate Governance | 1 | ||
| Item 11. | Executive Compensation | 9 | ||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 14 | ||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 16 | ||
| Item 14. | Principal Accounting Fees and Services | 17 | ||
| Part IV | ||||
| Item 15. | Exhibits, Financial Statement Schedules | 18 | ||
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EXPLANATORY NOTE
Enzo Biochem, Inc. (the “Company”) is filing this Amendment No. 1 to Form 10-K on Form 10-K/A (this “Form 10-K/A”) for the fiscal year ended July 31, 2023, in order to amend and restate Part III, Items 10 through 14 of the report on Form 10-K (the “original Form 10-K”) that we originally filed with the Securities and Exchange Commission (the “SEC”) on November 3, 2023.
This Form 10-K/A has been prepared and filed in reliance on General Instruction G to Form 10-K, which provides that registrants may provide the information required by Part III in a definitive proxy statement or an amendment to the Form 10-K filed with the SEC within 120 days after the end of the fiscal year covered by the report. The Company had initially planned to file the Part III information in a definitive proxy statement.
The original Form 10-K is therefore amended to (i) delete the reference on the cover of the original Form 10-K to the incorporation by reference of a definitive proxy statement into Part III of such Form 10-K and (ii) revise Part III, Items 10 through 14 of the Company’s original Form 10-K to include information previously omitted from the original Form 10-K.
Except as described above, no other changes have been made to the original Form 10-K. The original Form 10-K continues to speak as of November 3, 2023, the date the Company filed the original Form 10-K with the SEC, and other than as expressly indicated in the original Form 10-K or in this Form 10-K/A, the Company has not updated the disclosures contained therein to reflect any events that have occurred at a date subsequent to November 3, 2023. Accordingly, this Form 10-K/A should be read in conjunction with the original Form 10-K and the Company’s other reports filed thereafter.
FORWARD LOOKING STATEMENTS
This Annual Report contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are “forward-looking statements.” Forward-looking statements may include the words “believes,” “expects,” “plans,” “intends,” “anticipates,” “continues” or other similar expressions. These statements are based on the Company’s current expectations of future events and are subject to a number of risks and uncertainties that may cause the Company’s actual results to differ materially from those described in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
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Part III
ITEM 10. Directors, Executive Officers and Corporate Governance. Directors
The names of our directors, their ages and their positions with the Company are set forth below, followed by certain other information about them. All directors are elected for a one year term, expiring at each Annual Meeting of Shareholders:
Directors whose terms expire at the Fiscal 2023 Meeting in 2024
| Name | Year
First Became a Director | |
| Bradley L. Radoff (age 50) | 2022 | |
| Mary Tagliaferri, M.D. (age 57) | 2020 | |
| Steven J. Pully (age 63) | 2023 | |
| Elazar Rabbani, Ph.D. (age 80) | 1976 | |
| Ian Walters, M.D. (age 55) | 2020 |
Bradley L. Radoff has been a director of the Company since January 2022. Mr. Radoff served as Chair of the Company’s Audit Committee until October 26, 2023 and is currently a member of the Company’s Audit Committee, Nominating & Governance Committee and Compensation Committee. Mr. Radoff is a private investor and has also served as Principal of Fondren Management LP, a private investment management company, since 2005. Mr. Radoff previously served as a Portfolio Manager at Third Point LLC, a registered investment advisory firm, from 2006 to 2009. He also served as Managing Director of Lonestar Capital Management LLC, a registered investment advisory firm, from 2003 to 2004. Mr. Radoff also previously served as a director of Citadel Investment Group LLC, a global financial institution, from 2000 to 2003. Mr. Radoff has served as a director of VAALCO Energy, Inc. (NYSE:EGY), a Texas-based independent energy company, since June 2020, and Harte Hanks, Inc. (NASDAQ: HHS), a leading global customer experience company, since May 2021. Mr. Radoff previously served as a director of Support.com, Inc. (formerly NASDAQ:SPRT), a leading provider of cloud-based software and services, from June 2016 until its merger in September 2021, and Pogo Producing Company (formerly NYSE:PPP), an oil and gas exploration, development and production company, from March 2007 until the completion of its sale to Plains Exploration & Production Company in November 2007. Mr. Radoff graduated summa cum laude with a B.S. in Economics from The Wharton School at the University of Pennsylvania.
We believe that Mr. Radoff’s qualifications to serve on the Board are demonstrated by his financial and investment expertise together with his perspective as a significant shareholder of the Company.
MARY TAGLIAFERRI, M.D., has been a director of the Company since November 2020 and served as Chair of the Board from January 2022 to October 26, 2023. Dr. Tagliaferri is currently chair of the Company’s Nominating & Governance Committee and a member of both the Company’s Audit Committee and Compensation Committee. Dr. Tagliaferri has been serving on the board of directors of RayzeBio, Inc., a biotechnology company, since October 2021. Dr. Tagliaferri has been serving as Senior Vice President and Executive Clinical Fellow for Nektar Therapeutics, a Nasdaq-listed company, since March 2020 and previously served as Chief Medical Officer from November 2017 to March 2020, Senior Vice President, Clinical Development from April 2017 to October 2017 and Vice President of Clinical Development from January 2015 to March 2017. Dr. Tagliaferri served as Consultant for InterMune from March 2014 to December 2014. Dr. Tagliaferri served as Chief Medical Officer of Kanglaite, Inc. from October 2012 to April 2014. Dr. Tagliaferri was the co-founder of Bionovo, Inc. and served as its Chief Medical Officer, Chief Regulatory Officer, Secretary and Treasurer and a member of the Board of Directors from February 2002 to June 2012 and President from May 2007 to June 2012. Dr. Tagliaferri received her Bachelor of Science Degree in Agricultural Economics and Business Management from Cornell University in 1988, Post Baccalaureate Degree in Science from Bryn Mawr College in 1996, Master of Science Degree, Oriental Medicine from the American College of Traditional Chinese Medicine, San Francisco, California in 1995 and Medical Degree from the University of California, San Francisco in 2002. Dr. Tagliaferri completed her residency in internal medicine at Alameda County Medical Center, Oakland, California, in 2003 and a research fellowship in translational science at the University of California, San Francisco in 1999. She has contributed to approximately 70 publications.
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We believe that Dr. Tagliaferri’s qualifications to serve on the Board are demonstrated by her professional background, experience in the healthcare field and past board position, making her well qualified as a member of our Board.
STEVEN J. PULLY has been a director of the Company, Chair of the Board and Chair of the Audit Committee since October 26, 2023, and a member of the Company’s Compensation Committee and its Nominating & Governance Committee since November 21, 2023. Mr. Pully is a partner of Speyside Partners, an investment banking firm that he co-founded in May 2017. He also serves on the boards or in executive positions for various companies, including publicly-traded RumbleOn, Inc. (NASDAQ:RMBL), where he serves as the Executive Chairman. Mr. Pully’s board service has spanned multiple industries, including airlines, amusement parks, energy and power, manufacturing, power sports, retail, restaurants and technology and has included multiple positions as chairman or lead director of the board, and also multiple chairmanships of audit, compensation, nominating and governance and special committees. Previously, Mr. Pully served as General Counsel and as a Partner of the investment firm, Carlson Capital, L.P. from 2008 to 2014, as Managing Director in the investment banking division of Bank of America and as a Senior Managing Director in the investment banking department of Bear Stearns & Company. Within the past five years, Mr. Pully has served on the boards of the following public companies: VAALCO Energy (NYSE: EGY), Goodrich Petroleum, Bellatrix Exploration, Harvest Oil and Gas and Titan Energy. Mr. Pully was appointed to the following private company boards over the past five years as an independent director immediately prior to the company filing for bankruptcy under Chapter 11: Limetree Bay Refinery, Southland Royalty and GenCanna Global. Mr. Pully currently serves on the board of another private company, Heritage Power, having initially been appointed to the board at the request of the company’s lenders, after which the company filed for bankruptcy. He was recently appointed to Heritage’s board again upon its emergence from bankruptcy by one of the company’s new equity holders. Mr. Pully holds active law and CPA licenses in the State of Texas, he is a Chartered Financial Analyst and he also holds various FINRA licenses.
We believe that Mr. Pully’s qualifications to serve on the Board are demonstrated by his financial and investment expertise, his experience as a public company director and his experience serving in various executive leadership roles.
ELAZAR RABBANI, Ph.D., is an Enzo Biochem founder and served as the Company’s Chairman of the Board from its inception in 1976 to January 2022 and as Secretary from November 2009 to April 2022. Dr. Rabbani also served as the Company’s Chief Executive Officer from 1976 until November 2021. Dr. Rabbani has authored numerous scientific publications in the field of molecular biology, in particular, nucleic acid labeling and detection. He is also the lead inventor of many of the Company’s pioneering patents covering a wide range of technologies and products. Dr. Rabbani received his Bachelor of Arts degree from New York University in Chemistry and his Ph.D. in Biochemistry from Columbia University. He is a member of the American Society for Microbiology.
We believe that Dr. Rabbani’s qualifications to serve on the Board are demonstrated by his accomplishments over the last 45 years, including building our intellectual property estate and the commercialization of technology.
Ian B. Walters, M.D. has been a director of the Company since November 2020. Mr. Walters is currently Chair of the Company’s Compensation Committee and a member of the Company’s Audit Committee and Nominating & Governance Committee. Dr. Walters is an experienced entrepreneur and drug developer with leadership in the development of over 30 drugs in multiple therapeutic areas involving diverse technologies, leading to five new oncology drug approvals. His previous roles include Executive Director of Global Oncology Clinical Research, and Business Development for Bristol-Myers Squibb and Medical Director at Millennium Pharmaceuticals. Dr. Walters is currently CEO and Director of Portage Biotech, a publicly traded clinical stage biopharmaceutical company developing an innovative portfolio of immuno-oncology assets. He is also founder of seven of Portage’s portfolio companies. Dr. Walters holds an MBA from the Wharton School of the University of Pennsylvania. He received his MD at the Albert Einstein College of Medicine and completed doctoral training in experimental medicine at The Rockefeller University. Dr. Walters has been the lead author or contributor to approximately 60 journal publications.
We believe that Dr. Walter’s qualifications to serve on the Board are demonstrated by his professional background, experience in the healthcare field, and other current and past board and management positions, making him well qualified as a member of our Board.
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Family Relationships
There are no family relationship of first cousins or closer, among the Company’s directors and executive officers, by blood, marriage or adoption.
Corporate Governance Policies and Practices
The Company has a variety of policies and practices to foster and maintain responsible corporate governance, including the following:
Corporate Governance Guidelines - The Board adopted Corporate Governance Guidelines, which collect in one document many of the corporate governance practices and procedures that had evolved over the years. These guidelines address the duties of the Board, director qualifications and selection process, Board operations, Board committee matters and continuing education. The guidelines also provide for annual self-evaluations by the Board and its committees. The Board reviews these guidelines on an annual basis. The guidelines are available on the Company’s website at www.enzo.com and in print by contacting Investor Relations at (631) 755-5500.
Corporate Code of Business Conduct and Ethics - The Company has a Code of Business Conduct and Ethics that applies to all of the Company’s employees, officers and members of the Board. The Code of Business Conduct and Ethics is available on the Company’s website at www.enzo.com and in print by contacting Investor Relations at (631) 755-5500.
Board Committee Charters - Each of the Company’s Audit, Compensation and Nominating & Governance Committees has a written charter adopted by the Board that establishes practices and procedures for such committee in accordance with applicable corporate governance rules and regulations. The charters are available on the Company’s website at www.enzo.com and in print by contacting Investor Relations at (631) 755-5500.
Diversity Policy - As part of the Company’s commitment to improved governance and in connection with the Company’s shareholder engagement program, the Board adopted a diversity policy in 2019. The Nominating & Governance Committee shall consider diversity in its evaluation of candidates for Board membership in accordance with this policy. To reflect this policy, the Nominating & Governance Committee seeks to include diverse candidates in all director searches, taking into account diversity of age, gender, race, culture, business experience, education, skills, character and judgment, including by affirmatively instructing any search firm retained to assist the Nominating & Governance Committee in identifying director candidates, to seek to include diverse candidates from traditional and non-traditional candidate groups.
Director Term Limits - The total cumulative length of time an Outside Director may serve on the Board is limited to a maximum of nine one-year terms, whether consecutively or in total, plus any portion of an earlier term that such Outside Director may have been appointed to serve. The limit set forth above may be extended for up to three additional one-year terms if such individual is re-nominated by the unanimous agreement of the Board.
Lead Independent Director Charter - As part of the Company’s ongoing commitment to improved governance and in connection with the Company’s shareholder engagement program, the Company amended the Lead Independent Director Charter in 2019 to strengthen the duties of the Lead Independent Director role. The duties of the Lead Independent Director, as set forth in the amended Lead Independent Director Charter, among other things, are to:
| ● | develop the agendas for and serve as chairman of the executive sessions of the independent directors of the Company; | |
| ● | serve as principal liaison between the independent directors of the Company and the Chairman of the Board and between the independent directors and senior management; | |
| ● | approve the agendas for Board meetings; | |
| ● | call meetings of the independent directors; |
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| ● | approve the appropriate schedule of Board meetings; advise the Chairman of the Board as to the quality, quantity and timeliness of the information submitted by the Company’s management that is necessary or appropriate for the independent directors to effectively and responsibly perform their duties; | |
| ● | ensure that independent directors have adequate opportunities to meet and discuss issues in executive sessions without management present; if the Chairman of the Board is unable to attend a Board meeting, act as chairman of such Board meeting; | |
| ● | ensure that he or she may be available for consultation and direct communication with major shareholders, if deemed appropriate, and act as a contact for other interested persons, if other Company spokespersons are not available; | |
| ● | share with other directors, as he or she deems appropriate, letters and other communications and contact that he or she receives; | |
| ● | and perform such other duties as the Board shall from time to time delegate. |
In addition, the Lead Independent Director may require information relating to any matter be distributed to the Board. The Lead Independent Director role was established in October 2005. Currently, there is no Lead Independent Director, as the Board Chair, Steven J. Pully is considered an independent director.
The Lead Independent Director Charter, as amended, is available on the Company’s website at www.enzo.com, and in print by contacting Investor Relations at (631) 755-5500.
Director Independence Requirements
The Board believes that a majority of its members should be independent, non-employee directors. The Board adopted the following “Director Independence Standards,” which are consistent with criteria established by the NYSE, to assist the Board in making these independence determinations:
No director can qualify as independent if he or she has a material relationship with the Company outside of his or her service as a director of the Company. A director is not independent if, within the preceding three years:
| ● | the director was an employee of the Company; | |
| ● | an immediate family member of the director was an executive officer of the Company; | |
| ● | the director was affiliated with or employed by a present or former internal or external auditor of the Company; | |
| ● | an immediate family member of the director was affiliated with or employed in a professional capacity by a present or former internal or external auditor of the Company; | |
| ● | the director, or an immediate family member of the director, received more than $120,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service); | |
| ● | the director, or an immediate family member of the director, was employed as an executive officer of another company where any of the Company’s executives served on that company’s compensation committee of the board of directors; | |
| ● | the director was an executive officer or employee, or an immediate family member of the director was an executive officer, of another company that made payments to, or received payments from, the Company for property or services in an amount which, in any single fiscal year, exceeded the greater of $1 million or two percent (2%) of such other company’s consolidated gross revenues; |
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| ● | the director, or an immediate family member of the director, was an executive officer of another company that was indebted to the Company, or to which the Company was indebted, where the total amount of either company’s indebtedness to the other was five percent (5%) or more of the total consolidated assets of the company he or she served as an executive officer; or | |
| ● | the director, or an immediate family member of the director, was an officer, director or trustee of a charitable organization where the Company’s annual discretionary charitable contributions to the charitable organization exceeded the greater of $1 million or two percent (2%) of that organization’s consolidated gross revenues. |
The Board has reviewed all material transactions and relationships among each director, and any member of his or her immediate family, and the Company, its senior management and its independent auditors. Based on this review and in accordance with its independence standards outlined above, the Board has affirmatively determined that all of the non-employee directors are independent as such term is defined by the NYSE.
Board Leadership Structure and Role in Risk Oversight
During the fiscal year ended July 31, 2023, Hamid Erfanian served as the Company’s Chief Executive Officer and as a member of the Board and Mary Tagliaferri, M.D., served as the Company’s Chair of the Board. On September 5, 2023, the Board appointed Kara Cannon to serve as interim Chief Executive Officer with immediate effect following Mr. Erfanian’s resignation as Chief Executive Officer and Board member. On October 26, 2023, the Board appointed Steven J. Pully to serve as Chair of the Board and Chair of the Audit Committee. On November 21, 2023, the Board appointed Mr. Pully to serve as a member of the Compensation Committee and the Nominating & Governance Committee.
The Company believes that having a Chair of the Board separate from our interim CEO promotes effective oversight, strengthens our Board’s independent leadership, supports our commitment to enhancing shareholder value and strong governance and is the best leadership structure for the Company at this time. In addition, Mr. Pully’s deep executive management and board experience makes him well-suited for the role of Chair of the Board.
As described above, four of the Company’s five directors are independent. In addition, all of the directors on each of the Audit Committee, Compensation Committee and Nominations and Corporate Governance Committee are independent directors and each of these committees is led by a committee chair. The committee chairs set the agendas for their committees and report to the full Board. All of the independent directors are highly accomplished and experienced business people in their respective fields, have demonstrated leadership in significant enterprises and are familiar with board processes. The Company’s independent directors bring experience, oversight and expertise from outside the Company and industry. Dr. Rabbani, as the Company’s former Chairman of the Board and former Chief Executive Officer, brings Company-specific experience and expertise.
While the Board is responsible for overseeing the Company’s risk management, the Board has delegated many of these functions to the Audit Committee. Under its charter, the Audit Committee is responsible for discussing the Company’s major financial risk exposures, the guidelines and policies by which risk assessment and management is undertaken, and the steps management has taken to monitor and control risk exposure with management and the independent auditors. In addition to the Audit Committee’s work in overseeing risk management, the full Board regularly engages in discussions regarding the most significant risks that the Company is facing and how those risks are being managed. The Board also receives risk management updates directly from the Company’s senior management and from the chair of the Audit Committee. In addition, the Chair of the Board’s deep executive management and board experience makes him well-qualified to lead the Board in assessing the various risks the Company faces. The Board believes that the work undertaken by the Audit Committee, the full Board and the Chair of the Board, enables the Board to effectively oversee the Company’s risk management function.
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Board Nomination Policies and Procedure
The Nominating & Governance Committee is responsible for identifying, evaluating and recommending candidates for election to the Board, with due consideration for recommendations made by other Board members, the Chief Executive Officer and other sources, including shareholders. The total cumulative length of time that any “Outside Director” (a member of the Board who is not an officer or employee of the Company) may serve on the Board is limited to a maximum of nine, one-year terms. The term limit set forth above may be extended for up to a maximum of three additional one-year terms if such individual is renominated by the unanimous agreement of the Board. The Nominating & Governance Committee also considers the appropriate balance of experience, skills and characteristics desirable among the members of the Board to maintain a diverse Board. The independent members of the Board review the Nominating & Governance Committee candidates and nominate candidates for election by the Company shareholders. The Nominating & Governance Committee will consider candidates for election to the Board recommended by shareholders of the Company. The procedures for submitting shareholder recommendations are explained below under “Shareholder Proposals.”
Directors must also possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of all shareholders. Board members are expected to diligently prepare for, attend and participate in Board and applicable committee meetings. Each Board member is expected to ensure that other existing and future commitments do not materially interfere with the member’s service as a director.
The Nominating & Governance Committee also reviews whether a potential candidate will meet the Company’s independence standards and any other director or committee membership requirements imposed by law, regulation or NYSE rules.
The Nominating & Governance Committee will consider, among other factors, the following to evaluate recommended nominees:
| ● | the Board’s current composition, including expertise, diversity, balance of management and non-management directors; | |
| ● | independence and other qualifications required or recommended by applicable laws, rules and regulations (including NYSE requirements) and the Company’s policies and procedures; and | |
| ● | the general qualifications of potential nominees, including, but not limited to: personal integrity, loyalty to the Company and concern for its success and welfare; experience with strategy and policy setting; high-level leadership experience in business; breadth of knowledge about issues affecting the Company; an ability to work effectively with others; sufficient time to devote to the Company; and freedom from conflicts of interest. |
Director candidates recommended to the Nominating & Governance Committee are subject to full Board approval and subsequent election by the shareholders. The Board is also responsible for electing directors to fill vacancies on the Board that occur due to retirement, resignation, expansion of the Board or other reasons between the annual meetings of shareholders. The Nominating & Governance Committee may retain a recruitment firm, from time to time, to assist in identifying and evaluating director candidates. When a firm is used, the Nominating & Governance Committee provides specified criteria for director candidates, tailored to the needs of the Board at that time, and pays the firm a fee for these services. Suggestions for director candidates are also received from Board members, management, shareholders and may be solicited from professional associations as well.
Board Committees
All members of each of the Company’s three standing committees - Audit, Compensation and Nominating & Governance - are required to meet the Company’s Director Independence Standards as well as the independent director standards established by NYSE. See below for a description of the responsibilities of the Board’s standing committees.
Executive Sessions of Non-Management Directors
The Board periodically holds meetings of only the independent directors without management or other board members present.
Board Access to Independent Advisors
The Board as a whole, and each of the Board committees separately, has authority to retain and terminate such independent consultants, counselors or advisors to the Board as each shall deem necessary or appropriate.
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Communications with the Board
Direct Communications - Any interested party desiring to communicate with the Board or with any director regarding the Company may write to the Board or the Secretary, c/o Office of the Secretary, Enzo Biochem, Inc., 81 Executive Blvd., Suite 3, Farmingdale, New York 11735. The Office of the Secretary will forward all such communications to the director(s). Interested parties may also submit an email by filling out the email form on the Company’s website at www.enzo.com. Moreover, any interested party may contact the non-management directors of the Board by emailing or asking the Board Chair to share information with the non-management members.
Annual Meeting - The Company encourages its directors to attend the annual meeting of shareholders each year. Four of the directors then in office attended the Annual Meeting of Shareholders held in January 2023.
Meetings of the Board and its Committees
During the fiscal year ended July 31, 2023, there were 35 formal meetings of the Board, and several informal meetings. None of the directors attended less than 75% of the meetings of the Board (including committee meetings).
Currently, the Board has a Nominating & Governance Committee, an Audit Committee and a Compensation Committee, and since July 2022, the M&A subcommittee (the “M&A Committee”). The Board established this independent subcommittee of the Board to oversee the merger and acquisition process and report to the broader Board. The subcommittee is made up of the three independent Board members: Bradley L. Radoff, Mary Tagliaferri, M.D. and Ian Walters, M.D.
The Nominating & Governance Committee, which includes a Succession subcommittee, had one formal meeting, the Audit Committee had seven formal meetings and the Compensation Committee had three formal meetings during the fiscal year ended July 31, 2023. Each of the committees also had informal meetings.
The Audit Committee was established by and among the Board for the purpose of overseeing the accounting and financial reporting processes of the Company and audits of the financial statements of the Company as defined in Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee is authorized to review proposals of the Company’s auditors regarding the annual audit, recommend the engagement or discharge of the auditors, review recommendations of such auditors concerning accounting principles and the adequacy of internal controls and accounting procedures and practices, review the scope of the annual audit, approve or disapprove each professional service or type of service other than standard auditing services to be provided by the auditors, and review and discuss the audited financial statements with the auditors.
The current members of the Audit Committee are Mr. Pully, Dr. Walters, Dr. Tagliaferri and Mr. Radoff. Mr. Radoff was the Chair from January 2022 to October 26, 2023, at which time Mr. Pully became Chair. The Board has determined that each of the Audit Committee members is independent, as defined in the NYSE’s listing standards and applicable SEC Rules. The Board has further determined that Mr. Pully is an “audit committee financial expert” as such term is defined under Item 407(d)(5)(ii) of Regulation S-K promulgated under the Exchange Act, and that each director is financially literate as required under the NYSE listing standards.
The Compensation Committee has the power and authority to (i) establish a general compensation policy for the officers and employees of the Company, including to establish and at least annually review executive officers’ salaries and non-equity incentive compensation plan program and levels of officers’ participation in the benefit plans of the Company, (ii) prepare any reports that may be required by the regulations of the SEC or otherwise relating to officer compensation, (iii) approve any increases in directors’ fees, (iv) grant stock options and/or other equity instruments authorized by senior executives for non-executive officers and (v) exercise all other powers of the Board with respect to matters involving the compensation of employees and the employee benefits of the Company as shall be delegated by the Board to the Compensation Committee.
The current members of the Compensation Committee are Mr. Pully, Mr. Radoff, Dr. Tagliaferri and Dr. Walters. The Board has determined that each member of the Compensation Committee is independent, as defined in the NYSE listing standards. Dr. Walters has been the Chair of the Compensation Committee since January 2021.
The Nominating & Governance Committee has the power to recommend to the Board prior to each annual meeting of the shareholders of the Company: (i) the appropriate size and composition of the Board; and (ii) nominees: (1) for election to the Board for whom the Company should solicit proxies; (2) to serve as proxies in connection with the annual meeting of shareholders; and (3) for election to all committees of the Board other than the Nominating & Governance Committee. The Nominating & Governance Committee will consider nominations from the shareholders, provided that they are made in accordance with the By-Laws. When evaluating prospective director candidates, the Nominating & Governance Committee conducts individual evaluations against the criteria stated in the Nominating and Corporate Governance guidelines. All director candidates, regardless of the source of their nomination, are evaluated using the same criteria.
The current members of the Nominating & Governance Committee are Mr. Pully, Mr. Radoff, Dr. Walters and Dr. Tagliaferri, who has been Chair of the committee since January 2021. The Board has determined that each member of the Nominating & Governance Committee is independent, as defined in the NYSE listing standards.
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Executive Officers and Key Employees
Set forth below is the name, age and title of each executive officer and key employee of the Company followed by a summary of each executive’s and key employee’s background.
| Name | Age | Year
Became an Executive Officer or Key Employee |
Position | |||
| Kara Cannon(1) | 55 | 2018 | Interim Chief Executive Officer | |||
| Patricia Eckert(2) | 46 | 2022 | Interim Chief Financial Officer | |||
| Matthew Kupferberg(3) | 58 | 2022 | General Counsel, Secretary |
| (1) | Ms. Cannon became interim Chief Executive Officer effective September 5, 2023 upon Mr. Erfanian’s resignation. |
| (2) | Ms. Eckert became interim Chief Financial Officer effective November 14, 2022. |
| (3) | Mr. Kupferberg was hired as General Counsel on August 1, 2022. |
Biographical Information Regarding Executive Officers and Key Employees
KARA CANNON became interim Chief Executive Officer on September 5, 2023. Prior to that, she was Chief Operating Officer and has been employed with the Company since 2011. She is responsible for strategic and tactical marketing, sales, manufacturing and general management of the operations. Ms. Cannon previously held executive positions at Pall Corporation, where she focused on commercial operations within the areas of diagnostics, biotechnology and biosciences. She has also held marketing and technical positions at Dynal Biotech (now ThermoFisher Scientific). She has had extensive experience in the marketing and selling of innovative platforms for the diagnostics markets, as well as, the development and execution of strategic plans for the growth and sustainability of diagnostic-related businesses. Ms. Cannon holds a BA from Franklin and Marshall College.
PATRICIA ECKERT has served as interim Chief Financial Officer since November 14, 2022 and has been employed with the Company since 2017 in various finance roles. Ms. Eckert previously served as accounting director at Pall Corporation, where she advanced through multiple accounting and finance roles, ultimately managing a broad team and directly leading all aspects of implementation of the ASC 606 Revenue Recognition standard, overseeing matters relating to SOX compliance and driving multiple operational and finance cost savings initiatives. Prior to her tenure at Pall Corporation, Ms. Eckert served as senior accountant at a midsize accounting firm based in New York. She graduated cum laude with a BBA in accounting and an MBA in finance, both from Hofstra University in Hempstead, NY.
MATTHEW KUPFERBERG has been the Company General Counsel since August 1, 2022. Mr. Kupferberg was most recently General Counsel, Chief Compliance Officer and Privacy Officer of Digital Medical Technologies, LLC (dba AdhereTech), a medication adherence technology company. His previous experience includes Health Delegates, LLC, RxEDO, Inc. and DaVita, Inc. At DaVita, he was Assistant General Counsel to DaVita Rx, DaVita’s pharmacy subsidiary. He also served as Assistant General Counsel at Humana, Inc., a managed health care company that markets and administers health insurance. Earlier in his career Mr. Kupferberg worked at the law firms ArentFox Schiff LLP and McDermott, Will & Emery. He received his B.A. from Binghamton University (Phi Beta Kappa) and his J.D. from Boston College Law School. Mr. Kupferberg is licensed in the states of New York, New Jersey, and Massachusetts.
8
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics (as such term is defined in Item 406 of Regulation S-K). The Code of Business Conduct and Ethics is available on the Company’s website at www.enzo.com, and in print by contacting Investor Relations at (631) 755-5500. The Code of Business Conduct and Ethics applies to the Company’s employees, officers and members of the Board. The Code of Business Conduct and Ethics has been designed to deter wrongdoing and to promote:
| ● | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; | |
| ● | Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company; | |
| ● | Compliance with applicable governmental laws, rules and regulations; | |
| ● | The prompt internal reporting or violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and | |
| ● | Accountability for adherence to the Code of Business and Conduct and Ethics. |
ITEM 11. Executive Compensation.
Director Compensation
The following table sets forth the information concerning compensation earned during our fiscal year ended July 31, 2023 by all non-employee Directors:
| Name | Fees
Earned or Paid in Cash | Restricted Stock Unit Awards(1) | Total | |||||||||
| Mary Tagliaferri, M.D. | $ | 110,000 | $ | 100,000 | $ | 210,000 | ||||||
| Former Chair of the Board(2) | ||||||||||||
| Ian B. Walters, M.D. | $ | 90,000 | $ | 100,000 | $ | 190,000 | ||||||
| Director | ||||||||||||
| Elazar Rabbani | $ | 50,000 | — | $ | 50,000 | |||||||
| Director | ||||||||||||
| Bradley L Radoff | $ | 95,000 | $ | 100,000 | $ | 195,000 | ||||||
| Director | ||||||||||||
| (1) | Represents the grant fair value on the respective grant dates for the fiscal year ended July 31, 2023, in accordance with accounting authoritative guidance. The assumptions used in calculating these amounts are set forth in Note 14 to the Company’s consolidated financial statements for the fiscal year ended July 31, 2023, included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023 filed with the SEC on November 3, 2023. |
| (2) | Dr. Tagliaferri served as Chair of the Board for the entire fiscal year ended July 31, 2023 and until October 26, 2023. |
9
Compensation of Executive Officers
Summary Compensation Table
The following table sets forth summary information concerning compensation awarded to, paid to or earned by each of our named executive officers for each of the fiscal years ended July 31, 2023 and 2022.
| Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards(2) | Option Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation (5) | Total | |||||||||||||||||||||||
| Hamid Erfanian(6) | 2023 | $ | 615,877 | $ | 1,502,488 | $ | 197,000 | $ | 321,000 | - | $ | 27,827 | $ | 2,664,192 | |||||||||||||||||
| Former Chief Executive Officer | 2022 | $ | 415,385 | - | $ | 881,400 | $ | 1,246,000 | $ | 360,000 | $ | 382 | $ | 2,903,167 | |||||||||||||||||
| Kara Cannon(7) | 2023 | $ | 298,523 | $ | 661,423 | $ | 17,010 | $ | 214,000 | - | $ | 30,837 | $ | 1,221,793 | |||||||||||||||||
| Interim Chief Executive Officer, former Chief Operating Officer | 2022 | $ | 269,731 | $ | 40,000 | - | $ | 294,875 | $ | 140,000 | $ | 24,552 | $ | 769,158 | |||||||||||||||||
| Patricia Eckert(8) | 2023 | $ | 204,500 | $ | 185,000 | - | $ | 53,500 | - | $ | 10,559 | $ | 453,559 | ||||||||||||||||||
| Interim Chief Financial Officer | 2022 | $ | 181,058 | $ | 20,000 | - | $ | 58,500 | - | $ | 9,907 | $ | 269,465 | ||||||||||||||||||
| (1) | Fiscal 2022 amounts represent sign on bonus or merit bonus. For Mr. Erfanian and Ms. Cannon, fiscal 2023 amounts represent bonuses earned as a result of the Company’s entry into the previously disclosed Asset Purchase Agreement, dated March 16, 2023, as amended July 3, 2023, with Laboratory Corporation of America Holdings (the “APA”). For Ms. Eckert, fiscal 2023 amount represents $130,000 for APA bonus and $55,000 merit bonus. |
| (2) | For Mr. Erfanian, fiscal 2022 amount represents the grant date fair value of restricted stock units on November 8, 2021, the date of grant, and for fiscal 2023 the grant date fair value of restricted stock units on November 23, 2022. For Ms. Cannon, represents the fair value of vested and issued performance stock units. |
| (3) | Represents the fair market value of incentive stock option awards granted to Named Executive Officers on the date of grant, calculated in accordance with FASB ASC Topic 718 for all awards of stock options granted during the relevant fiscal year. Assumptions used in the calculation of these amounts are included in Note 14 to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended July 31, 2023. |
| (4) | Represents awards accrued under the Pay for Performance Plan for the year ended July 31, 2022. The awards under the Pay for Performance Plan for the year ended July 31, 2023 are not calculable through the latest practicable date. The Compensation Committee expects to determine these amounts on or before January 15, 2024, and such amounts will be disclosed in a filing by the Company in a Current Report on Form 8-K under Item 5.02(f) once determined. |
| (5) | See the “All Other Compensation” table below for additional information. |
| (6) | Mr. Erfanian served as Chief Executive Officer during our entire fiscal year ended July 31, 2023 and until his resignation effective September 5, 2023. |
| (7) | Ms. Cannon served as Chief Operating Officer during our entire fiscal year ended July 31, 2023 and until September 5, 2023 when she started her tenure as our interim Chief Executive Officer. |
| (8) | Ms. Eckert has served as interim Chief Financial Officer since November 14, 2022. |
All Other Compensation
The following table contains information regarding each component of “All Other Compensation” in the Summary Compensation Table to the Named Executive Officers for the fiscal years ended July 31, 2023 and 2022.
| Name | Year | 401(k)(1) | Life Insurance(2) | Personal
Use of Auto(3) | Total
All Other Compensation | |||||||||||||
| Hamid Erfanian | 2023 | $ | 13,500 | $ | 327 | $ | 14,000 | $ | 27,827 | |||||||||
| 2022 | - | $ | 382 | - | $ | 382 | ||||||||||||
| Kara Cannon | 2023 | $ | 13,500 | $ | 1,837 | $ | 15,500 | $ | 30,837 | |||||||||
| 2022 | $ | 13,000 | $ | 1,837 | $ | 15,500 | $ | 30,337 | ||||||||||
| Patricia Eckert | 2023 | $ | 10,250 | $ | 309 | - | $ | 10,559 | ||||||||||
| 2022 | $ | 9,598 | $ | 309 | - | $ | 9,907 | |||||||||||
| (1) | Represents Company matches under our 401(k) plan. |
| (2) | Represents premiums of term policies of which the Named Executive Officer or other party is the beneficiary. |
| (3) | Represents car allowance. |
10
Employment Agreements
On September 5, 2023, the Company entered into a Separation Agreement and General Release (the “Separation Agreement”) with Hamid Erfanian, the Company’s Chief Executive Officer, which provides for Mr. Erfanian’s separation of employment, resignations from his positions as Chief Executive Officer and as a director of the Company and the payment of severance benefits as described below. Pursuant to the Separation Agreement, Mr. Erfanian’s resignations as Chief Executive Officer and as a director were effective immediately and his final date of employment with the Company was November 18, 2023 (the “Separation Date”). Pursuant to the Separation Agreement, Mr. Erfanian is entitled to the following severance benefits: (i) a payment equaling twelve (12) months of his annual base salary of $624,000, subject to standard payroll deductions and withholdings; (ii) a lump-sum payment of $187,200, representing his annual bonus; (iii) a grant of restricted shares of the Company’s common stock, in an amount equal to $1,502,488 with 50% of the restricted common stock granted as soon as reasonably practicable after September 13, 2023, and the remaining 50% granted on the earlier of July 24, 2024 and a Change in Control of the Company (as defined in Mr. Erfanian’s employment agreement with the Company); and (iv) the vesting on the Separation Date of a restricted stock unit award of 260,000 shares of the Company’s common stock (of which 173,333 remain) and an option to purchase 700,000 shares of the Company’s common stock, that were previously granted to Mr. Erfanian. The foregoing is subject to continued compliance with existing restrictive covenants under Mr. Erfanian’s employment agreement with the Company and execution of a reaffirmation.
Kara Cannon is an “at will” employee. Ms. Cannon is a party to an employment agreement which provides for twelve months severance and payment of an Annual Bonus if termination occurs subsequent to the conclusion of the fiscal year but prior to the payment of the Annual Bonus to which the fiscal year relates, if she is terminated by the Company without cause or resigns for Good Reason, as defined. She is also entitled to a Transaction Bonus in the event of a change in control of the Company or the sale of an operating subsidiary. Also, certain of her equity award agreements provide for the acceleration of unvested awards after a change of control. Patricia Eckert and Matthew Kupferberg are “at will” employees and not parties to any employment agreements with the Company.
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Benefits and All Other Compensation
We maintain broad-based benefits that are provided to all employees, including health and dental insurance, group life insurance and a 401(k) plan. Named Executive Officers and Key Employees are eligible to participate in our employee benefit plans. The annual Company match for our Named Executive Officers and other employees is up to $13,500 if over 50 years old.
We do not provide post-retirement health coverage to our Named Executive Officers or our employees. Our health and insurance plans are substantially the same among all management levels at the Company.
In particular circumstances, we may provide relocation allowances when executives first join us. The purpose of this program is to attract talented executives outside our geographic area. Certain Named Executives Officers and Key Employees are provided use of a Company-owned vehicle for business and personal use or provided a car allowance.
Severance and Change in Control Benefits
Kara Cannon is an “at will” employee but is party to an employment agreement that provides for severance or change of control benefits and has certain equity award agreements that provide for the acceleration of unvested awards upon a change of control. We have provided more information about these benefits in the description of the Employment Agreements above.
Matthew Kupferberg and Patricia Eckert are “at will” employees and not parties to any agreements with the Company that provide for severance or change of control benefits other than certain equity award agreements that provide for the acceleration of unvested awards upon a change of control.
12
Outstanding Equity Awards at Fiscal Year End—July 31, 2023
The following table sets forth summary information regarding the outstanding equity awards made to the Named Executive Officers at July 31, 2023.
As noted in the description of Employment Agreements above, pursuant to his Separation Agreement, Mr. Erfanian is entitled to, among other benefits the vesting on the Separation Date of a restricted stock unit award of 260,000 shares of Common Stock (of which 173,333 remained as of July 31, 2023) and an option to purchase 700,000 shares of Common Stock, that were previously granted to him.
| Options awards | Stock awards | |||||||||||||||||||||||||||||
| Name | Number
of securities underlying unexercised options exercisable | Number
of securities underlying unexercised options unexercisable(1) | Option exercise price | Options expiration date | Number of shares or units of stock that have not vested(2) | Market value of shares or units of stock that have not vested(3) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested(4) | Equity incentive plan awards: Market or payout value of Unearned shares, units or other rights that have not vested(5) | ||||||||||||||||||||||
| Hamid Erfanian | 233,334 | 466,666 | $ | 3.39 | 11/8/2026 | 173,333 | $ | 256,533 | — | — | ||||||||||||||||||||
| — | 300,000 | $ | 1.97 | 11/23/2027 | 100,000 | $ | 148,000 | |||||||||||||||||||||||
| Kara Cannon | 52,000 | — | $ | 2.80 | 1/3/2024 | — | — | — | — | |||||||||||||||||||||
| 55,400 | — | $ | 2.20 | 2/24/2025 | — | — | — | — | ||||||||||||||||||||||
| 55,400 | — | $ | 2.63 | 1/11/2026 | — | — | 10,640 | $ | 15,747 | |||||||||||||||||||||
| 29,167 | 58,333 | $ | 3.36 | 2/11/2027 | ||||||||||||||||||||||||||
| 29,167 | 58,333 | $ | 2.98 | 3/24/2027 | — | — | — | — | ||||||||||||||||||||||
| 66,667 | 133,333 | $ | 1.97 | 11/23/27 | — | — | — | — | ||||||||||||||||||||||
| Patricia Eckert | 16,667 | 33,333 | $ | 2.21 | 5/26/2027 | — | — | — | — | |||||||||||||||||||||
| 8,333 | 16,667 | $ | 2.33 | 11/14/2027 | — | — | — | — | ||||||||||||||||||||||
| — | 25,000 | $ | 2.29 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||
| (1) | Each option award vests in equal amounts on the first, second and third anniversaries of the award date, which was January 3, 2019 for the options granted at $2.80 per share, February 24, 2020 for the options granted at $2.20 per share, January 11, 2021 for the options granted at $2.63 per share, November 8, 2021 for the options granted at $3.39 per share, February 11, 2022 for the options granted at $3.36 per share, March 24, 2022 for the options granted at $2.98 per share, May 26, 2022 for the options granted at $2.21 per share, November 14, 2022 for the options granted at $2.33 per share, November 23, 2022 for the options granted at $1.97 per share and February 26, 2023 for the options granted at $2.29 per share. In accordance with Mr. Erfanian’s Separation and General Release agreement, his unvested option to purchase 466,666 shares of Common Stock became fully vested as of November 18, 2023. |
| (2) | The number of unearned restricted stock units (“RSUs”) in this column is based on awards made to Mr. Erfanian on November 11, 2021 as part of his employment agreement at $3.39 per share and an award made to him on November 23, 2022 at $1.97 per share. In accordance with Mr. Erfanian’s Separation and General Release agreement, the unvested portion of his RSUs totaling 173,333 shares of Common Stock became fully vested as of November 18, 2023. |
| (3) | Calculated using the closing market price of the Company’s common stock on July 31, 2023 of $1.48 per share. |
| (4) | Represents PSUs granted on February 24, 2020 and vested on November 3, 2023, the third anniversary of the grant measurement date, based on achievement of the Company’s revenue and adjusted EBITDA performance goals for the fiscal years 2020-2023 performance period. |
| (5) | Calculated using the closing market price of the Common Stock on July 31, 2023 of $1.48 per share on a target performance basis and after applying the minimum relative total shareholder return (TSR) modifier. |
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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Beneficial Ownership of Principal Shareholders and Management
Set forth below is information, as of November 21, 2023, concerning stock ownership of (i) each of the Company’s named executive officers, (ii) each of the Company’s directors and director nominees, (iii) all of the Company’s executive officers and directors as a group and (iv) all persons known by the Company to beneficially own more than 5% of the Company’s common stock.
The percentages in the “Percent of Class” column are calculated in accordance with the rules of the SEC, under which a person may be deemed to be the beneficial owner of shares if that person has or shares the power to vote or dispose of those shares or has the right to acquire beneficial ownership of those shares within 60 days (for example, through the exercise of an option or warrant). The shares shown in the table as beneficially owned by certain individuals may include shares owned by certain members of their respective families. Because of these rules, more than one person may be deemed to be the beneficial owner of the same shares. The inclusion of the shares shown in the table is not necessarily an admission of beneficial ownership of those shares by the person indicated. Except as otherwise indicated, each of the persons named has sole voting and investment power with respect to the shares shown.
| Title of Class | Name and Address of Beneficial Owner(1) | Amount
and Nature of Beneficial Ownership(1) | Percent
of Class(2) | |||||||
| Named Executive Officers | ||||||||||
| Common Stock | Hamid Erfanian | 1,366,497 | (3) | 2.7 | % | |||||
| Common Stock | Kara Cannon | 412,870 | (4) | * | ||||||
| Common Stock | Patricia Eckert | 44,400 | (5) | * | ||||||
| Directors | ||||||||||
| Common Stock | Bradley L. Radoff | 4,646,798 | (6) | 9.2 | % | |||||
| Common Stock | Mary Tagliaferri, M.D. | 138,299 | (7) | * | ||||||
| Common Stock | Ian B. Walters, M.D. | 138,299 | (8) | * | ||||||
| Common Stock | Steven J. Pully(9) | - | - | |||||||
| Common Stock | Elazar Rabbani, Ph.D. | 2,225,098 | (10) | 4.4 | % | |||||
| Common Stock | All directors and executive officers as a group (8 persons) | 8,972,261 | (11) | 17.2 | % | |||||
| 5% Holders | ||||||||||
| Common Stock | Harbert Management Corp | 5,175,913 | (12) | 10.2 | % | |||||
| Common Stock | James G. Wolf | 4,942,400 | (13) | 9.8 | % | |||||
| Common Stock | 1 Main Capital Management LLC | 2,874,125 | (14) | 5.7 | % | |||||
| Common Stock | Renaissance Technologies, LLC | 2,813,964 | (15) | 5.6 | % | |||||
| * | Represents beneficial ownership of less than 1%. |
| (1) | Except as otherwise noted in the footnotes to the table, all shares of Common Stock are beneficially owned and the sole investment and voting power is held by the persons named, and such persons’ address is c/o Enzo Biochem, Inc., 81 Executive Blvd., Suite 3 Farmingdale, NY 11735. |
| (2) | Based upon 50,489,771 outstanding shares of Common Stock as of the close of business on November 21, 2023. Common Stock not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire shares within 60 days from November 21, 2023 is treated as outstanding when determining the amount and percentage of Common Stock owned by directors and executive officers individually and as a group. |
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| (3) | Includes (i) 173,333 shares of Common Stock issuable for RSUs vested and (ii) 800,000 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023. |
| (4) | Includes (i) 287,800 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023, (ii) 10,640 shares issuable within 60 days from November 21, 2023 under a vested performance stock award, and (ii) 33,160 shares of Common Stock held in the Company’s 401(k) plan. |
| (5) | Includes (i) 25,000 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023, and (ii) 19,400 shares of Common Stock held in the Company’s 401(k) plan. |
| (6) | Includes 430,000 shares of Common Stock held by The Radoff Family Foundation of which Mr. Radoff is deemed to be the beneficial owner. The address of Bradley L. Radoff is 2727 Kirby Drive Unit 29L Houston, Texas 77098. |
| (7) | Includes 77,101 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023. |
| (8) | Includes 77,101 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023. |
| (9) | Mr. Pully became a director of the Company on October 26, 2023. |
| (10) | Includes (i) 258,100 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023, (ii) 5,308 shares of Common Stock held in the name of Dr. Rabbani as custodian for certain of his children, and (iii) 18,794 shares of Common Stock held in the name of Dr. Rabbani’s wife as custodian for certain of their children. |
| (11) | Includes (i) 1,525,102 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from November 21, 2023, (ii) 173,333 shares of Common Stock which are issuable within 60 days from November 21, 2023 under restricted stock unit awards, and (iii) 10,640 shares of Common Stock which are issuable under a vested performance stock award. |
| (12) | Based solely on a Schedule 13D/A filed on October 28, 2021. The address of Harbert Management Corp is 2100 Third Avenue North, Suite 600, Birmingham, AL 35203. |
| (13) | Based solely on a Schedule 13D/A filed on January 23, 2023. The address of James G. Wolf is 105, Flyway Drive, Kiawah Island, SC 29455. |
| (14) | Based solely on a Schedule 13G filed on September 11, 2023. The address of 1 Main Capital Management LLC is 8 Wright St. Suite 107 Westport, CT 06880. |
| (15) | Based solely on a Schedule 13G/A filed on February 13, 2023. The address of Renaissance Technologies, LLC is 800 Third Avenue, New York, NY 10022. |
15
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information regarding our existing equity compensation plans as of July 31, 2023:
| Plan category | (A)
Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) | Weighted-average exercise price of outstanding options, warrants and rights | Number
of securities remaining available for future issuance under equity compensation plans(2) | |||||||||
| Equity compensation plans approved by security holders | 4,386,990 | $ | 2.56 | 4,014,000 | ||||||||
| Equity compensation plans not approved by security holders | - | - | - | |||||||||
| Total | 4,386,990 | $ | 2.56 | 4,014,000 | ||||||||
| (1) | Shares to be issued upon exercise of options or vesting of restricted stock unit awards and performance stock unit awards under the 2011 Incentive Plan. |
| (2) | Shares available for awards or grants under the 2011 Incentive Plan, excluding securities reflected in column (A). |
ITEM 13. Certain Relationships and Related Transactions, and Director Independence.
Certain Relationships and Related Transactions
It is the responsibility of the Nominating & Governance Committee to consider questions of possible conflicts of interest of directors and of the Company’s senior executives, which includes the consideration of all transactions required to be disclosed pursuant to the SEC’s related person disclosure requirements. In addition, the Board has a Related Persons Policy which states that all related person transactions shall be in the best interests of the Company and, unless different terms are specifically approved or ratified by disinterested members of the Board, must be on terms that are (i) no less favorable to the Company than would be obtained in a similar transaction with an unaffiliated third party under the same or similar circumstances, or (ii) generally available to substantially all employees of the Company. In addition, if any non-material or material related person transaction relates to any executive officer or director, it must be reviewed by the Nominating & Governance Committee who shall determine whether the transaction is in compliance with the Company’s Related Person Policy.
Enzo Clinical Labs, Inc., a former subsidiary of the Company (“Enzo Labs”), leases a facility located in Farmingdale, New York from Pari Management Corporation (“Pari”). Pari is owned equally by Elazar Rabbani, Ph.D., the former Chairman and Secretary of the Company and a current director; Shahram K. Rabbani, a former officer and former director of the Company; and Barry Weiner, the former President and Treasurer of the Company, and his wife. The lease originally commenced on December 20, 1989, was amended and extended in March 2005 and October 2015 and now terminates on March 31, 2027. At the time of the execution of the lease, the non-interested members of the Board reviewed and approved the transaction in accordance with the Company’s procedures for reviewing related party transactions.
During the fiscal year ended July 31, 2023, Enzo Labs paid approximately $1,937,000 to Pari with respect to such facility and future payments are subject to cost of living adjustments.
Director Independence
The Board believes that a majority of its members are independent non-employee directors and meet the “Director Independence Standards” that the Company has adopted, which are set forth on Appendix A attached hereto. The Board has determined that each member of the Compensation Committee and the Nominating & Governance Committee is independent, as defined in the NYSE listing standards. The Board has determined that each member of the Audit Committee is independent, as defined in the NYSE’s listing standards and applicable SEC Rules and has further determined that Mr. Pully is an “audit committee financial expert” as such term is defined under Item 407(d)(5)(ii) of Regulation S-K promulgated under the Exchange Act. The Board has also determined that each director is financially literate as required under the NYSE listing standards.
16
ITEM 14. Principal Accounting Fees and Services.
Principal Accountant Fees and Services
EisnerAmper billed the Company for services for fiscal years 2023 and 2022, as set forth in the table below. The fees listed are aggregate fees for services performed for the year—regardless of when the fee was actually billed and paid.
| FY
2023 | FY
2022 | |||||||
| Audit Fees | $ | 615,000 | $ | 590,000 | ||||
Audit-Related Fees | $ | 45,000 | $ | 47,000 | ||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 660,000 | $ | 637,000 | ||||
Audit Fees—Consists of fees for professional services necessary to perform an audit or review in accordance with the Public Company Accounting Oversight Board, including services rendered for the audit of our annual financial statements (including services incurred with rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and quarterly reviews of the Company’s interim financial statement.
Audit-Related Fees—EisnerAmper performed certain audit services for an employee benefit plan for which the Company is the plan sponsor; for fiscal years 2023 and 2022 these fees were $45,000 and $43,000, respectively. EisnerAmper performed other Audit-Related services during the fiscal year ended July 31, 2022 and the fees for these services were $4,000.
Tax Fees—There were no tax fees for fiscal years 2023 and 2022.
All Other Fees—There were no other fees for fiscal years 2023 and 2022.
Pre-Approval Policies and Procedures—The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services.
Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. The Audit Committee has delegated to the Chair of the Audit Committee authority to approve permitted services, provided that the Chair reports any decisions to the Audit Committee at its next scheduled meeting.
17
Part IV
Exhibit 15. Exhibit, Financial Statement Schedules
(a) The following documents are filed as part of this report:
3. Exhibits:
The exhibits listed in the exhibit index of the original Form 10-K filing which was filed with the SEC on November 3, 2023, and the exhibits listed in the exhibit index of this Amendment are filed with, or incorporated by reference in, this report.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 31.1* | Certification of interim CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of interim CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith |
18
Appendix A
Independent Directors - The Board believes that a majority of its members should be independent, non-employee directors. The Board adopted the following “Director Independence Standards,” which are consistent with criteria established by the NYSE, to assist the Board in making these independence determinations:
No director can qualify as independent if he or she has a material relationship with the Company outside of his or her service as a director of the Company. A director is not independent if, within the preceding three years:
| ● | The director was an employee of the Company; | |
| ● | An immediate family member of the director was an executive officer of the Company; | |
| ● | A director was affiliated with or employed by a present or former internal or external auditor of the Company; | |
| ● | An immediate family member of a director was affiliated with or employed in a professional capacity by a present or former internal or external auditor of the Company; | |
| ● | A director, or an immediate family member of the director, received more than $120,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service); | |
| ● | The director, or an immediate family member of the director, was employed as an executive officer of another company where any of the Company’s executives served on that company’s compensation committee of the board of directors; | |
| ● | The director was an executive officer or employee, or an immediate family member of the director was an executive officer, of another company that made payments to, or received payments from, the Company for property or services in an amount which, in any single fiscal year, exceeded the greater of $1 million or two percent (2%) of such other company’s consolidated gross revenues; | |
| ● | The director, or an immediate family member of the director, was an executive officer of another company that was indebted to the Company, or to which the Company was indebted, where the total amount of either company’s indebtedness to the other was five percent (5%) or more of the total consolidated assets of the Company he or she served as an executive officer; or | |
| ● | The director, or an immediate family member of the director, was an officer, director or trustee of a charitable organization where the Company’s annual discretionary charitable contributions to the charitable organization exceeded the greater of $1 million or two percent (2%) of that organization’s consolidated gross revenues. |
The Board has reviewed all material transactions and relationships among each director, and any member of his or her immediate family, and the Company, its senior management and its independent auditors. Based on this review and in accordance with its independence standards outlined above, the Board has affirmatively determined that all of the non-employee directors are independent as such term is defined by the NYSE.
19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ENZO BIOCHEM, INC. | |
| Date: November 28, 2023 | /s/ Patricia Eckert |
Interim Chief Financial Officer (Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Kara Cannon | November 28, 2023 | |
| Kara Cannon | |||
| Interim Chief Executive Officer | |||
| (Principal Executive Officer) | |||
| By: | /s/ Patricia Eckert | November 28, 2023 | |
| Patricia Eckert | |||
| Interim Chief Financial Officer, | |||
| (Principal Accounting Officer) | |||
| By: | /s/ Steven J. Pully | November 28, 2023 | |
| Steven J. Pully | |||
| Chair of the Board | |||
| By: | /s/ Mary Tagliaferri, M.D. | November 28, 2023 | |
| Mary Tagliaferri, M.D., Director | |||
| Elazar Rabbani, Ph.D., Director | |||
| By: | /s/ Bradley L. Radoff | November 28, 2023 | |
| Bradley L. Radoff, Director | |||
| By: | /s/ Ian B. Walters, M.D. | November 28, 2023 | |
| Ian B. Walters, M.D., Director |
20
Exhibit 31.1
CERTIFICATION
In connection with the Annual Report on Form 10-K/A of Enzo Biochem, Inc. (“the Company”) for the fiscal year ended July 31, 2023 as filed with the Securities and Exchange Commission on the date hereof, I, Kara Cannon, interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002, that:
| 1. | I have reviewed this Annual Report on Form 10-K/A of Enzo Biochem, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: November 28, 2023 | ||
| By: | /s/ Kara Cannon | |
| Kara Cannon | ||
| Interim Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
In connection with the Annual Report on Form 10-K/A of Enzo Biochem, Inc. (“the Company”) for the fiscal year ended July 31, 2023 as filed with the Securities and Exchange Commission on the date hereof, I, Patricia Eckert, interim Chief Financial Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002, that:
| 1. | I have reviewed this Annual Report on Form 10-K/A of Enzo Biochem, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: November 28, 2023 | ||
| By: | /s/ Patricia Eckert | |
| Patricia Eckert | ||
| Interim Chief Financial Officer, Principal Accounting Officer |
Document And Entity Information - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2023 |
Nov. 21, 2023 |
Jan. 31, 2023 |
|
| Document Information Line Items | |||
| Entity Registrant Name | Enzo Biochem, Inc. | ||
| Trading Symbol | ENZ | ||
| Document Type | 10-K/A | ||
| Current Fiscal Year End Date | --07-31 | ||
| Entity Common Stock, Shares Outstanding | 50,489,771 | ||
| Entity Public Float | $ 56,384,000 | ||
| Amendment Flag | true | ||
| Amendment Description | Enzo Biochem, Inc. (the “Company”) is filing this Amendment No. 1 to Form 10-K on Form 10-K/A (this “Form 10-K/A”) for the fiscal year ended July 31, 2023, in order to amend and restate Part III, Items 10 through 14 of the report on Form 10-K (the “original Form 10-K”) that we originally filed with the Securities and Exchange Commission (the “SEC”) on November 3, 2023.This Form 10-K/A has been prepared and filed in reliance on General Instruction G to Form 10-K, which provides that registrants may provide the information required by Part III in a definitive proxy statement or an amendment to the Form 10-K filed with the SEC within 120 days after the end of the fiscal year covered by the report. The Company had initially planned to file the Part III information in a definitive proxy statement.The original Form 10-K is therefore amended to (i) delete the reference on the cover of the original Form 10-K to the incorporation by reference of a definitive proxy statement into Part III of such Form 10-K and (ii) revise Part III, Items 10 through 14 of the Company’s original Form 10-K to include information previously omitted from the original Form 10-K.Except as described above, no other changes have been made to the original Form 10-K. The original Form 10-K continues to speak as of November 3, 2023, the date the Company filed the original Form 10-K with the SEC, and other than as expressly indicated in the original Form 10-K or in this Form 10-K/A, the Company has not updated the disclosures contained therein to reflect any events that have occurred at a date subsequent to November 3, 2023. Accordingly, this Form 10-K/A should be read in conjunction with the original Form 10-K and the Company’s other reports filed thereafter. | ||
| Entity Central Index Key | 0000316253 | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Non-accelerated Filer | ||
| Entity Well-known Seasoned Issuer | No | ||
| Document Period End Date | Jul. 31, 2023 | ||
| Document Fiscal Year Focus | 2023 | ||
| Document Fiscal Period Focus | FY | ||
| Entity Small Business | true | ||
| Entity Emerging Growth Company | false | ||
| Entity Shell Company | false | ||
| ICFR Auditor Attestation Flag | false | ||
| Document Annual Report | true | ||
| Document Transition Report | false | ||
| Entity File Number | 001-09974 | ||
| Entity Incorporation, State or Country Code | NY | ||
| Entity Address, City or Town | New York | ||
| Entity Tax Identification Number | 13-2866202 | ||
| Entity Address, Address Line One | 81 Executive Blvd | ||
| Entity Address, Address Line Two | Suite 3 Farmingdale | ||
| Entity Address, State or Province | NY | ||
| Entity Address, Postal Zip Code | 11735 | ||
| City Area Code | (631) | ||
| Local Phone Number | 755-5500 | ||
| Title of 12(b) Security | Common Stock, $.01 par value | ||
| Security Exchange Name | NYSE | ||
| Entity Interactive Data Current | Yes | ||
| Document Financial Statement Error Correction [Flag] | false | ||
| Auditor Name | EISNERAMPER LLP | ||
| Auditor Location | Iselin, New Jersey | ||
| Auditor Firm ID | 274 |
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