UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 4, 2018
BIOSTAGE,
INC.
(Exact name of registrant as specified in
its charter)
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Delaware
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001-35853
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45-5210462
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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84 October Hill Road, Suite 11, Holliston, MA
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01746
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including
area code:
(774) 233-7300
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
x
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.
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Item 1.01. Entry into a Material Definitive Agreement.
On July 2, 2018, William Fodor, PhD, the Chief Scientific Officer
of Biostage, Inc. (the “Company”) became an employee of the Company. The employment commenced in accordance with an
offer letter executed as of June 4, 2018 (the “Agreement”). Prior to being employed by the Company, Dr. Fodor was serving
as the Chief Scientific Officer via a consulting arrangement with the Company. The material terms of the Agreement are summarized
below. Such Agreement is attached as Exhibit 10.1 to this Form 8-K. The description of the Agreement below does not purport to
be complete and is qualified in its entirety by reference to the Agreement which are incorporated herein by reference. Dr. Fodor
is an at-will employee and the Agreement provides for an annual base salary in the amount of three hundred five thousand dollars
($305,000). Dr. Fodor will be eligible to participate in all of the Company’s employee benefit plans, including without limitation,
its 2013 Equity Incentive Plan, retirement plans, stock purchase plans and medical insurance plans. In connection with the execution
of the Agreement, while then a consultant of the Company, on May 29, 2018, Dr. Fodor received options to buy 209,286 shares of
common stock of the Company. Half of the award, or 104,643 shares, vests in four equal installments on December 31, 2018, 2019,
2020 and 2021 and the remaining half vests based on the achievement of performance milestones determined by the Board of Directors
of the Company.
Item 4.01. Change in Registrant’s Certifying Accountant.
As previously reported in a Current Report on Form 8-K filed
on April 6, 2018, which is incorporated herein by reference, on April 4, 2018, KPMG LLP (“KPMG”) notified Biostage,
Inc. that it declined to stand for re-election as the independent registered public accounting firm for the Company. On July 10,
2018, the Company’s Audit Committee engaged RSM US LLP (“RSM”) to serve as the Company’s independent registered
public accounting firm contingent upon completion of RSM’s client acceptance procedures.
During the Company’s two most recent fiscal years, which
ended December 31, 2017 and December 31, 2016, and the subsequent interim period through July 10, 2018, neither the Company nor
any person on its behalf consulted with RSM with respect to either (i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial
statements, and neither a written report was provided to the Company nor oral advice was provided that RSM concluded was an important
factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii)
any matter that was either the subject of a “disagreement” or a “reportable event” as such terms are described
in Items 304(a)(1)(iv) or 304(a)(1)(v), respectively, of Regulation S-K promulgated under the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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BIOSTAGE, INC.
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(Registrant)
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July 10, 2018
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/s/ Thomas McNaughton
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(Date)
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Thomas McNaughton
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit 10.1
May 25, 2018
William Fodor, PhD
236 Wildcat Road
Madison, CT 06443
Dear Bill,
I am pleased to make you an offer of employment for the position
of Chief Scientific Officer at Biostage, Inc. (OTCQB: BSTG). This position will report directly to Jim McGorry, CEO. Your start
date will be on or before Monday, July 2, 2018. Your bi-weekly salary will be $11,730.77 paid as earned and which is the yearly
equivalent of $305,000.00. Please note that all Biostage employees are required to have their bi-weekly pays direct-deposited.
I am also pleased to inform you that you will be a participant
in Biostage’s Equity Incentive Plan, and that you will receive a grant of 209,286 options for common stock on the grant date.
This represents a grant equivalent to 2.75% of the Company’s fully-diluted common shares outstanding of approximately 7.6
million shares. As we discussed, the grant date is still to be determined by the board of directors, but it is currently expected
to be on or about May 29, 2018. The options’ exercise price will be the closing price of Biostage’s common stock on
the grant date. I anticipate that your option grant will vest 50% in time-based vesting over four years and 50% based on performance
measures tied to company milestones.
Biostage offers a very competitive and comprehensive benefits
package including major medical (Tufts Health Plan HMO or PPO) and eye care, BCBS dental, life and disability insurance and a retirement
(401K) plan with company match. I have attached a one page benefits summary for your review. Peter Chakoutis will provide you with
a comprehensive benefits packet in the next day. You will also earn four weeks of vacation and six personal days.
As is standard with positions such as this, you must sign an
agreement to protect and hold confidential all proprietary and confidential information regarding Biostage, any of its affiliates,
its customers and employees both during and after the period of your employment. You must also acknowledge that any inventions,
discoveries, processes and/or improvements developed by you in the course of your employment or in any way resulting from your
employment with us remain the property of the Company exclusively.
Upon acceptance of this offer, we will formalize our arrangement
with a written employment agreement. That employment agreement will provide for a defined severance period upon termination in
the event your employment is terminated by the Company without “cause” or by you for “good reason”. “Cause”
and “good reason” are terms that will be defined in the employment agreement, and will be in keeping with the definitions
used in the Company’s other written employment agreements.
Please note this offer is contingent on a review of the results
of a background check and a drug screen.
Bill, we are excited by the prospect of you joining us as a
member of the Company’s senior management team.
Please acknowledge your acceptance of this offer of employment
by signing and returning a copy of this letter to me. At that point, Human Resources will provide you with the necessary paperwork
for completing your background check and drug screen.
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/s/ Tom McNaughton
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/s/ William Fodor
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Tom McNaughton, CFO
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William Fodor, PhD
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Date June 4, 2018
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Biostage, Inc.
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