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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): October 14, 2022 (October 11, 2022)
PALISADE
BIO, INC.
(Exact
name of Registrant as Specified in Its Charter)
| Delaware |
|
001-33672 |
|
52-2007292 |
|
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
7750
El Camino Real
Suite
5200
Carlsbad,
California |
|
92009
(Zip
Code)
|
| (Address
of Principal Executive Offices) |
|
|
Registrant’s
telephone number, including area code: (858) 704-4900
N/A
(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:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock, par value $0.01 per share |
|
PALI |
|
Nasdaq
Capital Market |
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 ☐
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. ☐
| Item 1.01 |
Entry into a Material Definitive Agreement |
The
information set forth in item 5.02 of this Current Report on Form 8-K is incorporated by reference herein in its entirety.
| Item
5.02. |
Departure
of Director or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Departure
of Principal Executive Officer
Effective
October 11, 2022 (the “Effective Date”), Thomas Hallam, Ph.D., the Chief Executive Officer and a member of the Board of Directors
(the “Board”) of Palisade Bio, Inc. and its wholly owned subsidiary, Leading Biosciences, Inc. (collectively the “Company”)
resigned as both Chief Executive Officer and as a member of the Board, of both entities, to pursue other opportunities. Dr. Hallam’s
resignation from the Board was not as a result of any matter relating to the Company’s operations, policies or practices. In
connection with Dr. Hallam’s resignation, Dr. Hallam and the Company entered into a separation agreement and release (“Hallam
Separation Agreement”). Pursuant to the Hallam Separation Agreement, and in lieu of any compensation owed under the terms of his
employment agreement, Dr. Hallam and the Company mutually released each other from any and all causes of action, rights or claims in
any way connected to his employment with the Company in exchange for (i) the payment of an aggregate of $530,000 payable in twelve (12)
equal monthly installments, (ii) a maximum of twelve (12) months of continued COBRA coverage, (iii) twelve (12) months of immediate vesting
of all outstanding options awards previously granted to him which are subject to time based vesting, and (iv) up to six (6) months of
virtual job-placement services at a value of $3,100. The Hallam Separation Agreement also contains customary provisions for an
employment-based release. The foregoing summary of the Hallam Separation Agreement is qualified in its entirety by the terms of the Hallam
Separation Agreement attached to this Current Report on Form 8-K as Exhibit 10.01.
Appointment
of Interim Principal Executive Officer
As
of the Effective Date, J.D. Finley, the Company’s current Chief Financial Officer, was appointed by the Board to serve as the Company’s
Chief Executive Officer (principal executive officer), on an interim basis. Mr. Finley will additionally continue to serve as the Company’s
Chief Financial Officer and principal accounting officer.
J.D.
Finley, age 65, has served as the Company’s Chief Financial Officer since April 2021. Previously, Mr. Finley served as Leading
Biosciences, Inc’s (the Company’s wholly owned subsidiary and predecessor company) Chief Financial Officer since January
2017 and as a member of board of directors of Leading Biosciences, Inc. (the “LBS Board”) since December 2014. Prior to joining
Leading Biosciences, Inc., Mr. Finley was Chief Executive Officer of PointAcross, Inc., a marketing company, from January 2016 to January
2017. Mr. Finley previously co-founded Proteus Capital Partners, Inc., a firm specializing in providing financing for a variety of businesses,
and was CFO at Phillips Capital, a broker/dealer firm specializing in private debt and equity capital raises. From March 2011 to June
2012 Mr. Finley was Executive Vice President, and from June 2012 to April 2014, Mr. Finley was President of Goldmail. Mr. Finley received
a B.A. in business administration from Boise State University and an M.S. in Taxation from the University of Denver.
There
is no arrangement or understanding between Mr. Finley and any other person pursuant to which Mr. Finley was selected as the Company’s
interim Chief Executive Officer. Except as described herein, there are no existing or currently proposed transactions to which the Company
or any of its subsidiaries is a party and in which Mr. Finley has a direct or indirect material interest. There are no family relationships
between Mr. Finley and any of the directors or officers of the Company.
On
October 11, 2022, the Company issued a press release announcing the appointment of Mr. Finley as interim Chief Executive Officer. A copy
of the press release is attached to this Current Report on Form 8-K as Exhibit 99.01.
| Item
9.01 | Financial
Statement and Exhibits. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
| Date:
October 14, 2022 |
Palisade
Bio, Inc. |
| |
|
|
|
/s/
J.D. Finley |
|
By: |
J.D.
Finley |
|
|
Interim
Chief Executive Officer and Chief Financial Officer |
Exhibit
10.01
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (“the Agreement”) is entered into between Thomas Hallam (“Executive”), Leading
Biosciences, Inc. (“LBS”) and Palisade Bio, Inc. (the “ Company”).
Whereas,
pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of
December 16, 2020, by and among the Company (formerly known as Seneca Biopharma, Inc.), LBS and Townsgate Acquisition Sub 1, Inc., a
wholly owned subsidiary of the Company (“Merger Sub”), the Company completed the previously announced merger transaction
with LBS (the “Merger”), pursuant to which LBS became a wholly owned subsidiary of the Company. Pursuant the Merger, Executive,
who was the CEO of LBS and a member of the board of directors of LBS retained those positions and also became the CEO and a member of
the board of directors of the Company.
Whereas,
effective October 11, 2022 (“Separation Date”), Executive has resigned from any and all positions within the Company, LBS
and Insperity PEO Services L.P. (“Insperity”), LBS’s professional employment organization, including without limitation
as a member of the boards of directors of the Company and LBS and as CEO of the Company and LBS; and
Whereas,
that certain Employment Agreement dated December 16, 2020 by and between Executive and LBS (the “Employment Agreement”) provides
that Executive may receive certain severance benefits upon termination of his employment for certain reasons (the “Severance Benefits”),
conditioned upon his execution of an acceptable Separation Agreement, and the parties providing such severance benefits to Executive,
in addition to the payment of compensation he has earned as of the Separation Date, based on the terms set forth in this Agreement, and
Executive, the Company and LBS agree that Executive’s resignation is such a circumstance entitling him to Severance Benefits; and
In
consideration for the good and valuable consideration described herein, the parties further agree as follows:
| 1. | Severance.
The Company will provide Executive with the following “Severance Benefits” |
| a. | The
Company shall send by overnight mail within 72 hours of the Separation Date Executive’s
final pay through the Separation Date. |
| b. | On
the first regular pay date which is after the Effective Date of this Agreement, the Company
shall pay any expense reimbursements for appropriate business expenses properly submitted
by Executive by the Effective Date in accordance with the Company’s reimbursement policy
for business expenses incurred through the Separation Date. Executive will not seek reimbursement
for purchase of a cell phone prior to the Separation Date. |
| c. | Commencing
on the first regular pay date which is after the Effective Date of this Agreement, the Company
will provide Executive with his salary for a period of twelve months after the Separation
Date, payable on the Company’s regular monthly payroll dates, as set from time to time,
subject to all legally required taxes and withholdings. |
| d. | Executive’s
group health insurance shall end on October 31, 2022, at midnight PST. The Company shall
directly pay Executive’s COBRA group health insurance premiums for Executive and Executive’s
eligible dependents, upon an election of COBRA benefits, from November 1, 2022 the until
the earliest of i) through and including October 11, 2023 (representing twelve months of
premium payment); ii) the expiration of Executive’s eligibility for COBRA benefits,
or iii) the date when Executive becomes eligible for substantially comparable health insurance
benefits in connection with new employment or self-employment. |
| e. | The
Company will provide Executive with up to six months of virtual job-placement services with
Lee Hecht Harrison, at a value of $3,100.00, which must be utilized within six months after
the Separation Date. If Executive does not use this service, no additional benefits will
be owed or provided to Executive. |
| f. | Executive
acknowledges and agrees that the Severance benefits provided for hereunder are payable by
the Company and that Insperity has no obligation to provide the Severance benefits, even
though the benefits may be processed by Insperity. |
| g. | All
of Executive’s equity incentive awards (which are stock option awards) granted prior
to the Separation Date pursuant to any equity incentive plan of LBS or the Company, which
are subject to time-based vesting, will be accelerated and deemed vested as if Executive
had remained employed for the 12 months after the Separation Date. Each stock option award
may be exercised by Executive after the Separation Date (which shall be the “Termination
Date” for purposes of each equity incentive award) for the period of time as set forth
in the applicable equity incentive award agreement documenting a stock option award, assuming
a termination without cause. It is agreed that the Company, and not Insperity, will be responsible
for any equity-related transactions should Executive choose to exercise the options or have
other such transactions in the future, including payroll processing and W-2 reporting under
the company’s FEIN. |
| h. | The
Company will not oppose nor appeal any award of unemployment benefits to Executive but will
be obligated to respond truthfully to any request for information from the State of California
Employment Development Department in connection with any application for unemployment benefits. |
| 2. | Mutual
Release. Each party hereby releases the other party, including their respective current
and former parent companies, subsidiaries, and affiliated companies, as well as any of their
respective current and former insurers, directors, officers, agents, shareholders, and employees,
and in the case of LBS and the Company, Insperity (“Released Parties”) from any
claims that it/he may have against any of them as of the date of this Agreement, whether
such claims arise from common law, statute, regulation, or contract. This release includes
but is not limited to rights and claims arising under Title VII of the Civil Rights Act,
the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans
with Disabilities Act, the Genetic Information Nondiscrimination Act, the Family Medical
Leave Act, the California Family Rights Act, the California Fair Employment and Housing Act,
the California Pregnancy Discrimination Act, and any state or federal leave law or workers
compensation retaliation law. By accepting the Severance benefits and additional compensation
provided hereunder, Executive has agreed to release the Released Parties from any liability
arising out of his employment with and separation from the Company, LBS and Insperity. By
accepting Executive’s resignation from the boards of directors of each of the Company
and LBS, the Company, LBS and Insperity has agreed to release the Released Parties from any
liability arising out of Executive’s employment with and separation from the Company,
LBS and Insperity. This includes, but is not limited to, claims alleging breach of contract,
defamation, dishonesty, emotional distress, harassment, discrimination, or retaliation based
on age, gender, race, religion, national origin, disability, or any other status protected
under state, local or federal law. Notwithstanding anything in this release, Executive shall
not be released from any conduct which constitutes a breach of his fiduciary obligations
such as fraud, dishonesty, immoral conduct, or criminal or civil liability toward LBS or
the Company. |
It
is understood and agreed that Executive is waiving any rights under Section 1542 of the California Civil Code, which provides:
“A
general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor
at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the
debtor or released party.”
Rights
Reserved. This release does not apply to claims for workers compensation benefits, to making or participating in any administrative
charge or in any investigation before any governmental agency charged with enforcement of any federal, state or local law, including
but not limited to the Equal Employment Opportunity Commission, any similar state or local agency, the National Labor Relations Board,
or the Securities and Exchange Commission (“SEC”). This release does not prevent Executive from engaging in any concerted
activity for the purposes of collective bargaining or other mutual aid and protection. Executive does agree, however, that by signing
this release, you waive any right to recover monetary damages or other individual relief in connection with any charge or investigation
in which you may participate. Notwithstanding the foregoing, nothing herein prohibits you from seeking or obtaining a whistleblower award
from the SEC (and not the Released Parties) pursuant to Section 21F of the Securities Exchange Act of 1934, as amended.
| 3. | Existing
Agreements. Nothing in this Agreement shall be construed to alter any prior agreements
Executive entered into with the Company or Insperity, including but not limited to the terms
of Executive’s Employment Agreement, the Confidentiality, Invention Assignment, and
Non-Compete Agreement you executed, or any agreement concerning arbitration, intellectual
property, confidentiality, non-solicitation, or non-competition with LBS and/or the Company. |
| 4. | No
Admission of Liability. It is understood and agreed that entering into this Agreement
does not constitute an admission of liability or fault by any party or person or of any unlawful
conduct of any kind. |
| | | |
| 5. | Non-Disparagement.
Executive and the Company agree not to disparage each other or to do anything that portrays
Executive or the Company, or the Company’s business, products, or personnel in a negative
light or that might injure the Executive or the Company’s business or affairs. This
includes, but is not limited to, disparaging remarks, postings on social media, or conduct
imputing negative, immoral or unlawful conduct to the Executive or the Company, or the Company’s
shareholders, officers, directors, employees, agents, advisors, partners, affiliates, consultants,
products, formulae, business processes, corporate structure, organization, or marketing methods.
Executive further acknowledges that he has not, and will not, do anything which will subject
the Company to exposure for fraud, dishonesty, immoral conduct, or criminal or civil liability.
Nothing in this section affects the rights reserved under Section 2 or prevents Executive
from discussing or disclosing any information about unlawful acts in the workplace which
Executive has reason to believe are unlawful. |
In
the event the Company is contacted for a reference about Executive by a potential employer, the Company will refer all requests to Insperity’s
Contact Center (1-866-715-3552), which will provide only dates of employment and last position held.
In
the event Executive or any officers, employees or directors of the Company or LBS is contacted with questions about Executive’s
departure, each will state only that Executive has resigned to pursue other opportunities.
| 6. | Return
of Property. Executive covenants that he is obligated to, and will, return to the Company
all property belonging to the Company, LBS or to Insperity by the Effective Date, including
but not limited to documents, files, forms, customer information and lists, business information,
keys, his Company laptop computer, hand held devices, pagers, and Company-issued credit card. |
| | | |
| 7. | Severability.
It is understood and agreed that if any portion of this Agreement is found to be unenforceable,
in whole or in part, the portion of the Agreement which is unenforceable will be severed
and the remainder of the Agreement shall remain in force and effect. |
| | | |
| 8. | Waiting
Time; Right to Revoke. Executive has 45 days in which to consider this Agreement and
if it is not accepted within 45 days, it will expire. Executive has the right to consult
with an attorney before executing this Agreement. Upon signing this Agreement, Executive
should return the signed Agreement to Samantha Pellerin, Insperity Sr. HR Specialist at Samantha.Pellerin@insperity.com.
After signing this Agreement, Executive will have a right to revoke this Agreement for a
period of seven days after execution. The Agreement may be revoked by providing written notice
of revocation to Samantha Pellerin, Insperity Sr. HR Specialist at Samantha.Pellerin@insperity.com.
This Agreement will be effective on the eighth day after it is signed, if it has not been
revoked (“Effective Date”). |
| | | |
| 9. | Modification.
This Agreement may only be modified by a writing signed by Executive and by the Company and
LBS. |
| | | |
| 10. | Voluntary
Execution. This Agreement fully and accurately describes the agreement of the parties
and is signed knowingly and voluntarily. Any waiver of rights and offer of benefits is understood
and agreed to and is entered into after full consideration and consultation with each party’s
respective advisors, and of their own free will. |
[Signature
Page Follows]
Signature
Page to Separation and Release
| Date: |
|
|
|
| |
|
|
Thomas Hallam, Executive |
| |
|
|
|
|
| |
|
|
LEADING BIOSCIENCES, INC. |
| |
|
|
|
|
| Date:
|
|
|
|
| |
|
|
Name: |
J.D.
Finley |
| |
|
|
Its: |
Interim
CEO |
| |
|
|
|
|
| |
|
|
PALISADE BIO, INC. |
| |
|
|
|
|
| Date: |
|
|
|
| |
|
|
Name: |
J.D.
Finley |
| |
|
|
Its: |
Interim
CEO |
Exhibit
99.01
Palisade
Bio Announces Executive Leadership Transition
Board
Appoints JD Finley to Interim Chief Executive Officer
Carlsbad,
CA – October 11, 2022 — Palisade Bio, Inc. (Nasdaq: PALI), a clinical stage biopharmaceutical company advancing
therapies for acute and chronic gastrointestinal (GI) complications, today announced an executive leadership transition. Effective
October 10, 2022, Thomas Hallam, Ph.D., ceased his duties as chief executive officer (CEO). The company’s board of directors has
appointed JD Finley, current chief financial officer (CFO), as interim CEO, and Mr. Finley has assumed the duties of Dr. Hallam effective
October 10, 2022.
“On
behalf of my fellow directors, I would like to thank Tom for his dedication to Palisade Bio over the last nine years,” said James
R. Neal, chairman of the board of Palisade Bio. “Tom was instrumental in the development LB1148. We thank him for his contributions
to the company and wish him the best in his future endeavors.”
Mr.
Neal continued, “During this time of transition, the board of directors believes that JD Finley is uniquely qualified to lead Palisade
Bio and its continued advancement of LB1148. JD has served as Palisade’s CFO since 2017, during which time he led multiple financings
and played a key role in the execution of the company’s 2021 merger with Seneca Biopharma, Inc., which resulted in Palisade Bio’s
public listing on Nasdaq. We are pleased to name JD as interim CEO and we look forward to his continued contributions to the company.”
“I
have long been committed to the success of Palisade Bio and the clinical advancement of LB1148, and I am honored to assume this leadership
role for the company,” said JD Finley, interim CEO of Palisade Bio. “I am a strong believer in the promise of LB1148 for
the potential treatment of acute and chronic gastrointestinal
complications, and I, along with our dedicated team, will continue the important work of advancing our programs for the benefit of our
shareholders and patients worldwide.”
Mr.
Finley is an experienced financial executive, having played instrumental roles in raising nearly $1 billion in capital for companies
as both an internal CFO and an independent investment banker. Prior to joining Palisade Bio, Mr. Finley was the chief executive officer,
president and CFO for PointAcross, Inc., a software company providing business messaging and communications services. Mr. Finley previously
co-founded Proteus Capital Partners, Inc., a firm specializing in providing financing for a variety of businesses, and was CFO at Phillips
Capital, a broker/dealer firm specializing in private debt and equity capital raises. During his career, he also served as executive
vice president and CFO of MetroGolf, Inc., where he successfully completed MetroGolf’s initial public offering and was instrumental
in growing the start-up company to over 125 employees.
In
order to ensure a smooth and timely transition, the company will focus its near-term resources on the internal reorganization. Accordingly,
the company will no longer presenting at, the American College of Surgeons (ACS) Clinical Congress 2022, being held October 16 –
20, 2022.
About
Palisade Bio
Palisade
Bio is a late-stage biopharmaceutical company focused on developing therapeutics that protect the integrity of the intestinal barrier.
The company utilizes over three decades of research and established science that links the role of intestinal barrier biology and human
disease to develop novel therapeutics that target and improve the integrity of the intestinal barrier.
The
company’s lead program, LB1148, is a broad-spectrum serine protease inhibitor which acts to neutralize digestive enzymes, potentially
reducing intestinal damage. In multiple clinical studies, LB1148 has demonstrated positive results in accelerating the time to return
of postoperative bowel function, and the company recently presented analysis that LB1148 reduced the incidence and severity of post-surgical
abdominal adhesions. LB1148 is currently being evaluated in a pivotal Phase 3 clinical study for accelerating the return of postoperative
bowel function and in a Phase 2 study for the prevention of post-surgical abdominal adhesions.
The
company believes that addressing the disruption of the intestinal barrier has the potential to fundamentally change the way diseases
are treated and to establish new standards of patient care. For more information, please go to www.palisadebio.com.
Forward
Looking Statements
This
communication contains “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements regarding Palisade’s intentions, beliefs, projections,
outlook, analyses or current expectations concerning, among other things: the potential to fundamentally change the way diseases are
treated, the completion of enrollment for the Phase 3 study, the potential for the statistically significant Phase 3 data to allow for
NDA approval, and the potential for LB1148 to establish the standard of care, if approved. Any statements contained in this communication
that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based
upon Palisade’s current expectations. Forward-looking statements involve risks and uncertainties. Palisade’s actual results
and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks
and uncertainties, which include, without limitation, the company’s ability to advance its clinical programs, the uncertain and
time-consuming regulatory approval process; the company’s ability to achieve additional financing to fund clinical development
and the company’s ability to comply with the continued listing requirements for Nasdaq. Additional risks and uncertainties can
be found in Palisade Bio’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. Palisade expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect
any change in Palisade’s expectations with regard thereto or any change in events, conditions or circumstances on which any such
statements are based.
Investor
Relations Contact
JTC
Team, LLC
Jenene
Thomas
833-475-8247
PALI@jtcir.com
Source:
Palisade Bio