UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
________________________
SCHEDULE
14F-1
________________________
Information
Statement Pursuant to Section 14(f) of the
Securities
Exchange Act of 1934 and Rule 14f-1 Thereunder
|
HEPALIFE
TECHNOLOGIES, INC.
|
|
(Exact
name of registrant as specified in its corporate
charter)
|
|
|
|
000-29819
|
|
(Commission
File No.)
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|
Florida
|
|
58-2349413
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(State
of Incorporation)
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|
(IRS
Employer Identification No.)
|
|
850
Third Avenue
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|
Suite
1801
|
|
New
York, New York 10022
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|
(Address
of principal executive offices)
|
|
|
|
(646)
218-1400
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|
(Registrants
telephone number)
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NOTICE
OF CHANGE IN THE MAJORITY OF THE BOARD OF DIRECTORS
HEPALIFE
TECHNOLOGIES, INC.
850
Third Avenue, Suite 1801
New
York, New York 10022
INFORMATION
STATEMENT
PURSUANT
TO
SECTION
14(F) OF THE SECURITIES EXCHANGE
ACT OF
1934 AND RULE 14F-1 THEREUNDER
INTRODUCTION
This
Information Statement is being mailed by HepaLife Technologies, Inc., a Florida
corporation (“HepaLife”), on or about May 25, 2010 to the holders of record
at the close of business on May 17, 2010 (the “Record Date”) of HepaLife’s
common stock, par value $0.001 per share (the “HepaLife Common Stock”), in
connection with the change of control and composition of the Board of Directors
of HepaLife (the “Board of Directors”) as contemplated by an agreement and plan
of merger, dated May 11, 2010 (the “Merger Agreement”), by and among
HepaLife, HT Acquisition Corp., a newly formed, wholly-owned Delaware subsidiary
of HepaLife (the “Merger Sub”), and AquaMed Technologies, Inc., a privately held
Delaware corporation (“AquaMed”). The transactions contemplated by
the Merger Agreement were consummated on May 11, 2010 (the “Closing
Date”).
This
Information Statement is being furnished pursuant to Section 14(f) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14f-1
promulgated thereunder. This Information Statement is being provided solely for
informational purposes and not in connection with a vote of HepaLife’s
shareholders.
A copy of
the Merger Agreement has been filed with the Securities and Exchange
Commission (the “SEC”) as Exhibit 2.1 to a Current Report on Form 8-K that was
filed by HepaLife with the SEC on May 17, 2010.
On the
Record Date, 199,694,158 shares of HepaLife Common Stock were issued and
outstanding with the holders thereof being entitled to cast one vote per
share.
HEPALIFE
IS NOT SOLICITING YOUR PROXY. NO VOTE OR OTHER ACTION
BY HEPALIFE’S
SHAREHOLDERS
IS REQUIRED IN RESPONSE TO THIS INFORMATION STATEMENT.
MERGER
AGREEMENT
As
contemplated by the Merger Agreement, on the Closing Date, the Merger Sub
merged with and into AquaMed, with AquaMed continuing as the surviving
corporation and becoming a wholly-owned subsidiary of HepaLife (the
“Merger”). The filing and acceptance of the certificate of merger
with the Secretary of State of the State of Delaware is referred to herein as
the “Effective Time” of the Merger.
Pursuant
to the terms and conditions of the Merger Agreement, at the Effective Time, each
issued and outstanding share of AquaMed common stock, par value $0.001 per share
(the “AquaMed Common Stock”), was cancelled and converted into the right to
receive 25 shares of HepaLife Common Stock (the “Common Merger Consideration”);
each issued and outstanding share of AquaMed Series A Preferred Stock, par value
$0.001 per share (the “AquaMed Series A Preferred Stock”), was cancelled and
converted into the right to receive 100 shares of HepaLife Common Stock (the
“Series A Merger Consideration”); and each issued and outstanding share of
AquaMed Series B Preferred Stock, par value $0.001 per share (the “AquaMed
Series B Preferred Stock”), was cancelled and converted into the right to
receive 399.99994 shares of HepaLife Common Stock (the “Series B Merger
Consideration,” and together with the Common Merger Consideration
and the Series A Merger Consideration, collectively, the “Merger
Consideration”). In the aggregate, the Merger Consideration consisted
of 84,800,000 shares of HepaLife Common Stock.
CHANGE OF CONTROL AND CHANGE OF BOARD
OF DIRECTORS
Prior to
the Effective Time, the Board of Directors appointed Richard Rosenblum and David
Stefansky to the Board of Directors effective upon the consummation of the
Merger and following the resignations of Jatinder S. Bhogal and Javier Jimenez.
Subsequent to this appointment, the Board of Directors and Mr. Rosenblum
determined that Mr. Rosenblum would not accept this appointment to the Board of
Directors until HepaLife satisfied the notice requirements to HepaLife’s
shareholders pursuant to Rule 14f-1 under the Exchange Act. Until such time, Mr.
Rosenblum shall be invited to participate at all meetings of the Board of
Directors as an observer.
On May 7,
2010, holders of a majority of the voting shares of HepaLife acted by written
consent in lieu of a special meeting of shareholders to adopt an amendment to
HepaLife’s Articles of Incorporation (the “Articles of Amendment”), to among
other things, provide for the classification of the Board of Directors and to
provide for staggered terms of service for each class of directors. Upon the
effectiveness of the Articles of Amendment, the Board of Directors designated
Joseph Sierchio as a Class I director, to serve in such capacity until the 2010
annual meeting of shareholders, Richard Rosenblum as a Class II director, to
serve in such capacity until the 2011 annual meeting of shareholders, and David
Stefansky as a Class III director, to serve in such capacity until the 2012
annual meeting of shareholders. Directors elected to succeed those listed above
will hold office for three-year terms until the election and qualification of
their successors. The Articles of Amendment will become effective upon filing
with the Secretary of State of the State of Florida. The filing of
the Articles of Amendment is not expected to occur until at least 20 days
following the mailing of HepaLife’s Information Statement on Schedule 14C (the
“14C Information Statement”) to its shareholders of record as of May 7, 2010,
which was mailed to shareholders on May 20, 2010.
VOTING
SECURITIES
As of the
date hereof, HepaLife has 300,000,000 authorized shares of HepaLife Common
Stock, and 1,000,000 shares of preferred stock, par value $0.10 per share, of
which 199,694,158 shares of HepaLife Common Stock are issued and outstanding and
no shares of preferred stock are issued and outstanding. Each share of HepaLife
Common Stock entitles the holder thereof to one vote on each matter that may
come before a meeting of the shareholders.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of the date hereof, the beneficial ownership of
HepaLife Common Stock by each director and executive officer of HepaLife and
each person known by HepaLife to beneficially own more than 5% of HepaLife
Common Stock outstanding as of such date and the executive officers and
directors of HepaLife as a group.
The
percentages of HepaLife Common Stock beneficially owned are reported on the
basis of regulations of the SEC governing the determination of beneficial
ownership of securities. Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power, which
includes the power to vote or to direct the voting of the security, or
investment power, which includes the power to dispose of or to direct the
disposition of the security. Except as indicated in the footnotes to this table,
each beneficial owner named in the table below has sole voting and sole
investment power with respect to all shares of HepaLife Common Stock
beneficially owned.
|
Person or
Group
|
Number
of Shares of
HepaLife Common Stock
|
Percent
|
|
David
Stefansky(1)
|
35,794,498
|
17.9%
|
|
850
Third Avenue, Suite 1801
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
Richard
Rosenblum(1)
|
35,794,498
|
17.9%
|
|
850
Third Avenue, Suite 1801
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
Steven
Berger
|
0
|
0
|
|
850
Third Avenue, Suite 1801
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
Joseph
Sierchio(2)
|
110,000
|
<1%
|
|
850
Third Avenue, Suite 1801
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
1420525
Alberta Ltd.(3)
|
34,261,174
|
17.2%
|
|
216-1628
West First Avenue
|
|
|
|
Vancouver,
B.C.
|
|
|
|
V6J
1G1 Canada
|
|
|
|
|
|
|
|
Harborview
Master Fund, L.P.
|
27,981,999
|
14.0%
|
|
850
Third Avenue, Suite 1801
|
|
|
|
New
York, NY 10022
|
|
|
|
|
|
|
|
Directors
and Executive Officers
|
35,904,498
|
18.0%
|
|
as
a group (4 persons)
|
|
|
|
|
(1)
|
Represents
shares of HepaLife Common Stock owned directly by Harborview Master Fund,
L.P. and Harborview Value Master Fund, L.P. Harborview Advisors, LLC is
the general partner of Harborview Master Fund, L.P. and Harborview Value
Master Fund, L.P. and has sole voting and dispositive power over the
securities. Richard Rosenblum and David Stefansky are the managing members
of Harborview Advisors, LLC and disclaim beneficial ownership of the
reported securities, except to the extent of any pecuniary interest in the
securities.
|
|
|
(2)
|
This
amount includes 10,000 shares of HepaLife Common Stock issuable upon
exercise of vested options.
|
|
|
(3)
|
This
amount includes 31,057,980 shares of HepaLife Common Stock held by 1420525
Alberta Ltd., a private Alberta company wholly-owned by Mr. Harmel Rayat,
and 3,203,194 shares of HepaLife Common Stock held by Tajinder Chohan, Mr.
Rayat’s wife. In his capacity as the sole stockholder of 1420525 Alberta
Ltd. and its President, Mr. Rayat may be deemed to have beneficial
ownership of the shares of HepaLife Common Stock owned by 1420525 Alberta
Ltd.
|
DIRECTORS
AND EXECUTIVE OFFICERS
The
following persons became HepaLife’s executive officers and directors on May 11,
2010, upon consummation of the Merger, and hold the positions set forth opposite
their respective names.
|
Name
|
Age
|
Position
|
|
David
Stefansky
|
39
|
Chairman
and Director
|
|
Richard
Rosenblum
|
51
|
President
|
|
Steven
Berger
|
49
|
Chief
Financial Officer, Treasurer and Secretary
|
|
Joseph
Sierchio
|
60
|
Director
|
Biographies
David
Stefansky David Stefansky has been a principal of Harborview
Advisors, LLC, the investment manager for Harborview Master Fund, L.P. and
Harborview Value Master Fund, L.P., since 2004. Mr. Stefansky previously was a
managing director of investment banking for vFinance, Inc., a middle market
investment banking and brokerage organization. From September 2006 to
March 2009, Mr. Stefansky was a director of Boxwoods, Inc. From September 2006
to May 2007, Mr. Stefansky was a director of Mill Basin Technologies, Ltd. From
November 2006 to January 2008, Mr. Stefansky was a director of Marine Park
Holdings, Inc. From August 2009 to September 2009, Mr. Stefansky was a director
of HG Partners, Inc.
Richard
Rosenblum Richard Rosenblum has been a principal of Harborview
Advisors, LLC, the investment manager for Harborview Master Fund, L.P. and
Harborview Value Master Fund, L.P., since 2004. Mr. Rosenblum was previously a
managing director of investment banking for vFinance, Inc., a middle market
investment banking and brokerage organization. Mr. Rosenblum graduated from the
State University of New York at Buffalo in 1981, summa cum laude, with a degree
in finance and accounting. From September 2006 to April 2010, Mr. Rosenblum was
a director of Boxwoods, Inc., which changed its name to Duke Mining Company,
Inc. in March 2009. From September 2006 to May 2007, Mr. Rosenblum was a
director of Mill Basin Technologies, Ltd. From November 2006 to January 2008,
Mr. Rosenblum was a director of Marine Park Holdings, Inc. From August 2009 to
September 2009, Mr. Rosenblum was a director of HG Partners, Inc.
Steven C.
Berger Steven Berger has been the Chief Financial Officer and
Chief Operating Officer of Harborview Advisors, LLC, the investment manager for
Harborview Master Fund, L.P. and Harborview Value Master Fund, L.P., since 2007.
His past executive finance positions include serving as Chief Financial Officer
of Global/CHC Worldwide LLC, a chemical coatings company. Other executive
experience includes his tenure as President of Morgan Harris & Co. where he
was involved in equity trading. From 2000 to 2003, Mr. Berger was Chief
Financial Officer of Virtual BackOffice Inc., a company engaged in the provision
of virtual secretarial services. From 1983 to 1999, Mr. Berger was the
Treasurer, Controller and Chief Compliance Officer with LaBranche & Co., the
parent corporation of LaBranche & Co. LLC, one of the oldest and largest
specialists in equity securities listed on the New York Stock Exchange and the
American Stock Exchange. Mr. Berger holds a Bachelor of Science degree in
business administration with a concentration in finance from Boston
University.
Joseph
Sierchio Joseph Sierchio has practiced corporate and
securities law in New York City since 1975, representing and offering counsel to
domestic and foreign corporations, investors, entrepreneurs, and public and
private companies in the United States, Canada, United Kingdom, Germany, Italy,
Switzerland, Australia, and Hong Kong. Mr. Sierchio is admitted in all New York
state courts and federal courts in the Eastern, Northern, and Southern Districts
of the State of New York as well as the federal Court of Appeals for the Second
Circuit. Mr. Sierchio earned his Doctor of Law degree at Cornell University Law
School in 1974, and a Bachelor of Arts degree, with Highest Distinction in
Economics, from Rutgers College at Rutgers University, in 1971. Mr. Sierchio is
also a member of Sierchio & Company, LLP. Mr. Sierchio currently
serves on the Board of Directors for New Energy Technologies, Inc. He
has held this position since September 2008.
The Board
of Directors regard all of the individuals who were appointed to the Board of
Directors in connection with the Merger as competent professionals with many
years of experience in the business community. The Board of Directors
believe that the overall experience and knowledge of the members of Board of
Directors will contribute to the overall success of HepaLife’s
business.
TRANSACTIONS
WITH RELATED PERSONS
Related
Transactions
Employment Agreement: On
September 30, 2009, HepaLife and Mr. Frank Menzler, who at the time was its
Chief Executive Officer and President, entered into a restated employment
agreement providing for the payment to Mr. Menzler of a signing bonus of
$35,000, which was recorded as salary expense, a severance payment of up to
six-months salary and benefits, cancelation of all stock option grants, and the
resignation of Mr. Menzler as a director and Chairman of the Board of
Directors.
On
October 13, 2009, Mr. Menzler resigned from his position as Chief Executive
Officer and President. Pursuant to the terms of the restated
employment agreement, Mr. Menzler was appointed Special Technical Advisor and
continued as an employee. On March 16, 2010, HepaLife gave written
notice to Mr. Menzler of its election to terminate the September 30, 2009
restated employment agreement effective March 31, 2010.
On
October 13, 2009, HepaLife entered into an Interim Executive Services Agreement
with Mr. Amit Dang in which Mr. Dang was appointed as its Interim Chief
Executive Officer, President and Secretary. Mr. Dang received a fee of $7,000
per month during the term of this agreement. This agreement was
terminated upon Mr. Dang’s resignation from HepaLife on the Closing Date after
the Effective Time.
Mr. Dang
was also granted an option to purchase, subject to vesting restrictions, up to
100,000 shares of HepaLife Common Stock, at a price of $0.32 per share (the
closing price of HepaLife Common Stock as reported on the Over the Counter
Bulletin Board on October 13, 2009). The options vested upon the discretion of
the Board of Directors prior to the Merger on May 7, 2010. On May 4,
2010, the Board of Directors adopted a resolution to amend the stock option
agreement for Mr. Dang to change the period for exercising the option after
termination from 90 days to 12 months.
Executive Management: For the
year ended December 31, 2009 and for the portion of 2010 up to his resignation,
HepaLife incurred $21,000 and $56,000 in fees paid to Mr. Dang, its Interim
Chief Executive Officer, President and Secretary. In addition, HepaLife recorded
$2,708 and $20,291.67 as stock compensation expense for the award to Mr. Dang
for the year ended December 31, 2009 and for the portion of 2010 up to his
resignation, respectively.
Director Fees: For the year
ended December 31, 2009 and for the portion of 2010 up to the filing of this
Information Statement, HepaLife incurred $41,667 and $58,000, respectively, in
fees for its non-employee members of the Board of Directors. In
addition, during June and September 2008, HepaLife granted stock options to
purchase 50,000 shares of HepaLife Common Stock each for a total of 200,000
shares of HepaLife Common Stock to non-employee members of the Board of
Directors. For the year ended December 31, 2009 and for the portion of 2010 up
to the filing of this Information Statement, HepaLife recorded $19,285 and
$3,654, respectively, as stock compensation expense relating to these stock
grants.
On
October 7, 2009, the Board of Directors approved a change of control Severance
Plan (the “Severance Plan”) that affects the Board of
Directors. Pursuant to the Severance Plan, if a director resigns or
is removed following a change in control, the director will be entitled to
receive a cash severance payment equal to $1,200 per month served as a director,
up to a maximum amount of $24,000. Prior to the Effective Time, Mr. Jimenez and
Mr. Bhogal each received $24,000 pursuant to the Severance Plan. Prior to the
Effective Time, Mr. Sierchio waived any and all compensation that may be owed to
him in connection with a change of control.
Legal Fees: Legal fees
expensed for the year ended December 31, 2009 and for the portion of 2010 up to
the filing of this Information Statement that were paid or are due to Mr.
Sierchio, who also serves as a member of the Board of Directors totaled $204,193
and $104,777.50, respectively.
CORPORATE
GOVERNANCE AND BOARD OF DIRECTORS MATTERS
HepaLife
does not currently have any standing committees of the Board of Directors and,
accordingly, there are no formal committee charters. The full Board
of Directors is responsible for performing the functions of the: (i)
Audit Committee, (ii) Compensation Committee and (iii) Nominating Committee.
During the year ending December 31, 2009, the Board of Directors held 8
meetings, and each director attended at least 75% of these
meetings. Two members of the Board of
Directors attended HepaLife’s most recent annual meeting.
We expect
our Board of Directors, in the future, to appoint an Audit Committee, Nominating
Committee, Compensation Committee and any other appropriate committees, and to
adopt charters relative to each such committee. Although not required, we intend
to appoint such persons to committees in order to meet the corporate governance
requirements imposed by the national securities exchanges. In order to meet this
goal, we intend to add independent directors.
Audit
Committee
The Board
of Directors does not currently have a standing Audit Committee. The
full Board of Directors performs the principal functions of the Audit
Committee. The full Board of Directors monitors HepaLife’s financial
reporting process and internal control system and reviews and appraises the
audit efforts of HepaLife’s independent registered public accounting
firm.
Compensation
Committee
The Board
of Directors does not currently have a standing Compensation Committee due to
the relatively small size of the Board of Directors. The full Board
of Directors establishes overall compensation policies for HepaLife and reviews
recommendations submitted by its management. The Board of Directors
has not retained the services of any compensation consultants.
Nominating
Committee
The Board
of Directors does not currently have a standing Nominating Committee. The full
Board of Directors participates in the process of nominating directors to serve
on the Board of Directors. Due to the relatively small size of the Board of
Directors, HepaLife has not established a separate Nominating
Committee. HepaLife does not have a formal policy with regard to the
consideration of any director candidates recommended by shareholders, but
considers any such recommendations. Shareholders should follow the
instructions under “Communications With The Board Of Directors” to submit any
such recommendations. HepaLife considers a candidate’s depth of
experience, availability and potential contributions to the diversity of the
Board of Directors when evaluating nominees for director.
Board
Leadership Structure and Role in Risk Oversight
The full Board of Directors is
responsible for, and involved with, risk oversight of HepaLife. As its
operations expand, HepaLife anticipates that the primary responsibility for
day-to-day risk oversight may be designated to a committee of the Board of
Directors, which would report to the full Board of Directors.
Director
Independence
As of the
date of this Information Statement, because none of HepaLife’s securities are
listed on a national securities exchange, HepaLife is not required to have any
independent directors and currently does not have any independent
directors. Prior to his resignation from the Board of Directors, Mr.
Jimenez was an “independent director” under the standards of independence set
forth in Rule 5605(a)(2) of the NASDAQ Stock Market Rules.
Communications
With The Board Of Directors
HepaLife
has no formal procedures to follow for shareholders to communicate with the
Board of Directors. Should you wish to submit a written communication to the
Board of Directors or an individual director, you may mail or deliver such
communication to: HepaLife Technologies, Inc., Board of Directors, 850 Third
Avenue, Suite 1801, New York, New York 10022, Attention: David Stefansky,
Chairman. All appropriate communications received from shareholders
will be forwarded to the Board of Directors or any committee thereof, if any, as
appropriate.
Compensation
Committee Interlocks and Insider Participation
During the fiscal year ended December
31, 2009, Mr. Menzler, our former Chief Executive Officer, President and
Chairman of the Board of Directors, participated in deliberations of the Board
of Directors concerning executive officer compensation until his resignation
from the Board of Directors on September 30, 2009. None of our
executive officers served as a director or member of the compensation committee
(or other board committee performing similar functions or, in the absence of any
such committee, the entire Board of Directors) of another entity, one of whose
executive officers served on our Board of Directors.
LEGAL
PROCEEDINGS
HepaLife
is not aware of any legal proceedings in which any director, officer, or any
owner of record or beneficial owner of more than five percent of any class of
voting securities of HepaLife, or any affiliate of any such director, officer,
affiliate of HepaLife, or security holder, is a party adverse to HepaLife or has
a material interest adverse to HepaLife.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires HepaLife’s directors and executive officers
and persons who beneficially own more than 10% of a registered class of
HepaLife’s equity securities to file reports of ownership and reports of changes
in ownership with the SEC. These persons are required by regulations of the SEC
to furnish HepaLife with copies of all Section 16(a) forms they
file.
Based
solely on HepaLife’s review of the copies of these forms received by HepaLife,
HepaLife believes that, with respect to fiscal year 2009, its officers with the
exception of Amit S. Dang who was delinquent in filing his Form 3, directors,
with the exception of director Joseph Sierchio who was delinquent in filing one
Form 4 to report one transaction, and 10% shareholders were in compliance with
all applicable filing requirements.
EXECUTIVE
COMPENSATION
The
responsibility for establishing, administering and interpreting HepaLife’s
policies governing the compensation and benefits for its executive officers lies
with the Board of Directors. In this connection the Board of Directors has not
retained the services of any compensation consultants.
The goals
of HepaLife’s executive compensation program are to attract, motivate and retain
individuals with the skills and qualities necessary to support and develop its
business within the framework of its small size and available resources. In
2009, HepaLife designed its executive compensation program to achieve the
following objectives:
|
•
|
attract
and retain executives experienced in developing and delivering
products;
|
|
•
|
motivate
and reward executives whose experience and skills are critical to
HepaLife’s success;
|
|
•
|
reward
performance; and
|
|
•
|
align
the interests of HepaLife’s executive officers and shareholders by
motivating executive officers to increase shareholder
value.
|
The
following table and descriptive materials set forth information concerning
compensation earned for services rendered to HepaLife by all individuals serving
as HepaLife’s principal executive officers during the fiscal year ended December
31, 2009 (the “Named Executive Officers”). Except for the Named
Executive Officers, no executive officer of HepaLife received annual
remuneration in excess of $100,000.
Summary
Compensation Table
|
Name
and
Principal
Position
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
|
|
|
Other
(3)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amit
Dang (1)
|
2009
|
|
$ |
21,000 |
|
|
$ |
0 |
|
|
$ |
23,000 |
|
|
$ |
0 |
|
|
$ |
44,000 |
|
|
Former
President, CEO, CFO, and Secretary
|
2008
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank
Menzler (2)
|
2009
|
|
$ |
225,000 |
|
|
$ |
35,000 |
|
|
$ |
205,000 |
|
|
$ |
975 |
|
|
$ |
465,975 |
|
|
Former
President, CEO, Chairman, and Director
|
2008
|
|
$ |
225,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
450 |
|
|
$ |
225,450 |
|
|
|
(1)
|
On October 13, 2009, HepaLife
entered into an Interim Executive Services Agreement with Amit Dang,
pursuant to which Mr. Dang was appointed as its Interim Chief Executive
Officer, President and Secretary. Mr. Dang received a fee of $7,000 per
month during the term of this agreement. This agreement was terminated
upon Mr. Dang’s resignation from HepaLife on the Closing Date after the
Effective Time. Mr. Dang was also granted an option to purchase, subject
to vesting restrictions, up to 100,000 shares of HepaLife Common Stock, at
a price of $0.32 per share (the closing price of HepaLife Common Stock as
reported on the Over the Counter Bulletin Board on October 13, 2009). The
options vested upon the resolution of the Board of Directors prior to the
Merger on May 7, 2010. On May 4, 2010, the Board of Directors adopted a
resolution to amend the stock option agreement for Mr. Dang to change the
period for exercising the option after termination from 90 days to 12
months.
|
|
|
(2)
|
On September 30, 2009, HepaLife
and Frank Menzler, who at the time was its Chief Executive Officer and
President, entered into a restated employment agreement providing for the
payment to Mr. Menzler of a signing bonus of $35,000, which was recorded
as salary expense, a severance payment of up to six-months salary and
benefits, cancelation of all stock option grants, and the resignation of
Mr. Menzler as a director and Chairman of the Board of Directors. On
October 13, 2009, Mr. Menzler resigned from his position as Chief
Executive Officer and President. Pursuant to the terms of the restated
employment agreement, Mr. Menzler was appointed Special Technical Advisor
and continued as an employee. On March 16, 2010, HepaLife gave written
notice to Mr. Menzler of its election to terminate the September 30, 2009
restated employment agreement effective March 31,
2010.
|
|
|
(3)
|
Represents
life insurance premiums for the benefit of Mr.
Menzler.
|
Messrs. Stefansky, Rosenblum and Berger
were appointed to their positions with HepaLife on May 11, 2010 and,
accordingly, did not receive any compensation for the fiscal year ended December
31, 2009.
Change
of Control Agreements
There are
no understandings or agreements known by HepaLife at this time which would
result in a change in control.
On
October 7, 2009, the Board of Directors approved the Severance
Plan. Pursuant to the Severance Plan, if a director resigns or is
removed following a change in control, the director will be entitled to receive
a cash severance payment equal to $1,200 per month served as a director, up to a
maximum amount of $24,000. Prior to the Effective Time, Mr. Jimenez and Mr.
Bhogal each received $24,000 pursuant to the Severance Plan. Prior to the
Effective Time, Mr. Sierchio waived any and all compensation that may be owed to
him in connection with a change of control.
Other
than the Severance Plan, HepaLife does not have any change-of-control or
severance agreements with any of its executive officers or directors. Except as
disclosed above with respect to Mr. Dang’s options, in the event of the
termination of employment of the Named Executive Officers any and all
unexercised stock options shall expire and no longer be exercisable after a
specified time following the date of the termination.
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth information regarding equity awards that have been
previously awarded to each of the Named Executive Officers and which remained
outstanding as of December 31, 2009.
|
Name
|
|
Number
of Securities Underlying Options
(Exercisable)
|
|
|
Number
of Securities Underlying Options
(Unexercisable)
|
|
|
Equity
Incentive Awards: Number of Securities Underlying Unexercised
Unearned Options
|
|
|
%
of Total Options Granted to Employees in 2009
|
|
|
Exercise
Price ($/sh)
|
|
Expiration
Date
|
|
Amit
Dang (1)
|
|
|
0 |
|
|
|
0 |
|
|
|
100,000 |
|
|
|
100
|
% |
|
$ |
0.32 |
|
10/13/2014
|
|
|
(1)
|
Mr.
Dang was granted an option to purchase, subject to vesting restrictions,
up to 100,000 shares of HepaLife Common Stock, at a price of $0.32 per
share (the closing price of HepaLife Common Stock as reported on the Over
the Counter Bulletin Board on October 13, 2009). On May 4, 2010, the Board
of Directors adopted a resolution to amend the stock option agreement for
Mr. Dang to change the period for exercising the option after termination
from 90 days to 12 months. The options vested upon the discretion of the
Board of Directors prior to the Merger on May 7,
2010.
|
Except for Mr. Dang, none of HepaLife’s
Named Executive Officers were awarded any equity awards which remained
outstanding as of December 31, 2009.
Compensation
of Directors
HepaLife
does not pay director compensation to directors who are also its employees. The
Board of Directors determines the non-employee directors’ compensation for
serving on the Board of Directors and its committees, if any. In establishing
director compensation, the Board of Directors is guided by the following
goals:
|
|
·
|
Compensation
should consist of a combination of cash and equity awards that are
designed to fairly pay the directors for work required for a company of
HepaLife’s size and scope;
|
|
|
·
|
Compensation
should align the directors’ interests with the long-term interests of
shareholders; and
|
|
|
·
|
Compensation
should assist with attracting and retaining qualified
directors.
|
During
the fiscal year ended December 31, 2009, non-employee directors
received $2,500 per quarter for their services as directors plus $500 for each
meeting of the Board of Directors attended in excess of five per
year. Directors are entitled to participate in HepaLife’s 2001
Incentive Stock Option Plan. HepaLife also reimburses its directors
for any actual expenses incurred to attend meetings of the Board of
Directors.
The table
below outlines director compensation for the fiscal year ended December 31,
2009.
|
Name
|
|
Fees
earned
or
paid
in
cash
(1)
|
|
|
Stock
awards
Aggregate
Grant Date Fair Value
|
|
|
Option
awards
Aggregate Grant Date Fair Value
|
|
|
Non-equity
incentive
plan
compensation
|
|
|
Nonqualified
deferred
compensation
earnings
|
|
|
All
other compensation (3)
|
|
|
Total
|
|
|
Javier
Jimenez (5)
|
|
$ |
11,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
7,081 |
|
|
$ |
18,081 |
(4) |
|
Jatinder
Bhogal (6)
|
|
$ |
11,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,315 |
|
|
$ |
14,315 |
(4) |
|
Roland
Schomer (2)
|
|
$ |
8,667 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
5,574 |
|
|
$ |
14,241 |
|
|
Joseph
Sierchio
|
|
$ |
11,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,315 |
|
|
$ |
14,315 |
|
|
|
(1)
|
The
amounts in this column represent the monthly cash meeting fee earned by or
paid to HepaLife’s directors for service during the fiscal year ended
December 31, 2009.
|
|
|
(2)
|
Mr.
Schomer resigned as a director effective October 6,
2009.
|
|
|
(3)
|
Other
compensation represents stock-based compensation expense HepaLife
recognized during 2009 relating to the 50,000 stock options each director
is granted when appointed to the Board of
Directors.
|
|
|
(4)
|
Prior
to the Effective Time, Mr. Jimenez and Mr. Bhogal each also received
$24,000 pursuant to the Severance
Plan.
|
|
|
(5)
|
Mr.
Jimenez resigned as a director effective May 11,
2010.
|
|
|
(6)
|
Mr.
Bhogal resigned as a director effective May 11,
2010.
|
Mr.
Stefansky was appointed to the Board of Directors on May 11, 2010 and,
accordingly, Mr. Stefansky did not receive any director compensation for the
fiscal year ended December 31, 2009.
Each
non-employee director received an initial stock option entitling him to purchase
up to 50,000 shares of HepaLife Common Stock at a price per share equal to the
closing price of the HepaLife Common Stock, as reported on the Over the Counter
Bulletin Board on the date of the option grant. The options vest at
the rate of 20% per annum in arrears. In addition each non-employee director
received a quarterly cash payment, in arrears, of $2,500. Each director of
HepaLife is entitled to reimbursement of out of pocket expenses incurred in
connection with his services as a director.
HepaLife
has no other arrangements pursuant to which any of its directors were
compensated during the years ended December 31, 2009 and 2008 for services as a
director.
NO
MEETING OF SHAREHOLDERS REQUIRED
This
Information Statement is being provided for informational purposes only, and
does not relate to any meeting of shareholders. No vote or other action is being
requested of HepaLife’s shareholders.
ADDITIONAL
INFORMATION
HepaLife
is subject to the informational requirements of the Exchange Act, and in
accordance therewith files reports, proxy statements and other information
including annual and quarterly reports on Form 10-K and 10-Q (the “1934 Act Filings”) with the
SEC. The 1934 Act Filings and other reports filed by HepaLife can be inspected
and copied at the public reference facilities maintained at the SEC at Room
1024, 100 F Street, N.E., Washington, DC 20549. Copies of such material can be
obtained upon written request addressed to the SEC, Public Reference Section,
100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. The SEC
maintains a web site on the Internet (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the SEC through the Electronic Data Gathering, Analysis
and Retrieval System.
CONCLUSION
As a
matter of regulatory compliance, HepaLife is sending you this Information
Statement which describes the purpose and effect of the above actions. Your consent to the above action is
not required and is not being solicited in connection with this action.
This Information Statement is intended to provide HepaLife’s shareholders
information required by the rules and regulations of the Exchange
Act.
HEPALIFE
IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND HEPALIFE A
PROXY. THE ATTACHED MATERIAL IS FOR INFORMATIONAL PURPOSES ONLY.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, HepaLife
Technologies, Inc. has duly caused this Information Statement to be signed on
its behalf by the undersigned hereunto duly authorized.
|
Dated:
May 21, 2010
|
HEPALIFE TECHNOLOGIES,
INC.
|
|
| |
|
|
|
|
|
By:
|
/s/ Steven
C. Berger |
|
| |
Name:
|
Steven
C. Berger |
|
| |
Title:
|
Chief
Financial Officer |
|
| |
|
|
|