DEF: Impact BioMedical Sets 2025 Annual Meeting Agenda

Impact BioMedical Inc. announces its 2025 Annual Meeting of Stockholders to elect directors, ratify auditors, and hold an advisory vote on executive compensation.

Summary

• The 2025 Annual Meeting of Stockholders will be held on Wednesday, November 5, 2025, at 10:00 a.m. Eastern time in Houston, TX.
• Stockholders will vote on three key proposals: electing 8 director nominees, ratifying Grassi & Co. Certified Public Accountants, P.C. as the independent registered public accounting firm for fiscal year 2025, and providing an advisory vote on executive compensation.
• The record date for determining stockholders entitled to vote at the Annual Meeting is September 8, 2025.
• Proxy materials are scheduled to be mailed on or about September 25, 2025.
• DSS BioHealth Securities, Inc., a wholly-owned subsidiary of DSS, Inc., beneficially owns approximately 83.35% of the Company's voting shares, including 100% of the issued and outstanding Series A Convertible Preferred Stock.

Sentiment

Score: 6

Explanation: The filing is a standard proxy statement for an annual meeting, presenting routine corporate governance matters without significant positive or negative surprises. The Board's recommendations for all proposals suggest stability. However, the substantial related-party debt and the provision for equity-based repayment could be viewed with some caution by investors, preventing a higher sentiment score.

Positives

• The Board of Directors recommends a 'FOR' vote on all proposals, indicating unified management and board support.
• Grassi & Co. Certified Public Accountants, P.C.'s audit report for the fiscal year ended December 31, 2024, contained no adverse opinion or disclaimer, nor was it qualified or modified.
• No disagreements were reported with Grassi & Co. Certified Public Accountants, P.C. on any accounting principles, practices, financial statement disclosure, or auditing scope/procedures.
• The Board believes the Company's compensation program does not encourage excessive or inappropriate risk-taking by employees.
• No directors or executive officers have been involved in any legal proceedings requiring disclosure in the past 10 years.

Negatives

• The advisory vote on executive compensation is non-binding, meaning the Board is not obligated to act on stockholder sentiment.
• A significant portion of the Company's voting shares (83.35%) are held by a single related party, DSS BioHealth Securities, Inc., which could limit the influence of minority stockholders.

Risks

• The non-binding nature of the advisory vote on executive compensation means the Board may not implement changes even if stockholders vote against current compensation practices.
• Potential for conflicts of interest arising from significant related-party transactions, including a Revolving Promissory Note with DSS, Inc., and shared general and administrative costs.
• The amendment to the Revolving Promissory Note allows for potential equity issuance to DSS, Inc. in exchange for principal and/or interest payments, which could lead to future dilution for other shareholders.

Future Outlook

Frank D. Heuszel's employment agreement extends to October 3, 2027, with a planned increase in annual base salary from $200,000 in the first year to $250,000 in the second and third years, plus mandatory bonuses. Mark Suseck's employment agreement runs through September 16, 2027, with an annual base salary of $250,000. Anticipated audit fees for fiscal year 2025 are expected to range between $40,000 and $85,000. The Revolving Promissory Note with DSS includes a planned repayment program commencing on the 37th month (from September 16, 2024) with fixed monthly payments of $126,381 through August 31, 2030.

Management Comments

• "The Board of Directors recommends that you vote FOR the proposals set forth in this Notice of Annual Meeting of Stockholders and the Proxy Statement."
• "We believe that our compensation policies for the Named Executive Officers are designed to attract, motivate and retain talented executive officers and are aligned with the long-term interests of the Companys stockholders."
• "Our Board considered whether our compensation program encouraged excessive risk taking by employees at the expense of long-term Company value. Based upon its assessment, the Board does not believe that our compensation program encourages excessive or inappropriate risk-taking."

Industry Context

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Management Changes

Corporate Governance

Legal Proceedings

• No directors or executive officers have been involved in any legal proceedings in the past 10 years that would require disclosure under Item 401(f) of Regulation S-K.

Related Party Transactions

• GRDG Agreement: The Company funded scientific operations of GRDG (a minority stockholder of two subsidiaries, owned by Daryl Thompson) for biomedical product development. In February 2022, GRDG transferred its 20% equity in Global BioLife, Inc. and Impact BioLife Sciences, Inc. to the Company in exchange for a 20% interest in future licensing/sale revenue from Global Intellectual Property. This agreement ended in September 2023, with no contingent liability recognized as of the report date. Expenses incurred were approximately $25,000 in 2024 and $447,000 in 2023.
• DSS General and Administrative Costs: DSS, Inc. (a related party) incurs and passes through general and administrative costs, primarily payroll, to the Company on a monthly basis. These costs were approximately $31,000 per month from January to September 2024 and $26,000 per month from October to December 2024. Total related expenses were $357,000 in 2024 and $144,000 in 2023.
• Revolving Promissory Note with DSS: The Company has a Revolving Promissory Note with DSS, Inc., executed December 31, 2020, and amended July 24, 2024 (effective September 16, 2024). The amendment allows the Company to pay principal and/or interest in exchange for potential equity, adjusts interest due dates, modifies the 'On Demand' feature, and sets a planned repayment program of $126,381 monthly starting from the 37th month through August 31, 2030. The interest rate is WSJ Prime Rate plus 0.50%. The outstanding balance was $8,878,000 (net of fair value change) as of December 31, 2024, and $12,074,000 as of December 31, 2023.

Stakeholder Impact

• **Shareholders**: Will participate in key corporate governance decisions through voting on director elections, auditor ratification, and executive compensation. However, the significant ownership by DSS BioHealth Securities, Inc. (83.35%) means minority shareholders have limited influence on voting outcomes. Potential for future dilution exists if the Company opts to pay related-party debt with equity.
• **Employees**: Executive officers have employment agreements with defined salaries and potential bonuses. Stock options have been granted under the 2023 Equity Incentive Plan, providing long-term incentives.
• **Creditors**: DSS, Inc. is a significant creditor through the Revolving Promissory Note, and the amended terms affect its repayment schedule and potential for equity conversion.

Next Steps

• Stockholders are to vote on the election of 8 director nominees at the Annual Meeting on November 5, 2025.
• Stockholders are to vote on the ratification of Grassi & Co. Certified Public Accountants, P.C. as the independent registered public accounting firm for fiscal year 2025.
• Stockholders are to provide an advisory vote on executive compensation.
• The Board of Directors will review its future selection of the independent registered public accounting firm if the current appointment is not ratified by stockholders.
• The Company will commence a planned repayment program for the Revolving Promissory Note with DSS, Inc. on the 37th month (from September 16, 2024), with fixed monthly payments of $126,381 through August 31, 2030.
• Stockholders wishing to present proposals for the 2026 annual meeting must submit them by March 5, 2025.

Key Dates

Recommendation

This filing is a routine proxy statement for an annual meeting, primarily focused on corporate governance matters such as director elections, auditor ratification, and an advisory vote on executive compensation. It does not contain new material financial results, operational updates, or strategic announcements that would typically drive a significant change in the company's valuation or warrant a 'buy' or 'sell' recommendation. While related-party transactions and debt are disclosed, they are presented as ongoing business activities. The substantial insider ownership by DSS BioHealth Securities, Inc. (83.35%) means minority shareholders have limited influence, which is a factor for investors to consider. Therefore, a 'hold' recommendation is appropriate as the filing provides no new information to alter an existing investment thesis.

Keywords

Proxy Statement, Annual Meeting, Corporate Governance, Director Election, Auditor Ratification, Executive Compensation, Shareholder Vote, Impact BioMedical, SEC Filing, Board of Directors, Related Party Transactions