DEFA14A: Intelligent Bio Solutions Revises Stock Incentive Plan Following Advisory Firm Recommendation

Intelligent Bio Solutions Inc. is amending its 2019 Long Term Incentive Plan to reduce the number of shares to be added, following a recommendation against the original proposal from proxy advisory firm Glass, Lewis & Co. and feedback from stockholders.

Summary

• Intelligent Bio Solutions Inc. is supplementing its proxy statement for the annual stockholder meeting on May 8, 2025.
• The supplement addresses Proposal 3, which concerns an amendment to the 2019 Long Term Incentive Plan.
• Following a recommendation from Glass, Lewis & Co. and stockholder feedback, the company is reducing the proposed increase in shares for the plan.
• The number of shares to be added to the plan is being reduced from 2,366,666 to 1,166,666.
• If approved, this will result in 1,300,000 shares being subject to the 2019 Plan.
• The company is also increasing the limit on the number of shares underlying awards to any non-employee director in any year from 15,000 shares to 50,000 shares.
• Stockholders are encouraged to vote, and those who already voted in favor of the original proposal do not need to take further action to maintain their vote.
• As of March 18, 2025, the company had 25,958 shares available for issuance under the 2019 Plan.
• As of March 18, 2025, the company had 6,783,995 shares of issued and outstanding, as well as 5,516,754 shares of common stock issuable upon the exercise of outstanding warrants with a weighted-average exercise price of $16.21 per share and that terminate between 2025 and 2029.
• The last reported sale price of the company's common stock on March 27, 2025, was $1.56 per share.

Sentiment

Score: 7

Explanation: The document reflects a proactive approach to addressing concerns raised by a proxy advisory firm and stockholders, indicating a commitment to good corporate governance. The revision of the incentive plan is a positive step, although the initial need for a large share increase could be seen as a slight negative.

Positives

• The company is responsive to feedback from a proxy advisory firm and its stockholders.
• The 2019 Plan enables the company to maintain a compensation program with different types of incentives for motivating individuals and encouraging them to give long-term, excellent service.
• The board believes that it is in the best interests of the company to increase the total number of shares authorized for issuance under the 2019 Plan by an additional 1,166,666 shares, which would give the company greater flexibility to provide equity compensation to eligible recipients and enable the company to fulfil its obligations under the Share Exchange Agreement.

Negatives

• Glass, Lewis & Co. initially recommended voting against the original proposal, indicating potential concerns about the initial share increase request.
• The company had no shares available for issuance under the 2019 Plan at the time the First Plan Amendment was adopted.

Risks

• If the amended proposal is not approved, the company may have limited flexibility in providing equity compensation.
• The company's obligations under the 2019 Plan are contingent on arrangements being made regarding the payment of all federal, state and local withholding tax requirements, including by settlement of such amount in shares of the company's common stock.

Future Outlook

The company aims to attract, retain, and reward key personnel through equity compensation, which is considered essential for growth and success.

Management Comments

• Our Board believes that attracting, retaining and rewarding directors, officers, other employees and persons who provide services to the Company and enabling such persons to acquire or increase a proprietary interest in the Company has been and will continue to be essential to our growth and success.
• Accordingly, our Board believes that it is in the best interests of the Company to increase the total number of shares authorized for issuance under the 2019 Plan by an additional 1,166,666 shares (the Fourth Plan Amendment), which would give us greater flexibility to provide equity compensation to eligible recipients and enable us to fulfil our obligations under the Share Exchange Agreement.

Industry Context

Companies use long-term incentive plans to align the interests of employees, officers, directors, and consultants with those of the stockholders, motivating them to contribute to the company's long-term success.

Comparison to Industry Standards

• Many companies use equity compensation plans to attract and retain talent, particularly in competitive industries.
• The specific number of shares allocated to such plans varies widely based on company size, industry, and growth stage.
• Companies like Tesla, Amazon, and Google have used stock-based compensation extensively to incentivize employees and drive innovation.
• The increase in the limit on shares underlying awards to non-employee directors is a common practice to attract and retain qualified board members.

Stakeholder Impact

• Approval of the amended plan could positively impact employees, officers, directors, and consultants by providing them with equity-based incentives.
• Stockholders may view the revised plan as a more reasonable approach to equity compensation.
• The company's ability to attract and retain talent could be affected by the outcome of the vote on the amended plan.

Next Steps

• Stockholders need to vote on the amended proposal regarding the 2019 Long Term Incentive Plan at the Annual Meeting on May 8, 2025.
• The company will implement the amended plan if it is approved by stockholders.

Key Dates

Keywords

incentive plan, stock options, equity compensation, proxy statement, shares, stockholders, Intelligent Bio Solutions