10-K/A: Pharma-Bio Serv Amends 2025 10-K for Governance & Comp
Annual Report Amendment
Pharma-Bio Serv, Inc. filed an amendment to its 2025 annual report to update information on directors, executive compensation, security ownership, related party transactions, and principal accountant fees.
Summary
- Amendment No. 1 to the 2025 Form 10-K provides information for Part III (Items 10-14) and includes Sarbanes-Oxley certifications.
- The Board of Directors comprises Kirk Michel (Chairman), Dov Perlysky, Howard Spindel, and Irving Wiesen, with a staggered three-year term structure.
- Key executive officers are Victor Sanchez (CEO & President) and Pedro J. Lasanta (CFO).
- Executive compensation for fiscal year 2025 includes $245,900 for Victor Sanchez and $175,600 for Pedro Lasanta.
- Independent directors each received $50,000 in fees and $6,320 in option awards for fiscal year 2025.
- Significant beneficial owners include Elizabeth Plaza (16.8%), Venturetek, L.P. (13.7%), Ramon Luis Dominguez Thomas (9.0%), Addison McKinley Levi III (8.9%), and Adam Hirsh (5.1%).
- The company entered into an AI Agreement on August 19, 2024, for $250,000 with an AI Company where director Dov Perlysky holds an indirect minority interest, to develop a Lead Generation Technology Platform.
- Audit fees from Crowe PR PSC were $71,490 for both fiscal years 2025 and 2024, with total fees of $113,740 in 2025 and $117,590 in 2024.
Sentiment
Score: 6
Explanation: StockSavvy.ai views this as a neutral to slightly positive filing, primarily due to the routine nature of the amendment and the disclosure of a strategic investment in AI technology, balanced by the related party nature of that transaction.
Positives
- All members of the Audit, Compensation, and Nominating & Corporate Governance Committees are independent directors, enhancing oversight and reducing potential conflicts of interest.
- Howard Spindel, a director, qualifies as an Audit Committee financial expert, strengthening financial reporting quality.
- The company has adopted a Code of Ethics, including an Insider Trading Policy, applicable to all employees, officers, and directors, promoting ethical conduct.
- The Audit Committee pre-approved 100% of all services provided by the independent public accountants in Fiscal 2025 and 2024, indicating robust financial oversight.
- The 2014 Long-Term Incentive Plan was extended for an additional ten years until March 31, 2034, providing a long-term framework for equity incentives.
Negatives
- The related party transaction involving the AI Agreement with a company where a director has an indirect interest could raise questions about potential conflicts of interest, despite disclosure.
Future Outlook
The filing does not provide explicit forward-looking statements or guidance beyond the extension of the 2014 Long-Term Incentive Plan until March 31, 2034, and the ongoing availability of the AI Company to improve, support, and maintain the Lead Generation Technology Platform.
Management Comments
- "Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report."
- "Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report."
- "The Compensation Committee has determined that no risks exist rising from the Companys compensation policies and practices for its employees that are reasonably likely to have a material adverse effect on the Company."
Industry Context
StockSavvy.ai notes that the company's investment in an AI-based Lead Generation Technology Platform reflects a broader industry trend towards leveraging artificial intelligence for business development and operational efficiency, particularly in specialized sectors like pharmaceuticals and medical devices. The continued focus on robust corporate governance and executive compensation structures aligns with best practices for publicly traded life sciences companies.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Equity Compensation Plan Term Extension | The 2014 Long-Term Incentive Plan was amended by stockholders on May 2, 2024, to extend its term for an additional ten years, ending March 31, 2034. | 2024-05-02 | Provides a longer-term framework for equity-based incentives, aligning management and director interests with long-term shareholder value and facilitating talent retention. |
Related Party Transactions
- The company previously leased its administrative office facilities from an affiliate of a past Chairman of the Board and greater than 5% stockholder (Elizabeth Plaza). The lease expired on December 31, 2025, with monthly rental payments of $14,561.
- On August 19, 2024, the company entered into an agreement for $250,000 with an "AI Company" in which Dov Perlysky, a director, and his brother-in-law, Alan Stahler, indirectly hold a minority interest and are indirect managers. This agreement provided for the development of a Lead Generation Technology Platform, a 2.44% membership interest in the AI Company, and a two-year option to acquire an additional 16.67% interest for $1,750,000.
Stakeholder Impact
- Shareholders: The extension of the Long-Term Incentive Plan and the AI investment could align management incentives with long-term growth. The related party nature of the AI transaction might warrant scrutiny.
- Employees: Executive compensation details and the existence of an insider trading policy provide transparency and guidelines. The AI platform aims to automate business development and recruitment, which could impact future staffing needs or efficiency.
- Customers/Suppliers: The AI-based Lead Generation Technology Platform is intended to research and automate business development, potentially enhancing customer acquisition and engagement.
Next Steps
- The AI Company will remain available to improve, support, and maintain the Lead Generation Technology Platform.
- Class I directors are serving until the 2026 Annual Meeting of Stockholders.
- The Audit Committee reviews and reassesses its charter for adequacy on an annual basis.
- The company intends to post amendments to or waivers from its Code of Ethics on its website.
Key Dates
| Date | Description |
|---|---|
| 1985 | Howard Spindel founded Integrated Management Solutions. |
| 1995 | Kirk Michel co-founded Bahia Group Holdings, LLC. |
| 1996-04 | Victor Sanchez served as Quality Control Laboratory Supervisor for Schering-Plough. |
| 1998 | Dov Perlysky was a vice president at Laidlaw Global Securities. |
| 1999 | Pedro J. Lasanta became CFO for Pearle Vision Center PR, Inc. |
| 2000 | Kirk Michel founded KEMA Advisors, Inc. |
| 2000-12 | Victor Sanchez served as Quality Control Validations Manager for Schering-Plough. |
| 2004 | Dov Perlysky became a director of the Company. |
| 2004-09 | Victor Sanchez served as Operations Manager of the LOCM division of Schering-Plough S.A. |
| 2006 | Kirk Michel, Howard Spindel, and Irving Wiesen became directors of the Company. |
| 2007-11 | Pedro J. Lasanta became Chief Financial Officer, Vice President Finance and Administration of the Company. |
| 2007-11-05 | Pedro J. Lasanta's initial employment agreement with the Company. |
| 2008-12-17 | Amendment to Pedro Lasanta's employment agreement, extending term indefinitely. |
| 2009-03-11 | Amendment to Pedro Lasanta's employment agreement, reducing salary and eliminating car allowance. |
| 2010-01-01 | Amendment to Pedro Lasanta's employment agreement, restoring annual base salary to $110,000. |
| 2010-04 | Victor Sanchez served as Operations Manager in the LOCM and OSD divisions of Merck Sharp & Dohme. |
| 2011-01 | Victor Sanchez became President of the European Operations of the Company. |
| 2012-01-31 | Amendment to Pedro Lasanta's employment agreement, increasing annual base salary to $125,000. |
| 2012-12-31 | Amendment to Pedro Lasanta's employment agreement, increasing annual base salary to $150,000. |
| 2014-01-01 | Pedro Lasanta's salary increased to $160,000; effective date for independent director compensation structure. |
| 2014-01 | Pedro Lasanta served as a Member of the Puerto Rico District Export Council for the U.S. Department of Commerce. |
| 2014-04 | The 2014 Long-Term Incentive Plan was approved by stockholders. |
| 2014-12-01 | Pedro J. Lasanta became Secretary of the Company. |
| 2015-01-01 | Victor Sanchez became Chief Executive Officer and President of the Company. |
| 2016-01-01 | Initial five-year term for office facilities lease commenced. |
| 2017-12 | Pedro Lasanta's term as a Member of the Puerto Rico District Export Council ended. |
| 2018 | Engex, Inc. (where Dov Perlysky and Howard Spindel were directors) dissolved. |
| 2019 | Highlands Bancorp, Inc. (where Dov Perlysky was a director) sold to Lakeland Bank. |
| 2019-10-07 | Pedro Lasanta's salary increased to $175,000. |
| 2020-11-02 | Victor Sanchez's salary increased to $231,000. |
| 2021-01 | Kirk Michel became Chairman of the Board. |
| 2021-01-01 | Renewal option for office facilities lease became effective. |
| 2021-12-09 | Options to purchase 25,000 shares granted to Victor Sanchez and Pedro Lasanta. |
| 2022-01 | Dov Perlysky ceased being a director of Enzo Biochem, Inc. |
| 2022-03-16 | Independent director compensation amended. |
| 2023-03-06 | 8,325 options exercised by Victor Sanchez and Pedro Lasanta. |
| 2023-12-26 | Options to purchase 10,000 shares granted to Pedro Lasanta. |
| 2024-05-02 | The 2014 Long-Term Incentive Plan was amended by stockholders to extend its term. |
| 2024-08-19 | Company entered into the AI Agreement with an AI Company. |
| 2025-04-21 | 2025 definitive proxy statement for the 2025 annual meeting of stockholders filed. |
| 2025-04-30 | Last business day of the second quarter of the registrant's current fiscal year, used for market value calculation. |
| 2025-10-31 | Fiscal year ended. |
| 2025-12 | Statutory holiday bonus of $600 paid to executive officers. |
| 2025-12-31 | Office facilities lease expired. |
| 2026-01-23 | Number of common stock shares outstanding was 22,904,492. |
| 2026-01-29 | Original 2025 Form 10-K filed with the SEC. |
| 2026-02-26 | Date for beneficial ownership calculation, with 22,901,692 shares outstanding. |
| 2026-02-27 | Date of filing for this Form 10-K/A. |
| 2026 | Class I directors are serving until the 2026 Annual Meeting of Stockholders. |
| 2027 | Class II directors are serving until the 2027 Annual Meeting of Stockholders. |
| 2028 | Class III directors are serving until the 2028 Annual Meeting of Stockholders. |
| 2034-03-31 | Extended term end date for the 2014 Long-Term Incentive Plan. |
Recommendation
holdThe filing is an amendment primarily focused on corporate governance, executive compensation, and related party disclosures, rather than new operational or financial performance updates. While the investment in AI technology is a strategic move, its impact is yet to be seen, and the related-party nature warrants careful consideration. The routine nature of the disclosures and lack of new material financial information suggest a 'hold' recommendation, awaiting further operational and financial updates.
Keywords
Pharma-Bio Serv, SEC Filing, 10-K/A, Corporate Governance, Executive Compensation, Director Independence, Related Party Transactions, Audit Fees, Stock Ownership, Pharmaceutical Industry, Biotechnology, Validation Technology, Consulting Services, AI Technology
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