DEF 14A: Vivos Therapeutics Seeks Stockholder Approval for 2024 Equity Incentive Plan

Vivos Therapeutics is asking stockholders to approve the 2024 Omnibus Equity Incentive Plan at the upcoming annual meeting on November 26, 2024.

Summary

• Vivos Therapeutics is holding its 2024 Annual Meeting of Stockholders virtually on November 26, 2024.
• Stockholders will vote on three proposals: electing six directors, approving the 2024 Omnibus Equity Incentive Plan, and ratifying the appointment of Moss Adams LLP as the independent registered public accounting firm.
• The Board recommends voting FOR all director nominees and FOR the approval of the 2024 Plan and the ratification of Moss Adams.
• The 2024 Omnibus Equity Incentive Plan, if approved, will replace the 2019 Plan and reserve 1,600,000 shares for future awards.
• The company's burn rate, defined as the total number of shares subject to awards granted in a calendar year expressed as a percentage of basic weighted average shares outstanding, was 12.6% for 2023, 54.5% for 2022, and 34% for 2021, with an average of 33% over the last three fiscal years.
• The plan includes provisions to prevent liberal share recycling and repricing of stock options without stockholder approval.
• Contingent stock option awards have been approved, subject to stockholder approval of the 2024 Omnibus Plan, with an exercise price of $2.62 per share.
• The company dismissed Plante & Moran PLLC as its independent registered public accounting firm on May 3, 2023, and engaged Moss Adams LLP.

Sentiment

Score: 7

Explanation: The document is primarily informational, outlining the proposals for the annual meeting. The tone is professional and positive, reflecting the board's recommendations.

Positives

• The 2024 Omnibus Equity Incentive Plan includes stockholder-friendly governance provisions, such as prohibiting liberal share recycling and repricing of stock options without stockholder approval.
• The plan imposes a $550,000 limit on total compensation for non-employee directors.
• The plan contains robust clawback language.
• The plan prohibits the payment of dividends or dividend equivalents on unvested awards.

Risks

• If stockholders do not approve the 2024 Omnibus Equity Incentive Plan, the company may have limited ability to incentivize officers, employees, directors and consultants with equity-based awards.
• The company's burn rate has been relatively high in recent years, which could lead to dilution for existing stockholders.

Future Outlook

The company anticipates that the 1,600,000 shares under the 2024 Omnibus Plan will allow the plan to operate for several years, although this could change based on factors such as merger and acquisition activity.

Management Comments

• On behalf of our Board of Directors and management, it is my pleasure to express our appreciation for your continued support of Vivos, said R. Kirk Huntsman, Chairman of the Board and Chief Executive Officer.

Industry Context

Equity incentive plans are a common tool used by public companies to attract, retain, and incentivize employees and directors. The specific terms of the plan, such as the number of shares reserved and the vesting schedule, are typically tailored to the company's specific circumstances and industry.

Comparison to Industry Standards

• The burn rate of 33% is high compared to industry standards.
• According to a study by Frederic W. Cook & Co., the average burn rate for small-cap companies in the healthcare industry is closer to 4-6%.
• The proposed equity plan is similar to those of other small-cap companies in the healthcare industry, such as Align Technology and InMode, which also use equity-based compensation to incentivize employees and directors.
• However, the specific terms of the plan, such as the number of shares reserved and the vesting schedule, may differ depending on the company's specific circumstances.

Stakeholder Impact

• Approval of the equity incentive plan could positively impact employees and directors by providing them with equity-based compensation.
• The outcome of the proposals will affect shareholders through potential dilution and the selection of the company's auditor.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will file a Form 8-K within four business days after the Annual Meeting to announce the voting results.
• If the 2024 Omnibus Plan is approved, the company anticipates filing a Form S-8 registration statement with the SEC shortly after the Annual Meeting to register the shares authorized for issuance under the plan.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Equity Incentive Plan, Stock Options, Vivos Therapeutics, Directors, Moss Adams, Compensation