DEF: Xenetic Biosciences Sets 2025 Annual Meeting Agenda

Xenetic Biosciences, Inc. announces its 2025 Annual Meeting of Stockholders to address director elections, auditor ratification, and executive compensation.

Summary

• The Annual Meeting of Stockholders will be held virtually on Thursday, December 11, 2025, at 10:00 a.m. Eastern Time.
• Stockholders of record as of October 15, 2025, are entitled to vote, with 2,277,139 shares of common stock outstanding on that date.
• Key proposals include the election of six director nominees, ratification of CBIZ CPAs P.C. as the independent registered public accounting firm for fiscal year ending December 31, 2025, and a non-binding advisory vote on named executive officer compensation.
• Net Loss for 2024 was $(3,960,275), an improvement from $(4,134,578) in 2023 and $(6,552,353) in 2022.
• Total Shareholder Return (TSR) for a $100 investment on December 31, 2021, was $30.93 by December 31, 2024, an increase from $16.91 in 2023 and $13.98 in 2022.
• Marcum LLP resigned as the company's independent auditor on April 8, 2025, due to an acquisition by CBIZ CPAs P.C., which was concurrently engaged.

Sentiment

Score: 4

Explanation: While the company showed an improving trend in net loss and year-over-year TSR in 2024, it remains unprofitable, and the overall shareholder return from the initial investment is significantly negative. Governance issues like low director attendance and non-independent directors, coupled with a regulatory delay for a key product candidate, temper positive sentiment. Significant severance payments also represent a notable outflow.

Positives

• Net Loss decreased to $(3,960,275) in 2024 from $(4,134,578) in 2023 and $(6,552,353) in 2022, indicating an improvement in financial performance.
• Total Shareholder Return (TSR) increased to $30.93 in 2024 from $16.91 in 2023 (based on a $100 investment on Dec 31, 2021), suggesting improved stock performance year-over-year.
• The company has adopted a clawback policy for executive compensation, aligning with Nasdaq listing requirements and Section 304 of the Sarbanes-Oxley Act.
• The Board's Audit Committee has a qualified financial expert, Mr. Firdaus Jal Dastoor.
• The company offers a 401(k) plan with a 100% employer match up to 4% of employee salary, with matching contributions fully vested at the time of contribution.

Negatives

• The company continues to report a net loss, indicating ongoing unprofitability, despite the reduction in 2024.
• The Total Shareholder Return (TSR) of $30.93 on a $100 investment from December 31, 2021, represents a significant loss of shareholder value over three years.
• Dr. Roger Kornberg attended only 52% of Board and committee meetings during fiscal year 2024.
• Dr. Dmitry Genkin has not yet filed his initial Form 3 for Section 16(a) compliance.
• Two directors, Dr. Dmitry Genkin and Mr. Moshe Mizrahy, were deemed not independent and were not eligible for compensation during fiscal year 2024.
• Former CEO Jeffrey Eisenberg and former Chief Scientific Officer Dr. Curtis Lockshin received substantial severance payments in 2024, totaling $454,559 and $369,994 respectively.

Risks

• Ongoing net losses indicate financial instability and a potential need for future capital raises.
• Significant decline in Total Shareholder Return (TSR) over the past three years suggests poor long-term stock performance and potential investor dissatisfaction.
• Reliance on related parties (Pharmsynthez, PeriNess) for R&D and clinical trials introduces potential conflicts of interest and dependency risks.
• Regulatory deficiencies in Pharmsynthez's Epolong registration dossier in Russia could delay or prevent commercialization, impacting potential future royalty income.
• Challenges in attracting and retaining independent directors may arise if directors are deemed non-independent or have low meeting attendance.

Future Outlook

Pharmsynthez is currently determining next steps for its Epolong registration dossier in Russia after receiving a response letter indicating certain deficiencies. The Compensation Committee will consider the outcome of the Say on Pay vote when evaluating future executive compensation arrangements.

Management Comments

• We have once again decided to forego the opportunity to meet with our stockholders in person this year to conduct the required annual business of the Company.
• The Compensation Actually Paid to our CEO and the average of Compensation Actually Paid to our Non-CEO NEOs increased in 2024, which corresponded to the increase in the Companys TSR and decrease in Net Loss in 2024.
• The Compensation Actually Paid for both our former CEO and Non-CEO NEOs in 2024 increased primarily due to severance commitments incurred in 2024.

Industry Context

The company operates in the biotechnology and life sciences sector, focusing on drug development through proprietary technologies like PolyXen, ImuXen, and systemic DNase I. Its R&D collaborations, such as with Pharmsynthez for Epolong, are common in the biotech industry for sharing development costs and expertise, but also introduce regulatory and dependency risks across different jurisdictions. The shift to virtual-only annual meetings aligns with a broader trend adopted by many companies for efficiency and cost savings.

Management Changes

Corporate Governance

Related Party Transactions

• **PJSC Pharmsynthez**: Holds approximately 3% of common stock and 1.5 million shares of Series B Preferred Stock as of March 31, 2025. Directors Dr. Dmitry Genkin (Executive Chairman) and Dr. Alexey Vinogradov serve on its board. Dr. Grigory Borisenko was affiliated with Rusnano LLC (affiliated with Pharmsynthez) until March 31, 2022. The company has a collaborative R&D license agreement (November 2009) and a Co-Development Agreement (August 2011, assigned to Pharmsynthez in December 2021) for drug candidates, with potential for 10% royalties on sales in certain territories. Pharmsynthez reported positive Phase 3 data for Epolong in December 2020 but faces regulatory deficiencies in Russia. A loan agreement for up to $500,000 at 10% interest from Q4 2019 was fully repaid in May 2023, generating approximately $40,000 in interest income for the company in 2023.
• **Peri-Ness Technologies Ltd.**: The company entered into a clinical trial services agreement in Q4 2024, estimated at approximately $0.3 million, to advance its systemic DNase I technology in Israeli medical centers. Director Dr. Dmitry Genkin is a significant shareholder, and Director Mr. Moshe Mizrahy is a majority shareholder and director.
• **Dr. Dmitry Genkin**: Entered into a Consulting Agreement with the company effective January 1, 2025, to provide services for the DNase-based oncology program. Approximately $0.3 million was paid to Dr. Genkin during the nine months ended September 30, 2025.

Stakeholder Impact

• **Shareholders**: Will participate in key governance decisions at the Annual Meeting, including director elections and executive compensation. Have experienced significant value erosion as indicated by the TSR, but also a reduction in net losses.
• **Employees**: Benefit from a 401(k) plan with company matching contributions. Executive officers received severance packages upon termination.
• **Customers/Partners**: Pharmsynthez remains a key R&D partner, with the Epolong project facing regulatory hurdles. PeriNess is a new partner for clinical trials, indicating continued R&D activity.
• **Creditors**: The Pharmsynthez Loan was fully repaid, indicating no outstanding debt to this related party.

Next Steps

• Stockholders will vote on director nominees, auditor ratification, and executive compensation at the Annual Meeting on December 11, 2025.
• Pharmsynthez is determining next steps for Epolong registration after addressing identified deficiencies.
• The Compensation Committee will consider the outcome of the Say on Pay vote when evaluating future executive compensation arrangements.
• The company expects to file a Current Report on Form 8-K within four business days after the Annual Meeting to announce preliminary voting results, and an additional Form 8-K for final results if not available initially.

Key Dates

Recommendation

The company exhibits mixed signals: an improving trend in net loss and year-over-year Total Shareholder Return (TSR) in 2024 is positive, but it remains unprofitable, and the overall TSR from the initial investment is significantly negative. The regulatory delay for a key product candidate (Epolong) and the prevalence of related-party transactions introduce uncertainties. While governance improvements like a clawback policy are noted, the overall financial performance and product development progress do not yet warrant a 'buy' recommendation, nor do they suggest an immediate 'sell' given the improving trend in losses. A 'hold' position allows investors to monitor further progress on product development and sustained financial improvements.

Keywords

Xenetic Biosciences, XBIO, Proxy Statement, Annual Meeting, Director Election, Corporate Governance, Executive Compensation, Auditor Ratification, Biotechnology, Life Sciences, SEC Filing, Shareholder Vote, Net Loss, Total Shareholder Return, Related Party Transactions, DNase I technology, Epolong