DEF 14A: Zivo Bioscience Sets Date for 2024 Annual Shareholder Meeting, Outlines Key Proposals

Sentiment:

Proxy Statement 26 April 2024 8:00 AM

Zivo Bioscience announces its 2024 Annual Meeting of Shareholders to be held on June 11, 2024, featuring proposals for director election, auditor ratification, and executive compensation approval.

Worse than expectedThe company experienced a net loss of $7,777 (in thousands) in 2023, which is worse than expected.

Summary

Zivo Bioscience, Inc. will hold its 2024 Annual Meeting of Shareholders on June 11, 2024, at 10:00 a.m. Eastern Time in Pontiac, MI.
Shareholders of record as of April 12, 2024, are entitled to vote.
The meeting will address the election of one Class II director, ratification of the independent registered public accounting firm (BDO USA, P.C.) for the fiscal year ending December 31, 2024, and an advisory vote on executive compensation.
The Board of Directors recommends voting FOR the election of the director nominee, FOR the ratification of the auditor, and FOR the approval of executive compensation.
Shareholders can vote in person or by proxy via the internet, phone, or mail.
The company may switch to a virtual-only meeting and will announce any changes on its website.
As of April 12, 2024, there were 2,802,988 shares of Common Stock outstanding.
A majority of outstanding shares represented in person or by proxy constitutes a quorum.
Directors will be elected by a plurality of the votes cast.
Proposals 2 and 3 require the affirmative vote of the majority of the votes cast.
The Board has nominated Nola E. Masterson for election as a Class II director to serve until the 2027 annual meeting.
The Board determined that Christopher D. Maggiore, Alison A. Cornell, and Nola E. Masterson were all independent directors during 2023.
The company's executive officers are John B. Payne (President and CEO) and Keith R. Marchiando (CFO).

Sentiment

Score: 6

Explanation: The document is primarily factual and procedural, outlining the details of the upcoming shareholder meeting. While there are some positive aspects, such as the Board's recommendations and corporate governance practices, the company's financial constraints and net loss temper the overall sentiment.

Positives

The company is providing shareholders with multiple avenues to vote, including in person, online, by phone, and by mail.
The Board is actively engaged in corporate governance, with regular meetings and committees overseeing key areas such as audit, compensation, and nominations.
The company has a code of ethics and an insider trading policy in place.
The company is transparent about related party transactions and has a policy for reviewing and approving such transactions.
The Board is recommending 'FOR' votes on all proposals, indicating confidence in the company's direction.

Negatives

Bonus amounts previously indicated in the 2023 Proxy Statement for fiscal year 2022 were not paid to the Executive officers due to financial constraints as determined by the Board of Directors.
The company experienced a net loss of $7,777 (in thousands) in 2023.

Risks

The possibility of switching to a virtual-only meeting if an in-person meeting is not feasible.
The company's financial performance may impact its ability to provide bonuses or equity grants to employees.
The company's success depends on attracting and retaining key executive talent.
The company's stock price could be affected by market conditions and investor sentiment.

Future Outlook

The company intends to hold the Annual Meeting in person but may switch to a virtual-only meeting if necessary, with updates to be posted on its website.

Management Comments

The Board believes that the Company's CEO is best situated to serve as Chairman because he is the director most familiar with the Company's business and industry, and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy.
The Board believes that the combined role of Chairman and CEO promotes the best interests of the Company and makes the best use of the expertise of the Chairman/CEO and his unique insights into the challenges facing the Company, the opportunities available to the Company, and the operations of the Company.

Industry Context

As a bioscience company, Zivo operates within the broader biotechnology and pharmaceutical industries, facing competition from other companies developing and commercializing similar products. The company's focus on animal and human health positions it within the growing market for nutraceuticals and therapeutics.

Comparison to Industry Standards

Executive compensation structures, such as base salary, bonus, and equity grants, are standard practice in the biotechnology industry.
The use of independent directors and committees (Audit, Compensation, Nominating and Corporate Governance) aligns with corporate governance best practices for publicly traded companies.
The company's insider trading policy and code of ethics are common features of companies seeking to maintain regulatory compliance and ethical conduct.
The company's approach to risk oversight, including review of business plans and internal controls, is consistent with industry standards for risk management.

Related Party Transactions

On April 3, 2023, the Company entered into a Subscription Agreement with John Payne, the Companys Chief Executive Officer (the Subscriber), pursuant to which the Company, in a private placement, agreed to issue and sell to the Subscriber a 10% promissory note with a principal amount of $1 million (the Note) and a warrant (the Warrant) to purchase 65,000 shares of the Companys Common Stock at an exercise price of $17.46.

Stakeholder Impact

Shareholders have the opportunity to vote on key proposals that will shape the company's direction.
Executive compensation decisions impact the alignment of management with shareholder interests.
The selection of an independent auditor ensures the integrity of the company's financial reporting.
The company's corporate governance practices affect the overall transparency and accountability of the organization.

Next Steps

Shareholders should review the proxy materials and vote on the proposals.
The company will hold the Annual Meeting of Shareholders on June 11, 2024.
The Board will consider the outcome of the advisory vote on executive compensation.
The company will continue to monitor and update shareholders on any changes to the meeting format or other relevant information.

Key Dates

Date	Description
December 2, 2011	The Company and HEP Investments entered into a Loan Agreement under which HEP Investments agreed to advance up to $20,000,000 to the Company.
June 17, 2017	HEP Investments and Strome Mezzanine Fund LP and Strome Alpha Fund LP (Strome) entered into the First Amended and Restated Participation Agreement.
June 6, 2018	HEP Investments and Strome Mezzanine Fund LP and Strome Alpha Fund LP (Strome) entered into the First Amended and Restated Participation Agreement (amending the June 17, 2017 agreement).
January 1, 2021	The Company entered into an employment letter with Mr. Marchiando (the Marchiando Agreement).
February 23, 2021	The Company and HEP Investments entered into a Letter Agreement in which the Company agreed to pay certain premiums of $2,565 per month under the life insurance policy while payments under the Convertible Note remained outstanding.
March 31, 2021	HEP Investments entered into a Debt Extension and Conversion Agreement with the Company providing that the Convertible Notes, including principal and accrued interest, would automatically convert into shares of common stock upon consummation of an underwritten public offering of the Companys common stock.
June 2, 2021	All of the outstanding debt and accrued interest for the Convertible Notes was automatically converted into common stock of the Company.
October 2021	Our Board of Directors adopted a non-employee director cash and equity compensation plan.
February 10, 2022	The Audit Committee of the Board engaged BDO to serve as the Companys independent registered public accounting firm for the Companys fiscal year ending December 31, 2021.
February 15, 2022	The Company entered into a written agreement concerning Mr. Paynes employment (the Payne Contract).
December 22, 2022	The Board approved an amendment to the Payne Contract (the Payne Amendment) modifying the terms of Mr. Paynes Long Term Incentive Compensation (as defined in the Payne Amendment).
April 3, 2023	The Company entered into a Subscription Agreement with John Payne, the Companys Chief Executive Officer (the Subscriber), pursuant to which the Company, in a private placement, agreed to issue and sell to the Subscriber a 10% promissory note with a principal amount of $1 million (the Note) and a warrant (the Warrant) to purchase 65,000 shares of the Companys Common Stock at an exercise price of $17.46.
June 12, 2023	Represents (i) options to purchase 3,626 shares of Common Stock granted to each non-employee director re-elected at the Companys 2023 Annual Meeting of Shareholders on June 12, 2023 pursuant to its Non-Employee Director Compensation Policy.
October 2, 2023	The Company satisfied the Note in full on the Maturity Date.
October 26, 2023	The reported share amounts are after giving effect to the Companys October 26, 2023 reverse stock split on a 1-for-6 basis, pursuant to which every 6 shares of issued and outstanding Common Stock were converted into one share of Common Stock, as disclosed in the Company's Current Report on Form 8-K filed with the SEC on October 26, 2023.
March 31, 2024	All percentages are based on 2,802,988 shares of Common Stock issued and outstanding as of March 31, 2024, and where applicable, beneficial ownership includes shares which the beneficial owner has the right to acquire within 60 days.
April 12, 2024	Record date for determining shareholders entitled to notice of and to vote at the Annual Meeting.
April 26, 2024	Date of the proxy statement.
June 11, 2024	Date of the Annual Meeting of Shareholders.
December 27, 2024	Deadline for submission of shareholder proposals for inclusion in proxy materials for the 2025 annual meeting.
March 12, 2025	Deadline for written notice of shareholder proposals to be introduced at the 2025 annual meeting, without inclusion in the proxy statement.
April 12, 2025	Shareholders who intend to solicit proxies in support of director nominees other than the Companys nominee must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 12, 2025.

Keywords

Annual Meeting, Shareholders, Proxy Statement, Board of Directors, Director Election, Auditor Ratification, Executive Compensation, Zivo Bioscience, Governance

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