ITEM 11. EXECUTIVE COMPENSATION
Summary Executive Compensation Table
The following table shows information regarding the compensation earned during the fiscal years ended December 31, 2025 and December 31, 2024 by (1) our Chairman & Chief Executive Officer, (2) our Chief Financial Officer, and (3) our former Chief Executive Officers (collectively, the “NEOs”).
|
Name and principal position(s) |
Fiscal year |
Salary |
Bonus ($) |
All other compensation (1)(2) |
Total |
||||||||||||
|
Michael Kazley, |
2025 |
$ | − | $ | − | $ | − | $ | − | ||||||||
| Chairman & Chief Executive Officer (3) |
2024 |
− | − | − | − | ||||||||||||
|
Justin M. Hall, Esq. |
2025 |
$ | 271,554 | $ | − | $ | 978,045 | $ | 1,249,600 | ||||||||
| Former Chief Executive Officer (4) |
2024 |
350,000 | − | 15,177 | 365,177 | ||||||||||||
| David Lazar | 2025 | $ | − | $ | − | $ | − | $ | − | ||||||||
| Former Chief Executive Officer (5) | 2024 | − | − | − | − | ||||||||||||
|
Tommy Law |
2025 |
$ | 170,000 | $ | 259,250 | $ | 7,547 | $ | 436,797 | ||||||||
| Chief Financial Officer |
2024 |
170,000 | 42,500 | 7,696 | 220,196 | ||||||||||||
|
(1) |
In 2025 the amount includes $962,500 paid to Mr. Hall as severance pursuant to his prior employment agreement. The 2025 amounts also included: (a) individual life insurance premiums paid for by the Company for Mr. Law and Mr. Hall of $747 and $1,545, respectively; and (b) 401(k) plan matching contributions paid for by the Company for Mr. Law and Mr. Hall of $6,800 and $14,000, respectively. In 2024, the amounts included: (a) individual life insurance premiums paid for by the Company for Mr. Law and Mr. Hall of $896 and $1,854, respectively; and (b) 401(k) plan matching contributions paid for by the Company for Mr. Law and Mr. Hall of $0, $6,800 and $13,323, respectively. |
|
(2) |
In connection with the closing of the Avenova Asset Sale, we entered into the PRN Transition Services Agreement with PRN, pursuant to which we agreed to provide services to PRN with respect to specified accounting, marketing, sales, customer service, regulatory and operational support for a period of four (4) months after the closing of the Avenova Asset Sale in exchange for agreed upon service fees to be paid to us. As part of the PRN Transition Services Agreement, PRN entered into a consulting agreement with Tommy Law, our Chief Financial Officer, for certain services with a one-time payment of $85,000 which was made by PRN to Mr. Law when all such services were complete and excluded from the table above accordingly. |
|
(3) |
Mr. Kazley has served as the Company’s Chief Executive Officer since October 16, 2025. Mr. Kazley is employed and compensated by Fund Manager LLC. The Company does not pay any compensation or management fees to Fund Manager LLC for the services of our Chief Executive Officer. |
|
(4) |
Mr. Hall served as the Company’s Chief Executive Officer until August 19, 2025. |
|
(5) |
Mr. Lazar served as the Company’s Chief Executive Officer from August 19, 2025 until October 16, 2025 but did not receive any compensation for such service. |
2025 and 2024 Base Salaries and Target Bonus Amounts
Mr. Kazley was not paid a base salary in 2025. Mr. Law was paid a 2025 base salary of $170,000 and had a target bonus percentage of base salary of 25% in 2025. Mr Hall was paid a base salary of $350,000 and had a target bonus percentage of base salary of 50% in 2025 and 2024.
2025 and 2024 Cash Bonuses
The Board, upon the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), determined not to award any bonuses to its NEOs for fiscal year 2025 or 2024 performance, except for Mr. Law, who received a $42,500 bonus for fiscal year 2023 performance. The amount listed in the “Bonus” column for Mr. Law for 2025 represents discretionary incentive compensation, determined by the Board based on its qualitative assessment of individual performance and retention considerations.
2025 and 2024 Equity Awards
The Board, upon the recommendation of the Compensation Committee, determined not to grant any equity awards for the 2025 fiscal year or 2024 fiscal year to any of its NEOs.
Outstanding Equity Awards at Fiscal Year End
The following table presents the outstanding equity awards held by each of our NEOs as of December 31, 2025. Stock options were granted pursuant to our 2007 Plan thereafter until its expiration in March 2017, and all awards since then have been pursuant to our 2017 Plan. The options granted under our 2007 Plan and 2017 Plan are not exercisable until they have vested.
|
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||||||
|
Name |
Grant date |
Number of securities underlying unexercised options (#) exercisable(1) |
Number of securities underlying unexercised options (#) unexercisable(1) |
Option exercise price |
Option expiration date |
Number of shares or units of stock that have not vested |
Market value of shares or units of stock that have not vested |
Equity incentive plan awards: number of unearned shares, units or other rights that have not vested |
Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested |
|||||||||||||||||||||||||||
|
Michael Kazley. |
- | - | - | $ | - | - | - | $ | - | - | $ | - | ||||||||||||||||||||||||
|
Justin M. Hall, Esq. |
08/20/20 |
58 | - | $ | 6,064 |
08/20/30 |
- | $ | - | - | $ | - | ||||||||||||||||||||||||
|
05/31/18 |
24 | - | $ | 13,475 |
05/31/28 |
- | $ | - | - | $ | - | |||||||||||||||||||||||||
|
01/25/17 |
4 | - | $ | 22,050 |
01/25/27 |
- | $ | - | - | $ | - | |||||||||||||||||||||||||
|
06/06/16 |
18 | - | $ | 17,028 |
06/06/26 |
- | $ | - | - | $ | - | |||||||||||||||||||||||||
|
Tommy Law |
06/08/20 |
1 | - | $ | 5,451 |
06/08/30 |
- | $ | - | - | $ | - | ||||||||||||||||||||||||
|
08/20/20 |
5 | - | $ | 6,064 |
08/20/30 |
- | $ | - | - | $ | - | |||||||||||||||||||||||||
|
(1) |
Unless otherwise noted, each option vested as to 25% of the shares underlying the option on the first anniversary of the grant date, with the remainder vesting every three months in 12 equal installments thereafter. Options expire ten (10) years from the date of grant. All of the options were fully vested as of December 31, 2025. |
Employment-Related Agreements and Potential Payments upon Termination or Change in Control
Mr. Kazley is not party to an employment agreement with the Company.
The principal terms of Mr. Law’s employment agreement and Mr. Hall’s employment and separation agreements are summarized below.
Tommy Law
Mr. Law's employment agreement provides for at-will employment and a term commencing on August 19, 2025 and continuing to and including the first anniversary of such date, unless earlier terminated in accordance with the terms of the employment agreement. Mr. Law's employment agreement provides for an annual base salary of one hundred seventy thousand dollars ($170,000).
In addition, Mr. Law is eligible to participate in any bonus plan that is deemed appropriate by the Board. The bonus amount shall be determined by the Board, in its sole discretion, based upon several factors, including: (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to the executive as set by the executive and the Company's Chief Executive Officer and/or the Board, before the end of the first calendar quarter; (ii) the evaluation of the executive by the Company's Chief Executive Officer and/or the Board; (iii) the Company's financial, product and expected progress; and (iv) other pertinent matters relating to the Company's business and valuation. The Compensation Committee has the sole discretion to pay any or all of the annual bonus in cash or as equity compensation (which would be fully vested as of the date of grant).
The Company paid Mr. Law a one-time cash retention payment in the amount of $170,000 in 2025 based on his remaining employed by the Company through the filing of the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2025.
In the event the Company terminates Mr. Law for cause, he would be entitled to any earned but unpaid wages or other compensation (including reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and unused vacation) earned through the termination date.
In the event the Company terminates Mr. Law without cause or at the expiration of the term, provided such termination constitutes a "separation from service" as such term is defined in Section 409A of the Code and, subject to his compliance with his confidentiality, proprietary rights, and conflicting employment obligations and his execution of a release of claims in favor of the Company, he would be entitled to an amount equal to his then-current annual base salary, payable in a lump-sum within sixty (60) days following Mr. Law's separation from service in addition to Mr. Law's earned wages and other compensation (including reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and unused vacation) through the date his employment is terminated from the Company.
Moreover, all outstanding equity awards held by Mr. Law will be subject to full accelerated vesting on the date of termination without cause or at the expiration of the term, and the exercise period shall be extended to three (3) years from the date of termination.
Justin Hall
Prior to his termination of employment, Mr. Hall was party to an employment agreement with the Company that provided for an annual base salary of three hundred fifty thousand dollars ($350,000).
Mr. Hall’s employment with the Company terminated in connection with, and as a condition to, the transactions contemplated by the 2025 Preferred Stock Purchase Agreement. In connection with his termination of employment, the Company agreed to pay Mr. Hall a cash payment in two installments, each in the amount of $481,250, less required taxes and withholdings, plus $8,777.61 in COBRA payments per installment. In connection therewith, Mr. Hall agreed to resign as Chief Executive Officer of the Company, and to resign as a director on the Board. The agreement included a mutual release of claims and mutual non-disparagement obligations.
Director Compensation
The compensation and benefits for service as non-employee members of our Board is determined by the Board. Directors employed by the Company, such as Mr. Kazley, are not compensated for service on the Board or any committee of the Board; however, the Company reimburses all directors for any out-of-pocket expenses incurred in connection with attending meetings of the Board and committees of the Board.
The Board, upon the recommendation of the Compensation Committee, approved the Non-Employee Director Compensation Program, effective January 1, 2024 (the “2024 Non-Employee Director Compensation Plan”). Under the 2024 Non-Employee Director Compensation Plan, each director receives his or her annual retainer compensation in cash and an annual grant of 6,000 RSUs. All cash compensation is payable quarterly on the first (1st) business day of the quarter.
Approved non-employee director compensation for 2025 was as follows:
|
Board Meetings |
Chair of Committees |
All Other Committee Members |
||
|
Chair of the Board: Annual cash compensation of $52,000 per year. |
Chair of the Audit Committee: Annual cash compensation of $17,500 per year. |
Member of the Audit Committee: Annual cash compensation of $7,500 per year. |
||
|
Member of the Board: The annual fee consists of: (i) $40,000 in cash and (ii) 6,000 restricted stock units granted. The restricted stock units are granted at the Company’s Annual Meeting of Stockholders, and vest on the one year anniversary of the grant date. |
Chair of the Compensation Committee: Annual cash compensation of $13,000 per year. |
Member of the Compensation Committee: Annual cash compensation of $6,000 per year for each committee. |
||
|
Chair of the N&CG Committee: Annual cash compensation of $10,000 per year. |
Member of the N&CG Committee: Annual cash compensation of $5,000 per year for each committee.
Non-employee directors also may be granted additional awards under our equity incentive plans at the discretion of our Board. |
The compensation received during 2025 by each non-employee director is set forth below:
|
Name |
Fees Earned or Paid in Cash |
Stock Awards(1) |
Total |
|||||||||
|
Paul E. Freiman, Ph.D. |
$ | 77,500 | $ | 34,200 | $ | 111,700 | ||||||
|
Swan Sit |
$ | 58,500 | $ | 34,200 | $ | 92,700 | ||||||
|
Yenyou (Jeff) Zheng, Ph.D. |
$ | 73,000 | $ | 34,200 | $ | 107,700 | ||||||
|
Julie Garlikov (2) |
$ | 80,000 | $ | - | $ | 80,000 | ||||||
|
Mijia (Bob) Wu, M.B.A. (2) |
$ | 80,000 | $ | - | $ | 80,000 | ||||||
|
Sean Zheng (2) |
$ | 80,000 | $ | - | $ | 80,000 | ||||||
|
(1) |
These amounts represent the aggregate grant date fair value of $5.70 per share for the 6,000 RSUs granted to each director as part of his or her annual fee in fiscal year 2025. The assumptions used to determine the value of RSUs are described in Note 11 “Stock-Based Compensation” to the Company’s consolidated financial statements in this annual report. At December 31, 2025, each of Dr. Freiman, Ms. Sit, and Dr. Jeff Zheng had an aggregate of 6,000 unvested RSUs. At December 31, 2025, the aggregate number of vested stock options for each of the non-employee directors who served in 2025 and held stock options was as follows (with no such director holding any unvested stock options at such time): Dr. Freiman, 22; Ms. Sit, 4; Dr. Jeff Zheng, 4; and Mr. Wu, 16. |
|
(2) |
Ms. Garlikov and Messrs. Wu and Zheng each served as members of the Company’s Board of Directors until October 16, 2025. |
Pay-Versus-Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, the Company is providing the following disclosure about the relationship between executive pay actually paid (as defined by SEC rules) and the Company’s financial performance.
Pay-Versus-Performance Table
In accordance with SEC rules, the table below sets forth the following information for the fiscal years ended December 31, 2025, 2024 and 2023: (i) the total compensation reported for the Company’s principal executive officer (“PEO”) and the non-PEO named executive officers (“NEOs”) in the “Summary Compensation Table” included in this report and, with respect to fiscal year 2023, the “Summary Compensation Table” included in the Company’s Proxy Statement filed with the SEC on May 18, 2023; (ii) the compensation “actually paid” to the PEO and the non-PEO NEOs, calculated in accordance with SEC rules and as described in the footnotes below; (iii) the Company’s total stockholder return (“TSR”); and (iv) the Company’s net income (loss). The amounts reported in the “Summary Compensation Table” and the compensation actually paid amounts do not reflect the actual amounts of compensation earned by, or paid to, our NEOs during the applicable years, but rather are amounts determined in accordance with Item 402(v) of Regulation S-K.
|
Fiscal Year |
Summary Compensation Table Total for PEO |
Compensation “Actually Paid” to PEO(1) |
Average Summary Compensation Table Total for Non-PEO Named Executive Officers(2) |
Average Compensation “Actually Paid” Total for Non PEO Named Executive Officers(3) |
Value of Initial Fixed $100 Investment based on NBY TSR(4) |
Net Income (in thousands)(5) |
||||||||||||||||||
|
2025 |
$ | 1,249,600 | $ | 1,249,600 | $ | 436,797 | $ | 436,797 | $ | 9.44 | $ | (22,141 | ) | |||||||||||
|
2024 |
$ | 365,177 | $ | 366,461 | $ | 220,196 | $ | 220,295 | $ | 0.88 | $ | (7,223 | ) | |||||||||||
|
2023 |
$ | 364,146 | $ | 358,857 | $ | 190,840 | $ | 189,734 | $ | 10.46 | $ | (9,640 | ) | |||||||||||
|
(1) |
Compensation actually paid (as defined by SEC rules) to the CEO for each period presented reflects the amount set forth in column (1), adjusted as set forth below in the Reconciliation of Compensation Actually Paid Table. David Lazar served as the Company’s Chief Executive Officer from August 19, 2025 until October 16, 2025 but did not receive any compensation for such service. |
|
(2) |
Mr. Law, our Chief Financial Officer, was the Company’s only non-CEO named executive officer (“NEO”) for fiscal years 2025 and 2024. Mr. Law, Dr. Kunin, our former Chief Product Officer, and Mr. Jones, our former Chief Financial Officer, were the Company’s non-CEO NEOs in fiscal year 2023. Dr. Kunin resigned effective November 5, 2023 and Mr. Jones resigned effective February 15, 2023. Amounts in 2023 for the NEOs other than the CEO are weighted averages based on the number of days the applicable NEOs served. |
|
(3) |
Average compensation actually paid (as defined by SEC rules) to the Company’s NEOs (except the CEO) for each period presented reflects the amount set forth in column (3), adjusted as set forth below in the Reconciliation of Compensation Actually Paid Table. |
|
(4) |
Reflects the TSR of a $100 investment in the Company from the beginning of fiscal year 2023 through each of the fiscal years ended December 31, 2025, 2024 and 2023. The Company’s TSR includes share price appreciation or depreciation and assumes reinvestment of dividends, including the Company’s one-time special cash dividend paid in 2025. |
|
(5) |
Reflects “Net loss” as reported in the Company’s Consolidated Statements of Operations included in this report and, with respect to fiscal year 2023, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Reconciliation of Compensation Actually Paid Table
The following table details the applicable adjustments that were made to determine compensation actually paid (amounts are weighted-averages for the NEOs other than the CEO in 2023 based on the number of days served):
|
Fiscal Year |
Reported Summary ($) |
Deduct: Reported ($)(a) |
Add: Equity award adjustments |
Deduct: Reported present value benefits ($)(c) |
Add: Pension adjustments |
Compensation |
||||||||||||||||||
|
CEO |
||||||||||||||||||||||||
|
2025 |
$ | 1,249,600 | $ | - | $ | - | $ | - | $ | - | $ | 1,249,600 | ||||||||||||
|
2024 |
$ | 365,177 | $ | - | $ | 1,284 | $ | - | $ | - | $ | 366,461 | ||||||||||||
|
2023 |
$ | 364,146 | $ | - | $ | (5,289 | ) | $ | - | $ | - | $ | 358,857 | |||||||||||
|
NEOs (except the Chief Executive Officer) |
||||||||||||||||||||||||
|
2025 |
$ | 436,797 | $ | - | $ | - | $ | - | $ | - | $ | 436,797 | ||||||||||||
|
2024 |
$ | 220,196 | $ | - | $ | 99 | $ | - | $ | - | $ | 220,295 | ||||||||||||
|
2023 |
$ | 190,840 | $ | - | $ | (1,106 | ) | $ | - | $ | - | $ | 189,734 | |||||||||||
|
(a) |
As provided in the “Summary Compensation Table” provided in this report, as relates to the fiscal year ended December 31, 2023, the 2023 Proxy Statement. No equity awards were granted to any NEO in the fiscal years presented. |
|
(b) |
The equity award adjustments for each applicable period include the subtraction of the following (amounts are weighted-averages for the NEOs other than the CEO in 2023 and 2022 based on the number of days served): |
|
Fiscal Year |
Period-end fair ($) |
Changes in value ($) |
Fair value as ($) |
Change in value ($) |
Fair value at the end of the prior period of equity awards that failed to meet vesting conditions in the period ($) |
Value of dividends or other earnings paid on stock or option awards not otherwise reflected in fair value or total compensation ($) |
Total equity award adjustments ($) |
|||||||||||||||||||||
|
CEO |
||||||||||||||||||||||||||||
|
2025 |
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
|
2024 |
$ | - | $ | - | $ | - | $ | 1,284 | $ | - | $ | - | $ | 1,284 | ||||||||||||||
|
2023 |
$ | - | $ | (2,974 | ) | $ | - | $ | (2,315 | ) | $ | - | $ | - | $ | (5,289 | ) | |||||||||||
|
NEOs (except the Chief Executive Officer) |
||||||||||||||||||||||||||||
|
2025 |
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
|
2024 |
$ | - | $ | - | $ | - | $ | 99 | $ | - | $ | - | $ | 99 | ||||||||||||||
|
2023 |
$ | - | $ | (83 | ) | $ | - | $ | (1,023 | ) | $ | - | $ | - | $ | (1,106 | ) | |||||||||||
|
(c) |
In the periods presented and consistent with the “Summary Compensation Table” provided in this report and, as relates to the fiscal year ended December 31, 2023, the 2023 Proxy Statement, the Company did not have: (i) a change in the actuarial present value of the accumulated benefit under any defined benefit or actuarial pension plans or (ii) any service cost or prior service cost related to any defined benefit or actuarial pension plans. |
Pay-Versus-Performance Relationship
The Company believes the table above shows the alignment between compensation actually paid to the CEO and our other non-CEO NEOs and the Company’s performance. The charts below show, for the past three years, the relationship of the CEO and the other non-CEO NEOs compensation “actually paid” and (i) the Company’s TSR and (ii) the Company’s net loss.
Policies and Practices for Granting Equity Awards
We do not currently grant new awards of stock options, stock appreciation rights or similar option-like equity awards. Accordingly, we have no specific policy or practice on the timing of grants of such awards in relation to the disclosure of material nonpublic information.