Subsequent Events |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events Resignation of Peter D. Holt
Effective October 10, 2024, Peter D. Holt resigned as Chief Executive Officer of the Company and as a member of the Company's Board of Directors. In connection with Mr. Holt’s resignation, as of October 10, 2024, the Company and Mr. Holt entered into a confidential separation agreement and release of claims. In Q4 2024, the Company recorded an accrual of $0.6 million for payments that will be made as a result of the separation agreement through September 2025.
Appointment of Sanjiv Razdan as President and Chief Executive Officer
Effective October 14, 2024, the Board of Directors of the Company appointed Sanjiv Razdan as President and Chief Executive Officer of the Company and as a member of the Company's Board of Directors.
In connection with Mr. Razdan’s appointment, the Company entered into an employment agreement with Mr. Razdan, effective as of October 14, 2024 (the “Employment Agreement”). Under the terms of the Employment Agreement, Mr. Razdan is entitled to an annual base salary of $550,000 (subject to annual review by the Company’s Board of Directors or a committee thereof). Mr. Razdan is also eligible to participate in the Company’s executive compensation programs, to receive a discretionary annual bonus as determined by the Company’s Board of Directors or a committee thereof, and to receive annual and periodic stock-based compensation awards as determined by the Company’s Board of Directors or a committee thereof. Mr. Razdan is entitled to receive other standard benefits, participation in any group insurance, pension, retirement, vacation, expense reimbursement, relocation program (as applicable), and other plans, programs, and benefits approved by the Company’s Board of Directors or a committee thereof and made available from time to time to other executive employees of the Company, and certain insurance benefits.
Mr. Razdan is entitled to a monthly travel and living allowance of $2,000 and to severance benefits upon certain termination events.
On October 14, 2024, the Company also entered into a Stock Option Agreement and a Restricted Stock Award Agreement with Mr. Razdan providing awards of Stock Options and Restricted Stock Award with an aggregate value of $800,000 on the date of grant. The awards qualify as “inducement grants” under rules of the Nasdaq stock exchange and are in addition to future annual grants that Mr. Razdan may receive under the terms of the Employment Agreement and the Company’s existing 2024 Incentive Stock Plan.
Ongoing litigation
On October 22, 2024, the Company entered into mediation on ongoing litigation related to a medical injury claim filed by Claimant on September 5, 2023. Although the Company intends to defend the claims vigorously, the Claimant and the Company agreed to participate in non-binding mediation of their dispute before a neutral mediator. At this time, the mediation process between the Claimants and the Company is ongoing with a range of possible settlement outcomes between $0.9 million and $6.0 million. As of September 30, 2024, the Company has accrued $0.9 million as an estimate of settlement costs related to the matter. The expense from the accrual is fully offset by a receivable recorded as the estimated settlement is within the Company's insurance plan.
Repayment of related party accounts payable
On October 31, 2024, the Company paid down the $375,000 in accounts payable due to related parties (See Note 13, Related Party Transactions) on its condensed consolidated balance sheet as of September 30, 2024. The payable is a result of professional service costs incurred by the Company and initially paid by Mr. Gramm during the confidential chief executive search.
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