Polomar Health Services, Inc 10-Q for FY2026 Q2
Polomar Health Services, Inc. (PMHS)
About this 10-Q
Polomar Health Services, Inc filed this 10-Q on August 14, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.53M
- up 27847.1% from $5470 a year earlier
- Net income
- $200.36K
- compared with a net loss of $605.56K a year earlier
- Diluted EPS
- $0.00
- compared with -$0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
| Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For
the quarterly period ended
| Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from _____ to _______
Commission
File Number:
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☐ Large accelerated filer | ☐ Accelerated filer |
| ☒
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: common shares as of August 10, 2026.
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | ||
| Item 1: | Financial Statements (Unaudited) | F-1 – F-17 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 8 |
| Item 4: | Controls and Procedures | 8 |
| PART II – OTHER INFORMATION | 10 | |
| Item 1: | Legal Proceedings | 10 |
| Item 1A: | Risk Factors | 10 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
| Item 3: | Defaults Upon Senior Securities | 10 |
| Item 4: | 10 | |
| Item 5: | Other Information | 10 |
| Item 6: | Exhibits | 10 |
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Our condensed unaudited financial statements included in this Form 10-Q are as follows:
| 3 |
POLOMAR HEALTH SERVICES, INC.
BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease - right-of-use asset | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities and total liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Unearned revenue | ||||||||
| Promissory notes – related parties | ||||||||
| Operating lease - current liability | ||||||||
| Other current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitment and Contingencies Note 8 | ||||||||
| Stockholders’ deficit | ||||||||
| Series A convertible preferred stock, par value $; shares authorized; and issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. | ||||||||
| Common stock; $ par value; shares authorized; and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| F-1 |
POLOMAR HEALTH SERVICES, INC.
STATEMENTS OF OPERATIONS
Unaudited
| For The Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||||||||||
| Other expense | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||
| Dividend on Series A convertible preferred stock | ( | ) | ( | ) | ||||||||||||
| Net income (loss) attributable to common stockholders | ( | ) | ( | ) | ||||||||||||
| Net income (loss) per common share: basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average common shares outstanding – basic | ||||||||||||||||
| Weighted average common shares outstanding – diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| F-2 |
POLOMAR HEALTH SERVICES, INC.
STATEMENTS OF STOCKHOLDERS’ DEFICI
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
| Shares | Amount | Shares | Amount |
Capital | Deficit | Deficit | ||||||||||||||||||||||
| Series A Convertible Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount |
Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock-based compensation that was previously accrued for | - | |||||||||||||||||||||||||||
| Issuance of Series A convertible preferred stock related to dividend | - | ( | ) | |||||||||||||||||||||||||
| Dividend paid and accrued | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Series A Convertible Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock-based compensation that was previously accrued for | - | |||||||||||||||||||||||||||
| Issuance of Series A convertible preferred stock related to dividend | - | ( | ) | |||||||||||||||||||||||||
| Dividend paid and accrued | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
POLOMAR HEALTH SERVICES, INC.
STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
(Unaudited)
| Series A Convertible Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Conversion of Series A convertible preferred stock | - | |||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| Series
A Convertible Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Conversion of Series A preferred stock | - | |||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| F-3 |
POLOMAR HEALTH SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| June 30, 2026 | June 30, 2025 | |||||||
For The Six Months Ended, | ||||||||
| June 30, 2026 | June 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Unearned revenue | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Net cash provided by (used) in operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from related party | ||||||||
| Payments on promissory notes – related parties | ( | ) | ||||||
| Proceeds from promissory notes – related party | ||||||||
| Dividend paid | ( | ) | ||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Stock-based compensation that was previously accrued for | $ | $ | ||||||
| Paid-in-kind dividend | $ | $ | ||||||
| Series A Convertible preferred stock dividend | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| F-4 |
POLOMAR HEALTH SERVICES,
INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2026
NOTE 1 – NATURE AND DESCRIPTION OF BUSINESS
Polomar Health Services, Inc. (the “Company”), operates Polomar Specialty Pharmacy, LLC, a State of Florida licensed retail compounding pharmacy, located in Palm Harbor, FL, pursuant to license # PH35196 (“Polomar Pharmacy”). Polomar Pharmacy is also licensed as a Special Sterile Compounding Pharmacy, permit #PH35277, which authorizes the licensed entity to dispense injectable and other sterile compounds (eye drops, infused therapeutics) upon receipt of a valid prescription. The compounding facility operates pursuant to guidelines established under Sec. 503A “Compounding Pharmacy” of the Federal Food, Drug and Cosmetic Act. Section 503A authorizes the licensed entity to manufacture compounded drugs and fulfill prescriptions provided to it by state licensed physicians and other licensed healthcare professionals including physician assistants and nurse practitioners. The Company is presently licensed and authorized to fulfill and deliver compounded prescribed medications in 28 states. Polomar Pharmacy is actively seeking licenses and authorization in other states and expects to be able to provide prescription medications in additional U.S. states during the third quarter of 2026.
Corporate History and Capital Structure
The Company was incorporated in the State of Nevada on September 14, 2000, under the name of Telemax Communications. On July 24, 2003, the name was changed to HealthMed Services, Ltd. On September 2, 2022, the name was changed to Trustfeed Corp. As a result of a change in ownership of the Company in 2021, the Company became a technology company with access to a global database of information to provide consumers with trusted information about the companies they do business with (the “Pre-Existing Business”).
Polomar Pharmacy Merger
On June 28, 2024, the Company, Polomar Acquisition, L.L.C., a Florida limited liability company, and wholly owned subsidiary of the Company (“Polomar Acquisition”), and Polomar Pharmacy entered into an Agreement and Plan of Merger and Reorganization (the “Pharmacy Merger Agreement”), pursuant to which, subject to the terms and conditions of the Pharmacy Merger Agreement, Polomar Acquisition merged with and into Polomar Pharmacy, with Polomar Pharmacy continuing as the surviving company and a wholly owned subsidiary of the Company (the “Polomar Pharmacy Merger”). The Polomar Pharmacy Merger was completed on September 30, 2024.
The Polomar Pharmacy Merger is considered a “reverse recapitalization” as the historical financial statements of the Company, the accounting acquirer, have been substituted for the historical financial statements of Trustfeed. As a result of the Polomar Pharmacy Merger, the Company ceased commercializing the Pre-Existing Business.
On October 9, 2024, pursuant to the terms of the Pharmacy Merger Agreement, CWR returned shares of Common Stock for cancellation. Also, in October 2024, pursuant to the terms of the Pharmacy Merger Agreement, the Company issued an aggregate of (pre-split) shares of its Common Stock to the former Polomar Pharmacy members.
Prior to the September 30, 2024, merger between the Company and Polomar Pharmacy, Polomar Pharmacy’s business was concentrated on providing compounded dermatological prescription medications for topical delivery. Polomar Pharmacy’s exclusive dermatological formulations, co-developed by a board-certified dermatologist for the treatment of acne, alopecia areata, basal cell carcinoma, Becker’s nevus, vitiligo, and other common skin conditions, were primarily fulfilled on behalf of local dermatologists with limited interstate prescription delivery. In early 2024, Polomar Pharmacy commenced the construction of clean rooms to allow for the dispensing of sterile compounded drugs. Polomar Pharmacy received its Special Sterile Compounding Permit in August of 2024. Polomar Pharmacy continued to primarily fulfill prescriptions for compounded dermatological drugs and has, on a limited basis, fulfilled prescriptions for sterile compounded GLP-1 agonists for subcutaneous injection. On September 26, 2025, the Company executed a one-year non-exclusive pharmacy services agreement with CareValidate, Inc. (“CareValidate”) to fulfill GLP-1 agonist prescriptions for CareValidate’s network of on-line clinics. Polomar began fulfilling prescriptions for CareValidate on October 6, 2025, and we have received and expect to continue to receive revenue from this customer.
| F-5 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the period presented have been reflected herein.
It is management’s opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statement’s presentation. The results for the interim period are not necessarily indicative of the results expected for the year.
Consolidation
The financial statements include the
accounts of the Company and its
Going Concern and Liquidly
Liquidity refers to the Company’s ability to meet anticipated cash demands, including funding operations, servicing contractual obligations, and covering other routine business expenditures. Our primary cash outflows include operating costs and general business expenditures. The main source of our liquidity continues to be cash inflows generated from operational performance.
Under Accounting Standards Codification “ASC”, ASC 205-40, Presentation of Financial Statements, Going Concern, management is required to evaluate at each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued, and, if substantial doubt is raised, whether our plans to mitigate those conditions, when considered in the aggregate, alleviate that doubt.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Management
evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the
financial statements are issued and determined that substantial doubt exists about the
Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on
the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient income and has
historically depended on notes or equity to fund operations. As of June 30, 2026, the Company has an
accumulated deficit of $
Management’s plans are to raise additional capital, explore potential business opportunities and to increase revenue. However, there is no assurance that the Company will raise sufficient capital to continue operations or be on acceptable terms. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Use Of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Cash and Cash Equivalents.
Cash
consists of deposits maintained at a single financial institution. The Company did
The Company’s cash is maintained with a well-established financial institution. Management believes the credit risk associated with these deposits is minimal and has not experienced any losses related to these accounts.
| F-6 |
Inventory
Inventory consists primarily of finished goods, work in process, and raw materials and is stated at the lower cost or net realizable value. Cost is determined using the weighted-average cost method, if applicable) management periodically reviews inventory for excess, obsolete, or slow-moving items and records reserves to reduce the carrying value of such inventory to its estimated net realizable value. Such estimates are based on historical usage, future demand, market conditions, and other factors. As of June 30, 2026 and December 31, 2025, there is no inventory reserve. As of June 30, 2026 and December 31, 2025, the Company’s inventory consists of raw materials.
The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. In calculating net income (loss) attributable to common stockholders, dividends declared or accrued on the Series A convertible preferred stock (the “Series A Preferred”), including dividends payable in kind “PIK”, are deducted from net income (loss) attributable to the Company’s common stockholders.
PIK dividends represent dividends declared on the Company’s preferred stock that are satisfied through the issuance of additional shares of the Series A Preferred rather than through the payment of cash. PIK dividends are included in the calculation of income (loss) attributable to common stockholders in the period in which they are declared or accrued for, consistent with the terms of the Series A Preferred.
Accordingly, accrued cash dividends and PIK dividends reduce income (loss) available to common stockholders for purposes of calculating basic and diluted EPS, as applicable. PIK dividends do not represent a current-period cash outflow but increase the carrying amount and/or number of shares of the applicable preferred stock in accordance with the terms of the Series A Preferred.
Revenue Recognition
The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the ASC 606, Revenue From Contracts with Customers, which requires that five basic criteria be met before revenue can be recognized: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue from the sale of goods is recognized when all the following conditions are satisfied:
Revenue from the sales of goods is recognized when all the following conditions are satisfied:
| ● | Identification of the Contract: The Company identifies a contract with a customer when an agreement exists that creates enforceable rights and obligations for both parties. |
| ● | Identification of Performance Obligations: The Company identifies the distinct performance obligations within each contract. A performance obligation is a promise to transfer to the customer a distinct good or service (or a bundle of goods or services) that is separately identifiable from other promises in the contract. |
| F-7 |
| ● | Determination of Transaction Price: The transaction price is determined based on the consideration to which the company expects to be entitled in exchange for transferring goods to the customer. |
| ● | Allocation of Transaction Price: The transaction price is allocated to each performance obligation based on its standalone selling price. |
| ● | Recognition of Revenue: Revenue is recognized when control of the goods is transferred to the customer, which generally occurs at a point in time when the goods are shipped or delivered, and the customer obtains legal title. For contracts that include multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price. If the standalone selling price is not directly observable, management estimates it using appropriate valuation techniques, such as the adjusted market assessment, expected cost plus margin, or residual approach, depending on the nature of the performance obligation. |
Fair Value Measurements
The Company utilizes the fair value hierarchy to apply fair value measurements. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair values that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below:
Level 1: Quoted prices for identical assets or liabilities in active markets.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3: Valuations derived from techniques in which one or more significant inputs are unobservable.
As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.
The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized, or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement.
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximate the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements as June 30, 2026, and December 31, 2025.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. The income tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items recognized in the period in which they occur.
As of June 30, 2026 and December 31, 2025, the Company continued to maintain a full valuation allowance against its net deferred tax assets, as management concluded that it is more likely than not that these deferred tax assets will not be realized. The assessment of the need for a valuation allowance requires management to evaluate all available positive and negative evidence, including the Company’s history of operating results, cumulative losses in recent years, expectations of future taxable income, the reversal of existing temporary differences, and available tax planning strategies.
Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), a corporation that undergoes an “ownership change,” generally defined as a cumulative increase of more than 50 percentage points in the stock ownership of 5% shareholders within a rolling three-year period may have its ability to utilize pre-change net NOL carryforwards and certain other tax attributes significantly limited on an annual basis. The Company has not performed a Section 382 limitations analysis.
The
Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of June 30, 2026,
and December 31, 2025, the Company did
Segment Reporting
The Company operates as one reportable segment as a Plomar Specialty Pharmacy, LLC under ASC 280, Segment Reporting. The chief decision maker “CODM”, the Company’s Interim Chief Executive Officer, reviews financial information performance primarily using operating income (loss), which is consistent with the presentation in the Company’s consolidated statements of operations. The CODM monitors revenues and operating expenses by segment for purposes of strategic decision-making and resource allocation, including the evaluation of the timing and amount of future investment in, or development of, the Company’s products. The expense categories reviewed by the CODM are consistent with those presented in the consolidated statements of operations.
| F-8 |
Concentration
The
Company’s revenue is highly concentrated with a single customer located in the United States. This customer accounted for
As
of June 30, 2026, one customer accounted for
The Company relies on four primary vendors, providing the following services and purchases:
| ● | Shipping logistics | |
| ● | Product testing | |
| ● | For Active pharmaceutical ingredients. | |
| ● | Packaging |
Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures, primarily through expanded annual disclosures related to the rate reconciliation and income taxes paid. The amendments require entities to disclose additional information about specific categories of reconciling items and provide greater disaggregation of income taxes paid, including taxes paid to federal, state, and foreign jurisdictions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted the provisions of ASU 2023-09 for the year ended December 31, 2025. The adoption of this guidance did not have a material impact on the Company’s financial statements, other than the required additional income tax disclosures.
In July of 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Losses. This ASU update provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This ASU is effective for annual reporting periods beginning after December 15, 2025. The Company adopted this standard prospectively and the adoption did not have an impact on its unaudited condensed consolidated financial statements.
Recent Accounting Pronouncements
Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or are not believed by management to have a material impact on the Company’s present or future financial statement presentation or disclosures.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, for public business entities only. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 Income statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2025-01 requires PBEs to adopt the amendments of ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. Management is currently evaluating the effect of this pronouncement on its disclosures.
In December of 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements. This ASU consolidates required interim disclosures into a single, accessible list within ASC 270. This ASU applies to interim reporting periods within annual reporting periods beginning after December 15, 2027. Management is currently evaluating the effect of this pronouncement on its disclosures.
In December of 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU addresses issues to refine U.S. GAAP, including clarifying diluted EPS calculations during losses, refining derivative scope, correcting technical errors in financial statement descriptions, and amending share-based consideration payable to customers, diluted EPS and lease receivables. This ASU applies to fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Management is currently evaluating the effect of this pronouncement on its disclosures.
In January of 2026, the FASB issued ASU 2026-1, Equity (Topic 505) Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. This ASU addresses how an issuer should initially measure paid-in-kind (PIK) on equity-classified preferred stock. The amendments in this update require that PIK dividends in equity-classified preferred stock be initially measured on the PIK dividend rate stated in the Series A Preferred agreement. This ASU is effective for annual reporting periods beginning after December 15, 2026. The Company will adopt the provisions of this ASU beginning with annual report as of the period ending on December 31, 2026.
| F-9 |
NOTE 3 – RELATED PARTY TRANSACTIONS
Reprise Management, Inc.
On
August 13, 2024, as amended on November 8, 2024, Polomar Pharmacy entered into a Promissory Note and Loan Agreement with Reprise
Management, Inc. (“Reprise”), as the lender (the “Reprise Note”). Pursuant to the Reprise Note, Reprise
agreed to loan Polomar Pharmacy up to $
CWR 1, LLC
On
August 16, 2024, the Company entered into a Promissory Note and Loan Agreement (the “CWR Note”), as the borrower, with
CWR as the lender. Pursuant to the CWR Note, CWR agreed to loan the Company up
to $
On July 21, 2025, the Company entered into a new Promissory Note and Loan Agreement with CWR (“CWR Note II”) with the following terms.
| ● | The
Company may draw up to $ | |
| ● | The CWR Note II shall mature and be payable in full on or before October 31, 2025, or immediately upon other events as disclosed in the CWR Note II. | |
| ● | The
initial interest rate shall be |
On
September 17, 2025, the Company and CWR executed an amendment to the CWR Note II (the “CWR II First Amendment”). The CWR
II First Amendment increased the principal amount that the Company may draw upon by $
The
Company drew a total of $
| F-10 |
Profesco Holdings, LLC
On July 28, 2025, the Company entered into a Promissory Note and Loan Agreement (the “Profesco Note”) with Profesco Holdings, LLC., a Michigan limited liability company (“Profesco Holdings”). Below is a summary of the terms.
| ● | The
Company may draw up to $ | |
| ● | The
Profesco Note matures and is payable in full on or before October 31, 2025, or immediately upon other events as disclosed in the
Profesco Note. The initial interest rate is |
On November 17, 2025, the Company and Profesco Holdings executed an amendment to the Profesco Note (the “Profesco First Amendment”). Below is a summary of terms.
| ● | The
Profesco First Amendment increased the principal amount that the Company may draw upon by $ | |
| ● | The
Profesco Additional Principal shall be subject to a 3% origination fee per draw. The annual interest rate to be charged on the Additional
Principal shall be | |
| ● | Any
remaining principal due and owning after January 1, 2026, shall be subject to an |
Mr. Tierney, the Company’s Interim Chief Executive Officer, of the Company is the sole member and manager of Profesco Holdings.
Other Related Party Transactions
In
January of 2026, Polomar Specialty Pharmacy, LLC (“PSP”) purchased
| F-11 |
NOTE 4 – STOCKHOLDERS’ DEFICIT
Common Stock
The Company is authorized to issue authorized shares of common stock with a par value of $ as of June 30, 2026, and 2025, respectively. The Company had and issued and outstanding shares of common stock as of June 30, 2026, and December 31, 2025, respectively. During the three and six months ended June 30, 2026, the Company issued and shares of common stock for at $ per share and for $ at $ per shares, respectively. The issuance of these shares were for past services to the Board of Directors that was accrued as of December 31, 2025.
Preferred Stock
The Company has authorized shares of “blank check” preferred stock.
As of June 30, 2026, the Company has designated shares of Series A Preferred ($ par value) and has issued shares of the Series A Preferred. On May 15, 2026, the Company issued seven additional shares of Series A Convertible Preferred Stock to CWR 1, LLC valued at $ per share pursuant to the Series A Preferred designation in satisfaction of a portion of the dividends due CWR and four additional shares of Series A convertible preferred stock to Reprise Management, Inc. valued at $ per share pursuant to the Series A Preferred designation in satisfaction of a portion of the dividends due Reprise.
On
May 15, 2026, pursuant to the terms of the Series A Preferred Designation the Company issued dividends to CWR 1, LLC
consisting of $
As of June 30, 2026 and December 31, 2025, the Series A Preferred is convertible into and shares of common stock, respectively.
2024 Equity Incentive Plan
On August 8, 2024, the Company’s stockholders, by written consent of the holders of a majority of the outstanding voting stock, approved the 2024 Equity and Incentive Compensation Plan (the “2024 Plan”). The 2024 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based awards to employees, officers, directors, consultants and other service providers.
The
Company initially reserved
shares of common stock for issuance under the 2024 Plan, subject to adjustment for stock splits, stock dividends, recapitalizations
and similar transactions. In addition, the number of shares authorized for issuance under the 2024 Plan is subject to an annual
automatic increase on January 1 of each year equal to 10% of the Company’s outstanding common shares, unless the Board of
Directors approves a lesser increase, or determines that no increase will be made. On July 1, 2026, the
Board amended and restated the plan to reduce the annual automatic increase from
SCHEDULE OF LOSS PER SHARE BASIC AND DILUTED
| For The Three Months Ended June 30, | 2026 | 2025 | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Dividend on Series A Preferred | ( | ) | ||||||
| Net income (loss) attributable for common shareholders | $ | $ | ( | ) | ||||
| Weighted average shares outstanding – basic and diluted | ||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | |||||
| For The Six Months Ended June 30, | 2026 | 2025 | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Dividend on Series A Preferred | ( | ) | ||||||
| Net income (loss) attributable for common shareholders | ( | ) | ||||||
| Weighted average shares outstanding – basic and diluted | ||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | |||||
| The Company does not have any dilutive shares. | ||||||||
| F-12 |
NOTE 6 – REVENUE
The following table presents the Company’s revenue disaggregated by type for the three and six months ended June 30, 2026 and June 30, 2025:
SCHEDULE OF DISAGGREGATED OF REVENUE
| 2026 | 2025 | |||||||
| Three Months Ended | ||||||||
June 30, 2026 | June 30, 2025 | |||||||
| Prescription fulfillment | $ | $ | ||||||
| Other | ||||||||
| Total | $ | $ | ||||||
| 2026 | 2025 | |||||||
| Six Months Ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| Prescription fulfillment | $ | $ | ||||||
| Other | ||||||||
| Total | $ | $ | ||||||
| Revenue | $ | $ | ||||||
NOTE 7 – LEASE
The
Company has a non-cancellable operating lease for its manufacturing facility in Palm Harbor, Florida which qualifies for capitalization
under ASC 842 Leases. As of June 30, 2026, Palm Harbor, Florida lease is on a month-to-month lease. As of June 30, 2026, and December 31, 2025, the net right-of-use asset “ROU” recorded
under the operating lease was $ and $
| F-13 |
The Company evaluates contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available. Lease costs for the three months and six months ended June 30, 2026 and June 30, 2025, included in the condensed consolidated statements of operations, are as follows:
SCHEDULE OF LEASE COST
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Lease cost | $ | $ | $ | $ | ||||||||||||
The following represents the activity for the right of use asset:
SCHEDULE OF LEASE ACTIVITY FOR RIGHT OF USE ASSET
| June 30, 2026 | December 31, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Amortization charge for the period | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
| Other information relating to the operating lease is as follows: | ||||||||
| Weighted average remaining lease term in years | ||||||||
| Weighed average discount rate | % | % | ||||||
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Employment Agreement
On May 12, 2026, the Company and Terrence M. Tierney,
the Company’s Chief Executive Officer, executed a First Amendment to Mr. Tierney’s Executive Employment Agreement dated September 15,
2025 (the “First Amendment”). The First Amendment reduced Mr. Tierney’s base salary retroactive to his November 1, 2025 start
date to $
The First Amendment also amended and restated the option provisions of the employment agreement in their entirety. The previously disclosed option to purchase shares of common stock at an exercise price of $ per share was never granted or issued and will not be granted, and Mr. Tierney has confirmed in writing that he relinquishes any right to it. In its place, the First Amendment provides for an option to purchase shares at an exercise price of $ per share, and two additional options to purchase shares each with exercise prices to be determined by formula based on the trailing average closing price of the common stock preceding the applicable grant date, in each case with a ten-year term and vesting % on grant with the remainder vesting in equal monthly installments thereafter.
As of June 30, 2026, no options had been granted or issued to Mr. Tierney under the employment agreement, as amended, no award agreements evidencing such options had been executed, and no stock-based compensation expense had been recognized with respect thereto, see Note 9, Subsequent Events.
The foregoing description is qualified in its entirety by reference to the First Amendment, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed May 15, 2026.
License Agreement
On
June 29, 2024, the Company entered into a Know How and Patent License Agreement with Pinata Holdings, Inc. (“Pinata”),
an affiliate of CWR, as restated and amended on January 9, 2025 (the “Agreement”). The Agreement granted the Company a
worldwide, non-exclusive, non-transferable license to certain patent-pending intellectual property and know-how related to the
delivery of products containing metformin, eletriptan, sumatriptan, semaglutide, liraglutide, and sildenafil, in exchange for
royalties of
| F-14 |
License Agreement Valuation
The
Company utilized the income approach to value the intellectual property rights licensed from Pinata. The Company, based upon
contractual obligations and sales projections provided to us by ForHumanity Health, Inc. (see below), projected annual gross revenues
through December 31, 2029. After deducting contractual royalties due to Pinata and cost of goods sold we determined that the license
had a net present value of $
We have experienced significant delays in bringing the licensed products to market including delays in sourcing active pharmaceutical ingredients, particularly eletriptan, manufacturing, completing required stability and sterility testing, and delays in conducting and completing clinical trials. As a result of these delays and other challenges in marketing products utilizing the IP Rights we and Pinata mutually agreed to terminate the license agreement effective June 12, 2026. Additionally, our former marketing partner, ForHumanity Health, Inc. (“FHH”) expressed concerns regarding efficacy of the inhaled sildenafil product and elected not to pursue an agreement to market the metformin gummy. As a result of these uncertainties and other market conditions we elected to accelerate the amortization of our intangible assets.
ForHumanity Agreement
On March 11, 2025, Polomar executed a Product Fulfillment and Distribution Agreement, effective on March 12, 2025, as amended on March 17, 2025, and Amended and Restated on August 19, 2025, and as amended on September 23, 2025, and December 8, 2025, with ForHumanity Health, Inc., a Delaware corporation (“FHH”) and Island Group 40, LLC (“IG4”), (collectively, the “ForHumanity Agreement”).
The ForHumanity Agreement allows FHH to exclusively market (through April 30, 2026), Polomar’s previously licensed, patent pending, inhalable sildenafil, marketed as VigorAir™. While sildenafil and eletriptan have been approved by the FDA for prescription use in an oral form and both medications are generally regarded as safe, the FDA has not approved our inhalable compounded formulation. Pursuant to the ForHumanity Agreement, Polomar shall be solely responsible for fulfilling valid prescriptions for the above-referenced medications through Polomar Specialty Pharmacy. IG4 provides account management services on behalf of Polomar.
The ForHumanity Agreement incorporates the following material terms:
| ● | The license is for an initial term of forty-two months and may be automatically renewed for additional terms provided FHH meets certain revenue commitments prior to the end of the initial term. | |
| ● | In
exchange for a guaranteed payment of $ |
| F-15 |
| ● | FHH launched test marketing of VigorAir in November 2025. In December 2025 the Company, FHH and Altanine, Inc., the parent of Pinata, Inc. sponsored additional clinical trials of our inhaled sildenafil. Preliminary trial results were received by the Company on February 12, 2026, and complete results of the clinical trial were received on February 28, 2026. | |
| ● | As
of the date of this filing of the Company’s Interim Financial Statement on Form 10-Q, we have been advised by FHH that they have suspended sales of VigorAir, their branded version of our licensed inhalable
sildenafil product. The Parties had been engaged in ongoing discussions to resolve issues regarding product manufacturing, testing
delays, marketing challenges and delays associated with ongoing clinical trials. The Company granted FHH forbearance on the $
On
April 23, 2026, the Company received a letter from counsel representing FHH alleging, inter
alia, that the Company made intentional false representations and fraudulent misrepresentations that FHH relied upon to enter
into the March 12, 2025, Product Fulfillment and Distribution Agreement (“Agreement”) between the Company and FHH. The
letter provides notice to the Company of FHH’s intention to terminate and rescind the Agreement. FHH additionally alleges that
it has suffered damages in excess of $
On
June 12, 2026, the Company notified FHH that they were in breach of the ForHumanity Agreement for failure to remit the $ |
CareValidate Agreement
On September 23, 2025, the Company executed a one-year Pharmacy Services and Compounding Agreement (“Services Agreement”) with CareValidate Incorporated (“CareValidate”). The agreement provides for the Company’s wholly owned subsidiary, Polomar Specialty Pharmacy, LLC (“Polomar”) to fill prescriptions for compounded GLP-1 agonists on behalf of CareValidate’s telehealth networks. Polomar began fulfilling prescriptions pursuant to the terms of the Services Agreement on October 6, 2025. CareValidate is Polomar’s primary customer.
Litigation
The Company may be involved from time to time in legal proceedings and claims arising in the ordinary course of business. The Company records a liability for loss contingencies when it is probable and reasonably estimable,
The Company received a demand letter from FHH relating to matters arising from prior business dealings, to which the Company responded. Since that time, there has been no further communication between the parties. No complaint has been filed, and the Company is not a defendant in any proceeding relating to this matter Based on the information currently available, management has concluded that the likelihood of a loss is remote and, if a loss were to occur, the amount cannot presently be estimated. Accordingly, no liability has been recorded in the accompanying financial statements as of June 30, 2026. The Company will continue to monitor this matter and will reassess its conclusion, and record a liability if warranted, if new information becomes available or if the matter progresses to formal legal proceedings.
| F-16 |
NOTE 9 – SUBSEQUENT EVENTS
The Company has evaluated events and transactions occurring after June 30, 2026, through (the date these financial statements were issued), and has identified the following matters requiring disclosure. Unless otherwise noted, there are non-recognized subsequent events under ASC 855-10 that do not adjust amounts for the financial statements but are material enough to warrant disclosure.
On July 1, 2026, the Company granted an option to purchase shares of common stock at an exercise price of $ per share, the fair market value on the grant date.
Corporate Governance
Effective July 1, 2026, David Spiegel and Mr. Tierney resigned from the Company’s Board of Directors. Mr. Tierney continues to serve as President and Interim Chief Executive Officer. The Board was expanded from one to five directors with the appointments of George Hornig, Alexandra Peterson, Gabrielle Toledano, and George Caruolo, while Gabriel Del Virginia continued as a director.
The Board also, appointed George Caruolo as Lead Independent Director, and established a Special Committee of independent directors to review and make recommendations regarding potential related-party acquisition transactions.
Officer Appointments
Effective July 1, 2026, George Hornig was appointed Executive Chairman and Chair of the Board, Mr. Tierney was appointed Interim Chief Executive Officer and principal executive officer, and Timothy M. Papp was appointed Secretary and General Counsel.
Effective July 15, 2026, Douglas Beck was appointed Chief Financial Officer and Treasurer and now serves as the Company’s principal financial officer and principal accounting officer.
2024 Equity Incentive Plan
On July 1, 2026, the Board amended and restated the Company’s equity incentive plan, which was renamed the Polomar Health Services s, Inc. 2026 Equity and Incentive Compensation Plan. The amendment, among other changes, reduced the annual evergreen share reserve increase from 10% to 3% of outstanding common stock, effective beginning January 1, 2027. All other material terms of the plan remain unchanged.
On July 1, 2026, Mr. Tierney was issued shares of common stock to fulfill stock compensation provisions of his employment agreement.
Lease
On
August 1, 2026, the Company signed a two-year
office lease in New York City, for a corporate office. The
monthly rent is approximately $
| F-17 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements
This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. These risks include, by way of example and not in limitation:
| ● | the uncertainty of profitability based upon our history of losses; | |
| ● | legislative or regulatory changes concerning platforms with data about companies; | |
| ● | risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern; | |
| ● | risks related to our operations and uncertainties related to our business plan and business strategy; | |
| ● | changes in economic conditions; | |
| ● | uncertainty with respect to intellectual property rights, protecting those rights and claims of infringement of other’s intellectual property; | |
| ● | competition; and | |
| ● | cybersecurity concerns. |
This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, including those contained in our Annual Report on Form 10-K for the year ended December 31, 2025, in each case under “Risk Factors,” and readers should not place undue reliance on our forward-looking statements. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
Company Overview
The Company Polomar Specialty Pharmacy, LLC, a Florida-licensed compounding pharmacy that provides both sterile and non-sterile compounded prescription medications and is currently authorized to serve patients in 28 states. Management’s strategic focus is to expand the pharmacy’s geographic reach and capitalize on growing demand for compounded GLP-1 weight-loss therapies and other specialized medications.
| 4 |
Since acquiring Polomar Pharmacy in September 2024, the Company has transitioned from a predominantly local dermatology-focused pharmacy to a national prescription fulfillment platform. This transformation has included obtaining sterile compounding capabilities, building relationships with telehealth providers, and expanding prescription fulfillment services for compounded GLP-1 medications. A key milestone was the execution of a pharmacy services agreement with CareValidate in 2025, which began generating revenue through prescription fulfillment for telehealth patients.
The Company continues to face operational and financial challenges associated with this transition, including increased compensation, and infrastructure costs, investments in regulatory compliance and product development, and the need for additional capital to support growth. While prior supply chain issues have largely been resolved, management remains focused on achieving greater operating scale and improving financial performance.
The Company also plans to launch SlimRx™, a telehealth platform focused on weight-loss treatment during the third quarter of 2026. SlimRx is expected to connect patients with licensed healthcare providers and generate prescription volume that will be fulfilled by Polomar Pharmacy, creating an integrated patient acquisition and fulfillment model.
Looking forward, management believes that growth will be driven by expanding pharmacy fulfillment services for telehealth providers, increasing prescription volumes through the SlimRx platform, obtaining additional state licenses, and adding new business-to-business customers. The Company’s ability to execute these initiatives and secure sufficient capital resources will be critical to achieving its long-term growth objectives.
Recent Events
Merger Agreement
On July 23, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization with Altanine Inc. (“Altanine”) and the Company’s wholly owned subsidiary, Polomar Merger Sub, Inc., pursuant to which Merger Sub would merge with and into Altanine, with Altanine surviving as a wholly owned subsidiary of the Company. The transaction contemplated that former Altanine stockholders would own approximately 80% of the Company’s outstanding common stock following the merger, with existing Company stockholders owning approximately 20%, subject to customary adjustments. The agreement also provided for the assumption of Altanine’s equity incentive plan and the conversion of outstanding Altanine equity awards into Company equity awards based on the exchange ratio. The merger agreement and the transactions contemplated by it were unanimously approved by the boards of directors of both companies.
The July 23, 2025 Agreement and Plan of Merger among Polomar, Polomar Merger Sub, Inc. and Altanine, Inc., as amended by the October 8, 2025 First Amendment (which changed the Preferred Exchange Ratio), was terminated in its entirety effective June 12, 2026 pursuant to a Termination Agreement and Mutual Release. The stated rationale is that the parties mutually agreed the merger was no longer in the best interests of the respective corporations and their shareholders. Termination was effected by mutual agreement under Section 7.1(a) of the original merger agreement or, to the extent that section is inapplicable, by mutual written consent under applicable law.
Corporate Governance
Effective July 1, 2026, David Spiegel and Mr. Tierney resigned from the Company’s Board of Directors. Mr. Tierney continues to serve as President and Interim Chief Executive Officer. The Board was expanded from one to five directors with the appointments of George Hornig, Alexandra Peterson, Gabrielle Toledano, and George Caruolo, while Gabriel Del Virginia continued as a director.
The Board also appointed George Caruolo as Lead Independent Director, and established a Special Committee of independent directors to review and make recommendations regarding potential related-party acquisition transactions.
Officer Appointments
Effective July 1, 2026, George Hornig was appointed Executive Chairman and Chair of the Board, Mr. Tierney was appointed Interim Chief Executive Officer and principal executive officer, and Timothy M. Papp was appointed Secretary and General Counsel.
Effective July 15, 2026, Douglas Beck was appointed Chief Financial Officer and Treasurer and now serves as the Company’s principal financial officer and principal accounting officer.
Equity Incentive Plan
On July 1, 2026, the Board amended and restated the Company’s equity incentive plan, which was renamed the Polomar Health Services, Inc. 2026 Equity and Incentive Compensation Plan. The amendment, among other changes, reduced the annual evergreen share reserve increase from 10% to 3% of outstanding common stock, effective beginning January 1, 2027. All other material terms of the plan remain unchanged.
| 5 |
Results of Operations for the Three Months ended June 30, 2026, and June 30, 2025
Revenue
Revenue increased by $1,523,235 to $1,528,705 for the three months ended June 30, 2026, from $5,470 for the three months ended June 30, 2025. The increase was attributable to the expansion of the Company’s commercial pharmacy operations and materially higher prescription fulfillment volume. The 2025 period reflected only limited commercial activity.
Cost of Goods Sold and Gross Profit
Cost of goods sold increased by $591,151 to $592,789 for the three months ended June 30, 2026, from $1,638 for the comparable 2025 period, consistent with the increase in prescription volume and product sales. Gross profit increased by $932,084 to $935,916 from $3,832. Gross margin was approximately 61.2% for the 2026 quarter. Because revenue in the 2025 quarter was nominal, the prior-year gross margin is not considered meaningful for comparative purposes.
General and Administrative Expenses
General and administrative expenses decreased by $295,538, or 53.1%, to $261,120 for the three months ended June 30, 2026, from $556,658 for the comparable 2025 period. The decrease was primarily attributable to a $249,625 reduction in depreciation and amortization because the 2025 quarter included amortization of legacy Trustfeed intangible assets that were fully amortized by year-end 2025; the absence of $109,231 of stock-based compensation recorded in the 2025 quarter; and a $23,540 decrease in professional fees. These decreases were partially offset by increases of approximately $30,373 in laboratory expenses, $20,474 in payroll and benefits, and $21,576 in insurance expense.
Sales and Marketing Expenses
Sales and marketing expenses increased by $445,912 to $456,419 for the three months ended June 30, 2026, from $10,507 for the comparable 2025 period. The increase was primarily attributable to $152,870 of commissions with no comparable expense for the three months ended June 30, 2025, a $236,561 increase in shipping and fulfillment costs and a $23,564 increase in information-technology and telemedicine hosting expenses. These increases were directly associated with the significant increase in prescription fulfillment and commercial activity and were partially offset by lower travel and licensing costs.
Other Expense
Interest expense decreased by $24,211 to $18,019 for the three months ended June 30, 2026, from $42,230 for the comparable 2025 period, primarily reflecting lower financing costs and changes in outstanding related-party borrowings.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Revenue
Revenue increased by $2,524,213 to $2,534,224 for the six months ended June 30, 2026, from $10,011 for the six months ended June 30, 2025. The increase was attributable to the expansion of the Company’s commercial pharmacy operations and substantially higher prescription fulfillment volume during 2026.
Cost of Goods Sold and Gross Profit
Cost of goods sold increased by $1,044,820 to $1,047,818 for the six months ended June 30, 2026, from $2,998 for the comparable 2025 period. Gross profit increased by $1,479,393 to $1,486,406 from $7,013. Gross margin was approximately 58.7% for the first six months of 2026. The 2025 gross margin is not considered meaningful because prior-year revenue was nominal.
General and Administrative Expenses
General and administrative expenses decreased by $448,434, or 46.9%, to $507,059 for the six months ended June 30, 2026, from $955,493 for the comparable 2025 period. The decrease was primarily attributable to a $499,250 reduction in depreciation and amortization because the 2025 period included amortization of legacy Trustfeed intangible assets that were fully amortized by year-end 2025; the absence of $109,231 of stock-based compensation recorded in the 2025 period; and a $60,147 decrease in professional fees. These decreases were partially offset by increases of approximately $46,729 in professional fees, $53,954 in registration and filing fees, $35,190 in payroll and benefits, $33,016 in laboratory expenses, $16,335 in insurance expense, $10,623 in production supplies, $9,363 in separately reported payroll taxes, $9,157 in transfer-agent fees.
| 6 |
Sales and Marketing Expenses
Sales and marketing expenses increased by $737,615 to $767,876 for the six months ended June 30, 2026, from $30,261 for the comparable 2025 period. The increase was primarily attributable to a $511,918 increase in shipping and fulfillment costs, $152,870 of commissions with no comparable expense in the prior-year period, a $44,199 increase in information-technology, $36,000 increase in royalties, and telemedicine hosting expenses and an $8,235 increase in travel. These increases were partially offset by a $15,607 decrease in state license and registration costs classified within sales and marketing in the 2025 supporting schedules. The overall increase principally reflects the costs associated with substantially higher prescription fulfillment and commercial activity.
Other Expense
Interest expense decreased by $47,186 to $36,490 for the six months ended June 30, 2026, from $83,676 for the comparable 2025 period, primarily reflecting lower financing costs and changes in outstanding related-party borrowings.
Cash Flows
Net cash provided by operating activities was $155,682 for the six months ended June 30, 2026, primarily reflecting net income of $174,981, non-cash depreciation and amortization of $18,976, and an increase in accounts payable and accrued expenses of $373,526. This was offset primarily from an increase in accounts receivable of $373,376, an increase in other current assets of $33,010 and an increase in inventory of $5,415.
Net cash used in operating activities was $233,357 for the six months ended June 30, 2025, primarily reflecting a net loss of $1,062,417. This use of cash was offset by $518,226 of non-cash depreciation and amortization, $109,231 of non-cash stock-based compensation, an increase in unearned revenue of $200,000, and accounts payable and accrued expenses of $7,222, partially offset by an increase in $5,618.
The Company did not have any cash provided by (used in) investing activities for the six months ended June 30, 2026 or June 30, 2025.
Net cash used in financing activities was $108,960 for the six months ended June 30, 2026, due to repayment of a related-party promissory note of $102,873 and a $6,087 payment for a dividend Net cash provided by financing activities was $231,844 for the six months ended June 30, 2025, due to $35,000 of proceeds from a related party and $196,844 of proceeds from a related-party promissory note.
Liquidity and Capital Resources
Liquidity refers to our ability to meet anticipated cash demands, including funding operations, servicing contractual obligations, and covering other routine business expenditures. Our primary cash outflows include operating costs and general business expenditure. The main source of our liquidity was from notes and equity issuances.
Under ASC 205-40, Presentation of Financial Statements: Going Concern, the Company is required to evaluate at each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern, and, if substantial doubt is raised, whether our plans to mitigate those conditions, when considered in the aggregate, alleviate that doubt.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient income and has historically depended on notes or equity to fund operations. concern for one year from the date of the filing of the 10-Q. As of June 30, 2026, the Company has an accumulated deficit of $13,526,169. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date of filing of the 10-Q.
Management’s plans are to raise additional capital, explore potential business opportunities and to increase revenue. However, there is no assurance that the Company will raise sufficient capital to continue operations, or on acceptable terms. The condensed unaudited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Critical Accounting Estimates
As of June 30, 2026, there were no significant changes in the application or the nature of accounting estimates that are considered critical in nature from those presented in our Annual Report on Form 10-K.
Smaller Reporting Company
We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, which allows us to take advantage of certain exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of our Common Stock held by non-affiliates exceeds $250.0 million as of the prior June 30, and (ii) our annual revenue exceeded $100.0 million during such completed fiscal year or the market value of the shares of our Common Stock held by non-affiliates exceeds $700.0 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparisons of our financial statement with other public companies difficult or impossible.
| 7 |
Related Party Transactions
See Note 3, to the accompanying financial statements for related party transactions.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2026. This evaluation was carried out under the supervision and with the participation of our Interim Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2026, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Material Weaknesses in Internal Control over Financial Reporting
Management concluded that the Company’s internal control over financial reporting was not effective due to the existence of the following material weaknesses:
Insufficient segregation of duties due to a limited number of accounting and finance personnel.
An insufficient complement of personnel possessing the appropriate level of accounting, financial reporting, and SEC reporting expertise necessary to ensure the timely preparation and review of financial statements and related disclosures in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”).
| ● | Limited independent oversight by the Board of Directors resulting from an insufficient number of independent directors. |
| ● | Inadequate documentation of accounting policies, internal control procedures, and corporate governance processes. |
| ● | Insufficient review controls over the preparation and review of financial statements, SEC filings, significant accounting estimates, and related disclosures. |
| ● | Inadequate employee and director training regarding internal controls, corporate governance, ethics, and compliance responsibilities. |
| ● | Limited monitoring activities to assess whether internal controls were operating effectively on an ongoing basis. |
These material weaknesses could result in a reasonable possibility that a material misstatement of the Company’s financial statements would not be prevented or detected on a timely basis.
| 8 |
Remediation of Material Weaknesses
As of July 1, 2026, the Company initiated a number of actions intended to remediate the material weaknesses described above.
| ● | The Company strengthened its senior management team by appointing an Executive Director and hiring a Chief Financial Officer with significant experience serving as the chief financial officer of several public companies. The Company also retained its existing Controller. These actions enhance the Company’s financial reporting capabilities and improve segregation of duties within the accounting and finance function. |
| ● | The Company hired a General Counsel who also serves as Corporate Secretary, strengthening the Company’s legal, regulatory compliance, corporate governance, and contract administration functions. |
| ● | The Company increased the number of independent directors serving on its Board of Directors from two to five, thereby enhancing the independence of Board oversight and strengthening the Company’s governance structure. |
In addition, the Company updated and formalized its written corporate governance policies and procedures, including accounting policies, internal control documentation, approval authority matrices, disclosure controls and procedures, and financial reporting processes. The Company also implemented formal training programs for employees and directors covering internal control responsibilities, financial reporting, SEC compliance, corporate governance, ethics, and related compliance matters.
Management believes these actions significantly strengthen the Company’s control environment by improving segregation of duties, enhancing financial reporting expertise, strengthening legal and governance oversight, formalizing key control activities, and promoting a culture of compliance and accountability throughout the organization.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended June 30, 2026, that have materially affected, or are reasonable likely to affect, our internal control over financial reporting.
| 9 |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceedings. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are averse to us or have a material interest adverse to us.
Item 1A. Risk Factors
See risk factors included in our Annual Report on Form 10-K filed on May 22, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished. |
| † | Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and such information is not otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request. |
| 10 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Polomar Health Services, Inc. | ||
| Date: | August 14, 2026 | |
| By: | /s/ Terrence M. Tierney | |
| Terrence M. Tierney | ||
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: | August 14, 2026 | |
| By: | /s/ Douglas Beck | |
| Douglas Beck | ||
| Title: | Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) | ||
| 11 |
Exhibit 3.1
AMENDED AND RESTATED BYLAWS
OF
POLOMAR HEALTH SERVICES, INC.,
a Nevada corporation
(Effective as of July 1, 2026)
These Amended and Restated Bylaws (these “Bylaws”) of Polomar Health Services, Inc., a Nevada corporation (the “Corporation”), amend, restate, and supersede in their entirety the Bylaws of the Corporation originally adopted on September 20, 2000 (and filed with the Securities and Exchange Commission as Exhibit 3.3 to the Corporation’s Registration Statement on Form S-1 filed July 21, 2008), which have not been amended prior to the adoption of these Amended and Restated Bylaws. These Bylaws are adopted under, and are subject to, the articles of incorporation of the Corporation, as amended and restated by the Amended and Restated Articles of Incorporation dated October 10, 2024 (as further amended, restated, or otherwise modified from time to time, the “Articles of Incorporation”). In the event of any conflict between the provisions of these Bylaws and the Articles of Incorporation, the Articles of Incorporation shall control to the extent of such conflict.
ARTICLE I
OFFICES
Section 1.1 Principal Office. The principal office and place of business of the Corporation shall be at such location within or without the State of Nevada as determined by the Board of Directors of the Corporation (the “Board of Directors”).
Section 1.2 Other Offices. Other offices and places of business either within or without the State of Nevada may be established from time to time by resolution of the Board of Directors, in addition to the registered office of the Corporation in the State of Nevada.
ARTICLE II
STOCKHOLDERS
Section 2.1 Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date and at such time as may be designated from time to time by the Board of Directors but in any case, on or around October 15th of each year. At the annual meeting, directors shall be elected and any other business may be transacted as may be properly brought before the meeting pursuant to these Amended and Restated Bylaws (as amended from time to time, the “Bylaws”). The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders.
Section 2.2 Special Meetings.
(a) Subject to any rights of stockholders set forth in the Articles of Incorporation, special meetings of the stockholders may be called only in the manner set forth in the Articles of Incorporation. The notice for every special meeting shall state the place (if any), date, hour and purposes of the meeting. Except as otherwise required by law, only the purposes specified in the notice of the special meeting shall be considered or dealt with at such special meeting. The Board of Directors may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors.
(b) No business shall be acted upon at a special meeting of stockholders except as set forth in the notice of the meeting.
Section 2.3 Place of Meetings. Meetings of stockholders may be held at such place, either within or without the State of Nevada, as may be designated in the notice of meeting. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communications, including by such electronic communications, by means of which all persons participating in the meeting may communicate (the “Remote Technology”), as permitted by the Nevada Revised Statutes (the “NRS”). The Board of Directors may also, in its sole discretion, determine that stockholders and proxy holders may attend and participate by means of Remote Technology in a stockholder meeting held at a designated place. As to any meeting where attendance and participation by Remote Technology is authorized by the Board of Directors in its sole discretion (including any meeting held solely by Remote Technology), and subject to such guidelines and procedures as the Board of Directors may adopt for any meeting, stockholders and proxy holders not physically present at such meeting of the stockholders shall be entitled to: (i) participate in any such meeting of the stockholders; and (ii) be deemed present in person and vote at such meeting of the stockholders whether such meeting is to be held at a designated place or solely by means of Remote Technology, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of Remote Technology is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of Remote Technology, a record of such vote or other action shall be maintained by the Corporation. Participation in a meeting by means of Remote Technology pursuant to this Section constitutes presence in person at the meeting.
Section 2.4 Notice of Meetings; Waiver of Notice.
(a) The secretary shall sign and deliver or cause to be delivered to the stockholders written notice of any meeting of stockholders not less than ten (10) nor more than sixty (60) days before the meeting. The notice shall state the place, date and time of the meeting, the means of Remote Technology, if any, by which the stockholders or the proxies thereof shall be deemed to be present and vote and, in the case of a special meeting, the purpose or purposes for which the meeting is called. The notice shall be delivered in accordance with, and shall contain or be accompanied by such additional information as may be required by, the NRS.
(b) In the case of an annual meeting, subject to Section 2.13, any proper business may be presented for action, except that (i) if a proposed plan of merger, conversion or exchange is submitted to a vote, the notice of the meeting must state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger, conversion or exchange and must contain or be accompanied by a copy or summary of the plan, and (ii) if dissenter’s rights are available to stockholders under NRS 92A.300 to 92A.500, inclusive, the notice must state that stockholders are or may be entitled to assert dissenter’s rights under NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
(c) A copy of the notice shall be personally delivered or mailed postage prepaid to each stockholder of record at the address appearing on the records of the Corporation. Upon mailing, service of the notice is complete, and the time of the notice begins to run from the date upon which the notice is deposited in the mail. If the address of any stockholder does not appear upon the records of the Corporation or is incomplete, it will be sufficient to address any notice to such stockholder at the registered office of the Corporation. Notwithstanding the foregoing and in addition thereto, any notice to stockholders given by the Corporation pursuant to Chapters 78 or 92A of the NRS, the Articles of Incorporation or these Bylaws may be given pursuant to the forms of Electronic Transmission (as defined below) listed herein, if such forms of transmission are consented to in writing by the stockholder receiving such electronically transmitted notice and such consent is filed by the secretary in the corporate records. Notice shall be deemed given (i) by facsimile when directed to a number consented to by the stockholder to receive notice, (ii) by e-mail when directed to an e-mail address consented to by the stockholder to receive notice, (iii) by posting on an electronic network together with a separate notice to the stockholder of the specific posting on the later of the specific posting or the giving of the separate notice or (iv) by any other Electronic Transmission as consented to by and when directed to the stockholder. The stockholder consent necessary to permit Electronic Transmission to such stockholder shall be deemed revoked and of no force and effect if (A) the Corporation is unable to deliver by Electronic Transmission two consecutive notices given by the Corporation in accordance with such consent and (B) such inability becomes known to the secretary, assistant secretary, transfer agent or other agent of the Corporation responsible for the giving of notice.
(d) The written certificate of an individual signing a notice of meeting, setting forth the substance of the notice or having a copy thereof attached thereto, the date the notice was mailed or personally delivered to the stockholders and the addresses to which the notice was mailed, shall be prima facie evidence of the manner and fact of giving such notice and, in the absence of fraud, an affidavit of the individual signing a notice of a meeting that the notice thereof has been given by a form of Electronic Transmission shall be prima facie evidence of the facts stated in the affidavit.
(e) “Electronic Transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 2.5 Determination of Stockholders of Record.
(a) For the purpose of determining the stockholders entitled to (i) notice of and to vote at any meeting of stockholders or any adjournment thereof, (ii) receive payment of any distribution or the allotment of any rights, or (iii) exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, if applicable.
(b) If no record date is fixed, the record date for determining stockholders: (i) entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any postponement of any meeting of stockholders to a date not more than sixty (60) days after the record date or to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for the adjourned meeting and must fix a new record date if the meeting is adjourned to a date more than sixty (60) days later than the date set for the original meeting.
Section 2.6 Quorum; Adjourned Meetings.
(a) Unless the Articles of Incorporation provide for a different proportion, stockholders holding at least a majority of the voting power of the Corporation entitled to vote at such meeting, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), are necessary to constitute a quorum for the transaction of business at any meeting. If, on any issue, voting by classes or series is required by the laws of the State of Nevada, the Articles of Incorporation or these Bylaws, at least a majority of the voting power entitled to vote at such meeting, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), within each such class or series is necessary to constitute a quorum of each such class or series.
(b) If a quorum is not represented, a majority of the voting power represented or the individual acting as chair of the meeting may adjourn the meeting from time to time until a quorum shall be represented. The individual acting as chair of the meeting may, for any or no reason, from time to time, adjourn or recess any meeting of stockholders. At any such adjourned meeting at which a quorum shall be represented, any business may be transacted which might otherwise have been transacted at the adjourned meeting as originally called. When a stockholders’ meeting is adjourned to another time or place, not more than sixty (60) days later than the date set for the original meeting, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. However, if a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given to each stockholder of record as of the new record date. The stockholders present at a duly convened meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the departure of enough stockholders to leave less than a quorum of the voting power.
Section 2.7 Voting.
(a) Unless otherwise provided in the NRS, the Articles of Incorporation, or any resolution providing for the issuance of preferred stock adopted by the Board of Directors pursuant to authority expressly vested in it by the provisions of the Articles of Incorporation, each stockholder of record, or such stockholder’s duly authorized proxy, shall be entitled to one (1) vote for each share of voting stock standing in the name of such stockholder on the records of the Corporation.
(b) Except as otherwise provided in these Bylaws, all votes with respect to shares (including pledged shares) standing in the name of an individual at the close of business on the record date may be cast by such individual or by his or her duly authorized proxy. In the case of shares held by a representative of the estate of a deceased stockholder, or a guardian, conservator, custodian or trustee, even though the shares do not stand in the name of such holder, votes may be cast by such holder upon proof of such representative capacity. In the case of shares under the control of a receiver, the receiver may vote such shares even though the shares do not stand of record in the name of the receiver but only if and to the extent that the order of a court of competent jurisdiction which appoints the receiver contains the authority to vote such shares. If shares stand of record in the name of a minor, votes may be cast by the duly appointed guardian of the estate of such minor only if such guardian has provided the Corporation with written proof of such appointment.
(c) With respect to shares standing of record in the name of another corporation, partnership, limited liability company or other legal entity on the record date, votes may be cast: (i) in the case of a corporation, by such individual as the bylaws of such other corporation prescribe, by such individual as may be appointed by resolution of the board of directors of such other corporation or by such individual (including, without limitation, the officer making the authorization) authorized in writing to do so by the chair of the board, if any, the chief executive officer, if any, the president or any vice president of such other corporation; and (ii) in the case of a partnership, limited liability company or other legal entity, by an individual representing such stockholder upon presentation to the Corporation of satisfactory evidence of his or her authority to do so.
(d) Notwithstanding anything to the contrary contained herein and except for the shares held by it in a fiduciary capacity, the Corporation shall not vote, directly or indirectly, shares of its own stock owned or held by it, and such shares shall not be counted in determining the total number of outstanding shares entitled to vote.
(e) Any holder of shares entitled to vote on any matter may cast a portion of the votes in favor of such matter and refrain from casting the remaining votes or cast the same against the proposal, except in the case of elections of directors. If a holder of shares casts a portion of the votes represented by such shares affirmatively and fails to specify the number of affirmative votes, it will be conclusively presumed that the holder is casting affirmative votes with respect to all shares held.
(f) With respect to shares standing of record in the name of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, spouses as community property, tenants by the entirety, voting trustees or otherwise and shares held by two or more persons (including proxy holders) having the same fiduciary relationship in respect to the same shares, votes may be cast in the following manner:
(i) If only one person votes, the vote of such person binds all.
(ii) If more than one person casts votes, the act of the majority so voting binds all.
(iii) If more than one person casts votes, but the vote is evenly split on a particular matter, the votes shall be deemed cast proportionately, as split.
(g) If a quorum is present, unless the Articles of Incorporation, these Bylaws, the NRS, or other applicable law provide for a different proportion, action by the stockholders entitled to vote on a matter is approved by and is the act of the stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, unless voting by classes or series is required for any action of the stockholders by the laws of the State of Nevada, the Articles of Incorporation or these Bylaws, in which case the number of votes cast in favor of the action by the voting power of each such class or series must exceed the number of votes cast in opposition to the action by the voting power of each such class or series.
(h) The stockholders do not have the right to cumulate their votes for the election of directors. In an uncontested election of directors, each director of the Corporation shall be elected by the affirmative vote of a majority of the votes cast with respect to such director and present in person or represented by proxy at the meeting and entitled to vote on the election of directors; provided, however, that in a contested election, the directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. For purposes of this Section 2.7(h), an “uncontested election” means an election in which the number of nominees for director is not greater than the number of directors to be elected, and a “contested election” means an election in which the number of nominees for director is greater than the number of directors to be elected.
(i) Following any uncontested election, any incumbent director who was a nominee and who did not receive a majority of the votes cast by the shares present in person or represented by proxy at the meeting and entitled to vote on the election (a “majority vote”) shall promptly tender his or her written offer of resignation to the Board of Directors for consideration by the Board of Directors if such director has not previously submitted an offer of resignation conditioned upon his or her failure to receive a majority vote. A recommendation on whether or not to accept such resignation offer shall be made by a committee of independent directors that has been delegated the responsibility of recommending nominees for director for appointment or election to the Board of Directors, or (x) if each member of such committee did not receive the required majority vote or (y) if no such committee has been appointed, a majority of the Board of Directors shall appoint a special committee of independent directors for such purpose of making a recommendation to the Board of Directors (in either case, the “Nominating and Corporate Governance Committee”). Promptly following receipt of the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors shall act on the resignation offers.
Within sixty (60) days following certification of the stockholder vote, the Nominating and Corporate Governance Committee shall recommend to the Board of Directors the action to be taken with respect to such offer of resignation. In determining whether or not to recommend that the Board of Directors accept any resignation offer, the Nominating and Corporate Governance Committee shall be entitled to consider any factors it deems relevant, including, without limitation, the stated reasons for the director not receiving the required majority vote and whether the underlying cause or causes are curable, the factors considered by the Nominating and Corporate Governance Committee in evaluating potential candidates for the Board of Directors as such factors relate to each director who has tendered a resignation offer, and any other factors that the Nominating and Corporate Governance Committee believes are in the best interests of the Corporation.
The Board of Directors shall take into consideration the Nominating and Corporate Governance Committee’s recommendation and shall publicly disclose its decision and the reasons therefor, by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication, within ninety (90) days following certification of the stockholder vote. In determining whether or not to accept any resignation offer, the Board of Directors shall take into account the factors considered by the Nominating and Corporate Governance Committee and any additional information and factors that the Board of Directors believes to be relevant.
(j) If a nominee for director who is an incumbent director is not elected and the resignation offer is rejected by the Board of Directors, such director shall continue to serve until the next annual meeting of stockholders and until his or her successor is duly elected, or his or her earlier resignation or removal. If such incumbent director’s resignation offer is accepted by the Board of Directors, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 3.5 or may decrease the size of the Board of Directors pursuant to Section 3.2.
Section 2.8 Proxies. At any meeting of stockholders, any holder of shares entitled to vote may designate, in a manner permitted by the laws of the State of Nevada, another person or persons to act as a proxy or proxies. If a stockholder designates two or more persons to act as proxies, then a majority of those persons present at a meeting has and may exercise all of the powers conferred by the stockholder or, if only one is present, then that one has and may exercise all of the powers conferred by the stockholder, unless the stockholder’s designation of proxies provides otherwise. Every proxy shall continue in full force and effect until its expiration or revocation in a manner permitted by the laws of the State of Nevada.
Section 2.9 Action by Written Consent. Unless otherwise provided in the Articles of Incorporation, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power; provided, however, that if a different proportion of voting power is required for such action at a meeting by Chapter 78 of the NRS or the Articles of Incorporation, then that greater or different proportion of written consents shall be required to take such action. Any such written consent may be executed and delivered, and may be transmitted by electronic transmission, in accordance with and subject to Chapter 78 of the NRS. Prompt notice of the taking of any corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting.
Section 2.10 Organization.
(a) Meetings of stockholders shall be presided over by the chair of the Board of Directors (the “Chair of the Board”), or, in the absence of the Chair of the Board, by the vice chair of the Board of Directors, if any, or if there be no vice chair or in the absence of the vice chair of the Board of Directors, by the chief executive officer, if any, or if there be no chief executive officer or in the absence of the chief executive officer, by the president, or, in the absence of the president, or, in the absence of any of the foregoing persons, by a chair designated by the Board of Directors, or by a chair chosen at the meeting by the stockholders entitled to cast a majority of the votes which all stockholders present in person or by proxy are entitled to cast. The individual acting as chair of the meeting may delegate any or all of his or her authority and responsibilities as such to any director or officer of the Corporation present in person at the meeting. The secretary, or in the absence of the secretary an assistant secretary, shall act as secretary of the meeting, but in the absence of the secretary and any assistant secretary the chair of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chair of the meeting. The chair of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, (i) the establishment of procedures for the maintenance of order and safety, (ii) limitation on participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies and such other persons as the chair of the meeting shall permit, (iii) limitation on the time allotted for consideration of each agenda item and for questions or comments by meeting participants, (iv) restrictions on entry to such meeting after the time prescribed for the commencement thereof and (v) the opening and closing of the voting polls. The Board of Directors, in its discretion, or the chair of the meeting, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(b) The Board of Directors may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The inspector or inspectors may (i) ascertain the number of shares outstanding and the voting power of each; (ii) determine the number of shares represented at a meeting and the validity of proxies or ballots; (iii) count all votes and ballots; (iv) determine any challenges made to any determination made by the inspector(s); and (v) certify the determination of the number of shares represented at the meeting and the count of all votes and ballots.
(c) Only such persons who are nominated in accordance with the procedures set forth in Section 2.12 shall be eligible to be elected at any meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Section 2.12. If any proposed nomination or business was not made or proposed in compliance with Section 2.12 (including compliance with the requirements of Section 2.13), then the Board of Directors or the chair of the meeting shall have the power to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. If the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.10, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or Electronic Transmission of the writing) delivered to the Corporation prior to the making of such nomination or proposal at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.
Section 2.11 Consent to Meetings. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person objects at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called, noticed or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice, to the extent such notice is required, if such objection is expressly made at the time any such matters are presented at the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of stockholders need be specified in any written waiver of notice or consent, except as otherwise provided in these Bylaws.
Section 2.12 Director Nominations and Business Conducted at Meetings of Stockholders. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (i) by or at the direction of the Board of Directors or the Chair of the Board or (ii) by any stockholder of the Corporation who is entitled to vote on such matter at the meeting, who complied with the procedures set forth in Section 2.13 and who was a stockholder of record at the time such notice is delivered to the secretary of the Corporation. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders, which has been called and held pursuant to the requirements of Section 2.2, and at which directors are to be elected pursuant to the notice of meeting, (i) by or at the direction of the Board of Directors or any committee thereof or (ii) by any stockholder of the Corporation who is entitled to vote on such matter at the meeting, who complied with the procedures set forth in Section 2.13 and who was a stockholder of record at the time such notice is delivered to the secretary of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 2.13 shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day prior to such special meeting and not earlier than the close of business on the later of: (x) the 120th day prior to such special meeting or (y) the tenth (10th) day following the date of Public Disclosure of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the Public Disclosure of an adjournment or postponement of a special meeting commence a new time period (or extend any notice time period).
Section 2.13 Advance Notice of Director Nominations and Stockholder Proposals by Stockholders.
(a) Timely Notice. At a meeting of the stockholders, only such nominations of persons for the election of directors and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations or such other business must be: (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors or any committee thereof, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors or any committee thereof, or (iii) otherwise properly brought before an annual meeting by a stockholder who is a stockholder of record of the Corporation at the time such notice of meeting is delivered, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.13. In addition, any proposal of business (other than the nomination of persons for election to the Board of Directors) must be a proper matter for stockholder action. For business (including, but not limited to, director nominations) to be properly brought before an annual meeting by a stockholder, the stockholder or stockholders of record intending to propose the business (the “Proposing Stockholder”) must give timely notice thereof pursuant to this Section 2.13(a) or Section 2.13(c), as applicable, in writing to the secretary of the Corporation even if such matter is already the subject of any notice to the stockholders or Public Disclosure. For purposes of this Section 2.13, “Public Disclosure” means a disclosure made in a press release reported by a national news service or in a document filed by the Corporation with the Securities and Exchange Commission and other regulatory agencies pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other applicable securities laws. To be timely, a Proposing Stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation: (x) not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day in advance of the anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is not more than 30 days in advance of the anniversary of the previous year’s annual meeting nor later than 70 days after the anniversary of the previous year’s annual meeting; and (y) with respect to any other annual meeting of stockholders, not later than the close of business on the tenth (10th) day following the date of Public Disclosure of the date of such meeting. In no event shall the Public Disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period).
(b) Stockholder Nominations. For the nomination of any person or persons for election to the Board of Directors, a Proposing Stockholder’s notice to the secretary shall set forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Corporation which are owned of record and beneficially by each such nominee (if any), (iv) a description of all arrangements, agreements, proxies or understandings between the Proposing Stockholder and each such nominee and any other person or persons (naming such person or persons) pursuant to which such nominations are to be made by the Proposing Stockholder, (v) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such Proposing Stockholder or any Stockholder Associated Person (as defined below) of such Proposing Stockholder, on the one hand, and each proposed nominee, or his or her associates, on the other hand, (vi) such other information concerning each such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed, under Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, (vii) the consent of the nominee to being named in the proxy statement as a nominee and to serving as a director if elected, (viii) a written representation by the nominee proposed in such notice that such nominee currently intends to serve the full term for which such nominee would be standing for election, if elected, and (ix) as to the Proposing Stockholder: (A) the name and address, as they appear on the Corporation’s books, of the Proposing Stockholder and of any Stockholder Associated Person covered by clauses (B), (C) or (D) below, (B) the class and number of shares of the Corporation which are directly and indirectly held of record or are Beneficially Owned (as defined below) by the Proposing Stockholder or by any Stockholder Associated Person and the date(s) on which such stock was acquired, (C) a description of any agreement, arrangement, proxy or understanding with respect to such nomination between or among the Proposing Stockholder and any Stockholder Associated Persons, and any other person or entity (including their names) in connection with the nomination of any person as a director of the Corporation and any material relationships, within the last three (3) years, between the nominee and his or her affiliates and such Proposing Stockholder or any Stockholder Associated Person, (D) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the Proposing Stockholder’s notice by, or on behalf of, the Proposing Stockholder or any Stockholder Associated Persons, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proposing Stockholder or any of its affiliates or associates with respect to shares of stock of the Corporation, (E) a written representation that the Proposing Stockholder is a holder of record of shares of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (F) a written representation whether the Proposing Stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the nominee and/or otherwise to solicit proxies from stockholders in support of the nomination, (G) a written representation whether the Proposing Stockholder intends to appear in person or by proxy at the meeting to propose the business described in its notice, and (H) a written representation of all voting equity investments and positions as a director or officer, if any, held by such nominee in any competitor of the Corporation (as such term is defined under Section 8 of the Clayton Antitrust Act of 1914, as amended), within the three (3) years preceding the submission of the notice. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require in order to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.
In addition, to be eligible to be a nominee pursuant to this Section 2.13, a person must deliver, in accordance with the time periods prescribed for delivery of notice under this Section 2.13, the following to the secretary of the Corporation (the “Nominee Information”):
(1) a fully completed and signed written questionnaire with respect to the background and qualifications of such nominee (which questionnaire shall be provided by such nominee to the secretary of the Corporation upon written request); and
(2) a written representation and agreement (in the form provided by the secretary of the Corporation upon written request) that such nominee (i) is not and will not become a party to (w) any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with such nominee’s nomination or candidacy for director that has not been disclosed to the Corporation, (x) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation, or (y) any Voting Commitment that could limit or interfere with such nominee’s ability to comply, if elected as a director of the Corporation, with such nominee’s fiduciary duties under applicable law, and (ii) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected or re-elected as a director of the Corporation, and intends to comply, with these Bylaws, the Articles of Incorporation and all applicable publicly disclosed corporate governance, conflict of interest, confidentiality, stock ownership and trading policies and guidelines of the Corporation applicable to directors of the Corporation.
In addition to the information set forth above, any Proposing Stockholder making a nomination pursuant to this Section 2.13 shall provide to the Corporation such additional information that the Corporation may reasonably request from time to time regarding such Proposing Stockholder, any Stockholder Associated Person thereof or the nominee, including such information to determine the eligibility or qualifications of the nominee to serve as a director or an independent director or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of the nominee to serve as a director of the Corporation. In addition, any stockholder who submits a notice pursuant to this Section 2.13(b) is required to update and supplement the information disclosed in such notice, if necessary, in accordance with Section 2.13(f). At the request of the Board of Directors, any person nominated by a stockholder for election as a director shall furnish to the secretary of the Corporation the information that is required to be set forth in a stockholder’s notice of nomination that pertains to such nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.13(b). If any information submitted pursuant to this Section 2.13(b) by any Proposing Stockholder proposing one or more nominees for election as a director at a meeting of stockholders is inaccurate in any material respect, such information shall be deemed not to have been provided in accordance with this Section 2.13(b). The presiding person at the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the presiding person should so determine, such person shall so declare at the meeting, and the defective nomination shall be disregarded.
(c) Other Stockholder Proposals. For all business other than director nominations, a Proposing Stockholder’s notice to the secretary shall set forth as to each matter the Proposing Stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposed business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment), the reasons for conducting such business at the annual meeting, and any material interest in such business of such stockholder and of the beneficial owner, if any, on whose behalf the proposal is being made, (ii) any other information relating to such stockholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder and (iii) the information required by Section 2.13(b)(ix). Any Proposing Stockholder who submits a notice pursuant to this Section 2.13(c) is required to update and supplement the information disclosed in such notice, if necessary, in accordance with Section 2.13(f).
(d) Proxy Rules. The foregoing notice requirements of Section 2.13(c) shall be deemed satisfied by a stockholder with respect to business other than a nomination if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with the applicable rules and regulations promulgated under Section 14(a) of the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
(e) Effect of Noncompliance. Notwithstanding anything in these Bylaws to the contrary: (i) no nominations shall be made or business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.13, and (ii) unless otherwise required by law, if a Proposing Stockholder intending to propose business or make nominations at an annual meeting pursuant to this Section 2.13 does not provide the information required under this Section 2.13 to the Corporation within five (5) business days following the later of the record date for such meeting or the date notice of the record date is first publicly disclosed, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation. The requirements of this Section 2.13 shall apply to any business or nominations to be brought before an annual meeting by a stockholder whether such business or nominations are to be included in the Corporation’s proxy statement pursuant to Rule 14a-8 of the Exchange Act or presented to stockholders by means of an independently financed proxy solicitation. The requirements of this Section 2.13 are included to provide the Corporation notice of a stockholder’s intention to bring business or nominations before an annual meeting and shall in no event be construed as imposing upon any stockholder the requirement to seek approval from the Corporation as a condition precedent to bringing any such business or make such nominations before an annual meeting.
(f) Update and Supplement of Notice. Any stockholder who submits a notice of proposal for business or nomination for election pursuant to this Section 2.13 is required to update and supplement the information disclosed in such notice, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for determining the stockholders entitled to notice of the meeting of stockholders and as of the date that is ten (10) business days prior to such meeting of the stockholders or any adjournment or postponement thereof, and such update and supplement shall be delivered to the secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting of stockholders (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the meeting of stockholders or any adjournment or postponement thereof (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting of stockholders or any adjournment or postponement thereof).
(g) Definitions. For purposes of this Section 2.13, the term “Stockholder Associated Person” means, as to any stockholder, (i) any person acting in concert with such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person controlling, controlled by or under common control with any stockholder, or any Stockholder Associated Person identified in clauses (i) or (ii) above; the term “Legal Requirements” means all applicable laws, rules and regulations, including the rules, regulations and listing standards of any securities exchange(s) on which the Corporation’s securities are listed or traded; and the term “Beneficially Owned” has the meaning ascribed thereto pursuant to Rules 13d-3 and 13d-5 under the Exchange Act.
(h) Compliance with Universal Proxy Rules. In addition to the requirements set forth elsewhere in this Section 2.13, any Proposing Stockholder who intends to solicit proxies in support of any nominee for election to the Board of Directors other than the Corporation’s nominees shall comply with Rule 14a-19 promulgated under the Exchange Act (together with any successor rule, “Rule 14a-19”), including the notice and solicitation requirements thereof. Without limiting the foregoing, (i) the Proposing Stockholder’s notice required by this Section 2.13 shall include a representation that the Proposing Stockholder intends to, and will, solicit the holders of shares representing at least sixty-seven percent (67%) of the voting power of the shares entitled to vote on the election of directors in support of director nominees other than the Corporation’s nominees and will otherwise comply with Rule 14a-19; and (ii) upon the request of the Corporation, the Proposing Stockholder shall deliver to the secretary, no later than five (5) business days prior to the applicable meeting of stockholders, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3). Notwithstanding anything to the contrary in these Bylaws, if a Proposing Stockholder provides notice pursuant to Rule 14a-19(b) and thereafter fails to comply with the requirements of Rule 14a-19 (or fails to deliver the evidence described in clause (ii) of this Section 2.13(h)), then the nomination of each applicable nominee shall be disregarded, and no vote on the election of any such nominee shall occur (notwithstanding that proxies in respect of such nominees may have been received by the Corporation), as determined by the chair of the meeting.
ARTICLE III
DIRECTORS
Section 3.1 General Powers; Performance of Duties. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as otherwise provided in Chapter 78 of the NRS or the Articles of Incorporation. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is filled.
Section 3.2 Number, Tenure, and Qualifications. The Board of Directors shall consist of at least one (1) but not more than nine (9) members, each of whom shall be a natural person. At any regular meeting or at any special meeting of the Board of Directors called for that purpose, a majority of the whole Board of Directors may establish, increase or decrease the number of directors constituting the entire Board of Directors; provided, that the tenure of office of a director shall not be affected by any decrease in the number of directors. Each director shall hold office until the next annual meeting of stockholders and until his or her successor shall be elected or appointed and qualified or until his or her earlier death, retirement, disqualification, resignation or removal. No provision of this Section 3.2 shall restrict the right of the Board of Directors to fill vacancies or the right of the stockholders to remove directors, each as provided in these Bylaws.
Section 3.3 Chair of the Board. The Board of Directors shall elect a Chair of the Board from the members of the Board of Directors who shall preside at all meetings of the Board of Directors and stockholders at which he or she shall be present and shall have and may exercise such powers as may, from time to time, be assigned to him or her by the Board of Directors, these Bylaws or as provided by law.
Section 3.4 Removal and Resignation of Directors. A director may be removed from the Board of Directors by the stockholders of the Corporation only as provided in the Articles of Incorporation. Any director may resign effective upon giving written notice, unless the notice specifies a later time for effectiveness of such resignation, to the Chair of the Board, if any, the president or the secretary, or in the absence of all of them, any other officer of the Corporation.
Section 3.5 Vacancies. Vacancies on the Board of Directors shall be filled in the manner provided in the Articles of Incorporation.
Section 3.6 Regular Meetings. Regular meetings of the Board of Directors may be held at such places, if any, within or without the State of Nevada and at such times as the Board of Directors may from time to time determine.
Section 3.7 Special Meetings. Special meetings of the Board of Directors may be called, in writing, by the Chair of the Board, the chief executive officer, if any, the president, or a majority of the Board of Directors (or the sole director, if applicable), and designating the time, date and place (if any) thereof.
Section 3.8 Notice of Meetings. There shall be delivered to each director at the address appearing for him or her on the records of the Corporation, at least twenty-four (24) hours before the time of such meeting, a copy of a written notice of any meeting (i) by delivery of such notice personally, (ii) by mailing such notice postage prepaid, (iii) by facsimile, (iv) by overnight courier, or (v) by Electronic Transmission or electronic writing, including, without limitation, e-mail. If mailed to an address inside the United States, the notice shall be deemed delivered two (2) business days following the date the same is deposited in the United States mail, postage prepaid. If mailed to an address outside the United States, the notice shall be deemed delivered four (4) business days following the date the same is deposited in the United States mail, postage prepaid. If sent via overnight courier, the notice shall be deemed delivered the business day following the delivery of such notice to the courier. If sent via facsimile, the notice shall be deemed delivered when sent to the facsimile number for the director appearing on the records of the Corporation. If sent by Electronic Transmission (including, without limitation, e-mail), the notice shall be deemed delivered when directed to the e-mail address of the director appearing on the records of the Corporation. If the address of any director is incomplete or does not appear upon the records of the Corporation, it will be sufficient to address any notice to such director at the registered office of the Corporation. Any director may waive notice of any meeting, and the attendance of a director at a meeting and oral consent entered on the minutes of such meeting shall constitute waiver of notice of the meeting unless such director objects, prior to the transaction of any business, that the meeting was not lawfully called, noticed or convened. Attendance for the express purpose of objecting to the transaction of business thereat because the meeting was not properly called or convened shall not constitute presence or a waiver of notice for purposes hereof. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.
Section 3.9 Quorum; Adjourned Meetings.
(a) A majority of the directors then in office, at a meeting duly assembled, is necessary to constitute a quorum for the transaction of business.
(b) At any meeting of the Board of Directors where a quorum is not present, a majority of those present may adjourn, from time to time, until a quorum is present, and no notice of such adjournment shall be required. At any adjourned meeting where a quorum is present, any business may be transacted which could have been transacted at the meeting originally called.
Section 3.10 Manner of Acting. Unless a larger number is required by law or by the Articles of Incorporation, the affirmative vote of a majority of the directors present at a meeting at which a quorum is present is the act of the Board of Directors.
Section 3.11 Meetings Through Electronic Communications. Members of the Board of Directors or of any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by any means of Remote Technology permitted under the NRS (including, without limitation, a telephone conference or similar method of communication by which all individuals participating in the meeting can hear each other) and utilized by the Corporation. If any such means are utilized, the Corporation shall, to the extent required under the NRS, implement reasonable measures to (i) verify the identity of each person participating through such means as a director or member of the committee, as the case may be, and (ii) provide the directors or members of the committee a reasonable opportunity to participate in the meeting and to vote on matters submitted to the directors or members of the committee, including an opportunity to communicate, and to read or hear the proceedings of the meeting in a substantially concurrent manner with such proceedings. Participation in a meeting pursuant to this Section 3.11 constitutes presence in person at the meeting.
Section 3.12 Action Without Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors or of a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all of the members of the Board of Directors or the committee. The written consent may be signed manually or electronically (or by any other means then permitted under the NRS), and may be so signed in counterparts, including, without limitation, facsimile or email counterparts, and shall be filed with the minutes of the proceedings of the Board of Directors or committee.
Section 3.13 Powers and Duties; Committees.
(a) Except as otherwise restricted by Chapter 78 of the NRS or the Articles of Incorporation, the Board of Directors has full control over the business and affairs of the Corporation. The Board of Directors may delegate any of its authority to manage, control or conduct the business of the Corporation to any standing or special committee, or to any officer or agent, and to appoint any persons to be agents of the Corporation with such powers, including the power to subdelegate, and upon such terms as it deems fit.
(b) The Board of Directors may, by resolution passed by a majority of the Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Subject to applicable law and to the extent provided in the resolution of the Board of Directors, any such committee shall have and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, unless the committee has only one or two members, in which case a quorum shall be one member, or unless a greater quorum is established by the Board of Directors. The vote of a majority of the members present at a meeting of the committee at the time of such vote if a quorum is then present shall be the act of such committee. All members of such committees shall hold their committee offices at the pleasure of the Board of Directors, and the Board of Directors may abolish any committee at any time. Each such committee shall report its action to the Board of Directors who shall have power to rescind any action of any committee without retroactive effect. The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required.
Section 3.14 Compensation. The Board of Directors, without regard to personal interest, may establish the compensation of directors for services in any capacity. All directors shall receive their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof. If the Board of Directors establishes the compensation of directors pursuant to this Section 3.14, such compensation is presumed to be fair to the Corporation unless proven unfair by a preponderance of the evidence.
Section 3.15 Organization. Meetings of the Board of Directors shall be presided over by the Chair of the Board, or in the absence of the Chair of the Board by the vice chair, if any, or in his or her absence by a chair chosen at the meeting. The secretary, or in the absence of the secretary an assistant secretary, shall act as secretary of the meeting, but in the absence of the secretary and any assistant secretary, the chair of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chair of the meeting.
ARTICLE IV
OFFICERS
Section 4.1 Election. The Board of Directors shall elect or appoint a president, a secretary and a treasurer or the equivalents of such officers. Such officers shall serve until their respective successors are elected or appointed and qualified or until their earlier resignation or removal. The Board of Directors may from time to time, by resolution, elect or appoint an executive chairman (who shall be a director and the Chair of the Board) and such other officers and agents as it may deem advisable, who shall hold office at the pleasure of the Board of Directors, and shall have such powers and duties and be paid such compensation as may be directed by the Board of Directors. Any individual may hold two or more offices.
Section 4.2 Removal; Resignation. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause. Any officer may resign at any time upon written notice to the Corporation. Any such removal or resignation shall be subject to the rights, if any, of the respective parties under any contract between the Corporation and such officer or agent.
Section 4.3 Vacancies. Any vacancy in any office because of death, resignation, removal or otherwise may be filled by the Board of Directors for the unexpired portion of the term of such office.
Section 4.4 Chief Executive Officer. The Board of Directors may elect or appoint a chief executive officer (“CEO”) who, subject to the supervision and control of the Board of Directors, shall have the ultimate responsibility for the management and control of the business and affairs of the Corporation, and perform such other duties and have such other powers which are delegated to him or her by the Board of Directors, these Bylaws or as provided by law. If no president of the Corporation has been elected or appointed, the chief executive officer shall be deemed to be and shall have all of the powers and duties of, the president of the Corporation.
Section 4.5 Executive Chairman. The Board of Directors may elect or appoint an executive chairman, who shall be a member of the Board of Directors and shall also serve as the Chair of the Board. The executive chairman shall be an officer of the Corporation and, subject to the supervision and control of the Board of Directors, shall provide strategic leadership and direction to the Corporation, shall work with and provide guidance to the chief executive officer regarding the management of the business and affairs of the Corporation, and shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, these Bylaws or as provided by law. The office of executive chairman is optional, and the absence of an executive chairman shall not affect the authority of the other officers of the Corporation.
Section 4.6 President. The president, subject to the supervision and control of the Board of Directors, shall in general actively supervise and control the business and affairs of the Corporation. The president shall keep the Board of Directors fully informed as the Board of Directors may request and shall consult the Board of Directors concerning the business of the Corporation. The president shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, the chief executive officer, if any, these Bylaws or as provided by law. The president shall be the chief executive officer of the Corporation unless the Board of Directors shall elect or appoint different individuals to hold such positions. If the Corporation does not name a President, the CEO effectively be the President of the Corporation.
Section 4.7 Chief Financial Officer. The Board of Directors may elect or appoint a chief financial officer. The chief financial officer shall in general have overall supervision of the financial operations of the Corporation. The chief financial officer shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as may be provided by law.
Section 4.8 Vice Presidents. The Board of Directors may elect or appoint one or more vice presidents. In the absence or disability of the president, or at the president’s request, the vice presidents, in order of their rank as fixed by the Board of Directors, and if not ranked, the vice presidents in the order designated by the Board of Directors, or in the absence of such designation, in the order designated by the chief executive officer, if any, or the president, shall perform all of the duties of the president, and when so acting, shall have all the powers of, and be subject to all the restrictions on the president. Each vice president shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as provided by law.
Section 4.9 Secretary. The secretary shall attend all meetings of the stockholders, the Board of Directors and any committees thereof, and shall keep, or cause to be kept, the minutes of proceedings thereof in books provided for that purpose. He or she shall keep, or cause to be kept, a register of the stockholders of the Corporation and shall be responsible for the giving of notice of meetings of the stockholders, the Board of Directors and any committees, and shall see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law. The secretary shall be custodian of the corporate seal, if any, the records of the Corporation, the stock certificate books, transfer books and stock ledgers (which may, however, be kept by any transfer or other agent of the Corporation), and such other books and papers as the Board of Directors or any appropriate committee may direct. The secretary shall perform all other duties commonly incident to his or her office and shall perform such other duties which are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as provided by law.
Section 4.10 Assistant Secretaries. An assistant secretary shall, at the request of the secretary, or in the absence or disability of the secretary, perform all the duties of the secretary. He or she shall perform such other duties as are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, the secretary, these Bylaws or as provided by law.
Section 4.11 Treasurer. The treasurer, subject to the order of the Board of Directors, shall have the care and custody of, and be responsible for, all of the money, funds, securities, receipts and valuable papers, documents and instruments of the Corporation, and all books and records relating thereto. The treasurer shall keep, or cause to be kept, full and accurate books and records of account of all the business transactions, which shall be the property of the Corporation, and shall render financial reports and statements of condition of the Corporation when so requested by the Board of Directors, the Chair of the Board, if any, the chief executive officer, if any, the chief financial officer, if any, or the president. The treasurer shall perform all other duties commonly incident to his or her office and such other duties as may, from time to time, be assigned to him or her by the Board of Directors, the chief executive officer, if any, the chief financial officer, if any, the president, these Bylaws or as provided by law. If a chief financial officer of the Corporation has not been appointed, the treasurer may be deemed the chief financial officer of the Corporation.
Section 4.12 Assistant Treasurers. An assistant treasurer shall, at the request of the treasurer, or in the absence or disability of the treasurer, perform all the duties of the treasurer. He or she shall perform such other duties which are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, the treasurer, these Bylaws or as provided by law.
Section 4.13 Execution of Negotiable Instruments, Deeds and Contracts. All (i) checks, drafts, notes, bonds, bills of exchange, and orders for the payment of money of the Corporation, (ii) deeds, mortgages, proxies, powers of attorney and other written contracts, documents, instruments and agreements to which the Corporation shall be a party and (iii) assignments or endorsements of stock certificates, registered bonds or other securities owned by the Corporation shall be signed in the name of the Corporation by such officers or other persons as the Board of Directors may from time to time designate. The Board of Directors may authorize the use of the facsimile signatures of any such persons. Any officer of the Corporation shall be authorized to attend, act and vote, or designate another officer or an agent of the Corporation to attend, act and vote, at any meeting of the owners of any entity in which the Corporation may own an interest or to take action by written consent in lieu thereof. Such officer or agent, at any such meeting or by such written action, shall possess and may exercise on behalf of the Corporation any and all rights and powers incident to the ownership of such interest.
ARTICLE V
CAPITAL STOCK
Section 5.1 Issuance. Shares of the Corporation’s authorized stock shall, subject to any provisions or limitations of the laws of the State of Nevada, the Articles of Incorporation or any contracts or agreements to which the Corporation may be a party, be issued in such manner, at such times, upon such conditions and for such consideration as shall be prescribed by the Board of Directors.
Section 5.2 Stock Certificates and Uncertificated Shares.
(a) Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by (i) the chief executive officer, if any, the president, or a vice president, and (ii) the secretary, an assistant secretary, the treasurer or the chief financial officer, if any, of the Corporation (or any other two officers or agents so authorized by the Board of Directors), certifying the number of shares of stock owned by him, her or it in the Corporation; provided that the Board of Directors may authorize the issuance of uncertificated shares of some or all of any or all classes or series of the Corporation’s stock. Such authorization shall not affect shares already represented by certificates until such certificates are surrendered to the Corporation, or on the respective rights and obligations of the stockholders. Whenever any such certificate is countersigned or otherwise authenticated by a transfer agent or a transfer clerk and by a registrar (other than the Corporation), then a facsimile of the signatures of any corporate officers or agents, the transfer agent, transfer clerk or the registrar of the Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures. In the event that any officer or officers who have signed, or whose facsimile signatures have been used on any certificate or certificates for stock cease to be an officer or officers because of death, resignation or other reason, before the certificate or certificates for stock have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures have been used thereon, had not ceased to be an officer or officers of the Corporation.
(b) Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written statement certifying the number and class (and the designation of the series, if any) of the shares owned by such stockholder in the Corporation and any restrictions on the transfer or registration of such shares imposed by the Articles of Incorporation, these Bylaws, any agreement among stockholders or any agreement between the stockholders and the Corporation, and, at least annually thereafter, the Corporation shall provide to such stockholders of record holding uncertificated shares, a written statement confirming the information contained in such written statement previously sent. Except as otherwise expressly provided by the NRS, the rights and obligations of the stockholders of the Corporation shall be identical whether or not their shares of stock are represented by certificates.
(c) Each certificate representing shares shall state the following upon the face thereof: the name of the State of Nevada as the State under the laws of which the Corporation is organized; the name of the person to whom such certificate is issued; the number and class of shares and the designation of the series, if any, which such certificate represents; the par value of each share, if any, represented by such certificate or a statement that the shares are without par value. Certificates of stock shall be in such form consistent with law as shall be prescribed by the Board of Directors. No certificate shall be issued until the shares represented thereby are fully paid. In addition to the foregoing, all certificates evidencing shares or other securities issued by the Corporation shall contain such legend or legends as may from time to time be required by Chapter 78 of the NRS, and/or such other federal, state or local laws or regulations then in effect.
Section 5.3 Surrendered; Lost or Destroyed Certificates. All certificates surrendered to the Corporation, except those representing shares of treasury stock, shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been canceled, except that in case of a lost, stolen, destroyed or mutilated certificate, a new one may be issued therefor. However, any stockholder applying for the issuance of a stock certificate in lieu of one alleged to have been lost, stolen, destroyed or mutilated shall, prior to the issuance of a replacement, provide the Corporation with his, her or its affidavit of the facts surrounding the loss, theft, destruction or mutilation and, if required by the Board of Directors, an indemnity bond in an amount satisfactory to the Board of Directors or an authorized officer which amount may be in excess of the current market value of the stock, and upon such terms as the treasurer, other officer who is so authorized, or the Board of Directors shall require which shall indemnify the Corporation against any loss, damage, cost or inconvenience arising as a consequence of the issuance of a replacement certificate.
Section 5.4 Replacement Certificate. When the Articles of Incorporation are amended in any way affecting the statements contained in the certificates for outstanding shares of capital stock of the Corporation or it becomes desirable for any reason, in the discretion of the Board of Directors, including, without limitation, the merger of the Corporation with another corporation or the conversion or reorganization of the Corporation, to cancel any outstanding certificate for shares and issue a new certificate therefor conforming to the rights of the holder, the Board of Directors may order any holders of outstanding certificates for shares to surrender and exchange the same for new certificates within a reasonable time to be fixed by the Board of Directors. The order may provide that a holder of any certificate(s) ordered to be surrendered shall not be entitled to vote, receive distributions or exercise any other rights of stockholders of record until the holder has complied with the order, but the order operates to suspend such rights only after notice and until compliance.
Section 5.5 Transfer of Shares. No transfer of stock shall be valid as against the Corporation except on surrender and cancellation of any certificate(s) therefor accompanied by an assignment or transfer by the registered owner made either in person or under assignment. Whenever any transfer shall be expressly made for collateral security and not absolutely, the collateral nature of the transfer shall be reflected in the entry of transfer in the records of the Corporation.
Section 5.6 Transfer Agent; Registrars. The Board of Directors may appoint one or more transfer agents, transfer clerks and registrars of transfer and may require all certificates for shares of stock to bear the signature of such transfer agents, transfer clerks and/or registrars of transfer.
Section 5.7 Miscellaneous. The Board of Directors shall have the power and authority to make such rules and regulations not inconsistent herewith as it may deem expedient concerning the issue, transfer, conversion and registration of certificates for shares of stock of the Corporation.
ARTICLE VI
DISTRIBUTIONS
Distributions may be declared, subject to the provisions of the laws of the State of Nevada and the Articles of Incorporation, by the Board of Directors and may be paid in money, shares of corporate stock, property or any other medium not prohibited under applicable law. The Board of Directors may fix in advance a record date, in accordance with and as provided in Section 2.5, prior to the distribution for the purpose of determining stockholders entitled to receive any distribution.
ARTICLE VII
RECORDS AND REPORTS; CORPORATE SEAL; FISCAL YEAR
Section 7.1 Records. All original records of the Corporation shall be kept at the principal office of the Corporation by or under the direction of the secretary or at such other place or by such other person as may be prescribed by law, these Bylaws or the Board of Directors. Any records maintained by the Corporation in the regular course of its business may be maintained on any information storage device or method that can be converted into clearly legible paper form within a reasonable time. The Corporation shall convert any records so kept on the written request of any person entitled to inspect such records pursuant to applicable law.
Section 7.2 Corporate Seal. The Board of Directors may, by resolution, authorize a seal, and the seal may be used by causing it, or a facsimile, to be impressed or affixed or reproduced or otherwise. Except when otherwise specifically provided herein, any officer of the Corporation shall have the authority to affix the seal to any document requiring it.
Section 7.3 Fiscal Year-End. The fiscal year-end of the Corporation shall be such date as may be fixed from time to time by resolution of the Board of Directors.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification and Insurance.
(a) Indemnification of Directors and Officers.
(i) For purposes of this Article VIII, an “Indemnitee” means each director or officer of the Corporation who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding (as defined below), by reason of the fact that he or she is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of, or in any other capacity for, another corporation, partnership, joint venture, limited liability company, trust, or other enterprise; and a “Proceeding” means any threatened, pending, or completed action, suit or proceeding (including, without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative, or investigative.
(ii) Each Indemnitee shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the laws of the State of Nevada, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding; provided that such Indemnitee either is not liable pursuant to NRS 78.138 or acted in good faith and in a manner such Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any Proceeding that is criminal in nature, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the Indemnitee is liable pursuant to NRS 78.138 or did not act in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, or that, with respect to any criminal proceeding he or she had reasonable cause to believe that his or her conduct was unlawful. The Corporation shall not indemnify an Indemnitee for any claim, issue or matter as to which the Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Corporation or for any amounts paid in settlement to the Corporation, unless and only to the extent that the court in which the Proceeding was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such amounts as the court deems proper. Except as so ordered by a court and for advancement of expenses pursuant to this Section 8.1, indemnification may not be made to or on behalf of an Indemnitee if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of law and was material to the cause of action. Notwithstanding anything to the contrary contained in these Bylaws, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder.
(iii) Indemnification pursuant to this Section 8.1 shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation or a director or officer of, or to serve in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise and shall inure to the benefit of his or her heirs, executors and administrators.
(iv) The expenses of Indemnitees must be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as such expenses are incurred and in advance of the final disposition of the Proceeding, upon receipt of an undertaking by or on behalf of such Indemnitee to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. To the extent that an Indemnitee is successful on the merits or otherwise in defense of any Proceeding, or in the defense of any claim, issue or matter therein, the Corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the defense.
(b) Indemnification of Employees and Other Persons. The Corporation may, by action of the Board of Directors and to the extent provided in such action, indemnify employees, agents and other persons as though they were Indemnitees.
(c) Non-Exclusivity of Rights. The rights to indemnification provided in this Article VIII shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or these Bylaws, agreement, vote of stockholders or directors, or otherwise.
(d) Insurance. The Corporation may purchase and maintain insurance or make other financial arrangements on behalf of any Indemnitee for any liability asserted against him or her and liability and expenses incurred by him or her in his or her capacity as a director, officer, employee, or agent, or arising out of his or her status as such, whether or not the Corporation has the authority to indemnify him or her against such liability and expenses.
(e) Other Financial Arrangements. The other financial arrangements which may be made by the Corporation may include, but are not limited to, the following: (i) the creation of a trust fund; (ii) the establishment of a program of self-insurance; (iii) the securing of its obligation of indemnification by granting a security interest or other lien on any assets of the Corporation; and (iv) the establishment of a letter of credit, guarantee or surety. No financial arrangement made pursuant to this subsection may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud, or a knowing violation of law, except with respect to advancement of expenses or indemnification ordered by a court.
(f) Other Matters Relating to Insurance or Financial Arrangements. Any insurance or other financial arrangement made on behalf of a person pursuant to this Section 8.1 may be provided by the Corporation or any other person approved by the Board of Directors, even if all or part of the other person’s stock or other securities is owned by the Corporation. In the absence of fraud, (i) the decision of the Board of Directors as to the propriety of the terms and conditions of any insurance or other financial arrangement made pursuant to this Section 8.1 and the choice of the person to provide the insurance or other financial arrangement is conclusive; and (ii) the insurance or other financial arrangement is not void or voidable and does not subject any director approving it to personal liability for his action; even if a director approving the insurance or other financial arrangement is a beneficiary of the insurance or other financial arrangement.
Section 8.2 Amendment. Notwithstanding any other provision of these Bylaws relating to their amendment generally, any repeal or amendment of this Article VIII which is adverse to any Indemnitee shall apply to such Indemnitee only on a prospective basis, and shall not limit the rights of an Indemnitee to indemnification with respect to any action or failure to act occurring prior to the time of such repeal or amendment.
ARTICLE IX
CHANGES IN NEVADA LAW
References in these Bylaws to the laws of the State of Nevada or the NRS or to any provision thereof shall be to such law as it existed on the date these Bylaws were adopted or as such law thereafter may be changed; provided that (i) in the case of any change which expands the liability of directors or officers or limits the indemnification rights or the rights to advancement of expenses which the Corporation may provide in Article VIII, the rights to limited liability, to indemnification and to the advancement of expenses provided in the Articles of Incorporation and/or these Bylaws shall continue as theretofore to the extent permitted by law; and (ii) if such change permits the Corporation, without the requirement of any further action by stockholders or directors, to limit further the liability of directors or limit the liability of officers or to provide broader indemnification rights or rights to the advancement of expenses than the Corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.
ARTICLE X
AMENDMENT OR REPEAL
Section 10.1 Amendment of Bylaws.
(a) Board of Directors. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to amend or repeal these Bylaws or to adopt new bylaws as they deem necessary.
(b) Stockholders. Notwithstanding Section 10.1(a), and subject to the Articles of Incorporation, these Bylaws may be amended or repealed in any respect, and new bylaws may be adopted, in each case by the affirmative vote of the stockholders representing at least a majority of the votes eligible to be cast in an election of directors.
Remainder of Page Intentionally Left Blank
CERTIFICATION
The undersigned, as the duly elected Secretary of Polomar Health Services, Inc., a Nevada corporation, does hereby certify that the foregoing Amended and Restated Bylaws were duly adopted by the Board of Directors of the Corporation as the Amended and Restated Bylaws of the Corporation as of July 1, 2026.
| /s/ Timothy M. Papp | ||
| Name: | Timothy M. Papp, Secretary | |
Exhibit 10.1
POLOMAR HEALTH SERVICES, INC.
2026 EQUITY AND INCENTIVE COMPENSATION PLAN
(As Amended and Restated Effective July 1, 2026)
RECITALS:
This Plan was originally adopted as the Trustfeed Corp. 2024 Equity and Incentive Compensation Plan by the Board (as defined herein) on July 11, 2024, and approved by the Stockholders of the Company (as defined herein) on July 11, 2024. Following the change of the Company’s name to Polomar Health Services, Inc., the Plan was renamed the Polomar Health Services, Inc. 2026 Equity and Incentive Compensation Plan and was amended and restated by the Board effective July 1, 2026.
1. Purpose. The purpose of this Plan is to attract and retain officers, Non-Employee Directors, consultants, independent contractors and other key employees of the Company and its Subsidiaries and to provide to such persons incentives and rewards for performance.
2. Definitions. As used in this Plan:
(a) “10% Stockholder” means any person who owns (within the meaning of Section 422(b)(6) of the Code) more than ten percent of the total combined Voting Power of all classes of stock of the Company or any Subsidiary of the Company, within the meaning of Sections 424(e) and (f) of the Code.
(b) “Affiliate” means any corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Company as determined by the Committee or the Board, as applicable, in its discretion.
(c) “Appreciation Right” means a right granted pursuant to Section 6 of this Plan and will include both Free-Standing Appreciation Rights and Tandem Appreciation Rights.
(d) “Award” means an Option Right, Appreciation Right, Restricted Share, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, or other award as contemplated by Section 10 of this Plan.
(e) “Award Agreement” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the Awards granted under this Plan. An Award Agreement may be in an electronic medium, may be limited to notation on the books and records of the Company, and unless otherwise determined by the Committee, need not be signed by a representative of the Company or a Participant.
(f) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.
(g) “Board” means the board of directors of the Company.
(h) “Cash Incentive Award” means a cash award granted pursuant to Section 9 of this Plan.
(i) “Cause” has the same meaning as “cause” or “for cause” that may be set forth in an Award Agreement or employment, consulting, advisory or similar contract entered into by and between the Participant and the Company or any Affiliate or, in the absence of any such contract or defined terms, means (i) the commission of any act or acts of personal dishonesty intended to result in substantial personal enrichment to the Participant to the detriment of the Company or a Subsidiary or Affiliate; (ii) any willful, material violation by the Participant of any law or regulation applicable to the business of the Company or a Subsidiary or Affiliate; (iii) conviction of, or entering into a plea of nolo contendere to, a crime constituting a felony or in respect of any fraud or dishonesty; (iv) failure to perform the Participant’s responsibilities, provided that such failure has continued for more than ten days following written notice from the Company or a Subsidiary or Affiliate of such failure; (v) intentional, repeated, or continuing violation of any of the applicable policies or procedures of the Company or any Subsidiary or Affiliate that occurs or continues after notice to the Participant that the Participant has violated such policy or procedure; (vi) any action by the Participant which has a material detrimental effect on the reputation or business of the Company or any of its Subsidiaries or Affiliates; or (vii) any material breach of a written covenant or agreement with the Company or any Subsidiary or Affiliate, including the terms of this Plan or any material breach of fiduciary duty to the Company or any Subsidiary or Affiliate. For purposes of this definition, the Participant shall be considered to have been discharged for Cause if the Company or a Subsidiary or Affiliate determines within thirty days after the Participant’s resignation or discharge that discharge for Cause was warranted.
(j) “Change in Control” has the meaning set forth in Section 12 of this Plan.
(k) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(l) “Committee” means the Compensation Committee of the Board (or its successor(s)), or any other committee of the Board designated by the Board to administer this Plan pursuant to Section 3 of this Plan consisting solely of no fewer than two Non-Employee Directors or, if there be no such committee, the Board.
(m) “Common Shares” means the shares of common stock, par value $0.001 per share, of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type referred to in Section 11 of this Plan.
(n) “Company” means Polomar Health Services, Inc. (formerly known as Trustfeed Corp.), a Nevada corporation, and its successors.
(o) “Date of Grant” means the date specified by the Committee on which a grant of Awards will become effective (which date will not be earlier than the date on which the Committee (or its authorized delegate) takes action with respect thereto).
(p) “Detrimental Activity” has the meaning set forth in the applicable Award Agreement, or, where not defined in an Award Agreement, means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of the Company or any of its Subsidiaries or Affiliates; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Company or any of its Subsidiaries or Affiliates for Cause; (iii) the breach of any non-competition, non-solicitation, non-disparagement or other agreement containing restrictive covenants, with the Company or its Subsidiaries or Affiliates; (iv) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion; (v) any action by the Participant which has a material detrimental effect on the reputation of the Company or any of its Subsidiaries or Affiliates; or (vi) any other conduct or act determined to be materially injurious, detrimental or prejudicial to any interest of the Company or any of its Subsidiaries or Affiliates, as determined by the Committee in its sole discretion.
(q) “Director” means a member of the Board.
(r) “Disability” means, unless defined otherwise in an Award Agreement, as applicable, the Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months.
(s) “Effective Date” means the later of (i) the date this Plan is approved by the Stockholders of the Company and (ii) immediately after the consummation of those certain transactions contemplated by that Agreement and Plan of Merger and Reorganization, dated as of June 28, 2024, by and among the Company, Polomar Acquisition, L.L.C., a Florida limited liability company and wholly owned subsidiary of the Company and Polomar Specialty Pharmacy, LLC, a Florida limited liability company.
(t) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(u) “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Section 6 of this Plan that is not granted in tandem with an Option Right.
(v) “Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock options” under Section 422 of the Code or any successor provision.
(w) “Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Awards. Management Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of one or more of the Subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its Subsidiaries. The Management Objectives may be made relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. Management Objectives may include, but are not limited to profits, cash flow, returns, working capital, profit margins, liquidity measures, sales, margin, cost initiative and stock price metrics, and strategic initiative key deliverable metrics.
(x) “Market Value per Share” means, as of any particular date, the closing price of a Common Share as reported for that date on any national securities exchange on which the Common Shares are listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common Shares, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee, which may be the closing price quoted on the OTC Markets or other interdealer quotation system or other listing service. The Committee is authorized to adopt another fair market value pricing method, provided that such method is stated in the Award Agreement and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(y) “Non-Employee Director” means a person who is a “Non-Employee Director” of the Company within the meaning of Rule 16b-3 promulgated under the Exchange Act.
(z) “Option Price” means the purchase price payable on exercise of an Option Right.
(aa) “Option Right” means the right to purchase Common Shares upon exercise of an option granted pursuant to Section 5 of this Plan.
(bb) “Optionee” means the optionee named in an Award Agreement evidencing an outstanding Option Right.
(cc) “Participant” means a person who is selected by the Committee to receive benefits under this Plan and who is at the time (i) an officer or other key employee of the Company or any Subsidiary; (ii) a person who provides services to the Company or a Subsidiary that are equivalent to those typically provided by an employee, including a consultant or independent contractor; or (iii) a Non-Employee Director.
(dd) “Performance Period” means, in respect of an Award, a period of time established by the Committee within which the Management Objectives relating to such Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Shares, dividend equivalents or other awards contemplated by Section 10 of this Plan are to be achieved.
(ee) “Performance Share” means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 9 of this Plan.
(ff) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 9 of this Plan of the right to receive one Common Share subject to vesting conditions based on the achievement of one or more Management Objectives set forth in an Award Agreement.
(gg) “Plan” means this 2026 Equity and Incentive Compensation Plan.
(hh) “Restricted Shares” means Common Shares granted or sold pursuant to Section 7 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.
(ii) “Restricted Stock Units” means an award made pursuant to Section 8 of this Plan of the right to receive Common Shares, cash or a combination thereof at the end of a specified period.
(jj) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 8 of this Plan.
(kk) “Retirement” shall have such meaning, if any, as may be set forth in an Award Agreement.
(ll) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively.
(mm) “Stockholder” means an individual or entity that owns one or more Common Shares.
(nn) “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are; or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, or unincorporated association), but more than 50% of whose ownership interEDT representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which at the time the Company owns or controls, directly or indirectly, more than 50% of the total combined Voting Power represented by all classes of stock issued by such corporation.
(oo) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 6 of this Plan that is granted in tandem with an Option Right.
(pp) “Voting Power” means at any time, the combined voting power of the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company, or members of the board of directors or similar body in the case of another entity.
3. Administration of this Plan.
(a) This Plan will be administered by the Committee. The Committee may from time to time delegate all or any part of its authority under this Plan to a subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee.
(b) The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.
(c) To the extent permitted by law, the Committee may delegate to one or more of its members or to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as the Committee: (i) designate employees to be recipients of Awards under this Plan; and (ii) determine the size of any such Awards; provided, however, that (A) the Committee will not delegate such responsibilities to any such officer for awards granted to an employee who is an officer, Director, or more than 10% beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization sets forth the total number of Common Shares such officer(s) may grant; and (C) the officer(s) will report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated.
4. Shares Available Under this Plan.
(a) Maximum Shares Available Under Plan.
(i) Subject to adjustment as provided in Section 11 of this Plan, the number of Common Shares that may be issued or transferred with respect to Awards made under this Plan will not exceed in the aggregate 5,000,000 Common Shares, plus any Common Shares that become available under this Plan as a result of forfeiture, cancellation, expiration, or cash settlement of Awards, as provided in Section 4(b) below, plus any Common Shares made available to the Company by virtue of acquiring a company with a pre-approved plan, plus any Common Shares that become available pursuant to Section 4(a)(iii) below. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing.
(ii) Subject to adjustment as provided in Section 11 of this Plan, the aggregate number of Common Shares available for issuance or transfer under Section 4(a)(i) of this Plan will be reduced by one Common Share for every Common Share issued or transferred upon exercise of an Option Right or Appreciation Right granted under this Plan or issued or transferred in connection with an award other than an Option Right or Appreciation Right granted under this Plan.
(iii) The aggregate number of Common Shares authorized to be awarded under Section 4(a) will automatically increase on January 1 of each year, commencing on January 1 of the year following the year in which the Effective Date occurs and ending on (and including) January 1, 2033, in an amount equal to 3 percent (3%) of the total number of Common Shares outstanding on December 31 of the immediately preceding calendar year, excluding for this purpose any such outstanding Shares that were granted under the Plan and remain nonvested and subject to forfeiture as of the relevant December 31. Notwithstanding the foregoing, the Board may act prior to January 1 of a given year to provide that there will be no January 1 increase for such year or that the increase for such year will be a lesser number of Shares than provided herein
(b) Share Counting Rules.
(i) Subject to adjustment as provided in Section 11 of this Plan, if any Common Shares issued or transferred pursuant to an Award granted under this Plan are forfeited, or an Award granted under this Plan is cancelled or forfeited, expires or is settled for cash (in whole or in part), then such Common Shares or the Common Shares underlying such Award will, to the extent of such cancellation, forfeiture, expiration, or cash settlement, be available for issuance or transfer under Section 4(a) above.
(ii) Notwithstanding anything to the contrary contained in this Section 4, the following Common Shares will not be added to the aggregate number of Common Shares available for issuance or transfer under Section 4(a) above: (A) Common Shares tendered or otherwise used in payment of the Option Price of an Option Right; (B) Common Shares withheld or otherwise used by the Company to satisfy a tax withholding obligation; and (C) Common Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights.
(c) Limit on Incentive Stock Options. Notwithstanding anything in this Section 4, or elsewhere in this Plan, to the contrary and subject to adjustment as provided in Section 11 of this Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 100,000 Common Shares.
(d) Individual Participant Limits. Notwithstanding anything in this Section 4, or elsewhere in this Plan, to the contrary, and subject to adjustment as provided in Section 11 of this Plan:
(i) No Participant will be granted Option Rights and/or Appreciation Rights, in the aggregate, for more than 500,000 Common Shares during any calendar year.
(ii) No Non-Employee Director will be granted, in any period of one calendar year, Awards under this Plan valued in excess of $1,000,000.
(iii) To the extent that the aggregate Market Value per Share (determined as of the applicable Date of Grant) of the Common Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Subsidiaries) exceeds $100,000, such Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Options that are not Incentive Stock Options, in accordance with Section 422(d) of the Code.
(e) Minimum Vesting Period. Except as may be set forth in an Award Agreement, all Awards shall not vest until a minimum of six (6) months has passed from the Date of Grant. During this vesting period, the Participant must continue to provide services to the Company.
5. Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which it pertains subject to the limitations set forth in Section 4 of this Plan.
(b) Each grant will specify an Option Price per share, which may not be less than the Market Value per Share on the Date of Grant, provided, however, that, in the case of a 10% Stockholder, the exercise price of an Incentive Stock Option shall not be less than 110% of the Market Value per Share of the Common Shares on the grant date.
(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of Common Shares owned by the Optionee (or other consideration authorized pursuant to Section 5(d) of this Plan) having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, by the Company’s withholding of Common Shares otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Common Shares so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee.
(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the shares to which such exercise relates.
(e) Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.
(f) Each grant may specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary that is necessary before the Option Rights or installments thereof will become exercisable, and any such grant may provide for the earlier exercise of such Option Rights, including in the event of the Retirement, death or Disability of a Participant or a Change in Control.
(g) Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such rights.
(h) Option Rights granted under this Plan may be (i) options, including, without limitation, Incentive Stock Options that are intended to qualify under particular provisions of the Code, (ii) options that are not intended so to qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
(i) The exercise of an Option Right will result in the cancellation on a share-for-share basis of any Tandem Appreciation Right authorized under Section 6 of this Plan.
(j) Award Agreements for Option Rights shall set forth the term of such Option Rights, provided that no Option Right will be exercisable more than 10 years from the Date of Grant (five years from the Date of Grant in the case of an Incentive Stock Option granted to a 10% Stockholder).
(k) Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(l) Each grant of Option Rights will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Award Agreements for Incentive Stock Options may set forth additional provisions when granted to a 10% Stockholder.
6. Appreciation Rights.
(a) The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting (i) to any Optionee, of Tandem Appreciation Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related Option Right, to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. Tandem Appreciation Rights may be granted at any time prior to the exercise or termination of the related Option Rights; provided, however, that a Tandem Appreciation Right awarded in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. A Free-Standing Appreciation Right will be a right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(i) Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, Common Shares or any combination thereof.
(ii) Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Committee at the Date of Grant.
(iii) Any grant may specify waiting periods before exercise and permissible exercise dates or periods.
(iv) Each grant of Appreciation Rights may specify the period or periods of continuous service by the Participant with the Company or any Subsidiary that is necessary before the Appreciation Rights or installments thereof will become exercisable, and any such grant of Appreciation Rights may provide for the earlier exercise of such Appreciation Rights, in the event of the Retirement, death or Disability of a Participant or a Change in Control.
(v) Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights.
(vi) Each grant of Appreciation Rights will be evidenced by an Award Agreement, which Award Agreement will describe such Appreciation Rights, identify the related Option Rights (if applicable), and contain such other terms and provisions, consistent with this Plan, as the Committee may approve.
(c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights may be exercised only at a time when the related Option Right is also exercisable and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation. Successive grants of Tandem Appreciation Rights may be made to the same Participant, regardless of whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised.
(d) Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(e) Regarding Free-Standing Appreciation Rights only:
(i) each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which may not be less than the Market Value per Share on the Date of Grant;
(ii) successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and
(iii) no Free-Standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant.
7. Restricted Shares. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Shares to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referenced.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Shares covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee at the Date of Grant or until achievement of Management Objectives referred to in subparagraph (e) below.
(d) Each such grant or sale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares will be prohibited or restricted in the manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management Objectives that, if achieved, will result in termination or early termination of the restrictions applicable to such Restricted Shares.
(f) Each grant of Restricted Shares may specify the period or periods of continuous service by the Participant with the Company or any Subsidiary that is necessary before the termination of restrictions on such Restricted Shares, and any such grant or sale of Restricted Shares may provide for the earlier termination of restrictions on such Restricted Shares, including in the event of the Retirement, death or Disability of a Participant or a Change in Control.
(g) Any such grant or sale of Restricted Shares may or may not require that any or all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and reinvested in additional Restricted Shares, which may be subject to the same restrictions as the underlying award; provided, however, that regular dividends or other distributions on Restricted Shares with restrictions that lapse as a result of the achievement of Management Objectives will be deferred until and paid contingent upon the achievement of the applicable Management Objectives.
(h) Each grant or sale of Restricted Shares will be evidenced by an Award Agreement and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing Restricted Shares will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares; or (ii) all Restricted Shares will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Shares.
8. Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver Common Shares or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, subject to the fulfillment of such conditions (which may include the achievement of Management Objectives) during the Restriction Period as the Committee may specify.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) Each grant or sale of Restricted Stock Units may specify the period or periods of continuous service by the Participant with the Company or any Subsidiary that is necessary before the termination of restrictions on such Restricted Stock Units, and any such grant or sale of Restricted Stock Units may provide for the earlier lapse or other modification of the Restriction Period, including in the event of the Retirement, death or Disability of a Participant or a Change in Control.
(d) During the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the Common Shares deliverable upon payment of the Restricted Stock Units and will have no right to vote them, but the Committee may, at the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on either a current or deferred or contingent basis, either in cash or in additional Common Shares; provided, however, that regular dividend equivalents or other distributions on Common Shares underlying Restricted Stock Units with restrictions that lapse as a result of the achievement of Management Objectives will be deferred until and paid contingent upon the achievement of the applicable Management Objectives.
(e) Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in Common Shares or cash, or a combination thereof.
(f) Each grant or sale of Restricted Stock Units will be evidenced by an Award Agreement and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
9. Cash Incentive Awards, Performance Shares and Performance Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to Cash Incentive Awards, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Cash Incentive Award, Performance Share or Performance Unit will be such period of time as will be determined by the Committee at the time of grant, and any such grant of Performance Shares, Performance Units or Cash Incentive Award may provide for the earlier lapse or other modification, of the Performance Period, including in the event of the Retirement, death or Disability of a Participant or a Change in Control.
(c) Any grant of Cash Incentive Awards, Performance Shares or Performance Units will specify Management Objectives which, if achieved, will result in payment or early payment of the award, and each grant may specify in respect of such specified Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Performance Shares or Performance Units, or amount payable with respect to Cash Incentive Awards, that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels, but falls short of maximum achievement of the specified Management Objectives.
(d) Each grant will specify the time and manner of payment of Cash Incentive Awards, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Shares, in Restricted Shares or Restricted Stock Units or in any combination thereof.
(e) Any grant of Cash Incentive Awards, Performance Shares or Performance Units may specify that the amount payable or the number of Common Shares or Restricted Shares or Restricted Stock Units with respect thereto may not exceed a maximum specified by the Committee at the Date of Grant.
(f) The Committee may, at the Date of Grant of Performance Shares, provide for the payment of dividend equivalents to the holder thereof either in cash or in additional Common Shares, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning of the Performance Shares with respect to which such dividend equivalents are paid.
(g) Each grant of Cash Incentive Awards, Performance Shares or Performance Units will be evidenced by an Award Agreement and will contain such other terms and provisions, consistent with this Plan, as the Committee may approve.
10. Other Awards.
(a) Subject to applicable law and the applicable limits set forth in Section 4 of this Plan, the Committee may grant to any Participant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Shares or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, Affiliates or other business units thereof or any other factors designated by the Committee, and awards valued by reference to the book value of the Common Shares or the value of securities of, or the performance of specified Subsidiaries or Affiliates or other business units of the Company. The Committee will determine the terms and conditions of such awards, including any Management Objectives, if applicable. Common Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 10 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, Common Shares, other awards, notes or other property, as the Committee determines.
(b) Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section 10.
(c) The Committee may grant Common Shares as a bonus, or may grant other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code.
(d) Each grant of an award under this Section 10 may specify the period or periods of continuous services by the Participant with the Company or any Subsidiary that is necessary before such award is earned, vested, or no longer subject to applicable restrictions, and any grant of an award under this Section 10 may provide for the earlier earning or vesting of, or elimination of restrictions applicable to, such award, including in the event of the Retirement, death or Disability of the Participant or a Change in Control.
11. Adjustments. The Committee shall make or provide for such adjustments in the numbers of Common Shares covered by outstanding Awards, as applicable, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, in the kind of shares covered thereby, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, shall determine is equitably required to prevent dilution or enlargement of the rights of Participants or Optionees that otherwise would result from (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company; (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities; or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee shall provide in substitution for any or all outstanding Awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, shall determine to be equitable in the circumstances and shall require in connection therewith the surrender of all Awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its discretion elect to cancel such Option Right or Appreciation Right without any payment to the person holding such Option Right or Appreciation Right. The Committee shall also make or provide for such adjustments in the numbers of shares specified in Section 4 of this Plan as the Committee in its sole discretion, exercised in good faith, shall determine is appropriate to reflect any transaction or event described in this Section 11; provided, however, that any such adjustment to the number specified in Section 4(c) will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.
12. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by the Committee in an Award Agreement made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Effective Date) of any of the following events:
(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person(s)) “beneficial ownership” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the then-outstanding Common Shares of the Company;
(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) acquires “beneficial ownership” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company that, together with securities held by such person or group, constitutes more than 50% of the total Voting Power of the securities of the Company;
(c) any consolidation or merger to which the Company is a party, if following such consolidation or merger, Stockholders of the Company immediately prior to such consolidation or merger shall not beneficially own securities representing at least a majority of (i) the then-outstanding common stock and (ii) the combined Voting Power of the surviving or continuing corporation;
(d) any sale, lease, exchange or other transfer (in one transaction or in a series of related transactions occurring during the twelve-month period ending on the date of the most recent transaction) of substantially all of the assets of the Company, other than to an entity (or entities) of which the Company or the Stockholders of the Company immediately following such transaction beneficially own securities representing at least a majority of (i) the then-outstanding common equity and (ii) the combined Voting Power of the then-outstanding voting securities; or
(e) the Stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company.
For purposes of any Award or payment that provides for a deferral of compensation under Section 409A of the Code, to the extent the impact of a Change in Control on such award or payment would subject a Participant to additional taxes under Section 409A, a Change in Control for purposes of such Award or payment will mean both a Change in Control (as defined above) and a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5).
13. Detrimental Activity and Recapture Provisions; Clawback. Any Award Agreement may provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain related to an Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee from time to time, if a Participant, either (a) during employment or other service with the Company or a Subsidiary or (b) within a specified period after termination of such employment or service, shall engage in any Detrimental Activity. The Committee may also provide in an Award Agreement or otherwise that if the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), then the Participant shall be required to repay any such excess amount to the Company. Awards granted under this Plan shall be subject to the Company’s Dodd-Frank Clawback Policy, as amended from time to time, as well as any other Company policy regarding the recovery of erroneously granted compensation. Without limiting the foregoing, all Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with applicable laws and any clawback or recoupment policy adopted by the Company from time to time, including but not limited to any policies enacted pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or under Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded.
14. Non U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders.
15. Transferability.
(a) Except as otherwise determined by the Committee, no Award will be transferable by the Participant except by will or the laws of descent and distribution. In no event will any such Award be transferred for value. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by such Participant, or in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court supervision.
(b) The Committee may specify at the Date of Grant that part or all of the Common Shares that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units; or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7 of this Plan, will be subject to further restrictions on transfer.
16. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Common Shares, and such Participant fails to make arrangements for the payment of tax, then unless otherwise determined by the Committee, the Company will withhold Common Shares having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income and employment tax laws, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares required to be delivered to the Participant, Common Shares having a value equal to the amount required to be withheld or by delivering to the Company other Common Shares held by such Participant. The shares used for tax withholding will be valued at an amount equal to the Market Value per Share of such Common Shares on the date the benefit is to be included in Participant’s income. Participants will also make such arrangements as the Company may require for the payment of any withholding tax obligation that may arise in connection with the disposition of Common Shares acquired upon the exercise of Option Rights.
17. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owing by a Participant to the Company or any of its Subsidiaries.
(c) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good-faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code), the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the business day following the date that is six months following the date of such separation from service.
(d) If an amount is to be paid under this Plan in two or more installments, each installment shall be treated as a separate payment for purposes of Section 409A of the Code.
(e) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its Affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
18. Amendments.
(a) The Board may at any time and from time to time amend this Plan in whole or in part; provided, however, that if an amendment to this Plan (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the principal national securities exchange upon which the Common Shares are traded or quoted, then such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described in Section 11 of this Plan, the terms of outstanding Awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding Option Rights or Appreciation Rights in exchange for cash, other Awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval. This Section 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be amended without approval by the Stockholders.
(c) If permitted by Section 409A of the Code, but subject to the paragraph that follows, including in the case of termination of employment by reason of death, Disability or Retirement, or in the case of unforeseeable emergency or other special circumstances or in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any other Awards made pursuant to Section 10 subject to any vesting schedule or transfer restriction, or who holds Common Shares subject to any transfer restriction imposed pursuant to Section 15(b) of this Plan, the Committee may, in its sole discretion, accelerate the time at which such Option Right, Appreciation Right or other Award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards, Performance Shares or Performance Units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such Award.
(d) Subject to Section 18(b) hereof, the Committee may amend the terms of any Award theretofore granted under this Plan prospectively or retroactively. Subject to Section 11 and Section 17, no such amendment will materially impair the rights of any Participant without his or her consent, unless such amendment is necessary to comply with applicable law. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any Awards outstanding hereunder and not exercised in full on the date of termination.
19. Governing Law. This Plan and all grants and Awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Nevada.
20. Effective Date/Termination. This Plan will be effective as of the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Effective Date, but all grants made on or prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan.
21. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional Common Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.
(c) Except with respect to Section 21(e), to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights, and there will be no further effect on any provision of this Plan.
(d) No Award may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e) Absence on leave approved by a duly constituted officer of the Company or any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or Awards.
(f) No Participant will have any rights as a Stockholder with respect to any Common Shares subject to Awards granted to such Participant prior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Company.
(g) The Committee may condition the grant of any Award or combination of Awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
(h) Except with respect to Option Rights and Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of Common Shares under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts.
(i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any Award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect.
22. Stock-Based Awards in Substitution for Option Rights or Awards Granted by Other Company. Notwithstanding anything in this Plan to the contrary:
(a) Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The Awards so granted may reflect the original terms of the awards being assumed, substituted or converted and need not comply with other specific terms of this Plan, and may account for Common Shares substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.
(b) In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under a pre-existing plan previously approved by Stockholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for Awards made after such acquisition or merger under this Plan; provided, however, that Awards using such available shares may not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.
(c) Any Common Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) above will not reduce the Common Shares available for issuance or transfer under this Plan or otherwise count against the limits contained in Section 4 of this Plan. In addition, no Common Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) above will be added to the aggregate plan limit contained in Section 4 of this Plan.
End of Plan; Remainder of Page Intentionally Blank
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Terrence M. Tierney, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Polomar Health Services, Inc. | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respect the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ Terrence M. Tierney | |
| Terrence M. Tierney | |
| Interim Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Douglas Beck, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Polomar Health Services, Inc. | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respect the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ Douglas Beck | |
| Douglas Beck | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Polomar Health Services, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terrence M. Tierney, President of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the company.
| /s/ Terrence M. Tierney | |
| Terrence M. Tierney | |
Interim CEO (Principal Executive Officer) | |
| August 14, 2026 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Polomar Health Services, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas Beck, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the company.
| /s/ Douglas Beck | |
| Douglas Beck | |
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | |
| August 14, 2026 |