Business Context and Reporting Period
This Form 8-K filing by Palisade Bio, Inc. (PALI) reports corporate governance and compensation actions taken on September 4, 2025. The Company, incorporated in Delaware and headquartered in Carlsbad, California, is an emerging growth company listed on the Nasdaq Capital Market. The filing details the adoption of a new Phantom Unit Plan and the amendment of employment agreements for key executive officers.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. The document focuses exclusively on equity compensation structures and executive employment terms.
Material Changes and Compensation Actions
Phantom Equity Plan Adoption
The Board approved a Phantom Unit Plan exempt from NASDAQ shareholder vote requirements. The plan authorizes up to 10,000,000 cash-settled phantom units tied to the Company's common stock value. Grantees receive no ownership rights in the underlying shares. The plan has a ten-year term.
Initial Grants (September 4, 2025)
- J.D. Finley (CEO/CFO): 323,400 Phantom Units
- Mitchell Jones (CMO): 289,000 Phantom Units
- Ryker Willie (SVP Finance): 137,600 Phantom Units
- Board Chair: 64,400 Phantom Units
- Independent Directors: 37,600 Phantom Units each
Vesting and Settlement Terms
Executive units vest quarterly over three years (first vesting November 5, 2025). Director units vest annually over three years (first vesting August 5, 2026). Payments are triggered by liquidity events, termination without cause/good reason, or the 7th anniversary of the grant. Accelerated vesting applies to directors upon a Liquidity Change of Control.
Management Commentary and Employment Agreements
The Company amended employment agreements for three key executives, effective September 4, 2025. Full agreements will be filed as exhibits to the Form 10-Q for the quarter ending September 30, 2025.
Executive Compensation Summary
| Executive | Base Salary | Target Bonus | Severance (Outside Change in Control) | Severance (Change in Control Period) |
|---|---|---|---|---|
| J.D. Finley (CEO/CFO) |
$575,000 | 50% of base | 12 months salary + COBRA + 100% equity acceleration | 24 months salary + 2x bonus + COBRA + 100% equity acceleration |
| Ryker Willie (SVP Finance) |
$298,500 | 35% of base | 9 months salary + COBRA | 18 months salary + 1.5x bonus + COBRA + 100% equity acceleration |
| Mitchell Jones (CMO) |
$440,000 | 40% of base | 12 months salary + COBRA | 24 months salary + 2x bonus + COBRA + 100% equity acceleration |
All severance benefits are conditioned on the execution of a release and compliance with non-competition and non-solicitation covenants.
Investor Verification Checklist
- Phantom Unit Valuation: Verify the current fair market value of common stock to estimate the potential cash liability of the 10 million authorized phantom units.
- Equity Dilution Impact: Confirm whether the phantom units are cash-settled only or if they could be converted to stock, and review the impact on the Company's cash burn rate.
- Change in Control Definitions: Review the specific definition of "Liquidity Change of Control" in the Plan to understand the trigger points for accelerated vesting and lump-sum payments.
- Future Filings: Monitor the upcoming Form 10-Q for the quarter ending September 30, 2025, for the full text of the Phantom Unit Plan and amended employment agreements.
- Section 409A Compliance: Note the six-month delay provision for payments under Section 409A of the Internal Revenue Code, which may affect the timing of cash outflows.