Psychemedics (PMD) Proxy Filing summary

Executive summary

• The proxy statement seeks shareholder approval for a series of proposals, including a reverse/forward stock split, a stock purchase agreement, and delisting/deregistration from the Nasdaq and SEC reporting requirements, as part of a plan to transition to private company status.

• The transaction is designed to reduce the number of record holders below 300, enabling the company to cease public reporting and realize estimated annual cost savings of $845,000.

• Shareholders with fewer than 4,000–6,000 shares will be cashed out at $2.35 per share, while larger holders retain their shares post-split.

• The board and an independent transaction committee, supported by a fairness opinion from Mirus Securities, determined the transaction is fair and in the best interests of all stockholders.

Voting matters and shareholder proposals

• Proposals include re-election of directors, advisory vote on executive compensation, ratification of the new auditor, approval of the reverse and forward stock splits, ratification of the stock purchase agreement, and potential adjournment of the meeting.

• Approval of the transaction proposals is required for the stock split and stock purchase agreement to proceed.

• The board recommends voting “FOR” all proposals.

Board of directors and corporate governance

• The board consists of five directors, with four independent members and one employee director.

• The board has Audit, Compensation, and Nominating and Corporate Governance Committees, all comprised of independent directors.

• The Stock Purchase Agreement grants 3K Limited Partnership the right to nominate two directors, with the board size capped at five.

• Diversity and annual self-evaluation are emphasized, and the board leadership structure separates the roles of chairman and CEO.