🧾 What This Document Is

This is a PRELIMINARY PROXY STATEMENT (a "pre-proxy"). Think of it as a detailed "meeting agenda" and "voter guide" that Dermata Therapeutics is sending to its shareholders before their annual meeting. It’s preliminary, meaning the final details might be tweaked. Its job is to explain what shareholders will vote on and give them the info needed to make informed decisions.

👉 In short: It's not an earnings report. It's a document asking shareholders to vote on specific company decisions.

📅 The Meeting & Logistics

The Annual Meeting of Stockholders will be held virtually on May 27, 2026, at 9:00 a.m. Pacific Time. You can't go in person; you must register online beforehand.

• Record Date: You must own shares by March 30, 2026, to vote.
• How to Vote: You can vote online before the meeting, by phone, or by mail. Your vote is important to reach a "quorum" (the minimum number of shares needed to make decisions).
• Quorum Requirement: At least one-third of the voting power must be present.

🗳️ The 7 Proposals You Vote On

This is the core of the document. Shareholders are being asked to vote "FOR" or "AGAINST" these items:

1. Elect 3 Directors: Choose board members who will serve until 2029.
2. Ratify the Auditor: Approve CBIZ CPAs P.C. as the company's accountant for 2026. This is routine but important for oversight.
3. Approve a Major Stock Issuance: This is a key proposal. It asks to approve issuing stock from warrants that, in total, represent 20% or more of the company's current shares. Nasdaq requires this specific shareholder approval for such a large potential dilution.
4. Approve Warrant Repricing: Change the price of existing warrants (options to buy stock) for 120,734 shares. This is often done to make the warrants valuable again if the stock price has fallen.
5. Increase the Employee Stock Pool: Amend the 2021 Omnibus Equity Incentive Plan to increase the total shares available for employee/ director grants to 402,214 shares. More shares for compensation.
6. Approve Adjournment: Allow the meeting to be postponed if there aren't enough votes for Proposals 3, 4, or 5. This gives the company more time to solicit votes.
7. Other Business: Any other matters that come up.

👉 Why These Matter: Proposals 3, 4, and 5 are the most significant. They involve raising capital (via warrants), adjusting financing terms, and reserving more stock for compensation—all of which affect shareholder value and dilution. The board recommends voting FOR all proposals.

🏢 Who Runs Dermata?

Dermata is a clinical-stage biopharmaceutical company based in San Diego. In simple terms, they are a drug development company focused on dermatology (skin conditions). They don't have a marketed product yet; their value is tied to their pipeline of potential treatments.

• CEO & Chairman: Gerald T. Proehl (also a founder, ~17% voting power).
• Board: The board has 7 members up for election or serving.
• Business Model: They spend money on research & development (R&D) to advance their drug candidates through clinical trials, hoping to eventually get them approved and sold.

💰 Executive Pay Snapshot

The filing discloses 2025 pay for its top executives (Named Executive Officers):

• Gerald T. Proehl (CEO): Total comp $472,515 (Salary: $280,000 + Bonus: $140,000 + Options: $52,515). Note: His 2025 bonus is deferred until a future financing milestone is hit.
• Kyri Van Hoose (CFO): Total comp $508,535.
• Christopher Nardo (Chief Development Officer): Total comp $537,105.

👉 Insight: A significant portion of their pay is in stock options, which only have value if the company's stock price rises, aligning their interests with shareholders.

📦 Company Financial & Stock Snapshot

• Shares Outstanding: 4,022,143 shares of Common Stock as of March 30, 2026.
• No 5%+ Shareholders Listed: The "Security Ownership" table is cut off, but the provided text suggests no individual or entity other than management is listed as owning 5% or more of the company in this section.
• Equity Plan: Almost no shares (13) are left in the current employee stock plan, which is why Proposal 5 to increase the pool is necessary.

⚖️ Governance & Risks

• Board Structure: The CEO, Gerald Proehl, is also the Chairman. The board believes this structure works given his deep knowledge.
• Key Committees: Audit, Compensation, and Nominating & Corporate Governance committees handle specific oversight duties.
• Anti-Hedging Policy: Insiders are prohibited from financial transactions that would lock in the value of their shares without the full risk/reward of ownership.
• Risk Oversight: The Board oversees major risks, from financial and cybersecurity to executive compensation and conflicts of interest.

🔮 What's Next & Strategic Direction

The immediate next step is the May 27, 2026, virtual meeting. The outcomes of the votes will determine:

• The composition of the board.
• The company's ability to proceed with a major financing (Proposal 3).
• Whether they can reprice warrants to support their capital structure (Proposal 4).
• The size of the employee stock pool for future hiring and retention (Proposal 5).

The proposals, especially 3 and 4, signal the company is actively managing its financing to fund ongoing operations and R&D.

🧠 The Analogy

Think of this proxy statement like the agenda and voter pamphlet for a small town's annual council meeting. The townspeople (shareholders) are being asked to:

1. Re-elect some council members.
2. Approve the town's accountant.
3. Vote on a big loan agreement that will affect everyone's share of the town's assets.
4. Adjust the terms of some existing IOUs.
5. Decide how much "town credit" can be given to town employees as bonuses.

🧩 Final Takeaway

This is a financing-centric proxy for a small biotech. The most critical items for shareholders are Proposals 3, 4, and 5, which are about raising capital, adjusting debt-like instruments, and increasing compensation pools—all essential actions for a pre-revenue company to fund its drug development path. The board strongly recommends approving all these measures to support the company's continued operations and strategy.