Voice Health Institute

“The board of directors reviews and approves the form 990 prior to its filing. The form 990 is then authorized and signed by the organization's president.”

“The conflict of interest policy is provided to board members upon election to the board of directors. It is then distributed annually along with the disclosure pages.”

“Vhi's board of directors is responsible for establishing and maintaining a competitive compensation program for key employees, which falls within a reasonable range of competitive practices for comparable positions among similarly situated organizations. During fy 2015, the board of directors determined that an executive director was no longer needed to run the organization and shifted to the position of operations manager to provide administrative support and organizational oversight. Compensation for the operations manager is determined by the board, which meets on an as needed basis to discuss performance and make recommendations for any changes, as appropriate.”

“The organization's governing documents, conflict of interest policy, and financial statements are available upon request.”

“During fy 2020, the vhi board approved a program-related investment in innovoyce, llc, a delaware limited liability company ("innovoyce"), which was formed to develop and commercialize innovations in the care and treatment of voice disorders. After careful due diligence and consultation with counsel, the board determined that this potentially groundbreaking research would further vhi's mission of advancing laryngology and voice restoration. With this determination, the vhi board unanimously approved the issuance of a convertible promissory note (the note") in the aggregate principal amount of $4,000,000 which accrues simple interest at a rate of 6% per year payable upon maturity or conversion of the note. During fy 2021, a second convertible promissory note (the note") in the aggregate principal of $3,000,000 was issued to innovoyce carrying substantially similar terms. Vhi does not currently have a policy on ancillary joint ventures. With the advice of counsel and its auditor, the vhi board considered the note as analogous to a program-related investment within the meaning of internal revenue code section 4944. Because the investment in innovoyce was structured as a loan, the board did not consider the relationship with the llc to be a joint venture.”

“Valuation adjustment of innovoyce -237,122.”

“The valuation adjustment of innovoyce related to the following transaction which vhi entered into related to program specific investments: on november 1, 2019, the organization entered into a convertible note purchase agreement with innovoyce. Pursuant to the terms of the note purchase agreement, innovoyce issued to the organization, in a private placement, a convertible promissory note in the aggregate principal amount of $4,000,000 (the note). The note was unsecured and accrued simple interest at the rate of 6% per annum. Events of default under the note include violations or breaches of the note or the note purchase agreement, defaults in other innovoyce indebtedness, a bankruptcy filing made by innovoyce, or an involuntary petition is filed against it. Unless earlier repaid or converted, the note was set to mature on the one-year anniversary after the organization makes a written request for repayment of the note, which may be made only on, or at any time after, the maturity date of november 1, 2023. On february 15, 2021, the organization and innovoyce entered into a second note purchase agreement in the amount of $3,000,000 with the same general terms and conditions of original note (the second note). Unless earlier repaid or converted, the second note matures on the one-year anniversary after the organization makes a written request for repayment of the second note, which may be made only on, or at any time after, the maturity date of february 15, 2025. On june 28, 2022 (the initial closing date), the organization, innovoyce and two other investors (the purchasers) closed the transactions contemplated by the unit purchase agreement dated as of june 28, 2022, entered into between the parties (the purchase agreement). Pursuant to the terms of the purchase agreement, innovoyce issued in a private placement an aggregate of 2,368,715 units of innovoyce, of which 1,661,958 units were issued to the purchasers in consideration for a cash purchase price of approximately $2,000,000, and 706,757 units (the vhi units) were issued to the organization in consideration for the conversion in full of all principal and accrued interest under the note and second note in the aggregate amount of $7,868,438. At the initial closing date, the note and second note were deemed to be terminated, and the organization had no further rights under the note and second note. Innovoyce had the right under the purchase agreement to sell up to an additional 4,154,970 units at a purchase price of $1.2034 per unit for a period of ninety days following the initial closing date (or such longer period as innovoyce's board may determine in its sole discretion). Pursuant to the terms of the purchase agreement, the organization and the purchasers were granted information rights providing them with annual and quarterly financial statements of innovoyce, as well as inspection rights with respect to innovoyce's properties, books and records. The purchasers (but not the organization) were also granted preemptive rights with respect to any issuances of securities by innovoyce. In addition, on the initial closing date, the organization, the purchasers and the other members of innovoyce entered into an amended and restated operating agreement of innovoyce (the operating agreement), which sets forth various rights, agreements and obligations of the parties, including, but not limited to, voting rights, restrictions on transfer of the units (subject to certain limited exceptions), distributions, and that innovoyce shall be managed by a board of managers (the board of managers). The board of managers shall initially consist of five individuals. For so long as the organization is a member of innovoyce and owns at least 530,067 units (subject to adjustment upon any unit split, recapitalization or other similar event), all members have agreed to vote their units to elect as a member of the board of managers one individual designated or nominated by the organization. The member”

“The board also considered that prior to the organization's previous investments in innovoyce, all made to support the wider field of laryngology through a more broad accessibility of such innovations in voice care and restoration, the organization had no such equity share or revenue from any other source; that the funds previously invested by the organization in innovoyce, if not so invested, would simply have been otherwise committed to the subject research; that notwithstanding the cash flow difficulties of innovoyce, that the core voice restoring and treating innovations and products of innovoyce, and the extensive research achieved to date through innovoyce, remained deeply supportive of the organization's mission; and, with new corporate leadership coming into innovoyce, also as assessed by the investment committee, as well as the subject financing, there appeared to be good opportunity for innovoyce's success. Also, in this context, the board concluded that there was not a meaningful alternative as failure of innovoyce in the absence of this financing would create a complete loss of the organization's investment. Following consideration of these factors, the board voted unanimously to move forward as described with the requirements that the organization's converted equity share will not be less than 9.72%, and that the organization's as-converted equity share will exceed 9.72%, proportionately, consistent with the innovoyce unit financing pro forma cap table, for funding which totals less than $7 million; and that the organization's representative seat on the board of innovoyce be protected. Each of these requirements was met and the organization's counsel handled the communication and execution of the transaction.”