Psychemedics : 2023 Proxy Statement

July 20, 2023

Dear Fellow Stockholders:

First and foremost, we would like to express our sincere appreciation for your continued support as a Psychemedics shareholder. 2022 was another year of macroeconomic volatility that impacted the hiring practices of our customers. Our diverse and experienced Board provided strategic oversight to help us navigate the challenges of 2022 and into 2023 and beyond.

Psychemedics is committed to a Board composition that reflects an effective mix of business expertise, company knowledge, and diverse perspectives. This year marks a new chapter in the Psychemedics story as the Company has recently hired Brian Hullinger as its new Chief Executive Officer who will take over that role immediately following the Annual Meeting. He is also a nominee for director.

Psychemedics values the feedback of our shareholders and seeks opportunities to engage on company performance, strategy, and governance, among other topics.

We cordially invite you to attend the Annual Meeting of Stockholders, which will be held at the Hyatt Regency Boston Harbor, 101 Harborside Drive, Boston, MA 02128 on August 17, 2023, at 10:00 A.M. Eastern Time.

Details regarding the business to be conducted are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. In addition, we will also have plenty of time following the meeting for your questions and comments. I believe that the Annual Meeting provides an excellent opportunity for stockholders to become better acquainted with the Company and its directors and officers. I hope that you will be able to attend.

Your vote is important. Whether or not you plan to attend the Annual Meeting of Stockholders, I hope that you will vote as soon as possible. Please review the instructions on each of your voting options described in the Proxy Statement.

Sincerely,

Raymond C. Kubacki

Chairman, Chief Executive Officer, and President

PSYCHEMEDICS CORPORATION

289 Great Road, Suite 200

Acton, Massachusetts 01720

978-206-8220

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

July 20, 2023

The Annual Meeting of Stockholders will be held on August 17, 2023, at 10:00 a.m. Eastern Time at the Hyatt Regency Boston Harbor, 101 Harborside Drive, Boston, MA 02128. The Annual Meeting will be for the following purposes, as more fully described in the proxy statement (the "Proxy Statement"):

1. To elect directors of the Company for the ensuing year and until their respective successors are chosen and qualified;
2. To conduct a non-binding advisory vote on the compensation of our named executive officers;
3. To ratify the Audit Committee's appointment of BDO USA, LLP as the Company's independent registered public accounting firm for the year ending December 31, 2023; and
4. To consider and act upon matters incidental to the foregoing and to transact such other business as may properly come before the Annual Meeting.

The Board of Directors has fixed the close of business on June 26, 2023, as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting of Stockholders.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on August 17, 2023: We have elected to provide access to our proxy materials by: (i) sending you this full set of proxy materials, including the proxy statement, our Annual Report for 2022, and a proxy card. Our Proxy Statement, Annual Report for 2022 and proxy card, are also available on the Internet that you may download and print by going to www.psychemedics.com/proxy.

We encourage you to review all of the important information contained in the proxy materials contained herein or accessed on our website at www.psychemedics.com/proxy before voting.

By order of the Board of Directors,

Patrick J. Kinney, Jr.,

Secretary

The Company's Annual Report for 2022 containing a copy of the Company's Form 10-K (excluding exhibits) for the year ended December 31, 2022, is enclosed herewith.

Please fill in, date, sign and mail promptly the accompanying proxy in the return

envelope furnished for that purpose, whether or not you plan to attend the Annual Meeting.

PSYCHEMEDICS CORPORATION

289 Great Road, Suite 200

Acton, Massachusetts 01720

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON AUGUST 17, 2023

You are receiving this communication because you hold shares in PSYCHEMEDICS CORPORATION (hereinafter, the "Company"). We have elected to provide access to our proxy materials by: (i) sending you this full set of proxy materials, including the proxy statement, our Annual Report for the year ended December 31, 2022, and a proxy card; and (ii) notifying you of the availability of these proxy materials on the internet that you may download and print by viewing www.psychemedics.com/proxy. We encourage you to review all of the important information contained in the proxy materials contained herein or accessed on our website at www.psychemedics.com/proxy before voting.

This statement is furnished to the stockholders of the Company in connection with management's solicitation of proxies to be used at the Annual Meeting of Stockholders on August 17, 2023, and at any adjournment or postponement of that meeting. The approximate date on which this proxy statement and accompanying proxy are being sent to stockholders of the Company is July 20, 2023. Each proxy delivered pursuant to this solicitation, or any proxy that you may download from www.psychemedics.com/proxy, is revocable at the option of the person executing the same by written notice delivered to the Secretary of the Company at any time before the proxy is voted. A stockholder who attends the Annual Meeting in person may revoke his or her proxy at that time and vote his or her shares if such stockholder so desires.

Most stockholders of the Company hold their shares through a stockbroker, bank, trustee or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholders of Record. If your shares are registered directly in your name with the Company's transfer agent, Computershare, you are considered the stockholder of record of those shares and these proxy materials are being sent directly to you by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to cast your vote in person at the Annual Meeting.

Beneficial Owner. If your shares are held in a stock brokerage account, by a bank, trustee or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your broker, trustee or nominee who is considered the stockholder of record of those shares. As the beneficial owner, you have the right to direct your broker, trustee or nominee on how to vote and are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting. Your broker, trustee or nominee is obligated to provide you with a voting instruction card for you to use.

The presence in person or by proxy of stockholders entitled to cast a majority of the outstanding shares, or 2,871,381 shares, shall constitute a quorum. However, if a quorum is not present, a vote of a majority of the votes properly cast will adjourn the Annual Meeting, whether or not a quorum is present. Under Nasdaq rules, if your broker holds your shares in its name and does not receive voting instructions from you, your broker has discretion to vote these shares on certain "routine" matters, including Proposal 3, the ratification of the Audit Committee's appointment of BDO USA, LLP as the Company's independent registered public accounting firm. However, on non-routine matters such as Proposal 1, the election of directors, or Proposal 2, the non-binding advisory vote concerning executive compensation, your broker must receive voting instructions from you, as it does not have discretionary voting power for these particular items. So long as the broker has discretion to vote on at least one proposal, these "broker non-votes" are counted toward establishing a quorum. When voted on "routine" matters, broker non-votes are counted toward determining the outcome of that "routine" matter. With respect to the election of Directors, the Company will treat votes withheld as shares that are present for purposes of determining a quorum. A plurality is required to elect Directors, so the five persons receiving the greatest number of votes will be elected. Withheld votes will not affect the outcome of the election. With respect to the ratification of the Audit Committee's appointment of BDO USA, LLP and the approval of the compensation of the Company's named executive officers, the Company will treat abstentions as shares that are present and entitled to vote. Since a majority of the shares represented at the meeting and entitled to vote is required for approval, abstentions will have the effect of a vote against approval of these proposals. These abstentions, however, are counted towards establishing a quorum for the Annual Meeting. If a broker indicates on a proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will not be considered as shares entitled to vote with respect to that matter. Accordingly, broker non-votes will have no effect on such a matter.

For stockholders of record, all shares represented by the proxies mailed to stockholders will be voted at the Annual Meeting in accordance with instructions given by the stockholders. If no choice is specified, the proxies will be voted FOR Proposal 1 - the election of the six nominees named under "Election of Directors," unless authority to do so is withheld with respect to one or more of the nominees, FOR Proposal 2 - approval, on an advisory and non-binding basis, of the compensation of the Company's named executive officers, FOR Proposal 3 - ratification of the Audit Committee's appointment of BDO USA, LLP for the year ending December 31, 2023, and in the discretion of the proxy holders upon such other business as may properly come before the Annual Meeting.

As of June 26, 2023, the Company had outstanding 5,742,761 shares of Common Stock. The Common Stock is the only type of security entitled to vote at the Annual Meeting. Each share of Common Stock entitles the holder of record thereof at the close of business on June 26, 2023, to one vote on each of the matters to be voted upon at the Annual Meeting.

PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting, directors are to be elected to hold office for the ensuing year and until their respective successors are chosen and qualified. The Company currently has a total of six directors, who were elected to serve until the 2023 Annual Meeting of Stockholders and until their successors have been duly elected and qualified. Messrs. Kubacki and Weinert have each retired from the Board, in each case to take effect as of the date of the 2023 Annual Meeting of Stockholders. The Board reduced the size of the Board to five, to take effect as of the 2023 Annual Meeting of Stockholders. Brian Hullinger, the Company's newly appointed Chief Executive Officer, has been nominated to fill the one vacancy in the Board. Altogether, the Board of Directors nominated five persons, of whom four are now directors of the Company, plus Mr. Hullinger, to serve until the next Annual Meeting of Stockholders and until their successors are elected and qualified. If the enclosed proxy, or any proxy that you may download from www.psychemedics.com/proxy is duly executed and received in time for the Annual Meeting, and unless authority to do so is withheld, it will be voted to elect as directors the following nominees: Robyn C. Davis, Brian Hullinger, Peter H. Kamin, Darius G. Nevin and Andrew M. Reynolds.

Each nominee has indicated his or her willingness to serve, if elected. It is the intention of the persons named as proxies to vote for the election of the nominees. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election, the persons named as proxies will vote the proxy for such substitutes, if any, as the present Board of Directors may designate. We have no reason to believe that any of the nominees will be unable to serve if elected. Other than Mr. Hullinger, whose employment agreement entered into on July 12, 2023 requires that he be nominated as a director to be elected at the 2023 Annual Meeting of Stockholders, the nominees have not been nominated pursuant to any arrangement or understanding with any person.

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BUSINESS EXPERIENCE OF NOMINEES

The following table sets forth certain information with respect to each of our current directors and nominees for director:

Name	Age	Position
Robyn C. Davis	61	Director and Nominee, Member of Audit, Nominating and
		Corporate Governance, and Compensation Committees
Brian J. Hullinger	56	Nominee
Peter H. Kamin	61	Director and Nominee, Member of Nominating and Corporate
		Governance, and Compensation Committees
Raymond C. Kubacki (1)	78	Chairman of the Board, Chief Executive Officer, President,
		Director
Darius G. Nevin	65	Director and Nominee, Member of Audit and Compensation
		Committees
Andrew M. Reynolds	55	Director and Nominee, Member of Audit, Nominating and
		Corporate Governance, and Compensation Committees
Fred J. Weinert (1)	76	Director, Member of Audit, Nominating and Corporate
		Governance, and Compensation Committees

1. Retiring from the Board as of the date of the Annual Meeting

All directors hold office until the next Annual Meeting of Stockholders or until their successors are elected.

Robyn C. Davis has been managing director of Angel Healthcare Investors, LLC, an early-stage investment group focused on medical devices, life sciences and specialty pharmaceutical companies since 2000. Additionally, she is a global Executive Coach at The Leadership Consortium. Prior to Angel Healthcare, Ms. Davis was a director of the merchant banking services practices for Barents Group, LLC, a strategy consultant at Bain & Company and a consultant at Computer Sciences Corporation. She currently serves as a director of Azenta Life Sciences (AZTA:Nasdaq-GS), a provider of life sciences sample management solutions, and Akston Biosciences, an early-stage company developing a novel fusion-protein platform for multiple conditions. Ms. Davis holds a B.A. in International Relations from Tufts University and an M.B.A. from Harvard Business School. She holds an Executive Masters Professional Director Certification from the American College of Corporate Directors. As a result of these and other professional experiences, Ms. Davis possesses particular knowledge and experience in value-creation, growth strategy, cost reduction, and leadership development that strengthens the Board's collective qualifications, skills and experience. Ms. Davis has been a director of the Company since 2021.

Brian J. Hullinger has been appointed as the Company's new Chief Executive Officer and President, to take effect as of the date of the Annual Meeting. He has served in a variety of sales and executive leadership roles over the past 30 years. Starting in 2016 he was the CEO of E-Verifile.com, Inc., a risk assessment, administrative support and workforce solutions company, until it was sold to Cisive, Inc. in 2018. E-Verifile offers employee screening, compliance awareness testing, access control, contractor badging, hosted training, and administrative support. From 2018 to 2023 he served as Cisive's CRO. From 2012 until 2016 Mr. Hullinger served in various leadership positions with First Advantage Corporation, an information technology company. From 1991 until 2012 he served in various revenue growth roles with Social Solutions, Inc., a management software company, Norstan Communications, Inc. (now doing business as BlackBox Network Services), a telecommunications equipment provider, and Automatic Data Processing, Inc. (Nasdaq: ADP), a global provider of business outsourcing solutions. Mr. As a result of these and other professional experiences, Mr. Hullinger possesses particular knowledge and experience in sales, marketing and corporate leadership that strengthen the Board's collective qualifications, skills and experience.

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