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Item 9A. Controls and Procedures

2021-03-18 compared with 2020-03-19 · 340 added, 425 removed, 541 unchanged (59% of the section changed)

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Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the U.S.

Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives.

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Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

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This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to SEC rules that permit us to provide only management’s report in this Annual Report on Form 10‑K.

Changes in Internal Control Over Financial Reporting.

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Chairman of the Board of Directors

Schlesinger, M.D.(2)(4)

Jeremy Curnock Cook(1)(2)

Stewart Parker(1)(3)

Patti, Ph.D.(2)

Peterson, Ph.D.

Schlesinger, M.D.(2)(4)

(1) Member of the Audit Committee.

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Patrick has served as our Chief Executive Officer and as a director since the consummation of the Merger.

He previously served as President and Chief Executive Officer of C3J from 2010 until the consummation of the Merger, and as a member of C3J’s board of directors from 2009 until the consummation of the Merger.

Before joining C3J, Mr.

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Patrick has been involved in several start-ups and has helped raise over $600 million in equity or debt capital.

Patrick is the past Chairman of the Board of Trustees for the Seattle Biomedical Research Institute (now the Center for Infectious Disease Research), a 400-person, non-profit global health organization focused on creating new drugs and vaccines to treat infectious diseases in the developing world.

Patrick currently serves on the board of directors of CRH Medical Corporation (NYSE:

CRHM), where he has served since 2006 and is a member of the audit, corporate governance and nominating, and compensation committees;

AltPep Corporation;

and InvVax, Inc.

and AltPep Corporation.

He is also on the board of directors of the non-profit Foster Foundation.

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He started in discovery research where his team purified novel growth factors and advanced antibodies and small molecules into clinical studies.

also worked in development, assisting with clinical development of proteins, antibodies and small molecules.

Varnum also worked in development, assisting with clinical development of proteins, antibodies and small molecules.

In this capacity, he contributed to key regulatory filings, market research and product launch, giving him experience in drug discovery and development from the lab bench to product launch and marketing.

After retiring from Amgen Inc.

Varnum turned his focus to the start-up landscape, working in several capacities, including assisting investors, entrepreneurs and start-ups in the assessment of technologies for funding or in-licensing.

Varnum turned his focus to the start-up landscape, working in several capacities, including assisting investors,

entrepreneurs and start-ups in the assessment of technologies for funding or in-licensing.

In these capacities, he established research strategies and plans, and served as Chief Scientific Officer for several companies, securing funding, and executing research contracts with large and mid-sized pharmaceutical companies.

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Martin served as Senior Vice President and Chief Financial Officer of BakBone Software, a publicly traded software company.

During his final 10 months with BakBone until the company’s acquisition in January 2011, Mr.

Martin also served as BakBone’s Interim Chief Executive Officer.

During his final 10 months with BakBone until the company’s acquisition in January 2011, Mr.

Martin also served as BakBone’s Interim Chief Executive Officer.

From 2005 to 2007, Mr.

Martin served as Chief Financial Officer of Stratagene Corporation, a publicly traded research products and clinical diagnostics company.

Martin’s previous experience also includes serving as Controller with Gen-Probe Incorporated, a publicly traded molecular diagnostics company, as well as 10 years with Deloitte & Touche LLP, a public accounting firm.

Martin currently serves on the board of directors of Ensysce Biosciences, where he has served since 2020.

Martin holds a B.S.

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Morris earned his B.A.

in Management from Saint Mary’s College in Moraga, California.

Non-Employee Directors

Bastiani, Ph.D.

, has served as a member of the board of directors and our Chairman since the Merger.

Bastiani , Ph.D., has served as a member of the board of directors and our Chairman since the Merger.

He has previously served as a member of the board of directors of C3J from 2013 until the consummation of the Merger.

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Bastiani served as chairman of the board of directors of Response Biomedical Corp.

Bastiani was appointed to the board of directors of ID Biomedical Corporation, and he served as the chairman of the board of directors from 1998 until the company’s 2005 acquisition by GlaxoSmithKline.

molecular diagnostic company focused on cancer diagnostics using proprietary genomic profiling and informatics.

Bastiani also served as co-founder and a director of DiscoveRx, a privately held company developing and selling high-throughput screening, protein profile and cell pathway assays and services, and on the board of Pathwork Diagnostics, a privately held molecular diagnostic company focused on cancer diagnostics using proprietary genomic profiling and informatics.

Bastiani also serves on the Board of Fellows of Santa Clara University.

He received his Ph.D.

in Chemistry from Michigan State University in 1970, his M.S.

in Chemistry from

Michigan State University in 1970, his M.S.

in Chemistry from California State University in 1967, and his B.S.

in Chemistry from Santa Clara University in 1964.

Director Qualifications .

Bastiani was selected as a director because of his extensive leadership experience with biotechnology companies and his in-depth knowledge of the industry, as well as his experience serving on the boards of directors of various public and private companies.

Schlesinger, M.D.

Kostas , M.D.

has served as a member of our board of directors since February 2020.

She also currently serves as a member of the Board of Directors of Innoviva, Inc., and serves on its Compensation Committee and the Nominating/Corporate Governance Committee.

Schlesinger is an Associate Professor of Clinical Investigation at Rockefeller University and Senior Attending Physician at Rockefeller University Hospital.

Schlesinger led the Dendritic Cell section of the Division of Retrovirology at the Walter Reed Army Institute of Research and was also a member of the Division of Infectious and Parasitic Disease Pathology at the Armed Forces Institute of Pathology from 1994 to 2002.

Schlesinger rejoined Rockefeller University and began working with the International AIDS Vaccine Initiative as a Scientist in Vaccine Research and Design.

Schlesinger has been a member of Rockefeller University Hospital's Institutional Review Board (“IRB”) (Ethics Committee) since 2003 and previously served as IRB's vice-chairperson.

In 2017 she assumed the position of chairperson of the IRB.

She is currently the director of the education and training programs at Rockefeller University Center for Clinical and Translational Science and serves on the Medical Staff Executive Committee of Rockefeller University Hospital.

Schlesinger currently serves on the board of three non-profit organizations:

the AIDS Vaccines Advocacy Coalition, Global Viral and The Hastings Center, the pre-eminent center for the study of bioethics.

Schlesinger served as an independent corporate director of Ariad Pharmaceuticals from 2013 until its sale to Takeda Pharmaceutical Company Limited in 2017.

Schlesinger has a B.A.

from Wellesley College and a M.D.

from Rush Medical College in Chicago, Illinois.

Schlesinger has demonstrated leadership in her field and her substantial knowledge of our industry contributed to our conclusion that she should serve as a director.

Schlesinger was selected as a director because of her extensive leadership experience with biotechnology companies and her in-depth knowledge of the industry, as well as her experience serving on the boards of directors of various public and private companies.

Jeremy Curnock Cook has served as a member of the board of directors since July 1995 and as chairman from 1998 until the consummation of the Merger.

From September 2014 to May 2015, he served as our Interim Chief Executive Officer.

Curnock Cook has served as Chairman of International BioScience Managers Limited, a corporate and investment advisory firm, since 2000, and also currently serves as Managing Director of BioScience Managers Pty Ltd, a life science fund manager.

From 1987 to 2000, Mr.

Curnock Cook was a director of Rothschild Asset Management Limited and was responsible for the Rothschild Bioscience Unit.

Curnock Cook founded the International Biochemicals Group in 1975, which was sold in 1985 to Royal Dutch Shell, where he served as Managing Director until 1987.

He also currently serves as a member of the board of directors of Avita Medical Limited (ASX:

RCEL), Adherium Limited (ASX:

ADR), Arecor Limited, Summatix Pty Ltd., Rex Bionics Pty Ltd., BioScience Managers UK Ltd and Smart Matrix Ltd.

Curnock Cook received an M.A.

in natural sciences from Trinity College, Dublin.

Cook was selected as a director because of his extensive leadership experience with biotechnology companies and his in-depth knowledge of our business, strategy and management team, as well as his experience serving as a public company director and executive officer.

Stewart Parker has served as a member of the board of directors since the consummation of the Merger.

She is the Principal of Parker BioConsulting.

Parker previously served as a member of the board of directors of C3J from 2010 until the consummation of the Merger, including as chair of the board from March 2016 until the consummation of the Merger.

Parker has over 36 years of experience in the biotechnology industry.

She served as the chief executive officer of the Infectious Disease Research Institute, or IDRI, a not-for-profit global health research institute, from March 2011 to December 2013.

Parker managed the formation of Targeted Genetics Corporation, the predecessor

company of AmpliPhi, and, at its inception, a subsidiary of Immunex Corporation.

She served as its President and Chief Executive Officer and as a director from its spinout from Immunex Corporation in 1992 to November 2008.

Prior to Targeted Genetics Corporation, Ms.

Parker served in various capacities at Immunex Corporation from August 1981 through December 1991, most recently as vice president, corporate development.

From February 1991 to January 1993, Ms.

Parker served as president and a director of Receptech Corporation, a company formed by Immunex in 1989 to accelerate the development of soluble cytokine receptor products.

She has served on the board of directors and the executive committee of BIO, the primary trade organization for the biotechnology industry.

She currently serves as a member of the boards of directors for several for-profit and non-profit companies, including Sangamo Therapeutics, Inc.

SGMO), a clinical stage biotechnology company, since June 2014, where she has served as board chair since June 2017;

Achieve Life Sciences, Inc.

ACHV), a specialty pharmaceutical company, since March 2010, where she serves as chairperson of the nominating and governance committee and as a member of the audit committee and compensation committee;

and StrideBio, Inc., a gene therapy company.

Parker also serves as the chair of the nominating and governance committee of the board of directors of Impel NeuroPharma.

Parker received her B.A.

from the University of Washington.

Parker was selected as a director because of her extensive experience in the industry and experience as a public company director (including service as a member of the compensation and the nominating and corporate governance committees of the board of directors), as well as her strong commitment to shareholders’

He also currently serves as a director of Innoviva, Inc.

He is a Partner and Senior Managing Director at Sarissa Capital Management LP.

Sarissa Capital focuses on improving the strategies of companies to enhance shareholder value.

Prior to joining Sarissa Capital, Dr.

Kostas served as a Director at Evercore ISI (formerly ISI), covering the biotechnology and pharmaceutical industries.

Previously, he practiced internal medicine as part of the Yale New Haven Health System and was engaged as a consultant to various biotechnology companies.

Kostas also previously served on the board of directors of Enzon Pharmaceuticals.

Kostas has a B.S from Massachusetts Institute of Technology (MIT) and a M.D.

from University of Texas Southwestern Medical School.

Kostas has demonstrated leadership in his field, and his knowledge of and experience in our industry contributed to our conclusion that he should serve as a director.

Director Qualifications .

Kostas was selected as a director because of his extensive leadership experience with biotechnology companies and his in-depth knowledge of our business, strategy and management team, as well as his experience serving as a public company director.

Kramer has served as Senior Vice President, Chief Accounting Officer and Head of Global Business Services and Treasury of Biogen, a biopharma company, since January 2021.

Kramer served as Biogen’s Vice President, Chief Accounting Officer from November 2018 to December 2020.

Prior to joining Biogen, Ms.

Kramer served as the Senior Vice President and Chief Accounting Officer of Hertz Global Holdings, Inc., a car rental company, from May 2014 to November 2018.

Prior to that, Ms.

Kramer was an audit partner at Deloitte & Touche LLP (Deloitte), a professional services firm, from 2007 to 2014, including serving in Deloitte’s National Office Accounting Standards and Communications Group from 2007 to 2010.

From 2005 to 2007 Ms.

Kramer served as Chief Accounting Officer of Fisher Scientific International, Inc., a laboratory supply and biotechnology company, and from 2004 to 2005 Ms.

Kramer served as Director, External Reporting, Accounting and Control for the Gillette Company, a personal care company.

Kramer also held partner positions in the public accounting firms of Ernst & Young LLP and Arthur Anderson LLP.

Kramer is a licensed certified public accountant (CPA) in Massachusetts.

She is a member of the Massachusetts Society of CPAs and the American Institute of CPAs.

She has served as a Board Member of Samsung Bioepis Co., LTD.

from July 2020 to Present, and as a Board member of the Center for Women and Enterprise from August 2020 – Present.

She previously served as a Board Member for the Massachusetts State Board of Accountancy from September 2011 to December 2015 and Probus Insurance Company Europe DAC, from 2016 to 2018.

Director Qualifications .

Kramer was selected as a director because of her years of experience in biotechnology and life sciences research and development and her in-depth knowledge of the industry.

She has financial expertise, including a thorough understanding of financial statements, corporate finance and accounting and extensive experience with public companies, all of which makes her a valued member of the board of directors.

Patti , Ph.D.

has served as a member of the board of directors since the consummation of the Merger.

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From November 2012, Dr.

Patti served as Aviragen Therapeutics, Inc.’s Executive Vice President of Corporate Development and Strategy until October 2014, when he was appointed the company’s President and Chief Executive Officer and director.

He served in those roles until February 2018, when Aviragen merged with Vaxart, Inc.

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Before co-founding Inhibitex, Dr.

Patti was an Assistant Professor at Texas A&M’s Institute of Biosciences and Technology and also served on the faculty at the University of Texas Health Science Center Graduate School of Biomedical Sciences.

was an Assistant Professor at Texas A&M’s Institute of Biosciences and Technology and also served on the faculty at the University of Texas Health Science Center Graduate School of Biomedical Sciences.

Patti received a B.S.

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Patti was a director of Inhibitex from 1998 to 2005.

Director Qualifications .

Patti was selected as a director because of his scientific knowledge and background and experience in developing numerous preclinical and clinical bio-pharmaceutical product candidates, as well as his senior management experience over the past decade in developing and implementing the business and financial strategies of emerging, publicly-traded biopharmaceutical companies and serving as a public company director.

has served as a member of our Board of Directors since February 2020.

He also currently serves as Chairman of the Board of Directors of Innoviva, Inc., and is a member of its Audit Committee and Nominating/Corporate Governance Committee.

He is a Partner and Senior Managing Director at Sarissa Capital Management LP.

Sarissa Capital focuses on improving the strategies of companies to enhance shareholder value.

Prior to joining Sarissa Capital, Dr.

Kostas served as a Director at Evercore ISI (formerly ISI), covering the biotechnology and pharmaceutical industries.

Previously, he practiced internal medicine as part of the Yale New Haven Health System and was engaged as a consultant to various biotechnology companies.

Kostas also currently serves on the board of directors of Enzon Pharmaceuticals.

Kostas has a B.S from Massachusetts Institute of Technology (MIT) and a M.D.

from University of Texas Southwestern Medical School.

Kostas has demonstrated leadership in his field, and his knowledge of and experience in our industry contributed to our conclusion that he should serve as a director.

Peterson , Ph.D.

has served as a member of the board of directors since October 2019.

Peterson has more than 30 years of experience in biotechnology and life sciences research and development across the areas of molecular biology, nucleic acids and genomics product and technology development.

Todd Peterson is Founder and Principal at GenApex Bio (GenApex Biotechnology Consulting), a board practice, investment and advisory services LLC based in Coronado, California.

He has over 35 years of experience in biotechnology and life sciences research and development across the areas of molecular and cell biology, nucleic acids and genomics product and technology development.

His experience encompasses clinical diagnostics, life science research tools and drug discovery technologies, products, and markets.

Peterson has served as Chief Scientific Officer at the Allen Institute in Seattle, Washington, since December 2018, overseeing science and technology strategy and operational, translational and growth initiatives to deliver on its impact mission.

Prior to joining the Allen Institute, from 2013 to 2018, Dr.

Peterson served as Chief Technology Officer at Synthetic Genomics, Inc., a private company focused on synthetic biology and applied genomics technologies.

From 2003 to 2013, Dr.

Peterson led Genomics and Synthetic Biology R&D at Invitrogen/Life Technologies, a global leader in life science tools.

Previously, Dr.

Peterson was Chief Scientific Officer at The Allen Institute in Seattle, Washington, overseeing science and technology strategy and growth initiatives across unit Institutes for Brain Science, Cell Science, Immunology, and the Paul G.

Allen Frontiers Group.

Prior to joining the Allen Institute, Dr.

Peterson was Chief Technology Officer at Synthetic Genomics, Inc., a leader in synthetic biology and applied genomics technologies developing a robust portfolio of breakthrough solutions addressing major global issues.

Prior to joining SGI, Dr.

Peterson led Genomics and Synthetic Biology R&D at Invitrogen/Life Technologies (now Thermo Fisher Scientific), a global leader in life science tools.

Prior to Life Technologies, Dr.

Peterson held research and development positions with increasing responsibilities and scope at Genicon Sciences Corp., Trega Biosciences, Inc., Hybritech Inc.

and Gen-Probe Incorporated, where he focused on technology research, product development and commercialization.

Peterson held R&D positions with increasing leadership responsibilities and scope at Genicon Sciences, Trega Biosciences, Hybritech and Gen-Probe where he focused on technology research, product development and commercialization.

Peterson was a postdoctoral fellow at the Max Planck Institute in Cologne Germany after receiving his Ph.D.

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in Molecular Biology and Biochemistry at the University of California, Santa Barbara.

Director Qualifications .

Peterson was selected as a director because of his years of experience in biotechnology and life sciences research and development, his in-depth knowledge of the industry and pre-clinical / early-stage scientific requirements, and his experience and understanding of our bacteriophage platform.

Schlesinger , M.D.

has served as a member of our board of directors since February 2020.

She also currently serves as a member of the Board of Directors of Innoviva, Inc., and serves on its Compensation Committee and the Nominating/Corporate Governance Committee.

Schlesinger is an Associate Professor of Clinical Investigation at Rockefeller University and Senior Attending Physician at Rockefeller University Hospital.

Schlesinger was The Clinical Director of the laboratory of Dr.

Ralph Steinman (Nobel Laureate 2011) from 2002 until his death in 2011.

Schlesinger rejoined Rockefeller University and began working with the International AIDS Vaccine Initiative as a Scientist in Vaccine Research and Design.

Schlesinger has been a member of Rockefeller University Hospital’s Institutional Review Board (“IRB”) (Ethics Committee) since 2003 and previously served as IRB’s vice-chairperson.

In 2017 she assumed the position of chairperson of the IRB.

She is currently the director of the education and training programs at Rockefeller University Center for Clinical and Translational Science.

Schlesinger currently serves on the board of two non-profit organizations:

the AIDS Vaccines Advocacy Coalition, and The Hastings Center, the pre-eminent center for the study of bioethics.

Schlesinger served as an independent corporate director of Ariad Pharmaceuticals from 2013 until its sale to Takeda Pharmaceutical Company Limited in 2017.

She also served as an independent corporate director of The Medicines Company from 2018 until its acquisition by Novartis in 2020.

Schlesinger has a B.A.

from Wellesley College and a M.D.

from Rush Medical College in Chicago, Illinois.

She trained in Anatomic Pathology at The New York Hospital where she served as Chief Resident.

Schlesinger has demonstrated leadership in her field and her substantial knowledge of our industry contributed to our conclusion that she should serve as a director.

Director Qualifications .

Our Nominating and Corporate Governance Committee seeks to assemble a board of directors that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business.

To that end, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the board of directors’

overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the board of directors.

To that end, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the board of directors’ overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the board of directors.

The brief biographies below include information regarding the specific and particular experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committee to recommend that person as a nominee.

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Our board of directors meets on a regular basis and on an ad hoc basis as required.

As required under the NYSE American exchange listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,”

as affirmatively determined by the board of directors.

Our board of directors consults with our counsel to ensure that the board of directors’

determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,”

including those set forth in pertinent listing standards of the NYSE American exchange, as in effect from time to time.

As required under the NYSE American exchange listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors.

Our board of directors consults with our counsel to ensure that the board of directors’ determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the NYSE American exchange, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent auditors, the board affirmatively determined that Richard J.

Bastiani, Ph.D., Jeremy Curnock Cook, H.

Stewart Parker, Joseph M.

Patti, Ph.D., Odysseas D.

Kostas, M.D., Sarah J.

Schlesinger, M.D., and Todd C.

Peterson, Ph.D.

are independent directors within the meaning of the applicable NYSE American exchange listing standards.

In making this

determination, our board found that none of these directors or nominees for director had a material or other disqualifying relationship with us.

Bastiani, Ph.D., Odysseas D.

Kostas, M.D., Robin C.

Kramer, Joseph M.

Patti, Ph.D., Todd C.

Peterson, Ph.D., and Sarah J.

Schlesinger, M.D.

and are independent directors within the meaning of the applicable NYSE American exchange listing standards.

In making this determination, our board found that none of these directors or nominees for director had a material or other disqualifying relationship with us.

The board concluded that Mr.

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Patrick is not an independent director under these rules given his role as our Chief Executive Officer.

Of the former directors who served on our board during 2019, our board determined that each of Louis Drapeau, Michael S.

Perry, D.V.M., Ph.D.

Samant was independent under the rules of the SEC and the NYSE American exchange, while Paul C.

Grint, M.D., Richard Bear and Wendy S.

Johnson were not independent under such rules, due to Dr.

Grint and Ms.

Johnson’s former management positions with us, and Mr.

Bear’s role as Chief Financial Officer of CRH Medical Corporation, where Mr.

Patrick serves as a member of the board of directors, including as Chairman of the audit committee and as a member of its compensation committee, and corporate governance and nominating committee.

Grint and Ms.

Johnson resigned in May 2019 in connection with the Merger, and Dr.

Perry and Mr.

Bear resigned in February 2020 in connection with the Private Placement.

Accordingly, during 2019, our board was comprised of a majority of directors who qualify as independent directors under the rules adopted by the SEC and the NYSE American exchange.

As required under applicable NYSE American rules, we anticipate that our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

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We have a separate chair for each committee of the board of directors.

As a general policy, the board of directors believes that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the board of directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of the board of directors as a whole.

As a general policy, the board of directors believes that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the board of

directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of the board of directors as a whole.

Patrick serves as our Chief Executive Officer, while Dr.

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The committee members report to the full board of directors on material developments in their areas of oversight.

We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our board of directors’

leadership structure, which also emphasizes the independence of our board of directors in its oversight of our business and affairs, supports this approach.

We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our board of directors’ leadership structure, which also emphasizes the independence of our board of directors in its oversight of our business and affairs, supports this approach.

The board of directors and its committees meet at regularly scheduled and special meetings throughout the year at which management reports to the board concerning the results of our risk management activities, as well as external changes that may change the levels of business risk to which we are exposed.

At each regular meeting of our board of directors, the chairperson of each committee reports to the full board regarding the matters reported and discussed at any committee meetings, including any matters related to risk assessment or risk management.

Upon the request of the committees, our principal executive officer and principal financial officer attend meetings of these committees when they are not in executive session, and often report on matters that may not be otherwise addressed at these meetings.

Upon the request of the

committees, our principal executive officer and principal financial officer attend meetings of these committees when they are not in executive session, and often report on matters that may not be otherwise addressed at these meetings.

In addition, our directors are encouraged to communicate directly with members of management regarding matters of interest, including matters related to risk, at times when meetings are not being held.

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Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee operates under a written charter, the adequacy of which each respective committee regularly reviews and reassesses.

A copy of each charter is available under the heading “Corporate Governance”

of the Investor Relations section of our website at https://investor.armatapharma.com/corporate-governance.

A copy of each charter is available under the heading “Corporate Governance” of the Investor Relations section of our website at https://investor.armatapharma.com/corporate-governance.

Our board of directors may establish additional committees from time to time in accordance with our Bylaws.

Below is a description of each committee of the board of directors.

The board of directors has determined that each member of each committee meets the applicable NYSE American exchange rules and regulations regarding “independence”

and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to our company.

The board of directors has determined that each member of each committee meets the applicable NYSE American exchange rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to our company.

Audit Committee

Our Audit Committee currently consists of Ms.

Parker (Chair), Mr.

Our Audit Committee currently consists of Robin Kramer (Chair) and Dr.

The board of directors reviews the NYSE American exchange listing standards definition of independence for Audit Committee members on an annual basis and has determined that each of the members of our Audit Committee satisfies the NYSE American exchange listing requirements and SEC independence requirements.

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● monitoring the rotation of partners of our independent auditors on our audit engagement team as required by law;

prior to engagement of any independent auditor, and, at least annually thereafter, reviewing relationships that may reasonably be thought to bear on the auditor’s independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor;

reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”

and discussing the statements and reports with our independent auditors and management;

● prior to engagement of any independent auditor, and, at least annually thereafter, reviewing relationships that may reasonably be thought to bear on the auditor’s independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor;

● reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management;

● reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our internal control over financial reporting;

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Our Compensation Committee consists of Dr.

Patti (Chair), Mr.

Patti (Chair) and Dr.

Our board of directors has determined that each of the members of our Compensation Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act, an outside director, as defined pursuant to Section 162(m) of the Code, and satisfies the NYSE American exchange listing independence requirements.

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Our Nominating and Corporate Governance Committee consists of Dr.

Bastiani (Chair), Ms.

Patti and Dr.

Our board of directors has determined that each of the members of this committee satisfies the NYSE

American exchange listing independence requirements.

Bastiani (Chair) and Dr.

Our board of directors has determined that each of the members of this committee satisfies the NYSE American exchange listing independence requirements.

The Nominating and Corporate Governance Committee of the board of directors is responsible for, among other things:

● identifying, reviewing and evaluating candidates to serve on our board of directors consistent with criteria approved by our board of directors;

assessing the performance of management and the board of directors, including board committees, seeking input from senior management, the full board of directors and others, which assessment shall include, among other things, an evaluation of the board’s contribution as a whole and overall board composition and makeup, including the reelection of current board members;

● assessing the performance of management and the board of directors, including board committees, seeking input from senior management, the full board of directors and others, which assessment shall include, among other things, an evaluation of the board’s contribution as a whole and overall board composition and makeup, including the reelection of current board members;

● evaluating, nominating and recommending individuals for membership on our board of directors;

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Sections 23B.08.510 and 23B.08.570 of the Washington Business Corporation Act authorize Washington corporations to indemnify directors and officers under certain circumstances against expenses (including legal expenses) and liabilities incurred in legal proceedings in which they are involved by reason of being a director or officer, as applicable.

Section 23B.08.560 of the Washington Business Corporation Act authorizes a corporation, if authorized by its articles of incorporation or by a provision in the corporation’s bylaws approved by its stockholders, to indemnify or agree to indemnify a director made a party to a proceeding, or obligate itself to advance or reimburse expenses incurred in a proceeding, without regard to the limitations imposed by Sections 23B.08.510 through 23B.08.550;

provided that no such indemnity shall indemnify any director from or on account of (a) acts or omissions of the director finally adjudged to be intentional misconduct or a knowing violation of law, (b) conduct of the director finally adjudged to be in violation of Section 23B.08.310 of the Washington Business Corporation Act (which section relates to unlawful distributions) or (c) any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property or services to which the director was not legally entitled.

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Section 10 of our amended and restated bylaws requires us to indemnify every present or former director or officer against expenses, liabilities and losses incurred in connection with serving as a director or officer, as applicable, and to advance expenses of such director or officer incurred in defending any proceeding covered by the indemnity.

We maintain a policy of directors’

and officers’

liability insurance that insures the directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

connection with their service as (i) a director or officer or (ii) a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, at our request.

We maintain a policy of directors’ and officers’ liability insurance that insures the directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

We have also entered into indemnification agreements with our executive officers and directors that provide for the indemnification of directors and executive officers to the fullest extent permitted by the Washington Business Corporation Act against expenses reasonably incurred by such persons in any threatened, pending or completed action, suit, investigation or proceeding in connection with their service as (i) a director or officer or (ii) a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, at our request.

In addition, the indemnification agreements we are obligated to advance expenses pursuant to the indemnification agreements under certain circumstances and the agreements also provide for procedural protections, including a determination by a reviewing party as to whether the indemnitee is permitted to be indemnified under applicable law.

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They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders.

A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We believe that these provisions in our articles of incorporation and amended and restated bylaws and our indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

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Specific due dates for these reports have been established and we are required to identify those persons who failed to timely file these reports.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from our directors and officers that no other reports were required, during the fiscal year ended December 31, 2019, all of our directors, officers and greater than 10% stockholders complied with the Section 16(a) filing requirements, except that Dr.

Perry and Mr.

Cook filed Form 5 reports on February 14, 2020, in lieu of timely filing of Form 4 reports during the fiscal year ended December 31, 2019.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from our directors and officers that no other reports were required, during the fiscal year ended December 31, 2020, all of our directors, officers and greater than 10% stockholders complied with the Section 16(a) filing requirements.

We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and controller) and employees, known as the Code of Business Conduct and Ethics.

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Set forth below is certain information regarding the historical compensation of our named executive officers during the year ended December 31, 2020 and 2019 including the historical compensation of certain C3J executive officers who are now executive officers following the completion of the Merger.

For additional information about our current officers and directors, see the section titled “Management.”

Executive Compensation

The named executive officers as of December 31, 2019 were:

The named ex ecut iv e o f f icers as of December 31, 2020 w e r e :

Patrick, Chief Executive Officer;

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Summary Compensation Table

The following table provides information regarding the compensation paid during the last two fiscal years to the named executive officers and Dr.

Paul Grint, our former Chief Executive Officer, who resigned from that position in connection with the Merger.

The f oll o wing t a b le p ro vides in f o r m a tion r ega r ding the compens a tion paid during the last t w o f isc a l y ears to the named ex ecut iv e o f f icer s .

Incentive Plan

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Senior VP and Chief Financial Officer

Former Chief Executive Officer (2)

In accordance with SEC rules, this column represents the aggregate grant date fair value of the option awards granted during 2019 computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 for stock-based compensation transactions.

(1) In accordance with SEC rules, this column represents the aggregate grant date fair value of the option awards granted during 2019 and 2020 computed in accordance with Financial Accounting Standards Board Accounting Standards

Codification Topic 718 for stock-based compensation transactions.

Assumptions used in the calculation of these amounts are included in Note 14 to the consolidated financial statements included in this Annual Report.

These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options.

There were no stock-based or option-based compensation awards granted to the named executive officers in 2018.

On May 9, 2019, at the effective time of the Merger, Dr.

Grint resigned from his position as our Chief Executive Officer.

In connection with his termination, Dr.

Grint is entitled to certain severance payments, including continuation of payments totaling $475,000 in equal monthly installments for twelve months from May 9, 2019, as described below under the section entitled “—

Potential Payments and Benefits upon Termination or Change in Control.”

The base salaries of the named executive officers in 2019, as applicable, were generally determined and approved by the board of directors, based on the recommendation of the Compensation Committee.

Patrick’s annual base salary for 2019 and 2018 was $412,000.

Varnum’s annual base salary for 2019 and 2018 was $320,000.

Martin’s annual base salary for 2019 and 2018 was $320,000 .

In addition to base salaries, the named executive officers were eligible to receive annual performance-based cash bonuses, which were designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards these goals.

The performance-based bonus was generally based on the extent to which we achieved the specified corporate goals that our board of directors or Compensation Committee established.

After the end of the year, the board of directors and/o Compensation Committee reviewed our performance against the established corporate goals and approved the extent to which we achieved such goals.

Our board of directors and/or Compensation Committee generally would consider each executive officer’s individual contributions towards reaching our corporate goals and may have also established specific individual goals for our executive officers as it determined appropriate.

There was no minimum bonus percentage or amount established for the named executive officers and, as a result, the bonus amounts varied based on corporate and individual performance, as applicable.

The base s a laries of the named ex ecut iv e o f f icers in 2020, as a pplic a b l e , w e r e gene r a l l y dete r mined and a pp ro v ed by the boa r d of di r ector s , based on the r ecommend a tion of the Compens a tion Committe e .

P a trick ’ s an n u a l base s a lary f or the period January 1, 2019 through March 31, 2020 w as $412,000.

Effective April 1, 2020, Mr.

Patrick’s annual base salary was $550,000.

V ar n um ’ s an n u a l base s a lary f or the period January 1, 2019 through March 31, 2020 w as $320,000.

Effective April 1, 2020, Mr.

Varnum’s annual base salary was $425,000.

Marti n ’ s an n u a l base s a lary f or the period January 1, 2019 through March 31, 2020 w as $320,000.

Effective April 1, 2020, Mr.

Martin’s annual base salary was $360,000.

In addition to base salaries, the named executive officers are eligible to receive annual performance-based cash bonuses, which are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards these goals.

The performance-based bonus generally is based on the extent to which we achieved the specified corporate goals that our board of directors or Compensation Committee established.

After the end of the year, the board of directors and/or Compensation Committee review our performance against the established corporate goals and approve the extent to which we achieved such goals.

Under the terms of his offer letter agreement described below, Mr.

Patrick was eligible to receive an annual performance-based bonus for 2019 equal to, at target, between 50% and 100% of his annual salary based on our achievement of certain performance goals.

Varnum was eligible to receive an annual performance-based bonus for 2019 equal to, at target, 40% of his annual salary based on our achievement of certain performance goals.

Martin was eligible to receive an annual performance-based bonus for 2019 equal to, at target, 40% of his annual salary based on our achievement of certain performance goals.

Our annual performance bonus amounts for 2019 were based entirely on corporate goals relating to capital raising, partner and grant funding and our clinical development and manufacturing progress.

In December 2019, the compensation committee reviewed the corporate performance goals for the named executive officers since the Merger and also considered other external factors impacting our valuation.

Based on the evaluation by the Compensation Committee of the overall results from the May 9, 2019 Merger date and through the 2019 calendar year end, the executive officers were not granted cash bonuses related to the goals established for 2019.

The 2019 goals set forth by the Company remain relevant as incentive targets for the first half of 2020 and accordingly, the Compensation Committee will continue to monitor the progress towards achieving these goals before granting cash incentive awards to the named executive officers.

Grint was not employed by us following the Merger and was not eligible for a 2019 bonus .

Patrick was eligible to receive an annual performance-based bonus for 2019 and 2020 equal to, at target, between 50% and 100% of his annual salary based on our achievement of certain performance goals.

Varnum and Mr.

Martin was eligible to receive an annual performance-based bonus for 2019 and 2020 equal to, at target, 40% of his annual salary based on our achievement of certain performance goals.

The annual performance-based bonus opportunities are based entirely on the extent to which we achieved corporate goals relating to capital raising, partner and grant funding and progress with clinical development and manufacturing for the period commencing on the closing of the Merger through December 31, 2019, and for the fiscal year ending December 31, 2020.

The corporate goals were established so that target attainment is not assured.

Instead, our executives are required to demonstrate significant effort, dedication, and achievement to attain payment for performance at target or above.

In December 2019, the Compensation Committee reviewed interim performance results against these corporate goals and decided that it needed more time to properly evaluate performance results.

In March 2020, the Compensation Committee conducted another evaluation of our performance relative to the corporate goals and made a recommendation, that the board approved, to authorize payout for the 2019 performance-based bonuses at the 70% achievement level.

As a result, the named executive officers received the following performance-based bonuses for 2019:

Patrick — $144,200;

Varnum — $89,600 and Mr.

Martin — $89,600.

These amounts are listed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

In December 2020, the Compensation Committee reviewed performance results against the corporate goals and made a recommendation, that the board approved, to authorize payout for the 2020 performance-based bonuses at the 100% achievement level.

As a result, the named executive officers received the following performance-based bonuses

Patrick - $257,750;

Varnum - $159,500;

Martin - $140,000.

These amounts are listed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

Equity-Based Awards

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Our board of directors or our Compensation Committee approve equity grants.

Vesting of equity awards was generally tied to continuous service with us and served as an additional retention measure.

Vesting of equity awards was generally tied to continuous service and serves as an additional retention measure.

Our executives may have been awarded an initial new hire grant upon commencement of service and may have received additional grants, as the board of directors or Compensation Committee determined appropriate, in order to incentivize and/or reward such executives.

We traditionally granted stock options to the named executive officers under our equity incentive plans, the terms of which are described below under “—

Equity Incentive Plans.”

Following the completion of the Merger in May of 2019, the board of directors’

granted stock options to the named executive officers and certain employees of the Company.

Please see “Outstanding Equity Awards at Fiscal Year End”

No stock-based awards were granted to executives of either AmpliPhi or C3J during 2018.

We traditionally granted stock options to the named executive officers under our equity incentive plans, the terms of which are described below under “Equity Incentive Plans.” Following the completion of the Merger in May of 2019, the board of directors’ granted stock options to the named executive officers and certain employees of the Company.

Please see “Outstanding Equity Awards at Fiscal Year End” below.

Agreements with our Named Executive Officers

Below are descriptions of our employment agreements with the named executive officers governing the terms of their service with us.

For a discussion of the severance pay and other benefits that may be provided in connection with a termination of service and/or a change in control under the arrangements with the named executive officers, please see “—

Potential Payments and Benefits upon Termination or Change in Control”

Patrick, our Chief Executive Officer, is subject to an Employment Agreement, dated October 1, 2018, between Mr.

Patrick and C3J as amended on January 3, 2019 (the “Patrick Employment Agreement”).

Patrick and the Company as amended on January 3, 2019 (the “Patrick Employment Agreement”).

The Patrick Employment Agreement provides for an initial term of three years.

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Patrick is terminated without Cause or resigns for Good Reason (in each case as defined in the Patrick Employment Agreement), then he will be entitled to a severance payment equal to his base salary plus 50% of his bonus (the bonus to be paid whether earned or unearned) for the then-remaining term of the Patrick Employment Agreement, or through September 30, 2021, such payment to be lengthened to a minimum of one year or twelve (12) months of base salary and bonus, if his termination occurs during any month during the 2021 calendar year.

Effective December 31, 2020, Mr.

Patrick’s annual base salary is $550,000.

Varnum, our President and Chief Development Officer, is subject to an employment agreement dated January 18, 2012 between Dr.

Varnum and C3J.

Varnum’s employment under the agreement is at will and is terminable by us or Dr.

Varnum and the Company.

Varnum’s employment under the agreement is at will and is terminable by us or Dr.

Varnum at any time.

Under the terms of the agreement, Dr.

Varnum currently receives an annual base salary of $320,000 and an annual target performance bonus of 40% of his annual salary based on our achievement of certain performance objectives.

Varnum is also entitled to certain severance benefits as described below under the section entitled “—

Potential Payments and Benefits upon Termination or Change in Control.”

Varnum currently receives an annual base salary of $425,000 through December 31, 2020, and an annual target performance bonus of 40% of his annual salary based on our achievement of certain performance objectives.

Varnum is also entitled to certain severance benefits as described below under the section entitled “Payments and Benefits upon Termination or Change in Control.”

Martin, our Chief Financial Officer, is subject to an employment agreement dated January 18, 2016, as amended on April 1, 2017.

Martin’s employment under the agreement is at will and is terminable by us or Mr.

Martin at any time.

Under the terms of the agreement, Mr.

Martin currently receives an annual base salary of $320,000, and an annual target performance bonus of 40% of his annual salary based on our achievement of certain performance objectives.

Martin currently receives an annual base salary of $360,000 through December 31, 2020, and an annual target performance bonus of 40% of his annual salary based on our achievement of certain performance objectives.

Martin retained his position as Chief Financial Officer following the Merger, and the terms of his offer letter agreement remain as described herein.

Martin is also entitled to certain severance benefits as described below under the section entitled “—

Potential Payments and Benefits upon Termination or Change in Control.”

Grint, our former Chief Executive Officer, is subject to an offer letter agreement, dated June 1, 2017.

Pursuant to Dr.

Grint’s offer letter agreement, in the event he is terminated without cause or resigns for good reason within one month before or 12 months after a change in control, the vesting of all of his outstanding equity awards that are subject to time-based vesting will accelerate in full such that all such equity awards will be deemed fully vested as of the date of such termination or resignation (or change in control, if later).

In addition, the offer letter provides that if Dr.

Grint is terminated without cause or resigns for good reason from his employment with us, Dr.

Grint will be entitled to receive severance benefits in the form of salary continuation at the rate of his base salary in effect at the time of his termination or resignation for a period of 12 months, subject to our timely receipt of an effective release and waiver of claims from Dr.

Martin is also entitled to certain severance benefits as described below under the section entitled “Payments and Benefits upon Termination or Change in Control.”

Payments and Benefits upon Termination or Change in Control

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Martin is entitled to receive 12 months of continued base salary if his employment with us was terminated without cause or if he resigned for good reason, and additionally, if such termination or resignation occurred in connection with a change in control, full acceleration of his equity awards, provided that in either case he provided us with an effective release of claims.

At the effective time of the Merger, Dr.

Grint resigned from his position as our Chief Executive Officer.

In connection with his resignation, Dr.

Grint became entitled to receive the severance and change of control payments described in his offer letter agreement described above, which we currently pay.

Grint resigned as an officer, he agreed to continue to serve as a consultant in a transitional role for a period of six months.

As consideration for his consulting services, we granted him, pursuant to approval by our board, an option under the 2016 Plan to purchase 1,786 shares of our common stock at an exercise price equal to the fair market value of our common stock on the date of grant.

Subject to certain terms and conditions, the option vested at the end of the six-month consulting period and will remain exercisable for a period of one year after the termination of such six-month consulting period.

All of the named executive officers held stock options under our equity incentive plans that were granted subject to the general terms of our equity incentive plans and form of stock option agreements.

A description of the termination and change in control provisions in such equity incentive plans and stock options granted thereunder is provided below under “—

Equity Incentive Plans,”

and the specific vesting terms of each of the named executive officer’s stock options are described below under “—

Outstanding Equity Awards at Fiscal Year End.”

A description of the termination and change in control provisions in such equity incentive plans and stock options granted thereunder is provided below under “Equity Incentive Plans,” and the specific vesting terms of each of the named executive officer’s stock options are described below under “Outstanding Equity Awards at Fiscal Year End.”

The specific vesting terms of each of the named executive officer’s stock options are described below under “—

Outstanding Equity Awards at Fiscal Year End.”

If within 1 month prior to, or within 12 months after, a change in control, the named executive officer is terminated due to an involuntary termination (not including death or disability) without cause or due to a voluntary termination with good reason, then any unvested stock options held by that officer will vest in full.

The specific vesting terms of each of the named executive officer’s stock options are described below under “— Outstanding Equity Awards at Fiscal Year End.” If within 1 month prior to, or within 12 months after, a change in control, the named executive officer is terminated due to an involuntary termination (not including death or disability) without cause or due to a voluntary termination with good reason, then any unvested stock options held by that officer will vest in full.

Outstanding Equity Awards at Fiscal Year End

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Unexercisable

Twenty-five percent of the shares vest one year after the grant date, with the balance vesting in equal monthly installments thereafter over the next three years, subject to continued service and the potential vesting acceleration described in the option agreement.

Twenty-five percent of the shares vest on each anniversary of the grant date, subject to continued service and the potential vesting acceleration described in the option agreement.

Twenty percent of the shares vest one year after grant date, with the balance vesting in equal monthly installments thereafter over the next four years, subject to continued service.

One hundred percent of the shares vested upon grant date of April 1, 2017.

The shares vested following the six-month consulting period and shall be exercisable for one year from the vesting date .

All stock options held by Dr.

Grint at the time of his termination of employment expired without having been exercised.

(1) T w enty- f iv e pe r cent of the sha r es v est one y ear after the g r ant d a t e , with the b a lance v esting in equ a l month l y inst a llments the r eafter o v er the n e xt th r ee y ear s , subject to conti n ued service and the potenti a l v esting acc e le r a tion described in the option a g r eement.

(2) T w enty- f iv e pe r cent of the sha r es v est on each ann iv ersary of the g r ant d a t e , subject to conti n ued service and the potenti a l v esting acc e le r a tion described in the option a g r eement.

(3) T w enty pe r cent of the sha r es v est one y ear after g r ant d a t e , with the b a lance v esting in equ a l month l y inst a llments the r eafter o v er the n e xt f our y ear s , subject to conti n ued servic e.

(4) One hund r ed percent of the sha r es v ested upon g r ant d a te of A pril 1, 2017.

(5) Fifty percent of the shares vest each ann iv ersary of the g r ant d a t e , subject to conti n ued service and the potenti a l v esting acc e le r a tion described in the option agreement.

Equity Incentive Plans

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Additional long-term equity incentives are provided through the ESPP, which became effective in connection with our 2016 Annual Meeting of Shareholders in May 2016 and which we continue to use pursuant to the terms described herein.

The ESPP is intended to qualify as an “employee stock purchase plan”

within the meaning of Section 423 of the Internal Revenue Code.

The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code.

Our board of directors has delegated its authority to administer the ESPP to our Compensation Committee.

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The following table and related footnotes show the compensation paid during the year ended December 31, 2020 to our non-employee directors, other than Mr.

Patrick and Dr.

Grint, whose 2019 compensation is set forth under “—

Summary Compensation Table”

Patrick, whose 2020 compensation is set forth under “Summary Compensation Table” above.

Awards ($) (1)

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Richard Bastiani

Stewart Parker

Odysseas Kostas

Todd Peterson

Richard Bear (2)

Jeremy Curnock Cook (3)

Louis Drapeau(2)

Vijay Samant(2)

Stewart Parker (3)

(1) In accordance with SEC rules, this column represents the aggregate grant date fair value of the option awards granted during 2020 computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 for stock-based compensation transactions.

Assumptions used in the calculation of these amounts are included in Note 14 to the consolidated financial statements included in this Annual Report.

aggregate number of option awards outstanding (including exercisable and unexercisable stock options) as of December 31, 2019, for each non-employee director was as follows:

The aggregate number of

option awards outstanding (including exercisable and unexercisable stock options) as of December 31, 2020, for each non-employee director was as follows:

Board of Directors:

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Richard Bastiani

Odysseas Kostas

Todd Peterson

Richard Bear (2)

Jeremy Curnock Cook (3)

Stewart Parker (3)

Todd Peterson

Michael Perry

Resigned as a director on May 9, 2019, in connection with the Merger.

(2) Resigned as a director on February 12, 2020.

(3) Resigned as a director on December 8, 2020.

In September 2015, the board of directors approved a revised compensation structure for non-employee directors and following the Merger the new members of our board of directors elected to retain the current cash compensation schedule.

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For the Nominating and Corporate Governance Committee, the committee chair received an additional annual cash retainer of $5,000 and each member received an additional annual cash retainer of $3,000 .

The non-employee directors each received a stock option grant in 2019 in connection with the Merger or their initial appointment, as applicable, covering 27,383 shares.

The exercise price was equal to the closing market price on the grant date and options vest over two years, 50% on each anniversary of the grant date.

The term of the stock option is ten years.

Treatment of C3J Stock Options and Restricted Stock Awards in the Merger

At the effective time of the Merger, each option to purchase shares of C3J common stock issued by C3J (a “C3J Stock Option”) under C3J’s Amended and Restated 2006 Stock Option Plan and 2016 Stock Plan (together, the “C3J Stock Plans”) that was outstanding and unexercised immediately prior to the effective time of the Merger, whether or not vested, was converted into an option to purchase shares of our common stock, and we assumed the C3J Stock Plans and each outstanding C3J Stock Option in accordance with its terms.

T r eatment of C3J Stock Options and R estricted Stock A w a r ds in the Me r g er

Accordingly, following the Merger:

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(A) we may amend the terms of the C3J Stock Options and the C3J Stock Plans to reflect our substitution of the C3J Stock Options with options to purchase Armata common stock;

and (B) our board of directors succeeded to the authority and responsibility of C3J’s board of directors with respect to each C3J Stock Option assumed by us.

At the effective time of the Merger, each restricted stock award with respect to C3J common stock (a “C3J RSA”) that was outstanding immediately prior to the effective time of the Merger was assumed by us and converted into restricted stock awards with respect to our common stock, and we assumed the applicable restricted stock agreements

and each such C3J RSA in accordance with its terms.

and (B) our board of directors succeeded to the authority and responsibility of C3J’s board of directors with respect to each C3J Stock Option assumed by us.

restricted stock awards with respect to our common stock, and we assumed the applicable restricted stock agreements and each such C3J RSA in accordance with its terms.

All rights with respect to C3J common stock under the C3J RSAs assumed by us were converted into rights with respect to our common stock.

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and (iii) any restriction on any C3J RSA assumed by us continued in full force and effect and the vesting schedule and other provisions of such C3J RSA otherwise remained unchanged, subject to certain exceptions.

Employee Benefit Matters

Under the terms of the Agreement and Plan of Merger and Reorganization, dated January 3, 2019, as amended on March 25, 2019, by and among AmpliPhi, a wholly owned subsidiary of AmpliPhi and C3J (the “Merger Agreement”), for purposes of vesting, eligibility to participate, and level of benefits under the employee benefit plans, programs, contracts or arrangements of us or any of our subsidiaries (including, following the effective time of the Merger, C3J and its subsidiary), each employee who continued to be employed by us, C3J or any of our or its respective subsidiaries immediately following the Merger was credited with his or her years of service with us, C3J or any of our or its respective subsidiaries and their respective predecessors.

Limitation of Liability and Indemnification

Empl oy ee Bene f it Matters

Limitation of Liability and Indemni f ication

provided that no such indemnity shall indemnify any director from or on account of (a) acts or omissions of the director finally adjudged to be intentional misconduct or a knowing violation of law, (b) conduct of the director finally adjudged to be in violation of Section 23B.08.310 of the Washington Business Corporation Act (which relates to unlawful distributions) or (c) any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property or services to which the director was not legally entitled.

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provided, however, that any indemnity is in accordance with Washington law and does not include indemnification of intentional misconduct, knowing violation of law, or other violations of Washington law, including receipt of benefits in which a director of officer is not entitled.

We maintain a policy of directors’

and officers’

liability insurance that insures the directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

We have also entered into indemnification agreements with our executive officers and directors that provide for the indemnification of directors and executive officers to the fullest extent permitted by the Washington Business Corporation Act against expenses reasonably incurred by such persons in any threatened, pending or completed action, suit, investigation or proceeding in connection with their service as (i) a director or officer of us or (ii) a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, at our request.

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They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders.

A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We believe that these provisions in our articles of incorporation and bylaws and our indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

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● all of our current executive officers and directors as a group.

The percentage ownership information in the table below is based on 10,927,032 shares of common stock outstanding as of February 29, 2020.

The percentage ownership information in the table below is based on 20,622,065 shares of common stock outstanding as of March 1, 2021.

Information with respect to beneficial ownership provided in the table below is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G and Form 4 filed with the SEC.

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Greater than 5% Stockholders

Delta Dental of Wisconsin

Innoviva, Inc.

Delta Dental of Wisconsin

Delta Dental Plan of Michigan, Inc.

Delta Dental of California

Delta Dental Plan of South Dakota

Corvesta, Inc.

Synthetic Genomics

Directors and Named Executive Officers

Bastiani, Ph.D.

Richard Bear (Director) **

Jeremy Curnock Cook (Director)

Stewart Parker (Director)

Schlesinger, M.D.

Perry, D.V.M., Ph.D.

(Director) **

Kramer (Director)

Peterson, Ph.D.

Schlesinger, M.D.

Patrick (Chief Executive Officer and Director)

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Martin (Chief Financial Officer)

(Former Chief Executive Officer)

Duane Morris (Vice President of Operations)

All current executive officers and directors as a group (10 persons) (13)

Represents beneficial ownership of less than 1%.

** Richard Bear and Michael S.

Perry served as directors through February 11, 2020, and in connection with the First Closing, on February 12, 2020, each resigned from the Board.

Effective upon the resignations of Mr.

Perry, two individuals designated by Innoviva, Sarah Schlesinger, M.D.

and Odysseas Kostas, M.D., were appointed to fill the newly created vacancies.

Schlesinger and Kostas were awarded stock options to purchase 27,383 shares of common stock, neither of which are exercisable within 60 days.

(1) The shares listed were reported on a Schedule 13D/A filed with the SEC on January 26, 2021, with respect to shares of common stock held by Innoviva, Inc.

and Innoviva Strategic Opportunities, LLC.

Innoviva, Inc.

holds 8,710,800 shares of common stock and warrants to acquire an additional 8,710,800 shares of common stock.

Innoviva Strategic Opportunities, LLC holds 1,867,912 shares of common stock and warrants to acquire an additional 1,867,912 shares of common stock.

The principal business address of the reporting persons is c/o Innoviva, Inc., 1350 Old Bayshore Highway, Suite 400, Burlingame, CA 94010.

In 2020, Innoviva designated Odysseas Kostas, M.D.

and Sarah Schlesinger, M.D., two of the members of the board of directors of Innoviva, to serve on the Board.

As such, solely for purposes of Section 16 of the Exchange Act of 1934, as amended, Innoviva, Inc.

and Innoviva Strategic Opportunities, LLC may be deemed to be directors by deputization.

For purposes of the exemption under Rule 16b-3 promulgated under the Exchange Act, the Board approved the acquisition of any direct or indirect pecuniary interest in any shares of common stock, including any shares of common stock issuable upon the exercise of the aforementioned warrants.

(2) The shares listed were reported on a Schedule 13D filed with the SEC on May 21, 2019, with respect to shares of Common Stock held by Delta Dental of Wisconsin and Wyssta Investments Inc.

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The principal business address of the reporting persons is c/o Delta Dental of Wisconsin, 2801 Hoover Road, Stevens Point, Wisconsin 54481.

The shares listed were reported on a Schedule 13D filed with the SEC on February 12, 2020, with respect to 993,139 shares of common stock, and warrants to acquire an additional 993,139 shares of common stock, held by Innoviva, Inc.

Innoviva, Inc.

holds sole voting and dispositive power of such shares of common stock.

The principal business address of Innoviva, Inc.

is 1350 Old Bayshore Highway, Suite 400, Burlingame, CA 94010 .

(3) The shares listed were reported on a Schedule 13G filed with the SEC on May 17, 2019, with respect to shares of Common Stock held by Delta Dental Plan of Michigan, Inc.

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The principal business address of the reporting persons is 4100 Okemos Road, Okemos, Michigan 48864.

The shares listed were reported on a Schedule 13G filed with the SEC on May 10, 2019, with respect to shares of Common Stock held by Delta Dental of California.

Delta Dental of California reported holding sole and shared power to vote such shares and sole and shared power to dispose of such shares.

The principal business address of Delta Dental of California is 560 Mission Street, Suite 1300, San Francisco, California 94105 .

The shares listed are based on our internal records .

The shares listed were reported on a Schedule 13G filed with the SEC on May 21, 2019, with respect to shares of Common Stock held by Corvesta, Inc.

Corvesta, Inc.

holds sole voting and dispositive power of such shares.

The principal business address of Corvesta, Inc.

is 4818 Starkey Road, S.W., Roanoke, Virginia 24018 .

(4) Consists of (a) 13,889 shares of Common Stock and (b) 14,501 shares of Common Stock that Mr.

Bastiani has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options .

Consists of (a) 23 shares of Common Stock;

(b) 29,364 shares of Common Stock and warrants exercisable for 365 shares of Common Stock held by One Funds Management Limited as Trustee for Asia Pacific Healthcare Fund II (“

One Funds ”), an entity with which Mr.

Cook is affiliated due to his position with BioScience Managers Pty Ltd;

and (c) 1,108 shares of Common Stock that Mr.

Cook has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options.

Cook may be deemed to have shared voting and dispositive power over the shares beneficially owned by One Funds and Phillip Asset Management, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein, if any .

Consists of (a) 13,889 shares of Common Stock and (b) 809 shares of Common Stock that Ms.

Parker has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options .

Consists of (a) 16 shares of Common Stock;

(b) 29,364 shares of Common Stock and warrants exercisable for 365 shares of Common Stock held by One Funds, an entity with which Dr.

Perry is affiliated due to his position with BioScience Managers Pty Ltd;

and (c) 14,538 shares of Common Stock that Dr.

Perry has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options.

Perry may be deemed to have shared voting and dispositive power over the shares beneficially owned by One Funds, but disclaims such beneficial ownership, except to the extent of his pecuniary interest therein, if any.

Bastiani has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(5) Consists of (a) 13,692 shares of Common Stock that Dr.

Kostas has the right to acquire from us within 60 days of March 1, 2021 pursuant to the exercise of stock options, (b) 8,710,800 shares of common stock and warrants exercisable for 8,710,800 shares of common stock held by Innoviva, Inc., and (c) 1,867,912 shares of common stock and warrants exercisable for 1,867,912 shares of common stock held by Innoviva Strategic Opportunities, LLC.

Innoviva, Inc and Innoviva Strategic Opportunities, LLC are entities with which Dr.

Kostas is affiliated due to his position as a director of Innoviva, Inc.

Kostas may be deemed to have shared voting and dispositive power over the shares beneficially owned by Innoviva, Inc.

and Innoviva Strategic Opportunities, LLC, but disclaims such beneficial ownership except to the extent of their pecuniary interest therein, if any.

(6) Consists of 13,692 shares of Common Stock that Dr.

Patti has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(7) Consists of 13,692 shares of Common Stock that Dr.

Peterson has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(8) Consists of (a) 13,692 shares of Common Stock that Dr.

Schlesinger has the right to acquire from us within 60 days of March 1, 2021 pursuant to the exercise of stock options, (b) 8,710,800 shares of common stock and warrants exercisable for 8,710,800 shares of common stock held by Innoviva, Inc., and (c) 1,867,912 shares of common stock and warrants exercisable for 1,867,912 shares of common stock held by Innoviva Strategic Opportunities, LLC.

Innoviva, Inc and Innoviva Strategic Opportunities, LLC are entities with which Dr.

Schlesinger is affiliated due to her position as a director of Innoviva, Inc.

Schlesinger may be deemed to have shared voting and dispositive power over the shares beneficially owned by Innoviva, Inc.

and Innoviva Strategic Opportunities, LLC, but disclaims such beneficial ownership except to the extent of their pecuniary interest therein, if any.

(9) Consists of (a) 49,058 shares of Common Stock, (b) 155,028 restricted shares of Common Stock, and (c) 130,737 shares of Common Stock that Mr.

Patrick has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options .

Consists of (a) 32,162 shares of Common Stock and (b) 41,829 shares of Common Stock that Dr.

Varnum has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options .

Patrick has the right to acquire from us within 60 days of March 1, 2021 pursuant to the exercise of stock options.

(10) Consists of (a) 203 shares of Common Stock, (b) 31,851 restricted shares of Common Stock and (c) 116,510 shares of Common Stock that Dr.

Varnum has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(11) Consists of (a) 26 shares of Common Stock and (b) 46,952 shares of Common Stock that Mr.

Martin has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options .

Grint, M.D., resigned from his positions as Chief Executive Officer and director in May 2020.

Grint’s holdings consist of 42 shares of Common Stock and 1,786 shares of Common Stock that Dr.

Grint has the right to acquire from the Company within 60 days of February 29, 2020, pursuant to the exercise of stock options, which options were granted to Dr.

Grint after his resignation as consideration for his consulting

Subject to certain terms and conditions, the option will vest at the end of his six-month consulting period and will remain exercisable for a period of one year after the termination of such six-month consulting period.

All stock options held by Dr.

Grint at the time of his resignation expired pursuant to their terms prior to February 29, 2020 without having been exercised.

Other than the option granted after his resignation, the shares reported are based on our records as of the termination date of Dr.

Grint’s employment and do not take into account any transactions that may have occurred after such date.

Represents beneficial ownership of our common stock held by our current directors and executive officers as a group as of February 29, 2020, including any options and warrants exercisable within 60 days of February 29, 2020.

Omits former executive officers that are no longer employed by us and former directors that were not serving on our board of directors as of February 29, 2020.

The shares reported as being held by Delta Dental Plan of South Dakota consist of 563,415 shares held of record by Delta Dental Plan of South Dakota and 324,398 shares held of record by Delta Dental of South Dakota Foundation, an affiliated entity.

The shares listed were reported on a Schedule 13G filed with the SEC on November 12, 2019, with respect to shares of common stock held by Synthetic Genomics, Inc.

Synthetic Genomics, Inc.

reported holding sole power to vote such shares and sole power to dispose of such shares.

The principal business address of Synthetic Genomics, Inc.

is 11149 North Torrey Pines Road, La Jolla, California, 92037.

Consists of 13,691 shares of common stock that Dr.

Varnum has the right to acquire from us within 60 days of February 29, 2020, pursuant to the exercise of stock options.

Consists of 993,139 shares of common stock and warrants exercisable for 993,139 shares of common stock held by Innoviva, Inc., an entity with which Drs.

Schlesinger and Kostas are affiliated due to their positions as directors of Innoviva, Inc.

Schlesinger and Kostas may be deemed to have shared voting and dispositive power over the shares beneficially owned by Innoviva, Inc., but disclaims such beneficial ownership except to the extent of their pecuniary interest therein, if any.

Martin has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(12) Consists of (a) 5,612 shares of Common Stock, (b) 20,532 restricted shares of Common Stock and (c) 26,069 shares of Common Stock that Mr.

Morris has the right to acquire from us within 60 days of March 1, 2021, pursuant to the exercise of stock options.

(13) Represents beneficial ownership of our common stock held by our current directors and executive officers as a group as of March 1, 2021, including any options and warrants exercisable within 60 days of March 1, 2021.

Equity Compensation Plan Information

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In April 2016, our board of directors adopted our 2016 Equity Incentive Plan, or the 2016 Plan.

I n connection with the Merger, the name of the 2016 Plan was changed to the Armata Pharmaceuticals, Inc.

In connection with the Merger, the name of the 2016 Plan was changed to the Armata Pharmaceuticals, Inc.

2016 Equity Incentive Plan.

In connection with the Merger, the Company assumed the C3J Jian, Inc.

Amended 2006 Stock Option Plan (the “Assumed 2006 Plan”) and the C3J Therapeutics, Inc.

2016 Stock Plan (the “Assumed 2016 Plan”).

These plans provided for stock option and restricted stock awards (“RSAs”) to C3J employees in years prior to the Merger with AmpliPhi.

Amended 2006 Stock Option Plan (the “Assumed 2006 Plan”) and the C3J Therapeutics, Inc.

2016 Stock Plan (the “Assumed 2016 Plan”).

These plans provided for stock option and restricted stock awards (“RSAs”) to C3J employees in years prior to the Merger with AmpliPhi.

Pursuant to the Merger Agreement, all of the outstanding C3J stock options and restricted stock awards granted under the Assumed 2006 Plan and the Assumed 2016 Plan were converted into and became stock options and restricted stock awards in the Company.

In June 2019, the Company added 987,354 shares of common stock to the shares authorized for issuance under the 2016 Plan pursuant to an amendment to such plan approved by the Company’s shareholders at a special meeting held on

In addition, 115,336 shares of common stock were automatically added to the shares authorized for issuance under the 2016 Plan on January 1, 2019 pursuant to an “evergreen”

provision contained in the 2016 Plan.

In addition, 115,336 shares of common stock were automatically added to the shares authorized for issuance under the 2016 Plan on January 1, 2019 pursuant to an “evergreen” provision contained in the 2016 Plan.

The following table provides information as of December 31, 2020 with respect to our equity compensation plans:

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related-Person Transactions Policy and Procedures

For purposes of our policy only, a “related-person transaction”

is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person”

are participants involving an amount that exceeds $120,000 (or such lower threshold as may be applicable to us from time to time pursuant to the rules and regulations of the SEC or the NYSE American exchange).

R elated- P erson Tr ansactions P olicy and P r ocedu r es

We have adopted a written related-person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration and oversight of “related-person transactions.” For purposes of our policy only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds $120,000 (or such lower threshold as may be applicable to us from time to time pursuant to the rules and regulations of the SEC or the NYSE American exchange).

Transactions involving compensation for services provided to us by an employee, consultant or director are not considered related-person transactions under this policy.

A related person is any person who is, or at any time since the beginning of our last fiscal year, was, an executive officer, director or director nominee, any holder of more than 5% of our common stock, any of the foregoing’s immediate family members and any entity owned or controlled by any such persons.

Under the policy, where a transaction has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction to our Audit Committee (or, where review by our Audit Committee would be inappropriate, to another independent body of our board of directors) for approval.

by our Audit Committee would be inappropriate, to another independent body of our board of directors) for approval.

The presentation must include a description of, among other things, the material facts, the direct and indirect interests of the related persons, the benefits of the transaction to us and whether any alternative sources for comparable services or products are available.

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● the risks, costs and benefits to us;

the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;

● the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;

● the terms of the transaction;

the availability of other sources of comparable services or products;

● the terms available to or from, as the case may be, unrelated third parties.

In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval.

Certain Related-Person Transactions

Described below are any transactions occurring since January 1, 2016, and any currently proposed transactions, to which C3J or Armata was a party and in which:

The amounts involved exceeded or will exceed the lesser of (i) $120,000 and (ii) 1% of the average of the respective company’s total assets at year-end for the last two completed fiscal years;

A director, director nominee, executive officer, holder of more than 5% of the outstanding capital stock of the respective company, or any member of such person’s immediate family had or will have a direct or indirect material interest.

Financing Transaction

In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberation and approval.

Certain R elated- P erson Tr ansactions

Described b e l o w a r e a n y t r ansactions occurring since J a n uary 1, 2016, and a n y cur r ent l y p r oposed t r ansaction s , to w hich C3J or A r m a ta w as a party and in w hich:

◾ The amounts i n v ol v ed e x ceeded or will e x ceed the lesser of (i) $120,000 and (ii) 1% of the a v e r a g e of the r espect iv e compa n y ’ s tot a l assets a t y ea r -end f or the last t w o completed f isc a l y ears;

◾ A di r ecto r , di r ector nomine e , ex ecut iv e o f f ice r , holder of mo r e than 5% of the outstanding c a pit a l stock of the r espect iv e compa n y , or a n y member of such perso n ’ s immedi a te fami l y had or will h a v e a di r ect or indi r ect m a teri a l inte r est.

Financing T r ansaction

February 2019 Private Placement

On February 5, 2019, we entered into a share purchase agreement with certain investors, pursuant to which we agreed to sell, and certain stockholders of C3J (the “Investors”) agreed to buy, in a private placement, shares of common stock (the “Financing Shares”) immediately following the Effective Time of the Merger, having an aggregate purchase price of $10.0 million (the “Financing”).

An aggregate of 1,991,269 shares of Armata common stock was issued to the Investors in the Financing at a price of approximately $5.02192 per share.

On February 5, 2019, we entered into a share purchase agreement with certain investors, pursuant to which we agreed to sell, and the Investors agreed to buy, in a private placement, shares of common stock (the “2019 Financing Shares”) immediately following the Effective Time of the Merger, having an aggregate purchase price of $10.0 million (the “2019 Financing”).

An aggregate of 1,991,269 shares of Armata common stock were issued to the Investors in the 2019 Financing at a price of approximately $5.02192 per share.

The 2019 Financing Shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, and such shares bear appropriate restrictive legends.

In addition, the Financing Shares are subject to the provisions of the lock-up agreements entered into by certain officers, directors and stockholders of us and C3J concurrently with the execution of the Merger Agreement, pursuant to which they accepted certain restrictions on transfers of their shares of our common stock for the 180-day period following the effective time of the Merger.

In addition, the 2019 Financing Shares were subject to the provisions of the lock-up agreements entered into by certain officers, directors and stockholders of us and C3J concurrently with the execution of the Merger Agreement, pursuant to which they accepted certain restrictions on transfers of their shares of our common stock for the 180-day period following the effective time of the Merger.

Immediately following the closing of the Merger and the 2019 Financing, the former C3J security holders (including the Investors) owned approximately 76% of the aggregate number of shares of our common stock (of which approximately 20% was comprised of the 2019 Financing Shares) and our security holders as of immediately prior to the Merger owned approximately 24% of the aggregate number of shares of our common stock.

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February 2020 Private Placement

On January 27, 2020, the Company entered into the Securities Purchase Agreement with Innoviva in connection with the Private Placement.

Schlesinger and Kostas are both directors of Innoviva.

See “Part II—Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Recent Sales of Unregistered Securities”

for more information.

Change in Control and Severance Benefits Arrangements

We have entered into certain change in control and severance benefits arrangements with our officers, as more fully described in the section above entitled “Executive Compensation.”

On January 27, 2020, we entered into the Securities Purchase Agreement with Innoviva, pursuant to which the Company agreed to issue and sell to Innoviva, in a private placement, up to 8,710,800 newly issued shares of our common stock (the “Private Placement Shares”) and warrants (the “Common Warrants”) to purchase up to 8,710,800 shares of common stock, with an exercise price per share of $2.87 (the “Private Placement”).

Each share of common stock was sold together with one Common Warrant, and the per-unit purchase price is $2.87.

First Closing :

The Private Placement occurred in two tranches.

The first closing (the “First Closing”) occurred on February 12, 2020, at which time Innoviva purchased 993,139 Private Placement Shares and 993,139 Common Warrants, which was the maximum number of Private Placement Shares and Common Warrants issuable to Innoviva in compliance with any and all applicable laws and without the requirement for the prior receipt of the stockholders’ approval under the listing requirements of the NYSE American, in exchange for an aggregate gross cash payment of approximately $2.8 million.

The First Closing was subject to the satisfaction of certain previously disclosed closing conditions (including obtaining voting agreements (the “ Voting Agreements ”) from stockholders of the Company representing at least 50.1% of the outstanding shares of common stock).

Second Closing :

At the closing of the second tranche (the “Second Closing”), Innoviva purchased 7,717,661 Private Placement Shares and 7,717,661 Common Warrants for an aggregate purchase price of approximately $22.2 million.

Registration Rights Agreement and Investor Rights Agreement :

As part of the First Closing of the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) and an investor rights agreement (the “Investor Rights Agreement”) with Innoviva.

Pursuant to the Registration Rights Agreement, on April 1, 2020, the Company filed a registration statement on Form S-3 covering the resale of the securities issued and sold pursuant to the Securities Purchase Agreement with the Commission, which was declared effective on April 8, 2020.

The Investor Rights Agreement provides that for so long as Innoviva and its affiliates hold at least 12.5% of the outstanding shares of our common stock on a fully-diluted basis, Innoviva has the right to designate two (2) directors to our board of directors and for so long as Innoviva and its affiliates hold at least 8% but less than 12.5% of the outstanding shares of Common Stock on a fully-diluted basis, Innoviva has the right to designate one (1) director to our board of directors, subject to certain qualifications and conditions in the Investor Rights Agreement.

The Investor Rights Agreement also provides for participation rights for Innoviva to participate in our future offerings of equity securities.

2021 Private Placement

On January 26, 2021, we entered into the Securities Purchase Agreement with Innoviva Strategic Opportunities LLC, a wholly-owned subsidiary of Innoviva, (collectively, “Innoviva”), pursuant to which we agreed to issue and sell to Innoviva, in the 2021 Private Placement, 6,153,847 newly issued shares of our common stock (“Shares”) and warrants to purchase 6,153,847 shares of common stock (“Common Warrants”), with an exercise price per share of $3.25.

Each share of common stock was sold together with one common warrant granting the warrant holder the right to purchase an additional share of common stock at $3.25 per share.

The 2021 Private Placement occurred in two tranches.

First Closing:

The First Closing occurred on January 26, 2021.

Innoviva purchased 1,867,912 Shares and Common Warrants to purchase 1,867,912 shares of common stock for an aggregate purchase price of approximately $6.1 million.

Second Closing :

The Second Closing occurred on March 17, 2021.

Innoviva purchased 4,285,935 Shares and Common Warrants to purchase 4,285,935 shares of common stock for an aggregate purchase price of approximately $13.9 million.

Registration Rights Agreement and Investor Rights Agreement:

As part of the First Closing of the 2021 Private Placement, we entered into a registration rights agreement (the “Registration Rights Agreement”) and an amended and restated investor rights agreement (the “Amended and Restated Investor Rights Agreement”) with Innoviva.

Pursuant to the Registration Rights Agreement, we must file a registration statement on Form S-1 or Form S-3 (the “Shelf Registration Statement”) covering the resale of the securities issued and sold pursuant to the Securities Purchase Agreement with the Commission on a continuous basis pursuant to Rule 415 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”), or if Rule 415 is not available for offers and sales of such securities, by such other means of distribution of such securities as Innoviva may reasonably specify.

We must use its commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event (i) no later than the fifteenth (15th) day following the filing of the Shelf Registration Statement in the event of no “review” by the Commission, (ii) no later than the sixtieth (60th) day following the filing of the Shelf Registration Statement in the event of “limited review” by the Commission, or (iii) in the event of a “review” by the Commission, the one hundred and twentieth (120th) day following the filing of the Shelf Registration Statement, subject to certain exceptions..

The Amended and Restated Investor Rights Agreement provides that for so long as Innoviva and its affiliates hold at least 12.5% of the outstanding shares of common stock of Armata on a fully-diluted basis, Innoviva shall have the right to designate two (2) directors to our board of directors and for so long as Innoviva and its affiliates hold at least 8%, but less than 12.5%, of the outstanding shares of common stock of the Company on a fully-diluted basis, Innoviva shall have the right to designate one (1) director, subject to certain conditions and qualifications set forth in the A&R IRA.

The A&R IRA also provides Innoviva with certain subscription rights in the event of any new issuances.

Chan g e in Cont r ol and Se v e r ance Benefits Ar r an g ements

We have entered into certain change in control and severance benefits arrangements with our officers, as more fully described in the section above entitled “Executive Compensation.”

Director and Executive Officer Compensation

The compensation of our directors and named executive officers, including employment agreements and other compensatory arrangements with executive officers and stock option grants to executive officers and directors, is more fully described in the section above entitled “Executive Compensation.”

Indemnification Agreements

Limitation of Liability and Indemnification.”

In addition, the Merger Agreement provided that, for a period of six years following the effective time of the Merger, we will indemnify and hold harmless each person who is, has been, or who became prior to the effective time of the Merger, a director, officer, fiduciary or agent of us and our subsidiaries or C3J, respectively, against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’

fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that such person is or was a director, officer, fiduciary or agent of C3J or us or any of its or our respective subsidiaries, whether asserted or claimed prior to, at or after the effective time, in each case, to the fullest extent permitted under applicable law.

We have entered, and intend to continue to enter, into separate indemnification agreements with each of our directors and executive officers, as described in the section above entitled “Executive Compensation — Limitation of Liability and Indemnification.” In addition, the Merger Agreement provided that, for a period of six years following the effective time of the Merger, we will indemnify and hold harmless each person who is, has been, or who became prior to the effective time of the Merger, a director, officer, fiduciary or agent of us and our subsidiaries or C3J, respectively, against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation,

whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that such person is or was a director, officer, fiduciary or agent of C3J or us or any of its or our respective subsidiaries, whether asserted or claimed prior to, at or after the effective time, in each case, to the fullest extent permitted under applicable law.

Each such person will be entitled to advancement of expenses incurred in the defense of any such claim, action, suit, proceeding or investigation from us.

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The Merger Agreement required that, after the closing of the Merger, our articles of incorporation and bylaws were to contain provisions at least as favorable as the provisions relating to the indemnification, advancement of expenses and exculpation of present and former directors and officers set forth in our articles of incorporation and bylaws prior to the Merger.

Prior to the effective time of the Merger, we secured and prepaid, at C3J’s expense, a six year “tail policy”

on our then-existing directors’

and officers’

liability insurance policy.

Prior to the effective time of the Merger, we secured and prepaid, at C3J’s expense, a six year “tail policy” on our then-existing directors’ and officers’ liability insurance policy.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table represents aggregate fees incurred for Ernst & Young LLP services during the year ended December 31, 2019 and 2018:

The following table represents aggregate fees incurred for Ernst & Young LLP services by Armata Pharmaceuticals, Inc.

for the year ended December 31, 2020, as well as the following during the year ended December 31, 2019:

● Armata Pharmaceuticals, Inc.

includes fees incurred by the combined company from May 9, 2019, the date of Merger, to December 31, 2019.

There was no amount for the year ended December 31, 2018.

AmpliPhi Biosciences Corporation includes fees incurred from January 1, 2019 to May 9, 2019, the date of the Merger, and for the year ended December 31, 2018.

● AmpliPhi Biosciences Corporation includes fees incurred from January 1, 2019 to May 9, 2019, the date of the Merger.

● C3J Therapeutics, Inc.

includes fees incurred from January 1, 2019 to May 9, 2019, the date of the Merger, and for the year December 31, 2018.

includes fees incurred from January 1, 2019 to May 9, 2019, the date of the Merger.

Armata Pharmaceuticals, Inc.

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Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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Description of Document

Agreement and Plan of Merger and Reorganization, dated January 3, 2019, by and among the Company, C3J Therapeutics and Merger Sub (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8‑K, filed with the SEC on January 4, 2019).

First Amendment to Agreement and Plan of Merger and Reorganization, dated March 25, 2019, to Agreement and Plan of Merger and Reorganization, dated January 3, 2019, by and among the Company, C3J Therapeutics and Merger Sub (incorporated by reference to Exhibit 2.5 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2019)

Amended and Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10‑Q, filed with the SEC on November 16, 2015).

Articles of Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K (File No.

Amended and Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 16, 2015).

Articles of Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K (File No.

001-37544), filed with the SEC on April 24, 2017

Articles of Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10‑Q, filed on November 8, 2018).

Articles of Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2018).

Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No.

8 unchanged sentences

001-37544), filed with the SEC on December 11, 2019).

Amendment to Amended and Restated Bylaws of the registrant (February 24, 2020) (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No.

001-37544), filed with the SEC on February 26, 2020).

Articles of Amendment to Articles of Incorporation of the Company (effective March 26, 2020) (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No.

001-37544), filed with the SEC on March 30, 2020).

Reference is made to Exhibits 3.1 through 3.8.

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S‑8 (File No.

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (File No.

333-217563), filed on May 1, 2017).

Form of Common Stock Warrant issued to purchasers in March 2015 private placement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8‑K, filed with the SEC on March 19, 2015).

Form of Warrant to Purchase Shares of Common Stock issued in connection with the Company’s acquisition of certain assets of Novolytics Limited in February 2016 (incorporated by reference to Exhibit 4.13 to the Company’s Annual Report on Form 10‑K, filed with the SEC on March 30, 2016).

Form of Warrant to Purchase Common Stock issued to purchasers in May 2017 (incorporated by reference to Exhibit 4.18 to the Company’s Registration Statement on Form S‑1 (File No.

Form of Common Stock Warrant issued to purchasers in March 2015 private placement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on March 19, 2015).

Form of Warrant to Purchase Common Stock issued to purchasers in May 2017 (incorporated by reference to Exhibit 4.18 to the Company’s Registration Statement on Form S-1 (File No.

333-217169)).

Form of Common Stock Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2020).

Registration Rights Agreement, dated February 12, 2020, by and between the Company and Innoviva (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2020).

Description of the Company’s securities registered under Section 12 of the Exchange Act.

Form of Voting Agreement, to be entered into by and between Innoviva and certain stockholders of the Company (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed on January 29, 2020).

Targeted Genetics Corporation 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form 10 (File No.

Form of Common Stock Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2020).

Registration Rights Agreement, dated January 26, 2021, by and between the Company and Innoviva (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on January 27, 2021)

Form of Common Stock Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 27, 2021)

Description of the Company’s securities registered under Section 12 of the Exchange Act.

Form of Voting Agreement, by and between the Company and Innoviva (incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed on January 27, 2021 ).

Targeted Genetics Corporation 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form 10 (File No.

000-23930), filed December 16, 2013, as amended).

AmpliPhi Biosciences Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form 10 (File No.

000-23930), filed December 16, 2013, as amended).

Form of Stock Option Agreement under AmpliPhi Biosciences Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form 10 (File No.

000-23930), filed December 16, 2013, as amended).

AmpliPhi Biosciences Corporation 2013 Stock Incentive Plan (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form 10 (File No.

000-23930), filed December 16, 2013, as amended).

Form of Grant Notice and Stock Option Agreement under AmpliPhi Biosciences Corporation 2013 Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10‑K, filed with the SEC on March 30, 2016).

Armata Pharmaceuticals Inc.

2016 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 99.1 to the registrant’s Registration Statement on Form S-8, filed with the SEC on June 10, 2019).

Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Armata Pharmaceuticals Inc.

2 unchanged sentences

2016 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2019).

Form of Indemnity Agreement with the Company’s Directors and Executive Officers (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8‑K, filed with the SEC on January 19, 2016).

Form of Indemnity Agreement with the Company’s Directors and Executive Officers (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 19, 2016).

Offer Letter, dated as of January 18, 2016, by and between the Company and Steve R.

Martin (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8‑K, filed with the SEC on January 19, 2016).

Offer Letter, dated as of January 27, 2017, by and between the Company and Igor P.

Bilinsky, Ph.D (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8‑K, filed with the SEC on February 2, 2017).

Amendment to Offer Letter Agreement, dated April 1, 2017, by and between the Company and Igor P.

Bilinsky, Ph.D.

(incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8‑K, filed with the SEC on April 4, 2017).

Martin (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 19, 2016).

Amendment to Offer Letter Agreement, dated April 1, 2017, by and between the Company and Steve R.

Martin (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8‑K, filed with the SEC on April 4, 2017).

Offer Letter, dated June 1, 2017, by and between the Company and Paul C.

(incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10‑Q, filed with the SEC on August 14, 2017).

Form of Share Purchase Agreement by and among Armata Pharmaceuticals Inc.

, C3J Therapeutics, Inc.

and certain shareholders of C3J Therapeutics, Inc., dated as of February 5, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8‑K, filed with the SEC on February 7, 2019).

Registration Rights Agreement, dated as of May 9, 2019, by and among Armata Pharmaceuticals, Inc.

and the Investors.

(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Martin (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed with the SEC on April 4, 2017).

Employment Agreement, dated October 1, 2018, between C3J Therapeutics, Inc.

Patrick (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Amendment to Employment Agreement, dated as of January 16, 2019, between C3J Therapeutics, Inc.

Patrick (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Form of Director Appointment Letter (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Patrick (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Form of Director Appointment Letter (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

Research Collaboration and Option to License Agreement, effective as of May 24, 2017, by and between Synthetic Genomics, Inc.

4 unchanged sentences

Securities Purchase Agreement, dated January 26, 2021, by and between the Company and Innoviva (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on January 27, 2021).

Investor Rights Agreement, dated February 12, 2020, by and between the Company and Innoviva (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on February 13, 2020).

Amended and Restated Investor Rights Agreement, dated January 26, 2021, by and between the Company and Innoviva Strategic Opportunities LLC (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on January 27, 2021).

Letter Agreement, dated as of March 10, 2020, by and between Armata Pharmaceuticals, Inc.

and the Cystic Fibrosis Foundation (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, filed with the SEC on May 14, 2020).

Employment Agreement, dated as of January 18, 2012, by and between C3 Jian, Inc.

and Brian Varnum (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, filed with the SEC on May 14, 2020).

Assignment and First Amendment of Office Lease, dated as of April 2020, by and among Armata Pharmaceuticals, Inc., C3 Jian, Inc.

and Marina Business Center, LLC (incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q, filed with the SEC on May 14, 2020).

Letter from PricewaterhouseCoopers LLP to the U.S.

40 unchanged sentences

Bastiani, Ph.D.

March 19, 2020

/s/ Jeremy Curnock Cook

March 19, 2020

Jeremy Curnock Cook

/s/ Odysseas D.

March 18, 2021

Schlesinger, M.D

Stewart Parker

/s/ Robin Kramer

March 18, 2021

Stewart Parker

/s/ Joseph M.

3 unchanged sentences

Peterson, Ph.D.

Schlesinger, M.D.

March 18, 2021

Schlesinger, M.D.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures