What changed in this filing

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Item 9A. Controls and Procedures

2022-03-17 compared with 2021-03-18 · 239 added, 244 removed, 637 unchanged (43% of the section changed)

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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.

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.

In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2020, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

As of December 31, 2021, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) (the “2013 Framework”).

In adopting the 2013 Framework, management assessed the applicability of the principles within each component of internal control and determined whether or not they have been adequately addressed within the current system of internal control and adequately documented.

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An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of any changes in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial

reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICATIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information about our executive officers and directors as of March 1, 2022.

Chief Executive Officer, Director

Brian Varnum, Ph.D.

President & Chief Development Officer

Chief Executive Officer

Chief Financial Officer

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Non-Employee Directors

Bastiani, Ph.D.(3)

Jules Haimovitz (3)(4)

Chairman of the Board of Directors

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(4) Serves as a designee of Innoviva under the Investor Rights Agreement.

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.

Patrick was the President and board member of ID Biomedical Corporation from 1994 until 2005, when the company was acquired by GlaxoSmithKline.

Prior to ID Biomedical Corporation, Mr.

Patrick was the Director of the Office of Intellectual Property Administration at the University of California, Los Angeles (“UCLA”), where he was responsible for the patenting and licensing of intellectual property arising out of UCLA.

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

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;

and AltPep Corporation.

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

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

Brian Varnum, Ph.D.

has served as our President and Chief Development Officer since the Merger.

has served as our Chief Executive Officer since August 2021.

Prior to that, he served as President and Chief Development Officer since the Merger.

He previously served at C3J as its Vice President of Product Development starting in 2012 and became its Chief Development Officer in 2014, serving in that role until the Merger in May 2019.

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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 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’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.

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Non-Employee Directors

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.

Bastiani is currently retired.

He has over 40 years of industry experience and has served on the boards of 14 biotechnology and life science companies throughout his career, including as a director of BioNex Solutions, Inc., a privately-held company that develops and manufactures systems for laboratory automation and liquid handling, since 2014.

From 1995 through 2018, he served as a member of the board of directors of Abaxis, Inc., a formerly public diagnostic company providing point of care, automated blood analysis systems and single test products for human and veterinary markets that was acquired by Zoetis Inc.

in 2018 for approximately $2.0 billion.

From 1995 to 1998, Dr.

Bastiani was President of Dendreon, a biotechnology company dedicated to providing innovative cell therapies for cancer.

From 1970 until 1995, Dr.

Bastiani held a number of positions with Syva Company, a diagnostic company, including as President from 1991 until Syva Company was acquired by a subsidiary of Hoechst AG of Germany in 1995.

From 2007 to 2011, Dr.

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.

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

in Chemistry from Santa Clara University in 1964.

J ules Haimovitz joined the board of directors of Armata Pharmaceuticals in April 2021, and in June 2021 was elected as the Company’s Chairman of the Board.

At Innoviva, Inc.

INVA), a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited, Mr.

Haimovitz has served as a member of the Board of Directors since February 2018 and is currently a member of the Audit Committee, the chair of the Compensation Committee and a member of the Nominating/Corporate Governance Committee.

Haimovitz is currently President of Haimovitz Consulting, Inc.

He previously served as a member of the board of directors of Ariad Pharmaceuticals, where he was also a member of its audit committee;

Dial Global, Inc., where he was also member of its audit committee;

and Imclone Pharmaceuticals, where he served as chairperson of its audit committee.

Haimovitz has also served as Chief Executive Officer or Chief Operating Officer of the following companies:

Spelling Entertainment, Inc., King World Productions and VJN, Inc.

Haimovitz holds a B.S.

degree in Mathematics from Brooklyn College.

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.

Haimovitz 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.

Kostas , M.D.

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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.

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.

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

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

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

He also currently serves as President and Chief Executive Officer and director of AgilVax, Inc., a private biotechnology company that discovers and develops antibody-based therapeutics to treat metastatic cancer, and as President of JP Biotech Advisors, Inc., which provides strategic growth and drug development advice to emerging biotechnology companies.

Patti is also a director of ECM Biosurgery, a private preclinical biotechnology company focused on collagen-based therapeutics.

He also currently serves as President of JP Biotech Advisors, Inc., which provides strategic growth and drug development advice to emerging biotechnology companies.

Patti was Executive Chairman of AgiVax, Inc.

from November 2018 until August 2019, when he was appointed President and Chief Executive Officer and director of AgilVax, Inc., until July 2021.

From November 2012, Dr.

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He also served as its Chief Scientific Officer and Vice President of Research and Development from 2005 to 2007 and as Vice President, Preclinical Development prior to that.

Patti was a director of Inhibitex from 1998 to 2005.

Before co-founding Inhibitex, Dr.

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 was an Assistant Professor at Texas A&M’s Institute of Biosciences and Technology and 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 SciStem Therapeutics, Inc., a privately held biotechnology company from 2012 to 2015.

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.

Patti was selected as a director because of his scientific knowledge and background and experience in developing numerous preclinical and clinical biopharmaceutical 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.

Patrick served as our Chief Executive Officer and as a director from the consummation of the Merger through August 2021.

Before joining C3J, Mr.

Patrick was the President and board member of ID Biomedical Corporation from 1994 until 2005, when the company was acquired by GlaxoSmithKline.

Prior to ID Biomedical Corporation, Mr.

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

Patrick currently serves on the board of directors of AltPep Corporation, a private biotechnology company developing drugs for amyloid diseases.

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

Director Qualifications .

Peterson , Ph.D.

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

Peterson also serves on the board of directors of the following private companies:

Molecular Assemblies, NanoCellect BioMedical, Inc.

and Center of Excellence for Engineering Biology.

Director Qualifications .

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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.

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

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

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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.

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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Board Composition

Our business and affairs are organized under the direction of our board of directors, which currently consists of six members.

Our business and affairs are organized under the direction of our board of directors, which currently consists of eight members.

The primary responsibilities of our board of directors are to provide oversight, strategic guidance, counseling and direction to our management.

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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., Odysseas D.

Kostas, M.D., Robin C.

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The board concluded that Mr.

Patrick is not an independent director within the meaning of the applicable NYSE American exchange listing standards.

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

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.

Patrick and Dr.

Varnum are not an independent directors within the meaning of the applicable NYSE American exchange listing standards.

Patrick and Dr.

Varnum are not independent directors under these rules given their role as our former Chief Executive Officer and current Chief Executive Officer, respectively.

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

Our amended and restated bylaws provide that the board of directors will consist of not less than one nor more than nine members, as fixed from time to time by a resolution of the board of directors.

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Board Leadership Structure

Our board of directors has an independent Chairman, Richard J.

Bastiani, Ph.D., who has authority, among other things, to call and preside over board meetings, to set meeting agendas and to determine materials to be distributed to the board of directors.

Our board of directors has an independent Chairman, Jules Haimovitz, who has authority, among other things, to call and preside over board meetings, to set meeting agendas and to determine materials to be distributed to the board of directors.

Accordingly, the Chairman has substantial ability to shape the work of the board of directors.

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.

Patrick serves as our Chief Executive Officer, while Dr.

Bastiani serves as our Chairman of our 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.

Varnum serves as our Chief Executive Officer, while Mr.

Haimovitz serves as our Chairman of our board of directors.

We expect and intend the positions of Chairman of the board of directors and Chief Executive Officer to continue to be held by separate individuals in the future.

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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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● 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;

● reviewing our annual and quarterly financial statements and reports, including disclosures relating to Environmental, Social, and Governance (“ESG”) and 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 critical audit matters and 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;

● reviewing with management and our auditors any earnings announcements and other public announcements regarding material developments;

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● reviewing on a periodic basis our investment policy;

● reviewing annually the company’s Code of Conduct and Ethics;

● reviewing and evaluating on an annual basis its own performance, including its compliance with its charter.

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Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee consists of Dr.

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.

Our Nominating and Corporate Governance Committee consists of Mr.

Haimovitz (Chair) Dr.

Kostas and Dr.

Patti 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:

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EXECUTIVE COMPENSATION

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.

Set forth below is certain information regarding the historical compensation of our named executive officers during the year ended December 31, 2021 and 2020.

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

Executive Compensation

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

Patrick, Chief Executive Officer;

◾ Brian Varnum, Ph.D., President and Chief Development Officer;

◾ Steve Martin, Chief Financial Officer

The named executive officers as of December 31, 2021 were:

◾ Brian Varnum, Ph.D., Chief Executive Officer;

◾ Steve Martin, Senior Vice President and Chief Financial Officer

Summary Compensation Table

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 .

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

Incentive Plan

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Compensation ($)

Chief Executive Officer

Brian Varnum, Ph.

President and Chief Development Officer

Senior VP and Chief Financial Officer

(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.

Chief Executive Officer (former President and Chief Development Officer) (2)

Chief Financial Officer

Former Chief Executive Officer (3)

(1) In accordance with SEC rules, this column represents the aggregate grant date fair value of the option awards granted and incremental expenses as a result of modifications during 2021 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.

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.

Varnum was promoted to Chief Executive Officer effective on August 2, 2021.

Patrick retired from his role as Chief Executive Officer on August 2, 2021.

He continues to serve as a Board member of the Company.

See the section Agreements with our Names Executive Officers for the terms of his Advisory Compensation subsequent to August 2, 2021.

The base salaries of the named executive officers in 2021, as applicable, were generally determined and approved by the board of directors, based on the recommendation of the Compensation Committee.

Varnum’s annual base salary for the period January 1, 2020 through August 2, 2021 was $437,500.

Effective August 2, 2021 with the promotion to Chief Executive Officer, Dr.

Varnum’s annual base salary was adjusted to $500,000.

Martin’s annual base salary for 2021 was $370,800.

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.

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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 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.

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

Varnum was eligible to receive an annual performance-based bonus for 2021 equal to, at target, 50% of his earned salary based on our achievement of certain performance goals.

Martin was eligible to receive an annual performance-based bonus for 2021 equal to, at target, 40% of his annual salary based on our achievement of certain performance goals.

Patrick, under the terms of his August 9, 2021 advisory letter agreement was eligible to receive an annual performance-based bonus for 2021 equal to, at target, 50% of his annual salary based on our achievement of certain performance goals as a Company.

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 2021, the Compensation Committee reviewed performance results against the corporate goals and made a recommendation, that the board approved to authorize payout for the 2021 performance-based bonuses at the 100% achievement level.

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

Patrick - $257,750;

As a result, the named executive officers received the following performance-based bonuses for 2020:

Varnum - $231,844;

Martin - $140,000.

Martin - $148,320 and Mr.

Patrick - $283,250.

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

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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.

Our executives may have been awarded an initial new hire grant upon commencement of service and 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.

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

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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 “Payments and Benefits upon Termination or Change in Control” below.

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

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.

Patrick will be paid an annual base salary as may be established from time to time by the board of directors, and an annual cash bonus, in accordance with a milestone-based structure established by the board of directors, enabling him to earn between 50% and 100% of the amount of his base salary as a bonus.

He will also be eligible for all fringe benefit plans available to other full-time employees.

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 the Company.

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

Varnum at any time.

On August 1, 2021, Todd R.

Patrick, who had served as the Company’s Chief Executive Officer since May 2019, retired from day-to-day active management of the Company and resigned as CEO.

Patrick will continue to serve as an advisor to the Company’s CEO through December 31, 2022 and will continue to serve as a member of the Board of Directors (the “Board”) until at least the Company’s next Annual Meeting of Shareholders.

In connection with Mr.

Patrick’s retirement, Brian Varnum, Ph.D.

was appointed to serve as CEO of the Company and as a member of the Company’s Board.

On August 1, 2021, the Company and Dr.

Varnum entered into an amended employment agreement.

Under the terms of the agreement, Dr.

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 will be paid an annual base salary of $500,000 which may be further adjusted from time to time by the board of directors, and an annual target performance bonus of 50% 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.”

On August 9, 2021, the Company and Mr.

Patrick entered into a advisory letter agreement, which amends his employment agreement and sets forth the terms and conditions of his continuing relationship with the Company.

Under the terms of the advisory letter agreement, Mr.

Patrick receives an annual base salary of $566,500 through December 31, 2021, and then 50% of the 2021 base salary through December 31, 2022.

Patrick will also be eligible for an annual target performance bonus of 50% of paid salary for 2021 and 2022, based on our achievement of certain performance objectives.

He will also be eligible for all fringe benefit plans available to other employees through December 31, 2022.

Under the terms of the advisory letter agreement, Mr.

Patrick’s equity awards outstanding will continue to vest through December 31, 2022.

Subject to completion of the advisory services through December 31, 2022, Mr.

Patrick will then receive full vesting in one-half of the then unvested equity held in the Company and all vested equity securities shall be exercisable in full for their full remaining term.

Patrick is also entitled to certain severance benefits as described below under the section entitled “Payments and Benefits upon Termination or Change in Control.” The letter agreement also provides that if the Company terminates Mr.

Patrick’s employment other than for cause prior to December 31, 2022, he will continue to receive his salary, bonus, and equity vesting from the date of termination through December 31, 2022.

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

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Payments and Benefits upon Termination or Change in Control

Under the terms of the Patrick Employment Agreement, if Mr.

Under the terms of the offer letter agreement with Dr.

Varnum is entitled to receive six months of continued base salary if his employment with us was terminated without cause or if he resigned for good reason provided that he provided us with an effective release of claims.

Under the terms of the amended offer letter agreement with Dr.

Varnum, if Dr.

Varnum is terminated without cause or resigns for good reason (in each case as defined in the agreement), then he will be entitled to severance payments equal to six months of continued base salary, and additionally, if such termination or resignation occurred in connection with a change in control, full acceleration of his time-based equity awards, provided that in either case, he provided the Company with an effective release of claims.

Under the terms of the offer letter agreements with Mr.

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.

Under the terms of the advisory letter agreement, if Mr.

Patrick is terminated without Cause then he will be entitled to severance payments equal to his remaining cash compensation amounts under the advisory letter agreement and his vested equity benefits, also as described in the advisory letter agreement.

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.”

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.”

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information regarding all outstanding equity awards held by the named executive officers as of December 31, 2020.

All figures have been adjusted to reflect the impact of the Merger and related assumption of C3J equity awards and the reverse split.

The following table sets forth certain information regarding all outstanding equity awards held by the named executive officers as of December 31, 2021 and our former Chief Executive Officer, Todd Patrick, who retired effective

August 2, 2021 and is serving in an advisory role through December 31, 2022.

(#) Exercisable

Unexercisable

(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.

(1) 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.

(2) Fifty percent of the shares vest each anniversary of the grant date, subject to continued service and the potential vesting acceleration described in the option agreement.

Equity Incentive Plans

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Employee Stock Purchase Plan

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.

Additional long-term equity incentives are provided through the employee stock purchase plan (“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.

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Compensation ($)

Richard Bastiani

Jules Haimovitz

Odysseas Kostas

Todd Peterson

Richard Bear (2)

Jeremy Curnock Cook (3)

Stewart Parker (3)

Richard Bastiani (2)

(1) In accordance with SEC rules, this column represents the aggregate grant date fair value of the option awards granted during 2021 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 13 to the consolidated financial statements included in this Annual Report.

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:

The aggregate number of option awards outstanding (including exercisable and unexercisable stock options) as of December 31, 2021, for each non-employee director was as follows:

Board of Directors:

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Stock Options Exercisable

Richard Bastiani

Jules Haimovitz

Odysseas Kostas

Todd Peterson

Richard Bear (2)

Jeremy Curnock Cook (3)

Stewart Parker (3)

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

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

Richard Bastiani (2)

(2) Resigned as a director on June 6, 2021.

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 .

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

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.

Accordingly, following the Merger:

(i) each C3J Stock Option assumed by us is exercisable solely for shares of our common stock;

(ii) the number of shares of our common stock subject to each C3J Stock Option assumed by us was determined by multiplying (A) the number of shares of C3J common stock that were subject to such C3J Stock Option, as in effect immediately prior to the effective time of the Merger, by (B) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of our common stock;

(iii) the per share exercise price for our common stock issuable upon exercise of each C3J Stock Option assumed by us was determined by dividing (A) the per share exercise price of the C3J common stock subject to such C3J Stock Option, as in effect immediately prior to the effective time of the Merger, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent;

and (iv) any restriction on the exercise of any C3J Stock Option assumed by us continued in full force and effect and the term, exercisability, vesting schedule and other provisions of such C3J Stock Option otherwise remained unchanged, except that:

(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.

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.

Accordingly, following the Merger:

(i) each C3J RSA assumed by us relates to shares of our common stock;

(ii) the number of shares of our common stock subject to each C3J RSA assumed by us was determined by multiplying (A) the number of shares of C3J common stock that were subject to such C3J RSA, as in effect immediately prior to the effective time of the Merger, by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of our common stock;

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.

Empl oy ee Bene f it Matters

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 Indemni f ication

Limitation of Liability and Indemnification

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.

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These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities.

In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options or warrants that are either immediately exercisable or exercisable on or before April 29, 2021, which is 60 days after February 28, 2021.

These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

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Innoviva, Inc.

Delta Dental of Wisconsin

Delta Dental Plan of Michigan, Inc.

Directors and Named Executive Officers

Bastiani, Ph.D.

Jules Haimovitz (Director)

Kramer (Director)

Patrick (Director)

Peterson, Ph.D.

Schlesinger, M.D.

Patrick (Chief Executive Officer and Director)

Brian Varnum, Ph.

(President and Chief Development Officer)

(Chief Executive Officer)

Martin (Chief Financial Officer)

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Represents beneficial ownership of less than 1%.

(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.

(1) The shares listed were reported on a Form 4 filed with the SEC on February 11, 2022, with respect to shares of common stock held by Innoviva, Inc.

and Innoviva Strategic Opportunities, LLC.

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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.

Innoviva designated Jules Haimovitz and Odysseas Kostas, M.D., two of the members of the board of directors of Innoviva, to serve on our Board.

Additionally, Sarah Schlesinger, M.D., is a member of the board of directors of Innoviva.

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

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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.

Delta Dental of Wisconsin beneficially owns 1,628,994 shares of Common Stock, and Wyssta Investments Inc.

beneficially owns 478,681 shares of Common Stock.

Wyssta Investments Inc.

is a wholly-owned subsidiary of Delta Dental of Wisconsin and, as such, Delta Dental of Wisconsin has the sole power to vote or dispose of the shares owned by Wyssta Investments Inc.

As such, Delta Dental of Wisconsin holds sole voting and dispositive power of 2,107,675 shares.

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

(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.

and Renaissance Holding Company.

Delta Dental Plan of Michigan, Inc.

owns, directly or indirectly, approximately 68% of the outstanding Common Stock of Renaissance Holding Company.

Delta Dental Plan of Michigan, Inc.

and Renaissance Holding Company hold shared voting and dispositive power of 1,265,802 shares.

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

(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 March 1, 2021, pursuant to the exercise of stock options.

(2) Consists of (a) 15,000 shares of Common Stock that Mr.

Haimovitz has the right to acquire from us within 60 days of March 1, 2022 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) 10,980,761 shares of common stock and warrants exercisable for 7,961,243 shares of common stock held by Innoviva Strategic Opportunities, LLC.

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

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

Haimovitz 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.

(3) Consists of (a) 38,883 shares of Common Stock that Dr.

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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.

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.

(4) Consists of 15,000 shares of Common Stock that Ms.

Kramer has the right to acquire from us within 60 days of March 1, 2022, pursuant to the exercise of stock options.

(5) Consists of (a) 74,473 shares of Common Stock, (b) 107,500 restricted shares of Common Stock, and (c) 244,918 shares of Common Stock that Mr.

Patrick has the right to acquire from us within 60 days of March 1, 2022 pursuant to the exercise of stock options.

(6) Consists of 38,883 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.

Patti has the right to acquire from us within 60 days of March 1, 2022, pursuant to the exercise of stock optionss.

(7) Consists of 38,883 shares of Common Stock that Dr.

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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 March 1, 2021 pursuant to the exercise of stock options.

(9) Consists of (a) 615 shares of Common Stock, (b) 31,229 restricted shares of Common Stock and (c) 209,973 shares of Common Stock that Dr.

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2016 Equity Incentive Plan.

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

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.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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

Related-Person Transactions Policy and Procedures

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).

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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.

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

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.

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.

To identify related-person transactions in advance, we rely on information supplied by our executive officers, directors, director nominees and certain significant stockholders.

In considering related-person transactions, our Audit Committee or other independent body of our board of directors takes into account the relevant available facts and circumstances including, but not limited to:

In considering related-person

transactions, our Audit Committee or other independent body of our board of directors takes into account the relevant available facts and circumstances including, but not limited to:

● the risks, costs and benefits to us;

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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 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 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.

In connection with the 2019 Financing, we entered into a registration rights agreement with the Investors, dated May 9, 2019, pursuant to which we agreed, subject to certain exceptions, to cause the 2019 Financing Shares to be registered for resale under the Securities Act.

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

February 2020 Private Placement

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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.

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.

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

2021 Private Placement

January 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.

The January 2021 Private Placement occurred in two tranches.

First Closing:

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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.

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

October 2021 Private Placement

On October 28, 2021, the Company entered into a securities purchase agreement (the “October 2021 Securities Purchase Agreement”) with the Cystic Fibrosis Foundation (“CFF”), a Delaware corporation, the Company’s partner for its lead Phase 1b/2a clinical development program, and Innoviva Strategic Opportunities LLC, a wholly-owned subsidiary of Innoviva, Inc.

INVA) (collectively, “Innoviva”) for the private placement of newly issued shares of common stock, par value $0.01 per share, of the Company (“Common Stock”).

Pursuant to the October 2021 Securities Purchase Agreement, the Company issued and sold 909,091 shares to CFF and 1,212,122 shares to Innoviva, each at a per share price of $3.30 (the “October 2021 Private Placements”).

Registration Rights Agreement and Investor Rights Agreement:

As part of the October 2021 Private Placement, the Company also entered into a registration rights agreement (the “October 2021 Registration Rights Agreement”) with the Purchasers.

Pursuant to the October 2021 Registration Rights Agreement, the Company 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 U.S.

Securities and Exchange Commission (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 the Purchasers may reasonably specify.

The Company 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 Company also entered into an Amended and Restated Voting Agreement with Innoviva (the “October 2021 Voting Agreement”), pursuant to which Innoviva agreed not to vote or take any action by written consent with respect to shares of common stock of the Company held by Innoviva, or any of its subsidiaries which represent, in the aggregate, more than 49.5% of the total number of shares of common stock issued and outstanding of the Company as of any given record date for voting (such shares, the “Excess Shares”) on matters related to the election of directors to the Board or removal of directors from the Board (“Board Matters”) presented at any meeting of the stockholders of the Company (or any adjournment or postponement thereof) or for their action by written consent, in each case, unless the Board authorizes Innoviva to vote such Excess Shares with respect to Board Matters.

Februay 2022 Private Placement

On February 9, 2022, the Company entered into a securities purchase agreement to sell its common stock and warrants to Innoviva (“February 2022 Private Placement”).

The gross proceeds to the Company from the transaction are expected to be $45 million, before deducting estimated offering expenses.

Pursuant and subject to the terms and conditions of the securities purchase agreement and related agreements, Innoviva will purchase 9,000,000 newly issued shares of the Company’s common stock, at a price of $5.00 per share, and warrants to purchase up to 4,500,000 additional shares of common stock, with an exercise price of $5.00 per share.

The stock purchases are expected to occur in two tranches.

Upon execution, Innoviva purchased approximately 3,614,792 shares of common stock and warrants to purchase 1,807,396 shares of common stock for an aggregate purchase price of $18.1 million.

At the closing of the second tranche, upon the Company’s stockholders voting in favor of the transaction, Innoviva will purchase 5,385,208 shares of common stock and warrants to purchase 2,692,604 shares of common stock for an aggregate purchase price of $26.9 million.

Subject to the satisfaction of certain closing conditions, including the approval of the Company’s stockholders, the second

closing contemplated by the securities purchase agreement is expected to occur near the end of the first quarter of 2022.

Registration Rights Agreement and Investor Rights Agreement:

As part of the first closing of the February 2022 Private Placement, the Company entered into an amended and restated investor rights agreement (the “A&R IRA”), which amended and restated in its entirety that certain Investor Rights Agreement, dated February 12, 2020, as amended and restated as of January 26, 2021, by and among Innoviva, Innoviva, Inc.

and the Company.

Pursuant to the A&R IRA, for so long as Innoviva and its affiliates hold at least 12.5% of the outstanding shares of common stock of the Company on a fully-diluted basis, Innoviva and its affiliates shall have the right to designate two directors to the board of directors of the Company (the “Board”) 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 and its affiliates shall have the right to designate one director to the Board, subject to certain conditions and qualifications set forth in the A&R IRA.

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

The Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Innoviva.

Pursuant to the Registration Rights Agreement, the Company 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 U.S.

The Company also entered into an amended and restated voting agreement with Innoviva and Innoviva, Inc.

(the “Voting Agreement”), which amended and restated in its entirety that certain Voting Agreement dated January 26, 2021, as amended and restated as of October 28, 2021, pursuant to which Innoviva and its affiliates agreed not to vote or take any action by written consent with respect to shares of common stock of the Company held by Innoviva or any of its subsidiaries which represent, in the aggregate, more than 49.5% of the total number of shares of common stock voting with respect to certain matters (such shares, the “Excess Shares”) related to the election of directors to the Board, removal of directors from the Board or amendment of the bylaws of the Company to reduce the maximum number of directors or set the number of directors who may serve on the Board (“Board Matters”) presented at any meeting of the stockholders of the Company (or any adjournment or postponement thereof) or for their action by written consent, in each case, unless the Board authorizes Innoviva or its affiliates to vote such Excess Shares with respect to Board Matters .

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.”

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Indemnification Agreements

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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PRINCIPAL ACCOUNTANT FEES AND SERVICES

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.

● 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.

The following table represents aggregate fees incurred for Ernst & Young LLP services for the years ended December 31, 2021 and 2020:

Armata Pharmaceuticals, Inc.

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All Other Fees

AmpliPhi Biosciences Corporation

Audit Related Fees

All Other Fees

C3J Therapeutics, Inc.

Audit Related Fees

All Other Fees

Representatives of Ernst & Young LLP attended all of the meetings of the Audit Committee occurring during the years ended December 31, 2021 and 2020.

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

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 February 11, 2022)

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 ).

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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).

Employment Agreement, dated August 1, 2021, between Armata Pharmaceuticals, Inc.

and Brian Varnum, Ph.D.

(incorporated herein by reference to Exhibit 10.22 to the Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2021) .

Amended Employment Agreement, dated August 9, 2021 between Armata Pharmaceuticals, Inc.

and Todd Patrick (incorporated herein by reference to Exhibit 10.23 to the Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2021)

Securities Purchase Agreement, dated October 29, 2021, by and among the Company, Innoviva, and CFF (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 29, 2021) .

Registration Rights Agreement, dated October 29, 2021, by and among the Company, Innoviva, and CFF (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on October 29, 2021) .

Amended and Restated Voting Agreement, dated October 29, 2021, by and among the Company, Innoviva, and Innoviva, Inc.

(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on October 29, 2021) .

Lease Agreement, dated October 28, 2021, by and between the Company and 5005 McConnell Avenue, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 2, 2021 ).

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).

Securities Purchase Agreement, dated February 9, 2022, by and among the Company and Innoviva (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 11, 2022) .

Amended and Restated Investor Rights Agreement, dated February 9, 2022, by and among the Company and Innoviva (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 11, 2022) .

Registration Rights Agreement, dated February 9, 2022, by and among 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 February 11, 2022) .

Second Amended and Restated Voting Agreement, dated February 9, 2022, by and among the Company and Innoviva (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on February 11, 2022) .

Letter from PricewaterhouseCoopers LLP to the U.S.

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Section 1350.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ Indicates management contract or compensatory plan or arrangement.

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March 17, 2022

Todd R Patrick.

/s/ Brian Varnum

Chief Executive Officer

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SIGNATURES AND POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Todd R.

Patrick, and Steve R.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian Varnum, and Steve R.

Martin, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and all documents in connection therewith, with the U.S.

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Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Brian Varnum

Chief Executive Officer and Director

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(Principal Financial and Accounting Officer)

/s/ Richard J.

Bastiani, Ph.D.

/s/ Jules Haimovitz

Chairman of the Board of Directors

March 17, 2022

Bastiani, Ph.D.

Jules Haimovitz

/s/ Odysseas D.

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March 17, 2022

/s/ Todd Patrick

March 17, 2022

Peterson, Ph.D.

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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