Actinium Pharmaceuticals, Inc. 10-Q

ITEM 5. OTHER INFORMATION. Warrant Modification On August 11, 2020, the Company entered into an amendment to its warrant (the “ Amendment”) to purchase an aggregate of 1,907 shares of common stock at an exercise price of $15.61515 per share issued to Sandesh Seth, the Company’s Chairman and Chief Executive Officer, on March 14, 2017 (the “Warrants”). The Amendment modified Section 10 of the Warrant, removing the anti-dilution provision thereto. Accordingly, pursuant to the Amendment, the exercise price of the Warrant will no longer be subject to a proportional adjustment if and when the Company issues any shares of its common stock for a consideration less than the exercise price of the Warrant. The Amendment is effective as of August 11, 2020. All other terms of the Warrant remained the same. Employment Agreements Employment Agreement with Sandesh Seth On August 12, 2020, the Company and Sandesh Seth, the Company’s Chairman and Chief Executive Officer, entered into an employment agreement, which replaces that certain Employment Agreement, dated as of August 8, 2018, between the Company and Mr. Seth. Pursuant to the employment agreement, Mr. Seth will serve as Chairman and Chief Executive Officer until February 24, 2020, unless terminated earlier as set forth in the employment agreement. Under the terms of the employment agreement, Mr. Seth will be entitled to (i) a base salary, which will be determined by the Board and adjusted to be competitively aligned to a range between the 25 th and 75 th percentile of the relevant market data of chief executive officer positions of similarly situated publicly companies, (ii) a performance bonus with a target of 50% of his annual base salary as well as other multipliers as determined by the Board and (iii) options to purchase shares of common stock of the Company as the Board may grant. When and if granted, the options will have an exercise price equal to the closing price of the Company’s common stock on the date of the approval, and 2% of the grant will vest each month from the grant date until fully vested, in accordance with the Company’s Amended and Restated 2013 Stock Plan and 2019 Stock Plan. The options will expire 10 years from the grant date, subject to Mr. Seth’s continuing service with the Company. Mr. Seth will also receive the standard benefits available to other similarly situated employees. If Mr. Seth’s employment as Chief Executive Officer or Chairman are terminated due to death or disability, Mr. Seth will be entitled to earned, but unpaid, salary, benefits and the Pro-Rated Bonus (as defined herein) for the year of termination. Upon termination of his employment for Cause (as defined in the employment agreement), or his resignation without Good Reason (as defined in the employment agreement), Mr. Seth will receive any accrued and unpaid base salary, the Pro-Rated Bonus and benefits through the date of termination. 54 If the Company terminates Mr. Seth’s employment without Cause, or if Mr. Seth resigns for Good Reason, Mr. Seth will be entitled to (i) a single lump sum payment equal to the 24 months of his compensation, (ii) continued health benefits for 24 months, (iii) immediate vesting of all outstanding equity awards granted to Mr. Seth, and (iv) a single lump sum payment equal to his annual bonus subject to the achievement of the applicable goals, pro-rated based on the number of days in the Company’s fiscal year through the date of termination (the “Pro-Rated Bonus”). In addition, if the Company terminates Mr. Seth’s employment without Cause or if Mr. Seth resigns for Good Reason, or if the Company fails to renew his position as Chief Executive Officer and Chairman on February 21, 2024, in any case, within the 12-month period beginning on the date of a Change in Control (as defined in the Company’s Amended and Restated 2013 Stock Plan and 2019 Stock Plan), Mr. Seth will be entitled to (i) a single lump sum payment equal to 30 months of his compensation, (ii) continued health benefits for 30 months, (iii) immediate vesting of all outstanding equity awards granted to Mr. Seth. A copy of the employment agreement is filed herewith as Exhibit 10.3 and is incorporated hereby reference. The above description is only a summary of the terms of the employment agreement and does not purport to be complete description of such document and are qualified in their entirety by reference to the employment agreement. Employment Agreement with Steve O’Loughlin On August 12, 2020, the Company and Steve O’Loughlin, the Company’s Chief Financial Officer, entered into an employment agreement, pursuant to which Mr. O’Loughlin will serve as Chief Financial Officer of the Company. Under the terms of the employment agreement, Mr. O’Loughlin will be entitled to (i) a base salary, which shall be determined by the Board, (ii) a performance bonus, which may be up to 30% of the annual base salary based upon the achievement of certain objectives such as the Board shall determine and (iii) options to purchase shares of common stock of the Company as the Board may grant. When and if granted, the options will have an exercise price equal to the closing price of the Company’s common stock on the date of the approval, and 2% of the grant will vest each month from the grant date until fully vested, in accordance with the Company’s Amended and Restated 2013 Stock Plan and 2019 Stock Plan. The options will expire 10 years from the grant date, subject to Mr. O’Loughlin’s continuing service with the Company. Mr. Loughlin will also receive the standard benefits available to other similarly situated employees. In addition, if the Company terminates Mr. O’Loughlin’s employment without Cause (as defined in the employment agreement) or if Mr. O’Loughlin resigns for Good Reason (as defined in the employment agreement), in either case, within the 12-month period beginning on the date of a Change in Control, Mr. O’Loughlin will be entitled to (i) a single lump sum payment equal to his annual base salary, (ii) continued health benefits for 12 months, (iii) immediate vesting of all outstanding equity awards granted to Mr. O’Loughlin. A copy of the employment agreement is filed herewith as Exhibit 10.2 and is incorporated hereby reference. The above description is only a summary of the terms of the employment agreement and does not purport to be complete description of such document and are qualified in their entirety by reference to the employment agreement. Employment Agreement with Dale Ludwig On August 12, 2020, the Company and Dale Ludwig, the Company’s Chief Scientific and Technology Officer, entered into an employment agreement, pursuant to which Dr. Ludwig will serve as Chief Scientific and Technology Officer of the Company. Under the terms of the employment agreement, Dr. Ludwig will be entitled to (i) a base salary, which shall be determined by the Board, (ii) a performance bonus, which may be up to 30% of the annual base salary based upon the achievement of certain objectives such as the Board shall determine and (iii) options to purchase shares of common stock of the Company as the Board may grant. When and if granted, the options will have an exercise price equal to the closing price of the Company’s common stock on the date of the approval, and 2% of the grant will vest each month from the grant date until fully vested, in accordance with the Company’s Amended and Restated 2013 Stock Plan and 2019 Stock Plan. The options will expire 10 years from the grant date, subject to Mr. Ludwig’s continuing service with the Company. Dr. Ludwig will also receive the standard benefits available to other similarly situated employees. 55 In addition, if the Company terminates Dr. Ludwig’s employment without Cause (as defined in the employment agreement) within the 12-month period beginning on the date of a Change in Control, Dr. Ludwig will be entitled to (i) a single lump sum payment equal to his annual base salary, (ii) continued health benefits for 12 months, (iii) immediate vesting of all outstanding equity awards granted to Mr. Ludwig. A copy of the employment agreement is filed herewith as Exhibit 10.3 and is incorporated hereby reference. The above description is only a summary of the terms of the employment agreement and does not purport to be complete description of such document and are qualified in their entirety by reference to the employment agreement. Employment Agreement with Mark Berger On August 12, 2020, the Company and Mark Berger, the Company’s Chief Medical Officer, entered into an employment agreement, pursuant to which Dr. Berger will serve as Chief Medical Officer of the Company. Under the terms of the employment agreement, Dr. Berger will be entitled to (i) a base salary, which shall be determined by the Board, (ii) a performance bonus, which may be up to 30% of the annual base salary based upon the achievement of certain objectives such as the Board shall determine and (iii) options to purchase shares of common stock of the Company as the Board may grant. When and if granted, the options will have an exercise price equal to the closing price of the Company’s common stock on the date of the approval, and 2% of the grant will vest each month from the grant date until fully vested, in accordance with the Company’s Amended and Restated 2013 Stock Plan and 2019 Stock Plan. The options will expire 10 years from the grant date, subject to Dr. Berger’s continuing service with the Company. Mr. Berger will also receive the standard benefits available to other similarly situated employees. In addition, if the Company terminates Dr. Berger’s employment without Cause (as defined in the employment agreement) within the 12-month period beginning on the date of a Change in Control, Dr. Berger will be entitled to (i) a single lump sum payment equal to his annual base salary, (ii) continued health benefits for 12 months, (iii) immediate vesting of all outstanding equity awards granted to Dr. Berger. A copy of the employment agreement is filed herewith as Exhibit 10.4 and is incorporated hereby reference. The above description is only a summary of the terms of the employment agreement and does not purport to be complete description of such document and are qualified in their entirety by reference to the employment agreement. 56 ITEM 6. EXHIBITS Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K. Exhibit No. Title of Document Location 3.1 Certificate of Incorporation of Actinium Pharmaceuticals, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the SEC on April 17, 2013). 3.2 Certificate of Amendment to Certificate of Incorporation filed January 7, 2014 (incorporated by reference to Exhibit 3.5 to Form S-1 filed on January 31, 2014). 3.3 Certificate of Amendment to Certificate of Incorporation filed February 3, 2014. (incorporated by reference to Exhibit 3.1 to Form 8-K filed on February 7, 2014). 3.4 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on March 4, 2015). 3.5 Certificate of Amendment to Certificate of Incorporation, as amended, filed on February 26, 2018 (incorporated by reference to Exhibit 3.1 to Form 8-K filed on February 26, 2018). 3.6 Certificate of Amendment to Certificate of Incorporation, as amended, filed on March 6, 2019 (incorporated by reference to Exhibit 3.7 to Form 10-K filed on March 15, 2019). 3.7 Certificate of Amendment to Certificate of Incorporation, as amended, filed on June 16, 2020 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 16, 2020). 3.8 Amended and Restated Bylaws, dated August 8, 2018 (incorporated by reference to Exhibit 3.1 to Form 10-Q filed on August 9, 2018). 3.9 Amendment to the Amended and Restated Bylaws, dated May 7, 2020 (incorporated by reference to Exhibit 3.1 to Form 8-K filed on May 5, 2020). 4.1 Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed on April 24, 2020). 4.2 Form of Pre-Funded Common Stock Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 18, 2020). 10.1 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 18, 2020). 10.2 Amendment to Warrant to Purchase Common Stock of Actinium Pharmaceuticals, Inc., dated March 14, 2017, issued to Sandesh Seth . Attached 10.3** Employment Agreement, dated August 12, 2020, by and between Actinium Pharmaceuticals, Inc. and Sandesh Seth. Attached 10.4** Employment Agreement, dated August 12, 2020, by and between Actinium Pharmaceuticals, Inc. and Steve O’Loughlin. Attached 10.5** Employment Agreement, dated August 12, 2020, by and between Actinium Pharmaceuticals, Inc. and Dale Ludwig. Attached 10.6** Employment Agreement, dated August 12, 2020, by and between Actinium Pharmaceuticals, Inc. and Mark Berger. Attached 57 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Attached 31.2 Certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Attached 32.1 Certification of the Chief Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* Attached 32.2 Certification of the Principal Financial and Accounting Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* Attached 101.INS XBRL Instance Document Attached 101.SCH XBRL Taxonomy Extension Schema Document Attached 101.CAL XBRL Taxonomy Calculation Linkbase Document Attached 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Attached 101.LAB XBRL Taxonomy Label Linkbase Document Attached 101.PRE XBRL Taxonomy Presentation Linkbase Document Attached * The Exhibit attached to this Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. ** Indicates a management contract or compensatory plan. 58 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ACTINIUM PHARMACEUTICALS, INC. Date: August 14, 2020 By: /s/ Sandesh Seth Sandesh Seth Chairman and Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer) By: /s/ Steve O’Loughlin Steve O’Loughlin Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) 59