PALISADE BIO, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer, concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of December 31, 2020 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Inherent Limitations Over Internal Controls The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate. 51 Management’s Annual Report on Internal Control Over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2020 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. Changes in Internal Control Over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2020, which were identified in connection with management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION None PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The names of our directors and executive officers and their ages, positions, and biographies as of March 1, 2021 are set forth below. Our executive officers are appointed by and serve at the discretion of the Board. There are no family relationships among any of our directors or executive officers. Name Position Age Position Since Named Executive Officers Kenneth Carter (1) Executive Chairman 61 2019 Dane Saglio (1) (3) Chief Financial Officer 63 2020 Matthew Kalnik, PhD (1) Chief Operating Officer, President 58 2020 Independent Directors Cristina Csimma, PharmD., MHP (2) Director 62 2017 David J. Mazzo, PhD Director 64 2019 Binxian Wei (2) Director (Series A Preferred) 51 2019 Mary Ann Gray, PhD (2) Director 68 2019 (1) On March 17, 2021, Drs. Carter and Kalnik and Mr. Saglio entered into separation agreements where they were terminated by the Company “without cause” as defined in their respective employment agreements. (2) Pursuant to the Company’s anticipated merger transaction with Leading BioSciences, Inc., upon the effectiveness of the merger, Drs. Csimma and Gray, and Mr. Wei will continue to serve as directors of the combined company. (3) Pursuant to a consulting agreement entered into between Mr. Saglio and the Company, Mr. Saglio will act as principal executive and accounting officer until the consummation of the anticipated merger or until such agreement is terminated. Kenneth Carter PhD , has served as our executive chairman since January 2019. Dr. Carter has over 20 years of experience working in positions of substantial responsibility in the development and operations of early-stage biotechnology companies. Since 2010 when he co-founded the company, Dr. Carter has served as chairman of the board of directors of Noble Life Sciences, a private biotechnology company in Maryland. From 2011 through 2017, Dr. Carter served as president and chief executive officer of NexImmune, Inc., a private biopharmaceutical company in Maryland. He continues to serve as senior advisor of NexImmune. Prior to that, from 1999 through 2009, Dr. Carter served as president and chief executive officer of Avalon Pharmaceuticals, Inc. (NASDAQ: AVRX) until the company merged with Clinical Data, Inc. Dr. Carter also currently serves on the following boards of directors (i) since 2016, Antidote Therapeutics, Inc., a private biopharmaceutical company in Maryland, (ii) since 2011, BetaCat Pharmaceuticals, a private pharmaceutical company in Texas, and Maryland BioHealth Innovation, a biotechnology intermediary company in Maryland, and (iii) since 2007, Maryland Health Care Product Development Corporation, a biotechnology investment firm in Maryland. Dr. Carter additionally serves as a lecturer and Adjunct Faculty member of Johns Hopkins University in Maryland. Dr. Carter holds a BS in Biology and Chemistry from Abilene Christian University, a Ph.D. in Human Genetics and Cell Biology from the University of Texas Medical Branch, and a Postdoctoral degree in Cell and Molecular Biology from University of Massachusetts Medical School. In evaluating Dr. Carter’s specific experience, qualifications, attributes and skills in connection with his appointment to our board, we took into account his prior work with both public and private organizations, including his experience in building biopharmaceutical organizations, his strong business development background and his past experience and relationships in the biopharma and biotech fields. 52 Matthew Kalnik, PhD , has served as our President and Chief Operating Officer in April 2020. Dr. Kalnik has over 25 years of experience in senior R&D and business development roles leading multi-disciplinary teams in drug discovery and drug development. From 2013 through present, Dr. Kalnik has served as the Chairman and Chief Executive Officer of Antidote Therapeutics, a private biotechnology company. From 1997 through present, Dr. Kalnik has consulted for biotechnology / pharmaceutical companies related to portfolio analysis, licensing and M&A transactions. Prior to that, from 2009 through 2012, Dr. Kalnik served as Senior Vice President and Officer, Strategic Planning & Business Operations of Nabi Biopharmaceuticals, Inc. (NASDAQ: BOTA) a publicly traded biopharmaceutical company. Dr. Kalnik has also held leadership roles at Daiichi Medical Research (now Daiichi-Sankyo)c, Genaissance Pharmaceuticals, Inc. (now Allergan), Pfizer, Inc.and Biosym Technologies, Inc. (now Dassault Systèmes). He holds a Ph.D. in Biochemistry & Molecular Biophysics from Columbia University and conducted his post-doctoral fellowship at the Department of Molecular Biology at The Scripps Research Institute, La Jolla, CA. Dane Saglio , has served as our Chief Financial Officer since April 2020. From July 2017 through July 2019, Mr. Saglio served as Executive Vice President and CFO of Celios Corporation, a private company focused on research, development, and commercialization of advanced air technologies. Prior to that, from November 2014 through June 2017, Mr. Saglio served as the CFO for Helomics Corporation (acquired in 2019 by Precision Therapeutics). Mr. Saglio has over 20 years of experience in financial positions with pharmaceutical and biotechnology companies. Mr. Saglio earned his BS in business administration from the University of Maryland and is a licensed CPA (inactive). Cristina Csimma PharmD, MHP , has served on our board of directors since September 2017. She also serves on the Board of Directors of Idera Pharmaceuticals (NASDAQ: IDRA), a clinical stage biopharmaceutical company, Caraway Therapeutics, a preclinical stage biopharmaceutical company, and T1D Exchange, a nonprofit research organization for type 1 diabetes. She also serves on various advisory boards, including: the Muscular Dystrophy Association Venture Philanthropy Scientific Advisory Committee; the Executive Oversight Board to the National Institutes of Health (NIH) NeuroNext Network; the Harvard and Brigham and Women’s Hospital MRCT Center External Advisory Board, and the TREAT-NMD Advisory Committee for Therapeutics (TACT) She was previously the Executive Chair of the Board of Directors of Exonics Therapeutics, a Director of Juniper Pharmaceuticals (acquired in August 2018 by Catalent), Vtesse (acquired in March 2017 by Sucampo Pharmaceuticals) and Cydan, where she was also President and founding CEO, the Vice President of Drug Development at Virdante Pharmaceuticals Inc (acquired by Momenta), Principal at Clarus Ventures LLC, and held roles in Clinical Development and Translational Research at Wyeth (now Pfizer), Genetics Institute and Dana Farber Cancer Institute. Dr. Csimma holds both a Doctor of Pharmacy and a Bachelor of Science in Pharmacy from the Massachusetts College of Pharmacy and Allied Health Sciences, as well as a Master of Health Professions from Northeastern University. In selecting Dr. Csimma, the board took into account her vast experience in the pharmaceutical industry, including her successes in developing drugs for various diseases throughout her career. Binxian Wei , has served on our board of directors since February 2019. He has been the V.P. of Darsheng Trade & Tech. Development Co, Ltd. (a subsidiary to Tianjin Tiayo Pharmaceutical Co., Ltd.) since 2015. He is responsible for API and finished dosage marketing for Chinese pharmaceutical companies. From 2008 through 2010, he worked as a business development manager for Sakai Trading. He holds a Master’s Degree in Mathematical & Computer Sciences from Colorado School of Mines, a Master’s Degree and Bachelor’s Degree in Chemical Engineering from Tianjin University in China. Bin-Xian Wei was appointed as the director representative of the Series A 4.5% Convertible Preferred Stock by Tianjin Pharmaceuticals Group International Holdings Co., LTD, the sole holder of the outstanding Series A 4.5% Convertible Preferred Stock. David J. Mazzo , PhD , has served on our board of directors since June 2019. Dr. Mazzo brings over 35 years of experience in the pharmaceutical industry. Dr. Mazzo currently serves as President and Chief Executive Officer and a Director of Caladrius Biosciences (NASDAQ: CLBS), a late-stage therapeutics development biopharmaceutical company developing autologous cell therapies for select cardiovascular and autoimmune diseases. Dr. Mazzo also serves as the chairman of the Board of Directors of Visioneering Technology, Inc. (ASX: VTI), a medical device company with a focus on products for treating and preventing the progression pediatric myopia and presbyopia. Previously, Dr. Mazzo served from August 2008 to October 2014 as Chief Executive Officer and as a member of the Board of Directors of Regado Biosciences, Inc., (NASDAQ: RGDO) a pharmaceutical company focused on the development of novel antithrombotic drug systems for acute and sub-acute cardiovascular indications. Prior to his leading Regado, from March 2007 to April 2008, Dr. Mazzo was President, Chief Executive Officer and a Director of Æterna Zentaris, Inc., (NASDAQ: AEZS), an international biopharmaceutical company. From 2003 until 2007, Dr. Mazzo served as President, Chief Executive Officer and a director of Chugai Pharma USA, LLC, a biopharmaceutical company which was the U.S. subsidiary of Chugai Pharmaceutical Co., Ltd. of Japan and a member of the Roche Group (Switzerland). Prior to joining Chugai, Dr. Mazzo held executive positions at several large international pharmaceutical companies, including: Schering-Plough Corporation, a publicly held pharmaceutical company that was subsequently acquired by Merck & Co., Inc. where he was also a Director of the Essex Chimie European subsidiary; Hoechst Marion Roussel, Inc., the US subsidiary of Hoechst AG, which was subsequently acquired by Sanofi, a multinational pharmaceuticals company; and Rhone-Poulenc Rorer, Inc., a subsidiary of Rhone-Poulenc SA, a French pharmaceuticals company, which was subsequently acquired by Hoechst AG. From October 2005 through January 2015, he also served on the board of directors of Avanir Pharmaceuticals, a biopharmaceutical company which was sold to Otsuka Holdings in 2015. From August 2005 to June 2005, he served as a Director of EyePoint Pharmaceuticals (formerly known as pSivida, Inc. (NASDAQ: EYPT). Dr. Mazzo earned a B.A. in the Honors Program (Interdisciplinary Humanities) and a B.S. in Chemistry from Villanova University. In addition, Dr. Mazzo received his M.S. in chemistry and his Ph.D. degree in analytical chemistry from the University of Massachusetts, Amherst. He was also a research fellow at the Ecole Polytechnique Federale de Lausanne, Switzerland. In selecting Dr. Mazzo, the board took into account his vast experience in the pharmaceutical industry, as well as his service on other boards of directors in the biopharmaceutical industry. 53 Mary Ann Gray, PhD, has served on our board of directors since July 2019. From 2018 to current, Dr. Gray has served on the board of directors of Sarepta Therapeutics, Inc. From 2010 to 2018, Dr. Gray served as a member of the Board of Senomyx Inc., a biotechnology company working toward developing additives to amplify certain flavors and smells in foods. She served as a member of the compensation committee of Senomyx from May 2011 to November 2018, as the Chair of the Board and a member of the audit committee from May 2016 to November 2018, and as Lead Director from May 2017 to November 2018. Dr. Gray also served as a member of the Board and audit committee Chair of Juniper Pharmaceuticals, a women’s health company, from April 2016 to August 2018. From November 2014 to December 2016, she served as a Board member of TetraLogic, a publicly-held clinical-stage biopharmaceutical company focused on oncology and infectious diseases. She served as the Chair of the audit committee of Tetralogic from March 2015 to December 2016. Dr. Gray also served as a Board member of Acadia Pharmaceuticals, focused on commercialization of CNS therapies, from 2005 to 2016, and served as a member of the audit committee from 2005 to 2016 and as a member of the compensation committee from 2010 to 2016. She served as a Board member of Dyax Corp., a rare disease company acquired by Shire in 2016, from 2001 to 2016, serving as a Lead Director from 2008 to 2016, a member of the audit committee from 2004 to 2012, a member of the nominating and corporate governance committee from 2001 to 2016, and Chair of the compensation committee from 2012 to 2016. Dr. Gray is the President of Gray Strategic Advisors, LLC, a biotechnology strategic planning and advisory firm. Dr. Gray has a distinguished scientific background, completing pharmacology research in tumor biology, including the impact of therapeutics on cardiac membranes and beginning her career in biotechnology as a scientist focused on new drug development. She subsequently worked in equities research before becoming a senior analyst and portfolio manager. Dr. Gray earned a B.S. from University of South Carolina, a Ph.D. in pharmacology from the University of Vermont, and completed her post-doctoral work at Northwestern University Medical School and at the Yale University School of Medicine. Our nominating and corporate governance committee believes that Dr. Gray’s extensive experience in the biotechnology and biopharmaceutical industry qualifies her for service as a member of our Board. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires our officers, directors, and stockholders owning more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC and to furnish us with copies of such reports. Based solely on our review of Form 3, 4 and 5’s, the following table provides information regarding any of the reports which were filed late during the fiscal year ended December 31, 2020: Name of Reporting Person Type of Report and Number Filed Late No. of Transactions Reported Late Matthew Kalnik Form 4 1 (1) Dane Saglio Form 4 1 (1) (1) Transaction not reported as of the date hereof Corporate Governance Guidelines and Code of Ethics We have adopted Corporate Governance Guidelines that are intended to ensure that our Board has the necessary authority and practices in place to review and evaluate our business operations and to make decisions that are independent of management. The Corporate Governance Guidelines are intended to align the interests of directors and management with those of our shareholders and establish practices for the Board with regard to its oversight of the Company. Under our guidelines, the Board conducts a self-evaluation to assess adherence to the Corporate Governance Guidelines and identify opportunities to improve Board performance. A copy of our codes can be viewed on our website at www.senecabio.com under “Governance Documents” in the “Corporate Governance” section under the “Investors” tab. In addition to our Corporate Governance Guidelines, we have adopted several guidelines intended to promote the honest and ethical conduct of our officers, directors, employees and consultants. They include, our "Code of Ethics” that applies to our officer, directors and employees and our “Finance Code of Professional Conduct” that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and any persons who participate in our financial reporting process. A copy of our codes can be viewed on our website at www.senecabio.com under “Governance Documents” in the “Corporate Governance” section under the “Investors” tab. 54 The codes incorporate our guidelines designed to deter wrongdoing and to promote honest and ethical conduct and compliance with applicable laws and regulations. The codes also incorporate our expectations of our officers, directors and employees that enable us to provide accurate and timely disclosure in our filings with the SEC and other public communications. In addition, the codes incorporate guidelines pertaining to topics such as complying with applicable laws, rules, and regulations; reporting violations; and maintaining accountability for adherence to the codes. We intend to disclose future amendments to certain provisions of our codes, or waivers of such provisions on our web site within four business days following the date of such amendment or waiver. Board of Directors Our Board consists of five (5) members. Our business, property and affairs are managed under the direction of the Board. Members of the Board are kept informed of our business through discussions with the Executive Chairman and other members of management, by reviewing materials provided to them and by participating in meetings of the Board and its committees. Our Board is responsible for establishing broad corporate policies and for overseeing our overall management. In addition to considering various matters which require its approval, the Board provides advice and counsel to, and ultimately monitors the performance of, our senior management. Classification of Board Pursuant to our bylaws, we have a classified Board which is divided into three classes with staggered three-year terms. Only one class may be elected each year, while the directors in the other classes continue to hold office for the remainder of their three-year terms. The Board may, on its own, determine the size of the exact number of directors on the Board and may fill vacancies on the Board. Notwithstanding, the holder of our Series A 4.5% Convertible Preferred Stock has the right to appoint one board member. Binxian Wei has been appointed and currently serves as such director since February 5, 2019. The procedure for electing and removing directors on a classified board of directors generally makes it more difficult for stockholders to change management control by replacing a majority of the board at any one time, and the classified board structure may discourage a third party tender offer or other attempt to gain control of the Company and may maintain the incumbency of directors. In addition, under our bylaws, directors may only be removed from office by a vote of the majority of the shares then outstanding and eligible to vote. Independent Directors Our common stock is listed on the Nasdaq Capital Market. As such, we are subject to the NASDAQ Stock Market LLC (“NASDAQ”) director independence standards. In accordance with these standards, in determining independence the Board affirmatively determines whether a director has a "material relationship" with Seneca Biopharma that would compromise his or her independence from management or would cause him or her to fail to meet the NASDAQ’s specific independence criteria. When assessing the "materiality" of a director's relationship with Seneca Biopharma the Board considers all relevant facts and circumstances, not merely from the director's standpoint, but from that of the persons or organizations with which the director has an affiliation, and, where applicable, the frequency and regularity of the services, and whether the services are being carried out at arm's length in the ordinary course of business. Material relationships can include commercial, consulting, charitable, familial and other relationships. A relationship is not material if, in the Board's judgment, it is not inconsistent with the NASDAQ’S director independence standards and it does not compromise a director's independence from management. Applying the NASDAQ’s standards, the Board has determined that Mr. Wei and Drs. Mazzo, Gray, and Csimma are each “independent” as that term is defined by the NASDAQ’s standards. Communications with Directors We have adopted a formal process for shareholder communications with our independent directors. The policy, is available on our website, www.senecabio.com in the “Governance Documents” section in the “Corporate Governance” section under the “Investors” tab. The Document is named “Board Contact.” Individuals wanting to communicate with our directors are invited to communicate with the non-management members of the Board by sending correspondence to the non-management members of the Board of Directors, c/o Corporate Secretary, Seneca Biopharma, Inc., 20271 Goldenrod Lane, Suite 2024, Germantown, MD 20876. The Corporate Secretary will review all such correspondence and forward to the non-management members of the Board a summary of all such correspondence received during the prior month and copies of all such correspondence that deals with the functions of the Board or committees thereof or that otherwise is determined to require attention of the non-management directors. Non-management directors may at any time review the log of all correspondence received by us that are addressed to the non-management members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters will immediately be brought to the attention of the Chairman of the Audit Committee. 55 Stock Ownership Guidelines On November 10, 2016, we adopted stock ownership guidelines for our Chief Executive Officer, Chief Scientific Officer and named executive officers. Under the guidelines, our CEO and CSO are expected to own shares of our common stock that have a value equal to 2x their respective annual salaries. All other named executive officers or Section 16 filing employees are expected to own shares of our common stock that have a value equal to 1x their respective annual salaries. Shares may be owned directly by the individual or owned jointly with or separately by the individual’s spouse, or held in trust for the benefit of the individual, the individual’s spouse or children. Share ownership requirements must be met within five years after first becoming subject to the guidelines. Committees We have established three (3) corporate governance committees comprised of the: (i) Audit Committee; (ii) Compensation Committee; and (iii) Governance and Nominating Committee. The committee membership and the function of each of the committees are described below. Each committee is governed by written committee charters. We periodically review such charters and may amend or update the process and procedures contained therein. In the event of such amendment or update, we will promptly post our revised charter on our website. In addition to our established committee, we may from time to time establish special committees as the Board deems necessary. A copy of each respective committee’s charter can be viewed on our website at www.senecabio.com under “Corporate Governance” under the “Investors” tab. The table below identifies the Board’s standing committees and committee membership as of February 28, 2021: Director Independent Audit Committee Governance and Nominating Committee Compensation Committee David J. Mazzo, PhD Yes Member --- Chair Cristina Csimma, PharmD, MHP Yes Member Chair Member Mary Ann Gray, PhD Yes Chair Member --- Each member of the Audit Committee, the Compensation Committee and the Governing and Nominating Committee is considered independent under Nasdaq listing criteria. Audit Committee We have a designated audit committee in accordance with section 3(a)(58)(A) of the Exchange Act. Currently, we have three members of the Audit Committee, Drs. Gray, Csimma, and Mazzo. The main function of our Audit Committee is to oversee our accounting and financial reporting processes. The Audit Committee assists the Board in fulfilling its oversight and monitoring responsibility of reviewing the financial information provided to shareholders and others, appoints Seneca Biopharma’s independent registered public accounting firm, reviews the services performed by the independent registered public accounting firm and Seneca Biopharma’s finance department, evaluates Seneca Biopharma’s accounting policies and the system of internal controls established by management and the Board, reviews significant financial transactions, and oversees enterprise risk management. The Board has determined that Dr. Gray is an “audit committee financial expert” within the meaning of SEC rules. An audit committee financial expert is a person who can demonstrate the following attributes: (1) an understanding of generally accepted accounting principles and financial statements; (2) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (3) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (4) an understanding of internal controls and procedures for financial reporting; and (5) an understanding of audit committee functions. Governance and Nominating Committee Our Governance and Nominating Committee’s purpose is to assist our board of directors in identifying individuals qualified to become members of our Board consistent with criteria set by our Board, to oversee the evaluation of the board of directors and management, and to develop and update our corporate governance principles. Drs. Csimma and Gray are the members of the Governance and Nominating Committee. 56 The Governance and Nominating Committee evaluates candidates for the Board. Candidates may come to the attention of the Governance and Nominating Committee through current Board members, professional search firms, stockholders or other persons. The Governance and Nominating Committee will consider nominees recommended by our stockholders. Compensation Committee The Compensation Committee reviews and approves the compensation arrangements for Seneca Biopharma’s executive officers, including the Executive Chairman, administers our equity compensation plans, and reviews the Board’s compensation. Drs. Mazzo and Csimma are members of the Compensation Committee. Leadership Structure The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the Board. At present, the positions of Chairman and Chief Executive Officer are held by the same individual. Based on our Executive Chairman’s knowledge of the Company, its business and its industry, the Board believes this structure is currently in the best interest of the Company and its shareholders. Risk Oversight The Company has a risk management program overseen by our Principal Executive Officer. Material risks are identified and prioritized by management, and each prioritized risk is referred to a Board Committee or the full Board for oversight. For example, strategic risks are referred to the full Board while financial risks are referred to the Audit Committees. The Board regularly reviews information regarding the Company's liquidity and operations, as well as the risks associated with each, and annually reviews the Company's risks as a whole. Also, the Compensation Committee periodically reviews the most important risks to the Company to ensure that compensation programs do not encourage excessive risk-taking. The Company currently does not have a lead independent director as it has currently determined one to not be necessary given the Company’s size. The Company’s lead independent director has the following responsibilities: · Advising the executive chairman of the Board as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to perform their duties effectively and responsibly. · Confirming the agenda with the Chief Executive Officer for meetings of the Board. · Coordinating and moderating executive sessions of the Board’s independent directors. · Acting as the principal liaison between the independent directors and the executive chairman of the Board on sensitive issues. · Performing such other duties as the Board may from time to time delegate in order to assist the Board in the fulfillment of its responsibilities. ITEM 11. EXECUTIVE COMPENSATION Our non-executive director and executive compensation programs impact all of our employees by establishing a general framework for compensation and creating a work environment focused on expectations, goals, and rewards. Because the performance of every employee is important to the overall success of the Company, our Board is mindful of the impact that our compensation programs have on all of our employees. In considering our compensation policies and practices, our Board balances the needs to conserve cash and minimize stockholder dilution against the requirements to attract, retain, and motivate our non-executive directors, executives and other employees while fostering an innovative and entrepreneurial corporate culture. Our Board strives to act in the long-term best interests of the Company and its stockholders, as well as ensure that the components of compensation do not, individually or in the aggregate, encourage excessive risk-taking. Compensation-Setting Process Role of the Board, Compensation Committee and Management 57 The Compensation Committee is responsible for overseeing, determining, recommending and approving the compensation of our non-executive directors, CEO and other executives, including the other Named Executive Officers. From time to time during the year, the Compensation Committee will review the compensation of our non-executive directors, CEO and other executives, determine whether to make any adjustments to their respective compensation. With regard to our executive officers, the Compensation Committee reviews base salaries, determine whether an annual incentive award was earned for the last completed fiscal year based on its assessment of the Company and individual performance for that period and, if so, the amount of any such bonuses, and determine whether to make equity awards based on Company and individual performance. As described below, the Compensation Committee gives considerable weight to our CEO’s performance evaluation of the other executives because of his direct knowledge of each executive’s performance and contributions. The Compensation Committee conducts an annual review of our executives’ compensation and considers adjustments in executive compensation levels to ensure alignment with our compensation strategy and competitive market practices. During this process, the Compensation Committee is also mindful of the results of the shareholder’s Advisory Vote on Executive Compensation during the most recent vote and although not binding, is considered in the compensation setting process. Role of Senior Management The Compensation Committee typically seeks the input of our CEO when discussing the performance of and compensation for our other executives, including the other Named Executive Officers. In this regard, at the request of the Compensation Committee our CEO reviews the performance of the other executives, including the other Named Executive Officers, annually and presents to the Compensation Committee his conclusions and recommendations as to their compensation, including base salary adjustments, annual incentive awards, and long-term equity incentive awards. The Compensation Committee then uses these recommendations as one factor in its deliberations to determine the compensation of our executives. Role of Compensation Consultant The Compensation Committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the oversight of our non-executive director and executive compensation program and related policies and practices. For compensation related to the year ended December 31, 2020, the Compensation Committee consulted with Nancy Arnosti and Associates (“Arnosti”), a compensation consulting firm with regard to our executive compensation program. Arnosti was engaged to provide the Compensation Committee with information, recommendations, and other advice relating to these compensation programs on an ongoing basis. Arnosti was directly engaged and serves at the discretion of the Compensation Committee and provides no other services to the Company. Competitive Positioning In making compensation decisions, the Compensation Committee reviews independent survey data, as well as publicly available data from companies with which we compete for executive talent. The companies chosen for comparison may differ from one executive to the next depending on the scope and nature of the business for which the particular executive is responsible. Although the compensation data from comparable companies is useful comparative information, the Compensation Committee does not require that the compensation components of the non-executive directors or individual executives bear any particular relationship to the compensation of non-executive director or executives of similar positions of those comparable companies. In development-focused companies within the biopharmaceutical industry, many traditional measures of corporate performance, such as earnings-per-share or sales growth, may not readily apply in reviewing the performance of executives. Because of the Company’s current stage of development, the Compensation Committee evaluates other indications of performance, including progress towards the Company’s research and development programs and corporate development activities, as well as the Company’s success in securing capital sufficient to enable the Company to continue research and development activities, in its decision-making process. Say-on-Pay At our 2020 Annual Meeting of Stockholders held on August 7, 2020 and adjourned until September 4, 2020, we submitted two proposals to its stockholders regarding its executive compensation practices. The first was an advisory vote on the 2019 executive compensation awarded to our named executive officers (commonly known as a “say-on-pay” vote). At our 2020 annual meeting, excluding broker non-votes, approximately 5,721,142 shares cast votes with regard to the say-on-pay proposal. Of those, 2,960,782, or approximately 51.8%, of the shares approved the compensation of named executive officers. We believe that the outcome of its say-on-pay vote signals its stockholders’ support of our compensation approach, specifically its efforts to retain and motivate its named executive officers. In light of this stockholder support, the Compensation Committee determined not to change its approach to compensation. However, even though in 2020 stockholders demonstrated support for its compensation approach during 2019, the Compensation Committee annually reevaluates Seneca’s compensation practices to determine how they might be improved. The Compensation Committee will continue to consider the outcome of say-on-pay votes when making future compensation decisions for Seneca’s named executive officers. 58 The second proposal was a vote on the frequency of future stockholder advisory votes regarding compensation awarded to named executive officers (commonly known as a “say-when-on-pay” vote). The frequency of every one (1) year received the highest number of votes cast. Notwithstanding these results, our Board determined that Seneca would hold our next say-on-pay vote in 2021. Summary Compensation Table The following table sets forth information regarding the compensation paid to, or earned by, our named executive officers for the years ended December 31, 2020 and 2019: Name and Principal Position Year Salary Bonus Stock Awards Option Awards Nonequity Incentive Plan Compensation Non-qualified Deferred Compensation Earnings All Other Compensation Total (a) (b) ($) (c) ($) (d) ($) (e) ($) (f) (2) ($) (g) ($) (h) ($) (i) (1) ($) (j) Kenneth Carter, 2020 $ 492,500 - - 409,864 (3) - - - $ 902,364 Executive Chairman (9) 2019 $ 395,000 20,000 - 425,409 (4) - - - $ 840,409 Matthew Kalnik, PhD 2020 $ 311,250 - - 340,242 (5) - - 171,140 (6) $ 822,632 Chief Operating Officer and President (9) 2019 $ - - - - - - 358,750 (6) $ 358,750 Dane Saglio 2020 $ 281,250 - - 85,061 (7) - - 154,505 (8) $ 520,816 Chief Financial Officer (9) 2019 $ - - - - - - 84,750 (8) $ 84,750 _________________________________ (1) Includes automobile allowance, relocation allowance, perquisites and other personal benefits. (2) For additional information regarding the valuation of Option Awards, refer to Note 4 of our financial statements contained in this report. (3) Represents a stock option granted conditionally issued on April 1, 2020 that was approved by Seneca’s shareholders on September 4, 2020. The option grant was initially to purchase up to 471,000 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 864,785 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. Dr. Carter agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $188,789. If the Merger does not close, Dr. Carter will retain his option grant. (4) Includes an Inducement Award of 40,000 options issued initially and an anti-dilution true-up issuance of an additional 116,253 options per Dr. Carter’s employment agreement. The options had an exercise price of $8.50 and vest over time and based on milestones. Pursuant to Dr. Carter’s employment agreement, as amended, as a result of the approval of Dr. Carter’s option award by Seneca’s shareholders on September 4, 2020, as described in Footnote 3 above, the Inducement Option award was cancelled. (5) Represents an inducement stock option granted on April 1, 2020. The option grant was initially to purchase up to 282,840 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 518,979 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. Dr. Kalnik agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $476,663. If the Merger does not close, Dr. Kalnik will retain his option grant. (6) Represents cash compensation for professional consulting services prior to Dr. Kalnik being appointed as Chief Operating Officer and President effective April 1, 2020 along with reimbursements for certain expenses in 2020. (7) Represents an inducement stock option granted on April 1, 2020. The option grant was initially to purchase up to 70,710 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 129,745 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. Mr. Saglio agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $362,392. If the Merger does not close, Mr. Saglio will retain his option grant. (8) Represents cash compensation for professional consulting services prior to Mr. Saglio being appointed as Chief Financial Officer effective April 1, 2020 along for reimbursement of certain expenses in 2020. (9) Employees were terminated without cause on March 17, 2021. 59 Original Employment Agreement with Kenneth Carter On December 18, 2018, Dr. Kenneth Carter was appointed the executive chairman of Seneca to be effective January 1, 2019. In connection with Dr. Carter’s employment, Seneca entered into an at-will employment agreement. Pursuant to the terms of his employment agreement, he received a signing bonus of $20,000 and receives a base salary of $395,000 per year and is eligible to receive an annual cash bonus based on achievement of certain performance milestones with a target of 50% of his base salary. Dr. Carter was also issued an inducement option to purchase 40,000 shares of common stock on December 12, 2018. The inducement option has an exercise price of $8.50 per share, a term of ten (10) years, and vests as follows: (i) 10,000 options on the effective date, (ii) 5,000 options on the six (6) month anniversary of the effective date, (iii) 5,000 options vest on the two (2) year anniversary of the effective date, and (iv) the remaining 20,000 vest upon the achievement of performance-based milestones. As of December 31, 2019, 27,000 shares have vested, 4,000 have been forfeited for failure to meet the milestone vesting requirements, and 9,000 are currently unvested, subject to meeting vesting conditions. For a twelve (12) month period following the effective date, Dr. Carter’s employment agreement further calls for the adjustment in the number of shares underlying the inducement option in the event of a capital raising transaction such that Dr. Carter’s ownership percentage would remain the same prior and subsequent to such transaction. Pursuant to Seneca’s registered direct offering on July 30, 2019, Seneca issued Dr. Carter an additional 116,213 options as an adjustment. Of this issuance, 78,444 shares have vested, 11,621 have been forfeited for failure to meet the vesting requirements, and 26,148 remain unvested as of December 31, 2019. This option was cancelled pursuant to Seneca's shareholders approving the Option Grant described in Dr. Carter's Amendment to Employment Agreement described above. Dr. Carter’s employment agreement also provides for severance in the event Seneca terminates his employment without “cause” or he resigns with “good reason,” or as a result of his death or disability as each term is defined in the employment agreement or upon termination due to death or disability, Dr. carter will be entitled to (i) payment of his accrued base salary, unreimbursed expenses, unpaid but earned bonuses, and accrued and unused vacation time; (ii) the accelerated vesting of 100% of Dr. Carter’s then outstanding unvested equity awards, (iii) the continued payment of his base salary for (a) eighteen (18) months following the termination if such termination occurs within six (6) months of the effective date or if termination occurs within the eighteen (18) month period following a “sale event” or “change of control” and (b) twelve (12) months following the termination date if termination occurs after the initial six (6) month period following the effective date and (iv) payment of a pro rata portion of his target annual bonus for the year in which termination occurs. Dr. Carter will not be entitled to any continued payment of salary after the twenty-four (24) month anniversary of the effective date. Amendment to Employment Agreement with Kenneth Carter On March 26, 2020, Seneca and Dr. Kenneth Carter, its Executive Chairman, entered into an amendment (the “Amendment”) to Dr. Carter’s employment agreement with an effective date of April 1, 2020. The material terms of the Amendment that control and supersede the prior employment agreement are described herein. Dr. Carter is to be employed as Executive Chairman of Seneca and will spend substantially all of his duties, attention, skill, and efforts working for the Company. He will not receive any signing / retention bonus. Dr. Carter was reimbursed $5,000 in legal, accounting and other expenses related to the negotiation and drafting of the amendment. Pursuant to the terms of the Amendment, Dr. Carter will continue to serve as the Executive Chairman of Seneca and will receive an annual base salary of $525,000. Additionally, on the effective date, Dr. Carter received a conditional option to purchase 471,400 shares of common stock (“Option Grant”) of Seneca, subject to the receipt of shareholder approval as well as the forfeiture of all of his previously issued vested and unvested grants. The Option Grant has a term of ten (10) years from issuance, and an exercise price equal to the closing trading price of Seneca’s common stock on the effective date. The Option Grant vests (i) one quarter (1/4) on the effective date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the effective date, provided Dr. Carter remains a service provider to Seneca over such period. For a period of nine (9) months from the effective date (or until the closing of a transaction related to issuing securities that was approved during such nine (9) month period) (the “Measurement Period”), the Option Grant will be subject to adjustment to maintain the percentage ownership the Option Grant reflects on the date of grant in the event that (i) Seneca issues any common stock (including, without limitation, by virtue of exercise, conversion or exchange of any common stock equivalents that are issued and outstanding prior to the end of the Measurement Period) during the Measurement Period, or (ii) there is any exercise, conversion, or exchange of common stock equivalents that are issued and outstanding prior to the end of the Measurement Period. Upon termination by reason of death or disability (as such terms are defined in the Amendment), Dr. Carter will be entitled to receive the “Accrued Obligations”. 60 Upon termination by Seneca for “Cause” or by Dr. Carter without “Good Reason,” as such terms are described in the Amendment, Dr. Carter will only be entitled to receive the Accrued Obligations. Upon termination by Seneca without “Cause” or by Dr. Carter with “Good Reason,” Dr. Carter will be entitled to (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) twelve (12) months if termination occurs after the nine (9) month anniversary of the effective date or (b) seven (7) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, the “Severance Term”) (iii) payment of his bonus pro-rata for the time employed during the year of termination, (iv) COBRA payments for the applicable Severance Term, and (v) the continued vesting of all outstanding equity grants for the earlier of (y) the term of the equity awards or (z) the applicable Severance Term. Dr. Carter will be considered a service provider under the applicable plan in which such grants were issued until the last day of the Severance Term. Upon a termination by Seneca without “Cause” or by Dr. Carter with “Good Reason” three (3) months prior to or twelve (12) months subsequent to a Change of Control (as such term is defined in the Amendment), Dr. Carter will be entitled to (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) eighteen (18) months if termination occurs after the nine (9) month anniversary of the effective date, or (b) nine (9) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, “Change of Control Severance Term”), (iii) payment of 100% of target cash bonus for year of termination, (iv) COBRA payments for the applicable Change of Control Severance Term, and (v) the full vesting of all outstanding equity grants on the date of termination. Dr. Carter will be considered a service provider under the applicable plan in which such grants were issued until the last day of the applicable Change of Control Severance Term. Termination of Dr. Carter’s Employment Effective March 17, 2021, Dr. Carter entered into a separation agreement with the Company whereby his employment was terminated. For a description of the compensation payable to Dr. Carter, please refer to the section in this Item 11 of Part III of this Annual Report on Form 10-K entitled “Merger Related Compensation Arrangements.” Employment Agreement with Dane Saglio Effective April 1, 2020, Dane Saglio was appointed chief financial officer of Seneca. In connection with Mr. Saglio’s employment, Seneca entered into an at-will employment agreement with Mr. Saglio. Pursuant to the terms of the employment agreement, Mr. Saglio will receive a base salary of $375,000 per year and will be eligible to receive an annual target cash bonus of 40% of his base salary, based upon the achievement of certain performance goals and at the discretion of Seneca’s Compensation Committee. Mr. Saglio will also be eligible to receive an annual market-based equity grant to be issued from one of Seneca’s equity compensation plans at the discretion of the Board. In addition, as an inducement to Mr. Saglio’s employment, Seneca granted him a non-qualified inducement option to purchase up to 70,710 shares of Common Stock. The option has an exercise price of $0.6199 per share, a term of ten (10) years, and vests as follows: (i) one quarter (1/4) of the options vest on the effective date, and (ii) the remaining three-quarters (3/4) of the options will vest on a monthly basis over the thirty-six (36) month period following the effective date. The option was issued from Seneca’s Inducement Plan. For a period of nine (9) months from the effective date (or until the closing of a transaction related to the issuance of securities that was approved during such nine (9) month period) (the “Saglio Measurement Period”), the inducement option will be subject to adjustment to maintain the percentage ownership represented by the inducement option on the date of grant, in the event that (i) Seneca issues any Common Stock (including, without limitation, by virtue of exercise, conversion or exchange of any Common Stock equivalents that are issued and outstanding prior to the end of the Saglio Measurement Period) during the Saglio Measurement Period, or (ii) there is any exercise, conversion, or exchange of Common Stock equivalents that are issued and outstanding prior to the end of the Saglio Measurement Period. 61 Upon termination by reason of death or disability (as such terms are defined in the Employment Agreement), Mr. Saglio will be entitled to receive the “Accrued Obligations”. Upon termination by Seneca for “Cause” or by Mr. Saglio without “Good Reason,” as such terms are described in the employment agreement, Mr. Saglio will only be entitled to receive the Accrued Obligations. Upon termination by Seneca without “Cause” or by Mr. Saglio with “Good Reason,” (as those terms are defined in the employment agreement) Mr. Saglio will be entitled to receive (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) nine (9) months if termination occurs after the nine (9) month anniversary of the effective date or (b) five (5) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, the “Saglio Severance Term”) (iii) payment of his bonus pro-rata for the time employed during the year of termination, (iv) COBRA payments for the applicable Saglio Severance Term, and (v) the continued vesting of all outstanding equity grants for the earlier of (y) the term of the equity awards or (z) the applicable Saglio Severance Term. Mr. Saglio will be considered a service provider under the Inducement Plan or any other applicable equity compensation plan of Seneca until the last day of the Saglio Severance Term. Upon termination by Seneca without “Cause” or by Mr. Saglio with “Good Reason” during the period commencing three (3) months prior to and terminating twelve (12) months subsequent to a Change of Control (as such term is defined in the employment agreement), Mr. Saglio will be entitled to (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) twelve (12) months if termination occurs after the nine (9) month anniversary of the effective date, or (b) six (6) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, “Saglio Change of Control Severance Term”), (iii) payment of 100% of target cash bonus for the entire year of termination, (iv) COBRA payments for the applicable Saglio Change of Control Severance Term, and (v) the full vesting of all outstanding equity grants on the date of termination. Mr. Saglio will be considered a service provider under the Inducement Plan or any other applicable equity compensation plan of Seneca until the last day of the applicable Saglio Change of Control Severance Term. In addition, Mr. Saglio has also entered into (i) Seneca’s standard confidential information and invention assignment agreement governing the ownership of any inventions and confidential information and (ii) Seneca’s standard indemnification agreement which is entered into by Seneca’s officers and directors. Termination of Mr. Saglio’s Employment Effective March 17, 2021, Mr. Saglio entered into a separation agreement with the Company whereby his employment was terminated. For a description of the compensation payable to Mr. Saglio, please refer to the section in this Item 11 of Part III of this Annual Report on Form 10-K entitled “Merger Related Compensation Arrangements.” Employment with Matthew Kalnik Effective April 1, 2020, Matthew Kalnik was appointed President and Chief Operating Officer of Seneca. In connection with Dr. Kalnik’s employment, Seneca entered into an at-will employment agreement with Dr. Kalnik. Pursuant to the terms of the employment agreement, Dr. Kalnik will receive a base salary of $415,000 per year and will be eligible to receive an annual target cash bonus of 45% of his base salary, based upon the achievement of certain performance goals and at the discretion of the Compensation Committee. Dr. Kalnik will also be eligible to receive an annual market-based equity grant to be issued from one of Seneca’s equity compensation plans at the discretion of the Board. In addition, as an inducement to Dr. Kalnik’s employment, Seneca granted him a non-qualified inducement option to purchase up to 282,840 shares of Common Stock on the effective date. The option has an exercise price of $0.6199 per share, a term of ten (10) years, and vests as follows: (i) one quarter (1/4) of the options vest on the effective date, and (ii) the remaining three-quarters (3/4) of the options will vest on a monthly basis over the thirty-six (36) month period following the effective date. The option was issued from the Inducement Plan. Dr. Kalnik agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $476,663. If the merger with Leading BioSciences does not close, Dr. Kalnik will retain his option grant. 62 For a period of nine (9) months from the effective date (or until the closing of a transaction related to issuing securities that was approved during such nine (9) month period) (the “Kalnik Measurement Period”), the inducement option will be subject to adjustment to maintain the percentage ownership represented by the inducement option on the date of grant in the event that (i) Seneca issues any Common Stock (including, without limitation, by virtue of exercise, conversion or exchange of any Common Stock equivalents that are issued and outstanding prior to the end of the Kalnik Measurement Period) during the Kalnik Measurement Period, or (ii) there is any exercise, conversion, or exchange of Common Stock equivalents that are issued and outstanding prior to the end of the Kalnik Measurement Period. Additionally, pursuant to the employment agreement, Seneca agreed to reimburse Dr. Kalnik up to $5,000 for legal and accounting expenses incurred in connection with the drafting and negotiation of his employment related agreements. Upon termination by reason of death or disability (as such terms are defined in the employment agreement), Dr. Kalnik will be entitled to receive the Accrued Obligations. Upon termination by Seneca for “Cause” or by Dr. Kalnik without “Good Reason,” as such terms are described in the employment agreement, Dr. Kalnik will only be entitled to receive the Accrued Obligations. Upon termination by Seneca without “Cause” or by Dr. Kalnik with “Good Reason,” (as those terms are defined in the employment agreement) Dr. Kalnik will be entitled to receive (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) eleven (11) months if termination occurs after the nine (9) month anniversary of the effective date or (b) six (6) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, the “Kalnik Severance Term”) (iii) payment of his bonus pro-rata for the time employed during the year of termination, (iv) COBRA payments for the applicable Kalnik Severance Term, and (v) the continued vesting of all outstanding equity grants for the earlier of (y) the term of the equity awards or (z) the applicable Kalnik Severance Term. Dr. Kalnik will be considered a service provider under the Inducement Plan or any other applicable equity compensation plan of Seneca until the last day of the Kalnik Severance Term. Upon termination by Seneca without “Cause” or by Dr. Kalnik with “Good Reason” during the period commencing three (3) months prior to and terminating twelve (12) months subsequent to a Change of Control (as such term is defined in the employment agreement), Dr. Kalnik will be entitled to (i) the Accrued Obligations, (ii) the continued payment of his base salary for (a) fifteen (15) months if termination occurs after the nine (9) month anniversary of the effective date, or (b) eight (8) months if termination occurs prior to the nine (9) month anniversary of the effective date (each as applicable, “Kalnik Change of Control Severance Term”), (iii) payment of 100% of target cash bonus for the entire year of termination, (iv) COBRA payments for the applicable Kalnik Change of Control Severance Term, and (v) the full vesting of all outstanding equity grants on the date of termination. Dr. Kalnik will be considered a service provider under the Inducement Plan or any other applicable equity compensation plan of Seneca until the last day of the applicable Kalnik Change of Control Severance Term. Termination of Dr. Kalnik’s Employment Effective March 17, 2021, Dr. Kalnik entered into a separation agreement with the Company whereby his employment was terminated. For a description of the compensation payable to Dr. Kalnik, please refer to the section in this Item 11 of Part III of this Annual Report on Form 10-K entitled “Merger Related Compensation Arrangements.” 63 Merger Related Executive Compensation Arrangements The following table and related footnotes present information about the compensation payable to Seneca’s named executive officers (who are the only executive officers of Seneca) in connection with the consummation of the Merger, and their associated termination without cause from Seneca that occurred on March 17, 2021. The compensation shown in the table below is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about compensation for each named executive officer that is based on or otherwise relates to the proposed Merger. The values in the table below show amounts due and payable to executives as a result of their termination without cause on March 17, 2021, and amounts due upon consummation of the Merger, if and when it occurs. Name (a) Cash ($) (b) Equity ($) (c) Pension/NQDC ($) (d) Perquisites/Benefits ($) (e) Tax Reimbursement ($) (f) Other ($) (g) Total ($) (h) Kenneth Carter, PhD 1,050,000 188,787 (1) - 44,243 - - 1,283,030 Mathew Kalnik, PhD 705,500 476,662 (1) - 44,593 - - 1,226,755 Dane Saglio 525,000 362,391 (1) - 28,429 - - 915,820 (1) Represents anticipated payment for the cancellation of outstanding stock options. Equity Compensation Plans Seneca currently has the following equity compensation plans outstanding as of the date hereof: (i) 2010 Equity Compensation Plan, (ii) 2019 Equity Incentive Plan, (iii) 2020 Equity Incentive Plan and (iv) the Inducement Award Stock Option Plan. For information related to Seneca’s equity compensation plans from which Seneca’s officers and directors are issued securities, please see the sections below entitled “ 2010 Equity Compensation Plan ,” “ 2019 Equity Incentive Plan ,” “ Equity Incentive Plan ,” and “ Inducement Award Stock Option Plan .” 2010 Equity Compensation Plan Seneca’s 2010 Equity Compensation Plan, as amended (“2010 Plan”) was approved by our stockholders on June 22, 2017 and is administered by Seneca’s board or its compensation committee. The 2010 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted stock units, and other stock-based awards to its employees, directors, and consultants. The purpose of the 2010 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Seneca’s employees, directors and consultants, and to promote the success of Seneca’s business. Under the terms of the 2010 Plan, Seneca currently has authorized 88,846 shares of Seneca Common Stock for the foregoing awards. 2019 Equity Incentive Plan Seneca’s 2019 Equity Incentive Plan (“2019 Plan”) was approved by Seneca’s stockholders on June 12, 2019 and is administered by Seneca’s Board or its compensation committee. The 2019 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted stock units, and other stock-based awards to our employees, directors, and consultants. The purpose of the 2019 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants, and to promote the success of Seneca’s business. Under the terms of the 2019 Plan, Seneca initially reserved 200,000 shares of Seneca Common Stock, subject to an automatic increase on the first day of each calendar year by 4% of the total shares of Seneca Common Stock issued and outstanding on such date. The 2019 Plan further authorized the administrator to amend the exercise price and terms of certain awards thereunder. Equity Incentive Plan Our 2020 Equity Incentive Plan (“2020 Plan”) was approved our stockholders and is administered by our Board or our Compensation Committee. The 2020 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted stock units, and other stock-based awards to our employees, directors, and consultants. The purpose of the 2020 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants, and to promote the success of our business. Under the terms of the 2020 Plan, Seneca initially reserved 600,000 shares of common stock. The 2020 Plan provides that the shares under the plan, as well as the shares underlying grants, is subject to automatic increase upon the occurrence of certain dilutive events. The 2020 Plan further authorized the administrator to amend the exercise price and terms of certain awards thereunder. 64 Inducement Award Stock Option Plan Seneca’s Inducement Award Stock Option Plan (“Inducement Plan”) is administered by Seneca’s Board or its compensation committee. The Inducement Plan is intended to be used in connection with the recruiting and inducement of senior management and employees. The issuance of awards under the Inducement Plan is at the discretion of the administrator which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Pursuant to the Inducement Plan, as amended and currently in effect, Seneca may grant stock options for up to a total of 215,000 shares of Seneca Common Stock to new employees of Seneca. As of December 31, 2019, 140,592 grants have been made pursuant to the Inducement Plan. On March 23, 2020 Seneca’s Board approved an amendment to the Inducement Plan increasing the numbers of shares authorized under the Inducement Plan to 715,000. The Inducement Plan is intended to qualify as an inducement plan under Nasdaq Listing Rule 5635(c)(4) and accordingly, Seneca did not seek stockholders’ approval. Outstanding Equity Awards Value at Fiscal Year-End The following table includes information with respect to the value of all outstanding equity awards previously awarded to our named executive officers as of December 31, 2020. All references to common stock, share, and per share amounts have been retroactively restated to reflect the 1:20 reverse stock split that became effective on July 17, 2019. Number of securities underlying unexercised options - exercisable Number of securities underlying unexercised options - unexercisable Equity incentive plan awards: Number of securities underlying unexercised unearned options Option exercise price Option expiration date Number of shares or units of stock that have not vested Market value of shares of units of stock that have not vested Equity incentive plan award: Number of unearned shares, units or other rights that have not vested Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested Name (#) (#) (#) ($) (#) ($) (#) (#) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Kenneth Carter (1) 360,327 504,458 - $ 0.6199 4/1/2030 - - - - Matthew Kalnik, PhD (2) 216,241 302,738 - $ 0.6199 4/1/2030 - - - - Dane Saglio (3) 54,060 75,685 - $ 0.6199 4/1/2030 - - - - _____________ (1) Represents a stock option granted conditionally issued on April 1, 2020 that was approved by Seneca’s shareholders on September 4, 2020. The option grant was initially to purchase up to 471,000 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 864,785 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. The options were all issued from our 2020 Equity Incentive Plan. Dr. Carter agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $188,789. If the Merger does not close, Dr. Carter will retain his option grant. (2) Represents an inducement stock option granted on April 1, 2020. The option grant was initially to purchase up to 282,840 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 518,979 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. The options were all issued from our Inducement Stock Option Plan. Dr. Kalnik agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $476,663. If the Merger does not close, Dr. Kalnik will retain his option grant. (3) Represents an inducement stock option granted on April 1, 2020. The option grant was initially to purchase up to 70,710 shares of common stock at an exercise price of $0.6199. The option contains anti-dilution protection to maintain percentage ownership and as of December 31, 2020, pursuant to certain issuances, the option was increased to an aggregate of 129,745 shares. The option (including any true-up issuances) vests (i) one quarter (1/4) on the original issuance date and (ii) three quarters (3/4) on a monthly basis over the thirty-six (36) month period following the original issuance date. The options were all issued from our 2020 Equity Incentive Plan. Mr. Saglio agreed in principle, subject to entering into a definitive agreement, to cancel the option grant immediately prior to closing in exchange for $362,392. If the Merger does not close, Mr. Saglio will retain his option grant. DIRECTOR COMPENSATION Board Compensation Arrangements Our non-executive director compensation program is overseen and approved by our Compensation Committee and is designed to enable us to continue to attract and retain highly qualified directors by ensuring that director compensation is in line with peer companies competing for director talent, and is designed to address the time, effort, expertise, and accountability required of active board membership. In general, we believe that annual compensation for non-employee directors should be cash and equity based and designed to compensate members for their service on the Board and its committees, align the interests of directors and stockholders and, by vesting over time, to create an incentive for continued service on the Board. Our Compensation Committee annually reviews and approves compensation programs related to our non-employee members of the Board of Directors. 65 The following are the terms of our Director Compensation Plans pursuant to which non-employee directors are compensated: Current Non-Employee Board Member Compensation Policy Effective April 1, 2020, each non-employee Board member will receive the following compensation commencing April 1 and ending on March 31 (“Board Year”): · A grant of 6,000 restricted stock units (“RSUs”) issued from one of Seneca’s equity compensation plans. The RSU’s will be granted on April 3, 2020 and then on April 1, of each subsequent year and will vest quarterly over the grant year on June 30, September 30, December 31 and March 31. · An annual cash fee of $40,000. In addition, non-employee Board members serving on committees will receive the following additional consideration: · The lead independent director will receive an additional annual fee of $25,000; · Each member of the Audit Committee will receive an additional annual fee of $10,000; · Each member of the Compensation Committee will receive an additional annual fee of $7,500; and · Each member of the Governance and Nominating Committee will receive an additional annual fee of $5,000. In addition to any other consideration received, non-employee Board members serving as a Chairperson will receive the following additional consideration: · The Audit Committee Chair will receive an additional annual fee of $10,000 (for chairing the committee in addition to the committee membership fee); · The Compensation Committee Chair will receive an additional annual fee of $7,500 (for chairing the committee in addition to the committee membership fee); and · The Governance and Nominating Committee Chair will receive an additional annual fee of $5,000 (for chairing the committee in addition to the committee membership fee). In addition, each non-employee Board member may elect to receive their respective shares of Seneca Common Stock upon vesting of the RSUs on a net basis to allow for tax withholdings by Seneca. Moreover, all cash compensation paid to non-employee Board members will be paid in arrears and on a quarterly basis over the Board Year. Legacy Director Compensation Plan (no longer in effect) Prior to April 1, 2020, each non-employee director received a $100,000 annual board fee. The annual board fee was payable as follows: (i) up to $50,000 in cash and (ii) the balance in equity grants consisting of common stock purchase options, restricted stock units or restricted stock, at the election of each non-employee director. Directors electing to receive a portion of their annual fee in cash received four equal quarterly payments during the year. Applicable equity grants were made as of July 1 of each year and vested quarterly over the grant year. Fees for new directors appointed or elected during the year were pro-rated and made on the fifth (5 th ) day following such approval and acceptance on the Board. Each non-employee director continuing service was required to make an election to receive the board fee in either cash, restricted stock, restricted stock units, or common stock options or a combination thereof by June 19th of each year. All grants of restricted stock and restricted stock units were valued using the adjusted closing bid price of Seneca Common Stock on the applicable grant date. All option grants were valued using the Black-Scholes option pricing model and are subject to customary assumptions used in the preparation of the financial statements. Board Compensation for 2020 Board Year The following table summarizes compensation paid/to be paid to non-employee directors during the year ended December 31, 2020. 66 Name Fees Earned or Paid in Cash Stock Awards Option Awards Nonequity Incentive Plan Compensation Non-qualified Deferred Compensation Earnings All Other Compensation Total (a) ($) (b) ($) (c) ($) (d) ($) (e) ($) (f) ($) (g) ($) (h) Scott Ogilvie $ - Independent Director (1) (4) $ 12,500 $ - $ 25,000 $ - $ - $ 22,499 $ 59,999 David J. Mazzon, PhD $ - Independent Director (2) $ 61,500 $ 3,150 $ 25,000 $ - $ - $ - $ 89,650 Cristina Csimma, PharmD, MHP $ - Independent Director (2) $ 77,875 $ 3,150 $ 25,000 $ - $ - $ - $ 106,025 Binxian Wei $ - Independent Director (3) $ 30,000 $ 3,150 $ 50,000 $ - $ - $ - $ 83,150 Sandford Smith $ - Independent Director (4) $ 12,500 $ - $ - $ - $ - $ - $ 12,500 Mary Ann Gray, PhD $ - Independent Director (5) $ 48,750 $ 10,586 $ 12,504 $ - $ - $ - $ 71,840 ____________________________ (1) The Director’s compensation includes $24,999 in consulting fees earned after his board service ended. The compensation also includes vesting of stock options to purchase 5,054 shares of common stock at $6.00 per share. (2) The Director’s compensation includes vesting of stock options to purchase 5,054 shares of common stock at $6.00 per share and 5,400 restricted stock units. (3) The Director’s compensation includes vesting of stock options to purchase 10,106 shares of common stock at $6.00 per share and 5,400 restricted stock units. (4) The Directors resigned from the Board on March 26, 2020. (5) The Director’s compensation includes vesting of stock options to purchase 2,568 shares of common stock at $5.90 per share, 7,042 restricted stock units and 3,814 shares of restricted stock. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Equity Compensation Plan Information The following table sets forth information with respect to our equity compensation plans as of December 31, 2020. 67 Number of Securities to be Issued upon Exercise of Outstanding Options and Rights Weighted-Average Exercise Price for Outstanding Options and Rights Number of Securities Remaining Available for Future Issuance under Equity compensation Plans (Excluding Securities Reflected in Column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders 2007 Stock Plan 1,688 $ 173.10 * 2010 Equity Compensation Plan 57,464 $ 214.88 19,037 2019 Equity Incentive Plan (1) 80,662 $ 4.06 946,723 2020 Equity Compensation Plan 1,037,742 $ 0.62 34,320 Equity compensation plans not approved by security holders Inducement Plan 648,724 $ 0.62 66,276 Total 1,826,280 $ 7.67 1,066,356 * Our 2007 Stock Plan terminated. Accordingly, although certain outstanding awards under the plan can still be exercised, no additional grants may be made pursuant to such plan. (1) On January 1 of each calendar year, the number of shares of common stock authroized under the 2019 Equity Incentive Plan increases by 4% of the total shares of common stock issued and outstanding on such date 2019 Equity Incentive Plan Our 2019 Equity Incentive Plan (“2019 Plan”) was approved by our stockholders on June 12, 2019 and is administered by our board or our compensation committee. The 2019 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted tock units, and other stock-based awards to our employees, directors, and consultants. The purpose of the 2019 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants, and to promote the success of our business. Under the terms of the 2019 Plan, we initially reserved 200,000 shares of common stock, subject to an automatic increase on the first day of each calendar year by 4% of the total shares of common stock issued and outstanding on such date. The 2019 Plan further authorized the administrator to amend the exercise price and terms of certain awards thereunder. Equity Compensation Plans Not Approved by Security Holders Inducement Plan Our Inducement Award Stock Option Plan (“Inducement Plan”) is administered by our board or our compensation committee. The Inducement Plan is intended to be used in connection with the recruiting and inducement of senior management and employees. The issuance of awards under the Inducement Plan is at the discretion of the administrator which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Pursuant to the Inducement Plan, as amended and currently in effect, the Company may grant stock options for up to a total of 175,000 shares of common stock to new employees of the Company. As of December 31, 2019, 140,592 grants have been made pursuant to the Inducement Plan. The Inducement Plan is intended to qualify as an inducement plan under NASDAQ Listing Rule 5635(c)(4) and accordingly, the Company did not seek stockholders’ approval. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of February 28, 2021, information regarding beneficial ownership of our capital stock by: · each person, or group of affiliated persons, known by us to be the beneficial owner of 5% or more of any class of our voting securities; · each of our current directors and nominees; · each of our current named executive officers; and · all current directors and named executive officers as a group. 68 Beneficial ownership is determined according to the rules of the SEC. Beneficial ownership means that a person has or shares voting or investment power of a security and includes any securities that person or group has the right to acquire within 60 days after the measurement date. This table is based on information supplied by officers, directors and principal stockholders. Except as otherwise indicated, we believe that each of the beneficial owners of the common stock listed below, based on the information such beneficial owner has given to us, has sole investment and voting power with respect to such beneficial owner’s shares, except where community property laws may apply. Common Stock Name and Address of Beneficial Owner (1) Shares Shares Underlying Convertible Securities Total Percent of Class (2) Directors and named executive officers Kenneth Carter (5) - 396,360 396,360 2.24% Cristina Csimma, Pharm.D, MHP 7,430 13,089 20,519 * Binxian Wei (3) 6,000 26,137 32,137 * David Mazzo 6,000 10,561 16,561 * Mary Ann Gray, Ph.D 18,259 4,954 23,213 * Matthew Kalnik, PhD (4) (5) - 237,865 237,865 1.36% Dane Saglio (4) (5) - 59,466 59,466 * All directors and named executive officers as a group (7 individuals) 786,121 4.41% 5% owners as reported on form SC 13G None All directors, named executive officers, and 5% owners as a group (7 entities) 786,121 4.41% ________________________________ * Represents less than one percent (1) Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is c/o Seneca Biopharma, Inc. 20271 Goldenrod Lane, Germantown, MD 20876. (2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common share purchase options or warrants. There are 17,295,703 shares of common stock issued and outstanding as of November 15, 2020. (3) Mr. Wei is appointed by the Series A 4.5% Convertible Preferred Stock owners. (4) Dr. Kalnik was appointed as our Chief Operating Officer and President and Mr. Saglio was appointed as Seneca’s Chief Financial Officer effective April 1, 2020. (5) Holder has agreed in principle to the cancellation of all stock options prior to completion of Merger in exchange for cash consideration. In the event that the Merger does not close, holder will retain such options. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE RELATED PARTY TRANSACTIONS Related Party Transactions Procedures We review all known relationships and transactions in which Seneca Biopharma and our directors, executive officers, and significant stockholders or their immediate family members are participants to determine whether such persons have a direct or indirect interest. Our management, in consultation with our outside legal consultants, determines based on specific fact and circumstances whether Seneca Biopharma or a related party has a direct or indirect interest in these transactions. In addition, our directors and executive officers are required to notify us of any potential related party transactions and provide us with the information regarding such transactions. If it is determined that a transaction is a related party transaction, the Audit Committee must review the transaction and either approve or disapprove it. In determining whether to approve or ratify a transaction with a related party, the Audit Committee will take into account all of the relevant facts and circumstances available to it, including, among any other factors it deems appropriate: 69 · the benefits to us of the transaction; · the nature of the related party’s interest in the transaction; · whether the transaction would impair the judgment of a director or executive officer to act in the best interests of Seneca Biopharma and our stockholders; · the potential impact of the transaction on a director’s independence; and · whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances. Any member of the Audit Committee who is a related party with respect to a transaction under review may not participate in the deliberations or vote on the approval of the transaction. Related Party Transactions Summarized below are certain transactions and business relationships between Seneca Biopharma and persons who are or were an executive officer, director or holder of more than five percent of any class of our securities since January 1, 2020. Information regarding disclosure of an employment relationship or transaction involving an executive officer and any related compensation solely resulting from that employment relationship or transaction is included in the Section of this Annual Report entitled “ Director Compensation ” and “ Executive Compensation .” Information regarding disclosure of compensation to a director is included in the Section of this Annual Report entitled “ Director Compensation. ” Information regarding the identification of each independent director is included in the Section of this Annual Report entitled “ Directors, Executive Officers and Corporate Governance .” All of our officers and directors enter into our standard indemnification agreement. · During the Board fiscal year of January 1, 2020 through December 31, 2020, we paid the following compensation to our non-employee board members: 1. An aggregate of $243,925 in cash. 2. An aggregate of 24,000 restricted stock units valued at $16,800. · On March 17, 2021, the Company terminated (i) Kenneth Carter, PhD, Seneca’s executive chairman, (ii) Dane Saglio, Seneca’s chief financial officer, (iii) Matthew Kalnik, PhD, Senecas’s chief operating officer and (iv) Seneca’s Senior Vice President of R&D (collectively, the “Employees”) without cause. In connection with the Employees’ terminations, the Company entered into separation agreements. The separation agreements contain mutual general releases of claims and acknowledge the amounts due to each Employee as a result of their terminations without cause as provided for in each of their respective employment agreements. As a result of their termination, the Company will repurchase their outstanding common stock purchase options for an aggregate of $1,423,012. For a further description of the payments to be made to each terminated employee, please see the section in Item 11 of Part III of this Annual Report on Form 10-K entitled “Merger Related Compensation Arrangements.” ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The following table summarizes the approximate aggregate fees billed to us or expected to be billed to us by our independent auditors, Dixon Hughes Goodman LLP for our 2020 and 2019 fiscal years, respectively: Type of Fees 2020 2019 Audit Fees $ 120,700 $ 119,350 Audit Related Fees 11,280 30,000 Tax Fees 12,400 12,000 All other Fees (1) 15,500 - Total Fees $ 159,880 $ 161,350 (1) Fees associated with registration statements and issuance of comfort letters Pre-Approval of Independent Auditor Services and Fees Our audit committee reviewed and pre-approved all audit and non-audit fees for services provided by Dixon Hughes Goodman LLP and has determined that the provision of such services to us during fiscal 2020 and in connection with the audit of our 2020 consolidated financial statements is compatible with and did not impair independence. It is the practice of the audit committee to consider and approve in advance all auditing and non-auditing services provided to us by our independent auditors in accordance with the applicable requirements of the SEC. Dixon Hughes Goodman LLP did not provide us with any services, other than those listed above. 70 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 1. Financial Statements: 2. Exhibits: EXHIBIT INDEX Exhibit No. Description Filed/ Furnished Herewith Form Exhibit No. File No. Filing Date 2.01# Agreement and Plan of Merger, dated December 16, 2020, by and among Seneca Biopharma, Inc., Townsgate Acquisition Sub 1, Inc. and Leading BioSciences, Inc. 8-K 2.1 001-33672 12/21/20 2.02 Form of Support Agreement, by and between Seneca Biopharma, Inc. and certain officers and directors of Seneca Biopharma, Inc. 8-K 10.1 001-33672 12/21/20 2.03 Form of Support Agreement, by and between Seneca Biopharma, Inc. and certain officers, directors and stockholders of Leading BioSciences, Inc. 8-K 10.2 001-33672 12/21/20 2.04 Form of Company Lock-Up Agreement 8-K 10.3 001-33672 12/21/20 2.05 Form of LBS Lock-Up Agreement 8-K 10.4 001-33672 12/21/20 2.06 Form of CVR Agreement. S-4/A 2.06 333-251659 2/9/2021 3.01(i) Amended and Restated Certificate of Incorporation of Neuralstem, Inc. filed on 1/5/2017 S-1/A 3.01(i) 001-33672 1/6/17 3.01(ii) Amended and Restated Certificate of Incorporation of Neuralstem, Inc. effective on 7/17/2019 8-K 3.01(i) 001-33672 7/18/19 3.01(iii) Amendment to Amended and Restated Certificate of Incorporation of Neuralstem, Inc. effective 10/28/19 8-K 3.01 001-33672 10/30/19 3.01(iv) Certificate of Validation of Certificate to the Amended and Restated Certificate of Incorporation of Seneca Biopharma, Inc. S-4 3.01(iv) 333-251659 12/23/20 3.02(i) Certificate of Designation of Series A 4.5% Convertible Preferred Stock 8-K 3.01 001-33672 12/12/16 3.03(ii) Amended and Restated Bylaws of Neuralstem, Inc. adopted on 11/10/2015 8-K 3.01 001-33672 11/16/15 4.01** Amended and Restated 2005 Stock Plan adopted on 6/28/07 10-QSB 4.2(i) 333-132923 8/14/07 4.02** Neuralstem, Inc. 2007 Stock Plan 10-QSB 4.21 333-132923 8/14/07 4.03 Form of Common Stock Purchase Warrant Issued to Karl Johe on 6/5/07 10-KSB 4.22 333-132923 3/27/08 71 4.04 Form of employee and consultant option grant pursuant to our 2007 Stock Plan and 2010 Equity Compensation Plan 10-K 4.23 001-33672 3/31/10 4.05** Amended Neuralstem 2010 Equity Compensation Plan adopted on June 22, 2017 DEF 14A Appendix I 001-33672 5/1/17 4.06** Form of Restricted Stock Award Agreement pursuant to our 2007 Stock Plan and 2010 Equity Compensation Plan S-8 4.06 333-172563 3/1/11 4.07** Form of Restricted Stock Unit Agreement S-8 4.08 333-172563 3/1/11 4.08 Form of Consulting Warrant issued January 2011 and March 2012 S-3 4.01 333-188859 5/24/13 4.09** Inducement Stock Option Plan adopted 2/15/2016 and as amended on 12/12/2018, 9/13/2019, and 3/23/20 10-K 4.31 001-33672 3/27/20 4.10** Form of Inducement Award Non-Qualified Stock Option Grant pursuant to Inducement Stock Option Plan 8-K 4.02 001-33672 2/19/16 4.11 Form of Common Stock Purchase Warrant from May 2016 Public Offering dated May 6, 2016 8-K 4.01 001-33672 5/4/16 4.12 Form of Common Stock Purchase Warrant from May 2016 Private Offering Dated May 12, 2016 8-K 4.01 001-33672 5/13/16 4.13 Form of Series A Preferred Stock Certificate 8-K 4.01 001-33672 9/12/16 4.14 Form of Inducement Warrant issued March 20, 2017 and March 31, 2017 8-K 4.01 001-33672 3/20/17 4.15 Form of Common Stock Purchase Warrant from August 2017 Public Offering Dated August 1, 2017 8-K 4.01 001-33672 7/28/17 4.16 Form of Common Stock Purchase Warrant from October 2018 Offering 8-K 4.01 001-33672 10/29/18 4.17 Form of Placement Agent Common Stock Purchase Warrant from October 2018 Offering 8-K 4.02 001-33672 10/29/18 4.18 Consultant Warrant for Hibiscus BioVentures, LLC issued January 2019 10-Q 4.40 001-33672 5/14/19 4.19** Seneca Biopharma 2019 Equity Incentive Plan DEF 14A Appendix I 001-33672 4/29/19 4.20** Form of Restricted Stock Unit from 2019 Equity Incentive Plan S-1 4.42 333-232273 6/21/19 4.21** Form of Restricted Option Grant from 2019 Equity Incentive Plan S-1 4.43 333-232273 6/21/19 4.22** Form of Restricted Stock Grant from 2019 Equity Incentive Plan S-1 4.44 333-232273 6/21/19 4.23 Form of Series M and Series N warrant from July 2019 Offering S-1/A 4.45 333-232273 7/24/19 4.24 Form of Series O Pre-Funded Warrant from July 2019 Offering S-1/A 4.46 333-232273 7/24/19 4.25 Form of Series P Replacement Warrant issued in January 2020 Offering 8-K 4.01 001-33672 1/22/20 72 4.26 Form of Series Q Replacement Warrant issued in January 2020 Offering 8-K 4.02 001-33672 1/22/20 4.27 Form of Placement Agent Warrant issued in January 2020 Offering 8-K 4.03 001-33672 1/22/20 4.28 Form of Placement Agent Warrant issued in May 2020 Offering 8-K 4.01 001-33672 5/27/20 4.29** Seneca Biopharma 2020 Equity Incentive Plan DEF 14A Appendix C 001-33672 6/24/20 4.31 Registration Rights Agreement, by and between Seneca Biopharma, Inc. and the investor party thereto, dated December 16, 2020 8-K 4.3 001-33672 12/21/20 10.01** Employment Agreement with Kenneth Carter dated December 12, 2018 8-K 10.01 001-33672 12/18/18 10.02 Form of Securities Purchase Agreement from May 2016 Private Offering 8-K 10.01 001-33672 5/13/16 10.03 Form of Securities Purchase Agreement between Neuralstem and Tianjin Pharmaceuticals Holdings, Ltd. 8-K 10.01 001-33672 9/12/16 10.04 Form of Letter Agreement for Warrant Exercises on March 20, 2017 and March 30, 2017 8-K 10.01 001-33672 3/20/17 10.05 Form of Securities Purchase Agreement with Investors from October 2018 Offering 8-K 10.01 001-33672 10/29/18 10.06 Form of Engagement Agreement with H.C. Wainwright & Co. Dated October 25, 2018 8-K 10.02 001-33672 10/29/18 10.07** Sample Confidential Information and Invention Assignment Agreement 8-K 10.02 001-33672 12/12/18 10.08** Form of Indemnification Agreement for Directors and Officers 8-K 10.03 001-33672 12/12/18 10.09 Letter Agreement from January 2020 Offering 8-K 10.01 001-33672 1/22/20 10.10 Form of Placement Agent Agreement from January 2020 Offering 8-K 10.02 001-33672 1/22/20 10.11** Amendment to Employment Agreement with Kenneth Carter effective April 1, 2020 10-K 10.25 001-33672 3/27/20 10.12** Employment Agreement with Dane Saglio 8-K 10.01 001-33672 4/2/20 10.13** Employment Agreement with Matthew Kalnik, PhD 8-K 10.02 001-33672 4/2/20 10.14 Form of Securities Purchase Agreement with Investors from May 2020 Offering 8-K 10.01 001-33672 5/27/20 10.15 Securities Purchase Agreement, by and between Leading BioSciences, Inc. and the investor party thereto, dated December 16, 2020 8-K 10.5 001-33672 12/21/20 10.16 Securities Purchase Agreement, by and among Seneca Biopharma, Inc., Leading BioSciences, Inc. and the investor party thereto, dated December 16, 2020 8-K 10.6 001-33672 12/21/20 73 10.17 Form of Leak-Out Agreement, by and between Seneca Biopharma, Inc. and the investor party thereto 8-K 10.7 001-33672 12/21/20 10.18 Form of Separation Agreement with Seneca Executives 8-K 10.01 001-33672 3/18/21 14.01 Code of Ethics and Conduct 10-K 14.01 001-33672 4/2/18 14.02 Financial Code of Professional Conduct 10-K 14.02 001-33672 3/27/20 21.01 Subsidiaries of Registrant * 23.01 Consent of Dixon Hughes Goodman LLP, independent registered public accounting firm to Seneca Biopharma, Inc. * 31.1 / 31.2 Certification of the Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * 32.1 / 32.2 Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. § 1350 * 101.INS XBRL Instance Document * 101.SCH XBRL Taxonomy Extension Schema Document * 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB XBRL Taxonomy Extension Label Linkbase Document * 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * ITEM 16. FORM 10-K SUMMARY None 74 SIGNATURES In accordance with Section 13 or 15(d) 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. SENECA BIOPHARMA, INC Dated: March 22, 2021 By: /S/ Dane Saglio Dane Saglio Principal Executive and Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the following capacities and on the dates indicated. Name Title Date /s/Kenneth Carter Kenneth Carter Director (Chairman) March 22, 2021 /s/Dane Saglio Dane Saglio Principal Executive and Principal Financial Officer March 22, 2021 /s/ Cristina Csimma Cristina Csimma Director March 22, 2021 /s/ Mary Ann Gray Mary Ann Gray Director March 22, 2021 /s/ David Mazzo David Mazzo Director March 22, 2021 /s/ Binxian Wei Binxian Wei Director March 22, 2021 75