What changed in this filing

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Item 9A. Controls and Procedures

2025-03-06 compared with 2024-03-25 · 157 added, 167 removed, 537 unchanged (38% of the section changed)

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Evaluation of Disclosure Controls and Procedures

We adopted and maintaindisclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is collected, recorded, processed, summarized and reported within the time periods specified under the rules of the SEC.

We adopted and maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is collected, recorded, processed, summarized and reported within the time periods specified under the rules of the SEC.

Our disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure.

As required under Exchange Act Rule 13a-15, our management, including the Chief Executive Officer who also serves as our Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K.

Due to the material weaknesses in internal control over financial reporting as described below, our Chief Executive Officer who also serves as our Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.

Our Chief Executive Officer who also serves as our Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

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Management conducted an assessment of our internal control over financial reporting as of December 31, 2024 based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

Based on the assessment, management concluded that, as of December 31, 2023, our internal control over financial reporting was not effective.

Based on the assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.

Our management, including our Chief Executive Officer who is also our Chief Financial Officer, does not expect that our disclosure controls and procedures and our internal control processes will prevent all errors or fraud.

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Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Based on its assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2023, due to the following previously reported material weaknesses that continued to exist:

● Management did not design and maintain effective review controls at a sufficient level of precision with certain financial statement areas and over unusual transactions involving complex accounting and related disclosure requirements.

● Management did not maintain effective information technology general controls over user access, program change management, and segregation of duties, within certain key information systems supporting the Company’s accounting and financial reporting processes.

Additionally, many of the Company’s business process controls dependent upon the information derived from these information systems were also ineffective, as management did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those controls.

Management’s Plan for Remediation

In response to the material weaknesses, management, with oversight of the Audit Committee of the Board of Directors, has identified and begun to implement steps to remediate the material weaknesses.

The company hired an third party consultant during 2023 to assist with the remediation efforts.

While the Company has made progress during 2023, the remediation efforts are ongoing, as additional time is needed to complete the remediation and allow for the internal controls to be tested by management.

Our continued internal control remediation efforts include the following:

● Enhancing existing policies and procedures to facilitate more efficient operations and improve the timely execution of key controls by company personnel.

● Enhancing program change management, user access provisioning, and monitoring controls to ensure changes to key applications are appropriately reviewed and approved and to enforce appropriate system access and segregation of duties.

● Improving the design of key controls to ensure reports used in the performance of such controls are complete and accurate as part of the controls execution.

We are committed to ensuring that our internal controls over financial reporting are designed and operating effectively.

Management believes the efforts taken to date and the planned remediation will improve the effectiveness of our internal control over financial reporting.

While these remediation efforts are ongoing, the controls must be operating effectively for a sufficient period of time and be tested by management in order to consider them remediated and conclude that the design is effective to address the risks of material misstatement.

Remediation of Previously Reported Material Weaknesses

Management reported in Item 9A of its Annual Report on Form 10-K for the year ended December 31, 2023, material weaknesses related to the fact that we had not designed and maintained effective review controls at a sufficient level of precision within certain financial statement areas and over unusual transactions involving complex accounting and related disclosure requirements.

Also, we did not maintain effective information technology general controls over user access, program change management, and segregation of duties, within certain key information systems supporting the Company’s accounting and financial reporting processes.

Many of the Company’s business process controls dependent upon the information derived from these information systems were also ineffective, as management did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those controls.

During the year ended December 31, 2024, management implemented measures on these processes to ensure that the control deficiencies contributing to the material weaknesses were remediated.

Such remedial measures are as follows:

● Enhanced existing policies and procedures as well as documentation of control owners review to improve execution of controls by Company personnel

● Enhanced program change management, user access provisioning and monitoring controls to ensure key applications are appropriately reviewed and approved and to enforce appropriate system access and segregation of duties

● Enhanced the design of key controls to ensure reports used in the performance of controls are complete and accurate

Management has evaluated these additional controls and believes they are operating effectively and therefore the Company has remediated these material weaknesses.

Changes in Internal Control Over Financial Reporting

Except for the material weaknesses described above, there has been no change in the Company’s internal control over financial reporting during the Company’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the quarter ended December 31, 2024, except for the changes discussed above related to remediation of material weaknesses, there have been no other changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information .

Disclosure of Material Event

On March 3, 2025, we entered into a new employment agreement with Mr.

Shallcross (the “2025 Shallcross Employment Agreement”) for a term of two years, pursuant to which he continues to serve as our Chief Executive Officer and Chief Financial Officer and receive the same compensation that he received pursuant to the 2022 Shallcross Employment Agreement.

The material terms of the 2025 Shallcross Employment Agreement are set forth below.

Pursuant to the 2025 Shallcross Employment Agreement, Mr.

Shallcross is entitled to an annual base salary of $667,526.

Shallcross is also eligible to receive an annual cash performance bonus targeted at fifty percent (50%) of his annual base salary as well as discretionary annual equity awards pursuant to the Company’s incentive plans.

The annual bonus will be based upon the assessment of the Board of Mr.

Shallcross’s performance.

The 2025 Shallcross Employment Agreement also includes confidentiality obligations and inventions assignments by Mr.

Shallcross and non-solicitation and non-competition provisions.

The 2025 Shallcross Employment Agreement has a stated term of two years but may be terminated earlier pursuant to its terms.

Shallcross’s employment is terminated for any reason, he or his estate as the case may be, will be entitled to receive the unpaid base salary through the date of termination and accrued vacation, any unpaid annual bonus earned with respect to any calendar year ending on or preceding the date of termination, expense reimbursement and any other entitlements accrued by him to the extent not previously paid (the “Accrued Obligations”);

provided, however, that if his employment is terminated (i) by the us without Cause or by Mr.

Shallcross for Good Reason (as each is defined in the 2025 Shallcross Employment Agreement) then, subject to him executing a general release in form acceptable to the us that becomes effective, in addition to paying the Accrued Obligations, (a) we will continue to pay his then current base salary and if he timely elects continued coverage under COBRA, we will continue to provide benefits at least equal to those that were provided at the time of termination for a period of twelve (12) months and (b) all unvested equity awards will vest and he shall have the right to exercise any such vested equity awards until the earlier of eighteen (18) months after termination or the remaining term of the awards;

or (ii) by reason of his death or Disability (as defined in the 2025 Shallcross Employment Agreement), then in addition to paying the Accrued Obligations, Mr.

Shallcross or his estate would have the right to exercise any vested options until the earlier of six (6) months after termination or the remaining term of the awards.

In such event, if Mr.

Shallcross commenced employment with another employer and becomes eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits to be provided by us as described herein would terminate.

The 2025 Shallcross Employment Agreement provides that upon the closing of a “Change in Control” (as defined in the 2025 Shallcross Employment Agreement), all unvested options shall immediately vest and the time period that Mr.

Shallcross will have to exercise all vested stock options and other awards that Mr.

Shallcross may have will be equal to the shorter of:

(i) eighteen (18) months after termination, or (ii) the remaining term of the award(s).

If within one (1) year after the occurrence of a Change in Control, Mr.

Shallcross terminates his employment for “Good Reason” or the Company terminates Mr.

Shallcross’s employment for any reason other than death, disability or Cause, Mr.

Shallcross will be entitled to receive:

(i) the portion of his base salary for periods prior to the effective date of termination accrued but unpaid (if any);

(ii) all unreimbursed expenses (if any);

(iii) an aggregate amount (the “Change in Control Severance Amount”) equal to two (2) times the sum of his base salary plus an amount equal to the bonus that would be payable if the “target” level performance were achieved under the Company’s annual bonus plan (if any) in respect of the fiscal year during which the termination occurs (or the prior fiscal year if bonus levels have not yet been established for the year of termination) subject to him executing a general release in form acceptable to the Company that becomes effective.

If within two (2) years after the occurrence of a Change in Control, Mr.

Shallcross terminates his employment for “Good Reason” or we terminate Mr.

Shallcross’s employment for any reason other than death, disability or Cause, Mr.

Shallcross will be entitled to also receive for the period of two (2) consecutive years commencing on the date of such termination of his employment, medical, dental, life and disability insurance coverage for him and the members of his family that are not less favorable to him than the group medical, dental, life and disability insurance coverage carried by the Company for him subject to him executing a general release in form acceptable to us that becomes effective.

The Change in Control Severance Amount is to be paid in a lump sum if the Change in Control event constitutes a “change in the ownership” or a “change in the effective control” of the Company or a “change in the ownership of a substantial portion of a corporation’s assets” (each within the meaning of Section 409A of the Internal Revenue Code (“Rule 409A”)), or in 48 substantially equal payments, if the Change in Control event does not so comply with Section 409A.

Insider Trading Arrangements

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “ Rule 10b5-1 trading arrangement” or “ nonRule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Shallcross also served as the Chief Financial Officer of Bering Truck Corporation.

Since June 2019, Mr.

Shallcross has served on the board of directors of Elys Game Technology, Corp.

a Nasdaq listed international, vertically integrated commercial-stage company engaged in various aspects of the leisure gaming industry and from April 2021 until June 2022, he served on the board of directors of TwinVee Powercats, Co.

VEEE), a designer, manufacturer and marketer of recreational and commercial power catamaran boats.

From June 2019 until March 2024, Mr.

Shallcross served on the board of directors of Elys Game Technology, Corp.

He holds an MBA from the University of Chicago’s Booth School of Business, a Bachelor of Science degree in Accounting from the University of Illinois, Chicago, and is a Certified Public Accountant in the State of Illinois.

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Kraws is a partner of PDK Healthcare Innovations LLC.

Kraws also serves as Chief Financial Officer of Syncromune, Inc.

Kraws also served as Chief Financial Officer of Syncromune, Inc.

from February 2022 to February 2024.

He also consults and assists in management of private companies through his private practice.

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Since April 2010, Mr.

Wolf has served as the Chief Executive Officer and Chairman of the Board of NightHawk Biosciences, Inc.

Prior to founding NightHawk, from June 1997 to March 2011, Mr.

Wolf has served as the Chief Executive Officer and Chairman of the Board of Scorpius Holdings, Inc.

Prior to founding Scorpius Holdings, Inc., from June 1997 to March 2011, Mr.

Wolf served as managing director at Seed-One Ventures, LLC a venture firm focused on launching and growing exceptional healthcare companies from the ground up.

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The Trading Policy was implemented to assure compliance with the securities laws prohibiting insider trading in our securities and disclosure of material, non-public information to outsiders.

It prohibits the purchase and sale of our securities by our directors, officers, and employees, as well as members of their households, while in possession of material, non-public information until the third business day after such information is made available to the public.

It prohibits the purchase and sale of our securities by us, our directors, officers, and employees, as well as members of their households, while in possession of material, non-public information until the third business day after such information is made available to the public.

Additionally, our Trading Policy imposes special additional trading restrictions, including requiring pre-clearance of any transaction and prohibiting the purchase or sale of options to sell or buy our securities and short sales.

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Although the rules allow us to provide less detail about our executive compensation program, the Compensation Committee is committed to providing the information necessary to help stockholders understand its executive compensation-related decisions.

Accordingly, this section includes supplemental narratives that describe the 2023 executive compensation program for our Named Executive Officers.

The following table summarizes all compensation awarded to, earned by or paid to our Named Executive Officers, Steven A.

Shallcross and Frank Tufaro, during the fiscal years presented below.

Accordingly, this section includes supplemental narratives that describe the 2024 executive compensation program for our Named Executive Officer.

The following table summarizes all compensation awarded to, earned by or paid to our Named Executive Officer, Steven A.

Shallcross, during the fiscal years presented below.

Name and Principal

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and Chief Financial Officer

Chief Operating Officer (6)

Shallcross’ annual salary was $614,250 commencing January 1, 2023 and $644,963 commencing January 1, 2024.

Tufaro was appointed our Chief Operating Officer on March 22, 2022 and separated from the Company on May 10, 2023.

Tufaro’s annual salary was $375,000 commencing March 22, 2022.

(2) Amounts represent annual cash bonuses earned for the applicable fiscal year.

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(3) Amount reflects the grant date fair value of the Named Executive Officer’s stock options, calculated in accordance with FASB ASC Topic 718.

For a discussion of the assumptions used in calculating these values, see Note 5 to our consolidated financial statements.

In December 2022 and December 2023, Mr.

Shallcross was issued options to purchase 475,000 and 700,000 shares of common stock, respectively, Dr.

Tufaro was issued 100,000 options in December 2022, and each of these awards vest monthly over 36 months.

(4) The all other compensation column is comprised of vacation accrual paid, and the portion of medical, dental and vision premiums paid by us on behalf of our Named Executive Officers.

For a discussion of the assumptions used in calculating these values, see Note 8 to our consolidated financial statements included elsewhere in this Annual Report.

In December 2023, Mr.

Shallcross was issued options to purchase 28,000 shares of common stock.

There were no options issued to the Named Executive Officer during 2024.

(4) The all other compensation column is comprised of vacation accrual paid, and the portion of medical, dental and vision premiums paid by us on behalf of our Named Executive Officer.

These benefits are offered to all Theriva Biologics’ employees who work at least 17.5 hours per week.

All other compensation for Mr.

Tufaro includes pursuant to his separation agreement the payment of a total of $196,875 for a period of six months, and reimbursement of COBRA coverage for himself, his spouse and other eligible dependents for six months.

(5) Amount excludes compensation paid to the wife of Mr.

Shallcross disclosed under the "Related Party Transactions"

Tufaro was appointed as our Chief Operating officer on March 22, 2022 and separated from the Company on May 10, 2023.

(5) Amount for the year ended December 31, 2024 excludes salary of $152,250 and a bonus of $45,000 paid to the wife of Mr.

Shallcross during the year ended December 31, 2024.

Narrative Disclosure to Summary Compensation Table

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● Compensation Should Align with Stockholders’ Interests — The Compensation Committee believes that executives’ interests should be aligned with those of the stockholders.

Executives are granted stock options so that their total compensation is tied directly to value realized by our stockholders.

In years prior to 2024, executives were granted stock options so that their total compensation was tied directly to value realized by our stockholders.

Executive bonuses are tied directly to the achievement of performance goals that the Compensation Committee believes will ultimately drive stockholder value creation.

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● Compensation Motivates and Rewards the Achievement of Goals — Our executive compensation program is designed to appropriately reward both individual and collective performance that meets and exceeds our annual, long-term and strategic goals.

To accomplish this objective, a substantial percentage of total compensation is variable and “at risk”, both through annual incentive compensation in the form of cash bonuses and the granting of long-term incentive awards.

To accomplish this objective, a substantial percentage of total compensation is variable and “at risk,” both through annual incentive compensation in the form of cash bonuses and, in years prior to 2024, the granting of long-term incentive awards.

Oversight of Executive Compensation

Role of the Compensation Committee

Pursuant to the terms of its charter, the Compensation Committee is responsible for the review of all aspects of our executive compensation program and makes decisions regarding the compensation of the Named Executive Officers.

Our Named Executive Officers for the year ended December 31, 2023 were Steven Shallcross, our Chief Executive Officer who also serves as our Chief Financial Officer, and Frank Tufaro, who served as our Chief Operating Officer until his separation on May 10, 2023.

Our Named Executive Officer for the year ended December 31, 2024 was Steven Shallcross, our Chief Executive Officer who also serves as our Chief Financial Officer.

The Compensation Committee’s responsibilities include but are not limited to the following:

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● Reviewing the competitive position of, and making recommendations to, the Board of Directors with respect to the cash-based and equity-based compensation plans and our programs relating to compensation and benefits.

● Overseeing administration of our stock option plan and incentive compensation plans, making recommendations to the Board of Directors regarding the granting of options and incentives and otherwise assisting the Board of Directors in administering awards under these plans.

● Overseeing the administration of our stock option plan and incentive compensation plans, making recommendations to the Board of Directors regarding the granting of options and incentives and otherwise assisting the Board of Directors in administering awards under these plans.

● Reviewing the financial performance and operations of our major benefit plans.

Additional information regarding the Compensation Committee’s responsibilities is set forth in its charter, which is posted on our website at www.therivabio.com .

Information contained on our website is intended for informational purposes only and is not incorporated by reference into this Annual Report, and it should not be considered to be part of this Annual Report.

Role of the Chief Executive Officer

Our Chief Executive Officer makes recommendations to the Compensation Committee regarding the compensation of our other Named Executive Officers.

Our Chief Executive Officer makes recommendations to the Compensation Committee regarding the compensation of any other Named Executive Officers.

The Chief Executive Officer does not participate in any discussions or processes concerning his own compensation and participates in a non-voting capacity in discussions or processes concerning the compensation of our other members of management.

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Program Design

The Compensation Committee uses a simple and straightforward approach in compensating our Named Executive Officers in which base salary, annual incentives and stock options are the principal components.

The Compensation Committee uses a simple and straightforward approach in compensating our Named Executive Officer in which base salary, annual incentives and stock options are the principal components.

In addition, executive officers generally participate in the same benefit programs as other full-time employees.

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During 2024, the salary for our Chief Executive Officer who also serves as our Chief Financial Officer was 67% of his target compensation package and performance based variable compensation comprised 33% of his target compensation.

Of the performance based variable compensation 52% was equity-based compensation and 49% was his target cash bonus.

During 2023, our Chief Operating Officer Officer’s salary was 71% of his target annual compensation package and performance based variable compensation comprised 29% of his target annual compensation.

Because he served only until May 10, 2023, our Chief Operating Officer received only a pro-rated amount of his base salary, was not paid a cash bonus and did not receive equity-based compensation in 2023.

The increase in the percentage of non-variable compensation was due to the fact that no equity awards were granted in 2024.

Of the performance based variable compensation none was equity-based compensation and all of the variable compensation was his target cash bonus.

The Compensation Committee anticipates awarding equity awards for services provided in 2024 during the first quarter of 2025.

Compensation Review Process

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Our Compensation Committee believes that it is important when making its compensation decisions to be informed as to the competitive market for executive talent, including the current practices of comparable public companies with which we compete for such talent.

Consequently, our Compensation Committee reviewed an executive compensation benchmarking report prepared by Meridian Compensation Partners, LLC (“Meridian”) at the Compensation Committee’s request.

Consequently, in December 2023 our Compensation Committee reviewed an executive compensation report prepared by Meridian Compensation Partners, LLC (“Meridian”) at the Compensation Committee’s request.

With respect to its analysis of the compensation of the Chief Executive Officer, the Compensation Committee took into account that our Chief Executive Officer also serves as our Chief Financial Officer, which is not typical for most companies.

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The base salaries are targeted to be competitive with other similar biotechnology companies.

Base salaries for the Named Executive Officers are set by their respective employment contracts and are reviewed annually by the Compensation Committee referencing an executive compensation benchmarking report provided by Meridian.

Base salaries for the Named Executive Officers are set by their respective employment contracts and are reviewed annually by the Compensation Committee referencing an executive compensation report.

The Compensation Committee engaged Meridian to provide such a report in 2023, and Mr.

Shallcross’ compensation for 2024 was determined by the Compensation Committee taking into account the findings and recommendations of this report.

Shallcross’ base salary was $614,250 for the year ended December 31, 2023.

Shallcross received a 5% merit increase to $614,250 for the year ended December 31, 2023, and on December 14, 2023 received a 5% merit increase to $644,963.

Our former Chief Operating Officer, Dr.

Tufaro, received a base salary of $375,000 for the year ended December 31, 2022.

Tufaro received a 5% merit increase to $393,750 for the year ended December 31, 2023.

The table below shows the 2023 annualized base salary levels for our our Named Executive Officers, including a comparison with 2022.

Named Executive Officer

Shallcross, Chief Executive Officer and Chief Financial Officer

Frank Tufaro, Chief Operating Officer

The Compensation Committee believes that the granting of a bonus is appropriate to motivate the Named Executive Officers.

Shallcross received a 5% merit increase to $644,963 for the year ended December 31, 2024, and on December 13, 2024 received a 3.5% merit increase to $667,536 for the 2025 fiscal year.

The Compensation Committee believes that the granting of a bonus is appropriate to motivate our Named Executive Officers.

The bonuses are to be rewarded in the discretion of the Compensation Committee and the Board of Directors, based on a review of achievements for the year.

The Compensation Committee focuses on individual performance, which enables the Compensation Committee to differentiate among executives and emphasize the link between personal performance and compensation.

The Compensation Committee also used information from the Meridian executive compensation benchmarking report in determining bonus amounts.

Although the Compensation Committee does not use any fixed formula in determining bonuses, it does link bonuses to objectives the Compensation Committee deems important such as for 2023, effective M&A strategy and implementation, financings, and achievement of clinical milestones.

The Compensation Committee also used information from the executive compensation report prepared by Meridian in December 2023 in determining bonus amounts.

Although the Compensation Committee does not use any fixed formula in determining bonuses, it does link bonuses to objectives the Compensation Committee deems important such as effective M&A strategy and implementation, financings, and achievement of clinical milestones.

Shallcross’ employment agreement provided that he was eligible for a target bonus of up to fifty percent (50%) of his base salary in cash.

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Shallcross’ achievement relative to performance goals in 2024, the Compensation Committee approved a $200,000 cash bonus, or 62% of target.

Tufaro’s employment agreement provided that he was eligible for a target bonus of up to forty percent (40%) of his base salary in cash.

Because he served only until May 10, 2023, Dr.

Tufaro did not receive a cash bonus for 2023.

Long-Term Incentives

The Compensation Committee believes that a substantial portion of the Named Executive Officer’s compensation should be awarded in equity-based compensation since equity-based compensation is directly linked to the interests of stockholders.

The Compensation Committee believes that a substantial portion of our Named Executive Officer’s compensation should be awarded in equity-based compensation since equity-based compensation is directly linked to the interests of stockholders.

The Compensation Committee has elected to grant stock options to the Named Executive Officers and other key employees as the primary long-term incentive vehicle.

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The options had a grant date of December 14, 2023, an exercise price of $14.75, vest pro rata on a monthly basis over 36 months and expire seven years from date of grant.

Because he served only until May 10, 2023, Dr.

Tufaro did not receive any equity-based compensation in 2023.

No options were granted to Mr.

Shallcross in 2024.

The Compensation Committee anticipates awarding equity awards for services provided in 2024 during the first quarter of 2025.

The Compensation Committee reviews the performance, potential burn rates and dilution levels to create an option pool that may be awarded to employee participants.

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Retirement Benefits

Each of our Named Executive Officers are eligible to participate in our 401(k) contributory defined contribution plan.

Each of our Named Executive Officers is eligible to participate in our 401(k) contributory defined contribution plan.

Pursuant to our 401(k) plan, all eligible employees, including our Named Executive Officers, are provided with a means of saving for their retirement.

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We do not provide any nonqualified deferred compensation plans to our employees, although we may consider such benefits in the future.

Attracting and retaining talented and motivated management and key employees is essential to creating long-term stockholder value.

Offering a competitive, performance-based compensation program with a substantial equity component helps to achieve this objective by aligning the interests of the executive officers and other key employees with those of stockholders.

We believe that our compensation program met these objectives and that our 2023 compensation program was appropriate in light of the challenges we and our employees face.

Risk Analysis of Our Compensation Program

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Steven Shallcross

(1) Options will vest pro rata, on a monthly basis, over 36 months.

Tufaro resigned from the Company effective May 10, 2023.

All or Dr Tufaro’s option awards expired before December 31, 2023.

(1) Options vested or will vest pro rata, on a monthly basis, over 36 months beginning on their respective grant dates.

Employment Agreements

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Shallcross (the “2022 Shallcross Employment Agreement”) to serve as our Chief Executive Officer and to continue to serve as our Chief Financial Officer.

The 2022 Employment Agreement replaced the prior employment agreement with us that Mr.

Shallcross entered into on December 6, 2018, as amended December 5, 2019 (the “Amended Employment Agreement”).

The 2022 Shallcross Employment Agreement replaced the prior employment agreement with us that Mr.

Shallcross entered into on December 6, 2018, as amended December 5, 2019.

Shallcross has served as our Chief Financial Officer since June 1, 2015, initially pursuant to the terms of a two year employment agreement that we entered with him on April 28, 2015 (the “Initial Shallcross Employment Agreement”) and then pursuant to an employment agreement we entered into with him on December 6, 2018, which replaced the Initial Shallcross Agreement (the “Amended Shallcross Employment Agreement”).

Shallcross does not receive additional compensation for service as our director.

The material terms of the 2022 Shallcross Employment Agreement are set forth below.

Pursuant to the 2022 Employment Agreement, Mr.

Shallcross was initially entitled to an annual base salary of $585,000 which was increased to $614,250 for the year ended December 31, 2023 and increased on December 14, 2023 to $644,963 to reflect a 5% merit increase.

Shallcross is also eligible to recieve an annual cash performance bonus targeted at fifty percent (50%) of his annual base salary as well as discretionary annual equity awards pursuant to the Company’s incentive plans.

The annual bonus will be based upon the assessment of the Board of Mr.

Shallcross’s performance.

The 2022 Employment Agreement also includes confidentiality obligations and inventions assignments by Mr.

The 2022 Shallcross Employment Agreement expired on January 3, 2025.

Pursuant to the 2022 Shallcross Employment Agreement, Mr.

Shallcross was initially entitled to an annual base salary of $585,000 which was increased to $614,250 for the year ended December 31, 2023, increased on December 14, 2023 to $644,963 to reflect a 5% merit increase and increased on December 13, 2024 to $667,526 to reflect a 3.5% merit increase.

Shallcross was also eligible to receive an annual cash performance bonus targeted at fifty percent (50%) of his annual base salary and payable based upon the assessment of the Board of Mr.

Shallcross’s performance, as well as discretionary annual equity awards pursuant to the Company’s incentive plans.

On March 3, 2025, we entered into a new employment agreement with Mr.

Shallcross (the “2025 Shallcross Employment Agreement”) for a term of two years, pursuant to which he continues to serve as our Chief Executive Officer and Chief Financial Officer and continues to receive the same compensation that he received pursuant to the 2022 Shallcross Employment Agreement.

The material terms of each of the 2022 Shallcross Employment Agreement and the 2025 Shallcross Employment Agreement, (collectively, the “Shallcross Employment Agreements”) are set forth below.

The Shallcross Employment Agreements each contain confidentiality obligations and invention assignments by Mr.

Shallcross and non-solicitation and non-competition provisions.

The 2022 Employment Agreement has a stated term of three years but may be terminated earlier pursuant to its terms.

The Shallcross Employment Agreements provide that if Mr.

provided, however, that if his employment is terminated (i) by the us without Cause or by Mr.

Shallcross for Good Reason (as each is defined in the Employment Agreement) then, subject to him executing a general release in form acceptable to the us that becomes effective, in addition to paying the Accrued Obligations, (a) we will continue to pay his then current base salary and if the Executive timely elects continued coverage under COBRA, the Company will continue to provide benefits at least equal to those that were provided at the time of termination for a period of twelve (12) months and (b) all unvested equity awards will vest and he shall have the right to exercise any such vested equity awards until the earlier of eighteen (18) months after termination or the remaining term of the awards;

or (ii) by reason of his death or Disability (as defined in the Employment Agreement), then in addition to paying the Accrued Obligations, Mr.

Shallcross for Good Reason (as each is defined in the Shallcross Employment Agreements) then, subject to him executing a general release in form acceptable to the us that becomes effective, in addition to paying the Accrued Obligations, (a) we will continue to pay his then current base salary and if the Executive timely elects continued coverage under COBRA, we will continue to provide benefits at least equal to those that were provided at the time of termination for a period of twelve (12) months and (b) all unvested equity awards will vest and he shall have the right to exercise any such vested equity awards until the earlier of eighteen (18) months after termination or the remaining term of the awards;

or (ii) by reason of his death or Disability (as defined in the Shallcross Employment Agreements), then in addition to paying the Accrued Obligations, Mr.

Shallcross or his estate would have the right to exercise any vested options until the earlier of six (6) months after termination or the remaining term of the awards.

In such event, if Mr.

The 2022 Employment Agreement provides that upon the closing of a “Change in Control” (as defined in the 2022 Employment Agreement), all unvested options shall immediately vest and the time period that Mr.

The Shallcross Employment Agreements each provide that upon the closing of a “Change in Control” (as defined in the Shallcross Employment Agreements), all unvested options shall immediately vest and the time period that Mr.

Shallcross will have to exercise all vested stock options and other awards that Mr.

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If within one (1) year after the occurrence of a Change in Control, Mr.

Shallcross terminates his employment for “Good Reason” or the Company terminates Mr.

Shallcross terminates his employment for “Good Reason” or we terminate Mr.

Shallcross’s employment for any reason other than death, disability or Cause, Mr.

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(ii) all unreimbursed expenses (if any);

If within two (2) years after the occurrence of a Change in Control, Mr.

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Frank Tufaro, Former Chief Operating Officer,

On March 22, 2022, we entered into an employment agreement with Dr.

Tufaro, as amended on December 15, 2022 (the “Employment Agreement”) to serve as the Chief Operating Officer of the Company, which agreement terminated on May 10, 2023.

The material terms of the Employment Agreement are set forth below.

Pursuant to the Employment Agreement, as amended Dr.

Tufaro was to receive an annual base salary of $393,750 and was eligible to earn an annual performance bonus targeted at forty percent (40%) of his annual base salary.

The annual bonus was to be based upon the assessment of the Company’s Board of Dr.

Tufaro’s performance and the Company’s attainment of targeted goals set by the Board.

In addition, Dr.

Tufaro was eligible to receive annual equity awards pursuant to the Company’s incentive equity plans:

such awards (including the number and type of awards), if any, were at the sole discretion of the Board.

The Employment Agreement also included confidentiality obligations and inventions assignments by Dr.

Tufaro and non-solicitation and non-competition provisions.

The Employment Agreement had a stated term of three (3) years but could be terminated earlier pursuant to its terms.

Tufaro’s employment was terminated for any reason, he or his estate as the case may be, would be entitled to receive the accrued base salary, any unpaid annual bonus earned with respect to any calendar year ending on or preceding the date of termination, vacation pay, expense reimbursement and any other entitlements accrued by him to the extent not previously paid (the “Accrued Obligations”);

provided, however, that if his employment was terminated (i) by the Company without Cause or by Dr.

Tufaro for Good Reason (as each was defined in the Employment Agreement) then in addition to paying the Accrued Obligations, (a) the Company would continue to pay his then current base salary and continue to provide benefits at least equal to those that were provided at the time of termination for a period of six (6) months and (b) all unvested stock options and other equity awards would immediately vest and he would be entitled to exercise any vested equity awards until the earlier of six (6) months after termination or the remaining term of the awards;

or (ii) by reason of his death or Disability (as defined in the Employment Agreement), then in addition to paying the Accrued Obligations, Dr.

Tufaro, or his estate as the case may be, would have the right to exercise any vested options until the earlier of six (6) months after termination or the remaining term of the awards.

Tufaro commenced employment with another employer and became eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits to be provided by the Company as described herein would terminate.

Effective May 10, 2023, the Company entered into a Separation Agreement and Release (the “Separation Agreement”) and a consulting agreement (the “Consulting Agreement”) with Dr.

Tufaro had entered into the Employment Agreement with the Company on March 22, 2022 to serve as our Chief Operating Officer.

In accordance with the terms of the Employment Agreement, the Separation Agreement provides for (i) the payment to Mr.

Tufaro of a total of $196,875, paid in bi-monthly installments, less applicable withholding, for a period of six months, (ii) reimbursement of COBRA coverage for himself, his spouse and other eligible dependents for the lesser of:

six months or until he commences new employment or substantial self-employment, (iii) acceleration of the vesting of his outstanding stock options (the “Option Awards”) and (iv) the extension of the period of time for which Mr.

Tufaro has the right to exercise any vested shares subject to options until the earlier of (a) the expiration date of the Option Awards, or (b) six (6) months from the separation date.

The Separation Agreement contains mutual general releases of claims and non-disparagement provisions.

The Consulting Agreement has a term of six months unless sooner terminated.

Either party may terminate the Consulting Agreement without cause at any time upon thirty days’ prior written notice or with cause immediately.

Tufaro will be compensated a set daily rate for each full day that he provides consulting services, pro-rated for any days services are provided less than eight hours.

Clawback Policy

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The remedies under the clawback policy are in addition to, and not in lieu of, any legal and equitable claims available to the Company.

The clawback policy is annexed to this Annual Report as an exhibit.

The clawback policy is incorporated by reference in this Annual Report as an exhibit.

Company Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

We do not have a formal written policy in place with regard to the timing of awards of options in relation to the disclosure by us of material nonpublic information, the Compensation Committee does not seek to time equity grants to take advantage of information, either positive or negative, about our company that has not been publicly disclosed.

We intend to issue equity grants to our officers and/or directors, if granted, at the same time each year, typically in connection with our last meeting of the Board of Directors each fiscal year.

Option grants are effective on the date the award determination is made by the Compensation Committee, and the exercise price of options is the closing market price of our common stock on the business day of the grant or, if the grant is made on a weekend or holiday, on the prior business day.

During the fiscal year ended December 31, 2024, our Named Executive Officer was not awarded any stock options, and we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

Compensation of Directors

The following table sets forth information for the fiscal year ended December 31, 2023 regarding the compensation of our directors who at December 31, 2023 were not also our Named Executive Officers.

Awards (1)(2)

(1) The amounts in the “Option Awards” column reflect the dollar amounts of the grant date fair value for the financial statement reporting purposes for stock options for the fiscal year ended December 31, 2023 in accordance with ASC 718.

The fair value of the options was determined using the Black-Scholes model.

For a discussion of the assumptions used in computing this valuation, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and Note 5 of the Notes to Consolidated Financial Statements in our Annual Report for the fiscal year ended December 31, 2023.

(2) As of December 31, 2023, the following are the outstanding aggregate number of option awards held by each of our directors who were not also Named Executive Officers:

During 2023, our independent, non-executive Chairman of the Board of Directors received an annual cash retainer of $150,000, each other non-employee member of the Board of Directors received an annual cash retainer of $43,000, all non-employee directors receive an annual cash fee of $7,500, $5,000 and $3,750 for service as a member of the Audit, Compensation and Nominations Committees, respectively, or an additional annual cash fee of $15,000, $10,000 and $7,500 for service as Chairman of the Audit, Compensation and Nominations Committees, respectively.

In addition, each non-employee member of the Board of Directors was issued an option exercisable for 110,000 shares of our common stock, for a term of seven years, vesting monthly over one year of the date of grant.

In setting 2023 compensation for directors, the Compensation Committee relied on a report from Meridian Compensation Partners, LLC.

The following table sets forth information for the fiscal year ended December 31, 2024 regarding the compensation of our directors who at December 31, 2024 were not also our Named Executive Officer.

(1) As of December 31, 2024, the following are the outstanding aggregate number of option awards held by each of our directors who were not also our Named Executive Officer:

Our board members were compensated based on the following policies during 2024:

● Our independent, non-executive Chairman of the Board of Directors received an annual cash retainer of $154,000.

● Other non-employee members of the Board of Directors were entitled to an annual cash retainer of $47,000.

● Non-employee directors were entitled to annual cash fees of $7,500, $5,000 and $3,750 for service as a member of the Audit, Compensation and Nominations Committees, respectively.

● Non-employee directors were entitled to an additional annual cash fee of $15,000, $10,000 and $7,500 for service as Chairman of the Audit, Compensation and Nominations Committees.

In setting 2024 compensation for directors, the Compensation Committee relied on a report prepared by Meridian in December 2023.

Compensation Committee Interlocks

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and (iii) all of our directors and our current executive officer as a group.

All share numbers set forth below reflect the 1-for-25 reverse stock split effected on August 26, 2024.

Shares Owned (2)

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of Shares (3)

Named Executive Officers and Directors

Steven Shallcross (5)

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All current officers and directors as a group (4 persons)

Frank Tufaro (8)

represents less than 1% of our Common Stock

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(2) Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities.

Except as indicated in the footnotes to the table, to the knowledge of the Company, the persons named in the table have sole voting and investment power with respect to all shares of common stock, prefrred stock, options and/or warrants shown as beneficially owned by them, subject to community property laws, where applicable.

Except as indicated in the footnotes to the table, to the knowledge of the Company, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock, preferred stock, options and/or warrants shown as beneficially owned by them, subject to community property laws, where applicable.

Pursuant to the rules of the SEC, the number of shares of our Common Stock deemed outstanding includes shares issuable pursuant to options held by the respective person or group that are currently exercisable or may be exercised within 60 days of March 6, 2025.

We currently have outstanding 275,000 shares of Series C Preferred Stock and 100,000 shares of Series D Preferred Stock convertible, at a conversion price (the “Conversion Price”) of $1.22 per share (subject in certain circumstances to adjustments and to a 4.99% limit on beneficial ownership), into an aggregate of 2,459,016 shares of the common stock.

The shares of Series C Preferred Stock and Series D Preferred Stock had voting rights exclusively with respect to certain corporate actions (name change, increase in authorized shares and adjournment with respect to such proposals), which corporate actions were approved by our stockholders and therefore the Series C Preferred Stock and Series D Preferred Stock no longer have voting rights with respect to such corporate matters and only have voting rights with certain limited actions directly impacting the Series C Preferred Stock and Series D Preferred Stock.

All of the shares of Series C Preferred Stock and Series D Preferred Stock are owned by MSD Credit Opportunity Master Fund, L.P.

MSD Partners, L.P.

(“MSD Partners”) is the investment manager of MSD Credit Opportunity Master Fund, L.P.

MSD Partners (GP), LLC (“MSD GP”), a Delaware limited liability company, is the general partner of MSD Partners.

Each of Gregg R.

Lemkau, Marc R.

Lisker and Brendan Rogers is a manager of, and may be deemed to beneficially own securities beneficially owned by, MSD GP.

The business address of MSD Credit Opportunity Master Fund, L.P.

is One Vanderbilt Avenue, 26 th Floor, New York, New York 10017.

(3) As of March 6, 2025, the Company had 2,782,449 shares of Common Stock outstanding.

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Kraws that are exercisable within the 60-day period following March 6, 2025.

Does not include an additional 64,167 shares issuable upon exercise of options held by Mr.

Kraws that are not exercisable within the 60-day period following March 25, 2024.

(5) Includes 34,331 shares issuable upon exercise of options held by Mr.

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Wolf that are exercisable within the 60-day period following March 6, 2025.

Does not include an additional 64,167 shares issuable upon exercise of options held by Mr.

Wolf that are not exercisable within the 60-day period following March 25, 2024.

(7) Includes 9,900 shares issuable upon exercise of options held by Dr.

Monahan that are exercisable within the 60-day period following March 6, 2025.

Does not include an additional 64,167 shares issuable upon exercise of options held by Dr.

Monahan that are not exercisable within the 60-day period following March 25, 2024.

(8) Includes 80,645 shares of Common Stock owned by Dr.

Tufaro was appointed as our Chief Operating officer on March 22, 2022 and resigned from the Company effective May 10, 2023.

Equity Compensation Plan Information

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2020 Stock Incentive Plan

2010 Stock Incentive Plan

2020 Stock Incentive Plan

Equity compensation plans not approved by stockholders

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Shallcross’ salary was increased to $152,000, earned a bonus of $70,000 and was granted 3,000 option to purchase Common Stock with a value of $30,000.

On December 13, 2024 the Audit Committee approved the compensation of MaryAnn Shallcross of $157,000, a bonus of $45,000.

Director Independence

Our common stock is listed on the NYSE American.

Under the rules of NYSE American, independent directors must comprise a majority of a listed company’s board of directors and all members of our audit, compensation and nominations committees must be independent.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act.

Under the rules of the NYSE American, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In order to be considered to be independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:

(1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

The Board of Directors undertook a review of the independence of the members of the Board of Directors and considered whether any director has a material relationship with our company that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities.

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Monahan and Mr.

Wolf are “independent” as that term is defined under the rules of NYSE American.

Wolf, representing a majority of the members of our Board of Directors, are “independent” as that term is defined under the rules of NYSE American.

See Part III–Item 10 under the heading “Directors, Executive Officers and Corporate Governance” of this Annual Report for additional information related to director independence.

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and A.G.P./Alliance Global Partners, dated February 9, 2021 ((Incorporated by reference to Exhibit 1.2 of the Registrant’s Current Report on Form 8-K filed May 3, 2021)

Amendment No.

2, dated May 2, 2024, to the Amended and Restated At Market Issuance Sales Agreement by and among Theriva Biologics, Inc., and A.G.P./Alliance Global Partners, dated February 9, 2021 (Incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed May 2, 2024)

Placement Agency Agreement, dated as of September 26, 2024, by and between Theriva Biologics, Inc.

and A.G.P./Alliance Global Partners, as placement agent (Incorporated by reference to Exhibit 1.1 of the Registrant’s Current Report on Form 8-K Filed September 30, 2024, File No.

Share Purchase Agreement by and among Theriva Biologics, Inc., VCN Biosciences, S.L.

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Certificate of Change to Articles of Incorporation (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed on October 12, 2022 (File No.

Amended and Restated By-Laws Synthetic Biologics, Inc.

Adopted and Effective October 12, 2022 (Incorporated by reference to Exhibit 3.3 of the Registrant’s Current Report on Form 8-K filed on October 12, 2022 (File No.

Second Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed August 11, 2023, File No.

Certificate of Change filed with the Secretary of State of the State of Nevada on August 22, 2024 (effective as of August 26, 2024) (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed August 26, 2024, File No.

Certificate of Change to the Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed November 1, 2024, File No.

Specimen Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 filed on July 3, 2013, File No.

Form of Warrant issued December 26, 2017 to InSite Communications (Incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 10-Q filed May 5, 2018, File No.

Description of Securities of Theriva Biologics, Inc.

(Incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report Form 10-K filed on March 25, 2024, File No.

Form of Common Warrant (Incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K Filed September 30, 2024, File No.

Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K Filed September 30, 2024, File No.

2007 Stock Incentive Plan (Incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-8 filed January 18, 2008, File No.

9 unchanged sentences

Lease dated April 14, 2015 between Registrant.

and MCC3, LLC (1)

and MCC3, LLC (Incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report Form 10-K filed on March 25, 2024, File No.

Theriva Biologics, Inc.

18 unchanged sentences

Second Amendment to Lease dated May 6, 2021 by and between Registrant and ARE-Maryland No.

50, LLC (Incorporated by reference to Exhibit 10.19 of the Registrant’s Annual Report Form 10-K filed on March 25, 2024, File No.

Employment Agreement with Steven Shallcross dated January 3, 2022 (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on January 4, 2022, File No.

7 unchanged sentences

Employment Agreement with Frank Tufaro dated March 22, 2022 (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on March 23, 2022, File No.

Employment Agreement with Mary Ann Shallcross dated April 8, 2022 (1)

Employment Agreement with Mary Ann Shallcross dated April 8, 2022 (Incorporated by reference to Exhibit 10.26 of the Registrant’s Annual Report Form 10-K filed on March 25, 2024, File No.

Securities Purchase Agreement between Synthetic Biologics Inc.

16 unchanged sentences

and Frank Tufaro (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed on May 11, 2023, File No.

Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K Filed September 30, 2024, File No.

Amendment No.

2 to the Theriva Biologics, Inc.

2020 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed November 1, 2024, File No.

Employment Agreement between Theriva Biologics, Inc.

and Steven A.

Shallcross, dated as of March 3, 2025 (1)

Insider Trading Policy (1)

List of Subsidiaries (1)

List of Subsidiaries (Incorporated by reference to Exhibit 21.1 of the Registrant’s Annual Report on Form 10-K Filed March 25, 2024, File No.

Consent of Independent Registered Public Accounting Firm (BDO USA, P.C.) (1)

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Shallcross, Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 (1)

Clawback Policy (1)

Clawback Policy (Incorporated by reference to Exhibit 97.1 of the Registrant’s Annual Report on Form 10-K Filed March 25, 2024, File No.

Inline XBRL Instance Document (1)

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

What changed 10-K

Item 9A. Controls and Procedures