Whitehawk Therapeutics, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Company’s reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Principal Executive Officer and the Company’s Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In connection with the preparation of this Annual Report on Form 10-K, an evaluation is performed under the supervision and with the participation of the Company’s management, including the Company’s Principal Executive Officer and the Company’s Principal Financial and Accounting Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2020. Based on that evaluation, the Company’s Principal Executive Officer and the Company’s Principal Financial and Accounting Officer conclude whether the Company’s disclosure controls and procedures are effective as of December 31, 2020, at the reasonable assurance level. In connection with this Annual Report on Form 10-K for the year ended December 31, 2020, an evaluation was performed of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2020. Based on that evaluation, the Company’s Principal Executive Officer and the Company’s Principal Financial and Accounting Officer have concluded based upon the evaluation described above that, as of December 31, 2020, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting for us. Internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected. Management conducted an evaluation of the effectiveness, as of December 31, 2020, of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2020. 103 Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. /s/ Joseph Gardner, Ph.D . Joseph Gardner, Ph.D. President and Principal Executive Officer /s/ Regina Marek Regina Marek Vice President Finance and Principal Financial and Accounting Officer March 11, 2021 Item 9B. Other Information. None. 104 PART III Item 10. Directors, Executive Officers and Corporate Governance The following table sets forth certain information concerning our executive officers and directors as of March 8, 2021. Name Age Position(s) Executive Officers Joseph Gardner, Ph.D. 65 President, Principal Executive Officer Regina Marek 52 Vice President, Principal Financial and Accounting Officer Kevin G. Peters, M.D. 64 Chief Scientific Officer and acting Chief Medical Officer Non-Employee Directors Caley Castelein, M.D. 50 Director Cheryl Cohen 55 Director Anupam Dalal, M.D. 49 Director Pravin Dugel, M.D. 57 Director Steven Prelack 63 Director, Chairman Executive Officers Joseph Gardner, Ph.D. has served as Aerpio’s President and Founder since December 2011 and served as our Chief Executive Officer from December 2011 until December 2017. Dr. Gardner co-founded Akebia Therapeutics, Inc., a biopharmaceutical company, in 2007 and has been an Advisor for Akebia since 2013. He served as the Chief Executive Officer, President and as a member of the board of directors of Akebia until September 2013. Prior to that, Dr. Gardner worked in pharmaceutical discovery and development at Procter & Gamble Pharmaceuticals, Inc. for 23 years, including two years in P&G’s health care mergers and acquisition group and 10 years managing discovery licensing. He served as a Director of Chemistry and Intellectual Property Management of the Pharmaceutical Division of Procter & Gamble, and as a Director of Juvenile Diabetes Research Foundation International Inc. Dr. Gardner received his B.S. with honors in Biological Chemistry from Tulane University in 1977, earned his M.S. in Chemistry in 1980 from Utah State University and Ph.D. in 1983 in Medicinal Chemistry from University of Wisconsin. We believe that based on Dr. Gardner’s knowledge of our company, industry and business and his service as our former Chief Executive Officer and President, Dr. Gardner is qualified to serve on our board of directors. Regina Marek has served as Aerpio’s Vice President of Finance and Principal Financial and Accounting Officer since August 2018. From July 2014 to July 2018, Ms. Marek served as vice president, corporate controller and vice president, integration for Milacron Holdings Corp. From 2012 to 2014, Ms. Marek was vice president of internal audit at Macy’s, Inc. and, prior to that she held multiple roles at Owens Corning from 2005 to 2012, including controller of the residential insulation business and director of internal audit for the global composites business. Ms. Marek started her career at Ernst & Young LLP and worked as an auditor and senior manager in the transaction advisory service practice group. Ms. Marek is a licensed and active Certified Public Accountant and received her B.S.B.A in Accounting from John Carroll University and her M.B.A. from Bowling Green State University. Kevin G. Peters, M.D. has served as Aerpio’s Chief Scientific Officer since November 2011 and as acting Chief Medical Officer since May 2019. Dr. Peters guided the development of AKB-9778 and ARP-1536 while at Akebia Therapeutics, Inc., and continues to be in charge of scientific discovery and development for Aerpio. From 2006 to 2010 he served as Group Medical Director of Cardiovascular and Metabolic Disease in Global and Discovery Medicine at Bristol Myers Squibb Co., and from 1998 to 2006 he served as head of Therapeutic Angiogenesis research at P&G Pharmaceuticals Inc. Dr. Peters served as an Associate Professor of Medicine and Pharmacology in the Division of Cardiology at Duke University Medical Center. After receiving his M.D. from the University of Iowa, Dr. Peters completed an internal medicine residency at the University of Minnesota, a clinical fellowship in cardiology at the University of Iowa and a research fellowship as UCSF. He received and B.A. in Biology and Chemistry (double major) Summa Cum Laude from Augustana College. 105 Board Composition Non-Employee Directors Caley Castelein, M.D. has served on Aerpio’s board of directors since March 2017. Dr. Castelein is the Founder and has been a Managing Director for Kearny Venture Partners since 2006. Dr. Castelein is also the Founder and has been the Managing Director for KVP Capital since 2013. He is a director for ViewRay, Boreal and Newbridge Pharmaceuticals. Previously, Dr. Castelein served on the board of directors of Alivecor from April 2015 to March 2020. Dr. Castelein received his M.D. from University of California, San Francisco and his A.B. in Biology from Harvard University. We believe that Dr. Castelein is qualified to serve as a director based on his industry experience and service on multiple company boards. Cheryl Cohen has served on Aerpio’s board of directors since June 2018. Ms. Cohen currently serves as president of CLC Consulting, LLC, a pharmaceutical and biotechnology consulting firm specializing in new product start-up and commercialization, which she incorporated in 2008. From 2011 to 2014, Ms. Cohen served as Chief Commercial Officer of Medivation, Inc., where she established and led the company's commercial organization and was responsible for the U.S. launch of Xtandi® (enzalutamide) for metastatic castration-resistant prostate cancer. Ms. Cohen held leadership roles for over a decade at Johnson & Johnson, including as vice president, strategic commercial group, Health Care Systems, Inc., and as vice president, rheumatology franchise, Centocor, Inc. Ms. Cohen began her career at Solvay Pharmaceuticals, Inc. in a variety of sales positions. Since January 2021, Ms. Cohen has served on the boards of directors of Ignyte Acquisition Corp, MEI Pharma, Inc. and NantKwest, Inc. Previously, she served on the boards of directors of CytRx Corporation from June 2015 to October 2016, Eledon Pharmaceuticals, Inc. (previously Novus Therapeutics) from April 2015 to June 2020 and Vital Therapies, Inc. from July 2015 to April 2019. Ms. Cohen received her B.A. from Saint Joseph College. We believe that Ms. Cohen is qualified to serve as director based on her industry experience and service on multiple company boards. Anupam Dalal, M.D. has served on Aerpio’s board of directors since November 2011. Since August 2016, Dr. Dalal has been working at Acuta Capital. From 2006 to 2016, Dr. Dalal was the Managing Director of Kearny Venture Partners. He was a Founder and Managing Member of KVP Capital. He served as a director of Akebia Therapeutics from 2008 to 2016. Dr. Dalal received an M.D. from the University of California in San Francisco with honors; an M.B.A., with distinction, from Harvard Business School; and a B.A. in Economics, Phi Beta Kappa and highest honors, from the University of California at Berkeley. We believe that Dr. Dalal is qualified to serve as a director based on his industry experience. Pravin U. Dugel, M.D. has served as a member of Aerpio’s board of directors since March 2017. Since April 2020, Dr. Dugel has been the Executive Vice President and Chief Strategy and Business Officer for IVERIC bio, Inc., a publicly traded biopharmaceutical company. Formerly, Dr. Dugel was the Managing Partner of Retinal Consultants of Arizona from 2004 to 2019 and he is a Founding Member of the Spectra Eye Institute. Dr. Dugel is a Clinical Professor at the USC Roski Eye Institute, Keck School of Medicine at the University of Southern California. Dr. Dugel serves on the Advisory Board of Acucela, Inc. and as a member of the Scientific Advisory Board at MacuSight, Inc., Alcon Surgical, Genentech and Novartis. He also serves as a Member of the Medical Advisory Board at TrueVision Systems, Inc. and a Member of the Clinical Advisory Board at Opthea Limited. Dr. Dugel received his M.D. from UCLA School of Medicine and his B.A. from Columbia University. We believe that Dr. Dugel is qualified to serve as a director based on his industry experience and service on multiple boards. Steven Prelack has served on Aerpio’s board of directors since March 2017. Mr. Prelack has been the Chief Operating Officer and Senior Vice President of VetCor, Inc. since 2010. Formerly, he served as a director and audit committee chair at Pieris Pharmaceuticals, Inc. until June 2019 and Galectin Therapeutics Inc. until December 2017. Mr. Prelack is a CPA and has a B.B.A. in Finance and Accounting from the University of Massachusetts, Amherst. We believe that Mr. Prelack is qualified to serve as a director based on his industry experience and service on multiple company boards. Corporate Governance Guidelines The Board has adopted corporate governance guidelines to assist and guide its members in the exercise of its responsibilities. These guidelines should be interpreted in accordance with any requirements imposed by applicable federal or state law or regulation and our Amended and Restated Certificate of Incorporation and bylaws. Our corporate governance guidelines are available on our website at www.aerpio.com. Although these corporate governance guidelines have been approved by the Board, it is expected that these guidelines will evolve over time as 106 customary practice and legal requirements change. In particular, those guidelines that encompass legal, regulatory or exchange requirements as they currently exist will be deemed to be modified as and to the extent that such legal, regulatory or exchange requirements are modified. In addition, the guidelines may also be amended by the Board at any time as it deems appropriate. Code of Business Conduct and Ethics We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our code of business conduct and ethics is available on our website, which is located at www.aerpio.com. We intend to disclose any amendments to the code, or any waivers of its requirements, on our website or in a current report on Form 8-K as may be required by law. Compensation Risk Assessment We believe that although a portion of the compensation provided to our executive officers and other employees is performance-based, our executive compensation program does not encourage excessive or unnecessary risk taking. Our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals, in particular in connection with our pay-for-performance compensation philosophy. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us. Anti-Hedging and Anti-Pledging Policies Our insider trading policies prohibit all directors, executive officers, and certain employees from buying or selling derivatives on our securities, engaging in hedging transactions involving our securities or holding our securities in a margin account, and only allow our securities to be pledged as collateral for a loan with the prior approval by the Audit Committee which must have at least two (2) weeks to consider any such request for approval. To date no such requests have been made or approved. Board Structure and Committees Board Composition and Structure Our Amended and Restated Certificate of Incorporation states that the number of directors shall be fixed exclusively by our Board. Each director holds office until his or her successor is duly elected and qualified or until his or her death, resignation or removal. Our Amended and Restated Certificate of Incorporation provides that our directors may be removed only for cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of capital stock of the Company then entitled to vote generally on the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose. Any vacancy on the Board, including a vacancy that results from an increase in the number of directors, may be filled by a vote of the supermajority (66 2/3%) of the directors then in office, even if less than a quorum. Our Amended and Restated Certificate of Incorporation provides that our Board is divided into three classes of directors, with the classes as nearly equal in number as possible. Each of our directors previously identified serves in the class indicated. Subject to any earlier resignation or removal in accordance with the terms of our Amended and Restated Certificate of Incorporation and our bylaws each director will serve for a three year period. Our Class I directors will serve until the 2021 annual meeting of stockholders; our Class II directors will serve until the 2022 annual meeting of stockholders; and our Class III directors will serve until the 2023 annual meeting of stockholders. Any additional directorships resulting from an increase in the number of directors will be apportioned by our Board among the three classes. Director Nomination Process Our Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following: • personal and professional integrity; • ethics and values; 107 • experience in corporate management, such as serving as an officer or former officer of a publicly held company; • experience in the industries in which we compete; • experience as a director or executive officer of another publicly held company; • diversity of expertise and experience in substantive matters pertaining to our business relative to other board members; • conflicts of interest; and • practical and mature business judgment. Our Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. Directors Independence Our securities are listed on the Nasdaq Capital Market which has a requirement that a majority of directors be independent. We evaluate independence by the standards for director independence set forth in the Nasdaq Marketplace Rules. Under such rules, our Board has determined that all members of the Board, except Joseph Gardner, are independent directors. Joseph Gardner is not an independent director under these rules because he is an executive officer of our company. In making such independence determination, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances that our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our Board considered the association of our directors with the holders of more than 5% of our common stock. The composition and functioning of our Board and each of our committees complies with all applicable requirements of the Nasdaq Capital Market and the rules and regulations of the SEC. There are no family relationships among any of our directors or executive officers. Stockholder Recommendations Stockholders may submit recommendations for director candidates to the Nominating and Corporate Governance Committee by sending the individual's name and qualifications in writing to our Secretary at Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242 in accordance with the bylaws of the Company, who will forward all recommendations to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management. Board Leadership Structure and Role of Board in Risk Oversight Board Leadership Structure We have established a role of the chairman of the board, Steven Prelack, we plan to keep this role separated from the role of Principal Executive Officer. We believe that separating these positions allows our Principal Executive Officer to focus on our day-to-day business, while allowing a chairman of the board to lead the Board in its fundamental role of providing advice to and independent oversight of management. Our Board recognizes the time, effort and energy that the Principal Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chairman, particularly as the Board’ oversight responsibilities continue to grow. Our amended and restated by-laws and corporate governance guidelines require that our chairman of the board not be an employee or an executive officer of our company, and our Board believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance. Risk Oversight Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including risks relating to our financial condition, development and commercialization activities, operations, strategic direction and intellectual property as more fully discussed in the section entitled “Risk Factors” located within this Annual Report on Form 10-K for the fiscal year ended December 31, 2020. 108 Management is responsible for the day-to-day management of risks we face, while our Board , as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The role of the Board in overseeing the management of our risks is conducted primarily through committees of the Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees. The full Board (or the appropriate board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on us, and the steps we take to manage them. When a board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chairman of the relevant committee reports on the discussion to the full Board during the committee reports portion of the next board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. Board Meetings and Attendance The Board held 12 meetings during 2020, and each of the incumbent directors of the board attended at least 75% of the aggregate of all meetings of the board and all meetings of committees of our board upon which they served (during the periods that they served) during 2020. The Board regularly holds executive sessions of the independent directors. Executive sessions do not include employee directors or directors who do not qualify as independent under SEC rules. Members of our board are encouraged to attend annual meetings of our stockholders. Seven directors attended the 2020 Annual Meeting of Stockholders. Board Committees We have established the following board committees: audit committee, compensation committee and a nominating and corporate governance committee. Each committee operates pursuant to a charter adopted by our Board. The composition and functioning of all committees comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, SEC rules and regulations, and the Nasdaq Capital Market. The following table sets forth which directors currently serve on each committee of the Board. Name Nominating and Corporate Governance Compensation Audit Caley Castelein, M.D. M M Cheryl Cohen CH M Anupam Dalal, M.D. CH Pravin Dugel M Steven Prelack CH Audit Committee Steven Prelack, Caley Castelein and Cheryl Cohen serve on the Audit Committee, which is chaired by Steven Prelack. Our Board has determined that Steven Prelack, Caley Castelein and Cheryl Cohen are “independent” for Audit Committee purposes as that term is defined in the rules of the SEC and the applicable Nasdaq rules, and each has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. Our Board has designated Steven Prelack as an “Audit Committee financial expert,” as defined under the applicable rules of the SEC. The Audit Committee’s responsibilities include: • appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; • pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; • reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements; 109 • reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; • coordinating the oversight and reviewing the adequacy of our internal control over financial reporting; • establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns; • recommending based upon the audit committee’s review and discussions with management and our independent registered public accounting firm whether our audited financial statements shall be included in our Annual Report on Form 10-K; • monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters; • preparing the audit committee report required by SEC rules to be included in our annual proxy statement; • reviewing all related person transactions for potential conflict of interest situations and making recommendations to our Board regarding all such transactions; and • reviewing quarterly earnings releases. The Audit Committee held four meetings during 2020. A copy of the Audit Committee Charter is available on the Company’s website at www.aerpio.com under the Investors section. Compensation Committee Anupam Dalal and Caley Castelein serve on the Compensation Committee, which is chaired by Anupam Dalal. Our Board has determined that each member of the Compensation Committee is “independent” as defined in the applicable Nasdaq rules. The Compensation Committee’s responsibilities include: • annually reviewing and recommending to the independent directors on the Board the corporate goals and objectives relevant to the compensation of our Chief Executive Officer; • evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and based on such evaluation: (i) recommending to the independent directors on the Board the cash compensation of our Chief Executive Officer and (ii) reviewing and recommending to the independent directors on the Board regarding grants and awards to our Chief Executive Officer under equity-based plans; • reviewing and approving or recommending to the independent directors on the Board the cash compensation of our other executive officers; • reviewing and establishing our overall management compensation, philosophy and policy; • overseeing and administering our compensation and similar plans; • evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules; • reviewing and approving our policies and procedures for the grant of equity-based awards; • reviewing and recommending to the independent directors on the Board the compensation of our directors; • preparing the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement; and • reviewing and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation Committee held no meetings during 2020. A copy of the Compensation Committee Charter is available on the Company’s website at www.aerpio.com under the Investors section. Compensation Consultant As a part of determining compensation for our named executive officers, the compensation committee has engaged Radford, a business unit of Aon plc, as an independent compensation consultant. Radford provides analysis and recommendations to the compensation committee regarding: • trends and emerging topics with respect to executive compensation; • peer group selection for executive compensation benchmarking; • compensation practices of our peer group; 110 • compensation programs for executives and all of our employees; and • stock utilization and related metrics. When requested, Radford consultants attend meetings of the compensation committee, including executive sessions in which executive compensation issues are discussed. Radford reports to the compensation committee and not to management, although Radford meets with management for purposes of gathering information for its analyses and recommendations. In determining to engage Radford, the compensation committee considered the independence of Radford taking into consideration relevant factors, including the absence of other services provided to us by Radford, the amount of fees we paid to Radford as a percentage of Radford’s total revenue, the policies and procedures of Radford that are designed to prevent conflicts of interest, any business or personal relationship of the individual compensation advisors employed by Radford with any of our executive officers, any business or personal relationship the individual compensation advisors employed by Radford have with any member of the compensation committee, and any shares of our stock owned by Radford or the individual compensation advisors employed by Radford. The compensation committee has determined, based on its analysis in light of all relevant factors, including the factors listed above, that the work of Radford and the individual compensation advisors employed by Radford as compensation consultants to the compensation committee has not created any conflicts of interest and that Radford is independent pursuant to the independence standards set forth in the Nasdaq Capital Market listing standards promulgated pursuant to Section 10C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Nominating and Corporate Governance Committee Cheryl Cohen and Pravin Dugel currently serve on the Nominating and Corporate Governance Committee, which was chaired by Cheryl Cohen. Our Board has determined that each member of the Nominating and Corporate Governance Committee is “independent” as defined in the applicable Nasdaq rules. The Nominating and Corporate Governance Committee’s responsibilities include: • developing and recommending to the Board criteria for board and committee membership; • establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders; • reviewing the composition of the Board to ensure that it is composed of members containing the appropriate skills and expertise to advise us; • identifying individuals qualified to become members of the Board; • recommending to the Board the persons to be nominated for election as directors and to each of the Board’s committees; • developing and recommending to the Board a code of business conduct and ethics and a set of corporate governance guidelines; and • overseeing the evaluation of our Board and management. The Nominating and Corporate Governance Committee held no meeting during 2020. A copy of the Nominating and Corporate Governance Committee Charter is available on the Company’s website at www.aerpio.com under the Investors section. Our Board may from time to time establish other committees. 111 Item 11. Executive Compensation. The following summarizes the compensation earned by our executive officers named in the “Summary Compensation Table” below (referred to herein as our “named executive officers”) for the year ending December 31, 2020. This section also discusses the material elements of our executive compensation policies and decisions and important factors relevant to an analysis of these policies and decisions. It provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our named executive officers and is intended to place in perspective the information presented in the following tables and the corresponding narrative. Overview Historically, our executive compensation program has reflected our growth and corporate goals. To date, the compensation of the named executive officers has consisted of a combination of base salary, annual cash bonus, and long-term equity incentive compensation in the form of restricted stock and stock options, and other employee benefits generally available to our employees. The named executive officers are also entitled to certain compensation and benefits upon certain terminations of employment pursuant to their executive employment agreements as described below. The named executive officers for the year ended December 31, 2020 were as follows: • Joseph H. Gardner Ph.D., our President, Founder and Principal Executive Officer • Regina Marek, our Vice President of Finance and Principal Financial and Accounting Officer; • Kevin G. Peters, M.D., our Chief Scientific Officer and acting Chief Medical Officer Elements of Executive Compensation Base Salaries Base salaries for the named executive officers are determined annually by the compensation committee, subject to review and approval by the Board, based on the scope of each officer’s responsibilities along with his respective experience and contributions during the prior year. When reviewing base salaries, the compensation committee takes factors into account such as each officer’s experience and individual performance, our performance as a whole, data from surveys of compensation paid by comparable companies, and general industry conditions, but does not assign any specific weighting to any factor. Annual Cash Bonuses All of the named executive officers participate in the Aerpio Pharmaceuticals, Inc. Senior Executive Cash Incentive Bonus Plan, or the Incentive Plan, which promotes and rewards the executives for the achievement of key strategic and business goals. The 2020 Incentive Plan period covered the 12-month period beginning on January 1, 2020 and ending on December 31, 2020. For the 2020 Incentive Plan period, the target annual bonus as a percentage of base salary, as determined based on the salary earned throughout the bonus plan period, for each of the named executive officers is further described in the section titled “ Executive Compensation—Employment Agreements .” At the beginning of the 2020 bonus plan period, the Compensation Committee established corporate performance goals, each having a designated weighting, which related to key development, strategic and financial goals of our company. At the end of the 2020 bonus plan period, the Compensation Committee met and evaluated the performance of the Company against the specified performance goals. Based on its evaluation, the Compensation Committee recommended, and the Board approved, that we achieved 50% of our corporate goals. Consequently, the Board approved payment of cash bonuses to the named executive officers for the 2020 bonus plan period in the amounts reported in the “Summary Compensation Table—2020” below. Cash Retention Bonuses On May 14, 2019, the Board approved cash retention payments to its salaried employees, which were paid at the end of the second quarter in fiscal year 2020. Joseph Gardner, President and principal executive officer, Regina Marek, Vice President Finance and principal financial and accounting officer and Kevin Peters Chief Scientific and acting Chief Medical Officer received cash payments of $210,000 $120,000 and $180,000, respectively. The Board approved payment of cash retention bonuses to the named executive officers in the amounts reported in the “Summary Compensation Table—2020” below. 112 Equity Awards The named executive officers have historically participated in Aerpio’s 2011 Equity Incentive Plan, or 2011 Plan, and the Stock Option and Incentive Plan, or 2017 Plan. In March 2020, we made annual equity award grants to each of our named executive officers. We granted Dr. Gardner an option to purchase 155,000 shares of our common stock, Ms. Marek an option to purchase 93,000 shares of our common stock, Dr. Peters an option to purchase 129,000 shares of our common stock each having an exercise price of $0.52 per share, which was the closing price of our stock on the date of grant. These options vest 25% on the first anniversary of the applicable vesting commencement date and then in 36 monthly installments thereafter, in each case subject to the executive continuing to provide services through each such vesting date. These equity awards serve to align the interests of our named executive officers with our stockholders. We believe that equity grants with a time-based vesting feature promote retention because this feature incentivizes our named executive officers to remain in our employment during the vesting period. Other Benefits Our named executive officers are eligible for additional benefits, such as participation in our 401(k) plan, our employee stock purchase plan and basic health benefits that are generally available to all of our employees. Summary Compensation Table – 2020 The following table sets forth information regarding compensation awarded to, earned by or paid to each of the named executive officers for the years ending December 31, 2020 and 2019. Name and Principal Position Year Salary ($) Option Awards ($)(1) Bonus ($)(2) Non-Equity Incentive Compensation ($)(3) All Other Compensation ($) Total ($) Joseph Gardner 2020 432,600 48,427 210,000 108,150 1,646 (4) 590,823 President and Founder, Principal Executive Officer 2019 420,000 510,423 — 199,500 1,069 (4) 1,130,992 Regina Marek 2020 278,100 29,057 120,000 48,668 350 (4) 356,175 VP Finance, Principal Financial and Accounting Officer 2019 244,643 168,866 — 71,708 373 (4) 485,590 Kevin Peters 2020 370,800 40,304 180,000 74,160 1,003 (4) 486,267 Chief Scientific and acting Chief Medical Officer 2019 360,000 450,200 — 136,800 1,069 (4) 948,069 (1) The amounts reported in the Option Awards column represent the grant date fair value of the stock options granted to the named executive officers as of the grant date as computed in accordance with FASB ASC Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 7 to our financial statements for the years ended December 31, 2020 and 2019. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the named executive officers from the options. (2) Amounts represent cash retention bonuses paid in 2020. (3) Amounts represent cash bonuses earned for performance in 2020 and 2019 based upon achievement of corporate performance goals for the respective year. (4) Amounts represent the dollar value of life insurance premiums paid by us on behalf of the named executive officers. 113 Outstanding Equity Awards at December 31, 2020 The following table sets forth information concerning outstanding equity awards for each of the named executive officers as of December 31, 2020: Option Awards Name and Principal Position Vesting Commencement Date Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable (1) Option Exercise Price ($) Option Expiration Date Joseph Gardner 3/16/2020 — 155,000 1 0.52 3/16/2030 President and Founder, 5/14/2019 174,675 174,675 2 1.04 5/14/2029 Principal Executive Officer 2/15/2019 68,750 81,250 1 3.27 2/15/2029 4/23/2018 100,000 50,000 1 3.59 4/23/2028 12/14/2017 135,000 — 1 5.50 12/14/2027 2/18/2014 207,628 — 1 2.11 2/18/2024 3/22/2012 27,727 — 1 1.66 3/22/2022 Regina Marek 3/16/2020 — 93,000 1 0.52 3/16/2030 VP of Finance, Principal 11/4/2019 20,302 23,998 1 0.5588 11/4/2029 Finance and Accounting Officer 5/14/2019 76,650 76,650 2 1.04 5/14/2029 2/15/2019 13,750 16,250 1 3.27 2/15/2029 8/9/2018 46,667 33,333 1 3.49 8/9/2028 Kevin Peters 3/16/2020 — 129,000 1 0.52 3/16/2030 Chief Scientific and acting 5/14/2019 25,031 38,219 1 1.04 5/14/2029 Chief Medical Officer 5/14/2019 133,275 133,275 2 1.04 5/14/2029 2/15/2019 57,292 67,708 1 3.27 2/15/2029 4/23/2018 66,667 33,333 1 3.59 4/23/2028 3/22/2012 1,912 — 1 1.66 3/22/2022 (1) Unless otherwise noted, each option vests 25% on the first anniversary of the vesting commencement date, then vests in 36 equal monthly installments thereafter, such that the option is vested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provide services to the Company through such vesting date. (2) Vests 50% on June 30, 2020, then vests 50% on June 30, 2021, subject to the holder continuing to provide services to the Company through such vesting date. Employment Agreements We have entered into employment agreements with each of our named executive officers and our other executive officers. Each employment agreement provides for “at will” employment, meaning that either we or the officer may terminate the employment relationship at any time without cause. The material terms of the employment agreements and separation agreements with our 2020 named executive officers are described below. The terms “change of control,” “cause” and “good reason” referred to below are defined in the applicable employment agreement or separation agreement. Executive Employment Agreement with Joseph H. Gardner Dr. Gardner entered into an employment agreement with us in March 2017, as amended on October 8, 2017, and further amended on January 31, 2021. Pursuant to his employment agreement, Dr. Gardner receives an annual base salary, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus. For 2020, Dr. Gardner’s base salary was equal to $432,600, and his target incentive compensation equal to 50% of his base salary. Dr. Gardner is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans. 114 Dr. Gardner’s employment agreement provides that, in the event that his employment is terminated by us without cause or he resigns for “good reason”, and subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive ( i ) an amount equal to twelve months of his base salary, (ii) if Dr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Gardner had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Gardner in which Dr. Gardner would have vested if he had remained employed for an additional twelve months. All amounts payable to Dr. Gardner shall be paid in a lump sum. In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Gardner’s employment is terminated by us without cause or Dr. Gardner resigns for good reason, in either case within 15 months following a “change in control”, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to one and a half (1.5) times the sum of both (x) Dr. Gardner’s then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of eighteen (18) months following termination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-based equity awards held by Dr. Gardner. In addition, Dr. Gardner remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have been incorporated by reference into the employment agreement from his prior employment agreement. These restrictive covenants apply during the term of Dr. Gardner’s employment and for one year thereafter. Executive Employment Agreement with Regina Marek Ms. Marek entered into an employment agreement with us in November 2019. Pursuant to her employment agreement, Ms. Marek receives an annual base salary, which is subject to annual review and adjustment, and she is eligible to earn an annual cash incentive bonus. For 2020, Ms. Marek’s base salary was equal to $278,100 and her target annual incentive compensation was equal to 35% of her base salary. Ms. Marek is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans. Ms. Marek’s employment agreement provides that, in the event that her employment is terminated by us without “cause” or Ms. Marek resigns for “good reason”, and subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, she will be entitled to receive (i) an amount equal to twelve months of her base salary, (ii) if Ms. Marek is participating in our group health plan immediately prior to her termination, a monthly cash payment until the earlier of twelve months following termination or the end of Ms. Marek’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Ms. Marek had she remained employed with us, and (iii) acceleration of all time-based equity awards held by Ms. Marek in which Ms. Marek would have vested if she had remained employed for an additional twelve months. All amounts payable to Ms. Marek shall be made in substantially equal installments over twelve months following her termination. In lieu of the payments and benefits described in the preceding paragraph, in the event that Ms. Marek’s employment is terminated by us without cause or Ms. Marek resigns for good reason, in either case within 15 months following a “change in control”, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, she will be entitled to receive (i) a lump sum cash payment equal to one and a half (1.5) times the sum of both (x) Ms. Marek’s then-current base salary (or her base salary in effect immediately prior to the change in control, if higher) plus (y) Ms. Marek’s target annual incentive compensation (or her target annual incentive compensation in effect immediately prior to the change in control, if larger), (ii) if Ms. Marek is participating in our group health plan immediately prior to her termination, a monthly cash payment until the earlier of eighteen (18) months following termination or the end of Ms. Marek’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to her had she remained employed with us and (iii) full acceleration of all time-based equity awards held by Ms. Marek. 115 In addition, Ms. Marek remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have been incorporated by reference into the new employment agreement from her prior employment agreement. These restrictive covenants apply during the term of Ms. Marek’s employment and for one year thereafter. Executive Employment Agreement with Kevin G. Peters, M.D. Dr. Peters entered into an employment agreement with us in March 2017. Pursuant to his employment agreement, Dr. Peters receives an annual base salary, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus. For 2020, Dr. Peters’ base salary was equal to $370,800, and his target incentive compensation equal to 40% of his base salary. Dr. Peters is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans. Dr. Peters’ employment agreement also provided for certain severance arrangements that were superseded in the terms of his transition services agreement as described below. Transition Services Agreement with Kevin G. Peters, M.D. On February 9, 2021, Dr. Peters entered into a transition services agreement with the Company. The transition services agreement provides for Dr. Peters’ departure from his positions as Chief Scientific Officer and Chief Medical Officer of the Company, effective as of the Date of Termination (as defined in the transition services agreement). As a result, Dr. Peters will continue to provide transitional services to the Company until the earlier of March 31, 2021 or the last day of the ongoing trial conducted with MTEC designated RESCUE. Under this transition services agreement, Dr. Peters is entitled to receive a continuation of his current base salary, remain eligible to participate in the Company’s group employee benefit plans and continue to vest in his outstanding equity awards during this transition period. In connection with the ending of his employment, Dr. Peters will receive his current base salary through the Date of Termination, any unused vacation accrued through the Date of Termination, unpaid expense reimbursements, and any vested benefits under any employee benefit plan through the Date of Termination. Additionally, if Dr. Peters complies with the transition services agreement and satisfies the conditions set forth therein, then following the Date of Termination, Dr. Peters will be entitled to receive (i) monthly cash payments in an amount equal to 12 months of his current base salary, (ii) a monthly cash payment for medical and dental benefits in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us for 12 months or for Dr. Peters’ COBRA health continuation period, whichever ends earlier, and (iii) acceleration of vesting on any time-based stock options in which Dr. Peters would have vested if he had remained employed for an additional 12 months. However, in the event that Dr. Peters complies with the transition services agreement and satisfies the conditions set forth therein, and a change in control (as defined in his transition services agreement) occurs prior to his Date of Termination or within three months following the Date of Termination, then in lieu of the severance payments and benefits described in the preceding sentence, Dr. Peters will be entitled to receive: (i) a lump sum in cash in an amount equal to 1.5 times the sum of both Dr. Peters’ current base salary (as defined in his transition services agreement) plus his target annual incentive bonus (as defined in his transition services agreement) for the year in which the termination occurs, (ii) a monthly cash payment for medical and dental benefits in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us for 18 months or for Dr. Peters’ COBRA health continuation period, whichever ends earlier, and (iii) acceleration of vesting on any stock options subject to time-based vesting. This agreement also contains a general release of claims against the Company and a non-disparagement provision. Retirement Plan We offer a 401(k) plan to eligible employees, including our named executive officers. In accordance with this plan, all eligible employees may contribute a percentage of compensation up to a maximum of the statutory limits per year. Company contributions are discretionary. We made no contributions during the year ended December 31, 2020. We intend for the 401(k) plan to qualify, depending on the employee’s election, under Section 401(a) of the Code, so that contributions by employees, and income earned on those contributions, are not taxable to employees until withdrawn from the 401(k) plan. 116 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table contains information about our equity compensation plans as of December 31, 2020. As of December 31, 2020, we had three equity compensation plans, each of which was approved by our stockholders: our 2011 Plan, our 2017 Plan and our Amended and Restated 2017 Employee Stock Purchase Plan. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1)) (1) Equity compensation plans approved by security holders (1) 4,642,240 $ 1.81 3,634,905 (2) Warrants (3) 600,000 Total 5,242,240 3,634,905 (2) (1) Includes the following plans: our 2011 Equity Incentive Plan, our 2017 Stock Option and Incentive Plan and our Amended and Restated 2017 Employee Stock Purchase Plan. (2) Excludes (i) 1,890,052 additional shares of common stock that may be issued pursuant to our 2017 Stock Option and Incentive Plan pursuant to an automatic annual increase effective on January 1, 2021 and (ii) 350,000 additional shares of common stock that may be issued pursuant to our Amended and Restated 2017 Employee Stock Purchase Plan pursuant to an annual increase effective on January 1, 2021. (3) Warrants issued outside of our equity compensation plans. These warrants have an exercise price of $0.486 and are fully vested. 117 Security Ownership of Certain Beneficial Owners and Management The following table sets forth information relating to the beneficial ownership of our common stock at March 8, 2021 by: • each person, or group of affiliated persons, known by us to beneficially own more than 5% of the outstanding shares of our common stock; • each of our directors; • each of our named executive officers; and • all current directors and executive officers as a group. The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days of March 8, 2021 through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by such person. The percentage of shares beneficially owned is computed on the basis of 47,251,319 shares of common stock outstanding as of March 8, 2021. Shares of common stock that a person has the right to acquire within 60 days of March 8, 2021 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficial owner listed in the table is c/o Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242. Shares Beneficially Owned Number Percentage 5% Stockholders: Satter Entities (1) 5,621,835 11.9 % Entities affiliated with OrbiMed Private Investments V, LP(2) 5,193,946 11.0 % The Vanguard Group, Inc. (3) 2,711,579 5.7 % Named Executive Officers and Directors: Steven Prelack(4) 42,800 * Caley Castelein(5) 327,171 * Cheryl Cohen (6) 54,540 * Anupam Dalal(7) 49,533 * Pravin Dugel(8) 66,506 * Joseph Gardner(9) 1,390,028 2.9 % Kevin Peters(10) 669,671 1.4 % Regina Marek(11) 209,331 * All directors and executive officers as a group (8 persons) (12) 2,809,580 5.8 % * Indicates beneficial ownership of less than 1% of the total outstanding common stock. (1) Based solely on a Schedule 13D/A filed with the SEC on November 23, 2020, consists of 5,621,835 shares of common stock that are held by Satter Management Co., L.P., for which Muneer A. Satter has sole voting and dispositive power over all such shares. The address of Satter Management Co., L.P. is 676 North Michigan Avenue, Suite 4000, Chicago, Illinois 60611. 118 (2) Based solely on a Schedule 13D/A filed with the SEC on November 12 , 2020, consists of 5,193,946 shares of common stock owned directly by OrbiMed Private Investments V, LP, or OPI V. OrbiMed Capital GP V LLC, or GP V, is the general partner of OPI V. OrbiMed Advisors LLC, or OrbiMed, pursuant to its authority as the managing member of GP V , may be deemed to indirectly beneficially own the Shares held by OPI V. B y virtue of such relationships, GP V and OrbiMed may be deemed to have voting and investment power over the shares held by OPI V and as a result may be deemed to have beneficial ownership of such shares. Each of GP V and OrbiMed disclaims beneficial ownership of the shares held by OPI V, except to the extent of its pecuniary interest therein, if any. The address of OrbiMed Investments and OrbiMed Associates is c/o OrbiMed Advisors LLC, 601 Lexington Avenue, 54th Floor, New York, New York 10022. (3) Based solely on a Schedule 13G filed with the SEC on February 10, 2021, consists of 2,711,579 shares of common stock that are held by The Vanguard Group, Inc. and its subsidiaries listed on Appendix A of Schedule 13G (collectively, “Vanguard”). According to Schedule 13G, Vanguard had the sole power to dispose of 2,698,373 shares of common stock; the shared power to vote 2,964 shares of common stock; and the shared power to dispose of 13,206 shares of common stock. The address of Vanguard is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. (4) Consists of 42,800 shares of common stock issuable directly to Steven Prelack upon the conversion of options within 60 days of March 8, 2021. (5) Consists of (i) 279,907 shares of common stock held directly by Caley Castelein and (ii) 47,264 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2021. (6) Consists of 54,540 shares of common stock issuable directly to Cheryl Cohen upon the conversion of options within 60 days of March 8, 2021. (7) Consists of (i) 2,269 shares of common stock held directly by Anupam Dalal and (ii) 47,264 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2021. (8) Consists of 66,506 shares of common stock issuable directly to Pravin Dugel upon the conversion of options within 60 days of March 8, 2021. (9) Consists of (i) 453,019 shares of common stock held directly by Joseph Gardner, (ii) 150,000 shares of common stock held in a family trust for the benefit of Dr. Gardner’s children and (iii) 787,009 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2021. (10) Consists of (i) 320,536 shares of common stock held directly by Kevin Peters and (ii) 349,135 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2021. (11) Consists of (i) 11,625 shares of common stock held directly by Regina Marek and (ii) 197,706 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2021. (12) Includes an aggregate of 1,592,224 shares issuable upon exercise of stock options within 60 days of March 8, 2021 held by our executive officers and directors as a group. 119 Item 13. Certain Relationships and Related Transactions, and Director Independence. Director Compensation On March 15, 2017, we adopted a compensation policy for our non-employee directors, or the Director Compensation Program that was designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. Pursuant to the Director Compensation Program, our non-employee directors will receive cash compensation, paid quarterly, as follows: • Each non-employee director will receive an annual cash retainer in the amount of $35,000 per year. • Any non-employee Chairman will receive an additional annual cash retainer in the amount of $25,000 per year. • The chairperson of the audit committee will receive additional annual cash compensation in the amount of $15,000 per year for such chairperson’s service on the audit committee. Each non-chairperson member of the audit committee will receive additional annual cash compensation in the amount of $7,500 per year for such member’s service on the audit committee. • The chairperson of the compensation committee will receive additional annual cash compensation in the amount of $10,000 per year for such chairperson’s service on the compensation committee. Each non-chairperson member of the compensation committee will receive additional annual cash compensation in the amount of $5,000 per year for such member’s service on the compensation committee. • The chairperson of the nominating and corporate governance committee will receive additional annual cash compensation in the amount of $7,000 per year for such chairperson’s service on the nominating and corporate governance committee. Each non-chairperson member of the nominating and corporate governance committee will receive additional annual cash compensation in the amount of $3,500 per year for such member’s service on the nominating and corporate governance committee. Under the Director Compensation Program, upon the director’s initial appointment or election to our Board, each non-employee director will receive an option (the Initial Grant) to purchase shares of our common stock with an aggregate grant date fair value (as defined below) equal to $181,400. In addition, each non-employee director who has been serving as a director for the prior three months and will continue to serve as a director immediately following each annual stockholder meeting, will receive, on the date of such annual stockholder meeting, an option (the Annual Grant) to purchase shares of our common stock with an aggregate grant date fair value equal to $90,700. For purposes of the Initial Grant and the Annual Grant, “grant date fair value” will mean the fair value of an award as of the date of grant as determined in accordance with ASC Topic 718, “ Share-Based Payment ”, using the Black-Scholes pricing model and the valuation assumptions used by the company in accounting for options as of such date of grant. The Initial Grant will vest as to one-third of the shares subject to Initial Grant on each yearly anniversary of the applicable grant date, subject to continued service through each applicable vesting date, and the Annual Grant will fully vest on the earlier of the first anniversary of the applicable grant date or the date of the next annual stockholder meeting, subject to continued service through such vesting date. In June 2020, the Board deemed it appropriate to reduce the value to be received for the 2020 Annual Grant, we granted to each of our non-employee directors as of the date of the 2020 annual meeting of stockholders a fixed number of options to purchase 52,144 shares of our common stock, with a grant date fair value of $39,672. 2020 Director Compensation Table The following table sets forth information for the year ended December 31, 2020, regarding the compensation awarded to, earned by or paid to our non-employee directors as of December 31, 2020. Directors who are also our employees receive no additional compensation for their service as a director. The compensation received by Dr. Gardner as an employee of the Company is presented in “ Executive Compensation—Summary Compensation Table—2020 ”. 120 Name Fees Earned or Paid in Cash($) Option Awards ($)(1) Total($) Caley Castelein, M.D. (2) 45,083 39,672 84,755 Cheryl Cohen (3) 48,617 39,672 88,289 Anupam Dalal, M.D. (4) 45,000 39,672 84,672 Pravin U. Dugel, M.D. (5) 36,808 39,672 76,480 Steven Prelack (6) 62,917 39,672 102,589 Muneer Satter (7) 30,692 — 30,692 Chau Khuong (7) 20,300 — 20,300 (1) The amounts reported in the Option Awards column represent the grant date fair value of the stock options granted to our non-employee directors as of the grant date as computed in accordance with FASB ASC Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 7 to our financial statements for the years ended December 31, 2020 and 2019. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by our non-employee directors from the options. (2) As of December 31, 2020, Dr. Castelein held 94,944 unexercised options. (3) As of December 31, 2020, Ms. Cohen held 116,344 unexercised options. (4) As of December 31, 2020, Dr. Dalal held 94,944 unexercised options. (5) As of December 31, 2020, Dr. Dugel held 114,186 unexercised options, (6) As of December 31, 2020, Mr. Prelack held 94,944 unexercised options. (7) Mr. Satter and Mr. Khuong were board members through June 2020. Amount reflects fees paid to each Mr. Satter and Mr. Khuong through the end of their board service period. Item 14. Principal Accounting Fees and Services. The following table summarizes the fees of Ernst & Young LLP, our independent registered public accounting firm, for each of the last two fiscal years. Year Ended December 31, Fee Category: 2020 2019 Audit fees $ 330,154 $ 280,920 Audit-related fees — — Tax fees 23,400 24,096 All other fees — — Total Fees $ 353,554 $ 305,016 Audit Fees Consist of aggregate fees for professional services provided in connection with the annual audit of our financial statements, the review of our quarterly condensed financial statements, consultation on accounting matters directly related to the audit, and comfort letters, consents and assistance with and review of documented filed with the SEC. Tax Fees Consist of aggregate fees for tax compliance, tax advice and tax planning services including the review and preparation of our federal and state income tax returns. 121 PART IV Item 15. Exhibits, Financial Statements. (a)(1) Financial Statements. The consolidated financial statements required by this item are submitted in a separate section beginning on page 80 of this Annual Report on Form 10-K. (a)(2) Exhibits. The exhibits filed as part of this Annual Report on Form 10-K are set forth on the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K. The Exhibit Index is incorporated herein by reference. 122 Exhibit Index Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 3.2 Amended and Restated By-laws of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.3 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 4.1 Specimen Stock Certificate evidencing shares of common stock (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 14, 2017, File No. 333-217320) 4.2 Form of Warrant Agreements (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 4.3 Description of Registrant’s Securities (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2020, File No. 001-38560) 10.1# 2011 Equity Incentive Plan and forms of award agreements thereunder, assumed in the Merger (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.2# 2017 Stock Option and Incentive Plan and forms of award agreements thereunder (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.3# Amended and Restated 2017 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on December 18, 2017, File No. 000-53057) 10.4# Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.5 Registration Rights Agreement, dated March 15, 2017, by and among the Company and the persons listed on Exhibit A attached thereto (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.6 Subscription Agreement, dated March 15, 2017, by and between the Registrant and the investors party thereto (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.7 Office Lease at 10300 Alliance Road, Cincinnati, OH dated as of September 29, 2009, by and between Akebia Therapeutics, Inc. and Duke Realty Ohio, as amended by the First Lease Amendment dated as of April 23, 2010 by and between Akebia Therapeutics, Inc. and Duke Realty Ohio, as amended by the Second Lease Amendment and Assignment and Assumption of Lease dated as of April 25, 2012 by and between DP Landings Building II, LLC, Akebia Therapeutics, Inc., and Aerpio, as amended by the Third Amendment to Office Lease dated as of February 27, 2015 by and between RT Landings Building II, LLC and Aerpio (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057) 10.8 Fourth Amendment to Office Lease and Assignment and Assumption of Lease dated as of March 29, 2018 by and between Blue Ash Landings Acquisition, LLC and Aerpio (incorporated herein by reference to Exhibit 10.1 to the Company’s 8-K filed with the Securities and Exchange Commission on April 2, 2018, File No. 000-53057)) 10.9 License Agreement dated June 24, 2018, by and between the Registrant and Gossamer Bio, Inc. (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on June 25, 2018 (File No. 000-53057)) 123 10.10# Employment Agreement, dated March 15, 2017, between the Registrant and Joseph H. Gardner (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 14, 2017, File No. 333-217320) 10.11# Employment Agreement, dated as of March 15, 2017, between the Registrant and Kevin G. Peters ( incorporated herein by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 14, 2017, File No. 333-217320) 10.12 First Amendment to Employment Agreement, dated October 8, 2017, by and between the Registrant and Joseph Gardner (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on October 10, 2017, File No. 000-53057) 10.13 Registration Rights Agreement by and among the Registrant and certain former stockholders of Aerpio (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057). 10.14 Senior Cash Incentive Bonus Plan of the Registrant (incorporated herein by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K filed with Securities and Exchange Commission on March 15, 2018, File No. 000-53057). 10.15# Form of Inducement Stock Option Award (incorporated herein by reference to Exhibit 99.1 to the Registrant’s Form S-8 filed with the Securities and Exchange Commission on December 28, 2018 (File No. 333-229089) 10.16# Employment Agreement, effective as of November 6, 2019, by and between the Registrant and Regina Marek (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 7, 2019, File No. 001-38560) 10.17# Second Amendment to Employment Agreement dated January 31, 2021, by and between Registrant and Joseph Gardner (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 1, 2021, File No. 001-38560) 10.18# Transitional Services and Separation Agreement, dated February 9, 2021, by and between the Registrant and Kevin G. Peters (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 16, 2021, File No. 001-38560) 21.1 Subsidiaries of the Registrant (incorporated herein by reference to Exhibit 21.1 to the Company’s 8-K filed with the Securities and Exchange Commission on March 17, 2017, File No. 000-53057). 23.1* Consent of Ernst & Young LLP 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 124 101.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 * Filed herewith. ** Indicates the exhibit is being furnished, not filed, with this report # Indicates a management contract or any compensatory plan, contract or arrangement. Item 16. Form of 10-K Summary We may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary information. 125 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . AERPIO PHARMACEUTICALS, INC. Date: March 11, 2021 By: /s/ Joseph Gardner, Ph.D. Joseph Gardner, Ph.D. President and Principal Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Joseph Gardner, Ph.D President, Founder and Director March 11, 2021 Joseph Gardner, Ph.D. Principal Executive Officer /s/ Regina Marek Vice President Finance and Principal March 11, 2021 Regina Marek Financial and Accounting Officer /s/ Steven Prelack Chairman March 11, 2021 Steven Prelack /s/ Cheryl Cohen Director March 11, 2021 Cheryl Cohen /s/ Caley Castelein, M.D. Director March 11, 2021 Caley Castelein /s/ Anupam Dalal, M.D. Director March 11, 2021 Anupam Dalal /s/ Pravin Dugel, M.D. Director March 11, 2021 Pravin Dugel 126