UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed
by Registrant
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[X]
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Filed
by Party other than Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Materials Pursuant to §240.14a-12
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COCRYSTAL
PHARMA, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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$_____
per share as determined under Rule 0-11 under the Exchange Act.
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
previously paid:
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Form,
Schedule or Registration Statement No.:
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Party:
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(4)
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Date
Filed:
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Cocrystal
Pharma, Inc.
19805
North Creek Parkway
Bothell,
WA 98011
(786)
459-1831
NOTICE
OF 2020 ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 9, 2020
To
the Shareholders of Cocrystal Pharma, Inc.:
We
are pleased to invite you to attend our 2020 Annual Meeting of Shareholders (the “Annual Meeting”). Our Board of Directors
is soliciting the accompanying proxy for use at the Annual Meeting. The Annual Meeting will be held at 2:00 p.m. EST on June 9,
2020. The Annual Meeting is being held to:
1.
elect as directors the five nominees named in the attached proxy statement to serve for a term of office expiring at the 2021
annual meeting of shareholders or until their respective successors are duly elected and qualified;
2.
ratify the selection of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for
the fiscal year ending December 31, 2020; and
3.
transact such other business as may properly come before the Annual Meeting or any adjournments thereof.
Our
Board of Directors has fixed the close of business on April 20, 2020 as the record date for a determination of shareholders entitled
to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.
In
accordance with rules of the SEC, instead of mailing printed copies of our proxy materials to each shareholder of record, we are
furnishing the proxy materials for the Annual Meeting by providing access to these documents on the Internet. A notice of Internet
availability of proxy materials (the “Notice”) is being mailed to our shareholders. We first mailed or delivered the
Notice on or about April 28, 2020. The Notice contains instructions for accessing and reviewing our proxy materials and submitting
a proxy over the Internet. Our proxy materials were made available at www.proxyvote.com on the date that we first mailed or delivered
the Notice. The Notice also contains instructions on how to request our proxy materials in printed form or by e-mail, at no charge.
The Notice contains a control number that you will need to submit a proxy to vote your shares. We encourage shareholders to access
our proxy materials electronically to reduce our impact on the environment.
This
year, our Annual Meeting will be accessible through the Internet. You can attend our Annual Meeting by visiting www.virtualshareholdermeeting.com/COCP2020.
The Annual Meeting will be conducted via live webcast. To be admitted to the Annual Meeting, you must enter the control number
found on your proxy card, voting instruction form or Notice you previously received. We have adopted a virtual format for our
Annual Meeting to protect the health and well-being of our employees, directors, shareholders and other stakeholders in light
of the coronavirus (COVID-19) outbreak. Additionally, we believe that a virtual meeting allows us to make participation accessible
for shareholders from any geographic location with Internet connectivity.
Whether
or not you plan to participate in the Annual Meeting, it is important that you vote your shares. Regardless of the number of shares
you own, please promptly vote your shares by telephone (before the Annual Meeting) or Internet or, if you have received printed
copies of the proxy materials, by marking, signing and dating the proxy card and returning it to the Company in the postage paid
envelope provided.
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By
the Order of the Board of Directors:
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/s/
James Martin
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James
Martin
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Corporate
Secretary
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April
28, 2020
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on June 9, 2020: The Notice, Proxy Statement
and 2019 Annual Report on Form 10-K are available at www.proxyvote.com.
Table
of Contents
Cocrystal
Pharma, Inc.
19805
North Creek Parkway
Bothell,
WA 98011
(786)
459-1831
2020
ANNUAL MEETING OF SHAREHOLDERS
PROXY
STATEMENT
This
proxy statement is being made available to the holders of shares of the voting stock of Cocrystal Pharma, Inc., a Delaware corporation
(“Cocrystal” or the “Company”) in connection with the solicitation of proxies by our Board of Directors
(the “Board”) for use at the 2020 Annual Meeting of Shareholders of Cocrystal (the “Annual Meeting”) to
be held at 2:00 p.m. EST on June 9, 2020. The Annual Meeting will be a virtual meeting via live webcast over the Internet. You
will be able to attend the Annual Meeting, vote your shares and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/COCP2020.
At
the Annual Meeting, the items of business to be voted on are:
1.
To elect as directors the five nominees named in this proxy statement to serve for a term of office expiring at the 2021 annual
meeting of shareholders or until their respective successors are duly elected and qualified;
2.
To ratify the selection of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for
the fiscal year ending December 31, 2020; and
3.
To transact such other business as may properly come before the Annual Meeting or any adjournments thereof.
Why
did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In
accordance with the SEC rules, we may furnish proxy materials, including this proxy statement and our Annual Report on Form 10-K,
to our shareholders by providing access to such documents on the Internet instead of mailing printed copies. Accordingly, we are
sending a notice of Internet availability of proxy materials (the “Notice”) to our shareholders of record and beneficial
holders as of April 20, 2020, which is the record date for the Annual Meeting (the “Record Date”).
How
can I access the proxy materials over the Internet?
The
Notice and proxy card or voting instruction card included with the Proxy Materials will contain instructions on how to view the
proxy materials on the Internet. Electronic copies of this proxy statement and the Annual Report are available at www.proxyvote.com.
Who
is entitled to vote?
Our
Board has fixed the close of business on April 20, 2020 as the record date for a determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournment thereof. On the record date, there were 52,140,699 shares of common
stock issued, outstanding and entitled to vote. Each share of Cocrystal common stock represents one vote that may be voted on
each matter that may come before the Annual Meeting. As of the record date, Cocrystal had issued no preferred stock that
is entitled to vote.
What
is the difference between holding shares as a record holder and as a beneficial owner?
If
your shares are registered in your name with Equity Stock Transfer, our transfer agent, you are the “record holder”
of those shares. If you are a record holder, this Proxy Statement has been provided directly to you by Cocrystal.
If
your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial
owner” of those shares held in “street name.” If your shares are held in street name, these materials have been
forwarded to you by that organization. As the beneficial owner, you have the right to instruct this organization on how to vote
your shares.
Who
may attend the meeting and how do I attend?
Record
holders and beneficial owners may attend the Annual Meeting. This year the Annual Meeting will be held entirely online via live
webcast.
Set
forth below is a summary of the information you need to attend the virtual Annual Meeting:
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Visit
www.virtualshareholdermeeting.com/COCP2020 to access the live webcast;
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Shareholders
can vote electronically and submit questions online while attending the Annual Meeting; To be admitted to the Annual Meeting,
you must enter the control number found on your proxy card, voting instruction Notice you previously received;
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Instructions
on how to attend and participate in the virtual Annual Meeting, including how to demonstrate proof of stock ownership, are
also available at www.virtualshareholdermeeting.com/COCP2020.
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Shareholders
may vote electronically and submit questions online while attending the virtual Annual Meeting.
How
do I vote?
If
you are a shareholder of record, you may vote:
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1.
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By
Internet. The website address for Internet voting is on your Notice.
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2.
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By
phone. Call 1 (800) 690-6903 and follow the instructions on your Notice.
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3.
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By
mail. If you received a paper copy of the proxy materials, mark, date, sign and mail promptly the enclosed proxy card
(a postage-paid envelope is provided for mailing in the United States).
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4.
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In
person: Visit www.virtualshareholdermeeting.com/COCP2020 to vote at the virtual Annual Meeting.
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If
you vote by Internet or phone, please DO NOT mail your proxy card.
If
your shares are held in street name, you may vote:
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1.
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By
Internet. The website address for Internet voting is on your voting instruction form.
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2.
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By
mail. Mark, date, sign and mail promptly the enclosed voting instruction form provided by your bank or broker.
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3.
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In
person: Visit www.virtualshareholdermeeting.com/COCP2020 to vote at the virtual Annual Meeting.
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If
you are a beneficial owner, you must follow the voting procedures of your nominee included with your proxy materials. If your
shares are held by a nominee and you intend to vote at the Annual Meeting, please be ready to demonstrate proof of your beneficial
ownership as of the record date (such as your most recent account statement as of the Record Date, a copy of the voting instruction
form provided by your broker, bank, trustee or nominee, or other similar evidence of ownership) and a legal proxy from your nominee
authorizing you to vote your shares.
What
constitutes a Quorum?
To
carry on the business of the Annual Meeting, we must have a quorum of shareholders present. A quorum is present when a majority
of the outstanding shares of stock entitled to vote, as of the record date, are represented in person or by proxy. Shares owned
by Cocrystal are not considered outstanding or considered to be present at the Annual Meeting. Broker non-votes (because there
are routine matters presented at this Annual Meeting) and abstentions are counted as present for the purpose of determining the
existence of a quorum.
What
happens if Cocrystal is unable to obtain a Quorum?
If
a quorum is not present to transact business at the Annual Meeting or if we do not receive sufficient votes in favor of the proposals
by the date of the Annual Meeting, the persons named as proxies may propose one or more adjournments of the Annual Meeting to
permit solicitation of proxies.
What
if I sign and return my proxy without making any selections?
If
you are the shareholder of record, and you sign and return a proxy card without giving specific voting instructions, then your
shares will be voted “FOR” Proposals 1 and 2. If other matters properly come before the Annual Meeting, the proxy
holders will have the authority to vote your shares at their discretion.
What
if I am a beneficial owner and I do not give the nominee voting instructions?
If
your shares are held in street name, you must instruct the organization that holds your shares how to vote your shares. Such organization
is bound by the rules of the Nasdaq Stock Market regarding whether or not it can exercise discretionary voting power for any particular
proposal in the absence of voting instructions from you. Brokers have the authority to vote shares for which their customers do
not provide voting instructions on certain “routine” matters. A broker non-vote occurs when a nominee who holds shares
for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item
and has not received instructions from the owner of the shares. Broker non-votes are included in the calculation of the number
of votes considered to be present at the meeting for purposes of determining the presence of a quorum.
The
table below sets forth, for each proposal on the ballot, whether a nominee organization can exercise discretion and vote your
shares absent your instructions and if not, the impact of such broker non-vote on the approval of the proposal.
Proposal
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Broker
Discretionary Vote Allowed
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Impact
of Broker Non-Vote
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1.
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Elect the Board of Directors;
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No
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None
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2.
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Ratify the selection of our independent registered public accounting firm for the fiscal year ending December 31, 2020.
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Yes
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None
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As
a result, if you do not provide voting instructions to your nominee organization, your shares will not be voted on Proposal 1.
If
you do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker
non-vote.” Broker non-votes do not count as a vote “FOR” or “AGAINST” any of the proposals.
How
Many Votes are Needed for Each Proposal to Pass?
Proposals
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Vote
Required
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1.
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Elect the Board of Directors.
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Plurality
of shares present and entitled to vote on the matter
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2.
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Ratify the selection of our independent registered public accounting firm for the fiscal year ending December 31, 2020.
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Majority
of the shares present and entitled to vote on the matter
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Election
of Directors. In order to be elected to the Board, each nominee must receive a plurality of the aggregate voting power of
the shares present at the Annual Meeting in person or by proxy and entitled to vote on the election of directors. This means that
the director nominees who receive the highest number of votes “FOR” their election are elected. You may vote “FOR”
all nominees, withhold your votes as to all nominees, or withhold your votes as to specific nominees. Shareholders may only vote
“FOR” or withhold their votes with respect to the election of the nominees to the Board.
Ratification
of the Independent Registered Public Accounting Firm. The affirmative vote of a majority of the shares represented at the
Annual Meeting and entitled to vote on the matter is required for the ratification of the selection of Weinberg & Company,
P.A. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
How
are abstentions treated?
Proposals
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Effect
of Abstentions on the Proposal
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1.
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Elect the Board of Directors;
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Not
applicable
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2.
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Ratify the selection of our independent registered public accounting firm for the fiscal year ending December 31, 2020.
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Against
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Abstentions
will have the same effect as a vote “AGAINST” Proposal 2. Withheld votes will not have any effect on Proposal 1.
What
are the Voting Procedures?
In
voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all
nominees, or withhold your votes as to specific nominees. For Proposal 2, you may vote in favor of or against the proposal, or
you may abstain from voting on the proposal. You should specify your respective choices on the proxy card or your voting instruction
form.
Is
My Proxy Revocable?
If
you are a shareholder of record, you may revoke your proxy and reclaim your right to vote up to and including the day of the Annual
Meeting by giving written notice of revocation to the Corporate Secretary of Cocrystal bearing a later date than your proxy, by
executing and delivering to the Corporate Secretary of Cocrystal a proxy card dated after the date of your proxy, or by voting
in person at the Annual Meeting. All written notices of revocation and other communications with respect to revocations of proxies
should be addressed to: Cocrystal Pharma, Inc., 4400 Biscayne Boulevard, Miami, FL 33137.
If
your shares are held in street name, you may change your vote by following your nominee’s procedures for revoking your proxy
or changing your vote.
Who
is Paying for the Expenses Involved in Preparing and Mailing this Proxy Statement?
All
of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be
paid by Cocrystal. In addition to the solicitation by mail, proxies may be solicited by our officers and regular employees by
telephone or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements
will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the
beneficial owners of the shares held of record by such persons, and we may reimburse such persons for reasonable out of pocket
expenses incurred by them in so doing. We may hire an independent proxy solicitation firm.
What
Happens if Additional Matters are Presented at the Annual Meeting?
Other
than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual
Meeting. If you submit a signed proxy card, the persons named as proxy holders, Messrs. Gary Wilcox and James Martin, will have
the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any reason
any of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your shares “FOR”
such other candidate or candidates as may be properly nominated by the Board.
What
is “householding” and how does it affect me?
Record
holders who have the same address and last name will receive only one copy of Notice or printed proxy materials, unless we are
notified that one or more of these record holders wishes to continue receiving individual copies. This procedure will reduce our
printing costs and postage fees.
If
you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of
Notice or these proxy materials, or if you hold Cocrystal stock in more than one account, and in either case you wish to receive
only a single copy of each of these documents for your household, please contact our Corporate Secretary at: 4400 Biscayne Boulevard,
Miami, FL 33137.
If
you participate in householding and wish to receive a separate copy of these proxy materials, or if you do not wish to continue
to participate in householding and prefer to receive separate copies of these documents in the future, please contact our Corporate
Secretary as indicated above. Beneficial owners can request information about householding from their brokers, banks or other
holders of record.
Do
I Have Dissenters’ (Appraisal) Rights?
Appraisal
rights are not available to Cocrystal shareholders with any of the proposals brought before the Annual Meeting.
Can
a Shareholder Present a Proposal To Be Considered At the 2021 Annual Meeting?
If
you wish to submit a proposal to be considered at the 2021 annual meeting of shareholders, the following is required:
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For
a shareholder proposal to be considered for inclusion in Cocrystal’s Proxy Statement and proxy card for the 2021 annual
meeting of shareholders (the “2021 Annual Meeting”) pursuant to Rule 14a-8 under the Securities Exchange Act of
1934 (the “Exchange Act”) our Corporate Secretary must receive the written proposal no later than December
29, 2020, which is 120 calendar days prior to the anniversary date Cocrystal’s Proxy Statement was released
to shareholders in connection with the Annual Meeting. Such proposals also must comply with SEC regulations under Rule 14a-8
regarding the inclusion of shareholder proposals in company sponsored materials.
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Our
Bylaws include advance notice provisions that require shareholders desiring to recommend or nominate individuals for election
to the Board or who wish to present a proposal at the 2021 Annual Meeting to do so in accordance with the terms of the advance
notice provisions. For a shareholder proposal or a nomination that is not intended to be included in Cocrystal’s Proxy
Statement and proxy card under Rule 14a-8, our Corporate Secretary must receive the written proposal no later than 90 calendar
days prior to the 2021 Annual Meeting; provided, however, that in the event that less than 100 days’ notice
of public disclosure of the date of the meeting is given to shareholders, notice by the shareholder to be timely must be received
no later than the close of business on the tenth day after public disclosure of the 2021 Annual Meeting is made. If a shareholder
fails to meet these deadlines and fails to satisfy the requirements of Rule 14a-8 under the Exchange Act, we may exercise
discretionary voting authority under proxies we solicit to vote on any such proposal as we determine appropriate. Your notice
must contain the specific information set forth in our Bylaws.
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A
nomination or other proposal will be disregarded if it does not comply with the above procedures. All proposals and nominations
should be sent to our Corporate Secretary at 4400 Biscayne Boulevard, Miami, FL 33137.
We
reserve the right to amend our Bylaws and any change will apply to the 2021 Annual Meeting unless otherwise specified in the amendment.
Interest
of Officers and Directors in Matters to Be Acted Upon
Except
in the election to our board of nominees set forth herein, none of the officers or directors have any interest in any of the matters
to be acted upon at the Annual Meeting.
Where
can I find voting results of the Annual Meeting?
We
will announce the results for the proposals voted upon at the Annual Meeting and publish voting results in a Current Report on
Form 8-K filed within four business days after the Annual Meeting.
The
Board Recommends that Shareholders Vote “FOR” Proposals 1 and 2.
PROPOSAL
1.
ELECTION
OF DIRECTORS
Pursuant
to the authority granted to our Board of Directors (the “Board”) under our Bylaws, the Board has fixed the number
of directors constituting the entire Board at five. The Board currently consists of five directors.
Upon
the recommendation of the Corporate Governance and Nominating Committee of the Board, our Board has nominated the five current
directors named below to be elected as directors at the Annual Meeting, each to hold office until the next annual meeting of shareholders
and until his or her successor is duly elected and qualified. Although management does not anticipate that any nominee will be
unable or unwilling to serve as a director, in the event of such an occurrence, proxies may be voted in the discretion of the
persons named in the proxy for a substitute designated by the Board, unless the Board decides to reduce the number of directors
constituting the Board.
The
Board recommends a vote “For” the election of all of the director nominees.
NOMINEES
FOR DIRECTOR
The
following table sets forth information provided by the nominees as of the record date. All of the nominees are currently serving
as directors of Cocrystal. All of the nominees have consented to serve if elected by our shareholders. There are no family relationships
among our directors and executive officers.
Name
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Age
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Position
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Gary
Wilcox
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73
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Chairman
and Chief Executive Officer
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Phillip
Frost
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83
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Director
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Roger
Kornberg
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73
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Director
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Steven
Rubin
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59
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Director
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Anthony
Japour
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60
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Director
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Director
Nominees Biographies
Gary
Wilcox, Ph.D., Chairman and Chief Executive Officer
Dr.
Wilcox has been a director of Cocrystal since January 2, 2014 and has served as the Chief Executive Officer since July 22, 2016.
Dr. Wilcox has served as Chairman since February 1, 2020. From January 2, 2014 until March 11, 2015, Dr. Wilcox served as the
Chairman of the Board (Co-Chairman beginning November 25, 2014) and Chief Executive Officer of Cocrystal. He is a co-founder of
Cocrystal Discovery and served as its Chief Executive Officer from 2008 through March 2015. Since 2012, Dr. Wilcox has been a
director of the Daily Journal Corporation (Nasdaq:DJCO), a publisher of legal newspapers and websites, and a developer of legal
case management software. From 1993 to 2007, Dr. Wilcox served as Executive Vice President of Operations and a member of the Board
of Directors of Icos Corporation (Nasdaq:ICOS), where he played a key role in the development of Cialis, a drug with annual sales
of $2 billion. In 1982, Dr. Wilcox co-founded Ingene Inc. (Nasdaq:IGEI), serving as its Chairman, President and CEO through private
financings, an IPO and a successful merger with XOMA Corporation (Nasdaq:XOMA) in 1989. From 1989-1993 Dr. Wilcox was Vice Chairman
of the Board of Directors and Executive Vice President of Xoma. From 1974 until 1984, Dr. Wilcox was a Professor of Microbiology
and a member of the Molecular Biology Institute at UCLA. He has served on 15 boards of directors including Nasdaq, New York and
London stock exchange companies as well as private technology companies.
Dr.
Wilcox’s qualifications to serve on our Board include his 30 years of experience as an executive in biotechnology companies,
his technical expertise in drug discovery and development, and his public company board of directors experience.
Phillip
Frost, M.D., Director
Dr.
Frost has been a director of Cocrystal since January 2, 2014 and has been a director of Cocrystal Discovery since 2008. He has
served as CEO and Chairman of OPKO Health Inc. (Nasdaq:OPKO) (“OPKO”), a multi-national pharmaceutical and diagnostics
company since March 2007. He has served as a member of the Board of Trustees of the University of Miami since 1983 and was Chairman
from 2001 to 2004. He is on the Advisory Board of the Shanghai Institute for Advanced Immunochemical Studies in China, and The
Florida Council of 100 and is a Trustee of each of the Miami Jewish Home for the Aged and the Mount Sinai Medical Center. He serves
as Chairman of Temple Emanu-El, Governor of Tel Aviv University and is a member of the Executive Committee of The Phillip and
Patricia Frost Museum of Science. Dr. Frost served as a director of Ladenburg Thalmann Financial Services Inc. from 2004 to 2006
and as Chairman from July 2006 until September 2018. Dr. Frost served as Vice Chairman of Teva Pharmaceutical Industries, Limited
(NYSE:TEVA) from January 2006 until February 2015 and as Chairman from March 2010 until December 2014. He previously served as
an Expert Member of the Scientific Advisory Council of the Skolkovo Foundation in Russia. Dr. Frost previously served as Vice
Chairman of Cogint, Inc., now known as Fluent, Inc. (NASDAQ:FLNT), and as a director for Castle Brands (NYSE American:ROX), Sevion
Therapeutics, Inc. prior to its merger with Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX), and TransEnterix, Inc. (NYSE American:TRXC).
Dr. Frost had served as Chairman of the Board of Directors and Chief Executive Officer of IVAX Corporation (“IVAX”)
from 1987 until its acquisition by Teva in January 2006. Dr. Frost was Chairman of the Board of Directors of Key Pharmaceuticals,
Inc. from 1972 until its acquisition by Schering Plough Corporation in 1986. Dr. Frost was a Governor of the American Stock Exchange
from 1992 to 2008 and Co-Vice Chairman from 2001 until its merger with the New York Stock Exchange.
Dr.
Frost has successfully founded several pharmaceutical companies and overseen the development and commercialization of a multitude
of pharmaceutical products. This combined with his experience as a physician and chairman and/or chief executive officer of large
pharmaceutical companies has given him insight into virtually every facet of the pharmaceutical business and drug development
and commercialization process. He is a demonstrated leader with keen business understanding and is uniquely positioned to help
guide our Company.
Roger
Kornberg, Director
Dr.
Kornberg has been a director of Cocrystal since April 15, 2020. Since 1978, Dr. Kornberg has been a professor of structural biology
at Stanford Medical School. Dr. Kornberg is a member of the U.S. National Academy of Sciences and the Winzer Professor of Medicine
in the Department of Structural Biology at Stanford University. In 2006, Dr. Kornberg was awarded the Nobel Prize in Chemistry
in recognition for his studies of the molecular basis of Eukaryotic Transcription, the process by which DNA is copied to RNA.
Dr. Kornberg is also the recipient of several awards, including the 2001 Welch Prize, the highest award granted in the field of
chemistry in the United States, and the 2002 Leopald Mayer Prize, the highest award granted in the field of biomedical sciences
from the French Academy of Sciences. Dr. Kornberg has served as a member of the Board of Directors of Xenetic Biosciences, Inc.
(NasdaqGS:XBIO) since February 2016.
Dr.
Kornberg’s prior experience serving on the boards of directors of large organizations as well as his tremendous scientific
background provides him with the appropriate set of skills to serve as a member of our Board.
Steven
D. Rubin, Director
Mr.
Rubin has been a director of Cocrystal since January 2, 2014 and a director of Cocrystal Discovery since 2008. Mr. Rubin has been
the Executive Vice President of OPKO, since May 2007 and a director of OPKO since February 2007. In addition to OPKO, Mr. Rubin
currently serves on the board of directors of Red Violet, Inc. (NASDAQ CM:RDVT), a software and services company, Non-Invasive
Monitoring Systems, Inc. (OTC US:NIMU), a medical device company, Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX), a clinical stage
biopharmaceutical company dedicated to treating patients suffering from rare and ultra-rare disease caused by premature termination
codon nonsense mutations, Neovasc, Inc. (NASDAQ CM:NVCN), a company that develops and markets medical specialty vascular devices,
and ChromaDex Corp. (NASDAQ CM:CDXC), a science-based, integrated nutraceutical company devoted to improving the way people age.
Mr. Rubin previously served as a director of VBI Vaccines, Inc. (NASDAQ CM:VBIV), a biopharmaceutical company developing next
generation vaccines, BioCardia, Inc.(NASDAQ GS: BCDA), a clinical-stage regenerative medicine company developing novel therapeutics
for cardiovascular diseases, Cogint, Inc. (NASDAQ GM:COGT), now known as Fluent, Inc. (NASDAQ:FLNT), an information solutions
provider focused on the data-fusion market, prior to the spin-off of its data and analytics operations and assets into Red Violet,
Inc., Kidville, Inc. (OTCBB:KVIL), which operates large, upscale facilities, catering to newborns through five-year-old children
and their families and offers a wide range of developmental classes for newborns to five-year-olds, Sevion Therapeutics, Inc.,
prior to its merger with Eloxx Pharmaceuticals, Inc., Dreams, Inc. (NYSE American:DRJ), a vertically integrated sports licensing
and products company, SciVac Therapeutics, Inc. prior to its merger with VBI Vaccines, Inc., Tiger X Medical, Inc. prior to its
merger with BioCardia, Inc., and Castle Brands, Inc. (NYSE American:ROX), a developer and marketer of premium brand spirits. Mr.
Rubin also served as the Senior Vice President, General Counsel and Secretary of IVAX from August 2001 until September 2006.
Mr.
Rubin’s qualifications to serve on our Board include extensive leadership, business, and legal experience, as well as tremendous
knowledge of our business and the pharmaceutical industry generally. He has advised pharmaceutical companies in several aspects
of business, regulatory, transactional, and legal affairs for more than 24 years. His experience as a practicing lawyer, general
counsel, and board member to multiple public companies, including several pharmaceutical and life sciences companies, has given
him broad understanding and expertise, particularly relating to strategic planning and acquisitions.
Anthony Japour, M.D., Director
Dr. Japour has been a director of Cocrystal
since April 4, 2019. From February 2016 through April 2020, Dr. Japour was a medical director at ICON Plc, a global provider of
outsourced development services to the pharmaceutical, biotechnology and medical device industries. Additionally, since November
2006, Dr. Japour has been the principal of Anthony Japour & Associates, Medical and Scientific Consulting, Inc., a consulting
company. From April 2012 until February 2016, Dr. Japour was a medical physician at the Elite Health Medical Group and South Florida
Cardiology Associates P.A. Since January 6, 2020, Dr. Japour has served as a director of OPKO and also serves on the Audit Committee.
Dr. Japour was designated by Dr. Raymond
Schinazi, our principal shareholder, pursuant to the Stockholder Rights Agreement, dated November 24, 2014. Dr. Japour’s
qualifications to serve on our Board of Directors include his over 25 years of experience in the pharmaceutical and biotechnology
businesses. Additionally, Dr. Japour has extensive experience in the clinical trial process.
EXECUTIVE
OFFICERS
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Gary
Wilcox*
|
|
73
|
|
Chairman
and Chief Executive Officer
|
|
|
|
|
|
Sam
Lee
|
|
61
|
|
President
|
|
|
|
|
|
James
Martin
|
|
53
|
|
Chief
Financial Officer
|
*
Dr. Wilcox’s biography is set forth above under “Nominees for Director.”
Sam
Lee, Ph.D., President
Dr.
Lee has served as our President since January 2, 2014. From January 2, 2014 to November 22, 2014, Dr. Lee was a director of Cocrystal.
He is a co-founder of Cocrystal Discovery and has been President and a director of Cocrystal Discovery since 2007. He has over
25 years of anti-infective drug discovery research experience. Prior to being a co-founder of Cocrystal, he managed anti-infective,
oncology, and inflammation drug discovery projects for eight years at ICOS Corporation. Dr. Lee was responsible for incorporating
protein crystallography and structural biology approaches into ICOS research. He received his Ph.D. in Biological Sciences from
the University of Notre Dame, and completed postdoctoral training in viral replication biochemistry with Dr. I. R. Lehman at Stanford
University. While at Stanford, Dr. Lee founded and was Chief Executive Officer of Viral Assays in Cupertino, CA.
James
J. Martin, Chief Financial Officer
Mr.
Martin has served as our Chief Financial Officer since June 1, 2017. Prior to that, from February 23, 2017 through May 30, 2017,
Mr. Martin served as our Interim Chief Financial Officer. Mr. Martin has also served as Chief Financial Officer of Non-Invasive
Monitoring Systems, Inc. (OTC:NIMU) since January 2011. From November 2016 to February 2017, Mr. Martin served as Chief Financial
Officer of Motus GI Holdings, Inc., a privately held medical device company. From September 2014 to November 2016, Mr. Martin
served as Chief Financial Officer of VBI Vaccines Inc. (formerly SciVac Therapeutics, Inc.) (Nasdaq:VBIV), a pharmaceutical development
and manufacturing company. From April 2014 to September 2015, Mr. Martin served as Chief Financial Officer of Vapor Corp, Inc.
(Nasdaq:VPCO), a vaporizer retail and wholesale company. From January 2011 to October 2013, Mr. Martin served as Chief Financial
Officer of SafeStitch prior to its merger with TransEnterix, Inc (NYSE:TRXC).
CORPORATE
GOVERNANCE
Board
Committees and Charters
The
Board and its committees meet and act by written consent from time to time as appropriate. The Board has formed the following
four standing committees: (i) the Audit Committee, (ii) the Compensation Committee, and (iii) the Corporate Governance and Nominating
Committee (the “Nominating Committee”). These committees regularly report on their activities and actions to the Board.
Each
of our Audit, Compensation, and Corporate Governance and Nominating Committees has a written charter. Each of these committee
charters is available through the “Investors” section on our website, which can be found at www.cocrystalpharma.com.
The information on, or that can be accessed through, our website is not incorporated into this Proxy Statement.
The
following table identifies the independent and non-independent current Board and Committee members.
Name
|
|
Independent
|
|
Audit
|
|
Compensation
|
|
Corporate
Governance and Nominating
|
|
|
|
|
|
|
|
|
|
Gary
Wilcox
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phillip
Frost
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony
Japour
|
|
X
|
|
X
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
Roger
Kornberg
|
|
|
|
|
|
X
|
|
Chair
|
|
|
|
|
|
|
|
|
|
Steven
Rubin
|
|
X
|
|
Chair
|
|
Chair
|
|
X
|
All
of the directors, then serving as directors, attended over 75% of the applicable Board and Committee meetings held in 2019.
Board
and Committee Meetings
Our Board held a total of eight meetings during 2019. We have no
formal policy regarding attendance by directors or officers at our shareholder meetings. Dr. Wilcox attended our annual shareholders’
meeting on behalf of the Board and management in 2019.
During
2019, our Audit Committee held a total of four meetings, and the Compensation Committee and the Corporate Governance and
Nominating Committee did not hold any formal meetings.
Independence
Our
Board, in the exercise of its reasonable business judgment, has determined that each of Cocrystal’s directors qualifies
as an independent director pursuant to Rule 5605(a)(2) of Nasdaq Listing Rules and applicable SEC rules and regulations, with
the exception of Dr. Gary Wilcox. In considering Dr. Phillip Frost’s independence, the Board considered the large beneficial
ownership position held by him directly and through entities controlled by him.
Audit
Committee
The
Audit Committee’s primary role is to review our accounting policies and any issues which may arise in the course of the
audit of our financial statements. The Audit Committee selects our independent registered public accounting firm, approves all
audit and non-audit services, and reviews the independence of our independent registered public accounting firm. The Audit Committee
also reviews the audit and non-audit fees of the auditors. Our Audit Committee is also responsible for certain corporate governance
and legal compliance matters including internal and disclosure controls and compliance with the Sarbanes-Oxley Act of 2002.
Our
Board has determined that each member of the Audit Committee meets the enhanced independence requirements to audit committee members
under Rule 5605(c)(2) of Nasdaq Listing Rules and under Rule 10A-3 under the Exchange Act. The Board has also determined that
Steven Rubin is qualified as an Audit Committee Financial Expert, as that term is defined by Item 407(d)(5)(ii) of Regulation
S-K and in compliance with the Sarbanes-Oxley Act of 2002.
Compensation
Committee
The function of the Compensation Committee
is to determine the compensation of our executive officers. The Compensation Committee has the power to set performance targets
for determining periodic bonuses payable to executive officers and may review and make recommendations with respect to shareholder
proposals related to compensation matters. Additionally, the Compensation Committee is responsible for administering our equity
compensation plans including the Cocrystal Pharma, Inc. 2015 Equity Incentive Plan.
The
Compensation Committee may delegate any or all of its duties or responsibilities to a subcommittee, to the extent consistent with
the Company’s Certificate of Incorporation, Bylaws, applicable laws and The Nasdaq Listing Rules.
The
Board has determined that each member of the Compensation Committee, except for Dr. Kornberg, meets the independence requirements
under Rule 5605(a) of Nasdaq Listing Rules and Rule 10C-1 under the Exchange Act.
Corporate
Governance and Nominating Committee
The
responsibilities of the Corporate Governance and Nominating Committee include the identification of individuals qualified to become
Board members, the selection of nominees to stand for election as directors, the oversight of the selection and composition of
committees of the Board, establish procedures for the nomination process including procedures and the oversight of the evaluations
of the Board and management.
The
Board has determined that each member of the Corporate Governance and Nominating Committee, except for Dr. Kornberg, meets the
independence requirements under Rule 5605(a)(2) of Nasdaq Listing Rules.
The
Nominating and Corporate Governance Committee has not established a policy with regard to the consideration of any candidates
recommended by shareholders since no shareholders have made any recommendations. If we receive any shareholder recommended nominations,
the Corporate Governance and Nominating Committee will carefully review the recommendation(s) and consider such recommendation(s)
in good faith. Shareholders who wish to recommend candidates for election to the Board must do so in writing. The recommendation
should be sent to the Secretary of Cocrystal Pharma, Inc., at 4400 Biscayne Boulevard, Miami, FL 33137, and must be in accordance
with our Bylaws with respect to nomination of persons for election to the Board.
The
Nominating and Corporate Governance Committee recommended to the Board that it nominate each of the incumbent directors for election
at the Annual Meeting.
Board
Diversity
While
we do not have a formal policy on diversity, our Board and Nominating and Corporate Governance Committee consider diversity to
include the skill set, background, reputation, type and length of business experience of our board members as well as a particular
nominee’s contribution to that mix. Although there are many other factors, our Board seeks individuals with experience in
the pharmaceutical industry, legal and accounting skills and board experience.
Board
Leadership Structure
Our
Board has determined that its current structure, with a combined Chairman and Chief Executive Officer roles, is in the best interests
of Cocrystal and its shareholders at this time. A number of factors support the leadership structure chosen by the Board, including,
among others:
|
●
|
The
Chief Executive Officer is intimately involved in the day-to-day operations of Cocrystal and is best positioned to elevate
the most critical business issues for consideration by the Board.
|
|
|
|
|
●
|
The
Board believes that having the Chief Executive Officer serve in both capacities allows him to more effectively execute Cocrystal’s
strategic initiatives and business plans and confront its challenges. A combined Chairman and Chief Executive Officer structure
provides us with decisive and effective leadership with clearer accountability to our shareholders. The combined role is both
counterbalanced and enhanced by the effective oversight and independence of our Board. The Board believes that the use of
regular executive sessions of the non-management directors allows it to maintain effective oversight of management.
|
Board
Assessment of Risk
The
Board is actively involved in the oversight of risks that could affect Cocrystal. This oversight is conducted primarily through
the Audit Committee, but the full Board has retained responsibility for general oversight of risks. The Audit Committee considers
and reviews with our independent public accounting firm and management the adequacy of our internal controls, including the processes
for identifying significant risks and exposures, and elicits recommendations for the improvements of such procedures where desirable.
In addition to the Audit Committee’s role, the full Board is involved in oversight and administration of risk and risk management
practices. Members of our senior management have day-to-day responsibility for risk management and establishing risk management
practices, and members of management are expected to report matters relating specifically to the Audit Committee directly thereto,
and to report all other matters directly to the Board as a whole. Members of our senior management have an open line of communication
to the Board and have the discretion to raise issues from time-to-time in any manner they deem appropriate, and management’s
reporting on issues relating to risk management typically occurs through direct communication with directors or committee members
as matters requiring attention arise. Members of our senior management regularly attend portions of the Board’s meetings,
and often discuss the risks related to our business.
The
Board actively interfaces with management on seeking solutions to any perceived risk.
Compensation
Policies and Practices as Related to Risk Management
The
Compensation Committee and management do not believe that the Company maintains compensation policies or practices that are reasonably
likely to have a material adverse effect on the Company. Our employees’ base salaries are fixed in amount and thus we do
not believe that they encourage excessive risk-taking. Our Compensation Committee plans to issue equity grants to employees in
the near future. We believe this will help align our employees’ interests with those of our shareholders.
The
principal risks other than liquidity relate to the results of our research and development activities. We have two senior
executive officers who are actively involved in monitoring our research and development activities.
Code
of Ethics
Our
Board has adopted a Code of Ethics that applies to all of our employees, including our Chief Executive Officer and Chief Financial
Officer, as well as our Board. The Code of Ethics provides written standards that we believe are reasonably designed to deter
wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with
laws, rules and regulations, including insider trading, corporate opportunities and whistle-blowing or the prompt reporting of
illegal or unethical behavior. A copy of our Code of Ethics is available through the “Investors” section on our website,
which can be found at www.cocrystalpharma.com. The information on, or that can be accessed through, our website is not
incorporated herein. In addition, we will provide a copy of the Code of Ethics to any person without charge, upon request. The
request for a copy can be made in writing by contacting our Corporate Secretary jmartin@cocrystalpharma.com.
Shareholder
Communications
Although
we do not have a formal policy regarding communications with our Board, shareholders may communicate with the Board by writing
to the Corporate Secretary of Cocrystal Pharma, Inc. at 4400 Biscayne Boulevard, Miami, FL 33137, or by email at: jmartin@cocrystalpharma.com.
Shareholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded,
as appropriate.
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than 10% of our common stock to
file initial reports of ownership and changes in ownership of our common stock and other equity securities with the SEC. These
individuals are required by the regulations of the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely
on a review of the copies of the forms furnished to us, and written representations from reporting persons that no Forms 5 were
required to report delinquent filings, we believe that all filing requirements applicable to our officers, directors and 10% beneficial
owners were complied with during 2019, except that one Form 4 for Dr. Raymond Schinazi, our former Chairman, reporting
open market purchases was not timely filed due to an administrative error.
Involvement
in Certain Legal Proceedings
On
September 7, 2018, the SEC filed with the United States District Court for the Southern District of New York a complaint against
Dr. Philip Frost, a director and principal stockholder of the Company, a trust Dr. Frost controls and OPKO Health, Inc., a stockholder
of the Company, of which Dr. Frost is the Chief Executive Officer, as well as other defendants named therein. On January 10, 2019,
the District Court entered final judgments against these defendants on their consent without admitting or denying the allegations
set forth in the complaint. Dr. Frost was permanently enjoined from violating a certain anti-fraud provision of the Securities
Act of 1933, future violations of Section 13(d) of the Exchange Act and Rule 13d-1(a) thereunder and participating in penny stock
offerings subject to certain exceptions.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Set
forth below is the description of transactions since January 1, 2018, to which the Company has been a party, in which the amount
involved exceeded $120,000, and in which any of our directors, executive officers, beneficial owners of 5% or more of our common
stock and certain other related persons had a direct or indirect material interest, other than compensation arrangements described
in this Proxy Statement under “Executive Compensation.” Share amounts and stock prices have been adjusted to give
effect to the 1-for-30 reverse stock split effective February 24, 2018.
In
March 2013, the Company entered into a License Agreement (the “License Agreement”) with Emory University (“Emory”),
where Dr. Raymond Schinazi, the Company’s former Chairman and principal shareholder, serves as the Frances Winship Walters
Professor of Pediatrics and Director of the Laboratory of Biochemical Pharmacology. The License Agreement covered the patents
and patent applications for Hepatitis C virus (“HCV”) inhibitors, which are not essential to our HCV program. The
License Agreement included payments due to Emory ranging from $40,000 to $500,000 based on successful achievement of certain drug
development milestones. Additionally, the Company undertook to make royalty payments at 3.5% of net sales due to Emory with a
minimum in year one of $25,000 and increase to $400,000 in year five upon product commercialization. Due to Dr. Schinazi’s
relationship with Emory and his contributions to the intellectual property and technology which are the subject of the license,
he may have had a direct or indirect material interest in the License Agreement. In December 2018, the Company notified Emory
of the termination of the License Agreement, and the License Agreement was terminated in March 2019.
On
November 24, 2017, the Company borrowed $500,000 from each of Dr. Schinazi, the Company’s former Chairman and principal
shareholder, and Brace Pharma Capital, LLC, a company in which Dr. Schinazi serves as a director and has a minority interest,
in exchange for two-year 8% convertible notes each in the principal amount of $500,000 (the “2017 Notes”). On January
31, 2018, the Company borrowed $1,000,000 from OPKO in exchange for a two-year 8% convertible note in the principal amount of
$1,000,000 (the “2018 Note” and together with the 2017 Notes, the “Notes”). In May 2018, pursuant to a
resolution of its two disinterested directors the Company agreed to the conversion of the Notes at a reduced conversion price
of $1.90 per share, which was the offering price in the Company’s previously closed public offering (described below). On
May 10, 2018, Dr. Schinazi’s Note was converted into Common Stock. On May 18, 2018, the remaining Notes were converted into
Common Stock.
On
May 3, 2018, the Company closed an underwritten public offering of 4,210,527 shares of Common Stock at a price to the public of
$1.90 per share (the “Offering”). The gross proceeds from the Offering were approximately $8,000,000. RFS Partners,
LP, a limited partnership controlled by Dr. Raymond Schinazi, the Company’s former Chairman and principal shareholder, invested
approximately $800,000 and Frost Gamma Investments Trust, of which Dr. Phillip Frost, a director of the Company, is the trustee,
invested approximately $200,000 in the Offering.
In
September 2018, the Company leased administrative offices from a limited liability company owned by one of the Company’s
directors and principal shareholder, Dr. Phillip Frost. The lease term is three years with an optional three-year extension. On
an annualized basis, rent expense, including taxes and fees, for this location would be approximately $62,000. The Company paid
a lease deposit of $4,000 and total rent and other expenses paid in connection with this lease was $57,000 and $19,000 for the
years ended December 31, 2019 and 2018, respectively.
See
the Section titled
“Independence” above for disclosure regarding director independence.
EXECUTIVE
COMPENSATION
The
following information is related to the compensation paid, distributed or accrued by us to those persons serving as our Chief
Executive Officer (principal executive officer) during 2019, and our two most highly compensated executive officers other than
the Chief Executive Officer whose total compensation exceeded $100,000. We refer to these persons as the “Named Executive
Officers.”
2019
Summary Compensation Table
Name and Principal Position
|
|
Year
|
|
Salary
($)(1)
|
|
|
Option
Awards
($)(2)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Gary Wilcox
|
|
2019
|
|
|
201,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
201,000
|
|
Chief Executive Officer
|
|
2018
|
|
|
136,952
|
|
|
|
421,400
|
|
|
|
-
|
|
|
|
558,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Martin
|
|
2019
|
|
|
231,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
231,000
|
|
Chief Financial Officer
|
|
2018
|
|
|
230,836
|
|
|
|
316,050
|
|
|
|
-
|
|
|
|
549,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sam Lee
|
|
2019
|
|
|
241,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
241,000
|
|
President
|
|
2018
|
|
|
200,836
|
|
|
|
210,700
|
|
|
|
-
|
|
|
|
411,536
|
|
(1)
|
Salary
amounts reflect amounts earned and paid each year.
|
(2)
|
Reflects
the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the
amounts are discussed in Note 9 of the Company’s audited financial statements for the year ended December 31, 2019 included
in the Company’s Annual Report on Form 10-K.
|
Named
Executive Officers’ Employment Agreements
Gary
Wilcox. Dr. Wilcox has served as the Chief Executive Officer since July 2016. Prior
to that, Dr. Wilcox had served as a senior adviser to the Company pursuant to a letter agreement dated March 31, 2015,
which was not modified upon his appointment as Chief Executive Officer. Under the letter
agreement, Dr. Wilcox’s employment is on an at-will basis and may be terminated by either party, and his annual salary was
$100,000. In September 2018, Dr. Wilcox’s annual salary was increased to $200,000. The letter agreement contains non-competition
and non-disclosure covenants by Dr. Wilcox.
James
Martin. The Company entered into a letter agreement with Mr. Martin effective June 1, 2017. Mr. Martin receives an annual
base salary of $230,000, which is subject to annual review. In addition to the base salary, Mr. Martin is eligible to receive
a discretionary bonus, to the extent approved by the Board.
Sam
Lee. The Company has entered into an employment agreement with Sam Lee, the Company’s President effective January 2,
2014. Pursuant to the terms of his employment agreement, Dr. Lee’s employment is on an at-will basis and may be terminated
by either party. Dr. Lee receives an annual base salary of $260,000, which was increased from $200,000 in May 2019.
Outstanding
Equity Awards at Fiscal Year-End
Listed
below is information with respect to unexercised options that have not vested, and equity incentive plan awards for each named
executive officer outstanding as of December 31, 2019:
Outstanding
Equity Awards At Fiscal Year-End
Name
|
|
Number of Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of Securities Underlying Unexercised Options
(#)
Unexercisable (1)
|
|
|
Equity Incentive
Plan Awards:
Number of Securities
Underlying Unexercised
Unearned Options
(#)
|
|
|
Option
Exercise Price
($)
|
|
|
Option
Expiration Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary Wilcox
|
|
|
62,500
|
|
|
|
137,500
|
|
|
|
–
|
|
|
|
2.78
|
|
|
9/20/28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Martin
|
|
|
46,875
|
|
|
|
103,125
|
|
|
|
–
|
|
|
|
2.78
|
|
|
9/20/28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sam Lee
|
|
|
31,250
|
|
|
|
68,750
|
|
|
|
–
|
|
|
|
2.78
|
|
|
9/20/28
|
|
(1)
|
The
unvested stock options vest in eleven equal installments on the last day of March, June,
September, and December, provided that the optionee continues to serve as a director
and/or officer of the Company on each applicable vesting date.
|
DIRECTOR
COMPENSATION
Compensation
of Directors
In
2019, we did not compensate our directors for the service on our Board.
PROPOSAL
2.
RATIFICATION
OF THE SELECTION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR ENDING December
31, 2020
Our
Audit Committee has selected Weinberg & Company, P.A. (“Weinberg”) as our independent registered public accounting
firm for the fiscal year ending December 31, 2020 and our Board recommends that shareholders vote for the ratification of such
selection. Weinberg has been engaged as our independent registered public accounting firm since April 18, 2019.
Selection
of Cocrystal’s independent registered public accounting firm is not required to be submitted to a vote of the shareholders
of Cocrystal for ratification. However, Cocrystal is submitting this matter to the shareholders as a matter of good corporate
governance. Even if the selection is ratified, the Audit Committee may, in its discretion, appoint a different independent registered
public accounting firm at any time during 2020 if they determine that such a change would be in the best interests of Cocrystal
and its shareholders. If the selection is not ratified, the Audit Committee will consider its options.
A
representative of the Weinberg is not expected to be present at the Annual Meeting.
The
Board recommends a vote “For” the ratification of the selection of Weinberg.
Audit
Committee Report
The
principal purpose of the Audit Committee is to assist the Board in its general oversight of our accounting practices, system of
internal controls, audit processes and financial reporting processes. The Audit Committee is responsible for appointing and retaining
our independent auditor and approving the audit and non-audit services to be provided by the independent auditor. The Audit Committee’s
function is more fully described in its charter.
Our
management is responsible for preparing our financial statements and ensuring they are complete and accurate and prepared in accordance
with generally accepted accounting principles. The independent registered public accounting
firm is responsible for performing an independent audit of our consolidated financial statements and expressing an opinion
on the conformity of those financial statements with generally accepted accounting principles and as to the effectiveness of our
internal control over financial reporting.
The
Audit Committee has:
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reviewed
and discussed the audited financial statements with management;
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met
privately with the independent registered public accounting firm and discussed matters required to be discussed pursuant to
the rules adopted by the Public Company Accounting Oversight Board;
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received
the written disclosures and the letter from the independent registered public accounting firm, as required by the applicable
requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s
communications with the Audit Committee concerning independence, and has discussed its independence with Cocrystal; and
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in
reliance on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial
statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing with the SEC.
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This
report is submitted by the Audit Committee.
Steven
Rubin, Chair
Phillip
Frost
Anthony
Japour
The
above Audit Committee Report is not deemed to be “soliciting material,” is not “filed” with the SEC and
is not to be incorporated by reference in any filings that Cocrystal files with the SEC.
It
is not the duty of the Audit Committee to determine that Cocrystal’s financial statements and disclosures are complete and
accurate and in accordance with generally accepted accounting principles or to plan or conduct audits. Those are the responsibilities
of management and Cocrystal’s independent registered public accounting firm. In giving its recommendation to the Board,
the Audit Committee has relied on: (1) management’s representations that such financial statements have been prepared with
integrity and objectivity and in conformity with GAAP; and (2) the report of Cocrystal’s independent registered public accounting
firm with respect to such financial statements.
Audit
Committee’s Pre-Approval Policies and Procedures
Our
Audit Committee reviews and approves audit and permissible non-audit services performed by our independent registered public accounting
firm, as well as the fees charged for such services. In its review of non-audit service and its appointment of our independent
registered public accounting firm, the Audit Committee considers and considered whether the provision of such services was compatible
with maintaining independence. All of the services provided and fees charged by our principal accountants in 2019 and 2018 were
approved by the Audit Committee in accordance with its pre-approval policy.
All
of the services provided and fees charged by our principal accountant in 2019 and 1018 were approved by the Audit Committee in
accordance with its pre-approval policy.
Change
in Principal Accountants
BDO
USA, LLP (the “Former Auditor”) served as our independent registered public accounting firm from 2014 until April
12, 2019. The reports of the Former Auditor on Cocrystal’s consolidated financial statements for the fiscal years ended
December 31, 2018 and 2017 did not contain any adverse opinion or a disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principle, except that each report contained an explanatory paragraph describing conditions
that raised substantial doubt about Cocrystal’s ability to continue as a going concern. The decision to change accountants
was approved by our Audit Committee.
During
Cocrystal’s two most recent fiscal years and through the Former Auditor’s dismissal, there were no disagreements with
the Former Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of the Former Auditor, would have caused the Former Auditor to make reference
to the subject matter of the disagreements in connection with any reports it would have issued, and there were no “reportable
events” as such term is described in Item 304 of Regulation S-K.
Principal
Accountant Fees and Services
The
following table shows the fees billed (or with respect to the “Audit Fees” expected to be billed) by our principal
accountant for the fiscal years ended December 31, 2019 and 2018.
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2019
($)
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2018
($)
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Audit Fees (1)
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185,000
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315,000
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Audit-Related Fees (2)
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16,100
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15,670
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Tax Fees (3)
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30,000
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21,800
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Total
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231,100
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352,470
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(1)
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Audit
Fees relate to the audits of our annual financial statements and the review of our interim quarterly financial statements.
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(2)
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Audit-Related
fees relate to the assessment of our internal controls.
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(3)
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Tax
Fees relate to professional services rendered by our principal accountant for tax compliance, tax advice and tax planning.
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OTHER
MATTERS
Cocrystal
has no knowledge of any other matters that may come before the Annual Meeting and does not intend to present any other matters
at the Annual Meeting. However, if any other matters shall properly come before the Meeting or any adjournment, the persons soliciting
proxies will have the discretion to vote as they see fit unless directed otherwise.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth the number of shares of our common stock beneficially owned as of the record date by (i) those persons
known by us to be owners of more than 5% of our common stock, (ii) each director and director nominee, (iii) each of our Named
Executive Officers and (iv) all current executive officers and directors of Cocrystal as a group. Unless otherwise specified in
the notes to this table, the address for each person is: c/o Cocrystal Pharma, Inc., 19805 North Creek Parkway, Bothell,
WA.
Beneficial Owner
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Amount of Common Stock Beneficially Owned and Nature of Beneficial Owner (1)
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Percent of Class (1)
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Directors and Named Executive Officers:
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Gary Wilcox (2)
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727,452
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1.4
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%
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James Martin (3)
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121,875
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*
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Sam Lee (4)
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517,515
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1.0
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%
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Phillip Frost (5)
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3,707,556
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7.1
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%
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Anthony Japour (6)
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-
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-
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Roger Kornberg (7)
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542,842
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1.0
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%
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Steven Rubin (8)
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75,739
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*
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All directors and executive officers as a group (7 persons):
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5,692,979
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10.8
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%
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5% Shareholder:
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Frost Gamma Investments Trust (9)
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3,655,265
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7.0
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%
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OPKO Health, Inc. (10)
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2,659,685
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5.1
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%
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Raymond Schinazi (11)
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10,253,456
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19.7
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%
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Sabby Volatility Warrant Master Fund, Ltd. (12)
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3,461,539
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6.6
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%
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CVI Investments, Inc. (13)
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3,461,539
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6.6
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%
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*
Less than 1%.
(1)
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Applicable
percentages are based on 52,140,699 shares of common stock outstanding as of the record date. Beneficial ownership
is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares
of common stock subject to options, warrants, and preferred stock currently exercisable or convertible within 60 days are
deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing
the percentage of any other person. The table includes shares of common stock, options, and warrants exercisable or convertible
into common stock and vested or vesting within 60 days. Unless otherwise indicated in the footnotes to this table, we believe
that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common
stock indicated as beneficially owned by them. The number of shares reported as beneficially owned by former executive officers
and/or directors is based upon a review of the Company’s stock transfer agent records.
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(2)
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Dr.
Wilcox is a Named Executive Officer and a director. Includes 162,500 vested options.
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(3)
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Mr.
Martin is a Named Executive Officer. Represents 121,875 vested options.
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(4)
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Dr.
Lee is a Named Executive Officer. Includes 81,250 vested options.
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(5)
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Dr.
Frost is a director. Includes (i) 3,655,265 shares of common stock held by Frost Gamma Investments Trust and (ii) 52,291 vested
options. Dr. Frost is the trustee of Frost Gamma Investments Trust. Frost Gamma L.P. is the sole and exclusive beneficiary
of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma L.P. The general partner of Frost
Gamma L.P. is Frost Gamma, Inc., and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is the
sole shareholder of Frost-Nevada Corporation. Does not include securities held by OPKO, a corporation of which Dr. Frost is
the Chief Executive Officer and Chairman, concerning the securities of which Dr. Frost does not hold voting and investment
control. Dr. Frost disclaims beneficial ownership of the securities held by Frost Gamma Investments Trust and OPKO except
to the extent of any pecuniary interest therein. Address is 4400 Biscayne Boulevard, Miami, FL 33137.
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(6)
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Dr.
Japour is a director.
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(7)
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Dr.
Kornberg is a director.
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(8)
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Mr.
Rubin is a director. Includes 23,448 shares of common stock and 52,291 vested options.
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(9)
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Dr.
Frost has voting and investment control over the securities held by Frost Gamma Investments Trust. See Footnote 6 above. Address
is 4400 Biscayne Boulevard, Miami, FL 33137.
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(10)
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Represents
(i) 2,626,352 shares of common stock, and (ii) 33,333 warrants. Dr. Frost is the Chief Executive Officer and Chairman of OPKO.
However, he does not hold voting and investment control over, and disclaims beneficial ownership of, the securities held by
OPKO. Address is 4400 Biscayne Boulevard, Miami, FL 33137.
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(11)
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Dr.
Schinazi is our former Chairman. Address is 1860 Montreal Road, Tucker, GA 30084. Includes 995,593 shares of common stock
held by an entity controlled by Dr. Schinazi and (iii) 125,464 vested options.
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(12)
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Based
on a Schedule 13G filed by Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC and Hal Mintz on February 27, 2020,
Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd. Hal Mintz is the Manager of Sabby
Management, LLC and in such capacity has the right to vote and dispose of the securities held by Sabby Volatility Warrant Master
Fund, Ltd. The address of Sabby Volatility Warrant Master Fund, Ltd. is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus
Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands.
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(13)
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Based
on a Schedule 13G filed by CVI Investments, LLC and Heights Capital Management, Inc. on March 6, 2020. Heights Capital
Management, Inc. is the investment manager to CVI Investments, Inc. and in
such capacity may have the right to vote and dispose of the securities held by CVI Investments,
Inc. The address of CVI Investments, LLC is P.O. Box 309GT Ugland House South Church Street, George Town, Grand Cayman KY1-1104,
Cayman Islands.
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Equity
Compensation Plan Information
The
following chart reflects the number of securities granted under equity compensation plans approved and not approved by shareholders
and the weighted average exercise price for such plans as of December 31, 2019.
Name Of Plan
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Number of
securities
to be issued upon
exercise of outstanding
options, warrants and rights
(a)(1)
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Weighted
average
exercise price
of outstanding
options, warrants and rights
(b)($)
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Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
(c)(1)
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Equity compensation plans approved by security holders
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1,174
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5.47
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3,588
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Equity compensation plans not approved by security holders
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Total
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1,174
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3,588
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COCRYSTAL
PHARMA, INC.
19805
North Creek Parkway
Bothell,
WA 98011
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VOTE
BY INTERNET - www.proxyvote.com
Before
The Meeting – Go to www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern
Time on 06/08/2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your
records and to create an electronic voting instruction form.
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During
The Meeting – Go to www.virtualshareholdermeeting.com/COCP2020.
You
may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked
by the arrow available and follow instructions.
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VOTE
BY PHONE - 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on 06/08/2020. Have your
proxy card in hand when you call and then follow the instructions.
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VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing,
c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP
THIS PORTION FOR YOUR RECORDS
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— — — — — — — — — — — — — — — —
— — — — — —
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DETACH
AND RETURN THIS PORTION ONLY
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
COCRYSTAL
PHARMA, INC.
|
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For
All
|
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Withhold
All
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For
All
Except
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|
To
withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the
nominee(s) on the line below.
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The
Board of Directors recommends you vote FOR all listed nominees:
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1.
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Elect
five members of our Board of Directors for a one-year term expiring at the next annual meeting of shareholders.
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[ ]
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[ ]
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[ ]
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____________________________
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Nominees:
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01)
Gary Wilcox
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04)
Steven Rubin
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02)
Phillip Frost
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05)
Anthony Japour
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03)
Roger Kornberg
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The
Board of Directors recommends you vote FOR proposal 2.
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For
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Against
|
Abstain
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2.
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Ratify
the selection of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2020.
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[ ]
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[ ]
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[ ]
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NOTE:
Transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign
in full corporate or partnership name by authorized officer.
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Signature
[PLEASE SIGN WITHIN BOX]
|
|
Date
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Signature
(Joint Owners)
|
|
Date
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Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The
Notice & Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2019 are available at www.proxyvote.com.
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— — — — — — — — — — — — — — — —
— — — — — —
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COCRYSTAL
PHARMA, INC.
Annual
Meeting of Shareholders
June
9, 2020 2:00 PM, ET
This
proxy is solicited on behalf of the Board of Directors
The
shareholder(s) hereby appoint(s) Gary Wilcox and James Martin, or either of them, as proxies, each with the power to appoint his
substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the
shares of common stock of COCRYSTAL PHARMA, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders
to be held at 2:00 PM, ET on June 9, 2020, virtually via live webcast at www.virtualshareholdermeeting.com/COCP2020, and
any adjournment or postponement thereof.
This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted
in accordance with the Board of Directors’ recommendations.
Continued
and to be signed on reverse side
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