Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report
on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The aggregate market value of the registrant’s common stock,
$0.0001 par value per share (“Common Stock”), held by non-affiliates of the registrant, based on the closing sale price of
the registrant’s Common Stock on June 30, 2021, was $30,488,446. Shares of Common Stock held by each officer and director
and by each person who is known to own 10% or more of the outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of March 31, 2022, the registrant had 13,658,722 shares of Common
Stock outstanding.
None.
In accordance with Rule 12b-15 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), Part III, Items 10 through 14 of the Annual Report are hereby amended and
restated in their entirety, and Part IV, Item 15 of the Annual Report is hereby amended and restated in its entirety, for the purpose
of adding new certifications by our principal executive officer and principal financial officer filed herewith. Except as otherwise expressly
set forth in this Amendment, no portion of the Annual Report filed on March 22, 2022 is being amended or updated by this Amendment. Accordingly,
this Amendment should be read in conjunction with the Annual Report and with our filings with the SEC subsequent to the Annual Report.
Unless otherwise noted, (1) the term “Phio” refers
to Phio Pharmaceuticals Corp. and our subsidiary, MirImmune, LLC and (2) the terms “Company,” “we,” “us”
and “our” refer to the ongoing business operations of Phio and MirImmune, LLC, whether conducted through Phio or MirImmune,
LLC.
PART III
Item 10. Executive Officers and Corporate
Governance.
Board of Directors
The size of the Board is currently set at eight directors. Biographical
and other information regarding our directors, whose terms expire at the 2022 Annual Meeting of Stockholders, is set forth below.
Director Name
and Year First Became a Director |
|
Age |
|
|
Position(s) with
the Company |
|
| |
|
|
|
|
|
|
|
| Robert J. Bitterman (2012) |
|
|
71 |
|
|
Chairman of the Board of Directors |
|
| Patricia A. Bradford (2022) |
|
|
71 |
|
|
Director |
|
| Geert Cauwenbergh, Dr. Med. Sc. (2012) |
|
|
68 |
|
|
Director |
|
| Gerrit Dispersyn, Dr. Med. Sc. (2020) |
|
|
47 |
|
|
President, Chief Executive Officer and Director |
|
| H. Paul Dorman (2013) |
|
|
85 |
|
|
Director |
|
| Robert L. Ferrara (2019) |
|
|
71 |
|
|
Director |
|
| Jonathan E. Freeman, Ph.D. (2017) |
|
|
54 |
|
|
Director |
|
| Curtis A. Lockshin, Ph.D. (2013) |
|
|
61 |
|
|
Director |
|
Robert J. Bitterman has served as a member and the
Chairman of our Board since 2012. Mr. Bitterman served as the President and Chief Executive Officer of Cutanea Life Sciences, Inc., a
private company he founded in 2005 that focused on developing innovative technologies to treat diseases and disorders of the skin and
subcutaneous tissue, until its acquisition by Biofrontera, Inc., USA in March 2019. Prior to his role at Cutanea Life Sciences, Inc.,
Mr. Bitterman also held the position of President and Chief Executive Officer of Isolagen, Inc., President and General Manager of Dermik
Laboratories and various positions of increasing responsibility in financial and commercial capacities within Aventis S.A. Mr. Bitterman
holds an A.B. degree in Economics from The College of the Holy Cross and a Master of Business Administration degree from Boston University.
He also holds a Doctor of Humane Letters (Honoris Causa) from the New York College of Podiatric Medicine. Our Governance and Nominating
Committee believes that Mr. Bitterman is qualified to serve as a member of our Board of Directors due to his executive leadership and
his experience in the pharmaceutical industry.
Patricia A. Bradford has served as a member of our Board
since April 27, 2022. Ms. Bradford served as Senior Vice President Global Human Resources at Unisys Corporation, a global information
technology solutions company, where her total service at Unisys spanned from 1982 until her retirement in 2013. Ms. Bradford strategically
globally led all human resource programs and initiatives including talent management at multiple levels of the organization, strengthening
the global management team. Ms. Bradford’s roles at Unisys progressively included all areas of Human Resources, including an overseas
assignment at the Unisys European headquarters where she provided human resources leadership to the region. Prior to Unisys, Ms. Bradford
was employed by Deloitte, an audit, consulting, tax, and advisory services firm, from 1978 to 1982. Ms. Bradford currently maintains a
consulting practice focused on individual coaching for senior executives and high potential employees recommended by management. Ms. Bradford
received a B.S. degree with an emphasis on accounting and statistics from Walsh College and is a Certified Public Accountant. Our Governance
and Nominating Committee believes that Ms. Bradford is qualified to serve as a member of our Board of Directors due to her executive leadership
experience, global business perspective, and financial background.
Geert Cauwenbergh, Dr. Med. Sc. Has served as a member
of our Board since April 2012. He served as our President and Chief Executive Officer from April 2012 to November 2018, and as our Chief
Executive Officer from November 2018 until his retirement in March 2019. Dr. Cauwenbergh served as Chairman and Chief Executive Officer
of RHEI Pharmaceuticals, Inc., a private company that develops and commercializes proprietary drug therapies, from 2008 to 2011. In 2001,
Dr. Cauwenbergh founded Barrier Therapeutics, Inc., a biopharmaceutical company focused on dermatology drug development, until its acquisition
by Stiefel Laboratories, Inc. in 2008. Prior to Barrier Therapeutics, Inc. Dr. Cauwenbergh was employed by Johnson & Johnson for 23
years where he held a number of ascending senior management positions. He currently serves as a director of Legacy Health Care (Switzerland).
Dr. Cauwenbergh received his Doctorate in Medical Sciences from the Catholic University of Leuven, Faculty of Medicine (Belgium), where
he also completed his masters and undergraduate work. Our Governance and Nominating Committee believes that Dr. Cauwenbergh is qualified
to serve as a member of our Board of Directors due to his executive leadership and extensive knowledge and experience in the biotechnology
industry.
Gerrit Dispersyn, Dr. Med. Sc. Has served as a member
of our Board since October 2020. He joined the Company in April 2017 as our Chief Development Officer and became our President and Chief
Executive Officer in March 2019. From 2014 to April 2017, Dr. Dispersyn was the Vice President, Global Head of Clinical Affairs at Integra
LifeSciences Corporation, a world leader in medical technology. Prior to assuming this role, Dr. Dispersyn held the position of Vice President,
Program Management & Clinical Affairs from 2008 to 2014. In these positions, Dr. Dispersyn was responsible for the global strategy
and execution of clinical and product development, clinical operations and medical affairs projects. He received his Doctorate in Medical
Sciences from Maastricht University, Faculty of Medicine (Netherlands), a post-graduate degree in Biomedical Imaging and a Master of Science
degree in Biochemistry, both from the University of Antwerp, Belgium. Our Governance and Nominating Committee believes that Dr. Dispersyn
is qualified to serve as a member of our Board of Directors due to his leadership role as the President and Chief Executive Officer of
our Company and his extensive knowledge and experience in the biotechnology industry.
H. Paul Dorman has served as a member of our Board
since April 2013. Mr. Dorman currently serves as the Chairman and CEO of DFB Pharmaceuticals, a holdings company specializing in investing
in and operating pharmaceutical businesses. From 1990 to 2012, Mr. Dorman also served as the Chairman and CEO of DPT Laboratories, a
contract manufacturer and developer of pharmaceutical products. Prior to acquiring DPT, Mr. Dorman was employed by Johnson & Johnson
for 12 years, where he served in various positions, including Vice President and as a member of the board of directors of several Johnson
& Johnson companies. Prior to Johnson & Johnson, Mr. Dorman was employed by Baxter-Travenol, a large pharmaceuticals
company. Mr. Dorman holds a B.S. degree in Mechanical Engineering from Tulane University and a Juris Doctor of Law from Loyola University.
Our Governance and Nominating Committee believes that Mr. Dorman is qualified to serve as a member of our Board of Directors due to his
executive leadership and business experience in the pharmaceutical industry.
Robert L. Ferrara has served as a member of our Board
since October 2019. He most recently served as the Chief Financial Officer of Cutanea Life Sciences, Inc., a private company focused
on developing innovative technologies to treat diseases and disorders of the skin and subcutaneous tissue, from January 2012 to June
2019. Prior to Cutanea, Mr. Ferrara served as the Chief Financial Officer of Storeroom Solutions Inc., a venture capital financed, technology
enhanced, integrated supply chain solutions company, from 2004 to 2011, and NER Data Products, Inc., an IT service management company,
from 2000 to 2003, as well as holding other senior level financial positions in national and international public companies in the greater
Philadelphia area. Mr. Ferrara received a B.S. in Accounting from Lehigh University and is a Certified Public Accountant. Our Governance
and Nominating Committee believes that Mr. Ferrara is qualified to serve as a member of our Board of Directors due to his financial expertise
and his extensive experience in both publicly traded and venture capital backed companies in a variety of industries, including the life
sciences.
Jonathan E. Freeman, Ph.D. has served has a member of
our Board since June 2017. Dr. Freeman currently serves as the Chief Operating Officer of Anthos Therapeutics Inc., a clinical-stage biopharmaceutical
company developing therapies for cardiovascular patients. Anthos Therapeutics Inc. was launched by Novartis and Blackstone Life Sciences,
a private investment firm, where Dr. Freeman has also served as a Senior Advisor since July 2018. From 2017 to June 2018, Dr. Freeman
held the position of Chief Business Officer of Vedanta Biosciences, a clinical-stage company developing therapies for immune-mediated
diseases. Prior to his role with Vedanta Biosciences, Dr. Freeman was the Senior Vice President of Strategy and Portfolio Management and
Head of Business Development and Licensing at Merck KgaA, a leading science and technology company, from 2008 to 2016. Dr. Freeman received
a Ph.D. in Molecular Pharmacology and Drug Metabolism from the Imperial Cancer Research Fund (now CRUK), an M.A. and First Class Honours
in Biochemistry from Cambridge University and a MBA with a finance major from Webster, St. Louis. Our Governance and Nominating Committee
believes that Dr. Freeman is qualified to serve as a member of our Board of Directors due to his executive leadership and his background
in immunology.
Curtis A. Lockshin, Ph.D. has served as a member
of our Board since April 2013. Dr. Lockshin currently serves as the Chief Scientific Officer of Xenetic Biosciences, Inc., a biopharmaceutical
company focused on the development of novel oncology therapeutics. Prior to this appointment, Dr. Lockshin served as Xenetic Biosciences,
Inc.’s Vice President of Research and Operations from March 2014 to January 2017. From July 2016 to December 2016, Dr. Lockshin
served as Chief Technical Officer of VBI Vaccines, Inc., a company developing vaccines in infectious disease and immuno-oncology. VBI
Vaccines, Inc. merged with SciVac Therapeutics, Inc. and its subsidiary SciVac, Ltd., a commercial-stage biologics and vaccine company,
in July 2016 where Dr. Lockshin had served as its Chief Executive Officer and director since September 2014. Since May 2013, Dr. Lockshin
has also served as President and Chief Executive Officer of Guardum Pharmaceuticals, LLC, a private pharmaceutical company. Dr. Lockshin
holds a S.B. degree in Life Sciences and a Ph.D. in Biological Chemistry from the Massachusetts Institute of Technology. Our Governance
and Nominating Committee believes that Dr. Lockshin is qualified to serve as a member of our Board of Directors due to his scientific
background, his significant industry knowledge and management experience.
Executive Officers
As of the date of this Amendment, we have only one executive officer,
Gerrit Dispersyn, who serves as our President and Chief Executive Officer. Certain biographical information regarding Dr. Dispersyn is
set forth above. There are no family relationships among any of our directors or executive officers.
Audit Committee
We have a separately-designated
standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is comprised
of Messrs. Ferrara (Chairman) and Dorman and Dr. Freeman. All members of the Audit Committee satisfy the current independence and experience
requirements of Rule 10A-3 of the Exchange Act and the current Nasdaq independence standards, and the Board has determined that Mr. Ferrara
is an “audit committee financial expert,” as the SEC has defined that term in Item 407 of Regulation S-K.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies
to all employees, including our principal executive officer, principal financial officer, principal accounting officer or controller,
or persons performing similar functions. Our Code of Business Conduct and Ethics, as well as other corporate governance materials, is
located on our website at www.phiopharma.com. Waivers of our Code of Business Conduct and Ethics may only be granted by the Board
or our Governance and Nominating Committee. We intend to disclose on our website any amendments to, or waivers from, the Code of Business
Conduct and Ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K within four business
days following the date of the amendment or waiver.
Item 11. Executive Compensation.
Our named executive officer with respect to the fiscal year ended
December 31, 2021 is Gerrit Dispersyn, Dr. Med. Sc., who serves as our principal executive officer and principal financial officer.
Summary Compensation Table
The following table sets forth information regarding compensation
earned by our named executive officer during the years ended December 31, 2021 and 2020.
| Name and principal position | |
Year | | |
Salary
($) | | |
Option
awards
($)(1) | | |
Stock
awards
($)(1) | | |
Non-equity
incentive plan
compensation
($)(2) | | |
All other
compensation
($)(3) | | |
Total
($) | |
| Gerrit Dispersyn, Dr. Med. Sc. | |
| 2021 | | |
| 403,390 | | |
| – | | |
| 210,826 | | |
| 136,688 | | |
| 575 | | |
| 751,479 | |
| President and Chief Executive Officer | |
| 2020 | | |
| 386,614 | | |
| – | | |
| – | | |
| 196,000 | | |
| 528 | | |
| 583,142 | |
| (1) |
The amounts shown reflect the grant date fair value of stock options and restricted stock units computed
in accordance with ASC 718 for the indicated year. |
| (2) |
The amounts shown reflect the annual cash bonus earned for performance for each respective year under
the Company’s Incentive Bonus Program. The annual cash bonus for fiscal years 2021 and 2020 was paid in March of the subsequent
year, respectively. |
| (3) |
Represents amounts for the dollar value of life insurance premiums paid. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information regarding outstanding
equity awards as of December 31, 2021 for our named executive officer:
| | |
| |
| Option
Awards | | |
| Stock
Awards | |
| Name | |
Grant Date | |
| Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | |
| Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | |
| Option
Exercise
Price ($) | | |
| Option
Expiration
Date | | |
| Number
of
Shares or
Units of
Stock That
Have Not
Vested (#) | | |
| Market
Value of Shares or
Units of
Stock That
Have Not
Vested ($) | | |
| Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Units of
Stock That
Have Not
Vested (#) | | |
| Equity
Incentive
Plan
Awards:
Market Value of
Unearned
Shares or
Units of
Stock That
Have Not
Vested
($)(1) | |
| Gerrit Dispersyn, | |
4/24/2017 | |
| 173 | | |
| – | | |
| 357.50 | | |
| 4/24/2027 | | |
| – | | |
| – | | |
| – | | |
| – | |
| Dr. Med. Sc.(2) | |
8/1/2018 | |
| 218 | | |
| 73 | | |
| 98.45 | | |
| 8/1/2028 | | |
| – | | |
| – | | |
| – | | |
| – | |
| | |
8/1/2018 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 73 | | |
| 73 | |
| | |
2/13/2019 | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 500 | | |
| 500 | |
| | |
10/24/2019 | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 3,706 | | |
| 3,706 | |
| | |
3/1/2021 | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 68,450 | | |
| 68,450 | |
| (1) |
Value is based on the closing price of $1.00 of the Company’s common stock on December 31, 2021. |
| (2) |
The equity award granted to Dr. Dispersyn in 2017 vested in equal monthly installments over four years. The equity awards
granted to Dr. Dispersyn from 2017 to 2020 vest in equal annual installments over four years and the equity awards granted to Dr.
Dispersyn subsequent to 2020 vest in equal annual installments over three years. |
Nonqualified Deferred Compensation Earnings
We do not have any nonqualified deferred compensation plans.
Base Salary
Effective February 25, 2021, the Compensation Committee approved
an increase in Dr. Dispersyn’s base salary from $392,000 to $405,000. When reviewing and approving our executive compensation arrangements,
the Compensation Committee considers a number of factors, not limited to: the performance of the executive officer to the Company’s
overall performance, the performance of the executive officer against the Company’s corporate objectives, the executive officer’s
skills, experience and qualifications in their role, review of compensation surveys and market compensation data. These factors provide
the framework for decisions regarding the compensation for each executive officer. No single factor is determinative in setting pay levels,
nor was the impact of any factor on the determination of pay levels quantifiable.
Incentive Compensation
Annual Incentive
During 2021, Dr. Dispersyn was eligible to receive an annual incentive
bonus of up to 50% of base salary based upon the achievement of pre-established corporate performance goals. Annual bonuses are based
on the achievement of corporate goals typically comprised of a mix of product development, financial, business development, investor
relations and intellectual property related performance objectives. The corporate goals are approved by the Board of Directors on an
annual basis at the start of each year. Dr. Dispersyn’s bonus is solely based on the level of achievement of the corporate goals.
The Compensation Committee reviewed our achievements against these corporate goals and their assessment of the goals and recommended
funding was recommended to our full Board for approval. After analyzing the Company’s performance and achievement of corporate
goals, the Board of Directors approved an annual incentive bonus of $136,688 for Dr. Dispersyn.
Equity Incentive
We maintain our 2020 Long Term Incentive
Plan (“2020 Plan”) pursuant to which we currently grant restricted stock unit awards to eligible participants. Dr.
Dispersyn received a grant of restricted stock units under this plan in 2021 as disclosed in the Summary Compensation Table and Outstanding
Equity Awards at Fiscal Year-End table above.
Employment and Change of Control Agreements
The following provides descriptions of the employment agreements
currently in effect for our named executive officers:
Gerrit Dispersyn, Dr. Med. Sc.
We entered into an employment agreement with Dr. Dispersyn effective
April 24, 2017 as our Chief Development Officer. As Chief Development Officer, Dr. Dispersyn was entitled to receive an initial base
salary of $285,000 per annum, as well as a performance bonus of up to 30% of his base salary, subject to the achievement of performance
goals to be established annually. In connection with Dr. Dispersyn’s appointment to Chief Development Officer, he received a stock
option entitling him to purchase 173 shares of the Company’s Common Stock, which was subject to vesting in equal monthly installments
over four years following the date of grant.
On March 1, 2019, Dr. Dispersyn was appointed as the Company’s
President and Chief Executive Officer. As President and Chief Executive Officer, Dr. Dispersyn was entitled to an initial base salary
of $380,000 per annum, as well as a performance bonus of up to 50% of his base salary, subject to the achievement of performance goals
to be established annually. As a one-time award in connection with his appointment on March 1, 2019, Dr. Dispersyn received a restricted
stock unit award giving him the conditional right to receive 7,413 shares of Company common stock, which is subject to vesting in equal
annual installments over four years. The award was subject to the Company’s stockholders’ approving an increase in the number
of shares available for issuance under the Company’s 2012 Long Term Incentive Plan (“2012 Plan”), which occurred
on October 24, 2019. Outside of the above-mentioned changes, Dr. Dispersyn’s employment agreement dated April 24, 2017 continues
to remain in full force and effect.
Dr. Dispersyn’s employment agreement provides that, upon
termination of Dr. Dispersyn’s employment without “cause” (as defined therein) by us or by Dr. Dispersyn for “good
reason” (as defined therein), he will be entitled to payment of: (1) any accrued but unpaid salary and unused vacation as of the
date of his termination; (2) six months of salary from the date of termination; and (3) continued participation, at our expense, during
the applicable six-month severance period in our sponsored group medical and dental plans. In the event his employment is terminated
within twelve months following a “change of control” of the Company, he will be entitled to: (x) twelve months of salary
from the date of termination; (y) accelerated vesting of any unvested stock options held by him as to 50% of the unvested option shares
or the portion of the unvested option shares that would have vested over the following twenty-four months, whichever is greater; and
(z) continued participation, at our expense, during the twelve-month severance period in our sponsored group medical and dental plans.
Director Compensation
Non-Employee Director Compensation Policy
We compensate our non-employee directors for their service as a
member of our Board. Each non-employee director is entitled to receive an annual cash retainer of $27,500. The chairs of our Board and
Audit Committee are entitled to receive an additional annual cash retainer of $15,000, the chair of the Compensation Committee is entitled
to receive an additional cash retainer of $5,000 and the chair of the Governance and Nominating Committee is entitled to receive an additional
annual cash retainer of $7,500.
The Compensation Committee and the Board reassess the appropriate
level of equity compensation for non-employee directors on an annual basis. The Compensation Committee and the Board determined to award
10,000 restricted stock units to each non-employee director which vest in full on the one-year anniversary of the respective date of
grant.
Non-employee directors are also reimbursed for their travel and
reasonable out-of-pocket expenses incurred in connection with attending Board and committee meetings and in attending continuing education
seminars, to the extent that attendance is required by the Board or the committee(s) on which that director serves.
Our Board periodically reviews our director compensation program
and may revise the compensation arrangements for our directors from time to time.
Non-Employee Director Compensation Table
The following table shows the compensation to the Company’s
non-employee directors in fiscal year 2021. We compensate our non-employee directors for their
service as a member of our Board. As our only director who is also an employee, Dr. Dispersyn receives no separate compensation for Board
service. Dr. Dispersyn’s compensation is set forth in the Summary Compensation Table.
| Name | |
Fees
Earned or Paid
in Cash ($) | | |
Stock Awards
($)(1)(2) | | |
Total ($) |
| Robert J. Bitterman | |
| 47,500 | | |
| 30,800 | | |
78,300 |
| Geert Cauwenbergh, Dr. Med. Sc. | |
| 27,500 | | |
| 30,800 | | |
58,300 |
| H. Paul Dorman | |
| 27,500 | | |
| 30,800 | | |
58,300 |
| Robert L. Ferrara | |
| 42,500 | | |
| 30,800 | | |
73,300 |
| Jonathan E. Freeman, Ph.D. | |
| 27,500 | | |
| 30,800 | | |
58,300 |
| Curtis A. Lockshin, Ph.D. | |
| 35,000 | | |
| 30,800 | | |
65,800 |
| (1) |
This column represents the total grant date fair value, computed in accordance with ASC 718, of restricted stock units granted
during fiscal year 2021 for each director. |
| (2) |
The restricted stock units granted to non-employee directors vest one year from the date of grant. |
As of December 31, 2021, the aggregate number of shares underlying
stock options and restricted stock units by our non-employee directors is as follows: Robert J. Bitterman — 22 option awards and
10,000 restricted stock units, Geert Cauwenbergh, Dr. Med. Sc.— 709 option awards and 10,096 restricted stock units, H. Paul Dorman
— 19 option awards and 10,000 restricted stock units, Robert L. Ferrara — 10,000 restricted stock units, Jonathan E. Freeman,
Ph.D. — 6 option awards and 10,000 restricted stock units, and Curtis A. Lockshin, Ph.D. — 19 option awards and 10,000 restricted
stock units.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners and Management
Based on information available to us and filings with the SEC,
the following table sets forth certain information regarding the beneficial ownership (as defined by Rule 13d-3 under the Exchange Act)
of our outstanding common stock for (i) each of our directors, (ii) each of our “named executive officers,” as defined in
the Executive Officers section below, (iii) all of our directors and executive officers as a group and (iv) persons known to us to beneficially
own more than 5% of our outstanding common stock. The following information is presented as of March 31, 2022 or such other date as may
be reflected below.
Beneficial ownership and percentage ownership are determined in
accordance with the rules of the SEC and include voting or investment power with respect to shares of stock. This information does not
necessarily indicate beneficial ownership for any other purpose. Under these rules, shares of common stock not outstanding but deemed
beneficially owned by virtue of the right of a person to acquire them as of March 31, 2022, or within 60 days of March 31, 2022, are
deemed outstanding for the purpose of computing the percentage ownership of each person, but are not deemed outstanding for the purpose
of computing the percentage ownership of any other person.
Unless otherwise indicated and subject to applicable community
property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over their
shares of common stock, except for those jointly owned with that person’s spouse. Unless otherwise indicated below, the address
of each person listed on the table is c/o Phio Pharmaceuticals Corp., 257 Simarano Drive, Suite 101, Marlborough, MA 01752.
| | |
Shares Beneficially Owned | |
| Name and Address of Beneficial Owner | |
Number (1)
| | |
Percent of
Class(2)
| |
| Greater than 5% Holders | |
| | | |
| | |
| Intracoastal Capital LLC(3) | |
| 811,832 | | |
| 5.7% | |
| Directors and Named Executive Officers: | |
| | | |
| | |
| Gerrit Dispersyn, Dr. Med. Sc.(4) | |
| 38,907 | | |
| * | |
| Robert J. Bitterman (5) | |
| 15,848 | | |
| * | |
| Patricia A. Bradford | |
| – | | |
| * | |
| Geert Cauwenbergh, Dr. Med. Sc.(6) | |
| 23,348 | | |
| * | |
| H. Paul Dorman(7) | |
| 10,389 | | |
| * | |
| Robert Ferrara | |
| 13,000 | | |
| * | |
| Jonathan E. Freeman, Ph.D. (8) | |
| 10,370 | | |
| * | |
| Curtis A. Lockshin, Ph.D. (9) | |
| 10,385 | | |
| * | |
| All current directors and executive officers as a group (seven persons) | |
| 122,247 | | |
| * | |
| * |
Indicates less than 1%. |
| (1) |
Represents shares of common stock held as of March 31, 2022 plus shares of common stock that may be acquired upon the exercise
of options and warrants within 60 days of March 31, 2022. |
| (2) |
Based on 13,658,722 shares of common stock that were issued and outstanding as of March 31, 2022. Shares not outstanding but
deemed beneficially owned by virtue of the right of a person to acquire them as of March 31, 2022, or within 60 days of March 31,
2022, are treated as outstanding only when determining the ownership and voting power for each person (or all directors and executive
officers as a group). |
| (3) |
Based solely on information set forth in a Schedule 13G/A filed with the SEC on February 11, 2022 by Intracoastal Capital
LLC (“Intracoastal”), Mitchell P. Kopin (“Mr. Kopin”) and Daniel B. Asher (“Mr. Asher”).
Each of Intracoastal, Mr. Kopin and Mr. Asher may be deemed to have beneficial ownership of 811,832 shares of Common Stock consisting
of (i) 214,133 shares of Common Stock issuable upon exercise of a warrant held by Intracoastal, (ii) 231,250 shares of Common Stock
issuable upon exercise of a second warrant held by Intracoastal and (iii) 366,449 shares of Common Stock issuable upon exercise of
a third warrant held by Intracoastal. The foregoing excludes (i) 55,492 shares of Common Stock issuable upon exercise of a fourth
warrant held by Intracoastal and (ii) 4,099 shares of Common Stock issuable upon exercise of a fifth warrant held by Intracoastal
because such warrants contain a blocker provision under which the holder thereof does not have the right to exercise such warrant
to the extent that such exercise would result in beneficial ownership by the holder thereof, together with the holder’s affiliates,
and any other persons acting as a group together with the holder or any of the holder’s affiliates, of more than 4.99% of the
Common Stock. The principal business office of Mr. Kopin and Intracoastal is 245 Palm Trail, Delray Beach, Florida 33483. The principal
business office of Mr. Asher is 111 W. Jackson Boulevard, Suite 2000, Chicago, Illinois 60604. |
| (4) |
Includes 391 stock options exercisable within 60 days of March 31, 2022. |
| (5) |
Includes 22 stock options exercisable within 60 days of March 31, 2022. |
| (6) |
Includes 613 stock options exercisable within 60 days of March 31, 2022. |
| (7) |
Includes 19 stock options exercisable within 60 days of March 31, 2022. |
| (8) |
Includes 6 stock options exercisable within 60 days of March 31, 2022. |
| (9) |
Includes 19 stock options exercisable within 60 days of March 31, 2022. |
Equity Compensation Plan Information
The following table sets forth certain information, as of December
31, 2021, about the securities authorized for issuance under our equity compensation plans, which consisted of our 2020 Plan and our
2013 Employee Stock Purchase Plan. Upon adoption of the 2020 Plan, shares that remained available for grant under our prior 2012 Plan
and shares that were subject to outstanding awards under the 2012 Plan were included in the authorized shares available for grant under
the 2020 Plan. Further, upon adoption of the 2020 Plan, the Company no longer grants new equity awards under the 2012 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
First Column) | |
| Equity compensation plans approved by security holders(1) | |
| 369,600 | | |
$ | 3,401.90 | | |
| 894,227 | |
| Equity compensation plans not approved by security holders | |
| – | | |
| – | | |
| – | |
| Total | |
| 369,600 | | |
$ | 3,401.90 | | |
| 894,227 | |
___________________
| (1) |
Includes options outstanding representing 2,499 shares of common stock under the 2020 Plan.
Also includes 367,101 restricted stock units subject to the 2020 Plan. |
Item 13. Certain Relationships and Related
Transactions, and Director Independence.
Our Board has a policy to review and approve all transactions with
directors, officers and holders of more than 5% of our voting securities and their affiliates. The policy provides that, prior to Board
consideration of a transaction with such a related party, the material facts as to the related party’s relationship or interest
in the transaction must be disclosed to the Board, and the transaction will not be considered approved by the Board unless a majority
of the directors who are not interested in the transaction (if applicable) approve the transaction. Furthermore, when stockholders are
entitled to vote on a transaction with a related party, the material facts of the related party’s relationship or interest in the
transaction must be disclosed to the stockholders, who must approve the transaction in good faith.
In March 2019, the Company entered into a consulting
agreement with Dr. Cauwenbergh, one of our directors, which was subsequently renewed for successive one-year terms. No consulting fees
were paid to Dr. Cauwenbergh in 2021. Outside of the Company’s consulting agreement with Dr. Cauwenbergh, since the past two years,
there has not been, nor is there currently proposed, any transaction or series of related transactions to which we were or will be a
party in which the amount involved exceeded or will exceed $120,000 and in which the other parties included or will include any of our
directors, executive officers, holders of 5% or more of our voting securities, or any member of the immediate family of any of the foregoing
persons, other than compensation arrangements with directors and executive officers, which are described where required in Item 11, Executive
Compensation of this Amendment.
Indemnification Agreements
We have entered into indemnification agreements
with each of our executive officers and directors. These agreements provide that, subject to limited exceptions and among other things,
we will indemnify each of our executive officers and directors to the fullest extent permitted by law and advance expenses to each indemnitee
in connection with any proceeding in which a right to indemnification is available.
Director Independence
We believe that the Company benefits from having a strong and independent
Board. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material
relationship with the Company that would affect his or her exercise of independent judgment. On an annual basis, the Board reviews the
independence of all directors under the applicable Nasdaq listing standards. The Company also considers each director’s affiliations
with the Company and members of management, as well as significant holdings of Company securities. This review considers all known relevant
facts and circumstances in making an independence determination. Based on this review, the Board has made an affirmative determination
that all directors are independent, other than our President and Chief Executive Officer, Dr. Dispersyn.
In addition, Nasdaq listing standards require that, subject to
specified exceptions, each member of our Audit, Compensation and Governance and Nominating Committees be independent and that our Audit
Committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. Our Board has determined that our
current directors, Messrs. Ferrara and Dorman and Dr. Freeman, members of the Audit Committee, Messrs. Bitterman and Ferrara and Dr.
Lockshin, members of the Compensation Committee, and Drs. Lockshin and Freeman and Messr. Dorman, members of the Governance and Nominating
Committee, are independent under the applicable Nasdaq listing standards and the Exchange Act.
Item 14. Principal Accountant Fees and Services.
The following is a summary of the fees billed and expected to be
billed to the Company by BDO USA, LLP (“BDO”), our independent registered public accounting firm, for professional
services rendered for the fiscal years ended December 31, 2021 and 2020. All fees incurred in fiscal years 2021 and 2020 for services
rendered by BDO were approved in accordance with the pre-approval policies and procedures described below.
| | |
2021 | | |
2020 | |
| Audit Fees | |
$ | 187,352 | | |
$ | 246,494 | |
| Audit-Related Fees | |
| – | | |
| – | |
| Tax Fees | |
| 36,250 | | |
| – | |
| All Other Fees | |
| – | | |
| – | |
| Total All Fees: | |
$ | 223,602 | | |
$ | 246,494 | |
Audit Fees consist of fees for the audit of the Company’s
financial statements included in our annual reports on Form 10-K, the review of the Company’s financial statements included in
our quarterly reports on Form 10-Q and other statutory and regulatory filings, including auditor consents.
Audit-Related Fees consist of fees billed for assurance
and related services that are also performed by our independent registered public accounting firm.
Tax Fees consist of services rendered for tax compliance,
tax advice and tax planning.
Pre-Approval Policies and Procedures
The Audit Committee reviews and pre-approves all audit and non-audit
services performed by its independent registered public accounting firm, as well as the fees charged for such services. In its review
of non-audit service fees, the Audit Committee considers, among other things, the possible impact of the performance of such services
on the auditor’s independence.