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Item 1.01
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Entry into a Material Definitive Agreement.
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On January 26, 2021, Armata Pharmaceuticals, Inc.
(NYSE: ARMP), a Washington corporation (the “Company”), entered into a securities purchase agreement (the “Securities
Purchase Agreement”) with Innoviva Strategic Opportunities LLC, a wholly-owned subsidiary of Innoviva, Inc. (Nasdaq:
INVA) (collectively, “Innoviva”), pursuant to which the Company agreed to issue and sell to Innoviva, in a private
placement, up to 6,153,847 newly issued shares of common stock, par value $0.01 per share (“common stock”),
of the Company (the “Shares”) and warrants (the “Common Warrants”) to purchase up to
6,153,847 shares of common stock, with an exercise price per share of $3.25 (the “Private Placement”). Each
Share is sold together with one Common Warrant, and the per-unit purchase price is $3.25.
The Private Placement is expected to occur in two tranches.
On January 26, 2021 and concurrently with entering into
the Securities Purchase Agreement, the Company completed the first tranche (the “First Closing”) of the Private
Placement. At the First Closing, Innoviva purchased 1,867,912 Shares and Common Warrants to purchase 1,867,912 shares of common
stock, in compliance with any and all applicable laws and without the requirement for the prior receipt of the stockholders’
approval under the listing requirements of the NYSE American, for an aggregate purchase price of approximately $6.1 million.
At the closing of the second tranche (the “Second Closing”),
subject to satisfaction of certain closing conditions, including the Company’s stockholders’ voting in favor of the
transaction, Innoviva will purchase 6,153,847 shares of common stock less the number of Shares and Common Warrants
sold at the First Closing, which is anticipated to be approximately 4.3 million Shares and Common Warrants to purchase approximately
4.3 million shares of common stock for an aggregate purchase price of $13.9 million.
The Second Closing is expected to close in the first quarter
of 2021, subject to the satisfaction of certain closing conditions and approval from the Company’s stockholders.
The Company expects to receive aggregate gross proceeds from
the Private Placement of approximately $20.0 million, before deducting transaction expenses, and excluding proceeds (if any) received
in connection with the exercise of any warrants.
As part of the First Closing, the Company entered into an amended
and restated investor rights agreement (the “A&R IRA”), which amended and restated in its entirety that
certain Investor Rights Agreement, dated February 12, 2020, by and between Innoviva, Inc. and the Company. Pursuant to
the A&R IRA, for so long as Innoviva and its affiliates hold at least 12.5% of the outstanding shares of common stock of the
Company on a fully-diluted basis, Innoviva shall have the right to designate two (2) directors to the board of directors
of the Company (the “Board”) and for so long as Innoviva and its affiliates hold at least 8%, but less than
12.5%, of the outstanding shares of common stock of the Company on a fully-diluted basis, Innoviva shall have the right to
designate one (1) director to the Board, subject to certain conditions and qualifications set forth in the A&R IRA. The
A&R IRA also provides Innoviva with certain subscription rights in the event of any new issuances.
As part of the First Closing, the Company also entered into
a registration rights agreement (the “Registration Rights Agreement”) with Innoviva. Pursuant to the Registration
Rights Agreement, the Company must file a registration statement on Form S-1 or Form S-3 (the “Shelf Registration
Statement”) covering the resale of the securities issued and sold pursuant to the Securities Purchase Agreement with
the U.S. Securities and Exchange Commission (the “Commission”) on a continuous basis pursuant to Rule 415
promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or if Rule 415 is not
available for offers and sales of such securities, by such other means of distribution of such securities as Innovia may reasonably
specify. The Company must use its commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but in any event (i) no later than the fifteenth
(15th) day following the filing of the Shelf Registration Statement in the event of no “review” by the Commission,
(ii) no later than the sixtieth (60th) day following the filing of the Shelf Registration Statement in the event of “limited
review” by the Commission, or (iii) in the event of a “review” by the Commission, the one hundred and twentieth
(120th) day following the filing of the Shelf Registration Statement, subject to certain exceptions.
The Company also entered into a Voting Agreement with Innoviva
(the “Voting Agreement”), pursuant to which Innoviva agreed not to vote or take any action by written consent
with respect to shares of common stock of the Company held by Innoviva or any of its subsidiaries which represent, in the aggregate,
more than 49.5% of the total number of shares of common stock issued and outstanding of the Company as of any given record date
for voting (such shares, the “Excess Shares”) on the matters related to the election of directors to the Board
or removal of directors from the Board (“Board Matters”) presented at any meeting of the stockholders of the
Company (or any adjournment or postponement thereof) or for their action by written consent, in each case, unless the Board authorizes
Innoviva to vote such Excess Shares with respect to Board Matters.
The foregoing descriptions of the Securities Purchase Agreement,
Common Warrants, the A&R IRA, the Registration Rights Agreement and the Voting Agreement and the transactions contemplated
therein do not purport to be complete and are qualified in their entirety by reference to the full text of the Securities Purchase
Agreement, form of the Common Warrants, the A&R IRA, the Registration Rights Agreement, and the Voting Agreement, copies of
which are filed as Exhibit 10.1, 4.1, 10.2, 10.3, and 10.4 hereto, respectively, and incorporated by reference herein.