Item 5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, on April 12, 2020,
Entasis Therapeutics Holdings Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement
(the “Securities Purchase Agreement”) with Innoviva, Inc. (“Innoviva”), pursuant to which the Company agreed
to issue and sell to Innoviva, in a private placement under the applicable Nasdaq Stock Market LLC rules, up to 14,000,000 newly
issued shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) and warrants to purchase
up to 14,000,000 shares of Common Stock, with an exercise price per share of $2.50 (the “Private Placement”). The Company
announced the first closing of the Private Placement on April 22, 2020. On June 10, 2020, the Company is holding a special meeting
of stockholders to, among other things, approve the second closing (“Second Closing”) of the Private Placement.
In connection with the Private Placement,
on May 15, 2020, the Compensation Committee of the Company’s Board of Directors, approved retention cash bonus awards (“Bonus
Awards”) for certain key employees of the Company involved in the completion of the Private Placement and/or the Company’s
ATTACK (Acinetobacter Treatment Trial Against Colistin) Phase 3 pivotal clinical trial
to evaluate sulbactam-durlobactam (the “ATTACK Study”). The Bonus Awards shall be payable to certain of the eligible
employees in a lump sum on August 31, 2020, assuming the Second Closing of the Private Placement occurs prior to such date, and,
for certain other eligible employees, on the first regular payroll date following the Company’s announcement of topline data
from the ATTACK Study, which we anticipate will occur in early 2021. Payment of the Bonus Awards is conditioned upon the employees
remaining continuously employed by the Company through the date of payment of the Bonus Award.
Pursuant to the memorandum confirming the
Bonus Awards for each of the named executive officers of the Company, Manoussos Perros, Ph.D., the Chief Executive Officer of the
Company, will be eligible to receive a total cash bonus award of $268,300, with 50% payable on August 31, 2020, assuming the Second
Closing of the Private Placement occurs prior to such date, and the balance payable on the first regular payroll date following
the Company’s announcement of topline data from the ATTACK Study. Michael Gutch, the Chief Financial Officer and Chief Business
Officer of the Company, and Eric Kimble, the Chief Commercial Officer of the Company, will be eligible to receive Bonus Awards
of $66,325 and $66,973, respectively, on August 31, 2020, assuming the Second Closing of the Private Placement occurs prior to
such date.
The foregoing summary of the Bonus Awards
to the Company’s named executive officers does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the form of the memorandum confirming the Bonus Awards, a copy of which will be included as an exhibit to
the Company’s next Quarterly Report on Form 10-Q.
Forward-Looking Statements
Any
statements in this Current Report on Form 8-K (the “Current Report”) about the Company’s future expectations,
plans and prospects, including statements about the expected closing of the Second Closing, availability of data from the ATTACK
Study, and other statements containing the words such as “may,” “will,” “expect,” “plan,”
“anticipate,” “estimate,” “intend” and similar expressions,
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially
from current expectations and beliefs, including but not limited to: whether the conditions
for the closing of the Second Closing will be satisfied; the occurrence of any event, change or other circumstances that could
give rise to the termination of the Securities Purchase Agreement; competitive factors; general economic and market conditions
and the risks more fully described in the Company’s filings with the SEC, including those set forth in Part I, Item
1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and
those set forth in Part II, Item 1A, “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2020. Forward-looking statements contained in this Current Report are made as of this date, and except as
required by law, the Company assumes no obligation to update any forward-looking statements contained herein to reflect any change
in expectations, even as new information becomes available.