PRELIMINARY
PROXY STATEMENT
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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[X]
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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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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):
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[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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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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PRELIMINARY
PROXY STATEMENT
Cocrystal
Pharma, Inc.
1860
Montreal Road
Tucker,
Georgia 30084
(425)
398-7178
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Dear
Shareholder:
We
are pleased to invite you to attend the 2018 Annual Meeting of the shareholders of Cocrystal Pharma, Inc., which will be held
at 2:00 p.m. EST on August 6, 2018 at 4400 Biscayne Boulevard, Suite 1500, Miami, Florida 33137, for the
following purposes:
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1.
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To
elect six members to our Board of Directors;
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2.
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To
approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000;
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3.
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To
approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation;
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4.
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To
ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2018; and
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5.
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To
transact such other matters as may properly come before the Annual Meeting.
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Cocrystal’s
Board of Directors has fixed the close of business on June 11, 2018 as the record date for a determination of shareholders
entitled to notice of, and to vote at, this Annual Meeting or any adjournment thereof.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders
to Be Held on August 6, 2018:
We
mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access
our Proxy Statement and our 2017 Annual Report on Form 10-K on or about June 25, 2018.
This Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are available at: https://www.equitystock.com
free of charge.
If
You Plan to Attend
Please
note that space limitations make it necessary to limit attendance to shareholders. Registration and seating will begin at 1:00
p.m. EST. Shares can be voted at the meeting only if the holder is present in person or by valid proxy.
For
admission to the meeting, each shareholder may be asked to present valid picture identification, such as a driver’s license
or passport, and proof of stock ownership as of the record date, such as the enclosed proxy card or a brokerage statement reflecting
stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the meeting.
If
you do not plan on attending the meeting, please vote your shares via the Internet, by phone or by signing and dating the enclosed
proxy and returning it in the business envelope provided. Your vote is very important.
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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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Secretary
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Dated:
June 25, 2018
Whether
or not you expect to attend in person, we urge you to vote your shares at your earliest convenience. This will ensure the presence
of a quorum at the meeting. Promptly voting your shares via the Internet, by phone or by signing, dating, and returning the enclosed
proxy card will save us the expenses and extra work of additional solicitation. An addressed envelope for which no postage is
required if mailed in the United States is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you
from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important,
so please act today.
PRELIMINARY
PROXY STATEMENT
Cocrystal
Pharma, Inc.
1860
Montreal Road
Tucker,
Georgia 30084
(425)
398-7178
2018
ANNUAL MEETING OF SHAREHOLDERS
PROXY
STATEMENT
This
proxy statement (the “Proxy Statement”) is being sent 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 2018 Annual Meeting of Shareholders of Cocrystal (the “2018
Annual Meeting”). The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions
on how to access this Proxy Statement and our 2017 Annual Report on Form 10-K is first being mailed to shareholders entitled
to vote at the 2018 Annual Meeting on or about June 25, 2018.
Date,
Time and Place of the 2018 Annual Meeting of Shareholders
We will
hold the 2018 Annual Meeting on August 6, 2018 at 2:00 p.m., EST.
Who
is Entitled to Vote?
Our
Board has fixed the close of business on June 11, 2018 as the record date for a determination of shareholders entitled
to notice of, and to vote at, the 2018 Annual Meeting or any adjournment thereof. On the record date, there were 29,923,076
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 2018 Annual Meeting. As of the record date, Cocrystal had issued no
preferred stock which 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, the Notice has
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?
Record
holders and beneficial owners may attend the 2018 Annual Meeting. If your shares are held in street name, you will need to bring
a copy of a brokerage statement or other documentation reflecting your stock ownership as of the record date. Please see below
for instructions on how to vote at the 2018 Annual Meeting if your shares are held in street name.
How
Do I Vote?
If
you are a stockholder of record, you may vote:
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1.
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By
Internet.
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2.
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By
phone.
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3.
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By
mail, if you have received a paper copy of the proxy materials; or
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4.
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In
person at the 2018 Annual Meeting.
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Detailed
instructions for Internet and telephone voting are set forth on the Notice, which contains instructions on how to access our proxy
statement and annual report online.
If you vote by Internet or phone, please DO NOT mail your proxy card.
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 2018 Annual Meeting, please bring with you evidence of your ownership
as of the record date (such as a letter from your nominee confirming your ownership or a bank or brokerage firm account statement)
and a legal proxy from your nominee authorizing you to vote your shares.
What
constitutes a Quorum?
To
carry on the business of the 2018 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 2018 Annual Meeting. Broker non-votes (because
there are routine matters presented at the 2018 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 2018 Annual Meeting or if we do not receive sufficient votes in favor of the
proposals by the date of the 2018 Annual Meeting, the persons named as proxies may propose one or more adjournments of the 2018
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, 2, 3, and 4. If other matters properly come before the 2018 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.
To elect the Board of Directors;
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No
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None
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2.
To approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000
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No
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Against
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3.
To approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation
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No
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None
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4.
To ratify the appointment of our independent registered public accounting firm for the fiscal year ending December 31, 2018
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Yes
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N/A
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As
a result, if you do not provide voting instructions, your shares will not be voted on Proposals 1, 2 and 3.
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.” Except for Proposal 2, Broker non-votes do not count as a vote “FOR” or “AGAINST” any
of the proposals. Broker non-votes will have the same effect as a vote “AGAINST” Proposal 2.
How
Many Votes are Needed for Each Proposal to Pass?
Proposals
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Vote
Required
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1.
To 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.
To approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000;
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Majority
of outstanding shares entitled to vote
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3.
To approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation;
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Majority
of the shares present and entitled to vote on the matter
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4.
To ratify the appointment of our independent registered public accounting firm for the fiscal year ending December 31, 2018.
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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 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.
Reduction
of the Number of Authorized Shares
. The affirmative vote of the majority of the outstanding stock entitled to vote is required
to approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000.
Approval,
on an advisory basis, of Cocrystal’s Named Executive Officer compensation
. The affirmative vote of the majority of the
aggregate voting power of the shares present at the 2018 Annual Meeting in person or by proxy and entitled to vote on the matter
is required to approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation.
Ratification
of Auditor
. The affirmative vote of a majority of the shares represented at the 2018 Annual Meeting and entitled to vote on
the matter is required for the ratification of the selection of BDO USA, LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2018.
How
are abstentions treated?
Proposals
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Effect
of
Abstentions
on
the
Proposal
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1.
To elect the Board of Directors;
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Not
applicable
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2.
To approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000;
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Against
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3.
To approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation;
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Against
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4.
To ratify the appointment of our independent registered public accounting firm for the fiscal year ending December 31, 2018.
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Against
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Abstentions
will have the same effect as a vote “AGAINST” Proposals 2, 3 and 4. 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. With regard to the remaining proposals, you may vote in favor of each
proposal or against each proposal, or in favor of some proposals and against others, or you may abstain from voting on any of
these proposals. You should specify your respective choices on the accompanying proxy card or your vote instruction form.
Is
My Proxy Revocable?
You
may revoke your proxy and reclaim your right to vote up to and including the day of the 2018 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 2018 Annual
Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed
to: Cocrystal Pharma, Inc.,
1860 Montreal Road, Tucker Georgia 30084
.
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 2018
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 2018 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 their 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. Shareholders who participate in householding will continue to receive separate proxy cards.
If
you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of
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:
1860
Montreal Road, Tucker, Georgia 30084
.
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 2018 Annual Meeting.
Can
a Shareholder Present a Proposal To Be Considered At the 2019 Annual Meeting?
If
you wish to submit a proposal to be considered at the 2019 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 2019 annual
meeting of shareholders (the “2019 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 February
25, 2019, which is 120 calendar days prior to the anniversary date Cocrystal’s Proxy Statement was mailed to shareholders
in connection with the 2018 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 2019 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 2019 Annual Meeting;
provided
,
howeve
r, 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 close of business on the tenth day after public disclosure of the 2019 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 Cocrystal Pharma, Inc.,
1860 Montreal Road, Tucker, Georgia 30084
,
Attention: Corporate Secretary.
We
reserve the right to amend our Bylaws and any change will apply to the 2019 annual meeting of shareholders 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 2018 Annual Meeting.
Where
can I find voting results of the 2018 Annual Meeting?
We
will announce the results for the proposals voted upon at the 2018 Annual Meeting and publish voting results in a Current Report
on Form 8-K filed within four business days after the 2018 Annual Meeting.
The
Board Recommends that Shareholders Vote “
FOR
” Proposals 1, 2, 3, and 4.
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 seven. The Board currently consists of six directors with one vacancy.
Upon
the recommendation of the Corporate Governance and Nominating Committee of the Board, our Board has nominated the following six
current directors: (i) Raymond Schinazi, (ii) Gary Wilcox, (iii) David Block, (iv) Phillip Frost, (v) Jane Hsiao and (vi) Steven
Rubin, to be elected as directors at the 2018 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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Raymond
Schinazi
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68
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Chairman
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Gary
Wilcox
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71
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Vice
Chairman and Interim Chief Executive Officer
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David
Block
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58
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Director
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Phillip
Frost
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81
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Director
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Jane
Hsiao
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71
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Director
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Steven
Rubin
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58
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Director
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Director
Nominees Biographies
Raymond
Schinazi
,
Ph.D., Hon D.Sc., Chairman
Dr.
Schinazi was appointed Co-Chairman of the Board as of November 25, 2014. Since March 11, 2015, Dr. Schinazi has served as Chairman
of the Board. Dr. Schinazi is the founder and Manager of RFS Pharma, a position he held beginning in 2004. Dr. Schinazi has been
at Emory University since 1978 and currently serves as the Frances Winship Walters Professor of Pediatrics and Director of the
Laboratory of Biochemical Pharmacology at Emory University. He is also the Director of the Scientific Working Group on Viral Eradication
for the NIH-sponsored Emory University Center for AIDS Research (CFAR). In addition, Dr. Schinazi currently serves as a Governing
Trustee for the Foundation for AIDS Research (amfAR), the International Center for Missing & Exploited Children (ICMEC), and
the Global Virus Network (GVN) and serves as a non-executive Director of Gliknik Inc. Dr. Schinazi has been a director of ReViral
Ltd since April 2014, and a director of Brace Pharma Capital, LLC since February 2014.
Dr.
Schinazi’s qualifications to serve on our Board include being the founder of multiple successful biotechnology companies
including Triangle Pharmaceuticals, Inc., Pharmasset, Inc. and Idenix Pharmaceuticals, Inc. and his extensive experience and his
technical expertise in drug discovery and development.
Gary
Wilcox, Ph.D., Vice-Chairman and Interim Chief Executive Officer
Dr.
Wilcox has been a director of Cocrystal since January 2, 2014 and has served as the Interim Chief Executive Officer since July
22, 2016. 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.
David
Block, M.D., M.B.A., Director
Dr.
Block was appointed a director as of November 25, 2014. Since May 2007, Dr. Block has served as President, Chief Executive Officer
and Chairman of the Board of Gliknik Inc., a biopharmaceutical company which he founded to create new therapies for people living
with cancer and immune disorders. From 1990 through its successful sale in 2002, Dr. Block held a number of commercial positions
at DuPont Merck and DuPont Pharmaceuticals, ultimately as EVP of International Operations. He was subsequently COO of Celera Genomics
and CEO of venture-funded Ruxton Pharmaceuticals prior to founding Gliknik. Dr. Block has been an active HIV physician at Johns
Hopkins since 1992.
Dr.
Block’s qualifications to serve on our Board include his expertise in pharmaceutical development strategy and commercialization,
finance and budgeting, and operational management, and his knowledge of medicine and unmet medical needs.
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. Dr. Frost
was named Chairman of the Board of Ladenburg Thalmann Financial Services Inc. (“Ladenburg Thalmann”) (NYSE American:LTS),
an investment banking, asset management, and securities brokerage firm providing services through its principal operating subsidiary,
Ladenburg Thalmann & Co. Inc., in July 2006 and has been a director of Ladenburg Thalmann from 2001 until 2002 and again since
2004. Dr. Frost also serves as a director for Castle Brands (NYSE American:ROX), a developer and marketer of premium brand spirits.
He serves as a member of the Board of Trustees of the University of Miami, the Skolkovo Foundation Scientific Advisory Council
in Russia, the Shanghai Institute for Advanced Immunochemical Studies in China, and The Florida Council of 100 and as 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 Teva Pharmaceutical Industries, Limited, or Teva (NYSE:TEVA) from January 2006 until February 2015 and
had served as Chairman of the Board of Teva from March 2010 until December 2014 and as Vice Chairman from January 2006 until March
2010. Dr. Frost previously served as Vice Chairman of Cogint, Inc., and as a director for Sevion Therapeutics, Inc. prior to its
merger with Eloxx Pharmaceuticals, Inc., SafeStitch Medical Inc. prior to its merger with TransEnterix, Inc., and PROLOR Biotech,
Inc. prior to its acquisition by OPKO in August 2013, and as Governor and Co-Vice Chairman of the American Stock Exchange (now
NYSE American).
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 the acquisition
of Key Pharmaceuticals, Inc. by Schering Plough Corporation in 1986.
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.
Jane
H. Hsiao, Ph.D., M.B.A., Director
Dr. Hsiao has been a director of Cocrystal
since January 2, 2014 and has been a director of Cocrystal Discovery since 2008. She has served as Vice-Chairman and Chief Technical
Officer of OPKO since May 2007 and as a director since February 2007. Dr. Hsiao has served as Chairman of the Board of Non-Invasive
Monitoring Systems, Inc. (OTC:NIMU), a medical device company, since October 2008 and was named Interim Chief Executive Officer
of Non-Invasive Monitoring Systems, Inc. in February 2012. Dr. Hsiao is also a director of each of TransEnterix, Inc. (NYSE American:TRXC),
a medical device company, Neovasc, Inc. (NasdaqCM:NVCN), a company developing and marketing medical specialty vascular devices.
Dr. Hsiao previously served as a director for PROLOR Biotech, Inc. prior to its acquisition by the Company in August 2013, and
as Chairman of the Board of SafeStitch Medical, Inc. prior to its merger with TransEnterix, Inc. Dr. Hsiao served as the Vice
Chairman-Technical Affairs of IVAX from 1995 to January 2006. Dr. Hsiao served as Chairman, Chief Executive Officer and President
of IVAX Animal Health, IVAX’s veterinary products subsidiary, from 1998 to 2006.
Dr.
Hsiao’s qualifications to serve on our Board of Directors include her background in pharmaceutical chemistry and strong
technical expertise, as well as her senior management experience at OPKO and IVAX. In addition, as a result of her role as director
and/or chairman of other companies in the biotechnology and life sciences space, she has a keen understanding and appreciation
of the many regulatory and development issues confronting pharmaceutical and biotechnology companies.
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. Mr. Rubin is a member of The Frost Group, LLC, a private investment
firm. In addition to OPKO, Mr. Rubin currently serves as Chairman of Neovasc, Inc. (NasdaqCM:NVCN), a developer of vascular
devices, and is on the Boards of Directors of Non-Invasive Monitoring Systems, Inc. (OTC:NIMU), a medical device company,
Kidville, Inc. (OTC:KVIL), which operates upscale learning and play facilities for children, Eloxx Pharmaceuticals, Inc. (NasdaqGM:ELOX),
a clinical-stage biopharmaceutical company developing novel RNA-modulating drug candidates that are designed to treat rare and
ultra-rare premature stop codon diseases, Castle Brands, Inc. (NYSE MKT:ROX), a marketer of premium spirits, Red Violet (NasdaqCM:RDVT),
a software services company spun off from Cogint, Inc., and Chromadex Corp., an integrated, global nutraceutical company devoted
to improving the way people age. Mr. Rubin previously served as a director of Cogint, Inc. (NasdaqGM:COGT), 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., Sevion Therapeutics, Inc., prior to its merger with Eloxx Pharmaceuticals, Inc., Dreams, Inc. (NYSE American:DRJ),
a vertically integrated sports licensing and products company, Safestitch Medical, Inc. prior to its merger with TransEnterix,
Inc., SciVac Therapeutics, Inc. prior to its merger with VBI Vaccines, Inc., Tiger X Medical, Inc. prior to its merger with BioCardia,
Inc., and PROLOR Biotech, Inc., prior to its acquisition by the Company in August 2013. 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.
EXECUTIVE
OFFICERS
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Gary
Wilcox*
|
|
71
|
|
Vice
Chairman and Interim Chief Executive Officer
|
|
|
|
|
|
James
Martin
|
|
51
|
|
Chief
Financial Officer
|
|
|
|
|
|
Sam
Lee
|
|
59
|
|
President
|
*
Dr. Wilcox’s biography is set forth above under “Nominees for Director.”
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).
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 17 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.
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, (iii) the Corporate Governance and Nominating
and (iv) the Scientific Review 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
|
|
|
|
|
|
|
|
|
|
Raymond
Schinazi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Wilcox
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Block
|
|
X
|
|
X
|
|
Chair
|
|
X
|
|
|
|
|
|
|
|
|
|
Phillip
Frost
|
|
X
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jane
Hsiao
|
|
X
|
|
|
|
X
|
|
Chair
|
|
|
|
|
|
|
|
|
|
Steven
Rubin
|
|
X
|
|
Chair
|
|
X
|
|
X
|
Board
and Committee Meetings
Our
Board held a total of eight meetings during the fiscal year ended December 31, 2017. 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 2016.
During
2017, our Audit Committee held a total of four meetings, the Compensation Committee had one meeting and the Corporate Governance
and Nominating Committee did not hold any 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. Raymond Schinazi and 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.
Compensation
Committee Interlocks and Insider Participation
None
of the members of the Compensation Committee of the Board was at any time during 2017 or at any other time an officer
or employee of Cocrystal. None of our executive officers currently serves, or in the past three years has served, as a member
of the board of directors or compensation committee of another entity that has one or more executive officers serving on our Board
or the Compensation Committee. No member of the Compensation Committee has any other business relationship or affiliation
with us other than his or her service as a director. However, our Chairman, Dr. Raymond Schinazi serves on the board of directors
of Gliknik Inc., of which Dr. David Block is the CEO. Dr. Block is the Chairman of the Compensation Committee.
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
Mr. 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 2015 Equity Incentive Plan, which we refer to as
the “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 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 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
1860 Montreal Road, Tucker
Georgia 30084
, 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 2018 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
We
separate the roles of Chief Executive Officer and Chairman of our Board. Our Interim Chief Executive Officer is Gary Wilcox and
our Chairman of the Board is Dr. Raymond Schinazi. Dr. Gary Wilcox serves as Vice Chairman of the Board. We believe that separation
of the positions of Chairman and Chief Executive Officer reinforces the independence of our Board in its oversight of our business
and affairs. In addition, such separation helps create an environment that is more conducive to objective evaluation and oversight
of management’s performance, increasing management accountability and improving the ability of our Board to monitor whether
management’s actions are in the best interests of Cocrystal and its shareholders. Having a Chairman separate from the Chief
Executive Officer also allows the Chairman to focus on assisting the Chief Executive Officer and senior management in seeking
and adopting successful business strategies and risk management policies and in making successful choices in management succession.
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.
Risk
Assessment Regarding Compensation Policies and Practices
With
the exception of Dr. Gary Wilcox, our Interim Chief Executive Officer, we design the compensation of our employees to be competitive.
Although in the past we granted stock options to employees, we did not do so in 2017 or 2018. This reduces the tendency to take
unusual risk. Dr. Wilcox receives a salary that is well below market average for similar positions and less than the other members
of our senior management. However, he is a founder of our principal subsidiary and as the result has a significant equity ownership
in the Company. While this may be construed to increase tendency to take risks, Dr. Wilcox has not sold any shares since we acquired
Cocrystal Discovery, Inc. in 2014.
The
principal risks other than liquidity relate to the results of our clinical trials and research. We have two senior executive officers
who are actively involved in monitoring our clinical research activities. In addition, our skilled and experienced Board includes
four non-employee directors who actively monitor our clinical research as part of an effort to further the research while at the
same time limiting risk taking.
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 to Cocrystal Pharma, Inc., 1860 Montreal Road, Tucker Georgia, 30084, Attention: Corporate
Secretary.
Shareholder
Communications
Although
we do not have a formal policy regarding communications with our Board, shareholders may communicate with the Board by writing
to us at Cocrystal Pharma, Inc., 1860 Montreal Road, Tucker Georgia 30084, Attention: Corporate Secretary, 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.
Section
16(a) Beneficial Ownership Reporting Compliance
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 fiscal year 2017.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Set
forth below is the description of transactions since January 1, 2017, 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.
Since
November 2014, the Company has leased its Tucker, Georgia facility from a limited liability company owned by Dr. Raymond Schinazi,
the Company’s Chairman and principal shareholder. Rent expense for 2017 totaled $153,000. In January 2018, we reduced our
lease from approximately 6,148 square feet to approximately 1,200 square feet.
As
described under “Cocrystal Technology – Collaborations,” in Part I of the Annual Report on Form 10-K
for the year ended December 31, 2017, the Company has entered into certain license agreements to which Emory University is directly,
or indirectly, a party. Due to Dr. Schinazi’s relationship with Emory University and his contributions to the intellectual
property and technology which are the subject of the licenses, he may, in the future, be entitled under these agreements to payments
of material amounts from Emory University or its partners.
On
April 20, 2017, the Company sold 416,664 shares of the Company’s common stock in a private placement offering at a purchase
price of $7.20 per share for gross proceeds of $3,000,000. The purchasers included Dr. Raymond Schinazi, the Company’s
Chairman and principal shareholder. In addition, OPKO, the Company’s shareholder, of which the Company’s director
Dr. Phillip Frost is Chairman and Chief Executive Officer, invested in the offering.
On
November 24, 2017, the Company borrowed $500,000 from each of Dr. Raymond’s Schinazi, the Company’s 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 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.
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 Interim
Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) during 2017
(including those who served in an interim capacity), and our three most highly compensated executive officers other than the Interim
Chief Executive Officer and Chief Financial Officer whose total compensation exceeded $100,000. We refer to these persons
as the “Named Executive Officers.”
2017
Summary Compensation Table
Name
and Principal Position (a)(1)
|
|
Year
(b)
|
|
|
Salary
($)(c)(1)
|
|
|
Bonus
($)(d)
|
|
|
Option
Awards
($)(f)
|
|
|
All
Other
Compensation
($)(i)
|
|
|
Total
($)(j)
|
|
Gary
Wilcox
|
|
|
2017
|
|
|
|
100,643
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
100,643
|
|
Interim
Chief Executive
|
|
|
2016
|
|
|
|
100,643
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
100,643
|
|
Officer
|
|
|
2015
|
|
|
|
133,487
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
133,487
|
|
James
Martin
|
|
|
2017
|
|
|
|
134,654
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
64,905
|
(2)
|
|
|
199,559
|
|
Chief
Financial Officer
|
|
|
2016
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
|
2015
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
Sam
Lee
|
|
|
2017
|
|
|
|
253,336
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
253,336
|
|
President
|
|
|
2016
|
|
|
|
260,836
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
260,836
|
|
|
|
|
2015
|
|
|
|
203,620
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
203,620
|
|
Curtis
Dale
|
|
|
2017
|
|
|
|
18,886
|
|
|
|
15,910
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
34,796
|
|
Former
Interim Chief
|
|
|
2016
|
|
|
|
197,820
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
197,820
|
|
Financial
Officer
|
|
|
2015
|
|
|
|
42,766
|
|
|
|
15,910
|
|
|
|
58,477
|
|
|
|
15,585
|
|
|
|
132,738
|
|
(1)
|
Salary
amounts reflect amounts earned and paid each year.
|
|
|
(2)
|
Mr.
Martin was paid $64,905 for consulting services prior to joining the Company as Chief Financial Officer.
|
Pay
Ratio
In
2015 the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation
to the total annual compensation of the principal executive officer (“PEO”). The Company’s PEO is Gary Wilcox,
Interim Chief Executive Officer. The purpose of the new required disclosure is to provide a measure of the equitability of pay
within the Company. The Company believes its compensation philosophy and process yield an equitable result.
Median
Employee total annual compensation
|
|
$
|
101,000
|
|
PEO
total annual compensation
|
|
$
|
100,643
|
|
Ratio
of PEO to Median Employee Compensation
|
|
|
1.0:1.0
|
|
In
determining the median employee, a listing was prepared of all employees as of December 31, 2017. Employees on leave of absence
were excluded from the list and wages and salaries were annualized for those employees that were not employed for the full year
of 2017. The median amount was selected from the annualized list. For simplicity, the value of the Company’s medical benefits
provided were excluded as all employees including the PEO are offered the exact same benefits. As of December 31, 2017 the Company
employed 10 persons.
Pay
elements that were included in the annual total compensation for each employee are:
|
●
|
salary
received in fiscal year 2017; and
|
|
●
|
annual
incentive payment received for performance in fiscal year 2017.
|
Named
Executive Officers’ Employment Agreements
Gary
Wilcox
.
Dr. Wilcox assumed the role of Interim Chief Executive Officer in July 2016.
Prior to that, Dr. Wilcox had served as a part-time senior adviser to the Company pursuant to a letter agreement
dated
March 31, 2015, which has not been modified upon his appointment as Interim Chief Executive Officer.
Under
this agreement, Dr. Wilcox’s employment is on an at-will basis and may be terminated by either party, and his annual salary
is $100,000. The letter agreement contains non-competition and non-disclosure covenants by Dr. Wilcox.
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 $200,000, which was decreased from $260,000 as of December 2017.
James
Martin.
The Company entered into a letter agreement with Mr. Martin effective June 1, 2017. Mr. Martin receives an
annual base salary of $230,000, which is subject to annual review. In addition to the base salary, Mr. Martin is eligible to receive
a discretionary bonus, to the extent approved by the Board.
Outstanding
Equity Awards at Fiscal Year-End
As
of December 31, 2017, there were no outstanding unearned options granted to our Named Executive Officers under the 2015 Equity
Incentive Plan, and no Named Executive Officer had any outstanding stock awards.
Equity
Compensation Plan Information
The
following chart reflects the number of awards granted under equity compensation plans approved and not approved by shareholders
and the weighted average exercise price for such plans as of December 31, 2017. All numbers have been adjusted to give effect
to the 1-for-30 reverse stock split effective February 24, 2018.
(amounts
in thousands, except per share amounts)
Name
of Plan
|
|
Number
of shares
of common stock
to be issued upon
exercise of
outstanding
options (a)
|
|
|
Weighted
Average
Exercise Price of
Outstanding
Options (b)($)
|
|
|
Number
of shares
remaining
available for
issuance under
equity
compensations
plans (excluding
the shares
reflected in
column (a))
|
|
Equity
compensation plans approved by security holders (1)
|
|
|
711
|
|
|
|
8.39
|
|
|
|
1,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
|
|
‒
|
|
|
|
‒
|
|
|
|
‒
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
711
|
|
|
|
8.39
|
|
|
|
1,656
|
|
(1)
|
Represents
securities issued under the 2007 Equity Incentive Plan and 2015 Equity Incentive Plan.
|
In
2014, in connection with the reverse merger with Cocrystal Discovery, Inc., the Company adopted and assumed the 2007 Equity
Incentive Plan. On April 13, 2015, the Board adopted the 2015 Equity Incentive Plan, and our shareholders approved and ratified
it on June 29, 2015. The 2015 Equity Incentive Plan provides for the grant of incentive stock options, qualified stock options,
restricted stock awards, restricted stock units, stock appreciation rights, and performance shares or units and cash awards. Awards
may be granted under the 2015 Equity Incentive Plan to our employees, directors and independent contractors.
Grants
of Plan-Based Awards
The
Company made no grants of plan-based awards to any of the Named Executive Officers during the year ended December 31, 2017.
Option
Exercises and Stock Vested
None
of our Named Executive Officers exercised stock options or acquired shares on the vesting of stock awards in fiscal year ended
December 31, 2017.
DIRECTOR
COMPENSATION
We
do not presently compensate our directors for their Board or committee service, and did not do so during the year ended December
31, 2017.
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 June 8, 2018 by (i) those
persons known by us to be owners of more than 5% of our common stock, (ii) each director, (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.,
1860 Montreal Road, Tucker
Georgia 30084.
Beneficial
Owner
|
|
Amount
of Common Stock Beneficially Owned and
Nature of Beneficial Owner (1)
|
|
|
Percent
of Class (1)
|
|
Directors
and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Raymond
Schinazi (2)
|
|
|
10,361,985
|
|
|
|
34.5
|
%
|
David
Block (3)
|
|
|
14,371
|
|
|
|
*
|
|
Curtis
Dale (4)
|
|
|
‒
|
|
|
|
‒
|
|
Phillip
Frost (5)
|
|
|
3,664,014
|
|
|
|
12.2
|
%
|
Jane
Hsiao (6)
|
|
|
306,479
|
|
|
|
1.0
|
%
|
Sam
Lee (7)
|
|
|
436,262
|
|
|
|
1.5
|
%
|
James
Martin (8)
|
|
|
‒
|
|
|
|
‒
|
|
Steven
Rubin (9)
|
|
|
32,197
|
|
|
|
*
|
|
Gary
Wilcox (10)
|
|
|
564,952
|
|
|
|
1.9
|
%
|
All
directors and executive officers as a group (8 persons):
|
|
|
15,380,260
|
|
|
|
51.1
|
%
|
5%
Stockholders:
|
|
|
|
|
|
|
|
|
Frost
Gamma Investments Trust (11)
|
|
|
3,655,265
|
|
|
|
12.2
|
%
|
OPKO
Health, Inc. (12)
|
|
|
2,659,683
|
|
|
|
8.9
|
%
|
*
Less than 1%
(1)
|
Applicable
percentages are based on 29,923,076 shares of common stock outstanding as of June
8, 2018. 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 stockholders 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 is based upon a review of the Company’s stock
transfer agent records.
|
|
|
(2)
|
Dr.
Schinazi is a director. Includes (i) 9,240,928 shares of common stock, (ii) 995,593
shares of common stock held by an entity controlled by Dr. Schinazi, and (iii) 125,464
vested options.
|
|
|
(3)
|
Dr.
Block is a director. Includes 5,622 shares of common stock and 8,749 vested options.
|
|
|
(4)
|
Mr.
Dale is a former executive officer.
|
|
|
(5)
|
Dr.
Frost is a director. Includes (i) 3,655,265 shares of common stock held by Frost
Gamma Investments Trust and (ii) 8,749 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.
|
|
|
(6)
|
Dr.
Hsiao is a director. Includes (i) 114,509 shares of common stock held directly
by Dr. Hsiao, (ii) 183,221 shares of common stock held by Hsu Gamma Investment,
L.P, for which Dr. Hsiao serves as General Partner, and (iii) 8,749 vested options.
|
|
|
(7)
|
Dr.
Lee is a Named Executive Officer.
|
|
|
(8)
|
Mr.
Martin is a Named Executive Officer.
|
|
|
(9)
|
Mr.
Rubin is a director. Includes 23,448 shares of common stock and 8,749 vested options.
|
|
|
(10)
|
Dr.
Wilcox is a Named Executive Officer and a director.
|
|
|
(11)
|
Dr.
Frost has voting and investment control over the securities held by Frost Gamma Investments
Trust. See Footnote 5 above. Address is 4400 Biscayne Boulevard, Miami, FL 33137.
|
|
|
(12)
|
Includes
(i) 2,626,350 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.
|
PROPOSAL
2.
APPROVAL
OF
an
amendment to our Certificate of Incorporation to reduce the number of shares of common stock we are authorized to issue from 800,000,000
to 100,000,000
The
Board has determined that it is in our and our shareholders’ best interest to reduce the number of our authorized shares
of common stock from 800,000,000 to
100,000,000
(the
“Reduction”) and recommended that the shareholders approve a proposal to amend Section 4 of our Certificate of Incorporation,
as amended (the “Certificate”), to implement the Reduction. The Reduction will have no effect on the par value of
our common stock. Our common stock is currently quoted on The Nasdaq Capital Market under the symbol “COCP”. The proposed
form of amendment to our Certificate to implement the Reduction is attached to this Proxy Statement as Annex A.
Purpose
of the Reduction
The
Board believes that, due to the decrease in the number of outstanding shares of common stock resulting from the 1-for-30 reverse
stock split we effected on January 24, 2018, the Company no longer has a need for 800,000,000 authorized shares of common stock
and that
100,000,000
authorized shares of common stock
is sufficient for the Company at this time. The sole purpose of the Reduction is to reduce franchise and other state taxes that
are computed by reference to Cocrystal’s authorized capitalization structure. Assuming no change in our assets or shares
outstanding, the Company estimates that the Reduction will result in a decrease in future franchise and other state taxes of approximately
23.6%.
Risks
and Effects of the Reduction
We
do not foresee any risks with respect to the Reduction. The Reduction will not have any effect on our stock price or market capitalization.
Our common stock is currently registered under Section 12(b) of the Exchange Act, and we are subject to the periodic reporting
and other requirements of the Exchange Act. The Reduction will not affect the registration of the common stock under the Exchange
Act or our obligation to publicly file financial and other information with the SEC. If the Reduction is implemented, our common
stock will continue to trade on The Nasdaq Capital Market.
Procedure
for Implementing the Reduction
The
Reduction would become effective upon the filing of a Certificate of Amendment to our Certificate with the Secretary of State
of the State of Delaware.
No
Appraisal Rights
Shareholders
have no rights under the General Corporation Law of the State of Delaware or under our charter documents to exercise dissenters’
rights of appraisal with respect to the Reduction.
The
Board recommends a vote “
For
” this Proposal 2.
COMPENSATION
DISCUSSION AND ANALYSIS
This
following Compensation Discussion and Analysis is designed to provide our shareholders with a clear understanding of our compensation
philosophy and objectives, compensation-setting process and the 2017 compensation of our Named Executive Officers, or NEOs. As
discussed in Proposal 3, we are conducting our Say-on-Pay vote that requests your approval of the compensation of our NEOs as
described in this section and in the tables and accompanying narrative disclosure contained below under “Executive Compensation.”
To assist you with this vote, please review our compensation philosophies, the design of our executive compensation program and
how, we believe, these programs have contributed to and are aligned with our performance.
In
the following discussion, we use the term “Named Executive Officers” to refer to those persons listed under “Executive
Compensation–2017 Summary Compensation Table” in this Proxy Statement. No other executive officer had compensation
exceeding $100,000 in 2017.
Our
compensation philosophy is to attract and retain talented and dedicated executives who will work to achieve our desired business
direction, strategy, and performance. The primary goals of our compensation program for our NEOs are to:
|
(i)
|
attract,
motivate, and retain talented executives with the skill sets and expertise we need to
meet our scientific and business objectives;
|
|
(ii)
|
be
competitive in the marketplace;
|
|
(iii)
|
tie
annual incentives to the achievement of specified performance objectives that will result
in increased shareholder value; and
|
To
achieve these goals, we have formed a Compensation Committee (the “Committee”) that reviews and approves the executive
compensation packages for our executive officers, including NEOs. These packages are generally based on a mix of salary, discretionary
bonus, and equity awards. Although we have not adopted any formal guidelines for allocating total compensation between equity
compensation and cash compensation, we maintain compensation plans that tie a substantial portion of our executives’ overall
compensation to the achievement of corporate goals and success of the Company.
Benchmarking
of Cash and Equity Compensation
With
the exception of our Interim Chief Executive Officer, the Committee reviews executive compensation levels to ensure they remain
competitive in our industry. We may retain the services of third-party executive compensation specialists from time to time in
connection with the establishment of cash and equity compensation and related policies. We have not used any compensation consultants
to date.
Elements
of Compensation
We
evaluate individual executive performance with a goal of setting compensation at levels the Board and the Committee believe are
comparable with executives in comparable companies, taking into account similar size, stage of development, complexity of programs,
and our status as a publicly held company. Our Board and Committee may take into account our relative performance against objectives
both as a company and as an individual contributor. The primary elements of an individual’s compensation may include base
salary, discretionary equity compensation, and discretionary annual bonus, each of which is described in greater detail below.
Base
Salary
. We try to establish and maintain competitive annual base salaries for our Named Executive Officers. In the past we
have utilized comparative data purchased from Radford Consulting (a division of Aon plc). While base salaries are not primarily
performance-based, we believe it is important to provide adequate, fixed compensation to executives working in a highly volatile
and competitive industry such as ours. We provide fixed salary compensation to our Named Executive Officers based on their responsibilities
and individual experience, taking into account competitive market compensation paid by other companies for similar positions within
the pharmaceutical industry. The Committee may take into account the Company’s growth and achievements as well as salary
increases, or lack thereof, during preceding periods to make determinations as to whether to increase base salary. The Committee
is mindful of the Company’s cash flow needs. Accordingly it approved a reduction in our President’s salary from $260,000
to $200,000 effective December 2017.
Discretionary
Annual Bonus
. In addition to base salaries, our Committee has the authority to award discretionary annual bonuses to our Named
Executive Officers. The Committee did not award cash bonuses to any Named Executive Officers in connection with 2017 performance
and the Company is presently evaluating whether cash bonuses should be a component of executive compensation in the future.
Equity
Compensation
. We believe that equity compensation should be a component of our executive compensation program because it aligns
the interests of our executive officers with the long term performance of the Company. Stock options are an element of our long-term
incentive strategy. The primary purpose of stock options is to provide Named Executive Officers and other employees with a personal
and financial interest in our success through stock ownership, thereby aligning the interests of such persons with those of our
shareholders. This program is an important element of our goal to empower and motivate outstanding long-term contributions by
our Named Executive Officers and other employees. The Committee believes that the value of stock options will reflect our performance
over the long-term. Under our employee stock option program, options are granted at fair market value at the date of grant, and
options granted under the program become exercisable only after a vesting period, which is subject to continued employment. Consequently,
employees benefit from stock options only if the market value of our common stock increases over time. With respect to these stock
options, we recognize compensation expense based on FASB ASC Topic 718.
The
Committee typically grants stock options under the 2015 Equity Incentive Plan, which we sometimes refer to as the “Plan”.
See “2015 Equity Incentive Plan,” below. As with base salaries, there is no set formula or performance criteria, which
determines the amount of the equity award for our Named Executive Officers or our other employees. Nor is the Committee required
to assign any relative weight to any specific factors or criteria it considers when granting stock options. Rather, the Committee
will exercise its judgment and discretion by considering all factors it deems relevant at the time of such grants, including the
Company’s performance during the most recent fiscal year. For the Named Executive Officers, other than the Chief Executive
Officer, the decisions by the Committee may take into account the recommendation of the Company’s Chief Executive Officer,
and include his subjective determination based on his assessment of the executive officer’s current position with the Company,
the executive officer’s past and expected future performance and the other factors discussed in the determination of base
salaries. In addition, the Committee may make stock option grants to incentivize and attract new employees, including executive
officers. With limited exceptions, we have not granted employees restricted stock or restricted stock units pursuant to our equity
incentive plans. However, our Committee, in its discretion, may in the future elect to make such grants to our employees and our
executive officers if it deems it advisable.
2015
Equity Incentive Plan
The
Plan was approved and ratified by more than 99% of the votes cast at our 2015 Annual Meeting. The Plan authorizes up to 1,666,667
shares of our common stock for issuance pursuant to the terms of the Plan. The Plan is a broad-based plan in which all employees,
consultants, officers, and directors of the Company are eligible to participate. The purpose of the Plan is to further the growth
and development of the Company by providing, through ownership of stock of the Company and other equity-based awards, an incentive
to its officers and other key employees and consultants who are in a position to contribute materially to the prosperity of the
Company, to increase such persons’ interests in the Company’s welfare, by encouraging them to continue their services
to the Company, and by enabling the Company to attract individuals of outstanding ability to become employees, consultants, officers
and directors of the Company.
The
Plan is administered by the Committee or by the Board, which we refer to as the “Administrator.” Under the Delaware
General Corporation Law, the Board may delegate to officers of the Company the power to grant awards to employees who are not
officers or directors. Accordingly, the Board has delegated to the Committee the power to authorize awards to employees who are
not direct reports of the Chief Executive Officer and has retained the power to authorize awards to the Chief Executive Officer
and his or her direct reports. Awards granted under the Plan may be restricted stock, restricted stock units, options and stock
appreciation rights (“SARs”). Such awards are made to employees, consultants, officers and directors, who, in the
opinion of the Administrator, have contributed, or are expected to contribute, materially to our success. The identification of
individuals entitled to receive awards, the terms of the awards, and the number of shares subject to individual awards, are determined
by the Administrator, in its sole discretion. As of the record date, all of the Company’s approximately 10 employees and
four non-employee directors are eligible to participate in the Plan.
Advisory
Vote on Executive Compensation
We
conducted our first advisory vote on executive compensation (“Say-on-Pay”) at our 2015 Annual Meeting. While this
vote is not binding on the Company, our Board or the Committee, we believe that it is important for our shareholders to have an
opportunity to vote on this proposal every three years as a means to express their views regarding our executive compensation
philosophy, our compensation policies and programs, and our decisions regarding executive compensation, all as disclosed in this
Proxy Statement. Our Board and the Committee value the opinions of our shareholders and, to the extent there is any significant
vote against the compensation of our Named Executive Officers as disclosed in this Proxy Statement, we will consider our shareholders’
concerns and the Committee will evaluate whether any actions are necessary to address those concerns.
At
the 2015 Annual Meeting, more than 99% of the votes cast on the advisory vote on the executive compensation proposal were in favor
of our Named Executive Officer compensation as disclosed in this Proxy Statement. Our Board and Committee reviewed these final
vote results. Given the significant level of support, no changes to our executive compensation policies and decisions were necessary
at that time based on the vote results. We have determined that our shareholders should vote on a Say-on-Pay proposal every three
years, consistent with the preference expressed by our shareholders at the 2015 Annual Meeting. Accordingly, we are conducting
our Say-on-Pay vote this year. See Proposal 3 of this Proxy Statement.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee of the Company has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”)
included in this Proxy Statement. Based on its review and discussions, the Compensation Committee has recommended to the Board
(and the Board has approved) that the CD&A be included in the Company’s Proxy Statement on Schedule 14A prepared in
connection with the Company’s 2018 Annual Meeting and incorporated by reference into the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2017.
Submitted
by the Committee of the Board of Directors
David
Block, Chairman
Jane
Hsiao
Steven
Rubin
PROPOSAL
3.
SHAREHOLDER
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Overview
Pursuant
to The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act, we are asking our
shareholders to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers, as disclosed
in this Proxy Statement, commonly referred to as the “say-on-pay” vote. We are providing our shareholders with an
opportunity to express their views on our Named Executive Officers’ compensation. Although this advisory vote is non-binding,
the Committee will review and consider the voting results when making future decisions regarding our Named Executive Officer compensation
and related executive compensation programs.
At
the 2015 Annual Meeting, more than 99% of the votes cast on the advisory vote on the executive compensation proposal were in favor
of our Named Executive Officer compensation as disclosed in this Proxy Statement.
We
encourage our shareholders to read the “Executive Compensation” section in this Proxy Statement, including the compensation
tables and the related narrative disclosure, which describes the structure and amounts of the compensation of our Named Executive
Officers in fiscal year ended December 31, 2017. The compensation of our Named Executive Officers is designed to enable us to
attract and retain talented and experienced executives to lead us successfully in a competitive environment. The Committee and
our Board believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay
practices and effectively incentivizing our Named Executive Officers to dedicate themselves fully to value creation for our shareholders.
Accordingly,
we ask our shareholders to vote “FOR” the following resolution at the 2018 Annual Meeting:
“RESOLVED,
that the compensation paid to Cocrystal’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K,
including the compensation tables and narrative discussion is hereby APPROVED on an advisory basis.”
The
Board recommends a vote “
For
” this Proposal 3.
PROPOSAL
4.
RATIFICATION
OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR ENDING
December
31, 2018
Our
Board has appointed BDO USA, LLP (“BDO”) to serve as our independent registered public accounting firm for the fiscal
year ending December 31, 2018. BDO has been Cocrystal’s independent registered public accounting firm since 2014. 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 appointment is ratified, the Board may, in its discretion, appoint a different independent registered
public accounting firm at any time during 2018 if they determine that such a change would be in the best interests of Cocrystal
and its shareholders. If the appointment is not ratified, the Board will consider its options.
A
representative of the BDO is not expected to be present at the 2018 Annual Meeting.
The
Board recommends a vote “
For
” the ratification of the appointment of BDO.
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. BDO, our independent registered public accounting firm for 2017, was 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:
|
●
|
reviewed
and discussed the audited financial statements with management;
|
|
|
|
|
●
|
met
privately with the independent registered public accounting firm and discussed matters required to be discussed pursuant to
the Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committees”;
|
|
|
|
|
●
|
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
|
|
|
|
|
●
|
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, 2017 filed with the SEC.
|
This
report is submitted by the Audit Committee.
Steven
Rubin, Chairman
Dr.
Phillip Frost
Dr.
David Block
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
The
Audit Committee pre-approves all audit and permissible non-audit services on a case-by-case basis. In its review of non-audit
services, the Audit Committee considers whether the engagement could compromise the independence of our independent registered
public accounting firm, and whether the reasons of efficiency or convenience is in our best interest to engage our independent
registered public accounting firm to perform the services.
During
2017, all services performed by BDO which were subject to the SEC’s pre-approval requirements were approved by the Audit
Committee.
Principal
Accountant Fees and Services
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 BDO USA, LLP as
our independent registered public accounting firm, the Audit Committee 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 fiscal 2016 and 2017
were approved by the Audit Committee in accordance with its pre-approval policy. The following table shows the fees paid to our
principal accountants for the fiscal years ended December 31, 2016 and 2017.
|
|
2017($)
|
|
|
2016($)
|
|
Audit
Fees (1)
|
|
|
224,845
|
|
|
|
269,830
|
|
Audit-Related
Fees (2)
|
|
|
670
|
|
|
|
500
|
|
Tax
Fees (3)
|
|
|
24,912
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
250,427
|
|
|
|
315,330
|
|
|
(1)
|
Audit
Fees relate to relate to the audits of our annual financial statements and the review of our interim quarterly financial statements.
|
|
|
|
|
(2)
|
Audit-Related
fees relate to the Financial Accounting Standards Board’s Accounting Support fee.
|
|
|
|
|
(3)
|
Tax
fees relate to professional services rendered by our principal accountant for tax compliance, tax advice and tax planning.
|
OTHER
MATTERS
Cocrystal
has no knowledge of any other matters that may come before the 2018 Annual Meeting and does not intend to present any other matters
at the 2018 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.
If
you do not plan to attend the 2018 Annual Meeting, in order that your shares may be represented and in order to assure the required
quorum, please sign, date and return your proxy promptly. In the event you are able to attend the 2018 Annual Meeting, at your
request, Cocrystal will cancel your previously submitted proxy.
Annex
A
CERTIFICATE
OF AMENDMENT TO CERTIFICATE OF INCORPORATION
OF
COCRYSTAL PHARMA, INC.
Cocrystal
Pharma, Inc. (the “Company”), a corporation organized and existing under the General Corporation Law of the State
of Delaware (the “Delaware General Corporation Law”), hereby certifies as follows:
1.
The name of the Company is Cocrystal Pharma, Inc.
2.
Pursuant to Sections 242 and 228 of the Delaware General Corporation Law, the amendment herein set forth has been duly approved
by the Board of Directors and holders of a majority of the outstanding capital stock of the Company.
3.
The first sentence of Section 4 of the Certificate of Incorporation is hereby replaced with the following:
The
total number of shares of stock of all classes and series the Company shall have authority to issue is 105,000,000 shares
consisting of (i) 100,000,000 shares of common stock, par value of $0.001 per share and (ii) 5,000,000 shares of preferred
stock, par value $0.001 with such rights, preferences and limitations as may be set from time to time by resolution of the board
of directors and the filing of a certificate of designation as required by the Delaware General Corporation Law.
4.
This Certificate of Amendment to Certificate of Incorporation was duly adopted and approved by the shareholders of this Company
on the [_____] day of [______] 2018 in accordance with Section 242 of the Delaware General Corporation Law.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to Certificate of Incorporation as of the [___] day
of [____________] 2018.
|
COCRYSTAL
PHARMA, INC.
|
|
|
|
|
By:
|
|
|
|
Gary
Wilcox
Interim
Chief Executive Officer
|
PRELIMINARY
PROXY STATEMENT
|
VOTE
BY INTERNET
-
proxyvote.equitystock.com
|
|
|
COCRYSTAL
PHARMA, INC
|
Use
the Internet to vote by proxy up until 7:00 P.M. Eastern Time on August 5, 2018. Have your proxy card in hand when you access
the website and then follow the instructions. Enter the 12 digit Control Number below and follow the instructions to vote
your proxy.
|
|
|
|
VOTE
BY MAIL
|
|
|
|
Mark,
sign, and date this
proxy card and promptly return it to
|
|
EQUITY
STOCK TRANSFER,
|
|
237
W 37TH ST, Suite 602, New York, NY 10018,
|
|
ATTN:
Shareholder Services.
|
|
|
|
VOTE
BY FAX
|
|
|
|
Mark,
sign, and date this proxy card and promptly
|
|
return
it by fax: (646) 201-9006 ATTN: Shareholder
|
|
Services
.
|
KEEP
THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------------------------------------------------------------------
DETACH
AND RETURN THIS PORTION ONLY
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
The
Board of Directors recommends a vote “FOR” Proposals 1 through 4
1.
Election of Directors
|
|
|
TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS
|
|
|
|
|
|
|
|
|
|
For
|
Withhold
|
|
|
|
|
|
|
|
|
1a.
|
Raymond
Schinazi
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
1b.
|
Gary
Wilcox
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
1c.
|
David
Block
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
1d.
|
Philip
Frost
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
1e.
|
Jane
Hsiao
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
1f.
|
Steven
Rubin
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
For
|
Against
|
Abstain
|
|
|
|
|
|
|
2.
To approve an amendment to Cocrystal’s Certificate of Incorporation to reduce the number of shares of common stock Cocrystal
is authorized to issue from 800,000,000 to 100,000,000.
|
[ ]
|
[ ]
|
[ ]
|
|
|
|
|
3.
To approve, on an advisory basis, Cocrystal’s Named Executive Officer compensation.
|
[ ]
|
[ ]
|
[ ]
|
|
|
|
|
4.
To
ratify
the appointment of Cocrystal’s independent registered public accounting
firm for the fiscal year ending December 31, 2018.
|
[ ]
|
[ ]
|
[ ]
|
|
|
|
|
NOTE:
Such other business as may properly come before the meeting or any adjournment or postponement thereof.
|
|
|
|
|
Yes
|
No
|
Please indicate if you plan to attend this meeting
|
[ ]
|
[ ]
|
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.
|
|
|
|
|
|
|
Signature
[PLEASE SIGN WITHIN BOX]
|
|
Date
|
|
Signature
(Joint Owners)
|
|
Date
|
PRELIMINARY
PROXY STATEMENT
THIS
PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON AUGUST 6, 2018
The
undersigned hereby appoint(s) each of Dr. Gary Wilcox and Mr. James Martin as the attorney and proxy of the undersigned, with
full power of substitution, to vote the number of shares of stock the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Cocrystal Pharma, Inc. to be held at 4400 Biscayne Boulevard, Suite 1500, Miami, Florida 33137 on August 6, 2018
at 2:00 p.m. Eastern Time, and any adjournment or postponement thereof.
This proxy card 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 recommendations
of the Board of Directors.
Continued and to be signed on reverse side.
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