Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain officers.
On August 2, 2021, the Board of Directors (the “Board
of Directors”) of Heat Biologics, Inc. (the “Company”), and the members of its Compensation Committee, adopted the Heat
Biologics, Inc. 2021 Subsidiaries Stock Incentive Plan (the “SSIP”). The SSIP is designed to compensate employees of the Company’s
subsidiaries based on their responsibilities and for their contributions to the successful achievement of certain corporate goals and
objectives of such subsidiaries and to share the success and risks of such subsidiaries based upon achievement of business goals. The
SSIP is subject to stockholder approval and will terminate if not approved by the stockholders.
The SSIP allows for the grant of equity interests
in subsidiaries of the Company (the “Equity Program”), including Skunkworx Bio, Inc. (“SkunkWorx”), Scorpion Biological
Services, Inc. (“Scorpion”), Abacus Biotech, Inc. (“Abacus”), Blackhawk Bio, Inc. (“Blackhawk”) and
other newly formed subsidiaries of the Company that adopt the SSIP by resolution of their Board of Directors (“Participating Subsidiaries”).
The purpose of the SSIP is to promote the interests
of the Company and its stockholders by providing equity interests in one or more of the Participating Subsidiaries to directors, officers,
employees and consultants of such Participating Subsidiaries, including directors, officers and employees of Heat who are also directors,
officers and/or employees of such a Participating Subsidiary, in order to encourage them to enter into and continue in the employ or service
of the Company and/or its Participating Subsidiaries, to acquire a proprietary interest in the long-term success of the Company and/or
its Participating Subsidiaries and to reward the performance of individuals in fulfilling long-term corporate objectives.
The SSIP generally is administered by the Compensation
Committee of the Board of Directors. The administrator of the SSIP will have full authority to establish rules and regulations for the
proper administration of the SSIP, to determine the persons to whom and the time or times at which awards shall be granted; to determine
the type and number of awards to be granted; to determine the number of shares of stock of a Participating Subsidiary to which an award
may relate and the terms, conditions, restrictions and performance criteria of awards. However, no action or decision of the administrator
may be taken with respect to a Participating Subsidiary (and its SSIP participants) without the approval of the Board of Directors of
such Participating Subsidiary or a committee of such Board of Directors.
Persons eligible to participate in the SSIP include
all employees, officers, directors and consultants of Participating Subsidiaries, including employees, officers and directors of the Company
that are also employees or officers of one or more Participating Subsidiaries.
Ten percent (10%) of the total outstanding shares
of common stock of each Participating Subsidiary (“Participating Subsidiary Stock”) as of the effective date of such Participating
Subsidiary’s adoption of the SSIP shall be reserved for issuance under the Plan (all of which may be granted as incentive stock
options). Shares of Participating Subsidiary Stock with respect to an award that are forfeited, cancelled, exchanged or surrendered will
again be available for grants under the SSIP. However, shares of Participating Subsidiary Stock surrendered or withheld as payment of
either the exercise price or withholding taxes will no longer be available for awards under the SSIP.
The SSIP allows for the grant of: (i) stock options
to purchase shares of Participating Subsidiary Stock; (ii) stock appreciation rights based on Participating Subsidiary Stock; (iii) restricted
stock of a Participating Subsidiary; (iv) restricted stock units for Participating Subsidiary Stock; and (v) other stock-based and cash-based
awards to eligible individuals. The terms of awards will be set forth in an award agreement, consistent with the terms of the SSIP. No
stock option will be exercisable later than ten years after the date it is granted.
The foregoing description of the SSIP does not purport
to be complete and is qualified in its entirety by reference to the SSIP, a complete copy of which is incorporated herein by reference
and is filed as Exhibit 10.1 to this Current Report on Form 8-K.
While grants under the SSIP may be made to our employees
prior to such time as the plan is approved by our stockholders, any such grants will not be exercisable until shareholder approval of
the SSIP is obtained and any grants made prior to approval will be forfeited and cancelled if the SSIP is not approved by our shareholders.
On August 2, 2021 the Board of Directors, the Compensation Committee and the board of directors of Skunkworx, Scorpion, Abacus and Blackhawk
have granted to Jeff Wolf an option under the SSIP to purchase 10,526, 10,638, 10,526 and 10,526 shares of common stock of Skunkworx,
Scorpion, Abacaus and Blackhawk, respectively, representing beneficial ownership of approximately 5.0% of the outstanding shares of common
stock of each of Skunkworx, Scorpion, Abacus and Blackhawk, respectively. Skunkworx, Scorpion, Abacaus and Blackhawk currently have 200,100,
200,100, 200,000 and 200,000 shares outstanding. In addition, the Board of Directors, the Compensation Committee and the board of directors
of Scorpion have granted to William Ostrander an option under the SSIP to purchase 2,127 shares of common stock of Scorpion representing
beneficial ownership of approximately 1.1% of the outstanding shares of common stock of Scorpion. The foregoing grants will be forfeited
if the SSIP proposal is not approved by the stockholders of the Company.