8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 14, 2019

Commission File Number: 001‑37544

ARMATA PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Washington	91‑1549568
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

4503 Glencoe Avenue

Marina del Rey, California 90292

(Address of principal executive offices)

(310) 655‑2928

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

☐    Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

☐    Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock	ARMP	NYSE American

Introduction

On May 10, 2019, Armata Pharmaceuticals, Inc. (formerly known as AmpliPhi Biosciences Corporation), a Washington corporation (the “Company”), filed a Current Report on Form 8-K announcing that on May 9, 2019, the Company completed its business combination with C3J Therapeutics, Inc., a privately held Washington corporation (“C3J”), in accordance with the terms of an Agreement and Plan of Merger and Reorganization, as amended on March 25, 2019, by and among the Company, C3J and Ceres Merger Sub, Inc., a Washington corporation and wholly-owned subsidiary of the Company (the “Merger”). Also on May 9, 2019, in connection with, and prior to the completion of the Merger, the Company effected a 1-for-14 reverse stock split of its common stock (the “Reverse Stock Split”).  Immediately following the completion of the Merger, Armata completed a private placement financing transaction for an aggregate value of $10.0 million (the “Financing”). Unless otherwise noted herein, all references to share and per share amounts herein have been retrospectively adjusted, except as otherwise disclosed, to reflect the Reverse Stock Split.  Upon completion of the Merger, and the Financing, there were 9,960,078 shares of the Company’s stock outstanding. The Current Report on Form 8-K filed on May 10, 2019 is incorporated herein by reference.

Item 9.01             Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired

The unaudited interim financial statements of C3J, including C3J’s unaudited balance sheet as of March 31, 2019, unaudited balance sheet derived from the audited financial statements as of December 31, 2018, unaudited statements of operations for the three months ended March 31, 2019 and 2018, unaudited statements of stockholders’ equity for the three months ended March 31, 2019 and 2018, and unaudited statements of cash flows for the three months ended March 31, 2019 and 2018 and the notes related thereto are included as Exhibit 99.1 and are incorporated herein by reference.

The audited financial statements of C3J, including C3J’s audited balance sheets as of December 31, 2018 and 2017, statements of operations and comprehensive loss for the years ended December 31, 2018 and 2017, statements of stockholders’ equity for the years ended December 31, 2018 and 2017, statements of cash flows for the years ended December 31, 2018 and 2017, the notes related thereto and the related independent registered public accounting firm’s report are referenced as Exhibit 99.2 and are incorporated herein by reference.

(b)Pro Forma Financial Information

The unaudited pro forma combined financial information of the Company, including the unaudited pro forma combined balance sheet as of March 31, 2019, the unaudited combined statement of operations for the three months ended March 31, 2019, and the unaudited combined statement of operations for the year ended December 31, 2018 and the notes related thereto are included as Exhibit 99.3 and are incorporated herein by reference.

Exhibit Number	Description
23.1	Consent of Independent Registered Public Accounting Firm.
99.1	Unaudited Consolidated Financial Statements of C3J Therapeutics, Inc. as of March 31, 2019 and for the Three Month Periods Ended March 31, 2019 and March 31, 2018.
99.2	Audited Consolidated Financial Statements of C3J Therapeutics, Inc. as of December 31, 2018 and 2017 and for the Years Ended December 31, 2018 and 2017 (incorporated by reference from the Definitive Proxy Statement filed on April 4, 2019).
99.3	Unaudited Pro Forma Combined Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 24, 2019	Armata Pharmaceuticals, Inc.
	By:	/s/ Todd R. Patrick
	Name:	Todd R. Patrick
	Title:	Chief Executive Officer

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statements (Form S-1 Nos. 333-213421, 333-217169, 333-217680 and 333-226959) of AmpliPhi Biosciences Corporation

(2) Registration Statement (Form S-3 No. 333-210974) of AmpliPhi Biosciences Corporation

(3) Registration Statement (Form S-8 No. 333-203455) pertaining to the 2012 Stock Incentive Plan and 2013 Stock Incentive Plan,

(4) Registration Statement (Form S-8 No. 333-221564) pertaining to the AmpliPhi Biosciences Corporation 2016 Equity Incentive Plan, and

(5) Registration Statements (Form S-8 Nos. 333-212183, 333-217563,  333-223987 and 333-232058) pertaining to the Armata Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan, Armata Pharmaceuticals, Inc. 2016 Equity Incentive Plan, C3J Jian, Inc. Amended 2006 Stock Option Plan, and C3J Therapeutics, Inc. 2016 Stock Plan;

of our report dated March 25,  2019, with respect to the 2018 and 2017 consolidated financial statements of C3J Therapeutics, Inc. incorporated by reference in this Current Report on Form 8-K/A from the Definitive Proxy Statement on Schedule 14A of Armata Pharmaceuticals, Inc. (formerly known as AmpliPhi Biosciences Corporation), filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

San Diego, California

July 24, 2019

EX-99.1

Exhibit 99.1

UNAUDITED INTERIM FINANCIAL STATEMENTS

Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018

Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2019 and 2018

Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018

Notes to Unaudited Consolidated Financial Statements

1

C3J Therapeutics, Inc.

Consolidated Balance Sheets

	March 31, 2019		December 31, 2018
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	6,162,000	$	9,663,000
Prepaid expenses and other current assets		456,000		697,000
Total current assets		6,618,000		10,360,000
Restricted cash		700,000		800,000
Property and equipment, net		2,930,000		3,249,000
Operating lease right-of-use asset		2,635,000		—
Other assets		136,000		136,000
Total assets	$	13,019,000	$	14,545,000
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	1,043,000	$	727,000
Deferred rent		—		335,000
Current portion of operating lease liabilities		1,143,000		—
Deferred asset acquisition consideration		769,000		970,000
Total current liabilities		2,955,000		2,032,000
Deferred rent, net of current portion		—		810,000
Operating lease liabilities, net of current portion		2,553,000		—
Deferred asset acquisition consideration, net of current portion		2,399,000		2,892,000
Asset acquisition derivative liability		1,157,000		1,117,000
Total liabilities		9,064,000		6,851,000
Stockholders’ equity
Common stock, no par value; 150,000,000 shares authorized at  March 31, 2019 and  December 31, 2018; 102,770,818 shares issued and outstanding at  March 31, 2019 and  December 31, 2018		145,736,000		145,736,000
Accumulated deficit		(141,781,000)		(138,042,000)
Total stockholders’ equity		3,955,000		7,694,000
Total liabilities and stockholders’ equity	$	13,019,000	$	14,545,000

See accompanying condensed notes to consolidated financial statements.

2

C3J Therapeutics, Inc.

Consolidated Statements of Operations

	Three Months Ended March 31,
	2019		2018
	(Unaudited)		(Unaudited)
Operating expenses
Research and development	$	2,061,000	$	2,186,000
Acquired in-process R&D		—		6,768,000
General and administrative		1,380,000		639,000
Total operating expenses		3,441,000		9,593,000
Loss from operations		(3,441,000)		(9,593,000)
Other income (expense)
Interest income		48,000		52,000
Interest expense		(306,000)		(88,000)
Change in fair value of derivative liability		(40,000)		(34,000)
Total other income (expense), net		(298,000)		(70,000)
Net loss	$	(3,739,000)	$	(9,663,000)
Per share information:
Net loss per share, basic and diluted	$	(0.04)	$	(0.10)
Weighted average shares outstanding, basic and diluted		94,320,106		94,320,106

See accompanying condensed notes to consolidated financial statements.

3

C3J Therapeutics, Inc.

Consolidated Statements of Stockholders’ Equity

	Stockholders' Equity
							Accumulated
							Other		Total
	Common Stock				Accumulated		Comprehensive		Stockholders'
	Shares		Amount		Deficit		(Loss)		Equity
Balances, December 31, 2017		102,852,133	$	145,690,000	$	(121,340,000)	$	(7,000)	$	24,343,000
Grant of restricted stock awards		250,000								—
Forfeiture of restricted stock awards		(77,500)								—
Stock-based compensation				26,000						26,000
Net loss						(9,663,000)				(9,663,000)
Balances, March 31, 2018		103,024,633	$	145,716,000	$	(131,003,000)	$	(7,000)	$	14,706,000
Balances,  December 31, 2018		102,770,818	$	145,736,000	$	(138,042,000)	$	—	$	7,694,000
Net loss						(3,739,000)				(3,739,000)
Balances, March 31, 2019		102,770,818	$	145,736,000	$	(141,781,000)	$	—	$	3,955,000

See accompanying condensed notes to consolidated financial statements.

4

C3J Therapeutics, Inc.

Consolidated Statements of Cash Flows

	Three Months Ended March 31,
	2019		2018
	(Unaudited)		(Unaudited)
Operating activities:
Net loss	$	(3,739,000)	$	(9,663,000)
Adjustments required to reconcile net loss to net cash used in operating activities:
Acquired in-process research and development		—		5,691,000
Depreciation		348,000		402,000
Stock-based compensation		—		26,000
Non-cash interest expense		306,000		88,000
Change in fair value of derivative liability		40,000		34,000
Amortization of premiums on available-for-sale securities		—		25,000
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		429,000		201,000
Deferred rent		(84,000)		(71,000)
Prepaid expenses and other current assets		241,000		(20,000)
Net cash used in operating activities		(2,459,000)		(3,287,000)
Investing activities:
Purchases of available-for-sale securities		—		(3,392,000)
Proceeds from sales and maturities of available-for-sale securities		—		4,073,000
Purchases of property and equipment		(142,000)		(159,000)
Net cash provided by/(used in) investing activities		(142,000)		522,000
Financing activities:
Payment of deferred consideration for asset acquisition		(1,000,000)		—
Net cash provided by/(used in) financing activities		(1,000,000)		—
Net increase (decrease) in cash and cash equivalents		(3,601,000)		(2,765,000)
Cash, cash equivalents and restricted cash, beginning of period		10,463,000		12,276,000
Cash, cash equivalents and restricted cash, end of period	$	6,862,000	$	9,511,000
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported
within the consolidated balance sheets that sum to the total of the same amounts shown in the
consolidated statements of cash flows.
	Three Months Ended March 31,
	2019		2018
Cash and cash equivalents	$	6,162,000	$	8,711,000
Restricted cash		700,000		800,000
Cash, cash equivalents and restricted cash	$	6,862,000	$	9,511,000

5

C3J Therapeutics, Inc.

Notes to Consolidated Financial Statements

1. Organization and Description of the Business

C3J Therapeutics, Inc. (the “Company” or “C3J”) is a clinical-stage biotechnology company focused on the discovery and development of novel targeted antimicrobials that treat infectious diseases and address mircobial dysbiosis associated with human disease.  The Company was incorporated under the laws of the state of California on November 4, 2005 as C3 Jian, Inc. Effective February 26, 2016, the Company reincorporated under the laws of the state of Washington as C3J Therapeutics, Inc. As part of this process, the California entity was converted to C3 Jian, LLC and became a wholly owned subsidiary of C3J.

As discussed in more detail in Note 8,  the Company completed a merger with AmpliPhi Biosciences Corporation (“AmpliPhi”), a publicly traded clinical stage biotechnology company focused on the development of novel targeted antimicrobials in an all-stock transaction. At the closing of the merger on May 9, 2019, the combined company changed its name to Armata Pharmaceuticals, Inc. (“Armata”) and received an additional $10.0 million in financing through a private placement of Common Stock with certain former C3J shareholders.

2. Liquidity

The Company has prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. However, the Company has incurred net losses since its inception and has negative operating cash flows. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

As of March 31, 2019, the Company had unrestricted cash and cash equivalents of $6.2 million. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional capital.

3. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2018 included in the Proxy Statement on Schedule 14A of AmpliPhi, filed with the U.S. Securities and Exchange Commission on April 4, 2019, as amended. The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements. Any reference in the Notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

In the opinion of management, the accompanying consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.

6

Fair Value of Financial Instruments

The carrying amounts of cash equivalents, other current assets, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these instruments.

Derivative Liabilities

Derivative liabilities are accounted for in accordance with the applicable accounting guidance provided in ASC 815 – Derivatives and Hedging based on the specific terms of the agreements. Derivative liabilities are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of asset acquisition derivative liability in the consolidated statements of operations and comprehensive loss.

Research and Development Costs

Research and development (“R&D”) costs consist primarily of direct and allocated salaries, incentive compensation, stock-based compensation and other personnel-related costs, facility costs, and third-party services. Third party services include studies and clinical trials conducted by Clinical Research Organizations. R&D activities are expensed as incurred. The Company records accruals for estimated ongoing clinical trial expenses. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of the reporting period.

Acquired in-process research and development expense

The Company expenses acquired in-process research and development in connection with an asset acquisition when there is no alterative future use. Acquired in-process research and development expense of $6.8 million consists of the estimated fair value of the assets acquired and consideration given in connection with the acquisition of certain synthetic phage assets in 2018 from Synthetic Genomics, Inc. As the assets acquired were in the research and development phase and were determined to not have any alternative future use, it was expensed as acquired in-process research and development.

Recent Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842), which amends the FASB Accounting Standards Codification and creates Topic 842, "Leases." The new topic supersedes Topic 840, "Leases," and increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosures of key information about leasing arrangements. The Company has elected to adopt ASU 2016‑02 retrospectively at January 1, 2019 using a simplified transition option that allows companies to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings or accumulated deficit. We have also elected to adopt the package of practical expedients permitted in ASC Topic 842. Accordingly, we are continuing to account for our existing operating lease as an operating lease under the new guidance, without reassessing whether the agreements contain a lease under ASC 842. All of our leases at the adoption date were operating leases for facilities and did not include any non-lease components.

As a result of the adoption of ASU 2016‑02, on January 1, 2019 we recognized (i) a lease liability of approximately $3.8 million, which represents the present value of our remaining lease payments using an estimated incremental borrowing rate of 15%, and (ii) a right-of-use asset of approximately $2.7 million. There was no cumulative-effect adjustment to accumulated deficit. Lease expense is not expected to change materially as a result of the adoption of ASU 2016‑02.

In June 2018, the FASB issued ASU No. 2018‑07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which amends the FASB Accounting Standards Codification in order to simplify the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. The guidance mandates the modified retrospective approach and is effective for annual and interim reporting periods beginning after December 31, 2018, with early adoption permitted. The Company elected to early adopt this ASU as of June 30, 2018 and the adoption did not have an impact on the Company’s consolidated financial statements.

7

4. Fair Value of Financial Assets and Liabilities

The guidance regarding fair value measurements prioritizes the inputs used in measuring fair value and establishes a three-tier value hierarchy that distinguishes among the following:

· Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

· Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

· Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company estimates the fair values of derivative liabilities utilizing Level 3 inputs. No derivative liabilities have been transferred between the classification levels. Estimating the fair values of derivative liabilities requires the use of significant and subjective inputs that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.

The recurring fair value measurements of the Company’s financial assets and liabilities at March 31, 2019 and December 31, 2018 consisted of the following:

	Quoted Prices in
	Active Markets		Significant Other		Significant
	for Identical		Observable Inputs		Unobservable
	Items (Level 1)		(Level 2)		Inputs (Level 3)		Total
March 31, 2019
Assets
Money market funds	$	5,585,000	$	—	$	—	$	5,585,000
Total assets	$	5,585,000	$	—	$	—	$	5,585,000
Liabilities
Asset acquisition derivative liability	$	—	$	—	$	1,157,000	$	1,157,000
Total liabilities	$	—	$	—	$	1,157,000	$	1,157,000
December 31, 2018
Assets
Money market funds	$	9,430,000	$	—	$	—	$	9,430,000
Total assets	$	9,430,000	$	—	$	—	$	9,430,000
Liabilities
Asset acquisition derivative liability	$	—	$	—	$	1,117,000	$	1,117,000
Total liabilities	$	—	$	—	$	1,117,000	$	1,117,000

The following table sets forth a summary of changes in the fair value of the Company’s derivative liability:

	Asset
	Acquisition
	Derivative
	Liability
Balance,  December 31, 2018	$	1,117,000
Changes in estimated fair value		40,000
Balance,  March 31, 2019	$	1,157,000

We estimate the fair value of this derivative by forecasting the timing and likelihood of the events occurring and discounting the probability adjusted payments using an appropriate discount based on market interest rates and our own non-performance risk as required by ASC 820 – Fair Value Measurement.

8

5. Balance Sheet Details

Property and Equipment

Property and equipment consisted of the following:

	March 31,		December 31,
	2019		2018
Laboratory equipment	$	7,008,000	$	6,990,000
Furniture and fixtures		630,000		627,000
Office and computer equipment		268,000		260,000
Leasehold improvements		3,266,000		3,266,000
Total		11,172,000		11,143,000
Less: accumulated depreciation		(8,242,000)		(7,894,000)
Property and equipment, net	$	2,930,000	$	3,249,000

Depreciation expense totaled $348,000 and $402,000 for the three months ended March 31, 2019 and 2018, respectively.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

	March 31,		December 31,
	2019		2018
Accounts payable	$	154,000	$	415,000
Accrued compensation		383,000		191,000
Professional fees		370,000		—
Other accrued expenses		136,000		121,000
Total	$	1,043,000	$	727,000

6. Stock-Based Compensation

On February 26, 2016, the Company established the 2016 Stock Plan (“2016 Plan”) to supplement its prior stock plan (“2006 Plan”).  The purpose of the 2016 Plan is to provide an incentive in the form of equity awards to attract, retain and reward persons performing services for the Company. Equity awards under the 2016 Plan can be made in the form of stock options, restricted stock awards (“RSAs”) or restricted stock unit awards (“RSUs”). Stock options outstanding under the 2006 Plan will remain outstanding until exercised or forfeited, with forfeited shares reducing the total shares available for grant under the 2006 Plan, and increasing the shares available for grant under the 2016 Plan by the same amount. As of December 31, 2018, the 2006 and 2016 Plans allow the Company to grant awards of up to an aggregate of 16,728,784 shares of common stock. A total of 5,511,397 shares remain available for grant under the 2016 Plan as of March 31, 2019.

The terms of restricted stock and stock option award agreements, including vesting requirements, are determined by our Board of Directors, subject to the provisions of the 2016 Plan. The fair value of the Company’s common stock at the date of grant is determined by the Company’s Board of Directors based on analyses performed by third party valuation specialists.

Vesting of RSAs is based on the occurrence of a liquidity event, such as a public stock offering or change in control of the Company. In the event of a public stock offering, a service or milestone based vesting schedule then begins. Service periods are generally two to four years. In the event of a change in control, 100% vesting occurs upon the closing of such an event. Because the probability of a liquidity event is outside of the Company’s control and therefore not considered to be probable, no expense was recorded for the RSAs during 2019 or 2018. Expense will be recorded in the future when a liquidity event is deemed as probable in management’s judgment.

The exercise price of nonqualified and incentive stock options is set at fair value of the common stock at the date of grant. Stock options granted and outstanding under the plan generally begin to vest 25% after the first year anniversary and then monthly for the remaining three years of vesting. Option grants expire ten years from issuance, and are conditioned upon continued employment during the vesting period. Compensation expense on stock options was $0 and $26,000 during the three months ended March 31, 2019 and 2018, respectively.

9

Restricted stock award transactions during the three months ended March 31, 2019 are presented below:

		Weighted Average
		Grant Date
		Fair Value
	Shares	Per Share
Outstanding at  December 31, 2018	8,450,712	$	1.44
Granted	—		—
Forfeited/Cancelled	—		—
Outstanding at  March 31, 2019	8,450,712	$	1.44

As of March 31, 2019, there was total unrecognized stock-based compensation cost related to unvested restricted stock awards of $9.6 million, which will be expensed as appropriate under the awards’ vesting terms and beginning when a liquidity event becomes probable. The completion of the merger with AmpliPhi was a liquidity event and the RSAs began vesting on May 9, 2019.

Stock option transactions during the three months ended March 31, 2019 are presented below:

				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
		Exercise		Term	Intrinsic
	Shares	Price		(Years)	Value
Outstanding at  December 31, 2018	2,766,675	$	1.79	5.02	$	—
Granted	—		—
Forfeited/Cancelled	—		—
Outstanding at  March 31, 2019	2,766,675	$	1.79	4.77	$	—
Vested and expected to vest at  March 31, 2019	2,756,675	$	1.79	4.76	$	—
Exercisable at  March 31, 2019	2,760,839	$	1.79	4.76	$	—

7. Synthetic Genomics Asset Acquisition

On February 28, 2018, C3J completed an acquisition of certain synthetic phage assets (the “synthetic phage assets”) from Synthetic Genomics, Inc.  (“SGI”) for consideration consisting of $8.0 million in cash and $27.0 million in equity. The cash payments are as follows: $1.0 million paid at closing on February 28, 2018, $1.0 million at one year from closing, $1.0 million at two years from closing, and $5.0 million at three years from closing (the payments due on the one, two, three year anniversary are collectively the “time-based payment obligation”). The equity payment (the “equity payment” and, together with the time-based payment obligation, the “deferred purchase price arrangement”) is due upon the earlier of the initial public offering of shares of C3J’s common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, the sale of all or substantially all of C3J’s assets to a third party, or a consolidation or merger into a third party. The agreement provides that the number of shares to be issued or the consideration to be paid will be determined based upon the per share price in connection with C3J’s initial public offering, the value of consideration received in a sale of the synthetic phage assets to a third party, or the value of consideration received in a consolidation or merger with a third party.

On December 20, 2018, in contemplation of the Merger (see Note 8), the deferred purchase price arrangement was amended. Under the amended agreement, the purchase consideration consists of (i) closing consideration of $1.0 million paid on February 28, 2018, (ii) cash payments of $1.0 million on January 31, 2019, $1.0 million on January 31, 2020, and $2.0 million on January 31, 2021, (iii) an issuance of that number of shares of C3J’s common stock equal to ten percent of C3J’s fully-diluted capitalization, excluding options and restricted stock awards, immediately prior to the closing of the merger, and (iv) potential milestone payments of up to $39.5 million related to the development and relevant regulatory approval of products utilizing bacteriophage from the synthetic phage assets acquired from SGI (the “milestone payment obligation”).

In January 2017, FASB issued ASU 2017‑01, Clarifying the Definition of a Business, or ASU 2017‑01. A key provision within ASU 2017‑01 is the single or similar asset threshold. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired set is not a business. The Company adopted this standard effective January 1, 2017.

The synthetic phage assets acquired consisted primarily of phage know-how, research program materials and the related intellectual properties that had been under development by SGI. The Company also was assigned a collaboration agreement with

10

Merck, and a grant from National Institutes of Health, or NIH, and the National Institute of Allergy and Infectious Diseases, or NIAID.

The Company considered the items included in the acquired synthetic phage assets and concluded that substantially all of the fair value of the assets acquired and consideration given to SGI constituted the purchase of a single asset. Based on ASU 2017‑01, the acquisition was an asset acquisition, specifically an in process research and development asset. Under guidance in ASC 730, in process research and development assets acquired in connection with asset acquisitions are expensed unless there is an alternative future use. As the asset acquired from SGI does not have an alternative future use, the $6.8 million fair value of the asset and consideration transferred for the asset acquired was expensed in full in the consolidated statement of operations and comprehensive loss.

The equity payment was determined to be a derivative liability in accordance with ASC 815, Derivatives and Hedging and was initially recorded at its fair value of $2.8 million. Throughout 2018 and as of March 31, 2019, the derivative liability has been adjusted to its fair value based upon a payment probability assessment and marked-to-market at the end of each period. (see Note 4). The time-based payment obligation was recorded as a liability at its amortized cost of $2.9 million and impacts interest expense based on the effective interest method based on its contractual life in accordance with ASC 835,  Interest. Following the December 20, 2018 amendment to the deferred purchase price arrangement, the Company considered the reduction to the share issuance consideration in estimating the fair value of the derivative liability.

The Company determined the changes to the deferred purchase price arrangement met the definition of a troubled debt restructuring under ASC 470‑60, Troubled Debt Restructurings by Debtors, as the Company was experiencing financial difficulties and SGI granted a concession. The amendments to the terms of the equity payment resulted in an adjustment to the fair value of the derivative liability, resulting in a $2.0 million gain, which is included in the change in fair values of derivative liabilities within the consolidated statement of operations and comprehensive loss for the year ended December 31, 2018. Other than the gain resulting from the change in fair value of a derivative liability required to be remeasured to fair value with changes in fair value recognized in earnings in accordance with ASC 815, no gain on restructuring was recorded because the future, undiscounted cash flows of the time-based payment obligation exceed the carrying amount of the liability. The net carrying amount at the date of the restructuring does not include any contingently payable amounts. Prospectively, the time-based payment obligations will continue to be carried at amortized cost and will impact interest expense using the effective interest method based on its contractual life in accordance with ASC 835 and potential payments under the milestone payment obligation will be accrued once probable of being incurred in accordance with ASC 450,  Contingencies. For the periods ended March 31, 2019 and 2018, the Company recognized $306,000 and $88,000, respectively, of interest expense related to the time-based payment obligations. For the periods ended March 31, 2019 and 2018, the Company recognized $40,000 and $34,000, respectively, in change to the estimated fair value of the derivative liability.

In connection with the merger with AmpliPhi on May 9, 2019, the Company converted a portion of its future payment obligations to SGI under the amended agreement by issuing 10,480,012 C3J shares of common stock. These shares were then converted to Armata common shares pursuant to the merger and reverse stock split in the manner described in Note 8. In connection with the merger with AmpliPhi on May 9, 2019, it is anticipated that the derivative liability will adjust to zero as the future payment of any future equity to SGI will no longer be required.

8. Subsequent Events

On May 9, 2019, the Company completed a merger with AmpliPhi. In conjunction with the merger, the combined company changed its name to Armata Pharmaceuticals, Inc. Armata is publicly traded on the NYSE American exchange under the ticker symbol ARMP.

At the effective time of the Merger, each share of C3J common stock outstanding immediately prior to the effective time of the Merger was converted into the right to receive approximately 0.6906 shares of AmpliPhi common stock. The shares were then adjusted further to account for a reverse split of AmpliPhi common stock at a reverse split ratio of 1‑for‑14.

Immediately following the Merger, certain existing C3J shareholders purchased $10.0 million in Armata common stock. After the merger and new investment, the former C3J security holders owned approximately 76% of the aggregate number of shares of Armata common stock and the security holders of AmpliPhi as of immediately prior to the Merger owned approximately 24% of the aggregate number of shares of Armata common stock.

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EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements were prepared using the acquisition  method of accounting  under existing U.S. generally accepted accounting  principles (“GAAP”), which are subject to change and interpretation, and give effect to the merger between C3J Therapeutics, Inc. (“C3J”) and AmpliPhi Biosciences Corporation (“AmpliPhi”). C3J is considered to be the acquiring company for accounting  purposes in this transaction. C3J was determined to be the accounting acquirer based upon the terms of the Merger Agreement and other factors including: (i) C3J security holders own approximately 76% of the fully-diluted capitalization of the Company  immediately following the closing of the merger; (ii) directors appointed by C3J hold a majority of board seats in the combined company; and (iii) C3J management holds the CEO position and a majority of the key positions in the management of the combined company, named Armata Pharmaceuticals, Inc (the “Company”).

The unaudited pro forma combined balance sheet as of March 31, 2019, and the unaudited pro forma combined statement  of operations and comprehensive loss for the three months ended March 31, 2019 assumes the merger took place January 1, 2019, and combines the historical financial statements of C3J and AmpliPhi for the three months ended March 31, 2019. The unaudited pro forma combined statement of operations for the year ended December 31, 2018 assumes that the merger took place as of January 1, 2018 and combines the historical financial statements of C3J and AmpliPhi for the year ended December 31, 2018. The historical financial statements of C3J and Ampliphi have been adjusted to give effect to the proposed acquisition  (for accounting purposes) of AmpliPhi by C3J. The pro forma assumptions and adjustments are described in the accompanying notes presented in the following pages.

As C3J, a private company, is the acquiring company for accounting purposes, the merger is considered to be a reverse acquisition under the acquisition method of accounting for business combinations. Accordingly, C3J’s assets and liabilities will be recorded at their precombination carrying amounts and the historical operations that are reflected in the financial statements will be those of C3J. Assets and liabilities of AmpliPhi will be measured and recognized at fair value as of the transaction date, and added to the assets,  liabilities and results of operations of C3J following the merger.

The unaudited pro forma combined financial statements were prepared in accordance with the regulations of the SEC. The pro forma adjustments reflecting the completion of the Merger are based upon the preliminary accounting analysis conclusion that the Merger should be accounted for under the acquisition method of accounting in accordance with GAAP and upon the assumptions set forth in the notes to the unaudited pro forma combined financial statements.

The C3J statement of operations and comprehensive loss for year ended December 31, 2018 was derived from its audited consolidated financial statements, included in a proxy statement on Schedule 14A filed by AmpliPhi on April 4, 2019, and is incorporated by reference.

The AmpliPhi statement of operations and comprehensive loss for the year ended December 31, 2018 was derived from its audited consolidated financial statements included in its Annual Report on Form 10-K, filed on March 25, 2019 (the “AmpliPhi 10-K”),  and is incorporated by reference.

The historical financial statements have been adjusted to give pro forma effect to events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results. The pro forma combined financial statements and pro forma adjustments have been prepared based on preliminary estimates of fair value. Differences between these preliminary estimates and the final acquisition accounting may occur and could have a material impact on the accompanying unaudited pro forma combined financial statements and the Company’s future results of operations and financial position. The pro forma combined financial statements and pro forma adjustments give effect to a 1-for-14 reverse stock split of the common stock of AmpliPhi, or the combined company and the private placement financing transaction for an aggregate value of $10.0 million completed immediately following the Merger. Unless otherwise noted herein, all references to share and per share amounts herein have been adjusted, except as otherwise disclosed, to reflect the reverse stock split. 

The unaudited pro forma combined financial statements do not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the acquisition. The unaudited pro forma combined financial data also do not include any integration costs. The unaudited pro forma combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had C3J and AmpliPhi been a combined company during the specified period. The unaudited pro forma combined financial statements, including the notes thereto,  should be read in conjunction with the

1

C3J historical audited financial statements for the year ended December 31, 2018, incorporated by reference, and in conjunction with the AmpliPhi historical audited consolidated financial statements included in the AmpiPhi 10-K.

2

Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2019
	Historical		Historical		Pro forma
	C3J Therapeutics,		AmpliPhi		Merger			Pro Forma
	Inc.		Biosciences, Inc.		Adjustments		Note	Combined
Assets
Current assets
Cash, cash equivalents and short-term investments	$	6,162,000	$	5,535,000	$	10,000,000	A3	$	18,260,000
						(3,437,000)	A6
Prepaid expenses and other current assets		456,000		407,000		—			863,000
Total current assets		6,618,000		5,942,000		6,563,000			19,123,000
Restricted cash		700,000		—		—			700,000
Operating lease right-of-use asset		2,635,000		286,000		—			2,921,000
Property and equipment, net		2,930,000		420,000		—			3,350,000
In-process research and development		—		2,731,000		7,045,000	A4		9,776,000
Acquired patents, net		—		238,000		(238,000)	A4		—
Goodwill		—		—		1,056,000	A4		1,056,000
Other noncurrent assets		136,000		—		—			136,000
Total assets	$	13,019,000	$	9,617,000	$	14,426,000		$	37,062,000
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	660,000	$	1,684,000	$	(1,142,000)	A6	$	1,202,000
Accrued compensation		383,000		1,834,000		524,000	A7		2,741,000
Current portion of operating lease liabilities		1,143,000		73,000		—			1,216,000
Deferred asset acquisition consideration		769,000		—		—			769,000
Total current liabilities		2,955,000		3,591,000		(618,000)			5,928,000
Derivative liabilities		—		33,000		(33,000)	A6		—
Deferred tax liability		—		819,000		2,114,000	A5		2,933,000
Operating lease liabilities, net of current portion		2,553,000		213,000		—			2,766,000
Deferred asset acquisition consideration, net of current portion		2,399,000		—		(1,330,000)	A8		1,069,000
Asset acquisition derivative liability, net of current portion		1,157,000		—		(1,157,000)	A9		—
Total liabilities		9,064,000		4,656,000		(1,024,000)			12,696,000
Common Stock		145,736,000		328,000		(328,000)	A1		100,000
						20,000	A3
						(145,656,000)	A2
Additional paid-in capital		—		414,566,000		(409,605,000)	A1		168,714,000
						9,980,000	A3
						145,656,000	A2
						5,749,000	A4, A5
						1,330,000	A8
						1,038,000	B1
Accumulated deficit		(141,781,000)		(409,933,000)		409,933,000	A1		(144,448,000)
						(2,262,000)	A6
						(524,000)	A7
						1,157,000	A9
						(1,038,000)	B1
Total stockholders' equity (deficit)		3,955,000		4,961,000		15,450,000			24,366,000
Total liabilities and stockholders' equity (deficit)	$	13,019,000	$	9,617,000	$	14,426,000		$	37,062,000

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Unaudited Pro Forma Combined Statement of Operations and Comprehensive Loss
For the Three Months Ended March 31, 2019
	Historical		Historical		Pro Forma
	C3J Therapeutics,		AmpliPhi		Merger			Pro Forma
	Inc.		Biosciences, Inc.		Adjustments		Note	Combined
Revenue	$	—	$	—	$	—		$	—
Operating expenses:
Research and development		2,061,000		1,494,000		248,000	B1		3,803,000
General and administrative		1,380,000		2,112,000		790,000	B1		4,282,000
Total operating expenses		3,441,000		3,606,000		1,038,000			8,085,000
Loss from operations		(3,441,000)		(3,606,000)		(1,038,000)			(8,085,000)
Total other income (expense), net		(298,000)		(11,000)		—			(309,000)
Loss before income taxes		(3,739,000)		(3,617,000)		(1,038,000)			(8,394,000)
Income tax benefit		—		—		—			—
Net loss		(3,739,000)		(3,617,000)		(1,038,000)			(8,394,000)
Unrealized gain on available-for-sale securities		—		—		—			—
Net loss and comprehensive loss	$	(3,739,000)	$	(3,617,000)	$	(1,038,000)		$	(8,394,000)
Net loss per share, basic	$	(0.04)	$	(0.11)				$	(0.85)
Weighted-average common shares outstanding, basic		94,320,106		32,390,144		(116,827,257)	B2		9,882,993
Net loss per share, diluted	$	(0.04)	$	(0.11)				$	(0.85)
Weighted-average common shares outstanding, diluted		94,320,106		32,390,144		(116,827,257)	B2		9,882,993

4

Unaudited Pro Forma Combined Statement of Operations and Comprehensive Loss
For the Twelve Months Ended December 31, 2018
	Historical		Historical		Pro Forma
	C3J Therapeutics,		AmpliPhi		Merger			Pro Forma
	Inc.		Biosciences, Inc.		Adjustments		Note	Combined
Revenue	$	—	$	—	$	—		$	—
Operating expenses:
Research and development		8,372,000		4,892,000		990,000	B3		14,254,000
Acquired in-process resarch and development		6,767,000		—		—			6,767,000
General and administrative		2,519,000		5,702,000		3,161,000	B3		11,382,000
Impairment charges		—		1,930,000		—			1,930,000
Total operating expenses		17,658,000		12,524,000		4,151,000			34,333,000
Loss from operations		(17,658,000)		(12,524,000)		(4,151,000)			(34,333,000)
Total other income (expense), net		956,000		86,000		—			1,042,000
Loss before income taxes		(16,702,000)		(12,438,000)		(4,151,000)			(33,291,000)
Income tax benefit		—		328,000		—			328,000
Net loss		(16,702,000)		(12,110,000)		(4,151,000)			(32,963,000)
Unrealized gain on available-for-sale securities		7,000		—		—			7,000
Net loss and comprehensive loss	$	(16,695,000)	$	(12,110,000)	$	(4,151,000)		$	(32,956,000)
Net loss per share, basic	$	(0.18)	$	(0.64)				$	(3.69)
Weighted-average common shares outstanding, basic		94,320,106		18,980,796		(104,375,720)	B4		8,925,182
Net loss per share, diluted	$	(0.18)	$	(0.64)				$	(3.69)
Weighted-average common shares outstanding, diluted		94,320,106		19,059,895		(104,449,169)	B4		8,930,832

5

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. Description of Transaction and Basis of Presentation

Description of Transaction

On January 3, 2019, C3J entered into an Agreement and Plan of Merger and Reorganization with AmpliPhi, subsequently amended on March 25, 2019 (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, C3J will be merged into a subsidiary of AmpliPhi and will become the surviving entity (the “Merger”). Concurrent with the Merger, certain C3J investors committed $10.0 million in exchange for shares of AmpliPhi common stock immediately following the closing of the Merger. The references to “the Company” in this Note 1 refer to the combined merged companies, named Armata Pharmaceuticals, Inc. (the “Company”),  following the Merger.

Upon completion  of the Merger, current AmpliPhi stockholders will own approximately 24% of the fully-diluted combined Company  and current C3J stockholders will own approximately 76% of the fully-diluted combined Company.

On May 9, 2019, prior to the closing of the Merger, AmpliPhi completed a 1-for-14 reverse stock split. All share and per share amounts have been retrospectively adjusted for disclosure in the unaudited pro forma combined financial statements.

Basis of Presentation

The unaudited pro forma combined financial statements  were prepared  in accordance  with the regulations  of the SEC Regulation S-X, and are intended to show how the Merger might have affected the historical financial statements  if the Merger had been completed as of January 1, 2019 for the purposes of the balance sheet and statement of operations for the three months ended March 31, 2019, and on January 1, 2018 for the purposes of the statement of operations for the year ended December 31, 2018.

Based on the terms of the Merger, C3J is deemed to be the acquiring company for accounting purposes and the Company has preliminarily concluded the merger represents a business combination pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, or ASC 805. The Company has not completed a valuation analysis of the fair market value of AmpliPhi’s assets to be acquired and liabilities to be assumed.

Using the total consideration for the merger, the Company has estimated the allocations to such assets and liabilities.  This preliminary purchase price allocation has been used to prepare pro forma adjustments in the unaudited pro forma combined balance sheet. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The pro forma adjustments are preliminary and based on management’s estimates of the fair value of the assets acquired and liabilities assumed and have been prepared to illustrate the estimated effect of the acquisition.  These estimates are based on the most recently available information. To the extent there are material differences upon completion of the final purchase price allocation, the assumptions  and estimates set forth in the unaudited pro forma combined financial statements could change significantly.

2. Purchase Price

The total consideration for the Merger, consummated on May 9, 2019, is as follows (in thousands):

Fair value of AmpliPhi stock outstanding	$	10,490
Estimated fair value of in-the-money warrants		220
Total	$	10,710

The fair value of AmpliPhi common stock used in determining the purchase price was $0.32 per share which was the market price of AmpliPhi’s common stock on May 9, 2019, the closing date of the transaction. Under the acquisition method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of AmpliPhi based on their estimated fair values as of the Merger closing date. The excess of the purchase price over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

6

The allocation of total preliminary estimated purchase price to the acquired tangible assets and liabilities assumed of AmpliPhi based on the estimated fair values as of March 31, 2019 is as follows (in thousands):

Cash and cash equivalents	$	5,535
Fixed assets and prepaid expenses		827
Intangible assets		9,776
Goodwill		1,056
Operating lease right-of use asset		286
Deferred tax liability		(2,933)
Assumed liabilities		(3,837)
Total	$	10,710

The allocation of the estimated purchase price is preliminary because the Company has not completed the detailed valuations, studies, and necessary calculations as required by ASC 805. The final determination of the purchase price allocation is anticipated to be based on the fair values of assets, including identifiable intangible assets acquired, and the fair values of liabilities assumed as of the Merger closing date. The final amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented in the unaudited pro forma combined financial statements, including differences in the amount  of capitalized intangible asset recorded as acquired in-process research and development, changes in fair values of property, plant and equipment, and/or  recognition of goodwill.

3. Pro Forma Combined Earnings Per Share

The pro forma combined weighted average share outstanding included in the calculation of basic and diluted pro forma combined earnings (loss) per share for the periods ended March 31, 2019 and December 31, 2018 and March 31, 2019 consist of the following and takes into consideration the 1-for-14 reverse stock split effected on the closing date of the Merger:

	Three months ended		Year ended
	March 31, 2019		December 31, 2018
Net Loss per share, basic:
Historical AmpliPhi weighted average shares outstanding, basic		32,390,144		18,980,796
Adjustment for reverse stock split		1:14		1:14
AmpliPhi adjusted weighted average shares outstanding, basic		2,313,582		1,355,771
Shares issued to C3J		5,578,142		5,578,142
Shares issued for $10.0 million private placement financing		1,991,269		1,991,269
Total newly issued shares		7,569,411		7,569,411
Total weighted average shares outstanding, basic		9,882,993		8,925,182
Pro forma combined net loss		(8,394,000)		(32,963,000)
Net loss per share, basic	$	(0.85)	$	(3.69)

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	Three months ended		Year ended
	March 31, 2019		December 31, 2018
Net Loss per share, diluted:
Historical AmpliPhi weighted average shares outstanding, diluted		32,390,144		19,059,895
Adjustment for reverse stock split		1:14		1:14
AmpliPhi adjusted weighted average shares outstanding, diluted		2,313,582		1,361,421
Shares issued to C3J		5,578,142		5,578,142
Shares issued for $10.0 million private placement financing		1,991,269		1,991,269
Total newly issued shares		7,569,411		7,569,411
Total weighted average shares outstanding, diluted		9,882,993		8,930,832
Pro forma combined net loss		(8,394,000)		(32,963,000)
Net loss per share, diluted	$	(0.85)	$	(3.69)

4. Pro Forma Adjustments

The unaudited pro forma combined financial statements include pro forma adjustments to give effect to certain significant transactions as a direct result of the Merger and acquisition of AmpliPhi by C3J for accounting purposes.

The pro forma adjustments reflecting the completion of the Merger are based upon the preliminary accounting analysis conclusion that the Merger should be accounted for under the acquisition method of accounting and upon the assumptions set forth below.

The unaudited pro forma combined financial statements reflect the effect of the 1-for-14 reverse stock split.

The pro forma adjustments are as follows:

A1: To reflect the elimination of AmpliPhi’s historical stockholders’ equity balances, including accumulated deficit.

A2: To adjust common stock to reflect $0.01 par value for total shares outstanding upon consummation of the Merger, with offset to Additional Paid-in Capital.

A3: To reflect $10.0 million in proceeds from the sale of combined company common stock in a private placement financing transaction completed immediately after the closing of the Merger.

A4: To reflect the preliminary estimated fair value adjustment to intangible assets acquired in the Merger, including the recognition of goodwill.

A5: To eliminate AmpliPhi’s deferred tax liability related to intangible assets from business combination transactions prior to this merger and record deferred tax liability related to the intangible assets based on its fair value (assumes a 30% tax rate applied to intangible assets acquired).

A6: To reflect vendor payments for strategic advisor, legal, accounting and other direct costs related to the Merger, and related extinguishment and cash payment for liability classified warrants upon closing of the Merger, a portion of which are recorded as liabilities in AmpliPhi’s or C3J’s financial statements as of March 31, 2019.

A7: To accrue for severance costs directly related to the Merger that were not yet recognized in AmpliPhi’s or C3J’s financial statements as of March 31, 2019.

A8: To record a reduction to the value of the deferred asset acquisition consideration, pursuant to the SGI asset acquisition amended purchase price provisions discussed in Note 12, Asset Acquisition, in the footnotes to the audited C3J financial statements for the year ended December 31, 2018.

A9: To record the extinguishment of the Asset acquisition derivative liability, pursuant to the SGI asset acquisition amended purchase price provisions discussed in Note 12, Asset Acquisition, in the footnotes to the audited C3J financial statements for the year ended December 31, 2018.

8

B1: To recognize compensation expense related to certain C3J’s restricted stock awards that will begin vesting upon the closing of the Merger for the three months ended March 31, 2019.

B2: To adjust basic and diluted weighted average shares outstanding as of March 31, 2019 to reflect (i) the AmpliPhi 1-for-14 reverse stock split, (ii) C3J merger exchange ratio, (iii) shares issued to Synthetic Genomics Corporation, and (iv) shares issued for $10 million financing upon merger consummation.

B3: To recognize compensation expense related to certain C3J’s restricted stock awards that will begin vesting upon the closing of the Merger for the twelve months ended March 31, 2019.

B4: To recognize compensation expense related to certain C3J’s restricted stock awards that will begin vesting upon the closing of the Merger for the twelve months ended March 31, 2019.

9