What changed in this filing

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Item 1A. Risk Factors

2020-11-10 compared with 2020-08-06 · 154 added, 159 removed, 96 unchanged (77% of the section changed)

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consolidated financial statements for the years ended December 31, 2019 and 2018 contains an explanatory paragraph regarding our

ability to continue as a going concern and the notes to our financial statements for the quarter ended June 30, 2020 mention there

being substantial doubt about our ability to continue as a going concern.

Our consolidated financial statements as of December 31,

2019 have been prepared under the assumption that we will continue as a going concern for the next twelve months.

our independent registered public accounting firm has issued a report that includes an explanatory paragraph referring to our recurring

losses from operations (anticipated continued losses in the future) and net capital deficiency that raise substantial doubt about

our ability to continue as a going concern without additional capital becoming available.

Our consolidated financial statements as of December 31, 2019 did not include any adjustments that might result from the outcome of this

The consolidated financial statements for the quarter ended

June 30, 2020 have been prepared assuming we will continue as a going concern.

We continue to incur losses and, as of June 30,

2020, we had an accumulated deficit of approximately $242.3 million.

Our consolidated financial statements as of June 30, 2020

do not include any adjustments that might result from the outcome of this uncertainty.

ability to continue as a going concern and the notes to our financial statements for the quarter ended September 30, 2020 mention

there being substantial doubt about our ability to continue as a going concern.

Our consolidated financial statements as

of December 31, 2019 have been prepared under the assumption that we will continue as a going concern for the next twelve

In addition, our independent registered public accounting firm has issued a report that includes an explanatory paragraph

referring to our recurring losses from operations (anticipated continued losses in the future) and net capital deficiency that

raise substantial doubt about our ability to continue as a going concern without additional capital becoming available.

Our consolidated

financial statements as of December 31, 2019 did not include any adjustments that might result from the outcome of this uncertainty.

The consolidated financial statements for

the quarter ended September 30, 2020 have been prepared assuming we will continue as a going concern.

We continue to incur losses

and, as of September 30, 2020, we had an accumulated deficit of approximately $245 million.

Our consolidated financial statements

as of September 30, 2020 do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to continue as a going concern

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programs or commercialization efforts.

During the six months ended June 30, 2020, our operating activities

used net cash of approximately $7.0 million and our cash and cash equivalents were $8.1 million as of June 30, 2020.

With the exception

of the three months ended June 30, 2010 and the three months ended December 31, 2017, we have experienced significant losses since

inception and have a significant accumulated deficit.

As of June 30, 2020, our accumulated deficit totaled approximately $242.3

million on a consolidated basis.

We do not have sufficient capital to fund our operations beyond twelve months following the issuance

date of this Quarterly Report on Form 10-Q.

We expect to incur additional operating losses in the future and therefore expect our

cumulative losses to increase.

With the exception of the quarter ended September 30, 2010, and limited laboratory revenues from

Adeona Clinical Laboratory, which we sold in March 2012, we have generated very minimal revenues.

We do not expect to derive revenue

from any source in the near future until we or our potential partners successfully commercialize our products.

We expect our expenses

to increase in connection with our anticipated activities, particularly as we continue research and development, initiate and conduct

clinical trials, recommence clinical trials that have been on hold or postponed and seek marketing approval for our product candidates.

Until such time as we receive approval from the FDA and other regulatory authorities for our product candidates, we will not be

permitted to sell our products and therefore we will not have product revenues from the sale of products.

For the foreseeable future

we will have to fund all of our operations and capital expenditures from equity and debt offerings, cash on hand, licensing and

collaboration fees and grants, if any.

During the nine months ended September

30, 2020, our operating activities used net cash of approximately $9.0 million and our cash and cash equivalents were $6.0 million

as of September 30, 2020.

With the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017,

we have experienced significant losses since inception and have a significant accumulated deficit.

As of September 30, 2020, our

accumulated deficit totaled approximately $245 million on a consolidated basis.

We do not have sufficient capital to fund our operations

beyond twelve months following the issuance date of this Quarterly Report on Form 10-Q.

We expect to incur additional operating

losses in the future and therefore expect our cumulative losses to increase.

With the exception of the quarter ended September

30, 2010, and limited laboratory revenues from Adeona Clinical Laboratory, which we sold in March 2012, we have generated very

minimal revenues.

We do not expect to derive revenue from any source in the near future until we or our potential partners successfully

commercialize our products.

We expect our expenses to increase in connection with our anticipated activities, particularly as we

continue research and development, initiate and conduct clinical trials, recommence clinical trials that have been postponed and

seek marketing approval for our product candidates.

Until such time as we receive approval from the FDA and other regulatory authorities

for our product candidates, we will not be permitted to sell our products and therefore we will not have product revenues from

the sale of products.

For the foreseeable future we will have to fund all of our operations and capital expenditures from equity

and debt offerings, cash on hand, licensing and collaboration fees and grants, if any.

We will need to raise additional capital

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Based on our current plans, our cash and cash equivalents will not be sufficient to complete our

planned Phase 3 clinical trial for SYN-004 or our planned Phase 3 clinical trial for SYN-010, which are expected to require significant

cash expenditures.

In addition, based on the anticipated significant cost of a Phase 3 clinical program in a broad indication for

SYN-004, we expect it will not be feasible for us to initiate and complete this trial at this time without a partner given the

capital constraints tied to our current market cap and share price.

In addition, based on the anticipated cost of our planned Phase

3 clinical trial for SYN-010, we expect that we may also reach the same determination regarding the feasibility of initiating and

completing the trial without a partner given the capital constraints tied to our current market cap and share price at such time.

To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution.

Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business and also

have a dilutive effect on our stockholders.

A failure otherwise to secure additional funds when needed in the future whether through

an equity or debt financing or a sufficient amount of capital without a strategic partnership could result in us being unable to

complete planned preclinical and clinical trials or obtain approval of our product candidates from the FDA and other regulatory

In addition, we could be forced to delay, discontinue or curtail product development, forego sales and marketing efforts,

and forego licensing in attractive business opportunities.

Our ability to raise capital through the sale of securities is currently

limited by the rules of the SEC and NYSE American that place limits on the number and dollar amount of securities that may be sold.

There can be no assurances that we will be able to raise the funds needed, especially in light of the fact that our ability to

sell securities registered on registration statement Form S-3 will be limited until such time the market value of our voting securities

held by non-affiliates is $75 million or more.

We also may be required to seek collaborators for our product candidates at an earlier

stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available.

planned Phase 3 clinical trial for SYN-004 or post-Phase 1 future clinical programs for SYN-020, which are expected to require

significant cash expenditures.

In addition, based on the anticipated significant cost of a Phase 3 clinical program in a broad

indication for SYN-004, we expect it will not be feasible for us to initiate and complete this trial at this time without a partner

given the capital constraints tied to our current market cap and share price.

To the extent that we raise additional funds by issuing

equity securities, our stockholders may experience significant dilution.

Any debt financing, if available, may involve restrictive

covenants that may impact our ability to conduct our business and also have a dilutive effect on our stockholders.

A failure otherwise

to secure additional funds when needed in the future whether through an equity or debt financing or a sufficient amount of capital

without a strategic partnership could result in us being unable to complete planned preclinical and clinical trials or obtain approval

of our product candidates from the FDA and other regulatory authorities.

In addition, we could be forced to delay, discontinue

or curtail product development, forego sales and marketing efforts, and forego licensing in attractive business opportunities.

Our ability to raise capital through the sale of securities is currently limited by the rules of the SEC and NYSE American that

place limits on the number and dollar amount of securities that may be sold.

There can be no assurances that we will be able to

raise the funds needed, especially in light of the fact that our ability to sell securities registered on registration statement

Form S-3 will be limited until such time the market value of our voting securities held by non-affiliates is $75 million or more.

We also may be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable

and on terms that are less favorable than might otherwise be available.

The COVID-19 global health crisis has impacted our planned

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trials and expect to experience additional disruptions as the pandemic continues, including:

halting enrollment of new patients into our SYN-010 clinical study during the first and second quarter of 2020;

unwillingness of potential study participants to enroll in new clinical trials and/or visit healthcare facilities;

postponement in clinical site initiation for our SYN-004 clinical study;

postponement of the initiation of our SYN-020 single ascending dose (SAD) study

diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

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affected by the pandemic.

Such events could result in the complete or partial closure of clinical trial sites, one or more manufacturing

Such events could result in the complete or partial closure of clinical trial sites or one or more manufacturing

facilities which could impact our supply of our clinical product candidates.

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harm our business.

Difficulties enrolling patients in our clinical trials

or delays in enrollment are expected to result in our clinical development activities being delayed or otherwise adversely affected.

Difficulties enrolling patients in

our clinical trials or delays in enrollment are expected to result in our clinical development activities being delayed or otherwise

adversely affected.

Delays in patient enrollment may result

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clinical data may require rigorous screening criteria which may result in unintended and higher than anticipated patient-related

screen-fail rates, as has occurred with our current investigator-sponsored Phase 2b clinical study conducted by CSMC.

screen-fail rates, as had occurred with our current investigator-sponsored Phase 2b clinical study conducted by CSMC.

lead to delays in completion of clinical trials as well as additional expense for recruitment of patients.

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in clinical testing of our product candidates due to COVID-19 and may in the future experience other delays.

We do not know

when the planned SYN-004 clinical trial will initiate or when the SYN-010 clinical trial will recommence enrollment.

delays may result in the need for trials to be redesigned and will impact whether they will be completed on schedule, if at

Clinical trials can be delayed for a variety of reasons, including the COVID-19 pandemic, delays in obtaining regulatory

approval to commence a clinical trial, in securing clinical trial agreements with prospective sites with acceptable terms, in

obtaining institutional review board approval to conduct a clinical trial at a prospective site, in recruiting patients to

participate in a clinical trial or in obtaining sufficient supplies of clinical trial materials.

Manufacturing considerations

for clinical development candidates may include an expected several month lead time following a decision to commence any

clinical trial(s) and capacity considerations of our third-party contract manufacturers to provide clinical supply of our

product candidates could cause delays in clinical trials.

Many factors affect patient enrollment, including the size of the

patient population, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, competing

clinical trials and new drugs approved for the conditions we are investigating.

Clinical investigators will need to decide

whether to offer their patients enrollment in clinical trials of our product candidates versus treating these patients with

commercially available drugs that have established safety and efficacy profiles.

Any delays in completing our clinical trials

will increase our costs, slow down our product development and timeliness and approval process and delay our ability to

generate revenue.

We do not know when

the planned SYN-004 clinical trial or planned SYN-020 SAD study will initiate.

These delays may result in the need for trials

to be redesigned and will impact whether they will be completed on schedule, if at all.

Clinical trials can be delayed for a variety

of reasons, including the COVID-19 pandemic, delays in obtaining regulatory approval to commence a clinical trial, in securing

clinical trial agreements with prospective sites with acceptable terms, in obtaining institutional review board approval to conduct

a clinical trial at a prospective site, in recruiting patients to participate in a clinical trial or in obtaining sufficient supplies

of clinical trial materials.

Manufacturing considerations for clinical development candidates may include an expected several

month lead time following a decision to commence any clinical trial(s) and capacity considerations of our third-party contract

manufacturers to provide clinical supply of our product candidates could cause delays in clinical trials.

Many factors affect

patient enrollment, including the size of the patient population, the proximity of patients to clinical sites, the eligibility

criteria for the clinical trial, competing clinical trials and new drugs approved for the conditions we are investigating.

investigators will need to decide whether to offer their patients enrollment in clinical trials of our product candidates versus

treating these patients with commercially available drugs that have established safety and efficacy profiles.

Any delays in completing

our clinical trials will increase our costs, slow down our product development and timeliness and approval process and delay our

ability to generate revenue.

RISKS RELATING TO OUR SECURITIES

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A failure to regain compliance with the NYSE American

stockholders’

equity listing requirements or failure to continue to meet the other listing requirements could result in a

stockholders’ equity listing requirements or failure to continue to meet the other listing requirements could result in a

de-listing of our Common Stock.

Our Common Stock is listed on the NYSE

The NYSE American’s listing standards generally mandate that we meet certain requirements relating to stockholders’

equity, stock price, market capitalization, aggregate market value of publicly held shares and distribution requirements.

assure you that we will be able to maintain the continued listing standards of the NYSE American.

The NYSE American requires companies

to meet certain continued listing criteria including a minimum stockholders’

equity of $6.0 million if an issuer has sustained

losses from continuing operations and/or net losses in its five most recent years, as outlined in the NYSE American Company Guide.

At June 30, 2020, we had a stockholders’

deficit of $6.8 million.

The NYSE American Company Guide also states that the NYSE

normally will not consider removing from listing securities of an issuer with total value of market capitalization of at least

$50.0 million and 1,100,000 shares publicly held, a market value of publicly held shares of at least $15.0 million and 400 round

lot shareholders.

Although we have more than 1,100,000 shares publicly held and 400 round lot shareholders, our stock price is

volatile and, during the first two quarters of 2018, the price of our Common Stock experienced a sustained decrease resulting in

a period where our market capitalization fell below $50.0 million.

Our market capitalization is currently below $50.0 million

On November 25, 2019, we announced that we received written

communication from the NYSE American stating we were no longer in compliance with certain continued listing standards as set forth

in the NYSE American Company Guide relating to stockholders’

equity as of September 30, 2019.

Specifically, the Deficiency

Letter stated that we were not in compliance with Section 1003(a)(iii) (requiring stockholders’

equity of $6.0 million or

more if the Company has reported losses from continuing operations and/or net losses in its five most recent fiscal years).

Deficiency Letter noted that the Company had stockholders’

equity of $4.9 million as of September 30, 2019 and had reported

net losses in its five most recent fiscal years.

On December 20, 2019, we submitted a plan of compliance to the NYSE American outlining

our plan to regain compliance with certain continued listing standards as set forth in Part 10, Section 1003(iii) of the NYSE American

Company Guide by November 25, 2020, the conclusion of the compliance plan period.

On February 7, 2020, we received notice from

the NYSE American that it had accepted our plan and granted a plan period through November 25, 2020 to regain compliance.

30, 2020 we received written communication from NYSE American stating that in addition to Section 1003(iii), the Company is also

not in compliance with Section 1003(i) and Section 1003(ii) of the NYSE American Company Guide since it reported a stockholders’

deficit of ($4.0) million as of March 31, 2020 and losses from continuing operations and/or net losses in its five most recent

fiscal years ended December 31, 2019.

As a result, the Company is now subject to the procedures and requirements set forth in Section

1009 of the Company Guide.

The Company remains subject to the conditions set forth in the Exchange’s letter dated November

25, 2019 for the initial equity noncompliance.

The NYSE Regulation staff will review our company periodically for compliance with

the initiatives outlined in the plan.

If we are not in compliance with the continued listing standards by November 25, 2020 or

if we do not make progress consistent with the plan during the plan period, NYSE Regulation staff may initiate a delisting proceeding

as appropriate.

There can be no assurance that we can regain compliance with

the listing standards of the NYSE American, or that the NYSE American will continue to list our Common Stock if we regain compliance,

or if we continue to fail to maintain the minimum stockholders’

In addition, in the future we may not be able to

maintain such minimum stockholders’

equity and/or issue additional equity securities in exchange for cash or other assets,

if available, to maintain certain minimum stockholders’

equity required by the NYSE American.

If we are delisted from the

NYSE American then our Common Stock will trade, if at all, only on the over-the-counter market, such as the OTC Bulletin Board

securities market, and then only if one or more registered broker-dealer market makers comply with quotation requirements.

Common Stock is delisted from the NYSE American due to our failure to regain compliance with the listing standards by the end of

the compliance period or for any other reason, and the market value of our shares of Common Stock held by non-affiliates remains

below $15 million, we will likely no longer be eligible to sell Common Stock pursuant to the B.

Riley FBR Sales Agreement or otherwise

utilize our shelf registration statement.

In addition, delisting of our Common Stock could depress our stock price, substantially

limit liquidity of our Common Stock and materially adversely affect our ability to raise capital on terms acceptable to us, or

Delisting from the NYSE American could also have other negative results, including the potential loss of confidence by

suppliers and employees, the loss of institutional investor interest and fewer business development opportunities.

We cannot assure

you that our Common Stock will be liquid or that it will remain listed on the NYSE American.

A failure to regain compliance with

the NYSE American stockholders’

equity requirements or failure to continue to meet the other listing requirements could result

in a de-listing of our Common Stock.

SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

More specifically, the NYSE American

requires companies to meet certain continued listing criteria including a minimum stockholders’ equity of $6.0 million if

an issuer has sustained losses from continuing operations and/or net losses in its five most recent years, as outlined in the NYSE

American Company Guide.

At September 30, 2020, we had a stockholders’ deficit of $8.8 million.

The NYSE American Company

Guide also states that the NYSE normally will not consider removing from listing securities of an issuer with total value of market

capitalization of at least $50.0 million and 1,100,000 shares publicly held, a market value of publicly held shares of at least

$15.0 million and 400 round lot shareholders.

Although we have more than 1,100,000 shares publicly held and 400 round lot shareholders,

our stock price is volatile and, during the first two quarters of 2018, the price of our Common Stock experienced a sustained decrease

resulting in a period where our market capitalization fell below $50.0 million.

Our market capitalization is currently below $50.0

On November 25, 2019, we announced that

we received written communication from the NYSE American stating we were no longer in compliance with certain continued listing

standards as set forth in the NYSE American Company Guide relating to stockholders’ equity as of September 30, 2019.

Specifically,

the Deficiency Letter stated that we were not in compliance with Section 1003(a)(iii) (requiring stockholders’ equity of

$6.0 million or more if the Company has reported losses from continuing operations and/or net losses in its five most recent fiscal

The Deficiency Letter noted that the Company had stockholders’ equity of $4.9 million as of September 30, 2019 and

had reported net losses in its five most recent fiscal years.

On December 20, 2019, we submitted a plan of compliance to the NYSE

American outlining our plan to regain compliance with certain continued listing standards as set forth in Part 10, Section 1003(iii)

of the NYSE American Company Guide by November 25, 2020, the conclusion of the compliance plan period.

On February 7, 2020, we

received notice from the NYSE American that it had accepted our plan and granted a plan period through November 25, 2020 to regain

On July 30, 2020 we received written communication from NYSE American stating that in addition to Section 1003(iii),

we were also not in compliance with Section 1003(i) and Section 1003(ii) of the NYSE American Company Guide since we reported a

stockholders’ deficit of ($4.0) million as of March 31, 2020 and losses from continuing operations and/or net losses in its

five most recent fiscal years ended December 31, 2019.

As a result, the Company is now subject to the procedures and requirements

set forth in Section 1009 of the Company Guide.

The Company remains subject to the conditions set forth in the Exchange’s

letter dated November 25, 2019 for the initial equity noncompliance.

The NYSE Regulation staff will review our company periodically

for compliance with the initiatives outlined in the plan.

If we are not in compliance with the continued listing standards by November

25, 2020 or if we do not make progress consistent with the plan during the plan period, NYSE Regulation staff may initiate a delisting

proceeding as appropriate.

There can be no assurance that we can regain

compliance with the listing standards of the NYSE American, or that the NYSE American will continue to list our Common Stock if

we regain compliance, or if we should continue to fail to maintain the minimum stockholders’ equity.

In addition, in the

future we may not be able to maintain such minimum stockholders’ equity and/or issue additional equity securities in exchange

for cash or other assets, if available, to maintain certain minimum stockholders’ equity required by the NYSE American.

we are delisted from the NYSE American then our Common Stock will trade, if at all, only on the over-the-counter market, such as

the OTC Bulletin Board securities market, and then only if one or more registered broker-dealer market makers comply with quotation

requirements.

If our Common Stock is delisted from the NYSE American due to our failure to regain compliance with the listing standards

by the end of the compliance period or for any other reason, and the market value of our shares of Common Stock held by non-affiliates

remains below $75 million, we will likely no longer be eligible to sell Common Stock pursuant to the B.

Riley FBR Sales Agreement

or otherwise utilize our shelf registration statement.

In addition, delisting of our Common Stock could depress our stock price,

substantially limit liquidity of our Common Stock and materially adversely affect our ability to raise capital on terms acceptable

to us, or at all.

Delisting from the NYSE American could also have other negative results, including the potential loss of confidence

by suppliers and employees, the loss of institutional investor interest and fewer business development opportunities.

assure you that our Common Stock will be liquid or that it will remain listed on the NYSE American.

A failure to regain compliance

with the NYSE American stockholders’ equity requirements or failure to continue to meet the other listing requirements could

result in a de-listing of our Common Stock.

UNREGISTERED SALES OF EQUITY

SECURITIES AND USE OF PROCEEDS.

We did not sell any equity securities during

the three and six months ended June 30, 2020 in transactions that were not registered under the Securities Act.

the three and nine months ended September 30, 2020 in transactions that were not registered under the Securities Act.

DEFAULTS UPON SENIOR SECURITIES.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors