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Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-06 · 116 added, 119 removed, 121 unchanged (66% of the section changed)

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We are a diversified clinical-stage company developing therapeutics designed to treat cancer and related diseases in areas of high unmet need.

As a result of the acquisition in March 2022 of Theriva Biologics, S.L.

("VCN", formerly named VCN Biosciences, S.L.), described in more detail below (the "Acquisition"), we began transitioning our strategic focus to oncology, which is now our primary focus, through the development of VCN's new oncolytic adenovirus platform designed for intravenous and intravitreal delivery to trigger tumor cell death, to improve access of co - administered cancer therapies to the tumor, and to promote a robust and sustained anti - tumor response by the patient's immune system.

Our lead product candidate, VCN - 01, a clinical stage oncolytic human adenovirus that is modified for tumor - selective replication and to express an enzyme, PH20 hyaluronidase, is currently being evaluated in a Phase 2 clinical study for the treatment of pancreatic cancer ("VIRAGE"), and has recently been used to treat patients in a Phase 1 clinical study for the treatment of retinoblastoma, and Phase 1 clinical studies for the treatment of other solid tumors including head and neck squamous cell carcinoma.

As a result of the Acquisition in March 2022, we transitioned our strategic focus to oncology through the development of VCN’s new oncolytic adenovirus platform designed for intravenous and intravitreal delivery to trigger tumor cell death, to improve access of co-administered cancer therapies to the tumor, and to promote a robust and sustained anti-tumor response by the patient’s immune system.

Our lead product candidate, VCN-01 (zabilugene almadenorepvec), is a clinical stage oncolytic human adenovirus that is modified for tumor-selective replication and to express an enzyme, PH20 hyaluronidase.

VCN-01 has been evaluated in a Phase 2b clinical study for the treatment of pancreatic cancer (“VIRAGE”), a Phase 1 clinical study for the treatment of retinoblastoma, as well as various other Phase 1 clinical studies for the treatment of other solid tumors including head and neck squamous cell carcinoma.

Prior to the Acquisition, our focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases which included our clinical development candidates:

(1) SYN-004 (ribaxamase) which is designed to degrade certain commonly used intravenous (IV) beta-lactam antibiotics within the GI tract to prevent microbiome damage, thereby preventing overgrowth and infection by pathogenic organisms such Clostridioides difficile infection (CDI) and vancomycin resistant Enterococci (VRE), and reducing the incidence and severity of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplant (HCT) recipients, and (2) SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under cGMP conditions and intended to treat both local GI and systemic diseases.

As part of our strategic transformation into an oncology focused company, we are exploring value creation options for our SYN-004 and SYN-020 assets, including out-licensing or partnering.

(1) SYN-004 (ribaxamase) which is designed to degrade certain commonly used intravenous (IV) beta-lactam antibiotics within the GI tract to prevent microbiome damage, thereby preventing overgrowth and infection by pathogenic organisms such as Clostridioides difficile infection (CDI) and vancomycin resistant Enterococci (VRE), and reducing the incidence and severity of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplant (HCT) recipients, and (2) SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under cGMP conditions and intended to treat both local GI and systemic diseases.

In February 2026, we entered into the Rasayana License Agreement with Rasayana, pursuant to which we granted Rasayana an exclusive worldwide license with the right to grant sublicenses to research, develop, manufacture and commercialize any Product (as such term is defined in the Rasayana License Agreement), which includes SYN-020, comprising, containing, or covered by the Licensed IP (as such term is defined in the Rasayana License Agreement) and/or devised, developed, or produced using the Licensed IP.

Pursuant to the terms of the Rasayana License Agreement, Rasayana will assume all responsibility and costs for the Development and Commercialization of the Products.

We believe that this arrangement will provide us with potential to derive value from our SYN-020 asset, without the need for us to continue to invest additional working capital into the further development of the product candidate, thereby allowing us to focus our efforts and expenditures on the development of our oncology assets.

Additionally, as part of our strategic transformation into an oncology focused company, we are exploring value creation options for our SYN-004 asset, including out-licensing or partnering.

Financial Developments

Reverse Stock Split

On August 15, 2024, we announced a reverse stock split (the “Reverse Stock Split”) of our issued and outstanding Common Stock, at a ratio of one (1) share of Common Stock for every twenty-five (25) shares of Common Stock, effective August 25, 2024 (the “Effective Date”).

Our Common Stock began trading on a split-adjusted basis on the NYSE American when the market opened on August 25, 2024.

The Reverse Stock Split was authorized by our Board of Directors on August 15, 2024.

Public Offering

On September 27, 2024, we consummated a public offering (the “Offering”) of an aggregate of (i) 918,600 shares (the “Shares”) of Common Stock, (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 510,000 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (iii) Common Stock purchase warrants (“Common Warrants”) to purchase up to 1,428,600 shares of Common Stock (the “Common Warrant Shares”).

Each Share and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $1.75.

Each Pre-Funded Warrant and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $1.7499.

We received aggregate gross proceeds from the Offering of approximately $2.5 million, before deducting placement agent fees and other offering expenses.

We intend to use the proceeds of the Offering primarily for working capital and general corporate purposes, including for research and development and manufacturing scale-up and may use a portion of the proceeds to invest in or acquire other products, businesses or technologies.

Each Pre-Funded Warrant was immediately exercisable for one (1) Pre-Funded Warrant Shares at an exercise price of $0.0001 per share.

Each Common Warrant has an exercise price of $2.00 per share, is immediately exercisable for one (1) Common Warrant Share, and expires five (5) years from its issuance date.

The Shares, Pre-Funded Warrants and accompanying Common Warrants were issued separately.

The exercise price of the Common Warrants and number of shares of Common Stock issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events.

The Common Warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Common Warrant Shares to the holder.

The Pre-Funded Warrants were exercisable on a cashless basis at any time.

A holder of the Common Warrants and the Pre-Funded Warrants (together with its affiliates) may not exercise any portion of the Common Warrant or Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or 9.99%, at the election of the holder) of the outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the amount of beneficial ownership of outstanding shares after exercising the holder’s Common Warrants or Pre-Funded Warrants up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.

As of October 3, 2024, all of the Pre-Funded Warrants were exercised.

Preferred Shares Conversion

On September 6, 2024, we received a notice of conversion from the holder of all of our outstanding shares of our Series C Convertible Preferred Stock and our Series D Convertible Preferred Stock to convert the 4,138 shares of Series C Convertible Preferred Stock held by them into 1,086 shares of our Common Stock at a conversion price of $30.50 per share and to convert the 100,000 shares of Series D Convertible Preferred Stock held by them into 26,230 shares of Common Stock at a conversion price of $30.50 per share.

On September 6, 2024, we issued an aggregate of 27,316 shares of Common Stock upon conversion of such shares of Series C Convertible Preferred Stock and Series D Convertible Preferred Stock.

Upon such conversion there are no shares of Series C Convertible Preferred Stock or Series D Convertible Preferred Stock outstanding.

On July 30, 2024, we received a notice of conversion from the holder of shares of our Series C Convertible Preferred Stock to convert 135,431 shares of Series C Convertible Preferred Stock into 35,523 shares of Common Stock at a conversion price of $30.50 per share.

On May 13, 2024, we received a notice of conversion from the holder of shares of our Series C Convertible Preferred Stock to convert 135,431 shares of Series C Convertible Preferred Stock into 35,523 shares of Common Stock at a conversion price of $30.50 per share.

Other Financial Developments

On September 16, 2024, we announced that the THERICEL project had been awarded funding of €2.28 million ($2.54 million) from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science, Innovation & Universities to support a collaboration between us and the Universitat Autònoma de Barcelona (“UAB”) to advance our suspension cell platform for the clinical manufacture of adenovirus- and adeno-associated virus (“AAV”) therapies.

Under the award, we received an unsecured loan of €1.33 million ($1.48 million) as a lump sum payment in the first quarter of 2025 which bears interest at a rate of 4.015% and is to be repaid over 7 years commencing three years from the date of award, and UAB will receive a grant of €0.95 million ($1.06 million) dedicated to the THERICEL project and paid in annual installments over the next 3 years.

On September 28, 2025, the Board of Directors approved the Plan to resize and restructure our company for purposes of focusing its attention on business development and licensing activities, clinical trial planning, exploratory VCN-01 (zabilugene almadenorepvec) manufacturing scale-up, limited preclinical activities related to VCN-01 and VCN-12 (the first candidate from our VCN-X discovery program), and our interactions with the FDA and the EMA for proposed pivotal clinical trials of VCN-01 in patients with mPDAC and retinoblastoma.

Pursuant to the Plan, on September 30, 2025, we implemented a workforce reduction of seven employees or 32% of the then global Company workforce.

The goal of this reduction was to direct our resources towards the activities detailed above in the Plan, which we believe will represent our best opportunity for success.

We completed the employee reduction immediately and incurred a total of approximately $520,000 in charges in connection with the workforce reduction.

These charges consisted primarily of cash severance and benefits over a three-month period, in connection with the workforce reduction.

The Plan is expected to save approximately $1.8 million in compensation and benefits annually beginning in 2026, and together with additional anticipated operating cost reductions and capital raised pursuant to the ATM Sales Agreement, we expect that it will extend our cash runway into the first quarter of 2027;

however, the current cash will only be sufficient to run certain clinical trials and no assurances can be provided and our cash could differ materially from our expectations based on various factors, many of which are out of our control.

Warrant Inducement

On October 16, 2025, we entered into a warrant inducement agreement (the “Inducement Agreement”) with certain holders named therein (the “Holders”) of existing Common Stock Purchase Warrants to purchase up to an aggregate of 8,092,280 shares of Common Stock, consisting of (i) Common Stock Purchase Warrants to purchase up to an aggregate of 1,345,000 shares of Common Stock issued on September 27, 2024 (the “September Warrants”) and (ii) Common Stock Purchase Warrants to purchase up to an aggregate of 6,747,280 shares of Common Stock issued on May 8, 2025 (the “May Warrants” and, together with the September Warrants, the “Existing Warrants”).

Pursuant to the Inducement Agreement, on October 17, 2025, the Holders exercised for cash the Existing Warrants at a reduced exercise price of $0.54 per share and, in consideration therefor, we issued to the Holders new Common Stock Purchase Warrants (the “New Warrants”) to purchase an aggregate of 16,184,560 shares of common stock, equal to 200% of the number of shares of common stock underlying the Existing Warrants, at an exercise price of $0.54 per share, which New Warrants are exercisable for a term of five (5) years from the date of the approval from our stockholders of the full exercise of the New Warrants and the issuance of all of the shares of common stock issuable upon the exercise thereof.

We received aggregate gross proceeds of approximately $4.4 million for the exercise of the Existing Warrants, before deducting placement agent fees of $356,000 and other expenses of $72,000 payable by the Company.

We expect to use the net proceeds from the Warrant Exercise for working capital.

AGP served as our exclusive financial advisor in connection with the warrant exercise and other transactions described in the Inducement Agreement.

Pursuant to the terms of an engagement letter, dated October 16, 2025, by and between us and AGP, we agreed to pay to AGP a cash fee equal to 7.0% of the aggregate gross proceeds received from the Holders upon exercise of the Existing Warrants and reimbursement of certain expenses.

2025 Annual Stockholder’s Meeting

On October 31, 2024, we held our 2024 Annual Meeting of Stockholders (the “Annual Meeting”).

On August 29, 2025, we held our 2025 Annual Meeting of Stockholders (the “Annual Meeting”).

At the Annual Meeting, our stockholders (i) elected Jeffrey J.

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(iii) approved an amendment (“Amendment No.

2”) to our 2020 Stock Incentive Plan (the “2020 Stock Incentive Plan”) to (a) increase the number of shares of Common Stock that we will have authority to grant under the 2020 Stock Incentive Plan from 280,000 shares of Common Stock to 2,500,000 shares of Common Stock and (b) to amend the annual non-employee director grant limit to 250,000 shares of Common Stock;

and (iv) approved an amendment to our Articles of Incorporation to increase the number of authorized shares of Common Stock to 350,000,000 shares.

On November 1, 2024, we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of Nevada (the “Certificate of Change”) that was effective on such date that increased the number of our authorized shares of Common Stock, from 14,000,000 shares to 350,000,000 shares.

2”) to our 2020 Stock Incentive Plan (the “2020 Stock Incentive Plan”) to (a) increase the number of shares of common stock that we will have authority to grant under the 2020 Stock Incentive Plan from 2,500,000 shares of common stock to 4,500,000 shares of common stock and (iii) approved, on an advisory basis, the compensation of our named executive officers.

Tax Credit Receivable

During the years ended December 31, 2024 and 2023, we recognized a $1.4 million and $1.8 million, respectively, tax credit receivable and offsetting deferred R&D tax credit.

For the years ended December 31, 2025 and 2024, we recognized a $3.4 million and $3.2 million, respectively, tax credit receivable and a corresponding current and non-current deferred research and development tax credit receivable of $1.7 million and $815,000 for the year ended December, 31 2025 and $1.6 million and $762,000 for the year ended December 31, 2024.

We participate in a research and development program sponsored by the Spanish government.

The program provides for reimbursement of certain expenses incurred in research and development efforts we incur in Spain.

The program provides for reimbursement of certain expenses incurred in research and development efforts we conduct in Spain.

The reimbursements can be through either tax credits or direct refunds.

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In the quarter ended June 30, 2024, we completed the certification and applied for direct reimbursement, for our qualifying research and development expenses incurred in the year ended December 31, 2023.

We received approvals from the Spanish government in September and October 2023.

We received approvals from the Spanish government in September and December 2024.

The credit will be amortized as a contra-expense over the two-year period 2025 and 2026.

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At Market Issuance Sales Agreement

On May 2, 2024, the Company and A.G.P./Alliance Global Partners (“AGP”) entered into Amendment No.

2 (“Amendment No.

2”) to that certain Amended and Restated Sales Agreement among the Company, AGP and FBR Capital Markets & Co.

(now known as B.

Riley Securities) dated as of February 9, 2021, as amended by Amendment No.

1 thereto dated May 3, 2021 (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, at its option, shares of the Common Stock through A.G.P./Alliance Global Partners, as sales agent, in an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”).

Sales in the “at the market offering” may occur under the Company’s current effective registration statement on Form S-3 (File No.

333-279077) declared effective on September 25, 2024.

In addition, on May 1, 2024, the Company and B.

Riley Securities, Inc.

mutually agreed to enter into a notice of termination whereby B.

Riley Securities, Inc.

would no longer be a party to the Sales Agreement.

During the year ended December 31, 2024, the Company sold through the Sales Agreement approximately 569,000 shares of the Company’s Common Stock and received net proceeds of approximately $3.6 million.

On June 20, 2025, we filed a prospectus supplement to our Registration Statement on Form S-3, as amended (File No.

333-279077), which was declared effective by the SEC on September 25, 2024 (the “Registration Statement”), relating to the offer and sale of up to $2,534,352 of shares of our Common Stock, from time to time through or directly to A.G.P./Alliance Global Partners (the “Sales Agent”) pursuant to the terms of that certain Amended and Restated At Market Issuance Sales Agreement, dated February 9, 2021, as amended by Amendment No.

1 thereto, dated May 3, 2021, as further amended by Amendment No.

2 thereto, dated May 2, 2024 (the “ATM Sales Agreement”).

On October 24, 2025, we filed prospectus supplement no.

2 to the Registration Statement, relating to the offer and sale of up to $4,019,597 of shares of our Common Stock pursuant to the ATM Sales Agreement, and on October 29, 2025, we filed

prospectus supplement no.

3 to the Registration Statement, relating to the offer and sale of up to $2,894,225 of shares of our Common Stock pursuant to the ATM Sales Agreement.

Sales of Common Stock, if any, under the prospectus supplements will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.

The Sales Agent is not required to sell any specific amount, but will act as our Sales Agent using commercially reasonable efforts consistent with its normal trading and sales practices.

The Sales Agent will be entitled to compensation at a commission rate equal to up to 3.0% of the gross sales price per share of Common Stock sold.

During the three months and year ended December 31, 2025, we sold approximately 17,291,307 and 17,998,117 shares of our Common Stock, respectively, pursuant to the ATM Sales Agreement and received net proceeds of approximately $6.5 million and $6.8 million, respectively.

During the first quarter of 2026, we sold approximately 10,204,319 shares of our Common Stock pursuant to the ATM Sales Agreement and received net proceeds of approximately $2.3 million.

Rasayana License Agreement

On February 17, 2026, we entered into the Rasayana License Agreement with Rasayana, pursuant to which we received an upfront payment of $300,000 from Rasayana.

In addition, we are entitled to receive from Rasayana development milestone payments of up to an aggregate of $16.0 million and sales milestone payments of up to an aggregate of $22.0 million upon achievement of certain development and net sales milestones with respect to Products.

In addition, during the Royalty Term (as such term is defined in the Rasayana License Agreement), we are entitled to receive tiered royalties ranging from low to mid single digits on net sales of a Product.

We will also be entitled to receive a certain percentage of any Sublicense Revenue (as such term is defined in the Rasayana License Agreement) received by Rasayana or its affiliates.

Under the terms and conditions of the Rasayana License Agreement, Rasayana will assume all responsibility and costs for the development and commercialization of the Products.

Accordingly, going forward, we do not expect to continue to conduct research and development activities, including conducting further clinical studies, with respect to SYN-020, and do not expect to incur material expenditures in connection therewith.

See the section entitled “ Our Current Collaborations – Rasayana License Agreement ” in Part I Item 1 of this Auual Report on Form 10-K for additional information regarding the Rasayana License Agreement.

Our Current Product Pipeline

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For other abbreviations see the text.

¹Final Phase 1b/2a study cohort contingent on grant funding or partnership.

²Pursuant to the Rasayana License Agreement, commencing February 7, 2026, Rasayana is responsible for all development and commercialization efforts, including all costs related thereto, of SYN-020, and is obligated to use commercially reasonable efforts to meet certain specified development milestones, as more particularly set forth in the Rasayana License Agreement.

Additional products with preclinical proof-of-concept include SYN-006 (carbapenemase) to prevent aGVHD, CDI, and microbiome damage in patients treated with carbapenem antibiotics and SYN-007 (ribaxamase) DR to prevent antibiotic associated diarrhea with oral β-lactam antibiotics.

²Depending on funding/partnership.

SYN-004 may enter a U.S.

Food and Drug Administration (“FDA”)-agreed Phase 3 clinical trial for the treatment of CDI.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP) which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses in the periods presented.

GAAP”) which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses in the periods presented.

We believe that the accounting estimates employed are appropriate and resulting balances are reasonable;

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There are accounting policies, each of which requires significant judgments and estimates on the part of management, that we believe are significant to the presentation of our consolidated financial statements.

The most significant accounting estimates relate to research and development costs, valuation of Goodwill and IPRD, contingent consideration, and impairment of long-lived assets.

Goodwill and IPR&D

We classify intangible assets into two categories:

(1) intangible assets with indefinite lives not subject to amortization and (2) goodwill.

Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with their carrying amount.

If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess.

Indefinite-lived intangible assets, such as goodwill, are not amortized.

We test the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate evidence a potential impairment exists, using a fair value-based test.

If a reporting unit’s carrying value exceeds its fair value, then we will record a goodwill impairment charge for the excess amount.

The most significant accounting estimates relate to valuation of IPR&D and contingent consideration.

IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects.

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If development is terminated or abandoned, we may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value.

Goodwill represents the excess of the purchase price paid when we acquired VCN in March 2022, over the fair values of the acquired tangible or intangible assets and assumed liabilities.

We conduct an impairment test of goodwill on an annual basis as of October 1 of each year and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce our fair value below our net equity value.

We conduct an impairment test of IPR&D on an annual basis as of October 1 of each year and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce our fair value below our net equity value.

Contingent Consideration

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Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets.

Long-Lived Assets

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

Recoverability measurement and estimating of undiscounted cash flows is done at the lowest possible level for which we can identify assets.

If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of assets exceeds the fair value of the assets.

Research and Development Costs

We expense research and development costs associated with developmental products not yet approved by the FDA to research and development expense as incurred.

Research and development costs consist primarily of license fees (including upfront payments), milestone payments, manufacturing costs, salaries, stock-based compensation and related employee costs, fees paid to consultants and outside service providers for laboratory development, legal expenses resulting from intellectual property prosecution and other expenses relating to the design, development, testing and enhancement of our product candidates.

Research and development expenses include external CRO services.

We make payments to the CROs based on agreed upon terms and may include payments in advance of study

We review and accrue CRO expenses based on services performed and rely on estimates of those costs applicable to the stage of completion of study as provided by the CRO.

Accrued CRO costs are subject to revisions as such studies progress to completion.

At December 31, 2024 and 2023, we have accrued CRO expenses of $2.4 million and $1.7 million, respectively, that are included in accrued expenses.

As of December 31, 2024, and 2023, we have prepaid CRO costs of $365,000 and $1.1 million, respectively, that are included in prepaid expenses.

Results of Operations

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General and administrative expenses increased to $15.4 million for the year ended December 31, 2025, from $7.4 million for the year ended December 31, 2024.

This increase of 4% is primarily comprised of the contingent consideration adjustment of $700,000 in the current year compared to a decrease of $660,000 in the prior, year having a cumulative of $1.4 million, offset by a decrease in compensation costs, consulting fees, and lower director and officer insurance.

This increase of 109% is primarily comprised of the contingent consideration adjustment of $9.0 million due to the VIRAGE Phase 2b clinical trial of VCN-01 (zabilugene almadenorepvec) in PDAC achieving its primary survival and safety endpoints, offset by a decrease in compensation costs, investor relations costs, consulting fees, and lower director and officer insurance.

The charge relating to stock-based compensation expense was $379,000 for the year ended December 31, 2025, compared to $438,000 for the year ended December 31, 2024.

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Research and development expenses decreased to $8.6 million for the year ended December 31, 2025, from $12.0 million for the year ended December 31, 2024.

This decrease of 16% is primarily the result of lower clinical trial expenses related to our VIRAGE Phase 2 clinical trial of VCN-01 in PDAC, lower expenses related to our Phase 1a clinical trial of SYN-020, decreased expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients and the recognition of the research and development tax credit, offset by increased expenses related to the Phase 1 trial of intravitreal VCN-01 in patients with retinoblastoma.

We anticipate research and development expense to increase as we complete our VIRAGE Phase 2 clinical trial of VCN-01and plan for our Phase 3 clinical trial of VCN-01 in PDAC, advance our VCN-01 program in retinoblastoma, expand GMP scale-up manufacturing activities for VCN-01, and continue supporting our other preclinical and discovery initiatives.

This decrease of 28% is primarily the result of lower clinical trial expenses related to the completion of our VIRAGE Phase 2b clinical trial of VCN-01 (zabilugene almadenorepvec) in PDAC, lower clinical trial expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients and lower indirect cost related to compensation, offset by higher patent expenses related to SYN-020.

We anticipate research and development expense to decrease in 2026 as a result of the workforce reduction Plan that was implemented on September 30, 2025, the completion of our VIRAGE Phase 2b clinical trial of VCN-01 and our focus on regulatory interactions around potential pivotal clinical trials of VCN-01 in PDAC and retinoblastoma, the planning for VCN-01 manufacturing scale-up activities, and continuing to support our other preclinical and discovery initiatives.

In addition, pursuant to the terms of the Rasayana License Agreement that we entered into in February 2026, we will not continue to conduct research and development activities with respect to SYN-020, and do not expect to incur material expenditures in connection therewith since Rasayana is now responsible for all such expenditures including patent expenses.

Research and development expenses also include a charge relating to non-cash stock-based compensation expense of $281,000 for the year ended December 31, 2025, compared to $233,000 for the year ended December 31, 2024.

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(in thousands)

VCN-01 (zabilugene almadenorepvec)

SYN-004 (ribaxamase)

Other therapeutic areas

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Total research and development

IPRD and Goodwill Impairment

IPR&D and Goodwill Impairment

During the year ended December 31, 2024, we experienced a sustained decline in the quoted market price of our common stock and we deemed this to be a triggering event for impairment.

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The decrease in the valuation was primarily driven by an increase in the discount rate which was impacted by an increase in the company specific risk premium, and not by material changes to the clinical and administrative operations of the business.

There were no impairments during the year ended December 31, 2025.

Total Other Income

Other income was $312,000 for the year ended December 31, 2025, compared to other income of $693,000 for the year ended December 31, 2024.

Other income for the year ended December 31, 2024 is primarily comprised of interest income of $697,000 and an exchange loss of $4,000.

Other income for the year ended December 31, 2023 is primarily comprised of interest income of $1,439,000 offset by an exchange gain of $3,000.

Income Tax Benefit

Our income tax benefit was $1.6 million for the year ended December 31, 2023, solely as a result of net operating losses incurred by our VCN subsidiary acquired in 2022.

There was no income tax benefit recorded for the year ended December 31, 2024.

Our effective tax rate for the years ended December 31, 2024 and 2023 was zero and 8.2%, respectively, which differs from the federal statutory rate of 21% primarily due to the change in our valuation allowance, net operating loss true ups, VCN’s foreign tax benefit, the fair market value adjustment for the contingent consideration, along with the effects of other nondeductible permanent differences.

Other income for the year ended December 31, 2025 is primarily comprised of interest income of $287,000 and foreign currency exchange gain of $25,000.

Other income for the year ended December 31, 2024 is primarily comprised of interest income of $697,000 and foreign currency exchange loss of $4,000.

Our net loss for the year ended December 31, 2025 was $23.7 million, or ($1.96) per common share, compared to $25.7 million, or ($19.03) per common share for the year ended December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2024, we have a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, the Company has experienced significant losses and incurred negative cash flows since inception.

As of December 31, 2025, we had a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, we have experienced significant losses and incurred negative cash flows since inception.

We have incurred an accumulated deficit of $358.7 million as of December 31, 2025, and expect to continue to incur losses in the foreseeable future with the recognition of revenue being contingent on successful Phase 3 clinical trials and requisite approvals by the FDA or foreign equivalents.

Our cash and cash equivalents totaled $11.6 million as of December 31, 2024, a decrease of $11.6 million from December 31, 2023.

During the year ended December 31, 2024 and December 31, 2023, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $25.7 million and $18.3 million, respectively.

With our cash position of approximately $10.5 million in early March 2025, we believe we will be able to fund our operations into the third quarter of 2025.

Based on our current plans, our cash and cash equivalents will be sufficient to complete our ongoing clinical trial of VCN-01 in PDAC and finalize the clinical study report from the trial of VCN-01 in retinoblastoma, but may not be sufficient for additional trials of VCN-01, SYN-020 or SYN-004, or to complete the last cohort of the Phase 1a/2a clinical trial of SYN-004, which are expected to require significant cash expenditures.

Following the anticipated completion of our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, and preclinical studies supporting VCN-01 and our discovery initiatives, we will need to obtain additional funds for future clinical trials.

Our cash and cash equivalents totaled $13.1 million as of December 31, 2025, an increase of $1.4 million from December 31, 2024.

During the years ended December 31, 2025 and 2024, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $23.7 million and $25.7 million, respectively.

We believe our cash position of approximately $15.1 million as of early March 2026, will allow us to fund our operations into the first quarter of 2027;

Despite this liquidity position, we continue to experience operating losses and face significant uncertainties related to our business model, market conditions, clinical trial outcomes, FDA review timelines and strategic initiatives.

These factors raise substantial doubt about our ability to continue as a going concern beyond the next twelve months without additional capital or other strategic actions.

Management has developed plans intended to mitigate these uncertainties, including pursuing strategic collaborations, securing additional financing, and prioritizing key development programs.

While management believes these plans are probable of being successfully implemented, there can be no assurance that such actions will be sufficient to alleviate the going concern uncertainty.

Based on our current plans, we expect that our cash and cash equivalents will be sufficient to cover overhead costs, close out of the VIRAGE Phase 2b clinical trial, commence and complete a potential Phase 2a study evaluating VCN-01 dosing frequency, exploratory VCN-01 (zabilugene almadenorepvec) manufacturing scale-up activities, regulatory interactions regarding proposed VCN-01 clinical trials in PDAC and retinoblastoma, and preclinical studies supporting VCN-01 and VCN-12, the first candidate from our VCN-X discovery program.

We believe that the cash will also be sufficient to fund our committed obligations under the terms of the Purchase Agreement related to the Acquisition, but will not be sufficient for additional trials of VCN-01 or SYN-004 (ribaxamase), or to complete the last cohort of the Phase 1b/2a clinical trial of SYN-004, which are expected to require significant cash expenditures.

Following the completion of our ongoing Phase 1 and Phase 2b clinical trials for VCN-01, and preclinical studies supporting VCN-01 and our discovery initiatives, we will need to obtain additional funds for future clinical trials.

We anticipate that our future clinical trials will be much larger in size and require larger cash expenditures than the aforementioned clinical programs.

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Management believes its plan, which is focused on the advancement of VCN-01, will allow us to meet our financial obligations, further advance key products, and maintain our planned operations.

Based upon our current available funding and our focus on our clinical development of VCN-01 we do not anticipate that we will fund the last cohort of the Phase 1a/2a clinical trial of SYN-004 and enrollment in this cohort will not commence unless we obtain grant funding, or find a licensee or partner for the SYN-004 development program.

Based upon our current available funding and our focus on our clinical development of VCN-01 we do not anticipate that we will fund the last cohort of the Phase 1b/2a clinical trial of SYN-004 and enrollment in this cohort will not commence unless we obtain grant funding, or find a licensee or partner for the SYN-004 development program.

However, the amount of additional capital needed by us will also depend upon the costs to advance our VCN-01 clinical programs.

If necessary, we may attempt to utilize the at the market sales facility (the “ATM”) or seek to raise additional capital in other financing transactions, neither of which is guaranteed.

Use of the ATM is limited by certain restrictions and management’s plan does not rely on additional capital from either of these sources.

We may attempt to utilize the ATM Sales Agreement or seek to raise additional capital in other financing transactions, neither of which is guaranteed.

Use of the ATM Sales Agreement is limited by certain restrictions and management’s plan does not rely on additional capital from any sources.

If we are not able to obtain additional capital (which is not assured at this time), our long-term business plan may not be accomplished, and we may be forced to cease certain development activities.

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Historically, we have financed our operations primarily through public and private sales of our securities, and we expect to continue to seek and obtain additional capital in a similar manner.

During the year ended December 31, 2023, our only source of cash was from sales of our Common Stock through the ATM pursuant to which we sold 81,000 shares of our Common Stock for net proceeds of $2.2 million.

During the year ended December 31, 2024, our only source of cash was from sales of our Common Stock through the Amended and Restated ATM Sales Agreement pursuant to which we sold 569,000 shares of our Common Stock for net proceeds of $3.6 million and from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares of the Common Stock for gross proceeds of $2.5 million (net proceeds of $2.0 million, after deducting underwriting discounts and estimated expenses).

There can be no assurance that we will be able to continue to raise funds through the sale of shares of Common Stock through the ATM or other equity financings.

During the year ended December 31, 2024, our only source of cash was from sales of our Common Stock through the ATM Sales Agreement pursuant to which we sold 569,000 shares of our Common Stock for net proceeds of $3.6 million and from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares of the Common Stock for gross proceeds of $2.5 million (net proceeds of $2.0 million, after deducting underwriting discounts and estimated expenses).

During the first quarter 2026, we sold approximately 10,204,319 shares of our Common Stock pursuant to the ATM Sales Agreement and received net proceeds of approximately $2.3 million.

During the year ended December 31, 2025, our primary sources of cash were the approximately $6.8 million in net proceeds received from sales of our Common Stock under the ATM Sales Agreement, approximately $3.9 million in net proceeds from the exercise of the Existing Warrants by holders pursuant to the Inducement Agreement, the $1.7 million received for the Research and Development rebate program offset by the $1.4 million grant receivable recorded in November 2025, $1.4 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science and, in May 2025, we closed our May 2025 Offering of 6,818,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying common stock purchase warrants to purchase an aggregate of 6,818,180 shares of our Common Stock for gross proceeds of $7.5 million (net proceeds of $6.7 million, after deducting underwriting discounts and expenses).

Pursuant to the terms of the Purchase Agreement entered into in connection with the Acquisition, we were required to pay up to $70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings of which to date $7.3 million has been paid and an additional $5.0 million has been earned but deferred.

In September 2022, we received approval from the FDA to proceed with the Phase 2 clinical trial of VCN-01 in metastatic pancreatic ductal adenocarcinoma (mPDAC).

Due to this approval, we paid Grifols $3.0 million in the fourth quarter 2022.

In August 2023, we initiated patient dosing in the U.S.

in our Phase 2 clinical trial of VCN-01 in mPDAC.

As a result, payment was made subsequent to September 30, 2023 in the amount of $3.25 million.

During the three months ended June 30, 2025, we met the primary survival and safety endpoints in our VIRAGE Phase 2b clinical trial evaluating our lead product candidate VCN-01.

As a result of achieving the primary survival and safety endpoints in the Phase 2b clinical trial, we were obligated to pay Grifols $6.0 million.

On August 5, 2025, we and Grifols agreed to defer the $6.0 million milestone payment into three payments, as follows:

$500,000 was paid in August 2025, $500,000 was paid in December 2025, and the remaining $5.0 million payment has been deferred, pending ongoing discussion with Grifols.

There can be no assurance that we will be able to continue to raise funds through the sale of shares of common stock through the ATM Sales Agreement or other equity financings.

If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted.

If we are not able to obtain funding for future clinical trials when needed, we will be unable to carry out our business plan and we will be forced to delay the initiation of future clinical trials until such time as we obtain adequate financing and may need to abandon some of our development programs.

We have spent, and expect to continue to spend, a substantial amount of funds in connection with implementing our business strategy, including our planned product development efforts, preparation for our planned clinical trials, performance of clinical trials and our research and discovery efforts.

Based on our current plans, our cash and cash equivalents will not be sufficient to enable us to meet our near term or long-term expected plans as it is anticipated that we will not have enough cash to continue our operations for the next twelve months from the date of the filing of this Annual Report on Form 10-K.

We will be required to obtain additional funding in order to continue the development of certain product candidates within the anticipated time periods (including initiation of planned clinical trials), if at all, and to continue to fund operations at the current cash expenditure levels.

We do anticipate that our current cash of approximately $10.5 million as of early March 2025 will allow us to cover overhead costs, manufacturing costs for near-term clinical supply, manufacturing costs of VCN-01 for clinical trial use and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01 and our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN Share Purchase Agreement (the “VCN Purchase Agreement”) related to the VCN Acquisition into the third quarter of 2025.

We anticipate that our current cash of approximately $15.1 million as of early March 2026 will allow us to fund our operations into the first quarter of 2027, including overhead costs, close out of the VIRAGE Phase 2b clinical trial, exploratory VCN-01 manufacturing scale-up activities, regulatory interactions regarding proposed VCN-01 clinical trials in PDAC and retinoblastoma, and preclinical studies supporting VCN-01 and VCN-12, the first candidate from our VCN-X discovery program.

We believe the cash will also be sufficient to fund our committed obligations under the terms of the Purchase Agreement related to the Acquisition;

however, payment of the $5.0 million owed to Grifols will significantly deplete our cash and cash equivalents, which could materially and adversely affect our liquidity and limit our ability to fund operations or meet other financial obligations.

Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue.

Our notes to the consolidated financial statements contain an explanatory paragraph referring to our recurring and continuing losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available.

Our notes to the consolidated financial statements included in this Annual Report contain an explanatory paragraph referring to our recurring and continuing losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available.

We cannot provide any assurance that we will be able to obtain the required funding to achieve our current business plan, obtain the required regulatory approvals for our product candidates or complete additional corporate partnering or acquisition transactions in order to commercialize such product candidates once regulatory approval is received.

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Our ability to continue as a going concern is dependent upon our ability to raise additional capital.

Our cash and cash equivalents will not be sufficient to initiate or complete future registrational studies for VCN-01, any potential future trials of SYN-004 including Phase 3 clinical programs of SYN-004 (ribaxamase) for prevention of CDI or the Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients, or later-stage clinical trials of SYN-020.

Therefore, we do not intend to commence future new studies of VCN-01, SYN-004 (ribaxamase) or SYN-020 until we are confident that we have funding necessary to complete such trials.

We are actively pursuing additional equity or debt financing, in the form of either a private placement or a public offering and have been in ongoing discussions with strategic institutional investors and investment banks with respect to such possible offerings.

Our cash and cash equivalents will not be sufficient to initiate or complete future registrational studies for VCN-01, any potential future trials of SYN-004 (ribaxamase) including Phase 3 clinical programs of SYN-004 (ribaxamase) for prevention of CDI or the Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients.

Therefore, we do not intend to commence future new studies of VCN-01 (zabilugene almadenorepvec) or SYN-004 (ribaxamase) until we are confident that we have funding necessary to complete such trials.

We are actively pursuing additional equity or debt financing opportunities, in the form of either a private placement or a public offering and have been in ongoing discussions with strategic institutional investors and investment banks with respect to such possible offerings.

However, we do not currently have commitments from any third parties to provide us with capital.

Potential sources of financing that we are pursuing include strategic relationships, licensing arrangements, public or private sales of our equity (including through the ATM) or debt and other sources.

Such additional financing opportunities might not be available to us when and if needed, on acceptable terms or at all.

We cannot assure that we will meet the requirements for use of the ATM especially in light of the fact that we are currently limited by rules of the Securities and Exchange Commission (the “SEC”) as to the number of shares of Common Stock that we can sell pursuant to the ATM due to the market value of our Common Stock held by non-affiliates.

Even if we meet the requirements for use of the ATM, there can be no assurance that we will be able to raise funds through the sale of shares of Common Stock through the ATM.

We cannot assure that we will meet the requirements for use of the ATM Sales Agreement especially in light of the fact that we are currently limited by rules of the SEC as to the number of shares of common stock that we can sell pursuant to the ATM Sales Agreement due to the market value of our common stock held by non-affiliates.

Even if we meet the requirements for use of the ATM Sales Agreement, there can be no assurance that we will be able to raise funds through the sale of shares of common stock through the ATM Sales Agreement.

Additionally, we may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements.

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If we are not able to obtain funding for future clinical trials when needed, we will be unable to carry out our business plan and we will be forced to delay the initiation of future clinical trials until such time as we obtain adequate financing and our operating results and prospects will be adversely affected.

The following table summarizes our cash flows for the periods presented (in thousands):

Year Ended December 31,

Cash used in operating activities

Net cash used in operating activities was $16.9 million and $19.0 million during the years ended December 31, 2024 and 2023, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 our product candidate.

Cash used in investing activities

Cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net increase(decrease) in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash Used in Operating Activities

Net cash used in operating activities was $16.7 million and $16.9 million during the years ended December 31, 2025 and 2024, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 (zabilugene almadenorepvec) our lead product candidate.

Cash used in operating activities for the years ended December 31, 2025 decreased compared to the same period in 2024 due primarily to lower research and development expenses and a decrease in interest income, which led to a decrease in net loss.

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Cash Provided by Financing Activities

Cash provided by financing activities was $5.5 million during the year ended December 31, 2024 compared to $625,000 during the year ended December 31, 2023.

Cash provided by financing activities during the year ended December 31, 2024 included at the market offering proceeds of $3.6 million from sales of 569,000 shares of our Common Stock offset by payments related to loans extended by certain Spanish institutions of $67,000 and net proceeds of $2.0 million from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares.

Cash provided by financing activities during the year ended December 31, 2023 included at the market offering proceeds of $2.2 million from sales of 81,000 million shares of our common stock which was offset by payment of contingent consideration to Grifols of $1.5 million and $75,000 of payments of debt that we incurred when we acquired VCN.

Cash provided by financing activities was $18.2 million during the year ended December 31, 2025 compared to $5.5 million during the year ended December 31, 2024.

Cash provided by financing activities during the year ended December 31, 2025 included at the market offering proceeds of $6.8 million from sales of 17,998,117 shares of our Common Stock under the ATM Sales Agreement, $1.7 million received for the Research and Development rebate program offset by the $1.6 million grant receivable recorded in November 2025, $1.5 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science and, in May 2025, we closed our May 2025 Offering of 6,818,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying Common Warrants to purchase an aggregate of 6,818,180 shares of the Common Stock for gross proceeds of $7.5 million (net proceeds of $6.7 million, after deducting underwriting discounts and estimated expenses) and net proceeds from warrant inducement of $3.9 million offset by payments related to loans extended by certain Spanish institutions of $70,000 and payment of contingent consideration to Grifols of $1.0 million pursuant to the Purchase Agreement.

License and Contractual Agreement Obligations

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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-K

Item 7. Management’s Discussion and Analysis