What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-11 compared with 2022-05-16 · 88 added, 52 removed, 381 unchanged (27% of the section changed)

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Acquisition of VCN Biosciences, S.L

On March 10, 2022, pursuant to the terms of the Share Purchase Agreement (“Purchase Agreement”) we entered into with VCN and the shareholders of VCN Biosciences S.L.(the “Sellers”), we completed our acquisition of all the outstanding shares of VCN (the “VCN Shares”) from the shareholders of VCN.

On March 10, 2022, pursuant to the terms of the Share Purchase Agreement (“Purchase Agreement”) we entered into with VCN and the shareholders of VCN Biosciences S.L.

(the “Sellers”), we completed our acquisition of all the outstanding shares of VCN (the “VCN Shares”) from the shareholders of VCN.

Pursuant to the Purchase Agreement, as consideration for the purchase of the VCN Shares of capital stock, we paid $4,700,000 (the “Closing Cash Consideration”) to Grifols Innovation and New Technologies Limited (“Grifols”), the owner of approximately 86% of the equity of VCN, and issued to the remaining Sellers 2,639,530 shares of our common stock, $.001 par value (the “Closing Shares”), representing 19.99% of the outstanding shares of our common stock on December 14, 2021, the date of the Purchase Agreement.

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OV oncolytic adenovirus engineered to selectively replicate in tumors and express hyaluronidase enzyme PH20.

¹Additional products with preclinical proof-of-concept include SYN-006 (carbapenemase) to prevent aGVHD and infection by carbapenem resistant enterococci and SYN-007 (ribaxamase) DR to prevent antibiotic associated diarrhea with oral β-lactam antibiotics.

¹Additional products with preclinical proof-of-concept include SYN-006 (carbapenemase) to prevent aGVHD and infection by carbapenem resistant Enterobacteriaceae and SYN-007 (ribaxamase) DR to prevent antibiotic associated diarrhea with oral β-lactam antibiotics.

²Depending on funding/partnership.

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On April 14, 2021, we announced that the first patient had been dosed in our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic hematopoietic cell transplant (HCT) recipients for the prevention of acute graft-versus-host-disease (aGVHD.

To date, we have dosed 17 patients (11 that are considered evaluable) in the study.

If enrollment proceeds on the current schedule we may be positioned to announce as many as three interim data readouts during the next 18-24 months with the first one anticipated from the first antibiotic cohort during the second half of 2022, pandemic conditions permitting, the second cohort during the second half of 2023 and the third cohort during the second half of 2024.

To date, we have dosed 19 patients in Cohort 1 of the study (12 that are considered evaluable) in the study.

A topline data readout from the first Cohort 1 is expected in the second half of 2022 after review by a protocol-specified review by a Data and Safety Monitoring Committee.

If enrollment proceeds on the current schedule, we may be positioned to announce data readouts for the second cohort during the second half of 2023 and the third cohort during the second half of 2024.

Due to the unique challenges posed by the global COVID-19 pandemic, Washington University had previously halted the commencement of the Phase 1b/2a clinical trial and they continue to evaluate non-essential activities which may have a direct impact on the continuation of the ongoing clinical trial.

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SYN-020 is a quality-controlled, recombinant version of bovine Intestinal Alkaline Phosphatase (IAP) produced under cGMP conditions and formulated for oral delivery.

The published literature indicates that IAP functions to diminish GI inflammation, tighten the gut barrier to diminish “leaky gut,” promote a healthy microbiome, and diminish GI and systemic inflammation.

The published literature indicates that IAP functions to diminish fat absorption, tighten the gut barrier to diminish “leaky gut,” promote a healthy microbiome, and diminish GI and systemic inflammation.

Despite its broad therapeutic potential, a key hurdle to commercialization has been the high cost of IAP manufacture, which is commercially available for as much as $10,000 per gram.

We believe we have developed technologies to traverse this hurdle currently now have the ability to produce more than 3 grams per liter of SYN-020.

We believe we have developed technologies to traverse this hurdle and currently have the ability to produce more than 3 grams per liter of SYN-020.

If the yields are successfully translated to a commercial scale, we could ultimately manufacture IAP for roughly a few hundred dollars per gram.

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Safety reviews were conducted at the end of each cohort to approve progression into the next higher dose cohort.

On May 10, 2022, we announced positive safety data from its Phase 1, placebo-controlled, double-blind multiple ascending dose (MAD) clinical trial of SYN-020 intestinal alkaline phosphatase (IAP).

On May 10, 2022, we announced positive safety data from our Phase 1, placebo-controlled, double-blind multiple ascending dose (MAD) clinical trial of SYN-020 intestinal alkaline phosphatase (IAP).

The Phase 1 MAD study enrolled 32 healthy adult volunteers into four cohorts with SYN-020 administered orally in doses ranging from 5 mg to 75 mg twice daily for 14 days with a follow-up evaluation at day 35.

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We will continue to explore the therapeutic potential of SYN-020 across indications including celiac disease, NAFLD, age-related metabolic and inflammatory diseases.

Contingent on funding, we expect to initiate a Phase 2a study in the second half of 2022.

With our transition to an oncology focused Company, we are exploring strategic opportunities to enable advancement of this potentially valuable asset.

Our Current Oncology-Focused Pipeline (through the acquisition of VCN)

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An expanding intellectual property portfolio supports our oncology programs, and because our products are characterized as biologics, they will be further protected by data and/or market exclusivity in major markets.

VCN-01 — An oncolytic human type-5 virus engineered for intravenous administration and to express a tumor matrix degrading enzyme (PH20, hyaluronidase) that facilitates the entry of therapeutics and immune cells into tumors

VCN-01 — An oncolytic human type-5 adenovirus engineered for intravenous administration and to express a tumor matrix degrading enzyme (PH20, hyaluronidase) that facilitates the entry of therapeutics and immune cells into tumors

VCN-01 is a genetically modified oncolytic adenovirus that has been engineered to contain four independent genetic modifications on the backbone of the wild-type human adenovirus serotype 5 (HAd5) genome.

These modifications have been shown in preclinical and clinical studies to confer tumor selective replication and antitumor activity.

VCN-01 was engineered to replicate in and kill virtually all cancer cells, to expose tumor neoantigens of lysed tumors, to increase tumor targeting, and to express PH20 hyaluronidase to enhance the penetration of virus, chemotherapy and immune cells into the tumor.

VCN-01 was engineered to replicate in and kill virtually all types of cancer cells, to expose tumor neoantigens of lysed tumors, to reduce liver tropism, and to express PH20 hyaluronidase to enhance the penetration of virus, chemotherapy and immune cells into the tumor.

Malignant tumors are made up of tumor cells as well as significant supporting tissue known as tumor stroma.

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Our initial indication for clinical development is unresectable metastatic pancreatic cancer, a disease for which there is currently no cure and only limited therapeutic options.

VCN-01 has been evaluated in 72 patients across four Phase 1 clinical trials, including patients with pancreatic cancer, head and neck squamous cell carcinoma, colorectal cancer, and retinoblastoma.

VCN-01 has been administered to 76 patients across four Phase 1 clinical trials, including patients with pancreatic cancer, head and neck squamous cell carcinoma, ovarian carcinoma, colorectal cancer, and retinoblastoma.

Pancreatic Ductal Adenocarcinoma

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In May 2011, the Committee for Orphan Medicinal Products (“COMP”) from the European Medicines Agency (“EMA”) recommended granting Orphan Medicinal Product Designation to VCN-01 for the treatment of pancreatic cancer and in June 2011, the European Commission confirmed the designation under Regulation (“EC”) No 141/2000 of the European Parliament and of the Council.

Phase 1a/Proof of Concept Trial of VCN-01 by intratumor administration in PDAC

Phase 1a/Proof of Concept Trial of VCN-01 by intratumoral administration in PDAC

In September 2019, VCN presented a poster at the European Society for Molecular Oncology (“ESMO”) annual meeting describing initial mechanism of action data from a multicenter, Phase 1 dose escalation study of intratumoral (“IT”) VCN-01 administered to pancreatic cancer patients in combination with standard doses/schedules of either gemcitabine or nab-paclitaxel plus gemcitabine (“NCT02045589”).

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The treatment regimen was generally well-tolerated;

however, one patient died from severe intraabdominal fluid collection that was considered to be related to VCN-01 treatment Evaluation of virus pharmacokinetics and PH20 levels in serum were consistent with strong virus replication in the tumors.

however, one patient died from severe intraabdominal fluid collection that was considered to be related to VCN-01 treatment.

Evaluation of virus pharmacokinetics and PH20 levels in serum were consistent with strong virus replication in the tumors.

This was supported by the presence of viral particles in tumor cells as assessed in paired tumor biopsies collected before and after treatment.

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We believe these results supported the evaluation of the safety/tolerability and potential efficacy of VCN-01 via intravenous administration in combination with chemotherapy and/or immunotherapies for the treatment of advanced PDAC.

The results of this study were, published in the Journal for ImmunoTherapy of Cancer.

2021 Nov;9(11):e003254.

10.1136/jitc-2021-003254.

Phase 1 Trial of intravenous VCN-01 with or without nab-paclitaxel plus gemcitabine in patients with solid tumors and PDAC

In March 2022, we announced the peer-reviewed publication of a Phase 1, multicenter, open-label, dose-escalation study investigating the safety, tolerability and biodistribution of intravenous VCN-01 oncolytic adenovirus with or without standard-of-care (SoC) chemotherapy (gemcitabine/nab-paclitaxel) in patients with advanced solid tumors.

The data, published in the Journal for ImmunoTherapy of Cancer, suggests that treatment with VCN-01 is feasible and has an acceptable safety profile, with encouraging biological and clinical activity.

The data, published in the Journal for ImmunoTherapy of Cancer, suggests that intravenous treatment with VCN-01 is feasible and has an acceptable safety profile, with encouraging biological and clinical activity.

(Journal for Immunotherapy of Cancer 2022;10:e003255.

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In Part II, 12 patients received VCN-01 dose concurrent with chemotherapy on day 1, whereas in Part III 14 additional patients received the dose of VCN-01seven days before chemotherapy.

The RP2D was determined to be 1x10 13 viral particles (vp)/patient in Part I, 3.3x10 12 vp/patient in Part II and 1x10 13 vp/patient in Part III.

The recommended phase 2 doses (RP2D) was determined to be 1x10 13 viral particles (vp)/patient in Part I, 3.3x10 12 vp/patient in Part II and 1x10 13 vp/patient in Part III.

Based on its apparent safety profile and the absence of dose-limiting toxicities, 1x10 13 vp/patient using sequential dosing schedule was selected for further clinical development.

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Future Planning and Potential Regulatory Strategy for development of VCN-01 in PDAC

We are currently planning a Phase 2 clinical trial of systemically administered VCN-01 in PDAC patients and anticipate submission of the protocol to the FDA and EMA in Q2 2022.

We are currently planning a Phase 2 clinical trial of systemically administered VCN-01 in PDAC patients and submitted of the protocol to the FDA and Spanish and German regulatory agencies in June of 2022.

The proposed Phase 2 trial is expected to be an open-label, randomized study to test the efficacy of VCN-01 in combination with gemcitabine and nab-paclitaxel in patients with newly diagnosed metastatic pancreatic cancer.

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the 1st dose will be administered on day 1, then one week later 3 cycles of gemcitabine and nab-paclitaxel as standard of care will be administered.

The second VCN-01 dose will be administered 7 days before the 4th cycle of chemotherapy, followed by additional chemotherapy.

The second VCN-01 dose will be administered 7 days before the 4th cycle of chemotherapy (approximately 90 days after the first VCN-01 dose), followed by additional cycles of gemcitabine/nab-paclitaxel chemotherapy.

Manuel Hidalgo, chief of the Division of Hematology and Medical Oncology at Weill Cornell Medicine/New York-Presbyterian Hospital has been appointed as Principal Investigator.

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The investigator has reported that one patient treated with VCN-01 has had a complete regression lasting more than 30 months.

This study is currently ongoing and anticipated to be completed in the second half of 2022.

We anticipate the initiation of a Phase 2/3 trial of VCN-01 as either an adjunct to chemotherapy or a potential rescue therapy in pediatric patients with advanced retinoblastoma in early 2023.

This study is currently ongoing and anticipated to be completed in the first quarter of 2023.

We anticipate the initiation of a Phase 2/3 trial of VCN-01 as either an adjunct to chemotherapy or a potential rescue therapy in pediatric patients with advanced retinoblastoma in the second half of 2023.

VCN-01 in combination with Immunomodulatory therapeutics

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Patient recruitment into the study was completed in February 2022 with a total of 18 patients enrolled.

The last patients on the study are currently in the follow-up period and initial safety data from these patients is expected to be available in Q3 2022.

Phase 1 Trial evaluating the safety and feasibility of huCART-meso cells when given in combination with VCN-01

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This Phase I study will evaluate the safety and tolerability of the VCN-01 huCART-meso cell combination and test the hypothesis that administration of VCN-01 may enhance the potential antitumor effects of the co-administered huCART-meso cells.

The trial is open and we anticipate initiation of VCN-01 dosing the first half of 2022.

On July 8, 2022, we were notified of the clearance of the safety evaluation period by the first patient that had been dosed in the investigator sponsored Phase 1 clinical trial evaluating VCN-01 (NCT05057715), an intravenous oncolytic adenovirus, in combination with mesothelin-directed lentiviral transduced human chimeric antigen receptor modified T cells (huCART-meso) for patients with pancreatic and serous epithelial ovarian cancers.

Phase 1 Trial evaluating the intravenous administration of VCN-01 in patients prior to surgical resection of high-grade brain tumors

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This is an open-label, non-randomized, single center study of VCN-01 given intravenously at a dose of 1x10 13 virus particles to patients prior to planned surgery for recurrent high-grade primary or metastatic brain tumors.

We believe that the intravenous delivery of anti-cancer therapy to brain tumors, if effective, may allow repeat dosing may enable the treatment of systemically disseminated brain metastases and may allow for reduction in the need to use neurosurgery to administer the drugs.

We believe that the intravenous delivery of anti-cancer therapy to brain tumors, if effective, may enable the treatment of systemically disseminated brain metastases and may allow for reduction in the need to use neurosurgery to administer the drugs.

This study aims to assess the presence of VCN-01 within the resected surgical specimen after systemic VCN-01 delivery and determine the safety of intravenous VCN-01 in patients with recurrent high-grade glioma or brain metastases.

By confirming the presence of VCN-01 in high grade brain tumors following intravenous delivery, this study may pave the way for larger trials to study VCN-01 efficacy, both as a monotherapy and in combination with PD-1/PD-L1 blockade.

This trial has already received approval from Medicines & Healthcare Products Regulatory Agency (MHRA) from UK Government and we anticipate initiation of VCN-01 dosing the first half of 2022.

This trial has already received approval from Medicines & Healthcare Products Regulatory Agency (MHRA) from UK Government and recruitment is on-going.

Initiation of VCN-01 dosing is expected in the second half of 2022.

Research Programs

SYN-006, SYN-007 and SYN-005

SYN-006, SYN-007

To date, our research programs have been primarily directed to the development of GI acting products that have generated preclinical proof-of-concept with two pipeline products (SYN-006 and SYN-007) that expand the potential utility of our beta-lactamase strategy.

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SYN-006 is a carbapenemase designed to degrade intravenous (IV) carbapenem antibiotics within the GI tract to maintain the natural balance of the gut microbiome for the prevention of CDI, overgrowth of pathogenic organisms and the emergence of antimicrobial resistance (AMR).

Our SYN-005 monoclonal antibody program is intended to both treat and prevent pertussis.

Our research programs may be expanded to include development of new oncolytic virus products and/or explore oncology applications of our existing products such as SYN-006 and SYN-020.

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VCN-11 showed antitumor efficacy in the presence of NAbs against Ad5 and itself.

In May 2022, we announced an upcoming oral presentation on VCN-11 at the 25th Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT).

The presentation will include preclinical results showcasing the potential of VCN-11 to balance safety, with no major toxicities observed, and effectively target tumors after intravenous re-administration, even in the presence of high level NAbs.

In May 2022, we presented on VCN-11 at the 25th Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT).

The presentation included preclinical results showcasing the potential of VCN-11 to balance safety, with no major toxicities observed, and effectively target tumors after intravenous re-administration, even in the presence of high level NAbs.

Intellectual Property

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These patent applications, which cover various formulations, medical uses and manufacture of SYN-020, are expected to expire in 2038-2040, if granted, and without taking potential patent term extensions or patent term adjustment into account.

The VCN-01 and VCN-11 programs are supported by patents and patent applications that are assigned to VCN Biosciences or exclusively licensed from Fundacio Privada Institut d'Investigacio Biomedica de Bellvitge (IDIBELL), Institut Catala d'Oncologia (ICO), and Hospital Sant Joan De Deu Barcelona.

The patents and patent applications include U.S.

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Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired patented technology.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

The Company classifies intangible assets into two categories:

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Results of Operations

Three Months Ended March 31, 2022 and 2021

Three Months Ended June 30, 2022 and 2021

General and Administrative Expenses

General and administrative expenses increased to $1.7 million for the three months ended March 31, 2022, from $1.4 million for the three months ended March 31, 2021.

General and administrative expenses increased to $1.5 million for the three months ended June 30, 2022, from $1.3 million for the three months ended June 30, 2021.

This increase of 19% primarily comprised of increased consulting and legal costs related to the VCN acquisition, higher insurance costs, audit fees, and public relations expenses and VCN administrative expenses not included in prior year.

The charge related to stock-based compensation expense was $85,000 for the three months ended March 31, 2022, compared to $82,000 the three months ended March 31, 2021.

The charge related to stock-based compensation expense was $86,000 for the three months ended June 30, 2022, compared to $83,000 the three months ended June 30, 2021.

Research and Development Expenses

Research and development expenses increase to $2.6 million for the three months ended March 31, 2022, from approximately $1.1 million for the three months ended March 31, 2021.

This increase of 132% is primarily the result of higher manufacturing expense for SYN-020, costs incurred related to our Phase 1a clinical trial of SYN-020 and the Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients and VCN research expenses related to VCN-01 not incurred in the prior year.

We anticipate research and development expense to increase as we plan for and initiate enrollment for our phase 2 clinical trial for VCN-01 in PDAC, phase 2/3 clinical trial in retinoblastoma, expand GMP manufacturing activities for VCN-01 and SYN-020, and continue with supporting our VCN-11 and other preclinical and discovery initiatives.

The charge related to stock-based compensation expense was $28,000 for the three months ended March 31, 2022, compared to $19,000 related to stock-based compensation expense for the three months ended March 31, 2021.

The following table sets forth our research and development expenses directly related to our therapeutic areas for the three months ended March 31, 2022 and 2021.

Research and development expenses increased to $3.5 million for the three months ended June 30, 2022, from approximately $1.9 million for the three months ended June 30, 2021.

This increase of 80% is primarily the result of VCN research expenses related to VCN-01 not incurred in the prior year and to a lesser extent higher manufacturing expense for SYN-020, costs incurred related to our Phase 1a clinical trial of SYN-020 and expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients.

We anticipate research and development expense to increase as we plan for and initiate enrollment for our phase 2 clinical trial for VCN-01 in PDAC, phase 2/3 clinical trial in retinoblastoma, expand GMP manufacturing activities for VCN-01, and continue with supporting our VCN-11 and other preclinical and discovery initiatives.

The charge related to stock-based compensation expense was $27,000 for the three months ended June 30, 2022, compared to $19,000 related to stock-based compensation expense for the three months ended June 30, 2021.

The following table sets forth our research and development expenses directly related to our therapeutic areas for the three months ended June 30, 2022 and 2021.

These direct expenses were external costs associated with preclinical studies and clinical trials.

Indirect research and development expenses related to employee costs, facilities, stock-based compensation and research and development support services that are not directly allocated to specific product candidates.

Three months ended

Therapeutic Areas

SYN-004 (ribaxamase)

Other therapeutic areas

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Other Income/Expense

Other expense was $21,068 for the three months ended March 31, 2022 compared to other income of $347 for the three months ended March 31, 2021.

Other expense is primarily comprised of exchange loss of $22,607, offset by interest income of $1,539.

Other income for the three months ended March 31, 2021 is primarily comprised of interest income.

Other income was $17,000 for the three months ended June 30, 2022 compared to other income of $2,000 for the three months ended June 30, 2021.

Other income for the three months ended June 30, 2022 is primarily comprised of interest income of $26,000 offset by an exchange loss of $9,000.

Other income for the three months ended June 30, 2021 is primarily comprised of interest income.

Net Loss Attributable to Common Stockholders

Our net loss attributable to common stockholders was approximately $4.3 million, or $0.03 per basic and dilutive common share for the three months ended March 31, 2022, compared to a net loss of approximately $11.5 million, or $0.13 per basic common share and dilutive common share for the three months ended March 31, 2021.

Net loss attributable to common stockholders for the three months ended March 31, 2021 excludes net loss attributable to non-controlling interest of $1,000 and includes the accretion of the Series B preferred discount of $1.5 million on converted shares, Series A Preferred Stock accrued dividends of $24,000 and the deemed dividend for the effect of the Series A preferred shares price adjustment of $7.4 million.

Our net loss attributable to common stockholders was approximately $5.0 million, or $0.31 per basic and dilutive common share for the three months ended June 30, 2022, compared to a net loss of approximately $3.2 million, or $0.24 per basic common share and dilutive common share for the three months ended June 30, 2021.

Six Months Ended June 30, 2022 and 2021

General and Administrative Expenses

General and administrative expenses increased to $3.2 million for the six months ended June 30, 2022, from $2.7 million for the six months ended June 30, 2021.

This increase of 18% primarily comprised of increased consulting and legal costs related to the VCN acquisition, higher insurance costs, audit fees, and public relations expenses and VCN administrative expenses not included in prior year.

The charge related to stock-based compensation expense was $172,000 for the six months ended June 30, 2022, compared to $165,000 the six months ended June 30, 2021.

Research and Development Expenses

Research and development expenses increased to $6.1 million for the six months ended June 30, 2022, from approximately $3.0 million for the six months ended June 30, 2021.

This increase of 99% is primarily the result of VCN research expenses related to VCN-01 not incurred in the prior year and to a lesser extent higher manufacturing expense for SYN-020, costs incurred related to our Phase 1a clinical trial of SYN-020 and expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients.

We anticipate research and development expense to increase as we plan for and initiate enrollment for our phase 2 clinical trial for VCN-01 in PDAC, phase 2/3 clinical trial in retinoblastoma, expand GMP manufacturing activities for VCN-01, and continue with supporting our VCN-11 and other preclinical and discovery initiatives.

The charge related to stock-based compensation expense was $54,000 for the six months ended June 30, 2022, compared to $38,000 related to stock-based compensation expense for the six months ended June 30, 2021.

The following table sets forth our research and development expenses directly related to our therapeutic areas for the six months ended June 30, 2022 and 2021.

These direct expenses were external costs associated with preclinical studies and clinical trials.

Six months ended

Therapeutic Areas

SYN-004 (ribaxamase)

Other therapeutic areas

Total direct costs

Total indirect costs

Total Research and Development

Other Income/Expense

Other expense was $4,000 for the six months ended June 30, 2022 compared to other income of $2,000 for the six months ended June 30, 2021.

Other expense for the six months ended June 30, 2022 is primarily comprised of exchange loss of $31,000, offset by interest income of $27,000.

Other income for the six months ended June 30, 2021 is primarily comprised of interest income.

Net Loss Attributable to Common Stockholders

Our net loss attributable to common stockholders was approximately $9.2 million, or $0.62 per basic and dilutive common share for the six months ended June 30, 2022, compared to a net loss of approximately $5.7 million, or $1.31 per basic common share and dilutive common share for the six months ended June 30, 2021.

Net loss attributable to common stockholders for the six months ended June 30, 2021 excludes net loss attributable to non-controlling interest of $1,000 and includes the accretion of the Series B preferred discount of $1.5 million on converted shares, Series A Preferred Stock accrued dividends of $24,000 and the deemed dividend for the effect of the Series A preferred shares price adjustment of $7.4 million.

Liquidity and Capital Resources

As of March 31, 2022, the Company has 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 June 30, 2022, the Company has 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.

The Company expects to continue incurring losses for 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.

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The Company has spent, and expects to continue to spend, a substantial amount of funds in connection with implementing its business strategy, including planned product development efforts, clinical trials and research and discovery efforts.

Cash and cash equivalents totaled approximately $56.7 million as of March 31, 2022, which includes the net proceeds from sales of its Common Stock in “at-the-market” (ATM) equity offerings during 2021 and cash proceeds of approximately through the exercise of a portion of the October 2018 warrants.

Cash and cash equivalents totaled approximately $52.3 million as of June 30, 2022, which includes the net proceeds from sales of our Common Stock in “at-the-market” (ATM) equity offerings during 2021 and cash proceeds through the exercise of a portion of the October 2018 warrants.

With these additional sources of liquidity, we believe we will be able to fund our operations through the next twelve months from the issuance date of these financial statements.

Management believes its plan, which includes the additional testing of SYN-004 (ribaxamase) and the advancement of VCN-01 will allow us to meet our financial obligations, further advance key products, and maintain our planned operations for at least one year from the issuance date of these consolidated financial statements.

However, the amount of capital needed by us will also depend upon whether we develop SYN-004 and/or SYN-020 internally or we our-license or partner such development.

However, the amount of capital needed by us will also depend upon whether we develop SYN-004 and/or SYN-020 internally or we out-license or partner such development.

If necessary, the Company may attempt to utilize the ATM or seek to raise additional capital on the open market, neither of which is guaranteed.

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We have committed, and expect to continue to commit, substantial capital in order to implement our business strategy, including our planned product development efforts, preparation for our planned clinical trials, and performance of clinical trials and our research and discovery efforts.

We believe our cash position of $54.9 million at the end of April 2022 is sufficient to fund our operations through at least the end of the fourth quarter of 2023, including continuation of our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients for the prevention of aGVHD, as well as our planned Phase 1 clinical programs for SYN-020 and to fund our committed obligations under the Purchase Agreement for the VCN Acquisition.

Following the anticipated completion of our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients, the Phase 1 SAD and MAD clinical studies, we will need to obtain additional funds for future clinical trials.

We believe our cash position of $53.5 million as of August 1, 2022 is sufficient to fund our operations through at least the end of the fourth quarter of 2023, including continuation of our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients for the prevention of aGVHD, as well as our planned Phase 1 clinical programs for SYN-020 and to fund our committed obligations under the Purchase Agreement for the VCN Acquisition.

Following the anticipated completion of our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients, the Phase 1 SAD and MAD clinical studies with SYN-020, and the proposed clinical trials with VCN-01, 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.

We do not have any committed sources of financing for future clinical trials at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all.

As the COVID-19 coronavirus continues to spread around the globe, we have experienced disruptions that impacted our business and clinical trials, including halting the enrollment of new patients in our previous Phase 2b investigator-sponsored clinical trial of SYN-010 and postponement of clinical site initiation of the Phase 1b/2a clinical trial of SYN-004.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report.

As such, it is uncertain as to the full magnitude that the pandemic will have on our financial condition, liquidity, and future results of operations.

As the COVID-19 coronavirus has persisted around the globe and world governments have reacted to the on-going war in the Ukraine, we have experienced and may, in the future, experience disruptions that impact our business and clinical trials.

These include postponement of clinical site initiation as was observed for the Phase 1b/2a clinical trial of SYN-004, increased costs of goods and services, supply chain constraints, and disruptions and changes in vendor personnel.

The full impact of the COVID-19 and global economic downturn continues to evolve as of the date of this report.

As such, it is uncertain as to the full magnitude that these factors will have on our financial condition, liquidity, and future results of operations.

We are actively monitoring the global situation and its potential impact on our financial condition, liquidity, operations, suppliers, industry, and workforce.

Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the future effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity.

Given the daily evolution of persistent COVID-19 and the global economic downturn, we are not able to estimate the future effects of the these factors on our results of operations, financial condition, or liquidity.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2022, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

During the three months ended June 30, 2022, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Contractual Obligations

4 unchanged sentences

ROU assets are included in other noncurrent assets and lease liabilities are included in other current and non-current liabilities in our condensed consolidated balance sheets.

As of March 31, 2022, we did not have any material finance leases.

As of June 30, 2022, we did not have any material finance leases.

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 2. Management’s Discussion and Analysis