What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-10 compared with 2022-08-11 · 213 added, 158 removed, 542 unchanged (41% of the section changed)

FINANCIAL STATEMENTS (UNAUDITED)

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

(In thousands except share and par value amounts)

June 30, 2022

September 30, 2022

December 31, 2021

25 unchanged sentences

Commitments and Contingencies

Series C convertible preferred stock, $ 0.001 par value;

275,000 issued and outstanding

Series D convertible preferred stock, $ 0.001 par value;

100,000 issued and outstanding

Stockholders’ Equity (Deficit):

Common stock, $ 0.001 par value;

20,000,000 shares authorized, 15,844,294 issued and 15,844,061 outstanding at June 30, 2022 and 13,204,487 issued and 13,204,254 outstanding at December 31, 2021

20,000,000 shares authorized, 15,844,294 issued and 15,844,061 outstanding at September 30, 2022 and 13,204,487 issued and 13,204,254 outstanding at December 31, 2021

Additional paid-in capital

4 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

(In thousands, except share and per share amounts)

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

Operating Costs and Expenses:

8 unchanged sentences

Net Loss Attributable to Non-controlling Interest

Net Loss Attributable to Synthetic Biologics, Inc.

Net Loss Attributable to Theriva Biologics, Inc.

and Subsidiaries

Effect of Warrant exercise price adjustment

Series A Preferred Stock Dividends

7 unchanged sentences

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Synthetic Biologics, Inc.

Comprehensive loss attributable to Theriva Biologics, Inc.

and Subsidiaries

See accompanying notes to unaudited condensed consolidated financial statements.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

13 unchanged sentences

Balance at June 30, 2022

Stock-based compensation

Translation gains (losses)

Balance at September 30, 2022

Common Stock $0.001 Par Value

3 unchanged sentences

Stock-based compensation

Stock issued under "at-the-market"

Stock issued under “at-the-market“ offering

Warrants Exercised

7 unchanged sentences

Balance at June 30, 2021

Stock-based compensation

Balance at September 30, 2021

See accompanying notes to unaudited condensed consolidated financial statements.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

(In thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash Flows From Operating Activities:

12 unchanged sentences

Purchase of property and equipment

Cash paid for business combination, net of cash acquired

Cash paid for business combination;

net of cash acquired

Pre-acquisition loan to VCN

2 unchanged sentences

Payment of VCN’s CDTI loan

Proceeds from "at the market"

stock issuance

Proceeds from sale of Series C Preferred Stock, net of issuance cost

Proceeds from sale of Series D Preferred Stock, net of issuance cost

Proceeds from “at the market“ stock issuance

Proceeds from issuance of common stock for warrant exercises

Net Cash Provided (used in) by Financing Activities

Net Cash Provided by Financing Activities

Effects of FX on cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted at the beginning of this period

9 unchanged sentences

Goodwill measurement period adjustment

In-process R&D measurement period adjustment

Deferred tax liability measurement period adjustment

Effect of Warrant exercise price adjustment

Effect of Series A Preferred Stock price adjustment

4 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

2 unchanged sentences

Description of Business

Synthetic Biologics, Inc.

(the “Company” or “Synthetic Biologics”) is a diversified clinical-stage company developing therapeutics in areas of high unmet need.

Prior to the acquisition of VCN (the “Acquisition”), the Company’s focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases in areas which included our lead clinical development candidates:

Theriva Biologics, Inc.

(the “Company” or “Theriva Biologics”) is a diversified clinical-stage company developing therapeutics in areas of high unmet need.

As a result of the acquisition of VCN (the “Acquisition”), described in more detail below, the Company began transitioning its 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, improve access of co-administered cancer therapies to the tumor, and promote a robust and sustained anti-tumor response by the patient’s immune system.

Prior to the Acquisition, the Company’s focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases in areas which included our lead 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, Clostridioides difficile infection (CDI), overgrowth of pathogenic organisms, the emergence of antimicrobial resistance (AMR), and 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.

Upon consummation of the Acquisition of VCN, described in more detail below, the Company began transitioning its 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, improve access of co-administered cancer therapies to the tumor, and promote a robust and sustained anti-tumor response by the patient’s immune system.

Basis of Presentation

12 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Form 10-K.

The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of results for the full year.

Synthetic Biologics, Inc.

The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of results for the full year.

Theriva Biologics, Inc.

and Subsidiaries

5 unchanged sentences

however, due to the inherent uncertainties in making estimates, actual results may differ from the original estimates, requiring adjustments to these balances in future periods.

As of June 30, 2022 the Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment.

The Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment which represents the consolidated entity.

Business Combination

4 unchanged sentences

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.

As a result of the acquisition of VCN (see Note 2), the Company has two intangible assets, in-process research and development (“IPR&D”) and goodwill.

As a result of the acquisition of VCN (see Note 2), the Company recorded two intangible assets, in-process research and development (“IPR&D”) and goodwill.

The IPR&D and goodwill are deemed to have indefinite lives and therefore not amortized.

6 unchanged sentences

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

No impairment of the IPR&D asset was identified during the three and six months ended June 30, 2022.

The Company tests the carrying amounts of goodwill for recoverability on an annual basis on October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired.

3 unchanged sentences

If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value, and a charge is reported in impairment of goodwill in the Company’s consolidated statements of operations.

As of June 30, 2022, the Company has determined that it has one reporting unit.

The Company has not identified any events or changes in circumstances that indicate the existence of potential impairment of goodwill during the three and six months ended June 30, 2022.

Synthetic Biologics, Inc.

As of September 30, 2022, the Company has determined that it has one reporting unit.

Theriva Biologics, Inc.

and Subsidiaries

14 unchanged sentences

If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.

As a result, no impairment charges were recorded during the three and six months ended June 30, 2022 and 2021.

No impairment charges were recorded during the three and nine months ended September 30, 2022 and 2021.

Recent Accounting Pronouncements and Developments

3 unchanged sentences

The ASU will be effective for annual reporting periods after December 15, 2023 and interim periods within those annual periods and early adoption is permitted in annual reporting periods ending after December 15, 2020.

The Company is currently assessing the impact of ASU 2020-06 on its consolidated financial statements.

Synthetic Biologics, Inc.

The Company has adopted ASU 2020-06 on January 1, 2022.

The ASU impacted the analysis of the accounting treatment for the issuance of Convertible Preferred Series C & D stock during the current quarter, specifically the cash conversion and beneficial conversion features.

Theriva Biologics, Inc.

and Subsidiaries

2 unchanged sentences

On March 10, 2022, the Company completed the acquisition of all the outstanding shares of VCN (the “VCN Shares”) from the shareholders of VCN.

VCN is a private, clinical-stage biopharmaceutical company developing new oncolytic adenoviruses for the treatment of cancer.

VCN’s lead product candidate, VCN-01, is being studied in clinical trials for pancreatic cancer and retinoblastoma.

VCN is a clinical-stage biopharmaceutical company developing new oncolytic adenoviruses for the treatment of cancer.

VCN’s lead product candidate, VCN-01, is being studied by the Company in clinical trials for pancreatic cancer and retinoblastoma with additional investigator sponsored trials in indications including head and neck squamous cell carcinoma (HNSCC).

VCN-01 is designed to be administered systemically, intratumorally or intravitreally, either as a monotherapy or in combination with standard of care, to treat a wide variety of cancer indications.

4 unchanged sentences

As consideration for the purchase of the VCN Shares, the Company paid $ 4,700,000 to Grifols Innovation and New Technologies Limited, the owner of approximately 86 % of the equity of VCN, and issued to the remaining sellers and certain key VCN employees and consultants of VCN an aggregate of 2,639,530 shares of its common stock In addition to the consideration described above, under the terms of the Purchase Agreement, the Company assumed up to $ 2,390,000 of existing liabilities of VCN and has agreed to make cash payments of up to $ 70.2 million to Grifols upon the achievement of certain clinical and commercialization milestones.

In September 2022, the trial received “safe to proceed” from the FDA for its phase 2 clinical trial of VCN-01.

Due to this approval, the company will pay Grifols $ 3.0 million in Q4 2022.

In anticipation of the Acquisition, prior to the Closing, the Company loaned VCN $ 417,000 to help finance the costs of certain of VCN’s research and development activities.

3 unchanged sentences

Cash paid at Closing

Receivable from VCN "effectively settled"

Receivable from VCN “effectively settled“

FV of common shares issued

1 unchanged sentence

As of March 31, 2022, the fair value of the contingent consideration was approximately $ 12.2 million.

During the three months ended June 30, 2022 the Company recognized a non-cash gain of $ 483,000 related to the decrease in the fair value of the contingent consideration.

During the nine months ended September 30, 2022 the Company recognized a non-cash gain of $ 257,000 related to the decrease in the fair value of the contingent consideration.

This gain was recorded as a reduction of general and administrative expense in the accompanying condensed consolidated statement of operations.

The Company acquired VCN due to its track record of being a research and development growth engine capable of fueling sustainable growth, to expand the Company’s research and development pipeline, and to diversify the Company’s potential future revenue opportunities.

Synthetic Biologics, Inc.

The Company acquired VCN due to its track record of being a research and development engine capable of fueling sustainable growth, to expand the Company’s research and development pipeline, and to diversify the Company’s potential future revenue opportunities.

Theriva Biologics, Inc.

and Subsidiaries

17 unchanged sentences

As such, the purchase price amount and allocations for this transaction are preliminary estimates including in-process research and development, goodwill and contingent consideration, which may be subject to change within the measurement period.

The net assets were recorded at their estimated fair value.

3 unchanged sentences

Goodwill of $ 5.8 million was established as a result of the Acquisition and is not tax deductible.

VCN operations recorded a net loss of $ 2.1 million from the date of acquisition through June 30, 2022.

VCN operations recorded a net loss of $ 5.8 million from the date of acquisition through September 30, 2022.

During the three months ended June 30, 2022 the Company recognized a measurement period adjustment related to the estimate of acquired liabilities resulting in a $ 277,000 reduction in accrued expenses and goodwill and during the three months ended September 30, 2022 the Company recognized another measurement period adjustment related to the estimated fair value of its in-process R&D resulting in a $ 810,000 increase in in-process R&D, an increase of $ 202,000 in deferred tax liabilities and a decrease of $ 607,000 in goodwill.

The cumulative impact of the re-measurements as of the nine month ended September 30, 2022 was a reduction in accrued liabilities of $ 277,000 , an increase in in-process R&D of $ 810,000 ;

an increase in deferred tax liabilities of $ 202,000 and a decrease in goodwill of $ 884,000 .

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Pro Forma Consolidated Financial Information (unaudited)

The following unaudited pro forma consolidated financial information summarizes the results of operations for the periods indicated as if the VCN acquisition had been completed as of January 1, 2021 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

BUSINESS COMBINATION - (continued)

3 unchanged sentences

Goodwill of $ 5.8 million and in-process R&D of $ 21.7 million were recorded in connection with the Acquisition of VCN, as described in Note 2.

The Company performs an impairment test for IPR&D and for goodwill on an annual basis on October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired.

This analysis requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital.

The Company did not identify any impairments to IPR&D and goodwill during the quarter ended June 30, 2022

The following table provides the Company’s goodwill as of June 30, 2022.

During the quarter ending September 30, 2022, the Company experienced a sustained decline in the quoted market price of the Company’s common stock and the Company deemed this to be a triggering event.

The Company performed an interim impairment analysis and concluded that the Goodwill and IPRD was not impaired as of September 30,2022.

The following table provides the Company’s goodwill as of September 30, 2022.

During the three months ended June 30, 2022 the Company recognized a measurement period adjustment related to the estimate of acquired expenses resulting in a $ 277,000 reduction in accrued liabilities and goodwill and during the three months ended September 30, 2022 the Company recognized another measurement period adjustment related to the estimated fair value of its in-process R&D resulting in an $ 810,000 increase in in-process R&D, an increase of $ 202,000 in deferred tax liabilities and a decrease of $ 607,000 in goodwill.

The cumulative impact of the re-measurements as of the nine month ended September 30, 2022 was a reduction in accrued liabilities of $ 277,000 , an increase in in-process R&D of $ 810,000 ;

an increase in deferred tax liabilities of $ 202,000 and a decrease in goodwill of $ 884,000 .

Goodwill (in thousands)

2 unchanged sentences

Goodwill impairment loss

Measurement Period Adjustment

Measurement Period Adjustments

Effects of exchange rates

Balance at June 30, 2022

The following table provides the Company’s in-process R&D as of June 30, 2022.

There was no change in in-process R&D during the quarter ended June 30, 2022.

Balance at September 30, 2022

The following table provides the Company’s in-process R&D as of September 30, 2022.

R&D (in thousands)

1 unchanged sentence

Acquired IPR&D

In-process R&D impairment loss

Measurement Period Adjustment

Effects of exchange rates

Balance at June 30, 2022

Balance at September 30, 2022

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Fair Value of Financial Instruments

4 unchanged sentences

Quoted prices (unadjusted) for identical assets or liabilities in active markets;

Fair Value of Financial Instruments – (continued)

● Level 2 inputs:

2 unchanged sentences

Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Fair Value of Financial Instruments – (continued)

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above.

2 unchanged sentences

In connection with the Acquisition of VCN, the Company will be required pay up to $ 70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings completed noted in Note 3.

In September 2022 the trial received “safe to proceed” from the FDA for its phase 2 clinical trial of VCN-01.

Due to this approval the company will pay Grifols $ 3.0 million in Q4 2022.

The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs.

As of the March 10, 2022 acquisition date, the contingent consideration had a fair value of $ 12.2 million.

The fair value of the contingent consideration was $ 11.7 million as of June 30, 2022 and is reflected as current accrued contingent consideration of $ 9.3 million and non-current contingent consideration liability of $ 2.4 million in the consolidated balance sheet.

During the three months ended June 30, 2022 the Company recognized in operating expense a $ 483,000 fair value adjustment decrease to contingent consideration.

The fair value of the contingent consideration was $ 11.9 million as of September 30, 2022 and is reflected as current accrued contingent consideration of $ 9.5 million and non-current contingent consideration liability of $ 2.4 million in the consolidated balance sheet.

During the three months ended September 30, 2022 the Company recognized in operating expense a $ 226,000 fair value adjustment increase to contingent consideration.

During the nine months ended September 30, 2022 the Company recognized in operating expense a $ 257,000 fair value adjustment decrease to contingent consideration.

The fair value of financial instruments measured on a recurring basis is as follows (in thousands):

1 unchanged sentence

Contingent consideration

As of June 30, 2022

As of September 30, 2022

Contingent consideration

The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the six months ended June 30, 2022 (in thousands):

The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the nine months ended September 30, 2022 (in thousands):

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Consideration

1 unchanged sentence

Change in fair value

Balance at June 30, 2022

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Balance at September 30, 2022

Fair Value of Financial Instruments – (continued)

15 unchanged sentences

5.1 % to 62.8 %

As of June 30, 2022

As of September 30, 2022

Weighted Average

14 unchanged sentences

Prepaid expenses and other current assets (in thousands)

September 30,

Prepaid clinical research organizations

Prepaid manufacturing expenses

Prepaid insurances

VAT receivable

Prepaid consulting, subscriptions and other expenses

Prepaid insurances

Prepaid clinical research organizations (CROs) expense is classified as a current asset.

The Company makes payments to the CROs based on agreed upon terms that include payments in advance of study services.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

2 unchanged sentences

Property and equipment, net (in thousands)

September 30,

Computers and office equipment

3 unchanged sentences

Accrued expenses (in thousands)

September 30,

Accrued clinical consulting services

Accrued manufacturing costs

Accrued vendor payments

Accrued manufacturing costs

Accrued employee benefits (in thousands)

September 30,

Accrued bonus expense

6 unchanged sentences

The exercise price of stock options under the 2007 Stock Plan was determined by the compensation committee of the Board of Directors and could be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted.

As of June 30, 2022, there were 515 options issued and outstanding under the 2007 Stock Plan.

Synthetic Biologics, Inc.

As of September 30, 2022, there were 515 options issued and outstanding under the 2007 Stock Plan.

Theriva Biologics, Inc.

and Subsidiaries

9 unchanged sentences

Options become exercisable over various periods from the date of grant and expire between five and ten years after the grant date.

As of June 30, 2022, there were 238,820 options issued and outstanding under the 2010 Stock Plan.

As of September 30, 2022, there were 238,853 options issued and outstanding under the 2010 Stock Plan.

On September 17, 2020, the stockholders approved and adopted the 2020 Stock Incentive Plan (“2020 Stock Plan”) for the issuance of up to 400,000 shares of Common Stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries.

As of June 30, 2022, there were 368,000 options issued and outstanding under the 2010 Stock Plan.

On September 30, 2022, the stockholders approved and adopted an amendment to the Company’s 2010 Stock Plan to increase the number of shares of Company’s common stock reserved for issuance under the Plan from 400,000 to 7,000,000 .

As of September 30, 2022, there were 368,002 options issued and outstanding under the 2020 Stock Plan.

In the event of an employee’s termination, the Company will cease to recognize compensation expense for that employee.

4 unchanged sentences

The fair value of each option or warrant granted is estimated on the date of grant using the Black-Scholes option pricing model.

There were no options granted during the three and six months June 30, ended 2021.

The assumptions used for the three and six months ended June 30, 2022 are as follows:

There were no options granted during the three and nine months ended September 30, 2021.

The assumptions used for the nine months ended September 30, 2022 are as follows:

Exercise price

11 unchanged sentences

The Company estimates the expected life of the option term based on the weighted average life between the dates that options become fully vested and the maximum life of options granted.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

14 unchanged sentences

● monthly over three years

During the three and six months ended June 30, 2022, the Company granted 3,000 options to employees having an approximate fair value of $ 5,000 based upon the Black-Scholes option pricing model, respectively.

There were no options granted during the three and six months ended June 30, 2021

Synthetic Biologics, Inc.

During the nine months ended September 30, 2022, the Company granted 3,000 options to employees having an approximate fair value of $ 5,000 based upon the Black-Scholes option pricing model, respectively.

There were no options granted during the three and nine months ended September 30, 2021.

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

Stock-Based Compensation – (continued)

A summary of stock option activity for the six months ended June 30, 2022 and the year ended December 31, 2021 is as follows:

A summary of stock option activity for the nine months ended September 30, 2022 and the year ended December 31, 2021 is as follows:

Weighted Average

3 unchanged sentences

Balance - December 31, 2021

Balance - June 30, 2022 - outstanding

Balance - June 30, 2022 - exercisable

Grant date fair value of options granted – three months ended June 30, 2022

Weighted average grant date fair value – three months ended June 30, 2022

Balance - September 30, 2022 - outstanding

Balance - September 30, 2022 - exercisable

Grant date fair value of options granted – nine months ended September 30, 2022

Weighted average grant date fair value – nine months ended September 30, 2022

Grant date fair value of options granted – year ended December 31, 2021

Weighted average grant date fair value – year ended December 31, 2021

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to employees for the three and six months ended June 30, 2022 was $ 39,000 and $ 78,000 , respectively, and $ 34,000 and $ 67,000 for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense included in research and development expenses relating to stock options issued to employees for the three and six months ended June 30, 2022 was $ 21,000 and $ 41,000 , respectively, and $ 16,000 and $ 31,000 for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to consultants for the three and six months ended June 30, 2022 was $ 46,000 and $ 93,000 , respectively, and $ 49,000 and $ 98,000 for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense included in research and development expenses relating to stock options issued to consultants for the three and six months ended June 30, 2022 was $ 7,000 and $ 14,000 , respectively, and $ 3,000 and $ 7,000 for the three and six months ended June 30, 2020.

As of June 30, 2022, total unrecognized stock-based compensation expense related to stock options was $ 516,000 , which is expected to be expensed through April 2024.

Synthetic Biologics, Inc.

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to employees for the three and nine months ended September 30, 2022 was $ 46,000 and $ 124,000 , respectively, and $ 34,000 and $ 101,000 for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense included in research and development expenses relating to stock options issued to employees for the three and nine months ended September 30, 2022 was $ 21,000 and $ 62,000 , respectively, and $ 16,000 and $ 47,000 for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to consultants for the three and nine months ended September 30, 2022 was $ 47,000 and $ 141,000 , respectively, and $ 49,000 and $ 147,000 for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense included in research and development expenses relating to stock options issued to consultants for the three and nine months ended September 30, 2022 was $ 7,000 and $ 21,000 , respectively, and $ 3,000 and $ 10,000 for the three and nine months ended September 30, 2021.

As of September 30, 2022, total unrecognized stock-based compensation expense related to stock options was $ 395,000 , which is expected to be expensed through May 2024.

Theriva Biologics, Inc.

and Subsidiaries

3 unchanged sentences

Excess tax benefits are realized tax benefits from tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options.

The Company did not record any excess tax benefits during the three and six months ended June 30, 2022 and 2021.

The Company did not record any excess tax benefits during the three and nine months ended September 30, 2022 and 2021.

Stock Warrants

11 unchanged sentences

During the three months ended March 31, 2021, 1,165,575 warrants were exercised for cash proceeds of $ 8.0 million.

There were no warrants exercised during the three and six months ended June 30, 2022.

A summary of all warrant activity for the Company for the quarter ended June 30, 2022 and the year ended December 31, 2021 is as follows:

There were no warrants exercised during the three and nine months ended September 30, 2022.

On August 3, 2022 the Company announced the exercise price of warrants issued by the Company in October 2018 was reduced from $ 6.90 per Warrant per full share of the Company’s common stock, $ 0.001 par value per share to $ 1.22 per Warrant per full share of Common Stock.

The reduction was the result of the issuance of shares of Preferred Stock by the Company in a private placement.

The effect of the change in the exercise price of the warrants as a result of the triggering of the down round protection clause in the Warrants was recorded as a deemed dividend of $ 340,000 during the three and nine months ended September 30, 2022, which reduces the income available to common stockholders.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Stock Warrants – (continued)

A summary of all warrant activity for the Company for the quarter ended September 30, 2022 and the year ended December 31, 2021 is as follows:

Weighted Average

3 unchanged sentences

Balance at December 31, 2021

Balance at June 30, 2022

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Stock Warrants – (continued)

Balance at September 30, 2022

On December 26, 2017, the Company entered into a consulting agreement for advisory services for a period of six months.

1 unchanged sentence

The warrant is equity classified and the fair value of the warrant approximated $ 9,000 and was measured using the Black-Scholes option pricing model.

A summary of all outstanding and exercisable common stock warrants as of June 30, 2022 is as follows:

A summary of all outstanding and exercisable common stock warrants as of September 30, 2022 is as follows:

Weighted Average

5 unchanged sentences

Diluted net loss per share assumes the issuance of potential dilutive common shares outstanding for the period and adjusts for any changes in income and the repurchase of common shares that would have occurred from the assumed issuance, unless such effect is anti-dilutive.

Net loss attributable to common stockholders for the three and six months ended June 30, 2022 was approximately $ 5.0 million and $ 9.2 million, respectively.

Net loss attributable to common stockholders for the three and six months ended June 30, 2021 was approximately $ 3.2 million and $ 14.7 million, respectively and excludes net loss attributable to non-controlling interest of $ 0.1 million and includes the accretion of the Series B preferred discount of $ 1.5 million as a result of converted shares and Series A preferred stock accrued dividends of $ 0.1 million for the six months ended June 30, 2021 and the deemed dividend of $ 7.4 million resulting from the effect of the Series A preferred stock price adjustment during the first quarter of 2021.

There were no shares of common stock underlying Series B Preferred shares convertible to common stock that were excluded from the computations of net loss per common share for the three and six months ended June 30, 2021 since all remaining Series B preferred stock were converted to common stock in 2021.

The number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share and for the three and six months ended June 30, 2022 were 607,334 and 634,497 , respectively and for the three and six months ended June 30, 2021 were 399,742 and 634,497 , respectively, because their effect is anti-dilutive.

Net loss attributable to common stockholders for the three and nine months ended September 30, 2022 was approximately $ 5.2 million and $ 14.4 million, respectively.

Net loss attributable to common stockholders for the three and nine months ended September 30, 2022 includes the effect of the warrant exercise price adjustment of $ 340,000 .

Net loss attributable to common stockholders for the three and nine months ended September 30, 2021 was approximately $ 3.3 million and $ 17.9 million, respectively.

Net loss attributable to common stockholders for the nine months ended September 30, 2021 excludes net loss attributable to non-controlling interest of $ 0.1 million and includes the accretion of the Series B preferred discount of $ 1.5 million as a result of converted shares and Series A preferred stock accrued dividends of $ 0.1 million and the deemed dividend of $ 7.4 million resulting from the effect of the Series A preferred stock price adjustment during the first quarter of 2021.

There were no shares of common stock underlying Series B Preferred shares convertible to common stock that were excluded from the computations of net loss per common share for the three and nine months ended September 30, 2021 since all remaining Series B preferred stock were converted to common stock in 2021.

The number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share and for the three and nine months ended September 30, 2022 were 607,370 and 634,497 , respectively and for the three and nine months ended September 30, 2021 were 399,742 and 634,497 , respectively, because their effect is anti-dilutive.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Non-controlling Interest and Related Party

6 unchanged sentences

and (ii) transferred to CSMC an additional two million four hundred twenty thousand ( 2,420,000 ) shares of common stock of its subsidiary SYN Biomics, Inc.

(“Synbiomics”) owned by the Company, such that after such issuance CSMC owns an aggregate of seven million four hundred eighty thousand ( 7,480,000 ) shares of common stock of SYN Biomics, representing seventeen percent ( 17 %) of the issued and outstanding shares of SYN Biomics’ common stock.

(“Synbiomics”) owned by the Company, such that after such issuance CSMC owned an aggregate of seven million four hundred eighty thousand ( 7,480,000 ) shares of common stock of SYN Biomics, representing seventeen percent ( 17 %) of the issued and outstanding shares of SYN Biomics’ common stock.

The services rendered are recorded to research and development expense in proportion with the progress of the study and based overall on the fair value of the shares ($ 285,000 ) as determined at the date of IRB approval.

There was no expense recorded related to this transaction during the three and six months ended June 30, 2022 and 2021.

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Non-controlling Interest and Related Party – (continued)

There was no expense recorded related to this transaction during the three and nine months ended September 30, 2022 and 2021.

The Agreement also provided CSMC with a right, commencing on the six month anniversary of issuance of the stock under certain circumstances in the event that the shares of stock of SYN Biomics are not then freely tradeable, and subject to NYSE American, LLC approval, to exchange its SYN Biomics shares for unregistered shares of the Company’s common stock, with the rate of exchange based upon the relative contribution of the valuation of SYN Biomics to the public market valuation of the Company at the time of each exchange.

The Stock Purchase Agreement also provides for tag-along rights in the event of the sale by the Company of its shares of SYN Biomics.

The Stock Purchase Agreement also provided for tag-along rights in the event of the sale by the Company of its shares of SYN Biomics.

On September 30, 2020, CSMC MAST formally agreed to discontinue the ongoing Phase 2b investigator-sponsored clinical study of SYN-010 following the results of a planned interim futility analysis.

9 unchanged sentences

In accordance with ASC 810, the Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common stockholders in the face of the Consolidated Statements of Operations.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock

Series C and D Preferred Stock

On July 29, 2022, the Company closed a private placement offering pursuant to the terms of a Securities Purchase Agreement dated as of July 28, 2022 entered into with MSD Credit Opportunity Master Fund, L.P., pursuant to which the Company agreed to issue and sell 275,000 shares of the Company’s Series C Convertible Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”), and 100,000 shares of the Company’s Series D Convertible Preferred Stock, par value $ 0.001 per share (the “Series D Preferred Stock,” and together with the Series C Preferred Stock, the “Preferred Stock”), at an offering price of $ 8.00 per share, for gross proceeds of approximately $ 3.0 million in the aggregate, before the deduction of discounts, fees and offering expenses.

The shares of Preferred Stock will be convertible, at a conversion price (the “Conversion Price”) of $ 1.22 per share (subject in certain circumstances to adjustments), into an aggregate of 2,459,016 shares of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), at the option of the holders of the Preferred Stock and, in certain circumstances, by the Company.

The Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing.

The Company included certain proposals at its 2022 annual meeting of stockholders, including to consider (i) an amendment to the Company’s Articles of Incorporation, as amended (the “Charter”), to change the name of the Company to “Theriva Biologics, Inc.” (the “Name Change”), (ii) an amendment to the Charter to increase the number of authorized shares of Common Stock from 20,000,000 to 350,000,000 (the “Authorized Common Stock Increase”) and (iii) any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Authorized Common Stock Increase (collectively, the “Stockholder Items”).

The Investor has agreed in the Purchase Agreement to (i) not transfer, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of the shares of the Preferred Stock until the earlier of the date that the Authorized Common Stock Increase is effected or October 26, 2022 (which may be extended to December 31, 2022 if certain conditions are met), (ii) vote the shares of the Series C Preferred Stock purchased in the Offering in favor of the Stockholder Items and (iii) vote the shares of the Series D Preferred Stock purchased in the Offering in the same proportion as shares of Common Stock and any other shares of capital stock of the Company that are entitled to vote thereon (excluding any shares of Common Stock that are not voted) on the Stockholder Items.

Pursuant to the Purchase Agreement, the Company has filed certificates of designation (the “Certificates of Designation”) with the Secretary of the State of Nevada designating the rights, preferences and limitations of the shares of Series C Preferred Stock and Series D Preferred Stock.

The Certificate of Designation for the Series C Preferred Stock provides, in particular, that the Series C Preferred Stock will have no voting rights other than the right to vote as a class on the Stockholder Items and the right to cast votes on an as converted to Common Stock basis on the Stockholder Items.

The Certificate of Designation for the Series D Preferred Stock provides, in particular, that the Series D Preferred Stock will have no voting rights other than the right to vote as a class on the Stockholder Items and the right to cast 20,000 votes per share of Series D Preferred Stock on the Stockholder Items.

The holders of Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock.

The Conversion Price may be adjusted pursuant to the Certificates of Designation for stock dividends and stock splits, subsequent rights offering, pro rata distributions of dividends or the occurrence of a fundamental transaction (as defined in the applicable Certificate of Designation).

The Series C Preferred Stock and Series D Preferred Stock is classified as temporary equity as a result of the deemed liquidation provision.

Transaction expenses paid to third parties will be charged to temporary equity and will not be accreted as deemed dividends until redemption becomes probable.

In order to comply with Section 122 of the NYSE American Company Guide, on August 9, 2022 the Company and the holder of the Company’s Series C preferred stock and Series D preferred stock amended the Securities Purchase Agreement entered into between them on July 28, 2022 to provide that the holder may only submit 1,549,295 of the votes relating to the Series C Preferred Stock that it would otherwise be entitled to vote.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

Series B Preferred Stock

6 unchanged sentences

The exercise price of the Warrants is subject to adjustment in the event of certain dilutive issuances.

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

On November 16, 2020, the exercise price of the Warrants was reduced from $ 13.80 per Warrant per full share of Common Stock to $ 6.90 per Warrant per full share of common stock.

1 unchanged sentence

The effect of the change in the exercise price of the warrants as a result of the triggering of the down round protection clause in the Warrants was recorded as a deemed dividend in accumulated deficit of $ 880,000 , which reduces the income available to common stockholders for the year ended December 31, 2020.

The October 2018 Warrants are immediately exercisable at a price of $ 6.90 (effective November 16, 2020) per share of common stock and will expire on October 15, 2023.

If, at the time of exercise, there is no effective registration statement registering, or no current prospectus available for, the issuance of the shares of common stock to the holder, then the October 2018 warrants may only be exercised through a cashless exercise.

No fractional shares of common stock will be issued in connection with the exercise of any October 2018 warrants.

In lieu of fractional shares, the holder will receive an amount in cash equal to the fractional amount multiplied by the fair market value of any such fractional shares.

The reduction was the result of the issuance of shares of Preferred Stock by the Company in a private placement.

Since the effective conversion price of the Series B Preferred Stock is less than the fair value of the underlying Common Stock at the date of issuance, there is a beneficial conversion feature (“BCF”) at the issuance date.

1 unchanged sentence

During the three months ended March 31, 2021, 398 shares were converted resulting in the recognition of a deemed dividends of $ 1.5 million for the amortization of the Series B Preferred Stock discount upon conversion.

During the three and six months ended June 30, 2022 there were no shares converted as all shares were converted in 2021 and 2020.

During the three and nine months ended September 30, 2022 there were no shares remaining outstanding as all shares were converted in 2021 and 2020.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

Series A Preferred Stock

6 unchanged sentences

In the event of any liquidation, dissolution or winding-up of the Company, holders of the Series A Preferred Stock are entitled to a preference on liquidation equal to the greater of (i) an amount per share equal to the stated value plus any accrued and unpaid dividends on such share of Series A Preferred Stock (the “Accreted Value”), and (ii) the amount such holders would receive in such liquidation if they converted their shares of Series A Preferred Stock (based on the Accreted Value and without regard to any conversion limitation) into shares of the common stock immediately prior to any such liquidation, dissolution or winding-up (the greater of (i) and (ii), is referred to as the “Liquidation Value”).

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

Except as otherwise required by law, the holders of Series A Preferred Stock have no voting rights, other than customary protections against adverse amendments and issuance of pari passu or senior preferred stock.

1 unchanged sentence

On or at any time after (i) the VWAP (as defined in the Certificate of Designation) for at least 20 trading days in any 30 trading day period is greater than $ 70.00 , subject to adjustment in the case of stock split, stock dividends or the like the Company has the right, after providing notice not less than 6 months prior to the redemption date, to redeem, in whole or in part, on a pro rata basis from all holders thereof based on the number of shares of Series A Preferred Stock then held, the outstanding Series A Preferred Stock, for cash, at a redemption price per share of Series A Preferred Stock of $ 7,875.00 , subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Convertible Preferred Stock or (ii) the five year anniversary of the issue date, the Company shall have the right to redeem, in whole or in part, on a pro rata basis from all holders thereof based on the number of shares of Series A Convertible Preferred Stock then held, the outstanding Series A Preferred Stock, for cash, at a redemption price per share equal to the Liquidation Value.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

The Series A Preferred Stock was classified as temporary equity due to the shares being redeemable based on contingent events outside of the Company’s control.

15 unchanged sentences

The Company estimated fair value of the inducement consideration of $ 7.4 million and as a result has recorded a corresponding deemed dividend of $ 7.4 million during the three months ended March 31, 2021.

Synthetic Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Common and Preferred Stock – (continued)

Riley Securities Sales Agreement

18 unchanged sentences

During the three months ended March 31, 2021, the Company sold through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement approximately 7.9 million shares of the Company’s common stock and received net proceeds of approximately $ 66.0 million.

During the three and six months ended June 30, 2022, there were no sales of the Company’s common stock through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement.

As a result of the acquisition of VCN the company acquired interest-free or below-market interest rates loans ( 0 %- 1 %) extended by Spanish governmental institutions of Ministerio de Ciencia , Innovacion y Universidades and ACC10 Generalitat de Catalunya The maturities of these loans are between 2027 and 2028.

As a result of the VCN acquisition, the company maintains a restricted cash collateral account of $ 96,000 relating to the RETOS 2015 loan, which is reflected as a non-current asset on the balance sheet.

June 30, 2022

During the three and nine months ended September 30, 2022, there were no sales of the Company’s common stock through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

As a result of the acquisition of VCN the Company acquired interest-free or below-market interest rates loans ( 0 %- 1 %) extended by Spanish governmental institutions of Ministerio de Ciencia, Innovacion y Universidades and ACC10 Generalitat de Catalunya.

The maturities of these loans are between 2027 and 2028.

The Company is required to maintain a restricted cash collateral account of $ 90,000 relating to the RETOS 2015 loan, which is reflected as a non-current asset on the balance sheet.

September 30, 2022

The difference between the fair value of these liabilities (when relevant conditions associated with the grants are met) and the amount received is recognized as a government grant and classified as other operating income in the statement of profit and loss.

A maturity analysis of the debt as of June 30, 2022 is as follows (amounts in thousands of dollars) :

Synthetic Biologics, Inc.

A maturity analysis of the debt as of September 30, 2022 is as follows (amounts in thousands of dollars) :

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

Commitments and Contingencies

The Company’s existing lease as of June 30, 2022 for its U.S.

The Company’s existing lease as of September 30, 2022 for its U.S.

location is classified as an operating lease.

As of June 30, 2022, the Company has two operating leases for facilities.

As of September 30, 2022, the Company has two operating leases for facilities.

During the quarter ended June 30, 2021, the Company renewed its Rockville MD facility lease by entering into a Second Lease Amendment which extends the lease term for 63 months beginning on September 1, 2022 and ending on December 31, 2027 at stated rental rates and including a 3-month rent abatement.

8 unchanged sentences

This lease was executed for an initial term estimated to begin in January 2023 until October 2026, with an option to renew for an additional five years .

Operating lease costs are presented as part of general and administrative expenses in the condensed consolidated statements of operations, and for the three and six months ended June 30, 2022 approximated $ 138,000 and $ 245,000 , respectively and for the three and six months ended June 30, 2021 approximated $ 68,000 and $ 118,000 , respectively.

For the three and six months ended June 30, 2022, operating cash flows used for operating leases approximated $ 144,000 and $ 257,000 , respectively, For the three and six months ended June 30, 2021, operating cash flows used for operating leases approximated $ 80,000 and $ 160,000 , respectively, and the right of use assets exchanged for operating the lease obligation was $ 1.3 million.

Operating lease costs are presented as part of general and administrative expenses in the condensed consolidated statements of operations, and for the three and nine months ended September 30, 2022 approximated $ 163,000 and $ 409,000 , respectively and for the three and nine months ended September 30, 2021 approximated $ 77,000 and $ 195,000 , respectively.

For the three and nine months ended September 30, 2022, operating cash flows used for operating leases approximated $ 142,000 and $ 399,000 , respectively.

For the three and nine months ended September 30, 2021, operating cash flows used for operating leases approximated $ 80,000 and $ 240,000 , respectively, and the right of use assets exchanged for operating the lease obligation was $ 1.3 million.

The day one non-cash addition of right of use assets due to adoption of ASC 842 was $ 538,000 .

A maturity analysis of our operating leases as of June 30, 2022 is as follows (amounts in thousands of dollars) :

Future undiscounted cash flow for the years ending March 31,

A maturity analysis of our operating leases as of September 30, 2022 is as follows (amounts in thousands of dollars) :

Future undiscounted cash flow for the years ending September 30,

Discount factor

2 unchanged sentences

Lease liability – long term

Risks and Uncertainties

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of COVID-19 and the risks to the international community as the virus spreads globally beyond its point of origin.

In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

Synthetic Biologics, Inc.

Theriva Biologics, Inc.

and Subsidiaries

1 unchanged sentence

Commitments and Contingencies – (continued)

As COVID-19 continued to spread around the globe, the Company experienced disruptions that impacted its business and clinical trials, including the postponement of clinical site initiation of the Phase 1b/2a clinical trial of SYN-004.

The extent to which the COVID-19 pandemic impacts the Company’s business, the clinical development of VCN-01, SYN-004 (ribaxamase) and SYN-020, the business of the Company’s suppliers and other commercial partners, the Company’s corporate development objectives and the value of and market for the Company’s common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, especially in light of the new variants, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on the Company's business, financial condition, results of operations and growth prospects.

In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces.

Risks and Uncertainties

The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future.

The outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have been disrupted;

facilities and production have been suspended;

and demand for certain goods and services, such as medical services and supplies, have spiked, while demand for other goods and services, such as travel, have fallen.

The future progression of the pandemic and its effects on the Company’s business and operations are uncertain.

The Company may face difficulties recruiting or retaining patients in its ongoing and planned clinical trials if patients are affected by the virus or are fearful of traveling to our clinical trial sites because of the outbreak.

We and our third-party contract manufacturers, contract research organizations, and clinical sites may also face disruptions in procuring items that are essential to our research and development activities, including, for example, medical and laboratory supplies used in its clinical trials or preclinical studies, in each case, that are sourced from abroad or for which there are shortages because of ongoing efforts to address the outbreak.

Further, although the Company have not experienced any material adverse effects on its business due to increasing inflation, it has raised operating costs for many businesses and, in the future, could impact demand or pricing manufacturing of its drug candidates or services providers, foreign exchange rates or employee wages.

The Company is actively monitoring the effects these disruptions and increasing inflation could have on its operations.

Through the VCN Acquisition, the Company has operations in Spain and may conduct research and development, manufacturing, and clinical trials in Western European countries.

1 unchanged sentence

Subsequent Events

(the “SPA”), pursuant to which the Company agreed to issue and sell 275,000 shares of the Company’s Series C Convertible Preferred Stock, par value $ 0.001 per share, and 100,000 shares of the Company’s Series D Convertible Preferred Stock, par value $ 0.001 per share, at an offering price of $ 8.00 per share, for gross proceeds of approximately $ 3.0 million in the aggregate, before the deduction of discounts, fees and offering expenses.

The shares of Preferred Stock will be convertible, at a conversion price of $ 1.22 per share (subject in certain circumstances to adjustments), into an aggregate of 2,459,016 shares of the Company’s common stock, par value $ 0.001 per share, at the option of the holders of the Preferred Stock and, in certain circumstances, by the Company.

The Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing.

In order to comply with Section 122 of the NYSE American Company Guide, on August 9, 2022 the Company and the holder of the Company’s Series C preferred stock and Series D preferred stock amended the SPA to provide that the holder may only submit 1,549,295 of the votes relating to the Series C Preferred Stock that it would otherwise be entitled to vote.

The reduction was the result of the issuance of shares of Preferred Stock by the Company in a private placement.

Effective October 12, 2022, the “Company, changed its name to Theriva Biologics, Inc.

by filing a Certificate of Amendment to its Articles of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Nevada on October 11, 2022.

In addition, effective October 12, 2022, the Company amended and restated its Amended and Restated Bylaws (the “Bylaws”) to reflect the Name Change (the “Amended and Restated Bylaws”).

The Amended and Restated Bylaws contain no other changes.

In accordance with the Nevada Revised Statutes and the Bylaws, the Board approved the Amended and Restated Bylaws, and stockholder approval was not required for such amendment.

On October 11, 2022, the Company filed a Certificate of Change to its Articles of Incorporation (the “Certificate of Change”) with the Secretary of State of the State of Nevada that was effective on October 12, 2022 that increased the number of the Company’s authorized shares of common stock, $ 0.001 par value per share (the “Common Stock”), from 20,000,000 shares to 350,000,000 shares.

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 1. Financial Statements