Theriva Biologics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data . Page Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Potomac, Maryland; PCAOB ID# 243 ) 69 Consolidated Balance Sheets 72 Consolidated Statements of Operations and Comprehensive Loss 73 Consolidated Statements of (Deficit) Equity 74 Consolidated Statements of Cash Flows 75 Notes to Consolidated Financial Statements 76 ​ ​ ​ 68 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Theriva Biologics, Inc. Rockville, Maryland Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Theriva Biologics, Inc. as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ (deficit) equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Business combination – Fair value measurement of certain acquired intangible assets As described in Note 3 to the consolidated financial statements, during 2022 the Company completed the acquisition of VCN Biosciences, S.L., now known as Theriva Biologics, S.L. (“VCN”), for total consideration of $22.8 million. The Company accounted for the transaction under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values on the acquisition date, including identifiable intangible assets related to in-progress research and development (“IPR&D”). Additionally, the Company recorded an adjustment to the preliminary estimates of fair value of the IPR&D within the measurement period of up to one year from the date of acquisition. The Company estimated the fair value of certain of the IPR&D intangible assets using expected cash flows and industry standard valuation techniques, which required the Company to make significant estimates and assumptions related to future cash flows, including those 69 Table of Contents related to forecasted development costs to bring the drug candidates to market, forecasted revenue to be derived from the drug candidates and associated cost of sales and selling, general and administrative expenses, and discount rates. We identified the determination of the fair value of certain of the IPR&D as a critical audit matter because of the significant estimates and assumptions the Company makes to calculate its fair value for purposes of recording the acquisition and the measurement period adjustment. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of the Company’s forecasts of future cash flows, specifically forecasted revenues to be derived from the drug candidate and associated cost of sales and selling, general and administrative expenses, and discount rates used in the valuation of the IPR&D, including the need to involve our internal fair value specialists. The primary procedures we performed to address this critical audit matter included: ● Testing the completeness and accuracy of the underlying data supporting the determination of the various inputs. ● Evaluating the reasonableness of the Company’s forecasted revenues to be derived from the drug candidate and associated cost of sales and selling, general and administrative expenses by comparing these assumptions to those of those of comparable companies, as well as evaluated potentially contradictory information. ● Utilizing our valuation specialists, to evaluate the reasonableness of the valuation methodology and discount rates by: o Evaluating the reasonableness of the Company's valuation methods and testing the mathematical accuracy of the calculations. o Developing a range of independent estimates for the discount rate and comparing those to the discount rate selected by the Company. IPR&D Impairment Assessment As described in Notes 4 and 14 to the consolidated financial statements, the Company’s consolidated IPR&D intangible asset balances at September 30 and December 31, 2022 were $17.5 million and $19.2 million, respectively. The Company performs an annual impairment test of IPR&D, and on a quarterly basis, monitors IPR&D for potential indicators of impairment. During 2022, the Company concluded that triggering events occurred at both September 30 and December 31, 2022. No impairment charges were recorded as a result of the Company's interim and annual impairment tests. The Company estimated the fair value of certain of the IPR&D intangible assets using expected cash flows and industry standard valuation techniques, which required the Company to make significant estimates and assumptions related to future cash flows, including those related to forecasted development costs to bring the drug candidates to market, forecasted revenue to be derived from the drug candidates and associated cost of sales and selling, general and administrative expenses, and discount rates. We identified the determination of the fair value of certain of the IPR&D as a critical audit matter because of the significant estimates and assumptions the Company makes to calculate its fair value for purposes of the IPR&D impairment analysis. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of the Company’s forecasts of future cash flows, specifically forecasted revenues to be derived from the drug candidate and associated cost of sales and selling, general and administrative expenses, and discount rates used in the valuation of the IPR&D, including the need to involve our internal fair value specialists. The primary procedures we performed to address this critical audit matter included: ● Testing the completeness and accuracy of the underlying data supporting the determination of the various inputs. ● Evaluating the reasonableness of the Company’s forecasted revenues to be derived from the drug candidate and associated cost of sales and selling, general and administrative expenses by comparing these assumptions to those of those of comparable companies, as well as evaluated potentially contradictory information. ● Utilizing our valuation specialists, to evaluate the reasonableness of the valuation methodology and discount rates by: 70 Table of Contents o Evaluating the reasonableness of the Company’s valuation methods and testing the mathematical accuracy of the calculations. o Developing a range of independent estimates for the discount rate and comparing those to the discount rate selected by the Company. /s/ BDO USA, LLP We have served as the Company's auditor since 2012. Potomac, Maryland March 30, 2023 ​ ​ ​ 71 Table of Contents Theriva Biologics, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands except share and par value amounts) ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Assets ​ ​ ​ ​ ​ Current Assets ​ ​ Cash and cash equivalents ​ $ 41,786 ​ $ 67,325 Prepaid expenses and other current assets ​ 3,734 ​ 1,533 Total Current Assets ​ 45,520 ​ 68,858 ​ ​ ​ ​ Non-Current Assets ​ ​ ​ ​ Property and equipment, net ​ 345 ​ 101 Restricted cash ​ ​ 99 ​ ​ — Right of use asset ​ ​ 1,199 ​ ​ 1,383 In-process research and development ​ 19,150 ​ — Goodwill ​ 5,525 ​ — Deposits and other assets ​ ​ 23 ​ ​ 23 Total Assets ​ $ 71,861 ​ $ 70,365 Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ Current Liabilities: ​ ​ Accounts payable ​ $ 915 ​ $ 524 Accrued expenses ​ 1,496 ​ 1,928 Accrued employee benefits ​ ​ 1,403 ​ ​ 978 Contingent consideration, current portion ​ 2,973 ​ — Loans payable-current ​ ​ 57 ​ ​ — Operating lease liability ​ ​ 216 ​ ​ 124 Total Current Liabilities ​ 7,060 ​ 3,554 ​ ​ ​ ​ ​ ​ ​ Non-current Liabilities ​ ​ ​ ​ ​ ​ Non-current contingent consideration ​ ​ 7,211 ​ ​ — Loan Payable - Long term ​ ​ 221 ​ ​ — Deferred tax liabilities, net ​ ​ 1,618 ​ ​ — Lease liability - Long term ​ ​ 1,187 ​ ​ 1,403 Total Liabilities ​ 17,297 ​ 4,957 ​ ​ ​ ​ ​ ​ ​ Commitments and Contingencies ​ ​ ​ ​ Temporary Equity ​ ​ ​ ​ ​ ​ Series C convertible preferred stock, $ 0.001 par value; 10,000,000 authorized; 275,000 issued and outstanding ​ 2,006 ​ — Series D convertible preferred stock, $ 0.001 par value; 10,000,000 authorized; 100,000 issued and outstanding ​ ​ 728 ​ ​ — Stockholders’ Equity: ​ ​ Common stock, $ 0.001 par value; 20,000,000 shares authorized, 15,844,294 issued and 15,124,061 outstanding at December 31, 2022 and 13,204,487 issued and 13,204,254 outstanding at December 31, 2021 ​ 16 ​ 13 Additional paid-in capital ​ 343,750 ​ 336,679 Treasury stock at cost, 720,000 shares, at December 31, 2022 ​ ​ ( 288 ) ​ ​ ​ Accumulated other comprehensive loss ​ ​ ( 679 ) ​ ​ — Accumulated deficit ​ ( 290,969 ) ​ ( 271,284 ) Total Stockholders‘ Equity ​ ​ 51,830 ​ ​ 65,408 ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 71,861 ​ $ 70,365 ​ See accompanying notes to consolidated financial statements ​ 72 Table of Contents Theriva Biologics, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2022 2021 Operating Costs and Expenses: ​ ​ General and administrative ​ $ 9,858 ​ $ 6,474 Research and development ​ 11,723 ​ 7,800 Total Operating Costs and Expenses ​ 21,581 ​ 14,274 Loss from Operations ​ ( 21,581 ) ​ ( 14,274 ) Other Income: ​ ​ Exchange loss ​ ​ ( 41 ) ​ ​ — Interest income ​ 512 ​ 6 Total Other Income ​ ​ 471 ​ ​ 6 ​ ​ ​ ​ ​ ​ ​ Net Loss before income taxes ​ ​ ( 21,110 ) ​ ​ ( 14,268 ) Income tax benefit ​ ​ 1,425 ​ ​ — Net Loss ​ ( 19,685 ) ​ ( 14,268 ) ​ ​ ​ Net Loss Attributable to Non-controlling Interest ​ — ​ ( 1 ) ​ ​ ​ Net Loss Attributable to Theriva Biologics, Inc. and Subsidiaries ​ $ ( 19,685 ) ​ $ ( 14,267 ) ​ ​ ​ ​ ​ ​ ​ Effect of Warrant exercise price adjustment ​ ( 340 ) ​ — Series A Preferred Stock Dividends ​ ​ ​ ( 24 ) Series B Preferred Stock Dividends ​ ​ ​ ( 1,496 ) Effect of Series A Preferred Stock price adjustment ​ ​ ​ ​ ​ ( 7,402 ) Net Loss Attributable to Common Stockholders ​ $ ( 20,025 ) ​ $ ( 23,189 ) ​ ​ ​ Net Loss Per Share - Basic and Dilutive ​ $ ( 1.31 ) ​ $ ( 1.90 ) ​ ​ ​ Weighted average number of shares outstanding during the period - basic and dilutive ​ 15,327,328 ​ 12,187,504 ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ​ ( 19,685 ) ​ ​ ( 14,268 ) Loss on foreign currency translation ​ ​ ( 679 ) ​ ​ — Total comprehensive loss ​ ​ ( 20,364 ) ​ ​ ( 14,268 ) Comprehensive loss attributable to non-controlling interest ​ ​ — ​ ​ ( 1 ) Comprehensive loss attributable to Theriva Biologics, Inc. and Subsidiaries ​ ​ ( 20,364 ) ​ ​ ( 14,267 ) ​ See accompanying notes to consolidated financial statements ​ 73 Table of Contents Theriva Biologics, Inc. and Subsidiaries Consolidated Statements of Stockholders (Deficit) Equity (In thousands, except share and par value amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Series B Preferred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Accumulated ​ Non-Controlling ​ Stockholders’ ​ Shares Amount Shares Amount Capital Deficit Interest (Deficit) Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2020 2,925,270 ​ $ 3 3,973 $ 2,477 ​ $ 240,847 ​ $ ( 248,094 ) ​ $ ( 2,773 ) ​ $ ( 7,540 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 416 ​ — ​ — ​ 416 Stock issued under "at-the-market" offering 7,868,532 ​ 8 — ​ — ​ 65,952 ​ — ​ — ​ 65,960 Series A Preferred Stock Dividends — ​ — — ​ — ​ — ​ ( 24 ) ​ — ​ ( 24 ) Warrants Exercised ​ 1,165,575 ​ ​ 1 ​ — ​ ​ — ​ ​ 8,041 ​ ​ — ​ ​ — ​ ​ 8,042 Effect of Series A Preferred Stock price adjustment ​ — ​ ​ — ​ — ​ ​ — ​ ​ 7,402 ​ ​ ( 7,402 ) ​ ​ — ​ ​ — Conversion of Series A Preferred Stock to Common ​ 899,677 ​ ​ 1 ​ — ​ ​ — ​ ​ 12,821 ​ ​ — ​ ​ — ​ ​ 12,822 Conversion of Series B Preferred Stock to Common ​ 345,478 ​ ​ — ​ ( 3,973 ) ​ ​ ( 2,477 ) ​ ​ 3,974 ​ ​ ( 1,497 ) ​ ​ — ​ ​ — Net Loss — ​ — — ​ — ​ — ​ ( 14,267 ) ​ ( 1 ) ​ ( 14,268 ) Reversal of noncontrolling interest due to return of Syn Biomics shares ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 2,774 ) ​ ​ — ​ ​ 2,774 ​ ​ — Balance at December 31, 2021 13,204,531 ​ $ 13 — ​ $ — ​ $ 336,679 ​ $ ( 271,284 ) ​ $ — ​ $ 65,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock $0.001 Par Value ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Accumulated ​ Comprehensive ​ ​ ​ Stockholders’ ​ Shares Amount Capital Deficit income Treasury Stock Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2021 13,204,531 ​ $ 13 ​ $ 336,679 ​ $ ( 271,284 ) ​ $ — — ​ $ 65,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — ​ 475 ​ — ​ — — ​ 475 Issuance of Common Stock for VCN Acquisition 2,639,530 ​ 3 ​ 6,596 ​ — ​ — — ​ 6,599 Translation gains (losses) — ​ — ​ — ​ — ​ ( 679 ) — ​ ( 679 ) Treasury Stock ​ ​ ​ ​ ( 288 ) ​ ( 288 ) Net loss — ​ — ​ — ​ ( 19,685 ) ​ — — ​ ( 19,685 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2022 15,844,061 ​ $ 16 ​ $ 343,750 ​ $ ( 290,969 ) ​ $ ( 679 ) ( 288 ) ​ $ 51,830 ​ See accompanying notes to consolidated financial statements ​ 74 Table of Contents Theriva Biologics, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2022 2021 Cash Flows From Operating Activities: ​ ​ Net loss ​ $ ( 19,685 ) ​ $ ( 14,268 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Stock-based compensation ​ 475 ​ 416 Income tax benefit ​ ( 1,425 ) ​ — Change in fair value of contingent consideration ​ ​ 2,091 ​ ​ — Right of use asset ​ ​ 183 ​ ​ 166 Depreciation ​ 85 ​ 87 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other current assets ​ ( 363 ) ​ 174 Accounts payable ​ ( 385 ) ​ ( 363 ) Accrued expenses ​ ( 267 ) ​ 1,004 Accrued employee benefits ​ 333 ​ 110 Lease liability ​ ​ ( 124 ) ​ ​ ( 216 ) Net Cash Used In Operating Activities ​ ( 19,082 ) ​ ( 12,890 ) ​ ​ ​ Cash Flows From Investing Activities: ​ ​ Purchases of property and equipment ​ ( 116 ) ​ ( 14 ) Cash paid for business combination; net of cash acquired ​ ( 3,863 ) ​ — Pre-acquisition loan to VCN ​ ( 417 ) ​ — Net Cash Used In Investing Activities ​ ​ ( 4,396 ) ​ ​ ( 14 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ Payment of debt ​ $ ( 1,376 ) ​ — Proceeds from sale of Series C Preferred Stock, net of issuance cost ​ ​ 2,006 ​ — Proceeds from sale of Series D Preferred Stock, net of issuance cost ​ 728 ​ — Payment of contingent consideration ​ ​ ( 3,000 ) ​ ​ ​ Purchase of treasury stock ​ ​ ( 288 ) ​ ​ — Proceeds from “at-the-market” stock issuance ​ ​ — ​ ​ 65,960 Proceeds from issuance of common stock for warrant exercises ​ ​ — ​ ​ 8,042 Net Cash (used in) Provided By Financing Activities ​ ​ ( 1,930 ) ​ ​ 74,002 ​ ​ ​ ​ ​ ​ ​ Effects of FX on cash ​ ​ ( 32 ) ​ ​ — Net (decrease) increase in cash and cash equivalents and restricted cash ​ ​ ( 25,408 ) ​ ​ 61,098 Cash and cash equivalents and restricted at the beginning of this period ​ ​ 67,325 ​ ​ 6,227 Cash and cash equivalents and restricted cash at the end of this period ​ $ 41,885 ​ $ 67,325 ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents, and restricted cash reported in the statement of financial position ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ 41,786 ​ ​ 67,325 Restricted cash included in other long-term assets ​ ​ 99 ​ ​ — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows ​ $ 41,885 ​ $ 67,325 ​ ​ ​ ​ ​ ​ ​ Supplemental non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Fair value of contingent consideration issued in a business combination ​ $ 10,093 ​ $ — Fair value of equity issued as consideration in a business combination ​ $ 6,599 ​ $ — Effective settlement of pre-closing VCN financing ​ $ 417 ​ $ — Goodwill measurement period adjustment ​ $ ( 1,061 ) ​ $ — In-process R&D measurement period adjustment ​ $ 810 ​ $ — Deferred tax liability measurement period adjustment ​ $ 202 ​ $ — Effect of Warrant exercise price adjustment ​ $ 340 ​ $ — Conversion of Series A Preferred Stock ​ $ — ​ $ 12,822 Effect of Series A Preferred Stock price adjustment ​ $ — ​ $ 7,402 Return of SYN Biomics Stock ​ $ — ​ $ 2,774 Conversion of Series B Preferred Stock ​ $ — ​ $ 2,477 Deemed dividends for accretion of Series B Preferred Stock discount ​ $ — ​ $ 1,496 Right of use assets from operating lease ​ $ — ​ $ 1,270 In-kind dividends in preferred stock ​ $ — ​ $ 24 ​ See accompanying notes to consolidated financial statements ​ ​ 75 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ 1. Organization and Nature of Operations and Basis of Presentation Description of Business 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. On October 12, 2022, the company changed its name to Theriva Biologics, Inc. In connection with the name change, its Common Stock began trading on the NYSE American LLC under the new ticker symbol “TOVX” effective as of the opening of trading hours on October 13, 2022. Effective November 15, 2022, our acquired subsidiary VCN Biosciences S.L. rebranded to Theriva Biologis S.L. without other changes to its corporate structure. Corporate Structure and Basis of Presentation On July 11, 2022, the Board of Directors of the Company approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $ 0.001 per share, at a ratio of one (1) share of common stock for every ten ( 10 ) shares of common stock (the “Reverse Stock Split”). The Reverse Stock Split was effective on July 25, 2022 (the “Effective Time). As a result of the Reverse Stock Split, each ten (10) pre-split shares of common stock outstanding automatically combined into one (1) new share of common stock without any action on the part of the holders, and the number of outstanding shares of common stock was reduced from 158,437,840 shares to 15,844,061 shares (subject to rounding of fractional shares) and the number of authorized shares of common stock was reduced from 200,000,000 share to 20,000,000 shares and then increased to 350,000,000 at the 2022 annual meeting of stockholders. Stockholders who otherwise were entitled to receive fractional shares because they held a number of pre-reverse stock split shares of the Company’s common stock not evenly divisible by 10, received, in lieu of a fractional share, that number of shares rounded up to the nearest whole share. The Reverse Stock Split did not alter the par value of the Company’s common stock or modify any voting rights or other terms of the common stock. In addition, pursuant to their terms, a proportionate adjustment was made to the per share conversion exercise price and number of shares issuable under all of the Company’s outstanding shares of convertible preferred stock and stock options and warrants to purchase shares of common stock, and the number of shares authorized and reserved for issuance pursuant to the Company’s equity incentive plans was reduced proportionately. All share amounts and exercise/conversion prices in the condensed consolidated financial statements and footnotes below have been adjusted retrospectively for the Reverse Stock Split. As of December 31, 2022, the Company had eight subsidiaries, Pipex Therapeutics, Inc. (“Pipex Therapeutics”), Effective Pharmaceuticals, Inc. (“EPI”), Solovax, Inc. (“Solovax”), CD4 Biosciences, Inc. (“CD4”), Epitope Pharmaceuticals, Inc. (“Epitope”), Healthmine, Inc. (“Healthmine”), Putney Drug Corp. (“Putney”) and Synthetic Biomics, Inc. (“SYN Biomics”). Pipex Therapeutics, EPI, Healthmine, Putney and SYN Biomics are wholly owned, and Solovax, CD4, and Epitope are majority-owned. For financial reporting purposes, the outstanding common stock of the Company is that of Theriva Biologics, Inc. All statements of operations, (deficit) equity and cash flows for each of the entities are presented as consolidated. All subsidiaries were formed under the laws of the State of Delaware on January 8, 2001, except for EPI, which was incorporated in Delaware on December 12, 2000, Epitope which was incorporated in Delaware in January 2002, Putney which was incorporated in Delaware in November 2006, Healthmine which was incorporated in Delaware in December 2007 and SYN Biomics which was incorporated in Nevada in December 2013. 76 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Organization and Nature of Operations and Basis of Presentation – (continued) Liquidity As of December 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. 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. Historically, the Company has financed its operations primarily through public and private sales of its common stock and a private placement of its preferred stock, and it expects to continue to seek to obtain required capital in a similar manner. 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 $ 41.8 million as of December 31, 2022, which includes the net proceeds from sales of our Series C and D Convertible Preferred Stock issued during the three months ended September 30, 2022, the net proceeds of approximately $ 66 million from sales of its Common Stock in “at-the-market” (ATM) equity offerings during 2021 and cash proceeds of approximately $ 8.0 million through the exercise of a portion of the October 2018 warrants. With these additional sources of liquidity, the Company believes it will be able to fund its operations through the next twelve months from the issuance date of these financial statements. Management believes its plan, which includes the advancement of VCN-01, VCN-11, the further development of SYN-004 (ribaxamase) as well as other discovery initiatives, will allow the Company to meet its financial obligations, further advance key products, and maintain the Company’s planned operations for at least one year from the issuance date of these consolidated financial statements. 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. Use of the ATM is limited by certain restrictions and management’s plan does not rely on additional capital from either of these sources. If the Company is not able to obtain additional capital (which is not assured at this time), our long-term business plan may not be accomplished and we may be forced to cease certain development activities. More specifically, the completion of any later stage clinical trial will require significant financing or a significant partnership. ​ 2. Summary of Significant Accounting Policies Principles of Consolidation All intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: the estimated useful lives for property and equipment, research and development costs, business combinations, contingent consideration, fair value of long-lived assets, warrants, preferred stock and stock options granted for services or compensation, respectively, and the valuation allowance for deferred tax assets due to continuing and expected future operating losses. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ from those estimates. ​ 77 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) Non-controlling Interest The Company’s non-controlling interest represents the minority stockholder’s ownership interest related to the Company’s subsidiary, SYN Biomics. 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 on the face of the Consolidated Statements of Operations. On September 5, 2018, the Company entered into an agreement with the minority stockholder for an investigator-sponsored Phase 2 clinical study of SYN-010. Prior to this agreement and IRB approval in December 2018, the Company’s equity interest in SYN Biomics was 88.5 % and the non-controlling stockholder’s interest was 11.5 %. In consideration of the support, the Company issued additional shares of stock to the minority stockholder, resulting in the Company’s equity interest in SYN Biomics being 83.0 % and the non-controlling stockholder’s interest is 17.0 %. During 2021, the minority stockholder returned its shares of SYN Bionics to the Company for no consideration. The Company's interest in SYN Biomics is now 100 %. This is reflected in the Consolidated Statements of Equity (Deficit). Risks and Uncertainties The Company’s operations could be subject to significant risks and uncertainties including financial, operational and regulatory risks and the potential risk of business failure. These conditions may not only limit the Company’s access to capital, but also make it difficult for its customers, its vendors and its ability to accurately forecast and plan future business activities. Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid short-term investments with original maturities of three months or less. All interest bearing and non-interest bearing accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 thousand. The majority of our cash balances are in excess of FDIC coverage. We consider this to be a normal business risk. Property and Equipment Property and equipment is recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter. The estimated useful life by asset description is noted in the following table. ​ Asset Description Estimated Useful Life Office equipment and furniture 3 – 5 years Leasehold improvements and fixtures Lesser of estimated useful life or lease term ​ Depreciation and amortization expense was approximately $ 85,000 and $ 87,000 for the years ended December 31, 2022 and 2021, respectively. When assets are disposed of, the cost and accumulated depreciation are removed from the accounts with any gain or loss reported in the consolidated statement of operations. Repairs and maintenance are charged to expense as incurred. The Company reviews property and equipment for impairment to determine if assets are impaired due to obsolescence. As a result of this review, there was no impairment recognized for the years ended December 31, 2022 and 2021. ​ 78 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) Business Combination The Company accounts for acquisitions using the acquisition method of accounting, which requires that all identifiable assets acquired, and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. 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 estimates. As a result of the acquisition of VCN (see Note 3), 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. IPR&D IPR&D assets represent the fair value assigned to technologies that the Company acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. IPR&D assets are considered to have indefinite-lives until the completion or abandonment of the associated research and development projects. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed to have definite lives and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis on October 1, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that could indicate an impairment. The impairment test consists of a comparison of the estimated fair value of the IPR&D with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Goodwill 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. The Company performs a one-step test in its evaluation of the carrying value of goodwill if qualitative factors determine it is necessary to complete a goodwill impairment test. In the evaluation, the fair value of the relevant reporting unit is determined and compared to its carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and no further action is required. 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 December 31, 2022, the Company has determined that it has one reporting unit. ​ 79 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. The milestone payments will be made upon the achievement of clinical and commercialization milestones as well as single low digit royalty payments and payments upon receipt of sublicensing income. Subsequent to the date of acquisition, the Company reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets. Long-Lived Assets Long-lived assets include property, equipment and right-of-use assets. Management reviews the Company’s long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. The Company determines the extent to which an asset may be impaired based upon its expectation of the asset’s future usability as well as whether there is reasonable assurance that the future cash flows associated with the asset will be in excess of its carrying amount. 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. No impairment charges were recorded during the year ended December 31, 2022 and 2021. Loss per Share Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding including the effect of common share equivalents. 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 year ended December 31, 2022 includes the effect of the Series C and D preferred stock price adjustment of $ 0.3 million. Net loss attributable to common stockholders for the year ended December 31, 2021 includes the effect of the Series A preferred stock price adjustment of $ 7.4 million, the accretion of the Series B preferred discount of $ 1.5 million on converted shares and Series A preferred stock accrued dividends of $ 0.1 million. The number of shares of common stock underlying Series C and D Preferred shares convertible to common stock that were excluded from the computation of the net loss per common share for the year ended December 31, 2022 was 2,459,016 . The number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share for the year ended December 31, 2022 were 2,295,898 and 634,425 , respectively, and for the year ended December 31, 2021 were 625,565 and 634,497 , respectively, because their effect is anti-dilutive. ​ 80 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) Research and Development Costs The Company expenses research and development costs associated with developmental products not yet approved by the FDA to research and development expense as incurred. Research and development costs consist primarily of license fees (including upfront payments), milestone payments, manufacturing costs, salaries, stock-based compensation and related employee costs, fees paid to consultants and outside service providers for laboratory development, legal expenses resulting from intellectual property prosecution and other expenses relating to the design, development, testing and enhancement of our product candidates. Research and development expenses include external contract research organization (“CRO”) services. The Company makes payments to the CROs based on agreed upon terms and may include payments in advance of study services. The Company reviews and accrues CRO expenses based on services performed and relies on estimates of those costs applicable to the stage of completion of a study as provided by the CRO. Accrued CRO costs are subject to revisions as such studies progress to completion. At December 31, 2022 and 2021, we have accrued CRO expenses of $ 0.8 million and $ 0.7 million, respectively, that are included in accrued expenses. As of December 31, 2022, and 2021, we have prepaid CRO costs of $ 2.3 million and $ 0.5 million, respectively, that are included in prepaid expenses. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified on a three-tier hierarchy as follows: ● Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 inputs: Inputs, other than quoted prices, that are observable either directly or indirectly; and ● Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The carrying amounts of the Company’s short-term financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these instruments. 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 Company received approval from the FDA to proceed with the Phase 2 clinical trial of VCN-01 in PDAC. Due to this approval the company paid Grifols Innovation and New Technologies Limited (“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 $ 11.1 million. The fair value of the contingent consideration was $ 10.1 million as of December 31, 2022 and is reflected as current accrued contingent consideration of $ 3.0 million and non-current contingent consideration liability of $ 7.1 million in the consolidated balance sheet. During the year ended December 31, 2022 the Company recognized in operating expense a $ 2.1 million fair value adjustment increase to contingent consideration. ​ 81 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) The fair value of financial instruments measured on a recurring basis is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 10, 2022 Description ​ Total ​ Level 1 ​ Level 2 ​ Level 3 Liabilities: ​ ​ Contingent consideration ​ $ 11,093 — — ​ $ 11,093 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 Description Total Level 1 Level 2 Level 3 Liabilities: ​ ​ Contingent consideration ​ $ 10,184 — — ​ $ 10,184 ​ 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 year ended December 31, 2022 (in thousands): ​ ​ ​ ​ ​ Contingent ​ ​ Consideration Balance at March 10, 2022 ​ $ 11,093 Payment of contingent consideration ​ ( 3,000 ) Change in fair value ​ 2,091 Balance at December 31, 2022 ​ $ 10,184 ​ The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 10, 2022 ​ ​ Valuation ​ Significant ​ Weighted Average ​ Methodology Unobservable Input (range, if applicable) Contingent Consideration Discounted Cash Flows Timing of Milestone Achievment 2022-2027 ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate 7.3 % to 8.6 % ​ Weighted Average Discount rate 7.77 % ​ Probability of Occurrence (periodic for each Milestone) 11.7 % to 92 % ​ Probability of occurrence (cumulative through each Milestone) 5.3 % to 48.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ Valuation ​ Significant ​ Weighted Average ​ Methodology Unobservable Input (range, if applicable) Contingent Consideration Discounted Cash Flows Timing of Milestone Achievment 2023-2028 ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate 13.4 % to 14.1 % ​ Weighted Average Discount rate 13.6 % ​ Probability of Occurrence (periodic for each Milestone) 11.7 % to 95.0 % ​ Probability of occurrence (cumulative through each Milestone) 6.9 % to 95.0 % ​ ​ 82 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) Stock-Based Payment Arrangements Generally, all forms of stock-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date typically using the Black-Scholes option pricing model, based on the estimated number of awards that are ultimately expected to vest. Stock-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the stock-based payment, whichever is more readily determinable. The expense resulting from stock-based payments is recorded in research and development expense or general and administrative expense in the Consolidated Statements of Operations, depending on the nature of the services provided. Segment information The Company operates in one operating segment engaged in the research, development and commercialization of therapeutic drugs in which revenues are derived from product, license, and contract revenues. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (CODM), the chief executive officer, in deciding how to allocate resources and assessing performance. The Company’s CODM allocates resources and assesses performance based upon discrete financial information at the consolidated level. Foreign Currencies The functional currency of the Company’s VCN subsidiary is the Euro. VCN’s Assets and liabilities are translated to U.S. dollars based on exchange rates at the end of each reporting period. Income and expense items are translated at weighted average exchange rates prevailing during the reporting period. Translation adjustments are accumulated in a separate component of stockholders’ equity in the accompanying consolidated balance sheets. Transaction gains and losses are classified as other income (expense) net in the accompanying consolidated statements of operations. Income Taxes The Company accounts for income taxes under the liability method; under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. The Company utilizes a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Recent Accounting Pronouncements and Developments In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity's Own Equity . This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related earnings per share guidance for both Subtopics. 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 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 third quarter, specifically the cash conversion and beneficial conversion features. 83 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 2. Summary of Significant Accounting Policies – (continued) In October 2021, the FASB issued Accounting Standards Update 2021-08 that address the accounting for Contract Assets and Liabilities from Contracts with Customers in a business combination (“ASU 2021-08”), with an effective date for SYN of January 1, 2024 (earlier adoption permitted). ASU 2021-08 provides that existing contract assets and liabilities (including deferred costs to obtain and deferred revenue) are measured in a business combination under the measurement and recognition requirements of ASC 606. ASU 2021-08 should generally “result in an acquirer recognizing and measuring the acquired contract assets and liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.” The Company is currently assessing the impact of ASU 2021-08 on its consolidated financial statements. Restatement of Previously Issued Unaudited Interim Consolidated Financial Statements In connection with the preparation of its consolidated financial statements for the twelve months ended December 31, 2022, the Company determined that its previously issued unaudited interim consolidated financial statements for the periods ended June 30, and September 30, 2022 contained errors in the application of U.S. generally accepted accounting principles as summarized below. Application of FASB ASC 740 Income taxes During the preparation of its annual tax provision for the year ended December 31, 2022, the Company determined that a deferred tax asset related to VCN’s indefinite-lived net operating loss generated during the second and third quarters of 2022 should have been established. Further, because of an existing deferred tax liability associated with an indefinite-lived intangible asset is considered a source of income for the deferred tax asset, the deferred tax asset was determined to be more likely than not recoverable. Since the deferred tax asset was determined to be more likely than not recoverable it would have resulted in an income tax benefit during the interim periods thereby reducing the Company’s consolidated net loss and loss per share for the three- and six-months periods ended June 30, 2022 and the three- and nine-month periods ended September 30, 2022. Restatement In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, the Company evaluated these misstatements and, based on an analysis of quantitative and qualitative factors, determined that the impact of these misstatements was material to its reporting periods ended June 30, 2022 and September 30, 2022. Accordingly, the Company has restated its unaudited interim consolidated financial statements for the interim reporting periods as of June 30, 2022 and for the three- and six-months then ended and as of September 30, 2022 and for the three- and nine-months then ended, and has included those restated financial statements within this annual report. Immaterial Adjustments Because we are restating prior periods, we are also reflecting other immaterial adjustments related to the valuation of the contingent consideration liabilities and the in process research and development asset, which has a corresponding effect on the associated deferred tax liability and recorded goodwill. It was determined that incorrect clinical trial success rates were used in the determination of the fair value of the contingent consideration liabilities and the in process research and development asset for the interim reporting periods as of June 30, 2022 and for the three and six-months then ended and as of September 30, 2022 and for the three and nine-months then ended. See Note 14 - Restatement of Previously Reported Unaudited Interim Consolidated Financial Statements (Unaudited) for restatement of the Company's previously reported unaudited interim consolidated financial statements that were impacted by these misstatements. ​ 84 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 3. BUSINESS COMBINATION Summary 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 (which changed its name to Theriva Biologics, S.L.) is a clinical-stage biopharmaceutical company developing new oncolytic adenoviruses for the treatment of cancer. Theriva’s lead product candidate, VCN-01, is being studied in clinical trials for pancreatic cancer and retinoblastoma with additional investigator sponsored trials in indications including head and neck squamous cell carcinoma (HNSCC) and brain tumors. 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. VCN-01 is designed to replicate selectively and aggressively within tumor cells, and to degrade the tumor stroma barrier that serves as a significant physical and immunosuppressive barrier to cancer treatment. Degrading the tumor stroma has been shown to improve access to the tumor by the virus and additional therapies such as chemo- and immuno-therapies. Importantly, degrading the stroma exposes tumor antigens, turning “cold” tumors “hot” and enabling a sustained anti-tumor immune response. VCN has the exclusive rights to four patent families for proprietary technologies, as well as technologies developed in collaboration with the Virotherapy Group of the Catalan Institute of Oncology (ICO-IDIBELL) and with Hospital Sant Joan de Deu (HSJD), with a number of additional patents pending. As consideration for the purchase of the VCN Shares, the Company paid $ 4,700,000 to Grifols, 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 Company received approval from the FDA to proceed with the Phase 2 clinical trial of VCN-01 in PDAC. Due to this approval, the company paid Grifols $ 3.0 million in the fourth quarter of 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. At the Closing, VCN and Grifols entered into a sublease agreement for the sublease by VCN of laboratory and office space as well as a transitional services agreement. As a post-Closing covenant, the Company has agreed to commit to fund VCN’s research and development programs, including but not limited to VCN-01 in a pancreatic ductal adenocarcinoma PDAC Phase 2 trial, VCN-01 in a retinoblastoma (RB) Phase 2/3 trial and necessary G&A within a budgetary plan of approximately $ 27.8 million. Total purchase consideration including cash, common shares and contingent consideration was valued at approximately $ 22.8 million, as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Cash paid at Closing ​ $ 4,700 Receivable from VCN “effectively settled“ ​ ​ 417 Fair value of common shares issued ​ ​ 6,599 Fair value of contingent consideration ​ ​ 11,093 ​ ​ $ 22,809 ​ As of March 31, 2022, the fair value of the contingent consideration was approximately $ 11.1 million. During the year ended December 31, 2022 the Company recognized in operating expense a $ 2.1 million fair value adjustment increase to contingent consideration. 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. ​ 85 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 3. BUSINESS COMBINATION – (continued) The allocation of the fair value of the VCN acquisition updated for measurement period and other adjustments is shown in the table below. ​ ​ ​ ​ ​ ​ ​ Estimated fair value ​ ​ ($in thousands) Cash and cash equivalents $ 837 Receivables ​ 1,889 Property and equipment ​ 216 In-process research and development intangible asset ​ 19,742 Goodwill ​ 5,696 Deferred tax assets (liabilities), net ​ ( 3,209 ) Accounts payable ​ ( 522 ) Accrued expenses ​ ( 113 ) Accrued employee benefits ​ ( 90 ) Loan Payable-current ​ ( 67 ) Other long-term liabilities ​ ( 1,570 ) ​ ​ ​ ​ Total purchase consideration ​ $ 22,809 ​ The net assets were recorded at their estimated fair value. In valuing acquired assets and liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates. In connection with the acquisition, we recognized $ 19.7 million of indefinite-lived in-process research and development intangible assets. Goodwill is considered an indefinite-lived asset and relates primarily to intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. Goodwill of $ 5.7 million was established as a result of the Acquisition and is not tax deductible. Theriva Biologics S.L. operations recorded a net loss of $ 5.8 million from the date of acquisition through December 31, 2022. During the year ended December 31, 2022 the Company recognized the following measurement period adjustments: ● estimate of acquired liabilities resulting in a $ 277,000 reduction in accrued expenses and goodwill, ● estimate in the receivable from the prior owner resulting in a $ 176,000 increase in other receivables and reduction in goodwill. ● 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 year ended December 31, 2022 was a reduction in accrued liabilities of $ 277,000 , and increase in other receivables or $ 176,000 , 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 $ 1,061,000 . Because we are restating prior periods, we are also reflecting other immaterial adjustments related to the valuation of the contingent consideration liabilities and the in process research and development asset. See Note 14 - Restatement of Previously Reported Unaudited Interim Consolidated Financial Statements (Unaudited) for restatement of the Company’s previously reported unaudited interim consolidated financial statements that were impacted by these misstatements. 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): 86 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 3. BUSINESS COMBINATION – (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 (in thousands) 2022 2021 Net revenues — $ — Net loss ( 20,546 ) ​ $ ( 27,025 ) ​ Transaction Costs In conjunction with the Acquisition, the Company incurred approximately $ 1.2 million and $ 0.2 million in 2021 and 2022, respectively, in transaction costs, which were expensed as general, and administrative expense in the consolidated statements of operations. ​ 4. Goodwill and Intangibles The following table provides the Company’s Goodwill as of December 31, 2022. ​ ​ ​ ​ ​ ​ Goodwill (in thousands) Balance at December 31, 2021 ​ $ — Goodwill from Acquisition of VCN ​ 6,757 Goodwill impairment loss ​ — Measurement Period Adjustments ​ ( 1,061 ) Effects of exchange rates ​ ( 171 ) Balance at December 31, 2022 ​ $ 5,525 ​ The following table provides the Company’s in-process R&D as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ In-process ​ R&D (in thousands) Balance at December 31, 2021 ​ $ — Acquired IPR&D ​ 18,932 Measurement Period Adjustments ​ 810 Effects of exchange rates ​ ( 592 ) Balance at December 31, 2022 ​ $ 19,150 ​ During the quarter ending September 30, 2022 and the quarter ended December 31, 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 trigger event for impairment. The Company performed an impairment analysis and concluded that the Goodwill and IPR&D was not impaired as of September 30, 2022 and December 31,2022. ​ 87 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 5. Selected Balance Sheet Information PREPAID EXPENSES AND OTHER CURRENT ASSETS (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Prepaid clinical research organizations ​ $ 2,293 ​ $ 458 Prepaid manufacturing expenses ​ ​ 418 ​ ​ — Prepaid insurance ​ ​ 637 ​ ​ 803 Receivable from prior owner ​ ​ 144 ​ ​ — Prepaid consulting, subscriptions and other expenses ​ 155 ​ 272 VAT receivable ​ 87 ​ — ​ ​ ​ ​ ​ ​ ​ Total ​ $ 3,734 ​ $ 1,533 ​ Prepaid CRO 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. PROPERTY AND EQUIPMENT (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Computers and office equipment ​ $ 897 ​ $ 827 Other Property, Plant and Equipment ​ ​ 208 ​ ​ — Leasehold improvements ​ 94 ​ 94 Software ​ 11 ​ 11 ​ ​ 1,210 ​ 932 Less: accumulated depreciation and amortization ​ ( 865 ) ​ ( 831 ) ​ ​ ​ Total ​ $ 345 ​ $ 101 ​ During the years ended December 31, 2022 and 2021 the Company recognized depreciation exprense of $ 85,000 and 87,000 respectively. ​ ACCRUED EXPENSES (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Accrued clinical consulting services ​ $ 807 ​ $ 696 Accrued vendor payments ​ ​ 492 ​ ​ 1,028 Accrued manufacturing costs ​ ​ 197 ​ ​ 204 ​ ​ ​ Total ​ $ 1,496 ​ $ 1,928 ​ ACCRUED EMPLOYEE BENEFITS (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Accrued bonus expense ​ $ 1,216 ​ $ 886 Accrued vacation expense ​ 100 ​ 92 Accrued compensation expense ​ ​ 87 ​ ​ — ​ ​ ​ ​ Total ​ $ 1,403 ​ $ 978 ​ ​ 88 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 6. Stock-Based Compensation and Warrants Stock Incentive Plan On March 20, 2007, the Company’s Board of Directors approved the 2007 Stock Incentive Plan (the “2007 Stock Plan”) for the issuance of up to 7,143 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. This plan was approved by the stockholders on November 2, 2007. 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 December 31, 2022, there were 515 options issued and outstanding under the 2007 Stock Plan. On November 2, 2010, the Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (“2010 Stock Plan”) for the issuance of up to 8,572 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. From time to time the number of shares authorized for options was increased such that 400,000 were authorized as of September 5, 2019. The exercise price of stock options under the 2010 Stock Plan is determined by the compensation committee of the Board of Directors and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant and expire between five and ten years after the grant date. As of December 31, 2022, there were 202,381 options issued and outstanding under the 2010 Stock Plan. There are no shares available to be issued under this 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. The number of shares authorized for options was increased such that 7,000,000 were authorized as of December 31, 2022. As of December 31, 2022, there were 2,093,002 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. Stock forfeitures are recognized as incurred. The fair value of the stock-based payment is recognized over the stated vesting period. The Company has applied fair value accounting for all stock-based payment awards since inception. The fair value of each option or warrant granted is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used for the years ended December 31, 2022 and 2021 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 Exercise price ​ $ 0.58 - 2.61 ​ $ 0.33 ​ Expected dividends ​ 0 % ​ 0 % Expected volatility ​ 95 % ​ 92 % Risk free interest rate ​ 2.65 - 3.77 % ​ 1.12 % Expected life of option (years) ​ 4.3 ​ ​ 4.3 ​ ​ Expected dividends — The Company has never declared or paid dividends on its common stock and has no plans to do so in the foreseeable future. Expected volatility —Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The expected volatility assumption is derived from the historical volatility of the Company’s common stock over a period approximately equal to the expected term. 89 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 6. Stock-Based Compensation and Warrants – (continued) Risk-free interest rate —The assumed risk-free rate used is a zero coupon U.S. Treasury security with a maturity that approximates the expected term of the option. Expected life of the option —The period of time that the options granted are expected to remain unexercised. Options granted during the year have a maximum term of seven years. 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. The Company records stock-based compensation based upon the stated vesting provisions in the related agreements. The vesting provisions for these agreements have various terms as follows: ● immediate vesting, ● in full on one-year anniversary date of grant date, ● half vesting immediately and remaining over three years, ● quarterly over three years, ● annually over three years, ● one-third immediate vesting and remaining annually over two years, ● one-half immediate vesting and remaining over nine months, ● one-quarter immediate vesting and remaining over three years, ● one-quarter immediate vesting and remaining over 33 months, ● monthly over one year, and ● monthly over three years. During the years ended December 31, 2022 and 2021, the Company granted 1,728,000 and 2,260,000 options to employees and directors having an approximate fair value of $ 0.7 million and $ 0.5 million based upon the Black-Scholes option pricing model, respectively. Stock-based compensation expense included in general and administrative expenses and research and development expenses relating to stock options issued to employees for the years ended December 31, 2022 and 2021 was $ 260,000 and $ 204,000 , respectively. Stock-based compensation expense included in general and administrative expenses and research and development expenses relating to stock options issued to consultants for the years ended December 31, 2022 and 2021 was $ 215,000 and $ 212,000 , respectively. 90 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 6. Stock-Based Compensation and Warrants (continued) A summary of stock option activity for the years ended December 31, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Weighted Average Aggregate ​ ​ ​ ​ Average Exercise ​ Remaining ​ Intrinsic ​ ​ Options ​ Price ​ Contractual Life ​ Value Balance - December 31, 2020 399,779 ​ $ 23.50 6.09 years ​ $ — ​ ​ ​ Granted 226,000 ​ ​ 3.30 ​ Exercised — ​ ​ — ​ ​ ​ Expired ( 214 ) ​ ​ 431.50 ​ Forfeited — ​ ​ — ​ Balance - December 31, 2021 625,565 ​ ​ 16.12 5.58 years ​ ​ — ​ ​ ​ Granted 1,728,000 ​ ​ 0.58 ​ Exercised — ​ ​ — ​ ​ ​ Expired ( 43,126 ) ​ ​ 67.81 ​ Forfeited ( 14,541 ) ​ ​ 3.61 ​ ​ ​ ​ Balance -December 31, 2022 - outstanding 2,295,898 ​ $ 3.53 6.44 years ​ $ — ​ ​ ​ ​ Balance - December 31, 2022 - exercisable 429,736 ​ $ 15.40 4.57 years ​ $ — ​ ​ ​ Grant date fair value of options granted - December 31, 2022 ​ $ 706,264 ​ ​ ​ ​ Weighted average grant date fair value - December 31, 2022 ​ $ 0.41 ​ ​ ​ ​ ​ Grant date fair value of options granted - December 31, 2021 ​ $ 50,100 ​ ​ ​ ​ Weighted average grant date fair value - December 31, 2021 ​ $ 2.20 ​ ​ The options outstanding and exercisable at December 31, 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding ​ Options Exercisable ​ ​ ​ ​ ​ Weighted ​ ​ ​ Weighted ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ Average ​ Remaining Range of ​ ​ ​ Exercise ​ Contractual ​ ​ ​ Exercise ​ Contractual Exercise Price ​ Options ​ Price ​ Life ​ Options ​ Price ​ Life $ 0.00 – $ 350.00 2,291,596 ​ $ 2.173 6 years 425,434 ​ $ 8.19 5 years ​ 351.00 – $ 700.00 843 ​ 467.73 1 years 843 ​ 467.73 1 years ​ 701.00 – $ 1000.00 3,459 ​ ​ 792.33 2 years 3,459 ​ ​ 792.33 2 years ​ As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $ 997,000 , which is expected to be expensed through April 2025. The FASB’s guidance for stock-based payments requires cash flows from excess tax benefits to be classified as a part of cash flows from operating activities. 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 in 2022 or 2021. Cash received from option exercises under the Company’s stock-based compensation plans for the years ended December 31, 2022 and 2021 was zero . 91 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ 7. Stock Warrants On October 15, 2018, the Company closed its underwritten public offering pursuant to which it received gross proceeds of approximately $ 18.6 million before deducting underwriting discounts, commissions and other offering expenses payable by the Company and sold (i)Class A Units (the “Class A Units”), consisting of an aggregate of 252,000 shares of the Common Stock, and five-year warrant to purchase an aggregate of 252,000 shares of Common Stock at an exercise price of $ 13.80 per share, which subsequently was reduced to $ 6.90 per share (each a “Warrant” and collectively, the “Warrants”) and (ii) Class B Units (the “Class B Units”, and together with the Class A Units, the “Units”), consisting of an aggregate of 15,723 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”), with a stated value of $ 1,000 and convertible into shares of Common Stock at the stated value divided by a conversion price of $ 11.50 per share, with all shares of Series B Preferred Stock convertible into an aggregate of 1,367,218 shares of Common Stock, and issued with a warrant to purchase an aggregate of 1,367,218 shares of Common Stock. On November 16, 2020, the exercise price of the Warrants was reduced from $ 13.80 per Warrant per full share of the Company’s common stock, $ 0.001 par value per share (the “Common Stock”), to $ 6.90 per Warrant per full share of Common Stock in accordance with the antidilution terms of the Warrant. The reduction was the result of the issuance of shares of Common Stock by the Company through its “at the market offering” facility. 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 $ 0.9 million during the year ended December 31, 2020, which reduces the income available to common stockholders. In addition, pursuant to the underwriting agreement that the Company had entered into with A.G.P./Alliance Global Partners (the “Underwriters”), as representative of the underwriters, the Company granted the Underwriters a 45 day option (the “Over-allotment Option”) to purchase up to an additional 242,883 shares of Common Stock and/or additional Warrants to purchase an additional 242,883 shares of Common Stock. The Underwriters partially exercised the Over-allotment Option by electing to purchase from the Company additional Warrants to purchase 180,783 shares of Common Stock. 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 Warrants may only be exercised through a cashless exercise. No fractional shares of Common Stock will be issued in connection with the exercise of a Warrant. 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 Company has concluded that the Warrants are required to be equity classified. The Warrants were valued on the date of grant using Monte Carlo simulations. 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 year ended December 31, 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 year ended December 31, 2022, which reduces the income available to common stockholders. ​ 92 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 7. Stock Warrants – (continued) A summary of all warrant activity for the Company for the years ended December 31, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ Number of Weighted Average ​ ​ Warrants ​ Exercise Price Balance at December 31,2020 1,800,072 ​ $ 1.24 Granted — ​ — Exercised ( 1,165,575 ) ​ 1.24 Forfeited — ​ — Balance at December 31,2021 634,497 ​ 1.24 Granted — ​ — Exercised — ​ — Forfeited ( 71 ) ​ 182 Balance at December 31,2022 634,426 ​ $ 1.22 ​ A summary of all outstanding and exercisable warrants as of December 31, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ Warrants ​ Warrants ​ Remaining Exercise Price ​ Outstanding ​ Exercisable ​ Contractual Life $ 1.22 634,426 634,426 0.78 years ​ ​ 8. Stockholders’ Equity 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 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. ​ 93 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Stockholders’ Equity (continued) 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. Series B Preferred Stock On October 15, 2018, the Company closed its underwritten public offering pursuant to which it received gross proceeds of approximately $ 18.6 million before deducting underwriting discounts, commissions and other offering expenses payable by the Company and sold (i) Class A Units (the “Class A Units”) consisting of an aggregate of 252,000 shares of the Common Stock, and five-year warrant to purchase an aggregate of 252,000 shares of Common Stock at an exercise price of $ 13.80 per share, which subsequently was reduced to $ 1.22 per share (each a “Warrant” and collectively, the “Warrants”), and (ii) Class B Units (the “Class B Units”, and together with the Class A Units, the “Units”), consisting of an aggregate of 15,723 share of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”), with a stated value of $ 1,000 and convertible into shares of Common Stock at the stated value divided by a conversion price of $ 11.50 per share, with all shares of Series B Preferred Stock convertible into an aggregate of 1,367,218 shares of Common Stock, and issued with a warrant to purchase an aggregate of shares of Common Stock.. Since the above units are equity instruments, the proceeds were allocated on a relative fair value basis which created the Series B Preferred Stock discount. In addition, pursuant to the Underwriting Agreement that the Company entered into with the Underwriters on October 10, 2018, the Company granted the Underwriters a 45 day option (the “Over-allotment Option”) to purchase up to an additional 242,883 shares of Common Stock and/or additional warrants to purchase an additional 242,883 shares of Common Stock. Each Warrant is exercisable for one share of common stock. The Underwriters partially exercised the Over-allotment Option by electing to purchase from the Company additional Warrants to purchase 180,783 shares of Common Stock. The conversion price of the Series B Preferred Stock and exercise price of the October 2018 Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations, or similar events affecting the Common Stock. The exercise price of the Warrants is subject to adjustment in the event of certain dilutive issuances. ​ 94 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Stockholders’ Equity (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. The reduction was the result of the issuance of shares of Common Stock by the Company through its “at the market offering” facility. 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. 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 year ended December 31, 2022, which reduces the income available to common stockholders. 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. Because the Series B Preferred Stock has no stated maturity or redemption date and is immediately convertible at the option of the holder, the discount created by the BCF is immediately charged to accumulated deficit as a “deemed dividend” and impacts earnings per share. 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 year ended December 31, 2022 there were no shares remaining outstanding as all shares were converted in 2021 and 2020. Stock Repurchase On December 22, 2022, The Company repurchased an aggregate of 720,000 shares of its common stock, par value $ 0.001 from three founders of its subsidiary Theriva Biologics S.L. (formerly known as VCN Biosciences S.L.) in a privately negotiated transaction pursuant to the terms of a Share Repurchase Agreement entered into on December 20, 2022 with each of the Selling Stockholders. The price per share was $ 0.4001 , which was the closing price of the Common Stock on the day prior to the closing for an aggregate purchase price was $ 288,072 . The closing was subject to fulfillment of certain conditions, including delivery of certain closing documents. The Share Repurchase Agreement contains customary representations, warranties and covenants of the parties. The repurchase was funded from the Company’s cash on hand and the shares to be repurchased will be held as treasury stock. The Selling Stockholders acquired the shares of the Company’s Common Stock as consideration for the sale of their shares of the subsidiary to the Company in March 2022. Series A Preferred Stock On September 11, 2017, the Company entered into a share purchase agreement (the “Purchase Agreement”) with an investor (the “Investor”), pursuant to which the Company offered and sold in a private placement 12,000 shares of its Series A Convertible Preferred Stock, par value $ 0.001 per share (the “Series A Preferred Stock”) for an aggregate purchase price of $ 12 million, or $ 10 per share. The Series A Preferred Stock ranks senior to the shares of the Company’s common stock, and any other class or series of stock issued by the Company with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Holders of Series A Preferred Stock are entitled to a cumulative dividend at the rate of 2.0 % per annum, payable quarterly in arrears, as set forth in the Certificate of Designation of Series A Preferred Stock classifying the Series A Preferred Stock. The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock at an initial conversion price of $ 5.40 per share which was increased to $ 189.0 after taking into account the 2018 reverse stock split, subject to certain customary anti-dilution adjustments and was decreased to $ 15.0 on January 27, 2021, see below. Any conversion of Series A Preferred Stock may be settled by the Company in shares of common stock only. 95 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Stockholders’ Equity – (continued) The holder’s ability to convert the Series A Preferred Stock into common stock is subject to (i) a 19.99% blocker provision to comply with NYSE American Listing Rules, (ii) if so elected by the Investor, a 4.99% blocker provision that will prohibit beneficial ownership of more than 4.99% of the outstanding shares of the Company’s common stock or voting power at any time, and (iii) applicable regulatory restrictions. 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”). 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"). 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. Upon certain change of control events involving the Company, prior to the filing of the amendment to the Certificate of Designation for the Series A Preferred Stock described below, the Company will be required to repurchase all of the Series A Preferred Stock at a redemption price equal to the greater of (i) the Accreted Value and (ii) the amount that would be payable upon a change of control (as defined in the Certificate of Designation) in respect of common stock issuable upon conversion of such share of Series A Preferred Stock if all outstanding shares of Series A Preferred Stock were converted into common stock immediately prior to the change of control. On or at any time after (i) the VWAP (as defined in the Certificate of Designation) for at least20 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. 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. Since the effective conversion price of the Series A Preferred Stock is less than the fair value of the underlying common stock at the date of issuance, there is BCF at the issuance date. Because the Series A Preferred Stock has no stated maturity or redemption date and is immediately convertible at the option of the holder, the discount created by the BCF is immediately charged to accumulated deficit as a “deemed dividend” and impacts earnings per share. During the year ended December 31, 2017, the Company recorded a discount of $ 6.9 million. Because the Series A Preferred Stock is not currently redeemable, the discount arising from issuance costs was allocated to temporary equity and will not be accreted until such time that redemption becomes probable. The stated dividend rate of 2 % per annum is cumulative and the Company accrues the dividend on a quarterly basis (in effect accreting the dividend regardless of declaration because the dividend is cumulative). During the years ended December 31, 2021 and 2020, the Company accrued dividends of $ 24,000 and $ 254,000 , respectively. ​ 96 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Stockholders’ Equity – (continued) On January 27, 2021, the Company filed an amendment to the Certificate of Designation for the Series A Preferred Stock to (i) lower the stated Conversion Price through September 30, 2021 and (ii) remove their change in control put, as an inducement for the holder to fully convert its Series A Preferred Stock. The Amendment to the Certificate of Designation for its Series A Convertible Preferred Stock (the “Certificate of Amendment”) with the Secretary of State of the State of Nevada adjusted the conversion price from $ 189 per share to $ 15 per share and removed the redemption upon change of control. The Company received notice from the holder of the Series A Preferred Stock that it was increasing the Maximum Percentage as defined in the “Certificate of Designation” from 4.99 % to 9.99 %, such increase to be effective 61 days from the date hereof. During the three months ended March 31, 2021, all outstanding shares of Series A Convertible Preferred Stock were converted to approximately 0.9 million shares of the Company's common stock. There are no remaining shares of the Series A Convertible Preferred stock outstanding after these conversions. During January and February 2021, the Company issued 899,677 shares of its common stock upon the conversion effected on such date by the holder of 12,000 shares of its Series A Convertible Preferred Stock. The fair value of the consideration issued to the holder to induce conversion is accounted for as a deemed dividend and increased net loss available to common shareholders for purposes of calculating loss per share. 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. B. Riley Securities Sales Agreement On August 5, 2016, the Company entered into the B. Riley FBR Sales Agreement with FBR Capital Markets & Co. (now known as B. Riley Securities), which enables the Company to offer and sell shares of the common stock from time to time through B. Riley Securities, Inc. as the Company’s sales agent. Sales of common stock under the B. Riley Securities Sales Agreement are made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act. B. Riley Securities, Inc. is entitled to receive a commission rate of up to 3.0 % of gross sales in connection with the sale of the common stock sold on the Company’s behalf. On February 9, 2021, the Company entered into an amended and restated sales agreement with B. Riley Securities, Inc. (“B. Riley”) and A.G.P./Alliance Global Partners (“AGP”) in order to include AGP as an additional sales agent for the Company’s “at the market offering” program (the “Amended and Restated Sales Agreement”). During the year ended December 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 year ended December 31, 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. ​ 97 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 9. Indebtedness 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 $ 99,000 relating to the RETOS 2015 loan, which is reflected as a non-current asset on the balance sheet. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2022 ​ ​ Current ​ Non-current ​ ​ ​ ​ ​ ​ ​ NEBT Loan $ 13 $ 31 RETOS 2015 Loan ​ 44 ​ 190 ​ ​ $ 57 ​ $ 221 ​ A maturity analysis of the debt as of December 31, 2022 is as follows (amounts in thousands of dollars) : ​ ​ ​ ​ 2023 $ 57 2024 ​ 61 2025 ​ 63 2026 ​ 52 2027 ​ 32 2028 ​ 13 Total ​ $ 278 ​ ​ 10. Non-controlling Interest and Related Party On September 5, 2018, the Company entered into an agreement (the ‘Stock Purchase Agreement”) with Cedars-Sinai Medical Center (CSMC) for an investigator-sponsored Phase 2b clinical study of SYN-010 to be co-funded by the Company and CSMC (the “Study”). The Study will provide further evaluation of the efficacy and safety of SYN-010, the Company’s modified-release reformulation of lovastatin lactone, which is exclusively licensed to the Company by CSMC. SYN-010 is designed to reduce methane production by certain microorganisms ( M. smithii ) in the gut to treat an underlying cause of irritable bowel syndrome with constipation (IBS-C). In consideration of the support provided by CSMC for the Study, the Company paid $ 328,000 to support the Study and the Company entered into a Stock Purchase Agreement with CSMC pursuant to which the Company, upon the approval of the Study protocol by the Institutional Review Board (“IRB”) : (i) issued to CSMC 50,000 shares of common stock of the Company; and (ii) transferred to CSMC an additional 2,420,000 shares of common stock of its subsidiary SYN Biomics, Inc. (“SYN Biomics”) owned by the Company, such that after such issuance CSMC owned an aggregate of 7,480,000 shares of common stock of SYN Biomics, representing 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 are based overall on the fair value of the shares ($ 285,000 ) as determined at the date of IRB approval. During the year ended December 31, 2022, there was no research and development expense recorded related to this transaction. During the year ended December 31, 2021, $ 1,000 of research and development expense was recorded. The Stock Purchase Agreement also provides 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 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. 98 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 10. Non-controlling Interest and Related Party (continued) On September 30, 2020, CSMC Medically Associated Science and Technology Program (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. Although it was concluded that SYN-010 was well tolerated, SYN-010 was unlikely to meet its primary endpoint by the time enrollment is completed. On November 9, 2020, the Company and its subsidiary, Synthetic Biomics, Inc. and CSMC mutually agreed to terminate the exclusive license agreement dated December 5, 2013 and all amendments thereto and the clinical trial agreement relating to SYN-010. The determination to terminate the SYN-010 license agreement was agreed to following the completion of a planned interim futility analysis of the Phase 2b investigator-sponsored clinical trial of SYN-010. On September 30, 2020, CSMC (the Company’s SYN-010 clinical development partner) informed the Company that it discontinued the ongoing Phase 2b investigator-sponsored clinical study of SYN-010 IBS-C patients. During 2021, CSMC returned its shares of SYN Biomics to the Company. The Company’s interest in SYN Biomics is now 100 %. This is reflected in the Consolidated Statements of Equity (Deficit). The Company’s non-controlling interest is accounted for under ASC 810, Consolidation and represents the minority stockholder’s ownership interest related to the Company’s subsidiary, SYN Biomics. 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. During 2021, the minority shareholders returned all remaining shares of SYN Biomics to the Company for no consideration. ​ 11. License, Collaborative and Employment Agreements and Commitments License and Collaborative Agreements As described below, the Company has entered into several license and collaborative agreements for the right to use research, technology and patents. Some of these license and collaborative agreements may contain milestones. The specific timing of such milestones cannot be predicted and is dependent on future developments as well as regulatory actions which cannot be predicted with certainty (including actions which may never occur). Further, under the terms of certain licensing agreements, the Company may have the obligation to pay certain milestones contingent upon the achievement of specific levels of sales. Due to the long-range nature of such commercial milestone amounts, they are neither probable at this time nor predictable and consequently are not included in this disclosure. Washington University School of Medicine in St. Louis Clinical Trial Agreement In August 7, 2019, the Company entered into a clinical trial agreement (“CTA”) with Washington University School of Medicine in St. Louis (“Washington University”) to conduct a Phase 1b/2a single-center, randomized, double-blinded, placebo-controlled clinical trial designed to evaluate the safety, tolerability and pharmacokinetics of oral SYN-004 (ribaxamase) in up to 36 adult allogeneic hematopoietic cell transplant (HCT) recipients (the “Study”). Under the terms of the CTA, the Company will serve as the sponsor of the Study and supply SYN-004 (ribaxamase), as well as compensate Washington University for all research services to be provided in connection with the Study which is estimated to cost approximately $ 3,200,000 . ​ 99 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 11. License, Collaborative and Employment Agreements and Commitments (continued) The CTA continues in effect until completion of all obligations under the CTA. Either party may terminate the CTA prior to completion of its obligations (i) if authorization of the study is withdrawn by the FDA; (ii) if the emergence of any adverse reaction or side effect with SYN-004 (ribaxamase) administered in the Study is of such magnitude or incidence in the opinion of either party to support termination; or (iii) upon a breach of the terms of the CTA if the breaching party fails to cure the breach within 30 days after receipt of notice. The Company has the right to terminate the CTA (i) effective immediately if Washington University fails to perform the study in accordance with the terms of the protocol, the CTA or applicable laws or regulations or if Washington University or the principal investigator become debarred or (ii) upon 14 days written notice and Washington University has the right to terminate the CTA upon 14 days notice if the principal investigator becomes unable to perform or complete the Study and the parties have not, prior to the expiration of such fourteen (14) day period, agreed to an alternative principal investigator. University of Texas Austin Agreement On December 19, 2012, the Company entered into a License Agreement with University of Texas Austin (“UT”) for the exclusive license of the right to use, develop, manufacture, market and commercialize certain research and patents related to pertussis antibodies. The License Agreement provides that UT Austin is entitled to payment of past patent expenses, an annual payment of $ 50,000 per year commencing on the effective date through December 31, 2014, a $ 25,000 payment on December 31, 2015 and milestone payments of $ 50,000 upon commencement of Phase 1 clinical trials, $ 100,000 upon commencement of Phase 3 clinical trials, $ 250,000 upon NDA submission in the U.S., $ 100,000 upon European Medicines Agency approval and $ 100,000 upon regulatory approval in an Asian country. In addition, UT Austin is entitled to a running royalty upon net sales. The License Agreement terminates upon the expiration of the patent rights; provided, however that the License Agreement is subject to early termination by the Company in its discretion and by UT Austin for a breach of the License Agreement by the Company. In connection with the License Agreement, the Company and UT Austin also entered into a Sponsored Research Agreement pursuant to which UT Austin will perform certain research work related to pertussis. The Sponsored Research Agreement may be renewed annually, in the sole discretion of the Company, after the first year for two additional one year terms with a fixed fee for the first year of $ 303,287 . The Sponsored Research Agreement was renewed for the second and third years for a fixed fee of $ 316,438 and $ 328,758 respectively, all payable in quarterly installments. The Sponsored Research Agreement expired January 17, 2023; provided, however, the Sponsored Research Agreement is subject to early termination upon the written agreement of the parties, a default in the material obligations under the Research Agreement which remain uncured for 60 days after receipt of notice, automatically upon the Company’s bankruptcy or insolvency and by the Company in its sole discretion at any time after the one year anniversary of the date of execution thereof upon no less than 90 days’ notice. Prev ABR LLC (“Prev”) Agreement On November 28, 2012, the Company entered into an agreement (“Prev Agreement”) to acquire the C. diff program assets of Prev, including the pre-Investigational New Drug (IND) package, Phase 1 and Phase 2 clinical data, manufacturing process data and all issued and pending U.S. and international patents. Upon execution and closing of the Prev Agreement, the Company paid Prev cash payments of $ 235,000 and issued 17,858 unregistered shares of its common stock to Prev. As set forth in the Prev Agreement, Prev may be entitled to receive additional consideration upon the achievement of certain milestones, including: (i) commencement of an IND; (ii) commencement of a Phase 1 clinical trial; (iii) commencement of a Phase 2 clinical trial; (iv) commencement of a Phase 3 clinical trial; (v) filing a Biologic License Application (BLA) in the U.S. and for territories outside of the U.S. (as defined in the Prev Agreement); and (vi) approval of a BLA in the U.S. and for territories outside the U.S. With exception of the first milestone payment, the remaining milestones are payable 50% in cash and 50% in our stock , however, at Prev’s option the entire milestone may be payable in shares of the Company’s stock. As of December 31, 2015, the first three milestones have been met, and at Prev’s option, Prev elected to receive 18,724 shares of the Company’s common stock. Currently, assets licensed under this agreement are used in the Company’s Phase 1b/2a Clinical Study in Allogeneic HCT Recipients. No milestones were achieved or such payments were made during the years ended December 31, 2022 and 2021. ​ 100 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 11. License, Collaborative and Employment Agreements and Commitments (continued) Employment Agreements On December 6, 2018, the Company entered into a three-year employment agreement with Steven A. Shallcross, (the “Employment Agreement”), to serve as the Chief Executive Officer and to continue to serve as the Chief Financial Officer of the Company. The Employment Agreement has a stated term of three years but may be terminated earlier pursuant to its terms. If Mr. Shallcross’ employment is terminated for any reason, he or his estate as the case may be, will be entitled to receive the accrued base salary, vacation pay, expense reimbursement and any other entitlements accrued by him to the extent not previously paid (the “Accrued Obligations”); provided, however, that if his employment is terminated (i) by the Company without Cause or by Mr. Shallcross for Good Reason (as each is defined in the Employment Agreement) then in addition to paying the Accrued Obligations, (a) the Company will continue to pay his then current base salary and continue to provide benefits at least equal to those that were provided at the time of termination for a period of twelve (12) months and (b) he shall have the right to exercise any vested equity awards until the earlier of six (6) months after termination or the remaining term of the awards; or (ii) by reason of his death or Disability (as defined in the Employment Agreement), then in addition to paying the Accrued Obligations, Mr. Shallcross would have the right to exercise any vested options until the earlier of six (6) months after termination or the remaining term of the awards. In such event, if Mr. Shallcross commenced employment with another employer and becomes eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits to be provided by the Company as described herein would terminate. On December 23, 2020, the Board of Directors of the Company awarded Steven A. Shallcross (i) a cash bonus equal to 62 % of his prior base salary and (ii) an option to purchase 450,000 shares of the Company’s common stock. On December 23, 2021, the Board of Directors of the Company awarded Steven A. Shallcross (i) a cash bonus equal to approximately 62.5 % of his current base salary, and (ii) an option to purchase 650,000 shares of the Company’s common stock. On December 15, 2022, the Board of Directors of the Company awarded Steven A. Shallcross: (i) a cash bonus equal to $ 385,000 , and (ii) an option to purchase 475,000 shares of the Company's common stock. In addition, on December 15, 2022, the Company entered into an Amendment to Mr. Shallcross's Employment Agreement to increase his base salary to $ 614,250 . On March 22, 2022, Synthetic Biologics, Inc. (the "Company") entered into an employment agreement with Frank Tufaro (the "Employment Agreement") to serve as the Chief Operating Officer of the Company. Pursuant to the Employment Agreement, Dr. Tufaro will receive an annual base salary of $ 375,000 and is eligible to earn an annual performance bonus of up to forty percent ( 40 )% of his annual base salary. The annual bonus will be based upon the assessment of the Company's Board of Directors (the "Board") of Dr. Tufaro's performance and the Company's attainment of targeted goals set by the Board. In addition, Dr. Tufaro will also be eligible to receive annual equity awards pursuant to the Company's incentive equity plans, such awards (including the number and type of awards), if any, will be in the sole discretion of the Board. The Employment Agreement also includes confidentiality obligations and inventions assignments by Dr. Tufaro and non-solicitation and non-competition provisions. ​ 101 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 11. License, Collaborative and Employment Agreements and Commitments (continued) The Employment Agreement has a stated term of three (3) years but may be terminated earlier pursuant to its terms. If Dr. Tufaro's employment is terminated for any reason, he or his estate as the case may be, will be entitled to receive the accrued base salary, any unpaid annual bonus earned with respect to any calendar year ending on or preceding the date of termination, vacation pay, expense reimbursement and any other entitlements accrued by him to the extent not previously paid (the "Accrued Obligations"); provided, however, that if his employment is terminated (i) by the Company without Cause or by Dr. Tufaro for Good Reason (as each is defined in the Employment Agreement) then in addition to paying the Accrued Obligations, (a) the Company will continue to pay his then current base salary and continue to provide benefits at least equal to those that were provided at the time of termination for a period of six (6) months and (b) all unvested stock options and other equity awards will immediately vest and he will be entitled to exercise any vested equity awards until the earlier of six (6) months after termination or the remaining term of the awards; or (ii) by reason of his death or Disability (as defined in the Employment Agreement), then in addition to paying the Accrued Obligations, Dr. Tufaro, or his estate as the case may be, would have the right to exercise any vested options until the earlier of six (6) months after termination or the remaining term of the awards. If Dr. Tufaro commenced employment with another employer and becomes eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits to be provided by the Company as described herein would terminate. On December 15, 2022, the Board awarded Frank Tufaro, the Company's Chief Operating Officer: (i) a cash bonus equal to approximately 23 % of his current base salary, and (ii) an option to purchase 100,000 shares of the Company's Common Stock. In addition, on December 15, 2022, the Company entered into an Amendment to Dr. Tufaro's Employment Agreement to increase his base salary to $ 393,750 . Operating Lease The Company’s existing lease as of December 31, 2022 for its U.S. location is classified as an operating lease. As of December 31, 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. The Second Amendment also has options for a Tenant Improvement Allowance and a Second Extension Term. The Second Amendment also gives the Company the right to expand their space by giving notice to the landlord before December 31, 2021. The Company did not give notice to expand the space during 2021. The Second Extension Term is offered at market rates and there is no economic incentive for the lessee, therefore the Company has determined that it is not part of the original lease term. There is an option in this Second Amendment to Lease for the Company to borrow funds for tenant improvements subject to an 8.5 % interest rate. The Company also leases research and office facilities in Barcelona Spain. The current lease is short term agreement with a 90-day termination notice provision that can be exercised by either party. On the closing date of the VCN Acquisition, a sublease was executed for the Company to lease research and office facilities at a new location in Parets del Vallès (Barcelona) from the former majority owner of VCN. 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 year ended December 31, 2022 and 2021 approximated $ 569,000 and $ 280,000 , respectively. ​ 102 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 11. License, Collaborative and Employment Agreements and Commitments (continued) A maturity analysis of our operating leases as of December 31, 2022 is as follows (amounts in thousands of dollars) : ​ ​ ​ ​ Future undiscounted cash flow for the years ending December 31, ​ 2023 ​ 327 2024 ​ ​ 337 2025 ​ ​ 347 2026 ​ ​ 357 2027 ​ 368 Total ​ ​ 1,736 ​ ​ ​ ​ Discount factor ​ ​ ( 333 ) Lease liability ​ ​ 1,403 Lease liability - current ​ ​ ( 216 ) Lease liability - long term ​ $ 1,187 ​ Consulting Fees In November 2017, the Company engaged a regulatory consultant to assist in the Company’s efforts to prepare, file and obtain FDA approval for ribaxamase. The term of the engagement is on a monthly basis, provided that either party may terminate the agreement at any time by providing the other party a six-month notice period. The Company was obligated to pay the consultant a monthly retainer in addition to success fee payments of up to an aggregate of $ 4,500,000 for attainment of certain regulatory milestones. The achievement of the milestones is not probable at this time. 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. The invasion of Ukraine by Russia and the retaliatory measures that have been taken, or could be taken in the future, by the United States, NATO, and other countries have created global security concerns that could result in a regional conflict and otherwise have a lasting impact on regional and global economies, any or all of which could disrupt our supply chain, and despite the fact that we currently do not plan any clinical trials in Eastern Europe, may adversely impact the cost and conduct of R&D, manufacturing, and international clinical trials of our product candidates. ​ 103 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 12. Income Taxes There was an income tax benefit for the year ended December 31, 2022 of $ 1.4 million. For the year ended December 31, 2021 there was no income tax expense due to the Company’s domestic net losses. The Company’s tax expense differs from the “expected” tax expense for the years ended December 31, 2022, and 2021. For 2022, the “expected” tax expense is computed by applying the Federal corporate statutory tax rate of 21 % and a net, after Federal benefit state tax rate of 6.47 % (state blended rate was 8.19 %) to loss before taxes. In addition, the tax benefit impact from foreign operations represents the impact of VCN’s statutory foreign tax rate on its operations adjusted for the difference and between US and Spanish tax rates. For 2021, the “expected” tax expense is computed by applying the Federal corporate statutory tax rate of 21 % and a net, after Federal benefit state tax rate of 6.46 % (state blended rate was 8.18 %) to loss before taxes. These results are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Computed “expected” tax-benefit - Federal $ ( 4,033 ) $ ( 3,045 ) Computed “expected” tax-benefit - State ​ ( 677 ) ​ ( 931 ) Non-deductible stock-based compensation ​ 41 ​ 32 State Tax Rate Adjustment ​ ( 1 ) ​ 932 Foreign Tax Rate Adjustment ​ ( 212 ) ​ — Forfeited NQSO Trueup ​ ​ 422 ​ ​ — Transaction Costs ​ 41 ​ ​ Fair Market Value Adjustment - Contingent Consideration ​ 439 ​ ​ Other Permanent Differences ​ 54 ​ ​ Change in valuation allowance ​ ​ 2,901 ​ ​ 3,012 ​ ​ ( 1,425 ) ​ $ — ​ 104 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 12. Income Taxes (continued) ​ Deferred Tax Assets and Liabilities ​ Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Deferred Tax Assets: ​ ​ Federal & State NOL Carryforward ​ $ 22,235 ​ $ 16,884 Accrued Compensation ​ 29 ​ 27 Stock Issued For Services ​ 1,053 ​ 1,504 Stock Issued for Acquisition of Program ​ 1,456 ​ 1,462 Stock Issued for License Agreement ​ ​ 1,362 ​ ​ 1,363 Stock Issued For Milestone Payment ​ ​ — ​ ​ 236 Amortizable License Fee ​ ​ 4 ​ ​ 4 Capitalized Research & Development costs ​ ​ 1,592 ​ ​ — ​ ​ ​ ​ ​ ​ ​ Total Gross DTA ​ 27,731 ​ 21,480 Less: Val. Allowance ​ ( 24,562 ) ​ ( 21,480 ) Total Deferred Tax Assets ​ 3,169 ​ — Deferred Tax Liabilities: ​ ​ ​ ​ ​ ​ IPR&D ​ ​ ( 4,787 ) ​ ​ ​ ​ ​ ​ ​ ​ Total Gross DTL ​ ( 4,787 ) ​ — ​ ​ ​ ​ ​ ​ ​ Net Deferred Tax Assets ​ $ ( 1,618 ) ​ $ — ​ On March 10, 2022, the Company acquired VCN, a Spanish Company in a tax-free stock acquisition. Due to this acquisition, VCN is a wholly owned subsidiary of the company. As a result of the acquisition, a deferred tax liability was established with purchase accounting related to acquired In Process Research and Development. A deferred tax asset was also established with purchase accounting related to VCN’s unlimited life net operating loss carryover. At December 31, 2022, the Company has a gross Federal net operating loss carry-forward of approximately $ 65.8 million available to offset future United States taxable income. The Company’s pre-2018 net operating losses expire on various dates through 2037 . In addition, it was determined that the utilization of gross Federal net operating losses of approximately $ 221.5 million was limited by $ 155.6 . million as a result change of control ownership changes that occurred under Section 382 of the Internal Revenue Code. State NOL’s are also limited by Section 382 of the Internal Revenue Code and were limited accordingly. In 2020, the Company completed an Internal Revenue Code Section 382 analysis of its historical net operating loss carry-forward amount. As a result, the prior year net operating loss carry-forward was limited by $ 155.6 million. The decrease in the prior year net operating loss is attributable to control ownership changes which were determined for the years 2013 and 2018 which caused the reduction in the value of the historical net operating loss carry-forward amounts. Updated section 382 analysis were performed in 2021 and 2022 to identify if any additional ownership shifts occurred in these years. It was determined that an ownership shift occurred on January 20, 2021. The result of the updated Section 382 analysis produced an IRC 382 limit due to the 2021 ownership shift. There was no ownership shift determined for 2022. All previously limited net operating losses remain available for use in future periods. The Company’s pre-2018 net operating losses expire on various dates through 2037 while the net operating loss carry-forward originating in the 2018 year and later carryforward indefinitely and are subject to additional limitations based on taxable income. 105 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 12. Income Taxes (continued) At December 31, 2022, the Company has a gross Foreign net operating loss carryforward of approximately $ 11.8 million related to its newly acquired Spanish subsidiary, VCN. The net operating loss does not expire and is available to offset future Spanish taxable income. The Company’s valuation allowance at December 31, 2022 was approximately $ 24.6 million. The net change in valuation allowance during the year ended December 31, 2022, was an increase of approximately $ 3.1 million primarily due to increases in gross federal and state deferred tax assets in 2022. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, 2022 and 2021, management has established a full valuation allowance against its net deferred tax assets in all US tax jurisdictions. The Company has not established a valuation allowance in its Spanish tax jurisdictions since it is in a net deferred tax liability position in Spain." Undistributed earnings of our foreign subsidiary, VCN, are considered to be permanently reinvested and, accordingly, no deferred U.S. income taxes have been provided thereon. Upon distribution of any earnings in the form of dividends or otherwise, those earnings would be subject to U.S. income tax. At the present time, VCN does not have any earnings and thus it is not necessary to estimate the amount of U.S. income taxes that might be payable if these earnings were repatriated. We have incurred net operating losses since inception, and we do not have any significant unrecognized tax benefits. ​ 13. Subsequent Events On the closing date of the VCN Acquisition, a sublease was executed for the Company to lease research and office facilities at a new location in Parets del Vallès (Barcelona) from the former majority owner of VCN. 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. On January 15, 2023, the company moved into the facilities and the lease commenced. ​ 106 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements 14. Restatement Of Previously Reported Unaudited Interim Consolidated Financial Statements (Unaudited) Subsequent to filing the Company’s unaudited interim consolidated financial statements for the periods ended June 30, 2022, and September 30, 2022, as reported in the Company’s Quarterly Reports on Form 10-Q filed on August 8, 2022, and November 10, 2022, respectively, the Company determined that certain of the amounts in the Company's previously reported unaudited interim consolidated financial statements and accompanying footnote disclosures contained misstatements. See Note 2 – Restatement of Previously Issued Unaudited Interim Consolidated Financial Statements for additional information. In accordance with SAB No. 99, Materiality , the Company evaluated these misstatements, and based upon an analysis of quantitative and qualitative factors, determined that the impact of these misstatements was material to its unaudited interim consolidated financial statements as of and for the three and six-months ended June 30, 2022 and as of and for the three and nine-months ended September 30, 2022, and a restatement of the previously reported unaudited interim consolidated financial statements was required. The Company has not filed, and does not intend to file, an amendment to the Company’s previously filed Quarterly Reports on Form 10-Q for the quarters ended June 30, 2022 and September 30, 2022, but instead is restating its unaudited interim financial statements in this Annual Report on Form 10-K The effects of the restatement and immaterial out of period adjustments of the previously reported Consolidated Balance Sheets are presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2022 ​ As Previously Restatement Other Immaterial ​ ​ ​ (amounts in thousands, except per share data) Reported Adjustments Adjustments ​ As Restated Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 52,266 ​ $ — ​ $ — ​ $ 52,266 Prepaid expenses and other current assets ​ 2,622 ​ — ​ — ​ 2,622 Total Current Assets ​ 54,888 ​ — ​ — ​ 54,888 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Current Assets ​ ​ ​ ​ Property and equipment, net ​ 285 ​ — ​ — ​ 285 Restricted cash ​ 96 ​ — ​ — ​ 96 Right of use asset ​ 1,292 ​ — ​ — ​ 1,292 In-process research and development ​ 20,562 ​ — ​ ( 2,722 ) ​ 17,840 Goodwill ​ 5,185 ​ — ​ 1,033 ​ 6,218 Deposits and other assets ​ 23 ​ — ​ — ​ 23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 82,331 ​ $ — ​ $ ( 1,689 ) ​ $ 80,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ Accounts payable ​ $ 1,003 ​ $ — ​ $ — ​ $ 1,003 Accrued expenses ​ 1,987 ​ — ​ — ​ 1,987 Accrued employee benefits ​ 788 ​ — ​ — ​ 788 Contingent consideration, current portion ​ 9,302 ​ — ​ ( 845 ) ​ 8,457 Loans Payable-current ​ 56 ​ — ​ — ​ 56 Operating lease liability ​ 128 ​ — ​ — ​ 128 Total Current Liabilities ​ 13,264 ​ — ​ ( 845 ) ​ 12,419 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current Liabilities ​ ​ ​ ​ Non-current contingent consideration ​ 2,374 ​ — ​ ( 179 ) ​ 2,195 Loan Payable - Long term ​ 216 ​ — ​ — ​ 216 Deferred tax liabilities, net ​ 3,505 ​ ( 532 ) ​ ( 680 ) ​ 2,293 Lease liability - Long term ​ 1,298 ​ — ​ — ​ 1,298 Total Liabilities ​ 20,657 ​ ( 532 ) ​ ( 1,704 ) ​ 18,421 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and Contingencies ​ ​ ​ ​ 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 ​ 16 ​ — ​ — ​ 16 Additional paid-in capital ​ 343,500 ​ — ​ — ​ 343,500 Accumulated other comprehensive loss ​ ( 1,317 ) ​ — ​ 56 ​ ( 1,261 ) Accumulated deficit ​ ( 280,525 ) ​ 532 ​ ( 41 ) ​ ( 280,034 ) Total Stockholders’ Equity ​ 61,674 ​ 532 ​ 15 ​ 62,221 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 82,331 ​ $ — ​ $ ( 1,689 ) ​ $ 80,642 ​ 107 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 ​ As Previously Restatement Other Immaterial ​ ​ (amounts in thousands, except per share data) ​ Reported ​ Adjustments ​ Adjustments ​ As Restated Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Assets ​ ​ ​ ​ Cash and cash equivalents ​ $ 50,490 ​ $ — ​ $ — ​ $ 50,490 Prepaid expenses and other current assets ​ 2,241 ​ — ​ — ​ 2,241 Total Current Assets ​ 52,731 ​ — ​ — ​ 52,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Current Assets ​ ​ ​ ​ Property and equipment, net ​ 262 ​ — ​ — ​ 262 Restricted cash ​ 90 ​ — ​ — ​ 90 Right of use asset ​ 1,246 ​ — ​ — ​ 1,246 In-process research and development ​ 20,089 ​ — ​ ( 2,552 ) ​ 17,537 Goodwill ​ 4,254 ​ — ​ 969 ​ 5,223 Deposits and other assets ​ 23 ​ — ​ — ​ 23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 78,695 ​ $ — ​ $ ( 1,583 ) ​ $ 77,112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ Accounts payable ​ $ 770 ​ $ — ​ $ — ​ $ 770 Accrued expenses ​ 1,411 ​ — ​ — ​ 1,411 Accrued employee benefits ​ 1,319 ​ — ​ — ​ 1,319 Contingent consideration, current portion ​ 9,483 ​ — ​ ( 869 ) ​ 8,614 Loans Payable-current ​ 52 ​ — ​ — ​ 52 Operating lease liability ​ 157 ​ — ​ — ​ 157 Total Current Liabilities ​ 13,192 ​ — ​ ( 869 ) ​ 12,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current Liabilities ​ ​ ​ ​ Non-current contingent consideration ​ 2,419 ​ — ​ ( 182 ) ​ 2,237 Loan Payable - Long term ​ 202 ​ — ​ — ​ 202 Deferred tax liabilities, net ​ 3,489 ​ ( 867 ) ​ ( 638 ) ​ 1,984 Lease liability - Long term ​ 1,244 ​ — ​ — ​ 1,244 Total Liabilities ​ 20,546 ​ ( 867 ) ​ ( 1,689 ) ​ 17,990 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and Contingencies ​ ​ ​ ​ Series C convertible preferred stock, $ 0.001 par value; 10,000,000 ; 275,000 issued and outstanding ​ 2,006 ​ — ​ — ​ 2,006 Series D convertible preferred stock, $ 0.001 par value; 10,000,000 ; 100,000 issued and outstanding ​ 728 ​ — ​ — ​ 728 Stockholders’ Equity (Deficit): ​ ​ ​ ​ Common stock, $ 0.001 par value; 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 ​ 16 ​ — ​ — ​ 16 Additional paid-in capital ​ 343,621 ​ — ​ — ​ 343,621 Accumulated other comprehensive loss ​ ( 2,844 ) ​ — ​ 119 ​ ( 2,725 ) Accumulated deficit ​ ( 285,378 ) ​ 867 ​ ( 13 ) ​ ( 284,524 ) Total Stockholders’ Equity ​ 55,415 ​ 867 ​ 106 ​ 56,388 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 78,695 ​ $ — ​ $ ( 1,583 ) ​ $ 77,112 ​ 108 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements The effect of the restatement and immaterial out of period adjustments of the previously reported Consolidated Statements of Income (Loss) is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three-months ended June 30, 2022 ​ As Previously Restatement Other Immaterial ​ ​ (amounts in thousands, except per share data) ​ Reported ​ Adjustments ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Costs and Expenses: ​ ​ ​ ​ General and administrative ​ $ 1,500 ​ $ — ​ $ 41 ​ $ 1,541 Research and development ​ 3,485 ​ — ​ — ​ 3,485 Total Operating Costs and Expenses ​ 4,985 ​ — ​ 41 ​ 5,026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ ( 4,985 ) ​ — ​ ( 41 ) ​ ( 5,026 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Expense: ​ ​ ​ ​ Exchange loss ​ ( 9 ) ​ — ​ — ​ ( 9 ) Interest income ​ 26 ​ — ​ — ​ 26 Total Other Income(Expense) ​ 17 ​ — ​ — ​ 17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss before income taxes ​ ( 4,968 ) ​ ​ ( 41 ) ​ ( 5,009 ) Income tax benefit ​ — ​ 532 ​ — ​ 532 Net Loss ​ ( 4,968 ) ​ 532 ​ ( 41 ) ​ ( 4,477 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Non-controlling Interest ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Synthetic Biologics, Inc. and Subsidiaries ​ $ ( 4,968 ) ​ $ 532 ​ $ ( 41 ) ​ $ ( 4,477 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A Preferred Stock Dividends ​ — ​ — ​ — ​ — Effect of Series A Preferred Stock price adjustment ​ — ​ — ​ — ​ — Series B Preferred Stock Dividends ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Common Stockholders ​ $ ( 4,968 ) ​ $ 532 ​ ​ ( 41 ) ​ $ ( 4,477 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Per Share - Basic and Dilutive ​ $ ( 0.31 ) ​ $ 0.03 ​ ​ — ​ $ ( 0.28 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding during the period - Basic and Dilutive ​ 15,844,061 ​ — ​ — ​ 15,844,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ( 4,968 ) ​ 532 ​ ( 41 ) ​ ( 4,477 ) Loss on foreign currency translation ​ ( 1,497 ) ​ — ​ — ​ ( 1,497 ) Total comprehensive loss ​ ( 6,465 ) ​ 532 ​ ( 41 ) ​ ( 5,974 ) Comprehensive loss attributable to non-controlling interest ​ — ​ — ​ — ​ — Comprehensive loss attributable to Synthetic Biologics, Inc. and Subsidiaries ​ ( 6,465 ) ​ 532 ​ ( 41 ) ​ ( 5,974 ) ​ 109 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six-months ended June 30, 2022 ​ As Previously Restatement Other Immaterial ​ ​ (amounts in thousands, except per share data) ​ Reported ​ Adjustments ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Costs and Expenses: ​ ​ ​ ​ General and administrative ​ $ 3,155 ​ $ — ​ $ 41 ​ $ 3,196 Research and development ​ 6,082 ​ — ​ — ​ 6,082 Total Operating Costs and Expenses ​ 9,237 ​ — ​ 41 ​ 9,278 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ ( 9,237 ) ​ — ​ ( 41 ) ​ ( 9,278 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Expense: ​ ​ ​ ​ Exchange loss ​ ( 31 ) ​ — ​ — ​ ( 31 ) Interest income ​ 27 ​ — ​ — ​ 27 Total Other Income(Expense) ​ ( 4 ) ​ — ​ — ​ ( 4 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss before income taxes ​ ( 9,241 ) ​ ​ ( 41 ) ​ ( 9,282 ) Income tax benefit ​ ​ 532 ​ — ​ 532 Net Loss ​ ( 9,241 ) ​ 532 ​ ( 41 ) ​ ( 8,750 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Non-controlling Interest ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Synthetic Biologics, Inc. and Subsidiaries ​ $ ( 9,241 ) ​ $ 532 ​ $ ( 41 ) ​ $ ( 8,750 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A Preferred Stock Dividends ​ — ​ — ​ — ​ — Effect of Series A Preferred Stock price adjustment ​ — ​ — ​ ​ ​ — Series B Preferred Stock Dividends ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Common Stockholders ​ $ ( 9,241 ) ​ $ 532 ​ $ ( 41 ) ​ $ ( 8,750 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Per Share - Basic and Dilutive ​ $ ( 0.62 ) ​ $ 0.03 ​ ​ — ​ $ ( 0.59 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding during the period - Basic and Dilutive ​ 14,837,832 ​ — ​ — ​ 14,837,832 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ( 9,241 ) ​ 532 ​ ( 41 ) ​ ( 8,750 ) Loss on foreign currency translation ​ ( 1,317 ) ​ — ​ — ​ ( 1,317 ) Total comprehensive loss ​ ( 10,558 ) ​ 532 ​ ( 41 ) ​ ( 10,067 ) Comprehensive loss attributable to non-controlling interest ​ — ​ — ​ — ​ — Comprehensive loss attributable to Synthetic Biologics, Inc. and Subsidiaries ​ ( 10,558 ) ​ 532 ​ ( 41 ) ​ ( 10,067 ) ​ ​ 110 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three-months ended September 30, 2022 ​ ​ Restatement Other Immaterial ​ ​ (amounts in thousands, except per share data) ​ As Previously Reported ​ Adjustments ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Costs and Expenses: ​ ​ ​ ​ General and administrative ​ $ 2,444 ​ $ — ​ $ ( 28 ) ​ $ 2,416 Research and development ​ 2,570 ​ — ​ — ​ 2,570 Total Operating Costs and Expenses ​ 5,014 ​ — ​ ( 28 ) ​ 4,986 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ ( 5,014 ) ​ — ​ 28 ​ ( 4,986 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Expense: ​ ​ ​ ​ Exchange loss ​ ( 9 ) ​ — ​ — ​ ( 9 ) Interest income ​ 170 ​ — ​ — ​ 170 Total Other Income(Expense) ​ 161 ​ — ​ — ​ 161 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss before income taxes ​ ( 4,853 ) ​ — ​ 28 ​ ( 4,825 ) Income tax benefit ​ ​ 335 ​ — ​ 335 Net Loss ​ ( 4,853 ) ​ 335 ​ 28 ​ ( 4,490 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Non-controlling Interest ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Synthetic Biologics, Inc. and Subsidiaries ​ $ ( 4,853 ) ​ $ 335 ​ $ 28 ​ $ ( 4,490 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of Warrant exercise price adjustment ​ ( 340 ) ​ — ​ — ​ ( 340 ) Effect of Series A Preferred Stock price adjustment ​ — ​ — ​ — ​ — Series B Preferred Stock Dividends ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Common Stockholders ​ $ ( 5,193 ) ​ $ 335 ​ $ 28 ​ $ ( 4,830 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Per Share - Basic and Dilutive ​ $ ( 0.33 ) ​ $ 0.03 ​ $ — ​ $ ( 0.30 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding during the period - Basic and Dilutive ​ 15,844,061 ​ — ​ — ​ 15,844,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ( 4,853 ) ​ 335 ​ 28 ​ ( 4,490 ) Loss on foreign currency translation ​ ( 1,527 ) ​ — ​ — ​ ( 1,527 ) Total comprehensive loss ​ ( 6,380 ) ​ 335 ​ 28 ​ ( 6,017 ) Comprehensive loss attributable to non-controlling interest ​ — ​ — ​ — ​ — Comprehensive loss attributable to Synthetic Biologics, Inc. and Subsidiaries ​ ( 6,380 ) ​ 335 ​ 28 ​ ( 6,017 ) ​ ​ 111 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine-months ended September 30, 2022 ​ As Previously Restatement Other Immaterial ​ ​ (amounts in thousands, except per share data) ​ Reported ​ Adjustments ​ Adjustments ​ As Restated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Costs and Expenses: ​ ​ ​ ​ ​ ​ ​ ​ General and administrative ​ $ 5,599 ​ $ — ​ $ 13 ​ $ 5,612 Research and development ​ 8,652 ​ — ​ — ​ 8,652 Total Operating Costs and Expenses ​ 14,251 ​ — ​ 13 ​ 14,264 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ ( 14,251 ) ​ — ​ ( 13 ) ​ ( 14,264 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Expense: ​ ​ ​ ​ Exchange loss ​ ( 40 ) ​ — ​ — ​ ( 40 ) Interest income ​ 197 ​ — ​ — ​ 197 Total Other Income(Expense) ​ 157 ​ — ​ — ​ 157 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss before income taxes ​ ( 14,094 ) ​ ​ ( 13 ) ​ ( 14,107 ) Income tax benefit ​ — ​ 867 ​ — ​ 867 Net Loss ​ ( 14,094 ) ​ 867 ​ ( 13 ) ​ ( 13,240 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Non-controlling Interest ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Synthetic Biologics, Inc. and Subsidiaries ​ $ ( 14,094 ) ​ $ 867 ​ $ ( 13 ) ​ $ ( 13,240 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of Warrant exercise price adjustment ​ ( 340 ) ​ — ​ — ​ ( 340 ) Effect of Series A Preferred Stock price adjustment ​ — ​ — ​ — ​ — Series B Preferred Stock Dividends ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable to Common Stockholders ​ $ ( 14,434 ) ​ $ 867 ​ $ ( 13 ) ​ $ ( 13,580 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Per Share - Basic and Dilutive ​ $ ( 0.95 ) ​ $ 0.08 ​ $ — ​ $ ( 0.87 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ . ​ ​ ​ Weighted average number of shares outstanding during the period - Basic and Dilutive ​ 15,176,927 ​ — ​ — ​ 15,176,927 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ( 14,094 ) ​ 867 ​ ( 13 ) ​ ( 13,240 ) Loss on foreign currency translation ​ ( 2,844 ) ​ — ​ — ​ ( 2,844 ) Total comprehensive loss ​ ( 16,938 ) ​ 867 ​ ( 13 ) ​ ( 16,084 ) Comprehensive loss attributable to non-controlling interest ​ — ​ — ​ — ​ — Comprehensive loss attributable to Synthetic Biologics, Inc. and Subsidiaries ​ ( 16,938 ) ​ 867 ​ ( 13 ) ​ ( 16,084 ) ​ 112 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements The effect of the restatement and immaterial out of period adjustments of the previously reported Consolidated Statements of Changes in Shareholders’ Equity is presented in the tables below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Previously Reported ​ ​ Common Stock $0.001 Par Value ​ Series B Preferred ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Comprehensive ​ Stockholders’ (amounts in thousands, except per share data) ​ Shares ​ Amount ​ Shares ​ Amount ​ APIC ​ Deficit ​ income ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2021 13,204,531 ​ $ 13 — ​ $ — ​ $ 336,679 ​ $ ( 271,284 ) ​ $ — ​ $ 65,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 112 ​ — ​ — ​ 112 Issuance of Common Stock for VCN Acquisition 2,639,530 ​ 3 — ​ — ​ 6,596 ​ — ​ — ​ 6,599 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ 181 ​ 181 Net loss — ​ — — ​ — ​ — ​ ( 4,273 ) ​ — ​ ( 4,273 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,387 ​ $ ( 275,557 ) ​ $ 181 ​ $ 68,027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 113 ​ — ​ — ​ 113 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ ( 1,498 ) ​ ( 1,498 ) Net loss — ​ — — ​ — ​ — ​ ( 4,968 ) ​ — ​ ( 4,968 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,500 ​ $ ( 280,525 ) ​ $ ( 1,317 ) ​ $ 61,674 Stock-based compensation — ​ — — ​ — ​ 121 ​ — ​ — ​ 121 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ ( 1,527 ) ​ ( 1,527 ) Net loss — ​ — — ​ — ​ — ​ ( 4,853 ) ​ — ​ ( 4,853 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,621 ​ $ ( 285,378 ) ​ $ ( 2,844 ) ​ $ 55,415 ​ 113 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restatement Adjustments ​ ​ Common Stock $0.001 Par Value ​ Series B Preferred ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Comprehensive ​ Stockholders’ (amounts in thousands, except per share data) ​ Shares ​ Amount ​ Shares ​ Amount ​ APIC ​ Deficit ​ income ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2021 — ​ $ — — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ — ​ — ​ — ​ — Issuance of Common Stock for VCN Acquisition — ​ — — ​ — ​ — ​ — ​ — ​ — Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ — ​ — Net loss — ​ — — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2022 — ​ $ — — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ — ​ — ​ — ​ — Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ 56 ​ 56 Net loss-other immaterial adjustments ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 41 ) ​ ​ — ​ ​ ( 41 ) Net loss — ​ — — ​ — ​ — ​ 532 ​ — ​ 532 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2022 — ​ $ — — ​ $ — ​ $ — ​ $ 491 ​ $ 56 ​ $ 547 Stock-based compensation — ​ — — ​ — ​ — ​ — ​ — ​ — Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ 63 ​ 63 Net loss-other immaterial adjustments ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 28 ​ ​ — ​ ​ 28 Net loss — ​ — — ​ — ​ — ​ 335 ​ — ​ 335 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2022 — ​ $ — — ​ $ — ​ $ — ​ $ 854 ​ $ 119 ​ $ 973 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Restated ​ ​ Common Stock $0.001 Par Value ​ Series B Preferred ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Comprehensive ​ Stockholders’ (amounts in thousands, except per share data) ​ Shares ​ Amount ​ Shares ​ Amount ​ APIC ​ Deficit ​ income ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2021 13,204,531 ​ $ 13 — ​ $ — ​ $ 336,679 ​ $ ( 271,284 ) ​ $ — ​ $ 65,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 112 ​ — ​ — ​ 112 Issuance of Common Stock for VCN Acquisition 2,639,530 ​ 3 — ​ — ​ 6,596 ​ — ​ — ​ 6,599 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ 181 ​ 181 Net loss — ​ — — ​ — ​ — ​ ( 4,273 ) ​ — ​ ( 4,273 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,387 ​ $ ( 275,557 ) ​ $ 181 ​ $ 68,027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — — ​ — ​ 113 ​ — ​ — ​ 113 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ ( 1,442 ) ​ ( 1,442 ) Net loss — ​ — — ​ — ​ — ​ ( 4,477 ) ​ — ​ ( 4,477 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,500 ​ $ ( 280,034 ) ​ $ ( 1,261 ) ​ $ 62,221 Stock-based compensation — ​ — — ​ — ​ 121 ​ — ​ — ​ 121 Translation gains (losses) — ​ — — ​ — ​ — ​ — ​ ( 1,464 ) ​ ( 1,464 ) Net loss — ​ — — ​ — ​ — ​ ( 4,490 ) ​ — ​ ( 4,490 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2022 15,844,061 ​ $ 16 — ​ $ — ​ $ 343,621 ​ $ ( 284,524 ) ​ $ ( 2,725 ) ​ $ 56,388 ​ 114 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements The effect of the restatement of the previously reported Consolidated Statements of Cash Flows is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six-months ended June 30, 2022 ​ ​ ​ Restatement ​ Other Immaterial ​ (amounts in thousands, except per share data) ​ As Previously Reported ​ Adjustments ​ Adjustments ​ As Restated Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 9,241 ) ​ $ 532 ​ $ ( 41 ) ​ $ ( 8,750 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Stock-based compensation ​ 225 ​ — ​ — ​ 225 Income tax benefit ​ — ​ ( 532 ) ​ — ​ ( 532 ) Change in fair value of contingent consideration ​ ( 483 ) ​ — ​ 41 ​ ( 442 ) Depreciation ​ 36 ​ — ​ — ​ 36 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other current assets ​ 518 ​ — ​ — ​ 518 Right of use asset ​ 90 ​ — ​ — ​ 90 Accounts payable ​ ( 295 ) ​ — ​ — ​ ( 295 ) Accrued expenses ​ 265 ​ — ​ — ​ 265 Accrued employee benefits ​ ( 272 ) ​ — ​ — ​ ( 272 ) Lease liability ​ ( 101 ) ​ — ​ — ​ ( 101 ) Net Cash Used In Operating Activities ​ ( 9,258 ) ​ — ​ — ​ ( 9,258 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities ​ ​ ​ ​ Purchase of property and equipment ​ ( 14 ) ​ — ​ — ​ ( 14 ) Cash paid for business combination, net of cash acquired ​ ( 3,863 ) ​ — ​ — ​ ( 3,863 ) Pre-acquisition loan to VCN ​ ( 417 ) ​ — ​ — ​ ( 417 ) Net Cash Used in Investing Activities ​ ( 4,294 ) ​ — ​ — ​ ( 4,294 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities ​ ​ ​ ​ Payment of VCN's CDTI loan ​ ( 1,376 ) ​ — ​ — ​ ( 1,376 ) Proceeds from "at the market" stock issuance ​ — ​ — ​ — ​ — Proceeds from issuance of common stock for warrant exercises ​ — ​ — ​ — ​ — Net Cash Provided (used in) by Financing Activities ​ ( 1,376 ) ​ — ​ — ​ ( 1,376 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effects of FX on cash ​ ( 35 ) ​ — ​ — ​ ( 35 ) Net increase (decrease) in cash and cash equivalents and restricted cash ​ ( 14,963 ) ​ — ​ — ​ ( 14,963 ) Cash and cash equivalents and restricted at the beginning of this period ​ 67,325 ​ — ​ — ​ 67,325 Cash and cash equivalents and restricted cash at the end of this period ​ $ 52,362 ​ $ — ​ $ — ​ $ 52,362 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents, and restricted cash reported in the statement of financial position ​ ​ ​ ​ Cash and cash equivalents ​ $ 52,266 ​ $ — ​ $ — ​ $ 52,266 Restricted cash included in other long-term assets ​ 96 ​ — ​ — ​ 96 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows ​ $ 52,362 ​ $ — ​ $ — ​ $ 52,362 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental non-cash investing and financing activities: ​ ​ ​ ​ Fair value of contingent consideration issued in a business combination ​ $ 12,158 ​ $ — ​ $ — ​ $ 12,158 Fair value of equity issued as consideration in a business combination ​ $ 6,599 ​ $ — ​ $ — ​ $ 6,599 Effective settlement of pre-closing VCN financing ​ $ 417 ​ $ — ​ $ — ​ $ 417 Goodwill measurement period adjustment ​ $ 277 ​ $ — ​ $ — ​ $ 277 ​ 115 Table of Contents Theriva Biologics, Inc. and Subsidiaries Notes to Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine-months ended September 30, 2022 ​ ​ ​ ​ ​ Restatement ​ Other Immaterial ​ ​ ​ (amounts in thousands, except per share data) As Previously Reported ​ Adjustments Adjustments As Restated Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 14,094 ) ​ $ 867 ​ $ ( 13 ) ​ $ ( 13,240 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Stock-based compensation ​ 346 ​ — ​ — ​ 346 Income tax benefit ​ — ​ ( 867 ) ​ — ​ ( 867 ) Change in fair value of contingent consideration ​ ( 257 ) ​ — ​ 13 ​ ( 244 ) Depreciation ​ 60 ​ — ​ — ​ 60 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other current assets ​ 780 ​ — ​ — ​ 780 Right of use asset ​ 137 ​ — ​ — ​ 137 Accounts payable ​ ( 504 ) ​ — ​ — ​ ( 504 ) Accrued expenses ​ ( 326 ) ​ — ​ — ​ ( 326 ) Accrued employee benefits ​ 271 ​ — ​ — ​ 271 Lease liability ​ ( 127 ) ​ — ​ — ​ ( 127 ) Net Cash Used In Operating Activities ​ ( 13,714 ) ​ — ​ — ​ ( 13,714 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities ​ ​ ​ ​ Purchase of property and equipment ​ ( 25 ) ​ — ​ — ​ ( 25 ) Cash paid for business combination, net of cash acquired ​ ( 3,863 ) ​ — ​ — ​ ( 3,863 ) Pre-acquisition loan to VCN ​ ( 417 ) ​ — ​ — ​ ( 417 ) Net Cash Used in Investing Activities ​ ( 4,305 ) ​ — ​ — ​ ( 4,305 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities ​ ​ ​ ​ Payment of VCN's CDTI loan ​ ( 1,376 ) ​ — ​ — ​ ( 1,376 ) Proceeds from sale of Series C Preferred Stock, net of issuance cost ​ 2,006 ​ ​ ​ 2,006 Proceeds from sale of Series D Preferred Stock, net of issuance cost ​ 728 ​ ​ ​ 728 Proceeds from "at the market" stock issuance ​ — ​ — ​ — ​ — Proceeds from issuance of common stock for warrant exercises ​ — ​ — ​ — ​ — Net Cash Provided (used in) by Financing Activities ​ 1,358 ​ — ​ — ​ 1,358 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effects of FX on cash ​ ( 84 ) ​ — ​ — ​ ( 84 ) Net increase (decrease) in cash and cash equivalents and restricted cash ​ ( 16,661 ) ​ — ​ — ​ ( 16,661 ) Cash and cash equivalents and restricted at the beginning of this period ​ 67,325 ​ — ​ — ​ 67,325 Cash and cash equivalents and restricted cash at the end of this period ​ $ 50,580 ​ $ — ​ $ — ​ $ 50,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents, and restricted cash reported in the statement of financial position ​ ​ ​ ​ Cash and cash equivalents ​ $ 50,490 ​ $ — ​ $ — ​ $ 50,490 Restricted cash included in other long-term assets ​ 90 ​ — ​ — ​ 90 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows ​ $ 50,580 ​ $ — ​ $ — ​ $ 50,580 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental non-cash investing and financing activities: ​ ​ ​ ​ ​ Fair value of contingent consideration issued in a business combination ​ $ 12,158 ​ $ — ​ $ — ​ $ 12,158 Fair value of equity issued as consideration in a business combination ​ $ 6,599 ​ $ — ​ $ — ​ $ 6,599 Effective settlement of pre-closing VCN financing ​ $ 417 ​ $ — ​ $ — ​ $ 417 Goodwill measurement period adjustment ​ $ ( 884 ) ​ $ — ​ $ — ​ $ ( 884 ) In-process R&D measurement period adjustment ​ $ 810 ​ $ — ​ $ — ​ $ 810 Deferred tax liability measurement period adjustment ​ $ 202 ​ $ — ​ $ — ​ $ 202 Effect of Warrant exercise price adjustment ​ $ 340 ​ $ — ​ $ — ​ $ 340 ​ ​ ​ ​ 116 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None.