What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2023-11-13 · 186 added, 281 removed, 395 unchanged (54% of the section changed)

4 unchanged sentences

(In thousands except share and par value amounts)

September 30, 2023

March 31, 2024

December 31, 2023

7 unchanged sentences

Restricted cash

Right of use assets

Right of use asset

In-process research and development

5 unchanged sentences

Accrued employee benefits

Contingent consideration, current portion

Deferred research and development tax credit-current portion

Loans payable-current portion

Loans payable-current

Operating lease liability-current portion

2 unchanged sentences

Non-current contingent consideration

Non-current loans payable

Deferred tax liabilities, net

Loan Payable - non-current

Non-current deferred research and development tax credit

3 unchanged sentences

Temporary Equity;

Series C convertible preferred stock, $ 0.001 par value;

10,000,000 authorized

Series C convertible preferred stock, $ 0.001 par value;

275,000 issued and outstanding

Series D convertible preferred stock, $ 0.001 par value;

10,000,000 authorized;

100,000 issued and outstanding

1 unchanged sentence

Common stock, $ 0.001 par value;

350,000,000 shares authorized, 17,762,998 issued and 17,042,765 outstanding at September 30, 2023 and 15,844,294 issued and 15,124,061 outstanding at December 31, 2022

350,000,000 shares authorized, 17,868,282 issued and 17,148,049 outstanding at March 31, 2024 and 17,868,282 issued and 17,148,049 outstanding at December 31, 2023

Additional paid-in capital

Treasury stock at cost, 720,233 shares at September 30, 2023 and at December 31, 2022

Accumulated other comprehensive loss

Treasury stock at cost, 720,233 shares at March 31, 2024 and at December 31, 2023

Accumulated other comprehensive (loss) income

Accumulated deficit

Total Stockholders’ Equity

Total Liabilities, Temporary Equity, and Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands, except share and per share amounts)

For the three months ended September 30,

For the nine months ended September 30,

For the Three Months Ended March 31,

Operating Costs and Expenses:

3 unchanged sentences

Loss from Operations

Other Expense:

Exchange gain (loss)

Other Income:

Foreign currency exchange (loss) gain

Interest income

Total Other Income (Expense)

Total Other Income

Net Loss before income taxes

Income tax benefit

Net Loss Attributable to Theriva Biologics, Inc.

and Subsidiaries

Effect of Warrant exercise price adjustment

Net Loss Attributable to Common Stockholders

Net Loss Per Share - Basic and Diluted

Weighted average number of shares outstanding during the period - Basic and Diluted

Loss on foreign currency translation

Net Loss Per Share - Basic and Dilutive

Weighted average number of shares outstanding during the period - basic and dilutive

(Loss) gain (loss) on foreign currency translation

Total comprehensive loss

2 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Stockholder’s Equity

(In thousands, except share and par value amounts)

5 unchanged sentences

Stock-based compensation

Translation gains

Foreign currency exchange gains (losses)

Balance at March 31, 2024

Stock-based compensation

Stock issued under “at-the-market” offering

Translation loss

Balance at June 30, 2023

Stock-based compensation

Stock issued under “at-the-market” offering

Translation loss

Balance at September 30, 2023

Common Stock $0.001 Par Value

1 unchanged sentence

Stockholders’

Treasury Stock

Balance at December 31, 2022

Stock-based compensation

Issuance of Common Stock for VCN Acquisition

Translation gains (losses)

Foreign currency exchange gains

Balance at March 31, 2023

Stock-based compensation

Translation gains (losses)

Balance at June 30, 2022

Stock-based compensation

Translation gains (losses)

Balance at September 30, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash Flows From Operating Activities:

4 unchanged sentences

Non-cash lease expense

Deferred research and development tax credit

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Deposits and other assets

Accounts payable

5 unchanged sentences

Purchase of property and equipment

Cash paid for business combination, net of cash acquired

Pre-acquisition loan to VCN

Net Cash Used in Investing Activities

1 unchanged sentence

Payment of loans payable

Proceeds from issuance under at-the-market offering, net of issuance costs

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

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

Net Cash Provided by Financing Activities

Net Cash used in Financing Activities

Effects of exchange rate changes on cash and cash equivalents

8 unchanged sentences

Right of use assets obtained in exchange for lease liabilities

Fair value of contingent consideration issued in a business combination

Fair value of equity issued as consideration in a business combination

Effective settlement of pre-closing VCN financing

Goodwill measurement period adjustment

In-process R&D measurement period adjustment

Deferred tax liability measurement period adjustment

Effect of Warrant exercise price adjustment

See accompanying notes to unaudited condensed consolidated financial statements.

10 unchanged sentences

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

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, the Company’s acquired subsidiary VCN Biosciences, S.L.

rebranded to Theriva Biologics, S.L.

without other changes to its corporate structure.

Basis of Presentation

5 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2023 Form 10-K.

The interim results for the nine months ended September 30, 2023 are not necessarily indicative of results for the full year.

The condensed consolidated financial statements are prepared in conformity with U.S.

2 unchanged sentences

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

As of September 30, 2023 the Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment.

As of September 30, 2023, the Company has a significant accumulated deficit, 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.

As of March 31, 2024, the Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The Company continues to incur losses and, as of March 31, 2024, the Company had an accumulated deficit of approximately $ 314.5 million.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Since inception, the Company has financed its activities principally from the proceeds from the issuance of equity securities.

The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise additional debt and equity capital.

There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to the Company.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Theriva Biologics, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

Organization, Nature of Operations and Basis of Presentation – (continued)

The Company’s cash and cash equivalents totaled $ 31.2 million as of September 30, 2023, a decrease of $ 10.6 million from December 31, 2022.

During the three and nine months ended September 30, 2023, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $ 3.3 million and $ 12.9 million, respectively.

With the Company’s cash position of $ 26.1 million in early November 2023, the Company believes it will be able to fund its operations through the fourth quarter of 2024 and into the first quarter of 2025.

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

However, the actual amount of additional capital needed by the Company will also depend upon the costs to advance its VCN-01 clinical programs and whether it continues to develop SYN-004 internally, or out-licenses or partners such development.

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

Form S-3 that currently registers the sale of the shares under the ATM Sales Agreement expires in May 2024.

The ATM Sales Agreement can be amended so that shares issued would be registered under a new universal shelf registration statement on Form S-3.

The Company anticipates filing the amendment prior to May 2024, but cannot guarantee filing such amendment.

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), its long-term business plan may not be accomplished, and it 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.

Going Concern – (continued)

The Company does not have sufficient capital to fund its operations beyond the next twelve months.

In order to address the Company’s capital needs, including its planned clinical trials, the Company is actively pursuing additional equity or debt financing in the form of either a private placement or a public offering.

The Company has been in ongoing discussions with strategic institutional investors and investment banks with respect to such possible offerings.

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

If the Company is unable to obtain additional financing in sufficient amounts or on acceptable terms under such circumstances, the Company’s operating results and prospects will be adversely affected.

At March 31, 2024, the Company had cash and cash equivalents of approximately $ 18.3 million.

Based upon the Company’s current business plans, management believes that the Company’s current cash on hand will be sufficient to fully execute its plans through December 31, 2024 and into first quarter 2025.

Commencement of planned future clinical trials is subject to the Company’s successful pursuit of opportunities that will allow it to establish the clinical infrastructure and financial resources necessary to successfully initiate and complete its plan.

The Company anticipates its current cash will allow it to cover overhead costs, manufacturing costs for clinical supply, commercial scale up costs and limited research efforts, including completing its funding requirements for its ongoing current trials for VCN-01 and the on-going testing of SYN-004 (ribaxamase).

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

Currently, the Company does not have commitments from any third parties to provide it with capital.

Potential sources of financing include strategic relationships, public or private sales of equity (including through its at the market offering sales agreement (the “ATM Sales Agreement”)) or debt and other sources.

The Company cannot assure that it will meet the requirements for use of the ATM Sales Agreement or that additional funding will be available on favorable terms, or at all.

If the Company fails to obtain additional funding for its clinical trials, whether through the sale of securities or a partner or collaborator, and otherwise when needed, it will not be able to execute its business plan as planned and will be forced to cease certain development activities (including initiation of planned clinical trials) until funding is received and its business will suffer, which would have a material adverse effect on its financial position, results of operations and cash flows.

The actual amount of funds the Company will need to operate is subject to many factors, some of which are beyond its control.

These factors include the following:

● the progress of its research activities;

● the number and scope of its research programs;

● the ability to recruit patients for clinical studies in a timely manner;

● the progress of its preclinical and clinical development activities;

● the progress of the development efforts of parties with whom the Company has entered into research and development agreements and amount of funding received from partners and collaborators;

● its ability to maintain current research and development licensing arrangements and to establish new research and development and licensing arrangements;

● the Company’s ability to achieve its milestones under licensing arrangements;

● the costs associated with manufacturing-related services to produce material for use in its clinical trials;

● the costs involved in prosecuting and enforcing patent claims and other intellectual property rights;

● the costs and timing of regulatory approvals.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Going Concern – (continued)

The Company has based its estimates of funding requirements on assumptions that may prove to be wrong.

The Company may need to obtain additional funds sooner or in greater amounts than it currently anticipates.

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

If the Company is not able to obtain financing when needed, it may be unable to carry out its business plan.

As a result, the Company may have to significantly limit its operations and its business, financial condition and results of operations would be materially harmed.

Summary of Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in the Company’s audited financial statements and the notes thereto included in the 2022 Form 10-K, except as noted below.

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 4), 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.

There have been no new or material changes to the significant accounting policies discussed in the Company’s audited financial statements and the notes thereto included in the 2023 Form 10-K.

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.

5 unchanged sentences

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

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies – (continued)

The key assumptions used to value IPR&D include estimates of future cash flows and to the discount rate applicable to the future cash flow periods.

No impairment charges were recorded during the three months ended March 31, 2024 and 2023.

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

3 unchanged sentences

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

The key assumptions used to value the reporting unit include estimates of future cash flows, the discount rate applicable and those future cash flow periods, and the implied control premium.

No impairment charges were recorded during the three months ended March 31, 2024 and 2023.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies – (continued)

Contingent Consideration

2 unchanged sentences

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 payments include milestone payments to 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.

Payments for amounts not in excess of original fair values established at acquisition date (including measurement period adjustments), and not paid within a period considered to be close to the transaction date, are reflected as financing activities in the statement of cash flows.

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.

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

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.

See Fair Value of Financial Instruments below.

Long-Lived Assets

3 unchanged sentences

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

No impairment charges were recorded during the three and nine months ended September 30, 2023 and 2022.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

No impairment charges were recorded during the three months ended March 31, 2024 and 2023.

Research and Development Tax Credits

The Company, through its Theriva S.L.

subsidiary, participates in a Research and Development program sponsored by the Spanish government.

subsidiary, participates in a Research and Development incentive program sponsored by the Spanish government.

The program provides for reimbursement of certain expenses incurred in research and development efforts the Company incurs in Spain.

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

The program provides for certain limits on the types and amounts of expenses and requires participants to complete a certification and apply for the refund annually.

Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period.

In the quarter ended June 30, 2023, the Company completed the certification and applied for direct reimbursement, as opposed to a tax credit, for its qualifying research and development expenses incurred in the year ended December 31, 2022.

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

The Company evaluated the program and concluded that it qualified to be accounted for as government assistance.

Accordingly, the Company, as allowed by U.S.

GAAP, elected to account for the grant by analogizing to the guidance provided by International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance.

Accordingly, the Company recognized a tax credit receivable related to amounts that had been approved by the Spanish government prior to September 30, 2023 and a corresponding deferred research and development tax credit as it was determined that amounts became probable of being received upon the receipt of the approval.

The Company accounts for the reimbursement as a tax credit receivable related to amounts that had been approved by the Spanish government and a corresponding deferred research and development tax credit as it was determined that amounts became probable of being received upon the receipt of the approval.

Additionally, the Company has elected to account for the tax credit as a contra-expense as this most appropriately reflects the nature of the transaction and will reduce future research and development expenditures as the Company continues to incur expenses in the upcoming 24-month period.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

BUSINESS COMBINATION

On March 10, 2022 (the “Closing”), the Company completed the acquisition of all the outstanding shares of Theriva Biologics, S.L, which at the time was known as VCN Biosciences, S.L.(the “VCN Shares”) from the shareholders of VCN.

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

The Company’s lead product candidate, VCN-01, is being studied in a Company sponsored Phase 2 clinical trial for pancreatic cancer with additional investigator sponsored trials in indications including head and neck squamous cell carcinoma (HNSCC), retinoblastoma, brain tumors and ovarian cancers.

VCN-01 is designed to be administered systemically, intratumorally or intravitreally, either as a monotherapy or in combination with standard of care chemotherapies or immunotherapies, 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 immunotherapies.

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 and pursuant to the terms of a purchase agreement that the parties entered into (the “Purchase Agreement”), the Company paid $ 4,700,000 to Grifols Innovation and New Technologies Limited (“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, $ 0.001 par value per share (the “Common Stock”).

In addition to the consideration described above, under the terms of the purchase agreement that the parties entered into, 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 metastatic pancreatic ductal adenocarcinoma (“PDAC”).

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

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

in its Phase 2 clinical trial of VCN-01 in PDAC.

As a result, the Company paid Grifols $ 3.25 million in the fourth quarter of 2023.

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 general and administrative expenses within a budgetary plan of approximately $ 27.8 million.

Total purchase consideration including cash, shares of common stock and contingent consideration was valued at approximately $ 22.8 million, as follows (in thousands):

Cash paid at Closing

Receivable from VCN “effectively settled”

Fair value of common shares issued

Fair value of contingent consideration

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

BUSINESS COMBINATION - (continued)

As of September 30, 2023 and December 31, 2022, the fair value of the contingent consideration was approximately $ 5.9 million and $ 10.2 million, respectively.

During the three and nine months ended September 30, 2023, the Company recognized in operating expense a $ 1.6 million and $ 1.0 million, respectively, decrease in the fair value of the contingent consideration.

Upon initiation of patient dosing in the U.S.

during the three months ended September 30, 2023, $ 3.25 million that had previously been included as contingent consideration, became payable to Grifols and is included in accrued expenses as of September 30, 2023.

During the three and nine months ended September 30, 2022, the Company recognized in operating expense a $ 227,000 and a $ 244,000 decrease in the fair value of the contingent consideration for the nine months ended September 30, 2022, respectively.

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

Property and equipment

In-process research and development intangible asset

Deferred tax liabilities, net

Accounts payable

Accrued expenses

Accrued employee benefits

Loans payable-current

Other long-term liabilities

Total purchase consideration

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, the Company 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.

VCN operations recorded a net loss of $ 11.9 million from the date of Acquisition through September 30, 2023.

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 during the measurement period, was a reduction in accrued liabilities of $ 277,000 , an increase in other receivables of $ 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 .

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 is 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.

Theriva Biologics, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

BUSINESS COMBINATION - (continued)

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, 2022 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Transaction Costs

In conjunction with the Acquisition, the Company incurred approximately $ 0.2 million in transaction costs during the nine months ended September 30, 2022, which were expensed as general, and administrative expense in the consolidated statements of operations.

There were no acquisition costs incurred during the three and nine months ended September 30, 2023.

Summary of Significant Accounting Policies – (continued)

In December 2023, the FASB issued final guidance in ASU No.

2023-09, Income Taxes (ASC 740):

Improvements to Income Tax Disclosures requiring entities to provide additional information in the rate reconciliation and disclosures about income taxes paid.

For public business entities, the guidance is effective for annual periods beginning after December 15, 2024.

The Company is not early adopting, and therefore, this ASU is not adopted in the current period.

The Company does not expect this ASU to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker.

Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment expense disclosures.

For public business entities, the guidance is effective for annual periods beginning after December 15, 2024.

The Company is not early adopting, and therefore has not adopted this ASU in the current period.

The Company does not expect this ASU to have a material impact on the consolidated financial statements.

Goodwill and Intangibles

The following table provides the Company’s Goodwill as of September 30, 2023.

The following table provides the Company’s Goodwill as of March 31, 2024.

Goodwill (in thousands)

1 unchanged sentence

Effects of exchange rates

Balance at September 30, 2023

The following table provides the Company’s in-process R&D as of September 30, 2023.

Balance at March 31, 2024

The following table provides the Company’s in-process R&D as of March 31, 2024.

R&D (in thousands)

1 unchanged sentence

Effects of exchange rates

Balance at September 30, 2023

During the quarters ended September 30, 2023 and 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 triggering event for impairment.

The Company performed an impairment analysis and concluded that the Goodwill and IPR&D were not impaired as of September 30, 2023 and December 31, 2022.

Balance at March 31, 2024

There were no impairment charges recorded during the three months ended March 31, 2024 and 2023.

Theriva Biologics, Inc.

16 unchanged sentences

The carrying value of the loans payable approximate fair value and are classified under level 2.

In connection with the Acquisition of VCN, the Company will be required to pay up to $ 70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings completed noted in Note 4.

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 2022.

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

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

in its Phase 2 clinical trial of VCN-01 in PDAC.

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

As a result, payment was made in the fourth quarter 2023 in the amount of $ 3.25 million.

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

The fair value of the contingent consideration was $ 5.9 million as of September 30, 2023 and is all reflected as non-current contingent consideration liability.

There were no transfers in or out of the level 3 liabilities during the three and nine months ended September 30, 2023 and 2022 , with the exception of the reclassification of $ 3.25 million related to the milestone that was met in the current period and reclassified to accrued expenses.

The following table summarizes the change in the fair value as determined by Level 3 inputs for the contingent consideration liabilities for the three and nine months ended September 30, 2023:

The fair value of the contingent consideration was $ 6.5 million as of March 31, 2024 and is all reflected as non-current contingent consideration liability.

During the three months ended March 31, 2024 and 2023, the Company recognized in operating expense a $ 202,000 and $ 135,000 , respectfully, fair value adjustment increase to contingent consideration.

There were no transfers in or out of the level 3 liabilities during the three months ended March 31, 2024 and 2023.

The following table summarizes the change in the fair value as determined by Level 3 inputs for the contingent consideration liabilities as of March 31, 2024:

(in thousands)

Balance at March 10, 2022

Change in fair value

Balance at June 30, 2022

Balance at December 31, 2022

Payment of contingent consideration

Change in fair value

Balance at September 30, 2022

Balance at December 31, 2023

Contingent consideration, current portion

Contingent consideration, net of current portion

Balance at September 30, 2022

Balance at December 31, 2023

Theriva Biologics, Inc.

6 unchanged sentences

Balance at March 31, 2024

Change in fair value

Balance at June 30, 2023

Change in fair value

Reclassification of amounts to accrued expenses due to milestone being achieved

Balance at September 30, 2023

Contingent consideration, current portion

Contingent consideration, net of current portion

Balance at September 30, 2023

Balance at March 31, 2024

The fair value of financial instruments measured on a recurring basis is as follows:

As of September 30, 2023

As of March 31, 2024

Contingent consideration

Loans payable

Total liabilities

1 unchanged sentence

Contingent consideration

Loans payable

Total liabilities

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Fair Value of Financial Instruments – (continued)

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:

As of September 30, 2023

As of March 31, 2024

Weighted Average

25 unchanged sentences

5.3 % to 48.8 %

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Research and Development Tax Credits

The Company, through its Theriva S.L.

subsidiary, participates in a Research and Development program sponsored by the Spanish government.

The program provides for reimbursement of certain expenses incurred in research and development efforts the Company incurs in Spain.

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

The program provides for certain limits on the types and amounts of expenses for which reimbursement may be sought and requires participants to complete a certification and apply for the refund annually.

Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period.

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

The Company evaluated the program and concluded that it qualified to be accounted for as government assistance.

Accordingly, the Company, as allowed by U.S.

Accordingly, the Company recognized a tax credit receivable of $ 1.8 million related to amounts that had been approved by the Spanish government and a corresponding deferred research and development tax credit current portion of $ 886,000 and a deferred research and development tax credit non-current portion of $ 664,000 , as it was determined that amounts became probable of being received upon the receipt of the approval.

During the three months ending March 31, 2024 the Company recorded $ 223,000 as a reduction in research and development expense.

Selected Balance Sheet Information

Prepaid expenses and other current assets (in thousands)

September 30,

Prepaid clinical research organizations

Prepaid manufacturing expenses

Prepaid consulting, subscriptions and other expenses

Prepaid clinical research organizations

Prepaid insurance

Prepaid consulting, subscriptions and other expenses

VAT receivable

Receivable from Grifols

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

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

Receivable from Grifols includes amounts due related to research and development tax rebates, VAT and corporate taxes.

Theriva Biologics, Inc.

3 unchanged sentences

Property and equipment, net (in thousands)

September 30,

Computers and office equipment

3 unchanged sentences

Accrued expenses (in thousands)

September 30,

Milestone due to Grifols

Accrued clinical consulting services

2 unchanged sentences

Accrued employee benefits (in thousands)

September 30,

Accrued bonus expense

6 unchanged sentences

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

As of September 30, 2023, there were 86 options issued and outstanding under the 2007 Stock Plan.

As of March 31, 2024, there were 86 options issued and outstanding under the 2007 Stock Plan.

There are no shares available to be issued under this plan.

Only options were issued under the plan.

Theriva Biologics, Inc.

6 unchanged sentences

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

As of September 30, 2023, there were 202,095 options issued and outstanding under the 2010 Stock Plan.

As of March 31, 2024, there were 198,540 options issued and outstanding under the 2010 Stock Plan.

There are no shares available to be issued under this plan.

Only options were issued under the 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 September 30, 2023.

As of September 30, 2023, there were 2,082,155 options issued and outstanding under the 2020 Stock Plan.

The number of shares authorized for options was increased such that 7,000,000 were authorized as of December 31, 2022.

As of March 31, 2024, there were 4,177,155 options issued and outstanding under the 2020 Stock Plan.

Only options have been issued under the plan.

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

3 unchanged sentences

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

There were no options granted during the three and nine months ended September 30, 2023 and 3,000 option were granted during the nine months ended September 30, 2022.

There were no options granted during the three months ended March 31, 2024 and 2023.

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.

13 unchanged sentences

● annually over three years,

● one-third immediate vesting and the remaining annually over two years,

Theriva Biologics, Inc.

2 unchanged sentences

Stock-Based Compensation – (continued)

● one-third immediate vesting and the remaining annually over two years,

● one-half immediate vesting and the remaining over nine months,

3 unchanged sentences

● monthly over three years.

A summary of stock option activity for the nine months ended September 30, 2023 and the year ended December 31, 2022 is as follows:

A summary of stock option activity for the three months ended March 31, 2024 and the year ended December 31, 2023 is as follows:

Weighted Average

3 unchanged sentences

Balance - December 31, 2023

Balance - September 30, 2023 - outstanding

Balance - September 30, 2023 - exercisable

Balance - March 31, 2024 - outstanding

Balance - March 31, 2024 - exercisable

Grant date fair value of options granted – year ended December 31, 2023

4 unchanged sentences

Stock-Based Compensation – (continued)

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to employees for the three and nine months ended September 30, 2023 was $ 61,000 and $ 187,000 , respectively, and $ 46,000 and $ 124,000 for the three and nine months ended September 30, 2022.

Stock-based compensation expense included in research and development expenses relating to stock options issued to employees for the three and nine months ended September 30, 2023 was $ 29,000 and $ 87,000 , respectively, and $ 21,000 and $ 62,000 for the three and nine months ended September 30, 2022, respectively.

Stock-based compensation expense included in general and administrative expenses relating to stock options issued to consultants for the three and nine months ended September 30, 2023 was $ 34,000 and $ 101,000 , respectively, and $ 47,000 and $ 141,000 for the three and nine months ended September 30, 2022, respectively.

Stock-based compensation expense included in research and development expenses relating to stock options issued to consultants for the three and nine months ended September 30, 2023 was $ 11,000 and $ 32,000 , respectively, and $ 7,000 and $ 21,000 for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, total unrecognized stock-based compensation expense related to stock options was $ 539,000 , which is expected to be expensed through July 2025.

Stock-based compensation expense included in general and administrative expenses and research and development expenses relating to stock options issued to employees for the three months ended March 31, 2024 and 2023 was $ 106,000 and $ 83,000 , 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 three months ended March 31, 2024 and 2023 was $ 54,000 and $ 43,000 , respectively.

As of March 31, 2024, total unrecognized stock-based compensation expense related to stock options was $ 1.1 million, which is expected to be expensed through May 2026.

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 during the nine months ended September 30, 2023 and 2022.

The Company did not record any excess tax benefits during the three months ended March 31, 2024 and 2023.

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, warrants 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 and then again to $ 1.22 (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, 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 ATM 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.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Stock Warrants – (continued)

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, or the nine months ended September 30, 2023.

The Warrants have expired in October 2023 and are no longer outstanding.

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.

A summary of all warrant activity for the Company for the nine months ended September 30, 2023 and the year ended December 31, 2022 is as follows:

There were no Warrants exercised during the year ended December 31, 2023.

The Warrants expired in October 2023 and are no longer outstanding.

Upon expiration, the balance in additional paid - in capital related to the warrants was transferred to the additional paid - in capital balance related to common stock with no effect on additional paid - in capital.

A summary of all warrant activity for the Company for the year ended December 31, 2023 is as follows:

Weighted Average

4 unchanged sentences

Balance at December 31, 2023

Balance at September 30, 2023

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Net Loss per Share

2 unchanged sentences

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

Net loss attributable to common stockholders for the three and nine months ended September 30, 2023 was $ 3.3 million and 12.9 , respectively.

Net loss attributable to common stockholders for the three and nine months ended September 30, 2022 was approximately $ 4.8 million and $ 13.6 million, respectively.

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

The number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share and for the three and nine months ended September 30, 2023 were 2,284,336 and 634,426 , respectively and for the three and nine months ended September 30, 2022 were 607,370 and 634,497 , respectively, because their effect is anti-dilutive.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Related Party

On December 15, 2022, the Company approved the retention of MaryAnn Shallcross, the wife of Steven Shallcross, as director of Clinical Operations, for compensation of $ 145,000 and the grant of an option to purchase 50,000 shares of common stock having a value of $ 20,000 .

During the three and nine months ended September 30, 2023, Ms.

Shallcross had $ 36,000 and $ 108,000 in compensation expense, respectively.

Shallcross had been performing services for the Company during 2022 for total compensation of less than $ 120,000 .

Net loss attributable to common stockholders for the three months ended March 31, 2024 and 2023 was $ 5.2 million and $ 4.5 million, respectively.

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 three months ended March 31, 2024 were 4,375,781 and 0 , respectively, and for the three months ended March 31, 2023 were 2,295,469 and 634,426 , respectively, because their effect is anti-dilutive

Common and Preferred Stock

4 unchanged sentences

The Company included certain proposals at its 2022 annual meeting of stockholders, including (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 Articles of Incorporation, as amended 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) to adjourn any meeting of stockholders called for the purpose of voting on the Authorized Common Stock Increase (collectively, the “Stockholder Items”).

The purchaser of the Preferred Stock 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), and (ii) vote the shares of the Series C Preferred Stock purchased in the Offering in favor of the Stockholder Items.

The purchaser of the Preferred Stock 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 could have been extended to December 31, 2022 if certain conditions were met), and (ii) vote the shares of the Series C Preferred Stock purchased in the Offering in favor of the Stockholder Items.

Pursuant to the Securities Purchase Agreement, the Company 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.

3 unchanged sentences

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 are 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.

Theriva Biologics, Inc.

2 unchanged sentences

Common and Preferred Stock – (continued)

The Series C Preferred Stock and Series D Preferred Stock are 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.

2 unchanged sentences

(now known as B.

Riley Securities) to act as a sales agent, which agreement was amended and restated on February 9, 2021 to add Alliance Global Partners as a sale agent.

Riley Securities) to act as a sales agent, which agreement was amended and restated on February 9, 2021 to add Alliance Global Partners as a sales agent.

The amended and restated Sales Agreement (the “Amended and Restated Sales Agreement”) enables the Company to offer and sell shares of common stock from time to time through B.

3 unchanged sentences

The sales agents are 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.

During the three and nine months ended September 30, 2023, the Company sold through the Amended and Restated Sales Agreement approximately 988 and 1.9 million shares, respectively, of the Company’s common stock and received net proceeds of approximately $ 1,000 and $ 2.2 million, respectively.

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

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 (CDIT loans).

During the three months ended March 31, 2024 and 2023, there were no sales of the Company’s common stock through the Original Sales Agreement or the Amended and Restated Sales Agreement.

Loans Payable

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 (RETOS loan) and ACC10 Generalitat de Catalunya (NEBT loan).

The maturities of these loans are between 2024 and 2028.

As a result of the VCN Acquisition, the Company maintains a restricted cash collateral account of $ 99,000 relating to the RETOS loan, which is reflected as a non-current asset on the balance sheet.

September 30, 2023

March 31, 2024

December 31, 2023

A maturity analysis of the debt as of September 30, 2023 is as follows (amounts in thousands of dollars) :

A maturity analysis of the debt as of March 31, 2024 is as follows (amounts in thousands of dollars) :

Theriva Biologics, Inc.

2 unchanged sentences

Commitments and Contingencies

The Company’s existing leases as of September 30, 2023 for its U.S.

The Company’s existing leases as of March 31, 2024 for its U.S.

and Spanish facilities are classified as operating leases.

1 unchanged sentence

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 its 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 for its 100 percent owned Theriva S.L.

6 unchanged sentences

moved into the facilities and the new lease commenced and the prior lease terminated.

Operating lease costs are presented as part of general and administrative expenses in the condensed consolidated statements of operations, and for the three and nine months ended September 30, 2023 approximated $ 156,000 and $ 454,000 , respectively and $ 163,000 and $ 409,000 for the three and nine months ended September 30, 2022, respectively.

Operating lease costs are presented as part of general and administrative expenses in the condensed consolidated statements of operations, and for the three months ended March 31, 2024 and 2023 approximated $ 158,000 and $ 144,000 , respectively.

For the Barcelona lease, the day one non-cash addition of right of use assets due to adoption of ASC 842 was $ 937,000 .

A maturity analysis of the Company’s operating leases as of September 30, 2023 is as follows (amounts in thousands of dollars) :

A maturity analysis of the Company’s operating leases as of March 31, 2024 is as follows (amounts in thousands of dollars) :

Future undiscounted cash flow for the years ending December 31,

10 unchanged sentences

The Company and its third-party contract manufacturers, contract research organizations, and clinical sites may also face disruptions in procuring items that are essential to the Company’s 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 has 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.

Further, although the Company has not experienced any material adverse effects on 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 that these disruptions and increasing inflation could have on its operations.

1 unchanged sentence

The invasion of Ukraine by Russia, the war in the Middle East, 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 the Company’s supply chain, and despite the fact that it currently does not plan any clinical trials in Eastern Europe, may adversely impact the cost and conduct of R&D, manufacturing, and international clinical trials of its product candidates.

Related Party

On December 14, 2023 the Company approved the retention of MaryAnn Shallcross for compensation of $ 152,000 , a bonus of $ 70,000 and the grant of an option to purchase 75,000 shares of common stock having a value of $ 30,000 .

During the three months ended March 31, 2024, Ms.

Shallcross had $ 38,000 in compensation expense.

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

What changed 10-Q

Item 1. Financial Statements