What changed in this filing

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Item 1A. Risk Factors

2024-08-13 compared with 2024-05-07 · 36 added, 15 removed, 48 unchanged (52% of the section changed)

4 unchanged sentences

There is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern.

Our consolidated unaudited financial statements as of March 31, 2024 have been prepared under the assumption that we will continue as a going concern for the next twelve months.

Our management concluded that our recurring losses from operations and the fact that as of March 31, 2024 we have an accumulated deficit of approximately $314.5 and working capital of $15.6 million raise substantial doubt about our ability to continue as a going concern for the next twelve months after issuance of our financial statements.

As of March 31, 2024, we had a cash and cash equivalents and restricted cash balance of approximately $18.4 million.

At December 31, 2023, we had an accumulated deficit of $309.3 million and working capital of $20.7 million As of December 31, 2023, we had a cash and cash equivalents and restricted cash balance of approximately $23.3 million consisting of cash and investments in highly liquid U.S.

Our consolidated unaudited financial statements as of June 30, 2024 have been prepared under the assumption that we will continue as a going concern for the next twelve months.

Our management concluded that our recurring losses from operations and the fact that as of June 30, 2024 we have an accumulated deficit of approximately $322.8 and working capital of $12.9 million raise substantial doubt about our ability to continue as a going concern for the next twelve months after issuance of our financial statements.

As of June 30, 2024, we had a cash and cash equivalents and restricted cash balance of approximately $16.7 million.

At December 31, 2023, we had an accumulated deficit of $309.3 million and working capital of $20.7 million.

As of December 31, 2023, we had a cash and cash equivalents and restricted cash balance of approximately $23.3 million consisting of cash and investments in highly liquid U.S.

money market funds.

We expect to continue to incur losses from expenses related to the development of our product candidates and related administrative activities for the foreseeable future.

We expect that our current cash will be able to fund operations through the fourth quarter of 2024 and into the first quarter of 2025 but will not be sufficient to fund operations for twelve months from the date of the filing of this Quarterly Report on Form 10-Q and we will need to seek additional capital to fulfill our operating and capital requirement for the next 12 months to advance our clinical development program to later stages of development and commercialize our clinical product candidate.

We expect that our current cash will be able to fund operations into the second quarter of 2025 but will not be sufficient to fund operations for twelve months from the date of the filing of this Quarterly Report on Form 10-Q and we will need to seek additional capital to fulfill our operating and capital requirement for the next 12 months to advance our clinical development program to later stages of development and commercialize our clinical product candidate.

In addition, our independent registered public accounting firm has issued a report for the year ended December 31, 2023 that includes an explanatory paragraph referring to our recurring losses from operations (anticipated continued losses in the future) and net capital deficiency that raise substantial doubt in our ability to continue as a going concern without additional capital becoming available.

3 unchanged sentences

We will need to raise additional capital to operate our business and our failure to obtain funding when needed may force us to delay, reduce or eliminate certain of our development programs or commercialization efforts.

During the three months ended March 31, 2024, our operating activities used net cash of approximately $4.9 million and our cash and cash equivalents were approximately $18.3 million as of March 31, 2024.

During the six months ended June 30, 2024, our operating activities used net cash of approximately $8.3 million and our cash and cash equivalents were approximately $16.6 million as of June 30, 2024.

With the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, we have experienced significant losses since inception and have a significant accumulated deficit.

As of March 31, 2024, our accumulated deficit totaled approximately $314.5 million on a consolidated basis.

As of June 30, 2024, our accumulated deficit totaled approximately $322.8 million on a consolidated basis.

Pursuant to the Purchase Agreement, we have agreed to use reasonable efforts to commercialize VCN-01 and we agreed as a post- closing covenant to commit to fund VCN’s research and development programs, including but not limited to VCN-01 PDAC phase 2 clinical trial, VCN-01 RB trial and necessary G&A within a budgetary plan of approximately $27.8 million over three years.

1 unchanged sentence

With the exception of the quarter ended June 30, 2010, and limited laboratory revenues from Adeona Clinical Laboratory, which we sold in March 2012, we have generated very minimal revenues.

We do not expect to derive revenue from any source in the near future until we or our potential

partners successfully commercialize our products.

We do not expect to derive revenue from any source in the near future until we or our potential partners successfully commercialize our products.

We expect our expenses to increase in connection with our anticipated activities, particularly as we continue research and development, initiate and conduct clinical trials, and seek marketing approval for our product candidates.

2 unchanged sentences

We will need to raise additional capital to fund our operations and meet our current timelines and we cannot be certain that funding will be available on acceptable terms on a timely basis, or at all.

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

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

In addition, based on the significant anticipated cost of a Phase 3 clinical program in a broad indication for SYN-004, we expect it will not be feasible for us to initiate and complete this trial at this time without a partner given the capital constraints tied to our current market cap and share price.

We intend to focus our capital on our VCN-01 clinical trials and do not intend to provide further funding for our development of VCN-004 internally but intend to our license or partner further development ofSYN-004.

Further development of VCN’s product candidates will require additional funding.

10 unchanged sentences

We may also enter into strategic transactions, issue equity as consideration for acquisitions or part of license issue fees to our licensors, compensate consultants or settle outstanding payables using equity that may be dilutive.

We are authorized to issue 350,000,000 shares of common stock, of which 17,148,049 shares of common stock were outstanding as of March 31, 2024.

At March 31, 2024, we had reserved 6,834,797 shares of common stock for issuance upon exercise of our outstanding options, and preferred shares.

We are authorized to issue 350,000,000 shares of common stock, of which 22,393,158 shares of common stock were outstanding as of June 30, 2024.

At June 30, 2024, we had reserved 5,940,228 shares of common stock for issuance upon exercise of our outstanding options, and preferred shares.

In addition, at such date, we had 2,826,498 shares of our common stock reserved for future issuance under our equity incentive plans.

5 unchanged sentences

We have identified material weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future

If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud, or file our periodic reports in a timely manner, which may cause investors to lose

confidence in our reported financial information and may lead to a decline in our stock price.

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a- 15(f) under the Exchange Act.

Based on our assessment, we have concluded that as of March 31, 2024 we did not maintain effective review controls at a sufficient level of precision with certain financial statement areas and over unusual transactions involving complex accounting and related.

Based on our assessment, we have concluded that as of June 30, 2024 we did not maintain effective review controls at a sufficient level of precision with certain financial statement areas and over unusual transactions involving complex accounting and related.

disclosure requirements.

5 unchanged sentences

Although management believes that the material weaknesses will be remediated by the end of the fiscal year there can be no assurance that the deficiencies will be remediated at such time or that the internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

We cannot assure you that our common stock will be liquid or that it will remain listed on the NYSE American.

Our common stock is listed on the NYSE American.

The NYSE American’s listing standards generally mandate that we meet certain requirements relating to stockholders’ equity, stock price, market capitalization, aggregate market value of publicly held shares and distribution requirements

We cannot assure you that we will be able to maintain the continued listing standards of the NYSE American.

The NYSE American requires companies to meet certain continued listing criteria including a minimum stockholders’ equity of $6.0 million if an issuer has sustained losses from continuing operations and/or net losses in its five most recent years, as outlined in the NYSE American Company Guide and trading of the stock above $0.10 per share.

The NYSE American Company Guide also states that the NYSE normally will not consider removing from listing securities of an issuer if it is in compliance with all of the following:

a total value of market capitalization of at least $50.0 million;

1,100,000 publicly-held shares;

a market value of publicly held shares of at least $15.0 million;

and 400 round lot shareholders.

In addition, the NYSE American has informed us that it can commence delisting proceedings and immediately suspend trading in the event that our common stock trades at levels viewed to be abnormally low and no longer suitable for listing pursuant to Section 1003(f)(v) of the NYSE American Company Guide.

Generally the NYSE American views trading at or below a price of $0.10 to be abnormally low.

As stated above, in the event that we were to fail to meet the requirements of NYSE American per share price requirement the NYSE American could commence delisting proceedings and immediately suspend trading of our common stock o the NYSE American or if we fail to meet other requirements such as the stockholders’ equity requirement and we could not timely cure such deficiency, our listing could become subject to NYSE American continued listing evaluation and follow-up procedures, which could result in delisting procedures.

We previously received notification from the NYSE American citing failure to comply with the minimum stockholders’ equity continued listing standard as set forth in Part 10, Section 1003 of the Company Guide.

Although in the past we have been able to cure previously cited deficiencies, there can be no assurance that we will continue to meet the NYSE American continued listing requirements.

In addition, in the future we may not be able to ensure that our common stock trades at levels not viewed to be abnormally low and no longer suitable for listing or maintain minimum stockholders’ equity and/or issue additional equity securities in exchange for cash or other assets, if available, to maintain certain minimum stockholders’ equity required by the NYSE American.

If we are delisted from the NYSE American then our common stock will trade, if at all, only on the over-the-counter market, such as the OTC Bulletin Board securities market, and then only if one or more registered broker-dealer market makers comply with quotation requirements.

In addition, delisting of our common stock could depress our stock price, substantially limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.

Delisting from the NYSE American could also have other negative results, including the potential loss of confidence by suppliers and employees, the loss of institutional investor interest and fewer business development opportunities.

We cannot assure you that our common stock will be liquid or that it will remain listed on the NYSE American.

A failure to regain compliance with the NYSE American stockholders’ equity requirements or failure to continue to meet the other listing requirements could result in a de-listing of our common stock.

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 1A. Risk Factors