What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-12 compared with 2024-08-13 · 178 added, 117 removed, 513 unchanged (37% of the section changed)

4 unchanged sentences

(In thousands except share and par value amounts)

June 30, 2024

September 30, 2024

December 31, 2023

29 unchanged sentences

Series C convertible preferred stock, $ 0.001 par value;

275,000 issued and 139,569 outstanding

0 issued and outstanding at September 30, 2024, and 275,000 issued and outstanding at December 31, 2023

Series D convertible preferred stock, $ 0.001 par value;

100,000 issued and outstanding

0 issued and outstanding at September 30, 2024 and 100,000 issued and outstanding at December 31, 2023

Stockholders’ Equity:

Common stock, $ 0.001 par value;

350,000,000 shares authorized, 23,113,391 issued and 22,393,158 outstanding at June 30, 2024 and 17,868,282 issued and 17,148,049 outstanding at December 31, 2023

14,000,000 shares authorized, 2,646,272 issued and 2,617,462 outstanding at September 30, 2024 and 715,028 issued and 686,219 outstanding at December 31, 2023

Additional paid-in capital

Treasury stock at cost, 720,233 shares at June 30, 2024 and at December 31, 2023

Accumulated other comprehensive (loss) income

Treasury stock at cost, 28,809 shares at September 30, 2024 and at December 31, 2023

Accumulated other comprehensive income

Accumulated deficit

1 unchanged sentence

Total Liabilities and Stockholders’ Equity

All share numbers have been retrospectively adjusted for the one to twenty-five reverse stock split effective August 26, 2024

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 June 30,

For the six months ended June 30,

For the Three months ended September 30,

For the Nine months ended September 30,

Operating Costs and Expenses:

1 unchanged sentence

Research and development

In-process research and development impairment

Goodwill impairment

2 unchanged sentences

Other Income/Expense:

Foreign currency exchange (loss) gain

Foreign currency exchange gain

Interest income

4 unchanged sentences

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

(Loss) gain on foreign currency translation

Gain (Loss) on foreign currency translation

Total comprehensive loss

All share numbers have been retrospectively adjusted for the one to twenty-five reverse stock split effective August 26, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

16 unchanged sentences

Balance at June 30, 2024

Stock-based compensation

Stock issued under “at-the-market” offering

Issuance of Common Stock and Warrants, net of issuance costs

Foreign currency exchange gains (losses)

Series C Preferred Stock conversion to Common

Series D Preferred Stock conversion to Common

Conversion of Pre-Funded Warrants to Common

Balance at September 30, 2024

All share numbers have been retrospectively adjusted for the one to twenty-five reverse stock split effective August 26, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

Common Stock $0.001 Par Value

10 unchanged sentences

Balance at June 30, 2023

Stock-based compensation

Stock issued under “at-the-market” offering

Translation gains(loss)

Balance at September 30, 2023

All share numbers have been retrospectively adjusted for the one to twenty-five reverse stock split effective August 26, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash Flows From Operating Activities:

2 unchanged sentences

Income tax benefit

In-process research and development impairment

Goodwill impairment

4 unchanged sentences

Prepaid expenses and other current assets

Deposits and other assets

Accounts payable

8 unchanged sentences

Payment of loans payable

Proceeds from issuance Common Stock and Warrants offering, net of issuance costs

Proceeds from issuance ATM offering, net of issuance costs

10 unchanged sentences

Conversion of Series C Preferred Stock to Common Shares

Conversion of Series D Preferred Stock to Common Shares

Right of use assets obtained in exchange for lease liabilities

All share numbers have been adjusted for the one to twenty-five reverse stock split effective August 26, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

6 unchanged sentences

(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 Theriva Biologics S.L.

As a result of the acquisition in March 2022 of Theriva Biologics S.L.

(“VCN”, formerly known as VCN Biosciences, S.L.) (the “Acquisition”), described in more detail below, the Company transitioned 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, to improve access of co-administered cancer therapies to the tumor, and to promote a robust and sustained anti-tumor response by the patient’s immune system.

7 unchanged sentences

The operating results for the interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 25, 2024 (the “2023 Form 10-K”).

On August 15, 2024, 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 (the “Common Stock”), at a ratio of one (1) share of Common Stock for twenty-five (25) shares of Common Stock (the “Reverse Stock Split”).

The Reverse Stock Split was effective on August 26, 2024 (the “Effective Time”).

As a result of the Reverse Stock Split, each twenty-five (25) 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 25,131,230 shares to 1,005,249 shares (subject to rounding of fractional shares) and the number of authorized shares of Common Stock was reduced from 350,000,000 share to 14,000,000 shares.

Stockholders who otherwise were entitled to receive fractional shares because they held a number of pre-reverse stock split shares of Common Stock not evenly divisible by 25, 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 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.

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 June 30, 2024, 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, 2024, the Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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 June 30, 2024, the Company had an accumulated deficit of approximately $ 322.8 million.

The Company continues to incur losses and, as of September 30, 2024, the Company had an accumulated deficit of approximately $ 330.5 million.

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

3 unchanged sentences

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.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Going Concern – (continued)

The Company does not have sufficient capital to fund its operations beyond the date that is twelve months from the date of the filing of this Quarterly Report on Form 10-Q.

3 unchanged sentences

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 June 30, 2024, the Company had cash and cash equivalents of approximately $ 16.6 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 into the second quarter of 2025.

At September 30, 2024, the Company had cash and cash equivalents of approximately $ 16.4 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 into the third quarter of 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.

13 unchanged sentences

● 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.

2 unchanged sentences

Going Concern – (continued)

● 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.

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

11 unchanged sentences

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.

In-Process Research and Development (“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.

6 unchanged sentences

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.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies – (continued)

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

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

the implied control premium.

Summary of Significant Accounting Policies – (continued)

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.

Contingent Consideration

8 unchanged sentences

See Fair Value of Financial Instruments below.

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 three and six months ended June 30, 2024 and 2023.

Research and Development Tax Credits

6 unchanged sentences

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

Summary of Significant Accounting Policies – (continued)

Recent Accounting Pronouncements and Developments

4 unchanged sentences

The Company 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.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies – (continued)

The ASU impacted the analysis of the accounting treatment for the issuance of Convertible Preferred Series C & D stock during the third quarter of 2022, specifically the cash conversion and beneficial conversion features.

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

2 unchanged sentences

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 is not early adopting this ASU, 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.

4 unchanged sentences

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 is not early adopting this ASU, 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.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Goodwill and Intangibles

The following table provides the Company’s Goodwill as of June 30, 2024.

The following table provides the Company’s Goodwill as of September 30, 2024.

Goodwill (in thousands)

2 unchanged sentences

Effects of exchange rates

Balance at June 30, 2024

The following table provides the Company’s in-process R&D as of June 30, 2024.

Balance at September 30, 2024

The following table provides the Company’s in-process R&D as of September 30, 2024.

R&D (in thousands)

Balance at December 31, 2023

In-process R&D impairment

Effects of exchange rates

Balance at June 30, 2024

During the quarter ended June 30, 2024, 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 interim impairment analysis using the “Income approach” that requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital.

The Company concluded that the IPR&D was not impaired as of June 30, 2024, however, goodwill with a carrying value of $ 5.5 million was written down to its estimated fair value of $ 1.5 million and an impairment charge of $4.0 million was recorded during the quarter ended June 30, 2024.

Balance at September 30, 2024

During the three and nine months ending September 30, 2024, 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 interim impairment analysis using both the replacement cost method and the “Income approach” that requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital.

For the three and nine months ending September 30, 2024, the Company concluded that the in-process R&D with a carrying value of $ 19.8 million was impaired and was written down to its estimated fair value of $ 18.6 million and an impairment charge of $ 1.3 million was recorded.

For the three and nine months ending September 30, 2024, the Company concluded that goodwill with a carrying value of $ 1.5 million was impaired and was written down to its estimated fair value of zero and an impairment charge of $ 1.5 million and $ 5.6 million, respectively, was recorded.

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 is required to pay up to $ 70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings completed.

In connection with the Acquisition of VCN, the Company agreed 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 in the fourth quarter 2023 in the amount of $ 3.25 million.

As a result, payment was made in the third 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 $ 6.2 million as of June 30, 2024 and is all reflected as non-current contingent consideration liability.

During the three months ended June 30, 2024 and 2023, the Company recognized in operating expense a $ 275,000 decrease and $ 432,000 increase, respectfully, fair value adjustment to contingent consideration.

During the six months ended June 30, 2024 and 2023, the Company recognized in operating expense a $ 73,000 decrease and $ 568,000 increase, respectfully, fair value adjustment to contingent consideration There were no transfers in or out of the level 3 liabilities during the six months ended June 30, 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 June 30, 2024:

The fair value of the contingent consideration was $ 6.8 million as of September 30, 2024 and is all reflected as non-current contingent consideration liability.

During the three months ended September 30, 2024 and 2023, the Company recognized in operating expense a $ 587,000 increase and $ 1.6 million decrease, respectfully, fair value adjustment to contingent consideration.

During the nine months ended September 30, 2024 and 2023, the Company recognized in operating expense a $ 514,000 increase and $ 1.0 million decrease, respectfully, fair value adjustment to contingent consideration.

There were no transfers in or out of the level 3 liabilities during the nine months ended September 30, 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 December 31, 2023 and September 30, 2024:

(in thousands)

13 unchanged sentences

Change in fair value

Balance at June 30, 2024

Balance at September 30, 2024

Contingent consideration, current portion

Contingent consideration, net of current portion

Balance at June 30, 2024

Balance at September, 2024

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

As of June 30, 2024

As of September 30, 2024

Contingent consideration

4 unchanged sentences

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

As of June 30, 2024

As of September 30, 2024

Weighted Average

28 unchanged sentences

Notes to Condensed Consolidated Financial Statements

Fair Value of Financial Instruments – (continued)

The Company measures certain non-financial assets on a non-recurring basis, including goodwill and in-process R&D.

As a result of those measurements, during the year ended June 30, 2024, goodwill with a total carrying value of $ 5.5 million was written down and an impairment charge of $4.0 million was recorded.

As a result of those measurements, during the quarter ended September 30, 2024 in-process R&D with a carrying value of $ 19.8 million was written down to its estimated fair value of $ 18.6 million and an impairment charge of $ 1.3 million was recorded, and goodwill with a carrying value of $ 1.5 million was written down to its estimated fair value of zero and an impairment charge of $ 1.5 million was recorded.

For the quarter ending June 30, 2024, goodwill with a carrying value of $ 5.5 million was written down to its estimated fair value of $ 1.5 million and an impairment charge of $ 4.0 million was recorded.

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

The fair value of our reporting unit was determined using an income approach that utilizes a discounted cash flow model.

The discounted cash flow models are dependent upon our estimates of future cash flows and other factors.

Our estimates of future cash flows are based on a comprehensive product by product forecast over a period which covers Phase 1 to approval and 15 years of commercialized revenue and involve assumptions concerning (i) future operating performance, including research and development costs through approval of the drug, the future addressable market, future sales, long-term growth rates, operating margins, allocation and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions, all which may differ from actual future cash flows.

Assumptions related to future operating performance are based on management’s annual and ongoing budgeting, forecasting and planning processes and represent our best estimate of the future results of our operations as of a point in time.

These estimates are subject to many assumptions, such as the economic environments in which we operate, demand for the products and competitor actions.

The fair value of the Company’s reporting unit was determined using an income approach that utilizes a discounted cash flow model.

The discounted cash flow models are dependent upon the Company’s estimates of future cash flows and other factors.

The Company’s estimates of future cash flows are based on a comprehensive product by product forecast over a period which covers Phase 1 to approval and 15 years of commercialized revenue and involve assumptions concerning (i) future operating performance, including research and development costs through approval of the drug, the future addressable market, future sales, long-term growth rates, operating margins, allocation and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions, all which may differ from actual future cash flows.

Assumptions related to future operating performance are based on management’s annual and ongoing budgeting, forecasting and planning processes and represent the Company’s best estimate of the future results of its operations as of a point in time.

These estimates are subject to many assumptions, such as the economic environments in which it operates, demand for the products and competitor actions.

Estimated future cash flows are discounted to present value using a market participant, weighted average cost of capital, which considers the risk inherent in the probability adjusted future cash flows from each product.

The financial and credit market volatility directly impacts certain inputs and assumptions used to develop the weighted average cost of capital such as the risk-free interest rate, industry beta, debt interest rate and our market capital structure.

These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related goodwill impairments, if any.

The use of different inputs and assumptions could increase or decrease the Company’s estimated discounted future cash flows, the resulting estimated fair values and the amounts of related goodwill impairments, if any.

Theriva Biologics, Inc.

10 unchanged sentences

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

During the quarter ended June 30, 2024, the Company completed the certification and applied for direct reimbursement for its qualifying research and development expenses incurred in the year ended December 31, 2023.

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

3 unchanged sentences

During the three and six months ending June 30, 2024 the Company recorded $ 221,000 and 444,000 , respectively, as a reduction in research and development expense.

During the three and nine months ending September 30, 2024 the Company recorded $ 221,000 and $ 669,000 , respectively, as a reduction in research and development expense.

Selected Balance Sheet Information

Prepaid expenses and other current assets (in thousands)

September 30,

Prepaid manufacturing expenses

Prepaid consulting, subscriptions and other expenses

Prepaid insurance

Prepaid clinical research organizations

Prepaid consulting, subscriptions and other expenses

VAT receivable

Prepaid insurance

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

5 unchanged sentences

Property and equipment, net (in thousands)

September 30,

Computers and office equipment

3 unchanged sentences

Accrued expenses (in thousands)

September 30,

Accrued clinical consulting services

2 unchanged sentences

Accrued employee benefits (in thousands)

September 30,

Accrued bonus expense

5 unchanged sentences

From time to time the number of shares authorized for options was increased such that 16,000 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.

The exercise price of stock options under the 2010 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 was 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 June 30, 2024, there were 195,782 options issued and outstanding under the 2010 Stock Plan.

As of September 30, 2024, there were 7,843 options issued and outstanding under the 2010 Stock Plan.

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

5 unchanged sentences

On September 17, 2020, the stockholders approved and adopted the 2020 Stock Incentive Plan (“2020 Stock Plan”) for the issuance of up to 16,000 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 June 30, 2024, there were 4,173,502 options issued and outstanding under the 2020 Stock Plan.

The number of shares authorized for awards under the 2020 Stock Plan was increased such that 280,000 shares were authorized as of December 31, 2022.

As of September 30, 2024, there were 167,364 options issued and outstanding under the 2020 Stock Plan.

Only options have been issued under the plan.

4 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 six months ended June 30, 2024 and 2023.

During the three and nine months ended September 30, 2024, the Company granted 420 options to employees with an approximate fair value of $ 1,500 based upon the Black-Scholes option pricing model.

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

23 unchanged sentences

● monthly over three years.

A summary of stock option activity for the six months ended June 30, 2024 and the year ended December 31, 2023 is as follows:

A summary of stock option activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 is as follows:

Weighted Average

3 unchanged sentences

Balance - December 31, 2023

Balance - June 30, 2024 - outstanding

Balance - June 30, 2024 - exercisable

Balance - September 30, 2024 - outstanding

Balance - September 30, 2024 - exercisable

Grant date fair value of options granted – nine months ended September 30, 2024

Weighted average grant date fair value – nine months ended September 30, 2024

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 and research and development expenses relating to stock options issued to employees for the three months ended June 30, 2024 and 2023 was $ 118,000 and $ 102,000 , 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 June 30, 2024 and 2023 was $ 54,000 and $ 44,000 , 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 six months ended June 30, 2024 and 2023 was $ 224,000 and $ 184,000 , 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 six months ended June 30, 2024 and 2023 was $ 108,000 and $ 88,000 , respectively.

As of June 30, 2024, total unrecognized stock-based compensation expense related to stock options was $ 934,000 million, which is expected to be expensed through May 2026.

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 September 30, 2024 and 2023 was $ 123,000 and $ 90,000 , 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 September 30, 2024 and 2023 was $ 54,000 and $ 45,000 , 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 nine months ended September 30, 2024 and 2023 was $ 347,000 and $ 274,000 , 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 nine months ended September 30, 2024 and 2023 was $ 161,000 and $ 133,000 , respectively.

As of September 30, 2024, total unrecognized stock-based compensation expense related to stock options was $ 758,000 , which is expected to be expensed through August 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 three and six months ended June 30, 2024 and 2023.

The Company did not record any excess tax benefits during the three and nine months ended September 30, 2024 and 2023.

Stock Warrants

On September 27, 2024, the Company consummated a public offering (the “Offering”) of an aggregate of (i) 918,600 shares (the “Shares”) of Common Stock, (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 510,000 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (iii) Common Stock purchase warrants (“Common Warrants”) to purchase up to 1,428,600 shares of Common Stock (the “Common Warrant Shares”).

Each Share and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $ 1.75 .

Each Pre-Funded Warrant and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $ 1.7499 .

The Company received aggregate gross proceeds from the Offering of approximately $ 2.5 million, before deducting placement agent fees and other offering expenses.

The Company intends to use the proceeds of the Offering primarily for working capital and general corporate purposes, including research and development and manufacturing scale-up and may use a portion of the proceeds to invest in or acquire other products, businesses or technologies.

Each Pre-Funded Warrant is immediately exercisable for one (1) Pre-Funded Warrant Shares at an exercise price of $ 0.0001 per share and will remain exercisable until the Pre-Funded Warrants are exercised in full.

Each Common Warrant has an exercise price of $ 2.00 per share, is immediately exercisable for one (1) Common Warrant Share, and expires five (5) years from its issuance date.

The Shares, Pre-Funded Warrants and accompanying Common Warrants were issued separately.

The exercise price of the Common Warrants and the Pre-Funded Warrants and number of shares of Common Stock issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events.

The Common Warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Common Warrant Shares to the holder.

The Pre-Funded Warrants may be exercised on a cashless basis at any time.

A holder of the Common Warrants and the Pre-Funded Warrants (together with its affiliates) may not exercise any portion of the Common Warrant or Pre-Funded Warrant to the extent that the holder would own more than 4.99 % (or 9.99 %, at the election of the holder) of the outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days ’ prior notice from the holder to the Company, the holder may increase the amount of beneficial ownership of outstanding shares after exercising the holder’s Common Warrants or Pre-Funded Warrants up to 9.99 % of the number of the Company’s shares of Common Stock outstanding immediately after giving effect to the exercise.

The Company has concluded that the Common Warrants and Pre-Funded Warrants are required to be equity classified.

The Common Warrants were valued on the date of grant using Black Scholes model.

During the nine months ended September 30, there were zero Common Warrants exercised and as of September 30, 2024, 345,000 Pre-Funded warrants were exercised.

Theriva Biologics, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Stock Warrants – (continued)

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.

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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:

A summary of all warrant activity for the Company for the nine months ended September 30, 2024 and the year ended December 31, 2023 is as follows:

Weighted Average

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Balance at December 31, 2023

Balance at September 30, 2024

Theriva Biologics, Inc.

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

Net loss attributable to common stockholders for the three and six months ended June 30, 2024 was $ 8.3 million and $ 13.5 million, respectively.

Net loss attributable to common stockholders for the three and six months ended June 30, 2023 was $ 5.1 million and $ 9.6 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 and six months ended June 30, 2024 were 4,369,284 and 0 , respectively, and for the three and six months ended June 30, 2023 were 2,284,336 and 634,426 , respectively, because their effect is anti-dilutive

Net loss attributable to common stockholders for the three and nine months ended September 30, 2024 was $ 7.7 million and $ 21.2 million, respectively.

Net loss per share attributable to common stockholders for the three and nine months ended September 30, 2024 includes 510,000 of pre-funded warrants.

Net loss attributable to common stockholders for the three and nine months ended September 30, 2023 was $ 3.3 million and $ 12.9 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 and nine months ended September 30, 2024 were 175,207 and 1,428,600 , respectively, and for the three and nine months ended September 30, 2023 were 2,284,336 and 634,426 , respectively, because their effect is anti-dilutive

Common and Preferred Stock

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The Securities 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 (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 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.

The Company included certain shareholder 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 Securities 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.

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

During May 2024, the Company issued 888,072 shares of its common stock upon the conversion effected on such date by the holder of 135,431 shares of its Series C Convertible Preferred Stock at a conversion price of $ 1.22 per share.

As a result of the conversion the Company reduced the Series C Stock $ 988,000 and increased Common Stock $ 1,000 and Additional Paid in Capital $ 987,000 .

During three and nine months ending September 30, 2024, the Company issued 36,609 and 72,132 , respectively, shares of its Common Stock upon the conversion effected on such dates by the holder of 139,569 and 275,000 , respectively, shares of its Series C convertible Preferred Stock at a conversion price of $ 30.50 per share.

As a result of the conversions during the three and nine months ending September 30, 2024, the Company reduced the Series C Preferred Stock $ 1.0 million and $ 2.0 million, respectively, and increased Common Stock $ 37 and $ 72 , respectively and Additional Paid in Capital $ 1.0 million and $ 2.0 million, respectively.

There are no shares of Series C Preferred Stock outstanding as of September 30, 2024.

During three and nine months ending September 30, 2024, the Company issued 26,230 shares of its Common Stock upon the conversion effected on such dates by the holder of 100,000 shares of its Series D convertible Preferred Stock at a conversion price of $ 30.50 per share.

As a result of the conversion during the three and nine months ending September 30, 2024 the Company reduced the Series D Preferred Stock $ 728,000 and increased Common Stock $ 26 respectively and Additional Paid in Capital $ 728,000 .

There are no shares of Series D Preferred stock outstanding as of September 30, 2024.

At Market Issuance Sales Agreement

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Riley Securities) dated as of February 9, 2021, as amended by Amendment No.

1 thereto dated May 3, 2021 (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, at its option, shares of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), through A.G.P./Alliance Global Partners, as sales agent, in an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”).

1 thereto dated May 3, 2021 (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, at its option, shares of the Common Stock through A.G.P./Alliance Global Partners, as sales agent, in an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”).

Sales in the “at the market offering” may occur under the Company’s current effective registration statement on Form S-3 (File No.

333-255726) utilizing a prior prospectus and related prospectus supplements thereto or a newly filed registration statement on Form S-3 once it has been declared effective under the Securities Act.

333-255726) utilizing a prior prospectus and related prospectus supplements thereto or a newly filed registration statement on Form S-3 which was filed on May 2, 2024 (File No.

333-279077) and declared effective on September 25, 2024.

In addition, on May 1, 2024, the Company and B.

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would no longer be a party to the Sales Agreement.

During the three and six months ended June 30, 2024, the Company sold through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement approximately 4.4 million shares of the Company’s common stock and received net proceeds of approximately $ 1.8 million.

During the three and six months ended June 30, 2023, the Company sold through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement approximately 1.9 million shares of the Company’s common stock and received net proceeds of approximately $ 2.2 million.

During the three and nine months ended September 30, 2024, the Company sold through the Sales Agreement approximately 395,000 and 569,000 , respectively, shares of the Company’s Common Stock and received net proceeds of approximately $ 1.8 million and $ 3.6 million, respectively.

During the three and nine months ended September, 2023, the Company sold through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement approximately 40 and 77,000 shares, respectively, of the Company’s Common Stock and received net proceeds of approximately $ 1,000 and $ 2.2 million.

Loans Payable

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As a result of the VCN Acquisition, the Company maintains a restricted cash collateral account of $ 103,000 relating to the RETOS loan, which is reflected as a non-current asset on the balance sheet.

June 30, 2024

September 30, 2024

December 31, 2023

A maturity analysis of the debt as of June 30, 2024 is as follows (amounts in thousands of dollars) :

Theriva Biologics, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

Loans Payable – (continued)

A maturity analysis of the debt as of September 30, 2024 is as follows (amounts in thousands of dollars) :

Commitments and Contingencies

The Company’s existing leases as of June 30, 2024 for its U.S.

The Company’s existing leases as of September 30, 2024 for its U.S.

and Spanish facilities are classified as operating leases.

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The lease that was in existence from December 2021 to December 2022 was a short term agreement with a 90-day termination notice provision that can be exercised by either party.

On the closing date of the Theriva S.L.

acquisition, a sublease was executed for Theriva S.L.

On the closing date of the Acquisition, a sublease was executed for Theriva S.L.

to lease research and office facilities at a new location in Parets del Valles (Barcelona) from the former owner of Theriva S.L.

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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 six months ended June 30, 2024 approximated $ 158,000 and $ 315,000 , respectively and $ 158,000 and $ 303,000 the three and six months ended June 30, 2023, respectively.

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, 2024 approximated $ 158,000 and $ 474,000 , respectively and $ 156,000 and $ 454,000 for the three and six months ended September 30, 2023, 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 June 30, 2024 is as follows (amounts in thousands of dollars) :

A maturity analysis of the Company’s operating leases as of September 30, 2024 is as follows (amounts in thousands of dollars) :

Future undiscounted cash flow for the years ending December 31,

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

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 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.

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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 and six months ended June 30, 2024, we paid compensation to Ms.

On December 14, 2023 the Company approved the retention of Mary Ann Shallcross for compensation of $ 152,000 , a bonus of $ 70,000 and the grant of an option to purchase 3,000 shares of Common Stock having a value of $ 30,000 .

During the three and nine months ended September 30, 2024, the company paid compensation to Ms.

Shallcross of $ 38,000 and $ 114,000 , respectively.

Subsequent events

On July 30, 2024 The Company received notice from the U.S.

Food and Drug Administration (FDA) that it had been granted Rare Pediatric Drug Designation (RPDD) for VCN-01 for the treatment of retinoblastoma.

VCN-01, the Company’s lead product candidate, is a systemic, selective, stroma-degrading oncolytic adenovirus.

Previously, the FDA granted orphan drug designation to VCN-01 for treatment of retinoblastoma.

On July 30, 2024, the Company received a notice of conversion from the holder of shares of its Series C Convertible Preferred Stock to convert the 135,431 shares of Series C Convertible Preferred Stock into 888,072 shares of the Company’s common stock at a conversion price of $ 1.22 per share.

On July 31, 2024 the Company sold through the At Market Issuance Sales Agreement and the Amended and Restated Sales Agreement approximately 1.8 million shares of the Company’s common stock and received net proceeds of approximately $ 0.5 million.

The Company previously had an option-license agreement with Massachusetts General Hospital to develop SYN-020 in several potential indications related to inflammation and gut barrier dysfunction.

however, this expired in July 2024.

On October 31, 2024, the Company held its 2024 Annual Meeting of Stockholders.

At the Annual Meeting, the Company’s stockholders approved an amendment (“Amendment No.

2”) to the Company’s 2020 Stock Incentive Plan (the “2020 Stock Incentive Plan”) to (a) increase the number of shares of Common Stock that we will have authority to grant under the 2020 Stock Incentive Plan from 280,000 shares of Common Stock to 2,500,000 shares of Common Stock and (b) to amend the annual non-employee director grant limit to 250,000 shares of Common Stock;

and approved an amendment to our Articles of Incorporation to increase the number of authorized shares of Common Stock to 350,000,000 shares.

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

What changed 10-Q

Item 1. Financial Statements