What changed in this filing

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Item 1A. Risk Factors

2025-05-14 compared with 2024-11-12 · 29 added, 57 removed, 24 unchanged (78% of the section changed)

3 unchanged sentences

RISKS RELATING TO OUR BUSINESS

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 September 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 September 30, 2024 we have an accumulated deficit of approximately $330.5 and working capital of $12.2 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 September 30, 2024, we had a cash and cash equivalents and restricted cash balance of approximately $16.5 million.

Our auditor’s report on our consolidated financial statements contains an explanatory paragraph regarding our ability to continue as a going concern.

Our consolidated unaudited financial statements as of March 31, 2025 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, 2025 we have an accumulated deficit of approximately $339.3 and working capital of $4.3 million raise substantial doubt about our ability to continue as a going concern for the next twelve months after issuance of our financial statements.

In addition, in connection with the filing of our 2024 Form 10-K our independent registered public accounting firm issued a report that included an explanatory paragraph referring to our recurring losses from operations (anticipated continued losses in the future) and net capital deficiency that, as of the date of such report, raised substantial doubt in our ability to continue as a going concern without additional capital becoming available.

As of March 31, 2025, we had a cash and cash equivalents and restricted cash balance of approximately $10.0 million and as of early May, after our receipt of $6.6 million net proceeds from our public offering that was consummated on May 8, 2025, we had cash and cash equivalents of $14.1 million.

At December 31, 2024, we had an accumulated deficit of $335 million and working capital of $8.7 million.

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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 into the third 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.

Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue.

Although management has been successful in raising capital in the past, there can be no assurance that we will be successful or that any needed financing will be available in the future at terms acceptable to us.

As such, we cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements included in this Quarterly Report on Form 10-Q are filed with the SEC and 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, 2025 do not include any adjustments that might result from the outcome of this uncertainty.

We expect that our current cash will be able to fund operations into the first quarter of 2026 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.

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 nine months ended September 30, 2024, our operating activities used net cash of approximately $12.2 million and our cash and cash equivalents were approximately $16.4 million as of September 30, 2024.

During the three months ended March 31, 2025, our operating activities used net cash of approximately $4.8 million and our cash and cash equivalents were approximately $10.0 million as of March 31, 2025.

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 September 30, 2024, our accumulated deficit totaled approximately $330.5 million on a consolidated basis.

Pursuant to the VCN 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.

As of March 31, 2025, our accumulated deficit totaled approximately $339.3 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.

We expect to incur additional operating losses in the future and therefore expect our cumulative losses to increase.

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Until such time as we receive approval from the FDA and other regulatory authorities for our product candidates, we will not be permitted to sell our products and therefore will not have product revenues from the sale of products.

For the foreseeable future we will have to fund all of our operations and capital expenditures from equity and debt offerings, cash on hand, licensing and collaboration fees and grants, if any.

For the foreseeable future

we will have to fund all of our operations and capital expenditures from equity and debt offerings, cash on hand, licensing and collaboration fees and grants, if any.

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), 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.

The amount of government funding available for grants is dependent upon governmental budgets over which we have no control and which change with new administrations.

Based on our current plans, we expect that our current cash will be able to fund operations into the first quarter of 2026 but will not be sufficient to fund our operations for the next twelve months and will only be sufficient to cover overhead costs, manufacturing costs for near-term clinical supply, and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01, our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN Share Purchase Agreement (the “VCN Purchase Agreement”) related to the VCN Acquisition, 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.

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

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

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A failure otherwise to secure additional funds when needed in the future whether through an equity or debt financing or a sufficient amount of capital without a strategic partnership could result in us being unable to complete planned preclinical and clinical trials or obtain approval of our product candidates from the FDA and other regulatory authorities.

In addition, we could be forced to delay, discontinue or curtail product development, forego sales and marketing efforts, and forego licensing in attractive business opportunities.

In addition, we could be forced to delay, discontinue or curtail product development, forgo sales and marketing efforts, and forgo licensing in attractive business opportunities, cease operations, liquidate our assets or reorganize the Company, or a combination of the foregoing.

Our ability to raise capital through the sale of securities may be limited by the rules of the SEC and NYSE American that place limits on the number and dollar amount of securities that may be sold.

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We also may be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available.

We expect to seek to raise additional capital in the future, which may be dilutive to stockholders or impose operational restrictions.

We expect to seek to raise additional capital in the future to help fund development of our proposed products.

If we raise additional capital through the issuance of equity or of debt securities, the percentage ownership of our current stockholders will be reduced.

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 2,782,449 shares of Common Stock were outstanding as of November 8, 2024.

If all of the unissued authorized shares were issued stockholders ownership percentage will be diluted.

In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that may not be the same as the price per share paid by existing stockholders, thereby subjecting such stockholders to dilution.

Our stockholders may experience additional dilution in net book value per share and any additional equity securities may have rights, preferences and privileges senior to those of the holders of our Common Stock.

We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by existing stockholders, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

The price per share at which we sell additional shares of our Common Stock, or securities convertible or exchangeable into Common Stock, in future transactions may be higher or lower than the price per share paid by existing stockholders.

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 September 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.

We also did not maintain effective information technology general controls over user access, program change management, and segregation of duties, within certain key information systems supporting our accounting and financial reporting processes.

Additionally, many of our business process controls dependent upon the information derived from these information systems were also ineffective, as we did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those controls.

While we plan to take remedial action to address the material weaknesses, we cannot provide any assurance that such remedial measures, or any other remedial measures we take, will be effective.

If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, detect or prevent fraud, or file our periodic reports in a timely manner, which may, among other adverse consequences, cause investors to lose confidence in our reported financial information and lead to a decline in our stock price.

In addition, a material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.

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.

Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.

Changes in U.S.

or international social, political, regulatory and economic conditions or in laws and policies governing trade, manufacturing, development and investment in the countries where we currently conduct our business could adversely affect our business, reputation, financial condition and results of operations.

Changes or proposed changes in U.S.

or other countries’ trade policies may result in restrictions and economic disincentives on international trade.

government has recently imposed, or is currently considering imposing, tariffs on certain trade partners, including China, where we have engaged a vendor.

Tariffs, economic sanctions and other changes in U.S.

trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S.

Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment.

Our business, like many other corporations, would be impacted by changes to the trade policies of the United States and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions).

Such changes have the potential to adversely impact the U.S.

economy or certain sectors thereof, the global economy, and our industry, and as a result, could have a material adverse effect on our business, financial condition and results of operations.

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