Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-12584

THERIVA BIOLOGICS, INC.

(Exact name of registrant as specified in its charter)

Nevada	13-3808303
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9605 Medical Center Drive, Suite 270
Rockville, MD	20850
(Address of principal executive offices)	(Zip Code)

(301) 417-4364

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	TOVX	NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐

Non-accelerated Filer	☒	Smaller Reporting Company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 3, 2024, the registrant had 17,277,371 shares of common stock, $0.001 par value per share, outstanding.

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THERIVA BIOLOGICS, INC.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In particular, statements contained in this Quarterly Report on Form 10-Q, including but not limited to, statements regarding the timing of our clinical trials, the development and commercialization of our pipeline products, the sufficiency of our cash, our ability to finance our operations and business initiatives and obtain funding for such activities and the timing of any such financing, our future results of operations and financial position, business strategy and plans prospects, or costs and objectives of management for future research, development or operations, are forward-looking statements. These forward-looking statements relate to our future plans, objectives, expectations and intentions and may be identified by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “seeks,” “goals,” “estimates,” “predicts,” “potential” and “continue” or similar words. Readers are cautioned that these forward-looking statements are based on our current beliefs, expectations and assumptions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and those identified under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 25, 2024 (the “2023 Form 10-K”). Therefore, actual results may differ materially and adversely from those expressed, projected or implied in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

NOTE REGARDING COMPANY REFERENCES

Throughout this Quarterly Report on Form 10-Q, “Theriva Biologics,” the “Company,” “we,” “us” and “our” refer to Theriva Biologics, Inc. and our subsidiaries Theriva Biologics, S.L. (“VCN”, formerly known as VCN Biosciences, S.L.), Pipex Therapeutics, Inc. (“Pipex Therapeutics”), Effective Pharmaceuticals, Inc. (“EPI”), Solovax, Inc. (“Solovax”), CD4 Biosciences, Inc. (“CD4”), Epitope Pharmaceuticals, Inc. (“Epitope”), Healthmine, Inc. (“Healthmine”), Putney Drug Corp. (“Putney”) and Synthetic Biomics, Inc. (“SYN Biomics”).

NOTE REGARDING TRADEMARKS

All trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

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THERIVA BIOLOGICS, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

	PART II. OTHER INFORMATION	39

Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42

SIGNATURES		43

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PART I–FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Theriva Biologics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands except share and par value amounts)


	March 31, 2024		December 31, 2023
Assets

Current Assets
Cash and cash equivalents	$	18,261	$	23,177
Tax credit receivable		1,772		1,812
Prepaid expenses and other current assets		1,623		2,414
Total Current Assets		21,656		27,403

Non-Current Assets
Property and equipment, net		375		422
Restricted cash		99		102
Right of use asset		1,634		1,759
In-process research and development		19,316		19,755
Goodwill		5,573		5,700
Deposits and other assets		77		78
Total Assets	$	48,730	$	55,219

Liabilities and Stockholders‘ Equity

Current Liabilities:
Accounts payable	$	571	$	770
Accrued expenses		3,327		2,995
Accrued employee benefits		665		1,517
Deferred research and development tax credit-current portion		886		906
Loans payable-current		62		63
Operating lease liability-current portion		498		487
Total Current Liabilities		6,009		6,738

Non-current Liabilities
Non-current contingent consideration		6,476		6,274
Loan Payable - non-current		159		162
Non-current deferred research and development tax credit		664		906
Non-current operating lease liability		1,299		1,442
Total Liabilities		14,607		15,522

Commitments and Contingencies (Note 13)		—		—
Temporary Equity; 10,000,000 authorized
Series C convertible preferred stock, $0.001 par value; 275,000 issued and outstanding		2,006		2,006
Series D convertible preferred stock, $0.001 par value; 100,000 issued and outstanding		728		728
Stockholders’ Equity:
Common stock, $0.001 par value; 350,000,000 shares authorized, 17,868,282 issued and 17,148,049 outstanding at March 31, 2024 and 17,868,282 issued and 17,148,049 outstanding at December 31, 2023		18		18
Additional paid-in capital		346,679		346,519
Treasury stock at cost, 720,233 shares at March 31, 2024 and at December 31, 2023		(288)		(288)
Accumulated other comprehensive (loss) income		(537)		32
Accumulated deficit		(314,483)		(309,318)
Total Stockholders’ Equity		31,389		36,963

Total Liabilities and Stockholders’ Equity	$	48,730	$	55,219

See accompanying notes to unaudited condensed consolidated financial statements.

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Theriva Biologics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	For the Three Months Ended March 31,
	2024		2023
Operating Costs and Expenses:
General and administrative	$	1,933	$	2,201
Research and development		3,459		2,977
Total Operating Costs and Expenses		5,392		5,178

Loss from Operations		(5,392)		(5,178)

Other Income:
Foreign currency exchange (loss) gain		(1)		6
Interest income		228		364
Total Other Income		227		370

Net Loss before income taxes		(5,165)		(4,808)
Income tax benefit		—		330

Net Loss Attributable to Common Stockholders	$	(5,165)	$	(4,478)

Net Loss Per Share - Basic and Dilutive	$	(0.30)	$	(0.30)

Weighted average number of shares outstanding during the period - basic and dilutive		17,148,049		15,124,061

Net Loss		(5,165)		(4,478)
(Loss) gain (loss) on foreign currency translation		(569)		374
Total comprehensive loss		(5,734)		(4,104)

See accompanying notes to unaudited condensed consolidated financial statements.

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Theriva Biologics, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholder’s Equity

(In thousands, except share and par value amounts)


	Common Stock $0.001 Par Value							Accumulated
				Additional				Other				Total
				Paid-in		Accumulated		Comprehensive				Stockholders’
	Shares	Amount		Capital		Deficit		income		Treasury Stock		Equity

Balance at December 31, 2023	17,868,282	$	18	$	346,519	$	(309,318)	$	32		(288)	$	36,963

Stock-based compensation	—		—		160		—		—		—		160
Foreign currency exchange gains (losses)	—		—		—		—		(569)		—		(569)
Net loss	—		—		—		(5,165)		—		—		(5,165)

Balance at March 31, 2024	17,868,282	$	18	$	346,679	$	(314,483)	$	(537)		(288)	$	31,389


	Common Stock $0.001 Par Value							Accumulated
				Additional				Other				Total
				Paid-in		Accumulated		Comprehensive				Stockholders’
	Shares	Amount		Capital		Deficit		income		Treasury Stock		Equity

Balance at December 31, 2022	15,844,061	$	16	$	343,750	$	(290,969)	$	(679)		(288)	$	51,830

Stock-based compensation	—		—		126		—		—		—		126
Foreign currency exchange gains	—		—		—		—		374		—		374
Net loss	—		—		—		(4,478)		—		—		(4,478)

Balance at March 31, 2023	15,844,061	$	16	$	343,876	$	(295,447)	$	(305)		(288)	$	47,852

See accompanying notes to unaudited condensed consolidated financial statements.

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Theriva Biologics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the Three Months Ended March 31,
	2024		2023
Cash Flows From Operating Activities:
Net loss	$	(5,165)	$	(4,478)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		160		126
Income tax benefit		—		(330)
Change in fair value of contingent consideration		202		135
Non-cash lease expense		108		82
Depreciation		39		32
Deferred research and development tax credit		(223)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		766		(447)
Accounts payable		(190)		(440)
Accrued expenses		382		568
Accrued employee benefits		(845)		(758)
Operating lease liability		(115)		(100)
Net Cash Used In Operating Activities		(4,881)		(5,610)

Cash Flows from Investing Activities
Purchase of property and equipment		—		(8)
Net Cash Used in Investing Activities		—		(8)

Cash Flows from Financing Activities
Payment of loans payable		—		(55)
Net Cash used in Financing Activities		—		(55)

Effects of exchange rate changes on cash and cash equivalents		(38)		(35)
Net decrease in cash and cash equivalents and restricted cash		(4,919)		(5,708)
Cash and cash equivalents and restricted at the beginning of this period		23,279		41,884
Cash and cash equivalents and restricted cash at the end of this period	$	18,360	$	36,176

Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
Cash and cash equivalents	$	18,261	$	36,076
Restricted cash included in other long-term assets		99		100
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	18,360	$	36,176

Supplemental non-cash investing and financing activities:
Right of use assets obtained in exchange for lease liabilities	$	—	$	937

See accompanying notes to unaudited condensed consolidated financial statements.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization, Nature of Operations and Basis of Presentation

Description of Business

Theriva Biologics, Inc. (the “Company” or “Theriva Biologics”) is a diversified clinical-stage company developing therapeutics in areas of high unmet need. As a result of the acquisition of 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. Prior to the Acquisition, the Company’s focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases in areas which included its clinical development candidates: (1) SYN-004 (ribaxamase) which is designed to degrade certain commonly used intravenous (IV) beta-lactam antibiotics within the GI tract to prevent microbiome damage thereby preventing overgrowth and infection by pathogenic organisms such as Clostridioides difficile infection (CDI), and vancomycin resistant Enterococci (VRE), and reducing the incidence and severity of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplant (HCT) recipients, and (2) SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under cGMP conditions and intended to treat both local GI and systemic diseases.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”) for complete financial statements. The accompanying condensed consolidated financial statements include all adjustments, comprised of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. 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.

The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the amounts of assets and liabilities at the reporting date and the amounts of revenue and expenses in the periods presented. The Company believes that the accounting estimates employed are appropriate and the resulting balances are reasonable; 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 March 31, 2024, the Company has one operating segment (which includes the legacy Company business and the VCN business) and therefore one reporting segment.

2. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company continues to incur losses and, as of March 31, 2024, the Company had an accumulated deficit of approximately $314.5 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Since inception, the Company has financed its activities principally from the proceeds from the issuance of equity securities.

The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise additional debt and equity capital. There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to the Company. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

2. Going Concern – (continued)

The Company does not have sufficient capital to fund its operations beyond the next twelve months. In order to address the Company’s capital needs, including its planned clinical trials, the Company is actively pursuing additional equity or debt financing in the form of either a private placement or a public offering. The Company has been in ongoing discussions with strategic institutional investors and investment banks with respect to such possible offerings. Such additional financing opportunities might not be available to the Company when and if needed, on acceptable terms or at all. If the Company is unable to obtain additional financing in sufficient amounts or on acceptable terms under such circumstances, the Company’s operating results and prospects will be adversely affected.

At March 31, 2024, the Company had cash and cash equivalents of approximately $18.3 million. Based upon the Company’s current business plans, management believes that the Company’s current cash on hand will be sufficient to fully execute its plans through December 31, 2024 and into first quarter 2025. Commencement of planned future clinical trials is subject to the Company’s successful pursuit of opportunities that will allow it to establish the clinical infrastructure and financial resources necessary to successfully initiate and complete its plan. The Company anticipates its current cash will allow it to cover overhead costs, manufacturing costs for clinical supply, commercial scale up costs and limited research efforts, including completing its funding requirements for its ongoing current trials for VCN-01 and the on-going testing of SYN-004 (ribaxamase). The Company will be required to obtain additional funding in order to continue the development of its current product candidates within the anticipated time periods (including initiation of its planned future clinical trials), if at all, and to continue to fund operations at the current cash expenditure levels. Currently, the Company does not have commitments from any third parties to provide it with capital. Potential sources of financing include strategic relationships, public or private sales of equity (including through its at the market offering sales agreement (the “ATM Sales Agreement”)) or debt and other sources. The Company cannot assure that it will meet the requirements for use of the ATM Sales Agreement or that additional funding will be available on favorable terms, or at all. If the Company fails to obtain additional funding for its clinical trials, whether through the sale of securities or a partner or collaborator, and otherwise when needed, it will not be able to execute its business plan as planned and will be forced to cease certain development activities (including initiation of planned clinical trials) until funding is received and its business will suffer, which would have a material adverse effect on its financial position, results of operations and cash flows.

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

●

the progress of its research activities;

●

the number and scope of its research programs;

●

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

●

the progress of its preclinical and clinical development activities;

●

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

●

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

●

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

●

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

●

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

●

the costs and timing of regulatory approvals.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

2. Going Concern – (continued)

The Company has based its estimates of funding requirements on assumptions that may prove to be wrong. The Company may need to obtain additional funds sooner or in greater amounts than it currently anticipates.

If the Company raises funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of the existing stockholders will be diluted. If the Company is not able to obtain financing when needed, it may be unable to carry out its business plan. As a result, the Company may have to significantly limit its operations and its business, financial condition and results of operations would be materially harmed.

3. Summary of Significant Accounting Policies

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

IPR&D

IPR&D assets represent the fair value assigned to technologies that the Company acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. IPR&D assets are considered to have indefinite-lives until the completion or abandonment of the associated research and development projects. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed to have definite lives and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value.

During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis on October 1, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that could indicate an impairment. The impairment test consists of a comparison of the estimated fair value of the IPR&D with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The key assumptions used to value IPR&D include estimates of future cash flows and to the discount rate applicable to the future cash flow periods.

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

Goodwill

The Company tests the carrying amounts of goodwill for recoverability on an annual basis on October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs a one-step test in its evaluation of the carrying value of goodwill if qualitative factors determine it is necessary to complete a goodwill impairment test. In the evaluation, the fair value of the relevant reporting unit is determined and compared to its carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value, and a charge is reported in impairment of goodwill in the Company’s consolidated statements of operations. The key assumptions used to value the reporting unit include estimates of future cash flows, the discount rate applicable and those future cash flow periods, and the implied control premium.

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

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

3. Summary of Significant Accounting Policies – (continued)

Contingent Consideration

Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. Payments for amounts not in excess of original fair values established at acquisition date (including measurement period adjustments), and not paid within a period considered to be close to the transaction date, are reflected as financing activities in the statement of cash flows. Subsequent to the date of acquisition, the Company reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. The discounted cash flow is the method used to value the contingent consideration which includes inputs of not readily observable market data, which are level 3 inputs. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long-term liabilities in the consolidated balance sheets. See Fair Value of Financial Instruments below.

Long-Lived Assets

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 months ended March 31, 2024 and 2023.

Research and Development Tax Credits

The Company, through its Theriva S.L. subsidiary, participates in a Research and Development incentive program sponsored by the Spanish government. The program provides for reimbursement of certain expenses incurred in research and development efforts the Company incurs in Spain. The program provides for certain limits on the types and amounts of expenses and requires participants to complete a certification and apply for the refund annually. Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period. The Company accounts for the reimbursement as a tax credit receivable related to amounts that had been approved by the Spanish government and a corresponding deferred research and development tax credit as it was determined that amounts became probable of being received upon the receipt of the approval. Additionally, the Company has elected to account for the tax credit as a contra-expense as this most appropriately reflects the nature of the transaction and will reduce future research and development expenditures as the Company continues to incur expenses in the upcoming 24-month period.

Recent Accounting Pronouncements and Developments

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related earnings per share guidance for both Subtopics. The ASU is effective for annual reporting periods after December 15, 2023 and interim periods within those annual periods and early adoption is permitted in annual reporting periods ending after December 15, 2020. The Company has adopted ASU 2020-06 on January 1, 2022. The ASU impacted the analysis of the accounting treatment for the issuance of Convertible Preferred Series C & D stock during the third quarter, specifically the cash conversion and beneficial conversion features.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

3. Summary of Significant Accounting Policies – (continued)

In December 2023, the FASB issued final guidance in ASU No. 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures requiring entities to provide additional information in the rate reconciliation and disclosures about income taxes paid. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company is not early adopting, and therefore, this ASU is not adopted in the current period. The Company does not expect this ASU to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker. Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment expense disclosures. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company is not early adopting, and therefore has not adopted this ASU in the current period. The Company does not expect this ASU to have a material impact on the consolidated financial statements.

4. Goodwill and Intangibles

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


	Goodwill (in thousands)
Balance at December 31, 2023	$	5,700
Effects of exchange rates		(127)
Balance at March 31, 2024	$	5,573

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


	In-process
	R&D (in thousands)
Balance at December 31, 2023	$	19,755
Effects of exchange rates		(439)
Balance at March 31, 2024	$	19,316

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

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

5. Fair Value of Financial Instruments

Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified on a three-tier hierarchy as follows:

●

Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;

●

Level 2 inputs: Inputs, other than quoted prices, that are observable either directly or indirectly; and

●

Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The carrying amounts of the Company’s short-term financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these level 1 instruments.

As a result of the acquisition of VCN the Company acquired interest-free or below-market interest rate loans extended by Spanish government. 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 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. 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 $6.5 million as of March 31, 2024 and is all reflected as non-current contingent consideration liability. During the three months ended March 31, 2024 and 2023, the Company recognized in operating expense a $202,000 and $135,000, respectfully, fair value adjustment increase to contingent consideration. There were no transfers in or out of the level 3 liabilities during the three months ended March 31, 2024 and 2023.

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


	(in thousands)
Balance at December 31, 2022	$	10,184
Payment of contingent consideration		(3,250)
Change in fair value		(660)
Balance at December 31, 2023	$	6,274

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,274
Balance at December 31, 2023	$	6,274

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

5. Fair Value of Financial Instruments – (continued)


	(in thousands)
Balance at December 31, 2023	$	6,274
Change in fair value		202
Balance at March 31, 2024	$	6,476

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,476
Balance at March 31, 2024	$	6,476

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


	As of March 31, 2024
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,476	$	—	$	—	$	6,476
Total liabilities	$	6,476	$	—	$	—	$	6,476


	As of December 31, 2023
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,274	$	—	$	—	$	6,274
Total liabilities	$	6,274	$	—	$	—	$	6,274

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


	As of March 31, 2024
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.8% to 13.5%
		Weighted Average Discount rate	13.13%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%


	As of December 31, 2023
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.9% to 13.6%
		Weighted Average Discount rate	13.16%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

6. Research and Development Tax Credits

The Company, through its Theriva S.L. subsidiary, participates in a Research and Development program sponsored by the Spanish government. The program provides for reimbursement of certain expenses incurred in research and development efforts the Company incurs in Spain. The reimbursements can be through either tax credits or direct refunds. The program provides for certain limits on the types and amounts of expenses for which reimbursement may be sought and requires participants to complete a certification and apply for the refund annually. Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period.

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

The Company evaluated the program and concluded that it qualified to be accounted for as government assistance. Accordingly, the Company, as allowed by U.S. GAAP, elected to account for the grant by analogizing to the guidance provided by International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance. Accordingly, the Company recognized a tax credit receivable of $1.8 million related to amounts that had been approved by the Spanish government and a corresponding deferred research and development tax credit current portion of $886,000 and a deferred research and development tax credit non-current portion of $664,000, as it was determined that amounts became probable of being received upon the receipt of the approval. 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. During the three months ending March 31, 2024 the Company recorded $223,000 as a reduction in research and development expense.

7. Selected Balance Sheet Information

Prepaid expenses and other current assets (in thousands)


	March 31,		December 31,
	2024		2023
Prepaid manufacturing expenses	$	508	$	491
Prepaid clinical research organizations		364		1,119
Prepaid insurance		337		496
Prepaid consulting, subscriptions and other expenses		278		180
VAT receivable		136		128

Total	$	1,623	$	2,414

Prepaid clinical research organizations (CROs) expense is classified as a current asset. The Company makes payments to the CROs based on agreed upon terms that include payments in advance of study services.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

7. Selected Balance Sheet Information – (continued)

Property and equipment, net (in thousands)


	March 31,		December 31,
	2024		2023
Computers and office equipment	$	900	$	902
Other property, plant and equipment		407		417
Leasehold improvements		94		94
Software		11		11
		1,412		1,424
Less: accumulated depreciation and amortization		(1,037)		(1,002)

Total	$	375	$	422

Accrued expenses (in thousands)


	March 31,		December 31,
	2024		2023
Accrued clinical consulting services	$	2,424	$	1,700
Accrued manufacturing costs		593		843
Accrued vendor payments		310		452

Total	$	3,327	$	2,995

Accrued employee benefits (in thousands)


	March 31,		December 31,
	2024		2023
Accrued bonus expense	$	325	$	1,307
Accrued compensation expense		224		127
Accrued vacation expense		115		83

Total	$	665	$	1,517

8. Stock-Based Compensation

Stock Incentive Plans

On March 20, 2007, the Company’s Board of Directors approved the 2007 Stock Incentive Plan (the “2007 Stock Plan”) for the issuance of up to 7,143 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. This plan was approved by the stockholders on November 2, 2007. The exercise price of stock options under the 2007 Stock Plan was determined by the compensation committee of the Board of Directors and could be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. As of March 31, 2024, there were 86 options issued and outstanding under the 2007 Stock Plan. There are no shares available to be issued under this plan. Only options were issued under the plan.

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

8. Stock-Based Compensation – (continued)

On November 2, 2010, the Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (“2010 Stock Plan”) for the issuance of up to 8,572 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. From time to time the number of shares authorized for options was increased such that 400,000 were authorized as of September 5, 2019. The exercise price of stock options under the 2010 Stock Plan is determined by the compensation committee of the Board of Directors and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant and expire between five and ten years after the grant date. As of March 31, 2024, there were 198,540 options issued and outstanding under the 2010 Stock Plan. There are no shares available to be issued under this plan. Only options were issued under the plan.

On September 17, 2020, the stockholders approved and adopted the 2020 Stock Incentive Plan (“2020 Stock Plan”) for the issuance of up to 400,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. The number of shares authorized for options was increased such that 7,000,000 were authorized as of December 31, 2022. As of March 31, 2024, there were 4,177,155 options issued and outstanding under the 2020 Stock Plan. Only options have been issued under the plan.

In the event of an employee’s termination, the Company will cease to recognize compensation expense for that employee. Stock option forfeitures are recognized as incurred. The fair value of the stock-based payment is recognized over the stated vesting period.

The Company has applied fair value accounting for all stock-based payment awards since inception. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model. There were no options granted during the three months ended March 31, 2024 and 2023.

Expected dividends —The Company has never declared or paid dividends on its common stock and has no plans to do so in the foreseeable future.

Expected volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The expected volatility assumption is derived from the historical volatility of the Company’s common stock over a period approximately equal to the expected term.

Risk-free interest rate—The assumed risk-free rate used is a zero coupon U.S. Treasury security with a maturity that approximates the expected term of the option.

Expected life of the option—The period of time that the options granted are expected to remain unexercised. Options granted during the prior year have a maximum term of seven years. The Company estimates the expected life of the option term based on the weighted average life between the dates that options become fully vested and the maximum life of options granted.

The Company records stock-based compensation based upon the stated vesting provisions in the related agreements. The vesting provisions for these agreements have various terms as follows:

●

immediate vesting,

●

in full on the one-year anniversary date of the grant date,

●

half vesting immediately and the remaining over three years,

●

quarterly over three years,

●

annually over three years,

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

8. Stock-Based Compensation – (continued)

●

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

●

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

●

one-quarter immediate vesting and the remaining over three years,

●

one-quarter immediate vesting and the remaining over 33 months,

●

monthly over one year, and

●

monthly over three years.

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


		Weighted		Weighted Average	Aggregate
		Average Exercise		Remaining	Intrinsic
	Options	Price		Contractual Life	Value
Balance - December 31, 2022	2,295,898	$	3.53	6.44 years	$	—

Granted	2,195,000		0.59
Expired	(104,270)		14.73
Forfeited	(10,847)		1.11
Balance - December 31, 2023	4,375,781		1.80	7.70 years		—

Expired	—		—
Forfeited	—		—

Balance - March 31, 2024 - outstanding	4,375,781	$	1.80	7.45 years	$	—

Balance - March 31, 2024 - exercisable	1,611,399	$	3.80	5.59 years	$	—

Grant date fair value of options granted – year ended December 31, 2023		$	873,140

Weighted average grant date fair value – year ended December 31, 2023		$	0.40

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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

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

The FASB’s guidance for stock-based payments requires cash flows from excess tax benefits to be classified as a part of cash flows from operating activities. Excess tax benefits are realized tax benefits from tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options. The Company did not record any excess tax benefits during the three months ended March 31, 2024 and 2023.

9. Stock Warrants

On October 15, 2018, the Company closed its underwritten public offering pursuant to which it received gross proceeds of approximately $18.6 million before deducting underwriting discounts, commissions and other offering expenses payable by the Company and sold (i) Class A Units (the “Class A Units”), consisting of an aggregate of 252,000 shares of the Common Stock, warrants to purchase an aggregate of 252,000 shares of Common Stock at an exercise price of $13.80 per share, which subsequently was reduced to $6.90 per share and then again to $1.22 (each a “Warrant” and collectively, the “Warrants”) and (ii) Class B Units (the “Class B Units”, and together with the Class A Units, the “Units”), consisting of an aggregate of 15,723 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”), with a stated value of $1,000 and convertible into shares of Common Stock at the stated value divided by a conversion price of $11.50 per share, with all shares of Series B Preferred Stock convertible into an aggregate of 1,367,218 shares of Common Stock, and issued with a warrant to purchase an aggregate of 1,367,218 shares of Common Stock. The Warrants were valued on the date of grant using Monte Carlo simulations. There were no Warrants exercised during the year ended December 31, 2023. The Warrants expired in October 2023 and are no longer outstanding. Upon expiration, the balance in additional paid - in capital related to the warrants was transferred to the additional paid - in capital balance related to common stock with no effect on additional paid - in capital.

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


				Weighted Average
	Number of	Weighted Average		Remaining
	Warrants	Exercise Price		Contractual Life
Balance at December 31, 2022	634,426	$	1.22	0.78 years
Granted	—		—
Exercised	—		—
Forfeited	(634,426)		1.22
Balance at December 31, 2023	—	$	—	—

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

10. Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding including the effect of common share equivalents. Diluted net loss per share assumes the issuance of potential dilutive common shares outstanding for the period and adjusts for any changes in income and the repurchase of common shares that would have occurred from the assumed issuance, unless such effect is anti-dilutive. Net loss attributable to common stockholders for the three months ended March 31, 2024 and 2023 was $5.2 million and $4.5 million, respectively. The number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share for the three months ended March 31, 2024 were 4,375,781 and 0, respectively, and for the three months ended March 31, 2023 were 2,295,469 and 634,426, respectively, because their effect is anti-dilutive

11. Common and Preferred Stock

Series C and D Preferred Stock

On July 29, 2022, the Company closed a private placement offering pursuant to the terms of a Securities Purchase Agreement dated as of July 28, 2022 entered into with MSD Credit Opportunity Master Fund, L.P.(the “Securities Purchase Agreement”), pursuant to which the Company issued and sold 275,000 shares of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), and 100,000 shares of the Company’s Series D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock,” and together with the Series C Preferred Stock, the “Preferred Stock”), at an offering price of $8.00 per share, for gross proceeds of approximately $3.0 million in the aggregate, before the deduction of discounts, fees and offering expenses. The shares of Preferred Stock are convertible, at a conversion price (the “Conversion Price”) of $1.22 per share (subject in certain circumstances to adjustments), into an aggregate of 2,459,016 shares of the Company’s Common Stock, at the option of the holders of the Preferred Stock and, in certain circumstances, by the Company. 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.

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. The Certificate of Designation for the Series C Preferred Stock provides, in particular, that the Series C Preferred Stock will have no voting rights other than the right to vote as a class on the Stockholder Items and the right to cast votes on an as converted to Common Stock basis on the Stockholder Items. The Certificate of Designation for the Series D Preferred Stock provides, in particular, that the Series D Preferred Stock will have no voting rights other than the right to vote as a class on the Stockholder Items and the right to cast 20,000 votes per share of Series D Preferred Stock on the Stockholder Items and to vote the shares of the Series D Preferred Stock purchased in the Offering in the same proportion as shares of Common Stock and any other shares of capital stock of the Company that are entitled to vote thereon (excluding any shares of Common Stock that are not voted) on the Stockholder Items.

The holders of Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock. The Conversion Price may be adjusted pursuant to the Certificates of Designation for stock dividends and stock splits, subsequent rights offering, pro rata distributions of dividends or the occurrence of a fundamental transaction (as defined in the applicable Certificate of Designation).

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

11. Common and Preferred Stock – (continued)

The Series C Preferred Stock and Series D Preferred Stock are classified as temporary equity as a result of the deemed liquidation provision. Transaction expenses paid to third parties will be charged to temporary equity and will not be accreted as deemed dividends until redemption becomes probable.

In order to comply with Section 122 of the NYSE American Company Guide, on August 9, 2022 the Company and the holder of the Company’s Series C preferred stock and Series D preferred stock amended the Securities Purchase Agreement entered into between them on July 28, 2022 to provide that the holder may only submit 1,549,295 of the votes relating to the Series C Preferred Stock that it would otherwise be entitled to vote.

B. Riley Securities Sales Agreement

On August 5, 2016, the Company entered into the Sales Agreement (the “Original Sales Agreement”) with FBR Capital Markets & Co. (now known as B. Riley Securities) to act as a sales agent, which agreement was amended and restated on February 9, 2021 to add Alliance Global Partners as a sales agent. The amended and restated Sales Agreement (the “Amended and Restated Sales Agreement”) enables the Company to offer and sell shares of common stock from time to time through B. Riley Securities, Inc. and A.G.P./Alliance Global Partners as the Company’s sales agent. Sales of common stock under the Sales Agreement are made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act. The sales agents are entitled to receive a commission rate of up to 3.0% of gross sales in connection with the sale of the Common Stock sold on the Company’s behalf. During the three months ended March 31, 2024 and 2023, there were no sales of the Company’s common stock through the Original Sales Agreement or the Amended and Restated Sales Agreement.

12. Loans Payable

As a result of the acquisition of VCN, the Company acquired interest-free or below-market interest rates loans (0%-1%) extended by Spanish governmental institutions of Ministerio de Ciencia, Innovacion y Universidades (RETOS loan) and ACC10 Generalitat de Catalunya (NEBT loan). The maturities of these loans are between 2024 and 2028. As a result of the VCN Acquisition, the Company maintains a restricted cash collateral account of $99,000 relating to the RETOS loan, which is reflected as a non-current asset on the balance sheet.


	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
	Current		Non-current		Current		Non-current

NEBT Loan		8	$	24		8		24
RETOS 2015		54		135		55		138
	$	62	$	159	$	63	$	162

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


2024			62
2025			64
2026			53
2027			33
2028			9
Total			221

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

13. Commitments and Contingencies

The Company’s existing leases as of March 31, 2024 for its U.S. and Spanish facilities are classified as operating leases. During the quarter ended June 30, 2021, the Company renewed its Rockville, MD facility lease by entering into a Second Lease Amendment which extends the lease term for 63 months beginning on September 1, 2022 and ending on December 31, 2027 at stated rental rates and including a 3-month rent abatement. The Second Amendment also has options for a Tenant Improvement Allowance and a Second Extension Term. The Second Extension Term is offered at market rates and there is no economic incentive for the lessee, therefore the Company has determined that it is not part of the original lease term.

The Company also leases research and office facilities in Barcelona, Spain for its 100 percent owned Theriva S.L. subsidiary. 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. to lease research and office facilities at a new location in Parets del Valles (Barcelona) from the former owner of Theriva S.L. This lease was executed for an initial term to begin in January 2023 until October 2026, with an option to renew for an additional five years. On January 15, 2023, Theriva S.L. 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 months ended March 31, 2024 and 2023 approximated $158,000 and $144,000, respectively. For the Barcelona lease, the day one non-cash addition of right of use assets due to adoption of ASC 842 was $937,000.

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


Future undiscounted cash flow for the years ending December 31,

2024		497
2025		673
2026		588
2027		368
Total		2,126

Discount factor		(329)
Operating lease liability		1,797
Operating lease liability – current		(498)
Operating lease liability – long term	$	1,299

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Theriva Biologics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

13. Commitments and Contingencies – (continued)

Risks and Uncertainties

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. The Company is actively monitoring the effects that these disruptions and increasing inflation could have on its operations.

Through the VCN Acquisition, the Company has operations in Spain related to conducting research and development, manufacturing, and clinical trials in Western European countries. The invasion of Ukraine by Russia, the war in the Middle East, and the retaliatory measures that have been taken, or could be taken in the future, by the United States, NATO, and other countries have created global security concerns that could result in a regional conflict and otherwise have a lasting impact on regional and global economies, any or all of which could disrupt the Company’s supply chain, and despite the fact that it currently does not plan any clinical trials in Eastern Europe, may adversely impact the cost and conduct of R&D, manufacturing, and international clinical trials of its product candidates.

14. Related Party

On December 14, 2023 the Company approved the retention of MaryAnn Shallcross for compensation of $152,000, a bonus of $70,000 and the grant of an option to purchase 75,000 shares of common stock having a value of $30,000. During the three months ended March 31, 2024, Ms. Shallcross had $38,000 in compensation expense.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q, and our audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in our 2023 Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Our actual results and the timing of events could differ materially from those expressed or implied by the forward-looking statements due to important factors and risks including, but not limited to, those set forth below under “Risk Factors” and elsewhere herein, and those identified under Part I, Item 1A of our 2023 Form 10-K.

Overview

We are a diversified clinical-stage company developing therapeutics designed to treat cancer and related diseases in areas of high unmet need. As a result of the acquisition in March 2022 of Theriva Biologics, S.L. (“VCN”, formerly named VCN Biosciences, S.L.), described in more detail below (the “Acquisition”), we began transitioning our strategic focus to oncology, which is now our primary focus, 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. Our lead product candidate, VCN-01, a clinical stage oncolytic human adenovirus that is modified to express an enzyme, PH20 hyaluronidase, is currently being evaluated in a Phase 2 clinical study for the treatment of pancreatic cancer, and has recently been used to treat patients in a Phase 1 clinical study for the treatment of retinoblastoma, and a Phase 1 clinical study for the treatment of solid tumors. Additionally, it has also been tested in several other indications including a Phase 1 clinical study for the treatment of head and neck squamous cell carcinoma.

Prior to the Acquisition, our focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases which included our clinical development candidates: (1) SYN-004 (ribaxamase) which is designed to degrade certain commonly used intravenous (IV) beta-lactam antibiotics within the GI tract to prevent microbiome damage, thereby preventing overgrowth and infection by pathogenic organisms such Clostridioides difficile infection (CDI) and vancomycin resistant Enterococci (VRE), and reducing the incidence and severity of acute graft-versus-host-disease (aGVHD) in allogeneic hematopoietic cell transplant (HCT) recipients, and (2) SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under cGMP conditions and intended to treat both local GI and systemic diseases. As part of our strategic transformation into an oncology focused company, we are exploring value creation options for our SYN-004 and SYN-020 assets, including out-licensing or partnering.

Our Current Product Pipeline

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*Based on management’s current beliefs and expectations

allo-HCT allogeneic hematopoietic cell transplant. CPI immune checkpoint inhibitor. HNSCC head and neck squamous cell carcinoma. IV intravenous. IVit intravitreal. ODD Orphan Drug Designation. For other abbreviations see the text.

¹Additional products with preclinical proof-of-concept include SYN-006 (carbapenemase) to prevent aGVHD and infection by carbapenem resistant enterococci and SYN-007 (ribaxamase) DR to prevent antibiotic associated diarrhea with oral β-lactam antibiotics.

²Depending on funding/partnership. SYN-004 may enter an FDA-agreed Phase 3 clinical trial for the treatment of CDI.

³We have an option-license agreement with Massachusetts General Hospital to develop SYN-020 in several potential indications related to inflammation and gut barrier dysfunction.

Recent Clinical Developments

On February 7, 2024, we announced that the Independent Data Monitoring Committee (IDMC) recommended the continuation of enrollment as planned into VIRAGE, a multinational, Phase 2b, randomized, open-label, controlled clinical trial evaluating VCN-01 in combination with standard-of-care chemotherapy (gemcitabine/nab-paclitaxel) as a first-line therapy for patients with metastatic pancreatic ductal adenocarcinoma (PDAC).

According to the IDMC's comprehensive assessment of clinical data from patients enrolled across 6 sites open in the U.S. and 9 sites open in Spain, the ongoing Phase 2b trial will continue without any changes to the protocol. No safety concerns were raised based on the evaluation of data presented at the IDMC meeting. Intravenous VCN-01 has been well tolerated and demonstrated a safety profile consistent with prior clinical trials. Importantly, no additional toxicities were observed in patients receiving a second dose of VCN-01, providing the first clinical evidence of the feasibility of repeated systemic dosing. VIRAGE is expected to complete enrollment in the third quarter of 2024.

Our Current Oncology-Focused Pipeline

Oncolytic Viruses

Our oncology platform is based on oncolytic virotherapy (“OV therapy”), which exploits the ability of certain viruses to kill tumor cells and trigger an anti-tumor immune response. This novel class of anticancer agents has unique mechanisms of action compared to other cancer drugs. Oncolytic viruses exploit the fact that cancer cells contain mutations that cause them to lose growth control and form tumors. Once inside a tumor cell, oncolytic viruses exploit the tumor cell machinery to generate thousands of additional copies of the virus, which then kill the tumor cell and spread to neighboring cells, causing a chain reaction of cell killing. This infection and tumor cell killing by OVs also alerts the immune system, which can then attack the virus infected tumor cells to help destroy the tumor in some instances.

Our OV product candidates are engineered to efficiently infect and selectively replicate to a high extent in tumor cells versus normal host cells, which enables intravenous delivery. By contrast, many other oncolytic viruses in clinical development today are administered by direct injection into the tumor. Intravenous delivery has the potential to expand the therapeutic effect of OVs because the virus can infect both the primary tumor and tumor metastases throughout the body.

Our first product candidate, VCN-01, is a clinical stage oncolytic human adenovirus that is modified to express an enzyme, PH20 hyaluronidase, that degrades hyaluronan in the tumor stroma, which helps the virus and other molecules to penetrate and spread throughout the tumor. VCN-01 can be used alone or in combination with other cancer therapies, such as chemotherapy and immunotherapy, for difficult to treat cancers. An expanding intellectual property portfolio supports our oncology programs, and because our products are characterized as biologics with Orphan Drug designation in our target indications, they will be further protected by data and/or market exclusivity in major markets.

VCN-01 has been administered to 125 patients across multiple Phase 1 clinical trials and Phase 2 VIRAGE trial, including patients with pancreatic cancer, head and neck squamous cell carcinoma, ovarian carcinoma, colorectal cancer, and retinoblastoma.

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Current clinical update

We are currently conducting a Phase 2 trial of intravenous VCN-01 with or without nab-paclitaxel plus gemcitabine in patients with PDAC. Additional investigator sponsored studies comprise a Phase 1 trial evaluating intravitreal VCN-01 in patients with retinoblastoma, a Phase 1 trial combining VCN-01 with huCART-meso cells in patients with pancreatic or serous epithelial ovarian cancer, and a Phase 1 trial evaluating the intravenous administration of VCN-01 in patients prior to surgical resection of high-grade brain tumors. Additionally, the Clinical Study Report is being prepared for the Phase 1 Trial of intravenous VCN-01 in combination with durvalumab in subjects with recurrent/ metastatic squamous cell carcinoma of the head and neck (mSCCHN).

Phase 1 Clinical Trials in PDAC

The safety, tolerability, and potential dosing regimens for VCN-01 in patients with PDAC or colorectal cancer were evaluated in Phase 1 clinical trials evaluating intratumoral (n=8; NCT02045589) and intravenous (n= 42; NCT02045602) VCN-01 either alone or in combination with gemcitabine ± nab-paclitaxel (published in J. Immunother. Cancer 2021 Nov;9(11):e003254 and J. Immunother. Cancer 2022 Mar;10(3):e003255, respectively). Intravenous VCN-01 was found to have an acceptable safety/tolerability profile in PDAC and colorectal cancer patients and demonstrated compelling biochemical and clinical outcomes that enabled the advancement of VCN-01 into Phase 2 clinical trial in patients with metastatic PDAC.

Phase 2 Trial of intravenous VCN-01 with or without nab-paclitaxel plus gemcitabine in patients with PDAC

In January 2023, we dosed the first patients in VIRAGE, the Phase 2b randomized, open-label, placebo-controlled, multicenter clinical trial of systemically administered VCN-01 in combination with standard-of-care (SoC) chemotherapy (gemcitabine/nab-paclitaxel) as a first line therapy for patients with newly-diagnosed metastatic pancreatic ductal adenocarcinoma. The study is expected to enroll 92 patients and be conducted at approximately 17 sites in the US and EU. Two doses of VCN-01 are included in the treatment arm: the 1st dose is administered on day 1, then one week later 3 cycles of gemcitabine and nab-paclitaxel as standard of care is administered. The second VCN-01 dose is administered 7 days before the 4th cycle of chemotherapy (approximately 90 days after the first VCN-01 dose), followed by additional cycles of gemcitabine/nab-paclitaxel chemotherapy.

Patient dosing was initiated in the U.S. in July 2023 and the nineteen patients have received their second doses of intravenous VCN-01, which were well tolerated and demonstrated the expected VCN-01 safety profile.

On April 25, 2024, we announced the upcoming presentation, at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting, of a trial-in-progress poster discussing the design of VIRAGE, our Phase 2b Trial of Systemically Administered VCN-01 in Combination with Chemotherapy in Pancreatic Ductal Adenocarcinoma.

Retinoblastoma

Phase 1 Trial of intravitreal VCN-01 in patients with retinoblastoma

During the third quarter of 2017, VCN entered into a Clinical Trial Agreement with Hospital Sant Joan de Déu (Barcelona, Spain) to conduct an investigator sponsored Phase 1 clinical study evaluating the safety and tolerability of two intravitreal injections of VCN-01 in patients with intraocular retinoblastoma refractory to systemic, intra-arterial or intravitreal chemotherapy, or radiotherapy, in whom enucleation was the only recommended treatment (NCT03284268). Patients received two intravitreal injections of VCN-01, 14 days

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apart, at a dose of either 2 x 10⁹ vp/eye (n=1) or 2 x 10¹⁰ vp/eye (n=8). Enrollment and dosing in this study have been completed and patient follow-up is expected to complete in the second quarter of 2024. On April 23, 2024, we announced positive topline data from this study, with agreement by the study Monitoring Committee that the study had a positive outcome.

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VCN-01 was well tolerated after intravitreal administration at the 2 doses and the most frequently reported treatment-related adverse events were Grade 1 or 2. There were no dose limiting toxicities and no ocular or systemic toxicities equal to or greater than Grade 3 during the evaluation period.

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Some degree of ocular inflammation and associated turbidity was observed after VCN-01 injection. Inflammation was managed, and vitreous haze improved in some cases, by local and systemic administration of anti-inflammatory drugs.

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VCN-01 does not appear to change the retinal function, and selective VCN-01 replication in retinoblastoma cells has been observed by immunohistochemical analysis.

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Replication within retinoblastoma tumors over time was detected

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intravitreal VCN-01 demonstrated promising antitumor activity:

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Four patients presented a response characterized by unequivocal improvement in vitreous seed density.

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Eye enucleation was avoided in 3 patients to date, one of whom has retained their eye after 4 years of follow-up.

Per the terms of the clinical trial agreement, the determination by the study Monitoring Committee that the study had a positive outcome means Theriva will pay to Hospital Sant Joan de Déu the amount of three hundred twenty thousand Euros (€320,000) or $345,000. In exchange, Theriva will receive an exclusive, worldwide technology license, and related patents from Hospital Sant Joan de Déu for the treatment of pediatric patients with advanced retinoblastoma.

A pre-IND meeting with the FDA was held on December 19, 2023 to discuss the path forward for VCN-01 as an adjunct to chemotherapy in pediatric patients with advanced retinoblastoma. The FDA provided some guidance on the potential endpoints and patient population for an advanced clinical trial and encouraged submission of a formal protocol under a US IND in order to provide more detailed commentary.

Phase 1 Trial of intravenous VCN-01 in Combination with Durvalumab in Subjects with Recurrent/ Metastatic SCCHN

In February 2019, VCN entered into a Clinical Trial Agreement with Catalan Institute of Oncology (ICO) (Spain) to conduct an investigator sponsored Phase 1 clinical study to evaluate the safety, tolerability and RP2D of a single intravenous injection of VCN-01 combined with durvalumab in two administration regimens: VCN-01 concomitantly with durvalumab, or sequentially with durvalumab starting two weeks after VCN-01 administration (NCT03799744). The study is also designed to evaluate whether VCN-01 treatment can re-sensitize PD-(l)-1 refractory tumors to subsequent anti-PD-L1 therapy. Durvalumab is a human monoclonal antibody (mAb) of the immunoglobulin G (IgG) 1 kappa subclass that inhibits binding of PD-L1. It is marketed as IMFINZI® by AstraZeneca/MedImmune, who supplied the product for its use in the clinical study. This Phase I trial is a multicenter, open label, dose escalation study in patients with histologically confirmed head and neck squamous cell carcinoma from specific sites: oral cavity, oropharynx, larynx or hypopharynx that is recurrent/metastatic (R/M) and not amenable to curative therapy by surgery or radiation. In addition, all patients should have undergone prior exposure to anti-PD-(L) 1 and progressed. Patients are entered at each dose level, according to a planned dose escalation schedule. The treatment is a single intravenous VCN-01 dose combined with concomitant intravenous durvalumab (MEDI4736) 1500 mg Q4W (Arm I) or durvalumab starting two weeks after VCN-01 administration (“sequential schedule”; Arm II). Patient recruitment into Arm I and Arm II was performed concurrently. Intravenous VCN-01 was administered to each patient only once during the trial at the VCN-01 dose level to which they were randomized. Durvalumab was administered Q4W until disease progression, unacceptable toxicity, withdrawal of consent, or another discontinuation criterion. Patient recruitment into the study was completed in February 2022 with a total of 18 patients enrolled. On September 05, 2022 we announced a presentation of initial data from this study in a poster at the European Society for Medical Oncology (ESMO) Congress. The poster reported that treatment with VCN-01 had an acceptable safety profile when administered with durvalumab in the sequential schedule and the most common treatment-related adverse events were dose-dependent and reversible pyrexia, flu-like symptoms and increases in liver transaminases. Sustained blood levels of VCN-01 viral genomes and increased serum hyaluronidase levels were maintained for over six weeks and analysis of tumor samples showed an increase in CD8 T cells (a marker of tumor inflammation); upregulation of PD-L1; and downregulation of matrix-related

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pathways after VCN-01 administration. The last patients in this study are currently being followed for overall survival and patent samples are being analyzed to evaluate potential VCN-01 pharmacodynamic effects.

On October 16, 2023, we presented additional data from this study in a poster at the European Society for Medical Oncology (ESMO) 2023 Congress held virtually and in Madrid, Spain from October 20-24, 2023. Key data and conclusions featured in the ESMO presentation include:

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20 patients were enrolled with a median of 4 prior lines of therapy, from which six in the concomitant (CS) (single dose of VCN-01 in combination with durvalumab on day 1) and 12 in the sequential (SS) (single dose of VCN-01 on day -14 and durvalumab on day 1) were evaluable for response.

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In the CS cohort at the 3.3×10¹² viral particles (vp) dose, overall survival (OS) was 10.4 months.

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In the SS cohort at the 3.3×10¹²vp dose OS was 15.5 months, whereas in the SS cohort at the 1×10¹³ vp dose OS was 17.3 months.

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11 patients (61.1%) were alive >12 months (2 in CS; 5 in SS at 3.3×10¹²vp, 4 in SS at 1×10¹³ vp).

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In spite of the advanced stage of the disease, and a global objective response rate for the trial of 5.5%, most of the patients appeared to benefit from subsequent treatment, with 2 patients showing complete responses to palliative chemotherapy and at least one patient still alive 4 years after entering the study.

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Biological activity: Patients showed VCN-01 replication and increased serum hyaluronidase levels were maintained for over six weeks.

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Observed an increase in CD8 T cells, a marker of tumor inflammation and an upregulation of PD-L1 in tumors.

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Increase of PDL1-CPS (16/21; p=0.013) and CD8 T-cells (12/21; p=0.007) from baseline were found in tumor biopsies.

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There was a statistical significant correlation between OS observed in patients and CPS on day 8 (p=0.005).

●	Phase 1 Trial evaluating the safety and feasibility of huCART-meso cells when given in combination with VCN-01

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In July 2021, VCN entered into a Clinical Trial Agreement with the University of Pennsylvania (Philadelphia) to conduct an investigator sponsored Phase 1 clinical study to evaluate the safety, tolerability and feasibility of intravenous administration of VCN-01 in combination with lentiviral transduced huCART-meso cells (developed by the laboratory of Dr. Carl June) in patients with histologically confirmed unresectable or metastatic pancreatic adenocarcinoma and serous epithelial ovarian cancer (NCT05057715). This is a Phase I study evaluating the combination of VCN-01 when given in combination with huCART-meso cells in a dose-escalation design in two cohorts (N = 3-6), where patients receive VCN-01 as a single IV infusion (at 3.3x10¹² or 1x10¹³ vp) on Day 0, followed by a single dose of 5x10⁷ huCART-meso cells on Day 14 via IV infusion. huCART-meso cells are modified T-cells targeting the mesothelin antigen, which is frequently expressed in multiple tumor types, particularly in pancreatic and ovarian cancers. Dr. June’s previous clinical studies have shown that huCART-meso cells encounter significant challenges in the tumor microenvironment, including immunosuppressive cells and soluble factors as well as metabolic restrictions. Initial VCN-01 clinical data from the studies described above suggest that administration of VCN-01 may increase tumor immunogenicity and improve access of the huCART-meso cells to tumor cells. This Phase I study will evaluate the safety and tolerability of the VCN-01 huCART-meso cell combination and test the hypothesis that administration of VCN-01 may enhance the potential antitumor effects of the co-administered huCART-meso cells.

●	On July 8, 2022, we were notified that the first patient to be dosed with VCN-01 had passed the safety evaluation period in this study. The study is on-going.

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On June 22, 2023, at their Cellicon Valley conference, and again at the Society for Immunotherapy of Cancer (SITC) meeting in San Diego, CA on November 03, 2023, and the International Oncolytic Virotherapy Conference (IOVC2023) in Calgary on November 13 2023, University of Pennsylvania investigators presented preliminary clinical safety and pharmacokinetic data from this study highlighting the feasibility of administering VCN-01 in sequence with huCART-meso cells in pancreatic and ovarian cancer patients. VCN-01 persistence was suggestive of tumor infection and active replication. The peak and duration of huCART-meso T cells in the peripheral blood as well as duration of stable disease in evaluable patients showed encouraging trends.

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●	The study may test higher doses of VCN-01 and interrogate tumor biopsies to gain further insights. The results will inform and guide optimization of the combination of CAR T cells with oncolytic virus.

Phase 1 Trial evaluating the intravenous administration of VCN-01 in patients prior to surgical resection of high-grade brain tumors

In the second quarter of 2021, VCN entered into a Clinical Trial Agreement with the University of Leeds (UK) to sponsor a proof-of-concept Phase 1 clinical study to evaluate whether intravenously administered VCN-01 can cross the blood-brain barrier and infect the target brain tumor. This is an open-label, non-randomized, single center study of VCN-01 given intravenously at a dose of 1x10¹³ virus particles to patients prior to planned surgery for recurrent high-grade primary or metastatic brain tumors. We believe that the intravenous delivery of anti-cancer therapy to brain tumors, if effective, may enable the treatment of systemically disseminated brain metastases and may allow for reduction in the need to use neurosurgery to administer the drugs. This study aims to assess the presence of VCN-01 within the resected surgical specimen after systemic VCN-01 delivery and determine the safety of intravenous VCN-01 in patients with recurrent high-grade glioma or brain metastases. By confirming the presence of VCN-01 in high grade brain tumors following intravenous delivery, this study may pave the way for larger trials to study VCN-01 efficacy, both as a monotherapy and in combination with PD-1/PD-L1 blockade. This trial has already received approval from Medicines & Healthcare Products Regulatory Agency (MHRA) from UK Government.

On January 9, 2023, we issued a press release announcing that the first patient was dosed in this study and recruitment is on-going.

Our Current Gastrointestinal (GI) and Microbiome-Focused Pipeline

Our SYN-004 (ribaxamase) and SYN-020 clinical programs are focused on the gastrointestinal tract (GI) and the gut microbiome, which is home to billions of microbial species and composed of a natural balance of both “good” beneficial species and potentially “bad” pathogenic species. When the natural balance or normal function of these microbial species is disrupted, a person’s health can be compromised. All of our programs are supported by our growing intellectual property portfolio. We are maintaining and building our patent portfolio through: filing new patent applications; prosecuting existing applications; and licensing and acquiring new patents and patent applications.

SYN-004 (ribaxamase) — Prevention of antibiotic-mediated microbiome damage, thereby preventing overgrowth and infection by pathogenic organisms such as Clostridioides difficile infection (CDI) and vancomycin resistant Enterococci (VRE), and reducing the incidence and severity of acute graft-versus-host disease (aGVHD) in allogeneic HCT recipients

SYN-004 (ribaxamase) is a proprietary oral capsule prophylactic therapy designed to degrade certain IV beta-lactam antibiotics excreted into the GI tract and thereby maintain the natural balance of the gut microbiome. Preventing beta-lactam damage to the gut microbiome has a range of potential therapeutic outcomes, including prevention of CDI, suppression of the overgrowth of pathogenic species (particularly antimicrobial-resistant organisms) and potentially reducing the incidence and/or severity of aGVHD in allogeneic hematopoietic cell transplant (HCT) patients. SYN-004 (ribaxamase) 75 mg capsules are intended to be administered orally while patients are administered certain IV beta-lactam antibiotics. The capsule dosage form is designed to release the SYN-004 (ribaxamase) enzyme into proximal small intestine, where it has been shown to degrade beta-lactam antibiotics in the GI tract without altering systemic antibiotic levels. Beta-lactam antibiotics are a mainstay in hospital infection management and include the commonly used penicillin and cephalosporin classes of antibiotics.

Clostridioides difficile Infection

Clostridioides difficile (formerly known as Clostridium difficile and often called C. difficile or CDI) is a leading type of hospital acquired infection and is frequently associated with IV beta-lactam antibiotic treatment. The Centers for Disease Control and Prevention (CDC) identified C. difficile as an “urgent public health threat,” particularly given its resistance to many drugs used to treat other infections. CDI is a major unintended risk associated with the prophylactic or therapeutic use of IV antibiotics, which may adversely alter the natural balance of microflora that normally protect the GI tract, leading to C. difficile overgrowth and infection. Other risk factors for CDI include hospitalization, prolonged length of stay (estimated at 7 days), underlying illness, and immune-compromising conditions including the administration of chemotherapy and advanced age. According to a paper published in BMC Infectious Diseases (Desai K et al. BMC Infect Dis. 2016; 16: 303) the economic cost of CDI was approximately $5.4 billion in 2016 ($4.7 billion in healthcare settings; $725 million in the community) in the U.S., mostly due to hospitalizations.

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Phase 1b/2a Clinical Study in Allogeneic HCT Recipients

In August 2019, we entered into a Clinical Trial Agreement (CTA) with the Washington University School of Medicine (Washington University) to conduct a Phase 1b/2a clinical trial of SYN-004 (ribaxamase). Under the terms of this agreement, we serve as the sponsor of the study and supply SYN-004 (ribaxamase). Dr. Erik R. Dubberke, Professor of Medicine and Clinical Director, Transplant Infectious Diseases at Washington University and a member of the SYN-004 (ribaxamase) steering committee serves as the principal investigator of the clinical trial in collaboration with his Washington University colleague Dr. Mark A. Schroeder, Associate Professor of Medicine, Division of Oncology, Bone Marrow Transplantation and Leukemia.

The Phase 1b/2a clinical trial will comprise a single center, randomized, double-blinded, placebo-controlled clinical trial of oral SYN-004 (ribaxamase) in up to 36 evaluable adult allogeneic HCT recipients. The goal of this study is to evaluate the safety, tolerability and potential absorption into the systemic circulation (if any) of oral SYN-004 (ribaxamase; 150 mg four times daily) administered to allogeneic HCT recipients who receive an IV carbapenem or beta-lactam antibiotic to treat fever. Study participants will be enrolled into three sequential cohorts administered a different study-assigned IV antibiotic. Each cohort seeks to complete eight evaluable participants treated with SYN-004 (ribaxamase) and four evaluable participants treated with placebo. Safety and pharmacokinetic data for each cohort will be reviewed by an independent Data and Safety Monitoring Committee, which will make a recommendation on whether to proceed to the next IV antibiotic cohort. The study will also evaluate potential protective effects of SYN-004 on the gut microbiome as well as generate preliminary information on potential therapeutic benefits and patient outcomes of SYN-004 in allogeneic HCT recipients.

To date, we have completed the first of 3 cohorts (Cohort 1) in this study, which enrolled 19 patients who received at least 1 dose of study drug (SYN-004 or Placebo randomized 2:1). Sixteen patients received at least one dose of intravenous (IV) meropenem and 12 of these patients completed sufficient doses of IV meropenem to be evaluable towards the study endpoints. On September 27, 2022, we issued a press release announcing positive outcomes from the Data and Safety Monitoring Committee (“DSMC”) review of results from the first Cohort and their recommendation that the study may proceed to enroll Cohort 2 in which study drug (SYN-004 or Placebo) is administered in combination with the IV beta-lactam antibiotic piperacillin/tazobactam. Enrollment into Cohort 2 has completed and, we expect to announce a data readout for the second cohort during the third quarter of 2024. If recommended by the DSMC review of the second cohort results, enrollment into the third cohort could commence in the second half of 2024.

On February 16, 2023 and April 13, 2023 we announced the presentation of safety and pharmacokinetic data from Cohort 1 of the Phase 1b/2a Clinical Trial of SYN-004 (ribaxamase) in allogeneic hematopoietic cell transplant recipients at the 2023 Tandem Meetings: Transplantation & Cellular Therapy Meetings of ASTCT and CIBMTR and at the European Congress of Clinical Microbiology & Infectious Diseases (ECCMID) respectively.

SYN-020 — Oral Intestinal Alkaline Phosphatase (IAP)

SYN-020 is a quality-controlled, recombinant version of bovine Intestinal Alkaline Phosphatase (IAP) produced under cGMP conditions and formulated for oral delivery. The published literature indicates that IAP functions to diminish GI and systemic inflammation, tighten the gut barrier to diminish “leaky gut,” diminish fat absorption, and promote a healthy microbiome. Despite its broad therapeutic potential, a key hurdle to commercialization has been the high cost of IAP manufacture which is commercially available for as much as $10,000 per gram. We believe we have developed technologies to traverse this hurdle and now have the ability to produce more than 3 grams per liter of SYN-020 and anticipate a cost of roughly a few hundred dollars per gram at commercial scale. Based on the known mechanisms as well as our own supporting animal model data, we intended to initially develop SYN-020 to mitigate the intestinal damage caused by radiation therapy that is routinely used to treat pelvic cancers. While we believe SYN-020 may play a pivotal role in addressing acute and long-term complications associated with radiation exposure to the GI tract, we have also begun planning for potential development of SYN-020 in large market indications with significant unmet medical needs. Such indications include celiac disease, non-alcoholic fatty liver disease (“NAFLD”), and indications to treat and prevent metabolic and inflammatory disorders associated with aging, which are supported by our collaboration with Massachusetts General Hospital (“MGH”).

On June 30, 2020, we submitted an IND application to the FDA in support of an initial indication for the treatment of radiation enteropathy secondary to pelvic cancer therapy. On July 30, 2020, we announced that we received a study-may-proceed letter from the FDA to conduct a Phase 1a single-ascending-dose (“SAD”) study in healthy volunteers designed to evaluate SYN-020 for safety, tolerability and pharmacokinetic parameters(NCT04815993). On April 1, 2021, we announced that enrollment had commenced in the Phase 1 SAD clinical trial of SYN-020. On June 29, 2021, we announced that enrollment, patient dosing and observation had been completed in the Phase 1, open-label, SAD study of SYN-020. The SAD study enrolled 6 healthy adult volunteers into each of four

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cohorts with SYN-020 given orally as single doses ranging from 5 mg to 150 mg. The data demonstrated that SYN-020 maintained a favorable safety profile, was well tolerated at all dose levels, and no adverse events were attributed to the study drug. No serious adverse events were reported.

During the third quarter of 2021 we initiated a Phase 1 clinical study evaluating multiple ascending doses (“MAD”) of SYN-020 (NCT05045833). On October 21, 2021 we announced that patient enrollment, dosing, and observation commenced in the Phase 1 MAD study of SYN-020. The placebo-controlled, blinded study enrolled 32 healthy adult volunteers into four cohorts with SYN-020 administered orally in doses ranging from 5 mg to 75 mg twice daily for 14 days with a follow-up evaluation at day 35. Each cohort included six subjects who received SYN-020 and two who received placebo. On May 10, 2022, we announced positive safety data from the Phase 1 MAD study demonstrating that SYN-020 maintained a favorable safety profile and was well-tolerated across all dose levels. There were a few treatment-related adverse events, and all were mild (grade 1) and resolved without medical intervention. The most common adverse event, constipation, occurred in three out of 24 subjects in the treatment arm and in one out of eight subjects in the placebo arm. No adverse event led to discontinuation of the study drug and there were no serious adverse events. Additionally, fecal SYN-020 analyses verified intestinal bioavailability while plasma levels of SYN-020 were below the limit of quantitation in all samples at all timepoints verifying that SYN-020 was not absorbed into the systemic circulation.

During the second quarter of 2020, we announced that we entered into an agreement with Massachusetts General Hospital (“MGH”) granting us an option for an exclusive license to intellectual property and technology related to the use of IAP to maintain GI and microbiome health, diminish systemic inflammation, and treat age-related diseases. During the second quarter of 2021, we announced an amendment to our option for an exclusive license agreement with MGH to include intellectual property and technology related to the use of SYN-020 to inhibit liver fibrosis in select diseases, including NAFLD. Research published by a team of investigators led by Richard Hodin, MD, Chief of the Massachusetts General Hospital Division of General and Gastrointestinal Surgery and Professor of Surgery, Harvard Medical School, evaluated long-term oral supplementation of IAP, including SYN-020, in mice. Dr. Hodin’s research demonstrated that IAP administration, starting at 10 months of age, slowed the microbiome changes, gut-barrier dysfunction, and gastrointestinal and systemic inflammation that normally accompany aging. Additionally, the IAP administration resulted in improved metabolic profiles in the aged mice, diminished frailty, and extended lifespan. Under the terms of the agreement, we are granted exclusive rights to negotiate a worldwide license with MGH to commercially develop SYN-020 to treat and prevent metabolic and inflammatory diseases associated with aging. If executed, we plan to use this license in the advancement of an expanded clinical development program for SYN-020.

The Phase 1 data from our SAD and MAD studies are intended to support the development of SYN-020 in multiple clinical indications including radiation enteritis, NAFLD, celiac disease, and indications supported by our collaboration with Massachusetts General Hospital. With our transition to an oncology focused Company, we are exploring strategic opportunities to enable advancement of this potentially valuable asset.

Research Programs

VCN-01 + Topoisomerase Inhibitors

On April 22, 2024 we announced the upcoming presentation of a poster at the American Society for Cell and Gene Therapy (ASGCT) 27th Annual Meeting, describing enhanced anti-tumor effects in human pancreatic cancer xenograft-bearing mice treated with lead product candidate VCN-01 and liposomal irinotecan. These data support the potential synergy of VCN-01 and additional first-line pancreatic cancer chemotherapy regimens FOLFIRINOX and NALIRIFOX. Key finding reported in the poster include:

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The combination of VCN-01 + topoisomerase I (topo1) inhibitors, such as liposomal irinotecan, has a tolerable toxicity profile and may improve efficacy in the treatment of human pancreatic cancer.

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Viral protein expression was increased in human pancreatic cancer cell lines when they were exposed to topo1 inhibiting chemotherapeutics, irinotecan, its active metabolite, SN-38, and topotecan.

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Synergy of VCN-01 plus liposomal irinotecan was observed in animals bearing subcutaneous human pancreatic tumors.

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In human pancreatic mouse xenograft models, treatment with VCN-01 at a dose of 4x1010 vp or liposomal irinotecan alone (at both the 10 mg/kg and 5 mg/kg doses) resulted in significant tumor growth inhibition compared to saline.

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Combination therapy with VCN-01 + liposomal irinotecan at either dose displayed significantly reduced tumor growth compared to each treatment alone.

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qPCR analyses performed on tumors collected at end of study confirmed the presence of viral genomes, indicating ongoing transcriptional activity of VCN-01, which is consistent with viral replication for several days after administration.

VCN-11 Albumin Shield™ Technology

VCN-11 is a novel virus that we believe has the potential to extend our OV platform. VCN-11 has been engineered to contain all of the features of VCN-01 as well as an additional modification to include an albumin binding domain (ABD) in the virus capsid. The virus capsid is the target for neutralizing antibodies (NAbs) that are generated by the host immune system to destroy circulating viruses. The presence of an albumin binding domain, however, blocks the binding of most neutralizing antibodies, which allows the virus to reach the tumor following intravenous administration. This “Albumin Shield” works because human blood contains a large amount of albumin to coat the VCN-11 virus. Importantly, this coating of albumin appears to be displaced after the virus reaches tumor cells to infect them. In pre-clinical mouse studies to test the functionality of the “albumin shield”, mice pre-immunized with virus are able to completely neutralize an unmodified OV because they have a large concentration of neutralizing antibodies in their blood. By contrast, viruses containing the albumin binding domain such as VCN-11 are not neutralized and retain their ability to infect and destroy tumor cells. We believe these results support the further development of VCN-11 for tumors in which rapid multi-dosing may be beneficial.

In the second quarter of 2020, VCN had several interactions with Spanish regulatory authorities (AEMPS) to agree on the design of the non-clinical GLP toxicology and biodistribution studies that are required to support a first-in-human clinical trial for VCN-11.

In March 2021, preclinical data obtained with VCN-11 was published (J Control Release. 2021 Apr 10;332:517-528), showing that VCN-11 induced 450 times more cytotoxicity in tumor cells than in normal cells. VCN confirmed VCN-11 hyaluronidase production by measuring the activity of the PH20 enzyme with a hyaluronic acid-degradation assay, and by measuring PH20 activity in VCN-11 infected tumors in vivo. VCN-11 evaded NAbs from different sources and tumor levels of VCN-11 were demonstrated in the presence of high levels of NAbs in vivo, whereas the control virus without ABD was neutralized. VCN-11 showed a low toxicity profile in athymic nude mice and Syrian hamsters, allowing treatments with high doses and fractionated administrations without major toxicities (up to 1.2x10¹¹vp/mouse and 7.5x10¹¹vp/hamster). VCN-11 increased ALT levels on day 3 within an acceptable range that returned to normal levels by day 9. Fractionated intravenous administration of VCN-11 (splitting the dose into two portions administered 4 h apart) appeared to improve VCN-11 circulation kinetics and increase tumor levels. VCN-11 showed antitumor efficacy in the presence of NAbs against Ad5 and itself.

In May 2022, we presented on VCN-11 at the 25th Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT). The presentation included preclinical results showcasing the potential of VCN-11 to balance safety, with no major toxicities observed, and effectively target tumors after intravenous re-administration, even in the presence of high level NAbs. Our internal discovery programs are currently evaluating new oncolytic viruses derived from VCN-11 that may expand the potential efficacy of Albumin Shield viruses.

Intellectual Property

All of our programs are supported by growing patent estates. In total, Theriva Biologics has over 130 U.S. and foreign patents and over 65 U.S. and foreign patents pending. VCN, through assignment or exclusive licenses, controls over 40 U.S. and foreign patents and over 15 U.S. and foreign patents pending.

The SYN-004 (ribaxamase) program is supported by IP that is assigned to Theriva Biologics, namely U.S. and foreign patents (in most major markets, e.g. Europe (including Germany, Great Britain and France), Japan, China and Canada, among others) and U.S. and foreign patents pending (in most major markets, e.g. Europe (including Germany, Great Britain and France), Japan, China and Canada, among others). For instance, U.S. Patent Nos. 8,894,994 and 9,587,234, which include claims to compositions of matter and pharmaceutical compositions of beta-lactamases, including SYN-004 (ribaxamase), have patent terms to at least 2031. Further, U.S. Patent 9,301,995 and 9,301,996, both of which will expire in at least 2031, cover various uses of beta-lactamases, including SYN-004 (ribaxamase), in protecting the microbiome, and U.S. Patent Nos. 9,290,754, 9,376,673, 9,404,103, 9,464,280, and 9,695,409 which will expire in at least 2035, covers further beta-lactamase compositions of matter related to SYN-004 (ribaxamase).

The SYN-020 (oral intestinal alkaline phosphatase (IAP)) program is supported by IP that is assigned to Theriva Biologics, namely U.S. and foreign patents and patent applications (in many major markets, e.g. Europe, China, Japan, Korea, Canada, and Australia). These

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patents and patent applications, which cover various formulations, medical uses and manufacture of SYN-020, are expected to expire in 2038-2040, without taking potential patent term extensions or patent term adjustment into account.

The VCN-01 and VCN-11 programs are supported by U.S. and foreign patents and patent applications that are assigned to VCN or exclusively licensed from Fundació Privada Institut d’Investigacio Biomedica de Bellvitge (IDIBELL), Institut Catala d’Oncologia (ICO), and Hospital Sant Joan de Déu in Barcelona. The patents and patent applications include U.S. patents and foreign patents (in most major markets, e.g. Europe, China, Japan, Korea, Canada, Israel, Mexico, Russia, and Australia) and U.S. and foreign patents pending (in most major markets, e.g. Europe, China, Korea, Canada, Mexico, and India). The patents and patent applications cover compositions of matter and pharmaceutical compositions of oncolytic adenoviruses and various medical uses of the same. For instance, U.S. Patent No. 10,316,065, which expires in 2030 without taking potential patent term extensions or patent term adjustment into account, provides composition of matter and pharmaceutical composition coverage for a genus of engineered oncolytic adenovirus suitable for the treatment of solid tumors. Other patents and patent applications, if granted, will provide protection to 2037 without taking potential patent term extensions or patent term adjustment into account.

Our goal is to (i) obtain, maintain, and enforce patent protection for our products, formulations, processes, methods, and other proprietary technologies, (ii) preserve our trade secrets, and (iii) operate without infringing on the proprietary rights of other parties worldwide. We seek, where appropriate, the broadest intellectual property protection for product candidates, proprietary information, and proprietary technology through a combination of contractual arrangements and patents.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results may differ from the original estimates, requiring adjustments to these balances in future periods.

There are accounting policies, each of which requires significant judgments and estimates on the part of management, that we believe are significant to the presentation of our consolidated financial statements. The most significant accounting estimates relate to goodwill and IPR&D, research and development costs, contingent consideration, and impairment of long-lived assets.

Goodwill and IPR&D

We classify intangible assets into two categories: (1) intangible assets with indefinite lives not subject to amortization and (2) goodwill. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with their carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. We test the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate evidence a potential impairment exists, using a fair value-based test. If a reporting unit’s carrying value exceeds its fair value, then we will record a goodwill impairment charge for the excess amount.

IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that we acquire, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if we become aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, we may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value.

Goodwill represents the excess of the purchase price paid when we acquired VCN in March 2022, over the fair values of the acquired tangible or intangible assets and assumed liabilities. We will conduct an impairment test of goodwill on an annual basis as of October 1

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of each year and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce our fair value below our net equity value.

Contingent Consideration

Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. We estimate the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. The milestone payments will be made upon the achievement of clinical and commercialization milestones. Subsequent to the date of acquisition, we reassess the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets.

Long-Lived Assets

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimating of undiscounted cash flows is done at the lowest possible level for which we can identify assets. If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of assets exceeds the fair value of the assets.

Acquired In-Process Research & Development represents the fair value assigned to those research and development projects that were acquired in a business combination for which the related products have not received regulatory approval and have no alternative future use. IPR&D is capitalized at its fair value as an indefinite-lived intangible asset, and any development costs incurred after the acquisition are expensed as incurred. Upon achieving regulatory approval or commercial viability for the related product, the indefinite-lived intangible asset is accounted for as a finite-lived asset and is amortized on a straight-line basis over the estimated useful life. If the project is not completed or is terminated or abandoned, the Company may have an impairment related to the IPR&D which is charged to expense. Indefinite-lived intangible assets are tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may be impaired. Impairment is calculated as the excess of the asset’s carrying value over its fair value.

Research and Development Costs

We expense research and development costs associated with developmental products not yet approved by the FDA to research and development expense as incurred. Research and development costs consist primarily of license fees (including upfront payments), milestone payments, manufacturing costs, salaries, stock-based compensation and related employee costs, fees paid to consultants and outside service providers for laboratory development, legal expenses resulting from intellectual property prosecution and other expenses relating to the design, development, testing and enhancement of our product candidates. Research and development expenses include external contract research organization (“CRO”) services. Additionally, the grant income is used to offset research and development costs. We make payments to the CROs based on agreed upon terms and may include payments in advance of study services. We review and accrue CRO expenses based on services performed and rely on estimates of those costs applicable to the stage of completion of study as provided by the CRO. Accrued CRO costs are subject to revisions as such studies progress to completion. At March 31, 2024 and 2023, we have accrued CRO expenses of $2.4 million and $0.8 million, respectively, that are included in accrued expenses. As of March 31, 2024 and 2023, we have prepaid CRO costs of $0.4 million and $2.5 million, respectively, that are included in prepaid expenses.

Results of Operations

Three Months Ended March 31, 2024 and 2023

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General and Administrative Expenses

General and administrative expenses decreased to $1.9 million for the three months ended March 31, 2024, from $2.2 million for the three months ended March 31, 2023. This decrease of 12% is primarily comprised of the decrease in salary costs, consulting, legal fees, and lower director and officer insurance, offset by an increase in fair value of the contingent consideration adjustment. The charge related to stock-based compensation expense was $101,000 for the three months ended March 31, 2024, compared to $87,000 for the three months ended March 31, 2023.

Research and Development Expenses

Research and development expenses increased to $3.5 million for the three months ended March 31, 2024, from approximately $3.0 million for the three months ended March 31, 2023. This increase of 16% is primarily the result of higher clinical trial expenses related to our VIRAGE Phase 2 clinical trial of VCN-01 in PDAC, increased expenses related to the Phase 1 trial of intravitreal VCN-01 in patients with retinoblastoma, and increased expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients, offset by lower expenses related to our Phase 1a clinical trial of SYN-020. We anticipate research and development expense to increase as we continue enrollment in our VIRAGE Phase 2 clinical trial of VCN-01 in PDAC, advance our VCN-01 program in retinoblastoma, expand GMP manufacturing activities for VCN-01, and continue supporting our VCN-11 and other preclinical and discovery initiatives. The charge related to stock-based compensation expense was $58,000 for the three months ended March 31, 2024, compared to $39,000 related to stock-based compensation expense for the three months ended March 31, 2023.

The following table sets forth our research and development expenses directly related to our product candidates for the three months ended March 31, 2024 and 2023. These direct expenses were external costs associated with preclinical studies and clinical trials. Indirect research and development expenses related to employee costs, facilities, stock-based compensation and research and development support services that are not directly allocated to specific product candidates.


	March 31,		March 31,
Therapeutic Areas	2024		2023
VCN-01	$	1,930	$	1,655
Ribaxamase		278		196
SYN-020		33		65
Other therapeutic areas		96		60

Total direct costs		2,337		1,976
Total indirect costs		1,122		1,001

Total Research and Development	$	3,459	$	2,977

Other Income/Expense

Other income was $227,000 for the three months ended March 31, 2024 compared to other income of $370,000 for the three months ended March 31, 2023. Other income for the three months ended March 31, 2024 is primarily comprised of interest income of $228,000 and an exchange loss of $1,000. Other income for the three months ended March 31, 2023 is primarily comprised of interest income of $364,000 and exchange gain of $6,000.

Net Loss Attributable to Common Stockholders

Our net loss attributable to common stockholders was approximately $5.2 million, or $0.30 per basic and diluted common share for the three months ended March 31, 2024, compared to a net loss of approximately $4.5 million, or $0.30 per basic common share and diluted common share for the three months ended March 31, 2023.

Liquidity and Capital Resources

As of March 31, 2024, the Company has a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, the Company has experienced significant losses and incurred negative cash flows

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since inception. We have incurred an accumulated deficit of $314.5 million as of March 31, 2024, and expect to continue to incur losses in the foreseeable future with the recognition of revenue being contingent on successful phase 3 clinical trials and requisite approvals by the FDA or foreign equivalents.

Our cash and cash equivalents totaled $18.3 million as of March 31, 2024, a decrease of $4.9 million from December 31, 2023. During the year ended December 31, 2023 and quarter ended March 31, 2024, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $18.3 million and $5.2 million for the year ended December 31, 2023 and the quarter ended March 31, 2024, respectively.

With our cash position of $16.4 million in early May 2024, we believe we will be able to fund our operations through the fourth quarter of 2024 and into the first quarter of 2025. Following the anticipated completion of our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients, our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, and the preclinical studies of VCN-11, and related discovery initiatives, we will need to obtain additional funds for future clinical trials. We anticipate that our future clinical trials will be much larger in size and require larger cash expenditures than the aforementioned clinical programs. We do not have any committed sources of financing for future clinical trials at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all. Management believes its plan, which includes the advancement of VCN-01 and the additional testing of SYN-004 (ribaxamase) will allow us to meet our financial obligations, further advance key products, and maintain our planned operations. However, the amount of additional capital needed by us will also depend upon the costs to advance our VCN-01 clinical programs and whether we continue to develop SYN-004 internally, or out-license or partner such development. If necessary, we may attempt to utilize the at the market sales facility (the “ATM”) or seek to raise additional capital in other financing transactions, neither of which is guaranteed. Use of the ATM is limited by certain restrictions and management’s plan does not rely on additional capital from either of these sources. If we are not able to obtain additional capital (which is not assured at this time), our long-term business plan may not be accomplished, and we may be forced to cease certain development activities. More specifically, the completion of any later stage clinical trial will require significant financing or a significant partnership.

Historically, we have financed our operations primarily through public and private sales of our securities, and we expect to continue to seek and obtain additional capital in a similar manner. During the year ended December 31, 2023, our only source of cash was from sales of our common stock through the ATM pursuant to which we sold 2.0 million shares of our stock for net proceeds of $2.2 million.

There can be no assurance that we will be able to continue to raise funds through the sale of shares of common stock through the ATM or other equity financings. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted. If we are not able to obtain funding for future clinical trials when needed, we will be unable to carry out our business plan and we will be forced to delay the initiation of future clinical trials until such time as we obtain adequate financing.

We have spent, and expect to continue to spend, a substantial amount of funds in connection with implementing our business strategy, including our planned product development efforts, preparation for our planned clinical trials, performance of clinical trials and our research and discovery efforts. Based on our current plans, our cash and cash equivalents will not be sufficient to enable us to meet our near term or long-term expected plans as it is anticipated that we will not have enough cash to continue our operations for the next twelve months from the date of the filing of this Quarterly Report on Form 10-Q. We will be required to obtain additional funding in order to continue the development of certain product candidates within the anticipated time periods (including initiation of planned clinical trials), if at all, and to continue to fund operations at the current cash expenditure levels. We do anticipate that our current cash or $16.4 million as of May 1, 2024 will allow us to cover overhead costs, manufacturing costs for clinical supply, commercial scale up costs and limited research efforts, including completing our funding requirements for our ongoing Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients for the prevention of aGVHD, our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies of VCN-11 and related discovery initiatives, and to fund our committed obligations under the VCN Purchase Agreement for the VCN Acquisition.. 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. 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. Our notes to the consolidated financial statements contain an explanatory paragraph referring to our recurring and continuing losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. We cannot provide any assurance that we will be able to obtain the required funding to achieve our current business plan, obtain the required regulatory approvals for our product candidates or complete additional corporate partnering or acquisition transactions in order to commercialize such product

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

Our ability to continue as a going concern is dependent upon our ability to raise additional capital. Our cash and cash equivalents will not be sufficient to enable us to meet our near term or long-term expected plans, including initiation or completion of future registrational studies for VCN-01, any potential future trials of SYN-004 including Phase 3 clinical programs of SYN-004 (ribaxamase) for prevention of CDI and/or the prevention of aGVHD in allogeneic HCT recipients, or later-stage clinical trials of SYN-020. Therefore, we do not intend to commence future new studies of VCN-01, SYN-004 (ribaxamase) or SYN-020 until we are confident that we have funding necessary to complete such trials. We are actively pursuing additional equity or debt financing, in the form of either a private placement or a public offering and have been in ongoing discussions with strategic institutional investors and investment banks with respect to such possible offerings. However, we do not currently have commitments from any third parties to provide us with capital. Potential sources of financing that we are pursuing include strategic relationships, public or private sales of our equity (including through the ATM) or debt and other sources. Such additional financing opportunities might not be available to the Company when and if needed, on acceptable terms or at all. We cannot assure that we will meet the requirements for use of the ATM especially in light of the fact that we are currently limited by rules of the SEC as to the number of shares of common stock that we can sell pursuant to the ATM due to the market value of our common stock held by non-affiliates. Even if we meet the requirements for use of the ATM, there can be no assurance that we will be able to to raise funds through the sale of shares of common stock through the ATM. Additionally, we may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. If we are unable to obtain additional capital (which is not assured at this time), our long-term business plan may not be accomplished and we may be forced to cease certain development activities. More specifically, the completion of future Phase 3 and/or registrational clinical studies will require significant financing or a significant partnership. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted. If we are not able to obtain funding for future clinical trials when needed, we will be unable to carry out our business plan and we will be forced to delay the initiation of future clinical trials until such time as we obtain adequate financing and our operating results and prospects will be adversely affected.

Cash Flows

Cash Used in Operating Activities

Net cash used in operating activities was $4.9 million and $5.6 million during the three months ended March 31, 2024 and 2023, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 our product candidate.

Cash Used In Investing Activities

Cash used in investing activities during the three months ended March 31, 2023 was $8,000 for equipment purchases. There was no cash used in investing activities during the three months ended March 31, 2024.

Cash Used in Financing Activities

Cash used in financing activities during the three months ended March 31, 2023 included payments of loans payable of $55,000. There was no cash used in in provided by activities during the three months ended March 31, 2024.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2024, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

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Contractual Obligations

Leases

At the inception of a contract we determine if the arrangement is, or contains, a lease. Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

We have made certain accounting policy elections whereby we (i) do not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combine lease and non-lease elements of our operating leases. As of March 31, 2024, we did not have any material finance leases.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The primary objective of our investment activities is to preserve our capital to fund operations. We also seek to maximize income from our investments without assuming significant risk. Our exposure to market risk is confined to our cash and cash equivalents. As of March 31, 2024, our cash and cash equivalents consisted primarily of investments in treasury securities. We do not engage in any hedging activities against changes in interest rates. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, we would not expect our operating results or cash flows to be affected to any significant degree by the effect of a sudden change in market interest rates or credit conditions on our securities portfolio. We may, however, require additional financing to fund future obligations and no assurance can be given that the terms of future sources of financing will not expose us to material market risk.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer who also serves as our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. We have adopted and maintain disclosure controls and procedures (as defined Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Due to the material weaknesses in internal control over financial reporting as described below, our Chief Executive Officer who also serves as our Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.

Based on its assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2024, due to the following previously reported material weaknesses that continued to exist:

●

Management did not design and 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.

●

Management did not maintain effective information technology general controls over user access, program change management, and segregation of duties, within certain key information systems supporting the Company’s accounting and financial reporting processes. Additionally, many of the Company’s business process controls dependent upon the information

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derived from these information systems were also ineffective, as management did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those controls.

Management’s Plan for Remediation

In response to the material weaknesses, management, with oversight of the Audit Committee of the Board of Directors, has identified and begun to implement steps to remediate the material weaknesses. We have hired a third party consultant during 2023 to assist with the remediation efforts. While we have made progress during 2024, the remediation efforts are ongoing, as additional time is needed to complete the remediation and allow for the internal controls to be tested by management. Our continued internal control remediation efforts include the following:

●

Enhancing existing policies and procedures to facilitate more efficient operations and improve the timely execution of key controls by company personnel.

●

Enhancing program change management, user access provisioning, and monitoring controls to ensure changes to key applications are appropriately reviewed and approved and to enforce appropriate system access and segregation of duties.

●

Improving the design of key controls to ensure reports used in the performance of such controls are complete and accurate as part of the controls execution.

We are committed to ensuring that our internal controls over financial reporting are designed and operating effectively. Management believes the efforts taken to date and the planned remediation will improve the effectiveness of our internal control over financial reporting. While these remediation efforts are ongoing, the controls must be operating effectively for a sufficient period of time and be tested by management in order to consider them remediated and conclude that the design is effective to address the risks of material misstatement.

Changes in Internal Control Over Financial Reporting

Except for the material weaknesses described above, there has been no change in the Company’s internal control over financial reporting during the Company’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II–OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM 1A. RISK FACTORS.

The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item 1A, “Risk Factors,” contained in our 2023 Form 10-K. Except as disclosed below, there have been no material changes from the risk factors disclosed in our 2023 Form 10-K.

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 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. 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. 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. 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.

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. 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. 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. 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

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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. 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.

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. 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. Further development of VCN’s product candidates will require additional funding. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business and also have a dilutive effect on our stockholders. 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. 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. There can be no assurances that we will be able to raise the funds needed, especially in light of the fact that our ability to sell securities registered on our registration statement on Form S-3 will be limited until such time the market value of our voting securities held by non-affiliates is $75 million or more. 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 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. In addition, at such date, we had 2,822,845 shares of our common stock reserved for future issuance under our equity incentive plans. If all of these securities were to be exercised, the total number of shares of our common stock that we would be required to issue is 9,657,642, which in addition to the 17,148,049 shares outstanding, would leave 323,194,309 authorized but unissued shares of common stock available to be issued.

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

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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. 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.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(a)	Unregistered Sales of Equity Securities

We did not sell any equity securities during the quarter ended March 31, 2024 in transactions that were not registered under the Securities Act other than as previously disclosed in our filings with the SEC.

(b)	Use of Proceeds

Not applicable.

(c)	Issuer Purchases of Equity Securities

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “nonRule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

The exhibits filed or furnished as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THERIVA BIOLOGICS, INC.

	By:	/s/ Steven A. Shallcross
		Steven A. Shallcross
		Chief Executive Officer, Chief Financial Officer
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

		Date: May 7, 2024

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EXHIBIT INDEX


Exhibit Number		Exhibit Title
3.1		Certificate of Incorporation, as amended (Incorporated by reference to (i) Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed October 16, 2008, File No. 001-12584, (ii) Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 filed August 14, 2001, File No. 001-12584; and (iii) Exhibits 3.1, 4.1 and 4.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 filed August 14, 1998, File No. 001-12584.)

3.2		Articles of Merger (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed October 19, 2009, File No. 001-12584.)

3.3		Certificate of Merger filed with the Secretary of State of Delaware (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed October 19, 2009, File No. 001-12584.)

3.4		Articles of Incorporation filed with the Nevada Secretary of State (Incorporated by reference to Exhibit 3.3 of the Registrant’s Current Report on Form 8-K filed October 19, 2009, File No. 001-12584.)

3.5		Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed February 16, 2012, File No. 001-12584.)

3.6		Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed May 18, 2015, File No. 001-12584.)

3.7		Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed September 8, 2017, File No. 001-12584.)

3.8		Certificate of Designations for Series A Preferred Stock to Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed September 12, 2017, File No. 001-12584.)

3.9		Certificate of Change Pursuant to NRS 78. 209 (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed August 13, 2018, File No. 001-12584.)

3.10		Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed September 26, 2018, File No. 001-12584.)

3.11		Certificate of Designations for Series B Preferred Stock to Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed October 15, 2018, File No. 001-12584.)

3.12		Certificate of Amendment to Certificate of Designation for Series B Preferred Stock to Certificate of Incorporation (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed October 15, 2018, File No. 001-12584.)

3.13		Certificate of Amendment to the Certificate of Designation for the Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K/A filed on February 1, 2021 File No. 001-12584.)

3.14		Certificate of Designation for Series C Preferred Stock to Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed July 29, 2022, File No. 001-12584.)

3.15		Certificate of Designation for Series D Preferred Stock to Certificate of Incorporation (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed July 29,2022, File No. 001-12584.)

3.16		Second Amended and Restated Bylaws ( Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed August 11, 2023, File No. 001-12584.)

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31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)*

32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS		Inline XBRL Instance Document*

101.SCH		Inline XBRL Taxonomy Extension Schema*

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase*

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase*

104		Cover Page Interactive Data File (formatted in XBRL in Exhibit 101)

*Filed herewith.

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven A. Shallcross, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Theriva Biologics, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2024	By:	/s/ Steven A. Shallcross
		Name: Steven A. Shallcross
		Chief Executive Officer, Chief Financial Officer
		(Principal Executive Officer, Principal Financial
		Officer and Principal Accounting Officer)

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFCIER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Theriva Biologics, Inc. (the “Registrant”) hereby certifies, to such officer’s knowledge, that:

(1)	the accompanying Quarterly Report on Form 10-Q of the Registrant for the quarter ended March 31, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 7, 2024	By:	/s/ Steven A. Shallcross
		Name: Steven A. Shallcross
		Chief Executive Officer, Chief Financial Officer
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 03, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-12584
Entity Registrant Name	THERIVA BIOLOGICS, INC.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	13-3808303
Entity Address, Address Line One	9605 Medical Center Drive, Suite 270
Entity Address, City or Town	Rockville
Entity Address, Country	MD
Entity Address, Postal Zip Code	20850
City Area Code	301
Local Phone Number	417-4364
Title of 12(b) Security	Common Stock
Trading Symbol	TOVX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,277,371
Entity Central Index Key	0000894158
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 18,261,000	$ 23,177,000
Tax credit receivable	1,772,000	1,812,000
Prepaid expenses and other current assets	1,623,000	2,414,000
Total Current Assets	21,656,000	27,403,000
Non-Current Assets
Property and equipment, net	375,000	422,000
Restricted cash	99,000	102,000
Right of use asset	1,634,000	1,759,000
In-process research and development	19,316,000	19,755,000
Goodwill	5,573,000	5,700,000
Deposits and other assets	77,000	78,000
Total Assets	48,730,000	55,219,000
Current Liabilities:
Accounts payable	571,000	770,000
Accrued expenses	3,327,000	2,995,000
Accrued employee benefits	665,000	1,517,000
Deferred research and development tax credit-current portion	886,000	906,000
Loans payable-current	62,000	63,000
Operating lease liability-current portion	498,000	487,000
Total Current Liabilities	6,009,000	6,738,000
Non-current Liabilities
Non-current contingent consideration	6,476,000	6,274,000
Loan Payable - non-current	159,000	162,000
Non-current deferred research and development tax credit	664,000	906,000
Non-current operating lease liability	1,299,000	1,442,000
Total Liabilities	14,607,000	15,522,000
Commitments and Contingencies (Note 13)
Stockholders' Equity:
Common stock, $0.001 par value; 350,000,000 shares authorized, 17,868,282 issued and 17,148,049 outstanding at March 31, 2024 and 17,868,282 issued and 17,148,049 outstanding at December 31, 2023	18,000	18,000
Additional paid-in capital	346,679,000	346,519,000
Treasury stock at cost, 720,233 shares at March 31, 2024 and at December 31, 2023	(288,000)	(288,000)
Accumulated other comprehensive (loss) income	(537,000)	32,000
Accumulated deficit	(314,483,000)	(309,318,000)
Total Stockholders' Equity	31,389,000	36,963,000
Total Liabilities and Stockholders' Equity	48,730,000	55,219,000
Series C convertible preferred stock
Temporary Equity
Convertible preferred stock	2,006,000	2,006,000
Series D convertible preferred stock
Temporary Equity
Convertible preferred stock	$ 728,000	$ 728,000

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Convertible preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	17,868,282	17,868,282
Common stock, shares outstanding	17,148,049	17,148,049
Treasury stock	720,233	720,233
Series C convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares issued	275,000	275,000
Series D convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares issued	100,000	100,000

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating Costs and Expenses:
General and administrative	$ 1,933	$ 2,201
Research and development	3,459	2,977
Total Operating Costs and Expenses	5,392	5,178
Loss from Operations	(5,392)	(5,178)
Other Income:
Foreign currency exchange (loss) gain	(1)	6
Interest income	228	364
Total Other Income	227	370
Net Loss before income taxes	(5,165)	(4,808)
Income tax benefit		330
Net Loss Attributable to Common Stockholders	$ (5,165)	$ (4,478)
Net Loss Per Share - Basic (in dollars per share)	$ (0.30)	$ (0.30)
Net Loss Per Share - Dilutive (in dollars per share)	$ (0.30)	$ (0.30)
Weighted average number of shares outstanding during the period - Basic (in shares)	17,148,049	15,124,061
Weighted average number of shares outstanding during the period - dilutive (in shares)	17,148,049	15,124,061
Net Loss	$ (5,165)	$ (4,478)
(Loss) gain (loss) on foreign currency translation	(569)	374
Total comprehensive loss	$ (5,734)	$ (4,104)

Condensed Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at Dec. 31, 2022	$ 16	$ 343,750	$ (290,969)	$ (679)	$ (288)	$ 51,830
Balance (in shares) at Dec. 31, 2022	15,844,061
Stock-based compensation		126				126
Foreign currency exchange gains (losses)				374		374
Net loss			(4,478)			(4,478)
Balance at Mar. 31, 2023	$ 16	343,876	(295,447)	(305)	(288)	47,852
Balance (in shares) at Mar. 31, 2023	15,844,061
Balance at Dec. 31, 2023	$ 18	346,519	(309,318)	32	(288)	36,963
Balance (in shares) at Dec. 31, 2023	17,868,282
Stock-based compensation		160				160
Foreign currency exchange gains (losses)				(569)		(569)
Net loss			(5,165)			(5,165)
Balance at Mar. 31, 2024	$ 18	$ 346,679	$ (314,483)	$ (537)	$ (288)	$ 31,389
Balance (in shares) at Mar. 31, 2024	17,868,282

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net loss	$ (5,165,000)	$ (4,478,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	160,000	126,000
Income tax benefit		(330,000)
Change in fair value of contingent consideration	202,000	135,000
Non-cash lease expense	108,000	82,000
Depreciation	39,000	32,000
Deferred research and development tax credit	(223,000)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	766,000	(447,000)
Accounts payable	(190,000)	(440,000)
Accrued expenses	382,000	568,000
Accrued employee benefits	(845,000)	(758,000)
Operating lease liability	(115,000)	(100,000)
Net Cash Used In Operating Activities	(4,881,000)	(5,610,000)
Cash Flows from Investing Activities
Purchase of property and equipment		(8,000)
Net Cash Used in Investing Activities		(8,000)
Cash Flows from Financing Activities
Payment of loans payable		(55,000)
Net Cash used in Financing Activities		(55,000)
Effects of exchange rate changes on cash and cash equivalents	(38,000)	(35,000)
Net decrease in cash and cash equivalents and restricted cash	(4,919,000)	(5,708,000)
Cash and cash equivalents and restricted at the beginning of this period	23,279,000	41,884,000
Cash and cash equivalents and restricted cash at the end of this period	18,360,000	36,176,000
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet
Cash and cash equivalents	18,261,000	36,076,000
Restricted cash included in other long-term assets	99,000	100,000
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	18,360,000	36,176,000
Supplemental non-cash investing and financing activities:
Right of use assets obtained in exchange for lease liabilities	$ 937,000	$ 937,000

Organization, Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2024

Organization, Nature of Operations and Basis of Presentation

Organization, Nature of Operations and Basis of Presentation

1. Organization, Nature of Operations and Basis of Presentation

Description of Business

Basis of Presentation

Going Concern

3 Months Ended

Mar. 31, 2024

Going Concern

Going Concern

2. Going Concern

2. Going Concern – (continued)

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

●

the progress of its research activities;

●

the number and scope of its research programs;

●

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

●

the progress of its preclinical and clinical development activities;

●

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

●

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

●

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

●

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

●

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

●

the costs and timing of regulatory approvals.

2. Going Concern – (continued)

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

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

IPR&D

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

Goodwill

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

3. Summary of Significant Accounting Policies – (continued)

Contingent Consideration

Long-Lived Assets

Research and Development Tax Credits

Recent Accounting Pronouncements and Developments

3. Summary of Significant Accounting Policies – (continued)

Goodwill and Intangibles

3 Months Ended

Mar. 31, 2024

Goodwill and Intangibles

Goodwill and Intangibles

4. Goodwill and Intangibles

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


	Goodwill (in thousands)
Balance at December 31, 2023	$	5,700
Effects of exchange rates		(127)
Balance at March 31, 2024	$	5,573

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


	In-process
	R&D (in thousands)
Balance at December 31, 2023	$	19,755
Effects of exchange rates		(439)
Balance at March 31, 2024	$	19,316

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

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value of Financial Instruments

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

●

Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;

●

Level 2 inputs: Inputs, other than quoted prices, that are observable either directly or indirectly; and

●

Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

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


	(in thousands)
Balance at December 31, 2022	$	10,184
Payment of contingent consideration		(3,250)
Change in fair value		(660)
Balance at December 31, 2023	$	6,274

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,274
Balance at December 31, 2023	$	6,274

5. Fair Value of Financial Instruments – (continued)


	(in thousands)
Balance at December 31, 2023	$	6,274
Change in fair value		202
Balance at March 31, 2024	$	6,476

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,476
Balance at March 31, 2024	$	6,476

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


	As of March 31, 2024
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,476	$	—	$	—	$	6,476
Total liabilities	$	6,476	$	—	$	—	$	6,476


	As of December 31, 2023
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,274	$	—	$	—	$	6,274
Total liabilities	$	6,274	$	—	$	—	$	6,274

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


	As of March 31, 2024
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.8% to 13.5%
		Weighted Average Discount rate	13.13%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%


	As of December 31, 2023
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.9% to 13.6%
		Weighted Average Discount rate	13.16%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%

Research and Development Tax Credits

3 Months Ended

Mar. 31, 2024

Research and Development Tax Credits

Research and Development Tax Credits

6. Research and Development Tax Credits

Selected Balance Sheet Information

3 Months Ended

Mar. 31, 2024

Selected Balance Sheet Information

Selected Balance Sheet Information

7. Selected Balance Sheet Information

Prepaid expenses and other current assets (in thousands)


	March 31,		December 31,
	2024		2023
Prepaid manufacturing expenses	$	508	$	491
Prepaid clinical research organizations		364		1,119
Prepaid insurance		337		496
Prepaid consulting, subscriptions and other expenses		278		180
VAT receivable		136		128

Total	$	1,623	$	2,414

7. Selected Balance Sheet Information – (continued)

Property and equipment, net (in thousands)


	March 31,		December 31,
	2024		2023
Computers and office equipment	$	900	$	902
Other property, plant and equipment		407		417
Leasehold improvements		94		94
Software		11		11
		1,412		1,424
Less: accumulated depreciation and amortization		(1,037)		(1,002)

Total	$	375	$	422

Accrued expenses (in thousands)


	March 31,		December 31,
	2024		2023
Accrued clinical consulting services	$	2,424	$	1,700
Accrued manufacturing costs		593		843
Accrued vendor payments		310		452

Total	$	3,327	$	2,995

Accrued employee benefits (in thousands)


	March 31,		December 31,
	2024		2023
Accrued bonus expense	$	325	$	1,307
Accrued compensation expense		224		127
Accrued vacation expense		115		83

Total	$	665	$	1,517

Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

8. Stock-Based Compensation

Stock Incentive Plans

8. Stock-Based Compensation – (continued)

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.

Risk-free interest rate—The assumed risk-free rate used is a zero coupon U.S. Treasury security with a maturity that approximates the expected term of the option.

The Company records stock-based compensation based upon the stated vesting provisions in the related agreements. The vesting provisions for these agreements have various terms as follows:

●

immediate vesting,

●

in full on the one-year anniversary date of the grant date,

●

half vesting immediately and the remaining over three years,

●

quarterly over three years,

●

annually over three years,

8. Stock-Based Compensation – (continued)

●

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

●

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

●

one-quarter immediate vesting and the remaining over three years,

●

one-quarter immediate vesting and the remaining over 33 months,

●

monthly over one year, and

●

monthly over three years.

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


		Weighted		Weighted Average	Aggregate
		Average Exercise		Remaining	Intrinsic
	Options	Price		Contractual Life	Value
Balance - December 31, 2022	2,295,898	$	3.53	6.44 years	$	—

Granted	2,195,000		0.59
Expired	(104,270)		14.73
Forfeited	(10,847)		1.11
Balance - December 31, 2023	4,375,781		1.80	7.70 years		—

Expired	—		—
Forfeited	—		—

Balance - March 31, 2024 - outstanding	4,375,781	$	1.80	7.45 years	$	—

Balance - March 31, 2024 - exercisable	1,611,399	$	3.80	5.59 years	$	—

Grant date fair value of options granted – year ended December 31, 2023		$	873,140

Weighted average grant date fair value – year ended December 31, 2023		$	0.40

8. Stock-Based Compensation – (continued)

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

Stock Warrants

3 Months Ended

Mar. 31, 2024

Stock Warrants

Stock Warrants

9. Stock Warrants

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


				Weighted Average
	Number of	Weighted Average		Remaining
	Warrants	Exercise Price		Contractual Life
Balance at December 31, 2022	634,426	$	1.22	0.78 years
Granted	—		—
Exercised	—		—
Forfeited	(634,426)		1.22
Balance at December 31, 2023	—	$	—	—

Net Loss per Share

3 Months Ended

Mar. 31, 2024

Net Loss per Share

Net Loss per Share

10. Net Loss per Share

Common and Preferred Stock

3 Months Ended

Mar. 31, 2024

Common and Preferred Stock

Common and Preferred Stock

11. Common and Preferred Stock

Series C and D Preferred Stock

11. Common and Preferred Stock – (continued)

B. Riley Securities Sales Agreement

Loans Payable

3 Months Ended

Mar. 31, 2024

Loans Payable

Loans Payable

12. Loans Payable


	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
	Current		Non-current		Current		Non-current

NEBT Loan		8	$	24		8		24
RETOS 2015		54		135		55		138
	$	62	$	159	$	63	$	162

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


2024			62
2025			64
2026			53
2027			33
2028			9
Total			221

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Commitments and Contingencies

13. Commitments and Contingencies

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


Future undiscounted cash flow for the years ending December 31,

2024		497
2025		673
2026		588
2027		368
Total		2,126

Discount factor		(329)
Operating lease liability		1,797
Operating lease liability – current		(498)
Operating lease liability – long term	$	1,299

13. Commitments and Contingencies – (continued)

Risks and Uncertainties

Related Party

3 Months Ended

Mar. 31, 2024

Related Party

Related Party

14. Related Party

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2024
Summary of Significant Accounting Policies
IPR&D	IPR&D IPR&D assets represent the fair value assigned to technologies that the Company acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. IPR&D assets are considered to have indefinite-lives until the completion or abandonment of the associated research and development projects. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed to have definite lives and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis on October 1, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that could indicate an impairment. The impairment test consists of a comparison of the estimated fair value of the IPR&D with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The key assumptions used to value IPR&D include estimates of future cash flows and to the discount rate applicable to the future cash flow periods. No impairment charges were recorded during the three months ended March 31, 2024 and 2023.
Goodwill	Goodwill The Company tests the carrying amounts of goodwill for recoverability on an annual basis on October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs a one-step test in its evaluation of the carrying value of goodwill if qualitative factors determine it is necessary to complete a goodwill impairment test. In the evaluation, the fair value of the relevant reporting unit is determined and compared to its carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value, and a charge is reported in impairment of goodwill in the Company’s consolidated statements of operations. The key assumptions used to value the reporting unit include estimates of future cash flows, the discount rate applicable and those future cash flow periods, and the implied control premium. No impairment charges were recorded during the three months ended March 31, 2024 and 2023.
Contingent Consideration	Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. Payments for amounts not in excess of original fair values established at acquisition date (including measurement period adjustments), and not paid within a period considered to be close to the transaction date, are reflected as financing activities in the statement of cash flows. Subsequent to the date of acquisition, the Company reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. The discounted cash flow is the method used to value the contingent consideration which includes inputs of not readily observable market data, which are level 3 inputs. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long-term liabilities in the consolidated balance sheets. See Fair Value of Financial Instruments below.
Long-Lived Assets	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 months ended March 31, 2024 and 2023.
Research and Development Tax Credits	Research and Development Tax Credits The Company, through its Theriva S.L. subsidiary, participates in a Research and Development incentive program sponsored by the Spanish government. The program provides for reimbursement of certain expenses incurred in research and development efforts the Company incurs in Spain. The program provides for certain limits on the types and amounts of expenses and requires participants to complete a certification and apply for the refund annually. Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period. The Company accounts for the reimbursement as a tax credit receivable related to amounts that had been approved by the Spanish government and a corresponding deferred research and development tax credit as it was determined that amounts became probable of being received upon the receipt of the approval. Additionally, the Company has elected to account for the tax credit as a contra-expense as this most appropriately reflects the nature of the transaction and will reduce future research and development expenditures as the Company continues to incur expenses in the upcoming 24-month period.
Recent Accounting Pronouncements and Developments	Recent Accounting Pronouncements and Developments In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related earnings per share guidance for both Subtopics. The ASU is effective for annual reporting periods after December 15, 2023 and interim periods within those annual periods and early adoption is permitted in annual reporting periods ending after December 15, 2020. The Company has adopted ASU 2020-06 on January 1, 2022. The ASU impacted the analysis of the accounting treatment for the issuance of Convertible Preferred Series C & D stock during the third quarter, specifically the cash conversion and beneficial conversion features. In December 2023, the FASB issued final guidance in ASU No. 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures requiring entities to provide additional information in the rate reconciliation and disclosures about income taxes paid. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company is not early adopting, and therefore, this ASU is not adopted in the current period. The Company does not expect this ASU to have a material impact on the consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker. Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment expense disclosures. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company is not early adopting, and therefore has not adopted this ASU in the current period. The Company does not expect this ASU to have a material impact on the consolidated financial statements.

Goodwill and Intangibles (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangibles

Schedule of Company's goodwill


	Goodwill (in thousands)
Balance at December 31, 2023	$	5,700
Effects of exchange rates		(127)
Balance at March 31, 2024	$	5,573

Schedule of Company's in-process R&D


	In-process
	R&D (in thousands)
Balance at December 31, 2023	$	19,755
Effects of exchange rates		(439)
Balance at March 31, 2024	$	19,316

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value of Financial Instruments

Schedule of change in fair value as determined by Level 3 inputs for the contingent consideration liabilities


	(in thousands)
Balance at December 31, 2022	$	10,184
Payment of contingent consideration		(3,250)
Change in fair value		(660)
Balance at December 31, 2023	$	6,274

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,274
Balance at December 31, 2023	$	6,274


	(in thousands)
Balance at December 31, 2023	$	6,274
Change in fair value		202
Balance at March 31, 2024	$	6,476

Contingent consideration, current portion	$	—
Contingent consideration, net of current portion		6,476
Balance at March 31, 2024	$	6,476

Schedule of fair value of financial instruments measured on a recurring basis


	As of March 31, 2024
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,476	$	—	$	—	$	6,476
Total liabilities	$	6,476	$	—	$	—	$	6,476


	As of December 31, 2023
Description	Total		Level 1		Level 2		Level 3
Liabilities:
Contingent consideration	$	6,274	$	—	$	—	$	6,274
Total liabilities	$	6,274	$	—	$	—	$	6,274

Schedule of fair value measurements of contingent consideration for which a liability is recorded


	As of March 31, 2024
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.8% to 13.5%
		Weighted Average Discount rate	13.13%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%


	As of December 31, 2023
	Valuation	Significant	Weighted Average
	Methodology	Unobservable Input	(range, if applicable)
Contingent Consideration	Discounted Cash Flows	Milestone dates	2025-2028

		Discount rate	12.9% to 13.6%
		Weighted Average Discount rate	13.16%
		Probability of Occurrence (periodic for each Milestone)	11.7% to 92.0%
		Probability of occurrence (cumulative through each Milestone)	5.3% to 48.8%

Selected Balance Sheet Information (Tables)

3 Months Ended

Mar. 31, 2024

Selected Balance Sheet Information

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets (in thousands)


	March 31,		December 31,
	2024		2023
Prepaid manufacturing expenses	$	508	$	491
Prepaid clinical research organizations		364		1,119
Prepaid insurance		337		496
Prepaid consulting, subscriptions and other expenses		278		180
VAT receivable		136		128

Total	$	1,623	$	2,414

Schedule of property and equipment, net

Property and equipment, net (in thousands)


	March 31,		December 31,
	2024		2023
Computers and office equipment	$	900	$	902
Other property, plant and equipment		407		417
Leasehold improvements		94		94
Software		11		11
		1,412		1,424
Less: accumulated depreciation and amortization		(1,037)		(1,002)

Total	$	375	$	422

Schedule of accrued expenses

Accrued expenses (in thousands)


	March 31,		December 31,
	2024		2023
Accrued clinical consulting services	$	2,424	$	1,700
Accrued manufacturing costs		593		843
Accrued vendor payments		310		452

Total	$	3,327	$	2,995

Schedule of accrued employee benefits

Accrued employee benefits (in thousands)


	March 31,		December 31,
	2024		2023
Accrued bonus expense	$	325	$	1,307
Accrued compensation expense		224		127
Accrued vacation expense		115		83

Total	$	665	$	1,517

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Summary of stock option activity

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


		Weighted		Weighted Average	Aggregate
		Average Exercise		Remaining	Intrinsic
	Options	Price		Contractual Life	Value
Balance - December 31, 2022	2,295,898	$	3.53	6.44 years	$	—

Granted	2,195,000		0.59
Expired	(104,270)		14.73
Forfeited	(10,847)		1.11
Balance - December 31, 2023	4,375,781		1.80	7.70 years		—

Expired	—		—
Forfeited	—		—

Balance - March 31, 2024 - outstanding	4,375,781	$	1.80	7.45 years	$	—

Balance - March 31, 2024 - exercisable	1,611,399	$	3.80	5.59 years	$	—

Grant date fair value of options granted – year ended December 31, 2023		$	873,140

Weighted average grant date fair value – year ended December 31, 2023		$	0.40

Stock Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Stock Warrants

Summary of all warrant activity


				Weighted Average
	Number of	Weighted Average		Remaining
	Warrants	Exercise Price		Contractual Life
Balance at December 31, 2022	634,426	$	1.22	0.78 years
Granted	—		—
Exercised	—		—
Forfeited	(634,426)		1.22
Balance at December 31, 2023	—	$	—	—

Loans Payable (Tables)

3 Months Ended

Mar. 31, 2024

Loans Payable

Schedule of debt


	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
	Current		Non-current		Current		Non-current

NEBT Loan		8	$	24		8		24
RETOS 2015		54		135		55		138
	$	62	$	159	$	63	$	162

Schedule of maturity analysis of debt

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


2024			62
2025			64
2026			53
2027			33
2028			9
Total			221

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Schedule of maturity analysis of operating leases

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


Future undiscounted cash flow for the years ending December 31,

2024		497
2025		673
2026		588
2027		368
Total		2,126

Discount factor		(329)
Operating lease liability		1,797
Operating lease liability – current		(498)
Operating lease liability – long term	$	1,299

Organization, Nature of Operations and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2024 segment
Organization, Nature of Operations and Basis of Presentation
Number of operating segments	1
Number of reportable segments	1

Going Concern (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Going Concern
Accumulated deficit	$ (314,483)	$ (309,318)
Cash and cash equivalents	$ 18,261	$ 23,177	$ 36,076

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Summary of Significant Accounting Policies
Goodwill impairment Charges	$ 0	$ 0
Impairment charge	$ 0	0
Research and Development Program
Summary of Significant Accounting Policies
Research and development expenditure period (in months)	24 months
In-process R&D
Summary of Significant Accounting Policies
IPR&D Impairment Charges	$ 0	$ 0

Goodwill and Intangibles - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Goodwill
Balance at the beginning	$ 5,700
Effects of exchange rates	(127)
Balance at the end	5,573
Impairment charge	0
Goodwill impairment loss	$ 0	$ 0

Goodwill and Intangibles - In-process R&D (Details) - In-process R&D $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Finite-Lived Intangible Assets
Balance at the beginning	$ 19,755
Effects of exchange rates	(439)
Balance at the end	$ 19,316

Fair Value of Financial Instruments - Narratives (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Fair Value of Financial Instruments
Fair value of contingent consideration	$ 6,476,000	$ 6,274,000
V C N
Fair Value of Financial Instruments
Additional consideration related to the achievement of certain milestones	70,200,000
Amount to be paid due to approval		$ 3,250,000
Fair value of contingent consideration	6,500,000
Operating expense relating to fair value adjustment	$ 202,000		$ 135,000

Fair Value of Financial Instruments - Change in fair value of contingent consideration (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration, net of current portion	$ 6,476	$ 6,274
Contingent consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning	6,274	10,184
Payment of contingent consideration		(3,250)
Change in fair value	202	(660)
Balance at ending	6,476	6,274
Contingent consideration, net of current portion	$ 6,476	$ 6,274

Fair Value of Financial Instruments - Fair value of financial instruments measured on a recurring basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value of Financial Instruments
Fair value of liabilities	$ 6,476	$ 6,274
Contingent consideration
Fair Value of Financial Instruments
Fair value of liabilities	6,476	6,274
Level 3
Fair Value of Financial Instruments
Fair value of liabilities	6,476	6,274
Level 3 \| Contingent consideration
Fair Value of Financial Instruments
Fair value of liabilities	$ 6,476	$ 6,274

Fair Value of Financial Instruments - Contingent Consideration (Details) - Level 3 - Contingent consideration	Mar. 31, 2024	Dec. 31, 2023
Discount rate \| Minimum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.128	0.129
Discount rate \| Maximum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.135	0.136
Weighted Average Discount rate
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.1313	0.1316
Probability of occurrence \| Minimum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.117	0.117
Probability of occurrence \| Maximum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.920	0.920
Probability of occurrence (cumulative through each Milestone) \| Minimum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.053	0.053
Probability of occurrence (cumulative through each Milestone) \| Maximum
Fair Value of Financial Instruments
Contingent consideration, measurement Input	0.488	0.488

Research and Development Tax Credits (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Research and Development Tax Credits
Deferred research and development tax credit grant receivable.	$ 1,800,000
Deferred research and development tax credit-current portion	886,000	$ 906,000
Non-current deferred research and development tax credit	664,000	$ 906,000
Increase (Decrease) in Deferred Research and Development Tax Credit	$ 223,000
Research and Development Program
Research and Development Tax Credits
Research and development expenditure period (in months)	24 months

Selected Balance Sheet Information - Schedule of Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Selected Balance Sheet Information
Prepaid manufacturing expenses	$ 508	$ 491
Prepaid clinical research organizations	364	1,119
Prepaid Insurance	337	496
Prepaid consulting, subscriptions and other expenses	278	180
VAT receivable	136	128
Total prepaid expenses and other current assets	$ 1,623	$ 2,414

Selected Balance Sheet Information - Schedule of Property and equipment, net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Selected Balance Sheet Information
Property, Plant and Equipment, Gross Total	$ 1,412	$ 1,424
Less: accumulated depreciation and amortization	(1,037)	(1,002)
Total	375	422
Computers and office equipment
Selected Balance Sheet Information
Property, Plant and Equipment, Gross Total	900	902
Other property, plant and equipment
Selected Balance Sheet Information
Property, Plant and Equipment, Gross Total	407	417
Leasehold improvements
Selected Balance Sheet Information
Property, Plant and Equipment, Gross Total	94	94
Software
Selected Balance Sheet Information
Property, Plant and Equipment, Gross Total	$ 11	$ 11

Selected Balance Sheet Information - Schedule of Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Selected Balance Sheet Information
Accrued clinical consulting services	$ 2,424	$ 1,700
Accrued manufacturing costs	593	843
Accrued vendor payments	310	452
Total	$ 3,327	$ 2,995

Selected Balance Sheet Information - Schedule of Accrued employee benefits (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Selected Balance Sheet Information
Accrued bonus expense	$ 325	$ 1,307
Accrued compensation expense	224	127
Accrued vacation expense	115	83
Total	$ 665	$ 1,517

Stock-Based Compensation - Stock incentive plan and other information (Details) - USD ($)			3 Months Ended		12 Months Ended
	Sep. 05, 2019	Nov. 02, 2010	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2022	Oct. 31, 2023	Sep. 17, 2020	Mar. 20, 2007
Stock-Based Compensation and Warrants
Share-based payment award, options, grants in period, gross			0	0
Unrecognized stock-based compensation expense			$ 1,100,000
Class Of Warrant Or Right Outstanding						0
General and administrative expenses \| Employees
Stock-Based Compensation and Warrants
Allocated share-based compensation expense			106,000	$ 83,000
Consultant \| Research and Development Expenses
Stock-Based Compensation and Warrants
Allocated share-based compensation expense			$ 54,000	$ 43,000
2007 Stock Plan
Stock-Based Compensation and Warrants
Share-based payment award, options, outstanding, number			86					7,143
Share-based payment award, options, issued, number			86
2010 Stock Plan
Stock-Based Compensation and Warrants
Share-based payment award, options, outstanding, number		8,572	198,540
Share-based payment award, options, issued, number			198,540
Share-based compensation arrangement by share-based payment award, number of shares authorized	400,000
Shares available			0
2010 Stock Plan \| Minimum
Stock-Based Compensation and Warrants
Share-based payment award, options, grants, expired period		5 years
2010 Stock Plan \| Maximum
Stock-Based Compensation and Warrants
Share-based payment award, options, grants, expired period		10 years
2020 Stock Plan
Stock-Based Compensation and Warrants
Share-based payment award, options, outstanding, number			4,177,155				400,000
Share-based payment award, options, issued, number			4,177,155
Share-based compensation arrangement by share-based payment award, number of shares authorized					7,000,000

Stock-Based Compensation - Summary of stock option activity (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Stock-Based Compensation and Warrants
Options granted (in shares)	0	0
Stock Option
Stock-Based Compensation and Warrants
Options, Beginning balance	4,375,781	2,295,898	2,295,898
Options granted (in shares)			2,195,000
Options, Expired			(104,270)
Options, Forfeited			(10,847)
Options, Ending balance	4,375,781		4,375,781	2,295,898
Options, Exercisable	1,611,399
Weighted Average Exercise Price, Beginning balance	$ 1.80	$ 3.53	$ 3.53
Weighted Average Exercise Price, Granted			0.59
Weighted Average Exercise Price, Expired			14.73
Weighted Average Exercise Price, Forfeited			1.11
Weighted Average Exercise Price, Ending balance	1.80		$ 1.80	$ 3.53
Weighted Average Exercise Price, Exercisable	$ 3.80
Weighted Average Remaining Contractual Life, Outstanding	7 years 5 months 12 days		7 years 8 months 12 days	6 years 5 months 8 days
Weighted Average Remaining Contractual Life, Exercisable	5 years 7 months 2 days
Grant date fair value of options granted			$ 873,140
Weighted average grant date fair value			$ 0.40

Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
	Oct. 15, 2018	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Oct. 31, 2023	Aug. 03, 2022
Stock Warrants
Gross proceeds	$ 18.6
Number of shares issued		0	0
Common stock, par value (in dollars per share)		$ 0.001		$ 0.001
Warrants exercised				0
Class of warrant or right, outstanding					0
Class A common stock
Stock Warrants
Number of shares issued	252,000
Series B Preferred Stock
Stock Warrants
Number of warrants to purchase shares	1,367,218
Preferred stock conversion price per share	$ 11.50
Common stock, par value (in dollars per share)	$ 1,000
Issue of warrants to purchase common stock	1,367,218
Series B
Stock Warrants
Conversion of stock, shares converted	15,723
Warrant
Stock Warrants
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 6.90
Warrant \| Class A common stock
Stock Warrants
Number of warrants to purchase shares	252,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 13.80					$ 1.22

Stock Warrants - summary of all warrant activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stock Warrants
Number of Warrants, Beginning balance	634,426
Number of Warrants, Forfeited	(634,426)
Number of Warrants, Ending balance		634,426
Weighted Average Exercise Price, Beginning balance	$ 1.22
Weighted Average Exercise Price, Forfeited	$ 1.22
Weighted Average Exercise Price, Ending balance		$ 1.22
Weighted Average Remaining Contractual Life (in years)	0 years	9 months 10 days

Net Loss per Share (Details) - USD ($) $ in Thousands	3 Months Ended
Net Loss per Share (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Net Loss per Share
Net loss attributable to common stockholders	$ (5,165)	$ (4,478)
Equity Option
Net Loss per Share
Number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share	4,375,781
Warrant
Net Loss per Share
Number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share	0
Equity Option
Net Loss per Share
Number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share		2,295,469
Warrant
Net Loss per Share
Number of options and warrants for the purchase of common stock that were excluded from the computations of net loss per common share		634,426

Common and Preferred Stock (Details) $ / shares in Units, $ in Millions			3 Months Ended
	Jul. 29, 2022 USD ($) $ / shares shares	Jul. 28, 2022 Vote	Mar. 31, 2024 $ / shares shares	Mar. 31, 2023 shares	Dec. 31, 2023 $ / shares shares	Oct. 26, 2022 shares	Oct. 25, 2022 shares	Aug. 05, 2016
Common and Preferred Stock
Offering price \| $ / shares	$ 8.00
Gross proceeds \| $	$ 3.0
Conversion price \| $ / shares	$ 1.22
Common stock, shares issued	2,459,016		17,868,282		17,868,282
Common stock, shares authorized			350,000,000		350,000,000
Votes relating to preferred stock \| Vote		1,549,295
Stock issued during period (in shares)			0	0
FBR Capital Markets Co
Common and Preferred Stock
Brokerage commission percentage								3.00%
Amendment 2022
Common and Preferred Stock
Common stock, shares authorized						350,000,000	20,000,000
Series C convertible preferred stock
Common and Preferred Stock
Convertible preferred stock, shares issued	275,000		275,000		275,000
Convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001		$ 0.001
Series D convertible preferred stock
Common and Preferred Stock
Convertible preferred stock, shares issued	100,000		100,000		100,000
Convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001		$ 0.001
Votes per share	20,000

Loans Payable - Additional Information (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Loans Payable
Restricted cash included in other long-term assets	$ 99,000	$ 100,000
Minimum
Loans Payable
Loans acquired, interest rate	0.00%
Maximum
Loans Payable
Loans acquired, interest rate	1.00%

Loans Payable - Non-current asset on the balance sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Loans Payable
Loans payable-current	$ 62	$ 63
Loan Payable - non-current	159	162
NEBT Loan
Loans Payable
Loans payable-current	8	8
Loan Payable - non-current	24	24
RETOS 2015
Loans Payable
Loans payable-current	54	55
Loan Payable - non-current	$ 135	$ 138

Loans Payable - Maturity analysis of the debt (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Loans Payable
2024	$ 62
2025	64
2026	53
2027	33
2028	9
Total	$ 221

Commitments and Contingencies - Maturity analysis of operating leases (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies
2024	$ 497
2025	673
2026	588
2027	368
Total	2,126
Discount factor	(329)
Operating lease liability	1,797
Operating lease liability - current	(498)	$ (487)
Operating lease liability - long term	$ 1,299	$ 1,442

Commitments and Contingencies - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Commitments and Contingencies
Renewed lease term	63 months
Lease rent abatement period	3 months
Percentage of office leases owned by subsidiary	100.00%
Termination notice period (in days)	90 days
Additional lease renewal term	5 years
Operating lease cost	$ 158,000	$ 144,000
Right of use assets exchanged for operating lease obligation	$ 937,000	$ 937,000

Related Party (Details) - USD ($)		3 Months Ended
Related Party (Details) - USD ($)	Dec. 14, 2023	Mar. 31, 2024	Mar. 31, 2023
Related Party
Options granted (in shares)		0	0
Ms. Shallcross
Related Party
Approved compensation	$ 152,000
Related Party \| Ms. Shallcross
Related Party
Approved bonus payable	$ 70,000
Options granted (in shares)	75,000
Value of shares	$ 30,000
Directors \| Related Party \| Ms. Shallcross
Related Party
Compensation expense		$ 38,000

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