Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements and notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report. In addition to historical information, the following discussion contains certain forward-looking statements that involve risks, uncertainties and assumptions. Where possible, we have tried to identify these forward-looking statements by using words such as "anticipate," "believe," "intends," or similar expressions. Our actual results 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 under "Risk Factors" in Part I, Item 1A of this Annual Report.

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, we transitioned our 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. Our lead product candidate, VCN-01 (zabilugene almadenorepvec), is a clinical stage oncolytic human adenovirus that is modified for tumor-selective replication and to express an enzyme, PH20 hyaluronidase. VCN-01 has been evaluated in a Phase 2b clinical study for the treatment of pancreatic cancer ("VIRAGE"), a Phase 1 clinical study for the treatment of retinoblastoma, as well as various other Phase 1 clinical studies for the treatment of other solid tumors including 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 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. In February 2026, we entered into the Rasayana License Agreement with Rasayana, pursuant to which we granted Rasayana an exclusive worldwide license with the right to grant sublicenses to research, develop, manufacture and commercialize any Product (as such term is defined in the Rasayana License Agreement), which includes SYN-020, comprising, containing, or covered by the Licensed IP (as such term is defined in the Rasayana License Agreement) and/or devised, developed, or produced using the Licensed IP. Pursuant to the terms of the Rasayana License Agreement, Rasayana will assume all responsibility and costs for the Development and Commercialization of the Products. We believe that this arrangement will provide us with potential to derive value from our SYN-020 asset, without the need for us to continue to invest additional working capital into the further development of the product candidate, thereby allowing us to focus our efforts and expenditures on the development of our oncology assets.

Additionally, as part of our strategic transformation into an oncology focused company, we are exploring value creation options for our SYN-004 asset, including out-licensing or partnering.

Financial Developments

On September 28, 2025, the Board of Directors approved the Plan to resize and restructure our company for purposes of focusing its attention on business development and licensing activities, clinical trial planning, exploratory VCN-01 (zabilugene almadenorepvec) manufacturing scale-up, limited preclinical activities related to VCN-01 and VCN-12 (the first candidate from our VCN-X discovery program), and our interactions with the FDA and the EMA for proposed pivotal clinical trials of VCN-01 in patients with mPDAC and retinoblastoma. Pursuant to the Plan, on September 30, 2025, we implemented a workforce reduction of seven employees or 32% of the then global Company workforce. The goal of this reduction was to direct our resources towards the activities detailed above in the Plan, which we believe will represent our best opportunity for success. We completed the employee reduction immediately and incurred a total of approximately $520,000 in charges in connection with the workforce reduction. These charges consisted primarily of cash severance and benefits over a three-month period, in connection with the workforce reduction. The Plan is expected to save approximately $1.8 million in compensation and benefits annually beginning in 2026, and together with additional anticipated operating cost reductions and capital raised pursuant to the ATM Sales Agreement, we expect that it will extend our cash runway into the first quarter of 2027; however, the current cash will only be sufficient to run certain clinical trials and no assurances can be provided and our cash could differ materially from our expectations based on various factors, many of which are out of our control.

Warrant Inducement

On October 16, 2025, we entered into a warrant inducement agreement (the "Inducement Agreement") with certain holders named therein (the "Holders") of existing Common Stock Purchase Warrants to purchase up to an aggregate of 8,092,280 shares of Common Stock, consisting of (i) Common Stock Purchase Warrants to purchase up to an aggregate of 1,345,000 shares of Common Stock issued on September 27, 2024 (the "September Warrants") and (ii) Common Stock Purchase Warrants to purchase up to an aggregate of 6,747,280 shares of Common Stock issued on May 8, 2025 (the "May Warrants" and, together with the September Warrants, the "Existing Warrants"). Pursuant to the Inducement Agreement, on October 17, 2025, the Holders exercised for cash the Existing Warrants at a reduced exercise price of $0.54 per share and, in consideration therefor, we issued to the Holders new Common Stock Purchase Warrants (the "New Warrants") to purchase an aggregate of 16,184,560 shares of common stock, equal to 200% of the number of shares of common stock underlying the Existing Warrants, at an exercise price of $0.54 per share, which New Warrants are exercisable for a term of five (5) years from the date of the approval from our stockholders of the full exercise of the New Warrants and the issuance of all of the shares of common stock issuable upon the exercise thereof.

We received aggregate gross proceeds of approximately $4.4 million for the exercise of the Existing Warrants, before deducting placement agent fees of $356,000 and other expenses of $72,000 payable by the Company. We expect to use the net proceeds from the Warrant Exercise for working capital. AGP served as our exclusive financial advisor in connection with the warrant exercise and other transactions described in the Inducement Agreement. Pursuant to the terms of an engagement letter, dated October 16, 2025, by and between us and AGP, we agreed to pay to AGP a cash fee equal to 7.0% of the aggregate gross proceeds received from the Holders upon exercise of the Existing Warrants and reimbursement of certain expenses.

2025 Annual Stockholder's Meeting

On August 29, 2025, we held our 2025 Annual Meeting of Stockholders (the "Annual Meeting"). At the Annual Meeting, our stockholders (i) elected Jeffrey J. Kraws, John Monahan, Steven A. Shallcross and Jeffery Wolf as directors; (ii) ratified the appointment of BDO USA P.C. as our independent registered public accounting firm for the year ending December 31, 2025; (iii) approved an amendment ("Amendment No. 2") to our 2020 Stock Incentive Plan (the "2020 Stock Incentive Plan") to (a) increase the number of shares of common stock that we will have authority to grant under the 2020 Stock Incentive Plan from 2,500,000 shares of common stock to 4,500,000 shares of common stock and (iii) approved, on an advisory basis, the compensation of our named executive officers.

Tax Credit Receivable

For the years ended December 31, 2025 and 2024, we recognized a $3.4 million and $3.2 million, respectively, tax credit receivable and a corresponding current and non-current deferred research and development tax credit receivable of $1.7 million and $815,000 for the year ended December, 31 2025 and $1.6 million and $762,000 for the year ended December 31, 2024. We participate 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 we conduct in Spain. The reimbursements can be through either tax credits or direct refunds. The program provides for certain limits on the types and amounts of expenses and requires participants to complete a certification and apply for the refund annually. Subsequent to the period in which expenses are incurred, the program requires participants to maintain certain workforce levels and research and development expenditures over a 24-month period. In the quarter ended June 30, 2024, we completed the certification and applied for direct reimbursement, for our qualifying research and development expenses incurred in the year ended December 31, 2023. We received approvals from the Spanish government in September and December 2024. The credit will be amortized as a contra-expense over the two-year period 2025 and 2026. In the quarter ended June 30, 2025, we completed the certification and applied for direct reimbursement, for our qualifying research and development expenses incurred in the year ended December 31, 2024. We received approvals from the Spanish government in December 2024. The credit will be amortized as a contra - expense over the two - year period 2026 and 2027.

At Market Issuance Sales Agreement

On June 20, 2025, we filed a prospectus supplement to our Registration Statement on Form S-3, as amended (File No. 333-279077), which was declared effective by the SEC on September 25, 2024 (the "Registration Statement"), relating to the offer and sale of up to $2,534,352 of shares of our Common Stock, from time to time through or directly to A.G.P./Alliance Global Partners (the "Sales Agent") pursuant to the terms of that certain Amended and Restated At Market Issuance Sales Agreement, dated February 9, 2021, as amended by Amendment No. 1 thereto, dated May 3, 2021, as further amended by Amendment No. 2 thereto, dated May 2, 2024 (the "ATM Sales Agreement"). On October 24, 2025, we filed prospectus supplement no. 2 to the Registration Statement, relating to the offer and sale of up to $4,019,597 of shares of our Common Stock pursuant to the ATM Sales Agreement, and on October 29, 2025, we filed

prospectus supplement no. 3 to the Registration Statement, relating to the offer and sale of up to $2,894,225 of shares of our Common Stock pursuant to the ATM Sales Agreement. Sales of Common Stock, if any, under the prospectus supplements will be made by any method permitted that is deemed an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act. The Sales Agent is not required to sell any specific amount, but will act as our Sales Agent using commercially reasonable efforts consistent with its normal trading and sales practices. The Sales Agent will be entitled to compensation at a commission rate equal to up to 3.0% of the gross sales price per share of Common Stock sold. During the three months and year ended December 31, 2025, we sold approximately 17,291,307 and 17,998,117 shares of our Common Stock, respectively, pursuant to the ATM Sales Agreement and received net proceeds of approximately $6.5 million and $6.8 million, respectively. During the first quarter of 2026, we sold approximately 10,204,319 shares of our Common Stock pursuant to the ATM Sales Agreement and received net proceeds of approximately $2.3 million.

Rasayana License Agreement

On February 17, 2026, we entered into the Rasayana License Agreement with Rasayana, pursuant to which we received an upfront payment of $300,000 from Rasayana. In addition, we are entitled to receive from Rasayana development milestone payments of up to an aggregate of $16.0 million and sales milestone payments of up to an aggregate of $22.0 million upon achievement of certain development and net sales milestones with respect to Products. In addition, during the Royalty Term (as such term is defined in the Rasayana License Agreement), we are entitled to receive tiered royalties ranging from low to mid single digits on net sales of a Product. We will also be entitled to receive a certain percentage of any Sublicense Revenue (as such term is defined in the Rasayana License Agreement) received by Rasayana or its affiliates.

Under the terms and conditions of the Rasayana License Agreement, Rasayana will assume all responsibility and costs for the development and commercialization of the Products. Accordingly, going forward, we do not expect to continue to conduct research and development activities, including conducting further clinical studies, with respect to SYN-020, and do not expect to incur material expenditures in connection therewith.

See the section entitled "Our Current Collaborations - Rasayana License Agreement" in Part I Item 1 of this Auual Report on Form 10-K for additional information regarding the Rasayana License Agreement.

Our Current Product Pipeline

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*Based on management's current beliefs and expectations

allo-HCT allogeneic hematopoietic cell transplant. CSR clinical study report. HNSCC head and neck squamous cell carcinoma. IV intravenous. IVit intravitreal. For other abbreviations see the text.

¹Final Phase 1b/2a study cohort contingent on grant funding or partnership.

²Pursuant to the Rasayana License Agreement, commencing February 7, 2026, Rasayana is responsible for all development and commercialization efforts, including all costs related thereto, of SYN-020, and is obligated to use commercially reasonable efforts to meet certain specified development milestones, as more particularly set forth in the Rasayana License Agreement.

Additional products with preclinical proof-of-concept include SYN-006 (carbapenemase) to prevent aGVHD, CDI, and microbiome damage in patients treated with carbapenem antibiotics and SYN-007 (ribaxamase) DR to prevent antibiotic associated diarrhea with oral β-lactam antibiotics.

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 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 valuation of IPR&D and contingent consideration.

IPR&D

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. 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. 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.

We conduct an impairment test of IPR&D on an annual basis as of October 1 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.

Results of Operations

Years Ended December 31, 2025 and 2024

General and Administrative Expenses

General and administrative expenses increased to $15.4 million for the year ended December 31, 2025, from $7.4 million for the year ended December 31, 2024. This increase of 109% is primarily comprised of the contingent consideration adjustment of $9.0 million due to the VIRAGE Phase 2b clinical trial of VCN-01 (zabilugene almadenorepvec) in PDAC achieving its primary survival and safety endpoints, offset by a decrease in compensation costs, investor relations costs, consulting fees, and lower director and officer insurance. The charge relating to stock-based compensation expense was $379,000 for the year ended December 31, 2025, compared to $438,000 for the year ended December 31, 2024.

Research and Development Expenses

Research and development expenses decreased to $8.6 million for the year ended December 31, 2025, from $12.0 million for the year ended December 31, 2024. This decrease of 28% is primarily the result of lower clinical trial expenses related to the completion of our VIRAGE Phase 2b clinical trial of VCN-01 (zabilugene almadenorepvec) in PDAC, lower clinical trial expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients and lower indirect cost related to compensation, offset by higher patent expenses related to SYN-020. We anticipate research and development expense to decrease in 2026 as a result of the workforce reduction Plan that was implemented on September 30, 2025, the completion of our VIRAGE Phase 2b clinical trial of VCN-01 and our focus on regulatory interactions around potential pivotal clinical trials of VCN-01 in PDAC and retinoblastoma, the planning for VCN-01 manufacturing scale-up activities, and continuing to support our other preclinical and discovery initiatives. In addition, pursuant to the terms of the Rasayana License Agreement that we entered into in February 2026, we will not continue to conduct research and development activities with respect to SYN-020, and do not expect to incur material expenditures in connection therewith since Rasayana is now responsible for all such expenditures including patent expenses. Research and development expenses also include a charge relating to non-cash stock-based compensation expense of $281,000 for the year ended December 31, 2025, compared to $233,000 for the year ended December 31, 2024.

The following table sets forth our research and development expenses directly related to our therapeutic areas for the years ended December 31, 2025 and 2024. These direct expenses were external costs associated with preclinical studies and clinical trials. Indirect research and development costs related to employee costs, facilities, manufacturing, stock-based compensation and research and development support services are not directly allocated to specific drug candidates.

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IPR&D and Goodwill Impairment

During the year ended December 31, 2024, we experienced a sustained decline in the quoted market price of our common stock and we deemed this to be a triggering event for impairment. We performed an interim impairment analysis using the "Income approach" that requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post - launch cash flows and a risk - adjusted weighted average cost of capital. We concluded that the in-process R&D with a carrying value of $19.8 million was written down to its estimated fair value of $18.6 million and an impairment charge of $1.3 million was recorded, and goodwill with a carrying value of $5.6 million was written down to its estimated fair value of zero and an impairment charge of $5.6 million was recorded during the year ended December 31, 2024. The decrease in the valuation was primarily driven by an increase in the discount rate which was impacted by an increase in the company specific risk premium, and not by material changes to the clinical and administrative operations of the business. There were no impairments during the year ended December 31, 2025.

Total Other Income

Other income was $312,000 for the year ended December 31, 2025, compared to other income of $693,000 for the year ended December 31, 2024. Other income for the year ended December 31, 2025 is primarily comprised of interest income of $287,000 and foreign currency exchange gain of $25,000. Other income for the year ended December 31, 2024 is primarily comprised of interest income of $697,000 and foreign currency exchange loss of $4,000.

Net Loss

Our net loss for the year ended December 31, 2025 was $23.7 million, or ($1.96) per common share, compared to $25.7 million, or ($19.03) per common share for the year ended December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2025, we had a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, we have experienced significant losses and incurred negative cash flows since inception. We have incurred an accumulated deficit of $358.7 million as of December 31, 2025, 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 $13.1 million as of December 31, 2025, an increase of $1.4 million from December 31, 2024. During the years ended December 31, 2025 and 2024, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $23.7 million and $25.7 million, respectively.

We believe our cash position of approximately $15.1 million as of early March 2026, will allow us to fund our operations into the first quarter of 2027; however, the current cash will only be sufficient to run certain clinical trials and no assurances can be provided and our cash could differ materially from our expectations based on various factors, many of which are out of our control. Despite this liquidity position, we continue to experience operating losses and face significant uncertainties related to our business model, market conditions, clinical trial outcomes, FDA review timelines and strategic initiatives. These factors raise substantial doubt about our ability to continue as a going concern beyond the next twelve months without additional capital or other strategic actions. Management has developed plans intended to mitigate these uncertainties, including pursuing strategic collaborations, securing additional financing, and prioritizing key development programs. While management believes these plans are probable of being successfully implemented, there can be no assurance that such actions will be sufficient to alleviate the going concern uncertainty.

Based on our current plans, we expect that our cash and cash equivalents will be sufficient to cover overhead costs, close out of the VIRAGE Phase 2b clinical trial, commence and complete a potential Phase 2a study evaluating VCN-01 dosing frequency, exploratory VCN-01 (zabilugene almadenorepvec) manufacturing scale-up activities, regulatory interactions regarding proposed VCN-01 clinical trials in PDAC and retinoblastoma, and preclinical studies supporting VCN-01 and VCN-12, the first candidate from our VCN-X discovery program. We believe that the cash will also be sufficient to fund our committed obligations under the terms of the Purchase Agreement related to the Acquisition, but will not be sufficient for additional trials of VCN-01 or SYN-004 (ribaxamase), or to complete the last cohort of the Phase 1b/2a clinical trial of SYN-004, which are expected to require significant cash expenditures. Following the completion of our ongoing Phase 1 and Phase 2b clinical trials for VCN-01, and preclinical studies supporting VCN-01 and our 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 is focused on the advancement of VCN-01, will allow us to meet our financial obligations, further advance key products, and maintain our planned operations. Based upon our current available funding and our focus on our clinical development of VCN-01 we do not anticipate that we will fund the last cohort of the Phase 1b/2a clinical trial of SYN-004 and enrollment in this cohort will not commence unless we obtain grant funding, or find a licensee or partner for the SYN-004 development program. However, the amount of additional capital needed by us will also depend upon the costs to advance our VCN-01 clinical programs. We may attempt to utilize the ATM Sales Agreement or seek to raise additional capital in other financing transactions, neither of which is guaranteed. Use of the ATM Sales Agreement is limited by certain restrictions and management's plan does not rely on additional capital from any 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, 2024, our only source of cash was from sales of our Common Stock through the ATM Sales Agreement pursuant to which we sold 569,000 shares of our Common Stock for net proceeds of $3.6 million and from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares of the Common Stock for gross proceeds of $2.5 million (net proceeds of $2.0 million, after deducting underwriting discounts and estimated expenses). During the three months and year ended December 31, 2025, we sold approximately 17,291,307 and 17,998,117 shares of our Common Stock, respectively, pursuant to the ATM Sales Agreement and received net proceeds of approximately $6.5 million and $6.8 million, respectively. During the first quarter 2026, we sold approximately 10,204,319 shares of our Common Stock pursuant to the ATM Sales Agreement and received net proceeds of approximately $2.3 million. During the year ended December 31, 2025, our primary sources of cash were the approximately $6.8 million in net proceeds received from sales of our Common Stock under the ATM Sales Agreement, approximately $3.9 million in net proceeds from the exercise of the Existing Warrants by holders pursuant to the Inducement Agreement, the $1.7 million received for the Research and Development rebate program offset by the $1.4 million grant receivable recorded in November 2025, $1.4 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government's Ministry of Science and, in May 2025, we closed our May 2025 Offering of 6,818,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying common stock purchase warrants to purchase an aggregate of 6,818,180 shares of our Common Stock for gross proceeds of $7.5 million (net proceeds of $6.7 million, after deducting underwriting discounts and expenses).

Pursuant to the terms of the Purchase Agreement entered into in connection with the Acquisition, we were required to pay up to $70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings of which to date $7.3 million has been paid and an additional $5.0 million has been earned but deferred. In September 2022, we received approval from the FDA to proceed with the Phase 2 clinical trial of VCN-01 in metastatic pancreatic ductal adenocarcinoma (mPDAC). Due to this approval, we paid Grifols $3.0 million in the fourth quarter 2022. In August 2023, we initiated patient dosing in the U.S. in our Phase 2 clinical trial of VCN-01 in mPDAC. As a result, payment was made subsequent to September 30, 2023 in the amount of $3.25 million. During the three months ended June 30, 2025, we met the primary survival and safety endpoints in our VIRAGE Phase 2b clinical trial evaluating our lead product candidate VCN-01. As a result of achieving the primary survival and safety endpoints in the Phase 2b clinical trial, we were obligated to pay Grifols $6.0 million. On August 5, 2025, we and Grifols agreed to defer the $6.0 million milestone payment into three payments, as follows: $500,000 was paid in August 2025, $500,000 was paid in December 2025, and the remaining $5.0 million payment has been deferred, pending ongoing discussion with Grifols.

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 Sales Agreement 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 and may need to abandon some of our development programs, cease operations, sell or otherwise liquidate our assets or reorganize the Company, or complete a combination of the foregoing.

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. 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 anticipate that our current cash of approximately $15.1 million as of early March 2026 will allow us to fund our operations into the first quarter of 2027, including overhead costs, close out of the VIRAGE Phase 2b clinical trial, exploratory VCN-01 manufacturing scale-up activities, regulatory interactions regarding proposed VCN-01 clinical trials in PDAC and retinoblastoma, and preclinical studies supporting VCN-01 and VCN-12, the first candidate from our VCN-X discovery program. We believe the cash will also be sufficient to fund our committed obligations under the terms of the Purchase Agreement related to the Acquisition; however, payment of the $5.0 million owed to Grifols will significantly deplete our cash and cash equivalents, which could materially and adversely affect our liquidity and limit our ability to fund operations or meet other financial obligations. 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 included in this Annual Report 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 candidates once regulatory approval is received. If we fail to obtain additional funding for our 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 initiate or complete future registrational studies for VCN-01, any potential future trials of SYN-004 (ribaxamase) including Phase 3 clinical programs of SYN-004 (ribaxamase) for prevention of CDI or the Phase 1b/2a clinical study of SYN-004 (ribaxamase) in allogeneic HCT recipients. Therefore, we do not intend to commence future new studies of VCN-01 (zabilugene almadenorepvec) or SYN-004 (ribaxamase) until we are confident that we have funding necessary to complete such trials. We are actively pursuing additional equity or debt financing opportunities, 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, licensing arrangements, public or private sales of our equity (including through the ATM Sales Agreement) or debt and other sources. Such additional financing opportunities might not be available to us when and if needed, on acceptable terms or at all. We cannot assure that we will meet the requirements for use of the ATM Sales Agreement 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 Sales Agreement due to the market value of our common stock held by non-affiliates. Even if we meet the requirements for use of the ATM Sales Agreement, there can be no assurance that we will be able to raise funds through the sale of shares of common stock through the ATM Sales Agreement. 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

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The following table summarizes our cash flows for the periods presented (in thousands):

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Cash Used in Operating Activities

Net cash used in operating activities was $16.7 million and $16.9 million during the years ended December 31, 2025 and 2024, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 (zabilugene almadenorepvec) our lead product candidate. Cash used in operating activities for the years ended December 31, 2025 decreased compared to the same period in 2024 due primarily to lower research and development expenses and a decrease in interest income, which led to a decrease in net loss.

Cash Used in Investing Activities

Cash used in investing activities during the years ended December 31, 2025 and 2024 was $35,000 and $1,000, respectively, for equipment purchases.

Cash Provided by Financing Activities

Cash provided by financing activities was $18.2 million during the year ended December 31, 2025 compared to $5.5 million during the year ended December 31, 2024. Cash provided by financing activities during the year ended December 31, 2025 included at the market offering proceeds of $6.8 million from sales of 17,998,117 shares of our Common Stock under the ATM Sales Agreement, $1.7 million received for the Research and Development rebate program offset by the $1.6 million grant receivable recorded in November 2025, $1.5 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government's Ministry of Science and, in May 2025, we closed our May 2025 Offering of 6,818,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying Common Warrants to purchase an aggregate of 6,818,180 shares of the Common Stock for gross proceeds of $7.5 million (net proceeds of $6.7 million, after deducting underwriting discounts and estimated expenses) and net proceeds from warrant inducement of $3.9 million offset by payments related to loans extended by certain Spanish institutions of $70,000 and payment of contingent consideration to Grifols of $1.0 million pursuant to the Purchase Agreement.

License and Contractual Agreement Obligations

We have entered into several license and collaborative agreements for the right to use research, technology and patents. Some of these license and collaborative agreements may contain milestones. The specific timing of such milestones cannot be predicted and are dependent on future developments as well as regulatory actions which cannot be predicted with certainty (including actions which may never occur). Further, under the terms of certain licensing agreements, we may have the obligation to pay certain milestones contingent upon the achievement of specific levels of sales.

Off-Balance Sheet Arrangements

During the years ended December 31, 2025 and 2024, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Consulting Fees

In November 2017, we engaged a regulatory consultant to assist in our efforts to prepare, file and obtain FDA approval for ribaxamase. The term of the engagement was on a monthly basis, provided that either party may terminate the agreement at any time by providing the other party a six-month notice period. We were obligated to pay the consultant a monthly retainer in addition to the success fee payments of up to an aggregate of $4,500,000 for attainment of certain regulatory milestones. We do not deem the contingent fee is probable at this time.