Virios Therapeutics Inc

Previous wording

We are a development-stage biotechnology company focused on advancing novel antiviral therapies to treat diseases associated with activation of previously dormant herpesviruses that trigger an abnormal immune response such as FM and LC. Overactive immune response related to activation of tissue resident herpesvirus has been postulated to be a potential root cause of chronic illnesses such as FM, IBS, LC, chronic fatigue syndrome and other functional somatic syndromes, all of which are characterized by a waxing and waning manifestation of disease, often triggered by events which compromise the immune system. While not completely understood, there is general agreement in the medical community that activation of the herpesvirus is triggered by some form of environmental and/or health stressor. Our lead product candidates, IMC-1 and IMC-2, are novel, proprietary, fixed dose combinations of nucleoside analog, anti-herpes antivirals and the anti-inflammatory agent, celecoxib. IMC-1 is a novel combination of famciclovir and celecoxib intended to synergistically suppress herpesvirus activation and replication, with the end goal of reducing viral mediated disease burden. IMC-2 is a combination of valacyclovir and celecoxib that like IMC-1, is intended to synergistically suppress herpesvirus activation and replication with a more specific activity against the Epstein-Barr virus (herpesvirus HHV-4).

Current wording

We are a development-stage biotechnology company focused on advancing novel antiviral therapies to treat diseases associated with activation of previously dormant herpesviruses that trigger an abnormal immune response such as fibromyalgia (“FM”) and Long-COVID (“LC”). Overactive immune response related to activation of tissue resident herpesvirus has been postulated to be a potential root cause of chronic illnesses such as FM, irritable bowel diseases, LC, chronic fatigue syndrome and other functional somatic syndromes, all of which are characterized by a waxing and waning manifestation of disease, often triggered by events which compromise the immune system. While not completely understood, there is general agreement in the medical community that activation of the herpesvirus is triggered by some form of environmental and/or health stressor. Our lead product candidates, IMC-1 and IMC-2, are novel, proprietary, fixed dose combinations of nucleoside analog, anti-herpes antivirals and the anti-inflammatory agent, celecoxib. IMC-1 is a novel combination of famciclovir and celecoxib intended to synergistically suppress herpesvirus activation and replication, with the end goal of reducing viral mediated disease burden. IMC-2 is a combination of valacyclovir and celecoxib that like IMC-1, is intended to synergistically suppress herpesvirus activation and replication with a more specific activity against the Epstein-Barr virus (herpesvirus HHV-4).

Previous wording

As previously reported, in 2023, the Company received positive data from an exploratory, open-label, proof of concept study in LC funded by an unrestricted grant provided to the BHC. BHC is a non-profit, interdisciplinary Center of Excellence advancing the diagnosis and treatment of chronic fatigue disorders including myalgic encephalomyelitis/chronic fatigue syndrome, FM, post-viral syndromes, and related comorbidities. BHC enrolled female patients diagnosed with LC illness, otherwise known as PASC. Patients treated with a combination of Val/Cel exhibited clinically and statistically significant improvements in fatigue, pain, and symptoms of autonomic dysfunction as well as ratings of general well-being related to LC when treated open-label for 14 weeks, as compared to a control cohort of female LC patients matched by age and length of illness and treated with routine care. The statistically significant improvements in PASC symptoms and general health status were particularly encouraging given that the mean duration of LC illness was two years for both the treated and control cohort prior to enrollment in this study. Based on these data, the Company met with the FDA to discuss opening an investigational new drug application to formally assess treatment of symptoms associated with PASC using IMC-2. In December 2023, we received FDA feedback on our proposed Phase 2b study and project to commence this trial upon securing funding for the program. In addition, in August 2023,

Current wording

As previously reported, in 2023, the Company received positive data from an exploratory, open-label, proof of concept study in LC funded by an unrestricted grant provided to the Bateman Horne Center (“BHC”). BHC is a non-profit, interdisciplinary Center of Excellence advancing the diagnosis and treatment of chronic fatigue disorders including myalgic encephalomyelitis/chronic fatigue syndrome, FM, post-viral syndromes, and related comorbidities. BHC enrolled female patients diagnosed with LC illness, otherwise known as PASC. Patients treated with a combination of Val/Cel, as well as routine care, exhibited clinically and statistically significant improvements in fatigue, pain, and symptoms of autonomic dysfunction as well as ratings of general well-being related to LC when treated open-label for 14 weeks, as compared to a control cohort of female LC patients matched by age and length of illness and treated with routine care only. The statistically significant improvements in PASC symptoms and general health status were particularly encouraging given that the majority of patients in the study had been vaccinated for the COVID-19 virus and the mean duration of LC illness was two years for both the treated and control cohort prior to enrollment in this study. Based on these data, the Company met with the FDA to discuss opening an investigational new drug application to formally assess treatment of symptoms associated with PASC using IMC-2. In December 2023, we received FDA

Previous wording

we signed an unrestricted grant research agreement with BHC to conduct a second, investigator-initiated, randomized, double-blinded, placebo-controlled study of LC with IMC-2. Patient enrollment for this study began in the fourth quarter of 2023 and we expect results to be available in the second half of 2024.

Current wording

feedback on our proposed Phase 2b study and project to commence this trial upon securing funding for the program. In addition, in August 2023, we signed an unrestricted grant research agreement with BHC to conduct a second, investigator-initiated, randomized, double-blinded, placebo-controlled study of LC with IMC-2. BHC has completed patient enrollment for this study and we expect results to be available in October 2024.

Previous wording

We continue to be engaged with potential external entities who have an interest in partnering IMC-1 for the treatment of FM and we are actively exploring opportunities for IMC-2 for LC and complementary opportunities that will build shareholder value through strategic partnerships, collaborations or other transactions.

Current wording

We continue to explore complementary opportunities that will build shareholder value through strategic partnerships, collaborations or other transactions.

Previous wording

We have not generated revenues and have incurred losses since inception. Our net losses for the three and ended March 31, 2024 and 2023, were $1,291,335 and $1,516,864, respectively, and our accumulated deficit as of March 31, 2024 was $62,760,557. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue to develop and seek regulatory approvals for our product candidates. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

Current wording

We have not generated revenues and have incurred losses since inception. Our net losses for the three and six months ended June 30, 2024 and 2023, were $1,049,833 and $2,341,168, respectively, and $1,440,904 and $2,957,768, respectively, and our accumulated deficit as of June 30, 2024 was $63,810,390. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue to develop and seek regulatory approvals for our product candidates. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

Previous wording

As previously reported, on November 2, 2023, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that, for the previous 30 consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq. The letter stated that we had 180 calendar days, or until April 30, 2024 to regain compliance such that the closing bid price for our common stock is at least $1.00 for a minimum of 10 consecutive business days.

Current wording

As previously reported, on November 2, 2023, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, for the previous 30 consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq (the “Minimum Bid Price Requirement”). The letter stated that the Company had 180 calendar days, or until April 30, 2024 to regain compliance such that the closing bid price for the Company’s common stock is at least $1.00 for a minimum of 10 consecutive business days.

Previous wording

Three Months Ended March 31, 2024 and 2023

Current wording

Research and development expenses decreased by $0.2 million and $0.4 million for the three and six months ended June 30, 2024, respectively, compared to prior year periods. The decrease of $0.2 million for the three months ended June 30, 2024 was primarily due to decreases in expenses for drug development and manufacturing. The decrease of $0.4 million for the six months ended June 30, 2024 was primarily due to decreases in expenses for drug development and manufacturing of $0.2 million, toxicology studies of $0.1 million, regulatory consulting costs of $0.1 million and clinical trial cost of $0.1 million offset by an increase in costs associated with the grant to BHC for the second proof-of-concept study in LC of $0.1 million.

Previous wording

General and administrative expenses decreased by $0.1 million to $1.0 million for the three months ended March 31, 2024 from $1.1 million for the three months ended March 31, 2023 primarily due to a decrease in insurance expenses associated with being a public company.

Current wording

General and administrative expenses decreased by $0.2 million and $0.3 million for the three and six months ended June 30, 2024, respectively, compared to prior year periods. The decrease of $0.2 million for the three months ended June 30, 2024 was primarily due to decreases in insurance expenses associated with being a public company of $0.1 million and a decrease in accounting and legal fees of $0.1 million. The decrease of $0.3 million for the six months ended June 30, 2024 was primarily due to a decrease in insurance expenses associated with being a public company of $0.2 million and a decrease in accounting and legal fees of $0.1 million.

Previous wording

Since our inception, we have financed our operations through public offerings of common stock and proceeds from private placements of membership interests and convertible promissory notes. To date, we have not generated any revenue from the sale of products and we do not anticipate generating any revenue from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of March 31, 2024, our principal source of liquidity was our cash, which totaled $2.4 million.

Current wording

Since our inception, we have financed our operations through public offerings of common stock and proceeds from private placements of membership interests and convertible promissory notes. To date, we have not generated any revenue from the sale of products and we do not anticipate generating any revenue from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of June 30, 2024, our principal source of liquidity was our cash, which totaled $3.0 million.

Previous wording

There were no equity financings during the three months ended March 31, 2024 and 2023.

Current wording

On May 22, 2024, we closed a public offering raising gross proceeds of $1.7 million and net proceeds of approximately $1.4 million, after deducting placement agent fees and offering expenses. There were no equity financings during the six months ended June 30, 2023.

Previous wording

There were no debt financings during the three months ended March 31, 2024 and 2023. There was no debt outstanding at March 31, 2024 and December 31, 2023.

Current wording

There were no debt financings during the six months ended June 30, 2024 and 2023. There was no debt outstanding at June 30, 2024 and December 31, 2023.

Previous wording

within the next three to five months to remain a going concern and to further advance clinical development and to commercially develop its product candidates. Currently, the planned research and development activities include a potential submission of an investigational new drug application to formally access IMC-2 as a treatment for the symptoms associated with Long-COVID; continued salaries and benefits; and continued funding of the grant to the BHC for ongoing execution of their double-blinded, placebo controlled investigator-sponsored study of Long-COVID with the combination of valacyclovir and celecoxib which is expected to read out later this year.

Current wording

We estimate our current cash of $3.0 million at June 30, 2024 is not sufficient to fund operating expenses and capital requirements for at least the next 12 months. The Company will need to raise additional capital within the next six months to remain a going concern and to further advance clinical development and to commercially develop its product candidates. Currently, the research and development activities for the remainder of this fiscal year include the continued funding of the grant to BHC for the completion of their double-blinded, placebo controlled investigator-sponsored study of LC with the combination of valacyclovir and celecoxib; continued prototype development of IMC-2 to be used for a proposed Phase 2 LC study; and continued salaries and benefits.

Previous wording

We plan to raise additional capital to complete clinical development of our product candidates. We will need to finance our cash needs through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. To the extent that we raise additional funds by issuing equity securities, our shareholders will experience dilution. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. As a result, substantial doubt exists regarding our ability to continue as a going concern 12 months from the filing of this report on Form 10-Q. Failure to secure the necessary financing in a timely manner and on favorable terms could have a material adverse effect on the Company’s strategy and value and could require the delay of product development and clinical trial plans.

Current wording

We plan to raise additional capital to continue clinical development of our product candidates. We will need to finance our cash needs through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. If we raise additional funds by issuing equity securities, our shareholders will experience dilution. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. As a result, substantial doubt exists regarding our ability to continue as a going concern 12 months from the filing of this report on Form 10-Q. Failure to secure the necessary financing in a timely manner and on favorable terms could have a material adverse effect on the Company’s strategy and value and could require the delay of product development and clinical trial plans.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023, respectively:

Current wording

The following table summarizes our cash flows for the six months June 30, 2024 and 2023, respectively:

Previous wording

Cash Flows for the Three Months Ended March 31, 2024 and 2023

Current wording

Cash Flows for the Six Months Ended June 30, 2024 and 2023

Previous wording

For the three months ended March 31, 2023, net cash used in operations was $1.7 million and consisted of a net loss of $1.5 million and a net change in operating assets and liabilities of $0.4 million attributable to a net decrease in accounts payable and accrued liabilities of $0.5 million offset by a decrease in prepaid expenses and other assets of $0.1 million and non-cash items of $0.2 million attributable to share-based compensation.

Current wording

For the six months ended June 30, 2024, net cash used in operations was $1.7 million and consisted of a net loss of $2.3 million offset by a net change in operating assets and liabilities of $0.3 million attributable to an increase in accounts payable and accrued liabilities of $0.1 million and a decrease in prepaid expenses and other current liabilities of $0.2 million and non-cash items of $0.3 million attributable to share-based compensation.

Previous wording

For the three months ended March 31, 2024, net cash used in operations was $0.9 million and consisted of a net loss of $1.3 million offset by a net change in operating assets and liabilities of $0.2 million attributable to an increase in accounts payable and accrued liabilities of $0.2 million and non-cash items of $0.2 million attributable to share-based compensation.

Current wording

For the six months ended June 30, 2023, net cash used in operations was $2.4 million and consisted of a net loss of $2.9 million offset by a net change in operating assets and liabilities of $0.2 million attributable to a decrease in accounts payable and accrued liabilities of $0.5 million offset by a decrease in prepaid expenses of $0.7 million and non-cash items of $0.3 million attributable to share-based compensation.

Previous wording

The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. During the three months ended March 31, 2024, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the year ended December 31, 2023, which we included in our 2023 Amended Annual Report on Form 10-K/A.

Current wording

The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. During the six months ended June 30, 2024, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the year ended December 31, 2023, which we included in our 2023 Amended Annual Report on Form 10-K/A.

Previous wording

Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply until the fifth anniversary of the completion of our IPO or until we no longer meet the requirements for being an “emerging growth company,” whichever occurs first.

Current wording

Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply until the last day of the fiscal year following the fifth anniversary of the completion of our IPO or until we no longer meet the requirements for being an “emerging growth company,” whichever occurs first.