Item 2.01. Completion of Acquisition or Disposition
of Assets.
On March 10, 2022, Synthetic closed the Acquisition
(the “Closing”) and acquired all the outstanding shares of VCN. As consideration for the purchase of the VCN Shares, at the
Closing, Synthetic paid $4,700,000 (the “Closing Cash Consideration”) to Grifols Innovation and New Technologies Limited (“Grifols”),
the owner of approximately 86% of the equity of VCN, and issued to the remaining Sellers and certain key employees and consultants of
VCN the Closing Shares, representing 19.99% of the outstanding shares of Synthetic’s common stock on December 14, 2021, the date
of the Purchase Agreement. In addition to the consideration described above, under the terms of the Purchase Agreement, Synthetic assumed
up to $2,400,000 of existing liabilities of VCN and has agreed to make cash payments to Grifols upon the achievement of certain clinical
and commercialization milestones, all as described in more detail in the December 2021 Form 8-K.
The Purchase Agreement contains customary representations,
warranties and covenants of the Sellers and Synthetic. Subject to certain customary limitations, the Sellers have agreed to indemnify
Synthetic and its officers and directors against certain losses related to, among other things, breaches of their representations and
warranties, certain specified liabilities and the failure to perform covenants or obligations under the Purchase Agreement.
In connection with the Acquisition, prior to the
Closing Synthetic loaned VCN $425,000 to help finance the costs of certain of VCN’s research and development activities and, at
the Closing, VCN and Grifols entered into a sublease agreement for the sublease by VCN of the laboratory and office space currently occupied
by it as well as a transitional services agreement. As a Purchase Agreement post-Closing covenant, Synthetic has agreed to commit to fund
VCN’s research and development programs, including but not limited to VCN01 PDAC phase 2 trial, VCN01 RB pivotal trial and necessary
G&A within a budgetary plan of approximately $27.8 million.
The foregoing summary of the Purchase Agreement,
as amended, does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement that
is filed herewith as Exhibit 2.1 and the amendment thereto that is filed herewith as Exhibit 2.2, both of which are incorporated herein
by reference.
The representations, warranties and covenants
contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit
of the parties to the Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Purchase
Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Purchase Agreement,
and not to provide investors with any other factual information regarding Synthetic, VCN or either of their businesses, and should be
read in conjunction with the disclosures in Synthetic’s periodic reports and other filings with the SEC.
About VCN
VCN is a private, clinical-stage biopharmaceutical
company which is developing new agents for the treatment of certain cancers based on oncolytic adenoviruses with high potency and selectivity.
VCN’s lead product candidate, VCN-01, is an oncolytic adenovirus being studied in clinical trials for cancers with high unmet need,
including pancreatic carcinoma and retinoblastoma. Oncolytic viruses have a unique mechanism of action as compared to other cancer drugs
and can detect cancer mutations, replicate or self-amply within cancer cells, break down (i.e., lyse) the membranes of the cells thereby
killing them and then propagate the oncolytic effect to neighboring cancer cells. The therapeutic effect is therefore amplified within
tumors reducing the viral dose needed to reach tumors. Currently, VCN has four exclusive patent licenses in independent technologies developed
internally and in collaboration with the Virotherapy Group of the Catalan Institute of Oncology (ICO-IDIBELL) that result in enhanced
antitumoral potency of oncolytic adenoviruses.