the estimated effects of the Transaction;

upon Closing and the purchase of Seres common stock pursuant to the Securities Purchase Agreement, the receipt of an aggregate of $154.8 million in cash proceeds from SPN;

upon Closing, the Company’s repayment in full of the indebtedness under its Credit Agreement and Guaranty, dated April 27, 2023, by and among Seres, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto (the “Lenders”) and Oaktree Fund Administration, LLC (inclusive of fees of $21.7 million consisting of prepayment related fees and the unaccreted portion of the final fee under the Oaktree Credit Agreement and estimated accrued interest as of the payoff date of $3.7 million) (the “Oaktree Credit Agreement”); and

following the Closing, obligations of Seres to pay certain amounts incurred on behalf of Nestlé Health Science, including amounts associated with the Profit Sharing Payments, the MSK Agreement, the Company’s obligation to pay 80.1% of the costs associated with the Company’s Waltham Lease and Seres’ ongoing post-marketing safety study of the Product from the date of Closing until December 31, 2025.

the audited consolidated historical financial statements of the Company for the years ended December 31, 2023 and December 31, 2022 contained in the Company’s Annual Report on Form 10-K filed for the year ended December 31, 2023 filed with the SEC on March 5, 2024, and;

the unaudited consolidated financial statements and accompanying notes for the six months ended June 30, 2024 contained in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2024 filed with the SEC on August 13, 2024.

Transaction Accounting Adjustments – Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction.

Autonomous Entity Adjustments – Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity.

the sale of the assets and liabilities of the VOWST Business pursuant to the Purchase Agreement required to present it on a discontinued operations basis in accordance with ASC 205-20, Presentation of Financial Statements—Discontinued Operations (“ASC 205”); and

adjustments required to record the estimated impact of the cash proceeds received in connection with the transaction, net of transaction costs, accrued liabilities due to SPN – related party, the Securities Purchase Agreement and the repayment of the Company’s indebtedness under the Oaktree Credit Agreement.

Consideration Received:

Upfront payment, net of intercompany accounts and Bacthera settlement

Prepaid milestone

Deferred revenue from termination of ROW and US License Agreement

Settlement of net collaboration payable as of close

Premium (discount) on equity financing

Termination of collaboration agreements - deferred income

Accrued liabilities due to SPN - related party

Total consideration received

Net assets transferred:

Inventory

Prepaid expenses and other current assets

Property and equipment, net

Operating lease assets

Restricted cash

Other non-current assets

Accrued expenses and other current liabilities

Operating lease liabilities

Net assets transferred

Estimated Pre-tax Gain

(In thousands, except share and per share data)

ASSETS

Current assets:

Cash and cash equivalents

Collaboration receivable - related party

Inventories

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Operating lease assets

Restricted cash

Other non-current assets

Total assets

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

Accrued expenses and other current liabilities

Accrued liabilities due to SPN - related party

Operating lease liabilities, current

Deferred income - related party

Total current liabilities

Long term portion of note payable, net of discount

Operating lease liabilities, net of current portion

Deferred revenue - related party

Accrued liabilities due to SPN - related party, net of current portion

Other long-term liabilities

Total liabilities

Commitments and contingencies

Stockholders’ deficit:

Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2024

Common stock, $0.001 par value; 360,000,000 shares authorized; 151,633,922 historical shares issued and outstanding at June 30, 2024; 165,919,637 pro forma shares issued and outstanding at June 30, 2024

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total shareholders’ equity

Total liabilities and stockholders’ equity

Historical

Seres

(In thousands, expect share and per share data)

Expenses:

Research and development expenses

General and administrative expenses

Collaboration (profit) loss sharing - related party

Total operating expenses

Loss from operations

Other income, net

Interest income

Interest expense

Other income

Total other (expense) income, net

Net loss from continuing operations

Net loss from continuing operations per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

Other comprehensive income (loss):

Unrealized gain on investments, net of tax of $0

Currency translation adjustment

Total other comprehensive income (loss)

Comprehensive loss

Historical

Seres

(In thousands, expect share and per share data)

Revenues:

Collaboration revenue - related party

Total revenues

Expenses:

Research and development expenses

General and administrative expenses

Collaboration (profit) loss sharing - related party

Total operating expenses

Loss from operations

Other (expense) income, net:

Interest income

Interest expense

Other (expense) income

Total other (expense) income, net

Net loss from continuing operations

Net loss from continuing operations per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

Other comprehensive income (loss):

Unrealized gain on investments, net of tax of $0

Currency translation adjustment

Total other comprehensive income (loss)

Comprehensive loss

Historical

Seres

(In thousands, expect share and per share data)

Revenues:

Collaboration revenue - related party

Total revenues

Expenses:

Research and development expenses

General and administrative expenses

Collaboration (profit) loss sharing - related party

Total operating expenses

Loss from operations

Other (expense) income, net:

Interest income

Interest expense

Other (expense) income

Total other (expense) income, net

Net loss from continuing operations

Net loss from continuing operations per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

Other comprehensive income (loss):

Unrealized gain on investments, net of tax of $0

Currency translation adjustment

Total other comprehensive income (loss)

Comprehensive loss

Reflects the consolidated balance sheet as of June 30, 2024, and consolidated statement of operations for the six months ended June 30, 2024, contained in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2024 filed with the SEC on August 13, 2024, as well as our consolidated statements of operations for the years ended December 31, 2023, and 2022 contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 5, 2024.

Reflects the discontinued operations of the VOWST Business, including the associated assets, liabilities and equity. Line items on the Company’s pro forma combined balance sheet as of June 30, 2024 denoted with the following symbols represent the following:

* - Represents net assets that are transferring to Nestlé Health Science in connection with the Transaction.

† - Represents pre-existing assets and liabilities that are being settled in connection with the Transaction and are included in consideration received.

‡ - The accrued expenses and other current liabilities line item contains components of both consideration received and net assets transferred to Nestlé Health Science. The collaboration payable to SPN of ($43.1) million will be settled as of the date of Closing and included in consideration received. The net assets transferred of ($29.1) million related to accrued expenses that will transfer to Nestlé Health Science as of the date of Closing.

Reflects the additional transaction accounting adjustments on the Company’s pro forma combined balance sheet, which shows how the sale of the VOWST Business might have affected Seres’ historical financial statements if the sale had been completed at an earlier time.

To record the estimated net cash proceeds from the Transaction of $154.8 million, which includes a) $100.0 million, less $17.9 million associated with the net collaboration payable and $2.3 million settlement payment related to the Bacthera Agreement (assuming an exchange rate of 0.8503 Swiss francs to $1), b) $60.0 million of cash proceeds associated with the Prepaid Milestone, and c) $15.0 million of cash proceeds from the issuance of shares of Seres common stock pursuant to the Securities Purchase Agreement. These cash proceeds have been reduced by a) $102.5 million to repay principal under the Oaktree Credit Agreement that will be repaid in connection with the Transaction, b) $21.7 million consisting of prepayment related fees and the unaccreted portion of the final fee under the Oaktree Credit Agreement and estimated accrued interest as of the payoff date of $3.7 million and c) $3.0 million of estimated transaction costs that will be incurred at the date of Closing and paid in cash. The offsetting amount of $23.9 million consists of a reduction of $102.5 million to the long term portion of note payable, net of discount, offset by the increase in the fair value for the shares issued of $13.5 million recorded in common stock and additional paid-in capital and the remaining amount of $112.9 million recorded to the ‘‘accumulated deficit’’ line item.

Represents certain pro forma adjustments to demonstrate the repayment of the indebtedness under the Oaktree Credit Agreement, including a) a reduction in principal amount of $102.5 million, included in the “long term portion of note payable, net of discount” line item and b) a reduction of $2.1 million of deferred issuance costs associated with the Oaktree Credit Agreement, included in the “other non-current assets” line item.

Represents the Company’s estimated liabilities due to SPN, including $33.0 million associated with the Profit Sharing Payments, $2.8 million associated with the MSK Agreement, $6.6 million related to the settlement of the collaboration payable to SPN for the quarter-ended June 30, 2024, $1.7 million associated with the Company’s obligation to pay 80.1% of the costs associated with the Company’s Waltham Lease through December 31, 2025, $1.5 million associated with accrued bonuses for transferred employees due to SPN, and $1.1 million associated with the Company’s ongoing post-marketing safety study of the Product. The offsetting amount of $46.7 million has been recorded to the “accumulated deficit” line item.

Reflects an increase in Seres common stock and additional paid-in capital from the issuance of 14,285,715 shares of Seres common stock to SPN pursuant to the Securities Purchase Agreement, based on the closing market value of $0.95 per share of Seres common stock on September 30, 2024 multiplied by 14,285,715 shares. The premium on issuance of $1.5 million has been included as a component of the “accumulated deficit” line item and increases the Company’s gain on the disposition of the VOWST Business. A $0.50 increase in the Company’s stock price would result in a discount on issuance of common shares of $5.7 million, with a corresponding decrease to the gain on disposition of the VOWST Business of $7.1 million. A $0.50 decrease in the Company’s stock price would result in a premium on issuance of common shares by $8.6 million, with a corresponding increase to the gain on disposition of the VOWST Business of $7.1 million.

Represents costs associated with the Transaction that will be incurred prior to the date of Closing. As the Company expects to pay cash for these expenses separately and apart from the Transaction, the Company has recognized these amounts in the accrued expenses and other “current liabilities” line item.

Reflects the discontinued operations of the VOWST Business related to the results of operations on the Company’s pro forma combined statements of operations.

Represents interest expense associated with borrowings under the Oaktree Credit Agreement. The Company has reflected this interest expense in discontinued operations, as the Oaktree Credit Agreement under the Oaktree Credit Agreement is being repaid in connection with the Transaction.

Represents an unrealized foreign currency gain associated with an accrued milestone payment to be made by the Company in connection with the Bacthera Agreement.

Reflects the additional transaction accounting adjustments on the Company’s pro forma combined statements of operations, which shows how the sale of the VOWST Business might have affected Seres’ historical financial statements if the sale had been completed at an earlier time.

The number of shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the issuance of 14,285,715 shares of Seres common stock to SPN pursuant to the Securities Purchase Agreement. For the six months ended June 30, 2024 and for the year ended December 31, 2023, the pro forma weighted average shares have been calculated as follows:

Historical weighted average number of Seres common shares outstanding

Common stock issued to Nestle in connection with the Share Purchase Agreement, assuming consummation of the trasnaction as of January 1, 2023

Pro forma combined weighted average number of common shares outstanding

The net loss from continuing operations per share attributable to common stockholders (basic and diluted) has been calculated based on the weighted average common shares outstanding (basic and diluted) of historical Seres and the weighted average common shares outstanding (basic and diluted) of pro forma Seres, which includes the adjustment to reflect the issuance of 14,285,715 shares of Seres common stock to SPN pursuant to the Securities Purchase Agreement.

Net loss from continuing operations

Net loss from continuing operations per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

Net loss from continuing operations

Net loss from continuing operations per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted