Synaptogenix Inc

Previous wording

The unaudited financial statements for the three months ended March 31, 2024 and 2023 include a summary of our significant accounting policies and should be read in conjunction with the discussion below and our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in the financial statements. All such adjustments are of a normal recurring nature.

Current wording

The unaudited financial statements for the six months ended June 30, 2024 and 2023 include a summary of our significant accounting policies and should be read in conjunction with the discussion below and our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in the financial statements. All such adjustments are of a normal recurring nature.

Previous wording

During the three months ended March 31, 2024 we redeemed $3,000,000 of the Series B Preferred Stock and $87,500 of accrued dividends by issuing 106,126 shares of Common Stock through installment conversions and proportionately relieved $2,455,656 of discount related to the redeemed Series B Preferred Stock. During the three months ended March 31, 2024, we recognized a deemed dividend of $130,959 related to cash premiums.

Current wording

During the six months ended June 30, 2024 we redeemed $6,000,000 of the Series B Preferred Stock and $122,500 of accrued dividends by issuing 274,219 shares of Common Stock through installment conversions and proportionately relieved $4,911,312 of discount related to the redeemed Series B Preferred Stock. During the six months ended June 30, 2024, we recognized a deemed dividend of $251,694 related to cash premiums.

Previous wording

During the three months ended March 31, 2023 we redeemed $0 of the Series B Preferred Stock and recognized $266,074 of accrued dividends.

Current wording

During the six months ended June 30, 2023 we redeemed $0 of the Series B Preferred Stock and recognized $689,649 of accrued dividends.

Previous wording

As of March 31, 2024 we have accrued a liability for installment payments owed to investors in either cash or shares of $6,015,115.

Current wording

As of June 30, 2024 we have accrued a liability for installment payments owed to investors in either cash or shares of $8,829,761.

Previous wording

Pursuant to the terms of the 2022 Services Agreement, WCT provided services to enroll approximately 12 2022 Study subjects. The first 2022 Study site was initiated during the third quarter of 2022. As of March 31, 2024, we incurred approximately $1.6 million of cumulative expenses associated with the 2022 Study. We terminated the 2022 Services Agreement in December 2022. Of the total $1.6 million incurred for the trial as of March 31, 2024, $0 and approximately $124,000 is reflected in the statement of operations for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Pursuant to the terms of the 2022 Services Agreement, WCT provided services to enroll approximately 12 2022 Study subjects. The first 2022 Study site was initiated during the third quarter of 2022. As of June 30, 2024, we incurred approximately $1.6 million of cumulative expenses associated with the 2022 Study. We terminated the 2022 Services Agreement in December 2022. Of the total $1.6 million incurred for the trial as of June 30, 2024, $0 and approximately $33,000 is reflected in the statement of comprehensive loss for the three months ended June 30, 2024 and 2023, respectively and $0 and approximately $117,000 is reflected in the statement of comprehensive loss for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

On February 23, 2022, we announced our collaboration with Cleveland Clinic to pursue possible treatments for MS, and on July 19, 2023, we announced that we had entered into an agreement with Cleveland Clinic to conduct a Phase 1 trial of Bryostatin-1 in MS. Cleveland Clinic will manage the clinical trial’s implementation, including an IND submission to the FDA and patient enrollment. The total estimated costs associated with this collaboration are approximately $2.0 million. As of March 31, 2024, we have paid Cleveland Clinic approximately $375,000 which was expensed during the current quarter.

Current wording

On February 23, 2022, we announced our collaboration with Cleveland Clinic to pursue possible treatments for MS, and on July 19, 2023, we announced that we had entered into an agreement with Cleveland Clinic to conduct a Phase 1 trial of Bryostatin-1 in MS. Cleveland Clinic will manage the clinical trial’s implementation, including an IND submission to the FDA and patient enrollment. The total estimated costs associated with this collaboration are approximately $2.0 million. As of June 30, 2024, we have incurred expenses due to Cleveland Clinic approximately $590,000 of which $215,000 was expensed during the three months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2024, we incurred $609,249 in research and development expenses as compared to $877,717 for the three months ended March 31, 2023, a decrease of approximately 30.6%. These expenses were incurred primarily in connection with developing the potential AD therapeutic product and the initiation of the MS trial with Cleveland Clinic. Of these expenses, for the three months ended March 31, 2024, $421,823 was incurred principally relating to our current MS clinical trial and our storage of drug product, $170,444 for clinical consulting services, $7,104 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, 9,878 for development of alternative drug supply with Stanford University; comparatively, for the three months ended March 31, 2023, $675,262 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $81,746 for clinical consulting services, $5,261 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $15,722 for development of alternative drug supply with Stanford University and $99,726 of non-cash stock options compensation expense.

Current wording

For the three months ended June 30, 2024, we incurred $342,068 in research and development expenses as compared to $307,211 for the three months ended June 30, 2023, an increase of approximately 11.3%. These expenses were incurred primarily in connection with developing the potential AD therapeutic product and the initiation of the MS trial with Cleveland Clinic. Of these expenses, for the three months ended June 30, 2024, $244,447 was incurred principally relating to our current MS clinical trial and our storage of drug product, $82,281 for clinical consulting services, $7,469 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $7,871 for development of alternative drug supply with Stanford University; comparatively, for the three months ended June 30, 2023, $167,495 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $74,121 for clinical consulting services, $4,986 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $10,746 for development of alternative drug supply with Stanford University and $49,863 of non-cash stock options compensation expense.

Previous wording

We incurred $1,082,244 and $2,044,224 of general and administrative expenses for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 47.1%. During the three months ended March 31, 2024, $342,659 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $319,762 for the three months ended March 31, 2023; $113,656 was incurred for legal expenses versus $281,681 for the 2023 comparable period. The higher legal fees for 2023 is based upon the prior year’s increased fees for special stockholder vote requirements and for regulatory compliance; $262,002 was incurred for outside operations consulting services during the three months ended March 31, 2024, versus $250,300 for the comparable period in 2023; $34,881 was incurred for travel expenses during the three months ended March 31, 2024, versus $22,897 for the comparable period in 2023 as post-COVID travel has increased; $164,732 was incurred for investor relations services during the three months ended March 31, 2024, versus $184,661 for the comparable period in 2023; $20,713 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services during the three months ended March 31, 2024, versus $121,324 for the comparable period in 2023. The decrease for the current period is primarily attributable to additional audit work for the November Private Placement and auditor change in 2023; $154,965 was incurred for insurance during the three months ended March 31, 2024, versus $193,723 for the comparable period in 2023; $(25,771) was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other during the three months ended March 31, 2024, versus $124,821 for the comparable period in 2023. We overpaid franchise taxes which have been credited for the current fiscal quarter; and $14,407 was recorded as non-cash stock options compensation expense during the three months ended March 31, 2024, versus $545,055 for the comparable period in 2023.

Current wording

We incurred $1,238,899 and $1,522,502 of general and administrative expenses for the three months ended June 30, 2024 and 2023, respectively, a decrease of approximately 18.6%. During the three months ended June 30, 2024, $327,892 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $328,330 for the three months ended June 30, 2023; $170,344 was incurred for legal expenses versus $211,635 for the 2023 comparable period. The higher legal fees for 2023 is based upon the prior year’s increased fees for special stockholder vote requirements and for regulatory compliance; $230,769 was incurred for outside operations consulting services during the three months ended June 30, 2024, versus $222,515 for the comparable period in 2023; $22,306 was incurred for travel expenses during the three months ended June 30, 2024, versus $51,151 for the comparable period in 2023 as Company officers and directors conducted overseas due diligence for strategic investments; $56,203 was incurred for investor relations services during the three months ended June 30, 2024, versus $55,967 for the comparable period in 2023; $134,484 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services during the three months ended June 30, 2024, versus $63,885 for the comparable period in 2023. The increase for the current period is primarily attributable to additional audit work for the November Private Placement and auditor change; $154,264 was incurred for insurance during the three months ended June 30, 2024, versus $193,441 for the comparable period in 2023. The decrease is attributable to lower premiums; $139,217 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other during the three months ended June 30, 2024, versus $111,025 for the comparable period in 2023; and $3,420 was recorded as non-cash stock options compensation expense during the three months ended June 30, 2024, versus $284,553 for the comparable period in 2023, as options granted during the 2023 period partially vested upon issuance.

Previous wording

We recognized total other income of $1,484,795 for the three months ended March 31, 2024 as compared to a total other income of $1,210,157 for the three months ended March 31, 2023, which consisted, for 2024 and 2023, of interest income on funds deposited in interest bearing money market accounts and investments in short-term US treasury bills and changes in fair value of warrant liability and derivative liability. The increase in interest income and unrealized gains on treasury bills totaling $463,395 for the three months ended March 31, 2023 is primarily attributable to the increase in money market interest income rates. The total increase is primarily attributable to the increase in interest income of $18,679, the unrealized gains in marketable securities of $48,359 and the increase in change in fair value of derivative liability of $746,200 partially offset by the decrease in change in fair value of warrant liability of $530,000.

Current wording

We recognized total other income of $307,658 for the three months ended June 30, 2024 as compared to total other expenses of $2,264,241 for the three months ended June 30, 2023, which consisted, for 2024 and 2023, of interest income on funds deposited in interest bearing money market accounts and investments in short-term US treasury bills and changes in fair value of warrant and derivative liabilities. The decrease in interest income and unrealized gains on treasury bills totaling $106,501 for the three months ended June 30, 2024 is primarily attributable to the decrease in cash balances over the period. The total increase is primarily attributable to the increase in change in fair value of derivative liability of $2,625,400 and the increase in fair value of warrant liability of $53,000 partially offset by the decrease in interest income of $96,651 and share of loss in equity investment of $9,850.

Previous wording

Total operating expenses for the three months ended March 31, 2024 were $1,691,494 as compared to $2,921,941 for the three months ended March 31, 2023, a decrease of approximately 42.1%. The decrease in total operating expenses is due to the decrease in research and development activities and general and administrative expenses.

Current wording

Total operating expenses for the six months ended June 30, 2024 were $3,272,461 as compared to $4,751,654 for the six months ended June 30, 2023, a decrease of approximately 31.1%. The decrease in total operating expenses is due to the decrease in research and development and general and administrative expenses.

Previous wording

Our research and development expenses have significantly decreased as our current Phase 2 clinical trial for AD was concluded by the end of 2023 and our Phase 2 dose ranging study was discontinued partially offset by the initiation of our MS clinical trial. Other development expenses might increase, as our resources permit, in order to advance our potential products. We are continuing to determine how to proceed with respect to our other current development programs for Bryostatin-1.

Current wording

Our research and development expenses have decreased as our current Phase 2 clinical trial for AD was concluded by the end of 2023 and our Phase 2 dose ranging study was discontinued while we initiated our MS clinical trial. Other development expenses might increase, as our resources permit, in order to advance our potential products. We are continuing to determine how to proceed with respect to our other current development programs for Bryostatin-1.

Previous wording

We recognized losses of $206,699 and $1,711,784 for the three months ended March 31, 2024 and 2023, respectively. The decreased loss was primarily attributable to the increase in other income and the decreases in net research and development expenses associated with our clinical trials and decrease in general and administrative expenses.

Current wording

We recognized losses of $1,480,008 and $5,805,738 for the six months ended June 30, 2024 and 2023, respectively. The decreased loss was primarily attributable to the decrease in research and development and general and administrative expenses and the increase in other income.

Previous wording

Since inception, we have incurred negative cash flows from operations. As of March 31, 2024, we had working capital of $22,528,628 as compared to working capital of $26,256,291 as of December 31, 2023. The $3,727,663 decrease in working capital was primarily attributable to approximately $1.7 million of operating expenses, increase in preferred stock liabilities of approximately $2.6 million and uses of cash of approximately $0.7 million partially offset by non-cash expenses of approximately $0.9 million and interest income of approximately $0.4 million.

Current wording

Since inception, we have incurred negative cash flows from operations. As of June 30, 2024, we had working capital of $18,472,861 as compared to working capital of $26,256,291 as of December 31, 2023. The $7,783,430 decrease in working capital was primarily attributable to approximately $3.3 million of operating expenses, increase in preferred stock liabilities of approximately $5.0 million partially offset by non-cash expenses of approximately $0.1 million and interest income of approximately $0.8 million.

Previous wording

We expect that our current cash and cash equivalents of approximately $25.9 million will be sufficient to support our projected operating requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q, which would include the continuing development of Bryostatin-1, our novel drug candidate targeting the activation of PKCε, our initiation and possible development of a therapeutic for MS and other possible therapeutics.

Current wording

We expect that our current cash and cash equivalents of approximately $24.4 million will be sufficient to support our projected operating requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q, which would include the continuing development of Bryostatin-1, our novel drug candidate targeting the activation of PKCε, our initiation and possible development of a therapeutic for MS and other possible therapeutics.

Previous wording

Cash used in operating activities was $1,831,541 for the three months ended March 31, 2024, compared to $1,695,812 for the three months ended March 31, 2023. The $135,729 increase primarily resulted from the increase in prepaid expenses of approximately $0.5 million, the increase in accounts payable and accrued expenses of approximately $0.3 million, the changes in fair value of non-cash warrant and derivative liabilities totaling approximately $0.2 and the decrease in non-cash stock-based compensation and consulting fees of approximately $0.6 million, partially offset by the decrease in net loss of approximately $1.5 million.

Current wording

Cash used in operating activities was $2,685,075 for the six months ended June 30, 2024, compared to $2,935,299 for the six months ended June 30, 2023. The $250,224 decrease primarily resulted from the decreased net loss of approximately $4.5 million and increase in accounts payable and accrued expenses of approximately $0.3 million partially offset by the increase in prepaid expenses of approximately $0.6 million, the changes in fair value of non-cash warrant and derivative liabilities totaling approximately $3.0 million and the decrease in non-cash stock-based compensation and consulting fees of approximately $1.0 million.

Previous wording

Net cash used in investing activities was $500,000 for the three months ended March 31, 2024 compared to $2,038 for the three months ended March 31, 2023. The cash used in investing activities for the three months ended March 31, 2024 was for the purchase of available for sale debt securities versus capital expenditures for three months ended March 31, 2023.

Current wording

Net cash used in investing activities was $1,000,000 for the six months ended June 30, 2024 compared to $2,707 for the six months ended June 30, 2023. The cash used in investing activities for the six months ended June 30, 2024 was for the purchase of available for sale debt securities versus capital expenditures for six months ended June 30, 2023.

Previous wording

Net cash used in financing activities was $0 for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Net cash used in financing activities was $0 for the six months ended June 30, 2024 compared to $1,641,064 for the six months ended June 30, 2023 which consists of redemptions of amounts due to preferred stock investors.