Synaptogenix Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Youshould read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous 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.

Current wording

The unaudited financial statements for the nine months ended September 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

On November 17, 2022, we entered into the November Purchase Agreement with the November Investors, pursuant to which we agreed to sell to the November Investors (i) an aggregate of 15,000 shares of Series B Preferred Stock and (ii) November Warrants to acquire up to an aggregate of 77,419 shares of Common Stock. We received total gross proceeds of approximately $15 million from the November Private Placement.

Current wording

On November 17, 2022, we entered into the Series B Purchase Agreement with the Series B Investors, pursuant to which we agreed to sell to the Series B Investors (i) an aggregate of 15,000 shares of Series B Preferred Stock and (ii) Series B Warrants to acquire up to an aggregate of 77,419 shares of Common Stock. We received total gross proceeds of approximately $15 million from the Series B Offering.

Previous wording

The terms of the Series B Preferred Stock are as set forth in the Certificate of Designations. The Series B Preferred Stock will be convertible into Series B Preferred Shares at the election of the holder at any time at the Conversion Price. The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). We will be required to redeem the Series B Preferred Stock in 15 equal monthly installments, commencing on June 1, 2023. The amortization payments due upon such redemption are payable, at our election, in cash, or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) a 15% discount to the average of the three lowest closing prices of the Common Stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) the lower of $31.25 and $4.30, which is equal to 20% of the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) on April 14, 2023, the date of receipt of Nasdaq Stockholder Approval; provided that if the amount set forth in clause B is the lowest effective price, we will be required to pay the amortization payment in cash. We may require holders to convert their Series B Preferred Stock into Series B Preferred Shares if the closing price of the Common Stock exceeds $290.625 per share for 20 consecutive trading days and the daily trading volume of the Common Stock exceeds 100,000 shares per day during the same period and certain equity conditions described in the Certificate of Designations are satisfied.

Current wording

The Series B Preferred Stock matured on September 9, 2024, and no shares of Series B Preferred Stock remain outstanding. The terms of the Series B Preferred Stock were as set forth in the Series B Certificate of Designations. The Series B Preferred Stock was convertible into Series B Preferred Shares at the election of the holder at any time at the Series B Conversion Price. The Series B Conversion Price was subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). We were required to redeem the Series B Preferred Stock in 15 equal monthly installments, commencing on June 1, 2023. The amortization payments due upon such redemption were payable, at our election, in cash, or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Series B Conversion Price then in effect and (ii) the greater of (A) a 15% discount to the average of the three lowest closing prices of the Common Stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) the lower of $31.25 and $4.30, which equals 20% of the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) on April 14, 2023, the date of receipt of Nasdaq Stockholder Approval; provided that if the amount set forth in clause B is the lowest effective price, we will be required to pay the amortization payment in cash. We had the ability to require holders to convert their Series B Preferred Stock into Series B Preferred Shares if the closing price of the Common Stock exceeded $290.625 per share for 20 consecutive trading days and the daily trading volume of the Common Stock exceeded 4,000 shares per day during the same period and certain equity conditions described in the Series B Certificate of Designations were satisfied.

Previous wording

The holders of the Series B Preferred Stock are entitled to dividends of 7% per annum, compounded monthly, which are payable in cash or shares of Common Stock at our option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series B Preferred Stock will accrue dividends at the rate of 15% per annum. The holders of Series B Preferred Stock have no voting rights on account of the Series B Preferred Stock, other than with respect to certain matters affecting the rights of the Series B Preferred Stock. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of Common Stock issuable upon conversion of, or as part of any amortization payment under, the Certificate of Designations or November Warrants.

Current wording

The holders of the Series B Preferred Stock were entitled to dividends of 7% per annum, compounded monthly, which were payable in cash or shares of Common Stock at our option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series B Certificate of Designations), the Series B Preferred Stock would have accrued dividends at the rate of 15% per annum. The holders of Series B Preferred Stock had no voting rights on account of the Series B Preferred Stock, other than with respect to certain matters affecting the rights of the Series B Preferred Stock.

Previous wording

The Certificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to the November Registration Rights Agreement (defined below) and our failure to pay any amounts due to the holders of the Series B Preferred Stock when due. In connection with a Triggering Event, each holder of Series B Preferred Stock will be able to require us to redeem in cash any or all of the holder’s Series B Preferred Stock at a premium set forth in the Certificate of Designations.

Current wording

The Series B Certificate of Designations included certain Triggering Events (as defined in the Series B Certificate of Designations), including, among other things, the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to the Series B Registration Rights Agreement (defined below) and our failure to pay any amounts due to the holders of the Series B Preferred Stock when due. In connection with a Triggering Event, each holder of Series B Preferred Stock will be able to require us to redeem in cash any or all of the holder’s Series B Preferred Stock at a premium set forth in the Series B Certificate of Designations.

Previous wording

We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters.

Current wording

We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Series B Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters.

Previous wording

The November Warrants are exercisable for Warrant Shares immediately at an exercise price of $193.75 per share (the “Exercise Price”) and expire five years from the date of issuance. The Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Exercise Price (subject to certain exceptions).

Current wording

The Series B Warrants are exercisable for Series B Warrant Shares at an initial exercise price of $$2.8586 per share (as adjusted from time to time pursuant to the terms of the Series B Warrants, the “Series B Exercise Price”) and expire five years from the date of issuance. The Series B Exercise Price was reduced based upon the Reverse Stock Split and the Series C Private Placement (see below). The Series B Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series B Exercise Price (subject to certain exceptions). There is no established public trading market for the Series B Warrants and the Company does not intend to list the Series B Warrants on any national securities exchange or nationally recognized trading system.

Previous wording

In connection with the November Purchase Agreement, we and the November Investors entered into a Registration Rights Agreement (the “November Registration Rights Agreement”) on November 17, 2022. Under the terms of the November Registration Rights Agreement, we agreed to register 200% of the Series B Preferred Shares, the Warrant Shares and the shares of Common stock issuable as amortization payments as well as any shares of Common stock paid as dividends. We filed a registration statement for the resale of such securities on December 16, 2022. We also agreed to other customary obligations regarding registration, including indemnification and maintenance of the effectiveness of the registration statement.

Current wording

In connection with the Series B Purchase Agreement, we and the Series B Investors entered into a Registration Rights Agreement (the “Series B Registration Rights Agreement”) on November 17, 2022. Under the terms of the Series B Registration Rights Agreement, we agreed to register 200% of the Series B Preferred Shares, the Series B Warrant Shares and the shares of Common Stock issuable as amortization payments as well as any shares of Common Stock paid as dividends. We filed a registration statement for the resale of such securities on December 16, 2022. We also agreed to other customary obligations regarding registration, including indemnification and maintenance of the effectiveness of the registration statement.

Previous wording

In connection with the November Private Placement, pursuant to an Engagement Letter with Katalyst Securities LLC (the “November Placement Agent”), we paid the November Placement Agent (i) a cash fee equal to 7% of the gross proceeds from any sale of securities in the November Private Placement and (ii) warrants to purchase shares of Common Stock equal to 3% of the number of shares of Common Stock that the Series B Preferred Shares are initially convertible into, with an exercise price of $193.75 per share and a five-year term.

Current wording

In connection with the Series B Offering, pursuant to an Engagement Letter, between the Company and Katalyst Securities LLC (the “Series B Placement Agent”), we paid the Series B Placement Agent (i) a cash fee equal to 7% of the gross proceeds from any sale of securities in the Series B Offering and (ii) warrants to purchase shares of Common Stock equal to 3% of the number of shares of Common Stock that the Series B Preferred Shares are initially convertible into, with an exercise price of $2.8586 per share, pursuant to the above, and a five-year term.

Previous 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.

Current wording

During the three and nine months ended September 30, 2024, the Company redeemed $0 and $6,000,000, respectively, of the Series B Preferred Stock and $274,140 and $396,640, respectively of accrued dividends by issuing 100,000 and 374,219 shares, respectively, of Common Stock through installment conversions and proportionately relieved $0 and $4,911,312 of discount, respectively, related to the redeemed Series B Preferred Stock. During the three and nine months ended September 30, 2024, the Company recognized a deemed dividend of $19,392 and $271,086, respectively, related to cash premiums.

Previous 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.

Current wording

As of September 30, 2024 and December 31, 2023, the Company has accrued a liability for installment payments owed to investors in either cash or shares of $0 and $3,395,945, respectively. The Company paid approximately $8.8 million to fully satisfy its obligations to the Series B preferred stockholders. Subsequent to September 30, 2024, and as of November 12, 2024, the Company has issued 0 shares of Common Stock in partial satisfaction of the accrued preferred redemption liability.

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 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.

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 September 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 September 30, 2024, $0 and approximately $14,000 is reflected in the statement of comprehensive loss for the three months ended September 30, 2024 and 2023, respectively and $0 and approximately $131,000 is reflected in the statement of comprehensive loss for the nine months ended September 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 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.

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. Cleveland Clinic has enrolled three subjects and has dosed two to - date, with the total planned enrollment in the MS Trial of 20 subjects. The total estimated costs associated with this collaboration are approximately $2.0 million. As of September 30, 2024, we have incurred expenses due to Cleveland Clinic approximately $590,000 of which $0 was expensed during the three months ended September 30, 2024.

Previous wording

Total operating expenses for the three months ended June 30, 2024 were $1,580,967 as compared to $1,829,713 for the three months ended June 30, 2023, a decrease of approximately 13.6%. The decrease in total operating expenses is due to the decrease in general and administrative expenses partially offset by an increase in research and development expenses.

Current wording

Total operating expenses for the three months ended September 30, 2024 were $1,359,669 as compared to $1,429,792 for the three months ended September 30, 2023, a decrease of approximately 4.9%. The decrease in total operating expenses is due to the decrease in general and administrative expenses partially offset by an increase in research and development expenses.

Previous 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.

Current wording

For the three months ended September 30, 2024, we incurred $222,897 in research and development expenses as compared to $212,103 for the three months ended September 30, 2023, an increase of approximately 5.1%. 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 September 30, 2024, $31,630 was incurred principally relating to our current MS clinical trial and our storage of drug product, $173,797 for clinical consulting services, $7,534 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $9,936 for development of alternative drug supply with Stanford University; comparatively, for the three months ended September 30, 2023, $95,248 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $96,883 for clinical consulting services, $5,041 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, and $14,931 for development of alternative drug supply with Stanford University.

Previous 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.

Current wording

We incurred $1,136,772 and $1,217,689 of general and administrative expenses for the three months ended September 30, 2024 and 2023, respectively, a decrease of approximately 6.6%. During the three months ended September 30, 2024, $315,830 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $300,598 for the three months ended September 30, 2023; $113,173 was incurred for legal expenses versus $180,566 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; $258,990 was incurred for outside operations consulting services during the three months ended September 30, 2024, versus $247,344 for the comparable period in 2023; $26,226 was incurred for travel expenses during the three months ended September 30, 2024, versus $48,148 for the comparable period in 2023 as Company officers and directors conducted overseas due diligence for strategic investments; $95,314 was incurred for investor relations services during the three months ended September 30, 2024, versus $62,643 for the comparable period in 2023; $58,995 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services during the three months ended September 30, 2024, versus $59,812 for the comparable period in 2023; $161,467 was incurred for insurance during the three months ended September 30, 2024, versus $190,786 for the comparable period in 2023. The decrease is attributable to lower premiums; $102,986 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other during the three months ended September 30, 2024, versus $112,728 for the comparable period in 2023; and $3,791 was recorded as non-cash stock options compensation expense during the three months ended September 30, 2024, versus $15,064 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 $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.

Current wording

We recognized total other loss of $4,382,344 for the three months ended September 30, 2024 as compared to total other income of $2,192,995 for the three months ended September 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 and offering costs. The decrease in interest income and unrealized gains on treasury bills totaling $249,314 for the three months ended September 30, 2024 is primarily attributable to the decrease in cash balances over the period and lower interest rates. The total increased loss is primarily attributable to the increase in change in fair value of derivative liability of $892,000 and the increase in fair value of warrant liability of $991,000, loss on issuance of Series C Preferred Stock of approximately $3.8 million, warrant issuance costs of $618,375 and share of loss in equity investment of $12,025.

Previous wording

We recognized losses of $1,273,309 and $4,093,954 for the three months ended June 30, 2024 and 2023, respectively. The decreased loss was primarily attributable to the decrease in research and development expenses and the increase in other income partially offset by a decrease in general and administrative expenses.

Current wording

We recognized losses of $5,742,013 and income of $763,203 for the three months ended September 30, 2024 and 2023, respectively. The increased loss was primarily attributable to the increase in research and development expenses and the increase in other loss partially offset by a decrease in general and administrative expenses.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

Previous 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.

Current wording

Total operating expenses for the nine months ended September 30, 2024 were $4,632,130 as compared to $6,181,446 for the nine months ended September 30, 2023, a decrease of approximately 25.1%. The decrease in total operating expenses is due to the decrease in research and development and general and administrative expenses.

Previous wording

For the six months ended June 30, 2024, we incurred $951,317 in research and development expenses as compared to $1,184,928 for the six months ended June 30, 2023, a decrease of approximately 19.7%. 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 six months ended June 30, 2024, $666,270 was incurred principally relating to our current MS clinical trial and our storage of drug product, $252,725 for clinical consulting services, $14,573 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $17,749 for development of alternative drug supply with Stanford University; comparatively, for the six months ended June 30, 2023, $842,756 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $155,868 for clinical consulting services, $10,247 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $26,468 for development of alternative drug supply with Stanford University and $149,589 of non-cash stock options compensation expense.

Current wording

For the nine months ended September 30, 2024, we incurred $1,174,214 in research and development expenses as compared to $1,397,031 for the nine months ended September 30, 2023, a decrease of approximately 15.9%. 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 nine months ended September 30, 2024, $697,899 was incurred principally relating to our current MS clinical trial and our storage of drug product, $426,523 for clinical consulting services, $22,107 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $27,685 for development of alternative drug supply with Stanford University; comparatively, for the nine months ended September 30, 2023, $938,003 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $252,752 for clinical consulting services, $15,288 of amortization of prepaid licensing fees relating to the Stanford License Agreement and Mount Sinai Agreement, $41,399 for development of alternative drug supply with Stanford University and $149,589 of non-cash stock options compensation expense.

Previous wording

We incurred $2,321,144 and $3,566,726 of general and administrative expenses for the six months ended June 30, 2024 and 2023, respectively, a decrease of approximately 34.9%. During the six months ended June 30, 2024, $670,552 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $648,092 for the six months ended June 30, 2023; $284,000 was incurred for legal expenses versus $493,316 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; $492,770 was incurred for outside operations consulting services during the six months ended June 30, 2024, versus $472,815 for the comparable period in 2023; $57,187 was incurred for travel expenses during the six months ended June 30, 2024, versus $74,048 for the comparable period in 2023 as Company officers and directors conducted overseas due diligence for strategic investments; $220,935 was incurred for investor relations services during the six months ended June 30, 2024, versus $240,628 for the comparable period in 2023; $155,197 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services during the six months ended June 30, 2024, versus $185,209 for the comparable period in 2023; $309,229 was incurred for insurance during the six months ended June 30, 2024, versus $387,164 for the comparable period in 2023. The decrease is attributable to lower premiums; $113,447 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other during the six months ended June 30, 2024, versus $235,846 for the comparable period in 2023. The decrease is attributable to credits for franchise taxes paid during the 2023 period credited to 2024; and $17,827 was recorded as non-cash stock options compensation expense during the six months ended June 30, 2024, versus $829,608 for the comparable period in 2023, as options granted during the 2023 period partially vested upon issuance.

Current wording

We incurred $3,457,916 and $4,784,415 of general and administrative expenses for the nine months ended September 30, 2024 and 2023, respectively, a decrease of approximately 27.7%. During the nine months ended September 30, 2024, $986,382 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $948,689 for the nine months ended September 30, 2023; $397,123 was incurred for legal expenses versus $673,882 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; $751,761 was incurred for outside operations consulting services during the nine months ended September 30, 2024, versus $720,159 for the comparable period in 2023; $83,412 was incurred for travel expenses during the nine months ended September 30, 2024, versus $122,196 for the comparable period in 2023 as Company officers and directors conducted overseas due diligence for strategic investments; $316,249 was incurred for investor relations services during the nine months ended September 30, 2024, versus $303,271 for the comparable period in 2023; $214,192 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services during the nine months ended September 30, 2024, versus $245,021 for the comparable period in 2023; $470,695 was incurred for insurance during the nine months ended September 30, 2024, versus $577,950 for the comparable period in 2023. The decrease is attributable to lower premiums; $216,433 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other during the nine months ended September 30, 2024, versus $348,575 for the comparable period in 2023. The decrease is attributable to credits for franchise taxes paid during the 2023 period credited to 2024; and $21,618 was recorded as non-cash stock options compensation expense during the nine months ended September 30, 2024, versus $844,672 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 $1,792,453 for the six months ended June 30, 2024 as compared to total other expenses of $1,054,084 for the six 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 $48,063 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 $3,371,600 partially offset by the decrease in fair value of warrant liability of $477,000 and share of loss in equity investment of $18,450.

Current wording

We recognized total other loss of $2,589,891 for the nine months ended September 30, 2024 as compared to total other income of $1,138,911 for the nine months ended September 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 and offering costs. The decrease in interest income and unrealized gains on treasury bills totaling $278,927 for the nine months ended September 30, 2024 is primarily attributable to the decrease in cash balances over the period and lower interest rates. The total decreased income is primarily attributable to the increase in change in fair value of warrant liability of $314,000, loss on issuance of Series C Preferred Stock of approximately $3.8 million, warrant issuance costs of $618,375 and share of loss in equity investment of $30,475 partially offset by the change in fair value of deriviate liability of 1,091,000.

Previous 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.

Current wording

We recognized losses of $7,222,021 and $5,042,535 for the nine months ended September 30, 2024 and 2023, respectively. The increased loss was primarily attributable to the increase in other loss partially offset by the decrease in research and development and general and administrative expenses.

Previous 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.

Current wording

Since inception, we have incurred negative cash flows from operations. As of September 30, 2024, we had working capital of $21,939,418 as compared to working capital of $26,256,291 as of December 31, 2023. The $4,316,873 decrease in working capital was primarily attributable to approximately $4.6 million of operating expenses and redemptions of Series B preferred stock of approximately $8.8 million, partially offset by the dncrease in preferred stock liabilities of approximately $3.4 million, net proceeds from Series C preferred stock offering of approximately $4.5 million, non-cash expenses of approximately $0.1 million and interest income of approximately $1.1 million.

Previous 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.

Current wording

We expect that our current cash and cash equivalents of approximately $18.3 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 $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.

Current wording

Cash used in operating activities was $3,716,123 for the nine months ended September 30, 2024, compared to $4,107,209 for the nine months ended September 30, 2023. The $391,086 decrease primarily resulted from the and increase in accounts payable and accrued expenses of approximately $0.4 million and the increase in offering costs of approximately $4.6 million, partially offset by the increased net loss of approximately $2.2 million, increase in prepaid expenses of approximately $0.2 million, the changes in fair value of non-cash warrant and derivative liabilities totaling approximately $1.0 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 $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.

Current wording

Net cash used in investing activities was $1.0 million for the nine months ended September 30, 2024 compared to $2,707 for the nine months ended September 30, 2023. The cash used in investing activities for the nine months ended September 30, 2024 was for the purchase of available for sale debt securities versus capital expenditures for nine months ended September 30, 2023.

Previous 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.

Current wording

Net cash used in financing activities was $4,319,595 for the nine months ended September 30, 2024 compared to $1,641,015 for the nine months ended September 30, 2023 which consists of redemptions of amounts due to preferred stock investors.