UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from __________________ to __________________

Commission File Number: 001-40458

SYNAPTOGENIX, INC.

(Exact name of registrant as specified in its charter)


Delaware	46-1585656
(State or other jurisdiction of incorporation or	(I.R.S. Employer
organization)	Identification No.)

1185 Avenue of the Americas, 3rd Floor
New York, New York	10036
(Address of principal executive offices)	(Zip code)

(973) 242-0005

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on
which registered


Common Stock, $0.0001 par value per share		SNPX		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of May 10, 2022, there were 6,809,647 shares of the registrant’s common stock, $0.0001 par value per share, issued and outstanding.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, the significant length of time associated with drug development and related insufficient cash flows and resulting illiquidity, our patent portfolio, our inability to expand our business, significant government regulation of pharmaceuticals and the healthcare industry, lack of product diversification, availability of our raw materials, existing or increased competition, stock volatility and illiquidity, and the our failure to implement our business plans or strategies. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2022. We advise you to carefully review the reports and documents we file from time to time with the SEC including our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to publicly release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

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TABLE OF CONTENTS


	Page
Part I – FINANCIAL INFORMATION	3

Item 1. Financial Statements (Unaudited)	3

Condensed Balance Sheets as of March 31, 2022 and December 31, 2021	3

Condensed Statements of Operations for the three months ended March 31, 2022 and 2021	4

Condensed Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021	5

Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021	6

Notes to Condensed Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3. Quantitative and Qualitative Disclosures about Market Risk	24

Item 4. Controls and Procedures	25

Part II – OTHER INFORMATION	25

Item 1. Legal Proceedings	25

Item 1A. Risk Factors	25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3. Defaults upon Senior Securities	26

Item 4. Mine Safety Disclosures	26

Item 5. Other Information	26

Item 6. Exhibits	27

Signatures	28

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

Synaptogenix, Inc.

Condensed Balance Sheets

(Unaudited)


	March 31,		December 31,
	2022		2021
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	31,281,733	$	34,213,989
Prepaid Clinical trial expenses		332,256		410,357
Prepaid expenses and other current assets		720,211		879,869

TOTAL CURRENT ASSETS		32,334,200		35,504,215

Fixed assets, net of accumulated depreciation		19,126		20,445

TOTAL ASSETS	$	32,353,326	$	35,524,660


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	401,349	$	1,296,506
Accrued expenses		267,989		698,406

TOTAL CURRENT LIABILITIES		669,338		1,994,912

Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock - 1,000,000 shares authorized as of March 31, 2022, $0.0001 par value; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021		—		—
Common stock - 150,000,000 shares authorized as of March 31, 2022, $0.0001 par value; 6,809,647 shares issued and outstanding as of March 31, 2022 and 6,730,180 shares issued and outstanding as of December 31, 2021.		682		674
Additional paid-in capital		49,102,898		47,670,744
Accumulated deficit		(17,419,592)		(14,141,670)

TOTAL SHAREHOLDERS' EQUITY		31,683,988		33,529,748

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	32,353,326	$	35,524,660

See accompanying notes to condensed financial statements.

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Synaptogenix, Inc.

Condensed Statements of Operations

(Unaudited)


	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2022		2021
OPERATING EXPENSES:
Research and development	$	1,486,074	$	1,151,780
General and administrative		1,796,458		2,003,413

TOTAL OPERATING EXPENSES		3,282,532		3,155,193

OTHER INCOME (EXPENSE):
Interest income		4,610		816
TOTAL OTHER INCOME (EXPENSE)		4,610		816

Net loss before income taxes		3,277,922		3,154,377

Provision for income taxes		—		—

Net loss attributable to common shareholders	$	3,277,922	$	3,154,377

PER SHARE DATA:

Basic and diluted loss per common share	$	0.47	$	1.06

Basic and diluted weighted average common shares outstanding		6,939,200		2,969,000

See accompanying notes to condensed financial statements.

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Synaptogenix, Inc.

Condensed Statements of Changes in Stockholders’ Equity

(Unaudited)


	Three Months Ended March 31, 2021
								Additional
	Common Stock				Preferred Stock			Paid-In		Accumulated
	Shares	Amount			Shares	Amount		Capital		Deficit		Total

Balance January 1, 2021	1,257,579	$	126		—	$	—	$	6,668,859	$	(1,530,473)	$	5,138,512

Stock based compensation	—		—		—		—		568,239		—		568,239

Issuance of warrants for consulting fees	—		—		—		—		344,167		—		344,167

Private placement of common stock and warrants	2,250,550		225		—		—		12,512,442		—		12,512,667

Net loss	—		—		—		—		—		(3,154,377)		(3,154,377)

Balance March 31, 2021	3,508,129	$	351	$	—	$	—	$	20,093,707	$	(4,684,850)	$	15,409,208


	Three Months Ended March 31, 2022
							Additional
	Common Stock			Preferred Stock			Paid-In		Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit		Total

Balance January 1, 2022	6,730,180	$	674	—	$	—	$	47,670,744	$	(14,141,670)	$	33,529,748

Stock based compensation	—		—	—		—		711,558		—		711,558

Issuance of warrants for consulting fees	—		—	—		—		71,603		—		71,603

Issuance of common stock for consulting fees	14,467		1	—		—		95,850		—		95,851

Exercise of common stock warrants	65,000		7	—		—		553,143		—		553,150

Net loss	—		—	—		—		—		(3,277,922)		(3,277,922)

Balance March 31, 2022	6,809,647	$	682	—	$	—	$	49,102,898	$	(17,419,592)	$	31,683,988

See accompanying notes to condensed financial statements.

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Synaptogenix, Inc.

Condensed Statements of Cash Flows

(Unaudited)


	Three Months Ended		Three Months Ended
	March 31, 2022		March 31, 2021
CASH FLOW USED IN OPERATING ACTIVITIES
Net loss	$	(3,277,922)	$	(3,154,377)
Adjustments to reconcile net loss to net
cash used by operating activities
Stock based compensation		711,558		568,239
Consulting services paid by issuance of common stock		95,850		—
Consulting services paid by issuance of common stock warrants		71,603		344,167
Depreciation expense		1,319		1,247
Change in assets and liabilities
Decrease (Increase) in prepaid expenses		237,759		(670,943)
Decrease in accounts payable		(895,156)		(501,372)
Decrease in accrued expenses		(430,417)		(173,677)
Total adjustments		(207,484)		(432,339)

Net Cash Used in Operating Activities		(3,485,406)		(3,586,716)

CASH FLOWS FROM FINANCING ACTIVITIES
Private placements of common stock and warrants		—		12,512,667
Proceeds from exercise of investor warrants		553,150		—
Grant funding received		—		127,445

Net Cash Provided by Financing Activities		553,150		12,640,112

NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS		(2,932,256)		9,053,396

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		34,213,989		5,795,055

CASH AND EQUIVALENTS AT END OF PERIOD	$	31,281,733	$	14,848,451

See accompanying notes to condensed financial statements.

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SYNAPTOGENIX, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

Unless the context otherwise indicates, references in these Notes to the accompanying financial statements to “we,” “us,” “our” and “the Company” refer to Synaptogenix, Inc. (formerly known as Neurotrope Bioscience, Inc.), a Delaware corporation. References to “Neurotrope”, “Parent Company” or “Parent” refer to Neurotrope, Inc., a Nevada corporation. Unless otherwise noted, all share and per share data give effect to the 1-for-4 reverse stock split of our common stock that was effected on May 19, 2021.

Note 1 – Organization, Business, Risks and Uncertainties:

Organization and Business

On May 17, 2020, Neurotrope, Inc. (“Neurotrope” or “the Parent”) announced plans for the complete legal and structural separation of its wholly owned subsidiary, Neurotrope Bioscience, Inc., from Neurotrope (the “Spin-Off”). Under the Separation and Distribution Agreement, Neurotrope planned to distribute all of its equity interest in this wholly owned subsidiary to Neurotrope’s stockholders. Following the Spin-Off, Neurotrope does not own any equity interest in the Company, and we operate independently from Neurotrope. On December 7, 2020, we became an independent company, Synaptogenix, Inc., a Delaware corporation (formerly known as Neurotrope Bioscience, Inc.) (the “Company” or “Synaptogenix”) when the Company filed an amended and restated certificate of incorporation which, among other things, changed its name to Synaptogenix, Inc. Our shares of common stock are listed on The Nasdaq Capital Market under the symbol “SNPX.”

Neurotrope Bioscience, Inc. was incorporated in Delaware on October 31, 2012 to advance new therapeutic and diagnostic technologies in the field of neurodegenerative disease, primarily Alzheimer’s disease (“AD”). The Company is collaborating with Cognitive Research Enterprises, Inc. (formerly known as the Blanchette Rockefeller Neurosciences Institute, or BRNI) (“CRE”), a related party, in this process. The exclusive rights to certain technology were licensed by CRE to the Company on February 28, 2013 (see Note 4 - Related Party Transactions and Licensing / Research Agreements).

In connection with the separation from Neurotrope, we entered into a Separation and Distribution Agreement and several other ancillary agreements. These agreements govern the relationship between the parties after the separation and allocate between the parties’ various assets, liabilities, rights and obligations following the separation, including employee benefits, intellectual property, information technology, insurance and tax-related liabilities.

Liquidity Uncertainties

As of March 31, 2022, the Company had approximately $31.3 million in cash and cash equivalents as compared to $34.2 million at December 31, 2021. The Company expects that its current cash and cash equivalents, approximately $30.5 million as of the date of this quarterly report, will be sufficient to support its projected operating requirements for at least the next 12 months from this date. The operating requirements include the current development plans for Bryostatin-1, our novel drug candidate targeting the activation of PKC epsilon and other development projects.

The Company expects to need additional capital in order to initiate and pursue potential additional development projects, including the continuing development beyond the current Phase 2 trial of Bryostatin-1. Any additional equity financing, if available, may not be on favorable terms and would likely be significantly dilutive to the Company’s current stockholders, and debt financing, if available, may involve restrictive covenants. If the Company is able to access funds through collaborative or licensing arrangements, it may be required to relinquish rights to some of its technologies or product candidates that the Company would otherwise seek to develop or commercialize on its own, on terms that are not favorable to the Company. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will likely have a materially adverse effect on our business, financial condition and results of operations.

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Other Risks and Uncertainties

The Company operates in an industry that is subject to rapid technological change, intense competition, and significant government regulation. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risk. Such factors include, but are not necessarily limited to, the results of clinical testing and trial activities, the ability to obtain regulatory approval, the limited supply of raw materials, the ability to obtain favorable licensing, manufacturing or other agreements, including risk associated with our CRE licensing agreement, and the ability to raise capital to achieve strategic objectives.

CRE has entered into a material transfer agreement with the National Cancer Institute of the National Institutes of Health (“NCI”), pursuant to which the NCI has agreed to supply bryostatin required for the Company’s pre-clinical research and clinical trials. This agreement does not provide for a sufficient amount of bryostatin to support the completion of all of the clinical trials that the Company is required to conduct in order to seek U.S. Food and Drug Administration (“FDA”) approval. Therefore, CRE or the Company would have to enter into one or more subsequent agreements with the NCI for the supply of additional amounts of bryostatin. If CRE or the Company were unable to secure such additional agreements, or if the NCI otherwise discontinues the supply, the Company would have to either secure another source of bryostatin or discontinue its efforts to develop and commercialize Bryostatin-1 for the treatment of AD. In June 2020, the Company entered into a supply agreement (the “Supply Agreement”) with BryoLogyx Inc. (“BryoLogyx”), pursuant to which BryoLogyx agreed to be the Company’s exclusive supplier of synthetic bryostatin. Pursuant to the terms of the Supply Agreement, the Company received its initial order of one gram synthetic bryostatin. See Note 3.

The Company also faces the ongoing risk that the coronavirus pandemic may slow, for an unforeseeable period, the conduct of the Company’s trial. In order to prioritize patient health and that of the investigators at clinical trial sites, we will monitor enrollment of new patients in our current Phase 2 clinical trial. In addition, some patients may be unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services. These and other factors outside of our control could delay our ability to conduct clinical trials or release clinical trial results. In addition, the effects of a pandemic resurgence may also increase non-trial costs such as insurance premiums, increase the demand for and cost of capital, increase loss of work time from key personnel, and negatively impact our key clinical trial vendors and suppliers.

Note 2 – Summary of Significant Accounting Policies:

Basis of Presentation:

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2022 may not be indicative of results for the full year. These unaudited condensed financial statements should be read in conjunction with the audited condensed financial statements and the notes to those statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on March 29, 2022.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make significant estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and as such these estimates may ultimately differ from actual results.

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Cash and Cash Equivalents and Concentration of Credit Risk:

The Company considers all highly liquid cash investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2022, the Company’s cash balances that exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”) were approximately $3.8 million. In addition, approximately $27.5 million included in cash and cash equivalents were invested in a money market fund, which is not insured under the FDIC.

Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Depreciation is computed on a straight line basis over the estimated useful life of the asset, which is deemed to be between three and ten years.

Research and Development Costs:

All research and development costs, including costs to maintain or expand the Company’s patent portfolio licensed from CRE are expensed when incurred. Non-refundable advance payments for research and development are capitalized because the right to receive those services represents an economic benefit. Such capitalized advances will be expensed when the services occur and the economic benefit is realized. There were no capitalized research and development services, other than non-refundable advance payments as mentioned below for Worldwide Clinical Trials, at March 31, 2022 and December 31, 2021.

Income Taxes:

The Company accounts for income taxes using the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts reportable for income tax purposes under the “Separate return method.” Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

The Company applies the provisions of FASB ASC 740-10, Accounting for Uncertain Tax Positions, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties, and accounting in interim periods, disclosure and transitions. The Company has determined that there are no significant uncertain tax positions requiring recognition in the accompanying financial statements. The tax period that is subject to examination by major tax jurisdictions is generally three years from the date of filing.

The Company had federal and state net operating loss carryforwards for income tax purposes of approximately $81.7 million for the period from October 31, 2012 (inception) through March 31, 2022. The net operating loss carryforwards resulted in a deferred tax asset of approximately $17.2 million at March 31, 2022. Income tax effects of share-based payments are recognized in the financial statements for those awards that will normally result in tax deductions under existing tax law. The deferred tax asset is offset by a full valuation allowance.

The Company may be subject to significant U.S. federal income tax-related liabilities with respect to the Spin-Off if there is a determination that the Spin-Off is taxable for U.S. federal income tax purposes. In connection with the Spin-Off, the Company believes substantially to the effect that, among other things, the Spin-Off should qualify as a tax-free transaction for U.S. federal income tax purposes under Section 355 and Section 368(a)(1)(D) of the Code. If the conclusions of the tax opinions are not correct, or if the Spin-Off is otherwise ultimately determined to be a taxable transaction, the Company would be liable for U.S. federal income tax related liabilities. Pursuant to the Separation and Distribution Agreement and the Tax Matters Agreement, Neurotrope agreed to indemnify Synaptogenix for certain liabilities, and Synaptogenix agreed to indemnify Neurotrope for certain liabilities, in each case for uncapped amounts. Indemnities that Synaptogenix may be required to provide Neurotrope are not subject to any cap, may be significant and could negatively impact Synaptogenix’s business, particularly with respect to indemnities provided in the Tax Matters Agreement. Third parties could also seek to hold Synaptogenix responsible for any of the liabilities that Neurotrope has agreed to retain. Further, the indemnity from Neurotrope may not be sufficient to protect Synaptogenix against the full amount of such liabilities, and Neurotrope may not be able to fully satisfy its indemnification obligations. Moreover, even if Synaptogenix ultimately succeeds in recovering from Neurotrope any amounts for which Synaptogenix is held liable, Synaptogenix may be temporarily required to bear these losses. At March 31, 2022 and as of the date of financial statement issuance date, the Company does not have any indemnification liabilities.

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Under Section 382 of the Internal Revenue Code of 1986, as amended, changes in the Company’s ownership may limit the amount of its net operating loss carryforwards that could be utilized annually to offset future taxable income, if any. This limitation would generally apply in the event of a cumulative change in ownership of the Company of more than 50% within a three-year period. In addition, the significant historical operating losses incurred by the Company may limit the amount of its net operating loss carryforwards that could be utilized annually to offset future taxable income, if any. The Company believes that operating loss carryforwards are limited under Section 382 limitations although Section 382 studies have not been conducted to determine the actual limitations.

Expense Reimbursement for Grant Award:

The Company reduces its research and development expenses by funding received or receivable from an NIH grant during the period that the expenses are incurred. The Company recognized grant related expense reductions during the three months ended March 31, 2022 of approximately $100,000 and $0 for the three months ended March 31, 2021. See Note 5, “Clinical Trial Services Agreements.”

Of the total $