Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Dec. 18, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity Registrant Name | Synaptogenix, Inc. | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,030,316 | |
Entity Central Index Key | 0001571934 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
No Trading Symbol Flag | true |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 26,999,862 | $ 17,382,038 |
Grant receivable | 861,852 | |
Prepaid expenses and other current assets | 1,264,721 | 494,112 |
TOTAL CURRENT ASSETS | 29,126,435 | 17,876,150 |
Fixed assets, net of accumulated depreciation | 23,446 | 21,671 |
TOTAL ASSETS | 29,149,881 | 17,897,821 |
CURRENT LIABILITIES | ||
Accounts payable | 1,190,285 | 413,081 |
Accrued expenses | 110,159 | 65,975 |
TOTAL CURRENT LIABILITIES | 1,300,444 | 479,056 |
Commitments and contingencies | ||
Parent company investment | 27,849,437 | 17,418,765 |
SHAREHOLDERS' EQUITY | ||
TOTAL LIABILITIES AND PARENT COMPANY EQUITY | $ 29,149,881 | $ 17,897,821 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
OPERATING EXPENSES: | |||||
Research and development | $ 410,292 | $ 845,797 | $ 1,004,762 | $ 4,273,531 | |
General and administrative - related party | 12,500 | 7,361 | 37,500 | ||
General and administrative | 1,778,187 | 2,131,205 | 5,731,238 | 5,165,096 | |
Stock-based compensation - related party | 47,695 | 21,001 | 173,161 | ||
Stock-based compensation | 387,927 | 877,525 | 1,428,022 | 3,173,519 | |
TOTAL OPERATING EXPENSES | 2,576,406 | 3,914,722 | 8,192,384 | 12,822,807 | |
OTHER INCOME (EXPENSE): | |||||
Warrant amendment expense | (1,700,000) | (1,700,000) | |||
Interest income | 6,797 | 90,159 | 153,305 | 301,620 | |
Net loss before income taxes | 4,269,609 | 3,824,563 | 9,739,079 | 12,521,187 | |
Net loss | $ 4,269,609 | $ 3,824,563 | $ 9,739,079 | $ 12,521,187 | |
PER SHARE DATA: | |||||
Basic and diluted loss per common share | $ (0.90) | $ (1.48) | $ (2.28) | $ (4.83) | |
Basic and diluted weighted average common shares outstanding | [1] | 4,755,100 | 2,588,020 | 4,274,200 | 2,593,500 |
[1] | Weighted-average common shares outstanding are based on the number of shares of Neurotrope, Inc. common stock outstanding as of the end of the period, adjusted for an assumed distribution ratio of 0.20 shares of our common stock for every one share of Neurotrope, Inc. common stock held on the record date for the Spin-Off. |
Condensed Statements of Opera_2
Condensed Statements of Operations (Parenthetical) | Sep. 30, 2020 |
Condensed Statements of Operations | |
Spin Off Ratio | 0.20 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOW USED IN OPERATING ACTIVITIES | |||
Net loss | $ (4,269,609) | $ (9,739,079) | $ (12,521,187) |
Adjustments to reconcile net loss to net cash used by operating activities | |||
Stock based compensation | 387,927 | 1,449,023 | 3,346,680 |
Consulting services paid by issuance of common stock | 120,000 | 352,748 | |
Consulting services paid by issuance of common stock warrants | 380,740 | 1,004,398 | |
Warrant amendment expense | 1,700,000 | 1,700,000 | |
Depreciation expense | 3,638 | 3,289 | |
Change in assets and liabilities | |||
(Increase) in grant receivable | (861,852) | ||
(Increase) in prepaid expenses | (770,609) | (380,623) | |
Increase (decrease) in accounts payable | 777,204 | (2,172,813) | |
Increase in accrued expenses | 44,184 | 371 | |
Total adjustments | 2,842,328 | 2,154,050 | |
Net Cash Used in Operating Activities | (6,896,751) | (10,367,137) | |
CASH FLOWS USED IN INVESTING ACTIVITIES | |||
Purchase of fixed assets | (5,413) | (5,214) | |
Net Cash Used in Investing Activities | (5,413) | (5,214) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Net transfer from (to) parent | 16,519,988 | 419,843 | |
Net Cash Provided by Financing Activities | 16,519,988 | 419,843 | |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 9,617,824 | (9,952,508) | |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 17,382,038 | 28,854,218 | |
CASH AND EQUIVALENTS AT END OF PERIOD | $ 26,999,862 | $ 26,999,862 | $ 18,901,710 |
Organization, Nature of Busines
Organization, Nature of Business, and Liquidity | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Nature of Business, and Liquidity | |
Organization, Nature of Business, and Liquidity | Note 1 – Organization, Nature of Business, and Liquidity: Organization & Business Synaptogenix was incorporated in Delaware on October 31, 2012. Synaptogenix was formed to advance new therapeutic and diagnostic technologies in the field of neurodegenerative disease, primarily Alzheimer’s disease (“AD”). Synaptogenix 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 Synaptogenix on February 28, 2013 (see Note 4 - Related Party Transactions and Licensing / Research Agreements). Synaptogenix was a wholly-owned subsidiary of Neurotrope, Inc. prior to the completion of the Spin-Off on December 7, 2020. The operations of Neurotrope, Inc. are almost exclusively those of Synaptogenix, Inc. On October 8, 2019, following the Parent’s announcement of top-line results from its Phase 2 study of Bryostatin‑1, its lead compound, in moderate to severe AD, the Company announced its plans to explore strategic alternatives to maximize shareholder value. The Parent’s Board of Directors (the “Board”) formed a strategic alternatives committee to evaluate its alternatives, including, but not necessarily limited to, collaborations or merger and acquisition transactions. On May 17, 2020, the Parent, Petros Pharmaceuticals, Inc., a Delaware corporation formed for the purposes of effecting transactions contemplated by the Merger Agreements (“Petros”), PM Merger Sub 1, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Petros (“Merger Sub 1”), PN Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of Petros (“Merger Sub 2”), and Metuchen Pharmaceuticals LLC, a Delaware limited liability company (“Metuchen”), entered into an Agreement and Plan of Merger (the “Original Merger Agreement”), as amended by the First Amendment to the Original Merger Agreement dated as of July 23, 2020 (the “ First Merger Agreement Amendment”) and the Second Amendment to the Original Merger Agreement dated as of September 30, 2020 (the “Second Merger Agreement Amendment” and, together with the First Merger Agreement Amendment and the Original Merger Agreement, the “Merger Agreement”), which provides for (1) the merger of Merger Sub 1 with and into Metuchen, with Metuchen surviving as a wholly-owned subsidiary of Petros (the “Metuchen Merger”) and (2) the merger of Merger Sub 2 with and into the Parent, with the Parent surviving as a wholly-owned subsidiary of Petros (the “Neurotrope Merger” and together with the Metuchen Merger, the “Mergers”). The shareholder vote to approve the merger and spin-off transaction occurred on November 25, 2020. In addition, as a condition to the consummation of the Mergers, Neurotrope is required to approve a spin-off transaction (the “Spin-Off”) whereby (i) any cash in excess of $20,000,000, subject to adjustment as provided for in the Merger Agreement, and all of the operating assets and liabilities not retained by the Parent in connection with the Mergers will be contributed to a wholly-owned subsidiary of the Company. See Note 8, Subsequent Events. WCT Services Agreement On July 23, 2020, Synaptogenix, Inc. entered into a services agreement (the “2020 Services Agreement”) with Worldwide Clinical Trials, Inc. (“WCT”). The 2020 Services Agreement relates to services for the Company’s Phase 2 clinical study assessing the safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment (the “2020 Study”). Pursuant to the terms of the 2020 Services Agreement, WCT will provide services to enroll approximately one hundred (100) 2020 Study subjects. The first 2020 Study site was initiated in September of 2020. The total estimated budget for the services, including pass-through costs, is approximately $9.8 million. As previously disclosed by our Parent on January 22, 2020, the Company has received a $2.7 million award from the National Institutes of Health (“NIH”), which award is being used to support the 2020 Study, resulting in an estimated net budgeted cost of the 2020 Study to the Company of $7.1 million. The NIH grant provides for funds in the first year, which began in April 2020, of approximately $1.0 million and funding in year two, which begins April 2021, of approximately $1.7 million. In connection with their entry into the 2020 Letter of Intent and Services Agreement, the parties agreed that WCT would invoice Synaptogenix, Inc. for the following advance payments: (i) services fees of approximately $943,000; (ii) pass-through expenses of approximately $266,000; and (iii) investigator/institute fees of approximately $314,000, which in each case will be due within ten (10) days of Synaptogenix, Inc.’s receipt of such invoice. Synaptogenix, Inc. may terminate the 2020 Services Agreement without cause upon sixty (60) days prior written notice. As of September 30, 2020, the Company incurred approximately $1 million of expenses associated with the clinical trial. Of the total cost of the trial, as of December 18, 2020, approximately $2.2 million has been funded against the total trial cost. The Company incurred approximately $800,000 and $1.0 million of expenses associated with the current Phase 2 clinical trial for the three and nine months ended September 30, 2020, respectively, with approximately $0.5 million of the expense incurred credited to the $1.5 million advance payment. As of September 30, 2020, approximately $1 million of WCT prepayments is included as a prepaid expense and other current assets and $548,000 which is included in accounts payable in the accompanying balance sheet. Liquidity As of September 30, 2020, we had approximately $27.0 million in cash and cash equivalents as compared to $17.4 million at December 31, 2019. The increase in cash is attributable to the net transfer from Neurotrope, Inc. partially offset by cash used for operating activities during the 2020 period. On December 2, 2020, the Company transferred approximately $19.4 million to Petros Pharmaceuticals, Inc. pursuant to the merger of Neurotrope, Inc. and Metuchen Pharmaceuticals, Inc. which closed on December 1, 2020, see Note 8, Subsequent Events. The Company expects that its current cash and cash equivalents, $6.0 million as of the financial reporting date, plus the remaining NIH grant not yet received of approximately $1.7 million, will be sufficient to support its projected operating requirements for at least the next 12 months from the Form 10‑Q filing date, which would include the current development plan for bryostatin, our novel drug targeting the activation of PKC epsilon. Future development activities beyond 12 months from this Form 10‑Q filing date will require additional equity or debt financing or additional collaboration or licensing agreements. Such equity financing may not be on favorable terms and would likely be dilutive or in the case of debt financing may involve restrictive covenants. Collaboration or licensing arrangements may require the Company to relinquish rights to some of its technologies or product candidates on terms that may 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, could materially harm its business, financial condition and results of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies: Basis of Presentation As of and through September 30, 2020, the Company was a wholly owned subsidiary of Neurotrope, Inc. and comprised substantially all of the operations of Neurotrope, Inc. All expenses incurred by the Parent, if any on behalf of the wholly subsidiary have been pushed down to the wholly owned subsidiary. Accordingly, these financial statements represent the historical financial statements of Synaptogenix, prepared on a stand-alone basis utilizing the legal entity approach. Our financial statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with accounting principles generally accepted in the United States (“GAAP”). All intercompany transactions between the Company and Neurotrope, Inc. have been included in our unaudited condensed financial statements and are considered to be effectively settled for cash in our financial statements at the time the Spin-Off is recorded. The total net effect of the settlement of these intercompany transactions is reflected in our condensed statements of cash flow as a financing activity and in the condensed balance sheets as “Parent company investment.” The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial reporting and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2020 may not be indicative of results for the full year. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. 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. Actual results could differ from those estimates. 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 September 30, 2020, the Company’s cash balances that exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”) were approximately $1.3 million. In addition, approximately $25.7 million included in cash and cash equivalents were invested in a money market fund, which is not insured under the FDIC. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash. 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. Parent Company Investment: Our financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Neurotrope, Inc. All transactions between us and Neurotrope, Inc. have been included in our financial statements and are considered to be effectively settled for cash in our financial statements at the time the Spin-Off is recorded. The total net effect of the settlement of these intercompany transactions is reflected in our statements of cash flow as a financing activity and in the balance sheets as “Parent company investment.” During September 2020, Neurotrope entered into separate warrant amendment agreements with certain existing holders of warrants to purchase shares of its common stock. The warrant amendment agreements are intended to facilitate the transactions contemplated by the Merger Agreement. The Company has recorded an other expense of $1,700,000 related to these warrant amendments which is included in the balance of Parent company investment. 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. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 730 - Research and Development requires companies involved in research and development activities to capitalize non-refundable advance payments for such services pursuant to contractual arrangements 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 at September 30, 2020 and December 31, 2019. Loss Per Share: Basic earnings per share and weighted-average basic shares outstanding are based on the number of shares of Neurotrope, Inc. common stock outstanding as of the end of the period, adjusted for an assumed distribution ratio of 0.20 shares of our Common Stock for every one share of Neurotrope, Inc. common stock held on the record date for the Spin-Off. See Note 8, Subsequent Events. 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 concluded 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. 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, for its product candidates 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 of bryostatin for the treatment of AD. 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 for any reason supplying the Company with bryostatin, then the Company would have to either secure another source of bryostatin or discontinue its efforts to develop and commercialize bryostatin for the treatment of AD. In the interest of mitigating this risk, on June 9, 2020, the Company entered into a supply agreement (the "Supply Agreement") with BryoLogyx Inc. ("BryoLogyx"), pursuant to which BryoLogyx agreed to serve as the Company’s exclusive supplier of synthetic Bryostatin‑1. Pursuant to the terms of the Supply Agreement, the Company has agreed to place an initial order of one gram of current good manufacturing practice ("cGMP") synthetic Bryostatin‑1 as an active pharmaceutical ingredient to be used in a drug product ("API"), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of API, which certification shall be obtained no later than March 31, 2021. Management is currently evaluating the impact of the COVID‑19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s clinical trials and development programs, financial position, results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Expense reimbursement for grant award The Company is reducing research and development expenses by funding from a National Institutes of Health (“NIH”) grant during the period that the expenses are incurred. For the three and nine months ending September 30, 2020, the Company recorded a reduction to expenses incurred and a corresponding grant receivable for its current Phase 2 clinical trial of $861,852. Of this amount, approximately $705,000 was received in October 2020 with the remaining amount to be received pursuant to the terms of the NIH grant. Of the total $2.7 million available from the NIH grant, approximately $1 million is available for reimbursement for trial-related expenses incurred during the period April 2020 to March 2021 ($300,000 remaining to receive as of December 18, 2020) with the remaining $1.7 million available for reimbursement during the period April 2021 to March 2022. The Company believes it will receive the maximum reimbursements under the grant. Recent Accounting Pronouncements Accounting Pronouncements Adopted During the Period: In August 2018 the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements. This standard became effective for the Company on January 1, 2020. The adoption of this standard did not have a material impact on the Company’s financial statements. |
Collaborative Agreements
Collaborative Agreements | 9 Months Ended |
Sep. 30, 2020 | |
Collaborative Agreements | |
Collaborative Agreements | Note 3– Collaborative Agreements: Stanford License Agreements On May 12, 2014, the Company entered into a license agreement (the “Stanford Agreement”) with The Board of Trustees of The Leland Stanford Junior University (“Stanford”), pursuant to which Stanford has granted to the Company a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under certain patent rights and related technology for the use of bryostatin structural derivatives, known as “bryologs,” for use in the treatment of central nervous system disorders, lysosomal storage diseases, stroke, cardio protection and traumatic brain injury, for the life of the licensed patents. the Company is required by the Stanford Agreement to use commercially reasonable efforts to develop, manufacture and sell products (“Licensed Products”) in the Licensed Field of Use (as defined in the Stanford Agreement) during the term of the licensing agreement which expires upon the termination of the last valid claim of any licensed patent under this agreement. In addition, the Company must meet specific diligence milestones, and upon meeting such milestones, make specific milestone payments to Stanford. The Company must also pay Stanford royalties of 3% of net sales, if any, of Licensed Products (as defined in the Stanford Agreement) and milestone payments of up to $3.7 million dependent upon stage of product development. As of September 30, 2020, no royalties nor milestone payments have been required. On January 19, 2017, the Company entered into an additional, second license agreement with Stanford, pursuant to which Stanford has granted to the Company a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under certain patent rights and related technology for the use of “Bryostatin Compounds and Methods of Preparing the Same,” or synthesized bryostatin, for use in the treatment of neurological diseases, cognitive dysfunction and psychiatric disorders, for the life of the licensed patents. The Company paid Stanford $70,000 upon executing the license and is obligated to pay an additional $10,000 annually as a license maintenance fee. In addition, based upon certain milestones which include product development and commercialization, the Company is required to pay up to an additional $2.1 million and between 1.5% and 4.5% royalty payments on certain revenues generated by the Company relating to the licensed technology. The Company has made all required annual maintenance payments. As of September 30, 2020, no royalties nor milestone payments have been required. Mt. Sinai License Agreement On July 14, 2014, the Company entered into an Exclusive License Agreement (the “Mount Sinai Agreement”) with the Icahn School of Medicine at Mount Sinai (“Mount Sinai”). Pursuant to the Mount Sinai Agreement, Mount Sinai granted the Company (a) a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under Mount Sinai’s interest in certain joint patents held by the Company and Mount Sinai (the “Joint Patents”) as well as in certain results and data (the “Data Package”) and (b) a non-exclusive license, with the right to grant sublicenses on certain conditions, to certain technical information, both relating to the diagnostic, prophylactic or therapeutic use for treating diseases or disorders in humans relying on activation of Protein Kinase C Epsilon (“PKCε”), which includes Niemann-Pick Disease (the “Mount Sinai Field of Use”). The Mount Sinai Agreement allows the Company to research, discover, develop, make, have made, use, have used, import, lease, sell, have sold and offer certain products, processes or methods that are covered by valid claims of Mount Sinai’s interest in the Joint Patents or an Orphan Drug Designation Application covering the Data Package (“Mount Sinai Licensed Products”) in the Mount Sinai Field of Use (as such terms are defined in the Mount Sinai Agreement). The Company is required to pay Mt. Sinai milestone payments of $2 million upon approval of a new drug approval (“NDA”) in the United States and an additional $1.5 million for an NDA approval in the European Union or Japan. In addition, the Company is required to pay Mt. Sinai royalties on net sales of licensed product of 2.0% for up to $250 million of net sales and 3.0% of net sales over $250 million. Since inception, the Company has paid Mt. Sinai approximately $160,000 consisting of licensing fees of $85,000 plus development costs and patent fees of approximately $75,000. As of September 30, 2020, no royalties nor milestone payments have been required. Agreements with BryoLogyx On June 9, 2020, the Company entered into a supply agreement (the “Supply Agreement”) with BryoLogyx Inc. (“BryoLogyx”), pursuant to which BryoLogyx agreed to serve as the Company’s exclusive supplier of synthetic Bryostatin‑1. Pursuant to the terms of the Supply Agreement, the Company has agreed to place an initial order of one gram of current good manufacturing practice (“cGMP”) synthetic Bryostatin‑1 as an active pharmaceutical ingredient to be used in a drug product (“API”), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of API, which certification must be obtained by no later than March 31, 2021. The Company may place additional orders for API beyond the initial order by making a written request to BryoLogyx no later than six months prior to the requested delivery date. In connection with the Supply Agreement, on June 9, 2020, the Company entered into a transfer agreement (the “Transfer Agreement”) with BryoLogyx. Pursuant to the terms of the Transfer Agreement, the Company agreed to assign and transfer to BryoLogyx all of the Company’s right, title and interest in and to that certain Cooperative Research and Development Agreement, dated as of January 29, 2019 (the “CRADA”), by and between the Company and the U.S. Department of Health and Human Services, as represented by the NCI, under which Bryostatin‑1’s ability to modulate CD22 in patients with relapsed/refractory CD22+ disease has been evaluated to date. The transfer is subject to the receipt of NCI’s consent. Pursuant to guidance provided by NCI, the Company CRADA has been cancelled and BryoLogyx has initiated a request for a new CRADA in its name. BryoLogyx will be filing its own investigational new drug application (“IND”) for CD22 with the FDA. As consideration for the transfer of rights to the CRADA, BryoLogyx has agreed to pay to the Company 2% of the gross revenue received in connection with the sale of bryostatin products, up to an aggregate payment amount of $1 million. No such revenues have been earned as of September 30, 2020. |
Related Party Transactions and
Related Party Transactions and Licensing / Research Agreements | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions and Licensing / Research Agreements | |
Related Party Transactions and Licensing / Research Agreements | Note 4– Related Party Transactions and Licensing / Research Agreements: Cognitive Research Enterprises, Inc. (“CRE”) James Gottlieb, who resigned as a director of Neurotrope, Inc. on February 21, 2020, serves as a director of CRE, and Shana Phares, who resigned as a director of Neurotrope, Inc. on February 25, 2020, served as President and Chief Executive Officer of CRE. CRE is a stockholder of a corporation, Neuroscience Research Ventures, Inc. (“NRV, Inc.”), which owned approximately 1.2% of the Neurotrope Inc.’s outstanding common stock as of September 30, 2020. Effective October 31, 2012, the Company executed a Technology License and Services Agreement (the “TLSA”) with CRE, a related party, and NRV II, LLC (“NRV II”), another affiliate of CRE, which was amended by Amendment No. 1 to the TLSA as of August 21, 2013. As of February 4, 2015, the parties entered into an Amended and Restated Technology License and Services Agreement (the “CRE License Agreement”). The CRE License Agreement provides research services and has granted the Company the exclusive and nontransferable world-wide, royalty-bearing right, with a right to sublicense (in accordance with the terms and conditions described below), under CRE’s and NRV II’s respective right, title and interest in and to certain patents and technology owned by CRE or licensed to NRV II by CRE as of or subsequent to October 31, 2012, to develop, use, manufacture, market, offer for sale, sell, distribute, import and export certain products or services for therapeutic applications for AD and other cognitive dysfunctions in humans or animals (the “Field of Use”). Additionally, the TLSA specifies that all patents that issue from a certain patent application shall constitute licensed patents and all trade secrets, know-how and other confidential information claimed by such patents constitute licensed technology under the CRE License. The CRE License Agreement terminates on the later of the date (a) the last of the licensed patent expires, is abandoned, or is declared unenforceable or invalid or (b) the last of the intellectual property enters the public domain. After Neurotrope Inc.’s initial Series A Stock financing, the CRE License Agreement required the Company to enter into scope of work agreements with CRE as the preferred service provider for any research and development services or other related scientific assistance and support services. There were no such statements of work agreements required to be entered into during the nine months ended September 30, 2020 or fiscal year 2019. In addition, the CRE License Agreement requires the Company to pay CRE a “Fixed Research Fee” of $1 million per year for five years, commencing on the date that the Company completes a Series B Preferred Stock financing resulting in proceeds of at least $25,000,000 (the “Series B Financing “) which shall also include the proceeds from the exercise of any Series A warrants, Series B warrants, and Series E warrants. This Fixed Research Fee has not been triggered. The CRE License Agreement also requires the payment of royalties ranging between 2% and 5% of the Company’s revenues generated from the licensed patents and other intellectual property, dependent upon the percentage ownership that NRV, Inc. holds in the Company. In addition, on November 10, 2018, the Company and CRE entered into a second amendment (the “Second Amendment”) to the TLSA pursuant to which CRE granted certain patent prosecution and maintenance rights to the Company. Under the Second Amendment, the Company will have the sole and exclusive right and the obligation, to apply for, file, prosecute and maintain patents and applications for the intellectual property licensed to the Company, and pay all fees, costs and expenses related to the licensed intellectual property. The Company paid CRE $10,000 in consideration of this Second Amendment. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2020 | |
Commitments | |
Commitments | Note 5 – Commitments: Clinical Trial Services Agreements On May 4, 2018, the Company executed a Services Agreement (the “2018 Services Agreement”) with WCT. The 2018 Services Agreement related to services for the Company’s Phase 2 confirmatory clinical study assessing the safety, tolerability and efficacy of bryostatin in the treatment of moderately severe to severe AD (the “2018 Study”). Pursuant to the terms of the 2018 Services Agreement, WCT provided services to target enrollment of approximately one hundred (100) 2018 Study subjects. The total estimated budget for the services, including pass-through costs, drug supply and other statistical analyses, was approximately $7.8 million. The Company has incurred all of the expenses associated with the 2018 Services Agreement as of September 30, 2020. On July 23, 2020, the Company entered into the 2020 Services Agreement with WCT. The 2020 Services Agreement relates to services for the current Phase 2 clinical trial assessing the safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment (the 2020 Study). Pursuant to the terms of the 2020 Services Agreement, WCT is providing services to enroll approximately one hundred (100) 2020 Study subjects, which enrollment is currently underway. The first 2020 Study site was initiated during the third quarter of 2020. The total estimated budget for the services, including pass-through costs, is approximately $9.8 million. As previously disclosed, the Company was awarded a $2.7 million grant from the NIH, which award will be used to support the 2020 Study, resulting in an estimated net budgeted cost of the 2020 Study to the Company of $7.1 million. In connection with their entry into the 2020 Services Agreement and letter of intent, WCT invoiced the Company for the following advance payments: (i) services fees of approximately $943,000; (ii) pass-through expenses of approximately $266,000; and (iii) investigator/institute fees of approximately $314,000, which were paid as of September 30, 2020. Remaining amounts due to WCT will be paid as services and related expenses are incurred. The Company may terminate the 2020 Services Agreement without cause upon sixty (60) days prior written notice. Pursuant to the terms of a letter of intent between the Company and WCT, dated May 28, 2020, which anticipated the entry into the 2020 Services Agreement, the Company paid to WCT a cash fee of approximately $0.6 million as an advance in order to fund the initial commitment and certain upfront costs of third party vendors. As of September 30, 2020, approximately $1.1 million of expenses have been incurred in connection with the 2020 Services Agreement, of which approximately $492,000 was applied against the advance paid to WCT per the terms of the letter of intent and Services Agreement. As of September 30, 2020, the Company recorded a payable to WCT of approximately $548,000 which is included in accounts payable on the accompanying balance sheet. Consulting Agreements On August 4, 2016, Neurotrope, Inc. entered into a consulting agreement with SM Capital Management, LLC (“SMCM”), a limited liability company owned and controlled by the Company’s Chairman of the Board, Mr. Joshua N. Silverman (the “Consulting Agreement”). Mr. Silverman was appointed to the Boards of Neurotrope and the Company on August 4, 2016. Pursuant to the Consulting Agreement, SMCM shall provide consulting services which shall include, but not be limited to, providing business development, financial communications and management transition services, for a one-year period, subject to annual review thereafter. SMCM’s annual consulting fee is $120,000, payable by the Company in monthly installments of $10,000. In addition, SMCM shall be reimbursed for (i) all pre-approved travel in connection with the consulting services to the Company, (ii) upon submission to the Company of appropriate vouchers and receipts, for all other out-of-pocket expenses reasonably incurred by SMCM in furtherance of the Company’s business. This contract has been assigned to Synaptogenix, Inc. as of December 1, 2020. Effective as of June 1, 2019, the Company entered into a consulting agreement with Katalyst Securities LLC (“Katalyst”), pursuant to which Katalyst agreed to provide investment banking consulting services to the Company and Neurotrope (the “Katalyst Agreement”). The term of the agreement continues until the second anniversary from the effective date and may be canceled by either Katalyst or the Company with 30 days’ advance notice. As consideration for its services under the Katalyst Agreement, the Company agreed to pay to Katalyst $25,000 per month, plus five-year warrants to purchase 90,000 shares of Neurotrope’s common stock on the effective date of the Katalyst Agreement and on each of the three-month anniversaries following the effective date. The warrants have an exercise price equal to the closing price of Neurotrope’s stock on the date of issuance. Katalyst’s cash and stock-based compensation is included as general and administrative expenses in the Company’s statement of operations. Effective as of June 5, 2019, the Company entered into a consulting agreement with GP Nurmenkari, Inc. (“GPN”) (the “GPN Agreement”), pursuant to which GPN agreed to provide investment banking consulting services to the Company and Neurotrope. The term of the agreement continues until the second anniversary from the effective date and may be canceled by either GPN or the Company with 30 days’ advance notice. As consideration for its services under the GPN Agreement, the Company agreed to pay to GPN $8,000 per month, plus five-year warrants to purchase 24,000 shares of Neurotrope’s common stock on the effective date and on each of the three-month anniversaries following the effective date. The warrants have an exercise price equal to the closing price of Neurotrope’s stock on the date of issuance. On February 1, 2020, the Company amended the GPN Agreement, increasing the cash compensation to $17,500 per month and increasing the number of warrants issued each three-month period from 24,000 to 50,000. GPN’s cash and stock-based compensation is included as general and administrative expenses in the Company’s statement of operations. |
Stock Compensation
Stock Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock Compensation | |
Stock Compensation | Note 6 – Stock Compensation: Neurotrope sponsors the share-based incentive plan in which certain of our employees participate. Total stock-based compensation for the nine months ended September 30, 2020 was $1,449,023, of which $551,865 was classified as research and development expense and $897,158 was classified as general and administrative expense, versus total stock-based compensation for the nine months ended September 30, 2019 of $3,346,680, of which $908,601 was classified as research and development expense and $2,438,079 was classified as general and administrative expense. For the three months ended September 30, 2020, total stock-based compensation was $387,927, of which $153,025 was classified as research and development expense and $234,902 was classified as general and administrative expense, versus total stock-based compensation for the three months ended September 30, 2019 totaling $925,220, of which $213,195 was classified as research and development expense and $712,025 was classified as general and administrative expense. |
Parent Company Investment
Parent Company Investment | 9 Months Ended |
Sep. 30, 2020 | |
Parent Company Investment | |
Parent Company Investment | Note 7 – Parent Company Investment The components of the net transfers (to)/from parent for the three and nine months ended September 30, 2020 and 2019 are as follows: Nine months ended Three months ended September 30, September 30, 2020 2019 2020 2019 Stock based compensation $ 1,449,023 $ 3,346,680 $ 387,927 $ 925,220 Consultant compensation paid with Parent equity 500,740 1,357,146 233,281 427,306 Parent contributions 16,519,986 419,843 — 371,773 Investor warrant amendment expense 1,700,000 — 1,700,000 — Total $ 20,169,749 $ 5,123,669 $ 2,321,208 $ 1,724,299 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | Note 8 – Subsequent Events: Spin-Off from Neurotrope, Inc. On December 1, 2020, Neurotrope, Petros Pharmaceuticals, Inc., a Delaware corporation (“Petros”), PM Merger Sub 1, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Petros (“Merger Sub 1”), PN Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of Petros (“Merger Sub 2”), and Metuchen Pharmaceuticals LLC, a Delaware limited liability company (“Metuchen”), consummated the transactions (the “Mergers”) contemplated by that certain Agreement and Plan of Merger by and among the Company, Petros, Merger Sub 1, Merger Sub 2 and Metuchen, dated as of May 17, 2020 (the “Original Merger Agreement”), as amended by the First Amendment to the Original Merger Agreement (the “First Amendment”), dated as of July 23, 2020 and the Second Amendment to the Original Merger Agreement, dated as of September 30, 2020 (the “Second Amendment” and, together with the Original Merger Agreement and the First Amendment, the “Merger Agreement”). As a condition to the Mergers, Neurotrope approved a transaction (the “Spin-Off”), which became effective on December 7, 2020, whereby (i) any cash in excess of $20,000,000, subject to adjustment as provided in the Merger Agreement, and all of the operating assets and liabilities of Neurotrope not retained by Neurotrope in connection with the Mergers were contributed to Neurotrope Bioscience, Inc. (now known as Synaptogenix, Inc.), and (ii) holders of record of Neurotrope common stock, Neurotrope preferred stock and certain warrants as of November 30, 2020 (the “Spin-Off Record Date”) received a pro rata distribution at the rate of (i) one share of Synaptogenix, Inc. common stock for every five shares of Neurotrope common stock held, (ii) one share of Synaptogenix, Inc. common stock for every five shares of Neurotrope common stock issuable upon conversion of Neurotrope preferred stock held and (iii) one share of Synaptogenix, Inc. common stock for every five shares of Neurotrope common stock issuable upon exercise of certain Neurotrope warrants held that were entitled to participate in the Spin-Off pursuant to the terms thereof (collectively, the “Distribution”). Any fractional shares were paid in cash. In addition, in connection with the Spin-Off, the holders of Neurotrope’s amended and restated warrants to purchase 19,556,629 shares of Neurotrope common stock (the “A&R Warrants”) with a weighted average exercise price of $4.31 per share received 3,911,326 warrants, with a weighted average exercise price of $9.74 per share to purchase shares of Synaptogenix, Inc. common stock issuable upon exercise of such A&R Warrants held as of the Spin-Off Record Date (collectively, the “Spin-Off Warrants”). All the warrants have five year terms from December 2, 2020. On December 7, 2020, the Company filed an amended and restated certificate of incorporation which, among other things, changed its name to Synaptogenix, Inc. We currently trade on the OTC Pink Sheet market. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation As of and through September 30, 2020, the Company was a wholly owned subsidiary of Neurotrope, Inc. and comprised substantially all of the operations of Neurotrope, Inc. All expenses incurred by the Parent, if any on behalf of the wholly subsidiary have been pushed down to the wholly owned subsidiary. Accordingly, these financial statements represent the historical financial statements of Synaptogenix, prepared on a stand-alone basis utilizing the legal entity approach. Our financial statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with accounting principles generally accepted in the United States (“GAAP”). All intercompany transactions between the Company and Neurotrope, Inc. have been included in our unaudited condensed financial statements and are considered to be effectively settled for cash in our financial statements at the time the Spin-Off is recorded. The total net effect of the settlement of these intercompany transactions is reflected in our condensed statements of cash flow as a financing activity and in the condensed balance sheets as “Parent company investment.” The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial reporting and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2020 may not be indicative of results for the full year. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | 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. Actual results could differ from those estimates. |
Cash and Cash Equivalents and Concentration of Credit Risk | 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 September 30, 2020, the Company’s cash balances that exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”) were approximately $1.3 million. In addition, approximately $25.7 million included in cash and cash equivalents were invested in a money market fund, which is not insured under the FDIC. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash. |
Fixed Assets | 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. |
Parent Company Investment: | Parent Company Investment: Our financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Neurotrope, Inc. All transactions between us and Neurotrope, Inc. have been included in our financial statements and are considered to be effectively settled for cash in our financial statements at the time the Spin-Off is recorded. The total net effect of the settlement of these intercompany transactions is reflected in our statements of cash flow as a financing activity and in the balance sheets as “Parent company investment.” During September 2020, Neurotrope entered into separate warrant amendment agreements with certain existing holders of warrants to purchase shares of its common stock. The warrant amendment agreements are intended to facilitate the transactions contemplated by the Merger Agreement. The Company has recorded an other expense of $1,700,000 related to these warrant amendments which is included in the balance of Parent company investment. |
Research and Development Costs | 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. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 730 - Research and Development requires companies involved in research and development activities to capitalize non-refundable advance payments for such services pursuant to contractual arrangements 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 at September 30, 2020 and December 31, 2019. |
Loss Per Share | Loss Per Share: Basic earnings per share and weighted-average basic shares outstanding are based on the number of shares of Neurotrope, Inc. common stock outstanding as of the end of the period, adjusted for an assumed distribution ratio of 0.20 shares of our Common Stock for every one share of Neurotrope, Inc. common stock held on the record date for the Spin-Off. See Note 8, Subsequent Events. |
Income Taxes | 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 concluded 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. |
Risks and Uncertainties | 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, for its product candidates 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 of bryostatin for the treatment of AD. 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 for any reason supplying the Company with bryostatin, then the Company would have to either secure another source of bryostatin or discontinue its efforts to develop and commercialize bryostatin for the treatment of AD. In the interest of mitigating this risk, on June 9, 2020, the Company entered into a supply agreement (the "Supply Agreement") with BryoLogyx Inc. ("BryoLogyx"), pursuant to which BryoLogyx agreed to serve as the Company’s exclusive supplier of synthetic Bryostatin‑1. Pursuant to the terms of the Supply Agreement, the Company has agreed to place an initial order of one gram of current good manufacturing practice ("cGMP") synthetic Bryostatin‑1 as an active pharmaceutical ingredient to be used in a drug product ("API"), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of API, which certification shall be obtained no later than March 31, 2021. Management is currently evaluating the impact of the COVID‑19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s clinical trials and development programs, financial position, results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Expense reimbursement for grant award | Expense reimbursement for grant award The Company is reducing research and development expenses by funding from a National Institutes of Health (“NIH”) grant during the period that the expenses are incurred. For the three and nine months ending September 30, 2020, the Company recorded a reduction to expenses incurred and a corresponding grant receivable for its current Phase 2 clinical trial of $861,852. Of this amount, approximately $705,000 was received in October 2020 with the remaining amount to be received pursuant to the terms of the NIH grant. Of the total $2.7 million available from the NIH grant, approximately $1 million is available for reimbursement for trial-related expenses incurred during the period April 2020 to March 2021 ($300,000 remaining to receive as of December 18, 2020) with the remaining $1.7 million available for reimbursement during the period April 2021 to March 2022. The Company believes it will receive the maximum reimbursements under the grant. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Adopted During the Period: In August 2018 the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements. This standard became effective for the Company on January 1, 2020. The adoption of this standard did not have a material impact on the Company’s financial statements. |
Parent Company Investment (Tabl
Parent Company Investment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Parent Company Investment | |
Schedule components of the net transfers | Nine months ended Three months ended September 30, September 30, 2020 2019 2020 2019 Stock based compensation $ 1,449,023 $ 3,346,680 $ 387,927 $ 925,220 Consultant compensation paid with Parent equity 500,740 1,357,146 233,281 427,306 Parent contributions 16,519,986 419,843 — 371,773 Investor warrant amendment expense 1,700,000 — 1,700,000 — Total $ 20,169,749 $ 5,123,669 $ 2,321,208 $ 1,724,299 |
Organization, Nature of Busin_2
Organization, Nature of Business, and Liquidity - WCT Services Agreement (Details) | Jul. 23, 2020USD ($)item | Jan. 22, 2020USD ($) | Oct. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2022USD ($) | Apr. 30, 2021USD ($) | Dec. 18, 2020USD ($) | Dec. 07, 2020USD ($) |
Clinical trial expenses | $ 410,292 | $ 845,797 | $ 1,004,762 | $ 4,273,531 | |||||||
2020 Services Agreement | |||||||||||
Target enrollment of study subjects | item | 100 | ||||||||||
Total estimated budget for the services | $ 9,800,000 | ||||||||||
Services fees | 943,000 | ||||||||||
Pass-through expenses | 266,000 | ||||||||||
Investigator/institute fees | $ 314,000 | ||||||||||
Threshold period of Investigator/institute fees due within receipt of such invoice | 10 days | ||||||||||
Threshold period of prior written notice to terminate agreement | 60 days | ||||||||||
Clinical trial expenses | 800,000 | 1,000,000 | |||||||||
Clinical expenses credited against WCT prepayments | 500,000 | ||||||||||
WCT prepayment | 1,500,000 | 1,500,000 | |||||||||
WCT prepayments included as a prepaid expense and other current assets | 1,000,000 | 1,000,000 | |||||||||
WCT payments included in accounts payable | $ 548,000 | 548,000 | |||||||||
2020 Services Agreement | National Institutes of Health | |||||||||||
Total estimated budget for the services | $ 7,100,000 | ||||||||||
Amount of award received | $ 2,700,000 | 2,700,000 | |||||||||
Funding received in first year | $ 1,000,000 | ||||||||||
Forecast | 2020 Services Agreement | National Institutes of Health | |||||||||||
Funding receivable in second year | $ 1,700,000 | $ 1,700,000 | |||||||||
Subsequent Events | |||||||||||
Excess of cash in operating assets And liabilities | $ 20,000,000 | ||||||||||
Subsequent Events | 2020 Services Agreement | |||||||||||
Amount funded against the total trial cost | $ 2,200,000 | ||||||||||
Subsequent Events | 2020 Services Agreement | National Institutes of Health | |||||||||||
Amount of award received | $ 705,000 |
Organization, Nature of Busin_3
Organization, Nature of Business, and Liquidity (Details) - USD ($) | Dec. 02, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | $ 26,999,862 | $ 17,382,038 | |
Cash and cash equivalents expected amount at financial reporting date | 6,000,000 | ||
National Institutes of Health | |||
Grants receivable | $ 1,700,000 | ||
Petros Pharmaceuticals, Inc | |||
Amount transferred | $ 19,400,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Jun. 09, 2020item | Jan. 22, 2020USD ($) | Oct. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2022USD ($) | Apr. 30, 2021USD ($) | Dec. 18, 2020USD ($) | Nov. 30, 2020 | Dec. 31, 2019USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Cash balance of insured FDIC amount | $ 1,300,000 | $ 1,300,000 | ||||||||
Cash balance of uninsured amount | 25,700,000 | 25,700,000 | ||||||||
Capitalized research and development services | $ 0 | $ 0 | $ 0 | |||||||
Spin-Off Ratio | 0.20 | 0.20 | ||||||||
Number of grams | item | 1 | |||||||||
Threshold shipping period after the date upon which BryoLogyx obtains cGMP certification for production of API | 60 days | |||||||||
Grant receivable | $ 861,852 | $ 861,852 | ||||||||
Warrant | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Other Expenses | $ 1,700,000 | |||||||||
Subsequent Events | Warrant | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Spin-Off Ratio | 1 | |||||||||
Maximum | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Estimated useful life (years) | 10 years | |||||||||
Minimum | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Estimated useful life (years) | 3 years | |||||||||
National Institutes of Health | 2020 Services Agreement | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Amount of award received | $ 2,700,000 | $ 2,700,000 | ||||||||
Funding received in first year | $ 1,000,000 | |||||||||
National Institutes of Health | 2020 Services Agreement | Forecast | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Funding receivable in second year | $ 1,700,000 | $ 1,700,000 | ||||||||
National Institutes of Health | 2020 Services Agreement | Subsequent Events | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Amount of award received | $ 705,000 | |||||||||
Funding received in first year, Remaining amount | $ 300,000 |
Collaborative Agreements (Detai
Collaborative Agreements (Details) - USD ($) | Sep. 30, 2020 | Jun. 09, 2020 | Jan. 19, 2017 | Jul. 14, 2014 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Annual license maintenance fee | $ 10,000 | |||||||
Commitment To Pay Fees | 2,100,000 | |||||||
Operating Expenses | $ 2,576,406 | $ 3,914,722 | $ 8,192,384 | $ 12,822,807 | ||||
Threshold shipping period after the date upon which BryoLogyx obtains cGMP certification for production of API | 60 days | |||||||
Stand Ford License Agreement [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Milestone payments made | $ 3,700,000 | |||||||
Royalty payment percentage | 3.00% | |||||||
Payments for Royalties | $ 0 | |||||||
Mt. Sinai License Agreement | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Licensing fees | $ 85,000 | |||||||
Development costs and patent fees | 75,000 | |||||||
Milestone payments made | 0 | |||||||
Total services fees | 160,000 | |||||||
Payable of milestone payments | 2,000,000 | |||||||
Additional milestone payments | $ 1,500,000 | |||||||
Payments for Royalties | 0 | |||||||
Mt. Sinai License Agreement | Net sales up to $250 million | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Royalty payment percentage | 2.00% | |||||||
Threshold net sales | $ 250 | |||||||
Mt. Sinai License Agreement | Net sales over $250 million | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Royalty payment percentage | 3.00% | |||||||
Threshold net sales | $ 250,000,000 | |||||||
Agreements with BryoLogyx | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Other Income | $ 0 | |||||||
Payments for Royalties | $ 1,000,000 | |||||||
Percentage of Gross Revenue | 2.00% | 2.00% | 2.00% | |||||
License [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Aggregate amount paid | $ 70,000 | |||||||
Minimum | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Royalty payment percentage | 1.50% | |||||||
Maximum | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Royalty payment percentage | 4.50% |
Related Party Transactions an_2
Related Party Transactions and Licensing / Research Agreements (Details) | Nov. 10, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Dec. 31, 2019item |
Related Party Transaction [Line Items] | ||||||
Research and development | $ 410,292 | $ 845,797 | $ 1,004,762 | $ 4,273,531 | ||
Number of statements | item | 0 | 0 | ||||
Costs and Expenses, Related Party | $ 10,000 | |||||
Fixed Research Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | $ 1,000,000 | |||||
Services Reimbursement [Member] | Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Royalties Percentage | 2.00% | |||||
Services Reimbursement [Member] | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Royalties Percentage | 5.00% | |||||
Series B Preferred Stock [Member] | Fixed Research Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 25,000,000 | |||||
President [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 1.20% | 1.20% |
Commitments (Details)
Commitments (Details) | Jul. 23, 2020USD ($)item | May 28, 2020USD ($) | Feb. 01, 2020USD ($)shares | Jan. 22, 2020USD ($) | Jun. 05, 2019USD ($)shares | Jun. 01, 2019USD ($)shares | May 04, 2018item | Aug. 04, 2016USD ($) | Sep. 30, 2020USD ($) | Jan. 31, 2020shares |
Other Commitments [Line Items] | ||||||||||
Monthly installment of annual consulting fee | $ 17,500 | |||||||||
Consulting Agreement with SM Capital Management, LLC [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Contract Payments, Term | 1 year | |||||||||
Annual consulting fee | $ 120,000 | |||||||||
Monthly installment of annual consulting fee | $ 10,000 | |||||||||
Consulting Agreement with Katalyst Securities LLC [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Payments for consulting | $ 25,000 | |||||||||
Warrants term | 5 years | |||||||||
Warrants to purchase shares of common stock | shares | 90,000 | |||||||||
Warrants term following the effective date | 3 months | |||||||||
Threshold period of prior written notice to terminate agreement | 30 days | |||||||||
Consulting Agreement with GP Nurmenkari, Inc [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Monthly installment of annual consulting fee | $ 8,000 | |||||||||
Warrants term | 5 years | |||||||||
Warrants to purchase shares of common stock | shares | 50,000 | 24,000 | 24,000 | |||||||
Warrants term following the effective date | 3 months | 3 months | ||||||||
Threshold period of prior written notice to terminate agreement | 30 days | |||||||||
2018 Services Agreement | ||||||||||
Other Commitments [Line Items] | ||||||||||
Target enrollment of study subjects | item | 100 | |||||||||
Total estimated budget for the services | $ 7,800,000 | |||||||||
2018 Services Agreement | Worldwide Clinical Trials | ||||||||||
Other Commitments [Line Items] | ||||||||||
Total expenses incurred for the services | 1,100,000 | |||||||||
2020 Services Agreement | ||||||||||
Other Commitments [Line Items] | ||||||||||
Target enrollment of study subjects | item | 100 | |||||||||
Total estimated budget for the services | $ 9,800,000 | |||||||||
Pass-through expenses | 266,000 | |||||||||
Services fees | $ 943,000 | |||||||||
Threshold period of Investigator/institute fees due within receipt of such invoice | 10 days | |||||||||
Investigator/institute fees | $ 314,000 | |||||||||
Threshold period of prior written notice to terminate agreement | 60 days | |||||||||
Advances paid to WCT | 492,000 | |||||||||
WCT payments included in accounts payable | 548,000 | |||||||||
2020 Services Agreement | National Institutes of Health | ||||||||||
Other Commitments [Line Items] | ||||||||||
Total estimated budget for the services | $ 7,100,000 | |||||||||
Amount of award received | $ 2,700,000 | $ 2,700,000 | ||||||||
2020 Services Agreement | Worldwide Clinical Trials | ||||||||||
Other Commitments [Line Items] | ||||||||||
Aggregate amount paid | $ 600,000 |
Stock Compensation - Additional
Stock Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | $ 387,927 | $ 925,220 | $ 1,449,023 | $ 3,346,680 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | 153,025 | 213,195 | 551,865 | 908,601 |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | $ 234,902 | $ 712,025 | $ 897,158 | $ 2,438,079 |
Parent Company Investment (Deta
Parent Company Investment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Parent Company Investment | ||||
Stock based compensation | $ 387,927 | $ 925,220 | $ 1,449,023 | $ 3,346,680 |
Consultant compensation paid with Parent equity | 233,281 | 427,306 | 500,740 | 1,357,146 |
Parent contributions | 371,773 | 16,519,986 | 419,843 | |
Investor warrant amendment expense | 1,700,000 | 1,700,000 | ||
Total | $ 2,321,208 | $ 1,724,299 | $ 20,169,749 | $ 5,123,669 |
Subsequent Events (Details)
Subsequent Events (Details) | Dec. 02, 2020$ / sharesshares | Dec. 07, 2020USD ($) | Nov. 30, 2020 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||
Spin-Off Ratio | 0.20 | |||
Subsequent Events | ||||
Subsequent Event [Line Items] | ||||
Excess of cash in operating assets And liabilities | $ | $ 20,000,000 | |||
Common stock | Subsequent Events | ||||
Subsequent Event [Line Items] | ||||
Spin-Off Ratio | 0.2 | |||
Preferred stock | Subsequent Events | ||||
Subsequent Event [Line Items] | ||||
Spin-Off Ratio | 0.2 | |||
Warrant | Subsequent Events | ||||
Subsequent Event [Line Items] | ||||
Spin-Off Ratio | 1 | |||
Spin-off | Subsequent Events | ||||
Subsequent Event [Line Items] | ||||
Warrants to purchase before amendment | shares | 19,556,629 | |||
Warrants to purchase shares of common stock | shares | 3,911,326 | |||
Exercise price of warrants before amendment | $ / shares | $ 4.31 | |||
Exercise price of warrants | $ / shares | $ 9.74 | |||
Warrants term | 5 years |