Core Points - Protagenic Therapeutics has been granted a new patent in Japan for its modified stilbenoid program, which is crucial for its pipeline asset aimed at treating epilepsy and seizures, with the patent valid until March 31, 2041 [3][4] - The company previously secured a similar patent in the UK, indicating its ongoing innovation and commitment to protecting its development pipeline [4] - The Japanese pharmaceutical market is the third-largest globally, valued at over $85 billion in 2025, projected to reach $93 billion by 2030 [4] - The global epilepsy drug market is expected to grow from $11.29 billion in 2024 to approximately $18.74 billion by 2034, with a compound annual growth rate (CAGR) of 5.20% from 2025 to 2034 [5]

Market Overview - U.S. stocks experienced an upward trend, with the Dow Jones index increasing by over 150 points, up 0.40% to 42,825.71, NASDAQ rising 0.02% to 19,215.06, and S&P 500 gaining 0.13% to 5,965.84 [1] - In the commodities market, oil prices increased by 0.1% to $62.51, while gold rose by 1.4% to $3,233 [4] Company Performance - Global Ship Lease, Inc. (GSL) reported strong first-quarter results, with earnings of $2.65 per share, surpassing the analyst consensus estimate of $2.31 per share. The company also reported sales of $190.97 million, exceeding the consensus estimate of $175.23 million [2] - DigiAsia Corp. (FAAS) shares surged 188% to $0.5351 following the announcement of a Bitcoin treasury reserve strategy and a potential capital raise of up to $100 million for Bitcoin acquisition [7] - Protagenic Therapeutics, Inc. (PTIX) shares increased by 163% to $7.96 after entering a business combination with Phytanix [7] - Novavax, Inc. (NVAX) shares rose 8% to $7.29 after providing guidance for R&D and SG&A expenses for FY25, 2026, and 2027, and receiving conditional FDA approval for its COVID-19 vaccine [7] - Gilat Satellite Networks Ltd. (GILT) shares fell 9% to $6.08 after reporting a revenue miss for the first quarter [7] - Quantum Computing Inc. (QUBT) shares decreased by 10% to $11.64 despite reporting better-than-expected first-quarter EPS results [7] - Archer Aviation Inc. (ACHR) shares also dropped by 10% to $12.01 [7] Economic Indicators - The CB Leading Index fell by 1% month-over-month in April, indicating a potential slowdown in economic activity [8]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements%3A) The company reported a net loss of $1.44 million for the quarter ended March 31, 2025. As of the same date, total liabilities of $1.08 million exceeded total assets of $0.99 million, resulting in a stockholders' deficit of $88,329. The financial statements indicate significant recurring losses and negative cash flows, raising substantial doubt about the company's ability to continue as a going concern without securing additional financing by the third quarter of 2025 - The company's financial condition raises substantial doubt about its ability to continue as a going concern. It has incurred significant recurring losses, has an accumulated deficit, and negative cash flows from operations. Management states that current cash resources are insufficient to fund operations for the next twelve months, and additional financing will be needed by Q3 2025[19](index=19&type=chunk)[20](index=20&type=chunk) - A 1-for-14 reverse stock split was effectuated on May 5, 2025, to regain compliance with Nasdaq's minimum bid price requirement. All share and per-share data in the financial statements have been adjusted to reflect this split[18](index=18&type=chunk)[73](index=73&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, the company had $0.87 million in cash, a significant decrease from $1.84 million at the end of 2024. Total assets fell to $0.99 million from $1.96 million, while total liabilities increased to $1.08 million, leading to a stockholders' deficit of $88,329 compared to an equity of $1.01 million previously Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $872,960 | $1,838,469 | | Total Current Assets | $928,176 | $1,882,867 | | **Total Assets** | **$988,650** | **$1,955,913** | | **Liabilities & Equity** | | | | Total Current Liabilities | $1,076,979 | $942,759 | | **Total Liabilities** | **$1,076,979** | **$942,759** | | **Total Stockholders' Equity (Deficit)** | **($88,329)** | **$1,013,154** | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, the company reported a net loss of $1.44 million, or ($2.75) per share, an improvement from a net loss of $1.72 million, or ($5.44) per share, in the same period of 2024. The reduced loss was primarily driven by a significant decrease in research and development expenses, which more than offset an increase in general and administrative costs Statement of Operations Summary (unaudited, for the three months ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Research and development | $880,372 | $1,460,746 | | General and administrative | $567,736 | $277,613 | | **Loss from Operations** | **($1,448,108)** | **($1,738,359)** | | **Net Loss** | **($1,440,005)** | **($1,724,294)** | | Net loss per common share | ($2.75) | ($5.44) | | Weighted average common shares | 523,185 | 316,804 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $1.07 million for the first quarter of 2025, a decrease from $1.66 million in the prior-year period. The company generated $102,519 from financing activities through a stock issuance, while no cash was provided by investing activities. Overall, cash decreased by $0.97 million during the quarter, ending at $0.87 million Cash Flow Summary (unaudited, for the three months ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($1,068,017) | ($1,659,185) | | Net Cash Provided by Investing Activities | $0 | $1,202,880 | | Net Cash Provided by Financing Activities | $102,519 | $0 | | **Net Change in Cash** | **($965,509)** | **($456,115)** | | **Cash, End of the Period** | **$872,960** | **$831,778** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes highlight the company's status as a biopharmaceutical firm focused on stress-related disorders, the critical going concern issue, and significant stockholder equity events. On February 21, 2025, the company repriced outstanding stock options to $3.72 per share. The company is also addressing a Nasdaq delisting notice by implementing a reverse stock split and raising capital. A subsequent event notes the sale of 51,203 common shares for $395,474 on April 3, 2025 - On February 21, 2025, the Board repriced outstanding stock options, setting the new exercise price at **$3.72 per share**, which was the closing price on that day. This affected options with original exercise prices ranging from **$24.36 to $278.88**[51](index=51&type=chunk) - The company received a Nasdaq deficiency notice in July 2024 for its stock price falling below the **$1.00 minimum**. To regain compliance, the company executed a **1-for-14 reverse split** effective May 5, 2025, and is pursuing an equity financing[62](index=62&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - Subsequent to the quarter's end, on April 3, 2025, the company sold **51,203 shares** of common stock for **$395,474**[72](index=72&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on its lead compound, PT00114, for which a Phase I/IIa clinical trial commenced in September 2023. The operating loss for Q1 2025 decreased to $1.45 million from $1.74 million YoY, due to lower R&D expenses related to clinical trial activities. Management reiterates the substantial doubt about the company's ability to continue as a going concern, with cash of $0.87 million as of March 31, 2025, and the need to raise capital by Q3 2025 - The company's lead compound, PT00114, is a synthetic peptide for treating stress-related neuropsychiatric disorders. A Phase I/IIa clinical trial began in September 2023 to evaluate its potential in treating depression, anxiety, and PTSD[79](index=79&type=chunk)[81](index=81&type=chunk) - The decrease in operating loss was driven by a **$580,374 reduction** in R&D expenses due to changes in the clinical trial stage and outsourced research partners. This was partially offset by a **$290,123 increase** in G&A expenses from higher stock compensation and legal fees[84](index=84&type=chunk)[85](index=85&type=chunk) - The company's liquidity position is critical, with only **$872,960 in cash** and a working capital deficit of **$148,803** as of March 31, 2025. Management confirms the need to obtain debt or equity financing by the third quarter of 2025 to continue operations[86](index=86&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=19&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable for the company - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[89](index=89&type=chunk) [Controls and Procedures](index=19&type=section&id=Item%204%20Controls%20and%20Procedures) Management has concluded that the company's disclosure controls and procedures are not effective due to identified material weaknesses in internal control over financial reporting. The primary weaknesses are a lack of sufficient segregation of duties and limited multiple reviews in the financial statement preparation process. A remediation plan involving an independent third party is underway - Management identified material weaknesses in internal controls, rendering disclosure controls and procedures ineffective[90](index=90&type=chunk) - The specific weaknesses are: 1) Insufficient segregation of duties within accounting functions, and 2) Limited level of multiple reviews during financial statement preparation[97](index=97&type=chunk) - To remediate these issues, the company has engaged a third party to enhance segregation of duties and implement additional controls[93](index=93&type=chunk) [Part II. Other Information](index=20&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=20&type=section&id=Item%201%20Legal%20Proceedings) The company reports that there are currently no pending legal proceedings, government actions, or investigations that are expected to have a material adverse effect on its business or financial condition - There are no material legal proceedings pending against the company[96](index=96&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[99](index=99&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None reported[100](index=100&type=chunk) [Defaults upon Senior Securities](index=21&type=section&id=Item%203%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[101](index=101&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[102](index=102&type=chunk) [Other Information](index=21&type=section&id=Item%205%20Other%20Information) The company reported no other information - None reported[103](index=103&type=chunk) [Exhibits](index=21&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications as required by the Sarbanes-Oxley Act and Inline XBRL data files - The exhibits filed include Sarbanes-Oxley Act certifications (302 and 906) and Inline XBRL documents[105](index=105&type=chunk)

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements%3A) This section presents the unaudited consolidated financial statements, highlighting decreased cash, increased net loss, negative operating cash flow, and a critical going concern issue with funds projected to last only until Q3 2024 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | | March 31, 2024 ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $831,778 | $1,287,893 | | Marketable securities | $1,592,025 | $2,768,119 | | **Total Current Assets** | **$2,467,797** | **$4,200,037** | | **Total Assets** | **$2,578,558** | **$4,323,369** | | **Liabilities & Equity** | | | | Total Current Liabilities | $446,095 | $655,252 | | **Total Stockholders' Equity** | **$2,132,463** | **$3,668,117** | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | | Three months ended March 31, 2024 ($) | Three months ended March 31, 2023 ($) | | :--- | :--- | :--- | | Research and development | $1,460,746 | $348,031 | | General and administrative | $277,613 | $391,263 | | **Loss from Operations** | **($1,738,359)** | **($739,294)** | | **Net Loss** | **($1,724,294)** | **($718,096)** | | **Net loss per common share** | **($0.39)** | **($0.17)** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | | Three months ended March 31, 2024 ($) | Three months ended March 31, 2023 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($1,659,185) | ($371,834) | | Net Cash Provided by Investing Activities | $1,202,880 | $294,669 | | Net Change in Cash | ($456,115) | ($76,698) | | **Cash, End of the Period** | **$831,778** | **$138,491** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company is a biopharmaceutical firm developing therapeutics for stress-related neuropsychiatric and mood disorders[16](index=16&type=chunk) - Substantial doubt exists about the Company's ability to continue as a going concern, with current cash resources insufficient to fund operations past the **end of Q3 2024** without new financing[17](index=17&type=chunk)[18](index=18&type=chunk) - In Q1 2024, the company issued **742,150 new stock options**, totaling **1,959,741 options outstanding** as of March 31, 2024, with no new warrants issued[50](index=50&type=chunk)[52](index=52&type=chunk)[59](index=59&type=chunk) - The research agreement with the University of Toronto for TCAP mediated stress attenuation was extended to **March 31, 2024**, and has not been further extended as of the filing date[61](index=61&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, noting a significant increase in operating loss to **$1.74 million** in Q1 2024, primarily due to higher R&D expenses, and emphasizes a critical liquidity situation with cash insufficient to fund operations beyond Q3 2024 - The company's lead compound, **PT00114**, a synthetic peptide for depression, anxiety, and PTSD, began a Phase I/IIa clinical trial in **September 2023**[77](index=77&type=chunk)[79](index=79&type=chunk) Operating Results (Q1) | Operating Results (Q1) | 2024 ($) | 2023 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Loss from Operations | ($1,738,359) | ($739,294) | Increased by $999,065 | | Research & Development Expense | $1,460,746 | $348,031 | Increased by $1,112,715 | | General & Administrative Expense | $277,613 | $391,263 | Decreased by $113,650 | - As of March 31, 2024, the company held **$831,778 in cash** and **$2,021,702 in working capital**, which management deems insufficient to fund operations past the **end of Q3 2024**, raising substantial doubt about its going concern ability[82](index=82&type=chunk) - Cash used in operating activities significantly increased to **$1,659,185** in Q1 2024 from **$371,834** in Q1 2023, primarily due to the higher net loss[84](index=84&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=19&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable, indicating the company has no significant exposure to market risks requiring disclosure, such as interest rate or foreign currency fluctuations - This item is not applicable to the company[87](index=87&type=chunk) [Controls and Procedures](index=19&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2024, due to material weaknesses in internal control over financial reporting, including insufficient segregation of duties and limited multiple reviews - Management concluded that disclosure controls and procedures are **not effective** due to material weaknesses in internal control over financial reporting[88](index=88&type=chunk)[89](index=89&type=chunk) - Identified material weaknesses include insufficient segregation of duties within accounting functions and a limited level of multiple reviews during financial statement preparation[91](index=91&type=chunk) - A remediation plan has been initiated, involving an independent third party to enhance segregation of duties and implement additional controls[93](index=93&type=chunk) [Part II. Other Information](index=20&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=20&type=section&id=Item%201%20Legal%20Proceedings) The company reports no pending legal proceedings, government actions, or investigations expected to have a material adverse effect on its business or financial condition - The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business[96](index=96&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023, were reported - No material changes to the risk factors previously disclosed in the company's **2023 Form 10-K** were reported[98](index=98&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of its equity securities during the quarter ended March 31, 2024 - None reported for the period[99](index=99&type=chunk) [Defaults upon Senior Securities](index=20&type=section&id=Item%203%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the quarter - None reported[100](index=100&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This section is not applicable as the company is not engaged in mining operations - Not applicable[102](index=102&type=chunk) [Other Information](index=21&type=section&id=Item%205%20Other%20Information) The company did not report any other information required to be disclosed under this item for the quarter - None[103](index=103&type=chunk) [Exhibits](index=21&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents for financial data reporting - The report includes required **CEO and CFO certifications** under Sarbanes-Oxley Sections 302 and 906, along with Inline XBRL data files[105](index=105&type=chunk)

Financial Data and Key Metrics Changes - In Q4 2023, the company spent $1.0 million on R&D, a 301% increase from $258,000 in Q4 2022 [23] - For the full year 2023, R&D expenses totaled $3.3 million, up 109% from $1.6 million in 2022 [24] - The company reported a net loss of $4.5 million for the full year 2023, a 27% increase compared to the previous year [38] - Cash and cash equivalents at year-end 2023 were $4.1 million, down from $8.0 million at the end of 2022 [25] Business Line Data and Key Metrics Changes - The company has initiated clinical trials for PT00114, focusing on neuropsychiatric disorders, which marks a significant operational shift [81] - R&D spending reflects the commitment to advancing PT00114, with no sales and marketing expenses reported as the company is not yet in the market [78] Market Data and Key Metrics Changes - The company is targeting a broad range of mental health conditions, including anxiety, depression, PTSD, and addiction, with PT00114 showing promise in preclinical studies [67][70] Company Strategy and Development Direction - The company aims to efficiently execute the Phase 1 clinical program and prepare for proof-of-concept efficacy studies in 2024 [26] - There is a focus on understanding the pharmacology of PT00114 to facilitate its transition from bench to bedside [32] - The strategy includes collecting biomarker data to support the efficacy of PT00114 in clinical trials [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the therapeutic potential of PT00114, emphasizing its novel mechanism of action and safety profile [40][84] - The ongoing mental health crisis, exacerbated by COVID-19, presents an urgent need for effective treatments, which the company aims to address [41] Other Important Information - The company has transitioned into a clinical-stage biotech firm, marking a pivotal year in its history [81] - The mechanism of action of PT00114 is distinct from existing treatments, potentially offering fewer side effects and improved outcomes [64][70] Q&A Session Summary Question: Timeline for SAD and MAD studies readout and next regulatory steps - The SAD study is in progress, with enrollment expected to complete by the end of April, and data readout anticipated by mid-May [45] - The Phase 2 protocol is being finalized for submission to regulatory agencies, with confidence in the compound's safety [48] Question: Expectations for biomarker data from initial trials - The company plans to announce cortisol levels alongside SAD and MAD results, indicating a focus on collecting relevant biomarker data [51]

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Protagenic Therapeutics develops PT00114 for neuropsychiatric disorders, with Phase I/IIa trials underway, relying on licensed technology - The company's lead compound, **PT00114**, is a synthetic TCAP targeting stress-related neuropsychiatric and mood disorders[17](index=17&type=chunk) - A Phase I human trial for PT00114 began on September 26, 2023, with the first cohort's safety milestone passed on **February 13, 2024**, and full single-dose results expected in **Q2 2024**[18](index=18&type=chunk) - The company holds an exclusive worldwide license from the University of Toronto for PT00114 technology, with **2.5% royalties** on net sales and **10%** of up-front sub-license fees[60](index=60&type=chunk) - Protagenic relies on third-party contract manufacturers for PT00114 synthesis, with sufficient supply for GLP toxicology studies and Phase 1 human clinical trials[57](index=57&type=chunk) - As of **December 31, 2023**, the company holds issued and pending patents in the US, Canada, and Europe to protect its TCAP-related technology[76](index=76&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, clinical, and third-party reliance risks, with substantial doubt about its going concern ability and material internal control weaknesses - The company's significant operating losses, with an **accumulated deficit of $30.8 million** as of **December 31, 2023**, and negative cash flow raise substantial doubt about its ability to continue as a going concern, with current cash sufficient only until **Q3 2024**[92](index=92&type=chunk)[238](index=238&type=chunk) - The company reported net losses of **$5.0 million in 2023** and **$3.6 million in 2022**, with continued losses expected and profitability uncertain without successful drug development and regulatory approval[93](index=93&type=chunk) - The company is highly dependent on its exclusive license agreement with the University of Toronto for PT00114, where failure to meet obligations could result in the license becoming non-exclusive and materially harm the business[154](index=154&type=chunk) - The company relies on third parties for non-clinical studies, clinical trials, and manufacturing, where any performance failure could delay or prevent regulatory approval and commercialization[133](index=133&type=chunk)[139](index=139&type=chunk) - Management identified material weaknesses in internal controls over financial reporting, including a lack of segregation of duties and ineffective risk assessment, potentially leading to inaccurate financial reporting[206](index=206&type=chunk)[212](index=212&type=chunk) [Item 1B. Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - Not applicable[216](index=216&type=chunk) [Item 1C. Cybersecurity](index=40&type=section&id=Item%201C.%20Cybersecurity) The company maintains an ISO 27002-based cybersecurity risk management program, overseen by the audit committee, with no material threats - The company's cybersecurity risk management program is guided by **ISO 27002 standards** and utilizes external resources for assessment[217](index=217&type=chunk) - The Audit Committee of the Board of Directors oversees cybersecurity risk management[218](index=218&type=chunk) [Item 2. Properties](index=40&type=section&id=Item%202.%20Properties) The company does not own real property and leases its principal executive office in New York, NY - The Company leases its principal executive office at 149 Fifth Avenue, Suite 500, New York, New York 10010, and does not own any real property[219](index=219&type=chunk) [Item 3. Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2023, the company is not involved in any legal proceedings with a material adverse effect - There are no pending legal proceedings expected to have a material adverse effect on the company[220](index=220&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[221](index=221&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'PTIX', underwent a 1-for-4 reverse split in March 2023, and has never paid cash dividends - The company's common stock is traded on the **Nasdaq Capital Market** under the symbol **"PTIX"**[223](index=223&type=chunk) - A **1-for-4 reverse stock split** was completed on **March 22, 2023**, with all share and per-share data adjusted accordingly[227](index=227&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[226](index=226&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's loss from operations increased in 2023 due to higher R&D expenses, facing critical liquidity with cash sufficient only until Q3 2024, necessitating additional financing Results of Operations (2023 vs. 2022) | Metric | 2023 (USD) | 2022 (USD) | Change (USD) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Loss from Operations** | **$4,526,974** | **$3,557,788** | **+$969,186** | Increased R&D expenses | | Research & Development | $3,319,867 | $1,589,239 | +$1,730,628 | Additional costs for continued R&D efforts | | General & Administrative | $1,207,107 | $1,968,549 | -$761,442 | Lower stock compensation expense | | **Net Loss** | **$5,000,497** | **$3,555,505** | **+$1,444,992** | Higher operating loss and realized loss on securities | - The company's cash resources are projected to fund operations only until the **end of Q3 2024**, necessitating additional capital to continue operations[238](index=238&type=chunk)[439](index=439&type=chunk) - Net cash used in operating activities increased to **$3.7 million in 2023** from **$2.0 million in 2022**, primarily due to the higher net loss[235](index=235&type=chunk) - Key clinical milestones for 2024 include public results from Phase I single and multiple dose studies in **Q2**, and initiation of the Phase IIa study in **Q3**[249](index=249&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=44&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[248](index=248&type=chunk) [Item 9A. Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded internal controls over financial reporting were ineffective as of December 31, 2023, due to material weaknesses like lack of segregation of duties - Management concluded that internal controls over financial reporting were **not effective** as of **December 31, 2023**[250](index=250&type=chunk)[253](index=253&type=chunk) - Material weaknesses identified include a lack of necessary segregation of duties and limited multiple reviews in the financial reporting process[254](index=254&type=chunk)[261](index=261&type=chunk) - To remediate weaknesses, the company engaged an independent third party to enhance segregation of duties and plans additional controls[256](index=256&type=chunk) [Item 9B. Other Information](index=46&type=section&id=Item%209B.%20Other%20Information) The company received a Nasdaq deficiency notice in November 2023 for minimum bid price, but regained compliance by March 2024 - The company received a Nasdaq deficiency notice on **November 21, 2023**, for its stock price falling below the **$1.00 minimum bid requirement**[259](index=259&type=chunk) - The company regained compliance with the Nasdaq minimum bid price rule, and the matter was closed on **March 19, 2024**[262](index=262&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes Executive Chairman Garo H. Armen and CFO Alexander K. Arrow, with a Board of Directors comprising five committees and independent members - The executive team is led by **Garo H. Armen, PhD**, as Executive Chairman, and **Alexander K. Arrow, M.D., CFA**, as Chief Financial Officer[266](index=266&type=chunk) - The Board has **five standing committees**: Audit, Compensation, Nominating and Corporate Governance, Science, and Clinical and Regulatory[287](index=287&type=chunk) - Messrs. Corvese, Wright, and Barrage are independent directors, with Mr. Corvese designated as the 'audit committee financial expert'[281](index=281&type=chunk)[288](index=288&type=chunk) [Item 11. Executive Compensation](index=53&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal year 2023, CFO Alexander K. Arrow received a salary of $150,000, while Executive Chairman Garo H. Armen received no salary, with other key personnel compensated via stock options Summary Compensation Table (2023) | Name and Principal Position | Year | Salary ($) | Total Compensation ($) | | :--- | :--- | :--- | :--- | | Garo H. Armen, Chairman | 2023 | 0 | 0 | | Alexander K. Arrow, CFO | 2023 | 150,000 | 150,000 | - The company has consulting agreements with key personnel, including the COO, CMO, and scientific advisors, compensating them with stock options[304](index=304&type=chunk)[305](index=305&type=chunk)[307](index=307&type=chunk) - Non-employee directors receive annual grants of stock options, typically **10,000 shares** per year, plus additional options for committee chairmanship[310](index=310&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=55&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of April 1, 2024, directors and executive officers beneficially own approximately 35% of common stock, with Executive Chairman Garo H. Armen holding 21%, and the company maintains an equity compensation plan - As of **April 1, 2024**, all directors and executive officers as a group beneficially own approximately **35%** of the company's common stock[210](index=210&type=chunk)[376](index=376&type=chunk) - Executive Chairman **Garo H. Armen** is the largest beneficial owner, holding approximately **21%** of the common stock[376](index=376&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2023) | Plan category | No. of securities to be issued upon exercise | Weighted-average exercise price ($) | No. of securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 2,300,032 | $12.34 | 1,279,181 | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=64&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has related party transactions, including office space from Agenus, Inc. (where Dr. Armen is Chairman), insider participation in convertible notes, and stock options to Dr. Armen's son, subject to audit committee approval for transactions over $100,000 - The company uses conference room space at **Agenus, Inc.**, where Protagenic's Chairman, **Dr. Armen**, also serves as Chairman and CEO, provided at no cost[386](index=386&type=chunk) - Insiders **Garo H. Armen** and **Khalil Barrage** each invested **$200,000** in the 2019-2020 Convertible Note Offering, converted to stock as of **December 31, 2023**[387](index=387&type=chunk) - The company has a policy for reviewing and approving related party transactions over **$100,000**, managed by the audit committee[389](index=389&type=chunk) [Item 14. Principal Accountant Fees and Services](index=66&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company's independent auditor is Malone Bailey LLP, with total audit fees of $100,000 in 2023, an increase from $85,000 in 2022, all pre-approved by the Audit Committee Accountant Fees (2023 vs. 2022) | Fee Type | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | | :--- | :--- | :--- | | Audit fees | $100,000 | $85,000 | | Audit-related fees | $0 | $0 | | Tax Fees | $0 | $0 | | All other fees | $0 | $0 | | **Total** | **$100,000** | **$85,000** | Part IV [Item 15. Exhibits, Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K report, including corporate governance, material contracts, and compensation plans, with financial statement schedules omitted - This section provides a comprehensive list of all exhibits filed with or incorporated by reference into the annual report, including charter documents, material contracts, and compensation plans[408](index=408&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=71&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion but included a 'Going Concern' paragraph due to recurring losses and negative cash flows, raising substantial doubt about the company's ability to continue - The auditor's report contains a **"Going Concern" paragraph**, citing recurring losses and negative cash flows that raise substantial doubt about the company's ability to continue operations[420](index=420&type=chunk) [Consolidated Financial Statements](index=72&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for 2023 show a net loss of $5.0 million, increased from 2022, with total assets decreasing to $4.3 million and net cash used in operating activities at $3.7 million Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2023 ($ thousands) | Dec 31, 2022 ($ thousands) | | :--- | :--- | :--- | | Cash | $1,288 | $215 | | Marketable securities | $2,768 | $7,764 | | **Total Assets** | **$4,323** | **$8,037** | | Total Current Liabilities | $655 | $1,120 | | **Total Liabilities** | **$655** | **$1,120** | | **Total Stockholders' Equity** | **$3,668** | **$6,918** | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2023 ($ thousands) | Year Ended Dec 31, 2022 ($ thousands) | | :--- | :--- | :--- | | Research and development | $3,320 | $1,589 | | General and administrative | $1,207 | $1,969 | | Loss from Operations | ($4,527) | ($3,558) | | **Net Loss** | **($5,000)** | **($3,556)** | | Net loss per share | ($1.15) | ($0.82) | Consolidated Cash Flow Data (in thousands) | Account | Year Ended Dec 31, 2023 ($ thousands) | Year Ended Dec 31, 2022 ($ thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($3,704) | ($1,994) | | Net Cash Provided by Investing Activities | $4,775 | $1,597 | [Notes to Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes reiterate the going concern doubt, with resources sufficient only until Q3 2024, detail convertible note conversions, stock-based compensation, and significant federal net operating loss carryforwards fully offset by a valuation allowance - Note 2 (Liquidity and Going Concern) states current resources are insufficient to fund operations beyond **Q3 2024**, reinforcing the going concern risk[439](index=439&type=chunk) - On **November 6, 2023**, all outstanding convertible notes, totaling **$430,000** in principal plus accrued interest, were converted into **104,173 shares** of common stock[470](index=470&type=chunk)[473](index=473&type=chunk) - Stock-based compensation expense for **2023** was **$666,828**, with **$676,415** of unamortized expense remaining as of **December 31, 2023**, to be recognized over **3.55 years**[480](index=480&type=chunk)[481](index=481&type=chunk) - As of **December 31, 2023**, the company had federal Net Operating Loss (NOL) carryforwards of approximately **$15.2 million**, fully offset by a valuation allowance due to uncertain future profits[498](index=498&type=chunk) - Subsequent to year-end, in **January and March 2024**, the company granted a total of **737,750 stock options** to employees and consultants[504](index=504&type=chunk)[505](index=505&type=chunk)

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements%3A) Protagenic Therapeutics reported worsening financial performance with increased net losses, declining assets, and significant going concern uncertainties due to insufficient funding [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20at%20September%2030%2C%202023%20and%20December%2031%2C%202022%20%28unaudited%29) Total assets significantly decreased to **$5.43 million** by September 30, 2023, primarily due to reduced cash and marketable securities, while liabilities slightly increased Consolidated Balance Sheets | | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $5,376,660 | $8,035,645 | | **Total Assets** | **$5,432,642** | **$8,037,420** | | **Total Current Liabilities** | $1,280,106 | $1,119,862 | | **Total Liabilities** | **$1,280,106** | **$1,119,862** | | **Total Stockholders' Equity** | $4,152,536 | $6,917,558 | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022%20%28unaudited%29) Net losses increased for Q3 2023 (**$1.40 million**) and the nine months ended September 30, 2023 (**$3.32 million**), primarily due to a significant rise in research and development expenses Financial Performance Summary | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,124,030 | $501,366 | $2,308,440 | $1,331,719 | | General and administrative | $307,682 | $422,694 | $1,006,308 | $1,570,291 | | **Loss from Operations** | **($1,431,712)** | **($924,060)** | **($3,314,748)** | **($2,902,010)** | | **Net Loss** | **($1,396,626)** | **($925,305)** | **($3,324,313)** | **($2,954,131)** | | Net loss per share | ($0.32) | ($0.21) | ($0.77) | ($0.68) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20nine%20months%20ended%20September%2030%2C%202023%2C%20and%202022%20%28unaudited%29) Net cash used in operating activities increased to **$2.56 million** for the nine months ended September 30, 2023, leading to a cash balance decrease to **$153,322** Cash Flow Summary | Cash Flow Activity (Nine Months Ended Sep 30) | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($2,559,342) | ($1,812,878) | | Net Cash Provided by Investing Activities | $2,497,407 | $1,435,208 | | Net Change in Cash | ($61,857) | ($382,848) | | **Cash, End of Period** | **$153,322** | **$158,323** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28unaudited%29) Notes detail the company's biopharmaceutical focus, a 1-for-4 reverse stock split, a significant going concern warning due to insufficient funds, and the subsequent conversion of **$430,000** in convertible notes - The company is a biopharmaceutical entity focused on developing therapeutics for stress-related neuropsychiatric and mood disorders[18](index=18&type=chunk) - A 1-for-4 reverse stock split was effectuated on March 22, 2023, with all share and per-share data adjusted accordingly[19](index=19&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, as it lacks sufficient resources to fund operations past the end of Q3 2024 without additional financing[20](index=20&type=chunk)[21](index=21&type=chunk) - As of September 30, 2023, the company had **$430,000** in outstanding convertible notes with a maturity date of November 6, 2023[51](index=51&type=chunk)[52](index=52&type=chunk) - On November 6, 2023, convertible notes with a total principal of **$430,000** and accrued interest of **$90,866** were converted into **104,173** shares of common stock[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the PT00114 clinical trial, attributes increased operating losses to higher R&D, and reiterates substantial doubt about the company's going concern status due to insufficient funds - The company's lead compound, PT00114, is a synthetic form of TCAP for treating depression, anxiety, substance abuse, and PTSD[82](index=82&type=chunk) - On September 26, 2023, the company commenced a Phase I/IIa clinical trial for PT00114 to evaluate its potential in treating neuro-psychiatric conditions[84](index=84&type=chunk) Operating Results Comparison | Metric (Comparison vs. Prior Year Period) | Three Months Ended Sep 30 | Nine Months Ended Sep 30 | | :--- | :--- | :--- | | Loss from Operations | Increased to $1.43M from $0.92M | Increased to $3.31M from $2.90M | | R&D Expense | Increased by $622,664 | Increased by $976,721 | | G&A Expense | Decreased by $115,012 | Decreased by $563,983 | - The company has cash of **$153,332** and working capital of **$4,096,554** as of September 30, 2023, but does not have sufficient resources to fund operations past the end of Q3 2024, raising substantial doubt about its ability to continue as a going concern[88](index=88&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company has indicated that this section is not applicable to its business at this time - Not applicable[92](index=92&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of September 30, 2023, due to material weaknesses like insufficient segregation of duties, prompting third-party remediation - Management concluded that disclosure controls and procedures are not effective as of September 30, 2023, due to material weaknesses[93](index=93&type=chunk) - Identified material weaknesses include: 1. Insufficient segregation of duties within accounting functions 2. Limited level of multiple reviews among those preparing financial statements[96](index=96&type=chunk) - To remediate the weaknesses, the company has engaged an independent third party to enhance segregation of duties and identify areas for additional controls[98](index=98&type=chunk) [Part II. Other Information](index=22&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=22&type=section&id=Item%201%20Legal%20Proceedings) The company reports that there are currently no pending legal proceedings, government actions, or investigations that are expected to have a material adverse effect on its business or financial condition - As of the report date, there are no material legal proceedings pending against the company[101](index=101&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There were no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[103](index=103&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds, Defaults, and Other Information](index=22&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) For the reported period, the company had no unregistered sales of equity securities, no defaults upon senior securities, no applicable mine safety disclosures, and no other information to report - Item 2: No unregistered sales of equity securities were reported[104](index=104&type=chunk) - Item 3: No defaults upon senior securities were reported[105](index=105&type=chunk) - Item 4: Mine Safety Disclosures are not applicable[106](index=106&type=chunk) - Item 5: No other information was reported[107](index=107&type=chunk) [Exhibits](index=23&type=section&id=Item%206%20Exhibits) This section provides a list of all exhibits filed as part of the Form 10-Q, which includes Sarbanes-Oxley Act certifications by the CEO and CFO, and various Inline XBRL documents Exhibit List | Exhibit | Description | | :--- | :--- | | 31.1 | CEO Certification (Sarbanes-Oxley Act Section 302) | | 31.2 | CFO Certification (Sarbanes-Oxley Act Section 302) | | 32.1 | CEO and CFO Certification (Sarbanes-Oxley Act Section 906) | | 101 | Inline XBRL Documents (Instance, Schema, Calculation, etc.) | | 104 | Cover Page Interactive Data File |

Part I. Financial Information [Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements) The company reported a **$1.93 million** net loss for the six months ended June 30, 2023, with total assets decreasing and an accumulated deficit of **$27.7 million** raising going concern doubts [Consolidated Balance Sheets](index=4&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$6.92 million** as of June 30, 2023, from **$8.04 million** at year-end 2022, primarily due to reduced marketable securities Consolidated Balance Sheets | Account | June 30, 2023 (Unaudited) ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $219,435 | $215,189 | | Marketable securities | $5,823,420 | $7,763,517 | | Total Current Assets | $6,917,526 | $8,035,645 | | **Total Assets** | **$6,919,121** | **$8,037,420** | | **Liabilities & Equity** | | | | Total Current Liabilities | $1,505,390 | $1,119,862 | | **Total Liabilities** | **$1,505,390** | **$1,119,862** | | Total Stockholders' Equity | $5,413,731 | $6,917,558 | | **Total Liabilities and Stockholders' Equity** | **$6,919,121** | **$8,037,420** | [Consolidated Statements of Operations and Comprehensive Loss](index=5&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss increased to **$1.21 million** for Q2 2023 due to higher R&D expenses, while the six-month net loss slightly decreased to **$1.93 million** Consolidated Statements of Operations and Comprehensive Loss | Metric | Q2 2023 ($) | Q2 2022 ($) | Six Months 2023 ($) | Six Months 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $836,379 | $160,515 | $1,184,410 | $830,353 | | General and administrative | $307,363 | $476,159 | $698,626 | $1,147,597 | | Loss from Operations | $(1,143,742) | $(636,674) | $(1,883,036) | $(1,977,950) | | **Net Loss** | **$(1,209,591)** | **$(666,717)** | **$(1,927,687)** | **$(2,028,826)** | | Net loss per share | $(0.28) | $(0.15) | $(0.45) | $(0.47) | [Consolidated Statements of Cash Flows](index=8&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$1.90 million** for the six months ended June 30, 2023, offset by **$1.91 million** from investing activities, ending with **$219,435** cash Consolidated Statements of Cash Flows | Cash Flow Activity (Six months ended June 30) | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,903,576) | $(1,277,645) | | Net Cash Provided by Investing Activities | $1,906,684 | $1,077,679 | | Net Change in Cash | $4,246 | $(202,505) | | **Cash, End of the Period** | **$219,435** | **$338,666** | [Notes to Consolidated Financial Statements](index=9&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the company's biopharmaceutical focus, a March 2023 reverse stock split, liquidity concerns, outstanding convertible notes, and related-party R&D transactions - The company is a biopharmaceutical firm developing therapeutics for stress-related neuropsychiatric and mood disorders[18](index=18&type=chunk) - A **1-for-4 reverse stock split** was effectuated on March 22, 2023, with all share and per-share data adjusted accordingly[19](index=19&type=chunk) - The company has recurring losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern, though management believes it has sufficient resources to fund operations until the end of **Q3 2024**, alleviating this doubt[20](index=20&type=chunk)[21](index=21&type=chunk) - As of June 30, 2023, the company owes a total of **$430,000** on outstanding convertible notes, maturing on November 6, 2023[53](index=53&type=chunk)[54](index=54&type=chunk) - As of June 30, 2023, the company had **1,357,466 stock options** and **1,055,066 warrants** outstanding[57](index=57&type=chunk)[63](index=63&type=chunk) - The company engaged Agenus Inc. and CTC North, GmbH, related parties, for R&D services, with outstanding balances of **$255,928** and **$80,409** respectively as of June 30, 2023[75](index=75&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses lead compound PT00114 for stress disorders, with a Phase I/IIa trial planned for Q3 2023, noting increased Q2 losses due to R&D and reiterating sufficient liquidity until Q3 2024 - The company's lead compound, **PT00114**, is a synthetic peptide for treating stress-related disorders including depression, anxiety, and PTSD[82](index=82&type=chunk) - The company anticipates commencing a **Phase I/IIa trial** for PT00114 in the US or Germany in the **third quarter of 2023**[83](index=83&type=chunk) Operational Expense and Loss Trends | Metric (vs. Prior Year Period) | Three Months Ended June 30 ($) | Six Months Ended June 30 ($) | | :--- | :--- | :--- | | R&D Expense | Increased by $675,864 | Increased by $354,057 | | G&A Expense | Decreased by $168,796 | Decreased by $448,971 | | Loss from Operations | Increased to $1,143,742 | Decreased to $1,883,036 | - As of June 30, 2023, the company had cash of **$219,435** and working capital of **$5,412,136**, with sufficient resources to fund operations until the end of **Q3 2024**[87](index=87&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable to the company for the current reporting period - The company has stated that this item is not applicable[91](index=91&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of June 30, 2023, due to material weaknesses, including insufficient segregation of duties, prompting a remediation plan - Management concluded that disclosure controls and procedures were not effective as of June 30, 2023, due to identified **material weaknesses**[92](index=92&type=chunk) - Identified material weaknesses include insufficient segregation of duties within accounting functions and a limited level of multiple reviews among those preparing financial statements[95](index=95&type=chunk) - To remediate these weaknesses, the company has engaged an independent third party to enhance segregation of duties and implement additional controls[96](index=96&type=chunk) Part II. Other Information [Legal Proceedings](index=22&type=section&id=Item%201%20Legal%20Proceedings) The company reports no pending legal proceedings or investigations expected to have a material adverse effect on its business or financial condition - Currently, no legal proceedings are pending against the company that would be expected to have a material adverse effect[99](index=99&type=chunk) [Risk Factors](index=22&type=page&id=Item%201A%20Risk%20Factors) The company states no material changes to its risk factors from those disclosed in its 2022 Form 10-K - There have been no material changes to the risk factors previously disclosed in the **2022 Form 10-K**[101](index=101&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[102](index=102&type=chunk) [Other Information](index=22&type=section&id=Item%205%20Other%20Information) The company reported no other information for the period - None[105](index=105&type=chunk) [Exhibits](index=23&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed include **CEO/CFO certifications (31.1, 31.2, 32.1)** and **Inline XBRL data files (101 series)**[107](index=107&type=chunk)

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements) Unaudited Q1 2023 financial statements detail financial position, operations, equity, and cash flows, noting net loss improvement and going concern considerations [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets decreased to $7.67 million, liabilities increased to $1.25 million, and equity declined to $6.41 million Consolidated Balance Sheets (Unaudited) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $138,491 | $215,189 | | Marketable securities | $7,512,093 | $7,763,517 | | **Total Current Assets** | **$7,664,603** | **$8,035,645** | | **Total Assets** | **$7,666,288** | **$8,037,420** | | **Liabilities & Equity** | | | | Total Current Liabilities | $1,251,975 | $1,119,862 | | **Total Liabilities** | **$1,251,975** | **$1,119,862** | | **Total Stockholders' Equity** | **$6,414,313** | **$6,917,558** | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2023 net loss improved to $718,096 ($0.17 per share) from $1.36 million ($0.32 per share) in Q1 2022, driven by reduced expenses Consolidated Statements of Operations (Unaudited) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Research and development | $348,031 | $669,838 | | General and administrative | $391,263 | $671,438 | | **Loss from Operations** | **($739,294)** | **($1,341,276)** | | **Net Loss** | **($718,096)** | **($1,362,109)** | | Net loss per common share | ($0.17) | ($0.32) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2023 saw net cash used in operations decrease to $371,834, with $294,669 from investing activities, resulting in a cash balance of $138,491 Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($371,834) | ($430,565) | | Net Cash Provided by Investing Activities | $294,669 | $370,763 | | Net Change in Cash | ($76,698) | ($58,996) | | **Cash, End of the Period** | **$138,491** | **$482,175** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail a 1-for-4 reverse stock split, going concern doubt (alleviated until Q3 2024), outstanding convertible notes, and related party transactions - The company is a **biopharmaceutical firm** focused on developing therapeutics for stress-related neuropsychiatric and mood disorders[16](index=16&type=chunk) - On March 22, 2023, the company executed a **1-for-4 reverse stock split**, with all share and per-share data adjusted to reflect this split[17](index=17&type=chunk) - The company has incurred significant recurring losses and negative cash flows, raising **substantial doubt about its ability to continue as a going concern**, though management believes current resources are **sufficient to fund operations at least until the end of Q3 2024**, alleviating this doubt for the next twelve months[18](index=18&type=chunk)[19](index=19&type=chunk) - As of March 31, 2023, the company has **$430,000 in outstanding convertible notes** ($230,000 to third parties and $200,000 to related parties) that mature on **November 6, 2023**[49](index=49&type=chunk)[50](index=50&type=chunk) - The company has engaged **Agenus Inc.** and its subsidiary **CTC North, GmbH**, which are **related parties**, for research and development services, with outstanding balances of **$105,928** to Agenus and **$65,199** to CTC as of March 31, 2023[70](index=70&type=chunk)[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses lead compound PT00114, reduced Q1 2023 operating loss to $0.74 million, and sufficient cash to fund operations until Q3 2024 - The company's lead compound, **PT00114**, is a synthetic peptide for treating stress-related disorders, with a **Phase I/IIa trial** anticipated to start in **Q3 2023** in the US or Germany[76](index=76&type=chunk)[77](index=77&type=chunk) - The **loss from operations decreased by $601,982** in Q1 2023 compared to Q1 2022, primarily due to a **$321,807 decrease in R&D expenses** and a **$280,175 decrease in G&A expenses**[79](index=79&type=chunk) - As of March 31, 2023, the company had **$138,491 in cash** and **$6.4 million in working capital**, which management believes is **sufficient to fund operations until the end of Q3 2024**, after which additional financing will be required[80](index=80&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=18&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable to the company - The company has indicated that this item is **not applicable**[84](index=84&type=chunk) [Controls and Procedures](index=18&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of March 31, 2023, due to material weaknesses, and is engaging a third party for remediation - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2023, due to identified **material weaknesses**[85](index=85&type=chunk) - Identified material weaknesses include: 1) **Insufficient segregation of duties** within accounting functions, and 2) A **limited level of multiple reviews** during financial statement preparation[90](index=90&type=chunk) - To address the material weaknesses, the company has **engaged an independent third party** to enhance segregation of duties and implement additional controls[88](index=88&type=chunk) [Part II. Other Information](index=19&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=19&type=section&id=Item%201%20Legal%20Proceedings) The company reports no pending legal proceedings, government actions, or investigations expected to have a material adverse effect - As of the report date, the company is **not involved in any material legal proceedings**[91](index=91&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2022 Form 10-K have been reported - There have been **no material changes** to the company's risk factors from those disclosed in the 2022 Form 10-K[93](index=93&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - **None**[94](index=94&type=chunk) [Defaults upon Senior Securities](index=19&type=section&id=Item%203%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None**[95](index=95&type=chunk) [Mine Safety Disclosures](index=19&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This section is not applicable to the company - **Not applicable**[96](index=96&type=chunk) [Other Information](index=19&type=section&id=Item%205%20Other%20Information) The company reported no other information for the period - **None**[97](index=97&type=chunk) [Exhibits](index=20&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with Form 10-Q, including Sarbanes-Oxley certifications and Inline XBRL data - The exhibits filed with this Form 10-Q include **CEO and CFO certifications** under **Sarbanes-Oxley Sections 302 and 906**, as well as various **Inline XBRL documents**[100](index=100&type=chunk)

Part I [Business](index=7&type=section&id=Item%201%2E%20Business) Protagenic Therapeutics is a clinical-stage biopharmaceutical company developing treatments for stress-related neuropsychiatric disorders, with its lead candidate PT00114 advancing to a Phase I/IIa study in Q3 2023 - The company is a biopharmaceutical firm developing therapeutics for stress-related neuropsychiatric and mood disorders, with its lead compound being **PT00114**[25](index=25&type=chunk) - Protagenic anticipates re-submitting an Investigational New Drug (IND) application and initiating a **Phase I/IIa study for PT00114 in Q3 2023**, following regulatory feedback[26](index=26&type=chunk)[27](index=27&type=chunk) - The company operates under an exclusive worldwide license agreement with the University of Toronto for its core **TCAP technology**, requiring a **2.5% royalty** on net sales[64](index=64&type=chunk) - As of December 31, 2022, the company holds exclusive rights to a portfolio of intellectual property, including **four issued patents** in the US, Canada, EU, and Australia, with **three additional issued patents** and **ten pending applications**[79](index=79&type=chunk) [Clinical Development and Strategy](index=7&type=section&id=Item%201%2E%20Business%20-%20Clinical%20Development%20and%20Strategy) The company's strategy focuses on advancing its lead candidate, PT00114, through a Phase I/IIa 'basket trial' in Q3 2023 to evaluate safety and preliminary efficacy across multiple neuropsychiatric indications - The company plans a **'basket trial'** to assess safety in healthy volunteers, then safety and preliminary efficacy in patients with depression (MDD), anxiety (GAD), opioid use disorder (OUD), and PTSD[29](index=29&type=chunk)[32](index=32&type=chunk) - The clinical development program is led by **Dr. Maurizio Fava** of Massachusetts General Hospital, who also designed the Phase I/II clinical study[28](index=28&type=chunk) [Market and Competition](index=8&type=section&id=Item%201%2E%20Business%20-%20Market%20and%20Competition) The company targets large neuropsychiatric markets with unmet needs, facing intense competition but believing PT00114's novel mechanism and preclinical profile offer competitive advantages - The target indications represent large patient populations with significant unmet medical needs, including depression, anxiety, PTSD, and substance use disorders[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The company faces competition from established drug classes such as opioid receptor modulators, atypical antipsychotics (e.g., Rexulti, Vraylar), ketamine/esketamine (Spravato), and emerging GABA/NMDA receptor modulators[69](index=69&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - PT00114's potential competitive advantages, based on preclinical data, include **rapid onset of action**, **long-lasting effects**, natural crossing of the blood-brain barrier, and an anticipated better safety profile (e.g., no expected liver toxicities, non-addictive)[78](index=78&type=chunk)[80](index=80&type=chunk) [Intellectual Property](index=17&type=section&id=Item%201%2E%20Business%20-%20Intellectual%20Property) Protagenic's crucial intellectual property portfolio, primarily licensed from the University of Toronto, includes four issued patents on its core TCAP technology and additional patents and pending applications as of year-end 2022 Intellectual Property Portfolio Status (as of Dec 31, 2022) | Category | Issued Patents | Pending Applications | | :--- | :--- | :--- | | Original Platform Technology (TCAP) | 4 (US, CA, EU, AU) | - | | Related Technology | 3 | 10 | - The company's exclusive worldwide rights to its core patent applications are secured through a License Agreement with the University of Toronto[79](index=79&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A%2E%20Risk%20Factors) The company faces substantial risks including ongoing operating losses, clinical trial uncertainties, reliance on third parties, potential Nasdaq delisting, and identified material weaknesses in internal financial controls - The company has a history of operating losses, with an accumulated deficit of **$25,777,375** as of December 31, 2022, and expects losses to continue, making its ability to continue as a going concern dependent on raising additional capital[98](index=98&type=chunk)[99](index=99&type=chunk) - The company's lead product candidate, PT00114, is in early development, and there is a high risk of failure in clinical trials, as the drug development and approval process is lengthy, expensive, and uncertain[114](index=114&type=chunk)[118](index=118&type=chunk) - Protagenic relies on third parties for non-clinical studies, clinical trials, and manufacturing, and any failure by these parties to perform could adversely affect its business[131](index=131&type=chunk)[138](index=138&type=chunk) - The company received a Nasdaq deficiency notice for its stock price falling below the **$1.00 minimum bid requirement**, and failure to regain and maintain compliance could lead to delisting[193](index=193&type=chunk)[194](index=194&type=chunk) - Management identified material weaknesses in internal controls over financial reporting, including a lack of segregation of duties and ineffective risk assessment[209](index=209&type=chunk)[210](index=210&type=chunk)[213](index=213&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B%2E%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - Not applicable[219](index=219&type=chunk) [Properties](index=43&type=section&id=Item%202%2E%20Properties) The company does not own real property, operating from leased executive office space in New York - The Company does not own any real property and leases its principal executive office space in New York[220](index=220&type=chunk) [Legal Proceedings](index=43&type=section&id=Item%203%2E%20Legal%20Proceedings) As of December 31, 2022, the company is not involved in any legal proceedings expected to materially affect its business or financial condition - There are no pending legal proceedings that are expected to have a material adverse effect on the company[221](index=221&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[222](index=222&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205%2E%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and warrants trade on the Nasdaq Capital Market, with limited volume and no anticipated cash dividends as earnings are retained for business development - The company's common stock and warrants are listed on the Nasdaq Capital Market under the symbols **'PTIX'** and **'PTIXW'**, respectively[224](index=224&type=chunk) Quarterly Stock Price (2022, Post-Split Adjusted) | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | Q1 2022 | 5.80 | 3.20 | | Q2 2022 | 3.68 | 2.60 | | Q3 2022 | 3.20 | 2.28 | | Q4 2022 | 2.60 | 1.40 | - The company has never paid cash dividends and does not intend to in the foreseeable future[227](index=227&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207%2E%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For 2022, the company's loss from operations decreased to $3.6 million, with $0.2 million cash and $6.9 million working capital, believed sufficient to fund operations until Q3 2024 Results of Operations (in thousands) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Research and Development | $1,589 | $1,137 | +$452 | | General and Administrative | $1,969 | $3,004 | -$1,035 | | **Loss from Operations** | **($3,558)** | **($4,140)** | **+$582** | | **Net Loss** | **($3,555)** | **($4,523)** | **+$968** | - The decrease in G&A expenses was primarily due to lower stock compensation expense in 2022 compared to 2021[234](index=234&type=chunk) - As of December 31, 2022, the company had cash of **$215,189** and working capital of **$6,915,783**, which management believes are sufficient to fund operations until the end of Q3 2024[240](index=240&type=chunk)[241](index=241&type=chunk) Cash Flow Summary (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating | ($1,994) | ($2,799) | | Net Cash Provided by/(Used in) Investing | $1,597 | ($9,910) | | Net Cash Provided by Financing | $0 | $12,578 | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[253](index=253&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208%2E%20Financial%20Statements%20and%20Supplementary%20Data) Audited consolidated financial statements for 2022 and 2021 show decreased total assets to $8.0 million, stable liabilities, an accumulated deficit of $25.8 million, and a net loss of $3.6 million for 2022 Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash | $215 | $541 | | Marketable Securities | $7,764 | $9,830 | | **Total Assets** | **$8,037** | **$11,060** | | Total Current Liabilities | $1,120 | $800 | | **Total Liabilities** | **$1,120** | **$1,118** | | **Accumulated Deficit** | **($25,777)** | **($22,222)** | | **Total Stockholders' Equity** | **$6,918** | **$9,942** | Consolidated Statement of Operations Data (in thousands) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Research and Development | $1,589 | $1,137 | | General and Administrative | $1,969 | $3,004 | | **Loss from Operations** | **($3,558)** | **($4,140)** | | **Net Loss** | **($3,555)** | **($4,523)** | | **Net Loss Per Share** | **($0.82)** | **($1.24)** | - The company effectuated a **1-for-4 reverse stock split** on March 22, 2023, and all share and per-share data in the financial statements have been adjusted to reflect this split[429](index=429&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=49&type=section&id=Item%209%2E%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[255](index=255&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%209A%2E%20Controls%20and%20Procedures) Management concluded that internal controls over financial reporting were ineffective as of December 31, 2022, due to material weaknesses, with a remediation plan initiated - Management concluded that internal control over financial reporting was **not effective** as of December 31, 2022[257](index=257&type=chunk)[260](index=260&type=chunk) - Material weaknesses were identified, including: 1) lack of adequate segregation of duties within accounting functions, and 2) a limited level of multiple reviews in the financial reporting process[262](index=262&type=chunk)[268](index=268&type=chunk) - To remediate these weaknesses, the company has engaged an independent third party to help enhance segregation of duties and implement additional controls[265](index=265&type=chunk) [Other Information](index=52&type=section&id=Item%209B%2E%20Other%20Information) The company executed a 1-for-4 reverse stock split on March 22, 2023, to regain Nasdaq compliance after receiving a deficiency notice for its minimum bid price - On March 22, 2023, the company implemented a **1-for-4 reverse stock split** to regain compliance with Nasdaq's minimum **$1.00 bid price requirement**[270](index=270&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=53&type=section&id=Item%2010%2E%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's leadership, board composition, five standing committees, and adopted Code of Business Conduct and Ethics - The executive team includes **Garo H. Armen, PhD**, as Executive Chairman and **Alexander K. Arrow, M.D., CFA**, as Chief Financial Officer[275](index=275&type=chunk) - The Board of Directors has five standing committees: Audit, Compensation, Nominating and Corporate Governance, Science, and Clinical and Regulatory[296](index=296&type=chunk) - The Audit Committee is composed of independent directors Brian Corvese (Chairperson), Timothy Wright, and Khalil Barrage, with Mr. Corvese designated as the **'audit committee financial expert'**[297](index=297&type=chunk) [Executive Compensation](index=59&type=section&id=Item%2011%2E%20Executive%20Compensation) Executive compensation for 2022 primarily included a $150,000 CFO salary, with other officers and directors compensated mainly through stock option grants Summary Compensation (2022) | Name and Principal Position | Salary ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Garo H. Armen, Chairman | 0 | 0 | 0 | | Alexander K. Arrow, CFO | 150,000 | 0 | 150,000 | - Compensation for key personnel, including the COO, CMO, and scientific advisors, is provided through consulting agreements and primarily consists of stock option grants[312](index=312&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - Non-employee directors are compensated with annual grants of stock options, with additional options for chairing a committee[319](index=319&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=61&type=section&id=Item%2012%2E%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 26, 2023, Executive Chairman Garo H. Armen was the largest beneficial owner with 26% of common stock, while all directors and executive officers collectively owned 36% - Executive Chairman **Garo H. Armen** is the largest beneficial owner with **26%** of the common stock[371](index=371&type=chunk) - All directors and executive officers as a group beneficially own approximately **36%** of the company's outstanding common stock[371](index=371&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan category | Securities to be issued upon exercise | Weighted-average exercise price ($) | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 2,894,624 | $10.54 | 48,719 | [Certain Relationships and Related Transactions, and Director Independence](index=71&type=section&id=Item%2013%2E%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses related-party transactions, including no-cost office space from Agenus, convertible note investments, and stock option grants, with a formal review policy and independent director determinations - The company utilizes office space from Agenus, Inc., where Executive Chairman Dr. Garo Armen is also Chairman and CEO, at no cost[380](index=380&type=chunk) - Past related-party transactions include investments in a convertible note offering by Dr. Armen and director Khalil Barrage, and stock option grants to Dr. Armen's son for consulting work[382](index=382&type=chunk)[383](index=383&type=chunk) - The Board has determined that Messrs. Barrage, Corvese, and Wright are independent directors, while Dr. Buell and Dr. Stein are not considered independent due to their roles and relationships with the company and its chairman[387](index=387&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk) [Principal Accountant Fees and Services](index=73&type=section&id=Item%2014%2E%20Principal%20Accountant%20Fees%20and%20Services) This section details fees paid to Malone Bailey LLP for audit and other services in fiscal years 2022 and 2021, all pre-approved by the Audit Committee Accountant Fees (Malone Bailey LLP) | Fee Type | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | :--- | :--- | :--- | | Audit fees | $85,000 | $68,000 | | Audit-related fees | $0 | $62,750 | | Tax Fees | $0 | $0 | | All other fees | $0 | $0 | | **Total** | **$85,000** | **$130,750** | Part IV [Exhibits, Financial Statement Schedules](index=74&type=section&id=Item%2015%2E%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K report, including consolidated financial statements and a comprehensive index of exhibits - This section provides a list of all financial statements, schedules, and exhibits filed with the Form 10-K, including the company's certificate of incorporation, bylaws, material contracts like the technology license agreement, and executive certifications[399](index=399&type=chunk)[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk)