Bullfrog AI (US:BFRG)2024-05-10 20:06PART I. FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for Q1 2024 reflect the company's pre-revenue stage, a net loss of $1.9 million, and significant asset and equity growth to $7.6 million and $6.8 million respectively, driven by a secondary public offering Condensed Consolidated Balance Sheets As of March 31, 2024, total assets significantly increased to $7.65 million from $2.78 million at year-end 2023, primarily due to increased cash from financing, with total liabilities rising and stockholders' equity reaching $6.80 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Items | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $7,010,717 | $2,624,730 | | Total current assets | $7,643,313 | $2,770,612 | | Total assets | $7,648,856 | $2,776,586 | | Liabilities & Equity | | | | Total current liabilities | $844,530 | $184,350 | | Total liabilities | $844,530 | $184,350 | | Total stockholders' equity | $6,804,326 | $2,592,236 | Condensed Consolidated Statements of Operations For Q1 2024, the company reported no revenue, with net loss widening to $1.90 million from $1.33 million year-over-year, primarily due to increased operating expenses, including $552,126 in R&D and $1.41 million in G&A Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total Revenue | $0 | $0 | | Research and development | $552,126 | $369,933 | | General and administrative | $1,413,592 | $820,712 | | Total operating expenses | $1,965,718 | $1,190,645 | | Loss from operations | ($1,965,718) | ($1,190,645) | | Net loss | ($1,903,794) | ($1,325,547) | | Net loss per share | ($0.26) | ($0.27) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased from $2.59 million at year-end 2023 to $6.80 million by March 31, 2024, primarily driven by $5.67 million from common stock and warrant issuances, partially offset by a $1.90 million net loss Changes in Stockholders' Equity for Q1 2024 (Unaudited) | Description | Amount | | :--- | :--- | | Balance at December 31, 2023 | $2,592,236 | | Issuance of common stock and warrants, net | $5,674,651 | | Issuance of common stock (warrant exercises) | $105,816 | | Stock-based compensation | $335,417 | | Net loss | ($1,903,794) | | Balance at March 31, 2024 | $6,804,326 | Condensed Consolidated Statements of Cash Flows In Q1 2024, net cash used in operating activities was $1.90 million, while financing activities provided $6.29 million, leading to a $4.39 million net increase in cash and a period-end balance of $7.01 million Cash Flow Summary (Unaudited) | Cash Flow Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,901,634) | ($2,361,336) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by financing activities | $6,287,621 | $7,723,187 | | Net increase in cash | $4,385,987 | $5,361,851 | | Cash at end of period | $7,010,717 | $5,419,521 | Notes to Condensed Consolidated Financial Statements The notes detail the company's AI/ML platform for drug development, its history of net losses, and the sufficiency of its $7.0 million cash balance, bolstered by a $5.7 million Q1 2024 offering, to fund operations for 12 months, alongside key accounting policies and license agreements - The company focuses on advanced AI/ML-driven analysis of complex medical and healthcare data sets, utilizing its proprietary bfLEAP™ platform developed at The Johns Hopkins University Applied Physics Laboratory (JHU-APL)2324 - The company has had negative cash flows from operations since inception, and following a secondary public offering in Q1 2024 that raised approximately $5.7 million in net proceeds, the company believes its cash balance of approximately $7.0 million is sufficient to fund operations for about 12 months26 - In February 2024, the company received approximately $6.5 million in gross proceeds from an underwritten secondary public offering of common stock, pre-funded warrants, and warrants61 - The company holds several exclusive, worldwide, royalty-bearing licenses for technology and drug candidates from institutions including JHU-APL, George Washington University, and Johns Hopkins University104105106 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's pre-revenue status, its bfLEAP™ AI/ML platform, a net loss driven by increased R&D and G&A expenses, and the $5.7 million net proceeds from a Q1 2024 secondary offering, deemed sufficient for 12 months of operations Overview The company leverages its bfLEAP™ AI/ML platform for medical data analysis and drug development, having initiated R&D, formed partnerships, and acquired drug asset rights since its February 2023 IPO, including licenses from Johns Hopkins University - The company's core technology is the bfLEAP™ AI/ML platform, licensed from The Johns Hopkins University Applied Physics Laboratory (JHU-APL), which is used to analyze complex data in medicine100165 - The business strategy includes generating revenue from service contracts, such as a completed project with a rare disease non-profit, and acquiring rights to drug assets for internal development and eventual divestiture112 - The company has signed exclusive worldwide license agreements with Johns Hopkins University for a glioblastoma drug and with George Washington University for a liver cancer drug112 Results of Operations For Q1 2024, the company reported no revenue, with total operating expenses increasing by $775,073 to $1.97 million, driven by higher R&D costs from new hires and studies, and increased G&A expenses due to personnel and equity compensation - The company did not generate any revenue during the three months ended March 31, 2024115 Comparison of Operating Expenses (Q1 2024 vs Q1 2023) | Expense Category | Q1 2024 | Q1 2023 | Net Change | | :--- | :--- | :--- | :--- | | Research and development | $552,126 | $369,933 | $182,193 | | General and administrative | $1,413,592 | $820,712 | $592,880 | | Total operating expenses | $1,965,718 | $1,190,645 | $775,073 | - The increase in R&D expenses was primarily due to hiring additional technical staff, engaging consultants, and initiating a preclinical obesity study, while the increase in G&A expenses was mainly due to increased personnel costs from new hires and associated equity compensation152164 Liquidity and Capital Resources As of March 31, 2024, the company held $7.0 million in cash and an $11.7 million accumulated deficit, with operations funded by stock sales, including a Q1 2024 secondary offering that provided $5.7 million net, deemed sufficient for 12 months of operations - The company had a cash balance of approximately $7.0 million as of March 31, 2024168 - In Q1 2024, the company completed an underwritten secondary offering of common stock and warrants, generating approximately $5.7 million in net proceeds168179 - Management believes the company's current capital resources are sufficient to fund planned operations for approximately 12 months from the filing date180 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Bullfrog AI Holdings, Inc. is not required to provide the information for this item - Disclosure for this item is not required as the company qualifies as a smaller reporting company120127 Controls and Procedures The company is maintaining and designing disclosure controls and procedures to ensure timely and accurate reporting, and during Q1 2024, it implemented changes to its internal control over financial reporting by transitioning accounting processes to a new external firm and automating vendor payments - The company is in the process of transitioning and maintaining disclosure controls and procedures to ensure information is recorded and reported in a timely manner124 - During Q1 2024, the company transitioned its accounting processes to a new external firm and automated vendor payments, which are changes intended to enhance internal control over financial reporting139 PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any legal proceedings that are considered material to its financial condition or results of operations - As of the report date, the company is not a party to any legal proceedings deemed to be material to its financial condition or operations126 Risk Factors As a smaller reporting company, Bullfrog AI Holdings, Inc. is not required to provide the information for this item - Smaller reporting companies are not required to provide the information required by this item127 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the first quarter of 2024, and the company continues to use the proceeds from its Initial Public Offering and secondary offering to fund its operations - There were no issuances of unregistered sales of equity securities during the three months ended March 31, 2024128 - The company continues to use proceeds from its IPO and secondary offering for its operations121 Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reported no defaults upon senior securities144 Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company's business145 Other Information This section discloses that CEO Vininder Singh has a Rule 10b5-1 sales plan for up to 1,000,000 shares of common stock, under which 100,000 shares were sold in Q1 2024, with no other directors or executive officers adopting or modifying such plans - CEO Vininder Singh has a 10b5-1 sales plan, established in June 2023, for the sale of up to 1,000,000 shares of common stock, under which 100,000 shares were sold in Q1 2024146 Exhibits This section lists the exhibits filed with the quarterly report, including certifications by the CEO and CFO pursuant to SEC rules and the Sarbanes-Oxley Act, and documents formatted in Inline XBRL - The report includes certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents, as exhibits133148