Protagenic Therapeutics(PTIX) - 2024 Q1 - Quarterly Report

Part I. Financial Information Financial Statements 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 | | 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 | $3,668,117 | Consolidated Statements of Operations and Comprehensive Loss | | Three months ended March 31, 2024 ($) | 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) | ($0.17) | Consolidated Statements of Cash Flows | | Three months ended March 31, 2024 ($) | 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 - The company is a biopharmaceutical firm developing therapeutics for stress-related neuropsychiatric and mood disorders[16] - 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][18] - 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][52][59] - 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] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, noting a significant increase in operating loss to $1.74 million in Q1 2024, primarily due to higher R&D expenses, and emphasizes a critical liquidity situation with cash insufficient to fund operations beyond Q3 2024 - The company's lead compound, PT00114, a synthetic peptide for depression, anxiety, and PTSD, began a Phase I/IIa clinical trial in September 2023[77][79] Operating Results (Q1) | Operating Results (Q1) | 2024 ($) | 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] - 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] Quantitative and Qualitative Disclosures about Market Risk 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] Controls and Procedures 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][89] - Identified material weaknesses include insufficient segregation of duties within accounting functions and a limited level of multiple reviews during financial statement preparation[91] - A remediation plan has been initiated, involving an independent third party to enhance segregation of duties and implement additional controls[93] Part II. Other Information Legal Proceedings 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] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of its equity securities during the quarter ended March 31, 2024 - None reported for the period[99] Defaults upon Senior Securities The company reported no defaults upon its senior securities during the quarter - None reported[100] Mine Safety Disclosures This section is not applicable as the company is not engaged in mining operations - Not applicable[102] Other Information The company did not report any other information required to be disclosed under this item for the quarter - None[103] Exhibits 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]