PTIXW Protagenic Therapeutics Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2024

 

or

 

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _________to___________

 

Commission File Number: 001-12555

 

PROTAGENIC THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		06-1390025
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

149 Fifth Avenue, Suite 500, New York, New York 10010

(Address of Principal Executive Office) (Zip Code)

 

(212) 994-8200

Registrant’s Telephone Number Including Area Code

 

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

 

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001		PTIX		Nasdaq Capital Market
Common Stock Purchase Warrant		PTIXW		Nasdaq Capital Market

 

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

 

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

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 126-2 of the Exchange Act).

☐ Yes ☒ No

 

As of May 13, 2024 there were 4,435,132 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

PROTAGENIC THERAPEUTICS, INC.

Form 10-Q Report

For the Fiscal Quarter Ended March 31, 2024

TABLE OF CONTENTS

 

		Page
Part I.	Financial Information
Item 1	Financial Statements:
	Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 (unaudited)	3
	Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4	Controls and Procedures	17
Part II.	Other Information
Item 1	Legal Proceedings	18
Item 1A	Risk Factors	18
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3	Defaults upon Senior Securities	18
Item 4	Mine Safety Disclosures	19
Item 5	Other Information	19
Item 6	Exhibits	19
Signatures		20

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

PROTAGENIC THERAPEUTICS, INC., AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(unaudited)

 

		March 31, 2024				December 31, 2023
ASSETS
CURRENT ASSETS
Cash		$	831,778			$	1,287,893
Marketable securities			1,592,025				2,768,119
Prepaid expenses			43,994				144,025
TOTAL CURRENT ASSETS			2,467,797				4,200,037
Equipment - net			110,761				123,332
TOTAL ASSETS		$	2,578,558			$	4,323,369
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	365,686			$	439,757
Accounts payable and accrued expenses - related party			80,409				215,495
Accounts payable and accrued expenses			80,409				215,495
TOTAL CURRENT LIABILITIES			446,095				655,252
TOTAL LIABILITIES			446,095				655,252
STOCKHOLDERS’ EQUITY
Preferred stock, $0.000001 par value; 20,000,000 shares authorized; none shares issued and outstanding in the following classes:
Preferred stock; par value $0.000001; 2,000,000 shares authorized; none issued and outstanding			-				-
Series B convertible preferred stock, $0.000001 par value;18,000,000 shares authorized; 0 and 0 shares issued and outstanding at March 31, 2024, and December 31, 2023			-				-
Preferred stock, value			-				-
Common stock, $0.0001 par value, 100,000,000 shares authorized, 4,435,132 and 4,435,132 shares issued and outstanding at March 31, 2024, and December 31, 2023			444				444
Additional paid-in-capital			34,720,952				34,559,091
Accumulated deficit			(32,502,166	)			(30,777,872	)
Accumulated other comprehensive loss			(86,767	)			(113,546	)
TOTAL STOCKHOLDERS’ EQUITY			2,132,463				3,668,117
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,578,558			$	4,323,369

 

See accompanying notes to the unaudited consolidated financial statements

 

 

PROTAGENIC THERAPEUTICS, INC., AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

 

		2024				2023
		For the three months ended March 31,
		2024				2023
OPERATING AND ADMINISTRATIVE EXPENSES
Research and development		$	1,460,746			$	348,031
General and administrative			277,613				391,263
TOTAL OPERATING AND ADMINISTRATIVE EXPENSES			1,738,359				739,294
LOSS FROM OPERATIONS			(1,738,359	)			(739,294	)
OTHER INCOME
Interest income			13,867				56,893
Interest expense			-				(31,263	)
Realized gain (loss) on marketable securities			198				(4,432	)
TOTAL OTHER INCOME			14,065				21,198
LOSS BEFORE TAX			(1,724,294	)			(718,096	)
INCOME TAX EXPENSE			-				-
NET LOSS		$	(1,724,294	)		$	(718,096	)
COMPREHENSIVE LOSS
Other Comprehensive Loss - net of tax
Net unrealized gain on marketable securities			26,587				47,677
Foreign exchange translation income			192				467
TOTAL COMPREHENSIVE LOSS		$	(1,697,515	)		$	(669,952	)
Net loss per common share - Basic and Diluted		$	(0.39	)		$	(0.17	)
Weighted average common shares - Basic and Diluted			4,435,132				4,317,875

 

See accompanying notes to the unaudited consolidated financial statements

 

 

PROTAGENIC THERAPEUTICS, INC., AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three Months Ended March 31, 2024 and 2023

(unaudited)

 

		Shares				Amount				Shares				Amount				Capital				(Deficit)				Loss				Equity
		Series B Convertible Preferred Stock								Common Stock								Additional Paid-in-				Accumulated				Accumulated Other Comprehensive				Stockholders’
		Shares				Amount				Shares				Amount				Capital				(Deficit)				Loss				Equity
BALANCE – December 31, 2022			-			$	-				4,321,315			$	434			$	33,371,406			$	(25,777,375	)		$	(676,907	)		$	6,917,558
Foreign currency translation gain			-				-				-				-				-				-				467				467
Unrealized gain on marketable securities			-				-				-				-				-				-				47,677				47,677
Stock compensation - stock options			-				-				-				-				166,707				-				-				166,707
Rounding from reverse split			-				-				9,644				-				-				-				-				-
Net loss			-				-				-				-				-				(718,096	)			-				(718,096	)
BALANCE – March 31, 2023			-			$	-				4,330,959			$	434			$	33,538,113			$	(26,495,471	)		$	(628,763	)		$	6,414,313
BALANCE – December 31, 2023			-			$	-				4,435,132			$	444			$	34,559,091			$	(30,777,872	)		$	(113,546	)		$	3,668,117
Balance			-			$	-				4,435,132			$	444			$	34,559,091			$	(30,777,872	)		$	(113,546	)		$	3,668,117
Foreign currency translation gain			-				-				-				-				-				-				192				192
Unrealized gain on marketable securities			-				-				-				-				-				-				26,587				26,587
Stock compensation - stock options			-				-				-				-				161,861				-				-				161,861
Net loss			-				-				-				-				-				(1,724,294	)			-				(1,724,294	)
BALANCE -March 31, 2024			-			$	-				4,435,132			$	444			$	34,720,952			$	(32,502,166	)		$	(86,767	)		$	2,132,463
Balance			-			$	-				4,435,132			$	444			$	34,720,952			$	(32,502,166	)		$	(86,767	)		$	2,132,463

 

See accompanying notes to the unaudited consolidated financial statements

 

 

PROTAGENIC THERAPEUTICS, INC., AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

		2024				2023
		For the three months ended March 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		$	(1,724,294	)		$	(718,096	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense			12,572				90
Stock-based compensation			161,861				166,707
Realized (gain) loss on sale of marketable securities			(198	)			4,432
Amortization of debt discount			-				24,901
Changes in operating assets and liabilities
Prepaid expenses			100,031				42,920
Accounts payable and accrued expenses			(209,157	)			107,212
NET CASH USED IN OPERATING ACTIVITIES			(1,659,185	)			(371,834	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of marketable securities			1,500,000				294,669
Purchase of marketable securities			(297,120	)			-
NET CASH PROVIDED BY INVESTING ACTIVITIES			1,202,880				294,669
Effect of exchange rate changes on cash			190				467
NET CHANGE IN CASH			(456,115	)			(76,698	)
CASH, BEGINNING OF THE PERIOD			1,287,893				215,189
CASH, END OF THE PERIOD		$	831,778			$	138,491
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest expense		$	-			$	-
Cash paid for income taxes		$	-			$	-
NONCASH FINANCING AND INVESTING TRANSACTIONS
Unrealized gain on marketable securities		$	26,587			$	47,677

 

See accompanying notes to the unaudited consolidated financial statements

 

 

PROTAGENIC THERAPEUTICS, INC. & SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(UNAUDITED)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Company Background

 

Protagenic Therapeutics, Inc. (“we,” “our,” “Protagenic” or “the Company”), formerly known as Atrinsic, Inc., is a Delaware corporation with one subsidiary named Protagenic Therapeutics Canada (2006) Inc. (“PTI Canada”), a corporation formed in 2006 under the laws of the Province of Ontario, Canada.

 

We are a biopharmaceutical company specializing in the discovery and development of therapeutics to treat stress-related neuropsychiatric and mood disorders.

 

NOTE 2 – LIQUIDITY AND GOING CONCERN

 

As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses resulting in an accumulated deficit. The Company anticipates further losses in the development of its business. The Company also had negative cash flows used in operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Based on its cash resources and positive working capital as of March 31, 2024, the Company does not have sufficient resources to fund its operations past end of the third quarter of 2024. The positive working capital as of March 31, 2024 was due to funds raised by the Company from its equity offering during the year ended December 31, 2021. Absent generation of sufficient revenue from the execution of the Company’s business plan, the Company will need to obtain debt or equity financing by the third quarter of 2024. Because the Company has insufficient resources on hand to fund operations through the next twelve months from the date these consolidated financial statements are available to be issued, the Company believes that there is substantial doubt in its ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2023 and 2022. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

 

The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2023, which contain the audited financial statements and notes thereto, for the years ended December 31, 2023 and 2022 included within the Company’s Form 10-K filed with the SEC on April 1, 2024. The interim results for the period ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.

 

Principles of consolidation

 

The consolidated financial statements include the accounts of Protagenic Therapeutics, Inc., and its wholly owned Canadian subsidiary, PTI Canada. All significant intercompany balances and transactions have been eliminated.

 

7

 

 

Use of estimates

 

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the consolidated financial statements include valuation of stock options and warrants and assessment of deferred tax asset valuation allowance.

 

Concentrations of Credit Risk

 

The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits. As of March 31, 2024, the Company has bank balances that exceed the federally insured limits. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

 

Funds held in the Company’s marketable securities are not insured.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2024 and December 31, 2023 the Company did not have any cash equivalents.

 

Marketable Securities

 

The Company accounts for marketable debt securities, the only type of securities it owns, in accordance with the FASB Accounting Standards Codification 320, Investments – Debt and Equity Securities (“ASC 320”).

 

Pursuant to ASC 320-10-35-1, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.

 

During the three months ended March 31, 2024 the Company purchased $297,120 and sold $1,500,000 in marketable securities with a realized gain of $198 and an unrealized gain of $26,587. As of March 31, 2024 and December 31, 2023, the Company owned marketable securities with a total fair value of $1,592,025 and $2,768,119, respectively.

 

Equipment

 

Equipment is stated at cost less accumulated depreciation. Cost includes expenditures for computer equipment and lab equipment. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of equipment is depreciated using the straight-line method over the estimated useful lives of the related assets which is three years. Depreciation expense was $12,572 and $90 for the three months ended March 31, 2024 and 2023, respectively.

 

Fair Value Measurements

 

ASC 820, “Fair Value Measurements and Disclosure,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

 

8

 

 

The three levels are described below:

 

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company;

 

Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;

 

Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair value because of the short term maturity of those instruments.

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

 

The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of March 31, 2024.

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC 

		Carrying				Fair Value Measurement Using
		Value				Level 1				Level 2				Level 3				Total
Marketable securities		$	1,592,025			$	1,592,025			$	—			$	—			$	1,592,025

 

The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2023.

 

		Carrying				Fair Value Measurement Using
		Value				Level 1				Level 2				Level 3				Total
Marketable securities		$	2,768,119			$	2,768,119			$	—			$	—			$	2,768,119

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation costs under the provisions of ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, non-employees, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.

 

If any award granted under the Company’s 2016 Equity Compensation Plan (the “2016 Plan”) payable in shares of common stock is forfeited, cancelled, or returned for failure to satisfy vesting requirements, otherwise terminates without payment being made, or if shares of common stock are withheld to cover withholding taxes on options or other awards, the number of shares of common stock as to which such option or award was forfeited, or which were withheld, will be available for future grants under the 2016 Plan. The Company recognizes the impact of forfeitures when they occur.

 

9

 

 

Basic and Diluted Net (Loss) per Common Share

 

Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the consolidated statements of operations and comprehensive loss.

 SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

		Potentially Outstanding Dilutive Common Shares
		For the Three Months Ended March 31, 2024				For the Three Months Ended March 31, 2023
Conversion Feature Shares
Stock Options			1,959,741				1,357,466
Warrants			942,566				1,055,066
Convertible Notes			-				86,000
Total potentially outstanding dilutive common shares			2,902,307				2,498,532

 

Research and Development

 

Research and development expenses are charged to operations as incurred.

 

Foreign Currency Translation

 

The Company follows ASC 830, Foreign Currency Matters (“ASC 830”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. ASC 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to ASC 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.

 

The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of operations and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of operations and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the consolidated statements of operations and comprehensive loss.

 

Based on an assessment of the factors discussed above, the management of the Company determined its subsidiary’s local currency (i.e. the Canadian dollar) to be the functional currency for its foreign subsidiary.

 

10

 

 

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The adoption of this ASU did not have a material effect on the Company’s financial statements.

 

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company is continuing to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial statements.

 

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following at:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES 

		March 31, 2024				December 31, 2023
Accounting		$	57,350			$	36,750
Research and development			265,873				498,366
Legal			13,922				6,334
Other			108,950				113,802
Total		$	446,095			$	655,252

 

NOTE 5 - STOCKHOLDERS’ EQUITY

 

Common Stock

 

During the three months ended March 31, 2023, the Company issued 9,644 shares of common stock for rounding of shares related to the Reverse Split.

 

Stock-Based Compensation

 

The Company adopted an Employee, Director and Consultant Stock Plan on June 17, 2016 (the “2016 Plan”). Pursuant to the 2016 Plan, the Company’s Compensation Committee may grant awards to any employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. Due to an annual “evergreen” provision in the 2016 Plan, the number of shares reserved for future grants was increased by 196,857, 186,594 and 184,260 in 2024, 2023 and 2022, respectively. As a result of these increases, as of March 31, 2024 and December 31, 2023, the aggregate number of shares of common stock available for awards under the 2016 Plan was 873,763   shares and 1,279,181 shares, respectively. Options issued under the 2016 Plan are exercisable for up to ten years from the date of issuance.

 

There were 1,959,741 options outstanding as of March 31, 2024. During the three months ended March 31, 2024, the Company issued 742,150 options.

 

There were 1,357,466 options outstanding as of December 31, 2023.

 

The fair value of each stock option granted during the three months ended March 31, 2024 was estimated using the Black-Scholes assumptions and or factors as follows:

SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS

Exercise price		$	0.84-$5.00
Expected dividend yield			0	%
Risk free interest rate			4.01%-4.25	%
Expected life in years			10
Expected volatility			213-215	%

 

11

 

 

The following is an analysis of the stock option grant activity under the Plan:

 SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY

		Number				Weighted Average Exercise Price				Weighted Average Remaining Life
Stock Options
Outstanding December 31, 2023			1,357,466			$	7.39				4.49
Granted			742,150				1.73				9.98
Expired			(139,875	)			5.94				-
Exercised			-				-				-
Outstanding March 31, 2024			1,959,741			$	5.35				6.50

 

A summary of the status of the Company’s nonvested options as of March 31, 2024, and changes during the three months ended March 31, 2024,   is presented below:

SCHEDULE OF SHARE-BASED COMPENSATION NONVESTED SHARES 

Nonvested Options		Options				Weighted-Average Exercise Price
Nonvested at December 31, 2023			49,832			$	14.72
Granted			742,150				1.73
Vested			(16,961	)			11.27
Forfeited			-				-
Nonvested at March 31, 2024			775,021			$	2.36

 

As of March 31, 2024, the Company had 1,959,741 shares issuable under options outstanding at a weighted average exercise price of $5.35 and an intrinsic value of $26,053.

 

The Company recognized compensation expense related to options issued of $161,861 and $166,707 for the three months ended March 31, 2024 and 2023, respectively, in which $52,360 and $51,526 is included in general and administrative expenses and $109,501 and $115,181 in research and development expenses, respectively. For the three months ended March 31, 2024 and 2023, $637 and $1,713 of the stock compensation was related to employees and $161,224 and   $164,994 was related to non-employees, respectively.

 

As of March 31, 2024, the unamortized stock option expense was $1,777,138 with $727,677 being related to employees and $1,049,461   being related to non-employees. As of March 31, 2024, the weighted average remaining vesting period for the unamortized stock compensation to be recognized is 2.86 years.

 

On January 8, 2024, the Company issued 20,750 options to purchase the Company’s common stock to consultants and an employee. These options have an exercise price of $0.84 and expire in 10 years from issuance. These options vest over 48 months.

 

On February 12, 2024, the Company entered into a consulting agreement. As part of this agreement the Company agrees to pay $5,000 per month and issue 4,400 options to purchase the Company’s common stock. These options have an exercise price of $5.00 and expire in 10 years from issuance. These options vest over three months.

 

On March 25, 2024, the Company issued 717,000 options to purchase the Company’s common stock to officers, board of directors and consultants. These options have an exercise price of $1.74 and expire in 10 years from issuance. These options vest between 24 and 48 months with 160,000 options to vest upon achievement of certain performance conditions.

 

12

 

 

Warrants:

 

A summary of warrant issuances are as follows:

 SUMMARY OF WARRANT

		Number				Weighted Average Exercise Price				Weighted Average Remaining Life
Warrants
Outstanding December 31, 2023			942,566			$	19.47				2.31
Granted			-				-				-
Expired			-				-				-
Exercised			-				-				-
Outstanding March 31, 2024			942,566			$	19.47				2.06

 

As of March 31, 2024, the Company had 942,566 shares issuable under warrants outstanding at a weighted average exercise price of $19.47 and an intrinsic value of $0.

 

The Company recognized compensation expense related to warrants issued of $0 and $0 during the three ended March 31, 2024 and 2023, respectively.

 

NOTE 6 - COLLABORATIVE AGREEMENTS

 

The Company and the University of Toronto (the “University”) entered into an agreement effective April 1, 2014 (the “New Research Agreement”) for the performance of a research project titled “Teneurin C-terminal Associated Peptide (“TCAP”) mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism” (the “New Project”). The New Project is to perform research related to work done by Dr. David A. Lovejoy, a professor at the University and stockholder of the Company, in regard to TCAP mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism. In addition to the New Research Agreement, Dr. Lovejoy entered into an agreement with the University in order to commercialize certain technologies. The New Research Agreement expired on March 30, 2016. In February 2017, the New Research Agreement was extended to December 31, 2017. The extension allowed for further development of the technologies and use of their applications. On April 10, 2018, the agreement was amended and the research agreement has been further extended to March 31, 2024. As of the dated of this filing, this agreement has not been extended.

 

The sponsorship research and development expenses pertaining to the Research Agreements were $0 and $0 for the three months ended March 31, 2024 and 2023, respectively.

 

13

 

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Licensing Agreements

 

On July 31, 2005, the Company had entered into a Technology License Agreement (“License Agreement”) with the University pursuant to which the University agreed to license to the Company patent rights and other intellectual property, among other things (the “Technologies”). The Technology License Agreement was amended on February 18, 2015 and currently does not provide for an expiration date.

 

Pursuant to the License Agreement and its amendment, the Company obtained an exclusive worldwide license to make, have made, use, sell and import products based upon the Technologies, or to sublicense the Technologies in accordance with the terms of the License Agreement and amendment. In consideration, the Company agreed to pay to the University a royalty payment of 2.5% of net sales of any product based on the Technologies. If the Company elects to sublicense any rights under the License Agreement and amendment, the Company agrees to pay to the University 10% of any up-front sub-license fees for any sub-licenses that occurred on or after September 9, 2006, and, on behalf of the sub-licensee, 2.5% of net sales by the sub-licensee of all products based on the Technologies. The Company had no sales revenue for the three months ended March 31, 2024 and 2023 and therefore was not subject to paying any royalties.

 

In the event the Company fails to provide the University with semi-annual reports on the progress or fails to continue to make reasonable commercial efforts towards obtaining regulatory approval for products based on the Technologies, the University may convert our exclusive license into a non-exclusive arrangement. Interest on any amounts owed under the License Agreement and amendment will be at 3% per annum. All intellectual property rights resulting from the Technologies or improvements thereon will remain the property of the other inventors and/or Dr. Lovejoy, and/or the University, as the case may be. The Company has agreed to pay all out-of-pocket filing, prosecution and maintenance expenses in connection with any patents relating to the Technologies. In the case of infringement upon any patents relating to the Technologies, the Company may elect, at its own expense, to bring a cause of action asserting such infringement. In such a case, after deducting any legal expenses the Company may incur, any settlement proceeds will be subject to the 2.5% royalty payment owed to the University under the License Agreement and amendment.

 

The patent applications were made in the name of Dr. Lovejoy and other inventors, but the Company’s exclusive, worldwide rights to such patent applications are included in the License Agreement and its amendment with the University. The Company maintains exclusive licensing agreements and it currently controls the five intellectual patent properties.

 

Legal Proceedings

 

From time to time we may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business and financial condition.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

The Company is provided free office space consisting of a conference room by the Company Executive Chairman, Dr. Armen. The Company does not pay any rent for the use of this space. This space is used for quarterly board meetings and our annual shareholder meeting.

 

During the year ended December 31, 2021, the Company engaged Agenus Inc., a related party, to perform research and development services. Agenus Inc. is a related party due to the Company’s Director and Chairman of the Board being the CEO and Chairman of the Board for Agenus Inc. The Company incurred $0 and $0   in expenses related to these services during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, the outstanding balance owed to Agenus Inc. is $0 and $150,296, respectively.

 

During the year ended December 31, 2022, the Company engaged CTC North, GmbH (“CTC”) to perform research and development services. CTC is a related party due to the Company’s Director and Chairman of the Board being the CEO and Chairman of the Board for Agenus Inc, CTC’s parent company. The total commitment for this agreement is $1.3 million. The Company incurred $0 and $91,544 in expenses related to these services during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, there is $80,409 and $80,409 owed to CTC in connection with this agreement, respectively.

 

 

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

 

Forward-Looking Statements

 

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “identify” or other similar words or the negatives thereof. These may include our financial estimates and their underlying assumptions, statements about plans, objectives, intentions and expectations. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our prospectus and our Annual Report on form 10-K for the year ended December 31, 2023, and any such updated factors included in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or our prospectus and other filings). Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You can identify these forward-looking statements by the fact they use words such as “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will,” “potential,” “opportunity,” “future” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements relate to, among other things, our business strategy, our research and development, our product development efforts, our ability to commercialize our product candidates, the activities of our licensees, our prospects for initiating partnerships or collaborations, the timing of the introduction of products, the effect of new accounting pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds as well as our plans, objectives, expectations, and intentions.

 

We have included more detailed descriptions of these risks and uncertainties and other risks and uncertainties applicable to our business that we believe could cause actual results to differ materially from any forward-looking statements in Part II-Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q. We encourage you to read those descriptions carefully. Although we believe we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved. We caution investors not to place significant reliance on forward-looking statements contained in this document; such statements need to be evaluated in light of all the information contained in this document. Furthermore, the statements speak only as of the date of this document, and we undertake no obligation to update or revise these statements.

 

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail below. We base these estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

We expect to continue to incur significant expenses and minimal positive net cash flows from operations or negative net cash flows from operations for the foreseeable future, and those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year. We anticipate that our expenses will fluctuate substantially as we:

 

	●	continue our ongoing preclinical studies, clinical trials and our product development activities for our pipeline of product candidates;
	●	seek regulatory approvals for any product candidates that successfully complete clinical trials;
	●	continue research and preclinical development and initiate clinical trials of our other product candidates;
	●	seek to discover and develop additional product candidates either internally or in partnership with other pharmaceutical companies;
	●	adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
	●	maintain, expand and protect our intellectual property portfolio; and
	●	incur additional legal, accounting and other expenses in operating as a public company.

 

 

Overview

 

Our proprietary, patent-protected, first-in-class lead compound, PT00114, is a synthetic form of Teneurin Carboxy-terminal Associated Peptide (“TCAP”), an endogenous brain signaling peptide that can dampen overactive stress responses. Our preclinical models have demonstrated efficacy of PT00114 in animal models of depression, anxiety, substance abuse & addiction, and PTSD.

 

PT00114 leverages a completely novel mechanism of action. Protagenic owns exclusive, worldwide rights to PT00114 through its license agreement with the University of Toronto and has an exclusive right to license additional intellectual property generated by Dr. David Lovejoy’s lab at University of Toronto. Additionally, the company is engaged in the research & development of follow-on compounds in the TCAP family. Extensive publications in peer-reviewed scientific journals underline the central role stress plays in the onset and proliferation of neuropsychiatric disorders like depression, anxiety, substance abuse & addiction, and PTSD. The mechanism of action of TCAP suggests that it counterbalances stress overdrive at the cellular level within the brain’s stress response cascade. TCAP works to alleviate the harmful behavioral, biochemical, and physiological effects of these disorders, while simultaneously restoring brain health. This mechanism has been corroborated in preclinical animal models of the psychiatric disorders listed above. Preclinical experiments required for IND filing have been completed. The Company is in the process of answering regulatory questions in the US and Germany.

 

On September 26, 2023, we announced the commencement of the Phase I/IIa clinical trial for PT00114. The trial aims to evaluate the therapeutic potential of PT00114 in treating an array of neuro-psychiatric conditions, including depression, anxiety, and PTSD. Phase I will recruit 56 subjects, randomized to undergo subcutaneous injections of either PT00114 or a placebo. The Phase I/IIa study will assess both healthy volunteers and patients diagnosed with Treatment-Resistant Depression, PTSD, and Generalized Anxiety Disorder. Besides monitoring disease status, the trial will gauge disease response by measuring biomarkers, such as circulating cortisol levels before and after treatment.

 

Results of Operations

 

We are a development stage company currently performing clinical trials to obtain Food and Drug Administration (“FDA”) approval and commercialization of our product.

 

During the three months ended March 31, 2024, we incurred a loss from operations of $1,738,359 as compared to $739,294   for the three months ended March 31, 2023. The increase in the loss is from an increase in research and development expense of $1,112,715 from $348,031 for the three months ended March 31, 2023   to $1,460,746 for the three months ended March 31, 2024 offset by a decrease in general and administrative expenses of $113,650 from $391,263 for the three months ended March 31, 2023 to $277,613 for the three months ended March 31, 2024.

 

Liquidity and Going Concern

 

We continually project anticipated cash requirements, predominantly from the ongoing funding requirements of our neuropeptide drug development program. The majority of these costs relate to paying external vendors such as Contract Research Organizations, peptide synthesizer companies, and new drug development. As of March 31, 2024, we had cash of $831,778 and working capital of $2,021,702. We anticipate further losses from the development of our business. Based on its cash resources as of March 31, 2024, the Company does not have sufficient resources to fund its operations past the end of the third quarter of 2024. Absent generation of sufficient revenue from the execution of the Company’s business plan, the Company will need to obtain debt or equity financing by the third quarter of 2024. Because of these factors, the Company believes that there is substantial doubt in the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

Operating activities used $1,659,185 and $371,834 in cash for the three months ended March 31, 2024 and 2023, respectively. The use of cash in operating activities during the three months ended March 31, 2024, primarily comprised of $1,724,294 net loss, $161,861 in stock compensation expense, a decrease in prepaid expenses of $100,031, and a $209,157 decrease of accounts payable and accrued expenses, which included payments to legal and accounting professionals, payments to consultants, and other administrative expenses.

 

Investing activities provided $1,202,880 and $294,669 in cash during the three months ended March 31, 2024 and 2023, respectively. The cash provided by investing activities was from $1,500,000 sale of marketable securities, offset by $297,120 used in the purchase of marketable securities the three months ended March 31, 2024.

 

There was no cash used in or provided by financing activities for the three months ended March 31, 2024 and 2023.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act), as of March 30, 2024. Based on this evaluation, we have identified material weaknesses in our internal control over financial reporting. Due to material weaknesses, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act, including this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Material Weakness in Internal Control Over Financial Reporting

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weaknesses we identified are described below:

 

	1)	We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
	2)	Limited level of multiple reviews among those tasked with preparing the financial statements.

 

 

These material weaknesses could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

 

Remediation Plan

 

To address the material weakness described above the Company has engaged an independent third party to enhance our segregation of duties.

 

Since we remain a small Company, with limited segregation of duties, the third party has identified certain areas where we can layer in added controls and procedures. Management intends to implement such controls and procedures in the future.

 

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met. The design of any system of controls is also based in part on certain assumptions regarding the likelihood of certain events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Given these and other inherent limitations of control systems, these are only reasonable assurances that our controls will succeed in achieving their stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

Other than as discussed above, there were no changes in our internal controls over financial reporting that occurred during the quarter covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Part II: Other Information

 

Item 1. Legal Proceedings

 

From time to time we may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business and financial condition.

 

Item 1A. Risk Factors

 

Our business is subject to substantial risks and uncertainties. Investing in our securities involves a high degree of risk. You should carefully consider the risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024, together with the information contained elsewhere in this report, including Part I, Item 1 “Financial Statements” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other SEC filings in evaluating our business. These risks and uncertainties could materially and adversely affect our business, financial condition, results of operations, prospects for growth, and the value of an investment in our securities.

 

There were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024.

 

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults upon Senior Securities

 

None.

 

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

 

Exhibit		Description
31.1		Chief Executive Officer Certification as required under section 302 of the Sarbanes Oxley Act (€)
31.2		Chief Financial Officer Certification as required under section 302 of the Sarbanes Oxley Act (€)
32.1		Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act *
101.INS		Inline XBRL Instance Document (€)
101.CAL		Inline XBRL Taxonomy Extension Schema Document (€)
101.SCH		Inline XBRL Taxonomy Extension Calculation Linkbase Document (€)
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document (€)
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document (€)
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document (€)
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

(€) - Filed herewith.

(*) -Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

May 15, 2024	Protagenic Therapeutics, Inc.
	By:	/s/ Alexander K. Arrow
		Chief Financial Officer

 

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

I, Garo H. Armen, PhD, certify that:

 

	1.	I have reviewed this quarterly report on Form 10-Q of Protagenic Therapeutics, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 15, 2024		/s/ Garo H. Armen
	Name:	Garo H. Armen, Ph.D.
	Title:	Executive Chairman

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

I, Alexander K. Arrow, MD, certify that:

 

	1.	I have reviewed this quarterly report on Form 10-Q of Protagenic Therapeutics, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 15, 2024		/s/ Alexander K. Arrow
	Name:	Alexander K. Arrow, MD
	Title:	Chief Financial Officer

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Protagenic Therapeutics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Garo H. Armen, Executive Chairman, and Alexander K. Arrow, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that:

 

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

May 15, 2024	By:	/s/ Garo H. Armen
		Garo H. Armen, PhD
		Executive Chairman
		(Principal Executive Officer)

 

May 15, 2024	By:	/s/ Alexander K. Arrow
		Alexander K. Arrow, MD, CFA
		Chief Financial Officer
		(Principal Financial Officer)

 

 

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Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-12555
Entity Registrant Name	Protagenic Therapeutics, Inc.new
Entity Central Index Key	0001022899
Entity Tax Identification Number	06-1390025
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	149 Fifth Avenue
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10010
City Area Code	(212)
Local Phone Number	994-8200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,435,132
Common Stock [Member]
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	PTIX
Security Exchange Name	NASDAQ
Common Stock Purchase Warrant [Member]
Title of 12(b) Security	Common Stock Purchase Warrant
Trading Symbol	PTIXW
Security Exchange Name	NASDAQ

v3.24.1.1.u2

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
CURRENT ASSETS
Cash	$ 831,778	$ 1,287,893
Marketable securities	1,592,025	2,768,119
Prepaid expenses	43,994	144,025
TOTAL CURRENT ASSETS	2,467,797	4,200,037
Equipment - net	110,761	123,332
TOTAL ASSETS	2,578,558	4,323,369
CURRENT LIABILITIES
TOTAL CURRENT LIABILITIES	446,095	655,252
TOTAL LIABILITIES	446,095	655,252
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value, 100,000,000 shares authorized, 4,435,132 and 4,435,132 shares issued and outstanding at March 31, 2024, and December 31, 2023	444	444
Additional paid-in-capital	34,720,952	34,559,091
Accumulated deficit	(32,502,166)	(30,777,872)
Accumulated other comprehensive loss	(86,767)	(113,546)
TOTAL STOCKHOLDERS’ EQUITY	2,132,463	3,668,117
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	2,578,558	4,323,369
Preferred Stock [Member]
STOCKHOLDERS’ EQUITY
Preferred stock, value
Series B Convertible Preferred Stock [Member]
STOCKHOLDERS’ EQUITY
Preferred stock, value
Nonrelated Party [Member]
CURRENT LIABILITIES
Accounts payable and accrued expenses	365,686	439,757
Related Party [Member]
CURRENT LIABILITIES
Accounts payable and accrued expenses	$ 80,409	$ 215,495

v3.24.1.1.u2

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	4,435,132	4,435,132
Common stock, shares outstanding	4,435,132	4,435,132
Series B Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	18,000,000	18,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred Stock [Member]
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

v3.24.1.1.u2

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
OPERATING AND ADMINISTRATIVE EXPENSES
Research and development	$ 1,460,746	$ 348,031
General and administrative	277,613	391,263
TOTAL OPERATING AND ADMINISTRATIVE EXPENSES	1,738,359	739,294
LOSS FROM OPERATIONS	(1,738,359)	(739,294)
OTHER INCOME
Interest income	13,867	56,893
Interest expense		(31,263)
Realized gain (loss) on marketable securities	198	(4,432)
TOTAL OTHER INCOME	14,065	21,198
LOSS BEFORE TAX	(1,724,294)	(718,096)
INCOME TAX EXPENSE
NET LOSS	(1,724,294)	(718,096)
Other Comprehensive Loss - net of tax
Net unrealized gain on marketable securities	26,587	47,677
Foreign exchange translation income	192	467
TOTAL COMPREHENSIVE LOSS	$ (1,697,515)	$ (669,952)
Net loss per common share - Basic	$ (0.39)	$ (0.17)
Net loss per common share - Diluted	$ (0.39)	$ (0.17)
Weighted average common shares - Basic	4,435,132	4,317,875
Weighted average common shares - Diluted	4,435,132	4,317,875

v3.24.1.1.u2

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Series B Convertible Preferred Stock [Member] Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2022		$ 434	$ 33,371,406	$ (25,777,375)	$ (676,907)	$ 6,917,558
Balance, shares at Dec. 31, 2022		4,321,315
Foreign currency translation gain					467	467
Unrealized gain on marketable securities					47,677	47,677
Stock compensation - stock options			166,707			166,707
Rounding from reverse split
Rounding from reverse split, shares		9,644
Net loss				(718,096)		(718,096)
Balance at Mar. 31, 2023		$ 434	33,538,113	(26,495,471)	(628,763)	6,414,313
Balance, shares at Mar. 31, 2023		4,330,959
Balance at Dec. 31, 2023		$ 444	34,559,091	(30,777,872)	(113,546)	3,668,117
Balance, shares at Dec. 31, 2023		4,435,132
Foreign currency translation gain					192	192
Unrealized gain on marketable securities					26,587	26,587
Stock compensation - stock options			161,861			161,861
Rounding from reverse split, shares		9,644
Net loss				(1,724,294)		(1,724,294)
Balance at Mar. 31, 2024		$ 444	$ 34,720,952	$ (32,502,166)	$ (86,767)	$ 2,132,463
Balance, shares at Mar. 31, 2024		4,435,132

v3.24.1.1.u2

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (1,724,294)	$ (718,096)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense	12,572	90
Stock-based compensation	161,861	166,707
Realized (gain) loss on sale of marketable securities	(198)	4,432
Amortization of debt discount		24,901
Changes in operating assets and liabilities
Prepaid expenses	100,031	42,920
Accounts payable and accrued expenses	(209,157)	107,212
NET CASH USED IN OPERATING ACTIVITIES	(1,659,185)	(371,834)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of marketable securities	1,500,000	294,669
Purchase of marketable securities	(297,120)
NET CASH PROVIDED BY INVESTING ACTIVITIES	1,202,880	294,669
Effect of exchange rate changes on cash	190	467
NET CHANGE IN CASH	(456,115)	(76,698)
CASH, BEGINNING OF THE PERIOD	1,287,893	215,189
CASH, END OF THE PERIOD	831,778	138,491
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest expense
Cash paid for income taxes
NONCASH FINANCING AND INVESTING TRANSACTIONS
Unrealized gain on marketable securities	$ 26,587	$ 47,677

v3.24.1.1.u2

ORGANIZATION AND NATURE OF BUSINESS	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS   Company Background   Protagenic Therapeutics, Inc. (“we,” “our,” “Protagenic” or “the Company”), formerly known as Atrinsic, Inc., is a Delaware corporation with one subsidiary named Protagenic Therapeutics Canada (2006) Inc. (“PTI Canada”), a corporation formed in 2006 under the laws of the Province of Ontario, Canada.   We are a biopharmaceutical company specializing in the discovery and development of therapeutics to treat stress-related neuropsychiatric and mood disorders.

v3.24.1.1.u2

LIQUIDITY AND GOING CONCERN	3 Months Ended
	Mar. 31, 2024
Liquidity And Going Concern
LIQUIDITY AND GOING CONCERN	NOTE 2 – LIQUIDITY AND GOING CONCERN   As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses resulting in an accumulated deficit. The Company anticipates further losses in the development of its business. The Company also had negative cash flows used in operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.   Based on its cash resources and positive working capital as of March 31, 2024, the Company does not have sufficient resources to fund its operations past end of the third quarter of 2024. The positive working capital as of March 31, 2024 was due to funds raised by the Company from its equity offering during the year ended December 31, 2021. Absent generation of sufficient revenue from the execution of the Company’s business plan, the Company will need to obtain debt or equity financing by the third quarter of 2024. Because the Company has insufficient resources on hand to fund operations through the next twelve months from the date these consolidated financial statements are available to be issued, the Company believes that there is substantial doubt in its ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Basis of presentation   The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2023 and 2022. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).   The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2023, which contain the audited financial statements and notes thereto, for the years ended December 31, 2023 and 2022 included within the Company’s Form 10-K filed with the SEC on April 1, 2024. The interim results for the period ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.   Principles of consolidation   The consolidated financial statements include the accounts of Protagenic Therapeutics, Inc., and its wholly owned Canadian subsidiary, PTI Canada. All significant intercompany balances and transactions have been eliminated.     Use of estimates   The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the consolidated financial statements include valuation of stock options and warrants and assessment of deferred tax asset valuation allowance.   Concentrations of Credit Risk   The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits. As of March 31, 2024, the Company has bank balances that exceed the federally insured limits. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.   Funds held in the Company’s marketable securities are not insured.   Cash and Cash Equivalents   The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2024 and December 31, 2023 the Company did not have any cash equivalents.   Marketable Securities   The Company accounts for marketable debt securities, the only type of securities it owns, in accordance with the FASB Accounting Standards Codification 320, Investments – Debt and Equity Securities (“ASC 320”).   Pursuant to ASC 320-10-35-1, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.   During the three months ended March 31, 2024 the Company purchased $297,120 and sold $1,500,000 in marketable securities with a realized gain of $198 and an unrealized gain of $26,587. As of March 31, 2024 and December 31, 2023, the Company owned marketable securities with a total fair value of $1,592,025 and $2,768,119, respectively.   Equipment   Equipment is stated at cost less accumulated depreciation. Cost includes expenditures for computer equipment and lab equipment. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of equipment is depreciated using the straight-line method over the estimated useful lives of the related assets which is three years. Depreciation expense was $12,572 and $90 for the three months ended March 31, 2024 and 2023, respectively.   Fair Value Measurements   ASC 820, “Fair Value Measurements and Disclosure,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).     The three levels are described below:   Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company;   Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;   Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.   The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair value because of the short term maturity of those instruments.   Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.   The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of March 31, 2024. SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC      Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 1,592,025     $ 1,592,025     $ —     $ —     $ 1,592,025     The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2023.       Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 2,768,119     $ 2,768,119     $ —     $ —     $ 2,768,119     Stock-Based Compensation   The Company accounts for stock-based compensation costs under the provisions of ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, non-employees, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.   If any award granted under the Company’s 2016 Equity Compensation Plan (the “2016 Plan”) payable in shares of common stock is forfeited, cancelled, or returned for failure to satisfy vesting requirements, otherwise terminates without payment being made, or if shares of common stock are withheld to cover withholding taxes on options or other awards, the number of shares of common stock as to which such option or award was forfeited, or which were withheld, will be available for future grants under the 2016 Plan. The Company recognizes the impact of forfeitures when they occur.     Basic and Diluted Net (Loss) per Common Share   Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the consolidated statements of operations and comprehensive loss.  SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE     Potentially Outstanding Dilutive Common Shares       For the Three Months Ended March 31, 2024     For the Three Months Ended March 31, 2023                 Conversion Feature Shares                                   Stock Options     1,959,741       1,357,466                     Warrants     942,566       1,055,066                     Convertible Notes     -       86,000                     Total potentially outstanding dilutive common shares     2,902,307       2,498,532     Research and Development   Research and development expenses are charged to operations as incurred.   Foreign Currency Translation   The Company follows ASC 830, Foreign Currency Matters (“ASC 830”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. ASC 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to ASC 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.   The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of operations and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of operations and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the consolidated statements of operations and comprehensive loss.   Based on an assessment of the factors discussed above, the management of the Company determined its subsidiary’s local currency (i.e. the Canadian dollar) to be the functional currency for its foreign subsidiary.     Recent Accounting Pronouncements   In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The adoption of this ASU did not have a material effect on the Company’s financial statements.   In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company is continuing to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial statements.

v3.24.1.1.u2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES   Accounts payable and accrued expenses consist of the following at: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES      March 31, 2024     December 31, 2023                 Accounting   $ 57,350     $ 36,750   Research and development     265,873       498,366   Legal     13,922       6,334   Other     108,950       113,802   Total   $ 446,095     $ 655,252

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 5 - STOCKHOLDERS’ EQUITY   Common Stock   During the three months ended March 31, 2023, the Company issued 9,644 shares of common stock for rounding of shares related to the Reverse Split.   Stock-Based Compensation   The Company adopted an Employee, Director and Consultant Stock Plan on June 17, 2016 (the “2016 Plan”). Pursuant to the 2016 Plan, the Company’s Compensation Committee may grant awards to any employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. Due to an annual “evergreen” provision in the 2016 Plan, the number of shares reserved for future grants was increased by 196,857, 186,594 and 184,260 in 2024, 2023 and 2022, respectively. As a result of these increases, as of March 31, 2024 and December 31, 2023, the aggregate number of shares of common stock available for awards under the 2016 Plan was 873,763   shares and 1,279,181 shares, respectively. Options issued under the 2016 Plan are exercisable for up to ten years from the date of issuance.   There were 1,959,741 options outstanding as of March 31, 2024. During the three months ended March 31, 2024, the Company issued 742,150 options.   There were 1,357,466 options outstanding as of December 31, 2023.   The fair value of each stock option granted during the three months ended March 31, 2024 was estimated using the Black-Scholes assumptions and or factors as follows: SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS Exercise price   $ 0.84-$5.00   Expected dividend yield     0 % Risk free interest rate     4.01%-4.25 % Expected life in years     10   Expected volatility     213-215 %     The following is an analysis of the stock option grant activity under the Plan:  SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY     Number     Weighted Average Exercise Price     Weighted Average Remaining Life   Stock Options                         Outstanding December 31, 2023     1,357,466     $ 7.39       4.49   Granted     742,150       1.73       9.98   Expired     (139,875 )     5.94       -   Exercised     -       -       -   Outstanding March 31, 2024     1,959,741     $ 5.35       6.50     A summary of the status of the Company’s nonvested options as of March 31, 2024, and changes during the three months ended March 31, 2024,   is presented below: SCHEDULE OF SHARE-BASED COMPENSATION NONVESTED SHARES  Nonvested Options   Options     Weighted-Average Exercise Price   Nonvested at December 31, 2023     49,832     $ 14.72   Granted     742,150       1.73   Vested     (16,961 )     11.27   Forfeited     -       -   Nonvested at March 31, 2024     775,021     $ 2.36     As of March 31, 2024, the Company had 1,959,741 shares issuable under options outstanding at a weighted average exercise price of $5.35 and an intrinsic value of $26,053.   The Company recognized compensation expense related to options issued of $161,861 and $166,707 for the three months ended March 31, 2024 and 2023, respectively, in which $52,360 and $51,526 is included in general and administrative expenses and $109,501 and $115,181 in research and development expenses, respectively. For the three months ended March 31, 2024 and 2023, $637 and $1,713 of the stock compensation was related to employees and $161,224 and   $164,994 was related to non-employees, respectively.   As of March 31, 2024, the unamortized stock option expense was $1,777,138 with $727,677 being related to employees and $1,049,461   being related to non-employees. As of March 31, 2024, the weighted average remaining vesting period for the unamortized stock compensation to be recognized is 2.86 years.   On January 8, 2024, the Company issued 20,750 options to purchase the Company’s common stock to consultants and an employee. These options have an exercise price of $0.84 and expire in 10 years from issuance. These options vest over 48 months.   On February 12, 2024, the Company entered into a consulting agreement. As part of this agreement the Company agrees to pay $5,000 per month and issue 4,400 options to purchase the Company’s common stock. These options have an exercise price of $5.00 and expire in 10 years from issuance. These options vest over three months.   On March 25, 2024, the Company issued 717,000 options to purchase the Company’s common stock to officers, board of directors and consultants. These options have an exercise price of $1.74 and expire in 10 years from issuance. These options vest between 24 and 48 months with 160,000 options to vest upon achievement of certain performance conditions.     Warrants:   A summary of warrant issuances are as follows:  SUMMARY OF WARRANT     Number     Weighted Average Exercise Price     Weighted Average Remaining Life   Warrants                                                   Outstanding December 31, 2023     942,566     $ 19.47       2.31   Granted     -       -       -   Expired     -       -       -   Exercised     -       -       -   Outstanding March 31, 2024     942,566     $ 19.47       2.06     As of March 31, 2024, the Company had 942,566 shares issuable under warrants outstanding at a weighted average exercise price of $19.47 and an intrinsic value of $0.   The Company recognized compensation expense related to warrants issued of $0 and $0 during the three ended March 31, 2024 and 2023, respectively.

v3.24.1.1.u2

COLLABORATIVE AGREEMENTS	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
COLLABORATIVE AGREEMENTS	NOTE 6 - COLLABORATIVE AGREEMENTS   The Company and the University of Toronto (the “University”) entered into an agreement effective April 1, 2014 (the “New Research Agreement”) for the performance of a research project titled “Teneurin C-terminal Associated Peptide (“TCAP”) mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism” (the “New Project”). The New Project is to perform research related to work done by Dr. David A. Lovejoy, a professor at the University and stockholder of the Company, in regard to TCAP mediated stress attenuation in vertebrates: Establishing the role of organismal and intracellular energy and glucose regulation and metabolism. In addition to the New Research Agreement, Dr. Lovejoy entered into an agreement with the University in order to commercialize certain technologies. The New Research Agreement expired on March 30, 2016. In February 2017, the New Research Agreement was extended to December 31, 2017. The extension allowed for further development of the technologies and use of their applications. On April 10, 2018, the agreement was amended and the research agreement has been further extended to March 31, 2024. As of the dated of this filing, this agreement has not been extended.   The sponsorship research and development expenses pertaining to the Research Agreements were $0 and $0 for the three months ended March 31, 2024 and 2023, respectively.

v3.24.1.1.u2

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7 - COMMITMENTS AND CONTINGENCIES   Licensing Agreements   On July 31, 2005, the Company had entered into a Technology License Agreement (“License Agreement”) with the University pursuant to which the University agreed to license to the Company patent rights and other intellectual property, among other things (the “Technologies”). The Technology License Agreement was amended on February 18, 2015 and currently does not provide for an expiration date.   Pursuant to the License Agreement and its amendment, the Company obtained an exclusive worldwide license to make, have made, use, sell and import products based upon the Technologies, or to sublicense the Technologies in accordance with the terms of the License Agreement and amendment. In consideration, the Company agreed to pay to the University a royalty payment of 2.5% of net sales of any product based on the Technologies. If the Company elects to sublicense any rights under the License Agreement and amendment, the Company agrees to pay to the University 10% of any up-front sub-license fees for any sub-licenses that occurred on or after September 9, 2006, and, on behalf of the sub-licensee, 2.5% of net sales by the sub-licensee of all products based on the Technologies. The Company had no sales revenue for the three months ended March 31, 2024 and 2023 and therefore was not subject to paying any royalties.   In the event the Company fails to provide the University with semi-annual reports on the progress or fails to continue to make reasonable commercial efforts towards obtaining regulatory approval for products based on the Technologies, the University may convert our exclusive license into a non-exclusive arrangement. Interest on any amounts owed under the License Agreement and amendment will be at 3% per annum. All intellectual property rights resulting from the Technologies or improvements thereon will remain the property of the other inventors and/or Dr. Lovejoy, and/or the University, as the case may be. The Company has agreed to pay all out-of-pocket filing, prosecution and maintenance expenses in connection with any patents relating to the Technologies. In the case of infringement upon any patents relating to the Technologies, the Company may elect, at its own expense, to bring a cause of action asserting such infringement. In such a case, after deducting any legal expenses the Company may incur, any settlement proceeds will be subject to the 2.5% royalty payment owed to the University under the License Agreement and amendment.   The patent applications were made in the name of Dr. Lovejoy and other inventors, but the Company’s exclusive, worldwide rights to such patent applications are included in the License Agreement and its amendment with the University. The Company maintains exclusive licensing agreements and it currently controls the five intellectual patent properties.   Legal Proceedings   From time to time we may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business and financial condition.

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8 – RELATED PARTY TRANSACTIONS   The Company is provided free office space consisting of a conference room by the Company Executive Chairman, Dr. Armen. The Company does not pay any rent for the use of this space. This space is used for quarterly board meetings and our annual shareholder meeting.   During the year ended December 31, 2021, the Company engaged Agenus Inc., a related party, to perform research and development services. Agenus Inc. is a related party due to the Company’s Director and Chairman of the Board being the CEO and Chairman of the Board for Agenus Inc. The Company incurred $0 and $0   in expenses related to these services during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, the outstanding balance owed to Agenus Inc. is $0 and $150,296, respectively.   During the year ended December 31, 2022, the Company engaged CTC North, GmbH (“CTC”) to perform research and development services. CTC is a related party due to the Company’s Director and Chairman of the Board being the CEO and Chairman of the Board for Agenus Inc, CTC’s parent company. The total commitment for this agreement is $1.3 million. The Company incurred $0 and $91,544 in expenses related to these services during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, there is $80,409 and $80,409 owed to CTC in connection with this agreement, respectively.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Principles of consolidation	Principles of consolidation   The consolidated financial statements include the accounts of Protagenic Therapeutics, Inc., and its wholly owned Canadian subsidiary, PTI Canada. All significant intercompany balances and transactions have been eliminated.
Use of estimates	Use of estimates   The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the consolidated financial statements include valuation of stock options and warrants and assessment of deferred tax asset valuation allowance.
Concentrations of Credit Risk	Concentrations of Credit Risk   The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits. As of March 31, 2024, the Company has bank balances that exceed the federally insured limits. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.   Funds held in the Company’s marketable securities are not insured.
Cash and Cash Equivalents	Cash and Cash Equivalents   The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2024 and December 31, 2023 the Company did not have any cash equivalents.
Marketable Securities	Marketable Securities   The Company accounts for marketable debt securities, the only type of securities it owns, in accordance with the FASB Accounting Standards Codification 320, Investments – Debt and Equity Securities (“ASC 320”).   Pursuant to ASC 320-10-35-1, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.   During the three months ended March 31, 2024 the Company purchased $297,120 and sold $1,500,000 in marketable securities with a realized gain of $198 and an unrealized gain of $26,587. As of March 31, 2024 and December 31, 2023, the Company owned marketable securities with a total fair value of $1,592,025 and $2,768,119, respectively.
Equipment	Equipment   Equipment is stated at cost less accumulated depreciation. Cost includes expenditures for computer equipment and lab equipment. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of equipment is depreciated using the straight-line method over the estimated useful lives of the related assets which is three years. Depreciation expense was $12,572 and $90 for the three months ended March 31, 2024 and 2023, respectively.
Fair Value Measurements	Fair Value Measurements   ASC 820, “Fair Value Measurements and Disclosure,” defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).     The three levels are described below:   Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company;   Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;   Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.   The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair value because of the short term maturity of those instruments.   Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.   The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of March 31, 2024. SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC      Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 1,592,025     $ 1,592,025     $ —     $ —     $ 1,592,025     The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2023.       Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 2,768,119     $ 2,768,119     $ —     $ —     $ 2,768,119
Stock-Based Compensation	Stock-Based Compensation   The Company accounts for stock-based compensation costs under the provisions of ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, non-employees, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.   If any award granted under the Company’s 2016 Equity Compensation Plan (the “2016 Plan”) payable in shares of common stock is forfeited, cancelled, or returned for failure to satisfy vesting requirements, otherwise terminates without payment being made, or if shares of common stock are withheld to cover withholding taxes on options or other awards, the number of shares of common stock as to which such option or award was forfeited, or which were withheld, will be available for future grants under the 2016 Plan. The Company recognizes the impact of forfeitures when they occur.
Basic and Diluted Net (Loss) per Common Share	Basic and Diluted Net (Loss) per Common Share   Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The effect of dilution on net loss becomes anti-dilutive and therefore is not reflected on the consolidated statements of operations and comprehensive loss.  SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE     Potentially Outstanding Dilutive Common Shares       For the Three Months Ended March 31, 2024     For the Three Months Ended March 31, 2023                 Conversion Feature Shares                                   Stock Options     1,959,741       1,357,466                     Warrants     942,566       1,055,066                     Convertible Notes     -       86,000                     Total potentially outstanding dilutive common shares     2,902,307       2,498,532
Research and Development	Research and Development   Research and development expenses are charged to operations as incurred.
Foreign Currency Translation	Foreign Currency Translation   The Company follows ASC 830, Foreign Currency Matters (“ASC 830”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. ASC 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to ASC 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.   The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of operations and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of operations and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the consolidated statements of operations and comprehensive loss.   Based on an assessment of the factors discussed above, the management of the Company determined its subsidiary’s local currency (i.e. the Canadian dollar) to be the functional currency for its foreign subsidiary.
Recent Accounting Pronouncements	Recent Accounting Pronouncements   In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The adoption of this ASU did not have a material effect on the Company’s financial statements.   In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company is continuing to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial statements.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC	The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of March 31, 2024. SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC      Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 1,592,025     $ 1,592,025     $ —     $ —     $ 1,592,025     The following table provides a summary of financial instruments that are measured at fair value on a recurring basis as of December 31, 2023.       Carrying     Fair Value Measurement Using       Value     Level 1     Level 2     Level 3     Total   Marketable securities   $ 2,768,119     $ 2,768,119     $ —     $ —     $ 2,768,119
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE	SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE     Potentially Outstanding Dilutive Common Shares       For the Three Months Ended March 31, 2024     For the Three Months Ended March 31, 2023                 Conversion Feature Shares                                   Stock Options     1,959,741       1,357,466                     Warrants     942,566       1,055,066                     Convertible Notes     -       86,000                     Total potentially outstanding dilutive common shares     2,902,307       2,498,532

v3.24.1.1.u2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	3 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES	Accounts payable and accrued expenses consist of the following at: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES      March 31, 2024     December 31, 2023                 Accounting   $ 57,350     $ 36,750   Research and development     265,873       498,366   Legal     13,922       6,334   Other     108,950       113,802   Total   $ 446,095     $ 655,252

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Tables)	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS	SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS Exercise price   $ 0.84-$5.00   Expected dividend yield     0 % Risk free interest rate     4.01%-4.25 % Expected life in years     10   Expected volatility     213-215 %
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY	The following is an analysis of the stock option grant activity under the Plan:  SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY     Number     Weighted Average Exercise Price     Weighted Average Remaining Life   Stock Options                         Outstanding December 31, 2023     1,357,466     $ 7.39       4.49   Granted     742,150       1.73       9.98   Expired     (139,875 )     5.94       -   Exercised     -       -       -   Outstanding March 31, 2024     1,959,741     $ 5.35       6.50
SCHEDULE OF SHARE-BASED COMPENSATION NONVESTED SHARES	A summary of the status of the Company’s nonvested options as of March 31, 2024, and changes during the three months ended March 31, 2024,   is presented below: SCHEDULE OF SHARE-BASED COMPENSATION NONVESTED SHARES  Nonvested Options   Options     Weighted-Average Exercise Price   Nonvested at December 31, 2023     49,832     $ 14.72   Granted     742,150       1.73   Vested     (16,961 )     11.27   Forfeited     -       -   Nonvested at March 31, 2024     775,021     $ 2.36
SUMMARY OF WARRANT	A summary of warrant issuances are as follows:  SUMMARY OF WARRANT     Number     Weighted Average Exercise Price     Weighted Average Remaining Life   Warrants                                                   Outstanding December 31, 2023     942,566     $ 19.47       2.31   Granted     -       -       -   Expired     -       -       -   Exercised     -       -       -   Outstanding March 31, 2024     942,566     $ 19.47       2.06

v3.24.1.1.u2

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIC (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, current	$ 1,592,025	$ 2,768,119
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value disclosure	1,592,025	2,768,119
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value disclosure	1,592,025	2,768,119
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value disclosure
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value disclosure

v3.24.1.1.u2

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially outstanding dilutive common shares	2,902,307	2,498,532
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially outstanding dilutive common shares	1,959,741	1,357,466
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially outstanding dilutive common shares	942,566	1,055,066
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially outstanding dilutive common shares		86,000

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Accounting Policies [Abstract]
Purchase of marketable securities	$ 297,120
Proceeds from sale of marketable securities	1,500,000	294,669
Realized gain on marketable securities	198
Unrealized gain on marketable securities	26,587
Marketable securities	$ 1,592,025		$ 2,768,119
Property, Plant and Equipment, Useful Life	3 years
Depreciation	$ 12,572	$ 90

v3.24.1.1.u2

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accounting	$ 57,350	$ 36,750
Research and development	265,873	498,366
Legal	13,922	6,334
Other	108,950	113,802
Total	$ 446,095	$ 655,252

v3.24.1.1.u2

SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares
Expected dividend yield	0.00%
Risk free interest rate minimum	4.01%
Risk free interest rate maximum	4.25%
Expected life in years	10 years
Expected volatility minimum	213.00%
Expected volatility maximum	215.00%
Minimum [Member]
Exercise price	$ 0.84
Maximum [Member]
Exercise price	$ 5.00

v3.24.1.1.u2

SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options outstanding, Beginning	1,357,466
Stock options, Granted	742,150
Stock options outstanding, Ending	1,959,741	1,357,466
Weighted average exercise price,Ending	$ 5.35
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options outstanding, Beginning	1,357,466
Weighted average exercise price, Beginning	$ 7.39
Weighted average remaining life,Ending	6 years 6 months	4 years 5 months 26 days
Stock options, Granted	742,150
Weighted average exercise price, Granted	$ 1.73
Weighted average remaining life, granted	9 years 11 months 23 days
Stock options, Expired	(139,875)
Weighted average exercise price, Expired	$ 5.94
Stock options, Exercised
Weighted average exercise price, Exercised
Stock options outstanding, Ending	1,959,741	1,357,466
Weighted average exercise price,Ending	$ 5.35	$ 7.39

v3.24.1.1.u2

SCHEDULE OF SHARE-BASED COMPENSATION NONVESTED SHARES (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Equity [Abstract]
Nonvested Options, Beginning Balance | shares	49,832
Nonvested, Weighterd Average Exercise Price, Beginning Balance | $ / shares	$ 14.72
Nonvested Options, Granted | shares	742,150
Nonvested, Weighterd Average Exercise Price, Granted | $ / shares	$ 1.73
Nonvested Options, Vested | shares	(16,961)
Nonvested, Weighterd Average Exercise Price, Vested | $ / shares	$ 11.27
Nonvested Options, Forfeited | shares
Nonvested, Weighterd Average Exercise Price, Forfeited | $ / shares
Nonvested Options, Ending Balance | shares	775,021
Nonvested, Weighterd Average Exercise Price, Ending Balance | $ / shares	$ 2.36

v3.24.1.1.u2

SUMMARY OF WARRANT (Details) - Warrant [Member] - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Warrants Outstanding, Beginning	942,566
Number of Warrants Outstanding, Weighted Average Exercise Price, Beginning	$ 19.47
Number of Warrants Outstanding, Weighted Average Remaining Life	2 years 21 days	2 years 3 months 21 days
Number of Warrants Outstanding, Granted
Number of Warrants Outstanding, Weighted Average Exercise Price, Granted
Number of Warrants Outstanding, Expired
Number of Warrants Outstanding, Weighted Average Exercise Price, Expired
Number of Warrants Outstanding, Exercised
Number of Warrants Outstanding, Weighted Average Exercise Price, Exercised
Number of Warrants Outstanding, Ending	942,566	942,566
Number of Warrants Outstanding, Weighted Average Exercise Price, Ending		$ 19.47

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)				3 Months Ended		12 Months Ended
	Mar. 25, 2024	Feb. 12, 2024	Jan. 08, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of options outstanding				1,959,741			1,357,466
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price				$ 5.35
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value				$ 26,053
Options to purchase common stock				742,150
Options vested shares				16,961
Employees [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share based compensation expense				$ 637	$ 1,713
Unamortized stock option expense				727,677
Non-Employees [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share based compensation expense				161,224	164,994
Unamortized stock option expense				$ 1,049,461
Share-Based Payment Arrangement, Option [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of options outstanding				1,959,741			1,357,466
Share-Based Compensation Arrangement by Share-Based Payment Award, Shares Issued in Period				742,150
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price				$ 5.35			$ 7.39
Share based compensation expense				$ 161,861	166,707
Unamortized stock option expense				$ 1,777,138
Weighted average period for unamortized stock compensation (in years)				2 years 10 months 9 days
Options to purchase common stock				742,150
Options exercise price				$ 1.73
Share-Based Payment Arrangement, Option [Member] | General and Administrative Expense [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share based compensation expense				$ 52,360	51,526
Share-Based Payment Arrangement, Option [Member] | Research and Development Expense [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share based compensation expense				$ 109,501	$ 115,181
2016 Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of additional shares granted							186,594	184,260
Number of shares available for grant				873,763			1,279,181
2016 Plan [Member] | Subsequent Event [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of additional shares granted						196,857
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Rounding of shares related to a reverse stock split				9,644	9,644
Common Stock [Member] | Consulting Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options to purchase common stock		4,400
Options expire period		10 years
Options vest period		3 months
Monthly payment		$ 5,000
Options exercise price		$ 5.00
Common Stock [Member] | Employees And Consultants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options to purchase common stock	717,000		20,750
Options exercise price			$ 0.84
Options expire period			10 years
Options vest period			48 months
Common Stock [Member] | Officer And Board Of Director [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options exercise price	$ 1.74
Options expire period	10 years
Options vested shares	160,000
Common Stock [Member] | Officer And Board Of Director [Member] | Minimum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options vest period	24 months
Common Stock [Member] | Officer And Board Of Director [Member] | Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options vest period	48 months
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share based compensation expense				$ 0	$ 0
Warrant shares, outstanding				942,566			942,566
Warrant exercise price				$ 19.47
Class of warrant or right, outstanding, intrinsic value				$ 0

v3.24.1.1.u2

COLLABORATIVE AGREEMENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development expense	$ 1,460,746	$ 348,031
Research Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development expense	$ 0	$ 0

v3.24.1.1.u2

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Royalty payment on behalf of sublicensee percentage	2.50%
Sales revenue	$ 0	$ 0
Interest on amounts owed under license agreement, rate	3.00%
Licensing Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Royalty payment, percentage	2.50%
Up-front sub-license fees, percentage	10.00%

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Agenus Inc [Member]
Related Party Transaction [Line Items]
Operating Costs and Expenses	$ 0	$ 0
Other Liabilities	0		$ 150,296
CTC North, GmbH [Member]
Related Party Transaction [Line Items]
Operating Costs and Expenses	0	$ 91,544
Other Commitment	1,300,000
Other Liabilities, Current	$ 80,409		$ 80,409

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