TAO Synergies Inc 10-Q for FY2024 Q3

TAO Synergies Inc. (TAOX)

10-Q 2024-11-12 For: 2024-09-30

Added on April 07, 2026

About this 10-Q

TAO Synergies Inc filed this 10-Q on November 12, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $5.74M; compared with net income of $763.2K a year earlier
Diluted EPS: $4.58; up 445.2% from $0.84 a year earlier

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Delaware	46-1585656
(State or other jurisdiction of incorporation or	(I.R.S. Employer
organization)	Identification No.)

1185 Avenue of the Americas, 3rd Floor
New York, New York	10036
(Address of principal executive offices)	(Zip code)

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


	Page
Part I – FINANCIAL INFORMATION	3

Item 1. Financial Statements (Unaudited)	3

Condensed Balance Sheets as of September 30, 2024 and December 31, 2023	3

Condensed Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023	4

Condensed Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023	5

Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	7

Notes to Condensed Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3. Quantitative and Qualitative Disclosures about Market Risk	39

Item 4. Controls and Procedures	39

Part II – OTHER INFORMATION	40

Item 1. Legal Proceedings	40

Item 1A. Risk Factors	40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3. Defaults upon Senior Securities	40

Item 4. Mine Safety Disclosures	40

Item 5. Other Information	40

Item 6. Exhibits	41

Signatures	42


	September 30,		December 31,
	2024		2023
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	19,625,780	$	28,661,498
Prepaid Clinical trial expenses		—		375,085
Available for sale debt security		2,443,300		1,438,500
Prepaid expenses and other current assets		211,230		57,677

TOTAL CURRENT ASSETS		22,280,310		30,532,760

Equity method investment		531,927		562,402

Fixed assets, net of accumulated depreciation		14,100		18,505

TOTAL ASSETS	$	22,826,337	$	31,113,667


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	286,350	$	444,633
Accrued expenses		54,542		435,891
Accrued Convertible Preferred payments payable		—		3,395,945

TOTAL CURRENT LIABILITIES		340,892		4,276,469

Warrant liability		3,251,000		140,000
Derivative liability		6,118,000		1,113,000

TOTAL LIABILITIES		9,709,892		5,529,469

Commitments and contingencies

Series B Convertible redeemable preferred stock, $.0001 par value and $1,000 face value, 1,000,000 shares authorized; 0 and 6,000 shares issued and outstanding at Spetember 30, 2024 and December 31, 2023, respectively. Liquidation preference of $0 plus dividends accrued at 7% per annum of $0 as of September 30, 2024.		—		1,236,940

Series C Convertible redeemable preferred stock, $.0001 par value and $1,000 face value, 1,000,000 shares authorized; 5,000 and 0 shares issued and outstanding at Spetember 30, 2024 and December 31, 2023, respectively. Liquidation preference of $0 plus dividends accrued at 5% per annum of $13,194 as of September 30, 2024.		314,473		—

STOCKHOLDERS’ EQUITY
Common stock - 150,000,000 shares authorized, $0.0001 par value; 1,355,613 shares issued and outstanding as of September 30, 2024 and 963,489 shares issued and outstanding as of December 31, 2023.*		137		96
Additional paid-in capital		54,309,822		57,957,008
Accumulated other comprehensive income		5,702		902
Accumulated deficit		(41,513,689)		(33,610,748)

TOTAL STOCKHOLDERS’ EQUITY		12,801,972		24,347,258

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	22,826,337	$	31,113,667


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2024		2023		2024		2023
OPERATING EXPENSES:
Research and development	$	222,897	$	212,103	$	1,174,214	$	1,397,031
General and administrative		1,136,772		1,217,689		3,457,916		4,784,415
TOTAL OPERATING EXPENSES		1,359,669		1,429,792		4,632,130		6,181,446

OTHER INCOME (LOSS):
Interest income		300,681		549,995		1,094,584		1,373,511
Share of net loss in equity investment		(12,025)		—		(30,475)		—
Warrant issuance cost		(618,375)		—		(618,375)		—
Loss on issuance of Series C Preferred Stock		(3,812,625)		—		(3,812,625)		—
Change in fair value of warrant liability		(218,000)		674,000		(314,000)		1,055,000
Change in fair value of derivative liability		(22,000)		969,000		1,091,000		(1,289,600)
TOTAL OTHER INCOME (LOSS)		(4,382,344)		2,192,995		(2,589,891)		1,138,911

Net loss (income) before income taxes		5,742,013		(763,203)		7,222,021		5,042,535

Provision for income taxes		—		—		—		—

Net loss		5,742,013		(763,203)		7,222,021		5,042,535

Preferred Stock dividends		306,725		1,124,628		680,919		1,814,277
Deemed dividend - preferred stock extinguishment		—		—		—		5,693,000

Net Loss attributable to common stockholders	$	6,048,738	$	361,425	$	7,902,940	$	12,549,812

Change in fair value of available for sale debt security		5,400		—		4,800		—

Net comprehensive loss	$	6,043,338	$	361,425	$	7,898,140	$	12,549,812

PER SHARE DATA:

Basic and diluted loss per common share *	$	4.58	$	0.84	$	6.63	$	37.01

Basic and diluted weighted average common shares outstanding *		1,320,000		428,200		1,192,500		339,100


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from __________________ to __________________


Title of each class		Trading Symbol(s)		Name of each exchange on which registered


Common Stock, $0.0001 par value per share		SNPX		The Nasdaq Stock Market LLC


	Three Months Ended September 30, 2023
										Additional				Accumulated Other
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Income (Loss)		Total

Balance July 1, 2023	14,000	$	2,077,379	—	$	—	294,611	$	29	$	56,850,002	$	(32,019,904)	$	—	$	24,830,127

Stock based compensation	—		—	—		—	—		—		15,064		—		—		15,064

Issuance of common stock for consulting fees	—		—	—		—	446		1		4,499		—		—		4,500

Preferred stock dividends paid	—		192,500	—		—	—		—		—		(192,500)		—		(192,500)

Reclassification of accrued dividends upon probable redemption of preferred stock	—		—	—		—	—		—		—		—		—		—

Deemed dividend - preferred stock extinguishment	—		46,924	—		—	81,901		8		815,363		(932,128)		—		(116,757)

Preferred stock redemptions and conversions	(4,000)		(2,026,292)	—		—	323,471		32		3,892,847		—		—		3,892,879

Accrual of preferred stock and dividend redemption	(1,000)		(1,058,333)	—		—	—		—		—		—		—		—

Preferred stock accretion	—		2,455,656	—		—	—		—		(2,455,656)		—		—		(2,455,656)

Net loss	—		—	—		—	—		—		—		763,203		—		763,203

Balance September 30, 2023	9,000	$	1,687,834	—	$	—	700,429	$	70	$	59,122,119	$	(32,381,329)	$	—	$	26,740,860


	Three Months Ended September 30, 2024
										Additional				Accumulated Other
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Income (Loss)		Total

Balance July 1, 2024	—	$	—	—	$	—	1,254,309	$	127	$	54,261,123	$	(35,464,950)	$	302	$	18,796,602

Stock based compensation	—		—	—		—	—		—		3,791		—		—		3,791

Issuance of Preferred Stock	—		—	5,000		—	—		—		—		—		—		—

Issuance of common stock for consulting fees	—		—	—		—	1,304		—		4,500		—		—		4,500

Preferred stock dividends	—		274,140	—		13,194	—		—		—		(287,334)		—		(287,334)

Deemed dividends on preferred stock	—		19,392	—		—	—		—		—		(19,392)		—		(19,392)

Preferred stock redemptions and conversions	—		—	—		—	100,000		10		341,687		—		—		341,697

Accrual of preferred stock and dividend redemption	—		(293,532)	—		—	—		—		—		—		—		—

Preferred stock accretion	—		—	—		301,279	—		—		(301,279)		—		—		(301,279)

Comprehensive income	—		—	—		—	—		—		—		—		5,400		5,400

Net loss	—		—	—		—	—		—		—		(5,742,013)		—		(5,742,013)

Balance September 30, 2024	—	$	—	5,000	$	314,473	1,355,613	$	137	$	54,309,822	$	(41,513,689)	$	5,702	$	12,801,972


	Nine Months Ended September 30, 2023
										Additional				Accumulated Other
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Income		Total

Balance January 1, 2023	15,000	$	2,721,723	—	$	—	290,681	$	29	$	52,524,461	$	(19,831,517)	$	—	$	32,692,973

Stock based compensation	—		—	—		—	—		—		994,261		—		—		994,261

Issuance of common stock for consulting fees	—		—	—		—	4,376		1		113,499		—		—		113,500

Preferred stock dividends paid	—		882,149	—		—	—		—		—		(882,149)		—		(882,149)

Reclassification of accrued dividends upon probable redemption of preferred stock	—		165,375	—		—	—		—		—		—		—		—

Deemed dividends on preferred stock	—		46,924	—		—	81,901		8		815,363		(932,128)		—		(116,757)

Deemed dividend - preferred stock extinguishment	—		—	—		—	—		—		5,693,000		(5,693,000)		—		—

Preferred stock redemptions and conversions	(5,000)		(3,715,941)	—		—	323,471		32		3,892,847		—		—		3,892,879

Accrual of preferred stock and dividend redemption	(1,000)		(3,323,708)	—		—	—		—		—		—		—		—

Preferred stock accretion	—		4,911,312	—		—	—		—		(4,911,312)		—		—		(4,911,312)

Net loss	—		—	—		—	—		—		—		(5,042,535)		—		(5,042,535)

Balance September 30, 2023	9,000	$	1,687,834	—	$	—	700,429	$	70	$	59,122,119	$	(32,381,329)	$	—	$	26,740,860


	Nine Months Ended September 30, 2024
										Additional				Accumulated Other
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Income		Total

Balance January 1, 2024	6,000	$	1,236,940	—	$	—	963,389	$	96	$	57,957,008	$	(33,610,748)	$	902	$	24,347,258

Stock based compensation	—		—	—		—	—		—		21,618		—		—		21,618

Issuance of preferred stock	—		—	5,000		—	—		—		—		—		—		—

Issuance of common stock for consulting fees	—		—	—		—	18,005		3		113,498		—		—		113,501

Preferred stock dividends	—		396,640	—		13,194	—		—		—		(409,834)		—		(409,834)

Deemed dividends on preferred stock	—		271,086	—		—	—		—		—		(271,086)		—		(271,086)

Preferred stock redemptions and conversions	(2,000)		(1,088,630)	—		—	374,219		38		1,430,289		—		—		1,430,327

Accrual of preferred stock and dividend redemption	(4,000)		(5,727,348)	—		—	—		—		—		—		—		—

Preferred stock accretion	—		4,911,312	—		301,279	—		—		(5,212,591)		—		—		(5,212,591)

Comprehensive income (loss)	—		—	—		—	—		—		—		—		4,800		4,800

Net loss	—		—	—		—	—		—		—		(7,222,021)		—		(7,222,021)

Balance September 30, 2024	—	$	—	5,000	$	314,473	1,355,613	$	137	$	54,309,822	$	(41,513,689)	$	5,702	$	12,801,972


	Nine Months Ended		Nine Months Ended
	September 30, 2024		September 30, 2023
CASH FLOW USED IN OPERATING ACTIVITIES
Net loss	$	7,222,021	$	5,042,535
Adjustments to reconcile net loss to net cash used by operating activities
Stock based compensation		21,618		994,261
Warrant issuance cost		618,375		—
Loss on issuance of Series C Converetible Preferred Stock		3,812,625		—
Change in fair value of warrant liability		314,000		(1,055,000)
Change in fair value of derivative liability		(1,091,000)		1,289,600
Share of net loss in equity investment		30,475		—
Consulting services paid by issuance of common stock		113,501		113,500
Depreciation expense		4,405		5,137
Change in assets and liabilities:
Decrease in prepaid expenses and other current assets		221,531		493,987
Decrease in accounts payable		(158,283)		(445,988)
Decrease in accrued expenses		(381,349)		(460,171)
		3,505,898		935,326

Net Cash Used in Operating Activities		(3,716,123)		(4,107,209)

CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of available for sale debt security		(1,000,000)		—
Purchase of fixed assets		—		(2,707)

Net Cash Used in Investing Activities		(1,000,000)		(2,707)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of Series C Convertible Preferred Stock		4,463,000		—
Redemption of Series B Convertible Preferred Stock		(7,831,677)		(1,000,000)
Dividends on Series B Convertible Preferred Stock		(950,918)		(641,015)

Net Cash Used in Financing Activities		(4,319,595)		(1,641,015)

NET DECREASE IN CASH AND EQUIVALENTS		(9,035,718)		(5,750,931)

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		28,661,498		37,478,480

CASH AND EQUIVALENTS AT END OF PERIOD	$	19,625,780	$	31,727,549

DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of Common Stock for Series B Convertible Preferred Stock installment conversions	$	1,430,327	$	—
Accretion of Series B Convertible Preferred Stock to redemption value	$	4,911,312	$	—
A cretion of Series C Convertible Preferred Stock to redemption vaule	$	301,279	$	—
Accrual of Series B Convertible Preferred Stock and Dividend Redemption	$	5,727,348	$	266,074
Change in fair value of available for sale debt security	$	4,800	$	—
Warrant liability upon issuance of Series C Convertible Preferred Stock	$	2,797,000	$	—
Derivative liability upon issuance of Series C Convertible Preferred Stock	$	6,096,000	$	—


	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2024	2023	2024	2023
Common Stock Options	32,751	29,674	31,718	28,650
Convertible Preferred Stock	1,253,299	54,333	1,253,299	54,333
Common Stock Warrants	433,780	287,197	384,643	287,197
Total	1,719,830	371,204	1,669,660	370,180


				Weighted-
				Average	Aggregate
		Weighted-		Remaining	Intrinsic
	Number	Average		Contractual	Value
	of	Exercise		Term	(in
	Shares	Price		(Years)	millions)
Options outstanding at January 1, 2024	29,674	$	153.75	7.90	$	—
Options granted	3,200	$	5.39	8.98		—
Less options forfeited	—	$	—	—		—
Less options expired/cancelled	—	$	—	—		—
Less options exercised	—	$	—	—		—
Options outstanding at September 30, 2024	32,874	$	139.27	8.02	$	—
Options exercisable at September 30, 2024	29,674	$	153.71	7.95	$	—


	Synaptogenix, Inc.

Date: November 12, 2024	By:	/s/ Alan J. Tuchman, M.D.
		Alan J. Tuchman, M.D.
		Chief Executive Officer
		(principal executive officer)

Date: November 12, 2024	By:	/s/ Robert Weinstein
		Robert Weinstein
		Chief Financial Officer, Executive Vice President, Secretary and Treasurer (principal financial officer and principal accounting officer)

	/s/ Alan J. Tuchman, M.D.
	Alan J. Tuchman, M.D.
	Chief Executive Officer
	(principal executive officer)

	/s/ Robert Weinstein
	Robert Weinstein
	Chief Financial Officer, Executive Vice President, Secretary and Treasurer
	(principal financial officer and principal accounting officer)


Balance of Cannasoul Convertible Notes as of January 1, 2023	$	—
Issued		1,437,598
Change in fair value		902
Balance of Cannasoul Convertible Notes as of December 31, 2023	$	1,438,500
Issued		1,000,000
Change in fair value		4,800
Balance of Cannasoul Convertible Notes as of September 30, 2024	$	2,443,300


		Number
		of shares
Warrants outstanding January 1, 2023		287,436
Warrants issued		1,331,431
Warrants exercised		—
Warrants expired		—
Warrants outstanding and exercisable September 30, 2024		1,618,867


		September 30,		December 31,
Description	Level	2024		2023
Liabilities:
Warrant liability (Note 6)	3	$	3,251,000	$	140,000
Bifurcated embedded derivative liability (Note 6)	3	$	6,118,000	$	1,113,000


	September 30, 2024
Balance on December 31, 2022	$	1,510,000
Change in fair value of warrant liability		(1,370,000)
Balance on December 31, 2023	$	140,000
Change in fair value of warrant liabilities Series B Preferred		129,000
Balance of warrant liabilities Series B Preferred		269,000
Warrant liabilities upon issuance of Series C Preferred		2,797,000
Change in fair value of warrant liabilities Series C Preferred		185,000
Balance on September 30, 2024	$	3,251,000


	September 30, 2024
Balance on December 31, 2022	$	369,400
Change in fair value of bifurcated embedded derivative		(743,600)
Balance on December 31, 2023	$	1,113,000
Change in fair value of derivative liability Series B Preferred		(1,113,000)
Balance of derivative liability Series B Preferred		—
Derivative liability upon issuance of Series C Preferred		6,096,000
Change in fair value of derivative liability Series C Preferred		22,000
Balance on September 30, 2024	$	6,118,000


	Three Months ended
	September 30,				Dollar
	2024		2023		Change		% Change
Operating Expenses:
Research and development expenses	$	222,897	$	212,103	$	10,794	5.1	%
General and administrative expenses	$	1,136,772	$	1,217,689	$	(80,917)	(6.6)	%
Other income (loss), net	$	(4,382,344)	$	2,192,995	$	(6,575,339)	(299.8)	%
Net loss (income)	$	5,742,013	$	(763,203)	$	(6,505,216)	(852.4)	%


	Nine Months Ended September 30,
	2024		2023
Cash used in operating activities	$	3,716,123	$	4,107,209
Cash used in investing activities		1,000,000		2,707
Cash used in (provided by) financing activities		4,319,595		1,641,015


Exhibit Number

3.1		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Synaptogenix, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 4, 2024).

10.1		Third Amendment to Offer Letter, dated as of June 20, 2024, by and between Alan J. Tuchman, Ph.D. and Synaptogenix, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2024).

10.2		Form of Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2024).

10.3		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2024).

10.4		Engagement Letter, dated September 10, 2024, by and between Synaptogenix, Inc. and GP Nurmenkari Inc. (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2024).

31.1		Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from this Quarterly Report on Form 10-Q for the period ended September 30, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Statements of Operations; (ii) the Condensed Balance Sheets; (iii) the Condensed Statements of Cash Flows; and (iv) the Notes to Financial Statements, tagged as blocks of text.

104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)