TAO Synergies Inc 10-Q for FY2023 Q3

TAO Synergies Inc. (TAOX)

10-Q 2023-11-14 For: 2023-09-30

Added on April 07, 2026

About this 10-Q

TAO Synergies Inc filed this 10-Q on November 14, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $763.2K; compared with a net loss of $3.03M a year earlier
Diluted EPS: $0.03; down 93.0% from $0.43 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, 2023 and December 31, 2022	3

Condensed Statements of Operations for the three and nine months ended September 30, 2023 and 2022	4

Condensed Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	5

Condensed Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7

Notes to Condensed Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3. Quantitative and Qualitative Disclosures about Market Risk	36

Item 4. Controls and Procedures	36

Part II – OTHER INFORMATION	37

Item 1. Legal Proceedings	37

Item 1A. Risk Factors	37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3. Defaults upon Senior Securities	37

Item 4. Mine Safety Disclosures	37

Item 5. Other Information	37

Item 6. Exhibits	38

Signatures	39


	September 30,		December 31,
	2023		2022
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	31,727,549	$	37,478,480
Prepaid Clinical trial expenses		375,085		367,714
Prepaid expenses and other current assets		238,109		739,467

TOTAL CURRENT ASSETS		32,340,743		38,585,661

Fixed assets, net of accumulated depreciation		19,715		22,145

TOTAL ASSETS	$	32,360,458	$	38,607,806


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	214,218	$	660,206
Accrued expenses		76,543		536,714
Dividend payable		—		115,890
Accrued Series B Convertible Preferred payments payable		1,527,002		—

TOTAL CURRENT LIABILITIES		1,817,763		1,312,810

Warrant liability		455,000		1,510,000
Derivative liability		1,659,000		370,300

TOTAL LIABILITIES		3,931,763		3,193,110

Commitments and contingencies

Series B Convertible redeemable preferred stock, $.0001 par value and $1,000 face value, 1,000,000 shares authorized; 9,000 and 15,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively. Liquidation preference of $9,000,000 plus dividends accrued at 7% per annum of $128,625 as of September 30, 2023.		1,687,835		2,721,723

STOCKHOLDERS' EQUITY
Common stock - 150,000,000 shares authorized, $0.0001 par value; 17,510,743 shares issued and outstanding as of September 30, 2023 and 7,267,032 shares issued and outstanding as of December 31, 2022.		1,753		728
Additional paid-in capital		59,120,436		52,523,762
Accumulated deficit		(32,381,329)		(19,831,517)

TOTAL STOCKHOLDERS’ EQUITY		26,740,860		32,692,973

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	32,360,458	$	38,607,806


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
OPERATING EXPENSES:
Research and development	$	212,103	$	1,484,694	$	1,397,031	$	4,911,869
General and administrative		1,217,689		1,682,512		4,784,415		5,334,260

TOTAL OPERATING EXPENSES		1,429,792		3,167,206		6,181,446		10,246,129

OTHER INCOME (EXPENSE):
Interest income		549,995		140,730		1,373,511		189,827
Change in fair value of warrant liability		674,000		—		1,055,000		—
Change in fair value of derivative liability		969,000		—		(1,289,600)		—
TOTAL OTHER INCOME (EXPENSE)		2,192,995		140,730		1,138,911		189,827

Net loss (income) before income taxes		(763,203)		3,026,476		5,042,535		10,056,302

Provision for income taxes		—		—		—		—

Net (income) loss		(763,203)		3,026,476		5,042,535		10,056,302

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

Net loss attributable to common stockholders	$	361,425	$	3,026,476	$	12,549,812	$	10,056,302

PER SHARE DATA:

Basic and diluted loss per common share	$	0.03	$	0.43	$	1.48	$	1.44

Basic and diluted weighted average common shares outstanding		10,702,900		6,988,000		8,476,200		6,962,400


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

	For the quarterly period ended September 30, 2023


☐	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, 2022
								Additional
	Preferred Stock				Common Stock			Paid-In		Accumulated
	Shares		Amount		Shares	Amount		Capital		Deficit		Total

Balance July 1, 2022		—	$	—	6,810,326	$	682	$	50,124,087	$	(21,171,496)	$	28,953,273

Stock based compensation		—		—	—		—		510,747		—		510,747

Issuance of warrants for consulting fees		—		—	—		—		75,000		—		75,000

Issuance of common stock for consulting fees		—		—	30,843		3		154,500		—		154,503

Net loss		—		—	—		—		—		(3,026,476)		(3,026,476)

Balance September 30, 2022	$	—	$	—	6,841,169	$	685	$	50,864,334	$	(24,197,972)	$	26,667,047


	Three Months Ended September 30, 2023
							Additional
	Preferred Stock			Common Stock			Paid-In		Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit		Total

Balance July 1, 2023	14,000	$	2,077,379	7,365,280	$	738	$	56,849,293	$	(32,019,904)	$	24,830,127

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

Issuance of common stock for consulting fees	—		—	11,152		1		4,499		—		4,500

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

Deemed dividends on preferred stock	—		46,924	2,047,526		205		815,166		(932,128)		(116,757)

Preferred stock redemptions and conversions	(4,000)		(2,026,292)	8,086,785		809		3,892,070		—		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	17,510,743	$	1,753	$	59,120,436	$	(32,381,329)	$	26,740,860


	Nine Months Ended September 30, 2022
								Additional
	Preferred Stock				Common Stock			Paid-In		Accumulated
	Shares		Amount		Shares	Amount		Capital		Deficit		Total

Balance January 1, 2022		—	$	—	6,730,180	$	674	$	47,670,744	$	(14,141,670)	$	33,529,748

Stock based compensation		—		—	—		—		2,238,995		—		2,238,995

Issuance of warrants for consulting fees		—		—	—		—		146,603		—		146,603

Issuance of common stock for consulting fees		—		—	45,989		4		254,849		—		254,853

Exercise of common stock warrants		—		—	65,000		7		553,143		—		553,150

Net loss		—		—	—		—		—		(10,056,302)		(10,056,302)

Balance September 30, 2022	$	—	$	—	6,841,169	$	685	$	50,864,334	$	(24,197,972)	$	26,667,047


	Nine Months Ended September 30, 2023
							Additional
	Preferred Stock			Common Stock			Paid-In		Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit		Total

Balance January 1, 2023	15,000	$	2,721,723	7,267,032	$	728	$	52,523,762	$	(19,831,517)	$	32,692,973

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

Issuance of common stock for consulting fees	—		—	109,400		11		113,489		—		113,500

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

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

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

Deemed dividends on preferred stock	—		46,924	2,047,526		205		815,166		(932,128)		(116,757)

Preferred stock redemptions and conversions	(5,000)		(3,715,941)	8,086,785		809		3,892,070		—		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	17,510,743	$	1,753	$	59,120,436	$	(32,381,329)	$	26,740,860


	Nine Months Ended		Nine Months Ended
	September 30, 2023		September 30, 2022
CASH FLOW USED IN OPERATING ACTIVITIES
Net loss	$	(5,042,535)	$	(10,056,302)
Adjustments to reconcile net loss to net cash used by operating activities
Stock based compensation		994,261		2,238,995
Change in fair value of warrant liability		(1,055,000)		—
Change in fair value of derivative liability		1,289,600		—
Consulting services paid by issuance of common stock		113,500		254,853
Consulting services paid by issuance of common stock warrants		—		146,603
Depreciation expense		5,137		4,188
Change in assets and liabilities:
Decrease in prepaid expenses		493,987		295,253
Decrease in accounts payable		(445,988)		(813,116)
Decrease in accrued expenses		(460,171)		(498,201)
Total adjustments		935,326		1,628,575

Net Cash Used in Operating Activities		(4,107,209)		(8,427,727)

CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of fixed assets		(2,707)		(5,275)

Net Cash Used in Investing Activities		(2,707)		(5,275)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of investor warrants		—		553,150
Redemption of Series B Convertible Preferred Stock		(1,000,000)		—
Dividends on Series B Convertible Preferred Stock		(641,015)		—
Net Cash Provided by Financing Activities		(1,641,015)		553,150

NET DECREASE IN CASH AND EQUIVALENTS		(5,750,931)		(7,879,852)

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		37,478,480		34,213,989

CASH AND EQUIVALENTS AT END OF PERIOD	$	31,727,549	$	26,334,137

DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:

Accrual of Series B Convertible Preferred Stock Dividends	$	1,173,262	$	—
Accretion of Series B Convertible Preferred Stock to redemption value	$	4,911,312	$	—
Deemed dividend for Series B Convertible Preferred Stock modification	$	5,693,000	$	—
Accrual of Series B Convertible Preferred Stock and Dividend Redemption	$	1,527,002	$	—


	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Common Stock Options	741,850	130,000	716,232	128,960
Restricted Stock Units	—	495,000	—	495,000
Convertible Preferred Stock	1,358,323	—	1,358,323	—
Common Stock Warrants	7,179,919	5,175,897	7,179,919	5,625,423
Total	9,280,092	5,800,897	9,254,504	6,249,383


				Weighted-
				Average	Aggregate
		Weighted-		Remaining	Intrinsic
	Number	Average		Contractual	Value
	of	Exercise		Term	(in
	Shares	Price		(Years)	millions)
Options outstanding at January 1, 2023	661,850	$	7.27	9.5	$	—
Options granted	80,000	$	0.87	10.0		—
Less options forfeited	—	$	—	—		—
Less options expired/cancelled	—	$	—	—		—
Less options exercised	—	$	—	—		—
Options outstanding at September 30, 2023	741,850	$	6.15	8.9	$	—
Options exercisable at September 30, 2023	661,850	$	6.08	8.8	$	—


	Synaptogenix, Inc.

Date: November 14, 2023	By:	/s/ Alan J. Tuchman, M.D.
		Alan J. Tuchman, M.D.
		Chief Executive Officer
		(principal executive officer)

Date: November 14, 2023	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)


		Number
		of shares
Warrants outstanding January 1, 2022		6,265,525
Warrants issued		2,028,762
Warrants exercised		(65,000)
Warrants expired		(1,049,368)
Warrants outstanding and exercisable December 31, 2022 and September 30, 2023		7,179,919


		September 30,		December 31,
Description	Level	2023		2022
Liabilities:
Warrant liability (Note 6)	3	$	455,000	$	1,510,000
Bifurcated embedded derivative liability (Note 6)	3	$	1,659,000	$	370,300


	September 30, 2023
Balance on December 31, 2021	$	—
Issuance of warrants		9,915,000
Change in fair value of warrant liability		(8,405,000)
Balance on December 31, 2022	$	1,510,000
Change in fair value of warrant liability		(1,055,000)
Balance on September 30, 2023	$	455,000


	September 30, 2023
Balance on December 31, 2021	$	—
Issuance of convertible preferred stock with bifurcated embedded derivative		2,191,300
Change in fair value of bifurcated embedded derivative		(1,821,900)
Balance on December 31, 2022	$	369,400
Change in fair value of warrant liability		1,289,600
Balance on September 30, 2023	$	1,659,000


	Nine Months ended
	September 30,				Dollar
	2023		2022		Change		% Change
Operating Expenses:
Research and development expenses	$	1,397,031	$	4,911,869	$	(3,514,838)	(71.6)	%
General and administrative expenses	$	4,784,415	$	5,334,260	$	(549,845)	(10.3)	%
Other income (loss), net	$	1,138,911	$	189,827	$	949,084	500.0	%
Net loss	$	5,042,535	$	10,056,302	$	(5,013,767)	(49.9)	%


	Nine Months Ended September 30,
	2023		2022
Cash used in operating activities	$	4,107,209	$	8,427,727
Cash used in investing activities		2,707		5,275
Cash used in (provided by) financing activities		1,641,015		(553,150)


Exhibit Number

3.1		Third Certificate of Amendment to Certificate of Designations of Series B Convertible Preferred Stock of Synaptogenix, Inc. (incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K filed on September 22, 2023).

10.1		Share Purchase Agreement, dated October 31, 2023, by and between Synaptogenix, Inc. and Cannasoul Analytics Ltd. (incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed on November 6, 2023).

10.2		Collaboration Agreement, dated October 31, 2023, by and between Synaptogenix, Inc. and Cannasoul Analytics Ltd. (incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K filed on November 6, 2023).

10.3		Investor Rights Agreement, dated October 31, 2023, by and between Synaptogenix, Inc., Cannasoul Analytics Ltd. and other investors party thereto (incorporated by reference from Exhibit 10.3 to the Current Report on Form 8-K filed on November 6, 2023).

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, 2023, 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)