美國
證券交易委員會 及交易所
華盛頓特區，20549
表單
| 根據1934年證券交易法的第13或15(d)條款，季報。 |
截至年度季度結束
或
| 根據1934年證券交易法第13或15(d)條的過渡報告 |
在 從____________到的過渡期間
委員會
檔案編號
(根據公司章程所述的註冊人的正確名稱)
（註冊地點或其他管轄區的州份 註冊或組織） |
（聯邦國稅局雇主身分識別號碼） 識別號碼） |
(主要執行辦公室地址) (郵政編碼)
申報人的電話號碼，包括區號：
勾選表示公司已按照證券交易法第13或15(d)條款的規定，在過去12個月（或公司需要提交此類報告的較短期限內）提交了所有所需的報告；並且公司在過去90天內一直受到此類提交報告的要求。
標示
勾選該項，表示申報人於過去12個月（或更短期間，申報人必須申報此類檔案的期間）內已按照法規S-t第405條（本章節第232.405條）要求遞交每一個互動式資料檔案。
請勾選以下選項，指明掛牌者是否為大型快速申報掛牌者、快速申報掛牌者、非快速申報掛牌者、較小型的報告公司或新興成長型公司。關於Exchange Act第1202條中「大型快速申報掛牌者」、「快速申報掛牌者」、「較小型報告公司」和「新興成長型公司」的定義，請參閱。
| 大型及加速提交者 | ☐ | 加速彙報者 | ☐ | |
| ☒ | 較小的報告公司 | |||
| 新興成長型公司 |
如為新興成長企業，則應打勾選項表示申報人已選擇不使用交易所法第13(a)條所提供的任何新或修訂財務會計準則延長過渡期遵守。
通過勾選選項表示，是否登記的公司是一家殼公司（如交易所法案第1202條所定義） 是 ☐ 否
根據該法案第12(b)條紀錄的證券：
| 每個類別的標題 | 交易標的 | 在哪個交易所上市的名字 | ||
| | ||||
| |
截至2024年11月4日，發行並流通中的登記公司普通股數量為 .
牛蛙 人工智能控股有限公司。
十、 表 對於 10-Q 表
| 第一部分。 | 財務資訊 | |
| 項目 1 | 財務報表 | |
| 總賬表總表（未經審核）。 | 2 | |
| 綜合綜合損益表（未經審核）。 | 3 | |
| 綜合股東權益變動綜合報表（未經審核）。 | 4 | |
| 綜合現金流量綜合報表（未經審核）。 | 5 | |
| 附註 至精簡合併財務報表（未經審核） | 6 | |
| 項目 2. | 管理層對財務狀況和經營成果的討論與分析 | 15 |
| 項目 3. | 關於市場風險的定量和質量披露 | 20 |
| 項目 4. | 控制項和程序 | 21 |
| 第二部分。 | 其他資料 | 21 |
| 項目 1 | 法律訴訟 | 21 |
| 項目 1A | 風險因素 | 21 |
| 項目 2. | 未登記股權證券的銷售和使用收益 | 21 |
| 項目 3. | 高級證券的違約 | 21 |
| 項目 4. | 礦山安全披露 | 22 |
| 項目 5. | 其他資訊 | 22 |
| 項目 6. | 展品 | 22 |
| 簽名 | 23 |
| i |
前瞻 陳述
這份報告中包含根據1933年證券法第27條或「證券法」以及1934年證券交易法第21條或「交易所法案」的前瞻性陳述。這些前瞻性陳述受到某些風險和不確定性的影響，可能導致實際結果與歷史結果或預期結果有顯著差異。
在某些情況下，您可以通過諸如"可能"，"打算"，"可能"，"將"，"應該"，"可以"，"會"，"預期"，"相信"，"預期"，"估計"，"預測"，"潛在"或這些術語的否定形式來識別前瞻性聲明。這些術語和類似表達旨在識別前瞻性聲明。本報告中的前瞻性聲明基於管理層目前的期望和信念，管理層認爲這是合理的。此外，我們無法評估每個因素對我們業務的影響，或者任何因素或多個因素的程度，或者我們不知道的因素會導致實際結果與任何前瞻性聲明中包含的結果有實質性差異。請注意，不要過分依賴任何前瞻性聲明。這些聲明僅代表我們的估計和假設，截至本報告日期。除非根據聯邦證券法的要求，否則我們不承擔更新任何前瞻性聲明以反映本日期之後的事件或情況，或反映未預料到的事件。
您應該意識到，由於許多因素，實際結果可能與前瞻性聲明中所包含的結果有很大不同，這些因素包括：
| ● | 我們未來的財務表現，包括我們的營業收入、營業成本、營業費用和盈利能力； | |
| ● | 我們的現金及現金等價物足以滿足我們的流動性需求； | |
| ● | 我們對專有開發、數字轉型科技和生物健康業務以及它們各自的市場趨勢的預測； | |
| ● | 我們在所有業務板塊吸引和保留客戶以購買我們的產品和服務的能力； | |
| ● | 像我們這樣的小型上市公司融資的可用性； | |
| ● | 在我們的三個主要業務市場以及新市場和行業垂直領域成功擴張的能力；和 | |
| ● | 有效管理我們的增長和未來費用的能力。 |
其他風險和不確定性包括市場對我們的產品和服務的接受度和需求、定價、不斷變化的監管環境、我們會計政策的影響、行業趨勢、我們財務資源的充足性以執行我們的業務計劃、吸引、留住和激勵關鍵人員的能力，以及我們不時在美國證券交易委員會（SEC）提交的定期和即時報告中描述的其他風險。您應該仔細考慮該報告下的聲明，其中涉及可能導致我們實際結果與前瞻性聲明中列出的不同，並可能對我們的業務、運營結果和財務狀況產生重大不利影響的其他因素。我們或代表我們行事的人發表的所有隨後的書面或口頭前瞻性聲明，均完全受到相應警告性聲明的限制。
| 1 |
第1部分 1. 財務信息
項目 1. 基本報表
牛蛙 人工智能控股有限公司
簡明合併資產負債表
（未經審計）
| 2024年9月30日 | 2023年12月31日 | |||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 預付費用 | ||||||||
| 總計 當前資產 | ||||||||
| 不動產、機器及設備，淨值 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和股東權益 | ||||||||
| 流動負債 | ||||||||
| 應付賬款 | $ | $ | ||||||
| 應計費用 | ||||||||
| 開空 期保險融資 | ||||||||
| 流動負債合計 | ||||||||
| 總負債 | ||||||||
| 股東權益 | ||||||||
| A系列可轉換優先股，$每股面值， 股份已獲授權; 股份截至2024年9月30日和2023年12月31日發行並流通。 | ||||||||
| 普通股，$每股面值， 股份已獲授權; and 2024年9月30日和2023年12月31日分別發行和流通的股份。 | ||||||||
| 外加實收資本 | ||||||||
| 累計虧損 | ( | ) | ( | ) | ||||
| 總股東權益 | ||||||||
| 負債和股東權益總計 | $ | $ | ||||||
請參見附註的未經審計簡明合併財務報表。
| 2 |
牛蛙 人工智能控股有限公司
簡化合並利潤表
（未經審計）
| 三個月結束 | 九個月結束 | |||||||||||||||
| 9月30日, | 9月30日, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營業收入 | ||||||||||||||||
| 營業收入 | $ | $ | $ | $ | ||||||||||||
| 總收入 | ||||||||||||||||
| 營業成本 | ||||||||||||||||
| 營業成本 | ||||||||||||||||
| 營業成本合計 | ||||||||||||||||
| 毛利潤 | ||||||||||||||||
| 營業費用 | ||||||||||||||||
| 研發費用 | ||||||||||||||||
| 一般行政 | ||||||||||||||||
| 營業費用總計 | ||||||||||||||||
| 經營虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（費用）淨額 | ||||||||||||||||
| 利息費用，淨額 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 換股債券轉換損失 | ( | ) | ||||||||||||||
| 其他收入，淨額 | ||||||||||||||||
| 總其他收入(費用)，淨額 | ( | ) | ||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 與權證行權價格調整有關的視爲股利 | ( | ) | ||||||||||||||
| 歸屬於普通股股東的淨虧損 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 每股基本和稀釋後可歸屬於普通股股東的淨虧損 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| 加權平均股本-基本和稀釋 | ||||||||||||||||
請參見附註的未經審計簡明合併財務報表。
| 3 |
牛蛙 人工智能控股有限公司
股東權益變動簡明合併財務報表
（未經審計）
| A系列 | 額外的 | 總計 | ||||||||||||||||||||||||||
| 優先股 | 普通股 | 實收資本 | 累積的 | 股東的 | ||||||||||||||||||||||||
| 股份 | 金額 | 股份 | 金額 | 資本 | 赤字 | 股權 | ||||||||||||||||||||||
| 2022年12月31日結存餘額 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| 普通股票和認股權證的發行淨額 扣除發行成本 | - | |||||||||||||||||||||||||||
| 以股票形式發放服務 | - | |||||||||||||||||||||||||||
| 可轉換債務轉換爲普通股 | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 2023年3月31日的餘額 | ( | ) | ||||||||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| 根據認股證的發行發行普通股 練習 | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 2023年6月30日的餘額 | ( | ) | ||||||||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 截至2023年9月30日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 2023年12月31日結餘爲 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| 普通股和權證發行，扣除發行成本 | - | |||||||||||||||||||||||||||
| 根據認股權證發行普通股 行權 | - | |||||||||||||||||||||||||||
| 因認股權證價格調整而視同股息 | - | - | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 2024年3月31日結存餘額 | ( | ) | ||||||||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 2024年6月30日餘額 | ( | ) | ||||||||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| 2024年9月餘額 30日 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
請參見附註的未經審計簡明合併財務報表。
| 4 |
牛蛙 人工智能控股有限公司
濃縮 合併現金流量表
（未經審計）
| 截至9月30日的九個月。 | ||||||||
| 2024 | 2023 | |||||||
| 經營活動產生的現金流量： | ||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | ||
| 調整爲將淨損失調節爲經營活動中使用的淨現金流的項目： | ||||||||
| 折舊 | ||||||||
| 股權獎勵 | ||||||||
| 股份 用於務工發行 | ||||||||
| 虧損 轉換債券 | ||||||||
| 債務折扣的攤銷 | ||||||||
| 經營性資產和負債的變動： | ||||||||
| 預付費用 | ( | ) | ( | ) | ||||
| 應付賬款 | ( | ) | ( | ) | ||||
| 應計費用 | ( | ) | ||||||
| 遞延營收 | ( | ) | ||||||
| 經營活動中的淨現金流出 | ( | ) | ( | ) | ||||
| 投資活動現金流量: | ||||||||
| 購置固定資產和其他資產 | ||||||||
| 投資活動使用的淨現金 | ||||||||
| 籌資活動現金流量: | ||||||||
| 普通股和認股權證發行收入淨額，扣除發行成本 | ||||||||
| 認股權證行使收入 | ||||||||
| 應付票據的收益 | ||||||||
| 應付票據支付 | ( | ) | ||||||
| 短期保險融資收入 | ||||||||
| 保險融資短期支付 | ( | ) | ( | ) | ||||
| 籌資活動提供的淨現金流量 | ||||||||
| 現金及現金等價物淨增加額 | ||||||||
| 期初現金及現金等價物餘額 | ||||||||
| 期末現金及現金等價物餘額 | $ | $ | ||||||
| 補充現金流量信息： | ||||||||
| 支付利息的現金 | $ | $ | ||||||
| 支付的稅費現金 | $ | $ | ||||||
| 非現金活動的補充 | ||||||||
| 普通股發行款項轉換 | $ | $ | ||||||
請參見附註的未經審計簡明合併財務報表。
| 5 |
牛蛙 人工智能控股有限公司
注意事項 至簡明合併財務報表（未經審計）
1. Organization and Nature of Business
業務描述
Bullfrog AI控股公司（「我們」，「我們的」或「公司」）於2020年2月在內華達州成立。Bullfrog AI控股公司是Bullfrog AI, Inc.和Bullfrog AI Management, LLC的母公司，這兩家公司分別於2017年和2021年在特拉華州和馬里蘭州成立。我們所有的業務目前都是通過Bullfrog AI控股公司進行的，該公司於2020年2月開始運營。我們是一家專注於醫學和醫療保健中複雜數據集的高級人工智能和機器學習（AI/ML）驅動分析的公司。我們的目標是利用我們的平台，通過外部合作和有選擇性的內部開發，實現對藥物資產的精準醫學方法。
大多數新的治療方法在臨床前或臨床開發的某個階段都會失敗。這些失敗是開發新治療方法成本高昂的主要原因。開發新治療方法的困難之一是有效整合在開發的每個階段產生的複雜和高度維度的數據，以降低後續開發過程的風險。人工智能和機器學習（AI/ML）已經成爲解決這一問題的數字解決方案。
我們使用人工智能和機器學習來推動內部和外部項目的藥物研發。大多數目前的人工智能和機器學習平台仍然在將不同、高維數據綜合爲可操作見解方面表現不足。我們的分析平台由一組最先進的機器學習和人工智能模型組成。我們的核心平台技術，命名爲bfLEAP™，是由約翰斯·霍普金斯大學應用物理實驗室（JHU-APL）開發的分析型人工智能和機器學習平台，能夠克服目前阻礙研究人員和臨床醫生的可擴展性和靈活性挑戰，通過提供對數據更精確、多維的理解。我們正在部署我們的分析平台，包括bfLEAP™，用於內部項目開發的若干關鍵階段，以及通過戰略伙伴關係和合作來簡化治療開發中的數據分析，通過降低新療法失敗率來降低整體開發成本，並影響無數患者的生活，讓他們獲得否則無法獲得的療法。
專有的分析平台同時利用了監督式和無監督式機器學習。因此，它能夠揭示數據中真實而有意義的關聯，無需先驗假設。平台中使用的算法旨在處理高度不平衡的數據集，併成功識別與感興趣結果相關的因素組合。我們的平台利用了同時使用相關性和因果關係的機器學習和人工智能方法，提供了綜合的預測分析方法，預計將帶來意義深遠的見解，包括疾病的分子驅動因素。在這方面，藉助於我們對專有數據集（如與利伯腦發育研究所的戰略數據和商業化協議）的訪問，我們增加了在目標發現方面的內部努力。
我們的目標是在所有階段改善臨床前和臨床療法開發的成功幾率，包括內部項目以及我們的戰略合作伙伴和合作者。我們的業務模式包括支持正在進行中臨床試驗的成功並拯救晚期失敗的藥物（即，第2或第3期臨床試驗失敗），將其內部開發以便最終出售；儘管我們也考慮進入早期階段藥物的合作。我們通過利用在JHU-APL初始開發的強大且經過驗證的bfLEAP™人工智能/機器學習平台來推進我們的藥物資產增值業務。我們相信bfLEAP™分析平台可能是一種潛在的顛覆性工具，用於分析臨床前和/或臨床數據集，例如在翻譯性研發和臨床試驗環境中生成的健壯的臨床前和臨床試驗數據集。
流動性和繼續經營
公司自成立以來一直存在經營性現金流爲負並處於淨虧損狀態。2023年第一季度，我們完成了首次公開募股（「IPO」）。2024年2月，我們從一次承銷的普通股和認股權證公募增發中收到了約$
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因此，我們將需要額外的資本來繼續執行我們的策略。我們預計通過各種途徑籌集這些額外資本，包括股權證券銷售、債務交易、許可協議和合作安排。儘管管理層相信這樣的資金來源將會可獲得，但不能保證任何此類安排將達成以在我們需要時提供足夠的資本來繼續我們的業務，或者如果有條件的話，符合我們的接受標準。如果我們無法及時籌集到足夠資金，我們可能被迫推遲、減少或淘汰部分或全部的研究和產品開發項目或我們的資本支出，或以不利的條件達成安排。目前，我們沒有從任何來源獲得未來資金的承諾。
附帶的合併財務報表已經假設公司將繼續作爲一個持續經營的實體，這涉及業務的連續性，資產的實現以及在正常業務過程中清償債務。因此，我們的合併財務報表不包括可能因此不確定性結果而產生的任何調整。
2. 重要會計政策之摘要
表述基礎
附表中的簡明綜合財務報表包括Bullfrog 人工智能 控股有限公司及其全資子公司的帳戶，並按照美國通用會計準則（「GAAP」）編制了中期財務信息。所有公司間帳戶和交易在合併中已予以消除。
這份未經審計的精簡綜合報表應與我們於2024年3月29日向證券交易委員會提交的《基本報表在10-k表格中的2023年年度報告》中包含的綜合財務報表和相關注解一起閱讀。這些未經審計的精簡綜合財務報表是根據在10-k表格中包含的年度審計綜合財務報表保持一致的基礎編制的，並且在管理層的意見中，包括所有正常經常性調整，以公平陳述我們的財務狀況、經營業績和現金流量。
2024年9月30日結束的九個月的結果未必代表截至2024年12月31日或其他未來時期的預期營業結果。
2023年2月，我們
營業收入 確認
公司根據以下五步模型確認營業收入：
| ● | 與客戶簽訂合同的辨別 | |
| 本步驟概述了與客戶簽訂供應貨物或服務的合同時必須滿足的標準。 | ||
| ● | 識別合同中的履約義務 | |
| 本步驟描述瞭如何處理合同中的獨立履約義務。 | ||
| ● | 確定交易價格 | |
| 這一步驟概述了建立交易價格時必須考慮的因素，即企業期望通過向客戶轉移商品或服務而收到的金額。 | ||
| ● | 在合同中將交易價格分配給履約義務的分配 | |
| 這一步驟概述了跨合同的各個履約義務分配交易價格的指導方針，也是客戶同意爲商品或服務支付的內容。 | ||
| ● | 識別出現時，公司履行履約義務時達到營業收入。 | |
| 當業務滿足每個履約義務時，營業收入可以被確認。這一步驟指明瞭應該如何發生。 |
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合同 服務
公司預計，未來大部分營業收入將來自於發現和變現新藥靶點以及知識產權，通過專注於分析豐富專有數據集的數據使用合作伙伴關係。變現的目標市場主要是尋求打造新藥靶點流水線的中型到大型生物製藥機構。第二營業渠道是與生物製藥公司和所有規模的其他組織合作的服務費合作伙伴關係，這些公司在整個藥物開發過程中分析數據面臨挑戰。公司利用公司的專有人工智能/機器學習平台爲客戶分析大型複雜數據集。該平台旨在預測感興趣的目標、模式、關係、異常以及疾病的分子驅動因素。公司認爲將會有伴侶方的額外工作請求；因此，服務模式採用主服務協議，發出用於在藥物研發的發現、臨床前或臨床階段執行的離散分析的工作或任務訂單。公司收取現金費用，有時還可能獲得分析生成的新知識產權的權利。一旦數據分析和分析報告完成，公司將分析結果交付給客戶，並在那個時間點確認收入。
重要會計政策
在公司審計的基本報表中討論的重要會計政策以及年度10-K表格中包括的附註中，沒有發生新的重大變化。
Impact of Recently Issued Accounting Standards
The Company has evaluated issued Accounting Standards Updates (“ASUs”) not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements.
3. 可轉換債券
八月 2021年筆記
2021年8月，公司與一家無關方簽訂了一項可轉換貸款協議，承諾最高額度爲$
2021年12月 2021年筆記
2021年12月，公司與一家無關聯方簽訂了一項貸款協議，貸款本金爲$, a 原始發行折扣率爲% ，利率爲 %。與公司於2023年2月IPO結束同時，根據其條款，該票據轉換爲 股普通股。轉換過程中未確認任何收益或損失。
可轉換 橋樑債券
2022年，公司從幾次發行可轉換橋式票據中獲得了約$
4. 可轉換債券 - 關聯方
安全 協議
2021年7月，公司與關聯方簽訂了未來股權簡易協議（SAFE），購買價格爲$
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八月 2021年筆記
2021年8月，公司與關聯方簽訂了一項可轉換貸款協議，金額爲$
5. 應付票據
2023年1月，公司與一家開空期票簽訂了一份，本金餘額爲$
2023年2月，公司達成協議，爲其董事和高管保險的部分保費提供融資。該協議規定融資額爲$
2024年2月，公司再次達成協議，爲其董事和高級管理人員保險的一部分保費提供融資。
該協議規定了對保費的融資金額爲$
6. 股東權益
優先股
普通股股份爲$的 授權發行$實值的優先股股份以及 被指定爲A系可轉換優先股。在A系可轉換優先股的授權股份中， 股份已發行並流通於2024年9月30日。每股A系可轉換優先股可隨時轉換爲 股公司普通股。A系優先股在經濟上等同於普通股，但沒有投票權，並受到
普通股
普通股股份爲$的 普通股授權數量爲$ 的面值.
2023年2月，公司完成了首次公開發行，出售了 單位（每個統稱爲一個「單位」）
以每單位$ 單位，共計約$
In connection with the completion of its IPO, the Company issued an aggregate of shares of common stock upon the conversion of certain outstanding convertible debt (see Note 3 and Note 4).
In
connection with the IPO, in February 2023, the Company
In
February 2023, the Company issued shares of common stock for consulting services and recognized $
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In
February 2024, the Company received approximately $
Dilutive securities are excluded from the diluted earnings per share calculation when their effect is anti-dilutive. As of September 30, 2024, shares of preferred stock, warrants and options for common shares were excluded from the calculation of net loss per share. As of September 30, 2023, shares of preferred stock, warrants and options for common shares were excluded from the calculation of net loss per share.
2022 Equity Incentive Plan
In November 2022, the Company’s Board of Directors adopted, and its shareholders approved, the 2022 Equity Incentive Plan (the “Plan”). The Plan provides for the granting of equity-based awards to employees, directors, and consultants. The Plan provides for equity-based awards including incentive stock options, non-qualified stock options, stock appreciation rights, performance share awards, cash awards and other equity-based awards. Awards are limited to a maximum term of years and any exercise prices shall not be less than 100% of the fair market value of one share of common stock on the grant date.
Stock Options
| Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | $ | |||||||||||||||
| Forfeited / canceled | ( | ) | $ | |||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||||||
| Vested at September 30, 2024 | $ | $ | ||||||||||||||
| Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2022 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | $ | |||||||||||||||
| Forfeited / canceled | $ | |||||||||||||||
| Outstanding at September 30, 2023 | $ | $ | ||||||||||||||
| Vested at September 30, 2023 | $ | $ | ||||||||||||||
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| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Expected dividend yield | % | % | ||||||
| Expected volatility | % - % | % - % | ||||||
| Risk-free interest rate | % - % | % - % | ||||||
| Expected life (in years) | - | - | ||||||
| ● | Dividend yield – The Company does not expect to pay a dividend in the foreseeable future. | |
| ● | Volatility – The trading volatility was determined by calculating the volatility of the Company’s peer group. | |
| ● | Risk-free interest rate – This is the U.S. Treasury rate, having a term comparable to the expected life of the stock option. | |
| ● | Expected life of options – The expected life of options granted to employees was determined using the simplified method. |
The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2024 and 2023 was $ and $, respectively.
During the three and nine months ended September 30, 2024, the Company recognized $ and $, respectively, of compensation expense related to stock options. During the three and nine months ended September 30, 2023, the Company recognized $ and $, respectively, of compensation expense related to stock options.
As of September 30, 2024, the total unrecognized compensation expense related to unvested stock options was approximately $, which the Company expects to recognize over a weighted-average period of approximately years.
Warrants
The following table provides details for the Company’s outstanding warrants as of September 30, 2024:
| Exercise Price | Expiration | Number of Warrants | ||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
Warrants Issued in Conjunction with Transactions
During the year ended December 31, 2023, the Company issued the following warrants as part of the Company’s February 2023 IPO:
| ● | ||
| ● |
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| ● | ||
| ● | ||
| ● | ||
| ● |
During the nine months ended September 30, 2024, the Company issued the following warrants as part of the Company’s secondary public offering:
| ● | ||
| ● |
pre-funded warrants with an exercise price of $ | |
| ● |
Warrants Issued as Consideration for Services
The following table summarizes the activity for warrants issued as consideration for services for the nine months ended September 30, 2024 and the year ended December 31, 2023:
| Number of Warrants | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2022 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | $ | |||||||||||||||
| Forfeited / canceled | $ | |||||||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Forfeited / canceled | $ | |||||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||||||
| Vested at September 30, 2024 | $ | $ | ||||||||||||||
During the three and nine months ended September 30, 2024, the Company recognized $ and $, respectively, of compensation expense related to certain warrants. During the three and nine months ended September 30, 2023, the Company recognized $ and $, respectively, of compensation expense related to certain warrants.
As of September 30, 2024, there was unrecognized compensation expense related to unvested warrants.
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7. Income Taxes
The Company has not recorded any tax provision or benefit for the nine months ended September 30, 2024 and 2023. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefits from deductible temporary differences, net operating loss carryforwards, and research and development credits are not more-likely-than-not to be realized at September 30, 2024 and December 31, 2023.
8. Material Agreements
JHU-APL Technology License
In
February 2018, the Company entered into an exclusive, world-wide, royalty-bearing license from JHU-APL. The license covers three (3)
issued patents, one (1) new provisional patent application, non-patent rights to proprietary libraries of algorithms and other trade
secrets, as well as modifications and improvements. In October 2021, the Company executed an amendment to the original license for improvements
and new advanced analytics capabilities. In consideration of the rights granted to the Company under the License Agreement, JHU received
a warrant equal to five percent (
In
May 2023, the Company and JHU-APL entered into Amendment number 1 of the July 2022 License Agreement whereby the Company gained access
to certain improvements including additional patents and knowhow in exchange for a series of payments totaling $
George Washington University - Beta2-spectrin siRNA License
In January 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from George Washington University (GWU) for rights to use siRNA targeting Beta2-spectrin in the treatment of human diseases, including hepatocellular carcinoma (HCC). The license covers methods claimed in three US and worldwide patent applications, and also includes use of this approach for treatment of obesity, non-alcoholic fatty liver disease, and non-alcoholic steatohepatitis.
In
consideration of the rights granted to the Company under the License Agreement, the Company paid GWU a $
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Johns Hopkins University – Mebendazole License
In February 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from Johns Hopkins University (JHU) for the use of an improved formulation of Mebendazole for the treatment of any human cancer or neoplastic disease. This formulation shows potent activity in animal models with different types of cancer and has been evaluated in a Phase I clinical trial in patients with high-grade glioma (NCT01729260). The trial, an open-label dose-escalation study, assessed the safety and efficacy of the improved formulation with adjuvant temozolomide in 24 patients with newly diagnosed gliomas. Investigators observed no dose-limiting toxicity in patients receiving all but the highest tested dose (200mg/kg/day). Four of the 15 patients receiving the maximum tested dose of 200mg/kg/day experienced dose-limiting toxicity, all of which were reversed by decreasing or eliminating the dose given. There were no serious adverse events attributed to Mebendazole at any dose during the trial. 41.7% of patients who received Mebendazole were alive at two years after enrollment, and 25% were alive at four years (Gallia et al., 2021).
The
license covers six (6) issued patents and one (1) pending application. In consideration of the rights granted to the Company under the
License Agreement, JHU will receive a staggered Upfront License Fee of $
Johns Hopkins University – Prodrug License
In
October 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from JHU and the Institute of Organic Chemistry
and Biochemistry (IOCB) of the Czech Academy of Sciences for rights to commercialize N-substituted prodrugs of Mebendazole that demonstrate
improved solubility and bioavailability. The license covers prodrug compositions and use for treating disease as claimed in multiple
US and worldwide patent applications. In consideration for the rights granted to the Company under the License Agreement, JHU and IOCB
will receive a staggered upfront license fee of $
9. Subsequent Events
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the unaudited condensed consolidated financial statements are issued.
Other than as disclosed in this Note 9 and as may be disclosed elsewhere in the notes to the accompanying unaudited condensed consolidated financial statements, there have been no subsequent events that require adjustment or disclosure in the accompanying unaudited condensed consolidated financial statements.
On
October 18, 2024, the Company entered into a securities purchase agreement with certain institutional investors (the “Purchasers”),
pursuant to which the Company agreed to issue to the Purchasers, in a registered direct offering, (i) shares of the Company’s
common stock (the “Shares”), par value $ per share (“Common Stock”), pre-funded warrants (the “Pre-Funded
Warrants”) to purchase up to
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Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations
References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, and (2) our consolidated financial statements, related notes and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 29, 2024. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Overview
Bullfrog AI Holdings, Inc. was incorporated in the State of Nevada in February 2020. Bullfrog AI Holdings, Inc. is the parent company of Bullfrog AI, Inc. and Bullfrog AI Management, LLC, which were incorporated in Delaware and Maryland, in 2017 and 2021, respectively. Operations are currently conducted through Bullfrog AI Holdings, Inc., which began operations on February 6, 2020. We are a company focused specifically on advanced Artificial Intelligence / Machine Learning (AI/ML) analysis of complex data in the advancement of medicine. Our founding AI/ML platform (trade name: bfLEAP™) was created from technology originally developed at The Johns Hopkins University Applied Physics Laboratory (JHU-APL). Subsequently, we have developed new tools and capabilities composed of an ensemble of machine learning and artificial intelligence models.
In February 2018, Bullfrog AI Holdings secured the original exclusive, worldwide, royalty-bearing license from JHU-APL. The license covers three (3) issued patents, one (1) new provisional patent application, non-patent rights to proprietary libraries of algorithms and other trade secrets including modifications and improvements. Our objective is to utilize our AI/ML platform with a precision medicine approach toward drug development with biopharmaceutical collaborators, as well as for our own internal clinical development programs. We believe the bfLEAP™ platform is ideally suited for evaluating pre-clinical and clinical trial data generated in translational research and clinical trial settings that lead to faster, less expensive drug approvals.
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Our aim is to improve the odds of success in each stage of developing medicine, ranging from early pre-clinical through late-stage clinical development. Our ultimate objective is to utilize bfLEAP™ to enable the success of ongoing clinical trials or rescue late-stage failed drugs (i.e., Phase 2 or Phase 3 clinical trial failures) for in-house development and divestiture; although, we also consider entering collaborations for earlier stage drugs.
In September 2020 and October 2021, the Company executed amendments to the original February 2018 license which represents improvements and new advanced analytics capabilities. In consideration of the rights granted to the Company under the original License Agreement, the Company granted JHU 178,571 warrants exercisable to purchase shares of common stock at $2.10 per share.
In July 2022, the Company entered into an exclusive, worldwide, royalty-bearing license from JHU-APL that provides additional intellectual property rights including patents, copyrights, and knowhow to be utilized under the Company’s bfLEAP™ analytical AI/ML platform. In consideration for the new license, the Company issued to JHU-APL 39,879 shares of common stock. Under the terms of the new License Agreement, JHU will be entitled to eight (8%) percent of net sales for the services provided by the Company to other parties and three (3%) percent for internally developed drug projects in which the JHU license was utilized. The new license also contains tiered sub licensing fees that start at fifty (50%) percent and reduce to twenty-five (25%) percent based on revenues. The Company and JHU-APL entered into Amendment number 1 of the July 2022 License Agreement whereby the Company gained access to certain improvements including additional patents and knowhow in exchange for a series of payments totaling $275,000. The first of these payments for $75,000 was paid in July 2023 and the remaining payments of $75,000, $75,000 and $50,000 are due in years 2025, 2026 and 2027, respectively. The amendment also reduced the 2023 minimum annual royalty payment to $60,000, all other financial terms remain the same. As a result of this Amendment, the minimum annual payments were $30,000 for 2022 and $60,000 for 2023, and the minimum annual payments will be $300,000 for 2024 and beyond, all of which are creditable by royalties. As of September 30, 2024, we have accrued $225,000 of the 2024 minimum annual royalty payments.
We intend to continue to evolve and improve bfLEAP™, either in-house or with development partners like JHU-APL. We plan to leverage our proprietary AI/ML platform, developed over several years at one of the top innovation institutions in the world which has already been successfully applied in multiple sectors.
We have staffed our business using funds from our initial public offering and have entered into partnerships and relationships and recently completed our first commercial service contract with a leading rare disease non-profit organization for AI/ML analysis of late-stage clinical data. We have also acquired the rights to a series of preclinical and early clinical drug assets from universities, as well as a strategic collaboration with a world-renowned research institution to create a HSV1 viral therapeutic platform to engineer immunotherapies for a variety of diseases. We have signed exclusive worldwide License Agreements with JHU for a cancer drug that targets glioblastoma (brain cancer), pancreatic cancer, and others. We have also signed an exclusive worldwide license from George Washington University for another cancer drug that targets hepatocellular carcinoma (liver cancer) and other liver diseases. In addition, we have signed three-year strategic data and commercialization agreements with the Lieber Institute for Brain Development (“LIBD”) whom we believe has a repository of the largest collection of postmortem brains in the world including molecular, clinical, and other data. The objective of this partnership is for the Company to analyze these rich data sets using its proprietary AI/ML tools and models and then go to market with the discoveries with the ultimate goal of securing revenue generating strategic partnership deals with biopharmaceutical companies. We intend to secure the rights to other proprietary data sets and repeat this strategy. Additionally, we intend to gain access to later-stage clinical assets through partnerships or the acquisition of rights to failed therapeutic candidates for drug rescue. In certain circumstances, we intend to conduct late-stage clinical trials in an effort to rescue therapeutic assets that previously failed. In these cases, there will be a requirement for drug supply and regulatory services to conduct clinical trials. The success of our clinical development programs will require finding partners to support the clinical development, adequate availability of raw materials and/or drug product for our R&D and clinical trials, and, in some cases, may also require establishment of third-party arrangements to obtain finished drug product that is manufactured appropriately under Good Manufacturing Practices, and packaged for clinical use or sale. Since we are a company focused on using our AI technology to advance medicines, any clinical development programs will also require, in all cases, partners and the establishment of third-party relationships for execution and completion of clinical trials.
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Since completing our IPO in February 2023, aided by the receipt of the IPO proceeds in addition to the proceeds from our February 2024 and October 2024 offerings, we have implemented several initiatives: investor relations and marketing to promote and raise awareness of the company in the financial and business sectors, research and development, collaboration with the J Craig Venter Institute and initiated preclinical studies with our in-licensed drug programs. The Company is actively engaged in developing and pursuing new intellectual property as it strives to continuously evolve its AI/ML platform.
Internally, the Company has added incremental staff to accelerate execution, and the development of processes and custom scripts for use in performing new drug target discovery and analytical services for customers, while also launching initiatives targeting large public health data sources and seeking access to proprietary health data sources, such as our agreement with the Lieber Institute for Brain Development. We also transitioned our accounting and financial reporting systems and processes to enhance our internal control environment as a public company. Capital from the IPO was also used to retire two notes that were sold to fund the Company through the IPO that did not convert into common stock as well as other debts accrued over time to our staff, employees and consultants as well as obligations related to the acquisition of our licensed drug programs.
The Company has had negative cash flows from operations and operated at a net loss since inception. In the first quarter of 2023, we completed our initial public offering (“IPO”). In February 2024, we received net proceeds of approximately $5.7 million from an underwritten secondary public offering of common stock and warrants. As of September 30, 2024, the Company has a cash balance of approximately $4.2 million. In October 2024, we received net proceeds of approximately $2.7 million from a registered direct offering of common stock and pre-funded warrants, and concurrent private placement of common stock warrants. In the absence of significant revenues in 2024 and 2025, the Company believes that its capital resources are sufficient to fund planned operations into the fourth quarter of 2025.
Accordingly, we will require additional capital to continue to execute our strategy. We anticipate raising this additional capital through various avenues including sales of equity securities, debt transactions, licensing agreements and collaborative arrangements. Although management believes that such funding sources will be available, there can be no assurance that any such arrangements will be consummated to provide sufficient capital when needed to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, among other things, we may be forced to delay, scale back or eliminate some or all our research and product development programs and/or our capital expenditures or to enter into arrangements on unfavorable terms. We currently do not have commitments for future funding from any source.
Our Strategy
The Company has a unique strategy designed to reduce risk and increase the frequency of cash flow. The first part of the strategy is to generate revenues through strategic relationships with biopharma companies. These relationships will be structured as a combination of fees and intellectual property based on the specific scope of the engagement. The objective of these engagements will be to uncover valuable insights to reduce the risk and/or increase the speed of the drug development process which can be achieved through manual or automated integration into the client’s workflow or analysis of discrete data sets.
In the future, the second part of our strategy involves acquiring the rights to drugs at various stages of development, using our proprietary AI/ML technology to advance the development and make discoveries, with the objective of creating near term value and then exiting and monetizing as quickly as possible, preferably within approximately 30 months.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no material changes to our critical accounting policies and estimates as those described in our Form 10-K for the fiscal year ended December 31, 2023.
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Financial Operations Overview
Revenue
While we generated our first revenues in late 2022 from our services provided to a pharmaceutical customer, we completed our first commercial service contract and recognized revenue in the amount of $65,000 in the third quarter of 2023. We did not generate any revenue during the nine months ended September 30, 2024.
Research and Development Costs and Expenses
Research and development expenses consist primarily of costs related to the acquisition of licensed technology, annual minimum royalty fees payable until commercialization, fees paid to external service providers and internal costs for personnel working on research and development activities, including work on our proprietary platform which utilizes bfLEAP™ and an ensemble of AI/ML tools and models.
Research and development costs are expensed as incurred. Estimates are used in determining the expense liability of certain costs where services have been performed but not yet invoiced.
We anticipate our research and development costs continuing to increase as we execute on our business plan and begin conducting preclinical research and development activities directed at securing development partners and filing an Investigational New Drug application for our licensed drug development programs described in this filing, as well as under strategic partnerships and for other drug development programs we may pursue. Further, we anticipate our research and development costs will increase as we add additional staff and perform analytical work aimed at target discovery on proprietary data sets through our partnering efforts as well as with prospective customers.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel related costs, including non-cash stock-based compensation, as well as accounting and consulting services, insurance expense, and legal fees relating to corporate matters. We anticipate that our general and administrative expenses will increase in the future to support our target discovery efforts, service offerings, and clinical and pre-clinical research and development activities associated with strategic partnering and collaborations.
Results of Operations - Comparison of Three Months Ended September 30, 2024 and 2023
| September 30, | Net Change | |||||||||||
| 2024 | 2023 | |||||||||||
| Operating expenses: | ||||||||||||
| Research and development | $ | 566,584 | $ | 380,015 | $ | 186,569 | ||||||
| General and administrative | 1,253,357 | 983,929 | 269,428 | |||||||||
| Total operating expenses | $ | 1,819,941 | $ | 1,363,944 | $ | 455,997 | ||||||
Research and Development
Our research and development expenses for the three months ended September 30, 2024 increased, compared to the same period ended September 30, 2023, primarily due to increased personnel costs related to the hiring of several additional technical staff as well as our Chief Science Officer. In addition, in the first quarter of 2024, we engaged disease experts as area consultants, we expanded our target discovery efforts, and we also initiated a preclinical obesity study related to siRNA program. We expect our R&D expenses to increase as we begin the validation process on potential targets identified in our target discovery program.
General and Administrative
Our general and administrative expenses for the three months ended September 30, 2024 increased, compared to the same period ended September 30, 2023, primarily due to increased personnel costs related to the hiring of several additional staff, as well as associated increases in equity compensation costs and recruiting fees as we work to expand our technical staff and capabilities.
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Other Income (Expense), Net
Interest income generated from cash held in an overnight sweep account increased by $4,531 for the three months ended September 30, 2024, compared to the same period ended September 30, 2023.
Results of Operations - Comparison of Nine Months Ended September 30, 2024 and 2023
| September 30, | Net Change | |||||||||||
| 2024 | 2023 | |||||||||||
| Operating expenses: | ||||||||||||
| Research and development | $ | 1,632,409 | $ | 1,023,619 | $ | 608,790 | ||||||
| General and administrative | 3,835,213 | 3,067,940 | 767,273 | |||||||||
| Total operating expenses | $ | 5,467,622 | $ | 4,091,559 | $ | 1,376,063 | ||||||
Research and Development
Our research and development expenses for the nine months ended September 30, 2024 increased, compared to the same period ended September 30, 2023, primarily due to increased personnel costs related to the hiring of several additional technical staff as well as our Chief Science Officer. In addition, in the first quarter of 2024, we engaged disease experts as area consultants, we expanded our target discovery efforts, and we also initiated a preclinical obesity study related to siRNA program. We expect our R&D expenses to increase as we begin the validation process on potential targets identified in our target discovery program.
General and Administrative
Our general and administrative expenses for the nine months ended September 30, 2024 increased, compared to the same period ended September 30, 2023, primarily due to increased personnel costs related to the hiring of several additional staff, as well as associated increases in equity compensation costs and recruiting fees as we work to expand our technical staff and capabilities.
Other Income (Expense), Net
Interest expense decreased $60,730 for the nine months ended September 30, 2024, compared to the same period ended September 30, 2023, due to the majority of our debt converting or being paid off in the first quarter of 2023. Interest income generated from cash held in an overnight sweep account increased by $62,193 for the nine months ended September 30, 2024, compared to the same period ended September 30, 2023, due to an increase in our average cash balances.
Results of Operations
Liquidity and Capital Resources
In 2022, the Company received net proceeds from the sale of Convertible Bridge Notes of approximately $1,016,000 and repaid unsecured promissory notes sold in 2021 in the amount of $49,000. The Company sold one additional promissory note and received net proceeds of $100,000 in January 2023.
Through September 30, 2024, the Company has an accumulated deficit of approximately $15.1 million and has funded its operations through the sale of common stock and debt. We anticipate that our expenses will increase in the future to support our target discovery activities, service offerings, clinical and pre-clinical research and development activities associated with strategic partnering and collaborations, as well as acquired product candidates and the increased costs of operating as a public company.
The Company’s current entities include Bullfrog AI, Inc. and Bullfrog Management, LLC, which are wholly owned subsidiaries of Bullfrog AI Holdings, Inc., which is a holding company that depends upon the sale of its securities and cash generated through its subsidiaries to fund consolidated operations.
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On February 16, 2023, the Company completed its IPO of 1,297,318 units (each, a “Unit,” collectively, the “Units”) at a price of $6.50 per unit for a total of approximately $8.4 million of gross proceeds to the Company. Each Unit consists of one share of the Company’s common stock, one tradeable warrant (each, a “Tradeable Warrant,” collectively, the “Tradeable Warrants”) to purchase one share of common stock at an exercise price of $7.80 per share, and one non-tradeable warrant (each, a “Non-tradeable Warrant,” collectively, the “Non-tradeable Warrants”; together with the Tradeable Warrants, each, a “Warrant,” collectively, the “Warrants”) to purchase one share of the Company’s common stock at an exercise price of $8.125. In connection with the IPO, the Company also completed a 1-for-7 reverse stock split of our common stock.
In connection with the IPO, a SAFE and convertible loan agreement held by a related party converted into 55,787 shares of common stock. Additionally, all outstanding convertible bridge notes and accrued interest through November 30, 2022 were converted into 276,289 shares of common stock and 276,289 warrants to purchase common stock and were issued to the Convertible Bridge Note holders at conversion. The convertible bridge note conversions and the warrant exercise pricing were determined using a $25 million company valuation immediately before the IPO.
In April 2023, the holders of warrants exercised 436,533 warrants for common stock at various exercise prices and the Company received proceeds of approximately $1,495,000.
In February 2024, we completed an underwritten secondary offering of common stock and warrants generating approximately $5.7 million of net proceeds.
In the first quarter of 2024, holders exercised warrants (including prefunded warrants from the secondary offering) to purchase 508,814 shares of common stock generating proceeds of approximately $106,000.
In October 2024, we completed a registered direct offering of common stock and pre-funded warrants, and concurrent private placement of common stock warrants generating approximately $2.7 million of net proceeds.
In the absence of significant revenues in 2024 and 2025, management believes the Company’s capital resources are sufficient to fund planned operations into the fourth quarter of 2025. Accordingly, we will seek additional capital to continue to execute our strategy as discussed above.
Consolidated Cash Flow Data
| Nine Months Ended September 30, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Net cash (used in) provided by | ||||||||||||
| Operating activities | $ | (4,338,214 | ) | $ | (4,983,282 | ) | $ | 645,068 | ||||
| Investing activities | - | - | - | |||||||||
| Financing activities | 5,952,472 | 8,781,649 | (2,829,177 | ) | ||||||||
| Net increase in cash and cash equivalents | $ | 1,614,258 | $ | 3,798,367 | $ | (2,184,109 | ) | |||||
Cash Flows Used in Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2024 decreased compared to the same period ended September 30, 2023 primarily due to paying down payables and accrued expenses for technology access, consultants, and compensation in 2023, partially offset by increased operating costs in 2024.
Cash Flows Used in Investing Activities
There was no cash used in investing activities during the nine months ended September 30, 2024 or 2023.
Cash Flows Provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 decreased compared to the same period ended September 30, 2023 primarily due to proceeds from our Initial Public Offering in February 2023 exceeding the proceeds from our secondary offering in February 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, this disclosure is not required.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. We conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the reporting period covered in this Quarterly Report on Form 10-Q, as a result of the material weaknesses in our internal control over financial reporting described below. Notwithstanding the identified material weaknesses, our management has concluded that the unaudited condensed consolidated financial statements in this quarterly filing on Form 10-Q, and the audited consolidated financial statements contained in our Form 10-K for the year ended December 31, 2023, fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented in conformity with GAAP.
Changes in Internal Control Over Financial Reporting
Management has identified material weaknesses in its internal controls over financial reporting at December 31, 2023. Specifically, Management noted the Company did not properly document, implement or operate a system of effective internal controls over financial reporting.
Ongoing Remediation Efforts
Management is in the process of implementing improvements to its internal controls over financial reporting. Namely the Company has and is continuing to:
| ● | transitioned its day-to-day accounting processes to a new external firm including automating its vendor payments; | |
| ● | initiated the transfer of the overall accounting process to an enterprise type accounting platform; | |
| ● | periodically review the design and effectiveness of our controls including the creation of an annual risk assessment and ongoing monitoring activities; and | |
| ● | evaluate all internal and external resources to ensure they are appropriate for the level and complexity of our current operations. This includes the recent hiring of a Corporate Controller. |
While we believe that these efforts will improve our internal control over financial reporting, the implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We cannot assure you that the measures we have taken to date, or that we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.
PART II. OTHER INFORMATION
Item 1 Legal Proceedings.
To our best knowledge, we are currently not a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.
Item 1A Risk Factors.
Smaller reporting companies are not required to provide the information required by this item.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds.
There were no unregistered sales of equity securities during the nine months ended September 30, 2024.
Item 3 Defaults Upon Senior Securities.
None.
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Item 4 Mine Safety Disclosures.
Not applicable.
Item 5 Other Information.
(c) Insider Trading Arrangements
Trading Plans
On
No
other directors or executive officers of the Company
Item 6. EXHIBITS
Exhibit No. |
Description | |
| 31.1 * | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
| 31.2 * | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
| 32.1 * | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 * | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS * | Inline XBRL Instance Document. | |
| 101.SCH * | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL * | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF * | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB * | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included in Exhibit 101). |
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| Bullfrog AI Holdings, Inc. | |||
| Date: November 8, 2024 | By: | /s/ Vininder Singh | |
| Vininder Singh | |||
| Chief Executive Officer | |||
| Date: November 8, 2024 | By: | /s/ Dane Saglio | |
| Dane Saglio | |||
| Chief Financial Officer |
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