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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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


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

		For the quarterly period ended June 30, 2020

~~For the quarterly period ended March 31, 2020~~

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


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

		For the transition period from __________________ to __________________

~~For the transition period from __________________ to __________________~~

Commission File Number: 001-38045

Neurotrope, Inc.

(Exact name of registrant as specified in its charter)

Nevada	46-3522381
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1185 Avenue of the Americas, 3rd Floor


Nevada	46-3522381
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer

1185 Avenue of the Americas, 3^rd Floor	Identification No.)
New York, New York	(Zip code)
(Address of principal executive offices)	10036

~~New York, New York 10036~~

(973) 242-0005

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share Preferred Stock Purchase Rights		NTRP		The Nasdaq Stock Market The Nasdaq Stock 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 x 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 x No ¨


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	NTRP	The Nasdaq Stock Market
Preferred Stock Purchase Rights		The Nasdaq Stock Market

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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 x☒ Non-accelerated filer ¨◻ Smaller reporting company x☒ 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~~If an emerging growth company, indicate by check mark ~~whether~~if the registrant is ahas ~~shell~~elected ~~company~~not ~~(as~~to ~~defined~~use inthe ~~Rule~~extended ~~12b-2~~transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). ~~Yes ¨ No x~~◻

AsIndicate ofby ~~June~~check ~~10,~~mark ~~2020,~~whether ~~there~~the ~~were 23,674,089~~registrant ~~shares~~is ofa ~~the~~shell ~~registrant’s~~company ~~common~~(as ~~stock,~~defined ~~$0.0001~~in ~~par~~Rule 12b-2 ~~value~~of ~~per~~the ~~share,~~Exchange ~~issued~~Act) ~~and outstanding.~~Yes ☐ No ☒

~~EXPLANATORY~~As ~~NOTE~~of August 5, 2020, there were 23,777,539 shares of the registrant’s common stock, $0.0001 par value per share, issued and outstanding.

Due to the outbreak of the novel strain of the coronavirus, on May 11, 2020, Neurotrope, Inc. (the “Company”) filed a Current Report on Form 8-K to avail itself of an extension to file this Quarterly Report on Form 10-Q, originally due on May 11, 2020, relying on an order issued by the Securities and Exchange Commission on March 25, 2020 pursuant to Section 36 of the Securities Exchange Act of 1934, as amended (Release No. 34-88465) (the “Order”) regarding exemptions granted to certain public companies. The Company has a small accounting staff all currently working from home. As a result, given that the Company is an accelerated filer with more limited staff in-person interaction, meeting the timeline for filing became more difficult. The Company is therefore relying on the Order in connection with the filing of this Quarterly Report on Form 10-Q.

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, ~~our~~the ~~inability~~risk that the conditions to ~~identify~~the ~~potential~~closing ~~strategic~~of the merger with Metuchen Pharmaceuticals LLC contemplated by the merger agreement are not satisfied, including the failure to obtain stockholder approval for the transactions ~~and~~in a timely manner or at all, uncertainties as to ~~complete~~the ~~any~~timing ~~transaction~~of ~~we pursue~~the consummation of the mergers and the spin-off of Neurotrope's wholly-owned subsidiary, Neurotrope Bioscience, Inc., and our ~~inability~~ability to ~~obtain~~consummate ~~adequate~~the ~~financing~~transactions, the significant length of time associated with drug development and related insufficient cash flows and resulting illiquidity, our patent portfolio, our inability to expand our business, significant government regulation of pharmaceuticals and the healthcare industry, lack of product diversification, availability of our raw materials, existing or increased competition, stock volatility and illiquidity, and the our failure to implement our business plans or strategies. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”). We advise you to carefully review the reports and documents we file from time to time with the SEC, particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to publicly release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER INFORMATION

When used in this report, the terms, “we,” the “Company,” “our,” and “us” refer to Neurotrope, Inc., a Nevada corporation (formerly BlueFlash Communications, Inc., a Florida corporation) and its consolidated subsidiary Neurotrope Bioscience, Inc. (“Neurotrope Bioscience”).

Table of Contents

TABLE OF CONTENTS

		Page
Part I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)		4
Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019		4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019		5
Condensed Consolidated Statement of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019		6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019		7
Notes to Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures about Market Risk		25
Item 4. Controls and Procedures		25
Part II – OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 1A. Risk Factors		27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults upon Senior Securities		28
Item 4. Mine Safety Disclosures		28
Item 5. Other Information		28
Item 6. Exhibits		28
Signatures		29


		Page

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)		4

Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019		4

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019		5

Condensed Consolidated Statement of Changes in Shareholders’ Equity for the three and six months ended June 30, 2020 and 2019		6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019		8

Notes to Condensed Consolidated Financial Statements		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3. Quantitative and Qualitative Disclosures about Market Risk		29

Item 4. Controls and Procedures		29

Part II – OTHER INFORMATION

Item 1. Legal Proceedings		30

Item 1A. Risk Factors		30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31

Item 3. Defaults upon Senior Securities		31

Item 4. Mine Safety Disclosures		31

Item 5. Other Information		31

Item 6. Exhibits		32

Signatures		34

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

Neurotrope, Inc and Subsidiary

Condensed Consolidated Balance Sheets

(Unaudited)

ASSETS
	March 31,			December 31,
	2020			2019
CURRENT ASSETS
Cash and cash equivalents	$	32,160,754		$	17,382,038
Prepaid expenses		338,766			494,112
TOTAL CURRENT ASSETS		32,499,520			17,876,150
Fixed assets, net of accumulated depreciation		23,099			21,671
TOTAL ASSETS	$	32,522,619		$	17,897,821
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	266,822		$	413,081
Accrued expenses		80,642			65,975
TOTAL CURRENT LIABILITIES		347,464			479,056
Commitments and contingencies
SHAREHOLDERS' EQUITY
Convertible preferred stock - 100,000 shares authorized, $0.0001 par value;
4,998 shares issued and outstanding as of March 31, 2020,
0 shares issued and outstanding as of December 31, 2019
Liquidation preference of $2,483,606 and $0 as of
March 31, 2020 and December 31, 2019, respectively.		1			-
Common stock - 150,000,000 shares authorized, $0.0001 par value;
20,948,330 shares issued and outstanding as of March 31, 2020;
13,068,023 shares issued and outstanding as of December 31, 2019;		2,096			1,307
Additional paid-in capital		123,527,245			106,234,301
Accumulated deficit		(91,354,187	)		(88,816,843	)
TOTAL SHAREHOLDERS' EQUITY		32,175,155			17,418,765
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	32,522,619		$	17,897,821

See accompanying notes to condensed consolidated financial statements.


	June 30,		December 31,
	2020		2019

CURRENT ASSETS
Cash and cash equivalents	$	30,251,180	$	17,382,038
Prepaid expenses		589,559		494,112

TOTAL CURRENT ASSETS		30,840,739		17,876,150

Fixed assets, net of accumulated depreciation		24,677		21,671

TOTAL ASSETS	$	30,865,416	$	17,897,821

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	967,632	$	413,081
Accrued expenses		99,946		65,975

TOTAL CURRENT LIABILITIES		1,067,578		479,056

Commitments and contingencies

SHAREHOLDERS’ EQUITY
Convertible preferred stock - 100,000 shares authorized, $0.0001 par value; 500 shares issued and outstanding as of June 30, 2020, 0 shares issued and outstanding as of December 31, 2019 Liquidation preference of $500,000 and $0 as of June 30, 2020 and December 31, 2019, respectively.		1		—
Common stock - 150,000,000 shares authorized, $0.0001 par value; 23,674,089 shares issued and outstanding as of June 30,2020; 13,068,023 shares issued and outstanding as of December 31, 2019;		2,368		1,307
Additional paid-in capital		124,081,782		106,234,301
Accumulated deficit		(94,286,313)		(88,816,843)

TOTAL SHAREHOLDERS’ EQUITY		29,797,838		17,418,765

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	30,865,416	$	17,897,821

~~Neurotrope,~~See ~~Inc.~~accompanying ~~and~~notes ~~Subsidiary~~to condensed consolidated financial statements.

~~Condensed Consolidated Statements of Operations~~

~~(Unaudited)~~4

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2020			2019
OPERATING EXPENSES:
Research and development		156,047			1,861,293
General and administrative - related party		7,361			12,500
General and administrative		1,787,987			1,328,500
Stock-based compensation - related party		21,001			78,289
Stock-based compensation		635,815			1,515,475
TOTAL OPERATING EXPENSES		2,608,211			4,796,057
OTHER INCOME (EXPENSE):
Interest income		70,867			106,899
Net loss before income taxes		2,537,344			4,689,158
Provision for income taxes		-			-
Net loss	$	2,537,344		$	4,689,158
PER SHARE DATA:
Basic and diluted loss per common share	$	(0.14	)	$	(0.36	)
Basic and diluted weighted average common shares outstanding		18,228,800			12,922,400

Table of Contents

~~See~~Neurotrope, Inc. ~~accompanying~~and ~~notes to condensed consolidated financial statements.~~Subsidiary

5Condensed Consolidated Statements of Operations

~~Neurotrope, Inc. and Subsidiary~~(Unaudited)

~~Condensed Consolidated Statement of Changes in Shareholders’ Equity~~

(Unaudited)


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2020		2019		2020		2019

OPERATING EXPENSES:
Research and development	$	438,423	$	1,566,441	$	594,470	$	3,427,734
General and administrative - related party		—		12,500		7,361		25,000
General and administrative		2,165,064		1,705,391		3,953,051		3,033,891
Stock-based compensation - related party		—		47,177		21,001		125,466
Stock-based compensation		404,280		780,519		1,040,095		2,295,994

TOTAL OPERATING EXPENSES		3,007,767		4,112,028		5,615,978		8,908,085

OTHER INCOME (EXPENSE):
Interest income		75,641		104,562		146,508		211,461

Net loss before income taxes		2,932,126		4,007,466		5,469,470		8,696,624

Provision for income taxes		—		—		—		—

Net loss	$	2,932,126	$	4,007,466	$	5,469,470	$	8,696,624

PER SHARE DATA:

Basic and diluted loss per common share	$	0.13	$	0.31	$	0.27	$	0.67

Basic and diluted weighted average common shares outstanding		22,095,600		12,940,100		20,155,900		12,931,200

	Three Months Ended March 31, 2019
											Additional
	Common Stock				Preferred Stock						Paid-In			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance January 1, 2019		12,922,370	$	1,292	$	-		$	-		$	100,202,110		$	(73,682,093	)	$	26,521,309
Stock based compensation		-		-		-			-			1,593,764			-			1,593,764
Issuance of warrants for consulting fees		-		-		-			-			-			-			-
Sale of preferred stock and warrants		-		-		-			-			-			-			-
Conversion of preferred stock to common stock		-		-		-			-			-			-			-
Net loss		-		-		-			-			-			(4,689,158	)		(4,689,158	)
Balance March 31, 2019		12,922,370	$	1,292		-		$	-		$	101,795,874		$	(78,371,251	)	$	23,425,915
	Three Months Ended March 31, 2020
											Additional
	Common Stock				Preferred Stock						Paid-In			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance January 1, 2020		13,068,023	$	1,307		-		$	-		$	106,234,301		$	(88,816,843	)	$	17,418,765
Stock based compensation		-		-		-			-			656,816			-		$	656,816
Issuance of warrants for consulting fees		-		-		-			-			116,930			-			116,930
Sale of preferred stock and warrants		-		-		18,000			2			16,519,986			-			16,519,988
Conversion of preferred stock to common stock		7,880,307		789		(13,002	)		(1	)		(788	)		-			-
Net loss		-		-		-			-			-			(2,537,344	)		(2,537,344	)
Balance March 31, 2020		20,948,330	$	2,096		4,998		$	1		$	123,527,245		$	(91,354,187	)	$	32,175,155

See accompanying notes to condensed consolidated financial statements.

~~Neurotrope, Inc. and Subsidiary~~5

~~Condensed~~Table ~~Consolidated Statements~~ of ~~Cash~~ ~~Flows~~Contents

~~(Unaudited)~~Neurotrope, Inc. and Subsidiary

	Three Months Ended			Three Months Ended
	March 31, 2020			March 31, 2019
CASH FLOW USED IN OPERATING ACTIVITIES
Net loss	$	(2,537,344	)	$	(4,689,158	)
Adjustments to reconcile net loss to net cash used by operating activities
Stock based compensation		656,816			1,593,764
Consulting services paid by issuance of common stock warrants		116,930			-
Depreciation expense		1,171			897
Change in assets and liabilities
Decrease in prepaid expenses		155,346			176,739
(Decrease) in accounts payable		(146,259	)		(1,901,107	)
Increase in accrued expenses		14,667			2,244
Total adjustments		798,671			(127,463	)
Net Cash Used in Operating Activities		(1,738,673	)		(4,816,621	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of fixed assets		(2,599	)		(5,214	)
Net Cash Used in Investing Activities		(2,599	)		(5,214	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of preferred stock and warrants		16,519,988			-
Net Cash Provided by Financing Activities		16,519,988			-
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		14,778,716			(4,821,835	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		17,382,038			28,854,218
CASH AND EQUIVALENTS AT END OF PERIOD	$	32,160,754		$	24,032,383

Condensed Consolidated Statement of Changes in Shareholders’ Equity

~~See accompanying notes to condensed consolidated financial statements.~~(Unaudited)

NEUROTROPE, INC. AND SUBSIDIARY


	Three Months Ended June 30, 2019
								Additional
	Common Stock			Preferred Stock				Paid-In		Accumulated
	Shares	Amount		Shares		Amount		Capital		Deficit		Total

Balance April 1, 2019	12,922,370	$	1,292	$	—	$	—	$	101,795,874	$	(78,371,251)	$	23,425,915

Issuance of common stock for consulting fees	49,579		5		—		—		352,743		—		352,743

Issuance of warrants for consulting fees	—		—		—		—		577,092		—		577,092

Exercise of common stock warrants	11,000		1		—		—		48,069		—		48,070

Stock based compensation	—		—		—		—		827,696		—		827,696

Net loss	—		—		—		—		—		(4,007,466)		(4,007,466)

Balance June 30, 2019	12,982,949	$	1,298		—	$	—	$	103,601,474	$	(82,378,717)	$	21,224,050

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

(UNAUDITED)


	Six Months Ended June 30, 2019
								Additional
	Common Stock				Preferred Stock			Paid-In		Accumulated
	Shares	Amount		Shares		Amount		Capital		Deficit		Total

Balance January 1, 2019	12,922,370	$	1,292	$	—	$	—	$	100,202,110	$	(73,682,093)	$	26,521,309

Issuance of common stock for consulting fees	49,579		5		—		—		352,743		—		352,748

Issuance of warrants for consulting fees	—		—		—		—		577,092		—		577,092

Exercise of common stock warrants	11,000		1		—		—		48,069		—		48,070

Stock based compensation	—		—		—		—		2,421,460		—		2,421,460

Net loss	—		—		—		—		—		(8,696,624)		(8,696,624)

Balance June 30, 2019	12,982,949	$	1,298		—	$	—	$	103,601,474	$	(82,378,717)	$	21,224,055

~~Note 1 – Organization, Nature of Business, and Liquidity:~~

~~Organization & Business~~6

~~Neurotrope~~Table ~~Bioscience was incorporated in Delaware on October 31, 2012. Neurotrope Bioscience was formed to advance new therapeutic and diagnostic technologies in the field~~ of neurodegenerative disease, primarily Alzheimer’s disease (“AD”). Neurotrope Bioscience is collaborating with Cognitive Research Enterprises, Inc. (formerly known as the Blanchette Rockefeller Neurosciences Institute, or BRNI) (“CRE”), a related party, in this process. The exclusive rights to certain technology were licensed by CRE to the Company on February 28, 2013 (see Note 4, “Related Party Transactions and Licensing / Research Agreements”).Contents

On September 9, 2019, the Company issued a press release announcing that the confirmatory Phase 2 study of Bryostatin-1 in moderate to severe AD patients did not achieve statistical significance on the primary endpoint, which was change from baseline to Week 13 in the Severe Impairment Battery (“SIB”) total score. An average increase in SIB total score of 1.3 points and 2.1 points was observed for the Bryostatin-1 and placebo groups, respectively, at Week 13. There were multiple secondary outcome measures in this trial, including the changes from baseline at Weeks 5, 9 and 15 in the SIB total score. No statistically significant difference was observed in the change from baseline in SIB total score between the Bryostatin-1 and placebo treatment groups. On January 22, 2020, the Company announced the completion of an additional analysis in connection with the confirmatory Phase 2 study, which examined moderately severe to severe AD patients treated with byrostatin-1 in the absence of memantine. To adjust for the baseline imbalance observed in the study, a post-hoc analysis was conducted using paired data for individual patients, with each patient as his/her own control. For the pre-specified moderate stratum (i.e., MMSE-2 baseline scores 10-15), the baseline value and the week 13 value were used, resulting in pairs of observations for each patient. The changes from baseline for each patient were calculated and a paired t-test was used to compare the mean change from baseline to week 13 for each patient. A total of 65 patients had both baseline and week 13 values, from which there were 32 patients in the Bryostatin-1 treatment group and 33 patients in the placebo group. There was a statistically significant improvement over baseline (4.8 points) in the mean SIB at week 13 for subjects in the Bryostatin-1 treatment group (32 subjects), paired t-test p < 0.0076, 2-tailed. In the placebo group (33 subjects), there was also a statistically significant increase from baseline in the mean SIB at week 13, for paired t-test p < 0.0144, consistent with the placebo effect seen in the overall 203 study. Although there was a signal of Bryostatin-1’s benefit for the moderately severe stratum, the difference between the Bryostatin-1 and placebo treatment groups was not statistically significant (p=0.2727). The Company, while proceeding with its next Phase 2 clinical trial, is determining how to proceed with respect to its development programs for Bryostatin-1.


	Three Months Ended June 30, 2020
								Additional
	Common Stock				Preferred Stock			Paid-In		Accumulated
	Shares	Amount		Shares		Amount		Capital		Deficit		Total

Balance April 1, 2020	20,948,330	$	2,096	$	4,998	$	1	$	123,527,245	$	(91,354,187)	$	32,175,155

Stock based compensation	—		—		—		—		404,280		—		404,280

Issuance of warrants for consulting fees	—		—		—		—		150,529		—		150,529

Sale of preferred stock and warrants	—		—		—		—		—		—		—

Conversion of preferred stock to common stock	2,725,759		272		(4,498)		—		(272)		—		(0)

Net loss	—		—		—		—		—		(2,932,126)		(2,932,126)

Balance June 30, 2020	23,674,089	$	2,368		500	$	1	$	124,081,782	$	(94,286,313)	$	29,797,838

On October 8, 2019, following the Company’s announcement of top-line results from its Phase 2 study of Bryostatin-1 in moderate to severe AD, the Company announced its plans to explore strategic alternatives to maximize shareholder value. The Company’s Board of Directors (the “Board”) has formed a strategic alternatives committee to aid in evaluating its alternatives, including, but not necessarily limited to, collaborations or merger and acquisition transactions (see Note 9, “Subsequent Events - Planned Merger and Spin-Off”.)

Liquidity


	Six Months Ended June 30, 2020
								Additional
	Common Stock				Preferred Stock			Paid-In		Accumulated
	Shares	Amount		Shares		Amount		Capital		Deficit		Total

Balance January 1, 2020	13,068,023	$	1,307		—	$	—	$	106,234,301	$	(88,816,843)	$	17,418,765

Stock based compensation	—		—		—		—		1,061,096		—	$	1,061,096

Issuance of warrants for consulting fees	—		—		—		—		267,459		—		267,459

Sale of preferred stock and warrants	—		—		18,000		2		16,519,986		—		16,519,988

Conversion of preferred stock to common stock	10,606,066		1,061		(17,500)		(1)		(1,060)		—		—

Net loss	—		—		—		—		—		(5,469,470)		(5,469,470)

Balance June 30, 2020	23,674,089	$	2,368		500	$	1	$	124,081,782	$	(94,286,313)	$	29,797,838

As of March 31, 2020, the Company had approximately $32.2 million in cash and cash equivalents as compared to $17.4 million at December 31, 2019. The increase in cash is attributable to the Company’s issuance of preferred stock and warrants pursuant to a registered direct offering in January 2020 (see Note 6, “Common Stock”) partially offset by cash used for operating activities during the 2020 period. The Company expects that its current cash and cash equivalents will be sufficient to support its projected operating requirements over at least the next 12 months from the Form 10-Q filing date, which will include the continuing development of bryostatin, our novel drug targeting the activation of PKC epsilon, and which projected operating requirements do not take into account the completion of the planned merger or spin-off.

8See accompanying notes to condensed consolidated financial statements.

The future course of the Company’s operations and research and development activities will be contingent upon the further analysis of results from its recently completed trial mentioned herein as well as the Company’s current plans regarding the strategic alternative disclosed in Note 9, “Subsequent Events - Planned Merger and Spin-Off”.

Any additional equity financing, if available, may not be on favorable terms and would likely be significantly dilutive to the Company’s current stockholders and debt financing, if available, may involve restrictive covenants. If the Company is able to access funds through collaborative or licensing arrangements, it may be required to relinquish rights to some of its technologies or product candidates that the Company would otherwise seek to develop or commercialize on its own, on terms that are not favorable to the Company. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm its business, financial condition and results of operations.7

~~National~~Table ~~Institutes~~ of ~~Health Award~~Contents

~~On January 22~~Neurotrope, ~~2020, the Company announced the approval of a $2~~ Inc.7 million award from the National Institutes of Health to support an additional Phase 2 clinical study focused on the moderate stratum for which the Company saw improvement in the 203 study. The grant provides for funds in the first year of approximately $1.0 million and funding in year two of approximately $1.7 million subject to satisfactory progress of the project. The Company is planning to meet with the Food and Drug Administration to present the totality of the clinical data for Bryostatin-1. On May 28, 2020, Neurotrope Bioscience entered into a non-binding letter of intent with WCT pursuant to which the parties agreed to negotiate a definitive agreement for the provision of clinical trial development services by WCT in connection with a proposed Phase 2 study assessing safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment.Subsidiary

~~Basis~~Condensed Consolidated Statements of ~~Presentation~~Cash Flows

~~The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States~~ (~~“GAAP”~~Unaudited) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company's financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2020 may not be indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2019 included in our Annual Report on Form 10-K.

~~Note 2 – Summary of Significant Accounting Policies:~~

Use of Estimates:


	Six Months Ended		Six Months Ended
	June 30, 2020		June 30, 2019
CASH FLOW USED IN OPERATING ACTIVITIES
Net loss	$	(5,469,470)	$	(8,696,624)
Adjustments to reconcile net loss to net cash used by operating activities
Stock based compensation		1,061,096		2,421,460
Consulting services paid by issuance of common stock		—		352,748
Consulting services paid by issuance of common stock warrants		267,459		577,092
Depreciation expense		2,407		1,793
Change in assets and liabilities
Decrease in prepaid expenses		(95,447)		(193,210)
Increase (decrease) in accounts payable		554,551		(2,102,817)
Increase (decrease) in accrued expenses		33,971		(1,999)
Total adjustments		1,824,037		1,055,067

Net Cash Used in Operating Activities		(3,645,433)		(7,641,557)

CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of fixed assets		(5,413)		(5,214)

Net Cash Used in Investing Activities		(5,413)		(5,214)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from exercise of common stock warrants		—		48,070
Net proceeds from issuance of preferred stock and warrants		16,519,988		—

Net Cash Provided by Financing Activities		16,519,988		48,070

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		12,869,142		(7,598,701)

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		17,382,038		28,854,218

CASH AND EQUIVALENTS AT END OF PERIOD	$	30,251,180	$	21,255,517

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make significant estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Cash~~See ~~and~~accompanying ~~Cash~~notes ~~Equivalents~~to ~~and~~condensed ~~Concentration of~~consolidated ~~Credit~~financial ~~Risk:~~statements.

The Company considers all highly liquid cash investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2020, the Company’s cash balances that exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”) were approximately $2.6 million. In addition, approximately $29.6 million included in cash and cash equivalents were invested in a money market fund, which is not insured under the FDIC. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash.

~~Fixed~~Table ~~Assets:~~of Contents

~~Fixed assets are stated at cost less accumulated depreciation~~NEUROTROPE, INC. ~~Depreciation~~AND ~~is computed on a straight line basis over the estimated useful life of the asset, which is deemed to be between three and ten years.~~SUBSIDIARY

~~Research~~NOTES TO ~~and~~CONDENSED ~~Development~~CONSOLIDATED ~~Costs:~~FINANCIAL STATEMENTS

All research and development costs, including costs to maintain or expand the Company’s patent portfolio licensed from CRE are expensed when incurred. FASB ASC Topic 730 requires companies involved in research and development activities to capitalize non-refundable advance payments for such services pursuant to contractual arrangements because the right to receive those services represents an economic benefit. Such capitalized advances will be expensed when the services occur and the economic benefit is realized. There were no capitalized research and development services at March 31, 2020 and December 31, 2019.(UNAUDITED)

~~Loss~~Note 1 – ~~Per~~Organization, ~~Share~~Nature of Business, and Liquidity:

~~Basic~~Organization ~~loss~~& per common share amounts are computed by dividing net loss by the weighted average number of common shares outstanding. In periods where there is net income, the Company applies the two-class method to calculate basic and diluted net income (loss) per share of common stock, as the Company’s preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s preferred stock does not contractually participate in its losses.Business

~~Diluted~~Neurotrope ~~loss~~Bioscience ~~per~~was ~~share amounts~~incorporated ~~are~~in ~~based~~Delaware on ~~the~~October 31, ~~weighted~~2012. ~~average~~Neurotrope ~~number~~Bioscience ofwas ~~common~~formed ~~shares~~to ~~outstanding,~~advance ~~plus~~new therapeutic and diagnostic technologies in the ~~incremental~~field ~~shares~~of ~~that~~neurodegenerative ~~would~~disease, ~~have~~primarily ~~been outstanding~~Alzheimer’s ~~upon~~disease ~~the~~(“AD”). ~~assumed~~Neurotrope ~~exercise~~Bioscience ofis ~~all~~collaborating ~~potentially~~with ~~dilutive~~Cognitive ~~stock~~Research ~~options~~Enterprises, Inc. ~~and~~(formerly ~~warrants~~known ~~subject~~as tothe ~~anti-dilution~~Blanchette ~~limitations~~Rockefeller Neurosciences Institute, or BRNI) (“CRE”), a related party, in this process. ~~All~~ ~~such~~The ~~potentially~~exclusive ~~dilutive~~rights ~~instruments~~to certain technology were ~~anti-dilutive~~licensed asby ofCRE ~~March 31,~~to ~~2020~~Neurotrope ~~and~~Bioscience ~~2019~~on February 28, ~~which~~2013 ~~were~~(see ~~approximately~~Note 4, ~~24.1 million~~“Related ~~shares~~Party Transactions and ~~12.4~~Licensing ~~million~~/ ~~shares,~~Research ~~respectively~~Agreements”).

~~Income~~On ~~Taxes:~~September 9, 2019, the Company issued a press release announcing that the confirmatory Phase 2 study of Bryostatin-1 in moderate to severe AD patients did not achieve statistical significance on the primary endpoint, which was change from baseline to Week 13 in the Severe Impairment Battery (“SIB”) total score. An average increase in SIB total score of 1.3 points and 2.1 points was observed for the Bryostatin-1 and placebo groups, respectively, at Week 13. There were multiple secondary outcome measures in this trial, including the changes from baseline at Weeks 5, 9 and 15 in the SIB total score. No statistically significant difference was observed in the change from baseline in SIB total score between the Bryostatin-1 and placebo treatment groups. On January 22, 2020, the Company announced the completion of an additional analysis in connection with the confirmatory Phase 2 study, which examined moderately severe to severe AD patients treated with Byrostatin-1 in the absence of memantine. To adjust for the baseline imbalance observed in the study, a post-hoc analysis was conducted using paired data for individual patients, with each patient as his/her own control. For the pre-specified moderate stratum (i.e., MMSE-2 baseline scores 10-15), the baseline value and the week 13 value were used, resulting in pairs of observations for each patient. The changes from baseline for each patient were calculated and a paired t-test was used to compare the mean change from baseline to week 13 for each patient. A total of 65 patients had both baseline and week 13 values, from which there were 32 patients in the Bryostatin-1 treatment group and 33 patients in the placebo group. There was a statistically significant improvement over baseline (4.8 points) in the mean SIB at week 13 for subjects in the Bryostatin-1 treatment group (32 subjects), paired t-test p < 0.0076, 2-tailed. In the placebo group (33 subjects), there was also a statistically significant increase from baseline in the mean SIB at week 13, for paired t-test p < 0.0144, consistent with the placebo effect seen in the overall 203 study. Although there was a signal of Bryostatin-1’s benefit for the moderately severe stratum, the difference between the Bryostatin-1 and placebo treatment groups was not statistically significant (p=0.2727). The Company, while proceeding with its next Phase 2 clinical trial, is determining how to proceed with respect to its development programs for Bryostatin-1.

~~The~~On ~~Company~~October ~~accounts for~~8, ~~income~~2019, ~~taxes~~following ~~using~~ the ~~asset~~Company’s ~~and~~announcement ~~liability approach which requires the recognition~~ of ~~deferred~~top-line ~~tax~~results ~~assets~~from ~~and~~its ~~liabilities~~Phase ~~for the~~2 ~~expected~~study ~~future~~of ~~tax~~Bryostatin-1 ~~consequences~~in ofmoderate ~~temporary~~to ~~differences~~severe ~~between~~AD, the ~~carrying~~Company ~~amount~~announced ofits ~~assets~~plans ~~and~~to ~~liabilities~~explore ~~for~~strategic ~~financial reporting~~alternatives ~~purposes~~to ~~and~~maximize ~~amounts~~shareholder ~~reportable~~value. ~~for~~The ~~income~~Company’s ~~tax~~Board ~~purposes.~~of ~~Deferred~~Directors ~~tax~~(the ~~assets~~“Board”) ~~are~~formed ~~reduced by~~ a ~~valuation~~strategic ~~allowance~~alternatives ~~when, in~~committee ~~the~~to ~~opinion~~evaluate ofits ~~management~~alternatives, itincluding, isbut ~~more-likely-than-~~not ~~that~~necessarily ~~some~~limited ~~portion~~to, collaborations or ~~all~~merger ofand ~~the~~acquisition ~~deferred~~transactions ~~tax~~(see ~~assets~~below- ~~will~~“Planned ~~not~~Merger beand ~~realized~~Spin-Off”.)

~~The~~Planned ~~Company~~Merger ~~had federal~~ and state net operating loss carryforwards for income tax purposes of approximately $64.3 million for the period from October 31, 2012 (inception) through March 31, 2020. The net operating loss carryforwards resulted in a deferred tax asset of approximately $16.1 million at March 31, 2020. Income tax effects of shareSpin-based payments are recognized in the financial statements for those awards that will normally result in tax deductions under existing tax law. The deferred tax asset is offset by a full valuation allowance.Off

~~The~~On May 17, 2020, the Company, ~~applies~~ Petros Pharmaceuticals, Inc., a Delaware corporation formed for the ~~provisions~~purposes of ~~FASB~~effecting ~~ASC~~transactions ~~740-10~~contemplated by the Merger Agreements (as defined below) (“Petros”), ~~Accounting~~PM ~~for~~Merger ~~Uncertain~~Sub ~~Tax~~1, ~~Positions~~LLC, ~~which~~a ~~clarifies~~Delaware ~~the~~limited ~~accounting~~liability ~~for~~company ~~uncertainty in~~and ~~income~~a ~~taxes~~wholly-owned ~~recognized~~subsidiary inof anPetros ~~enterprise’s~~(“Merger ~~financial~~Sub ~~statements~~1”), ~~and~~PN ~~prescribes~~Merger Sub 2, Inc., a ~~recognition~~Delaware ~~threshold~~corporation and ~~measurement process~~a ~~for~~wholly-owned ~~financial~~subsidiary ~~statement~~of ~~recognition~~Petros (“Merger Sub 2”), and ~~measurement~~Metuchen ofPharmaceuticals LLC, a ~~tax~~Delaware ~~position~~limited ~~taken~~liability orcompany ~~expected~~(“Metuchen”), entered into an Agreement and Plan of Merger (the “Original Merger Agreement”), as amended by the First Amendment to bethe ~~taken~~Original inMerger aAgreement ~~tax~~(the ~~return.~~“Merger ~~The standard~~Agreement ~~also~~Amendment” ~~provides~~and, ~~guidance~~together onwith ~~de-recognition~~the Original Merger Agreement, ~~classification~~the “Merger Agreement”) dated as of July 23, ~~interest~~2020, which provides for (1) the merger of Merger Sub 1 with and ~~penalties~~into Metuchen, with Metuchen surviving as a wholly-owned subsidiary of Petros (the “Metuchen Merger”) and ~~accounting~~(2) inthe ~~interim~~merger ~~periods~~of Merger Sub 2 with and into the Company, ~~disclosure~~ with the Company surviving as a wholly-owned subsidiary of Petros (the “Neurotrope Merger” and ~~transitions~~together with the Metuchen Merger, the “Mergers”).

109

~~The~~Table Company has concluded that there are no significant uncertain tax positions requiring recognition in the accompanying financial statements. The tax period that is subject to examination by major tax jurisdictions is generally three years from the date of ~~filing.~~Contents

~~Under~~As ~~Section 382~~ a result of the ~~Internal~~Metuchen ~~Revenue~~Merger, ~~Code~~each outstanding common unit or preferred unit of ~~1986,~~Metuchen aswill ~~amended~~be exchanged for a number of shares of Petros common stock, ~~changes~~par invalue $0.0001 per share (the ~~Company’s~~“Petros ~~ownership~~Common ~~may~~Stock”) ~~limit~~equal to the ~~amount~~quotient resulting from the formula of ~~its~~(i) ~~net~~82,587,877 ~~operating loss~~divided ~~carryforwards~~by ~~that~~(ii) ~~could~~the benumber ~~utilized~~of ~~annually~~fully-diluted units of Metuchen outstanding immediately prior to ~~offset~~the ~~future~~effective ~~taxable~~time ~~income~~of the Mergers, ifsubject ~~any~~to adjustment. ~~This~~In ~~limitation~~addition, ~~would~~each ~~generally~~securityholder ~~apply in~~of Metuchen prior to the ~~event~~Mergers ofwill receive a ~~cumulative~~right ~~change~~to inreceive ~~ownership~~such securityholder’s pro rata share of an aggregate of 13,320,624 shares of Petros Common Stock potentially issuable upon the ~~Company~~achievement of ~~more~~certain ~~than~~milestones ~~50%~~set ~~within~~forth in the Merger Agreement. As a ~~three-year~~result ~~period~~of the Neurotrope Merger, each outstanding share of Neurotrope common stock, par value $0.0001 ~~The~~per ~~Company~~share ~~has~~(the ~~not performed~~“Neurotrope aCommon ~~study~~Stock”) towill ~~assess~~be ~~whether~~exchanged anfor ~~ownership~~one ~~change~~(1) share of Petros Common Stock and each outstanding share of Neurotrope preferred stock, par value $0.0001 per share (the “Neurotrope Preferred Stock”) will be exchanged for ~~purposes~~one (1) share of ~~Section 382~~Petros ~~has~~preferred ~~occurred~~stock (the “Petros Preferred Stock”). Following the Mergers, orthe ~~whether~~Petros ~~there~~Preferred Stock will have ~~been multiple~~substantially ~~ownership~~the ~~changes~~same ~~since~~conversion rights (proportionally adjusted to give effect to the ~~Company’s~~Mergers), ~~inception~~powers, ~~due~~rights and privileges as the Neurotrope Preferred Stock prior to the ~~significant~~Mergers. ~~costs~~In addition, each outstanding option to purchase Neurotrope Common Stock or outstanding warrant to purchase common stock that has not previously been exercised prior to the closing of the Mergers (the “Closing”) will be converted into equivalent options and ~~complexities~~warrants ~~associated~~to ~~with~~purchase ~~such study~~shares of Petros Common Stock and will be adjusted to give effect to the exchange ratios set forth in the Merger Agreement.

~~Risks~~Upon the Closing, it is anticipated that current Neurotrope stockholders will own approximately 22.5% of Petros and ~~Uncertainties:~~current Metuchen securityholders will own approximately 77.5% of Petros. The Board of Directors of Petros is expected to consist of nine members, five of whom will be designated by Metuchen and four of whom will be designated by the Company. Upon closing, Metuchen will be the accounting acquirer in the Mergers, but not the legal acquirer. As such, the Mergers are deemed a reverse recapitalization under the guidance of ASC 805 and, upon consummation, the historical financial statements of Metuchen will become the historical financial statements of the combined company.

~~The~~In ~~Company~~addition, ~~operates in~~as ana ~~industry~~condition ~~that~~to the consummation of the Mergers, Neurotrope is ~~subject~~required to ~~rapid~~approve ~~technological~~a ~~change,~~spin-off ~~intense~~transaction ~~competition,~~(the ~~and~~“Spin-Off”) ~~significant~~whereby ~~government~~(i) ~~regulation.~~any ~~The~~cash ~~Company’s operations~~in ~~are~~excess of $20,000,000, subject to ~~significant~~adjustment ~~risk~~as ~~and~~provided ~~uncertainties~~for ~~including~~in ~~financial,~~the ~~operational,~~Merger ~~technological~~Agreement, ~~regulatory~~ and ~~other risk.~~all ~~Such~~of ~~factors~~the ~~include,~~operating ~~but~~assets ~~are~~and liabilities of the Company not ~~necessarily~~retained ~~limited~~by the Company in connection with the Mergers will be contributed to, a wholly-owned subsidiary of the ~~results~~Company (“Neurotrope SpinCo”) and (ii) holders of ~~clinical~~record ~~testing~~of Neurotrope Common Stock and ~~trial~~certain ~~activities,~~warrants ~~the~~will ~~ability to~~receive ~~obtain~~a ~~regulatory~~pro ~~approval,~~rata ~~the~~distribution ~~limited~~of ~~supply~~one share of ~~raw~~Neurotrope ~~materials,~~SpinCo’s ~~the~~common ~~ability~~stock tofor ~~obtain~~each ~~favorable~~share ~~licensing,~~of ~~manufacturing~~Neurotrope Common Stock held or ~~other~~ ~~agreements~~underlying certain warrants, ~~including~~contingent ~~risk~~upon ~~associated~~the ~~with~~consummation ~~our~~of ~~CRE~~the ~~licensing~~Mergers. The ~~agreement,~~record date for ~~its~~the ~~product~~Spin-Off, ~~candidates~~the ratio of the Spin-Off shares distributed to the Company shareholders held as of the record date and the ~~ability~~extent to ~~raise capital~~which other stakeholders of the Company may be entitled to ~~achieve~~participate ~~strategic~~in ~~objectives~~the Spin-Off have not yet been determined.

~~CRE~~ ~~has~~Consummation ~~entered~~of ~~into a~~the ~~material~~Mergers ~~transfer~~is ~~agreement~~subject ~~with~~to ~~the~~certain ~~National~~closing ~~Cancer~~conditions, ~~Institute (“NCI”)~~including, ~~pursuant~~among toother ~~which~~things, ~~the~~approval ~~NCI~~by ~~has~~the ~~agreed~~common tostockholders ~~supply bryostatin~~of ~~required for~~ the Company’s ~~pre-clinical~~and ~~research~~Metuchen and ~~clinical~~the ~~trials.~~listing ~~This agreement does not provide for a sufficient amount~~ of ~~bryostatin to support~~ the ~~completion~~Petros ofcommon ~~all~~stock ofon the ~~clinical~~Nasdaq ~~trials~~Stock ~~that~~Market after the ~~Company is required to conduct in order to seek U~~Mergers.S. ~~Food~~The ~~and~~Company ~~Drug~~has ~~Administration~~not ~~(“FDA”)~~yet ~~approval~~set ofa ~~bryostatin~~date for ~~the~~its ~~treatment~~shareholder ~~of AD~~meeting. ~~Therefore,~~The ~~CRE~~Merger orAgreement ~~the Company~~contains ~~will~~certain ~~have~~termination torights ~~enter into one or more subsequent agreements with the NCI~~ for ~~the~~both ~~supply of additional amounts of bryostatin. If CRE or~~ the Company ~~are~~and ~~unable~~Metuchen, toand ~~secure~~further ~~such~~provides ~~additional agreements~~that, orupon iftermination of the ~~NCI~~Merger ~~otherwise~~Agreement ~~discontinues~~under ~~for~~specified ~~any reason supplying the Company with bryostatin~~circumstances, ~~then~~either ~~the~~party ~~Company~~may ~~would~~be ~~have~~required to ~~either~~pay ~~secure~~the ~~another~~other ~~source~~party ofa ~~bryostatin~~termination orfee ~~discontinue~~of ~~its~~$1.0 ~~efforts to~~million ~~develop~~plus ~~and~~third ~~commercialize~~party ~~bryostatin~~expenses ~~for~~incurred by the ~~treatment~~terminating ~~of AD~~party.

~~Stock~~On ~~Compensation:~~July 23, 2020, the Company, Petros, Merger Sub 1, Merger Sub 2 and Metuchen entered into the Merger Agreement Amendment. See Note 9, “Subsequent Events”.

The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options and consultant warrants, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options or warrants. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. Employee stock option and consulting expenses are recognized over the employee’s or consultant’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the volatility and expected term. Any changes in these highly subjective assumptions can significantly impact stock-based compensation expense.Liquidity

~~Total~~As ~~stock-based~~of ~~compensation for~~June 30, 2020, the ~~three~~Company ~~months~~had ~~ended~~approximately ~~March 31,~~$30.3 ~~2020~~million ~~was~~in ~~$656,816,~~cash ofand ~~which~~cash equivalents as compared to $~~234~~17.4 million at December 31,~~901~~ ~~was~~2019. ~~classified~~The asincrease ~~research~~in ~~and~~cash ~~development~~is ~~expense~~ attributable to the Company’s issuance of preferred stock and ~~$421~~warrants pursuant to a registered direct offering in January 2020 (see Note 6,~~915~~ ~~was~~“Common ~~classified~~Stock”) aspartially ~~general~~offset ~~and~~by ~~administrative~~cash ~~expense~~used for operating activities during the 2020 period. ~~For~~The Company expects that its current cash and cash equivalents will be sufficient to support its projected operating requirements over at least the ~~three~~next 12 months ~~ended~~from ~~March 31,~~the ~~2019,~~Form ~~total stock~~10-~~based compensation~~Q ~~was~~filing $1date,~~593,764,~~ of which ~~$557~~would include the continuing development of bryostatin,~~748~~ ~~was~~our ~~classified~~novel asdrug ~~research~~targeting ~~and~~the ~~development~~activation ~~expense~~of ~~and~~PKC $1epsilon,~~036,016~~ ~~was~~but do ~~classified as~~not ~~general~~take into account the potential impact of the planned merger and spin-off ~~administrative~~disclosed ~~expense~~above.

~~Recent~~The ~~Accounting~~future ~~Pronouncements~~course of the Company’s operations and research and development activities will include a continuing Phase 2, 100 patient clinical trial which is planned to commence during the third quarter 2020 (see Note 5 below) and will be contingent upon the Company’s current plans regarding the strategic alternative disclosed above under "Planned Merger and Spin-Off”.

~~Accounting Pronouncements Adopted During the Period:~~10

InTable November 2018, the FASB issued ASU-2018-18, Collaborative Arrangements (Topic 808). In November 2018, the FASB issued new guidance to clarify the interaction between the authoritative guidance for collaborative arrangements and revenue from contracts with customers. The new guidance clarifies that, when the collaborative arrangement participant is a customer in the context of a unit-of-account, revenue from contracts with customer’s guidance should be applied, adds unit-of-account guidance to collaborative arrangements guidance, and requires, that in a transaction with a collaborative arrangement participant who is not a customer, presenting the transaction together with revenue recognized under contracts with customers is precluded. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company will assess the impact of the adoption of this guidance on its consolidated financial statements once it becomes probable that the Company may generate revenue and, because the Company is not anticipating generating revenues in the foreseeable future, did not have an impact on our current financial statements.Contents

InAny ~~August~~additional ~~2018~~equity ~~the~~financing, ~~FASB~~if ~~issued~~available, ~~ASU~~may ~~No.~~not ~~2018-13,~~be ~~Fair~~on ~~Value~~favorable ~~Measurement~~terms ~~(Topic~~and ~~820):~~would ~~Disclosure~~likely ~~Framework~~be -significantly ~~Changes~~dilutive to the ~~Disclosure~~ ~~Requirements~~Company’s ~~for~~current ~~Fair~~stockholders ~~Value~~and ~~Measurement~~debt financing, if available, may involve restrictive covenants. ~~This~~If ~~standard~~the ~~modifies~~Company ~~certain~~is ~~disclosure~~able ~~requirements~~to onaccess ~~fair~~funds ~~value~~through ~~measurements. This~~collaborative ~~standard~~or ~~became~~licensing ~~effective~~arrangements, ~~for~~it may be required to relinquish rights to some of its technologies or product candidates that the Company would otherwise seek to develop or commercialize on ~~January~~its 1own, ~~2020~~on terms that are not favorable to the Company. The ~~adoption~~Company’s ofability ~~this~~to ~~standard~~access ~~did~~capital when needed is not ~~have~~assured aand, ~~material~~if ~~impact~~ not achieved on ~~the~~a ~~Company’s~~timely ~~disclosures~~basis, will materially harm its business, financial condition and results of operations.

11Basis of Presentation

~~Note~~The 3accompanying –unaudited ~~Collaborative~~condensed ~~Agreements:~~consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company's financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the six months ended June 30, 2020 may not be indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2019 included in our Annual Report on Form 10-K.

~~Stanford License Agreements~~

~~On May~~Note ~~12,~~2 – ~~2014, the~~Summary ~~Company entered into a license agreement (the “Stanford Agreement”) with The Board~~ of ~~Trustees~~Significant ofAccounting The Leland Stanford Junior University (“Stanford”), pursuant to which Stanford has granted to the Company a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under certain patent rights and related technology for the use of bryostatin structural derivatives, known as “bryologs,” for use in the treatment of central nervous system disorders, lysosomal storage diseases, stroke, cardio protection and traumatic brain injury, for the life of the licensed patents. The Company is required by the Stanford Agreement to use commercially reasonable efforts to develop, manufacture and sell products (“Licensed Products”) in the Licensed Field of Use (as defined in the Stanford Agreement) during the term of the licensing agreement which expires upon the termination of the last valid claim of any licensed patent under this agreement. In addition, the Company must meet specific diligence milestones, and upon meeting such milestones, make specific milestone payments to Stanford. The Company must also pay Stanford royalties of 3% of net sales, if any, of Licensed Products (as defined in the Stanford Agreement) and milestone payments of up to $3.7 million dependent upon stage of product development. As of March 31, 2020, no royalties nor milestone payments have been required.Policies:

OnUse January 19, 2017, the Company entered into an additional, second license agreement with Stanford, pursuant to which Stanford has granted to the Company a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under certain patent rights and related technology for the use of “Bryostatin Compounds and Methods of Preparing the Same,” or synthesized bryostatin, for use in the treatment of neurological diseases, cognitive dysfunction and psychiatric disorders, for the life of the licensed patents. The Company paid Stanford $70,000 upon executing the license and is obligated to pay an additional $10,000 annually as a license maintenance fee. In addition, based upon certain milestones which include product development and commercialization, the Company will be obligated to pay up to an additional $2.1 million and between 1.5% and 4.5% royalty payments on certain revenues generated by the Company relating to the licensed technology. The Company has made all required annual maintenance payments. As of March 31, 2020, no royalties nor milestone payments have been required.Estimates:

MtThe preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make significant estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. ~~Sinai~~Actual ~~License~~results ~~Agreement~~could differ from those estimates.

OnCash July 14, 2014, Neurotrope Bioscience entered into an Exclusive License Agreement (the “Mount Sinai Agreement”) with the Icahn School of Medicine at Mount Sinai (“Mount Sinai”). Pursuant to the Mount Sinai Agreement, Mount Sinai granted Neurotrope Bioscience (a) a revenue-bearing, world-wide right and ~~exclusive~~Cash ~~license,~~Equivalents ~~with the right to grant sublicenses (on certain conditions), under Mount Sinai’s interest in certain joint patents held by the Company~~ and ~~Mount~~Concentration Sinai (the “Joint Patents”) as well as in certain results and data (the “Data Package”) and (b) a non-exclusive license, with the right to grant sublicenses on certain conditions, to certain technical information, both relating to the diagnostic, prophylactic or therapeutic use for treating diseases or disorders in humans relying on activation of ~~Protein~~Credit Kinase C Epsilon (“PKCε”), which includes Niemann-Pick Disease (the “Mount Sinai Field of Use”). The Mount Sinai Agreement allows Neurotrope Bioscience to research, discover, develop, make, have made, use, have used, import, lease, sell, have sold and offer certain products, processes or methods that are covered by valid claims of Mount Sinai’s interest in the Joint Patents or an Orphan Drug Designation Application covering the Data Package (“Mount Sinai Licensed Products”) in the Mount Sinai Field of Use (as such terms are defined in the Mount Sinai Agreement).Risk:

12The Company considers all highly liquid cash investments with an original maturity of three months or less when purchased to be cash equivalents. At June 30, 2020, the Company’s cash balances that exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”) were approximately $2.7 million. In addition, approximately $27.6 million included in cash and cash equivalents were invested in a money market fund, which is not insured under the FDIC. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash.

~~The~~Fixed Company will pay Mt. Sinai milestone payments of $2 million upon approval of a new drug approval (“NDA”) in the United States and an additional $1.5 million for an NDA approval in the European Union or Japan. In addition, the Company would be obligated to pay Mt. Sinai royalties on net sales of licensed product of 2.0% for up to $250 million of net sales and 3.0% of net sales over $250 million. Since inception, the Company has paid Mt. Sinai approximately $150,000 consisting of licensing fees of $75,000 plus development costs and patent fees of approximately $75,000. As of March 31, 2020, no royalties nor milestone payments have been required.Assets:

~~Clinical~~Fixed ~~Trial~~assets ~~Services~~are ~~Agreements~~stated at cost less accumulated depreciation. Depreciation is computed on a straight line basis over the estimated useful life of the asset, which is deemed to be between three and ten years.

OnResearch May 4, 2018, Neurotrope Bioscience executed a new Services Agreement (the “New Services Agreement”) with Worldwide Clinical Trials (“WCT”). The New Services Agreement relates to services for Neurotrope Bioscience’s Phase 2 confirmatory clinical study assessing the safety, tolerability and ~~efficacy~~Development of bryostatin in the treatment of moderately severe to severe AD (the “Study”). Pursuant to the terms of the Services Agreement, WCT is providing services to target enrollment of approximately one hundred (100) Study subjects. The total estimated budget for the services, including pass-through costs, drug supply and other statistical analyses, was approximately $7.8 million. Of the total estimated Study costs, as of March 31, 2020, the Company has incurred approximately $7.6 million in expenses of which WCT has represented a total of approximately $7.2 million and approximately $400,000 of expenses have been paid to other trial-related vendors and consultants of which all amounts have been paid as of March 31, 2020. The Company has incurred substantially all of the expenses associated with WCT as of March 31, 2020.Costs:

~~Note~~All 4research –and ~~Related~~development ~~Party~~costs, ~~Transactions~~ including costs to maintain or expand the Company’s patent portfolio licensed from CRE are expensed when incurred. FASB ASC Topic 730 requires companies involved in research and ~~Licensing~~development /activities ~~Research~~to ~~Agreements:~~capitalize non-refundable advance payments for such services pursuant to contractual arrangements because the right to receive those services represents an economic benefit. Such capitalized advances will be expensed when the services occur and the economic benefit is realized. There were no capitalized research and development services at June 30, 2020 and December 31, 2019.

~~Cognitive Research Enterprises, Inc.~~11

~~James~~Table ~~Gottlieb, who resigned as a director~~ of the Company on February 21, 2020, serves as a director of CRE, and Shana Phares, who resigned as a director of the Company on February 25, 2020, served as President and Chief Executive Officer of CRE. CRE is a stockholder of a corporation, Neuroscience Research Ventures, Inc. (“NRV, Inc.”), which owned approximately 1.3% of the Company’s outstanding common stock as of March 31, 2020.Contents

~~Effective~~Loss ~~October 31, 2012,~~Per Neurotrope Bioscience executed a Technology License and Services Agreement (the “TLSA”) with CRE, a related party, and NRV II, LLC (“NRV II”), another affiliate of CRE, which was amended by Amendment No. 1 to the TLSA as of August 21, 2013. As of February 4, 2015, the parties entered into an Amended and Restated Technology License and Services Agreement (the “CRE License Agreement”). The CRE License Agreement provides research services and has granted Neurotrope Bioscience the exclusive and nontransferable world-wide, royalty-bearing right, with a right to sublicense (in accordance with the terms and conditions described below), under CRE’s and NRV II’s respective right, title and interest in and to certain patents and technology owned by CRE or licensed to NRV II by CRE as of or subsequent to October 31, 2012, to develop, use, manufacture, market, offer for sale, sell, distribute, import and export certain products or services for therapeutic applications for AD and other cognitive dysfunctions in humans or animals (the “Field of Use”). Additionally, the TLSA specifies that all patents that issue from a certain patent application shall constitute licensed patents and all trade secrets, know-how and other confidential information claimed by such patents constitute licensed technology under the CRE License. The CRE License Agreement terminates on the later of the date (a) the last of the licensed patent expires, is abandoned, or is declared unenforceable or invalid or (b) the last of the intellectual property enters the public domain.Share:

~~After~~Basic loss per common share amounts are computed by dividing net loss by the ~~initial~~weighted ~~Series A Stock~~average ~~financing~~number of common shares outstanding. In periods where there is net income, the ~~CRE~~Company ~~License~~applies ~~Agreement~~the ~~required~~two-class ~~Neurotrope~~method ~~Bioscience~~ to ~~enter~~calculate ~~into~~basic ~~scope~~and ofdiluted ~~work~~net ~~agreements~~income ~~with~~(loss) ~~CRE~~per share of common stock, as the Company’s preferred ~~service~~stock ~~provider~~is ~~for~~a ~~any~~participating ~~research~~security. ~~and~~The ~~development~~two-class ~~services~~method oris ~~other~~an ~~related~~earnings ~~scientific~~allocation ~~assistance~~formula ~~and~~that ~~support~~treats ~~services. There~~a ~~were~~participating nosecurity ~~such~~as ~~statements~~having ofrights ~~work~~to ~~agreements~~earnings ~~entered~~that ~~into~~otherwise orwould ~~work~~have ~~being~~been ~~performed~~available ~~under~~to ~~such~~common ~~statements~~stockholders. In periods where there is a net loss, the two-class method of ~~work~~computing ~~during~~earnings per share does not apply as the ~~three~~ ~~months~~Company’s ~~ended~~preferred ~~March~~stock ~~31,~~does ~~2020~~not orcontractually ~~fiscal~~participate ~~year~~in ~~2019~~its losses.

13Diluted loss per share amounts are based on the weighted average number of common shares outstanding, plus the incremental shares that would have been outstanding upon the assumed exercise of all potentially dilutive stock options and warrants subject to anti-dilution limitations. All such potentially dilutive instruments were anti-dilutive as of June 30, 2020 and 2019, which were approximately 24.1 million shares and 12.5 million shares, respectively.

InIncome addition, the CRE License Agreement requires the Company to pay CRE a “Fixed Research Fee” of $1 million per year for five years, commencing on the date that the Company completes a Series B Preferred Stock financing resulting in proceeds of at least $25,000,000 (the “Series B Financing”) which shall also include the proceeds from the exercise of any Series A warrants, Series B warrants, and Series E warrants. This Fixed Research Fee has not been triggered. The CRE License Agreement also requires the payment of royalties ranging between 2% and 5% of the Company’s revenues generated from the licensed patents and other intellectual property, dependent upon the percentage ownership that NRV, Inc. holds in the Company.Taxes:

InThe ~~addition,~~Company onaccounts ~~November 10, 2018,~~for ~~Neurotrope~~income ~~Bioscience~~taxes ~~and~~using ~~CRE~~the ~~entered~~asset ~~into~~and aliability ~~second~~approach ~~amendment~~which (requires the ~~“Second~~recognition ~~Amendment”)~~of todeferred ~~the~~tax ~~TLSA~~assets toand ~~which~~liabilities ~~CRE granted~~for ~~certain~~the ~~patent~~expected ~~prosecution~~future ~~and~~tax ~~maintenance~~consequences ~~rights~~of totemporary ~~Neurotrope~~differences ~~Bioscience.~~between ~~Under~~ the ~~Second~~carrying ~~Amendment,~~amount ~~Neurotrope~~of ~~Bioscience will~~assets ~~have~~and ~~the~~liabilities ~~sole~~for ~~and~~financial ~~exclusive~~reporting ~~right~~purposes and ~~the~~amounts ~~obligation,~~reportable ~~to apply~~ for, ~~file,~~income ~~prosecute~~tax ~~and~~purposes. ~~maintain~~Deferred ~~patents~~tax ~~and~~assets ~~applications for~~are ~~the~~reduced ~~intellectual~~by ~~property~~a ~~licensed~~valuation toallowance ~~Neurotrope Bioscience~~when, ~~and~~in ~~pay~~the ~~all~~opinion ~~fees~~of management, ~~costs~~it ~~and~~is ~~expenses~~more-likely-than-not ~~related~~that tosome ~~the~~portion ~~licensed~~or ~~intellectual property.~~all ~~Neurotrope~~of ~~Bioscience~~the ~~paid~~deferred ~~CRE~~tax ~~$10,000~~assets inwill ~~consideration~~not ofbe ~~this Second Amendment~~realized.

~~Note~~The 5Company –had ~~Commitments:~~federal and state net operating loss carryforwards for income tax purposes of approximately $66.9 million for the period from October 31, 2012 (inception) through June 30, 2020. The net operating loss carryforwards resulted in a deferred tax asset of approximately $16.7 million at June 30, 2020. Income tax effects of share-based payments are recognized in the financial statements for those awards that will normally result in tax deductions under existing tax law. The deferred tax asset is offset by a full valuation allowance.

~~Consulting~~The ~~Agreements~~Company applies the provisions of FASB ASC 740-10, Accounting for Uncertain Tax Positions, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties, and accounting in interim periods, disclosure and transitions.

OnThe ~~August 4, 2016, the~~ Company ~~entered~~has ~~into~~concluded athat ~~consulting~~there ~~agreement~~are ~~with~~no SMsignificant ~~Capital~~uncertain ~~Management,~~tax ~~LLC~~positions ~~(“SMCM”),~~requiring arecognition ~~limited~~in ~~liability company owned and controlled by~~ the ~~Company’s~~accompanying ~~Chairman~~financial ~~of the Board, Mr~~statements. ~~Joshua~~ N.The ~~Silverman~~tax ~~(the~~period ~~“Consulting~~that ~~Agreement”). Mr. Silverman~~is was appointed to the Board on August 4, 2016. Pursuant to the Consulting Agreement, SMCM shall provide consulting services which shall include, but not be limited to, providing business development, financial communications and management transition services, for a one-year period, subject to ~~annual~~examination ~~review~~by ~~thereafter.~~major ~~SMCM’s~~tax ~~annual~~jurisdictions ~~consulting fee~~ is ~~$120,000, payable~~generally ~~by the Company in monthly installments of $10,000. In addition, SMCM shall be reimbursed for (i)~~three ~~all~~years ~~pre-approved travel~~from ~~in connection with~~ the ~~consulting~~date ~~services to the Company, (ii) upon submission to the Company~~ of ~~appropriate vouchers and receipts, for all other out-of-pocket expenses reasonably incurred by SMCM in furtherance of the Company’s business~~filing.

~~Effective~~Under asSection 382 of ~~June 1,~~ ~~2019,~~ the ~~Company~~Internal ~~entered~~Revenue ~~into~~Code aof ~~consulting~~1986, ~~agreement~~as ~~with Katalyst Securities LLC (“Katalyst”)~~amended, ~~pursuant~~ tochanges ~~which~~in ~~Katalyst agreed to provide investment banking consulting services to~~ the Company’s ~~(the~~ownership ~~“Katalyst~~may ~~Agreement”).~~limit ~~The~~the ~~term~~amount of ~~the agreement~~its ~~continues~~net ~~until~~operating ~~the~~loss ~~second~~carryforwards ~~anniversary~~that ~~from~~could ~~the~~be ~~effective~~utilized ~~date~~annually ~~and~~to ~~may~~offset befuture ~~canceled~~taxable byincome, ~~either~~if ~~Katalyst~~any. orThis ~~the Company~~limitation ~~with~~would 30generally ~~days’~~apply ~~advance~~in ~~notice.~~the Asevent ~~consideration~~of ~~for~~a ~~its~~cumulative ~~services~~change ~~under~~in ~~the~~ownership ~~Katalyst~~of ~~Agreement,~~ the Company ~~agreed~~ toof ~~pay~~more tothan ~~Katalyst~~50% ~~$25,000~~within ~~per~~a ~~month, plus five~~three-year ~~warrants~~period. toThe ~~purchase 90,000 shares of the~~ Company’s ~~common stock~~has onnot ~~the~~performed ~~effective~~a ~~date~~study ofto ~~the~~assess ~~Katalyst~~whether ~~Agreement~~an ~~and~~ownership onchange ~~each~~for purposes of ~~the~~Section 382 ~~three~~has ~~month~~occurred, ~~anniversaries~~or ~~following~~whether ~~the~~there ~~effective date. The warrants~~ have anbeen ~~exercise~~multiple ~~price~~ownership ~~equal~~changes tosince the ~~closing price of the~~ Company’s ~~stock~~inception, ~~price~~due onto the ~~date~~significant ~~of issuance.~~costs ~~Katalyst’s cash~~ and ~~stock-based~~complexities ~~compensation~~associated iswith ~~included~~such ~~as general and administrative expenses in the Company’s statement of operations~~study.

~~Effective~~Risks as of June 5, 2019, the Company entered into a consulting agreement with GP Nurmenkari, Inc. (“GPN”) (the “GPN Agreement”), pursuant to which GPN agreed to provide investment banking consulting services to the Company. The term of the agreement continues until the second anniversary from the effective date and may be canceled by either GPN or the Company with 30 days’ advance notice. As consideration for its services under the GPN Agreement, the Company agreed to pay to GPN $8,000 per month, plus five-year warrants to purchase 24,000 shares of the Company’s common stock on the effective date and on each of the three month anniversaries following the effective date. The warrants have an exercise price equal to the closing price of the Company’s stock price on the date of issuance. On February 1, 2020, the Company amended the GPN Agreement, increasing the cash compensation to $17,500 per month and increasing the number of warrants issued each three-month period from 24,000 to 50,000. GPN’s cash and stock-based compensation is included as general and administrative expenses in the Company’s statement of operations.Uncertainties:

14The Company operates in an industry that is subject to rapid technological change, intense competition, and significant government regulation. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risk. Such factors include, but are not necessarily limited to, the results of clinical testing and trial activities, the ability to obtain regulatory approval, the limited supply of raw materials, the ability to obtain favorable licensing, manufacturing or other agreements, including risk associated with our CRE licensing agreement, for its product candidates and the ability to raise capital to achieve strategic objectives.

~~Note 6 – Common and Preferred Stock:~~12

~~Adoption~~ Table of ~~a Shareholder Rights Plan~~Contents

~~Overview~~CRE has entered into a material transfer agreement with the National Cancer Institute of the National Institutes of Health (“NCI”), pursuant to which the NCI has agreed to supply bryostatin required for the Company’s pre-clinical research and clinical trials. This agreement does not provide for a sufficient amount of bryostatin to support the completion of all of the clinical trials that the Company is required to conduct in order to seek U.S. Food and Drug Administration (“FDA”) approval of bryostatin for the treatment of AD. Therefore, CRE or the Company will have to enter into one or more subsequent agreements with the NCI for the supply of additional amounts of bryostatin. If CRE or the Company are unable to secure such additional agreements, or if the NCI otherwise discontinues for any reason supplying the Company with bryostatin, then the Company would have to either secure another source of bryostatin or discontinue its efforts to develop and commercialize bryostatin for the treatment of AD. In the interest of mitigating this risk, on June 9, 2020, the Company entered into a supply agreement (the "Supply Agreement") with BryoLogyx Inc. ("BryoLogyx"), pursuant to which BryoLogyx agreed to serve as the Company's exclusive supplier of synthetic Bryostatin-1. Pursuant to the terms of the Supply Agreement, the Company has agreed to place an initial order of one gram of current good manufacturing practice ("cGMP") synthetic Bryostatin-1 as an active pharmaceutical ingredient to be used in a drug product ("API"), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of API, which certification shall be obtained no later than March 31, 2021.

~~On September 9,~~Stock 2019, the Company announced that its Board had adopted a shareholder rights plan (the “Rights Plan”). The Rights Plan is intended to protect the interests of the Company’s stockholders and enable them realize the full potential value of their investment by reducing the likelihood that any person or group gains control of the Company through open market accumulation or other tactics without appropriately compensating all stockholders. Pursuant to the Rights Plan, the Company issued, by means of a dividend, one preferred share purchase right for each outstanding share of the Company’s common stock to shareholders of record on the close of business on September 19, 2019. Initially, these Rights (as defined below) will trade with, and be represented by, the shares of the Company’s common stock. The Rights will generally become exercisable only if any person (or any persons acting as a group) acquires 15% or more of the Company’s outstanding common stock (the “Acquiring Person”) in a transaction not approved by the Board, subject to certain exceptions, as explained below.Compensation:

~~If the~~The ~~Rights~~Company ~~become~~accounts ~~exercisable,~~for ~~all~~stock-based ~~holders~~awards ofto ~~Rights,~~employees ~~other~~and ~~than~~consultants ~~the~~in ~~Acquiring~~accordance ~~Person,~~with ~~will~~applicable beaccounting ~~entitled~~principles, towhich ~~acquire~~requires ~~shares~~compensation ofexpense ~~the Company’s~~related ~~common~~to ~~stock~~share-based attransactions, aincluding ~~50%~~employee ~~discount~~stock oroptions ~~the~~and ~~Company~~consultant ~~may~~warrants, ~~exchange~~to ~~each~~be ~~Right held~~measured byand ~~such~~recognized ~~holders~~in ~~for~~the ~~one~~financial ~~share~~statements ofbased ~~its~~on ~~common~~a ~~stock.~~determination Inof ~~such~~the ~~situation,~~fair ~~Rights~~value ~~held~~of by the ~~Acquiring~~stock ~~Person~~options ~~would~~or ~~become~~warrants. ~~void and~~The ~~will~~grant ~~not~~date befair ~~exercisable.~~value Ifis ~~any~~determined ~~person~~using at the ~~time~~Black-Scholes-Merton of(“Black-Scholes”) ~~the~~pricing ~~first~~model. ~~public~~Employee ~~announcement~~stock ofoption ~~the~~and ~~Rights~~consulting ~~Plan~~expenses ~~owned~~are ~~more~~recognized ~~than~~over the ~~triggering~~ ~~percentage~~employee’s ~~then~~or ~~that stockholder~~consultant’s ~~existing~~requisite ~~ownership~~service ~~percentage~~period ~~will~~(generally bethe ~~grandfathered,~~vesting ~~although,~~period ~~with~~of ~~certain exceptions,~~ the ~~Rights~~equity ~~will~~grant). ~~become~~The ~~exercisable~~Company’s ifoption atpricing ~~any~~model ~~time~~requires ~~after~~ the ~~announcement~~input of highly subjective assumptions, including the ~~Rights~~volatility ~~Plan~~and ~~such~~expected ~~stockholder~~term. ~~increases its~~Any ~~ownership~~changes ofin ~~the~~these ~~Company’s~~highly ~~common~~subjective assumptions can significantly impact stock-based compensation expense.

~~Unless earlier~~Total ~~redeemed~~stock-based compensation for the six months ended June 30, ~~terminated~~2020 orwas ~~exchanged~~$1,061,096, ~~pursuant~~of towhich $398,840 was classified as research and development expense and $662,256 was classified as general and administrative expense, versus total stock-based compensation for the ~~terms~~six months ended June 30, 2019 of ~~the~~$2,421,460, ~~Rights~~of ~~Plan~~which $695, ~~the~~406 ~~Rights~~was ~~will~~classified ~~expire~~as atresearch and development expense and $1,726,054 was classified as general and administrative expense. For the ~~close~~three months ended June 30, 2020, total stock-based compensation was $404,280, of ~~business~~which on$161,642 ~~September 8~~was classified as research and development expense and $242,638 ~~2021.~~was ~~The~~classified ~~Board~~as ~~may~~general ~~terminate~~and ~~the~~administrative ~~Rights~~expense, ~~Plan~~versus ~~before~~total ~~that date~~stock-based ifcompensation for the ~~Board~~three ~~determines~~months ~~that~~ended ~~there~~June is30, no2019 ~~longer~~totaling a$827,696, ~~threat~~of towhich ~~shareholder~~$137,658 ~~value~~was classified as research and development expense and $690,038 was classified as general and administrative expense.

~~Key~~Recent ~~Features~~Accounting Pronouncements

~~On September 9,~~Accounting ~~2019,~~Pronouncements ~~the~~Adopted ~~Board~~During ~~declared a dividend of one preferred share purchase right (a “Right”), payable on September 19, 2019, for each share of common stock, par value $0.0001 per share, of~~ the Company outstanding on September 19, 2019, to the stockholders of record on that date. In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of September 9, 2019, between the Company and Philadelphia Stock Transfer, Inc., as rights agent. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Preferred Stock, par value $0.0001 per share (the “Preferred Shares”), of the Company at a price of $20 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. Each one one-thousandth of a Preferred Share entitles the holder thereof to receive (i) the same dividends and liquidation rights as if the holder held one share of common stock and will be treated the same as one share of common stock in the event of a merger, consolidation or other share exchange and (ii) one vote on all matters submitted to a vote of the Company’s stockholders, in each case subject to adjustment as described in the Certificate of Designations, Preferences and Rights of Series C Preferred Stock of Neurotrope Inc. Until a right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. As of March 31, 2020, there is no Series C Preferred Stock outstanding.Period:

~~January~~In August 2018 the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements. This standard became effective for the Company on January 1, 2020. ~~Offering~~The adoption of this standard did not have a material impact on the Company’s financial statements.

15Note 3 – Collaborative Agreements:

~~The~~Stanford ~~warrants~~License are exercisable at a price of $1.65 per share immediately upon issuance. They feature a five-year term and a right by the Company, in certain circumstances, to call for the cancellation of up to 50% of the shares of common stock underlying such warrants for consideration equal to $0.0001 per share of underlying common stock in the event the value weighted average price of the Company’s common stock exceeds $5.00 for each of 10 consecutive trading days in a 30-day calendar period. The Series D Preferred Stock and the Series H warrants are immediately separable and were issued separately. The net proceeds to the Company from the offering were approximately $16.4 million, after deducting financial advisory fees and offering expenses paid by the Company.Agreements

InOn ~~connection~~May ~~with the~~12, ~~offering~~2014, onNeurotrope ~~January 22,~~Bioscience ~~2020,~~entered ~~the~~into ~~Company~~a ~~filed~~license ~~with~~agreement (the ~~Secretary~~“Stanford ofAgreement”) ~~State~~with ofThe ~~the~~Board ~~State~~of Trustees of ~~Nevada~~The aLeland ~~Certificate~~Stanford ofJunior ~~Designation of~~University ~~Preferences~~(“Stanford”), ~~Rights~~pursuant ~~and~~to ~~Limitations~~which ofStanford ~~Series D~~has ~~Convertible~~granted ~~Preferred~~to ~~Stock~~Neurotrope ~~(the~~Bioscience ~~“Series D~~a ~~Certificate~~revenue-bearing, ofworld-wide ~~Designation”) establishing~~right and ~~designating~~exclusive ~~the rights~~license, ~~powers~~with ~~and preferences of~~ the ~~Series D~~right ~~Preferred~~to ~~Stock.~~grant ~~The~~sublicenses ~~Company~~(on ~~designated~~certain 18conditions),~~000 shares~~ ofunder ~~Series D~~certain ~~Preferred~~patent ~~Stock.~~rights ~~Pursuant~~and torelated ~~the~~technology ~~Series D~~for ~~Certificate of Designation,~~ the ~~holders~~use of ~~the~~bryostatin ~~Series D Preferred~~structural ~~Stock are entitled~~derivatives, ~~among~~known ~~other~~as ~~things~~“bryologs,” tofor use in the ~~right~~treatment toof ~~participate~~central innervous ~~any~~system ~~dividends~~disorders, ~~and~~lysosomal ~~distributions~~storage ~~paid~~diseases, tostroke, ~~common stockholders~~cardio onprotection anand ~~as-converted~~traumatic ~~basis.~~brain ~~The~~injury, ~~Series D~~for ~~Preferred~~the ~~Stock~~life ~~has~~of nothe ~~voting~~licensed ~~rights~~patents. ~~except~~Neurotrope asBioscience is required by ~~law.~~the ~~The~~Stanford ~~Series D Preferred~~Agreement ~~Stock~~to isuse ~~convertible~~commercially atreasonable ~~any~~efforts ~~time~~to develop, manufacture and ~~from~~sell ~~time~~products to(“Licensed ~~time~~Products”) ~~without~~in the ~~payment~~Licensed Field of ~~additional~~Use ~~consideration~~(as ~~into~~defined ~~shares~~in of the ~~Company’s~~Stanford ~~common~~Agreement) ~~stock~~during atthe aterm ~~conversion~~of ~~price~~the oflicensing ~~$1.65~~agreement ~~per~~which ~~share,~~expires ~~subject~~upon tothe ~~certain~~termination ~~adjustments~~of ~~and~~the ~~has~~last avalid ~~stated~~claim ~~value~~ of ~~$1,000~~any ~~per~~licensed ~~share~~patent ofunder ~~Series D~~this ~~Preferred Stock~~agreement. In addition, the ~~event~~Company ofmust ~~any~~meet ~~liquidation~~specific ordiligence ~~dissolution~~milestones, ofand ~~the~~upon ~~Company,~~meeting ~~the~~such ~~Series D Preferred~~milestones, ~~Stock~~make ~~will~~specific ~~rank~~milestone ~~junior~~payments to ~~the~~Stanford. ~~Company’s~~Neurotrope ~~Series C~~Bioscience ~~Preferred~~must ~~Stock~~also ~~under~~pay ~~the~~Stanford ~~Rights~~royalties of ~~Agreement~~3% of net sales, if ~~applicable~~any, ~~and~~ ~~any other class~~ of ~~preferred~~Licensed ~~stock~~Products of(as ~~senior~~defined ~~rank~~in to the ~~Series D~~Stanford ~~Preferred~~Agreement) ~~Stock,~~and ~~senior~~milestone topayments ~~any~~of ~~other~~up ~~class~~to of$3.7 ~~preferred stock~~million ~~and~~dependent toupon ~~the~~stage ~~Company’s~~of ~~common~~product ~~stock~~development. inAs ~~the~~of ~~distribution~~June of30, ~~assets~~2020, tono ~~the~~royalties ~~extent~~nor ~~legally~~milestone ~~available~~payments ~~for~~have ~~distribution~~been required.

~~During the three months ended March 31, 2020,~~ 13,002 shares of Series D Preferred Stock were converted into an aggregate of 7,880,307 shares of common stock. The remaining 4,997 shares of Series D Preferred Stock are convertible into an aggregate of 3,028,793 shares of common stock.

~~Note~~Table 7of ~~– Stock Options:~~Contents

~~Option~~On ~~Grants~~January 19, 2017, Neurotrope Bioscience entered into an additional, second license agreement with Stanford, pursuant to which Stanford has granted to Neurotrope Bioscience a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under certain patent rights and related technology for the use of “Bryostatin Compounds and Methods of Preparing the Same,” or synthesized bryostatin, for use in the treatment of neurological diseases, cognitive dysfunction and psychiatric disorders, for the life of the licensed patents. The Company paid Stanford $70,000 upon executing the license and is obligated to pay an additional $10,000 annually as a license maintenance fee. In addition, based upon certain milestones which include product development and commercialization, Neurotrope Bioscience will be obligated to pay up to an additional $2.1 million and between 1.5% and 4.5% royalty payments on certain revenues generated by Neurotrope Bioscience relating to the licensed technology. The Company has made all required annual maintenance payments. As of June 30, 2020, no royalties nor milestone payments have been required.

~~The~~Mt. ~~following~~Sinai isLicense ~~a summary of stock option activity under the stock option plans for the three months ended March 31, 2020:~~Agreement

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in millions)
Options outstanding at January 1, 2020		2,366,519		$	12.86		7.5
Options granted		60,000		$	0.82
Less options forfeited		(27,282	)	$	5.30
Less options expired/cancelled		(72,664	)	$	10.38
Less options exercised		-		$	-
Options outstanding at March 31, 2020		2,326,573		$	7.28		7.3	$	-
Options exercisable at March 31, 2020		1,789,278		$	14.92		7.4	$	-

On July 14, 2014, Neurotrope Bioscience entered into an Exclusive License Agreement (the “Mount Sinai Agreement”) with the Icahn School of Medicine at Mount Sinai (“Mount Sinai”). Pursuant to the Mount Sinai Agreement, Mount Sinai granted Neurotrope Bioscience (a) a revenue-bearing, world-wide right and exclusive license, with the right to grant sublicenses (on certain conditions), under Mount Sinai’s interest in certain joint patents held by the Company and Mount Sinai (the “Joint Patents”) as well as in certain results and data (the “Data Package”) and (b) a non-exclusive license, with the right to grant sublicenses on certain conditions, to certain technical information, both relating to the diagnostic, prophylactic or therapeutic use for treating diseases or disorders in humans relying on activation of Protein Kinase C Epsilon (“PKCε”), which includes Niemann-Pick Disease (the “Mount Sinai Field of Use”). The Mount Sinai Agreement allows Neurotrope Bioscience to research, discover, develop, make, have made, use, have used, import, lease, sell, have sold and offer certain products, processes or methods that are covered by valid claims of Mount Sinai’s interest in the Joint Patents or an Orphan Drug Designation Application covering the Data Package (“Mount Sinai Licensed Products”) in the Mount Sinai Field of Use (as such terms are defined in the Mount Sinai Agreement).

~~Pursuant~~The toCompany will pay Mt. Sinai milestone payments of $2 million upon approval of a new drug approval (“NDA”) in the ~~Company’s non-employee~~United ~~director~~States ~~compensation~~and ~~plan,~~an additional $1.5 million for an NDA approval in ~~March 2020~~the European Union or Japan. In addition, the Company ~~granted~~would ~~stock~~be ~~options~~obligated to ~~purchase~~pay anMt. ~~aggregate~~Sinai ofroyalties ~~60,000 shares~~on net sales of ~~the~~licensed ~~Company’s~~product ~~common~~of ~~stock~~2.0% for up to ~~six~~$250 ~~members~~million of ~~the~~net ~~Board~~sales and 3.0% ~~The~~of ~~stock~~net ~~options~~sales ~~have~~over an$250 ~~exercise~~million. ~~price~~Since ofinception, $0the Company has paid Mt.~~8203~~ ~~per share~~Sinai ~~and~~approximately an$150,000 ~~expiration~~consisting ~~date~~of ~~that~~licensing isfees ~~ten~~of ~~years~~$75,000 ~~from~~plus ~~the~~development ~~date~~costs and patent fees of ~~issuance~~approximately $75,000. ~~All~~As of ~~these~~June ~~options~~30, ~~vest~~2020, ~~upon~~no ~~the~~royalties ~~first~~nor ~~anniversary of~~milestone ~~the~~payments ~~issuance~~have ~~date~~been required.

16Agreements with BryoLogyx

As ofOn ~~March 31~~June 9, 2020, ~~there~~the ~~was~~Company ~~approximately~~entered $into a supply agreement (the “Supply Agreement”) with BryoLogyx Inc. (“BryoLogyx”), pursuant to which BryoLogyx agreed to serve as the Company’s exclusive supplier of synthetic Bryostatin-1.7 ~~million~~Pursuant to the terms of ~~total~~the ~~unrecognized~~Supply ~~compensation~~Agreement, ~~costs~~the ~~related~~Company has agreed to ~~unvested~~place ~~stock~~an ~~options.~~initial ~~These~~order ~~costs are~~of ~~expected~~one gram of current good manufacturing practice (“cGMP”) synthetic Bryostatin-1 as an active pharmaceutical ingredient to be ~~recognized~~used ~~over~~in a ~~weighted~~drug ~~average~~product ~~period~~(“API”), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of 1API, which certification shall be obtained no later than March 31, 2021.3 ~~years~~The Company may place additional orders for API beyond the initial order by making a written request to BryoLogyx no later than six months prior to the requested delivery date.

~~The~~In ~~Company~~connection ~~used~~with the ~~Black-Scholes~~ ~~valuation~~Supply ~~model~~Agreement, toon ~~calculate~~June 9, 2020, the ~~fair~~Company ~~value~~entered ofinto ~~stock~~a ~~options.~~transfer ~~The~~agreement ~~fair~~(the ~~value~~“Transfer ofAgreement”) ~~stock~~with ~~options~~BryoLogyx. ~~issued~~Pursuant ~~for~~to the ~~three months~~terms ~~ended~~of ~~March 31~~the Transfer Agreement, ~~2020~~the ~~was~~Company ~~estimated~~agreed atto ~~the~~assign ~~grant~~and ~~date~~transfer ~~using~~to BryoLogyx all of the ~~following~~Company’s ~~weighted~~right, ~~average~~title ~~assumptions:~~and ~~Dividend~~interest ~~yield 0%;~~in ~~Expected~~and ~~term~~to 10that ~~years;~~certain anCooperative ~~aggregate~~Research ~~volatility~~and ~~based~~Development ~~upon~~Agreement, adated ~~blend~~as of January 29, 2019 (the “CRADA”), by and between the Company’s and ~~guideline~~the ~~company~~U.S. ~~historical volatility~~Department of ~~99.46%;~~Health and ~~Risk~~Human Services, as represented by the NCI, under which Bryostatin-~~free~~1’s ~~interest~~ability ~~rate~~to 0modulate CD22 in patients with relapsed/refractory CD22+ disease has been evaluated to date.~~92%.~~ The ~~weighted~~transfer ~~average~~is ~~grant~~subject ~~date~~to ~~fair~~the ~~value~~receipt of ~~options~~NCI’s ~~granted~~consent. ~~for~~Pursuant ~~the three~~to ~~months~~guidance ~~ended~~provided ~~March 31~~by NCI, ~~2020~~Neurotrope’s isCRADA ~~$0.73~~has ~~per~~been ~~option,~~cancelled orand BryoLogyx has initiated a ~~total~~request for ~~all~~a ~~grants~~new CRADA in its name. BryoLogyx will be filing its own investigational new drug application (“IND”) for CD22 with the FDA. As consideration for the transfer of ~~approximately~~rights to the CRADA, BryoLogyx has agreed to pay to the Company 2% of the gross revenue received in connection with the sale of bryostatin products, up to an aggregate payment amount of $441 million. No such revenues have been earned as of June 30,~~000~~ 2020.

~~Note 8 – Common Stock Warrants:~~

~~The following is a summary of common stock warrant activity for the three months ended March 31, 2020:~~14

	Number of shares
Warrants outstanding January 1, 2020		10,482,158
Warrants issued		11,249,100
Warrants exercised		-
Warrants outstanding March 31, 2020		21,731,258

Table of Contents

~~Pursuant to its January 2020 offering, the Company issued a total of 11,109,100 five-year warrants to purchase shares of common stock at $1.65 per share (See~~ Note 4 – 6,Related ~~“Common~~Party ~~Stock”~~Transactions ~~above for details of the January 2020 offering.) Of the total warrants issued, 10,909,100 were issued to investors~~ and ~~200,000~~Licensing to/ ~~the~~Research ~~Company’s financial advisor.~~Agreements:

~~The~~Cognitive ~~Company~~Research ~~used the Black-Scholes valuation model to calculate the fair value of warrants. The fair value of the 140~~Enterprises,~~000~~ warrants issued in connection with certain consulting agreements for the three months ended March 31, 2020 was estimated at the grant date using the following weighted average assumptions: Dividend yield 0%; Expected term five years; Volatility 99Inc.~~4%;~~ ~~and Risk-free interest rate 0.88%. The weighted average grant date fair value of warrants granted for the three months ended March 31, 2020 is $0.8352 per warrant, or approximately $117,000.~~(“CRE”)

AsJames ~~of March 31~~Gottlieb, ~~2020,~~ ~~the~~who ~~Company’s~~resigned ~~warrants~~as bya ~~exercise~~director ~~price~~of ~~were~~the asCompany ~~follows:~~on ~~147~~February 21,~~606~~ ~~warrants~~2020, ~~exercisable~~serves atas ~~$0.32,~~a ~~114~~director of CRE,~~000~~ ~~warrants~~and ~~exercisable at~~Shana ~~$0.86~~Phares, ~~140,000~~who ~~warrants~~resigned ~~exercisable~~as ata ~~$1.13,~~director ~~11,109,100~~of ~~warrants~~the ~~exercisable~~Company aton ~~$1.65~~February 25, 42020,~~916,603~~ ~~warrants~~served ~~exercisable~~as atPresident ~~$4.37, 114,000~~and ~~warrants~~Chief ~~exercisable~~Executive atOfficer $5of CRE.~~31,~~ ~~100,240~~CRE ~~warrants~~is ~~exercisable~~a atstockholder ~~$6.25,~~of ~~382~~a corporation,~~887~~ ~~warrants~~Neuroscience ~~exercisable~~Research atVentures, $6Inc.~~40,~~ 24(“NRV,~~000~~ ~~warrants exercisable at $7~~Inc.12”), ~~90,000~~which ~~warrants~~owned ~~exercisable~~approximately ~~at $7~~1.~~13,~~2% ~~3,772,908~~of ~~warrants~~the ~~exercisable~~Company’s atoutstanding ~~$12.80~~common ~~and~~stock ~~819,914~~as ~~warrants~~of ~~exercisable at~~June ~~$32~~30, 2020.~~00.~~

~~Note~~Effective 9October 31, –2012, ~~Subsequent~~Neurotrope ~~Events:~~Bioscience executed a Technology License and Services Agreement (the “TLSA”) with CRE, a related party, and NRV II, LLC (“NRV II”), another affiliate of CRE, which was amended by Amendment No. 1 to the TLSA as of August 21, 2013. As of February 4, 2015, the parties entered into an Amended and Restated Technology License and Services Agreement (the “CRE License Agreement”). The CRE License Agreement provides research services and has granted Neurotrope Bioscience the exclusive and nontransferable world-wide, royalty-bearing right, with a right to sublicense (in accordance with the terms and conditions described below), under CRE’s and NRV II’s respective right, title and interest in and to certain patents and technology owned by CRE or licensed to NRV II by CRE as of or subsequent to October 31, 2012, to develop, use, manufacture, market, offer for sale, sell, distribute, import and export certain products or services for therapeutic applications for AD and other cognitive dysfunctions in humans or animals (the “Field of Use”). Additionally, the TLSA specifies that all patents that issue from a certain patent application shall constitute licensed patents and all trade secrets, know-how and other confidential information claimed by such patents constitute licensed technology under the CRE License. The CRE License Agreement terminates on the later of the date (a) the last of the licensed patent expires, is abandoned, or is declared unenforceable or invalid or (b) the last of the intellectual property enters the public domain.

~~Registered~~After ~~Direct~~the ~~Offering~~initial Series A Stock financing, the CRE License Agreement required Neurotrope Bioscience to enter into scope of work agreements with CRE as the preferred service provider for any research and development services or other related scientific assistance and support services. There were no such statements of work agreements required to be entered into during the six months ended June 30, 2020 or fiscal year 2019.

~~During~~In ~~April~~addition, ~~May~~the ~~and June~~CRE ~~2020,~~License ~~four~~Agreement ~~investors~~requires in the Company’s ~~January~~to ~~22,~~pay ~~2020,~~CRE ~~registered~~a ~~direct~~“Fixed ~~offering~~Research ~~converted~~Fee” 4of $1 million per year for five years,~~497.5~~ ~~shares~~commencing ofon the date that the Company completes a Series D B Preferred Stock ~~into~~financing anresulting ~~aggregate~~in proceeds of 2at least $25,~~725~~000,~~759~~000 ~~shares~~(the “Series B Financing “) which shall also include the proceeds from the exercise of any Series A warrants, Series B warrants, and Series E warrants. This Fixed Research Fee has not been triggered. The CRE License Agreement also requires the payment of royalties ranging between 2% and 5% of the Company’s ~~common~~revenues ~~stock~~generated from the licensed patents and other intellectual property, dependent upon the percentage ownership that NRV, Inc. holds in the Company.

In addition, on November 10, 2018, Neurotrope Bioscience and CRE entered into a second amendment (the “~~Universal~~Second ~~Shelf~~Amendment”) ~~Registration Statement~~to the TLSA pursuant to which CRE granted certain patent prosecution and maintenance rights to Neurotrope Bioscience. Under the Second Amendment, Neurotrope Bioscience will have the sole and exclusive right and the obligation, to apply for, file, prosecute and maintain patents and applications for the intellectual property licensed to Neurotrope Bioscience, and pay all fees, costs and expenses related to the licensed intellectual property. Neurotrope Bioscience paid CRE $10,000 in consideration of this Second Amendment.

On April 17, 2020, the Company filed a “universal shelf” registration statement on Form S-3 with the Securities and Exchange Commission (the “SEC”), which provides for the issuance by the Company of up to $100,000,000 in common stock, preferred stock, debt securities, warrants and rights, either individually or in units. The registration statement was declared effective by the SEC on April 24, 2020.

17Note 5 – Commitments:

~~Planned~~Clinical ~~Merger~~Trial ~~and~~Services ~~Spin-Off~~Agreements

On May 174, ~~2020~~2018, ~~the Company,~~Neurotrope ~~Petros~~Bioscience ~~Pharmaceuticals,~~executed ~~Inc.,~~ a ~~Delaware~~Services ~~corporation~~Agreement ~~formed for~~ (the ~~purposes~~“2018 ofServices ~~effecting~~Agreement”) ~~transactions~~with ~~contemplated~~Worldwide ~~by the~~Clinical ~~Merger~~Trials, ~~Agreement~~Inc. (~~as defined below) (~~“~~Petros~~WCT”),. PMThe ~~Merger~~2018 ~~Sub~~Services 1,Agreement ~~LLC,~~related ato ~~Delaware~~services ~~limited~~for ~~liability~~Neurotrope ~~company~~Bioscience’s ~~and a~~Phase ~~wholly-owned~~2 ~~subsidiary~~confirmatory ofclinical ~~Petros~~study ~~(“Merger~~assessing ~~Sub~~the ~~1”)~~safety, PNtolerability ~~Merger~~and ~~Sub~~efficacy 2,of ~~Inc.,~~bryostatin ain ~~Nevada~~the ~~corporation~~treatment ~~and~~of amoderately ~~wholly-owned subsidiary~~severe ofto ~~Petros~~severe AD (the “~~Merger~~2018 ~~Sub 2~~Study”),. ~~and~~Pursuant ~~Metuchen~~to ~~Pharmaceuticals LLC,~~the aterms ~~Delaware~~of ~~limited~~the ~~liability~~2018 ~~company (“Metuchen”)~~Services Agreement, ~~entered~~WCT ~~into~~provided anservices ~~Agreement~~to ~~and~~target ~~Plan~~enrollment of ~~Merger~~approximately ~~(the~~one ~~“Merger~~hundred ~~Agreement”~~(100) 2018 Study subjects. The ~~Merger~~total ~~Agreement provides~~estimated budget for ~~(1)~~ the ~~merger of Merger Sub 1~~services, ~~with~~including ~~and~~pass-through ~~into Metuchen~~costs, ~~with~~drug ~~Metuchen~~supply ~~surviving~~and asother astatistical ~~wholly-owned~~analyses, ~~subsidiary~~was ofapproximately ~~Petros (the~~$7.8 ~~“Metuchen~~million. ~~Merger”)~~The ~~and~~Company ~~(2)~~has ~~the~~incurred ~~merger~~all of ~~Merger~~the ~~Sub~~expenses 2associated with ~~and into~~ the ~~Company,~~2018 ~~with~~Services ~~the~~Agreement ~~Company surviving~~ as a ~~wholly-owned subsidiary~~ of ~~Petros~~June ~~(the “Neurotrope Merger” and together with the Metuchen Merger~~30, ~~the “Mergers”)~~2020.

AsOn aJuly ~~result of the Metuchen Merger~~23, ~~each outstanding common unit or preferred unit of Metuchen will be exchanged for a number of shares of Petros common stock equal to the quotient resulting from the formula of (i) 95~~2020,~~908,502~~ ~~divided by (ii) the number of fully-diluted units of the Company outstanding immediately prior to the effective time of the Mergers. As a result of the~~ Neurotrope ~~Merger,~~Bioscience ~~each~~entered ~~outstanding~~into ~~share~~an ofadditional ~~the~~services ~~Company’s~~agreement ~~common stock will be exchanged for one~~ (~~1) share of Petros common stock and each outstanding share of~~ the ~~Company’s~~“2020 ~~preferred~~Services ~~stock will be exchanged for one (1~~Agreement”) ~~share~~with ~~of Petros preferred stock~~WCT. ~~Following~~The ~~the~~2020 ~~Mergers,~~Services ~~the~~Agreement ~~Petros~~relates ~~Preferred Stock will have substantially the same conversion rights (proportionally adjusted~~ to ~~give~~services ~~effect~~for to the ~~Mergers), powers, rights and privileges as the~~ Company’s ~~preferred~~Phase ~~stock prior~~2 toclinical ~~the~~study ~~Mergers.~~assessing Inthe ~~addition~~safety, ~~each~~tolerability outstanding option to purchase the Company’s common stock or outstanding warrant to purchase common stock that has not previously been exercised prior to the closing of the Mergers (the “Closing”) will be converted into equivalent options and warrants to purchase shares of Petros common stock and will be adjusted to give effect to the exchange ratios set forth in the Merger Agreement. All the options will become immediately exercisable pursuant to the change of control provisions contained therein.

Upon Closing, the current shareholders of the Company will own approximately 20.0% of the combined company and the current Metuchen investors will own approximately 80.0% of the combined company. The Board of Directors of Petros is expected to consist of nine members, five of whom will be designated by Metuchen and four of whom will be designated by the Company. Upon closing, Metuchen will be the accounting acquirer in the Mergers, but not the legal acquirer. As such, the Mergers are deemed a reverse recapitalization under the guidance of ASC 805 and, upon consummation, the historical financial statements of Metuchen will become the historical financial statements of the combined company.15

InTable ~~connection with the Mergers, the Company plans to spin-off (the “Spin-Off”) its wholly-owned subsidiary, Neurotrope Bioscience, Inc. Substantially all~~ of the consolidated operations of the Company were conducted through such subsidiary and substantially all of the consolidated operating assets and liabilities of the Company reside in such subsidiary. The Spin-Off is planned to be made as a distribution to the Company’s stakeholders as of a record date prior to the Mergers, but the distribution is currently contemplated to occur after the Closing. The spun-off entity will be capitalized with all cash in excess of the $20 million which is to be retained in the combined company, subject to adjustment for the proceeds from any exercise of the Company’s warrants between the date of execution of the Merger Agreement and closing of the Mergers. The proceeds of any such warrant exercises will be split 80% to Metuchen and 20% to the spun-off entity. The record date for the Spin-Off, the ratio of the Spin-Off shares distributed to the Company shareholders held as of the record date and the extent to which other stakeholders of the Company may be entitled to participate in the Spin-Off have not yet been determined.Contents

~~Consummation~~long-term ~~of the~~efficacy ~~Mergers is subject to certain closing conditions, including, among other things, approval by the common stockholders~~ of ~~the~~ ~~Company~~bryostatin ~~and~~in ~~Metuchen and~~ the ~~listing~~treatment of ~~the~~moderately ~~Petros~~severe ~~common~~AD ~~stock~~subjects ~~on the Nasdaq Stock Market after the Mergers. The Company has~~ not ~~yet~~receiving ~~set~~memantine atreatment ~~date for its shareholder meeting The Merger Agreement contains certain termination rights for both~~ (the ~~Company~~“2020 ~~and Metuchen, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $1~~Study”).~~0 million plus third party expenses incurred by the terminating party.~~

Pursuant to the terms of the 2020 Services Agreement, WCT ~~Letter~~will provide services to enroll approximately one hundred (100) 2020 Study subjects. The Company and Neurotrope Bioscience expect that the first 2020 Study site will be initiated during the third quarter of ~~Intent~~2020. The total estimated budget for the services, including pass-through costs, is approximately $9.8 million. As previously disclosed on January 22, 2020, the Company was awarded a $2.7 million grant from the National Institutes of Health (“NIH”), which award will be used to support the 2020 Study, resulting in an estimated net budgeted cost of the 2020 Study to the Company of $7.1 million. In connection with their entry into the 2020 Services Agreement, the parties agreed that WCT would invoice Neurotrope Bioscience for the following advance payments: (i) services fees of approximately $490,000; (ii) pass-through expenses of approximately $140,000; and (iii) investigator/institute fees of approximately $310,000, which in each case will be due within ten (10) days of Neurotrope Bioscience’s receipt of such invoice. Remaining amounts due to WCT will be paid as services and related expenses are incurred. Neurotrope Bioscience may terminate the 2020 Services Agreement without cause upon sixty (60) days prior written notice.

OnPursuant ~~May~~to ~~28,~~the ~~2020,~~terms ~~Neurotrope Bioscience~~of ~~entered into~~ a letter of intent ~~with~~between ~~WCT~~Neurotrope ~~(the~~Bioscience ~~“LOI”)~~and WCT, ~~pursuant~~dated toMay ~~which~~28, ~~the~~2020, ~~parties~~which ~~agreed~~anticipated tothe ~~negotiate a~~entry ~~definitive~~into ~~agreement for~~ the ~~provision~~2020 ofServices ~~clinical~~Agreement, ~~trial~~Neurotrope ~~development~~Bioscience ~~services~~paid byto WCT ~~in connection with~~ a ~~proposed~~cash ~~Phase~~fee 2of ~~study assessing~~approximately ~~safety,~~$0.6 ~~tolerability~~million ~~and~~as ~~long-term~~an ~~efficacy~~advance ~~of bryostatin~~ in ~~the~~order ~~treatment~~to offund ~~moderately~~the ~~severe~~initial ADcommitment ~~subjects~~and ~~not~~certain ~~receiving memantine~~upfront ~~treatment.~~costs ~~Pursuant~~of tothird ~~the~~party ~~terms~~vendors. As of ~~the~~June ~~LOI~~30, ~~Neurotrope~~2020, ~~Bioscience~~approximately ~~agreed~~$200,000 toof ~~pay~~expenses tohave ~~WCT~~been aincurred ~~cash~~in ~~fee~~connection ofwith ~~approximately $0.6~~the ~~million~~2020 asServices anAgreement, ~~advance~~which inwas ~~order~~applied toagainst ~~fund~~ the ~~initial~~advance ~~commitment~~paid ~~and~~to ~~certain~~WCT. (See ~~upfront~~Note ~~costs~~9, of“Subsequent ~~third party vendors~~Events”).

~~Agreements~~Consulting ~~with BryoLogyx~~Agreements

On ~~June~~August 94, ~~2020~~2016, the Company entered into a ~~supply~~consulting agreement ~~(the~~with ~~“Supply~~SM ~~Agreement”)~~Capital ~~with~~Management, ~~BryoLogyx~~LLC ~~Inc.~~ (“~~BryoLogyx~~SMCM”), ~~pursuant~~a tolimited ~~which~~liability ~~BryoLogyx agreed~~company toowned ~~serve~~and ascontrolled by the Company’s ~~exclusive~~Chairman ~~supplier~~ of ~~synthetic~~the ~~Bryostatin-1~~Board, Mr. ~~Pursuant~~Joshua toN. Silverman (the ~~terms~~“Consulting ofAgreement”). ~~the~~Mr. ~~Supply~~Silverman ~~Agreement,~~ was appointed to the ~~Company~~Board ~~has~~on ~~agreed~~August 4, 2016. Pursuant to ~~place~~the anConsulting ~~initial~~Agreement, ~~order~~SMCM ofshall ~~one~~provide ~~gram~~consulting ofservices ~~current~~which ~~good~~shall ~~manufacturing~~include, ~~practice~~but ~~(“cGMP”)~~not ~~synthetic Bryostatin-1~~be aslimited anto, ~~active~~providing ~~pharmaceutical~~business ~~ingredient~~development, tofinancial becommunications ~~used~~and inmanagement atransition ~~drug~~services, ~~product~~for ~~(“API”)~~a one-year period, subject to beannual ~~shipped~~review bythereafter. ~~BryoLogyx within~~SMCM’s 60annual ~~days~~consulting ~~after~~fee ~~the~~is ~~date~~$120,000, ~~upon~~payable ~~which~~by ~~BryoLogyx~~the ~~obtains~~Company ~~cGMP~~in ~~certification~~monthly ~~for~~installments ~~production~~ of ~~API~~$10,000. ~~which~~In ~~certification~~addition, SMCM shall be ~~obtained~~reimbursed nofor ~~later~~(i) ~~than~~all ~~March~~pre-approved ~~31,~~travel ~~2021.~~in ~~The~~connection ~~Company~~with ~~may~~the ~~place~~consulting ~~additional~~services ~~orders~~to ~~for~~the ~~API~~Company, ~~beyond~~(ii) upon submission to the ~~initial~~Company ~~order~~of byappropriate ~~making~~vouchers ~~a written~~and ~~request~~receipts, tofor ~~BryoLogyx~~all noother ~~later~~out-of-pocket ~~than~~expenses ~~six~~reasonably ~~months~~incurred ~~prior~~by toSMCM ~~the~~in ~~requested~~furtherance ~~delivery~~of ~~date~~the Company’s business.

InEffective ~~connection~~as ~~with the~~of ~~Supply Agreement, on~~ June 91, ~~2020~~2019, the Company entered into a ~~transfer~~consulting agreement ~~(the~~with ~~“Transfer~~Katalyst ~~Agreement~~Securities LLC (“Katalyst”), ~~with BryoLogyx.~~pursuant ~~Pursuant~~ to ~~the~~which ~~terms~~Katalyst ~~of the Transfer Agreement, the Company~~ agreed to ~~assign~~provide ~~and~~investment ~~transfer~~banking toconsulting ~~BryoLogyx~~services ~~all~~to of the Company~~’s right,~~ ~~title~~(the ~~and~~“Katalyst ~~interest~~Agreement”). inThe ~~and~~term toof ~~that~~the ~~certain~~agreement ~~Cooperative~~continues ~~Research~~until ~~and~~the ~~Development~~second ~~Agreement,~~anniversary ~~dated~~from asthe ofeffective ~~January~~date ~~29,~~and ~~2019~~may ~~(the~~ be ~~“CRADA”),~~canceled by ~~and~~either ~~between~~Katalyst or the Company ~~and~~with ~~the~~30 ~~U.S.~~days’ ~~Department~~advance ofnotice. ~~Health~~As ~~and~~consideration ~~Human~~for ~~Services,~~its asservices ~~represented~~under by the ~~National Cancer~~Katalyst ~~Institute~~Agreement, of the ~~National~~Company ~~Institutes~~agreed ofto ~~Health~~pay ~~(“NCI”), under which Bryostatin-1’s ability~~ to ~~modulate~~Katalyst ~~CD22~~$25,000 inper ~~patients~~month, ~~with~~plus ~~relapsed/refractory~~five-year ~~CD22+~~warrants ~~disease has been evaluated~~ to ~~date.~~purchase ~~The~~90,000 ~~transfer~~shares isof ~~subject to~~ the ~~receipt of NCI~~Company’s ~~consent.~~common ~~The~~stock ~~Company~~on ~~further agreed that, following~~ the ~~transfer~~effective date of the ~~CRADA,~~Katalyst itAgreement ~~will~~and ~~assign~~on ~~to BryoLogyx~~each ~~its~~of ~~investigational~~the ~~new~~three ~~drug~~month ~~application~~anniversaries ~~(“IND”)~~following ~~for~~the ~~CD22~~effective ~~currently~~date. onThe ~~file~~warrants ~~with~~have ~~the~~an ~~U.S.~~exercise ~~Food~~price ~~and~~equal ~~Drug~~to ~~Administration. As consideration for~~ the ~~transfer~~closing price of the ~~CRADA~~Company’s ~~and~~stock ~~IND,~~price ~~BryoLogyx~~on ~~has agreed to pay to~~ the ~~Company~~date 2% of ~~the~~issuance. ~~gross~~Katalyst’s ~~revenue~~cash ~~received in~~and ~~connection~~stock-based ~~with~~compensation ~~the~~is ~~sale~~included ofas ~~bryostatin~~general ~~products,~~and upadministrative toexpenses anin ~~aggregate~~the ~~payment~~Company’s ~~amount~~statement of ~~$1 million~~operations.

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Effective as of June 5, 2019, the Company entered into a consulting agreement with GP Nurmenkari, Inc. (“GPN”) (the “GPN Agreement”), pursuant to which GPN agreed to provide investment banking consulting services to the Company. The term of the agreement continues until the second anniversary from the effective date and may be canceled by either GPN or the Company with 30 days’ advance notice. As consideration for its services under the GPN Agreement, the Company agreed to pay to GPN $8,000 per month, plus five-year warrants to purchase 24,000 shares of the Company’s common stock on the effective date and on each of the three month anniversaries following the effective date. The warrants have an exercise price equal to the closing price of the Company’s stock price on the date of issuance. On February 1, 2020, the Company amended the GPN Agreement, increasing the cash compensation to $17,500 per month and increasing the number of warrants issued each three-month period from 24,000 to 50,000. GPN’s cash and stock-based compensation is included as general and administrative expenses in the Company’s statement of operations.

Note 6 – Common and Preferred Stock:

Adoption of a Shareholder Rights Plan

Overview

On September 9, 2019, the Company announced that its Board had adopted a shareholder rights plan (the “Rights Plan”). The Rights Plan is intended to protect the interests of the Company’s stockholders and enable them realize the full potential value of their investment by reducing the likelihood that any person or group gains control of the Company through open market accumulation or other tactics without appropriately compensating all stockholders. Pursuant to the Rights Plan, the Company issued, by means of a dividend, one preferred share purchase right for each outstanding share of the Company’s common stock to shareholders of record on the close of business on September 19, 2019. Initially, these Rights (as defined below) will trade with, and be represented by, the shares of the Company’s common stock. The Rights will generally become exercisable only if any person (or any persons acting as a group) acquires 15% or more of the Company’s outstanding common stock (the “Acquiring Person”) in a transaction not approved by the Board, subject to certain exceptions, as explained below.

If the Rights become exercisable, all holders of Rights, other than the Acquiring Person, will be entitled to acquire shares of the Company’s common stock at a 50% discount or the Company may exchange each Right held by such holders for one share of its common stock. In such situation, Rights held by the Acquiring Person would become void and will not be exercisable. If any person at the time of the first public announcement of the Rights Plan owned more than the triggering percentage then that stockholder’s existing ownership percentage will be grandfathered, although, with certain exceptions, the Rights will become exercisable if at any time after the announcement of the Rights Plan such stockholder increases its ownership of the Company’s common stock.

Unless earlier redeemed, terminated or exchanged pursuant to the terms of the Rights Plan, the Rights will expire at the close of business on September 8, 2021. The Board may terminate the Rights Plan before that date if the Board determines that there is no longer a threat to shareholder value.

Key Features

On September 9, 2019, the Board declared a dividend of one preferred share purchase right (a “Right”), payable on September 19, 2019, for each share of common stock, par value $0.0001 per share, of the Company outstanding on September 19, 2019, to the stockholders of record on that date. In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of September 9, 2019, between the Company and Philadelphia Stock Transfer, Inc., as rights agent. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Preferred Stock, par value $0.0001 per share (the “Preferred Shares”), of the Company at a price of $20 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. Each one one-thousandth of a Preferred Share entitles the holder thereof to receive (i) the same dividends and liquidation rights as if the holder held one share of common stock and will be treated the same as one share of common stock in the event of a merger, consolidation or other share exchange and (ii) one vote on all matters submitted to a vote of the Company’s stockholders, in each case subject to adjustment as described in the Certificate of Designations, Preferences and Rights of Series C Preferred Stock of Neurotrope Inc. Until a right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. As of June 30, 2020, there is no Series C Preferred Stock outstanding.

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January 2020 Offering

On January 22, 2020, the Company entered into a securities purchase agreement with certain institutional investors and certain pre-existing high net worth individual investors. Pursuant to the terms of the purchase agreement, the Company issued to the purchasers in a registered offering an aggregate of 18,000 shares of Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”) (which are convertible into a total of 10,909,100 shares of common stock) and Series H warrants to purchase up to an aggregate of 10,909,100 shares of common stock for an aggregate gross purchase price of approximately $18 million. The warrants are exercisable at a price of $1.65 per share immediately upon issuance. They feature a five-year term and a right by the Company, in certain circumstances, to call for the cancellation of up to 50% of the shares of common stock underlying such warrants for consideration equal to $0.0001 per share of underlying common stock in the event the value weighted average price of the Company’s common stock exceeds $5.00 for each of 10 consecutive trading days in a 30-day calendar period. The Series D Preferred Stock and the Series H warrants are immediately separable and were issued separately. The net proceeds to the Company from the offering were approximately $16.4 million, after deducting financial advisory fees and offering expenses paid by the Company.

In connection with the offering, on January 22, 2020, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (the “Series D Certificate of Designation”) establishing and designating the rights, powers and preferences of the Series D Preferred Stock. The Company designated 18,000 shares of Series D Preferred Stock. Pursuant to the Series D Certificate of Designation, the holders of the Series D Preferred Stock are entitled, among other things, to the right to participate in any dividends and distributions paid to common stockholders on an as-converted basis. The Series D Preferred Stock has no voting rights except as required by law. The Series D Preferred Stock is convertible at any time and from time to time without the payment of additional consideration into shares of the Company’s common stock at a conversion price of $1.65 per share, subject to certain adjustments and has a stated value of $1,000 per share of Series D Preferred Stock. In the event of any liquidation or dissolution of the Company, the Series D Preferred Stock will rank junior to the Company’s Series C Preferred Stock under the Rights Agreement, if applicable, and any other class of preferred stock of senior rank to the Series D Preferred Stock, senior to any other class of preferred stock and to the Company’s common stock in the distribution of assets, to the extent legally available for distribution.

During the six months ended June 30, 2020, 17,500 shares of Series D Preferred Stock were converted into an aggregate of 10,606,066 shares of common stock. The remaining 500 shares of Series D Preferred Stock are convertible into an aggregate of 303,030 shares of common stock.

“Universal Shelf” Registration Statement

Note 7 – Stock Options:

Option Grants

The following is a summary of stock option activity under the stock option plans for the six months ended June 30, 2020:


				Weighted-
				Average
		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
	Number of	Exercise		Term	Value
	Shares	Price		(Years)	($ in thousands)
Options outstanding at January 1, 2020	2,366,519	$	12.86	7.5		49.3
Options granted	60,000	$	0.82			20.4
Less options forfeited	(27,282)	$	5.30
Less options expired/cancelled	(127,664)	$	10.76
Less options exercised	—	$	—
Options outstanding at June 30, 2020	2,271,573	$	12.75	7.1	$	69.7
Options exercisable at June 30, 2020	1,789,278	$	14.69	7.1	$	13.4

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Pursuant to the Company’s non-employee director compensation plan, in March 2020, the Company granted stock options to purchase an aggregate of 60,000 shares of the Company’s common stock to six members of the Board. The stock options have an exercise price of $0.82 per share and an expiration date that is ten years from the date of issuance. All of these options vest upon the first anniversary of the issuance date.

As of June 30, 2020, there was approximately $1.3 million of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted average period of 1.1 years.

The Company used the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of stock options issued for the six months ended June 30, 2020 was estimated at the grant date using the following weighted average assumptions: Dividend yield 0%; Expected term 10 years; an aggregate volatility based upon a blend of the Company’s and guideline company historical volatility of 99.46%; and Risk-free interest rate 0.92%. The weighted average grant date fair value of options granted for the six months ended June 30, 2020 is $0.73 per option, or a total for all grants of approximately $44,000.

Note 8 – Common Stock Warrants:

The following is a summary of common stock warrant activity for the six months ended June 30, 2020:


		Number
		of shares
Warrants outstanding January 1, 2020		10,482,158
Warrants issued		11,389,100
Warrants exercised		—
Warrants outstanding June 30, 2020		21,871,258

Pursuant to its January 2020 offering, the Company issued a total of 11,109,100 five-year warrants to purchase shares of common stock at $1.65 per share (See Note 6, “Common Stock” above for details of the January 2020 offering.) Of the total warrants issued, 10,909,100 were issued to investors and 200,000 to the Company’s financial advisor.

As of June 30, 2020, the Company’s warrants by exercise price were as follows: 147,606 warrants exercisable at $0.32, 114,000 warrants exercisable at $0.86, 140,000 warrants exercisable at $1.13, 140,000 warrants exercisable at $1.46, 11,109,100 warrants exercisable at $1.65, 4,916,603 warrants exercisable at $4.37,114,000 warrants exercisable at $5.31, 100,240 warrants exercisable at $6.25, 382,887 warrants exercisable at $6.40, 24,000 warrants exercisable at $7.12, 90,000 warrants exercisable at $7.13, 3,772,908 warrants exercisable at $12.80 and 819,914 warrants exercisable at $32.00.

Note 9 – Subsequent Events:

First Amendment to Merger Agreement and Employee Lease Agreement

On July 23, 2020, the Company, Petros, Merger Sub 1, Merger Sub 2 and Metuchen entered into the Merger Agreement Amendment which provides, among other things, that the aggregate number of shares of Petros common stock to be issued to the Metuchen securityholders in the Mergers is 82,587,877. In addition, upon the achievement of certain targets set forth in the Merger Agreement Amendment, Petros will deposit earnout payments (the “Earnout Payments”) with the exchange agent for distribution to each unitholder of Metuchen prior to the closing of the Metuchen Merger in accordance with such unitholder’s earnout pro rata percentage as follows:

●

If at any time following the closing of the Metuchen Merger and prior to July 31, 2022, the closing price per share of Petros common stock is:

(i)

greater than or equal to $1.8125 for a period of twenty (20) consecutive trading days, then the earnout payment will be equal to 3,330,156 shares of Petros common stock (“First Milestone Earnout Payment”);

(ii)

greater than or equal to $2.175 for a period of twenty (20) consecutive trading days, then the earnout payment will be equal to 3,330,156 shares of Petros common stock (the “Second Milestone Earnout Payment”);

(iii)

greater than or equal to $2.5375 for a period of twenty (20) consecutive trading days, then the earnout payment will be equal to 3,330,156 shares of Petros common stock (the “Third Milestone Earnout Payment”); and

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(iv)

greater than or equal to $2.90 for a period of twenty (20) consecutive trading days, then the earnout payment will be equal to 3,330,156 shares of Petros common stock (the “Final Milestone Earnout Payment”).

Each Milestone Earnout Payment is only achievable and payable one time and no further payments with respect to any individual Milestone Earnout Payment will be achievable following its initial achievement. In no event will the sum of the First Milestone Earnout Payment, the Second Milestone Earnout Payment, the Third Milestone Earnout Payment and the Final Milestone Earnout Payment be greater than 13,320,624 shares of Petros common stock. If Milestones achieved, ownership percentages will be approximately 80% and 20% to former Metuchen and Neurotrope shareholders, respectively. Each reference to share prices and Petros common stock will be subject to adjustment for reverse and stock forward splits, stock dividends, stock combinations and other similar transaction of the Petros common stock that occur after the date of the Merger Agreement.

The Merger Agreement Amendment also amends and restates Section 9.2 of the Merger Agreement to provide that for so long as at least one of Josh Silverman, Bruce Bernstein, Charles Ryan and Ivan Gergel (the “Continuing Neurotrope Directors”) is serving on the board of directors of Petros, the Continuing Neurotrope Directors will have sole authority on behalf of Petros to approve any amendment to the Merger Agreement on behalf of the board of directors of Petros. The Merger Agreement Amendment additionally amends and restates certain defined terms in the Merger Agreement, including the definition of “Excess Cash” to adjust for costs associated with Charles Ryan’s employment and assistance to Metuchen and certain investor relations and public relations costs. Excess Cash relates to the amount of cash to be distributed to Neurotrope SpinCo in connection with the Spin-Off.

In connection with the entry into the Merger Agreement Amendment, on July 23, 2020, the Company, Neurotrope Bioscience and Metuchen entered into an Employee Lease Agreement (the “Employee Lease Agreement”), pursuant to which the Company and Neurotrope Bioscience agreed to lease the services of Dr. Charles Ryan, Chief Executive Officer of the Company, to Metuchen prior to the closing of the Metuchen Merger. Pursuant to the terms of the Employee Lease Agreement, Dr. Ryan will devote no more than 75% of his working time performing services to Metuchen and Metuchen will pay 75% of the costs associated with Dr. Ryan’s employment from the period beginning on June 1, 2020 through the closing of the Metuchen Merger, including but not limited to, the costs for all compensation and benefits paid to, for or on behalf Dr. Ryan (the “Fees”). The Fees pursuant to the Employee Lease Agreement will act to reduce the amount of cash that is retained by Petros following the closing of the Metuchen Merger, provided, however, that if the Mergers are not consummated and the Merger Agreement is terminated pursuant to its terms, Metuchen will not be required to pay any of the Fees.

WCT Services Agreement

On July 23, 2020, Neurotrope Bioscience entered into a services agreement (the “2020 Services Agreement”) with WCT. The 2020 Services Agreement relates to services for the Company’s Phase 2 clinical study assessing the safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment (the “2020 Study”).

Pursuant to the terms of the 2020 Services Agreement, WCT will provide services to enroll approximately one hundred (100) 2020 Study subjects. The Company and Neurotrope Bioscience expect that the first 2020 Study site will be initiated during the third quarter of 2020. The total estimated budget for the services, including pass-through costs, is approximately $9.8 million. As previously disclosed on January 22, 2020, the Company has received a $2.7 million award from the National Institutes of Health, which award will be used to support the 2020 Study, resulting in an estimated net budgeted cost of the 2020 Study to the Company of $7.1 million. In connection with their entry into the 2020 Services Agreement, the parties agreed that WCT would invoice Neurotrope Bioscience for the following advance payments: (i) services fees of approximately $490,000; (ii) pass-through expenses of approximately $140,000; and (iii) investigator/institute fees of approximately $310,000, which in each case will be due within ten (10) days of Neurotrope Bioscience’s receipt of such invoice. Neurotrope Bioscience may terminate the 2020 Services Agreement without cause upon sixty (60) days prior written notice.

Of the total cost of the trial, as of August 5, 2020, approximately $1.5 million has been funded against the total trial cost.

SRAX Consulting Agreement

Effective as of July 3, 2020, the Company entered into a consulting agreement with SRAX, Inc. (“SRAX”) (the “SRAX Agreement”), pursuant to which SRAX agreed to provide investor relations consulting services to the Company. The term of the agreement continues until the first anniversary from the effective date and may be canceled by either SRAX or the Company with 30 days’ advance notice after the one-year term. As consideration for its services under the SRAX Agreement, the Company agreed to pay to SRAX 103,450 restricted shares of the Company’s common stock which vested immediately upon receipt.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this report and our annual report on Form 10-K for the year ended December 31, 2019.

The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on the unaudited financial statements contained in this report, which we have prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.

Overview

We are a biopharmaceutical company with product candidates in pre-clinical and clinical development. Neurotrope Bioscience began operations in October 2012. We are principally focused on developing a product platform based upon a drug candidate called bryostatin for the treatment of Alzheimer’s disease (“AD”), which is in the clinical testing stage. We are also evaluating bryostatin for other neurodegenerative or cognitive diseases and dysfunctions, such as Fragile X syndrome, Multiple Sclerosis, and Niemann-Pick Type C disease, which have undergone pre-clinical testing. In addition, we are also in the early stages of testing bryostatin activity which may lead to applications in Leukemia and Lymphoma. Neurotrope has been a party to a technology license and services agreement with the original Blanchette Rockefeller Neurosciences Institute (“BRNI”) (which has been known as Cognitive Research Enterprises, Inc. (“CRE”) since October 2016), and its affiliate NRV II, LLC, which we collectively refer to herein as “CRE,” pursuant to which we now have an exclusive non-transferable license to certain patents and technologies required to develop our proposed products. Neurotrope Bioscience was formed for the primary purpose of commercializing the technologies initially developed by BRNI for therapeutic applications for AD or other cognitive dysfunctions. These technologies have been under development by BRNI since 1999 and, until March 2013, had been financed through funding from a variety of non-investor sources (which include not-for-profit foundations, the ~~National Institutes of Health~~NIH, which is part of the U.S. Department of Health and Human Services, and individual philanthropists). From March 2013 forward, development of the licensed technology has been funded principally through the Company in collaboration with CRE.

Planned Merger and Spin-Off

On May 17, 2020, we entered into the Original Merger Agreement with Petros, Merger Sub 1, Merger Sub 2 and Metuchen, as subsequently amended by the Merger Agreement Amendment. The Merger Agreement provides for (1) the merger of Merger Sub 1, with and into Metuchen, with Metuchen surviving as a wholly-owned subsidiary of Petros and (2) the merger of Merger Sub 2 with and into us, with us surviving as a wholly-owned subsidiary of Petros.

As a result of the Metuchen Merger, each outstanding common unit or preferred unit of Metuchen will be exchanged for a number of shares of Petros ~~common~~ ~~stock~~Common Stock equal to the quotient resulting from the formula of (i) 9582,~~908~~587,~~502~~877 divided by (ii) the number of ~~our~~ fully-diluted units of Metuchen outstanding immediately prior to the effective time of the Mergers, subject to adjustment. In addition, each securityholder of Metuchen prior to the Mergers will receive a right to receive such securityholder’s pro rata share of an aggregate of 13,320,624 shares of Petros Common Stock potentially issuable upon the achievement of certain milestones set forth in the Merger Agreement. As a result of the Neurotrope Merger, each outstanding share of our common stock will be exchanged for one (1) share of Petros ~~common~~Common ~~stock~~Stock and each outstanding share of our preferred stock will be exchanged for one (1) share of Petros ~~preferred~~Preferred ~~stock~~Stock. Following the Mergers, the Petros Preferred Stock will have substantially the same conversion rights (proportionally adjusted to give effect to the Mergers), powers, rights and privileges as our preferred stock prior to the Mergers. In addition, each outstanding option to purchase our common stock or outstanding warrant to purchase common stock that has not previously been exercised prior to the ~~closing of the Mergers (the “~~Closing”) will be converted into equivalent options and warrants to purchase shares of Petros ~~common~~Common ~~stock~~Stock and will be adjusted to give effect to the exchange ratios set forth in the Merger Agreement. Upon the Closing, it is anticipated that our current stockholders will own approximately 22.5% of Petros and current Metuchen securityholders will own approximately 77.5% of Petros. The Board of Directors of Petros is expected to consist of nine members, five of whom will be designated by Metuchen and four of whom will be designated by us.

1921

~~Upon~~Table ~~the Closing, on a pro forma basis, our current shareholders will own approximately 20.0%~~ of ~~the combined company and current Metuchen investors will own approximately 80.0% of the combined company.~~Contents

In ~~connection~~addition, ~~with~~ as a condition to the consummation of the Mergers, weNeurotrope ~~plan~~is required to ~~spin-off~~approve ~~our~~the ~~wholly~~Spin-~~owned~~Off ~~subsidiary,~~whereby ~~Neurotrope~~(i) ~~Bioscience,~~any ~~Inc.~~cash ~~Substantially~~in ~~all~~excess of ~~our~~$20,000,000, ~~consolidated operations~~subject ~~were~~to ~~conducted~~adjustment ~~through~~as ~~such~~provided ~~subsidiary~~for ~~and~~in ~~substantially~~the Merger Agreement, and all of the ~~consolidated~~ operating assets and liabilities of ours ~~reside~~not inretained ~~such~~by ~~subsidiary.~~us ~~The~~in ~~Spin-Off~~connection iswith ~~planned~~the toMergers will be ~~made~~contributed asto aNeurotrope ~~distribution~~SpinCo toand ~~our~~(ii) ~~stakeholders~~holders as of a record ~~date~~of ~~prior to~~our ~~the~~common ~~Mergers,~~stock ~~but~~and ~~the~~certain ~~distribution~~warrants ~~is currently contemplated to occur after the Closing. The spun-off entity~~ will bereceive ~~capitalized with~~a ~~all~~pro ~~cash~~rata indistribution ~~excess~~ of ~~the~~one ~~$20~~share ~~million~~of toNeurotrope beSpinCo’s ~~retained~~common bystock ~~Metuchen, subject to adjustment~~ for ~~the~~each ~~proceeds~~share ~~from any exercise~~ of our ~~warrants~~common ~~between~~stock ~~the~~held ~~date~~or ofunderlying ~~execution~~certain ofwarrants, ~~the~~contingent ~~Merger~~upon ~~Agreement~~the ~~and~~consummation ~~closing~~ of the Mergers. The ~~proceeds of any such warrant exercises will be split 80% to Metuchen and 20% to the spun-off entity. The~~ record date for the Spin-Off, the ratio of the Spin-Off shares distributed to our ~~shares~~shareholders held as of the record date and the extent to which other stakeholders of ours may be entitled to participate in the Spin-Off have not yet been determined.

Consummation of the Mergers is subject to certain closing conditions, including, among other things, approval by ~~our~~the ~~securityholders~~common stockholders of us and Metuchen and the listing of the Petros common stock on the Nasdaq Stock Market after the Mergers. ~~The~~ ~~Company~~We ~~has~~have not yet set a date for its shareholder meeting. The Merger Agreement contains certain termination rights for both us and Metuchen, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $1.0 million plus third party expenses incurred by the terminating party.

On July 23, 2020, we entered into (i) the Merger Agreement Amendment with Petros, Merger Sub 1, Merger Sub 2 and Metuchen and (ii) the Employee Lease Agreement with Neurotrope Bioscience and Metuchen. See Note 9, “Subsequent Events”.

Results of Most Recent Confirmatory Phase 2 Clinical Trial

On May 4, 2018, we announced a confirmatory, 100 -patient, double-blinded clinical trial for the safe, effective 20 μg dose protocol for advanced AD patients not taking memantine as background therapy to evaluate improvements in SIB scores with an increased number of patients. We engaged ~~Worldwide Clinical Trials, Inc. (“~~WCT”), in conjunction with consultants and investigators at leading academic institutions, to collaborate on the design and conduct of the trial, which began in April 2018. During July 2018, the first patient was enrolled in this study. Pursuant to a ~~new~~ Services Agreement (the “~~New~~2018 Services Agreement”) with WCT dated as of May 4, 2018, WCT provided services relating to the trial. The total estimated budget for the services, including pass-through costs, drug supply and other statistical analyses, was approximately $7.8 million. The trial was substantially completed as of December 31, 2019. We incurred approximately $7.7 million in total expenses of which WCT has represented a total of approximately $7.3 million and approximately $400,000 of expenses were incurred to other trial-related vendors and consultants, resulting in a total savings for this trial of approximately $500,000.

On September 9, 2019, we issued a press release announcing that the confirmatory Phase 2 study of Bryostatin-1 in moderate to severe AD did not achieve statistical significance on the primary endpoint, which was changed from baseline to Week 13 in the SIB total score.

An average increase in SIB total score of 1.3 points and 2.1 points was observed for the Bryostatin-1 and placebo groups, respectively, at Week 13. There were multiple secondary outcome measures in this trial, including the changes from baseline at Weeks 5, 9 and 15 in the SIB total score. No statistically significant difference was observed in the change from baseline in SIB total score between the Bryostatin -1 and placebo treatment groups.

The confirmatory Phase 2 multicenter trial was designed to assess the safety and efficacy of Bryostatin-1 as a treatment for cognitive deficits in patients with moderate to severe AD — defined as a Mini Mental State Exam 2 (“MMSE-2”) score of 4-15 – who are not currently taking memantine. Patients were randomized 1:1 to be treated with either Bryostatin-1 20μg or placebo, receiving 7 doses over 12 weeks. Patients on memantine, an NMDA receptor antagonist, were excluded unless they had been discontinued from memantine treatment for a 30-day washout period prior to study enrollment. The primary efficacy endpoint was the change in the SIB score between the baseline and week 13. Secondary endpoints included repeated SIB changes from baseline SIB at weeks 5, 9, 13 and 15.

20On January 22, 2020, we announced the completion of an additional analysis in connection with the confirmatory Phase 2 study, which examined moderately severe to severe AD patients treated with Byrostatin-1 in the absence of memantine. To adjust for the baseline imbalance observed in the study, a post-hoc analysis was conducted using paired data for individual patients, with each patient as his/her own control. For the pre-specified moderate stratum (i.e., MMSE-2 baseline scores 10-15), the baseline value and the week 13 value were used, resulting in pairs of observations for each patient. The changes from baseline for each patient were calculated and a paired t-test was used to compare the mean change from baseline to week 13 for each patient. A total of 65 patients had both baseline and week 13 values, from which there were 32 patients in the Bryostatin-1 treatment group and 33 patients in the placebo group. There was a statistically significant improvement over baseline (4.8 points) in the mean SIB at week 13 for subjects in the Bryostatin-1 treatment group (32 subjects), paired t-test p < 0.0076, 2-tailed. In the placebo group (33 subjects), there was also a statistically significant increase from baseline in the mean SIB at week 13, for paired t-test p < 0.0144, consistent with the placebo effect seen in the

~~On January~~ 22, 2020, we announced the completion of an additional analysis in connection with the confirmatory Phase 2 study, which examined moderately severe to severe AD patients treated with byrostatin-1 in the absence of memantine. To adjust for the baseline imbalance observed in the study, a post-hoc analysis was conducted using paired data for individual patients, with each patient as his/her own control. For the pre-specified moderate stratum (i.e., MMSE-2 baseline scores 10-15), the baseline value and the week 13 value were used, resulting in pairs of observations for each patient. The changes from baseline for each patient were calculated and a paired t-test was used to compare the mean change from baseline to week 13 for each patient. A total of 65 patients had both baseline and week 13 values, from which there were 32 patients in the Bryostatin-1 treatment group and 33 patients in the placebo group. There was a statistically significant improvement over baseline (4.8 points) in the mean SIB at week 13 for subjects in the Bryostatin-1 treatment group (32 subjects), paired t-test p < 0.0076, 2-tailed. In the placebo group (33 subjects), there was also a statistically significant increase from baseline in the mean SIB at week 13, for paired t-test p < 0.0144, consistent with the placebo effect seen in the overall 203 study. Although there was a signal of Bryostatin-1’s benefit for the moderately severe stratum, the difference between the Bryostatin-1 and placebo treatment groups was not statistically significant (p=0.2727). As a further test of the robustness of this Moderate Stratum benefit signal, a pre-specified trend analysis (measuring increase of SIB improvement as a function of successive drug doses) was performed on the repeated SIB measures over time (Weeks 0, 5, 9, and 13). These trend analyses showed a significant positive slope of improvement for the treatment groups in the 203 study that was significantly greater than for the placebo group (p<.01).

InTable ~~connection with the additional analysis, we also announced the approval~~ of a $2.7 million award from the National Institutes of Health to support an additional Phase 2 clinical study focused on the moderate stratum for which we saw improvement in the 203 study. The grant provides for funds in the first year of approximately $1.0 million and funding in year two of approximately $1.7 million subject to satisfactory progress of the project. We are planning to meet with the Food and Drug Administration (“FDA”) to present the totality of the clinical data for Bryostatin-1. We are continuing to determine how to proceed with respect to our current development programs for Bryostatin-1. On May 28, 2020, Neurotrope Bioscience, Inc. entered into a non-binding letter of intent with WCT pursuant to which the parties agreed to negotiate a definitive agreement for the provision of clinical trial development services by WCT in connection with a proposed Phase 2 study assessing safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment.Contents

overall 203 study. Although there was a signal of Bryostatin-1’s benefit for the moderately severe stratum, the difference between the Bryostatin-1 and placebo treatment groups was not statistically significant (p=0.2727). As a further test of the robustness of this Moderate Stratum benefit signal, a pre-specified trend analysis (measuring increase of SIB improvement as a function of successive drug doses) was performed on the repeated SIB measures over time (Weeks 0, 5, 9, and 13). These trend analyses showed a significant positive slope of improvement for the treatment groups in the 203 study that was significantly greater than for the placebo group (p<.01).

In connection with the additional analysis, we also announced the approval of a $2.7 million award from the NIH to support an additional Phase 2 clinical study focused on the moderate stratum for which we saw improvement in the 203 study. The grant provides for funds in the first year of approximately $1.0 million and funding in year two of approximately $1.7 million subject to satisfactory progress of the project. We are planning to meet with the Food and Drug Administration (“FDA”) to present the totality of the clinical data for Bryostatin-1. We are continuing to determine how to proceed with respect to our current development programs for Bryostatin-1.

On July 23, 2020, Neurotrope Bioscience entered into an additional services agreement (the “2020 Services Agreement”) with WCT. The 2020 Services Agreement relates to services for our Phase 2 clinical study assessing the safety, tolerability and long-term efficacy of bryostatin in the treatment of moderately severe AD subjects not receiving memantine treatment. The total estimated budget for the services, including pass-through costs, is approximately $9.8 million. As previously disclosed on January 22, 2020, we have received a $2.7 million award from the NIH, which award will be used to support the 2020 Study, resulting in an estimated net budgeted cost of the 2020 Study to the Company of $7.1 million. In connection with the entry into the 2020 Services Agreement, we agreed that WCT would invoice Neurotrope Bioscience for the following advance payments: (i) services fees of approximately $490,000; (ii) pass-through expenses of approximately $140,000; and (iii) investigator/institute fees of approximately $310,000, which in each case will be due within ten (10) days of Neurotrope Bioscience’s receipt of such invoice. See Note 3, “Clinical Trial Services Agreements” and Note 9, “Subsequent Events”.

Other Development Projects

To the extent resources permit, we may pursue development of selected technology platforms with indications related to the treatment of various disorders, including neurodegenerative disorders such as AD, based on our currently licensed technology and/or technologies available from third party licensors or collaborators.

For example, we have entered into a Cooperative Research and Development Agreement (“CRADA”) with the National Cancer Institute (“NCI”) on January 29, 2019 for the research and clinical development of Bryostatin-1. Under the CRADA, we will collaborate with the NCI’s Center for Cancer Research, Pediatric Oncology Branch (“POB”) to develop a Phase 1 clinical trial testing the safety and toxicity of Bryostatin-1 in children and young adults with CD22 + leukemia and B-cell lymphoma. In the growing era of highly effective immunotherapies targeting cell-surface antigens (e.g., CAR-T cell therapy), and the recognition that antigen modulation plays a critical role in evasion of response to immunotherapy, the ability for Bryostatin-1 to upregulate CD22 may serve a synergistic role in enhancing the response to a host of CD22 targeted therapies. Under the CRADA, Bryostatin-1 is expected to be tested in the clinic to evaluate its ability to modulate CD22 in patients with relapsed/refractory CD22+ disease, while evaluating safety, toxicity and overall response. In connection with the Transfer Agreement, we agreed to assign and transfer to BryoLogyx all of the Company’s right, title and interest in and to the CRADA, subject to the receipt of NCI’s consent.

Nemours Agreement

On September 5, 2018, we announced a collaboration with The Nemours / Alfred I. duPont Hospital for Children (“Nemours”), a premier U.S. children’s hospital, to initiate a clinical trial in children with Fragile X syndrome (“Fragile X”). In addition to the primary objective of safety and tolerability, measurements will be made of working memory, language and other functional aspects such as anxiety, repetitive behavior, executive functioning, and social behavior.

~~Recent Developments~~23

~~Registered Direct~~Table ~~Offering~~of Contents

~~On January 22,~~Results ~~2020, we entered into a securities purchase agreement with certain institutional investors and certain pre-existing high net worth individual investors. Pursuant to the terms~~ of the purchase agreement, we issued to the purchasers in a registered offering an aggregate of 18,000 shares of our newly designated Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”) (which are convertible into a total of 10,909,100 shares of common stock) and Series H warrants to purchase up to an aggregate of 10,909,100 shares of common stock for an aggregate purchase price of approximately $18 million. The warrants are exercisable at a price of $1.65 per share immediately upon issuance. They feature a five-year term and a right by us, in certain circumstances, to call for the cancellation of up to 50% of the shares of common stock underlying such warrants for consideration equal to $0.0001 per share of underlying common stock in the event the value weighted average price of our common stock exceeds $5.00 for each of 10 consequence trading days in a 30-day calendar period. The Series D Preferred Stock and the Series H warrants are immediately separable and were issued separately. The net proceeds to us from the offering were approximately $16.4 million, after deducting financial advisory fees and offering expenses paid by us.Operations

21Comparison of the six months ended June 30, 2020 and June 30, 2019

~~Director Resignations~~The following table summarizes our results of operations for the six months ended June 30, 2020 and 2019:

On February 21, 2020, James Gottlieb resigned as a member of our Board and from all committees thereof, effective immediately. On February 25, 2020, Shana Phares resigned as a member of the Board and from all committees thereof, effective immediately. Mr. Gottlieb and Ms. Phares served as the two Board designees of the licensor of the patents and technologies utilized by us in our attempts to develop therapeutic applications for Alzheimer’s disease and other cognitive dysfunctions.

Comparison of the three months ended March 31, 2020 and March 31, 2019


	Six months ended
	June 30,				Dollar		%
	2020		2019		Change		Change
Revenue	$	—	$	—	$	—	0	%
Operating Expenses:
Research and development expenses – Other	$	594,470	$	3,427,734	$	(2,833,264)	(82.7)	%
General and administrative expenses – Related party	$	7,361	$	25,000	$	(17,639)	(70.6)	%
General and administrative expenses – Other	$	3,953,051	$	3,033,891	$	919,160	30.3	%
Stock based compensation expenses – Related Party	$	21,001	$	125,466	$	(104,465)	(83.3)	%
Stock based compensation expenses – Other	$	1,040,095	$	2,295,994	$	(1,255,899)	(54.7)	%
Other income, net	$	146,508	$	211,461	$	(64,953)	(30.7)	%
Net loss	$	5,469,470	$	8,696,624	$	(3,227,154)	(37.1)	%

~~The following table summarizes our results of operations for the three months ended March 31, 2020 and 2019:~~

	Three months ended March 31,
	2020		2019		Dollar Change			% Change
Revenue	$	-	$	-	$	-			0	%
Operating Expenses:
Research and development expenses – Other	$	156,047	$	1,861,293	$	(1,705,246	)		(91.6	)%
General and administrative expenses – Related party	$	7,361	$	12,5000	$	(5,139	)		(41.1	)%
General and administrative expenses – Other	$	1,787,987	$	1,328,500	$	459,487			34.6	%
Stock based compensation expenses – Related Party	$	21,001	$	78,289	$	(57,288	)		(73.2	)%
Stock based compensation expenses – Other	$	635,815	$	1,515,475	$	(879,660	)		(58.0	)%
Other income, net	$	70,867	$	106,899	$	(36,032	)		(33.7	)%
Net loss	$	2,537,344	$	4,689,158	$	(2,151,814	)		(45.9	)%

Revenues

We did not generate any revenues for the ~~three~~ six months ended ~~March 31~~June 30, 2020 and 2019.

Operating Expenses

Overview

Total operating expenses for the ~~three~~six months ended ~~March 31~~June 30, 2020 were $25,~~608~~615,~~211~~978 as compared to $48,~~796~~908,~~057~~085 for the ~~three~~six months ended ~~March 31~~June 30, 2019, a decrease of approximately 4637%. The decrease in total operating expenses is due primarily to a decrease in research and development expenses and stock-based, non-cash, compensation expenses offset by an increase in our general and administrative expenses.

Research and Development Expenses

~~For~~ the three months ended March 31, 2020, we incurred $156,047 in research and development expenses with non-related parties as compared to $1,861,293 for the three months ended March 31, 2019. These expenses were incurred pursuant to developing the potential AD therapeutic product, specifically expenses relating to the recently concluded confirmatory Phase 2 clinical trial for AD. Of these expenses, for the three months ended March 31, 2020, $75,026 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $66,628 for clinical consulting services, $7,479 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $6,914 for development of alternative drug supply with Stanford University as compared to, for the three months ended March 31, 2019, $1,628,962 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $220,901 for clinical consulting services, $7,430 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $4,000 for development of alternative drug supply with Stanford University.

22For the six months ended June 30, 2020, we incurred $594,470 in research and development expenses with non-related parties as compared to $3,427,734 for the six months ended June 30, 2019. These expenses were incurred pursuant to developing the potential AD therapeutic product, specifically expenses relating to the recently concluded confirmatory Phase 2 clinical trial plus the recently initiated Phase 2 clinical trial for AD. Of these expenses, for the six months ended June 30, 2020, $357,122 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $208,241 for clinical consulting services, $14,959 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $14,148 for development of alternative drug supply with Stanford University as compared to, for the six months ended June 30, 2019, $2,982,774 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $419,711 for clinical consulting services, $13,249 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $12,000 for development of alternative drug supply with Stanford University.

We expect our research and development expenses to substantially decrease, in the short term, as our confirmatory Phase 2 clinical trial was recently concluded. Other development might increase, as our resources permit, in order to advance our potential products. We are continuing to determine how to proceed with respect to our current development programs for Bryostatin-1.

We expect our research and development expenses to substantially increase, in the short term, as our current Phase 2 clinical trial for AD was recently initiated. Other development might increase, as our resources permit, in order to advance our potential products. We are continuing to determine how to proceed with respect to our other current development programs for Bryostatin-1.

General and Administrative Expenses

We incurred related party general and administrative expenses totaling $7,361 for the three months ended March 31, 2020 versus $12,500 for the three months ended March 31, 2019. The decrease is attributable to the resignation of two members of our board of directors in February 2020, who are affiliates of CRE.

We incurred ~~$1,787,987 and~~related ~~$1,328,500~~party of general and administrative expenses ~~for~~totaling ~~the three months ended March 31~~$7,361 ~~2020 and 2019, respectively, an increase of approximately 35%. Of the amounts~~ for the ~~three~~six months ended ~~March 31~~June 30, 2020, asversus ~~compared to the comparable 2019 period:~~ $~~652~~25,~~060~~000 ~~was incurred primarily~~ for ~~wages,~~the ~~bonuses,~~six ~~vacation~~months ~~pay,~~ended ~~severance,~~June ~~taxes and insurance~~30, ~~versus $610,320 for the~~ 2019 ~~comparable period~~. The ~~increase~~decrease ~~for the three months ending March 31, 2020~~ is ~~principally~~attributable ~~based upon contractual bonus payments made~~ to ~~certain~~the ~~officers~~resignation of ~~$272,500;~~two ~~$318,973~~members ~~was~~of ~~incurred for ongoing legal expenses versus $76,088 for the 2019 comparable period based upon work associated with~~ our ~~strategic~~board ~~alternatives~~of ~~and~~directors ~~planning~~in ~~for~~February ~~our January~~ 2020 ~~capital raise; $399~~,~~751~~ ~~was incurred~~who ~~for~~are ~~outside~~affiliates ~~operations~~of consulting services, versus $162,684 for the 2019 comparable period as we incurred additional cash and non-cash expenses for investment banking consulting services; $43,898 was incurred for travel expenses, versus $57,585 for the 2019 comparable period; $133,179 was incurred for investor relations services versus $189,042 for the 2019 comparable period; $31,212 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services, versus $62,307 for the 2019 comparable period; $154,314 was incurred for insurance, versus $107,500 for the 2019 comparable period; and $54,600 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other versus $62,974 for the 2019 comparable periodCRE.

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We incurred $3,953,051 and $3,033,891 of general and administrative expenses for the six months ended June 30, 2020 and 2019, respectively, an increase of approximately 30%. Of the amounts for the six months ended June 30, 2020, as compared to the comparable 2019 period: $1,038,088 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $1,177,479 for the 2019 comparable period; $1,269,880 was incurred for ongoing legal expenses versus $284,857 for the 2019 comparable period based upon work associated with our strategic alternatives and planning for our January 2020 capital raise; $798,581 was incurred for outside operations consulting services, versus $423,938 for the 2019 comparable period as we incurred additional cash and non-cash expenses for investment banking consulting services; $45,657 was incurred for travel expenses, versus $111,309 for the 2019 comparable period, which decrease is primarily attributable to limited travel due to the COVID-19 contagion; $222,391 was incurred for investor relations services versus $621,923 for the 2019 comparable period, which additional expenses in the six months ended June 30, 2019 were primarily attributable to non-cash compensation paid to advisors and an increase in our market exposure; $156,135 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services, versus $84,787 for the 2019 comparable period; $308,397 was incurred for insurance, versus $215,250 for the 2019 comparable period, which increase is primarily attributable to an increase in coverage; and $113,922 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other versus $114,348 for the 2019 comparable period, which increase is primarily attributable to fees relating to document preparation for our announced strategic transactions.

Stock Based Compensation Expenses

We incurred related party non-cash expenses totaling $21,001 and $78,289 for the three months ended March 31, 2020 and 2019, respectively. The decrease is primarily attributable to fully expensing certain options in 2019.

We incurred ~~$635,815 and $1,515,475 of non-~~related party non-cash expenses totaling $21,001 and $125,466 for the ~~three~~six months ended ~~March 31~~June 30, 2020 and 2019, respectively. The decrease ~~for the comparable period~~ is primarily attributable to ~~newly~~the ~~issued~~resignation ~~stock~~of ~~options~~two ~~during~~Board ~~the~~members ~~first~~who ~~quarter~~were affiliates of ~~2019,~~CRE ~~which included~~and ~~awards~~fully ~~with~~expensing ~~accelerated~~certain ~~vesting~~options ~~terms~~in 2019.

We incurred $1,040,495 and $2,295,994 of non-related party non-cash expenses for the six months ended June 30, 2020 and 2019, respectively. The decrease for the comparable period is primarily attributable to newly issued stock options during the first quarter of 2019, which included awards with accelerated vesting terms.

Other Income, net

We earned $70,867 of interest income for the three months ended March 31, 2020 as compared to $106,899 for the three months ended March 31, 2019 on funds deposited in interest bearing money market accounts.

We earned $146,508 of interest income for the six months ended June 30, 2020 as compared to $211,461 for the six months ended June 30, 2019 on funds deposited in interest bearing money market accounts.

Net loss and loss per share

We incurred losses of $2,537,344 and $4,689,158 for the three months ended March 31, 2020 and 2019, respectively. The decreased loss was primarily attributable to the decrease in research and development expenses associated with completing our most recent Phase 2 confirmatory clinical trial and a decrease in non-cash stock-based compensation expenses offset by the increase in our general and administrative expenses. Earnings (losses) per common share were ($0.14) and ($0.36) for the three months ended March 31, 2020 and 2019, respectively. The decrease in loss per share is primarily attributable to the decrease in our net loss and an increase in weighted average common shares outstanding.

23We incurred losses of $5,469,470 and $8,696,624 for the six months ended June 30, 2020 and 2019, respectively. The decreased loss was primarily attributable to the decrease in research and development expenses associated with completing our most recent Phase 2 confirmatory clinical trial and a decrease in non-cash stock-based compensation expenses offset by the increase in our general and administrative expenses. Earnings (losses) per common share were ($0.27) and ($0.67) for the six months ended June 30, 2020 and 2019, respectively. The decrease in loss per share is primarily attributable to the decrease in our net loss and an increase in weighted average common shares outstanding.

~~The~~ computation of diluted loss per share for the three months ended March 31, 2020 excludes 21,731,258 warrants and options to purchase 2,326,573 shares of our common stock as they are anti-dilutive due to our net loss. For the three months ended March 31, 2019, the computation excludes 10,214,357 warrants and options to purchase 2,195,246 shares of our common stock, as they are anti-dilutive due to our net loss.

The computation of diluted loss per share for the six months ended June 30, 2020 excludes 21,871,258 warrants and options to purchase 2,271,573 shares of our common stock as they are anti-dilutive due to our net loss. For the six months ended June 30, 2019, the computation excludes 10,317,357 warrants and options to purchase 2,295,246 shares of our common stock, as they are anti-dilutive due to our net loss.

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Comparison of the three months ended June 30, 2020 and June 30, 2019

The following table summarizes our results of operations for the three months ended June 30, 2020 and 2019:


	Three months ended
	June 30,
					Dollar		%
	2020		2019		Change		Change
Revenue	$	—	$	—	$	—	0	%
Operating Expenses:
Research and development expenses – Other	$	438,423	$	1,566,441	$	(1,128,018)	(72.0)	%
General and administrative expenses – Related party	$	—	$	12,500	$	(12,500)	(100.0)	%
General and administrative expenses – Other	$	2,165,064	$	1,705,391	$	459,673	27.0	%
Stock based compensation expenses – Related Party	$	—	$	47,177	$	(47,177)	(100.0)	%
Stock based compensation expenses – Other	$	404,280	$	780,519	$	(376,239)	(48.2)	%
Other income, net	$	75,641	$	104,562	$	(28,921)	(27.7)	%
Net loss	$	2,932,126	$	4,007,466	$	(1,075,340)	(26.8)	%

Revenues

We did not generate any revenues for the three months ended June 30, 2020 and 2019.

Operating Expenses

Overview

Total operating expenses for the three months ended June 30, 2020 were $3,007,767 as compared to $4,112,028 for the three months ended June 30, 2019, a decrease of approximately 27%. The decrease in total operating expenses is due primarily to a decrease in research and development expenses and stock-based, non-cash, compensation expenses offset by an increase in our general and administrative expenses.

Research and Development Expenses

For the three months ended June 30, 2020, we incurred $438,423 in research and development expenses with non-related parties as compared to $1,566,441 for the three months ended June 30, 2019. These expenses were incurred pursuant to developing the potential AD therapeutic product, specifically expenses relating to the recently initiated follow-on Phase 2 clinical trial for AD. Of these expenses, for the three months ended June 30, 2020, $282,095 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $141,614 for clinical consulting services, $7,480 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $7,234 for development of alternative drug supply with Stanford University as compared to, for the three months ended June 30, 2019, $1,353,811 was incurred principally relating to our confirmatory clinical trial and related storage of drug product, $198,811 for clinical consulting services, $5,819 of amortization of prepaid licensing fees relating to the Stanford and Mount Sinai license agreements and $8,000 for development of alternative drug supply with Stanford University.

General and Administrative Expenses

We incurred related party general and administrative expenses totaling $0 for the three months ended June 30, 2020 versus $12,500 for the three months ended June 30, 2019. The decrease is attributable to the resignation of two members of our board of directors in February 2020, who are affiliates of CRE.

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We incurred $2,165,064 and $1,705,391 of general and administrative expenses for the three months ended June 30, 2020 and 2019, respectively, an increase of approximately 27%. Of the amounts for the three months ended June 30, 2020, as compared to the comparable 2019 period: $386,029 was incurred primarily for wages, bonuses, vacation pay, severance, taxes and insurance, versus $567,159 for the 2019 comparable period. The decrease for the three months ending June 30, 2020 is principally based upon the resignation of our General Counsel and Regulatory Vice President in the June 30, 2019 period; $950,906 was incurred for ongoing legal expenses versus $208,769 for the 2019 comparable period based upon work associated with our strategic alternatives; $398,831 was incurred for outside operations consulting services, versus $261,254 for the 2019 comparable period as we incurred additional cash and non-cash expenses for investment banking consulting services; $1,758 was incurred for travel expenses, versus $53,725 for the 2019 comparable period, which decrease is primarily attributable to limited travel due to the COVID-19 contagion; $89,212 was incurred for investor relations services versus $432,881 for the 2019 comparable period, which additional expenses in the six months ended June 30, 2019 were primarily attributable to non-cash compensation paid to advisors and an increase in our market exposure; $124,923 was incurred for professional fees associated with auditing, financial, accounting and tax advisory services, versus $22,480 for the 2019 comparable period which increase is primarily attributable to fees relating to document preparation for our announced strategic transactions; $154,083 was incurred for insurance, versus $107,750 for the 2019 comparable period; and $59,322 was incurred for utilities, supplies, license fees, filing costs, rent, advertising and other versus $51,373 for the 2019 comparable period.

Stock Based Compensation Expenses

We incurred related party non-cash expenses totaling $0 and $47,177 for the three months ended June 30, 2020 and 2019, respectively. The decrease is primarily attributable to the resignation of two Board members who were affiliates of CRE and fully expensing certain options in 2019.

We incurred $404,280 and $780,519 of non-related party non-cash expenses for the three months ended June 30, 2020 and 2019, respectively. The decrease for the comparable period is primarily attributable to newly issued stock options during the first quarter of 2019, which included awards with accelerated vesting terms.

Other Income, net

We earned $75,641 of interest income for the three months ended June 30, 2020 as compared to $104,562 for the three months ended June 30, 2019 on funds deposited in interest-bearing money market accounts.

Net loss and loss per share

We incurred losses of $2,932,126 and $4,007,466 for the three months ended June 30, 2020 and 2019, respectively. The decreased loss was primarily attributable to the decrease in research and development expenses associated with completing our most recent Phase 2 confirmatory clinical trial and a decrease in non-cash stock-based compensation expenses offset by the increase in our general and administrative expenses and the initiation of our current Phase 2 follow-on clinical trial for AD. Earnings (losses) per common share were ($0.13) and ($0.31) for the three months ended June 30, 2020 and 2019, respectively. The decrease in loss per share is primarily attributable to the decrease in our net loss and an increase in weighted average common shares outstanding.

The computation of diluted loss per share for the three months ended June 30, 2020 excludes 21,871,258 warrants and options to purchase 2,271,573 shares of our common stock as they are anti-dilutive due to our net loss. For the three months ended June 30, 2019, the computation excludes 10,317,357 warrants and options to purchase 2,295,246 shares of our common stock, as they are anti-dilutive due to our net loss.

Financial Condition, Liquidity and Capital Resources

Cash and Working Capital

Since inception, we have incurred negative cash flows from operations. As of ~~March 31~~June 30, 2020, we had an accumulated deficit of $9194,~~354~~286,~~187~~313 and had working capital of $3229,~~152~~773,~~056~~161 as compared to working capital of $17,397,094 as of December 31, 2019. The $1412,~~754~~376,~~962~~ 067 increase in working capital was primarily attributable to an increase in cash of approximately $16.5 million, net of transaction expenses, from our registered direct offering of common stock and warrants (described below) offset by our net loss, excluding non-cash compensation and consulting expenses and depreciation, of $14,~~762~~138,~~427~~508 plus capital expenditures of $25,~~599~~413.

On January 22, 2020, we entered into a securities purchase agreement with certain institutional investors and certain pre-existing high net worth individual investors, pursuant to which we sold in a registered offering an aggregate of 18,000 shares of Series D Preferred Stock (which are convertible into a total of 10,909,100 shares of common stock) and Series H warrants to purchase up to an aggregate of 10,909,100 shares of common stock, for an aggregate purchase price of approximately $18 million (See Footnote 6 to the Financials - Common Stock, for transaction details.)27

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On January 22, 2020, we entered into a securities purchase agreement with certain institutional investors and certain pre-existing high net worth individual investors, pursuant to which we sold in a registered offering an aggregate of 18,000 shares of Series D Preferred Stock (which are convertible into a total of 10,909,100 shares of common stock) and Series H warrants to purchase up to an aggregate of 10,909,100 shares of common stock, for an aggregate purchase price of approximately $18 million (See Note 6 to the Financials, “Common Stock,” for transaction details.)

Sources and Uses of Liquidity

Since inception, we have satisfied our operating cash requirements from the private placement of equity securities sold principally to outside investors. We expect to continue to incur expenses, resulting in losses and negative cash flows from operations, over at least the next several years as we may continue to develop AD and other therapeutic products. We anticipate that this development may include new clinical trials and additional research and development expenditures. We are continuing to determine how to proceed with respect to our current development programs for Bryostatin-1.

	Three months ended March 31,
	2020		2019
Cash used in operating activities	$	1,738,673	$	(4,816,621	)
Cash used in investing activities		2,599		5,214
Cash provided by financing activities		16,519,988		-


	Six Months ended June 30,
	2020		2019
Cash used in operating activities	$	3,645,433	$	7,641,557
Cash used in investing activities		5,413		5,214
Cash provided by financing activities		16,519,988		48,070

Net Cash Used in Operating Activities

Cash used in operating activities was $13,~~738~~645,~~673~~433 for the ~~three~~six months ended ~~March 31~~June 30, 2020, compared to $47,~~816~~641,~~621~~557 for the ~~three~~six months ended ~~March 31~~June 30, 2019. The $3,~~077~~996,~~948~~124 decrease primarily resulted from the decreased net loss of approximately $23.12 million and by the decrease in payable of approximately $12.7 million, offset by a decrease in non-cash stock-based compensation expenses of approximately $~~800~~2.0 million,~~000,~~ for the ~~three~~six months ended ~~March 31~~June 30, 2020.

Net Cash Used in Investing Activities

Net cash used in investing activities was $25,~~599~~413 for the ~~three~~six months ended ~~March 31~~June 30, 2020 compared to $5,214 for the ~~three~~six months ended ~~March 31~~June 30, 2019. The cash used in investing activities for both periods was for capital expenditures.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $16,519,988 for the ~~three~~six months ended ~~March 31~~June 30, 2020 compared to $048,070 for the ~~three~~six months ended ~~March 31~~June 30, 2019. Net cash provided for the ~~three~~six months ended ~~March 31~~June 30, 2020 was the result of funds raised through the sale of common stock and warrants to investors from our registered direct public offering as described below versus cash provided for the six months ended June 30, 2019 resulted from funds raised through exercise of warrants by investors in our historical private placements.

On January 22, 2020, we raised, through a registered direct offering, approximately $16.5 million in net proceeds. Pursuant to the terms of a purchase agreement, we issued to the purchasers an aggregate of 18,000 shares of Series D Preferred Stock (which are convertible into a total of 10,909,100 shares of common stock) and Series H warrants to purchase up to an aggregate of 10,909,100 shares of common stock for an aggregate purchase price of approximately $18 million.

As of ~~May 8~~August 5, 2020, we had approximately $3129.81 million in cash, cash equivalents and marketable investment securities. We expect that our existing capital resources will be sufficient to support our projected operating requirements over at least the next 12 months from the Form 10-Q filing date, including the potential continued development of bryostatin, our novel drug targeting the activation of PKC epsilon. The future course of our operations and research and development activities will be contingent upon the further analysis of results from our recently completed trial, in addition to our current plans regarding the strategic alternative disclosed above in “Overview - Planned Merger and Spin-Off.”.

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We expect to require additional capital in order to initiate, pursue and complete all potential AD clinical trials, including the development of bryostatin for other potential product applications, or in connection with any strategic alternatives that we may pursue. Additional funding may not be available to us on acceptable terms, or at all. If we are unable to access additional funds when needed, we may not be able to initiate, pursue and complete all planned clinical trials or continue the development of our product candidates or we could be required to delay, scale back or eliminate some or all of our development programs and operations. Any additional equity financing, if available, may not be available on favorable terms, would most likely be significantly dilutive to our current stockholders and debt financing, if available, and may involve restrictive covenants. If we are able to access funds through collaborative or licensing arrangements, we may be required to relinquish rights to some of our technologies or product candidates that we would otherwise seek to develop or commercialize on our own, on terms that are not favorable to us. Our ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm our business, financial condition and results of operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable to a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are not effective due to: inadequate segregation of duties consistent with control objectives in the areas over certain payroll and banking systems and user access controls; ineffective processes over period end financial disclosure and reporting including documentation of GAAP disclosure and reporting reviews supporting the financial reporting process and changes to chart of accounts; and ineffective information technology (IT) general computing controls including lack of risk and design assessments supporting IT security policies and procedures, user access, and IT controls within third party contracts. These weaknesses may affect management’s ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

We previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, that our management, including our Chairman of the Board, principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in the 2013 Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, such internal controls and procedures were not effective to detect the inappropriate application of US generally accepted accounting principles. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that may be considered to be material weaknesses. This material weakness continues to exist. The material weaknesses did not result in any identified misstatements to the consolidated financial statements and there were no changes to previously released financial results.

The Company intends to hire additional personnel to allow for improved financial reporting controls and segregation of duties and institute further IT controls when the Company’s operations and revenues have grown to the point of warranting such controls.

Changes in Internal Controls over Financial Reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Except as set forth below, there have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the period ended December 31, 2019. For a further discussion of our Risk Factors, refer to the “Risk Factors” discussion contained in our Annual Report on Form 10-K.

Our ~~business~~financial ~~may~~condition, clinical development efforts, and results of operations could be adversely affected by the ongoing coronavirus ~~pandemic~~outbreak.

InAny ~~December~~outbreak ~~2019,~~of ~~a novel~~contagious ~~strain~~diseases, ofsuch ~~coronavirus~~as (“COVID-19~~”) surfaced in Wuhan~~, ~~China,~~or ~~and~~other ~~has~~adverse ~~since~~public ~~spread~~health ~~to multiple countries~~developments, ~~including the~~could ~~United~~have ~~States. In March 2020, the World Health Organization characterized COVID-19 as~~ a ~~pandemic,~~material and ~~the~~adverse ~~President~~effect ofon ~~the~~our ~~United~~business ~~States~~operations. ~~declared~~Such ~~the COVID-19~~adverse ~~outbreak a~~effects ~~national~~could ~~emergency.~~include ~~The~~disruptions ~~outbreak~~or ~~has~~restrictions ~~resulted~~on ~~in governments around~~ the ~~world~~ability ~~implementing~~of ~~increasingly~~our, ~~stringent~~our ~~measures~~collaborators’, ~~to help~~or ~~control~~our ~~the~~suppliers’ ~~spread~~personnel ofto ~~the virus~~travel, ~~including~~and ~~quarantines,~~could ~~“shelter~~result in ~~place”~~temporary ~~and~~closures ~~“stay~~of atour ~~home”~~facilities ~~orders, travel~~or ~~restrictions,~~the ~~business~~facilities ~~curtailments,~~of ~~and~~our ~~other~~collaborators ~~measures~~or suppliers.

~~These~~As ~~and similar, and perhaps more severe, disruptions may affect patient recruitment and the pace of enrollment in our next Bryostatin~~COVID-119 ~~clinical~~continues ~~trial. Some patients and clinical investigators may not be able~~ to ~~comply~~affect ~~with~~individuals ~~clinical trial protocols~~ and ~~patients~~businesses ~~may~~around ~~choose~~the ~~to withdraw from our studies as quarantines impede patients’ movement or interrupt healthcare services. Restrictions on transport of clinical materials~~globe, aswe ~~well~~will aslikely ~~diversion~~experience ofdisruptions ~~hospital~~that ~~staff~~could ~~and~~severely ~~resources~~impact ~~to COVID-19 infected patients, may also delay~~ our ~~next~~business ~~Bryostatin-1~~and clinical ~~trial.~~trials, including:

~~The~~● ~~spread~~delays ofor ~~COVID-19, may~~difficulties ~~also~~in ~~materially~~enrolling ~~affect~~patients usin ~~economically.~~our ~~While~~clinical ~~the potential economic impact brought by~~trials, ~~and~~or ~~the duration of, COVID~~drop-19outs ~~may~~from ~~be difficult~~our toclinical ~~assess or predict~~trials, itincluding ~~has~~those ~~significantly~~resulting ~~disrupted~~from ~~global~~an ~~financial~~inability ~~markets,~~to ~~and~~travel ~~may~~to ~~limit~~ our ~~ability~~clinical totrial ~~access~~sites ~~capital, which~~as ~~could~~a inresult ~~the~~of ~~future~~quarantines ~~negatively affect our liquidity. A recession~~ or ~~market~~other ~~correction~~restrictions resulting from ~~the spread of~~ COVID-19 ~~could materially affect our business and the value of our common stock.~~;

~~The~~● ~~ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential~~ delays or ~~impacts~~difficulties onin ~~our business, our~~ clinical ~~trials,~~site ~~healthcare systems or the global economy as a whole. However~~initiation, ~~the~~ ~~effects~~including ~~could~~difficulties ~~have~~in arecruiting ~~material~~clinical ~~impact~~site oninvestigators ~~our business, results of operations~~ and ~~financial~~clinical ~~condition,~~site ~~and we will continue to monitor the COVID-19 situation closely.~~staff;

●

diversion or prioritization of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

●

interruption of key clinical trial activities, such as clinical trial site monitoring, due to quarantines or other limitations on travel imposed or recommended by federal or state governments, employers and others;

●

limitations on employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or requirements imposed on employees to avoid contact with large groups of people;

●

delays in receiving approval from local regulatory authorities to initiate our planned clinical trials;

●

delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

●

interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials;

●

changes in local regulations as part of a response to the COVID-19 outbreak which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; and

●

delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees.

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In addition, the continued spread of COVID-19 globally could adversely affect our manufacturing and supply chain. Parts of our direct and indirect supply chain may accordingly be subject to disruption or product contamination. Additionally, our results of operations could be adversely affected to the extent that COVID-19 or any other epidemic harms our business or the economy in general either domestically or in any other region in which we do business. The extent to which COVID-19 affects our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others, which could have an adverse effect on our business and financial condition.

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

Other than as set forth below, there have been no other unregistered sales of equity securities during the three months ended ~~March~~June 3130, 2020.:

On ~~March~~June 21, 2020, we issued warrants to purchase 90,000 shares of common stock to Katalyst Securities LLC as compensation for financial advisory services.

On ~~March~~June 21, 2020, we issued warrants to purchase 50,000 shares of common stock to GP Nurmenkari Inc. as compensation for investor relations services.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

WeNot ~~are providing the following disclosure in lieu of filing a Current Report on Form 8-K relating to Item 1~~applicable.~~01, “Entry into a Material Definitive Agreement.”~~

~~Supply Agreement~~

On June 9, 2020, we entered into a supply agreement (the “Supply Agreement”) with BryoLogyx Inc. (“BryoLogyx”), pursuant to which BryoLogyx agreed to serve as our exclusive supplier of synthetic Bryostatin-1. Pursuant to the terms of the Supply Agreement, we have agreed to place an initial order of one gram of current good manufacturing practice (“cGMP”) synthetic Bryostatin-1 as an active pharmaceutical ingredient to be used in a drug product (“API”), to be shipped by BryoLogyx within 60 days after the date upon which BryoLogyx obtains cGMP certification for production of API, which certification shall be obtained no later than March 31, 2021. We may place additional orders for API beyond the initial order by making a written request to BryoLogyx no later than six months prior to the requested delivery date. We agreed to pay a price per gram of API equal to the cost of goods sold plus 15%, in each case calculated as at the time of production of the API requested by us.

~~The~~Table ~~supply period under the Supply Agreement commences on the date that BryoLogyx receives cGMP certification for production~~ of ~~API~~ and we accept the initial production run, and terminates upon (i) the fifth (5th) anniversary of the date of completion by us of our Phase III clinical trial using API or (ii) such earlier or later date as is agreed to by the parties. Either party may terminate the Supply Agreement for cause as set forth in the Supply Agreement.Contents

The Supply Agreement contains customary representations, warranties and agreements by the parties, as well as certain covenants regarding matters such as confidentiality. The foregoing description of the Supply Agreement is not complete and is qualified in its entirety by reference to the full text of the Supply Agreement, a copy of which is attached to this report as Exhibit 10.4.

Transfer Agreement

In connection with the Supply Agreement, on June 9, 2020 (the “Effective Date”), we entered into a transfer agreement (the “Transfer Agreement”) with BryoLogyx. Pursuant to the terms of the Transfer Agreement, we agreed to assign and transfer to BryoLogyx all of our right, title and interest in and to that certain Cooperative Research and Development Agreement, dated as of January 29, 2019 (the “CRADA”), by and between us and the U.S. Department of Health and Human Services, as represented by the National Cancer Institute of the National Institutes of Health (“NCI”), under which Bryostatin-1’s ability to modulate CD22 in patients with relapsed/refractory CD22+ disease has been evaluated to date. The transfer is subject to the receipt of NCI’s consent. We further agreed that, following the transfer of the CRADA, we will assign to BryoLogyx our investigational new drug application (“IND”) currently on file with the U.S. Food and Drug Administration. As consideration for the transfer of the CRADA and IND, BryoLogyx has agreed to pay to us 2% of the gross revenue received in connection with the sale of bryostatin products, up to an aggregate payment amount of $1 million (the date of receipt of such aggregate amount, the “End Date”).

The term of the Transfer Agreement commences on the Effective Date and will terminate upon the earliest to occur of the following: (i) the fifth (5th) business day after the Effective Date if the transfer has not occurred and we have not provided certain required notifications, (ii) the End Date, (iii) such other date as the parties agree to in writing or (iv) thirty (30) days following the delivery by one party of a written notice of an uncured material breach of an obligation by the other party.

The Transfer Agreement contains customary representations, warranties and agreements by the parties, as well as certain covenants regarding matters such as confidentiality. The foregoing description of the Transfer Agreement is not complete and is qualified in its entirety by reference to the full text of the Transfer Agreement, a copy of which is attached to this report as Exhibit 10.5.

Item 6. Exhibits.

Exhibit Number

2.1**	Agreement and Plan of Merger and Reorganization, dated as of May 17, 2020, by and among Petros, the Company, Merger Sub 1, Merger Sub 2 and Metuchen (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
Exhibit Number
2.2	Form of Neurotrope Voting Agreement, by and between Metuchen and certain stockholders of the Company (incorporated by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).

2.3	Form of Metuchen Voting Agreement, by and between the Company and certain unitholders of Metuchen (incorporated by reference to Exhibit 2.3 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
2.1**		Agreement and Plan of Merger and Reorgaization, dated as of May 17, 2020, by and among Petros Pharmaceuticals, Inc., PM Merger Sub 1, LLC, PN Merger Sub 2, Inc., Neurotrope, Inc. and Metuchen Pharmaceuticals LLC (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
2.4	Form of Lock-Up Agreement, by and between Petros, the Company, Metuchen and certain securityholders of the Company and Metuchen (incorporated by reference to Exhibit 2.4 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).

3.1	Form of Series D Preferred Certificate of Designation (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
2.2		Form of Neurotrope Voting Agreement, by and between Metuchen Pharmaceuticals LLC and certain stockholders of Neurotrope, Inc. (incorporated by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
4.1	Form of Series H Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 23, 2020).

10.1	Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
2.3		Form of Metuchen Voting Agreement, by and between Neurotrope, Inc. and certain unitholders of Metuchen Pharmaceuticals LLC (incorporated by reference to Exhibit 2.3 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
10.2	Consulting Advisory Agreement dated as of January 22, 2020, by and between the Company and Katalyst Securities, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on January 23, 2020).

10.3	Form of Juggernaut Backstop Agreement, by and between the Company and JCP III SM AIV, L.P. (incorporated by reference to Exhibit 99.9 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 18, 2020)
2.4		Form of Lock-Up Agreement, by and between Petros Pharmaceuticals, Inc., Neurotrope, Inc., Metuchen Pharmaceuticals LLC and certain securityholders of Neurotrope, Inc. and Metuchen Pharmaceuticals LLC (incorporated by reference to Exhibit 2.4 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 17, 2020).
10.4*	Supply Agreement, dated as of June 9, 2020, by and between the Company and BryoLogyx Inc.

10.5*	Transfer Agreement, dated as of June 9, 2020, by and between the Company and BryoLogyx Inc.
2.5		First Amendment to Agreement and Plan of Merger, dated as of July 23, 2020, by and between Petros Pharmaceuticals, Inc., PM Merger Sub 1, LLC, PN Merger Sub 2, Inc., Neurotrope, Inc. and Metuchen Pharmaceuticals LLC (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on July 24, 2020).
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.
10.1		Employee Lease Agreement, dated as of July 23, 2020, by and between Neurotrope, Inc., Neurotrope Bioscience, Inc. and Metuchen Pharmaceuticals, LLC. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on July 24, 2020).
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.
10.2***		Services Agreement, by and between Worldwide Clinical Trials, Inc. and Neurotrope Bioscience, Inc. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2020).
101*	The following financial information from this Quarterly Report on Form 10-Q for the period ended March 31, 2020, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations; (ii) the Condensed Consolidated Balance Sheets; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text.

	* Filed herewith.
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.
	**Certain schedules and exhibits to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

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 June 30, 2020, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations; (ii) the Condensed Consolidated Balance Sheets; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text.

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

28* Filed herewith.

** Certain schedules and exhibits to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

Table of Contents

***Confidential treatment has been requested for certain portions of this exhibit. The unredacted document will be provided supplementally to the Securities and Exchange Commission upon request.

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

	Neurotrope, Inc.
Date: June 12, 2020	By:	/s/ Charles S. Ryan, JD, Ph.D.
		Charles S. Ryan, JD, Ph.D.
		Chief Executive Officer (principal executive officer)
Date: June 12, 2020	By:	/s/ Robert Weinstein
		Robert Weinstein
		Chief Financial Officer, Executive Vice President,
		Secretary and Treasurer (principal financial officer)


	Neurotrope, Inc.

Date: August 10, 2020	By:	/s/ Charles S. Ryan, JD, Ph.D.
		Charles S. Ryan, JD, Ph.D.
		Chief Executive Officer (principal executive officer)

Date: August 10, 2020	By:	/s/ Robert Weinstein
		Robert Weinstein
		Chief Financial Officer, Executive Vice President,
		Secretary and Treasurer (principal financial officer)

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