Bullfrog AI Holdings, Inc. — Q1 2024 Form 10-Q
Period: Three months ended March 31, 2024; filed May 10, 2024. The financial statements are unaudited. Bullfrog develops AI/ML tools, including its bfLEAP platform, for analysis of medical and drug-development data, and is pursuing service partnerships and internal drug-development programs.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $552,126 | $369,933 |
| General and administrative expense | $1,413,592 | $820,712 |
| Total operating expenses / operating loss | $1,965,718 | $1,190,645 |
| Net loss | $1,903,794 | $1,325,547 |
| Net loss attributable to common stockholders | $1,920,568 | $1,325,547 |
| Basic and diluted loss per share | $0.26 | $0.27 |
| Cash used in operating activities | $1,901,634 | $2,361,336 |
Gross profit and margins are not meaningful because the company reported no revenue or cost of goods sold. Interest income was $65,197, versus $18,338 a year earlier; interest expense was $3,273, down from $60,281. The prior-year period also included a $92,959 loss on conversion of notes.
At March 31, 2024, cash and cash equivalents were $7.01 million, total current assets $7.64 million, total current liabilities $844,530, and stockholders’ equity $6.80 million. Current liabilities included $507,154 of short-term insurance financing; the filing reports no other outstanding debt balance. The company had an accumulated deficit of $11.68 million.
Changes versus the prior comparable period
- Operating expenses increased $775,073, or about 65%, with higher personnel and equity-compensation costs; R&D also reflected disease experts, expanded target-discovery work, and initiation of an obesity preclinical study.
- Net loss increased by $578,247, although reported loss per share decreased to $0.26 from $0.27 as the weighted-average share count grew.
- Operating cash use improved by $459,702, while financing cash provided was $6.29 million, compared with $7.72 million in Q1 2023.
- A February 2024 offering generated approximately $5.7 million net proceeds. Common shares outstanding rose from 6,094,644 at year-end 2023 to 7,850,550 at March 31, 2024; additional warrants and options create potential dilution.
Outlook, risks, and other notable items
- Management says available capital is expected to fund planned operations for approximately 12 months from the filing date, assuming no significant revenue in 2024. The company has incurred losses and negative operating cash flows since inception, and expects expenses to rise; there is no quantified revenue or profitability guidance.
- The company says it completed its first commercial service contract in Q3 2023 for $65,000, but reported no Q1 2024 revenue. Its plans depend on commercializing data-analysis work, securing partners, and advancing drug programs; success, timing, and future revenue are uncertain.
- The JHU-APL license carries minimum annual royalties of $300,000 for 2024 and beyond, in addition to applicable royalties and sublicense fees. The company accrued $75,000 of 2024 minimum royalties by quarter-end. Other licensed programs include potential milestone and royalty obligations.
- The February 2024 offering triggered anti-dilution adjustments to certain warrant exercise prices; the resulting $16,774 deemed dividend increased loss attributable to common stockholders, but did not change net loss.
- Disclosure describes changes to accounting processes, including a new external firm and transition toward an enterprise accounting platform, as intended to enhance financial-reporting controls. The filing text does not provide a clear, specific conclusion on the effectiveness of disclosure controls.
- The CEO’s Rule 10b5-1 plan permits sales of up to 1,000,000 shares through September 30, 2024 or until the limit is reached; 100,000 shares were sold under the plan in Q1 2024. The company reported no material legal proceedings or defaults upon senior securities.
Important facts for investors to verify
- Whether the company can obtain commercial revenue and partnerships soon enough to meet its operating plan and stated cash runway, particularly as expenses are expected to increase.
- The cash-burn trajectory, use of offering proceeds, and timing and amount of future financing needs.
- Potential dilution from outstanding warrants and options, including the new offering securities and warrant anti-dilution provisions.
- License-related minimum royalties, milestone payments, and sublicense obligations, and the progress and funding requirements of internal drug programs.
- The cover page marks “No” for having filed all required Exchange Act reports during the preceding 12 months; investors should verify the filing history and any implications.