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, 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 Merger Agreement with Petros, Merger Sub 1,
Merger Sub 2 and Metuchen. 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
equal to the quotient resulting from the formula of (i) 95,908,502 divided by
(ii) the number of our fully-diluted units outstanding immediately prior to the
effective time of the Mergers. As a result of the Neurotrope Merger, each
outstanding share of our common stock will be exchanged for one (1) share of
Petros common stock and each outstanding share of our preferred stock will be
exchanged for one (1) share of Petros preferred 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 stock and will be adjusted to
give effect to the exchange ratios set forth in the Merger Agreement.



  19

Upon 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.





In connection with the Mergers, we plan to spin-off our wholly-owned subsidiary,
Neurotrope Bioscience, Inc. Substantially all of our consolidated operations
were conducted through such subsidiary and substantially all of the consolidated
operating assets and liabilities of ours reside in such subsidiary. The Spin-Off
is planned to be made as a distribution to our 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 to be retained by Metuchen, subject to adjustment for
the proceeds from any exercise of our 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 our shares 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 securityholders and Metuchen and the listing
of the Petros common stock on the Nasdaq Stock Market after the Mergers. The
Company has not yet set a date for its shareholder meeting.

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 ?g 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 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 20?g 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.



  20







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).



In 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.



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



Registered Direct Offering



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 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.



  21






Director Resignations




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

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





                                            Three months ended
                                                 March 31,
                                                                           Dollar            %
                                           2020            2019            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 months ended March 31, 2020 and 2019.





Operating Expenses



Overview



Total operating expenses for the three months ended March 31, 2020 were
$2,608,211 as compared to $4,796,057 for the three months ended March 31, 2019,
a decrease of approximately 46%. 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.



  22







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.

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 $1,328,500 of general and administrative expenses for
the three months ended March 31, 2020 and 2019, respectively, an increase of
approximately 35%. Of the amounts for the three months ended March 31, 2020, as
compared to the comparable 2019 period: $652,060 was incurred primarily for
wages, bonuses, vacation pay, severance, taxes and insurance, versus $610,320
for the 2019 comparable period. The increase for the three months ending
March 31, 2020 is principally based upon contractual bonus payments made to
certain officers of $272,500; $318,973 was incurred for ongoing legal expenses
versus $76,088 for the 2019 comparable period based upon work associated with
our strategic alternatives and planning for our January 2020 capital raise;
$399,751 was incurred for outside operations 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 period.

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 for
the three months ended March 31, 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.





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.



  23







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.

Financial Condition, Liquidity and Capital Resources

Cash and Working Capital



Since inception, we have incurred negative cash flows from operations. As of
March 31, 2020, we had an accumulated deficit of $91,354,187 and had working
capital of $32,152,056 as compared to working capital of $17,397,094 as of
December 31, 2019. The $14,754,962 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 $1,762,427 plus
capital expenditures of $2,599.



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.)

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                 -

Net Cash Used in Operating Activities


Cash used in operating activities was $1,738,673 for the three months ended
March 31, 2020, compared to $4,816,621 for the three months ended March 31,
2019. The $3,077,948 decrease primarily resulted from the decreased net loss of
approximately $2.1 million and by the decrease in payable of approximately $1.7
million, offset by a decrease in non-cash stock-based compensation expenses of
approximately $800,000, for the three months ended March 31, 2020.

Net Cash Used in Investing Activities

Net cash used in investing activities was $2,599 for the three months ended March 31, 2020 compared to $5,214 for the three months ended March 31, 2019. The cash used in investing activities for both periods was for capital expenditures.





  24

Net Cash Provided by Financing Activities





Net cash provided by financing activities was $16,519,988 for the three months
ended March 31, 2020 compared to $0 for the three months ended March 31, 2019.
Net cash provided for the three months ended March 31, 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.



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, 2020, we had approximately $31.8 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."



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.

© Edgar Online, source Glimpses